MORGAN STANLEY DEAN WITTER DEVELOPING GROWTH SECURITIES TRUS, N-30D, 2000-05-30

MORGAN STANLEY DEAN WITTER DEVELOPING GROWTH SECURITIES TRUS
N-30D, 2000-05-30

Previous: MORGAN STANLEY DEAN WITTER DEVELOPING GROWTH SECURITIES TRUS, NSAR-A, EX-99, 2000-05-30

Next: AARP CASH INVESTMENT FUNDS, NT-NSAR, 2000-05-30

<PAGE>

Morgan Stanley Dean Witter Developing Two World Trade Center,
Growth Securities Trust New York, New York 10048
Letter to the Shareholders March 31, 2000

DEAR SHAREHOLDER:

The U.S. equity market continued its bull market run during the six-month period
ended March 31, 2000. After setting records during the second half of 1999,
however, the U.S. equity markets were plagued by increased volatility in the
first quarter of 2000. Technology stocks were again the dominant contributors to
the performance of the U.S. equity markets. However, technology underperformed
late in the first quarter as investors' attention shifted toward old-economy
companies. Several prominent tech names (e.g., Microsoft, Lucent, Yahoo and
America Online) were among the index's biggest detractors in the quarter.
Subsequent to the end of the period, tech stocks pulled back sharply amid
intense volatility.

PERFORMANCE AND PORTFOLIO STRATEGY

For the six-month period ended March 31, 2000, Morgan Stanley Dean Witter
Developing Growth Securities' Class B shares posted a total return of 77.10
percent versus 26.83 for the Russell 2000 Index.* For the same period, the
Fund's Class A, C and D shares returned 77.78 percent, 77.08 percent and 78.04
percent, respectively. Performance of the Fund's four share classes varies
because each class has differing expenses. Given the rapid rise of stock prices
during most of the period, particularly among technology issues, there can be no
expectation that the Fund's impressive results will be repeated. The total
return figures given assume the reinvestment of all distributions but do not
reflect the deduction of any applicable sales charges.

The Fund's continued strong performance was once again attributable primarily to
the exceptional gains posted by technology and Internet-related companies. As of
March 31 the Fund held 42 percent of

---------------------
* The Russell 2000 Index is a capitalization-weighted index comprising 2000
of the smallest stocks (on the basis of capitalization) in the Russell
3000 Index. The Index does not include any expenses, fees or charges. The
Index is unmanaged and should not be considered an investment.

<PAGE>

Morgan Stanley Dean Witter Developing Growth Securities Trust
Letter to the Shareholders March 31, 2000, continued

its assets in technology, compared to the 28 percent weighting in the Russell
2000 Index. Another significant contributor to the Fund's performance was health
care, led by biotechnology. As of March 31, 2000, the Fund held a 15 percent
weighting in health-care-related companies, slightly higher than the Russell
2000 Index's 10.8 percent.

Among the Fund's key holdings as of March 31 are Art Technology Group, Asyst
Technologies, Cytyc, Digex, Emcore, Exar, Micromuse, Pegasus Communications,
Project Software & Development, and Titan.

LOOKING AHEAD

We continue to believe that technology will be the main growth driver for
small-cap companies. Investments in small-cap technology businesses will depend
greatly on the uniqueness of their products and services, visibility and
competence of their management. The advancement of technology is touching almost
every sector and industry within the global marketplace. We do not expect
short-term reverberations around the economic landscape to sidetrack the growth
of companies participating in the creation and utililization of new
technologies. We believe the Fund is well positioned to take advantage of the
long-term results of this unprecedented technology evolution.

When selecting stocks for the Fund, we look for companies that have a sound
business model and are expected to grow earnings by at least 20 percent
annually. We will continue to focus on companies with strong management teams
and unique products or services, and favor those where insiders have been buying
stock. The Fund also seeks out strong risk/reward situations, where we believe a
company has the prospect of better-than-expected earnings or is a misunderstood
growth story. Finally, the Fund may also seek to invest in a company's initial
public offerings.

We appreciate your ongoing support of Morgan Stanley Dean Witter Developing
Growth Securities and look forward to continuing to serve your investment needs.

Very truly yours,

/s/ CHARLES A. FIUMEFREDDO /s/ MITCHELL M. MERIN
-------------------------- ---------------------
CHARLES A. FIUMEFREDDO MITCHELL M. MERIN
Chairman of the Board President

2
<PAGE>

Morgan Stanley Dean Witter Developing Growth Securities Trust
Fund Performance March 31, 2000

AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------------------------------

CLASS A SHARES*
----------------------------------------------------------------
PERIOD ENDED 3/31/00
--------------------
1 Year 112.44%(1) 101.29%(2)
Since Inception (7/28/97) 41.80%(1) 38.97%(2)

CLASS C SHARES+
----------------------------------------------------------------
PERIOD ENDED 3/31/00
--------------------
1 Year 110.79%(1) 109.79%(2)
Since Inception (7/28/97) 40.79%(1) 40.79%(2)

CLASS B SHARES**
----------------------------------------------------------------
PERIOD ENDED 3/31/00
--------------------
1 Year 110.81%(1) 105.81%(2)
5 Years 32.96%(1) 32.84%(2)
10 Years 22.28%(1) 22.28%(2)

CLASS D SHARES++
----------------------------------------------------------------
PERIOD ENDED 3/31/00
--------------------
1 Year 112.94%(1)
Since Inception (7/28/97) 42.14%(1)

PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL FLUCTUATE. WHEN YOU SELL FUND SHARES, THEY MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST.

