MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES, N-30D, 2000-01-03

MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
N-30D, 2000-01-03

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<PAGE>

MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SE- TWO WORLD TRADE CENTER,
CURITIES NEW YORK, NEW YORK 10048
LETTER TO THE SHAREHOLDERS OCTOBER 31, 1999

DEAR SHAREHOLDER:

The twelve-month period ended October 31, 1999, saw the U.S. equity market rally
to record highs as the domestic economy continued to maintain its strength and
international stock markets soared on improving economic conditions overseas,
especially in Southeast Asia and Japan. After a peak in the U.S. markets in the
middle of July, stock prices pulled back toward the end of the period amid
concerns that the economy might be growing too fast. This concern was manifested
in two Federal Reserve Board moves, in June and August, that raised the
federal-funds rate a total of 50 basis points while inflation remained low and
the economy continued to grow. Following the close of the fiscal year, the Fed
again raised the federal-funds rate by 25 basis points, to 5.50 percent.

PERFORMANCE

For the twelve-month period ended October 31, 1999, Morgan Stanley Dean Witter
Capital Growth Securities' Class B shares produced a total return of 28.70
percent, compared to 25.66 percent for the Standard & Poor's 500 Composite Stock
Price Index (S&P 500) and 29.32 percent for the Lipper Growth Funds Index. For
the same period, the Fund's Class A, C and D shares produced total returns of
29.74 percent, 29.17 percent and 30.00 percent, respectively. The performance of
the Fund's four share classes varies because of differing expenses. (The total
return figures shown assume the reinvestment of all distributions and do not
reflect the deduction of any applicable sales charges.) The accompanying chart
compares the Fund's performance to that of the S&P and Lipper indexes.

PORTFOLIO

During the period under review the Fund maintained its commitment to investing
in companies of all sizes and in all the major sectors of the S&P 500. The
technology sector continued to be overweighted in the

<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
LETTER TO THE SHAREHOLDERS OCTOBER 31, 1999, CONTINUED

Fund's portfolio throughout most of the fiscal year, representing more than 27
percent of the Fund's invested assets at the close of fiscal 1999. Large
positions in semiconductor and semiconductor equipment stocks contributed
positively to the Fund's performance, as did exposure to the networking and
computer software industries. Consumer stocks represented the next-highest
concentration within the portfolio, at 21.4 percent. Within this grouping,
retail and media-related stocks were overweighted for much of the fiscal year.

Financial services and interest-rate-sensitive stocks represented the
third-highest component of the portfolio, with a combined weighting of 19.6
percent. After having underweighted this segment for much of the fiscal year,
the Fund moved back into these sectors by increasing its positions in the
banking, insurance and diversified financial industries. Health care maintained
its weighting of 11.3 percent. This sector was devoted principally to mid- and
large-capitalization pharmaceutical and related companies. The balance of the
Fund's portfolio was invested in the energy, capital goods, basic industry and
utilities sectors. This blend of growth and value stocks served the Fund
reasonably well during the year.

As of October 31, 1999, the Fund had approximately 50 percent of its net assets
invested in companies with market capitalizations greater than $15 billion, 32
percent in companies with market capitalizations under $5 billion, and
approximately 16.5 percent in companies in the $5- to $15-billion range. The
remaining 1.5 percent of the portfolio was in cash and equivalents. Going
forward, we do not anticipate a dramatic shift in the market-capitalization
structure of the Fund. Because we believe that portfolio diversification is
important across industry sectors and capitalization ranges alike, the Fund will
continue to hold stocks of various market capitalizations.

At the end of the period under review the Fund's ten largest holdings were
General Electric, Citigroup, Cisco Systems, Calpine, Johnson & Johnson,
Bristol-Myers Squibb, Wells Fargo, Warner-Lambert, Microsoft and Applied
Materials.

LOOKING AHEAD

We believe the U.S. economy will keep growing in the months ahead as low
unemployment and increased productivity will likely continue to confound
tried-and-true economic models. However, should our economy continue to show
signs of inordinately strong growth along with increasing inflationary
pressures, the Federal Reserve may need to maintain its path of tighter monetary
policy, possibly resulting in further interest-rate hikes. The Fund will
continue to monitor market conditions and look for attractive investment
opportunities as they become available.

