WITTER DEAN U S GOVERNMENT SECURITIES TRUST
497, 1997-07-30
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<PAGE>
                         DEAN WITTER
                         U.S. GOVERNMENT SECURITIES TRUST
                         PROSPECTUS--JULY 28, 1997
 
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DEAN  WITTER  U.S.  GOVERNMENT  SECURITIES TRUST  (THE  "FUND")  IS  AN OPEN-END
DIVERSIFIED MANAGEMENT  INVESTMENT COMPANY  WHOSE INVESTMENT  OBJECTIVE IS  HIGH
CURRENT INCOME CONSISTENT WITH SAFETY OF PRINCIPAL. THE FUND OFFERS A CONVENIENT
AND ECONOMICAL WAY FOR PERSONS TO INVEST IN A PROFESSIONALLY MANAGED DIVERSIFIED
PORTFOLIO  OF OBLIGATIONS  ISSUED OR  GUARANTEED BY  THE U.S.  GOVERNMENT OR ITS
INSTRUMENTALITIES. ALL SUCH OBLIGATIONS ARE BACKED BY THE FULL FAITH AND  CREDIT
OF  THE UNITED STATES. NO ASSURANCE CAN  BE GIVEN THAT THE FUND'S OBJECTIVE WILL
BE REALIZED.  SHARES OF  THE FUND  ARE NOT  SPONSORED, GUARANTEED,  ENDORSED  OR
INSURED BY THE U.S. GOVERNMENT OR ANY AGENCY THEREOF.
 
The  Fund offers four classes of shares (each, a "Class"), each with a different
combination of sales  charges, ongoing  fees and other  features. The  different
distribution  arrangements permit an investor to choose the method of purchasing
shares that the  investor believes is  most beneficial given  the amount of  the
purchase,  the length of time the investor  expects to hold the shares and other
relevant circumstances.  Except as  discussed herein,  shares of  the Fund  held
prior  to July 28,  1997 have been  designated Class B  shares. See "Purchase of
Fund Shares--Alternative Purchase Arrangements."
 
This Prospectus  sets forth  concisely the  information you  should know  before
investing  in the  Fund. It  should be read  and retained  for future reference.
Additional  information  about  the  Fund  is  contained  in  the  Statement  of
Additional  Information,  dated July  28, 1997,  which has  been filed  with the
Securities and Exchange  Commission, and which  is available at  no charge  upon
request of the Fund at the address or telephone numbers listed on this page. The
Statement of Additional Information is incorporated herein by reference.
 
<TABLE>
<CAPTION>
TABLE OF CONTENTS
 
<S>                                                 <C>
Prospectus Summary................................       2
 
Summary of Fund Expenses..........................       4
 
Financial Highlights..............................       5
 
The Fund and its Management.......................       6
 
Investment Objective and Policies.................       6
 
  Risk Considerations.............................       8
 
Purchase of Fund Shares...........................      10
 
Shareholder Services..............................      18
 
Redemptions and Repurchases.......................      20
 
Dividends, Distributions and Taxes................      20
 
Performance Information...........................      21
 
Additional Information............................      22
</TABLE>
 
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY,  ANY BANK, AND THE  SHARES ARE NOT FEDERALLY  INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
 
DEAN WITTER
U.S. GOVERNMENT SECURITIES TRUST
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 392-2550 or (800) 869-NEWS (toll-free)
 
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<PAGE>
  THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
 EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
   AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
                               CRIMINAL OFFENSE.
 
                   DEAN WITTER DISTRIBUTORS INC., DISTRIBUTOR

<PAGE>
PROSPECTUS SUMMARY
 
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<TABLE>
<S>             <C>
THE FUND        The  Fund is organized as a Trust, commonly known as a Massachusetts business trust, and
                is an open-end diversified management investment company investing in obligations issued
                or guaranteed by the U.S. Government.
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SHARES OFFERED  Shares of beneficial interest with $0.01 par  value (see page 22). The Fund offers  four
                Classes  of shares, each with a different combination of sales charges, ongoing fees and
                other features (see pages 10-17).
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MINIMUM         The minimum initial investment for each Class  is $1,000 ($100 if the account is  opened
PURCHASE        through
                EasyInvest-SM-).  Class D shares are  only available to persons  investing $5 million or
                more and to certain other  limited categories of investors.  For the purpose of  meeting
                the  minimum $5 million investment for Class D shares, and subject to the $1,000 minimum
                initial investment for each Class of the Fund, an investor's existing holdings of  Class
                A  shares  and  shares  of funds  for  which  Dean Witter  InterCapital  Inc.  serves as
                investment manager ("Dean Witter  Funds") that are sold  with a front-end sales  charge,
                and  concurrent investments in  Class D shares of  the Fund and  other Dean Witter Funds
                that are multiple class funds, will be aggregated. The minimum subsequent investment  is
                $100 (see page 10).
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INVESTMENT      The  investment objective of the  Fund is high current  income consistent with safety of
OBJECTIVE       principal.
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INVESTMENT      Dean Witter InterCapital Inc., the Investment Manager of the Fund, and its  wholly-owned
MANAGER         subsidiary,  Dean Witter Services Company Inc.,  serve in various investment management,
                advisory, management and administrative capacities to 100 investment companies and other
                portfolios with assets of approximately $96.6 billion at June 30, 1997 (see page 6).
- -------------------------------------------------------------------------------------------------------
MANAGEMENT      The Investment Manager receives a monthly fee at the annual rate of 0.50% (1/2 of 1%) of
FEE             daily net assets, scaled down on assets over $1 billion. The fee should not be  compared
                with  fees paid by other investment  companies without also considering applicable sales
                loads and distribution fees, including those noted below (see page 6).
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DISTRIBUTOR     Dean Witter Distributors Inc. (the "Distributor").  The Fund has adopted a  distribution
AND             plan  pursuant to Rule  12b-1 under the  Investment Company Act  (the "12b-1 Plan") with
DISTRIBUTION    respect to the distribution fees paid by the Class A, Class B and Class C shares of  the
FEE             Fund  to the Distributor. The entire  12b-1 fee payable by Class  A and a portion of the
                12b-1 fee payable by each of Class B and Class C equal to 0.20% of the average daily net
                assets of Class B  and 0.25% of the  average daily net assets  of Class C are  currently
                each  characterized as a service  fee within the meaning  of the National Association of
                Securities Dealers, Inc. guidelines. The remaining portion of the 12b-1 fee, if any,  is
                characterized as an asset-based sales charge (see pages 10 and 16).
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ALTERNATIVE     Four classes of shares are offered:
PURCHASE
ARRANGEMENTS    -  Class A  shares are  offered with  a front-end  sales charge,  starting at  4.25% and
                reduced for larger  purchases. Investments  of $1 million  or more  (and investments  by
                certain  other limited categories of  investors) are not subject  to any sales charge at
                the time of  purchase but a  contingent deferred sales  charge ("CDSC") of  1.0% may  be
                imposed  on redemptions within one year of purchase. The Fund is authorized to reimburse
                the Distributor for  specific expenses  incurred in  promoting the  distribution of  the
                Fund's  Class A shares and  servicing shareholder accounts pursuant  to the Fund's 12b-1
                Plan. Reimbursement may in no event exceed an amount equal to payments at an annual rate
                of 0.25% of average daily net assets of the Class (see pages 10, 12 and 16).
 
                - Class B shares are offered without a front-end sales charge, but will in most cases be
                subject to a CDSC  (scaled down from 5.0%  to 1.0%) if redeemed  within six years  after
                purchase.  The CDSC will be imposed on any redemption of shares if after such redemption
                the aggregate current value of a Class B account with the Fund falls below the aggregate
                amount of  the investor's  purchase payments  made during  the six  years preceding  the
                redemption. A different CDSC schedule applies to investments by certain qualified plans.
                Class  B shares are  also subject to  a 12b-1 fee  assessed at the  annual rate of 0.75%
                (0.65% on amounts over $10 billion) of the lesser of: (a) the average daily net sales of
                the Fund's Class B shares or (b) the average daily net assets of Class B. All shares  of
                the  Fund held prior  to July 28, 1997  (other than the shares  held by certain employee
                benefit  plans  established  by  Dean  Witter  Reynolds  Inc.  and  its  affiliate,  SPS
                Transaction  Services, Inc.) have been  designated Class B shares.  Shares held by those
                employee benefit plans  prior to  July 28,  1997 have  been designated  Class D  shares.
                Shares  held before May 1, 1997 that have been designated Class B shares will convert to
                Class A shares in May, 2007. In all  other instances, Class B shares convert to Class  A
                shares approximately ten years after the date of the original purchase (see pages 10, 14
                and 16).
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</TABLE>
 
2
<PAGE>
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<TABLE>
<S>             <C>
                - Class C shares are offered without a front-end sales charge, but will in most cases be
                subject  to a  CDSC of  1.0% if  redeemed within  one year  after purchase.  The Fund is
                authorized to reimburse the Distributor for specific expenses incurred in promoting  the
                distribution of the Fund's Class C shares and servicing shareholder accounts pursuant to
                the  Fund's 12b-1 Plan. Reimbursement may in no event exceed an amount equal to payments
                at an annual rate of 0.75%  of average daily net assets of  the Class (see pages 10  and
                16).
 
                -  Class D shares are offered only to investors meeting an initial investment minimum of
                $5 million and  to certain other  limited categories  of investors. Class  D shares  are
                offered  without a front-end sales charge  or CDSC and are not  subject to any 12b-1 fee
                (see pages 10 and 16).
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DIVIDENDS AND   Dividends  from  net  investment  income  are  declared  daily  and  paid  monthly   and
CAPITAL GAINS   distributions  from net capital gains, if any, are paid at least once per year. The Fund
DISTRIBUTIONS   may, however, determine to retain all or part of any net long-term capital gains in  any
                year  for reinvestment. Dividends  and capital gains  distributions paid on  shares of a
                Class are automatically reinvested in additional shares  of the same Class at net  asset
                value  unless the shareholder  elects to receive  cash. Shares acquired  by dividend and
                distribution reinvestment will not be subject to any sales charge or CDSC (see pages  18
                and 20).
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REDEMPTION      Shares  are redeemable by the shareholder at net asset value less any applicable CDSC on
                Class A, Class  B or Class  C shares. An  account may be  involuntarily redeemed if  the
                total  value of  the account is  less than  $100 or, if  the account  was opened through
                EasyInvest-SM-, if after twelve months the shareholder has invested less than $1,000  in
                the account (see page 20).
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RISKS           The  Fund invests only in obligations issued  or guaranteed by the U.S. Government which
                are subject to  minimal risk  of loss  of income  and principal.  It may  engage in  the
                purchase  of such securities on  a when-issued basis. The  value of the Fund's portfolio
                securities, and therefore the Fund's net asset value per share, may increase or decrease
                due to various factors, principally changes  in prevailing interest rates. Generally,  a
                rise  in interest  rates will result  in a  decrease in the  Fund's net  asset value per
                share, while a drop in interest rates will result in an increase in the Fund's net asset
                value per share. In addition, the average life of certain of the securities held in  the
                Fund's   portfolio  (i.e.,  GNMA  Certificates)  may  be  shortened  by  prepayments  or
                refinancings of the mortgage pools underlying such securities. Such prepayments may have
                an impact on dividends paid by the Fund (see pages 6-10).
- -------------------------------------------------------------------------------------------------------
</TABLE>
 
  THE ABOVE IS QUALIFIED IN ITS ENTIRETY BY THE DETAILED INFORMATION APPEARING
  ELSEWHERE IN THIS PROSPECTUS AND IN THE STATEMENT OF ADDITIONAL INFORMATION
 
                                                                               3
<PAGE>
SUMMARY OF FUND EXPENSES
- --------------------------------------------------------------------------------
 
The  following table illustrates all expenses and fees that a shareholder of the
Fund will incur. The expenses and fees set  forth in the table are based on  the
expenses and fees for the fiscal year ended December 31, 1996.
 
<TABLE>
<CAPTION>
                                                                                   CLASS A    CLASS B    CLASS C    CLASS D
                                                                                  ---------   -------   ---------   -------
<S>                                                                               <C>         <C>       <C>         <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price)...   4.25%(1)    None      None        None
Sales Charge Imposed on Dividend Reinvestments..................................   None        None      None        None
Maximum Contingent Deferred Sales Charge (as a percentage of original purchase
  price or redemption proceeds).................................................   None(2)     5.00%(3)  1.00%(4)    None
Redemption Fees.................................................................   None        None      None        None
Exchange Fee....................................................................   None        None      None        None
 
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees.................................................................   0.42%       0.42%     0.42%       0.42%
12b-1 Fees (5) (6)..............................................................   0.25%       0.75%     0.75%       None
Other Expenses..................................................................   0.08%       0.08%     0.08%       0.08%
Total Fund Operating Expenses (7)...............................................   0.75%       1.25%     1.25%       0.50%
</TABLE>
 
- ---------------
(1) REDUCED   FOR  PURCHASES  OF  $25,000  AND   OVER  (SEE  "PURCHASE  OF  FUND
    SHARES--INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES").
 
(2) INVESTMENTS THAT ARE NOT SUBJECT TO ANY SALES CHARGE AT THE TIME OF PURCHASE
    ARE SUBJECT TO  A CDSC OF  1.00% THAT  WILL BE IMPOSED  ON REDEMPTIONS  MADE
    WITHIN  ONE YEAR AFTER  PURCHASE, EXCEPT FOR  CERTAIN SPECIFIC CIRCUMSTANCES
    (SEE "PURCHASE  OF FUND  SHARES--INITIAL SALES  CHARGE ALTERNATIVE--CLASS  A
    SHARES").
 
(3) THE  CDSC  IS SCALED  DOWN TO  1.00%  DURING THE  SIXTH YEAR,  REACHING ZERO
    THEREAFTER.
 
(4) ONLY APPLICABLE  TO REDEMPTIONS  MADE WITHIN  ONE YEAR  AFTER PURCHASE  (SEE
    "PURCHASE OF FUND SHARES--LEVEL LOAD ALTERNATIVE--CLASS C SHARES").
 
