<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
Two World Trade Center,
New York, New York 10048
LETTER TO THE SHAREHOLDERS September 30, 1996
DEAR SHAREHOLDER:
The twelve-month period ended September 30, 1996 was quite favorable for
equity investors. The broad-based stock market, as measured by the Standard &
Poor's 500 Composite Stock Price Index, rose 20.30 percent during the period,
while the Dow Jones Industrial Average rose 25.71 percent. For most of the
year a slow-but-steady economy, low unemployment and low interest rates,
combined with the absence of inflationary pressure to propel the stock market
higher and higher.
Small-capitalization stocks, while providing good performance, continued to
lag larger-capitalization stocks during this period. Investors once again
fearing the end of a prolonged bull market and succumbing to a "bigger is
better" mentality felt more comfortable with larger, well-known names.
PERFORMANCE AND PORTFOLIO STRUCTURE
Against this backdrop, Dean Witter Developing Growth Securities posted a
total return of 17.53 percent for the twelve-month period ended
September 30, 1996. During the same period, the NASDAQ Composite Index
returned 17.57 percent, while the Russell 2000 Index (a benchmark for
small-cap companies) returned 13.13 percent. The accompanying chart
illustrates the growth of a $10,000 investment in the Fund on
September 30, 1986 through the end of the fiscal year, compared to a similar
investment in the issues that comprise the Standard & Poor's 500 Composite
Stock Price Index. (The Fund commenced operations on
April 29, 1983.)
The Fund's performance during the fiscal year was adversely impacted by the
correction in technology-related stocks, particularly semi-conductors. When
the fiscal year began on October 1, 1995, approximately
45 percent of the Fund's assets were invested in the technology and
technology-related sectors. This overweighting was gradually reduced to 22
percent of assets by the end of this fiscal year. On September 30, 1996, the
Fund's technology holdings consisted of unique software, Internet
telecommunications equipment and electronics companies.
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
LETTER TO THE SHAREHOLDERS September 30, 1996, continued
Throughout the fiscal year, the Fund maintained a sizable weighting in health
care (approximately 20 percent of assets). After a tremendous rally toward
the end of 1995 and continuing into the first quarter of 1996, health care
stocks cooled off going into the spring and summer months. July brought a
long-awaited correction, and many health care names experienced sizable
declines as investors shifted to more economically sensitive areas. Sector
concerns and earnings disappointments in a few stocks contributed to the
overall weakness in the health care arena. Small-capitalization names and
biotechnology stocks in particular were negatively affected by fears of
rising interest rates. However, signs of a somewhat more moderate economy
lifted the stock market and many health care issues in early August.
Other changes to the portfolio included increasing the Fund's exposure to the
business and consumer services (18 percent of assets) and energy sectors (6
percent). Energy stocks, along with financials
(5 percent of the portfolio), were among the Fund's strongest performing
assets during the period under review.
DEAN WITTER DEVELOPING GROWTH
GROWTH OF $10,000
DATE TOTAL S&P 500
===================================================================
September 30, 1986 $10,000 $10,000
===================================================================
September 30, 1987 $12,807 $14,342
===================================================================
September 30, 1988 $11,299 $12,567
===================================================================
September 30, 1989 $13,239 $16,704
===================================================================
September 30, 1990 $10,476 $15,162
===================================================================
September 30, 1991 $16,501 $19,880
===================================================================
September 30, 1992 $14,328 $22,073
- -------------------------------------------------------------------
September 30, 1993 $24,064 $24,939
- -------------------------------------------------------------------
September 30, 1994 $21,927 $25,857
- -------------------------------------------------------------------
September 30, 1995 $32,204 $33,540
- -------------------------------------------------------------------
September 30, 1996 $37,850(3) $40,350
===================================================================
AVERAGE ANNUAL TOTAL RETURNS
1 YEAR 5 YEARS 10 YEARS
===========================================
17.53(1) 18.06(1) 14.24(1)
-------------------------------------------
12.53(2) 17.86(2) 14.24(2)
===========================================
===============================
_____ Fund _____S&P 500 (4)
===============================
Past performance is not predictive of future returns.
- ------------------------------------
(1) Figure shown assumes reinvestment of all distributions and does not
reflect the deduction of any sales charges.
(2) Figure shown assumes reinvestment of all distributions and the deduction
of the maximum applicable contingent deferred sales charge (CDSC) (1
year-5%, 5 years-2%, 10 years- 0%). See the Fund's current prospectus for
complete details on fees and sales charges.
(3) Closing value assuming a complete redemption on September 30, 1996.
(4) The Standard and Poor's 500 Composite Stock Price Index (S&P 500) is a
broad-based index, the performance of which is based on the average
performance of 500 widely held common stocks. The performance of the index
does not include any expenses, fees or charges. The Index is unmanaged and
should not be considered an investment.
LOOKING AHEAD
Looking ahead, we anticipate that the U.S. economy will continue to slow for
the remainder of 1996 and into early 1997. This slowdown will impact all
sectors and thus make it more difficult for investors to find companies that
can meet or beat earnings expectations. With the underperformance of
small-cap stocks over the last two years, many are selling well below their
52-week highs. We believe Dean Witter Developing Growth Securities is well
positioned to take advantage of any investment opportunities that may arise.
