MORGAN STANLEY DEAN WITTER STRATEGIST FUND, N-30D, 1999-09-29

MORGAN STANLEY DEAN WITTER STRATEGIST FUND
N-30D, 1999-09-29

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<PAGE>

MORGAN STANLEY DEAN WITTER STRATEGIST FUND TWO WORLD TRADE CENTER,
LETTER TO THE SHAREHOLDERS JULY 31, 1999 NEW YORK, NEW YORK 10048

DEAR SHAREHOLDER:

While the 12-month period ended July 31, 1999 provided above-average returns to
equity investors, it was noteworthy for an increase in the volatility of both
the stock and bond markets. August 1998, the first month of Morgan Stanley Dean
Witter Strategist Fund's fiscal year, saw equity markets collapse as emerging
economies around the globe suffered from enormous capital outflows tied to
currency devaluations and huge debt burdens. The U.S. equity market lost
approximately 14.4 percent for the month alone, as measured by the Standard &
Poor's 500 Composite Stock Price Index (S&P 500). The market's correction caused
many pundits to begin speculating that the great bull market of the 1990s was
coming to a tumultuous close. Meanwhile, the bond market posted an unprecedented
rally during this period as a flight-to-quality mentality caused many investors
to seek out the relative safety of U.S. government bonds. From a high of 5.67
percent in August 1998, the yield of the 30-year U.S. Treasury bond declined to
4.71 percent by October.

The stock market correction would prove to be short-lived. The continued
profitability of large U.S. corporations combined with depressed commodity
prices and an aggressive Federal Reserve Board, which lowered interest rates in
dramatic fashion in the fall of 1998, fueled the stock market's late 1998 rally.
In fact, from its August low through the end of this July, stocks provided a
total return in excess of 40 percent. Bonds, on the other hand, fearing a
revival of global economic growth, reversed course, taking back all the gains
earned in the fall of 1998.

FUND PERFORMANCE

For the 12-month period ended July 31, 1999, the Fund's Class B shares posted a
total return of 9.23 percent compared to 10.45 percent for the Lipper Flexible
Portfolio Funds Index, 20.21 percent for the S&P 500

<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
LETTER TO THE SHAREHOLDERS JULY 31, 1999, CONTINUED

and 2.33 percent for the Lehman Brothers Government/Corporate Bond Index. For
the same period, the Fund's Class A, C and D shares returned 10.01 percent, 9.15
percent and 10.23 percent, respectively. The performance of the Fund's four
share classes varies because of different expenses. The accompanying chart
compares the Fund's performance with that of the Lipper, S&P 500 and Lehman
indexes.

The Fund's performance for the fiscal year was hindered by its overweighting of
equities during the stock market's sharp decline in August through early
October. As outlined above, this period was a challenging one for equity
investors, because the market experienced a great deal of volatility, due to the
effects of the Asian economic crisis. While the Fund underperformed its Lipper
peer group for the fiscal year, its overweighting of equities has enabled it to
outperform its peers for the first seven months of 1999 (8.31 percent for the
Fund's Class B shares versus 4.45 percent for all flexible portfolio funds).

INVESTMENT STRATEGY

While unsettling in its magnitude, the extreme volatility experienced this past
year is consistent with that of previous extended bull markets. As valuation
levels climb, positive and negative events alike generally have a much more
jarring impact on equity and fixed-income prices. Morgan Stanley Dean Witter
Strategist Fund, which maintains a flexible approach to the asset classes,
combines stocks, bonds and cash to provide competitive returns while at the same
time attempting to minimize volatility.

Throughout the fiscal year, the Fund maintained an asset allocation of 70
percent equities, 20 percent bonds and 10 percent cash. No adjustments were made
to this mix during the year. While market volatility alone might be viewed as
reason enough to tamper with the allocation, we viewed the environment mentioned
above -- outstanding profits, declining inflationary pressures and an
accommodative Federal Reserve -- as ultimately beneficial to equity investors.
Knowing from past experience that it is virtually impossible to time perfectly
the entry and exit points into and out of asset classes, we chose to let our
fundamental research guide our decision to overweight stocks, underweight bonds
and maintain a neutral cash reserve. While this strategy hindered the Fund early
in its fiscal year, it proved rewarding during the first half of 1999 as the
equity markets soared to new all-time highs.

2
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
LETTER TO THE SHAREHOLDERS JULY 31, 1999, CONTINUED

LOOKING AHEAD

As we enter the new fiscal year, we maintain the asset allocation target
highlighted above. However, we caution that the same price run-up that drove the
stock market to record highs this year has also stretched valuations to very
high levels historically. Coupled with the most recent Federal Reserve moves to
raise short-term interest rates, as well as the looming uncertainty related to
Y2K preparedness on the part of main-frame computers worldwide, a less
aggressive asset allocation may prove justifiable as we enter autumn. In the
meantime, the powerful earnings growth cycle enjoyed by most U.S. industries
today should continue to support equity prices in the nearer term.

We continue in our view that flexible funds, such as Morgan Stanley Dean Witter
Strategist Fund, are ideal vehicles for investors seeking both long-term total
returns and more moderate levels of price volatility, particularly given today's
increasingly volatile environment.

On May 1, 1999, Mitchell M. Merin was named President of the Morgan Stanley Dean
Witter Funds. Mr. Merin is the President and Chief Operating Officer of Asset
Management for Morgan Stanley Dean Witter & Co. and President, Chief Executive
Officer and Director of Morgan Stanley Dean Witter Advisors Inc., the Fund's
investment manager. He also serves as Chairman, Chief Executive Officer and
Director of the Fund's distributor and transfer agent.

We appreciate your ongoing support of Morgan Stanley Dean Witter Strategist Fund
and look forward to continuing to serve your investment needs.

Very truly yours,

/s/ CHARLES A. FIUMEFREDDO /s/ MITCHELL M. MERIN
CHARLES A. FIUMEFREDDO MITCHELL M. MERIN
CHAIRMAN OF THE BOARD PRESIDENT

3
<PAGE>

MORGAN STANLEY DEAN WITTER STRATEGIST FUND
FUND PERFORMANCE JULY 31, 1999

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
GROWTH OF $10,000 -- CLASS B SHARES
($ in Thousands)

Fund S&P 500(4) Lehman(5) Lipper(6)
<S> <C> <C> <C> <C>
7/31/89 $10,000 $10,000 $10,000 $10,000
7/31/90 $10,721 $10,646 $10,623 $10,484
7/31/91 $12,400 $12,006 $11,710 $11,881
7/31/92 $13,873 $13,539 $13,541 $13,425
7/31/93 $14,926 $14,719 $15,035 $14,820
7/31/94 $15,454 $15,478 $15,016 $15,308
7/31/95 $17,935 $19,508 $16,536 $17,832
7/31/96 $19,992 $22,729 $17,414 $19,403
7/31/97 $25,936 $34,562 $19,293 $25,005
7/31/98 $29,248 $41,224 $20,848 $27,949
7/31/99 $31,946(3) $49,555 $21,334 $30,868
</TABLE>

PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS. PERFORMANCE FOR CLASS
A, CLASS C, AND CLASS D SHARES WILL VARY FROM THE PERFORMANCE OF CLASS B
SHARES SHOWN ABOVE DUE TO DIFFERENCES IN SALES CHARGES AND EXPENSES.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
- ----------------------------------------------------------------------------------------------------
CLASS B SHARES* CLASS A SHARES+
- ----------------------------------------------- -----------------------------------------------
PERIOD ENDED 7/31/99 PERIOD ENDED 7/31/99
- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
1 Year 9.23%(1) 4.24%(2) 1 Year 10.01%(1) 4.24%(2)
5 Years 15.63(1) 15.41(2) Since Inception (7/28/97) 12.74(1) 9.76(2)
10 Years 12.32(1) 12.32(2)
</TABLE>

