WITTER DEAN INTERMEDIATE INCOME SECURITIES, N-30D, 1997-10-28

WITTER DEAN INTERMEDIATE INCOME SECURITIES
N-30D, 1997-10-28

Previous: RENAISSANCE ENTERTAINMENT CORP, S-1/A, 1997-10-28

Next: CITIBANK SOUTH DAKOTA N A, 8-K, 1997-10-28

<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES TWO WORLD TRADE CENTER, NEW YORK,
NEW YORK 10048
LETTER TO THE SHAREHOLDERS AUGUST 31, 1997

DEAR SHAREHOLDER:

Interest rates have been volatile over the past twelve months. A brief bond
market rally in the early autumn of 1996, which was produced by a slowing
third-quarter economy, came to a halt in October. At that time, firming labor
markets, increases in consumer spending and revived growth in manufacturing
foreshadowed two consecutive quarters of GDP growth that approached 5 percent.

However, as calendar year 1996 came to a close, the continued absence of
inflation, as evidenced by controlled labor costs and declining wholesale
prices, supported the theory that a strong economy and low inflation were
compatible, making higher interest rates unnecessary. This hypothesis gave rise
to the perception of a "Goldilocks" economy, which was neither too hot nor too
cold but just right, paving the way for another market rally.

By February, Federal Reserve Board Chairman Alan Greenspan, not yet willing to
embrace this new paradigm in the face of reports of continued economic vigor,
began to prepare market participants for the prospect of higher interest rates.
At the end of March, the Fed raised the federal-funds rate by 25 basis points to
5.5 percent, adding to expectations of even higher rates in the coming months.

Yields peaked in mid-April with evidence of renewed weakness in areas that had
previously been strong, including retail sales and industrial production. These
signs that the economy was slowing were widely interpreted as a reprieve from
inflationary concerns, and attitudes toward bond markets turned positive once
again, pushing Treasury yields lower. But in August, robust economic news,
including second-quarter GDP growth of 3.4 percent along with a low unemployment
rate of 4.8 percent, again overshadowed the benign inflation picture and rates
once more shifted direction. Five-year and ten-year Treasuries, after reaching
respective highs of 6.86 percent and 6.99 percent in April, and lows of 5.90
percent and 6.00 percent in July, ended the period yielding 6.22 percent and
6.34 percent, lower by 50 and 60 basis points, respectively, from their levels
one year earlier.
<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES
LETTER TO THE SHAREHOLDERS AUGUST 31, 1997, CONTINUED

PERFORMANCE AND PORTFOLIO

For the fiscal year ended August 31, 1997, Dean Witter Intermediate Income
Fund's Class B shares returned 7.93 percent versus 9.21 percent for the Lipper
Intermediate Investment Grade Debt Funds Index. During the same period,
intermediate-term (one- to ten-year maturity) government and corporate bonds, as
measured by the Lehman Brothers Intermediate Government/Corporate Bond Index,
returned 8.44 percent. Intermediate-term (5- to 10-year maturity) corporate
bonds, as measured by Lehman Brothers Intermediate Investment Grade Debt Index,
returned 10.91 percent, and
intermediate-term government bonds, as
measured by the Lehman Brothers
Intermediate Government Bond Index,
returned 8.05 percent. The accompanying
chart illustrates the performance of
the Fund versus the Lehman Brothers
Intermediate Investment Grade Debt
Index, the Lehman Brothers Intermediate
Government/Corporate Bond Index and the
Lipper Intermediate Investment Grade
Debt Index.

The Fund's return during the fiscal
year reflected the decline in interest
rates experienced over the period. The
Fund's corporate bond holdings,
especially those rated below A, by
Standard & Poor's and Moody's, aided
its performance, as credit perceptions
improved with the economy. At fiscal
year-end, 41 percent of the Fund's
noncash invested assets were rated less
than A while the portfolio's average
credit rating was A3. To enhance
income, we increased corporate
allocations from 76 percent to 86
percent of noncash investments, with
most of the shift occurring during the
first six months of the Fund's fiscal
year. We increased the Fund's
commitment to utilities, industrials
and Yankee bonds (dollar-denominated
bonds issued in the United States by
foreign entities) while decreasing the
Fund's allocation to finance through
sales and maturities.
<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES
LETTER TO THE SHAREHOLDERS AUGUST 31, 1997, CONTINUED