2
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
LETTER TO THE SHAREHOLDERS OCTOBER 31, 1999, CONTINUED

We appreciate your ongoing support of Morgan Stanley Dean Witter Capital Growth
Securities 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 CAPITAL GROWTH SE-
CURITIES
FUND PERFORMANCE OCTOBER 31, 1999

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
GROWTH OF $10,000 -- CLASS B SHARES FUND S & P 500(4) LIPPER(5)
($ IN THOUSANDS)
<S> <C> <C> <C> <C>
April -1990 $10,000 $10,000 $10,000
October -1990 $9,190 $9,173 $8,740
October -1991 $13,605 $12,242 $12,363
October -1992 $14,158 $13,459 $13,328
October -1993 $13,556 $15,465 $15,858
October -1994 $13,450 $16,061 $16,182
October -1995 $16,330 $20,298 $20,062
October -1996 $19,256 $25,182 $23,470
October -1997 $25,267 $33,253 $30,130
October -1998 $24,367 $40,565 $34,312
October -1999 $31,362 (3) $50,975 $44,372
</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+
-------------------------------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C>
1 Year 28.70%(1) 23.70%(2) 1 Year 29.74%(1) 22.93%(2)
5 Years 18.45 (1) 18.25 (2) Since Inception (7/28/97) 12.54 (1) 9.88 (2)
Since Inception (4/2/90) 12.67 (1) 12.67 (2)
</TABLE>

<TABLE>
<CAPTION>
CLASS C SHARES++ CLASS D SHARES#
--------------------------------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C>
1 Year 29.17%(1) 28.17%(2) 1 Year 30.00%(1)
Since Inception (7/28/97) 11.85 (1) 11.85 (2) Since Inception (7/28/97) 12.80 (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 October 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 Lipper Growth Fund Index is an equally-weighted performance index of
the largest qualifying funds(based on net assets) in the Lipper Growth
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.
* 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 CAPITAL GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999

<TABLE>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS (98.7%)
ADVERTISING (1.8%)
40,000 Omnicom Group, Inc..................................................................... $ 3,520,000
135,000 Valassis Communications, Inc.*......................................................... 5,805,000
------------
9,325,000
------------
ALUMINUM (0.6%)
50,000 Alcoa, Inc............................................................................. 3,037,500
------------
APPAREL (0.3%)
20,000 Gucci Group N.V. (Netherlands)......................................................... 1,615,000
------------
AUTOMOTIVE AFTERMARKET (0.8%)
50,000 SPX Corp.*............................................................................. 4,237,500
------------
BROADCASTING (3.2%)
85,000 Clear Channel Communications, Inc.*.................................................... 6,831,875
135,000 Infinity Broadcasting Corp. (Series A)*................................................ 4,665,937
60,000 Univision Communications, Inc. (Class A)*.............................................. 5,103,750
------------
16,601,562
------------
BUILDING MATERIALS (0.0%)
2,500 Southdown, Inc......................................................................... 120,781
------------
BUILDING MATERIALS/D I Y CHAINS (2.6%)
85,000 Home Depot, Inc. (The)................................................................. 6,417,500
125,000 Lowe's Companies, Inc.................................................................. 6,875,000
------------
13,292,500
------------
CABLE TELEVISION (1.5%)
175,000 Cox Communications, Inc. (Class A)*.................................................... 7,951,562
------------
CASINO/GAMBLING (1.5%)
175,000 Harrah's Entertainment, Inc.*.......................................................... 5,064,062
200,000 Park Place Entertainment Corp.*........................................................ 2,625,000
------------
7,689,062
------------
CELLULAR TELEPHONE (0.4%)
40,000 Vodafone AirTouch PLC (ADR) (United Kingdom)........................................... 1,917,500
------------
COMPUTER COMMUNICATIONS (3.2%)
160,000 Cisco Systems, Inc.*................................................................... 11,840,000
20,000 JNI Corp.*............................................................................. 1,068,750
75,000 Xircom, Inc.*.......................................................................... 3,782,812
------------
16,691,562
------------
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMPUTER SOFTWARE (8.2%)
35,000 Check Point Software Technologies Ltd. (Israel)*....................................... $ 4,046,875
40,000 Citrix Systems, Inc.*.................................................................. 2,562,500
150,000 Documentum, Inc.*...................................................................... 4,275,000
40,000 i2 Technologies, Inc.*................................................................. 3,157,500
75,000 Legato Systems, Inc.*.................................................................. 4,021,875
50,000 Mercury Interactive Corp.*............................................................. 4,050,000
100,000 Microsoft Corp.*....................................................................... 9,256,250
150,000 Saga Systems, Inc.*.................................................................... 2,175,000
100,000 Symantec Corp.*........................................................................ 4,768,750
35,000 Veritas Software Corp.*................................................................ 3,773,437
650 Visio Corp.*........................................................................... 25,716
------------
42,112,903
------------
COMPUTER/VIDEO CHAINS (0.3%)
30,000 Circuit City Stores, Inc.-Circuit City Group........................................... 1,280,625
------------
DEPARTMENT STORES (0.0%)
700 Saks Incorporated*..................................................................... 12,031
------------
DISCOUNT CHAINS (2.2%)
225,000 Consolidated Stores Corp.*............................................................. 4,120,312
125,000 Wal-Mart Stores, Inc................................................................... 7,085,937
------------
11,206,249
------------
DIVERSIFIED ELECTRONIC PRODUCTS (0.6%)
20,000 JDS Uniphase Corp.*.................................................................... 3,336,250
------------
DIVERSIFIED FINANCIAL SERVICES (5.8%)
45,000 American Express Co.................................................................... 6,930,000
275,000 Citigroup, Inc. ....................................................................... 14,884,375
75,000 Providian Financial Corp............................................................... 8,175,000
------------
29,989,375
------------
DIVERSIFIED MANUFACTURING (1.2%)
150,000 Dover Corp............................................................................. 6,384,375
1,500 Tyco International Ltd. (Bermuda)...................................................... 59,906
------------
6,444,281
------------
E.D.P. PERIPHERALS (3.1%)
100,000 Advanced Digital Information Corp.*.................................................... 3,725,000
75,000 EMC Corp.*............................................................................. 5,475,000
40,000 Network Appliance, Inc.*............................................................... 2,960,000
35,000 QLogic Corp............................................................................ 3,644,375
------------
15,804,375
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED

<TABLE>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
ELECTRIC UTILITIES (3.3%)
100,000 AES Corp.*............................................................................. $ 5,643,750
200,000 Calpine Corp.*......................................................................... 11,525,000
------------
17,168,750
------------
ELECTRONIC COMPONENTS (1.4%)
175,000 Kemet Corp.*........................................................................... 5,589,062
60,000 Vishay Intertechnology, Inc.*.......................................................... 1,466,250
------------
7,055,312
------------
ELECTRONIC DATA PROCESSING (1.0%)
50,000 Sun Microsystems, Inc.*................................................................ 5,287,500
------------
ELECTRONIC PRODUCTION EQUIPMENT (3.9%)
100,000 Applied Materials, Inc.*............................................................... 8,981,250
40,000 Celestica, Inc.*....................................................................... 2,225,000
60,000 Cognex Corp.*.......................................................................... 1,792,500
85,000 Lam Research Corp.*.................................................................... 7,145,312
------------
20,144,062
------------
FINANCE COMPANIES (0.7%)
67,600 Capital One Financial Corp............................................................. 3,582,800
------------
FOOD DISTRIBUTORS (0.7%)
100,000 SYSCO Corp............................................................................. 3,843,750
------------
GENERIC DRUGS (0.4%)
110,000 Ivax Corp.*............................................................................ 1,931,875
------------
INTEGRATED OIL COMPANIES (2.7%)
40,000 Amerada Hess Corp...................................................................... 2,295,000
50,000 Atlantic Richfield Co. ................................................................ 4,659,375
125,000 Murphy Oil Corp. ...................................................................... 7,007,812
------------
13,962,187
------------
INTERNET SERVICES (1.3%)
50,000 America Online, Inc.*.................................................................. 6,484,375
------------
INVESTMENT BANKERS/BROKERS/SERVICES (2.2%)
100,000 Edwards (A.G.), Inc.................................................................... 3,006,250
35,000 Lehman Brothers Holdings, Inc.......................................................... 2,579,063
75,000 Merrill Lynch & Co., Inc............................................................... 5,887,500
------------
11,472,813
------------
MAJOR BANKS (4.7%)
85,000 Mellon Financial Corp.................................................................. 3,139,688
25,000 Morgan (J.P.) & Co., Inc............................................................... 3,271,875
50 State Street Corp...................................................................... 3,806
50,000 SunTrust Banks, Inc.................................................................... 3,659,375
75,000 UnionBanCal Corp....................................................................... 3,257,813
225,000 Wells Fargo & Co....................................................................... 10,771,875
------------
24,104,432
------------
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
MAJOR PHARMACEUTICALS (7.4%)
150,000 Bristol-Myers Squibb Co................................................................ $ 11,521,875
110,000 Johnson & Johnson...................................................................... 11,522,500
135,000 Pfizer, Inc............................................................................ 5,332,500
125,000 Warner-Lambert Co...................................................................... 9,976,563
------------
38,353,438
------------
MAJOR U.S. TELECOMMUNICATIONS (2.6%)
30,000 ALLTEL Corp............................................................................ 2,497,500
125,000 Bell Atlantic Corp..................................................................... 8,117,188
30,000 MCI WorldCom, Inc.*.................................................................... 2,572,500
------------
13,187,188
------------
MARINE TRANSPORTATION (0.6%)
100,000 Tidewater, Inc......................................................................... 3,000,000
------------
MEDICAL SPECIALTIES (0.5%)
100,000 Cooper Companies, Inc.*................................................................ 2,500,000
------------
MOVIES/ENTERTAINMENT (1.0%)
135,000 King World Productions, Inc.*.......................................................... 5,231,250
------------
MULTI-LINE INSURANCE (1.2%)
60,000 American International Group, Inc. .................................................... 6,176,250
------------
MULTI-SECTOR COMPANIES (2.9%)
110,000 General Electric Co.................................................................... 14,911,875
------------
NEWSPAPERS (3.6%)
125,000 New York Times Co. (The) (Class A)..................................................... 5,031,250
75,000 Times Mirror Co. (Class A)............................................................. 5,409,375
135,000 Tribune Co. ........................................................................... 8,100,000
------------
18,540,625
------------
OIL/GAS TRANSMISSION (0.9%)
60,000 El Paso Energy Corp.................................................................... 2,460,000
50,000 Enron Corp............................................................................. 1,996,875
------------
4,456,875
------------
OILFIELD SERVICES/EQUIPMENT (1.7%)
125,000 Baker Hughes Inc....................................................................... 3,492,188
75,000 Cooper Cameron Corp.*.................................................................. 2,901,563
75,000 Weatherford International, Inc.*....................................................... 2,540,625
------------
8,934,376
------------
OTHER PHARMACEUTICALS (2.4%)
35,000 Allergan, Inc.......................................................................... 3,758,125
100,300 Biovail Corporation International (Canada)*............................................ 5,535,306
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED

<TABLE>
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
3,000 Medicis Pharmaceutical Corp. (Class A)*................................................ $ 91,500
100,000 Roberts Pharmaceutical Corp.*.......................................................... 3,225,000
------------
12,609,931
------------
OTHER SPECIALTY STORES (1.5%)
5,000 Staples, Inc.*......................................................................... 110,625
40,000 Tiffany & Co........................................................................... 2,380,000
100,000 Williams-Sonoma, Inc.*................................................................. 5,375,000
------------
7,865,625
------------
OTHER TELECOMMUNICATIONS (1.4%)
225,000 Cincinnati Bell, Inc.*................................................................. 4,682,813
20,000 Telephone and Data Systems, Inc........................................................ 2,305,000
------------
6,987,813
------------
PACKAGED FOODS (0.4%)
50,000 Dean Foods Co.......................................................................... 2,312,500
------------
PRECIOUS METALS (0.4%)
100,000 Barrick Gold Corp. (Canada)............................................................ 1,831,250
------------
RESTAURANTS (0.5%)
100,000 Starbucks Corp.*....................................................................... 2,718,750
------------
SAVINGS & LOAN ASSOCIATIONS (0.8%)
35,000 Golden West Financial Corp............................................................. 3,911,250
------------
SEMICONDUCTORS (5.1%)
50,000 Analog Devices, Inc.*.................................................................. 2,656,250
115,000 Atmel Corp.*........................................................................... 4,434,688
200,000 Cypress Semiconductor Corp.*........................................................... 5,112,500
110,000 International Rectifier Corp.*......................................................... 2,138,125
65,000 STMicroelectronics N.V. (Netherlands).................................................. 5,906,875
75,000 Xilinx, Inc.*.......................................................................... 5,892,188
------------
26,140,626
------------
TELECOMMUNICATIONS EQUIPMENT (3.8%)
50,000 Antec Corp.*........................................................................... 2,415,625
35,000 Comverse Technology, Inc.*............................................................. 3,968,125
75,000 General Instrument Corp.*.............................................................. 4,035,938
110,000 Nortel Networks Corp. (Canada)......................................................... 6,813,125
NUMBER OF
SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
10,000 QUALCOMM Inc.*......................................................................... $ 2,226,875
------------
19,459,688
------------
TRUCKING (0.4%)
50,000 USFreightways Corp. ................................................................... 2,265,625
------------

