<PAGE>
DEAN WITTER TAX-FREE DAILY INCOME TRUST
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- -----------------------------------------------------------------------------
Following the lead of the taxable sector, tax-free money market interest
rates moved to higher levels during the first half of 1994. While the Federal
Reserve Board's tighter monetary policy was the primary determinant of higher
yields, seasonal forces at times played a role in the direction of the
municipal money market. Mounting evidence of a strengthening economy and
heightened inflationary concerns prompted the Federal Reserve's first
short-term interest rate increases in several years.
Within the short-term municipal securities market, the rising pattern of
interest rates was most clear among longer-term securities. One-year returns,
as measured by The Bond Buyer One-Year Note Index,* rose from 2.30 percent at
the end of December 1993 to 3.81 percent in early June 1994. This represented
the highest level since December 1991. Returns for variable rate demand
obligations (VRDOs) with daily and weekly rate changes were more susceptible
to seasonal imbalances in supply and demand. Weekly VRDO yields fluctuated
between 1.50 percent and 3.20 percent during the period. Despite the swings,
however, the overall trend was toward higher yields.
PORTFOLIO MANAGEMENT AND PERFORMANCE
The market's negative tone called for a more defensive portfolio strategy.
The Fund's average maturity was shortened from between 59 and 68 days in
December 1993 to a range of 33 to 40 days in May 1994. The Fund's weighted
average maturity was extended during the latter half of June when the
pressure from the large supply of new seasonal financings caused one-year
yields to rise to relatively attractive levels.
Adherence to high quality standards is the prevailing focus in the
selection of investments. Banks providing letters of credit are watched
closely for changes in credit quality. Ongoing efforts have been made in
recent periods to reduce the Fund's overall exposure to banks, and
investments are confined to only the most highly regarded institutions. In
particular, investments backed by Japanese bank letters of credit have been
limited because of the current weakness in the Japanese economy.
On June 30, 1994, the Fund's annualized 30-day yield was 1.96 percent. The
Fund had net assets in excess of $590 million, with an average maturity of 49
days. At the end of June, the Fund's portfolio was broadly diversified in
five municipal market sectors--hospital, general obligation/tax supported,
electric, industrial development/ pollution control and transportation
issues. The portfolio was also geographically diversified, with holdings in
32 states and the District of Columbia. The Fund was 79 percent invested in
VRDO's. Tax-exempt commercial paper and municipal notes, the two other types
of securities utilized in the portfolio, comprised 9 percent and 12 percent
of the portfolio, respectively.
LOOKING FORWARD
In the period immediately ahead, we will watch closely for further actions
by the Federal Reserve Board aimed at thwarting potential inflationary
pressure. The perceived bias toward higher interest rates warrants a
continued cautious approach. Average maturities will be monitored carefully
to minimize exposure to market volatility. As always, we will maintain our
emphasis on quality and liquidity in making investment selections.
We appreciate your support of Dean Witter Tax-Free Daily Income Trust and
look forward to continuing to serve your investment needs and objectives.
Very truly yours,
Charles A. Fiumefreddo
Chairman of the Board
- ---------------
* The Bond Buyer One-Year Note Index is the average of 12-month note rates
for 10 state and local governments rated MIG-1 by Moody's Investors Service
and SP-1 plus or SP-1 by Standard & Poor's Corp.
