formnq424.htm - Generated by SEC Publisher for SEC Filing

 

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT
INVESTMENT COMPANY

Investment Company Act file number

811-5652

 

 

 

Dreyfus Municipal Income, Inc.

 

 

(Exact name of Registrant as specified in charter)

 

 

 

 

 

 

c/o The Dreyfus Corporation

200 Park Avenue

New York, New York 10166

 

 

(Address of principal executive offices) (Zip code)

 

 

 

 

 

John Pak, Esq.

200 Park Avenue

New York, New York 10166

 

 

(Name and address of agent for service)

 

 

Registrant's telephone number, including area code:

(212) 922-6000

 

 

Date of fiscal year end:

 

09/30

 

Date of reporting period:

6/30/2014

 

             

 

 


 

 

FORM N-Q

Item 1.                         Schedule of Investments.

 


 

STATEMENT OF INVESTMENTS

Dreyfus Municipal Income, Inc.

June 30, 2014 (Unaudited)

Long-Term Municipal  Coupon  Maturity  Principal    
Investments--148.0%  Rate (%)  Date  Amount ($)   Value ($) 
Arizona--8.4%           
Barclays Capital Municipal Trust           
Receipts (Series 21 W)           
Recourse (Salt River Project           
Agricultural Improvement and           
Power District, Salt River           
Project Electric System           
Revenue)  5.00  1/1/38  9,998,763 a,b  10,974,813 
Pima County Industrial Development           
Authority, Education Revenue           
(American Charter Schools           
Foundation Project)  5.63  7/1/38  2,000,000 c  1,732,280 
Pima County Industrial Development           
Authority, IDR (Tucson           
Electric Power Company Project)  5.75  9/1/29  1,000,000   1,016,220 
Pinal County Electrical District           
Number 4, Electric System           
Revenue  6.00  12/1/38  2,300,000   2,450,052 
Salt Verde Financial Corporation,           
Senior Gas Revenue  5.00  12/1/37  490,000   540,298 
California--23.6%           
California,           
GO (Various Purpose)  5.75  4/1/31  3,950,000   4,648,676 
California,           
GO (Various Purpose)  6.00  3/1/33  1,250,000   1,507,388 
California,           
GO (Various Purpose)  6.50  4/1/33  3,000,000   3,661,620 
California,           
GO (Various Purpose)  6.00  11/1/35  2,500,000   3,021,250 
California Municipal Finance           
Authority, Revenue           
(Southwestern Law School)  6.50  11/1/41  750,000 c  890,423 

 


 

Chula Vista,           
IDR (San Diego Gas and           
Electric Company)  5.88  2/15/34  2,000,000   2,295,820 
JPMorgan Chase Putters/Drivers           
Trust (Series 3869)           
Non-recourse (Los Angeles           
Department of Airports, Senior           
Revenue (Los Angeles           
International Airport))  5.25  5/15/18  10,000,000 a,b  11,498,300 
JPMorgan Chase Putters/Drivers           
Trust (Series 4414)           
Non-recourse (Los Angeles           
Department of Airports, Senior           
Revenue (Los Angeles           
International Airport))  5.00  5/15/21  4,000,000 a,b  4,372,760 
JPMorgan Chase Putters/Drivers           
Trust (Series 4421)           
Non-recourse (The Regents of           
the University of California,           
General Revenue)  5.00  5/15/21  3,750,000 a,b,c   4,210,800 
Sacramento County,           
Airport System Subordinate and           
Passenger Facility Charges           
Grant Revenue  6.00  7/1/35  2,250,000   2,585,700 
Santa Ana Community Redevelopment           
Agency, Tax Allocation Revenue           
(Merged Project Area)  6.75  9/1/28  3,000,000   3,611,910 
Tobacco Securitization Authority           
of Southern California,           
Tobacco Settlement           
Asset-Backed Bonds (San Diego           
County Tobacco Asset           
Securitization Corporation)  5.00  6/1/37  3,500,000   2,846,410 
Tuolumne Wind Project Authority,           
Revenue (Tuolumne Company           
Project)  5.88  1/1/29  1,500,000   1,780,740 
Colorado--6.5%           
Colorado Educational and Cultural           
Facilities Authority, Charter           
School Revenue (American           
Academy Project)  8.00  12/1/40  1,500,000 c  1,739,745 

 


 