<TABLE>
<CAPTION>
CLASS C SHARES++ CLASS D SHARES#
- ----------------------------------------------- -----------------------------------------------
PERIOD ENDED 7/31/99 PERIOD ENDED 7/31/99
- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
1 Year 9.15%(1) 8.16%(2) 1 Year 10.23%(1)
Since Inception (7/28/97) 11.90(1) 11.90(2) Since Inception (7/28/97) 13.01(1)
</TABLE>

- ------------------------
(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 sales charge. See the Fund's current prospectus for
complete details on fees and sales charges.
(3) Closing value assuming a complete redemption on July 31, 1999.
(4) The Standard & Poor's 500 Stock Index (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 performance of the Index does not include any expenses,
fees or charges. The Index is unmanaged and should not be considered an
investment.
(5) The Lehman Brothers Government/Corporate Bond Index tracks the performance
of government and corporate obligations, including U.S. government agency
and U.S. treasury securities and corporate and yankee bonds. The index is
unmanaged and should not be considered an investment.
(6) The Lipper Flexible Portfolio Funds Index is an equally-weighted
performance index of the largest qualifying funds (based on net assets) in
the Lipper Flexible Portfolio Fund objective. The Index, which is adjusted
for capital gains distributions and income dividends, is unmanaged and
should not be considered an investment. There are currently 30 funds
represented in this index.
* The maximum contingent deferred sales charge (CDSC) for Class B is 5.0%. The
CDSC declines to 0% after six years.
+ The maximum front-end sales charge for Class A is 5.25%.
++ The maximum CDSC for Class C shares is 1% for shares redeemed within one year
of purchase.
# Class D shares have no sales charge.

4
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
PORTFOLIO OF INVESTMENTS JULY 31, 1999
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (68.7%)
ADVERTISING (1.0%)
420,000 Young & Rubicam, Inc................................................................ $ 19,031,250
--------------
AEROSPACE (0.0%)
2,600 Cordant Technologies, Inc........................................................... 116,512
--------------
AIRLINES (0.0%)
6,101 British Airways PLC (United Kingdom)................................................ 40,041
--------------
ALCOHOLIC BEVERAGES (0.0%)
12,700 Diageo PLC
(United Kingdom).................................................................. 129,221
--------------
ALUMINUM (0.0%)
3,600 Alcoa, Inc.......................................................................... 215,550
--------------
BEVERAGES - NON-ALCOHOLIC (0.0%)
13,000 PepsiCo, Inc........................................................................ 508,625
--------------
BIOTECHNOLOGY (1.6%)
350,000 Centocor, Inc.*..................................................................... 19,512,500
500,000 Pe Corp Celera Genomics Group....................................................... 13,250,000
--------------
32,762,500
--------------
BROADCASTING (0.0%)
3,200 Clear Channel Communications, Inc.*................................................. 222,600
--------------
BUILDING MATERIALS (0.0%)
33,157 Blue Circle Industries PLC (United Kingdom)......................................... 236,428
--------------
BUILDING MATERIALS/
DIY CHAINS (0.4%)
139,360 Home Depot, Inc. (The).............................................................. 8,892,910
--------------
CABLE TELEVISION (0.5%)
140,000 MediaOne Group, Inc.*............................................................... 10,132,500
--------------
CASINO/GAMBLING (0.6%)
1,110,000 Park Place Entertainment Corp.*..................................................... 11,308,125
--------------
CLOTHING/SHOE/ACCESSORY STORES (1.7%)
459,585 Gap, Inc. (The)..................................................................... 21,485,599
222,600 Payless ShoeSource, Inc.*........................................................... 12,020,400
--------------
33,505,999
--------------
COMPUTER COMMUNICATIONS (1.3%)
426,534 Cisco Systems, Inc.*................................................................ 26,498,425
--------------
COMPUTER HARDWARE (2.8%)
492,640 Dell Computer Corp.*................................................................ 20,136,660
10,740 Gateway, Inc........................................................................ 818,254

<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
500,000 Sun Microsystems, Inc.*............................................................. $ 33,906,250
--------------
54,861,164
--------------
COMPUTER SOFTWARE (2.4%)
90,000 Adobe Systems, Inc.................................................................. 7,711,875
200,000 Microsoft Corp.*.................................................................... 17,150,000
900,000 Novell, Inc.*....................................................................... 23,118,750
--------------
47,980,625
--------------
CONSTRUCTION/AGRICULTURAL EQUIPMENT/TRUCKS (0.8%)
270,000 PACCAR, Inc......................................................................... 15,390,000
--------------
CONSUMER ELECTRONICS/APPLIANCES (1.9%)
273,600 Maytag Corp......................................................................... 19,049,400
261,900 Whirlpool Corp...................................................................... 18,774,956
--------------
37,824,356
--------------
CONTRACT DRILLING (1.1%)
680,000 Diamond Offshore Drilling, Inc...................................................... 21,760,000
--------------
DEPARTMENT STORES (0.3%)
153,050 May Department Stores Co............................................................ 5,921,122
--------------
DISCOUNT CHAINS (1.4%)
203,520 Costco Companies, Inc.*............................................................. 15,213,120
862,000 Kmart Corp.*........................................................................ 12,499,000
--------------
27,712,120
--------------
DIVERSIFIED ELECTRONIC PRODUCTS (1.7%)
100,830 Honeywell, Inc...................................................................... 12,080,694
4,066 Koninklijke (Royal) Philips Electronics N.V. (Netherlands).......................... 415,461
350,000 Rockwell International Corp......................................................... 20,584,375
--------------
33,080,530
--------------
DIVERSIFIED FINANCIAL SERVICES (3.5%)
5,385 Allied Zurich PLC
(United Kingdom)*................................................................. 65,707
260,000 American Express Co................................................................. 34,255,000
424,337 Citigroup Inc....................................................................... 18,909,518
245,000 Equitable Companies, Inc............................................................ 15,741,250
4,818 ING Groep NV (Netherlands).......................................................... 246,537
--------------
69,218,012
--------------
DIVERSIFIED MANUFACTURING (1.5%)
300,000 Tyco International Ltd. (Bermuda)................................................... 29,306,250
--------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
PORTFOLIO OF INVESTMENTS JULY 31, 1999, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
E.D.P. PERIPHERALS (1.3%)
440,000 EMC Corp.*.......................................................................... $ 26,647,500
--------------
ELECTRICAL PRODUCTS (0.0%)
1,800 Emerson Electric Co................................................................. 107,437
--------------
ELECTRONIC PRODUCTION EQUIPMENT (1.4%)
388,000 Cognex Corp.*....................................................................... 12,270,500
360,000 Jabil Circuit, Inc.*................................................................ 15,142,500
--------------
27,413,000
--------------
ENVIRONMENTAL SERVICES (0.9%)
1,000,000 Allied Waste Industries, Inc.*...................................................... 17,937,500
2,900 Waste Management, Inc............................................................... 74,131
--------------
18,011,631
--------------
FINANCE COMPANIES (0.5%)
137,490 Fannie Mae.......................................................................... 9,486,810
--------------
FOOD CHAINS (0.0%)
2,200 Etablissements Economiques du Casino Guichard-Perrachon S.A. (France)............... 189,468
4,749 Koninklijke Ahold NV (Netherlands).................................................. 165,732
--------------
355,200
--------------
HOME FURNISHINGS (0.0%)
5,400 Industrie Natuzzi SpA (ADR) (Italy)................................................. 97,875
4,926 Newell Rubbermaid, Inc.............................................................. 213,049
--------------
310,924
--------------
HOTELS/RESORTS (0.0%)
1,500 Accor S.A. (France)................................................................. 357,279
--------------
INTEGRATED OIL COMPANIES (3.0%)
2,400 Amerada Hess Corp................................................................... 142,050
220,000 Atlantic Richfield Co............................................................... 19,813,750
15,700 BP Amoco PLC (United Kingdom)....................................................... 307,273
830 Chevron Corp........................................................................ 75,737
1,030 Elf Aquitaine S.A. (France)......................................................... 176,418
2,290 Exxon Corp.......................................................................... 181,769
200,000 Kerr-McGee Corp..................................................................... 10,300,000
170,000 Mobil Corp.......................................................................... 17,382,500
4,535 Royal Dutch Petroleum Co. (Netherlands)............................................. 283,516
8,330 Texaco, Inc......................................................................... 519,063