<PAGE>
<PAGE>
DEAN WITTER TAX-FREE DAILY INCOME TRUST
PORTFOLIO OF INVESTMENTS June 30, 1994 (unaudited)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN CURRENT
THOUSANDS) YIELD VALUE
- ----------- --------- -------------
<S> <C> <C> <C>
SHORT-TERM VARIABLE RATE MUNICIPAL OBLIGATIONS* (82.5%)
CALIFORNIA
$ 6,000 California Public Capital Improvements Financing Authority, Pooled Ser 1988
C, 3.15% due 9/15/94 ...................................................... 3.15% $ 6,000,000
10,000 Southern California Public Power Authority, Transmission Ser 1991 (AMBAC
Insured), 2.10% due 7/6/94 ................................................ 2.10 10,000,000
COLORADO
5,000 Arapahoe County, Highway E--470 Ser 1986 F, 2.90% due 8/31/94 ............. 2.90 5,000,000
9,000 Colorado Health Facilities Authority, Kaiser Permanente 1994 Ser A, 2.25%
due 7/6/94 ................................................................ 2.25 9,000,000
DISTRICT OF COLUMBIA
7,000 General Fund Recovery Ser 1991 B-2, 3.60% due 7/1/94 ....................... 3.60 7,000,000
5,000 The American University Ser 1985, 2.65% due 7/6/94 ......................... 2.65 5,000,000
FLORIDA
18,800 Dade County Industrial Development Authority, Dolphins Stadium Ser 1985 A,
2.80% due 7/5/94 .......................................................... 2.80 18,800,000
11,500 Dade County, Water & Sewer System Ser 1994 (FGIC Insured), 2.20% due 7/6/94 2.20 11,500,000
7,000 Orlando Utilities Commission, Water & Electric Ser 1991 BANs, 2.20% due
7/7/94 .................................................................... 2.20 7,000,000
4,700 Saint John's County, Flagler Hospital Inc 1986 Ser A, 2.35% due 7/7/94 .... 2.35 4,700,000
10,000 Volusia County Health Facilities Authority, Pooled Ser 1985 (FGIC Insured),
2.50% due 7/6/94 .......................................................... 2.50 10,000,000
GEORGIA
11,500 Georgia Municipal Association, Pool Ser 1990 COPs (MBIA Insured), 2.25% due
7/7/94 .................................................................... 2.25 11,500,000
HAWAII
Hawaii Department of Budget & Finance,
6,200 Ewa Plain Water, 3.10% due 10/1/94 ........................................ 3.10 6,201,516
10,000 Kaiser Permanente Semiannual Tender Ser 1984 B, 2.58% due 9/1/94 ......... 2.58 10,000,000
IDAHO
10,000 Idaho Health Facilities Authority, Pooled Ser 1985, 2.50% due 7/5/94 ...... 2.50 10,000,000
ILLINOIS
10,000 Chicago, Tender Notes Ser 1994 A, 2.45% due 10/25/94 ....................... 2.45 10,000,000
4,200 Chicago, O'Hare International Airport American Airlines Ser 1983 D, 3.60%
due 7/1/94 ................................................................ 3.60 4,200,000
10,000 Illinois Educational Facilities Authority, Northwestern University Ser
1988, 2.50% due 7/6/94 .................................................... 2.50 10,000,000
Illinois Health Facilities Authority, ......................................
9,115 Evangelical Hospitals Corp Ser 1985 A & B, 3.00% due 7/6/94 .............. 3.00 9,115,000
4,000 Franciscan Sisters Health Corp Ser 1992, 3.50% due 7/1/94 ................. 3.50 4,000,000
5,000 Lutheran General Health Care System Ser 1985 B, 2.75% due 7/1/94 ......... 2.75 5,000,000
11,500 Resurrection Health Care System Ser 1993, 3.00% due 7/1/94 ............... 3.00 11,500,000
10,000 Revolving Fund Ser 1985 B, 2.40% due 7/6/94 ............................... 2.40 10,000,000
10,000 Oak Forest, Homewood South Surburban Mayors & Managers Assn Ser 1989, 2.60%
due 7/6/94 ................................................................ 2.60 10,000,000
INDIANA
6,000 Indiana Hospital Equipment Financing Authority, Ser 1985 (MBIA Insured),
2.90% due 7/6/94 .......................................................... 2.90 6,000,000
<PAGE>
<PAGE>
<CAPTION>
DEAN WITTER TAX-FREE DAILY INCOME TRUST
PORTFOLIO OF INVESTMENTS June 30, 1994 (unaudited) (continued)
- -----------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT (IN CURRENT
THOUSANDS) YIELD VALUE
- ----------- --------- -------------
<S> <C> <C> <C>
KENTUCKY
$ 7,175 Clark County, East Kentucky Power Co-op Inc Ser 1994 J-1 (NRU--CFC Gtd),
2.80% due 10/15/94 ........................................................ 2.80% $ 7,175,000
