WITTER DEAN HIGH YIELD SECURITIES INC, N-30D, 1997-11-05

WITTER DEAN HIGH YIELD SECURITIES INC
N-30D, 1997-11-05

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<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC. TWO WORLD TRADE CENTER, NEW YORK, NEW
YORK 10048
LETTER TO THE SHAREHOLDERS AUGUST 31, 1997

DEAR SHAREHOLDER:

During the twelve-month period ended August 31, 1997, the high-yield market,
benefiting from a healthy economy, improved credit quality and a relatively
favorable interest-rate environment, posted strong returns relative to other
sectors of the fixed-income market. This sector's overall vitality came despite
some market weakness in April following the Federal Reserve Board's rate hike on
March 25.

Continued strength in the economy has resulted in solid earnings improvements on
the part of many high-yield companies during the first two quarters of 1997 and
has provided the fuel for the sharp equity market advance experienced over the
past year. Many high-yield companies have taken advantage of higher equity
valuations to raise equity and strengthen their individual balance sheets. The
resulting credit quality improvement has helped keep the high-yield market's
performance strong relative to many of the other fixed-income markets.

PERFORMANCE AND PORTFOLIO STRATEGY

During this fiscal year, on July 28, 1997, Dean Witter High Yield Securities
began offering four classes of shares: A, B, C and D, each with its own sales
charge and distribution fee structure. Existing shares of the Fund were
designated Class D shares. Because the distribution arrangement for Class A most
closely resembles the distribution arrangement prior to the implementation of
multiple classes (i.e., Class A is sold with a front-end sales charge), and
because of the high eligibility requirement of Class D, historical performance
information for Class A has been restated to reflect the maximum sales charge
applicable to Class A (4.25 percent) and the effect of Class A's 12b-1 fee. In
addition, the Fund's Class D performance has been restated to reflect the
absence of any sales charge. A revised prospectus, which includes complete
details regarding the Fund's conversion to multiple classes of shares, was
mailed to shareholders in mid-summer.
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
LETTER TO THE SHAREHOLDERS AUGUST 31, 1997, CONTINUED

Dean Witter High Yield Securities' Class D shares produced a total return of
15.01 percent for the twelve-month period ended August 31, 1997. During the same
period, the Fund's Class A shares produced a total return of 14.73 percent
(excluding Class A's front-end sales charge). The Fund's

[GRAPH]
PAST PERFORMANCE IS NOT PREDICTIVE
OF FUTURE RETURNS.
Prior to July 28, 1997 the fund
offered only one class of
shares. Because the
distribution arrangement for
Class A most closely resembled
the distribution arrangement
applicable prior to the
implementation of multiple
classes (i.e., Class A is sold
with a front-end sales charge),
historical performance
information has been restated
to reflect the actual maximum
sales charge applicable to
Class A (i.e., 4.25%) as
compared to the 5.5% sales
charge in effect prior to July
28, 1997. In addition, Class A
shares are now subject to an
ongoing 12b-1 fee which is
reflected in the restated
performance for that class.
(1) Figure shown assumes reinvestment
of all distributions and
does not reflect the
deduction of any sales
charges.
(2) Figures shown assumes reinvestment
of all distributions and the
deduction of the maximum
applicable front-end sales
charge (4.25%). See the
fund's current prospectus
for complete details on fees
and sales charges.
(3) Closing Value assuming a complete
redemption on August 31,
1997.
(4) The Lehman Brothers Mutual Fund
Corporate/ High Yield Index
measures the performance of
all investment and
non-investment grade
corporate debt securities.
The Index does not include
any expenses, fees, or
charges. The Index is
unmanaged and should not be
considered an investment.
(5) The Lehman Brothers High Yield
Index tracks the performance
of all below
investment-grade securities
which have at least $100
million in outstanding
issuance, are greater than
one year to maturity and are
issued in fixed rate U.S.
dollar denominations. The
Index does not include any
expenses, fees or charges.
The Index is unmanaged and
should not be considered an
investment.
(6) The Lipper High Current Yield
Funds Index is an
equally-weighted performance
index of the largest
qualifying funds (based on
net assets) in the Lipper
High Current Yield Funds
objective. The Index, which
is adjusted for capital
gains distributions and
income dividends, is
unmanaged and should not be
considered an investment.
There are currently 30 funds
represented in this index.

[GRAPH]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS.
(1) Figure shown assumes reinvestment of all distributions. There is no sales
charge.
(2) Closing Value assuming a complete redemption on August 31, 1997.
(3) The Lehman Brothers Mutual Fund Corporate/High Yield Index measures the
performance of all investment and non-investment grade corporate debt
securities. The Index does not include any expenses, fees, or charges. The
Index is unmanaged and should not be considered an investment.
(4) The Lehman Brothers High Yield Index tracks the performance of all below
investment-grade securities which have at least $100 million in outstanding
issuance, are greater than one year to maturity and are issued in fixed rate
U.S. dollar denominations. The Index does not include any expenses, fees or
charges. The Index is unmanaged and should not be considered an investment.
(5) The Lipper High Current Yield Funds Index is an equally-weighted performance
index of the largest qualifying funds (based on net assets) in the Lipper
High Current Yield Funds objective. The Index, which is adjusted for capital
gains distributions and income dividends, is unmanaged and should not be
considered an investment. There are currently 30 funds represented in this
index.
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
LETTER TO THE SHAREHOLDERS AUGUST 31, 1997, CONTINUED

performance in this period compares to returns of 14.97 percent for the Lehman
High Yield Index and 15.13 percent for the Lipper High Yield Bond Fund Index.
The accompanying charts illustrate the growth of a $10,000 investment in the
Fund's Class A and Class D shares for the ten-year period ended August 31, 1997,
compared to similar hypothetical investments in the issues that comprise the
Lehman Brothers Mutual Fund Corporate/High Yield Index, the Lehman Brothers High
Yield Index and the Lipper High Yield Bond Funds Index.

