MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC, 497, 2000-02-17

MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC
497, 2000-02-17

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<PAGE>
PROSPECTUS - FEBRUARY 4, 2000

Morgan Stanley Dean Witter
PACIFIC GROWTH FUND

[COVER PHOTO]

A MUTUAL FUND THAT SEEKS TO MAXIMIZE THE
CAPITAL APPRECIATION OF ITS INVESTMENTS

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon
the adequacy of this Prospectus. Any representation to the contrary is a
criminal offense.
<PAGE>
CONTENTS

<TABLE>
<S> <C> <C>
The Fund Investment Objective......... 1
Principal Investment
Strategies................... 1
Principal Risks.............. 2
Past Performance............. 3
Fees and Expenses............ 4
Additional Investment
Strategy Information......... 5
Additional Risk
Information.................. 6
Fund Management.............. 7

Shareholder Information Pricing Fund Shares.......... 8
How to Buy Shares............ 8
How to Exchange Shares....... 10
How to Sell Shares........... 11
Distributions................ 13
Tax Consequences............. 14
Share Class Arrangements..... 15

Financial Highlights ............................. 23

Our Family of Funds ............................. Inside Back Cover

THIS PROSPECTUS CONTAINS IMPORTANT INFORMATION
ABOUT THE FUND.
PLEASE READ IT CAREFULLY AND KEEP IT FOR FUTURE
REFERENCE.
</TABLE>

<PAGE>
[Sidebar]
CAPITAL APPRECIATION
AN INVESTMENT OBJECTIVE HAVING THE GOAL OF SELECTING SECURITIES WITH THE
POTENTIAL TO RISE IN PRICE RATHER THAN PAY OUT INCOME.
[End Sidebar]

THE FUND

[ICON] INVESTMENT OBJECTIVE
- --------------------------------------------------------------------------------
Morgan Stanley Dean Witter Pacific Growth Fund seeks to maximize the
capital appreciation of its investments.

[ICON] PRINCIPAL INVESTMENT STRATEGIES
- --------------------------------------------------------------------------------
The Fund will normally invest at least 65% of its total assets in
common stocks (including depository receipts) and other securities of
companies which have a principal place of business in, or which
derive a majority of their revenues from business in, Asia, Australia
and New Zealand. The principal Asian countries include: Japan,
Malaysia, Singapore, Hong Kong, Thailand, the Philippines, India,
Indonesia, Taiwan and South Korea. The Fund's assets will be invested
in at least three countries. The Fund, however, may invest more than
25% of its assets in Japan, Hong Kong, Malaysia, South Korea and/or
Taiwan. Thus, the investment performance of the Fund may be subject
to the social, political and economic events occurring in those
countries to a greater extent than other countries.

The Fund's "Investment Manager," Morgan Stanley Dean Witter Advisors
Inc., and its "Sub-Advisor" - Morgan Stanley Dean Witter Investment
Management Inc. - generally invest Fund assets in companies they
believe have a high rate of earnings growth potential. They also
select securities which, in their view, possess both on an absolute
basis and as compared with other securities around the world,
attractive price/earnings, price/cash flow and price/revenue ratios.

Common stock is a share ownership or equity interest in a
corporation. It may or may not pay dividends, as some companies
reinvest all of their profits back into their businesses, while
others pay out some of their profits to shareholders as dividends. A
depository receipt is generally issued by a bank or financial
institution and represents an ownership interest in the common stock
or other equity securities of a foreign company.

In addition, the Fund may invest in fixed-income securities,
securities of other investment companies, forward currency contracts
and options on currencies. The Fund's fixed-income investments may
include zero coupon securities, which are purchased at a discount and
either (i) pay no interest, or (ii) accrue interest, but make no
payments until maturity.

In pursuing the Fund's investment objective, the Investment Manager
and/or Sub-Advisor have considerable leeway in deciding which
investments they buy, hold or sell on a day-to-day basis - and which
trading strategies they use. For example, the Investment Manager
and/or Sub-Advisor in their discretion may determine to use some
permitted trading strategies while not using others.

1
<PAGE>
[ICON] PRINCIPAL RISKS
- --------------------------------------------------------------------------------
There is no assurance that the Fund will achieve its investment
objective. The Fund's share price will fluctuate with changes in the
market value of the Fund's portfolio securities. When you sell Fund
shares, they may be worth less than what you paid for them and,
accordingly, you can lose money investing in this Fund.

COMMON STOCKS. A principal risk of investing in the Fund is
associated with its common stock investments. In general, stock
values fluctuate in response to activities specific to the company as
well as general market, economic and political conditions. Stock
prices can fluctuate widely in response to these factors.

FOREIGN SECURITIES. The Fund's investments in foreign securities
(including depository receipts) involve risks that are in addition to
the risks associated with domestic securities. One additional risk is
currency risk. While the price of Fund shares is quoted in U.S.
dollars, the Fund generally converts U.S. dollars to a foreign
market's local currency to purchase a security in that market. If the
value of that local currency falls relative to the U.S. dollar, the
U.S. dollar value of the foreign security will decrease. This is true
even if the foreign security's local price remains unchanged.

Foreign securities also have risks related to economic and political
developments abroad, including expropriations, confiscatory taxation,
exchange control regulation, limitation on the use or transfer of
Fund assets and any effects of foreign social, economic or political
instability. In particular, adverse political or economic
developments in the Pacific region and/or a particular country in
which the Fund invests could cause a substantial decline in value of
the portfolio. Foreign companies, in general, are not subject to the
regulatory requirements of U.S. companies and, as such, there may be
less publicly available information about these companies. Moreover,
foreign accounting, auditing and financial reporting standards
generally are different from those applicable to U.S. companies.
Finally, in the event of a default of any foreign debt obligations,
it may be more difficult for the Fund to obtain or enforce a judgment
against the issuers of the securities.

Securities of foreign issuers may be less liquid than comparable
securities of U.S. issuers and, as such, their price changes may be
more volatile. Furthermore, foreign exchanges and broker-dealers are
generally subject to less government and exchange scrutiny and
regulation than their U.S. counterparts. In addition, differences in
clearance and settlement procedures in foreign markets may occasion
delays in settlements of the Fund's trades effected in those markets.
Delays in purchasing securities may result in the Fund losing
investment opportunities. The inability to dispose of foreign
securities due to settlement delays could result in losses to the
Fund due to subsequent declines in value of the securities.

The foreign securities in which the Fund invests may be issued by
companies located in developing countries. Compared to the United
States and other developed countries, developing countries may have
relatively unstable governments, economies based on only a few
industries and securities markets that trade a small number of
securities.

2
<PAGE>
[Sidebar]
ANNUAL TOTAL RETURNS
THIS CHART SHOWS HOW THE PERFORMANCE OF THE FUND'S CLASS B SHARES HAS VARIED
FROM YEAR TO YEAR OVER A 9-YEAR PERIOD.
AVERAGE ANNUAL
TOTAL RETURNS
THIS TABLE COMPARES THE FUND'S AVERAGE ANNUAL RETURNS WITH THOSE OF A BROAD
MEASURE OF MARKET PERFORMANCE OVER TIME. THE FUND'S RETURNS INCLUDE THE MAXIMUM
APPLICABLE SALES CHARGE FOR EACH CLASS AND ASSUME YOU SOLD YOUR SHARES AT THE
END OF EACH PERIOD.
[End Sidebar]

Prices of these securities tend to be especially volatile and, in the
past, securities in these countries have been characterized by
greater potential loss (as well as gain) than securities of companies
located in developed countries.

OTHER RISKS. The performance of the Fund also will depend on whether
the Investment Manager and/or Sub-Advisor are successful in pursuing
the Fund's investment strategy. The Fund is also subject to other
risks from its permissible investments, including the risks
associated with its investments in fixed-income securities, the
securities of other investment companies, forward currency contracts
and options on currencies. For more information about these risks,
see the "Additional Risk Information" section.

Shares of the Fund are not bank deposits and are not guaranteed or
insured by the FDIC or any other government agency.

[ICON] PAST PERFORMANCE
- --------------------------------------------------------------------------------
The bar chart and table below provide some indication of the risks of
investing in the Fund. The Fund's past performance does not indicate
how the Fund will perform in the future.

ANNUAL TOTAL RETURNS - CALENDAR YEARS

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

THE BAR CHART REFLECTS THE PERFORMANCE OF CLASS B SHARES; THE PERFORMANCE OF THE
OTHER CLASSES WILL DIFFER BECAUSE THE CLASSES HAVE DIFFERENT ONGOING FEES. THE
PERFORMANCE INFORMATION IN THE BAR CHART DOES NOT REFLECT THE DEDUCTION OF SALES
CHARGES; IF THESE AMOUNTS WERE REFLECTED, RETURNS WOULD BE LESS THAN SHOWN.

During the periods shown in the bar chart, the highest return for a calendar
quarter was 35.58% (quarter ended December 31, 1993) and the lowest return for a
calendar quarter was -28.63% (quarter ended December 31, 1997).

AVERAGE ANNUAL TOTAL RETURNS (AS OF DECEMBER 31, 1999)

<TABLE>
<CAPTION>
LIFE OF FUND
PAST 1 YEAR PAST 5 YEARS (SINCE 11/30/90)
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------
Class A(1) 60.76% -- --
- ------------------------------------------------------------------------------------
Class B 63.44% -0.28% 7.97%
- ------------------------------------------------------------------------------------
Class C(1) 67.35% -- --
- ------------------------------------------------------------------------------------
Class D(1) 70.04% -- --
- ------------------------------------------------------------------------------------
MSCI World Index(2) 24.93% 19.76% 15.25%
- ------------------------------------------------------------------------------------
</TABLE>

1 Classes A, C and D commenced operations on July 28, 1997.
2 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 performance of
the Index is listed in U.S. dollars and assumes reinvestment of net
dividends. "Net dividends" reflects a reduction in dividends after taking
into account withholding of taxes by certain foreign countries represented
in the Index. The Index does not take into account the Fund's expenses,
fees, or charges. The Index is unmanaged and should not be considered an
investment.

3
<PAGE>
[Sidebar]
SHAREHOLDER FEES
THESE FEES ARE PAID DIRECTLY FROM YOUR INVESTMENT.
ANNUAL FUND
OPERATING EXPENSES
THESE EXPENSES ARE DEDUCTED FROM THE FUND'S ASSETS AND ARE BASED ON EXPENSES
PAID FOR THE FISCAL YEAR ENDED OCTOBER 31, 1999.
[End Sidebar]

[ICON] FEES AND EXPENSES
- --------------------------------------------------------------------------------
The table below briefly describes the fees and expenses that you may
pay if you buy and hold shares of the Fund. The Fund offers four
Classes of shares: Classes A, B, C and D. Each Class has a different
combination of fees, expenses and other features. The Fund does not
charge account or exchange fees. See the "Share Class Arrangements"
section for further fee and expense information.

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS D
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
SHAREHOLDER FEES
- -------------------------------------------------------------------------------------------------------------
Maximum sales charge (load) imposed on purchases (as a percentage of
offering price) 5.25%(1) None None None
- -------------------------------------------------------------------------------------------------------------
Maximum deferred sales charge (load)
(as a percentage based on the lesser of the offering price or net
asset value at redemption) None(2) 5.00%(3) 1.00%(4) None
- -------------------------------------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES
- -------------------------------------------------------------------------------------------------------------
Management fee 0.95% 0.95% 0.95% 0.95%
- -------------------------------------------------------------------------------------------------------------
Distribution and service (12b-1) fees 0.23% 1.00% 1.00% None
- -------------------------------------------------------------------------------------------------------------
Other expenses 0.61% 0.61% 0.61% 0.61%
- -------------------------------------------------------------------------------------------------------------
Total annual Fund operating expenses 1.79% 2.56% 2.56% 1.56%
- -------------------------------------------------------------------------------------------------------------
</TABLE>

1 Reduced for purchases of $25,000 and over.
2 Investments that are not subject to any sales charge at the time of
purchase are subject to a contingent deferred sales charge ("CDSC") of
1.00% that will be imposed if you sell your shares within one year after
purchase, except for certain specific circumstances.
3 The CDSC is scaled down to 1.00% during the sixth year, reaching zero
thereafter. See "Share Class Arrangements" for a complete discussion of the
CDSC.
4 Only applicable if you sell your shares within one year after purchase.

EXAMPLE
This example is intended to help you compare the cost of investing in
the Fund with the cost of investing in other mutual funds.
The example assumes that you invest $10,000 in the Fund, your
investment has a 5% return each year, and the Fund's operating
expenses remain the same. Although your actual costs may be higher or
lower, the tables below show your costs at the end of each period
based on these assumptions depending upon whether or not you sell
your shares at the end of each period.

<TABLE>
<CAPTION>
IF YOU SOLD YOUR SHARES: IF YOU HELD YOUR SHARES:
---------------------------------- ----------------------------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------- ----------------------------------
CLASS A $697 $1,059 $1,444 $2,520 $697 $1,059 $1,444 $2,520
--------------------------------------------------- ----------------------------------
CLASS B $759 $1,096 $1,560 $2,895 $259 $ 796 $1,360 $2,895
--------------------------------------------------- ----------------------------------
CLASS C $359 $ 796 $1,360 $2,895 $259 $ 796 $1,360 $2,895
--------------------------------------------------- ----------------------------------
CLASS D $159 $ 493 $ 850 $1,856 $159 $ 493 $ 850 $1,856
--------------------------------------------------- ----------------------------------
</TABLE>

Long-term shareholders of Class B and Class C may pay more in sales
charges, including distribution fees, than the economic equivalent of
the maximum front-end sales charges permitted by the NASD.

4
<PAGE>
[ICON] ADDITIONAL INVESTMENT STRATEGY INFORMATION
- --------------------------------------------------------------------------------
This section provides additional information relating to the Fund's
principal strategies.

As discussed in the "Principal Investment Strategies" section, the
Fund will normally invest at least 65% of its total assets in common
stocks and other securities of companies which have a principal place
of business in, or which derive a majority of their revenues from
business in, Asia, Australia and New Zealand. These securities mainly
will consist of equity securities, but may also include fixed-income
securities. The fixed-income securities (including zero coupon
securities) may be issued or guaranteed by the governments of
Australia, New Zealand and countries in Asia. In addition, the Fund
may invest in fixed-income securities that are, either alone or in
combination with warrants, options or other rights, convertible to
the common stock of a company.

OTHER GLOBAL SECURITIES. The Fund also may invest up to 35% of its
assets in equity and/or fixed-income and convertible securities of
companies located anywhere in the world, including the United States.
The Fund furthermore may purchase securities issued by various
agencies and instrumentalities of the U.S. Government.

INVESTMENT COMPANIES. The Fund may invest up to 10% of its assets in
securities issued by other investment companies. The Investment
Manager and/or Sub-Advisor may view these investments as necessary to
participate in certain foreign markets where foreigners are
prohibited from investing directly in the securities of individual
companies.

FORWARD CURRENCY CONTRACTS AND OPTIONS ON CURRENCIES. The Fund's
investments also may include forward currency contracts, which
involve the purchase or sale of a specific amount of foreign currency
at the current price with delivery at a specified future date. The
Fund may use these contracts to hedge against adverse price movements
in its portfolio securities and the currencies in which they are
denominated. In addition, the Fund may invest in put and call options
with respect to foreign currencies. Options may be used to seek to
protect against a decline in currency prices or an increase in prices
of currencies that may be purchased.

DEFENSIVE INVESTING. The Fund may take temporary "defensive"
positions in attempting to respond to adverse market conditions. The
Fund may invest any amount of its assets in cash or money market
instruments in a defensive posture when the Investment Manager and/or
Sub-Advisor believe it is advisable to do so. Although taking a
defensive posture is designed to protect the Fund from an anticipated
market downturn, it could have the effect of reducing the benefit
from any upswing in the market. When the Fund takes a defensive
position, it may not achieve its investment objective.

PORTFOLIO TURNOVER. The Fund may engage in active and frequent
trading of its portfolio securities. The Financial Highlights Table
at the end of this Prospectus shows the Fund's portfolio turnover
rates during recent fiscal years. A portfolio turnover rate of 200%,
for example, is equivalent to the Fund buying and selling all of its
securities two

5
<PAGE>
times during the course of the year. A high portfolio turnover rate
(over 100%) could result in high brokerage costs and an increase in
taxable capital gains distributions to the Fund's shareholders. See
the sections on "Distributions" and "Tax Consequences."

The percentage limitations relating to the composition of the Fund's
portfolio apply at the time the Fund acquires an investment and refer
to the Fund's net assets, unless otherwise noted. Subsequent
percentage changes that result from market fluctuations will not
require the Fund to sell any portfolio security. The Fund may change
its principal investment strategies without shareholder approval;
however, you would be notified of any changes.

[ICON] ADDITIONAL RISK INFORMATION
- --------------------------------------------------------------------------------
This section provides additional information relating to the
principal risks of investing in the Fund.

FIXED-INCOME SECURITIES. Principal risks of investing in the Fund are
associated with its fixed-income investments. All fixed-income
securities, such as corporate debt, are subject to two types of risk:
credit risk and interest rate risk. Credit risk refers to the
possibility that the issuer of a security will be unable to make
interest payments and/or repay the principal on its debt.

Interest rate risk refers to fluctuations in the value of a
fixed-income security resulting from changes in the general level of
interest rates. When the general level of interest rates goes up, the
prices of most fixed-income securities go down. When the general
level of interest rates goes down, the prices of most fixed-income
securities go up. (Zero coupon securities are typically subject to
greater price fluctuations than comparable securities that pay
interest.)

FORWARD CURRENCY CONTRACTS AND OPTIONS ON CURRENCIES. The Fund's
participation in forward currency contracts also involves risks. If
the Investment Manager and/or Sub-Advisor employ a strategy that does
not correlate well with the Fund's investments or the currencies in
which the investments are denominated, currency contracts could
result in a loss. The contracts also may increase the Fund's
volatility and may involve a significant risk. In addition, if the
Fund invests in options on currencies, its participation in these
markets would subject the Fund's portfolio to certain risks. The
Investment Manager's and/or Sub-Advisor's predictions of movements in
the direction of the currency markets may be inaccurate, and the
adverse consequences to the Fund (e.g., a reduction in the Fund's net
asset value or a reduction in the amount of income available for
distribution) may leave the Fund in a worse position than if these
strategies were not used. The options may be over-the-counter
options, which are options negotiated with dealers; there is no
secondary market for these investments.

6
<PAGE>
[Sidebar]
MORGAN STANLEY DEAN WITTER ADVISORS INC.
THE INVESTMENT MANAGER IS WIDELY RECOGNIZED AS A LEADER IN THE MUTUAL FUND
INDUSTRY AND TOGETHER WITH MORGAN STANLEY DEAN WITTER SERVICES COMPANY INC., ITS
WHOLLY-OWNED SUBSIDIARY, HAD APPROXIMATELY $145 BILLION IN ASSETS UNDER
MANAGEMENT AS OF DECEMBER 31, 1999.
[End Sidebar]

[ICON] FUND MANAGEMENT
- --------------------------------------------------------------------------------

The Fund has retained the Investment Manager - Morgan Stanley Dean
Witter Advisors Inc. - to provide administrative services, manage its
business affairs and supervise the investment of its assets. The
Investment Manager has, in turn, contracted with the Sub-Advisor -
Morgan Stanley Dean Witter Investment Management Inc. - to invest the
Fund's assets, including the placing of orders for the purchase and
sale of portfolio securities. Morgan Stanley Dean Witter Investment
Management has been the Sub-Advisor of the Fund since November 1,
1998. Prior to that, Morgan Grenfell Investment Services Limited was
the Fund's Sub-Advisor. The Investment Manager 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 its three primary businesses: securities, asset management
and credit services. Its

main business office is located at Two World Trade Center, New York,
NY 10048.

The Sub-Advisor, together with its institutional investment
management affiliates, managed approximately $185 billion as of
December 31, 1999 primarily for employee benefit plans, investment
companies, endowments, foundations and wealthy individuals. The
Sub-Advisor also is a subsidiary of Morgan Stanley Dean Witter & Co.
Its main business office is located at 1221 Avenue of the Americas,
New York, NY 10020.

Ashutosh Sinha, Principal of the Sub-Advisor and John R. Alkire,
Managing Director of the Sub-Advisor and President of Morgan Stanley
Investment Advisory, Japan, each a member of the Sub-Advisor's
emerging markets group, have been the primary portfolio managers of
the Fund since November 1, 1998. Prior to joining the Sub-Advisor in
June 1995, Mr. Sinha was an analyst at SBI Funds Management Ltd.
(1993-1995).

The Fund pays the Investment Manager a monthly management fee as full
compensation for the services and facilities furnished to the Fund,
and for Fund expenses assumed by the Investment Manager. The fee is
based on the Fund's average daily net assets. The Investment Manager
pays the Sub-Advisor monthly compensation equal to 40% of this fee.
For the fiscal year ended October 31, 1999, the Fund accrued total
compensation to the Investment Manager amounting to 0.95% of the
Fund's average daily net assets.

7
<PAGE>
[Sidebar]
CONTACTING A
FINANCIAL ADVISOR
IF YOU ARE NEW TO THE MORGAN STANLEY DEAN WITTER FAMILY OF FUNDS AND WOULD LIKE
TO CONTACT A FINANCIAL ADVISOR, CALL (877) 937-MSDW (TOLL-FREE) FOR THE
TELEPHONE NUMBER OF THE MORGAN STANLEY DEAN WITTER OFFICE NEAREST YOU. YOU MAY
ALSO ACCESS OUR OFFICE LOCATOR ON OUR INTERNET SITE AT:
WWW.MSDW.COM/INDIVIDUAL/FUNDS
[End Sidebar]

SHAREHOLDER INFORMATION

[ICON] PRICING FUND SHARES
- --------------------------------------------------------------------------------
The price of Fund shares (excluding sales charges), called "net asset
value," is based on the value of the Fund's portfolio securities.
While the assets of each Class are invested in a single portfolio of
securities, the net asset value of each Class will differ because the
Classes have different ongoing distribution fees.

The net asset value per share of the Fund is determined once daily at
4 p.m. Eastern time on each day that the New York Stock Exchange is
open (or, on days when the New York Stock Exchange closes prior to
4:00 p.m., at such earlier time). Shares will not be priced on days
that the New York Stock Exchange is closed.

The value of the Fund's portfolio securities is based on the
securities' market price when available. When a market price is not
readily available, including circumstances under which the Investment
Manager and/or Sub-Advisor determines that a security's market price
is not accurate, a portfolio security is valued at its fair value, as
determined under procedures established by the Fund's Board of
Directors. In these cases, the Fund's net asset value will reflect
certain portfolio securities' fair value rather than their market
price. With respect to securities that are primarily listed on
foreign exchanges, the values of the Fund's portfolio securities may
change on days when you will not be able to purchase or sell your
shares.

An exception to the Fund's general policy of using market prices
concerns its short-term debt portfolio securities. Debt securities
with remaining maturities of sixty days or less at the time of
purchase are valued at amortized cost. However, if the cost does not
reflect the securities' market value, these securities will be valued
at their fair value.

[ICON] HOW TO BUY SHARES
- --------------------------------------------------------------------------------
You may open a new account to buy Fund shares or buy additional Fund
shares for an existing account by contacting your Morgan Stanley Dean
Witter Financial Advisor or other authorized financial
representative. Your Financial Advisor will assist you, step-
by-step, with the procedures to invest in the Fund. You may also
purchase shares directly by calling the Fund's transfer agent and
requesting an application.

Because every investor has different immediate financial needs and
long-term investment goals, the Fund offers investors four Classes of
shares: Classes A, B, C and D. Class D shares are only offered to a
limited group of investors. Each Class of shares offers a distinct
structure of sales charges, distribution and service fees, and other
features that are designed to address a variety of needs. Your
Financial Advisor or other authorized financial representative can
help you decide which Class may be most appropriate for you. When
purchasing Fund shares, you must specify which Class of shares you
wish to purchase.

8
<PAGE>
[Sidebar]
EASYINVEST-SM-
A PURCHASE PLAN THAT ALLOWS YOU TO TRANSFER MONEY AUTOMATICALLY FROM YOUR
CHECKING OR SAVINGS ACCOUNT OR FROM A MONEY MARKET FUND ON A SEMI-MONTHLY,
MONTHLY OR QUARTERLY BASIS. CONTACT YOUR MORGAN STANLEY DEAN WITTER FINANCIAL
ADVISOR FOR FURTHER INFORMATION ABOUT THIS SERVICE.
[End Sidebar]

When you buy Fund shares, the shares are purchased at the next share
price calculated (less any applicable front-end sales charge for
Class A shares) after we receive your purchase order. Your payment is
due on the third business day after your purchase order. We reserve
the right to reject any order for the purchase of Fund shares.

<TABLE>
<CAPTION>
MINIMUM INVESTMENT AMOUNTS
--------------------------------------------------------------------------------
MINIMUM INVESTMENT
------------------------
INVESTMENT OPTIONS INITIAL ADDITIONAL
<S> <C> <C> <C>
--------------------------------------------------------------------------------
Regular Accounts $1,000 $100
--------------------------------------------------------------------------------
Individual Retirement
Accounts: Regular IRAs $1,000 $100
Education IRAs $500 $100
--------------------------------------------------------------------------------
EASYINVEST-SM-
(Automatically from your
checking or savings
account or Money Market
Fund) $100* $100*
--------------------------------------------------------------------------------
</TABLE>

* Provided your schedule of investments
totals $1,000 in twelve months.

There is no minimum investment amount if you purchase Fund shares
through: (1) the Investment Manager's mutual fund asset allocation
plan, (2) a program, approved by the Fund's distributor, in which you
pay an asset-based fee for advisory, administrative and/ or brokerage
services, or (3) employer-sponsored employee benefit plan accounts.

INVESTMENT OPTIONS FOR CERTAIN INSTITUTIONAL AND OTHER
INVESTORS/CLASS D SHARES. To be eligible to purchase Class D shares,
you must qualify under one of the investor categories specified in
the "Share Class Arrangements" section of this PROSPECTUS.

SUBSEQUENT INVESTMENTS SENT DIRECTLY TO THE FUND. In addition to
buying additional Fund shares for an existing account by contacting
your Morgan Stanley Dean Witter Financial Advisor, you may send a
check directly to the Fund. To buy additional shares in this manner:

- Write a "letter of instruction" to the Fund specifying the name(s)
on the account, the account number, the social security or tax
identification number, the Class of shares you wish to purchase and
the investment amount (which would include any applicable front-end
sales charge). The letter must be signed by the account owner(s).

- Make out a check for the total amount payable to: Morgan Stanley
Dean Witter Pacific Growth Fund.

- Mail the letter and check to Morgan Stanley Dean Witter Trust FSB
at P.O. Box 1040, Jersey City, NJ 07303.

9
<PAGE>
[ICON] HOW TO EXCHANGE SHARES
- --------------------------------------------------------------------------------

PERMISSIBLE FUND EXCHANGES. You may exchange shares of any Class of
the Fund for the same Class of any other continuously offered
Multi-Class Fund, or for shares of a No-Load Fund, a Money Market
Fund, North American Government Income Trust or Short-Term U.S.
Treasury Trust, without the imposition of an exchange fee. See the
inside back cover of this PROSPECTUS for each Morgan Stanley Dean
Witter Fund's designation as a Multi-Class Fund, No-Load Fund or
Money Market Fund. If a Morgan Stanley Dean Witter Fund is not
listed, consult the inside back cover of that fund's prospectus for
its designation. For purposes of exchanges, shares of FSC funds
(subject to a front-end sales charge) are treated as Class A shares
of a Multi-Class Fund.

Exchanges may be made after shares of the fund acquired by purchase
have been held for thirty days. There is no waiting period for
exchanges of shares acquired by exchange or dividend reinvestment.
The current prospectus for each fund describes its investment
objective(s), policies and investment minimums, and should be read
before investment. Since exchanges are available only into
continuously offered Morgan Stanley Dean Witter Funds, exchanges are
not available into any new Morgan Stanley Dean Witter Fund during its
initial offering period, or when shares of a particular Morgan
Stanley Dean Witter Fund are not being offered for purchase.

EXCHANGE PROCEDURES. You can process an exchange by contacting your
Morgan Stanley Dean Witter Financial Advisor or other authorized
financial representative. Otherwise, you must forward an exchange
privilege authorization form to the Fund's transfer agent - Morgan
Stanley Dean Witter Trust FSB - and then write the transfer agent or
call (800) 869-NEWS to place an exchange order. You can obtain an
exchange privilege authorization form by contacting your Financial
Advisor or other authorized financial representative or by calling
(800) 869-NEWS. If you hold share certificates, no exchanges may be
processed until we have received all applicable share certificates.

An exchange to any Morgan Stanley Dean Witter Fund (except a Money
Market Fund) is made on the basis of the next calculated net asset
values of the funds involved after the exchange instructions are
accepted. When exchanging into a Money Market Fund, the Fund's shares
are sold at their next calculated net asset value and the Money
Market Fund's shares are purchased at their net asset value on the
following business day.

The Fund may terminate or revise the exchange privilege upon required
notice. The check writing privilege is not available for Money Market
Fund shares you acquire in an exchange.

