UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the period ended June 30, 1997 or
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ________________to_____________.
Commission file number 0-13298
DEAN WITTER CORNERSTONE FUND II
(Exact name of registrant as specified in its charter)
New York 13-3212871
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification
No.)
c/o Demeter Management Corporation
Two World Trade Center, 62 Fl., New York, NY 10048
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 392-5454
(Former name, former address, and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND II
INDEX TO QUARTERLY REPORT ON FORM 10-Q
June 30, 1997
<CAPTION>
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements
Statements of Financial Condition
June 30, 1997 (Unaudited) and December 31, 1996...........2
Statements of Operations for the Quarters Ended
June 30, 1997 and 1996 (Unaudited)........................3
Statements of Operations for the Six Months Ended
June 30, 1997 and 1996 (Unaudited)........................4
Statements of Changes in Partners' Capital for
the Six Months Ended June 30, 1997 and 1996
(Unaudited)...............................................5
Statements of Cash Flows for the Six Months Ended
June 30, 1997 and 1996 (Unaudited)........................6
Notes to Financial Statements (Unaudited)..............7-12
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..............13-18
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...............................19-20
Item 5. Other Information..................................20
Item 6. Exhibits and Reports on Form 8-K...................
21
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND II
STATEMENTS OF FINANCIAL CONDITION
<CAPTION>
June 30, December 31,
1997 1996
$ $
(Unaudited)
ASSETS
<S> <C> <C>
Equity in Commodity futures trading accounts:
Cash 27,340,953 28,509,266
Net unrealized gain on open contracts 982,807 1,316,434
Total Trading Equity 28,323,760 29,825,700
Interest receivable (DWR) 94,147 97,815
Due from DWR 29,619 123,327
Total Assets 28,447,526 30,046,842
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Redemptions payable 262,003 442,706
Accrued management fees 94,094 99,352
Accrued brokerage commissions (DWR) 81,257 83,967
Accrued incentive fees 70,267 316,750
Common administrative expenses payable37,789 52,339
Accrued transaction fees and costs 6,254 5,558
Total Liabilities 551,664 1,000,672
Partners' Capital
Limited Partners (8,303.660 and
8,987.942 Units, respectively) 27,184,148 28,360,195
General Partner (217.400 Units) 711,714 685,975
Total Partners' Capital 27,895,862 29,046,170
Total Liabilities and Partners' Capital28,447,526 30,046,842
NET ASSET VALUE PER UNIT 3,273.76 3,155.36
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND II
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Quarters Ended June 30,
1997 1996
$ $
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized (650,484) 1,399,854
Net change in unrealized (364,330) 269,774
Total Trading Results (1,014,814) 1,669,628
Interest Income (DWR) 308,278 301,188
Total Revenues (706,536) 1,970,816
EXPENSES
Brokerage commissions (DWR) 373,812 462,457
Management fees 281,865 293,628
Transaction fees and costs 32,684 38,424
Administrative expenses 10,297 2,843
Incentive fees (257,021) -
Total Expenses 441,637 797,352
NET INCOME (LOSS) (1,148,173)1,173,464
NET INCOME (LOSS) ALLOCATION
Limited Partners (1,119,354)1,149,227
General Partner (28,819) 24,237
NET INCOME (LOSS) PER UNIT
Limited Partners (132.56) 111.49
General Partner (132.56) 111.49
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND II
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Six Months Ended June 30,
1997 1996
$ $
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized 2,263,382 2,187,355
Net change in unrealized (333,627) (1,305,646)
Total Trading Results 1,929,755 881,709
Interest Income (DWR) 628,176 600,791
Total Revenues 2,557,931 1,482,500
EXPENSES
Brokerage commissions (DWR) 662,114 915,764
Management fees 566,449 593,095
Incentive fees 92,628 -
Transaction fees and costs 61,846 77,861
Administrative expenses 21,824 5,498
