MORGAN STANLEY DEAN WITTER INCOME …pdf.secdatabase.com/1284/0000950136-00-001697.pdfbusiness...

Business AddressTWO WORLD TRADE CENTER72ND FLOORNEW YORK NY 100482123922550

Mailing AddressTWO WORLD TRADE CENTER72ND FLOORNEW YORK NY 10048

SECURITIES AND EXCHANGE COMMISSION

FORM 485BPOSPost-effective amendments [Rule 485(b)]

Filing Date: 2000-11-29SEC Accession No. 0000950136-00-001697

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FILERMORGAN STANLEY DEAN WITTER INCOME BUILDER FUNDCIK:1011196| State of Incorp.:MA | Fiscal Year End: 0930Type: 485BPOS | Act: 33 | File No.: 333-01995 | Film No.: 779760

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 29, 2000

REGISTRATION NOS.: 333-01995811-7575

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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549----------------

FORM N-1A

REGISTRATION STATEMENTUNDER THE SECURITIES ACT OF 1933 [X]

PRE-EFFECTIVE AMENDMENT NO. [ ]POST-EFFECTIVE AMENDMENT NO. 7 [X]

AND/ORREGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY

ACT OF 1940 [X]AMENDMENT NO. 8 [X]----------------

MORGAN STANLEY DEAN WITTER INCOME BUILDER FUND

(A MASSACHUSETTS BUSINESS TRUST)

(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

TWO WORLD TRADE CENTERNEW YORK, NEW YORK 10048

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 392-1600

BARRY FINK, ESQ.TWO WORLD TRADE CENTER

NEW YORK, NEW YORK 10048

(NAME AND ADDRESS OF AGENT FOR SERVICE)Copy to:

STUART M. STRAUSS, ESQ.MAYER, BROWN & PLATT

1675 BROADWAYNEW YORK, NEW YORK 10019

----------------APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:

As soon as practicable after this Post-Effective Amendment becomes effective.

IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX)

immediately upon filing pursuant to paragraph (b)----

X on November 30, 2000 pursuant to paragraph (b)----

60 days after filing pursuant to paragraph (a)----

on (date) pursuant to paragraph (a) of rule 485.----

----------------

AMENDING THE PROSPECTUS AND UPDATING FINANCIAL STATEMENTS----------------------------------------------------------------------------------------------------------------------------------------------------------------

PROSPECTUS - NOVEMBER 30, 2000

MORGAN STANLEY DEAN WITTER



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INCOME BUILDER FUND

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A MUTUAL FUND WHOSE PRIMARY INVESTMENT OBJECTIVEIS TO SEEK REASONABLE INCOME; AS A SECONDARYOBJECTIVE, THE FUND SEEKS GROWTH OF CAPITAL

The Securities and Exchange Commission has not approved or disapproved thesesecurities or passed upon the adequacy of this Prospectus. Any representation to

the contrary is a criminal offense.

CONTENTS

<TABLE><S> <C>The Fund Investment Objectives .............................1

Principal Investment Strategies ...................1Principal Risks ...................................2Past Performance ..................................4Fees and Expenses .................................5Additional Investment Strategy Information ........6Additional Risk Information .......................7Fund Management ...................................8

Shareholder Information Pricing Fund Shares ...............................9How to Buy Shares .................................9How to Exchange Shares ...........................11How to Sell Shares ...............................13Distributions ....................................15Tax Consequences .................................15Share Class Arrangements .........................16

Financial Highlights .................................................25Our Family of Funds ................................. Inside Back Cover</TABLE>

This Prospectus contains important information aboutthe Fund. Please read it carefully and keep it forfuture reference.

THE FUND

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INVESTMENT OBJECTIVES---------------------

Morgan Stanley Dean Witter Income Builder Fund seeks reasonableincome as a primary investment objective. As a secondary objective,the Fund seeks growth of capital.

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PRINCIPAL INVESTMENT STRATEGIES-------------------------------

The Fund will normally invest at least 65% of its assets inincome-producing equity securities, including common stock, preferredstock and convertible securities. The "Investment Manager," MorganStanley Dean Witter Advisors Inc., uses a value-oriented style in theselection of securities. Investments are normally made primarily in(i) common stocks (including depository receipts) of largecapitalization companies with a record of paying dividends and which,in the opinion of the Investment Manager, have the potential formaintaining dividends, (ii) preferred stock and (iii) securitiesconvertible into common stocks of small- and mid-cap companies --including synthetic and enhanced convertibles. The Fund's investmentsalso include "Rule 144A" securities, which are subject to resalerestrictions.

(sidebar)INCOME & GROWTHAn investment objective having the goal of selecting securities with thepotential to pay out income and rise in price.(end sidebar)

The Investment Manager follows a "bottom-up" approach in theselection of convertible securities for the Fund. Beginning with auniverse of about 500 companies, the Investment Manager narrows thefocus to small- and mid-cap companies and reviews the issues todetermine if the convertible security is trading with the underlyingequity security. The yield of the underlying equity security isevaluated and company fundamentals are studied to evaluate cash flow,risk/reward balance, valuation and the prospects for growth.

The Fund may invest up to 25% of its assets in "enhanced" convertiblesecurities. Enhanced convertible securities offer holders theopportunity to obtain higher current income than would be availablefrom a traditional equity security issued by the same company, inreturn for reduced participation or a cap on appreciation in theunderlying common stock of the issuer which the holder can realize.In addition, in many cases, enhanced convertible securities areconvertible into the underlying common stock of the issuerautomatically at maturity, unlike traditional convertible securitieswhich are convertible only at the option of the security holder.

The Fund may invest up to 10% of its assets in "synthetic"convertible securities. Unlike traditional convertible securitieswhose conversion values are based on the common stock of the issuerof the convertible security, "synthetic" convertible securities arepreferred stocks or debt obligations of an issuer which are combinedwith an equity component whose conversion value is based on the valueof the common stock of a different issuer or a particular benchmark(which may include a foreign issuer or basket of foreign stocks, or acompany whose stock is not yet publicly traded). In many cases,"synthetic" convertible securities are not convertible prior tomaturity, at which time the value of the security is paid in cash bythe issuer.

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In addition, the Fund may invest in fixed-income securities(including zero coupon securities), common stocks that do not pay aregular dividend, real estate investment trusts (commonly known as"REITs") and foreign securities (including depository receipts).

The Fund also may invest up to 20% of its net assets in fixed-incomesecurities rated lower than investment grade by Standard & Poor's orMoody's (but not below B) or, if unrated, of comparable quality asdetermined by the Investment Manager (commonly known as "junkbonds"). The 20% limitation is not applicable to convertiblesecurities.

Common stock is a share ownership or equity interest in acorporation. It may or may not pay dividends, as some companiesreinvest all of their profits back into their businesses, whileothers pay out some of their profits to shareholders as dividends.Preferred stock pays dividends at a specified rate and has preference



over common stock in the payment of dividends. A convertible securityis a bond, preferred stock or other security that may be convertedinto a prescribed amount of common stock at a prestated price. Adepository receipt is generally issued by a bank or financialinstitution and represents an ownership interest in the common stockor other equity securities of a foreign company.

In pursuing the Fund's investment objectives, the Investment Managerhas considerable leeway in deciding which investments it buys, holdsor sells on a day-to-day basis -- and which trading strategies ituses. For example, the Investment Manager in its discretion maydetermine to use some permitted trading strategies while not usingothers.

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PRINCIPAL RISKS---------------

There is no assurance that the Fund will achieve its investmentobjectives. The Fund's share price will fluctuate with changes in themarket value of its portfolio securities. When you sell Fund shares,they may be worth less than what you paid for them and, accordingly,you can lose money investing in this Fund.

Common and Preferred Stock. A principal risk of investing in the Fundis associated with its investment in stocks. In general, stock valuesfluctuate in response to activities specific to the issuer as well asgeneral market, economic and political conditions. Stock prices canfluctuate widely in response to these factors.

Fixed-Income Securities. Principal risks of investing in the Fund areassociated with its fixed-income investments (including zero couponsecurities). All fixed-income securities are subject to two types ofrisk: credit risk and interest rate risk. Credit risk refers to thepossibility that the issuer of a security will be unable to makeinterest payments and/or repay the principal on its debt.

Interest rate risk refers to fluctuations in the value of afixed-income security resulting from changes in the general level ofinterest rates. When the general level of interest rates goes up, theprices of most fixed-income securities go down. When the general

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level of interest rates goes down, the prices of most fixed-incomesecurities go up. Accordingly, a rise in the general level ofinterest rates may cause the price of the Fund's fixed-incomesecurities to fall substantially. (Zero coupon securities aretypically subject to greater price fluctuations than comparablesecurities that pay interest.)

Convertible Securities. The Fund is also subject to the risks ofinvesting in convertible securities. These securities may carry risksassociated with both common stock and fixed-income securities. Inaddition, because the convertible securities in which the Fundinvests are convertible into the common stocks of small- and mid-capcompanies, the Fund is subject to the specific risks associated withinvesting in small- and mid-cap companies.

There are also special risks associated with the Fund's investmentsin "enhanced" and "synthetic" convertible securities. Thesesecurities may be more volatile and less liquid than traditionalconvertible securities.

Small & Medium Capitalization Companies. The Fund's investments insmaller and -medium-sized companies carry more risk than investmentsin larger companies. While some of the Fund's holdings in thesecompanies may be listed on a national securities exchange, suchsecurities are more likely to be traded in the over-the-countermarket. The low market liquidity of these securities may have anadverse impact on the Fund's ability to sell certain securities atfavorable prices and may also make it difficult for the Fund toobtain market quotations based on actual trades for purposes ofvaluing the Fund's securities. Investing in lesser-known, smaller andmedium capitalization companies involves greater risk of volatilityof the Fund's net asset value than is customarily associated with



larger, more established companies. Often smaller and mediumcapitalization companies and the industries in which they are focusedare still evolving and, while this may offer better growth potentialthan larger, more established companies, it also may make them moresensitive to changing market conditions.

Junk Bonds. The Fund's investments in fixed-income securities ratedlower than investment grade, or if unrated, of comparable quality asdetermined by the Investment Manager (commonly known as "junk bonds")pose significant risks. The prices of junk bonds are likely to bemore sensitive to adverse economic changes or individual corporatedevelopments than higher rated securities. During an economicdownturn or substantial period of rising interest rates, junk bondissuers and, in particular, highly leveraged issuers may experiencefinancial stress that would adversely affect their ability to servicetheir principal and interest payment obligations, to meet theirprojected business goals or to obtain additional financing. In theevent of a default, the Fund may incur additional expenses to seekrecovery. The secondary market for junk bonds may be less liquid thanthe market for higher quality securities and, as such, may have anadverse effect on the market prices of certain securities. Many junkbonds are issued as Rule 144A securities. Rule 144A securities couldhave the effect of increasing the level of Fund illiquidity to theextent the Fund may be unable to find qualified

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institutional buyers interested in purchasing the securities. Theilliquidity of the market may also adversely affect the ability ofthe Fund's Trustees to arrive at a fair value for certain junk bondsat certain times and could make it difficult for the Fund to sellcertain securities. In addition, periods of economic uncertainty andchange probably would result in an increased volatility of marketprices of high yield securities and a corresponding volatility in theFund's net asset value.

Other Risks. The performance of the Fund also will depend on whetherthe Investment Manager is successful in pursuing the Fund'sinvestment strategy. The Fund is also subject to other risks from itspermissible investments, including the risks associated with itsinvestments in real estate investment trusts (commonly known as"REITs") and foreign securities (including depository receipts). Formore information about these risks, see the "Additional RiskInformation" section.

Shares of the Fund are not bank deposits and are not guaranteed orinsured by the FDIC or any other government agency.

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PAST PERFORMANCE----------------

The bar chart and table below provide some indication of the risks ofinvesting in the Fund. The Fund's past performance does not indicatehow the Fund will perform in the future.

(sidebar)ANNUAL TOTAL RETURNSThis chart shows how the performance of the Fund's Class B shares has variedfrom year to year over the past 3 calendar years.(end sidebar)

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ANNUAL TOTAL RETURNS -- CALENDAR YEARS

Year 1997 1998 1999Percentage 23.97% 1.73% 1.72%

The bar chart reflects the performance of Class B shares; theperformance of the other Classes will differ because the Classes havedifferent ongoing fees. The performance information in the bar chartdoes not reflect the deduction of sales charges; if these amounts werereflected, returns would be less than shown. Year-to-date total returnas of September 30, 2000 was -0.22%.

During the periods shown in the bar chart, the highest return for acalendar quarter was 9.88% (quarter ended September 30, 1997) and the



lowest return for a calendar quarter was -11.33% (quarter endedSeptember 30, 1998).

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(sidebar)AVERAGE ANNUAL TOTAL RETURNSThis table compares the Fund's average annual total returns with those of abroad measure of market performance over time. The Fund's returns include themaximum applicable sales charge for each Class and assume you sold your sharesat the end of each period.(end sidebar)

AVERAGE ANNUAL TOTAL RETURNS (AS OF DECEMBER 31, 1999)--------------------------------------------------------------------

LIFE OF THE FUNDPAST 1 YEAR (SINCE 6/26/96)

--------------------------------------------------------------------Class A(1) -2.95% ----------------------------------------------------------------------Class B -3.00% 9.98%--------------------------------------------------------------------Class C(1) 0.85% ----------------------------------------------------------------------Class D(1) 2.76% ----------------------------------------------------------------------S&P 500 Index(2) 21.04% 27.44%--------------------------------------------------------------------

(1) Classes A, C and D commenced operations on July 28, 1997.

(2) The Standard and Poor's 500 Index (S&P 500 (Registered Tracemark)) is abroad-based index, the performance of which is based on the performance of500 widely-held common stocks chosen for market size, liquidity and industrygroup representation. The Index does not include any expenses, fees orcharges. The Index is unmanaged and should not be considered an investment.

(sidebar)SHAREHOLDER FEESThese fees are paid directly from your investment.(end sidebar)

(sidebar)ANNUAL FUNDOPERATING EXPENSESThese expenses are deducted from the Fund's assets and are based on expensespaid for the fiscal year ended September 30, 2000.(end sidebar)

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FEES AND EXPENSES-----------------The table below briefly describes the fees and expenses that you may pay if youbuy and hold shares of the Fund. The Fund offers four Classes of shares: ClassesA, B, C and D. Each Class has a different combination of fees, expenses andother features. The Fund does not charge account or exchange fees. See the"Share Class Arrangements" section for further fee and expense information.

<TABLE><CAPTION>

CLASS A CLASS B CLASS C CLASS D------------------------------------------------------------------------------------------------<S> <C> <C> <C> <C>SHAREHOLDER FEES------------------------------------------------------------------------------------------------Maximum sales charge (load) imposed onpurchases (as a percentage of offering price) 5.25%(1) None None None------------------------------------------------------------------------------------------------Maximum deferred sales charge (load) (as apercentage based on the lesser of the offeringprice or net asset value at redemption) None(2) 5.00%(3) 1.00%(4) None------------------------------------------------------------------------------------------------ANNUAL FUND OPERATING EXPENSES------------------------------------------------------------------------------------------------Management fee 0.75% 0.75% 0.75% 0.75%------------------------------------------------------------------------------------------------



Distribution and service (12b-1) fees 0.24% 1.00% 0.99% None------------------------------------------------------------------------------------------------Other expenses 0.22% 0.22% 0.22% 0.22%------------------------------------------------------------------------------------------------Total annual Fund operating expenses 1.21% 1.97% 1.96% 0.97%------------------------------------------------------------------------------------------------</TABLE>

(1) Reduced for purchases of $25,000 and over.

(2) Investments that are not subject to any sales charge at the time of purchaseare subject to a contingent deferred sales charge ("CDSC") of 1.00% thatwill be imposed if you sell your shares within one year after purchase,except for certain specific circumstances.

(3) The CDSC is scaled down to 1.00% during the sixth year, reaching zerothereafter. See "Share Class Arrangements" for a complete discussion of theCDSC.

(4) Only applicable if you sell your shares within one year after purchase.

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EXAMPLE

This example is intended to help you compare the cost of investing inthe Fund with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the Fund, yourinvestment has a 5% return each year, and the Fund's operatingexpenses remain the same. Although your actual costs may be higher orlower, the tables below show your costs at the end of each periodbased on these assumptions depending upon whether or not you sell(redeem) your shares at the end of each period.

<TABLE><CAPTION>

IF YOU SOLD YOUR SHARES IF YOU HELD YOUR SHARES--------------------------------------------------- ---------------------------------------

1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS--------------------------------------------------- ---------------------------------------<S> <C> <C> <C> <C> <C> <C> <C> <C>

CLASS A $641 $888 $1,153 $1,909 $641 $888 $1,153 $1,909--------------------------------------------------- ---------------------------------------

CLASS B $700 $918 $1,262 $2,295 $200 $618 $1,062 $2,295--------------------------------------------------- ---------------------------------------

CLASS C $299 $616 $1,058 $2,286 $199 $616 $1,058 $2,286--------------------------------------------------- ---------------------------------------

CLASS D $ 99 $309 $ 536 $1,189 $ 99 $309 $ 536 $1,189--------------------------------------------------- ---------------------------------------</TABLE>

Long-term shareholders of Class B and Class C may pay more in salescharges, including distribution fees, than the economic equivalent ofthe maximum front-end sales charges permitted by the NASD.

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ADDITIONAL INVESTMENT STRATEGY INFORMATION------------------------------------------

This section provides additional information relating to the Fund'sprincipal investment strategies.

Other Securities and Real Estate Investment Trusts. Up to 35% of theFund's assets may be invested in U.S. government securities issued orguaranteed as to principal and interest by the U.S. government, itsagencies or instrumentalities and investment grade fixed-incomesecurities (including zero coupon securities), common stocks that donot pay a regular dividend and real estate investment trusts(commonly known as "REITs").

Zero coupon securities are purchased at a discount and either (i) payno interest, or (ii) accrue interest, but make no payment until



maturity.

Foreign Securities. The Fund may invest up to 25% of its assets inforeign securities (including depository receipts). This percentagelimitation, however, does not apply to securities of foreigncompanies that are listed in the U.S. on a national securitiesexchange.

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Defensive Investing. The Fund may take temporary "defensive"positions in attempting to respond to adverse market conditions. TheFund may invest any amount of its assets in cash or money marketinstruments in a defensive posture when the Investment Managerbelieves it is advisable to do so. Although taking a defensiveposture is designed to protect the Fund from an anticipated marketdownturn, it could have the effect of reducing the benefit from anyupswing in the market. When the Fund takes a defensive position, itmay not achieve its investment objectives.

The percentage limitations relating to the composition of the Fund'sportfolio apply at the time the Fund acquires an investment.Subsequent percentage changes that result from market fluctuationswill not require the Fund to sell any portfolio security. The Fundmay change its principal investment strategies without shareholderapproval; however, you would be notified of any changes.

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ADDITIONAL RISK INFORMATION---------------------------

This section provides additional information relating to theprincipal risks of investing in the Fund.

Real Estate Investment Trusts ("REITs"). REITs pool investors' fundsfor investments primarily in commercial real estate properties. Likemutual funds, REITs have expenses, including advisory andadministration fees that are paid by its shareholders. As a result,you will absorb duplicate levels of fees when the Fund invests inREITs. The performance of any Fund REIT holdings ultimately dependson the types of real property in which the REITs invest and how wellthe property is managed. A general downturn in real estate valuesalso can hurt REIT performance.

Foreign Securities. Foreign securities involve risks in addition tothe risks associated with domestic securities. One additional risk iscurrency risk. While the price of Fund shares is quoted in U.S.dollars, the Fund generally converts U.S. dollars to a foreignmarket's local currency to purchase a security in that market. If thevalue of that local currency falls relative to the U.S. dollar, theU.S. dollar value of the foreign security will decrease. This is trueeven if the foreign security's local price remains unchanged.

Foreign securities (including depository receipts) also have risksrelated to economic and political developments abroad, includingeffects of foreign social, economic or political instability. Foreigncompanies, in general, are not subject to the regulatory requirementsof U.S. companies and, as such, there may be less publicly availableinformation about these companies. Moreover, foreign accounting,auditing and financial reporting standards generally are differentfrom those applicable to U.S. companies. Finally, in the event of adefault of any foreign debt obligations, it may be more difficult forthe Fund to obtain or enforce a judgment against the issuers of thesecurities.

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Securities of foreign issuers may be less liquid than comparablesecurities of U.S. issuers and, as such, their price changes may bemore volatile. Furthermore, foreign exchanges and broker-dealers aregenerally subject to less government and exchange scrutiny andregulation than their U.S. counterparts. In addition, differences inclearance and settlement procedures in foreign markets may occasiondelays in settlements of the Fund's trades effected in those marketsand could result in losses to the Fund due to subsequent declines inthe value of the securities subject to the trades.

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FUND MANAGEMENT---------------

(sidebar)MORGAN STANLEY DEAN WITTER ADVISORS INC.The Investment Manager is widely recognized as a leader in the mutual fundindustry and together with Morgan Stanley Dean Witter Services Company Inc.,its wholly-owned subsidiary, had approximately $155 billion in assets undermanagement as of October 31, 2000.(end sidebar)

The Fund has retained the Investment Manager -- Morgan Stanley DeanWitter Advisors Inc. -- to provide administrative services, manage itsbusiness affairs and invest its assets, including the placing oforders for the purchase and sale of portfolio securities. TheInvestment Manager is a wholly-owned subsidiary of Morgan Stanley DeanWitter & Co., a preeminent global financial services firm thatmaintains leading market positions in each of its three primarybusinesses: securities, asset management and credit services. Its mainbusiness office is located at Two World Trade Center, New York, NY10048.

The Fund's portfolio is managed within the Investment Manager's Growthand Income Group. Paul D. Vance, Senior Vice President and Director ofthe Growth and Income Group of the Investment Manager, Peter M.Avelar, Senior Vice President and Director of the High Yield Group ofthe Investment Manager, and Catherine Maniscalco, a Vice President ofthe Investment Manager, have been the primary portfolio co-managers ofthe Fund since June 1996 (the Fund's inception), January 1998 and July1999, respectively, and each has been a portfolio manager with theInvestment Manager for over five years.

The Fund pays the Investment Manager a monthly management fee as fullcompensation for the services and facilities furnished to the Fund,and for Fund expenses assumed by the Investment Manager. The fee isbased on the Fund's average daily net assets. For the fiscal yearended September 30, 2000, the Fund accrued total compensation to theInvestment Manager amounting to 0.75% of the Fund's average daily netassets.

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SHAREHOLDER INFORMATION

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PRICING FUND SHARES-------------------

The price of Fund shares (excluding sales charges), called "net assetvalue," is based on the value of the Fund's portfolio securities.While the assets of each Class are invested in a single portfolio ofsecurities, the net asset value of each Class will differ because theClasses have different ongoing distribution fees.

The net asset value per share of the Fund is determined once daily at4:00 p.m. Eastern time on each day that the New York Stock Exchangeis open (or, on days when the New York Stock Exchange closes prior to4:00 p.m., at such earlier time). Shares will not be priced on daysthat the New York Stock Exchange is closed.



The value of the Fund's portfolio securities is based on thesecurities' market price when available. When a market price is notreadily available, including circumstances under which the InvestmentManager determines that a security's market price is not accurate, aportfolio security is valued at its fair value, as determined underprocedures established by the Fund's Board of Trustees. In thesecases, the Fund's net asset value will reflect certain portfoliosecurities' fair value rather than their market price. With respectto securities that are primarily listed on foreign exchanges, thevalue of the Fund's portfolio securities may change on days when youwill not be able to purchase or sell your shares.

An exception to the Fund's general policy of using market pricesconcerns its short-term debt portfolio securities. Debt securitieswith remaining maturities of sixty days or less at the time ofpurchase may be valued at amortized cost. However, if the cost doesnot reflect the securities' market value, these securities will bevalued at their fair value.

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HOW TO BUY SHARES-----------------

(sidebar)CONTACTING A FINANCIAL ADVISORIf you are new to the Morgan Stanley Dean Witter Family of Funds and would liketo contact a Financial Advisor, call (877) 937-MSDW (toll-free) for thetelephone number of the Morgan Stanley Dean Witter office nearest you. You mayalso access our office locator on our Internet site at:www.msdwadvice.com/funds(end sidebar)

You may open a new account to buy Fund shares or buy additional Fundshares for an existing account by contacting your Morgan Stanley DeanWitter Financial Advisor. Your Financial Advisor or other authorizedfinancial representative will assist you, step-by-step, with theprocedures to invest in the Fund. You may also purchase sharesdirectly by calling the Fund's transfer agent and requesting anapplication.

Because every investor has different immediate financial needs andlong-term investment goals, the Fund offers investors four Classes ofshares: Classes A, B, C and D. Class D shares are only offered to alimited group of investors. Each Class of shares offers a distinctstructure of sales charges, distribution and service fees, and otherfeatures that are designed to address a variety of needs. Your

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Financial Advisor or other authorized financial representative canhelp you decide which Class may be most appropriate for you. Whenpurchasing Fund shares, you must specify which Class of shares youwish to purchase.

When you buy Fund shares, the shares are purchased at the next shareprice calculated (less any applicable front-end sales charge forClass A shares) after we receive your purchase order. Your payment isdue on the third business day after you place your purchase order. Wereserve the right to reject any order for the purchase of Fundshares.

(sidebar)EASYINVEST(SM)A purchase plan that allows you to transfer money automatically from yourchecking or savings account or from a Money Market Fund on a semi-monthly,monthly or quarterly basis. Contact your Morgan Stanley Dean Witter FinancialAdvisor for further information about this service.(end sidebar)

MINIMUM INVESTMENT AMOUNTS--------------------------------------------------------------------------------

MINIMUM INVESTMENT--------------------------

INVESTMENT OPTIONS INITIAL ADDITIONAL--------------------------------------------------------------------------------



Regular Accounts $1,000 $100--------------------------------------------------------------------------------

Individual Retirement Accounts: Regular IRAs $1,000 $100Education IRAs $ 500 $100

--------------------------------------------------------------------------------EasyInvest(SM)(Automatically from yourchecking or savings accountor Money Market Fund) $ 100* $ 100*

--------------------------------------------------------------------------------

* Provided your schedule of investments totals $1,000 in twelve months.

There is no minimum investment amount if you purchase Fund sharesthrough: (1) the Investment Manager's mutual fund asset allocationplan, (2) a program, approved by the Fund's distributor, in which youpay an asset-based fee for advisory, administrative and/or brokerageservices, (3) the following programs approved by the Fund'sdistributor; (i) qualified state tuition plans described in Section529 of the Internal Revenue Code and (ii) certain other investmentprograms that do not charge an asset-based fee, or (4)employer-sponsored employee benefit plan accounts.

Investment Options for Certain Institutional and OtherInvestors/Class D Shares. To be eligible to purchase Class D shares,you must qualify under one of the investor categories specified inthe "Share Class Arrangements" section of this Prospectus.

Subsequent Investments Sent Directly to the Fund. In addition tobuying additional Fund shares for an existing account by contactingyour Morgan Stanley Dean Witter Financial Advisor, you may send acheck directly to the Fund. To buy additional shares in this manner:

o Write a "letter of instruction" to the Fund specifying thename(s) on the account, the account number, the social security ortax identification number, the Class of shares you wish to purchaseand the investment amount (which would include any applicablefront-end sales charge). The letter must be signed by the accountowner(s).

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o Make out a check for the total amount payable to: Morgan StanleyDean Witter Income Builder Fund.

o Mail the letter and check to Morgan Stanley Dean Witter Trust FSBat P.O. Box 1040, Jersey City, NJ 07303.

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HOW TO EXCHANGE SHARES----------------------

Permissible Fund Exchanges. You may exchange shares of any Class ofthe Fund for the same Class of any other continuously offeredMulti-Class Fund, or for shares of a No-Load Fund, a Money MarketFund, North American Government Income Trust or Short-Term U.S.Treasury Trust, without the imposition of an exchange fee. Inaddition, Class A shares of the Fund may be exchanged for shares ofan FSC Fund (funds subject to a front-end sales charge). See theinside back cover of this Prospectus for each Morgan Stanley DeanWitter Fund's designation as a Multi-Class Fund, No-Load Fund, MoneyMarket Fund or FSC Fund. If a Morgan Stanley Dean Witter Fund is notlisted, consult the inside back cover of that fund's prospectus forits designation.

Exchanges may be made after shares of the fund acquired by purchasehave been held for thirty days. There is no waiting period forexchanges of shares acquired by exchange or dividend reinvestment.The current prospectus for each fund describes its investmentobjective(s), policies and investment minimums, and should be readbefore investment. Since exchanges are available only intocontinuously offered Morgan Stanley Dean Witter Funds, exchanges arenot available into any new Morgan Stanley Dean Witter Fund during itsinitial offering period, or when shares of a particular MorganStanley Dean Witter Fund are not being offered for purchase.



Exchange Procedures. You can process an exchange by contacting yourMorgan Stanley Dean Witter Financial Advisor or other authorizedfinancial representative. Otherwise, you must forward an exchangeprivilege authorization form to the Fund's transfer agent -- MorganStanley Dean Witter Trust FSB -- and then write the transfer agent orcall (800) 869-NEWS to place an exchange order. You can obtain anexchange privilege authorization form by contacting your FinancialAdvisor or other authorized financial representative, or by calling(800) 869-NEWS. If you hold share certificates, no exchanges may beprocessed until we have received all applicable share certificates.

An exchange to any Morgan Stanley Dean Witter Fund (except a MoneyMarket Fund) is made on the basis of the next calculated net assetvalues of the funds involved after the exchange instructions areaccepted. When exchanging into a Money Market Fund, the Fund's sharesare sold at their next calculated net asset value and the MoneyMarket Fund's shares are purchased at their net asset value on thefollowing business day.

11

The Fund may terminate or revise the exchange privilege upon requirednotice. The check writing privilege is not available for Money MarketFund shares you acquire in an exchange.

Telephone Exchanges. For your protection when calling Morgan StanleyDean Witter Trust FSB, we will employ reasonable procedures toconfirm that exchange instructions communicated over the telephoneare genuine. These procedures may include requiring various forms ofpersonal identification such as name, mailing address, socialsecurity or other tax identification number. Telephone instructionsalso may be recorded.

Telephone instructions will be accepted if received by the Fund'stransfer agent between 9:00 a.m. and 4:00 p.m. Eastern time on anyday the New York Stock Exchange is open for business. During periodsof drastic economic or market changes, it is possible that thetelephone exchange procedures may be difficult to implement, althoughthis has not been the case with the Fund in the past.

Margin Accounts. If you have pledged your Fund shares in a marginaccount, contact your Morgan Stanley Dean Witter Financial Advisor orother authorized financial representative regarding restrictions onthe exchange of such shares.

Tax Considerations of Exchanges. If you exchange shares of the Fundfor shares of another Morgan Stanley Dean Witter Fund there areimportant tax considerations. For tax purposes, the exchange out ofthe Fund is considered a sale of Fund shares -- and the exchange intothe other fund is considered a purchase. As a result, you may realizea capital gain or loss.

You should review the "Tax Consequences" section and consult your owntax professional about the tax consequences of an exchange.

Limitations on Exchanges. Certain patterns of past exchanges and/orpurchase or sale transactions involving the Fund or other MorganStanley Dean Witter Funds may result in the Fund limiting orprohibiting, at its discretion, additional purchases and/orexchanges. Determinations in this regard may be made based on thefrequency or dollar amount of previous exchanges or purchase or saletransactions. You will be notified in advance of limitations on yourexchange privileges.

CDSC Calculations on Exchanges. See the "Share Class Arrangements"section of this Prospectus for a further discussion of how applicablecontingent deferred sales charges (CDSCs) are calculated for sharesof one Morgan Stanley Dean Witter Fund that are exchanged for sharesof another.

For further information regarding exchange privileges, you shouldcontact your Morgan Stanley Dean Witter Financial Advisor or call(800) 869-NEWS.



12

[GRAPHIC OMITTED]

HOW TO SELL SHARES------------------

You can sell some or all of your Fund shares at any time. If you sellClass A, Class B or Class C shares, your net sale proceeds arereduced by the amount of any applicable CDSC. Your shares will besold at the next price calculated after we receive your order to sellas described below.

<TABLE><CAPTION>OPTIONS PROCEDURES---------------------------------------------------------------------------------------------------------------------<S> <C>

Contact Your To sell your shares, simply call your Morgan Stanley Dean Witter Financial Advisor or otherFinancial Advisor authorized financial representative.

-----------------------------------------------------------------------------------------------[GRAPHIC OMITTED] Payment will be sent to the address to which the account is registered or deposited in your

brokerage account.---------------------------------------------------------------------------------------------------------------------

By Letter You can also sell your shares by writing a "letter of instruction" that includes:[GRAPHIC OMITTED] o your account number;

o the dollar amount or the number of shares you wish to sell;o the Class of shares you wish to sell; ando the signature of each owner as it appears on the account.-----------------------------------------------------------------------------------------------If you are requesting payment to anyone other than the registered owner(s) or that paymentbe sent to any address other than the address of the registered owner(s) or pre-designatedbank account, you will need a signature guarantee. You can obtain a signature guarantee froman eligible guarantor acceptable to Morgan Stanley Dean Witter Trust FSB. (You shouldcontact Morgan Stanley Dean Witter Trust FSB at (800) 869-NEWS for a determination as towhether a particular institution is an eligible guarantor.) A notary public cannot provide asignature guarantee. Additional documentation may be required for shares held by acorporation, partnership, trustee or executor.-----------------------------------------------------------------------------------------------Mail the letter to Morgan Stanley Dean Witter Trust FSB at P.O. Box 983, Jersey City, NJ07303. If you hold share certificates, you must return the certificates, along with the letterand any required additional documentation.-----------------------------------------------------------------------------------------------A check will be mailed to the name(s) and address in which the account is registered, orotherwise according to your instructions.

---------------------------------------------------------------------------------------------------------------------Systematic If your investment in all of the Morgan Stanley Dean Witter Family of Funds has a totalWithdrawal Plan market value of at least $10,000, you may elect to withdraw amounts of $25 or more, or in[GRAPHIC OMITTED] any whole percentage of a fund's balance (provided the amount is at least $25), on a monthly,

quarterly, semi-annual or annual basis, from any fund with a balance of at least $1,000. Eachtime you add a fund to the plan, you must meet the plan requirements.-----------------------------------------------------------------------------------------------Amounts withdrawn are subject to any applicable CDSC. A CDSC may be waived undercertain circumstances. See the Class B waiver categories listed in the "Share ClassArrangements" section of this Prospectus.-----------------------------------------------------------------------------------------------To sign up for the Systematic Withdrawal Plan, contact your Morgan Stanley Dean WitterFinancial Advisor or call (800) 869-NEWS. You may terminate or suspend your plan at anytime. Please remember that withdrawals from the plan are sales of shares, not Fund"distributions," and ultimately may exhaust your account balance. The Fund may terminate orrevise the plan at any time.

---------------------------------------------------------------------------------------------------------------------</TABLE>

13

Payment for Sold Shares. After we receive your complete instructionsto sell as described above, a check will be mailed to you within sevendays, although we will attempt to make payment within one businessday. Payment may also be sent to your brokerage account.

Payment may be postponed or the right to sell your shares suspendedunder unusual circumstances. If you request to sell shares that wererecently purchased by check, your sale will not be effected until ithas been verified that the check has been honored.



Tax Considerations. Normally, your sale of Fund shares is subject tofederal and state income tax. You should review the "TaxConsequences" section of this Prospectus and consult your own taxprofessional about the tax consequences of a sale.

Reinstatement Privilege. If you sell Fund shares and have notpreviously exercised the reinstatement privilege, you may, within 35days after the date of sale, invest any portion of the proceeds inthe same Class of Fund shares at their net asset value and receive apro rata credit for any CDSC paid in connection with the sale.

Involuntary Sales. The Fund reserves the right, on sixty days'notice, to sell the shares of any shareholder (other than shares heldin an IRA or 403(b) Custodial Account) whose shares, due to sales bythe shareholder, have a value below $100, or in the case of anaccount opened through EasyInvestSM, if after 12 months theshareholder has invested less than $1,000 in the account.

However, before the Fund sells your shares in this manner, we willnotify you and allow you sixty days to make an additional investmentin an amount that will increase the value of your account to at leastthe required amount before the sale is processed. No CDSC will beimposed on any involuntary sale.

Margin Accounts. If you have pledged your Fund shares in a marginaccount, contact your Morgan Stanley Dean Witter Financial Advisor orother authorized financial representative regarding restrictions onthe sale of such shares.

14

[GRAPHIC OMITTED]

DISTRIBUTIONS-------------

The Fund passes substantially all of its earnings from income andcapital gains along to its investors as "distributions." The Fundearns interest from fixed-income investments and income from stocks.These amounts are passed along to Fund shareholders as "incomedividend distributions." The Fund realizes capital gains whenever itsells securities for a higher price than it paid for them. Theseamounts may be passed along as "capital gain distributions."

(sidebar)TARGETED DIVIDENDSSMYou may select to have your Fund distributions automatically invested in otherClasses of Fund shares or Classes of another Morgan Stanley Dean Witter Fundthat you own. Contact your Morgan Stanley Dean Witter Financial Advisor forfurther information about this service.(end sidebar)

The Fund declares income dividends separately for each Class.Distributions paid on Class A and Class D shares usually will behigher than for Class B and Class C because distribution fees thatClass B and Class C pay are higher. Normally, income dividends aredistributed to shareholders quarterly. Capital gains, if any, areusually distributed in December. The Fund, however, may retain andreinvest any long-term capital gains. The Fund may at times makepayments from sources other than income or capital gains thatrepresent a return of a portion of your investment.

Distributions are reinvested automatically in additional shares of thesame Class and automatically credited to your account, unless yourequest in writing that all distributions be paid in cash. If youelect the cash option, the Fund will mail a check to you no later thanseven business days after the distribution is declared. However, ifyou purchase Fund shares through a Financial Advisor within threebusiness days prior to the record date for the distribution, thedistribution will automatically be paid to you in cash, even if youdid not request to receive all distributions in cash. No interest willaccrue on uncashed checks. If you wish to change how yourdistributions are paid, your request should be received by the Fund'stransfer agent, Morgan Stanley Dean Witter Trust FSB, at least fivebusiness days prior to the record date of the distributions.

[GRAPHIC OMITTED]



TAX CONSEQUENCES----------------

As with any investment, you should consider how your Fund investmentwill be taxed. The tax information in this Prospectus is provided asgeneral information. You should consult your own tax professionalabout the tax consequences of an investment in the Fund.

Unless your investment in the Fund is through a tax-deferredretirement account, such as a 401(k) plan or IRA, you need to beaware of the possible tax consequences when:

o The Fund makes distributions; and

o You sell Fund shares, including an exchange to another MorganStanley Dean Witter Fund.

15

Taxes on Distributions. Your distributions are normally subject tofederal and state income tax when they are paid, whether you takethem in cash or reinvest them in Fund shares. A distribution also maybe subject to local income tax. Any income dividend distributions andany short-term capital gain distributions are taxable to you asordinary income. Any long-term capital gain distributions are taxableas long-term capital gains no matter how long you have owned sharesin the Fund.

Every January, you will be sent a statement (IRS Form 1099-DIV)showing the taxable distributions paid to you in the previous year.The statement provides information on your dividends and capitalgains for tax purposes.

Taxes on Sales. Your sale of Fund shares normally is subject tofederal and state income tax and may result in a taxable gain or lossto you. A sale also may be subject to local income tax. Your exchangeof Fund shares for shares of another Morgan Stanley Dean Witter Fundis treated for tax purposes like a sale of your original shares and apurchase of your new shares. Thus, the exchange may, like a sale,result in a taxable gain or loss to you and will give you a new taxbasis for your new shares.

When you open your Fund account, you should provide your socialsecurity or tax identification number on your investment application.By providing this information, you will avoid being subject to afederal backup withholding tax of 31% on taxable distributions andredemption proceeds. Any withheld amount would be sent to the IRS asan advance tax payment.

[GRAPHIC OMITTED]

SHARE CLASS ARRANGEMENTS------------------------

The Fund offers several Classes of shares having differentdistribution arrangements designed to provide you with differentpurchase options according to your investment needs. Your MorganStanley Dean Witter Financial Advisor or other authorized financialrepresentative can help you decide which Class may be appropriate foryou.

The general public is offered three Classes: Class A shares, Class Bshares and Class C shares, which differ principally in terms of salescharges and ongoing expenses. A fourth Class, Class D shares, isoffered only to a limited category of investors. Shares that youacquire through reinvested distributions will not be subject to anyfront-end sales charge or CDSC -- contingent deferred sales charge.Sales personnel may receive different compensation for selling eachClass of shares. The sales charges applicable to each Class providefor the distribution financing of shares of that Class.

16



The chart below compares the sales charge and annual 12b-1 feeapplicable to each Class:

<TABLE><CAPTION>

MAXIMUMCLASS SALES CHARGE ANNUAL 12B-1FEE---------------------------------------------------------------------------------------------------------------<S> <C> <C>

A Maximum 5.25% initial sales charge reduced for purchase of $25,000 or more;shares sold without an initial sales charge are generally subject to a 1.0% CDSCduring the first year 0.25%

---------------------------------------------------------------------------------------------------------------B Maximum 5.0% CDSC during the first year decreasing to 0% after six years 1.00%

---------------------------------------------------------------------------------------------------------------C 1.0% CDSC during the first year 1.00%

---------------------------------------------------------------------------------------------------------------D None None

---------------------------------------------------------------------------------------------------------------</TABLE>

CLASS A SHARES Class A shares are sold at net asset value plus aninitial sales charge of up to 5.25%. The initial sales charge isreduced for purchases of $25,000 or more according to the schedulebelow. Investments of $1 million or more are not subject to an initialsales charge, but are generally subject to a contingent deferred salescharge, or CDSC, of 1.0% on sales made within one year after the lastday of the month of purchase. The CDSC will be assessed in the samemanner and with the same CDSC waivers as with Class B shares. Class Ashares are also subject to a distribution (12b-1) fee of up to 0.25%of the average daily net assets of the Class.

The offering price of Class A shares includes a sales charge(expressed as a percentage of the offering price) on a singletransaction as shown in the following table:

(sidebar)FRONT-END SALES CHARGE OR FSCAn initial sales charge you pay when purchasing Class A shares that is based ona percentage of the offering price. The percentage declines based upon thedollar value of Class A shares you purchase. We offer three ways to reduce yourClass A sales charges -- the Combined Purchase Privilege, Right of Accumulationand Letter of Intent.(end sidebar)

<TABLE><CAPTION>

FRONT-END SALES CHARGE-----------------------------------------------

AMOUNT OF PERCENTAGE OF PUBLIC APPROXIMATE PERCENTAGESINGLE TRANSACTION OFFERING PRICE OF NET AMOUNT INVESTED-------------------------------------------------------------------------------------------<S> <C> <C>

Less than $25,000 5.25% 5.54%-------------------------------------------------------------------------------------------

$25,000 but less than $50,000 4.75% 4.99%-------------------------------------------------------------------------------------------

$50,000 but less than $100,000 4.00% 4.17%-------------------------------------------------------------------------------------------

$100,000 but less than $250,000 3.00% 3.09%-------------------------------------------------------------------------------------------

$250,000 but less than $1 million 2.00% 2.04%-------------------------------------------------------------------------------------------

$1 million and over 0 0-------------------------------------------------------------------------------------------</TABLE>

17

The reduced sales charge schedule is applicable to purchases of ClassA shares in a single transaction by:

o A single account (including an individual, trust or fiduciaryaccount).

o Family member accounts (limited to husband, wife and childrenunder the age of 21).



o Pension, profit sharing or other employee benefit plans ofcompanies and their affiliates.

o Tax-exempt organizations.

o Groups organized for a purpose other than to buy mutual fundshares.

Combined Purchase Privilege. You also will have the benefit ofreduced sales charges by combining purchases of Class A shares of theFund in a single transaction with purchases of Class A shares ofother Multi-Class Funds and shares of FSC Funds.

Right of Accumulation. You also may benefit from a reduction of salescharges if the cumulative net asset value of Class A shares of theFund purchased in a single transaction, together with shares of otherfunds you currently own which were previously purchased at a priceincluding a front-end sales charge (including shares acquired throughreinvestment of distributions), amounts to $25,000 or more. Also, ifyou have a cumulative net asset value of all your Class A and Class Dshares equal to at least $5 million (or $25 million for certainemployee benefit plans), you are eligible to purchase Class D sharesof any fund subject to the Fund's minimum initial investmentrequirement.

You must notify your Morgan Stanley Dean Witter Financial Advisor orother authorized financial representative (or Morgan Stanley DeanWitter Trust FSB if you purchase directly through the Fund), at thetime a purchase order is placed, that the purchase qualifies for thereduced sales charge under the Right of Accumulation. Similarnotification must be made in writing when an order is placed by mail.The reduced sales charge will not be granted if: (i) notification isnot furnished at the time of the order; or (ii) a review of therecords of Dean Witter Reynolds or other authorized dealer of Fundshares or the Fund's transfer agent does not confirm your representedholdings.

Letter of Intent. The schedule of reduced sales charges for largerpurchases also will be available to you if you enter into a written"letter of intent." A letter of intent provides for the purchase ofClass A shares of the Fund or other Multi-Class Funds or shares ofFSC Funds within a thirteen-month period. The initial purchase undera letter of intent must be at least 5% of the stated investment goal.To determine the applicable sales charge reduction, you may alsoinclude: (1) the cost of shares of other Morgan Stanley Dean WitterFunds which were previously purchased at a price including afront-end sales charge during the 90-day period prior to thedistributor receiving the letter of intent, and (2) the cost ofshares of other funds you currently own acquired in exchange forshares of funds purchased during that period at a price including afront-end sales

18

charge. You can obtain a letter of intent by contacting your MorganStanley Dean Witter Financial Advisor or other authorized financialrepresentative, or by calling (800) 869-NEWS. If you do not achievethe stated investment goal within the thirteen-month period, you arerequired to pay the difference between the sales charges otherwiseapplicable and sales charges actually paid, which may be deductedfrom your investment.

