MORGAN STANLEY WITTER DEAN AGGRESSIVE EQUITY FUND, N-30D, 2000-09-27

MORGAN STANLEY WITTER DEAN AGGRESSIVE EQUITY FUND
N-30D, 2000-09-27

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<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
TWO WORLD TRADE CENTER,
NEW YORK, NEW YORK 10048
LETTER TO THE SHAREHOLDERS
JULY 31, 2000

DEAR SHAREHOLDER:

Calendar year 2000 began much as the previous year had left off, with technology
stocks surging to new highs while the rest of the market lay in wait for a
change in investor sentiment. That fateful day came in March as two
government-related stories became the catalysts for a sharp correction in
new-economy stocks. The first story centered on a suggestion from the federal
government that companies in the genome field should be restricted in their
patent ability. The second concerned a ruling in favor of the Justice
Department's case that Microsoft had used its monopoly status to restrict
competition. Further contributing to the market's correction was a decision by
the Federal Reserve Board that the economy was too hot and needed to be
tempered. This development also held the implication that earnings growth would
peak in the first quarter of 2000 and decelerate thereafter. This increase of
earnings uncertainty further sparked a rotation out of new-economy issues and
into more stable growth sectors such as consumer staples and health-care stocks.
Cyclical growth sectors such as technology were further hurt by concerns about
future earnings shortfalls and higher interest rates and inflation, while
biotechnology stocks were negatively affected by fears of government
interference.

PERFORMANCE

For the 12-month period ended July 31, 2000, Morgan Stanley Dean Witter
Aggressive Equity Fund's Class Class A, B, C and D shares produced total returns
of 40.20 percent, 39.11 percent, 39.11 percent and 40.50 percent, respectively.
During the same period, the Standard & Poor's 500 Stock Index (S&P 500) returned
8.97 percent. The performance of the Fund's four share classes varies because of
differing expenses. Total return figures assume the reinvestment of all
distributions but do not reflect the deduction of any applicable sales charges.

<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
LETTER TO THE SHAREHOLDERS JULY 31, 2000, CONTINUED

PORTFOLIO STRATEGY

The Fund began the year with a significant emphasis on technology and
biotechnology. Then, with the signal from the Federal Reserve that they were
going to move to restrain the pace of economic growth by lifting interest rates,
we began to adjust our portfolio weightings. First we eliminated any highly
valued issues that were not currently profitable. Next we reduced our overall
exposure to technology stocks. We significantly trimmed back the technology
groups that were most economically sensitive, such as semiconductors and
semiconductor equipment. We added to the health-care sector with the purchase of
drug, generics, specialty pharmacy and health-care services groups. Financials
were also added, given our view that interest rates would fall in the face of a
decelerating economy. Brokers and insurance group holdings were increased. We
also purchased select consumer staples.

LOOKING AHEAD

As the calendar year comes to an end, many consumer, industrial and monetary
indicators are signaling that the economy has begun to slow. In addition, many
important measures of inflation have begun to reverse, suggesting that the
Federal Reserve appears to have successfully engineered a soft landing. During
similar periods the markets have responded quite favorably, with groups such as
health care, technology, financials and consumer staples assuming market
leadership. We believe that the Fund is well positioned to benefit from these
circumstances.

We appreciate your continuing support of Morgan Stanley Dean Witter Aggressive
Equity Fund and look forward to continuing to serve your investment needs.

Very truly yours,

<TABLE>
<S> <C>
/s/ Charles A. Fiumefreddo /s/ Mitchell M. Merin
CHARLES A. FIUMEFREDDO MITCHELL M. MERIN
CHAIRMAN OF THE BOARD PRESIDENT
</TABLE>

2
<PAGE>

MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
FUND PERFORMANCE JULY 31, 2000

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

GROWTH OF $10,000
($ in Thousands)

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D S&P 500(4)
<S> <C> <C> <C> <C> <C>
Feb-99 $9,475 $10,000 $10,000 $10,000 $10,000
Jul-99 $10,299 $10,840 $10,840 $10,890 $10,669
Jul-00 $14,440 (3) $14,680 (3) $15,080 (3) $15,300 (3) $11,626
</TABLE>

PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE. WHEN YOU SELL FUND SHARES, THEY MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE FOR CLASS A, CLASS B,
CLASS C, AND CLASS D SHARES WILL VARY DUE TO DIFFERENCES IN SALES CHARGES
AND EXPENSES.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
----------------------------------------------------------------------------------------------
CLASS A SHARES* CLASS B SHARES**
-------------------------------------------- ---------------------------------------------
PERIOD ENDED 7/31/00 PERIOD ENDED 7/31/00
------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
1 Year 40.20%(1) 32.84%(2) 1 Year 39.11%(1) 34.11%(2)
Since Inception (2/24/99) 34.21%(1) 29.25%(2) Since Inception (2/24/99) 33.23%(1) 30.75%(2)
</TABLE>

<TABLE>
<CAPTION>
CLASS C SHARES+ CLASS D SHARES++
--------------------------------------------- ---------------------------------------------
PERIOD ENDED 7/31/00 PERIOD ENDED 7/31/00
------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
1 Year 39.11%(1) 38.11%(2) 1 Year 40.50%(1)
Since Inception (2/24/99) 33.23%(1) 33.23%(2) Since Inception (2/24/99) 34.58%(1)
</TABLE>

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

(1) Figure shown assumes reinvestment of all distributions and does not reflect
the deduction of any sales charges.
(2) Figure shown assumes reinvestment of all distributions and the deduction of
the maximum applicable sales charge. See the Fund's current prospectus for
complete details on fees and sales charges.
(3) Closing value assuming a complete redemption on July 31, 2000.
(4) The Standard and Poor's 500 Index (S & P 500) is a broad-based index, the
performance of which is based on the performance of 500 widely held common
stocks chosen for market size, liquidity and industry group representation.
The Index does not include any expenses, fees or charges. The Index is
unmanaged and should not be considered an investment.
* The maximum front-end sales charge for Class A is 5.25%.
** The maximum contingent deferred sales charge (CDSC) for Class B is 5.0%.
The CDSC declines to 0% after six years.
+ The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of purchase.
++ Class D shares have no sales charge.