TOTAL COMMON STOCKS
(IDENTIFIED COST $451,379,947)......................................................... 509,098,409
------------
</TABLE>

<TABLE>
PRINCIPAL
AMOUNT IN
THOUSANDS
- --------
<C> <S> <C>
SHORT-TERM INVESTMENT (a) (7.4%)
U.S. GOVERNMENT AGENCY
$ 38,300 Federal Home Loan Mortgage Corp. 5.16% due 11/01/99 (AMORTIZED COST $38,300,000)....... 38,300,000
------------
</TABLE>

<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $489,679,947)(b)......................................................... 106.1% 547,398,409
-------------

LIABILITIES IN EXCESS OF OTHER ASSETS..................................................... (6.1) (31,719,265)
----- -------------

NET ASSETS................................................................................ 100.0% $ 515,679,144
----- -------------
----- -------------
</TABLE>

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

ADR American Depository Receipt.
* Non-income producing security.
(a) Security was purchased on a discount basis. The interest rate shown has
been adjusted to reflect a money market equivalent yield.
(b) The aggregate cost for federal income tax purposes approximates identified
cost. The aggregate gross unrealized appreciation is $59,636,800 and the
aggregate gross unrealized depreciation is $1,918,338, resulting in net
unrealized appreciation of $57,718,462.

SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999

<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $489,679,947).............................................................. $547,398,409
Receivable for:
Investments sold.......................................................................... 34,883,355
Shares of beneficial interest sold........................................................ 296,184
Dividends................................................................................. 170,920
Prepaid expenses.............................................................................. 62,280
------------
TOTAL ASSETS............................................................................. 582,811,148
------------
LIABILITIES:
Payable for:
Investments purchased..................................................................... 64,009,155
Plan of distribution fee.................................................................. 384,926
Investment management fee................................................................. 273,311
Shares of beneficial interest repurchased................................................. 177,697
Payable to bank............................................................................... 2,155,523
Accrued expenses.............................................................................. 131,392
------------
TOTAL LIABILITIES........................................................................ 67,132,004
------------
NET ASSETS............................................................................... $515,679,144
============
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................................................... $328,502,832
Net unrealized appreciation................................................................... 57,718,462
Accumulated net investment loss............................................................... (52,319)
Accumulated undistributed net realized gain................................................... 129,510,169
------------
NET ASSETS............................................................................... $515,679,144
============
CLASS A SHARES:
Net Assets.................................................................................... $5,211,668
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 308,163
NET ASSET VALUE PER SHARE................................................................ $16.91
============
MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 5.54% OF NET ASSET VALUE)........................................ $17.85
============
CLASS B SHARES:
Net Assets.................................................................................... $469,991,030
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 28,345,776
NET ASSET VALUE PER SHARE................................................................ $16.58
============
CLASS C SHARES:
Net Assets.................................................................................... $691,618
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 41,557
NET ASSET VALUE PER SHARE................................................................ $16.64
============
CLASS D SHARES:
Net Assets.................................................................................... $39,784,828
Shares Outstanding (UNLIMITED AUTHORIZED, $.01 PAR VALUE)..................................... 2,339,142
NET ASSET VALUE PER SHARE................................................................ $17.01
============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1999

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

INCOME
Dividends (net of $10,426 foreign withholding tax)............................................ $ 2,742,650
Interest...................................................................................... 1,345,393
------------

TOTAL INCOME............................................................................. 4,088,043
------------

EXPENSES
Plan of distribution fee (Class A shares)..................................................... 8,654
Plan of distribution fee (Class B shares)..................................................... 4,801,863
Plan of distribution fee (Class C shares)..................................................... 5,241
Investment management fee..................................................................... 3,390,339
Transfer agent fees and expenses.............................................................. 722,280
Shareholder reports and notices............................................................... 126,239
Custodian fees................................................................................ 80,075
Registration fees............................................................................. 78,564
Professional fees............................................................................. 76,017
Trustees' fees and expenses................................................................... 18,242
Other......................................................................................... 5,580
------------

