Dreyfus Variable Investment Fund NCSR 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 811-5125

		Dreyfus Variable Investment 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)

		Mark N. Jacobs, Esq.
		200 Park Avenue
		New York, New York 10166
		(Name and address of agent for service)

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

Date of fiscal year end:		12/31

Date of reporting period:		12/31/06

				FORM N-CSR
Item 1.		Reports to Stockholders.

The 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 portfolio are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus portfolio.

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

		Contents

		T H E P O R T F O L I O

2		A Letter from the CEO
3		Discussion of Performance
6		Portfolio Performance
8		Understanding Your Portfolio’s Expenses
8		Comparing Your Portfolio’s Expenses
		With Those of Other Funds
9		Statement of Investments
12		Statement of Assets and Liabilities
13		Statement of Operations
14		Statement of Changes in Net Assets
16		Financial Highlights
18		Notes to Financial Statements
26		Report of Independent Registered
		Public Accounting Firm
27		Important Tax Information
27		Proxy Results
28		Board Members Information
31		Officers of the Fund
		F O R M O R E I N F O R M AT I O N

		Back Cover

Dreyfus Variable Investment Fund,

Appreciation Portfolio

The Portfolio

A LETTER FROM THE CEO

Dear Shareholder:

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

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

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

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

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

Thomas F. Eggers
Chief Executive Officer
The Dreyfus Corporation
January 16, 2007

DISCUSSION OF PERFORMANCE

Fayez Sarofim, Portfolio Manager
Fayez Sarofim & Co., Sub-Investment Adviser

How did Dreyfus Variable Investment Fund, Appreciation Portfolio perform relative to its benchmark?

For the 12-month period ended December 31, 2006, the portfolio’s Initial shares produced a total return of 16.48%, and its Service shares produced a total return of 16.21% .¹In comparison, the total return of the portfolio’s benchmark, the Standard & Poor’s 500 Composite Stock Price Index (“S&P 500 Index”), was 15.78% for the same period.²

After relatively lackluster performance during the first half of 2006, stocks rallied over the second half of the year, with particularly strong returns from the large, multinational corporations in which the portfolio primarily invests. Consequently, the portfolio produced higher returns than the S&P 500 Index. The portfolio’s returns were driven by especially attractive results in the energy sector, which has been an area of relatively heavy emphasis for some time.

What is the portfolio’s investment approach?

The portfolio normally invests at least 80% of its assets in common stocks. The portfolio focuses on large, well-established multinational growth companies that have demonstrated sustained patterns of profitability, strong balance sheets, an expanding global presence and the potential to achieve predictable above-average earnings growth. We focus on purchasing reasonably priced growth stocks of fundamentally sound companies in economic sectors that we believe will expand over the next three to five years or longer.

What other factors influenced the portfolio’s performance?

The U.S. stock market generally experienced two very different investment environments in 2006.The first six months of the year saw robust economic growth, intensifying inflation concerns and rising

The Portfolio 3

DISCUSSION OF PERFORMANCE (continued)

interest rates. Against this backdrop, stocks encountered heightened volatility as investors first worried that a relatively accommodative monetary policy might rekindle inflationary pressures, and then grew concerned that an overly aggressive Federal Reserve Board (the “Fed”) could trigger an economic recession.

These concerns began to subside over the second half of the year, as housing markets cooled, labor gains moderated and energy prices fell. The Fed lent credence to a more benign inflation outlook when it refrained from raising interest rates over the final six months of the year, its first pause in more than two years. Easing inflation worries, expectations of an economic “soft landing” and strong corporate earnings helped fuel a sustained market rally over the second half of the year, enabling the S&P 500 Index to end the year with a respectable gain.The second half of the year also marked a fundamental change in market leadership. Investors grew more risk-averse as the economy slowed, and they began to favor high-quality corporate giants over the lower-quality, small-cap companies that had led the market over the past several years.

Relatively heavy exposure to energy companies and a successful security selection strategy within the energy sector were the primary drivers of the portfolio’s strong relative performance. As might be expected, energy stocks generally gained value when crude oil and natural gas prices climbed to record highs during the summer. Unlike many smaller energy companies, the portfolio’s holdings of major integrated oil companies continued to produce robust earnings even when commodity prices retreated in the fall, mainly because their diversified operations provided a degree of protection from fluctuating oil and gas prices.As a result, industry leader Exxon Mobil ranked as the portfolio’s top performer for 2006.

In addition, the portfolio achieved relatively attractive results in the health care area, where stocks of large pharmaceutical companies rebounded from earlier weakness. U.S. drug developers’ product-development and regulatory problems began to ease, enabling the stocks of portfolio holdings such as Pfizer and Merck & Co. to recover

from relatively low valuations. Finally, a number of the portfolio’s consumer discretionary holdings fared well. Publisher The McGraw-Hill Companies benefited from ongoing strength in its textbook and financial divisions, while media conglomerate News Corp. gained value after its acquisition of the popular “MySpace” Internet site.

What is the portfolio’s current strategy?

We have continued to focus on our longstanding strategy of investing in leading corporations and holding them for the long term. Nonetheless, we eliminated the portfolio’s positions in consumer products provider Colgate Palmolive and media giant Time Warner due to company-specific issues that made them less attractive to us than other alternatives. We added three new positions to the portfolio: construction services company Fluor, financial services company Capital One and lodging chain Hilton Hotels.We believe that the portfolio is well positioned to benefit from a slower-growth environment in 2007, which we expect to favor well-established companies that have demonstrated their ability to produce consistent earnings under a variety of economic conditions.

January 16, 2007

		The portfolio is only available as a funding vehicle under variable life insurance policies or variable
		annuity contracts issued by insurance companies. Individuals may not purchase shares of the
		portfolio directly. A variable annuity is an insurance contract issued by an insurance company that
		enables investors to accumulate assets on a tax-deferred basis for retirement or other long-term
		goals.The investment objective and policies of Dreyfus Variable Investment Fund, Appreciation
		Portfolio made available through insurance products may be similar to other funds/portfolios
		managed or advised by Dreyfus. However, the investment results of the portfolio may be higher or
		lower than, and may not be comparable to, those of any other Dreyfus fund/portfolio.
¹		Total return includes reinvestment of dividends and any capital gains paid. Past performance is no
		guarantee of future results. Share price and investment return fluctuate such that upon redemption,
		portfolio shares may be worth more or less than their original cost.The portfolio’s performance does
		not reflect the deduction of additional charges and expenses imposed in connection with investing
		in variable insurance contracts, which will reduce returns.
²		SOURCE: LIPPER INC. — Reflects monthly reinvestment of dividends and, where
		applicable, capital gain distributions.The Standard & Poor’s 500 Composite Stock Price Index is
		a widely accepted, unmanaged index of U.S. stock market performance.

The Portfolio 5

PORTFOLIO PERFORMANCE

Comparison of change in value of $10,000 investment in Dreyfus Variable Investment Fund, Appreciation Portfolio Initial shares and Service shares and the Standard & Poor’s 500 Composite Stock Price Index

Average Annual Total Returns as of	12/31/06

	1 Year	5 Years	10 Years

Initial shares	16.48%	5.21%	8.00%
Service shares	16.21%	4.95%	7.83%

*The data for Service shares includes the results of Initial shares for the period prior to December 31, 2000*
*(inception date of Service shares). Actual Service shares’ average annual total return and hypothetical growth*
*results would have been lower. See notes below.*
^†Source: Lipper Inc.
Past performance is not predictive of future performance.The portfolio’s performance shown in the graph and table does not
reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares.
*The portfolio’s performance does not reflect the deduction of additional charges and expenses imposed in*
*connection with investing in variable insurance contracts which will reduce returns.*
The above graph compares a $10,000 investment made in Initial and Service shares of Dreyfus Variable Investment
Fund, Appreciation Portfolio on 12/31/96 to a $10,000 investment made in the Standard & Poor’s 500 Composite
Stock Price Index (the “Index”) on that date.
6

The portfolio’s Initial shares are not subject to a Rule 12b-1 fee.The portfolio’s Service shares are subject to a 0.25% annual Rule 12b-1 fee.The performance figures for Service shares reflect the performance of the portfolio’s Initial shares from their inception date through December 30, 2000, and the performance of the portfolio’s Service shares from December 31, 2000 (inception date of Service shares) to December 31, 2006 (blended performance figures).The blended performance figures have not been adjusted to reflect the higher operating expenses of the Service shares. If these expenses had been reflected, the blended performance figures would have been lower. All dividends and capital gain distributions are reinvested.

The portfolio’s performance shown in the line graph takes into account all applicable portfolio fees and expenses.The Index is a widely accepted, unmanaged index of U.S. stock market performance, which does not take into account charges, fees and other expenses. Further information relating to portfolio performance, including expense reimbursements, if applicable, is contained in the Financial Highlights section of the prospectus and elsewhere in this report.

The Portfolio 7

UNDERSTANDING YOUR

PORTFOLIO’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 portfolio’s prospectus or talk to your financial adviser.

Review your portfolio’s expenses

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

Expenses and Value of a $1,000 Investment
assuming actual returns for the six months ended December 31, 2006
	Initial Shares	Service Shares

Expenses paid per $1,000 ^†	$ 4.47	$ 5.87
Ending value (after expenses)	$1,136.20	$1,134.90

COMPARING YOUR PORTFOLIO’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 portfolio’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 portfolio with those of other funds. All mutual fund shareholder reports will provide this information to help you make this comparison. Please note that you cannot use this information to estimate your actual ending account balance and expenses paid during the period.

Expenses and Value of a $1,000 Investment assuming a hypothetical 5% annualized return for the six months ended December 31, 2006

	Initial Shares	Service Shares

Expenses paid per $1,000 ^†	$ 4.23	$ 5.55
Ending value (after expenses)	$1,021.02	$1,019.71

^†Expenses are equal to the portfolio’s annualized expense ratio of .83% for Initial shares and 1.09% for Service shares, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

STATEMENT OF INVESTMENTS
December 31, 2006

Common Stocks—100.0%	Shares	Value ($)

Banks—3.9%
Bank of America	291,216	15,548,022
HSBC Holdings, ADR	50,000 ^a	4,582,500
SunTrust Banks	128,600	10,860,270
		30,990,792
Capital Goods—7.2%
Emerson Electric	329,800	14,540,882
Fluor	40,000 ^a	3,266,000
General Electric	1,065,500	39,647,255
		57,454,137
Consumer Durables & Apparel—1.4%
Christian Dior	72,700 ^a	7,746,745
Polo Ralph Lauren	40,000 ^a	3,106,400
		10,853,145
Consumer Services—2.4%
Hilton Hotels	170,000 ^a	5,933,000
McDonald’s	304,500	13,498,485
		19,431,485
Diversified Financials—11.3%
American Express	250,500	15,197,835
Ameriprise Financial	61,500	3,351,750
Capital One Financial	85,000	6,529,700
Citigroup	601,524	33,504,887
JPMorgan Chase & Co.	365,100	17,634,330
Merrill Lynch & Co.	145,500	13,546,050
		89,764,552
Energy—17.7%
BP, ADR	133,000	8,924,300
Chevron	432,800	31,823,784
ConocoPhillips	215,000	15,469,250
Exxon Mobil	840,064	64,374,104
Occidental Petroleum	150,000	7,324,500
Royal Dutch Shell, Cl. A, ADR	59,800	4,233,242
Total, ADR	120,000	8,630,400
		140,779,580
Food & Staples Retailing—6.3%
SYSCO	100,000	3,676,000
Wal-Mart Stores	303,700	14,024,866

The Portfolio 9

STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)	Shares	Value ($)

Food & Staples Retailing (continued)
Walgreen	634,900	29,135,561
Whole Foods Market	70,000 ^a	3,285,100
		50,121,527
Food, Beverage & Tobacco—19.7%
Altria Group	720,400	61,824,728
Anheuser-Busch Cos.	185,100	9,106,920
Coca-Cola	661,500	31,917,375
Nestle, ADR	291,000	25,843,710
PepsiCo	443,900	27,765,945
		156,458,678
Health Care Services—.4%
UnitedHealth Group	60,000	3,223,800
Household & Personal Products—4.6%
Estee Lauder Cos., Cl. A	108,000	4,408,560
Procter & Gamble	500,000	32,135,000
		36,543,560
Insurance—.9%
American International Group	105,920	7,590,227
Materials—.9%
Praxair	121,000	7,178,930
Media—5.4%
McGraw-Hill Cos.	433,600	29,493,472
News, Cl. A	606,436	13,026,245
News, Cl. B	9,800	218,148
Viacom, Cl. B	10,150 ^b	416,455
		43,154,320
Pharmaceuticals & Biotechnology—8.8%
Abbott Laboratories	314,100	15,299,811
Eli Lilly & Co.	105,000	5,470,500
Johnson & Johnson	355,000	23,437,100
Merck & Co.	180,000	7,848,000
Pfizer	485,000	12,561,500
Roche Holding, ADR	64,000	5,736,320
		70,353,231
Retailing—1.5%
Target	216,900	12,374,145
Semiconductors & Equipment—3.0%
Intel	1,164,700	23,585,175

Common Stocks (continued)			Shares	Value ($)

Software & Services—3.5%
Automatic Data Processing			120,000	5,910,000
Microsoft			722,300	21,567,878
				27,477,878
Transportation—1.1%
United Parcel Service, Cl. B			116,800	8,757,664
Total Common Stocks
(cost $535,477,012)				796,092,826


Investment of Cash Collateral
for Securities Loaned—1.7%

Registered Investment Company;
Dreyfus Institutional Cash
Advantage Fund
(cost $13,238,261)			13,238,261 ^c	13,238,261


Total Investments (cost $548,715,273)			101.7%	809,331,087
Liabilities, Less Cash and Receivables			(1.7%)	(13,549,347)
Net Assets			100.0%	795,781,740

ADR—American Depository Receipts
^a	All or a portion of these securities are on loan. At December 31, 2006, the total market value of the portfolio’s
	securities on loan is $12,759,024 and the total market value of the collateral held by the portfolio is $13,238,261.
^b	Non-income producing security.
^c	Investment in affiliated money market mutual fund.