3
<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
PORTFOLIO OF INVESTMENT JULY 31, 2000

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (93.1%)
AEROSPACE (0.3%)
82,500 Boeing Co............................................................................ $ 4,042,500
--------------
ALCOHOLIC BEVERAGES (2.2%)
262,000 Anheuser-Busch Companies, Inc........................................................ 21,091,000
145,000 Coors (Adolph) Co. (Class B)......................................................... 9,135,000
43,000 LVMH (Louis Vuitton Moet Hennessy) (France).......................................... 3,738,130
--------------
33,964,130
--------------
BEVERAGES - NON-ALCOHOLIC (1.3%)
55,900 Coca Cola Co......................................................................... 3,427,369
374,100 PepsiCo, Inc......................................................................... 17,138,456
--------------
20,565,825
--------------
BIOTECHNOLOGY (5.3%)
69,100 Abgenix, Inc.*....................................................................... 3,463,637
106,000 Amgen Inc.*.......................................................................... 6,883,375
167,700 Celgene Corp.*....................................................................... 8,709,919
143,900 Cephalon, Inc.*...................................................................... 5,800,969
184,300 COR Therapeutics, Inc.*.............................................................. 14,836,150
13,300 deCode GENETICS, Inc.*............................................................... 341,644
43,000 Human Genome Sciences, Inc.*......................................................... 5,194,937
90,000 IDEC Pharmaceuticals Corp.*.......................................................... 11,053,125
19,000 Illumina, Inc.*...................................................................... 665,000
45,000 ImClone Systems, Inc.*............................................................... 3,290,625
101,100 Immunex Corp.*....................................................................... 5,124,506
93,100 MedImmune, Inc.*..................................................................... 5,539,450
101,000 Millennium Pharmaceuticals, Inc.*.................................................... 9,721,250
17,500 QLT PhotoTherapeutics Inc.*.......................................................... 1,152,812
14,000 Vertex Pharmaceuticals, Inc.*........................................................ 1,371,125
--------------
83,148,524
--------------
BROADCASTING (2.0%)
115,300 Clear Channel Communications, Inc.*.................................................. 8,784,419
180,000 Infinity Broadcasting Corp. (Series A)*.............................................. 6,345,000
126,000 Univision Communications, Inc. (Class A)*............................................ 15,655,500
--------------
30,784,919
--------------
BUILDING MATERIALS/DIY CHAINS (0.5%)
150,000 Home Depot, Inc. (The)............................................................... 7,762,500
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
CABLE TELEVISION (0.5%)
321,800 AT&T Corp. - Liberty Media Group (Class A)*.......................................... $ 7,160,050
--------------
CELLULAR TELEPHONE (0.5%)
141,000 Sprint Corp. (PCS Group)*............................................................ 7,790,250
--------------
CLOTHING/SHOE/ACCESSORY STORES (0.6%)
200,400 Gap, Inc. (The)...................................................................... 7,176,825
137,900 Limited (The), Inc................................................................... 2,818,331
--------------
9,995,156
--------------
COMPUTER COMMUNICATIONS (5.4%)
4,900 Avici Systems Inc.*.................................................................. 482,037
34,000 Brocade Communications Systems, Inc.*................................................ 6,073,250
587,300 Cisco Systems, Inc.*................................................................. 38,431,444
113,100 Extreme Networks, Inc.*.............................................................. 15,793,355
117,080 Juniper Networks, Inc.*.............................................................. 16,676,582
50,000 Redback Networks, Inc.*.............................................................. 6,500,000
--------------
83,956,668
--------------
COMPUTER SOFTWARE (4.7%)
173,920 Check Point Software Technologies Ltd. (Israel)*..................................... 20,174,720
72,000 i2 Technologies, Inc.*............................................................... 9,342,000
33,690 Mercury Interactive Corp.*........................................................... 3,344,259
209,000 Oracle Corp.*........................................................................ 15,714,187
191,200 PeopleSoft, Inc.*.................................................................... 4,170,550
45,000 Rational Software Corp.*............................................................. 4,578,750
90,000 Siebel Systems, Inc.*................................................................ 13,050,000
17,100 Support.com, Inc.*................................................................... 583,537
30,000 TIBCO Software, Inc.*................................................................ 3,090,000
--------------
74,048,003
--------------
CONTRACT DRILLING (2.4%)
352,400 ENSCO International Inc.............................................................. 11,893,500
118,100 Global Marine, Inc.*................................................................. 3,343,706
240,000 Nabors Industries, Inc.*............................................................. 9,990,000
135,000 R&B Falcon Corp.*.................................................................... 2,691,562
175,000 Rowan Companies, Inc.*............................................................... 4,418,750
102,500 Transocean Sedco Forex Inc........................................................... 5,073,750
--------------
37,411,268
--------------
DEPARTMENT STORES (0.5%)
143,100 Kohl's Corp.*........................................................................ 8,120,925
--------------
DISCOUNT CHAINS (0.4%)
115,400 Wal-Mart Stores, Inc................................................................. 6,339,787
--------------
DIVERSIFIED COMMERCIAL SERVICES (0.7%)
240,000 Paychex, Inc......................................................................... 10,980,000
--------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
PORTFOLIO OF INVESTMENT JULY 31, 2000, CONTINUED