TOTAL EXPENSES........................................................................... 9,313,094
------------

NET INVESTMENT LOSS...................................................................... (5,225,051)
------------

NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain............................................................................. 152,060,838
Net change in unrealized appreciation......................................................... (15,097,438)
------------

NET GAIN................................................................................. 136,963,400
------------

NET INCREASE.................................................................................. $131,738,349
============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF CHANGES IN NET ASSETS

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

INCREASE (DECREASE) IN NET ASSETS:

OPERATIONS:
Net investment loss..................................................... $ (5,225,051) $ (7,501,513)
Net realized gain....................................................... 152,060,838 41,554,280
Net change in unrealized appreciation................................... (15,097,438) (51,278,029)
------------ ------------

NET INCREASE....................................................... 131,738,349 (17,225,262)
------------ ------------

DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAIN:
Class A shares.......................................................... (401,300) (332,952)
Class B shares.......................................................... (51,411,180) (96,278,872)
Class C shares.......................................................... (98,960) (137,250)
Class D shares.......................................................... (4,282,604) (6,786,251)
------------ ------------

TOTAL DISTRIBUTIONS................................................ (56,194,044) (103,535,325)
------------ ------------
Net increase (decrease) from transactions in shares of beneficial
interest.............................................................. (44,859,929) 44,543,546
------------ ------------

NET INCREASE (DECREASE)............................................ 30,684,376 (76,217,041)
------------ ------------

NET ASSETS:
Beginning of period..................................................... 484,994,768 561,211,809
------------ ------------

END OF PERIOD
(INCLUDING ACCUMULATED NET INVESTMENT LOSSES OF $52,319 AND $50,304,
RESPECTIVELY)....................................................... $515,679,144 $484,994,768
============ ============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999

1. ORGANIZATION AND ACCOUNTING POLICIES

Morgan Stanley Dean Witter Capital Growth 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 long-term capital growth. The Fund was organized as a Massachusetts
business trust on December 8, 1989 and commenced operations on April 2, 1990. 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; and (4) 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.

11
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999, CONTINUED

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.
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.

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: 0.65% to the portion of daily net assets not exceeding $500
million; 0.55% to the portion of daily net assets exceeding $500 million but not
exceeding $1 billion; 0.50% to the portion of daily net assets exceeding $1
billion but not exceeding $1.5 billion; and 0.475% to the portion of daily net
assets exceeding $1.5 billion.

12
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999, CONTINUED

Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, 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 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 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 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

13
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999, CONTINUED

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 $16,225,692 at
October 31, 1999.

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 October 31, 1999, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.20% and
0.67%, respectively.

The Distributor has informed the Fund that for the year ended October 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 $1,368, $208,271 and
$343, respectively and received $2,211 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 October 31, 1999 aggregated
$2,771,742,814 and $2,881,798,189, respectively.

For the year ended October 31, 1999 the Fund incurred $417,839 in brokerage
commissions with DWR for portfolio transactions executed on behalf of the Fund.
At October 31, 1999, the Fund's payable for investments purchased and receivable
for investments sold included unsettled trades with DWR of $5,516,940 and
$3,288,768, respectively.

14
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999, CONTINUED

For the year ended October 31, 1999, the Fund incurred brokerage commissions of
$328,145 with Morgan Stanley & Co., Inc., an affiliate of the Investment Manager
and Distributor, for portfolio transactions executed on behalf of the Fund. At
October 31, 1999, the Fund's receivable for investments sold included unsettled
trades with Morgan Stanley & Co., Inc. of $3,035,657.

Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At October 31, 1999 the Fund had
transfer agent fees and expenses payable of approximately $6,300.

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 October 31, 1999 included
in Trustees fees and expenses in the Statement of Operations amounted to $6,161.
At October 31, 1999, the Fund had an accrued pension liability of $52,319 which
is included in accrued expenses in the Statement of Assets and Liabilities.

5. FEDERAL INCOME TAX STATUS

As of October 31, 1999, the Fund had temporary book/tax differences primarily
attributable to capital loss deferrals on wash sales and permanent book/tax
differences attributable to a net operating loss. To reflect reclassifications
arising from the permanent differences, accumulated undistributed net realized
gain was charged and accumulated net investment loss was credited $5,223,036.