Total Expenses 1,404,861 1,592,218
NET INCOME (LOSS) 1,153,070 (109,718)
NET INCOME (LOSS) ALLOCATION
Limited Partners 1,127,331 (108,072)
General Partner 25,739 (1,646)
NET INCOME (LOSS) PER UNIT
Limited Partners 118.40 (7.57)
General Partner 118.40 (7.57)
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND II
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Six Months Ended June 30, 1997 and 1996
(Unaudited)
<CAPTION>
Units of
Partnership Limited General
Interest Partners Partner Total
<S> <C> <C> <C>
<C>
Partners' Capital,
December 31, 1995 10,891.098 $30,213,505 $615,383 $30,828,888
Offering if Units 45.006 124,554 - 124,554
Net Loss - (108,072) (1,646) (109,718)
Redemptions (683.945) (1,901,106) -
(1,901,106)
Partners' Capital,
June 30, 1996 10,252.159 $28,328,881 $613,737 $28,942,618
Partners' Capital,
December 31, 1996 9,205.342 $28,360,195 $685,975
$29,046,170
Offering of Units 91.201 304,200 -
304,200
Net Income - 1,127,331 25,739 1,153,0
70
Redemptions (775.483) (2,607,578) -
(2,607,578)
Partners' Capital,
June 30, 1997 8,521.060 $27,184,148 $711,714 $27,895,862
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER CORNERSTONE FUND II
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
For the Six Months Ended June 30,
1997 1996
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) 1,153,070 (109,718)
Noncash item included in net income (loss):
Net change in unrealized 333,627 1,305,646
(Increase) decrease in operating assets:
Interest receivable (DWR) 3,668 7,864
Due from DWR 93,708 (75,808)
Increase (decrease) in operating liabilities:
Accrued management fees (5,258) (7,648)
Accrued brokerage commissions (DWR) (2,710)10,661
Accrued incentive fees (246,483) (307,567)
Common administrative expenses payable (14,550) (33,347)
Accrued transaction fees and costs 696 932
Net cash provided by operating activities1,315,768 791,015
CASH FLOWS FROM FINANCING ACTIVITIES
Offering of units 304,200 124,554
Increase (decrease) in redemptions payable(180,703) 102,392
Redemptions of units (2,607,578)(1,901,106)
Net cash used for financing activities(2,484,081)(1,674,160)
Net decrease in cash (1,168,313) (883,145)
Balance at beginning of period 28,509,266 28,057,189
Balance at end of period 27,340,953 27,174,044
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
DEAN WITTER CORNERSTONE FUND II
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
The financial statements include, in the opinion of management,
all adjustments necessary for a fair presentation of the results
of operations and financial condition. The financial statements
and condensed notes herein should be read in conjunction with the
Partnership's December 31, 1996 Annual Report on Form 10-K.
1. Organization
Dean Witter Cornerstone Fund II (the "Partnership") is a limited
partnership organized to engage in the speculative trading of
commodity futures contracts and forward contracts on foreign
currencies (collectively, "futures interests") . The Partnership
is one of the Dean Witter Cornerstone Funds, comprised of Dean
Witter Cornerstone Fund II, Dean Witter Cornerstone Fund III, and
Dean Witter Cornerstone Fund IV. The general partner for the
Partnership is Demeter Management Corporation ("Demeter"). The
commodity broker is Dean Witter Reynolds Inc. ("DWR"). Through
March 1, 1997, the trading advisors who made all trading
decisions for the Partnership were Northfield Trading L.P.
("Northfield") and John W. Henry & Company, Inc. ("JWH"). Prior
to March 1, 1997, Abacus was a trading advisor to the
Partnership. Effective April 16, 1997 the assets previously
managed by Abacus Asset Management Corporation ("Abacus") were
reallocated to Northfield. Both Demeter and DWR are wholly owned
subsidiaries of Morgan Stanley, Dean Witter, Discover & Co.
("MSDWD").
<PAGE>
DEAN WITTER CORNERSTONE FUND II
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. Related Party Transactions
The Partnership's cash is on deposit with DWR in commodity
trading accounts to meet margin requirements as needed. DWR pays
interest on these funds based on current 13-week U.S. Treasury
Bill rates. Brokerage expenses incurred by the Partnership are
paid to DWR.
