BNY Mellon Advantage Funds 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			811-7123

	ADVANTAGE FUNDS, INC.


	c/o The Dreyfus Corporation 200 Park Avenue New York, New York 10166


	Michael A. Rosenberg, Esq. 200 Park Avenue New York, New York 10166


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

Date of fiscal year end:		8/31
Date of reporting period:		8/31/11

Advantage Funds, Inc.

-Dreyfus Emerging Leaders Fund

-Dreyfus International Value Fund

-Dreyfus Opportunistic Midcap Value Fund

-Dreyfus Opportunistic Small Cap Fund

-Dreyfus Strategic Value Fund

-Dreyfus Structured Midcap Fund

-Dreyfus Technology Growth Fund

FORM N-CSR

Item 1. Reports to Stockholders.

Dreyfus

Emerging Leaders Fund

ANNUAL REPORT August 31, 2011

Save time. Save paper. View your next shareholder report online as soon as it’s available. Log into www.dreyfus.com and sign up for Dreyfus eCommunications. It’s simple and only takes a few minutes.

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

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

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

Dreyfus
Emerging Leaders Fund

The Fund

A LETTER FROM THE CHAIRMAN AND CEO

Dear Shareholder:

We are pleased to present this annual report for Dreyfus Emerging Leaders Fund, covering the 12-month period from September 1, 2010, through August 31, 2011. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.

Although stocks rallied strongly through the first quarter of 2011 due to expectations of a more robust economic recovery, the reporting period ended amid sharply deteriorating investor sentiment due to disappointing economic data, an escalating sovereign debt crisis in Europe and a contentious debate regarding taxes, spending and borrowing in the United States. In the final month of the reporting period, a major credit rating agency downgraded U.S. long-term debt, marking the first time in history that U.S.Treasury securities were not assigned the highest possible credit rating. Stocks proved volatile in this tumultuous environment, as the stalled economy caused most market sectors to give back many of the reporting period’s previous gains.

The economic outlook currently is clouded by heightened market volatility and political infighting, but we believe that a sustained, moderate global expansion is more likely than a double-dip recession. Inflationary pressures appear to be waning in most countries, including the United States, as energy prices have retreated from their highs.The Federal Reserve Board has signaled its intention to maintain an aggressively accommodative monetary policy, which may help offset the financial stresses caused by recent fiscal policy choices in the United States and Europe. To assess how these and other developments may affect your investments, we encourage you, as always, to speak with your financial advisor.

Thank you for your continued confidence and support.

Jonathan R. Baum
Chairman and Chief Executive Officer
The Dreyfus Corporation
September 15, 2011

DISCUSSION OF FUND PERFORMANCE

For the period of September 1, 2010, through August 31, 2011, as provided by David A. Daglio, Primary Portfolio Manager

Fund and Market Performance Overview

For the 12-month period ended August 31, 2011, Dreyfus Emerging Leaders Fund produced a total return of 12.28%.¹In comparison, the Russell 2000 Index (the “Index”) produced a total return of 22.19%.²

The changes in the investment environment over the last year were dra-matic.The period began with renewed optimism as the Federal Reserve launched its second round of quantitative easing and a resumption of stronger domestic economic growth occurred. By its end, world economic growth had slowed, a U.S. government default had been narrowly averted and the European financial system was under siege.

Investor sentiment shifted quickly with the changing environment. Rational longer-term perspectives gave way to a complete focus on only the very short term.As a result, the fund’s focus on future earnings, cash flow, and relative performance, combined with a soft patch of stock selection, detracted from the fund’s performance relative to the benchmark.

The Fund’s Investment Approach

The fund seeks capital growth. Stocks are selected for the fund’s portfolio based primarily on bottom-up fundamental analysis. The fund’s portfolio managers use a disciplined investment process that relies, in general, on proprietary fundamental research and valuation. Generally, elements of the process include analysis of mid-cycle business prospects, estimation of the intrinsic value of the company and the identification of a revaluation trigger. Intrinsic value is based on the combination of the valuation assessment of the company’s operating divisions with the firm’s economic balance sheet. Mid-cycle estimates, growth prospects and competitive advantages are some of the factors used in the valuation assessment. A company’s stated and hidden liabilities and assets are included in the portfolio managers’ economic balance sheet calculation. Sector overweights and underweights are a function of the relative attractiveness of securities within the fund’s investable universe. The fund’s portfolio managers invest in stocks that they believe have attractive reward to risk opportunities and may actively adjust the fund’s portfolio to reflect new developments.


The Fund	3

DISCUSSION OF FUND PERFORMANCE (continued)

Economic Concerns Sparked Heightened Market Volatility

Investors’ economic outlooks improved markedly amid expectations of a stronger economic recovery early in the reporting period, sending stock prices higher. However, the rally was interrupted in February 2011 when political unrest in the Middle East led to sharply rising energy prices, and again in March when natural and nuclear disasters in Japan threatened one of the world’s largest economies. Nonetheless, investors proved resilient and U.S. stocks rebounded quickly from these unexpected shocks.

In late April, investor sentiment began to deteriorate in earnest when Greece appeared headed for default on its sovereign debt, economic data proved disappointing and a contentious debate regarding U.S. government spending and borrowing intensified. Stocks suffered heightened volatility over the summer of 2011 as newly risk-averse investors generally disregarded the long-term strengths of individual companies in favor of reacting to near-term macroeconomic develop-ments.The reporting period ended on a pessimistic note after a major credit-rating agency downgraded U.S.Treasury bonds.

Deteriorating Investor Sentiment Dampened Fund Results

The fund’s investment approach focuses on companies that we believe to be priced below their real worth and that have strong earnings and cash flow prospects over the next one to three years. The approach fell out of favor during the May to August time period when investors proved unwilling to look beyond the next several months for their investment horizon. Relative performance was negatively impacted by this development.

The fund’s investment team also hit a soft patch of weak stock selection. A few holdings and industry overweights hampered our returns. Meritor, a leading manufacturer of axles and drivetrains for trucks, experienced higher than expected raw materials costs and announced a delay in its earnings recovery. Lennox International, one of the oldest and most established names in heating and air conditioning systems, suffered from a lack of new orders.Velti, one of the most interesting prospects in the nascent market of advertising on cellular phones, struggled in a market environment that demanded short-term earnings results. An overweighted position in machinery stocks based on the belief that U.S. manufacturing is in the middle of a multi-year renaissance gave back earlier gains. Positions in building products struggled as limited evidence of a turn in residential construction appeared during the reporting period.

Weakness in these areas was offset to a degree by better results in other market sectors. In the energy sector, natural gas producers Gulfport Energy, SandRidge Energy and Cabot Oil & Gas benefited from increased production activity when commodity prices moved higher. In the health care sector, drug developer King Pharmaceuticals advanced when it accepted an acquisition offer, while takeover speculation also lifted the stocks of Pain Therapeutics and Onyx Pharmaceuticals. Several industrials holdings fared well, including wire-and-cables producer WESCO International and mechanical transmissions maker Altra Holdings.

Uncertainty Creates Opportunity

We remain committed to finding companies priced below their real worth that are positioned to deliver strong earnings and cash flow over the next few years.While there are a number of concerns dominating the current investment landscape, we believe that investors’ current focus on short-term results is likely to shift to a long-term perspective in time. As in the past, when a greater level of clarity returns to the market, we would expect our approach to regain favor and more competitive returns to be delivered in that more traditional environment. In the meantime, we have found what we believe are a number of exciting investment opportunities in the industrials, consumer discretionary and information technology sectors.We have found fewer opportunities in the materials sector, where moderating commodity prices could put pressure on earnings, and in the utilities sector, where few companies meet our valuation standards.

September 15, 2011


	Please note, the position in any security highlighted with italicized typeface was sold during the
	reporting period.
	Equity funds are subject generally to market, market sector, market liquidity, issuer and investment
	style risks, among other factors, to varying degrees, all of which are more fully described in the
	fund’s prospectus.
	Stocks of small- and/or midcap companies often experience sharper price fluctuations than stocks
	of large-cap companies.
1	Total return includes reinvestment of dividends and any capital gains paid. Past performance is no
	guarantee of future results. Share price and investment return fluctuate such that upon redemption,
	fund shares may be worth more or less than their original cost.
2	SOURCE: LIPPER INC. — Reflects reinvestment of dividends and, where applicable, capital
	gain distributions.The 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. Investors cannot invest directly in any index.


The Fund	5

FUND PERFORMANCE


Average Annual Total Returns as of 8/31/11
	1Year	5 Years	10 Years
Fund	12.28%	–5.63%	0.25%
Russell 2000 Index	22.19%	1.53%	5.85%

^†Source: Lipper Inc.

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

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

The above graph compares a $10,000 investment made in Dreyfus Emerging Leaders Fund on 8/31/01 to a

$10,000 investment made in the Russell 2000 Index (the “Index”) on that date. All dividends and capital gain

distributions are reinvested.

The fund’s performance shown in the line graph above takes into account all applicable fees and expenses.The Russell

2000 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. Unlike a mutual

fund, the Index is not subject to charges, fees and other expenses. Investors cannot invest directly in any index. Further

information relating to fund performance, including expense reimbursements, if applicable, is contained in the Financial

Highlights section of the prospectus and elsewhere in this report.

UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)

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

Review your fund’s expenses

The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus Emerging Leaders Fund from March 1, 2011 to August 31, 2011. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.

