WITTER DEAN UTILITIES FUND, N-30D, 1995-02-22

WITTER DEAN UTILITIES FUND
N-30D, 1995-02-22

Previous: WITTER DEAN UTILITIES FUND, 24F-2NT, 1995-02-22

Next: INSURED MUNICIPALS INCOME TRUST 44TH INSURED MULTI SERIES, 485BPOS, 1995-02-22

<PAGE>
DEAN WITTER UTILITIES FUND TWO WORLD TRADE CENTER, NEW YORK, NEW YORK
10048
LETTER TO THE SHAREHOLDERS

DEAR SHAREHOLDER:

During the twelve months ended December 31, 1994, continued economic growth
fueled improving consumer sentiment and spending, with retail, home and auto
sales rising rapidly in conjunction with higher levels of employment. This
continuing scenario of strong economic growth induced the Federal Reserve Board
to maintain its anti-inflation initiative begun in early February, 1994. At that
time the central bank initiated a series of interest rate increases that brought
the federal-funds rate -- the interest rate banks charge each other for
overnight loans -- from 3.00 percent to 5.50 percent by December 31, 1994. In
addition, the Federal Reserve Board also increased the discount rate -- the rate
the Federal Reserve charges member banks for loans -- from 3.00 percent to 4.75
percent. These increases signaled the end of the central bank's five-year
accommodative monetary policy. As a result of the Federal Reserve's actions,
interest rates on short-and intermediate-term U.S. Treasury securities were more
than 2.50 percentage points higher on December 31, 1994 than one year ago.

Higher interest rates and uncertainties associated with "competition" within the
utilities industry, resulted in Dean Witter Utilities Fund declining 9.9 percent
for the fiscal year ended December 31, 1994. The accompanying chart illustrates
the growth of a $10,000 investment in the Fund from inception (April 29, 1988)
through the fiscal year ended December 31, 1994 versus a similar investment in
the issues that comprise the Standard and Poor's 500 Composite Stock Price
Index. On December 30, 1994, the Fund paid a quarterly and special dividend of
$0.145 and $0.031 per share, respectively, to shareholders of record on December
22, 1994.

PORTFOLIO COMPOSITION

At year-end, the Fund remained at its near fully invested position, reflecting
our optimism toward the trend of interest rates over the course of 1995 and
thereafter. On December 31, 1994, 72 percent of the portfolio's assets were
allocated to equities, compared to 63 percent at year-end 1993. While the
majority of the Fund's equity holdings were
<PAGE>
DEAN WITTER UTILITIES FUND
LETTER TO THE SHAREHOLDERS, CONTINUED

in the electric utility sector, the overall allocation was reduced throughout
the year in favor of selective telecommunications investments. With a focus on
the telecommunications sector, a diversified selection of foreign securities
accounted for 8 percent of net assets. A 26 percent allocation to high quality
fixed-income securities accounted for the balance of the portfolio, with 2
percent held in cash equivalent investments. The portfolio's fixed-income
holdings had a weighted average rating of "A3" and "A-" as measured by Moody's
Investors Service, Inc. and Standard and Poor's Corporation, respectively.
[GRAPHIC]
Given the threat of "competition"
within the electric utilities in
particular, the Fund further
streamlined its industry allocation by
increasing its holdings of those
companies having low cost power, while
reducing its holdings in less
competitive operators. The Fund's
weighting of natural gas stocks
remained stable throughout 1994, while
its exposure to the telecommunications
sector was increased. Looking forward,
we expect to augment the Fund's
participation in all facets of
telecommunications, including the high
growth "wireless" area on a worldwide
basis. In addition, the equipment
companies continue to offer strong
growth opportunities as they receive
orders to satisfy global demand for
infrastructure expansion. From a
domestic perspective, local and long
distance companies within a competitive
environment show attractive usage
growth and strong productivity.

The Fund's current plans call for the
relatively modest weighting of foreign
securities (ADR's) to increase, but
stay within the 10 percent maximum
level permitted by the prospectus. With
the prospects of an improving interest
rate environment in 1995, the Fund's
fixed-income allocation will likely be
maintained.
<PAGE>
DEAN WITTER UTILITIES FUND
LETTER TO THE SHAREHOLDERS, CONTINUED

LOOKING AHEAD

As restructuring and deregulation progress throughout all areas of the utilities
industry, we believe the Fund is well-positioned to meet its long-term
objectives of above-average yield, relatively low volatility and good long-term
growth. As markets expand globally, the Fund is postured to fully participate in
the accompanying growth through selective domestic investments and directly from
the allocation of non-U.S. securities.