E-470 Public Highway Authority,           
Senior Revenue  5.25  9/1/25  1,000,000   1,097,460 
E-470 Public Highway Authority,           
Senior Revenue  5.38  9/1/26  1,000,000   1,101,430 
JPMorgan Chase Putters/Drivers           
Trust (Series 4386)           
Non-recourse (Board of           
Governors of the Colorado           
State University, System           
Enterprise Revenue)  5.00  3/1/20  2,550,000 a,b,c   2,798,931 
RIB Floater Trust (Barclays Bank           
PLC) (Series 25 U-1) Recourse           
(Colorado Springs, Utilities           
System Improvement Revenue)  5.00  11/15/43  4,000,000 a,b  4,456,940 
University of Colorado Regents,           
University Enterprise Revenue  5.38  6/1/38  1,500,000 c  1,719,525 
District of Columbia--4.0%           
RIB Floater Trust (Barclays Bank           
PLC) (Series 15 U) Recourse           
(District of Columbia, Income           
Tax Secured Revenue)  5.00  12/1/35  6,999,163 a,b  7,903,073 
Florida--7.7%           
Davie,           
Educational Facilities Revenue           
(Nova Southeastern University           
Project)  5.63  4/1/43  1,000,000 c  1,094,580 
Greater Orlando Aviation           
Authority, Airport Facilities           
Revenue  6.25  10/1/20  3,980,000   4,814,845 
Mid-Bay Bridge Authority,           
Springing Lien Revenue  7.25  10/1/34  2,500,000   3,037,225 
Palm Beach County Health           
Facilities Authority, Revenue           
(The Waterford Project)  5.88  11/15/37  2,400,000   2,568,000 
Saint Johns County Industrial           
Development Authority, Revenue           
(Presbyterian Retirement           
Communities Project)  5.88  8/1/40  2,500,000   2,689,375 
South Lake County Hospital           
District, Revenue (South Lake           

 


 

Hospital, Inc.)  6.25  4/1/39  1,000,000   1,099,160 
Georgia--1.8%           
Atlanta,           
Water and Wastewater Revenue  6.00  11/1/28  3,000,000   3,611,100 
Hawaii--1.4%           
Hawaii Department of Budget and           
Finance, Special Purpose           
Revenue (Hawaiian Electric           
Company, Inc. and Subsidiary           
Projects)  6.50  7/1/39  2,400,000   2,752,704 
Illinois--5.6%           
Chicago,           
General Airport Third Lien           
Revenue (Chicago O'Hare           
International Airport)  5.63  1/1/35  1,000,000   1,124,800 
Chicago,           
GO  5.00  1/1/24  1,000,000   1,088,250 
Chicago,           
GO (Project and Refunding           
Series)  5.00  1/1/36  1,500,000   1,540,530 
Illinois,           
GO  5.00  8/1/24  1,000,000   1,099,640 
JPMorgan Chase Putters/Drivers           
Trust (Series 4360)           
Non-recourse (Greater Chicago           
Metropolitan Water Reclamation           
District, GO Capital           
Improvement Bonds)  5.00  12/1/19  2,500,000 a,b  2,781,950 
Railsplitter Tobacco Settlement           
Authority, Tobacco Settlement           
Revenue  6.00  6/1/28  2,000,000   2,382,660 
University of Illinois Board of           
Trustees, Auxiliary Facilities           
System Revenue  5.13  4/1/36  1,000,000 c  1,081,610 
Iowa--1.3%           
Iowa Student Loan Liquidity           
Corporation, Student Loan           
Revenue  5.75  12/1/28  2,345,000 c  2,505,539 
Louisiana--.6%           

 


 

Louisiana Public Facilities           
Authority, Revenue (CHRISTUS           
Health Obligated Group)  6.13  7/1/29  1,000,000   1,114,170 
Maine--.7%           
Maine Health and Higher           
Educational Facilities           
Authority, Revenue           
(MaineGeneral Medical Center           
Issue)  7.50  7/1/32  1,250,000   1,452,750 
Maryland--3.2%           
JPMorgan Chase Putters/Drivers           
Trust (Series 4422)           
Non-recourse (Mayor and City           
Council of Baltimore, Project           
Revenue (Water Projects))  5.00  7/1/21  2,000,000 a,b  2,235,600 
Maryland Economic Development           
Corporation, EDR           
(Transportation Facilities           
Project)  5.75  6/1/35  1,000,000   1,064,820 
Maryland Economic Development           
Corporation, PCR (Potomac           
Electric Project)  6.20  9/1/22  2,500,000   2,992,525 
Massachusetts--11.1%           
Barclays Capital Municipal Trust           
Receipts (Series 15 W)           
Recourse (Massachusetts Health           
and Educational Facilities           
Authority, Revenue           
(Massachusetts Institute of           
Technology Issue))  5.00  7/1/38  10,000,000 a,b,c   11,144,200 
JPMorgan Chase Putters/Drivers           
Trust (Series 4395)           
Non-recourse (University of           
Massachusetts Building           
Authority, Project and           
Refunding Revenue)  5.00  5/1/21  3,698,335 a,b,c   4,091,497 
Massachusetts Development Finance           
Agency, Revenue (Tufts Medical           
Center Issue)  7.25  1/1/32  1,500,000   1,817,820 
Massachusetts Educational           
Financing Authority, Education           

