<PAGE>
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
Two World Trade Center
New York, New York 10048
DEAR SHAREHOLDER:
- --------------------------------------------------------------------------------
We are pleased to present the annual report on the operations of Dean Witter New
York Tax-Free Income Fund for the year ended December 31, 1993.
MARKET CONDITIONS
Last year set records for municipals. Underwritings of new municipal bond issues
reached an all-time high. Yields fell to an all-time low of 5.41 percent in
October, as measured by THE BOND BUYER Revenue Bond Index. The Index began the
year at 6.40 percent and ended December at 5.52 percent. In addition, the
passage and signing during the summer of the Clinton administration's Revenue
Reconciliation Act made higher marginal taxes a reality. Demand for tax-exempt
bonds was stimulated by the new top federal tax rate of 39.6 percent (36% + a
3.6% surtax).
New-issue underwriting totaled $290 billion in 1993 increasing 23 percent over
the previous record of last year. Refunding issues, which are used by state and
local governments to refinance higher coupon debt, accounted for an
unprecedented two-thirds of total volume. Underwritings backed by insurance
shared 37 percent of the market. With $31 billion, New York was the second
largest state source of new issues, representing 11 percent of total offerings.
PERFORMANCE
Dean Witter New York Tax-Free Income Fund's
total return for the year ended December 31,
1993 was 11.72 percent (not including the
deduction of the maximum applicable
contingent deferred sales charge; see the
chart for further details). The Fund's net
asset value per share increased $0.52 from
$11.98 to $12.50. Tax-free distributions
totaling $0.65 per share were paid during
the year. Realized capital gains of $0.185
per share were also distributed. At year
end, the Fund's net assets totaled $246
million. The accompanying chart illustrates
the performance of a $10,000 investment in
the Fund from inception (April 24, 1985)
through the fiscal year ended December 31,
1993, versus the performance of a similar
investment in the Lehman Brothers Municipal
Bond Index.
INVESTMENT STRATEGY
During the year, the Fund continued to meet
its investment objectives of attractive
current income --free from New York State,
City and federal income tax--and
preservation of capital. The Fund was
invested in long-term bonds throughout the
year with only two to five percent of assets
in cash or short-term maturities. During the
year refunded and other high coupon bonds
with diminished call protection were sold.
This reduced the Fund's exposure to bonds
with redemption risk in 1995 and 1996 from
35 percent to 19 percent of the
<PAGE>
portfolio. The Fund's average credit rating remained "A" as rated by Moody's
Investors Service, Inc. or Standard & Poor's Corp. The Funds's average maturity
and call protection were 18 years and 7.5 years, respectively.
The three largest specific municipal sectors represented in the portfolio,
industrial development/pollution control, educational facilities and general
obligation bonds, comprised 37 percent of net assets. Bonds subject to the
federal alternative minimum tax (AMT) represented 14 percent of net assets.
LOOKING AHEAD
In 1994, the amount of municipal bonds outstanding is expected to decline.
New-issue volume is estimated to drop by 30 percent to $200 billion as state and
local governments offer fewer refundings. Bond maturities and redemptions are
expected to exceed new issuance by more than $60 billion. This relative lack of
supply should strengthen municipal performance relative to U.S. Treasury
securities.
The Fund plans to sell older, higher-coupon bonds with diminished call
protection. Purchases are expected to favor high-grade general obligations and
essential-purpose revenue bonds such as electric, water & sewer and
transportation issues.
Over the past several years, the Fund's level of dividend payments has trended
lower as interest rates have declined. This dividend pattern is expected to
extend through 1994. However, the Fund should continue to provide attractive
tax-free distribution yields as it has historically.
We appreciate your support of Dean Witter New York Tax-Free Income Fund and look
forward to continuing to serve your investment needs.