TELEPHONE EXCHANGES. For your protection when calling Morgan Stanley
Dean Witter Trust FSB, we will employ reasonable procedures to
confirm that exchange instructions communicated over the telephone
are genuine. These procedures may include requiring various forms of
personal identification such as name, mailing address, social
security or other tax identification number. Telephone instructions
also may be recorded.

10
<PAGE>
Telephone instructions will be accepted if received by the Fund's
transfer agent between 9:00 a.m. and 4:00 p.m. Eastern time on any
day the New York Stock Exchange is open for business. During periods
of drastic economic or market changes, it is possible that the
telephone exchange procedures may be difficult to implement, although
this has not been the case with the Fund in the past.

MARGIN ACCOUNTS. If you have pledged your Fund shares in a margin
account, contact your Morgan Stanley Dean Witter Financial Advisor or
other authorized financial representative regarding restrictions on
the exchange of such shares.

TAX CONSIDERATIONS OF EXCHANGES. If you exchange shares of the Fund
for shares of another Morgan Stanley Dean Witter Fund there are
important tax considerations. For tax purposes, the exchange out of
the Fund is considered a sale of Fund shares - and the exchange into
the other Fund is considered a purchase. As a result, you may realize
a capital gain or loss.

You should review the "Tax Consequences" section and consult your own
tax professional about the tax consequences of an exchange.

LIMITATIONS ON EXCHANGES. Certain patterns of exchanges may result in
the Fund limiting or prohibiting, at its discretion, additional
purchases and/or exchanges. Determinations in this regard may be made
based on the frequency or dollar amount of previous exchanges. The
Fund will notify you in advance of limiting your exchange privileges.

CDSC CALCULATIONS ON EXCHANGES. See the "Share Class Arrangements"
section of this PROSPECTUS for a discussion of how applicable
contingent deferred sales charges (CDSCs) are calculated for shares
of one Morgan Stanley Dean Witter Fund that are exchanged for shares
of another.

For further information regarding exchange privileges, you should
contact your Morgan Stanley Dean Witter Financial Advisor or call
(800) 869-NEWS.

[ICON] HOW TO SELL SHARES
- --------------------------------------------------------------------------------
You can sell some or all of your Fund shares at any time. If you sell
Class A, Class B or Class C shares, your net sale proceeds are
reduced by the amount of any applicable CDSC. Your shares will be
sold at the next price calculated after we receive your order to sell
as described below.

<TABLE>
<CAPTION>
OPTIONS PROCEDURES
<S> <C>
------------------------------------------------------------------------------------
Contact your To sell (redeem) your shares, simply call your Morgan
Financial Advisor Stanley Dean Witter Financial Advisor or other authorized
financial representative.
------------------------------------------------------------
[ICON] Payment will be sent to the address to which the account is
registered or deposited in your brokerage account.
------------------------------------------------------------------------------------
By Letter You can also sell your shares by writing a "letter of
instruction" that includes:
[ICON]
- your account number;
- the dollar amount or the number of shares you wish to
sell;
- the Class of shares you wish to sell; and
- the signature of each owner as it appears on the account.
------------------------------------------------------------
</TABLE>

11
<PAGE>

<TABLE>
<CAPTION>
OPTIONS PROCEDURES
<S> <C>
------------------------------------------------------------------------------------
By Letter, If you are requesting payment to anyone other than the
continued registered owner(s) or that payment be sent to any address
other than the address of the registered owner(s) or
pre-designated bank account, you will need a signature
guarantee. You can obtain a signature guarantee from an
eligible guarantor acceptable to Morgan Stanley Dean Witter
Trust FSB. (You should contact Morgan Stanley Dean Witter
Trust FSB at (800) 869-NEWS for a determination as to
whether a particular institution is an eligible guarantor.)
A notary public CANNOT provide a signature guarantee.
Additional documentation may be required for shares held by
a corporation, partnership, trustee or executor.
------------------------------------------------------------
Mail the letter to Morgan Stanley Dean Witter Trust FSB at
P.O. Box 983, Jersey City, NJ 07303. If you hold share
certificates, you must return the certificates, along with
the letter and any required additional documentation.
------------------------------------------------------------
A check will be mailed to the name(s) and address in which
the account is registered, or otherwise according to your
instructions.
------------------------------------------------------------------------------------
Systematic If your investment in all of the Morgan Stanley Dean Witter
Withdrawal Plan Family of Funds has a total market value of at least
[ICON] $10,000, you may elect to withdraw amounts of $25 or more,
or in any whole percentage of a Fund's balance (provided the
amount is at least $25), on a monthly, quarterly,
semi-annual or annual basis, from any Fund with a balance of
at least $1,000. Each time you add a Fund to the plan, you
must meet the plan requirements.
------------------------------------------------------------
Amounts withdrawn are subject to any applicable CDSC. A CDSC
may be waived under certain circumstances. See the Class B
waiver categories listed in the "Share Class Arrangements"
section of this PROSPECTUS.
------------------------------------------------------------
To sign up for the Systematic Withdrawal Plan, contact your
Morgan Stanley Dean Witter Financial Advisor or call
(800) 869-NEWS. You may terminate or suspend your plan at
any time. Please remember that withdrawals from the plan are
sales of shares, not Fund "distributions," and ultimately
may exhaust your account balance. The Fund may terminate or
revise the plan at any time.
------------------------------------------------------------------------------------
</TABLE>

PAYMENT FOR SOLD SHARES. After we receive your complete instructions
to sell as described above, a check will be mailed to you within
seven days, although we will attempt to make payment within one
business day. Payment may also be sent to your brokerage account.

Payment may be postponed or the right to sell your shares suspended
under unusual circumstances. If you request to sell shares that were
recently purchased by check, your sale will not be effected until it
has been verified that the check has been honored.

TAX CONSIDERATIONS. Normally, your sale of Fund shares is subject to
federal and state income tax. You should review the "Tax
Consequences" section of this PROSPECTUS and consult your own tax
professional about the tax consequences of a sale.

REINSTATEMENT PRIVILEGE. If you sell Fund shares and have not
previously exercised the reinstatement privilege, you may, within 35
days after the date of sale, invest any portion of the proceeds in
the same Class of Fund shares at their net asset value and receive a
pro rata credit for any CDSC paid in connection with the sale.

12
<PAGE>
[Sidebar]
TARGETED DIVIDENDS-SM-
YOU MAY SELECT TO HAVE YOUR FUND DISTRIBUTIONS AUTOMATICALLY INVESTED IN OTHER
CLASSES OF FUND SHARES OR CLASSES OF ANOTHER MORGAN STANLEY DEAN WITTER FUND
THAT YOU OWN. CONTACT YOUR MORGAN STANLEY DEAN WITTER FINANCIAL ADVISOR FOR
FURTHER INFORMATION ABOUT THIS SERVICE.
[End Sidebar]
INVOLUNTARY SALES. The Fund reserves the right, on sixty days'
notice, to sell the shares of any shareholder (other than shares held
in an IRA or 403(b) Custodial Account) whose shares, due to sales by
the shareholder, have a value below $100, or in the case of an
account opened through EASYINVEST-SM-, if after 12 months the
shareholder has invested less than $1,000 in the account.

However, before the Fund sells your shares in this manner, we will
notify you and allow you sixty days to make an additional investment
in an amount that will increase the value of your account to at least
the required amount before the sale is processed. No CDSC will be
imposed on any involuntary sale.

[ICON] DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Fund passes substantially all of its earnings from income and
capital gains along to its investors as "distributions." The Fund
earns income from stocks and interest from fixed-income investments.
These amounts are passed along to Fund shareholders as "income
dividend distributions." The Fund realizes capital gains whenever it
sells securities for a higher price than it paid for them. These
amounts may be passed along as "capital gain distributions."

The Fund declares income dividends separately for each Class.
Distributions paid on Class A and Class D shares usually will be
higher than for Class B and Class C because distribution fees that
Class B and Class C pay are higher. Normally, income dividends are
distributed annually. Capital gains, if any, are usually distributed
in December. The Fund may at times make payments from sources other
than income or capital gains that represent a return of a portion of
your investment.

Distributions are reinvested automatically in additional shares of
the same Class and automatically credited to your account, unless you
request in writing that all distributions be paid in cash. If you
elect the cash option, the Fund will mail a check to you no later
than seven business days after the distribution is declared. No
interest will accrue on uncashed checks. If you wish to change how
your distributions are paid, your request should be received by the
Fund's transfer agent, Morgan Stanley Dean Witter Trust FSB, at least
five business days prior to the record date of the distributions.

13
<PAGE>
[ICON] TAX CONSEQUENCES
- --------------------------------------------------------------------------------
As with any investment, you should consider how your Fund investment
will be taxed. The tax information in this PROSPECTUS is provided as
general information. You should consult your own tax professional
about the tax consequences of an investment in the Fund.

Unless your investment in the Fund is through a tax-deferred
retirement account, such as a 401(k) plan or IRA, you need to be
aware of the possible tax consequences when:

- The Fund makes distributions; and

- You sell Fund shares, including an exchange to another Morgan
Stanley Dean Witter Fund.

TAXES ON DISTRIBUTIONS. Your distributions are normally subject to
federal and state income tax when they are paid, whether you take
them in cash or reinvest them in Fund shares. A distribution also may
be subject to local income tax. Any income dividend distributions and
any short-term capital gain distributions are taxable to you as
ordinary income. Any long-term capital gain distributions are taxable
as long-term capital gains, no matter how long you have owned shares
in the Fund.

Every January, you will be sent a statement (IRS Form 1099-DIV)
showing the taxable distributions paid to you in the previous year.
The statement provides information on your dividends and capital
gains for tax purposes.

TAXES ON SALES. Your sale of Fund shares normally is subject to
federal and state income tax and may result in a taxable gain or loss
to you. A sale also may be subject to local income tax. Your exchange
of Fund shares for shares of another Morgan Stanley Dean Witter Fund
is treated for tax purposes like a sale of your original shares and a
purchase of your new shares. Thus, the exchange may, like a sale,
result in a taxable gain or loss to you and will give you a new tax
basis for your new shares.

When you open your Fund account, you should provide your social
security or tax identification number on your investment application.
By providing this information, you will avoid being subject to a
federal backup withholding tax of 31% on taxable distributions and
redemption proceeds. Any withheld amount would be sent to the IRS as
an advance tax payment.

14
<PAGE>
[ICON] SHARE CLASS ARRANGEMENTS
- --------------------------------------------------------------------------------
The Fund offers several Classes of shares having different
distribution arrangements designed to provide you with different
purchase options according to your investment needs. Your Morgan
Stanley Dean Witter Financial Advisor or other authorized financial
representative can help you decide which Class may be appropriate for
you.

The general public is offered three Classes: Class A shares, Class B
shares and Class C shares, which differ principally in terms of sales
charges and ongoing expenses. A fourth Class, Class D shares, is
offered only to a limited category of investors.

Shares that you acquire through reinvested distributions will not be
subject to any front-end sales charge or CDSC - contingent deferred
sales charge. Sales personnel may receive different compensation for
selling each Class of shares. The sales charges applicable to each
Class provide for the distribution financing of shares of that Class.

The chart below compares the sales charge and maximum annual 12b-1
fee applicable to each Class:

<TABLE>
<CAPTION>
CLASS SALES CHARGE MAXIMUM ANNUAL 12B-1 FEE
<S> <C> <C>
------------------------------------------------------------------------------------------------------------------
A Maximum 5.25% initial sales charge reduced for purchase
of $25,000
or more; shares sold without an initial sales charge are
generally
subject to a 1.0% CDSC during the first year 0.25%
------------------------------------------------------------------------------------------------------------------
B Maximum 5.0% CDSC during the first year decreasing to 0%
after six years 1.0%
------------------------------------------------------------------------------------------------------------------
C 1.0% CDSC during the first year 1.0%
------------------------------------------------------------------------------------------------------------------
D None None
------------------------------------------------------------------------------------------------------------------
</TABLE>

CLASS A SHARES Class A shares are sold at net asset value plus an
initial sales charge of up to 5.25%. The initial sales charge is
reduced for purchases of $25,000 or more according to the schedule
below. Investments of $1 million or more are not subject to an initial
sales charge, but are generally subject to a contingent deferred sales
charge, or CDSC, of 1.0% on sales made within one year after the last
day of the month of purchase. The CDSC will be assessed in the same
manner and with the same CDSC waivers as with Class B shares. Class A
shares are also subject to a distribution (12b-1) fee of up to 0.25% of
the average daily net assets of the Class.

15
<PAGE>
[Sidebar]
FRONT-END SALES
CHARGE OR FSC
AN INITIAL SALES CHARGE YOU PAY WHEN PURCHASING CLASS A SHARES THAT IS BASED ON
A PERCENTAGE OF THE OFFERING PRICE. THE PERCENTAGE DECLINES BASED UPON THE
DOLLAR VALUE OF CLASS A SHARES YOU PURCHASE. WE OFFER THREE WAYS TO REDUCE YOUR
CLASS A SALES CHARGES - THE COMBINED PURCHASE PRIVILEGE, RIGHT OF ACCUMULATION
AND LETTER OF INTENT.
[End Sidebar]

The offering price of Class A shares includes a sales charge
(expressed as a percentage of the offering price) on a single
transaction as shown in the following table:

<TABLE>
<CAPTION>
FRONT-END SALES CHARGE
------------------------------------------------
AMOUNT OF PERCENTAGE OF PUBLIC APPROXIMATE PERCENTAGE
SINGLE TRANSACTION OFFERING PRICE OF NET AMOUNT INVESTED
<S> <C> <C>
----------------------------------------------------------------------------------
Less than $25,000 5.25% 5.54%
----------------------------------------------------------------------------------
$25,000 but less than
$50,000 4.75% 4.99%
----------------------------------------------------------------------------------
$50,000 but less than
$100,000 4.00% 4.17%
----------------------------------------------------------------------------------
$100,000 but less than
$250,000 3.00% 3.09%
----------------------------------------------------------------------------------
$250,000 but less than
$1 million 2.00% 2.04%
----------------------------------------------------------------------------------
$1 million and over 0 0
----------------------------------------------------------------------------------
</TABLE>

The reduced sales charge schedule is applicable to
purchases of Class A shares in a single transaction
by:

- A single account (including an individual, trust or fiduciary
account).

- Family member accounts (limited to husband, wife and children under
the age of 21).

- Pension, profit sharing or other employee benefit plans of
companies and their affiliates.

- Tax-exempt organizations.

- Groups organized for a purpose other than to buy mutual fund
shares.

COMBINED PURCHASE PRIVILEGE. You also will have the benefit of
reduced sales charges by combining purchases of Class A shares of the
Fund in a single transaction with purchases of Class A shares of
other Multi-Class Funds and shares of FSC Funds.

RIGHT OF ACCUMULATION. You also may benefit from a reduction of sales
charges if the cumulative net asset value of Class A shares of the
Fund purchased in a single transaction, together with shares of other
Funds you currently own which were previously purchased at a price
including a front-end sales charge (including shares acquired through
reinvestment of distributions), amounts to $25,000 or more. Also, if
you have a cumulative net asset value of all your Class A and
Class D shares equal to at least $5 million (or $25 million for
certain employee benefit plans), you are eligible to purchase
Class D shares of any Fund subject to the Fund's minimum initial
investment requirement.

You must notify your Morgan Stanley Dean Witter Financial Advisor or
other authorized financial representative (or Morgan Stanley Dean
Witter Trust FSB if you purchase directly through the Fund), at the
time a purchase order is placed, that the purchase

16
<PAGE>
qualifies for the reduced charge under the Right of Accumulation.
Similar notification must be made in writing when an order is placed
by mail. The reduced sales charge will not be granted if: (i)
notification is not furnished at the time of the order; or (ii) a
review of the records of Dean Witter Reynolds or other authorized
dealer of Fund shares or the Fund's transfer agent does not confirm
your represented holdings.

LETTER OF INTENT. The schedule of reduced sales charges for larger
purchases also will be available to you if you enter into a written
"letter of intent." A letter of intent provides for the purchase of
Class A shares of the Fund or other Multi-Class Funds or shares of
FSC Funds within a thirteen-month period. The initial purchase under
a letter of intent must be at least 5% of the stated investment goal.
To determine the applicable sales charge reduction, you may also
include: (1) the cost of shares of other Morgan Stanley Dean Witter
Funds which were previously purchased at a price including a
front-end sales charge during the 90-day period prior to the
distributor receiving the letter of intent, and (2) the cost of
shares of other Funds you currently own acquired in exchange for
shares of Funds purchased during that period at a price including a
front-end sales charge. You can obtain a letter of intent by
contacting your Morgan Stanley Dean Witter Financial Advisor or other
authorized financial representative or by calling (800) 869-NEWS. If
you do not achieve the stated investment goal within the
thirteen-month period, you are required to pay the difference between
the sales charges otherwise applicable and sales charges actually
paid, which may be deducted from your investment.

OTHER SALES CHARGE WAIVERS. In addition to investments of $1 million
or more, your purchase of Class A shares is not subject to a
front-end sales charge (or CDSC upon sale) if your account qualifies
under one of the following categories:

- A trust for which Morgan Stanley Dean Witter Trust FSB provides
discretionary trustee services.

- Persons participating in a fee-based investment program (subject to
all of its terms and conditions, including termination fees,
mandatory sale or transfer restrictions on termination) approved by
the Fund's distributor pursuant to which they pay an asset-based
fee for investment advisory, administrative and/or brokerage
services.

- Employer-sponsored employee benefit plans, whether or not qualified
under the Internal Revenue Code, for which Morgan Stanley Dean
Witter Trust FSB serves as trustee or Dean Witter Reynolds'
Retirement Plan Services serves as recordkeeper under a written
Recordkeeping Services Agreement ("MSDW Eligible Plans") which have
at least 200 eligible employees.

- An MSDW Eligible Plan whose Class B shares have converted to
Class A shares, regardless of the plan's asset size or number of
eligible employees.

17
<PAGE>
[Sidebar]
CONTINGENT DEFERRED SALES CHARGE OR CDSC
A FEE YOU PAY WHEN YOU SELL SHARES OF CERTAIN MORGAN STANLEY DEAN WITTER FUNDS
PURCHASED WITHOUT AN INITIAL SALES CHARGE. THIS FEE DECLINES THE LONGER YOU HOLD
YOUR SHARES AS SET FORTH IN THE TABLE.
[End Sidebar]

- A client of a Morgan Stanley Dean Witter Financial Advisor who
joined us from another investment firm within six months prior to
the date of purchase of Fund shares, and you used the proceeds from
the sale of shares of a proprietary mutual fund of that Financial
Advisor's previous firm that imposed either a front-end or deferred
sales charge to purchase Class A shares, provided that: (1) you
sold the shares not more than 60 days prior to the purchase of Fund
shares, and (2) the sale proceeds were maintained in the interim in
cash or a money market fund.

- Current or retired Directors/Trustees of the Morgan Stanley Dean
Witter Funds, such persons' spouses and children under the age of
21, and trust accounts for which any of such persons is a
beneficiary.

- Current or retired directors, officers and employees of Morgan
Stanley Dean Witter & Co. and any of its subsidiaries, such
persons' spouses and children under the age of 21, and trust
accounts for which any of such persons is a beneficiary.

CLASS B SHARES Class B shares are offered at net asset value with no
initial sales charge but are subject to a contingent deferred sales
charge, or CDSC, as set forth in the table below. For the purpose of
calculating the CDSC, shares are deemed to have been purchased on the
last day of the month during which they were purchased.

<TABLE>
<CAPTION>
YEAR SINCE PURCHASE PAYMENT MADE CDSC AS A PERCENTAGE OF AMOUNT REDEEMED
<S> <C>
-----------------------------------------------------------------------------
First 5.0%
-----------------------------------------------------------------------------
Second 4.0%
-----------------------------------------------------------------------------
Third 3.0%
-----------------------------------------------------------------------------
Fourth 2.0%
-----------------------------------------------------------------------------
Fifth 2.0%
-----------------------------------------------------------------------------
Sixth 1.0%
-----------------------------------------------------------------------------
Seventh and thereafter None
-----------------------------------------------------------------------------
</TABLE>

Each time you place an order to sell or exchange shares, shares with
no CDSC will be sold or exchanged first, then shares with the lowest
CDSC will be sold or exchanged next. For any shares subject to a
CDSC, the CDSC will be assessed on an amount equal to the lesser of
the current market value or the cost of the shares being sold.

CDSC WAIVERS. A CDSC, if otherwise applicable, will be waived in the
case of:

- Sales of shares held at the time you die or become disabled (within
the definition in Section 72(m)(7) of the Internal Revenue Code
which relates to the ability to engage in gainful employment), if
the shares are: (i) registered either in your name (not a trust) or
in the names of you and your spouse as joint tenants with right of
survivorship; or (ii) held in a qualified corporate or
self-employed retirement plan, IRA or 403(b) Custodial Account,
provided in either case that the sale is requested within one year
of your death or initial determination of disability.

18
<PAGE>

- Sales in connection with the following retirement plan
"distributions:" (i) lump-sum or other distributions from a
qualified corporate or self-employed retirement plan following
retirement (or, in the case of a "key employee" of a "top heavy"
plan, following attainment of age 59 1/2); (ii) distributions from
an IRA or 403(b) Custodial Account following attainment of age
59 1/2; or (iii) a tax-free return of an excess IRA contribution (a
"distribution" does not include a direct transfer of IRA, 403(b)
Custodial Account or retirement plan assets to a successor
custodian or trustee).

- Sales of shares held for you as a participant in an MSDW Eligible
Plan.

- Sales of shares in connection with the Systematic Withdrawal Plan
of up to 12% annually of the value of each Fund from which plan
sales are made. The percentage is determined on the date you
establish the Systematic Withdrawal Plan and based on the next
calculated share price. You may have this CDSC waiver applied in
amounts up to 1% per month, 3% per quarter, 6% semi-annually or 12%
annually. Shares with no CDSC will be sold first, followed by those
with the lowest CDSC. As such, the waiver benefit will be reduced
by the amount of your shares that are not subject to a CDSC. If you
suspend your participation in the plan, you may later resume plan
payments without requiring a new determination of the account value
for the 12% CDSC waiver.

- Sales of shares if you simultaneously invest the proceeds in the
Investment Manager's mutual fund asset allocation program, pursuant
to which investors pay an asset-based fee. Any shares you acquire
in connection with the Investment Manager's mutual fund asset
allocation program are subject to all of the terms and conditions
of that program, including termination fees, mandatory sale or
transfer restrictions on termination.

All waivers will be granted only following the Fund's distributor
receiving confirmation of your entitlement. If you believe you are
eligible for a CDSC waiver, please contact your Financial Advisor or
call (800) 869-NEWS.

DISTRIBUTION FEE. Class B shares are subject to an annual
distribution (12b-1) fee of 1.0% of the lesser of: (a) the average
daily aggregate gross purchases by all shareholders of the Fund's
Class B shares since the inception of the Fund (not including
reinvestment of dividends or capital gains distributions), less the
average daily aggregate net asset value of the Fund's Class B shares
sold by all shareholders since the Fund's inception upon which a CDSC
has been imposed or waived, or (b) the average daily net assets of
Class B.

CONVERSION FEATURE. After ten (10) years, Class B shares will convert
automatically to Class A shares of the Fund with no initial sales
charge. The ten year period runs from the last day of the month in
which the shares were purchased, or in the case of Class B shares
acquired through an exchange, from the last day of the month in which
the original Class B shares were purchased; the shares will convert
to Class A shares based on their relative net asset values in the
month following the ten year period. At the same

19
<PAGE>
time, an equal proportion of Class B shares acquired through
automatically reinvested distributions will convert to Class A shares
on the same basis. (Class B shares held before May 1, 1997, however,
will convert to Class A shares in May 2007.)

In the case of Class B shares held in an MSDW Eligible Plan, the plan
is treated as a single investor and all Class B shares will convert
to Class A shares on the conversion date of the Class B shares of a
Morgan Stanley Dean Witter Fund purchased by that plan.

Currently, the Class B share conversion is not a taxable event; the
conversion feature may be cancelled if it is deemed a taxable event
in the future by the Internal Revenue Service.

If you exchange your Class B shares for shares of a Money Market
Fund, a No-Load Fund, North American Government Income Trust or
Short-Term U.S. Treasury Trust, the holding period for conversion is
frozen as of the last day of the month of the exchange and resumes on
the last day of the month you exchange back into Class B shares.

EXCHANGING SHARES SUBJECT TO A CDSC. There are special considerations
when you exchange Fund shares that are subject to a CDSC. When
determining the length of time you held the shares and the
corresponding CDSC rate, any period (starting at the end of the
month) during which you held shares of a fund that does NOT charge a
CDSC WILL NOT BE COUNTED. Thus, in effect the "holding period" for
purposes of calculating the CDSC is frozen upon exchanging into a
fund that does not charge a CDSC.

For example, if you held Class B shares of the Fund for one year,
exchanged to Class B of another Morgan Stanley Dean Witter
Multi-Class Fund for another year, then sold your shares, a CDSC rate
of 4% would be imposed on the shares based on a two year holding
period -- one year for each Fund. However, if you had exchanged the
shares of the Fund for a Money Market Fund (which does not charge a
CDSC) instead of the Multi-Class Fund, then sold your shares, a CDSC
rate of 5% would be imposed on the shares based on a one year holding
period. The one year in the Money Market Fund would not be counted.
Nevertheless, if shares subject to a CDSC are exchanged for a Fund
that does not charge a CDSC, you will receive a credit when you sell
the shares equal to the distribution (12b-1) fees, if any, you paid
on those shares while in that Fund up to the amount of any applicable
CDSC.

In addition, shares that are exchanged into or from a Morgan Stanley
Dean Witter Fund subject to a higher CDSC rate will be subject to the
higher rate, even if the shares are re-exchanged into a Fund with a
lower CDSC rate.

CLASS C SHARES Class C shares are sold at net asset value with no
initial sales charge but are subject to a CDSC of 1.0% on sales made
within one year after the last day of the month of purchase. The CDSC
will be assessed in the same manner and with the same CDSC waivers as
with Class B shares.

20
<PAGE>
DISTRIBUTION FEE. Class C shares are subject to an annual
distribution (12b-1) fee of 1.0% of the average daily net assets of
that Class. The Class C shares' distribution fee may cause that
Class to have higher expenses and pay lower dividends than Class A or
Class D shares. Unlike Class B shares, Class C shares have no
conversion feature and, accordingly, an investor that purchases
Class C shares may be subject to distribution (12b-1) fees applicable
to Class C shares for an indefinite period.

CLASS D SHARES Class D shares are offered without any sales charge on
purchases or sales and without any distribution (12b-1) fee. Class D
shares are offered only to investors meeting an initial investment
minimum of $5 million ($25 million for MSDW Eligible Plans) and the
following investor categories:

- Investors participating in the Investment Manager's mutual fund
asset allocation program (subject to all of its terms and
conditions, including termination fees, mandatory sale or transfer
restrictions on termination) pursuant to which they pay an
asset-based fee.

- Employee benefit plans maintained by Morgan Stanley Dean Witter &
Co. or any of its subsidiaries for the benefit of certain employees
of Morgan Stanley Dean Witter & Co. and its subsidiaries.

- Certain unit investment trusts sponsored by Dean Witter Reynolds.

- Certain other open-end investment companies whose shares are
distributed by the Fund's distributor.

- Investors who were shareholders of the Dean Witter Retirement
Series on September 11, 1998 for additional purchases for their
former Dean Witter Retirement Series accounts.

MEETING CLASS D ELIGIBILITY MINIMUMS. To meet the $5 million
($25 million for certain MSDW Eligible Plans) initial investment to
qualify to purchase Class D shares you may combine: (1) purchases in
a single transaction of Class D shares of the Fund and other Morgan
Stanley Dean Witter Multi-Class Funds and/or (2) previous purchases
of Class A and Class D shares of Multi-Class Funds and shares of FSC
Funds you currently own, along with shares of Morgan Stanley Dean
Witter Funds you currently own that you acquired in exchange for
those shares.

21
<PAGE>
NO SALES CHARGES FOR REINVESTED CASH DISTRIBUTIONS If you receive a
cash payment representing an income dividend or capital gain and you
reinvest that amount in the applicable Class of shares by returning the
check within 30 days of the payment date, the purchased shares would
not be subject to an initial sales charge or CDSC.

PLAN OF DISTRIBUTION (RULE 12B-1 FEES) The Fund has adopted a Plan of
Distribution in accordance with Rule 12b-1 under the Investment Company
Act of 1940 with respect to the distribution of Class A, Class B and
Class C shares. The Plan allows the Fund to pay distribution fees for
the sale and distribution of these shares. It also allows the Fund to
pay for services to shareholders of Class A, Class B and Class C
shares. Because these fees are paid out of the Fund's assets on an
ongoing basis, over time these fees will increase the cost of your
investment in these Classes and may cost you more than paying other
types of sales charges.

22
<PAGE>
FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the Fund's
financial performance for the past 5 fiscal years of the Fund throughout each
year. Certain information reflects financial results for a single Fund share
throughout each year. The total returns in the table represent the rate an
investor would have earned or lost on an investment in the Fund (assuming
reinvestment of all dividends and distributions).