We appreciate your support of Dean Witter Developing Growth Securities 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 DEVELOPING GROWTH SECURITIES TRUST
PORTFOLIO OF INVESTMENTS September 30, 1996
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------- ------------------------------------------------ --------------
<S> <C> <C>
COMMON STOCKS (100.1%)
Advertising (0.6%)
183,100 Eagle River Interactive, Inc.* .................. $ 1,876,775
11,500 Lamar Advertising Co.* .......................... 468,625
58,300 Outdoor Systems, Inc.* .......................... 2,710,950
--------------
5,056,350
--------------
Aerospace (0.9%)
175,000 Hexcel Corp.* ................................... 3,390,625
242,300 Orbital Sciences Corp.* ......................... 4,300,825
--------------
7,691,450
--------------
Biotechnology (4.0%)
40,000 Alteon, Inc.* ................................... 330,000
100,500 Biochem Pharma, Inc.* ........................... 3,994,875
95,000 Centocor, Inc.* ................................. 3,360,625
50,000 Genetics Institute, Inc.* ....................... 3,450,000
160,000 Genzyme Corp. General Division* ................. 4,020,000
115,000 Gilead Sciences, Inc.* .......................... 3,248,750
225,000 Liposome Co., Inc.* ............................. 4,246,875
140,000 PathoGenesis Corp.* ............................. 2,450,000
100,000 Regeneron Pharmaceuticals, Inc.* ................ 2,000,000
103,000 SangStat Medical Corp.* ......................... 2,613,625
83,000 Vertex Pharmaceuticals, Inc.* ................... 2,407,000
--------------
32,121,750
--------------
Broadcast Media (2.9%)
80,000 American Radio Systems Corp.* ................... 2,940,000
93,200 Cinar Films Inc. (Class B)* (Canada) ............ 2,399,900
89,800 Film Roman, Inc.* ............................... 898,000
50,000 Infinity Broadcasting Corp. (Class A)* ......... 1,575,000
95,000 Jacor Communications, Inc.* ..................... 3,230,000
130,000 Lin Television Corp.* ........................... 5,330,000
160,000 Mecklermedia Corp.* ............................. 2,880,000
85,000 SFX Broadcasting, Inc. (Class A)* ............... 3,846,250
--------------
23,099,150
--------------
Building Materials (0.1%)
100,000 Universal Forest Products, Inc. ................. 1,262,500
--------------
Business Services (3.1%)
48,700 CCC Information Services, Inc.* ................. 1,010,525
185,000 CFI Proservices, Inc.* .......................... 3,515,000
239,750 Checkfree Corp.* ................................ 4,795,000
120,000 CSG Systems International, Inc.* ................ 2,340,000
119,500 Dendrite International, Inc.* ................... 3,614,875
95,000 DST Systems, Inc.* .............................. 3,040,000
30,000 Gartner Group, Inc. (Class A)* .................. 1,005,000
70,000 Restrac, Inc.* .................................. 1,312,500
29,200 RMH Teleservices, Inc.* ......................... 430,700
70,000 Sitel Corp.* .................................... $ 3,115,000
23,800 USCS International, Inc.* ....................... 407,575
--------------
24,586,175
--------------
Commercial Equipment (0.8%)
130,000 Checkpoint Systems, Inc.* ....................... 3,445,000
140,000 Watsco, Inc. .................................... 2,852,500
--------------
6,297,500
--------------
<PAGE>
NUMBER OF
SHARES VALUE
- ----------- ------------------------------------------------ --------------
Commercial Services (4.8%)
25,900 Abacus Direct Corp.* ............................ 524,475
52,000 APAC Teleservices, Inc.* ........................ 2,665,000
74,100 Barnett, Inc.* .................................. 1,704,300
120,000 Career Horizons, Inc.* .......................... 4,665,000
132,900 Coinmach Laundry Corp.* ......................... 2,691,225
5,800 International Network Services* ................. 203,725
200,000 Iron Mountain, Inc.* ............................ 5,900,000
105,000 On Assignment, Inc.* ............................ 3,491,250
110,000 Pittston Services Group ......................... 3,451,250
73,400 Precision Response Corp.* ....................... 2,770,850
240,000 Reynolds & Reynolds Co. (Class A) ............... 6,270,000
100,000 Sunguard Data Systems, Inc.* .................... 4,500,000
--------------
38,837,075
--------------
Communications -Equipment &
Software (1.9%)
130,000 Cellular Technical Services Co.* ................ 2,567,500
135,000 Geoworks* ....................................... 3,493,125
72,000 Proxim, Inc. .................................... 2,034,000
95,000 Raptor Systems, Inc.* ........................... 1,615,000
60,000 Shiva Corp.* .................................... 3,435,000
120,000 Sync Research, Inc.* ............................ 1,845,000
--------------
14,989,625
--------------
Communications -
Equipment/Manufacturers (0.7%)
115,000 Dynatech Corp.* ................................. 5,261,250
54,000 TCSI Corp.* ..................................... 715,500
--------------
5,976,750
--------------
Computer -Aided Design (0.8%)
75,000 IKOS Systems, Inc.* ............................. 1,490,625
231,000 Silicon Valley Research Inc.* ................... 1,126,125
80,000 Synopsys, Inc.* ................................. 3,680,000
--------------
6,296,750
--------------
Computer Software (5.3%)
62,500 Aspect Development, Inc.* ....................... 2,078,125
25,000 Axent Technologies, Inc.* ....................... 581,250
14,100 Check Point Software Technologies Ltd.* (Israel) . 475,875
170,000 Cheyenne Software, Inc. ......................... 3,655,000
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
PORTFOLIO OF INVESTMENTS September 30, 1996, continued
NUMBER OF
SHARES VALUE
- ----------- ------------------------------------------------ --------------
95,000 Citrix Systems, Inc.* ........................... $ 4,821,250
106,000 Edify Corp.* .................................... 2,067,000
42,000 HNC Software, Inc.* ............................. 1,680,000