<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
250,000 Unocal Corp......................................................................... $ 9,921,875
--------------
59,103,951
--------------
INTERNATIONAL BANKS (0.1%)
11,100 Abbey National PLC (United Kingdom)................................................. 192,046
5,400 Barclays PLC
(United Kingdom).................................................................. 159,624
1,875 Credit Suisse Group (Switzerland)................................................... 354,628
1,000 UBS AG (Switzerland)................................................................ 304,829
--------------
1,011,127
--------------
INTERNET SERVICES (2.2%)
200,000 America Online, Inc.*............................................................... 19,025,000
220,000 Inktomi Corp.*...................................................................... 23,801,250
--------------
42,826,250
--------------
INVESTMENT BANKERS/BROKERS/SERVICES (0.3%)
100,000 Merrill Lynch & Co., Inc............................................................ 6,806,250
--------------
LIFE INSURANCE (0.0%)
4,746 Aegon NV (Netherlands).............................................................. 366,057
--------------
MAJOR BANKS (2.4%)
105,700 Chase Manhattan Corp................................................................ 8,125,687
600,000 Mellon Bank Corp.................................................................... 20,250,000
500,000 Wells Fargo & Co.................................................................... 19,500,000
--------------
47,875,687
--------------
MAJOR CHEMICALS (1.7%)
134,000 Dow Chemical Co..................................................................... 16,616,000
220,880 Du Pont (E.I.) de Nemours & Co., Inc................................................ 15,917,165
10,300 Monsanto Co......................................................................... 402,987
--------------
32,936,152
--------------
MAJOR PHARMACEUTICALS (5.0%)
324,880 Abbott Laboratories................................................................. 13,949,535
329,000 American Home Products Corp......................................................... 16,779,000
4,304 AstraZeneca PLC..................................................................... 157,057
14,424 Glaxo Wellcome PLC (United Kingdom)................................................. 372,345
202,134 Johnson & Johnson................................................................... 18,621,595
192,300 Lilly (Eli) & Co.................................................................... 12,619,687
300,000 Merck & Co., Inc.................................................................... 20,306,250
180 Novartis AG (Switzerland)........................................................... 260,040
1,260 Novo-Nordisk A/S (Series B) (Denmark)............................................... 139,547
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
PORTFOLIO OF INVESTMENTS JULY 31, 1999, CONTINUED
<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
13 Roche Holdings AG (Switzerland)..................................................... $ 143,776
24,400 SmithKline Beecham PLC (United Kingdom)............................................. 300,691
259,810 Warner-Lambert Co................................................................... 17,147,460
--------------
100,796,983
--------------
MAJOR U.S.
TELECOMMUNICATIONS (1.9%)
425,000 AT&T Corp........................................................................... 22,073,437
200,000 MCI WorldCom, Inc.*................................................................. 16,500,000
--------------
38,573,437
--------------
MANAGED HEALTH CARE (0.5%)
122,500 Wellpoint Health Networks, Inc.*.................................................... 10,060,312
--------------
MEDIA CONGLOMERATES (0.9%)
612,060 Disney (Walt) Co.................................................................... 16,908,157
--------------
MILITARY/GOV'T/TECHNICAL (0.0%)
8,240 General Motors Corp. (Class H)*..................................................... 457,835
--------------
MOTOR VEHICLES (0.7%)
364 Bayerische Motoren Werke (BMW) AG (Germany)......................................... 288,350
172,000 DaimlerChrysler AG (Germany)........................................................ 12,427,000
10,650 Ford Motor Co....................................................................... 517,856
3,100 Volkswagen AG (Germany)............................................................. 185,175
--------------
13,418,381
--------------
MULTI-LINE INSURANCE (1.4%)
180 Allianz AG (Germany)................................................................ 47,980
240,500 American International Group, Inc................................................... 27,928,062
2,700 Axa (France)........................................................................ 316,493
--------------
28,292,535
--------------
MULTI-SECTOR COMPANIES (0.6%)
104,720 General Electric Co................................................................. 11,414,480
--------------
OFFICE EQUIPMENT/SUPPLIES (1.1%)
440,000 Xerox Corp.......................................................................... 21,450,000
--------------
OIL REFINING/MARKETING (0.0%)
2,280 Total S.A. (B Shares) (France)...................................................... 290,448
--------------
OILFIELD SERVICES/EQUIPMENT (1.0%)
450,000 Smith International, Inc.*.......................................................... 19,518,750
--------------

<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
OTHER SPECIALTY STORES (2.6%)
502,720 Bed Bath & Beyond, Inc.*............................................................ $ 17,029,640
775,100 Pier 1 Imports, Inc................................................................. 7,266,563
350,000 Toys 'R' Us, Inc.*.................................................................. 5,687,500
575,400 Williams-Sonoma, Inc.*.............................................................. 21,541,538
--------------
51,525,241
--------------
OTHER TELECOMMUNICATIONS (0.5%)
340,000 Qwest Communications International, Inc.*........................................... 10,030,000
--------------
PACKAGE GOODS/
COSMETICS (1.0%)
386,200 Colgate-Palmolive Co................................................................ 19,068,625
--------------
PACKAGED FOODS (1.1%)
256,520 General Mills, Inc.................................................................. 21,243,063
246 Nestle S.A. (Switzerland)........................................................... 483,751
11,250 Unilever PLC (United Kingdom)....................................................... 108,266
--------------
21,835,080
--------------
PAPER (1.8%)
280,000 Boise Cascade Corp.................................................................. 10,797,500
307,990 Champion International Corp......................................................... 15,938,483
200,000 Willamette Industries, Inc.......................................................... 9,000,000
--------------
35,735,983
--------------
PRECIOUS METALS (1.3%)
400,000 Barrick Gold Corp. (Canada)......................................................... 7,425,000
650,000 Homestake Mining Co................................................................. 5,200,000
350,000 Newmont Mining Corp................................................................. 6,475,000
600,000 Placer Dome Inc. (Canada)........................................................... 6,112,500
--------------
25,212,500
--------------
PRECISION INSTRUMENTS (1.7%)
620,000 Pe Corp Pe Biosystems Group......................................................... 34,758,750
--------------
PROPERTY - CASUALTY
INSURERS (0.0%)
1,600 Chubb Corp.......................................................................... 95,700
--------------
SAVINGS & LOAN
ASSOCIATIONS (2.2%)
243,000 Astoria Financial Corp.............................................................. 9,234,000
600,000 Dime Bancorp, Inc................................................................... 12,075,000
164,140 Golden West Financial Corp.......................................................... 15,747,181
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
PORTFOLIO OF INVESTMENTS JULY 31, 1999, CONTINUED