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
Growth of $10,000 - Class B
($ in Thousands) Fund Lehman(4) Lehman(5) Lipper(6)
5/3/1989 $10,000 $10,000 $10,000 $10,000
8/31/1989 $10,257 $10,375 $10,327 $10,294
<S> <C> <C> <C> <C>
8/31/1990 $10,587 $11,047 $11,161 $10,848
8/31/1991 $11,728 $12,621 $12,589 $12,158
8/31/1992 $13,204 $14,686 $14,241 $13,832
8/31/1993 $14,318 $16,076 $15,556 $15,322
8/31/1994 $14,103 $16,382 $16,505 $15,046
8/31/1995 $15,310 $18,552 $16,973 $16,581
8/31/1996 $15,705 $19,244 $17,726 $17,227
8/31/1997 $16,950(3) $21,345 $19,222 $18,814
Average Annual Total Return
(Fund)
1 Year 7.93%(1) 2.93%(2)
5 Years 5.12%(1) 4.81%(2)
Life of Fund 6.54%(1) 6.54%(2)
</TABLE>

PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS.

(1) Figure shown assumes reinvestment of all distributions and does not reflect
the deduction of any sales charges.

(2) Figure shown assumes reinvestment of all distributions and the deduction of
the maximum applicable contingent deferred sales charge (CDSC) (1 year-5%, 5
years-2%, since inception-0%). See the Fund's prospectus for complete
details on fees and sales charges.
(3) Closing value assuming a complete redemption on August 31, 1997.
(4) The Lehman Brothers Intermediate Investment Grade Debt Index measures the
performance of 5-to-10 year investment-grade corporate debt securities. 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 Intermediate Government/Corporate Bond Index tracks the
performance of government and corporate debt obligations, including US
government agency and US Treasury securities and corporate and yankee bonds,
with maturities of one to ten years. The Index is unmanaged and should not
be considered and investment.
(6) The Lipper Intermediate Investment Grade Debt Funds Index is an equally
weighted performance index of the largest qualifying funds (based on net
assets) in the Lipper Intermediate Investment Grade Debt Funds 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.
<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES
LETTER TO THE SHAREHOLDERS AUGUST 31, 1997, CONTINUED

Redemptions throughout the period necessitated selling securities as interest
rates fell and rose. Unfortunately, new cash, which would have allowed us to
take advantage of the higher interest rate environment, was not always
available, so once again the Fund was unable to participate in interim rallies.
The Fund's net assets declined by more than $39 million, despite an increase in
its net asset value per share of $0.20. During the most recent rally in interest
rates we allowed the Fund's cash position to decline to about 2 percent of
investable assets from nearly 5 percent last year. This shift increased the
Fund's overall duration (and thus its sensitivity to changes in interest rates)
to 4.05 years on August 29, 1997, up from 3.91 on August 31, 1996.

On July 28, 1997, the Fund began offering four classes of shares: A, B, C and D,
each with its own sales charge and distribution fee structure. A revised
prospectus, which includes complete details regarding the Fund's conversion to
multiple classes of shares, was mailed to shareholders in mid-summer.

LOOKING AHEAD

Economic strength is once again overshadowing the current inflation picture.
While inflation still appears dormant, a reduction in the federal-funds rate by
the Federal Reserve Board is highly unlikely. How much longer economic growth of
better than 3.5 percent in conjunction with an unemployment rate of 4.8 percent
can continue before inflation is ignited is unknown. What is known is that the
Federal Reserve Board has clearly expressed its intention to raise rates in the
face of inflationary threats. Demand for workers continues, despite declines in
marginal productivity. The anticipated decline in exports arising from the
stronger dollar has yet to surface. Should overseas economies, principally those
of western Europe, show signs of growth, even greater demand could bid up prices
and eventually translate into higher inflation in the United States. However,
potentially deflationary effects could arise from cheaper Southeast Asian goods
as sizable currency devaluations make their products more competitive with those
of the United States. We will continue to monitor events, both domestic and
international, for signs of inflationary or deflationary pressures.

We appreciate your ongoing support of Dean Witter Intermediate Income Securities
and look forward to continuing to serve your investment needs.