58,000 Integrated Systems, Inc.* ....................... 1,885,000
42,600 Lightbridge, Inc.* .............................. 500,550
50,000 Manugistics Group, Inc.* ........................ 1,975,000
165,500 MetaTools, Inc.* ................................ 3,475,500
90,000 Peoplesoft, Inc.* ............................... 7,470,000
15,000 Remedy Corp.* ................................... 1,196,250
45,000 Security Dynamics Technologies, Inc.* ........... 3,223,125
200,000 Symantec Corp.* ................................. 2,175,000
200,000 TriTeal Corp.* .................................. 2,900,000
135,000 Visigenic Software, Inc.* ....................... 1,518,750
50,000 Yahoo! Inc.* .................................... 1,056,250
--------------
42,733,925
--------------
Computer Software & Services (4.6%)
46,500 Affiliated Computer Services, Inc.* 2,708,625
100,000 American Management Systems, Inc.* .............. 2,800,000
40,000 Analysts International Corp. .................... 1,840,000
130,000 Ciber, Inc.* .................................... 4,940,000
240,000 Document Sciences Corp.* ........................ 3,030,000
55,000 ISG International Software Group Ltd.* (Israel) . 935,000
72,100 Renaissance Solutions, Inc.* .................... 2,974,125
120,000 Saville Systems Ireland PLC (ADR)* (Ireland) ... 4,230,000
58,400 Sykes Enterprises, Inc.* ........................ 2,744,800
15,900 The Registry, Inc.* ............................. 592,275
200,000 Transaction Network Services, Inc.* ............. 2,850,000
90,000 Transaction Systems Architects, Inc. (Class A)* . 3,802,500
21,100 Transition Systems, Inc.* ....................... 432,550
125,000 Vanstar Corp.* .................................. 3,031,250
--------------
36,911,125
--------------
Computers (0.6%)
55,000 Network Appliance, Inc.* ........................ 1,650,000
42,000 Verifone, Inc.* ................................. 1,879,500
35,500 VideoServer, Inc.* .............................. 1,220,312
--------------
4,749,812
--------------
Computers -Peripheral Equipment (0.5%)
80,000 Lexmark International Group, Inc.* .............. 1,630,000
1,900 Nimbus CD International, Inc.* .................. 18,525
180,000 Proxima Corp.* .................................. 2,070,000
--------------
3,718,525
--------------
<PAGE>
NUMBER OF
SHARES VALUE
- ----------- ------------------------------------------------ --------------
Consumer Products (0.8%)
85,000 Blyth Industries, Inc.* ......................... $ 4,122,500
72,000 Galoob (Lewis) Toys, Inc.* ...................... 2,106,000
20,000 Gargoyles, Inc.* ................................ 415,000
17,800 RockShox, Inc.* ................................. 267,000
--------------
6,910,500
--------------
Consumer Services (1.1%)
102,400 Apollo Group, Inc. (Class A)* ................... 2,739,200
100,000 Protection One, Inc.* ........................... 1,250,000
180,000 Spyglass, Inc.* ................................. 3,375,000
35,000 Sylvan Learning Systems, Inc.* .................. 1,426,250
--------------
8,790,450
--------------
Distribution (1.4%)
65,000 Arrow Electronics, Inc.* ........................ 2,892,500
65,000 Avnet Inc. ...................................... 3,152,500
32,500 Central Garden & Pet Co.* ....................... 654,062
80,000 Peak Technologies Group (The)* .................. 1,700,000
95,000 Tech Data Corp.* ................................ 2,624,375
--------------
11,023,437
--------------
Education (0.4%)
15,000 Learning Tree International, Inc.* .............. 551,250
165,400 National Education Corp.* ....................... 3,163,275
--------------
3,714,525
--------------
Electronics (3.1%)
145,000 Gemstar International Group Ltd.* 4,277,500
130,000 ITI Technologies, Inc.* ......................... 4,582,500
135,000 Komag Inc.* ..................................... 2,835,000
45,000 Linear Technology Corp. ......................... 1,653,750
7,300 Orckit Communications Ltd. (Israel)* ............ 134,137
174,000 Ortel Corp.* .................................... 4,089,000
50,000 Read Rite Corp.* ................................ 787,500
75,000 SCI Systems, Inc.* .............................. 4,218,750
130,000 Trimble Navigation Ltd.* ........................ 2,128,750
--------------
24,706,887
--------------
Entertainment/Gaming (1.4%)
135,000 International Game Technology ................... 2,767,500
43,000 Premier Parks, Inc.* ............................ 1,252,375
135,000 Primadonna Resorts, Inc.* ....................... 2,430,000
100,000 Showboat, Inc. .................................. 2,200,000
114,000 Sodak Gaming, Inc.* ............................. 2,565,000
--------------
11,214,875
--------------
Environmental (2.1%)
145,000 Memtec Ltd. (ADR)* (Australia) .................. 4,060,000
200,000 Philip Environmental, Inc.* (Canada) ............ 1,900,000
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
PORTFOLIO OF INVESTMENTS September 30, 1996, continued
NUMBER OF
SHARES VALUE
- ----------- ------------------------------------------------ --------------
104,500 U.S. Filter Corp.* .............................. $ 3,566,062
51,000 U.S.A. Waste Services, Inc.* .................... 1,606,500
160,000 United Waste Systems, Inc.* ..................... 5,480,000
--------------
16,612,562
--------------
Financial Services (4.2%)
70,000 CMAC Investment Corp. ........................... 4,445,000
90,000 Finova Group Inc. ............................... 5,400,000
110,000 GreenPoint Financial Corp. ...................... 4,193,750
70,000 NAC Re Corp. .................................... 2,520,000
80,000 PennFed Financial Services, Inc.* ............... 1,450,000
140,000 People's Bank ................................... 3,447,500
181,400 Sterling Commerce, Inc.* ........................ 5,351,300
190,000 SunAmerica, Inc. ................................ 6,555,000
--------------
33,362,550
--------------
