MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC, N-30D, 1998-12-30

MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC
N-30D, 1998-12-30

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<PAGE>

MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND TWO WORLD TRADE CENTER,
INC. NEW YORK, NEW YORK 10048
LETTER TO THE SHAREHOLDERS OCTOBER 31, 1998

DEAR SHAREHOLDER:

The twelve-month period ended October 31, 1998, was an exceptionally volatile
one for the economies of the Pacific Basin as the currency crisis that emerged
in mid-1997 developed into full-blown recession. The downturn's uncertain
progression affected the region's stock markets, which dipped sharply toward the
end of 1997. While these markets rallied during the first quarter of 1998 as
expectations of an early recovery grew, they fell again throughout the second
and third quarters of the year. This trend was reversed only in October as a
stabilization of local currencies and a fall in interest rates finally held out
the prospect of economic recovery.

MARKET OVERVIEW

Given the region's traditional reliance on foreign borrowing, the end of 1997
was dominated by the repercussions of currency devaluation. The devaluations,
which began in Thailand and spread throughout the region, not only increased the
size of overseas borrowings but also raised the cost of servicing this debt.
This situation placed a severe burden on the cash flows of Asian companies and
resulted in a sharp increase in insolvency and the threat of default. It was the
fear of default in Korea that caused the region's markets to fall sharply at the
close of 1997. The magnitude of the problem prompted an IMF-led bailout and a
rescheduling of Korea's corporate borrowing.

The scale of the IMF's commitment and the manner in which the international
community rallied to Korea's assistance were viewed positively by the region's
markets, which rallied throughout the first quarter of 1998. With its
prescription of currency stability through a tight monetary policy and its
provision of emergency financing to cover a country's short-term needs, the IMF
became identified with the solution to the Asian crisis. At the same time, a
number of policy initiatives designed to complement the IMF's actions
strengthened investor conviction that Asia was on the road to recovery.

<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
LETTER TO THE SHAREHOLDERS OCTOBER 31, 1998, CONTINUED

By the second quarter of 1998, however, this conviction began to wane. Economic
data suggested that the downturn was far more severe than originally
anticipated. Of particular significance was the release of a negative GDP figure
for Hong Kong, which had been viewed as largely insulated from the Asian crisis.
At the same time, mounting evidence of a slowdown in China's economy raised the
specter of a devaluation of its currency which would necessitate a weakening of
the Hong Kong dollar. The Hong Kong dollar had survived sporadic speculative
assaults since late 1997, following the devaluation of other Asian currencies.
However, a more potent challenge was mounted in August 1998. This problem was
contained only after the Hong Kong Monetary Authority took the exceptional step
of intervening heavily in Hong Kong's stock market, where speculators had
amassed short positions in expectation of driving stock prices lower by putting
pressure on the local currency. This intervention, coupled with a refinement of
Hong Kong's currency board arrangement to make it more difficult to place upward
pressure on interest rates through market speculation, successfully maintained
the currency peg.

Elsewhere, economic data began to hint that IMF-style policies were failing to
effect a turnaround in Asia's economies and were in some instances actually
aggravating the crisis. A growing disillusionment with the IMF strategy resulted
in a steady abandonment of its doctrine around the region and its replacement
with looser monetary conditions and expansionary fiscal policies.

Toward the end of the fiscal year, positive external developments lent greater
support to Asia's markets. The cuts in U.S. interest rates and a strengthening
of the Japanese yen during October enabled Asian currencies to stabilize and
local interest rates to fall. These conditions, which have been the goal of the
region's policymakers since the currency crisis began, are widely believed to be
preconditions for the resumption of economic growth. In addition, Russia's
default resulted in a reduction in the appetite for risk globally and a
reduction in much of the speculative activity in Asia's currency and equity
markets. Along with a bias toward lower interest rates, this shift has enabled
the risk premium attracted by Asian assets to subside. The result has been a
sharp rebound in the region's markets as liquidity has returned in anticipation
of the beginning of the end of the Asian crisis.

PERFORMANCE

Against this difficult investment environment, Morgan Stanley Dean Witter
Pacific Growth Fund Class B produced a total return of -22.87 percent for the
12-month period ended October 31, 1998. The Fund's return was in line with that
of its peer group, which returned -21.64 percent as

2
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
LETTER TO THE SHAREHOLDERS OCTOBER 31, 1998, CONTINUED

measured by the Lipper Pacific Region Funds Average. The Fund's Class A, C and D
shares returned -22.35 percent, -22.68 percent and -22.14 percent, respectively.
For the same period, the Morgan Stanley Capital International World Index (MSCI
World Index) returned 13.78%. It is important to note that the Fund invests
primarily in securities of the markets of the Pacific Rim while the MSCI World
Index measures the performance of the European, Asian and American markets. The
Lipper Pacific Region Funds Average tracks the performance of funds that invest
in equity securities whose primary trading markets or operations are
concentrated in the Pacific Basin or a single country within this region. The
accompanying chart compares the performance of the Fund's Class B shares with
that of the Lipper and MSCI indexes.

PORTFOLIO STRATEGY

On October 31, 1998, 88.7 percent of the Fund's net assets were allocated to
common stocks, with the remaining 10.6 percent spread among various U.S.
government securities and convertible corporate bonds. Throughout the fiscal
year, the Fund pursued a strategy of underweighting the Asian markets, with
Japan and Australia being the only exceptions. At fiscal year-end, the Fund's
single largest country position was Hong Kong, representing 31.1 percent of net
assets. The Fund's exposure to greater China, which includes Taiwan and direct
China investments, was 43.7 percent. The Fund also maintained positions in
Australia (5.3 percent) and Japan (19.7 percent), as the crisis in Southeast
Asia intensified, and held an unusually large weighting in cash, given the
backdrop of weak markets, which was positive for performance for the year as a
whole.

At the stock and sector level, the Fund has continued to emphasize well-managed
companies with strong balance sheets and good earnings visibility. This has led
the Fund to overweight the more defensive utility companies while underweighting
cyclical and interest-rate-sensitive stocks that have been particularly affected
by the regional downturn. The Fund has also concentrated on sectors it believes
offer a degree of insulation from demand from within Asia, such as the
electronics sector in Taiwan, which is a continued beneficiary of the trend for
outsourcing in the personal computer industry worldwide. Toward the close of the
fiscal year the Fund had begun to position itself in sectors poised to benefit
from the early stages of economic recovery in Asia and where valuations have
corrected too heavily. Singapore's banks, which currently trade little above
their book values, are a case in point.

3
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
LETTER TO THE SHAREHOLDERS OCTOBER 31, 1998, CONTINUED

MARKET OUTLOOK

Although the trough of Asia's recession is unlikely to be reached until 1999, a
shift toward pro-growth policies by Asian governments is providing the
foundation to an eventual recovery. In addition, external positions are
improving as current accounts again move into the surplus column, although the
recovery in exports remains weak and its outlook uncertain, given the prospects
for global demand. Despite the considerable devaluation in currencies outside
Hong Kong and China, price pressures remain largely benign, with disinflation
rather than inflation, being the bigger concern in most economies.

At the same time, the context of economic policy making in Asia has changed
abruptly with the weakening of the U.S. dollar by accelerating the pace of
interest-rate reductions and allowing currencies to stabilize. Although lower
interest rates will not in themselves trigger a sudden recovery in economic
activity, Asia remains particularly sensitive to their movement, given its heavy
reliance on overseas borrowing and the preponderance of interest-rate-sensitive
stocks (e.g., banks and property companies) that dominate its markets. In this
respect, it is reasonable to conclude that recent trends in interest rates, if
perpetuated, should accelerate the pace with which Asia's economies and markets
recover. However, it must be recognized that events of the past fifteen months
have had a severe impact on output and demand, from which Asia's companies and
consumers will take time to recover.