This information has been audited by PricewaterhouseCoopers LLP, independent
accountants, whose report, along with the Fund's financial statements, is
included in the annual report, which is available upon request.

<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31, 1999++ 1998++ 1997*++ 1996 1995
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
- ------------------------------------------------------------------------------------------------------------------------

SELECTED PER SHARE DATA:
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 9.73 $12.83 $18.89 $18.77 $21.60
- ------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.06) 0.01 0.01 0.05 0.08
Net realized and unrealized gain (loss) 4.72 (2.92) (5.77) 0.50 (1.94)
-------- -------- -------- ---------- ----------
Total income (loss) from investment operations 4.66 (2.91) (5.76) 0.55 (1.86)
- ------------------------------------------------------------------------------------------------------------------------
LESS DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income -- (0.19) (0.30) (0.43) --
Net realized gain -- -- -- -- (0.97)
-------- -------- -------- ---------- ----------
Total dividends and distributions -- (0.19) (0.30) (0.43) (0.97)
- ------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $14.39 $ 9.73 $12.83 $18.89 $18.77
- ------------------------------------------------------------------------------------------------------------------------

TOTAL RETURN+ 47.89% (22.87)% (31.01)% 3.00% (8.65)%
- ------------------------------------------------------------------------------------------------------------------------

RATIOS TO AVERAGE NET ASSETS:
- ------------------------------------------------------------------------------------------------------------------------
Expenses 2.56%(1) 2.65%(1) 2.44% 2.39% 2.45%
- ------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.43)%(1) 0.14%(1) 0.03% 0.18% 0.35%
- ------------------------------------------------------------------------------------------------------------------------

SUPPLEMENTAL DATA:
- ------------------------------------------------------------------------------------------------------------------------
Net assets, end of period, in thousands $633,216 $408,990 $744,133 $1,624,468 $1,441,549
- ------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 128% 58% 42% 49% 50%
- ------------------------------------------------------------------------------------------------------------------------
</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.
+ Does not reflect the deduction of sales charge. Calculated based on the net
asset value as of the last business day of the period.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
(1) Reflects overall Fund ratios for investment income and non-class specific
expenses.

23
<PAGE>

<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE PERIOD
OCTOBER 31, JULY 28, 1997*
-------------------- THROUGH
1999 1998 OCTOBER 31, 1997
<S> <C> <C> <C>
- -------------------------------------------------------------------------------
CLASS A SHARES++
- -------------------------------------------------------------------------------

SELECTED PER SHARE DATA:
- -------------------------------------------------------------------------------
Net asset value, beginning of
period $ 9.76 $12.86 $19.39
- -------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income 0.05 0.10 --
Net realized and unrealized
gain (loss) 4.73 (2.94) (6.53)
------- ------- -------
Total income (loss) from
investment operations 4.78 (2.84) (6.53)
- -------------------------------------------------------------------------------
Less dividends from net investment
income -- (0.26) --
- -------------------------------------------------------------------------------
Net asset value, end of period $14.54 $ 9.76 $12.86
- -------------------------------------------------------------------------------

TOTAL RETURN+ 48.98% (22.35)% (33.68)%(1)
- -------------------------------------------------------------------------------

RATIOS TO AVERAGE NET ASSETS:
- -------------------------------------------------------------------------------
Expenses 1.79%(3) 1.90%(3) 1.92%(2)
- -------------------------------------------------------------------------------
Net investment income (loss) 0.34%(3) 0.89%(3) (0.03)%(2)
- -------------------------------------------------------------------------------

SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------
Net assets, end of period, in
thousands $10,048 $3,102 $ 622
- -------------------------------------------------------------------------------
Portfolio turnover rate 128% 58% 42%
- -------------------------------------------------------------------------------
</TABLE>

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

24
<PAGE>

<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE PERIOD
OCTOBER 31, JULY 28, 1997*
-------------------- THROUGH
1999 1998 OCTOBER 31, 1997
<S> <C> <C> <C>
- -------------------------------------------------------------------------------
CLASS C SHARES++
- -------------------------------------------------------------------------------

SELECTED PER SHARE DATA:
- -------------------------------------------------------------------------------
Net asset value, beginning of
period $ 9.72 $12.83 $19.39
- -------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income (loss) (0.05) 0.01 (0.04)
Net realized and unrealized
gain (loss) 4.71 (2.89) (6.52)
------- ------- -------
Total income (loss) from
investment operations 4.66 (2.88) (6.56)
- -------------------------------------------------------------------------------
Less dividends from net investment
income -- (0.23) --
- -------------------------------------------------------------------------------
Net asset value, end of period $14.38 $ 9.72 $12.83
- -------------------------------------------------------------------------------

TOTAL RETURN+ 47.94% (22.68)% (33.83)%(1)
- -------------------------------------------------------------------------------

RATIOS TO AVERAGE NET ASSETS:
- -------------------------------------------------------------------------------
Expenses 2.56%(3) 2.65%(3) 2.62%(2)
- -------------------------------------------------------------------------------
Net investment income (loss) (0.43)%(3) 0.14%(3) (0.77)%(2)
- -------------------------------------------------------------------------------

SUPPLEMENTAL DATA:
- -------------------------------------------------------------------------------
Net assets, end of period, in
thousands $12,278 $1,581 $ 819
- -------------------------------------------------------------------------------
Portfolio turnover rate 128% 58% 42%
- -------------------------------------------------------------------------------
</TABLE>

25
<PAGE>

<TABLE>
<CAPTION>
FOR THE YEAR ENDED FOR THE PERIOD
OCTOBER 31, JULY 28, 1997*
-------------------- THROUGH
1999 1998 OCTOBER 31, 1997
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
CLASS D SHARES++
- --------------------------------------------------------------------------------

SELECTED PER SHARE DATA:
- --------------------------------------------------------------------------------
Net asset value, beginning of
period $ 9.78 $12.86 $19.39
- --------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income 0.06 0.07 0.02
Net realized and unrealized
gain (loss) 4.77 (2.88) (6.55)
------- ------- -------
Total income (loss) from
investment operations 4.83 (2.81) (6.53)
- --------------------------------------------------------------------------------
Less dividends from net investment
income -- (0.27) --
- --------------------------------------------------------------------------------
Net asset value, end of period $14.61 $ 9.78 $12.86
- --------------------------------------------------------------------------------

TOTAL RETURN+ 49.39% (22.14)% (33.68)%(1)
- --------------------------------------------------------------------------------

RATIOS TO AVERAGE NET ASSETS:
- --------------------------------------------------------------------------------
Expenses 1.56%(3) 1.65%(3) 1.62%(2)
- --------------------------------------------------------------------------------
Net investment income 0.57%(3) 1.14%(3) 0.42%(2)
- --------------------------------------------------------------------------------

SUPPLEMENTAL DATA:
- --------------------------------------------------------------------------------
Net assets, end of period, in
thousands $2,489 $1,565 $ 118
- --------------------------------------------------------------------------------
Portfolio turnover rate 128% 58% 42%
- --------------------------------------------------------------------------------
</TABLE>

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

26
<PAGE>
NOTES

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

27
<PAGE>
NOTES

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

28
<PAGE>
NOTES

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

29
<PAGE>
MORGAN STANLEY DEAN WITTER
FAMILY OF FUNDS
The Morgan Stanley Dean Witter Family of Funds offers
investors a wide range of investment choices. Come on in
and meet the family!
- --------------------------------------------------------------------------------
GROWTH FUNDS
- ---------------------------------

GROWTH FUNDS
Aggressive Equity Fund
American Opportunities Fund
Capital Growth Securities
Developing Growth Securities
Growth Fund
Market Leader Trust
Mid-Cap Equity Trust
Next Generation Trust
Small Cap Growth Fund
Special Value Fund
21st Century Trend Fund

THEME FUNDS
Financial Services Trust
Health Sciences Trust
Information Fund
Natural Resource Development Securities

GLOBAL/INTERNATIONAL FUNDS
Competitive Edge Fund - "Best Ideas"
Portfolio
European Growth Fund
Fund of Funds - International Portfolio
International Fund
International SmallCap Fund
Japan Fund
Latin American Growth Fund
Pacific Growth Fund

- --------------------------------------------------------------------------------
GROWTH AND INCOME FUNDS
- ---------------------------------
Balanced Growth Fund
Balanced Income Fund
Convertible Securities Trust
Dividend Growth Securities
Equity Fund
Fund of Funds - Domestic Portfolio
Income Builder Fund
Mid-Cap Dividend Growth Securities
S&P 500 Index Fund
S&P 500 Select Fund
Strategist Fund
Total Market Index Fund
Total Return Trust
Value Fund
Value-Added Market Series/Equity Portfolio

THEME FUNDS
Real Estate Fund
Utilities Fund

GLOBAL FUNDS
Global Dividend Growth Securities
Global Utilities Fund

- --------------------------------------------------------------------------------
INCOME FUNDS
- ---------------------------------

GOVERNMENT INCOME FUNDS
Federal Securities Trust
Short-Term U.S. Treasury Trust
U.S. Government Securities Trust

DIVERSIFIED INCOME FUNDS
Diversified Income Trust

CORPORATE INCOME FUNDS
High Yield Securities
Intermediate Income Securities
Short-Term Bond Fund (NL)

GLOBAL INCOME FUNDS
North American Government Income Trust
World Wide Income Trust

TAX-FREE INCOME FUNDS
California Tax-Free Income Fund
Hawaii Municipal Trust (FSC)
Limited Term Municipal Trust (NL)
Multi-State Municipal Series Trust (FSC)
New York Tax-Free Income Fund
Tax-Exempt Securities Trust

- --------------------------------------------------------------------------------
MONEY MARKET FUNDS
- ---------------------------------

TAXABLE MONEY MARKET FUNDS
Liquid Asset Fund (MM)
U.S. Government Money Market Trust (MM)

TAX-FREE MONEY MARKET FUNDS
California Tax-Free Daily Income Trust (MM)
N.Y. Municipal Money Market Trust (MM)
Tax-Free Daily Income Trust (MM)
There may be Funds created after this PROSPECTUS was published. Please consult
the inside back cover of a new Fund's prospectus for its designation, e.g.,
Multi-Class Fund or Money Market Fund.
Unless otherwise noted, each listed Morgan Stanley Dean Witter Fund, except for
North American Government Income Trust and Short-Term U.S. Treasury Trust, is a
Multi-Class Fund. A Multi-Class Fund is a mutual fund offering multiple Classes
of shares. The other types of funds are: NL - No-Load (Mutual) Fund; MM - Money
Market Fund; FSC - A mutual fund sold with a front-end sales charge and a
distribution (12b-1) fee.
<PAGE>
PROSPECTUS - FEBRUARY 4, 2000

Additional information about the Fund's investments is available in the Fund's
ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS. In the Fund's ANNUAL REPORT, you
will find a discussion of the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year. The
Fund's STATEMENT OF ADDITIONAL INFORMATION also provides additional information
about the Fund. The STATEMENT OF ADDITIONAL INFORMATION is incorporated herein
by reference (legally is part of this PROSPECTUS). For a free copy of any of
these documents, to request other information about the Fund, or to make
shareholder inquiries, please call:

(800) 869-NEWS

You also may obtain information about the Fund by calling your Morgan Stanley
Dean Witter Financial Advisor or by visiting our Internet site at:

WWW.MSDW.COM/INDIVIDUAL/FUNDS

Information about the Fund (including the STATEMENT OF ADDITIONAL INFORMATION)
can be viewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, DC. Information about the Reference Room's
operations may be obtained by calling the SEC at (202) 942-8090. Reports and
other information about the Fund are available on the EDGAR Database on the
SEC's Internet site (www.sec.gov), and copies of this information may be
obtained, after paying a duplicating fee, by electronic request at the following
e-mail address: [email protected], or by writing the Public Reference Section
of the SEC, Washington, DC 20549-0102.

TICKER SYMBOLS:

<TABLE>
<S> <C>
CLASS A: TGRAX CLASS C: TGRCX
- --------------------- ---------------------

CLASS B: TGRBX CLASS D: TGRDX
- --------------------- ---------------------
</TABLE>

(THE FUND'S INVESTMENT COMPANY ACT FILE NO. IS 811-6121)

Morgan Stanley Dean Witter
PACIFIC GROWTH FUND

[BACK COVER PHOTO]

A MUTUAL FUND THAT
SEEKS TO MAXIMIZE THE
CAPITAL APPRECIATION
OF ITS INVESTMENTS
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION

FEBRUARY 4, 2000
MORGAN STANLEY DEAN
WITTER
PACIFIC GROWTH
FUND INC.

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

This STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. The PROSPECTUS
dated February 4, 2000 for the Morgan Stanley Dean Witter Pacific Growth Fund
Inc. may be obtained without charge from the Fund at its address or telephone
number listed below or from Dean Witter Reynolds at any of its branch offices.

Morgan Stanley Dean Witter
Pacific Growth Fund Inc.
Two World Trade Center
New York, New York 10048
(800) 869-NEWS
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------

<TABLE>
<C> <S> <C>
I. Fund History................................................ 4

II. Description of the Fund and Its Investments and Risks....... 4

A. Classification........................................... 4

B. Investment Strategies and Risks.......................... 4

C. Fund Policies/Investment Restrictions.................... 13

III. Management of the Fund...................................... 15

A. Board of Directors....................................... 15

B. Management Information................................... 15

C. Compensation............................................. 19

IV. Control Persons and Principal Holders of Securities......... 21

V. Investment Management and Other Services.................... 21

A. Investment Manager and Sub-Advisor....................... 21

B. Principal Underwriter.................................... 22

C. Services Provided by the Investment Manager and
Sub-Advisor.............................................. 23

D. Dealer Reallowances...................................... 24

E. Rule 12b-1 Plan.......................................... 24

F. Other Service Providers.................................. 28

VI. Brokerage Allocation and Other Practices.................... 28

A. Brokerage Transactions................................... 28

B. Commissions.............................................. 29

C. Brokerage Selection...................................... 29

D. Directed Brokerage....................................... 30

E. Regular Broker-Dealers................................... 30

VII. Capital Stock and Other Securities.......................... 30

VIII. Purchase, Redemption and Pricing of Shares.................. 31

A. Purchase/Redemption of Shares............................ 31

B. Offering Price........................................... 32

IX. Taxation of the Fund and Shareholders....................... 33

X. Underwriters................................................ 34

XI. Calculation of Performance Data............................. 34

XII. Financial Statements........................................ 36
</TABLE>

2
<PAGE>
GLOSSARY OF SELECTED DEFINED TERMS
- --------------------------------------------------------------------------------

The terms defined in this glossary are frequently used in this STATEMENT OF
ADDITIONAL INFORMATION (other terms used occasionally are defined in the text of
the document).

"CUSTODIAN"--The Chase Manhattan Bank.

"DEAN WITTER REYNOLDS"--Dean Witter Reynolds Inc., a wholly-owned broker-dealer
subsidiary of MSDW.

"DIRECTORS"--The Board of Directors of the Fund.

"DISTRIBUTOR"--Morgan Stanley Dean Witter Distributors Inc., a wholly-owned
broker-dealer subsidiary of MSDW.

"FINANCIAL ADVISORS"--Morgan Stanley Dean Witter authorized financial services
representatives.

"FORMER SUB-ADVISOR"--Morgan Grenfell Investment Services Limited, an indirect
subsidiary of Deutsche Bank AG.

"FUND"--Morgan Stanley Dean Witter Pacific Growth Fund Inc., a registered
open-end investment company.

"INVESTMENT MANAGER"--Morgan Stanley Dean Witter Advisors Inc., a wholly-owned
investment advisor subsidiary of MSDW.

"INDEPENDENT DIRECTORS"--Directors who are not "interested persons" (as defined
by the Investment Company Act) of the Fund.

"MORGAN STANLEY & CO."--Morgan Stanley & Co. Incorporated, a wholly-owned
broker-dealer subsidiary of MSDW.

"MORGAN STANLEY DEAN WITTER FUNDS"--Registered investment companies (i) for
which the Investment Manager serves as the investment advisor and (ii) that hold
themselves out to investors as related companies for investment and investor
services.

"MSDW"--Morgan Stanley Dean Witter & Co., a preeminent global financial services
firm.

"MSDW SERVICES COMPANY"--Morgan Stanley Dean Witter Services Company Inc., a
wholly-owned fund services subsidiary of the Investment Manager.

"SUB-ADVISOR"--Morgan Stanley Dean Witter Investment Management Inc., a
subsidiary of MSDW.

"TRANSFER AGENT"--Morgan Stanley Dean Witter Trust FSB, a wholly-owned transfer
agent subsidiary of MSDW.

3
<PAGE>
I. FUND HISTORY
- --------------------------------------------------------------------------------

The Fund was incorporated in the State of Maryland on June 13, 1990 under
the name Dean Witter Pacific Growth Fund Inc. Effective June 22, 1998, the
Fund's name was changed to Morgan Stanley Dean Witter Pacific Growth Fund Inc.

II. DESCRIPTION OF THE FUND AND ITS INVESTMENTS AND RISKS
- --------------------------------------------------------------------------------

A. CLASSIFICATION

The Fund is an open-end, diversified management investment company whose
investment objective is to maximize the capital appreciation of its investments.

B. INVESTMENT STRATEGIES AND RISKS

The following discussion of the Fund's investment strategies and risks
should be read with the sections of the Fund's PROSPECTUS titled "Principal
Investment Strategies," "Principal Risks," "Additional Investment Strategy
Information" and "Additional Risk Information."

CONVERTIBLE SECURITIES. The Fund may invest in fixed-income securities
which are convertible into common stock. Convertible securities rank senior to
common stocks in a corporation's capital structure and, therefore, entail less
risk than the corporation's common stock. The value of a convertible security is
a function of its "investment value" (its value as if it did not have a
conversion privilege), and its "conversion value" (the security's worth if it
were to be exchanged for the underlying security, at market value, pursuant to
its conversion privilege).

To the extent that a convertible security's investment value is greater than
its conversion value, its price will be primarily a reflection of such
investment value and its price will be likely to increase when interest rates
fall and decrease when interest rates rise, as with a fixed-income security (the
credit standing of the issuer and other factors may also have an effect on the
convertible security's value). If the conversion value exceeds the investment
value, the price of the convertible security will rise above its investment
value and, in addition, will sell at some premium over its conversion value.
(This premium represents the price investors are willing to pay for the
privilege of purchasing a fixed-income security with a possibility of capital
appreciation due to the conversion privilege.) At such times the price of the
convertible security will tend to fluctuate directly with the price of the
underlying equity security. Convertible securities may be purchased by the Fund
at varying price levels above their investment values and/or their conversion
values in keeping with the Fund's objective.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. The Fund may enter into
forward foreign currency exchange contracts ("FORWARD CONTRACTS") as a hedge
against fluctuations in future foreign exchange rates. The Fund may conduct its
foreign currency exchange transactions either on a spot (i.e., cash) basis at
the spot rate prevailing in the foreign currency exchange market, or through
entering into forward contracts to purchase or sell foreign currencies. A
forward contract involves an obligation to purchase or sell a specific currency
at a future date, which may be any fixed number of days from the date of the
contract agreed upon by the parties, at a price set at the time of the contract.
These contracts are traded in the interbank market conducted directly between
currency traders (usually large, commercial and investment banks) and their
customers. Forward contracts only will be entered into with United States banks
and their foreign branches, foreign banks, insurance companies and other dealers
whose assets total $1 billion or more, or foreign banks whose assets total $1
billion or more. A forward contract generally has no deposit requirement, and no
commissions are charged at any stage for trades.

The Fund may enter into forward contracts under various circumstances. The
typical use of a forward contract is to "lock in" the price of a security in
U.S. dollars or some other foreign currency which the Fund is holding in its
portfolio. By entering into a forward contract for the purchase or sale, for a
fixed amount of dollars or other currency, of the amount of foreign currency
involved in the underlying security transactions, the Fund may be able to
protect itself against a possible loss resulting from an adverse

4
<PAGE>
change in the relationship between the U.S. dollar or other currency which is
being used for the security purchase and the foreign currency in which the
security is denominated during the period between the date on which the security
is purchased or sold and the date on which payment is made or received.

The Investment Manager also may from time to time utilize forward contracts
for other purposes. For example, they may be used to hedge a foreign security
held in the portfolio or a security which pays out principal tied to an exchange
rate between the U.S. dollar and a foreign currency, against a decline in value
of the applicable foreign currency. They also may be used to lock in the current
exchange rate of the currency in which those securities anticipated to be
purchased are denominated. At times, the Fund may enter into "cross-currency"
hedging transactions involving currencies other than those in which securities
are held or proposed to be purchased are denominated.

The Fund will not enter into forward currency contracts or maintain a net
exposure to these contracts where the consummation of the contracts would
obligate the Fund to deliver an amount of foreign currency in excess of the
value of the Fund's portfolio securities.

Although the Fund values its assets daily in terms of U.S. dollars, it does
not intend to convert its holdings of foreign currencies into U.S. dollars on a
daily basis. It will, however, do so from time to time, and investors should be
aware of the costs of currency conversion. Although foreign exchange dealers do
not charge a fee for conversion, they do realize a profit based on the spread
between the prices at which they are buying and selling various currencies.
Thus, a dealer may offer to sell a foreign currency to the Fund at one rate,
while offering a lesser rate of exchange should the Fund desire to resell that
currency to the dealer.

The Fund may be limited in its ability to enter into hedging transactions
involving forward contracts by the Internal Revenue Code requirements relating
to qualification as a regulated investment company.

Forward currency contracts may limit gains on portfolio securities that
could otherwise be realized had they not been utilized and could result in
losses. The contracts also may increase the Fund's volatility and may involve a
significant amount of risk relative to the investment of cash.

OPTIONS AND FUTURES TRANSACTIONS. The Fund may engage in transactions in
listed options. Listed options are issued or guaranteed by the exchange on which
they are traded or by a clearing corporation such as the Options Clearing
Corporation ("OCC"). Ownership of a listed call option gives the Fund the right
to buy from the OCC (in the U.S.) or other clearing corporation or exchange, the
underlying security or currency covered by the option at the stated exercise
price (the price per unit of the underlying security) by filing an exercise
notice prior to the expiration date of the option. The writer (seller) of the
option would then have the obligation to sell to the OCC (in the U.S.) or other
clearing corporation or exchange, the underlying security or currency at that
exercise price prior to the expiration date of the option, regardless of its
then current market price. Ownership of a listed put option would give the Fund
the right to sell the underlying security or currency to the OCC (in the U.S.)
or other clearing corporation or exchange, at the stated exercise price. Upon
notice of exercise of the put option, the writer of the put would have the
obligation to purchase the underlying security or currency from the OCC (in the
U.S.) or other clearing corporation or exchange, at the exercise price.

COVERED CALL WRITING. The Fund is permitted to write covered call options
on portfolio securities and on the U.S. dollar and foreign currencies in which
they are denominated, without limit.

The Fund will receive from the purchaser, in return for a call it has
written, a "premium;" i.e., the price of the option. Receipt of these premiums
may better enable the Fund to earn a higher level of current income than it
would earn from holding the underlying securities (or currencies) alone.
Moreover, the premium received will offset a portion of the potential loss
incurred by the Fund if the securities (or currencies) underlying the option
decline in value.

The Fund may be required, at any time during the option period, to deliver
the underlying security (or currency) against payment of the exercise price on
any calls it has written. This obligation is terminated upon the expiration of
the option period or at such earlier time when the writer effects a

5
<PAGE>
closing purchase transaction. A closing purchase transaction is accomplished by
purchasing an option of the same series as the option previously written.
However, once the Fund has been assigned an exercise notice, the Fund will be
unable to effect a closing purchase transaction.

A call option is "covered" if the Fund owns the underlying security subject
to the option or has an absolute and immediate right to acquire that security
without additional cash consideration (or for additional consideration (in cash,
Treasury bills or other liquid portfolio securities) held in a segregated
account on the Fund's books) upon conversion or exchange of other securities
held in its portfolio. A call option is also covered if the Fund holds a call on
the same security as the call written where the exercise price of the call held
is (i) equal to or less than the exercise price of the call written or (ii)
greater than the exercise price of the call written if the difference is
maintained by the Fund in cash, Treasury bills or other liquid portfolio
securities in a segregated account on the Fund's books.

Options written by the Fund normally have expiration dates of from up to
eighteen months from the date written. The exercise price of a call option may
be below, equal to or above the current market value of the underlying security
at the time the option is written.

COVERED PUT WRITING. A writer of a covered put option incurs an obligation
to buy the security underlying the option from the purchaser of the put, at the
option's exercise price at any time during the option period, at the purchaser's
election. Through the writing of a put option, the Fund would receive income
from the premium paid by purchasers. The potential gain on a covered put option
is limited to the premium received on the option (less the commissions paid on
the transaction). During the option period, the Fund may be required, at any
time, to make payment of the exercise price against delivery of the underlying
security (or currency). A put option is "covered" if the Fund maintains cash,
Treasury bills or other liquid portfolio securities with a value equal to the
exercise price in a segregated account on the Fund's books, or holds a put on
the same security as the put written where the exercise price of the put held is
equal to or greater than the exercise price of the put written. The aggregate
value of the obligations underlying puts may not exceed 50% of the Fund's
assets. The operation of and limitations on covered put options in other
respects are substantially identical to those of call options.

PURCHASING CALL AND PUT OPTIONS. The Fund may purchase listed and OTC call
and put options in amounts equaling up to 5% of its total assets. The purchase
of a call option would enable the Fund, in return for the premium paid to lock
in a purchase price for a security or currency during the term of the option.
The purchase of a put option would enable the Fund, in return for a premium
paid, to lock in a price at which it may sell a security or currency during the
term of the option.

OPTIONS ON FOREIGN CURRENCIES. The Fund may purchase and write options on
foreign currencies for purposes similar to those involved with investing in
forward foreign currency exchange contracts.

OTC OPTIONS. OTC options are purchased from or sold (written) to dealers or
financial institutions which have entered into direct agreements with the Fund.
With OTC options, such variables as expiration date, exercise price and premium
will be agreed upon between the Fund and the transacting dealer, without the
intermediation of a third party such as the OCC. The Fund will engage in OTC
option transactions only with member banks of the Federal Reserve Bank System or
primary dealers in U.S. Government securities or with affiliates of such banks
or dealers.

RISKS OF OPTIONS TRANSACTIONS. The successful use of options depends on the
ability of the Investment Manager to forecast correctly interest rates, currency
exchange rates and/or market movements. If the market value of the portfolio
securities (or the currencies in which they are denominated) upon which call
options have been written increases, the Fund may receive a lower total return
from the portion of its portfolio upon which calls have been written than it
would have had such calls not been written. During the option period, the
covered call writer has, in return for the premium on the option, given up the
opportunity for capital appreciation above the exercise price should the market
price of the underlying security (or the value of its denominated currency)
increase, but has retained the risk of loss should the price of the underlying
security (or the value of its denominated currency) decline. The covered put
writer also retains the risk of loss should the market value of the underlying
security decline below the exercise

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price of the option less the premium received on the sale of the option. In both
cases, the writer has no control over the time when it may be required to
fulfill its obligation as a writer of the option. Prior to exercise or
expiration, an option position can only be terminated by entering into a closing
purchase or sale transaction. Once an option writer has received an exercise
notice, it cannot effect a closing purchase transaction in order to terminate
its obligation under the option and must deliver or receive the underlying
securities at the exercise price.

The Fund's ability to close out its position as a writer of an option is
dependent upon the existence of a liquid secondary market on option exchanges.
There is no assurance that such a market will exist, particularly in the case of
OTC options.

In the event of the bankruptcy of a broker through which the Fund engages in
transactions in options, the Fund could experience delays and/or losses in
liquidating open positions purchased or sold through the broker and/or incur a
loss of all or part of its margin deposits with the broker. In the case of OTC
options, if the transacting dealer fails to make or take delivery of the
securities underlying an option it has written, in accordance with the terms of
that option, due to insolvency or otherwise, the Fund would lose the premium
paid for the option as well as any anticipated benefit of the transaction.

Each of the exchanges has established limitations governing the maximum
number of call or put options on the same underlying security which may be
written by a single investor, whether acting alone or in concert with others
(regardless of whether such options are written on the same or different
exchanges or are held or written on one or more accounts or through one or more
brokers). An exchange may order the liquidation of positions found to be in
violation of these limits and it may impose other sanctions or restrictions.
These position limits may restrict the number of listed options which the Fund
may write.

The hours of trading for options may not conform to the hours during which
the underlying securities are traded. To the extent that the option markets
close before the markets for the underlying securities, significant price and
rate movements can take place in the underlying markets that cannot be reflected
in the option markets.

The markets in foreign currency options are relatively new and the Fund's
ability to establish and close out positions on such options is subject to the
maintenance of a liquid secondary market. There can be no assurance that a
liquid secondary market will exist for a particular option at any specific time.

The value of a foreign currency option depends upon the value of the
underlying currency relative to the U.S. dollar. As a result, the price of the
option position may vary with changes in the value of either or both currencies
and have no relationship to the investment merits of a foreign security. Because
foreign currency transactions occurring in the interbank market involve
substantially larger amounts than those that may be involved in the use of
foreign currency options, investors may be disadvantaged by having to deal in an
odd lot market (generally consisting of transactions of less than $1 million)
for the underlying foreign currencies at prices that are less favorable than for
round lots.