Forest Products, Paper &
Packaging (0.3%)
100,000 Buckeye Cellulose Corp.* ........................ 2,600,000
--------------
Healthcare -Distribution (0.4%)
75,000 Physician Support Systems, Inc. ................. 1,762,500
45,000 Schein (Henry), Inc.* ........................... 1,732,500
--------------
3,495,000
--------------
Healthcare Services (3.5%)
100,000 Access Health, Inc.* ............................ 5,625,000
150,000 ADAC Laboratories ............................... 2,962,500
22,500 National Surgery Centers, Inc.* ................. 601,875
40,200 NCS HealthCare, Inc. (Class A)* ................. 1,261,275
240,000 Orthodontic Centers of America, Inc.* ........... 4,890,000
120,000 PhyCor, Inc.* ................................... 4,560,000
96,000 Total Renal Care Holdings, Inc.* ................ 3,816,000
200,000 Veterinary Centers of America, Inc.* ............ 4,350,000
--------------
28,066,650
--------------
Hospital Management & Health
Maintenance Organizations (1.5%)
185,000 American Oncology Resources, Inc.* .............. 2,035,000
80,000 Healthsouth Corp.* .............................. 3,070,000
90,000 Inphynet Medical Management, Inc.* .............. 1,597,500
100,000 Oxford Health Plans, Inc.* ...................... 4,975,000
--------------
11,677,500
--------------
Hotels/Motels (2.6%)
190,000 HFS, Inc.* ...................................... 12,706,250
200,000 La Quinta Inns, Inc. ............................ 3,900,000
70,000 Red Roof Inns, Inc.* ............................ 953,750
110,000 Renaissance Hotel Group NV* (Hong Kong) ........ $ 2,200,000
50,100 Suburban Lodges of America, Inc.* 1,052,100
--------------
20,812,100
--------------
Household Furnishings &
Appliances (0.1%)
24,500 Alrenco, Inc.* .................................. 505,312
--------------
Insurance (2.3%)
67,700 CRA Managed Care, Inc.* ......................... 3,621,950
170,000 Delphi Financial Group, Inc. (Class A)* ........ 4,675,000
105,900 Fremont General Corp. ........................... 3,124,050
100,000 HCC Insurance Holdings, Inc. .................... 2,887,500
70,000 Triad Guaranty, Inc.* ........................... 1,960,000
50,000 Vesta Insurance Group, Inc. ..................... 1,918,750
--------------
18,187,250
--------------
Local Area Networking (0.5%)
160,000 Network General Corp.* .......................... 3,660,000
--------------
<PAGE>
NUMBER OF
SHARES VALUE
- ----------- ------------------------------------------------ --------------
Manufacturing (0.4%)
72,500 Shelby Williams Industries, Inc. ................ 924,375
75,000 Waters Corp.* ................................... 2,456,250
--------------
3,380,625
--------------
Medical Products & Supplies (2.7%)
150,000 Capstone Pharmacy Services* ..................... 1,856,250
100,000 ClinTrials Research Inc.* ....................... 3,950,000
80,000 Dentsply International, Inc. .................... 3,540,000
35,000 ESC Medical Systems Ltd. (Israel)* 1,102,500
60,000 Guidant Corp. ................................... 3,315,000
220,000 Physician Sales & Service, Inc.* ................ 5,170,000
170,000 TECNOL Medical Products, Inc.* .................. 2,443,750
--------------
21,377,500
--------------
Medical Services (3.2%)
30,000 Advanced Technology Laboratories, Inc.* ........ 952,500
135,000 Amisys Managed Care Systems* .................... 3,223,125
8,700 Applied Analytical Industries, Inc.* 196,837
75,000 Boston Scientific Corp.* ........................ 4,312,500
80,000 Envoy Corp.* .................................... 3,080,000
300,000 Novacare, Inc.* ................................. 2,812,500
83,000 Protocol Systems, Inc.* ......................... 1,359,125
200,000 Staar Surgical Co.* ............................. 2,625,000
65,000 Thermolase Corp.* ............................... 1,616,875
150,000 Vivra, Inc.* .................................... 4,893,750
--------------
25,072,212
--------------
Metals (0.3%)
65,100 Mueller Industries, Inc.* ....................... 2,644,688
--------------
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
PORTFOLIO OF INVESTMENTS September 30, 1996, continued
NUMBER OF
SHARES VALUE
- ----------- ------------------------------------------------ --------------
Office Equipment & Supplies (2.8%)
95,000 Corporate Express, Inc.* ........................ $ 3,669,375
52,000 Daisytek International Corp.* ................... 2,249,000
130,000 Danka Business Systems PLC (ADR) (United Kingdom) 5,151,250
48,700 Diebold, Inc. ................................... 2,842,863
165,800 Staples, Inc.* .................................. 3,668,325
162,000 Viking Office Products, Inc.* ................... 4,839,750
--------------
22,420,563
--------------
Oil & Gas Exploration (0.4%)
80,000 Noble Affiliates, Inc. .......................... 3,380,000
--------------
Oil & Gas Products (1.6%)
60,000 Cairn Energy USA, Inc.* ......................... 577,500
52,000 Chesapeake Energy Corp.* ........................ 3,256,500
155,000 Comstock Resources Inc.* ........................ 1,724,375
60,400 Stone Energy Corp.* ............................. 1,117,400
203,000 Tesoro Petroleum Corp.* ......................... 2,613,625
80,000 Triton Energy Ltd.* ............................. 3,580,000
--------------
12,869,400
--------------
Oil Drilling & Services (3.1%)
95,000 ENSCO International, Inc.* ...................... 3,087,500
220,000 Global Industries Ltd.* ......................... 3,465,000
150,000 Global Marine, Inc.* ............................ 2,362,500
100,000 Input/Output, Inc.* ............................. 2,975,000
259,000 Marine Drilling Company, Inc.* .................. 2,460,500
140,000 Noble Drilling Corp.* ........................... 2,117,500
130,000 Smith International, Inc.* ...................... 4,566,250
55,000 Western Atlas, Inc.* ............................ 3,423,750
--------------
24,458,000
--------------
Pharmaceuticals (3.0%)