Other Sales Charge Waivers. In addition to investments of $1 millionor more, your purchase of Class A shares is not subject to afront-end sales charge (or a CDSC upon sale) if your accountqualifies under one of the following categories:

o A trust for which Morgan Stanley Dean Witter Trust FSB providesdiscretionary trustee services.

o Persons participating in a fee-based investment program (subjectto all of its terms and conditions, including termination fees,mandatory sale or transfer restrictions on termination) approved bythe Fund's distributor pursuant to which they pay an asset-basedfee for investment advisory, administrative and/or brokerageservices.

o Qualified state tuition plans described in Section 529 of theInternal Revenue Code (subject to all applicable terms and



conditions) and certain other investment programs that do notcharge an asset-based fee and have been approved by the Fund'sdistributor.

o Employer-sponsored employee benefit plans, whether or notqualified under the Internal Revenue Code, for which Morgan StanleyDean Witter Trust FSB serves as trustee or Morgan Stanley DeanWitter's Retirement Plan Services serves as recordkeeper under awritten Recordkeeping Services Agreement ("MSDW Eligible Plans")which have at least 200 eligible employees.

o An MSDW Eligible Plan whose Class B shares have converted toClass A shares, regardless of the plan's asset size or number ofeligible employees.

o A client of a Morgan Stanley Dean Witter Financial Advisor whojoined us from another investment firm within six months prior tothe date of purchase of Fund shares, and you used the proceeds fromthe sale of shares of a proprietary mutual fund of that FinancialAdvisor's previous firm that imposed either a front-end or deferredsales charge to purchase Class A shares, provided that: (1) yousold the shares not more than 60 days prior to the purchase of fundshares, and (2) the sale proceeds were maintained in the interim incash or a money market fund.

o Current or retired Directors/Trustees of the Morgan Stanley DeanWitter Funds, such persons' spouses and children under the age of21, and trust accounts for which any of such persons is abeneficiary.

19

o Current or retired directors, officers and employees of MorganStanley Dean Witter & Co. and any of its subsidiaries, suchpersons' spouses and children under the age of 21, and trustaccounts for which any of such persons is a beneficiary.

CLASS B SHARES Class B shares are offered at net asset value withno initial sales charge but are subject to a contingent deferred salescharge, or CDSC, as set forth in the table below. For the purpose ofcalculating the CDSC, shares are deemed to have been purchased on thelast day of the month during which they were purchased.

(sidebar)CONTINGENT DEFERREDSALES CHARGE OR CDSCA fee you pay when you sell shares of certain Morgan Stanley Dean Witter Fundspurchased without an initial sales charge. This fee declines the longer you holdyour shares as set forth in the table.(end sidebar)

CDSC AS A PERCENTAGEYEAR SINCE PURCHASE PAYMENT MADE OF AMOUNT REDEEMED

----------------------------------------------------------------------First 5.0%

----------------------------------------------------------------------Second 4.0%

----------------------------------------------------------------------Third 3.0%

----------------------------------------------------------------------Fourth 2.0%

----------------------------------------------------------------------Fifth 2.0%

----------------------------------------------------------------------Sixth 1.0%

----------------------------------------------------------------------Seventh and thereafter None

----------------------------------------------------------------------

Each time you place an order to sell or exchange shares, shares withno CDSC will be sold or exchanged first, then shares with the lowestCDSC will be sold or exchanged next. For any shares subject to aCDSC, the CDSC will be assessed on an amount equal to the lesser ofthe current market value or the cost of the shares being sold.

CDSC Waivers. A CDSC, if otherwise applicable, will be waived in thecase of:



o Sales of shares held at the time you die or become disabled(within the definition in Section 72(m)(7) of the Internal RevenueCode which relates to the ability to engage in gainful employment),if the shares are: (i) registered either in your name (not a trust)or in the names of you and your spouse as joint tenants with rightof survivorship; or (ii) held in a qualified corporate orself-employed retirement plan, IRA or 403(b) Custodial Account,provided in either case that the sale is requested within one yearof your death or initial determination of disability.

o Sales in connection with the following retirement plan"distributions:" (i) lump-sum or other distributions from aqualified corporate or self-employed retirement plan followingretirement (or, in the case of a "key employee" of a "top heavy"plan, following attainment of age 59 1/2); (ii) distributions froman IRA or 403(b) Custodial Account following attainment of age59 1/2; or (iii) a tax-free return

20

of an excess IRA contribution (a "distribution" does not include adirect transfer of IRA, 403(b) Custodial Account or retirement planassets to a successor custodian or trustee).

o Sales of shares held for you as a participant in an MSDW EligiblePlan.

o Sales of shares in connection with the Systematic Withdrawal Planof up to 12% annually of the value of each fund from which plansales are made. The percentage is determined on the date youestablish the Systematic Withdrawal Plan and based on the nextcalculated share price. You may have this CDSC waiver applied inamounts up to 1% per month, 3% per quarter, 6% semi-annually or 12%annually. Shares with no CDSC will be sold first, followed by thosewith the lowest CDSC. As such, the waiver benefit will be reducedby the amount of your shares that are not subject to a CDSC. If yoususpend your participation in the plan, you may later resume planpayments without requiring a new determination of the account valuefor the 12% CDSC waiver.

o Sales of shares if you simultaneously invest the proceeds in theInvestment Manager's mutual fund asset allocation program, pursuantto which investors pay an asset-based fee. Any shares you acquirein connection with the Investment Manager's mutual fund assetallocation program are subject to all of the terms and conditionsof that program, including termination fees, mandatory sale ortransfer restrictions on termination.

All waivers will be granted only following the Fund's distributorreceiving confirmation of your entitlement. If you believe you areeligible for a CDSC waiver, please contact your Financial Advisor orcall (800) 869-NEWS.

Distribution Fee. Class B shares are also subject to an annual 12b-1fee of 1.0% of the lesser of: (a) the average daily aggregate grosspurchases by all shareholders of the Fund's Class B shares since theinception of the Fund (not including reinvestments of dividends orcapital gains distributions), less the average daily aggregate netasset value of the Fund's Class B shares sold by all shareholderssince the Fund's inception upon which a CDSC has been imposed orwaived, or (b) the average daily net assets of Class B.

Conversion Feature. After ten (10) years, Class B shares will convertautomatically to Class A shares of the Fund with no initial salescharge. The ten year period runs from the last day of the month inwhich the shares were purchased or, in the case of Class B sharesacquired through an exchange, from the last day of the month in whichthe original Class B shares were purchased; the shares will convertto Class A shares based on their relative net asset values in themonth following the ten year period. At the same time, an equalproportion of Class B shares acquired through automaticallyreinvested distributions will convert to Class A shares on the samebasis. (Class B shares held before May 1, 1997, however, will convertto Class A shares in May 2007.)



21

In the case of Class B shares held in an MSDW Eligible Plan, the planis treated as a single investor and all Class B shares will convertto Class A shares on the conversion date of the Class B shares of aMorgan Stanley Dean Witter Fund purchased by that plan.

Currently, the Class B share conversion is not a taxable event; theconversion feature may be cancelled if it is deemed a taxable eventin the future by the Internal Revenue Service.

If you exchange your Class B shares for shares of a Money MarketFund, a No-Load Fund, North American Government Income Trust orShort-Term U.S. Treasury Trust, the holding period for conversion isfrozen as of the last day of the month of the exchange and resumes onthe last day of the month you exchange back into Class B shares.

Exchanging Shares Subject to a CDSC. There are special considerationswhen you exchange Fund shares that are subject to a CDSC. Whendetermining the length of time you held the shares and thecorresponding CDSC rate, any period (starting at the end of themonth) during which you held shares of a fund that does not charge aCDSC will not be counted. Thus, in effect the "holding period" forpurposes of calculating the CDSC is frozen upon exchanging into afund that does not charge a CDSC.

For example, if you held Class B shares of the Fund for one year,exchanged to Class B of another Morgan Stanley Dean WitterMulti-Class Fund for another year, then sold your shares, a CDSC rateof 4% would be imposed on the shares based on a two year holdingperiod -- one year for each fund. However, if you had exchanged theshares of the Fund for a Money Market Fund (which does not charge aCDSC) instead of the Multi-Class Fund, then sold your shares, a CDSCrate of 5% would be imposed on the shares based on a one year holdingperiod. The one year in the Money Market Fund would not be counted.Nevertheless, if shares subject to a CDSC are exchanged for a Fundthat does not charge a CDSC, you will receive a credit when you sellthe shares equal to the distribution (12b-1) fees, if any, you paidon those shares while in that fund up to the amount of any applicableCDSC.

In addition, shares that are exchanged into or from a Morgan StanleyDean Witter Fund subject to a higher CDSC rate will be subject to thehigher rate, even if the shares are re-exchanged into a fund with alower CDSC rate.

CLASS C SHARES Class C shares are sold at net asset value with noinitial sales charge but are subject to a CDSC of 1.0% on sales madewithin one year after the last day of the month of purchase. The CDSCwill be assessed in the same manner and with the same CDSC waivers aswith Class B shares.

22

Distribution Fee. Class C shares are subject to an annualdistribution (12b-1) fee of up to 1.0% of the average daily netassets of that Class. The Class C shares' distribution fee may causethat Class to have higher expenses and pay lower dividends than ClassA or Class D shares. Unlike Class B shares, Class C shares have noconversion feature and, accordingly, an investor that purchases ClassC shares may be subject to distribution (12b-1) fees applicable toClass C shares for an indefinite period.

CLASS D SHARES Class D shares are offered without any sales charge onpurchases or sales and without any distribution (12b-1) fee. Class Dshares are offered only to investors meeting an initial investmentminimum of $5 million ($25 million for certain MSDW Eligible Plans)and the following investor categories:

o Investors participating in the Investment Manager's mutual fundasset allocation program (subject to all of its terms andconditions, including termination fees, mandatory sale or transferrestrictions on termination) pursuant to which they pay anasset-based fee.



o Persons participating in a fee-based investment program (subjectto all of its terms and conditions, including termination fees,mandatory sale or transfer restrictions on termination) approved bythe Fund's distributor pursuant to which they pay an asset-basedfee for investment advisory, administrative and/or brokerageservices.

o Certain investment programs that do not charge an asset-based feeand have been approved by the Fund's distributor. However, Class Dshares are not offered for investments made through Section 529plans (regardless of the size of the investment).

o Employee benefit plans maintained by Morgan Stanley Dean Witter &Co. or any of its subsidiaries for the benefit of certain employeesof Morgan Stanley Dean Witter & Co. and its subsidiaries.

o Certain unit investment trusts sponsored by Dean Witter Reynolds.

o Certain other open-end investment companies whose shares aredistributed by the Fund's distributor.

o Investors who were shareholders of the Dean Witter RetirementSeries on September 11, 1998 for additional purchases for theirformer Dean Witter Retirement Series accounts.

Meeting Class D Eligibility Minimums. To meet the $5 million ($25million for MSDW Eligible Plans) initial investment to qualify topurchase Class D shares, you may combine: (1) purchases in a singletransaction of Class D shares of the Fund and other Morgan StanleyDean Witter Multi-Class Funds; and/or (2) previous purchases of ClassA and Class D shares of Multi-Class Funds and shares of FSC Funds youcurrently own, along with shares of Morgan Stanley Dean Witter Fundsyou currently own that you acquired in exchange for those shares.

23

NO SALES CHARGES FOR REINVESTED CASH DISTRIBUTIONS If you receive acash payment representing an income dividend or capital gain and youreinvest that amount in the applicable Class of shares by returningthe check within 30 days of the payment date, the purchased shareswould not be subject to an initial sales charge or CDSC.

PLAN OF DISTRIBUTION (RULE 12B-1 FEES) The Fund has adopted a Plan ofDistribution in accordance with Rule 12b-1 under the InvestmentCompany Act of 1940 with respect to the distribution of Class A, ClassB and Class C shares. The Plan allows the Fund to pay distributionfees for the sale and distribution of these shares. It also allows theFund to pay for services to shareholders of Class A, Class B and ClassC shares. Because these fees are paid out of the Fund's assets on anongoing basis, over time these fees will increase the cost of yourinvestment in these Classes and may cost you more than paying othertypes of sales charges.

24

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the Fund'sfinancial performance for the periods indicated. Certain information reflectsfinancial results for a single Fund share throughout each period. The totalreturns in the table represent the rate an investor would have earned or loston an investment in the Fund (assuming reinvestment of all dividends anddistributions).

The information for the fiscal year ended September 30, 2000 has been auditedby Deloitte & Touche LLP, independent auditors, whose report, along with theFund's financial statements, is included in the annual report, which isavailable upon request. The financial highlights for the fiscal year endedSeptember 30, 1999 and all periods presented prior thereto have been audited byother independent accountants.



<TABLE><CAPTION>

FOR THE PERIODFOR THE YEAR ENDED SEPTEMBER 30, JULY 28, 1997*

------------------------------------------------- THROUGH2000 1999 1998 SEPTEMBER 30, 1997

-----------------------------------------------------------------------------------------------------------------------------------<S> <C> <C> <C> <C>CLASS A SHARES++SELECTED PER SHARE DATA:Net asset value, beginning of period $10.98 $11.18 $12.81 $12.20

-----------------------------------------------------------------------------------------------------------------------------------Income (loss) from investment operations:Net investment income 0.53 0.58 0.59 0.12Net realized and unrealized gain (loss) (0.26) 0.54 (1.12) 0.61

------ ------ ------ ------Total income (loss) from investment operations 0.27 1.12 (0.53) 0.73

-----------------------------------------------------------------------------------------------------------------------------------Less dividends and distributions from:Net investment income (0.51) (0.62) (0.51) (0.12)Net realized gain (0.38) (0.70) (0.59) --

------ ------ ------ ------Total dividends and distributions (0.89) (1.32) (1.10) (0.12)

-----------------------------------------------------------------------------------------------------------------------------------Net asset value, end of period $10.36 $10.98 $11.18 $12.81

-----------------------------------------------------------------------------------------------------------------------------------TOTAL RETURN+ 2.71% 10.15% (4.67)% 5.95%(1)

-----------------------------------------------------------------------------------------------------------------------------------RATIOS TO AVERAGE NET ASSETS:

-----------------------------------------------------------------------------------------------------------------------------------Expenses 1.21%(3) 1.17%(3) 1.17%(3) 1.28%(2)

-----------------------------------------------------------------------------------------------------------------------------------Net investment income 4.92%(3) 5.02%(3) 4.61%(3) 5.77%(2)

-----------------------------------------------------------------------------------------------------------------------------------SUPPLEMENTAL DATA:

-----------------------------------------------------------------------------------------------------------------------------------Net assets, end of period, in thousands $2,872 $12,541 $10,073 $1,047

-----------------------------------------------------------------------------------------------------------------------------------Portfolio turnover rate 38% 36% 58% 74%

-----------------------------------------------------------------------------------------------------------------------------------</TABLE>

* The date shares were first issued.

++ The per share amounts were computed using an average number of sharesoutstanding during the period.

+ Does not reflect the deduction of sales charge. Calculated based on thenet asset value as of the last business day of the period.

(1) Not annualized.

(2) Annualized.

(3) Reflects overall Fund ratios for investment income and non-class specificexpenses.

25

<TABLE><CAPTION>

FOR THE YEAR ENDED SEPTEMBER 30,-----------------------------------------------------------2000++ 1999++ 1998++ 1997**++

----------------------------------------------------------------------------------------------------------------<S> <C> <C> <C> <C>CLASS B SHARESSELECTED PER SHARE DATA:Net asset value, beginning of period $10.98 $11.18 $12.81 $10.23

----------------------------------------------------------------------------------------------------------------Income (loss) from investment operations:Net investment income 0.44 0.50 0.50 0.46Net realized and unrealized gain (loss) (0.23) 0.53 (1.11) 2.54

------ ------ ------ ------Total income (loss) from investment operations 0.21 1.03 (0.61) 3.00

----------------------------------------------------------------------------------------------------------------Less dividends and distributions from:Net investment income (0.44) (0.53) (0.43) (0.41)



Net realized gain (0.38) (0.70) (0.59) (0.01)------ ------ ------ ------

Total dividends and distributions (0.82) (1.23) (1.02) (0.42)----------------------------------------------------------------------------------------------------------------Net asset value, end of period $10.37 $10.98 $11.18 $12.81

----------------------------------------------------------------------------------------------------------------TOTAL RETURN+ 2.00% 9.31% (5.29)% 29.83%

----------------------------------------------------------------------------------------------------------------RATIOS TO AVERAGE NET ASSETS:

----------------------------------------------------------------------------------------------------------------Expenses 1.97%(3) 1.90%(3) 1.80%(3) 1.85%

----------------------------------------------------------------------------------------------------------------Net investment income 4.16%(3) 4.29%(3) 3.98%(3) 4.16%

----------------------------------------------------------------------------------------------------------------SUPPLEMENTAL DATA:

----------------------------------------------------------------------------------------------------------------Net assets, end of period, in thousands $223,413 $348,070 $416,909 $358,973

----------------------------------------------------------------------------------------------------------------Portfolio turnover rate 38% 36% 58% 74%

----------------------------------------------------------------------------------------------------------------

<CAPTION>FOR THE PERIODJUNE 26, 1996*

THROUGHSEPTEMBER 30, 1996

<S> <C>CLASS B SHARESSELECTED PER SHARE DATA:Net asset value, beginning of period $10.00

----------------------------------------------------------------Income (loss) from investment operations:Net investment income 0.08Net realized and unrealized gain (loss) 0.23

------Total income (loss) from investment operations 0.31

----------------------------------------------------------------Less dividends and distributions from:Net investment income (0.08)Net realized gain --

-----Total dividends and distributions (0.08)

----------------------------------------------------------------Net asset value, end of period $10.23

----------------------------------------------------------------TOTAL RETURN+ 3.10%(1)

----------------------------------------------------------------RATIOS TO AVERAGE NET ASSETS:

----------------------------------------------------------------Expenses 2.25%(2)

----------------------------------------------------------------Net investment income 3.60%(2)

----------------------------------------------------------------SUPPLEMENTAL DATA:

----------------------------------------------------------------Net assets, end of period, in thousands $148,142

----------------------------------------------------------------Portfolio turnover rate 7%(1)

----------------------------------------------------------------</TABLE>

* Commencement of operations.

** Prior to July 28, 1997 the Fund issued one class of shares. All shares ofthe Fund held prior to that date have been designated Class B shares.



(1) Not annualized.

(2) Annualized.


26



<TABLE><CAPTION>


--------------------------------------------- THROUGH2000 1999 1998 SEPTEMBER 30, 1997

-----------------------------------------------------------------------------------------------------------------------------------<S> <C> <C> <C> <C>CLASS C SHARES++SELECTED PER SHARE DATA:Net asset value, beginning of period $10.96 $11.16 $12.80 $12.20


------ ------ ------ -----Total income (loss) from investment operations 0.20 1.03 (0.62) 0.71


------ ------ ------ ------Total dividends and distributions (0.82) (1.23) (1.02) (0.11)


-----------------------------------------------------------------------------------------------------------------------------------TOTAL RETURN+ 2.01% 9.38% (5.38)% 5.79%(1)


-----------------------------------------------------------------------------------------------------------------------------------Expenses 1.96%(3) 1.90%(3) 1.92%(3) 1.98%(2)



-----------------------------------------------------------------------------------------------------------------------------------Net assets, end of period, in thousands $25,594 $40,859 $5,630 $987


-----------------------------------------------------------------------------------------------------------------------------------</TABLE>




(1) Not annualized.

(2) Annualized.


27

<TABLE><CAPTION>


--------------------------------------------- THROUGH2000 1999 1998 SEPTEMBER 30, 1997

-----------------------------------------------------------------------------------------------------------------------------------<S> <C> <C> <C> <C>CLASS D SHARES++SELECTED PER SHARE DATA:Net asset value, beginning of period $10.99 $11.18 $12.82 $12.20


------ ------ --------- ---------Total income (loss) from investment operations 0.30 1.15 (0.51) 0.74




------ ------ ------ ---------Total dividends and distributions (0.93) (1.34) (1.13) (0.12)


-----------------------------------------------------------------------------------------------------------------------------------TOTAL RETURN+ 2.98% 10.51% (4.46)% 5.98%(1)


-----------------------------------------------------------------------------------------------------------------------------------Expenses 0.97%(3) 0.93%(3) 0.92%(3) 0.96%(2)



-----------------------------------------------------------------------------------------------------------------------------------Net assets, end of period, in thousands $712 $740 $618 $21


-----------------------------------------------------------------------------------------------------------------------------------</TABLE>



+ Calculated based on the net asset value as of the last business day ofthe period.

(1) Not annualized.

(2) Annualized.


28

MORGAN STANLEY DEAN WITTERFAMILY OF FUNDS

The Morgan Stanley Dean Witter Family of Funds offers investors a widerange of investment choices. Come on in and meet the family!

<TABLE><CAPTION><S> <C> <C>--------------------------------------------------------------------------------------------------------------GROWTH FUNDS GROWTH FUNDS THEME FUNDS

Aggressive Equity Fund Financial Services TrustAmerican Opportunities Fund Health Sciences TrustCapital Growth Securities Information FundDeveloping Growth Securities Natural Resource Development SecuritiesGrowth Fund Technology FundMarket Leader TrustMid-Cap Equity Trust GLOBAL/INTERNATIONAL FUNDSNew Discoveries Fund Competitive Edge Fund - "Best Ideas" PortfolioNext Generation Trust European Growth FundSmall Cap Growth Fund Fund of Funds - International PortfolioSpecial Value Fund International FundTax-Managed Growth Fund International SmallCap Fund21st Century Trend Fund Japan Fund

Latin American Growth FundPacific Growth Fund

--------------------------------------------------------------------------------------------------------------GROWTH & INCOME FUND Balanced Growth Fund Total Market Index Fund

Balanced Income Fund Total Return TrustConvertible Securities Trust Value FundDividend Growth Securities Value-Added Market Series/Equity PortfolioEquity FundFund of Funds - Domestic Portfolio THEME FUNDSIncome Builder Fund Real Estate FundS&P 500 Index Fund Utilities FundS&P 500 Select FundStrategist Fund GLOBAL FUNDS



Global Dividend Growth SecuritiesGlobal Utilities Fund

--------------------------------------------------------------------------------------------------------------INCOME FUNDS GOVERNMENT INCOME FUNDS GLOBAL INCOME FUNDS

Federal Securities Trust North American Government Income TrustShort-Term U.S. Treasury Trust World Wide Income TrustU.S. Government Securities TrustDIVERSIFIED INCOME FUNDS TAX-FREE INCOME FUNDSDiversified Income Trust California Tax-Free Income Fund

Hawaii Municipal Trust(FSC)CORPORATE INCOME FUNDS Limited Term Municipal Trust(NL)High Yield Securities Multi-State Municipal Series Trust(FSC)Intermediate Income Securities New York Tax-Free Income FundShort-Term Bond Fund(NL) Tax-Exempt Securities Trust

--------------------------------------------------------------------------------------------------------------MONEY MARKET FUNDS TAXABLE MONEY MARKET FUNDS TAX-FREE MONEY MARKET FUNDS

Liquid Asset Fund(MM) California Tax-Free Daily Income Trust(MM)U.S. Government Money Market Trust(MM) New York Municipal Money Market Trust(MM)

Tax-Free Daily Income Trust(MM)</TABLE>

There may be funds created after this Prospectus was published. Please consultthe inside back cover of a new fund's prospectus for its designation, e.g.,Multi-Class Fund or Money Market Fund.

Unless otherwise noted, each listed Morgan Stanley Dean Witter Fund, except forNorth American Government Income Trust and Short-Term U.S. Treasury Trust, is aMulti-Class Fund. A Multi-Class Fund is a mutual fund offering multiple Classesof shares. The other types of funds are: NL -- No-Load (Mutual) Fund; MM --Money Market Fund; FSC -- A mutual fund sold with a front-end sales charge anda distribution (12b-1) fee.

PROSPECTUS - NOVEMBER 30, 2000

Additional information about the Fund's investments is available in the Fund'sAnnual and Semi-Annual Reports to Shareholders. In the Fund's Annual Report, youwill find a discussion of the market conditions and investment strategies thatsignificantly affected the Fund's performance during its last fiscal year. TheFund's Statement of Additional Information also provides additional informationabout the Fund. The Statement of Additional Information is incorporated hereinby reference (legally is part of this Prospectus). For a free copy of any ofthese documents, to request other information about the Fund, or to makeshareholder inquiries, please call:

(800) 869-NEWS

You also may obtain information about the Fund by calling your Morgan StanleyDean Witter Financial Advisor or by visiting our Internet site at:

WWW.MSDWADVICE.COM/FUNDS

Information about the Fund (including the Statement of Additional Information)can be viewed and copied at the Securities and Exchange Commission's PublicReference Room in Washington, DC. Information about the Reference Room'soperations may be obtained by calling the SEC at (202) 942-8090. Reports andother information about the Fund are available on the EDGAR Database on theSEC's Internet site (www.sec.gov), and copies of this information may beobtained, after paying a duplicating fee, by electronic request at thefollowing E-mail address: [email protected], or by writing the PublicReference Section of the SEC, Washington, DC 20549-0102.

TICKER SYMBOLS:

Class A: INBAX Class C: INBCX------------------- --------------------

Class B: INBBX Class D: INBDX------------------- --------------------

(THE FUND'S INVESTMENT COMPANY ACT FILE NO. IS 811-7575)

MORGAN STANLEY DEAN WITTER

INCOME BUILDER FUND



[GRAPHIC OMITTED]

A MUTUAL FUND WHOSE PRIMARYINVESTMENT OBJECTIVE IS TO SEEK

REASONABLE INCOME; AS ASECONDARY OBJECTIVE, THE FUND

SEEKS GROWTH OF CAPITAL

STATEMENT OF ADDITIONAL INFORMATION MORGAN STANLEY DEAN WITTERINCOME BUILDER FUND

November 30, 2000--------------------------------------------------------------------------------

This Statement of Additional Information is not a Prospectus. TheProspectus (dated November 30, 2000) for Morgan Stanley Dean Witter IncomeBuilder Fund may be obtained without charge from the Fund at its address ortelephone number listed below or from Dean Witter Reynolds at any of its branchoffices.

Morgan Stanley Dean Witter Income Builder FundTwo World Trade CenterNew York, New York 10048(800) 869-NEWS

TABLE OF CONTENTS--------------------------------------------------------------------------------

I. Fund History ..................................................... 4II. Description of the Fund and Its Investments and Risks ............ 4II. Description of the Fund and Its Investments and Risks ............ 4

A. Classification .............................................. 4B. Investment Strategies and Risks ............................. 4C. Fund Policies/Investment Restrictions ....................... 7

III. Management of the Fund ........................................... 8A. Board of Trustees ........................................... 8B. Management Information ...................................... 8C. Compensation ................................................ 13

IV. Control Persons and Principal Holders of Securities .............. 15V. Investment Management and Other Services ......................... 15

A. Investment Manager .......................................... 15B. Principal Underwriter ....................................... 16C. Services Provided by the Investment Manager ................. 16D. Dealer Reallowances ......................................... 17E. Rule 12b-1 Plan ............................................. 17F. Other Service Providers ................................... 21G. Codes of Ethics ............................................ 22

VI. Brokerage Allocation and Other Practices ......................... 22A. Brokerage Transactions ...................................... 22B. Commissions ................................................. 22C. Brokerage Selection ......................................... 23D. Directed Brokerage .......................................... 24E. Regular Broker-Dealers ...................................... 24

VII. Capital Stock and Other Securities ............................... 24VIII. Purchase, Redemption and Pricing of Shares ....................... 25

A. Purchase/Redemption of Shares ............................... 25B. Offering Price .............................................. 25

IX. Taxation of the Fund and Shareholders ............................ 26X. Underwriters ..................................................... 28XI. Calculation of Performance Data .................................. 28XII. Financial Statements ............................................. 30



2

GLOSSARY OF SELECTED DEFINED TERMS

The terms defined in this glossary are frequently used in this Statementof Additional Information (other terms used occasionally are defined in thetext of the document).

"Custodian" - The Bank of New York.

"Dean Witter Reynolds" - Dean Witter Reynolds Inc., a wholly-ownedbroker-dealer subsidiary of MSDW.

"Distributor" - Morgan Stanley Dean Witter Distributors Inc., awholly-owned broker-dealer subsidiary of MSDW.

"Financial Advisors" - Morgan Stanley Dean Witter authorized financialservices representatives.

"Fund" - Morgan Stanley Dean Witter Income Builder Fund, a registeredopen-end investment company.

"Independent Trustees" - Trustees who are not "interested persons" (asdefined by the Investment Company Act) of the Fund.

"Investment Manager" - Morgan Stanley Dean Witter Advisors Inc., awholly-owned investment advisor subsidiary of MSDW.

"Morgan Stanley & Co." - Morgan Stanley & Co. Incorporated, a wholly-ownedbroker-dealer subsidiary of MSDW.

"Morgan Stanley Dean Witter Funds" - Registered investment companies (i)for which the Investment Manager serves as the investment advisor and (ii) thathold themselves out to investors as related companies for investment andinvestor services.

"MSDW" - Morgan Stanley Dean Witter & Co., a preeminent global financialservices firm.

"MSDW Services Company" - Morgan Stanley Dean Witter Services CompanyInc., a wholly-owned fund services subsidiary of the Investment Manager.

"Transfer Agent" - Morgan Stanley Dean Witter Trust FSB, a wholly-ownedtransfer agent subsidiary of MSDW.

"Trustees" - The Board of Trustees of the Fund.

3

I. FUND HISTORY--------------------------------------------------------------------------------

The Fund was organized as a Massachusetts business trust, under aDeclaration of Trust, on March 21, 1996, with the name Dean Witter IncomeBuilder Fund. On June 22, 1998, the Fund's name was changed to Morgan StanleyDean Witter Income Builder Fund.

II. DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS--------------------------------------------------------------------------------

A. CLASSIFICATION

The Fund is an open-end, diversified management investment company whoseprimary investment objective is to seek reasonable income. As a secondaryobjective, the Fund seeks growth of capital.

B. INVESTMENT STRATEGIES AND RISKS

The following discussion of the Fund's investment strategies and risksshould be read with the sections of the Fund's Prospectus titled "PrincipalInvestment Strategies," "Principal Risks," "Additional Investment StrategyInformation," and "Additional Risk Information."

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The Fund may enter intoforward foreign currency exchange contracts ("forward contracts") to "lock in"the price of a security in U.S. dollars or some other foreign currency whichthe Fund is holding in its portfolio. By entering into a forward contract for



the purchase or sale, for a fixed amount of dollars or other currency, of theamount of foreign currency involved in the underlying security transactions,the Fund may be able to protect itself against a possible loss resulting froman adverse change in the relationship between the U.S. dollar or other currencywhich is being used for the security purchase and the foreign currency in whichthe security is denominated during the period between the date on which thesecurity is purchased or sold and the date on which payment is made orreceived. A forward contract involves an obligation to purchase or sell aspecific currency at a future date, which may be any fixed number of days fromthe date of the contract agreed upon by the parties, at a price set at the timeof the contract. These contracts are traded in the interbank market conducteddirectly between currency traders (usually large, commercial and investmentbanks) and their customers. Forward contracts only will be entered into withUnited States banks and their foreign branches, insurance companies and otherdealers or foreign banks whose assets total $1 billion or more. A forwardcontract generally has no deposit requirement, and no commissions are chargedat any stage for trades.

Although the Fund values its assets daily in terms of U.S. dollars, itdoes not intend to convert its holdings of foreign currencies into U.S. dollarson a daily basis. It will, however, do so from time to time, and investorsshould be aware of the costs of currency conversion. Although foreign exchangedealers do not charge a fee for conversion, they do realize a profit based onthe spread between the prices at which they are buying and selling variouscurrencies. Thus, a dealer may offer to sell a foreign currency to the Fund atone rate, while offering a lesser rate of exchange should the Fund desire toresell that currency to the dealer.

The Fund may be limited in its ability to enter into hedging transactionsinvolving forward contracts by the Internal Revenue Code requirements relatingto qualification as a regulated investment company.

Forward currency contracts may limit gains on portfolio securities thatcould otherwise be realized had they not been utilized and could result inlosses.

MONEY MARKET SECURITIES. The Fund may invest in various money marketsecurities for cash management purposes, which among others may includecommercial paper, bank acceptances, bank obligations, corporate debtsecurities, certificates of deposit, U.S. Government securities, obligations ofsavings institutions and repurchase agreements. Such securities include:

U.S. or Foreign Government Securities. Obligations issued or guaranteed asto principal and interest by the United States or its agencies (such as theExport-Import Bank of the United States, Federal Housing Administration andGovernment National Mortgage Association) or its instrumentalities (such as theFederal Home Loan Bank), including Treasury bills, notes and bonds;

4

Bank Obligations. Obligations (including certificates of deposit, timedeposits and bankers' acceptances) of banks subject to regulation by the U.S.Government and having total assets of $1 billion or more, and instrumentssecured by such obligations, not including obligations of foreign branches ofdomestic banks except to the extent below;

Eurodollar Certificates of Deposit. Eurodollar certificates of depositissued by foreign branches of domestic banks having total assets of $1 billionor more;

Obligations of Savings Institutions. Certificates of deposit of savingsbanks and savings and loan associations, having total assets of $1 billion ormore;

Fully Insured Certificates of Deposit. Certificates of deposit of banksand savings institutions, having total assets of less than $1 billion, if theprincipal amount of the obligation is federally insured by the Bank InsuranceFund or the Savings Association Insurance Fund (each of which is administeredby the FDIC), limited to $100,000 principal amount per certificate and to 10%or less of the Fund's total assets in all such obligations and in all illiquidassets, in the aggregate;

Commercial Paper. Commercial paper rated within the two highest grades byStandard & Poor's Corporation ("S&P") or the two highest grades by Moody'sInvestors Service, Inc. ("Moody's") or, if not rated, issued by a companyhaving an outstanding debt issue rated at least AA by S&P or Aa by Moody's; and

Repurchase Agreements. The Fund may invest in repurchase agreements. Whencash may be available for only a few days, it may be invested by the Fund inrepurchase agreements until such time as it may otherwise be invested or usedfor payments of obligations of the Fund. These agreements, which may be viewed



as a type of secured lending by the Fund, typically involve the acquisition bythe Fund of debt securities from a selling financial institution such as abank, savings and loan association or broker-dealer. The agreement providesthat the Fund will sell back to the institution, and that the institution willrepurchase, the underlying security serving as collateral at a specified priceand at a fixed time in the future, usually not more than seven days from thedate of purchase. The collateral will be marked-to-market daily to determinethat the value of the collateral, as specified in the agreement, does notdecrease below the purchase price plus accrued interest. If such decreaseoccurs, additional collateral will be requested and, when received, added tothe account to maintain full collateralization. The Fund will accrue interestfrom the institution until the time when the repurchase is to occur. Althoughthis date is deemed by the Fund to be the maturity date of a repurchaseagreement, the maturities of securities subject to repurchase agreements arenot subject to any limits.

While repurchase agreements involve certain risks not associated withdirect investments in debt securities, the Fund follows procedures designed tominimize such risks. These procedures include effecting repurchase transactionsonly with large, well-capitalized and well-established financial institutionswhose financial condition will be continually monitored by the InvestmentManager subject to procedures established by the Trustees. In addition, asdescribed above, the value of the collateral underlying the repurchaseagreement will be at least equal to the repurchase price, including any accruedinterest earned on the repurchase agreement. In the event of a default orbankruptcy by a selling financial institution, the Fund will seek to liquidatesuch collateral. However, the exercising of the Fund's right to liquidate suchcollateral could involve certain costs or delays and, to the extent thatproceeds from any sale upon a default of the obligation to repurchase were lessthan the repurchase price, the Fund could suffer a loss.

ZERO COUPON SECURITIES. A portion of the fixed-income securities purchasedby the Fund may be zero coupon securities. Such securities are purchased at adiscount from their face amount, giving the purchaser the right to receivetheir full value at maturity. The interest earned on such securities is,implicitly, automatically compounded and paid out at maturity. While suchcompounding at a constant rate eliminates the risk of receiving lower yieldsupon reinvestment of interest if prevailing interest rates decline, the ownerof a zero coupon security will be unable to participate in higher yields uponreinvestment of interest received on interest-paying securities if prevailinginterest rates rise.

5

A zero coupon security pays no interest to its holder during its life.Therefore, to the extent the Fund invests in zero coupon securities, it willnot receive current cash available for distribution to shareholders. Inaddition, zero coupon securities are subject to substantially greater pricefluctuations during periods of changing prevailing interest rates than arecomparable securities which pay interest on a current basis. Current federaltax law requires that a holder (such as the Fund) of a zero coupon securityaccrue a portion of the discount at which the security was purchased as incomeeach year even though the Fund receives no interest payments in cash on thesecurity during the year.

LENDING PORTFOLIO SECURITIES. The Fund may lend its portfolio securitiesto brokers, dealers and other financial institutions, provided that the loansare callable at any time by the Fund, and are at all times secured by cash orcash equivalents, which are maintained in a segregated account pursuant toapplicable regulations and that are equal to at least 100% of the market value,determined daily, of the loaned securities. The advantage of these loans isthat the Fund continues to receive the income on the loaned securities while atthe same time earning interest on the cash amounts deposited as collateral,which will be invested in short-term obligations. The Fund will not lend morethan 25% of the value of its total assets.

As with any extensions of credit, there are risks of delay in recoveryand, in some cases, even loss of rights in the collateral should the borrowerof the securities fail financially. However, these loans of portfoliosecurities will only be made to firms deemed by the Fund's management to becreditworthy and when the income which can be earned from such loans justifiesthe attendant risks. Upon termination of the loan, the borrower is required toreturn the securities to the Fund. Any gain or loss in the market price duringthe loan period would inure to the Fund.

When voting or consent rights which accompany loaned securities pass tothe borrower, the Fund will follow the policy of calling the loaned securities,to be delivered within one day after notice, to permit the exercise of therights if the matters involved would have a material effect on the Fund'sinvestment in the loaned securities. The Fund will pay reasonable finder's,administrative and custodial fees in connection with a loan of its securities.



WHEN-ISSUED AND DELAYED DELIVERY SECURITIES AND FORWARD COMMITMENTS. Fromtime to time the Fund may purchase securities on a when-issued or delayeddelivery basis or may purchase or sell securities on a forward commitmentbasis. When these transactions are negotiated, the price is fixed at the timeof the commitment, but delivery and payment can take place a month or moreafter the date of commitment. While the Fund will only purchase securities on awhen-issued, delayed delivery or forward commitment basis with the intention ofacquiring the securities, the Fund may sell the securities before thesettlement date, if it is deemed advisable. The securities so purchased or soldare subject to market fluctuation and no interest or dividends accrue to thepurchaser prior to the settlement date.

At the time the Fund makes the commitment to purchase or sell securitieson a when-issued, delayed delivery or forward commitment basis, it will recordthe transaction and thereafter reflect the value, each day, of such securitypurchased, or if a sale, the proceeds to be received, in determining its netasset value. At the time of delivery of the securities, their value may be moreor less than the purchase or sale price. An increase in the percentage of theFund's assets committed to the purchase of securities on a when-issued, delayeddelivery or forward commitment basis may increase the volatility of its netasset value. The Fund will also establish a segregated account on the Fund'sbooks in which it will continually maintain cash or cash equivalents or otherliquid portfolio securities equal in value to commitments to purchasesecurities on a when-issued, delayed delivery or forward commitment basis.

WHEN, AS AND IF ISSUED SECURITIES. The Fund may purchase securities on a"when, as and if issued" basis under which the issuance of the security dependsupon the occurrence of a subsequent event, such as approval of a merger,corporate reorganization or debt restructuring. The commitment for the purchaseof any such security will not be recognized in the portfolio of the Fund untilthe Investment Manager determines that issuance of the security is probable. Atthat time, the Fund will record the transaction and, in determining its netasset value, will reflect the value of the security daily. At that time, theFund will also establish a segregated account on the Fund's books in which itwill maintain cash or cash equivalents or other liquid portfolio securitiesequal in value to recognized commitments for such securities.

6

The value of the Fund's commitments to purchase the securities of any oneissuer, together with the value of all securities of such issuer owned by theFund, may not exceed 5% of the value of the Fund's total assets at the time theinitial commitment to purchase such securities is made. An increase in thepercentage of the Fund's assets committed to the purchase of securities on a"when, as and if issued" basis may increase the volatility of its net assetvalue. The Fund may also sell securities on a "when, as and if issued" basisprovided that the issuance of the security will result automatically from theexchange or conversion of a security owned by the Fund at the time of sale.

C. FUND POLICIES/INVESTMENT RESTRICTIONS

The investment objectives, policies and restrictions listed below havebeen adopted by the Fund as fundamental policies. Under the Investment CompanyAct of 1940, as amended (the "Investment Company Act"), a fundamental policymay not be changed without the vote of a majority of the outstanding votingsecurities of the Fund. The Investment Company Act defines a majority as thelesser of (a) 67% or more of the shares present at a meeting of shareholders,if the holders of 50% of the outstanding shares of the Fund are present orrepresented by proxy; or (b) more than 50% of the outstanding shares of theFund. For purposes of the following restrictions: (i) all percentagelimitations apply immediately after a purchase or initial investment (unlessotherwise noted); and (ii) any subsequent change in any applicable percentageresulting from market fluctuations or other changes in total or net assets doesnot require elimination of any security from the portfolio.

The Fund will:

1. As a primary objective, seek reasonable income.

2. As a secondary objective, seek growth of capital.

The Fund may not:

1. Invest more than 5% of the value of its total assets in the securitiesof any one issuer (other than obligations issued, or guaranteed by, theUnited States Government, its agencies or instrumentalities).



2. Purchase more than 10% of all outstanding voting securities or anyclass of securities of any one issuer.

3. Invest 25% or more of the value of its total assets in securities ofissuers in any one industry. This restriction does not apply toobligations issued or guaranteed by the United States Government, itsagencies or instrumentalities.

4. Invest more than 5% of the value of its total assets in securities ofissuers having a record, together with predecessors, of less than threeyears of continuous operation. This restriction shall not apply to anyobligation of the United States Government, its agencies orinstrumentalities.

5. Invest in securities of any issuer if in the exercise of reasonablediligence, the Fund has determined that any officer or trustee/directorof the Fund or of the Investment Manager owns more than 1/2 of 1% ofthe outstanding securities of such issuer, and such officers andtrustees/directors who own more than 1/2 of 1% own in the aggregatemore than 5% of the outstanding securities of such issuer.

6. Purchase or sell real estate or interests therein (including limitedpartnership interests), although the Fund may purchase securities ofissuers which engage in real estate operations and securities secured byreal estate or interests therein.

7. Purchase or sell commodities.

8. Purchase oil, gas or other mineral leases, rights or royalty contractsor exploration or development programs, except that the Fund may investin the securities of companies which operate, invest in, or sponsor suchprograms.

7

9. Purchase securities of other investment companies, except in connectionwith a merger, consolidation, reorganization or acquisition of assets.

10. Borrow money, except that the Fund may borrow from a bank for temporaryor emergency purposes in amounts not exceeding 5% (taken at the lower ofcost or current value) of its total assets (not including the amountborrowed).

11. Pledge its assets or assign or otherwise encumber them except tosecure permitted borrowings.

12. Issue senior securities as defined in the Investment Company Act exceptinsofar as the Fund may be deemed to have issued a senior security byreason of: (a) entering into any repurchase agreement; (b) borrowingmoney; (c) purchasing any securities on a when-issued or delayeddelivery basis; or (d) lending portfolio securities.

13. Make loans of money or securities, except by: (a) the purchase of debtobligations in which the Fund may invest consistent with its investmentobjective and policies; (b) investment in repurchase agreements; or (c)lending its portfolio securities.

14. Make short sales of securities.

15. Purchase securities on margin, except for such short-term loans as arenecessary for the clearance of portfolio securities.

16. Engage in the underwriting of securities, except insofar as the Fundmay be deemed an underwriter under the Securities Act of 1933 indisposing of a portfolio security.

17. Invest for the purpose of exercising control or management of anyother issuer.

In addition, as non-fundamental policies, the Fund will not invest inoptions or futures contracts or in more than 5% of the value of its net assetsin warrants, including not more than 2% of such assets in warrants not listedon the New York or American Stock Exchange. However, the acquisition ofwarrants attached to other securities is not subject to this restriction.

Notwithstanding any other investment policy or restriction, the Fund mayseek to achieve its investment objectives by investing all or substantially allof its assets in another investment company having substantially the sameinvestment objectives and policies as the Fund.



III. MANAGEMENT OF THE FUND--------------------------------------------------------------------------------

A. BOARD OF TRUSTEES

The Board of Trustees of the Fund oversees the management of the Fund butdoes not itself manage the Fund. The Trustees review various services providedby or under the direction of the Investment Manager to ensure that the Fund'sgeneral investment policies and programs are properly carried out. The Trusteesalso conduct their review to ensure that administrative services are providedto the Fund in a satisfactory manner.

Under state law, the duties of the Trustees are generally characterized asa duty of loyalty and a duty of care. The duty of loyalty requires a Trustee toexercise his or her powers in the interest of the Fund and not the Trustee'sown interest or the interest of another person or organization. A Trusteesatisfies his or her duty of care by acting in good faith with the care of anordinarily prudent person and in a manner the Trustee reasonably believes to bein the best interest of the Fund and its shareholders.

B. MANAGEMENT INFORMATION

Trustees and Officers. The Board of the Fund consists of nine (9)Trustees. These same individuals also serve as directors or trustees for all ofthe Morgan Stanley Dean Witter Funds. Six Trustees (67% of the total number)have no affiliation or business connection with the Investment Manager or anyof its affiliated persons and do not own any stock or other securities issuedby the

8

Investment Manager's parent company, MSDW. These are the "non-interested" or"independent" Trustees. The other three Trustees (the "management Trustees")are affiliated with the Investment Manager.