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
DIVERSIFIED ELECTRONIC PRODUCTS (0.5%)
71,000 JDS Uniphase Corp.*.................................................................. $ 8,386,875
--------------
DIVERSIFIED FINANCIAL SERVICES (4.1%)
320,500 American Express Co.................................................................. 18,168,344
303,000 AXA Financial, Inc................................................................... 11,589,750
492,500 Citigroup, Inc....................................................................... 34,752,031
--------------
64,510,125
--------------
DIVERSIFIED MANUFACTURING (1.1%)
307,000 Tyco International Ltd. (Bermuda).................................................... 16,424,500
--------------
E.D.P. PERIPHERALS (2.5%)
366,400 EMC Corp.*........................................................................... 31,189,800
87,100 Network Appliance, Inc.*............................................................. 7,506,931
--------------
38,696,731
--------------
E.D.P. SERVICES (0.3%)
38,000 Amdocs Ltd.*......................................................................... 2,553,125
18,700 StorageNetworks, Inc.*............................................................... 2,040,637
--------------
4,593,762
--------------
ELECTRIC UTILITIES (0.3%)
74,800 Calpine Corp.*....................................................................... 5,329,500
--------------
ELECTRICAL PRODUCTS (0.1%)
17,900 Capstone Turbine Corp.*.............................................................. 984,500
--------------
ELECTRONIC COMPONENTS (1.7%)
73,000 Flextronics International, Ltd. (Singapore)*......................................... 5,168,172
222,000 Jabil Circuit, Inc.*................................................................. 11,113,875
105,490 Sanmina Corp.*....................................................................... 9,797,384
--------------
26,079,431
--------------
ELECTRONIC DATA PROCESSING (2.4%)
280,000 Dell Computer Corp.*................................................................. 12,302,500
235,400 Sun Microsystems, Inc.*.............................................................. 24,819,988
--------------
37,122,488
--------------
FINANCE COMPANIES (1.3%)
75,300 Capital One Financial Corp........................................................... 4,414,462
308,900 MBNA Corp............................................................................ 10,309,537
55,000 Providian Financial Corp............................................................. 5,606,562
--------------
20,330,561
--------------
GENERIC DRUGS (2.6%)
251,300 Alpharma Inc. (Class A).............................................................. 16,460,150
384,400 Ivax Corp.*.......................................................................... 18,931,700
85,000 Watson Pharmaceuticals, Inc.*........................................................ 4,696,250
--------------
40,088,100
--------------
HOSPITAL/NURSING MANAGEMENT (0.7%)
300,000 HCA-The Healthcare Corp.............................................................. 10,200,000
--------------
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
INSURANCE BROKERS/SERVICES (1.1%)
135,000 Marsh & McLennan Companies, Inc...................................................... $ 16,470,000
--------------
INTERNET SERVICES (2.7%)
131,000 America Online, Inc.*................................................................ 6,983,937
67,000 Ariba, Inc.*......................................................................... 7,767,812
116,080 Art Technology Group, Inc.*.......................................................... 10,098,960
233,200 BEA Systems, Inc.*................................................................... 10,042,175
13,100 Blue Martini Software, Inc.*......................................................... 778,631
43,800 VeriSign, Inc.*...................................................................... 6,950,512
--------------
42,622,027
--------------
INVESTMENT BANKERS/BROKERS/SERVICES (3.6%)
17,300 Bear Stearns Companies, Inc.......................................................... 932,038
244,000 Lehman Brothers Holdings, Inc........................................................ 27,419,500
162,000 Merrill Lynch & Co., Inc............................................................. 20,938,500
198,910 Schwab (Charles) Corp................................................................ 7,185,624
--------------
56,475,662
--------------
INVESTMENT MANAGERS (0.2%)
65,000 Stillwell Financial, Inc.*........................................................... 2,864,063
--------------
MAJOR BANKS (1.7%)
373,090 Bank of New York Co., Inc............................................................ 17,465,276
87,100 State Street Corp.................................................................... 8,742,663
--------------
26,207,939
--------------
MAJOR PHARMACEUTICALS (3.0%)
82,000 Abbott Laboratories.................................................................. 3,413,250
192,000 American Home Products Corp.......................................................... 10,188,000
75,300 Aventis S.A. (France)................................................................ 5,796,257
86,000 Lilly (Eli) & Co..................................................................... 8,933,250
430,000 Pfizer Inc........................................................................... 18,543,750
--------------
46,874,507
--------------
MANAGED HEALTH CARE (0.9%)
181,000 UnitedHealth Group Inc............................................................... 14,808,063
--------------
MEDIA CONGLOMERATES (3.3%)
330,000 Disney (Walt) Co. (The).............................................................. 12,766,875
222,000 Fox Entertainment Group, Inc. (Series A)*............................................ 6,798,750
161,000 News Corporation Ltd. (The) (ADR) (Australia)........................................ 7,929,250
373,000 Viacom, Inc. (Class B)*.............................................................. 24,734,563
--------------
52,229,438
--------------
MEDICAL SPECIALTIES (2.9%)
164,500 ALZA Corp. (Class A)*................................................................ 10,651,375
46,200 Baxter International, Inc............................................................ 3,592,050
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
PORTFOLIO OF INVESTMENT JULY 31, 2000, CONTINUED