Portfolio Summary (Unaudited) ^†
		Value (%)		Value (%)

Food, Beverage & Tobacco		19.7	Household & Personal Products	4.6
Energy		17.7	Banks	3.9
Diversified Financials		11.3	Software & Services	3.5
Pharmaceuticals & Biotechnology		8.8	Semiconductors & Equipment	3.0
Capital Goods		7.2	Other	10.3
Food & Staples Retailing		6.3
Media		5.4		101.7

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

The Portfolio 11

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2006

	Cost	Value

Assets ($):
Investments in securities—See Statement of
Investments (including securities on loan,
valued at $12,759,024)—Note 1(c):
Unaffiliated issuers	535,477,012	796,092,826
Affiliated issuers	13,238,261	13,238,261
Cash		118,585
Dividends and interest receivable		1,326,013
Receivable for investment securities sold		226,817
Receivable for shares of Beneficial Interest subscribed		85,247
Prepaid expenses		47,039
		811,134,788

Liabilities ($):
Due to The Dreyfus Corporation and affiliates—Note 3(b)		328,482
Due to Fayez Sarofim & Co.		214,836
Liability for securities on loan—Note 1(c)		13,238,261
Payable for shares of Beneficial Interest redeemed		764,353
Bank note payable—Note 2		710,000
Interest payable—Note 2		23,275
Accrued expenses		73,841
		15,353,048

Net Assets ($)		795,781,740

Composition of Net Assets ($):
Paid-in capital		537,272,899
Accumulated undistributed investment income—net		11,896,886
Accumulated net realized gain (loss) on investments		(14,003,859)
Accumulated net unrealized appreciation
(depreciation) on investments		260,615,814

Net Assets ($)		795,781,740



Net Asset Value Per Share
	Initial Shares	Service Shares

Net Assets ($)	681,035,358	114,746,382
Shares Outstanding	16,004,996	2,711,410

Net Asset Value Per Share ($)	42.55	42.32

See notes to financial statements.

STATEMENT OF OPERATIONS
Year Ended December 31, 2006

Investment Income ($):
Income:
Cash dividends:
Unaffiliated issuers (net of $170,731 foreign taxes withheld at source)		18,301,799
Affiliated issuers		62,322
Income from securities lending		58,262
Total Income		18,422,383
Expenses:
Investment advisory fee—Note 3(a)		3,331,840
Sub-investment advisory fee—Note 3(a)		2,431,839
Distribution fees—Note 3(b)		237,160
Prospectus and shareholders’ reports		222,354
Trustees’ fees and expenses—Note 3(c)		77,470
Interest expense—Note 2		65,302
Custodian fees—Note 3(b)		62,213
Professional fees		52,112
Shareholder servicing costs—Note 3(b)		10,372
Loan commitment fees—Note 2		6,194
Miscellaneous		26,615
Total Expenses		6,523,471
Less—reduction in custody fees due
to earnings credits—Note 1(c)		(569)
Net Expenses		6,522,902
Investment Income—Net		11,899,481

Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):
Net realized gain (loss) on investments and
foreign currency transactions		26,807,980
Net unrealized appreciation (depreciation)
on investments and foreign currency transactions		78,292,140
Net Realized and Unrealized Gain (Loss) on Investments		105,100,120
Net Increase in Net Assets Resulting from Operations		116,999,601

See notes to financial statements.

The Portfolio 13

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,

	2006	2005

Operations ($):
Investment income—net	11,899,481	11,949,265
Net realized gain (loss) on investments	26,807,980	16,190,739
Net unrealized appreciation
(depreciation) on investments	78,292,140	6,752,030
Net Increase (Decrease) in Net Assets
Resulting from Operations	116,999,601	34,892,034

Dividends to Shareholders from ($):
Investment income—net:
Initial shares	(10,501,808)	(135,857)
Service shares	(1,443,242)	—
Total Dividends	(11,945,050)	(135,857)

Beneficial Interest Transactions ($):
Net proceeds from shares sold:
Initial shares	69,395,793	56,572,319
Service shares	40,577,961	29,036,589
Dividends reinvested:
Initial shares	10,501,808	135,857
Service shares	1,443,242	—
Cost of shares redeemed:
Initial shares	(174,553,296)	(170,386,472)
Service shares	(41,477,673)	(11,972,455)
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions	(94,112,165)	(96,614,162)
Total Increase (Decrease) in Net Assets	10,942,386	(61,857,985)

Net Assets ($):
Beginning of Period	784,839,354	846,697,339
End of Period	795,781,740	784,839,354
Undistributed investment income—net	11,896,886	11,942,179

	Year Ended December 31,

	2006	2005

Capital Share Transactions:
Initial Shares
Shares sold	1,796,884	1,561,261
Shares issued for dividends reinvested	280,272	3,818
Shares redeemed	(4,494,201)	(4,688,720)
Net Increase (Decrease) in Shares Outstanding	(2,417,045)	(3,123,641)

Service Shares
Shares sold	1,029,879	799,853
Shares issued for dividends reinvested	38,651	—
Shares redeemed	(1,097,163)	(330,659)
Net Increase (Decrease) in Shares Outstanding	(28,633)	469,194

See notes to financial statements.

The Portfolio 15

FINANCIAL HIGHLIGHTS

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

		Year Ended December 31,

Initial Shares	2006	2005	2004	2003	2002

Per Share Data ($):
Net asset value, beginning of period	37.11	35.56	34.42	28.79	34.98
Investment Operations:
Investment income—net ^a	.61	.54	.56	.43	.36
Net realized and unrealized
gain (loss) on investments	5.42	1.02	1.18	5.64	(6.19)
Total from Investment Operations	6.03	1.56	1.74	6.07	(5.83)
Distributions:
Dividends from investment income—net	(.59)	(.01)	(.60)	(.44)	(.36)
Net asset value, end of period	42.55	37.11	35.56	34.42	28.79

Total Return (%)	16.48	4.38	5.05	21.17	(16.71)

Ratios/Supplemental Data (%):
Ratio of total expenses
to average net assets	.82	.80	.79	.80	.78
Ratio of net expenses
to average net assets	.82	.80	.79	.80	.78
Ratio of net investment income
to average net assets	1.58	1.48	1.60	1.41	1.10
Portfolio Turnover Rate	3.86	2.67	1.64	4.60	6.61

Net Assets, end of period ($ x 1,000)	681,035	683,667	766,169	821,319	722,706

^aBased on average shares outstanding at each month end.
See notes to financial statements.

		Year Ended December 31,

Service Shares	2006	2005	2004	2003	2002

Per Share Data ($):
Net asset value, beginning of period	36.92	35.46	34.31	28.71	34.89
Investment Operations:
Investment income—net ^a	.51	.45	.46	.36	.29
Net realized and unrealized
gain (loss) on investments	5.41	1.01	1.19	5.61	(6.17)
Total from Investment Operations	5.92	1.46	1.65	5.97	(5.88)
Distributions:
Dividends from investment income—net	(.52)	—	(.50)	(.37)	(.30)
Net asset value, end of period	42.32	36.92	35.46	34.31	28.71

Total Return (%)	16.21	4.12	4.80	20.83	(16.89)

Ratios/Supplemental Data (%):
Ratio of total expenses
to average net assets	1.07	1.05	1.04	1.05	1.02
Ratio of net expenses
to average net assets	1.07	1.05	1.04	1.05	1.02
Ratio of net investment income
to average net assets	1.33	1.24	1.34	1.16	.91
Portfolio Turnover Rate	3.86	2.67	1.64	4.60	6.61

Net Assets, end of period ($ x 1,000)	114,746	101,172	80,529	89,121	60,572

^aBased on average shares outstanding at each month end.
See notes to financial statements.

The Portfolio 17

NOTES TO FINANCIAL STATEMENTS

NOTE 1—Significant Accounting Policies:

Dreyfus Variable Investment Fund (the “fund”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company, operating as a series company currently offering twelve series, including the Appreciation Portfolio (the “portfolio”). The portfolio is only offered to separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies.The portfolio is a diversified series. The portfolio’s investment objective is to provide long-term capital growth consistent with the preservation of capital. The Dreyfus Corporation (“the Manager” or “Dreyfus”) serves as the portfolio’s investment adviser. Dreyfus is a wholly-owned subsidiary of Mellon Financial Corporation (“Mellon Financial”). Fayez Sarofim & Co. (“Sarofim & Co.”) serves as the portfolio’s sub-investment adviser.

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

Dreyfus Service Corporation (the “Distributor”), a wholly-owned subsidiary of Dreyfus, is the distributor of the portfolio’s shares, which are sold without a sales charge.The portfolio is authorized to issue an unlimited number of $.001 par value shares of Beneficial Interest in each of the following classes of shares: Initial and Service. Each class of shares has identical rights and privileges, except with respect to the distribution plan and the expenses borne by each class and certain voting rights. Income, expenses (other than expenses attributable to a specific

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

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

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

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

(a) Portfolio valuation: Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sales price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Registered open-end investment companies that are not traded on an exchange are valued at their net asset value.When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the portfolio calculates its net asset value, the portfolio may value these investments at fair value as deter-

The Portfolio 19

NOTES TO FINANCIAL STATEMENTS (continued)

mined in accordance with the procedures approved by the Board of Trustees. Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant ADR’s and futures contracts. For other securities that are fair valued by the Board of Trustees, certain factors may be considered such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold and public trading in similar securities of the issuer or comparable issuers. Financial futures are valued at the last sales price. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward currency exchange contracts are valued at the forward rate.

On September 20, 2006, the Financial Accounting Standards Board (FASB) released Statement of Financial Accounting Standards No. 157 “Fair Value Measurements” (“FAS 157”). FAS 157 establishes an authoritative definition of fair value, sets out a framework for measuring fair value, and requires additional disclosures about fair-value measurements. The application of FAS 157 is required for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. Management does not believe that the application of this standard will have a material impact on the financial statements of the portfolio.

(b) Foreign currency transactions: The portfolio does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities, resulting from changes in exchange rates. Such gains and losses are included with net realized and unrealized gain or loss on investments.

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

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

Pursuant to a securities lending agreement with Mellon Bank, N.A., an affiliate of Dreyfus, the portfolio may lend securities to qualified institutions. It is the portfolio’s policy, that at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Cash collateral is invested in certain money market mutual funds managed by Dreyfus.The portfolio is entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction.Although each security loaned is fully collateralized, the portfolio bears the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner.

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

The Portfolio 21

NOTES TO FINANCIAL STATEMENTS (continued)

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

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

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

At December 31, 2006, the components of accumulated earnings on a tax basis were as follows: undistributed ordinary income $11,896,886,

accumulated capital losses $12,735,712 and unrealized appreciation $260,615,800. In addition, the portfolio had $1,268,133 of capital losses realized after October 31, 2006, which were deferred for tax purposes to the first day of the following fiscal year.

The accumulated capital loss carryover is available to be applied against future net securities profits, if any, realized subsequent to December 31, 2006. If not applied, $6,026,685 of the carryover expires in fiscal 2011 and $6,709,027 expires in fiscal 2012.

The tax character of distributions paid to shareholders during the fiscal periods ended December 31, 2006 and December 31, 2005 were as follows: ordinary income $11,945,050 and $135,857, respectively.

During the period ended December 31, 2006, as a result of permanent book to tax differences, primarily due to the tax treatment for foreign currency exchange gains and losses, the portfolio increased accumulated undistributed investment income-net by $276 and decreased accumulated net realized gain (loss) on investments by the same amount. Net assets were not affected by this reclassification.

NOTE 2—Bank Line of Credit:

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

The average daily amount of borrowings outstanding under the Facility during the period ended December 31, 2006 was approximately $1,187,900, with a related weighted average annualized interest rate of 5.50% .

The Portfolio 23

NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 3—Investment Advisory Fee, Sub-Investment Advisory Fee and Other Transactions With Affiliates:

(a) Pursuant to an Investment Advisory Agreement with Dreyfus, the investment advisory fee is based on the value of the portfolio’s average daily net assets and is computed at the following annual rates: .55% of the first $150 million; .50% of the next $150 million; and .375% over $300 million.The fee is payable monthly. Pursuant to a Sub-Investment Advisory Agreement with Sarofim & Co., the sub-investment advisory fee is based upon the value of the portfolio’s average daily net assets and is computed at the following annual rates: .20% of the first $150 million; .25% of the next $150 million; and .375% over $300 million.The fee is payable monthly.

(b) Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Service shares pay the Distributor for distributing their shares, for servicing and/or maintaining Service shares shareholder accounts and for advertising and marketing for Service shares.The Plan provides for payments to be made at an annual rate of .25% of the value of the Service shares’ average daily net assets.The Distributor may make payments to Participating Insurance Companies and to brokers and dealers acting as principal underwriter for their variable insurance products.The fees payable under the Plan are payable without regard to actual expenses incurred. During the period ended December 31, 2006, Service shares were charged $237,160 pursuant to the Plan.

The portfolio compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the portfolio. During the period ended December 31, 2006, the portfolio was charged $1,088 pursuant to the transfer agency agreement.

The portfolio compensates Mellon Bank, N.A., an affiliate of Dreyfus, under a custody agreement for providing custodial services for the portfolio. During the period ended December 31, 2006, the portfolio was charged $62,213 pursuant to the custody agreement.

During the period ended December 31, 2006, the portfolio was charged $4,204 for services performed by the Chief Compliance Officer.

The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consist of: investment advisory fees $291,274, Rule 12b-1 distribution plan fees $24,225, custodian fees $10,754, chief compliance officer fees $2,044 and transfer agency per account fees $185.

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

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

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended December 31, 2006, amounted to $29,695,060 and $119,532,300, respectively.

At December 31, 2006, the cost of investments for federal income tax purposes was $548,715,287; accordingly, accumulated net unrealized appreciation on investments was $260,615,800, consisting of $279,395,526 gross unrealized appreciation and $18,779,726 gross unrealized depreciation.

The Portfolio 25

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Shareholders and Board of Trustees

Dreyfus Variable Investment Fund, Appreciation Portfolio

We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Variable Investment Fund, Appreciation Portfolio (one of the funds comprising Dreyfus Variable Investment Fund) as of December 31, 2006, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the years indicated therein. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement.We were not engaged to perform an audit of the Fund’s internal control over financial reporting.Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting.Accordingly, we express no such opinion.An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006 by correspondence with the custodian. 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 Variable Investment Fund, Appreciation Portfolio at December 31,2006,the results of its operations for the year then ended,the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with U. S. generally accepted accounting principles.

New York, New York
February 6, 2007

IMPORTANT TAX INFORMATION (Unaudited)

For federal tax purposes, the portfolio hereby designates 100% of the ordinary dividends paid during the fiscal year ended December 31, 2006 as qualifying for the corporate dividends received deduction. Shareholders will receive notification in January 2007 of the percentage applicable to the preparation of their 2006 income tax returns.

PROXY RESULTS (Unaudited)

Dreyfus Variable Investment Fund held a special meeting of shareholders on June 29, 2006.The proposal considered at the meeting, and the results, are as follows:

		Shares

	Votes For		Authority Withheld

To elect additional Board Members:
Peggy C. Davis ^†	171,078,927		7,687,714
Joseph S. DiMartino	170,946,484		7,820,156
David P. Feldman	170,959,921		7,806,720
Ehud Houminer ^†	170,132,087		8,634,554
Gloria Messinger ^†	170,187,241		8,579,400
Anne Wexler ^†	170,212,607		8,554,033

^†Each new Board member’s term commenced on September 26, 2006.

