<PAGE> PAGE 1
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000 C000000 0000854904
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000 J000000 A
001 A000000 MSDW PRIME INCOME TRUST
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012 B000001 84-1785
012 C010001 JERSEY CITY
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<PAGE> PAGE 2
012 C030001 07311
013 A000001 PRICEWATERHOUSECOOPERS LLP
013 B010001 NEW YORK
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014 A000001 DEAN WITTER REYNOLDS INC.
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 5
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<PAGE> PAGE 6
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<PAGE> PAGE 7
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<PAGE> PAGE 8
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<PAGE> PAGE 9
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SIGNATURE BARRY FINK
TITLE VICE PRESIDENT
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
MSDW PRIME INCOME TRUST
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> SEP-30-1999
<INVESTMENTS-AT-COST> 2,512,770,106
<INVESTMENTS-AT-VALUE> 2,498,304,497
<RECEIVABLES> 17,514,117
<ASSETS-OTHER> 5,126,064
<OTHER-ITEMS-ASSETS> 4,746,825
<TOTAL-ASSETS> 2,525,691,503
<PAYABLE-FOR-SECURITIES> (3,494,683)
<SENIOR-LONG-TERM-DEBT> (304,585)
<OTHER-ITEMS-LIABILITIES> (7,933,212)
<TOTAL-LIABILITIES> (11,732,480)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,536,180,951
<SHARES-COMMON-STOCK> 254,813,996
<SHARES-COMMON-PRIOR> 201,526,077
<ACCUMULATED-NII-CURRENT> 704,520
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (8,460,839)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (14,465,609)
<NET-ASSETS> 2,513,959,023
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 183,155,103
<OTHER-INCOME> 6,082,340
<EXPENSES-NET> (28,089,658)
<NET-INVESTMENT-INCOME> 161,147,785
<REALIZED-GAINS-CURRENT> 1,067,708
<APPREC-INCREASE-CURRENT> (13,449,451)
<NET-CHANGE-FROM-OPS> 148,766,042
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (159,065,743)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 649,548,611
<NUMBER-OF-SHARES-REDEEMED> (188,124,450)
<SHARES-REINVESTED> (88,658,423)
<NET-CHANGE-IN-ASSETS> 517,249,595
<ACCUMULATED-NII-PRIOR> (552,409)
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> (19,568,322)
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (28,122,896)
<AVERAGE-NET-ASSETS> 2,296,210,212
<PER-SHARE-NAV-BEGIN> 9.91
<PER-SHARE-NII> 0.70
<PER-SHARE-GAIN-APPREC> (0.05)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.69)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.87
<EXPENSE-RATIO> 1.22
</TABLE>
To the Shareholders and Board of Directors of
XYZ Fund
(2)
Report of Independent Accountants
To the Shareholders and Trustees of
Morgan Stanley Dean Witter Prime Income Trust
In planning and performing our audit of the financial
statements of Morgan Stanley Dean Witter Prime Income Trust
(the "Trust") for the year ended September 30, 1999, we
considered its internal control, including control activities
for safeguarding securities, in order to determine our auditing
procedures for the purpose of expressing our opinion on the
financial statements and to comply with the requirements of
Form N-SAR, not to provide assurance on internal control.
The management of the Fund is responsible for establishing and
maintaining internal control. In fulfilling this
responsibility, estimates and judgments by management are
required to assess the expected benefits and related costs of
controls. Generally, controls that are relevant to an audit
pertain to the entity's objective of preparing financial
statements for external purposes that are fairly presented in
conformity with generally accepted accounting principles.
Those controls include the safeguarding of assets against
unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or
fraud may occur and not be detected. Also, projection of any
evaluation of internal control to future periods is subject to
the risk that it may become inadequate because of changes in
conditions or that the effectiveness of the design and
operation may deteriorate.
Our consideration of internal control would not necessarily
disclose all matters in internal control that might be material
weaknesses under standards established by the American
Institute of Certified Public Accountants. A material weakness
is a condition in which the design or operation of one or more
of the internal control components does not reduce to a
relatively low level the risk that misstatements caused by
error or fraud in amounts that would be material in relation to
the financial statements being audited may occur and not be
detected within a timely period by employees in the normal
course of performing their assigned functions. However, we
noted no matters involving internal control and its operation,
including controls for safeguarding securities, that we
consider to be material weaknesses as defined above as of
September 30, 1999.
This report is intended solely for the information and use of
management and the Trustees of the Fund and the Securities and
Exchange Commission and is not intended to be and should not be
used by anyone other than these specified parties.
PricewaterhouseCoopers LLP
New York, New York
November 15, 1999