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
170,425 Washington Mutual, Inc.............................................................. $ 5,847,708
--------------
42,903,889
--------------
SEMICONDUCTORS (3.2%)
404,080 Intel Corp.......................................................................... 27,881,520
440,000 PMC - Sierra, Inc. (Canada)*........................................................ 34,430,000
5,860 STMicroelectronics NV (Netherlands)................................................. 418,731
--------------
62,730,251
--------------
SPECIALTY CHEMICALS (0.0%)
10,300 Georgia Gulf Corp................................................................... 141,625
--------------
SPECIALTY INSURERS (0.0%)
4,650 Ace, Ltd. (Bermuda)................................................................. 108,113
--------------
TELECOMMUNICATIONS (0.0%)
32,645 British Telecommunications
PLC (United Kingdom).............................................................. 569,039
--------------
TELECOMMUNICATIONS
EQUIPMENT (1.4%)
300,000 General Instrument Corp.*........................................................... 13,612,500
200,000 Lucent Technologies Inc............................................................. 13,012,500
5,600 Nokia Oyj (A Shares) (Finland)...................................................... 485,579
9,900 Telefonaktiebolaget LM Ericsson (B Shares) (Sweden)................................. 322,662
--------------
27,433,241
--------------
TOBACCO (0.0%)
5,385 British American Tobacco PLC (United Kingdom)....................................... 45,405
11,630 Philip Morris Companies, Inc........................................................ 433,218
--------------
478,623
--------------
WHOLESALE DISTRIBUTORS (0.5%)
745,000 IKON Office Solutions, Inc.......................................................... 9,824,688
--------------
TOTAL COMMON STOCKS
(IDENTIFIED COST
$908,461,219)....................................................................... 1,363,902,786
--------------
</TABLE>

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
CORPORATE BONDS (6.6%)
AIRLINES (0.5%)
$ 2,969 Continental Airlines, Inc. (Series 981A)
6.648% due 03/15/19....................................................... $ 2,779,535
4,000 Delta Airlines (Series C)
6.65% due 03/15/04........................................................ 3,896,560
4,000 Northwest Airlines Corp. (Series 992A)
7.575% due 03/01/19....................................................... 3,955,000
--------------
10,631,095
--------------
BOOKS/MAGAZINES (0.2%)
4,000 Harcourt General Inc.
7.30% due 08/01/97........................................................ 3,435,920
--------------
CABLE TELEVISION (0.5%)
4,000 British Sky Broadcasting Group, PLC
(United Kingdom)
6.875% due 02/23/09....................................................... 3,606,760
5,000 Continental Cablevision, Inc.
9.50% due 08/01/13........................................................ 5,635,250
--------------
9,242,010
--------------
COMPUTER HARDWARE (0.1%)
2,000 Sun Microsystems
7.65% due 08/15/09........................................................ 1,990,940
--------------
DEPARTMENT STORES (0.2%)
4,000 Federated Department Stores, Inc.
6.30% due 04/01/09........................................................ 3,715,480
--------------
DIVERSIFIED MANUFACTURING (0.2%)
100 Tyco International Group SA (Luxembourg)
6.375% due 06/15/05....................................................... 96,916
4,000 Tyco International Group SA (Luxembourg)
7.00% due 06/15/28........................................................ 3,647,520
--------------
3,744,436
--------------
ELECTRIC UTILITIES (0.5%)
4,000 Midamerica Funding LLC - 144A**
6.339% due 03/01/09....................................................... 3,748,960
1,500 Texas Utilities Co. (Series A)
6.20% due 10/01/02........................................................ 1,502,385
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
PORTFOLIO OF INVESTMENTS JULY 31, 1999, CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
$ 4,000 Utilicorp United Inc.
7.00% due 07/15/04........................................................ $ 3,955,000
--------------
9,206,345
--------------
EXTRA GOVERNMENTAL
INSTITUTIONS - BANKING (0.1%)
2,500 Private Export Funding
5.25% due 05/15/05........................................................ 2,341,800
--------------
FINANCE COMPANIES (1.4%)
3,500 Advanta Corp.
7.28% due 07/30/01........................................................ 3,192,035
4,000 Aristar Inc.
7.25% due 06/15/06........................................................ 3,959,760
4,000 Associates Corp. of North America
6.00% due 07/15/05........................................................ 3,803,560
100 Associates Corp. of North America
6.375% due 08/15/99....................................................... 100,027
4,000 Commercial Credit Group
7.75% due 03/01/05........................................................ 4,115,000
4,000 General Motors Acceptance Corp.
6.15% due 04/05/07........................................................ 3,780,240
4,000 Household Finance Corp.
5.875% due 02/01/09....................................................... 3,587,000
100 MBNA Capital I (Series A)
8.278% due 12/01/26....................................................... 93,650
5,000 National Rural Utilities Cooperative Finance Corp.
6.125% due 05/15/05....................................................... 4,815,750
--------------
27,447,022
--------------
INTEGRATED OIL COMPANIES (0.2%)
4,000 Atlantic Richfield Co.
9.00% due 05/01/31........................................................ 4,733,720
--------------
INVESTMENT BANKERS/BROKERS/ SERVICES (0.3%)
3,000 Bear Stearns Co., Inc.
6.25% due 07/15/05........................................................ 2,853,720
4,000 Donaldson, Lufkin & Jenrette Sec.
6.25% due 08/01/01........................................................ 3,972,480
--------------
6,826,200
--------------

<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
LIFE INSURANCE (0.4%)
$ 4,000 Conseco Finance Trust III
8.796% due 04/01/27....................................................... $ 3,653,920
4,000 Conseco, Inc.
6.40% due 06/15/01........................................................ 3,930,320
--------------
7,584,240
--------------
MAJOR BANKS (0.2%)
4,000 National City Corp.
6.875% due 05/15/19....................................................... 3,629,720
--------------
MAJOR U.S. TELECOMMUNICATIONS (0.4%)
4,000 MCI Worldcom Inc.
7.55% due 04/01/04........................................................ 4,090,920
4,000 Sprint Capital Corp.
6.125% due 11/15/08....................................................... 3,697,040
--------------
7,787,960
--------------
MOTOR VEHICLES (0.2%)
4,000 Ford Motor Co.
6.625% due 10/01/28....................................................... 3,536,720
--------------
OIL & GAS PRODUCTION (0.0%)
50 Occidental Petroleum Corp.
11.125% due 08/01/10...................................................... 61,663
--------------
OIL/GAS TRANSMISSION (0.3%)
4,000 Enron Corp.
6.50% due 08/01/02........................................................ 3,972,720
3,000 Williams Companies, Inc. (The)
7.625% due 07/15/19....................................................... 2,903,670
--------------
6,876,390
--------------
PROPERTY - CASUALTY INSURERS (0.2%)
4,000 Fairfax Financial Holdings, Ltd. (Canada)
7.375% due 04/15/18....................................................... 3,618,880
200 Orion Capital Trust I
8.73% due 01/01/37........................................................ 187,168
--------------
3,806,048
--------------
RAILROADS (0.2%)
954 Southern Pacific Transportation Co. (Series B)
7.28% due 04/30/15........................................................ 944,926
4,000 Union Pacific Corp.
6.34% due 11/25/03........................................................ 3,915,200
--------------
4,860,126
--------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
PORTFOLIO OF INVESTMENTS JULY 31, 1999, CONTINUED
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
SMALLER BANKS (0.5%)
$ 5,000 Centura Bank
6.50% due 03/15/09........................................................ $ 4,612,500
100 Centura Capital Trust I - 144A**
8.845% due 06/01/27....................................................... 100,978
5,225 Wilmington Trust Corp.
6.625% due 05/01/08....................................................... 4,916,150
--------------
9,629,628
--------------

TOTAL CORPORATE BONDS
(IDENTIFIED COST
$136,285,800)............................................................... 131,087,463
--------------

