MORGAN STANLEY DEAN WITTER SHORT TERM US TREASURY TRUST, 485BPOS, 1998-07-29

MORGAN STANLEY DEAN WITTER SHORT TERM US TREASURY TRUST
485BPOS, 1998-07-29

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 29, 1998

REGISTRATION NOS.: 33-41187
811-6330

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
--------------------

FORM N-1A

REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. 8 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 [X]
AMENDMENT NO. 9 [X]
--------------------

MORGAN STANLEY DEAN WITTER SHORT-TERM U.S. TREASURY TRUST

(A MASSACHUSETTS business trust)
(FORMERLY NAMED DEAN WITTER SHORT-TERM U.S. TREASURY TRUST)

(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 392-1600

BARRY FINK, ESQ.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048

(NAME AND ADDRESS OF AGENT FOR SERVICE)
-------------------

COPY TO:

DAVID M. BUTOWSKY, ESQ.
GORDON ALTMAN BUTOWKSKY
WEITZEN SHALOV & WEIN
114 WEST 47TH STREET
NEW YORK, NEW YORK 10036
-------------------

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
As soon as practicable after this Post-Effective Amendment becomes effective.
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX)

X immediately upon filing pursuant to paragraph (b)
---
on (date) pursuant to paragraph (b)
---
60 days after filing pursuant to paragraph (a)
---
on (date) pursuant to paragraph (a) of rule 485.
---
--------------------

AMENDING THE PROSPECTUS AND UPDATING FINANCIAL STATEMENTS

================================================================================

<PAGE>
MORGAN STANLEY DEAN WITTER SHORT-TERM U.S. TREASURY TRUST

CROSS-REFERENCE SHEET
FORM N-1A

<TABLE>
<CAPTION>
ITEM CAPTION
- ------------------------------------------------------------------------
PART A PROSPECTUS
<S> <C>
1. Cover Page
2. Prospectus Summary; Summary of Fund Expenses
3. Financial Highlights
4. Investment Objective and Policies; The Fund and its
Management; Cover Page; Investment Restrictions; Financial
Highlights
5. The Fund and its Management; Back Cover; Investment Objective
and Policies
6. Dividends, Distributions and Taxes; Additional Information
7. Purchase of Fund Shares; Shareholder Services
8. Redemptions and Repurchases; Shareholder Services
9. Not applicable
PART B STATEMENT OF ADDITIONAL INFORMATION
10. Cover Page
11. Table of Contents
12. The Fund and its Management
13. Investment Practices and Policies; Investment Restrictions;
Portfolio Transactions and Brokerage
14. The Fund and its Management; Trustees and Officers
15. The Fund and its Management; Trustees and Officers
16. The Fund and its Management; The Distributor; Shareholder
Services; Custodian and Transfer Agent; Independent Accountants
17. Portfolio Transactions and Brokerage
18. Description of Shares
19. The Distributor; Redemptions and Repurchasers; Financial
Statements; Determination of Net Asset Value; Shareholder
Services
20. Dividends, Distributions and Taxes
21. Not applicable
22. Performance Information
23. Experts; Financial Statements

</TABLE>

PART C

Information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C of this Registration Statement.

<PAGE>

PROSPECTUS
JULY 29, 1998

Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust (the
"Fund") is an open-end, diversified management investment company whose
investment objective is current income, preservation of principal and
liquidity. The Fund seeks to achieve its objective by investing all of its
assets in U.S. Treasury securities backed by the full faith and credit of the
U.S. Government. (See "Investment Objective and Policies.") Shares of the Fund
are not issued, insured or guaranteed, as to value or yield, by the U.S.
Government or its agencies or instrumentalities.