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
53,000 Beckman Coulter, Inc................................................................. $ 3,531,125
112,000 Biomet, Inc.......................................................................... 5,012,000
50,000 Inhale Therapeutic Systems, Inc.*.................................................... 4,059,375
50,000 MiniMed, Inc.*....................................................................... 6,303,125
105,000 Novoste Corp.*....................................................................... 6,116,250
52,000 Qiagen N.V. (Netherlands)*........................................................... 2,587,000
89,620 Stryker Corp......................................................................... 3,848,059
--------------
45,700,359
--------------
MEDICAL/DENTAL DISTRIBUTORS (1.0%)
95,000 Andrx Corp.*......................................................................... 7,415,938
109,000 Cardinal Health, Inc................................................................. 8,011,500
--------------
15,427,438
--------------
MID-SIZED BANKS (0.9%)
195,400 Northern Trust Corp.................................................................. 14,630,575
--------------
MILITARY/GOV'T/TECHNICAL (0.5%)
63,800 General Dynamics Corp................................................................ 3,600,713
164,400 General Motors Corp. (Class H)*...................................................... 4,253,850
--------------
7,854,563
--------------
MULTI-LINE INSURANCE (3.6%)
504,600 American International Group Inc.**.................................................. 44,247,113
59,000 AXA (ADR) (France)................................................................... 4,469,250
120,900 Hartford Financial Services Group, Inc............................................... 7,767,825
--------------
56,484,188
--------------
MULTI-SECTOR COMPANIES (0.9%)
276,300 General Electric Co.................................................................. 14,212,181
--------------
OIL/GAS TRANSMISSION (0.6%)
140,000 Dynegy, Inc. (Class A)............................................................... 9,852,500
--------------
OILFIELD SERVICES/EQUIPMENT (2.3%)
228,400 BJ Services Co.*..................................................................... 13,332,850
60,000 Cooper Cameron Corp.*................................................................ 3,877,500
194,800 Grant Predico, Inc.*................................................................. 3,920,350
123,400 Schlumberger Ltd..................................................................... 9,123,888
72,700 Smith International, Inc.*........................................................... 5,188,963
32,220 Weatherford International, Inc.*..................................................... 1,290,814
--------------
36,734,365
--------------
OTHER PHARMACEUTICALS (3.8%)
94,000 Allergan, Inc........................................................................ 6,292,125
75,369 Biovail Corp. (Canada)*.............................................................. 4,371,402
62,000 Elan Corp. PLC (ADR) (Ireland)*...................................................... 3,313,125
75,720 Forest Laboratories, Inc.*........................................................... 8,102,040
<CAPTION>
NUMBER OF
SHARES VALUE
----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
100,000 Sepracor, Inc.*...................................................................... $ 10,575,000
242,900 Serono SA (ADR) (Switzerland)*....................................................... 6,558,300
61,212 Shire Pharmaceuticals Group PLC (ADR) (United Kingdom)*.............................. 3,351,357
276,300 Teva Pharmaceutical Industries Ltd. (ADR) (Israel)................................... 16,785,225
--------------
59,348,574
--------------
OTHER TELECOMMUNICATIONS (0.0%)
100 JSAT Corp. (Japan)................................................................... 639,854
--------------
PACKAGE GOODS/COSMETICS (0.5%)
191,000 Avon Products, Inc................................................................... 7,580,313
--------------
PACKAGED FOODS (0.3%)
26,400 Groupe Danone (France)............................................................... 3,964,045
--------------
PRECISION INSTRUMENTS (0.2%)
24,130 Waters Corp.*........................................................................ 2,862,421
--------------
PROPERTY - CASUALTY INSURERS (1.2%)
231,200 ACE, Ltd. (Bermuda).................................................................. 8,323,200
68,000 Chubb Corp........................................................................... 5,032,000
115,000 St. Paul Companies, Inc.............................................................. 5,110,313
--------------
18,465,513
--------------
SEMICONDUCTORS (7.8%)
81,600 Applied Micro Circuits Corp.*........................................................ 12,178,800
82,660 Broadcom Corp. (Class A)*............................................................ 18,536,505
36,000 GlobeSpan, Inc.*..................................................................... 4,065,750
468,200 Intel Corp........................................................................... 31,252,350
441,900 Micron Technology, Inc.*............................................................. 36,014,850
37,000 PMC - Sierra, Inc.*.................................................................. 7,173,375
38,930 SDL, Inc.*........................................................................... 13,511,143
--------------
122,732,773
--------------
TELECOMMUNICATION EQUIPMENT (5.2%)
49,000 American Tower Corp. (Class A)*...................................................... 2,100,875
100,000 CIENA Corp.*......................................................................... 14,212,500
111,110 Comverse Technology, Inc.*........................................................... 9,749,903
86,000 Corning Inc.......................................................................... 20,118,625
37,800 Corvis Corporation*.................................................................. 3,112,003
16,000 New Focus, Inc.*..................................................................... 1,606,000
158,000 Nortel Networks Corp. (Canada)....................................................... 11,751,250
33,000 ONI Systems Corp.*................................................................... 2,922,563
107,000 Scientific - Atlanta, Inc............................................................ 8,239,000
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
PORTFOLIO OF INVESTMENT JULY 31, 2000, CONTINUED

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS
---------
<C> <S> <C>
SHORT-TERM INVESTMENT (a) (6.8%)
U.S. GOVERNMENT AGENCY
$106,500 Federal Home Loan Banks
6.43% due 08/01/00
(COST $106,500,000)................................................................ 106,500,000
--------------
</TABLE>

<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (COST $1,354,438,212) (b)............................................. 99.9% 1,562,500,708
OTHER ASSETS IN EXCESS OF LIABILITIES................................................... 0.1 1,010,474
----- ---------------

NET ASSETS.............................................................................. 100.0% $ 1,563,511,182
----- ---------------
----- ---------------
</TABLE>

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

ADR American Depository Receipt.
* Non-income producing security.
** Some of these securities are segregated in connection with open future
contracts.
(a) Purchased on a discount basis. The interest rate shown has been adjusted to
reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates the
aggregate cost for book purposes. The aggregate gross unrealized
appreciation is $240,363,506 and the aggregate gross unrealized
depreciation is $32,301,010, resulting in net unrealized appreciation of
$208,062,496.