3. Financial Instruments
The Partnership trades futures and forward contracts in interest
rates, stock indices, commodities, currencies, petroleum and
precious metals. Futures and forwards represent contracts for
delayed delivery of an instrument at a specific date and price.
Risk arises from changes in the value of these contracts and the
potential inability of counterparties to perform under the terms
of the contracts. There are numerous factors which may
significantly influence the market value of these contracts,
including interest rate volatility. At June 30, 1997 and
December 31, 1996, open contracts were:
Contract or Notional Amount
June 30, 1997 December 31, 1996
$ $
Exchange-Traded Contracts
Financial Futures:
Commitments to Purchase 77,485,000 18,287,000
Commitments to Sell 11,948,000 70,723,000
Commodity Futures:
Commitments to Purchase 6,098,000 6,346,000
Commitments to Sell 27,543,000 14,596,000
Foreign Futures:
Commitments to Purchase 27,339,000 57,075,000
Commitments to Sell 12,526,000 8,798,000
Off-Exchange-Traded
Forward Currency Contracts
Commitments to Purchase 23,196,000 26,688,000
Commitments to Sell 16,561,000 18,334,000
<PAGE>
DEAN WITTER CORNERSTONE FUND II
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
A portion of the amounts indicated as off-balance-sheet risk in
forward currency contracts is due to offsetting forward
commitments to purchase and to sell the same currency on the same
date in the future. These commitments are economically
offsetting, but are not offset in the forward market until the
settlement date.
The net unrealized gains on open contracts are reported as a
component of "Equity in Commodity futures trading accounts" on
the Statements of Financial Condition and totaled $982,807 and
$1,316,434 at June 30, 1997 and December 31, 1996, respectively.
Of the $982,807 net unrealized gain on open contracts at June 30,
1997, $1,030,961 related to exchange-traded futures contracts and
$(48,154) related to off-exchange-traded forward currency
contracts. Of the $1,316,434 net unrealized gain on open
contracts at December 31, 1996, $1,342,050 related to exchange-
traded futures contracts and $(25,616) related to off-exchange-
traded forward currency contracts.
Exchange-traded-futures contracts held by the Partnership at June
30, 1997 and December 31, 1996 both mature through June 1998.
Off-exchange-traded forward currency contracts held by the
Partnership at June 30, 1997 and December 31, 1996 mature through
September 1997 and March 1997, respectively. The contract
amounts in the above table represent the Partnership's extent of
involvement in the particular class of financial instrument, but
<PAGE>
DEAN WITTER CORNERSTONE FUND II
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
not the credit risk associated with counterparty nonperformance.
The credit risk associated with these instruments is limited to
the amounts reflected in the Partnership's Statements of
Financial Condition.
The Partnership also has credit risk because DWR acts as the
futures commission merchant or the sole counterparty, with
respect to most of the Partnership's assets. Exchange-traded
futures contracts are marked to market on a daily basis, with
variations in value settled on a daily basis. DWR, as the
futures commission merchant for all of the Partnership's exchange-
traded futures contracts, is required pursuant to regulations of
the Commodity Futures Trading Commission ("CFTC") to segregate
from its own assets and for the sole benefit of its commodity
customers all funds held by DWR with respect to exchange-traded
futures contracts including an amount equal to the net unrealized
gain on all open futures contracts, which funds totaled
$28,371,914 and $29,851,316 at June 30, 1997 and December 31,
1996, respectively. With respect to the Partnership's off-
exchange-traded forward currency forward contracts, there are no
daily settlements of variations in value nor is there any
requirement that an amount equal to the net unrealized gain on
open forward contracts be segregated. With respect to those off-
exchange-traded forward currency contracts, the Partnership is at
risk to the ability of DWR, the counterparty on all of such
contracts, to perform.