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

(1) Figure shown assumes reinvestment of all distributions and does not reflect
the deduction of any sales charges.

(2) Figure shown assumes reinvestment of all distributions and the deduction of
the maximum applicable sales charge. See the Fund's current prospectus for
complete details on fees and sales charges.

* The maximum front-end sales charge for Class A is 5.25%.

** The maximum contingent deferred sales charge (CDSC) for Class B is 5.0%.
The CDSC declines to 0% after six years.

+ The maximum CDSC for Class C shares is 1% for shares redeemed within one
year of purchase.

++ Class D shares have no sales charge.

3
<PAGE>

Morgan Stanley Dean Witter Developing Growth Securities Trust
Portfolio of Investments March 31, 2000 (unaudited)

NUMBER OF
SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (94.9%)
Advertising (1.8%)
300,000 FreeShop.com, Inc.* .................... $ 5,700,000
580,000 Getty Images, Inc.* .................... 20,843,750
13,500 ValueClick, Inc.* ...................... 282,656
--------------
26,826,406
--------------
Aerospace (0.1%)
98,400 AAR Corp. .............................. 1,642,050
--------------
Air Freight/Delivery Services (0.6%)
231,800 C.H. Robinson Worldwide, Inc. .......... 8,779,425
--------------
Apparel (0.4%)
200,000 Guess? Inc.* ........................... 6,400,000
--------------
Auto Parts: O.E.M. (0.5%)
200,000 Gentex Corp.* .......................... 7,400,000
--------------
Biotechnology (1.8%)
40,000 Alkermes, Inc.* ........................ 3,670,000
32,500 Diversa Corp.* ......................... 1,507,187
116,700 Gene Logic, Inc.* ...................... 4,872,225
200,000 Immunomedics, Inc.* .................... 5,187,500
50,000 Intermune Pharmaceuticals, Inc.*........ 996,875
23,600 Millennium Pharmaceuticals, Inc.* ...... 3,113,725
150,000 QLT Phototherapeutics, Inc.
(Canada)* ............................ 8,212,500
--------------
27,560,012
--------------
Books/Magazines (0.4%)
182,000 Information Holdings Inc.* ............. 5,698,875
--------------
Broadcasting (1.3%)
100,000 Citadel Communications Corp.* .......... 4,212,500
100,000 Regent Communications, Inc.* ........... 1,237,500
400,000 Westwood One, Inc.* .................... 14,500,000
--------------
19,950,000
--------------
Cable Television (1.4%)
150,000 Pegasus Communications Corp.* .......... 21,103,125
--------------
Cellular Telephone (0.8%)
100,000 Alamosa PCS Holdings, Inc.* ............ 3,743,750
100,000 TeleCorp PCS, Inc.* .................... 5,150,000
100,000 Tritel, Inc.* .......................... 3,787,500
--------------
12,681,250
--------------
Computer Communications (0.7%)
6,800 ArrowPoint Communications, Inc.* ....... 805,375
100,000 Cobalt Networks, Inc.* ................. 4,693,750
50,000 Emulex Corp.* .......................... 5,456,250
--------------
10,955,375
--------------

NUMBER OF
SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
Computer Software (15.2%)
150,000 Aspen Technology, Inc.* ................ $ 6,056,250
200,000 AXENT Technologies, Inc.* .............. 3,750,000
100,000 Daleen Technologies, Inc.* ............. 2,025,000
280,000 Entrust Technologies Inc.* ............. 23,817,500
500,000 FileNET Corp.* ......................... 14,843,750
300,000 Inet Technologies, Inc.* ............... 15,881,250
250,000 Mercury Interactive Corp.* ............. 19,781,250
240,000 Micromuse Inc.* ........................ 33,300,000
200,000 NetIQ Corp.* ........................... 13,362,500
200,000 Packeteer, Inc.* ....................... 6,950,000
550,000 Peregine Systems, Inc.* ................ 36,884,375
600,000 Project Software & Development,
Inc.* ................................ 33,900,000
50,000 Remedy Corp.* .......................... 2,090,625
19,300 Riverdeep Group PLC (ADR)
(Ireland)* ........................... 772,000
350,000 SmartForce PLC (ADR)
(Ireland)* ........................... 16,056,250
--------------
229,470,750
--------------
Contract Drilling (1.9%)
700,000 R&B Falcon Corp.* ...................... 13,781,250
400,000 Santa Fe International Corp. ........... 14,800,000
--------------
28,581,250
--------------
Discount Chains (0.3%)
120,000 BJ's Wholesale Club, Inc.* ............. 4,635,000
--------------
Diversified Commercial Services (0.1%)
80,000 Pegasystems Inc.* ...................... 950,000
--------------
Diversified Electronic Products (0.7%)
400,000 MSI Holdings, Inc.* .................... 11,200,000
--------------
E.D.P. Peripherals (1.6%)
340,000 DSP Group, Inc.* ....................... 22,355,000
126,800 T/R Systems, Inc* ...................... 2,678,650
--------------
25,033,650
--------------
E.D.P. Services (1.3%)
200,000 Manhattan Associates, Inc.* ............ 6,850,000
200,000 McAfee.com Corp.* ...................... 10,337,500
150,000 Pegasus Systems, Inc.* ................. 2,371,875
13,300 Universal Access, Inc.* ................ 448,875
--------------
20,008,250
--------------
Electric Utilities (0.1%)
100,000 BayCorp Holdings, Ltd.* ................ 2,175,000
--------------
</TABLE>