NEW SUB-ADVISOR APPROVED

During the period under review, the Fund's Board of Directors approved the
selection of Morgan Stanley Dean Witter Investment Management Inc. (at that time
Morgan Stanley Asset Management Inc.), an affiliate of Morgan Stanley Dean
Witter Advisors Inc., to act as sub-advisor to the Fund. The new sub-advisory
agreement was approved by shareholders at a special meeting held on August 18,
1998, and took effect on November 1, 1998. The results of the vote were as
follows:

<TABLE>
<S> <C>
For.......................................................... 20,901,581
Against...................................................... 964,013
Abstain...................................................... 4,174,307
</TABLE>

Morgan Stanley Dean Witter Investment Management Inc., like Morgan Stanley Dean
Witter Advisors Inc., is a wholly owned subsidiary of Morgan Stanley Dean Witter
& Co., a preeminent global financial services firm that maintains leading market
positions in each of three primary businesses -- securities, asset management
and credit services. The firm serves in various portfolio

4
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
LETTER TO THE SHAREHOLDERS OCTOBER 31, 1998, CONTINUED

management and similar capacities to investment companies and pension plans as
well as other institutional and individual investors. Morgan Stanley Dean Witter
Investment Management Inc. replaces Morgan Grenfell Investment Services Limited
as the Fund's sub-advisor and will provide the Fund with investment advice and
portfolio management relating to the Fund's investments, subject to the overall
supervision of Morgan Stanley Dean Witter Advisors, the Fund's Investment
Manager.

Since taking over as sub-advisor on November 1, 1998, Morgan Stanley Dean Witter
Investment Management Inc. has increased the Fund's exposure to Japan from 19.7
percent to 25.4 percent of the Fund's net assets, as of the date of this writing
(December 4, 1998), and anticipates further increasing the Fund's overall
exposure to Japan over time. Morgan Stanley Dean Witter Investment Management
Inc. believes such a shift reflects its current views on the relative
attractiveness within the region of the Japanese market. Of course, this
strategy may be adjusted should market conditions change.

While 1998 has been another difficult year for investments in the Pacific Basin,
given recent developments within the region's economies we continue to believe
that the region offers an attractive opportunity for the longer-term investor to
participate in the recovery of a region with strong long-run demographic and
economic trends.

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

Very truly yours,

/s/ Charles A. Fiumefreddo

CHARLES A. FIUMEFREDDO
CHAIRMAN OF THE BOARD

5
<PAGE>

MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND
INC.
FUND PERFORMANCE OCTOBER 31, 1998

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

<TABLE>
<CAPTION>
Growth of $10,000 -- Class
B
($ in Thousands)

Fund MSCI Lipper(5)
<S> <C> <C> <C>
November-1990 $10,000 $10,000 $10,000
October-1991 $11,754 $11,561 $11,582
October-1992 $12,913 $10,735 $11,054
October-1993 $20,162 $13,392 $16,059
October-1994 $22,317 $14,182 $17,871
October-1995 $20,387 $15,264 $16,230
October-1996 $20,999 $17,474 $17,064
October-1997 $14,486 $20,119 $13,877
October-1998 $11,173(3) $22,891 $10,874
</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 CHARGES AND EXPENSES.

<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
- ------------------------------------------------------------------------------------------------
CLASS B SHARES* CLASS A SHARES**
- -------------------------------------------- ---------------------------------------------
PERIOD ENDED 10/31/98 PERIOD ENDED 10/31/98
- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
1 Year -22.87%(1) -26.66%(2) 1 Year -22.35%(1) -26.43%(2)
5 Years -11.14%(1) -11.45%(2) Since Inception (7/28/97) -40.96%(1) -43.43%(2)
Since Inception
(11/30/90) 1.41%(1) 1.41%(2)
</TABLE>

<TABLE>
<CAPTION>
CLASS C SHARES+ CLASS D SHARES++
- -------------------------------------------- ---------------------------------------------
PERIOD ENDED 10/31/98 PERIOD ENDED 10/31/98
- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
1 Year -22.68%(1) -23.44%(2) 1 Year -22.14%(1)
Since Inception (7/28/97) -41.27%(1) -41.27%(2) Since Inception (7/28/97) -40.83%(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, 1998.
(4) The Morgan Stanley Capital International World Index (MSCI) measures
performance from a diverse range of global stock markets including the
U.S., Europe, Australia, New Zealand, and the Far East. The Index does not
include any expenses, fees, or charges, or reinvestment of dividends. The
Index is unmanaged and should not be considered an investment.
(5) The Lipper Pacific Region Funds Average tracks the performance of funds
which invest in equity securities whose primary trading markets or
operations are concentrated in the Western Pacific basin region or a single
country within the region, as reported by Lipper Analytical Services.
* The maximum 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.

6
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS, BONDS, RIGHTS AND WARRANTS (93.0%)
AUSTRALIA (5.3%)
ALCOHOLIC BEVERAGES
1,125,400 Foster's Brewing Group Ltd...................................................... $ 2,759,841
------------
DIVERSIFIED MANUFACTURING
1,025,000 Pacific Dunlop Ltd.............................................................. 1,842,048
------------
FOREIGN BANKS
1,016,000 Westpac Banking Corp., Ltd...................................................... 6,168,664
------------
HEALTHCARE
408,200 Mayne Nickless Ltd.............................................................. 1,879,810
------------
OIL & GAS PRODUCTION
1,031,300 Oil Search Ltd.................................................................. 1,544,475
------------
RETAIL
470,700 Coles Myer Ltd.................................................................. 2,014,897
------------
SPECIALTY FOODS/CANDY
4,215,800 Goodman Fielder Ltd............................................................. 5,558,583
------------
TELECOMMUNICATIONS
653,120 Cable & Wireless Communications Optus Ltd. (Rights)*............................ 313,322
------------
TOTAL AUSTRALIA................................................................. 22,081,640
------------

CHINA (1.1%)
ELECTRIC UTILITIES
2,830,000 Huaneng Power International, Inc.*.............................................. 986,699
3,600,000 Zhejiang Southeast Electric Power Co., Ltd. (B Shares).......................... 756,000
------------
1,742,699
------------
MUTUAL FUNDS
100,000 Investment Co. of China* ***.................................................... 543,000
------------
OTHER METALS/MINERALS
5,750,000 Yanzhou Coal Mining Co. Ltd.*................................................... 1,128,616
------------

TOTAL CHINA..................................................................... 4,421,805
------------

HONG KONG (31.1%)
BANKS
1,575,838 Dao Heng Bank Group Ltd......................................................... 3,286,387
1,040,000 Hang Seng Bank Ltd.............................................................. 8,997,934
------------
12,284,321
------------
BROADCASTING
959,000 Television Broadcasts Ltd....................................................... 2,551,059
------------
DIVERSIFIED ELECTRONIC PRODUCTS
340,000 VTech Holdings Ltd.............................................................. 1,275,439
------------
DIVERSIFIED MANUFACTURING
2,016,000 Johnson Electric Holdings Ltd.++................................................ 4,685,950
------------
ELECTRIC UTILITIES
2,187,000 CLP Holdings Ltd.++............................................................. 12,284,930
1,662,000 Hong Kong Electric Holdings Ltd................................................. 6,095,145
------------
18,380,075
------------
ELECTRONIC PRODUCTION EQUIPMENT
1,500,000 ASM Pacific Technology Ltd...................................................... 397,082
------------
FOOD CHAINS
2,200,000 Dairy Farm International Holdings Ltd........................................... 2,706,000
------------
MULTI-SECTOR COMPANIES
3,390,000 Hutchison Whampoa, Ltd.++....................................................... 24,295,584
2,731,000 New World Development Co., Ltd.++............................................... 6,347,882
1,389,000 Swire Pacific Ltd. (Class A).................................................... 7,371,888
------------
38,015,354
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
REAL ESTATE
2,330,000 Cheung Kong (Holdings) Ltd.++................................................... $ 15,946,539
1,218,000 Sun Hung Kai Properties Ltd.++.................................................. 8,493,285
------------
24,439,824
------------
TELECOMMUNICATIONS
2,229,000 China Telecom Ltd.*............................................................. 4,188,010
9,098,000 Hong Kong Telecommunications Ltd.++............................................. 18,210,098
------------
22,398,108
------------
TRANSPORTATION
686,000 New World Infrastructure Ltd.*.................................................. 978,861
1,381,000 Road King Infrastructure Ltd.................................................... 980,824
------------
1,959,685
------------
UTILITIES
150,000 Hong Kong & China Gas Co., Ltd. (Warrants due 09/30/99)*........................ 15,496
------------