Very truly yours,
Charles A. Fiumefreddo
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) NEW YORK EXEMPT MUNICIPAL BONDS (98.4%) RATE DATE VALUE
- ----------- ---------- --------- -------------
<C> <S> <C> <C> <C>
GENERAL OBLIGATION (9.0%)
New York City,
$ 3,500 Various Purpose 1973................................ 3.50 % 5/ 1/01 $ 3,180,205
2,500 Various Purpose 1973................................ 3.50 5/ 1/03 2,167,125
4,000 1990 Ser D.......................................... 6.00 8/ 1/06 4,052,880
5,000 1993 Ser C CARS (AMBAC Insured)..................... 9.22 + 9/ 1/11 5,693,750
8,800 Puerto Rico, Public Impr Refg Ser 1987 A.............. 3.00 7/ 1/06 7,085,936
- ----------- -------------
23,800 22,179,896
- ----------- -------------
EDUCATIONAL FACILITIES REVENUE (13.6%)
New York State Dormitory Authority,
2,150 City University Ser U............................... 6.375 7/ 1/08 2,316,324
3,000 City University Ser 1993 A.......................... 5.75 7/ 1/09 3,093,360
5,000 City University Ser 1993 F.......................... 5.50 7/ 1/12 4,925,850
5,000 Columbia University Ser 1988 A (Prerefunded)........ 7.60 7/ 1/15 5,592,700
3,000 State University Ser 1989 B......................... 0.00 5/15/05 1,590,210
10,000 State University Ser 1993 C......................... 5.375 5/15/13 9,689,300
2,000 State University Ser 1993 A......................... 5.25 5/15/15 1,927,720
4,000 University of Rochester Ser 1987.................... 6.50 7/ 1/09 4,341,160
- ----------- -------------
34,150 33,476,624
- ----------- -------------
ELECTRIC REVENUE (7.1%)
10,000 New York State Power Authority, Ser CC................ 5.00 1/ 1/14 9,765,100
8,000 Puerto Rico Electric Power Authority, Power Ser O..... 5.00 7/ 1/12 7,737,440
- ----------- -------------
18,000 17,502,540
- ----------- -------------
HOSPITAL REVENUE (7.1%)
New York State Medical Care Facilities Finance Agency,
10,000 Insured Hospital & Nursing Home-FHA Insured Mtge
1993 Ser B (a)..................................... 5.50 2/15/22 10,016,700
2,490 Insured Hospital & Nursing Home-FHA Insured Mtge
1985 Ser B......................................... 9.125 2/15/25 2,673,488
4,000 St Luke's-Roosevelt Hospital Center--FHA Insured
Mtge 1989 Ser B (Prerefunded)...................... 7.40 2/15/09 4,751,240
- ----------- -------------
16,490 17,441,428
- ----------- -------------
INDUSTRIAL DEVELOPMENT/POLLUTION CONTROL REVENUE
(14.5%)
4,500 New York City Industrial Development Agency, 1990
American Airlines Inc (AMT)......................... 8.00 7/ 1/20 5,002,380
New York State Energy Research & Development
Authority,
3,500 Brooklyn Union Gas Co 1993 Ser B RIBS............... 9.562+ 4/ 1/20 4,186,875
7,500 Brooklyn Union Gas Co 1991 Ser B RIBS (AMT)......... 10.958+ 7/15/26 9,506,250
5,000 Consolidated Edison Co of New York Inc
Refg Ser 1993 B.................................... 5.25 8/15/20 4,901,300
4,000 Consolidated Edison Co of New York Inc
Ser 1986 A (AMT)................................... 7.50 11/15/21 4,468,280
2,500 Long Island Lighting Co 1990 Ser A (AMT)............ 7.15 6/ 1/20 2,716,975
4,000 Niagara Mohawk Power Corp 1985 Ser I................ 8.875 11/ 1/25 4,434,320
</TABLE>
<PAGE>
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1993 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ---------- --------- -------------
<C> <S> <C> <C> <C>
$ 400 Puerto Rico Industrial, Medical & Environmental
Pollution Control Facilities Financing Authority,
Baxter Travenol Labs Inc 1983 Ser A................. 8.00 % 9/ 1/12 $ 468,788
- ----------- -------------
31,400 35,685,168
- ----------- -------------
MORTGAGE REVENUE--MULTI-FAMILY (2.6%)
New York City Housing Development Corporation,
2,466 East Midtown Proj-FHA Insured Sec 223............... 6.50 11/15/18 2,647,666
1,000 Gen Hsg Ser A (AMBAC Insured)....................... 6.50 5/ 1/06 1,034,770
2,462 Ruppert Proj-FHA Insured Sec 223.................... 6.50 11/15/18 2,646,003
- ----------- -------------
5,928 6,328,439
- ----------- -------------
MORTGAGE REVENUE--SINGLE FAMILY (4.6%)
New York State Mortgage Agency,
125 Fifth Ser........................................... 9.75 10/ 1/10 129,766
4,500 Homeowner Ser 27.................................... 6.90 4/ 1/15 4,788,360
5,000 Homeowner Ser 29A................................... 5.25 4/ 1/15 4,850,050