9,600 Mason County, East Kentucky Power Co-op Inc Ser 1984 (NRU--CFC Gtd), 2.65%
due 7/6/94 ................................................................ 2.65 9,600,000
LOUISIANA
2,700 Louisiana Offshore Terminal Authority, LOOP Inc Ser 1992 A,
2.85% due 7/1/94 .......................................................... 2.85 2,700,000
13,000 New Orleans Aviation Board, Ser 1993 B (MBIA Insured),
2.50% due 7/6/94 .......................................................... 2.50 13,000,000
MARYLAND
5,000 Howard County, Ser 1993 BANs, 2.45% due 7/6/94 ............................. 2.45 5,000,000
13,000 Montgomery County, Cons Ser 1992 C BANs, 2.45% due 7/6/94 .................. 2.45 13,000,000
MASSACHUSETTS
5,000 Massachusetts Bay Transportation Authority, 1984 Ser A,
2.75% due 9/1/94 .......................................................... 2.75 5,000,000
MICHIGAN
4,000 Delta County Economic Development Corporation, Mead-Escanaba Paper Co 1985
Ser E, 3.55% due 7/1/94 ................................................... 3.55 4,000,000
MISSOURI
6,000 Missouri Environmental Improvement & Energy Resources Authority, Noranda
Aluminum Inc Ser 1982, 3.00% due 7/6/94 ................................... 3.00 6,000,000
Missouri Health & Educational Facilities Authority,
10,000 Sisters of Mercy Health System, St Louis Inc Ser 1989 A,
2.30% due 7/7/94 .......................................................... 2.30 10,000,000
9,500 St. Anthony's Medical Center Ser 1989 C, 2.65% due 7/5/94 ................. 2.65 9,500,000
NEBRASKA
7,600 Nebraska Higher Education Loan Program Inc, 1985 Ser A (MBIA Insured),
2.25% due 7/6/94 .......................................................... 2.25 7,600,000
NEVADA
6,000 Clark County, Airport System Refg Ser 1993 A (MBIA Insured),
2.20% due 7/6/94 .......................................................... 2.20 6,000,000
NEW JERSEY
4,000 Gloucester County, Mobil Oil Refining Corp Ser 1993 A, 2.40% due 7/6/94 ... 2.40 4,000,000
NEW YORK
4,000 New York City Municipal Water Finance Authority, Fiscal 1994 Ser C,
3.00% due 7/1/94 .......................................................... 3.00 4,000,000
2,000 New York Local Government Assistance Corporation, Ser 1993 A,
2.05% due 7/6/94 .......................................................... 2.05 2,000,000
8,000 New York State Power Authority, Tender Notes, 2.75% due 9/1/94 ............ 2.75 8,000,000
NORTH CAROLINA
North Carolina Medical Care Commission,
10,000 Baptist Hospitals Ser 1992 B, 2.25% due 7/7/94 ............................ 2.25 10,000,000
5,000 Duke University Hospital Ser 1985 B, 2.20% due 7/7/94 ..................... 2.20 5,000,000
OHIO
1,150 The Ohio State University, General Receipts Ser 1992 B, 2.50% due 7/7/94 .. 2.50 1,150,000
OKLAHOMA
4,675 Oklahoma Water Resources Board, State Loan Prog Ser 1992 A,
2.85% due 9/1/94 .......................................................... 2.85 4,675,000
<PAGE>
<PAGE>
<CAPTION>
DEAN WITTER TAX-FREE DAILY INCOME TRUST
PORTFOLIO OF INVESTMENTS June 30, 1994 (unaudited) (continued)
- -----------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT (IN CURRENT
THOUSANDS) YIELD VALUE
- ----------- --------- -------------
<S> <C> <C> <C>
PENNSYLVANIA
$10,000 Emmaus General Authority, Local Govt Ser 1989 F, 2.35% due 7/6/94 ......... 2.35 % $ 10,000,000
5,000 Washington County Authority, Pittsburgh Eye & Ear Hospital Ser 1985 B-1
Subser C, 2.35% due 7/7/94 ................................................ 2.35 5,000,000
RHODE ISLAND
5,000 Rhode Island Industrial Facilities Corporation Handy & Harman Electrical
Materials Corp Ser 1984, 3.75% Due 7/7/94 ................................. 3.75 5,000,000
SOUTH CAROLINA
3,800 York County, Saluda River Electric Co-op Inc Ser 1984 E-1 (NRU--CFC Gtd),
2.70% due 8/15/94 ......................................................... 2.70 3,800,000
TENNESSEE
3,900 Tennessee, Ser 1993 B BANs, 2.25% due 7/6/94 ............................... 2.25 3,900,000
TEXAS
5,810 Bexar County, Bexar Airforce Village II Ser 1985 B, 2.375% due 7/7/94 ..... 2.375 5,810,000
Harris County Health Facilities Development Corporation,