Shares of the Fund are sold and redeemed at net asset value
without the imposition of a sales charge. The Fund is authorized to reimburse
specific expenses incurred in promoting the distribution of the Fund's shares,
including personal services to shareholders and maintenance of shareholder
accounts, in accordance with a Plan of Distribution pursuant to Rule 12b-1
under the Investment Company Act of 1940. Reimbursement may in no event exceed
an amount equal to payments at the annual rate of 0.35% of the average daily
net assets of the Fund.

This Prospectus sets forth concisely the information you should
know before investing in the Fund. It should be read and retained for future
reference. Additional information about the Fund is contained in the Statement
of Additional Information, dated July 29, 1998, which has been filed with the
Securities and Exchange Commission, and which is available at no charge upon
request of the Fund at the address or telephone numbers listed below. The
Statement of Additional Information is incorporated herein by reference.

Morgan Stanley Dean Witter
Short-Term U.S. Treasury Trust
Two World Trade Center
New York, New York 10048
(212) 392-2550 or
(800) 869-NEWS (toll-free)

TABLE OF CONTENTS

Prospectus Summary/ 2

Summary of Fund Expenses/ 3

Financial Highlights/ 4

The Fund and Its Management/ 5

Investment Objective and Policies/ 5

Purchase of Fund Shares/ 7

Shareholder Services/ 9

Redemptions and Repurchases/ 13

Dividends, Distributions and Taxes/ 16

Performance Information/ 17

Additional Information/ 17

Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank, and the shares are not federally insured by the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other agency.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

Morgan Stanley Dean Witter Distributors Inc.,
Distributor

<PAGE>
PROSPECTUS SUMMARY
- -----------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S> <C>
The The Fund is organized as a Trust, commonly known as a Massachusetts business trust, and is an open-end,Fund
Fund diversified management investment company investing in U.S. Treasury securities backed by the full faith and
credit of the U.S. Government.
- ----------------- -----------------------------------------------------------------------------------------------------------
Shares Shares of beneficial interest with $0.01 par value (see page 17).
Offered
- ----------------- -----------------------------------------------------------------------------------------------------------
Offering The price of the shares offered by this Prospectus is determined once daily as of 4:00 p.m., New York time, on
Price each day that the New York Stock Exchange is open, and is equal to the net asset value per share without a
sales charge (see page 8).
- ----------------- -----------------------------------------------------------------------------------------------------------
Minimum Minimum initial purchase through Distributor, $10,000 ($1,000 if the account is opened through EasyInvest
Purchase (Service Mark) although the Fund and Distributor may, from time to time, accept initial purchases of $5,000;
minimum subsequent investment, $100 (see page 8).
- ----------------- -----------------------------------------------------------------------------------------------------------
Investment The investment objective of the Fund is to provide investors with current income, preservation of principal
Objective and liquidity.
- ----------------- -----------------------------------------------------------------------------------------------------------
Investment In order to maximize the amount of the Fund's dividends which are exempt from state and local income taxation,
Policies the Fund will invest all of its assets in U.S. Treasury securities which are direct obligations of the U.S.
Government (see page 5).
- ----------------- -----------------------------------------------------------------------------------------------------------
Investment Morgan Stanley Dean Witter Advisors Inc., the Investment Manager of the Fund, and its wholly-owned subsidiary,
Manager Morgan Stanley Dean Witter Services Company Inc. serve in various investment management, advisory, management
and administrative capacities to 101 investment companies and other portfolios with assets of approximately
$115.2 billion at June 30, 1998 (see page 5).
- ----------------- -----------------------------------------------------------------------------------------------------------
Management The Investment Manager receives a monthly fee at the annual rate of 0.35% of daily net assets (see page 5).
Fee
- ----------------- -----------------------------------------------------------------------------------------------------------
Dividends and Dividends are declared daily and paid monthly. Capital gains distributions, if any, are paid at least once a
Capital Gains year or are retained for reinvestment by the Fund. Dividends and capital gains distributions are automatically
Distributions invested in additional shares at net asset value unless the elects to receive cash (see page 16).
- ----------------- -----------------------------------------------------------------------------------------------------------
Distributor Morgan Stanley Dean Witter Distributors Inc. (the "Distributor")(see page 7). The Fund is authorized to
and Plan reimburse of specific expenses incurred in promoting the distribution of the Fund's shares, including personal
Distribution services to shareholders and of shareholders accounts, in accordance with a Plan of with the Distributor
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Reimbursement may in no event exceed an
amount equal to payments at an annual rate of 0.35% of average net assets of the Fund (see page 9).
- ----------------- -----------------------------------------------------------------------------------------------------------
Redemption At net asset value; account may be involuntarily redeemed if total value of the account is less than $1,000
or, if the account was opened through EasyInvest (Service Mark), if after twelve months the shareholder has
invested less than $10,000 in the account (see pages 13-15).
- ----------------- -----------------------------------------------------------------------------------------------------------
Risks The Fund invests only in U.S. Treasury securities which are subject to minimal risk of loss of income and
principal. It may engage in the purchase of such securities on a when-issued basis. The value of the Fund's
portfolio securities, and therefore the Fund's net asset value per share, may increase or decrease due to various
factors, principally changes in prevailing interest rates. Generally, a rise in interest rates will result in a
decrease in the Fund's net asset value per share, while a drop in interest rates will result in an increase in
the Fund's net asset value per share. A portion of the U.S. Treasury securities in which the Fund invests may be
zero coupon Treasury securities. Such securities are subject to greater market price fluctuations during periods
of changing prevailing interest rates (see pages 5-7).
- ----------------- -----------------------------------------------------------------------------------------------------------
</TABLE>

