WITTER DEAN EUROPEAN GROWTH FUND INC, N-30D, 1994-12-29

WITTER DEAN EUROPEAN GROWTH FUND INC
N-30D, 1994-12-29

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<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
Two World Trade Center
New York, New York 10048

DEAR SHAREHOLDER:
- --------------------------------------------------------------------------------

The fiscal year started with the continuing rally in European equities that
had characterized the whole of 1993 -- share prices advanced on expectations of
improvement rather than reported improvement and most European sectors
participated, with cyclical stocks leading the way. With increasing evidence of
an imminent end to the Europe-wide recession, European equity markets rose
strongly propelled by the prospects of earnings recovery in 1994 following
several years of declining profitability and slow growth.

Following a strong start in January, the European equity markets were
undermined throughout the first ten months of 1994 by very weak bond markets
across the region. Periodic rallies in the equity markets were reversed by
rising interest rates and falling bond prices. The rise in yields, directly
attributable to the turmoil in U.S. bonds, became a serious negative influence.
What had appeared to be a temporary reaction to an essentially U.S. problem came
to dominate sentiment toward European equities as well as bonds. By the end of
the reporting period many interlinked assumptions held at the
start of 1994 -- a further easing of
monetary policy, dollar appreciation
versus the Deutschemark, and lower
European bond yields -- had effectively
been demolished as a result.

Developments at the company level in
1994, on the other hand, were more
positive. An increasing number of
companies were reporting improving
earnings and stronger profitability due
to the extensive rationalization and
cost cutting that had been carried out
during the recession. Companies with
operational leverage to the economic
recovery performed strongly as did
cyclical stocks whose earnings reports
surprised the markets positively. Just
as most analysts had not forecast the
severity of the earnings collapse in the
recession, most also did not accurately
forecast the sharpness of the rebound.

At the country level, Italy was very
strong early in 1994, ahead of the
election of Silvio Berlusconi and his
reformist coalition; however, the
honeymoon period for Italy's financial
markets proved to be brief. The Nordic
markets also performed well as the
period advanced, primarily due the
stronger and earlier cyclical recovery
in their economies. It should be noted
that in all cases, local currency
returns were considerably worse than the
US dollar returns, which were boosted by
the weakness of the dollar throughout
1994.

Against this backdrop, Dean Witter
European Growth Fund provided a total
return of 15.61 percent for the 12-month
period ended October 31, 1994 (not
<PAGE>
reflecting a deduction for the applicable declining deferred sales charge
applied to redemptions). For the same period, the Morgan Stanley Capital
International (MSCI) World Index and the Standard & Poor's 500 Composite Stock
Price Index (S&P 500) returned 5.90 percent and 3.85 percent, respectively. The
accompanying chart illustrates the growth of a $10,000 investment in the Fund
since inception (May 31, 1990) through October 31, 1994, versus similar
investments in the companies that comprise the S&P 500 and the MSCI World Index.

As of October 31, 1994, the Fund's net assets exceeded $758 million and were
fully invested in a broad range of stocks with solid growth characteristics. At
the end of the fiscal year, approximately 36.2 percent of the Fund's assets were
held in a broad range of U.K. securities, with 10.2 percent held in Germany and
9.6 percent in Sweden.

The prospects for a continuation of the economic recovery in Europe are
good. Many countries, such as France, Germany and Sweden, have had an export-led
recovery to date. The balance of their economies should shift to investment and
to a consumer recovery during 1995 and 1996. We do not see inflation posing
serious threats but interest rates will likely rise as preemptive monetary
tightening takes place across the continent.

The outlook for corporate earnings remains positive and we do not envisage
an earnings peak until well into 1997 in most countries. Such a clear prospect
of rising earnings has not been present in Europe since the late 1980s. It
should also be borne in mind that reported earnings are now an area of greater
focus for companies' management than ever before. More companies have raised
capital internationally and therefore now understand the requirements of
international investors. There has been a refocussing on profitability as a
result of the recession and more evidence from more companies of a commitment to
shareholder value.

Valuation levels on current earnings are in the mid to upper region of their
historic ranges, but on peak earnings, which will be achieved in 1997 in most
countries, valuations look attractive. It is our confidence in the strength of
this earnings recovery that underlies our positive outlook despite the evident
risks from rising interest rates and the potential negative impact on equity
markets. As always, stock selection will be critical to good performance and
will be given the highest emphasis in our investment approach.

We appreciate your support of the Dean Witter European Growth Fund Inc. and
look forward to continuing to meet your investment needs and objectives.