U.S. GOVERNMENT & AGENCY OBLIGATIONS (13.4%)
Federal Home Loan Banks.....................................................
10,000 4.875% due 01/22/02....................................................... 9,714,900
5,000 5.515% due 04/13/04....................................................... 4,793,000
Federal Home Loan Mortgage Corp.
10,000 5.75% due 03/15/09........................................................ 9,300,600
121 8.50% due 07/01/02........................................................ 120,588
59 9.00% due 08/01/02........................................................ 59,665
Federal National Mortgage Assoc.
7,000 5.625% due 05/14/04....................................................... 6,764,520
6,000 5.75% due 06/15/05........................................................ 5,796,780
7,500 6.25% due 05/15/29........................................................ 6,858,375
10,000 6.375% due 06/15/09....................................................... 9,746,400
U.S. Treasury Bond
4,500 5.25% due 11/15/28........................................................ 3,926,070
9,200 5.50% due 08/15/28........................................................ 8,291,316
23,000 6.00% due 02/15/26........................................................ 22,119,560
4,000 6.125% due 11/15/27....................................................... 3,916,360
100 6.375% due 08/15/27....................................................... 101,009
2,500 6.625% due 02/15/27....................................................... 2,605,450
1,565 6.875% due 08/15/25....................................................... 1,674,190
150 7.625% due 02/15/25....................................................... 174,564
U.S. Treasury Note
15,300 5.625% due 11/30/00....................................................... 15,322,797
1,000 5.625% due 02/28/01....................................................... 1,001,170
6,000 5.625% due 02/15/06....................................................... 5,872,200

<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
$ 5,100 5.75% due 08/15/03........................................................ $ 5,075,622
3,000 5.875% due 11/30/01....................................................... 3,011,340
4,000 5.875% due 11/15/05....................................................... 3,969,280
27,500 6.125% due 08/15/07....................................................... 27,562,975
7,000 6.25% due 02/28/02........................................................ 7,085,680
1,140 6.25% due 02/15/03........................................................ 1,154,296
13,500 6.25% due 02/15/07........................................................ 13,641,615
58,450 6.375% due 05/15/00....................................................... 58,936,304
5,900 6.50% due 05/15/05........................................................ 6,039,948
6,600 6.50% due 08/15/05........................................................ 6,757,014
1,150 6.625% due 06/30/01....................................................... 1,169,723
730 6.875% due 08/31/99....................................................... 731,153
3,000 6.875% due 05/15/06....................................................... 3,132,870
1,100 7.25% due 05/15/04........................................................ 1,160,214
2,000 7.25% due 08/15/04........................................................ 2,113,460
7,075 7.50% due 11/15/01........................................................ 7,342,860
--------------

TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(IDENTIFIED COST
$274,488,690)............................................................... 267,043,868
--------------

SHORT-TERM INVESTMENTS (10.2%)
U.S. GOVERNMENT AGENCIES (a) (10.2%)
50,000 Federal Home Loan Mortgage Corp. 4.92% due 08/19/99......................... 49,877,000
65,000 Federal Home Loan Mortgage Corp. 4.98% due 08/16/99......................... 64,865,125
87,500 Student Loan Marketing Assoc. 4.97% due 08/02/99............................ 87,487,920
--------------

TOTAL U.S. GOVERNMENT AGENCIES
(AMORTIZED COST
$202,230,045)............................................................... 202,230,045
--------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
PORTFOLIO OF INVESTMENTS JULY 31, 1999, CONTINUED

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
REPURCHASE AGREEMENT (0.0%)
$ 556 The Bank of New York 5.00% due 08/02/99 (dated 07/30/99; proceeds $555,945)
(b) (IDENTIFIED COST $555,713)............................................ $ $555,713
--------------

TOTAL SHORT-TERM INVESTMENTS
(IDENTIFIED COST
$202,785,758)............................................................... 202,785,758
--------------
</TABLE>

<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST
$1,522,021,467) (c)..................................................................... 98.9 % 1,964,819,875

OTHER ASSETS IN EXCESS OF LIABILITIES................................................... 1.1 22,234,199
------ ---------------

NET ASSETS.............................................................................. 100.0 % $ 1,987,054,074
------ ---------------
------ ---------------
</TABLE>

- ---------------------

ADR American Depository Receipt.
* Non-income producing security.
** Resale is restricted to qualified institutional investors.
(a) Securities were purchased on a discount basis. The interest rates shown
have been adjusted to reflect a money market equivalent yield.
(b) Collateralized by $481,169 U.S. Treasury Bond 10.75% due 05/15/03 valued at
$568,161.
(c) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $475,364,574 and the
aggregate gross unrealized depreciation is $32,566,166, resulting in net
unrealized appreciation of $442,798,408.

SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1999

<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $1,522,021,467).......................................................... $1,964,819,875
Receivable for:
Investments sold........................................................................ 28,582,155
Interest................................................................................ 7,536,150
Shares of beneficial interest sold...................................................... 2,393,813
Dividends............................................................................... 865,147
Foreign withholding taxes reclaimed..................................................... 94,099
Prepaid expenses and other assets........................................................... 78,434
--------------
TOTAL ASSETS........................................................................... 2,004,369,673
--------------
LIABILITIES:
Payable for:
Investments purchased................................................................... 12,161,407
Shares of beneficial interest repurchased............................................... 2,577,486
Plan of distribution fee................................................................ 1,447,946
Investment management fee............................................................... 919,696
Payable to bank............................................................................. 3,299
Accrued expenses and other payables......................................................... 205,765
--------------
TOTAL LIABILITIES...................................................................... 17,315,599
--------------
NET ASSETS............................................................................. $1,987,054,074
--------------
--------------
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................. $1,428,934,244
Net unrealized appreciation................................................................. 442,798,706
Accumulated undistributed net investment income............................................. 2,089,265
Accumulated undistributed net realized gain................................................. 113,231,859
--------------
NET ASSETS............................................................................. $1,987,054,074
--------------
--------------
CLASS A SHARES:
Net Assets.................................................................................. $64,417,573
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)................................... 3,194,851
NET ASSET VALUE PER SHARE.............................................................. $20.16
--------------
--------------

MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 5.54% OF NET ASSET VALUE)...................................... $21.28
--------------
--------------
CLASS B SHARES:
Net Assets.................................................................................. $1,833,935,283
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)................................... 90,953,201
NET ASSET VALUE PER SHARE.............................................................. $20.16
--------------
--------------
CLASS C SHARES:
Net Assets.................................................................................. $16,146,929
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)................................... 802,959
NET ASSET VALUE PER SHARE.............................................................. $20.11
--------------
--------------
CLASS D SHARES:
Net Assets.................................................................................. $72,554,289
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)................................... 3,595,036
NET ASSET VALUE PER SHARE.............................................................. $20.18
--------------
--------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JULY 31, 1999

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

INCOME
Interest...................................................................................... $ 33,418,765
Dividends (net of $94,500 foreign withholding tax)............................................ 13,575,985
------------

TOTAL INCOME............................................................................. 46,994,750
------------

EXPENSES
Plan of distribution fee (Class A shares)..................................................... 112,223
Plan of distribution fee (Class B shares)..................................................... 15,790,131
Plan of distribution fee (Class C shares)..................................................... 111,142
Investment management fee..................................................................... 9,936,934
Transfer agent fees and expenses.............................................................. 1,563,945
Shareholder reports and notices............................................................... 144,390
Registration fees............................................................................. 142,635
Custodian fees................................................................................ 115,230
Professional fees............................................................................. 64,727
Trustees' fees and expenses................................................................... 15,392
Other......................................................................................... 31,948
------------

TOTAL EXPENSES........................................................................... 28,028,697
------------

NET INVESTMENT INCOME.................................................................... 18,966,053
------------

NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on:
Investments............................................................................... 176,790,665
Foreign exchange transactions............................................................. 24,886
------------

NET GAIN................................................................................. 176,815,551
------------
Net change in unrealized appreciation/depreciation on:
Investments............................................................................... (21,170,981)
Net translation of other assets and liabilities denominated in foreign currencies......... (22,927)
------------