130,500 Alliance Pharmaceutical Corp.* .................. 2,234,813
47,000 Depotech Corp.* ................................. 763,750
200,000 Dura-Pharmaceuticals, Inc.* ..................... 7,350,000
79,200 Guilford Pharmaceuticals, Inc.* ................. 2,138,400
140,000 IDEC Pharmaceuticals Corp.* ..................... 3,307,500
60,000 Interneuron Pharmaceuticals, Inc.* 1,680,000
100,000 Jones Medical Industries, Inc. .................. 4,775,000
28,200 Medicis Pharmaceutical Corp. (Class A)* ........ 1,360,650
--------------
23,610,113
--------------
Retail -Department Stores (0.9%)
60,000 Neiman-Marcus Group, Inc.* ...................... 2,115,000
32,000 Saks Holdings, Inc.* ............................ 1,120,000
160,000 Stein Mart, Inc.* ............................... 3,540,000
--------------
6,775,000
--------------
<PAGE>
NUMBER OF
SHARES VALUE
- ----------- ------------------------------------------------ --------------
Retail -Specialty (6.3%)
36,400 Abercrombie & Fitch Co. (Class A)* .............. $ 891,800
100,000 Bed Bath & Beyond, Inc.* ........................ 2,737,500
110,000 Borders Group, Inc. ............................. 4,097,500
40,000 CDW Computer Centers, Inc.* ..................... 2,730,000
65,000 CompUSA, Inc.* .................................. 3,510,000
74,700 Consolidated Stores Corp.* ...................... 2,988,000
150,000 Damark International, Inc.* ..................... 1,912,500
115,000 Dollar Tree Stores, Inc.* ....................... 4,355,625
91,700 Eagle Hardware & Garden, Inc.* .................. 2,475,900
50,000 Finish Line, Inc.* .............................. 2,362,500
35,000 Gucci Group NV (ADR) (Italy) .................... 2,537,500
70,000 Marks Bros. Jewelers, Inc.* ..................... 1,890,000
135,000 Movie Gallery, Inc. ............................. 1,755,000
142,000 PetSmart, Inc.* ................................. 3,638,750
270,000 Sports & Recreation, Inc.* ...................... 2,261,250
207,000 Stride Rite Corp. ............................... 1,863,000
102,100 TAG Heuer International S.A. (ADR) (Luxembourg)* . 2,016,475
172,500 The Sports Authority, Inc.* ..................... 4,592,813
70,000 Williams-Sonoma Inc.* ........................... 1,986,250
--------------
50,602,363
--------------
Retail - Specialty Apparel (2.0%)
90,000 Gymboree Corp. (The)* ........................... 2,733,750
11,100 Hot Topic, Inc.* ................................ 253,913
65,000 Loehmann's, Inc.* ............................... 1,738,750
115,000 Men's Wearhouse, Inc. (The)* .................... 2,788,750
60,000 Pacific Sunwear of California, Inc.* 1,950,000
103,000 Talbot's, Inc. (The) ............................ 3,090,000
90,000 Wet Seal, Inc. .................................. 3,240,000
--------------
15,795,163
--------------
Semiconductors (1.9%)
70,000 Altera Corp.* ................................... 3,543,750
35,000 Analog Devices, Inc.* ........................... 949,375
80,000 Atmel Corp.* .................................... 2,460,000
160,000 S3, Inc.* ....................................... 3,160,000
210,000 Triquint Semiconductor, Inc.* ................... 4,882,500
--------------
14,995,625
--------------
Steel & Iron (0.8%)
99,500 Gibraltar Steel Corp.* .......................... 2,238,750
150,000 Olympic Steel, Inc.* ............................ 4,031,250
--------------
6,270,000
--------------
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
PORTFOLIO OF INVESTMENTS September 30, 1996, continued
NUMBER OF
SHARES VALUE
- ----------- ------------------------------------------------ --------------
Telecommunication Equipment (1.8%)
9,800 Advanced Fibre Communications* .................. $ 245,000
95,000 Andrew Corp.* ................................... 4,726,250
70,000 Aspect Telecommunications Corp.* 4,357,500
80,000 Comverse Technology, Inc.* ...................... 3,110,000
60,000 Picturetel Corp.* ............................... 2,100,000
--------------
14,538,750
--------------
Telecommunications (2.1%)
164,500 Boston Communications Group, Inc.* .............. 2,652,563
100,000 ICG Communications, Inc.* ....................... 2,100,000
150,000 IDT Corp.* ...................................... 2,475,000
120,000 Intercel, Inc.* ................................. 2,460,000
120,000 Intermedia Communications of Florida, Inc.* .... 3,510,000
120,000 LCI International, Inc.* ........................ 3,780,000
--------------
16,977,563
--------------
Telecommunications -Wireless (1.2%)
100,000 Arch Communications Group, Inc.* 1,362,500
115,000 CommNet Cellular, Inc.* ......................... 3,320,625
70,000 Globalstar Telecommunications Ltd.* (Bermuda) .. 3,500,000
80,000 Paging Network, Inc.* ........................... 1,580,000
--------------
9,763,125
--------------
Textiles -Apparel Manufacturers (1.8%)
70,000 Jones Apparel Group, Inc.* ...................... 4,462,500
75,000 Kenneth Cole Productions, Inc. (Class A)* ...... 1,415,625
120,000 Nautica Enterprises, Inc.* ...................... 3,870,000
18,600 The North Face, Inc.* ........................... 523,125
157,500 Wolverine World Wide, Inc. ...................... 4,370,625
--------------
14,641,875
--------------
Transportation (1.7%)
90,000 Atlas Air, Inc.* ................................ 3,825,000
100,000 Hub Group, Inc.* ................................ 2,125,000
100,000 Midwest Express Holdings, Inc.* ................. 2,987,500
210,000 Offshore Logistics, Inc.* ....................... 2,992,500
74,600 Team Rental Group, Inc. ......................... 1,361,450
--------------
13,291,450
--------------
Truckers (0.4%)
70,000 Miller Industries, Inc.* ........................ 2,765,000
--------------
Wide Area Networking (4.0%)
90,000 ACT Networks, Inc.* ............................. 2,497,500
65,000 ADC Telecommunications, Inc.* ................... 4,143,750
60,000 Adtran, Inc.* ................................... 2,970,000
70,000 Ascend Communications, Inc.* .................... 4,620,000