As the economy has continued to expand over the past few years, the Fund has
tended to concentrate on B-rated issues. In a growing economy one can generally
find undervalued upgrade candidates in this sector of the market that provide
attractive yields as well as appreciation potential. We continue to feel that
many of these issues are very attractive long-term investments. However, given
the lower market yields available today and the potential for a modest Federal
Reserve rate tightening down the road, we have taken some defensive steps with
the portfolio. These include increasing our allocation to the higher-quality end
of the market (BB-rated issues or higher). We feel that these holdings will
better protect shareholders during a potentially nervous market environment as
well as provide the liquidity and portfolio flexibility needed to take advantage
of future opportunities. In addition, the Fund continues to limit its exposure
to cyclical industries and remains focused on more-predictable,
recession-resistant growth sectors of the economy, such as broadcast media and
cable telecommunications and food and beverages. In some of these sectors, such
as media and telecommunications, we expect to see continued consolidation, which
should bode well for many of the Fund's individual holdings.

LOOKING AHEAD

The one- to two-year outlook for the high-yield market remains favorable, given
our expectations for continued growth in the economy and generally improving
credit quality in the high-yield marketplace. We caution, however, that during
this period the possibility exists for another round of investor nervousness
given the potential for Federal Reserve Board moves. As discussed above, the
Fund is well positioned to take advantage of any potential market disruptions
given its more conservative positioning today. Assuming the longer-term market
outlook remains unchanged, these market disruptions would likely be viewed as
buying opportunities allowing the Fund to lock in attractive yields and prices
for its shareholders.
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
LETTER TO THE SHAREHOLDERS AUGUST 31, 1997, CONTINUED

We thank you for your continued support of Dean Witter High Yield Securities and
look forward to continuing to serve your investment needs.

Very truly yours,

[SIGNATURE]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
RESULTS OF SPECIAL MEETING (UNAUDITED)

On May 21, 1997, a special meeting of the Fund's shareholders was held for the
purpose of voting on five separate matters, the results of which are as follows:

(1) APPROVAL OF A NEW INVESTMENT MANAGEMENT AGREEMENT BETWEEN THE FUND AND DEAN
WITTER INTERCAPITAL INC. IN CONNECTION WITH THE MERGER OF MORGAN STANLEY
GROUP INC. WITH DEAN WITTER, DISCOVER & CO.:

<TABLE>
<CAPTION>
VOTE NO. OF SHARES
- ------------------------------ -------------
<S> <C>
For........................... 45,518,869
Against....................... 1,348,785
Abstain....................... 3,620,166
</TABLE>

(2) ELECTION OF DIRECTORS:

<TABLE>
<S> <C>
Michael Bozic
For........................... 47,959,004
Withheld...................... 2,528,816
Charles A. Fiumefreddo
For........................... 47,929,192
Withheld...................... 2,558,628
Edwin J. Garn
For........................... 47,973,048
Withheld...................... 2,514,772
John R. Haire
For........................... 47,880,635
Withheld...................... 2,607,185
Wayne E. Hedien
For........................... 47,981,659
Withheld...................... 2,506,161
Dr. Manuel H. Johnson
For........................... 47,991,966
Withheld...................... 2,495,854
Michael E. Nugent
For........................... 47,979,255
Withheld...................... 2,508,565
Philip J. Purcell
For........................... 47,975,198
Withheld...................... 2,512,622
John L. Schroeder
For........................... 47,989,166
Withheld...................... 2,498,654
</TABLE>

(3) APPROVAL OF AN AMENDMENT TO THE CORPORATION'S ARTICLES OF INCORPORATION TO
PERMIT MULTIPLE CLASSES OR SERIES OF SHARES:

<TABLE>
<S> <C>
For........................... 43,328,978
Against....................... 2,237,893
Abstain....................... 4,920,949
</TABLE>

(4) APPROVAL OF A NEW INVESTMENT POLICY WITH RESPECT TO INVESTMENTS IN CERTAIN
OTHER INVESTMENT COMPANIES:

<TABLE>
<S> <C>
For........................... 38,717,289
Against....................... 6,872,220
Abstain....................... 4,898,311
</TABLE>

(5) RATIFICATION OF THE SELECTION OF PRICE WATERHOUSE LLP AS THE FUND'S
INDEPENDENT ACCOUNTANTS:

<TABLE>
<S> <C>
For........................... 46,579,728
Against....................... 587,113
Abstain....................... 3,320,979
</TABLE>
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
PORTFOLIO OF INVESTMENTS AUGUST 31, 1997