(5) THE  12b-1 FEE IS  ACCRUED DAILY AND  PAYABLE MONTHLY. THE  ENTIRE 12b-1 FEE
    PAYABLE BY CLASS A AND A PORTION OF THE 12b-1 FEE PAYABLE BY EACH OF CLASS B
    AND CLASS C EQUAL TO  0.20% OF THE AVERAGE DAILY  NET ASSETS OF CLASS B  AND
    0.25%  OF  THE  AVERAGE DAILY  NET  ASSETS  OF CLASS  C  ARE  CURRENTLY EACH
    CHARACTERIZED AS A SERVICE FEE WITHIN THE MEANING OF NATIONAL ASSOCIATION OF
    SECURITIES DEALERS,  INC.  ("NASD") GUIDELINES  AND  ARE PAYMENTS  MADE  FOR
    PERSONAL  SERVICE AND/OR MAINTENANCE OF  SHAREHOLDER ACCOUNTS. THE REMAINDER
    OF THE  12b-1  FEE,  IF ANY,  IS  AN  ASSET-BASED SALES  CHARGE,  AND  IS  A
    DISTRIBUTION  FEE PAID TO THE DISTRIBUTOR  TO COMPENSATE IT FOR THE SERVICES
    PROVIDED AND  THE  EXPENSES BORNE  BY  THE  DISTRIBUTOR AND  OTHERS  IN  THE
    DISTRIBUTION  OF THE  FUND'S SHARES (SEE  "PURCHASE OF  FUND SHARES--PLAN OF
    DISTRIBUTION").
 
(6) UPON CONVERSION OF CLASS  B SHARES TO  CLASS A SHARES,  SUCH SHARES WILL  BE
    SUBJECT TO THE LOWER 12b-1 FEE APPLICABLE TO CLASS A SHARES. NO SALES CHARGE
    IS  IMPOSED AT THE TIME  OF CONVERSION OF CLASS B  SHARES TO CLASS A SHARES.
    CLASS C SHARES DO NOT HAVE A CONVERSION FEATURE AND, THEREFORE, ARE  SUBJECT
    TO   AN   ONGOING   0.75%   DISTRIBUTION   FEE   (SEE   "PURCHASE   OF  FUND
    SHARES--ALTERNATIVE PURCHASE ARRANGEMENTS").
 
(7) THERE WERE NO OUTSTANDING SHARES OF CLASS A, CLASS C OR CLASS D PRIOR TO THE
    DATE OF THIS  PROSPECTUS. ACCORDINGLY, "TOTAL  FUND OPERATING EXPENSES,"  AS
    SHOWN  ABOVE WITH RESPECT TO THOSE CLASSES,  ARE BASED UPON THE SUM OF 12b-1
    FEES, MANAGEMENT FEES AND ESTIMATED "OTHER EXPENSES."
 
<TABLE>
<CAPTION>
EXAMPLES                                                                 1 YEAR       3 YEARS      5 YEARS     10 YEARS
                                                                       -----------  -----------  -----------  -----------
<S>                                                                    <C>          <C>          <C>          <C>
You would pay the following expenses on a $1,000 investment assuming
 (1) a 5% annual return and (2) redemption at the end of each time
 period:
    Class A..........................................................   $      50    $      65    $      82    $     132
    Class B..........................................................   $      63    $      70    $      89    $     151
    Class C..........................................................   $      23    $      40    $      69    $     151
    Class D..........................................................   $       5    $      16    $      28    $      63
 
You would pay the following expenses on the same $1,000 investment
 assuming no redemption at the end of the period:
    Class A..........................................................   $      50    $      65    $      82    $     132
    Class B..........................................................   $      13    $      40    $      69    $     151
    Class C..........................................................   $      13    $      40    $      69    $     151
    Class D..........................................................   $       5    $      16    $      28    $      63
</TABLE>
 
THE ABOVE EXAMPLES SHOULD NOT BE  CONSIDERED A REPRESENTATION OF PAST OR  FUTURE
EXPENSES  OR PERFORMANCE. ACTUAL EXPENSES  OF EACH CLASS MAY  BE GREATER OR LESS
THAN THOSE SHOWN.
 
The purpose of this table is to assist the investor in understanding the various
costs and  expenses  that  an  investor  in  the  Fund  will  bear  directly  or
indirectly.  For a  more complete description  of these costs  and expenses, see
"The Fund and its Management,"  "Purchase of Fund Shares--Plan of  Distribution"
and "Redemptions and Repurchases."
 
Long-term  shareholders of Class  B and Class  C may pay  more in sales charges,
including distribution  fees,  than  the  economic  equivalent  of  the  maximum
front-end sales charges permitted by the NASD.
 
4
<PAGE>
FINANCIAL HIGHLIGHTS
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The  following ratios  and per  share data  for a  share of  beneficial interest
outstanding throughout each period  have been audited  by Price Waterhouse  LLP,
independent  accountants. The financial highlights should be read in conjunction
with the financial statements, the notes  thereto and the unqualified report  of
independent  accountants  which are  contained  in the  Statement  of Additional
Information. Further information about the performance of the Fund is  contained
in  the  Fund's Annual  Report to  Shareholders, which  may be  obtained without
charge upon request to the Fund. All shares  of the Fund held prior to July  28,
1997,  other than the shares held  by certain employee benefit plans established
by Dean Witter Reynolds Inc. and its affiliate, SPS Transaction Services,  Inc.,
have been designated Class B shares. Shares held by those employee benefit plans
prior to July 28, 1997 have been designated Class D shares.
 
<TABLE>
<CAPTION>
                                                            FOR THE YEAR ENDED DECEMBER 31,
                           -------------------------------------------------------------------------------------------------
                            1996      1995      1994      1993      1992      1991      1990      1989      1988      1987
                           -------   -------   -------   -------   -------   -------   -------   -------   -------   -------
<S>                        <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
PER SHARE OPERATING
  PERFORMANCE:
  Net asset value,
   beginning of period...  $ 9.21    $ 8.41    $ 9.31    $ 9.30    $ 9.52    $ 9.37    $ 9.51    $ 9.42    $ 9.75    $10.33
                           -------   -------   -------   -------   -------   -------   -------   -------   -------   -------
  Net investment
   income................    0.56      0.57      0.58      0.64      0.74      0.87      0.90      0.91      0.97      0.96
  Net realized and
   unrealized gain
   (loss)................   (0.29)     0.80     (0.90)     0.01     (0.22)     0.15     (0.14)     0.09     (0.33)    (0.58)
                           -------   -------   -------   -------   -------   -------   -------   -------   -------   -------
  Total from investment
   operations............    0.27      1.37     (0.32)     0.65      0.52      1.02      0.76      1.00      0.64      0.38
                           -------   -------   -------   -------   -------   -------   -------   -------   -------   -------
  Less dividends from net
   investment income.....   (0.56)    (0.57)    (0.58)    (0.64)    (0.74)    (0.87)    (0.90)    (0.91)    (0.97)    (0.96)
                           -------   -------   -------   -------   -------   -------   -------   -------   -------   -------
  Net asset value, end of
   period................  $ 8.92    $ 9.21    $ 8.41    $ 9.31    $ 9.30    $ 9.52    $ 9.37    $ 9.51    $ 9.42    $ 9.75
                           -------   -------   -------   -------   -------   -------   -------   -------   -------   -------
                           -------   -------   -------   -------   -------   -------   -------   -------   -------   -------
TOTAL INVESTMENT
  RETURN+................    3.16%    16.74%    (3.51)%    7.13%     5.76%    11.43%     8.49%    11.10%     6.74%     3.92%
  Ratios to average net
   assets:
    Expenses.............    1.25%     1.24%     1.22%     1.18%     1.20%     1.17%     1.23%     1.19%     1.21%     1.18%
    Net investment
     income..............    6.28%     6.44%     6.57%     6.78%     7.91%     9.23%     9.60%     9.62%    10.01%     9.63%
 
SUPPLEMENTAL DATA:
  Net assets, end of
   period, in millions...  $6,450    $7,955    $8,211    $12,235   $12,484   $11,736   $9,829    $10,167   $10,366   $10,418
  Portfolio turnover
   rate..................       8%       14%       26%       32%       40%      104%       54%       44%       15%       51%
</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.
 
                                                                               5
<PAGE>
THE FUND AND ITS MANAGEMENT
- --------------------------------------------------------------------------------
 
Dean Witter  U.S.  Government  Securities  Trust (the  "Fund")  is  an  open-end
diversified  management  investment  company  registered  under  the  Investment
Company Act of 1940,  as amended (the "Act").  The Fund is a  Trust of the  type
commonly  known as a "Massachusetts business  trust" and was organized under the
laws of The Commonwealth of Massachusetts on September 29, 1983.
 
    Dean Witter InterCapital Inc. ("InterCapital" or the "Investment  Manager"),
whose address is Two World Trade Center, New York, New York 10048, is the Fund's
Investment  Manager.  The Investment  Manager, which  was incorporated  in July,
1992, is a wholly-owned  subsidiary of Morgan Stanley,  Dean Witter, Discover  &
Co.,  a preeminent global financial services  firm that maintains leading market
positions in each of its three primary businesses--securities, asset  management
and credit services.
 
    InterCapital  and its wholly-owned subsidiary,  Dean Witter Services Company
Inc.,  serve  in  various   investment  management,  advisory,  management   and
administrative  capacities  to 100  investment  companies, thirty  of  which are
listed  on  the  New  York  Stock  Exchange,  with  combined  total  assets   of
approximately  $93.1  billion  at June  30,  1997. The  Investment  Manager also
manages portfolios of  pension plans, other  institutions and individuals  which
aggregated approximately $3.5 billion at such date.
 
    The  Fund  has retained  the  Investment Manager  to  provide administrative
services, manage its business  affairs and manage the  investment of the  Fund's
assets,  including the placing of orders for  the purchase and sale of portfolio
securities. InterCapital  has  retained Dean  Witter  Services Company  Inc.  to
perform the aforementioned administrative services for the Fund.
 
    The  Fund's Trustees  review the various  services provided by  or under the
direction of the Investment Manager to ensure that the Fund's general investment
policies and programs  are being  properly carried out  and that  administrative
services are being provided to the Fund in a satisfactory manner.
 
    As  full compensation for the services  and facilities furnished to the Fund
and expenses of the Fund  assumed by the Investment  Manager, the Fund pays  the
Investment  Manager monthly compensation  calculated daily at  an annual rate of
0.50% of the  daily net  assets of the  Fund up  to $1 billion,  scaled down  at
various  asset levels to 0.30% on assets over $12.5 billion. For the fiscal year
ended December 31, 1996, the Fund  accrued total compensation to the  Investment
Manager amounting to 0.42% of the Fund's average daily net assets and the Fund's
total expenses amounted to 1.25% of the Fund's average daily net assets.
 
INVESTMENT OBJECTIVE AND POLICIES
- --------------------------------------------------------------------------------
 
The  investment objective  of the  Fund is  high current  income consistent with
safety of  principal.  This investment  objective  may not  be  changed  without
approval  of the Fund's shareholders. The Fund seeks to achieve its objective by
investing in obligations  issued or  guaranteed by  the U.S.  Government or  its
instrumentalities  ("U.S.  Government  securities").  All  such  obligations are
backed by the "full faith and credit"  of the United States. Investments may  be
made  in obligations of instrumentalities of the U.S. Government only where such
obligations are guaranteed by the U.S. Government.
 
    U.S. Government securities  include U.S. Treasury  securities consisting  of
Treasury  bills,  Treasury notes  and  Treasury bonds.  Some  of the  other U.S.
Government securities in  which the Fund  may invest include  securities of  the
Federal  Housing Administration,  the Government  National Mortgage Association,
the Department of  Housing and  Urban Development, the  Export-Import Bank,  the
Farmers  Home Administration, the General  Services Administration, the Maritime
Administration,  Resolution   Funding  Corporation   and  the   Small   Business
Administration.  The  maturities of  such  securities usually  range  from three
months to thirty years.
 
    The Fund  is  not  limited as  to  the  maturities of  the  U.S.  Government
securities  in which it may invest, except  that the Fund will not purchase zero
coupon securities with  remaining maturities  of longer  than ten  years. For  a
discussion  of the risks  of investing in  U.S. Government securities (including
such securities purchased on a when-issued, delayed delivery or firm  commitment
basis and zero coupon securities), see "Risk Considerations" below.
 
    While  the Fund has  the ability to  invest in any  securities backed by the
full faith and credit of the United  States, it is currently anticipated that  a
substantial portion of the Fund's assets will be invested in Certificates of the
Government  National  Mortgage  Association (GNMA).  Should  market  or economic
conditions warrant,  this  policy  is subject  to  change  at any  time  at  the
discretion of the Investment Manager.
 
DESCRIPTION  OF  GNMA  CERTIFICATES.    GNMA  Certificates  are  mortgage-backed
securities. Each  Certificate  evidences  an  interest in  a  specific  pool  of
mortgages  insured by  the Federal  Housing Administration  or the  Farmers Home
Administration  (FHA)  or  guaranteed  by  the  Veterans  Administration   (VA).
Scheduled  payments of principal and interest are made to the registered holders
of GNMA Certificates. The GNMA Certificates that the Fund will invest in are  of
the  modified pass-through type.  GNMA guarantees the  timely payment of monthly
installments of principal and interest on modified pass-through certificates  at
the   time   such  payments   are  due,   whether  or   not  such   amounts  are
 
6
<PAGE>
collected by the issuer  on the underlying mortgages.  The National Housing  Act
provides  that the full faith and credit of  the United States is pledged to the
timely payment of principal and  interest by GNMA of  amounts due on these  GNMA
Certificates.
 