 


 

Loan Revenue (Issue K)  5.25  7/1/29  2,500,000 c  2,705,975 
Massachusetts Health and           
Educational Facilities           
Authority, Revenue (Suffolk           
University Issue)  6.25  7/1/30  2,000,000 c  2,327,140 
Michigan--6.8%           
Detroit,           
Sewage Disposal System Senior           
Lien Revenue (Insured; Assured           
Guaranty Municipal Corp.)  7.50  7/1/33  2,140,000   2,348,650 
Detroit,           
Water Supply System Senior           
Lien Revenue  5.00  7/1/31  1,500,000   1,487,280 
Detroit,           
Water Supply System Senior           
Lien Revenue  5.00  7/1/36  3,000,000   2,950,080 
Michigan Strategic Fund,           
SWDR (Genesee Power Station           
Project)  7.50  1/1/21  2,500,000   2,500,000 
Royal Oak Hospital Finance           
Authority, HR (William           
Beaumont Hospital Obligated           
Group) (Prerefunded)  8.00  9/1/18  2,500,000 d  3,216,925 
Wayne County Airport Authority,           
Airport Revenue (Detroit           
Metropolitan Wayne County           
Airport) (Insured; National           
Public Finance Guarantee Corp.)  5.00  12/1/34  1,000,000   1,009,710 
Minnesota--1.8%           
Minneapolis,           
Health Care System Revenue           
(Fairview Health Services)  6.75  11/15/32  3,000,000   3,543,270 
Minnesota Agricultural and           
Economic Development Board,           
Health Care System Revenue           
(Fairview Health Care Systems)  6.38  11/15/29  80,000   80,358 
Mississippi--2.9%           
Mississippi Business Finance           
Corporation, PCR (System           
Energy Resources, Inc. Project)  5.88  4/1/22  3,500,000   3,502,065 

 


 

Warren County,           
Gulf Opportunity Zone Revenue           
(International Paper Company           
Project)  5.38  12/1/35  2,000,000   2,191,100 
New Jersey--4.4%           
New Jersey Economic Development           
Authority, Water Facilities           
Revenue (New Jersey - American           
Water Company, Inc. Project)  5.70  10/1/39  2,000,000   2,183,960 
New Jersey Higher Education           
Student Assistance Authority,           
Senior Student Loan Revenue  5.00  12/1/18  1,500,000 c  1,710,195 
New Jersey Higher Education           
Student Assistance Authority,           
Student Loan Revenue (Insured;           
Assured Guaranty Corp.)  6.13  6/1/30  2,500,000 c  2,721,600 
Tobacco Settlement Financing           
Corporation of New Jersey,           
Tobacco Settlement           
Asset-Backed Bonds  5.00  6/1/29  2,500,000   2,092,450 
New Mexico--1.7%           
Farmington,           
PCR (Public Service Company of           
New Mexico San Juan Project)  5.90  6/1/40  3,000,000   3,315,990 
New York--11.3%           
Barclays Capital Municipal Trust           
Receipts (Series 11 B)           
Recourse (New York City           
Transitional Finance           
Authority, Future Tax Secured           
Revenue)  5.00  5/1/30  7,996,797 a,b  9,088,917 
New York City Educational           
Construction Fund, Revenue  6.50  4/1/28  1,500,000 c  1,882,815 
New York City Industrial           
Development Agency, PILOT           
Revenue (Yankee Stadium           
Project) (Insured; Assured           
Guaranty Corp.)  7.00  3/1/49  1,435,000   1,737,067 
Port Authority of New York and New           
Jersey, Special Project Bonds           

 


 