The above is qualified in its entirety by the detailed information
appearing elsewhere in this Prospectus
and in the Statement of Additional Information.

2
<PAGE>
SUMMARY OF FUND EXPENSES
- -----------------------------------------------------------------------------

The following table illustrates all expenses and fees that a shareholder of the
Fund will incur. The expenses and fees set forth in the table are for the
fiscal year ended May 31, 1998.

<TABLE>
<CAPTION>
<S> <C>
Shareholder Transaction Expenses
- -------------------------------------------------------------------------
Maximum Sales Charge Imposed on Purchases................................. None
Maximum Sales Charge Imposed on Reinvested Dividends ..................... None
Deferred Sales Charge .................................................... None
Redemption Fees .......................................................... None
Exchange Fee ............................................................. None
Annual Fund Operating Expenses (as a Percentage of Average Net Assets)
- -------------------------------------------------------------------------
Management Fees........................................................... 0.35%
12b-1 Fees* .............................................................. 0.34%
Other Expenses ........................................................... 0.13%
Total Fund Operating Expenses ............................................ 0.82%
</TABLE>

* A PORTION OF THE 12B-1 FEE, WHICH MAY NOT EXCEED 0.25% OF THE FUND'S
AVERAGE DAILY NET ASSETS, IS CHARACTERIZED AS A SERVICE FEE WITHIN THE
MEANING OF NATIONAL ASSOCIATION OF SECURITIES DEALERS INC. ("NASD")
GUIDELINES.

<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------- -------- --------- --------- ----------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end
of each time period: ......................................... $8 $26 $46 $101
</TABLE>

THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES OF THE FUND MAY BE MORE OR
LESS THAN THOSE SHOWN.

The purpose of this table is to assist the investor in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. For a more complete description of these costs and expenses, see
"The Fund and its Management" and "Purchase of Fund Shares--Plan of
Distribution" in this Prospectus.

Long-term shareholders of the Fund may pay more in distribution fees than
the economic equivalent of the maximum front-end sales charges permitted by the
NASD.