    The  average life  of GNMA  Certificates varies  with the  maturities of the
underlying mortgage instruments with maximum maturities of 30 years. The average
life is  likely to  be substantially  less  than the  original maturity  of  the
mortgage  pools  underlying  the  securities as  the  result  of  prepayments or
refinancing of  such  mortgages  or foreclosure.  Such  prepayments  are  passed
through  to the registered holder with the regular monthly payments of principal
and interest, which has the effect of reducing future payments. Due to the  GNMA
guarantee,  foreclosures impose no risk  to investment principal. The occurrence
of mortgage prepayments is affected by  factors including the level of  interest
rates,  general economic  conditions, the location  and age of  the mortgage and
other social and demographic conditions. As prepayment rates vary widely, it  is
not  possible  to accurately  predict  the average  life  of a  particular pool.
However, statistics indicate  that the  average life  of the  type of  mortgages
backing  the majority  of GNMA Certificates  is approximately  twelve years. For
this reason,  it is  standard practice  to treat  GNMA Certificates  as  30-year
mortgage-backed  securities which  prepay fully  in the  twelfth year.  Pools of
mortgages with other maturities or  different characteristics will have  varying
assumptions  for average  life. The assumed  average life of  pools of mortgages
having terms of less than 30 years is less than twelve years, but typically  not
less than five years.
 
    The  coupon rate of interest of GNMA Certificates is lower than the interest
rate  paid  on  the  VA-guaranteed  or  FHA-insured  mortgages  underlying   the
Certificates, but only by the amount of the fees paid to GNMA and the issuer.
 
    Yields on pass-through securities are typically quoted by investment dealers
and  vendors  based  on  the  maturity of  the  underlying  instruments  and the
associated average life  assumption. In  periods of falling  interest rates  the
rate of prepayment tends to increase, thereby shortening the actual average life
of a pool of mortgage-related securities. Conversely, in periods of rising rates
the rate of prepayment tends to decrease, thereby lengthening the actual average
life of the pool. Reinvestment by the Fund of prepayments may occur at higher or
lower  interest rates than the original investment. Historically, actual average
life has been consistent with the twelve-year assumption referred to above.  The
actual yield of each GNMA Certificate is influenced by the prepayment experience
of  the mortgage pool underlying the Certificates. Interest on GNMA Certificates
is paid monthly rather than semi-annually as for traditional bonds.
 
    The Fund  will  invest  in  mortgage  pass-through  securities  representing
participation  interests in  pools of  residential mortgage  loans originated by
United States governmental or private lenders such as banks, broker-dealers  and
financing   corporations  and  guaranteed,  to   the  extent  provided  in  such
securities,  by  the  United  States  Government  or  one  of  its  agencies  or
instrumentalities.  Such  securities,  which  are  ownership  interests  in  the
underlying mortgage  loans,  differ  from conventional  debt  securities,  which
provide   for   periodic  payment   of  interest   in  fixed   amounts  (usually
semi-annually) and principal payments  at maturity or  on specified call  dates.
Mortgage  pass-through  securities  provide  for  monthly  payments  that  are a
"pass-through" of the  monthly interest  and principal  payments (including  any
prepayments)  made by the individual borrowers on the pooled mortgage loans, net
of any fees paid  to the guarantor  of such securities and  the servicer of  the
underlying  mortgage loans.  The guaranteed mortgage  pass-through securities in
which the Fund may invest  include those issued or  guaranteed by GNMA or  other
entities  which securities are backed by the full faith and credit of the United
States.
 
    Certificates for  mortgage-backed  securities  evidence  an  interest  in  a
specific  pool of  mortgages. These certificates  are, in  most cases, "modified
pass-through" instruments, wherein the issuing agency guarantees the payment  of
principal  and interest on mortgages underlying the certificates, whether or not
such amounts are collected by the issuer on the underlying mortgages.
 
ADJUSTABLE RATE MORTGAGE  SECURITIES.  The  Fund may also  invest in  adjustable
rate  mortgage securities  ("ARMs"), which are  pass-through mortgage securities
collateralized by  mortgages  with  adjustable rather  than  fixed  rates.  ARMs
eligible  for inclusion in a mortgage pool generally provide for a fixed initial
mortgage interest  rate for  either the  first three,  six, twelve  or  thirteen
scheduled  monthly  payments.  Thereafter,  the interest  rates  are  subject to
periodic adjustment based on changes to a designated benchmark index.
 
    ARMs contain maximum and  minimum rates beyond  which the mortgage  interest
rate  may not vary over the lifetime  of the security. In addition, certain ARMs
provide for additional limitations on the  maximum amount by which the  mortgage
interest  rate  may  adjust  for any  single  adjustment  period. Alternatively,
certain ARMs contain limitations on changes in the required monthly payment.  In
the  event that a monthly payment is not sufficient to pay the interest accruing
on an ARM, any  such excess interest  is added to the  principal balance of  the
mortgage  loan, which is repaid through  future monthly payments. If the monthly
payment for such an instrument  exceeds the sum of  the interest accrued at  the
applicable  mortgage interest  rate and the  principal payment  required at such
point to amortize the outstanding principal  balance over the remaining term  of
the  loan,  the excess  is  utilized to  reduce  the then  outstanding principal
balance of the ARM.
 
COLLATERALIZED MORTGAGE OBLIGATIONS AND MULTICLASS PASS-THROUGH
SECURITIES.  Collateralized mortgage obligations or "CMOs" are debt  obligations
collateralized by mortgage loans or mortgage pass-through securities. Typically,
CMOs are collateralized by GNMA, FNMA or FHLMC
 
                                                                               7
<PAGE>
Certificates,  but also may be collateralized by whole loans or private mortgage
pass-through securities (such collateral collectively hereinafter referred to as
"Mortgage Assets"). Multiclass pass-through securities are equity interests in a
trust composed of Mortgage Assets. Payments of principal of and interest on  the
Mortgage  Assets, and any reinvestment income  thereon, provide the funds to pay
debt service  on the  CMOs or  make scheduled  distributions on  the  multiclass
pass-through  securities. CMOs may be issued by agencies or instrumentalities of
the United States  government, or by  private originators of,  or investors  in,
mortgage  loans,  including  savings  and  loan  associations,  mortgage  banks,
commercial banks,  investment  banks and  special  purpose subsidiaries  of  the
foregoing.  However, the Fund will  only invest in CMOs  which are backed by the
full faith and credit of the United States.
 
    The issuer of  a series of  CMOs may elect  to be treated  as a Real  Estate
Mortgage  Investment  Conduit  ("REMIC").  REMICs  include  governmental  and/or
private entities that issue a fixed pool of mortgages secured by an interest  in
real property. REMICs are similar to CMOs in that they issue multiple classes of
securities,  but  unlike  CMOs, which  are  required  to be  structured  as debt
securities, REMICs  may be  structured as  indirect ownership  interests in  the
underlying assets of the REMICs themselves. However, there are no effects on the
Fund  from investing in CMOs issued by  entities that have elected to be treated
as REMICs, and all  future references to  CMOs shall also  be deemed to  include
REMICs. The Fund may invest without limitation in CMOs.
 
    In  a CMO, a series of bonds  or certificates is issued in multiple classes.
Each class of CMOs, often  referred to as a "tranche,"  is issued at a  specific
fixed  or floating coupon rate  and has a stated  maturity or final distribution
date. Principal prepayments  on the  Mortgage Assets may  cause the  CMOs to  be
retired substantially earlier than their stated maturities or final distribution
dates.  Interest is  paid or accrues  on all classes  of the CMOs  on a monthly,
quarterly or  semi-annual basis.  Certain  CMOs may  have variable  or  floating
interest  rates and  others may be  stripped (securities which  provide only the
principal or interest feature of the underlying security).
 
    The principal of and interest on the Mortgage Assets may be allocated  among
the  several classes of a  CMO series in a  number of different ways. Generally,
the purpose of the allocation of the cash  flow of a CMO to the various  classes
is to obtain a more predictable cash flow to the individual tranches than exists
with  the  underlying  collateral  of  the CMO.  As  a  general  rule,  the more
predictable the cash flow is on a  CMO tranche, the lower the anticipated  yield
will  be on that tranche  at the time of  issuance relative to prevailing market
yields on mortgage-backed securities.  As part of the  process of creating  more
predictable  cash flows on most of the tranches in a series of CMOs, one or more
tranches generally must  be created that  absorb most of  the volatility in  the
cash  flows on the underlying  mortgage loans. The yields  on these tranches are
generally higher  than prevailing  market yields  on mortgage-backed  securities
with  similar maturities. As  a result of  the uncertainty of  the cash flows of
these tranches, the market prices of  and yield on these tranches generally  are
more volatile.
 
    The  Fund also  may invest  in, among  other things,  parallel pay  CMOs and
Planned Amortization Class CMOs ("PAC Bonds"). Parallel pay CMOs are  structured
to  provide payments of principal  on each payment date  to more than one class.
These simultaneous payments  are taken  into account in  calculating the  stated
maturity date or final distribution date of each class, which, as with other CMO
structures,  must be retired  by its stated maturity  date or final distribution
date but  may be  retired earlier.  PAC Bonds  generally require  payments of  a
specified  amount  of  principal on  each  payment  date. PAC  Bonds  always are
parallel pay CMOs with the required principal payment on such securities  having
the highest priority after interest has been paid to all classes.
 
    For  a discussion of  the risks of  investing in mortgage-backed securities,
see "Risk Considerations" below.
 
    The purchase or retention of  stripped mortgage-backed securities, CMOs  and
REMICs  investments  will be  made  only in  conformity  with the  provisions of
Section 703.5 of the National Credit Union Administration Rules and Regulations,
as such provisions became effective on December 2, 1991.
 
RISK CONSIDERATIONS
 
The net asset  value of the  Fund's shares  will fluctuate with  changes in  the
market value of its portfolio securities. Neither the value nor the yield of the
U.S. Government securities invested in by the Fund (or the value or yield of the
shares  of the Fund) is guaranteed by the U.S. Government. Such values and yield
will fluctuate with changes in prevailing interest rates and other factors.
 
    Generally, as  prevailing  interest  rates  rise,  the  value  of  the  U.S.
Government  securities held by the Fund, and, concomitantly, the net asset value
of the  Fund's  shares,  will  fall.  Such  securities  with  longer  maturities
generally  tend  to produce  higher  yields and  are  subject to  greater market
fluctuation as a result of changes  in interest rates than debt securities  with
shorter   maturities.  As  noted  above,  except  with  regard  to  zero  coupon
securities, the Fund is not limited as to the maturities of the U.S.  Government
securities in which it may invest.
 
RISKS  OF MORTGAGE-BACKED  SECURITIES.  Mortgage-backed  securities have certain
different characteristics  than traditional  debt  securities. Among  the  major
differences  are that interest and principal  payments are made more frequently,
usually monthly,  and that  principal may  be prepaid  at any  time because  the
underlying  mortgage loans or other assets generally may be prepaid at any time.
As a result,  if the  Fund purchases  such a security  at a  premium, a  prepay-
 
8
<PAGE>
ment  rate that is  faster than expected  may reduce yield  to maturity, while a
pre-payment rate that is  slower than expected may  have the opposite effect  of
increasing  yield  to  maturity.  Alternatively,  if  the  Fund  purchases these
securities at a discount, faster than expected prepayments will increase,  while
slower than expected prepayments may reduce, yield to maturity.
 
    Mortgage-backed  securities,  like  all  fixed-income  securities, generally
decrease in  value as  a result  of increases  in interest  rates. In  addition,
although generally the value of fixed-income securities increases during periods
of  falling  interest rates,  mortgage-backed securities  may benefit  less than
other fixed-income securities from declining interest rates because of the  risk
of prepayments. As discussed above under "Description of GNMA Certificates," the
assumed  average life of mortgages backing  the majority of GNMA Certificates is
twelve years. This average life is  likely to be substantially shorter than  the
original maturity of the mortgage pools underlying the certificates, as a pool's
duration  may be shortened by unscheduled or  early payments of principal on the
underlying mortgages. As  prepayment rates vary  widely, it is  not possible  to
accurately predict the average life of a particular pool.
 
    Although  the extent of prepayments  on a pool of  mortgage loans depends on
various factors,  including  the prevailing  level  of interest  rates,  general
economic  conditions, the location and age of  the mortgage and other social and
demographic conditions, as  a general  rule prepayments on  fixed rate  mortgage
loans  will  increase during  a period  of falling  interest rates  and decrease
during a period of rising interest  rates. If the Fund has purchased  securities
backed by pools containing mortgages whose yields exceed the prevailing interest
rate,  any premium paid  for such securities may  be lost. As  a result, the net
asset value  of  shares of  the  Fund and  the  Fund's ability  to  achieve  its
investment  objective may be adversely affected by mortgage prepayments. Amounts
available for reinvestment by the Fund are likely to be greater during a  period
of  declining interest rates and, as a  result, likely to be reinvested at lower
interest rates than during a period of rising interest rates.
 
    There are  certain risks  associated  specifically with  CMOs. A  number  of
different  factors,  including  the extent  of  prepayment of  principal  of the
Mortgage Assets, affect the availability of  cash for principal payments by  the
CMO  issuer on any payment date and, accordingly, affect the timing of principal
payments on each CMO class.
 
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES AND FORWARD COMMITMENTS.  From  time
to time, in the ordinary course of business, the Fund may purchase securities on
a  when-issued or delayed delivery basis or may purchase or sell securities on a
forward commitment basis. When  such transactions are  negotiated, the price  is
fixed  at the time  of the commitment,  but delivery and  payment can take place
between one month and 120 days after the date of the commitment. While the  Fund
will  only purchase  securities on  a when-issued,  delayed delivery  or forward
commitment  basis  with   the  intention  of   acquiring  the  securities,   the
Fund  may  sell the  securities  before the  settlement  date, if  it  is deemed
advisable. The securities so purchased or sold are subject to market fluctuation
and no interest accrues  to the purchaser  during this period.  At the time  the
Fund  makes  the commitment  to purchase  or sell  securities on  a when-issued,
delayed delivery or forward commitment basis, it will record the transaction and
thereafter reflect the  value, each  day, of such  security purchased  or, if  a
sale,  the proceeds to be  received, in determining its  net asset value. At the
time of delivery of  the securities, their  value may be more  or less than  the
purchase  or sale price. The Fund will  also establish a segregated account with
its  custodian  bank  in  which  it  will  continually  maintain  cash  or  cash
equivalents  or  other portfolio  securities equal  in  value to  commitments to
purchase securities on  a when-issued,  delayed delivery  or forward  commitment
basis.  There is no overall  limit on the percentage  of the Fund's assets which
may be  committed  to the  purchase  of  securities on  a  when-issued,  delayed
delivery  or  forward commitment  basis. An  increase in  the percentage  of the
Fund's assets committed to the purchase of securities on a when-issued,  delayed
delivery  or forward commitment basis may  increase the volatility of the Fund's
net asset value.
 
