<PAGE>
<PAGE>
DEAN WITTER TAX-FREE DAILY INCOME TRUST
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- -----------------------------------------------------------------------------
The three forces influencing the direction and level of yields on
short-term municipal securities during the first half of 1995 were changes in
Federal Reserve monetary policy, shifts in investor demand in a generally
thin market and reaction to the bankruptcy of Orange County, California.
Yields on tax-free money market instruments declined as mounting evidence
of a slowing economy caused interest rates to fall in anticipation of an
easing of Federal Reserve Board monetary policy. The drop in yields was most
apparent among securities with maturities of six months to one year. Shorter
maturities displayed a more volatile pattern in response to changes in
seasonal demand and a diminished supply of suitable tax-free money market
investments.
The decline in interest rates during the first half of 1995 essentially
erased the increase in yield that occurred at the long-end of the municipal
money market during the second half of 1994. The Bond Buyer One Year Note
Index fell from a peak of 5.10 percent in mid-January to 3.79 percent at the
end of June, only four basis points above the level one year earlier. Yields
for the shortest maturities, on the other hand, fluctuated within a wider
band during the six month period. Returns for variable-rate demand
obligations (VRDOs) with weekly rate changes ranged from a low of 2.60
percent in early January, to a high of 4.70 percent in late April during the
tax redemption season. At the end of June, weekly rates stood at 4.00
percent, 20 basis points above one-year yields.
The Orange County, California bankruptcy continued to cloud the market.
The County's difficulties had been precipitated by the collapse of its highly
leveraged investment pool in December 1994. Investors became more selective
in their purchases of California securities. As a result, many California
issuers were faced with higher borrowing costs or the need to acquire credit
enhancement for their financings.
PERFORMANCE AND PORTFOLIO COMPOSITION
On June 30, 1995, the Fund's annualized 30-day yield was 3.14 percent. Net
assets stood at $556 million. At the end of June, the portfolio was broadly
diversified geographically and across market sectors. The Fund was 73 percent
invested in tax-exempt VRDOs. Tax-exempt commercial paper and municipal
notes, the two other types of securities utilized in the portfolio, comprised
15 percent and 12 percent of the portfolio, respectively.
The Fund's weighted average maturity remained within a short (30 day) to
moderate (45 day) range for most of the first half of 1995. During the month
of June, seasonal purchases of new one-year tax and revenue anticipation
notes (TRANs) caused the average maturity to extend modestly to 50 days.
Fewer commitments were made to new note purchases than in past years because
of greater selectivity.
The portfolio had no exposure to Orange County or its pool participants at
the time of the county's declaration of bankruptcy. The failure of the Orange
County investment pool reinforced the need to emphasize safety and quality in
the selection of all tax-free money fund investments. Particular attention
has been given to analyzing each borrower's investment pool practices when
making portfolio selections. Furthermore, purchases of TRANs issued by
California municipalities are currently being avoided.
<PAGE>
LOOKING AHEAD
Extension of the Fund's average maturity in the weeks ahead will hinge
upon Federal Reserve Board actions affecting the direction of interest rates
as well as the availability of suitable investments. Developments in the
bankruptcy proceedings of Orange County, California, will be watched closely
for their impact on the tax-free money market. 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,
/s/ Charles A. Fiumefreddo
------------------------------
Charles A. Fiumefreddo
Chairman of the Board
<PAGE>
DEAN WITTER TAX-FREE DAILY INCOME TRUST
PORTFOLIO OF INVESTMENTS June 30, 1995 (unaudited)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN CURRENT
THOUSANDS) YIELD VALUE
- ----------- --------- --------------
<C> <S> <C> <C>