See Notes to Financial Statements

4
<PAGE>

Morgan Stanley Dean Witter Developing Growth Securities Trust
Portfolio of Investments March 31, 2000 (unaudited) continued

NUMBER OF
SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
Electronic Components (2.3%)
250,000 Benchmark Electronics, Inc.* ........... $ 9,250,000
500,000 MEMC Electronic Materials, Inc.*........ 10,062,500
400,000 Oak Technology, Inc.* .................. 7,675,000
300,000 Power Integrations, Inc.* .............. 7,462,500
--------------
34,450,000
--------------
Electronic Data Processing (0.1%)
100,000 eShare Technologies, Inc.* ............. 1,237,500
--------------
Electronic Distributors (2.1%)
250,000 Intraware, Inc.* ....................... 10,328,125
300,000 Safeguard Scientifics, Inc.* ........... 21,093,750
--------------
31,421,875
--------------
Electronic Production Equipment (7.3%)
350,000 Advanced Energy Industries, Inc.* ...... 17,828,125
400,000 Asyst Technologies, Inc.* .............. 23,375,000
300,000 ATMI, Inc.* ............................ 14,137,500
272,700 EMCORE Corp.* .......................... 31,070,756
130,000 inSilicon Corp.* ....................... 2,047,500
350,000 MKS Instruments, Inc.* ................. 17,675,000
60,300 Orbotech, Ltd. (Israel)* ............... 5,110,425
--------------
111,244,306
--------------
Engineering & Construction (0.5%)
250,000 SpectraSite Holdings, Inc.* ............ 7,062,500
--------------
Finance Companies (0.3%)
200,000 Advanta Corp. (Class A) ................ 4,062,500
--------------
Generic Drugs (0.7%)
400,000 Ivax Corp.* ............................ 10,900,000
--------------
Integrated Oil Companies (0.4%)
100,000 Murphy Oil Corp. ....................... 5,762,500
--------------
Internet Services (15.4%)
300,000 AppNet, Inc.* .......................... 14,025,000
150,000 Apropos Technology, Inc.* .............. 5,390,625
430,000 Art Technology Group, Inc.* ............ 28,218,750
91,600 ASD Systems, Inc.* ..................... 423,650
50,000 Bluestone Software, Inc.* .............. 1,687,500
100,000 C-Bridge Internet Solutions, Inc.*...... 5,700,000
34,500 Caldera Systems, Inc.* ................. 808,594
300,000 CNET Networks, Inc.* ................... 15,206,250
290,000 Digex, Inc.* ........................... 32,153,750
24,700 Digitas Inc.* .......................... 603,606

NUMBER OF
SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
41,875 e.Biscom SpA (Italy)* .................. $ 11,005,483
37,500 Eprise Corp.* .......................... 590,625
41,900 FirstWorld Communications Inc.
(Class B)* ........................... 851,094
90,000 Integrated Information Systems*......... 1,957,500
250,000 Interliant, Inc.* ...................... 6,906,250
140,000 Intertrust Technologies Corp.* ......... 5,941,250
180,000 InterVu Inc.* .......................... 16,200,000
25,000 Ision Internet AG (Germany)* ........... 2,520,659
13,300 Loudeye Technologies, Inc.* ............ 453,031
100,000 Metalink Ltd. (Israel)* ................ 3,825,000
300,000 National Information Consortium,
Inc.* ................................ 10,425,000
200,000 NetAmerica.com Corp.* .................. 4,800,000
71,500 Netpliance, Inc.* ...................... 1,027,812
400,000 Netzero, Inc.* ......................... 6,325,000
90,000 OnDisplay, Inc.* ....................... 7,425,000
200,000 PSINet, Inc.* .......................... 6,825,000
62,900 PurchasePro.com Inc.* .................. 4,560,250
100,000 Quest Software, Inc.* .................. 11,287,500
200,000 Quintus Corp.* ......................... 5,937,500
250,000 Ramp Networks, Inc.* ................... 5,015,625
350,000 Rare Medium Group, Inc.* ............... 15,400,000
--------------
233,497,304
--------------
Investment Bankers/Brokers/Services (0.7%)
300,000 AmeriTrade Holding Corp.
(Class A)* ........................... 6,262,500
99,300 eSPEED, Inc (Class A)* ................. 5,200,837
--------------
11,463,337
--------------
Medical Equipment & Supplies (0.2%)
115,000 LaserSight, Inc.* ...................... 740,313
35,000 Zoll Medical Corp.* .................... 1,789,375
--------------
2,529,688
--------------
Medical Specialties (5.0%)
250,000 ABIOMED, Inc.* ......................... 10,062,500
230,000 ArthroCare Corp.* ...................... 20,815,000
78,500 Aspect Medical Systems, Inc. ........... 2,772,031
450,000 Cytyc Corp.* ........................... 21,543,750
142,900 Digene Corp.* .......................... 6,430,500
150,000 PharmaNetics, Inc.* .................... 2,212,500
350,000 SonoSite, Inc.* ........................ 11,550,000
--------------
75,386,281
--------------
</TABLE>

See Notes to Financial Statements

5
<PAGE>

Morgan Stanley Dean Witter Developing Growth Securities Trust
Portfolio of Investments March 31, 2000 (unaudited) continued