There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirement that quotations available through
dealers or other market sources be firm or revised on a timely basis. Quotation
information available is generally representative of very large transactions in
the interbank market and thus may not reflect relatively smaller transactions
(i.e., less than $1 million) where rates may be less favorable. The interbank
market in foreign currencies is a global, around-the-clock market. To the extent
that the U.S. options markets are closed while the markets for the underlying
currencies remain open, significant price and rate movements may take place in
the underlying markets that are not reflected in the options market.

FUTURES CONTRACTS. The Fund may purchase and sell interest rate, currency
and index futures contracts that are traded on U.S. and foreign commodity
exchanges on such underlying securities as U.S. Treasury bonds, notes, bills and
GNMA Certificates and/or any foreign government fixed-income security, on
various currencies and on such indexes of U.S. and foreign securities as may
exist or come into existence.

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A futures contract purchaser incurs an obligation to take delivery of a
specified amount of the obligation underlying the contract at a specified time
in the future for a specified price. A seller of a futures contract incurs an
obligation to deliver the specified amount of the underlying obligation at a
specified time in return for an agreed upon price. The purchase of a futures
contract enables the Fund, during the term of the contract, to lock in a price
at which it may purchase a security or currency and protect against a rise in
prices pending purchase of portfolio securities. The sale of a futures contract
enables the Fund to lock in a price at which it may sell a security or currency
and protect against declines in the value of portfolio securities.

Although most futures contracts call for actual delivery or acceptance of
securities, the contracts usually are closed out before the settlement date
without the making or taking of delivery. Index futures contracts provide for
the delivery of an amount of cash equal to a specified dollar amount times the
difference between the index value at the open or close of the last trading day
of the contract and the futures contract price. A futures contract sale is
closed out by effecting a futures contract purchase for the same aggregate
amount of the specific type of security (currency) and the same delivery date.
If the sale price exceeds the offsetting purchase price, the seller would be
paid the difference and would realize a gain. If the offsetting purchase price
exceeds the sale price, the seller would pay the difference and would realize a
loss. Similarly, a futures contract purchase is closed out by effecting a
futures contract sale for the same aggregate amount of the specific type of
security (currency) and the same delivery date. If the offsetting sale price
exceeds the purchase price, the purchaser would realize a gain, whereas if the
purchase price exceeds the offsetting sale price, the purchaser would realize a
loss. There is no assurance that the Fund will be able to enter into a closing
transaction.

MARGIN. If the Fund enters into a futures contract, it is initially
required to deposit an "initial margin" of cash or U.S. Government securities or
other liquid portfolio securities ranging from approximately 2% to 5% of the
contract amount. Initial margin requirements are established by the exchanges on
which futures contracts trade and may, from time to time, change. In addition,
brokers may establish margin deposit requirements in excess of those required by
the exchanges.

Initial margin in futures transactions is different from margin in
securities transactions in that initial margin does not involve the borrowing of
funds by a broker's client but is, rather, a good faith deposit on the futures
contract which will be returned to the Fund upon the proper termination of the
futures contract. The margin deposits made are marked to market daily and the
Fund may be required to make subsequent deposits of cash or U.S. Government
securities, called "variation margin," which are reflective of price
fluctuations in the futures contract.

OPTIONS ON FUTURES CONTRACTS. The Fund may purchase and write call and put
options on futures contracts and enter into closing transactions with respect to
such options to terminate an existing position. An option on a futures contract
gives the purchaser the right (in return for the premium paid), and the writer
the obligation, to assume a position in a futures contract (a long position if
the option is a call and a short position if the option is a put) at a specified
exercise price at any time during the term of the option. Upon exercise of the
option, the delivery of the futures position by the writer of the option to the
holder of the option is accompanied by delivery of the accumulated balance in
the writer's futures margin account, which represents the amount by which the
market price of the futures contract at the time of exercise exceeds, in the
case of a call, or is less than, in the case of a put, the exercise price of the
option on the futures contract.

The writer of an option on a futures contract is required to deposit initial
and variation margin pursuant to requirements similar to those applicable to
futures contracts. Premiums received from the writing of an option on a futures
contract are included in initial margin deposits.

LIMITATIONS ON FUTURES CONTRACTS AND OPTIONS ON FUTURES. The Fund may not
enter into futures contracts or purchase related options thereon if, immediately
thereafter, the amount committed to margin plus the amount paid for premiums for
unexpired options on futures contracts exceeds 5% of the value of the Fund's
total assets, after taking into account unrealized gains and unrealized losses
on such contracts it has entered into, provided, however, that in the case of an
option that is in-the-money (the

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exercise price of the call (put) option is less (more) than the market price of
the underlying security) at the time of purchase, the in-the-money amount may be
excluded in calculating the 5%. However, there is no overall limitation on the
percentage of the Fund's net assets which may be subject to a hedge position.

RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS. The prices
of securities and indexes subject to futures contracts (and thereby the futures
contract prices) may correlate imperfectly with the behavior of the cash prices
of the Fund's portfolio securities (and the currencies in which they are
denominated). Also, prices of futures contracts may not move in tandem with the
changes in prevailing interest rates, market movements and/or currency exchange
rates against which the Fund seeks a hedge. A correlation may also be distorted
(a) temporarily, by short-term traders' seeking to profit from the difference
between a contract or security price objective and their cost of borrowed funds;
(b) by investors in futures contracts electing to close out their contracts
through offsetting transactions rather than meet margin deposit requirements;
(c) by investors in futures contracts opting to make or take delivery of
underlying securities rather than engage in closing transactions, thereby
reducing liquidity of the futures market; and (d) temporarily, by speculators
who view the deposit requirements in the futures markets as less onerous than
margin requirements in the cash market. Due to the possibility of price
distortion in the futures market and because of the possible imperfect
correlation between movements in the prices of securities and movements in the
prices of futures contracts, a correct forecast of interest rate, currency
exchange rate and/or market movement trends by the Investment Manager may still
not result in a successful hedging transaction.

There is no assurance that a liquid secondary market will exist for futures
contracts and related options in which the Fund may invest. In the event a
liquid market does not exist, it may not be possible to close out a futures
position and, in the event of adverse price movements, the Fund would continue
to be required to make daily cash payments of variation margin. The absence of a
liquid market in futures contracts might cause the Fund to make or take delivery
of the underlying securities (currencies) at a time when it may be
disadvantageous to do so.

Exchanges also limit the amount by which the price of a futures contract may
move on any day. If the price moves equal the daily limit on successive days,
then it may prove impossible to liquidate a futures position until the daily
limit moves have ceased. In the event of adverse price movements, the Fund would
continue to be required to make daily cash payments of variation margin on open
futures positions. In these situations, if the Fund has insufficient cash, it
may have to sell portfolio securities to meet daily variation margin
requirements at a time when it may be disadvantageous to do so. In addition, the
Fund may be required to take or make delivery of the instruments underlying
interest rate futures contracts it holds at a time when it is disadvantageous to
do so. The inability to close out options and futures positions could also have
an adverse impact on the Fund's ability to effectively hedge its portfolio.

Futures contracts and options thereon which are purchased or sold on foreign
commodities exchanges may have greater price volatility than their U.S.
counterparts. Furthermore, foreign commodities exchanges may be less regulated
and under less governmental scrutiny than U.S. exchanges. Brokerage commissions,
clearing costs and other transaction costs may be higher on foreign exchanges.
Greater margin requirements may limit the Fund's ability to enter into certain
commodity transactions on foreign exchanges. Moreover, differences in clearance
and delivery requirements on foreign exchanges may occasion delays in the
settlement of the Fund's transactions effected on foreign exchanges.

In the event of the bankruptcy of a broker through which the Fund engages in
transactions in futures or options thereon, the Fund could experience delays
and/or losses in liquidating open positions purchased or sold through the broker
and/or incur a loss of all or part of its margin deposits with the broker.

If the Fund maintains a short position in a futures contract or has sold a
call option in a futures contract, it will cover this position by holding, in a
segregated account maintained on the books of the Fund, cash, U.S. government
securities or other liquid portfolio securities equal in value (when added to

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any initial or variation margin on deposit) to the market value of the
securities underlying the futures contract or the exercise price of the option.
Such a position may also be covered by owning the securities underlying the
futures contract (in the case of a stock index futures contract a portfolio of
securities substantially replicating the relevant index), or by holding a call
option permitting the Fund to purchase the same contract at a price no higher
than the price at which the short position was established.

In addition, if the Fund holds a long position in a futures contract or has
sold a put option on a futures contract, it will hold cash, U.S. government
securities or other liquid portfolio securities equal to the purchase price of
the contract or the exercise price of the put option (less the amount of initial
or variation margin on deposit) in a segregated account maintained on the books
of the Fund. Alternatively, the Fund could cover its long position by purchasing
a put option on the same futures contract with an exercise price as high or
higher than the price of the contract held by the Fund.

MONEY MARKET SECURITIES. The Fund may invest in various money market
securities for cash management purposes or when assuming a temporary defensive
position, which among others may include commercial paper, bank acceptances,
bank obligations, corporate debt securities, certificates of deposit, U.S.
Government securities, obligations of savings institutions and repurchase
agreements. Such securities are limited to:

U.S. GOVERNMENT SECURITIES. Obligations issued or guaranteed as to
principal and interest by the United States or its agencies (such as the
Export-Import Bank of the United States, Federal Housing Administration and
Government National Mortgage Association) or its instrumentalities (such as the
Federal Home Loan Bank), including Treasury bills, notes and bonds;

BANK OBLIGATIONS. Obligations (including certificates of deposit, time
deposits and bankers' acceptances) of banks subject to regulation by the U.S.
Government and having total assets of $1 billion or more, and instruments
secured by such obligations, not including obligations of foreign branches of
domestic banks except to the extent below;

EURODOLLAR CERTIFICATES OF DEPOSIT. Eurodollar certificates of deposit
issued by foreign branches of domestic banks having total assets of $1 billion
or more;

OBLIGATIONS OF SAVINGS INSTITUTIONS. Certificates of deposit of savings
banks and savings and loan associations, having total assets of $1 billion or
more;

FULLY INSURED CERTIFICATES OF DEPOSIT. Certificates of deposit of banks and
savings institutions, having total assets of less than $1 billion. If the
principal amount of the obligation is federally insured by the Bank Insurance
Fund or the Savings Association Insurance Fund (each of which is administered by
the FDIC), limited to $100,000 principal amount per certificate and to 10% or
less of the Fund's total assets in all such obligations and in all illiquid
assets, in the aggregate;

COMMERCIAL PAPER. Commercial paper rated within the two highest grades by
Standard & Poor's Corporation ("S&P") or the two highest grades by Moody's
Investors Service, Inc. ("Moody's") or, if not rated, issued by a company having
an outstanding debt issue rated at least AA by S&P or Aa by Moody's; and

REPURCHASE AGREEMENTS. The Fund may invest in repurchase agreements. When
cash may be available for only a few days, it may be invested by the Fund in
repurchase agreements until such time as it may otherwise be invested or used
for payments of obligations of the Fund. These agreements, which may be viewed
as a type of secured lending by the Fund, typically involve the acquisition by
the Fund of debt securities from a selling financial institution such as a bank,
savings and loan association or broker-dealer. The agreement provides that the
Fund will sell back to the institution, and that the institution will
repurchase, the underlying security serving as collateral at a specified price
and at a fixed time in the future, usually not more than seven days from the
date of purchase. The collateral will be marked-to-market daily to determine
that the value of the collateral, as specified in the agreement, does not
decrease below the purchase price plus accrued interest. If such decrease
occurs, additional collateral

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will be requested and, when received, added to the account to maintain full
collateralization. The Fund will accrue interest from the institution until the
time when the repurchase is to occur. Although this date is deemed by the Fund
to be the maturity date of a repurchase agreement, the maturities of securities
subject to repurchase agreements are not subject to any limits.

While repurchase agreements involve certain risks not associated with direct
investments in debt securities, the Fund follows procedures designed to minimize
such risks. These procedures include effecting repurchase transactions only with
large, well-capitalized and well-established financial institutions whose
financial condition will be continually monitored by the Sub-Advisor subject to
procedures established by the Directors. In addition, as described above, the
value of the collateral underlying the repurchase agreement will be at least
equal to the repurchase price, including any accrued interest earned on the
repurchase agreement. In the event of a default or bankruptcy by a selling
financial institution, the Fund will seek to liquidate such collateral. However,
the exercising of the Fund's right to liquidate such collateral could involve
certain costs or delays and, to the extent that proceeds from any sale upon a
default of the obligation to repurchase were less than the repurchase price, the
Fund could suffer a loss.

REVERSE REPURCHASE AGREEMENTS. The Fund may also use reverse repurchase
agreements for purposes of meeting redemptions or as part of its investment
strategy. Reverse repurchase agreements involve sales by the Fund of portfolio
assets concurrently with an agreement by the Fund to repurchase the same assets
at a later date at a fixed price. Generally, the effect of such a transaction is
that the Fund can recover all or most of the cash invested in the portfolio
securities involved during the term of the reverse repurchase agreement, while
it will be able to keep the interest income associated with those portfolio
securities. These transactions are only advantageous if the interest cost to the
Fund of the reverse repurchase transaction is less than the cost of obtaining
the cash otherwise. Opportunities to achieve this advantage may not always be
available, and the Fund intends to use the reverse repurchase technique only
when it will be to its advantage to do so.

The Fund will establish a segregated account in which it will maintain cash,
U.S. Government securities or other appropriate liquid portfolio securities
equal in value to its obligations in respect of reverse repurchase agreements.
Reverse repurchase agreements may not exceed 10% of the Fund's total assets. The
Fund will make no purchases of portfolio securities while it is still subject to
a reverse repurchase agreement.

LENDING PORTFOLIO SECURITIES. The Fund may lend its portfolio securities to
brokers, dealers and other financial institutions, provided that the loans are
callable at any time by the Fund, and are at all times secured by cash or cash
equivalents, which are maintained in a segregated account pursuant to applicable
regulations and that are equal to at least 100% of the market value, determined
daily, of the loaned securities. The advantage of these loans is that the Fund
continues to receive the income on the loaned securities while at the same time
earning interest on the cash amounts deposited as collateral, which will be
invested in short-term obligations. The Fund will not lend more than 25% of the
value of its total assets.

As with any extensions of credit, there are risks of delay in recovery and,
in some cases, even loss of rights in the collateral should the borrower of the
securities fail financially. However, these loans of portfolio securities will
only be made to firms deemed by the Fund's management to be creditworthy and
when the income which can be earned from such loans justifies the attendant
risks. Upon termination of the loan, the borrower is required to return the
securities to the Fund. Any gain or loss in the market price during the loan
period would inure to the Fund.

When voting or consent rights which accompany loaned securities pass to the
borrower, the Fund will follow the policy of calling the loaned securities, to
be delivered within one day after notice, to permit the exercise of the rights
if the matters involved would have a material effect on the Fund's investment in
the loaned securities. The Fund will pay reasonable finder's, administrative and
custodial fees in connection with a loan of its securities.

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WHEN-ISSUED AND DELAYED DELIVERY SECURITIES AND FORWARD COMMITMENTS. From
time to time the Fund may purchase securities on a when-issued or delayed
delivery basis or may purchase or sell securities on a forward commitment basis.
When these transactions are negotiated, the price is fixed at the time of the
commitment, but delivery and payment can take place a month or more after the
date of commitment. While the Fund will only purchase securities on a
when-issued, delayed delivery or forward commitment basis with the intention of
acquiring the securities, the Fund may sell the securities before the settlement
date, if it is deemed advisable. The securities so purchased or sold are subject
to market fluctuation and no interest or dividends accrue to the purchaser prior
to the settlement date.

At the time the Fund makes the commitment to purchase or sell securities on
a when-issued, delayed delivery or forward commitment basis, it will record the
transaction and thereafter reflect the value, each day, of such security
purchased, or if a sale, the proceeds to be received, in determining its net
asset value. At the time of delivery of the securities, their value may be more
or less than the purchase or sale price. An increase in the percentage of the
Fund's assets committed to the purchase of securities on a when-issued, delayed
delivery or forward commitment basis may increase the volatility of its net
asset value. The Fund will also establish a segregated account on the Fund's
books in which it will continually maintain cash or cash equivalents or other
liquid portfolio securities equal in value to commitments to purchase securities
on a when-issued, delayed delivery or forward commitment basis.

WHEN, AS AND IF ISSUED SECURITIES. The Fund may purchase securities on a
"when, as and if issued" basis under which the issuance of the security depends
upon the occurrence of a subsequent event, such as approval of a merger,
corporate reorganization or debt restructuring. The commitment for the purchase
of any such security will not be recognized in the portfolio of the Fund until
the Sub-Advisor determines that issuance of the security is probable. At that
time, the Fund will record the transaction and, in determining its net asset
value, will reflect the value of the security daily. At that time, the Fund will
also establish a segregated account on the Fund's books in which it will
maintain cash or cash equivalents or other liquid portfolio securities equal in
value to recognized commitments for such securities.

The value of the Fund's commitments to purchase the securities of any one
issuer, together with the value of all securities of such issuer owned by the
Fund, may not exceed 5% of the value of the Fund's total assets at the time the
initial commitment to purchase such securities is made. An increase in the
percentage of the Fund's assets committed to the purchase of securities on a
"when, as and if issued" basis may increase the volatility of its net asset
value. The Fund may also sell securities on a "when, as and if issued" basis
provided that the issuance of the security will result automatically from the
exchange or conversion of a security owned by the Fund at the time of sale.

PRIVATE PLACEMENTS. The Fund may invest up to 10% of its total assets in
securities which are subject to restrictions on resale because they have not
been registered under the Securities Act of 1933 (the "SECURITIES ACT"), or
which are otherwise not readily marketable. (Securities eligible for resale
pursuant to Rule 144A under the Securities Act, and determined to be liquid
pursuant to the procedures discussed in the following paragraph, are not subject
to the foregoing restriction.) These securities are generally referred to as
private placements or restricted securities. Limitations on the resale of these
securities may have an adverse effect on their marketability, and may prevent
the Fund from disposing of them promptly at reasonable prices. The Fund may have
to bear the expense of registering the securities for resale and the risk of
substantial delays in effecting the registration.

Rule 144A permits the Fund to sell restricted securities to qualified
institutional buyers without limitation. The Sub-Advisor, pursuant to procedures
adopted by the Directors, will make a determination as to the liquidity of each
restricted security purchased by the Fund. If a restricted security is
determined to be "liquid," the security will not be included within the category
"illiquid securities," which may not exceed 10% of the Fund's total assets.
However, investing in Rule 144A securities could have the effect of increasing
the level of Fund illiquidity to the extent the Fund, at a particular point in
time, may be unable to find qualified institutional buyers interested in
purchasing such securities.

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WARRANTS AND SUBSCRIPTION RIGHTS. The Fund may acquire warrants and
subscription rights attached to other securities. A warrant is, in effect, an
option to purchase equity securities at a specific price, generally valid for a
specific period of time, and has no voting rights, pays no dividends and has no
rights with respect to the corporation issuing it.

A subscription right is a privilege granted to existing shareholders of a
corporation to subscribe to shares of a new issue of common stock before it is
offered to the public. A subscription right normally has a life of two to four
weeks and a subscription price lower than the current market value of the common
stock.

YEAR 2000. The investment management services provided to the Fund by the
Investment Manager and the Sub-Advisor and the services provided to shareholders
by the Distributor and the Transfer Agent depend on the smooth functioning of
their computer systems. Many computer software systems in use today were
designed in such a way that they may not be able to recognize the year 2000, but
revert to 1900 or some other date, due to the manner in which dates were encoded
and calculated. That failure could have a negative impact on the handling of
securities trades, pricing and account services.

Improperly functioning trading systems may result in settlement problems and
liquidity issues. Corporate and governmental data processing errors could result
in production problems for individual issuers and overall economic
uncertainties. Operations ran smoothly from the last week in December through
the first few weeks of January, but the year 2000 issue may yet have an adverse
impact on financial market participants and other entities, including the
Issuers whose securities are contained in the Fund's portfolio.

C. FUND POLICIES/INVESTMENT RESTRICTIONS

The investment objective, policies and restrictions listed below have been
adopted by the Fund as fundamental policies. Under the Investment Company Act of
1940 (the "INVESTMENT COMPANY ACT"), a fundamental policy may not be changed
without the vote of a majority of the outstanding voting securities of the Fund.
The Investment Company Act defines a majority as the lesser of (a) 67% or more
of the shares present at a meeting of shareholders, if the holders of 50% of the
outstanding shares of the Fund are present or represented by proxy; or (b) more
than 50% of the outstanding shares of the Fund. For purposes of the following
restrictions: (i) all percentage limitations apply immediately after a purchase
or initial investment; and (ii) any subsequent change in any applicable
percentage resulting from market fluctuations or other changes in total or net
assets does not require elimination of any security from the portfolio.

The Fund will:

1. Seek to maximize the capital appreciation of its investments.

The Fund MAY NOT:

1. As to 75% of its total assets, invest more than 5% of the value of its
total assets in the securities of any one issuer (other than obligations issued,
or guaranteed by, the United States Government, its agencies or
instrumentalities).

2. As to 75% of its total assets, purchase more than 10% of all outstanding
voting securities or any class of securities of any one issuer.

3. Invest 25% or more of the value of its total assets in securities of
issuers in any one industry.

4. Purchase securities of other investment companies, except in connection
with a merger, consolidation, reorganization or acquisition of assets or in
accordance with the provisions of Section 12(d) of the Investment Company Act
and any rules promulgated thereunder (e.g., the Fund may not invest in more than
3% of the outstanding voting securities of any investment company).

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5. Invest more than 5% of the value of its total assets in securities of
issuers having a record, together with predecessors, of less than 3 years of
continuous operation. This restriction shall not apply to any obligation issued
or guaranteed by the United States Government, its agencies or
instrumentalities.

6. Invest more than 10% of its total assets in illiquid securities and
repurchase agreements which have a maturity of longer than seven days.

7. Purchase or sell real estate or interests therein (including real estate
limited partnerships), although the Fund may purchase securities of issuers
which engage in real estate operations and securities secured by real estate or
interests therein.

8. Purchase oil, gas or other mineral leases, rights or royalty contracts
or exploration or development programs, except that the Fund may invest in the
securities of companies which operate, invest in, or sponsor these programs.

9. Purchase or sell commodities or commodities contracts, except that the
Fund may purchase or sell (write) interest rate, currency and stock and bond
index futures contracts and related options thereon.

10. Borrow money (except insofar as the Fund may be deemed to have borrowed
by entrance into a reverse repurchase agreement up to an amount not exceeding
10% of the Fund's total assets), except that the Fund may borrow from a bank for
temporary or emergency purposes in amounts not exceeding 5% of its total assets
(not including the amount borrowed).

11. Pledge its assets or assign or otherwise encumber them except to secure
permitted borrowings. For the purpose of this restriction, collateral
arrangements with respect to the writing of options and collateral arrangements
with respect to initial or variation margin for futures are not deemed to be
pledges of assets.

12. Issue senior securities as defined in the Investment Company Act, except
insofar as the Fund may be deemed to have issued a senior security by reason of:
(a) entering into any repurchase or reverse repurchase agreement;
(b) purchasing any securities on a when-issued or delayed delivery basis; (c)
purchasing or selling futures contracts, forward foreign exchange contracts or
options; (d) borrowing money; or (e) lending portfolio securities.

13. Make loans of money or securities, except: (a) by the purchase of
publicly distributed debt obligations; (b) by investment in repurchase or
reverse repurchase agreements; or (c) by lending its portfolio securities.

14. Make short sales of securities.

15. Purchase securities on margin, except for short-term loans as are
necessary for the clearance of portfolio securities. The deposit or payment by
the Fund of initial or variation margin in connection with futures contracts or
related options thereon is not considered the purchase of a security on margin.

16. Engage in the underwriting of securities, except insofar as the Fund may
be deemed an underwriter under the Securities Act in disposing of a portfolio
security.

17. Invest for the purpose of exercising control or management of any other
issuer.

In addition, as a nonfundamental policy, the Fund will not invest in other
investment companies in reliance on Sections 12(d)(1)(F), 12(d)(1)(G) or
12(d)(1)(J) of the Investment Company Act.

If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage resulting from a change in values of
portfolio securities or amount of total or net assets will not be considered a
violation of any of the foregoing restrictions.

14
<PAGE>
Notwithstanding any other investment policy or restriction, the Fund may
seek to achieve its investment objective by investing all or substantially all
of its assets in another investment company having substantially the same
investment objective and policies as the Fund.

PORTFOLIO TURNOVER

For the fiscal years ended October 31, 1998 and 1999, the Fund's portfolio
turnover rates were 58% and 128%, respectively. This variation resulted
primarily from an increase in the weighting of Japanese securities in the Fund's
portfolio.

III. MANAGEMENT OF THE FUND
- --------------------------------------------------------------------------------

A. BOARD OF DIRECTORS

The Board of Directors of the Fund oversees the management of the Fund but
does not itself manage the Fund. The Directors review various services provided
by or under the direction of the Investment Manager to ensure that the Fund's
general investment policies and programs are properly carried out. The Directors
also conduct their review to ensure that administrative services are provided to
the Fund in a satisfactory manner.

Under state law, the duties of the Directors are generally characterized as
a duty of loyalty and a duty of care. The duty of loyalty requires a Director to
exercise his or her powers in the interest of the Fund and not the Director's
own interest or the interest of another person or organization. A Director
satisfies his or her duty of care by acting in good faith with the care of an
ordinarily prudent person and in a manner the Director reasonably believes to be
in the best interest of the Fund and its shareholders.

B. MANAGEMENT INFORMATION

DIRECTORS AND OFFICERS. The Board of the Fund consists of eight (8)
Directors. These same individuals also serve as directors or trustees for all of
the Morgan Stanley Dean Witter Funds. Six Directors (75% of the total number)
have no affiliation or business connection with the Investment Manager or any of
its affiliated persons and do not own any stock or other securities issued by
the Investment Manager's parent company, MSDW. These are the "non-interested" or
"independent" Directors. The other two Directors (the "MANAGEMENT DIRECTORS")
are affiliated with the Investment Manager.

The Directors and executive officers of the Fund, their principal business
occupations during the last five years and their affiliations, if any, with the
Investment Manager, and with the 93 Morgan Stanley Dean Witter Funds, are shown
below.