Very truly yours,
Charles A. Fiumefreddo
CHAIRMAN OF THE BOARD
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS, WARRANTS AND RIGHTS
(97.4%)
AUSTRIA (2.6%)
BANKING
75,000 Oester Elex (A Shares).............. $ 4,690,806
---------------
BUILDING & CONSTRUCTION
60,000 Va Technologie AG................... 6,156,595
---------------
OIL & GAS
95,000 OMV AG*............................. 8,648,954
---------------
TOTAL AUSTRIA....................... 19,496,355
---------------

BELGIUM (2.0%)
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
26,100 Colruyt SA.......................... 5,970,753
342,920 Quilmes............................. 9,001,650
---------------
TOTAL BELGIUM....................... 14,972,403
---------------
FINLAND (3.3%)
ELECTRONICS
96,500 Nokia AB............................ 14,446,233
70,500 Nokia AB (Pref.).................... 10,584,442
---------------
TOTAL FINLAND....................... 25,030,675
---------------
FRANCE (9.5%)
AUTOMOBILES
50,000 Psa Peugeot Citroen*................ 7,455,038
---------------
BANKING
35,000 Societe Generale Paris.............. 3,932,508
---------------
BUILDING MATERIALS
40,300 CIE Saint Gobain.................... 5,089,132
---------------
ELECTRICAL EQUIPMENT
20,000 Alcatel Cable....................... 2,320,634
---------------
FINANCIAL SERVICES
117,335 Credit Local de France.............. 8,942,511
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
55,450 LVMH Moet Hennessey Louis........... 8,900,309
---------------
INSURANCE
222,209 Scor SA............................. 4,855,852
66,890 Ste Cen Group Assur Nat............. 3,693,114
---------------
8,548,966
---------------
MERCHANDISING
6,100 Agache (Societe Financiere)......... 1,578,379
---------------
MULTI - INDUSTRY
6,125 Au Bon Marche....................... 1,044,721
---------------
OIL & RELATED
97,101 Societe National Elf-Aquitaine...... 7,145,026
---------------

<CAPTION>
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
RETAIL
9,000 Carrefour Supermarche............... $ 3,950,880
23,000 Castorama Dubois Invest............. 3,335,912
---------------
7,286,792
---------------
TEXTILES
32,666 Christian Dior...................... 2,444,738
4,666 Christian Dior (Warrants due
6/30/98)*......................... 41,327
59,452 Hermes International................ 7,013,290
---------------
9,499,355
---------------
TOTAL FRANCE........................ 71,743,371
---------------

GERMANY (10.2%)
AUTOMOTIVE
10,727 Bayerische Motoren Werke............ 5,504,121
---------------
BANKING
18,205 Dt. Pfandbrief U. Hypothekenbank.... 8,437,169
---------------
BUILDING & CONSTRUCTION
2,024 Baywa-Bayerische Waren-Liq.......... 556,118
---------------
BUSINESS SERVICES
27,750 Sap AG (Pref.)...................... 15,965,804
---------------
CHEMICALS
27,750 Basf AG............................. 5,848,004
15,000 Henkel Kgaa-Vorzug (Pref.).......... 5,859,375
---------------
11,707,379
---------------
ELECTRIC UTILITIES
29,000 Veba AG............................. 9,676,907
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
19,408 Holsten Brauerei AG................. 4,497,352
---------------
HEALTH & PERSONAL CARE
5,000 Rhoen Klinikum...................... 4,462,394
2,883 Rhoen Klinikum (Pref.).............. 1,908,766
---------------
6,371,160
---------------
MANUFACTURING
11,600 KSB AG-Vorzug....................... 2,726,430
---------------
PHARMACEUTICALS
11,740 Gehe AG............................. 3,995,207
---------------
RETAIL
14,813 Hornbach Baumarkt Holdings.......... 7,992,979
---------------
TOTAL GERMANY....................... 77,430,626
---------------

ITALY (3.1%)
ELECTRICAL EQUIPMENT
1,860,000 Ansaldo Trans....................... 8,084,810
---------------
MANUFACTURING
150,000 Fila Holdings SPA (ADR)............. 2,437,500
---------------
</TABLE>
<PAGE>

NORWAY (2.9%)
BANKING
322,390 Sparebanken More.................... 6,086,998
---------------
BUILDING & CONSTRUCTION
150,000 Rieber & Son (Class A).............. 3,129,045
100,000 Rieber & Son (Class B).............. 1,994,670
---------------
5,123,715
---------------
BUSINESS SERVICES
200,000 Sysdeco Group AS*................... 1,370,384
---------------
OIL & RELATED
467,000 Smedvig Tankships*.................. 3,626,494
---------------
TRANSPORTATION
418,750 Helikopter Service.................. 5,196,517
35,000 Storli AS (B Shares)................ 543,587
---------------
5,740,104
---------------
TOTAL NORWAY........................ 21,947,695
---------------

SPAIN (3.1%)
BUILDING & CONSTRUCTION
25,500 Fomento de Constructiones y
Contratas SA...................... 2,526,661
---------------
<CAPTION>
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
ENGINEERING & CONSTRUCTION
600,000 Uralita SA*......................... $ 6,255,472
---------------
OIL & RELATED
83,750 Gas Natural SDG..................... 7,005,273
---------------
TELECOMMUNICATIONS
600,000 Telefonica de Espana................ 8,046,160
---------------
TOTAL SPAIN......................... 23,833,566
---------------