SHORT-TERM VARIABLE RATE MUNICIPAL OBLIGATIONS* (76.2%)
ALABAMA
$ 3,000 Birmingham Medical Clinic Board, University of Alabama Health
Services Foundation Ser 1991, 4.85% due 7/03/95 ..................... 4.85% $ 3,000,000
CALIFORNIA
10,500 California Public Capital Improvements Financing Authority, Pooled
Ser 1988 C, 3.70% due 9/15/95 ....................................... 3.70 10,500,000
COLORADO
8,000 Arapahoe County, Highway E-470 Ser 1986 F, 4.45% due 8/31/95 ........ 4.45 8,000,000
9,000 Colorado Health Facilities Authority, Kaiser Permanente 1994 Ser A,
4.00% due 7/07/95 ................................................... 4.00 9,000,000
CONNECTICUT
5,000 Connecticut Housing Finance Authority, 1994 Subser H-1, 4.30% due
9/01/95 ............................................................. 4.30 5,000,000
10,000 Connecticut Special Assessment, Unemployment Compensation 1993 Series
C (FGIC), 3.90% due 7/01/95 ......................................... 3.90 10,000,000
DISTRICT OF COLUMBIA
4,900 The American University Ser 1985, 4.30% due 7/07/95 .................. 4.30 4,900,000
FLORIDA
11,500 Dade County, Water & Sewer System Ser 1994 (FGIC), 4.20%, due 7/07/95 4.20 11,500,000
18,500 Dade County Industrial Development Authority, Dolphins Stadium Ser
1985 A, 4.20% due 7/07/95 ........................................... 4.20 18,500,000
7,000 Orlando Utilities Commission, Water & Electric Ser 1991 BANs, 3.90%
due 7/07/95 ......................................................... 3.90 7,000,000
7,850 Sarasota County Health Facilities Authority, Venice Hospital, 4.35%
due 7/03/95 ......................................................... 4.35 7,850,000
11,800 Volusia County Health Facilities Authority, Pooled Ser 1985 (FGIC),
3.85% due 7/07/95 ................................................... 3.85 11,800,000
GEORGIA
3,000 Burke County Development Authority, Oglethorpe Power Corp Vogtle Proj
Ser 1994 A (FGIC), 4.25% due 7/03/95 ................................ 4.25 3,000,000
16,896 Georgia Municipal Association, Pool Ser 1990 COPs (MBIA), 4.00% due
7/07/95 ............................................................. 4.00 16,895,628
5,000 Hapeville Development Authority, Hapeville Hotel Ltd Ser 1985, 4.35%
due 7/03/95 ......................................................... 4.35 5,000,000
HAWAII
5,000 Hawaii Department of Budget and Finance, Kaiser Permanente Semiannual
Tender Ser 1984 B, 4.40% due 9/01/95 ................................ 4.40 5,000,000
IDAHO
10,000 Idaho Health Facilities Authority, Pooled Ser 1985, 4.20% due 7/07/95 4.20 10,000,000
</TABLE>
<PAGE>
DEAN WITTER TAX-FREE DAILY INCOME TRUST
PORTFOLIO OF INVESTMENTS June 30, 1995 (unaudited) (continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN CURRENT
THOUSANDS) YIELD VALUE
- ----------- --------- --------------
<C> <S> <C> <C>
ILLINOIS
$ 5,000 Chicago, Tender Notes Ser 1994 A, 4.15% due 7/19/95 .................. 4.15% $ 5,000,000
10,000 Illinois Educational Facilities Authority, Northwestern University
Ser 1988, 4.05% due 7/07/95 ......................................... 4.05 10,000,000
Illinois Health Facilities Authority,
6,090 Evangelical Hospitals Corp Ser 1985 A, 4.30% due 7/07/95 ........... 4.30 6,090,000
5,000 Lutheran General Health Care System Ser 1985 B, 3.75% due 7/03/95 .. 3.75 5,000,000
9,100 Parkside Development Corp Ser 1991, 4.10% due 7/07/95 ................ 4.10 9,100,000
10,000 Oak Forest, Homewood South Suburban Mayors & Managers Assn Ser 1989,
4.20% due 7/07/95 ................................................... 4.20 10,000,000
KENTUCKY
9,500 Mason County, East Kentucky Power Co-op Inc Ser 1984
(NRU-CFC Gtd), 4.30% due 7/07/95 .................................... 4.30 9,500,000
LOUISIANA
5,320 Louisiana Offshore Terminal Authority, LOOP Inc 1991 Ser A, 4.00% due
7/07/95 ............................................................. 4.00 5,320,000
20,700 New Orleans Aviation Board, Ser 1993 B (MBIA), 4.10% due 7/07/95 .... 4.10 20,700,000
MASSACHUSETTS
5,000 Massachusetts Bay Transportation Authority, 1984 Ser A, 4.40% due
9/01/95 ............................................................. 4.40 5,000,000
5,000 Massachusetts Municipal Wholesale Electric Company, Power Supply