We appreciate your support of Dean Witter Utilities Fund and look forward to
continuing to serve your investment objectives in the future.

Very truly yours,

[SIG]
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER UTILITIES FUND
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1994

CORPORATE BONDS (25.1%)
NATURAL GAS (3.2%)
$ 5,000 ANR Pipeline Company........................ 9.625% 11/01/21 $ 5,259,100
7,000 Arkla, Inc.................................. 10.00 11/15/19 7,185,500
14,500 Coastal Corp................................ 9.625 05/15/12 14,882,365
5,000 Colorado Interstate Gas Company............. 10.00 06/15/05 5,353,450
5,000 Enron Corp.................................. 7.00 08/15/23 4,049,400
5,000 Louisiana Land & Exploration Co. (The)...... 7.65 12/01/23 4,279,950
5,000 Mitchell Energy/Development Corp............ 9.25 01/15/02 5,100,250
5,000 Northern Illinois Gas Company............... 9.00 07/01/19 5,103,200
5,000 Northwest Pipeline Corp..................... 10.65 11/15/18 5,382,350
2,000 Northwest Pipeline Corp..................... 9.00 08/01/22 1,977,120
9,000 Panhandle Eastern Pipeline Corp............. 7.95 03/15/23 7,983,810
3,000 Southwest Gas Corp.......................... 9.375 02/01/17 2,881,920
5,000 Tennessee Gas Pipeline Company.............. 6.00 12/15/11 3,763,668
5,000 Texas Eastern Transmission Corp............. 10.375 11/15/00 5,415,750
8,000 The Williams Companies...................... 9.375 11/15/21 8,207,200
3,000 Transco Energy Company...................... 9.625 06/15/00 3,054,870
1,550 Transcontinental Gas Pipeline Corp.......... 9.125 02/01/17 1,487,876
-----------------
91,367,779
-----------------
TELECOMMUNICATIONS (3.8%)
5,000 ALLTEL Corp................................. 9.50 03/01/21 5,175,300
10,000 AT&T Corp................................... 8.625 12/01/31 9,826,100
10,000 BellSouth Telecommunications................ 6.75 10/15/33 7,899,400
10,000 Century Telephone Enterprises, Inc.......... 8.25 05/01/24 9,350,900
6,000 General Telephone & Electric Corp........... 8.50 04/01/17 5,666,940
5,000 General Telephone & Electric Corp........... 10.25 11/01/20 5,398,850
15,300 General Telephone & Electric Corp........... 7.83 05/01/23 13,356,900
5,000 MCI Communications Corp..................... 8.25 01/20/23 4,636,050
5,000 MCI Communications Corp..................... 7.75 03/15/24 4,430,500
5,000 New York Telephone.......................... 7.25 02/15/24 4,202,750
5,000 South Central Bell.......................... 8.50 08/01/29 4,799,750
10,000 Sprint Corp................................. 9.25 04/15/22 10,435,500
10,000 Tele Communications, Inc.................... 10.125 04/15/22 10,082,300
5,000 Telephone & Data Systems, Inc............... 10.00 01/15/21 5,438,600
5,000 Telephone & Data Systems, Inc............... 9.58 11/19/21 5,105,900
-----------------
105,805,740
-----------------
UTILITIES - ELECTRIC (18.1%)
1,499 AEP Generating Company...................... 9.81 12/07/22 1,572,474
14,000 Arizona Public Service Company.............. 8.00 02/01/25 12,483,940
10,000 Arkansas Power & Light Company.............. 7.00 10/01/23 7,959,000
10,000 BVPS II Funding Corp........................ 8.68 06/01/17 8,817,800
6,000 Chugach Electric Company.................... 9.14 03/15/22 6,106,140
5,000 Cincinnati Gas & Electric Company........... 10.125 05/01/20 5,397,600
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER UTILITIES FUND
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1994, CONTINUED