SWEDEN (9.6%)
AEROSPACE & DEFENSE
211,550 Securitas (B Shares)................ 5,864,497
---------------
AUTOMOBILES
340,000 Volvo AB (Series B Free)............ 6,691,986
---------------
AUTOMOTIVE
140,000 Autoliv AB.......................... 4,773,653
---------------
FOREST PRODUCTS, PAPER & PACKAGING
200,000 Mo Och Domsjoe*..................... 9,037,230
---------------
HEALTH & PERSONAL CARE
281,830 Astra AB (A Shares)................. 7,597,917
---------------
HOUSEHOLD FURNISHINGS & APPLIANCES
160,000 Electrolux (Series B Free).......... 8,272,115
---------------
INTERNATIONAL TRADE
251,700 Kinnevik Industriforvatnings (B
Shares)........................... 8,338,134
---------------
METALS & MINING
318,000 Atlas Copco AB (Series B Free)...... 4,297,536
282,000 Atlas Copco AB (Series A Free)...... 3,830,566
200,000 Ssab Svenskt Stal AB (Series A
Free)............................. 9,369,889
---------------
17,497,991
---------------
RETAIL
92,000 Hennes & Mauritz.................... 5,062,512
---------------
TOTAL SWEDEN........................ 73,136,035
---------------

SWITZERLAND (7.5%)
BANKING
45,000 Safra Republic Holdings SA.......... 3,572,846
---------------
BUSINESS SERVICES
4,780 Soc Gen Surveillance................ 6,907,185
---------------
CEMENT
13,750 Holderbank Financiere Glarus AG (B
Shares)........................... 10,578,603
---------------
ELECTRICAL EQUIPMENT
10,550 Swisslog Holdings AG................ 2,940,095
---------------
FINANCIAL SERVICES
700 SBSI Holding SA (Bearer)............ 855,895
---------------
INDUSTRIALS
14,000 Hilti AG PTG Certs.................. 10,670,901
---------------
</TABLE>
<PAGE>

DEAN WITTER EUROPEAN GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1994 (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
LEISURE
92 Reiseburo Kuoni (Bearer)............ $ 2,629,615
895 Reiseburo Kuoni..................... 1,200,913
---------------
3,830,528
---------------
MACHINERY
5,800 Danzas Holding AG................... 7,068,678
6,230 Schinder Holdings................... 6,924,970
---------------
13,993,648
---------------
PHARMACEUTICALS
820 Roche Holdings AG................... 3,636,125
---------------
TOTAL SWITZERLAND................... 56,985,826
---------------
UNITED KINGDOM (36.2%)
AEROSPACE & DEFENSE
515,000 British Aerospace................... 3,720,198
658,000 Smiths Industries, PLC.............. 4,763,866
---------------
8,484,064
---------------
BANKING
850,000 Abbey National, PLC................. 5,726,191
1,335,000 TSB Group, PLC...................... 4,875,987
---------------
10,602,178
---------------
BUILDING & CONSTRUCTION
1,200,000 Blue Circle Industries, PLC......... 5,493,247
1,605,200 John Mowlem & Co., PLC.............. 2,657,836
1,366,200 Williams Holdings, PLC.............. 7,606,891
---------------
15,757,974
---------------
BUSINESS SERVICES
648,000 Reuters Holdings, PLC............... 5,007,036
---------------
CONGLOMERATES
2,496,857 BTR, PLC............................ 12,402,633
1,800,000 Harrison & Crosfield................ 4,733,543
---------------
17,136,176
---------------
CONSTRUCTION PLANT & EQUIPMENT
1,320,000 CRH, PLC............................ 7,285,370
---------------
ELECTRIC UTILITIES
475,000 Powergen, PLC....................... 4,364,242
985,000 Scottish Power, PLC................. 5,724,243
---------------
10,088,485
---------------
FOOD, BEVERAGE, TOBACCO & HOUSEHOLD PRODUCTS
663,461 Allied Lyons, PLC................... 6,418,898
1,115,000 Argyll Group, PLC................... 4,724,048
711,153 BAT Industries, PLC................. 5,056,336
680,000 Dalgety, PLC........................ 4,724,452
780,000 Grand Metropolitan, PLC............. 5,254,622
1,405,100 Rothmans International (Units)+..... 9,465,730
820,000 Tate & Lyle, PLC.................... 5,643,888
---------------
41,287,974
---------------
FOREST PRODUCTS, PAPER & PACKAGING
300,000 De La Rue Co........................ 4,748,153
---------------
<CAPTION>
SHARES VALUE
- ----------- ---------------
<C> <S> <C>
HEALTH & PERSONAL CARE
1,129,000 Glaxo Holdings...................... $ 10,941,253
1,470,300 Smithkline Beecham.................. 8,878,665
---------------
19,819,918
---------------
INSURANCE
460,000 Britannic Assurance, PLC............ 3,061,544
561,884 Commercial Union Assurance Co.,
PLC............................... 4,952,738
1,209,800 Prudential Corp., PLC............... 6,205,824
535,000 Refuge Group........................ 2,362,226
1,121,666 Royal Insurance, PLC................ 5,280,321
---------------
21,862,653
---------------
LEISURE
960,000 Granada Group, PLC.................. 8,072,346
---------------
METALS & MINING
563,500 English China Clays................. 3,293,026
---------------
OIL & RELATED
2,680,000 British Petroleum Co., PLC.......... 18,880,927
1,917,000 Lasmo, PLC.......................... 4,636,680
---------------
23,517,607
---------------
PHARMACEUTICALS
630,000 Reckitt & Colman, PLC............... 5,962,219
78,750 Reckitt & Colman, PLC (Rights)*..... 419,298
---------------
6,381,517
---------------
PUBLISHING
325,000 Daily Mail & General................ 5,091,075
625,000 Pearson, PLC........................ 6,391,744
---------------
11,482,819
---------------
REAL ESTATE
726,900 Hammerson Prop. Inv. & Dev., PLC.... 3,964,722
600,000 MEPC, PLC........................... 4,090,716
---------------
8,055,438
---------------
RETAIL STORES
668,000 Great Universal Stores.............. 6,072,441
985,000 Kingfisher, PLC..................... 7,515,067
2,211,000 Morrison Supermarkets............... 4,737,634
1,525,000 Next, PLC........................... 6,040,299
---------------
24,365,441
---------------
TELECOMMUNICATIONS
2,260,000 British Telecomm, PLC............... 14,417,826
---------------
TRANSPORTATION
1,129,300 British Airways, PLC................ 6,434,506
---------------
UTILITIES
700,000 Anglican Water, PLC................. 6,192,891
---------------
TOTAL UNITED KINGDOM................ 274,293,398
---------------
TOTAL COMMON AND PREFERRED STOCKS,
WARRANTS AND RIGHTS (IDENTIFIED
COST $656,367,473)................ 739,028,003
---------------
</TABLE>