The Trustees and executive officers of the Fund, their principal businessoccupations during the last five years and their affiliations, if any, with theInvestment Manager, and with the Morgan Stanley Dean Witter Funds (there were93 such Funds as of the calendar year ended December 31, 1999), are shownbelow.

<TABLE><CAPTION>NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS

------------------------------------------- ----------------------------------------------------<S> <C>Michael Bozic (59) ........................ Retired; Director or Trustee of the Morgan StanleyTrustee Dean Witter Funds; formerly Vice Chairman ofc/o Mayer, Brown & Platt Kmart Corporation (December 1998-OctoberCounsel to the Independent Trustees 2000), Chairman and Chief Executive Officer of1675 Broadway Levitz Furniture Corporation (November 1995-New York, New York November 1998) and President and Chief

Executive Officer of Hills Department Stores (May1991-July 1995); formerly variously Chairman,Chief Executive Officer, President and ChiefOperating Officer (1987-1991) of the SearsMerchandise Group of Sears, Roebuck and Co.;Director of Weirton Steel Corporation.

Charles A. Fiumefreddo* (67) .............. Chairman, Director or Trustee and Chief ExecutiveChairman of the Board, Officer of the Morgan Stanley Dean Witter Funds;Chief Executive Officer and Trustee formerly Chairman, Chief Executive Officer andTwo World Trade Center Director of the Investment Manager, the DistributorNew York, New York and MSDW Services Company; Executive Vice

President and Director of Dean Witter Reynolds;Chairman and Director of the Transfer Agent;formerly Director and/or officer of various MSDWsubsidiaries (until June 1998).

Edwin J. Garn (68) ........................ Director or Trustee of the Morgan Stanley DeanTrustee Witter Funds; formerly United States Senator (R-c/o Summit Ventures LLC Utah) (1974-1992) and Chairman, Senate Banking1 Utah Center Committee (1980-1986); formerly Mayor of Salt



201 S. Main Street Lake City, Utah (1971-1974); formerly Astronaut,Salt Lake City, Utah Space Shuttle Discovery (April 12-19, 1985); Vice

Chairman, Huntsman Corporation (chemicalcompany); Director of Franklin Covey (timemanagement systems), BMW Bank of NorthAmerica, Inc. (industrial loan corporation), UnitedSpace Alliance (joint venture between LockheedMartin and the Boeing Company) and Nuskin AsiaPacific (multilevel marketing); member of the UtahRegional Advisory Board of Pacific Corp.; memberof the board of various civic and charitableorganizations.

</TABLE>

9


------------------------------------------- ----------------------------------------------------<S> <C>Wayne E. Hedien (66) ...................... Retired; Director or Trustee of the Morgan StanleyTrustee Dean Witter Funds; Director of The PMI Group,c/o Mayer, Brown & Platt Inc. (private mortgage insurance); Trustee andCounsel to the Independent Trustees Vice Chairman of The Field Museum of Natural1675 Broadway History; formerly associated with the AllstateNew York, New York Companies (1966-1994), most recently as

Chairman of The Allstate Corporation (March1993-December 1994) and Chairman and ChiefExecutive Officer of its wholly-owned subsidiary,Allstate Insurance Company (July 1989-December1994); director of various other business andcharitable organizations.

James F. Higgins* (52) .................... Chairman of the Private Client Group of MSDWTrustee (since August 2000); Director of the Transfer AgentTwo World Trade Center and Dean Witter Realty Inc.; Director or Trustee ofNew York, New York the Morgan Stanley Dean Witter Funds (since

June 2000); previously President and ChiefOperating Officer of the Private Client Group ofMSDW (May 1999-August 2000), President andChief Operating Officer of Individual Securities ofMSDW (February 1997-May 1999), President andChief Operating Officer of Dean Witter Financial(1989-1995) and Director (1985-1997) of DeanWitter Reynolds.

Dr. Manuel H. Johnson (51) ................ Senior Partner, Johnson Smick International, Inc.,Trustee a consulting firm; Co-Chairman and a founder ofc/o Johnson Smick International, Inc. the Group of Seven Council (G7C), an international1133 Connecticut Avenue, N.W. economic commission; Chairman of the AuditWashington, D.C. Committee and Director or Trustee of the Morgan

Stanley Dean Witter Funds; Director of GreenwichCapital Markets, Inc. (broker-dealer), IndependenceStandards Board (private sector organizationgoverning independence of auditors) and NVR,Inc. (home construction); Chairman and Trustee ofthe Financial Accounting Foundation (oversightorganization of the Financial Accounting StandardsBoard); formerly Vice Chairman of the Board ofGovernors of the Federal Reserve System andAssistant Secretary of the U.S. Treasury.

Michael E. Nugent (64) .................... General Partner, Triumph Capital, L.P., a privateTrustee investment partnership; Chairman of the Insurancec/o Triumph Capital, L.P. Committee and Director or Trustee of the Morgan237 Park Avenue Stanley Dean Witter Funds; formerly ViceNew York, New York President, Bankers Trust Company and BT Capital

Corporation; director of various businessorganizations.

Philip J. Purcell* (57) ................... Chairman of the Board of Directors and ChiefTrustee Executive Officer of MSDW, Dean Witter Reynolds1585 Broadway and Novus Credit Services Inc.; Director of theNew York, New York Distributor; Director or Trustee of the Morgan

Stanley Dean Witter Funds; Director of AmericanAirlines, Inc. and its parent company, AMRCorporation; Director and/or officer of variousMSDW subsidiaries.



</TABLE>

10


------------------------------------------- -----------------------------------------------------<S> <C>John L. Schroeder (70) .................... Retired; Chairman of the Derivatives CommitteeTrustee and Director or Trustee of the Morgan Stanleyc/o Mayer, Brown & Platt Dean Witter Funds; Director of CitizensCounsel to the Independent Trustees Communications Company (telecommunications1675 Broadway company); formerly Executive Vice President andNew York, New York Chief Investment Officer of the Home Insurance

Company (August 1991-September 1995).

Mitchell M. Merin (47) .................... President and Chief Operating Officer of AssetPresident Management of MSDW (since December 1998);Two World Trade Center President and Director (since April 1997) and ChiefNew York, New York Executive Officer (since June 1998) of the

Investment Manager and MSDW ServicesCompany; Chairman, Chief Executive Officer andDirector of the Distributor (since June 1998);Chairman and Chief Executive Officer (since June1998) and Director (since January 1998) of theTransfer Agent; Director of various MSDWsubsidiaries; President of the Morgan Stanley DeanWitter Funds (since May 1999), Trustee of variousVan Kampen investment companies (sinceDecember 1999); previously Chief Strategic Officerof the Investment Manager and MSDW ServicesCompany and Executive Vice President of theDistributor (April 1997-June 1998), Vice Presidentof the Morgan Stanley Dean Witter Funds (May1997-April 1999), and Executive Vice President ofDean Witter, Discover & Co.

Barry Fink (45) ........................... General Counsel of Asset Management of MSDWVice President, (since May 2000); Executive Vice President (sinceSecretary and General Counsel December 1999) and Secretary and GeneralTwo World Trade Center Counsel (since February 1997) and Director (sinceNew York, New York July 1998) of the Investment Manager and MSDW

Services Company; Vice President, Secretary andGeneral Counsel of the Morgan Stanley DeanWitter Funds (since February 1997); Vice Presidentand Secretary of the Distributor; previously, SeniorVice President (March 1997-December 1999), FirstVice President, Assistant Secretary and AssistantGeneral Counsel of the Investment Manager andMSDW Services Company.

Paul D. Vance (64) ........................ Senior Vice President and Director of the GrowthVice President and Income Group of the Investment Manager;Two World Trade Center Vice President of various Morgan Stanley DeanNew York, New York Witter Funds.

Peter M. Avelar (42) ...................... Senior Vice President and Director of the HighVice President Yield Group of the Investment Manager; ViceTwo World Trade Center President of various Morgan Stanley Dean WitterNew York, New York Funds.</TABLE>

11


------------------------------------------- ----------------------------------------------------<S> <C>Catherine Maniscalco (37) ................. Vice President (since June 1997) and a portfolioVice President manager with the Investment Manager for over fiveTwo World Trade Center years.New York, New York



Thomas F. Caloia (54) ..................... First Vice President and Assistant Treasurer of theTreasurer Investment Manager, the Distributor and MSDWTwo World Trade Center Services Company; Treasurer of the MorganNew York, New York Stanley Dean Witter Funds.</TABLE>

----------* Denotes Trustees who are "interested persons" of the Fund as defined by the

Investment Company Act.

In addition, Ronald E. Robison, Executive Vice President, ChiefAdministrative Officer and Director of the Investment Manager and MSDW ServicesCompany, Robert S. Giambrone, Senior Vice President of the Investment Manager,MSDW Services Company, the Distributor and the Transfer Agent and Director ofthe Transfer Agent, and Joseph J. McAlinden, Executive Vice President and ChiefInvestment Officer of the Investment Manager and Director of the TransferAgent, are Vice Presidents of the Fund.

In addition, Marilyn K. Cranney, Todd Lebo, Lou Anne D. McInnis, CarstenOtto and Ruth Rossi, First Vice Presidents and Assistant General Counsels ofthe Investment Manager and MSDW Services Company, and Natasha Kassian,Assistant Vice President and Assistant General Counsel of the InvestmentManager and MSDW Services Company, are Assistant Secretaries of the Fund.

INDEPENDENT DIRECTORS/TRUSTEES AND THE COMMITTEES. Law and regulationestablish both general guidelines and specific duties for the independentdirectors/trustees. The Morgan Stanley Dean Witter Funds seek as independentdirectors/trustees individuals of distinction and experience in business andfinance, government service or academia; these are people whose advice andcounsel are in demand by others and for whom there is often competition. Toaccept a position on the Funds' boards, such individuals may reject otherattractive assignments because the Funds make substantial demands on theirtime. All of the independent directors/trustees serve as members of the AuditCommittee. In addition, three of the directors/trustees, including twoindependent directors/trustees, serve as members of the Derivatives Committeeand the Insurance Committee.

The independent directors/trustees are charged with recommending to thefull board approval of management, advisory and administration contracts, Rule12b-1 plans and distribution and underwriting agreements; continually reviewingFund performance; checking on the pricing of portfolio securities, brokeragecommissions, transfer agent costs and performance, and trading among Funds inthe same complex; and approving fidelity bond and related insurance coverageand allocations, as well as other matters that arise from time to time. Theindependent directors/trustees are required to select and nominate individualsto fill any independent director/trustee vacancy on the board of any Fund thathas a Rule 12b-1 plan of distribution. Most of the Morgan Stanley Dean WitterFunds have a Rule 12b-1 plan.

The Audit Committee is charged with recommending to the full board theengagement or discharge of the Fund's independent auditors; directinginvestigations into matters within the scope of the independent auditors'duties, including the power to retain outside specialists; reviewing with theindependent auditors the audit plan and results of the auditing engagement;approving professional services provided by the independent auditors and otheraccounting firms prior to the performance of the services; reviewing theindependence of the independent auditors; considering the range of audit andnon-audit fees; reviewing the adequacy of the Fund's system of internalcontrols; and preparing and submitting Committee meeting minutes to the fullboard.

The board of each Fund has a Derivatives Committee to approve parametersfor and monitor the activities of the Fund with respect to derivativeinvestments, if any, made by the Fund.

Finally, the board of each Fund has formed an Insurance Committee toreview and monitor the insurance coverage maintained by the Fund.

12

ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT DIRECTORS/TRUSTEESFOR ALL MORGAN STANLEY DEAN WITTER FUNDS. The independent directors/trusteesand the Funds' management believe that having the same independentdirectors/trustees for each of the Morgan Stanley Dean Witter Funds avoids theduplication of effort that would arise from having different groups of



individuals serving as independent directors/trustees for each of the Funds oreven of sub-groups of Funds. They believe that having the same individualsserve as independent directors/trustees of all the Funds tends to increasetheir knowledge and expertise regarding matters which affect the Fund complexgenerally and enhances their ability to negotiate on behalf of each Fund withthe Fund's service providers. This arrangement also precludes the possibilityof separate groups of independent directors/trustees arriving at conflictingdecisions regarding operations and management of the Funds and avoids the costand confusion that would likely ensue. Finally, having the same independentdirectors/trustees serve on all Fund boards enhances the ability of each Fundto obtain, at modest cost to each separate Fund, the services of independentdirectors/trustees, of the caliber, experience and business acumen of theindividuals who serve as independent directors/trustees of the Morgan StanleyDean Witter Funds.

TRUSTEE AND OFFICER INDEMNIFICATION. The Fund's Declaration of Trustprovides that no Trustee, officer, employee or agent of the Fund is liable tothe Fund or to a shareholder, nor is any Trustee, officer, employee or agentliable to any third persons in connection with the affairs of the Fund, exceptas such liability may arise from his/her or its own bad faith, willfulmisfeasance, gross negligence or reckless disregard of his/her or its duties.It also provides that all third persons shall look solely to the Fund propertyfor satisfaction of claims arising in connection with the affairs of the Fund.With the exceptions stated, the Declaration of Trust provides that a Trustee,officer, employee or agent is entitled to be indemnified against all liabilityin connection with the affairs of the Fund.

C. COMPENSATION

The Fund pays each Independent Trustee an annual fee of $800 plus a permeeting fee of $50 for meetings of the Board of Trustees, the IndependentTrustees or Committees of the Board of Trustees attended by the Trustee (theFund pays the Chairman of the Audit Committee an additional annual fee of $750,and the Chairmen of the Derivatives and Insurance Committees additional annualfees of $500). If a Board meeting and a meeting of the Independent Trustees ora Committee meeting, or a meeting of the Independent Trustees and/or more thanone Committee meeting, take place on a single day, the Trustees are paid asingle meeting fee by the Fund. The Fund also reimburses such Trustees fortravel and other out-of-pocket expenses incurred by them in connection withattending such meetings. Trustees and officers of the Fund who are or have beenemployed by the Investment Manager or an affiliated company receive nocompensation or expense reimbursement from the Fund for their services asTrustee.

The following table illustrates the compensation that the Fund paid to itsIndependent Trustees for the fiscal year ended September 30, 2000.

FUND COMPENSATION

AggregateCompensation

Name of Independent Trustee From the Fund------------------------------- --------------Michael Bozic ................. $1,550Edwin J. Garn ................. 1,600Wayne E. Hedien ............... 1,600Dr. Manuel H. Johnson ......... 2,350Michael E. Nugent ............. 2,100John L. Schroeder ............. 2,050

13

The following table illustrates the compensation paid to the Fund'sIndependent Trustees for the calendar year ended December 31, 1999 for servicesto the 93 Morgan Stanley Dean Witter Funds that were in operation at December31, 1999.

CASH COMPENSATION FROM MORGAN STANLEY DEAN WITTER FUNDS

TOTAL CASH



COMPENSATIONFOR SERVICES TO

93 MORGANSTANLEY DEAN

NAME OF INDEPENDENT TRUSTEE WITTER FUNDS------------------------------- ---------------Michael Bozic .............................. $134,600Edwin J. Garn .............................. 138,700Wayne E. Hedien ............................ 138,700Dr. Manuel H. Johnson ...................... 208,638Michael E. Nugent .......................... 193,324John L. Schroeder .......................... 193,324

As of the date of this Statement of Additional Information, 55 of theMorgan Stanley Dean Witter Funds, not including the Fund, have adopted aretirement program under which an independent director/trustee who retiresafter serving for at least five years (or such lesser period as may bedetermined by the board) as an independent director/trustee of any MorganStanley Dean Witter Fund that has adopted the retirement program (each suchFund referred to as an "Adopting Fund" and each such director/trustee referredto as an "Eligible Trustee") is entitled to retirement payments upon reachingthe eligible retirement age (normally, after attaining age 72). Annual paymentsare based upon length of service.

Currently, upon retirement, each Eligible Trustee is entitled to receivefrom the Adopting Fund, commencing as of his or her retirement date andcontinuing for the remainder of his or her life, an annual retirement benefit(the "Regular Benefit") equal to 30.22% of his or her Eligible Compensationplus 0.5036667% of such Eligible Compensation for each full month of service asan independent director/trustee of any Adopting Fund in excess of five years upto a maximum of 60.44% after ten years of service. The foregoing percentagesmay be changed by the board.(1) "Eligible Compensation" is one-fifth of thetotal compensation earned by such Eligible Trustee for service to the AdoptingFund in the five year period prior to the date of the Eligible Trustee'sretirement. Benefits under the retirement program are accrued as expenses onthe books of the Adopting Funds. Such benefits are not secured or funded by theAdopting Funds.

The following table illustrates the retirement benefits accrued to theFund's Independent Trustees by the 55 Morgan Stanley Dean Witter Funds (notincluding the Fund) for the year ended December 31, 1999, and the estimatedretirement benefits for the Independent Trustees, to commence upon theirretirement, from the 55 Morgan Stanley Dean Witter Funds as of December 31,1999.

-------------(1) An Eligible Trustee may elect alternative payments of his or her

retirement benefits based upon the combined life expectancy of theEligible Trustee and his or her spouse on the date of such EligibleTrustee's retirement. In addition, the Eligible Trustee may elect thatthe surviving spouse's periodic payment of benefits will be equal to alower percentage of the periodic amount when both spouses were alive. Theamount estimated to be payable under this method, through the remainderof the later of the lives of the Eligible Trustee and spouse, will be theactuarial equivalent of the Regular Benefit.

14

Retirement Benefits From the Fund and All Morgan Stanley Dean Witter Funds

<TABLE><CAPTION>

FOR ALL ADOPTING FUNDS------------------------------- RETIREMENT ESTIMATED

ESTIMATED BENEFITS ANNUALCREDITED ACCRUED AS BENEFITS UPONYEARS OF ESTIMATED EXPENSES RETIREMENT

SERVICE AT PERCENTAGE BY ALL FROM ALLRETIREMENT OF ELIGIBLE ADOPTING ADOPTING

NAME OF INDEPENDENT TRUSTEE (MAXIMUM 10) COMPENSATION FUNDS FUNDS(2)------------------------------- -------------- -------------- ------------ --------------<S> <C> <C> <C> <C>Michael Bozic ................. 10 60.44% $20,933 $50,588Edwin J. Garn ................. 10 60.44 31,737 50,675Wayne E. Hedien ............... 9 51.37 39,566 43,000Dr. Manuel H. Johnson ......... 10 60.44 13,129 75,520Michael E. Nugent ............. 10 60.44 23,175 67,209John L. Schroeder ............. 8 50.37 41,558 52,994



</TABLE>

----------(2) Based on current levels of compensation. Amount of annual benefits also

varies depending on the Trustee's elections described in Footnote (1) onpage 14.

IV. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES--------------------------------------------------------------------------------

The following owned 5% or more of the outstanding Class A shares of theFund as of November 9, 2000: Morgan Stanley Dean Witter Trust FSB, Trustee forChattanooga Housing Authority Retirement Plan, P.O. Box 957, Jersey City, N.J.07303-0957 - 18.649%; James P. Slavin, 258 Seaview St., Melbourne Beach, FL32951-3475 - 9.618%; and Jean J. Cone, Trustee for the Wade H. Cone & Jean J.Cone Family Trust dtd. 9-10-80, 518 Ridgeview Ct, Pleasant Hill, CA 94523-1024- 5.735%. The following owned 5% or more of the outstanding Class D shares ofthe Fund as of November 9, 2000: Morgan Stanley Dean Witter Trust FSB, Agentfor American Baptist Homes Foundation of the West Inc., Trustee FBO GiftAnnuity, P.O. Box 503, Jersey City, N.J. 07311 - 59.342%.

As of the date of this Statement of Additional Information, the aggregatenumber of shares of beneficial interest of the Fund owned by the Fund'sofficers and Trustees as a group was less than 1% of the Fund's shares ofbeneficial interest outstanding.

V. INVESTMENT MANAGEMENT AND OTHER SERVICES--------------------------------------------------------------------------------

A. INVESTMENT MANAGER

The Investment Manager to the Fund is Morgan Stanley Dean Witter AdvisorsInc., a Delaware corporation, whose address is Two World Trade Center, NewYork, NY 10048. The Investment Manager is a wholly-owned subsidiary of MSDW, aDelaware corporation. MSDW is a preeminent global financial services firm thatmaintains leading market positions in each of its three primary businesses:securities, asset management and credit services.

Pursuant to an Investment Management Agreement (the "ManagementAgreement") with the Investment Manager, the Fund has retained the InvestmentManager to provide administrative services and manage the investment of theFund's assets, including the placing of orders for the purchase and sale ofportfolio securities. The Fund pays the Investment Manager monthly compensationcalculated daily by applying the following annual rates to the net assets ofthe Fund determined as of the close of each business day: 0.75% to the portionof daily net assets not exceeding $500 million; and 0.725% to the portion ofdaily net assets exceeding $500 million. The management fee is allocated amongthe Classes pro rata based on the net assets of the Fund attributable to eachClass. For the fiscal years ended September 30, 1998, 1999 and 2000, theInvestment Manager accrued total compensation under the Management Agreement inthe amounts of $3,387,158, $3,213,769 and $2,388,886, respectively.

The Investment Manager has retained its wholly-owned subsidiary, MSDWServices Company, to perform administrative services for the Fund.

15

B. PRINCIPAL UNDERWRITER

The Fund's principal underwriter is the Distributor (which has the sameaddress as the Investment Manager). In this capacity, the Fund's shares aredistributed by the Distributor. The Distributor has entered into a selecteddealer agreement with Dean Witter Reynolds, which through its own salesorganization sells shares of the Fund. In addition, the Distributor may enterinto similar agreements with other selected broker-dealers. The Distributor, aDelaware corporation, is a wholly-owned subsidiary of MSDW.

The Distributor bears all expenses it may incur in providing servicesunder the Distribution Agreement. These expenses include the payment ofcommissions for sales of the Fund's shares and incentive compensation toFinancial Advisors, the cost of educational and/or business-related trips, andeducational and/or promotional and business-related expenses. The Distributoralso pays certain expenses in connection with the distribution of the Fund'sshares, including the costs of preparing, printing and distributing advertising



or promotional materials, and the costs of printing and distributingprospectuses and supplements thereto used in connection with the offering andsale of the Fund's shares. The Fund bears the costs of initial typesetting,printing and distribution of prospectuses and supplements thereto toshareholders. The Fund also bears the costs of registering the Fund and itsshares under federal and state securities laws and pays filing fees inaccordance with state securities laws.

The Fund and the Distributor have agreed to indemnify each other againstcertain liabilities, including liabilities under the Securities Act. Under theDistribution Agreement, the Distributor uses its best efforts in renderingservices to the Fund, but in the absence of willful misfeasance, bad faith,gross negligence or reckless disregard of its obligations, the Distributor isnot liable to the Fund or any of its shareholders for any error of judgment ormistake of law or for any act or omission or for any losses sustained by theFund or its shareholders.

C. SERVICES PROVIDED BY THE INVESTMENT MANAGER

The Investment Manager manages the investment of the Fund's assets,including the placing of orders for the purchase and sale of portfoliosecurities. The Investment Manager obtains and evaluates the information andadvice relating to the economy, securities markets, and specific securities asit considers necessary or useful to continuously manage the assets of the Fundin a manner consistent with its investment objectives.

Under the terms of the Management Agreement, in addition to managing theFund's investments, the Investment Manager maintains certain of the Fund'sbooks and records and furnishes, at its own expense, the office space,facilities, equipment, clerical help, bookkeeping and certain legal services asthe Fund may reasonably require in the conduct of its business, including thepreparation of prospectuses, proxy statements and reports required to be filedwith federal and state securities commissions (except insofar as theparticipation or assistance of independent auditors and attorneys is, in theopinion of the Investment Manager, necessary or desirable). In addition, theInvestment Manager pays the salaries of all personnel, including officers ofthe Fund, who are employees of the Investment Manager. The Investment Manageralso bears the cost of telephone service, heat, light, power and otherutilities provided to the Fund.

Expenses not expressly assumed by the Investment Manager under theManagement Agreement or by the Distributor, will be paid by the Fund. Theseexpenses will be allocated among the four Classes of shares pro rata based onthe net assets of the Fund attributable to each Class, except as describedbelow. Such expenses include, but are not limited to: expenses of the Plan ofDistribution pursuant to Rule 12b-1; charges and expenses of any registrar,custodian, stock transfer and dividend disbursing agent; brokerage commissions;taxes; engraving and printing share certificates; registration costs of theFund and its shares under federal and state securities laws; the cost andexpense of printing, including typesetting, and distributing prospectuses ofthe Fund and supplements thereto to the Fund's shareholders; all expenses ofshareholders' and Trustees' meetings and of preparing, printing and mailing ofproxy statements and reports to shareholders; fees and travel expenses ofTrustees or

16

members of any advisory board or committee who are not employees of theInvestment Manager or any corporate affiliate of the Investment Manager; allexpenses incident to any dividend, withdrawal or redemption options; chargesand expenses of any outside service used for pricing of the Fund's shares; feesand expenses of legal counsel, including counsel to the Trustees who are notinterested persons of the Fund or of the Investment Manager (not includingcompensation or expenses of attorneys who are employees of the InvestmentManager); fees and expenses of the Fund's independent auditors; membership duesof industry associations; interest on Fund borrowings; postage; insurancepremiums on property or personnel (including officers and Trustees) of the Fundwhich inure to its benefit; extraordinary expenses (including, but not limitedto, legal claims and liabilities and litigation costs and any indemnificationrelating thereto); and all other costs of the Fund's operation. The 12b-1 feesrelating to a particular Class will be allocated directly to that Class. Inaddition, other expenses associated with a particular Class (except advisory orcustodial fees) may be allocated directly to that Class, provided that suchexpenses are reasonably identified as specifically attributable to that Classand the direct allocation to that Class is approved by the Trustees.



The Management Agreement provides that in the absence of willfulmisfeasance, bad faith, gross negligence or reckless disregard of itsobligations thereunder, the Investment Manager is not liable to the Fund or anyof its investors for any act or omission by the Investment Manager or for anylosses sustained by the Fund or its investors.

The Management Agreement will remain in effect from year to year, providedcontinuance of the Management Agreement is approved at least annually by thevote of the holders of a majority, as defined in the Investment Company Act, ofthe outstanding shares of the Fund, or by the Trustees; provided that in eitherevent such continuance is approved annually by the vote of a majority of theTrustees, including a majority of the Independent Trustees.

D. DEALER REALLOWANCES

Upon notice to selected broker-dealers, the Distributor may reallow up tothe full applicable front-end sales charge during periods specified in suchnotice. During periods when 90% or more of the sales charge is reallowed, suchselected broker-dealers may be deemed to be underwriters as that term isdefined in the Securities Act.

E. RULE 12B-1 PLAN

The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 underthe Investment Company Act (the "Plan") pursuant to which each Class, otherthan Class D, pays the Distributor compensation accrued daily and payablemonthly at the following annual rates: 0.25% and 1.0% of the average daily netassets of Class A and Class C, respectively, and, with respect to Class B, 1.0%of the lesser of: (a) the average daily aggregate gross sales of the Fund'sClass B shares since the inception of the Fund (not including reinvestment ofdividends or capital gains distributions), less the average daily aggregate netasset value of the Fund's Class B shares redeemed since the Fund's inceptionupon which a contingent deferred sales charge has been imposed or upon whichsuch charge has been waived, or (b) the average daily net assets of Class B.

The Distributor also receives the proceeds of front-end sales charges("FSCs") and of contingent deferred sales charges ("CDSCs") imposed on certainredemptions of shares, which are separate and apart from payments made pursuantto the Plan. The Distributor has informed the Fund that it and/or Dean WitterReynolds received the proceeds of CDSCs and FSCs, for the last three fiscalyears ended September 30, in approximate amounts as provided in the table below(the Distributor did not retain any of these amounts).

17

<TABLE><CAPTION>

2000 1999 1998------------------- --------------------- --------------------

<S> <C> <C> <C>Class A ........... FSCs:(1) $ 13,117 FSCs:(1) $ 15,164 FSCs:(1) $ 99,718

CDSCs: $ 0 CDSCs: $ 0 CDSCs: $ 0Class B ........... CDSCs: $879,018 CDSCs: $1,174,157 CDSCs: $1,076,184Class C. .......... CDSCs: $ 1,420 CDSCs: $ 4,337 CDSCs: $ 4,960</TABLE>

----------(1) FSCs apply to Class A only.

The Distributor has informed the Fund that the entire fee payable by ClassA and a portion of the fees payable by each of Class B and Class C each yearpursuant to the Plan equal to 0.25% of such Class' average daily net assets arecurrently each characterized as a "service fee" under the Rules of the NationalAssociation of Securities Dealers, Inc. (of which the Distributor is a member).The "service fee" is a payment made for personal service and/or the maintenanceof shareholder accounts. The remaining portion of the Plan fees payable by aClass, if any, is characterized as an "asset-based sales charge" as such isdefined by the Rules of the Association.

Under the Plan and as required by Rule 12b-1, the Trustees receive and



review promptly after the end of each calendar quarter a written reportprovided by the Distributor of the amounts expended under the Plan and thepurpose for which such expenditures were made. Class B shares of the Fundaccrued amounts payable to the Distributor under the Plan, during the fiscalyear ended September 30, 2000, of $2,776,290. This amount is equal to 1.00% ofthe average daily net assets of Class B for the fiscal year and was calculatedpursuant to clause (b) of the compensation formula under the Plan. For thefiscal year ended September 30, 2000, Class A and Class C shares of the Fundaccrued payments under the Plan amounting to $17,265 and $322,264,respectively, which amounts are equal to 0.24% and 0.99% of the average dailynet assets of Class A and Class C, respectively, for the fiscal year.

The Plan was adopted in order to permit the implementation of the Fund'smethod of distribution. Under this distribution method the Fund offers fourClasses, each with a different distribution arrangement.

With respect to Class A shares, Dean Witter Reynolds compensates itsFinancial Advisors by paying them, from proceeds of the FSC, commissions forthe sale of Class A shares, currently a gross sales credit of up to 5.0% of theamount sold (except as provided in the following sentence) and an annualresidual commission, currently a residual of up to 0.25% of the current valueof the respective accounts for which they are the Financial Advisors or dealersof record in all cases. On orders of $1 million or more (for which no salescharge was paid) or net asset value purchases by employer-sponsored employeebenefit plans, whether or not qualified under the Internal Revenue Code, forwhich the Transfer Agent serves as Trustee or MSDW's Retirement Plan Servicesserves as recordkeeper pursuant to a written Recordkeeping Services Agreement("MSDW Eligible Plans"), the Investment Manager compensates Financial Advisorsby paying them, from its own funds, a gross sales credit of 1.0% of the amountsold.

With respect to Class B shares, Dean Witter Reynolds compensates itsFinancial Advisors by paying them, from its own funds, commissions for the saleof Class B shares, currently a gross sales credit of up to 5.0% of the amountsold (except as provided in the following sentence) and an annual residualcommission, currently a residual of up to 0.25% of the current value (notincluding reinvested dividends or distributions) of the amount sold in allcases. In the case of Class B shares purchased by MSDW Eligible Plans, DeanWitter Reynolds compensates its Financial Advisors by paying them, from its ownfunds, a gross sales credit of 3.0% of the amount sold.

With respect to Class C shares, Dean Witter Reynolds compensates itsFinancial Advisors by paying them, from its own funds, commissions for the saleof Class C shares, currently a gross sales credit of up to 1.0% of the amountsold and an annual residual commission, currently up to 1.0% of the currentvalue of the respective accounts for which they are the Financial Advisors ofrecord.

With respect to Class D shares other than shares held by participants inthe Investment Manager's mutual fund asset allocation program, the InvestmentManager compensates Dean Witter Reynolds' Financial Advisors by paying them,from its own funds, commissions for the sale of Class D shares, currently agross sales credit of up to 1.0% of the amount sold. There is a chargeback of100% of the

18

amount paid if the Class D shares are redeemed in the first year and achargeback of 50% of the amount paid if the Class D shares are redeemed in thesecond year after purchase. The Investment Manager also compensates Dean WitterReynolds' Financial Advisors by paying them, from its own funds, an annualresidual commission, currently up to 0.10% of the current value of therespective accounts for which they are the Financial Advisors of record (notincluding accounts of participants in the Investment Manager's mutual fundasset allocation program).

The gross sales credit is a charge which reflects commissions paid by DeanWitter Reynolds to its Financial Advisors and Dean Witter Reynolds'Fund-associated distribution-related expenses, including sales compensation,and overhead and other branch office distribution-related expenses including(a) the expenses of operating Dean Witter Reynolds' branch offices inconnection with the sale of Fund shares, including lease costs, the salariesand employee benefits of operations and sales support personnel, utility costs,communications costs and the costs of stationery and supplies, (b) the costs of



client sales seminars, (c) travel expenses of mutual fund sales coordinators topromote the sale of Fund shares and (d) other expenses relating to branchpromotion of Fund sales.

The Investment Manager pays a retention fee to Financial Advisors at anannual rate of 0.05% of the value of shares of the Fund sold after January 1,2000 and held for at least one year. Shares purchased through the reinvestmentof dividends will be eligible for a retention fee, provided that such dividendswere earned on shares otherwise eligible for a retention fee payment. Sharesowned in variable annuities, closed-end fund shares and shares held in 401(k)plans where the Transfer Agent or MSDW's Retirement Plan Services is eitherrecordkeeper or trustee are not eligible for a retention fee.

For the first year only, the retention fee is paid on any shares of theFund sold after January 1, 2000 and held by shareholders on December 31, 2000.

The retention fees are paid by the Investment Manager from its own assets,which may include profits from investment management fees payable under theManagement Agreement, as well as from borrowed funds.

The distribution fee that the Distributor receives from the Fund under thePlan, in effect, offsets distribution expenses incurred under the Plan onbehalf of the Fund and, in the case of Class B shares, opportunity costs, suchas the gross sales credit and an assumed interest charge thereon ("carryingcharge"). These expenses may include the cost of Fund-related educationaland/or business-related trips or payment of Fund-related educational and/orpromotional expenses of Financial Advisors. For example, the Distributor hasimplemented a compensation program available only to Financial Advisors meetingspecified criteria under which certain marketing and/or promotional expenses ofthose Financial Advisors are paid by the Distributor out of compensation itreceives under the Plan. In the Distributor's reporting of the distributionexpenses to the Fund, in the case of Class B shares, such assumed interest(computed at the "broker's call rate") has been calculated on the gross creditas it is reduced by amounts received by the Distributor under the Plan and anycontingent deferred sales charges received by the Distributor upon redemptionof shares of the Fund. No other interest charge is included as a distributionexpense in the Distributor's calculation of its distribution costs for thispurpose. The broker's call rate is the interest rate charged to securitiesbrokers on loans secured by exchange-listed securities.

The Fund is authorized to reimburse expenses incurred or to be incurred inpromoting the distribution of the Fund's Class A and Class C shares and inservicing shareholder accounts. Reimbursement will be made through payments atthe end of each month. The amount of each monthly payment may in no eventexceed an amount equal to a payment at the annual rate of 0.25%, in the case ofClass A, and 1.0%, in the case of Class C, of the average net assets of therespective Class during the month. No interest or other financing charges, ifany, incurred on any distribution expenses on behalf of Class A and Class Cwill be reimbursable under the Plan. With respect to Class A, in the case ofall expenses other than expenses representing the service fee, and, withrespect to Class C, in the case of all expenses other than expensesrepresenting a gross sales credit or a residual to Financial Advisors and otherauthorized financial representatives, such amounts shall be determined at thebeginning of each calendar quarter by the Trustees, including, a majority ofthe Independent Trustees. Expenses representing the service fee (for Class A)or a gross sales credit or a residual to Financial Advisors and

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other authorized financial representatives (for Class C) may be reimbursedwithout prior determination. In the event that the Distributor proposes thatmonies shall be reimbursed for other than such expenses, then in makingquarterly determinations of the amounts that may be reimbursed by the Fund, theDistributor will provide and the Trustees will review a quarterly budget ofprojected distribution expenses to be incurred on behalf of the Fund, togetherwith a report explaining the purposes and anticipated benefits of incurringsuch expenses. The Trustees will determine which particular expenses, and theportions thereof, that may be borne by the Fund, and in making such adetermination shall consider the scope of the Distributor's commitment topromoting the distribution of the Fund's Class A and Class C shares.

Each Class paid 100% of the amounts accrued under the Plan with respect tothat Class for the fiscal year ended September 30, 2000 to the Distributor. TheDistributor and Dean Witter Reynolds estimate that they have spent, pursuant tothe Plan, $33,423,716 on behalf of Class B since the inception of the Plan. Itis estimated that this amount was spent in approximately the following ways:(i) 11.92% ($3,985,684)-advertising and promotional expenses; (ii) 0.78%($260,633)-printing of prospectuses for distribution to other than current



shareholders; and (iii) 87.30% ($29,177,399)-other expenses, including thegross sales credit and the carrying charge, of which 9.81% ($2,862,926)represents carrying charges, 37.00% ($10,796,054) represents commission creditsto Dean Witter Reynolds' branch offices and other selected broker-dealers forpayments of commissions to Financial Advisors and other authorized financialrepresentatives, 52.38% ($15,281,372) represents overhead and other branchoffice distribution-related expenses and 0.81% ($237,047) represents excessdistribution expenses of TCW/DW Income and Growth Fund, the net assets of whichwere combined with those of the Fund on June 28, 1999, pursuant to an Agreementand Plan of Reorganization. The amounts accrued by Class A and a portion of theamounts accrued by Class C under the Plan during the fiscal year endedSeptember 30, 2000 were service fees. The remainder of the amounts accrued byClass C were for expenses which relate to compensation of sales personnel andassociated overhead expenses.

In the case of Class B shares, at any given time, the expenses ofdistributing shares of the Fund may be more or less than the total of (i) thepayments made by the Fund pursuant to the Plan; and (ii) the proceeds of CDSCspaid by investors upon redemption of shares. For example, if $1 million inexpenses in distributing Class B shares of the Fund had been incurred and$750,000 had been received as described in (i) and (ii) above, the excessexpense would amount to $250,000. The Distributor has advised the Fund that inthe case of Class B shares the excess distribution expenses, including thecarrying charge designed to approximate the opportunity costs incurred by DeanWitter Reynolds which arise from it having advanced monies without havingreceived the amount of any sales charges imposed at the time of sale of theFund's Class B shares, totaled $16,457,049 as of September 30, 2000 (the end ofthe Fund's fiscal year), which was equal to 7.37% of the net assets of Class Bon such date. Because there is no requirement under the Plan that theDistributor be reimbursed for all distribution expenses with respect to Class Bshares or any requirement that the Plan be continued from year to year, thisexcess amount does not constitute a liability of the Fund. Although there is nolegal obligation for the Fund to pay expenses incurred in excess of paymentsmade to the Distributor under the Plan and the proceeds of CDSCs paid byinvestors upon redemption of shares, if for any reason the Plan is terminated,the Trustees will consider at that time the manner in which to treat suchexpenses. Any cumulative expenses incurred, but not yet recovered throughdistribution fees or CDSCs, may or may not be recovered through futuredistribution fees or CDSCs.

In the case of Class A and Class C shares, expenses incurred pursuant tothe Plan in any calendar year in excess of 0.25% or 1.0% of the average dailynet assets of Class A or Class C, respectively, will not be reimbursed by theFund through payments in any subsequent year, except that expenses representinga gross sales commission credited to Morgan Stanley Dean Witter FinancialAdvisors and other authorized financial representatives at the time of sale maybe reimbursed in the subsequent calendar year. The Distributor has advised theFund that there were no such expenses that may be reimbursed in the subsequentcalendar year in the case of Class A or Class C at December 31, 1999 (end ofthe calendar year). No interest or other financing charges will be incurred onany Class A or Class C distribution expenses incurred by the Distributor underthe Plan or on any unreimbursed expenses due to the Distributor pursuant to thePlan.

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No interested person of the Fund nor any Independent Trustee has anydirect financial interest in the operation of the Plan except to the extentthat the Distributor, the Investment Manager, Dean Witter Reynolds, MSDWServices Company or certain of their employees may be deemed to have such aninterest as a result of benefits derived from the successful operation of thePlan or as a result of receiving a portion of the amounts expended thereunderby the Fund.

On an annual basis the Trustees, including a majority of the IndependentTrustees, consider whether the Plan should be continued. Prior to approving thelast continuation of the Plan, the Trustees requested and received from theDistributor and reviewed all the information which they deemed necessary toarrive at an informed determination. In making their determination to continuethe Plan, the Trustees considered: (1) the Fund's experience under the Plan andwhether such experience indicates that the Plan is operating as anticipated;(2) the benefits the Fund had obtained, was obtaining and would be likely toobtain under the Plan, including that: (a) the Plan is essential in order togive Fund investors a choice of alternatives for payment of distribution andservice charges and to enable the Fund to continue to grow and avoid a patternof net redemptions which, in turn, are essential for effective investmentmanagement; and (b) without the compensation to individual brokers and thereimbursement of distribution and account maintenance expenses of Dean WitterReynolds' branch offices made possible by the 12b-1 fees, Dean Witter Reynolds



could not establish and maintain an effective system for distribution,servicing of Fund shareholders and maintenance of shareholder accounts; and (3)what services had been provided and were continuing to be provided under thePlan to the Fund and its shareholders. Based upon their review, the Trustees,including each of the Independent Trustees, determined that continuation of thePlan would be in the best interest of the Fund and would have a reasonablelikelihood of continuing to benefit the Fund and its shareholders. In theTrustees' quarterly review of the Plan, they will consider its continuedappropriateness and the level of compensation provided therein.

The Plan may not be amended to increase materially the amount to be spentfor the services described therein without approval by the shareholders of theaffected Class or Classes of the Fund, and all material amendments to the Planmust also be approved by the Trustees in the manner described above. The Planmay be terminated at any time, without payment of any penalty, by vote of amajority of the Independent Trustees or by a vote of a majority of theoutstanding voting securities of the Fund (as defined in the Investment CompanyAct) on not more than thirty days' written notice to any other party to thePlan. So long as the Plan is in effect, the election and nomination ofIndependent Trustees shall be committed to the discretion of the IndependentTrustees.

F. OTHER SERVICE PROVIDERS

(1) TRANSFER AGENT/DIVIDEND-PAYING AGENT

Morgan Stanley Dean Witter Trust FSB is the Transfer Agent for the Fund'sshares and the Dividend Disbursing Agent for payment of dividends anddistributions on Fund shares and Agent for shareholders under variousinvestment plans. The principal business address of the Transfer Agent isHarborside Financial Center, Plaza Two, Jersey City, NJ 07311.

(2) CUSTODIAN AND INDEPENDENT AUDITORS

The Bank of New York, 100 Church Street, New York, NY 10007 is theCustodian of the Fund's assets. Any of the Fund's cash balances with eitherCustodian in excess of $100,000 are unprotected by federal deposit insurance.These balances may, at times, be substantial.

Deloitte & Touche LLP, Two World Financial Center, New York, NY 10281,serves as the independent auditors of the Fund. The independent auditors areresponsible for auditing the annual financial statements of the Fund.

(3) AFFILIATED PERSONS

The Transfer Agent is an affiliate of the Investment Manager, and of theDistributor. As Transfer Agent and Dividend Disbursing Agent, the TransferAgent's responsibilities include maintaining share-

21

holder accounts, disbursing cash dividends and reinvesting dividends,processing account registration changes, handling purchase and redemptiontransactions, mailing prospectuses and reports, mailing and tabulating proxies,processing share certificate transactions, and maintaining shareholder recordsand lists. For these services, the Transfer Agent receives a per shareholderaccount fee from the Fund and is reimbursed for its out-of-pocket expenses inconnection with such services.

G. CODES OF ETHICS

The Fund, the Investment Manager and the Distributor have each adopted aCode of Ethics pursuant to Rule 17j-1 under the Investment Company Act. TheCodes of Ethics are designed to detect and prevent improper personal trading.The Codes of Ethics permit personnel subject to the Codes to invest insecurities, including securities that may be purchased, sold or held by theFund, subject to a number of restrictions and controls including prohibitionsagainst purchases of securities in an Initial Public Offering and apreclearance requirement with respect to personal securities transactions.

VI. BROKERAGE ALLOCATION AND OTHER PRACTICES



--------------------------------------------------------------------------------

A. BROKERAGE TRANSACTIONS

Subject to the general supervision of the Board of Trustees, theInvestment Manager is responsible for decisions to buy and sell securities forthe Fund, the selection of brokers and dealers to effect the transactions, andthe negotiation of brokerage commissions, if any. Purchases and sales ofsecurities on a stock exchange are effected through brokers who charge acommission for their services. In the over-the-counter market, securities aregenerally traded on a "net" basis with dealers acting as principal for theirown accounts without a stated commission, although the price of the securityusually includes a profit to the dealer. The Fund expects that securities willbe purchased at times in underwritten offerings where the price includes afixed amount of compensation, generally referred to as the underwriter'sconcession or discount. Options and futures transactions will usually beeffected through a broker and a commission will be charged. On occasion, theFund may also purchase certain money market instruments directly from anissuer, in which case no commissions or discounts are paid.

For the fiscal years ended September 30, 1998, 1999 and 2000, the Fundpaid a total of $314,715, $355,292 and $521,907, respectively, in brokeragecommissions.

B. COMMISSIONS

Pursuant to an order of the SEC, the Fund may effect principaltransactions in certain money market instruments with Dean Witter Reynolds. TheFund will limit its transactions with Dean Witter Reynolds to U.S. Governmentand government agency securities, bank money instruments (i.e., certificates ofdeposit and bankers' acceptances) and commercial paper. The transactions willbe effected with Dean Witter Reynolds only when the price available from DeanWitter Reynolds is better than that available from other dealers.

During the fiscal years ended September 30, 1998, 1999 and 2000, the Funddid not effect any principal transactions with Dean Witter Reynolds.