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
UTILITIES - ELECTRIC (CONTINUED)
$ 5,000 Cincinnati Gas & Electric Company........... 8.50% 09/01/22 $ 4,753,900
10,000 Cincinnati Gas & Electric Company........... 7.20 10/01/23 8,393,300
5,000 Commonwealth Edison Company................. 9.50 05/01/16 4,881,650
6,000 Commonwealth Edison Company................. 8.875 10/01/21 5,564,520
10,000 Commonwealth Edison Company................. 8.50 07/15/22 9,134,100
5,000 Commonwealth Edison Company................. 8.375 09/15/22 4,508,650
16,000 Consumer Power Company...................... 7.375 09/15/23 13,086,560
9,841 CTC Beaver Valley Funding Corp.............. 9.00 06/01/17 7,218,964
5,000 CTC Mansfield Funding Corp.................. 10.25 03/30/03 4,625,000
5,000 CTC Mansfield Funding Corp.................. 11.125 09/30/16 4,600,000
10,000 Dayton Power & Light Company................ 8.15 01/15/26 9,429,800
5,000 Detroit Edison Company...................... 7.74 06/01/18 4,440,150
19,830 DQU II Funding Corp......................... 8.70 06/01/16 18,350,682
10,000 Duke Power Company.......................... 8.75 03/01/21 9,745,100
5,000 Duke Power Company.......................... 8.625 03/01/22 4,832,850
9,000 Duke Power Company.......................... 7.00 07/01/33 7,396,830
5,000 Duquesne Lighting Company................... 7.625 04/15/23 4,388,500
5,000 Florida Power & Light Company............... 7.75 02/01/23 4,459,500
5,000 Florida Power & Light Company............... 7.625 06/01/24 4,378,750
10,000 GGIB Funding Corp........................... 7.43 01/15/11 8,694,600
10,000 Gulf States Utility Company................. 8.94 01/01/22 9,492,500
5,000 Houston Light & Power Company............... 8.75 03/01/22 4,911,150
5,000 Houston Light & Power Company............... 7.75 03/15/23 4,425,650
10,000 Illinois Power Company...................... 8.75 07/01/21 9,638,900
10,000 Illinois Power Company...................... 7.50 07/15/25 8,461,900
7,000 Indiantown Cogeneration LP.................. 9.26 12/15/10 7,066,220
8,000 Long Island Lighting Company................ 8.90 07/15/19 6,547,200
5,000 Long Island Lighting Company................ 9.75 05/01/21 4,594,150
5,100 Long Island Lighting Company................ 8.20 03/15/23 3,894,309
5,000 Long Island Lighting Company................ 9.625 07/01/24 4,523,500
10,100 National Cooperative Services Corp.......... 9.375 01/02/11 10,178,982
2,903 National Rural Utilities Finance Corp....... 9.48 01/01/12 2,962,134
5,250 National Rural Utilities Finance Corp....... 9.00 09/01/21 5,215,875
5,000 New York State Electric & Gas Corp.......... 9.875 02/01/20 5,333,900
8,912 Niagara Mohawk Power Corp................... 8.77 01/01/18 7,780,087
3,750 Niagara Mohawk Power Corp................... 8.75 04/01/22 3,372,713
9,500 Niagara Mohawk Power Corp................... 8.50 07/01/23 8,311,550
4,914 Northeast Utilities......................... 8.58 12/01/06 4,774,376
6,750 Pacific Gas & Electric Company.............. 7.25 03/01/26 5,614,988
8,000 Pacific Gas & Electric Company.............. 7.25 08/01/26 6,651,840
3,000 Pennsylvania Power & Light Company.......... 9.25 10/01/19 3,024,600
2,000 Pennsylvania Power & Light Company.......... 9.375 07/01/21 2,051,980
8,000 Philadelphia Electric Company............... 8.625 06/01/22 7,646,240
10,000 Philadelphia Electric Company............... 7.75 05/01/23 8,730,400
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER UTILITIES FUND
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1994, CONTINUED

TOTAL CORPORATE BONDS
(IDENTIFIED COST $757,243,377)..................................... 709,006,457
-----------------

U.S. GOVERNMENT AGENCIES & OBLIGATIONS (0.7%)
35,000 Federal National Mortgage Association
(Principal Strip)........................... 0.00 10/09/19 4,698,423
1,280 Government National Mortgage Association.... 9.50 06/15/20 1,320,323
5,000 Tennessee Valley Authority.................. 8.625 11/15/29 4,904,150
21,200 Tennessee Valley Authority.................. 0.00 04/15/42 4,278,935
5,000 Tennessee Valley Authority.................. 7.85 06/15/44 4,464,068
-----------------

TOTAL U.S. GOVERNMENT AGENCIES & OBLIGATIONS
(IDENTIFIED COST $19,026,481)...................................... 19,665,899
-----------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER UTILITIES FUND
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1994, CONTINUED

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------------------------------------------
<C> <S> <C>

PREFERRED STOCKS (0.9%)
NATURAL GAS (0.0%)
9,100 ENSERCH Corp. (Series E) (Adjustable)................................ $ 800,800
-----------------
TELECOMMUNICATIONS (0.2%)
200,000 GTE Delaware Corp. $2.3125 (Series A)................................ 5,150,000
-----------------
UTILITIES - ELECTRIC (0.7%)
144,500 Arizona Public Service Company $1.8125 (Series W).................... 2,871,937
200,000 Georgia Power Capital LP $2.25 (Series A)............................ 5,025,000
27,965 Gulf States Utilities Company $9.96.................................. 2,870,328
29,000 Illinois Power Company 8.24%......................................... 1,348,500
160,000 Long Island Lighting Company 7.95% (Series AA)....................... 3,720,000
75,000 Met-Ed Capital 9.00% (Series A)...................................... 1,837,500
30,000 Public Service Electric & Gas Company 7.52%.......................... 2,595,000
-----------------
20,268,265
-----------------