1,400 Ser MM-1 (AMT)...................................... 7.95 10/ 1/21 1,515,724
- ----------- -------------
11,025 11,283,900
- ----------- -------------
NURSING & HEALTH RELATED FACILITIES REVENUE (1.6%)
New York State Medical Care Facilities Finance
Authority,
2,500 Long Term Health Care 1992 Ser D (Capital Guaranty
Insured)........................................... 6.50 11/ 1/15 2,791,400
1,000 Mental Health 1991 Ser A............................ 7.50 2/15/21 1,197,610
- ----------- -------------
3,500 3,989,010
- ----------- -------------
PUBLIC FACILITIES, REVENUE (4.7%)
3,000 New York State Dormitory Authority, Suffolk County
Judicial Ser 1986 (ETM)............................. 7.375 7/ 1/16 3,812,910
New York State Urban Development Corporation,
3,000 Correctional 1986 Refg Ser (Prerefunded)............ 7.00 1/ 1/16 3,264,420
3,750 Correctional Ser 3 (Prerefunded).................... 7.375 1/ 1/18 4,550,062
- ----------- -------------
9,750 11,627,392
- ----------- -------------
RESOURCE RECOVERY REVENUE (6.9%)
3,000 Hempstead Industrial Development Agency, 1985 American
REF-FUEL Co of Hempstead............................ 7.40 12/ 1/10 3,270,600
5,695 New York State Environmental Facilities Corporation,
Huntington 1989 Ser A (AMT)......................... 7.50 10/ 1/12 6,267,348
2,000 Oneida-Herkimer Solid Waste Management Authority, Ser
1992................................................ 6.75 4/ 1/14 2,151,700
5,000 Onondaga County Resource Recovery Agency, 1992 Ser
(AMT)............................................... 7.00 5/ 1/15 5,450,150
- ----------- -------------
15,695 17,139,798
- ----------- -------------
</TABLE>
<PAGE>
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1993 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL TRANSPORTATION REVENUE (6.0%)
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ---------- --------- -------------
<C> <S> <C> <C> <C>
$ 3,400 Port Authority of New York & New Jersey, Cons 53rd
Ser................................................. 8.70 % 7/15/20 $ 3,732,078
3,000 Triborough Bridge & Tunnel Authority, Gen Pur Ser 1993
B................................................... 5.00 1/ 1/20 2,919,120
1,700 Puerto Rico Highway Authority, Ser Q (Prerefunded).... 7.75 7/ 1/10 2,070,855
6,000 Puerto Rico Highway & Transportation Authority, Refg
Ser X............................................... 5.50 7/ 1/15 6,094,920
- ----------- -------------
14,100 14,816,973
- ----------- -------------
WATER & SEWER REVENUE (8.0%)
New York City Municipal Water Finance Authority,
4,000 1994 Ser B.......................................... 5.375 6/15/07 4,045,960
3,000 1991 Ser C (Prerefunded)............................ 7.375 6/15/14 3,617,280
4,000 1990 Ser A.......................................... 6.00 6/15/19 4,077,920
7,000 Puerto Rico Aqueduct & Sewer Authority, Ser 1988 A.... 7.90 7/ 1/07 8,071,280
- ----------- -------------
18,000 19,812,440
- ----------- -------------
OTHER REVENUE (12.7%)
4,000 Municipal Assistance Corporation for the City of New
York, Ser 57........................................ 7.25 7/ 1/08 4,378,800
New York Local Government Assistance Corporation,
5,000 Ser 1993 C (Prerefunded)............................ 7.625 4/ 1/17 5,065,300
5,000 Ser 1991 B (Prerefunded)............................ 7.50 4/ 1/20 6,063,050
5,000 New York State Dormitory Authority, The Metropolitan
Museum of Art Ser 1987 (Prefunded).................. 7.625 7/ 1/15 5,299,700
10,000 United Nations Development Corporation, 1992 Refg Ser
A Sr Lien........................................... 6.00 7/ 1/26 10,396,000
- ----------- -------------
29,000 31,202,850
- ----------- -------------
$ 230,838 TOTAL NEW YORK EXEMPT MUNICIPAL BONDS
(IDENTIFIED COST $217,327,520) (B).................... 98.4% 242,486,458
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES........ 1.6 3,974,133
---------- -------------
NET ASSETS............................................ 100.0% $ 246,460,591
---------- -------------
---------- -------------
<FN>
- ----------------
+ CURRENT COUPON RATE FOR RESIDUAL INTEREST BONDS. THIS RATE RESETS
PERIODICALLY AS THE AUCTION RATE ON THE RELATED SHORT-TERM SECURITIES
FLUCTUATES.
(A) SECURITY PURCHASED ON A WHEN ISSUED BASIS.
(B) THE AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS $217,327,520; THE
AGGREGATE GROSS UNREALIZED APPRECIATION IS $25,455,563 AND THE AGGREGATE