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- -----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CORPORATE BONDS (90.4%)
AEROSPACE (0.8%)
$ 4,000 Sabreliner Corp. (Series B)....................................... 12.50 % 04/15/03 $ 4,090,000
------------
AUTOMOTIVE (3.8%)
10,000 APS, Inc.......................................................... 11.875 01/15/06 8,800,000
10,000 Toyota Motor Credit Corp.......................................... 15.00 09/26/97 10,056,500
------------
18,856,500
------------
BROADCAST MEDIA (8.1%)
4,000 Adams Outdoor Advertising L.P..................................... 10.75 03/15/06 4,340,000
4,000 Australis Holdings Ltd. (Australia)............................... 15.00++ 11/01/02 3,320,000
5,000 Echostar DBS Corp. - 144A*........................................ 12.50 07/01/02 5,100,000
5,000 Echostar Satellite Broadcasting................................... 13.125++ 03/15/04 3,750,000
2,500 Outdoor Communications, Inc....................................... 9.25 08/15/07 2,475,000
4,000 Paxson Communications Corp........................................ 11.625 10/01/02 4,360,000
6,000 Spanish Broadcasting System, Inc.................................. 12.50 06/15/02 6,780,000
4,000 STC Broadcasting, Inc. - 144A*.................................... 11.00 03/15/07 4,270,000
10,135 TCI Satellite Entertainment Corp. - 144A*......................... 12.25++ 02/15/07 6,435,725
------------
40,830,725
------------
BUSINESS SERVICES (1.6%)
8,000 Anacomp, Inc. (Series B).......................................... 10.875 04/01/04 8,260,000
------------
CABLE & TELECOMMUNICATIONS (14.4%)
5,200 Adelphia Communications, Inc. - 144A*............................. 9.875 03/01/07 5,200,000
4,050 American Communications Services, Inc............................. 13.00++ 11/01/05 2,602,125
2,000 American Communications Services, Inc............................. 12.75++ 04/01/06 1,205,000
5,000 American Communications Services, Inc. - 144A*.................... 13.75 07/15/07 5,337,500
4,000 Cablevision Systems Corp.......................................... 9.875 04/01/23 4,280,000
4,000 Charter Communication South East L.P. (Series B).................. 11.25 03/15/06 4,330,000
4,000 Falcon Holdings Group L.P. (Series B)............................. 11.00+ 09/15/03 4,219,555
4,000 FrontierVision Operating Partners, L.P............................ 11.00 10/15/06 4,250,000
4,000 GST Equipment Funding, Inc. - 144A*............................... 13.25 05/01/07 4,350,000
13,000 Hyperion Telecommunication, Inc. (Series B)....................... 13.00++ 04/15/03 8,255,000
28,400 In-Flight Phone Corp. (Series B) (a).............................. 14.00++ 05/15/02 2,556,000
4,000 IXC Communications, Inc. (Series B)............................... 12.50 10/01/05 4,570,000
2,000 NextLink Communications, Inc...................................... 12.50 04/15/06 2,210,000
5,000 Paging Network, Inc............................................... 10.125 08/01/07 5,075,000
5,050 Peoples Telephone Co., Inc........................................ 12.25 07/15/02 5,289,875
4,000 Rifkin Acquisition Partners L.P................................... 11.125 01/15/06 4,310,000
4,000 Talton Holdings, Inc. - 144A*..................................... 11.00 06/30/07 4,220,000
------------
72,260,055
------------
CONSUMER PRODUCTS (2.7%)
5,500 J.B Williams Holdings, Inc........................................ 12.00 03/01/04 5,747,500
8,000 Renaissance Cosmetics, Inc........................................ 11.75 02/15/04 8,040,000
------------
13,787,500
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
PORTFOLIO OF INVESTMENTS AUGUST 31, 1997, CONTINUED

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- -----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CONTAINERS (2.1%)
$ 5,000 Mail-Well Corp.................................................... 10.50 % 02/15/04 $ 5,300,000
5,000 Packaging Resources, Inc.......................................... 11.625 05/01/03 5,162,500
------------
10,462,500
------------
ELECTRICAL & ALARM SYSTEMS (1.8%)
11,000 Mosler, Inc....................................................... 11.00 04/15/03 9,240,000
------------
ENTERTAINMENT/GAMING & LODGING (10.7%)
4,000 AMF Group Inc. (Series B)......................................... 10.875 03/15/06 4,415,000
9,750 Fitzgeralds Gaming Corp. (Units)++................................ 13.00 12/31/02 9,262,500
10,000 Lady Luck Gaming Finance Corp..................................... 11.875 03/01/01 10,000,000
8,000 Motels of America, Inc. (Series B)................................ 12.00 04/15/04 7,660,000
4,000 Players International, Inc........................................ 10.875 04/15/05 4,225,000
4,000 Plitt Theaters, Inc. (Canada)..................................... 10.875 06/15/04 4,260,000
4,000 Station Casinos, Inc.............................................. 9.625 06/01/03 3,935,000
1,000 Station Casinos, Inc.............................................. 10.125 03/15/06 998,750
10,000 Stuart Entertainment, Inc. (Series B)............................. 12.50 11/15/04 8,800,000
------------
53,556,250
------------
FINANCE (5.7%)
8,000 Commercial Credit Co.............................................. 15.00 07/10/98 8,618,240
9,500 General Electric Capital Corp..................................... 13.50 01/20/98 9,777,780
10,000 Household Finance Corp............................................ 15.00 09/25/98 10,053,600
------------
28,449,620
------------
FOODS & BEVERAGES (9.1%)
4,000 Envirodyne Industries, Inc........................................ 10.25 12/01/01 4,010,000
4,000 Fleming Companies, Inc............................................ 10.625 12/15/01 4,250,000
2,000 Fleming Companies, Inc. - 144A*................................... 10.50 12/01/04 2,025,000
2,000 Fleming Companies, Inc. - 144A*................................... 10.625 07/31/07 2,035,000
4,000 General Mills, Inc................................................ 13.50 01/21/98 4,118,520
13,500 PepsiCo, Inc...................................................... 15.00 08/06/98 14,631,030
35,400 Specialty Foods Acquisition Corp. (Series B)...................... 13.00++ 08/15/05 14,691,000
------------
45,760,550
------------
HEALTHCARE (2.7%)
5,000 Unilab Corp....................................................... 11.00 04/01/06 4,875,000
10,000 Unison Healthcare Corp. - 144A*................................... 12.25 11/01/06 8,600,000
------------
13,475,000
------------
MANUFACTURING (3.7%)
4,000 Berry Plastics Corp............................................... 12.25 04/15/04 4,390,000
4,000 Exide Electronics Group, Inc. (Series B).......................... 11.50 03/15/06 4,630,000
4,000 International Wire Group, Inc..................................... 11.75 06/01/05 4,350,000
5,000 Uniroyal Technology Corp.......................................... 11.75 06/01/03 5,000,000
------------
18,370,000
------------
MANUFACTURING - DIVERSIFIED (7.6%)
4,000 Foamex L.P........................................................ 11.875 10/01/04 4,300,000
3,870 Interlake Corp.................................................... 12.00 11/15/01 4,305,375
5,000 Interlake Corp.................................................... 12.125 03/01/02 5,200,000
5,000 J.B. Poindexter & Co., Inc........................................ 12.50 05/15/04 5,300,000
9,000 Jordan Industries, Inc. - 144A*................................... 10.375 08/01/07 9,022,500
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
PORTFOLIO OF INVESTMENTS AUGUST 31, 1997, CONTINUED