TOTAL PREFERRED STOCKS
(IDENTIFIED COST $27,921,113)........................................ 26,219,065
-----------------

COMMON STOCKS (71.9%)
NATURAL GAS (7.7%)
345,000 Atlanta Gas Light Company............................................ 10,350,000
410,000 Burlington Resources, Inc............................................ 14,350,000
540,000 Coastal Corp......................................................... 13,905,000
345,000 Consolidated Natural Gas Company..................................... 12,247,500
645,000 EL Paso Natural Gas Company.......................................... 19,672,500
950,000 Enron Corp........................................................... 28,975,000
610,000 ENSERCH Corp......................................................... 8,006,250
315,000 Louisiana Land & Exploration Company (The)........................... 11,458,125
235,000 New Jersey Resources Corp............................................ 5,316,875
680,000 Panhandle Eastern Pipeline Corp...................................... 13,430,000
420,000 Sonat, Inc........................................................... 11,760,000
765,000 Tenneco, Inc......................................................... 32,512,500
1,220,000 The Williams Companies............................................... 30,652,500
145,000 Washington Gas Light Company......................................... 4,857,500
-----------------
217,493,750
-----------------
TELECOMMUNICATIONS (24.6%)
790,000 Airtouch Communications Corp.*....................................... 23,008,750
1,270,000 ALLTEL Corp.......................................................... 38,258,750
1,140,000 Ameritech Corp....................................................... 46,027,500
1,040,000 AT&T Corp............................................................ 52,260,000
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER UTILITIES FUND
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1994, CONTINUED

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS (CONTINUED)
660,000 BCE, Inc............................................................. $ 21,202,500
540,000 Bell Atlantic Corp................................................... 26,865,000
500,000 BellSouth Corp....................................................... 27,062,500
320,000 British Telecommunications PLC (ADR)................................. 19,240,000
235,000 Cable & Wireless PLC (ADR)........................................... 4,112,500
590,000 Century Telephone Enterprises, Inc................................... 17,405,000
155,000 Compania de Telefonos de Chile (ADR)................................. 12,206,250
830,000 Comsat Corp.......................................................... 15,458,750
220,000 Ericsson (L.M.) Telephone Company (ADR).............................. 12,127,500
1,100,000 GTE Corp............................................................. 33,412,500
1,125,000 Hong Kong Telecommunications, Ltd. (ADR)............................. 21,515,625
1,565,000 MCI Communications Corp.............................................. 28,756,875
300,000 Motorola, Inc........................................................ 17,362,500
1,260,000 NYNEX Corp........................................................... 46,305,000
750,000 Pacific Telesis Group, Inc........................................... 21,375,000
210,000 Philippine Long Distance Telephone................................... 11,576,250
990,000 Rochester Telephone Corp............................................. 20,913,750
980,000 SBC Communications, Inc.............................................. 39,567,500
940,000 Sprint Corp.......................................................... 25,967,500
385,000 Telecommunications Corp. New Zealand, Ltd. (ADR)..................... 19,779,375
170,000 Telefonica de Argentina, S.A. (ADR).................................. 9,010,000
670,000 Telefonica Espana, S.A. (ADR)........................................ 23,533,750
600,000 Telefonos de Mexico, S.A. Series L (ADR)............................. 24,600,000
770,000 U.S. West, Inc....................................................... 27,431,250
290,000 Vodafone Group PLC (ADR)............................................. 9,751,250
-----------------
696,093,125
-----------------
UTILITIES - ELECTRIC (39.6%)
1,295,000 Allegheny Power Systems, Inc......................................... 28,166,250
675,000 American Electric Power, Inc......................................... 22,190,625
275,000 Atlantic Energy, Inc................................................. 4,846,875
815,000 Baltimore Gas & Electric Company..................................... 18,031,875
620,000 Boston Edison Company................................................ 14,802,500
270,000 Carolina Power & Light Company....................................... 7,188,750
100,000 Centerior Energy Corp................................................ 887,500
880,000 Central & South West Corp............................................ 19,910,000
1,830,470 CINergy Corp......................................................... 42,787,236
200,000 CIPSCO, Inc.......................................................... 5,400,000
640,000 CMS Energy Corp...................................................... 14,640,000
740,000 Consolidated Edison Company New York, Inc............................ 19,055,000
290,000 Delmarva Power & Light Company....................................... 5,220,000
1,175,000 Detroit Edison Company............................................... 30,696,875
1,000,000 Dominion Resources, Inc.............................................. 35,750,000
1,200,000 DPL, Inc............................................................. 24,600,000
370,000 DQE, Inc............................................................. 10,961,250
500,000 Duke Power Company................................................... 19,062,500
410,000 Empresa Nacional de Electricidad, S.A. (ADR)......................... 16,605,000
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER UTILITIES FUND
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1994, CONTINUED