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


Expenses paid per $1,000^†	$	7.12
Ending value (after expenses)	$	788.30

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

Using the SEC’s method to compare expenses

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

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


Expenses paid per $1,000^†	$	8.03
Ending value (after expenses)	$	1,017.24

† Expenses are equal to the fund’s annualized expense ratio of 1.58%, multiplied by the average account value over

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


The Fund	7

STATEMENT OF INVESTMENTS

August 31, 2011


Common Stocks—115.0%	Shares	Value ($)
Consumer Discretionary—40.0%
Accuride	58,390^a	492,228
American Axle & Manufacturing Holdings	52,284^a	488,855
Dana Holding	154,600^a	1,971,150
DFC Global	109,230^a,b	2,410,706
Equifax	48,650	1,572,854
Express	101,870	1,944,698
Group 1 Automotive	63,610	2,655,718
Guess?	23,910	815,570
Herman Miller	56,250	1,117,688
ICF International	83,550^a	1,894,078
Kelly Services, Cl. A	165,550	2,516,360
Liz Claiborne	601,450^a,b	3,139,569
Meritage Homes	139,630^a,b	2,615,270
Meritor	287,870^a,b	2,432,502
Oshkosh	83,350^a	1,643,662
Saks	296,060^a,b	2,865,861
Standard-Pacific	335,180^a,b	861,413
Steelcase, Cl. A	133,250	1,103,310
Tower International	75,620^a	1,054,143
TrueBlue	33,650^a	472,782
Williams-Sonoma	76,470	2,531,922
Wright Express	65,870^a	2,775,762
		39,376,101
Consumer Staples—1.2%
Dole Food	61,290^a,b	690,738
Primo Water	74,210^b	524,665
		1,215,403
Energy—8.2%
Endeavour International	109,600^a,b	1,080,656
Forest Oil	61,110^a	1,189,812
Gulfport Energy	83,480^a	2,412,572
Resolute Energy	112,270^a	1,514,522
SandRidge Energy	263,320^a,b	1,932,769
		8,130,331


Common Stocks (continued)	Shares	Value ($)
Financial—10.9%
Brown & Brown	81,380	1,709,794
Employers Holdings	91,760	1,122,225
Jones Lang LaSalle	39,630	2,651,643
Nelnet, Cl. A	24,360	467,712
Och-Ziff Capital
Management Group, Cl. A	98,450	1,117,407
Popular	207,050 ^a	430,664
Portfolio Recovery Associates	25,060 ^a,b	1,832,638
PrivateBancorp	86,910	771,761
Starwood Property Trust	33,100 ^c	612,350
		10,716,194
Health Care—10.4%
Align Technology	69,580 ^a,b	1,328,978
Durect	171,500 ^a	286,405
Emergent BioSolutions	158,740 ^a	2,868,432
Hanger Orthopedic Group	167,940 ^a	3,153,913
Onyx Pharmaceuticals	20,930 ^a	712,248
Sagent Pharmaceuticals	33,210	763,498
Salix Pharmaceuticals	18,880 ^a	574,896
United Therapeutics	13,020 ^a	561,813
		10,250,183
Industrial—12.6%
Columbus McKinnon	100,700 ^a	1,452,094
Con-way	29,770	761,814
Granite Construction	84,710 ^b	1,756,038
Griffon	60,350 ^a	527,459
Landstar System	44,640	1,807,474
Lennox International	31,900	995,918
Orion Marine Group	91,980 ^a,b	591,431
Saia	35,290 ^a	422,421
Sterling Construction	45,800 ^a	584,408
Trinity Industries	44,670 ^b	1,231,105
UTi Worldwide	168,700	2,285,042
		12,415,204


The Fund	9

STATEMENT OF INVESTMENTS (continued)


Common Stocks (continued)	Shares	Value ($)
Information Technology—21.1%
Brocade Communications Systems	158,940^a	615,098
CSG Systems International	102,250^a,b	1,366,060
DealerTrack Holdings	176,960^a	3,312,691
Encore Wire	60,310	1,351,547
Hubbell, Cl. B	12,460	736,760
MICROS Systems	58,340^a	2,780,484
Microsemi	122,270^a,b	1,898,853
ScanSource	99,460^a,b	3,078,287
SYKES Enterprises	53,080^a	830,702
Take-Two Interactive Software	77,020^a	1,018,204
Velti	220,620^a	2,087,065
Vishay Intertechnology	47,750^a,b	544,350
Watts Water Technologies, Cl. A	40,810	1,155,739
		20,775,840
Materials—4.7%
Cytec Industries	4,660	211,564
Georgia Gulf	56,250^a,b	1,191,937
Mohawk Industries	26,650^a	1,320,508
Omnova Solutions	98,520^a	434,473
Zoltek	162,250^a,b	1,427,800
		4,586,282
Telecommunications—5.9%
Cbeyond	73,220^a	680,214
GeoEye	94,500^a	3,418,065
JDS Uniphase	134,680^a	1,746,800
		5,845,079
Total Common Stocks
(cost $124,868,784)		113,310,617


Other Investment—.1%	Shares	Value ($)
Registered Investment Company;
Dreyfus Institutional Preferred
Plus Money Market Fund
(cost $46,000)	46,000^d	46,000

Investment of Cash Collateral
for Securities Loaned—15.9%
Registered Investment Company;
Dreyfus Institutional Cash Advantage Fund
(cost $15,699,771)	15,699,771^d	15,699,771

Total Investments (cost $140,614,555)	131.0%	129,056,388
Liabilities, Less Cash and Receivables	(31.0%)	(30,526,025)
Net Assets	100.0%	98,530,363

a Non-income producing security.

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

$15,043,900 and the value of the collateral held by the fund was $15,699,771.

c Investment in real estate investment trust.

d Investment in affiliated money market mutual fund.


Portfolio Summary (Unaudited)^†

	Value (%)		Value (%)

Consumer Discretionary	40.0	Energy	8.2
Information Technology	21.1	Telecommunications	5.9
Money Market Investments	16.0	Materials	4.7
Industrial	12.6	Consumer Staples	1.2
Financial	10.9
Health Care	10.4		131.0

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


The Fund	11

STATEMENT OF ASSETS AND LIABILITIES

August 31, 2011


	Cost	Value
Assets ($):
Investments in securities—See Statement of Investments (including
securities on loan, valued at $15,043,900)—Note 1(b):
Unaffiliated issuers	124,868,784	113,310,617
Affiliated issuers	15,745,771	15,745,771
Cash		3,928
Receivable for investment securities sold		2,353,641
Dividends and securities lending income receivable		39,996
Receivable for shares of Common Stock subscribed		833
Prepaid expenses		20,802
		131,475,588
Liabilities ($):
Due to The Dreyfus Corporation and affiliates—Note 3(b)		134,045
Liability for securities on loan—Note 1(b)		15,699,771
Payable for shares of Common Stock redeemed		14,706,544
Payable for investment securities purchased		2,227,604
Accrued expenses		177,261
		32,945,225
Net Assets ($)		98,530,363
Composition of Net Assets ($):
Paid-in capital		151,727,851
Accumulated net realized gain (loss) on investments		(41,639,321)
Accumulated net unrealized appreciation
(depreciation) on investments		(11,558,167)
Net Assets ($)		98,530,363
Shares Outstanding
(100 million shares of $.001 par value shares of Common Stock authorized)		5,696,751
Net Asset Value, offering and redemption price per share ($)		17.30

See notes to financial statements.

STATEMENT OF OPERATIONS

Year Ended August 31, 2011


Investment Income ($):
Income:
Cash dividends:
Unaffiliated issuers	1,395,196
Affiliated issuers	2,146
Income from securities lending—Note 1 (b)	83,992
Total Income	1,481,334
Expenses:
Management fee—Note 3(a)	1,332,732
Shareholder servicing costs—Note 3(b)	612,098
Professional fees	112,322
Prospectus and shareholders’ reports	64,799
Custodian fees—Note 3(b)	30,706
Registration fees	16,924
Directors’ fees and expenses—Note 3(c)	9,747
Loan commitment fees—Note 2	2,048
Miscellaneous	9,744
Total Expenses	2,191,120
Less—reduction in fees due to earnings credits—Note 3(b)	(569)
Net Expenses	2,190,551
Investment (Loss)—Net	(709,217)
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):
Net realized gain (loss) on investments	23,782,308
Net unrealized appreciation (depreciation) on investments	(2,153,626)
Net Realized and Unrealized Gain (Loss) on Investments	21,628,682
Net Increase in Net Assets Resulting from Operations	20,919,465

See notes to financial statements.


The Fund	13

STATEMENT OF CHANGES IN NET ASSETS


	Year Ended August 31,
	2011	2010
Operations ($):
Investment (loss)—net	(709,217)	(77,479)
Net realized gain (loss) on investments	23,782,308	4,443,160
Net unrealized appreciation
(depreciation) on investments	(2,153,626)	2,996,662
Net Increase (Decrease) in Net Assets
Resulting from Operations	20,919,465	7,362,343
Dividends to Shareholders from ($):
Investment income—net	(22,307)	(289,551)
Capital Stock Transactions ($):
Net proceeds from shares sold	7,120,073	6,198,985
Dividends reinvested	21,930	285,155
Cost of shares redeemed	(54,238,609)	(25,781,361)
Increase (Decrease) in Net Assets
from Capital Stock Transactions	(47,096,606)	(19,297,221)
Total Increase (Decrease) in Net Assets	(26,199,448)	(12,224,429)
Net Assets ($):
Beginning of Period	124,729,811	136,954,240
End of Period	98,530,363	124,729,811
Undistributed investment income—net	—	20,961
Capital Share Transactions (Shares):
Shares sold	352,602	375,478
Shares issued for dividends reinvested	1,001	17,583
Shares redeemed	(2,750,320)	(1,578,660)
Net Increase (Decrease) in Shares Outstanding	(2,396,717)	(1,185,599)

See notes to financial statements.

FINANCIAL HIGHLIGHTS

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


		Year Ended August 31,
	2011	2010	2009	2008	2007
Per Share Data ($):
Net asset value, beginning of period	15.41	14.76	24.19	33.88	41.32
Investment Operations:
Investment income (loss)—net^a	(.10)	(.01)	.05	.08	.04
Net realized and unrealized
gain (loss) on investments	1.99	.69^b	(7.62)	(4.27)	2.28
Total from Investment Operations	1.89	.68	(7.57)	(4.19)	2.32
Distributions:
Dividends from
investment income—net	(.00)^c	(.03)	(.07)	(.00)^c	—
Dividends from net realized
gain on investments	—	—	(1.79)	(5.50)	(9.76)
Total Distributions	(.00)^c	(.03)	(1.86)	(5.50)	(9.76)
Net asset value, end of period	17.30	15.41	14.76	24.19	33.88
Total Return (%)	12.28	4.62	(29.73)	(13.39)	4.68
Ratios/Supplemental Data (%):
Ratio of total expenses
to average net assets	1.48	1.45	1.55	1.38	1.33
Ratio of net expenses
to average net assets	1.48	1.40	1.43	1.37	1.33
Ratio of net investment income
(loss) to average net assets	(.48)	(.05)	.33	.31	.11
Portfolio Turnover Rate	98.84	181.65	54.47	65.98	67.66
Net Assets, end of period ($ x 1,000)	98,530	124,730	136,954	261,379	446,201

a Based on average shares outstanding at each month end.

b Amount includes litigation proceeds received by the fund amounting to $.15 per share for the year ended

August 31, 2010.

c Amount represents less than $.01 per share.

See notes to financial statements.


The Fund	15

NOTES TO FINANCIAL STATEMENTS

NOTE 1—Significant Accounting Policies:

Dreyfus Emerging Leaders Fund (the “fund”) is a separate diversified series of Advantage Funds, Inc. (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company that offers thirteen series, including the fund.The fund’s investment objective is to seek capital growth.The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of NewYork Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager, is the distributor of the fund’s shares, which are sold to the public without a sales charge.

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

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

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

measurement date (i.e. the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value.This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

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

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

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

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

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

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

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


The Fund	17

NOTES TO FINANCIAL STATEMENTS (continued)

Securities not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value. All preceding securities are categorized as Level 1 in the hierarchy.

Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant American Depository Receipts and futures contracts. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.

When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board of Directors. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers.These securities are either categorized as Level 2 or 3 depending on the relevant inputs used.

For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and are categorized as Level 3 in the hierarchy.