Very truly yours,

/s/ Charles A. Fiumefreddo
CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES
RESULTS OF SPECIAL MEETING (UNAUDITED)

On May 21, 1997, a special meeting of shareholders of Dean Witter Intermediate
Income Securities was held for the purpose of voting on four separate matters,
the results of which are as follows:

1) APPROVAL OF A NEW INVESTMENT MANAGEMENT AGREEMENT BETWEEN THE FUND AND DEAN
WITTER INTERCAPITAL INC., IN CONNECTION WITH THE MERGER OF MORGAN STANLEY
GROUP INC. WITH DEAN WITTER, DISCOVER & CO.:

<TABLE>
<CAPTION>
VOTE NO. OF SHARES
- ------------------------------------------------------------------------------------------------------- -------------------
<S> <C>
For.................................................................................................... 10,884,145
Against................................................................................................ 160,845
Abstain................................................................................................ 1,186,270
</TABLE>

2) ELECTION OF TRUSTEES:

<TABLE>
<S> <C>
Michael Bozic
For............... 11,347,656
Withheld.......... 883,604
Charles A. Fiumefreddo
For............... 11,373,167
Withheld.......... 858,093
Edwin J. Garn
For............... 11,356,513
Withheld.......... 874,747
John R. Haire
For............... 11,357,271
Withheld.......... 873,989
Wayne E. Hedien
For............... 11,346,322
Withheld.......... 884,938
Dr. Manuel H. Johnson
For............... 11,350,927
Withheld.......... 880,333
Michael E. Nugent
For............... 11,363,138
Withheld.......... 868,122
Philip J. Purcell
For............... 11,374,222
Withheld.......... 857,038
John L. Schroeder
For............... 11,363,651
Withheld.......... 867,609
</TABLE>

3) APPROVAL OF A NEW INVESTMENT POLICY WITH RESPECT TO INVESTMENTS IN CERTAIN
OTHER INVESTMENT COMPANIES:

<TABLE>
<CAPTION>
VOTE NO. OF SHARES
- ------------------------------------------------------------------------------------------------------------------ ----------------
<S> <C>
For............................................................................................................... 10,034,056
Against........................................................................................................... 820,437
Abstain........................................................................................................... 1,376,767
</TABLE>

4) RATIFICATION OF THE SELECTION OF PRICE WATERHOUSE LLP AS THE FUND'S
INDEPENDENT ACCOUNTANTS:

<TABLE>
<CAPTION>
VOTE NO. OF SHARES
- ------------------------------------------------------------------------------------------------------------------ ----------------
<S> <C>
For............................................................................................................... 11,084,649
Against........................................................................................................... 97,023
Abstain........................................................................................................... 1,049,588
</TABLE>
<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES
PORTFOLIO OF INVESTMENTS AUGUST 31, 1997

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CORPORATE BONDS (83.3%)
AUTOMOBILE - RENTALS (1.8%)
$ 3,250 Hertz Corp..................................................................... 6.00% 01/15/03 $ 3,138,687
-------------
AUTOMOTIVE - FINANCE (4.2%)
2,000 Ford Motor Credit Co........................................................... 6.50 02/28/02 1,990,760
4,975 General Motors Acceptance Corp................................................. 8.40 10/15/99 5,177,383
-------------
7,168,143
-------------
BANK HOLDING COMPANIES (2.8%)
4,975 Star Bank N.A.................................................................. 6.375 03/01/04 4,846,894
-------------
BANKS (10.5%)
4,000 Bank One Corp.................................................................. 7.60 05/01/07 4,160,440
3,000 Banque Nationale De Paris (France)............................................. 7.20 01/15/07 3,005,880
5,045 Shawmut Bank Connecticut, N.A.................................................. 8.625 02/15/05 5,529,320
5,000 Societe Generale............................................................... 7.40 06/01/06 5,092,700
-------------
17,788,340
-------------
BANKS - INTERNATIONAL (1.2%)
2,000 Industrial Finance Corp. (Thailand) - 144A*.................................... 7.00 08/04/07 1,972,700
-------------
BANKS - THRIFT INSTITUTIONS (2.9%)
4,900 Long Island Savings Bank....................................................... 7.00 06/13/02 4,928,714
-------------
BROKERAGE (4.7%)
3,000 Lehman Brothers Inc............................................................ 6.125 02/01/01 2,950,950
5,000 Salomon, Inc................................................................... 7.00 05/15/99 5,050,850
-------------
8,001,800
-------------
CABLE & TELECOMMUNICATIONS (3.5%)
4,000 News American Holdings, Inc.................................................... 7.50 03/01/00 4,084,680
2,000 Tele-Communications, Inc....................................................... 6.875 02/15/06 1,919,140
-------------
6,003,820
-------------
CHEMICALS (1.2%)
2,000 Millennium America, Inc........................................................ 7.00 11/15/06 1,970,620
-------------
CHEMICALS - SPECIALTY (1.2%)
2,000 W. R. Grace & Co............................................................... 7.40 02/01/00 2,045,400
-------------
COMPUTERS (1.1%)
1,900 Oracle Corp.................................................................... 6.91 02/15/07 1,889,645
-------------
ELECTRONICS -
SEMICONDUCTORS/COMPONENTS (1.9%)
3,000 Applied Materials Inc.......................................................... 8.00 09/01/04 3,179,040
-------------
FINANCIAL (4.2%)
2,000 Ikon Capital Inc............................................................... 6.73 06/15/01 2,009,320
5,037 Nac Re Corp. .................................................................. 8.00 06/15/99 5,177,331
-------------
7,186,651
-------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES
PORTFOLIO OF INVESTMENTS AUGUST 31, 1997, CONTINUED