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- -----------------------------------------------------------------------------------------------------
<C> <S> <C>
UTILITIES - ELECTRIC (CONTINUED)
175,000 Enersis, S.A. (ADR).................................................. $ 4,856,250
795,000 Entergy Corp......................................................... 17,390,625
635,000 Florida Progress Corp................................................ 19,050,000
790,000 FPL Group, Inc....................................................... 27,748,750
1,090,000 General Public Utilities Corp........................................ 28,612,500
655,000 Houston Industries, Inc.............................................. 23,334,375
960,000 Illinova Corp........................................................ 20,880,000
1,050,000 Kansas City Power & Light Company.................................... 24,543,750
970,000 Long Island Lighting Company......................................... 14,913,750
175,000 MDU Resources Group, Inc............................................. 4,746,875
660,000 Montana Power Company................................................ 15,180,000
900,000 New England Electric System.......................................... 28,912,500
630,000 New York State Electric & Gas Corp................................... 11,970,000
710,000 Niagara Mohawk Power Corp............................................ 10,117,500
860,000 NIPSCO Industries, Inc............................................... 25,585,000
1,365,000 Northeast Utilities.................................................. 29,518,125
305,000 Northern States Power Company, Minnesota............................. 13,420,000
1,190,000 Ohio Edison Company.................................................. 22,015,000
170,000 Oklahoma Gas & Electric Company...................................... 5,631,250
1,040,000 Pacific Gas & Electric Company....................................... 25,350,000
1,025,000 PacifiCorp........................................................... 18,578,125
930,000 Peco Energy Company.................................................. 22,785,000
890,000 Pennsylvania Power & Light Company................................... 16,910,000
995,000 Pinnacle West Capital Corp........................................... 19,651,250
605,000 Portland General Corp................................................ 11,646,250
570,000 Potomac Electric Power Company....................................... 10,473,750
875,000 Public Service Company of Colorado................................... 25,703,125
1,125,000 Public Service Enterprise Group, Inc................................. 29,812,500
310,000 Puget Sound Power & Light Company.................................... 6,238,750
490,000 Rochester Gas & Electric Corp........................................ 10,228,750
1,040,000 San Diego Gas & Electric Company..................................... 20,020,000
385,000 SCANA Corp........................................................... 16,218,125
1,590,000 SCE Corp............................................................. 23,253,750
1,560,000 Southern Company..................................................... 31,200,000
395,000 Southwestern Public Service Company.................................. 10,467,500
425,000 TECO Energy, Inc..................................................... 8,553,125
1,150,000 Texas Utilities Electric Company..................................... 36,800,000
1,035,000 Unicom Corp.......................................................... 24,840,000
1,000,000 Union Electric Company............................................... 35,375,000
515,000 Utilicorp United, Inc................................................ 13,647,500
830,000 Washington Water Power Company....................................... 11,308,750
-----------------
1,118,289,736
-----------------

TOTAL COMMON STOCKS
(IDENTIFIED COST $1,913,135,096)..................................... 2,031,876,611
-----------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER UTILITIES FUND
PORTFOLIO OF INVESTMENTS DECEMBER 31, 1994, CONTINUED

SHORT-TERM INVESTMENTS (0.6%)
COMMERCIAL PAPER (a) (0.4%)
FINANCE - DIVERSIFIED
$ 13,000 American Express Credit Corp. (Amortized
Cost $12,995,288)........................... 5.80 % 01/03/95 $ 12,995,288
-----------------

REPURCHASE AGREEMENT (0.2%)
4,573 The Bank of New York (dated 12/30/94;
proceeds $4,575,029; collateralized by
$4,793,044 U.S. Treasury Bill 6.43% due
06/08/95 valued at $4,664,928 (Identified
Cost $4,573,459)............................ 3.125 01/03/95 4,573,459
-----------------

TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST $17,568,747)...................................... 17,568,747
-----------------