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


		Level 2—Other	Level 3—
	Level 1—	Significant	Significant
	Unadjusted	Observable	Unobservable
	Quoted Prices	Inputs	Inputs	Total
Assets ($)
Investments in Securities:
Equity Securities—
Domestic^†	108,938,510	—	—	108,938,510
Equity Securities—
Foreign^†	4,372,107	—	—	4,372,107
Mutual Funds	15,745,771	—	—	15,745,771
† See Statement of Investments for additional detailed categorizations.

In January 2010, FASB issued Accounting Standards Update (“ASU”) No. 2010-06 “Improving Disclosures about FairValue Measurements” (“ASU 2010-06”). The portions of ASU 2010-06 which require reporting entities to prepare new disclosures surrounding amounts and reasons for significant transfers in and out of Level 1 and Level 2 fair value measurements as well as inputs and valuation techniques used to measure fair value for both recurring and nonrecurring fair value measurements that fall in either Level 2 or Level 3 have been adopted by the fund. No significant transfers between Level 1 or Level 2 fair value measurements occurred at August 31, 2011.


The Fund	19

NOTES TO FINANCIAL STATEMENTS (continued)

Level 3 of the fair value hierarchy: quantitative information about the unobservable inputs used in the fair value measurement, the valuation processes used by the reporting entity and a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs. In addition, ASU 2011-04 will require reporting entities to make disclosures about amounts and reasons for all transfers in and out of Level 1 and Level 2 fair value measurements.The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. At this time, management is evaluating the implications of ASU 2011-04 and its impact on the financial statements.

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

Pursuant to a securities lending agreement with The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, the fund may lend securities to qualified institutions. It is the fund’s policy that, at origination, all loans are secured by collateral of at least 102% of the value of U.S. securities loaned and 105% of the value of foreign securities loaned. Collateral equivalent to at least 100% of the market value of securities on loan is maintained at all times. Collateral is either in the form of cash, which can be invested in certain money market mutual funds managed by the Manager, U.S. Government and Agency securities or letters of credit.The fund is entitled to receive all income on securities loaned, in addition to income earned as a result of the lending transaction. Although each security loaned is fully collateralized, the fund bears the risk of delay in recovery of, or loss of rights in, the securities loaned should a borrower fail to return the securities in a timely manner. During the period ended August 31, 2011, The Bank of New York Mellon earned $27,997 from lending portfolio securities, pursuant to the securities lending agreement.

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

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


Affiliated
Investment	Value				Value		Net
Company	8/31/2010	($)	Purchases ($)	Sales ($)	8/31/2011	($)	Assets (%)
Dreyfus
Institutional
Preferred
Plus Money
Market Fund	1,597,000		57,155,000	58,706,000	46,000		.1
Dreyfus
Institutional
Cash
Advantage
Fund	10,922,389		161,642,696	156,865,314	15,699,771		15.9
Total	12,519,389		218,797,696	215,571,314	15,745,771		16.0

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

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

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


The Fund	21

NOTES TO FINANCIAL STATEMENTS (continued)

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

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

At August 31, 2011, the components of accumulated earnings on a tax basis were as follows: accumulated capital losses $41,631,021 and unrealized depreciation $11,566,467.

The accumulated capital loss carryover is available for federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to August 31, 2011. If not applied, the carryover expires in fiscal 2018.

The tax character of distributions paid to shareholders during the fiscal periods ended August 31, 2011 and August 31, 2010 were as follows: ordinary income $22,307 and $289,551, respectively.

During the period ended August 31, 2011, as a result of permanent book to tax differences, primarily due to the tax treatment for net operating losses and real estate investment trusts, the fund increased accumulated undistributed investment income-net by $710,563, decreased accumulated net realized gain (loss) on investments by $521 and decreased paid-in capital by $710,042. Net assets and net asset value per share were not affected by this reclassification.

NOTE 2—Bank Lines of Credit:

The fund participates with other Dreyfus-managed funds in a $225 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective

Facility at the time of borrowing. During the period ended August 31, 2011, the fund did not borrow under the Facilities.

NOTE 3—Management Fee and Other Transactions With Affiliates:

(a) Pursuant to a management agreement with the Manager, the management fee is computed at the annual rate of .90% of the value of the fund’s average daily net assets and is payable monthly.The Manager had agreed from September 1, 2010 through March 31, 2011, to waive receipt of its fees and/or assume the expenses of the fund so that the total annual fund operating expenses (excluding shareholder services fees, taxes, brokerage commissions, interest on borrowings and extraordinary expenses) did not exceed 1.15% of the value of the funds average daily net assets. At August 31, 2011, there were no reductions in management fee, pursuant to the undertakings.

(b) Under the Shareholder Services Plan, the fund pays the Distributor at an annual rate of .25% of the value of the fund’s average daily net assets for the provision of certain services. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (a securities dealer, financial institution or other industry professional) in respect of these services.The Distributor determines the amounts to be paid to Service Agents. During the period ended August 31, 2011, the fund was charged $370,203 pursuant to the Shareholder Services Plan.

The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended August 31, 2011, the fund was charged $76,431 pursuant to the transfer agency agreement, which is included in Shareholder servicing costs in the Statement of Operations.


The Fund	23

NOTES TO FINANCIAL STATEMENTS (continued)

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

The fund compensates The Bank of New York Mellon under a cash management agreement for performing cash management services related to fund subscriptions and redemptions. During the period ended August 31, 2011, the fund was charged $12,412 pursuant to the cash management agreement, which is included in Shareholder servicing costs in the Statement of Operations.These fees were partially offset by earnings credits of $569.

The fund also compensates The Bank of New York Mellon under a custody agreement for providing custodial services for the fund. During the period ended August 31, 2011, the fund was charged $30,706 pursuant to the custody agreement.

During the period ended August 31, 2011, the fund was charged $7,225 for services performed by the Chief Compliance Officer.

The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $85,285, shareholder services plan fees $23,690, custodian fees $10,000, chief compliance officer fees $3,253 and transfer agency per account fees $11,817.

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

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities, during the period ended August 31, 2011 amounted to $142,850,598 and $173,595,860, respectively.

At August 31, 2011, the cost of investments for federal income tax purposes was $140,622,855; accordingly, accumulated net unrealized depreciation on investments was $11,566,467, consisting of $5,083,863 gross unrealized appreciation and $16,650,330 gross unrealized depreciation.

NOTE 5—Plan of Reorganization:

On April 7, 2011, the fund’s Board of Directors approved the merger of the fund and Dreyfus Opportunistic Small Cap Fund (the “Acquiring Fund”). On September 15, 2011, the shareholders of the fund approved a Plan of Reorganization to allow the fund to transfer all of its assets in a tax-free reorganization to the Acquiring Fund, in exchange solely for shares of the Acquiring Fund having an aggregate net asset value equal to the value of the fund’s net assets and the assumption by the Acquiring Fund of the fund’s stated liabilities (the “Reorganization”).The shares of the Acquiring Fund received by the fund in the Reorganization will be distributed by the fund to its shareholders in liquidation of the fund, after which the fund will cease operations and will be terminated as a series of the Company.The Reorganization is anticipated to occur on or about November 28, 2011.


The Fund	25

REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

Shareholders and Board of Directors
Dreyfus Emerging Leaders Fund

We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus Emerging Leaders Fund (one of the series comprising Advantage Funds, Inc.) as of August 31, 2011, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the years indicated therein.These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement.We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting.Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of August 31, 2011 by correspondence with the custodian and others.We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Dreyfus Emerging Leaders Fund at August 31, 2011, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with U.S. generally accepted accounting principles.

New York, New York

October 27, 2011

IMPORTANT TAX INFORMATION (Unaudited)

For federal tax purposes, the fund hereby designates 100% of the ordinary dividends paid during the fiscal year ended August 31, 2011 as qualifying for the corporate dividends received deduction.Also certain dividends paid by the fund may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. Of the distributions paid during the fiscal year, $22,307 represents the maximum amount that may be considered qualified dividend income. Shareholders will receive notification in early 2012 of the percentage applicable to the preparation of their 2011 income tax returns.


The Fund	27

INFORMATION ABOUT THE RENEWAL OF THE

FUND’S MANAGEMENT AGREEMENT (Unaudited)

At a meeting of the fund’s Board of Directors held on March 1, 2011, the Board considered the renewal of the fund’s Management Agreement pursuant to which Dreyfus provides the fund with investment advisory and administrative services (the “Agreement”). The Board members, none of whom are “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the fund, were assisted in their review by independent legal counsel and met with counsel in executive session separate from representatives of Dreyfus. In considering the renewal of the Agreement, the Board considered all factors that it believed to be relevant, including those discussed below.The Board did not identify any one factor as dispositive, and each Board member may have attributed different weights to the factors considered.

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

considered Dreyfus’ extensive administrative, accounting, and compliance infrastructures.The Board also considered portfolio management’s brokerage policies and practices (including policies and practices regarding soft dollars) and the standards applied in seeking best execution.

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

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


The Fund	29

INFORMATION ABOUT THE RENEWAL OF THE FUND’S

MANAGEMENT AGREEMENT (Unaudited) (continued)

The Board members also reviewed the range of actual and contractual management fees and total expenses of the Expense Group and Expense Universe funds and discussed the results of the comparisons. They noted that the fund’s contractual management fee was below the Expense Group median, the fund’s actual management fee was below the Expense Group and Expense Universe medians and the fund’s total expenses were above the Expense Group and the Expense Universe medians.The Board also considered the current fee waiver and expense reimbursement arrangement undertaken by Dreyfus.

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

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

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

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

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

The Board concluded that the nature, extent and quality of the services provided by Dreyfus are adequate and appropriate.
The Board was concerned with the fund’s relative performance and agreed to closely monitor performance.
The Board concluded that the fee paid to Dreyfus was reasonable in light of the considerations described above.


The Fund	31

INFORMATION ABOUT THE RENEWAL OF THE FUND’S

MANAGEMENT AGREEMENT (Unaudited) (continued)

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

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

BOARD MEMBERS INFORMATION (Unaudited)

Joseph S. DiMartino (67)

Chairman of the Board (1995)

Principal Occupation During Past 5Years:

• Corporate Director and Trustee

Other Public Company Board Memberships During Past 5Years:

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

and medium size companies, Director (1997-present)

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

businesses, Director (2005-2009)

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

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

No. of Portfolios for which Board Member Serves: 167

———————

Peggy C. Davis (68)

Board Member (2006)

Principal Occupation During Past 5Years:

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

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

and the law, legal process and professional methodology and training

No. of Portfolios for which Board Member Serves: 53

———————

David P. Feldman (71)

Board Member (1996)

Principal Occupation During Past 5Years:

• Corporate Director and Trustee

Other Public Company Board Memberships During Past 5Years:

• BBH Mutual Funds Group (4 registered mutual funds), Director (1992-present)

• QMed, Inc. a healthcare company, Director (1999-2007)

No. of Portfolios for which Board Member Serves: 50


The Fund	33

BOARD MEMBERS INFORMATION (Unaudited) (continued)

Ehud Houminer (71)

Board Member (1993)

Principal Occupation During Past 5Years:

• Executive-in-Residence at the Columbia Business School, Columbia University (1992-present)

Other Public Company Board Memberships During Past 5Years:

• Avnet Inc., an electronics distributor, Director (1993-present)

No. of Portfolios for which Board Member Serves: 64

———————

Dr. Martin Peretz (72)

Board Member (2006)

Principal Occupation During Past 5Years:

• Editor-in-Chief Emeritus of The New Republic Magazine (2010-present) (previously,

Editor-in-Chief, 1974-2010)

• Director of TheStreet.com, a financial information service on the web (1996-present)

No. of Portfolios for which Board Member Serves: 35

———————

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

James F. Henry, Emeritus Board Member
Dr. Paul A. Marks, Emeritus Board Member
Gloria Messinger, Emeritus Board Member

OFFICERS OF THE FUND (Unaudited)

BRADLEY J. SKAPYAK, President since January 2010.