Brokerage transactions in securities listed on exchanges or admitted tounlisted trading privileges may be effected through Dean Witter Reynolds,Morgan Stanley & Co. and other affiliated brokers and dealers. In order for anaffiliated broker or dealer to effect any portfolio transactions on an exchangefor the Fund, the commissions, fees or other remuneration received by theaffiliated broker or dealer must be reasonable and fair compared to thecommissions, fees or other remuneration paid to other brokers in connectionwith comparable transactions involving similar securities being purchased orsold on an exchange during a comparable period of time. This standard wouldallow the affiliated broker or dealer to receive no more than the remunerationwhich would be expected to be received by an unaffiliated broker in acommensurate arm's-length transaction. Furthermore, the Trustees, including theIndependent Trustees, have adopted procedures which are reasonably designed toprovide that any commis-

22

sions, fees or other remuneration paid to an affiliated broker or dealer areconsistent with the foregoing standard. The Fund does not reduce the managementfee it pays to the Investment Manager by any amount of the brokeragecommissions it may pay to an affiliated broker or dealer.

During the fiscal years ended September 30, 1998, 1999 and 2000, the Fundpaid a total of $141,296, $131,414 and $128,749, respectively, in brokeragecommissions to Dean Witter Reynolds. During the fiscal year ended September 30,2000, the brokerage commissions paid to Dean Witter Reynolds representedapproximately 24.67% of the total commissions paid by the Fund during the yearand were paid on account of transactions having an aggregate dollar value equalto approximately 34.49% of the aggregate dollar value of all portfoliotransactions of the Fund during the year for which commissions were paid.

During the fiscal years ended September 30, 1998, 1999 and 2000, the Fundpaid a total of $6,600, $0 and $17,425, respectively, in brokerage commissionsto Morgan Stanley & Co. During the fiscal year ended September 30, 2000, thebrokerage commissions paid to Morgan Stanley & Co. represented approximately3.34% of the total brokerage commissions paid by the Fund during the year andwere paid on account of transactions having an aggregate dollar value equal toapproximately 3.74% of the aggregate dollar value of all portfolio transactionsof the Fund during the year for which commissions were paid.



C. BROKERAGE SELECTION

The policy of the Fund regarding purchases and sales of securities for itsportfolio is that primary consideration will be given to obtaining the mostfavorable prices and efficient executions of transactions. Consistent with thispolicy, when securities transactions are effected on a stock exchange, theFund's policy is to pay commissions which are considered fair and reasonablewithout necessarily determining that the lowest possible commissions are paidin all circumstances. The Fund believes that a requirement always to seek thelowest possible commission cost could impede effective portfolio management andpreclude the Fund and the Investment Manager from obtaining a high quality ofbrokerage and research services. In seeking to determine the reasonableness ofbrokerage commissions paid in any transaction, the Investment Manager reliesupon its experience and knowledge regarding commissions generally charged byvarious brokers and on its judgment in evaluating the brokerage and researchservices received from the broker effecting the transaction. Thesedeterminations are necessarily subjective and imprecise, as in most cases anexact dollar value for those services is not ascertainable.

The Fund anticipates that certain of its transactions involving foreignsecurities will be effected on securities exchanges. Fixed commissions on suchtransactions are generally higher than negotiated commissions on domestictransactions. There is also generally less government supervision andregulation of foreign securities exchanges and brokers than in the UnitedStates.

In seeking to implement the Fund's policies, the Investment Managereffects transactions with those brokers and dealers who the Investment Managerbelieves provide the most favorable prices and are capable of providingefficient executions. If the Investment Manager believes the prices andexecutions are obtainable from more than one broker or dealer, it may giveconsideration to placing portfolio transactions with those brokers and dealerswho also furnish research and other services to the Fund or the InvestmentManager. The services may include, but are not limited to, any one or more ofthe following: information as to the availability of securities for purchase orsale; statistical or factual information or opinions pertaining to investment;wire services; and appraisals or evaluations of portfolio securities. Theinformation and services received by the Investment Manager from brokers anddealers may be of benefit to the Investment Manager in the management ofaccounts of some of its other clients and may not in all cases benefit the Funddirectly.

The Investment Manager currently serves as investment manager to a numberof clients, including other investment companies, and may in the future act asinvestment manager or advisor to others. It is the practice of the InvestmentManager to cause purchase and sale transactions to be allocated among the Fundand others whose assets it manages in such manner as it deems equitable. Inmaking such

23

allocations among the Fund and other client accounts, various factors may beconsidered, including the respective investment objectives, the relative sizeof portfolio holdings of the same or comparable securities, the availability ofcash for investment, the size of investment commitments generally held and theopinions of the persons responsible for managing the portfolios of the Fund andother client accounts. In the case of certain initial and secondary publicofferings, the Investment Manager utilizes a pro rata allocation process basedon the size of the relevant funds and/or client accounts involved and thenumber of shares available from the public offering.

D. DIRECTED BROKERAGE

During the fiscal year ended September 30, 2000, the Fund paid $358,509 inbrokerage commissions in connection with transactions in the aggregate amountof $165,138,696 to brokers because of research services provided.

E. REGULAR BROKER-DEALERS

During the fiscal year ended September 30, 2000, the Fund purchasedsecurities issued by Bank of America Corp., which issuer was among the tenbrokers or ten dealers that executed transactions for or with the Fund in thelargest dollar amounts during the year. At September 30, 2000, the Fund heldsecurities issued by Bank of America Corp. in the following amount; $3,142,500.



VII. CAPITAL STOCK AND OTHER SECURITIES--------------------------------------------------------------------------------

The shareholders of the Fund are entitled to a full vote for each fullshare of beneficial interest held. The Fund is authorized to issue an unlimitednumber of shares of beneficial interest. All shares of beneficial interest ofthe Fund are of $0.01 par value and are equal as to earnings, assets and votingprivileges except that each Class will have exclusive voting privileges withrespect to matters relating to distribution expenses borne solely by such Classor any other matter in which the interests of one Class differ from theinterests of any other Class. In addition, Class B shareholders will have theright to vote on any proposed material increase in Class A's expenses, if suchproposal is submitted separately to Class A shareholders. Also, Class A, ClassB and Class C bear expenses related to the distribution of their respectiveshares.

The Fund's Declaration of Trust permits the Trustees to authorize thecreation of additional series of shares (the proceeds of which would beinvested in separate, independently managed portfolios) and additional Classesof shares within any series. The Trustees have not presently authorized anysuch additional series or Classes of shares other than as set forth in theProspectus.

The Fund is not required to hold annual meetings of shareholders and inordinary circumstances the Fund does not intend to hold such meetings. TheTrustees may call special meetings of shareholders for action by shareholdervote as may be required by the Investment Company Act or the Declaration ofTrust. Under certain circumstances, the Trustees may be removed by action ofthe Trustees. In addition, under certain circumstances, the shareholders maycall a meeting to remove Trustees and the Fund is required to provideassistance in communicating with shareholders about such a meeting. The votingrights of shareholders are not cumulative, so that holders of more than 50percent of the shares voting can, if they choose, elect all Trustees beingselected, while the holders of the remaining shares would be unable to electany Trustees.

Under Massachusetts law, shareholders of a business trust may, undercertain limited circumstances, be held personally liable as partners for theobligations of the Fund. However, the Declaration of Trust contains an expressdisclaimer of shareholder liability for acts or obligations of the Fund,requires that notice of such Fund obligations include such disclaimer, andprovides for indemnification out of the Fund's property for any shareholderheld personally liable for the obligations of the Fund. Thus, the risk of ashareholder incurring financial loss on account of shareholder liability islimited to circumstances in which the Fund itself would be unable to meet itsobligations. Given the above limitations on shareholder personal liability, andthe nature of the Fund's assets and operations, the possibility of the Fundbeing unable to meet its obligations is remote and thus, in the opinion ofMassachusetts counsel to the Fund, the risk to Fund shareholders of personalliability is remote.

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All of the Trustees, except for James F. Higgins, have been elected by theshareholders of the Fund, most recently at a Special Meeting of Shareholdersheld on May 21, 1997. The Trustees themselves have the power to alter thenumber and the terms of office of the Trustees (as provided for in theDeclaration of Trust), and they may at any time lengthen or shorten their ownterms or make their terms of unlimited duration and appoint their ownsuccessors, provided that always at least a majority of the Trustees has beenelected by the shareholders of the Fund.

VIII. PURCHASE, REDEMPTION AND PRICING OF SHARES--------------------------------------------------------------------------------A. PURCHASE/REDEMPTION OF SHARES

Information concerning how Fund shares are offered to the public (and howthey are redeemed and exchanged) is provided in the Fund's Prospectus.

TRANSFER AGENT AS AGENT. With respect to the redemption or repurchase ofFund shares, the application of proceeds to the purchase of new shares in theFund or any other Morgan Stanley Dean Witter Funds and the generaladministration of the exchange privilege, the Transfer Agent acts as agent forthe Distributor and for the shareholder's authorized broker-dealer, if any, in



the performance of such functions. With respect to exchanges, redemptions orrepurchases, the Transfer Agent shall be liable for its own negligence and notfor the default or negligence of its correspondents or for losses in transit.The Fund shall not be liable for any default or negligence of the TransferAgent, the Distributor or any authorized broker-dealer.

The Distributor and any authorized broker-dealer have appointed theTransfer Agent to act as their agent in connection with the application ofproceeds of any redemption of Fund shares to the purchase of shares of anyother Morgan Stanley Dean Witter Fund and the general administration of theexchange privilege. No commission or discounts will be paid to the Distributoror any authorized broker-dealer for any transaction pursuant to the exchangeprivilege.

TRANSFERS OF SHARES. In the event a shareholder requests a transfer ofFund shares to a new registration, the shares will be transferred without salescharge at the time of transfer. With regard to the status of shares which areeither subject to the CDSC or free of such charge (and with regard to thelength of time shares subject to the charge have been held), any transferinvolving less than all of the shares in an account will be made on a pro ratabasis (that is, by transferring shares in the same proportion that thetransferred shares bear to the total shares in the account immediately prior tothe transfer). The transferred shares will continue to be subject to anyapplicable CDSC as if they had not been so transferred.

OUTSIDE BROKERAGE ACCOUNTS. If a shareholder wishes to maintain his or herfund account through a brokerage company other than Dean Witter Reynolds, he orshe may do so only if the Distributor has entered into a selected dealeragreement with that brokerage company. Accounts maintained through a brokeragecompany other than Dean Witter Reynolds may be subject to certain restrictionson subsequent purchases and exchanges. Please contact your brokerage company orthe Transfer Agent for more information.

B. OFFERING PRICE

The Fund's Class B, Class C and Class D shares are offered at net assetvalue per share and the Class A shares are offered at net asset value per shareplus any applicable FSC which is distributed among the Fund's Distributor, DeanWitter Reynolds and other authorized dealers as described in Section "V.Investment Management and Other Services-E. Rule 12b-1 Plan." The price of Fundshares, called "net asset value," is based on the value of the Fund's portfoliosecurities. Net asset value per share of each Class is calculated by dividingthe value of the portion of the Fund's securities and other assets attributableto that Class, less the liabilities attributable to that Class, by the numberof shares of that Class outstanding. The assets of each Class of shares areinvested in a single portfolio. The net asset value of each Class, however,will differ because the Classes have different ongoing fees.

25

In the calculation of the Fund's net asset value: (1) an equity portfoliosecurity listed or traded on the New York or American Stock Exchange, NASDAQ,or other exchange is valued at its latest sale price, prior to the time whenassets are valued; if there were no sales that day, the security is valued atthe latest bid price (in cases where a security is traded on more than oneexchange, the security is valued on the exchange designated as the primarymarket pursuant to procedures adopted by the Trustees); and (2) all otherportfolio securities for which over-the-counter market quotations are readilyavailable are valued at the latest bid price. When market quotations are notreadily available, including circumstances under which it is determined by theInvestment Manager that sale or bid prices are not reflective of a security'smarket value, portfolio securities are valued at their fair value as determinedin good faith under procedures established by and under the general supervisionof the Fund's Trustees. For valuation purposes, quotations of foreign portfoliosecurities, other assets and liabilities and forward contracts stated inforeign currency are translated into U.S. dollar equivalents at the prevailingmarket rates prior to the close of the New York Stock Exchange.

Short-term debt securities with remaining maturities of sixty days or lessat the time of purchase are valued at amortized cost, unless the Trusteesdetermine such does not reflect the securities' market value, in which casethese securities will be valued at their fair value as determined by theTrustees.



Certain of the Fund's portfolio securities may be valued by an outsidepricing service approved by the Fund's Trustees. The pricing service mayutilize a matrix system incorporating security quality, maturity and coupon asthe evaluation model parameters, and/or research evaluations by its staff,including review of broker-dealer market price quotations in determining whatit believes is the fair valuation of the portfolio securities valued by suchpricing service.

Generally, trading in foreign securities, as well as corporate bonds, U.S.Government securities and money market instruments, is substantially completedeach day at various times prior to the close of the New York Stock Exchange.The values of such securities used in computing the net asset value of theFund's shares are determined as of such times. Foreign currency exchange ratesare also generally determined prior to the close of the New York StockExchange. Occasionally, events which may affect the values of such securitiesand such exchange rates may occur between the times at which they aredetermined and the close of the New York Stock Exchange and will therefore notbe reflected in the computation of the Fund's net asset value. If events thatmay affect the value of such securities occur during such period, then thesesecurities may be valued at their fair value as determined in good faith underprocedures established by and under the supervision of the Trustees.

IX. TAXATION OF THE FUND AND SHAREHOLDERS--------------------------------------------------------------------------------

The Fund generally will make two basic types of distributions: ordinarydividends and long-term capital gain distributions. These two types ofdistributions are reported differently on a shareholder's income tax return andthey are also subject to different rates of tax. The tax treatment of theinvestment activities of the Fund will affect the amount and timing andcharacter of the distributions made by the Fund. Tax issues relating to theFund are not generally a consideration for shareholders such as tax- exemptentities and tax-advantaged retirement vehicles such as an IRA or 401(k) plan.Shareholders are urged to consult their own tax professionals regardingspecific questions as to federal, state or local taxes.

INVESTMENT COMPANY TAXATION. The Fund intends to remain qualified as aregulated investment company under Subchapter M of the Internal Revenue Code of1986. As such, the Fund will not be subject to federal income tax on its netinvestment income and capital gains, if any, to the extent that it distributessuch income and capital gains to its shareholders.

The Fund generally intends to distribute sufficient income and gains sothat the Fund will not pay corporate income tax on its earnings. The Fund alsogenerally intends to distribute to its shareholders in each calendar year asufficient amount of ordinary income and capital gains to avoid the impositionof a 4% excise tax. However, the Fund may instead determine to retain all orpart of any net long-term capital gains in any year for reinvestment. In suchevent, the Fund will pay federal income tax (and possibly excise tax) on suchretained gains.

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Gains or losses on sales of securities by the Fund will be long-termcapital gains or losses if the securities have a tax holding period of morethan one year. Gains or losses on the sale of securities with a tax holdingperiod of one year or less will be short-term gains or losses.

Gains or losses on the Fund's transactions in listed non-equity options,futures and options on futures generally are treated as 60% long-term and 40%short-term. When the Fund engages in options and futures transactions, varioustax rules may accelerate or defer recognition of certain gains and losses,change the character of certain gains or losses, or alter the holding period ofother investments held by the Fund. The application of these rules wouldtherefore also affect the amount, timing and character of distributions made bythe Fund.

The Fund's foreign currency gains or losses from forward contracts,futures contracts that are not "regulated futures contracts," and unlistedoptions, and certain other foreign currency gains or losses derived withrespect to fixed-income securities, are treated as ordinary income or loss. Ingeneral, such foreign currency gains or losses will increase or decrease theamount of the Fund's income available to be distributed to shareholders asordinary income, rather than increasing or decreasing the amount of the Fund's



net capital gain. Additionally, if such foreign currency losses exceed otherordinary income during a taxable year, the Fund would not be able to makeordinary income distributions for the year.

Under certain tax rules, the Fund may be required to accrue a portion ofany discount at which certain securities are purchased as income each year eventhough the Fund receives no payments in cash on the security during the year.In addition, if the Fund invests in an equity security of a non-U.S.corporation classified as a "passive foreign investment company" for U.S. taxpurposes, the application of certain technical tax provisions applying toinvestments in such companies may result in the Fund being required to accrueincome in respect of the security without any receipt of cash attributable tosuch income. To the extent that the Fund invests in such securities, it wouldbe required to pay out such income as an income distribution in each year inorder to avoid taxation at the Fund level. Such distributions will be made fromthe available cash of the Fund or by liquidation of portfolio securities ifnecessary. If a distribution of cash necessitates the liquidation of portfoliosecurities, the Investment Manager will select which securities to sell. TheFund may realize a gain or loss from such sales. In the event the Fund realizesnet capital gains from such transactions, its shareholders may receive a largercapital gain distribution, if any, than they would in the absence of suchtransactions.

TAXATION OF DIVIDENDS AND DISTRIBUTIONS. Shareholders normally will haveto pay federal income taxes, and any state and/or local income taxes, on thedividends and other distributions they receive from the Fund. Such dividendsand distributions, to the extent that they are derived from net investmentincome or short-term capital gains, are taxable to the shareholder as ordinaryincome regardless of whether the shareholder receives such payments inadditional shares or in cash.

Distributions of net long-term capital gains, if any, are taxable toshareholders as long-term capital gains regardless of how long a shareholderhas held the Fund's shares and regardless of whether the distribution isreceived in additional shares or in cash. The maximum tax rate on long-termcapital gains realized by non-corporate shareholders is 20%.

Shareholders are generally taxed on any ordinary dividend or capital gaindistributions from the Fund in the year they are actually distributed. However,if any such dividends or distributions are declared in October, November orDecember and paid in January then such amounts will be treated for tax purposesas received by the shareholders on December 31, to shareholders of record ofsuch month.

Subject to certain exceptions, a corporate shareholder may be eligible fora 70% dividends received deduction to the extent that the Fund earns anddistributes qualifying dividends from its investments. Distributions of netcapital gains by the Fund will not be eligible for the dividends receiveddeduction.

Shareholders who are not citizens or residents of the United States andcertain foreign entities may be subject to withholding of United States tax ondistributions made by the Fund of investment income and short term capitalgains.

After the end of each calendar year, shareholders will be sent informationon their dividends and capital gain distributions for tax purposes, includingthe portion taxable as ordinary income and the portion taxable as long-termcapital gains.

27

PURCHASES AND REDEMPTIONS AND EXCHANGES OF FUND SHARES. Any dividend orcapital gains distribution received by a shareholder from any investmentcompany will have the effect of reducing the net asset value of theshareholder's stock in that company by the exact amount of the dividend orcapital gains distribution. Furthermore, such dividends and capital gainsdistributions are subject to federal income taxes. If the net asset value ofthe shares should be reduced below a shareholder's cost as a result of thepayment of dividends or the distribution of realized long-term capital gains,such payment or distribution would be in part a return of the shareholder'sinvestment but nonetheless would be taxable to the shareholder. Therefore, aninvestor should consider the tax implications of purchasing Fund shares



immediately prior to a distribution record date.

In general, a sale of shares results in capital gain or loss, and forindividual shareholders, is taxable at a federal rate dependent upon the lengthof time the shares were held. A redemption of a shareholder's Fund shares isnormally treated as a sale for tax purposes. Fund shares held for a period ofone year or less will, for tax purposes, generally result in short-term gainsor losses and those held for more than one year generally result in long-termgain or loss. Under current law, the maximum tax rate on long-term capitalgains realized by non-corporate shareholders is 20%. Any loss realized byshareholders upon a sale or redemption of shares within six months of the dateof their purchase will be treated as a long-term capital loss to the extent ofany distributions of net long-term capital gains with respect to such sharesduring the six-month period.

Gain or loss on the sale or redemption of shares in the Fund is measuredby the difference between the amount received and the tax basis of the shares.Shareholders should keep records of investments made (including shares acquiredthrough reinvestment of dividends and distributions) so they can compute thetax basis of their shares. Under certain circumstances a shareholder maycompute and use an average cost basis in determining the gain or loss on thesale or redemption of shares.

Exchanges of Fund shares for shares of another fund, including shares ofother Morgan Stanley Dean Witter Funds, are also subject to similar taxtreatment. Such an exchange is treated for tax purposes as a sale of theoriginal shares in the first fund, followed by the purchase of shares in thesecond fund.

If a shareholder realizes a loss on the redemption or exchange of a fund'sshares and reinvests in that fund's shares within 30 days before or after theredemption or exchange, the transactions may be subject to the "wash sale"rules, resulting in a postponement of the recognition of such loss for taxpurposes.

X. UNDERWRITERS--------------------------------------------------------------------------------

The Fund's shares are offered to the public on a continuous basis. TheDistributor, as the principal underwriter of the shares, has certainobligations under the Distribution Agreement concerning the distribution of theshares. These obligations and the compensation the Distributor receives aredescribed above in the sections titled "Principal Underwriter" and "Rule 12b-1Plan."

XI. CALCULATION OF PERFORMANCE DATA--------------------------------------------------------------------------------

From time to time the Fund may quote its "total return" in advertisementsand sales literature. These figures are computed separately for Class A, ClassB, Class C and Class D shares. The Fund's "average annual total return"represents an annualization of the Fund's total return over a particular periodand is computed by finding the annual percentage rate which will result in theending redeemable value of a hypothetical $1,000 investment made at thebeginning of a one, five or ten year period, or for the period from the date ofcommencement of operations, if shorter than any of the foregoing. The endingredeemable value is reduced by any contingent deferred sales charge ("CDSC") atthe end of the one, five, ten year or other period. For the purpose of thiscalculation, it is assumed that all dividends and distributions are reinvested.The formula for computing the average annual total return involves a percentageobtained by dividing the ending redeemable value by the amount of the initialinvestment

28

(which in the case of Class A shares is reduced by the Class A initial salescharge), taking a root of the quotient (where the root is equivalent to thenumber of years in the period) and subtracting 1 from the result. The averageannual total returns for Class B for the one year period ended September 30,2000 and for the period June 26, 1996 (commencement of operations) throughSeptember 30, 2000 were -2.72% and 8.09%, respectively. The average annualtotal returns of Class A for the fiscal year ended September 30, 2000 and forthe period July 28, 1997 (inception of the Class) through September 30, 2000were -2.68% and 2.53%, respectively. The average annual total returns of ClassC for the fiscal year ended September 30, 2000 and for the period July 28, 1997(inception of the Class) through September 30, 2000 were 1.07% and 3.54%,



respectively. The average annual total returns of Class D for the fiscal yearended September 30, 2000 and for the period July 28, 1997 (inception of theClass) through September 30, 2000 were 2.98% and 4.56%, respectively.

In addition, the Fund may advertise its total return for each Class overdifferent periods of time by means of aggregate, average, year-by-year or othertypes of total return figures. These calculations may or may not reflect theimposition of the maximum front-end sales charge for Class A or the deductionof the CDSC for each of Class B and Class C which, if reflected, would reducethe performance quoted. For example, the average annual total return of theFund may be calculated in the manner described above, but without deduction forany applicable sales charge. Based on this calculation, the average annualtotal returns of Class B for the one year period ended September 30, 2000 andfor the period June 26, 1996 (commencement of operations) through September 30,2000 were 2.00% and 8.46%, respectively. The average annual total returns ofClass A for the fiscal year ended September 30, 2000 and for the period July28, 1997 through September 30, 2000 were 2.71% and 4.29%, respectively. Theaverage annual total returns of Class C for the fiscal year ended September 30,2000 and for the period July 28, 1997 through September 30, 2000 were 2.01% and3.54%, respectively. The average annual total returns of Class D for the fiscalyear ended September 30, 2000 and for the period July 28, 1997 throughSeptember 30, 2000 were 2.98% and 4.56%, respectively.

In addition, the Fund may compute its aggregate total return for eachClass for specified periods by determining the aggregate percentage rate whichwill result in the ending value of a hypothetical $1,000 investment made at thebeginning of the period. For the purpose of this calculation, it is assumedthat all dividends and distributions are reinvested. The formula for computingaggregate total return involves a percentage obtained by dividing the endingvalue (without reduction for any sales charge) by the initial $1,000 investmentand subtracting 1 from the result. Based on this calculation, the total returnsfor Class B for the one year period ended September 30, 2000 and for the periodJune 26, 1996 (commencement of operations) through September 30, 2000 were2.00% and 41.35%, respectively. The total returns of Class A for the fiscalyear ended September 30, 2000 and for the period July 28, 1997 throughSeptember 30, 2000 were 2.71% and 14.27%, respectively. The total returns ofClass C for the fiscal year ended September 30, 2000 and for the period July28, 1997 through September 30, 2000 were 2.01% and 11.70%, respectively. Thetotal returns of Class D for the fiscal year ended September 30, 2000 and forthe period July 28, 1997 through September 30, 2000 were 2.98% and 15.23%,respectively.

The Fund may also advertise the growth of hypothetical investments of$10,000, $50,000 and $100,000 in each Class of shares of the Fund by adding 1to the Fund's aggregate total return to date (expressed as a decimal andwithout taking into account the effect of any applicable CDSC) and multiplyingby $9,475, $48,000 and $97,000 in the case of Class A (investments of $10,000,$50,000 and $100,000 adjusted for the initial sales charge) or by $10,000,$50,000 and $100,000 in the case of each of Class B, Class C and Class D, asthe case may be. Investments of $10,000, $50,000 and $100,000 in each Class atinception of the Class would have grown to the following amounts at September30, 2000:

29

INVESTMENT AT INCEPTION OF:----------------------------------

INCEPTIONCLASS DATE: $10,000 $50,000 $100,000----------------- ---------- --------- --------- ----------Class A ......... 07/28/97 $10,827 $54,850 $110,842Class B ......... 06/26/96 14,135 70,675 141,350Class C ......... 07/28/97 11,170 55,850 111,700Class D ......... 07/28/97 11,523 57,615 115,230

The Fund from time to time may also advertise its performance relative tocertain performance rankings and indexes compiled by recognized organizations.

XII. FINANCIAL STATEMENTS--------------------------------------------------------------------------------

EXPERTS. The financial statements of the Fund for the fiscal year endedSeptember 30, 2000 included in this Statement of Additional Information andincorporated by reference in the Prospectus have been so included andincorporated in reliance on the report of Deloitte & Touche LLP, independentauditors, given on the authority of said firm as experts in auditing and



accounting.

* * * * *

This Statement of Additional Information and the Prospectus do not containall of the information set forth in the Registration Statement the Fund hasfiled with the SEC. The complete Registration Statement may be obtained fromthe SEC.

30

MORGAN STANLEY DEAN WITTER INCOME BUILDER FUNDPORTFOLIO OF INVESTMENTS September 30, 2000

NUMBER OFSHARES VALUE

-----------------------------------------------------------------------COMMON STOCKS AND RIGHTS (48.9%)Auto Parts: O.E.M. (2.4%)

190,000 Delphi Automotive Systems Corp. .......... $ 2,873,75060,000 Johnson Controls, Inc. ................... 3,191,250

------------6,065,000

------------Beverages: Alcoholic (1.2%)

70,000 Anheuser-Busch Companies, Inc. ........... 2,961,875------------

Chemicals: Major Diversified (1.1%)115,000 Dow Chemical Co. ......................... 2,867,812

------------Construction Materials (1.0%)

60,000 Vulcan Materials Co. ..................... 2,411,250------------

Electric Utilities (5.1%)55,000 Dominion Resources, Inc. ................. 3,193,43750,000 FPL Group, Inc. .......................... 3,287,50070,000 Reliant Energy, Inc. ..................... 3,255,000

110,000 TECO Energy, Inc. ........................ 3,162,500------------

12,898,437------------

Electrical Products (1.2%)45,000 Emerson Electric Co. ..................... 3,015,000

------------Electronic Equipment/Instruments (1.9%)

80,000 Rockwell International Corp. ............. 2,420,000165,000 Xerox Corp. .............................. 2,485,312

------------4,905,312

------------Electronics/Appliances (0.9%)

60,000 Whirlpool Corp. .......................... 2,332,500------------

Finance/Rental/Leasing (2.3%)45,000 Fannie Mae ............................... 3,217,500

135,500 Ryder System, Inc. ....................... 2,498,281------------

5,715,781------------

Food Distributors (1.1%)190,000 Supervalu, Inc. .......................... 2,861,875

------------Food: Major Diversified (1.2%)

155,000 Sara Lee Corp. ........................... 3,148,437------------

Food: Meat/Fish/Dairy (1.2%)155,000 ConAgra, Inc. ............................ 3,109,687

------------Industrial Conglomerates (1.2%)

82,000 Honeywell International, Inc. ............ 2,921,250------------

See Notes to Financial Statements

31



MORGAN STANLEY DEAN WITTER INCOME BUILDER FUNDPORTFOLIO OF INVESTMENTS September 30, 2000, continued

NUMBER OFSHARES VALUE

---------------------------------------------------------------------------Industrial Specialties (1.2%)

75,000 PPG Industries, Inc. ......................... $ 2,976,562------------

Life/Health Insurance (1.1%)60,000 Lincoln National Corp. ....................... 2,887,500

------------Major Banks (3.4%)

60,000 Bank of America Corp. ........................ 3,142,50060,000 Chase Manhattan Corp. ........................ 2,771,25070,000 FleetBoston Financial Corp. .................. 2,730,000

------------8,643,750

------------Major Telecommunications (2.4%)

94,500 AT&T Corp. ................................... 2,775,93870,000 Verizon Communications ....................... 3,390,625

------------6,166,563

------------Motor Vehicles (1.1%)

110,000 Ford Motor Co. ............................... 2,784,375------------

Oil & Gas Production (1.3%)51,000 Kerr-McGee Corp. ............................. 3,378,750

------------Oil Refining/Marketing (2.3%)

80,000 Ashland, Inc. ................................ 2,695,000125,000 Ultramar Diamond Shamrock Corp. .............. 3,171,875

------------5,866,875

------------Pharmaceuticals: Major (2.6%)

45,000 Merck & Co., Inc. ............................ 3,349,68870,000 Schering-Plough Corp. ........................ 3,255,000

------------6,604,688

------------Real Estate Investment Trusts (9.1%)

70,000 Archstone Communities Trust .................. 1,719,37535,000 Avalonbay Communities, Inc. .................. 1,669,06340,000 Boston Properties, Inc. ...................... 1,717,50075,000 Duke-Weeks Realty Corp. ...................... 1,809,37555,000 Equity Office Properties Trust ............... 1,708,43840,000 Equity Residential Properties Trust .......... 1,920,00060,000 First Industrial Realty Trust, Inc. .......... 1,845,00085,000 Healthcare Realty Trust, Inc. ................ 1,795,62570,000 Mack-Cali Realty Corp. ....................... 1,973,12585,000 MeriStar Hospitality Corp. ................... 1,721,25070,000 Reckson Associates Realty Corp. .............. 1,785,00075,000 Simon Property Group, Inc. ................... 1,757,81345,000 Vornado Realty Trust ......................... 1,670,625

------------23,092,189

------------


32


<TABLE><CAPTION>NUMBER OFSHARES VALUE

------------------------------------------------------------------------------------<S> <C> <C>

Savings Banks (1.3%)80,000 Washington Mutual, Inc. ................................... $ 3,185,000

------------



Tobacco (1.1%)95,000 Philip Morris Companies, Inc. ............................. 2,796,563

------------TOTAL COMMON STOCKS AND RIGHTS(Cost $122,350,310)........................................ 123,597,031

------------CONVERTIBLE PREFERRED STOCKS (11.1%)Auto Parts: O.E.M. (0.0%)

94,000 BTI Capital Trust $3.25 - 144A*............................ 11,750------------

Containers/Packaging (0.1%)4,900 Sealed Air Corp. (Series A) $2.00.......................... 220,500

------------Household/Personal Care (1.0%)

38,500 Estee Lauder Co. $3.80..................................... 2,497,687------------

Industrial Machinery (0.5%)69,000 Ingersoll-Rand Co. $1.688.................................. 1,242,000

------------Major Banks (1.6%)

155,900 National Australia Bank, Ltd. $1.97 (Australia) (Units)+ .. 3,946,219------------

Movies/Entertainment (0.4%)30,000 Six Flags, Inc. $4.05...................................... 945,000

------------Oil Refining/Marketing (0.8%)

200,000 Tesoro Petroleum Corp. $1.16............................... 2,100,000------------

Publishing: Books/Magazines (0.9%)70,000 Reader's Digest Association, Inc $1.93..................... 2,170,000

------------Railroads (0.6%)

37,200 Union Pacific Capital Trust $3.13.......................... 1,507,902------------

Real Estate Investment Trusts (0.8%)70,000 SL Green Realty Corp. $2.00................................ 2,100,000

------------Regional Banks (3.4%)

126,500 CNB Capital Trust I $1.50.................................. 4,822,813120,700 WBK Strypes Trust $3.14.................................... 3,854,856

------------8,677,669

------------Tools/Hardware (1.0%)

109,700 Metromedia International Group, Inc. $3.63................. 2,495,675------------

TOTAL CONVERTIBLE PREFERRED STOCKS(Cost $35,302,458)......................................... 27,914,402

------------</TABLE>


33


<TABLE><CAPTION>PRINCIPALAMOUNT IN COUPON MATURITYTHOUSANDS RATE DATE VALUE

-----------------------------------------------------------------------------------------------------<S> <C> <C> <C> <C>

CONVERTIBLE BONDS (14.6%)Apparel/Footwear Retail (1.2%)

$ 3,160 Genesco Inc. ................................ 5.50 % 04/15/05 $ 3,054,330------------

Auto Parts: O.E.M. (0.9%)300 Magna International, Inc. (Canada) -

144A* ....................................... 4.875 02/15/05 273,0123,000 MascoTech, Inc. ............................. 4.50 12/15/03 2,040,000

------------2,313,012

------------Biotechnology (0.7%)

810 Athena Neurosciences, Inc. - 144A* .......... 4.75 11/15/04 1,276,997180 Johnson & Johnson - 144A* ................... 4.75 02/15/05 229,911



165 Johnson & Johnson ........................... 4.75 02/15/05 210,751------------

1,717,659------------

Broadcasting (0.6%)1,400 Clear Channel Communications, Inc. .......... 2.625 04/01/03 1,549,828

------------Cable/Satellite TV (1.0%)

1,975 EchoStar Communications Corp. ............... 4.875 01/01/07 2,628,468------------

Contract Drilling (0.2%)440 Diamond Offshore Drilling, Inc. ............. 3.75 02/15/07 491,643

------------Electronic Components (0.6%)

1,925 Solectron Corp. - 144A* ..................... 0.00 01/27/19 1,423,133------------

Electronic Equipment/Instruments (0.8%)2,000 SCI Systems, Inc. ........................... 3.00 03/15/07 2,034,560

------------Electronic Production Equipment (0.7%)

1,690 Photronics Inc. ............................. 6.00 06/01/04 1,698,112------------

Hospital/Nursing Management (0.2%)1,295 Emeritus Corp. - 144A* ...................... 6.25 01/01/06 491,310

105 Sunrise Assisted Living, Inc. - 144A* ....... 5.50 06/15/02 96,206------------

587,516------------

Industrial Machinery (0.8%)2,300 Thermo Fibertek, Inc. - 144A* ............... 4.50 07/15/04 2,080,074

------------Internet Software/Services (1.2%)

7,000 AT Home Corp. ............................... 0.525 12/28/18 3,031,630------------

Major Telecommunications (3.0%)3,700 Bell Atlantic Financial Service - 144A*...... 4.25 09/15/05 4,093,125

</TABLE>


34



-----------------------------------------------------------------------------------------------------<S> <C> <C> <C> <C>

$ 3,700 Bell Atlantic Financial Service - 144A*(exchangeable into Telecom

Corporation of New Zealandcommon stock) ............................... 5.75% 04/01/03 $ 3,575,125

------------7,668,250

------------Medical/Nursing Services (0.1%)

580 Alternative Living Services, Inc. ........... 5.25 12/15/02 282,315------------

Metal Fabrications (0.2%)225 Hexcel Corp. ................................ 7.00 08/01/03 225,000300 Tower Automotive, Inc. - 144A* .............. 5.00 08/01/04 228,270

------------453,270

------------Movies/Entertainment (0.1%)

255 Speedway Motorsports, Inc. .................. 5.75 09/30/03 226,978------------

Packaged Software (0.3%)350 Hyperion Solutions Corp. .................... 4.50 03/15/05 287,042260 Network Associates, Inc. .................... 0.00 02/13/18 100,721745 Network Associates, Inc. - 144A* ............ 0.00 02/13/18 288,606

------------676,369

------------Personnel Services (0.1%)

370 Metamor Worldwide, Inc. ..................... 2.94 08/15/04 171,417



------------Property - Casualty Insurers (0.8%)

640 Berkshire Hathaway, Inc. .................... 1.00 12/02/01 2,048,064------------

Semiconductors (0.3%)310 STMicroelectronics NV (Netherlands) ......... 0.00 06/10/08 801,273

------------Services to the Health Industry (0.0%)

150 Quadramed Corp. ............................. 5.25 05/01/05 50,40050 Quadramed Corp. - 144A* ..................... 5.25 05/01/05 16,800

------------67,200

------------Specialty Telecommunications (0.8%)

3,000 Efficient Networks, Inc. .................... 5.00 03/15/05 1,964,400750 SA Telecommunications, Inc. - 144A* (a)...... 10.00 08/15/06 22,500

------------1,986,900

------------TOTAL CONVERTIBLE BONDS(Cost $36,405,722)................................................... 36,992,001

------------CORPORATE BONDS (22.9%)Aerospace & Defense (0.0%)

140 BE Aerospace, Inc. (Series B) ............... 8.00 03/01/08 123,550------------

</TABLE>


35



-----------------------------------------------------------------------------------------------------<S> <C> <C> <C> <C>

Alternative Power Generation (0.0%)$ 50 CalEnergy Co., Inc. .......................... 7.63% 10/15/07 $ 49,668

------------Aluminum (0.0%)

100 Golden Northwest Aluminum .................... 12.00 12/15/06 102,000------------

Auto Parts: O.E.M. (0.1%)175 Hayes Lemmerz International, Inc. ............ 8.25 12/15/08 141,750100 Hayes Wheels International, Inc.

(Series B) ................................... 9.125 07/15/07 86,000------------

227,750------------

Beverages: Non-Alcoholic (0.2%)165 Cott Corp. (Canada) .......................... 9.375 07/01/05 163,762350 Packaged Ice Inc. (Series B) ................. 9.75 02/01/05 304,500

------------468,262

------------Broadcasting (3.5%)

150 Emmis Communications Corp.(Series B) ................................... 8.125 03/15/09 142,500

2,900 EZ Communications, Inc. ...................... 9.75 12/01/05 3,050,336145 Lamar Media Corp. ............................ 9.25 08/15/07 147,175200 STC Broadcasting, Inc. ....................... 11.00 03/15/07 198,000

5,060 Young Broadcasting Corp. ..................... 11.75 11/15/04 5,180,175------------

8,718,186------------

Cable/Satellite TV (0.9%)175 Echostar DBS Corp. ........................... 9.375 02/01/09 171,500

2,000 Tele-Communications, Inc. .................... 9.25 04/15/02 2,063,700------------

2,235,200------------

Casino/Gaming (0.1%)200 Boyd Gaming Corp. ............................ 9.25 10/01/03 197,500



------------Chemicals: Agricultural (0.0%)

100 Scotts Co. - 144A* ........................... 8.625 01/15/09 96,500------------

Chemicals: Specialty (2.8%)6,960 Huntsman Polymers Corp. ...................... 11.75 12/01/04 7,029,600

175 Texas Petrochemicals Corp. ................... 11.125 07/01/06 148,750------------

7,178,350------------

Coal (0.1%)175 P&L Coal Holdings Corp. (Series B) ........... 8.875 05/15/08 173,250

------------Construction Materials (1.1%)

2,850 USG Corp. (Series B) ......................... 9.25 09/15/01 2,892,037------------

Consumer/Business Services (0.0%)100 American Business Information, Inc. .......... 9.50 06/15/08 82,000

------------</TABLE>


36



-------------------------------------------------------------------------------------------------------<S> <C> <C> <C> <C>

Containers/Packaging (0.2%)$ 225 Ball Corp. ................................. 7.75% 08/01/06 $ 217,125

125 Ball Corp. ................................. 8.25 08/01/08 120,312100 Consumers Packaging, Inc. .................. 9.75 02/01/07 20,000225 U.S. Can Corp. ............................. 10.125 10/15/06 242,719

------------600,156

------------Drugstore Chains (0.7%)

1,950 Thrifty PayLess Holdings, Inc. ............. 12.25 04/15/04 1,790,344------------

Electric Utilities (0.2%)100 CMS Energy Corp. ........................... 7.50 01/15/09 89,194113 Niagara Mohawk Power (Series F) ............ 7.625 10/01/05 114,330175 Niagara Mohawk Power (Series G) ............ 7.75 10/01/08 175,786125 Niagara Mohawk Power (Series H) ............ 8.50 \^\^ 07/01/10 100,640

------------479,950

------------Electrical Products (0.1%)

335 Communications & Power Industries,Inc. (Series B) ............................ 12.00 08/01/05 227,381

------------Engineering & Construction (0.1%)

225 Mastec Inc. (Series B) ..................... 7.75 02/01/08 213,750------------

Finance/Rental/Leasing (0.0%)25 Anthony Crane Rentals ...................... 10.375 08/01/08 12,750

------------Financial Conglomerates (0.0%)

75 GS Escrow Corp. ............................ 7.125 08/01/05 69,101------------

Food Distributors (0.0%)100 Di Giorgio Corp. ........................... 10.00 06/15/07 88,000

------------Food: Major Diversified (0.2%)

475 International Home Foods, Inc. ............. 10.375 11/01/06 508,250------------

Food: Specialty/Candy (0.0%)100 Mrs. Fields Original (Series B) ............ 10.125 12/01/04 87,000

------------Home Building (0.1%)

75 D.R. Horton Inc. ........................... 8.00 02/01/09 69,75050 Standard Pacific Corp. (Series A) .......... 8.00 02/15/08 46,250

290 Williams Scotsman, Inc. .................... 9.875 06/01/07 255,200



------------371,200

------------Home Furnishings (0.1%)

200 Westpoint Stevens, Inc. .................... 7.875 06/15/08 166,500------------

Hotels/Resorts/Cruiselines (0.1%)400 ITT Corp. (New) ............................ 7.375 11/15/15 356,228

------------</TABLE>


37



-------------------------------------------------------------------------------------------------------<S> <C> <C> <C> <C>

Industrial Specialties (0.0%)$ 125 Fibermark Inc. ............................ 9.375% 10/15/06 $ 123,750

------------Major Telecommunications (1.4%)

225 RCN Corp. ................................. 11.125\^\^ 10/15/07 114,7503,250 Sprint Spectrum L.P. ...................... 11.00 08/15/06 3,508,895

------------3,623,645

------------Media Conglomerates (0.8%)

2,000 Time Warner Entertainment Co. ............. 9.625 05/01/02 2,073,780------------

Medical/Nursing Services (2.0%)4,800 Healthsouth Corp. ......................... 9.50 04/01/01 4,788,000

225 Prime Medical Services Inc. ............... 8.75 04/01/08 202,500------------

4,990,500------------

Metal Fabrications (0.1%)200 International Wire Group (Series B) ....... 11.75 06/01/05 201,500100 Neenah Corp. (Series F) ................... 11.125 05/01/07 77,500

------------279,000

------------Miscellaneous Manufacturing (0.1%)

200 Ametek Inc. ............................... 7.20 07/15/08 183,008155 Insilco Corp. (Series B) .................. 12.00 08/15/07 154,225

------------337,233

------------Miscellaneous Commercial Services(0.2%)

250 Iron Mountain, Inc. ....................... 10.125 10/01/06 254,37575 Iron Mountain, Inc. ....................... 8.75 09/30/09 70,87575 Pierce Leahy Command Co. .................. 8.125 05/15/08 70,125

------------395,375

------------Oil & Gas Production (0.1%)

275 Magnum Hunter Resources ................... 10.00 06/01/07 270,875------------

Other Consumer Services (0.0%)100 Protection One Alarm Monitoring, Inc....... 7.375 08/15/05 70,000

------------Other Consumer Specialties (0.0%)

95 Boyds Collection Ltd. ..................... 9.00 05/15/08 90,250------------

Other Metals/Minerals (4.3%)10,500 Cyprus Amax Minerals Inc. ................. 10.125 04/01/02 10,867,500

------------Publishing: Books/Magazines (0.1%)

50 Primedia, Inc. ............................ 7.625 04/01/08 45,500250 Von Hoffman Press, Inc. - 144A* ........... 10.875 05/15/07 230,000

------------275,500



------------</TABLE>


38



----------------------------------------------------------------------------------------------------------<S> <C> <C> <C> <C>

Publishing: Newspapers (0.5%)$ 275 Garden State Newspapers (Series B) ........... 8.75% 10/01/09 $ 257,1251,000 Hollinger International Publishing, Inc....... 9.25 02/01/06 998,750

------------1,255,875

------------Pulp & Paper (0.0%)

125 Paperboard Industrial International Inc....... 8.375 09/15/07 105,000------------

Real Estate Development (0.1%)300 Forest City Enterprises ...................... 8.50 03/15/08 285,000

------------Recreational Products (0.0%)

125 CSC Holdings, Inc. ........................... 7.625 07/15/18 113,058------------

Regional Banks (0.1%)50 Chevy Chase Savings Bank ..................... 9.25 12/01/05 47,750

100 Chevy Chase Savings Bank, F.S.B. ............. 9.25 12/01/08 92,000------------

139,750------------

Specialty Stores (0.1%)175 Michaels Stores, Inc. ........................ 10.875 06/15/06 180,250175 Zale Corp. (Series B) ........................ 8.50 10/01/07 168,000

------------348,250

------------Specialty Telecommunications (0.1%)

325 Level 3 Communications, Inc. ................. 9.125 05/01/08 280,719------------

Textiles (1.7%)4,300 Dan River, Inc. .............................. 10.125 12/15/03 4,214,000

100 Polymer Group Inc. (Series B) ................ 8.75 03/01/08 79,000------------

4,293,000------------

Wholesale Distributors (0.0%)300 Home Interiors & Gifts ....................... 10.125 06/01/08 89,625

------------TOTAL CORPORATE BONDS(Cost $62,228,627)...................................................... 57,822,548

------------SHORT-TERM INVESTMENT (1.1%)REPURCHASE AGREEMENT

2,825 The Bank of New York (dated 09/29/00;proceeds $2,826,003) (b)(Cost $2,824,532)............................. 6.25 10/02/00 2,824,532

------------TOTAL INVESTMENTS(Cost $259,111,649) (c).................................. 98.6% 249,150,514OTHER ASSETS IN EXCESS OF LIABILITIES ................... 1.4 3,441,116

----- ------------NET ASSETS .............................................. 100.0% $252,591,630

===== ============</TABLE>


39




---------------------* Resale is restricted to qualified institutional investors.+ Consists of more than one class of securities traded together as a unit;

stocks with attached warrants.++ Currently a zero coupon bond that will pay interest at the rate shown at a

future specified date.(a) Non-income producing security; bond in default.(b) Collateralized by $2,813,904 Federal Home Loan Mortgage Corp.

