DEAN WITTER CALIFORNIA TAX FREE INCOME FUND, N-30D, 1995-08-28

DEAN WITTER CALIFORNIA TAX FREE INCOME FUND
N-30D, 1995-08-28

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<PAGE>

DEAN WITTER CALIFORNIA TAX-FREE INCOME FUND
Two World Trade Center
New York, New York 10048

DEAR SHAREHOLDER:
-----------------------------------------------------------------------------

Fixed-income market conditions have steadily improved since late last
year. Bonds began to rally on signs of slower economic growth in the wake of
progressive tightening of monetary policy by the Federal Reserve Board. The
trend toward lower long-term interest rates reversed the prevailing pattern
during 1994, when rapidly rising rates created a severe bear market in bonds.

Long-term municipal bond yields, as tracked by The Bond Buyer Revenue Bond
Index*, moved from 6.97 percent in December to 6.28 percent at the end of
June. This 69 basis point decline in yield corresponded to a 6 percent price
increase for municipal bonds with 30-year maturities. By comparison, one-year
yields declined 116 basis points over the past six months and the yield
spread (difference between long- and short-term municipal bond interest
rates) widened.

The seasonal demand for municipals in December and January more than
offset the uncertainty caused by the Orange County, California bankruptcy
filing. Tax-exempt bonds outperformed U.S. Treasury bonds through February.
The ratio of the Revenue Bond Index yield to the 30-year U.S. Treasury bond
yield moved from a high of 89 percent in December to 84 percent by the end of
February. A declining ratio means that municipal bond prices have been
stronger than U.S. Treasury prices. Congressional tax reform proposals that
advocated the flat tax concept were partially responsible for municipals
underperforming Treasuries from March through June. By the end of June, the
Revenue Bond Index/Treasury bond yield ratio had risen to 95 percent.

The pace of new-issue underwriting over the first six months of 1995 was
25 percent below the same period last year. In contrast, California's
new-issue volume was down only 14 percent but continued to be #1 nationally.
With bond maturities and calls for redemption estimated to exceed new issues
coming to market this year, the outstanding supply of municipal securities is
expected to decline. This scarcity of municipal issues should strengthen
market conditions.

PERFORMANCE

Dean Witter California Tax-Free Income Fund's total return for the first
half of 1995 was 7.76 percent. The Fund's net asset value on June 30, 1995
was $12.48 per share. Tax-free dividends totaling $0.31 per share were
distributed during this period. At the end of June, the Fund had net assets
in excess of $1 billion. Since its inception on July 11, 1984, the Fund has
provided shareholders with an average annual total return of 8.82 percent.

PORTFOLIO STRUCTURE

The short-term and refunded investment positions at the end of June were 6
and 18 percent of net assets, respectively. Long-term investments were
diversified among 13 specific municipal sectors and 90 separate credits. The
three largest municipal sectors--refunded, water & sewer revenue and
transpor-

----------
* The Bond Buyer Revenue Bond Index is an arithmetic average of the yields
of 25 selected municipal revenue bonds with 30-year maturities. Credit
ratings of these bonds range from Aa1 to Baa1 by Moody's and AA+ to A- by
Standard & Poor's.

<PAGE>

tation revenue bonds--represented 41 percent of net assets. The average
maturity and call protection of the Fund's long-term holdings was 17 and 6
years, respectively. Since the beginning of the year, the portfolio has been
upgraded by a six-point increase in the percentage share of AAA-rated
investments. The credit quality ratings of the long-term portfolio are
summarized below:

<TABLE>
<CAPTION>
MOODY'S OR STANDARD & POOR'S RATINGS PERCENT
---------------------------------------- -----------
<S> <C>
Aaa or AAA .............................. 39%
Aa or AA ................................ 20
A or A .................................. 29
Baa or BBB .............................. 5
Not rated ............................... 7
-----------
100%
</TABLE>

LOOKING AHEAD

Slower economic growth in 1995 and the extent of the Federal Reserve
Board's previous interest rate moves have improved bond market expectations.
The decreasing supply of municipal bonds as a result of significant bond
maturities, calls for redemption and diminished new-issue supply should be
positive for the market. Tax reduction proposals will continue to receive
publicity and cloud the outlook for municipal bonds. However, to achieve
significant reductions in tax rates, elected officials and the public must
address difficult issues such as the mortgage interest deduction and
middle-class tax burden. With long-term tax-exempt bonds yielding more than
90 percent of the yield on Treasuries, the market appears to have discounted
much of the possibility that a flat tax might eventually become law.

Among the factors that will determine the Fund's future dividend level are
changes in market yields and the sale of portfolio holdings which are
expected to be redeemed. Even with the move to higher yields that occurred
last year, the Fund cannot replace the yield attributable to many older
investments which may be called or sold in the next few years.

We appreciate your ongoing support of Dean Witter California Tax-Free
Income Fund and look forward to continuing to serve your investment needs.