In addition to Joseph S. DiMartino and David P. Feldman, James F. Henry, Dr. Paul A. Marks and Dr. Martin Peretz continue as Board members of the fund.

The Portfolio 27

BOARD MEMBERS INFORMATION (Unaudited)

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

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

Other Board Memberships and Affiliations:

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

No. of Portfolios for which Board Member Serves: 190

———————

Peggy C. Davis (63) Board Member (2006)

Principal Occupation During Past 5 Years:

Shad Professor of Law, New York University School of Law (1983-present)
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: 80

———————

David P. Feldman (67)
Board Member (1994)

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

Other Board Memberships and Affiliations:

BBH Mutual Funds Group (11 funds), Director
The Jeffrey Company, a private investment company, Director
QMED, a medical device company, Director

No. of Portfolios for which Board Member Serves: 57

James F. Henry (76)
Board Member (1990)

Principal Occupation During Past 5 Years:

President,The International Institute for Conflict Prevention and Resolution, a non-profit organization principally engaged in the development of alternatives to business litigation (Retired 2003)
Advisor to The Elaw Forum, a consultant on managing corporate legal costs
Advisor to John Jay Homestead (the restored home of the first U.S. Chief Justice)
Individual Trustee of several trusts

Other Board Memberships and Affiliations:

Director, advisor and mediator involved in several non-profit organizations, primarily engaged in domestic and international dispute resolution, and historic preservation

No. of Portfolios for which Board Member Serves: 48

———————

Ehud Houminer (66) Board Member (2006)

Principal Occupation During Past 5 Years:

• Executive-in-Residence at the Columbia Business School, Columbia University

Other Board Memberships and Affiliations:

Avnet Inc., an electronics distributor, Director
International Advisory Board to the MBA Program School of Management, Ben Gurion University, Chairman
Explore Charter School, Brooklyn, NY, Chairman

No. of Portfolios for which Board Member Serves: 78

———————

Gloria Messinger (77) Board Member (2006)

Principal Occupation During Past 5 Years:

Arbitrator for American Arbitration Association and National Association of Securities Dealers, Inc.
Consultant in Intellectual Property

Other Board Memberships and Affiliations:

Theater for a New Audience, Inc., Director
Brooklyn Philharmonic, Director

No. of Portfolios for which Board Member Serves: 48

The Portfolio 29

BOARD MEMBERS INFORMATION (Unaudited) (continued)

Dr. Martin Peretz (67)
Board Member (1990)

Principal Occupation During Past 5 Years:

Editor-in-Chief of The New Republic Magazine
Lecturer in Social Studies at Harvard University (1965-2002)
Director of TheStreet.com, a financial information service on the web

Other Board Memberships and Affiliations:

American Council of Trustees and Alumni, Director
Pershing Square Capital Management, Adviser
Montefiore Ventures, General Partner
Harvard Center for Blood Research,Trustee
Bard College,Trustee
Board of Overseers of YIVO Institute for Jewish Research, Chairman

No. of Portfolios for which Board Member Serves: 48

———————

Anne Wexler (76) Board Member (2006)

Principal Occupation During Past 5 Years:

Chairman of the Wexler & Walker Public Policy Associates, consultants specializing in government relations and public affairs

Other Board Memberships and Affiliations:

Wilshire Mutual Funds (5 funds), Director
Methanex Corporation, a methanol producing company, Director
Member of the Council of Foreign Relations
Member of the National Park Foundation

No. of Portfolios for which Board Member Serves: 57

———————

Once elected all Board Members serve for an indefinite term, but achieve Emeritus status on December 31^stof the calendar year in which the Board Member reaches age 80.The address of the Board Members and Officers is in c/o The Dreyfus Corporation, 200 Park Avenue, New York, New York 10166. Additional information about the Board Members is available in the fund’s Statement of Additional Information which can be obtained from Dreyfus free of charge by calling this toll free number: 1-800-554-4611.

John M. Fraser, Jr., Emeritus Board Member Rosalind G. Jacobs, Emeritus Board Member Dr. Paul A. Marks, Emeritus Board Member

OFFICERS OF THE FUND (Unaudited)

J. DAVID OFFICER, President since December 2006.

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

MARK N. JACOBS, Vice President since March 2000.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Portfolio 31

OFFICERS OF THE FUND (Unaudited) (continued)

JAMES WINDELS, Treasurer since November 2001.

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

ERIK D. NAVILOFF, Assistant Treasurer since December 2002.

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

ROBERT ROBOL, Assistant Treasurer since August 2003.

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

ROBERT SVAGNA, Assistant Treasurer since December 2002.

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

GAVIN C. REILLY, Assistant Treasurer since December 2005.

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

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

Chief Compliance Officer of the Manager and The Dreyfus Family of Funds (91 investment companies, comprised of 206 portfolios). From November 2001 through March 2004, Mr. Connolly was first Vice-President, Mutual Fund Servicing for Mellon Global Securities Services. In that capacity, Mr. Connolly was responsible for managing Mellon’s Custody, Fund Accounting and Fund Administration services to third-party mutual fund clients. He is 49 years old and has served in various capacities with the Manager since 1980, including manager of the firm’s Fund Accounting Department from 1997 through October 2001.

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

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

For More		Information




Dreyfus Variable		Custodian

Investment Fund,
		Mellon Bank, N.A.
Appreciation Portfolio
		One Mellon Bank Center
200 Park Avenue
		Pittsburgh, PA 15258
New York, NY 10166

		Transfer Agent &

Investment Adviser		Dividend Disbursing Agent

The Dreyfus Corporation
		Dreyfus Transfer, Inc.
200 Park Avenue
		200 Park Avenue
New York, NY 10166
		New York, NY 10166


Sub-Investment Advisor		Distributor

Fayez Sarofim & Co.
		Dreyfus Service Corporation
Two Houston Center
		200 Park Avenue
Suite 2907
		New York, NY 10166
Houston,TX 77010

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

The portfolio 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 portfolio’s Forms N-Q are available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-202-551-8090.

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

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

		Contents

		THE PORTFOLIO

2		A Letter from the CEO
3		Discussion of Performance
6		Portfolio Performance
8		Understanding Your Portfolio’s Expenses
8		Comparing Your Portfolio’s Expenses
		With Those of Other Funds
9		Statement of Investments
14		Statement of Assets and Liabilities
15		Statement of Operations
16		Statement of Changes in Net Assets
18		Financial Highlights
20		Notes to Financial Statements
29		Report of Independent Registered
		Public Accounting Firm
30		Important Tax Information
30		Proxy Results
31		Board Members Information
34		Officers of the Fund

FOR MORE INFORMATION

		Back Cover

Dreyfus Variable Investment Fund,

Balanced Portfolio

The Portfolio

A LETTER FROM THE CEO

Dear Shareholder:

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

2006 proved to be a good time for the financial markets, with rallies in the second half of the year propelling stock and bond prices higher.A number of factors contributed to the markets’ gains. Stocks benefited from an expanding domestic economy, an increase in mergers-and-acquisitions activity, strong investor demand and robust corporate profits. Bonds responded favorably to slower economic growth, subdued inflation, stabilizing short-term interest rates, a flat “yield curve” and persistently strong credit fundamentals.

In our analysis, 2006 provided an excellent reminder of the need for a long-term investment perspective. Adopting too short a time frame proved costly for some investors last year, as reducing allocations to stocks and bonds generally meant missing subsequent rallies. Indeed, history shows that reacting to near-term developments with extreme shifts in strategy rarely is the right decision. We believe that a better course is to set a portfolio mix to meet future goals, while attempting to ignore short term market fluctuations.

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

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

DISCUSSION OF PERFORMANCE

Thomas Plumb, Primary Portfolio Manager

Wisconsin Capital Management, LLC, Sub-Investment Adviser

How did Dreyfus Variable Investment Fund, Balanced Portfolio perform relative to its benchmarks?

For the 12-month period ended December 31, 2006, the portfolio’s total returns were 10.07% for its Initial shares and 9.87% for its Service shares.¹In comparison, the portfolio’s benchmark, a hybrid index composed of 60% Standard & Poor’s 500 Composite Stock Price Index (the “S&P 500 Index”) and 40% Lehman Brothers Intermediate Government/Credit Bond Index (the “Lehman Intermediate Bond Index”), achieved a total return of 11.10% for the reporting period.²Separately, the S&P 500 Index and the Lehman Intermediate Bond Index achieved total returns of 15.78% and 4.08%, respectively, for the reporting period.

Stocks and bonds rallied over the second half of 2006 as short-term interest rates stabilized and prospects improved for an economic “soft landing.” Our duration management and security selection strategies helped the bond portfolio outperform its benchmark, but the stock portfolio lagged industry averages when our shift in focus to larger companies proved to be somewhat premature.

What is the portfolio’s investment approach?

The portfolio seeks high total return through a combination of capital appreciation and current income.To pursue this goal, the portfolio invests in a diversified mix of stocks and fixed-income securities.The portfolio will vary the mix of stocks and bonds from time to time, but normally the portfolio will allocate more than 50% of its assets to stocks and the remainder to bonds and other fixed-income securities.

In allocating portfolio assets between stocks and bonds, the portfolio manager assesses the relative return and risk of each asset class, analyzing several factors, including general economic conditions, anticipated future changes in interest rates and the outlook for stocks generally.

In choosing stocks for the portfolio, the manager looks for high-quality companies that possess most of the following characteristics: leading market positions, high barriers to market entry and other competitive

The Portfolio 3

DISCUSSION OF PERFORMANCE (continued)

or technological advantages, high returns on equity and assets, good growth prospects, strong management, and relatively low debt burdens.

The portfolio normally invests at least 25% of its assets in fixed-income securities.The fixed-income securities in which the portfolio may invest include corporate bonds and other debt instruments, mortgage-related securities, asset-backed securities, debt securities issued or guaranteed by the U.S. government (including its agencies and instrumentalities), convertible debt securities and preferred stock that is convertible into common stock.

What other factors influenced the portfolio’s performance?

Early in 2006, robust economic growth and low inflation supported investors’ continued preference for the stocks of smaller, lower-quality companies that they believed could achieve high growth rates.As a result, many large, well-established companies remained out of favor, and their valuations fell well below historical averages. Meanwhile, relatively low inflation expectations enabled bond prices to remain resilient even as short-term interest rates climbed.In the spring,however,surging oil prices and hawkish comments from members of the Federal Reserve Board (the “Fed”) sparked corrections in the stock and bond markets. Fortunately, investor sentiment improved over the summer and early fall, when the economy slowed and the Fed refrained from further interest rate hikes.As economic conditions changed,the stock and bond markets rallied strongly.

In this environment, we allocated roughly 70% of the portfolio’s assets to stocks and about 30% to bonds, enabling the portfolio to participate more fully in the equity market’s rally. However, we intensified our focus on large-cap stocks early in the reporting period, where valuations appeared particularly attractive. Nonetheless, smaller stocks continued to outperform their “mega-cap” counterparts through August, causing the portfolio’s equity returns to lag its benchmark for the year overall. In addition, a handful of holdings in the public education, software services and mortgage banking industries did not make as much progress in their turnarounds as we expected.

These disappointments were somewhat offset by better results in other areas. Sporting goods retailer Cabela’s continued to impress investors with its expansion plans. Software giant Microsoft gained value with the introduction of several new products. Large pharmaceutical com-

panies, such as Merck & Co., rebounded as litigation concerns eased. Mortgage agency Fannie Mae rallied when interest rates stabilized. And large integrated energy producers Exxon Mobil and Chevron gained strength late in the reporting period as commodity prices moderated and investors turned to higher-quality companies.

We reduced the average duration of the portfolio’s bond portfolio early in the reporting period, which helped protect it from bouts of heightened market volatility. In addition, competitive levels of income from short-term corporate bonds contributed positively to total return.

What is the portfolio’s current strategy?

As the U.S. economy slows, we have maintained our focus on large companies in non-cyclical industries, including some of the world’s better known brand names. Many of these holdings remain attractively valued and derive a substantial amount of revenue from overseas markets, which could help protect the portfolio in the event of an unexpectedly severe U.S. economic slowdown. Among bonds, we have maintained a relatively short average duration in anticipation of stable long-term yields, even if short-term rates begin to fall.

January 16, 2007

		The portfolio is only available as a funding vehicle under variable life insurance policies or variable
		annuity contracts issued by insurance companies. Individuals may not purchase shares of the
		portfolio directly. A variable annuity is an insurance contract issued by an insurance company that
		enables investors to accumulate assets on a tax-deferred basis for retirement or other long-term
		goals.The investment objective and policies of Dreyfus Variable Investment Fund, Balanced
		Portfolio made available through insurance products may be similar to other funds/portfolios
		managed or advised by Dreyfus. However, the investment results of the portfolio may be higher or
		lower than, and may not be comparable to, those of any other Dreyfus fund/portfolio.
¹		Total return includes reinvestment of dividends and any capital gains paid. Past performance is no
		guarantee of future results. Share price and investment return fluctuate such that upon redemption,
		portfolio shares may be worth more or less than their original cost.The portfolio’s performance does
		not reflect the deduction of additional charges and expenses imposed in connection with investing
		in variable insurance contracts, which will reduce returns. Return figures provided reflect the
		absorption of certain portfolio expenses by The Dreyfus Corporation pursuant to an agreement in
		effect through December 31, 2007, at which time it may be extended, terminated or modified.
		Had these expenses not been absorbed, the portfolio’s returns would have been lower.
²		SOURCE: LIPPER, INC. — Reflects reinvestment of dividends and, where applicable, capital
		gain distributions.The Standard & Poor’s 500 Composite Stock Price Index is a widely accepted,
		unmanaged index of U.S. stock market performance.The Lehman Brothers Intermediate
		Government/Credit Bond Index is a widely accepted, unmanaged index of government and
		corporate bond market performance composed of U.S. government,Treasury and agency securities,
		fixed-income securities and nonconvertible investment-grade corporate debt, with an average
		maturity of 1-10 years.

The Portfolio 5

PORTFOLIO PERFORMANCE

Average Annual Total Returns	as of 12/31/06
	Inception			From
	Date	1 Year	5 Years	Inception

Initial shares	5/1/97	10.07%	2.78%	4.88%
Service shares	5/1/97	9.87%	2.65%	4.79%

The data for Service shares includes the results of Initial shares for the period prior to December 31, 2000

(inception date of Service shares). Actual Service shares’ average annual total return and hypothetical growth

results would have been lower. See notes below.