78,000 Cascade Communications Corp.* ................... 6,347,250
<PAGE>
NUMBER OF
SHARES VALUE
- ----------- ------------------------------------------------ --------------
90,000 Tellabs, Inc.* .................................. $ 6,345,000
115,000 Teltrend, Inc.* ................................. 4,830,000
--------------
31,753,500
--------------
Wireless Communication (0.4%)
90,000 Cellular Communications International, Inc.* ... 3,015,000
--------------
TOTAL COMMON STOCKS (Identified Cost $644,748,437) 800,065,575
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ----------- ------------------------------------------------ --------------
<S> <C> <C>
SHORT-TERM INVESTMENTS (1.9%)
U.S. GOVERNMENT AGENCY (a) (1.3%)
$9,955 Federal Home Loan Mortgage
Corp. 5.70% due 10/01/96 ........................ 9,955,000
--------------
REPURCHASE AGREEMENT (0.6%)
5,142 The Bank of New York 5.00% due 10/01/96 (dated
09/30/96; proceeds $5,142,605; collateralized by
$5,136,631 U.S. Treasury Note 5.625% due
10/31/97 valued at $5,244,729) (Identified Cost
$5,141,891) ..................................... 5,141,891
--------------
TOTAL SHORT-TERM INVESTMENTS
(Identified Cost $15,096,891) ................... 15,096,891
--------------
TOTAL INVESTMENTS
(Identified Cost $659,845,328) (b) 102.0% 815,162,466
LIABILITIES IN EXCESS OF
OTHER ASSETS ....................... (2.0) (15,961,962)
-------- --------------
NET ASSETS ......................... 100.0% $799,200,504
======== ==============
</TABLE>
- ------------
ADR American Depository Receipt.
* Non-income producing security.
(a) Security was purchased on a discount basis. The interest rate shown
has been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes was $661,411,180.
The aggregate gross unrealized appreciation was $177,724,047 and the
aggregate gross unrealized depreciation was $23,972,761, resulting in
net unrealized appreciation of $153,751,286.
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $659,845,328) ............ $815,162,466
Receivable for:
Investments sold ......................... 11,338,194
Shares of beneficial interest sold ...... 1,782,183
Dividends ................................ 79,255
Interest ................................. 714
Prepaid expenses and other assets .......... 36,865
--------------
TOTAL ASSETS ............................. 828,399,677
--------------
LIABILITIES:
Payable for:
Investments purchased .................... 25,507,131
Shares of beneficial interest
repurchased ............................ 2,466,048
Plan of distribution fee ................. 648,071
Investment management fee ................ 318,421
Accrued expenses and other payables ....... 259,502
--------------
TOTAL LIABILITIES ........................ 29,199,173
--------------
NET ASSETS:
Paid-in-capital ............................ 532,239,205
Net unrealized appreciation ................ 155,317,138
Accumulated net investment loss ............ (39,118)
Accumulated undistributed net realized gain 111,683,279
--------------
NET ASSETS ............................... $799,200,504
==============
NET ASSET VALUE PER SHARE,
28,838,582 shares outstanding (unlimited
shares authorized of $.01 par value) ..... $ 27.71
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Interest .............................. $ 3,545,756
Dividends (net of $10,018 foreign
withholding tax) ..................... 760,163
--------------
TOTAL INCOME ........................ 4,305,919
--------------
EXPENSES
Plan of distribution fee .............. 6,461,408
Investment management fee ............. 3,194,151
Transfer agent fees and expenses ..... 893,014
Registration fees ..................... 119,398
Custodian fees ........................ 86,966
Shareholder reports and notices ...... 78,448
Professional fees ..................... 51,738
Trustees' fees and expenses ........... 37,475
Other ................................. 12,915
--------------
TOTAL EXPENSES ...................... 10,935,513
--------------
NET INVESTMENT LOSS ................. (6,629,594)
--------------
NET REALIZED AND UNREALIZED GAIN
(LOSS):
Net realized gain ..................... 132,830,087
Net change in unrealized appreciation (16,804,216)
--------------
NET GAIN ............................ 116,025,871
--------------
NET INCREASE .......................... $109,396,277
==============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE YEAR ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
- ------------------------------------------------------ ------------------ ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss ................................... $ (6,629,594) $ (3,969,410)
Net realized gain ..................................... 132,830,087 32,573,927
Net change in unrealized appreciation ................. (16,804,216) 129,339,870
------------------ ------------------
NET INCREASE ........................................ 109,396,277 157,944,387
Distributions from net realized gain .................. (42,760,549) (2,979,381)
Net increase from transactions in shares of beneficial
interest ............................................. 197,696,272 39,734,514
------------------ ------------------
TOTAL INCREASE ...................................... 264,332,000 194,699,520
NET ASSETS:
Beginning of period ................................... 534,868,504 340,168,984
------------------ ------------------
END OF PERIOD
(Including accumulated net investment loss of
$39,118 and $33,774, respectively) .................. $799,200,504 $534,868,504
================== ==================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS September 30, 1996
1. Organization and Accounting Policies
Dean Witter Developing Growth Securities 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's investment
objective is long-term capital growth. The Fund was organized as a
Massachusetts business trust on December 28, 1982 and commenced operations on
April 29, 1983.