Very truly yours,

/s/ Charles A. Fiumefreddo

Chairman of the Board

<PAGE>

DEAN WITTER CALIFORNIA TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS June 30, 1995 (unaudited)
-----------------------------------------------------------------------------

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
------------ ---------- ---------- --------------
<C> <S> <C> <C> <C>
CALIFORNIA EXEMPT MUNICIPAL BONDS (92.9%)
GENERAL OBLIGATION (4.1%)
California,
$ 5,000 Ser 1990 .................................................. 7.00 % 08/01/07 $ 5,608,350
5,000 Ser 1990 .................................................. 7.00 08/01/08 5,588,500
2,000 Ser AT .................................................... 9.50 02/01/10 2,688,120
15,000 Various Purpose Dtd 04/01/93 (FSA) ........................ 5.50 04/01/19 13,912,200
Santa Margarita Water District,
6,000 Impr Dists #3&4 Refg Ser 1986 ............................. 7.50 11/01/05 6,225,420
4,000 Impr Dists #3, 3A, 4 & 4A 1994 Ser B Refg (MBIA) ......... 5.75 08/01/20 3,796,480
5,000 Puerto Rico, Pub Impr Refg Ser 1987 A ...................... 5.00 07/01/05 4,873,200
------------ --------------
42,000 42,692,270
------------ --------------
EDUCATIONAL FACILITIES REVENUE (5.1%)
California Educational Facilities Authority,
1,750 Loyola Marymount University Ser 1992 B .................... 6.55 10/01/12 1,785,017
2,300 Loyola Marymount University Ser 1992 B .................... 6.60 10/01/22 2,329,854
3,000 Stanford University Ser I ................................. 6.75 01/01/13 3,234,450
3,500 University Southern California Ser 1989 A ................. 7.20 10/01/15 3,756,410
8,000 California Public Works Board, State University 1992 Ser A 6.70 10/01/17 8,198,160
California Statewide Communities Development Authority,
3,400 Gemological Institute America COPs (Connie Lee) .......... 6.00 05/01/20 3,272,432
4,100 Gemological Institute America COPs (Connie Lee) .......... 6.00 05/01/25 3,908,571
15,000 University of California, Multiple Purpose Refg Ser 1993 C
(AMBAC) ................................................... 5.125 09/01/18 13,298,400
10,000 Whittier, Whittier College Refg Ser 1993 (Connie Lee) ..... 5.40 12/01/18 9,063,600
5,000 University of Puerto Rico, Ser M (MBIA) .................... 5.25 06/01/25 4,558,550
------------ --------------
56,050 53,405,444
------------ --------------
ELECTRIC REVENUE (9.1%)
7,000 Northern California Power Agency, Hydro #1 1993 Refg Ser A
(MBIA) .................................................... 5.50 07/01/16 6,561,310
15,000 Los Angeles Department of Water & Power, Second
Issue of 1993 ............................................. 5.40 11/15/13 13,801,350
Sacramento Municipal Utility District,
5,700 Refg 1994 Ser H (MBIA) .................................... 5.75 01/01/11 5,630,973
26,000 Refg 1992 Ser A (FGIC) .................................... 6.30 08/15/18 26,321,100
Southern California Public Power Authority,
10,000 Mead-Adelanto 1994 Ser A .................................. 5.15 07/01/15 9,093,600
6,115 Multiple Projects 1989 Ser ................................ 6.00 07/01/18 5,850,771
5,000 Power 1993 Refg Ser A ..................................... 5.00 07/01/15 4,356,300
7,000 Transmission Refg Ser 1988 (FGIC) ......................... 0.00 07/01/06 3,727,570
10,000 Transmission 1986 Refg Ser B .............................. 5.50 07/01/23 9,050,500
Puerto Rico Electric Power Authority,
3,000 Power Ser N ............................................... 5.00 07/01/12 2,656,620
9,000 Power Ser O ............................................... 5.00 07/01/12 7,969,950
------------ --------------
103,815 95,020,044
------------ --------------
</TABLE>