TOTAL CORPORATE BONDS
(IDENTIFIED COST $475,263,105)......................................................... 453,975,620
------------
</TABLE>

<TABLE>
<CAPTION>
NUMBER OF
SHARES
- ----------
<C> <S> <C>
COMMON STOCKS (c) (2.8%)
AUTOMOTIVE (0.0%)
709 Northern Holdings Industrial Corp. (d)*................................................ --
------------
ENTERTAINMENT/GAMING & LODGING (0.0%)
7,500 Motels of America, Inc. - 144A*........................................................ 112,500
781,421 Vagabond Inns, Inc. (Class D) (a)...................................................... 781
------------
113,281
------------
FOODS & BEVERAGES (0.1%)
273,750 Specialty Foods Acquisition Corp. - 144A*.............................................. 273,750
------------
MANUFACTURING - DIVERSIFIED (2.7%)
448,613 Thermadyne Holdings Corp. (d).......................................................... 13,402,314
------------
OIL & GAS (0.0%)
56,977 Sheridan Energy, Inc................................................................... 142,443
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
PORTFOLIO OF INVESTMENTS AUGUST 31, 1997, CONTINUED

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
RESTAURANTS (0.0%)
26,057 American Restaurant Group Holdings, Inc. - 144A*....................................... $ 26,057
------------
TEXTILES (0.0%)
12,000 JPS Textiles Group, Inc. (Class A)..................................................... 120
------------

TOTAL COMMON STOCKS
(IDENTIFIED COST $66,597,302).......................................................... 13,957,965
------------

PREFERRED STOCKS (0.7%)
ENTERTAINMENT/GAMING & LODGING (0.5%)
80,000 Fitzgeralds Gaming Corp. (Units) ++.................................................... 2,280,000
------------
OIL & GAS (0.2%)
20,000 Forman Petroleum Corp. (Conv.) (Units)++ - 144A*....................................... 1,000,000
------------

TOTAL PREFERRED STOCKS
(IDENTIFIED COST $3,000,000)........................................................... 3,280,000
------------
</TABLE>

<TABLE>
<CAPTION>
NUMBER OF EXPIRATION
WARRANTS DATE
- ---------- ----------
<C> <S> <C> <C>
WARRANTS (c) (0.1%)
AEROSPACE (0.0%)
9,000 Sabreliner Corp. - 144A*................................................... 04/15/03 90,040
------------
BROADCAST MEDIA (0.0%)
4,000 Australis Holdings Ltd. - 144A* (Australia)................................ 10/30/01 --
------------
CABLE & TELECOMMUNICATIONS (0.1%)
10,000 Hyperion Telecommunication, Inc. (Series B) - 144A*........................ 04/01/01 300,025
------------
CONTAINERS (0.0%)
10,000 Crown Packaging Holdings, Ltd. - 144A*..................................... 11/01/03 100
------------
ENTERTAINMENT/GAMING & LODGING (0.0%)
5,000 Boomtown, Inc. - 144A*..................................................... 11/01/98 --
8,312 Fitzgeralds Gaming Corp.................................................... 12/19/98 8,397
3,500 Fitzgeralds South Inc. - 144A*............................................. 03/15/99 --
------------
8,397
------------
MANUFACTURING (0.0%)
70,000 Uniroyal Technology Corp................................................... 06/01/03 105,000
------------
OIL & GAS (0.0%)
2,500 Forman Petroleum Corp. - 144A*............................................. 06/01/04 --
------------
RETAIL (0.0%)
10,000 County Seat Holdings Co.................................................... 10/15/98 100
------------

TOTAL WARRANTS
(IDENTIFIED COST $1,323,594)........................................................... 503,662
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
PORTFOLIO OF INVESTMENTS AUGUST 31, 1997, CONTINUED