NUMBER OF
SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
Medical/Dental Distributors (0.7%)
100,000 Priority Healthcare Corp.
(Class B)* ............................ $ 5,012,500
200,000 SciQuest.com, Inc.* ..................... 5,187,500
--------------
10,200,000
--------------
Medical/Nursing Services (1.1%)
150,000 Hooper Holmes, Inc. ..................... 5,146,875
672,700 InfoCure Corp.* ......................... 11,688,163
--------------
16,835,038
--------------
Metals Fabrications (0.7%)
350,000 Maverick Tube Corp.* .................... 11,331,250
--------------
Military/Gov't/Technical (1.9%)
150,000 M-Systems Flash Disk Pioneers
Ltd. (Israel)* ........................ 7,837,500
400,000 Titan Corp. (The)* ...................... 20,400,000
--------------
28,237,500
--------------
Oilfield Services/Equipment (1.8%)
250,000 BJ Services Co.* ........................ 18,468,750
300,000 Veritas DGC Inc.* ....................... 8,437,500
--------------
26,906,250
--------------
Other Pharmaceuticals (1.9%)
170,000 Celgene Corp.* .......................... 16,915,000
350,000 Cell Pathways, Inc.* .................... 11,987,500
--------------
28,902,500
--------------
Other Specialty Stores (0.5%)
250,000 Cost Plus, Inc.* ........................ 8,437,500
--------------
Other Telecommunications (8.3%)
370,000 Allied Riser Communications
Corporation* .......................... 12,672,500
140,000 Clarent Corp.* .......................... 12,600,000
400,000 Clearnet Communications Inc.
(Class A) (Canada)* ................... 16,475,000
300,000 Completel Europe NV
(Netherlands)* ........................ 5,962,500
110,900 Efficient Networks, Inc.* ............... 17,175,638
250,000 ITC DeltaCom, Inc.* ..................... 8,890,625
200,000 IXnet, Inc.* ............................ 9,137,500
120,000 MDSI Mobile Data Solutions Inc.
(Canada)* ............................. 5,685,000
91,000 Net2000 Communications, Inc.* ........... 2,172,625
240,000 Pinnacle Holdings Inc.* ................. 12,960,000
300,000 Primus Telecommunications
Group, Inc.* ........................... 15,506,250

NUMBER OF
SHARES VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
33,000 Tele1 Europe Holding AB (ADR)
(Sweden)* ............................. $ 631,125
250,000 WorldQuest Networks, Inc.* .............. 6,187,500
--------------
126,056,263
--------------
Precious Metals (0.7%)
250,000 Stillwater Mining Co.* .................. 10,000,000
--------------
Precision Instruments (0.7%)
250,000 Mettler-Toledo International Inc.*....... 10,234,375
--------------
Rental/Leasing Companies (0.9%)
300,000 Comdisco, Inc. .......................... 13,237,500
--------------
Semiconductors (6.0%)
410,000 Exar Corp.* ............................. 29,340,625
330,000 Fairchild Semiconductor Corp.
(Class A)* ............................ 12,045,000
300,000 Integrated Device Technology,
Inc.* ................................. 11,868,750
300,000 Integrated Silicon Solution, Inc.* ...... 8,775,000
111,500 Intersil Holding Corp.* ................. 5,763,156
110,000 MRV Communications, Inc.* ............... 10,092,500
50,000 QuickLogic Corporation* ................. 1,671,875
150,000 Silicon Image, Inc.* .................... 10,725,000
--------------
90,281,906
--------------
Services to the Health Industry (0.4%)
140,000 Quest Diagnostics Inc.* ................. 5,565,000
--------------
Shoe Manufacturing (0.7%)
545,000 Madden (Steven), Ltd.* .................. 10,320,938
--------------
Telecommunication Equipment (2.5%)
50,000 BreezeCom Ltd. (Israel)* ................ 1,850,000
300,000 C-COR.net Corp.* ........................ 14,606,250
300,000 CommScope, Inc.* ........................ 13,687,500
140,000 MCK Communications, Inc.* ............... 6,685,000
19,000 RADVision Ltd.* ......................... 969,000
--------------
37,797,750
--------------
Wholesale Distributors (0.1%)
45,200 eMerge Interactive, Inc.
(Class A)* ............................ 1,361,650
--------------
TOTAL COMMON STOCKS
(Identified Cost $856,513,008)........... 1,435,773,629
--------------
</TABLE>

See Notes to Financial Statements

6
<PAGE>

Morgan Stanley Dean Witter Developing Growth Securities Trust
Portfolio of Investments March 31, 2000 (unaudited) continued

PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
--------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT (a) (3.9%)
U.S. GOVERNMENT AGENCY
$ 59,000 Federal Home Loan Mortgage
Corp. 6.05% due 04/03/00
(Amortized Cost $58,980,170)............ $ 58,980,170
--------------
TOTAL INVESTMENTS
(Identified Cost $915,493,178) (b)............ 98.8% 1,494,753,799

OTHER ASSETS IN EXCESS OF
LIABILITIES .................................. 1.2 17,851,824
--- ----------
NET ASSETS ................................... 100.0% $1,512,605,623
===== ==============
</TABLE>

--------------------------------
ADR American Depository Receipt.
* Non-income producing security.
(a) Purchased on a discount basis. The interest rate shown has been
adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation is
$628,920,571 and the aggregate gross unrealized depreciation is
$49,659,950, resulting in net unrealized appreciation of $579,260,621.