14,200 Memorial Hospital System Ser 1994, 3.00% due 7/6/94 ....................... 3.00 14,200,000
5,000 St. Luke's Episcopal Hospital 1992 A, 3.30% due 7/1/94 .................... 3.30 5,000,000
10,000 Lower Neches Valley Authority, Chevron USA Inc Ser 1987, 2.70% due 8/15/94 2.70 10,000,000
11,900 Texas Health Facilities Development Corporation, North Texas Pooled Ser
1985 A, 2.50% due 7/6/94 .................................................. 2.50 11,900,000
5,400 Texas Water Development Board Ser 1992 A, 3.30% due 7/1/94 ................. 3.30 5,400,000
UTAH
10,500 Intermountain Power Agency, Ser 1985 E, 3.00% due 9/15/94 .................. 3.00 10,500,000
5,900 Utah Housing Finance Agency, Single Family Mortgage 1994 Ser 1, 2.60% due
7/6/94 .................................................................... 2.60 5,900,000
VERMONT
5,290 Vermont Education & Building Finance Agency, Middlebury College Ser 1988 A,
2.80% due 11/1/94 ......................................................... 2.80 5,290,000
WASHINGTON
5,700 Seattle, Municipal Light & Power Ser 1993, 2.55% due 7/3/94 ............... 2.55 5,700,000
Washington State Housing Finance Commission, Single Family Mortgage,
3,460 Ser 1994 C, 3.75% due 6/1/95 .............................................. 3.75 3,460,000
5,700 Ser 1994 E, 3.70% due 6/15/95 ............................................. 3.70 5,700,000
WEST VIRGINIA
9,475 Kanawha County Building Commission, Charleston Area Medical Center Refg
1989 Ser B, 2.50% due 7/6/94 .............................................. 2.50 9,475,000
5,000 Pleasants County Commission, American Cyanamid Co Ser 1985, 2.25% due
7/6/94 .................................................................... 2.25 5,000,000
WISCONSIN
10,000 Wisconsin Health Facilities Authority, Franciscan Health Care Inc Ser 1985
A-1, 2.90% due 7/6/94 ..................................................... 2.90 10,000,000
-------------
TOTAL SHORT-TERM VARIABLE RATE MUNICIPAL OBLIGATIONS
(AMORTIZED COST $489,951,516) ............................................. 489,951,516
-------------
<PAGE>
<PAGE>
<CAPTION>
DEAN WITTER TAX-FREE DAILY INCOME TRUST
PORTFOLIO OF INVESTMENTS June 30, 1994 (unaudited) (continued)
- -----------------------------------------------------------------------------
YIELD TO
PRINCIPAL MATURITY ON
AMOUNT (IN DATE OF
THOUSANDS) PURCHASE VALUE
- ----------- ------------ --------------
<S> <C> <C> <C>
TAX-EXEMPT COMMERCIAL PAPER (9.0%)
CALIFORNIA
$ 2,000 Orange County, The Irvine Co Apts Issue 1 of 1985, 2.70% due 8/10/94 2.70% $ 2,000,000
GEORGIA
3,900 Burke County Development Authority, Ogolethorpe Power Corp Ser 1992
A, 3.30% due 9/12/94 ................................................ 3.30 3,900,000
LOUISIANA
7,000 Louisiana Offshore Terminal Authority, LOOP Inc Ser 1991 A, 3.30% due
9/13/94 ............................................................. 3.30 7,000,000
12,000 St James Parish, Texaco Inc Ser 1988 B, 2.80% due 8/16/94 ........... 2.80 12,000,000
NORTH CAROLINA
4,500 North Carolina Municipal Power Agency #1, Catawba Electric, 2.70% due
7/27/94 ............................................................. 2.70 4,500,000
TENNESSEE
10,000 Metropolitan Government of Nashville & Davidson County Health &
Education Board, Baptist Hospital Inc Ser 1992, 3.30% due 10/20/94 . 3.30 10,000,000
TEXAS
Lower Colorado River Authority,
5,000 Ser B, 2.95% due 8/29/94 ............................................ 2.95 5,000,000
4,300 Ser B, 3.25% due 9/14/94 ............................................ 3.25 4,300,000
5,000 Texas A&M University, Ser B, 2.95% due 8/26/94 ....................... 2.95 5,000,000
--------------
TOTAL TAX-EXEMPT COMMERCIAL PAPER
(AMORTIZED COST $53,700,000) ....................................... 53,700,000
--------------
SHORT-TERM MUNICIPAL NOTES (12.3%)
CALIFORNIA
20,000 Alameda County, 1993-1994 TRANs, dtd 7/8/93 3.25% due 7/29/94 ....... 2.75 20,007,457
California School Cash Reserve Program Authority, 1993
15,000 Pool Ser A, dtd 7/2/93 3.40% due 7/5/94 ............................. 2.90 15,000,798
5,000 1994 Contingency Ser A, dtd 7/5/94 4.50% due 6/28/95 (a) ........... 4.50 5,030,700
10,000 California Statewide Communities Development Authority, 1994 Ser A