(JFK International Air           
Terminal LLC Project)  6.00  12/1/36  1,500,000   1,724,115 
RIB Floater Trust (Barclays Bank           
PLC) (Series 16 U) Recourse           
(New York City Municipal Water           
Finance Authority, Water and           
Sewer System Second General           
Resolution Revenue  5.00  6/15/44  7,400,000 a,b  8,039,508 
North Carolina--2.7%           
Barclays Capital Municipal Trust           
Receipts (Series 31 W)           
Recourse (North Carolina           
Medical Care Commission,           
Health Care Facilities Revenue           
(Duke University Health           
System))  5.00  6/1/42  5,000,000 a,b  5,349,400 
Ohio--1.2%           
Butler County,           
Hospital Facilities Revenue           
(UC Health)  5.50  11/1/40  1,500,000   1,638,780 
Ohio Air Quality Development           
Authority, Air Quality Revenue           
(Ohio Valley Electric           
Corporation Project)  5.63  10/1/19  600,000   678,000 
Pennsylvania--2.6%           
Clairton Municipal Authority,           
Sewer Revenue  5.00  12/1/42  1,000,000   1,028,680 
JPMorgan Chase Putters/Drivers           
Trust (Series 3916)           
Non-recourse (Geisinger           
Authority, Health System           
Revenue (Geisinger Health           
System))  5.13  6/1/35  2,000,000 a,b  2,169,340 
Philadelphia,           
GO  6.50  8/1/41  1,750,000   2,026,640 
Rhode Island--1.0%           
Tobacco Settlement Financing           
Corporation of Rhode Island,           
Tobacco Settlement           
Asset-Backed Bonds  6.13  6/1/32  2,000,000   1,999,860 

 


 

South Carolina--6.9%           
JPMorgan Chase Putters/Drivers           
Trust (Series 4379)           
Non-recourse (South Carolina           
Public Service Authority,           
Revenue Obligations (Santee           
Cooper))  5.13  6/1/37  4,800,000 a,b  5,227,584 
South Carolina Public Service           
Authority, Revenue Obligations           
(Santee Cooper)  5.50  1/1/38  3,000,000   3,381,720 
Tobacco Settlement Revenue           
Management Authority of South           
Carolina, Tobacco Settlement           
Asset-Backed Bonds (Escrowed           
to Maturity)  6.38  5/15/30  3,750,000   5,064,862 
Tennessee--1.1%           
JPMorgan Chase Putters/Drivers           
Trust (Series 4416)           
Non-recourse (Metropolitan           
Government of Nashville and           
Davidson County, Water and           
Sewer Revenue)  5.00  7/1/21  2,000,000 a,b  2,250,520 
Texas--13.3%           
Barclays Capital Municipal Trust           
Receipts (Series 39 W)           
Recourse (Texas A&M University           
System Board of Regents,           
Financing System Revenue)  5.00  5/15/39  5,000,000 a,b,c   5,612,350 
Houston,           
Airport System Subordinate           
Lien Revenue  5.00  7/1/25  1,300,000   1,456,169 
JPMorgan Chase Putters/Drivers           
Trust (Series 4356)           
Non-recourse (San Antonio,           
Electric and Gas Systems           
Junior Lien Revenue)  5.00  2/1/21  6,300,000 a,b  6,919,416 
La Vernia Higher Education Finance           
Corporation, Education Revenue           
(Knowledge is Power Program,           
Inc.)  6.25  8/15/39  2,250,000 c  2,512,687 
Lubbock Educational Facilities           

 


 

Authority, Improvement Revenue           
(Lubbock Christian University)  5.25  11/1/37  1,500,000 c  1,548,000 
North Texas Education Finance           
Corporation, Education Revenue           
(Uplift Education)  5.13  12/1/42  2,000,000 c  2,090,060 
North Texas Tollway Authority,           
First Tier System Revenue           
(Insured; Assured Guaranty           
Corp.)  5.75  1/1/40  1,685,000   1,890,132 
North Texas Tollway Authority,           
Second Tier System Revenue  5.75  1/1/38  4,000,000   4,418,560 
Virginia--.9%           
Washington County Industrial           
Development Authority, HR           
(Mountain States Health           
Alliance)  7.25  7/1/19  1,555,000   1,711,200 
Washington--4.4%           
Barclays Capital Municipal Trust           
Receipts (Series 27 B)           
Recourse (King County, Sewer           
Revenue)  5.00  1/1/29  2,999,037 a,b  3,391,662 
Washington Health Care Facilities           
Authority, Mortgage Revenue           
(Highline Medical Center)           
(Collateralized; FHA)           
(Prerefunded)  6.25  8/1/18  2,990,000 d  3,606,867 
Washington Health Care Facilities           
Authority, Revenue (Catholic           
Health Initiatives)  6.38  10/1/36  1,500,000   1,729,125 
West Virginia--.5%           
The County Commission of Harrison           
County, SWDR (Allegheny Energy           
Supply Company, LLC Harrison           
Station Project)  5.50  10/15/37  1,000,000   1,022,070 
Wyoming--1.1%           
Wyoming Municipal Power Agency,           
Power Supply System Revenue  5.50  1/1/38  2,000,000   2,220,260 
U.S. Related--7.5%           
Guam,           