FUTURES CONTRACTS OPEN AT JULY 31, 2000:

<TABLE>
<CAPTION>
UNDERLYING
NUMBER OF DESCRIPTION, DELIVERY FACE AMOUNT UNREALIZED
CONTRACTS MONTH, AND YEAR AT VALUE APPRECIATION
-------------------------------------------------------------------------------------
<C> <S> <C> <C>
(212) NASDAQ 100 Futures
September/2000
$(76,680,400) $827,702
========
</TABLE>

FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT JULY 31, 2000:

<TABLE>
<CAPTION>
CONTRACTS TO IN EXCHANGE DELIVERY UNREALIZED
DELIVER FOR DATE DEPRECIATION
-------------------------------------------------------
<S> <C> <C> <C>
$ 642,497 JPY 70,000,000 08/04/00 $ (2,643)
$ 3,986,348 EUR 4,292,396 08/31/00 (10,302)
EUR 880,820 $ 813,173 08/01/00 (2,730)
EUR 4,178,918 $ 3,857,978 08/01/00 (12,955)
JPY 31,850,589 $ 290,184 08/01/00 (955)
EUR 7,128,135 $ 6,587,110 08/02/00 (15,682)
EUR 3,560,587 $ 3,290,338 08/02/00 (7,833)
--------
Total unrealized depreciation...... $(53,100)
========
</TABLE>

CURRENCY ABBREVIATIONS:
------------------------

<TABLE>
<S> <C>
EUR Euro.
JPY Japanese Yen.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 2000

<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost $1,354,438,212)................................... $1,562,500,708
Cash........................................................................................ 21,547
Receivable for:
Investments sold........................................................................ 64,582,497
Shares of beneficial interest sold...................................................... 4,139,053
Dividends............................................................................... 200,644
Foreign withholding taxes reclaimed..................................................... 23,202
Prepaid expenses and other assets........................................................... 67,821
--------------
TOTAL ASSETS........................................................................... 1,631,535,472
--------------
LIABILITIES:
Unrealized depreciation on open forward foreign currency contracts.......................... 53,100
Payable for:
Investments purchased................................................................... 60,312,697
Variation margin........................................................................ 4,234,530
Plan of distribution fee................................................................ 1,304,982
Investment management fee............................................................... 1,014,586
Shares of beneficial interest repurchased............................................... 873,418
Accrued expenses and other payables......................................................... 230,977
--------------
TOTAL LIABILITIES...................................................................... 68,024,290
--------------
NET ASSETS............................................................................. $1,563,511,182
==============
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................. $1,226,886,122
Net unrealized appreciation................................................................. 208,889,277
Accumulated undistributed net investment income............................................. 26,112
Accumulated undistributed net realized gain................................................. 127,709,671
--------------
NET ASSETS............................................................................. $1,563,511,182
==============
CLASS A SHARES:
Net Assets.................................................................................. $67,267,426
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)................................... 4,413,604
NET ASSET VALUE PER SHARE.............................................................. $15.24
==============
MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 5.54% OF NET ASSET VALUE)...................................... $16.08
==============
CLASS B SHARES:
Net Assets.................................................................................. $1,364,482,242
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)................................... 90,491,209
NET ASSET VALUE PER SHARE.............................................................. $15.08
==============
CLASS C SHARES:
Net Assets.................................................................................. $127,180,365
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)................................... 8,434,490
NET ASSET VALUE PER SHARE.............................................................. $15.08
==============
CLASS D SHARES:
Net Assets.................................................................................. $4,581,149
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)................................... 299,493
NET ASSET VALUE PER SHARE.............................................................. $15.30
==============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 2000

<TABLE>
<S> <C>
NET INVESTMENT LOSS:

INCOME
Interest...................................................................................... $ 4,234,243
Dividends (net of $66,572 foreign withholding tax)............................................ 3,546,919
------------

TOTAL INCOME............................................................................. 7,781,162
------------

EXPENSES
Plan of distribution fee (Class A shares)..................................................... 130,745
Plan of distribution fee (Class B shares)..................................................... 10,766,166
Plan of distribution fee (Class C shares)..................................................... 1,012,370
Investment management fee..................................................................... 9,248,087
Transfer agent fees and expenses.............................................................. 1,480,689
Registration fees............................................................................. 258,605
Custodian fees................................................................................ 178,777
Shareholder reports and notices............................................................... 117,167
Offering costs................................................................................ 110,654
Professional fees............................................................................. 45,635
Trustees' fees and expenses................................................................... 13,325
Other......................................................................................... 10,946
------------

TOTAL EXPENSES........................................................................... 23,373,166
------------

NET INVESTMENT LOSS:..................................................................... (15,592,004)
------------

NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain/loss on:
Investments............................................................................... 186,540,236
Futures contracts......................................................................... (24,761,852)
Foreign exchange transactions............................................................. (277)
------------

NET GAIN................................................................................. 161,778,107
------------
Net change in unrealized appreciation/depreciation on:
Investments............................................................................... 146,963,983
Futures contracts......................................................................... (3,870,023)
Translation of forward foreign currency contracts and other assets and liabilities
denominated in foreign currencies....................................................... (2,357)
------------

NET APPRECIATION......................................................................... 143,091,603
------------

NET GAIN................................................................................. 304,869,710
------------

NET INCREASE.................................................................................. $289,277,706
============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR FEBRUARY 24, 1999*
ENDED THROUGH
JULY 31, 2000 JULY 31, 1999
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:

OPERATIONS:
Net investment loss..................................................... $ (15,592,004) $ (2,502,727)
Net realized gain (loss)................................................ 161,778,107 (17,500,970)
Net change in unrealized appreciation................................... 143,091,603 65,797,674
-------------- ------------

NET INCREASE....................................................... 289,277,706 45,793,977
Net increase from transactions in shares of beneficial interest......... 511,851,992 716,487,507
-------------- ------------

NET INCREASE....................................................... 801,129,698 762,281,484

NET ASSETS:
Beginning of period..................................................... 762,381,484 100,000
-------------- ------------

END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $26,112 AND A NET
INVESTMENT LOSS OF $853, RESPECTIVELY).............................. $1,563,511,182 $762,381,484
============== ============
</TABLE>

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

* Commencement of operations.

SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 2000

1. ORGANIZATION AND ACCOUNTING POLICIES

Morgan Stanley Dean Witter Aggressive Equity Fund (the "Fund") is registered
under the Investment Company Act of 1940, as amended (the "Act"), as a
diversified, open-end management investment company. The Fund's investment
objective is capital growth. The Fund seeks to achieve its objective by
primarily investing in equity securities of U.S. or foreign companies that offer
the potential for superior earnings growth. Prior to March 15, 2000, the fund
sought to achieve its objective by investing primarily in equity securities of
companies that were covered by Morgan Stanley Dean Witter Equity Research. The
Fund was organized as a Massachusetts business trust on October 29, 1997 and had
no operations other than those relating to organizational matters and the
issuance of 2,500 shares of beneficial interest by each class for $25,000 of
each class to Morgan Stanley Dean Witter Advisors Inc. (the "Investment
Manager") to effect the Fund's initial capitalization. The Fund commenced
operations on February 24, 1999.

The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase and some
Class A shares, and most Class B shares and Class C shares are subject to a
contingent deferred sales charge imposed on shares redeemed within one year, six
years and one year, respectively. Class D shares are not subject to a sales
charge. Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.

The following is a summary of significant accounting policies:

A. VALUATION OF INVESTMENTS -- (1) an equity portfolio security 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 when assets are valued; if there
were no sales that day, the security is valued at the latest bid price (in cases
where a security is traded on more than one exchange, the security is valued on
the exchange designated as the primary market pursuant to procedures adopted by
the Trustees); (2) all other portfolio securities for which over-the-counter
market quotations are readily available are valued at the latest available bid
price; (3) when market quotations are not readily available, including
circumstances under which it is determined by the Investment Manager that sale
or bid prices are not reflective of a security's market value, portfolio
securities are valued at their fair value as

11
<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 2000, CONTINUED

determined in good faith under procedures established by and under the general
supervision of the Trustees (valuation of debt securities for which market
quotations are not readily available may be based upon current market prices of
securities which are comparable in coupon, rating and maturity or an appropriate
matrix utilizing similar factors); and (4) short-term debt securities having a
maturity date of more than sixty days at time of purchase are valued on a
mark-to-market basis until sixty days prior to maturity 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 the time of purchase are valued
at amortized cost.

B. ACCOUNTING FOR INVESTMENTS -- Security transactions are accounted for on the
trade date (date the order to buy or sell is executed). Realized gains and
losses on security transactions are determined by the identified cost method.
Dividend income and other distributions are recorded on the ex-dividend date.
Discounts are accreted over the life of the respective securities. Interest
income is accrued daily.

C. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.

D. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities, other assets and liabilities and forward foreign currency
contracts are translated at the exchange rates prevailing at the end of the
period; and (2) purchases, sales, income and expenses are translated at the
exchange rates prevailing on the respective dates of such transactions. The
resultant exchange gains and losses are included in the Statement of Operations.
Pursuant to U.S. Federal income tax regulations, certain foreign exchange
gains/losses included in realized and unrealized gain/loss are included in or
are a reduction of ordinary income for federal income tax purposes. The Fund
does not isolate that portion of the results of operations arising as a result
of changes in the foreign exchange rates from the changes in the market prices
of the securities.

E. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward foreign
currency contracts which are valued daily at the appropriate exchange rates. The
resultant unrealized exchange gains and losses are included in the Statement of
Operations as unrealized gains/loss on

12
<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 2000, CONTINUED

foreign exchange transactions. The Fund records realized gains or losses on
delivery of the currency or at the time the forward contract is extinguished
(compensated) by entering into a closing transaction prior to delivery.

F. FUTURES CONTRACTS -- A futures contract is an agreement between two parties
to buy and sell financial instruments at a set price on a future date. Upon
entering into such a contract, the Fund is required to pledge to the broker
cash, U.S. Government securities or other liquid portfolio securities equal to
the minimum initial margin requirement of the applicable futures exchange.
Pursuant to the contract, the Fund agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in the value of the contract
which is known as variation margin. Such receipts or payments are recorded by
the Fund as unrealized gains or losses. Upon closing of the contract, the Fund
realizes a gain or loss equal to the difference between the value of the
contract at the time it was opened and the value at the time it was closed.

G. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.

H. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which may
differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.

I. OFFERING COSTS -- The Investment Manager incurred offering costs on behalf of
the Fund in the amount of approximately $195,000 which will be reimbursed for
the full amount thereof. Such expenses were deferred and were fully amortized as
of February 23, 2000.

13
<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 2000, CONTINUED

2. INVESTMENT MANAGEMENT AGREEMENT

Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined as of the close
of each business day: 0.75% to the portion of daily net assets not exceeding $2
billion and effective May 1, 2000, the Agreement was amended to reduce the
annual rate to 0.725% of the portion of daily net assets in excess of $2
billion.

3. PLAN OF DISTRIBUTION

Shares of the Fund are distributed by Morgan Stanley Dean Witter Distributors
Inc. (the "Distributor"), an affiliate of the Investment Manager. The Fund has
adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the
Act. The Plan provides that the Fund will pay the Distributor a fee which is
accrued daily and paid monthly at the following annual rates: (i) Class A -- up
to 0.25% of the average daily net assets of Class A; (ii) Class B -- 1.0% of the
average daily net assets of Class B; and (iii) Class C -- up to 1.0% of the
average daily net assets of Class C.