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
- -------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
FOREIGN GOVERNMENT (3.0%)
$ 5,250 Israel (State of).............................................................. 6.375% 12/15/05 $ 5,025,563
-------------
FUNERAL SERVICES (1.7%)
3,000 Stewart Enterprises............................................................ 6.70 12/01/03 2,956,290
-------------
HEALTHCARE (2.9%)
4,975 Columbia/HCA Healthcare Corp................................................... 6.87 09/15/03 4,884,455
-------------
LEISURE (1.8%)
2,900 Royal Caribbean Cruises, Ltd. (Liberia)........................................ 8.25 04/01/05 3,071,520
-------------
OIL INTEGRATED - INTERNATIONAL (3.0%)
5,000 Societe Nationale Elf Aquitaine (France)....................................... 7.75 05/01/99 5,124,050
-------------
PAPER & FOREST PRODUCTS (4.7%)
3,000 Donohue Forest Products (Canada)............................................... 7.625 05/15/07 3,079,200
4,900 Noranda Forest, Inc. (Canada).................................................. 6.875 11/15/05 4,824,785
-------------
7,903,985
-------------
PHOTOGRAPHY/IMAGING (2.4%)
4,000 Polaroid Corp.................................................................. 8.00 03/15/99 4,101,320
-------------
RETAIL STORES (1.8%)
3,000 TJX Companies, Inc............................................................. 6.625 06/15/00 3,008,250
-------------
STEEL & IRON (3.4%)
6,000 Pohang Iron & Steel Co. (South Korea).......................................... 7.125 11/01/06 5,787,120
-------------
TEXTILES (1.7%)
2,975 Burlington Industries, Inc..................................................... 7.25 09/15/05 2,953,699
-------------
TRANSPORTATION (3.0%)
5,000 Norfolk Southern Corp.......................................................... 6.70 05/01/00 5,039,950
-------------
UTILITIES - ELECTRIC (12.7%)
2,000 Arizona Public Service Co...................................................... 7.625 06/15/99 2,045,980
2,000 Commonwealth Edison Co......................................................... 7.50 01/01/01 2,015,400
4,700 Connecticut Light & Power Co................................................... 7.875 06/01/01 4,741,642
5,000 DR Investments (England) - 144A*............................................... 7.45 05/15/07 5,113,650
1,500 Niagara Mohawk Power Corp...................................................... 8.00 06/01/04 1,534,125
3,000 System Energy Resources, Inc................................................... 7.71 08/01/01 3,083,160
3,000 Western Resources, Inc......................................................... 6.875 08/01/04 2,972,100
-------------
21,506,057
-------------

TOTAL CORPORATE BONDS
(IDENTIFIED COST $141,069,863).................................................................... 141,482,713
-------------

U.S. GOVERNMENT & AGENCY OBLIGATIONS (13.3%)
1,700 Federal Home Loan Banks........................................................ 7.05 03/24/04 1,690,293
1,000 Federal Home Loan Mortgage Corp................................................ 6.07 11/20/98 1,000,240
136 Federal Home Loan Mortgage Corp................................................ 8.50 12/01/01 138,357
99 Federal Home Loan Mortgage Corp................................................ 8.50 01/01/02 100,375
299 Federal Home Loan Mortgage Corp................................................ 8.50 07/01/02 303,290
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES
PORTFOLIO OF INVESTMENTS AUGUST 31, 1997, CONTINUED

TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(IDENTIFIED COST $22,232,549)..................................................................... 22,590,266
-------------