<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1994 (CONTINUED)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(IN
THOUSANDS) VALUE
- ------------- ---------------
<C> <S> <C>
COMMERCIAL PAPER (A) (2.0%)
AUTOMOTIVE FINANCE
US$ 15,000 Ford Motor Credit Company 4.7%
due 11/1/94 (Amortized Cost
$15,000,000)................... $ 15,000,000

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

TOTAL INVESTMENTS (IDENTIFIED
COST $671,367,473)(B).......... 99.4% 754,028,003
CASH AND OTHER ASSETS IN EXCESS
OF LIABILITIES................. 0.6 4,473,822
---------- -------------

NET ASSETS....................... 100.0% $ 758,501,825
---------- -------------
---------- -------------
<FN>
- ------------------
ADR AMERICAN DEPOSITORY RECEIPTS.
* NON-INCOME PRODUCING SECURITY.
+ CONSISTS OF MORE THAN ONE CLASS OF SECURITIES TRADED TOGETHER AS A UNIT;
GENERALLY BONDS WITH ATTACHED STOCKS/WARRANTS.
(A) COMMERCIAL PAPER WAS PURCHASED ON A DISCOUNT BASIS. THE RATE SHOWN HAS
BEEN ADJUSTED TO REFLECT A BOND EQUIVALENT YIELD.
(B) THE AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS $671,620,773; THE
AGGREGATE GROSS UNREALIZED APPRECIATION IS $101,193,872 AND THE AGGREGATE
GROSS UNREALIZED DEPRECIATION IS $18,786,642, RESULTING IN NET UNREALIZED
APPRECIATION OF $82,407,230.
</TABLE>

FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT OCTOBER 31, 1994:

<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS IN EXCHANGE DELIVERY APPRECIATION/
TO RECEIVE FOR DATE (DEPRECIATION)
- -------------- -------------- --------- -------------
<S> <C> <C> <C>
DEM 2,608,000 US$ 1,733,716 11/ 2/94 $ (6,543)
US$ 230,130 FRF 1,178,957 11/ 2/94 2,136
US$ 254,691 FRF 1,317,387 11/ 3/94 (74)
US$ 543,863 FRF 2,790,180 11/30/94 4,280
US$ 333,872 FRF 1,711,094 11/30/94 2,970
-------------
Net Unrealized
Appreciation ............ $ 2,769
-------------
-------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
SUMMARY OF INVESTMENTS BY INDUSTRY CLASSIFICATION OCTOBER 31, 1994
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- -------------------------------------------------- ------------ -----------
<S> <C> <C>
Aerospace & Defense............................... $ 14,348,561 1.9%
Automobiles....................................... 14,147,024 1.9
Automotive Finance................................ 15,000,000 2.0
Automotive........................................ 10,277,774 1.4
Banking........................................... 40,550,304 5.3
Building & Construction........................... 30,121,063 4.0
Building Materials................................ 5,089,132 0.7
Business Services................................. 39,098,463 5.2
Cement............................................ 10,578,603 1.4
Chemicals......................................... 11,707,379 1.5
Conglomerates..................................... 17,136,176 2.3
Construction Plant & Equipment.................... 7,285,370 1.0
Electronics....................................... 25,030,675 3.3
Electric Utilities................................ 19,765,392 2.6
Electrical Equipment.............................. 13,345,539 1.8
Engineering & Construction........................ 6,255,472 0.8
Financial Services................................ 9,798,406 1.3
Food, Beverage, Tobacco & Household Products...... 69,658,038 9.2
Forest Products, Paper & Packaging................ 13,785,383 1.8
Health & Personal Care............................ 33,788,995 4.5
Household Furnishings & Appliances................ 8,272,115 1.1
Industrials....................................... 10,670,901 1.4
Insurance......................................... 33,946,507 4.4
International Trade............................... 8,338,134 1.1
Leisure........................................... 11,902,874 1.6
Machinery......................................... 13,993,648 1.8
Machinery Diversified............................. 3,844,473 0.5
Manufacturing..................................... 5,163,930 0.7
Merchandising..................................... 1,578,379 0.2
Metal & Mining.................................... 24,330,271 3.1
Multi-Industry.................................... 9,292,684 1.2
Oil & Gas......................................... 8,648,954 1.1
Oil & Related..................................... 41,294,400 5.4
Pharmaceuticals................................... 14,012,849 1.8
Publishing........................................ 35,625,828 4.7
Real Estate....................................... 8,055,438 1.1
Retail............................................ 20,342,283 2.7
Retail Stores..................................... 24,365,441 3.2
Telecommunications................................ 35,714,289 4.7
Textiles.......................................... 9,499,355 1.3
Transportation.................................... 12,174,610 1.6
Utilities......................................... 6,192,891 0.8
------------ ---
$754,028,003 99.4%
------------ ---
------------ ---
</TABLE>