System 1994 Ser C, 3.85% due 7/07/95 ................................ 3.85 5,000,000
MINNESOTA
4,105 Minnesota Housing Finance Agency, Single Family 1994 Ser T, 4.85% due
12/15/95 ............................................................ 4.85 4,105,000
8,000 University of Minnesota Regents, Ser 1985 F, 4.50% due 8/01/95 ...... 4.50 8,000,000
MISSOURI
5,000 Missouri Economic Development Export & Infrastructure Board, Advance
Fdg Ser 1994 C, 3.95% due 8/01/95 ................................... 3.95 5,000,000
10,000 Missouri Health & Educational Facilities Authority, Sisters of Mercy
Health System St Louis Inc Ser 1989 A, 4.00% due 7/07/95 ........... 4.00 10,000,000
9,500 St Anthony's Medical Center Ser 1989 C, 4.00% due 7/07/95 .......... 4.00 9,500,000
NEBRASKA
7,600 Nebraska Higher Education Loan Program Inc, 1985 Ser A (MBIA), 4.00%
due 7/07/95 ......................................................... 4.00 7,600,000
NEVADA
6,000 Clark County, Airport System Refg Ser 1993 A (MBIA), 4.20% due
7/07/95 ............................................................. 4.20 6,000,000
NEW JERSEY
4,000 Gloucester County, Mobil Oil Refining Corp Ser 1993 A, 3.80% due
7/07/95 ............................................................. 3.80 4,000,000
3,500 Union County Industrial Pollution Control Financing Authority, Exxon
Corp, 4.35% due 7/03/95 ............................................. 4.35 3,500,000
NEW YORK
5,000 New York State Power Authority, Tender Notes, 4.40% due 9/01/95 ..... 4.40 5,000,000
</TABLE>
<PAGE>
DEAN WITTER TAX-FREE DAILY INCOME TRUST
PORTFOLIO OF INVESTMENTS June 30, 1995 (unaudited) (continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN CURRENT
THOUSANDS) YIELD VALUE
- ----------- --------- --------------
<C> <S> <C> <C>
NORTH CAROLINA
North Carolina Medical Care Commission,
$ 5,000 Baptist Hospitals Ser 1992 B, 3.95% due 7/07/95 ..................... 3.95% $ 5,000,000
10,000 Duke University Hospital Ser 1985 B, 4.00% due 7/07/95 ............. 4.00 10,000,000
OHIO
7,700 Columbus, Unltd Tax Ser 1995-1, 3.80% due 7/07/95 .................... 3.80 7,700,000
2,250 Ohio State University, General Receipts Ser 1992 B, 4.15% due 7/07/95 4.15 2,250,000
OKLAHOMA
5,500 Oklahoma Water Resources Board, State Loan Prog Ser 1994 A, 4.50% due
9/01/95 ............................................................. 4.50 5,500,000
PENNSYLVANIA
10,000 Pennsylvania Higher Education Facilities Authority, Thomas Jefferson
University Ser 1992 C, 3.90% due 2/26/96 ............................ 3.90 10,000,000
SOUTH CAROLINA
5,000 York County, Saluda River Electric Coop Ser 1984-E2 (NRU-CFC Gtd),
4.55% due 8/15/95 ................................................... 4.55 5,000,000
TENNESSEE
5,000 Tennessee, Ser 1995 A BANs, 4.00% due 7/07/95 ........................ 4.00 5,000,000
TEXAS
3,500 Gulf Coast Waste Disposal Authority, Amoco Oil Co Ser 1992, 4.10% due
7/03/95 ............................................................. 4.10 3,500,000
Harris County Health Facilities Development Corporation,
28,200 Methodist Hospital Ser 1994, 4.50% due 7/03/95 ...................... 4.50 28,200,000
3,000 St Luke's Episcopal Hospital Ser 1992 A, 4.50% due 7/03/95 ......... 4.50 3,000,000
3,000 Harris County Industrial Development Corporation, Exxon Corp
Ser 1984 B, 4.25% due 7/03/95 ....................................... 4.25 3,000,000
UTAH
5,000 Intermountain Power Agency, 1985 Ser E, 4.15% due 9/15/95 ........... 4.15 5,000,000
VIRGINIA
10,000 Virginia Housing Development Authority, Ser 1993 A, 4.25% due 7/12/95 4.25 10,000,000
WEST VIRGINIA
5,000 Kanawha County Building Commission, Charleston Area Medical Center
Refg 1989 Ser B, 4.20% due 7/07/95 .................................. 4.20 5,000,000
5,000 Pleasants County Commission, American Cyanamid Co Ser 1985, 4.20% due
7/07/95 ............................................................. 4.20 5,000,000
WISCONSIN
10,000 Wisconsin Health Facilities Authority, Franciscan Health Care Inc
Ser 1985 A-1, 4.40% due 7/07/95 ..................................... 4.40 10,000,000
--------------
TOTAL SHORT-TERM VARIABLE RATE MUNICIPAL OBLIGATIONS
(AMORTIZED COST $423,510,628) ................................................... 423,510,628
--------------
</TABLE>
<PAGE>