TRANs, dtd 7/6/93 4.50% due 7/17/95 ................................. 4.50 10,084,400
7,000 Los Angeles County, Local Educational Agencies Pooled 1994-95 Ser A
TRANs, dtd 7/7/94 4.50% due 7/6/95 (a) .............................. 4.50 7,050,400
INDIANA
5,000 Indiana Bond Bank Advance Funding Notes Ser 1994 A-2, dtd 1/18/94
3.03% due 1/17/95 ................................................... 3.03 5,007,445
IOWA
10,750 Iowa School Corporations, Warrant Certificates Ser A 1994, dtd
6/29/94 4.25% due 7/17/95 ........................................... 4.25 10,820,258
--------------
TOTAL SHORT-TERM MUNICIPAL NOTES (AMORTIZED COST $73,001,458) ....... 73,001,458
--------------
TOTAL INVESTMENTS (AMORTIZED COST $616,652,974) (B) .................. 103.8% 616,652,974
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS ....................... (3.8) (22,787,069)
----- --------------
NET ASSETS ........................................................... 100.0% $593,865,905
===== ==============
<FN>
- ---------------
BANs --Bond Anticipation Notes.
TRANs--Tax and Revenue Anticipation Notes.
* Due date reflects next rate change.
(a) When issued security.
(b) Cost is the same for federal income tax purposes.
</TABLE>
See Notes to Financial Statements
<PAGE>
<PAGE>
DEAN WITTER TAX-FREE DAILY INCOME TRUST
FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1994 (unaudited)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(amortized cost $616,652,974) (Note 1) .. $616,652,974
Cash ...................................... 2,702,091
Receivable for:
Interest ................................. 3,409,874
Shares of beneficial interest sold ...... 294
Prepaid expenses and other assets ........ 96,630
--------------
TOTAL ASSETS ........................... 622,861,863
--------------
LIABILITIES:
Payable for:
Investments purchased .................... 24,870,915
Shares of beneficial interest repurchased 3,692,559
Investment management fee (Note 2) ...... 244,748
Plan of distribution fee (Note 3) ....... 50,336
Accrued expenses (Note 4) ................. 137,400
--------------
TOTAL LIABILITIES ...................... 28,995,958
--------------
NET ASSETS:
Paid-in-capital ........................... 593,887,610
Accumulated net realized loss on
investments .............................. (22,082)
Accumulated undistributed net investment
income ................................... 377
--------------
NET ASSETS ............................. $593,865,905
==============
NET ASSET VALUE PER SHARE, 593,887,610
shares outstanding (unlimited shares
authorized of $.01 par value) ............ $1.00
=====
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1994 (unaudited)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME:
INTEREST INCOME ....................... $7,911,285
------------
EXPENSES
Investment management fee (Note 2) .. 1,496,967
Plan of distribution fee (Note 3) ... 289,421
Transfer agent fees .................. 260,389
Registration fees .................... 59,393
Shareholder reports and notices ..... 21,464
Professional fees .................... 21,065
Trustees' fees and expenses (Note 4) 13,608
Other ................................ 6,669
------------
TOTAL EXPENSES ...................... 2,168,976
------------
NET INVESTMENT INCOME .............. 5,742,309
------------
NET REALIZED LOSS ON
INVESTMENTS (Note 1) .................. (4,609)
------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ......... $5,737,700
============
</TABLE>
<PAGE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JUNE 30, 1994 ENDED DECEMBER 31,
(UNAUDITED) 1993
---------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ............................................. $ 5,742,309 $ 11,924,708
Net realized gain (loss) on investments ........................... (4,609) 5,416
---------------- -----------------
Net increase in net assets resulting from operations ............ 5,737,700 11,930,124
Dividends to shareholders from net investment income ............... (5,741,932) (11,924,985)
Net increase (decrease) from transactions in shares of beneficial
interest (Note 5) ................................................. 26,183,107 (101,941,025)
---------------- -----------------