ZERO COUPON SECURITIES.  A portion  of the U.S. Government securities  purchased
by  the Fund may be  zero coupon securities with maturity  dates in each case no
later than ten years from the settlement date for the purchase of such security.
Such securities are purchased at a  discount from their face amount, giving  the
purchaser the right to receive their full value at maturity. The interest earned
on  such securities  is, implicitly,  automatically compounded  and paid  out at
maturity. While  such compounding  at a  constant rate  eliminates the  risk  of
receiving  lower  yields upon  reinvestment of  interest if  prevailing interest
rates decline, the owner of a zero coupon security will be unable to participate
in higher  yields  upon reinvestment  of  interest received  on  interest-paying
securities if prevailing interest rates rise.
 
    A  zero coupon  security pays  no interest  to its  holder during  its life.
Therefore, to the extent the Fund invests in zero coupon securities, it will not
receive current cash  available for distribution  to shareholders. In  addition,
zero  coupon securities are subject  to substantially greater price fluctuations
during periods  of  changing  prevailing  interest  rates  than  are  comparable
securities  which  pay interest  on  a current  basis.  Current federal  tax law
requires that a holder  (such as the  Fund) of a zero  coupon security accrue  a
portion  of the discount at which the security was purchased as income each year
even though  the Fund  receives no  interest payments  in cash  on the  security
during the year.
 
    For  additional risk disclosure, please refer  to the discussion of specific
investments above in "Investment Objective and Policies."
                              -------------------
 
    Notwithstanding any other  investment policy  or restriction,  the Fund  may
seek to achieve its investment
 
                                                                               9
<PAGE>
objective  by  investing  all or  substantially  all  of its  assets  in another
investment company  having  substantially  the same  investment  objectives  and
policies as the Fund.
 
PORTFOLIO TRADING
 
The  Fund  is managed  within InterCapital's  Taxable Fixed-Income  Group, which
manages twenty-four funds and fund portfolios, with approximately $12.8  billion
in  assets  at  June  30,  1997.  Rajesh  K.  Gupta,  Senior  Vice  President of
InterCapital and a member of InterCapital's Taxable Fixed-Income Group, has been
the primary portfolio manager of the Fund since July, 1992 and has been managing
portfolios comprised  of government  securities at  InterCapital for  over  five
years.
 
    Although  the  Fund  does not  intend  to  engage in  short-term  trading of
portfolio securities as a  means of achieving its  investment objective, it  may
sell  portfolio securities without regard  to the length of  time they have been
held whenever such sale will in the Investment Manager's opinion strengthen  the
Fund's  position  and  contribute  to its  investment  objective.  The portfolio
trading engaged  in  by the  Fund  may result  in  its portfolio  turnover  rate
exceeding  100%. Brokerage commissions are not  normally charged on the purchase
or sale of U.S. Government obligations, but such transactions may involve  costs
in the form of spreads between bid and asked prices. Pursuant to an order of the
Securities  and Exchange Commission, the  Fund may effect principal transactions
in certain money market  instruments with Dean Witter  Reynolds Inc. ("DWR"),  a
broker-dealer  affiliate  of  InterCapital.  In  addition,  the  Fund  may incur
brokerage commissions on  transactions conducted through  DWR and other  brokers
and dealers that are affiliates of InterCapital.
 
PURCHASE OF FUND SHARES
- --------------------------------------------------------------------------------
 
GENERAL
 
The  Fund offers each Class of its shares for sale to the public on a continuous
basis. Pursuant to  a Distribution Agreement  between the Fund  and Dean  Witter
Distributors  Inc. (the "Distributor"), an  affiliate of the Investment Manager,
shares of the Fund  are distributed by  the Distributor and  offered by DWR  and
other  dealers  which  have entered  into  selected dealer  agreements  with the
Distributor ("Selected Broker-Dealers"). The  principal executive office of  the
Distributor is located at Two World Trade Center, New York, New York 10048.
 
    The Fund offers four classes of shares (each, a "Class"). Class A shares are
sold  to investors with an initial sales charge that declines to zero for larger
purchases; however, Class  A shares  sold without  an initial  sales charge  are
subject  to  a contingent  deferred sales  charge ("CDSC")  of 1.0%  if redeemed
within one year of purchase, except for certain specific circumstances. Class  B
shares  are  sold without  an initial  sales charge  but are  subject to  a CDSC
(scaled down from 5.0% to 1.0%)  payable upon most redemptions within six  years
after    purchase.   (Class   B   shares    purchased   by   certain   qualified
employer-sponsored benefit plans are subject to a CDSC scaled down from 2.0%  to
1.0%  if redeemed within  three years after  purchase.) Class C  shares are sold
without an  initial sales  charge but  are subject  to a  CDSC of  1.0% on  most
redemptions made within one year after purchase. Class D shares are sold without
an  initial sales charge or CDSC and  are available only to investors meeting an
initial  investment  minimum  of  $5  million,  and  to  certain  other  limited
categories of investors. At the discretion of the Board of Trustees of the Fund,
Class  A shares may be sold to categories  of investors in addition to those set
forth in this prospectus  at net asset value  without a front-end sales  charge,
and Class D shares may be sold to certain other categories of investors, in each
case  as  may be  described  in the  then current  prospectus  of the  Fund. See
"Alternative  Purchase  Arrangements--  Selecting  a  Particular  Class"  for  a
discussion  of  factors  to  consider  in selecting  which  Class  of  shares to
purchase.
 
    The minimum initial purchase  is $1,000 for each  Class of shares,  although
Class D shares are only available to persons investing $5 million or more and to
certain  other limited categories  of investors. For the  purpose of meeting the
minimum $5 million  initial investment for  Class D shares,  and subject to  the
$1,000  minimum initial  investment for  each Class  of the  Fund, an investor's
existing holdings of Class A shares of the Fund and other Dean Witter Funds that
are multiple class funds  ("Dean Witter Multi-Class Funds")  and shares of  Dean
Witter  Funds sold  with a front-end  sales charge ("FSC  Funds") and concurrent
investments in Class  D shares  of the Fund  and other  Dean Witter  Multi-Class
Funds  will be aggregated. Subsequent  purchases of $100 or  more may be made by
sending a  check,  payable to  Dean  Witter U.S.  Government  Securities  Trust,
directly  to Dean Witter Trust Company (the  "Transfer Agent") at P.O. Box 1040,
Jersey City, NJ  07303 or by  contacting an  account executive of  DWR or  other
Selected  Broker-Dealer.  When purchasing  shares  of the  Fund,  investors must
specify whether the purchase is for Class A, Class B, Class C or Class D shares.
If no Class is  specified, the Transfer Agent  will not process the  transaction
until  the proper Class is identified. The minimum initial purchase, in the case
of investments through EasyInvest, an automatic purchase plan (see  "Shareholder
Services"),  is $100, provided  that the schedule  of automatic investments will
result in investments totalling at least $1,000 within the first twelve  months.
In  the  case  of investments  pursuant  to Systematic  Payroll  Deduction Plans
(including Individual Retirement Plans), the Fund, in its discretion, may accept
investments without  regard to  any  minimum amounts  which would  otherwise  be
required,  if the  Fund has reason  to believe that  additional investments will
increase the
 
10
<PAGE>
investment in all accounts under such Plans to at least $1,000. Certificates for
shares purchased  will not  be issued  unless requested  by the  shareholder  in
writing to the Transfer Agent.
 
    Shares  of  the Fund  are sold  through  the Distributor  on a  normal three
business day settlement basis;  that is, payment generally  is due on or  before
the  third business  day (settlement  date) after the  order is  placed with the
Distributor. Shares of the Fund  purchased through the Distributor are  entitled
to dividends beginning on the next business day following settlement date. Since
DWR  and other  Selected Broker-Dealers  forward investors'  funds on settlement
date, they will benefit  from the temporary  use of the  funds where payment  is
made  prior thereto. Shares purchased through the Transfer Agent are entitled to
dividends beginning on the next business  day following receipt of an order.  As
noted  above, orders placed directly with the Transfer Agent must be accompanied
by payment. Investors will be entitled to receive capital gains distributions if
their order is received by the close of business on the day prior to the  record
date  for such  distributions. Sales personnel  of a  Selected Broker-Dealer are
compensated for selling  shares of the  Fund by  the Distributor or  any of  its
affiliates  and/or the Selected Broker-Dealer. In addition, some sales personnel
of  the  Selected   Broker-Dealer  will  receive   various  types  of   non-cash
compensation  as special  sales incentives, including  trips, educational and/or
business seminars  and merchandise.  The Fund  and the  Distributor reserve  the
right to reject any purchase orders.
 
ALTERNATIVE PURCHASE ARRANGEMENTS
 
The  Fund offers several Classes of shares to investors designed to provide them
with the flexibility of selecting an investment best suited to their needs.  The
general  public is  offered three  Classes of  shares: Class  A shares,  Class B
shares and Class C  shares, which differ principally  in terms of sales  charges
and  rate of expenses to which they are subject. A fourth Class of shares, Class
D shares,  is offered  only to  limited categories  of investors  (see "No  Load
Alternative--Class D Shares" below).
 
    Each  Class A, Class B, Class  C or Class D share  of the Fund represents an
identical interest in the investment portfolio of the Fund except that Class  A,
Class  B and Class C shares bear the expenses of the ongoing shareholder service
fees, Class B and Class C shares  bear the expenses of the ongoing  distribution
fees  and Class A,  Class B and Class  C shares which are  redeemed subject to a
CDSC bear the expense of the additional incremental distribution costs resulting
from the CDSC applicable  to shares of those  Classes. The ongoing  distribution
fees  that are imposed  on Class A, Class  B and Class C  shares will be imposed
directly against  those Classes  and not  against all  assets of  the Fund  and,
accordingly,  such charges against one Class will not affect the net asset value
of any other Class or have any impact on investors choosing another sales charge
option. See "Plan of Distribution" and "Redemptions and Repurchases."
 
    Set forth below is a summary of the differences between the Classes and  the
factors  an investor  should consider  when selecting  a particular  Class. This
summary is qualified in its entirety  by detailed discussion of each Class  that
follows this summary.
 
CLASS  A SHARES.   Class A shares  are sold at  net asset value  plus an initial
sales charge of up  to 4.25%. The  initial sales charge  is reduced for  certain
purchases.  Investments of $1 million or  more (and investments by certain other
limited categories of  investors) are not  subject to any  sales charges at  the
time  of purchase but are  subject to a CDSC of  1.0% on redemptions made within
one year  after purchase,  except for  certain specific  circumstances. Class  A
shares  are also subject to a 12b-1 fee of  up to 0.25% of the average daily net
assets of the Class. See "Initial Sales Charge Alternative--Class A Shares."
 
CLASS B SHARES.  Class B shares are  offered at net asset value with no  initial
sales  charge but  are subject  to a  CDSC (scaled  down from  5.0% to  1.0%) if
redeemed within six  years of  purchase. (Class  B shares  purchased by  certain
qualified  employer-sponsored benefit  plans are subject  to a  CDSC scaled down
from 2.0% to 1.0% if redeemed within three years after purchase.) This CDSC  may
be  waived for certain redemptions. Class B shares are also subject to an annual
12b-1 fee of 0.75% (0.65% on amounts over $10 billion) of the lesser of: (a) the
average daily  aggregate gross  sales of  the Fund's  Class B  shares since  the
inception of the Fund (not including reinvestments of dividends or capital gains
distributions),  less the average daily aggregate  net asset value of the Fund's
Class B shares redeemed since  the Fund's inception upon  which a CDSC has  been
imposed  or waived, or (b) the average daily  net assets of Class B. The Class B
shares' distribution fee will cause that  Class to have higher expenses and  pay
lower dividends than Class A or Class D shares.
 
    After   approximately  ten   (10)  years,   Class  B   shares  will  convert
automatically to Class A  shares of the  Fund, based on  the relative net  asset
values  of the shares of the two Classes  on the conversion date. In addition, a
certain  portion  of  Class  B  shares  that  have  been  acquired  through  the
reinvestment  of dividends and distributions will be converted at that time. See
"Contingent Deferred Sales Charge Alternative--Class B Shares."
 
CLASS C SHARES.   Class C  shares are sold  at net asset  value with no  initial
sales  charge but are subject  to a CDSC of 1.0%  on redemptions made within one
year after purchase. This CDSC may  be waived for certain redemptions. They  are
subject to an annual 12b-1 fee of up to 0.75% of the average daily net assets of
the Class C shares. The Class C shares' distribution fee may cause that Class to
have higher expenses and pay lower dividends than Class A or Class D shares. See
"Level Load Alternative--Class C Shares."
 
                                                                              11
<PAGE>
CLASS  D SHARES.   Class D  shares are  available only to  limited categories of
investors (see "No Load Alternative-- Class D Shares" below). Class D shares are
sold at net  asset value  with no  initial sales charge  or CDSC.  They are  not
subject to any 12b-1 fees. See "No Load Alternative-- Class D Shares."
 