Chief Operating Officer and a director of the Manager since June 2009. From April 2003 to June 2009, Mr. Skapyak was the head of the Investment Accounting and Support Department of the Manager. He is an officer of 75 investment companies (comprised of 167 portfolios) managed by the Manager. He is 52 years old and has been an employee of the Manager since February 1988.

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

Assistant General Counsel of BNY Mellon, and an officer of 76 investment companies (comprised of 192 portfolios) managed by the Manager. He is 51 years old and has been an employee of the Manager since October 1991.

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

Counsel of BNY Mellon, and an officer of 76 investment companies (comprised of 192 portfolios) managed by the Manager. She is 38 years old and has been an employee of the Manager since July 1995.

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

Senior Counsel of BNY Mellon and Secretary of the Manager, and an officer of 76 investment companies (comprised of 192 portfolios) managed by the Manager. He is 45 years old and has been an employee of the Manager since December 1996.

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

Senior Counsel of BNY Mellon, and an officer of 76 investment companies (comprised of 192 portfolios) managed by the Manager. She is 55 years old and has been an employee of the Manager since October 1988.

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

Senior Counsel of BNY Mellon, and an officer of 76 investment companies (comprised of 192 portfolios) managed by the Manager. He is 49 years old and has been an employee of the Manager since June 2000.

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

Managing Counsel of BNY Mellon, and an officer of 76 investment companies (comprised of 192 portfolios) managed by the Manager. She is 36 years old and has been an employee of the Manager since February 2001.

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

Assistant General Counsel of BNY Mellon, and an officer of 76 investment companies (comprised of 192 portfolios) managed by the Manager. She is 48 years old and has been an employee of the Manager since February 1984.

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

Senior Managing Counsel of BNY Mellon, and an officer of 76 investment companies (comprised of 192 portfolios) managed by the Manager. He is 48 years old and has been an employee of the Manager since February 1991.

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

Senior Counsel of BNY Mellon, and an officer of 76 investment companies (comprised of 192 portfolios) managed by the Manager. She is 41 years old and has been an employee of the Manager since August 2001.


The Fund	35

OFFICERS OF THE FUND (Unaudited) (continued)

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

Managing Counsel of BNY Mellon, and an officer of 76 investment companies (comprised of 192 portfolios) managed by the Manager. He is 59 years old and has been an employee of the Manager since May 1986.

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

Senior Managing Counsel of BNY Mellon, and an officer of 76 investment companies (comprised of 192 portfolios) managed by the Manager. He is 46 years old and has been an employee of the Manager since October 1990.

JAMES WINDELS, Treasurer since November 2001.

Director – Mutual Fund Accounting of the Manager, and an officer of 76 investment companies (comprised of 192 portfolios) managed by the Manager. He is 52 years old and has been an employee of the Manager since April 1985.

RICHARD CASSARO, Assistant Treasurer since January 2008.

Senior Accounting Manager – Money Market and Municipal Bond Funds of the Manager, and an officer of 76 investment companies (comprised of 192 portfolios) managed by the Manager. He is 52 years old and has been an employee of the Manager since September 1982.

GAVIN C. REILLY, Assistant Treasurer since December 2005.

Tax Manager of the Investment Accounting and Support Department of the Manager, and an officer of 76 investment companies (comprised of 192 portfolios) managed by the Manager. He is 43 years old and has been an employee of the Manager since April 1991.

ROBERT ROBOL, Assistant Treasurer since August 2005.

Senior Accounting Manager – Fixed Income Funds of the Manager, and an officer of 76 investment companies (comprised of 192 portfolios) managed by the Manager. He is 47 years old and has been an employee of the Manager since October 1988.

ROBERT SALVIOLO, Assistant Treasurer since July 2007.

Senior Accounting Manager – Equity Funds of the Manager, and an officer of 76 investment companies (comprised of 192 portfolios) managed by the Manager. He is 44 years old and has been an employee of the Manager since June 1989.

ROBERT SVAGNA, Assistant Treasurer since December 2002.

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

Chief Compliance Officer of the Manager and The Dreyfus Family of Funds (76 investment companies, comprised of 192 portfolios). From November 2001 through March 2004, Mr. Connolly was first Vice-President, Mutual Fund Servicing for Mellon Global Securities Services. In that capacity, Mr. Connolly was responsible for managing Mellon’s Custody, Fund Accounting and Fund Administration services to third-party mutual fund clients. He is 54 years old and has served in various capacities with the Manager since 1980, including manager of the firm’s Fund Accounting Department from 1997 through October 2001.

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

Chief Compliance Officer of the Distributor, and the Anti-Money Laundering Compliance Officer of 72 investment companies (comprised of 188 portfolios) managed by the Manager. He is 56 years old and has been an employee of the Distributor since October 1999.


The Fund	37

Ticker Symbol: DRELX

Telephone 1-800-DREYFUS

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

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

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

Dreyfus

International

Value Fund

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

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

Dreyfus
International Value Fund

The Fund

A LETTER FROM THE CHAIRMAN AND CEO

Dear Shareholder:

We are pleased to present this annual report for Dreyfus International Value Fund, covering the 12-month period from September 1, 2010, through August 31, 2011. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.

Although stocks in some markets rallied strongly through the end of 2010 due to expectations of a more robust economic recovery, the reporting period ended amid broadly deteriorating investor sentiment due to disappointing global economic data, an escalating sovereign debt crisis in Europe and a contentious debate regarding taxes, spending and borrowing in the United States. In the final month of the reporting period, a major credit rating agency downgraded U.S. long-term debt, marking the first time in history that U.S.Treasury securities were not assigned the highest possible credit rating. Stocks in markets throughout the world proved volatile in this tumultuous environment, as the stalled U.S. and global economies caused many market sectors to give back a portion of the reporting period’s previous gains.

The global economic outlook currently is clouded by heightened market volatility and geopolitical instability, but we believe that a sustained, moderate global expansion is more likely than a double-dip recession. Inflationary pressures appear to be waning in most countries, including the United States, as energy prices have retreated from their highs.Various central banks have signaled their intention to maintain accommodative monetary policies, which may help offset the financial stresses expected from recent fiscal policy choices in the United States and Europe. To assess how these and other developments may affect your investments, we encourage you, as always, to speak with your financial advisor.

Thank you for your continued confidence and support.

Jonathan R. Baum
Chairman and Chief Executive Officer
The Dreyfus Corporation
September 15, 2011

DISCUSSION OF FUND PERFORMANCE

For the period of September 1, 2010, through August 31, 2011, as provided by D. Kirk Henry, Senior Portfolio Manager

Fund and Market Performance Overview

For the 12-month period ended August 31, 2011, Dreyfus International Value Fund’s Class A shares produced a total return of 4.32%, Class B shares returned 3.14%, Class C shares returned 3.48% and Class I shares returned 4.67%.¹In comparison, the fund’s benchmark, the Morgan Stanley Capital International Europe,Australasia, Far East Index (“MSCI EAFE Index”), produced a total return of 10.01% for the same period.²Strong corporate earnings buoyed international stocks over the reporting period’s first half, but macroeconomic challenges later erased many of those gains.The fund produced lower returns than its benchmark, as the valuation factors considered by our investment process fell out of favor among investors.

The Fund’s Investment Approach

The fund seeks long-term capital growth.The fund ordinarily invests most of its assets in securities of foreign companies which Dreyfus considers to be value companies.

The fund’s investment approach is value-oriented and research-driven. In selecting stocks, we attempt to identify potential investments through extensive quantitative and fundamental research. Emphasizing individual stock selection over economic or industry trends, the fund focuses on three key factors: value, or how a stock is valued relative to its intrinsic worth based on traditional value measures; business health, or overall efficiency and profitability as measured by return on assets and return on equity; and business momentum, or the presence of a catalyst (such as corporate restructuring, change in management or spin-off) that will trigger a price increase near term to midterm.

The fund typically sells a stock when it is no longer considered a value company, appears less likely to benefit from the current market and economic environment, shows deteriorating fundamentals or declining momentum, or falls short of our expectations.

Macroeconomic Developments Challenged Global Markets

Expectations of continued global economic recovery prevailed through the first quarter of 2011, supporting investor sentiment and earnings of


The Fund	3

DISCUSSION OF FUND PERFORMANCE (continued)

international companies.While global markets continued to advance during the spring of 2011, investors grew concerned about several economic challenges, including a sovereign debt crisis in Europe, inflationary pressures in China and rising energy prices stemming from political unrest in the Middle East. In March, catastrophic natural and nuclear disasters struck Japan, causing disruptions in the global industrial supply chain. However, most equity markets rebounded quickly, and the MSCI EAFE Index hit new highs for the reporting period in April.

By May, investor sentiment began to deteriorate in earnest. U.S. economic growth proved more sluggish than expected, and investors worried about a contentious debate regarding government spending and borrowing. In Europe, the debt problems facing Ireland, Portugal, Spain and Italy intensified, and Greece faced the possibility of default. Consequently, international markets lost much of the ground they had gained earlier.

Valuation Criteria Fell Out of Favor

Companies that met near-term expectations tended to hold up well in this environment, but those that fell short were punished, often regardless of attractive valuations and longer-term fundamental strengths. In Hong Kong, apparel retailer Esprit Holdings suffered amid slower economic growth in European markets despite apparent progress in engineering a turnaround. German electric utilities RWE and E.ON were hurt by the government’s decision to phase out nuclear power, and the fund did not own some of the German carmakers that captured market share from idled Japanese companies. Some metals-and-mining companies in Australia buoyed the benchmark’s return but did not meet our investment criteria. A number of French financial companies struggled with exposure to the troubled debt of nearby nations, and food retailer Carrefour encountered competitive pressures. In Japan, technology companies Ricoh, Fujitsu and NEC were hurt by earthquake-related disruptions, while Nintendo encountered disappointing sales of a new gaming product. U.K. catalog retailer Home Retail Group and the Netherlands’ Koninklijke Philips Electronics also detracted from relative performance.