TOTAL HONG KONG................................................................. 129,108,393
------------
INDIA (1.2%)
FOREIGN BANKS
135,000 State Bank of India (GDR)....................................................... 1,090,125
------------
OTHER METALS/MINERALS
70,000 Hindalco Industries Ltd. (GDR)*................................................. 822,500
------------
SPECIALTY CHEMICALS
70,000 Reliance Industries Ltd. (GDR).................................................. 357,000
------------
TELECOMMUNICATIONS
134,900 Mahanagar Telephone Nigam Ltd. (GDR)*........................................... 1,480,528
------------
TOBACCO
65,000 ITC Ltd. (GDR)*................................................................. 1,300,000
------------
TOTAL INDIA..................................................................... 5,050,153
------------

<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>

INDONESIA (0.0%)
MUTUAL FUNDS
2,500,000 Bativa Investment............................................................... --
------------
PAPER
300 PT Pabrik Kertas Tjiwi Kimia (Warrants due 07/15/02)*........................... $ 22
------------

TOTAL INDONESIA................................................................. 22
------------

JAPAN (19.7%)
APPAREL
132,000 Tokyo Style Co., Ltd............................................................ 1,325,123
------------
AUTO PARTS: O.E.M.
77,000 Bridgestone Corp................................................................ 1,703,363
18,000 Yasunaga Corp................................................................... 74,515
------------
1,777,878
------------
BANKS
178,000 Bank of Tokyo-Mitsubishi Ltd.................................................... 1,659,491
142,000 Mitsui Trust & Banking Co., Ltd................................................. 186,149
114,000 Sanwa Bank Ltd.................................................................. 893,713
113,000 Sumitomo Bank Ltd............................................................... 1,115,869
119,000 Sumitomo Trust & Banking Co..................................................... 333,549
------------
4,188,771
------------
BUILDING MATERIALS
34,500 Nichiha Corp.................................................................... 243,984
250,000 Nitto Boseki Co., Ltd........................................................... 582,147
------------
826,131
------------
BUILDING PRODUCTS
202,000 Sanwa Shutter Corp.............................................................. 827,512
JPY 80,000 K Sanwa Shutter Corp. 0.90% due 03/31/06 (Conv.).................................. 586,460
------------
1,413,972
------------
CHEMICALS
13,000 C. Uyemura & Co., Ltd........................................................... 315,050
------------
CLOTHING/SHOE/ACCESSORY CHAINS
21,000 Shimamura Co., Ltd.............................................................. 836,740
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMPUTER SOFTWARE
53,000 Hitachi Software Engineering Co., Ltd........................................... $ 1,371,281
432 NTT Data Corp................................................................... 1,836,792
------------
3,208,073
------------
CONSUMER ELECTRONICS/APPLIANCES
30,000 Hitachi Maxell Ltd.............................................................. 429,495
25,300 Sony Corp....................................................................... 1,614,661
------------
2,044,156
------------
CONTAINERS/PACKAGING
8,000 Fuji Seal, Inc.................................................................. 372,574
------------
DEPARTMENT STORES
132,000 Hankyu Department Stores, Inc................................................... 741,113
------------
DIVERSIFIED COMMERCIAL SERVICES
3,000 Bellsystem 24, Inc.............................................................. 579,560
19,200 Meitec Corp..................................................................... 372,574
24,000 Secom Co........................................................................ 1,790,427
------------
2,742,561
------------
ELECTRIC UTILITIES
58,000 Tokyo Electric Power Co......................................................... 1,475,636
------------
ELECTRICAL PRODUCTS
170,000 Fujikura Ltd.................................................................... 791,721
98,000 Sumitomo Electric Industries.................................................... 1,090,298
------------
1,882,019
------------
ELECTRONIC COMPONENTS
53,000 Ibiden Co., Ltd................................................................. 809,056
78,000 Minebea Co., Ltd................................................................ 736,611
19,500 Mitsui High-Tec, Inc............................................................ 448,189
14,600 Shinko Electric Industries Co., Ltd............................................. 516,257
13,000 TDK Corp........................................................................ 861,061
------------
3,371,174
------------
ELECTRONIC PRODUCTION EQUIPMENT
JPY 91,000 K Canon, Inc. 1.20% due 12/20/05 (Conv.).......................................... 1,201,561
JPY 45,000 K Canon, Inc. 1.30% due 12/19/08 (Conv.).......................................... 659,767
20,000 Disco Corp...................................................................... 569,211
26,200 Tokyo Seimitsu Co., Ltd......................................................... 824,752
------------
3,255,291
------------

<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
ENGINEERING & CONSTRUCTION
264,000 Kajima Corp..................................................................... $ 785,511
38,000 Kaneshita Construction.......................................................... 198,275
91,000 Nippon Comsys Corp.............................................................. 1,185,080
------------
2,168,866
------------
FINANCE COMPANIES
JPY 19,000 K Minebea Co., Ltd. 0.80% due 03/31/03 (Conv.).................................... 211,384
13,700 Nichiei Co., Ltd. (Kyoto)....................................................... 1,113,014
------------
1,324,398
------------
FOOD CHAINS
18,500 Circle K Japan Co., Ltd......................................................... 732,342
27,000 Ito-Yokado Co., Ltd............................................................. 1,583,441
24,000 Seven - Eleven Japan Co., Ltd................................................... 1,833,894
------------
4,149,677
------------
INDUSTRIAL MACHINERY/COMPONENTS
113,000 Daifuku Co., Ltd................................................................ 479,483
20,000 Fuji Machine Manufacturing Co., Ltd............................................. 591,634
123,000 OSG Corp........................................................................ 583,441
22,500 Shima Seiki Manufacturing, Ltd.................................................. 708,279
11,000 Union Tool Co................................................................... 406,986
------------
2,769,823
------------
INDUSTRIAL SPECIALTIES
200,000 Tomoegawa Paper Co., Ltd.*...................................................... 388,098
------------
INVESTMENT BANKERS/BROKERS/SERVICES
112,000 Nomura Securities Co., Ltd...................................................... 850,022
------------
MAJOR PHARMACEUTICALS
59,000 Sankyo Co., Ltd................................................................. 1,338,249
75,000 Takeda Chemical Industries...................................................... 2,451,488
------------
3,789,737
------------
MEAT/POULTRY/FISH
108,000 Nippon Meat Packers, Inc........................................................ 1,509,858
30,000 Yonekyu Corp.................................................................... 466,235
------------
1,976,093
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
METALS FABRICATIONS
325,000 Mitsui Mining & Smelting Co., Ltd............................................... $ 1,482,751
------------
MOTOR VEHICLES
15,000 Aucnet, Inc..................................................................... 297,542
64,000 Honda Motor Co.................................................................. 1,931,867
68,000 Toyota Motor Corp............................................................... 1,642,087
------------
3,871,496
------------
MOVIES/ENTERTAINMENT
28,200 Sony Music Entertainment Inc.................................................... 987,426
------------
NATURAL GAS DISTRIBUTION
369,000 Tokyo Gas Co., Ltd.............................................................. 951,539
------------
OFFICE EQUIPMENT/SUPPLIES
134,000 Ricoh Co., Ltd.................................................................. 1,138,335
------------
OTHER SPECIALTY STORES
6,000 Otsuka Kagu Ltd................................................................. 331,177
------------
PHOTOGRAPHIC PRODUCTS
50,000 Fuji Photo Film Co.............................................................. 1,841,311
------------
PRECISION INSTRUMENTS
10,700 Keyence Corp.................................................................... 1,077,844
------------
PROPERTY - CASUALTY INSURANCE
181,000 Tokio Marine & Fire Insurance Co................................................ 2,068,348
------------
RAILROADS
220,000 Tokyu Corp...................................................................... 554,032
------------
REAL ESTATE
34,700 Chubu Sekiwa Real Estate, Ltd................................................... 182,254
89,000 Mitsubishi Estate Co., Ltd...................................................... 811,324
131,000 Mitsui Fudosan Co., Ltd......................................................... 874,463
------------
1,868,041
------------
RECREATIONAL PRODUCTS/TOYS
13,000 Nintendo Co., Ltd............................................................... 1,105,476
------------
RENTAL/LEASING COMPANIES
16,500 Orix Corp....................................................................... 1,188,228
------------
SEMICONDUCTORS
15,000 Rohm Co., Ltd................................................................... 1,332,471
------------
SERVICES TO THE HEALTH INDUSTRY
19,000 Nichii Gakkan Co................................................................ 688,228
------------
SOFT DRINKS
19,000 Itoen Ltd....................................................................... 794,739
------------