SELECTING  A  PARTICULAR CLASS.    In deciding  which  Class of  Fund  shares to
purchase, investors should consider the following factors, as well as any  other
relevant facts and circumstances:
 
    The  decision as to which Class of  shares is more beneficial to an investor
depends on the amount  and intended length of  his or her investment.  Investors
who  prefer an initial  sales charge alternative  may elect to  purchase Class A
shares. Investors  qualifying  for significantly  reduced  or, in  the  case  of
purchases  of $1  million or  more, no  initial sales  charges may  find Class A
shares particularly attractive because similar  sales charge reductions are  not
available  with respect to Class  B or Class C  shares. Moreover, Class A shares
are subject to lower ongoing  expenses than are Class B  or Class C shares  over
the  term of the investment.  As an alternative, Class B  and Class C shares are
sold  without  any  initial  sales  charge  so  the  entire  purchase  price  is
immediately  invested in  the Fund.  Any investment  return on  these additional
investment amounts may partially or wholly offset the higher annual expenses  of
these  Classes. Because the  Fund's future return  cannot be predicted, however,
there can be no assurance that this would be the case.
 
    Finally, investors should  consider the effect  of the CDSC  period and  any
conversion  rights of the  Classes in the  context of their  own investment time
frame. For example, although Class C shares are subject to a significantly lower
CDSC upon redemptions, they do not, unlike Class B shares, convert into Class  A
shares  after approximately ten years, and, therefore, are subject to an ongoing
12b-1 fee of 0.75% (rather than the 0.25% fee applicable to Class A shares)  for
an  indefinite period of time. Thus, Class  B shares may be more attractive than
Class C  shares  to  investors  with  longer  term  investment  outlooks.  Other
investors,  however, may elect to purchase Class  C shares if, for example, they
determine that they do not  wish to be subject to  a front-end sales charge  and
they are uncertain as to the length of time they intend to hold their shares.
 
    For  the purpose  of meeting  the $5  million minimum  investment amount for
Class D shares, holdings of Class A shares in all Dean Witter Multi-Class Funds,
shares of FSC Funds and shares of  Dean Witter Funds for which such shares  have
been exchanged will be included together with the current investment amount.
 
    Sales personnel may receive different compensation for selling each Class of
shares.  Investors should understand that  the purpose of a  CDSC is the same as
that of the initial sales  charge in that the  sales charges applicable to  each
Class provide for the financing of the distribution of shares of that Class.
 
    Set  forth  below is  a chart  comparing  the sales  charge, 12b-1  fees and
conversion options applicable to each Class of shares:
 
<TABLE>
<CAPTION>
                                                   CONVERSION
  CLASS          SALES CHARGE         12b-1 FEE      FEATURE
<C>        <S>                        <C>        <C>
    A      Maximum 4.25% initial        0.25%          No
           sales charge reduced for
           purchases of $25,000 and
           over; shares sold without
           an initial sales charge
           generally subject to a
           1.0% CDSC during first
           year.
    B      Maximum 5.0% CDSC during   0.75%      B shares
           the first year decreasing  (0.65% on  convert to A
           to 0 after six years       amounts    shares
                                      over $10   automatically
                                      billion)   after
                                                 approximately
                                                 ten years
    C      1.0% CDSC during first       0.75%          No
           year
    D                None               None           No
</TABLE>
 
    See "Purchase  of Fund  Shares" and  "The  Fund and  its Management"  for  a
complete  description of the sales charges and service and distribution fees for
each Class  of  shares  and  "Determination of  Net  Asset  Value,"  "Dividends,
Distributions  and  Taxes"  and "Shareholder  Services--Exchange  Privilege" for
other differences between the Classes of shares.
 
INITIAL SALES CHARGE ALTERNATIVE-- CLASS A SHARES
 
Class A shares are sold at net asset value plus an initial sales charge. In some
cases, reduced sales charges may  be available, as described below.  Investments
of  $1 million or more  (and investments by certain  other limited categories of
investors) are not subject to any sales charges at the time of purchase but  are
subject  to a CDSC  of 1.0% on  redemptions made within  one year after purchase
(calculated from the last day of the month in which the shares were  purchased),
except  for  certain specific  circumstances. The  CDSC will  be assessed  on an
amount equal to the lesser of the current market value or the cost of the shares
being redeemed. The CDSC will not be imposed (i) in the circumstances set  forth
below  in  the section  "Contingent Deferred  Sales Charge  Alternative--Class B
Shares-- CDSC Waivers,"  except that the  references to six  years in the  first
paragraph of that section shall mean one year in the case of Class A shares, and
(ii)  in the circumstances identified in the section "Additional Net Asset Value
Purchase Options" below. Class A shares are also subject to an annual 12b-1  fee
of up to 0.25% of the average daily net assets of the Class.
 
    The  offering price of Class A shares will  be the net asset value per share
next determined following receipt of
 
12
<PAGE>
an order (see  "Determination of Net  Asset Value" below),  plus a sales  charge
(expressed  as a percentage  of the offering  price) on a  single transaction as
shown in the following table:
 
<TABLE>
<CAPTION>
                                         SALES CHARGE
                             -------------------------------------
                               PERCENTAGE OF       APPROXIMATE
         AMOUNT OF            PUBLIC OFFERING     PERCENTAGE OF
    SINGLE TRANSACTION             PRICE         AMOUNT INVESTED
- ---------------------------  -----------------  ------------------
<S>                          <C>                <C>
Less than $25,000..........          4.25%               4.44%
$25,000 but less
  than $50,000.............          4.00%               4.17%
$50,000 but less
  than $100,000............          3.50%               3.63%
$100,000 but less
  than $250,000............          2.75%               2.83%
$250,000 but less
  than $1 million..........          1.75%               1.78%
$1 million and over........             0                   0
</TABLE>
 
    Upon notice to all Selected  Broker-Dealers, the Distributor may reallow  up
to  the  full applicable  sales charge  as  shown in  the above  schedule during
periods specified in such notice. During periods  when 90% or more of the  sales
charge   is  reallowed,  such  Selected  Broker-Dealers  may  be  deemed  to  be
underwriters as that term is defined in the Securities Act of 1933.
 
    The above schedule of sales charges  is applicable to purchases in a  single
transaction  by, among others: (a) an individual;  (b) an individual, his or her
spouse and their children under the age of 21 purchasing shares for his, her  or
their  own accounts; (c)  a trustee or  other fiduciary purchasing  shares for a
single trust estate or a single fiduciary account; (d) a pension, profit-sharing
or other employee benefit plan qualified  or non-qualified under Section 401  of
the  Internal Revenue Code;  (e) tax-exempt organizations  enumerated in Section
501(c)(3) or  (13) of  the Internal  Revenue Code;  (f) employee  benefit  plans
qualified under Section 401 of the Internal Revenue Code of a single employer or
of  employers who are "affiliated  persons" of each other  within the meaning of
Section 2(a)(3)(c)  of the  Act; and  for investments  in Individual  Retirement
Accounts  of employees of a single employer through Systematic Payroll Deduction
plans; or (g) any other organized group of persons, whether incorporated or not,
provided the organization has been in existence for at least six months and  has
some  purpose other than  the purchase of redeemable  securities of a registered
investment company at a discount.
 
COMBINED PURCHASE PRIVILEGE.   Investors may have the  benefit of reduced  sales
charges  in accordance with the above schedule by combining purchases of Class A
shares of the Fund in single transactions with the purchase of Class A shares of
other Dean Witter Multi-Class  Funds and shares of  FSC Funds. The sales  charge
payable on the purchase of the Class A shares of the Fund, the Class A shares of
the  other Dean Witter Multi-Class Funds and the shares of the FSC Funds will be
at their  respective  rates applicable  to  the  total amount  of  the  combined
concurrent purchases of such shares.
 
RIGHT  OF  ACCUMULATION.   The above  persons  and entities  may benefit  from a
reduction of the  sales charges  in accordance with  the above  schedule if  the
cumulative  net asset value of Class A shares purchased in a single transaction,
together with  shares  of  the  Fund and  other  Dean  Witter  Funds  previously
purchased at a price including a front-end sales charge (including shares of the
Fund  and other  Dean Witter  Funds acquired in  exchange for  those shares, and
including in each  case shares  acquired through reinvestment  of dividends  and
distributions),  which  are held  at the  time of  such transaction,  amounts to
$25,000 or more. If such investor has a cumulative net asset value of shares  of
FSC  Funds and Class  A and Class  D shares equal  to at least  $5 million, such
investor is eligible to  purchase Class D shares  subject to the $1,000  minimum
initial  investment  requirement  of  that  Class  of  the  Fund.  See  "No Load
Alternative--Class D Shares" below.
 
    The Distributor must be notified by  DWR or a Selected Broker-Dealer or  the
shareholder  at the time a purchase order  is placed that the purchase qualifies
for the reduced  charge under  the Right of  Accumulation. Similar  notification
must  be made  in writing  by the dealer  or shareholder  when such  an order is
placed by  mail. The  reduced sales  charge will  not be  granted if:  (a)  such
notification  is not furnished at the time of  the order; or (b) a review of the
records of the Selected Broker-Dealer or the Transfer Agent fails to confirm the
investor's represented holdings.
 
LETTER OF INTENT.  The foregoing schedule of reduced sales charges will also  be
available  to investors who enter into a  written Letter of Intent providing for
the purchase, within a thirteen-month period, of Class A shares of the Fund from
DWR or other Selected Broker-Dealers. The cost of Class A shares of the Fund  or
shares  of other Dean  Witter Funds which  were previously purchased  at a price
including a front-end sales charge during the 90-day period prior to the date of
receipt by the Distributor of the Letter of Intent, or of Class A shares of  the
Fund  or shares of  other Dean Witter  Funds acquired in  exchange for shares of
such funds purchased during such period  at a price including a front-end  sales
charge,  which  are still  owned by  the  shareholder, may  also be  included in
determining the applicable reduction.
 
ADDITIONAL NET ASSET VALUE PURCHASE OPTIONS.   In addition to investments of  $1
million  or more, Class A shares also may be purchased at net asset value by the
following:
 
    (1) trusts for which Dean Witter Trust Company ("DWTC") or Dean Witter Trust
FSB ("DWTFSB")  (each  of which  is  an  affiliate of  the  Investment  Manager)
provides discretionary trustee services;
 
    (2)   persons  participating  in   a  fee-based  program   approved  by  the
Distributor, pursuant to which such persons pay an asset based fee for  services
in   the  nature  of  investment   advisory  or  administrative  services  (such
investments are subject  to all of  the terms and  conditions of such  programs,
which  may include termination fees and  restrictions on transferability of Fund
shares);
 
                                                                              13
<PAGE>
    (3) retirement plans qualified under Section 401(k) of the Internal  Revenue
Code ("401(k) plans") and other employer-sponsored plans qualified under Section
401(a) of the Internal Revenue Code with at least 200 eligible employees and for
which  DWTC or DWTFSB serves as Trustee  or the 401(k) Support Services Group of
DWR serves as recordkeeper;
 
    (4) 401(k) plans and other employer-sponsored plans qualified under  Section
401(a)  of the Internal Revenue Code for  which DWTC or DWTFSB serves as Trustee
or the 401(k) Support Services Group of DWR serves as recordkeeper whose Class B
shares have converted to Class A shares, regardless of the plan's asset size  or
number of eligible employees;
 
    (5)  investors who are clients of a Dean Witter account executive who joined
Dean Witter from another investment firm within six months prior to the date  of
purchase  of Fund shares  by such investors,  if the shares  are being purchased
with the proceeds from a redemption of shares of an open-end proprietary  mutual
fund  of the account executive's previous  firm which imposed either a front-end
or deferred sales  charge, provided  such purchase  was made  within sixty  days
after  the redemption and the proceeds of  the redemption had been maintained in
the interim in cash or a money market fund; and
 
    (6) other  categories of  investors,  at the  discretion  of the  Board,  as
disclosed in the then current prospectus of the Fund.
 
    No  CDSC  will be  imposed on  redemptions of  shares purchased  pursuant to
paragraphs (1), (2) or (5), above.
 
    For further information concerning purchases  of the Fund's shares,  contact
DWR  or another  Selected Broker-Dealer or  consult the  Statement of Additional
Information.
 
CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE--CLASS B SHARES
 
Class B shares are sold  at net asset value  next determined without an  initial
sales  charge so that the  full amount of an  investor's purchase payment may be
immediately invested in the Fund. A CDSC, however, will be imposed on most Class
B shares redeemed within six years after  purchase. The CDSC will be imposed  on
any redemption of shares if after such redemption the aggregate current value of
a  Class  B  account with  the  Fund falls  below  the aggregate  amount  of the
investor's purchase payments for Class B  shares made during the six years  (or,
in  the case of  shares held by certain  employer-sponsored benefit plans, three
years) preceding the redemption. In addition,  Class B shares are subject to  an
annual  12b-1 fee of 0.75% (0.65% on amounts over $10 billion) of the lesser of:
(a) the average daily aggregate gross sales  of the Fund's Class B shares  since
the  inception of the Fund (not  including reinvestments of dividends or capital
gains distributions), less the  average daily aggregate net  asset value of  the
Fund's  Class B shares redeemed since the Fund's inception upon which a CDSC has
been imposed or waived, or (b) the average daily net assets of Class B.
 