SUMMARY OF INVESTMENTS BY TYPE OCTOBER 31, 1994
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
TYPE OF INVESTMENT
- --------------------------------------------------
<S> <C> <C>
Commercial Paper.................................. $ 15,000,000 2.0%
Common Stocks..................................... 704,248,991 92.8
Preferred Stocks.................................. 34,318,387 4.5
Rights............................................ 419,298 0.1
Warrants.......................................... 41,327 0.0
------------ ---
$754,028,003 99.4%
------------ ---
------------ ---
</TABLE>
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1994
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $671,367,473) (Note
1)...................................... $ 754,028,003
Unrealized appreciation on foreign
currency contracts...................... 9,386
Cash (including $800,000 in foreign
currency)............................... 1,138,484
Receivable for:
Investments sold........................ 2,569,060
Capital stock sold...................... 2,471,457
Dividends............................... 1,615,865
Foreign withholding tax reclaimed....... 1,330,066
Interest................................ 20,460
Deferred organizational expenses (Note
1)...................................... 17,416
Prepaid expenses and other assets......... 36,346
-------------
TOTAL ASSETS...................... 763,236,543
-------------
LIABILITIES:
Unrealized depreciation on foreign
currency contracts...................... 6,617
Payable for:
Investments purchased................... 1,961,654
Capital stock repurchased............... 801,820
Investment management fees (Note 2)..... 616,653
Plan of distribution fee (Note 3)....... 596,671
Accrued expenses and other payables (Note
4)...................................... 751,303
-------------
TOTAL LIABILITIES................. 4,734,718
-------------
NET ASSETS:
Paid-in-capital........................... 615,900,691
Net unrealized appreciation............... 82,796,795
Accumulated net investment loss........... (302,165)
Accumulated undistributed net realized
gains................................... 60,106,504
-------------
NET ASSETS........................ $ 758,501,825
-------------
-------------
NET ASSET VALUE PER SHARE, 56,224,657
shares outstanding (200,000,000 shares
authorized of $.01 par value)...........
$13.49
-------------
-------------
</TABLE>

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1994

<TABLE>
<S> <C>
INVESTMENT INCOME:
INCOME
Dividends (net of $1,900,894 foreign
withholding tax)..................... $ 14,358,254
Interest (net of $67,819 foreign
withholding tax)..................... 1,300,528
------------
TOTAL INCOME....................... 15,658,782
------------
EXPENSES
Investment management fees (Note 2).... 6,274,989
Plan of distribution fee (Note 3)...... 6,035,318
Transfer agent fees and expenses....... 1,103,554
Custodian fees......................... 575,133
Registration fees...................... 145,673
Shareholder reports and notices........ 96,789
Professional fees...................... 57,339
Organizational expenses (Note 1)....... 29,985
Directors' fees and expenses (Note
4)................................... 27,010
Other.................................. 7,152
------------
TOTAL EXPENSES..................... 14,352,942
------------
NET INVESTMENT INCOME............ 1,305,840
------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
(Note 1):
Net realized gain (loss) on:
Investments.......................... 68,463,482
Foreign exchange transactions........ (6,983,497)
------------
61,479,985
------------
Net change in unrealized appreciation
(depreciation) on:
Investments.......................... 27,150,630
Translation of other assets and
liabilities denominated in foreign
currencies......................... (12,320)
------------
27,138,310
------------
NET GAIN........................... 88,618,295
------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS...... $ 89,924,135
------------
------------
</TABLE>

STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 1994 OCTOBER 31, 1993
----------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss)............................................ $ 1,305,840 $ (305,766)
Net realized gain....................................................... 61,479,985 33,990,114
Net change in unrealized appreciation................................... 27,138,310 76,682,042
----------------- -----------------
Net increase in net assets resulting from operations................ 89,924,135 110,366,390
----------------- -----------------
Distributions to shareholders from net realized gain...................... (9,695,849) -0-
----------------- -----------------
Net increase from capital stock transactions (Note 5)..................... 219,072,953 52,286,155
----------------- -----------------
Total increase...................................................... 299,301,239 162,652,545
NET ASSETS:
Beginning of period....................................................... 459,200,586 296,548,041
----------------- -----------------
END OF PERIOD (including accumulated net investment loss of $302,165 and
$7,088,050, respectively)................................................ $ 758,501,825 $ 459,200,586
----------------- -----------------
----------------- -----------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

1. ORGANIZATION AND ACCOUNTING POLICIES -- Dean Witter European Growth Fund Inc.
(the "Fund") is registered under the Investment Company Act of 1940, as amended
(the "Act"), as a diversified, open-end management investment company. The Fund
was incorporated in Maryland on February 13, 1990 and commenced operations on
May 31, 1990.

The following is a summary of significant accounting policies:

A. VALUATION OF INVESTMENTS -- (1) an equity security listed or traded on
the New York or American Stock Exchange or other domestic or foreign stock
exchanges 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 by the Directors); (2) listed options are valued at
the latest sale price on the exchange on which they are listed unless no
sales of such options have taken place that day, in which case they will be
valued at the mean between their latest bid and asked price.
Over-the-counter options are valued under fair value procedures established
by and under the general supervision of the Directors; (3) 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; (4) when market quotations are not readily available,
including circumstances under which it is determined by 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 Directors (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); and (5) short-term debt
securities having a maturity date of more than sixty days at the 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 except for certain dividends from foreign securities which
are recorded as soon as the Fund is informed after the ex-dividend date.
Interest income is accrued daily and includes amortization of discounts of
certain short-term securities.

C. OPTION ACCOUNTING PRINCIPLES -- When the Fund writes a call option, an
amount equal to the premium received is included in the Fund's Statement of
Assets and Liabilities as a liability which is subsequently marked-to-market
to reflect the current market value of the option written. If a written
option either expires or the Fund enters into a closing purchase
transaction, the Fund realizes a capital gain or loss without regard to any
unrealized gain or loss on the underlying security or currency and the
liability related to such option is extinguished. If a written call option
is exercised, the Fund realizes a capital gain or loss from the sale of the
underlying security or currency and the proceeds from such sale are
increased by the premium originally received.

When the Fund purchases a call or put option, the premium paid is
recorded as an investment and is subsequently marked-to-market to reflect
the current market value. If a purchased
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
option expires, the Fund will realize a loss to the extent of the premium
paid. If the Fund enters into a closing sale transaction, a gain or loss is
realized for the difference between the proceeds from the sale and the cost
of the option. If a put option is exercised, the cost of the security or
currency sold upon exercise will be increased by the premium originally
paid. If a call option is exercised, the cost of the security purchased upon
exercise will be increased by the premium originally paid.

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

E. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- The Fund may enter into
forward foreign currency exchange contracts as a hedge against fluctuations
in foreign exchange rates. Forward contracts are valued daily at the
appropriate exchange rates. The resultant exchange gains and losses are
included in the Statement of Operations as unrealized gain/loss on foreign
exchange transactions. The Fund records realized gains or losses on delivery
of the currency or at the time the forward contract is extinguished
(compensated) by entering into a closing transaction prior to delivery.

F. FEDERAL INCOME TAX STATUS -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income tax provision is required.

G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Fund records
dividends and distributions to its shareholders on the ex-dividend 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.

H. ORGANIZATIONAL EXPENSES -- Dean Witter InterCapital Inc. (the
"Investment Manager") paid the organizational expenses of the Fund in the
amount of approximately $150,000 which have
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
been reimbursed by the Fund for the full amount thereof. Such expenses have
been deferred and are being amortized by the Fund on the straight line
method over a period not to exceed five years from the commencement of
operations.

2. INVESTMENT MANAGEMENT AND SUB-ADVISORY AGREEMENTS -- Pursuant to an
Investment Management Agreement, the Fund pays its Investment Manager a
management fee, accrued daily and payable monthly, by applying the annual rate
of 1.0% to the daily net assets of the Fund determined as of the close of each
business day. Effective May 1, 1994, the Agreement was amended to reduce the
annual fee to 0.95% of the portion of daily net assets in excess of $500
million.

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.

Under a Sub-Advisory Agreement between Morgan Grenfell Investment Services
Limited (the "Sub-Advisor") and the Investment Manager, the Sub-Advisor provides
the Fund with investment advice and portfolio management relating to the Fund's
investments in securities, subject to the overall supervision of the Investment
Manager. As compensation for its services provided pursuant to the Sub-Advisory
Agreement, the Investment Manager pays the Sub-Advisor monthly compensation
equal to 40% of its monthly compensation.