See Notes to Financial Statements

7
<PAGE>

Morgan Stanley Dean Witter Developing Growth Securities Trust
Financial Statements

STATEMENT OF ASSETS AND LIABILITIES
March 31, 2000 (unaudited)

<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments in securities, at value
(identified cost $915,493,178) .................................. $1,494,753,799
Cash .............................................................. 61,657
Receivable for:
Investments sold ............................................... 61,395,727
Shares of beneficial interest sold ............................. 8,408,277
Dividends ...................................................... 37,000
Prepaid expenses and other assets ................................. 129,498
--------------
TOTAL ASSETS ................................................... 1,564,785,958
--------------

LIABILITIES:
Payable for:
Investments purchased .......................................... 47,979,124
Shares of beneficial interest repurchased ...................... 1,926,298
Plan of distribution fee ....................................... 1,413,456
Investment management fee ...................................... 706,820
Accrued expenses and other payables ............................... 154,637
--------------
TOTAL LIABILITIES .............................................. 52,180,335
--------------
NET ASSETS ..................................................... $1,512,605,623
==============
COMPOSITION OF NET ASSETS:
Paid-in-capital ................................................... $ 709,300,797
Net unrealized appreciation ....................................... 579,260,621
Accumulated net investment loss ................................... (8,248,388)
Accumulated undistributed net realized gain ....................... 232,292,593
--------------
NET ASSETS ..................................................... $1,512,605,623
==============

CLASS A SHARES:
Net Assets ........................................................ $41,166,468
Shares Outstanding (unlimited authorized, $.01 par value) ......... 859,968
NET ASSET VALUE PER SHARE ...................................... $47.87
======
MAXIMUM OFFERING PRICE PER SHARE,
(net asset value plus 5.54% of net asset value) ................ $50.52
======

CLASS B SHARES:
Net Assets ........................................................ $1,424,519,844
Shares Outstanding (unlimited authorized, $.01 par value) ......... 30,488,064
NET ASSET VALUE PER SHARE ...................................... $46.72
======

CLASS C SHARES:
Net Assets ........................................................ $18,849,665
Shares Outstanding (unlimited authorized, $.01 par value) ......... 402,780
NET ASSET VALUE PER SHARE ...................................... $46.80
======

CLASS D SHARES:
Net Assets ........................................................ $28,069,646
Shares Outstanding (unlimited authorized, $.01 par value) ......... 582,001
NET ASSET VALUE PER SHARE ...................................... $48.23
======
</TABLE>

See Notes to Financial Statements

8
<PAGE>

Morgan Stanley Dean Witter Developing Growth Securities Trust
Financial Statements, continued

STATEMENT OF OPERATIONS

For the six months ended March 31, 2000 (unaudited)

NET INVESTMENT LOSS:
<S> <C>
INCOME
Interest .................................................. $ 1,018,392
Dividends (net of $1,500 foreign withholding tax) ......... 479,622
------------
TOTAL INCOME ........................................... 1,498,014
------------

EXPENSES
Plan of distribution fee (Class A shares) ................. 34,121
Plan of distribution fee (Class B shares) ................. 5,879,520
Plan of distribution fee (Class C shares) ................. 53,413
Investment management fee ................................. 2,987,633
Transfer agent fees and expenses .......................... 541,392
Registration fees ......................................... 78,733
Shareholder reports and notices ........................... 50,771
Professional fees ......................................... 32,739
Custodian fees ............................................ 29,566
Trustees' fees and expenses ............................... 9,045
Other ..................................................... 3,986
------------
TOTAL EXPENSES ......................................... 9,700,919
------------
NET INVESTMENT LOSS .................................... (8,202,905)
------------
NET REALIZED AND UNREALIZED GAIN:

Net realized gain ......................................... 258,173,694
Net change in unrealized appreciation ..................... 362,724,311
------------
NET GAIN ............................................... 620,898,005
------------
NET INCREASE .............................................. $612,695,100
============
</TABLE>

See Notes to Financial Statements

9
<PAGE>

Morgan Stanley Dean Witter Developing Growth Securities Trust
Financial Statements, continued

STATEMENT OF CHANGES IN NET ASSETS

FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
MARCH 31, 2000 SEPTEMBER 30, 1999
-------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss .................................. $ (8,202,905) $ (7,356,974)
Net realized gain .................................... 258,173,694 153,313,817
Net change in unrealized appreciation ................ 362,724,311 165,480,270
-------------- --------------
NET INCREASE ...................................... 612,695,100 311,437,113
-------------- --------------

DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAIN :
Class A shares ....................................... (3,654,596) (124,327)
Class B shares ....................................... (161,645,400) (10,501,816)
Class C shares ....................................... (1,263,910) (44,486)
Class D shares ....................................... (1,510,969) (62,639)
-------------- --------------
TOTAL DISTRIBUTIONS ............................... (168,074,875) (10,733,268)
-------------- --------------

Net increase (decrease) from transactions in shares of
beneficial interest ................................ 270,995,386 (111,845,093)
-------------- --------------
NET INCREASE ...................................... 715,615,611 188,858,752

NET ASSETS:
Beginning of period .................................. 796,990,012 608,131,260
-------------- --------------
END OF PERIOD
(Including accumulated net investment losses of
$8,248,388 and $45,483, respectively) ............. $1,512,605,623 $ 796,990,012
============== ==============
</TABLE>

See Notes to Financial Statements

10
<PAGE>

Morgan Stanley Dean Witter Developing Growth Securities Trust
Notes to Financial Statements March 31, 2000 (unaudited)

1. ORGANIZATION AND ACCOUNTING POLICIES

Morgan Stanley 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.
On July 28, 1997, the Fund converted to a multiple class share structure.