3
<PAGE>
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------

The following ratios and per share data for a share of beneficial interest
outstanding throughout each period have been audited by PricewaterhouseCoopers
LLP, independent accountants. The financial highlights should be read in
conjunction with the financial statements, notes thereto and the unqualified
report of independent accountants which are contained in the Statement of
Additional Information. Further unaudited information about the performance of
the Fund is contained in the Fund's Annual Report to Shareholders, which may be
obtained without charge upon request to the Fund.

FOR THE YEAR ENDED MAY 31 FOR THE PERIOD
----------------------------------------- AUGUST 13, 1991*
THROUGH
1998 1997 1996 1995 1994 1993 MAY 31, 1992
- ------------------------------------ ---------- ---------- ---------- ---------- ---------- ---------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 9.85 $ 9.84 $ 9.98 $ 9.88 $10.34 $10.21 $10.00
---------- ---------- ---------- ---------- ---------- ---------- ----------------
Net investment income ............... 0.53 0.54 0.54 0.49 0.49 0.54 0.44
Net realized and unrealized gain
(loss) ............................. 0.11 -- (0.14) 0.10 (0.45) 0.13 0.20
---------- ---------- ---------- ---------- ---------- ---------- ----------------
Total from investment operations ... 0.64 0.54 0.40 0.59 0.04 0.67 0.64
---------- ---------- ---------- ---------- ---------- ---------- ----------------
Less dividends and distributions from:
Net investment income .............. (0.53) (0.53) (0.54) (0.49) (0.50) (0.53) (0.43)
Net realized gain................... -- -- -- -- -- (0.01) --
---------- ---------- ---------- ---------- ---------- ---------- ----------------
Total dividends and distributions .. (0.53) (0.53) (0.54) (0.49) (0.50) (0.54) (0.43)
---------- ---------- ---------- ---------- ---------- ---------- ----------------
Net asset value, end of period ..... $ 9.96 $ 9.85 $ 9.84 $ 9.98 $ 9.88 $10.34 $10.21
========== ========== ========== ========== ========== ========== ================
TOTAL INVESTMENT RETURN+ ............ 6.68% 5.63% 4.09% 6.22% 0.25% 6.75% 6.55%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ............................ 0.82% 0.83% 0.84% 0.84% 0.79% 0.80% 0.79%(2)(3)
Net investment income ............... 5.30% 5.42% 5.33% 4.93% 4.74% 5.18% 5.49%(2)(3)
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands........................... $241,025 $230,267 $258,637 $273,184 $516,017 $584,206 $523,555
Portfolio turnover rate ............. 95% 149% 63% 30% 49% 21% 12%(1)
</TABLE>

- ------------
* Commencement of operations.
+ Calculated based on the net asset value as of the last business day of
the period.
(1) Not annualized.
(2) Annualized.
(3) If the Fund had borne all expenses that were assumed or waived by the
Investment Manager, the above annualized expense and net investment
income ratios would have been 0.81% and 5.47%, respectively.

4
<PAGE>

THE FUND AND ITS MANAGEMENT
- -----------------------------------------------------------------------------

Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust (the "Fund")
(formerly named Dean Witter Short-Term U.S. Treasury Trust) is an open-end
diversified management investment company. The Fund is a trust of the type
commonly known as a "Massachusetts business trust" and was organized under the
laws of The Commonwealth of Massachusetts on June 4, 1991.

Morgan Stanley Dean Witter Advisors Inc. ("MSDW Advisors" or the "Investment
Manager"), whose address is Two World Trade Center, New York, New York 10048,
is the Fund's Investment Manager. 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. The
Investment Manager, which was incorporated in July, 1992 under the name Dean
Witter InterCapital Inc., changed its name to Morgan Stanley Dean Witter
Advisors Inc. on June 22, 1998.

MSDW Advisors and its wholly-owned subsidiary, Morgan Stanley Dean Witter
Services Company Inc. ("MSDW Services"), serve in various investment
management, advisory, management and administrative capacities to a total of
101 investment companies, 28 of which are listed on the New York Stock
Exchange, with combined total assets of approximately $110.8 billion as of June
30, 1998. The Investment Manager also manages portfolios of pension plans,
other institutions and individuals which aggregated approximately $4.4 billion
at such date.