6.875% due 01/15/05 valued at $2,881,025.(c) The aggregate cost for federal income tax purposes approximates the

aggregate cost for book purposes. The aggregate gross unrealizedappreciation is $20,533,973 and the aggregate gross unrealizeddepreciation is $30,495,108, resulting in net unrealizeddepreciation of $9,961,135.


40

MORGAN STANLEY DEAN WITTER INCOME BUILDER FUNDFINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIESSeptember 30, 2000

<TABLE><CAPTION>ASSETS:<S> <C>Investments in securities, at value

(cost $259,111,649).............................................. $249,150,514Receivable for:

Interest ....................................................... 2,531,181Investments sold ............................................... 738,076Dividends ...................................................... 719,822Shares of beneficial interest sold ............................. 28,948

Deferred organizational expenses .................................. 24,048Prepaid expenses and other assets ................................. 26,694

------------TOTAL ASSETS ................................................... 253,219,283

------------LIABILITIES:Payable for:

Plan of distribution fee ....................................... 208,470Shares of beneficial interest repurchased ...................... 169,938Investment management fee ...................................... 158,131

Accrued expenses and other payables ............................... 91,114------------

TOTAL LIABILITIES .............................................. 627,653------------

NET ASSETS ..................................................... $252,591,630============

COMPOSITION OF NET ASSETS:Paid-in-capital ................................................... $279,790,552Net unrealized depreciation ....................................... (9,961,135)Accumulated undistributed net investment income ................... 3,007,106Accumulated net realized loss ..................................... (20,244,893)

------------NET ASSETS ..................................................... $252,591,630

============CLASS A SHARES:Net Assets ........................................................ $2,871,709Shares Outstanding (unlimited authorized, $.01 par value).......... 277,157

NET ASSET VALUE PER SHARE ...................................... $10.36======

MAXIMUM OFFERING PRICE PER SHARE,(net asset value plus 5.54% of net asset value) ................ $10.93

======CLASS B SHARES:Net Assets ........................................................ $223,413,016Shares Outstanding (unlimited authorized, $.01 par value) ......... 21,554,281


CLASS C SHARES:Net Assets ........................................................ $25,594,439



Shares Outstanding (unlimited authorized, $.01 par value) ......... 2,474,938NET ASSET VALUE PER SHARE ...................................... $10.34

======CLASS D SHARES:Net Assets ........................................................ $712,466Shares Outstanding (unlimited authorized, $.01 par value) ......... 68,780


</TABLE>


41

MORGAN STANLEY DEAN WITTER INCOME BUILDER FUNDFINANCIAL STATEMENTS, continued

STATEMENT OF OPERATIONSFor the year ended September 30, 2000

NET INVESTMENT INCOME:INCOMEDividends ......................................... $ 9,791,902Interest .......................................... 9,729,479

-----------TOTAL INCOME ................................... 19,521,381

-----------EXPENSESPlan of distribution fee (Class A shares) ......... 17,265Plan of distribution fee (Class B shares) ......... 2,776,290Plan of distribution fee (Class C shares) ......... 322,264Investment management fee ......................... 2,388,886Transfer agent fees and expenses .................. 335,279Shareholder reports and notices ................... 89,142Registration fees ................................. 86,013Professional fees ................................. 79,464Custodian fees .................................... 35,237Organizational expenses ........................... 32,779Trustees' fees and expenses ....................... 16,883Other ............................................. 22,875

-----------TOTAL EXPENSES ................................. 6,202,377

-----------NET INVESTMENT INCOME .......................... 13,319,004

-----------NET REALIZED AND UNREALIZED GAIN (LOSS):Net realized loss ................................. (18,829,120)Net change in unrealized depreciation ............. 10,092,703

-----------NET LOSS ....................................... (8,736,417)

-----------NET INCREASE ...................................... $ 4,582,587

===========


42

MORGAN STANLEY DEAN WITTER INCOME BUILDER FUNDFINANCIAL STATEMENTS, continued

STATEMENT OF CHANGES IN NET ASSETS

<TABLE><CAPTION>

FOR THE YEAR FOR THE YEARENDED ENDED

SEPTEMBER 30, 2000 SEPTEMBER 30, 1999-------------------- -------------------

<S> <C> <C>INCREASE (DECREASE) IN NET ASSETS:OPERATIONS:Net investment income ................................ $ 13,319,004 $ 18,480,801Net realized gain (loss) ............................. (18,829,120) 15,975,924Net change in unrealized depreciation ................ 10,092,703 3,774,240



------------- -------------NET INCREASE ...................................... 4,582,587 38,230,965

------------- -------------DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:Net investment income

Class A shares .................................... (259,840) (646,373)Class B shares .................................... (11,009,664) (17,881,658)Class C shares .................................... (1,295,836) (604,652)Class D shares .................................... (66,785) (76,726)

Net realized gainClass A shares .................................... (425,264) (671,285)Class B shares .................................... (11,062,251) (24,998,743)Class C shares .................................... (1,329,137) (346,036)Class D shares .................................... (25,446) (40,395)

------------- -------------TOTAL DIVIDENDS AND DISTRIBUTIONS ................. (25,474,223) (45,265,868)

------------- -------------Net decrease from transactions in shares of beneficial

interest ........................................... (128,727,015) (23,984,846)------------- -------------

NET DECREASE ...................................... (149,618,651) (31,019,749)NET ASSETS:Beginning of period .................................. 402,210,281 433,230,030

------------- -------------END OF PERIOD(Including undistributed net investment income of$3,007,106 and $2,449,140, respectively)........... $ 252,591,630 $ 402,210,281

============= ==============</TABLE>


43

MORGAN STANLEY DEAN WITTER INCOME BUILDER FUNDNOTES TO FINANCIAL STATEMENTS September 30, 2000

1. ORGANIZATION AND ACCOUNTING POLICIES

Morgan Stanley Dean Witter Income Builder Fund (the "Fund") is registered underthe Investment Company Act of 1940, as amended (the "Act"), as a diversified,open-end management investment company. The Fund's primary investment objectiveis to seek reasonable income and, as a secondary objective, growth of capital.The Fund seeks to achieve its objective by investing primarily inincome-producing equity securities, including common and preferred stocks aswell as convertible securities. The Fund was organized as a Massachusettsbusiness trust on March 21, 1996 and commenced operations on June 26, 1996. OnJuly 28, 1997, the Fund converted to a multiple class share structure.

The Fund offers Class A shares, Class B shares, Class C shares and Class Dshares. The four classes are substantially the same except that most Class Ashares are subject to a sales charge imposed at the time of purchase and someClass A shares, and most Class B shares and Class C shares are subject to acontingent deferred sales charge imposed on shares redeemed within one year,six years and one year, respectively. Class D shares are not subject to a salescharge. Additionally, Class A shares, Class B shares and Class C shares incurdistribution expenses.

The preparation of financial statements in accordance with generally acceptedaccounting principles requires management to make estimates and assumptionsthat affect the reported amounts and disclosures. Actual results could differfrom those estimates.

The following is a summary of significant accounting policies:

A. VALUATION OF INVESTMENTS - (1) an equity portfolio security listed or tradedon the New York or American Stock Exchange, NASDAQ, or other exchange is valuedat its latest sale price, prior to the time when assets are valued; if therewere no sales that day, the security is valued at the latest bid price (incases where securities are traded on more than one exchange; the securities arevalued on the exchange designated as the primary market pursuant to proceduresadopted by the Trustees); (2) all other portfolio securities for whichover-the-counter market quotations are readily available are valued at thelatest available bid price; (3) when market quotations are not readilyavailable, including circumstances under which it is determined by MorganStanley Dean Witter Advisors Inc. (the "Investment Manager"), that sale or bidprices are not reflective of a security's market value, portfolio securitiesare valued at their fair value as determined in good faith under procedures



established by and under the general supervision of the Trustees (valuation ofdebt securities for which market quotations are not readily available may bebased upon current market prices of securities which are comparable in coupon,rating and maturity or an appropriate matrix utilizing similar factors); (4)certain portfolio securities may be valued by an outside pricing serviceapproved by the Trustees. The pricing service may utilize a matrix systemincorporating

44

MORGAN STANLEY DEAN WITTER INCOME BUILDER FUNDNOTES TO FINANCIAL STATEMENTS September 30, 2000, continued

security quality, maturity and coupon as the evaluation model parameters,and/or research and evaluations by its staff, including review of broker-dealermarket price quotations, if available, in determining what it believes is thefair valuation of the securities valued by such pricing service; and (5)short-term debt securities having a maturity date of more than sixty days attime of purchase are valued on a mark-to-market basis until sixty days prior tomaturity and thereafter at amortized cost based on their value on the 61st day.Short-term debt securities having a maturity date of sixty days or less at thetime of purchase are valued at amortized cost.

B. ACCOUNTING FOR INVESTMENTS - Security transactions are accounted for on thetrade date (date the order to buy or sell is executed). Realized gains andlosses on security transactions are determined by the identified cost method.Dividend income and other distributions are recorded on the ex-dividend dateexcept for certain dividends on foreign securities which are recorded as soonas the Fund is informed after the ex-dividend date. Discounts are accreted overthe life of the respective securities. Interest income is accrued daily.

C. MULTIPLE CLASS ALLOCATIONS - Investment income, expenses (other thandistribution fees), and realized and unrealized gains and losses are allocatedto each class of shares based upon the relative net asset value on the datesuch items are recognized. Distribution fees are charged directly to therespective class.

D. FEDERAL INCOME TAX STATUS - It is the Fund's policy to comply with therequirements of the Internal Revenue Code applicable to regulated investmentcompanies and to distribute all of its taxable income to its shareholders.Accordingly, no federal income tax provision is required.

E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - The Fund records dividends anddistributions to its shareholders on the ex-dividend date. The amounts ofdividends and distributions from net investment income and net realized capitalgains are determined in accordance with federal income tax regulations whichmay differ from generally accepted accounting principles. These "book/tax"differences are either considered temporary or permanent in nature. To theextent these differences are permanent in nature, such amounts are reclassifiedwithin the capital accounts based on their federal tax-basis treatment;temporary differences do not require reclassification. Dividends anddistributions which exceed net investment income and net realized capital gainsfor tax purposes are reported as distributions of paid-in-capital.

F. ORGANIZATIONAL EXPENSES - The Investment Manager paid the organizationalexpenses of the Fund in the amount of approximately $164,000 which have beenreimbursed for the full amount thereof. Such expenses have been deferred andare being amortized on the straight-line method over a period not to exceedfive years from the commencement of operations.

45


2. INVESTMENT MANAGEMENT AGREEMENT

Pursuant to an Investment Management Agreement the Fund pays the InvestmentManager a management fee, accrued daily and payable monthly, by applying thefollowing annual rates to the net assets of the Fund determined at the close ofeach business day: 0.75% to the portion of daily net assets not exceeding $500million and 0.725% to the portion of daily net assets in excess of $500million.



3. PLAN OF DISTRIBUTION

Shares of the Fund are distributed by Morgan Stanley Dean Witter DistributorsInc. (the "Distributor"), an affiliate of the Investment Manager. The Fund hasadopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under theAct. The Plan provides that the Fund will pay the Distributor a fee which isaccrued daily and paid monthly at the following annual rates: (i) Class A - upto 0.25% of the average daily net assets of Class A; (ii) Class B - 1.0% of thelesser of: (a) the average daily aggregate gross sales of the Class B sharessince the inception of the Fund (not including reinvestment of dividend orcapital gain distributions) less the average daily aggregate net asset value ofthe Class B shares redeemed since the Fund's inception upon which a contingentdeferred sales charge has been imposed or waived; or (b) the average daily netassets of Class B; and (iii) Class C - up to 1.0% of the average daily netassets of Class C.

In the case of Class B shares, provided that the Plan continues in effect, anycumulative expenses incurred by the Distributor but not yet recovered may berecovered through the payment of future distribution fees from the Fundpursuant to the Plan and contingent deferred sales charges paid by investorsupon redemption of Class B shares. Although there is no legal obligation forthe Fund to pay expenses incurred in excess of payments made to the Distributorunder the Plan and the proceeds of contingent deferred sales charges paid byinvestors upon redemption of shares, if for any reason the Plan is terminated,the Trustees will consider at that time the manner in which to treat suchexpenses. The Distributor has advised the Fund that such excess amounts totaled$16,457,049 at September 30, 2000.

In the case of Class A shares and Class C shares, expenses incurred pursuant tothe Plan in any calendar year in excess of 0.25% or 1.0% of the average dailynet assets of Class A or Class C, respectively, will not be reimbursed by theFund through payments in any subsequent year, except that expenses representinga gross sales credit to Morgan Stanley Dean Witter Financial Advisors or otherselected broker-dealer representatives may be reimbursed in the subsequentcalendar year. For the year ended September 30, 2000, the distribution fee wasaccrued for Class A shares and Class C shares at the annual rate of 0.24% and0.99%, respectively.

46


The Distributor has informed the Fund that for the year ended September 30,2000, it received contingent deferred sales charges from certain redemptions ofthe Fund's Class B shares and Class C shares of $879,018 and $1,420,respectively and received $13,117 in front-end sales charges from sales of theFund's Class A shares. The respective shareholders pay such charges which arenot an expense of the Fund.

4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES

The cost of purchases and proceeds from sales of portfolio securities,excluding short-term investments, for the year ended September 30, 2000aggregated $119,776,502 and $258,287,455, respectively.

For the year ended September 30, 2000, the Fund incurred $128,749 in brokeragecommissions with Dean Witter Reynolds Inc. ("DWR"), an affiliate of theInvestment Manager and Distributor, for portfolio transactions executed onbehalf of the Fund. At September 30, 2000, the Fund's receivable forinvestments sold included unsettled trades with DWR of $279,841.

For the year ended September 30, 2000, the Fund incurred $17,425 in brokeragecommissions with Morgan Stanley & Co., Inc., an affiliate of the InvestmentManager and Distributor, for portfolio transactions executed on behalf of theFund.

Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Managerand Distributor, is the Fund's transfer agent.

5. FEDERAL INCOME TAX STATUS

At September 30, 2000, the Fund had a net capital loss carryover ofapproximately $4,600,000 which will be available through September 30, 2008 tooffset future capital gains to the extent provided by regulations.



Capital losses incurred after October 31 ("post-October" losses) within thetaxable year are deemed to arise on the first business day of the Fund's nexttaxable year. The Fund incurred and will elect to defer net capital losses ofapproximately $14,902,000 during fiscal 2000.

As of September 30, 2000, the Fund had temporary book/tax differences primarilyattributable to post-October losses and capital loss deferrals on wash salesand permanent book/tax differences primarily attributable to a dividendredesignation and tax adjustments on real estate investment trusts held by theFund. To reflect reclassifications arising from the permanent differences,accumulated undistributed net investment income was charged $128,913,paid-in-capital was charged $32,799 and accumulated net realized gain wascredited $161,712.

47


6. SHARES OF BENEFICIAL INTEREST

Transactions in shares of beneficial interest were as follows:

<TABLE><CAPTION>

FOR THE YEAR FOR THE YEARENDED ENDED

SEPTEMBER 30, 2000 SEPTEMBER 30, 1999---------------------------------- ----------------------------------

SHARES AMOUNT SHARES AMOUNT--------------- ------------------ ---------------- -----------------

<S> <C> <C> <C> <C>CLASS A SHARESSold .................................................. 165,350 $ 1,746,960 373,161 $ 4,311,270Reinvestment of dividends and distributions ........... 49,956 516,422 72,926 807,614Shares issued in connection with the acquisition ofTCW/DW Income and Growth Fund ........................ - - 8,607 101,458

Redeemed .............................................. (1,080,681) (11,152,505) (213,154) (2,454,803)---------- -------------- -------- -------------

Net increase (decrease) - Class A ..................... (865,375) (8,889,123) 241,540 2,765,539---------- -------------- -------- -------------

CLASS B SHARESSold .................................................. 2,079,343 21,898,681 3,043,825 35,162,596Reinvestment of dividends and distributions ........... 1,715,995 17,730,597 3,152,355 34,981,362Shares issued in connection with the acquisition ofTCW/DW Income and Growth Fund ........................ - - 723,832 8,541,094

Redeemed .............................................. (13,931,822) (146,329,936) (12,509,897) (143,652,130)----------- -------------- ----------- -------------

Net decrease - Class B ................................ (10,136,484) (106,700,658) (5,589,885) (64,967,078)----------- -------------- ----------- -------------

CLASS C SHARESSold .................................................. 86,384 904,529 114,511 1,316,245Reinvestment of dividends and distributions ........... 216,767 2,235,520 72,635 801,880Shares issued in connection with the acquisition ofTCW/DW Income and Growth Fund ........................ - - 3,554,666 41,847,822

Redeemed .............................................. (1,556,094) (16,250,626) (518,349) (5,997,769)----------- -------------- ----------- -------------

Net increase (decrease) - Class C ..................... (1,252,943) (13,110,577) 3,223,463 37,968,178----------- -------------- ----------- -------------

CLASS D SHARESSold .................................................. 214,024 2,220,160 449,722 5,167,272Reinvestment of dividends and distributions ........... 2,726 28,226 4,118 45,524Redeemed .............................................. (215,266) (2,275,043) (441,802) (4,964,281)

----------- -------------- ----------- -------------Net increase (decrease) - Class D ..................... 1,484 (26,657) 12,038 248,515

----------- -------------- ----------- -------------Net decrease in Fund .................................. (12,253,318) $ (128,727,015) (2,112,844) $ (23,984,846)

=========== ============== =========== =============</TABLE>

48




NOTES TO FINANCIAL STATEMENTS September 30, 2000, continued

7. FUND ACQUISITION

On June 28, 1999, the Fund acquired all the net assets of TCW/DW Income andGrowth Fund ("Income and Growth") based on the respective valuations as of theclose of business June 25, 1999, pursuant to a plan of reorganization approvedby the shareholders of Income and Growth on June 8, 1999. The acquisition wasaccomplished by a tax-free exchange of 8,607 Class A shares of the Fund at anet asset value of $11.79 per share for 9,404 Class A shares of Income andGrowth; 723,832 Class B shares of the Fund at a net asset value of $11.80 pershare for 791,586 Class B shares of Income and Growth; and 3,554,666 Class Cshares of the Fund at a net asset value of $11.77 per share for 3,873,928 ClassC shares of Income and Growth. The net assets of the Fund and Income and Growthimmediately before the acquisition were $402,078,443 and $50,615,496,respectively, including unrealized appreciation of $2,147,861 for Income andGrowth. Immediately after the acquisition, the combined net assets of the Fundamounted to $452,693,939.

49

MORGAN STANLEY DEAN WITTER INCOME BUILDER FUNDFINANCIAL HIGHLIGHTS

Selected ratios and per share data for a share of beneficial interestoutstanding throughout each period:

<TABLE><CAPTION>


------------------------------------------------ THROUGH2000 1999 1998 SEPTEMBER 30, 1997

-----------------------------------------------------------------------------------------------------------------------------------<S> <C> <C> <C> <C>CLASS A SHARES++SELECTED PER SHARE DATA:Net asset value, beginning of period ................... $10.98 $11.18 $12.81 $12.20

------ ------ ------ ------Income (loss) from investment operations:Net investment income ................................. 0.53 0.58 0.59 0.12Net realized and unrealized gain (loss) ............... (0.26) 0.54 (1.12) 0.61

------ ------ ------ ------Total income (loss) from investment operations ......... 0.27 1.12 (0.53) 0.73

------ ------ ------ ------Less dividends and distributions from:Net investment income ................................. (0.51) (0.62) (0.51) (0.12)Net realized gain ..................................... (0.38) (0.70) (0.59) --

------ ------ ------ ------Total dividends and distributions ...................... (0.89) (1.32) (1.10) (0.12)

------ ------ ------ ------Net asset value, end of period ......................... $10.36 $10.98 $11.18 $12.81

====== ====== ====== ======TOTAL RETURN+ ......................................... 2.71% 10.15% (4.67)% 5.95%(1)RATIOS TO AVERAGE NET ASSETS:Expenses ............................................... 1.21%(3) 1.17%(3) 1.17 %(3) 1.28%(2)Net investment income .................................. 4.92%(3) 5.02%(3) 4.61 %(3) 5.77%(2)SUPPLEMENTAL DATA:Net assets, end of period, in thousands ................ $2,872 $12,541 $10,073 $1,047Portfolio turnover rate ................................ 38% 36% 58 % 74%</TABLE>

-------------* The date shares were first issued.



(1) Not annualized.

(2) Annualized.





50

MORGAN STANLEY DEAN WITTER INCOME BUILDER FUNDFINANCIAL HIGHLIGHTS, continued

<TABLE><CAPTION>

FOR THE YEAR ENDED SEPTEMBER 30,-------------------------------------------------------------

2000# 1999# 1998++ 1997**++----------------------------------------------------------------------------------------------------------------------<S> <C> <C> <C> <C>CLASS B SHARESSELECTED PER SHARE DATA:Net asset value, beginning of period ................... $10.98 $11.18 $12.81 $10.23



------ ------ ------ ------Less dividends and distributions from:Net investment income ................................. (0.44) (0.53) (0.43) (0.41)Net realized gain ..................................... (0.38) (0.70) (0.59) (0.01)



====== ====== ====== ======TOTAL RETURN+ ......................................... 2.00% 9.31% (5.29)% 29.83%RATIOS TO AVERAGE NET ASSETS:Expenses ............................................... 1.97%(3) 1.90%(3) 1.80 %(3) 1.85%Net investment income .................................. 4.16%(3) 4.29%(3) 3.98 %(3) 4.16%SUPPLEMENTAL DATA:Net assets, end of period, in thousands ................ $223,413 $348,070 $416,909 $358,973Portfolio turnover rate ................................ 38% 36% 58 % 74%

<CAPTION>FOR THE PERIODJUNE 26, 1996*

THROUGHSEPTEMBER 30, 1996

------------------------------------------------------------------------------<S> <C>CLASS B SHARESSELECTED PER SHARE DATA:Net asset value, beginning of period ................... $10.00

------Income (loss) from investment operations:Net investment income ................................. 0.08Net realized and unrealized gain (loss) ............... 0.23

------Total income (loss) from investment operations ......... 0.31

------Less dividends and distributions from:Net investment income ................................. (0.08)Net realized gain ..................................... --

------Total dividends and distributions ...................... (0.08)

------Net asset value, end of period ......................... $10.23

======TOTAL RETURN+ .......................................... 3.10%(1)RATIOS TO AVERAGE NET ASSETS:Expenses ............................................... 2.25%(2)Net investment income .................................. 3.60%(2)SUPPLEMENTAL DATA:Net assets, end of period, in thousands ................ $148,142Portfolio turnover rate ................................ 7%(1)</TABLE>

-------------* Commencement of operations.



** Prior to July 28, 1997 the Fund issued one class of shares. All shares ofthe Fund held prior to that date have been designated Class B shares.


+ Does not reflect the deduction of sales charge. Calculated based on the netasset value as of the last business day of the period.

(1) Not annualized.

(2) Annualized.



51


<TABLE><CAPTION>



-----------------------------------------------------------------------------------------------------------------------------------<S> <C> <C> <C> <C>CLASS C SHARES++SELECTED PER SHARE DATA:Net asset value, beginning of period ................... $10.96 $11.16 $12.80 $12.20






====== ======TOTAL RETURN+ .......................................... 2.01% 9.38% (5.38)% 5.79%(1)RATIOS TO AVERAGE NET ASSETS:Expenses ............................................... 1.96%(3) 1.90%(3) 1.92 %(3) 1.98%(2)Net investment income .................................. 4.17%(3) 4.29%(3) 3.86 %(3) 4.61%(2)SUPPLEMENTAL DATA:Net assets, end of period, in thousands ................ $ 25,594 $ 40,859 $5,630 $987Portfolio turnover rate ................................ 38% 36% 58 % 74%</TABLE>



+ Does not reflect the deduction of sales charge. Calculated based on the netasset value as of the last business day of the period.

(1) Not annualized.

(2) Annualized.



52




<TABLE><CAPTION>



-----------------------------------------------------------------------------------------------------------------------------------<S> <C> <C> <C> <C>CLASS D SHARES++SELECTED PER SHARE DATA:Net asset value, beginning of period ................... $10.99 $11.18 $12.82 $12.20






====== ====== ======TOTAL RETURN+ .......................................... 2.98% 10.51% (4.46)% 5.98%(1)RATIOS TO AVERAGE NET ASSETS:Expenses ............................................... 0.97%(3) 0.93%(3) 0.92 %(3) 0.96%(2)Net investment income .................................. 5.16%(3) 5.26%(3) 4.86 %(3) 5.41%(2)SUPPLEMENTAL DATA:Net assets, end of period, in thousands ................ $712 $740 $618 $21Portfolio turnover rate ................................ 38% 36% 58 % 74%</TABLE>



+ Calculated based on the net asset value as of the last business day of theperiod.

(1) Not annualized.

(2) Annualized.



53

MORGAN STANLEY DEAN WITTER INCOME BUILDER FUNDINDEPENDENT AUDITORS' REPORT

TO THE SHAREHOLDERS AND BOARD OF TRUSTEESOF MORGAN STANLEY DEAN WITTER INCOME BUILDER FUND:

We have audited the accompanying statement of assets and liabilities of MorganStanley Dean Witter Income Builder Fund (the "Fund"), including the portfolioof investments, as of September 30, 2000, and the related statements ofoperations and changes in net assets, and the financial highlights for the yearthen ended. These financial statements and financial highlights are theresponsibility of the Fund's management. Our responsibility is to express anopinion on these financial statements and financial highlights based on ouraudit. The statement of changes in net assets for the year ended September 30,1999 and the financial highlights for each of the respective stated periodsended September 30, 1999 were audited by other independent accountants whose



report, dated November 9, 1999, expressed an unqualified opinion on thatstatement and financial highlights.

We conducted our audit in accordance with auditing standards generally acceptedin the United States of America. Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financialstatements and financial highlights are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. Our procedures included confirmationof securities owned as of September 30, 2000, by correspondence with thecustodian. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides areasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred toabove present fairly, in all material respects, the financial position ofMorgan Stanley Dean Witter Income Builder Fund as of September 30, 2000, theresults of its operations, the changes in its net assets, and the financialhighlights for the year then ended, in conformity with accounting principlesgenerally accepted in the United States of America.

Deloitte & Touche LLPNew York, New YorkNovember 9, 2000

2000 FEDERAL TAX NOTICE (unaudited)

During the fiscal year ended July 31, 2000, the Fund paid to itsshareholders $0.37 per share from long-term capital gains. For suchperiod, 70.11% of the income dividends paid qualified for the dividendsreceived deduction available to corporations.

54

MORGAN STANLEY DEAN WITTER INCOME BUILDER FUNDCHANGE IN INDEPENDENT ACCOUNTANTS

On July 1, 2000 PricewaterhouseCoopers LLP resigned as independent accountantsof the Fund.

The reports of PricewaterhouseCoopers LLP on the financial statements of theFund for the past two fiscal years contained no adverse opinion or disclaimerof opinion and were not qualified or modified as to uncertainty, audit scope oraccounting principle.

In connection with its audits for the two most recent fiscal years and throughJuly 1, 2000, there have been no disagreements with PricewaterhouseCoopers LLPon any matter of accounting principles or practices, financial statementdisclosure, or auditing scope or procedure, which disagreements if not resolvedto the satisfaction of PricewaterhouseCoopers LLP would have caused them tomake reference thereto in their report on the financial statements for suchyears.

The Fund, with the approval of its Board of Trustees and its Audit Committee,engaged Deloitte & Touche LLP as its new independent accountants as of July 1,2000.

55

MORGAN STANLEY DEAN WITTER INCOME BUILDER FUNDREPORT OF INDEPENDENT ACCOUNTANTS

TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OFMORGAN STANLEY DEAN WITTER INCOME BUILDER FUND

In our opinion, the statement of changes in net assets and the financialhighlights of Morgan Stanley Dean Witter Income Builder Fund (the "Fund")(notpresented separately herein) present fairly, in all material respects, the



changes in its net assets for the year ended September 30, 1999 and thefinancial highlights for each of the years in the period ended September 30,1999, in conformity with generally accepted accounting principles. Thisfinancial statement and financial highlights (hereafter referred to as"financial statements") are the responsibility of the Fund's management; ourresponsibility is to express an opinion on these financial statements based onour audits. We conducted our audits of these financial statements in accordancewith generally accepted auditing standards which require that we plan andperform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on atest basis, evidence supporting the amounts and disclosures in the financialstatements, assessing the accounting principles used and significant estimatesmade by management, and evaluating the overall financial statementpresentation. We believe that our audits provide a reasonable basis for theopinion expressed above. We have not audited the financial statements orfinancial highlights of the Fund for any period subsequent to September 30,1999.

PricewaterhouseCoopers LLP1177 Avenue of the AmericasNew York, New York 10036November 9, 1999

56

MORGAN STANLEY DEAN WITTER INCOME BUILDER FUNDPART C OTHER INFORMATION

Item 23. Exhibits------- -------------------------------------------------------------------1 (a). Declaration of Trust of the Registrant, dated March 20, 1996, is

incorporated by reference to Exhibit 1 of the Initial RegistrationStatement on Form N-1A, filed on March 27, 1996.

1 (b). Instrument Establishing and Designating Additional Classes, datedJuly 28, 1997, is incorporated by reference to Exhibit 1 ofPost-Effective Amendment No. 2 to the Registration Statement onForm N-1A, filed on July 23, 1997.

1 (c). Amendment to the Declaration of Trust of the Registrant, dated June22, 1998, is incorporated by reference to Exhibit 1 ofPost-Effective Amendment No. 4 to the Registration Statement onForm N-1A, filed on November 25, 1998.

2. Amended and Restated By-Laws of the Registrant, dated May 1, 1999,is incorporated by reference to Exhibit 2 of Post-EffectiveAmendment No. 5 to the Registration Statement on Form N-1A, filedon September 24, 1999.

3. Not Applicable.

4. Amended Investment Management Agreement between the Registrant andMorgan Stanley Dean Witter Advisors Inc., dated May 1, 1998, isincorporated by reference to Exhibit 5 of Post-Effective AmendmentNo. 4 to the Registration Statement on Form N-1A, filed on November25, 1998.

5 (a). Amended Distribution Agreement, dated June 22, 1998, isincorporated by reference to Exhibit 6(a) of Post-EffectiveAmendment No. 4 to the Registration Statement on Form N-1A, filedon November 25, 1998.

5 (b). Selected Dealer Agreement between Morgan Stanley Dean WitterDistributors Inc. and Dean Witter Reynolds Inc., is incorporated byreference to Exhibit 6(b) of Pre-Effective Amendment No. 1 to theRegistration Statement on Form N-1A, filed on April 29, 1996.

5 (c). Omnibus Selected Dealer Agreement between Morgan Stanley DeanWitter Distributors Inc. and National Financial ServicesCorporation, dated October 17, 1998, is incorporated by referenceto Exhibit 6(b) of Post-Effective Amendment No. 4 to theRegistration Statement on Form N-1A, filed on November 25, 1998.

6. Not Applicable.

7. Custody Agreement between The Bank of New York and the Registrantis incorporated by reference to Exhibit 9 of Pre-Effective



Amendment No. 1 to the Registration Statement on Form N-1A, filedon April 29, 1996.

1

8 (a). Amended and Restated Transfer Agency and Service Agreement betweenthe Registrant and Morgan Stanley Dean Witter Trust FSB, datedSeptember 1, 2000, filed herein.

8 (b). Amended Services Agreement between Morgan Stanley Dean WitterAdvisors Inc. and Morgan Stanley Dean Witter Services CompanyInc.,, dated June 22, 1998, is incorporated by reference to Exhibit9 of Post-Effective Amendment No. 4 to the Registration Statementon Form N-1A, filed on November 25, 1998.

9 (a). Opinion of Sheldon Curtis, Esq., dated April 22, 1996, isincorporated by reference to Exhibit 10(a) of Pre-EffectiveAmendment No. 1 to the Registration Statement on Form N-1A, filedon April 29, 1996.

9 (b). Opinion of Lane, Altman & Owens LLP, Massachusetts Counsel, datedApril 22, 1996, is incorporated by reference to Exhibit 10(b) ofPre-Effective Amendment No. 1 to the Registration Statement on FormN-1A, filed on April 29, 1996.

10 (a). Consent of Independent Auditors, filed herein.

10 (b). Consent of PricewaterhouseCoopers LLP, filed herein.

11. Not Applicable.

12. Not Applicable.

13. Amended and Restated Plan of Distribution pursuant to Rule 12b-1between the Registrant and Morgan Stanley Dean Witter DistributorsInc., dated July 28, 1997, is incorporated by reference to Exhibit15 of Post-Effective Amendment No. 2 to the Registration Statementon Form N-1A, filed on July 23, 1997.

14. Amended Multi-Class Plan pursuant to Rule 18f-3, dated August 15,2000, filed herein.

16. (a) Code of Ethics of Morgan Stanley Dean Witter Advisors Inc., MorganStanley Dean Witter Services Company Inc. and Morgan Stanley DeanWitter Distributors Inc., filed herein.

16. (b) Code of Ethics of the Morgan Stanley Dean Witter Funds, filedherein.

Other Powers of Attorney are incorporated by reference to Exhibit (Other)of Pre-Effective Amendment No. 1 to the Registration Statement onForm N-1A, filed on April 29, 1996 and Exhibit (Other) ofPost-Effective Amendment No. 3 to the Registration Statement onForm N-1A, filed on November 25, 1997. Power of Attorney for JamesF. Higgins, filed herein.

2

Item 24. Persons Controlled by or Under Common Control with the Fund.------------------------------------------------------------

None

Item 25. Indemnification.----------------

Pursuant to Section 5.3 of the Registrant's Declaration of Trust and underSection 4.8 of the Registrant's By-Laws, the indemnification of the Registrant'strustees, officers, employees and agents is permitted if it is determined thatthey acted under the belief that their actions were in or not opposed to thebest interest of the Registrant, and, with respect to any criminal proceeding,they had reasonable cause to believe their conduct was not unlawful. Inaddition, indemnification is permitted only if it is determined that the actionsin question did not render them liable by reason of willful misfeasance, badfaith or gross negligence in the performance of their duties or by reason ofreckless disregard of their obligations and duties to the Registrant. Trustees,officers, employees and agents will be indemnified for the expense of litigationif it is determined that they are entitled to indemnification against anyliability established in such litigation. The Registrant may also advance moneyfor these expenses provided that they give their undertakings to repay theRegistrant unless their conduct is later determined to permit indemnification.



Pursuant to Section 5.2 of the Registrant's Declaration of Trust andparagraph 8 of the Registrant's Investment Management Agreement, neither theInvestment Manager nor any trustee, officer, employee or agent of the Registrantshall be liable for any action or failure to act, except in the case of badfaith, willful misfeasance, gross negligence or reckless disregard of duties tothe Registrant.

Insofar as indemnification for liabilities arising under the Securities Actof 1933 (the "Act") may be permitted to trustees, officers and controllingpersons of the Registrant pursuant to the foregoing provisions or otherwise, theRegistrant has been advised that in the opinion of the Securities and ExchangeCommission such indemnification is against public policy as expressed in the Actand is, therefore, unenforceable. In the event that a claim for indemnificationagainst such liabilities (other than the payment by the Registrant of expensesincurred or paid by a trustee, officer, or controlling person of the Registrantin connection with the successful defense of any action, suit or proceeding) isasserted against the Registrant by such trustee, officer or controlling personin connection with the shares being registered, the Registrant will, unless inthe opinion of its counsel the matter has been settled by controlling precedent,submit to a court of appropriate jurisdiction the question whether suchindemnification by it is against public policy as expressed in the Act, and willbe governed by the final adjudication of such issue.

The Registrant hereby undertakes that it will apply the indemnificationprovision of its by-laws in a manner consistent with Release 11330 of theSecurities and Exchange Commission under the Investment Company Act of 1940, solong as the interpretation of Sections 17(h) and 17(i) of such Act remains ineffect.

Registrant, in conjunction with the Investment Manager, Registrant'sTrustees, and other registered investment management companies managed by theInvestment Manager, maintains insurance on behalf of any person who is or was aTrustee, officer, employee, or agent of Registrant, or who is or was serving atthe request of Registrant as a trustee, director, officer, employee or agent ofanother trust or corporation, against any liability asserted against him andincurred by him or arising out of his position. However, in no event willRegistrant

3

maintain insurance to indemnify any such person for any act for which Registrantitself is not permitted to indemnify him.

Item 26. Business and Other Connections of Investment Advisor----------------------------------------------------

See "The Fund and Its Management" in the Prospectus regarding the businessof the investment advisor. The following information is given regarding officersof Morgan Stanley Dean Witter Advisors Inc. ("MSDW Advisors"). MSDW Advisors isa wholly-owned subsidiary of Morgan Stanley Dean Witter & Co.

The term "Morgan Stanley Dean Witter Funds" refers to the followingregistered investment companies:

Closed-End Investment Companies-------------------------------

(1) Morgan Stanley Dean Witter California Insured Municipal Income Trust(2) Morgan Stanley Dean Witter California Quality Municipal Securities(3) Morgan Stanley Dean Witter Government Income Trust(4) Morgan Stanley Dean Witter High Income Advantage Trust(5) Morgan Stanley Dean Witter High Income Advantage Trust II(6) Morgan Stanley Dean Witter High Income Advantage Trust III(7) Morgan Stanley Dean Witter Income Securities Inc.(8) Morgan Stanley Dean Witter Insured California Municipal Securities(9) Morgan Stanley Dean Witter Insured Municipal Bond Trust(10) Morgan Stanley Dean Witter Insured Municipal Income Trust(11) Morgan Stanley Dean Witter Insured Municipal Securities(12) Morgan Stanley Dean Witter Insured Municipal Trust(13) Morgan Stanley Dean Witter Municipal Income Opportunities Trust(14) Morgan Stanley Dean Witter Municipal Income Opportunities Trust II(15) Morgan Stanley Dean Witter Municipal Income Opportunities Trust III(16) Morgan Stanley Dean Witter Municipal Income Trust(17) Morgan Stanley Dean Witter Municipal Income Trust II(18) Morgan Stanley Dean Witter Municipal Income Trust III(19) Morgan Stanley Dean Witter Municipal Premium Income Trust(20) Morgan Stanley Dean Witter New York Quality Municipal Securities(21) Morgan Stanley Dean Witter Prime Income Trust(22) Morgan Stanley Dean Witter Quality Municipal Income Trust(23) Morgan Stanley Dean Witter Quality Municipal Investment Trust(24) Morgan Stanley Dean Witter Quality Municipal Securities

Open-end Investment Companies-----------------------------



(1) Active Assets California Tax-Free Trust(2) Active Assets Government Securities Trust(3) Active Assets Institutional Money Trust(4) Active Assets Money Trust(5) Active Assets Premier Money Trust(6) Active Assets Tax-Free Trust(7) Morgan Stanley Dean Witter 21st Century Trend Fund(8) Morgan Stanley Dean Witter Aggressive Equity Fund(9) Morgan Stanley Dean Witter American Opportunities Fund(10) Morgan Stanley Dean Witter Balanced Growth Fund(11) Morgan Stanley Dean Witter Balanced Income Fund

4

(12) Morgan Stanley Dean Witter California Tax-Free Daily Income Trust(13) Morgan Stanley Dean Witter California Tax-Free Income Fund(14) Morgan Stanley Dean Witter Capital Growth Securities(15) Morgan Stanley Dean Witter Competitive Edge Fund, "Best Ideas Portfolio"(16) Morgan Stanley Dean Witter Convertible Securities Trust(17) Morgan Stanley Dean Witter Developing Growth Securities Trust(18) Morgan Stanley Dean Witter Diversified Income Trust(19) Morgan Stanley Dean Witter Dividend Growth Securities Inc.(20) Morgan Stanley Dean Witter Equity Fund(21) Morgan Stanley Dean Witter European Growth Fund Inc.(22) Morgan Stanley Dean Witter Federal Securities Trust(23) Morgan Stanley Dean Witter Financial Services Trust(24) Morgan Stanley Dean Witter Fund of Funds(25) Morgan Stanley Dean Witter Global Dividend Growth Securities(26) Morgan Stanley Dean Witter Global Utilities Fund(27) Morgan Stanley Dean Witter Growth Fund(28) Morgan Stanley Dean Witter Hawaii Municipal Trust(29) Morgan Stanley Dean Witter Health Sciences Trust(30) Morgan Stanley Dean Witter High Yield Securities Inc.(31) Morgan Stanley Dean Witter Income Builder Fund(32) Morgan Stanley Dean Witter Information Fund(33) Morgan Stanley Dean Witter Intermediate Income Securities(34) Morgan Stanley Dean Witter International Fund(35) Morgan Stanley Dean Witter International SmallCap Fund(36) Morgan Stanley Dean Witter Japan Fund(37) Morgan Stanley Dean Witter Latin American Growth Fund(38) Morgan Stanley Dean Witter Limited Term Municipal Trust(39) Morgan Stanley Dean Witter Liquid Asset Fund Inc.(40) Morgan Stanley Dean Witter Market Leader Trust(41) Morgan Stanley Dean Witter Mid-Cap Equity Trust(42) Morgan Stanley Dean Witter Multi-State Municipal Series Trust(43) Morgan Stanley Dean Witter Natural Resource Development Securities Inc.(44) Morgan Stanley Dean Witter New Discoveries Fund(45) Morgan Stanley Dean Witter New York Municipal Money Market Trust(46) Morgan Stanley Dean Witter New York Tax-Free Income Fund(47) Morgan Stanley Dean Witter Next Generation Trust(48) Morgan Stanley Dean Witter North American Government Income Trust(49) Morgan Stanley Dean Witter Pacific Growth Fund Inc.(50) Morgan Stanley Dean Witter Real Estate Fund(51) Morgan Stanley Dean Witter S&P 500 Index Fund(52) Morgan Stanley Dean Witter S&P 500 Select Fund(53) Morgan Stanley Dean Witter Select Dimensions Investment Series(54) Morgan Stanley Dean Witter Select Municipal Reinvestment Fund(55) Morgan Stanley Dean Witter Short-Term Bond Fund(56) Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust(57) Morgan Stanley Dean Witter Small Cap Growth Fund(58) Morgan Stanley Dean Witter Special Value Fund(59) Morgan Stanley Dean Witter Strategist Fund(60) Morgan Stanley Dean Witter Tax-Exempt Securities Trust(61) Morgan Stanley Dean Witter Tax-Free Daily Income Trust(62) Morgan Stanley Dean Witter Tax-Managed Growth Fund

5

(63) Morgan Stanley Dean Witter Technology Fund(64) Morgan Stanley Dean Witter Total Market Index Fund(65) Morgan Stanley Dean Witter Total Return Trust(66) Morgan Stanley Dean Witter U.S. Government Money Market Trust(67) Morgan Stanley Dean Witter U.S. Government Securities Trust(68) Morgan Stanley Dean Witter Utilities Fund(69) Morgan Stanley Dean Witter Value-Added Market Series(70) Morgan Stanley Dean Witter Value Fund(71) Morgan Stanley Dean Witter Variable Investment Series(72) Morgan Stanley Dean Witter World Wide Income Trust

NAME AND POSITION WITH OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATIONMORGAN STANLEY DEAN OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS



WITTER ADVISORS INC. AND NATURE OF CONNECTION---------------------- ---------------------------------------------------

Mitchell M. Merin President and Chief Operating Officer of AssetPresident, Chief Management of Morgan Stanley Dean Witter & Co.Executive Officer and ("MSDW); Chairman, Chief Executive Officer andDirector Director of Morgan Stanley Dean Witter Distributors

Inc. ("MSDW Distributors") and Morgan Stanley DeanWitter Trust FSB ("MSDW Trust"); President, ChiefExecutive Officer and Director of Morgan StanleyDean Witter Services Company Inc. ("MSDWServices"); President of the Morgan Stanley DeanWitter Funds; Executive Vice President and Directorof Dean Witter Reynolds Inc. ("DWR"); Director ofvarious MSDW subsidiaries; Trustee of various VanKampen investment companies.

Barry Fink General Counsel of Asset Management of MSDW;Executive Vice President, Executive Vice President, Secretary, GeneralSecretary, General Counsel Counsel and Director of MSDW Services; Viceand Director President and Secretary of MSDW Distributors; Vice

President, Secretary and General Counsel of theMorgan Stanley Dean Witter Funds.

Joseph J. McAlinden Vice President of the Morgan Stanley Dean WitterExecutive Vice President Funds; Director of MSDW Trust.and Chief InvestmentOfficer

Ronald E. Robison Executive Vice President, Chief AdministrativeExecutive Vice President, Officer and Director of MSDW Services; ViceChief Administrative President of the Morgan Stanley Dean Witter Funds.Officer and Director

Edward C. Oelsner, IIIExecutive Vice President

Joseph R. Arcieri Vice President of various Morgan Stanley DeanSenior Vice President Witter Funds.