SHORT-TERM INVESTMENT (1.9%)
REPURCHASE AGREEMENT
3,163 The Bank of New York (dated 08/29/97; proceeds $3,165,341) (a)
(IDENTIFIED COST $3,163,496)................................................... 5.25 09/02/97 3,163,496
-------------
</TABLE>

<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $166,465,908) (B)........................................................ 98.5% 167,236,475

OTHER ASSETS IN EXCESS OF LIABILITIES..................................................... 1.5 2,496,070
------- -------------

NET ASSETS................................................................................ 100.0% $ 169,732,545
------- -------------
------- -------------
</TABLE>

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

* Resale is restricted to qualified institutional investors.
(a) Collateralized by $3,863,343 Federal National Mortgage Assoc. 6.114% due
05/01/22 valued at $3,226,766.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $1,776,246 and the
aggregate gross unrealized depreciation is $1,005,679, resulting in net
unrealized appreciation of $770,567.

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1997

<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (identified cost $166,465,908)............................ $167,236,475
Receivable for:
Interest.................................................................................. 3,191,411
Shares of beneficial interest sold........................................................ 1,890,398
Principal paydowns........................................................................ 21,657
Prepaid expenses and other assets............................................................. 37,219
------------
TOTAL ASSETS............................................................................. 172,377,160
------------
LIABILITIES:
Payable for:
Shares of beneficial interest repurchased................................................. 2,292,281
Plan of distribution fee.................................................................. 121,084
Investment management fee................................................................. 87,953
Dividends and distributions to shareholders............................................... 39,006
Accrued expenses and other payables........................................................... 104,291
------------
TOTAL LIABILITIES........................................................................ 2,644,615
------------
NET ASSETS............................................................................... $169,732,545
------------
------------
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................... $180,124,413
Net unrealized appreciation................................................................... 770,567
Accumulated undistributed net investment income............................................... 52,362
Accumulated net realized loss................................................................. (11,214,797)
------------
NET ASSETS............................................................................... $169,732,545
------------
------------
CLASS A SHARES:
Net Assets.................................................................................... $1,854,754
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 193,352
NET ASSET VALUE PER SHARE................................................................ $ 9.59
------------
------------

MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 4.44% OF NET ASSET
VALUE)................................................................................. $10.02
------------
------------
CLASS B SHARES:
Net Assets.................................................................................... $162,958,969
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 16,985,340
NET ASSET VALUE PER SHARE................................................................ $ 9.59
------------
------------
CLASS C SHARES:
Net Assets.................................................................................... $38,430
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 3,999
NET ASSET VALUE PER SHARE................................................................ $ 9.61
------------
------------
CLASS D SHARES:
Net Assets.................................................................................... $4,880,392
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 508,841
NET ASSET VALUE PER SHARE................................................................ $ 9.59
------------
------------
</TABLE>

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED AUGUST 31, 1997*

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

INTEREST INCOME................................................................................ $13,337,718
-----------

EXPENSES
Plan of distribution fee (Class B shares)...................................................... 1,578,380
Investment management fee...................................................................... 1,116,809
Transfer agent fees and expenses............................................................... 159,748
Registration fees.............................................................................. 63,901
Professional fees.............................................................................. 58,016
Shareholder reports and notices................................................................ 47,777
Custodian fees................................................................................. 17,464
Trustees' fees and expenses.................................................................... 14,160
Other.......................................................................................... 8,926
-----------

TOTAL EXPENSES............................................................................ 3,065,181
-----------

NET INVESTMENT INCOME..................................................................... 10,272,537
-----------

NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss.............................................................................. (2,567,762)
Net change in unrealized depreciation.......................................................... 6,828,218
-----------

NET GAIN.................................................................................. 4,260,456
-----------

NET INCREASE................................................................................... $14,532,993
-----------
-----------
</TABLE>

- ---------------------
* Class A, Class C and Class D shares were issued July 28, 1997.

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
AUGUST 31, 1997* AUGUST 31, 1996
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>

INCREASE (DECREASE) IN NET ASSETS:

OPERATIONS:
Net investment income.................................................... $ 10,272,537 $ 12,684,563
Net realized loss........................................................ (2,567,762) (788,498)
Net change in unrealized depreciation.................................... 6,828,218 (6,023,150)
---------------- ---------------

NET INCREASE........................................................ 14,532,993 5,872,915
---------------- ---------------

DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME
Class A shares........................................................... (58) --
Class B shares........................................................... (10,229,881) (12,688,795)
Class C shares........................................................... (83) --
Class D shares........................................................... (25,048) --
---------------- ---------------