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

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

The following is a summary of significant accounting policies:

A. VALUATION OF INVESTMENTS - (1) an equity security listed or traded on the New
York, American or other domestic or foreign stock exchange is valued at its
latest sale price on that exchange prior to the time when assets are valued; if
there were no sales that day, the security is valued at the latest bid price;
(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 Morgan Stanley Dean
Witter Advisors Inc. (the "Investment Manager") that sale or bid prices are not
reflective of a security's market value, portfolio securities are valued at
their fair value as determined in good faith under procedures established by and
under the general supervision of the 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.

11
<PAGE>

Morgan Stanley Dean Witter Developing Growth Securities Trust
Notes to Financial Statements March 31, 2000 (unaudited) continued

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

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

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

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

2. INVESTMENT MANAGEMENT AGREEMENT

Pursuant to an Investment Management Agreement, the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined as of the close
of each business day: 0.50% 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.

3. PLAN OF DISTRIBUTION

Shares of the Fund are distributed by Morgan Stanley Dean Witter Distributors
Inc. (the "Distributor"), an affiliate of the Investment Manager. The Fund has
adopted a Plan of Distribution (the "Plan") pursuant to

12
<PAGE>

Morgan Stanley Dean Witter Developing Growth Securities Trust
Notes to Financial Statements March 31, 2000 (unaudited) continued

Rule 12b-1 under the Act. The Plan provides that the Fund will pay the
Distributor a fee which is accrued daily and paid monthly at the following
annual rates: (i) Class A - up to 0.25% of the average daily net assets of Class
A; (ii) Class B - 1.0% of the lesser of: (a) the average daily aggregate gross
sales of the Class B shares since the inception of the Fund (not including
reinvestment of dividend or capital gain distributions) less the average daily
aggregate net asset value of the Class B shares redeemed since the Fund's
inception upon which a contingent deferred sales charge has been imposed or
waived; or (b) the average daily net assets of Class B; and (iii) Class C - up
to 1.0% of the average daily net assets of Class C.

In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under the
Plan and the proceeds of contingent deferred sales charges paid by investors
upon redemption of shares, if for any reason the Plan is terminated, the
Trustees will consider at that time the manner in which to treat such expenses.
The Distributor has advised the Fund that such excess amounts totaled
$19,706,528 at March 31, 2000.

In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to Morgan Stanley Dean Witter Financial Advisors or other
selected broker-dealer representatives may be reimbursed in the subsequent
calendar year. For the six months ended March 31, 2000, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.23% and
1.0%, respectively.

The Distributor has informed the Fund that for the six months ended March 31,
2000, it received contingent deferred sales charges from certain redemptions of
the Fund's Class B shares and Class C shares of $316,981 and $4,243,
respectively, and received $62,398, in front-end sales charges from sales of the
Fund's Class A shares. The respective shareholders pay such charges which are
not an expense of the Fund.

4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES

The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended March 31, 2000 aggregated
$1,053,827,508, and $962,480,569, respectively.

13
<PAGE>

Morgan Stanley Dean Witter Developing Growth Securities Trust
Notes to Financial Statements March 31, 2000 (unaudited) continued

For the six months ended March 31, 2000, the Fund incurred $14,128 in brokerage
commissions with Dean Witter Reynolds Inc. ("DWR"), an affiliate of the
Investment Manager and Distributor, for portfolio transactions executed on
behalf of the Fund. At March 31, 2000, the Fund's payable for investments
purchased and receivable for investments sold included unsettled trades with DWR
of $2,847,453 and $3,900,000, respectively.

For the six months ended March 31, 2000, the Fund incurred brokerage commissions
of $26,540 with Morgan Stanley & Co., Inc., an affiliate of the Investment
Manager and Distributor, for portfolio transactions executed on behalf of the
Fund.

Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At March 31, 2000, the Fund had
transfer agent fees and expenses payable of approximately $27,000.

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 six months ended March 31, 2000
included in Trustees' fees and expenses in the Statement of Operations amounted
to $2,968. At March 31, 2000, the Fund had an accrued pension liability of
$45,955 which is included in accrued expenses in the Statement of Assets and
Liabilities.

5. FEDERAL INCOME TAX STATUS

As of September 30, 1999, the Fund had temporary book/tax differences primarily
attributable to capital loss deferrals on wash sales.

14
<PAGE>

Morgan Stanley Dean Witter Developing Growth Securities Trust
Notes to Financial Statements March 31, 2000 (unaudited) continued

6. SHARES OF BENEFICIAL INTEREST

Transactions in shares of beneficial interest were as follows:

FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
MARCH 31, 2000 SEPTEMBER 30, 1999
---------------------------------- ------------------------------------
(unaudited)
SHARES AMOUNT SHARES AMOUNT
--------------- ---------------- --------------- ------------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold ...................................... 1,264,701 $ 57,539,976 1,795,565 $ 45,961,645
Reinvestment of distributions ............. 94,160 3,633,635 5,508 123,765
Redeemed .................................. (983,832) (45,030,324) (1,601,819) (41,473,827)
--------- -------------- ---------- --------------
Net increase - Class A .................... 375,029 16,143,287 199,254 4,611,583
--------- -------------- ---------- --------------

CLASS B SHARES
Sold ...................................... 6,834,237 301,912,743 19,364,899 501,039,654
Reinvestment of distributions ............. 4,024,083 151,909,148 444,464 9,880,417
Redeemed .................................. (5,299,829) (226,694,583) (24,437,018) (628,930,869)
---------- -------------- ----------- --------------
Net increase (decrease) - Class B ......... 5,558,491 227,127,308 (4,627,655) (118,010,798)
---------- -------------- ----------- --------------