^†Source: Lipper Inc.

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

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

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

connection with investing in variable insurance contracts which will reduce returns.

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

Fund, Balanced Portfolio on 5/1/97 (inception date of Initial shares) to a $10,000 investment made in each of the

Standard & Poor’s 500 Composite Stock Price Index (the “S&P 500 Index”), the Lehman Brothers Intermediate Government/Credit Bond Index (the “Lehman Intermediate Bond Index”), a hybrid index composed of 60% S&P 500 Index and 40% Lehman Intermediate Bond Index (the “Hybrid Index”).The Hybrid Index is calculated on a year-to-year basis. For comparative purposes, the value of both indices on 4/30/97 is used as the beginning value on 5/1/97. The portfolio’s Initial shares are not subject to a Rule 12b-1 fee.The portfolio’s Service shares are subject to a 0.25% annual Rule 12b-1 fee.The performance figures for Service shares reflect the performance of the portfolio’s Initial shares from their inception date through December 30, 2000, and the performance of the portfolio’s Service shares from December 31, 2000 (inception date of Service shares) to December 31, 2006 (blended performance figures).The performance figures for each share class reflect certain expense reimbursements, without which the performance of each share class would have been lower. In addition, the blended performance figures have not been adjusted to reflect the higher operating expenses of the Service shares. If these expenses had been reflected, the blended performance figures would have been lower. All dividends and capital gain distributions are reinvested.

The portfolio’s performance shown in the line graph takes into account all applicable portfolio fees and expenses (after any expense reimbursements).The S&P 500 Index is a widely accepted, unmanaged index of U.S. stock market performance. The Lehman Intermediate Bond Index is a widely accepted, unmanaged index of government and corporate bond market performance composed of U.S. government,Treasury and agency securities, fixed-income securities and nonconvertible investment-grade corporate debt, with an average maturity of 1-10 years.The indices do not take into account charges, fees and other expenses. Further information relating to portfolio performance, including expense reimbursements, if applicable, is contained in the Financial Highlights section of the prospectus and elsewhere in this report.

The Portfolio 7

UNDERSTANDING YOUR

PORTFOLIO’S EXPENSES (Unaudited)

Review your portfolio’s expenses

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

Expenses and Value of a $1,000 Investment
assuming actual returns for the six months ended December 31, 2006
	Initial Shares	Service Shares

Expenses paid per $1,000 ^†	$ 4.84	$ 5.26
Ending value (after expenses)	$1,088.10	$1,087.60

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

Using the SEC’s method to compare expenses

Expenses and Value of a $1,000 Investment

assuming a hypothetical 5% annualized return for the six months ended December 31, 2006

	Initial Shares	Service Shares

Expenses paid per $1,000 ^†	$ 4.69	$ 5.09
Ending value (after expenses)	$1,020.57	$1,020.16

^†Expenses are equal to the portfolio’s annualized expense ratio of .92% for Initial shares and 1.00% for Service shares,

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

STATEMENT OF INVESTMENTS
December 31, 2006

Common Stocks—70.0%	Shares	Value ($)

Consumer Discretionary—10.8%
Apollo Group, Cl. A	14,800 ^a	576,756
Cabela’s	55,000 ^a,b	1,327,150
Career Education	32,000 ^a	792,960
Corinthian Colleges	123,700 ^a	1,686,031
Cost Plus	44,800 ^a,b	461,440
Home Depot	20,000	803,200
Interpublic Group of Cos.	22,800 ^a	279,072
Kohl’s	5,700 ^a	390,051
		6,316,660
Consumer Staples—5.7%
Coca-Cola	18,900	911,925
CVS	22,800	704,748
Nestle, ADR	9,600	852,576
Wal-Mart Stores	19,200	886,656
		3,355,905
Energy—4.7%
Chevron	18,700	1,375,011
Exxon Mobil	18,100	1,387,003
		2,762,014
Financial—15.4%
American International Group	20,900	1,497,694
Bank of America	21,900	1,169,241
Berkshire Hathaway, Cl. A	10 ^a	1,099,900
Citigroup	23,200	1,292,240
Doral Financial	115,000	330,050
Fannie Mae	20,800	1,235,312
Freddie Mac	7,400	502,460
JPMorgan Chase & Co.	25,500	1,231,650
Marsh & McLennan Cos.	21,300	653,058
		9,011,605
Health Care—14.4%
Bausch & Lomb	11,000	572,660
Cardinal Health	21,700	1,398,131
Johnson & Johnson	13,500	891,270
Medtronic	25,300	1,353,803

The Portfolio 9

STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)	Shares	Value ($)

Health Care (continued)
Merck & Co.	13,300	579,880
Pfizer	65,900	1,706,810
Wyeth	14,300	728,156
Zimmer Holdings	15,000 ^a	1,175,700
		8,406,410
Industrial—4.4%
General Electric	33,400	1,242,814
Tyco International	43,000	1,307,200
		2,550,014
Information Technology—14.6%
BISYS Group	48,800 ^a	630,008
Dell	15,500 ^a	388,895
Electronic Data Systems	42,600	1,173,630
First Data	26,700	681,384
Fiserv	22,100 ^a	1,158,482
Hewitt Associates, Cl. A	42,600 ^a	1,096,950
Microchip Technology	21,500	703,050
Microsoft	70,800	2,114,088
Western Union	28,000	627,760
		8,574,247
Total Common Stocks
(cost $34,802,450)		40,976,855


Preferred Stocks—1.9%

Consumer Discretionary—.4%
General Motors,
Cum., $1.84	12,000	229,350
Financial—.9%
Citigroup Capital VII,
Cum., $1.78	22,300	564,469
Telecommunication Services—.6%
Verizon South,
Ser. F, Cum. $1.75	12,800	325,600
Total Preferred Stocks
(cost $1,208,618)		1,119,419

	Coupon	Maturity	Principal
Bonds and Notes—26.4%	Rate (%)	Date	Amount ($)	Value ($)

Consumer Discretionary—3.3%

Tribune,
Unscd. Notes	4.88	8/15/10	2,000,000	1,907,292
Consumer Staples—1.7%
H.J. Heinz,
Notes	6.00	3/15/08	1,000,000 ^b	1,001,624
Energy—.8%
Marathon Oil,
Notes	5.38	6/1/07	500,000	499,867
Financial—9.1%
Bank of America,
Sr. Notes	4.38	12/1/10	445,000 ^b	432,907
Berkshire Hathaway Finance,
Notes	3.38	10/15/08	1,000,000	969,584
Countrywide Home Loan,
Notes, Ser. K	4.25	12/19/07	1,000,000	989,576
Ford Motor Credit,
Notes	5.56	3/13/07	35,000 ^c	34,781
Ford Motor Credit,
Notes	6.19	9/28/07	105,000 ^c	104,881
GMAC,
Notes	6.13	2/1/07	45,000 ^b	45,059
GMAC,
Notes	6.75	12/1/14	135,000 ^b	138,874
Hartford Life Insurance,
Sr. Unscd. Notes, Ser. incM	5.75	9/15/13	500,000	494,630
International Lease Finance,
Unsub. Notes	4.75	7/1/09	500,000	494,176
JPM Capital Trust I,
Gtd. Cap. Secs.	7.54	1/15/27	700,000	726,287
Marsh & McLennan Cos.,
Sr. Notes	7.13	6/15/09	850,000 ^b	878,855
				5,309,610
Industrial—1.3%
Cardinal Health,
Notes	6.75	2/15/11	750,000	786,426

The Portfolio 11

STATEMENT OF INVESTMENTS (continued)

	Coupon	Maturity	Principal
Bonds and Notes (continued)	Rate (%)	Date	Amount ($)	Value ($)

Telecommunication Services—3.8%

GTE Northwest,
Debs., Ser. C	6.30	6/1/10	1,700,000	1,734,794
New York Telephone,
Debs.	6.13	1/15/10	500,000	504,731
				2,239,525
U.S. Government Agencies—4.3%
Federal Home Loan Banks,
Bonds	4.50	7/12/10	500,000 ^c	496,381
Federal Home Loan Mortgage Corp.,
Notes	2.38	2/15/07	1,000,000	996,716
Federal Home Loan Mortgage Corp.,
Notes	3.75	4/15/07	500,000	498,046
Federal Home Loan Mortgage Corp.,
Notes	4.75	12/8/10	500,000	496,730
				2,487,873
U.S. Government Agencies/
Mortgage-Backed—.4%
Federal Home Loan Mortgage Corp.,
5.50%, 9/1/34			19,968	19,774
Federal National Mortgage Association:
5.50%, 9/1/34			79,214	78,390
6.00%, 9/1/34			132,209	133,242
				231,406
U.S. Government Securities—1.7%
U.S. Treasury Notes	6.13	8/15/07	1,000,000 ^b	1,006,641
Total Bonds and Notes
(cost $15,647,064)				15,470,264


Other Investment—.3%			Shares	Value ($)

Registered Investment Company;
Dreyfus Institutional Preferred
Plus Money Market Fund
(cost $151,000)			151,000 ^d	151,000

Investment of Cash Collateral
for Securities Loaned—3.8%			Shares	Value ($)

Registered Investment Company;
Dreyfus Institutional Cash
Advantage Plus Fund
(cost $2,224,276)			2,224,276 ^d	2,224,276


Total Investments (cost $54,033,408)			102.4%	59,941,814

Liabilities, Less Cash and Receivables			(2.4%)	(1,405,345)

Net Assets			100.0%	58,536,469

ADR—American Depository Receipts
^a	Non-income producing security.
^b	All or a portion of these securities are on loan. At December 31, 2006, the total market value of the portfolio’s
	securities on loan is $3,115,928 and the total market value of the collateral held by the portfolio is $3,275,526,
	consisting of cash collateral of $2,224,276 and U.S. Government and agency securities valued at $1,051,250.
^c	Variable rate security—interest rate subject to periodic change.
^d	Investment in affiliated money market mutual fund.





Portfolio Summary (Unaudited) ^†

		Value (%)		Value (%)

Corporate Bonds		20.0	Consumer Staples	5.7
Financial		16.3	Energy	4.7
Information Technology		14.6	Industrial	4.4
Health Care		14.4	Money Market Investments	4.1
Consumer Discretionary		11.2	Telecommunication Services	.6
U.S. Government & Agencies		6.4		102.4

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

The Portfolio 13

STATEMENT OF ASSETS AND LIABILITIES

December 31, 2006

	Cost	Value

Assets ($):
Investments in securities—See Statement
of Investments (including securities on loan,
valued at $3,115,928)—Note 1(c):
Unaffiliated issuers	51,658,132	57,566,538
Affiliated issuers	2,375,276	2,375,276
Cash		2,217
Receivable for investment securities sold		1,838,181
Dividends and interest receivable		244,750
Prepaid expenses and other assets		5,891
		62,032,853

Liabilities ($):
Due to The Dreyfus Corporation and affiliates—Note 3(b)		42,822
Liability for securities on loan—Note 1(c)		2,224,276
Payable for investment securities purchased		1,162,487
Accrued expenses		66,799
		3,496,384

Net Assets ($)		58,536,469

Composition of Net Assets ($):
Paid-in capital		69,050,308
Accumulated undistributed investment income—net		324,074
Accumulated net realized gain (loss) on investments		(16,746,319)
Accumulated net unrealized appreciation
(depreciation) on investments		5,908,406

Net Assets ($)		58,536,469



Net Asset Value Per Share
	Initial Shares	Service Shares

Net Assets ($)	41,811,731	16,724,738
Shares Outstanding	3,004,722	1,199,938

Net Assets Value Per Share ($)	13.92	13.94

See notes to financial statements.

STATEMENT OF OPERATIONS
Year Ended December 31, 2006

Investment Income ($):
Income:
Cash dividends (net of $5,059 foreign taxes withheld at source):
Unaffiliated issuers		775,748
Affiliated issuers		27,072
Interest		779,279
Income on securities lending		62,866
Total Income		1,644,965
Expenses:
Investment advisory fee—Note 3(a)		467,003
Distribution fees—Note 3(b)		43,239
Auditing fees		37,234
Prospectus and shareholders’ reports		30,261
Custodian fees—Note 3(b)		7,700
Trustees’ fees and expenses—Note 3(c)		7,194
Legal fees		1,975
Loan commitment fees—Note 2		504
Interest expense—Note 2		492
Shareholder servicing costs—Note 3(b)		292
Miscellaneous		12,924
Total Expenses		608,818
Less—waiver of fees due to undertaking—Note 3(a)		(31,743)
Net Expenses		577,075
Investment Income—Net		1,067,890

Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):
Net realized gain (loss) on investments		(176,543)
Net unrealized appreciation (depreciation) on investments		4,901,391
Net Realized and Unrealized Gain (Loss) on Investments		4,724,848
Net Increase in Net Assets Resulting from Operations		5,792,738

See notes to financial statements.

The Portfolio 15

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,

	2006	2005

Operations ($):
Investment income—net	1,067,890	1,052,254
Net realized gain (loss) on investments	(176,543)	305,484
Net unrealized appreciation
(depreciation) on investments	4,901,391	(2,479,092)
Net Increase (Decrease) in Net Assets
Resulting from Operations	5,792,738	(1,121,354)

Dividends to Shareholders from ($):
Investment income—net:
Initial shares	(952,807)	(933,459)
Service shares	(338,384)	(316,209)
Total Dividends	(1,291,191)	(1,249,668)

Beneficial Interest Transactions ($):
Net proceeds from shares sold:
Initial shares	802,344	763,690
Service shares	308,764	588,316
Dividends reinvested:
Initial shares	952,807	933,459
Service shares	338,384	316,209
Cost of shares redeemed:
Initial shares	(12,264,890)	(11,888,473)
Service shares	(3,337,048)	(4,057,658)
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions	(13,199,639)	(13,344,457)
Total Increase (Decrease) in Net Assets	(8,698,092)	(15,715,479)

Net Assets ($):
Beginning of Period	67,234,561	82,950,040
End of Period	58,536,469	67,234,561
Undistributed investment income—net	324,074	467,715

	Year Ended December 31,

	2006	2005

Capital Share Transactions:
Initial Shares
Shares sold	60,004	58,603
Shares issued for dividends reinvested	71,476	72,180
Shares redeemed	(925,609)	(916,292)
Net Increase (Decrease) in Shares Outstanding	(794,129)	(785,509)

Service Shares
Shares sold	23,593	45,287
Shares issued for dividends reinvested	25,327	24,427
Shares redeemed	(251,321)	(311,605)
Net Increase (Decrease) in Shares Outstanding	(202,401)	(241,891)

See notes to financial statements.