<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SPECIALTY CHEMICALS
152,000 Asahi Chemical Industry Co., Ltd................................................ $ 646,279
513,000 Mitsubishi Chemical Corp........................................................ 929,107
441,000 Mitsubishi Rayon Co., Ltd....................................................... 1,182,846
311,000 Nippon Zeon Co., Ltd............................................................ 879,759
87,000 Sanyo Chemical Industries, Ltd.................................................. 739,069
76,000 Shin-Etsu Chemical Co........................................................... 1,520,655
80,000 Sumitomo Bakelite Co., Ltd...................................................... 538,163
20,000 Tokyo Ohka Kogyo Co., Ltd....................................................... 502,803
------------
6,938,681
------------
STEEL/IRON ORE
666,000 Nippon Steel Co................................................................. 1,166,003
734,000 Sumitomo Metal Industries....................................................... 784,959
90,000 Yamato Kogyo Co., Ltd........................................................... 411,384
------------
2,362,346
------------
TELECOMMUNICATIONS
267 DDI Corp........................................................................ 782,924
234 Nippon Telegraph & Telephone Corp............................................... 1,840,517
------------
2,623,441
------------
WHOLESALE DISTRIBUTOR
15,000 Fujimi, Inc..................................................................... 504,528
22,000 Kuroda Electric Co., Ltd........................................................ 307,374
32,000 Misumi Corp..................................................................... 518,844
200 World Co., Ltd.................................................................. 6,399
------------
1,337,145
------------

TOTAL JAPAN..................................................................... 81,736,031
------------

MALAYSIA+ (2.6%)
AGRICULTURE
976,000 Highlands & Lowlands Berhad..................................................... 361,282
3,417,000 IOI Corporation Berhad.......................................................... 943,923
732,000 Kuala Lumpur Kepong Berhad...................................................... 601,237
------------
1,906,442
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
AUTO
879,000 Oriental Holdings Berhad........................................................ $ 641,039
------------
CASINO/GAMBLING
928,000 Berjaya Sports Toto Berhad...................................................... 522,961
------------
CONTAINERS/PACKAGING
464,000 Malaysian Pacific Industries Berhad............................................. 338,387
------------
ELECTRIC UTILITIES
680,000 Malakoff Berhad................................................................. 745,120
1,935,000 Tenaga Nasional Berhad.......................................................... 1,532,320
------------
2,277,440
------------
ENGINEERING & CONSTRUCTION
732,000 Gamuda Berhad................................................................... 428,685
------------
HOTELS/RESORTS
1,392,000 Resorts World Berhad............................................................ 830,585
------------
INSURANCE
971,000 Malaysian Assurance Alliance Berhad............................................. 500,700
------------
TELECOMMUNICATIONS
1,863,000 Telekom Malaysia Berhad......................................................... 2,315,884
------------
TOBACCO
644,000 RJ Reynolds Berhad.............................................................. 347,499
------------
TRANSPORTATION
1,269,000 Lingkaran Trans Kota Holdings Berhad*........................................... 563,221
------------
TOTAL MALAYSIA.................................................................. 10,672,843
------------

PHILIPPINES (0.8%)
ELECTRIC UTILITIES
355,963 Manila Electric Co. (B Shares).................................................. 1,053,721
------------
REAL ESTATE
2,606,400 Ayala Land, Inc................................................................. 794,239
------------
TELECOMMUNICATIONS
64,800 Philippine Long Distance Telephone Co. (ADR).................................... 1,579,500
------------

TOTAL PHILIPPINES............................................................... 3,427,460
------------

<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>

SINGAPORE (10.0%)
AIRLINES
862,000 Singapore Airlines Ltd.......................................................... $ 5,312,789
------------
BANKS
439,500 Development Bank of Singapore, Ltd.............................................. 2,762,958
1,141,200 Overseas Chinese Banking Corp., Ltd............................................. 4,993,849
926,000 Overseas Union Bank, Ltd........................................................ 2,522,601
920,000 United Overseas Bank Ltd........................................................ 4,337,750
------------
14,617,158
------------
DIVERSIFIED ELECTRONIC PRODUCTS
385,000 Elec & Eltek International Co., Ltd............................................. 1,925,000
------------
DIVERSIFIED MANUFACTURING
3,008,243 Singapore Technologies Engineering Ltd.......................................... 2,966,526
------------
ELECTRICAL PRODUCTS
289,000 GP Batteries International Ltd.................................................. 637,670
------------
ELECTRONIC COMPONENTS
1,260,000 Venture Manufacturing Ltd....................................................... 4,193,529
------------
ENGINEERING
200,000 Jurong Shipyard Ltd............................................................. 862,866
------------
INDUSTRIAL MACHINERY/COMPONENTS
532,000 Keppel Fels Ltd................................................................. 963,994
------------
NEWSPAPERS
324,382 Singapore Press Holdings Ltd.................................................... 2,798,982
------------
REAL ESTATE
870,400 City Developments, Ltd.......................................................... 3,165,091
632,000 Keppel Land Ltd................................................................. 619,341
------------
3,784,432
------------
TELECOMMUNICATIONS
1,869,000 Singapore Telecommunications Ltd................................................ 3,236,912
------------

TOTAL SINGAPORE................................................................. 41,299,858
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998, CONTINUED
<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SOUTH KOREA (6.5%)
DIVERSIFIED ELECTRONIC PRODUCTS
1 LG Information & Communication Ltd.............................................. $ 23
141,245 Samsung Electronics Co.......................................................... 5,786,973
------------
5,786,996
------------
ELECTRIC UTILITIES
339,000 Korea Electric Power Corp....................................................... 6,044,385
------------
ELECTRICAL PRODUCTS
64,305 Samsung Display Devices Co...................................................... 2,415,097
------------
INDUSTRIAL MACHINERY/COMPONENTS
390,000 Daewoo Heavy Industries......................................................... 1,467,678
------------
MUTUAL FUNDS
234,000 Atlantis Korean Smaller Companies*.............................................. 1,277,640
------------
STEEL/IRON ORE
175,295 Pohang Iron & Steel Co., Ltd.................................................... 9,822,505
------------
TOTAL SOUTH KOREA............................................................... 26,814,301
------------