In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under the
Plan and the proceeds of contingent deferred sales charges paid by investors
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 such expenses.
The Distributor has advised the Fund that such excess amounts, totaled
$37,986,584 at July 31, 2000.

In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to Morgan Stanley Dean Witter Financial Advisors or other
selected broker-dealer representatives may be reimbursed in the subsequent
calendar year. For the year ended July 31, 2000, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.25% and
1.0%, respectively.

14
<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 2000, CONTINUED

The Distributor has informed the Fund that for the year ended July 31, 2000, it
received contingent deferred sales charges from certain redemptions of the
Fund's Class A shares, Class B shares and Class C shares of $18,778, $2,241,821
and $71,809, respectively and received $450,509 in front-end sales charges from
sales of the Fund's Class A shares. The respective shareholders pay such charges
which are not 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 July 31, 2000 aggregated
$5,445,451,558 and $5,009,894,410, respectively.

For the year ended July 31, 2000, the Fund incurred $143,215 in brokerage
commissions with Dean Witter Reynolds Inc., an affiliate of the Investment
Manager and Distributor, for portfolio transactions executed on behalf of the
Fund.

For the year ended July 31, 2000, the Fund incurred brokerage commissions of
$560,435 with Morgan Stanley & Co., Inc., and affiliate of the Investment
Manager and Distributor, for portfolio transactions executed on behalf of the
Fund.

Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At July 31, 2000, the Fund had
transfer agent fees and expenses payable of approximately $1,100.

5. FEDERAL INCOME TAX STATUS

Foreign currency losses incurred after October 31 ("post-October losses") within
the taxable year are deemed to arise on the first business day of the Fund's
next taxable year. The Fund incurred and will elect to defer net foreign
currency losses of approximately $27,000 during fiscal 2000.

As of July 31, 2000, the Fund had temporary book/tax differences primarily
attributable to post-October losses, capital loss deferrals on wash sales and
the mark-to-market of open futures contracts and permanent book/tax differences
primarily attributable to a net operating loss and tax adjustments on passive
foreign investment companies sold by the fund. To reflect reclassifications
arising from the permanent differences, accumulated undistributed net realized
gain was charged $16,568,319, paid-in-capital was credited $949,350 and net
investment loss was credited $15,618,969.

15
<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 2000, CONTINUED

6. SHARES OF BENEFICIAL INTEREST

Transactions in shares of beneficial interest were as follows:

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR FEBRUARY 24, 1999*
ENDED THROUGH
JULY 31, 2000 JULY 31, 1999
--------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold............................................................. 2,839,108 $ 42,020,846 3,567,692 $ 36,584,656
Redeemed......................................................... (1,383,616) (19,720,690) (612,080) (6,566,789)
----------- ------------- ---------- ------------
Net increase - Class A........................................... 1,455,492 22,300,156 2,955,612 30,017,867
----------- ------------- ---------- ------------

CLASS B SHARES
Sold............................................................. 45,648,795 687,154,089 63,987,090 653,623,096
Redeemed......................................................... (16,589,854) (240,493,299) (2,557,322) (27,155,622)
----------- ------------- ---------- ------------
Net increase - Class B........................................... 29,058,941 446,660,790 61,429,768 626,467,474
----------- ------------- ---------- ------------

CLASS C SHARES
Sold............................................................. 4,021,215 60,827,184 6,546,680 66,475,636
Redeemed......................................................... (1,496,390) (21,639,846) (639,515) (6,749,672)
----------- ------------- ---------- ------------
Net increase - Class C........................................... 2,524,825 39,187,338 5,907,165 59,725,964
----------- ------------- ---------- ------------

CLASS D SHARES
Sold............................................................. 1,904,947 28,237,332 27,278 284,773
Redeemed......................................................... (1,634,452) (24,533,624) (780) (8,571)
----------- ------------- ---------- ------------
Net increase - Class D........................................... 270,495 3,703,708 26,498 276,202
----------- ------------- ---------- ------------
Net increase in Fund............................................. 33,309,753 $ 511,851,992 70,319,043 $716,487,507
=========== ============= ========== ============
</TABLE>

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

* Commencement of operations.

7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS

The Fund may enter into forward foreign currency contracts ("forward contracts")
to facilitate settlement of foreign currency denominated portfolio transactions
or to manage foreign currency exposure associated with foreign currency
denominated securities.

To hedge against adverse interest rate, foreign currency and market risks, the
Fund may purchase and sell interest rate, currency and index futures ("futures
contracts").

Forward contracts and future contracts involve elements of market risk in excess
of the amount reflected in the Statement of Assets and Liabilities. The Fund
bears the risk of an unfavorable

16
<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 2000, CONTINUED

change in the foreign exchange rates underlying the forward contracts. Risks may
also rise upon entering into these contracts from the potential inability of the
counterparties to meet the terms of their contracts.

At July 31, 2000, there were outstanding forward contracts and outstanding index
futures contracts.

17
<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
FINANCIAL HIGHLIGHTS

Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:

SELECTED PER SHARE DATA:

Net asset value, beginning of period.................................. $ 10.87 $ 10.00
------- -------

Income (loss) from investment operations:
Net investment loss................................................ (0.08) (0.01)
Net realized and unrealized gain................................... 4.45 0.88
------- -------

Total income from investment operations............................... 4.37 0.87
------- -------

Net asset value, end of period........................................ $ 15.24 $ 10.87
======= =======

TOTAL RETURN+......................................................... 40.20 % 8.70 %(1)

RATIOS TO AVERAGE NET ASSETS(3):
Expenses.............................................................. 1.18 % 1.31 %(2)

Net investment loss................................................... (0.55)% (0.16)%(2)

SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $67,267 $32,165

Portfolio turnover rate............................................... 432 % 177 %(1)
</TABLE>

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

* Commencement of operations.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
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 specific
expenses.

SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
FINANCIAL HIGHLIGHTS, CONTINUED

SELECTED PER SHARE DATA:

Net asset value, beginning of period.................................. $ 10.84 $ 10.00
---------- --------

Income (loss) from investment operations:
Net investment loss................................................ (0.19) (0.04)
Net realized and unrealized gain................................... 4.43 0.88
---------- --------

Total income from investment operations............................... 4.24 0.84
---------- --------

Net asset value, end of period........................................ $ 15.08 $ 10.84
========== ========

TOTAL RETURN+......................................................... 39.11 % 8.40 %(1)

RATIOS TO AVERAGE NET ASSETS(3):
Expenses.............................................................. 1.93 % 2.06 %(2)

Net investment loss................................................... (1.30)% (0.91)%(2)

SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $1,364,482 $665,848

Portfolio turnover rate............................................... 432 % 177 %(1)
</TABLE>

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

SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
FINANCIAL HIGHLIGHTS, CONTINUED

SELECTED PER SHARE DATA:

Net asset value, beginning of period.................................. $ 10.84 $ 10.00
-------- -------

Total income from investment operations............................... 4.24 0.84
-------- -------

Net asset value, end of period........................................ $ 15.08 $ 10.84
======== =======

TOTAL RETURN+......................................................... 39.11 % 8.40 %(1)

RATIOS TO AVERAGE NET ASSETS(3):
Expenses.............................................................. 1.93 % 2.06 %(2)

Net investment loss................................................... (1.30)% (0.91)%(2)

SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $127,180 $64,053

Portfolio turnover rate............................................... 432 % 177 %(1)
</TABLE>

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

SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
FINANCIAL HIGHLIGHTS, CONTINUED

SELECTED PER SHARE DATA:

Net asset value, beginning of period.................................. $ 10.89 $ 10.00
------- -------

Income (loss) from investment operations:
Net investment loss................................................ (0.06) --
Net realized and unrealized gain................................... 4.47 0.89
------- -------

Total income from investment operations............................... 4.41 0.89
------- -------

Net asset value, end of period........................................ $ 15.30 $ 10.89
======= =======

TOTAL RETURN+......................................................... 40.50 % 8.90%(1)

RATIOS TO AVERAGE NET ASSETS(3):
Expenses.............................................................. 0.93 % 1.06%(2)

Net investment loss................................................... (0.30)% 0.09%(2)

SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $4,581 $316

Portfolio turnover rate............................................... 432 % 177%(1)
</TABLE>

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

* Commencement of operations.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net 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 specific
expenses.

SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE>

MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
INDEPENDENT AUDITORS' REPORT

TO THE SHAREHOLDERS AND BOARD OF TRUSTEES
OF MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND:

We have audited the accompanying statement of assets and liabilities of Morgan
Stanley Dean Witter Aggressive Equity Fund (the "Fund"), including the portfolio
of investments, as of July 31, 2000, and the related statements of operations
and changes in net assets, and financial highlights for the year then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The statement
of changes in net assets for the period ended July 31, 1999 and the financial
highlights for the respective stated period ended July 31, 1999 were audited by
other auditors whose report, dated September 9, 1999, expressed an unqualified
opinion on that statement and financial highlights.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at
July 31, 2000 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Morgan Stanley Dean
Witter Aggressive Equity Fund as of July 31, 2000, the results of its
operations, the changes in its net assets and the financial highlights for the
year then ended in conformity with accounting principles generally accepted in
the United States of America.

Deloitte & Touche LLP
NEW YORK, NEW YORK
SEPTEMBER 18, 2000

22
<PAGE>

MORGAN STANLEY DEAN WITTER AGGRESSIVE EQUITY FUND
CHANGE IN INDEPENDENT ACCOUNTANTS

On July 1, 2000, PricewaterhouseCoopers LLP resigned as independent accountants
of the Fund.

The reports of PricewaterhouseCoopers LLP on the financial statements of the
Fund for the past two fiscal years contained no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principle.

In connection with its audits for the two most recent fiscal years and through
July 1, 2000, there have been no disagreements with PricewaterhouseCoopers LLP
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of PricewaterhouseCoopers LLP would have caused them to make
reference thereto in their report on the financial statements for such years.

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.

23
<PAGE>

TRUSTEES

Michael Bozic
Charles A. Fiumefreddo MORGAN STANLEY
Edwin J. Garn DEAN WITTER
Wayne E. Hedien AGGRESSIVE
James F. Higgins EQUITY FUND
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder

OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer

Mitchell M. Merin
President

Barry Fink
Vice President, Secretary and General Counsel

Anita H. Kolleeny
Vice President

Michelle Kaufman [PHOTO]
Vice President

Thomas F. Caloia
Treasurer

TRANSFER AGENT
Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center -- Plaza Two
Jersey City, New Jersey 07311

INDEPENDENT ACCOUNTANTS
Deloitte & Touche LLP
Two World Financial Center
New York, New York 10281

INVESTMENT MANAGER
Morgan Stanley Dean Witter Advisors Inc.
Two World Trade Center
New York, New York 10048

This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and
trustees, fees, expenses and other pertinent information, please see the
prospectus of the Fund.

This report is not authorized for distribution to prospective investors in
the Fund unless preceded or accompanied by an effective prospectus. Read the
prospectus carefully before investing.

Morgan Stanley Dean Witter Distributors Inc., member NASD.

ANNUAL REPORT
JULY 31, 2000