<PAGE>
DEAN WITTER CORNERSTONE FUND II
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For the six months ended June 30, 1997 and the year ended
December 31, 1996, the average fair value of financial
instruments held for trading purposes was as follows:
June 30, 1997
Assets Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 24,758,000 32,658,000
Commodity Futures 13,478,000 14,301,000
Foreign Futures 27,185,000 8,258,000
Off-Exchange-Traded Forward
Currency Contracts 34,160,000 37,837,000
December 31, 1996
Assets Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 48,469,000 47,433,000
Commodity Futures 24,459,000 22,228,000
Foreign Futures 43,821,000 14,875,000
Off-Exchange-Traded Forward
Currency Contracts 38,522,000 44,536,000
4. Subsequent Event
On July 31, 1997, DWR closed the sale of its institutional
futures business and foreign currency trading operations to Carr
Futures
Inc. ("Carr"), a subsidiary of Credit Agricole Indosuez.
Following the sale, Carr became the counterparty on the
Partnership's foreign currency trades. However, during a
transition period of about three months, DWR will continue to
perform certain services relating to the Partnership's futures
<PAGE>
DEAN WITTER CORNERSTONE FUND II
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
trading including clearance. After such transition period, DWR
will continue to serve as a futures broker for the Partnership
with Carr providing execution and clearing services for the
Partnership's account.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity. The Partnership's assets are deposited in futures
interest trading accounts with DWR, and are used by the
Partnership as margin to engage in futures interest trading. DWR
holds such assets in either designated depositories or in
securities approved by the CFTC for investment of customer funds.
The Partnership's assets held by DWR may be used as margin solely
for the Partnership's trading. Since the Partnership's sole
purpose is to trade in futures interests, it is expected that the
Partnership will continue to own such liquid assets for margin
purposes.
The Partnership's investment in futures interests may, from time
to time, be illiquid. Most United States futures exchanges limit
fluctuations in certain futures interest prices during a single
day by regulations referred to as "daily price fluctuations
limits" or "daily limits. Pursuant to such regulations, during a
single trading day no trades may be executed at prices beyond the
daily limit. If the price for a particular futures has increased
or decreased by an amount equal to the "daily limit", positions
in such futures interest can neither be taken nor liquidated
unless traders are willing to effect trades at or within the
limit. Futures interest prices have occasionally moved the daily
limit for several consecutive days with little or no trading.
Such market conditions could prevent the Partnership from
promptly liquidating its futures interests and result in
<PAGE>
restrictions on redemptions. However, since the commencement of
trading by the Partnership, there has never been a time when
illiquidity has affected a material portion of the Partnership's
assets.
There is no limitation on daily price moves in trading forward
contracts on foreign currency. The markets for some world
currencies have low trading volume and are illiquid, which may
prevent the Partnership from trading in profitable markets or
prevent the Partnership from promptly liquidating unfavorable
positions in such markets and subjecting it to substantial
losses. Either of these market conditions could result in
restrictions on redemptions.
Capital Resources. The Partnership does not have, nor does it
expect to have, any capital assets. Redemptions and sales of
additional Units of Limited Partnership Interest in the future
will affect the amount of funds available for investments in
futures interests in subsequent periods. As redemptions are at
the discretion of Limited Partners, it is not possible to
estimate the amount and therefore the impact of future
redemptions.
Results of Operations
For the Quarter and Six Months Ended June 30, 1997
For the quarter ended June 30, 1997, the Partnership's total
trading losses net of interest income were $706,536. During the
<PAGE>
second quarter, the Partnership posted a decrease in Net Asset
Value per Unit. Losses were recorded in the energy markets from
trading crude oil futures as oil prices moved in a short-term
volatile pattern during the quarter. Additional losses were
recorded in the currency markets during May from transactions
involving the Japanese yen as its value moved without consistent
direction. Smaller losses were experienced during May from short
positions in the Singapore dollar as its value increased relative
to the U.S. dollar. Long Japanese bond futures positions
resulted in smaller losses as prices moved lower During April.