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- --------------------------------------------- -----------------------------------------------
<S> <C>
Michael Bozic (58) .......................... Vice Chairman of Kmart Corporation (since
Director December 1998); Director or Trustee of the
c/o Kmart Corporation Morgan Stanley Dean Witter Funds; formerly
3100 West Big Beaver Road Chairman and Chief Executive Officer of Levitz
Troy, Michigan Furniture Corporation (November 1995-November
1998) and President and Chief Executive Officer
of Hills Department Stores (May 1991-July
1995); formerly variously Chairman, Chief
Executive Officer, President and Chief
Operating Officer (1987-1991) of the Sears
Merchandise Group of Sears, Roebuck and Co.;
Director of Weirton Steel Corporation.
</TABLE>

15
<PAGE>

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- --------------------------------------------- -----------------------------------------------
<S> <C>
Charles A. Fiumefreddo* (66) ................ Chairman, Director or Trustee and Chief
Chairman of the Board, Executive Officer of the Morgan Stanley Dean
Chief Executive Officer and Director Witter Funds; formerly Chairman, Chief
Two World Trade Center Executive Officer and Director of the
New York, New York Investment Manager, the Distributor and MSDW
Services Company; Executive Vice President and
Director of Dean Witter Reynolds; Chairman and
Director of the Transfer Agent; formerly
Director and/or officer of various MSDW
subsidiaries (until June, 1998).
Edwin J. Garn (67) .......................... Director or Trustee of the Morgan Stanley Dean
Director Witter Funds; formerly United States Senator
c/o Huntsman Corporation (R- Utah)(1974-1992) and Chairman, Senate
500 Huntsman Way Banking Committee (1980-1986); formerly Mayor
Salt Lake City, Utah of Salt Lake City, Utah (1971-1974); formerly
Astronaut, Space Shuttle Discovery (April
12-19, 1985); Vice Chairman, Huntsman
Corporation (chemical company); Director of
Franklin Covey (time management systems), BMW
Bank of North America, Inc. (industrial loan
corporation), United Space Alliance (joint
venture between Lockheed Martin and the Boeing
Company) and Nuskin Asia Pacific (multilevel
marketing); member of the board of various
civic and charitable organizations.
Wayne E. Hedien (65) ........................ Retired; Director or Trustee of the Morgan
Director Stanley Dean Witter Funds; Director of The PMI
c/o Mayer, Brown & Platt Group, Inc. (private mortgage insurance);
Counsel to the Independent Directors Trustee and Vice Chairman of The Field Museum
1675 Broadway of Natural History; formerly associated with
New York, New York the Allstate Companies (1966-1994), most
recently as Chairman of The Allstate
Corporation (March 1993-December 1994) and
Chairman and Chief Executive Officer of its
wholly-owned subsidiary, Allstate Insurance
Company (July 1989-December 1994); director of
various other business and charitable
organizations.
Dr. Manuel H. Johnson (50) .................. Senior Partner, Johnson Smick
Director International, Inc., a consulting firm;
c/o Johnson Smick International, Inc. Co-Chairman and a founder of the Group of Seven
1133 Connecticut Avenue, N.W. Council (G7C), an international economic
Washington, D.C. commission; Chairman of the Audit Committee and
Director or Trustee of the Morgan Stanley Dean
Witter Funds; Director of Greenwich Capital
Markets, Inc. (broker-dealer) and NVR, Inc.
(home construction); Chairman and Trustee of
the Financial Accounting Foundation (oversight
organization of the Financial Accounting
Standards Board); formerly Vice Chairman of the
Board of Governors of the Federal Reserve
System (1986-1990) and Assistant Secretary of
the U.S. Treasury.
Michael E. Nugent (63) ...................... General Partner, Triumph Capital, L.P., a
Director private investment partnership; Chairman of the
c/o Triumph Capital, L.P. Insurance Committee and Director or Trustee of
237 Park Avenue the Morgan Stanley Dean Witter Funds; formerly
New York, New York Vice President, Bankers Trust Company and BT
Capital Corporation (1984-1988); director of
various business organizations.
</TABLE>

16
<PAGE>

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- --------------------------------------------- -----------------------------------------------
<S> <C>
Philip J. Purcell* (56) ..................... Chairman of the Board of Directors and Chief
Director Executive Officer of MSDW, Dean Witter Reynolds
1585 Broadway and Novus Credit Services Inc.; Director of the
New York, New York Distributor; Director or Trustee of the Morgan
Stanley Dean Witter Funds; Director of American
Airlines, Inc. and its parent company, AMR
Corporation; Director and/or officer of various
MSDW subsidiaries.
John L. Schroeder (69) ...................... Retired; Chairman of the Derivatives Committee
Director and Director or Trustee of the Morgan Stanley
c/o Mayer, Brown & Platt Dean Witter Funds; Director of Citizens
Counsel to the Independent Directors Utilities Company (telecommunications, gas,
1675 Broadway electric and water utilities company); formerly
New York, New York Executive Vice President and Chief Investment
Officer of the Home Insurance Company (August
1991-September 1995).
Mitchell M. Merin (46) ...................... President and Chief Operating Officer of Asset
President Management of MSDW (since December 1998);
Two World Trade Center President and Director (since April 1997) and
New York, New York Chief Executive Officer (since June 1998) of
the Investment Manager and MSDW Services
Company; Chairman, Chief Executive Officer and
Director of the Distributor (since June 1998);
Chairman and Chief Executive Officer (since
June 1998) and Director (since January 1998) of
the Transfer Agent; Director of various MSDW
subsidiaries; President of the Morgan Stanley
Dean Witter Funds (since May 1999); Trustee of
various Van Kampen investment companies (since
December 1999); previously Chief Strategic
Officer of the Investment Manager and MSDW
Services Company and Executive Vice President
of the Distributor (April 1997-June 1998), Vice
President of the Morgan Stanley Dean Witter
Funds (May 1997-April 1999), and Executive Vice
President of Dean Witter, Discover & Co.
Barry Fink (45) ............................. Executive Vice President (since December 1999)
Vice President, and Secretary and General Counsel (since
Secretary and General Counsel February 1997) and Director (since July 1998)
Two World Trade Center of the Investment Manager and MSDW Services
New York, New York Company; Executive Vice President (since
December 1999) and Assistant Secretary and
Assistant General Counsel (since February 1997)
of the Distributor; Assistant Secretary of Dean
Witter Reynolds (since August 1996); Vice
President, Secretary and General Counsel of the
Morgan Stanley Dean Witter Funds (since
February 1997); previously Senior Vice
President (March 1997-December 1999), First
Vice President (June 1993-February 1997), Vice
President and Assistant Secretary and Assistant
General Counsel of the Investment Manager and
MSDW Services Company, Senior Vice President of
the Distributor (March 1997-December 1999) and
Assistant Secretary of the Morgan Stanley Dean
Witter Funds.
</TABLE>

17
<PAGE>

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATIONS DURING LAST FIVE YEARS
- --------------------------------------------- -----------------------------------------------
<S> <C>
Thomas F. Caloia (53) ....................... First Vice President and Assistant Treasurer of
Treasurer the Investment Manager, the Distributor and
Two World Trade Center MSDW Services Company; Treasurer of the Morgan
New York, New York Stanley Dean Witter Funds.
</TABLE>

- ------------------------
* Denotes Directors who are "interested persons" of the Fund, as defined in
the Investment Company Act.

In addition, RONALD E. ROBISON, Executive Vice President, Chief
Administrative Officer and Director of the Investment Manager and MSDW Services
Company, ROBERT S. GIAMBRONE, Senior Vice President of the Investment Manager,
MSDW Services Company, the Distributor and the Transfer Agent and Director of
the Transfer Agent, and JOSEPH J. MCALINDEN, Executive Vice President and Chief
Investment Officer of the Investment Manager and Director of the Transfer Agent,
MARK BAVOSO, KENTON J. HINCHLIFFE, and IRA N. ROSS, Senior Vice Presidents of
the Investment Manager, and PAUL D. VANCE, Senior Vice President of the
Investment Manager and Director of the Growth and Income Group of the Investment
Manager, are Vice Presidents of the Fund.

In addition, MARILYN K. CRANNEY, TODD LEBO, LOU ANNE D. MCINNIS, CARSTEN
OTTO and RUTH ROSSI, First Vice Presidents and Assistant General Counsels of the
Investment Manager and MSDW Services Company, and NATASHA KASSIAN, Assistant
Vice President and Assistant General Counsel of the Investment Manager and MSDW
Services Company, are Assistant Secretaries of the Fund.

INDEPENDENT DIRECTORS/TRUSTEES AND THE COMMITTEES. Law and regulation
establish both general guidelines and specific duties for the independent
directors/trustees. The Morgan Stanley Dean Witter Funds seek as independent
directors/trustees individuals of distinction and experience in business and
finance, government service or academia; these are people whose advice and
counsel are in demand by others and for whom there is often competition. To
accept a position on the Funds' boards, such individuals may reject other
attractive assignments because the Funds make substantial demands on their time.
All of the independent directors/trustees serve as members of the Audit
Committee.

The independent directors/trustees are charged with recommending to the full
board approval of management, advisory and administration contracts, Rule 12b-1
plans and distribution and underwriting agreements; continually reviewing Fund
performance; checking on the pricing of portfolio securities, brokerage
commissions, transfer agent costs and performance, and trading among Funds in
the same complex; and approving fidelity bond and related insurance coverage and
allocations, as well as other matters that arise from time to time. The
independent directors/trustees are required to select and nominate individuals
to fill any independent director/trustee vacancy on the Board of any Fund that
has a Rule 12b-1 plan of distribution. Most of the Morgan Stanley Dean Witter
Funds have a Rule 12b-1 plan.

The Audit Committee is charged with recommending to the full board the
engagement or discharge of the Fund's independent accountants; directing
investigations into matters within the scope of the independent accountants'
duties, including the power to retain outside specialists; reviewing with the
independent accountants the audit plan and results of the auditing engagement;
approving professional services provided by the independent accountants and
other accounting firms prior to the performance of the services; reviewing the
independence of the independent accountants; considering the range of audit and
non-audit fees; reviewing the adequacy of the Fund's system of internal
controls; and preparing and submitting Committee meeting minutes to the full
board.

The board of each Fund has a Derivatives Committee to approve parameters for
and monitor the activities of the Fund with respect to derivative investments,
if any, made by the Fund.

Finally, the board of each Fund has formed an Insurance Committee to review
and monitor the insurance coverage maintained by the Fund.

18
<PAGE>
ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT DIRECTORS/TRUSTEES FOR
ALL MORGAN STANLEY DEAN WITTER FUNDS. The independent directors/trustees and
the Funds' management believe that having the same independent
directors/trustees for each of the Morgan Stanley Dean Witter Funds avoids the
duplication of effort that would arise from having different groups of
individuals serving as independent directors/trustees for each of the Funds or
even of sub-groups of Funds. They believe that having the same individuals serve
as independent directors/trustees of all the Funds tends to increase their
knowledge and expertise regarding matters which affect the Fund complex
generally and enhances their ability to negotiate on behalf of each Fund with
the Fund's service providers. This arrangement also precludes the possibility of
separate groups of independent directors/trustees arriving at conflicting
decisions regarding operations and management of the Funds and avoids the cost
and confusion that would likely ensue. Finally, having the same independent
directors/trustees serve on all Fund boards enhances the ability of each Fund to
obtain, at modest cost to each separate Fund, the services of independent
directors/trustees, of the caliber, experience and business acumen of the
individuals who serve as independent directors/trustees of the Morgan Stanley
Dean Witter Funds.

DIRECTOR AND OFFICER INDEMNIFICATION. The Fund's By-Laws provides that no
Director, officer, employee or agent of the Fund is liable to the Fund or to a
shareholder, nor is any Director, officer, employee or agent liable to any third
persons in connection with the affairs of the Fund, except as such liability may
arise from his/her or its own bad faith, willful misfeasance, gross negligence
or reckless disregard of his/her or its duties. It also provides that all third
persons shall look solely to the Fund property for satisfaction of claims
arising in connection with the affairs of the Fund. With the exceptions stated,
the By-Laws provides that a Director, officer, employee or agent is entitled to
be indemnified against all liability in connection with the affairs of the Fund.

C. COMPENSATION

The Fund pays each Independent Director an annual fee of $800 plus a per
meeting fee of $50 for meetings of the Board of Directors, the Independent
Directors or Committees of the Board of Directors attended by the Director (the
Fund pays the Chairman of the Audit Committee an additional annual fee of $750
and the Chairman of the Derivative and Insurance Committees additional fees of
$500). If a Board meeting and a meeting of the Independent Directors or a
Committee meeting, or a meeting of the Independent Directors and/or more than
one Committee meeting, take place on a single day, the Directors are paid a
single meeting fee by the Fund. The Fund also reimburses such Directors for
travel and other out-of-pocket expenses incurred by them in connection with
attending such meetings. Directors and officers of the Fund who are or have been
employed by the Investment Manager or an affiliated company receive no
compensation or expense reimbursement from the Fund for their services as
Director. The following table illustrates the compensation that the Fund paid to
its Independent Directors for the fiscal year ended October 31, 1999.

FUND COMPENSATION

<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT DIRECTOR FROM THE FUND
- ---------------------------- -------------
<S> <C>
Michael Bozic............................................... $1,550
Edwin J. Garn............................................... 1,600
Wayne E. Hedien............................................. 1,650
Dr. Manuel H. Johnson....................................... 2,100
Michael E. Nugent........................................... 1,933
John L. Schroeder........................................... 1,933
</TABLE>

19
<PAGE>
The following table illustrates the compensation paid to the Fund's
Independent Directors for the calendar year ended December 31, 1999 for services
to the 93 Morgan Stanley Dean Witter Funds that were in operation at
December 31, 1999.

CASH COMPENSATION FROM MORGAN STANLEY DEAN WITTER FUNDS

<TABLE>
<CAPTION>
TOTAL CASH
COMPENSATION
FOR SERVICES TO
93 MORGAN
STANLEY DEAN
NAME OF INDEPENDENT DIRECTOR WITTER FUNDS
- ---------------------------- ---------------
<S> <C>
Michael Bozic............................................... $134,600
Edwin J. Garn............................................... 138,700
Wayne E. Hedien............................................. 138,700
Dr. Manuel H. Johnson....................................... 208,638
Michael E. Nugent........................................... 193,324
John L. Schroeder........................................... 193,324
</TABLE>

As of the date of this STATEMENT OF ADDITIONAL INFORMATION, 55 of the Morgan
Stanley Dean Witter Funds, including the Fund, have adopted a retirement program
under which an independent director/trustee who retires after serving for at
least five years (or such lesser period as may be determined by the Board) as an
independent director/trustee of any Morgan Stanley Dean Witter Fund that has
adopted the retirement program (each such Fund referred to as an "ADOPTING FUND"
and each such director/trustee referred to as an "ELIGIBLE DIRECTOR/TRUSTEE") is
entitled to retirement payments upon reaching the eligible retirement age
(normally, after attaining age 72). Annual payments are based upon length of
service.

Currently, upon retirement, each Eligible Director/Trustee is entitled to
receive from the Adopting Fund, commencing as of his or her retirement date and
continuing for the remainder of his or her life, an annual retirement benefit
(the "REGULAR BENEFIT") equal to 30.22% of his or her Eligible Compensation plus
0.5036667% of such Eligible Compensation for each full month of service as an
independent director/ trustee of any Adopting Fund in excess of five years up to
a maximum of 60.44% after ten years of service. The foregoing percentages may be
changed by the Board.(1) "ELIGIBLE COMPENSATION" is one-fifth of the total
compensation earned by such Eligible Director/Trustee for service to the
Adopting Fund in the five year period prior to the date of the Eligible
Director/Trustee's retirement. Benefits under the retirement program are not
secured or funded by the Adopting Funds.

The following table illustrates the retirement benefits accrued to the
Fund's Independent Directors by the Fund for the fiscal year ended October 31,
1999 and by the 55 Morgan Stanley Dean Witter Funds (including the Fund) for the
year ended December 31, 1999, and the estimated retirement benefits for the
Independent Directors, to commence upon their retirement, from the Fund as of
October 31, 1999 and from the 55 Morgan Stanley Dean Witter Funds as of
December 31, 1999.

20
<PAGE>
RETIREMENT BENEFITS FROM THE FUND AND ALL MORGAN STANLEY
DEAN WITTER FUNDS

<TABLE>
<CAPTION>
FOR ALL ADOPTING FUNDS
---------------------------- RETIREMENT BENEFITS ESTIMATED ANNUAL
ESTIMATED ACCRUED AS BENEFITS UPON
CREDITED EXPENSES RETIREMENT(2)
YEARS OF ESTIMATED ------------------- --------------------
SERVICE AT PERCENTAGE OF BY ALL FROM FROM ALL
RETIREMENT ELIGIBLE BY THE ADOPTING THE ADOPTING
NAME OF INDEPENDENT DIRECTOR (MAXIMUM 10) COMPENSATION FUND FUNDS FUND FUNDS
- ---------------------------- ------------ ------------ ---- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C>
Michael Bozic................ 10 60.44% $406 $ 20,933 $ 967 $ 50,588
Edwin J. Garn................ 10 60.44 694 31,737 967 50,675
Wayne E. Hedien.............. 9 51.37 762 39,566 822 43,000
Dr. Manuel H. Johnson........ 10 60.44 273 13,129 1,420 75,520
Michael E. Nugent............ 10 60.44 518 23,175 1,269 67,209
John L. Schroeder............ 8 50.37 812 41,558 987 52,994
</TABLE>

- ------------------------
1 An Eligible Director may elect alternative payments of his or her retirement
benefits based upon the combined life expectancy of the Eligible Director
and his or her spouse on the date of such Eligible Director's retirement. In
addition, the Eligible Director may elect that the surviving spouse's
periodic payment of benefits will be equal to a lower percentage of the
periodic amount when both spouses were alive. The amount estimated to be
payable under this method, through the remainder of the later of the lives
of the Eligible Director and spouse, will be the actuarial equivalent of the
Regular Benefit.

2 Based on current levels of compensation. Amount of annual benefits also
varies depending on the Director's elections described in Footnote 1 above.

IV. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
- --------------------------------------------------------------------------------

The following owned 5% or more of the outstanding Class A shares of the Fund
as of January 3, 2000: MSDWT FSB Trustee, Prebon Yamane USA Inc., 401(k) Profit
Sharing Plan, P.O. Box 957, Jersey City, NJ 07303-0957 - 11.406%; Michael S.
Didion TTEE, Michael S. Didion LV TR DTD 06/30/93, Special Account, 227 Ohmes
Rd., Saint Peter's, MO 63376-3805 - 8.203%; Concorde Bank Limited, The Corp
Center, P.O. Box 1161, Bush Hill Bay St., Barbados, West Indies - 7.849%. The
following owned 5% or more of the outstanding Class C shares of the Fund as of
January 3, 2000: Concorde Bank Limited, The Corp Center, P.O. Box 1161 Bush Hill
Bay Street, Barbados, West Indies - 8.196%. The following owned 5% or more of
the outstanding Class D shares of the Fund as of January 3, 2000: Hare & Co.,
c/o The Bank of New York, P.O. Box 11203, New York, NY 10286-1203 - 53.431%; IAM
& AW Local Lodge PM #2848, Multi-Emp Wage Reduc 401(k) PSP, 03/06/86 TTEE J.
Winterhalter, P.O. Box 3039, Birmingham, MI 48012-3039 - 11.517%; Joseph and
Patricia Reinkemeyer, TTEES for the Reinkemeyer Family Trust dated 05/08/86,
1281 Skyline Blvd., Reno, NV 89509-3585 - 8.286%; Lucile G. Davis TTEE for the
FAD Trust 12/13/88, 3043 Bel Air Dr., Las Vegas, NV 89109-1587 - 8.248%.

As of the date of this STATEMENT OF ADDITIONAL INFORMATION, the aggregate
number of shares of common stock of the Fund owned by the Fund's officers and
Directors as a group was less than 1% of the Fund's shares of common stock
outstanding.

V. INVESTMENT MANAGEMENT AND OTHER SERVICES
- --------------------------------------------------------------------------------

A. INVESTMENT MANAGER AND SUB-ADVISOR

The Investment Manager to the Fund is Morgan Stanley Dean Witter Advisors
Inc., a Delaware corporation, whose address is Two World Trade Center, New York,
NY 10048. The Investment Manager is a wholly-owned subsidiary of MSDW, a
Delaware corporation. MSDW is a preeminent global financial services firm that
maintains leading market positions in each of its three primary businesses:
securities, asset management and credit services.

21
<PAGE>
The Sub-Advisor is Morgan Stanley Dean Witter Investment Management Inc., a
subsidiary of MSDW and an affiliate of the Investment Manager, whose address is
1221 Avenue of the Americas, New York, New York 10020. The Sub-Advisor was
retained to provide sub-advisory services to the Fund effective November 1,
1998.

Pursuant to an Investment Management Agreement (the "MANAGEMENT AGREEMENT")
with the Investment Manager, the Fund has retained the Investment Manager to
provide administrative services, manage its business affairs and supervise the
investment of the Fund's assets. The Fund pays the Investment Manager monthly
compensation calculated daily by applying the following annual rates to the net
assets of the Fund determined as of the close of each business day: 0.95% to the
portion of daily net assets not exceeding $1 billion; 0.90% 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 exceeding $2 billion. The management fee is
allocated among the Classes pro rata based on the net assets of the Fund
attributable to each Class. For the fiscal years ended October 31, 1997, 1998
and 1999, the Investment Manager accrued total compensation under the Management
Agreement in the amounts of $13,946,846, $5,187,815 and $4,907,485,
respectively.

The Investment Manager has retained its wholly-owned subsidiary, MSDW
Services Company, to perform administrative services for the Fund.

Under a Sub-Advisory Agreement (the "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 issued by issuers located in Asia, Australia and New Zealand and in
countries located elsewhere around the world, subject to the overall supervision
of the Investment Manager. The Investment Manager pays the Sub-Advisor monthly
compensation equal to 40% of the Investment Manager's fee. For the fiscal year
ended October 31, 1999, the Investment manager accrued to the Sub-Advisor total
compensation under the Sub-Advisory Agreement of $1,962,994.

B. PRINCIPAL UNDERWRITER

The Fund's principal underwriter is the Distributor (which has the same
address as the Investment Manager). In this capacity, the Fund's shares are
distributed by the Distributor. The Distributor has entered into a selected
dealer agreement with Dean Witter Reynolds, which through its own sales
organization sells shares of the Fund. In addition, the Distributor may enter
into similar agreements with other selected broker-dealers. The Distributor, a
Delaware corporation, is a wholly-owned subsidiary of MSDW.

The Distributor bears all expenses it may incur in providing services under
the Distribution Agreement. These expenses include the payment of commissions
for sales of the Fund's shares and incentive compensation to Financial Advisors,
the cost of educational and/or business-related trips, and educational and/or
promotional and business-related expenses. The Distributor also pays certain
expenses in connection with the distribution of the Fund's shares, including the
costs of preparing, printing and distributing advertising or promotional
materials, and the costs of printing and distributing prospectuses and
supplements thereto used in connection with the offering and sale of the Fund's
shares. The Fund bears the costs of initial typesetting, printing and
distribution of prospectuses and supplements thereto to shareholders. The Fund
also bears the costs of registering the Fund and its shares under federal and
state securities laws and pays filing fees in accordance with state securities
laws.

The Fund and the Distributor have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act. Under the
Distribution Agreement, the Distributor uses its best efforts in rendering
services to the Fund, but in the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations, the Distributor is
not liable to the Fund or any of its shareholders for any error of judgment or
mistake of law or for any act or omission or for any losses sustained by the
Fund or its shareholders.

22
<PAGE>
C. SERVICES PROVIDED BY THE INVESTMENT MANAGER AND SUB-ADVISOR

The Investment Manager supervises the investment of the Fund's assets. The
Investment Manager obtains and evaluates the information and advice relating to
the economy, securities markets, and specific securities as it considers
necessary or useful to continuously oversee the management of the assets of the
Fund in a manner consistent with its investment objective.

Under the terms of the Management Agreement, the Investment Manager also
maintains certain of the Fund's books and records and furnishes, at its own
expense, the office space, facilities, equipment, clerical help, bookkeeping and
certain legal services as the Fund may reasonably require in the conduct of its
business, including the preparation of prospectuses, proxy statements and
reports required to be filed with federal and state securities commissions
(except insofar as the participation or assistance of independent accountants
and attorneys is, in the opinion of the Investment Manager, necessary or
desirable). In addition, the Investment Manager 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 service, heat,
light, power and other utilities provided to the Fund.

Pursuant to the Sub-Advisory Agreement, the Sub-Advisor has been retained,
subject to the overall supervision of the Investment Manager, to continuously
furnish investment advice concerning individual security selections, asset
allocations and overall economic trends with respect to Pacific Basin issuers
and to manage the portion of the Fund's portfolio invested in securities issued
by issuers located in Asia, Australia and New Zealand. On occasion, the
Sub-Advisor also provides the Investment Manager with investment advice
concerning potential investment opportunities for the Fund which are available
outside of Asia, Australia and New Zealand.

Expenses not expressly assumed by the Investment Manager under the
Management Agreement or by the Distributor, will be paid by the Fund. These
expenses will be allocated among the four Classes of shares pro rata based on
the net assets of the Fund attributable to each Class, except as described
below. Such expenses include, but are not limited to: expenses of the Plan of
Distribution pursuant to Rule 12b-1; charges and expenses of any registrar,
custodian, stock transfer and dividend disbursing agent; brokerage commissions;
taxes; engraving and printing share certificates; registration costs of the Fund
and its shares under federal and state securities laws; the cost and expense of
printing, including typesetting, and distributing prospectuses of the Fund and
supplements thereto to the Fund's shareholders; all expenses of shareholders'
and Directors' meetings and of preparing, printing and mailing of proxy
statements and reports to shareholders; fees and travel expenses of Directors or
members of any advisory board or committee who are not employees of the
Investment Manager or any corporate affiliate of the Investment Manager; all
expenses incident to any dividend, withdrawal or redemption options; charges and
expenses of any outside service used for pricing of the Fund's shares; fees and
expenses of legal counsel, including counsel to the Directors who are not
interested persons of the Fund or of the Investment Manager (not including
compensation or expenses of attorneys who are employees of the Investment
Manager); fees and expenses of the Fund's independent accountants; membership
dues of industry associations; interest on Fund borrowings; postage; insurance
premiums on property or personnel (including officers and Directors) of the Fund
which inure to its benefit; extraordinary expenses (including, but not limited
to, legal claims and liabilities and litigation costs and any indemnification
relating thereto); and all other costs of the Fund's operation. The 12b-1 fees
relating to a particular Class will be allocated directly to that Class. In
addition, other expenses associated with a particular Class (except advisory or
custodial fees) may be allocated directly to that Class, provided that such
expenses are reasonably identified as specifically attributable to that Class
and the direct allocation to that Class is approved by the Directors.

The Management Agreement provides that in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations thereunder, the Investment Manager is not liable to the Fund or any
of its investors for any act or omission by the Investment Manager or for any
losses sustained by the Fund or its investors.

23
<PAGE>
The Management Agreement will remain in effect from year to year, provided
continuance of the Management Agreement is approved at least annually by the
vote of the holders of a majority, as defined in the Investment Company Act, of
the outstanding shares of the Fund, or by the Directors; provided that in either
event such continuance is approved annually by the vote of a majority of the
Directors who are not parties to the Management Agreement or the Sub-Advisory
Agreement or are "independent Directors," which votes must be cast in person at
a meeting called for the purpose of voting on such approval.

D. DEALER REALLOWANCES

Upon notice to selected broker-dealers, the Distributor may reallow up to
the full applicable front-end sales charge during periods specified in such
notice. During periods when 90% or more of the sales charge is reallowed, such
selected broker-dealers may be deemed to be underwriters as that term is defined
in the Securities Act.

E. RULE 12B-1 PLAN

The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
Investment Company Act (the "PLAN") pursuant to which each Class, other than
Class D, pays the Distributor compensation accrued daily and payable monthly at
the following annual rates: 0.25% and 1.0% of the average daily net assets of
Class A and Class C, respectively, and, with respect to Class B, 1.0% of the
lesser of: (a) the average daily aggregate gross sales of the Fund's Class B
shares since the inception of the Fund (not including reinvestment of dividends
or capital gains distributions), less the average daily aggregate net asset
value of the Fund's Class B shares redeemed since the Fund's inception upon
which a contingent deferred sales charge has been imposed or upon which such
charge has been waived; or (b) the Fund's average daily net assets of Class B.

The Distributor also receives the proceeds of front-end sales charges
("FSCS") and of contingent deferred sales charges ("CDSCS") imposed on certain
redemptions of shares, which are separate and apart from payments made pursuant
to the Plan. The Distributor has informed the Fund that it and/or Dean Witter
Reynolds received the proceeds of CDSCs and FSCs, for the last three fiscal
years ended October 31, in approximate amounts as provided in the table below
(the Distributor did not retain any of these amounts).

<TABLE>
<CAPTION>
1999 1998 1997
--------------------- --------------------- ---------------------
<S> <C> <C> <C> <C> <C> <C>
Class A................... FSCs(1) $ 46,260 FSCs: $ 27,369 FSCs: $ 11,000
CDSCs $ 567 CDSCs: $ 1,390 CDSCs: $ 0
Class B................... CDSCs $ 803,088 CDSCs: $1,609,376 CDSCs: $4,821,220
Class C................... CDSCs $ 4,110 CDSCs: $ 6,017 CDSCs: $ 650
</TABLE>

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

1 FSCs apply to Class A only.

The Distributor has informed the Fund that the entire fee payable by Class A
and a portion of the fees payable by each of Class B and Class C each year
pursuant to the Plan equal to 0.25% of such Class' average daily net assets are
currently each characterized as a "service fee" under the Rules of the National
Association of Securities Dealers, Inc. (of which the Distributor is a member).
The "service fee" is a payment made for personal service and/or the maintenance
of shareholder accounts. The remaining portion of the Plan fees payable by a
Class, if any, is characterized as an "asset-based sales charge" as such is
defined by the Rules of the Association.

Under the Plan and as required by Rule 12b-1, the Directors receive and
review promptly after the end of each calendar quarter a written report provided
by the Distributor of the amounts expended under the Plan and the purpose for
which such expenditures were made. Class B shares of the Fund accrued amounts
payable to the Distributor under the Plan, during the fiscal year ended October
31, 1999, of $5,032,473. This amount is equal to 1.00% of the average daily net
assets of Class B shares for the fiscal year and was calculated pursuant to
clause (b) of the compensation formula under the Plan. This 12b-1 fee is treated
by the Fund as an expense in the year it is accrued. For the fiscal year ended
October 31,

24
<PAGE>
1999, Class A and Class C shares of the Fund accrued payments under the Plan
amounting to $12,269 and $56,000, respectively, which amounts are equal to 0.23%
and 1.00% of the average daily net assets of Class A and Class C, respectively,
for the fiscal year.

The Plan was adopted in order to permit the implementation of the Fund's
method of distribution. Under this distribution method the Fund offers four
Classes, each with a different distribution arrangement.

With respect to Class A shares, Dean Witter Reynolds compensates its
Financial Advisors by paying them, from proceeds of the FSC, commissions for the
sale of Class A shares, currently a gross sales credit of up to 5.0% of the
amount sold (except as provided in the following sentence) and an annual
residual commission, currently a residual of up to 0.25% of the current value of
the respective accounts for which they are the Financial Advisors or dealers of
record in all cases. On orders of $1 million or more (for which no sales charge
was paid) or net asset value purchases by employer-sponsored employee benefit
plans, whether or not qualified under the Internal Revenue Code, for which the
Transfer Agent serves as Trustee or Dean Witter Reynolds Retirement Plan
Services serves as recordkeeper pursuant to a written Recordkeeping Services
Agreement ("MSDW ELIGIBLE PLANS"), the Investment Manager compensates Financial
Advisors by paying them, from its own funds, a gross sales credit of 1.0% of the
amount sold.