CLASS C SHARES
Sold ...................................... 285,750 13,414,100 1,377,267 36,318,739
Reinvestment of distributions ............. 31,863 1,204,735 1,953 43,445
Redeemed .................................. (67,605) (3,091,258) (1,334,660) (35,381,357)
---------- -------------- ----------- --------------
Net increase - Class C .................... 250,008 11,527,577 44,560 980,827
---------- -------------- ----------- --------------

CLASS D SHARES
Sold ...................................... 1,382,365 61,337,215 2,267,493 57,727,289
Reinvestment of distributions ............. 33,389 1,297,173 1,883 42,446
Redeemed .................................. (1,043,367) (46,437,174) (2,220,762) (57,196,440)
---------- -------------- ----------- --------------
Net increase - Class D .................... 372,387 16,197,214 48,614 573,295
---------- -------------- ----------- --------------
Net increase (decrease) in Fund ........... 6,555,915 $ 270,995,386 (4,335,227) $ (111,845,093)
========== ============== =========== ==============
</TABLE>

15
<PAGE>

Morgan Stanley Dean Witter Developing Growth Securities Trust
Financial Highlights

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

FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
MARCH 31, 2000 SEPTEMBER 30, 1999
-------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period ................... $31.44 $20.38
------ ------
Income (loss) from investment operations:
Net investment loss ................................... (0.13) (0.07)
Net realized and unrealized gain (loss) ............... 23.03 11.50
------ ------
Total income (loss) from investment operations ......... 22.90 11.43
------ ------
Less distributions from net realized gain .............. (6.47) (0.37)
------ ------
Net asset value, end of period ......................... $47.87 $31.44
====== ======

TOTAL RETURN+ .......................................... 77.78 %(1) 56.81 %

RATIOS TO AVERAGE NET ASSETS:
Expenses ............................................... 0.83 %(2)(3) 0.90 %(3)
Net investment loss .................................... (0.59)%(2)(3) (0.25)%(3)

SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ................ $41,166 $15,246
Portfolio turnover rate ................................ 84 % 172 %

FOR THE PERIOD
FOR THE YEAR JULY 28, 1997*
ENDED THROUGH
SEPTEMBER 30, 1998 SEPTEMBER 30, 1997
-------------------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period ................... $27.50 $24.62
------ ------
Income (loss) from investment operations:
Net investment loss ................................... (0.06) (0.02)
Net realized and unrealized gain (loss) ............... (4.75) 2.90
------ ------
Total income (loss) from investment operations ......... (4.81) 2.88
------ ------
Less distributions from net realized gain .............. (2.31) --
------ ------
Net asset value, end of period ......................... $20.38 $27.50
====== ======
TOTAL RETURN+ .......................................... (18.26)% 11.70 %(1)

RATIOS TO AVERAGE NET ASSETS:
Expenses ............................................... 0.94 %(3) 0.99 %(2)
Net investment loss .................................... (0.23)%(3) (0.46)%(2)

SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ................ $5,822 $978
Portfolio turnover rate ................................ 178 % 154 %
</TABLE>

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

* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.

See Notes to Financial Statements

16
<PAGE>

Morgan Stanley Dean Witter Developing Growth Securities Trust
Financial Highlights, continued

FOR THE SIX FOR THE YEAR ENDED SEPTEMBER 30,
MONTHS ENDED --------------------------------------------------------------
MARCH 31, 2000++ 1999++ 1998++ 1997*++ 1996
------------------------------------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C> <C> <C> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period .......... $30.90 $20.19 $27.46 $27.71 $25.54
------ ------ ------ ------ ------
Income (loss) from investment operations:
Net investment loss .......................... (0.29) (0.27) (0.20) (0.28) (0.23)
Net realized and unrealized gain (loss) ...... 22.58 11.35 (4.76) 3.92 4.32
------ ------ ------ ------ ------
Total income (loss) from investment
operations ................................... 22.29 11.08 (4.96) 3.64 4.09
------ ------ ------ ------ ------
Less distributions from net realized gain ..... (6.47) (0.37) (2.31) (3.89) (1.92)
------ ------ ------ ------ ------
Net asset value, end of period ................ $46.72 $30.90 $20.19 $27.46 $27.71
====== ====== ====== ====== ======
TOTAL RETURN+ ................................. 77.10 %(1) 55.59 % (18.88)% 16.38 % 17.53 %

RATIOS TO AVERAGE NET ASSETS:
Expenses ...................................... 1.60 %(2)(3) 1.70 %(3) 1.69 %(3) 1.68 % 1.69 %
Net investment loss ........................... (1.36)%(2)(3) (1.05)%(3) (0.98)%(3) (1.21)% (1.03)%

SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ....... $1,424,520 $770,392 $596,834 $877,539 $799,201
Portfolio turnover rate ....................... 84 % 172 % 178 % 154 % 149 %

<CAPTION>
FOR THE YEAR
ENDED SEPTEMBER
30,
---------------
1995
---------------
<S> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period .......... $ 17.55
----------
Income (loss) from investment operations:
Net investment loss .......................... (0.19)
Net realized and unrealized gain (loss) ...... 8.34
----------
Total income (loss) from investment
operations ................................... 8.15
----------
Less distributions from net realized gain ..... (0.16)
----------
Net asset value, end of period ................ $ 25.54
==========
TOTAL RETURN+ ................................. 46.87 %
RATIOS TO AVERAGE NET ASSETS:
Expenses ...................................... 1.77 %
Net investment loss ........................... (1.04)%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ....... $534,869
Portfolio turnover rate ....................... 114%
</TABLE>

--------------
* Prior to July 28, 1997, the Fund issued one class of shares. All shares of
the Fund held prior to that date have been designated Class B shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.