DEAN WITTER TAX-FREE DAILY INCOME TRUST
PORTFOLIO OF INVESTMENTS June 30, 1995 (unaudited) (continued)
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YIELD TO
PRINCIPAL MATURITY ON
AMOUNT (IN DATE OF
THOUSANDS) PURCHASE VALUE
- ----------- ------------ --------------
<C> <S> <C> <C>
TAX-EXEMPT COMMERCIAL PAPER (16.1%)
COLORADO
$10,000 Platte River Power Authority, Electric Subordinate Lien Ser S-1,
4.15% due 9/07/95 ................................................ 4.15 % $10,000,000
FLORIDA
7,190 Jacksonville Electric Authority, 3.70% due 9/22/95 ................ 3.70 7,190,000
GEORGIA
8,000 Georgia Municipal Gas Authority, TRANSCO Portfolio 1 Ser A, 3.95%
due 9/12/95 ...................................................... 3.95 8,000,000
8,000 Burke County Development Authority, Oglethorpe Power Corp Ser 1992
A, 3.95% due 9/11/95 ............................................. 3.95 8,000,000
MASSACHUSETTS
5,000 Massachusetts Health & Educational Facilities Authority, Boston
University Ser H, 3.55% due 7/06/95 .............................. 3.55 5,000,000
5,000 Massachusetts Industrial Finance Agency, New England Power Co 1992
Ser B, 4.00% due 10/19/95 ........................................ 4.00 5,000,000
MICHIGAN
5,000 Michigan Building Authority, Ser 1, 3.85% due 7/26/95 ............ 3.85 5,000,159
MINNESOTA
5,000 Southern Minnesota Municipal Power Agency, Ser B, 4.05% due
10/19/95 ......................................................... 4.05 5,000,000
NORTH CAROLINA
4,000 North Carolina Eastern Municipal Power Agency, #1 Catawba
Electric, 4.05% due 10/12/95 ..................................... 4.05 4,000,000
TEXAS
Houston, Water and Sewer Ser A,
3,500 4.25% due 8/10/95 ................................................ 4.25 3,500,000
3,500 4.15% due 8/23/95 ................................................ 4.15 3,500,000
5,000 4.10% due 9/13/95 ................................................ 4.10 5,000,000
5,000 3.60% due 9/27/95 ................................................ 3.60 5,000,000
3,900 San Antonio, Water System Ser 1992, 3.85% due 9/21/95 ............ 3.85 3,900,000
Texas Public Finance Authority Ser 1993 A,
5,000 4.20% due 8/23/95 ................................................ 4.20 5,000,000
6,500 4.20% due 10/05/95 ............................................... 4.20 6,500,000
--------------
TOTAL TAX-EXEMPT COMMERCIAL PAPER (AMORTIZED COST $89,590,159) .... 89,590,159
--------------
</TABLE>
<PAGE>
DEAN WITTER TAX-FREE DAILY INCOME TRUST
PORTFOLIO OF INVESTMENTS June 30, 1995 (unaudited) (continued)
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
YIELD TO
PRINCIPAL MATURITY ON
AMOUNT (IN DATE OF
THOUSANDS) PURCHASE VALUE
- ----------- ------------ --------------
<C> <S> <C> <C>
SHORT-TERM MUNICIPAL NOTES (12.0%)
CALIFORNIA
$ 8,000 Alameda County, 1994-95 TRANs, dtd 7/21/94 4.75% due 8/11/95 ..... 4.20% $ 8,004,716
10,000 California Statewide Communities Development Authority, 1994 Ser A
TRANs, dtd 7/06/94 4.50% due 7/17/95 ............................. 3.65 10,003,591
7,000 Los Angeles County, Local Educational Agencies Pooled 1994-95 Ser
A TRANs, dtd 7/07/94 4.50% due 7/06/95 ........................... 3.75 7,000,692
IDAHO
7,000 Idaho, Series 1995 TRANs, dtd 7/06/95 4.50% due 06/27/96 WI ...... 3.80 7,046,060
INDIANA
7,225 Indianapolis Local Public Improvement Bond Bank Notes Ser 1994 H,
dtd 12/21/94 5.25% due 7/14/95 ................................... 4.85 7,225,999
IOWA
Iowa School Corporations, Warrant Certificates
10,750 Ser A 1994 (CGIC), dtd 6/29/94 4.25% due 7/17/95 ................. 3.60 10,752,950
9,000 Ser A 1995-6 (CGIC), dtd 6/28/95 4.75% due 6/28/96 ............... 3.85 9,077,301
MICHIGAN
7,325 Michigan Municipal Bond Authority, Ser 1995 B Notes, dtd 7/03/95
4.50% due 7/03/96 WI ............................................. 3.80 7,374,370
--------------
TOTAL SHORT-TERM MUNICIPAL NOTES
(AMORTIZED COST $66,485,679) ..................................... 66,485,679
--------------
TOTAL INVESTMENTS (AMORTIZED COST $579,586,466) (A)................ 104.3% 579,586,466
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS ................... (4.3) (23,635,287)
--------------
NET ASSETS ........................................................ 100.0% $555,951,179