NET DEPRECIATION......................................................................... (21,193,908)
------------

NET GAIN................................................................................. 155,621,643
------------

NET INCREASE.................................................................................. $174,587,696
------------
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
JULY 31, 1999 JULY 31, 1998
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>

INCREASE (DECREASE) IN NET ASSETS:

OPERATIONS:
Net investment income....................................................... $ 18,966,053 $ 21,116,380
Net realized gain........................................................... 176,815,551 95,674,127
Net change in unrealized appreciation....................................... (21,193,908) 85,133,427
-------------- --------------

NET INCREASE........................................................... 174,587,696 201,923,934
-------------- --------------

DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A shares............................................................ (846,187) (449,337)
Class B shares............................................................ (16,039,877) (25,042,434)
Class C shares............................................................ (91,734) (58,652)
Class D shares............................................................ (1,409,321) (1,476,955)
Net realized gain
Class A shares............................................................ (4,000,964) (478,126)
Class B shares............................................................ (129,295,238) (41,034,286)
Class C shares............................................................ (696,343) (70,302)
Class D shares............................................................ (5,750,340) (1,520,396)
-------------- --------------

TOTAL DIVIDENDS AND DISTRIBUTIONS...................................... (158,130,004) (70,130,488)
-------------- --------------
Net increase from transactions in shares of beneficial interest............. 201,010,037 38,781,752
-------------- --------------
NET INCREASE.............................................................. 217,467,729 170,575,198

NET ASSETS:
Beginning of period......................................................... 1,769,586,345 1,599,011,147
-------------- --------------
END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $2,089,265 AND
$1,540,461, RESPECTIVELY)................................................. $1,987,054,074 $1,769,586,345
-------------- --------------
-------------- --------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 1999

1. ORGANIZATION AND ACCOUNTING POLICIES

Morgan Stanley Dean Witter Strategist Fund (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a non-diversified,
open-end management investment company. The Fund's investment objective is to
maximize the total return of its investments. The Fund seeks to achieve its
objective by actively allocating its assets among major asset categories of
equity and fixed-income securities and money market instruments. The Fund was
organized as a Massachusetts business trust on August 5, 1988 and commenced
operations on October 31, 1988. On July 28, 1997, the Fund converted to a
multiple class share structure.

The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase and some
Class A shares, and most Class B shares and Class C shares are subject to a
contingent deferred sales charge imposed on shares redeemed within one year, six
years and one year, respectively. Class D shares are not subject to a sales
charge. Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures. Actual results could differ from
those estimates.

The following is a summary of significant accounting policies:

A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on the
New York, American or other domestic or foreign 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 (in
cases where securities are traded on more than one exchange, the securities are
valued on the exchange designated as the primary market pursuant to procedures
adopted by the Trustees); (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, including circumstances under which it is
determined by Morgan Stanley Dean Witter Advisors Inc. (the "Investment
Manager") that sale or bid prices are not reflective of a security's market
value, portfolio securities are valued at their fair value as determined in good
faith under procedures established by and under the general supervision of the
Trustees (valuation of debt securities for which market quotations are not
readily available may be based upon current market prices of securities which
are comparable in coupon, rating and maturity or an appropriate matrix utilizing
similar factors); (4) certain of the Fund's portfolio securities may be valued
by an outside

15
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 1999, CONTINUED

pricing service approved by the Trustees. The pricing service may utilize 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, if available, 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 by the identified cost method.
Discounts are accreted over the life of the respective securities. Dividend
income and other distributions are recorded on the ex-dividend date, except for
certain dividends on foreign securities which are recorded as soon as the Fund
is informed after the ex-dividend date. Interest income is accrued daily.

C. MULTIPLE CLASS ALLOCATIONS -- Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are allocated
to each class of shares based upon the relative net asset value on the date such
items are recognized. Distribution fees are charged directly to the respective
class.

D. FOREIGN CURRENCY TRANSLATION -- The books and records of the Fund are
maintained in U.S. dollars as follows: (1) the foreign currency market value of
investment securities, other assets and liabilities and forward foreign currency
contracts are translated at the exchange rates prevailing at the end of the
period; and (2) purchases, sales, income and expenses are translated at the
exchange rates prevailing on the respective dates of such transactions. The
resultant exchange gains and losses are included in the Statement of Operations
as realized and unrealized gain/loss on foreign exchange transactions. Pursuant
to U.S. Federal income tax regulations, certain foreign exchange gains/losses
included in realized and unrealized gain/loss are included in or are a reduction
of ordinary income for federal income tax purposes. The Fund does not isolate
that portion of the results of operations arising as a result of changes in the
foreign exchange rates from the changes in the market prices of the securities.

E. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward foreign
currency contracts which are valued daily at the appropriate exchange rates. The
resultant unrealized exchange gains and losses are included in the Statement of
Operations as unrealized gain/loss on

16
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 1999, CONTINUED

foreign exchange transactions. The Fund records realized gains or losses on
delivery of the currency or at the time the forward contract is extinguished
(compensated) by entering into a closing transaction prior to delivery.

F. 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.

G. 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 the Fund pays the Investment
Manager a management fee, accrued daily and payable monthly, by applying the
following annual rates to the net assets of the Fund determined at the close of
each business day: 0.60% 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; 0.50% to the portion of daily net assets exceeding $1
billion but not exceeding $1.5 billion; 0.475% to the portion of daily net
assets exceeding $1.5 billion but not exceeding $2 billion; and 0.45% to the
portion of daily net assets exceeding $2 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.

17
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 1999, CONTINUED

3. PLAN OF DISTRIBUTION

Shares of the Fund are distributed by Morgan Stanley 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. The Plan provides that the Fund will pay the Distributor a fee which is
accrued daily and paid monthly at the following annual rates: (i) Class A -- up
to 0.25% of the average daily net assets of Class A; (ii) Class B -- 1.0% of the
lesser of: (a) the average daily aggregate gross sales of the Class B shares
since the implementation of the Plan on November 8, 1989 (not including
reinvestment of dividend or capital gain distributions) less the average daily
aggregate net asset value of the Class B shares redeemed since the Fund's
implementation of the Plan upon which a contingent deferred sales charge has
been imposed or waived; or (b) the average daily net assets of Class B; and
(iii) Class C -- up to 1.0% of the average daily net assets of Class C. In the
case of Class A shares, amounts paid under the Plan are paid to the Distributor
for services provided. In the case of Class B and Class C shares, amounts paid
under the Plan are paid to the Distributor for (1) services provided and the
expenses borne by it and others in the distribution of the shares of these
Classes, including the payment of commissions for sales of these Classes and
incentive compensation to, and expenses of, Morgan Stanley Dean Witter Financial
Advisors and others who engage in or support distribution of the shares or who
service shareholder accounts, including overhead and telephone expenses; (2)
printing and distribution of prospectuses and reports used in connection with
the offering of these shares to other than current shareholders; and (3)
preparation, printing and distribution of sales literature and advertising
materials. In addition, the Distributor may utilize fees paid pursuant to the
Plan, in the case of Class B shares, to compensate Dean Witter Reynolds Inc.
("DWR"), an affiliate of the Investment Manager and Distributor, and other
selected broker-dealers for their opportunity costs in advancing such amounts,
which compensation would be in the form of a carrying charge on any unreimbursed
expenses.

In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under the
Plan and the proceeds of contingent deferred sales charges paid by investors
upon redemption of shares, if for any reason the Plan is terminated, the
Trustees will consider at that time the manner in which to treat such expenses.
The Distributor has advised the Fund that such excess amounts, including
carrying charges, totaled $38,242,891 at July 31, 1999.

18
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 1999, CONTINUED

In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to Morgan Stanley Dean Witter Financial Advisors or other
selected broker-dealer representatives may be reimbursed in the subsequent
calendar year. For the year ended July 31, 1999, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.22% and
1.0%, respectively.