6

NAME AND POSITION WITH OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATIONMORGAN STANLEY DEAN OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESSWITTER ADVISORS INC. AND NATURE OF CONNECTION---------------------- ---------------------------------------------------

Peter M. Avelar Vice President of various Morgan Stanley DeanSenior Vice President Witter Funds.and Director of the HighYield Group

Mark Bavoso Vice President of various Morgan Stanley DeanSenior Vice President Witter Funds.

Douglas BrownSenior Vice President

Rosalie CloughSenior Vice Presidentand Director of Marketing

Richard G. DeSalvoSenior Vice Presidentand Director of InvestmentManagement Services

Richard FelegySenior Vice President

Sheila A. Finnerty Vice President of Morgan Stanley Dean Witter PrimeSenior Vice President Income Trust.

Edward F. Gaylor Vice President of various Morgan Stanley DeanSenior Vice President Witter Funds.Director of the ResearchGroup

Robert S. Giambrone Senior Vice President of MSDW Services, MSDWSenior Vice President Distributors and MSDW Trust and Director of MSDW

Trust; Vice President of the Morgan Stanley DeanWitter Funds.



Rajesh K. Gupta Vice President of various Morgan Stanley DeanSenior Vice President, Witter Funds.Director of the TaxableFixed Income Group andChief AdministrativeOfficer - Investments

Kenton J. Hinchliffe Vice President of various Morgan Stanley DeanSenior Vice President Witter Funds.

Kevin Hurley Vice President of various Morgan Stanley DeanSenior Vice President Witter Funds.

7


Jenny Beth Jones Vice President of various Morgan Stanley DeanSenior Vice President Witter Funds.

Michelle Kaufman Vice President of various Morgan Stanley DeanSenior Vice President Witter Funds.

John B. Kemp, III President of MSDW Distributors.Senior Vice President

Anita H. Kolleeny Vice President of various Morgan Stanley DeanSenior Vice President Witter Funds.and Director of SectorRotation

Jonathan R. Page Vice President of various Morgan Stanley DeanSenior Vice President Witter Funds.and Director of theMoney Market Group

Ira N. Ross Vice President of various Morgan Stanley DeanSenior Vice President Witter Funds.

Guy G. Rutherfurd, Jr. Vice President of various Morgan Stanley DeanSenior Vice President Witter Funds.and Director of theGrowth Group

Rochelle G. Siegel Vice President of various Morgan Stanley DeanSenior Vice President Witter Funds.

James Solloway Jr.Senior Vice President

Katherine H. Stromberg Vice President of various Morgan Stanley DeanSenior Vice President Witter Funds.

Paul D. Vance Vice President of various Morgan Stanley DeanSenior Vice President Witter Funds.and Director of theGrowth and Income Group

Elizabeth A. VetellSenior Vice Presidentand Director ofShareholder Communication

8


James F. Willison Vice President of various Morgan Stanley DeanSenior Vice President Witter Funds.and Director of theTax-Exempt FixedIncome Group

Raymond A. Basile



First Vice President

Thomas F. Caloia First Vice President and Assistant Treasurer ofFirst Vice President MSDW Services; Assistant Treasurer of MSDWand Assistant Distributors; Treasurer and Chief Financial andTreasurer Accounting Officer of the Morgan Stanley Dean

Witter Funds.

Thomas ChronertFirst Vice President

Richard Colville First Vice President and Controller of MSDWFirst Vice President Services; Assistant Treasurer of MSDW Distributors;and Controller First Vice President and Treasurer of MSDW Trust.

Marilyn K. Cranney Assistant Secretary of DWR; First Vice PresidentFirst Vice President and Assistant Secretary of MSDW Services; Assistantand Assistant Secretary Secretary of MSDW Distributors and the Morgan

Stanley Dean Witter Funds.

Salvatore DeSteno First Vice President of MSDW Services.First Vice President

Peter W. GurmanFirst Vice President

David JohnsonFirst Vice President

Stanley KapicaFirst Vice President

Douglas J. KettererFirst Vice President

Todd Lebo First Vice President and Assistant Secretary ofFirst Vice President and MSDW Services; Assistant Secretary of MSDWAssistant Secretary Distributors and the Morgan Stanley Dean Witter

Funds.

9


Lou Anne D. McInnis First Vice President and Assistant Secretary ofFirst Vice President and MSDW Services; Assistant Secretary of MSDWAssistant Secretary Distributors and the Morgan Stanley Dean Witter

Funds.

Carsten Otto First Vice President and Assistant Secretary ofFirst Vice President MSDW Services; Assistant Secretary of MSDWand Assistant Secretary Distributors and the Morgan Stanley Dean Witter

Funds.

Carl F. SadlerFirst Vice President

Ruth Rossi First Vice President and Assistant Secretary ofFirst Vice President and MSDW Services; Assistant Secretary of MSDWAssistant Secretary Distributors and the Morgan Stanley Dean Witter

Funds.

James P. WallinFirst Vice President

Robert AbreuVice President

Dale AlbrightVice President

Joan G. AllmanVice President

Andrew Arbenz Vice President of Morgan Stanley Dean Witter GlobalVice President Utilities Fund.

Sean AurigemmaVice President

Armon Bar-Tur Vice President of various Morgan Stanley Dean



Vice President Witter Funds.

Thomas A. BergeronVice President

Philip BernsteinVice President

Dale BoettcherVice President

Michelina CalandrellaVice President

10


Ronald CaldwellVice President

Joseph CardwellVice President

Christie Carr-WaldronVice President

Liam CarrollVice President

Philip CaspariusVice President

Annette CelenzaVice President

Aaron Clark Vice President of Morgan Stanley Dean Witter MarketVice President Leader Trust

William ConnerlyVice President

Virginia ConnorsVice President

Michael J. DaveyVice President

David Dineen Vice President of various Morgan Stanley DeanVice President Witter Funds.

June EwersVice President

Jeffrey D. Geffen Vice President of Morgan Stanley Dean Witter U.S.Vice President Government Securities Trust

Sandra GelpierynVice President

Charmaine GeorgeVice President

Michael GeringerVice President

11


Gail Gerrity BurkeVice President

Peter GewirtzVice President



Mina GitsevichVice President

Ellen GoldVice President

Amy GolubVice President

Stephen GreenhutVice President

Joan HamiltonVice President

Trey HancockVice President

Matthew T. Haynes Vice President of various Morgan Stanley DeanVice President Witter Funds.

Peter Hermann Jr. Vice President of various Morgan Stanley DeanVice President Witter Funds.

David T. HoffmanVice President

Thomas G. Hudson IIVice President

Linda JonesVice President

Norman JonesVice President

Kevin Jung Vice President of various Morgan Stanley DeanVice President Witter Funds.

Carol Espejo-KaneVice President

12


Nancy Karole KennedyVice President

Paula LaCosta Vice President of various Morgan Stanley DeanVice President Witter Funds.

Kimberly LaHartVice President

Thomas LawlorVice President

Lester LayVice President

Phuong LeVice President

Gerard J. Lian Vice President of various Morgan Stanley DeanVice President Witter Funds.

Cameron J. LivingstoneVice President

Nancy Login ColeVice President

Sharon LoguercioVice President

Stephanie LovingerVice President

Steven MacNamara



Vice President

Catherine Maniscalco Vice President of various Morgan Stanley DeanVice President Witter Funds.

Peter R. McDowellVice President

Albert McGarityVice President

Teresa McRoberts Vice President of various Morgan Stanley DeanVice President Witter Funds.

13


Mark MitchellVice President

Thomas MooreVice President

Julie Morrone Vice President of various Morgan Stanley DeanVice President Witter Funds.

Mary Beth MuellerVice President

David Myers Vice President of Morgan Stanley Dean WitterVice President Natural Resource Development Securities Inc.

James NashVice President

Daniel NilandVice President

Richard NorrisVice President

Hilary A. O'NeillVice President

Steven OrlovVice President

Mori PaulsenVice President

Anne PickrellVice President

Reginald RigaudVice President

Frances RomanVice President

Dawn RorkeVice President

John Roscoe Vice President of various Morgan Stanley DeanVice President Witter Funds.

14


Hugh RoseVice President

Robert Rossetti Vice President of Morgan Stanley Dean WitterVice President Competitive Edge Fund.



Sally Sancimino Vice President of various Morgan Stanley DeanVice President Witter Funds.

Deborah SantanielloVice President

Patrice SaundersVice President

Donna SavocaVice President

Howard A. Schloss Vice President of Morgan Stanley Dean WitterVice President Federal Securities Trust.

Alison M. SharkeyVice President

Peter J. Seeley Vice President of various Morgan Stanley DeanVice President Witter Funds.

Ronald B. Silvestri Vice President of various Morgan Stanley DeanVice President Witter Funds.

Herbert SimonVice President

Martha SlezakVice President

Frank SmithVice President

Otha SmithVice President

Stuart SmithVice President

Robert StearnsVice President

15


Naomi SteinVice President

William StevensVice President

Michael StrayhornVice President

Marybeth SwisherVice President

Michael ThayerVice President

Bradford ThomasVice President

Barbara ToichVice President

Robert Vanden AssemVice President

Frank VindigniVice President

David WalshVice President

Alice Weiss Vice President of various Morgan Stanley DeanVice President Witter Funds.

John Wong



Vice President

The principal address of MSDW Advisors, MSDW Services, MSDW Distributors,DWR, and the Morgan Stanley Dean Witter Funds is Two World Trade Center, NewYork, New York 10048. The principal address of MSDW is 1585 Broadway, New York,New York 10036. The principal address of MSDW Trust is 2 Harborside FinancialCenter, Jersey City, New Jersey 07311.

Item 27. Principal Underwriters----------------------

(a) Morgan Stanley Dean Witter Distributors Inc. ("MSDW Distributors"), aDelaware corporation, is the principal underwriter of the Registrant. MSDWDistributors is also the principal underwriter of the following investmentcompanies:

16

(1) Active Assets California Tax-Free Trust(2) Active Assets Government Securities Trust(3) Active Assets Institutional Money Trust(4) Active Assets Money Trust(5) Active Assets Premier Money Trust(6) Active Assets Tax-Free Trust(7) Morgan Stanley Dean Witter 21st Century Trend Fund(8) Morgan Stanley Dean Witter Aggressive Equity Fund(9) Morgan Stanley Dean Witter American Opportunities Fund(10) Morgan Stanley Dean Witter Balanced Growth Fund(11) Morgan Stanley Dean Witter Balanced Income Fund(12) Morgan Stanley Dean Witter California Tax-Free Daily Income Trust(13) Morgan Stanley Dean Witter California Tax-Free Income Fund(14) Morgan Stanley Dean Witter Capital Growth Securities(15) Morgan Stanley Dean Witter Competitive Edge Fund, "Best Ideas Portfolio"(16) Morgan Stanley Dean Witter Convertible Securities Trust(17) Morgan Stanley Dean Witter Developing Growth Securities Trust(18) Morgan Stanley Dean Witter Diversified Income Trust(19) Morgan Stanley Dean Witter Dividend Growth Securities Inc.(20) Morgan Stanley Dean Witter Equity Fund(21) Morgan Stanley Dean Witter European Growth Fund Inc.(22) Morgan Stanley Dean Witter Federal Securities Trust(23) Morgan Stanley Dean Witter Financial Services Trust(24) Morgan Stanley Dean Witter Fund of Funds(25) Morgan Stanley Dean Witter Global Dividend Growth Securities(26) Morgan Stanley Dean Witter Global Utilities Fund(27) Morgan Stanley Dean Witter Growth Fund(28) Morgan Stanley Dean Witter Hawaii Municipal Trust(29) Morgan Stanley Dean Witter Health Sciences Trust(30) Morgan Stanley Dean Witter High Yield Securities Inc.(31) Morgan Stanley Dean Witter Income Builder Fund(32) Morgan Stanley Dean Witter Information Fund(33) Morgan Stanley Dean Witter Intermediate Income Securities(34) Morgan Stanley Dean Witter International Fund(35) Morgan Stanley Dean Witter International SmallCap Fund(36) Morgan Stanley Dean Witter Japan Fund(37) Morgan Stanley Dean Witter Latin American Growth Fund(38) Morgan Stanley Dean Witter Limited Term Municipal Trust(39) Morgan Stanley Dean Witter Liquid Asset Fund Inc.(40) Morgan Stanley Dean Witter Market Leader Trust(41) Morgan Stanley Dean Witter Mid-Cap Equity Trust(42) Morgan Stanley Dean Witter Multi-State Municipal Series Trust(43) Morgan Stanley Dean Witter Natural Resource Development Securities Inc.(44) Morgan Stanley Dean Witter New Discoveries Fund(45) Morgan Stanley Dean Witter New York Municipal Money Market Trust(46) Morgan Stanley Dean Witter New York Tax-Free Income Fund(47) Morgan Stanley Dean Witter Next Generation Trust(48) Morgan Stanley Dean Witter North American Government Income Trust(49) Morgan Stanley Dean Witter Pacific Growth Fund Inc.(50) Morgan Stanley Dean Witter Prime Income Trust

17

(51) Morgan Stanley Dean Witter Real Estate Fund(52) Morgan Stanley Dean Witter S&P 500 Index Fund(53) Morgan Stanley Dean Witter S&P 500 Select Fund(54) Morgan Stanley Dean Witter Short-Term Bond Fund(55) Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust(56) Morgan Stanley Dean Witter Small Cap Growth Fund(57) Morgan Stanley Dean Witter Special Value Fund(58) Morgan Stanley Dean Witter Strategist Fund(59) Morgan Stanley Dean Witter Tax-Exempt Securities Trust(60) Morgan Stanley Dean Witter Tax-Free Daily Income Trust(61) Morgan Stanley Dean Witter Tax-Managed Growth Fund(62) Morgan Stanley Dean Witter Technology Fund



(63) Morgan Stanley Dean Witter Total Market Index Fund(64) Morgan Stanley Dean Witter Total Return Trust(65) Morgan Stanley Dean Witter U.S. Government Money Market Trust(66) Morgan Stanley Dean Witter U.S. Government Securities Trust(67) Morgan Stanley Dean Witter Utilities Fund(68) Morgan Stanley Dean Witter Value-Added Market Series(69) Morgan Stanley Dean Witter Value Fund(70) Morgan Stanley Dean Witter Variable Investment Series(71) Morgan Stanley Dean Witter World Wide Income Trust

(b) The following information is given regarding directors and officers of MSDWDistributors not listed in Item 26 above. The principal address of MSDWDistributors is Two World Trade Center, New York, New York 10048. Other thanMessrs. Higgins and Purcell, who are Trustees of the Registrant, none of thefollowing persons has any position or office with the Registrant.

Name Positions and Office with MSDW Distributors---- -------------------------------------------

James F. Higgins Director

Philip J. Purcell Director

John Schaeffer Director

Charles Vadala Senior Vice President and Financial Principal.

Item 28. Location of Accounts and Records--------------------------------

All accounts, books and other documents required to be maintained bySection 31(a) of the Investment Company Act of 1940 and the Rules thereunder aremaintained by the Investment Manager at its offices, except records relating toholders of shares issued by the Registrant, which are maintained by theRegistrant's Transfer Agent, at its place of business as shown in theprospectus.

Item 29. Management Services-------------------

Registrant is not a party to any such management-related service contract.

18

Item 30. Undertakings------------

Registrant hereby undertakes to furnish each person to whom a prospectus isdelivered with a copy of the Registrant's latest annual report to shareholders,upon request and without charge.

SIGNATURES----------

Pursuant to the requirements of the Securities Act of 1933 and theInvestment Company Act of 1940, the Registrant certifies that it meets all ofthe requirements for effectiveness of this Registration Statement pursuant toRule 485(b) under the Securities Act of 1933 and has duly caused thisPost-Effective Amendment to the Registration Statement to be signed on itsbehalf by the undersigned, thereunto duly authorized, in the City of New Yorkand State of New York on the 29th day of November, 2000.


By /s/ Barry Fink---------------------------------

Barry FinkVice President and Secretary

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No.7 has been signed below by the following persons in thecapacities and on the dates indicated.

Signatures Title Date---------- ----- ----

(1) Principal Executive Officer Chief Executive Officer,Trustee and Chairman

By /s/ Charles A. Fiumefreddo 11/29/00---------------------------------



Charles A. Fiumefreddo

(2) Principal Financial Officer Treasurer and PrincipalAccounting Officer

By /s/ Thomas F. Caloia 11/29/00---------------------------------

Thomas F. Caloia

(3) Majority of the Trustees

Charles A. Fiumefreddo (Chairman)Philip J. PurcellJames F. Higgins

By /s/ Barry Fink 11/29/00---------------------------------

Barry FinkAttorney-in-Fact

Michael Bozic Manuel H. JohnsonEdwin J. Garn Michael E. NugentWayne E. Hedien John L. Schroeder

By /s/ David M. Butowsky 11/29/00---------------------------------

David M. ButowskyAttorney-in-Fact


EXHIBIT INDEX-------------

8(a). Amended and Restated Transfer Agency and Services Agreement, datedSeptember 1, 2000, between the Registrant and Morgan Stanley DeanWitter Trust FSB.

10(a). Consent of Independent Auditors.

10(b). Consent of PricewaterhouseCoopers LLP.

15. Amended and Restated Multiple Class Plan pursuant to Rule 18f-3.

16(a). Code of Ethics of Morgan Stanley Dean Witter Advisors, Inc., MorganStanley Dean Witter Services Company Inc., and Morgan Stanley DeanWitter Distributors Inc.

16(b). Code of Ethics of the Morgan Stanley Dean Witter Funds.

Other. Power of Attorney for James F. Higgins.



AMENDED AND RESTATEDTRANSFER AGENCY AND SERVICE AGREEMENT

with

MORGAN STANLEY DEAN WITTER TRUST FSB

660377 [open-end funds]

TABLE OF CONTENTS-----------------

<TABLE><CAPTION>

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<S> <C> <C>Article 1 Terms of Appointment ........................................ 1Article 2 Fees and Expenses ........................................... 2Article 3 Representations and Warranties of MSDW TRUST ................ 3Article 4 Representations and Warranties of the Fund .................. 3Article 5 Duty of Care and Indemnification ............................ 3Article 6 Documents and Covenants of the Fund and MSDW TRUST .......... 5Article 7 Duration and Termination of Agreement ....................... 6Article 8 Assignment .................................................. 6Article 9 Affiliations ................................................ 6Article 10 Amendment ................................................... 6



Article 11 Applicable Law .............................................. 6Article 12 Miscellaneous ............................................... 7Article 13 Merger of Agreement ......................................... 7Article 14 Personal Liability .......................................... 7</TABLE>

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AMENDED AND RESTATED TRANSFER AGENCY AND SERVICE AGREEMENT----------------------------------------------------------

AGREEMENT made as of August 1, 1997, and amended on June 22, 1998 andSeptember 1, 2000, by and between each of the Funds listed on the signaturepages hereof, each of such Funds acting severally on its own behalf and notjointly with any of such other Funds (each such Fund hereinafter referred to asthe "Fund"), each such Fund having its principal office and place of business atTwo World Trade Center, New York, New York, 10048, and MORGAN STANLEY DEANWITTER TRUST FSB ("MSDW TRUST"), a federally chartered savings bank, having itsprincipal office and place of business at Harborside Financial Center, PlazaTwo, Jersey City, New Jersey 07311.

WHEREAS, the Fund desires to appoint MSDW TRUST as its transfer agent,dividend disbursing agent and shareholder servicing agent and MSDW TRUST desiresto accept such appointment;

NOW THEREFORE, in consideration of the mutual covenants herein contained,the parties hereto agree as follows:

ARTICLE 1 TERMS OF APPOINTMENT; DUTIES OF MSDW TRUST

1.1 Subject to the terms and conditions set forth in this Agreement, theFund hereby employs and appoints MSDW TRUST to act as, and MSDW TRUST agrees toact as, the transfer agent for each series and class of shares of the Fund,whether now or hereafter authorized or issued ("Shares"), dividend disbursingagent and shareholder servicing agent in connection with any accumulation,open-account or similar plans provided to the holders of such Shares("Shareholders") and set out in the currently effective prospectus and statementof additional information ("prospectus") of the Fund, including withoutlimitation any periodic investment plan or periodic withdrawal program.

1.2 MSDW TRUST agrees that it will perform the following services:

(a) In accordance with procedures established from time to time byagreement between the Fund and MSDW TRUST, MSDW TRUST shall:

(i) Receive for acceptance, orders for the purchase of Shares, andpromptly deliver payment and appropriate documentation therefor to thecustodian of the assets of the Fund (the "Custodian");

(ii) Pursuant to purchase orders, issue the appropriate number ofShares and issue certificates therefor or hold such Shares in book formin the appropriate Shareholder account;



(iii) Receive for acceptance redemption requests and redemptiondirections and deliver the appropriate documentation therefor to theCustodian;

(iv) At the appropriate time as and when it receives monies paid toit by the Custodian with respect to any redemption, pay over or causeto be paid over in the appropriate manner such monies as instructed bythe redeeming Shareholders;

(v) Effect transfers of Shares by the registered owners thereof uponreceipt of appropriate instructions;

(vi) Prepare and transmit payments for dividends and distributionsdeclared by the Fund;

(vii) Calculate any sales charges payable by a Shareholder onpurchases and/or redemptions of Shares of the Fund as such charges maybe reflected in the prospectus;

(viii) Maintain records of account for and advise the Fund and itsShareholders as to the foregoing; and

(ix) Record the issuance of Shares of the Fund and maintain pursuantto Rule 17Ad-10(e) under the Securities Exchange Act of 1934 ("1934Act") a record of the total number of Shares of the Fund which areauthorized, based upon data provided to it by the Fund, and issued andoutstanding. MSDW TRUST shall also provide to the Fund on a regularbasis the total number of Shares that are authorized, issued andoutstanding and shall notify the Fund in case any proposed issue ofShares by the Fund would result in an overissue. In case any issue ofShares

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would result in an overissue, MSDW TRUST shall refuse to issue suchShares and shall not countersign and issue any certificates requestedfor such Shares. When recording the issuance of Shares, MSDW TRUSTshall have no obligation to take cognizance of any Blue Sky lawsrelating to the issue of sale of such Shares, which functions shall bethe sole responsibility of the Fund.

(b) In addition to and not in lieu of the services set forth in theabove paragraph (a), MSDW TRUST shall:

(i) perform all of the customary services of a transfer agent,dividend disbursing agent and, as relevant, shareholder servicing agentin connection with dividend reinvestment, accumulation, open-account orsimilar plans (including without limitation any periodic investmentplan or periodic withdrawal program), including but not limited to,maintaining all Shareholder accounts, preparing Shareholder meetinglists, mailing proxies, receiving and tabulating proxies, mailing



shareholder reports and prospectuses to current Shareholders,withholding taxes on U.S. resident and non-resident alien accounts,preparing and filing appropriate forms required with respect todividends and distributions by federal tax authorities for allShareholders, preparing and mailing confirmation forms and statementsof account to Shareholders for all purchases and redemptions of Sharesand other confirmable transactions in Shareholder accounts, preparingand mailing activity statements for Shareholders and providingShareholder account information;

(ii) open any and all bank accounts which may be necessary orappropriate in order to provide the foregoing services; and

(iii) provide a system that will enable the Fund to monitor thetotal number of Shares sold in each State or other jurisdiction.

(c) In addition, the Fund shall:

(i) identify to MSDW TRUST in writing those transactions and assetsto be treated as exempt from Blue Sky reporting for each State; and

(ii) verify the inclusion on the system prior to activation of eachState in which Fund shares may be sold and thereafter monitor the dailypurchases and sales for shareholders in each State. The responsibilityof MSDW TRUST for the Fund's status under the securities laws of anyState or other jurisdiction is limited to the inclusion on the systemof each State as to which the Fund has informed MSDW TRUST that sharesmay be sold in compliance with state securities laws and the reportingof purchases and sales in each such State to the Fund as provided aboveand as agreed from time to time by the Fund and MSDW TRUST.

(d) MSDW TRUST shall provide such additional services and functions notspecifically described herein as may be mutually agreed between MSDW TRUSTand the Fund. Procedures applicable to such services may be establishedfrom time to time by agreement between the Fund and MSDW TRUST.

ARTICLE 2 FEES AND EXPENSES

2.1 For performance by MSDW TRUST pursuant to this Agreement, each Fundagrees to pay MSDW TRUST an annual maintenance fee for each Shareholder accountand certain transactional fees, if applicable, as set out in the respective feeschedule attached hereto as Schedule A. Such fee shall be increased or decreasedon August 1st of each year by an amount equal to the change in the ConsumerPrice Index-Financial Services (All Urban Consumers), as published by the Bureauof Labor Statistics of the United States Department of Labor (or anothercomparable measure of employee wages and salaries and employer costs foremployee benefits as mutually agreed to by the Fund and MSDW Trust) for thetwelve-month period ending on March 31st of that year and shall be reflected ina revised Schedule A dated as of August 1 of each year. Such fees andout-of-pocket expenses and advances identified under Section 2.2 below may bechanged from time to time subject to mutual written agreement between the Fundand MSDW TRUST.



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2.2 In addition to the fees paid under Section 2.1 above, the Fund agreesto reimburse MSDW TRUST for out of pocket expenses in connection with theservices rendered by MSDW TRUST hereunder. In addition, any other expensesincurred by MSDW TRUST at the request or with the consent of the Fund will bereimbursed by the Fund.

2.3 The Fund agrees to pay all fees and reimbursable expenses within areasonable period of time following the mailing of the respective billingnotice. Postage for mailing of dividends, proxies, Fund reports and othermailings to all Shareholder accounts shall be advanced to MSDW TRUST by the Fundupon request prior to the mailing date of such materials.

ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF MSDW TRUST

MSDW TRUST represents and warrants to the Fund that:

3.1 It is a federally chartered savings bank whose principal office is inNew Jersey.

3.2 It is and will remain registered with the U.S. Securities and ExchangeCommission ("SEC") as a Transfer Agent pursuant to the requirements of Section17A of the 1934 Act.

3.3 It is empowered under applicable laws and by its charter and By-Laws toenter into and perform this Agreement.

3.4 All requisite corporate proceedings have been taken to authorize it toenter into and perform this Agreement.

3.5 It has and will continue to have access to the necessary facilities,equipment and personnel to perform its duties and obligations under thisAgreement.

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE FUND

The Fund represents and warrants to MSDW TRUST that:

4.1 It is a corporation duly organized and existing and in good standingunder the laws of Delaware or Maryland or a trust duly organized and existingand in good standing under the laws of Massachusetts, as the case may be.

4.2 It is empowered under applicable laws and by its Articles ofIncorporation or Declaration of Trust, as the case may be, and under its By-Lawsto enter into and perform this Agreement.

4.3 All corporate proceedings necessary to authorize it to enter into andperform this Agreement have been taken.

4.4 It is an investment company registered with the SEC under theInvestment Company Act of 1940, as amended (the "1940 Act").



4.5 A registration statement under the Securities Act of 1933 (the "1933Act") is currently effective and will remain effective, and appropriate statesecurities law filings have been made and will continue to be made, withrespect to all Shares of the Fund being offered for sale.

ARTICLE 5 DUTY OF CARE AND INDEMNIFICATION

5.1 MSDW TRUST shall not be responsible for, and the Fund shall indemnifyand hold MSDW TRUST harmless from and against, any and all losses, damages,costs, charges, counsel fees, payments, expenses and liability arising out of orattributable to:

(a) All actions of MSDW TRUST or its agents or subcontractors requiredto be taken pursuant to this Agreement, provided that such actions aretaken in good faith and without negligence or willful misconduct.

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(b) The Fund's refusal or failure to comply with the terms of thisAgreement, or which arise out of the Fund's lack of good faith, negligenceor willful misconduct or which arise out of breach of any representation orwarranty of the Fund hereunder.

(c) The reliance on or use by MSDW TRUST or its agents or subcontractorsof information, records and documents which (i) are received by MSDW TRUSTor its agents or subcontractors and furnished to it by or on behalf of theFund, and (ii) have been prepared and/or maintained by the Fund or anyother person or firm on behalf of the Fund.

(d) The reliance on, or the carrying out by MSDW TRUST or its agents orsubcontractors of, any instructions or requests of the Fund.

(e) The offer or sale of Shares in violation of any requirement underthe federal securities laws or regulations or the securities or Blue Skylaws of any State or other jurisdiction that notice of offering of suchShares in such State or other jurisdiction or in violation of any stoporder or other determination or ruling by any federal agency or any Stateor other jurisdiction with respect to the offer or sale of such Shares insuch State or other jurisdiction.

5.2 MSDW TRUST shall indemnify and hold the Fund harmless from or againstany and all losses, damages, costs, charges, counsel fees, payments, expensesand liability arising out of or attributable to any action or failure oromission to act by MSDW TRUST as a result of the lack of good faith, negligenceor willful misconduct of MSDW TRUST, its officers, employees or agents.

5.3 At any time, MSDW TRUST may apply to any officer of the Fund forinstructions, and may consult with legal counsel to the Fund, with respect toany matter arising in connection with the services to be performed by MSDW TRUSTunder this Agreement, and MSDW TRUST and its agents or subcontractors shall not



be liable and shall be indemnified by the Fund for any action taken or omittedby it in reliance upon such instructions or upon the opinion of such counsel.MSDW TRUST, its agents and subcontractors shall be protected and indemnified inacting upon any paper or document furnished by or on behalf of the Fund,reasonably believed to be genuine and to have been signed by the proper personor persons, or upon any instruction, information, data, records or documentsprovided to MSDW TRUST or its agents or subcontractors by machine readableinput, telex, CRT data entry or other similar means authorized by the Fund, andshall not be held to have notice of any change of authority of any person, untilreceipt of written notice thereof from the Fund. MSDW TRUST, its agents andsubcontractors shall also be protected and indemnified in recognizing stockcertificates which are reasonably believed to bear the proper manual orfacsimile signature of the officers of the Fund, and the proper countersignatureof any former transfer agent or registrar, or of a co-transfer agent orco-registrar.

5.4 In the event either party is unable to perform its obligations underthe terms of this Agreement because of acts of God, strikes, equipment ortransmission failure or damage reasonably beyond its control, or other causesreasonably beyond its control, such party shall not be liable for damages to theother for any damages resulting from such failure to perform or otherwise fromsuch causes.

5.5 Neither party to this Agreement shall be liable to the other party forconsequential damages under any provision of this Agreement or for any act orfailure to act hereunder.

5.6 In order that the indemnification provisions contained in this Article5 shall apply, upon the assertion of a claim for which either party may berequired to indemnify the other, the party seeking indemnification shallpromptly notify the other party of such assertion, and shall keep the otherparty advised with respect to all developments concerning such claim. The partywho may be required to indemnify shall have the option to participate with theparty seeking indemnification in the defense of such claim. The party seekingindemnification shall in no case confess any claim or make any compromise in anycase in which the other party may be required to indemnify it except with theother party's prior written consent.

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ARTICLE 6 DOCUMENTS AND COVENANTS OF THE FUND AND MSDW TRUST

6.1 The Fund shall promptly furnish to MSDW TRUST the following, unlesspreviously furnished to Dean Witter Trust Company, the prior transfer agent ofthe Fund:

(a) If a corporation:

(i) A certified copy of the resolution of the Board of Directors ofthe Fund authorizing the appointment of MSDW TRUST and the executionand delivery of this Agreement;



(ii) A certified copy of the Articles of Incorporation and By-Lawsof the Fund and all amendments thereto;

(iii) Certified copies of each vote of the Board of Directorsdesignating persons authorized to give instructions on behalf of theFund and signature cards bearing the signature of any officer of theFund or any other person authorized to sign written instructions onbehalf of the Fund;

(iv) A specimen of the certificate for Shares of the Fund in theform approved by the Board of Directors, with a certificate of theSecretary of the Fund as to such approval;

(b) If a business trust:

(i) A certified copy of the resolution of the Board of Trustees ofthe Fund authorizing the appointment of MSDW TRUST and the executionand delivery of this Agreement;

(ii) A certified copy of the Declaration of Trust and By-Laws of theFund and all amendments thereto;

(iii) Certified copies of each vote of the Board of Trusteesdesignating persons authorized to give instructions on behalf of theFund and signature cards bearing the signature of any officer of theFund or any other person authorized to sign written instructions onbehalf of the Fund;

(iv) A specimen of the certificate for Shares of the Fund in theform approved by the Board of Trustees, with a certificate of theSecretary of the Fund as to such approval;

(c) The current registration statements and any amendments andsupplements thereto filed with the SEC pursuant to the requirements of the1933 Act or the 1940 Act;

(d) All account application forms or other documents relating toShareholder accounts and/or relating to any plan, program or serviceoffered or to be offered by the Fund; and

(e) Such other certificates, documents or opinions as MSDW TRUST deemsto be appropriate or necessary for the proper performance of its duties.

6.2 MSDW TRUST hereby agrees to establish and maintain facilities andprocedures reasonably acceptable to the Fund for safekeeping of Sharecertificates, check forms and facsimile signature imprinting devices, if any;and for the preparation or use, and for keeping account of, such certificates,forms and devices.

6.3 MSDW TRUST shall prepare and keep records relating to the services tobe performed hereunder, in the form and manner as it may deem advisable and asrequired by applicable laws and regulations. To the extent required by Section31 of the 1940 Act, and the rules and regulations thereunder, MSDW TRUST agreesthat all such records prepared or maintained by MSDW TRUST relating to the



services performed by MSDW TRUST hereunder are the property of the Fund and willbe preserved, maintained and made available in accordance with such Section 31of the 1940 Act, and the rules and regulations thereunder, and will besurrendered promptly to the Fund on and in accordance with its request.

6.4 MSDW TRUST and the Fund agree that all books, records, information anddata pertaining to the business of the other party which are exchanged orreceived pursuant to the negotiation or the carrying out of this Agreement shallremain confidential and shall not be voluntarily disclosed to any other personexcept as may be required by law or with the prior consent of MSDW TRUST and theFund.

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6.5 In case of any request or demands for the inspection of theShareholder records of the Fund, MSDW TRUST will endeavor to notify the Fundand to secure instructions from an authorized officer of the Fund as to suchinspection. MSDW TRUST reserves the right, however, to exhibit the Shareholderrecords to any person whenever it is advised by its counsel that it may be heldliable for the failure to exhibit the Shareholder records to such person.

ARTICLE 7 DURATION AND TERMINATION OF AGREEMENT

7.1 This Agreement shall remain in full force and effect until August 1,2001 and from year-to-year thereafter unless terminated by either party asprovided in Section 7.2 hereof.

7.2 This Agreement may be terminated by the Fund on 60 days written notice,and by MSDW TRUST on 90 days written notice, to the other party without paymentof any penalty.

7.3 Should the Fund exercise its right to terminate, all out-of-pocketexpenses associated with the movement of records and other materials will beborne by the Fund. Additionally, MSDW TRUST reserves the right to charge for anyother reasonable fees and expenses associated with such termination.

ARTICLE 8 ASSIGNMENT

8.1 Except as provided in Section 8.3 below, neither this Agreement nor anyrights or obligations hereunder may be assigned by either party without thewritten consent of the other party.

8.2 This Agreement shall inure to the benefit of and be binding upon theparties and their respective permitted successors and assigns.

8.3 MSDW TRUST may, in its sole discretion and without further consent bythe Fund, subcontract, in whole or in part, for the performance of itsobligations and duties hereunder with any person or entity including but notlimited to companies which are affiliated with MSDW TRUST; provided, however,that such person or entity has and maintains the qualifications, if any,required to perform such obligations and duties, and that MSDW TRUST shall be asfully responsible to the Fund for the acts and omissions of any agent or



subcontractor as it is for its own acts or omissions under this Agreement.

ARTICLE 9 AFFILIATIONS

9.1 MSDW TRUST may now or hereafter, without the consent of or notice tothe Fund, function as transfer agent and/or shareholder servicing agent for anyother investment company registered with the SEC under the 1940 Act and for anyother issuer, including without limitation any investment company whose adviser,administrator, sponsor or principal underwriter is or may become affiliated withMorgan Stanley Dean Witter & Co. or any of its direct or indirect subsidiariesor affiliates.

9.2 It is understood and agreed that the Directors or Trustees (as the casemay be), officers, employees, agents and shareholders of the Fund, and thedirectors, officers, employees, agents and shareholders of the Fund's investmentadviser and/or distributor, are or may be interested in MSDW TRUST as directors,officers, employees, agents and shareholders or otherwise, and that thedirectors, officers, employees, agents and shareholders of MSDW TRUST may beinterested in the Fund as Directors or Trustees (as the case may be), officers,employees, agents and shareholders or otherwise, or in the investment adviserand/or distributor as directors, officers, employees, agents, shareholders orotherwise.

ARTICLE 10 AMENDMENT

10.1 This Agreement may be amended or modified by a written agreementexecuted by both parties and authorized or approved by a resolution of the Boardof Directors or the Board of Trustees (as the case may be) of the Fund.

ARTICLE 11 APPLICABLE LAW

11.1 This Agreement shall be construed and the provisions thereofinterpreted under and in accordance with the laws of the State of New York.

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ARTICLE 12 MISCELLANEOUS

12.1 In the event that one or more additional investment companies managedor administered by Morgan Stanley Dean Witter Advisors Inc. or any of itsaffiliates ("Additional Funds") desires to retain MSDW TRUST to act as transferagent, dividend disbursing agent and/or shareholder servicing agent, and MSDWTRUST desires to render such services, such services shall be provided pursuantto a letter agreement, substantially in the form of Exhibit A hereto, betweenMSDW TRUST and each Additional Fund.

12.2 In the event of an alleged loss or destruction of any Sharecertificate, no new certificate shall be issued in lieu thereof, unless thereshall first be furnished to MSDW TRUST an affidavit of loss or non-receipt bythe holder of Shares with respect to which a certificate has been lost ordestroyed, supported by an appropriate bond satisfactory to MSDW TRUST and theFund issued by a surety company satisfactory to MSDW TRUST, except that MSDW



TRUST may accept an affidavit of loss and indemnity agreement executed by theregistered holder (or legal representative) without surety in such form as MSDWTRUST deems appropriate indemnifying MSDW TRUST and the Fund for the issuance ofa replacement certificate, in cases where the alleged loss is in the amount of$1,000 or less.

12.3 In the event that any check or other order for payment of money on theaccount of any Shareholder or new investor is returned unpaid for any reason,MSDW TRUST will (a) give prompt notification to the Fund's distributor("Distributor") (or to the Fund if the Fund acts as its own distributor) of suchnon-payment; and (b) take such other action, including imposition of areasonable processing or handling fee, as MSDW TRUST may, in its solediscretion, deem appropriate or as the Fund and, if applicable, the Distributormay instruct MSDW TRUST.

12.4 Any notice or other instrument authorized or required by thisAgreement to be given in writing to the Fund or to MSDW TRUST shall besufficiently given if addressed to that party and received by it at its officeset forth below or at such other place as it may from time to time designate inwriting.

To the Fund:

[Name of Fund]Two World Trade CenterNew York, New York 10048

Attention: General Counsel

To MSDW TRUST:

Morgan Stanley Dean Witter Trust FSBHarborside Financial CenterPlaza TwoJersey City, New Jersey 07311

Attention: President

ARTICLE 13 MERGER OF AGREEMENT

13.1 This Agreement constitutes the entire agreement between the partieshereto and supersedes any prior agreement with respect to the subject matterhereof whether oral or written.

ARTICLE 14 PERSONAL LIABILITY

14.1 In the case of a Fund organized as a Massachusetts business trust, acopy of the Declaration of Trust of the Fund is on file with the Secretary ofThe Commonwealth of Massachusetts, and notice is hereby given that thisinstrument is executed on behalf of the Board of Trustees of the Fund asTrustees and not individually and that the obligations of this instrument arenot binding upon any of the Trustees or shareholders individually but arebinding only upon the assets and property of the Fund; provided, however, that



the Declaration of Trust of the Fund provides that the assets of a particularSeries of the Fund shall under no circumstances be charged with liabilitiesattributable to any other Series of the Fund

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and that all persons extending credit to, or contracting with or having anyclaim against, a particular Series of the Fund shall look only to the assets ofthat particular Series for payment of such credit, contract or claim.

IN WITNESS WHEREOF, the parties hereto have caused this Amended andRestated Agreement to be executed in their names and on their behalf by andthrough their duly authorized officers, as of the day and year first abovewritten.

MORGAN STANLEY DEAN WITTER FUNDS

TAXABLE MONEY MARKET FUNDS

1. Active Assets Government Securities Trust2. Active Assets Institutional Money Trust3. Active Assets Money Trust4. Active Assets Premier Money Trust5. Morgan Stanley Dean Witter Liquid Asset Fund Inc.6. Morgan Stanley Dean Witter U.S. Government Money Market Trust

TAX-EXEMPT MONEY MARKET FUNDS

7. Active Assets California Tax-Free Trust8. Active Assets Tax-Free Trust9. Morgan Stanley Dean Witter California Tax-Free Daily Income Trust

10. Morgan Stanley Dean Witter New York Municipal Money Market Trust11. Morgan Stanley Dean Witter Tax-Free Daily Income Trust

EQUITY FUNDS

12. Morgan Stanley Dean Witter Aggressive Equity Fund13. Morgan Stanley Dean Witter American Opportunities Fund14. Morgan Stanley Dean Witter Capital Growth Securities15. Morgan Stanley Dean Witter Competitive Edge Fund16. Morgan Stanley Dean Witter Developing Growth Securities Trust17. Morgan Stanley Dean Witter Dividend Growth Securities Inc.18. Morgan Stanley Dean Witter Equity Fund19. Morgan Stanley Dean Witter European Growth Fund Inc.20. Morgan Stanley Dean Witter Financial Services Trust21. Morgan Stanley Dean Witter Fund of Funds22. Morgan Stanley Dean Witter Global Dividend Growth Securities23. Morgan Stanley Dean Witter Global Utilities Fund24. Morgan Stanley Dean Witter Growth Fund25. Morgan Stanley Dean Witter Health Sciences Trust26. Morgan Stanley Dean Witter Income Builder Fund



27. Morgan Stanley Dean Witter Information Fund28. Morgan Stanley Dean Witter International Fund29. Morgan Stanley Dean Witter International SmallCap Fund30. Morgan Stanley Dean Witter Japan Fund31. Morgan Stanley Dean Witter Latin American Growth Fund32. Morgan Stanley Dean Witter Market Leader Trust33. Morgan Stanley Dean Witter Mid-Cap Dividend Growth Securities34. Morgan Stanley Dean Witter Mid-Cap Equity Trust35. Morgan Stanley Dean Witter Natural Resource Development Securities Inc.36. Morgan Stanley Dean Witter New Discoveries Fund

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37. Morgan Stanley Dean Witter Next Generation Trust38. Morgan Stanley Dean Witter Pacific Growth Fund Inc.39. Morgan Stanley Dean Witter Real Estate Fund40. Morgan Stanley Dean Witter Small Cap Growth Fund41. Morgan Stanley Dean Witter S&P 500 Index Fund42. Morgan Stanley Dean Witter S&P 500 Select Fund43. Morgan Stanley Dean Witter Special Value Fund44. Morgan Stanley Dean Witter Tax-Managed Growth Fund45. Morgan Stanley Dean Witter Technology Fund46. Morgan Stanley Dean Witter Total Market Index Fund47. Morgan Stanley Dean Witter Total Return Trust48. Morgan Stanley Dean Witter 21st Century Trend Fund49. Morgan Stanley Dean Witter Utilities Fund50. Morgan Stanley Dean Witter Value-Added Market Series51. Morgan Stanley Dean Witter Value Fund

BALANCED FUNDS

52. Morgan Stanley Dean Witter Balanced Growth Fund53. Morgan Stanley Dean Witter Balanced Income Fund

ASSET ALLOCATION FUND

54. Morgan Stanley Dean Witter Strategist Fund

TAXABLE FIXED-INCOME FUNDS

55. Morgan Stanley Dean Witter Convertible Securities Trust56. Morgan Stanley Dean Witter Diversified Income Trust57. Morgan Stanley Dean Witter Federal Securities Trust58. Morgan Stanley Dean Witter High Yield Securities Inc59. Morgan Stanley Dean Witter Intermediate Income Securities60. Morgan Stanley Dean Witter North American Government Income Trust61. Morgan Stanley Dean Witter Short-Term Bond Fund62. Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust63. Morgan Stanley Dean Witter U.S. Government Securities Trust64. Morgan Stanley Dean Witter World Wide Income Trust

TAX-EXEMPT FIXED-INCOME FUNDS



65. Morgan Stanley Dean Witter California Tax-Free Income Fund66. Morgan Stanley Dean Witter Hawaii Municipal Trust67. Morgan Stanley Dean Witter Limited Term Municipal Trust68. Morgan Stanley Dean Witter Multi-State Municipal Series Trust69. Morgan Stanley Dean Witter New York Tax-Free Income Fund70. Morgan Stanley Dean Witter Select Municipal Reinvestment Fund71. Morgan Stanley Dean Witter Tax-Exempt Securities Trust

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SPECIAL PURPOSE FUNDS

72. Morgan Stanley Dean Witter Select Dimensions Investment Series73. Morgan Stanley Dean Witter Variable Investment Series

By: /s/ Barry Fink-------------------------------Barry FinkVice President and General Counsel

ATTEST:

/s/ Todd Lebo-------------------------------Assistant Secretary


By: /s/ Jonathan Thomas-------------------------------Jonathan Thomas



President

ATTEST:

/s/ Geoffrey Flynn-------------------------------Executive Vice President

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EXHIBIT A---------

Morgan Stanley Dean Witter Trust FSBHarborside Financial CenterPlaza TwoJersey City, NJ 07311

Gentlemen:

The undersigned, (inset name of investment company) a (Massachusettsbusiness trust/Maryland corporation) (the "Fund"), desires to employ and appointMorgan Stanley Dean Witter Trust FSB ("MSDW TRUST") to act as transfer agent foreach series and class of shares of the Fund, whether now or hereafter authorizedor issued ("Shares"), dividend disbursing agent and shareholder servicing agent,registrar and agent in connection with any accumulation, open-account or similarplan provided to the holders of Shares, including without limitation anyperiodic investment plan or periodic withdrawal plan.