The fund achieved better results through lack of exposure to Greece and an underweighted position in Spain. In Norway, aluminum producer Norsk Hydro benefited from rising commodity prices. Financial institutions in Singapore, including DBS Group Holdings and United Overseas Bank, proved well positioned to finance the region’s growth.

U.K. insurance company Resolution also fared relatively well.The health care sector benefited as investors turned to traditionally defensive market sectors, bolstering pharmaceutical developers Sanofi, Roche Holding and Novartis. Finally, Japanese telecommunications firm KDDI climbed on the strength of a recent corporate restructuring and stock repurchase program.

Identifying Opportunities Despite Global Challenges

Although we expect the global recovery to persist, current challenges could affect some regions and industry groups more than others.We have found few opportunities among financial companies in the European Union, but some in Japan and the United Kingdom look more attractive to us.We also have identified what we believe to be compelling values among consumer discretionary companies, and we have continued to seek growth opportunities in the health care sector.

September 15, 2011


	Please note, the position in any security highlighted with italicized typeface was sold during the
	reporting period.
	Equity funds are subject generally to market, market sector, market liquidity, issuer and investment
	style risks, among other factors, to varying degrees, all of which are more fully described in the
	fund’s prospectus.
	The fund’s performance will be influenced by political, social and economic factors affecting
	investments in foreign companies. Special risks associated with investments in foreign companies
	include exposure to currency fluctuations, less liquidity, less developed or less efficient trading
	markets, lack of comprehensive company information, political instability and differing auditing
	and legal standards.These risks are enhanced in emerging market countries. Please read the
	prospectus for further discussion of these risks.
1	Total return includes reinvestment of dividends and any capital gains paid, and does not take into
	consideration the maximum initial sales charge in the case of Class A shares, or the applicable
	contingent deferred sales charges imposed on redemptions in the case of Class B and Class C
	shares. Had these charges been reflected, returns would have been lower. Past performance is no
	guarantee of future results. Share price, yield and investment return fluctuate such that upon
	redemption, fund shares may be worth more or less than their original cost.The fund’s returns reflect
	the absorption of certain fund expenses by The Dreyfus Corporation pursuant to an agreement in
	effect through January 1, 2012, at which time it may be extended, terminated or modified. Had
	these expenses not been absorbed, the fund’s returns would have been lower.
2	SOURCE: LIPPER INC. — Reflects reinvestment of net dividends and, where applicable,
	capital gain distributions.The Morgan Stanley Capital International Europe,Australasia, Far East
	(MSCI EAFE) Index is an unmanaged index composed of a sample of companies representative
	of the market structure of European and Pacific Basin countries.The Index does not take into
	account fees and expenses to which the fund is subject. Investors cannot invest directly in any index.


The Fund	5

FUND PERFORMANCE


†	Source: Lipper Inc.
^††	The total return figures presented for Class B and Class C shares of the fund reflect the performance of the fund’s
	Class A shares for the period prior to November 15, 2002 (the inception date for Class B and Class C shares
	respectively), adjusted to reflect the applicable sales load for each share class. The total return figures presented for
	Class I shares of the fund reflect the performance of the fund’s Class A shares for the period prior to November 15,
	2002 (the inception date for Class I shares).
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in each of the Class A, Class B, Class C and Class I shares of
Dreyfus International Value Fund on 8/31/01 to a $10,000 investment made in the Morgan Stanley Capital
International Europe,Australasia, Far East Index (the “Index”) on that date.All dividends and capital gain
distributions are reinvested.
The fund’s performance shown in the line graph above takes into account the maximum initial sales charge on Class A
shares and all other applicable fees and expenses on all classes. Performance for Class B shares assumes the conversion of
Class B shares to Class A shares at the end of the sixth year following the date of purchase.The Index is an unmanaged
index composed of a sample of companies representative of the market structure of European and Pacific Basin countries.
Unlike a mutual fund, the Index is not subject to charges, fees and other expenses. Investors cannot invest directly in any
index. Further information relating to fund performance, including expense reimbursements, if applicable, is contained in
the Financial Highlights section of the prospectus and elsewhere in this report.


Average Annual Total Returns as of 8/31/11

Inception
	Date	1Year	5 Years	10 Years
Class A shares
with maximum sales charge (5.75%)	9/29/95	–1.65%	–4.19%	3.59%
without sales charge	9/29/95	4.32%	–3.05%	4.20%
Class B shares
with applicable redemption charge ^†	11/15/02	–0.86%	–4.17%	3.81%^†††
without redemption	11/15/02	3.14%	–3.92%	3.81%^†††
Class C shares
with applicable redemption charge ^††	11/15/02	2.48%	–3.80%	3.52%^†††
without redemption	11/15/02	3.48%	–3.80%	3.52%^†††
Class I shares	11/15/02	4.67%	–2.62%	4.56%^†††
Morgan Stanley Capital
International Europe,
Australasia, Far East Index		10.01%	–1.48%	4.96%


Past performance is not predictive of future performance.The fund’s performance shown in the graph and table does not
reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
†	The maximum contingent deferred sales charge for Class B shares is 4%.After six years Class B shares convert to
	Class A shares.
††	The maximum contingent deferred sales charge for Class C shares is 1% for shares redeemed within one year of the
	date of purchase.
^†††	The total return performance figures presented for Class B and Class C shares of the fund reflect the performance of
	the fund’s Class A shares for the period prior to November 15, 2002 (the inception date for Class B and Class C
	shares respectively), adjusted to reflect the applicable sales load for each share class.The total return performance
	figures presented for Class I shares of the fund reflect the performance of the fund’s Class A shares for the period
	prior to November 15, 2002 (the inception date for Class I shares).


The Fund	7

UNDERSTANDING YOUR FUND’S EXPENSES (Unaudited)

Review your fund’s expenses

The table below shows the expenses you would have paid on a $1,000 investment in Dreyfus International Value Fund from March 1, 2011 to August 31, 2011. It also shows how much a $1,000 investment would be worth at the close of the period, assuming actual returns and expenses.


Expenses and Value of a $1,000 Investment
assuming actual returns for the six months ended August 31, 2011
		Class A		Class B		Class C		Class I
Expenses paid per $1,000^†	$	6.82	$	12.63	$	10.31	$	4.91
Ending value (after expenses)	$	853.80	$	848.30	$	850.30	$	855.00

COMPARING YOUR FUND’S EXPENSES

WITH THOSE OF OTHER FUNDS (Unaudited)

Using the SEC’s method to compare expenses


Expenses and Value of a $1,000 Investment
assuming a hypothetical 5% annualized return for the six months ended August 31, 2011
		Class A		Class B		Class C		Class I
Expenses paid per $1,000^†	$	7.43	$	13.74	$	11.22	$	5.35
Ending value (after expenses)	$	1017.85	$	1,011.54	$	1,014.06	$	1,019.91

† Expenses are equal to the fund’s annualized expense ratio of 1.46% for Class A, 2.71% for Class B, 2.21% for

Class C and 1.05% for Class I, multiplied by the average account value over the period, multiplied by 184/365 (to

reflect the one-half year period).

STATEMENT OF INVESTMENTS

August 31, 2011


Common Stocks—98.3%	Shares	Value ($)
Australia—5.1%
Billabong International	169,170	622,068
BlueScope Steel	484,227	424,443
National Australia Bank	100,780	2,555,320
Nufarm	237,772^a	973,455
Primary Health Care	465,518	1,542,604
Qantas Airways	353,980^a	594,066
QBE Insurance Group	162,120	2,446,964
Toll Holdings	251,139	1,302,003
		10,460,923
Belgium—.3%
Delhaize Group	10,780	722,858
Brazil—1.9%
Banco Santander Brasil, ADS	134,120	1,290,234
Petroleo Brasileiro, ADR	50,900	1,478,645
Tele Norte Leste Participacoes, ADR	90,050	1,179,655
		3,948,534
China—2.9%
Beijing Capital International Airport, Cl. H	1,952,000	932,646
China Dongxiang Group	3,151,000	708,240
China Railway Group, Cl. H	1,814,000	521,890
Foxconn International Holdings	1,910,000^a	949,376
Guangzhou Automobile Group, Cl. H	864,194	935,692
Huaneng Power International, ADR	8,590	168,020
Huaneng Power International, Cl. H	1,714,000	840,946
PetroChina, ADR	7,931	1,019,134
		6,075,944
Finland—1.6%
Nokia	513,250	3,317,759
France—11.9%
Alstom	35,540	1,650,287
Carrefour	106,950	2,851,426
Credit Agricole	111,440	1,091,924
EDF	46,910	1,436,667
France Telecom	135,785	2,594,220
GDF Suez	56,920	1,795,154


The Fund	9

STATEMENT OF INVESTMENTS (continued)


Common Stocks (continued)	Shares	Value ($)
France (continued)
Lagardere	17,140	586,114
Sanofi	54,681	3,979,285
Societe Generale	50,934	1,709,165
Total	93,490	4,565,450
Vivendi	96,732	2,357,368
		24,617,060
Germany—7.6%
Aixtron	26,460	593,140
Allianz	14,810	1,526,017
Bayer	27,730	1,788,146
Celesio	48,640	809,805
Commerzbank	500,010^a	1,486,081
Daimler	21,926	1,186,475
Deutsche Bank	31,420	1,274,827
Deutsche Telekom	94,850	1,199,829
E.ON	164,740	3,610,062
Muenchener Rueckversicherungs	9,390	1,225,715
RWE	25,024	940,009
		15,640,106
Hong Kong—3.7%
China Mobile, ADR	16,530	845,840
Esprit Holdings	1,379,370	3,871,027
Hang Seng Bank	156,700	2,308,481
Pacific Basin Shipping	1,329,000	643,517
		7,668,865
India—.6%
Reliance Industries, GDR	36,794^b	1,274,176
Israel—1.8%
Teva Pharmaceutical Industries, ADR	91,790	3,796,434
Italy—3.2%
Banco Popolare	82,490	141,485
Buzzi Unicem	27,120^a	271,925
ENI	46,395	933,045
Finmeccanica	201,746	1,501,198