TOTAL DIVIDENDS..................................................... (10,255,070) (12,688,795)
---------------- ---------------
Net decrease from transactions in shares of beneficial interest.......... (43,456,259) (17,024,823)
---------------- ---------------

NET DECREASE........................................................ (39,178,336) (23,840,703)

NET ASSETS:
Beginning of period...................................................... 208,910,881 232,751,584
---------------- ---------------

END OF PERIOD
(INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME OF $52,362 AND
$34,895, RESPECTIVELY)............................................... $ 169,732,545 $ 208,910,881
---------------- ---------------
---------------- ---------------
</TABLE>

- ---------------------
* Class A, Class C, and Class D Shares were issued July 28, 1997.

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1997

1. ORGANIZATION AND ACCOUNTING POLICIES

Dean Witter Intermediate Income Securities (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's investment objective is high
current income consistent with safety of principal. The Fund was organized as a
Massachusetts business trust on September 1, 1988 and commenced operations on
May 3, 1989. On July 28, 1997, the Fund commenced offering three additional
classes of shares, with the then current shares, other than shares held by
certain employee benefit plans established by Dean Witter Reynolds Inc. and its
affiliate, SPS Transaction Services, Inc., designated as Class B shares. Shares
held by those employee benefit plans prior to July 28, 1997 have been designated
Class D shares.

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, 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;
(2) all other portfolio securities for which over-the-counter market quotations
are readily available are valued at the latest available bid price; (3) when
market quotations are not readily available, including circumstances under which
it is determined by Dean Witter InterCapital Inc (the "Investment Manager") that
sale and 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 portfolio securities may be valued by an outside
pricing service approved
<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1997, CONTINUED

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, 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.
Dividend income and other distributions are recorded on the ex-dividend date.
Discounts are accreted over the life of the respective securities. 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. 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.

E. 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.
<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1997, CONTINUED

2. INVESTMENT MANAGEMENT AGREEMENT

Pursuant to an Investment Management Agreement with Dean Witter InterCapital
Inc. (the "Investment Manager"), the Fund pays the Investment Manager a
management fee, calculated daily and payable monthly, by applying the following
annual rates to the net assets of the Fund determined as of the close of each
business day: 0.60% of the portion of the daily net assets not exceeding $500
million; 0.50% of the portion of daily net assets exceeding $500 million but not
exceeding $750 million; 0.40% of the portion of the daily net assets exceeding
$750 million but not exceeding $1 billion; and 0.30% of the portion of the daily
net assets exceeding $1 billion.

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

3. PLAN OF DISTRIBUTION

Shares of the Fund are distributed by Dean Witter Distributors Inc. (the
"Distributor"), an affiliate of the Investment Manager. The Fund has adopted a
Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act. 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 - 0.25% of the average
daily net assets of Class A; (ii) Class B - 0.85% of the lesser of: (a) the
average daily aggregate gross sales of the Class B shares since the inception of
the Fund (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 inception upon which a contingent deferred sales charge had
been imposed or waived; or (b) the average daily net assets of Class B; and
(iii) Class C - 0.85% 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 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, the account executives of Dean Witter Reynolds
Inc. ("DWR"), an affiliate of the Investment Manager and Distributor, and others
who engage in or support distribution of the shares or who service shareholder
accounts, including overhead and telephone expenses; printing and distribution
of prospectuses and reports used in
<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1997, CONTINUED

connection with the offering of these shares to other than current shareholders;
and 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 DWR 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 $5,734,753 at August 31, 1997.

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 0.85% 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 account executives may be reimbursed in the subsequent
calendar year. For the year ended August 31, 1997, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.25% and
0.85%, respectively.

The Distributor has informed the Fund that for the year ended August 31, 1997,
it received contingent deferred sales charges from certain redemptions of the
Fund's Class B shares of $285,035, and received $300 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 of portfolio securities, excluding
short-term investments, for the year ended August 31, 1997, aggregated
$170,907,463 and $188,266,523, respectively. Included in the aforementioned are
purchases and sales of U.S. Government securities of $50,361,139 and
$66,518,238, respectively.
<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1997, CONTINUED

Dean Witter Trust FSB, an affiliate of the Investment Manager and Distributor,
is the Fund's transfer agent. At August 31, 1997, the Fund had transfer agent
fees and expenses payable of approximately $2,000.

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. At August 31, 1997, the Fund had an accrued pension liability of
$48,811 which is included in accrued expenses in the Statement of Assets and
Liabilities. Aggregate pension costs for the year ended August 31, 1997 included
in Director's fees and expenses in the Statement of Operations amounted to
$3,294.