GROSS UNREALIZED DEPRECIATION IS $296,625, RESULTING IN NET UNREALIZED
APPRECIATION OF $25,158,938.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1993
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $217,327,520) (Note
1)...................................... $ 242,486,458
Cash...................................... 4,657,118
Receivables for:
Investments sold........................ 10,301,828
Interest................................ 4,488,394
Shares of beneficial interest sold...... 1,149,698
Prepaid expenses.......................... 14,459
-------------
TOTAL ASSETS...................... 263,097,955
-------------
LIABILITIES:
Payables for:
Investments purchased................... 14,938,561
Shares of beneficial interest
repurchased........................... 8,472
Plan of distribution fee payable (Note
3)...................................... 138,995
Investment management fee payable (Note
2)...................................... 114,292
Dividends and distributions to
shareholders............................ 1,330,436
Accrued expenses (Note 4)................. 106,608
-------------
TOTAL LIABILITIES................. 16,637,364
-------------
NET ASSETS:
Paid in capital........................... 218,102,851
Accumulated undistributed realized gain on
investments - net....................... 3,193,039
Unrealized appreciation on investments -
net..................................... 25,158,938
Accumulated undistributed investment
income - net............................ 5,763
-------------
NET ASSETS........................ $ 246,460,591
-------------
-------------
NET ASSET VALUE PER SHARE, 19,712,307
shares outstanding (unlimited authorized
shares of $.01 par value)............... $12.50
------
------
</TABLE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<S> <C>
INVESTMENT INCOME:
INTEREST INCOME.......................... $ 14,930,931
------------
EXPENSES
Plan of distribution fee (Note 3)...... 1,425,215
Investment management fee (Note 2)..... 1,268,826
Transfer agent fees and expenses (Note
4)................................... 83,054
Professional fees...................... 49,105
Shareholder reports and notices (Note
4)................................... 39,558
Trustees' fees and expenses (Note 4)... 36,064
Registration fees...................... 14,445
Other.................................. 17,916
------------
TOTAL EXPENSES..................... 2,934,183
------------
INVESTMENT INCOME - NET.......... 11,996,748
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
- NET (Note 1):
Realized gain on investments - net..... 6,322,958
Change in unrealized appreciation on
investments - net.................... 6,844,389
------------
NET GAIN ON INVESTMENTS............ 13,167,347
------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS...... $ 25,164,095
------------
------------
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, 1993 DECEMBER 31, 1992
------------------ ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Investment income -- net............................................. $ 11,996,748 $ 10,673,000
Realized gain on investments -- net.................................. 6,322,958 1,472,865
Change in unrealized appreciation on investments -- net.............. 6,844,389 4,144,670
------------------ ------------------
Net increase in net assets resulting from operations............. 25,164,095 16,290,535
------------------ ------------------
Dividends and distributions to shareholders from:
Investment income -- net............................................. (11,996,748 ) (10,673,000 )
Realized gain on investments -- net.................................. (3,940,210 ) (657,540 )
------------------ ------------------
Total dividends and distributions................................ (15,936,958 ) (11,330,540 )
------------------ ------------------
Transactions in shares of beneficial interest -- net increase (Note
5).................................................................... 28,717,907 21,841,786
------------------ ------------------
Total increase................................................... 37,945,044 26,801,781
------------------ ------------------
NET ASSETS:
Beginning of period.................................................... 208,515,547 181,713,766
------------------ ------------------