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- -----------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
SHORT-TERM INVESTMENTS (5.1%)
U.S. GOVERNMENT AGENCY (e) (4.2%)
$ 21,100 Federal Home Loan Mortgage Corp.
(AMORTIZED COST $21,096,777)............................. 5.50% 09/02/97 $ 21,096,777
------------

REPURCHASE AGREEMENT (0.9%)
4,622 The Bank of New York (dated 08/29/97; proceeds $4,624,000)
(f)
(IDENTIFIED COST $4,621,504)............................. 5.25 09/02/97 4,621,504
------------

TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $25,718,281).......................................................... 25,718,281
------------
</TABLE>

<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $571,902,282) (g)........................................................ 99.1 % 497,435,528

OTHER ASSETS IN EXCESS OF LIABILITIES..................................................... 0.9 4,633,272
------ -------------

NET ASSETS................................................................................ 100.0 % $ 502,068,800
------ -------------
------ -------------
</TABLE>

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

* Resale is restricted to qualified institutional investors.
++ Consists of one or more class of securities traded together as a unit;
bonds or preferred stocks with attached warrants.
+ Payment-in-kind security.
++ Currently a zero coupon bond and will pay interest at a rate shown at a
future specified date.
(a) Non-income producing security; issuer in bankruptcy.
(b) Non-income producing security; bond in default.
(c) Non-income producing securities.
(d) Acquired through exchange offer.
(e) Security was purchased on a discount basis. The interest rate shown has
been adjusted to reflect a money market equivalent yield.
(f) Collateralized by $22,085,523 0.0% U.S. Treasury Note due 08/15/20 valued
at $4,713,934.
(g) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $27,663,197 and the
aggregate gross unrealized depreciation is $102,129,951, resulting in net
unrealized depreciation of $74,466,754.

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1997

<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $571,902,282)............................ $ 497,435,528
Receivable for:
Interest................................................ 11,738,754
Capital stock sold...................................... 2,047,183
Prepaid expenses and other assets........................... 75,311
---------------
TOTAL ASSETS........................................... 511,296,776
---------------
LIABILITIES:
Payable for:
Investments purchased................................... 7,783,913
Dividends to shareholders............................... 887,990
Investment management fee............................... 209,813
Capital stock repurchased............................... 208,017
Plan of distribution fee................................ 8,141
Accrued expenses and other payables......................... 130,102
---------------
TOTAL LIABILITIES...................................... 9,227,976
---------------
NET ASSETS............................................. $ 502,068,800
---------------
---------------
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................. $ 1,467,244,599
Net unrealized depreciation................................. (74,466,754)
Accumulated undistributed net investment income............. 7,755,090
Accumulated net realized loss............................... (898,464,135)
---------------
NET ASSETS............................................. $ 502,068,800
---------------
---------------
CLASS A SHARES:
Net Assets.................................................. $ 1,995,959
Shares Outstanding (500,000,000 AUTHORIZED, $.01 PAR
VALUE).................................................... 292,643
NET ASSET VALUE PER SHARE.............................. $6.82
---------------
---------------

MAXIMUM OFFERING PRICE PER SHARE
(NET ASSET VALUE PLUS 4.44% OF NET ASSET VALUE)...... $7.12
---------------
---------------
CLASS B SHARES:
Net Assets.................................................. $ 15,828,299
Shares Outstanding (500,000,000 AUTHORIZED, $.01 PAR
VALUE).................................................... 2,321,051
NET ASSET VALUE PER SHARE.............................. $6.82
---------------
---------------
CLASS C SHARES:
Net Assets.................................................. $ 5,224,906
Shares Outstanding (500,000,000 AUTHORIZED, $.01 PAR
VALUE).................................................... 766,149
NET ASSET VALUE PER SHARE.............................. $6.82
---------------
---------------
CLASS D SHARES:
Net Assets.................................................. $ 479,019,636
Shares Outstanding (500,000,000 AUTHORIZED, $.01 PAR
VALUE).................................................... 70,229,605
NET ASSET VALUE PER SHARE.............................. $6.82
---------------
---------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1997*

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

INTEREST INCOME............................................. $ 58,716,331
------------

EXPENSES
Plan of distribution fee (Class B shares)................... 5,633
Plan of distribution fee (Class C shares)................... 2,322
Invesment management fee.................................... 2,356,223
Transfer agent fees and expenses............................ 521,837
Professional fees........................................... 124,623
Shareholder reports and notices............................. 70,155
Registration fees........................................... 47,874
Custodian fees.............................................. 33,391
Directors' fees and expenses................................ 14,041
Other....................................................... 13,758
------------

TOTAL EXPENSES......................................... 3,189,857
------------

NET INVESTMENT INCOME.................................. 55,526,474
------------

NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss........................................... (39,986,189)
Net change in unrealized depreciation....................... 50,139,683
------------

NET GAIN............................................... 10,153,494
------------

NET INCREASE................................................ $ 65,679,968
------------
------------

<FN>
- ---------------------
* Class A, Class B and Class C shares were issued July 28, 1997.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
AUGUST 31,1997* AUGUST 31, 1996
- -----------------------------------------------------------------------------------------------
<S> <C> <C>

INCREASE (DECREASE) IN NET ASSETS:

OPERATIONS:
Net investment income....................................... $ 55,526,474 $ 55,722,131
Net realized loss........................................... (39,986,189) (17,329,860)
Net change in unrealized depreciation....................... 50,139,683 9,730,771
--------------- ---------------