The Portfolio 17

FINANCIAL HIGHLIGHTS

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

			Year Ended December 31,

Initial Shares		2006	2005	2004	2003	2002

Per Share Data ($):
Net asset value, beginning of period		12.92	13.31	12.87	11.09	13.34
Investment Operations:
Investment income—net ^a		.23	.19	.22	.15	.19
Net realized and unrealized
gain (loss) on investments		1.06	(.35)	.50	1.84	(2.25)
Total from Investment Operations		1.29	(.16)	.72	1.99	(2.06)
Distributions:
Dividends from investment income—net		(.29)	(.23)	(.28)	(.21)	(.19)
Net asset value, end of period		13.92	12.92	13.31	12.87	11.09

Total Return (%)		10.07	(1.21)	5.64	18.14	(15.48)

Ratios/Supplemental Data (%):
Ratio of total expenses
to average net assets		.91	.91	.88	.89	.85
Ratio of net expenses
to average net assets		.90	.90	.88	.89	.85
Ratio of net investment income
to average net assets		1.74	1.45	1.73	1.26	1.58
Portfolio Turnover Rate		33.34	41.89	281.51^b	363.02^b	388.26

Net Assets, end of period ($ x 1,000)		41,812	49,094	61,038	67,239	64,865

^a	Based on average shares outstanding at each month end.
^b	The portfolio turnover rate excluding mortgage dollar roll transactions for the years ended December 31, 2004 and
	December 31, 2003 were 266.40% and 305.71%, respectively.
See notes to financial statements.

			Year Ended December 31,

Service Shares		2006	2005	2004	2003	2002

Per Share Data ($):
Net asset value, beginning of period		12.94	13.33	12.87	11.08	13.33
Investment Operations:
Investment income—net ^a		.22	.17	.21	.14	.17
Net realized and unrealized
gain (loss) on investments		1.04	(.34)	.50	1.84	(2.24)
Total from Investment Operations		1.26	(.17)	.71	1.98	(2.07)
Distributions:
Dividends from investment income—net		(.26)	(.22)	(.25)	(.19)	(.18)
Net asset value, end of period		13.94	12.94	13.33	12.87	11.08

Total Return (%)		9.87	(1.30)	5.57	18.02	(15.63)

Ratios/Supplemental Data (%):
Ratio of total expenses
to average net assets		1.16	1.16	1.13	1.14	1.09
Ratio of net expenses
to average net assets		1.00	1.00	1.00	1.00	1.00
Ratio of net investment income
to average net assets		1.64	1.35	1.62	1.15	1.45
Portfolio Turnover Rate		33.34	41.89	281.51^b	363.02^b	388.26

Net Assets, end of period ($ x 1,000)		16,725	18,141	21,912	23,313	22,040
^a	Based on average shares outstanding at each month end.
^b	The portfolio turnover rate excluding mortgage dollar roll transactions for the years ended December 31, 2004 and
	December 31, 2003 were 266.40% and 305.71%, respectively.
See notes to financial statements.

The Portfolio 19

NOTES TO FINANCIAL STATEMENTS

NOTE 1—Significant Accounting Policies:

Dreyfus Variable Investment Fund (the “fund”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company, operating as a series company currently offering twelve series, including the Balanced Portfolio (the “portfolio”). The portfolio is only offered to separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies.The portfolio is a diversified series. The portfolio’s investment objective seeks high total return through a combination of capital appreciation and current income. The Dreyfus Corporation (the “Manager” or “Dreyfus”) serves as the portfolio’s investment adviser. Dreyfus is a wholly-owned subsidiary of Mellon Financial Corporation (“Mellon Financial”). Wisconsin Capital Management LLC (“Wisconsin Capital”) serves as the portfolio’s sub-investment adviser.

Dreyfus Service Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager, is the distributor of the portfolio’s shares, which are sold without a sales charge.The portfolio is authorized to issue an unlimited number of $.001 par value shares of Beneficial Interest in each of the following classes of shares: Initial and Service. Each class of shares has identical rights and privileges, except with respect to the distribution plan and the expenses borne by each class and certain voting

rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.

(a) Portfolio valuation: Most debt securities are valued each business day by an independent pricing service (the “Service”) approved by the Board of Trustees. Securities listed on the National Market System, for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sale price. Debt securities 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 debt securities are carried at fair value as determined by the Service, based on methods which include consideration of: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Other securities are valued at the last sales price on the securities exchange or on the national securities market on which such securities are primarily traded. Securities listed on the National Market

The Portfolio 21

NOTES TO FINANCIAL STATEMENTS (continued)

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

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

Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized on securities transactions and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities, resulting from changes in exchange rates. Such gains and losses are included with net realized and unrealized gain or loss on investments.

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

The Portfolio 23

NOTES TO FINANCIAL STATEMENTS (continued)

secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Cash collateral is invested in certain money market mutual funds managed by Dreyfus.The portfolio is entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction.Although each security loaned is fully collateralized, the portfolio bears the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner.

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

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

in the course of preparing the portfolio’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year.Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Management does not believe that the application of this standard will have a material impact on the financial statements of the portfolio.

At December 31, 2006, the components of accumulated earnings on a tax basis were as follows: undistributed ordinary income $324,074, accumulated capital losses $16,221,480 and unrealized appreciation $5,383,567.

The accumulated capital loss carryover is available to be applied against future net securities profits, if any, realized subsequent to December 31, 2006. If not applied, $2,741,702 of the carryover expires in fiscal 2009, $8,289,370 expires in fiscal 2010, $3,878,353 expires in fiscal 2011 and $1,312,055 of the carryover expires in fiscal 2014.

The tax character of distributions paid to shareholders during the fiscal period ended December 31, 2006 and December 31, 2005, were as follows: ordinary income $1,291,191 and $1,249,668, respectively.

During the period ended December 31, 2006, as a result of permanent book to tax differences primarily due to the tax treatment for amortization of premiums and paydown gains and losses on mortgage backed securities, the portfolio increased accumulated undistributed investment income-net by $79,660 and decreased accumulated net realized gain (loss) on investments by the same amount. Net assets were not affected by this reclassification.

NOTE 2—Bank Line of Credit:

The Portfolio 25

NOTES TO FINANCIAL STATEMENTS (continued)

redemptions. In connection therewith, the portfolio has agreed to pay commitment fees on its pro rata portion of the Facility. Interest is charged to the portfolio based on prevailing market rates in effect at the time of borrowing.

The average daily amount of borrowings outstanding under the Facility during the period ended December 31, 2006, was approximately $9,000, with a related weighted average annualized interested rate of 5.46% .

NOTE 3—Investment Advisory Fee and Other Transactions With Affiliates:

(a) Pursuant to an Investment Advisory Agreement with Dreyfus, the investment advisory fee is computed at the annual rate of .75% of the value of the portfolio’s average daily net assets and is payable monthly.

Dreyfus has agreed, from January 1, 2006 to December 31, 2007, to waive receipt of its fees and/or assume the expenses of the portfolio so that the expenses of neither class, exclusive of taxes, brokerage fees, interest on borrowings, commitment fees and extraordinary expenses, exceed 1% of the value of the average daily net assets of their class. During the period ended December 31, 2006, Dreyfus waived receipt of fees of $31,743 pursuant to the undertaking.

Pursuant to a Sub-Investment Advisory Agreement between Dreyfus and Wisconsin Capital, the sub-investment advisory fee is payable monthly by Dreyfus, and is based upon the value of the portfolio’s average daily net assets, computed at the following annual rates:

Average Net Assets
0 to $300 million		.25%
In excess of $300 million		.20%

shareholder accounts and for advertising and marketing for Service shares.The Plan provides for payments to be made at an annual rate of .25% of the value of the Service shares’ average daily net assets. The Distributor may make payments to Participating Insurance Companies and to brokers and dealers acting as principal underwriter for their variable insurance products. The fees payable under the Plan are payable without regard to actual expenses incurred. During the period ended December 31, 2006, Service shares were charged $43,239 pursuant to the Plan.

During the period ended December 31, 2006, the portfolio was charged $4,204 for services performed by the Chief Compliance Officer.

The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consist of: investment advisory fees $37,507, Rule 12b-1 distribution plan fees $3,559, custodian fees $1,788, chief compliance officer fees $2,044 and transfer agency per account fees $10, which are offset against an expense reimbursement currently in effect in the amount of $2,086.

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

The Portfolio 27

NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales (including paydowns) of investment securities, excluding short-term securities, during the period ended December 31, 2006, amounted to $20,533,042 and $33,373,028, respectively.

At December 31, 2006, the cost of investments for federal income tax purposes was $54,558,247; accordingly, accumulated net unrealized appreciation on investments was $5,383,567, consisting of $7,766,074 gross unrealized appreciation and $2,382,507 gross unrealized depreciation.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Shareholders and Board of Trustees

Dreyfus Variable Investment Fund, Balanced Portfolio

We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Variable Investment Fund, Balanced Portfolio (one of the funds comprising the Dreyfus Variable Investment Fund) as of December 31, 2006, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the years indicated therein. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement.We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006 by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received. 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 Variable Investment Fund, Balanced Portfolio at December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with U.S. generally accepted accounting principles.

New York, New York
February 6, 2007

The Portfolio 29

IMPORTANT TAX INFORMATION (Unaudited)

For federal tax purposes, the portfolio hereby designates 63.30% of the ordinary dividends paid during the fiscal year ended December 31, 2006 as qualifying for the corporate dividends received deduction. Shareholders will receive notification in January 2007 of the percentage applicable to the preparation of their 2006 income tax returns.

PROXY RESULTS (Unaudited)

Dreyfus Variable Investment Fund held a special meeting of shareholders on June 29, 2006.The proposal considered at the meeting, and the results, are as follows:

		Shares

	Votes For		Authority Withheld

To elect additional Board Members:
Peggy C. Davis ^†	171,078,927		7,687,714
Joseph S. DiMartino	170,946,484		7,820,156
David P. Feldman	170,959,921		7,806,720
Ehud Houminer ^†	170,132,087		8,634,554
Gloria Messinger ^†	170,187,241		8,579,400
Anne Wexler ^†	170,212,607		8,554,033

^†Each new Board member’s term commenced on September 26, 2006.

In addition to Joseph S. DiMartino and David P. Feldman, James F. Henry, Dr. Paul A. Marks and Dr. Martin

Peretz continue as Board members of the fund.

BOARD MEMBERS INFORMATION (Unaudited)

Joseph S. DiMartino (63)

Chairman of the Board (1995)

Principal Occupation During Past 5 Years:

• Corporate Director and Trustee

Other Board Memberships and Affiliations:

• The Muscular Dystrophy Association, Director

• Century Business Services, Inc., a provider of outsourcing functions for small and medium size

companies, Director

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

mills and paperboard converting plants, Director

• Sunair Services Corporation, engaging in the design, manufacture and sale of high frequency

systems for long-range voice and data communications, as well as providing certain

outdoor-related services to homes and businesses, Director

No. of Portfolios for which Board Member Serves: 190

———————

Peggy C. Davis (63)

Board Member (2006)

Principal Occupation During Past 5 Years:

• Shad Professor of Law, New York University School of Law (1983-present)

• 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: 80

———————

David P. Feldman (67)

Board Member (1994)

Principal Occupation During Past 5 Years:

• Corporate Director and Trustee

Other Board Memberships and Affiliations:

• BBH Mutual Funds Group (11 funds), Director

• The Jeffrey Company, a private investment company, Director

• QMED, a medical device company, Director

No. of Portfolios for which Board Member Serves: 57

The Portfolio 31

BOARD MEMBERS INFORMATION (Unaudited) (continued)

James F. Henry (76)

Board Member (1990)

Principal Occupation During Past 5 Years:

• President,The International Institute for Conflict Prevention and Resolution, a non-profit

organization principally engaged in the development of alternatives to business litigation

(Retired 2003)

• Advisor to The Elaw Forum, a consultant on managing corporate legal costs

• Advisor to John Jay Homestead (the restored home of the first U.S. Chief Justice)

• Individual Trustee of several trusts

Other Board Memberships and Affiliations:

• Director, advisor and mediator involved in several non-profit organizations, primarily engaged

in domestic and international dispute resolution, and historic preservation

No. of Portfolios for which Board Member Serves: 48

———————

Ehud Houminer (66)

Board Member (2006)

Principal Occupation During Past 5 Years:

• Executive-in-Residence at the Columbia Business School, Columbia University

Other Board Memberships and Affiliations:

• Avnet Inc., an electronics distributor, Director

• International Advisory Board to the MBA Program School of Management, Ben Gurion

University, Chairman

• Explore Charter School, Brooklyn, NY, Chairman

No. of Portfolios for which Board Member Serves: 78

———————

Gloria Messinger (77)

Board Member (2006)

Principal Occupation During Past 5 Years:

• Arbitrator for American Arbitration Association and National Association of Securities Dealers, Inc.

• Consultant in Intellectual Property

Other Board Memberships and Affiliations:

• Theater for a New Audience, Inc., Director

• Brooklyn Philharmonic, Director

No. of Portfolios for which Board Member Serves: 48

Dr. Martin Peretz (67)

Board Member (1990)

Principal Occupation During Past 5 Years:

• Editor-in-Chief of The New Republic Magazine

• Lecturer in Social Studies at Harvard University (1965-2002)

• Director of TheStreet.com, a financial information service on the web

Other Board Memberships and Affiliations:

• American Council of Trustees and Alumni, Director

• Pershing Square Capital Management, Adviser

• Montefiore Ventures, General Partner

• Harvard Center for Blood Research,Trustee

• Bard College,Trustee

• Board of Overseers of YIVO Institute for Jewish Research, Chairman

No. of Portfolios for which Board Member Serves: 48

———————

Anne Wexler (76)

Board Member (2006)

Principal Occupation During Past 5 Years:

• Chairman of the Wexler & Walker Public Policy Associates, consultants specializing in

government relations and public affairs

Other Board Memberships and Affiliations:

• Wilshire Mutual Funds (5 funds), Director

• Methanex Corporation, a methanol producing company, Director

• Member of the Council of Foreign Relations

• Member of the National Park Foundation

No. of Portfolios for which Board Member Serves: 57

———————

Once elected all Board Members serve for an indefinite term, but achieve Emeritus status on December 31^stof the

calendar year in which the Board Member reaches age 80.The address of the Board Members and Officers is in c/o The

Dreyfus Corporation, 200 Park Avenue, New York, New York 10166. Additional information about the Board Members

is available in the fund’s Statement of Additional Information which can be obtained from Dreyfus free of charge by

calling this toll free number: 1-800-554-4611.