Total increase (decrease) ........................................ 26,178,875 (101,935,886)
NET ASSETS:
Beginning of period ................................................ 567,687,030 669,622,916
---------------- -----------------
END OF PERIOD (including undistributed net investment income of
$377 and -0 -, respectively) ...................................... $593,865,905 $ 567,687,030
================ =================
</TABLE>
See Notes to Financial Statements
<PAGE>
<PAGE>
DEAN WITTER TAX-FREE DAILY INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (unaudited)
- -----------------------------------------------------------------------------
1. ORGANIZATION AND ACCOUNTING POLICIES--Dean Witter Tax-Free Daily Income
Trust (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 was incorporated in Maryland in 1980, re-organized as a
Massachusetts business trust on April 30, 1987 and commenced operations on
February 20, 1981.
The following is a summary of significant accounting policies:
A. Valuation of Investments--Portfolio securities are valued at
amortized cost, which approximates market value.
B. Accounting for Investments--Security transactions are accounted for
on the trade date (date the order to buy or sell is executed). In
computing net investment income, the Fund amortizes premiums and
original issue discounts. Interest income is accrued daily. Realized
gains and losses on security transactions are determined on the
identified cost method.
C. 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 and nontaxable
income to its shareholders. Accordingly, no federal income tax is
required.
D. Dividends and Distributions to Shareholders--Dividends and
distributions to shareholders are recorded by the Fund as of the close
of the Fund's business day.
2. INVESTMENT MANAGEMENT AGREEMENT--Pursuant to an Investment Management
Agreement with Dean Witter InterCapital Inc. (the "Investment Manager"), the
Fund pays its 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% of the
portion of the daily net assets not exceeding $500 million; 0.425% of the
portion of the daily net assets exceeding $500 million but not exceeding $750
million; 0.375% of the portion of the daily net assets exceeding $750 million
but not exceeding $1 billion; 0.35% of the portion of the daily net assets
exceeding $1 billion but not exceeding $1.5 billion; 0.325% of the portion of
the daily net assets exceeding $1.5 billion but not exceeding $2 billion;
0.30% of the portion of the daily net assets exceeding $2 billion but not
exceeding $2.5 billion; 0.275% of the portion of the daily net assets
exceeding $2.5 billion but not exceeding $3 billion; and 0.25% of the portion
of the 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 office space and 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 beneficial interest of the Fund are
distributed by Dean Witter Distributors Inc. (the "Distributor"), an
affiliate of the Investment Manager. The Fund has entered into a Plan of
Distribution (the "Plan"), pursuant to Rule 12b-1 under the Act, with the
Distributor whereby the Distributor finances certain activities in connection
with the distribution of shares of the Fund.
<PAGE>
<PAGE>
DEAN WITTER TAX-FREE DAILY INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
- -----------------------------------------------------------------------------
Under the Plan, the Distributor bears the expense of all promotional and
distribution related activities on behalf of the Fund, except for expenses
that the Trustees determine to reimburse, as described hereafter. The
following activities and services may be provided by the Distributor under
the Plan: (1) compensation to sales representatives of the Distributor and
other broker-dealers; (2) sales incentives and bonuses to sales
representatives and to marketing personnel in connection with promoting sales
of the Fund's shares; (3) expenses incurred in connection with the promoting
sales of the Fund's shares; (4) preparing and distributing sales literature;
and (5) providing advertising and promotional activities, including direct
mail solicitation and television, radio, newspaper, magazine and other media
advertisements.