These losses were partially offset by gains recorded from long
positions in Australian interest rate and global stock index
futures as prices in these markets moved higher during May and
June. Additional gains were recorded in the metals markets from
short gold futures positions as precious metals prices decreased
during June. Smaller gains were recorded in the soft commodities
markets from long coffee futures positions as coffee prices
trended higher during April and May. Total expenses for the
period were $441,637, resulting in a net loss of $1,148,173. The
value of an individual Unit in the Partnership decreased from
$3,406.32 at March 31, 1997 to $3,273.76 at June 30, 1997.
For the six months ended June 30, 1997, the Partnership's total
trading revenues including interest income were $2,557,931.
During the first six months of the year, the Partnership posted
an increase in Net Asset Value per Unit. The most significant
trading gains were recorded from a strong upward trend in the
<PAGE>
value of the U.S. dollar versus most major world currencies
during January and February. Additional gains were recorded from
long coffee futures positions as prices trended higher from
January through May. In the metals markets, profits were
recorded from short gold futures positions as gold prices moved
sharply lower during January and June. Long positions in soybean
and corn futures resulted in additional profits as prices in
these markets trended higher during March. Additional gains were
recorded in these same markets during June from short positions
as prices moved lower. A portion of the Partnership's overall
gains was offset by losses recorded from trading crude oil
futures as oil prices moved in a short-term volatile pattern
throughout a majority of the first half of the year. Losses were
also recorded in the financial futures markets as global bond
futures prices moved in a trendless pattern during the second
quarter. Gains recorded during May and June from long positions
in Australian interest rate futures and global stock index
futures, as prices in these markets trended higher, helped to
mitigate a portion of these losses. The total expenses for the
period were $1,404,861, resulting in net income of $1,153,070.
The value of an individual Unit in the Partnership increased from
$3,155.36 at December 31, 1996 to $3,273.76 at June 30, 1997.
For the Quarter and Six Months Ended June 30, 1996
For the quarter ended June 30, 1996 the Partnership's total
trading revenues including interest income were $1,970,816.
During the second quarter, the Partnership posted an increase in
<PAGE>
Net Asset Value per Unit. The most significant trading gains
were recorded in the currency markets during April as the value
of the Swiss franc, German mark and French franc moved lower
relative to the U.S. dollar. As a result, the Partnership
profited from short positions in these currencies. Additional
gains were recorded from short Japanese yen positions during May
and June as the value of the yen moved lower versus the U.S.
dollar from late May through June. Trading gains were also
recorded in the agricultural markets from long positions in corn,
wheat and soybean futures as prices moved higher. In metals,
short copper futures positions profited during June as prices
moved sharply lower on news of significant losses incurred in
copper by Sumitomo Corporation. Smaller gains were recorded from
short positions in silver and gold futures as precious metals
prices also moved lower during June. These gains were partially
offset by losses recorded from financial futures trading as non-
U.S. interest rate and Australian stock index futures prices
moved in a trendless pattern throughout the quarter. Smaller
losses were recorded in the energy markets during May. Total
expenses for the quarter were $797,352, resulting in net income
of $1,173,464. The value of an individual Unit in the
Partnership increased from $2,711.59 at March 31, 1996 to
$2,823.08 at June 30, 1996.
For the six months ended June 30, 1996, the Partnership's total
trading revenues including interest income were $1,482,500.
During the first half of the year, the Partnership posted a small
loss in Net Asset Value per Unit. Trading gains during the first
<PAGE>
six months were offset by brokerage commissions resulting in net
trading losses. The most significant trading losses were
recorded in the financial futures markets, particularly in non-
U.S. interest rate and stock index futures, as prices moved
without consistent direction for a majority of the second
quarter. Losses were also recorded in crude oil futures during
January and May as prices reversed lower following upward moves
in previous months. Smaller losses were recorded in soft
commodities as coffee futures prices moved in a trendless pattern
since early February. A majority of these losses were offset by
gains recorded in the currency markets from short Swiss franc
positions as the value of the Swiss franc moved lower relative to
the U.S. dollar during January, April and May and from short
Japanese yen positions as the value of the yen moved lower during
January, March, May and June. Smaller gains recorded in
agricultural futures trading during April also helped to mitigate
the losses recorded during the first half of the year. Total
expenses for the period were $1,592,218, resulting in a net loss
of $109,718. The value of an individual Unit in the Partnership
decreased from $2,830.65 at December 31, 1995 to $2,823.08 at
June 30, 1996.