==============
<FN>
- ---------------
BANs Bond Anticipation Notes.
COPs Certificates of Participation.
TRANs Tax and Revenue Anticipation Notes.
WI Security purchased on a when issued basis.
* Due date reflects next rate change.
(a) Cost is the same for federal income tax purposes.
Bond Insurance:
- --------------
CGIC Capital Guaranty Insurance Company.
FGIC Financial Guaranty Insurance Company.
MBIA Municipal Bond Investors Assurance Corporation.
</TABLE>
See Notes to Financial Statements
<PAGE>
DEAN WITTER TAX-FREE DAILY INCOME TRUST
FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995 (unaudited)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(amortized cost $579,586,466) ........... $579,586,466
Cash ..................................... 1,282,259
Receivable for:
Interest ................................ 5,084,098
Investments sold ........................ 5,941
Shares of beneficial interest sold ..... 2,208
Prepaid expenses and other assets ....... 86,187
--------------
TOTAL ASSETS .......................... 586,047,159
--------------
LIABILITIES:
Payable for:
Investments purchased ................... 24,422,597
Shares of beneficial interest
repurchased ............................ 5,268,598
Investment management fee ............... 227,353
Plan of distribution fee ................ 46,243
Accrued expenses and other payables ..... 131,189
--------------
TOTAL LIABILITIES ..................... 30,095,980
--------------
NET ASSETS:
Paid-in-capital .......................... 555,972,862
Accumulated undistributed net investment
income .................................. 399
Accumulated net realized loss ............ (22,082)
--------------
NET ASSETS ............................ $555,951,179
==============
NET ASSET VALUE PER SHARE,
555,972,862 shares outstanding
(unlimited shares authorized of $.01 par
value) .................................. $1.00
=====
</TABLE>
STATEMENT OF OPERATIONS
For the six months ended June 30, 1995 (unaudited)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME .................. $11,212,908
-------------
EXPENSES
Investment management fee ...... 1,393,455
Plan of distribution fee ........ 266,062
Transfer agent fees and expenses 263,541
Registration fees ............... 41,553
Shareholder reports and notices 35,983
Professional fees ............... 17,149
Trustees' fees and expenses .... 14,496
Custodian fees .................. 6,803
Other ........................... 9,346
-------------
TOTAL EXPENSES ................. 2,048,388
-------------
NET INVESTMENT INCOME AND
NET INCREASE .................. $ 9,164,520
=============
</TABLE>
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE YEAR
JUNE 30, 1995 ENDED DECEMBER
(UNAUDITED) 31, 1994
---------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ................................................. $ 9,164,520 $ 13,505,449
Net realized loss ..................................................... -- (4,609)
---------------- -----------------
Net increase ......................................................... 9,164,520 13,500,840
---------------- -----------------
Dividends to shareholders from net investment income ................... (9,164,746) (13,504,824)
Net increase (decrease) from transactions in shares of beneficial
interest .............................................................. 12,368,722 (24,100,363)
---------------- -----------------
Total increase (decrease) ............................................ 12,368,496 (24,104,347)
NET ASSETS:
Beginning of period .................................................... 543,582,683 567,687,030
---------------- -----------------
END OF PERIOD (including undistributed net investment income of $399
and $625, respectively) ................................................ $555,951,179 $543,582,683
================ =================
</TABLE>
See Notes to Financial Statements
<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, reorganized 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). Realized
gains and losses on security transactions are determined by the identified
cost method. The Fund amortizes premiums and accretes discounts on
securities purchased over the life of the respective securities. Interest
income is accrued daily.