    Except as noted below,  Class B shares  of the Fund which  are held for  six
years or more after purchase (calculated from the last day of the month in which
the  shares were  purchased) will  not be subject  to any  CDSC upon redemption.
Shares redeemed earlier than six years  after purchase may, however, be  subject
to a CDSC which will be a percentage of the dollar amount of shares redeemed and
will be assessed on an amount equal to the lesser of the current market value or
the  cost of the shares being redeemed.  The size of this percentage will depend
upon how long the shares have been held, as set forth in the following table:
 
<TABLE>
<CAPTION>
               YEAR SINCE                 CDSC AS A PERCENTAGE
         PURCHASE PAYMENT MADE             OF AMOUNT REDEEMED
- ----------------------------------------  ---------------------
<S>                                       <C>
First...................................             5.0%
Second..................................             4.0%
Third...................................             3.0%
Fourth..................................             2.0%
Fifth...................................             2.0%
Sixth...................................             1.0%
Seventh and thereafter..................             None
</TABLE>
 
    In the case  of Class B  shares of the  Fund held by  401(k) plans or  other
employer-sponsored  plans qualified under Section 401(a) of the Internal Revenue
Code for which DWTC or DWTFSB serves  as Trustee or the 401(k) Support  Services
Group  of DWR serves as  recordkeeper and whose accounts  are opened on or after
July 28, 1997, shares held for three years or more after purchase (calculated as
described in  the  paragraph  above)  will  not be  subject  to  any  CDSC  upon
redemption. However, shares redeemed earlier than three years after purchase may
be  subject to  a CDSC  (calculated as  described in  the paragraph  above), the
percentage of which will depend  on how long the shares  have been held, as  set
forth in the following table:
 
<TABLE>
<CAPTION>
               YEAR SINCE                 CDSC AS A PERCENTAGE
         PURCHASE PAYMENT MADE             OF AMOUNT REDEEMED
- ----------------------------------------  ---------------------
<S>                                       <C>
First...................................             2.0%
Second..................................             2.0%
Third...................................             1.0%
Fourth and thereafter...................             None
</TABLE>
 
CDSC WAIVERS.  A CDSC will not be imposed on: (i) any amount which represents an
increase  in value of shares purchased within the  six years (or, in the case of
shares held by certain employer-sponsored benefit plans, three years)  preceding
the  redemption; (ii) the current net asset  value of shares purchased more than
six years (or, in the case of shares held by certain employer-sponsored  benefit
plans,  three years) prior  to the redemption;  and (iii) the  current net asset
value of shares  purchased through  reinvestment of  dividends or  distributions
and/or shares acquired in
 
14
<PAGE>
exchange  for shares  of FSC  Funds or  of other  Dean Witter  Funds acquired in
exchange for such shares. Moreover, in determining whether a CDSC is  applicable
it  will be assumed that amounts described in (i), (ii) and (iii) above (in that
order) are redeemed first.
 
    In addition, the CDSC, if otherwise  applicable, will be waived in the  case
of:
 
    (1)  redemptions of shares  held at the  time a shareholder  dies or becomes
disabled, only  if the  shares are:  (A) registered  either in  the name  of  an
individual  shareholder (not a trust),  or in the names  of such shareholder and
his or her spouse as joint tenants with right of survivorship; or   (B) held  in
a  qualified corporate  or self-employed retirement  plan, Individual Retirement
Account ("IRA") or  Custodial Account  under Section 403(b)(7)  of the  Internal
Revenue  Code ("403(b)  Custodial Account"),  provided in  either case  that the
redemption is requested within one year of the death or initial determination of
disability;
 
    (2)  redemptions   in  connection   with  the   following  retirement   plan
distributions:   (A) lump-sum or other  distributions from a qualified corporate
or self-employed retirement plan following retirement (or, in the case of a "key
employee" of a  "top heavy" plan,  following attainment of  age 59 1/2);     (B)
distributions  from an IRA  or 403(b) Custodial  Account following attainment of
age 59 1/2; or   (C) a tax-free return of an excess contribution to an IRA; and
 
    (3) all redemptions of  shares held for  the benefit of  a participant in  a
401(k)  plan or other employer-sponsored plan  qualified under Section 401(a) of
the Internal  Revenue Code  which  offers investment  companies managed  by  the
Investment  Manager or  its subsidiary,  Dean Witter  Services Company  Inc., as
self-directed investment alternatives  and for  which DWTC or  DWTFSB serves  as
Trustee  or  the 401(k)  Support Services  Group of  DWR serves  as recordkeeper
("Eligible Plan"),  provided  that either:  (A)  the  plan continues  to  be  an
Eligible  Plan after the  redemption; or    (B) the  redemption is in connection
with the complete termination of the plan involving the distribution of all plan
assets to participants.
 
    With reference to (1) above, for the purpose of determining disability,  the
Distributor  utilizes the definition of disability contained in Section 72(m)(7)
of the  Internal Revenue  Code, which  relates  to the  inability to  engage  in
gainful  employment. With reference  to (2) above,  the term "distribution" does
not encompass a direct transfer of  IRA, 403(b) Custodial Account or  retirement
plan  assets to a  successor custodian or  trustee. All waivers  will be granted
only following receipt by the  Distributor of confirmation of the  shareholder's
entitlement.
 
CONVERSION  TO CLASS A  SHARES.  All shares  of the Fund held  prior to July 28,
1997 (other than shares  held by certain employee  benefit plans established  by
DWR  and its  affiliate, SPS  Transaction Services,  Inc.) have  been designated
Class B shares. Shares held before May 1, 1997 that have been designated Class B
shares will convert to Class A shares in May, 2007. In all other instances Class
B shares will convert automatically to Class A shares, based on the relative net
asset values of the shares of the two Classes on the conversion date, which will
be approximately ten (10) years after the date of the original purchase. The ten
year period is calculated  from the last  day of the month  in which the  shares
were purchased or, in the case of Class B shares acquired through an exchange or
a  series of  exchanges, from the  last day of  the month in  which the original
Class B shares were purchased, provided that shares originally purchased  before
May  1, 1997  will convert  to Class A  shares in  May, 2007.  The conversion of
shares purchased on or after May 1, 1997 will take place in the month  following
the tenth anniversary of the purchase. There will also be converted at that time
such  proportion of  Class B shares  acquired through  automatic reinvestment of
dividends and distributions owned by the shareholder as the total number of  his
or  her Class  B shares  converting at  the time  bears to  the total  number of
outstanding Class B shares purchased and  owned by the shareholder. In the  case
of  Class  B shares  held  by a  401(k)  plan or  other  employer-sponsored plan
qualified under Section 401(a) of the  Internal Revenue Code and for which  DWTC
or  DWTFSB serves as Trustee or the  401(k) Support Services Group of DWR serves
as recordkeeper, the plan is treated as a single investor and all Class B shares
will convert to Class A shares on the  conversion date of the first shares of  a
Dean  Witter Multi-Class  Fund purchased by  that plan.  In the case  of Class B
shares previously exchanged for shares  of an "Exchange Fund" (see  "Shareholder
Services--Exchange  Privilege"), the period of time  the shares were held in the
Exchange Fund (calculated from the last day  of the month in which the  Exchange
Fund  shares were acquired) is excluded  from the holding period for conversion.
If those  shares are  subsequently re-exchanged  for Class  B shares  of a  Dean
Witter Multi-Class Fund, the holding period resumes on the last day of the month
in which Class B shares are reacquired.
 
    If  a shareholder has  received share certificates for  Class B shares, such
certificates must be delivered to the Transfer Agent at least one week prior  to
the date for conversion. Class B shares evidenced by share certificates that are
not  received by the  Transfer Agent at  least one week  prior to any conversion
date will be converted into Class A shares on the next scheduled conversion date
after such certificates are received.
 
    Effectiveness of  the  conversion  feature  is  subject  to  the  continuing
availability  of  a ruling  of the  Internal  Revenue Service  or an  opinion of
counsel that (i) the  conversion of shares does  not constitute a taxable  event
under the Internal Revenue Code, (ii) Class A shares received on conversion will
have  a basis equal to  the shareholder's basis in  the converted Class B shares
immediately prior  to the  conversion,  and (iii)  Class  A shares  received  on
conversion  will have a holding  period that includes the  holding period of the
converted Class B shares. The conversion feature may be suspended if the  ruling
or opinion is no longer
 
                                                                              15
<PAGE>
available. In such event, Class B shares would continue to be subject to Class B
12b-1 fees.
 
    Class  B shares purchased before  July 28, 1997 by  trusts for which DWTC or
DWTFSB provides discretionary trustee services will convert to Class A shares on
or about August 29, 1997. The CDSC will not be applicable to such shares.
 
LEVEL LOAD ALTERNATIVE-- CLASS C SHARES
 
Class C shares are sold  at net asset value  next determined without an  initial
sales  charge but are subject to a CDSC  of 1.0% on most redemptions made within
one year after purchase (calculated from the last day of the month in which  the
shares  were purchased).  The CDSC will  be assessed  on an amount  equal to the
lesser of the current market value or the cost of the shares being redeemed. The
CDSC will not be  imposed in the  circumstances set forth  above in the  section
"Contingent  Deferred Sales Charge Alternative--  Class B Shares--CDSC Waivers,"
except that the references to six years  in the first paragraph of that  section
shall mean one year in the case of Class C shares. Class C shares are subject to
an annual 12b-1 fee of up to 0.75% of the average daily net assets of the Class.
Unlike  Class  B  shares,  Class  C  shares  have  no  conversion  feature  and,
accordingly, an investor that purchases Class C shares will be subject to  12b-1
fees  applicable to Class  C shares for  an indefinite period  subject to annual
approval by the Fund's Board of Trustees and regulatory limitations.
 
NO LOAD ALTERNATIVE-- CLASS D SHARES
 
Class D shares are  offered without any sales  charge on purchase or  redemption
and  without any 12b-1 fee. Class D shares are offered only to investors meeting
an initial investment  minimum of  $5 million  and the  following categories  of
investors:  (i) investors  participating in  the InterCapital  mutual fund asset
allocation program pursuant to which such  persons pay an asset based fee;  (ii)
persons  participating  in  a  fee-based program  approved  by  the Distributor,
pursuant to which such persons pay an asset based fee for services in the nature
of investment advisory or administrative services  (subject to all of the  terms
and  conditions  of  such  programs,  which  may  include  termination  fees and
restrictions on transferability of Fund shares); (iii) 401(k) plans  established
by  DWR  and SPS  Transaction Services,  Inc.  (an affiliate  of DWR)  for their
employees; (iv) certain  Unit Investment  Trusts sponsored by  DWR; (v)  certain
other  open-end  investment  companies  whose  shares  are  distributed  by  the
Distributor; and (vi) other  categories of investors, at  the discretion of  the
Board,  as disclosed in the  then current prospectus of  the Fund. Shares of the
Fund held by the employee benefit plans referred to in clause (iii) above  prior
to July 28, 1997 have been designated Class D shares. Investors who require a $5
million  minimum initial  investment to qualify  to purchase Class  D shares may
satisfy that requirement  by investing that  amount in a  single transaction  in
Class  D shares of the Fund and  other Dean Witter Multi-Class Funds, subject to
the $1,000 minimum initial  investment required for that  Class of the Fund.  In
addition,  for the purpose of meeting  the $5 million minimum investment amount,
holdings of Class A shares in all  Dean Witter Multi-Class Funds, shares of  FSC
Funds  and shares of Dean Witter Funds for which such shares have been exchanged
will be included together with the  current investment amount. If a  shareholder
redeems  Class A shares and  purchases Class D shares,  such redemption may be a
taxable event.
 
PLAN OF DISTRIBUTION
 
The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the Act
with respect to the distribution of Class A,  Class B and Class C shares of  the
Fund. In the case of Class A and Class C shares, the Plan provides that the Fund
will reimburse the Distributor and others for the expenses of certain activities
and   services  incurred  by  them  specifically  on  behalf  of  those  shares.
Reimbursements for these expenses will be  made in monthly payments by the  Fund
to  the Distributor, which will in no  event exceed amounts equal to payments at
the annual rates of 0.25% and 0.75% of  the average daily net assets of Class  A
and Class C, respectively. In the case of Class B shares, the Plan provides that
the  Fund  will pay  the  Distributor a  fee, which  is  accrued daily  and paid
monthly, at the annual rate of 0.75% (0.65% on amounts over $10 billion) of  the
lesser  of: (a) the  average daily aggregate  gross sales of  the Fund's Class B
shares since the inception of the Fund (not including reinvestments of dividends
or capital  gains distributions),  less the  average daily  aggregate net  asset
value  of the  Fund's Class  B shares redeemed  since the  Fund's inception upon
which a CDSC has been imposed or waived, or (b) the average daily net assets  of
Class B. The fee is treated by the Fund as an expense in the year it is accrued.
In the case of Class A shares, the entire amount of the fee currently represents
a  service fee within the meaning of the NASD guidelines. In the case of Class B
and Class C shares, a portion of the fee payable pursuant to the Plan, equal  to
0.20%  and  0.25% of  the average  daily net  assets of  each of  these Classes,
respectively, is currently characterized  as a service fee.  A service fee is  a
payment  made  for  personal  service  and/or  the  maintenance  of  shareholder
accounts.
 
    Additional amounts paid under the  Plan in the case of  Class B and Class  C
shares  are paid to the Distributor for services provided and the expenses borne
by the  Distributor  and others  in  the distribution  of  the shares  of  those
Classes,  including the payment of commissions for  sales of the shares of those
Classes and incentive compensation to  and expenses of DWR's account  executives
and  others  who engage  in or  support  distribution of  shares or  who service
 
16
<PAGE>
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 utilize fees paid  pursuant to the Plan in  the case of Class  B
shares to compensate DWR and other Selected Broker-Dealers for their opportunity
costs  in advancing such amounts,  which compensation would be  in the form of a
carrying charge on any unreimbursed expenses.
 
    For the fiscal  year ended December  31, 1996,  Class B shares  of the  Fund
accrued  payments under the Plan amounting to $53,189,389, which amount is equal
to 0.75%  of the  Fund's  average daily  net assets  for  the fiscal  year.  The
payments  accrued under the Plan  were calculated pursuant to  clause (b) of the
compensation formula under  the Plan.  All shares held  prior to  July 28,  1997
(other than shares held by certain employee benefit plans established by DWR and
its  affiliate, SPS  Transaction Services,  Inc.) have  been designated  Class B
shares.
 
    In the  case  of  Class  B  shares, at  any  given  time,  the  expenses  in
distributing Class B shares of the Fund may be in excess of the total of (i) the
payments  made by the Fund pursuant to the  Plan, and (ii) the proceeds of CDSCs
paid by investors  upon the redemption  of Class  B shares. For  example, if  $1
million in expenses in distributing Class B shares of the Fund had been incurred
and  $750,000 had been received  as described in (i)  and (ii) above, the excess
expense would amount to $250,000. The Distributor has advised the Fund that such
excess  amounts,  including  the  carrying  charge  described  above,   totalled
$68,120,003  at December 31, 1996, which was equal to 1.06% of the net assets of
the Fund on such date. Because there  is no requirement under the Plan that  the
Distributor  be reimbursed for all distribution expenses or any requirement that
the Plan be continued from year to year, such excess amount does not  constitute
a  liability of the Fund. 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 CDSCs 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.  Any cumulative expenses incurred,
but not yet  recovered through distribution  fees or  CDSCs, may or  may not  be
recovered through future distribution fees or CDSCs.
 