<PAGE>

DEAN WITTER CALIFORNIA TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS June 30, 1995 (unaudited) (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
------------ ---------- ---------- --------------
<C> <S> <C> <C> <C>
HOSPITAL REVENUE (10.7%)
$ 7,100 Antelope Valley Hospital District, Ser 1989 COPs .......... 7.35 % 01/01/20 $ 7,340,761
Bakersfield, Bakersfield Memorial Hospital
1,750 Ser 1992 A ................................................ 6.375 01/01/12 1,749,072
2,000 Ser 1992 A ................................................ 6.50 01/01/22 2,002,560
7,600 Berkeley, Alta Bates Medical Center Refg Ser A ............. 6.50 12/01/11 7,427,252
4,000 California Statewide Communities Development Authority,
Sutter Health COPs (MBIA) (WI) ............................ 5.50 08/15/22 3,634,240
California Health Facilities Financing Authority,
4,350 Downey Community Hospital Ser 1993 ........................ 5.625 05/15/08 4,137,328
10,000 Kaiser Permanente 1983 Ser ................................ 5.45 10/01/13 9,094,500
8,000 Kaiser Permanente 1985 Ser A .............................. 9.125 10/01/15 8,252,160
1,215 Merritt Peralta Medical Center 1985 Ser A ................. 9.00 05/01/15 1,242,945
20,000 Desert Hospital District, Desert Hospital Corp Ser 1992
COPs ......................................................
(CGIC) .................................................... 6.39 07/28/20 20,385,400
Duarte, City of Hope Medical Center,
3,000 Ser 1993 COPs ............................................. 5.50 04/01/01 2,951,880
4,000 Ser 1993 COPs ............................................. 6.25 04/01/23 3,638,880
6,000 Eden Township Hospital District, Ser 1989 .................. 7.40 11/01/19 5,919,240
5,000 Hemet Valley Hospital District, Moreno Valley Regional
Medical Center 1988 Ser A ................................. 8.50 07/01/18 5,289,700
2,950 Rancho Mirage Joint Powers Financing Authority, Eisenhower
Memorial Hospital COPs .................................... 7.00 03/01/22 3,030,506
4,000 Riverside, Kaiser Permanente 1985 Ser A .................... 9.00 12/01/15 4,155,800
5,000 Santa Rosa, Kaiser Permanente 1985 Ser A ................... 9.00 12/01/15 5,194,750
Stockton,
2,000 Dameron Hospital Assn Refg Ser 1988 ....................... 8.25 12/01/00 2,159,020
6,000 St Joseph Medical Center of Stockton 1993 Ser A (MBIA) ... 5.50 06/01/23 5,460,060
9,000 University of California, UCLA Medical Center Refg Ser 1994
(MBIA) .................................................... 5.50 12/01/14 8,507,070
------------ --------------
112,965 111,573,124
------------ --------------
INDUSTRIAL DEVELOPMENT/POLLUTION CONTROL REVENUE (5.5%)
2,500 California Alternative Energy Source Financing Authority,
SRI International Cogeneration Ser 1985 (a) ............... 9.75 12/01/05 1,175,000
California Pollution Control Financing Authority,
5,000 Atlantic Richfield Co Ser 1985 ............................ 9.125 11/01/04 5,186,250
6,000 Pacific Gas & Electric Co 1987 Ser B (AMT) ................ 8.875 01/01/10 6,676,980
5,000 Southern California Edison Co 1988 Ser A (AMT) ........... 6.90 09/01/06 5,268,000
10,000 Southern California Edison Co Ser D ....................... 6.85 12/01/08 10,451,100
10,000 Southern California Edison Co 1992 Ser B (AMT) ........... 6.40 12/01/24 10,041,400
5,000 Waste Management Inc 1991 Ser A (AMT) ..................... 7.15 02/01/11 5,281,600
1,400 Intermodal Container Transfer Facility Joint Powers
Authority, Southern Pacific Transportation Co 1989 Ser A . 7.70 11/01/14 1,471,722
San Diego, San Diego Gas & Electric Co
6,000 1986 Ser B (AMT) .......................................... 7.375 12/01/21 6,195,840
5,000 1987 Ser A (AMT) .......................................... 8.75 03/01/23 5,490,200
------------ --------------
55,900 57,238,092
------------ --------------
</TABLE>