The Fund hereby agrees that, in consideration for the payment by the Fundto MSDW TRUST of fees as set out in the fee schedule attached hereto as ScheduleA, MSDW TRUST shall provide such services to the Fund pursuant to the terms andconditions set forth in the Transfer Agency and Service Agreement annexedhereto, as if the Fund was a signatory thereto.

Please indicate MSDW TRUST's acceptance of employment and appointment bythe Fund in the capacities set forth above by so indicating in the spaceprovided below.

Very truly yours,

(name of fund)



By:------------------------------------Barry FinkVice President and General Counsel

ACCEPTED AND AGREED TO:


By:----------------------------------------

Its:---------------------------------------

Date:--------------------------------------

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SCHEDULE A----------

MORGAN STANLEY DEAN WITTER TRUST FSBSHAREHOLDER ACCOUNT MAINTENANCE FEES

RATES PER NEW TRANSFERAGENCY AGREEMENT AS OFSEPTEMBER 1, 2000-----------------

Money Market $15.70US Government Securities Trust 9.95



US Government Securities Trust-- Over 50,000 5.20

AAA Funds 11.75Fixed Income Funds 13.80Equity Funds 13.25Closed End Funds 10.20Prime Income Trust 10.45

Insurance Products:Select Dimensions $500 per annum per accountVariable Investment $500 per annum per account

A fee equal to 1/12 of the fee set forth above, for providing Forms 1099 foraccounts closed during the year, payable following the end of the calendar year(this does not apply to Select Dimensions and Variable Investment).Out-of-pocket expenses in accordance with Section 2.2 of the Agreement. Feesfor additional services not set forth in this Agreement shall be as negotiatedbetween the parties.

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CONSENT OF INDEPENDENT AUDITORS

We consent to the use in this Post-Effective Amendment No.7 to RegistrationStatement No.333-01995 of Morgan Stanley Dean Witter Income Builder Fund on FormN-1A of our report dated November 9, 2000 appearing in the Statement ofAdditional Information and incorporated by reference in the Prospectus, and tothe references to us under the captions "Financial Highlights" in the Prospectusand "Custodian and Independent Auditors" and "Experts" in the Statement ofAdditional Information, both of which are part of such Registration Statement.

Deloitte & Touche LLPNew York, New YorkNovember 27, 2000



CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form N-1A of ourreport dated November 9, 1999, relating to the financial statement and financialhighlights of Morgan Stanley Dean Witter Income Builder Fund referred to in suchreport, which appears in such Registration Statement.

PricewaterhouseCoopers LLPNew York, New YorkNovember 22, 2000



MORGAN STANLEY DEAN WITTER FUNDSMULTIPLE CLASS PLAN

PURSUANT TO RULE 18F-3

INTRODUCTION

This plan (the "Plan") is adopted pursuant to Rule 1d) of theInvestment Company Act of 1940, as amended (the "1940 Act"), effective as ofJuly 28, 1997, and amended as of June 22, 1998 and August 15, 2000. The Planrelates to shares of the open-end investment companies to which Morgan StanleyDean Witter Advisors Inc. acts as investment manager, that are listed onSchedule A, as may be amended from time to time (each, a "Fund" andcollectively, the "Funds"). The Funds are distributed pursuant to a system (the"Multiple Class System") in which each class of shares (each, a "Class" andcollectively, the "Classes") of a Fund represents a pro rata interest in thesame portfolio of investments of the Fund and differs only to the extentoutlined below.

I. DISTRIBUTION ARRANGEMENTS

One or more Classes of shares of the Funds are offered for purchase byinvestors with the sales load structures described below. In addition, pursuantto Rule 12b-1 under the 1940 Act, the Funds have each adopted a Plan ofDistribution (the "12b-1 Plan") under which shares of certain Classes aresubject to the service and/or distribution fees ("12b-1 fees") described below.

1. Class A Shares

Class A shares are offered with a front-end sales load ("FESL"). Theschedule of sales charges applicable to a Fund and the circumstances underwhich the sales charges are subject to reduction are set forth in each Fund'scurrent prospectus. As stated in each Fund's current prospectus, Class A sharesmay be purchased at net asset value (without a FESL): (i) in the case ofcertain large purchases of such shares; and (ii) by certain limited categoriesof investors, in each case, under the circumstances and conditions set forth ineach Fund's current prospectus. Class A shares purchased at net asset value maybe subject to a contingent deferred sales charge ("CDSC") on redemptions madewithin one year of purchase. Further information relating to the CDSC,including the manner in which it is calculated, is set forth in paragraph 6below. Class A shares are also subject to payments under each Fund's 12b-1 Planto reimburse Morgan Stanley Dean Witter Distributors Inc. ("MSDWDistributors"), Dean Witter Reynolds Inc. ("DWR"), its affiliates and otherbroker-dealers for distribution expenses incurred by them specifically onbehalf of the Class, assessed at an annual rate of up to 0.25% of average dailynet assets. The entire amount of the 12b-1 fee represents a service fee withinthe meaning of National Association of Securities Dealers, Inc. ("NASD")guidelines.



2. Class B Shares

Class B shares are offered without a FESL, but will in most cases besubject to a six-year declining CDSC which is calculated in the manner setforth in paragraph 6 below. The schedule of CDSC charges applicable to eachFund is set forth in each Fund's current prospectus. With the exception ofcertain of the Funds which have a different formula described below (MorganStanley Dean Witter American Opportunities Fund, Morgan Stanley Dean WitterNatural Resource Development Securities Inc., Morgan Stanley Dean WitterStrategist Fund and Morgan Stanley Dean Witter Dividend Growth

1

Securities Inc.)1, Class B shares are also subject to a fee under each Fund'srespective 12b-1 Plan, assessed at the annual rate of up to 1.0% of either: (a)the lesser of (i) the average daily aggregate gross sales of the Fund's Class Bshares since the inception of the Fund (not including reinvestment of dividendsor capital gains distributions), less the average daily aggregate net assetvalue of the Fund's Class B shares redeemed since the Fund's inception uponwhich a CDSC has been imposed or waived, or (ii) the average daily net assetsof Class B; or (b) the average daily net assets of Class B. A portion of the12b-1 fee equal to up to 0.25% of the Fund's average daily net assets ischaracterized as a service fee within the meaning of the NASD guidelines andthe remaining portion of the 12b-1 fee, if any, is characterized as anasset-based sales charge. Also, Class B shares have a conversion feature("Conversion Feature") under which such shares convert to Class A shares aftera certain holding period. Details of the Conversion Feature are set forth inSection IV below.

3. Class C Shares

Class C shares are offered without imposition of a FESL, but will in mostcases be subject to a CDSC of 1.0% on redemptions made within one year afterpurchase. Further information relating to the CDSC is set forth in paragraph 6below. In addition, Class C shares, under each Fund's 12b-1 Plan, are subjectto 12b-1 payments to reimburse MSDW Distributors, DWR, its affiliates and otherbroker-dealers for distribution expenses incurred by them specifically onbehalf of the Class, assessed at the annual rate of up to 1.0% of the averagedaily net assets of the Class. A portion of the 12b-1 fee equal to up to 0.25%of the Fund's average daily net assets is characterized as a service fee withinthe meaning of NASD guidelines. Unlike Class B shares, Class C shares do nothave the Conversion Feature.

4. Class D Shares

Class D shares are offered without imposition of a FESL, CDSC or a 12b-1fee for purchases of Fund shares by (i) investors meeting an initial minimuminvestment requirement and (ii) certain other limited categories of investors,in each case, as may be approved by the Boards of Directors/Trustees of the



Funds and as disclosed in each Fund's current prospectus. Class D shares maynot be offered for purchases of Fund shares made through certain investmentprograms approved by MSDW Distributors.

5. Additional Classes of Shares

The Boards of Directors/Trustees of the Funds have the authority to createadditional Classes, or change existing Classes, from time to time, inaccordance with Rule 18f-3 under the 1940 Act.

----------1 The payments under the 12b-1 Plan for each of Morgan Stanley Dean WitterAmerican Opportunities Fund, Morgan Stanley Dean Witter Natural ResourceDevelopment Securities Inc. and Morgan Stanley Dean Witter Dividend GrowthSecurities Inc. are assessed at the annual rate of 1.0% of the lesser of: (a)the average daily aggregate gross sales of the Fund's Class B shares since theinception of the Fund's Plan (not including reinvestment of dividends orcapital gains distributions), less the average daily aggregate net asset valueof the Fund's Class B shares redeemed since the Plan's inception upon which aCDSC has been imposed or waived, or (b) the average daily net assets of Class Battributable to shares issued, net of related shares redeemed, since inceptionof the Plan. The payments under the 12b-1 Plan for the Morgan Stanley DeanWitter Strategist Fund are assessed at the annual rate of: (i) 1% of the lesserof (a) the average daily aggregate gross sales of the Fund's Class B sharessince the effectiveness of the first amendment of the Plan on November 8, 1989(not including reinvestment of dividends or capital gains distributions), lessthe average daily aggregate net asset value of the Fund's Class B sharesredeemed since the effectiveness of the first amended Plan, upon which a CDSChas been imposed or waived, or (b) the average daily net assets of Class Battributable to shares issued, net of related shares redeemed, since theeffectiveness of the first amended Plan; plus (ii) 0.25% of the average dailynet assets of Class B attributable to shares issued, net of related sharesredeemed, prior to effectiveness of the first amended Plan.

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6. Calculation of the CDSC

Any applicable CDSC is calculated based upon the lesser of net asset valueof the shares at the time of purchase or at the time of redemption. The CDSCdoes not apply to amounts representing an increase in share value due tocapital appreciation and shares acquired through the reinvestment of dividendsor capital gains distributions. The CDSC schedule applicable to a Fund and thecircumstances in which the CDSC is subject to waiver are set forth in eachFund's prospectus.

II. EXPENSE ALLOCATIONS

Expenses incurred by a Fund are allocated among the various Classes of



shares pro rata based on the net assets of the Fund attributable to each Class,except that 12b-1 fees relating to a particular Class are allocated directly tothat Class. In addition, other expenses associated with a particular Class(except advisory or custodial fees), may be allocated directly to that Class,provided that such expenses are reasonably identified as specificallyattributable to that Class and the direct allocation to that Class is approvedby the Fund's Board of Directors/Trustees.

III. CLASS DESIGNATION

All shares of the Funds held prior to July 28, 1997 (other than the sharesheld by certain employee benefit plans established by DWR, shares of Fundsoffered with a FESL, and shares of Morgan Stanley Dean Witter Balanced GrowthFund and Morgan Stanley Dean Witter Balanced Income Fund) have been designatedClass B shares. Shares held prior to July 28, 1997 by such employee benefitplans have been designated Class D shares. Shares held prior to July 28, 1997of Funds offered with a FESL have been designated Class D shares. In addition,shares of Morgan Stanley Dean Witter American Opportunities Fund purchasedprior to April 30, 1984, shares of Morgan Stanley Dean Witter Strategist Fundpurchased prior to November 8, 1989 and shares of Morgan Stanley Dean WitterNatural Resource Development Securities Inc. and Morgan Stanley Dean WitterDividend Growth Securities Inc. purchased prior to July 2, 1984 (with respectto such shares of each Fund, including such proportion of shares acquiredthrough reinvestment of dividends and capital gains distributions as the totalnumber of shares acquired prior to each of the preceding dates in this sentencebears to the total number of shares purchased and owned by the shareholder ofthat Fund) have been designated Class D shares. Shares of Morgan Stanley DeanWitter Balanced Growth Fund and Morgan Stanley Dean Witter Balanced Income Fundheld prior to July 28, 1997 have been designated Class C shares except thatshares of Morgan Stanley Dean Witter Balanced Growth Fund and Morgan StanleyDean Witter Balanced Income Fund held prior to July 28, 1997 that were acquiredin exchange for shares of an investment company offered with a CDSC have beendesignated Class B shares and those that were acquired in exchange for sharesof an investment company offered with a FESL have been designated Class Ashares.

IV. THE CONVERSION FEATURE

Class B shares held before May 1, 1997 will convert to Class A shares inMay, 2007, except that Class B shares which were purchased before July 28, 1997by trusts for which Morgan Stanley Dean Witter Trust FSB ("MSDW Trust")provides discretionary trustee services converted to Class A shares on August29, 1997 (the CDSC was not applicable to such shares upon the conversion). Inall other instances, Class B shares of each Fund will automatically convert toClass A shares, based on the relative net asset values of the shares of the twoClasses on the conversion date, which will be approximately ten (10) yearsafter the date of the original purchase. Conversions will be effected once amonth. The 10 year period will be calculated from the last day of the month inwhich the shares were purchased or, in the case of Class B shares acquiredthrough an exchange or a series of exchanges, from the last day of the month inwhich the original Class B shares were purchased, provided that sharesoriginally purchased before May 1, 1997 will convert to Class A shares in May,



2007. Except as set forth below, the conversion of shares purchased on or afterMay 1, 1997 will take place in the month following the tenth anniversary of thepurchase. There will also be converted at that time such proportion of Class Bshares acquired through automatic reinvestment of dividends owned by theshareholder as the total number of his or her Class B shares converting at thetime bears to the total number of outstanding Class B shares purchased andowned by

3

the shareholder. In the case of Class B shares held by employer-sponsoredemployee benefit plans (whether or not qualified under the Internal RevenueCode) for which MSDW Trust serves as Trustee or Morgan Stanley Dean Witter &Co.'s Retirement Plan Services serves as recordkeeper pursuant to a writtenRecordkeeping Services Agreement, all Class B shares will convert to Class Ashares on the conversion date of the first shares of a Fund purchased by thatplan. In the case of Class B shares previously exchanged for shares of MorganStanley Dean Witter North American Government Income Trust, Morgan Stanley DeanWitter Short-Term U.S. Treasury Trust, a "Money Market Fund" or a "No-LoadFund" (as such terms are defined in the prospectus of each Fund), the period oftime the shares were held in any of such Funds (calculated from the last day ofthe month in which the shares of any of such Funds were acquired) is excludedfrom the holding period for conversion. If those shares are subsequentlyre-exchanged for Class B shares of a Fund, the holding period resumes on thelast day of the month in which Class B shares are reacquired.

Effectiveness of the Conversion Feature is subject to the continuingavailability of a ruling of the Internal Revenue Service or an opinion ofcounsel to the effect that (i) the conversion of shares does not constitute ataxable event under the Code; (ii) Class A shares received on conversion willhave a basis equal to the shareholder's basis in the converted Class B sharesimmediately prior to the conversion; and (iii) Class A shares received onconversion will have a holding period that includes the holding period of theconverted Class B shares. The Conversion Feature may be suspended if the Rulingor opinion is no longer available. In such event, Class B shares would continueto be subject to Class B fees under the applicable Fund's 12b-1 Plan.

V. EXCHANGE PRIVILEGES

Shares of each Class may be exchanged for shares of the same Class of theother Funds and for shares of certain other investment companies without theimposition of an exchange fee as described in the prospectuses and statementsof additional information of the Funds. The exchange privilege of each Fund maybe terminated or revised at any time by the Fund upon such notice as may berequired by applicable regulatory agencies as described in each Fund'sprospectus.

VI. VOTING

Each Class shall have exclusive voting rights on any matter that relates



solely to its 12b-1 Plan, except that Class B shareholders will have the rightto vote on any proposed material increase in Class A's expenses, includingpayments under the Class A 12b-1 Plan, if such proposal is submitted separatelyto Class A shareholders. If the amount of expenses, including payments underthe Class A 12b-1 Plan, is increased materially without the approval of Class Bshareholders, the Fund will establish a new Class A for Class B shareholderswhose shares automatically convert on the same terms as applied to Class Abefore the increase. In addition, each Class shall have separate voting rightson any matter submitted to shareholders in which the interests of one Classdiffer from the interests of any other Class.

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MORGAN STANLEY DEAN WITTER FUNDSMULTIPLE CLASS PLAN PURSUANT TO RULE 18F-3

SCHEDULE AAT AUGUST 15, 2000

<TABLE><CAPTION>

<S> <C>1) Morgan Stanley Dean Witter 21st Century Trend Fund2) Morgan Stanley Dean Witter Aggressive Equity Fund3) Morgan Stanley Dean Witter American Opportunities Fund4) Morgan Stanley Dean Witter Balanced Growth Fund5) Morgan Stanley Dean Witter Balanced Income Fund6) Morgan Stanley Dean Witter California Tax-Free Income Fund7) Morgan Stanley Dean Witter Capital Growth Securities8) Morgan Stanley Dean Witter Competitive Edge Fund, "Best Ideas" Portfolio9) Morgan Stanley Dean Witter Convertible Securities Trust

10) Morgan Stanley Dean Witter Developing Growth Securities Trust11) Morgan Stanley Dean Witter Diversified Income Trust12) Morgan Stanley Dean Witter Dividend Growth Securities Inc.13) Morgan Stanley Dean Witter Equity Fund14) Morgan Stanley Dean Witter European Growth Fund Inc.15) Morgan Stanley Dean Witter Federal Securities Trust16) Morgan Stanley Dean Witter Financial Services Trust17) Morgan Stanley Dean Witter Fund of Funds18 Morgan Stanley Dean Witter Global Dividend Growth Securities19) Morgan Stanley Dean Witter Global Utilities Fund20) Morgan Stanley Dean Witter Growth Fund21) Morgan Stanley Dean Witter Health Sciences Trust22) Morgan Stanley Dean Witter High Yield Securities Inc.23) Morgan Stanley Dean Witter Income Builder Fund24) Morgan Stanley Dean Witter Information Fund25) Morgan Stanley Dean Witter Intermediate Income Securities26) Morgan Stanley Dean Witter International Fund



27) Morgan Stanley Dean Witter International SmallCap Fund28) Morgan Stanley Dean Witter Japan Fund29) Morgan Stanley Dean Witter Latin American Growth Fund30) Morgan Stanley Dean Witter Market Leader Trust31) Morgan Stanley Dean Witter Mid-Cap Equity Trust32) Morgan Stanley Dean Witter Natural Resource Development Securities Inc.33) Morgan Stanley Dean Witter New Discoveries Fund34) Morgan Stanley Dean Witter New York Tax-Free Income Fund35) Morgan Stanley Dean Witter Next Generation Trust36) Morgan Stanley Dean Witter Pacific Growth Fund Inc.37) Morgan Stanley Dean Witter Real Estate Fund38) Morgan Stanley Dean Witter Small Cap Growth Fund39) Morgan Stanley Dean Witter Special Value Fund40) Morgan Stanley Dean Witter S&P 500 Index Fund41) Morgan Stanley Dean Witter S&P 500 Select Fund42) Morgan Stanley Dean Witter Strategist Fund43) Morgan Stanley Dean Witter Tax-Exempt Securities Trust44) Morgan Stanley Dean Witter Tax-Managed Growth Fund45) Morgan Stanley Dean Witter Technology Fund46) Morgan Stanley Dean Witter Total Market Index Fund47) Morgan Stanley Dean Witter Total Return Trust48) Morgan Stanley Dean Witter U.S. Government Securities Trust49) Morgan Stanley Dean Witter Utilities Fund50) Morgan Stanley Dean Witter Value-Added Market Series51) Morgan Stanley Dean Witter Value Fund52) Morgan Stanley Dean Witter World Wide Income Trust</TABLE>

5



CODE OF ETHICS

------------------------(Print Name)

MORGAN STANLEY DEAN WITTER ADVISORS INC.MORGAN STANLEY DEAN WITTER SERVICES COMPANY INC.MORGAN STANLEY DEAN WITTER DISTRIBUTORS INC.

Effective September 1, 1994 (as amended through November 1, 2000)

I. Introduction

Morgan Stanley Dean Witter Advisors Inc. ("MSDW Advisors"), a subsidiary ofMorgan Stanley Dean Witter & Co., is an investment adviser or manager of agroup of investment companies, referred to herein as the "Morgan StanleyDean Witter Funds." MSDW Advisors also serves as investment adviser to otherclients, including corporate pension funds, other institutions andindividuals ("MSDW Advisors Managed Accounts").

This Code of Ethics is adopted by MSDW Advisors in keeping with the generalprinciples and objectives set forth in Sections II and III below, and toenforce the highest legal and ethical standards in light of its fiduciaryobligations to the Morgan Stanley Dean Witter Fund shareholders and to MSDWAdvisors' other clients. It has also been adopted by Morgan Stanley DeanWitter Services Company Inc. ("Services"), a wholly owned subsidiary of MSDWAdvisors, and by Morgan Stanley Dean Witter Distributors Inc.("Distributors"), a wholly-owned subsidiary of Morgan Stanley Dean Witter &Co.), to apply to their Directors, officers and employees.

Employees, officers and Directors of MSDW Advisors, Services andDistributors are also referred to the Morgan Stanley Dean Witter PolicyStatement on Insider Trading (attached), which is incorporated in this Code.

II. General Principles

A. Shareholder and Client Interests Come First

Every officer, director or employee of MSDW Advisors, Services andDistributors owes a fiduciary duty to the shareholders of the MorganStanley Dean Witter Funds and to all other clients of MSDW Advisors. Thismeans that in every decision relating to investments, employees andaffiliates must recognize the needs and interests of the Morgan StanleyDean Witter Fund shareholders and other MSDW Advisors clients, and becertain that at all times the interests of the shareholders and otherclients are placed ahead of any personal interest.

B. Avoid Actual and Potential Conflicts of Interest

The restrictions and requirements of this Code of Ethics are designed toprevent behavior which conflicts, potentially conflicts or raises theappearance of actual or potential conflict with the interests of theshareholders of the Morgan Stanley Dean Witter Funds and MSDW AdvisorsManaged Account clients. It is of the utmost importance that thepersonal securities transactions of employees and affiliates beconducted in a manner consistent with both the letter and spirit of thisCode of Ethics, including these principles. Only then can an individual,and MSDW Advisors, Services and Distributors as a whole, be certain toavoid any actual or potential conflict of interest or any abuse of anindividual's position of trust and responsibility.

C. Avoid Undue Personal Benefit

MSDW Advisors, Services and Distributors employees and affiliates shouldensure that they do not acquire undue personal benefit or advantage as aresult of the performance of their normal duties as they relate to theMorgan Stanley Dean Witter Funds and other MSDW Advisors clients.Consistent with the first principle that the interests of the MorganStanley Dean Witter Fund shareholders and other MSDW Advisors clientsmust always come first is the fundamental standard that undue personaladvantage deriving from the management by MSDW Advisors of otherpeople's money is to be avoided.

III. Objective

The Securities and Exchange Commission's code of ethics rule contained inthe Investment Company Act of 1940 makes it unlawful for certain personsassociated with investment advisers or principal underwriters of investmentcompanies to engage in conduct which is deceitful, fraudulent, ormanipulative, or which involves false or misleading statements, in



connection with the purchase or sale of a security held or proposed to beacquired by an investment company. In addition, Section 204A of theInvestment Advisers Act of 1940 requires investment advisers to establish,maintain and enforce written policies and procedures designed to preventmisuse of material non-public information. The objective of this Code is tomaintain the behavior of certain individuals associated with MSDW Advisors,Services and Distributors (herein called "Access Persons") within thegeneral principles set forth above, as well as to prevent such persons fromengaging in conduct proscribed by the code of ethics rule and Section 204Aof the Investment Advisers Act. The Compliance Officer or ComplianceCoordinator in MSDW Advisors Risk Management Department will identify allAccess Persons and notify them of their reporting obligations at the timethey become an Access Person. Access Persons include all directors,officers and employees of MSDW Advisors, Services or Distributors exceptthose directors and officers of Distributors who meet the following threecriteria: (i) they do not devote substantially all working time to theactivities of MSDW Advisors, Services or Distributors; (ii) they do not, inconnection with their regular functions and duties, participate in, obtaininformation with respect to, or make recommendations as to, the purchaseand sale of securities; and (iii) they do not have access to informationregarding the day-to-day investment activities of MSDW Advisors, Servicesor Distributors (those Directors and officers must, however, file quarterlytransaction reports pursuant to Section V., sub-section D., below). AnOfficer or employee of MSDW Advisors, Distributors or Services on leave isnot considered an Access Person hereunder, provided that during the periodsuch person is on leave, subparagraphs (ii) and (iii) in the precedingsentence are applicable.

IV. Grounds for Disqualification from Employment

Pursuant to the terms of Section 9 of the Investment Company Act of 1940, nodirector, officer or employee of MSDW Advisors, Services or Distributors maybecome, or continue to remain, an officer, director or employee, without anexemptive order issued by the Securities and Exchange Commission, if suchdirector, officer or employee is, or becomes:

A. within the past ten years convicted of any felony or misdemeanorinvolving the purchase or sale of any security or arising out of theofficer's or employee's conduct as an affiliated person, salesman oremployee of any investment company, bank, insurance company or entity orperson required to be registered under the Commodity Exchange Act; or

B. permanently or temporarily enjoined by any court from acting as anaffiliated person, salesman or employee of any investment company, bank,insurance company or entity or person required to be registered under theCommodity Exchange Act, or from engaging in or continuing any conduct orpractice in connection with any such activity or in connection with thepurchase or sale of any security.

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It is your obligation to immediately report any conviction or injunction tothe General Counsel of MSDW Advisors.

V. Personal Transactions in Securities

A. Prohibited Conduct

No Access Person shall buy or sell any security for his own account orfor an account in which he has, or as a result of the transactionacquires, any direct or indirect beneficial ownership (referred to hereinas a "personal transaction") unless:

1. advance clearance of the transaction has been obtained; and

2. the transaction is reported in writing to MSDW Advisors in accordancewith the requirements of sub-section D below.

B. Restrictions and Limitations on Personal Securities Transactions

The following restrictions and limitations govern investments andpersonal securities transactions by Access Persons. Unless otherwiseindicated, all restrictions and limitations are applicable to all AccessPersons:

1. Securities purchased may not be sold at a profit until at least 30days from the purchase trade date and may not be sold at a profituntil at least 60 days from the purchase trade date. In addition,securities sold may not be repurchased until at least 30 days fromthe sale date. In addition, securities sold may not be purchased ata lower price until at least 60 days from the sale trade date. Anyviolation will result in disgorgement of all profits from thetransactions.



2. No short sales are permitted.

3. No transactions in options or futures are permitted, except thatlisted options may be purchased and covered call options written. Nooptions may be purchased or written if the expiration date is lessthan 60 days from the date of purchase. No option position may beclosed at a profit less than 60 days from the date established.

4. No Access Person may acquire any security in an Initial PublicOffering (IPO).

5a. Private placements of any kind may only be acquired with specialpermission of the Code of Ethics Review Committee, and, if approved,will be subject to continuous monitoring for possible futureconflict. Any Access Person wishing to request approval for privateplacements must complete an MSDW Advisors Private Placement ApprovalRequest Form and submit the form to MSDW Advisors' Risk ManagementDepartment. A copy of MSDW Advisors Private Placement ApprovalRequest Form, which may be revised at any time, is attached asExhibit A. Where the Code of Ethics Review Committee approves anyacquisition of private placements, its decision and reasons forsupporting the decision will be documented in a written report, whichis to be kept for five years in MSDW Advisors' Risk ManagementDepartment after the end of the fiscal year in which the approval wasgranted.

5b. Any Access Person who has a personal position in an issuer through aprivate placement must affirmatively disclose that interest if suchAccess Person is involved in consideration of any subsequentinvestment decision regarding any security of that issuer or anaffiliate by any Morgan Stanley Dean Witter Fund or MSDW AdvisorsManaged Account. In such event, the final investment decision shallbe independently reviewed by MSDW Advisor's Chief Investment Officer.Written records of any such circumstance shall be maintained and sentto the MSDW Advisors' Risk Management Department.

6. Access Persons with MSDW Online accounts are permitted to trade ONLYbetween the hours of 9:30 a.m. and 4:00 p.m. (New York time). Tradingafter hours is prohibited.

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THE FOLLOWING RESTRICTIONS, 7a, 7b AND 7c, APPLY ONLY TO (i) PORTFOLIOMANAGERS (AND ALL PERSONS REPORTING TO PORTFOLIO MANAGERS) AND(ii) PERSONNEL IN THE MSDW ADVISORS TRADING DEPARTMENT.

7a. No purchase or sale transactions may be made in any security by anyportfolio manager (or person reporting to a portfolio manager) for aperiod of seven (7) days before or after that security is bought orsold by any Morgan Stanley Dean Witter Fund (other than MorganStanley Dean Witter Value-Added Market Series, Morgan Stanley DeanWitter Select Dimensions Investment Series--Value-Added Portfolio,Morgan Stanley Dean Witter Index Funds, or Portfolios) or MSDWAdvisors Managed Account for which such portfolio manager (or theportfolio manager to whom such person reports) serves in thatcapacity.

7b. No purchase or sale transactions may be made in any security tradedthrough the MSDW Advisors trading department by any person employedin the MSDW Advisors trading department for a period of seven (7)days before or after that security is bought or sold by any MorganStanley Dean Witter Fund (other than Morgan Stanley Dean WitterValue-Added Market Series, Morgan Stanley Dean Witter SelectDimensions Investment Series--Value-Added Portfolio, Morgan StanleyDean Witter Index Funds, or Portfolios) or MSDW Advisors ManagedAccount.

7c. Any transactions by persons described in (a) and (b) above withinsuch enumerated period will be required to be reversed, ifapplicable, and any profits or, at the discretion of the Code ofEthics Review Committee, any differential between the sale price ofthe individual security transaction and the subsequent purchase orsale price by a relevant MSDW Fund during the enumerated period, willbe subject to disgorgement.

IMPORTANT: Regardless of the limited applicability of Restriction 8,MSDW Advisors' Risk Management Department monitors all transactionsby ALL Access Persons in order to ascertain any pattern of conductwhich may evidence conflicts or potential conflicts with theprinciples and objectives of this Code, including a pattern offrontrunning. On a quarterly basis, MSDW Advisors' Risk ManagementDepartment (i) will provide the MSDW Funds Boards of Directors with awritten report that describes issues that arose during the previous



quarter under this Code and if applicable, each MSDW Funds' Sub-Adviser's Code, including but not limited to, information aboutmaterial violations and sanctions imposed in response to the materialviolations, and (ii) on an annual basis, will certify that MSDWAdvisors has adopted procedures reasonably necessary to preventAccess Persons from violating this Code.

C. Advance Clearance Requirement

1. Procedures

(a) From Whom Obtained

Subject to the limitations and restrictions of B above, advanceclearance of a personal transaction in a security must beobtained from any two of the following officers of MSDW Advisors:

(1) CEO/President

(2) Chief Investment Officer

(3) Chief Administrative Officer

(4) General Counsel

(5) any other person so designated by the CEO or President,provided, however, that no more than ten persons, at anytime, may be Clearing Officers.

4

These officers are referred to in this Code as "ClearingOfficers."

Prior to obtaining the two signatures from the Clearing Officers,the form must be approved by the MSDW Advisors Departmentresponsible for the type of security for which permission isbeing sought, as follows:

<TABLE><S> <C>

1. Equity Trading --Equity Trading Department2. Fixed-Income Corporate --Manager,Corporate Fixed-Income

Bonds3. Municipal Bonds --Manager, Municipal Fixed-Income4. Non-Investment Grade --Manager, High Yield Fixed-Income

("Junk") Bonds5. Collateralized Mortgage --Manager, Government Fixed-Income

Obligations (CMOs) andother non-exempt Mortgageand Asset-Backed Securities

6. Convertible Securities --Manager, Convertible Securities</TABLE>

Prior to obtaining the Clearing Officers' signatures the formalso must be reviewed and initialed by the MSDW Advisors' RiskManagement Department. A copy of MSDW Advisors SecuritiesTransaction Approval Form, which may be revised at any time, isattached as Exhibit B.

The Clearing Officers will not sign unless the approvals of therelevant investment department and MSDW Advisors' Risk ManagementDepartment are indicated on the form. MSDW Advisors' RiskManagement Department has implemented procedures reasonablydesigned to monitor purchases and sales effected pursuant to theaforementioned pre-clearance procedures.

(b) Time of Clearance

All approved securities transactions, whether executed through ANMSDW BROKERAGE ACCOUNT OR AN MSDW ONLINE ACCOUNT, must takeplace, prior to 4:00 p.m. EST, on the same day that the completeadvance clearance is obtained. If the transaction is notcompleted on the date of clearance, a new clearance must beobtained, including one for any uncompleted portion.Post-approval is NOT PERMITTED under the Code of Ethics. If it isdetermined that a trade was completed before approval, it will beconsidered a violation of the Code of Ethics.

(c) Permitted Brokerage Accounts

ALL SECURITIES TRANSACTIONS MUST BE THROUGH AN MSDW BROKERAGEACCOUNT OR AN MSDW ONLINE ACCOUNT; NO OTHER BROKERAGE ACCOUNTS



ARE PERMITTED UNLESS SPECIAL PERMISSION IS OBTAINED. If youmaintain accounts outside of MSDW, you must immediately transferyour accounts to a MSDW branch. Failure to do so will beconsidered a significant violation of the Code of Ethics. In theevent permission is granted to maintain an outside brokerageaccount, it is the responsibility of the employee to arrange forduplicate confirmations of all securities transactions andmonthly brokerage statements to be sent to the MSDW Advisors'Risk Management Department.

Prior to opening an MSDW ONLINE ACCOUNT, Access Persons mustobtain approval from MSDW Advisors' Risk Management Department.NO employee may open an MSDW Online account unless a completedand signed copy of their MSDW Online account application and MSDWEmployee Account Request Form is submitted to MSDW Advisors' RiskManagement Department for approval. NO employee may apply for an

5

MSDW ONLINE ACCOUNT ONLINE. A copy of the MSDW Employee AccountRequest Form, which may be revised at any time, is attached asExhibit C.

(d) Form

Clearance must be obtained by completing and signing theSecurities Transaction Approval Form provided for that purpose byMSDW Advisors and obtaining the signature of the correctDepartment indicated in sub-section C.1 (a) and any two of theClearing Officers. The form must also indicate the name of theindividual's Financial Advisor and the Branch Office Number,whether the account is an MSDW Online Account, as well as otherrequired information.

If you have more than one account under your control, indicate onthe approval sheet for which account the trade is intended.ADDITIONALLY, PLEASE ADVISE YOUR FINANCIAL ADVISOR OR MSDW ONLINETO SEND DUPLICATE COPIES OF YOUR CONFIRMATION SLIPS AND BROKERSTATEMENTS TO THE MSDW Advisors' Risk Management Department FOREACH ACCOUNT UNDER YOUR CONTROL.

(e) Filing

After all required signatures are obtained, the SecuritiesTransaction Approval Form must be filed with the Risk ManagementDepartment of MSDW Advisors by noon of the day followingexecution of the trade for filing in the respective individual'sCode of Ethics file. A copy is retained by the employee for hisor her records. (If a preclearance request is denied, a copy ofthe form will be maintained with MSDW Advisors' Risk ManagementDepartment.)

2. Factors Considered in Clearance of Personal Transactions

In addition to the limitations and restrictions set forth under Babove, the Clearing Officers, in keeping with the general principlesand objectives of this Code of Ethics, may refuse to grant clearanceof a personal transaction in their sole discretion without beingrequired to specify any reason for the refusal. Generally, theClearing Officers will consider the following factors in determiningwhether or not to clear a proposed transaction:

(a) Whether the amount or the nature of the transaction or personmaking it is likely to affect the price or market of thesecurity.

(b) Whether the individual making the proposed purchase or sale islikely to benefit from purchases or sales being made orconsidered on behalf of any Morgan Stanley Dean Witter Fund orclient.

(c) Whether the transaction is non-volitional on the part of theindividual.

3. Exempt Securities

(a) The securities listed below are exempt from the restrictions ofsub-sections (B) (1) and (7), the advance clearance requirementof sub-section C AND the quarterly and annual reportingrequirements of sub-section D. Therefore, it is not necessary toobtain advance clearance for personal transactions in any of thefollowing securities nor is it necessary to report suchsecurities in the quarterly transaction reports or annualsecurities holdings list:



(i) U.S. Government Securities;

(ii) Bank Certificates of Deposit;

(iii) Bankers' Acceptances;

6

(iv) Commercial Paper;

(v) Purchases which are part of an automatic dividendreinvestment plan (All employees with dividend reinvestmentplans must submit a memorandum to the compliance officer inMSDW Advisors' Risk Management Department stating the nameand the amount invested in the automatic dividendreinvestment plan. Any sales must be pre-approved); and

(vi) Open-end investment companies (mutual funds) (Closed-endfunds must be pre-approved).

(b) Unit Investment Trusts are exempt from the restrictions ofsub-sections B (1) and (7) and the advance clearance requirementof sub-section C, but are subject to the quarterly and annualreporting requirements of sub-section D:

(c) Morgan Stanley Dean Witter & Co. stock (including exercise ofstock option grants), due to the fact that it may not bepurchased by any actively managed Morgan Stanley Dean Witter Fund(other than index-type funds) or for any MSDW Advisors ManagedAccount, is exempt from the restrictions of sub-section B (7) andthe advance clearance requirement of sub-section C. However, MSDWstock held in an approved brokerage account remains subject tothe quarterly and annual reporting requirements of sub-section D as well as the 60 day short swing profit restriction inSection B (1) (except in connection with the sale of MSDW stockacquired through the exercise of employee stock options). Therestrictions imposed by Morgan Stanley Dean Witter & Co. onSenior Management and other persons in connection withtransactions in Morgan Stanley Dean Witter & Co. stock are notaffected by the exemption of Morgan Stanley Dean Witter & Co.stock from the advance clearance requirements of this Code, andcontinue in effect to the extent applicable.

4. Accounts Covered

Advance clearance must be obtained for any personal transaction in asecurity by an Access Person if such Access Person has, or as aresult of the transaction acquires, any direct or indirect beneficialownership in the security.

The term "beneficial ownership" is defined by rules of the SEC whichwill be applicable in all cases. Generally, under the SEC rules, aperson is regarded as having beneficial ownership of securities heldin the name of:

(a) a husband, wife or a minor child; OR

(b) a relative sharing the same house; OR

(c) anyone else if the Access Person:

(i) obtains benefits substantially equivalent to ownership of thesecurities; or

(ii) can obtain ownership of the securities immediately or atsome future time.

5. Exemption from Clearance Requirement

Clearance is not required for any account over which the AccessPerson has no influence or control. In case of doubt the AccessPerson may state on the Securities Transaction Approval Form that heor she disclaims any beneficial ownership in the securities involved.

7

D. Report of Transactions

1. Transactions and Accounts Covered

(a) All securities transactions, except for transactions involvingexempt securities listed in Section V., sub-section C.3.(a) andSection V., sub-section D.1.(c) of this Code, must be reported inthe next quarterly transaction report after the transaction iseffected.



The quarterly report shall contain the following information:

(i) The date of the transaction, the title, interest rate andmaturity date (if applicable), number of shares andprincipal amount of each security involved;

(ii) The nature of the transaction (i.e., purchase, sale, or anyother type of acquisition or disposition);

(i) The price at which the purchase or sale was effected;

(ii) The name of the broker, dealer, or bank with or throughwhich the purchase or sale was effected; and

(iii) The date the report was submitted to MSDW Advisors' RiskManagement Department by such person.

In addition, any new brokerage account(s) opened during thequarter as well as the date(s) the account(s) was opened must bereported. The report must contain the following information:

(i) The name of the broker, dealer, or bank with whom theaccount was established;

(ii) The date the account was established; and

(iii) The date the report was submitted to MSDW Advisors' RiskManagement Department.

(b) Directors and officers who, pursuant to Section III, are exemptfrom preclearance ARE subject to the quarterly reportingrequirements.

(c) An Access Person need not make a quarterly transaction report if(i) they maintain an MSDW brokerage account or MSDW OnlineAccount AND (ii) the report would duplicate information containedin the broker trade confirms or account statements received byMSDW Advisors' Risk Management Department and (iii) no newbrokerage accounts were opened during the quarter by such person,including any account established with MSDW Online or an MSDWbroker.

2. Time of Reporting

(a) Initial Holdings Report

Each Access Person must, at the time of becoming an AccessPerson, provide an initial holdings report to the ComplianceOfficer or Compliance Coordinator disclosing (i) all securitiesbeneficially owned by the Access Person listing the title of thesecurity, number of shares held, and principal amount of thesecurity (any privately-placed securities held must be reported)(ii) the name of the broker dealer or financial institution wherethe Access Person maintains a personal account and (iii) the datethe report is submitted by the Access Person. New employees willbe required to provide a listing of all non-exempt securitiesholdings as of the date of commencement of employment as well asa listing of all outside brokerage accounts. This report must beprovided no later than 10 days after a person becomes an AccessPerson.

8

(b) Quarterly Transaction Reports

Each Access Person must submit a quarterly report of allsecurities transactions, except for transactions involving exemptsecurities listed in Section V., sub-section C.3.(a) andtransactions in accounts defined in Section V., sub-sectionD.1(c) of this Code, within 10 calendar days after the end ofeach calendar quarter. Any new brokerage Accounts(s) openedduring the quarter as well as the date(s) the account(s) wasopened must be reported within 10 calendar days after the endof each calendar quarter.

(c) Annual Holdings Reports

The January Annual Listing of Securities Holdings Report requiresall Access Persons (including those who may have been exempt fromhaving to file quarterly reports pursuant to D.1.(c), above) toprovide an annual listing of holdings of (i) all securitiesbeneficially owned listing the title of the security, number ofshares held, and principal amount of the security as ofDecember 31 of the preceding year, except securities exempt from



pre-clearance AND reporting under Section V., sub-section C.3(a), (ii) the name of any broker dealer or financial institutionwhere the account(s) are maintained, as of December 31 of thepreceding year (a current listing will also be required upon theeffectiveness of this Code) and (iii) the date the Report issubmitted by the Access Person. The information must be currentas of a date not more than 30 days before the report issubmitted.

3. Form of Reporting

The initial holdings report, quarterly transaction report and theannual listing of holdings report must be on the appropriate formsprovided by MSDW Advisors. Not submitting a quarterly transactionreport to MSDW Advisors' Risk Management Department will constitute arepresentation by an Access Person, that such person has (i) onlyexecuted reportable transactions in an exempt account as defined inSection V., sub-section D.1(c) above, or (ii) only traded securitiesexempt from the reporting requirements defined in Section V., sub-section C.3(a) above. In addition, not submitting a quarterlytransaction report will constitute a representation that during thequarter such person has not opened any new brokerage accounts ofmutual fund accounts with brokerage facilities during the quarter.Copies of MSDW Advisors' initial holdings report, quarterlytransaction report and the annual listing of holdings report, whichmay be revised at any time, are attached as Exhibits D, E, and F,respectively.

4. Responsibility to Report

The responsibility for taking the initiative to report is imposed oneach individual required to make a report. Any effort by MSDWAdvisors to facilitate the reporting process does not change or alterthat responsibility.

5. Where to File Report

All reports must be filed with the Risk Management Department of MSDWAdvisors.

6. Responsibility to Review

MSDW Advisors' Risk Management Department's Compliance Officer orCompliance Coordinator will review all initial holdings reports,quarterly transaction reports, and annual listing of holdings reportsfiled by Access Persons as well as broker confirmations and accountstatements.

9

VI. Review Committee

A Code of Ethics Review Committee, consisting of the CEO/ President, ChiefInvestment Officer and the General Counsel of MSDW Advisors, will reviewand consider any proper request of an Access Person for relief orexemption from any restriction, limitation or procedure contained herein,which restriction, limitation or procedure is claimed to cause a hardshipfor such Access Person. The committee shall meet on an ad hoc basis, asdeemed necessary upon written request by an Access Person, stating thebasis for his or her request for relief. The committee's decision issolely within its complete discretion.

VII. Service as Director

No Access Person may serve on the board of any company without priorapproval of the Code of Ethics Review Committee. If such approval isgranted, it will be subject to the implementation of Chinese Wallprocedures to isolate investment personnel serving as directors frommaking investment decisions for Morgan Stanley Dean Witter Funds orMSDW Advisors Managed Accounts concerning the company in question.

VIII. Gifts

No Access Person shall accept, directly or indirectly, anything of value,including gifts and gratuities, in excess of $100 per year from any personor entity that does business with any Morgan Stanley Dean Witter Fund orMSDW Advisors Managed Account, not including occasional meals or ticketsto theater or sporting events or other similar entertainment.

IX. Sanctions

Upon discovering a violation of this Code, MSDW Advisors may impose suchsanctions as it deems appropriate, including, but not limited to, areprimand (orally or in writing), demotion, and suspension or terminationof employment. The CEO of MSDW Advisors, in his sole discretion, is



authorized to determine the choice of sanctions to be imposed in specificcases, including termination of employment of any employee.

X. Effective Date

All employees, officers and Directors of MSDW Advisors, Services andDistributors (whether or not Access Persons) are required to sign a copyof this Code indicating their agreement to abide by the terms of thisCode.

In addition, all employees, officers and Directors of MSDW Advisors,Services and Distributors will be required to certify annually that (i)they have read and understand the terms of this Code of Ethics andrecognize the responsibilities and obligations incurred by their beingsubject to this Code, and (ii) they are in compliance with therequirements of this Code of Ethics, including but not limited to thereporting of all brokerage accounts, the preclearance for Access Personsand all non-exempt personal securities transactions in accordance withthis Code.

XI. Employee Certification

I have read and understand the terms of the above Code of Ethics. Irecognize the responsibilities and obligations, including but not limitedto my quarterly transaction, annual listing of holdings, and initialholdings reporting obligations, incurred by me as a result of my beingsubject to this Code of Ethics. I hereby agree to abide by the above Codeof Ethics.