NET INCREASE........................................... 65,679,968 48,123,042
--------------- ---------------

DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income
Class A shares.......................................... (12,761) --
Class B shares.......................................... (95,764) --
Class C shares.......................................... (32,881) --
Class D shares.......................................... (57,967,266) (51,517,938)
--------------- ---------------

TOTAL DIVIDENDS........................................ (58,108,672) (51,517,938)
--------------- ---------------

Net increase from capital stock transactions................ 34,294,665 8,152,392
--------------- ---------------

NET INCREASE........................................... 41,865,961 4,757,496

NET ASSETS:
Beginning of period......................................... 460,202,839 455,445,343
--------------- ---------------

END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF
$7,755,090 AND $10,337,288, RESPECTIVELY)............... $ 502,068,800 $ 460,202,839
--------------- ---------------
--------------- ---------------

<FN>
- ---------------------
* Class A, Class B and Class C shares were issued July 28, 1997.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1997

1. ORGANIZATION AND ACCOUNTING POLICIES

Dean Witter High Yield Securities Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Fund's primary investment objective is to
earn a high level of current income and, as a secondary objective, capital
appreciation, but only when consistent with its primary objective. The Fund was
incorporated in Maryland on June 14, 1979 and commenced operations on September
26, 1979. On July 28, 1997, the Fund commenced offering three additional classes
of shares, with the then current shares designated as Class D shares.

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, 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 security listed or traded on the
New York, American or other domestic or foreign stock exchange is valued at its
latest sale price on that exchange 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 securities are traded on more than one exchange, the securities are
valued on the exchange designated as the primary market pursuant to procedures
adopted by the Directors); (2) all other portfolio securities for which
over-the-counter market quotations are readily available are valued at the
latest available bid price prior to the time of valuation; (3) when market
quotations are not readily available, including circumstances under which is
determined by Dean Witter InterCapital Inc. (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 determined in good faith under
procedures established by and under the general supervision of the Directors
(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); (4) certain portfolio securities may be valued by an outside
pricing service approved
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1997, CONTINUED

by the Directors. The pricing service may utilize a matrix system incorporating
security quality, maturity and coupon as the evaluation model parameters, and/or
research and evaluations by its staff, including review of broker-dealer market
price quotations, if available, in determining what it believes is the fair
valuation of the portfolio securities valued by such pricing service; and (5)
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 except where collection is not expected.

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. 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.

E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records dividends and
distributions to its shareholders on the record 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.
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1997, CONTINUED

2. INVESTMENT MANAGEMENT AGREEMENT

Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, calculated 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: 0.50% to the portion of daily net assets not exceeding
$500 million; 0.425% to the portion of daily net assets exceeding $500 million
but not exceeding $750 million; 0.375% to the portion of daily net assets
exceeding $750 million but not exceeding $1 billion; 0.35% to the portion of
daily net assets exceeding $1 billion but not exceeding $2 billion; 0.325% to
the portion of daily net assets exceeding $2 billion but not exceeding $3
billion; and 0.30% to the portion of daily net assets exceeding $3 billion.

Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office space, facilities, equipment,
clerical, bookkeeping and certain legal services and pays the salaries of
all personnel, including officers of the Fund who are employees of the
Investment Manager. The Investment Manager also bears the cost of telephone
services, heat, light, power and other utilities provided to the Fund.

3. PLAN OF DISTRIBUTION

Shares of the Fund are distributed by 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 pay the Distributor a fee which is accrued daily and
paid monthly at the following annual rates: (i) Class A -- 0.25% of the average
daily net assets of Class A; (ii) Class B -- 0.75% of the average daily net
assets of Class B; and (iii) Class C -- 0.85% of the average daily net assets of
Class C. In the case of Class A shares, amounts paid under the Plan are paid to
the Distributor for services provided. In the case of Class B and Class C
shares, amounts paid under the Plan are paid to the Distributor for services
provided and the expenses borne by it and others in the distribution of the
shares of these Classes, including the payment of commissions for sales of
theses Classes and incentive compensation to, and expenses of, the account
executives of Dean Witter Reynolds Inc. ("DWR"), an affiliate of the Investment
Manager and Distributor, and others who engage in or support distribution of the
shares or who service shareholder accounts, including overhead and telephone
expenses; printing and distribution of prospectuses and reports used in
connection with the offering of these shares to other than current shareholders;
and preparation, printing and distribution of sales literature and advertising
materials. In addition, the Distributor may utilize fees paid pursuant to the
Plan, in the case of Class B shares,
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1997, CONTINUED

to compensate DWR and other selected broker-dealers for their opportunity costs
in advancing such amounts, which compensation would be in the form of a carrying
charge on any unreimbursed expenses.

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
Directors will consider at that time the manner in which to treat such expenses.
The Distributor has advised the Fund that such excess amounts, including
carrying charges, totaled $419,117 at August 31, 1997.

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 0.85% 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 account executives may be reimbursed in the subsequent
calendar year. For the period ended August 31, 1997, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.25% and
0.85%, respectively.

The Distributor has informed the Fund that for the year ended August 31, 1997,
it received contingent deferred sales charges from certain redemptions of the
Fund's Class B shares of $295 and for the period September 1, 1996 to July 28,
1997 received $1,582,304 in front-end sales charges from sales of the Fund's
shares and for the period July 28, 1997 to August 31, 1997 received $58,000 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 August 31, 1997, aggregated
$524,360,503 and $506,764,219, respectively.