<PAGE>

DEAN WITTER CALIFORNIA TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS June 30, 1995 (unaudited) (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
------------ ---------- ---------- --------------
<C> <S> <C> <C> <C>
MORTGAGE REVENUE - SINGLE FAMILY (1.3%)
California Housing Finance Agency,
$ 6,345 Home 1989 Ser A ........................................... 7.75 % 08/01/17 $ 6,713,454
4,275 Home 1991 Ser G (AMT) ..................................... 7.05 08/01/27 4,431,550
Puerto Rico Housing Finance Corporation,
1,335 Portfolio One GNMA-Backed Ser B ........................... 7.65 10/15/22 1,419,973
1,000 Portfolio One GNMA-Backed Ser C ........................... 6.85 10/15/23 1,043,430
------------ --------------
12,955 13,608,407
------------ --------------
PUBLIC FACILITIES REVENUE (6.5%)
10,000 Alameda County Public Facilities Corporation, 1991 COPs ... 6.15 09/01/21 10,029,000
10,000 Beverly Hills Public Financing Authority, 1993 Refg Ser A
(MBIA) .................................................... 5.65 06/01/15 9,573,500
5,560 Grossmont Union High School District, Land Acquisition
Convert Cap Apprec COPs (FSA) ............................. 7.375+ 09/01/25 5,284,558
5,500 Los Angeles County-West Covina Civic Center Authority, 1987
Refg COPs ................................................. 6.875 09/01/14 5,619,845
6,500 Nevada County, Western Nevada County Solid Waste Mgmt 1991
COPs ...................................................... 7.50 06/01/21 6,522,425
5,000 North City West School Facilities Financing Authority,
Community Facs Dist #1 Spl Tax Ser 1989 A ................. 7.85 09/01/19 5,196,600
3,500 Poway Redevelopment Agency, 1986 Cap Impr COPs ............. 7.875 08/01/11 3,611,370
10,000 San Jose Financing Authority, Convention Center
Refg 1993 Ser C ........................................... 6.375 09/01/13 9,993,400
10,000 Stanislaus County Capital Improvements Financing Authority,
Refg Ser 1990 COPs ........................................ 7.55 04/01/18 10,335,600
1,200 Puerto Rico Infrastructure Financing Authority, Spl Tax Ser
1988 A .................................................... 7.90 07/01/07 1,328,388
------------ --------------
67,260 67,494,686
------------ --------------
RESOURCE RECOVERY REVENUE (0.5%)
4,910 Stanislaus Waste Energy Financing Agency, Ogden
Martin Systems of Stanislaus Inc Refg Ser 1990 ............ 7.625 01/01/10 5,221,049
------------ --------------
TAX ALLOCATION (6.4%)
5,000 Fountain Valley Agency for Community Development,
1985 Industrial Area ...................................... 9.10 01/01/15 5,188,050
Garden Grove Community Development Agency,
5,000 Refg Issue of 1993 ........................................ 5.70 10/01/13 4,620,600
7,000 Refg Issue of 1993 ........................................ 5.875 10/01/23 6,428,100
Industry Urban-Development Agency,
10,000 Civic Rec-Ind Redev Proj #1 Sub Refg Ser 1987 A .......... 7.30 05/01/06 10,314,700
2,165 Civic Rec-Ind Redev Proj #1 Sub Refg Ser 1987 B .......... 7.375 05/01/15 2,209,253
25,500 Long Beach Financing Authority, Ser 1992 (AMBAC) .......... 6.00 11/01/17 25,716,750
7,000 Norwalk Redevelopment Agency, Proj #1 1987 Refg ........... 7.15 12/01/15 7,136,150
5,850 Pleasanton Joint Powers Financing Authority, Reassessment
1993 Ser A ................................................ 6.15 09/02/12 5,692,284
------------ --------------
67,515 67,305,887
------------ --------------
</TABLE>

<PAGE>

DEAN WITTER CALIFORNIA TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS June 30, 1995 (unaudited) (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
------------ ---------- ---------- --------------
<C> <S> <C> <C> <C>
TRANSPORTATION FACILITIES REVENUE (10.7%)
Long Beach,
$ 11,000 Harbor Ser 1989 A (AMT) ................................... 7.375% 05/15/09 $ 11,808,280
10,000 Harbor Ser 1989 A (AMT) ................................... 7.25 05/15/19 10,668,600
Los Angeles,
10,000 Department of Airports Refg 1985 Ser A (FGIC) ............. 5.50 05/15/09 9,790,500
5,000 Department of Airports Refg 1989 Ser C .................... 7.00 05/01/10 5,249,050
6,000 Harbor Department Issue of 1985 ........................... 8.70 09/01/15 6,453,660
Los Angeles County Transportation Commission,
20,000 Sales Tax Ser 1991 B ...................................... 6.50 07/01/13 20,185,800
5,000 Sales Tax Ser 1986 A ...................................... 6.25 07/01/16 5,020,100
20,000 San Diego County Regional Transportation Commission,
Sales Tax 1994 Ser A (FGIC) ............................... 4.75 04/01/08 18,292,600
5,000 San Francisco Airports Commission, San Francisco Intl
Airport Second Ser Refg Issue 4 (MBIA) .................... 6.00 05/01/20 4,898,400
San Francisco Bay Area Rapid Transit District, Sales Tax
5,000 Ser 1990 (AMBAC) .......................................... 6.75 07/01/09 5,371,450
6,000 Ser 1995 (FGIC) ........................................... 5.50 07/01/15 5,633,280
10,000 Puerto Rico Highway & Transportation Authority, Refg Ser X 5.25 07/01/21 8,815,800
------------ --------------
113,000 112,187,520
------------ --------------
WATER & SEWER REVENUE (12.4%)
California Department of Water Resources,
4,000 Central Valley Ser F ...................................... 6.00 12/01/11 3,970,880
9,500 Central Valley Ser J-2 .................................... 6.125 12/01/13 9,483,660
8,000 Castaic Lake Water Agency, Refg Ser 1994 A COPs (MBIA) ...... 6.00 08/01/18 7,852,480
10,000 Central Coast Water Authority, Ser 1992 (AMBAC) ........... 6.50 10/01/14 10,378,600
5,000 Contra Costa Water District, Ser G (MBIA) .................. 5.50 10/01/19 4,634,000
8,000 East Bay Municipal Utility District, Water Refg Ser 1992 .. 6.00 06/01/20 7,719,200
4,000 Eastern Municipal Water District, Water & Sewer
Ser 1991 COPs ............................................. 6.00 07/01/23 3,832,880
3,600 Goleta Water District, Refg Ser 1993 COPs (FGIC) .......... 5.50 12/01/12 3,440,592
5,745 Los Angeles, Wastewater Ser 1990 ........................... 7.10 06/01/18 6,159,961
20,500 Los Angeles County Sanitation Districts Financing
Authority, 1993 Ser A ..................................... 5.38 10/01/13 18,895,875
3,600 Moulton Niguel Water District, 1993 Refg (MBIA) ........... 5.25 09/01/13 3,325,860
2,500 Rancho Water District Financing Authority, Refg Ser 1995
(FGIC) WI ................................................. 5.90 11/01/15 2,452,525
8,000 San Diego County Water Authority, Water Ser 1991 B COPs
(MBIA) .................................................... 6.30 04/08/21 8,118,720
15,000 San Diego, Sewer 1993 Ser A ................................ 5.25 05/15/20 13,186,200
5,750 San Francisco Public Utilities Commission, Water 1992 Refg
Ser A ..................................................... 6.00 11/01/15 5,591,645
5,000 West & Central Basin Financing Authority, Water Basin
Refg Ser 1993 A (AMBAC) ................................... 5.00 08/01/16 4,411,350
Puerto Rico Aqueduct & Sewer Authority,
5,000 Ser 1988 A ................................................ 7.90 07/01/07 5,552,850
9,450 Ser 1988 A ................................................ 7.875 07/01/17 10,491,201
------------ --------------
132,645 129,498,479
------------ --------------