3. PLAN OF DISTRIBUTION -- Shares of the Fund are distributed by Dean Witter
Distributors Inc. (the "Distributor"), an affiliate of the Investment Manager.
The Fund has adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1
under the Act pursuant to which the Fund pays the Distributor compensation,
accrued daily and payable monthly, at an annual rate of 1.0% of the lesser of:
(a) the average daily aggregate gross sales of the Fund's shares since the
inception of the Fund (not including reinvestment of dividends or capital gain
distributions) less the average daily aggregate net asset value of the Fund's
shares redeemed since the Fund's inception upon which a contingent deferred
sales charge has been imposed or upon which such charge has been waived; or (b)
the Fund's average daily net assets. Amounts paid under the Plan are paid to the
Distributor to compensate it for the services provided and the expenses borne by
it and others in the distribution of the Fund's shares, including the payment of
commissions for sales of the Fund's shares and incentive compensation to and
expenses of the account executives of Dean Witter Reynolds Inc., an affiliate of
the Investment Manager and Distributor, and other employees or selected dealers
who engage in or support distribution of the Fund's shares or who service
shareholder accounts, including overhead and telephone expenses, printing and
distribution of prospectuses and reports used in connection with the offering of
the Fund's shares to other than current shareholders and preparation and
printing and distribution of sales literature and advertising materials. In
addition, the Distributor may be compensated under the Plan for its opportunity
costs in advancing such amounts, which compensation would be in the form of a
carrying charge on any unreimbursed expenses incurred by the Distributor.
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------

Provided that the Plan continues in effect, any cumulative expenses incurred
but not yet recovered, may be recovered through future distribution fees from
the Fund and contingent deferred sales charges from the Fund's shareholders.

The Distributor has informed the Fund that for the year ended October 31,
1994, it received approximately $883,000 in contingent deferred sales charges
from certain redemptions of the Fund's shares. The Fund's shareholders pay such
charges which are not an expense of the Fund.

4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES -- The cost of
purchases and the proceeds from sales of portfolio securities, excluding
short-term investments, for the year ended October 31, 1994 were as follows:

<TABLE>
<CAPTION>
PURCHASES SALES
---------------- ----------------
<S> <C> <C>
Common and Preferred Stocks, Warrants and Rights........................... $ 646,930,226 $ 434,008,943
Currency Put Options....................................................... 15,600,450 19,314,150
</TABLE>

Dean Witter Trust Company, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At October 31, 1994, the Fund had
transfer agent fees and expenses payable of approximately $197,000.

On April 1, 1991, the Fund established an unfunded noncontributory defined
benefit pension plan covering all independent Directors of the Fund who will
have served as independent Directors 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, 1994, included in Directors' fees and expenses in the
Statement of Operations, amounted to $8,840. At October 31, 1994, the Fund had
an accrued pension liability of $45,909, which is included in accrued expenses
in the Statement of Assets and Liabilities.

5. CAPITAL STOCK -- Transactions in capital stock were as follows:

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 1994 OCTOBER 31, 1993
-------------------------------- -------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- ---------------- ------------- ----------------
<S> <C> <C> <C> <C>
Sold........................................ 29,930,054 $ 375,870,856 13,094,625 $ 138,741,550
Reinvestment of distributions............... 746,489 9,137,027 -- --
-------------- ---------------- ------------- ----------------
30,676,543 385,007,883 13,094,625 138,741,550
Repurchased................................. (13,166,728) (165,934,930) (8,986,819) (86,455,395)
-------------- ---------------- ------------- ----------------
Net increase................................ 17,509,815 $ 219,072,953 4,107,806 $ 52,286,155
-------------- ---------------- ------------- ----------------
-------------- ---------------- ------------- ----------------
</TABLE>

6. FEDERAL INCOME TAX STATUS -- During the year ended October 31,1994, the Fund
utilized its net capital loss carryover of approximately $207,000. As of October
31, 1994, the Fund had temporary book/tax differences primarily attributable to
the mark-to-market of a passive foreign investment company ("PFIC") and
permanent book/tax differences primarily attributable to foreign currency gains,
dividend redesignations, net operating losses and tax adjustments on PFICs sold
by the Fund. To reflect cumulative reclassifications arising from permanent
book/tax differences as of October 31, 1993, paid-in-capital was charged
$3,363,184 accumulated undistributed net realized gains was
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
charged $3,698,638, and accumulated net investment loss was credited $7,061,822.
To reflect reclassifications arising from permanent book/tax differences for the
year ended October 31, 1994, accumulated net investment loss was charged and
accumulated undistributed net realized gains was credited $8,696,055.

7. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK -- As of October 31, 1994,
the Fund had outstanding forward foreign currency exchange contracts ("forward
contracts") as a hedge against changes in foreign exchange rates. Forward
contracts involve elements of market risk in excess of the amount reflected in
the Statement of Assets and Liabilities. The Fund bears the risk of an
unfavorable change in the foreign exchange rates underlying the forward
contracts. Risks may also arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data and ratios for a share of capital stock outstanding throughout
each period:

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR ENDED OCTOBER 31, MAY 31, 1990*
------------------------------------------------------ THROUGH
1994 1993 1992 1991 OCTOBER 31, 1990
--------- --------- --------- --------- ---------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period......... $11.86 $8.57 $9.22 $9.23 $10.00
--------- --------- --------- --------- ----------
Net investment income (loss)................. 0.02 (0.01) 0.01 0.05 0.05
Net realized and unrealized gain (loss) on
investments................................ 1.84 3.30 (0.23) 0.07 (0.82)
--------- --------- --------- --------- ----------
Total from investment operations............. 1.86 3.29 (0.22) 0.12 (0.77)
--------- --------- --------- --------- ----------
Less dividends and distributions from:
Net investment income...................... -- -- (0.03) (0.07) --
Net realized capital gains................. (0.23) -- (0.40) (0.06) --
--------- --------- --------- --------- ----------
Total dividends and distributions............ (0.23) -- (0.43) (0.13) --
--------- --------- --------- --------- ----------
Net asset value, end of period............... $13.49 $11.86 $8.57 $9.22 $9.23
--------- --------- --------- --------- ----------
--------- --------- --------- --------- ----------
TOTAL INVESTMENT RETURN +.................... 15.61% 38.74% (2.39)% 1.33% (7.70)%(1)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in thousands)..... $758,502 $459,201 $296,548 $315,944 $303,872
Ratios to average net assets:
Expenses................................... 2.27% 2.38% 2.40% 2.44% 2.45%(2)
Net investment income (loss)............... 0.21% (0.09)% 0.11% 0.51% 1.52%(2)
Portfolio turnover rate...................... 72% 120% 116% 111% 36%(1)
<FN>
- ------------------
* COMMENCEMENT OF OPERATIONS.
+ DOES NOT REFLECT THE DEDUCTION OF SALES LOAD.
(1) NOT ANNUALIZED.
(2) ANNUALIZED.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
<PAGE>
DEAN WITTER EUROPEAN GROWTH FUND INC.
REPORT OF INDEPENDENT ACCOUNTANTS
- --------------------------------------------------------------------------------

To the Shareholders and Board of Directors of Dean Witter European Growth Fund
Inc.

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 European Growth Fund
Inc. (the "Fund") at October 31, 1994, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the four years in the
period then ended and for the period May 31, 1990 (commencement of operations)
through October 31, 1990, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities owned at October 31, 1994 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable basis
for the opinion expressed above.

PRICE WATERHOUSE LLP
New York, New York
December 13, 1994
<PAGE>

BOARD OF DIRECTORS

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

OFFICERS

Charles A. Fiumefreddo
Chairman and Chief Executive Officer

Sheldon Curtis
Vice President, Secretary and General Counsel

Thomas H. Connelly
Vice President

Thomas F. Caloia
Treasurer

TRANSFER AGENT

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

INDEPENDENT ACCOUNTANTS

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

INVESTMENT MANAGER

Dean Witter InterCapital Inc.
Two World Trade Center
New York, New York 10048

SUB-ADVISOR

Morgan Grenfell Investment Services Limited

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 ANNUAL REPORT
and other pertinent information, please see the prospectus OCTOBER 31, 1994
of the Fund.

This report is not authorized for distribution to
prospective investors in the Fund unless preceded or
accompanied by an effective prospectus.

<PAGE>

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

<TABLE>
<CAPTION>
DATE TOTAL MSCI S&P
- ----------------------------------------------------------------
<S> <C> <C> <C>
June 1, 1990 $10,000 $10,000 $10,000
- ----------------------------------------------------------------
October 31, 1990 $ 9,230 $ 8,742 $ 8,502
- ----------------------------------------------------------------
October 31, 1991 $ 9,353 $ 9,921 $11,347
- ----------------------------------------------------------------
October 31, 1992 $ 9,129 $ 9,212 $12,475
- ----------------------------------------------------------------
October 31, 1993 $12,666 $11,492 $14,335
- ----------------------------------------------------------------
October 31, 1994 $14,443(3) $12,170 $14,887
- ----------------------------------------------------------------
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
1 YEAR LIFE OF FUND
-----------------------------------
<S> <C>
15.61 (1) 9.02 (1)
-----------------------------------
10.61 (2) 8.68 (2)
-----------------------------------

_____ Fund _____ S&P 500 (4) _____ MSCI (5)

PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RETURNS.
<FN>
________________________________________

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

(2) Figure shown assumes the deduction of the maximum applicable
contingent deferred sales charge (CDSC) (1 year-5%, since
inception - 2%). See the Fund's current prospectus for
complete details on fees and sales charges.

(3) Closing value after the deduction of a 2% CDSC, assuming a
complete redemption on October 31, 1994.

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

(5) The Morgan Stanley Capital International World Index (MSCI)
measures performance for a diverse range of global stock
markets including the U.S., Canada, Europe, Australia, New
Zealand and the Far East. The index does not include any
expenses, fees or charges or reinvestment of dividends.
</TABLE>