Dean Witter Trust FSB, an affiliate of the Investment Manager, is the Fund's
transfer agent. At August 31, 1997, the Fund had transfer agent fees and
expenses payable of approximately $10,000.
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1997, CONTINUED

The Fund has an unfunded noncontributory defined benefit pension plan covering
all independent Directors of the Fund who will have served as independent
Directors for at least five years at the time of retirement. Benefits under this
plan are based on years of service and compensation during the last five years
of service. Aggregate pension costs for the year ended August 31, 1997 included
in Directors' fees and expenses in the Statement of Operations amounted to
$2,231. At August 31, 1997, the Fund had an accrued pension liability of $48,926
which is included in accrued expenses in the Statement of Assets and
Liabilities.

5. CAPITAL STOCK

Transactions in capital stock were as follows:

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
AUGUST 31, 1997 AUGUST 31, 1996
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
CLASS A SHARES*
Sold........................................................... 292,513 $ 1,999,324 -- --
Reinvestment of dividends...................................... 553 3,764 -- --
Redeemed....................................................... (423) (2,907) -- --
----------- -------------- ----------- ------------
Net increase - Class A......................................... 292,643 2,000,181 -- --
----------- -------------- ----------- ------------

CLASS B SHARES*
Sold........................................................... 2,516,637 17,204,073 -- --
Reinvestment of dividends...................................... 6,503 44,221 -- --
Redeemed....................................................... (202,089) (1,383,116) -- --
----------- -------------- ----------- ------------
Net increase - Class B......................................... 2,321,051 15,865,178 -- --
----------- -------------- ----------- ------------

CLASS C SHARES*
Sold........................................................... 766,860 5,242,777 -- --
Reinvestment of dividends...................................... 2,742 18,649 -- --
Redeemed....................................................... (3,453) (23,617) -- --
----------- -------------- ----------- ------------
Net increase - Class C......................................... 766,149 5,237,809 -- --
----------- -------------- ----------- ------------

CLASS D SHARES
Sold........................................................... 7,619,881 51,079,158 7,479,221 $ 50,396,628
Reinvestment of dividends...................................... 4,584,033 30,556,953 3,993,442 26,742,126
----------- -------------- ----------- ------------
12,203,914 81,636,111 11,472,663 77,138,754
Redeemed....................................................... (10,516,313) (70,444,614) (10,236,571) (68,986,362)
----------- -------------- ----------- ------------
Net increase - Class D......................................... 1,687,601 11,191,497 1,236,092 8,152,392
----------- -------------- ----------- ------------
Net increase in Fund........................................... 5,067,444 $ 34,294,665 1,236,092 $ 8,152,392
----------- -------------- ----------- ------------
----------- -------------- ----------- ------------
</TABLE>

<TABLE>
<C> <S>
- ---------------------
* For the period July 28, 1997 (issue date) through August 31, 1997.
</TABLE>

<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1997, CONTINUED

6. FEDERAL INCOME TAX STATUS

At August 31, 1997, the Fund had a net capital loss carryover of approximately
$882,518,000, which may be used to offset future capital gains to the extent
provided by regulations, which is available through August 31 in the following
years:

<TABLE>
<CAPTION>
AMOUNTS IN THOUSANDS
- --------------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002 2003 2004 2005
- ----------- ------------- ------------- ----------- ------------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 82,234 $ 293,125 $ 182,201 $ 45,084 $ 166,660 $ 50,599 $ 23,296 $ 39,319
- ----------- ------------- ------------- ----------- ------------- ----------- ----------- -------------
- ----------- ------------- ------------- ----------- ------------- ----------- ----------- -------------
</TABLE>

Capital 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 capital losses of
approximately $10,031,000 during fiscal 1997.

At August 31, 1997, the Fund had temporary book/tax differences primarily
attributable to post-October losses and capital loss deferrals on wash sales and
permanent book/tax differences primarily attributable to an expired capital loss
carryover. To reflect reclassifications arising from the permanent differences,
paid-in-capital was charged and accumulated net realized loss was credited
$95,139,725.

7. OTHER

The Board of Directors of the Fund and the Board of Trustees of Dean Witter High
Income Securities ("High Income") have approved a reorganization plan whereby
the assets and liabilities of High Income would be merged into the Fund. This
plan is subject to the consent of the High Income shareholders. If approved, the
Fund's assets would be combined and High Income shareholders would become
shareholders of the Fund, receiving Class B shares of the Fund equal to the
value of their holdings in High Income.
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
FINANCIAL HIGHLIGHTS

Selected ratios and per share data for a share of capital stock outstanding
throughout each period:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED AUGUST 31
--------------------------------------------------------------------------------------------------
1997*++ 1996 1995 1994 1993 1992 1991 1990 1989 1988
- ------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS D SHARES

PER SHARE OPERATING
PERFORMANCE:

Net asset value,
beginning of
period............. $ 6.71 $ 6.77 $ 6.83 $ 7.58 $ 7.23 $ 5.92 $ 6.78 $ 10.40 $ 11.99 $ 13.72
------- ------- ------- ------- ------- ------- ------- -------- ------- -------

Net investment
income............. 0.79 0.83 0.80 0.79 0.89 0.95 0.94 1.48 1.67 1.84

Net realized and
unrealized gain
(loss)............. 0.15 (0.12) (0.06) (0.68) 0.54 1.04 (0.86) (3.78) (1.48) (1.77)
------- ------- ------- ------- ------- ------- ------- -------- ------- -------