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 provision
is required.
D. Dividends and Distributions to Shareholders -- The Fund records
dividends and distributions to shareholders as of the close of each
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, 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: 0.50% to the portion of the
daily net assets not exceeding $500 million; 0.425% to the portion of the
daily net assets exceeding $500 million but not exceeding $750 million;
0.375% to the portion of the daily net assets exceeding $750 million but not
exceeding $1 billion; 0.35% to the portion of the daily net assets exceeding
$1 billion but not exceeding $1.5 billion; 0.325% to the portion of the daily
net assets exceeding $1.5 billion but not exceeding $2 billion; 0.30% to the
portion of the daily net assets exceeding $2 billion but not exceeding $2.5
billion; 0.275% to the portion of the daily net assets exceeding $2.5 billion
but not exceeding $3 billion; and 0.25% to 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, 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 -- Dean Witter Distributors Inc. (the "Distributor"),
an affiliate of the Investment Manager, is the distributor of the Fund's
shares and, in accordance with a Plan of Distribution (the "Plan") pursuant
to Rule 12b-1 under the Act, finances certain expenses in connection
therewith.
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
<PAGE>
DEAN WITTER TAX-FREE DAILY INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
- -----------------------------------------------------------------------------
below. The following activities and services may be provided by the
Distributor and other broker-dealers under the Plan: (1) compensation to, and
expenses 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 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 average daily net assets. For the six months ended June 30, 1995, the
distribution fee was accrued 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, 1995 aggregated $467,004,761 and $423,545,414,
respectively.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At June 30, 1995, the Fund had
transfer agent fees and expenses payable of approximately $47,000.
The Fund established an unfunded noncontributory defined benefit pension
plan covering all independent Trustees of the Fund who will have served as
independent Trustees 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, 1995 included in Trustees' fees and expenses in the
Statement of Operations amounted to $4,070. At June 30, 1995, the Fund had an
accrued pension liability of $49,885 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
JUNE 30, 1995 31, 1994
--------------- -----------------
<S> <C> <C>
Sold .......................................... 607,625,602 1,349,415,609
Reinvestment of dividends ..................... 9,164,746 13,504,824
--------------- -----------------
616,790,348 1,362,920,433
Repurchased ................................... (604,421,626) (1,387,020,796)
--------------- -----------------
Net increase (decrease) in shares outstanding 12,368,722 (24,100,363)
=============== =================
</TABLE>
6. FEDERAL INCOME TAX STATUS -- At December 31, 1994, the Fund had a net
capital loss carryover of approximately $22,100 of which $5,800 will be
available through December 31, 1995, $11,700 will be available through
December 31, 1999 and $4,600 will be available through December 31, 2002 to
offset future capital gains to the extent provided by regulations.
<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 For the year ended December 31,
JUNE 30, 1995 ----------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
-------------- ----------- ---------- ---------- ---------- ----------
<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 .................... 0.016 0.022 0.018 0.024 0.039 0.053
Less dividends from net investment
income . ................. (0.016) (0.022) (0.018) (0.024) (0.039) (0.053)
-------------- ----------- ---------- ---------- ---------- ----------
Net asset value, end of period ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============== =========== ========== ========== ========== ==========
TOTAL INVESTMENT RETURN .................. 1.63%(1) 2.25% 1.85% 2.39% 4.02% 5.48%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands) $555,951 $543,583 $567,687 $669,623 $823,046 $896,598
Ratios to average net assets:
Expenses ................................ 0.72%(2) 0.71% 0.71% 0.68% 0.68% 0.64%
Net investment income ................... 3.23%(2) 2.22% 1.83% 2.37% 3.95% 5.30%
<FN>
- ---------------
(1) Not annualized
(2) Annualized
</TABLE>
See Notes to Financial Statements
<PAGE>
TRUSTEES
Jack F. Bennett
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
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
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, 1995