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 or American 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; (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 it is determined by the Investment Manager that
sale or bid prices are not reflective of a security's market value, portfolio
securities are valued at their fair value as determined in good faith under
procedures established by and under the general supervision of the Trustees
(valuation of debt securities for which market quotations are not readily
available may be based upon current market prices of securities which are
comparable in coupon, rating and maturity or an appropriate matrix utilizing
similar factors); and (4) short-term debt securities having a maturity date
of more than sixty days at time of purchase are valued on a mark-to-market
basis until sixty days prior to maturity and thereafter at amortized cost
based on their value on the 61st day. Short-term debt securities having a
maturity date of sixty days or less at the time of purchase are valued at
amortized cost.
B. ACCOUNTING FOR INVESTMENTS -- -- Security transactions are accounted for
on the trade date (date the order to buy or sell is executed). Realized gains
and losses on security transactions are determined by the identified cost
method. Dividend income and other distributions are recorded on the
ex-dividend date. Discounts are accreted over the life of the respective
securities. Interest income is accrued daily.
C. 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.
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS September 30, 1996, continued
D. 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.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement with Dean Witter InterCapital
Inc. (the "Investment Manager"), the Fund pays the Investment Manager a
management fee, accrued daily and payable monthly, by applying the following
annual rates to the net assets of the Fund determined as of the close of each
business day: 0.50% to the portion of the daily net assets not exceeding $500
million and 0.475% to the portion of the daily net assets exceeding $500
million.
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
pursuant to which the Fund pays the Distributor compensation, accrued daily
and payable monthly, at an annual rate of 1.0% of the lesser of: (a) the
average daily aggregate gross sales of the Fund's shares since the Fund's
inception (not including reinvestment of dividend or capital gain
distributions) less the average daily aggregate net asset value of the Fund's
shares redeemed since the Fund's inception upon which a contingent deferred
sales charge has been imposed or upon which such
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS September 30, 1996, continued
charge has been waived; or (b) the Fund's average daily net assets. Amounts
paid under the Plan are paid to the Distributor to compensate it for the
services provided and the expenses borne by it and others in the distribution
of the Fund's shares, including the payment of commissions for sales of the
Fund's shares 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 other employees or selected
broker-dealers who engage in or support distribution of the Fund's 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 the Fund's shares to other than current shareholders and
preparation, printing and distribution of sales literature and advertising
materials. In addition, the Distributor may be compensated under the Plan for
its opportunity costs in advancing such amounts, which compensation would be
in the form of a carrying charge on any unreimbursed expenses incurred by the
Distributor.
Although there is no legal obligation for the Fund to pay expenses incurred
in excess of payments made to the Distributor under the Plan and the proceeds
of contingent deferred sales charges paid by investors upon redemption of
shares, if for any reason the Plan is terminated, the Trustees will consider
at that time the manner in which to treat such expenses. The Distributor has
advised the Fund that such excess amount, including carrying charges, totaled
$28,270,501 at September 30, 1996.
Provided that the Plan continues in effect, any cumulative expenses incurred
by the Distributor but not yet recovered may be recovered through future
distribution fees from the Fund and contingent deferred sales charges from
the Fund's shareholders.
The Distributor has informed the Fund that for the year ended September 30,
1996, it received approximately $810,000 in contingent deferred sales charges
from certain redemptions of the Fund's shares.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities,
excluding short-term investments, for the year ended September 30, 1996
aggregated $1,095,944,214 and $881,579,783, respectively.
For the year ended September 30, 1996, the Fund incurred $133,555 in
brokerage commissions with DWR for portfolio transactions executed on behalf
of the Fund.
The Fund has 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 year
ended September 30, 1996 included in Trustees'
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS September 30, 1996, continued
fees and expenses in the Statement of Operations amounted to $23,261. At
September 30, 1996, the Fund had an accrued pension liability of $39,122
which is included in accrued expenses in the Statement of Assets and
Liabilities.
Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At September 30, 1996, the Fund
had transfer agent fees and expenses payable of approximately $88,000.