John M. Fraser, Jr., Emeritus Board Member

Rosalind G. Jacobs, Emeritus Board Member

Dr. Paul A. Marks, Emeritus Board Member

The Portfolio 33

OFFICERS OF THE FUND (Unaudited)

J. DAVID OFFICER, President since

December 2006.

MARK N. JACOBS, Vice President since

March 2000.

MICHAEL A. ROSENBERG, Vice President

and Secretary since August 2005.

JAMES BITETTO, Vice President and

Assistant Secretary since August 2005.

JONI LACKS CHARATAN, Vice President

and Assistant Secretary since

August 2005.

JOSEPH M. CHIOFFI, Vice President and

Assistant Secretary since August 2005.

JANETTE E. FARRAGHER, Vice President

and Assistant Secretary since

August 2005.

JOHN B. HAMMALIAN, Vice President and

Assistant Secretary since August 2005.

ROBERT R. MULLERY, Vice President and

Assistant Secretary since August 2005.

JEFF PRUSNOFSKY, Vice President and

Assistant Secretary since August 2005.

JAMES WINDELS, Treasurer since

November 2001.

ERIK D. NAVILOFF, Assistant Treasurer

since December 2002.

ROBERT ROBOL, Assistant Treasurer

since August 2003.

ROBERT SVAGNA, Assistant Treasurer

since December 2002.

GAVIN C. REILLY, Assistant Treasurer

since December 2005.

JOSEPH W. CONNOLLY, Chief Compliance

Officer since October 2004.

WILLIAM GERMENIS, Anti-Money

Laundering Compliance Officer since

September 2002.

The Portfolio 35

NOTES

For		More		Information

Dreyfus Variable

Investment Fund,

Balanced Portfolio

200 Park Avenue

New York, NY 10166

Investment Adviser

The Dreyfus Corporation

200 Park Avenue

New York, NY 10166

Sub-Investment Adviser

Wisconsin Capital Management LLC

1200 John Q. Hammons Drive

Madison,Wisconsin 53717

Custodian

Mellon Bank, N.A.

One Mellon Bank Center

Pittsburgh, PA 15258

Transfer Agent &

Dividend Disbursing Agent

Dreyfus Transfer, Inc.

200 Park Avenue

New York, NY 10166

Distributor

Dreyfus Service Corporation

200 Park Avenue

New York, NY 10166

Telephone 1-800-554-4611 or 516-338-3300

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

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

		Contents

		T H E P O R T F O L I O

2		A Letter from the CEO
3		Discussion of Performance
6		Portfolio Performance
8		Understanding Your Portfolio’s Expenses
8		Comparing Your Portfolio’s Expenses
		With Those of Other Funds
9		Statement of Investments
17		Statement of Assets and Liabilities
18		Statement of Operations
19		Statement of Changes in Net Assets
21		Financial Highlights
23		Notes to Financial Statements
31		Report of Independent Registered
		Public Accounting Firm
32		Important Tax Information
32		Proxy Results
33		Board Members Information
36		Officers of the Fund

		F O R M O R E I N F O R M AT I O N

		Back Cover

Dreyfus Variable Investment Fund,

Developing Leaders Portfolio

The Portfolio

A LETTER FROM THE CEO

Dear Shareholder:

We are pleased to present this annual report for Dreyfus Variable Investment Fund, Developing Leaders Portfolio, covering the 12-month period from January 1, 2006, through December 31, 2006.

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

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

Thomas F. Eggers
Chief Executive Officer
The Dreyfus Corporation
January 16, 2007

DISCUSSION OF PERFORMANCE

Franklin Portfolio Associates Smallcap Team, Portfolio Managers

How did Dreyfus Variable Investment Fund, Developing Leaders Portfolio perform relative to its benchmark?

For the 12-month period ended December 31, 2006, the portfolio produced total returns of 3.77% for its Initial shares and 3.52% for its Service shares.¹In comparison, the Russell 2000 Index (the “Index”), the portfolio’s benchmark, produced a total return of 18.37% for the same period.²

The rise in the small-cap market during 2006 was driven primarily by unexpectedly strong U.S. economic growth despite higher short-term interest rates, volatile energy prices and weakening housing markets.A wide array of companies exceeded their earnings and revenue estimates, pushing stock prices broadly higher, especially among highly leveraged, less financially stable issues.The portfolio participated in the market’s rise to a degree. However, the portfolio’s emphasis on higher-quality companies with relatively strong balance sheets and lower leverage undermined its returns compared to the benchmark. In addition, company-specific disappointments took a toll on the portfolio’s performance, particularly in the technology sector. As a result, the portfolio’s returns substantially lagged the benchmark.

What is the portfolio’s investment approach?

The portfolio seeks to identify undervalued small-cap stocks using a quantitative screening process.This process is driven by a proprietary quantitative model, which uses more than 40 factors to identify and rank individual stocks. Next, we focus on “bottom-up” stock selection as opposed to making proactive decisions about industry or sector exposures. Over time, we attempt to construct a portfolio that has exposure to industries and market capitalizations generally similar to the portfolio’s benchmark.Within each sector, we seek to overweight the most attractive stocks and underweight or not hold the stocks that have been ranked least attractive.

What other factors influenced the portfolio’s performance?

The small-cap stock market experienced high levels of uncertainty throughout 2006 in response to conflicting economic forces and shifting investor sentiment. Stock prices rose strongly in the first quarter,

The Portfolio 3

DISCUSSION OF PERFORMANCE (continued)

then declined sharply in the spring and early summer, setting new lows for the year in June and July as investors became more risk-averse in response to rising interest rates and increasing inflationary pressures. However, short-term interest rates stabilized in August and energy prices subsequently declined, easing investors’ inflation-related concerns and giving rise to expectations that the U.S. economy was headed for a “soft landing.”As a result, stocks rose during the final months of the year.

Stocks with favorable long-term growth estimates and strong relative price behavior, which are ranked highly within our quantitative stock ranking models, performed relatively worse this year than stocks with lower long-term growth estimates and less strong relative price behavior.Also, stocks with greater financial leverage and higher balance sheet risk, which our process tends to avoid, outperformed over the reporting period.

Unexpected company-specific financial difficulties proved to be another factor undermining the portfolio’s performance in 2006.The portfolio encountered a number of such difficulties in the technology sector. Notably weak holdings, which were eventually sold, included electronic component manufacturer Multi-Fineline Electronix, which missed revenue and sales targets; and media-related semiconductor maker PortalPlayer, which lost a key contract with a major customer and later was acquired by a competitor. Outside of the technology sector, returns also suffered from the portfolio’s exposure to temporary staffing company Spherion, which reduced its earnings and revenue estimates several times during the reporting period.

Additionally, rising commodity prices and interest rates took a heavy toll on housing-related stocks in the portfolio.Investments in home builders, such as Brookfield Homes, which was sold during the reporting period, reported growing revenues and better-than-expected earnings during the reporting period. However, financial markets discounted the prices of such stocks over concerns that financial pressures on home buyers would depress housing starts. Investments in other industry groups with exposure to the housing market also suffered declines. For example, the portfolio’s holdings in Conn’s, a retailer that focuses on home appliances and electronics, lost significant ground during the first nine months of the year. Similarly, in the financials sector, commercial and residential real estate lender Fremont General lost value from January through early September in response to investor misgivings regarding the sustainability of housing-related loan activity.

Better performing segments of the portfolio included positions in the energy and industrials areas, which enabled the portfolio to produce good returns compared to the benchmark in those sectors. In addition, the portfolio’s perennial tilt toward stocks that are cheaper as measured by earnings yield also added value. In the aggregate, however, these bright spots were unable to overcome the ineffectiveness of the growth/momentum factors, and the market’s bidding up of lower “quality” stocks in the small-cap universe during the reporting period.

What is the portfolio’s current strategy?

We remain committed to our disciplined approach to adding value through our bottom-up, quantitatively based investment process. Our effort to identify the market’s more promising small-cap investment opportunities within each sector and industry remains the hallmark of our investment strategy.At the same time, we have continued to focus on evenly balancing growth and value considerations as we strive to identify stocks that we consider reasonably valued and poised for above-average growth. We have continued to approximate both the sector and industry composition of the benchmark, maintaining the portfolio’s sector-neutral profile.

January 16, 2007

		The portfolio is only available as a funding vehicle under various life insurance policies or variable
		annuity contracts issued by insurance companies. Individuals may not purchase shares of the
		portfolio directly. A variable annuity is an insurance contract issued by an insurance company that
		enables investors to accumulate assets on a tax-deferred basis for retirement or other long-term
		goals.The investment objective and policies of Dreyfus Variable Investment Fund, Developing
		Leaders Portfolio made available through insurance products may be similar to other
		funds/portfolios managed or advised by Dreyfus. However, the investment results of the portfolio
		may be higher or lower than, and may not be comparable to, those of any other Dreyfus
		fund/portfolio.
¹		Total return includes reinvestment of dividends and any capital gains paid. Past performance is no
		guarantee of future results. Share price and investment return fluctuate such that upon redemption,
		portfolio shares may be worth more or less than their original cost.The portfolio’s performance does
		not reflect the deduction of additional charges and expenses imposed in connection with investing
		in variable insurance contracts, which will reduce returns.
²		SOURCE: LIPPER INC. — Reflects reinvestment of dividends and, where applicable, capital
		gain distributions.The Russell 2000 Index is an unmanaged index of small-cap stock
		performance and is composed of the 2,000 smallest companies in the Russell 3000 Index.The
		Russell 3000 Index is composed of the 3,000 largest U.S. companies based on total market
		capitalization.
		Franklin Portfolio Associates is an independently managed, wholly owned subsidiary of Mellon
		Financial Corporation. Franklin Portfolio Associates has no affiliation to the Franklin Templeton
		Group of Funds or Franklin Resources, Inc.The portfolio’s managers are dual employees of
		Franklin Portfolio Associates and Dreyfus.

The Portfolio 5

PORTFOLIO PERFORMANCE

Average Annual Total Returns as of	12/31/06

	1 Year	5 Years	10 Years

Initial shares	3.77%	5.42%	6.76%
Service shares	3.52%	5.16%	6.59%

*The data for Service shares includes the results of Initial shares for the period prior to December 31, 2000*
*(inception date of Service shares). Actual Service shares’ average annual total return and hypothetical growth*
*results would have been lower. See notes below.*
^†Source: Lipper Inc.
Past performance is not predictive of future performance.The portfolio’s performance shown in the graph and table does not
reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares.
*The portfolio’s performance does not reflect the deduction of additional charges and expenses imposed in*
*connection with investing in variable insurance contracts which will reduce returns.*
The above graph compares a $10,000 investment made in Initial and Service shares of Dreyfus Variable Investment
Fund, Developing Leaders Portfolio on 12/31/96 to a $10,000 investment made in the Russell 2000 Index (the
“Index”) on that date.

The portfolio’s performance shown in the line graph takes into account all applicable portfolio fees and expenses.The Index is an unmanaged index and is composed of the 2,000 smallest companies in the Russell 3000 Index.The Russell 3000 Index is composed of 3,000 of the largest U.S. companies by market capitalization.The Index does not take into account charges, fees and other expenses. Further information relating to portfolio performance, including expense reimbursements, if applicable, is contained in the Financial Highlights section of the prospectus and elsewhere in this report.

The Portfolio 7

UNDERSTANDING YOUR
PORTFOLIO’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 portfolio’s prospectus or talk to your financial adviser.

Review your portfolio’s expenses

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

Expenses and Value of a $1,000 Investment
assuming actual returns for the six months ended December 31, 2006
	Initial Shares	Service Shares

Expenses paid per $1,000 ^†	$ 4.46	$ 5.75
Ending value (after expenses)	$1,056.10	$1,054.80

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

Using the SEC’s method to compare expenses

Expenses and Value of a $1,000 Investment assuming a hypothetical 5% annualized return for the six months ended December 31, 2006

	Initial Shares	Service Shares

Expenses paid per $1,000 ^†	$ 4.38	$ 5.65
Ending value (after expenses)	$1,020.87	$1,019.61

^†Expenses are equal to the portfolio’s annualized expense ratio of .86% for Initial shares and 1.11% for Service shares, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

STATEMENT OF INVESTMENTS
December 31, 2006

Common Stocks—99.7%	Shares	Value ($)

Commercial & Professional Services—9.9%
Agilysys	201,400	3,371,436
Anixter International	100,900 ^a	5,478,870
Brightpoint	262,080 ^a,b	3,524,976
Cenveo	271,300 ^a	5,751,560
COMSYS IT Partners	171,300 ^a	3,461,973
Consolidated Graphics	30,800 ^a	1,819,356
CRA International	29,200 ^a,b	1,530,080
Forrester Research	31,500 ^a	853,965
IKON Office Solutions	363,300 ^b	5,947,221
John H. Harland	90,000	4,518,000
Kforce	205,600 ^a,b	2,502,152
LECG	48,800 ^a	901,824
MPS Group	220,500 ^a,b	3,126,690
Portfolio Recovery Associates	102,100 ^a,b	4,767,049
Ritchie Brothers Auctioneers	44,200	2,366,468
Rush Enterprises, Cl. A	113,200 ^a	1,915,344
ScanSource	53,100 ^a	1,614,240
Spherion	450,700 ^a	3,348,701
Stamps.com	129,500 ^a	2,039,625
Viad	149,200	6,057,520
		64,897,050
Communications—1.6%
Centennial Communications	171,100	1,230,209
Commonwealth Telephone Enterprises	90,600	3,792,516
CT Communications	232,000 ^b	5,317,440
		10,340,165
Consumer Durables—.9%
Avatar Holdings	19,200 ^a,b	1,552,320
Charles & Colvard	77,825 ^b	622,600
Ethan Allen Interiors	60,000 ^b	2,166,600
WMS Industries	45,100 ^a	1,572,186
		5,913,706
Consumer Non-Durables—2.9%
Imperial Sugar	215,300	5,212,413
K-Swiss, Cl. A	30,700	943,718
Kellwood	124,000 ^b	4,032,480

The Portfolio 9

STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)	Shares	Value ($)