END OF PERIOD (including undistributed net investment income of
$5,763 and $5,763, respectively)...................................... $ 246,460,591 $ 208,515,547
------------------ ------------------
------------------ ------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION AND ACCOUNTING POLICIES -- Dean Witter New York 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
and was organized on January 17, 1985, as a Massachusetts business trust. The
Fund commenced operations on April 25, 1985.
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 Fund's Trustees.
The pricing service has informed the Fund that in valuing the Fund's
portfolio securities, it uses both a computerized grid 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, state of issuance, type of issue, call provisions, trading
characteristics and other features deemed to be relevant.
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 on the identified cost
method. Net investment income includes amortization of premiums and original
issue discounts. Additionally, with respect to market discount on bonds
purchased after April 30, 1993, a portion of any capital gain realized upon
disposition is recharacterized as taxable investment income. 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 reclassifications.
Dividends and distributions which exceed net investment income and net
realized capital gains for financial reporting purposes but not for tax
purposes are reported as dividends in excess of net investment income or
distributions in excess of net realized capital gains. To the extent they
exceed net investment income and net realized capital gains for tax
purposes, they are reported as distributions of paid-in-capital.
2. INVESTMENT MANAGEMENT AGREEMENT -- Pursuant to an Investment Management
Agreement (the "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 daily net
assets of the Fund determined as of the close of each business day: 0.55% of the
portion of the daily net assets not exceeding $500 million and 0.525% of the
portion of the daily net assets exceeding $500 million.
<PAGE>
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
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 office space and 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,
through its own sales organization. To compensate the Distributor, 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 the annual rate of .75 of 1% of the lesser of: (a) the
average daily aggregate gross sales of the Fund's 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
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 the account executives of Dean Witter Reynolds Inc., an affiliate of
the Investment Manager, and other employees or selected 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; 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 unrecovered expenses incurred
by the Distributor.
Provided that the Plan continues in effect, any cumulative expenses incurred
by the Distributor, but not yet recovered, may be recovered through future
distribution fees from the Fund and contingent deferred sales charges from the
Fund's shareholders.
The Distributor has informed the Fund that it received approximately
$244,000 in deferred sales charges from certain redemptions of the Fund's shares
of beneficial interest during the year ended December 31, 1993. The Fund's
shareholders pay such charges which are not expenses of the Fund.
4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES -- The cost of
purchases and the proceeds from sales of portfolio securities for the year ended
December 31, 1993, excluding short-term investments, aggregated $75,654,955 and
$56,757,285, respectively.
On April 1, 1991, 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 year ended December 31, 1993, included in Trustees' fees and expenses in the
Statement of Operations, amounted to $12,232. At December 31, 1993, the Fund had
an accrued pension liability of $39,649 which is included in accrued expenses in
the Statement of Assets and Liabilities.
<PAGE>
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
Dean Witter Trust Company, an affiliate of the Investment Manager and the
Distributor, is the Fund's transfer agent. During the year ended December 31,
1993, the Fund incurred transfer agent fees and expenses of $83,054, of which
$7,728 was payable at December 31, 1993.