 


 

LOR (Section 30)  5.75  12/1/34  1,500,000   1,638,540 
Puerto Rico Aqueduct and Sewer           
Authority, Senior Lien Revenue  5.13  7/1/37  1,550,000   1,040,902 
Puerto Rico Commonwealth,           
Public Improvement GO  5.50  7/1/32  1,000,000   702,470 
Puerto Rico Commonwealth,           
Public Improvement GO  6.00  7/1/39  1,300,000   951,730 
Puerto Rico Commonwealth,           
Public Improvement GO  6.50  7/1/40  1,000,000   759,970 
Puerto Rico Electric Power           
Authority, Power Revenue  5.00  7/1/37  1,945,000   862,160 
Puerto Rico Electric Power           
Authority, Power Revenue  5.50  7/1/38  5,400,000   2,393,334 
Puerto Rico Electric Power           
Authority, Power Revenue  5.25  7/1/40  1,500,000   664,890 
Puerto Rico Electric Power           
Authority, Power Revenue  5.00  7/1/42  950,000   421,135 
Puerto Rico Sales Tax Financing           
Corporation, Sales Tax Revenue           
(First Subordinate Series)  5.38  8/1/39  1,000,000   781,780 
Puerto Rico Sales Tax Financing           
Corporation, Sales Tax Revenue           
(First Subordinate Series)  6.00  8/1/42  5,500,000   4,577,430 
Total Long-Term Municipal Investments           
(cost $273,002,470)          293,745,369 
Short-Term Municipal  Coupon  Maturity  Principal    
Investments--1.3%  Rate (%)  Date  Amount ($)   Value ($) 
California--.5%           
California,           
GO Notes           
(Kindergarten-University)           
(LOC; Citibank NA)  0.01  7/1/14  1,000,000 e  1,000,000 
Pennsylvania--.8%           
Geisinger Authority,           
Health System Revenue           
(Geisinger Health System)           
(Liquidity Facility; JPMorgan           
Chase Bank)  0.02  7/1/14  1,500,000 e  1,500,000 

 


 

Total Short-Term Municipal Investments         
(cost $2,500,000)      2,500,000  
Total Investments (cost $275,502,470)  149.3 %  296,245,369  
Liabilities, Less Cash and Receivables  (24.1 %)  (47,859,329 ) 
Preferred Stock, at redemption value  (25.2 %)  (50,000,000 ) 
Net Assets Applicable to Common Shareholders  100.0 %  198,386,040  

 

a  Collateral for floating rate borrowings. 
b  Securities exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be 
  resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2014, these 
  securities were valued at $114,517,561 or 57.7% of net assets applicable to Common Shareholders. 
c  At June 30, 2014, the fund had $56,119,952 or 28.3% of net assets invested in securities whose payment of principal 
  and interest is dependent upon revenues generated from education applicable to Common Shareholders. 
d  These securities are prerefunded; the date shown represents the prerefunded date. Bonds which are prerefunded are 
  collateralized by U.S. Government securities which are held in escrow and are used to pay principal and interest on the 
  municipal issue and to retire the bonds in full at the earliest refunding date. 
e  Variable rate demand note - rate shown is the interest rate in effect at June 30, 2014. Maturity date represents the next 
  demand date, or the ultimate maturity date if earlier. 

 

At June 30, 2014, net unrealized appreciation on investments was $20,742,899 of which $28,155,215 related to appreciated investment securities and $7,412,316 related to depreciated investment securities. At June 30, 2014, the cost of investments for federal income tax purposes was substantially the same as the cost for financial reporting purposes.