6. ACQUISITION OF DEAN WITTER RETIREMENT SERIES -- CAPITAL GROWTH SERIES

As of the close of business on September 11, 1998, the Fund acquired all the net
assets of Dean Witter Retirement Series -- Capital Growth Series ("Retirement
Capital Growth") pursuant to a plan of reorganization approved by the
shareholders of Retirement Capital Growth on August 19, 1998. The acquisition
was accomplished by a tax-free exchange of 218,480 Class D shares of the Fund at
a net asset value of $13.96 per share for 271,835 shares of Retirement Capital
Growth. The net assets of the Fund and Retirement Capital Growth immediately
before the acquisition were $469,210,059 and $3,049,132, respectively, including
unrealized depreciation of $87,914 for Retirement Capital Growth. Immediately
after the acquisition, the combined net assets of the Fund amounted to
$472,259,191.

15
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999, CONTINUED

7. SHARES OF BENEFICIAL INTEREST

Transactions in shares of beneficial interest were as follows:

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 1999 OCTOBER 31, 1998
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------- ---------- -------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold............................................................. 143,069 $ 2,289,077 223,439 $ 3,613,973
Reinvestment of distributions.................................... 28,595 388,035 23,370 332,008
Redeemed......................................................... (95,316) (1,520,516) (104,811) (1,707,265)
---------- ------------- ---------- -------------
Net increase - Class A........................................... 76,348 1,156,596 141,998 2,238,716
---------- ------------- ---------- -------------
CLASS B SHARES
Sold............................................................. 2,423,634 37,639,071 3,644,613 59,399,825
Reinvestment of distributions.................................... 3,655,137 48,978,844 6,483,260 91,640,518
Redeemed......................................................... (8,138,374) (126,956,990) (7,641,998) (118,765,145)
---------- ------------- ---------- -------------
Net increase (decrease) - Class B................................ (2,059,603) (40,339,075) 2,485,875 32,275,198
---------- ------------- ---------- -------------
CLASS C SHARES
Sold............................................................. 33,309 503,728 63,753 1,053,888
Reinvestment of distributions.................................... 5,482 73,451 6,035 85,400
Redeemed......................................................... (63,569) (976,649) (24,271) (372,811)
---------- ------------- ---------- -------------
Net increase (decrease) - Class C................................ (24,778) (399,470) 45,517 766,477
---------- ------------- ---------- -------------
CLASS D SHARES
Sold............................................................. 1,114,224 17,761,834 774,509 11,951,069
Reinvestment of distributions.................................... 302,202 4,119,023 477,524 6,784,035
Acquisition of Dean Witter Retirement Series - Capital Growth
Series.......................................................... -- -- 218,480 3,049,132
Redeemed......................................................... (1,714,336) (27,158,837) (798,883) (12,521,081)
---------- ------------- ---------- -------------
Net increase (decrease) - Class D................................ (297,910) (5,277,980) 671,630 9,263,155
---------- ------------- ---------- -------------
Net increase (decrease) in Fund.................................. (2,305,943) $ (44,859,929) 3,345,020 $ 44,543,546
========== ============= ========== =============
</TABLE>

16
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
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
OCTOBER 31, 1999 OCTOBER 31, 1998 OCTOBER 31, 1997
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:

Net asset value, beginning of period........................ $14.68 $18.75 $18.10
------ ------ ------

Income (loss) from investment operations:
Net investment loss...................................... (0.04) (0.11) (0.04)
Net realized and unrealized gain (loss).................. 3.98 (0.55) 0.69
------ ------ ------

Total income (loss) from investment operations.............. 3.94 (0.66) 0.65
------ ------ ------

Less distributions from net realized gain................... (1.71) (3.41) --
------ ------ ------

Net asset value, end of period.............................. $16.91 $14.68 $18.75
====== ====== ======

TOTAL RETURN+............................................... 29.74 % (2.84)% 3.59 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 1.06 %(3) 1.09 %(3) 1.12 %(2)

Net investment loss......................................... (0.28)%(3) (0.69)%(3) (0.82)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $5,212 $3,403 $1,684

Portfolio turnover rate..................................... 557 % 230 % 123 %(1)
</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
17
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
FINANCIAL HIGHLIGHTS, CONTINUED