</TABLE>

<PAGE>

DEAN WITTER CALIFORNIA TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS June 30, 1995 (unaudited) (continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
------------ ---------- ---------- --------------
<C> <S> <C> <C> <C>
OTHER REVENUE (2.7%)
$ 1,875 Campell Redevelopment Agency, 1991 Financing COPs ......... 6.75 % 10/01/17 $ 1,919,344
Los Angeles County,
5,400 1991 Master Refg COPs ..................................... 6.708 05/01/15 5,477,976
10,000 Pension Obligations Certificates Ser A .................... 6.875 06/30/07 10,390,400
9,500 Public Properties Refg of 1987 COPs ....................... 0.00 04/01/04 5,779,135
5,000 Orange County Community Facilities District #86-2,
Rancho Santa Margarita Ser A of 1990 ...................... 7.65 08/15/17 5,123,100
------------ --------------
31,775 28,689,955
------------ --------------
REFUNDED (17.9%)
5,000 California Health Facilities Financing Authority, St Joseph
Health Ser 1991 A ......................................... 6.75 07/01/21 5,603,500
7,000 California Public Works Board, University of California
1990 Ser A ................................................ 7.00 09/01/15 7,888,930
5,000 Contra Costa Water Authority, Water Treatment 1990 Ser A .. 6.875 10/01/20 5,573,850
5,000 Desert Hospital District, Desert Hospital Corp Ser 1990
COPs ...................................................... 8.00 07/01/10 5,841,400
9,000 El Cajon-San Diego County Civic Center Authority,
East County Regional Center 1986 Refg ..................... 6.70 12/01/07 9,505,710
17,000 Los Angeles, Wastewater Ser 1990-B ......................... 7.15 06/01/20 19,095,760
Los Angeles Convention & Exhibition Center Authority,
10,000 Ser 1985 COPs ............................................. 9.00 12/01/10 13,236,300
14,000 Ser 1985 COPs ............................................. 9.00 12/01/20 18,530,820
5,000 Los Angeles Department of Water & Power, Water Works
Issue of 1991 (Crossover Refunded) ........................ 7.00 04/01/31 5,582,650
10,000 Los Angeles County Transportation Commission,
Sales Tax Ser 1987 A ...................................... 6.75 07/01/19 11,330,000
10,000 Northern California Transmission Agency, California-Oregon
1990 Ser A (MBIA) ......................................... 7.00 05/01/24 11,167,900
5,000 Redding, Ser 1989 A COPs (MBIA) ............................ 7.125 07/01/14 5,386,150
11,000 San Diego Water Authority, Water Ser 1989 A COPs .......... 7.30 05/01/09 11,844,250
12,000 Santa Margarita Water District, Impr Dists #4A Refg Ser
1978 Ser E ................................................ 7.40 07/01/15 13,631,160
11,000 University of California, Multiple Purpose Refg Ser A ..... 6.875 09/01/16 12,511,840
8,500 University of California, UCLA Medical Center Ser 1986 .... 6.90 12/01/16 9,005,665
13,000 Puerto Rico Highway Authority, Ser Q ....................... 7.75 07/01/10 15,043,860
5,085 Puerto Rico, Pub Impr Ser 1991 ............................. 7.30 07/01/20 5,783,120
------------ --------------
162,585 186,562,865
------------ --------------
963,375 TOTAL CALIFORNIA EXEMPT MUNICIPAL BONDS
------------
(IDENTIFIED COST $931,472,342) .................................................. 970,497,822
--------------

</TABLE>

<PAGE>

<FN>
---------------
AMT Alternative Minimum Tax.