5. SHARES OF BENEFICIAL INTEREST+

Transactions in shares of beneficial interest were as follows:

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
AUGUST 31, 1997 AUGUST 31, 1996
---------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
CLASS A SHARES*
Sold............................................................. 193,347 $ 1,854,318 -- --
Reinvestment of dividends........................................ 5 54 -- --
----------- -------------- ----------- ------------
Net increase - Class A........................................... 193,352 1,854,372 -- --
----------- -------------- ----------- ------------
CLASS B SHARES
Sold............................................................. 8,499,296 80,974,547 5,122,000 $ 49,165,458
Reinvestment of dividends........................................ 587,192 5,604,585 725,423 6,970,644
Redeemed......................................................... (13,839,797) (131,962,423) (7,617,219) (73,160,925)
----------- -------------- ----------- ------------
Net decrease - Class B........................................... (4,753,309) (45,383,291) (1,769,796) (17,024,823)
----------- -------------- ----------- ------------
CLASS C SHARES*
Sold............................................................. 3,993 38,561 -- --
Reinvestment of dividends........................................ 6 56 -- --
----------- -------------- ----------- ------------
Net increase - Class C........................................... 3,999 38,617 -- --
----------- -------------- ----------- ------------
CLASS D SHARES*
Sold............................................................. 10,611 102,479 -- --
Reinvestment of dividends........................................ 2,476 23,704 -- --
Redeemed......................................................... (9,547) (92,140) -- --
----------- -------------- ----------- ------------
Net increase - Class D........................................... 3,540 34,043 -- --
----------- -------------- ----------- ------------
Net decrease in Fund............................................. (4,552,418) $ (43,456,259) (1,769,796) $(17,024,823)
----------- -------------- ----------- ------------
----------- -------------- ----------- ------------
</TABLE>

- ---------------------
+ On July 28, 1997, 505,301 shares representing $4,891,310 were transferred
to Class D.
* For the period July 28, 1997 (issue date) through August 31, 1997.
</TABLE>

<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES
NOTES TO FINANCIAL STATEMENTS AUGUST 31, 1997, CONTINUED

6. FEDERAL INCOME TAX STATUS

At August 31, 1997, the Fund had a net capital loss carryover of approximately
$9,320,000, which may be used to offset future capital gains to the extent
provided by regulations, which is available through August 31 of the following
years:

<TABLE>
<CAPTION>
AMOUNTS IN THOUSANDS
- -------------------------------
2003 2004 2005
- --------- --------- ---------
<S> <C> <C>
$ 6,656 $ 313 $ 2,351
- --------- --------- ---------
- --------- --------- ---------
</TABLE>

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 $1,877,000 during fiscal 1997.

As of August 31, 1997, the Fund had temporary book/tax differences primarily
attributable to post-October losses.
<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES
FINANCIAL HIGHLIGHTS

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

<TABLE>
<CAPTION>
FOR
THE
PERIOD
MAY
3,
1989*
THROUGH
FOR THE YEAR ENDED AUGUST 31 AUGUST
---------------------------------------------------------------------------------------------- 31,
1997**++ 1996 1995 1994 1993 1992 1991 1990 1989
- -----------------------------------------------------------------------------------------------------------------------

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

PER SHARE
OPERATING
PERFORMANCE:

Net asset value,
beginning of
period.......... $ 9.39 $ 9.69 $ 9.51 $ 10.26 $ 10.05 $ 9.59 $ 9.42 $ 9.98 $10.00
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----

Net investment
income.......... 0.53 0.55 0.59 0.58 0.62 0.70 0.79 0.86 0.28

Net realized and
unrealized gain
(loss).......... 0.20 (0.30) 0.19 (0.73) 0.20 0.46 0.17 (0.55) (0.02)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----

Total from
investment
operations...... 0.73 0.25 0.78 (0.15) 0.82 1.16 0.96 0.31 0.26
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----

Less dividends
and
distributions
from:
Net investment
income........ (0.53) (0.55) (0.59) (0.56) (0.61) (0.70) (0.79) (0.86) (0.28)
Net realized
gain.......... -- -- (0.01) (0.04) -- -- -- (0.01) --
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----

Total dividends
and
distributions... (0.53) (0.55) (0.60) (0.60) (0.61) (0.70) (0.79) (0.87) (0.28)
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----