TAIWAN (11.5%)
BANKS
1,144,332 China Trust Commercial Bank*.................................................... 798,823
496,036 International Commercial Bank of China*......................................... 516,337
885,456 United World Chinese Commercial Bank*........................................... 845,115
------------
2,160,275
------------
BUILDING MATERIALS
336,534 Asia Cement (GDR)............................................................... 3,112,939
------------
ELECTRONIC COMPONENTS
65,937 Acer Inc........................................................................ 67,413
$ 1,900 K Acer Peripherals Inc. 1.25% due 11/27/06 (Conv.)................................ 1,966,500
$ 2,100 K Compal Electronics 1.00% due 11/21/03 (Conv.)................................... 4,672,500
936,000 Microtek International, Inc.*................................................... 719,889
736,848 Siliconware Precision Industries Co.*........................................... 1,183,509

<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
$ 230 K Siliconware Precision Industries Co. 0.50% due 07/21/04 (Conv.)................. $ 215,625
$ 1,800 K United Microelectronics Corp. - 144A** 0.25% due 05/16/04 (Conv.)............... 1,815,750
$ 1,000 K Yageo Corp. 1.25% due 07/24/03 (Conv.).......................................... 1,150,000
------------
11,791,186
------------
ELECTRONIC PRODUCTION EQUIPMENT
1,758,125 Taiwan Semiconductor Manufacturing Co.*......................................... 3,556,979
------------
FINANCE COMPANIES
951,750 China Development Corp.......................................................... 1,881,452
------------
INDUSTRIAL SPECIALTIES
$ 2,925 K Nan Ya Plastics Corp. 1.75% due 07/19/01 (Conv.)................................ 3,217,500
------------
LIFE INSURANCE
1,283,820 Cathay Life Insurance Co., Ltd.................................................. 4,540,460
------------
MARINE TRANSPORTATION
$ 2,000 K U-Ming Marine Transport 1.50% due 02/07/01 (Conv.).............................. 1,725,000
------------
MUTUAL FUNDS
730 Taipei Fund*.................................................................... 6,192,590
------------
REAL ESTATE
1,053,541 Cathay Construction Corp........................................................ 667,107
------------
SEMICONDUCTORS
58,000 Taiwan Semiconductor Manufacturing Co. Ltd. (ADR)*.............................. 801,125
------------
SPECIALTY CHEMICALS
1,155,618 Formosa Plastic Corp............................................................ 1,774,030
------------
SPECIALTY FOODS/CANDY
1,801,200 President Enterprises Corp.*.................................................... 1,541,104
660,000 Standard Foods Taiwan Ltd.*..................................................... 1,345,483
------------
2,886,587
------------
STEEL/IRON ORE
3,802,800 China Steel Corp................................................................ 2,584,142
69,300 China Steel Corp. (GDR)......................................................... 975,397
------------
3,559,539
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998, CONTINUED

<TABLE>
<CAPTION>
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
TEXTILES
68,488 Formosa Chemical & Fibre Corp................................................... $ 48,867
------------
TOTAL TAIWAN.................................................................... 47,915,636
------------

THAILAND (2.5%)
BANKS
673,800 Bangkok Bank PCL................................................................ 1,028,141
1,009,500 Thai Farmers Bank PCL........................................................... 1,279,067
------------
2,307,208
------------
BROADCASTING
1,103,500 United Broadcasting PCL*........................................................ 699,084
------------
ELECTRIC UTILITIES
773,500 Cogeneration PCL*............................................................... 579,598
439,400 Electricity Generating PCL...................................................... 1,161,357
------------
1,740,955
------------
MOVIES/ENTERTAINMENT
255,200 BEC World PCL................................................................... 1,571,531
------------
OIL
230,700 PTT Exploration & Production PCL................................................ 2,225,281
------------
OTHER TRANSPORTATION
580,400 Bangkok Expressway PCL*......................................................... 458,627
------------
TELECOMMUNICATIONS
195,100 Advanced Info Service PCL....................................................... 1,435,341
------------

TOTAL THAILAND.................................................................. 10,438,027
------------

UNITED KINGDOM (0.7%)
DIVERSIFIED FINANCIAL SERVICES
126,400 HSBC Holdings PLC............................................................... 2,897,211
------------

TOTAL COMMON STOCKS, BONDS, RIGHTS AND WARRANTS
(IDENTIFIED COST $465,828,237).................................................. 385,863,380
------------
</TABLE>

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (a) (6.3%)
COMMERCIAL PAPER
SMALLER BANKS
$ 350 Associates Corp. of N.A. 5.07% due 12/18/98..................................... $ 347,702
------------
U.S. GOVERNMENT AGENCY
26,000 Federal Home Loan Mortgage Corp. 5.42% due 11/02/98............................. 25,996,085
------------

TOTAL SHORT-TERM INVESTMENTS
(AMORTIZED COST $26,343,787).................................................... 26,343,787
------------
</TABLE>

<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $492,172,024) (b)........................................................ 99.3 % 412,207,167

CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES............................................ 0.7 3,030,562
------ -------------

NET ASSETS................................................................................ 100.0 % $ 415,237,729
------ -------------
------ -------------
</TABLE>

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

ADR American Depository Receipt.
GDR Global Depository Receipt.
K In thousands.
* Non-income producing security.
** Resale is restricted to qualified institutional investors.
*** Partially paid shares. Resale is restricted to qualified institutional
investors.
+ Securities deemed illiquid. The Malaysian Government prohibits the
repatriation of proceeds on sales of securities denominated in Malaysian
ringgits for a one year period from the date of sale.
++ Some or all of these securities are segregated in connection with open
forward foreign currency contracts.
(a) Securities were purchased on a discount basis. The interest rates shown
have 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 $23,860,944 and the
aggregate gross unrealized depreciation is $103,825,801, resulting in net
unrealized depreciation of $79,964,857.

SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998, CONTINUED

FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT OCTOBER 31, 1998:

<TABLE>
<CAPTION>
CONTRACTS TO IN DELIVERY UNREALIZED
DELIVER EXCHANGE FOR DATE DEPRECIATION
- -------------------------------------------------------------
<S> <C> <C> <C>
$ 766,890 AUD 1,208,272 11/09/98 $ (12,929)
HKD 28,980,000 $ 3,684,679 11/18/98 (55,738)
HKD 290,578,500 $ 36,789,074 12/01/98 (702,346)
HKD 80,800,000 $ 9,958,343 06/10/99 (324,506)
-------------
Total unrealized depreciation......... $ (1,095,519)
-------------
-------------
</TABLE>

CURRENCY ABBREVIATIONS:

<TABLE>
<S> <C>
AUD Australian Dollar.
HKD Hong Kong Dollar.
JPY Japanese Yen.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
SUMMARY OF INVESTMENTS OCTOBER 31, 1998
<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Agriculture....................................................................... $ 1,906,442 0.5%
Airlines.......................................................................... 5,312,789 1.3
Alcoholic Beverages............................................................... 2,759,841 0.7
Apparel........................................................................... 1,325,123 0.3
Auto.............................................................................. 641,039 0.2
Auto Parts: O.E.M................................................................. 1,777,878 0.4
Banks............................................................................. 35,557,733 8.6
Broadcasting...................................................................... 3,250,143 0.8
Building Materials................................................................ 3,939,070 0.9
Building Products................................................................. 1,413,972 0.3
Casino/Gambling................................................................... 522,961 0.1
Chemicals......................................................................... 315,050 0.1
Clothing/Shoe/Accessory Chains.................................................... 836,740 0.2
Computer Software................................................................. 3,208,073 0.8
Consumer Electronics/Appliances................................................... 2,044,156 0.5
Containers/Packaging.............................................................. 710,961 0.2
Department Stores................................................................. 741,113 0.2
Diversified Commercial Services................................................... 2,742,561 0.7
Diversified Electronic Products................................................... 8,987,435 2.2
Diversified Financial Services.................................................... 2,897,211 0.7
Diversified Manufacturing......................................................... 9,494,524 2.3
Electric Utilities................................................................ 32,714,911 7.9
Electrical Products............................................................... 4,934,786 1.2
Electronic Components............................................................. 19,355,889 4.7
Electronic Production Equipment................................................... 7,209,352 1.7
Engineering....................................................................... 862,866 0.2
Engineering & Construction........................................................ 2,597,551 0.6
Finance Companies................................................................. 3,205,850 0.8
Food Chains....................................................................... 6,855,677 1.6
Foreign Banks..................................................................... 7,258,789 1.7
Healthcare........................................................................ 1,879,810 0.4
Hotels/Resorts.................................................................... 830,585 0.2
Industrial Machinery/
Components...................................................................... 5,201,495 1.2
Industrial Specialties............................................................ 3,605,598 0.9
Insurance......................................................................... 500,700 0.1
Investment Bankers/
Brokers/Services................................................................ 850,022 0.2
Life Insurance.................................................................... 4,540,460 1.1
Major Pharmaceuticals............................................................. 3,789,737 0.9
Marine Transportation............................................................. 1,725,000 0.4
Meat/Poultry/Fish................................................................. 1,976,093 0.5
Metals Fabrications............................................................... 1,482,751 0.4