COPs Certificates of Participation.

TRANs Tax and Revenue Anticipation Notes.

WI Security purchased on a when issued basis.

* Current coupon of variable rate security.

+ Currently a zero coupon bond that will convert to interest rate
shown at a future date.

(a) Interest income in arrears is recorded as received.

(b) The aggregate cost for federal income taxes is $996,973,496; the
aggregate gross unrealized appreciation is $53,671,345 and the
aggregate gross unrealized depreciation is $14,675,169, resulting in
net unrealized appreciation of $38,996,176.

Bond Insurance:

AMBAC AMBAC Indemnity Corporation.

CGIC Capital Guaranty Insurance Company.

Connie Lee Connie Lee Insurance Company.

FGIC Financial Guaranty Insurance Company.

FSA Financial Security Assurance Insurance.

MBIA Municipal Bond Investors Assurance Corporation.

See Notes to Financial Statements

</TABLE>

<PAGE>

DEAN WITTER CALIFORNIA TAX-FREE INCOME FUND
FINANCIAL STATEMENTS
-----------------------------------------------------------------------------

STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995 (unaudited)
-----------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $996,973,496) ........... $1,035,969,672
Cash ...................................... 82,947
Receivable for:
Investments sold ......................... 20,105,096
Interest ................................. 16,984,739
Shares of beneficial interest sold ...... 542,173
Prepaid expenses and other assets ........ 39,717
--------------
TOTAL ASSETS ........................... 1,073,724,344
--------------
LIABILITIES:
Payable for:
Investments purchased .................... 26,335,327
Shares of beneficial interest
repurchased ............................. 1,349,344
Plan of distribution fee ................. 654,716
Investment management fee ................ 460,887
Dividends to shareholders ................ 285,634
Accrued expenses and other payables ...... 135,887
--------------
TOTAL LIABILITIES ...................... 29,221,795
--------------
NET ASSETS:
Paid-in-capital ........................... 1,002,346,410
Net unrealized appreciation ............... 38,996,176
Accumulated undistributed net realized
gain ..................................... 3,159,963
--------------
NET ASSETS ............................. $1,044,502,549
==============
NET ASSET VALUE PER SHARE, 83,698,753
shares outstanding (unlimited shares
authorized of $.01 par value) ............ $ 12.48
==============
</TABLE>

STATEMENT OF OPERATIONS
For the six months ended June 30, 1995 (unaudited)
-----------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME ....................... $32,916,355
-------------
EXPENSES
Plan of distribution fee ............. 3,887,297
Investment management fee ............ 2,740,894
Transfer agent fees and expenses .... 156,203
Professional fees .................... 34,118
Shareholder reports and notices ..... 31,364
Trustees' fees and expenses .......... 16,868
Registration fees .................... 5,830
Other ................................ 19,038
-------------
TOTAL EXPENSES ...................... 6,891,612
-------------
NET INVESTMENT INCOME ............... 26,024,743
-------------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain .................... 5,101,821
Net change in unrealized depreciation 46,813,911
-------------
NET GAIN ............................ 51,915,732
-------------
NET INCREASE ........................ $77,940,475
=============
</TABLE>

<PAGE>

STATEMENT OF CHANGES IN NET ASSETS
-----------------------------------------------------------------------------

<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE YEAR
ENDED JUNE 30, ENDED DECEMBER
1995 (UNAUDITED) 31, 1994
------------------ -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ........................................ $ 26,024,743 $ 56,529,024
Net realized gain (loss) ..................................... 5,101,821 (1,886,812)
Net change in unrealized appreciation/depreciation .......... 46,813,911 (125,447,219)
------------------ -----------------
Net increase (decrease) ..................................... 77,940,475 (70,805,007)
------------------ -----------------
Dividends and distributions to shareholders from:
Net investment income ........................................ (26,173,538) (56,377,889)
Net realized gain ............................................ -- (2,061,346)
------------------ -----------------
Total ....................................................... (26,173,538) (58,439,235)
Net decrease from transactions in shares of beneficial
interest ...................................................... (15,102,923) (52,745,051)
------------------ -----------------
Total increase (decrease) ................................... 36,664,014 (181,989,293)
NET ASSETS:
Beginning of period ........................................... 1,007,838,535 1,189,827,828
------------------ -----------------
END OF PERIOD (including undistributed net investment income
of $0 and $148,816, respectively) ............................ $1,044,502,549 $1,007,838,535
================== =================
</TABLE>

See Notes to Financial Statements

<PAGE>

DEAN WITTER CALIFORNIA TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (unaudited)
-----------------------------------------------------------------------------

1. ORGANIZATION AND ACCOUNTING POLICIES -- Dean Witter California Tax-Free
Income Fund (the "Fund") is registered under the Investment Company Act of
1940, as amended (the "Act"), as a diversified, open-end management
investment company. The Fund was organized as a Massachusetts business trust
on April 9, 1984 and commenced operations on July 11, 1984.