The Distributor has informed the Fund that for the year ended July 31, 1999, it
received contingent deferred sales charges from certain redemptions of the
Fund's Class A shares, Class B shares and Class C shares of $4,328, $1,491,901
and $14,526, respectively and received $76,373 in front-end sales charges from
sales of the Fund's Class A shares. The respective 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/maturities/prepayments of
portfolio securities, excluding short-term investments, for the year ended July
31, 1999 aggregated $1,972,230,979 and $2,053,243,920, respectively. Included in
the aforementioned are purchases and sales/maturities/ prepayments of U.S.
Government securities of $468,826,919 and $410,663,283, respectively.

At July 31, 1999, the Fund's receivable for investment sold included unsettled
trades with DWR of $1,488,700. For the year ended July 31, 1999, the Fund
incurred brokerage commissions with DWR of $78,847, for portfolio transactions
executed on behalf of the Fund.

For the year ended July 31, 1999, the Fund incurred brokerage commissions of
$271,843 with Morgan Stanley & Co., Inc. an affiliate of the Investment Manager
and Distributor, for portfolio transactions executed on behalf of the Fund. At
July 31, 1999, the Fund's payable for investments purchased included unsettled
trades with Morgan Stanley & Co. of $1,821,410.

Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At July 31, 1999, the Fund had
transfer agent fees and expenses payable of approximately $7,100.

The Fund has 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 July 31, 1999 included in

19
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 1999, CONTINUED

Trustees' fees and expenses in the Statement of Operations amounted to $2,526.
At July 31, 1999, the Fund had an accrued pension liability of $74,715 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 FOR THE YEAR
ENDED ENDED
JULY 31, 1999 JULY 31, 1998
----------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
------------ -------------- ------------ --------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold............................................................. 1,934,094 $ 37,196,680 1,964,326 $ 37,275,130
Reinvestment of dividends and distributions...................... 245,489 4,408,793 34,015 615,503
Acquisition of Dean Witter Global Asset Allocation Fund.......... 15,373 288,931 -- --
Redeemed......................................................... (724,574) (14,041,119) (278,059) (5,243,404)
------------ -------------- ------------ --------------
Net increase - Class A........................................... 1,470,382 27,853,285 1,720,282 32,647,229
------------ -------------- ------------ --------------

CLASS B SHARES
Sold............................................................. 16,874,303 326,909,527 12,852,199 244,390,491
Reinvestment of dividends and distributions...................... 7,311,689 131,234,901 3,284,472 59,496,655
Acquisition of Dean Witter Global Asset Allocation Fund.......... 2,202,447 41,353,775 -- --
Redeemed......................................................... (17,441,832) (337,838,267) (16,298,694) (309,691,698)
------------ -------------- ------------ --------------
Net increase (decrease) - Class B................................ 8,946,607 161,659,936 (162,023) (5,804,552)
------------ -------------- ------------ --------------

CLASS C SHARES
Sold............................................................. 575,043 11,155,902 415,839 8,032,474
Reinvestment of dividends and distributions...................... 41,974 752,113 6,501 119,147
Acquisition of Dean Witter Global Asset Allocation Fund.......... 7,608 142,546 -- --
Redeemed......................................................... (211,043) (4,034,449) (39,066) (737,447)
------------ -------------- ------------ --------------
Net increase - Class C........................................... 413,582 8,016,112 383,274 7,414,174
------------ -------------- ------------ --------------

CLASS D SHARES
Sold............................................................. 546,959 10,529,031 767,555 14,341,533
Reinvestment of dividends and distributions...................... 367,018 6,620,451 147,652 2,701,123
Acquisition of Dean Witter Global Asset Allocation Fund.......... 667 12,537 -- --
Acquisition of Dean Witter Retirement Series - Strategist
Series.......................................................... 897,233 16,687,220 -- --
Redeemed......................................................... (1,565,127) (30,368,535) (656,253) (12,517,755)
------------ -------------- ------------ --------------
Net increase - Class D........................................... 246,750 3,480,704 258,954 4,524,901
------------ -------------- ------------ --------------
Net increase in Fund............................................. 11,077,321 $ 201,010,037 2,200,487 $ 38,781,752
------------ -------------- ------------ --------------
------------ -------------- ------------ --------------
</TABLE>

6. FEDERAL INCOME TAX STATUS

Foreign currency 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 foreign
currency losses of approximately $3,000 during fiscal 1999.

20
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
NOTES TO FINANCIAL STATEMENTS JULY 31, 1999, CONTINUED

At July 31, 1999, the Fund had temporary book/tax differences primarily
attributable to post-October losses and capital loss deferrals on wash sales.

7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS

The Fund may enter into forward foreign currency contracts ("forward contracts")
to facilitate settlement of foreign currency denominated portfolio transactions
or to manage foreign currency exposure associated with foreign currency
denominated securities.

Forward contracts involve elements of market risk in excess of the amounts
reflected in the Statement of Assets and Liabilities. The Fund bears the risk of
an unfavorable change in the foreign exchange rates underlying the forward
contracts. Risks may also arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.

At July 31, 1999, there were no outstanding forward contracts.

8. FUND ACQUISITIONS

As of the close business on September 11, 1998, the Fund acquired all the net
assets of Dean Witter Retirement Series -- Strategist Series ("Retirement
Strategist") pursuant to a plan of reorganization approved by shareholders of
Retirement Strategist on August 19, 1998. The acquisition was accomplished by a
tax-free exchange of 897,233 Class D shares of the Fund at a net asset value of
$18.60 per share for 1,340,444 shares of Retirement Strategist. The net assets
of the Fund and Retirement Strategist immediately before the acquisition were
$1,627,181,276 and $16,687,220, respectively, including unrealized appreciation
of $2,135,461 for Retirement Strategist. Immediately after the acquisition, the
combined net assets of the Fund amounted to $1,643,868,496.

As of close business on September 18, 1998, the Fund acquired all the net assets
of Dean Witter Global Asset Allocation Fund ("Global") pursuant to a plan of
reorganization approved by the shareholders of Global on August 19, 1998. The
acquisition was accomplished by a tax-free exchange of 15,373 Class A shares of
the Fund at a net asset value of $18.79 per share for 25,295 Class A shares of
Global; 2,202,447 Class B shares of the Fund at a net asset value of $18.77 per
share for 3,610,474 Class B shares of Global; 7,608 Class C shares of the Fund
at a net asset value of $18.73 per share for 12,522 Class C shares of Global;
and 667 Class D shares of the Fund at a net asset value of $18.81 per share for
1,097 Class D shares of Global. The net assets of the Fund and Global
immediately before the acquisition were $1,661,862,178 and $41,797,789,
respectively, including unrealized appreciation of $4,590,506 for Global.
Immediately after the acquisition, the combined net assets of the Fund amounted
to $1,703,659,967.

21
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
FINANCIAL HIGHLIGHTS

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

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR FOR THE YEAR JULY 28, 1997*
ENDED ENDED THROUGH
JULY 31, 1999 JULY 31, 1998 JULY 31, 1997
- ------------------------------------------------------------------------------------------------

<S> <C> <C> <C>
CLASS A SHARES++

SELECTED PER SHARE DATA:

Net asset value, beginning of period.... $ 20.23 $ 18.75 $ 18.40
------ ------ ------

Income from investment operations:
Net investment income................ 0.32 0.36 0.01
Net realized and unrealized gain..... 1.46 2.06 0.34
------ ------ ------

Total income from investment
operations............................. 1.78 2.42 0.35
------ ------ ------

Less dividends and distributions from:
Net investment income................ (0.32) (0.43) --
Net realized gain.................... (1.53) (0.51) --
------ ------ ------

Total dividends and distributions....... (1.85) (0.94) --
------ ------ ------

Net asset value, end of period.......... $ 20.16 $ 20.23 $ 18.75
------ ------ ------
------ ------ ------

TOTAL RETURN+........................... 10.01% 13.48% 1.90%(1)

RATIOS TO AVERAGE NET ASSETS:
Expenses................................ 0.87%(3) 0.91% 0.92%(2)

Net investment income................... 1.66%(3) 1.85% 5.06%(2)

SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands.............................. $64,418 $34,891 $79

Portfolio turnover rate................. 121% 92% 158%
</TABLE>

- ---------------------

* The date shares were first issued.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.