With respect to Class B shares, Dean Witter Reynolds compensates its
Financial Advisors by paying them, from its own funds, commissions for the sale
of Class B shares, currently a gross sales credit of up to 5.0% of the amount
sold (except as provided in the following sentence) and an annual residual
commission, currently a residual of up to 0.25% of the current value (not
including reinvested dividends or distributions) of the amount sold in all
cases. In the case of Class B shares purchased by MSDW Eligible Plans, Dean
Witter Reynolds compensates its Financial Advisors by paying them, from its own
funds, a gross sales credit of 3.0% of the amount sold.

With respect to Class C shares, Dean Witter Reynolds compensates its
Financial Advisors by paying them, from its own funds, commissions for the sale
of Class C shares, currently a gross sales credit of up to 1.0% of the amount
sold and an annual residual commission, currently up to 1.0% of the current
value of the respective accounts for which they are the Financial Advisors of
record.

With respect to Class D shares other than shares held by participants in the
Investment Manager's mutual fund asset allocation program, the Investment
Manager compensates Dean Witter Reynolds's Financial Advisors by paying them,
from its own funds, commissions for the sale of Class D shares, currently a
gross sales credit of up to 1.0% of the amount sold. There is a chargeback of
100% of the amount paid if the Class D shares are redeemed in the first year and
a chargeback of 50% of the amount paid if the Class D shares are redeemed in the
second year after purchase. The Investment Manager also compensates Dean Witter
Reynolds's Financial Advisors by paying them, from its own funds, an annual
residual commission, currently up to 0.10% of the current value of the
respective accounts for which they are the Financial Advisors of record (not
including accounts of participants in the Investment Manager's mutual fund asset
allocation program).

The gross sales credit is a charge which reflects commissions paid by Dean
Witter Reynolds to its Financial Advisors and Dean Witter Reynolds's
Fund-associated distribution-related expenses, including sales compensation, and
overhead and other branch office distribution-related expenses including
(a) the expenses of operating Dean Witter Reynolds's branch offices in
connection with the sale of Fund shares, including lease costs, the salaries and
employee benefits of operations and sales support personnel, utility costs,
communications costs and the costs of stationery and supplies; (b) the costs of
client sales seminars; (c) travel expenses of mutual fund sales coordinators to
promote the sale of Fund shares; and (d) other expenses relating to branch
promotion of Fund sales.

The Investment Manager pays a retention fee to Financial Advisors at an
annual rate of 0.05% of the value of shares of the Fund sold after January 1,
2000 and held for at least one year. Shares purchased through the reinvestment
of dividends will be eligible for a retention fee, provided that such dividends

25
<PAGE>
were earned on shares otherwise eligible for a retention fee payment. Shares
owned in variable annuities, closed-end fund shares and shares held in 401(k)
plans where the Transfer Agent or Dean Witter Reynolds's Retirement Plan
Services is either recordkeeper or trustee are not eligible for a retention fee.

For the first year only, the retention fee is paid on any shares of the Fund
sold after January 1, 2000 and held by shareholders on December 31, 2000.

The retention fees are paid by the Investment Manager from its own assets,
which may include profits from investment management fees payable under the
Management Agreement, as well as from borrowed funds.

The distribution fee that the Distributor receives from the Fund under the
Plan, in effect, offsets distribution expenses incurred under the Plan on behalf
of the Fund and, in the case of Class B shares, opportunity costs, such as the
gross sales credit and an assumed interest charge thereon ("CARRYING CHARGE").
These expenses may include the cost of Fund-related educational and/or
business-related trips or payment of Fund-related educational and/or promotional
expenses of Financial Advisors. In the Distributor's reporting of the
distribution expenses to the Fund, in the case of Class B shares, such assumed
interest (computed at the "BROKER'S CALL RATE") has been calculated on the gross
credit as it is reduced by amounts received by the Distributor under the Plan
and any contingent deferred sales charges received by the Distributor upon
redemption of shares of the Fund. No other interest charge is included as a
distribution expense in the Distributor's calculation of its distribution costs
for this purpose. The broker's call rate is the interest rate charged to
securities brokers on loans secured by exchange-listed securities.

The Fund is authorized to reimburse expenses incurred or to be incurred in
promoting the distribution of the Fund's Class A and Class C shares and in
servicing shareholder accounts. Reimbursement will be made through payments at
the end of each month. The amount of each monthly payment may in no event exceed
an amount equal to a payment at the annual rate of 0.25%, in the case of
Class A, and 1.0%, in the case of Class C, of the average net assets of the
respective Class during the month. No interest or other financing charges, if
any, incurred on any distribution expenses on behalf of Class A and Class C will
be reimbursable under the Plan. With respect to Class A, in the case of all
expenses other than expenses representing the service fee, and, with respect to
Class C, in the case of all expenses other than expenses representing a gross
sales credit or a residual to Financial Advisors and other authorized financial
representatives, such amounts shall be determined at the beginning of each
calendar quarter by the Directors, including, a majority of the Independent
Directors. Expenses representing the service fee (for Class A) or a gross sales
credit or a residual to Financial Advisors and other authorized financial
representatives (for Class C) may be reimbursed without prior determination. In
the event that the Distributor proposes that monies shall be reimbursed for
other than such expenses, then in making quarterly determinations of the amounts
that may be reimbursed by the Fund, the Distributor will provide and the
Directors will review a quarterly budget of projected distribution expenses to
be incurred on behalf of the Fund, together with a report explaining the
purposes and anticipated benefits of incurring such expenses. The Directors will
determine which particular expenses, and the portions thereof, that may be borne
by the Fund, and in making such a determination shall consider the scope of the
Distributor's commitment to promoting the distribution of the Fund's Class A and
Class C shares.

Each Class paid 100% of the amounts accrued under the Plan with respect to
that Class for the fiscal year ended October 31, 1999 to the Distributor. The
Distributor and Dean Witter Reynolds estimate that they have spent, pursuant to
the Plan, $129,224,155 on behalf of Class B since the inception of the Fund. It
is estimated that this amount was spent in approximately the following ways: (i)
3.50% ($4,520,519)--advertising and promotional expenses; (ii) 0.33%
($432,529)--printing of prospectuses for distribution to other than current
shareholders; and (iii) 96.17% ($124,271,107)--other expenses, including the
gross sales credit and the carrying charge, of which 10.12% ($12,579,176)
represents carrying charges, 37.21% ($46,240,459) represents commission credits
to Dean Witter Reynolds branch offices and other

26
<PAGE>
selected broker-dealers for payments of commissions to Financial Advisors and
other selected broker-dealer representatives, and 52.67% ($65,451,472)
represents overhead and other branch office distribution-related expenses. The
amounts accrued by Class A and a portion of the amounts accrued by Class C under
the Plan during the fiscal year ended October 31, 1999 were service fees. The
remainder of the amounts accrued by Class C were for expenses which relate to
compensation of sales personnel and associated overhead expenses.

In the case of Class B shares, at any given time, the expenses of
distributing shares of the Fund may be more or less than the total of (i) the
payments made by the Fund pursuant to the Plan; and (ii) the proceeds of CDSCs
paid by investors upon redemption of shares. For example, if $1 million in
expenses in distributing Class B shares of the Fund had been incurred and
$750,000 had been received as described in (i) and (ii) above, the excess
expense would amount to $250,000. The Distributor has advised the Fund that in
the case of Class B shares the excess distribution expenses, including the
carrying charge designed to approximate the opportunity costs incurred by Dean
Witter Reynolds which arise from it having advanced monies without having
received the amount of any sales charges imposed at the time of sale of the
Fund's Class B shares, totaled $39,835,429 as of October 31, 1999 (the end of
the Fund's fiscal year), which was equal to 6.29% of the net assets of Class B
on such date. Because there is no requirement under the Plan that the
Distributor be reimbursed for all distribution expenses with respect to Class B
shares or any requirement that the Plan be continued from year to year, this
excess amount does not constitute a liability of the Fund. 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 CDSCs paid by
investors upon redemption of shares, if for any reason the Plan is terminated,
the Trustees will consider at that time the manner in which to treat such
expenses. Any cumulative expenses incurred, but not yet recovered through
distribution fees or CDSCs, may or may not be recovered through future
distribution fees or CDSCs.

In the case of Class A 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 commission credited to Morgan Stanley Dean Witter Financial Advisors
and other authorized broker-dealer representatives at the time of sale may be
reimbursed in the subsequent calendar year. The Distributor has advised the Fund
that unreimbursed expenses representing a gross sales commission credited to
Morgan Stanley Dean Witter Financial Advisors and other authorized broker-dealer
representatives at the time of sale totaled $28,149 in the case of Class C at
December 31, 1999 (end of the calendar year), which amount was equal to 0.19% of
the net assets of Class C on such date, and that there were no such expenses
that may be reimbursed in the subsequent year in the case of Class A on such
date. No interest or other financing charges will be incurred on any Class A or
Class C distribution expenses incurred by the Distributor under the Plan or on
any unreimbursed expenses due to the Distributor pursuant to the Plan.

No interested person of the Fund nor any Independent Director has any direct
financial interest in the operation of the Plan except to the extent that the
Distributor, the Investment Manager, Dean Witter Reynolds, MSDW Services Company
or certain of their employees may be deemed to have such an interest as a result
of benefits derived from the successful operation of the Plan or as a result of
receiving a portion of the amounts expended thereunder by the Fund.

On an annual basis, the Directors, including a majority of the Independent
Directors, consider whether the Plan should be continued. Prior to approving the
last continuation of the Plan, the Directors requested and received from the
Distributor and reviewed all the information which they deemed necessary to
arrive at an informed determination. In making their determination to continue
the Plan, the Directors considered: (1) the Fund's experience under the Plan and
whether such experience indicates that the Plan is operating as anticipated;
(2) the benefits the Fund had obtained, was obtaining and would be likely to
obtain under the Plan, including that: (a) the Plan is essential in order to
give Fund investors a choice of alternatives for payment of distribution and
service charges and to enable the Fund to continue to grow and avoid a pattern
of net redemptions which, in turn, are essential for effective

27
<PAGE>
investment management; and (b) without the compensation to individual brokers
and the reimbursement of distribution and account maintenance expenses of Dean
Witter Reynolds's branch offices made possible by the 12b-1 fees, Dean Witter
Reynolds could not establish and maintain an effective system for distribution,
servicing of Fund shareholders and maintenance of shareholder accounts; and (3)
what services had been provided and were continuing to be provided under the
Plan to the Fund and its shareholders. Based upon their review, the Directors,
including each of the Independent Directors, determined that continuation of the
Plan would be in the best interest of the Fund and would have a reasonable
likelihood of continuing to benefit the Fund and its shareholders. In the
Directors' quarterly review of the Plan, they will consider its continued
appropriateness and the level of compensation provided therein.

The Plan may not be amended to increase materially the amount to be spent
for the services described therein without approval by the shareholders of the
affected Class or Classes of the Fund, and all material amendments to the Plan
must also be approved by the Directors in the manner described above. The Plan
may be terminated at any time, without payment of any penalty, by vote of a
majority of the Independent Directors or by a vote of a majority of the
outstanding voting securities of the Fund (as defined in the Investment Company
Act) on not more than thirty days' written notice to any other party to the
Plan. So long as the Plan is in effect, the election and nomination of
Independent Directors shall be committed to the discretion of the Independent
Directors.

F. OTHER SERVICE PROVIDERS

(1) TRANSFER AGENT/DIVIDEND-PAYING AGENT

Morgan Stanley Dean Witter Trust FSB is the Transfer Agent for the Fund's
shares and the Dividend Disbursing Agent for payment of dividends and
distributions on Fund shares and Agent for shareholders under various investment
plans. The principal business address of the Transfer Agent is Harborside
Financial Center, Plaza Two, Jersey City, NJ 07311.

(2) CUSTODIAN AND INDEPENDENT ACCOUNTANTS

The Chase Manhattan Bank, One Chase Plaza, New York, NY 10005 is the
Custodian of the Fund's assets. The Custodian has contracted with various
foreign banks and depositaries to hold portfolio securities of non-U.S. issuers
on behalf of the Fund. Any of the Fund's cash balances with the Custodian in
excess of $100,000 are unprotected by federal deposit insurance. These balances
may, at times, be substantial.

PricewaterhouseCoopers LLP, 1177 Avenue of the Americas, New York, NY 10036,
serves as the independent accountants of the Fund. The independent accountants
are responsible for auditing the annual financial statements of the Fund.

(3) AFFILIATED PERSONS

The Transfer Agent is an affiliate of the Investment Manager, and of the
Distributor. As Transfer Agent and Dividend Disbursing Agent, the Transfer
Agent's responsibilities include maintaining shareholder accounts, disbursing
cash dividends and reinvesting dividends, processing account registration
changes, handling purchase and redemption transactions, mailing prospectuses and
reports, mailing and tabulating proxies, processing share certificate
transactions, and maintaining shareholder records and lists. For these services,
the Transfer Agent receives a per shareholder account fee from the Fund and is
reimbursed for its out-of-pocket expenses in connection with such services.

VI. BROKERAGE ALLOCATION AND OTHER PRACTICES
- --------------------------------------------------------------------------------

A. BROKERAGE TRANSACTIONS

Subject to the general supervision of the Directors, the Investment Manager
and the Sub-Advisor are responsible for decisions to buy and sell securities for
the Fund, the selection of brokers and dealers to effect the transactions, and
the negotiation of brokerage commissions, if any. Purchases and sales of
secu-rities on a stock exchange are effected through brokers who charge a
commission for their

28
<PAGE>
services. In the over-the-counter market, securities are generally traded on a
"net" basis with non-affiliated dealers acting as principal for their own
accounts without a stated commission, although the price of the security usually
includes a profit to the dealer. The Fund also expects that securities will be
purchased at times in underwritten offerings where the price includes a fixed
amount of compensation, generally referred to as the underwriter's concession or
discount. Options and futures transactions will usually be effected through a
broker and a commission will be charged. On occasion, the Fund may also purchase
certain money market instruments directly from an issuer, in which case no
commissions or discounts are paid.

For the fiscal years ended October 31, 1997, 1998 and 1999, the Fund paid a
total of $6,754,100, $2,980,529 and $3,862,078, respectively, in brokerage
commissions.

B. COMMISSIONS

Pursuant to an order of the SEC, the Fund may effect principal transactions
in certain money market instruments with Dean Witter Reynolds. The Fund will
limit its transactions with Dean Witter Reynolds to U.S. Government and
government agency securities, bank money instruments (i.e., certificates of
deposit and bankers' acceptances) and commercial paper. The transactions will be
effected with Dean Witter Reynolds only when the price available from Dean
Witter Reynolds is better than that available from other dealers.

During the fiscal years ended October 31, 1997, 1998 and 1999, the Fund did
not effect any principal transactions with Dean Witter Reynolds.

Brokerage transactions in securities listed on exchanges or admitted to
unlisted trading privileges may be effected through Dean Witter Reynolds, Morgan
Stanley & Co. and other affiliated brokers and dealers. In order for an
affiliated broker or dealer to effect any portfolio transactions on an exchange
for the Fund, the commissions, fees or other remuneration received by the
affiliated broker or dealer must be reasonable and fair compared to the
commissions, fees or other remuneration paid to other brokers in connection with
comparable transactions involving similar securities being purchased or sold on
an exchange during a comparable period of time. This standard would allow the
affiliated broker or dealer to receive no more than the remuneration which would
be expected to be received by an unaffiliated broker in a commensurate
arm's-length transaction. Furthermore, the Directors, including the Independent
Directors, have adopted procedures which are reasonably designed to provide that
any commissions, fees or other remuneration paid to an affiliated broker or
dealer are consistent with the foregoing standard. The Fund does not reduce the
management fee it pays to the Investment Manager by any amount of the brokerage
commissions it may pay to an affiliated broker or dealer.

During the fiscal years ended October 31, 1997, 1998 and 1999, the Fund did
not pay any brokerage commissions to Dean Witter Reynolds.

During the fiscal years ended October 31, 1998 and 1999, the Fund paid a
total of $13,320 and $202,915, respectively, in brokerage commissions to Morgan
Stanley & Co., which broker-dealer became an affiliate of the Investment Manager
and of the Sub-Advisor on May 31, 1997 upon consummation of the merger of Dean
Witter, Discover & Co. with Morgan Stanley Group Inc. During the fiscal year
ended October 31, 1999, the brokerage commissions paid to Morgan Stanley & Co.
represented approximately 5.25% of the total brokerage commissions paid by the
Fund for this period and were paid on account of transactions having an
aggregate dollar value equal to approximately 6.06% of the aggregate dollar
value of all portfolio transactions of the Fund during the year for which
commissions were paid.

C. BROKERAGE SELECTION

The policy of the Fund regarding purchases and sales of securities for its
portfolio is that primary consideration will be given to obtaining the most
favorable prices and efficient executions of transactions. Consistent with this
policy, when securities transactions are effected on a stock exchange, the
Fund's policy is to pay commissions which are considered fair and reasonable
without necessarily determining that the lowest possible commissions are paid in
all circumstances. The Fund believes that

29
<PAGE>
a requirement always to seek the lowest possible commission cost could impede
effective portfolio management and preclude the Fund and the Investment Manager
and the Sub-Advisor from obtaining a high quality of brokerage and research
services. In seeking to determine the reasonableness of brokerage commissions
paid in any transaction, the Investment Manager and the Sub-Advisor rely upon
their experience and knowledge regarding commissions generally charged by
various brokers and on its judgment in evaluating the brokerage and research
services received from the broker effecting the transaction. These
determinations are necessarily subjective and imprecise, as in most cases an
exact dollar value for those services is not ascertainable.

The Fund anticipates that certain of its transactions involving foreign
securities will be effected on foreign securities exchanges. Fixed commissions
on such transactions are generally higher than negotiated commissions on
domestic transactions. There is also generally less government supervision and
regulation of foreign securities exchanges and brokers than in the United
States.

In seeking to implement the Fund's policies, the Investment Manager and the
Sub-Advisor effect transactions with those brokers and dealers who the
Investment Manager and/or the Sub-Advisor believe provide the most favorable
prices and are capable of providing efficient executions. If the Investment
Manager and/or the Sub-Advisor believe the prices and executions are obtainable
from more than one broker or dealer, it may give consideration to placing
portfolio transactions with those brokers and dealers who also furnish research
and other services to the Fund or the Investment Manager and the Sub-Advisor.
The services may include, but are not limited to, any one or more of the
following: information as to the availability of securities for purchase or
sale; statistical or factual information or opinions pertaining to investment;
wire services; and appraisals or evaluations of portfolio securities. The
information and services received by the Investment Manager and/or the
Sub-Advisor from brokers and dealers may be of benefit to the Investment Manager
and/or the Sub-Advisor in the management of accounts of some of its other
clients and may not in all cases benefit the Fund directly.

The Investment Manager and the Sub-Advisor currently serve as advisors to a
number of clients, including other investment companies, and may in the future
act as investment manager or advisor to others. It is the practice of the
Investment Manager and the Sub-Advisor to cause purchase and sale transactions
to be allocated among the Fund and others whose assets it manages in such manner
as it deems equitable. In making such allocations among the Fund and other
client accounts, various factors may be considered, including the respective
investment objectives, the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for investment, the size of
investment commitments generally held and the opinions of the persons
responsible for managing the portfolios of the Fund and other client accounts.
In the case of certain initial and secondary public offerings, the Investment
Manager utilizes a pro rata allocation process based on the size of the Morgan
Stanley Dean Witter Funds involved and the number of shares available from the
public offering.

D. DIRECTED BROKERAGE

During the fiscal year ended October 31, 1999, the Fund paid $142,419 in
brokerage commissions in connection with transactions in the aggregate amount of
$61,761,393 to brokers because of research services provided.

E. REGULAR BROKER-DEALERS

During the fiscal year ended October 31, 1999, the Fund did not purchase
securities issued by brokers or dealers that were among the ten brokers or the
ten dealers which executed transactions for or with the Fund in the largest
dollar amounts during the year.

VII. CAPITAL STOCK AND OTHER SECURITIES
- --------------------------------------------------------------------------------

The Fund is authorized to issue 2 billion shares of common stock of $0.01
par value. Shares of the Fund, when issued, are fully paid, non-assessable,
fully transferable and redeemable at the option of the holder. All shares are
equal as to earnings, assets and voting privileges. There are no conversion,
preemptive or other subscription rights. In the event of liquidation, each share
of common stock of the

30
<PAGE>
Fund is entitled to its portion of all of the Fund's assets after all debts and
expenses have been paid. Except for agreements entered into by the Fund in its
ordinary course of business within the limitations of the Fund's fundamental
investment policies (which may be modified only by shareholder vote), the Fund
will not issue any securities other than common stock.

The Fund's Articles of Incorporation permits the Directors to authorize the
creation of additional series of shares (the proceeds of which would be invested
in separate, independently managed portfolios) and additional Classes of shares
within any series. The Directors have not presently authorized any such
additional series or Classes of shares other than as set forth in the
PROSPECTUS.

The shares of the Fund do not have cumulative voting rights, which means
that the holders of more than 50% of the shares voting for the election of
Directors can elect 100% of the Directors if they choose to do so, and in such
event, the holders of the remaining less than 50% of the shares voting for the
election of Directors will not be able to elect any person or persons to the
Board.

The Fund's By-Laws provide that one or more of the Fund's Directors may be
removed, either with or without cause, at any time by the affirmative vote of
the Fund's shareholders holding a majority of the outstanding shares entitled to
vote for the election of Directors. A special meeting of the shareholders of the
Fund will be called by the Fund's Secretary upon the written request of
shareholders entitled to vote at least 10% of the Fund's outstanding shares. The
Fund will also comply with the provisions of Section 16(c) of the Investment
Company Act.

All of the Directors have been elected by the shareholders of the Fund, most
recently at a Special Meeting of Shareholders held on May 21, 1997. The
Directors themselves have the power to alter the number and the terms of office
of the Directors (as provided for in the Articles of Incorporation), and they
may at any time lengthen or shorten their own terms or make their terms of
unlimited duration and appoint their own successors, provided that always at
least a majority of the Directors has been elected by the shareholders of the
Fund.

VIII. PURCHASE, REDEMPTION AND PRICING OF SHARES
- --------------------------------------------------------------------------------

A. PURCHASE/REDEMPTION OF SHARES

Information concerning how Fund shares are offered to the public (and how
they are redeemed and exchanged) is provided in the Fund's PROSPECTUS.

TRANSFER AGENT AS AGENT. With respect to the redemption or repurchase of
Fund shares, the application of proceeds to the purchase of new shares in the
Fund or any other Morgan Stanley Dean Witter Funds and the general
administration of the exchange privilege, the Transfer Agent acts as agent for
the Distributor and for the shareholder's authorized broker-dealer, if any, in
the performance of such functions. With respect to exchanges, redemptions or
repurchases, the Transfer Agent shall be liable for its own negligence and not
for the default or negligence of its correspondents or for losses in transit.
The Fund shall not be liable for any default or negligence of the Transfer
Agent, the Distributor or any authorized broker-dealer.

The Distributor and any authorized broker-dealer have appointed the Transfer
Agent to act as their agent in connection with the application of proceeds of
any redemption of Fund shares to the purchase of shares of any other Morgan
Stanley Dean Witter Fund and the general administration of the exchange
privilege. No commission or discounts will be paid to the Distributor or any
authorized broker-dealer for any transaction pursuant to the exchange privilege.

TRANSFERS OF SHARES. In the event a shareholder requests a transfer of Fund
shares to a new registration, the shares will be transferred without sales
charge at the time of transfer. With regard to the status of shares which are
either subject to the CDSC or free of such charge (and with regard to the length
of time shares subject to the charge have been held), any transfer involving
less than all of the shares in an account will be made on a pro rata basis (that
is, by transferring shares in the same

31
<PAGE>
proportion that the transferred shares bear to the total shares in the account
immediately prior to the transfer). The transferred shares will continue to be
subject to any applicable CDSC as if they had not been so transferred.

B. OFFERING PRICE

The Fund's Class B, Class C and Class D shares are offered at net asset
value and the Class A shares are offered at net asset value per share plus any
applicable FSC which is distributed among the Fund's Distributor, Dean Witter
Reynolds and other authorized dealers as described in Section "V. Investment
Management and Other Services--E. Rule 12b-1 Plan."

The price of Fund shares, called "NET ASSET VALUE," is based on the value of
the Fund's portfolio securities. Net asset value per share of each Class is
calculated by dividing the value of the portion of the Fund's securities and
other assets attributable to that Class, less the liabilities attributable to
that Class, by the number of shares of that Class outstanding. The assets of
each Class of shares are invested in a single portfolio. The net asset value of
each Class, however, will differ because the Classes have different ongoing
fees.

In the calculation of the Fund's net asset value: (1) an equity portfolio
security listed or traded on the New York or American Stock Exchange or other
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 a security is traded on more than
one exchange, the security is valued on the exchange designated as the primary
market pursuant to procedures adopted by the Directors); and (2) all other
portfolio securities for which over-the-counter market quotations are readily
available are valued at the latest bid price. When market quotations are not
readily available, including circumstances under which it is determined by the
Investment Manager or the Sub-Advisor that sale or bid prices are not reflective
of a security's market value, portfolio securities are valued at their fair
value as determined in good faith under procedures established by and under the
general supervision of the Fund's Directors. For valuation purposes, quotations
of foreign portfolio securities, other assets and liabilities and forward
contracts stated in foreign currency are translated into U.S. dollar equivalents
at the prevailing market rates prior to the close of the New York Stock
Exchange.

Short-term debt securities with remaining maturities of sixty days or less
at the time of purchase are valued at amortized cost, unless the Directors
determine such does not reflect the securities' market value, in which case
these securities will be valued at their fair value as determined by the
Directors.

Certain of the Fund's portfolio securities may be valued by an outside
pricing service approved by the Fund's Directors. The pricing service may
utilize a matrix system incorporating security quality, maturity and coupon as
the evaluation model parameters, and/or research evaluations by its staff,
including review of broker-dealer market price quotations in determining what it
believes is the fair valuation of the portfolio securities valued by such
pricing service.

Listed options on debt securities are valued at the latest sale price on the
exchange on which they are listed unless no sales of such options have taken
place that day, in which case they will be valued at the mean between their
latest bid and asked prices. Unlisted options on debt securities and all options
on equity securities are valued at the mean between their latest bid and asked
prices. Futures are valued at the latest sale price on the commodities exchange
on which they trade unless the Directors determine such price does not reflect
their market value, in which case they will be valued at their fair value as
determined in good faith under procedures established by and under the
supervision of the Directors.

Generally, trading in foreign securities, as well as corporate bonds, U.S.
Government securities and money market instruments, is substantially completed
each day at various times prior to the close of the New York Stock Exchange. The
values of such securities used in computing the net asset value of the Fund's
shares are determined as of such times. Foreign currency exchange rates are also
generally determined prior to the close of the New York Stock Exchange.
Occasionally, events which may affect the values of such securities and such
exchange rates may occur between the times at which they are determined and the
close of the New York Stock Exchange and will therefore not be reflected in the

32
<PAGE>
computation of the Fund's net asset value. If events that may affect the value
of such securities occur during such period, then these securities may be valued
at their fair value as determined in good faith under procedures established by
and under the supervision of the Directors.

IX. TAXATION OF THE FUND AND SHAREHOLDERS
- --------------------------------------------------------------------------------

The Fund generally will make two basic types of distributions: ordinary
dividends and long-term capital gain distributions. These two types of
distributions are reported differently on a shareholder's income tax return and
they are also subject to different rates of tax. The tax treatment of the
investment activities of the Fund will affect the amount and timing and
character of the distributions made by the Fund. Tax issues relating to the Fund
are not generally a consideration for shareholders such as tax exempt entities
and tax-advantaged retirement vehicles such as an IRA or 401(k) plan.
Shareholders are urged to consult their own tax professionals regarding specific
questions as to federal, state or local taxes.

INVESTMENT COMPANY TAXATION. The Fund intends to remain qualified as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986. As such, the Fund will not be subject to federal income tax on its net
investment income and capital gains, if any, to the extent that it distributes
such income and capital gains to its shareholders.

The Fund generally intends to distribute sufficient income and gains so that
the Fund will not pay corporate income tax on its earnings. The Fund also
generally intends to distribute to its shareholders in each calendar year a
sufficient amount of ordinary income and capital gains to avoid the imposition
of a 4% excise tax. However, the Fund may instead determine to retain all or
part of any net long-term capital gains in any year for reinvestment. In such
event, the Fund will pay federal income tax (and possibly excise tax) on such
retained gains.

Gains or losses on sales of securities by the Fund will be long-term capital
gains or losses if the securities have a tax holding period of more than one
year. Gains or losses on the sale of securities with a tax holding period of one
year or less will be short-term gains or losses.