TOTAL INVESTMENTS
(IDENTIFIED COST $2,734,894,814) (B).................. 99.2% 2,804,336,779

OTHER ASSETS IN EXCESS OF LIABILITIES................. 0.8 22,654,522
----- -------------

NET ASSETS............................................ 100.0% $2,826,991,301
----- -------------
----- -------------

<FN>
- ---------------------
ADR American Depository Receipt.
* Non-income producing security.
** Resale is restricted to qualified institutional investors.
(a) Commercial paper was purchased on a discount basis. The interest rates
shown have been adjusted to reflect a bond equivalent yield.
(b) The aggregate cost for federal income tax purposes is $2,737,107,321; the
aggregate gross unrealized appreciation is $237,637,298 and the aggregate
gross unrealized depreciation is $170,407,840, resulting in net unrealized
appreciation of $67,229,458.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER UTILITIES FUND
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1994

<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $2,734,894,814)........................... $2,804,336,779
Receivable for:
Interest................................................ 17,564,963
Dividends............................................... 11,283,824
Shares of beneficial interest sold...................... 3,018,957
Foreign withholding taxes reclaimed..................... 152,777
Prepaid expenses and other assets........................... 25,712
--------------

TOTAL ASSETS........................................... 2,836,383,012
--------------

LIABILITIES:
Payable for:
Plan of distribution fee................................ 2,585,352
Shares of beneficial interest repurchased............... 2,554,287
Dividends to shareholders............................... 2,375,089
Investment management fee............................... 1,302,582
Accrued expenses and other payables......................... 574,401
--------------

TOTAL LIABILITIES...................................... 9,391,711
--------------

NET ASSETS:
Paid-in-capital............................................. 2,782,049,725
Net unrealized appreciation................................. 69,441,965
Accumulated undistributed net investment income............. 6,874,788
Accumulated net realized loss............................... (31,375,177)
--------------

NET ASSETS............................................. $2,826,991,301
--------------
--------------

NET ASSET VALUE PER SHARE:
229,753,449 SHARES OUTSTANDING (UNLIMITED SHARES
AUTHORIZED OF $.01 PAR VALUE).............................
$12.30
--------------
--------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER UTILITIES FUND
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994

<TABLE>
<S> <C>
NET INVESTMENT INCOME:

INCOME
Interest.................................................... $ 88,803,992
Dividends (net of foreign withholding tax of $882,798)...... 117,498,778
-------------

TOTAL INCOME........................................... 206,302,770
-------------

EXPENSES:
Plan of distribution fee.................................... 32,283,970
Investment management fee................................... 17,315,953
Transfer agent fees and expenses............................ 3,289,891
Custodian fees.............................................. 224,312
Shareholder reports and notices............................. 184,588
Registration fees........................................... 178,874
Professional fees........................................... 69,020
Trustees' fees and expenses................................. 29,697
Other....................................................... 53,016
-------------

TOTAL EXPENSES......................................... 53,629,321
-------------

NET INVESTMENT INCOME.................................. 152,673,449
-------------

NET REALIZED AND UNREALIZED LOSS:
Net realized loss........................................... (30,362,030)
Net change in unrealized appreciation....................... (485,812,725)
-------------

NET LOSS ON INVESTMENTS................................ (516,174,755)
-------------

NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $(363,501,306)
-------------
-------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER UTILITIES FUND
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
DECEMBER 31, 1994 DECEMBER 31, 1993
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>

INCREASE (DECREASE) IN NET ASSETS:

OPERATIONS:
Net investment income....................................... $ 152,673,449 $ 156,417,384
Net realized gain (loss).................................... (30,362,030) 33,021,452
Net change in unrealized appreciation....................... (485,812,725) 203,557,787
----------------- -----------------

NET INCREASE (DECREASE)................................ (363,501,306) 392,996,623
----------------- -----------------

DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income....................................... (149,286,224) (155,892,059)
Net realized gain........................................... (4,389,389) (31,752,536)
----------------- -----------------

TOTAL.................................................. (153,675,613) (187,644,595)
----------------- -----------------
Net increase (decrease) from transactions in shares of
beneficial interest....................................... (536,946,220) 749,931,416
----------------- -----------------

TOTAL INCREASE (DECREASE).............................. (1,054,123,139) 955,283,444
----------------- -----------------

NET ASSETS:
Beginning of period......................................... 3,881,114,440 2,925,830,996
----------------- -----------------

END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF
$6,874,788 AND $3,487,563, RESPECTIVELY)................. $ 2,826,991,301 $ 3,881,114,440
----------------- -----------------
----------------- -----------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1994

1. ORGANIZATION AND ACCOUNTING POLICIES

Dean Witter Utilities 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 December 8, 1987 and commenced operations on April 29, 1988.