SEE NOTES TO FINANCIAL STATEMENTS
22
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
FINANCIAL HIGHLIGHTS, CONTINUED

<TABLE>
<CAPTION>
FOR THE YEAR ENDED JULY 31
--------------------------------------------------------------
1999++ 1998++ 1997*++ 1996 1995
- ---------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C>
CLASS B SHARES

SELECTED PER SHARE DATA:

Net asset value, beginning of
period............................ $ 20.23 $ 18.75 $ 16.02 $ 15.87 $ 14.43
---------- -------- -------- ---------- --------

Income from investment operations:
Net investment income........... 0.19 0.24 0.39 0.30 0.34
Net realized and unrealized
gain............................ 1.46 2.06 4.10 1.43 1.86
---------- -------- -------- ---------- --------

Total income from investment
operations........................ 1.65 2.30 4.49 1.73 2.20
---------- -------- -------- ---------- --------

Less dividends and distributions
from:
Net investment income........... (0.19) (0.31) (0.36) (0.32) (0.29)
Net realized gain............... (1.53) (0.51) (1.40) (1.26) (0.47)
---------- -------- -------- ---------- --------

Total dividends and
distributions..................... (1.72) (0.82) (1.76) (1.58) (0.76)
---------- -------- -------- ---------- --------

Net asset value, end of period..... $ 20.16 $ 20.23 $ 18.75 $ 16.02 $ 15.87
---------- -------- -------- ---------- --------
---------- -------- -------- ---------- --------

TOTAL RETURN+...................... 9.23% 12.77% 29.73% 11.47% 16.05%

RATIOS TO AVERAGE NET ASSETS:
Expenses........................... 1.57%(1) 1.54% 1.56% 1.58% 1.63%

Net investment income.............. 0.96%(1) 1.24% 2.29% 1.88% 2.35%

SUPPLEMENTAL DATA:
Net assets, end of period, in
millions.......................... $1,834 $1,659 $1,541 $1,259 $878

Portfolio turnover rate............ 121% 92% 158% 174% 179%
</TABLE>

- ---------------------

* Prior to July 28, 1997, the Fund issued one class of shares. All shares of
the Fund held prior to that date, other than shares which were purchased
prior to November 8, 1989 (and with respect to such shares, certain shares
acquired through reinvestment of dividends and capital gains distributions
(collectively the Old Shares)) and shares held by certain employee benefit
plans established by Dean Witter Reynolds Inc. have been designated Class B
shares. The Old Shares and shares held by those employee benefit plans
prior to July 28, 1997 have been designated Class D shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
(1) Reflects overall Fund ratios for investment income and non-class specific
expenses.

SEE NOTES TO FINANCIAL STATEMENTS
23
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
FINANCIAL HIGHLIGHTS, CONTINUED

<S> <C> <C> <C>
CLASS C SHARES++

SELECTED PER SHARE DATA:

Net asset value, beginning of period.... $ 20.19 $ 18.75 $ 18.40
------ ------ ------

Income from investment operations:
Net investment income................ 0.16 0.21 0.01
Net realized and unrealized gain..... 1.47 2.06 0.34
------ ------ ------

Total income from investment
operations............................. 1.63 2.27 0.35
------ ------ ------

Less dividends and distributions from:
Net investment income................ (0.18) (0.32) --
Net realized gain.................... (1.53) (0.51) --
------ ------ ------

Total dividends and distributions....... (1.71) (0.83) --
------ ------ ------

Net asset value, end of period.......... $ 20.11 $ 20.19 $ 18.75
------ ------ ------
------ ------ ------

TOTAL RETURN+........................... 9.15% 12.66% 1.90%(1)

RATIOS TO AVERAGE NET ASSETS:
Expenses................................ 1.65%(3) 1.66% 1.67%(2)

Net investment income................... 0.88%(3) 1.08% 4.38%(2)

SUPPLEMENTAL DATA:

Net assets, end of period, in
thousands.............................. $16,147 $7,861 $114

Portfolio turnover rate................. 121% 92% 158%
</TABLE>

- ---------------------

SEE NOTES TO FINANCIAL STATEMENTS
24
<PAGE>
MORGAN STANLEY DEAN WITTER STRATEGIST FUND
FINANCIAL HIGHLIGHTS, CONTINUED

<S> <C> <C> <C>
CLASS D SHARES++

SELECTED PER SHARE DATA:

Net asset value, beginning of period.... $ 20.25 $ 18.75 $ 18.40
------ ------ ------

Income from investment operations:
Net investment income................ 0.37 0.41 0.01
Net realized and unrealized gain..... 1.45 2.06 0.34
------ ------ ------

Total income from investment
operations............................. 1.82 2.47 0.35
------ ------ ------

Less dividends and distributions from:
Net investment income................ (0.36) (0.46) --
Net realized gain.................... (1.53) (0.51) --
------ ------ ------

Total dividends and distributions....... (1.89) (0.97) --
------ ------ ------

Net asset value, end of period.......... $ 20.18 $ 20.25 $ 18.75
------ ------ ------
------ ------ ------

TOTAL RETURN+........................... 10.23% 13.80% 1.90%(1)

RATIOS TO AVERAGE NET ASSETS:
Expenses................................ 0.65%(3) 0.66% 0.67%(2)

Net investment income................... 1.88%(3) 2.12% 5.40%(2)

SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands.............................. $72,554 $67,797 $57,938

Portfolio turnover rate................. 121% 92% 158%
</TABLE>

- ---------------------

* The date shares were first issued. Shareholders who held shares of the Fund
prior to July 28, 1997 (the date the Fund converted to a multiple class
share structure) should refer to the Financial Highlights of Class B to
obtain the historical per share data and ratio information of their shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Calculated based on the net asset value as of the last business day of the
period.
(1) Not annualized.
(2) Annualized.
(3) Reflects overall Fund ratios for investment income and non-class specific
expenses.

SEE NOTES TO FINANCIAL STATEMENTS
25
<PAGE>

MORGAN STANLEY DEAN WITTER STRATEGIST FUND
REPORT OF INDEPENDENT ACCOUNTANTS

TO THE SHAREHOLDERS AND TRUSTEES
OF MORGAN STANLEY DEAN WITTER STRATEGIST 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 Morgan Stanley Dean Witter
Strategist Fund (the "Fund"), at July 31, 1999, 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 periods
presented, 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 at July
31, 1999 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.

PricewaterhouseCoopers LLP
1177 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
SEPTEMBER 10, 1999

1999 FEDERAL TAX NOTICE (UNAUDITED)

During the year ended July 31, 1999, the Fund paid to its
shareholders $1.53 per share from long-term capital gains. For
such period, 38.15% of the income paid qualified for the dividends
received deduction available to corporations.

26
<PAGE>

TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
Wayne E. Hedien
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder

OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Mitchell M. Merin
President
Barry Fink
Vice President, Secretary and General Counsel
Mark Bavoso
Vice President
Thomas F. Caloia
Treasurer

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

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

INVESTMENT MANAGER
Morgan Stanley Dean Witter Advisors 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. Read the
prospectus carefully before investing.

MORGAN STANLEY DEAN WITTER
STRATEGIST FUND

[BACK COVER PHOTO]

ANNUAL REPORT
JULY 31, 1999