    In the case of Class A and Class C shares, expenses incurred pursuant to the
Plan  in any calendar year in excess of  0.25% or 0.75% 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 commission credited
to account executives at the  time of sale may  be reimbursed in the  subsequent
calendar  year. No interest or  other financing charges will  be incurred on any
Class A or Class C distribution  expenses incurred by the Distributor under  the
Plan  or on  any unreimbursed  expenses due to  the Distributor  pursuant to the
Plan.
 
DETERMINATION OF NET ASSET VALUE
 
The net asset value per  share is determined once daily  at 4:00 p.m., New  York
time (or, on days when the New York Stock Exchange closes prior to 4:00 p.m., at
such  earlier time),  on each day  that the New  York Stock Exchange  is open by
taking the net assets of the Fund, dividing by the number of shares  outstanding
and adjusting to the nearest cent. The assets belonging to the Class A, Class B,
Class  C and Class D shares will be invested together in a single portfolio. The
net asset  value  of each  Class,  however,  will be  determined  separately  by
subtracting  each Class's accrued expenses and  liabilities. The net asset value
per share will not be  determined on Good Friday and  on such other federal  and
non-federal holidays as are observed by the New York Stock Exchange.
 
    In  the  calculation  of  the  Fund's net  asset  value:  (1)  all portfolio
securities for which  over-the-counter market quotations  are readily  available
are  valued  at  the bid  price;  (2)  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  Fund's Board  of  Trustees (valuation  of  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  (3)  short-term instruments  having  a
maturity  date of more than  sixty days are valued  on a "mark-to-market" basis,
that is, at prices  based on market quotations  for securities of similar  type,
yield,  quality and maturity, until sixty  days prior to maturity and thereafter
at amortized cost. Short-term instruments having  a maturity date of sixty  days
or less at the time of purchase are valued at amortized cost unless the Board of
Trustees determines this does not represent fair market value.
 
    Certain  of  the Fund's  portfolio securities  may be  valued by  an outside
pricing service approved by the Fund's Trustees. The pricing service may utilize
a matrix  system incorporating  security  quality, maturity  and coupon  as  the
evaluation model parameters, and/or research evaluations by its staff, including
review of broker-dealer market price quotations, in determining what it believes
is  the  fair  valuation of  the  portfolio  securities valued  by  such pricing
 
service.
 
                                                                              17
<PAGE>
SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
 
AUTOMATIC INVESTMENT OF DIVIDENDS AND DISTRIBUTIONS.  All dividends and  capital
gains  distributions are automatically paid in full and fractional shares of the
applicable Class of the Fund (or, if specified by the shareholder, in shares  of
any  other open-end Dean Witter Fund), unless the shareholder requests that they
be paid in cash. Shares so acquired are acquired at net asset value and are  not
subject  to  the  imposition  of  a  front-end  sales  charge  or  a  CDSC  (see
"Redemptions and Repurchases"). Such dividends  and distributions will be  paid,
at  the net asset value per share, in shares of the applicable Class of the Fund
(or in cash if the shareholder so  requests) on the monthly payment date,  which
generally will be no later than the last business day of the month for which the
dividend  or  distribution  is  payable. Processing  of  dividend  checks begins
immediately following the monthly payment date. Shareholders who have  requested
to  receive dividends in cash will normally receive their monthly dividend check
during the first ten days of the following month.
 
INVESTMENT OF DIVIDENDS AND DISTRIBUTIONS RECEIVED IN CASH.  Any shareholder who
receives a cash payment
representing a dividend or capital gains distribution may
invest such dividend or  distribution in shares of  the applicable Class at  the
net  asset value per share next determined  after receipt by the Transfer Agent,
by returning the check or the proceeds to the Transfer Agent within thirty  days
after  the payment date. Shares so acquired  are acquired at net asset value and
are not subject to  the imposition of  a front-end sales charge  or a CDSC  (see
"Redemptions and Repurchases").
 
EASYINVEST-SM-.  Shareholders may subscribe to EasyInvest, an automatic purchase
plan  which  provides for  any  amount from  $100  to $5,000  to  be transferred
automatically from  a checking  or savings  account or  following redemption  of
shares  of  a Dean  Witter  money market  fund,  on a  semi-monthly,  monthly or
quarterly basis, to the Transfer Agent for investment in shares of the Fund (see
"Purchase  of  Fund  Shares"   and  "Redemptions  and   Repurchases--Involuntary
Redemption").
 
SYSTEMATIC  WITHDRAWAL  PLAN.   A  systematic withdrawal  plan  (the "Withdrawal
Plan") is available  for shareholders  who own or  purchase shares  of the  Fund
having  a minimum value of $10,000 based  upon the then current net asset value.
The Withdrawal Plan provides  for monthly or  quarterly (March, June,  September
and  December) checks in any  dollar amount, not less than  $25, or in any whole
percentage of the account balance, on  an annualized basis. Any applicable  CDSC
will  be imposed on shares redeemed under  the Withdrawal Plan (See "Purchase of
Fund Shares"). Therefore, any shareholder  participating in the Withdrawal  Plan
will  have  sufficient shares  redeemed  from his  or  her account  so  that the
proceeds (net of any applicable CDSC) to the shareholder will be the  designated
monthly  or quarterly amount. Withdrawal plan  payments should not be considered
as  dividends,  yields   or  income.  If   periodic  withdrawal  plan   payments
continuously   exceed  net  investment   income  and  net   capital  gains,  the
shareholder's original investment will be correspondingly reduced and ultimately
exhausted. Each withdrawal constitutes  a redemption of shares  and any gain  or
loss realized must be recognized for federal income tax purposes.
 
    Shareholders  should  contact  their  DWR  or  other  Selected Broker-Dealer
account executive or the Transfer Agent for further information about any of the
above services.
 
TAX SHELTERED  RETIREMENT PLANS.   Retirement  plans are  available for  use  by
corporations,  the self-employed,  Individual Retirement  Accounts and Custodial
Accounts under Section 403(b)(7) of the Internal Revenue Code. Adoption of  such
plans should be on advice of legal counsel or tax adviser.
 
    For  further information  regarding plan administration,  custodial fees and
other details, investors should contact their account executive or the  Transfer
Agent.
 
EXCHANGE PRIVILEGE
 
Shares  of each Class may be exchanged for shares of the same Class of any other
Dean Witter Multi-Class Fund without the imposition of any exchange fee.  Shares
may  also be exchanged for shares of the following funds: Dean Witter Short-Term
U.S. Treasury  Trust, Dean  Witter  Limited Term  Municipal Trust,  Dean  Witter
Short-Term Bond Fund, Dean Witter Intermediate Term U.S. Treasury Trust and five
Dean  Witter funds which are money market  funds (the "Exchange Funds"). Class A
shares may also  be exchanged for  shares of Dean  Witter Multi-State  Municipal
Series Trust and Dean Witter Hawaii Municipal Trust, which are Dean Witter Funds
sold  with a front-end  sales charge ("FSC  Funds"). Class B  shares may also be
exchanged for shares  of Dean Witter  Global Short-Term Income  Fund Inc.,  Dean
Witter  High Income Securities  and Dean Witter  National Municipal Trust, which
are Dean Witter Funds offered with a CDSC ("CDSC Funds"). Exchanges may be  made
after  the shares of the Fund acquired  by purchase (not by exchange or dividend
reinvestment) have been  held for thirty  days. There is  no waiting period  for
exchanges of shares acquired by exchange or dividend reinvestment.
 
    An  exchange to another Dean Witter Multi-Class Fund, any FSC Fund, any CDSC
Fund or any Exchange Fund that is not a money market fund is on the basis of the
next calculated net asset value per share of each fund after the exchange  order
is  received. When exchanging into a money  market fund from the Fund, shares of
the Fund are redeemed out of the  Fund at their next calculated net asset  value
and  the proceeds  of the redemption  are used  to purchase shares  of the money
market fund at their  net asset value determined  the following day.  Subsequent
exchanges  between any  of the  money market  funds and  any of  the Dean Witter
Multi-Class Funds, FSC Funds or CDSC Funds
 
18
<PAGE>
or any Exchange Fund that is not a money market fund can be effected on the same
basis.
 
    No CDSC is  imposed at  the time  of any  exchange of  shares, although  any
applicable  CDSC will be imposed upon  ultimate redemption. During the period of
time the shareholder remains in an  Exchange Fund (calculated from the last  day
of  the month  in which  the Exchange  Fund shares  were acquired),  the holding
period (for the purpose of determining the rate of the CDSC) is frozen. If those
shares are subsequently  re-exchanged for  shares of a  Dean Witter  Multi-Class
Fund  or shares of  a CDSC Fund,  the holding period  previously frozen when the
first exchange was made resumes on the last day of the month in which shares  of
a  Dean Witter Multi-Class Fund  or shares of a  CDSC fund are reacquired. Thus,
the CDSC is based upon the time (calculated as described above) the  shareholder
was  invested in shares of a Dean Witter Multi-Class Fund or in shares of a CDSC
fund (see "Purchase of Fund Shares"). In the case of exchanges of Class A shares
which are  subject  to  a  CDSC,  the holding  period  also  includes  the  time
(calculated  as described above) the shareholder was invested in shares of a FSC
Fund. However, in the case of shares exchanged into an Exchange Fund on or after
April 23,  1990, upon  a redemption  of shares  which results  in a  CDSC  being
imposed,  a credit (not  to exceed the amount  of the CDSC) will  be given in an
amount equal to the Exchange Fund  12b-1 distribution fees incurred on or  after
that  date  which  are  attributable  to  those  shares.  (Exchange  Fund  12b-1
distribution fees are described  in the prospectuses for  those funds.) Class  B
shares  of the  Fund acquired  in exchange  for Class  B shares  of another Dean
Witter Multi-Class  Fund  or shares  of  a CDSC  Fund  having a  different  CDSC
schedule  than that of  this Fund will  be subject to  the higher CDSC schedule,
even if such shares  are subsequently re-exchanged for  shares of the fund  with
the lower CDSC schedule.
 
ADDITIONAL  INFORMATION REGARDING EXCHANGES.   Purchases and exchanges should be
made for investment purposes only. A pattern of frequent exchanges may be deemed
by the Investment Manager to  be abusive and contrary  to the best interests  of
the  Fund's other shareholders and, at  the Investment Manager's discretion, may
be limited by the Fund's refusal to accept additional purchases and/or exchanges
from the investor. Although  the Fund does not  have any specific definition  of
what constitutes a pattern of frequent exchanges, and will consider all relevant
factors in determining whether a particular situation is abusive and contrary to
the  best interests of the Fund and  its other shareholders, investors should be
aware that  the Fund  and each  of  the other  Dean Witter  Funds may  in  their
discretion  limit  or  otherwise  restrict the  number  of  times  this Exchange
Privilege may be exercised by any investor. Any such restriction will be made by
the Fund on a prospective basis only,  upon notice to the shareholder not  later
than  ten  days following  such shareholder's  most  recent exchange.  Also, the
Exchange Privilege may be terminated or revised  at any time by the Fund  and/or
any  of such Dean Witter Funds for which shares of the Fund have been exchanged,
upon  such  notice  as  may  be  required  by  applicable  regulatory  agencies.
Shareholders   maintaining  margin   accounts  with  DWR   or  another  Selected
Broker-Dealer are referred to their account executive regarding restrictions  on
exchange of shares of the Fund pledged in the margin account.
 
    The  current prospectus for each  fund describes its investment objective(s)
and policies, and  shareholders should obtain  a copy and  examine it  carefully
before investing. Exchanges are subject to the minimum investment requirement of
each  Class of Shares and any other conditions imposed by each fund. In the case
of a shareholder holding a share  certificate or certificates, no exchanges  may
be  made  until all  applicable  share certificates  have  been received  by the
Transfer Agent and deposited in the  shareholder's account. An exchange will  be
treated  for federal income tax purposes the  same as a repurchase or redemption
of shares, on which the shareholder may realize a capital gain or loss. However,
the ability to deduct capital losses on an exchange may be limited in situations
where there is an  exchange of shares  within ninety days  after the shares  are
purchased.  The Exchange Privilege is only available in states where an exchange
may legally be made.
 
    If DWR or another Selected Broker-Dealer is the current dealer of record and
its account  numbers  are part  of  the account  information,  shareholders  may
initiate  an exchange of shares of the Fund for shares of any of the Dean Witter
Funds (for which the Exchange Privilege is available) pursuant to this  Exchange
Privilege   by  contacting  their  account   executive  (no  Exchange  Privilege
Authorization Form is required). Other shareholders (and those shareholders  who
are  clients  of DWR  or another  Selected  Broker-Dealer but  who wish  to make
exchanges directly by writing or  telephoning the Transfer Agent) must  complete
and  forward to  the Transfer  Agent an  Exchange Privilege  Authorization Form,
copies of  which  may  be obtained  from  the  Transfer Agent,  to  initiate  an
exchange. If the Authorization Form is used, exchanges may be made in writing or
by contacting the Transfer Agent at (800) 869-NEWS (toll-free).
 
    The  Fund  will  employ  reasonable  procedures  to  confirm  that  exchange
instructions communicated over  the telephone are  genuine. Such procedures  may
include requiring various forms of personal identification such as name, mailing
address,  social security  or other tax  identification number and  DWR or other
Selected Broker-Dealer account number (if any). Telephone instructions may  also
be recorded. If such procedures are not employed, the Fund may be liable for any
losses due to unauthorized or fraudulent instructions.
 