<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Motor Vehicles.................................................................... $ 3,871,496 0.9%
Movies/Entertainment.............................................................. 2,558,957 0.6
Multi-Sector Companies............................................................ 38,015,354 9.2
Mutual Funds...................................................................... 8,013,230 1.9
Natural Gas Distribution.......................................................... 951,539 0.2
Newspapers........................................................................ 2,798,982 0.7
Office Equipment/Supplies......................................................... 1,138,335 0.3
Oil............................................................................... 2,225,281 0.5
Oil & Gas Production.............................................................. 1,544,475 0.4
Other Metals/Minerals............................................................. 1,951,116 0.5
Other Specialty Stores............................................................ 331,177 0.1
Other Transportation.............................................................. 458,627 0.1
Paper............................................................................. 22 0.0
Photographic Products............................................................. 1,841,311 0.4
Precision Instruments............................................................. 1,077,844 0.3
Property - Casualty Insurance..................................................... 2,068,348 0.5
Railroads......................................................................... 554,032 0.1
Real Estate....................................................................... 32,561,133 7.8
Recreational Products/Toys........................................................ 1,105,476 0.3
Rental/Leasing Companies.......................................................... 1,188,228 0.3
Retail............................................................................ 2,014,897 0.5
Semiconductors.................................................................... 2,133,596 0.5
Services To The Health Industry................................................... 688,228 0.2
Smaller Banks..................................................................... 347,702 0.1
Soft Drinks....................................................................... 794,739 0.2
Specialty Chemicals............................................................... 9,069,711 2.2
Specialty Foods/Candy............................................................. 8,445,170 2.0
Steel/Iron Ore.................................................................... 15,744,390 3.8
Telecommunications................................................................ 35,383,036 8.5
Textiles.......................................................................... 48,867 0.0
Tobacco........................................................................... 1,647,499 0.4
Transportation.................................................................... 2,522,906 0.6
U.S. Government Agency............................................................ 25,996,085 6.2
Utilities......................................................................... 15,496 0.0
Wholesale Distributor............................................................. 1,337,145 0.3
------------ -----
$412,207,167 99.3%
------------ -----
------------ -----
</TABLE>

<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Common Stocks..................................................................... $368,112,493 88.7%
Convertible Bonds................................................................. 17,422,047 4.2
Rights & Warrants................................................................. 328,840 0.1
Short-Term Investments............................................................ 26,343,787 6.3
------------ -----
$412,207,167 99.3%
------------ -----
------------ -----
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1998

<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $492,172,024)............................................................. $ 412,207,167
Cash (including $2,541,702 in foreign currency).............................................. 3,760,313
Receivable for:
Capital stock sold....................................................................... 831,789
Dividends................................................................................ 576,432
Interest................................................................................. 89,735
Investments sold......................................................................... 79,331
Prepaid expenses and other assets............................................................ 203,822
-------------
TOTAL ASSETS............................................................................ 417,748,589
-------------
LIABILITIES:
Unrealized depreciation on open forward foreign currency contracts........................... 1,095,519
Payable for:
Investment management fee................................................................ 323,669
Plan of distribution fee................................................................. 320,765
Capital stock repurchased................................................................ 288,426
Compensated forward foreign currency contracts........................................... 185,001
Accrued expenses and other payables.......................................................... 297,480
-------------
TOTAL LIABILITIES....................................................................... 2,510,860
-------------
NET ASSETS.............................................................................. $ 415,237,729
-------------
-------------
COMPOSITION OF NET ASSETS:
Paid-in-capital.............................................................................. $ 908,710,524
Net unrealized depreciation.................................................................. (81,538,023)
Dividends in excess of net investment income................................................. (2,863,488)
Accumulated net realized loss................................................................ (409,071,284)
-------------
NET ASSETS.............................................................................. $ 415,237,729
-------------
-------------
CLASS A SHARES:
Net Assets................................................................................... $3,102,386
Shares Outstanding (500,000,000 AUTHORIZED, $.01 PAR VALUE).................................. 317,755
NET ASSET VALUE PER SHARE............................................................... $9.76
-------------
-------------
MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 5.54% OF NET ASSET VALUE)....................................... $10.30
-------------
-------------
CLASS B SHARES:
Net Assets................................................................................... $ 408,989,567
Shares Outstanding (500,000,000 AUTHORIZED, $.01 PAR VALUE).................................. 42,034,987
NET ASSET VALUE PER SHARE............................................................... $9.73
-------------
-------------
CLASS C SHARES:
Net Assets................................................................................... $1,580,928
Shares Outstanding (500,000,000 AUTHORIZED, $.01 PAR VALUE).................................. 162,669
NET ASSET VALUE PER SHARE............................................................... $9.72
-------------
-------------
CLASS D SHARES:
Net Assets................................................................................... $1,564,848
Shares Outstanding (500,000,000 AUTHORIZED, $.01 PAR VALUE).................................. 160,051
NET ASSET VALUE PER SHARE............................................................... $9.78
-------------
-------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1998

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

INCOME
Dividends (net of $833,344 foreign withholding tax).......................................... $ 12,757,134
Interest (net of $1,696 foreign withholding tax)............................................. 1,696,304
-------------

TOTAL INCOME............................................................................ 14,453,438
-------------

EXPENSES
Investment management fee.................................................................... 5,187,815
Plan of distribution fee (Class A shares).................................................... 4,701
Plan of distribution fee (Class B shares).................................................... 5,147,778
Plan of distribution fee (Class C shares).................................................... 12,016
Transfer agent fees and expenses............................................................. 2,127,150
Custodian fees............................................................................... 759,655
Shareholder reports and notices.............................................................. 236,574
Registration fees............................................................................ 124,937
Professional fees............................................................................ 76,734
Directors' fees and expenses................................................................. 17,610
Other........................................................................................ 33,309
-------------

TOTAL EXPENSES.......................................................................... 13,728,279
-------------

NET INVESTMENT INCOME................................................................... 725,159
-------------

NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss on:
Investments.............................................................................. (274,483,545)
Foreign exchange transactions............................................................ (994,452)
-------------

NET LOSS................................................................................ (275,477,997)
-------------
Net change in unrealized appreciation/depreciation on:
Investments.............................................................................. 122,217,563
Translation of forward foreign currency contracts and other assets and liabilities
denominated in foreign currencies...................................................... (1,083,303)
-------------

NET APPRECIATION........................................................................ 121,134,260
-------------

NET LOSS................................................................................ (154,343,737)
-------------

NET DECREASE................................................................................. $(153,618,578)
-------------
-------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 1998 OCTOBER 31, 1997*
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>

INCREASE (DECREASE) IN NET ASSETS:

OPERATIONS:
Net investment income.................................................. $ 725,159 $ 386,894
Net realized loss...................................................... (275,477,997) (81,003,250)
Net change in unrealized appreciation/depreciation..................... 121,134,260 (280,824,717)
---------------- -----------------

NET DECREASE...................................................... (153,618,578) (361,441,073)
---------------- -----------------

DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A shares......................................................... (18,402) --
Class B shares......................................................... (10,272,862) (25,258,274)
Class C shares......................................................... (13,025) --
Class D shares......................................................... (17,046) --
---------------- -----------------

TOTAL DIVIDENDS................................................... (10,321,335) (25,258,274)
---------------- -----------------
Net decrease from capital stock transactions........................... (166,513,928) (492,076,963)
---------------- -----------------

NET DECREASE...................................................... (330,453,841) (878,776,310)

NET ASSETS:
Beginning of period.................................................... 745,691,570 1,624,467,880
---------------- -----------------

END OF PERIOD
(INCLUDING DIVIDENDS IN EXCESS OF NET INVESTMENT INCOME OF
$2,863,488 AND $3,880,806, RESPECTIVELY)........................... $ 415,237,729 $ 745,691,570
---------------- -----------------
---------------- -----------------
</TABLE>

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

* Class A, Class C and Class D shares were issued July 31, 1997.

SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1998

1. ORGANIZATION AND ACCOUNTING POLICIES

Morgan Stanley Dean Witter Pacific Growth Fund Inc. (the "Fund"), formerly Dean
Witter Pacific Growth Fund Inc., 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 to maximize capital
appreciation of its investments. The Fund was incorporated in Maryland on June
13, 1990 and commenced operations on November 30, 1990. On July 28, 1997, the
Fund commenced offering three additional classes of shares, with the then
current shares designated as Class B shares.

The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase 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 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 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 are valued at the mean between
their latest bid and asked price; (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 Morgan Stanley Dean Witter Advisors Inc. (the "Investment
Manager"), formerly Dean Witter InterCapital Inc., or Morgan Grenfell Investment
Services Limited (the "Sub-Advisor") 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

19
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1998, CONTINUED

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 by 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. 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. 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 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 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 which is subsequently marked-to-market to reflect the current market
value. If a purchased 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

20
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1998, CONTINUED

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.

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

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

G. 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.

H. 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

21
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1998, CONTINUED

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 AND SUB-ADVISORY AGREEMENTS

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 as of the close
of each business day: 1.0% to the portion of daily net assets not exceeding $1
billion; 0.95% to the portion of daily net assets exceeding $1 billion but not
exceeding $2 billion; and 0.85% to the portion of daily net assets in excess of
$2 billion.

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

Under a Sub-Advisory Agreement between 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 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

22
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1998, CONTINUED

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, the Morgan Stanley
Dean Witter Financial Advisors and others who engage in or support distribution
of the shares or who service shareholder accounts, including overhead and
telephone expenses; (2) printing and distribution of prospectuses and reports
used in connection with the offering of these shares to other than current
shareholders; and (3) preparation, printing and distribution of sales literature
and advertising materials. In addition, the Distributor may utilize fees paid
pursuant to the Plan, in the case of Class B shares, to compensate Dean Witter
Reynolds Inc. ("DWR"), an affiliate of the Investment Manager and Distributor,
and other selected broker-dealers for their opportunity costs in advancing such
amounts, which compensation would be in the form of a carrying charge on any
unreimbursed expenses.

In the case of Class B shares, provided that the Plan continues in effect, any
cumulative expenses incurred by the Distributor but not yet recovered may be
recovered through the payment of future distribution fees from the Fund pursuant
to the Plan and contingent deferred sales charges paid by investors upon
redemption of Class B shares. Although there is no legal obligation for the Fund
to pay expenses incurred in excess of payments made to the Distributor under the
Plan and the proceeds of contingent deferred sales charges paid by investors
upon redemption of shares, if for any reason the Plan is terminated, the
Directors 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 $39,579,103 at October 31, 1998.

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, 1998, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.25% and
1.0%, respectively.

23
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1998, CONTINUED

The Distributor has informed the Fund that for the year ended October 31, 1998,
it received contingent deferred sales charges from certain redemptions of the
Fund's Class A shares, Class B shares and Class C shares of $1,390, $1,609,376,
and $6,017, respectively and received $27,369 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, 1998 aggregated
$286,599,407 and $459,404,314, respectively.

For the year ended October 31, 1998, the Fund incurred $6,691 in brokerage
commissions with affiliates of the Sub-Advisor for portfolio transactions
executed on behalf of the Fund.

For the year ended October 31, 1998, the Fund incurred brokerage commissions of
$13,320 with Morgan Stanley & Co., Inc., an affiliate of the Investment Manager
and Distributor, for portfolio transactions executed on behalf of the Fund.

Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager and
Distributor, is the Fund's transfer agent. At October 31, 1998, the Fund had
transfer agent fees and expenses payable of approximately $10,500.

The Fund has 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, 1998 included
in Directors' fees and expenses in the Statement of Operations, amounted to
$5,219. At October 31, 1998, the Fund had an accrued pension liability of
$42,377 which is included in accrued expenses in the Statement of Assets and
Liabilities.

24
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1998, CONTINUED

5. CAPITAL STOCK

Transactions in capital stock were as follows:

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 1998 OCTOBER 31, 1997*
---------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- ----------- ---------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold............................................................. 418,160 $ 4,158,089 63,214 $ 998,769
Reinvestment of dividends........................................ 1,152 13,083 -- --
Redeemed......................................................... (149,951) (1,337,917) (14,820) (235,608)
----------- -------------- ----------- ---------------
Net increase - Class A........................................... 269,361 2,833,255 48,394 763,161
----------- -------------- ----------- ---------------

CLASS B SHARES
Sold............................................................. 37,286,227 384,246,449 28,630,560 521,923,627
Reinvestment of dividends........................................ 840,396 9,572,097 1,228,090 23,456,516
Redeemed......................................................... (54,083,073) (565,173,912) (57,878,288) (1,039,376,437)
----------- -------------- ----------- ---------------
Net decrease - Class B........................................... (15,956,450) (171,355,366) (28,019,638) (493,996,294)
----------- -------------- ----------- ---------------

CLASS C SHARES
Sold............................................................. 1,140,153 10,725,985 76,313 1,169,997
Reinvestment of dividends........................................ 1,046 11,869 -- --
Redeemed......................................................... (1,042,383) (10,154,217) (12,460) (171,011)
----------- -------------- ----------- ---------------
Net increase - Class C........................................... 98,816 583,637 63,853 998,986
----------- -------------- ----------- ---------------

CLASS D SHARES
Sold............................................................. 612,447 5,857,456 9,137 157,184
Reinvestment of dividends........................................ 222 2,523 -- --
Redeemed......................................................... (461,755) (4,435,433) -- --
----------- -------------- ----------- ---------------
Net increase - Class D........................................... 150,914 1,424,546 9,137 157,184
----------- -------------- ----------- ---------------
Net decrease in Fund............................................. (15,437,359) $ (166,513,928) (27,898,254) $ (492,076,963)
----------- -------------- ----------- ---------------
----------- -------------- ----------- ---------------
</TABLE>

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

* For Class A, C and D shares, for the period July 28, 1997 (issue date)
through October 31, 1997.

6. FEDERAL INCOME TAX STATUS

At October 31, 1998, the Fund had a net capital loss carryover of approximately
$385,013,000, which may be used to offset future capital gains to the extent
provided by regulations, which is available through October 31 of the following
years:

<TABLE>
<CAPTION>
AMOUNTS IN THOUSANDS
- --------------------------------------------------
2003 2004 2005 2006
- --------- ----------- ----------- -------------
<S> <C> <C> <C>
$ 3,193 $ 15,875 $ 97,593 $ 268,352
- --------- ----------- -----------
- --------- ----------- -----------
</TABLE>

25
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1998, CONTINUED

As of October 31, 1998, the Fund had temporary book/tax differences primarily
attributable to the mark-to-market of passive foreign investment companies
("PFICs") and capital loss deferrals on wash sales and permanent book/tax
differences primarily attributable to foreign currency losses and tax
adjustments on PFICs sold by the Fund. To reflect reclassifications arising from
the permanent differences, accumulated net realized loss was charged $6,774,952,
paid-in-capital was charged $3,838,542, and dividends in excess of net
investment income was credited $10,613,494.