The following is a summary of significant accounting policies:

A. Valuation of Investments -- Portfolio securities are valued for the
Fund by an outside independent pricing service approved by the Trustees.
The pricing service has informed the Fund that in valuing the Fund's
portfolio securities, it uses both a computerized matrix of tax-exempt
securities and evaluations by its staff, in each case based on information
concerning market transactions and quotations from dealers which reflect
the bid side of the market each day. The Fund's portfolio securities are
thus valued by reference to a combination of transactions and quotations
for the same or other securities believed to be comparable in quality,
coupon, maturity, type of issue, call provisions, trading characteristics
and other features deemed to be relevant. Short-term debt securities
having a maturity date of more than sixty days at time of purchase are
valued on a mark-to-market basis until sixty days prior to maturity and
thereafter at amortized cost based on their value on the 61st day.
Short-term debt securities having a maturity date of sixty days or less at
the time of purchase are valued at amortized cost.

B. Accounting for Investments -- Security transactions are accounted for
on the trade date (date the order to buy or sell is executed). Realized
gains and losses on security transactions are determined by the identified
cost method. The Fund amortizes premiums and accretes discounts on
securities purchased over the life of the respective securities. Interest
income is accrued daily.

C. Federal Income Tax Status -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable and nontaxable
income to its shareholders. Accordingly, no federal income tax provision
is required.

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

2. INVESTMENT MANAGEMENT AGREEMENT -- Pursuant to an Investment Management
Agreement with Dean Witter InterCapital Inc. (the "Investment Manager"), the
Fund pays its Investment Manager a management fee, accrued daily and payable
monthly, by applying the following annual rates to the

<PAGE>

DEAN WITTER CALIFORNIA TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
-----------------------------------------------------------------------------

Fund's net assets determined as of the close of each business day: 0.55% to
the portion of daily net assets not exceeding $500 million; 0.525% to the
portion of daily net assets exceeding $500 million but not exceeding $750
million; 0.50% to the portion of daily net assets exceeding $750 million but
not exceeding $1 billion; and 0.475% to the portion of daily net assets
exceeding $1 billion.

Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, office space, facilities,
equipment, clerical, bookkeeping and certain legal services and pays the
salaries of all personnel, including officers of the Fund who are employees
of the Investment Manager. The Investment Manager also bears the cost of
telephone services, heat, light, power and other utilities provided to the
Fund.

3. PLAN OF DISTRIBUTION -- Shares of the Fund are distributed by Dean Witter
Distributors Inc. (the "Distributor"), an affiliate of the Investment
Manager. The Fund has adopted a Plan of Distribution (the "Plan") pursuant to
Rule 12b-1 under the Act pursuant to which the Fund pays the Distributor
compensation, accrued daily and payable monthly, at an annual rate of 0.75%
of the lesser of: (a) the average daily aggregate gross sales of the Fund's
shares since the Fund's inception (not including reinvestment of dividend or
capital gains distributions) less the average daily aggregate net asset value
of the Fund's shares redeemed since the Fund's inception upon which a
contingent deferred sales charge has been imposed or upon which such charge
has been waived; or (b) the Fund's average daily net assets. Amounts paid
under the Plan are paid to the Distributor to compensate it for the services
provided and the expenses borne by it and others in the distribution of the
Fund's shares, including the payment of commissions for sales of the Fund's
shares and incentive compensation to, and expenses of, account executives of
Dean Witter Reynolds Inc., an affiliate of the Investment Manager and
Distributor, and other employees and selected broker-dealers, who engage in
or support distribution of the Fund's shares or who service shareholder
accounts, including overhead and telephone expenses, printing and
distribution of prospectuses and reports used in connection with the offering
of the Fund's shares to other than current shareholders and preparation,
printing and distribution of sales literature and advertising materials. In
addition, the Distributor may be compensated under the Plan for its
opportunity costs in advancing such amounts, which compensation would be in
the form of a carrying charge on any unreimbursed expenses by the
Distributor.

Provided that the Plan continues in effect, any cumulative expenses
incurred but not yet recovered may be recovered through future distribution
fees from the Fund and contingent deferred sales charges from the Fund's
shareholders.

The Distributor has informed the Fund that for the six months ended June
30, 1995, it received approximately $871,000 in contingent deferred sales
charges from certain redemptions of the Fund's shares. The Fund's
shareholders pay such charges which are not an expense of the Fund.

4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES -- The cost of
purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the six months ended June 30, 1995 aggregated
$66,077,410 and $83,109,245, respectively.

Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At June 30, 1995, the Fund had
transfer agent fees and expenses payable of approximately $32,000.