Consumer Non-Durables (continued)
Mannatech	198,400 ^b	2,922,432
NBTY	35,800 ^a	1,488,206
USANA Health Sciences	83,100 ^a,b	4,292,946
		18,892,195
Consumer Services—4.8%
Corinthian Colleges	130,600 ^a	1,780,078
Great Wolf Resorts	75,300 ^a	1,051,188
Jack in the Box	118,000 ^a	7,202,720
Jackson Hewitt Tax Service	39,300	1,335,021
Lakes Entertainment	59,500 ^a,b	642,005
Pinnacle Entertainment	189,800 ^a	6,289,972
Priceline.com	65,700 ^a,b	2,865,177
Ruby Tuesday	35,500	974,120
Sinclair Broadcast Group, Cl. A	362,200	3,803,100
Vail Resorts	73,000 ^a,b	3,271,860
World Wrestling Entertainment	146,700	2,391,210
		31,606,451
Electronic Technology—11.2%
Advanced Energy Industries	100,600 ^a,b	1,898,322
Aeroflex	382,300 ^a	4,480,556
American Science & Engineering	50,300 ^a,b	2,993,353
Arris Group	264,200 ^a	3,305,142
Broadwing	191,700 ^a,b	2,994,354
Ceradyne	58,800 ^a,b	3,322,200
Coherent	113,300 ^a	3,576,881
Exar	301,766 ^a	3,922,958
InterDigital Communications	190,400 ^a,b	6,387,920
Intevac	191,600 ^a,b	4,972,020
Methode Electronics	66,500	720,195
MIPS Technologies	231,000 ^a	1,917,300
Newport	125,000 ^a	2,618,750
OmniVision Technologies	276,900 ^a,b	3,779,685
Orbital Sciences	232,700 ^a	4,290,988
Power Integrations	135,600 ^a	3,179,820

Common Stocks (continued)	Shares	Value ($)

Electronic Technology (continued)
Semtech	88,100^a	1,151,467
Silicon Image	493,100^a	6,272,232
SpectraLink	172,300^a	1,481,780
Trident Microsystems	215,000^a	3,908,700
Triumph Group	84,400^b	4,425,092
Vicor	131,000	1,455,410
		73,055,125
Energy Minerals—1.0%
EXCO Resources	67,800^a	1,146,498
Harvest Natural Resources	397,800^a,b	4,228,614
PetroHawk Energy	75,700^a	870,550
		6,245,662
Finance—23.0%
21st Century Insurance Group	44,200	780,130
Arbor Realty Trust	130,400	3,923,736
Argonaut Group	46,800^a	1,631,448
BankUnited Financial, Cl. A	193,900^b	5,421,444
Boston Private Financial Holdings	194,300^b	5,481,203
Citizens Banking	136,500^b	3,617,250
Commerce Group	113,500^b	3,376,625
Corus Bankshares	264,000^b	6,090,480
Deerfield Triarc Capital	178,200^b	3,016,926
Equity Inns	248,300^b	3,962,868
Equity One	70,600^b	1,882,196
Extra Space Storage	100,400	1,833,304
FelCor Lodging Trust	259,100	5,658,744
First BanCorp/Puerto Rico	80,900	770,977
First Community Bancorp/CA	37,700^b	1,970,579
First Midwest Bancorp/IL	122,900^b	4,753,772
First Niagara Financial Group	259,900	3,862,114
First Republic Bank/San Francisco, CA	40,800	1,594,464
FirstFed Financial	109,900^a,b	7,360,003
Fremont General	346,400^b	5,615,144
Getty Realty	86,100	2,660,490

The Portfolio 11

STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)	Shares	Value ($)

Finance (continued)
Heritage Commerce	19,000	506,160
Highland Hospitality	172,000	2,451,000
HomeBanc/Atlanta, GA	236,800 ^b	1,001,664
Inland Real Estate	234,000 ^b	4,380,480
Innkeepers USA Trust	298,000	4,619,000
Knight Capital Group, Cl. A	404,600 ^a	7,756,182
LaSalle Hotel Properties	109,600	5,025,160
MAF Bancorp	88,800	3,968,472
National Health Investors	45,300	1,494,900
National Retail Properties	161,000 ^b	3,694,950
Ocwen Financial	336,900 ^a,b	5,343,234
Ohio Casualty	155,200 ^b	4,626,512
Omega Healthcare Investors	282,200 ^b	5,000,584
Pacific Capital Bancorp	129,800 ^b	4,358,684
PICO Holdings	20,800 ^a	723,216
Ramco-Gershenson Properties	65,500	2,498,170
Republic Bancorp/MI	168,700	2,270,702
Spirit Finance	240,800 ^b	3,002,776
Sunterra	47,500 ^a	572,375
Trustco Bank NY	99,400 ^b	1,105,328
UCBH Holdings	96,300	1,691,028
W Holding	261,600	1,559,136
Western Alliance Bancorp	65,800 ^a,b	2,287,866
Wilshire Bancorp	44,600 ^b	846,062
Wintrust Financial	69,900	3,356,598
Zenith National Insurance	29,400	1,379,154
		150,783,290
Health Care Technology—8.0%
Alpharma, Cl. A	103,700	2,499,170
Aspect Medical Systems	196,400 ^a,b	3,694,284
AtheroGenics	118,300 ^a,b	1,172,353
Auxilium Pharmaceuticals	164,400 ^a,b	2,415,036
BioMarin Pharmaceutical	153,700 ^a	2,519,143
Diversa	77,500 ^a,b	843,200
Exelixis	199,600 ^a,b	1,796,400
Geron	394,300 ^a,b	3,461,954

Common Stocks (continued)	Shares	Value ($)

Health Care Technology (continued)
Immucor	202,500 ^a	5,919,075
IntraLase	253,700 ^a,b	5,677,806
Lifecell	25,300 ^a	610,742
Medicines	85,600 ^a	2,715,232
Molecular Devices	53,500 ^a,b	1,127,245
NeuroMetrix	48,300 ^a,b	720,153
Palomar Medical Technologies	113,800 ^a,b	5,766,246
Progenics Pharmaceuticals	104,900 ^a,b	2,700,126
Sciele Pharma	231,400 ^a	5,553,600
Telik	83,200 ^a,b	368,576
United Therapeutics	52,200 ^a,b	2,838,114
		52,398,455
Industrial Services—2.6%
Grey Wolf	637,500 ^a,b	4,373,250
Hornbeck Offshore Services	79,000 ^a,b	2,820,300
Trico Marine Services	141,700 ^a,b	5,428,527
W-H Energy Services	95,400 ^a	4,645,026
		17,267,103
Non-Energy Minerals—3.3%
Chaparral Steel	98,100	4,342,887
Metal Management	138,900 ^b	5,257,365
Olin	354,100	5,849,732
Steel Dynamics	198,600 ^b	6,444,570
		21,894,554
Process Industries—5.7%
AEP Industries	48,400 ^a	2,580,204
Delta & Pine Land	105,800	4,279,610
GrafTech International	729,100 ^a,b	5,045,372
Headwaters	233,100 ^a,b	5,585,076
Myers Industries	163,400	2,558,844
Pioneer Cos.	96,900 ^a	2,777,154
PW Eagle	125,600 ^b	4,333,200
Rogers	46,500 ^a	2,750,475
Sensient Technologies	96,500	2,373,900
Spartech	188,400	4,939,848
		37,223,683

The Portfolio 13

STATEMENT OF INVESTMENTS (continued)

Common Stocks (continued)	Shares	Value ($)

Producer Manufacturing—5.7%
Actuant, Cl. A	111,900^b	5,332,035
American Woodmark	137,400^b	5,750,190
Dynamic Materials	102,100^b	2,869,010
Encore Wire	161,300^b	3,550,213
FreightCar America	44,200^b	2,450,890
Gardner Denver	30,800^a	1,149,148
Herman Miller	167,200^b	6,079,392
Regal-Beloit	33,900	1,780,089
Simpson Manufacturing	147,200^b	4,658,880
Wabtec	123,500	3,751,930
		37,371,777
Retail Trade—6.0%
Aeropostale	81,600^a	2,518,992
Charlotte Russe Holding	174,800^a,b	5,375,100
Conn’s	107,000^a,b	2,489,890
Finish Line, Cl. A	293,400^b	4,189,752
Great Atlantic & Pacific Tea	36,100^b	929,214
Group 1 Automotive	95,700^b	4,949,604
Gymboree	127,100^a,b	4,850,136
Hibbett Sporting Goods	23,550^a	718,982
Insight Enterprises	234,100^a	4,417,467
Men’s Wearhouse	66,500^b	2,544,290
Sonic Automotive, Cl. A	91,100	2,645,544
Systemax	113,500^a,b	1,980,575
Wild Oats Markets	121,900^a,b	1,752,922
		39,362,468
Technology Services—9.4%
Albany Molecular Research	196,900^a	2,079,264
AMERIGROUP	19,200^a	689,088
Ansoft	84,800^a,b	2,357,440
Apria Healthcare Group	132,400^a,b	3,528,460
CSG Systems International	129,000^a	3,448,170
eCollege.com	169,200^a	2,647,980
Internap Network Services	147,000^a,b	2,920,890
LHC Group	65,600^a	1,870,256

Common Stocks (continued)	Shares	Value ($)

Technology Services (continued)
Magellan Health Services	116,200 ^a	5,022,164
Molina Healthcare	64,100 ^a	2,083,891
Open Solutions	87,100 ^a,b	3,278,444
Quest Software	206,700 ^a,b	3,028,155
RealNetworks	538,000 ^a	5,885,720
SPSS	162,300 ^a	4,880,361
Sykes Enterprises	332,300 ^a	5,861,772
Tyler Technologies	355,400 ^a	4,996,924
United Online	142,600	1,893,728
Vignette	291,400 ^a	4,974,198
		61,446,905
Transportation—1.3%
Genesee & Wyoming, Cl. A	115,400 ^a,b	3,028,096
Mesa Air Group	227,100 ^a,b	1,946,247
Saia	158,400 ^a	3,676,464
		8,650,807
Utilities—2.4%
CH Energy Group	42,200 ^b	2,228,160
IDACORP	76,200	2,945,130
Laclede Group	57,000	1,996,710
MGE Energy	18,200	665,756
New Jersey Resources	61,500 ^b	2,987,670
UniSource Energy	32,200	1,176,266
Vectren	34,300	970,004
Westar Energy	112,600	2,923,096
		15,892,792
Total Common Stocks
(cost $616,705,716)		653,242,188


Other Investment—.4%

Registered Investment Company;
Dreyfus Institutional Preferred
Plus Money Market Fund
(cost $2,360,000)	2,360,000 ^c	2,360,000

The Portfolio 15

STATEMENT OF INVESTMENTS (continued)

Investment of Cash Collateral
for Securities Loaned—20.7%			Shares	Value ($)

Registered Investment Company;
Dreyfus Institutional Cash
Advantage Fund
(cost $135,749,154)			135,749,154 ^c	135,749,154


Total Investments (cost $754,814,870)			120.8%	791,351,342

Liabilities, Less Cash and Receivables			(20.8%)	(136,225,094)

Net Assets			100.0%	655,126,248

^a	Non-income producing security.
^b	All or a portion of these securities are on loan. At December 31, 2006, the total market value of the portfolio’s
	securities on loan is $130,607,400 and the total market value of the collateral held by the portfolio is
	$137,160,574, consisting of cash collateral of $135,749,154 and U.S. Government and agency securities valued
	at $1,411,420.
^c	Investment in affiliated money market mutual fund.





Portfolio Summary (Unaudited) ^†

		Value (%)		Value (%)

Finance		23.0	Retail Trade	6.0
Money Market Investments		21.1	Producer Manufacturing	5.7
Electronic Technology		11.2	Process Industries	5.7
Commercial & Professional Services		9.9	Consumer Services	4.8
Technology Services		9.4	Other	16.0
Health Care Technology		8.0		120.8

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

STATEMENT OF ASSETS AND LIABILITIES
December 31, 2006

	Cost	Value

Assets ($):
Investments in securities—See Statement of
Investments (including securities on loan,
valued at $130,607,400)—Note 1(c):
Unaffiliated issuers	616,705,716	653,242,188
Affiliated issuers	138,109,154	138,109,154
Cash		4,105,419
Dividends and interest receivable		1,632,713
Prepaid expenses		20,399
		797,109,873

Liabilities ($):
Due to The Dreyfus Corporation and affiliates—Note 3(b)		426,094
Liability for securities on loan—Note 1(c)		135,749,154
Payable for investment securities purchased		5,140,391
Payable for shares of Beneficial Interest redeemed		550,286
Interest payable—Note 2		1,791
Accrued expenses		115,909
		141,983,625

Net Assets ($)		655,126,248

Composition of Net Assets ($):
Paid-in capital		536,291,811
Accumulated undistributed investment income—net		5,173,339
Accumulated net realized gain (loss) on investments		77,124,626
Accumulated net unrealized appreciation
(depreciation) on investments		36,536,472

Net Assets ($)		655,126,248



Net Asset Value Per Share
	Initial Shares	Service Shares

Net Assets ($)	633,458,955	21,667,293
Shares Outstanding	15,071,915	521,403

Net Asset Value Per Share ($)	42.03	41.56

See notes to financial statements.

The Portfolio 17

STATEMENT OF OPERATIONS
Year Ended December 31, 2006

Investment Income ($):
Income:
Cash dividends (net of $19,218 foreign taxes withheld at source):
Unaffiliated issuers		9,899,120
Affiliated issuers		154,355
Income from securities lending		1,213,484
Total Income		11,266,959
Expenses:
Investment advisory fee—Note 3(a)		5,349,953
Prospectus and shareholders’ reports		305,183
Trustees’ fees and expenses—Note 3(c)		79,881
Custodian fees—Note 3(b)		62,711
Professional fees		56,765
Distribution fees—Note 3(b)		51,823
Interest expense—Note 2		10,391
Loan commitment fees—Note 2		6,134
Miscellaneous		22,462
Total Expenses		5,945,303
Less—reduction in custody fees
due to earnings credits—Note 1(c)		(4,064)
Net Expenses		5,941,239
Investment Income—Net		5,325,720

Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):
Net realized gain (loss) on investments		76,395,773
Net unrealized appreciation (depreciation) on investments		(57,945,192)
Net Realized and Unrealized Gain (Loss) on Investments		18,450,581
Net Increase in Net Assets Resulting from Operations		23,776,301

See notes to financial statements.