    Telephone exchange instructions will be accepted if received by the Transfer
Agent  between 9:00 a.m. and 4:00  p.m., New York time, on  any day the New York
Stock   Exchange   is    open.   Any    shareholder   wishing    to   make    an
 
                                                                              19
<PAGE>
exchange  who has previously filed an  Exchange Privilege Authorization Form and
who is unable to reach  the Fund by telephone should  contact his or her DWR  or
other  Selected  Broker-Dealer  account  executive, if  appropriate,  or  make a
written exchange  request.  Shareholders  are advised  that  during  periods  of
drastic  economic or market changes, it  is possible that the telephone exchange
procedures may be
difficult to implement, although this has not been the case with the Dean Witter
Funds in the past.
 
    Shareholders should  contact  their  DWR  or  other  Selected  Broker-Dealer
account  executive  or  the Transfer  Agent  for further  information  about the
Exchange Privilege.
 
REDEMPTIONS AND REPURCHASES
- --------------------------------------------------------------------------------
 
REDEMPTION.  Shares of each  Class of the Fund can  be redeemed for cash at  any
time  at the net  asset value per share  next determined less  the amount of any
applicable CDSC in the case of Class A, Class B or Class C shares (see "Purchase
of Fund Shares"). If shares are held in a shareholder's account without a  share
certificate,  a written request  for redemption to the  Fund's Transfer Agent at
P.O. Box 983, Jersey City, NJ 07303 is required. If certificates are held by the
shareholder, the shares may be redeemed by surrendering the certificates with  a
written  request for redemption, along  with any additional information required
by the Transfer Agent.
 
REPURCHASE.  DWR and other Selected Broker-Dealers are authorized to  repurchase
shares  represented by a  share certificate which  is delivered to  any of their
offices. Shares held in a shareholder's account without a share certificate  may
also be repurchased by DWR and other Selected Broker-Dealers upon the telephonic
request  of the shareholder.  The repurchase price  is the net  asset value next
computed (see "Purchase of Fund Shares") after such repurchase order is received
by DWR or other Selected Broker-Dealer reduced by any applicable CDSC.
 
    The CDSC, if any, will be the only fee imposed by the Fund, the Distributor,
DWR or  other Selected  Broker-Dealers.  The offer  by  DWR and  other  Selected
Broker-Dealers  to repurchase shares may be  suspended without notice by them at
any time. In that event, shareholders may redeem their shares through the Fund's
Transfer Agent as set forth above under "Redemption."
 
PAYMENT FOR SHARES REDEEMED  OR REPURCHASED.  Payment  for shares presented  for
repurchase  or redemption will be made by  check within seven days after receipt
by the Transfer Agent of the  certificate and/or written request in good  order.
Such payment may be postponed or the right of redemption suspended under unusual
circumstances,  e.g., when normal  trading is not  taking place on  the New York
Stock Exchange. If  the shares to  be redeemed have  recently been purchased  by
check,  payment of the redemption  proceeds may be delayed  for the minimum time
needed to verify that the check used  for investment has been honored (not  more
than  fifteen days from the time of receipt of the check by the Transfer Agent).
Shareholders  maintaining  margin   accounts  with  DWR   or  another   Selected
Broker-Dealer  are referred to their account executive regarding restrictions on
redemption of shares of the Fund pledged in the margin account.
 
REINSTATEMENT PRIVILEGE.  A shareholder who  has had his or her shares  redeemed
or  repurchased and  has not  previously exercised  this reinstatement privilege
may, within 35 days  after the date of  the redemption or repurchase,  reinstate
any portion or all of the proceeds of such redemption or repurchase in shares of
the  Fund in the same Class from which such shares were redeemed or repurchased,
at their net asset value next determined after a reinstatement request, together
with the proceeds,  is received by  the Transfer  Agent and receive  a pro  rata
credit for any CDSC paid in connection with such redemption or repurchase.
 
INVOLUNTARY  REDEMPTION.  The Fund reserves the right, on sixty days' notice, to
redeem, at their  net asset  value, the shares  of any  shareholder (other  than
shares  held  in an  Individual Retirement  Account  or Custodial  Account under
Section 403(b)(7) of the Internal Revenue Code) whose shares due to  redemptions
by  the shareholder have a value of less than $100, or such lesser amount as may
be fixed  by  the  Trustees  or,  in the  case  of  an  account  opened  through
EasyInvest, if after twelve months the shareholder has invested less than $1,000
in  the account.  However, before  the Fund  redeems such  shares and  sends the
proceeds to the shareholder,  it will notify the  shareholder that the value  of
the  shares is less than  the applicable amount and  allow the shareholder sixty
days to make an additional investment in an amount which will increase the value
of his or her account to at least the applicable amount before the redemption is
processed. No CDSC will be imposed on any involuntary redemption.
 
DIVIDENDS, DISTRIBUTIONS AND TAXES
- --------------------------------------------------------------------------------
 
DIVIDENDS AND DISTRIBUTIONS.   The Fund declares  dividends separately for  each
Class  of  shares from  net investment  income on  each day  the New  York Stock
Exchange is open  for business  to shareholders  of record  as of  the close  of
business  the preceding business day. The  amount of dividend may fluctuate from
day to day.  Such dividends  are paid monthly.  The Fund  intends to  distribute
substantially all of its net investment income on an annual basis.
 
20
<PAGE>
    The  Fund may distribute quarterly net realized short-term capital gains, if
any, in excess of any net realized long-term capital losses. The Fund intends to
distribute dividends from  net long-term capital  gains, if any,  at least  once
each  year. The Fund may, however,  elect to retain all or  a portion of any net
long-term capital gains in any year for reinvestment.
 
    All dividends and any capital gains distributions will be paid in additional
shares of the same Class and automatically credited to the shareholder's account
without issuance  of a  share  certificate unless  the shareholder  requests  in
writing  that all dividends or all dividends  and distributions be paid in cash.
Shares acquired by dividend and  distribution reinvestments will not be  subject
to  any front-end sales charge or CDSC. Class B shares acquired through dividend
and distribution reinvestments will  become eligible for  conversion to Class  A
shares  on a pro  rata basis. Distributions paid  on Class A  and Class D shares
will be higher than  for Class B  and Class C  shares because distribution  fees
paid   by  Class   B  and   Class  C   shares  are   higher.  (See  "Shareholder
Services--Automatic Investment of Dividends and Distributions".)
 
TAXES.  Because  the Fund  intends to distribute  substantially all  of its  net
investment  income and net short-term capital gains to shareholders and continue
to qualify as a regulated investment company under Subchapter M of the  Internal
Revenue  Code, it  is not  expected that the  Fund will  be required  to pay any
federal income tax on such income and capital gains.
 
    Shareholders who are  required to pay  taxes on their  income will  normally
have  to pay federal income taxes, and  any applicable state and/or local income
taxes, on  the dividends  and distributions  they receive  from the  Fund.  Such
dividends  and  distributions, to  the  extent that  they  are derived  from net
investment  income  and  net  short-term  capital  gains,  are  taxable  to  the
shareholder  as ordinary dividend  income regardless of  whether the shareholder
receives such  distributions in  additional  shares or  in cash.  Any  dividends
declared  in  the  last quarter  of  any calendar  year  which are  paid  in the
following year prior to  February 1 will  be deemed, for  tax purposes, to  have
been received by the shareholder in the prior year.
 
    Distributions  of  net  long-term  capital gains,  if  any,  are  taxable to
shareholders as long-term capital gains regardless of how long a shareholder has
held the Fund's shares and regardless of whether the distribution is received in
additional shares or in cash. Capital  gains distributions are not eligible  for
the corporate dividends received deduction.
 
    The  Fund may at times  make payments from sources  other than income or net
capital gains. Payments from such sources  would, in effect, represent a  return
of  a  portion of  each shareholder's  investment.  All, or  a portion,  of such
payments would not be taxable to shareholders.
 
    After the  end  of  the  calendar  year,  shareholders  will  be  sent  full
information on their dividends and capital gains distributions for tax purposes.
To  avoid  being subject  to a  31%  federal backup  withholding tax  on taxable
dividends, capital  gains  distributions and  the  proceeds of  redemptions  and
repurchases, shareholders' taxpayer identification numbers must be furnished and
certified as to accuracy.
 
    The   foregoing  discussion  relates  solely   to  the  federal  income  tax
consequences of an investment in the Fund. Distributions may also be subject  to
state  and local taxes; therefore, each shareholder is advised to consult his or
her own tax adviser.
 
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
 
From time to time  the Fund may  quote its "yield"  and/or its"total return"  in
advertisements  and sales literature. These  figures are computed separately for
Class A, Class  B, Class  C and Class  D shares.  Both the yield  and the  total
return  of the  Fund are based  on historical  earnings and are  not intended to
indicate future performance. The yield of each Class of the Fund is computed  by
dividing  the Class's net investment  income over a 30-day  period by an average
value (using the average number of shares entitled to receive dividends and  the
maximum  offering price per share  at the end of  the period), all in accordance
with applicable  regulatory  requirements. Such  amount  is compounded  for  six
months  and then annualized for a twelve-month period to derive the Fund's yield
for each Class.
 
    The "average annual total return" of the Fund refers to a figure  reflecting
the  average annualized  percentage increase  (or decrease)  in the  value of an
initial investment in a Class  of the Fund of $1,000  over periods of one,  five
and  ten years. Average  annual total return  reflects all income  earned by the
Fund, any  appreciation  or depreciation  of  the Fund's  assets,  all  expenses
incurred  by the applicable Class and all  sales charges which would be incurred
by shareholders, for  the stated periods.  It also assumes  reinvestment of  all
dividends and distributions paid by the Fund.
 
    In  addition to the foregoing,  the Fund may advertise  its total return for
each Class over different  periods of time by  means of aggregate, average,  and
year-by-year  or other types  of total return figures.  Such calculations may or
may not reflect  the deduction of  any sales charge  which, if reflected,  would
reduce  the  performance  quoted. The  Fund  may  also advertise  the  growth of
hypothetical investments  of $10,000,  $50,000  and $100,000  in each  Class  of
shares  of  the  Fund.  The  Fund  from time  to  time  may  also  advertise its
performance relative to  certain performance  rankings and  indexes compiled  by
independent organizations.
 
                                                                              21
<PAGE>
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
 
VOTING  RIGHTS.  All shares of beneficial interest  of the Fund are of $0.01 par
value and are  equal as to  earnings, assets and  voting privileges except  that
each  Class  will  have  exclusive voting  privileges  with  respect  to matters
relating to distribution expenses borne solely by such Class or any other matter
in which the  interests of  one Class  differ from  the interests  of any  other
Class.  In addition,  Class B shareholders  will have  the right to  vote on any
proposed material increase in Class A's expenses, if such proposal is  submitted
separately  to Class A shareholders. Also, as discussed herein, Class A, Class B
and Class C bear  the expenses related to  the distribution of their  respective
shares.
 
    The  Fund is  not required  to hold Annual  Meetings of  Shareholders and in
ordinary circumstances  the Fund  does not  intend to  hold such  meetings.  The
Trustees  may call  Special Meetings of  Shareholders for  action by shareholder
vote as may be required  by the Act or the  Declaration of Trust. Under  certain
circumstances  the Trustees may be  removed by action of  the Trustees or by the
shareholders.
 
    Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of  the
Fund.  However,  the  Declaration of  Trust  contains an  express  disclaimer of
shareholder liability for acts  or obligations of the  Fund, requires that  Fund
obligations  include  such  disclaimer,  and  provides  for  indemnification and
reimbursement of expenses out  of the Fund's property  for any shareholder  held
personally  liable  for  the  obligations  of the  Fund.  Thus,  the  risk  of a
shareholder incurring  financial loss  on account  of shareholder  liability  is
limited  to circumstances in which  the Fund itself would  be unable to meet its
obligations. Given the above limitations on shareholder personal liability,  and
the  nature of  the Fund's  assets and operations,  the possibility  of the Fund
being unable  to  meet  its  obligations  is  remote  and,  in  the  opinion  of
Massachusetts  counsel to  the Fund, the  risk to Fund  shareholders of personal
liability is remote.
 
CODE OF ETHICS.  Directors, officers and employees of InterCapital, Dean  Witter
Services Company Inc. and the Distributor are subject to a strict Code of Ethics
adopted  by those companies. The  Code of Ethics is  intended to ensure that the
interests of shareholders  and other clients  are placed ahead  of any  personal
interest,  that no undue personal benefit is obtained from a person's employment
activities and that actual and potential  conflicts of interest are avoided.  To
achieve  these goals and comply with regulatory requirements, the Code of Ethics
requires, among other things, that personal securities transactions by employees
of the companies be subject to an  advance clearance process to monitor that  no
Dean  Witter Fund is engaged at the same time  in a purchase or sale of the same
security. The  Code of  Ethics bans  the purchase  of securities  in an  initial
public offering, and also prohibits engaging in futures and options transactions
and  profiting on short-term trading (that is, a purchase within sixty days of a
sale or a  sale within sixty  days of a  purchase) of a  security. In  addition,
investment  personnel may  not purchase  or sell  a security  for their personal
account within thirty days  before or after any  transaction in any Dean  Witter
Fund  managed  by them.  Any violations  of the  Code of  Ethics are  subject to
sanctions,  including  reprimand,  demotion  or  suspension  or  termination  of
employment.  The Code  of Ethics comports  with regulatory  requirements and the
recommendations in the 1994 report by the Investment Company Institute  Advisory
Group on Personal Investing.
 
MASTER/FEEDER  CONVERSION.  The Fund  reserves the right to  seek to achieve its
investment objective by investing all of its investable assets in a diversified,
open-end management investment company having the same investment objective  and
policies  and substantially the same investment restrictions as those applicable
to the Fund.
 
SHAREHOLDER INQUIRIES.  All inquiries regarding  the Fund should be directed  to
the  Fund at the  telephone numbers or address  set forth on  the front cover of
this Prospectus.
 
22
<PAGE>
DEAN WITTER
U.S. GOVERNMENT SECURITIES TRUST
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
 
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
Barry Fink
Vice President, Secretary and
General Counsel
Rajesh K. Gupta
Vice President
Thomas F. Caloia
Treasurer
 
CUSTODIAN
The Bank of New York
90 Washington Street
New York, New York 10286
 
TRANSFER AGENT AND
DIVIDEND DISBURSING 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.


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