Net asset value,
end of period... $ 9.59 $ 9.39 $ 9.69 $ 9.51 $ 10.26 $ 10.05 $ 9.59 $ 9.42 $9.98
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----

TOTAL INVESTMENT
RETURN+.......... 7.93% 2.58% 8.56% (1.50)% 8.43% 12.58% 10.78% 3.22% 2.57%(1)

RATIOS TO AVERAGE
NET ASSETS:
Expenses......... 1.65% 1.62% 1.63% 1.63% 1.62% 1.69% 1.69% 1.75% 1.42%(2)(3)

Net investment
income.......... 5.52% 5.69% 6.23% 5.80% 6.12% 7.11% 8.49% 8.78% 8.18%(2)(3)

SUPPLEMENTAL DATA:
Net assets, end
of period, in
thousands....... $162,959 $208,911 $232,752 $245,750 $254,431 $187,285 $115,204 $114,086 $69,946

Portfolio
turnover rate... 98% 115% 114% 122% 132% 93% 150% 135% 30%(1)
<FN>

- ---------------------
* Commencement of operations.
** 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 held by certain
employee benefit plans established by Dean Witter Reynolds Inc. and its
affiliate, SPS Transaction Services, Inc., have been designated as Class B
shares. 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) Not annualized.
(2) Annualized.
(3) If the Fund had borne all the expenses that were assumed or waived by the
Investment Manager, the above expense and net investment income ratios
would have been 2.15% and 7.44%, respectively.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES
FINANCIAL HIGHLIGHTS, CONTINUED

<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
THROUGH
AUGUST 31,
1997++
- ------------------------------------------------------------------------------
<S> <C>
CLASS A SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period........................ $ 9.68
------
Net investment income....................................... 0.06
Net realized and unrealized loss............................ (0.10)
------
Total from investment operations............................ (0.04)
------
Less dividends from net investment income................... (0.05)
------
Net asset value, end of period.............................. $ 9.59
------
------
TOTAL INVESTMENT RETURN+.................................... (0.46)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 2.18%(2)
Net investment income....................................... 6.10%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $1,855
Portfolio turnover rate..................................... 98%
</TABLE>

<TABLE>
<S> <C>
CLASS C SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period........................ $ 9.68
------
Net investment income....................................... 0.04
Net realized and unrealized loss............................ (0.07)
------
Total from investment operations............................ (0.03)
------
Less dividends from net investment income................... (0.04)
------
Net asset value, end of period.............................. $ 9.61
------
------
TOTAL INVESTMENT RETURN+.................................... (0.31)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 2.02%(2)
Net investment income....................................... 4.22%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $38
Portfolio turnover rate..................................... 98%
<FN>

- ---------------------
* 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.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES
FINANCIAL HIGHLIGHTS, CONTINUED

<TABLE>
<CAPTION>
FOR THE PERIOD
JULY 28, 1997*
THROUGH
AUGUST 31,
1997++
- ------------------------------------------------------------------------------

<S> <C>
CLASS D SHARES

PER SHARE OPERATING PERFORMANCE:

Net asset value, beginning of period........................ $ 9.68
------

Net investment income....................................... 0.05

Net realized and unrealized loss............................ (0.09)
------

Total from investment operations............................ (0.04)
------

Less dividends from net investment income................... (0.05)
------

Net asset value, end of period.............................. $ 9.59
------
------

TOTAL INVESTMENT RETURN+.................................... (0.44)%(1)

RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 1.11%(2)

Net investment income....................................... 5.91%(2)

SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $4,880

Portfolio turnover rate..................................... 98%
<FN>

- ---------------------
* The date shares were first issued.
++ 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.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER INTERMEDIATE INCOME SECURITIES
REPORT OF INDEPENDENT ACCOUNTANTS

TO THE SHAREHOLDERS AND TRUSTEES
OF DEAN WITTER INTERMEDIATE INCOME SECURITIES

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 Intermediate Income
Securities (the "Fund") at August 31, 1997, 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 August
31, 1997 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
OCTOBER 10, 1997
<PAGE>

TRUSTEES

Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
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

Barry Fink
Vice President, Secretary and General Counsel

Rochelle G. Siegel
Vice President

Thomas F. Caloia
Treasurer

TRANSFER AGENT

Dean Witter Trust FSB
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 accompanied by an effective prospectus.

DEAN WITTER
INTERMEDIATE
INCOME
SECURITIES

ANNUAL REPORT
AUGUST 31, 1997