Gains or losses on the Fund's transactions in listed non-equity options,
futures and options on futures generally are treated as 60% long-term and 40%
short-term. When the Fund engages in options and futures transactions, various
tax rules may accelerate or defer recognition of certain gains and losses,
change the character of certain gains or losses, or alter the holding period of
other investments held by the Fund. The application of these rules would
therefore also affect the amount, timing and character of distributions made by
the Fund.

Under certain tax rules, the Fund may be required to accrue a portion of any
discount at which certain securities are purchased as income each year even
though the Fund receives no payments in cash on the security during the year. To
the extent that the Fund invests in such securities, it would be required to pay
out such accrued discount as an income distribution in each year in order to
avoid taxation at the Fund level. Such distributions will be made from the
available cash of the Fund or by liquidation of portfolio securities if
necessary. If a distribution of cash necessitates the liquidation of portfolio
securities, the Investment Manager will select which securities to sell. The
Fund may realize a gain or loss from such sales. In the event the Fund realizes
net capital gains from such transactions, its shareholders may receive a larger
capital gain distribution, if any, than they would in the absence of such
transactions.

TAXATION OF DIVIDENDS AND DISTRIBUTIONS. Shareholders normally will have to
pay federal income taxes, and any state and/or local income taxes, on the
dividends and other distributions they receive from the Fund. Such dividends and
distributions, to the extent that they are derived from net investment income or
short-term capital gains, are taxable to the shareholder as ordinary income
regardless of whether the shareholder receives such payments in additional
shares or in cash.

Distributions of net long-term capital gains, if any, are taxable to
shareholders as long-term capital gains regardless of how long a shareholder has
held the Fund's shares and regardless of whether the distribution is received in
additional shares or in cash. The maximum tax on long-term capital gains
applicable to individuals is 20%.

33
<PAGE>
Shareholders are generally taxed on any ordinary dividend or capital gain
distributions from the Fund in the year they are actually distributed. However,
if any such dividends or distributions are declared in October, November or
December and paid in January then such amounts will be treated for tax purposes
as received by the shareholders on December 31, to shareholders of record of
such month.

Shareholders who are not citizens or residents of the United States and
certain foreign entities may be subject to withholding of United States tax on
distributions made by the Fund of investment income and short term capital
gains.

After the end of each calendar year, shareholders will be sent full
information on their dividends and capital gain distributions for tax purposes,
including the portion taxable as ordinary income, and the portion taxable as
long-term capital gains.

PURCHASES AND REDEMPTIONS AND EXCHANGES OF FUND SHARES. Any dividend or
capital gains distribution received by a shareholder from any investment company
will have the effect of reducing the net asset value of the shareholder's stock
in that company by the exact amount of the dividend or capital gains
distribution. Furthermore, such dividends and capital gains distributions are
subject to federal income taxes. If the net asset value of the shares should be
reduced below a shareholder's cost as a result of the payment of dividends or
the distribution of realized long-term capital gains, such payment or
distribution would be in part a return of the shareholder's investment but
nonetheless would be taxable to the shareholder. Therefore, an investor should
consider the tax implications of purchasing Fund shares immediately prior to a
distribution record date.

In general, a sale of shares results in capital gain or loss, and for
individual shareholders, is taxable at a federal rate dependent upon the length
of time the shares were held. A redemption of a shareholder's Fund shares is
normally treated as a sale for tax purposes. Fund shares held for a period of
one year or less will, for tax purposes, generally result in short-term gains or
losses and those held for more than one year generally result in long-term gain
or loss. Under current law, the maximum tax on long-term capital gains is 20%.
Any loss realized by shareholders upon a sale or redemption of shares within six
months of the date of their purchase will be treated as a long-term capital loss
to the extent of any distributions of net long-term capital gains with respect
to such shares during the six-month period.

Gain or loss on the sale or redemption of shares in the Fund is measured by
the difference between the amount received and the tax basis of the shares.
Shareholders should keep records of investments made (including shares acquired
through reinvestment of dividends and distributions) so they can compute the tax
basis of their shares. Under certain circumstances a shareholder may compute and
use an average cost basis in determining the gain or loss on the sale or
redemption of shares.

Exchanges of Fund shares for shares of another fund, including shares of
other Morgan Stanley Dean Witter Funds, are also subject to similar tax
treatment. Such an exchange is treated for tax purposes as a sale of the
original shares in the first fund, followed by the purchase of shares in the
second fund.

If a shareholder realizes a loss on the redemption or exchange of a fund's
shares and reinvests in that fund's shares within 30 days before or after the
redemption or exchange, the transactions may be subject to the "wash sale"
rules, resulting in a postponement of the recognition of such loss for tax
purposes.

X. UNDERWRITERS
- --------------------------------------------------------------------------------

The Fund's shares are offered to the public on a continuous basis. The
Distributor, as the principal underwriter of the shares, has certain obligations
under the Distribution Agreement concerning the distribution of the shares.
These obligations and the compensation the Distributor receives are described
above in the sections titled "Principal Underwriter" and "Rule 12b-1 Plans."

XI. CALCULATION OF PERFORMANCE DATA
- --------------------------------------------------------------------------------

From time to time, the Fund may quote its "total return" in advertisements
and sales literature. These figures are computed separately for Class A, Class
B, Class C and Class D shares. The Fund's "average annual total return"
represents an annualization of the Fund's total return over a particular period
and is computed by finding the annual percentage rate which will result in the
ending redeemable value of a hypothetical $1,000 investment made at the
beginning of a one, five or ten year period, or for the period from the date of
commencement of operations, if shorter than any of the foregoing. The ending
redeemable value is reduced by any contingent deferred sales charge ("CDSC") at
the end of the one, five, ten year or other period. For the purpose of this
calculation, it is assumed that all dividends

34
<PAGE>
and distributions are reinvested. The formula for computing the average annual
total return involves a percentage obtained by dividing the ending redeemable
value by the amount of the initial investment (which in the case of Class A
shares is reduced by the Class A initial sales charge), taking a root of the
quotient (where the root is equivalent to the number of years in the period) and
subtracting 1 from the result. The average annual total returns for Class B for
the one year, five year and the life of the Fund periods ended October 31, 1999
were 42.89%, -6.18% and 5.79%, respectively. The average annual total returns of
Class A for the fiscal year ended October 31, 1999 and for the period July 28,
1997 (inception of the Class) through October 31, 1999 were 41.15% and -13.17%,
respectively. The average annual total returns of Class C for the fiscal year
ended October 31, 1999 and for the period July 28, 1997 (inception of the Class)
through October 31, 1999 were 46.94% and -11.60%, respectively. The average
annual total returns of Class D for the fiscal year ended October 31, 1999 and
for the period July 28, 1997 (inception of the Class) through October 31, 1999
were 49.39% and -10.85%, respectively.

In addition, the Fund may advertise its total return for each Class over
different periods of time by means of aggregate, average, year-by-year or other
types of total return figures. These calculations may or may not reflect the
imposition of the maximum front-end sales charge for Class A or the deduction of
the CDSC for each of Class B and Class C which, if reflected, would reduce the
performance quoted. For example, the average annual total return of the Fund may
be calculated in the manner described above, but without deduction for any
applicable sales charge. Based on this calculation, the average annual total
returns of Class B for the one year, five year and the life of the Fund periods
ended October 31, 1999, were 47.89%, -5.83% and 5.79%, respectively. Based on
this calculation, the average annual total returns of Class A for the fiscal
year ended October 31, 1999 and for the period July 28, 1997 through
October 31, 1999 were 48.98% and -11.07%, respectively, the average annual total
returns of Class C for the fiscal year ended October 31, 1999 and for the period
July 28, 1997 through October 31, 1999 were 47.94% and -11.60%, respectively,
and the average annual total returns of Class D for the fiscal year ended
October 31, 1999 and for the period July 28, 1997 through October 31, 1999 were
49.39% and -10.85%, respectively.

In addition, the Fund may compute its aggregate total return for each Class
for specified periods by determining the aggregate percentage rate which will
result in the ending value of a hypothetical $1,000 investment made at the
beginning of the period. For the purpose of this calculation, it is assumed that
all dividends and distributions are reinvested. The formula for computing
aggregate total return involves a percentage obtained by dividing the ending
value (without reduction for any sales charge) by the initial $1,000 investment
and subtracting 1 from the result. Based on the foregoing calculation, the total
returns for Class B for the one year, five year and the life of the Fund periods
ended October 31, 1999, were 47.89%, -25.96% and 65.24%, respectively. Based on
the foregoing calculation, the total returns of Class A for the fiscal year
ended October 31, 1999 and for the period July 28, 1997 through October 31, 1999
were 48.98% and -23.28%, respectively, the total returns of Class C for the
fiscal year ended October 31, 1999 and for the period July 28, 1997 through
October 31, 1999 were 47.94% and -24.32%, respectively, and the total returns of
Class D for the fiscal year ended October 31, 1999 and for the period July 28,
1997 through October 31, 1999 were 49.39% and -22.85%, respectively.

The Fund may also advertise the growth of hypothetical investments of
$10,000, $50,000 and $100,000 in each Class of shares of the Fund by adding 1 to
the Fund's aggregate total return to date (expressed as a decimal and without
taking into account the effect of any applicable CDSC) and multiplying by
$9,475, $48,000 and $97,000 in the case of Class A (investments of $10,000,
$50,000 and $100,000 adjusted for the initial sales charge) or by $10,000,
$50,000 and $100,000 in the case of each of Class B, Class C and Class D, as the
case may be. Investments of $10,000, $50,000 and $100,000 in each Class at
inception of the Class would have grown or declined to the following amounts at
October 31, 1999:

<TABLE>
<CAPTION>
INVESTMENT AT INCEPTION OF:
INCEPTION ------------------------------
CLASS DATE: $10,000 $50,000 $100,000
- ----- --------- ------- ------- --------
<S> <C> <C> <C> <C>
Class A............................................. 7/28/97 $ 7,269 $36,826 $74,418
Class B............................................. 11/30/90 16,524 82,620 165,240
Class C............................................. 7/28/97 7,568 37,840 75,680
Class D............................................. 7/28/97 7,715 38,575 77,150
</TABLE>

The Fund from time to time may also advertise its performance relative to
certain performance rankings and indexes compiled by recognized organizations.

35
<PAGE>
XII. FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

EXPERTS. The financial statements of the Fund for the fiscal year ended
October 31, 1999 included in this STATEMENT OF ADDITIONAL INFORMATION and
incorporated by reference in the PROSPECTUS have been so included and
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.

*****

This STATEMENT OF ADDITIONAL INFORMATION and the PROSPECTUS do not contain
all of the information set forth in the REGISTRATION STATEMENT the Fund has
filed with the SEC. The complete REGISTRATION STATEMENT may be obtained from the
SEC.

36
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999

<TABLE>
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS, BONDS, RIGHTS AND WARRANTS (93.3%)
AUSTRALIA (8.6%)
AIRLINES
746,000 Quantas Airways Ltd............................................................. $ 2,368,280
------------
ALCOHOLIC BEVERAGES
1,070,000 Foster's Brewing Group Ltd...................................................... 2,837,299
------------
BEVERAGES - NON-ALCOHOLIC
369,050 Coca-Cola Amatil Ltd............................................................ 1,136,382
------------
DIVERSIFIED COMMERCIAL SERVICES
87,400 Brambles Industries, Ltd........................................................ 2,452,131
------------
INTERNATIONAL BANKS
373,800 Commonwealth Bank of Australia.................................................. 6,111,757
299,050 National Australia Bank Ltd..................................................... 4,604,186
706,300 Westpac Banking Corp., Ltd...................................................... 4,521,340
------------
15,237,283
------------
MEDIA CONGLOMERATES
706,850 News Corporation Ltd............................................................ 5,099,575
------------
MULTI-SECTOR COMPANIES
532,250 Broken Hill Proprietary Co., Ltd................................................ 5,487,973
------------
OTHER METALS/MINERALS
487,800 Rio Tinto Ltd................................................................... 7,822,699
------------
OTHER TELECOMMUNICATIONS
568,400 Aapt Limited*................................................................... 1,833,394
1,138,250 Telstra Corp. Ltd............................................................... 5,776,582
559,500 Telstra Corporation Ltd......................................................... 1,790,448
------------
9,400,424
------------
PRECIOUS METALS
2,001,700 Normandy Mining Ltd............................................................. 1,515,443
------------
REAL ESTATE
197,100 Lend Lease Corporation Ltd...................................................... 2,262,502
------------
TELECOMMUNICATIONS
820,000 Macquarie Corporate Telecommunications Holdings Limited*........................ 902,513
------------
TOTAL AUSTRALIA................................................................. 56,522,504
------------
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>

CHINA (0.5%)
COAL MINING
2,994,000 Yanzhou Coal Mining Co. Ltd.*................................................... $ 992,412
------------
ELECTRIC UTILITIES
1,666,100 Huaneng Power International, Inc................................................ 493,278
------------
ELECTRONIC COMPONENTS
2,216,000 Great Wall Technology Co. *..................................................... 1,354,959
------------
MUTUAL FUNDS
100,000 Investment Co. of China** *..................................................... 566,000
------------

TOTAL CHINA..................................................................... 3,406,649
------------

HONG KONG (9.5%)
BROADCASTING
595,600 Television Broadcasts Ltd....................................................... 3,181,747
------------
CELLULAR TELEPHONE
1,289,900 China Telecom Ltd.*............................................................. 4,407,588
639,000 SmarTone Telecommunications Holdings Ltd........................................ 2,253,794
------------
6,661,382
------------
DIVERSIFIED MANUFACTURING
207,100 Johnson Electric Holdings Ltd................................................... 1,119,676
------------
INTERNATIONAL BANKS
470,800 Dao Heng Bank Group Ltd......................................................... 2,139,311
212,000 Wing Hang Bank Ltd.............................................................. 691,794
------------
2,831,105
------------
MULTI-SECTOR COMPANIES
1,227,900 Hutchison Whampoa, Ltd.......................................................... 12,328,789
575,300 New World Development Co., Ltd.................................................. 1,088,616
764,800 Swire Pacific Ltd. (Class A).................................................... 3,790,281
------------
17,207,686
------------
OTHER SPECIALTY STORES
527,000 Jardine International Motor Holdings Ltd........................................ 267,960
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
37
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED

<TABLE>
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
OTHER TELECOMMUNICATIONS
488,000 Asia Satellite Telecommunications Holdings Ltd.................................. $ 1,149,566
------------
PACKAGE GOODS/COSMETICS
2,452,000 Hengan International Group Co. Ltd.............................................. 670,722
------------
REAL ESTATE
951,400 Cheung Kong (Holdings) Ltd...................................................... 8,634,061
386,000 Hong Kong Land Holdings Ltd..................................................... 497,940
457,000 Kerry Properties Ltd............................................................ 452,970
1,847,000 New World China Land Ltd.*...................................................... 855,918
1,131,000 Sino Land Co. Ltd............................................................... 516,837
744,400 Sun Hung Kai Properties Ltd..................................................... 6,012,885
------------
16,970,611
------------
SHOE MANUFACTURING
237,000 Yue Yuen Industrial Holdings.................................................... 601,004
------------
TELECOMMUNICATIONS
3,201,900 Cable & Wireless HKT Ltd........................................................ 7,315,920
------------
UTILITIES
433,300 CLP Holdings Ltd................................................................ 1,985,645
------------
WHOLESALE DISTRIBUTORS
1,368,400 Li & Fung Ltd................................................................... 2,377,988
------------
TOTAL HONG KONG................................................................. 62,341,012
------------
INDIA (4.2%)
ALUMINUM
35,000 Hindalco Industries Ltd......................................................... 581,457
------------
COMPUTER SOFTWARE
83,700 Aptech Limited.................................................................. 1,692,463
22,600 BFL Software Limited............................................................ 352,761
1,700 Leading Edge Systems Ltd........................................................ 14,961
25,000 NIIT Limited.................................................................... 1,243,968
86,300 Software Solution Integrated Ltd................................................ 1,865,801
------------
5,169,954
------------
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
CONSTRUCTION/AGRICULTURAL EQUIPMENT/TRUCKS
258,000 Larsen & Toubro Ltd............................................................. $ 2,360,060
39,600 Punjab Tractors Ltd............................................................. 940,273
------------
3,300,333
------------
DIVERSIFIED ELECTRONIC PRODUCTS
600 Satyam Computer Service Ltd..................................................... 17,537
43,200 Satyam Computer Service Ltd. (Bonus Shares)*.................................... 1,260,861
------------
1,278,398
------------
DIVERSIFIED MANUFACTURING
110,208 Grasim Industries Ltd........................................................... 1,069,286
27,693 Grasim Industries Ltd. (Bonus Shares)*.......................................... 264,397
------------
1,333,683
------------
E.D.P. SERVICES
1,700 Infosys Technologies Ltd........................................................ 271,406
6,400 Tata Infotech Limited........................................................... 78,544
------------
349,950
------------
ELECTRICAL PRODUCTS
333,233 Bharat Heavy Electricals Ltd.................................................... 2,052,078
------------
ELECTRONIC DATA PROCESSING
1,000 Digital Equipment (India) Ltd................................................... 13,511
------------
FINANCE COMPANIES
494,350 ICICI Limited................................................................... 897,372
------------
GENERIC DRUGS
30,200 Dr. Reddy's Laboratories Ltd.................................................... 739,040
------------
INTERNATIONAL BANKS
207,000 State Bank of India............................................................. 1,179,596
------------
MAJOR PHARMACEUTICALS
45,850 Hoechst Marion Roussel Ltd...................................................... 766,397
------------
MOTOR VEHICLES
51,500 Bajaj Auto Limited*............................................................. 521,272
49,200 Hero Honda Motors Ltd........................................................... 1,301,335
------------
1,822,607
------------
MOVIES/ENTERTAINMENT
900 Zee Telefilms Ltd............................................................... 91,362
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
38
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED

<TABLE>
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
OIL REFINING/MARKETING
160,500 Hindustan Petroleum Corp. Ltd................................................... $ 589,889
------------
OTHER PHARMACEUTICALS
37,200 Glaxo (India) Limited........................................................... 631,682
1,800 Wockhardt Ltd................................................................... 23,766
------------
655,448
------------
OTHER TELECOMMUNICATIONS
270,000 Mahanagar Telephone Nigam Ltd................................................... 1,063,373
30,000 Videsh Sanchar Nigam Ltd........................................................ 908,203
------------
1,971,576
------------
PACKAGE GOODS/COSMETICS
21,800 Hindustan Lever Ltd............................................................. 1,152,665
------------
SPECIALTY CHEMICALS
635,000 Indo Gulf Corporation Ltd....................................................... 1,039,608
286,000 Reliance Industries Ltd......................................................... 1,534,818
------------
2,574,426
------------
TEXTILES
92,311 Indian Rayon & Industries Ltd................................................... 153,145
------------
TOBACCO
48,400 ITC Ltd......................................................................... 774,100
------------
TOTAL INDIA..................................................................... 27,446,987
------------

INDONESIA (0.6%)
BUILDING MATERIALS
415,100 PT Semen Gresik (Persero)....................................................... 739,302
------------
MUTUAL FUNDS
2,500,000 Batavia Investment Fund Ltd.*................................................... --
------------
PRECIOUS METALS
1,583,000 PT Aneka Tambang Tbk............................................................ 335,088
------------
SPECIALTY FOODS/CANDY
492,500 PT Indofood Sukses Makmur Tbk................................................... 582,372
------------
TELECOMMUNICATIONS
184,032 PT Telekomunikasi Indonesia (ADR)............................................... 1,690,794
------------
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
TOBACCO
311,000 PT Gudang Garam Tbk............................................................. $ 799,066
------------

TOTAL INDONESIA................................................................. 4,146,622
------------

JAPAN (43.5%)
BUILDING PRODUCTS
481,000 Sanwa Shutter Corp.............................................................. 2,077,853
JPY 80,000K Sanwa Shutter Corp. 0.90% due 03/31/06 (Conv.).................................. 763,368
------------
2,841,221
------------
CONSUMER ELECTRONICS/APPLIANCES
86,300 Aiwa Co., Ltd................................................................... 2,104,272
114,500 Rinnai Corp..................................................................... 2,434,650
87,100 Sony Corp....................................................................... 13,595,528
------------
18,134,450
------------
CONSUMER SPECIALTIES
365,000 Casio Computer Co., Ltd......................................................... 2,508,784
------------
DIVERSIFIED ELECTRONIC PRODUCTS
873,000 Hitachi Ltd..................................................................... 9,444,859
95,800 Kyocera Corp.................................................................... 9,196,506
402,000 Matsushita Electric Industrial Co., Ltd......................................... 8,470,673
656,000 NEC Corp........................................................................ 13,287,511
1,164,000 Toshiba Corp.................................................................... 7,330,172
------------
47,729,721
------------
E.D.P. PERIPHERALS
242,000 Mitsumi Electric Co., Ltd....................................................... 6,481,521
------------
ELECTRICAL PRODUCTS
600,000 Furukawa Electric Co............................................................ 4,377,460
------------
ELECTRONIC COMPONENTS
78,000 TDK Corp........................................................................ 7,645,003
------------
ELECTRONIC DATA PROCESSING
447,000 Fujitsu Ltd..................................................................... 13,473,937
------------
ELECTRONIC DISTRIBUTORS
143,000 Ryosan Co., Ltd................................................................. 3,493,664
------------
ENGINEERING & CONSTRUCTION
60,000 Kyudenko Co. Ltd................................................................ 247,672
------------
FINANCE COMPANIES
248,000 Hitachi Credit Corp............................................................. 5,011,424
------------
FOOD CHAINS
87,900 FamilyMart Co., Ltd............................................................. 6,117,644
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
39
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED

<TABLE>
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
HOME BUILDING
505,000 Sekisui Chemical Co., Ltd....................................................... $ 2,486,944
454,000 Sekisui House Ltd............................................................... 4,920,476
------------
7,407,420
------------
HOME FURNISHINGS
46,000 Sangetsu Co., Ltd............................................................... 914,083
------------
INDUSTRIAL MACHINERY/COMPONENTS
394,000 Amada Co., Ltd.................................................................. 3,025,823
331,000 Daifuku Co., Ltd................................................................ 2,157,521
381,000 Daikin Industries, Ltd.......................................................... 4,206,105
192,000 Fuji Machine Manufacturing Co., Ltd............................................. 8,939,234
425,000 Minebea Co., Ltd................................................................ 5,732,217
JPY 19,000K Minebea Co., Ltd. 0.80% due 03/31/03 (Conv.).................................... 295,661
847,000 Mitsubishi Heavy Industries Ltd................................................. 3,325,554
395,000 Tsubakimoto Chain Co............................................................ 2,021,071
------------
29,703,186
------------
INDUSTRIAL SPECIALTIES
326,000 Fujitec Co., Ltd................................................................ 3,633,349
263,000 Lintec Corp..................................................................... 3,474,014
------------
7,107,363
------------
MAJOR PHARMACEUTICALS
278,000 Sankyo Co., Ltd................................................................. 7,926,082
------------
MOTOR VEHICLES
969,000 Nissan Motor Co., Ltd........................................................... 5,813,814
271,000 Suzuki Motor Corp............................................................... 4,120,803
142,000 Toyota Motor Corp............................................................... 4,920,995
------------
14,855,612
------------
OFFICE EQUIPMENT/SUPPLIES
258,000 Canon, Inc...................................................................... 7,306,326
JPY 91,000K Canon, Inc.
1.20% due 12/20/05
(Conv.)....................................................................... 1,683,373
JPY 45,000K Canon, Inc.
1.30% due 12/19/08
(Conv.)....................................................................... 824,662
538,000 Ricoh Co., Ltd.................................................................. 8,785,044
------------
18,599,405
------------
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
OTHER PHARMACEUTICALS
154,000 Ono Pharmaceutical Co., Ltd..................................................... $ 5,026,399
174,000 Yamanouchi Pharmaceutical Co., Ltd.............................................. 7,900,739
------------
12,927,138
------------
PHOTOGRAPHIC PRODUCTS
209,000 Fuji Photo Film Co.............................................................. 6,721,225
------------
POLLUTION CONTROL EQUIPMENT
149,000 Kurita Water Industries Ltd..................................................... 2,746,280
------------
PRINTING/FORMS
262,000 Dai Nippon Printing Co., Ltd.................................................... 4,781,242
147,000 Nissha Printing Co., Ltd........................................................ 1,017,443
------------
5,798,685
------------
REAL ESTATE
700 Chubu Sekiwa Real Estate, Ltd................................................... 5,813
304,000 Mitsubishi Estate Co., Ltd...................................................... 3,049,630
------------
3,055,443
------------
RECREATIONAL PRODUCTS/TOYS
71,400 Nintendo Co., Ltd............................................................... 11,343,669
338,000 Yamaha Corp..................................................................... 2,271,287
------------
13,614,956
------------
SEMICONDUCTORS
28,000 Rohm Co., Ltd................................................................... 6,289,719
------------
SPECIALTY CHEMICALS
674,000 Daicel Chemical Industries, Ltd................................................. 2,264,568
597,000 Kaneka Corp..................................................................... 7,822,838
612,000 Mitsubishi Chemical Corp........................................................ 2,778,881
262,000 NIFCO Inc....................................................................... 3,372,775
411,000 Shin-Etsu Polymer Co., Ltd...................................................... 2,643,467
------------
18,882,529
------------
TELECOMMUNICATIONS
702 Nippon Telegraph & Telephone Corp............................................... 10,782,375
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
40
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED

NEW ZEALAND (0.5%)
AIRLINES
755,800 Air New Zealand Ltd. (Class B).................................................. 1,117,593
------------
TELECOMMUNICATIONS
537,000 Telecom Corporation of New Zealand Ltd.......................................... 2,159,178
------------
TOTAL NEW ZEALAND............................................................... 3,276,771
------------

PHILIPPINES (0.4%)
ALCOHOLIC BEVERAGES
607,860 San Miguel Corp. (Class B)...................................................... 877,012
------------
BROADCASTING
682,500 ABS-CBN Broadcasting Corp.*..................................................... 747,015
------------
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
OTHER TELECOMMUNICATIONS
56,070 Philippine Long Distance Telephone Co........................................... $ 1,164,638
------------

TOTAL PHILIPPINES............................................................... 2,788,665
------------

SINGAPORE (5.3%)
AEROSPACE
1,322,000 Singapore Technologies Engineering Ltd.......................................... 1,916,979
------------
AIRLINES
429,000 Singapore Airlines Ltd.......................................................... 4,542,960
------------
DIVERSIFIED ELECTRONIC PRODUCTS
552,900 Natsteel Electronics Ltd........................................................ 2,162,365
------------
ELECTRONIC COMPONENTS
876,000 Gul Technologies................................................................ 801,155
863,000 Omni Industries Ltd............................................................. 820,421
446,100 Venture Manufacturing Ltd....................................................... 3,972,491
------------
5,594,067
------------
ELECTRONIC PRODUCTION EQUIPMENT
126,000 Chartered Semiconductor Manufacturing*.......................................... 252,363
31,400 Chartered Semiconductor Manufacturing (ADR)*.................................... 1,042,088
------------
1,294,451
------------
INTERNATIONAL BANKS
103,507 DBS Group Holdings Ltd.......................................................... 1,170,837
448,310 Overseas-Chinese Banking Corp. Ltd.............................................. 3,371,766
242,104 Overseas Union Bank Ltd......................................................... 1,048,826
290,600 United Overseas Bank Ltd........................................................ 2,203,105
------------
7,794,534
------------
MARINE TRANSPORTATION
697,000 Neptune Orient Lines Ltd........................................................ 1,010,692
351,600 Sembcorp Logistics Ltd.......................................................... 1,311,624
------------
2,322,316
------------
NEWSPAPERS
167,099 Singapore Press Holdings Ltd.................................................... 2,865,416
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
41
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED

TOTAL SINGAPORE................................................................. 34,998,494
------------
SOUTH KOREA (7.9%)
CELLULAR TELEPHONE
41,200 Pantech Co., Ltd................................................................ 460,067
136,100 Sk Telecom Co., Ltd. (ADR)...................................................... 1,777,806
------------
2,237,873
------------
COMPUTER SOFTWARE
47,000 Daeduck Electronics Co.......................................................... 532,667
------------
DIVERSIFIED ELECTRONIC PRODUCTS
124,739 Samsung Electronics Co.......................................................... 20,789,833
------------
ELECTRIC UTILITIES
341,000 Korea Electric Power Corp. (ADR)................................................ 5,370,750
------------
ELECTRONIC COMPONENTS
94,800 Mirae Co........................................................................ 508,760
30,198 Samsung Electro-Mechanics Co.................................................... 1,459,570
------------
1,968,330
------------
INDUSTRIAL SPECIALTIES
29,800 Hankuk Glass Industry Co. Ltd................................................... 558,750
------------
INTERNATIONAL BANKS
83,640 Hana Bank....................................................................... 766,700
53,200 Housing & Commercial Bank, Korea*............................................... 1,405,367
126,330 Kookmin Bank.................................................................... 1,968,642
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
7,346 Kookmin Bank (Rights)........................................................... $ 81,564
------------
4,222,273
------------
INVESTMENT BANKERS/BROKERS/SERVICES
32,910 Dongwon Securities Co........................................................... 987,300
146,550 Sangyong Investment & Securities Co., Ltd....................................... 891,512
------------
1,878,812
------------
MOTOR VEHICLES
364,000 Hyundai Motor Co., Ltd. (GDR) 144A*+............................................ 3,239,600
------------
PAINTS/COATINGS
11,110 Korea Chemical.................................................................. 740,667
------------
SEMICONDUCTORS
51,900 Hyundai Electronics Industries Co............................................... 862,837
------------
SPECIALTY CHEMICALS
51,110 L.G. Chemical Ltd............................................................... 1,546,078
------------
STEEL/IRON ORE
125,400 Pohang Iron & Steel Co., Ltd. (ADR)............................................. 4,185,225
------------
TELECOMMUNICATIONS
25,700 Korea Telecom Corp.............................................................. 1,728,325
53,835 Korea Telecom Corp. (ADR)....................................................... 1,897,684
------------
3,626,009
------------