Bowne & Co., Inc. is an affiliate of the Fund by virtue of a common Fund
Trustee and Director of Bowne & Co., Inc. During the year ended December 31,
1993, the Fund paid Bowne & Co., Inc. $4,250 for printing of shareholder
reports.
5. SHARES OF BENEFICIAL INTEREST -- Transactions in shares of beneficial
interest were as follows:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE YEAR ENDED DECEMBER
DECEMBER 31, 1993 31, 1992
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
------------ --------------- ------------ ---------------
<S> <C> <C> <C> <C>
Sold........................................ 3,452,052 $ 43,018,205 3,098,789 $ 36,563,558
Reinvestment of dividends and
distributions.............................. 802,145 10,012,352 577,032 6,816,205
------------ --------------- ------------ ---------------
4,254,197 53,030,557 3,675,821 43,379,763
Repurchased................................. (1,950,896) (24,312,650) (1,823,628) (21,537,977)
------------ --------------- ------------ ---------------
Net increase................................ 2,303,301 $ 28,717,907 1,852,193 $ 21,841,786
------------ --------------- ------------ ---------------
------------ --------------- ------------ ---------------
</TABLE>
1993 FEDERAL TAX NOTICE (UNAUDITED)
During the year ended December 31, 1993, the Fund paid to shareholders
$0.651 per share from net investment income. All of the Fund's dividends
from net investment income were exempt interest dividends, excludable
from gross income for Federal income tax purposes. For the same period,
the Fund paid to shareholders $0.185 per share from long-term capital
gains.
<PAGE>
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data and ratios for a share of beneficial interest outstanding
throughout each period:
<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR ENDED DECEMBER 31, APRIL 25, 1985*
------------------------------------------------------------------------------------- THROUGH
1993 1992 1991 1990 1989 1988 1987 1986 DECEMBER 31, 1985
-------- -------- -------- -------- -------- -------- -------- -------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of
period............ $ 11.98 $ 11.68 $ 11.00 $ 11.25 $ 10.94 $ 10.50 $ 11.57 $ 10.57 $ 10.00
-------- -------- -------- -------- -------- -------- -------- -------- --------
Investment
income-net...... 0.65 0.65 0.68 0.68 0.68 0.68 0.70 0.72 0.51
Realized and
unrealized gain
(loss) on
investments-
net............. 0.72 0.34 0.70 (0.25) 0.31 0.44 (0.93) 1.09 0.57
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total from
investment
operations........ 1.37 0.99 1.38 0.43 0.99 1.12 (0.23) 1.81 1.08
-------- -------- -------- -------- -------- -------- -------- -------- --------
Less dividends and
distributions:
Dividends from
net investment
income.......... (0.65) (0.65) (0.68) (0.68) (0.68) (0.67) (0.70) (0.72) (0.51)
Distributions
from realized
gain on
investments..... (0.20) (0.04) (0.02) -0- -0- (0.01) (0.14) (0.09) -0-
-------- -------- -------- -------- -------- -------- -------- -------- --------
Total dividends and
distributions..... (0.85) (0.69) (0.70) (0.68) (0.68) (0.68) (0.84) (0.81) (0.51)
-------- -------- -------- -------- -------- -------- -------- -------- --------
Net asset value,
end of period..... $ 12.50 $ 11.98 $ 11.68 $ 11.00 $ 11.25 $ 10.94 $ 10.50 $ 11.57 $ 10.57
-------- -------- -------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- -------- -------- --------
TOTAL INVESTMENT
RETURN+............ 11.72% 8.70% 12.94% 4.01% 9.34% 10.91% (1.89%) 17.62% 11.04%(1)
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (in
thousands)........ $246,461 $208,516 $181,714 $158,075 $147,363 $128,600 $112,795 $113,321 $ 73,408
Ratio of expenses
to average net
assets............ 1.27% 1.40% 1.32% 1.37% 1.37% 1.41% 1.40% 1.41% 1.16%(2)(3)
Ratio of net
investment income
to average net
assets............ 5.20% 5.48% 6.00% 6.13% 6.09% 6.28% 6.44% 6.36% 7.02%(2)(3)
Portfolio turnover
rate.............. 25% 16% 17% 23% 4% 18% 40% 23% 24%
<FN>
- --------------------
* COMMENCEMENT OF OPERATIONS.