The following is a summary of significant accounting policies:

A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York or American Stock Exchange is valued at its latest sale price on that
exchange prior to the time when assets are valued (if there were no sales that
day, the security is valued at the latest bid price); (2) all other portfolio
securities for which over-the-counter market quotations are readily available
are valued at the latest available bid price prior to the time of valuation; (3)
when market quotations are not readily available, portfolio securities are
valued at their fair value as determined in good faith under procedures
established by and under the general supervision of the Trustees; (4) certain of
the Fund's portfolio securities may be valued by an outside pricing service
approved by the Trustees. The pricing service utilizes a matrix system
incorporating security quality, maturity and coupon as the evaluation model
parameters, and/or research and evaluations by its staff, including review of
broker-dealer market price quotations, in determining what it believes is the
fair valuation of the portfolio securities valued by such pricing service; and
(5) 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 on the identified cost method.
Discounts on securities purchased are amortized over the life of the respective
securities. The Fund does not amortize premiums on securities purchased.
Dividend income is recorded on the ex-dividend date. 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 income to its shareholders.
Accordingly, no federal income tax provision is required.
<PAGE>
DEAN WITTER UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1994, CONTINUED

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 annual rate
of 0.65% to the portion of daily net assets not exceeding $500 million; 0.55% to
the portion of daily net assets exceeding $500 million but not exceeding $1
billion; 0.525% to the portion of daily net assets exceeding $1 billion but not
exceeding $1.5 billion; 0.50% to the portion of daily net assets exceeding $1.5
billion but not exceeding $2.5 billion; 0.475% to the portion of daily net
assets exceeding $2.5 billion but not exceeding $3.5 billion; 0.45% to the
portion of daily net assets exceeding $3.5 billion but not exceeding $5 billion;
and 0.425% to the portion of daily net assets exceeding $5 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
<PAGE>
DEAN WITTER UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1994, CONTINUED

daily and payable monthly, at an annual rate of 1.0% 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 others, 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 incurred 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 year ended December 31, 1994,
it received approximately $7,746,000 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 year ended December 31, 1994 aggregated
$347,486,895 and $776,146,292, respectively. Included in the aforementioned are
purchases and sales of U.S. Government securities of $84,088,576 and
$144,606,999, respectively.

For the year ended December 31, 1994, the Fund incurred brokerage commissions of
$65,065 with Dean Witter Reynolds Inc. for portfolio transactions executed on
behalf of the Fund.
<PAGE>
DEAN WITTER UTILITIES FUND
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1994, CONTINUED

Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At December 31, 1994, the Fund had
transfer agent fees and expenses payable of approximately $360,000.

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, 1994, included in Trustees' fees and expenses in the
Statement of Operations amounted to $7,938. At December 31, 1994, the Fund had
an accrued pension liability of $46,662 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 YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, 1994 DECEMBER 31, 1993
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- --------------- ----------- ---------------
<S> <C> <C> <C> <C>
Sold........................................................ 36,630,013 $ 485,880,364 88,274,539 $ 1,279,510,064
Reinvestment of dividends and distributions................. 9,807,420 124,559,730 10,686,468 154,738,787
----------- --------------- ----------- ---------------
46,437,433 610,440,095 98,961,007 1,434,248,851
Repurchased................................................. (87,372,992) (1,147,386,315) (47,067,729) (684,317,435)
----------- --------------- ----------- ---------------
Net increase (decrease)..................................... (40,935,559) $ (536,946,220) 51,893,278 $ 749,931,416
----------- --------------- ----------- ---------------
----------- --------------- ----------- ---------------
</TABLE>

6. FEDERAL INCOME TAX STATUS

At December 31, 1994, the Fund had net capital loss carryovers of approximately
$14,555,000 which will be available through December 31, 2002 to offset future
capital gains to the extent provided by regulations. Capital losses incurred
after October 31 ("post-October losses") within the taxable year are deemed to
arise on the first business day of the Fund's next taxable year. The Fund
incurred and will elect to defer net capital losses of approximately $14,608,000
during fiscal 1994. As of December 31, 1994, the Fund had temporary book/tax
differences primarily attributable to post-October loss deferrals and capital
loss deferrals on wash sales.
<PAGE>
DEAN WITTER UTILITIES FUND
FINANCIAL HIGHLIGHTS

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

<TABLE>
<CAPTION>
FOR THE
PERIOD
APRIL 29,
FOR THE YEAR ENDED 1988*
DECEMBER 31 THROUGH
----------------------------------------------------------------- DECEMBER
1994 1993 1992 1991 1990 1989 31, 1988
- ----------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:

Net asset value,
beginning of period............... $ 14.34 $ 13.37 $ 12.93 $ 11.48 $ 12.22 $ 10.41 $ 10.00
---------- --------- --------- --------- --------- --------- ---------

Net investment income.............. 0.63 0.61 0.63 0.65 0.65 0.63 0.40
Net realized and unrealized gain
(loss) on investments............. (2.04) 1.09 0.47 1.45 (0.71) 1.86 0.38
---------- --------- --------- --------- --------- --------- ---------

Total from investment operations... (1.41) 1.70 1.10 2.10 (0.06) 2.49 0.78
---------- --------- --------- --------- --------- --------- ---------

Less dividends and distributions
from:
Net investment income........... (0.61) (0.61) (0.63) (0.65) (0.65) (0.67) (0.36)
Net realized gain............... (0.02) (0.12) (0.03) -- (0.03) (0.01) (0.01)
---------- --------- --------- --------- --------- --------- ---------

Total dividends and
distributions..................... (0.63) (0.73) (0.66) (0.65) (0.68) (0.68) (0.37)
---------- --------- --------- --------- --------- --------- ---------

Net asset value, end of period..... $ 12.30 $ 14.34 $ 13.37 $ 12.93 $ 11.48 $ 12.22 $ 10.41
---------- --------- --------- --------- --------- --------- ---------
---------- --------- --------- --------- --------- --------- ---------

TOTAL INVESTMENT RETURN+........... (9.90)% 12.79% 8.75% 18.89% (0.27)% 24.51% 7.90%(1)

RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 1.64% 1.46% 1.59% 1.59% 1.67% 1.68% 1.84%(2)

Net investment income.............. 4.67% 4.32% 5.05% 5.58% 5.85% 6.07% 6.69%(2)

SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands......................... $2,826,991 $3,881,114 $2,925,831 $1,959,042 $1,369,038 $1,131,119 $457,845

Portfolio turnover rate............ 11% 16% 14% 13% 13% 25% 12%(1)
<FN>

- ---------------------
* Commencement of operations.
+ Does not reflect the deduction of sales charge.
(1) Not annualized.
(2) Annualized.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER UTILITIES FUND
REPORT OF INDEPENDENT ACCOUNTANTS

TO THE SHAREHOLDERS AND TRUSTEES
OF DEAN WITTER UTILITIES 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 Utilities Fund (the
"Fund") at December 31, 1994, 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 six years in the period
then ended and for the period April 29, 1988 (commencement of operations)
through December 31, 1988, 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, 1994 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.

PRICE WATERHOUSE LLP
1177 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
FEBRUARY 13, 1995

- --------------------------------------------------------------------------------
1994 FEDERAL TAX NOTICE (UNAUDITED)

During the year ended December 31, 1994, the Fund paid to
shareholders $0.0171 per share from long-term capital gains.
<PAGE>

TRUSTEES
Jack F. Bennett
Michael Bozic DEAN WITTER
Charles A. Fiumefreddo UTILITIES FUND
Edwin J. Garn
John R. Haire
Dr. Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Philip J. Purcell
John L. Schroeder

OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Sheldon Curtis
Vice President, Secretary and General Counsel
Rajesh K. Gupta
Vice President
Thomas F. Caloia
Treasurer

TRANSFER AGENT
Dean Witter Trust Company
Harborside Financial Center - Plaza Two
Jersey City, New Jersey 07311

INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
1177 Avenue of the Americas
New York, New York 10036

INVESTMENT MANAGER
Dean Witter InterCapital Inc.
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 ANNUAL REPORT
accompanied by an effective prospectus. DECEMBER 31, 1994

<PAGE>

DEAN WITTER UTILITIES FUND
GROWTH OF $10,000
($ IN THOUSANDS)

DATE TOTAL S&P 500
<S> <C> <C>

April 29, 1988 $10,000 $10,000
December 31, 1988 $10,790 $10,890
December 31, 1989 $13,435 $14,335
December 31, 1990 $13,400 $13,891
December 31, 1991 $15,930 $18,115
December 31, 1992 $17,325 $19,494
December 31, 1993 $19,541 $21,456
December 31, 1994 $17,607 (3) $21,738

AVERAGE ANNUAL TOTAL RETURNS
1 YEAR 5 YEARS LIFE OF FUND
<S> <C> <C>

- 9.90(1) 5.56(1) 8.85(1)
-14.19(2) 5.23(2) 8.85(2)

Fund S&P 500 (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 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, 1994.

(4) The S&P 500 is a broad-based index, the performance of which is based on
the average performance of 500 widely held common stocks. The index does
not include any expenses, fees or charges.

</TABLE>