See Notes to Financial Statements

17
<PAGE>

Morgan Stanley Dean Witter Developing Growth Securities Trust
Financial Highlights, continued

FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
MARCH 31, 2000 SEPTEMBER 30, 1999
-------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
CLASS C SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period ................... $30.95 $20.19
------ ------
Income (loss) from investment operations:
Net investment loss ................................... (0.41) (0.25)
Net realized and unrealized gain (loss) ............... 22.73 11.38
------ ------
Total income (loss) from investment operations ......... 22.32 11.13
------ ------
Less distributions from net realized gain .............. (6.47) (0.37)
------ ------
Net asset value, end of period ......................... $46.80 $30.95
====== ======
TOTAL RETURN+ .......................................... 77.08 %(1) 55.84 %

RATIOS TO AVERAGE NET ASSETS:
Expenses ............................................... 1.60 %(2)(3) 1.58 %(3)
Net investment loss .................................... (1.36)%(2)(3) (0.93)%(3)

SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ................ $18,850 $4,728
Portfolio turnover rate ................................ 84 % 172 %

<CAPTION>
FOR THE PERIOD
FOR THE YEAR JULY 28, 1997*
ENDED THROUGH
SEPTEMBER 30, 1998 SEPTEMBER 30, 1997
--------------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS C SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period ................... $27.46 $24.62
------ ------
Income (loss) from investment operations:
Net investment loss ................................... (0.23) (0.05)
Net realized and unrealized gain (loss) ............... (4.73) 2.89
------ ------
Total income (loss) from investment operations ......... (4.96) 2.84
------ ------
Less distributions from net realized gain .............. (2.31) --
------ ------
Net asset value, end of period ......................... $20.19 $27.46
====== ======
TOTAL RETURN+........................................... (18.88)% 11.54 %(1)

RATIOS TO AVERAGE NET ASSETS:
Expenses ............................................... 1.69 %(3) 1.71 %(2)
Net investment loss .................................... (0.98)%(3) (1.19)%(2)

SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ................ $2,185 $1,066
Portfolio turnover rate ................................ 178 % 154 %
</TABLE>

--------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.

See Notes to Financial Statements

18
<PAGE>

Morgan Stanley Dean Witter Developing Growth Securities Trust
Financial Highlights, continued

<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
MARCH 31, 2000 SEPTEMBER 30, 1999
---------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
CLASS D SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period ................... $31.60 $ 20.44
------ -------
Income (loss) from investment operations:
Net investment income (loss) .......................... (0.08) (0.01)
Net realized and unrealized gain (loss) ............... 23.18 11.54
------ -------
Total income (loss) from investment operations ......... 23.10 11.53
------ -------
Less distributions from net realized gain .............. (6.47) (0.37)
------ -------
Net asset value, end of period ......................... $48.23 $31.60
====== ======
TOTAL RETURN +.......................................... 78.04 %(1) 57.14 %

RATIOS TO AVERAGE NET ASSETS:

Expenses ............................................... 0.60 %(2)(3) 0.70 %(3)
Net investment income (loss) ........................... (0.36)%(2)(3) (0.05)%(3)

SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ................ $28,070 $6,625
Portfolio turnover rate ................................ 84 % 172 %

FOR THE PERIOD
FOR THE YEAR JULY 28, 1997*
ENDED THROUGH
SEPTEMBER 30, 1998 SEPTEMBER 30, 1997
-------------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS D SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period ................... $27.51 $24.62
------ ------
Income (loss) from investment operations:
Net investment income (loss) .......................... 0.01 (0.01)
Net realized and unrealized gain (loss) ............... (4.77) 2.90
------ ------
Total income (loss) from investment operations ......... (4.76) 2.89
------ ------
Less distributions from net realized gain .............. (2.31) --
------ ------
Net asset value, end of period ......................... $20.44 $27.51
====== ======
TOTAL RETURN +.......................................... (18.05)% 11.74 %(1)

RATIOS TO AVERAGE NET ASSETS:
Expenses ............................................... 0.69 %(3) 0.70 %(2)
Net investment income (loss) ........................... 0.02 %(3) (0.20)%(2)

SUPPLEMENTAL DATA:
Net assets, end of period, in thousands ................ $3,291 $22
Portfolio turnover rate ................................ 178 % 154 %
</TABLE>

--------------
* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.

See Notes to Financial Statements

19
<PAGE>

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

OFFICERS

Charles A. Fiumefreddo
Chairman and Chief Executive Officer

Mitchell M. Merin
President

Barry Fink
Vice President, Secretary and General Counsel

Arman Bar-Tur
Vice President

Thomas F. Caloia
Treasurer

TRANSFER AGENT

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

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036

INVESTMENT MANAGER

Morgan Stanely Dean Witter Advisors 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.
Read the prospectus carefully before investing.

Morgan Stanley Dean Witter Distributors Inc., member NASD.

MORGAN STANLEY
DEAN WITTER
DEVELOPING
GROWTH SECURITIES

[GRAPHIC OMITTED]

SEMIANNUAL REPORT
March 31, 2000