+ DOES NOT REFLECT THE DEDUCTION OF SALES LOAD.
(1) NOT ANNUALIZED.
(2) ANNUALIZED.
(3) IF THE FUND HAD BORNE ALL ITS EXPENSES THAT WERE ASSUMED OR WAIVED BY THE INVESTMENT MANAGER AND THE
DISTRIBUTOR, THE EXPENSE RATIO WOULD HAVE BEEN 1.58% AND THE NET INVESTMENT INCOME RATIO WOULD HAVE BEEN 6.60%.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------
To the Shareholders and Trustees of Dean Witter New York Tax-Free Income Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Dean Witter New York Tax-Free
Income Fund (the "Fund") at December 31, 1993, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended and the financial highlights for each of the eight years
in the period then ended and for the period April 25, 1985 (commencement of
operations) through December 31, 1985, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities owned at December 31, 1993 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE
New York, New York
February 14, 1994
<PAGE>
TRUSTEES
Jack F. Bennett
Charles A. Fiumefreddo DEAN WITTER
Edwin J. Garn NEW YORK
John R. Haire TAX-FREE
Dr. John E. Jeuck INCOME FUND
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Albert T. Sommers
Edward R. Telling
OFFICERS
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
TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311
LEGAL COUNSEL
Sheldon Curtis
Two World Trade Center
New York, New York 10048
INDEPENDENT ACCOUNTANTS
Price Waterhouse
1177 Avenue of the Americas
New York, New York 10036
INVESTMENT MANAGER
Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048
This report is submitted for the general information
of shareholders of the Fund. For more detailed
information about the Fund, its officers and trustees,
fees, expenses and other pertinent information, please
see the prospectus of the Fund.
This report is not authorized for distribution to
prospective investors in the Fund unless preceded or
accompanied by an effective prospectus.
ANNUAL REPORT
DECEMBER 31, 1993
<PAGE>
DEAN WITTER NEW YORK TAX-FREE INCOME FUND
GROWTH OF $10,000
($ IN THOUSANDS)
<TABLE>
<CAPTION>
DATE TOTAL LEHMAN MUNI BOND
INDEX
<S> <C> <C>
April 30, 1985 $10,000 $10,000
December 31, 1985 $11,137 $11,131
December 31, 1986 $13,100 $13,280
December 31, 1987 $12,853 $13,481
December 31, 1988 $14,255 $14,851
December 31, 1989 $15,586 $16,453
December 31, 1990 $16,212 $17,652
December 31, 1991 $18,309 $19,795
December 31, 1992 $19,902 $21,541
December 31, 1993 $22,234(3) $24,187
AVERAGE ANNUAL TOTAL RETURNS
1 YEAR 5 YEARS LIFE OF FUND
<S> <C> <C> <C>
Non-Standard 11.72(1) 9.30(1) 9.60(1)
Standard (-CDSC) 6.72(2) 9.02(2) 9.60(2)
______ Fund ______ Lehman (4)
Past performance is not predictive of future returns.
<FN>
-----------------------
(1) Figure shown assumes reinvestment of all distributions and does not reflect
the deduction of any sales charges.
(2) Figure shown assumes reinvestment of all distributions and the deduction of
the maximum applicable contingent deferred sales charge (CDSC) (1 year-5%,
5 years-2%, since inception-0%). See the Fund's current prospectus for
complete details on fees and sales charges.
(3) Closing value, assuming a complete redemption on December 31, 1993.
(4) The Lehman Brothers Municipal Bond Index tracks the performance of
municipal bonds with maturities of 2 years or greater and a minimum credit
rating of Baa or BBB, as rated by Moody's Investors Service, Inc. or
Standard & Poor's Corp. The Index does not include any expenses, fees, or
charges.
</TABLE>