Total from
investment
operations......... 0.94 0.71 0.74 0.11 1.43 1.99 0.08 (2.30) 0.19 0.07
------- ------- ------- ------- ------- ------- ------- -------- ------- -------

Less dividends and
distributions from:
Net investment
income........... (0.83) (0.77) (0.80) (0.86) (1.08) (0.68) (0.94) (1.32) (1.75) (1.80)
Paid-in-capital... -- -- -- -- -- -- -- -- (0.03) --
------- ------- ------- ------- ------- ------- ------- -------- ------- -------

Total dividends and
distributions...... (0.83) (0.77) (0.80) (0.86) (1.08) (0.68) (0.94) (1.32) (1.78) (1.80)
------- ------- ------- ------- ------- ------- ------- -------- ------- -------

Net asset value, end
of period.......... $ 6.82 $ 6.71 $ 6.77 $ 6.83 $ 7.58 $ 7.23 $ 5.92 $ 6.78 $ 10.40 $ 11.99
------- ------- ------- ------- ------- ------- ------- -------- ------- -------
------- ------- ------- ------- ------- ------- ------- -------- ------- -------

TOTAL INVESTMENT
RETURN+............. 15.01% 11.07% 11.98% 0.93% 22.29% 35.46% 4.67% (23.28)% 1.39% 0.97%

RATIOS TO AVERAGE
NET ASSETS:
Expenses............ 0.68% 0.66% 0.79% 0.69% 0.67% 0.77% 0.87% 0.60% 0.49% 0.49%

Net investment
income............. 11.78% 12.27% 12.06% 10.40% 12.14% 13.96% 16.47% 17.67% 14.61% 14.79%

SUPPLEMENTAL DATA:
Net assets, end of
period, in
millions........... $479 $460 $455 $478 $540 $512 $436 $690 $1,794 $2,140

Portfolio turnover
rate............... 113% 49% 74% 127% 173% 113% 93% 21% 55% 107%
<FN>

- ---------------------
* Prior to July 28, 1997, the Fund issued one class of shares. All shares of
the Fund held prior to that date have been designated Class D shares.
++ 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.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
FINANCIAL HIGHLIGHTS, CONTINUED

<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
THROUGH
AUGUST 31,
1997++
- ----------------------------------------------------------------------------------------
<S> <C>
CLASS A SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 6.83
-----
Net investment income................................................. 0.07
Net realized and unrealized loss...................................... (0.03)
-----
Total from investment operations...................................... 0.04
-----
Less dividends from net investment income............................. (0.05)
-----
Net asset value, end of period........................................ $ 6.82
-----
-----
TOTAL INVESTMENT RETURN+.............................................. 0.65%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 0.93%(2)
Net investment income................................................. 11.80%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in millions................................ $2
Portfolio turnover rate............................................... 113%

CLASS B SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.................................. $ 6.83
-----
Net investment income................................................. 0.07
Net realized and unrealized loss...................................... (0.03)
-----
Total from investment operations...................................... 0.04
-----
Less dividends from net investment income............................. (0.05)
-----
Net asset value, end of period........................................ $ 6.82
-----
-----
TOTAL INVESTMENT RETURN+.............................................. 0.62%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.42%(2)
Net investment income................................................. 11.28%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in millions................................ $16
Portfolio turnover rate............................................... 113%
<FN>

- ---------------------
* The date shares were first issued.
++ 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.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
FINANCIAL HIGHLIGHTS, CONTINUED

<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
THROUGH
AUGUST 31,
1997++
- ----------------------------------------------------------------------------------------

<S> <C>
CLASS C SHARES

PER SHARE OPERATING PERFORMANCE:

Net asset value, beginning of period.................................. $6.83
-----

Net investment income................................................. 0.07

Net realized and unrealized loss...................................... (0.03)
-----

Total from investment operations...................................... 0.04
-----

Less dividends from net investment income............................. (0.05)
-----

Net asset value, end of period........................................ $6.82
-----
-----

TOTAL INVESTMENT RETURN+.............................................. 0.62%(1)

RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.52%(2)

Net investment income................................................. 11.18%(2)

SUPPLEMENTAL DATA:
Net assets, end of period, in millions................................ $5

Portfolio turnover rate............................................... 113%
<FN>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER HIGH YIELD SECURITIES INC.
REPORT OF INDEPENDENT ACCOUNTANTS

TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
OF DEAN WITTER HIGH YIELD SECURITIES INC.

In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Dean Witter High Yield Securities
Inc. (the "Fund") at August 31, 1997, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the periods
presented, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which 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, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at August
31, 1997 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.

PRICE WATERHOUSE LLP
1177 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
OCTOBER 10, 1997
<PAGE>

BOARD OF DIRECTORS

Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Wayne E. Hedien
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder

OFFICERS

Charles A. Fiumefreddo
Chairman and Chief Executive Officer

Barry Fink
Vice President, Secretary and General Counsel

Peter M. Avelar
Vice President

Thomas F. Caloia
Treasurer

TRANSFER AGENT

Dean Witter Trust FSB
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311

INDEPENDENT ACCOUNTANTS

Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036

INVESTMENT MANAGER

Dean Witter InterCapital 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 directors,
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.

DEAN WITTER
HIGH YIELD
SECURITIES

[GRAPHIC]

ANNUAL REPORT
AUGUST 31, 1997