Summary of Abbreviations     
ABAG  Association of Bay Area Governments  ACA  American Capital Access 
AGC  ACE Guaranty Corporation  AGIC  Asset Guaranty Insurance Company 
AMBAC  American Municipal Bond Assurance Corporation  ARRN  Adjustable Rate Receipt Notes 
BAN  Bond Anticipation Notes  BPA  Bond Purchase Agreement 
CIFG  CDC Ixis Financial Guaranty  COP  Certificate of Participation 
CP  Commercial Paper  DRIVERS  Derivative Inverse Tax-Exempt Receipts 
EDR  Economic Development Revenue  EIR  Environmental Improvement Revenue 

 


 

FGIC  Financial Guaranty Insurance Company  FHA  Federal Housing Administration 
FHLB  Federal Home Loan Bank  FHLMC  Federal Home Loan Mortgage Corporation 
FNMA  Federal National Mortgage Association  GAN  Grant Anticipation Notes 
GIC  Guaranteed Investment Contract  GNMA  Government National Mortgage Association 
GO  General Obligation  HR  Hospital Revenue 
IDB  Industrial Development Board  IDC  Industrial Development Corporation 
IDR  Industrial Development Revenue  LIFERS  Long Inverse Floating Exempt Receipts 
LOC  Letter of Credit  LOR  Limited Obligation Revenue 
LR  Lease Revenue  MERLOTS  Municipal Exempt Receipts Liquidity Option 
      Tender 
MFHR  Multi-Family Housing Revenue  MFMR  Multi-Family Mortgage Revenue 
PCR  Pollution Control Revenue  P-FLOATS  Puttable Floating Option Tax-Exempt Receipts 
PILOT  Payment in Lieu of Taxes  PUTTERS  Puttable Tax-Exempt Receipts 
RAC  Revenue Anticipation Certificates  RAN  Revenue Anticipation Notes 
RAW  Revenue Anticipation Warrants  RIB  Residual Interest Bonds 
ROCS  Reset Option Certificates  RRR  Resources Recovery Revenue 
SAAN  State Aid Anticipation Notes  SBPA  Standby Bond Purchase Agreement 
SFHR  Single Family Housing Revenue  SFMR  Single Family Mortgage Revenue 
SONYMA  State of New York Mortgage Agency  SPEARS  Short Puttable Exempt Adjustable Receipts 
SWDR  Solid Waste Disposal Revenue  TAN  Tax Anticipation Notes 
TAW  Tax Anticipation Warrants  TRAN  Tax and Revenue Anticipation Notes 

 


 

XLCA  XL Capital Assurance 

 


 

The following is a summary of the inputs used as of June 30, 2014 in valuing the fund's investments:

      Level 3 -   
  Level 1 -  Level 2 - Other  Significant   
  Unadjusted Quoted  Significant  Unobservable   
Assets ($)  Prices  Observable Inputs  Inputs  Total 
Investments in Securities:         
Municipal Bonds+  -  296,245,369  -  296,245,369 

 

+ See Statement of Investments for additional detailed categorizations. 

 


 

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.

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

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

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

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

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

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

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:


 

Investments in securities are valued each business day by an independent pricing service (the “Service”) approved by the fund's Board.

Investments for which quoted bid prices are readily available and are representative of the bid side of the market in the judgment of the Service are valued at the mean between the quoted bid prices (as obtained by the Service from dealers in such securities) and asked prices (as calculated by the Service based upon its evaluation of the market for such securities). Other investments (which constitute a majority of the portfolio securities) are carried at fair value as determined by the Service, based on methods which include consideration of the following: yields or prices of municipal securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. All preceding securities are categorized as Level 2 in the 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 fund's Board. 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.

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


 

interest based on the remaining cash flow of the trust, after payment of interest on the other securities and various expenses of the trust.

Additional investment related disclosures are hereby incorporated by reference to the annual and semi-annual reports previously filed with the Securities and Exchange Commission on Form N-CSR.


 

 

Item 2.             Controls and Procedures.

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

(b)        There were no changes to the Registrant's internal control over financial reporting that occurred during the Registrant's most recently ended fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting. 

Item 3.             Exhibits.

(a)        Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.

 


 

 

FORM N-Q

SIGNATURES

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

Dreyfus Municipal Income, Inc.

By:       /s/Bradley J. Skapyak

            Bradley J. Skapyak

            President

 

Date:    August 21, 2014

 

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

 

By:       /s/ Bradley J. Skapyak

            Bradley J. Skapyak

            President

 

Date:    August 21, 2014

 

By:       /s/ James Windels

            James Windels

            Treasurer

 

Date:    August 21, 2014

 

EXHIBIT INDEX

(a)        Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.  (EX-99.CERT)