The Fund is authorized to reimburse the Distributor for specific expenses
the Distributor incurs or plans to incur in promoting the distribution of the
Fund's shares. The amount of each monthly reimbursement payment may in no
event exceed an amount equal to a payment at the annual rate of 0.15% of the
Fund's daily net assets during the month. For the six months ended June 30,
1994, the distribution fee established by the Trustees and accrued was at the
average annual rate of 0.09%.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES--The cost of
purchases and proceeds from sales/maturities of portfolio securities for the
six months ended June 30, 1994 aggregated $482,404,677 and $430,975,369,
respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At June 30, 1994, the Fund had
transfer agent fees and expenses payable of approximately $49,000.
On April 1, 1991, the Fund established an unfunded noncontributory defined
benefit pension plan covering all Trustees of the Fund who will have served
as an independent Trustee 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 six
months ended June 30, 1994, included in Trustees' fees and expenses in the
Statement of Operations amounted to $4,047. At June 30, 1994, the Fund had an
accrued pension liability of $43,061 which is included in accrued expenses in
the Statement of Assets and Liabilities.
5. SHARES OF BENEFICIAL INTEREST--Transactions in shares of beneficial
interest, at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED, DECEMBER 31,
JUNE 30, 1994 1993
--------------- -----------------
<S> <C> <C>
Shares sold .................................. 720,445,216 $ 1,430,859,924
Shares issued in reinvestment of dividends .. 5,741,932 11,924,985
--------------- -----------------
726,187,148 1,442,784,909
Shares repurchased ........................... (700,004,041) (1,544,725,934)
--------------- -----------------
Net increase (decrease) in shares outstanding 26,183,107 (101,941,025)
=============== =================
</TABLE>
6. FEDERAL INCOME TAX STATUS--At December 31, 1993, the Fund had a net
capital loss carryover of approximately $17,500 of which $5,800 will be
available through December 31, 1995 and $11,700 will be available through
December 31, 1999, to the extent provided by regulations. To the extent that
these carryover losses are used to offset future capital gains, it is
probable that the gains so offset will not be distributed to shareholders
since any such distributions may be taxable to shareholders as ordinary
income. For the six months ended June 30, 1994, the Fund incurred
approximately $4,600 of net capital losses.
<PAGE>
<PAGE>
DEAN WITTER TAX-FREE DAILY INCOME TRUST
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE
SIX MONTHS
ENDED JUNE FOR THE YEAR ENDED DECEMBER 31,
30, 1994 -----------------------------------------------------------
(UNAUDITED) 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ---------- ----------
Net investment income .................... 0.009 0.018 0.024 0.039 0.053 0.058
Less dividends from net investment
income . ................. (0.009) (0.018) (0.024) (0.039) (0.053) (0.058)
---------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period ........... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
========== ========== ========== ========== ========== ==========
TOTAL INVESTMENT RETURN ................... 0.93%(1) 1.85% 2.39% 4.02% 5.48% 5.96%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $593,866 $567,685 $669,623 $823,046 $896,598 $873,112
Ratio of expenses to average net assets . 0.70%(2) 0.71% 0.68% 0.68% 0.64% 0.61%
Ratio of net investment income to
average net assets ...................... 1.86%(2) 1.83% 2.37% 3.95% 5.30% 5.82%
<FN>
- ---------------
(1) Not annualized
(2) Annualized
</TABLE>
See Notes to Financial Statements
<PAGE>
<PAGE>
TRUSTEES
Jack F. Bennett
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. John E. Jeuck
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
Edward R. Telling
OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and General Counsel
Katherine H. Stromberg
Vice President
Thomas F. Caloia
Treasurer
TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center--Plaza Two
Jersey City, New Jersey 07311
LEGAL COUNSEL
Sheldon Curtis
Two World Trade Center
New York, New York 10048
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
The financial statements included herein have been taken from the records of
the Fund without examination by the independent accountants and accordingly
they do not express an opinion thereon.
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.
DEAN WITTER
TAX-FREE DAILY
INCOME TRUST
SEMIANNUAL REPORT
JUNE 30, 1994