<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 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...................... $ 14.53 $ 18.71 $ 16.98 $ 14.40 $ 11.86
-------- --------- --------- --------- ------------

Income (loss) from investment operations:
Net investment loss.................................... (0.17) (0.23) (0.21) (0.11) (0.06)
Net realized and unrealized gain (loss)................ 3.93 (0.54) 4.68 2.69 2.60
-------- --------- --------- --------- ------------

Total income (loss) from investment operations............ 3.76 (0.77) 4.47 2.58 2.54
-------- --------- --------- --------- ------------

Less distributions from net realized gain................. (1.71) (3.41) (2.74) -- --
-------- --------- --------- --------- ------------

Net asset value, end of period............................ $ 16.58 $ 14.53 $ 18.71 $ 16.98 $ 14.40
======== ========= ========= ========= ============

TOTAL RETURN+............................................. 28.70 % (3.56)% 31.21 % 17.92 % 21.42 %
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................. 1.86 %(1) 1.84 %(1) 1.84 % 1.84 % 1.89 %

Net investment loss....................................... (1.08)%(1) (1.44)%(1) (1.26)% (0.64)% (0.43)%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands................... $469,991 $441,787 $522,276 $506,571 $483,870

Portfolio turnover rate................................... 557 % 230 % 123 % 72 % 33 %
</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 held by certain
employee benefit plans established by Dean Witter Reynolds Inc., have been
designated as Class B shares. Shares held by those employee benefit plans
prior 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
18
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
FINANCIAL HIGHLIGHTS, CONTINUED

Net asset value, beginning of period........................ $14.53 $18.71 $18.10
------ ------ ------

Income (loss) from investment operations:
Net investment loss...................................... (0.12) (0.23) (0.07)
Net realized and unrealized gain (loss).................. 3.94 (0.54) 0.68
------ ------ ------

Total income (loss) from investment operations.............. 3.82 (0.77) 0.61
------ ------ ------

Less distributions from net realized gain................... (1.71) (3.41) --
------ ------ ------

Net asset value, end of period.............................. $16.64 $14.53 $18.71
====== ====== ======

TOTAL RETURN+............................................... 29.17 % (3.56)% 3.37 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 1.53 %(3) 1.84 %(3) 1.85 %(2)

Net investment loss......................................... (0.75)%(3) (1.44)%(3) (1.54)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $692 $964 $389

Portfolio turnover rate..................................... 557 % 230 % 123 %(1)
</TABLE>

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

SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
MORGAN STANLEY DEAN WITTER CAPITAL GROWTH SECURITIES
FINANCIAL HIGHLIGHTS, CONTINUED

Net asset value, beginning of period........................ $14.73 $18.76 $18.10
------ ------ ------

Income (loss) from investment operations:
Net investment loss...................................... (0.01) (0.07) (0.02)
Net realized and unrealized gain (loss).................. 4.00 (0.55) 0.68
------ ------ ------

Total income (loss) from investment operations.............. 3.99 (0.62) 0.66
------ ------ ------

Less distributions from net realized gain................... (1.71) (3.41) --
------ ------ ------

Net asset value, end of period.............................. $17.01 $14.73 $18.76
====== ====== ======

TOTAL RETURN+............................................... 30.00 % (2.59)% 3.65 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 0.86 %(3) 0.84 %(3) 0.82 %(2)

Net investment loss......................................... (0.08)%(3) (0.44)%(3) (0.50)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $39,785 $38,840 $36,863

Portfolio turnover rate..................................... 557 % 230 % 123 %(1)
</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
20
<PAGE>

MORGAN STANLEY DEAN WITTER CAPITAL GROWTH
SECURITIES
REPORT OF INDEPENDENT ACCOUNTANTS

TO THE SHAREHOLDERS AND TRUSTEES
OF MORGAN STANLEY DEAN WITTER CAPITAL GROWTH 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 Morgan Stanley Dean Witter Capital
Growth Securities (the "Fund") at October 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 indicated, 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 October 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
DECEMBER 8, 1999

1999 FEDERAL TAX NOTICE (UNAUDITED)

During the year ended October 31, 1999, the Fund paid to
shareholders $1.71 per share from long-term capital gains.

21
<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

Peter Hermann
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 CAPITAL GROWTH SECURITIES

[GRAPHIC]

ANNUAL REPORT
OCTOBER 31, 1999