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On September 6, 10, and 20, 1996, and on March 13, 1997, similar
purported class actions were filed in the Superior Court of the
State of California, County of Los Angeles, on behalf of all
purchasers of interests in limited partnership commodity pools
sold by DWR. Named defendants include DWR, Demeter, Dean Witter
Futures & Currency Management, Inc., MSDWD (all such parties
referred to hereafter as the "Dean Witter Parties"), the
Partnership, certain other limited partnership commodity pools of
which Demeter is the general partner, and certain trading
advisors (including JWH) to those pools. On June 16, 1997, the
plaintiffs in the above actions filed a consolidated amended
complaint. Similar purported class actions were also filed on
September 18 and 20, 1996 in the Supreme Court of the State of
New York, New York County, and on November 14, 1996 in the
Superior Court of the State of Delaware, New Castle County,
against the Dean Witter Parties and certain trading advisors
(including JWH) on behalf of all purchasers of interests in
various limited partnership commodity pools, including the
Partnership, sold by DWR. Generally, these complaints allege,
among other things, that the defendants committed fraud, deceit,
misrepresentation, breach of fiduciary duty, fraudulent and
unfair business practices, unjust enrichment, and conversion in
connection with the sale and operation of the various limited
partnership commodity pools. The complaints seek unspecified
amounts of compensatory and punitive
<PAGE>
damages and other relief. It is possible that additional similar
actions may be filed and that, in the course of these actions,
other parties could be added as defendants. The Dean Witter
Parties believe that they and the Partnership have strong
defenses to, and they will vigorously contest, the actions.
Although the ultimate outcome of legal proceedings cannot be
predicted with certainty, it is the opinion of management of the
Dean Witter Parties that the resolution of the actions will not
have a material adverse effect on the financial condition or the
results of operations of any of the Dean Witter Parties or the
Partnership.
Item 5. OTHER INFORMATION
On July 21, 1997, MSDWD, the sole shareholder of Demeter,
appointed a new Board of Directors consisting of Richard M.
DeMartini, Mark J. Hawley, Lawrence Volpe, Joseph G. Siniscalchi,
Edward C. Oelsner III, and Robert E. Murray.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
A) Exhibits. - None.
B) Reports on Form 8-K. - None.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dean Witter Cornerstone Fund II
(Registrant)
By: Demeter Management Corporation
(General Partner)
August 11, 1997 By:/s/ Patti L. Behnke
Patti L. Behnke
Chief Financial Officer
The General Partner which signed the above is the only party
authorized to act for the Registrant. The Registrant has no
principal executive officer, principal financial officer,
controller, or principal accounting officer and has no Board of
Directors.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Dena
Witter Cornerstone Fund II and is qualified in its entirety by references
to such financial instruments.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 27,340,953
<SECURITIES> 0
<RECEIVABLES> 123,766<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 28,447,526<F2>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 28,447,526<F3>
<SALES> 0
<TOTAL-REVENUES> 2,557,931<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,404,861
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,153,070
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,153,070
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,153,070
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Receivables include interest receivable of $94,147 receivable from
DWR of $29,619.
<F2>In addition to cash and receivables, total assets include net unrealized
gain on open contracts of $982,807.
<F3>Liabilities include redemptions payable of $262,003, accrued brokerage
commissions of $81,257, accrued management fees of $94,094, common
administrative expenses payable of $37,789, accrued transaction fees
and costs of $6,254 and accrued incentive fees of $70,267.
<F4>Total revenue includes realized trading revenue of $2,263,382, net change
in unrealized of $(333,627) and interest income of $628,176.
</FN>
</TABLE>