Common Stocks (continued)	Shares	Value ($)
Italy (continued)
Saras	1,657,310^a	3,013,984
Unipol Gruppo Finanziario	1,472,794^a	704,091
		6,565,728
Japan—21.4%
Astellas Pharma	26,700	1,003,560
East Japan Railway	33,100	1,977,700
Fujitsu	206,000	1,038,475
INPEX	216	1,452,788
Kao	57,200	1,512,733
Kirin Holdings	66,000	874,024
Matsumotokiyoshi Holdings	62,000	1,262,348
Medipal Holdings	192,600	1,770,803
Mitsubishi UFJ Financial Group	669,900	3,009,607
NEC	254,000^a	517,487
Nintendo	3,870	677,263
Nippon Express	276,000	1,149,850
Nomura Holdings	200,400	840,125
Panasonic	189,700	2,004,275
Ricoh	232,800	2,097,845
Sekisui House	112,000	1,003,422
Seven & I Holdings	55,700	1,467,972
Shimachu	25,000	582,147
Shimizu	219,000	978,164
Shin-Etsu Chemical	46,920	2,359,175
Sumitomo Mitsui Financial Group	93,200	2,744,756
Sumitomo Mitsui Trust Holdings	353,560	1,191,308
Taiyo Nippon Sanso	283,000	2,095,612
Tokyo Electron	33,500	1,599,092
Tokyo Gas	229,000	1,049,745
Tokyo Steel Manufacturing	243,800	2,298,859
Toyoda Gosei	71,400	1,279,363
Toyota Motor	93,000	3,320,648
Yamada Denki	13,850	1,011,121
		44,170,267


The Fund	11

STATEMENT OF INVESTMENTS (continued)


Common Stocks (continued)	Shares	Value ($)
Netherlands—3.5%
Aegon	272,135^a	1,224,361
Heineken	9,780	489,534
Koninklijke Philips Electronics	156,429	3,309,965
Royal Dutch Shell, Cl. A	66,285	2,216,673
		7,240,533
Norway—.3%
Norsk Hydro	114,408	698,488
Russia—.2%
Gazprom, ADR	24,600	306,270
Singapore—2.1%
DBS Group Holdings	265,539	2,921,524
United Overseas Bank	88,654	1,365,550
		4,287,074
South Africa—1.0%
Murray & Roberts Holdings	183,040	727,868
Standard Bank Group	94,340	1,346,269
		2,074,137
South Korea—2.0%
KB Financial Group, ADR	17,434	719,676
Korea Electric Power	22,710^a	480,021
Korea Electric Power, ADR	57,744^a	606,889
Korea Exchange Bank	184,150	1,392,970
KT, ADR	19,520	333,597
SK Telecom, ADR	36,310	583,865
		4,117,018
Spain—1.3%
Banco Bilbao Vizcaya Argentaria	149,664	1,362,614
Gamesa Corp Tecnologica	208,202	1,258,232
		2,620,846
Sweden—3.4%
Husqvarna, Cl. B	191,560	1,001,374


Common Stocks (continued)	Shares	Value ($)
Sweden (continued)
Investor, Cl. B	55,370	1,091,422
Svenska Cellulosa, Cl. B	137,580	1,856,023
Telefonaktiebolaget LM Ericsson, Cl. B	277,920	3,135,721
		7,084,540
Switzerland—6.9%
Adecco	22,880^a	1,068,405
Lonza Group	18,540^a	1,220,509
Novartis	76,186	4,442,489
Roche Holding	27,190	4,760,823
UBS	185,338^a	2,683,991
		14,176,217
Taiwan—.4%
United Microelectronics	2,234,720	870,485
United Kingdom—15.2%
Anglo American	57,193	2,383,699
BAE Systems	311,409	1,391,668
BP	566,393	3,700,223
easyJet	105,840^a	589,995
Home Retail Group	956,458	1,979,585
HSBC Holdings	673,094	5,863,063
Lonmin	114,113	2,432,193
QinetiQ Group	318,490	641,602
Reed Elsevier	102,346	835,674
Resolution	306,491	1,325,410
Royal Dutch Shell, Cl. A	58,719	1,968,325
Tesco	447,713	2,751,557
Unilever	113,132	3,790,472
Vodafone Group	666,468	1,741,820
		31,395,286
Total Common Stocks
(cost $254,693,479)		203,129,548


The Fund	13

STATEMENT OF INVESTMENTS (continued)


Other Investment—.5%	Shares	Value ($)
Registered Investment Company;
Dreyfus Institutional Preferred Plus Money Market Fund
(cost $1,100,000)	1,100,000^c	1,100,000

Total Investments (cost $255,793,479)	98.8%	204,229,548
Cash and Receivables (Net)	1.2%	2,424,697
Net Assets	100.0%	206,654,245

ADR—American Depository Receipts

ADS—American Depository Shares

GDR—Global Depository Receipts

a Non-income producing security.

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

transactions exempt from registration, normally to qualified institutional buyers.At August 31, 2011, this security

was valued at $1,274,176 or .6% of net assets.

c Investment in affiliated money market mutual fund.


Portfolio Summary (Unaudited)^†

	Value (%)		Value (%)
Financial	22.7	Materials	7.6
Health Care	12.1	Information Technology	7.2
Consumer Discretionary	11.3	Utilities	5.3
Energy	10.6	Telecommunication Services	4.1
Industrial	9.8	Money Market Investment	.5
Consumer Staples	7.6		98.8

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

STATEMENT OF ASSETS AND LIABILITIES

August 31, 2011


			Cost	Value
Assets ($):
Investments in securities—See Statement of Investments:
Unaffiliated issuers			254,693,479	203,129,548
Affiliated issuers			1,100,000	1,100,000
Cash				369,859
Cash denominated in foreign currencies			848,156	848,549
Receivable for investment securities sold				956,551
Dividends and interest receivable				955,314
Receivable for shares of Common Stock subscribed				65,310
Prepaid expenses				18,781
				207,443,912
Liabilities ($):
Due to The Dreyfus Corporation and affiliates—Note 3(c)				234,051
Payable for investment securities purchased				326,256
Payable for shares of Common Stock redeemed				113,441
Unrealized depreciation on forward foreign
currency exchange contracts—Note 4				621
Accrued expenses				115,298
				789,667
Net Assets ($)				206,654,245
Composition of Net Assets ($):
Paid-in capital				323,187,719
Accumulated undistributed investment income—net				5,768,709
Accumulated net realized gain (loss) on investments				(70,783,475)
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions				(51,518,708)
Net Assets ($)				206,654,245


Net Asset Value Per Share
	Class A	Class B	Class C	Class I
Net Assets ($)	102,605,503	477,724	11,572,626	91,998,392
Shares Outstanding	9,599,987	45,450	1,100,912	8,618,934
Net Asset Value Per Share ($)	10.69	10.51	10.51	10.67

See notes to financial statements.


The Fund	15

STATEMENT OF OPERATIONS

Year Ended August 31, 2011


Investment Income ($):
Income:
Cash dividends (net of $817,888 foreign taxes withheld at source):
Unaffiliated issuers	8,492,801
Affiliated issuers	6,971
Interest	1,761
Total Income	8,501,533
Expenses:
Management fee—Note 3(a)	2,591,312
Shareholder servicing costs—Note 3(c)	581,443
Custodian fees—Note 3(c)	134,338
Distribution fees—Note 3(b)	120,659
Professional fees	65,468
Registration fees	59,864
Prospectus and shareholders’ reports	14,679
Directors’ fees and expenses—Note 3(d)	14,373
Interest expense—Note 2	5,471
Loan commitment fees—Note 2	3,494
Miscellaneous	36,447
Total Expenses	3,627,548
Less—reduction in management fee due to undertaking—Note 3(a)	(126,749)
Less—reduction in fees due to earnings credits—Note 3(c)	(232)
Net Expenses	3,500,567
Investment Income—Net	5,000,966
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($):
Net realized gain (loss) on investments and foreign currency transactions	24,284,735
Net realized gain (loss) on forward foreign currency exchange contracts	17,667
Net Realized Gain (Loss)	24,302,402
Net unrealized appreciation (depreciation) on
investments and foreign currency transactions	(17,597,496)
Net unrealized appreciation (depreciation) on
forward foreign currency exchange contracts	(3,552)
Net Unrealized Appreciation (Depreciation)	(17,601,048)
Net Realized and Unrealized Gain (Loss) on Investments	6,701,354
Net Increase in Net Assets Resulting from Operations	11,702,320
See notes to financial statements.

STATEMENT OF CHANGES IN NET ASSETS


	Year Ended August 31,
	2011	2010
Operations ($):
Investment income—net	5,000,966	3,399,155
Net realized gain (loss) on investments	24,302,402	5,619,024
Net unrealized appreciation
(depreciation) on investments	(17,601,048)	(20,728,637)
Net Increase (Decrease) in Net Assets
Resulting from Operations	11,702,320	(11,710,458)
Dividends to Shareholders from ($):
Investment income—net:
Class A Shares	(1,435,975)	(2,038,164)
Class B Shares	—	(1,623)
Class C Shares	(49,595)	(101,287)
Class I Shares	(1,769,232)	(1,116,415)
Total Dividends	(3,254,802)	(3,257,489)
Capital Stock Transactions ($):
Net proceeds from shares sold:
Class A Shares	16,430,509	22,461,132
Class B Shares	66,687	80,494
Class C Shares	421,682	1,204,094
Class I Shares	50,489,524	70,574,876
Dividends reinvested:
Class A Shares	1,362,852	1,813,960
Class B Shares	—	1,277
Class C Shares	24,457	49,720
Class I Shares	1,536,803	930,477
Cost of shares redeemed:
Class A Shares	(32,734,376)	(64,561,481)
Class B Shares	(2,141,296)	(3,131,940)
Class C Shares	(4,311,644)	(4,331,776)
Class I Shares	(59,952,698)	(7,831,530)
Increase (Decrease) in Net Assets
from Capital Stock Transactions	(28,807,500)	17,259,303
Total Increase (Decrease) in Net Assets	(20,359,982)	2,291,356
Net Assets ($):
Beginning of Period	227,014,227	224,722,871
End of Period	206,654,245	227,014,227
Undistributed investment income—net	5,768,709	3,116,352


The Fund	17

STATEMENT OF CHANGES IN NET ASSETS (continued)


	Year Ended August 31,
	2011	2010
Capital Share Transactions:
Class A^a
Shares sold	1,392,368	1,975,937
Shares issued for dividends reinvested	119,339	156,773
Shares redeemed	(2,777,334)	(5,713,158)
Net Increase (Decrease) in Shares Outstanding	(1,265,627)	(3,580,448)
Class B^a
Shares sold	5,686	7,049
Shares issued for dividends reinvested	—	112
Shares redeemed	(182,585)	(285,227)
Net Increase (Decrease) in Shares Outstanding	(176,899)	(278,066)
Class C
Shares sold	35,827	106,222
Shares issued for dividends reinvested	2,166	4,346
Shares redeemed	(369,728)	(395,024)
Net Increase (Decrease) in Shares Outstanding	(331,735)	(284,456)
Class I
Shares sold	4,200,758	6,261,787
Shares issued for dividends reinvested	135,164	80,701
Shares redeemed	(5,117,980)	(704,712)
Net Increase (Decrease) in Shares Outstanding	(782,058)	5,637,776

a During the period ended August 31, 2011, 74,673 Class B shares representing $882,387 were automatically

converted to 73,675 Class A shares and during the period ended August 31, 2010, 110,793 Class B shares

representing $1,217,242 were automatically converted to 108,816 Class A shares.

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 fund share.Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions.These figures have been derived from the fund’s financial statements.