<PAGE>

DEAN WITTER CALIFORNIA TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)
-----------------------------------------------------------------------------

The Fund established an unfunded noncontributory defined benefit pension
plan covering all independent Trustees of the Fund who will have served as
independent Trustees for at least five years at the time of retirement.
Benefits under this plan are based on years of service and compensation
during the last five years of service. Aggregate pension costs for the six
months ended June 30, 1995 included in Trustees' fees and expenses in the
Statement of Operations amounted to $6,065. At June 30, 1995, the Fund had an
accrued pension liability of $53,946 which is included in accrued expenses in
the Statement of Assets and Liabilities.

5. SHARES OF BENEFICIAL INTEREST -- Transactions in shares of beneficial
interest were as follows:

<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
JUNE 30, 1995 DECEMBER 31, 1994
------------------------------ -------------------------------
SHARES AMOUNT SHARES AMOUNT
------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Sold ......................... 4,284,639 $ 53,007,457 10,564,887 $ 132,902,122
Reinvestment of dividends and
distributions ............... 1,120,668 13,932,284 2,667,705 33,068,131
------------- --------------- -------------- ---------------
5,405,307 66,939,741 13,232,592 165,970,253
Repurchased .................. (6,627,722) (82,042,664) (17,736,216) (218,715,304)
------------- --------------- -------------- ---------------
Net decrease ................. (1,222,415) $(15,102,923) (4,503,624) $ (52,745,051)
============= =============== ============== ===============
</TABLE>

6. FEDERAL INCOME TAX STATUS -- At December 31, 1994, the Fund had a net
capital loss carryover of approximately $1,887,000 which will be available
through December 31, 2002 to offset future capital gains to the extent
provided by regulations.

<PAGE>

DEAN WITTER CALIFORNIA TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
-----------------------------------------------------------------------------

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

<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31,
-------------------------------------------------
FOR THE SIX
MONTHS ENDED
JUNE 30, 1995
(UNAUDITED) 1994 1993 1992 1991 1990
--------------- --------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .. $11.87 $13.31 $12.70 $12.46 $11.99 $12.05
--------------- --------- -------- -------- -------- --------
Net investment income .................. 0.31 0.64 0.67 0.69 0.71 0.72
Net realized and unrealized gain (loss) 0.61 (1.42) 0.70 0.26 0.48 (0.06)
--------------- --------- -------- -------- -------- --------
Total from investment operations ...... 0.92 (0.78) 1.37 0.95 1.19 0.66
--------------- --------- -------- -------- -------- --------
Less dividends and distributions from:
Net investment income ................. (0.31) (0.64) (0.67) (0.69) (0.71) (0.72)
Net realized gain ..................... -- (0.02) (0.09) (0.02) (0.01) --
--------------- --------- -------- -------- -------- --------
Total dividends and distributions ..... (0.31) (0.66) (0.76) (0.71) (0.72) (0.72)
--------------- --------- -------- -------- -------- --------
Net asset value, end of period ......... $12.48 $11.87 $13.31 $12.70 $12.46 $11.99
=============== ========= ======== ======== ======== ========
TOTAL INVESTMENT RETURN+ ............... 7.76% (1) (5.97)% 10.97% 7.83% 10.18% 5.69%
RATIOS TO AVERAGE NET ASSETS:
Expenses .............................. 1.33% (2) 1.32% 1.27% 1.32% 1.28% 1.30%
Net investment income ................. 5.02% (2) 5.10% 5.03% 5.45% 5.78% 5.98%
SUPPLEMENTAL DATA:
Net assets, end of period
(in millions) ......................... $1,045 $1,008 $1,190 $987 $834 $677
Portfolio turnover rate ................ 7% (1) 12% 10% 6% 3% 16%
<FN>
----------
+ Does not reflect the deduction of sales charge.

(1) Not annualized.

(2) Annualized.
</TABLE>

See Notes to Financial Statements

<PAGE>

T R U S T E E S
Jack F. Bennett
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Philip J. Purcell
John L. Schroeder

O F F I C E R S
Charles A. Fiumefreddo
Chairman and Chief Executive Officer

Sheldon Curtis
Vice President, Secretary and General Counsel

James F. Willison
Vice President

Thomas F. Caloia
Treasurer

T R A N S F E R A G E N T
Dean Witter Trust Company
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311

I N D E P E N D E N T A C C O U N T A N T S
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036

I N V E S T M E N T M A N A G E R
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048

The financial statements included herein have been taken from the records of
the Fund without examination by the independent accountants and accordingly
they do not express an opinion thereon.
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and
trustees, fees, expenses and other pertinent information, please see the
prospectus of the Fund.
This report is not authorized for distribution to prospective investors in
the Fund unless preceded or accompanied by an effective prospectus.

DEAN WITTER
CALIFORNIA
TAX-FREE
INCOME FUND

SEMIANNUAL REPORT
JUNE 30, 1995