-------------------------------------- ------------------------(Signature) (Date)

--------------------------------------(Print name)

10

EXHIBIT A

MORGAN STANLEY DEAN WITTER ADVISORSPRIVATE PLACEMENT APPROVAL REQUEST

(ATTACH A COPY OF THE PRIVATE PLACEMENT MEMORANDUM, OFFERING MEMORANDUM OR ANYOTHER RELEVANT DOCUMENTS)

------------------------------ ----------------------------NAME (PLEASE PRINT) DEPARTMENT & JOB TITLE

1. Name of the sponsor's corporation, partnership or other entity (the"Private Placement"):

---------------------------------------------------------------------------

2. Is the sponsor's corporation or partnership: [ ] Public [ ] Private

3. Type of security or fund:-------------------------------------------------

4. Nature of participation (e.g. Stockholder, General Partner, LimitedPartner). Indicate all applicable:

---------------------------------------------------------------------------

5. Planned date of transaction:----------------------------------------------

6. Size of offering (if a fund, size of fund):-------------------------------

7. Size of your participation (number of units/shares and dollar amount):

---------------------------------------------------------------------------

8. Would the investment carry limited or unlimited liability? [ ] Limited[ ] Unlimited

9. Would the investment require any use of MSDW Advisors' premises, facilitiesor materials? [ ] Yes [ ] No If "yes," please describe:



---------------------------------------------------------------------------

10. Are other MSDW Advisors' personnel or clients involved? [ ] Yes [ ] No

If "yes," please describe:------------------------------------------------

11. Describe the business to be conducted by the Private Placement:

---------------------------------------------------------------------------

If Private Placement is a fund:

o Describe investment objectives of the fund (e.g. value, growth, core orspecialty)

-----------------------------------------------------------------------

o Is this a permissible investment for an account or fund that youmanage? [ ] Yes [ ] No

If "yes", please describe which client or fund:

-----------------------------------------------------------------------

12. Will you participate in any investment decisions for the Private Placement?[ ] Yes [ ] No

If "Yes," please describe:

---------------------------------------------------------------------------

13. Describe how you became aware of this Private Placement:

---------------------------------------------------------------------------

14. Has this private placement been made available to an account or fund thatyou manage? IF no, state why:

---------------------------------------------------------------------------

15. To the best of your knowledge, will this Private Placement result in aninitial public offering ("IPO")? [ ] YES [ ] NO

--------------------------------------------------------------------------------

I understand that approval, if granted, is based upon the information providedherein and I agree to observe any conditions imposed upon such approval, I willnotify MSDW Advisors Risk Management Department in writing if any aspect of thePrivate Placement is proposed to be changed (e.g., investment focus of fund,compensation, involvement in organization's management) and I hereby acknowledgethat such changes may require further approvals, or disinvestment by me.

I represent (i) that I have read and understand the MSDW Advisors' Code ofEthics (the "Code") with respect to personal trading and recognize that I amsubject thereto; (ii) that the above trade is in compliance with the Code; (iii)that to the best of my knowledge that the above trade does not represent aconflict of interest, or an appearance of a conflict of interest, with any MSDWClient or MSDW Fund; and (iv) that I have no knowledge of any pending clientorders in this security nor is the above trade in a related security whichindirectly would result in a transaction in a security in which there arepending client orders. Furthermore, I acknowledge that no action should be takenby me to effect the trade(s) listed above until I have received formal approval.

Signature Date:------------------------------------ --------------------

Date Received by Risk Management:------------

Approved: Disapproved: Date:----------- ----------- --------------------



EXHIBIT B

SECURITIES TRANSACTION APPROVAL FORMMORGAN STANLEY DEAN WITTER ADVISORS INC.

MORGAN STANLEY DEAN WITTER SERVICES COMPANY INC.MORGAN STANLEY DEAN WITTER DISTRIBUTORS INC.

<TABLE><S> <C> <C>---------------------------------------------------------------------------------------------------------------------------

PRINT NAME DEPARTMENT NAME OF PORTFOLIO MANAGER TO WHOM YOU REPORT

IF INVESTMENT DEPARTMENT COMPLETE BOX ->---------------------------------------------------------------------------------------------------------------------------

DEAN WITTER ACCOUNT NO./MSDW NAME OF FINANCIAL ADVISOR DEANWITTER BRANCH/MSDW ONLINEONLINE ACCOUNT NO.

---------------------------------------------------------------------------------------------------------------------------</TABLE>

REQUEST FOR PERMISSION TO ENGAGE IN PERSONAL TRANSACTION--------------------------------------------------------

I hereby request permission to effect a transaction in the security asindicated below for my own account or other account in which I have a beneficialinterest or legal title. THE APPROVAL WILL BE EFFECTIVE ONLY FOR A TRANSACTIONCOMPLETED PRIOR TO THE CLOSE OF BUSINESS ON THE DAY OF APPROVAL. ANYTRANSACTION, OR PORTION THEREOF, NOT SO COMPLETED WILL REQUIRE A NEW APPROVAL.

NOTE: A SEPARATE FORM MUST BE USED FOR EACH SECURITY TRANSACTION. ADVISE YOURFINANCIAL ADVISOR/MSDW ONLINE TO SUPPLY DUPLICATE CONFIRMS AND STATEMENTS ON ALLTRANSACTIONS TO: MORGAN STANLEY DEAN WITTER ADVISORS INC., RISK MANAGEMENTDEPARTMENT, TWO WORLD TRADE CENTER, NEW YORK, N.Y. 10048

I AM FAMILIAR WITH AND AGREE TO ABIDE BY THE REQUIREMENTS SET FORTH IN THEMORGAN STANLEY DEAN WITTER ADVISORS INC. CODE OF ETHICS AND PARTICULARLY THEFOLLOWING:

1. In the case of a purchase, I agree that I will not sell the security ata profit for a minimum of sixty days from the date of the purchasetransaction. In the case of a sale, I agree that I will not purchasethe security at a profit for a minimum of sixty days from the date ofthe sale transaction. Any violation will result in disgorgement of allprofits from the transaction.

2. I represent that this security: (A) is not involved in an Initial PublicOffering (IPO) and does not involve a short sale or futures transaction.

3. For any private placement, I am aware that specific pre-approval mustbe obtained from the Morgan Stanley Dean Witter Advisors Inc. Code ofEthics Review Committee.

4. For (A) EQUITY PORTFOLIO MANAGERS AND PERSONS REPORTING TO EQUITYPORTFOLIO MANAGERS: I am aware that I must obtain the equitysecurity's description page from Bloomberg and attach thedescription to this pre-approval form and a signature from mysupervisor who reports directly to the Chief Investment Officeror the Chief Administrative Officer of the Investment Departmentas part of the pre-clearance requirement. I am aware that incertain cases I may be required to disgorge any profits from atransaction if a Morgan Stanley Dean Witter Fund buys or sellsthe same security within 7 days preceding or subsequent to mytransaction (see Section V.B. (7) of the Code of Ethics for acomplete description of the scope of this restriction).

(B) PORTFOLIO MANAGERS AND PERSONS REPORTING TO PORTFOLIOMANAGERS: I am aware that I must obtain a signature from mysupervisor who reports directly to the Chief Investment Officeror the Chief Administrative Officer of the Investment Departmentas part of the pre-clearance requirement. I am aware that incertain cases I may be required to disgorge any profits from atransaction if a Morgan Stanley Dean Witter Fund buys or sellsthe same security within 7 days preceding or subsequent to mytransaction (see Section V.B. (7) of the Code of Ethics for acomplete description of the scope of this restriction).

(C) PERSONNEL IN THE MORGAN STANLEY DEAN WITTER ADVISORS INC.TRADING DEPARTMENT: I am aware that in certain cases I may berequired to disgorge any profits from a transaction if a MorganStanley Dean Witter Fund buys or sells the same security within7 days preceding or subsequent to my transaction (see SectionV.B.(7) of the Code of Ethics for a complete description of the



scope of this restriction).

--------------------------------------------------------------------------------<TABLE><S> <C> <C> <C> <C>A. PURCHASE

-----------------------------------------------------------------------------------------------------------NAME OF SECURITY/SYMBOL CUSIP NUMBER FOR FIXED INCOME SECURITIES ONLY

-----------------------------------------------------------------------------------------------------------NUMBER OF SHARES OR ORDER PRICE EXECUTION PRICE TOTAL PRICEPRINCIPAL AMOUNT

-----------------------------------------------------------------------------------------------------------

<CAPTION>HAVE YOU SOLD ANY SHARES OF THIS SECURITY WITHIN THE PAST SIXTY DAYS? NO [ ] YES [ ] IF YES, AT WHAT PRICE PER SHARE? $

------------------------------------------------------------------------------------------------------------------------------------<S> <C> <C> <C> <C> <C> <C>B. SALE

-----------------------------------------------------------------------------------------------------------NAME OF SECURITY/SYMBOL CUSIP NUMBER FOR FIXED INCOME SECURITIES ONLY

-----------------------------------------------------------------------------------------------------------NUMBER OF SHARES OR ORDER PRICE EXECUTION PRICE TOTAL PRICE DATE ACQUIRED UNIT PRICE ATPRINCIPAL AMOUNT ACQUISITION

------------------------------------------------------------------------------------------------------------------------------------[ ] CHECK BOX IF THE SECURITY IS OFFERED THROUGH A PRIVATE DATE: YOUR SIGNATURE:PLACEMENT. IF SO, CONTACT THE MORGAN STANLEY DEAN WITTERADVISORS INC. RISK MANAGEMENT DEPARTMENT FIRST.

------------------------------------------------------------------------------------------------------------------------------------PERMISSION: GRANTED: DATE: TRADING DEPARTMENT SIGNATURE: IF APPLICABLE, RISK MANAGEMENT

-------- DEPARTMENT REVIEW:DENIED: ---------------

--------------------------------------------------------------------------------------------------------------------------------------------DATE: SIGNATURE - APPROVING OFFICER: DATE: SIGNATURE - APPROVING OFFICER:

------------------------------------------------------------------------------------------------------------------------------------</TABLE>

* IF SHARES BEING SOLD WERE PURCHASED ON MORE THAN ONE DATE, EACH ACQUISITIONDATE MUST BE LISTED FOR PURPOSES OF DETERMINING THE 60-DAY HOLDING PERIOD.THE WHITE COPY OF THIS PREAPPROVAL FORM MUST BE RETURNED TO THE RISKMANAGEMENT DEPARTMENT BY NOON OF THE DAY FOLLOWING EXECUTION OF THE TRADE.

WHITE -- RISK MANAGEMENT PINK -- EMPLOYEE COPY

EXHIBIT C

MORGAN STANLEY DEAN WITTER ADVISORS ("MSDW ADVISORS")

MSDW EMPLOYEE REQUEST FORM FOROPENING AN MSDW ONLINE BROKERAGE ACCOUNT

Please complete this form for all "employee accounts" you intend to maintain atMorgan Stanley Dean Witter Online, Inc. ("MSDW Online"). Please make additionalcopies of this page as necessary in order to include information for all youraccounts. After MSDW Advisors' Risk Management Department's review, this formwill be returned to you.

------------------------------ ----------------------- ---------------------PRINT NAME EMPLOYEE ID # FAX #

------------------------------ -----------------------------------------------SOCIAL SECURITY # DEPARTMENT/BRANCH #

Check one of the following:



[ ] I am an MSDW employee [ ] I am a subcontractor/vendor

---------------------------------------------------------------------------ACCOUNT INFORMATION

---------------------------------------------------------------------------

The following MSDW Online account is currently open or will be opened.

Account Title:---------------------------------------------------------

MSDW Online Account Number:--------------------------------------------

(TO BE COMPLETED BY MSDW ONLINE)

Employee's relationship to account owner:------------------------------

[ ] This account is NOT independently managed; I am involved in theinvestment decisions.(2)

[ ] This account is independently managed; I am NOT involved in theinvestment decisions.(3)

Name of investment manager and relationship, if any:

------------------------------------------------------------------------

By signing below, you agree to abide by MSDW Advisors Employee Trading Policyand any desk or division trading policy applicable to you with respect to anyaccount maintained at MSDW Online.

DATE: SIGNATURE:----------------------- --------------------------

PLEASE SEND DUPLICATE STATEMENTS & TRADE CONFIRMATIONS TO:----------------------------------------------------------

MSDW ADVISORS2 WORLD TRADE CENTER, 70TH FLOOR

NEW YORK, NY 10048ATTN: RISK MANAGEMENT DEPARTMENT

--------------------------------------------------------------------------------TO MSDW ONLINE:

Pursuant to NYSE Rule 407, please accept this form as notification that MSDWAdvisors has approved the employee named above to maintain the account titledabove with your firm. The employee has a beneficial interest in such account.This account must be placed in the appropriate employee account range, i.e.,MSDW Advisors, Morgan Stanley Dean Witter Services Company and Morgan StanleyDean Witter Distributors, in order to permit appropriate review by MSDWAdvisors.

DATE: APPROVED BY:----------------------- ---------------------------------

SIGNATURE

-------------------------------PRINT NAMEMSDW ADVISORS RISK MANAGEMENT

(1) An "employee" account means any brokerage account owned or controlled, inwhole or in part, directly or indirectly by you, whether held in your nameindividually, or jointly with others, or not in your name at all. Refer toSection V. subsection C.4 Accounts Covered under MSDW Advisors' Code ofEthics for further clarification. If you are unsure as to whether an accountis an employee account, MSDW Advisors, MSDW Services Company and MSDWDistributors employees should call the Risk Management Department at212-392-6532.

(2) Your participation in the selection of any investment, including mutualfunds, means that the account is NOT independently managed.

(3) You must not be involved in investment selections through recommendation,advice, and prior review or otherwise, or you must be a passive beneficiaryof the account in order to represent that you are not involved in investment



decisions for the account.

EXHIBIT D

MORGAN STANLEY DEAN WITTER ADVISORS INC.MORGAN STANLEY DEAN WITTER DISTRIBUTORS INC.

MORGAN STANLEY DEAN WITTER SERVICES COMPANY INC.

LISTING OF SECURITIES HOLDINGS AND BROKERAGE ACCOUNTS (INITIAL)---------------------------------------------------------------

I hereby certify that the following is a complete listing of allsecurities beneficially owned by me AS OF THE DATE HEREOF. I also hereby certifythat, set forth below, is a listing of all brokerage accounts and any otheraccounts holding securities maintained by me.

NOTE: The term "securities" includes all stocks, bonds, derivatives,private placements, limited partnership interests, etc. Failure to fullydisclose all securities, whether or not held in a Morgan Stanley Dean Witterbrokerage account or Morgan Stanley Dean Witter Online account, will beconsidered a violation of the Code of Ethics.

<TABLE><CAPTION>=================================================================================================

TYPE OF SECURITY NUMBER OFSHARES AND YEAR

I. TITLE OF SECURITY (Indicate if security PRINCIPAL ACQUIREDis a Private AMOUNTPlacement etc.)

<S> <C> <C> <C> <C>

-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------(Use additional sheet if necessary)</TABLE>

<TABLE><CAPTION>=================================================================================================II. NAME OF BROKERAGE ACCOUNT LOCATION ACCOUNT NUMBER

<S> <C> <C> <C>

-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------

-------------------------------------------------------------------------------------------------(Use additional sheet if necessary)</TABLE>

------------------------------- --/--/--(Sign Name) (Date)

-------------------------------



(Print Name)

EXHIBIT E



QUARTERLY SECURITIES TRANSACTIONS - CONFIDENTIAL REPORT-------------------------------------------------------

XXXXQUARTER 2000/ XXX.,XXX.,XXX.--------------------------------

The following lists all transactions in securities in which I had any direct orindirect beneficial ownership during the last calendar quarter (excludingsecurities exempted by Section V., sub-section C.3.(a) of the Morgan StanleyDean Witter Advisors Code of Ethics (revised March 1, 2000).

ANY TRANSACTIONS IN UNIT INVESTMENT TRUSTS OR MORGAN STANLEY DEAN WITTER & CO.STOCK (INCLUDING EXERCISE OF STOCK OPTION GRANTS) MUST BE REPORTED ON THIS FORM.IF ALL TRANSACTIONS LISTED BELOW WERE EXECUTED THROUGH MSDW AND ALL THEAPPLICABLE INFORMATION IS REFLECTED IN THE CONFIRMS PREVIOUSLY SENT, INDICATE SOON THIS FORM. *Use reverse side if additional space is needed.

IF NO TRANSACTIONS TOOK PLACE, WRITE "NONE".<TABLE><CAPTION>

DATE OF NUMBER OF TITLE OF SECURITY UNIT PRICE TOTAL PRICE BROKERTRANSACTION SHARES/ (INCLUDING, IF APPLICABLE,

PRINCIPAL INTEREST AND MATURITY RATE)AMOUNT

<S> <C> <C> <C> <C> <C>Purchases and Acquisitions--------------------------

---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------

Sales and Other Acquisitions----------------------------

---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------------</TABLE>

----------1) Did you submit a pre-approval request form for each of the securities

transactions listed above? YES NO--- ---

2) Which DWR branch maintains your account?-------------------------------------

3) Who is your Financial Advisor at the Branch?---------------------------------

4) (For MSDW Advisors and Distributors Directors and Officers only) To yourknowledge, are you the beneficial owner of more than 1/2 of 1% of theoutstanding securities of any issuer? YES NO

--- ---

If yes, please specify:------------------------------------------------------



-----------------------------------------------------------------------------

5) HAVE YOU RECEIVED WRITTEN PERMISSION TO MAINTAIN BROKERAGE ACCOUNT FOR YOU ORA MEMBER OF YOUR IMMEDIATE FAMILY AT A BROKER-DEALER OTHER THAN DWR?YES NO

--- ---

6) IF "YES", HAVE ALL TRANSACTIONS BEEN PRECLEARED AND REPORTED ASREQUIRED BY THE CODE OF ETHICS? YES NO

--- ---

7) HAVE YOU OPENED ANY NEW ACCOUNTS THIS QUARTER? YES___ NO___ IF "YES", WHATDATE WAS THIS ACCOUNT(S) OPENED?

---------------------------------------------

-----------------------------------------------------------------------------

WHAT IS THE NAME OF THE BROKER DEALER OR FINANCIAL INSTITUTION WITH WHOM YOUESTABLISHED THE ACCOUNT?

-----------------------------------------------------

Date: / / Name: Signed:---- ---- ---- --------------------- ----------------------

RETURN THIS FORM TO: MORGAN STANLEY DEAN WITTER ADVISORS RISK MANAGEMENTDEPARTMENT, 2 WTC/7O, BY 00/00/00. REV (03/00)

EXHIBIT F



ANNUAL LISTING OF SECURITIES HOLDINGS AND BROKERAGE ACCOUNTS------------------------------------------------------------

I hereby certify that the following is a complete listing of all securities(other than open-end mutual funds and other exempt securities as described inSection V., sub-section C.3. (a) of the Code of Ethics) beneficially owned (asdefined in Section V., sub-section C.4 of the Code of Ethics) by me AS OF THEDATE HEREOF. I also hereby certify that, set forth below, is a listing of allbrokerage accounts and any other accounts holding securities maintained by me. Ialso hereby certify that, the information contained below is current as of thedate indicated below.

NOTE: The term "securities" includes all stocks, bonds, derivatives,private placements, limited partnership interests, etc. ANY TRANSACTIONS IN UNITINVESTMENT TRUSTS OR MORGAN STANLEY DEAN WITTER & CO. STOCK (INCLUDING EXERCISEOF STOCK OPTION GRANTS) MUST BE REPORTED ON THIS FORM. Failure to fully discloseall securities holdings, whether or not held in a Morgan Stanley Dean Witterbrokerage account or MSDW Online Account, will be considered a violation of theCode of Ethics.

<TABLE><CAPTION>

NUMBER OFSHARES AND YEAR

I. TITLE OF SECURITY TYPE OF SECURITY PRINCIPAL ACQUIREDAMOUNT

<S> <C> <C> <C> <C>

------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------



------------------------------------------------------------------------------------------------------------------(Use additional sheet if necessary)</TABLE>

<TABLE><CAPTION>II. NAME OF BROKERAGE ACCOUNT LOCATION ACCOUNT NUMBER<S> <C> <C> <C>

------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------(Use additional sheet if necessary)</TABLE>

------------------------------ --/--/--(Sign Name) (Date)

------------------------------(Print Name)

PLEASE RETURN THIS FORM TO : MORGAN STANLEY DEAN WITTER ADVISORS' RISKMANAGEMENT DEPARTMENT, 2 WTC /7O, BY 00/10/00.



MORGAN STANLEY DEAN WITTER FUNDSCODE OF ETHICS

I. INTRODUCTION

This Code of Ethics is adopted by the investment companies listed onSchedule A attached hereto, which list may be amended from time to time(each a "Fund" and collectively the "Morgan Stanley Dean Witter Funds" orthe "Funds"), in compliance with Rule 17j-1 promulgated by the Securitiesand Exchange Commission ("SEC") under the Investment Company Act of 1940, asamended. This Code covers all persons who are "Access Persons," as that termis defined in Rule 17j-1. To the extent that any such individuals are"Access Persons" under the Code of Ethics of the Funds' Investment Advisor,Investment Manager, or Sub-Advisor, as applicable (any such entity hereinreferred to as "Investment Advisor"), whose Codes have also been establishedpursuant to Rule 17j-1, compliance by such individuals with the provisionsof the Code of the applicable Investment Advisor shall constitute compliancewith this Code.

II. PERSONAL TRANSACTIONS

A. REPORTS OF TRANSACTIONS - INDEPENDENT DIRECTORS/TRUSTEES

An Independent Director/Trustee of a Morgan Stanley Dean Witter Fundshall report quarterly to the Fund any personal transaction in a security ifhe or she knows or should know at the time of entering into the transactionthat: (a) the Fund has engaged in a transaction in the same security withinthe last 15 days, or is engaging in such transaction or is going to engagein a transaction in the same security in the next 15 days, or (b) the Fundor its Investment Advisor has within the last 15 days considered atransaction in the same security or is considering a transaction in thesecurity or within the next 15 days is going to consider a transaction inthe security.

B. REPORTS OF TRANSACTIONS, BROKERAGE ACCOUNTS AND HOLDINGS - ACCESSPERSONS WHO ARE NOT INDEPENDENT DIRECTORS/ TRUSTEES

An Access Person who is not an Independent Director/Trustee of a MorganStanley Dean Witter Fund shall report all non-exempt securities transactionsand new brokerage accounts on a quarterly basis.

An Access Person who is not an Independent Director/Trustee of a MorganStanley Dean Witter Fund shall provide an annual listing of holdings of (i)all securities beneficially owned as of December 31 of the preceding year,except securities exempt from pre-clearance and reporting under Section D.,(2) hereof listing the title of the security, number of shares held, andprincipal amount of the security, (ii) the name of any broker dealer or



financial institution where the account(s) are maintained, as of December 31of the preceding year (a current listing will also be required upon theeffectiveness of this Code) and (iii) the date the Report is submitted bythe Access Person. The information must be current as of a date not morethan 30 days before the report is submitted. New Access Persons, who are notIndependent Directors/Trustees of a Morgan Stanley Dean Witter Fund, will berequired to provide a listing of all non-exempt securities holdings, withthe information set forth above, as of the date of commencement ofemployment as well as a listing of all outside brokerage accounts no laterthan ten days after that person becomes an Access Person.

C. REPORTS OF TRANSACTIONS, BROKERAGE ACCOUNTS AND HOLDINGS - GENERAL

Any quarterly report required under A or B above must be made within tendays after the end of the calendar quarter in which the personal transactionoccurred. The report may be made on the form provided by the InvestmentAdvisor or may consist of a broker statement that provides at least the sameinformation. In the event that MSDW Advisors already maintains a record ofthe required information, an Access Person may satisfy this requirement by(i) confirming in writing (which may include e-mail) the accuracy andcompleteness of the record and disclose the beneficial ownership of

securities (if any) not listed on the account statement and (ii) recordingthe date of the confirmation. Copies of the Investment Advisor's forms,which may be revised at any time, are attached.

The Funds' Compliance Officer will identify and advise all AccessPersons, including the Independent Directors/Trustees, subject to thereporting requirement under A or B above, of their reporting requirement.Each report required under A or B above will be submitted for review by theCompliance Officer or Compliance Coordinator in the Risk ManagementDepartment of the Investment Advisor.

D. DEFINITIONS AND EXEMPTIONS

(1) DEFINITIONS

For purposes of this Code the term "personal transaction" means thepurchase or sale, or other acquisition or disposition, of a security forthe account of the individual making the transaction or for an account inwhich he or she has, or as a result of the transaction acquires, anydirect or indirect beneficial ownership in a security.



The term "beneficial ownership" is defined by rules of the SEC.Generally, under SEC rules a person is regarded as having beneficialownership of securities held in the name of:

(a) a husband, wife, or minor child;

(b) a relative sharing the same house;

(c) anyone else if the access person -

(i) obtains benefits substantially equivalent to ownership of thesecurities; or

(ii) can obtain ownership of the securities immediately or atsome future time.

The term "Access Person" is defined by rules of the SEC as (i) anydirector, officer, or general partner of a fund or of a fund's investmentadviser, or any employee of a fund or of a fund's investment adviser who,in connection with his or her regular functions or duties, participatesin the selection of a fund's portfolio securities or who has access toinformation regarding a fund's future purchases or sales of portfoliosecurities; or (ii) any director, officer, or general partner of aprincipal underwriter who in the ordinary course of business, makes,participates in or obtains information regarding, the purchase or sale ofsecurities for the fund for which the principal underwriter acts, orwhose functions or duties in the ordinary course of business relate tothe making of any recommendation to the fund regarding the purchase orsale of securities.

(2) EXEMPTIONS

No report is required for a personal transaction in any of thefollowing securities:

(i) Securities issued by the U.S. Government;

(ii) Bank certificates of deposit;

(iii) Bankers' acceptances;

(iv) Commercial paper;

(v) Open-end mutual fund shares.

Also, no report is required with respect to any account over whichthe access person has no influence or control.

III. CODE VIOLATIONS



Any officer of a Morgan Stanley Dean Witter Fund who discovers aviolation or apparent violation of this Code by an access person shall bringthe matter to the attention of the Chief Executive Officer or GeneralCounsel of the Fund who shall then report the matter to the Board ofDirectors or the Board of Trustees, as the case may be, of the fund. TheBoard shall determine

whether a violation has occurred and, if it so finds, may impose suchsanctions, if any, as it considers appropriate.

IV. ADMINISTRATION OF CODE OF ETHICS

On a quarterly basis, the Board of Directors or the Board of Trustees ofeach of the Funds shall be provided with a written report by each of theFunds and the Investment Advisors, that describes any new issues arisingunder the Code of Ethics, including information on material violations ofthe Code of Ethics or procedures and sanctions imposed, and certifies thateach Fund and the Investment Advisors have adopted procedures reasonablynecessary to prevent Access Persons from violating the Code of Ethics.

Rev. March 1, 2000

MORGAN STANLEY DEAN WITTER FUNDSAT

AUGUST 1, 2000

MONEY MARKET FUNDS

1. Active Assets California Tax-Free Trust ("AA CALIFORNIA")

2. Active Assets Government Securities Trust ("AA GOVERNMENT")

3. Active Assets Institutional Money Trust ("AA INSTITUTIONAL")

4. Active Assets Money Trust ("AA MONEY")

5. Active Assets Premier Money Trust ("AA PREMIER")

6. Active Assets Tax-Free Trust ("AA TAX-FREE")

7. Morgan Stanley Dean Witter California Tax-Free Daily Income Trust("CALIFORNIA TAX-FREE DAILY")

8. Morgan Stanley Dean Witter Liquid Asset Fund Inc. ("LIQUID ASSET")

9. Morgan Stanley Dean Witter New York Municipal Money Market Trust ("NEWYORK MONEY")



10. Morgan Stanley Dean Witter Tax-Free Daily Income Trust ("TAX-FREEDAILY")

11. Morgan Stanley Dean Witter U.S. Government Money Market Trust("GOVERNMENT MONEY")

EQUITY FUNDS

12. Morgan Stanley Dean Witter Aggressive Equity Fund ("AGGRESSIVE EQUITY")

13. Morgan Stanley Dean Witter American Opportunities Fund ("AMERICANOPPORTUNITIES")

14. Morgan Stanley Dean Witter Capital Growth Securities ("CAPITAL GROWTH")

15. Morgan Stanley Dean Witter Competitive Edge Fund ("COMPETITIVE EDGE")

16. Morgan Stanley Dean Witter Developing Growth Securities Trust("DEVELOPING GROWTH")

17. Morgan Stanley Dean Witter Dividend Growth Securities Inc. ("DIVIDENDGROWTH")

18. Morgan Stanley Dean Witter Equity Fund ("EQUITY FUND")

19. Morgan Stanley Dean Witter European Growth Fund Inc. ("EUROPEANGROWTH")

20. Morgan Stanley Dean Witter Financial Services Trust ("FINANCIALSERVICES")

21. Morgan Stanley Dean Witter Fund of Funds ("FUND OF FUNDS")

22. Morgan Stanley Dean Witter Global Dividend Growth Securities ("GLOBALDIVIDEND GROWTH")

23. Morgan Stanley Dean Witter Global Utilities Fund ("GLOBAL UTILITIES")

24. Morgan Stanley Dean Witter Growth Fund ("GROWTH FUND")

25. Morgan Stanley Dean Witter Health Sciences Trust ("HEALTH SCIENCES")

26. Morgan Stanley Dean Witter Income Builder Fund ("INCOME BUILDER")

27. Morgan Stanley Dean Witter Information Fund ("INFORMATION FUND")

28. Morgan Stanley Dean Witter International Fund ("INTERNATIONAL FUND")

29. Morgan Stanley Dean Witter International SmallCap Fund ("INTERNATIONALSMALLCAP")



30. Morgan Stanley Dean Witter Japan Fund ("JAPAN FUND")

31. Morgan Stanley Dean Witter Latin American Growth Fund ("LATINAMERICAN")

32. Morgan Stanley Dean Witter Market Leader Trust ("MARKET LEADER")

33. Morgan Stanley Dean Witter Mid-Cap Dividend Growth Securities ("MID-CAPDIVIDEND GROWTH")

34. Morgan Stanley Dean Witter Mid-Cap Equity Trust ("MID-CAP EQUITY")

35. Morgan Stanley Dean Witter Natural Resource Development Securities Inc.("NATURAL RESOURCE")

36. Morgan Stanley Dean Witter New Discoveries Fund ("NEW DISCOVERIES")

37. Morgan Stanley Dean Witter Next Generation Trust ("NEXT GENERATION")

38. Morgan Stanley Dean Witter Pacific Growth Fund Inc. ("PACIFIC GROWTH")

39. Morgan Stanley Dean Witter Real Estate Fund ("REAL ESTATE")

40. Morgan Stanley Dean Witter Small Cap Growth Fund ("SMALL CAP GROWTH")

41. Morgan Stanley Dean Witter S&P 500 Index Fund ("S&P500 INDEX")

42. Morgan Stanley Dean Witter S&P 500 Select Fund ("S&P 500 SELECT")

43. Morgan Stanley Dean Witter Special Value Fund ("SPECIAL VALUE")

44. Morgan Stanley Dean Witter Tax-Managed Growth Fund ("TAX-MANAGEDGROWTH")

45. Morgan Stanley Dean Witter Technology Fund ("TECHNOLOGY FUND")

46. Morgan Stanley Dean Witter Total Market Index Fund ("TOTAL MARKETINDEX")

47. Morgan Stanley Dean Witter Total Return Trust ("TOTAL RETURN")

48. Morgan Stanley Dean Witter 21st Century Trend Fund ("21ST CENTURYTREND")

49. Morgan Stanley Dean Witter Utilities Fund ("UTILITIES FUND")

50. Morgan Stanley Dean Witter Value-Added Market Series ("VALUE-ADDED")



51. Morgan Stanley Dean Witter Value Fund ("VALUE FUND")

BALANCED FUNDS

52. Morgan Stanley Dean Witter Balanced Growth Fund ("BALANCED GROWTH")

53. Morgan Stanley Dean Witter Balanced Income Fund ("BALANCED INCOME")

ASSET ALLOCATION FUND

54. Morgan Stanley Dean Witter Strategist Fund ("STRATEGIST FUND")

FIXED-INCOME FUNDS

55. Morgan Stanley Dean Witter California Tax-Free Income Fund ("CALIFORNIATAX-FREE")

56. Morgan Stanley Dean Witter Convertible Securities Trust ("CONVERTIBLESECURITIES")

57. Morgan Stanley Dean Witter Diversified Income Trust ("DIVERSIFIEDINCOME")

58. Morgan Stanley Dean Witter Federal Securities Trust ("FEDERALSECURITIES")

59. Morgan Stanley Dean Witter Hawaii Municipal Trust ("HAWAII MUNICIPAL")

60. Morgan Stanley Dean Witter High Yield Securities Inc ("HIGH YIELD")

61. Morgan Stanley Dean Witter Intermediate Income Securities("INTERMEDIATE INCOME")

62. Morgan Stanley Dean Witter Limited Term Municipal Trust ("LIMITED TERMMUNICIPAL")

63. Morgan Stanley Dean Witter Multi-State Municipal Series Trust("MULTI-STATE SERIES")

64. Morgan Stanley Dean Witter New York Tax-Free Income Fund ("NEW YORKTAX-FREE")

65. Morgan Stanley Dean Witter North American Government Income Trust("NORTH AMERICAN GOVERNMENT")

66. Morgan Stanley Dean Witter Select Municipal Reinvestment Fund("MUNICIPAL REINVESTMENT")



67. Morgan Stanley Dean Witter Short-Term Bond Fund ("SHORT-TERM BOND")

68. Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust ("SHORT-TERMTREASURY")

69. Morgan Stanley Dean Witter Tax-Exempt Securities Trust ("TAX-EXEMPTSECURITIES")

70. Morgan Stanley Dean Witter U.S. Government Securities Trust("GOVERNMENT SECURITIES")

71. Morgan Stanley Dean Witter World Wide Income Trust ("WORLD WIDEINCOME")

SPECIAL PURPOSE FUNDS

72. Morgan Stanley Dean Witter Select Dimensions Investment Series ("SELECTDIMENSIONS")

73. Morgan Stanley Dean Witter Variable Investment Series ("VARIABLEINVESTMENT")

CLOSED-END FUNDS

74. Morgan Stanley Dean Witter California Insured Municipal Income Trust("CALIFORNIA INSURED MUNICIPAL")

75. Morgan Stanley Dean Witter California Quality Municipal Securities("CALIFORNIA QUALITY MUNICIPAL")

76. Morgan Stanley Dean Witter Government Income Trust ("GOVERNMENTINCOME")

77. Morgan Stanley Dean Witter High Income Advantage Trust ("HIGH INCOME")

78. Morgan Stanley Dean Witter High Income Advantage Trust II ("HIGH INCOMEII")

79. Morgan Stanley Dean Witter High Income Advantage Trust III ("HIGHINCOME III")

80. Morgan Stanley Dean Witter Income Securities Inc. ("INCOME SECURITIES")

81. Morgan Stanley Dean Witter Insured California Municipal Securities("INSURED CALIFORNIA SECURITIES")

82. Morgan Stanley Dean Witter Insured Municipal Bond Trust ("INSUREDMUNICIPAL BOND")

83. Morgan Stanley Dean Witter Insured Municipal Income Trust ("INSUREDMUNICIPAL INCOME")



84. Morgan Stanley Dean Witter Insured Municipal Securities ("INSUREDMUNICIPAL SECURITIES")

85. Morgan Stanley Dean Witter Insured Municipal Trust ("INSURED MUNICIPALTRUST")

86. Morgan Stanley Dean Witter Municipal Income Opportunities Trust("MUNICIPAL OPPORTUNITIES")

87. Morgan Stanley Dean Witter Municipal Income Opportunities Trust II("MUNICIPAL OPPORTUNITIES II")

88. Morgan Stanley Dean Witter Municipal Income Opportunities Trust III("MUNICIPAL OPPORTUNITIES III")

89. Morgan Stanley Dean Witter Municipal Income Trust ("MUNICIPAL INCOME")

90. Morgan Stanley Dean Witter Municipal Income Trust II ("MUNICIPAL INCOMEII")

91. Morgan Stanley Dean Witter Municipal Income Trust III ("MUNICIPALINCOME III")

92. Morgan Stanley Dean Witter Municipal Premium Income Trust ("MUNICIPALPREMIUM")

93. Morgan Stanley Dean Witter New York Quality Municipal Securities ("NEWYORK QUALITY MUNICIPAL")

94. Morgan Stanley Dean Witter Prime Income Trust ("PRIME INCOME")

95. Morgan Stanley Dean Witter Quality Municipal Income Trust ("QUALITYMUNICIPAL INCOME")

96. Morgan Stanley Dean Witter Quality Municipal Investment Trust ("QUALITYMUNICIPAL INVESTMENT")

97. Morgan Stanley Dean Witter Quality Municipal Securities ("QUALITYMUNICIPAL SECURITIES")

TCW/DW TERM TRUSTSAT

AUGUST 1, 2000

1. TCW/DW Term Trust 2000 ("TERM TRUST 2000")



POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that JAMES F. HIGGINS, whose signatureappears below, constitutes and appoints Barry Fink and Marilyn Cranney, oreither of them, his true and lawful attorneys-in-fact and agents, with fullpower of substitution among himself and each of the persons appointed herein,for him and in his name, place and stead, in any and all capacities, to signany amendments to any registration statement of ANY OF THE MORGAN STANLEY DEANWITTER FUNDS AND THE TCW/DW TERM TRUSTS SET FORTH IN THE LIST ANNEXED HERETO,and to file the same, with all exhibits thereto, and other documents inconnection therewith, with the Securities and Exchange Commission, as fully toall intents and purposes as he might or could do in person, hereby ratifyingand confirming all that said attorneys-in-fact and agents, or either of them,may lawfully do or cause to be done by virtue hereof.

Dated: June 12, 2000

/s/ James F. Higgins-------------------------

James F. Higgins

MORGAN STANLEY DEAN WITTER FUNDSAT

JUNE 12, 2000

<TABLE><CAPTION>

<S> <C>OPEN-END FUNDS

TAXABLE MONEY MARKET FUNDS1. Active Assets Government Securities Trust ("AA Government")2. Active Assets Institutional Money Trust ("AA Institutional")3. Active Assets Money Trust ("AA Money")4. Active Assets Premier Money Trust ("AA Premier")5. Morgan Stanley Dean Witter Liquid Asset Fund Inc. ("Liquid Asset")6. Morgan Stanley Dean Witter U.S. Government Money Market Trust ("Government Money")

TAX-EXEMPT MONEY MARKET FUNDS7. Active Assets California Tax-Free Trust ("AA California")8. Active Assets Tax-Free Trust ("AA Tax-Free")9. Morgan Stanley Dean Witter California Tax-Free Daily Income Trust ("California Tax-Free Daily")10. Morgan Stanley Dean Witter New York Municipal Money Market Trust ("New York Money")11. Morgan Stanley Dean Witter Tax-Free Daily Income Trust ("Tax-Free Daily")

EQUITY FUNDS12. Morgan Stanley Dean Witter Aggressive Equity Fund ("Aggressive Equity")13. Morgan Stanley Dean Witter American Opportunities Fund ("American Opportunities")14. Morgan Stanley Dean Witter Capital Growth Securities ("Capital Growth")15. Morgan Stanley Dean Witter Competitive Edge Fund ("Competitive Edge")16. Morgan Stanley Dean Witter Developing Growth Securities Trust ("Developing Growth")17. Morgan Stanley Dean Witter Dividend Growth Securities Inc. ("Dividend Growth")18. Morgan Stanley Dean Witter Equity Fund ("Equity Fund")19. Morgan Stanley Dean Witter European Growth Fund Inc. ("European Growth")20. Morgan Stanley Dean Witter Financial Services Trust ("Financial Services")21. Morgan Stanley Dean Witter Fund of Funds ("Fund of Funds")22. Morgan Stanley Dean Witter Global Dividend Growth Securities ("Global Dividend Growth")



23. Morgan Stanley Dean Witter Global Utilities Fund ("Global Utilities")24. Morgan Stanley Dean Witter Growth Fund ("Growth Fund")25. Morgan Stanley Dean Witter Health Sciences Trust ("Health Sciences")26. Morgan Stanley Dean Witter Income Builder Fund ("Income Builder")27. Morgan Stanley Dean Witter Information Fund ("Information Fund")28. Morgan Stanley Dean Witter International Fund ("International Fund")29. Morgan Stanley Dean Witter International SmallCap Fund ("International SmallCap")30. Morgan Stanley Dean Witter Japan Fund ("Japan Fund")31. Morgan Stanley Dean Witter Latin American Growth Fund ("Latin American")32. Morgan Stanley Dean Witter Market Leader Trust ("Market Leader")33. Morgan Stanley Dean Witter Mid-Cap Dividend Growth Securities ("Mid-Cap Dividend Growth")34. Morgan Stanley Dean Witter Mid-Cap Equity Trust ("Mid-Cap Equity")35. Morgan Stanley Dean Witter Natural Resource Development Securities Inc. ("Natural Resource")36. Morgan Stanley Dean Witter Next Generation Trust ("Next Generation")37. Morgan Stanley Dean Witter New Discoveries Fund ("New Discoveries")</TABLE>

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<TABLE><CAPTION><S> <C>38. Morgan Stanley Dean Witter Pacific Growth Fund Inc. ("Pacific Growth")39. Morgan Stanley Dean Witter Real Estate Fund ("Real Estate")40. Morgan Stanley Dean Witter Small Cap Growth Fund ("Small Cap Growth")41. Morgan Stanley Dean Witter S&P 500 Index Fund ("S&P 500 Index")42. Morgan Stanley Dean Witter S&P 500 Select Fund ("S&P 500 Select")43. Morgan Stanley Dean Witter Special Value Fund ("Special Value")44. Morgan Stanley Dean Witter Tax-Managed Growth Fund ("Tax-Managed Growth")45. Morgan Stanley Dean Witter Total Market Index Fund ("Total Market Index")46. Morgan Stanley Dean Witter Total Return Trust ("Total Return")47. Morgan Stanley Dean Witter 21st Century Trend Fund ("21st Century Trend")48. Morgan Stanley Dean Witter Utilities Fund ("Utilities Fund")49. Morgan Stanley Dean Witter Value-Added Market Series ("Value-Added")50. Morgan Stanley Dean Witter Value Fund ("Value Fund")

BALANCED FUNDS51. Morgan Stanley Dean Witter Balanced Growth Fund ("Balanced Growth")52. Morgan Stanley Dean Witter Balanced Income Fund ("Balanced Income")

ASSET ALLOCATION FUND53. Morgan Stanley Dean Witter Strategist Fund ("Strategist Fund")

TAXABLE FIXED-INCOME FUNDS54. Morgan Stanley Dean Witter Convertible Securities Trust ("Convertible Securities")55. Morgan Stanley Dean Witter Diversified Income Trust ("Diversified Income")56. Morgan Stanley Dean Witter Federal Securities Trust ("Federal Securities")57. Morgan Stanley Dean Witter High Yield Securities Inc ("High Yield")58. Morgan Stanley Dean Witter Intermediate Income Securities ("Intermediate Income")59. Morgan Stanley Dean Witter North American Government Income Trust ("North American Government")60. Morgan Stanley Dean Witter Select Municipal Reinvestment Fund ("Municipal Reinvestment")61. Morgan Stanley Dean Witter Short-Term Bond Fund ("Short-Term Bond")62. Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust ("Short-Term Treasury")63. Morgan Stanley Dean Witter U.S. Government Securities Trust ("Government Securities")64. Morgan Stanley Dean Witter World Wide Income Trust ("World Wide Income")

TAX-EXEMPT FIXED-INCOME FUNDS65. Morgan Stanley Dean Witter California Tax-Free Income Fund ("California Tax-Free")66. Morgan Stanley Dean Witter Hawaii Municipal Trust ("Hawaii Municipal")67. Morgan Stanley Dean Witter Limited Term Municipal Trust ("Limited Term Municipal")68. Morgan Stanley Dean Witter Multi-State Municipal Series Trust ("Multi-State Series")69. Morgan Stanley Dean Witter New York Tax-Free Income Fund ("New York Tax-Free")70. Morgan Stanley Dean Witter Tax-Exempt Securities Trust ("Tax-Exempt Securities")

SPECIAL PURPOSE FUNDS71. Morgan Stanley Dean Witter Select Dimensions Investment Series ("Select Dimensions")72. Morgan Stanley Dean Witter Variable Investment Series ("Variable Investment")</TABLE>



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<TABLE><CAPTION>

<S> <C>CLOSED-END FUNDS

TAXABLE FIXED-INCOME CLOSED-END FUNDS73. Morgan Stanley Dean Witter Government Income Trust ("Government Income")74. Morgan Stanley Dean Witter High Income Advantage Trust ("High Income")75. Morgan Stanley Dean Witter High Income Advantage Trust II ("High Income II")76. Morgan Stanley Dean Witter Income Securities Inc. ("Income Securities")77. Morgan Stanley Dean Witter Prime Income Trust ("Prime Income")

TAX-EXEMPT FIXED-INCOME CLOSED-END FUNDS78. Morgan Stanley Dean Witter California Insured Municipal Income Trust ("California Insured Municipal")79. Morgan Stanley Dean Witter Insured Municipal Bond Trust ("Insured Municipal Bond")80. Morgan Stanley Dean Witter Insured Municipal Income Trust ("Insured Municipal Income")81. Morgan Stanley Dean Witter Insured Municipal Trust ("Insured Municipal Trust")82. Morgan Stanley Dean Witter Municipal Income Opportunities Trust ("Municipal Opportunities")83. Morgan Stanley Dean Witter Municipal Income Opportunities Trust III ("Municipal Opportunities III")84. Morgan Stanley Dean Witter Municipal Income Trust ("Municipal Income")85. Morgan Stanley Dean Witter Municipal Premium Income Trust ("Municipal Premium")86. Morgan Stanley Dean Witter Quality Municipal Income Trust ("Quality Municipal Income")87. Morgan Stanley Dean Witter Quality Municipal Investment Trust ("Quality Municipal Investment")

TCW/DW TERM TRUSTSAT

JUNE 12, 2000

1. TCW/DW Term Trust 2000 ("Term Trust 2000")2. TCW/DW Term Trust 2002 ("Term Trust 2002")3. TCW/DW Term Trust 2003 ("Term Trust 2003")

</TABLE>

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