7. PURPOSES OF AND RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS

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

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

At October 31, 1998, there were outstanding forward contracts used to facilitate
settlement of foreign currency denominated portfolio transactions and manage
foreign currency exposure.

At October 31, 1998, the Fund's cash balance consisted principally of interest
bearing deposits with Chase Manhattan Bank N.A., the Fund's custodian.

8. CHANGE IN SUB-ADVISOR AND INVESTMENT MANAGEMENT FEE

On August 18, 1998, the Fund's shareholders approved a new Sub-Advisory
Agreement with Morgan Stanley Dean Witter Investment Management Inc., formerly
Morgan Stanley Asset Management Inc., an affiliate of the Investment Manager and
Distributor. The new Sub-Advisory Agreement took effect on November 1, 1998.
Additionally, the Investment Manager and the Fund amended the Investment
Management Agreement to reduce each tier of the annual rate paid by the Fund to
the Investment Manager by 0.05%. This rate change also took effect on November
1, 1998.

26
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
FINANCIAL HIGHLIGHTS

Selected ratios and per share data for a share of capital stock outstanding
throughout each period:

<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31
-------------------------------------------------------------------
1998++ 1997*++ 1996 1995 1994
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS B SHARES
SELECTED PER
SHARE DATA:
Net asset value,
beginning of
period.......... $ 12.83 $ 18.89 $ 18.77 $ 21.60 $ 19.80
---------- --------- --------- ----------- ----------
Income (loss)
from investment
operations:
Net investment
income
(loss)........ 0.01 0.01 0.05 0.08 (0.10)
Net realized
and unrealized
gain (loss)... (2.92) (5.77) 0.50 (1.94) 2.22
---------- --------- --------- ----------- ----------
Total income
(loss) from
investment
operations...... (2.91) (5.76) 0.55 (1.86) 2.12
---------- --------- --------- ----------- ----------
Less dividends
and
distributions
from:
Net investment
income........ (0.19) (0.30) (0.43) -- --
Net realized
gain.......... -- -- -- (0.97) (0.32)
---------- --------- --------- ----------- ----------
Total dividends
and
distributions... (0.19) (0.30) (0.43) (0.97) (0.32)
---------- --------- --------- ----------- ----------
Net asset value,
end of period... $ 9.73 $ 12.83 $ 18.89 $ 18.77 $ 21.60
---------- --------- --------- ----------- ----------
---------- --------- --------- ----------- ----------
TOTAL RETURN+.... (22.87)% (31.01)% 3.00% (8.65)% 10.69%
RATIOS TO AVERAGE
NET ASSETS:
Expenses......... 2.65%(1) 2.44% 2.39% 2.45% 2.41%
Net investment
income (loss)... 0.14%(1) 0.03% 0.18% 0.35% (0.70)%
SUPPLEMENTAL DATA:
Net assets, end
of period, in
millions........ $409 $744 $1,624 $1,442 $1,571
Portfolio
turnover rate... % 58 42% 49% 50% 35%
</TABLE>

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

* Prior to July 28, 1997, the Fund issued one class of shares. All shares of
the Fund held prior to that date have been designated Class B 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
27
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
FINANCIAL HIGHLIGHTS, CONTINUED

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR JULY 28, 1997*
ENDED THROUGH
OCTOBER 31, 1998 OCTOBER 31, 1997
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................................. $ 12.86 $ 19.39
------ ------
Income (loss) from investment operations:
Net investment income.............................................. 0.10 --
Net realized and unrealized loss................................... (2.94) (6.53)
------ ------
Total loss from investment operations................................. (2.84) (6.53)
------ ------
Less dividends from net investment income............................. (0.26) --
------ ------
Net asset value, end of period........................................ $ 9.76 $ 12.86
------ ------
------ ------
TOTAL RETURN+......................................................... (22.35)% (33.68)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.90%(3) 1.92%(2)
Net investment income (loss).......................................... 0.89%(3) (0.03)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $3,102 $622
Portfolio turnover rate............................................... 58% 42%
</TABLE>

<TABLE>
<S> <C> <C>
CLASS C SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period.................................. $ 12.83 $ 19.39
------ ------
Income (loss) from investment operations:
Net investment income (loss)....................................... 0.01 (0.04)
Net realized and unrealized loss................................... (2.89) (6.52)
------ ------
Total loss from investment operations................................. (2.88) (6.56)
------ ------
Less dividends from net investment income............................. (0.23) --
------ ------
Net asset value, end of period........................................ $ 9.72 $ 12.83
------ ------
------ ------
TOTAL RETURN+......................................................... (22.68)% (33.83)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 2.65%(3) 2.62%(2)
Net investment income (loss).......................................... 0.14%(3) (0.77)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $1,581 $819
Portfolio turnover rate............................................... 58% 42%
</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
28
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
FINANCIAL HIGHLIGHTS, CONTINUED

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

SELECTED PER SHARE DATA:

Net asset value, beginning of period.................................. $ 12.86 $ 19.39
------ ------

Income (loss) from investment operations:
Net investment income.............................................. 0.07 0.02
Net realized and unrealized loss................................... (2.88) (6.55)
------ ------

Total loss from investment operations................................. (2.81) (6.53)
------ ------

Less dividends from net investment income............................. (0.27) --
------ ------

Net asset value, end of period........................................ $ 9.78 $ 12.86
------ ------
------ ------

TOTAL RETURN+......................................................... (22.14)% (33.68)%(1)

RATIOS TO AVERAGE NET ASSETS:
Expenses.............................................................. 1.65%(3) 1.62%(2)

Net investment income................................................. 1.14%(3) 0.42%(2)

SUPPLEMENTAL DATA:
Net assets, end of period, in thousands............................... $1,565 $118

Portfolio turnover rate............................................... 58% 42%
</TABLE>

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

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

SEE NOTES TO FINANCIAL STATEMENTS
29
<PAGE>

MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND
INC.
REPORT OF INDEPENDENT ACCOUNTANTS

TO THE SHAREHOLDERS AND BOARD OF DIRECTORS
OF MORGAN STANLEY DEAN WITTER PACIFIC 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 Morgan Stanley Dean Witter Pacific
Growth Fund Inc. (the "Fund"), formerly Dean Witter Pacific Growth Fund Inc., at
October 31, 1998, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended and
the financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 1998 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 17, 1998

1998 FEDERAL TAX NOTICE (UNAUDITED)

For the year ended October 31, 1998, the Fund has elected,
pursuant to Section 853 of the Internal Revenue Code, to
pass-through foreign taxes of $0.04 per share to its shareholders,
of which 100% would be allowable as a credit. The Fund generated
net foreign source income of $0.05 per share with respect to this
election.

30
<PAGE>

BOARD OF DIRECTORS MORGAN STANLEY
DEAN WITTER
Michael Bozic PACIFIC
Charles A. Fiumefreddo GROWTH FUND
Edwin J. Garn
John R. Haire
Wayne E. Hedien
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder

OFFICERS [PHOTO]

Charles A. Fiumefreddo
Chairman and Chief Executive Officer

Barry Fink
Vice President, Secretary and General Counsel

Thomas F. Caloia
Treasurer

TRANSFER AGENT

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

INDEPENDENT ACCOUNTANTS ANNUAL REPORT
OCTOBER 31, 1998
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
directors, 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.