		Year Ended August 31,
Class A Shares	2011	2010	2009	2008	2007
Per Share Data ($):
Net asset value, beginning of period	10.37	11.02	12.30	20.21	20.91
Investment Operations:
Investment income—net^a	.20	.15	.15	.27	.23
Net realized and unrealized
gain (loss) on investments	.26	(.65)	(1.01)	(2.93)	2.25
Total from Investment Operations	.46	(.50)	(.86)	(2.66)	2.48
Distributions:
Dividends from investment income—net	(.14)	(.15)	(.42)	(.32)	(.33)
Dividends from net realized
gain on investments	—	—	—	(4.93)	(2.85)
Total Distributions	(.14)	(.15)	(.42)	(5.25)	(3.18)
Net asset value, end of period	10.69	10.37	11.02	12.30	20.21
Total Return (%)^b	4.32	(4.66)	(5.97)	(18.56)	12.47
Ratios/Supplemental Data (%):
Ratio of total expenses
to average net assets	1.54	1.54	1.84	1.57	1.52
Ratio of net expenses
to average net assets	1.49	1.54	1.84	1.56	1.52
Ratio of net investment income
to average net assets	1.70	1.29	1.66	1.71	1.11
Portfolio Turnover Rate	60.72	55.35	69.63	46.96	61.70
Net Assets, end of period ($ x 1,000)	102,606	112,716	159,260	228,308	498,696


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

See notes to financial statements.


The Fund	19

FINANCIAL HIGHLIGHTS (continued)


		Year Ended August 31,
Class B Shares	2011	2010	2009	2008	2007
Per Share Data ($):
Net asset value, beginning of period	10.19	10.78	11.93	19.72	20.46
Investment Operations:
Investment income—net^a	.04	.05	.06	.12	.07
Net realized and unrealized
gain (loss) on investments	.28	(.64)	(.96)	(2.82)	2.21
Total from Investment Operations	.32	(.59)	(.90)	(2.70)	2.28
Distributions:
Dividends from investment income—net	(.00)^b	(.00)^b	(.25)	(.16)	(.17)
Dividends from net realized
gain on investments	—	—	—	(4.93)	(2.85)
Total Distributions	(.00)^b	(.00)^b	(.25)	(5.09)	(3.02)
Net asset value, end of period	10.51	10.19	10.78	11.93	19.72
Total Return (%)^c	3.14	(5.44)	(6.96)	(19.20)	11.65
Ratios/Supplemental Data (%):
Ratio of total expenses
to average net assets	2.50	2.35	2.81	2.40	2.27
Ratio of net expenses
to average net assets	2.47	2.35	2.81	2.39	2.27
Ratio of net investment income
to average net assets	.32	.41	.69	.82	.35
Portfolio Turnover Rate	60.72	55.35	69.63	46.96	61.70
Net Assets, end of period ($ x 1,000)	478	2,265	5,395	9,325	20,597


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

See notes to financial statements.


		Year Ended August 31,
Class C Shares	2011	2010	2009	2008	2007
Per Share Data ($):
Net asset value, beginning of period	10.19	10.84	11.98	19.79	20.52
Investment Operations:
Investment income—net^a	.11	.06	.08	.14	.08
Net realized and unrealized
gain (loss) on investments	.25	(.65)	(.96)	(2.85)	2.21
Total from Investment Operations	.36	(.59)	(.88)	(2.71)	2.29
Distributions:
Dividends from investment income—net	(.04)	(.06)	(.26)	(.17)	(.17)
Dividends from net realized
gain on investments	—	—	—	(4.93)	(2.85)
Total Distributions	(.04)	(.06)	(.26)	(5.10)	(3.02)
Net asset value, end of period	10.51	10.19	10.84	11.98	19.79
Total Return (%)^b	3.48	(5.49)	(6.71)	(19.16)	11.71
Ratios/Supplemental Data (%):
Ratio of total expenses
to average net assets	2.31	2.33	2.63	2.32	2.22
Ratio of net expenses
to average net assets	2.26	2.33	2.63	2.32	2.22
Ratio of net investment income
to average net assets	.91	.56	.87	.91	.40
Portfolio Turnover Rate	60.72	55.35	69.63	46.96	61.70
Net Assets, end of period ($ x 1,000)	11,573	14,604	18,607	30,965	65,715


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

See notes to financial statements.


The Fund	21

FINANCIAL HIGHLIGHTS (continued)


		Year Ended August 31,
Class I Shares	2011	2010	2009	2008	2007^a
Per Share Data ($):
Net asset value, beginning of period	10.36	11.02	12.31	20.27	20.96
Investment Operations:
Investment income—net^b	.28	.22	.19	.34	.28
Net realized and unrealized
gain (loss) on investments	.22	(.68)	(.98)	(2.93)	2.28
Total from Investment Operations	.50	(.46)	(.79)	(2.59)	2.56
Distributions:
Dividends from investment income—net	(.19)	(.20)	(.50)	(.44)	(.40)
Dividends from net realized
gain on investments	—	—	—	(4.93)	(2.85)
Total Distributions	(.19)	(.20)	(.50)	(5.37)	(3.25)
Net asset value, end of period	10.67	10.36	11.02	12.31	20.27
Total Return (%)	4.67	(4.37)	(5.21)	(18.25)	12.91
Ratios/Supplemental Data (%):
Ratio of total expenses
to average net assets	1.15	1.22	1.37	1.21	1.15
Ratio of net expenses
to average net assets	1.09	1.22	1.36	1.20	1.15
Ratio of net investment income
to average net assets	2.29	1.93	2.09	2.16	1.36
Portfolio Turnover Rate	60.72	55.35	69.63	46.96	61.70
Net Assets, end of period ($ x 1,000)	91,998	97,429	41,460	42,444	74,932


a	Effective June 1, 2007, Class R shares were redesignated as Class I shares.
b	Based on average shares outstanding at each month end.

See notes to financial statements.

NOTES TO FINANCIAL STATEMENTS

NOTE 1—Significant Accounting Policies:

Dreyfus International Value Fund (the “fund”) is a separate diversified series of Advantage Funds, Inc. (the “Company”), which is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company and operates as a series company offering thirteen series, including the fund.The fund’s investment objective is to seek long-term capital growth.The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser.

MBSC Securities Corporation (the “Distributor”), a wholly-owned subsidiary of the Manager, is the distributor of the fund’s shares. The fund is authorized to issue 500 million shares of $.001 par value Common Stock.The fund currently offers four classes of shares: Class A (200 million shares authorized), Class B (100 million shares authorized), Class C (100 million shares authorized) and Class I (100 million shares authorized). Class A shares are subject to a sales charge imposed at the time of purchase. Class B shares are subject to a contingent deferred sales charge (“CDSC”) imposed on Class B share redemptions made within six years of purchase and automatically convert to Class A shares after six years. The fund no longer offers Class B shares, except in connection with dividend reinvestment and permitted exchanges of Class B shares. Class C shares are subject to a CDSC on Class C shares redeemed within one year of purchase. Class I shares are sold at net asset value per share only to institutional investors. Other differences between the classes include the services offered to and the expenses borne by each class, the allocation of certain transfer agency costs and certain voting


The Fund	23

NOTES TO FINANCIAL STATEMENTS (continued)

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

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

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

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

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

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

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

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

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


The Fund	25

NOTES TO FINANCIAL STATEMENTS (continued)

of the most recent bid and asked prices, except for open short positions, where the asked price is used for valuation purposes. Bid price is used when no asked price is available. Registered investment companies that are not traded on an exchange are valued at their net asset value.All preceding securities are categorized as Level 1 in the hierarchy.

Fair valuing of securities may be determined with the assistance of a pricing service using calculations based on indices of domestic securities and other appropriate indicators, such as prices of relevant ADRs and futures contracts. Utilizing these techniques may result in transfers between Level 1 and Level 2 of the fair value hierarchy.

When market quotations or official closing prices are not readily available, or are determined not to reflect accurately fair value, such as when the value of a security has been significantly affected by events after the close of the exchange or market on which the security is principally traded (for example, a foreign exchange or market), but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board of Directors. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized as Level 2 or 3 depending on the relevant inputs used.

For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and are categorized as Level 3 in the hierarchy.

Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange. Forward foreign currency exchange contracts (“forward contracts”) are valued at the forward rate. These securities are generally categorized as Level 2 in the hierarchy.

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


		Level 2—Other		Level 3—
	Level 1—	Significant		Significant
	Unadjusted	Observable		Unobservable
	Quoted Prices	Inputs		Inputs	Total
Assets ($)
Investments in Securities:
Equity Securities—
Foreign^†	203,129,548	—		—	203,129,548
Mutual Funds	1,100,000	—		—	1,100,000
Liabilities ($)
Other Financial
Instruments:
Forward Foreign
Currency Exchange
Contracts^††	—	(621	)	—	(621	)


†	See Statement of Investments for additional detailed categorizations.
^††	Amount shown represents unrealized depreciation at period end.


The Fund	27

NOTES TO FINANCIAL STATEMENTS (continued)

IFRS. ASU 2011-04 will require reporting entities to disclose the following information for fair value measurements categorized within Level 3 of the fair value hierarchy: quantitative information about the unobservable inputs used in the fair value measurement, the valuation processes used by the reporting entity and a narrative description of the sensitivity of the fair value measurement to changes in unobservable inputs and the interrelationships between those unobservable inputs. In addition, ASU 2011-04 will require reporting entities to make disclosures about amounts and reasons for all transfers in and out of Level 1 and Level 2 fair value measurements.The new and revised disclosures are effective for interim and annual reporting periods beginning after December 15, 2011. At this time, management is evaluating the implications of ASU 2011-04 and its impact on the financial statements.

(b) Foreign currency transactions: The fund 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 the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized on securities transactions between trade and settlement date, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent of the 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 resulting from changes in exchange rates. Foreign currency gains and losses on investments 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 gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.

Investing in foreign markets may involve special risks and considerations not typically associated with investing in the U.S. These risks include revaluation of currencies, high rates of inflation, repatriation restrictions on income and capital, and adverse political and economic developments. Moreover, securities issued in these markets may be less liquid, subject to government ownership controls and delayed settlements, and their prices may be more volatile than those of comparable securities in the U.S.

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


Affiliated
Investment	Value				Value		Net
Company	8/31/2010	($)	Purchases ($)	Sales ($)	8/31/2011	($)	Assets (%)
Dreyfus
Institutional
Preferred
Plus Money
Market Fund	2,425,000		75,480,000	76,805,000	1,100,000		.5

Certain affiliated investment companies also advised or managed by Dreyfus may also invest in the fund. At August 31, 2011, Dreyfus Diversified International Fund held 80% of the outstanding Class I shares of the fund.