5. SHARES OF BENEFICIAL INTEREST
Transactions in shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995
------------------------------- -------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Sold 20,988,017 $ 532,804,011 20,063,775 $ 404,852,064
Reinvestment of distributions 1,750,437 40,382,573 166,910 2,830,799
-------------- --------------- -------------- ---------------
22,738,454 573,186,584 20,230,685 407,682,863
Repurchased (14,839,539) (375,490,312) (18,669,019) (367,948,349)
-------------- --------------- -------------- ---------------
Net increase 7,898,915 $ 197,696,272 1,561,666 $ 39,734,514
============== =============== ============== ===============
</TABLE>
6. FEDERAL INCOME TAX STATUS
As of September 30, 1996, the Fund had temporary book/tax differences
primarily attributable to capital loss deferrals on wash sales and permanent
book/tax differences primarily attributable to a net operating loss. To
reflect reclassifications arising from permanent book/tax differences for the
year ended September 30, 1996, accumulated undistributed net realized gain
was charged $6,660,503, paid-in-capital was credited $36,253 and accumulated
net investment loss was credited $6,624,250.
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED SEPTEMBER 30
------------------------------------------------------------
1996 1995 1994 1993 1992
- ---------------------------- ---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
PER SHARE
OPERATING PERFORMANCE:
Net asset value,
beginning of period ........ $25.54 $17.55 $20.50 $12.20 $ 14.05
---------- ---------- ---------- ---------- ------------
Net investment income (loss) (0.23) (0.19) -- (0.12) (0.12)
Net realized and
unrealized gain (loss) .... 4.32 8.34 (1.82) 8.42 (1.73)
---------- ---------- ---------- ---------- ------------
Total from investment
operations ................. 4.09 8.15 (1.82) 8.30 (1.85)
---------- ---------- ---------- ---------- ------------
Less dividends and distributions from:
Net investment income .... -- -- -- -- --
Net realized gain ......... (1.92) (0.16) (1.13) -- --
---------- ---------- ---------- ---------- ------------
Total dividends and
distributions .............. (1.92) (0.16) (1.13) -- --
---------- ---------- ---------- ---------- ------------
Net asset value,
end of period .............. $27.71 $25.54 $17.55 $20.50 $ 12.20
========== ========== ========== ========== ============
TOTAL INVESTMENT RETURN+ ... 17.53% 46.87 % (8.88)% 67.95 % (13.17)%
RATIOS TO
AVERAGE NET ASSETS:
Expenses .................... 1.69% 1.77 % 1.78 % 1.84 % 1.86 %
Net investment income (loss) (1.03%) (1.04)% (1.32)% (1.52)% (1.14)%
SUPPLEMENTAL DATA:
Net assets, end of period,
in thousands ............... $799,201 $534,869 $340,169 $240,389 $112,982
Portfolio turnover rate .... 149% 114 % 160 % 203 % 153 %
--
Average commission rate paid $0.0571 -- -- --
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
1991 1990 1989 1988 1987
- ---------------------------- ---------- ------------ --------- ----------- ----------
<S> <C> <C> <C> <C> <C>
PER SHARE
OPERATING PERFORMANCE:
Net asset value,
beginning of period ........ $ 8.92 $ 11.33 $ 9.67 $ 10.96 $ 8.57
---------- ------- --------- ----------- ----------
Net investment income (loss) (0.07) (0.15) 0.04 (0.03) (0.02)
Net realized and
unrealized gain (loss) .... 5.20 (2.21) 1.62 (1.26) 2.42
---------- ------- --------- ----------- ----------
Total from investment
operations ................. 5.13 (2.36) 1.66 (1.29) 2.40
---------- ------- --------- ----------- ----------
Less dividends and distributions from:
Net investment income .... -- (0.05) -- -- (0.01)
Net realized gain ......... -- - -- -- --
---------- ------- --------- ----------- ----------
Total dividends and
distributions .............. -- (0.05) -- -- (0.01)
---------- ------- --------- ----------- ----------
Net asset value,
end of period .............. $ 14.05 $ 8.92 $ 11.33 $ 9.67 $ 10.96
========== ======= ========= =========== ==========
TOTAL INVESTMENT RETURN+ ... 57.51 % (20.87)% 17.17% (11.77)% 28.07 %
RATIOS TO
AVERAGE NET ASSETS:
Expenses .................... 1.92 % 2.02 % 1.89% 1.90 % 1.83 %
Net investment income (loss) (0.73)% (1.32)% 0.59% (0.28)% (0.20)%
SUPPLEMENTAL DATA:
Net assets, end of period,
in thousands ............... $115,337 $67,604 $89,236 $108,411 $179,276
Portfolio turnover rate .... 88 % 53 % 84% 70 % 68 %
Average commission rate paid -- -- -- -- --
</TABLE>
- ------------
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND TRUSTEES
OF DEAN WITTER DEVELOPING GROWTH SECURITIES TRUST
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
Developing Growth Securities Trust (the "Fund") at September 30, 1996, 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 ten years in the period then ended, 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
September 30, 1996 by correspondence with the custodian and brokers and the
application of alternative auditing procedures where confirmations from
brokers were not received, provide a reasonable basis for the opinion
expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
November 8, 1996
1996 FEDERAL TAX NOTICE (unaudited)
During the year ended September 30, 1996, the Fund paid to shareholders
$1.68 per share from long-term capital gains.
<PAGE>
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
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
Jayne Stevlingson
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
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 DEVELOPING GROWTH SECURITIES
Annual Report
September 30, 1996