TOTAL SOUTH KOREA............................................................... 51,759,704
------------

TAIWAN (8.1%)
DIVERSIFIED ELECTRONIC PRODUCTS
310,000 Delta Electronics, Inc.......................................................... 1,290,855
------------
E.D.P. PERIPHERALS
140,000 Acer Peripherals Inc............................................................ 371,779
56,304 Acer Peripherals Inc. - 144A*+.................................................. 1,494,871
------------
1,866,650
------------
ELECTRONIC COMPONENTS
326,000 Compeq Manufacturing Co., Ltd.*................................................. 1,659,711
19,000 Ritek Corp.*.................................................................... 124,199
93,100 Ritek Corp. (GDR)*.............................................................. 1,245,212
------------
3,029,122
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
42
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED

<TABLE>
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
ELECTRONIC DATA PROCESSING
345,000 Acer Inc.*...................................................................... $ 655,955
436,578 Asustek Computer Inc............................................................ 4,568,840
574,737 Compal Electronics.............................................................. 1,923,617
59,900 Hon Hai Precision Industry Co. (GDR)............................................ 971,877
629,400 Hon Hai Precison Industry Co.*.................................................. 4,292,263
114,000 Quanta Computer Inc............................................................. 931,490
------------
13,344,042
------------
ELECTRONIC PRODUCTION EQUIPMENT
2,178,173 Taiwan Semiconductor Manufacturing Co.*......................................... 9,651,866
------------
ENGINEERING & CONSTRUCTION
119,000 CTCI Corp....................................................................... 100,600
------------
FOOD CHAINS
227,000 President Chain Store Corp...................................................... 638,482
------------
INTERNATIONAL BANKS
1,006,200 China Trust Commercial Bank*.................................................... 920,189
584,970 E. Sun Commercial Bank*......................................................... 235,312
635,000 First Commercial Bank........................................................... 812,209
1,029,300 International Commercial Bank of China*......................................... 1,038,357
1,187,000 Taishin International Bank...................................................... 675,195
774,000 United World Chinese Commercial Bank*........................................... 977,838
------------
4,659,100
------------
LIFE INSURANCE
248,743 Cathay Life Insurance Co., Ltd.................................................. 641,010
------------
MARINE TRANSPORTATION
1,019,000 Evergreen Marine Corp........................................................... 951,109
------------
SEMICONDUCTORS
631,000 Advanced Semiconductor Engineering Inc.*........................................ 1,933,454
917,323 Siliconware Precision Industries Co.*........................................... 1,643,225
2,144,000 United Microelectronics Corp., Ltd.*............................................ 5,558,768
------------
9,135,447
------------
SHARES/PRINCIPAL
AMOUNT VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SPECIALTY CHEMICALS
473,000 Formosa Plastic Corp............................................................ $ 943,919
896,680 Nan Ya Plastic.................................................................. 1,563,977
------------
2,507,896
------------
STEEL/IRON ORE
3,489,890 China Steel Corp................................................................ 2,676,094
------------
TEXTILES
1,109,910 Far East Textile Ltd............................................................ 1,513,831
67,100 Far East Textile Ltd. (GDS) 144A+............................................... 964,562
------------
2,478,393
------------

TOTAL TAIWAN.................................................................... 52,970,666
------------

THAILAND (1.3%)
BUILDING MATERIALS
200,433 Siam City Cement Co. PCL........................................................ 736,390
------------
CELLULAR TELEPHONE
190,200 Advanced Info Service PCL....................................................... 2,214,489
------------
ELECTRONIC COMPONENTS
156,975 Delta Electronics, Inc.......................................................... 1,283,418
------------
INTERNATIONAL BANKS
1,455,300 Siam Commercial Bank (Warrants due 06/22/04)*................................... 508,320
1,319,300 Thai Farmers Bank PCL........................................................... 1,860,332
------------
2,368,652
------------
MOVIES/ENTERTAINMENT
173,300 BEC World PCL................................................................... 1,058,184
------------
REAL ESTATE
2,168,600 Golden Land Property Development Company Ltd.*.................................. 841,630
------------
TOTAL THAILAND.................................................................. 8,502,763
------------
TOTAL COMMON STOCKS, BONDS, RIGHTS AND WARRANTS
(IDENTIFIED COST $489,591,091).................................................. 613,356,225
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
43
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1999, CONTINUED

<TABLE>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- ----------------------------------------------------------------------------------------------------------------
<C> <S> <C>
SHORT-TERM INVESTMENTS (a) (6.7%)
COMMERCIAL PAPER
DIVERSIFIED FINANCIAL SERVICES
350 General Electric Capital Corp. 5.31% due 11/17/99................................. $ 349,174
------------
U.S. GOVERNMENT AGENCY
44,000 Federal Home Loan Mortgage Corp. 5.16% due 11/01/99............................... 44,000,000
------------
TOTAL SHORT-TERM INVESTMENTS
(AMORTIZED COST $44,349,174)...................................................... 44,349,174
------------
</TABLE>

<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(IDENTIFIED COST $533,940,265) (b)........................................................ 100.0% 657,705,399

CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES............................................ 0.0 325,329
----- -------------
NET ASSETS................................................................................ 100.0% $ 658,030,728
----- -------------
----- -------------
</TABLE>

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

ADR American Depository Receipt.
GDR Global Depository Receipt.
GDS Global Depository Share.
K In thousands.
* Non-income producing security.
** Partially paid shares. Resale is restricted to qualified institutional
investors.
+ Resale is restricted to qualified institutional investors.
(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 $139,996,531 and the
aggregate gross unrealized depreciation is $16,231,397, resulting in net
unrealized appreciation of $123,765,134.

FORWARD FOREIGN CURRENCY CONTRACT OPEN AT OCTOBER 31, 1999:

<TABLE>
<CAPTION>
CONTRACT IN EXCHANGE DELIVERY UNREALIZED
TO DELIVER FOR DATE APPRECIATION
- -------------------------------------------------------------------
<S> <C> <C> <C>
HKD 502,141 $64,628 11/01/99 $ 10
</TABLE>

CURRENCY ABBREVIATIONS:

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

SEE NOTES TO FINANCIAL STATEMENTS
44
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
SUMMARY OF INVESTMENTS OCTOBER 31, 1999

<TABLE>
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
<S> <C> <C>
- -----------------------------------------------------
Aerospace................. $ 1,916,979 0.3%
Airlines.................. 8,028,833 1.2
Alcoholic Beverages....... 5,202,826 0.8
Aluminum.................. 581,457 0.1
Beverages -
Non-Alcoholic........... 1,136,382 0.2
Broadcasting.............. 3,928,762 0.6
Building Materials........ 1,475,692 0.2
Building Products......... 2,841,221 0.4
Casino/Gambling........... 1,791,343 0.3
Cellular Telephone........ 11,113,744 1.7
Coal Mining............... 992,412 0.1
Computer Software......... 5,702,621 0.9
Construction/Agricultural
Equipment/Trucks........ 3,300,333 0.5
Consumer
Electronics/Appliances... 18,134,450 2.7
Consumer Specialties...... 2,508,784 0.4
Diversified Commercial
Services................ 2,452,131 0.4
Diversified Electronic
Products................ 73,251,172 11.1
Diversified Financial
Services................ 349,174 0.0
Diversified
Manufacturing........... 2,453,359 0.4
E.D.P. Peripherals........ 8,348,171 1.3
E.D.P. Services........... 349,950 0.0
Electric Utilities........ 5,864,028 0.9
Electrical Products....... 6,429,538 1.0
Electronic Components..... 21,507,053 3.3
Electronic Data
Processing.............. 26,831,490 4.1
Electronic Distributors... 3,493,664 0.5
Electronic Production
Equipment............... 10,946,317 1.7
Engineering &
Construction............ 348,272 0.1
Finance Companies......... 5,908,796 0.9
Food Chains............... 6,756,126 1.0
Generic Drugs............. 739,040 0.1
Home Building............. 7,407,420 1.1
Home Furnishings.......... 914,083 0.1
Industrial
Machinery/Components.... 29,703,186 4.5
Industrial Specialties.... 7,666,113 1.2
International Banks....... 44,850,543 6.9
Investment
Bankers/Brokers/Services.. 1,878,812 0.3
Life Insurance............ 641,010 0.1
<CAPTION>
PERCENT OF
INDUSTRY VALUE NET ASSETS
- -----------------------------------------------------
<S> <C> <C>
Major Pharmaceuticals..... $ 8,692,479 1.3%
Marine Transportation..... 3,273,425 0.5
Media Conglomerates....... 5,099,575 0.8
Motor Vehicles............ 19,917,819 3.0
Movies/Entertainment...... 1,149,546 0.2
Multi-Sector Companies.... 22,695,659 3.4
Mutual Funds.............. 566,000 0.1
Newspapers................ 2,865,416 0.4
Office
Equipment/Supplies...... 18,599,405 2.8
Oil Refining/Marketing.... 589,889 0.1
Other Metals/Minerals..... 7,822,699 1.2
Other Pharmaceuticals..... 13,582,586 2.1
Other Specialty Stores.... 267,960 0.0
Other
Telecommunications...... 13,686,204 2.1
Package Goods/Cosmetics... 1,823,387 0.3
Paints/Coatings........... 740,667 0.1
Photographic Products..... 6,721,225 1.0
Pollution Control
Equipment............... 2,746,280 0.4
Precious Metals........... 1,850,531 0.3
Printing/Forms............ 5,798,685 0.9
Real Estate............... 25,646,384 3.9
Recreational
Products/Toys........... 13,614,956 2.1
Semiconductors............ 16,288,003 2.5
Shoe Manufacturing........ 601,004 0.1
Specialty Chemicals....... 25,510,929 3.9
Specialty Foods/Candy..... 582,372 0.1
Steel/Iron Ore............ 6,861,319 1.0
Telecommunications........ 30,459,207 4.6
Textiles.................. 4,719,422 0.7
Tobacco................... 5,242,236 0.8
U.S. Government Agency.... 44,000,000 6.7
Utilities................. 1,985,645 0.3
Wholesale Distributors.... 5,959,198 0.9
------------ -----
$657,705,399 100.0%
------------ -----
------------ -----
</TABLE>

<TABLE>
<CAPTION>
PERCENT OF
TYPE OF INVESTMENT VALUE NET ASSETS
<S> <C> <C>
- -----------------------------------------------------
Common Stocks............. $607,111,393 92.3%
Convertible Bonds......... 5,654,948 0.9
Rights.................... 81,564 0.0
Short-Term Investments.... 44,349,174 6.7
Warrants.................. 508,320 0.1
------------ -----
$657,705,399 100.0%
------------ -----
------------ -----
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
45
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999

<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $533,940,265)............................ $ 657,705,399
Cash (including $2,206,945 in foreign currency)............. 2,866,790
Receivable for:
Capital stock sold...................................... 1,981,272
Dividends............................................... 947,569
Investments sold........................................ 825,585
Interest................................................ 255,736
Prepaid expenses and other assets........................... 304,079
-------------
TOTAL ASSETS........................................... 664,886,430
-------------
LIABILITIES:
Payable for:
Investments purchased................................... 3,922,127
Capital stock repurchased............................... 1,484,090
Plan of distribution fee................................ 533,868
Investment management fee............................... 513,778
Accrued expenses and other payables......................... 401,839
-------------
TOTAL LIABILITIES...................................... 6,855,702
-------------
NET ASSETS............................................. $ 658,030,728
=============
COMPOSITION OF NET ASSETS:
Paid-in-capital............................................. $ 951,192,965
Net unrealized appreciation................................. 123,764,204
Dividends in excess of net investment income................ (1,503,849)
Accumulated net realized loss............................... (415,422,592)
-------------
NET ASSETS............................................. $ 658,030,728
=============
CLASS A SHARES:
Net Assets.................................................. $10,048,329
Shares Outstanding (500,000,000 AUTHORIZED, $.01 PAR
VALUE).................................................... 690,948
NET ASSET VALUE PER SHARE.............................. $14.54
=============

MAXIMUM OFFERING PRICE PER SHARE,
(NET ASSET VALUE PLUS 5.54% OF NET ASSET VALUE)...... $15.35
=============
CLASS B SHARES:
Net Assets.................................................. $633,215,508
Shares Outstanding (500,000,000 AUTHORIZED, $.01 PAR
VALUE).................................................... 44,004,346
NET ASSET VALUE PER SHARE.............................. $14.39
=============
CLASS C SHARES:
Net Assets.................................................. $12,278,152
Shares Outstanding (500,000,000 AUTHORIZED, $.01 PAR
VALUE).................................................... 853,574
NET ASSET VALUE PER SHARE.............................. $14.38
=============
CLASS D SHARES:
Net Assets.................................................. $2,488,739
Shares Outstanding (500,000,000 AUTHORIZED, $.01 PAR
VALUE).................................................... 170,345
NET ASSET VALUE PER SHARE.............................. $14.61
=============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
46
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1999

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

INCOME
Dividends (net of $2,397,026 foreign withholding tax)....... $ 9,718,969
Interest (net of $2,177 foreign withholding tax)............ 1,281,162
------------

TOTAL INCOME........................................... 11,000,131
------------

EXPENSES
Plan of distribution fee (Class A shares)................... 12,269
Plan of distribution fee (Class B shares)................... 5,032,473
Plan of distribution fee (Class C shares)................... 56,000
Investment management fee................................... 4,907,485
Transfer agent fees and expenses............................ 1,580,235
Custodian fees.............................................. 1,063,945
Registration fees........................................... 161,968
Shareholder reports and notices............................. 153,278
Professional fees........................................... 133,931
Directors' fees and expenses................................ 17,512
Other....................................................... 41,085
------------

TOTAL EXPENSES......................................... 13,160,181
------------

NET INVESTMENT LOSS.................................... (2,160,050)
------------

NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain/loss on:
Investments............................................. (4,333,878)
Foreign exchange transactions........................... 1,539,596
------------

NET LOSS............................................... (2,794,282)
------------
Net change in unrealized appreciation/depreciation on:
Investments............................................. 203,729,991
Translation of forward foreign currency contracts and
other assets and liabilities denominated in foreign
currencies............................................ 1,572,236
------------

NET APPRECIATION....................................... 205,302,227
------------

NET GAIN............................................... 202,507,945
------------

NET INCREASE................................................ $200,347,895
============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
47
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
FINANCIAL STATEMENTS, CONTINUED

STATEMENT OF CHANGES IN NET ASSETS

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

INCREASE (DECREASE) IN NET ASSETS:

OPERATIONS:
Net investment income (loss)..................... $(2,160,050) $ 725,159
Net realized loss................................ (2,794,282) (275,477,997)
Net change in unrealized appreciation............ 205,302,227 121,134,260
------------ -------------

NET INCREASE (DECREASE)..................... 200,347,895 (153,618,578)
------------ -------------

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

TOTAL DIVIDENDS............................. -- (10,321,335)
------------ -------------

Net increase (decrease) from capital stock
transactions................................... 42,445,104 (166,513,928)
------------ -------------

NET INCREASE (DECREASE)..................... 242,792,999 (330,453,841)

NET ASSETS:
Beginning of period.............................. 415,237,729 745,691,570
------------ -------------

END OF PERIOD
(INCLUDING DIVIDENDS IN EXCESS OF NET
INVESTMENT INCOME OF $1,503,849 AND
$2,863,488, RESPECTIVELY).................... $658,030,728 $ 415,237,729
============ =============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
48
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999

1. ORGANIZATION AND ACCOUNTING POLICIES

Morgan Stanley Dean Witter Pacific Growth Fund Inc. (the "Fund") is registered
under the Investment Company Act of 1940, as amended (the "Act"), as a
diversified, open-end management investment company. The Fund'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 converted to a multiple class share
structure.

The Fund offers Class A shares, Class B shares, Class C shares and Class D
shares. The four classes are substantially the same except that most Class A
shares are subject to a sales charge imposed at the time of purchase and some
Class A shares, and most Class B shares and Class C shares are subject to a
contingent deferred sales charge imposed on shares redeemed within one year, six
years and one year, respectively. Class D shares are not subject to a sales
charge. Additionally, Class A shares, Class B shares and Class C shares incur
distribution expenses.

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect 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") or Morgan Stanley Dean Witter Investment Management Inc. (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 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

49
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999 , CONTINUED

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 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

50
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999 , CONTINUED

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 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: 0.95% to the portion of daily net assets not exceeding $1
billion; 0.90% 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

51
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999 , CONTINUED

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 and
Sub-Advisor. The Fund has adopted a Plan of Distribution (the "Plan") pursuant
to Rule 12b-1 under the Act. The Plan provides that the Fund will pay the
Distributor a fee which is accrued daily and paid monthly at the following
annual rates: (i) Class A - up to 0.25% of the average daily net assets of Class
A; (ii) Class B - 1.0% of the lesser of: (a) the average daily aggregate gross
sales of the Class B shares since the inception of the Fund (not including
reinvestment of dividend or capital gain distributions) less the average daily
aggregate net asset value of the Class B shares redeemed since the Fund's
inception upon which a contingent deferred sales charge has been imposed or
waived; or (b) the average daily net assets of Class B; and (iii) Class C - up
to 1.0% of the average daily net assets of Class C. In the case of Class A
shares, amounts paid under the Plan are paid to the Distributor for services
provided. In the case of Class B and Class C shares, amounts paid under the Plan
are paid to the Distributor for (1) services provided and the expenses borne by
it and others in the distribution of the shares of these Classes, including the
payment of commissions for sales of these Classes and incentive compensation to,
and expenses of, 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, Sub-Advisor 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

52
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999 , CONTINUED

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 $39,835,429 at October 31, 1999.

In the case of Class A shares and Class C shares, expenses incurred pursuant to
the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily
net assets of Class A or Class C, respectively, will not be reimbursed by the
Fund through payments in any subsequent year, except that expenses representing
a gross sales credit to Morgan Stanley Dean Witter Financial Advisors or other
selected broker-dealer representatives may be reimbursed in the subsequent
calendar year. For the year ended October 31, 1999, the distribution fee was
accrued for Class A shares and Class C shares at the annual rate of 0.23% and
1.0%, respectively.

The Distributor has informed the Fund that for the year ended October 31, 1999,
it received contingent deferred sales charges from certain redemptions of the
Fund's Class A shares, Class B shares and Class C shares of $567, $803,088, and
$4,110, respectively and received $46,260 in front-end sales charges from sales
of the Fund's Class A shares. The respective shareholders pay such charges which
are not an expense of the Fund.

4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES

The cost of purchases and proceeds from sales of portfolio securities, excluding
short-term investments, for the year ended October 31, 1999 aggregated
$653,834,234 and $625,737,502, respectively.

For the year ended October 31, 1999, the Fund incurred brokerage commissions of
$202,915 with Morgan Stanley & Co., Inc., an affiliate of the Investment
Manager, Sub-Advisor and Distributor, for portfolio transactions executed on
behalf of the Fund.

Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager,
Sub-Advisor and Distributor, is the Fund's transfer agent. At October 31, 1999,
the Fund had transfer agent fees and expenses payable of approximately $1,100.

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, 1999 included
in Directors' fees and expenses in the Statement of Operations, amounted to
$5,779. At October 31, 1999, the Fund had an accrued pension liability of
$43,783 which is included in accrued expenses in the Statement of Assets and
Liabilities.

53
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999 , CONTINUED

5. FEDERAL INCOME TAX STATUS

At October 31, 1999, the Fund had a net capital loss carryover of approximately
$411,419,000, 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>
AMOUNT IN THOUSANDS
- --------------------------------------------------
2003 2004 2005 2006 2007
- ------ -------- -------- -------- --------
<S> <C> <C> <C> <C>
$3,193 $15,875 $97,593 $268,352 $26,406
====== ======= ======= ======== =======
</TABLE>

As of October 31, 1999, 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 gains and tax adjustments
on PFICs sold by the Fund. To reflect reclassifications arising from the
permanent differences, accumulated net realized loss was charged $3,557,026,
paid-in-capital was credited $37,337, and dividends in excess of net investment
income was credited $3,519,689.

6. CAPITAL STOCK

Transactions in capital stock were as follows:

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 1999 OCTOBER 31, 1998
--------------------------- ---------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold................................................ 11,093,708 $ 142,833,100 418,160 $ 4,158,089
Reinvestment of dividends........................... -- -- 1,152 13,083
Redeemed............................................ (10,720,515) (138,982,563) (149,951) (1,337,917)
----------- ------------- ----------- -------------
Net increase - Class A.............................. 373,193 3,850,537 269,361 2,833,255
----------- ------------- ----------- -------------
CLASS B SHARES
Sold................................................ 55,220,630 690,811,299 37,286,227 384,246,449
Reinvestment of dividends........................... -- -- 840,396 9,572,097
Redeemed............................................ (53,251,271) (659,859,432) (54,083,073) (565,173,912)
----------- ------------- ----------- -------------
Net increase (decrease) - Class B................... 1,969,359 30,951,867 (15,956,450) (171,355,366)
----------- ------------- ----------- -------------
CLASS C SHARES
Sold................................................ 4,233,781 53,863,013 1,140,153 10,725,985
Reinvestment of dividends........................... -- -- 1,046 11,869
Redeemed............................................ (3,542,876) (45,346,907) (1,042,383) (10,154,217)
----------- ------------- ----------- -------------
Net increase - Class C.............................. 690,905 8,516,106 98,816 583,637
----------- ------------- ----------- -------------
CLASS D SHARES
Sold................................................ 7,250,183 89,995,532 612,447 5,857,456
Reinvestment of dividends........................... -- -- 222 2,523
Redeemed............................................ (7,239,889) (90,868,938) (461,755) (4,435,433)
----------- ------------- ----------- -------------
Net increase (decrease) - Class D................... 10,294 (873,406) 150,914 1,424,546
----------- ------------- ----------- -------------
Net increase (decrease) in Fund..................... 3,043,751 $ 42,445,104 (15,437,359) $(166,513,928)
=========== ============= =========== =============
</TABLE>

54
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1999 , CONTINUED

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, 1999, there was an outstanding forward contract used to
facilitate settlement of foreign currency denominated portfolio transactions.

At October 31, 1999, the Fund's cash balance consisted principally of interest
bearing deposits with Chase Manhattan Bank N.A., the Fund's custodian.

At October 31, 1999, investments in securities of issuers in Japan represented
43.5% of the Fund's net assets. These investments, as well as other non-U.S.
investments, which involve risks and considerations not present with respect to
U.S. securities, may be affected by economic or political developments in this
region.

55
<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 PERIOD
FOR THE YEAR FOR THE YEAR JULY 28, 1997*
ENDED ENDED THROUGH
OCTOBER 31, 1999 OCTOBER 31, 1998 OCTOBER 31, 1997
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS A SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $ 9.76 $ 12.86 1$9.39
------- ------- ----
Income (loss) from investment operations:
Net investment income.................................... 0.05 0.10 --
Net realized and unrealized gain (loss).................. 4.73 (2.94) (6.53)
------- ------- ----
Total income (loss) from investment operations.............. 4.78 (2.84) (6.53)
------- ------- ----
Less dividends from net investment income................... -- (0.26) --
------- ------- ----
Net asset value, end of period.............................. $ 14.54 $ 9.76 1$2.86
======= ======= ====
TOTAL RETURN+............................................... 48.98% (22.35)% (33.68)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 1.79%(3) 1.90 %(3) 1.92 %(2)
Net investment income (loss)................................ 0.34%(3) 0.89 %(3) (0.03)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $10,048 $3,102 $622
Portfolio turnover rate..................................... 128% 58 % 42 %
</TABLE>

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

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

SEE NOTES TO FINANCIAL STATEMENTS
56
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
FINANCIAL HIGHLIGHTS, CONTINUED

<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31
--------------------------------------------------------
1999++ 1998++ 1997*++ 1996 1995
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CLASS B SHARES
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $ 9.73 $ 12.83 $ 18.89 $ 18.77 $ 21.60
-------- -------- -------- ---------- ----------
Income (loss) from investment operations:
Net investment income (loss)............................. (0.06) 0.01 0.01 0.05 0.08
Net realized and unrealized gain (loss).................. 4.72 (2.92) (5.77) 0.50 (1.94)
-------- -------- -------- ---------- ----------
Total income (loss) from investment operations.............. 4.66 (2.91) (5.76) 0.55 (1.86)
-------- -------- -------- ---------- ----------
Less dividends and distributions from:
Net investment income.................................... -- (0.19) (0.30) (0.43) --
Net realized gain........................................ -- -- -- -- (0.97)
-------- -------- -------- ---------- ----------
Total dividends and distributions........................... -- (0.19) (0.30) (0.43) (0.97)
-------- -------- -------- ---------- ----------
Net asset value, end of period.............................. $ 14.39 $ 9.73 $ 12.83 $ 18.89 $ 18.77
======== ======== ======== ========== ==========
TOTAL RETURN+............................................... 47.89 % (22.87)% (31.01)% 3.00% (8.65)%
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 2.56 %(1) 2.65 %(1) 2.44 % 2.39% 2.45 %
Net investment income (loss)................................ (0.43)%(1) 0.14 %(1) 0.03 % 0.18% 0.35 %
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $633,216 $408,990 $744,133 $1,624,468 $1,441,549
Portfolio turnover rate..................................... 128 % 58 % 42 % 49% 50 %
</TABLE>

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

<TABLE>
<C> <S>
* 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.
+ Does not reflect the deduction of sales charge. Calculated
based on the net asset value as of the last business day of
the period.
++ The per share amounts were computed using an average number
of shares outstanding during the period.
(1) Reflects overall Fund ratios for investment income and
non-class specific expenses.
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS
57
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
FINANCIAL HIGHLIGHTS, CONTINUED

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR FOR THE YEAR JULY 28, 1997*
ENDED ENDED THROUGH
OCTOBER 31, 1999 OCTOBER 31, 1998 OCTOBER 31, 1997
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS C SHARES++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $ 9.72 $12.83 $19.39
------- ------- -------
Income (loss) from investment operations:
Net investment income (loss)............................. (0.05) 0.01 (0.04)
Net realized and unrealized gain (loss).................. 4.71 (2.89) (6.52)
------- ------- -------
Total income (loss) from investment operations.............. 4.66 (2.88) (6.56)
------- ------- -------
Less dividends from net investment income................... -- (0.23) --
------- ------- -------
Net asset value, end of period.............................. $ 14.38 $ 9.72 $12.83
======= ======= =======
TOTAL RETURN.+.............................................. 47.94 % (22.68)% (33.83)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 2.56 %(3) 2.65 %(3) 2.62 %(2)
Net investment income (loss)................................ (0.43)%(3) 0.14 %(3) (0.77)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $12,278 $1,581 $819
Portfolio turnover rate..................................... 128 % 58 % 42 %
</TABLE>

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

SEE NOTES TO FINANCIAL STATEMENTS
58
<PAGE>
MORGAN STANLEY DEAN WITTER PACIFIC GROWTH FUND INC.
FINANCIAL HIGHLIGHTS, CONTINUED

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE YEAR FOR THE YEAR JULY 28, 1997*
ENDED ENDED THROUGH
OCTOBER 31, 1999 OCTOBER 31, 1998 OCTOBER 31, 1997
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CLASS D SHARES ++
SELECTED PER SHARE DATA:
Net asset value, beginning of period........................ $ 9.78 $12.86 $19.39
------ ------ ------
Income (loss) from investment operations:
Net investment income.................................... 0.06 0.07 0.02
Net realized and unrealized gain (loss).................. 4.77 (2.88) (6.55)
------ ------ ------
Total income (loss) from investment operations.............. 4.83 (2.81) (6.53)
------ ------ ------
Less dividends from net investment income................... -- (0.27) --
------ ------ ------
Net asset value, end of period.............................. $14.61 $ 9.78 $12.86
====== ====== ======
TOTAL RETURN.+.............................................. 49.39% (22.14)% (33.68)%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................................... 1.56%(3) 1.65 %(3) 1.62 %(2)
Net investment income....................................... 0.57%(3) 1.14 %(3) 0.42 %(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands..................... $2,489 $1,565 $118
Portfolio turnover rate..................................... 128% 58 % 42 %
</TABLE>

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

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

SEE NOTES TO FINANCIAL STATEMENTS
59
<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") at October 31, 1999, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended and the financial highlights for each of the periods
indicated, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
October 31, 1999 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.

PricewaterhouseCoopers LLP
1177 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
DECEMBER 20, 1999