STATEMENT OF CHANGES IN NET ASSETS

	Year Ended December 31,

	2006	2005

Operations ($):
Investment income—net	5,325,720	3,227,022
Net realized gain (loss) on investments	76,395,773	118,134,175
Net unrealized appreciation
(depreciation) on investments	(57,945,192)	(79,064,153)
Net Increase (Decrease) in Net Assets
Resulting from Operations	23,776,301	42,297,044

Dividends to Shareholders from ($):
Investment income—net:
Initial shares	(2,859,929)	—
Service shares	(36,703)	—
Net realized gain on investments:
Initial shares	(59,143,340)	—
Service shares	(1,897,570)	—
Total Dividends	(63,937,542)	—

Beneficial Interest Transactions ($):
Net proceeds from shares sold:
Initial shares	28,698,627	33,642,117
Service shares	3,755,306	2,846,538
Dividends reinvested:
Initial shares	62,003,269	—
Service shares	1,934,273	—
Cost of shares redeemed:
Initial shares	(162,998,146)	(119,050,790)
Service shares	(5,485,460)	(3,359,312)
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions	(72,092,131)	(85,921,447)
Total Increase (Decrease) in Net Assets	(112,253,372)	(43,624,403)

Net Assets ($):
Beginning of Period	767,379,620	811,004,023
End of Period	655,126,248	767,379,620
Undistributed investment income—net	5,173,339	3,606,472

The Portfolio 19

STATEMENT OF CHANGES IN NET ASSETS (continued)

	Year Ended December 31,

	2006	2005

Capital Share Transactions:
Initial Shares
Shares sold	684,422	820,825
Shares issued for dividends reinvested	1,394,899	—
Shares redeemed	(3,947,455)	(2,869,844)
Net Increase (Decrease) in Shares Outstanding	(1,868,134)	(2,049,019)

Service Shares
Shares sold	89,868	69,052
Shares issued for dividends reinvested	43,931	—
Shares redeemed	(135,519)	(81,086)
Net Increase (Decrease) in Shares Outstanding	(1,720)	(12,034)

See notes to financial statements.

FINANCIAL HIGHLIGHTS

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

		Year Ended December 31,

Initial Shares	2006	2005	2004	2003	2002

Per Share Data ($):
Net asset value, beginning of period	43.96	41.55	37.39	28.40	35.13
Investment Operations:
Investment income—net ^a	.31	.18	.08	.01	.01
Net realized and unrealized
gain (loss) on investments	1.56	2.23	4.16	8.99	(6.73)
Total from Investment Operations	1.87	2.41	4.24	9.00	(6.72)
Distributions:
Dividends from investment income—net	(.18)	—	(.08)	(.01)	(.01)
Dividends from net realized
gain on investments	(3.62)	—	—	—	—
Total Distributions	(3.80)	—	(.08)	(.01)	(.01)
Net asset value, end of period	42.03	43.96	41.55	37.39	28.40

Total Return (%)	3.77	5.80	11.34	31.69	(19.12)

Ratios/Supplemental Data (%):
Ratio of total expenses
to average net assets	.82	.81	.79	.82	.81
Ratio of net expenses
to average net assets	.82	.81	.79	.82	.81
Ratio of net investment income
to average net assets	.75	.43	.20	.03	.02
Portfolio Turnover Rate	97.52	67.11	56.06	69.34	52.41

Net Assets, end of period ($ x 1,000)	633,459	744,621	788,943	744,866	577,468

^aBased on average shares outstanding at each month end.
See notes to financial statements.

The Portfolio 21

FINANCIAL HIGHLIGHTS (continued)

		Year Ended December 31,

Service Shares	2006	2005	2004	2003	2002

Per Share Data ($):
Net asset value, beginning of period	43.51	41.22	37.12	28.26	35.02
Investment Operations:
Investment income (loss)—net ^a	.21	.07	(.02)	(.07)	(.03)
Net realized and unrealized
gain (loss) on investments	1.53	2.22	4.12	8.93	(6.72)
Total from Investment Operations	1.74	2.29	4.10	8.86	(6.75)
Distributions:
Dividends from investment income—net	(.07)	—	—	—	(.01)
Dividends from net realized
gain on investments	(3.62)	—	—	—	—
Total Distributions	(3.69)	—	—	—	(.01)
Net asset value, end of period	41.56	43.51	41.22	37.12	28.26

Total Return (%)	3.52	5.56	11.05	31.35	(19.31)

Ratios/Supplemental Data (%):
Ratio of total expenses
to average net assets	1.08	1.06	1.04	1.07	1.05
Ratio of net expenses
to average net assets	1.08	1.06	1.04	1.07	1.05
Ratio of net investment income
(loss) to average net assets	.51	.18	(.04)	(.22)	(.11)
Portfolio Turnover Rate	97.52	67.11	56.06	69.34	52.41

Net Assets, end of period ($ x 1,000)	21,667	22,759	22,061	17,523	10,896

^aBased on average shares outstanding at each month end.
See notes to financial statements.

NOTES TO FINANCIAL STATEMENTS

NOTE 1—Significant Accounting Policies:

Dreyfus Variable Investment Fund (the “fund”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company, operating as a series company currently offering twelve series, including the Developing Leaders Portfolio (the “portfolio”). The portfolio is only offered to separate accounts established by insurance companies to fund variable annuity contracts and variable life insurance policies.The portfolio is a diversified series. The portfolio’s investment objective is capital growth.The Dreyfus Corporation (the “Manager” or “Dreyfus”) serves as the portfolio’s investment adviser.The Manager is a wholly-owned subsidiary of Mellon Financial Corporation (“Mellon Financial”).

Dreyfus Service Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager, is the distributor of the portfolio’s shares, which are sold without a sales charge.The portfolio is authorized to issue an unlimited number of $.001 par value shares of Beneficial Interest in the following classes of shares: Initial and Service. Each class of shares has identical rights and privileges, except with respect to the distribution plan and the expenses borne by each class and certain voting rights. Income, expenses (other than expenses attributable to a specific class), and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets.

The Portfolio 23

NOTES TO FINANCIAL STATEMENTS (continued)

(a) Portfolio valuation: Investments in securities are valued at the last sales price on the securities exchange or national securities market on which such securities are primarily traded. Securities listed on the National Market System for which market quotations are available are valued at the official closing price or, if there is no official closing price that day, at the last sale price. Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Registered open-end investment companies that are not traded on an exchange are valued at their net asset value.When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the portfolio calculates its net asset value, the portfolio may value these investments at fair value as determined in accordance with the procedures approved by the Board of Trustees. Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant

ADR’s and futures contracts. For other securities that are fair valued by the Board of Trustees, certain factors may be considered such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. Financial futures are valued at the last sales price. Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward currency exchange contracts are valued at the forward rate.

Net realized foreign exchange gains or losses arise from sales and maturities of short-term securities, sales of foreign currencies, currency gains or losses realized on securities transactions and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the portfolio’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of assets and liabilities other than investments in securities resulting from changes in exchange rates. Such gains and losses are included with net realized and unrealized gain or loss on investments.

The Portfolio 25

NOTES TO FINANCIAL STATEMENTS (continued)

Pursuant to a securities lending agreement with Mellon Bank, N.A., an affiliate of the Manager, the portfolio may lend securities to qualified institutions. It is the portfolio’s policy, that at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Cash collateral is invested in certain money market mutual funds managed by the Manager.The portfolio is entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction. Although each security loaned is fully collateralized, the portfolio bears the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner.

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

it is the policy of the portfolio not to distribute such gain. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from U.S. generally accepted accounting principles.

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

At December 31, 2006, the components of accumulated earnings on a tax basis were as follows: undistributed ordinary income $4,372,686, undistributed capital gains $77,607,603 and unrealized appreciation $36,854,148.

The tax character of distributions paid to shareholders during the fiscal periods ended December 31, 2006 and December 31, 2005, were as follows: ordinary income $2,896,632 and $0, and long-term capital gains $61,040,910 and $0, respectively.

The Portfolio 27

NOTES TO FINANCIAL STATEMENTS (continued)

During the period ended December 31, 2006, as a result of permanent book to tax differences primarily due to the tax treatment for real estate investment trusts, the portfolio decreased accumulated undistributed investment income-net by $862,221 and increased accumulated net realized gain (loss) on investments by the same amount. Net assets were not affected by this reclassification.

NOTE 2—Bank Line of Credit:

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

The average daily amount of borrowings outstanding under the Facility during the period ended December 31, 2006, was $184,400 with a related weighted average annualized interest rate of 5.63% .

NOTE 3—Investment Advisory Fee and Other Transactions With Affiliates:

(a) Pursuant to an Investment Advisory Agreement with the Manager, the investment advisory fee is computed at the annual rate of .75% of the value of the portfolio’s average daily net assets and is payable monthly.

and to brokers and dealers acting as principal underwriter for their variable insurance products. The fees payable under the Plan are payable without regard to actual expenses incurred. During the period ended December 31, 2006, Service shares were charged $51,823 pursuant to the Plan.

The portfolio 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 portfolio. During the period ended December 31, 2006, the portfolio was charged $866 pursuant to the transfer agency agreement.

The portfolio compensates Mellon Bank, N.A., an affiliate of the Manager, under a custody agreement for providing custodial services for the portfolio. During the period ended December 31, 2006, the portfolio was charged $62,711 pursuant to the custody agreement.

During the period ended December 31, 2006, the portfolio was charged $4,204 for services performed by the Chief Compliance Officer.

The components of Due to The Dreyfus Corporation and affiliates in the Statement of Assets and Liabilities consist of: investment advisory fees $419,098, Rule 12b-1 distribution plan fees $4,620, custodian fees $189, chief compliance officer fees $2,044 and transfer agency per account fees $143.

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

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

The Portfolio 29

NOTES TO FINANCIAL STATEMENTS (continued)

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended December 31, 2006, amounted to $696,601,045 and $827,499,287, respectively.

At December 31, 2006, the cost of investments for federal income tax purposes was $754,497,194; accordingly, accumulated net unrealized appreciation on investments was $36,854,148, consisting of $76,040,375 gross unrealized appreciation and $39,186,227 gross unrealized depreciation.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Shareholders and Board of Trustees
Dreyfus Variable Investment Fund, Developing Leaders Portfolio

We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Variable Investment Fund, Developing Leaders Portfolio (one of the funds comprising Dreyfus Variable Investment Fund) as of December 31, 2006, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the periods indicated therein.These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement.We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting.Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006 by correspondence with the custodian and others or by other appropriate auditing procedures where replies from others were not received.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 Variable Investment Fund, Developing Leaders Portfolio at December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated periods, in conformity with U.S. generally accepted accounting principles.

New York, New York
February 6, 2007

The Portfolio 31

IMPORTANT TAX INFORMATION (Unaudited)

For federal tax purposes, the portfolio hereby designates $3.6190 per share as a long-term capital gain distribution paid on March 29, 2006 and also the portfolio hereby designates 100% of the ordinary dividends paid during the fiscal year ended December 31, 2006 as qualifying for the corporate dividends received deduction. Shareholders will receive notification in January 2007 of the percentage applicable to the preparation of their 2006 income tax returns.

PROXY RESULTS(Unaudited)

Dreyfus Variable Investment Fund held a special meeting of shareholders on June 29, 2006.The proposal considered at the meeting, and the results, are as follows:

		Shares

	Votes For		Authority Withheld

To elect additional Board Members:
Peggy C. Davis ^†	171,078,927		7,687,714
Joseph S. DiMartino	170,946,484		7,820,156
David P. Feldman	170,959,921		7,806,720
Ehud Houminer ^†	170,132,087		8,634,554
Gloria Messinger ^†	170,187,241		8,579,400
Anne Wexler ^†	170,212,607		8,554,033

^†Each new Board member’s term commenced on September 26, 2006.

In addition to Joseph S. DiMartino and David P. Feldman, James F. Henry, Dr. Paul A. Marks and Dr. Martin Peretz continue as Board members of the fund.

BOARD MEMBERS INFORMATION (Unaudited)

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

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

Other Board Memberships and Affiliations:

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

No. of Portfolios for which Board Member Serves: 190

———————

Peggy C. Davis (63) Board Member (2006)

Principal Occupation During Past 5 Years:

Shad Professor of Law, New York University School of Law (1983-present)
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: 80

———————

David P. Feldman (67)
Board Member (1994)

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

Other Board Memberships and Affiliations:

BBH Mutual Funds Group (11 funds), Director
The Jeffrey Company, a private investment company, Director
QMED, a medical device company, Director

No. of Portfolios for which Board Member Serves: 57

The Portfolio 33

BOARD MEMBERS INFORMATION (Unaudited) (continued)

James F. Henry (76)
Board Member (1990)

Principal Occupation During Past 5 Years:

President,The International Institute for Conflict Prevention and Resolution, a non-profit organization principally engaged in the development of alternatives to business litigation (Retired 2003)
Advisor to The Elaw Forum, a consultant on managing corporate legal costs
Advisor to John Jay Homestead (the restored home of the first U.S. Chief Justice)
Individual Trustee of several trusts

Other Board Memberships and Affiliations:

Director, advisor and mediator involved in several non-profit organizations, primarily engaged in domestic and international dispute resolution, and historic preservation

No. of Portfolios for which Board Member Serves: 48

———————

Ehud Houminer (66) Board Member (2006)

Principal Occupation During Past 5 Years:

• Executive-in-Residence at the Columbia Business School, Columbia University

Other Board Memberships and Affiliations:

Avnet Inc., an electronics distributor, Director
International Advisory Board to the MBA Program School of Management, Ben Gurion University, Chairman
Explore Charter School, Brooklyn, NY, Chairman

No. of Portfolios for which Board Member Serves: 78

———————

Gloria Messinger (77) Board Member (2006)

Principal Occupation During Past 5 Years:

Arbitrator for American Arbitration Association and National Association of Securities Dealers, Inc.
Consultant in Intellectual Property

Other Board Memberships and Affiliations:

Theater for a New Audience, Inc., Director
Brooklyn Philharmonic, Director

No. of Portfolios for which Board Member Serves: 48

Dr. Martin Peretz (67)
Board Member (1990)

Principal Occupation During Past 5 Years:

Editor-in-Chief of The New Republic Magazine
Lecturer in Social Studies at Harvard University (1965-2002)
Director of TheStreet.com, a financial information service on the web

Other Board Memberships and Affiliations:

American Council of Trustees and Alumni, Director
Pershing Square Capital Management, Adviser
Montefiore Ventures, General Partner
Harvard Center for Blood Research,Trustee
Bard College,Trustee
Board of Overseers of YIVO Institute for Jewish Research, Chairman

No. of Portfolios for which Board Member Serves: 48

———————

Anne Wexler (76) Board Member (2006)

Principal Occupation During Past 5 Years:

Chairman of the Wexler & Walker Public Policy Associates, consultants specializing in government relations and public affairs

Other Board Memberships and Affiliations:

Wilshire Mutual Funds (5 funds), Director
Methanex Corporation, a methanol producing company, Director
Member of the Council of Foreign Relations
Member of the National Park Foundation

No. of Portfolios for which Board Member Serves: 57

———————

Once elected all Board Members serve for an indefinite term, but achieve Emeritus status on December 31^stof the calendar year in which the Board Member reaches age 80.The address of the Board Members and Officers is in c/o The Dreyfus Corporation, 200 Park Avenue, New York, New York 10166. Additional information about the Board Members is available in the fund's Statement of Additional Information which can be obtained from Dreyfus free of charge by calling this toll free number: 1-800-554-4611.