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


The Fund	29

NOTES TO FINANCIAL STATEMENTS (continued)

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

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

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

At August 31, 2011, the components of accumulated earnings on a tax basis were as follows: undistributed ordinary income $5,926,024, accumulated capital losses $66,276,161 and unrealized depreciation $56,138,288. In addition, the fund had $45,049 of passive foreign investment company losses realized after October 31, 2010, which were deferred for tax purposes to the first day of the following fiscal year.

The tax character of distributions paid to shareholders during the fiscal periods ended August 31, 2011 and August 31, 2010 were as follows: ordinary income $3,254,802 and $3,257,489, respectively.

During the period ended August 31, 2011, as a result of permanent book to tax differences, primarily due to the tax treatment for foreign exchange gains and losses and passive foreign investment companies, the fund increased accumulated undistributed investment income-net by $906,193 and decreased accumulated net realized gain (loss) on investments by the same amount. Net assets and net asset value per share were not affected by this reclassification.

NOTE 2—Bank Lines of Credit:

The fund participates with other Dreyfus-managed funds in a $225 million unsecured credit facility led by Citibank, N.A. and a $300 million unsecured credit facility provided by The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus (each, a “Facility”), each to be utilized primarily for temporary or emergency purposes, including the financing of redemptions. In connection therewith, the fund has agreed to pay its pro rata portion of commitment fees for each Facility. Interest is charged to the fund based on rates determined pursuant to the terms of the respective Facility at the time of borrowing.

The average amount of borrowings outstanding under the Facilities during the period ended August 31, 2011 was approximately $403,800, with a related weighted average annualized interest rate of 1.35%.

NOTE 3—Management Fee and Other Transactions with Affiliates:

(a) Pursuant to a management agreement with the Manager, the management fee is computed at the annual rate of 1% of the value of the fund’s average daily net assets and is payable monthly.

Effective March 9, 2011, the Manager has agreed to waive a portion of the fund’s management fee, in the amount of .10% of the value of the fund’s average daily net assets, until January 1, 2012.The reduction in management fee, pursuant to the undertaking, amounted to $126,749 during the period ended August 31, 2011.

During the period ended August 31, 2011, the Distributor retained $2,318 from commissions earned on sales of the fund’s Class A shares and $3,423 and $1,081 from CDSCs on redemptions of the fund’s Class B and Class C shares, respectively.


The Fund	31

NOTES TO FINANCIAL STATEMENTS (continued)

(b) Under the Distribution Plan (the “Plan”) adopted pursuant to Rule 12b-1 under the Act, Class B and Class C shares pay the Distributor for distributing their shares at an annual rate of .75% of the value of the average daily net assets of Class B and Class C shares. During the period ended August 31, 2011, Class B and Class C shares were charged $10,500 and $110,159, respectively, pursuant to the Plan.

(c) Under the Shareholder Services Plan, Class A, Class B and Class C shares pay the Distributor at an annual rate of .25% of the value of their average daily net assets for the provision of certain services.The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the fund and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents (a securities dealer, financial institution or other industry professional) in respect of these services. The Distributor determines the amounts to be paid to Service Agents. During the period ended August 31, 2011, Class A, Class B and Class C shares were charged $300,722, $3,500 and $36,720, respectively, pursuant to the Shareholder Services Plan.

The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, under a transfer agency agreement for providing personnel and facilities to perform transfer agency services for the fund. During the period ended August 31, 2011, the fund was charged $54,714 pursuant to the transfer agency agreement, which is included in Shareholder servicing costs in the Statement of Operations.

cash management agreement, which is included in Shareholder servicing costs in the Statement of Operations.These fees were partially offset by earnings credits of $232.

During the period ended August 31, 2011, the fund was charged $7,225 for services performed by the Chief Compliance Officer.

The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $173,346, Rule 12b-1 distribution plan fees $7,625, shareholder services plan fees $24,032, custodian fees $36,314, chief compliance officer fees $3,253 and transfer agency per account fees $6,700, which are offset against an expense reimbursement currently in effect in the amount of $17,219.

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

(e) A 2% redemption fee is charged and retained by the fund on certain shares redeemed within sixty days following the date of issuance subject to exceptions, including redemptions made through the use of the fund’s exchange privilege. During the period ended August 31, 2011, redemption fees charged and retained by the fund amounted to $42. Effective December 15, 2010, the fund will no longer assess a redemption fee on shares that are redeemed or exchanged.

NOTE 4—Securities Transactions:

The aggregate amount of purchases and sales of investment securities, excluding short-term securities and forward contracts, during the period ended August 31, 2011 amounted to $150,885,175 and $175,447,437, respectively.


The Fund	33

NOTES TO FINANCIAL STATEMENTS (continued)

Forward Foreign Currency Exchange Contracts: The fund enters into forward contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, to settle foreign currency transactions or as a part of its investment strategy. When executing forward contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward contracts, the fund incurs a loss if the value of the contract increases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes a gain if the value of the contract decreases between those dates. With respect to purchases of forward contracts, the fund incurs a loss if the value of the contract decreases between the date the forward contract is opened and the date the forward contract is closed.The fund realizes a gain if the value of the contract increases between those dates. Any realized gain or loss which occurred during the period is reflected in the Statement of Operations.The fund is exposed to foreign currency risk as a result of changes in value of underlying financial instruments. The fund is also exposed to credit risk associated with counterparty nonperformance on these forward contracts, which is typically limited to the unrealized gain on each open contract.The following summarizes open forward contracts at August 31, 2011:


	Foreign
Forward Foreign Currency	Currency			Unrealized
Exchange Contracts	Amount	Proceeds ($)	Value ($)	(Depreciation) ($)
Sales:
Japanese Yen,
Expiring 9/1/2011	22,261,017	290,106	290,727	(621	)

The following summarizes the average market value of derivatives outstanding during the period ended August 31, 2011:


	Average Market Value ($)
Forward contracts	3,300,767

At August 31, 2011, the cost of investments for federal income tax purposes was $260,413,059; accordingly, accumulated net unrealized depreciation on investments was $56,183,511, consisting of $5,706,399 gross unrealized appreciation and $61,889,910 gross unrealized depreciation.

REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

Shareholders and Board of Directors
Dreyfus International Value Fund

We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Dreyfus International Value Fund (one of the series comprising Advantage Funds, Inc.) as of August 31, 2011, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the years indicated therein.These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement.We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of August 31, 2011 by correspondence with the custodian and others.We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Dreyfus International Value Fund at August 31, 2011, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with U.S. generally accepted accounting principles.

New York, New York
October 27, 2011


The Fund	35

IMPORTANT TAX INFORMATION (Unaudited)

In accordance with federal tax law, the fund elects to provide each shareholder with their portion of the fund’s foreign taxes paid and the income sourced from foreign countries.Accordingly, the fund hereby makes the following designations regarding its fiscal year ended August 31, 2011:

—the total amount of taxes paid to foreign countries was $794,725

—the total amount of income sourced from foreign countries was $9,310,689.

Where required by federal tax law rules, shareholders will receive notification of their proportionate share of foreign taxes paid and foreign sourced income for the 2011 calendar year with Form 1099-DIV which will be mailed in early 2012.Also certain dividends paid by the fund may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. Of the distributions paid during the fiscal year, $3,254,802 represents the maximum amount that may be considered qualified dividend income.

INFORMATION ABOUT THE RENEWAL OF THE

FUND’S MANAGEMENT AGREEMENT (Unaudited)

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


The Fund	37

INFORMATION ABOUT THE RENEWAL OF THE FUND’S

MANAGEMENT AGREEMENT (Unaudited) (continued)

agement’s brokerage policies and practices (including policies and practices regarding soft dollars) and the standards applied in seeking best execution.

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

Dreyfus representatives stated that the usefulness of performance comparisons may be affected by a number of factors, including different investment limitations that may be applicable to the fund and comparison funds.The Board members discussed the results of the comparisons and noted that the fund’s total return performance was variously above and below the Performance Group and Performance Universe medians. Dreyfus also provided a comparison of the fund’s calendar year total returns to the returns of the fund’s benchmark index, which showed a tendency to underperform the index in calendar years of positive performance and to outperform the index in calendar years of negative performance. Management noted that the fund’s relative returns in the last year were negatively affected by its focus on high-quality companies at a time when smaller, more speculative stocks fared better.

The Board members also reviewed the range of actual and contractual management fees and total expenses of the Expense Group and Expense Universe funds and discussed the results of the comparisons.

They noted that the fund’s contractual management fee was above the Expense Group median and the fund’s actual management fee and total expenses were above the Expense Group and Expense Universe medians. A representative of Dreyfus noted that Dreyfus has contractually agreed from March 9, 2011 until January 1, 2012 to waive receipt of a portion of the fund’s management fee in the amount of .10% of the value of the fund’s average daily total assets.

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

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


The Fund	39

INFORMATION ABOUT THE RENEWAL OF THE FUND’S

MANAGEMENT AGREEMENT (Unaudited) (continued)

The Board concluded that the nature, extent and quality of the services provided by Dreyfus are adequate and appropriate.
The Board generally was satisfied with the fund’s overall performance, in light of the considerations described above.
The Board concluded that the fee paid to Dreyfus was reasonable in light of the considerations described above.

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


The Fund	41

BOARD MEMBERS INFORMATION (Unaudited)

Joseph S. DiMartino (67)

Chairman of the Board (1995)

Principal Occupation During Past 5Years:

• Corporate Director and Trustee

Other Public Company Board Memberships During Past 5Years:

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

and medium size companies, Director (1997-present)

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

businesses, Director (2005-2009)

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

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

No. of Portfolios for which Board Member Serves: 167

———————

Peggy C. Davis (68)

Board Member (2006)

Principal Occupation During Past 5Years:

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

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

and the law, legal process and professional methodology and training

No. of Portfolios for which Board Member Serves: 53

———————

David P. Feldman (71)

Board Member (1996)

Principal Occupation During Past 5Years:

• Corporate Director and Trustee

Other Public Company Board Memberships During Past 5Years:

• BBH Mutual Funds Group (4 registered mutual funds), Director (1992-present)

• QMed, Inc. a healthcare company, Director (1999-2007)

No. of Portfolios for which Board Member Serves: 50

Ehud Houminer (71)

Board Member (1993)

Principal Occupation During Past 5Years:

• Executive-in-Residence at the Columbia Business School, Columbia University (1992-present)

Other Public Company Board Memberships During Past 5Years:

• Avnet Inc., an electronics distributor, Director (1993-present)

No. of Portfolios for which Board Member Serves: 64

———————

Dr. Martin Peretz (72)

Board Member (2006)

Principal Occupation During Past 5Years:

• Editor-in-Chief Emeritus of The New Republic Magazine (2010-present) (previously,

Editor-in-Chief, 1974-2010)

• Director of TheStreet.com, a financial information service on the web (1996-present)

No. of Portfolios for which Board Member Serves: 35

———————

James F. Henry, Emeritus Board Member
Dr. Paul A. Marks, Emeritus Board Member
Gloria Messinger, Emeritus Board Member


The Fund	43