The Fund has retained the Investment Manager to provide administrative
services, manage its business affairs and manage the investment of the Fund's
assets, including the placing of orders for the purchase and sale of portfolio
securities. MSDW Advisors has retained MSDW Services to perform the
aforementioned administrative services for the Fund. The Fund's Board of
Trustees reviews the various services provided by or under the direction of the
Investment Manager to ensure that the Fund's general investment policies and
programs are being properly carried out and that administrative services are
being provided to the Fund in a satisfactory manner.

As full compensation for the services and facilities furnished to the Fund
and for expenses of the Fund assumed by the Investment Manager, the Fund pays
the Investment Manager monthly compensation calculated daily by applying an
annual rate of 0.35% to the Fund's net assets determined as of the close of
each business day. For the fiscal year ended May 31, 1998, the Fund accrued
total compensation to the Investment Manager amounting to 0.35% of the Fund's
average daily net assets and the Fund's total expenses amounted to 0.82% of the
Fund's average daily net assets.

INVESTMENT OBJECTIVE AND POLICIES
- -----------------------------------------------------------------------------

The investment objective of the Fund is current income, preservation of
principal and liquidity. The Fund will seek to achieve its investment
objective by investing all of its net assets in U.S. Treasury securities.
U.S. Treasury securities, which presently consist of U.S. Treasury bills,
U.S. Treasury notes and U.S. Treasury bonds, are direct obligations of the
U.S. Treasury and are backed by the "full faith and credit" of the U.S.
Government. The investment objective is a fundamental policy of the Fund and
may not be changed without the approval of the holders of a majority of the
Fund's shares. There is no assurance that the Fund's investment objective
will be achieved.

Neither the value nor the yield of the U.S. Treasury securities in which the
Fund invests (or the value or yield of shares of the Fund) are guaranteed by
the U.S. Government. The value of the Fund's portfolio securities and therefore
the net asset value of the Fund's shares may increase or decrease due to
changes in prevailing interest rates and other factors. Generally, as
prevailing interest rates rise, the value of the securities held by the Fund,
and concomitantly, the net asset value of the Fund's shares, will fall. Debt
securities with shorter maturities are generally subject to a lesser degree of
market fluctuation as a result of changes in interest rates than debt
securities with longer maturities.

5
<PAGE>
In an effort to minimize fluctuations in market value of its portfolio
securities the Fund is expected to maintain a portfolio with a dollar-weighted
average maturity of less than 3 years.

Zero Coupon Treasury Securities. A portion of the U.S. Treasury securities
purchased by the Fund may be "zero coupon" Treasury securities. These are U.S.
Treasury notes and bonds which have been stripped of their unmatured interest
coupons and receipts or which are certificates representing interests in such
stripped debt obligations and coupons. Such securities are purchased at a
discount from their face amount, giving the purchaser the right to receive
their full value at maturity. A zero coupon security pays no interest to its
holder during its life. Its value to an investor consists of the difference
between its face value at the time of maturity and the price for which it was
acquired, which is generally an amount significantly less than its face value
(sometimes referred to as a "deep discount" price).

The interest earned on such securities is, implicitly, automatically
compounded and paid out at maturity. While such compounding at a constant rate
eliminates the risk of receiving lower yields upon reinvestment of interest if
prevailing interest rates decline, the owner of a zero coupon security will be
unable to participate in higher yields upon reinvestment of interest received
if prevailing interest rates rise. For this reason, zero coupon securities are
subject to substantially greater market price fluctuations during periods of
changing prevailing interest rates than are comparable debt securities which
make current distributions of interest. Current federal tax law requires that a
holder (such as the Fund) of a zero coupon security accrue a portion of the
discount at which the security was purchased as income each year even though
the Fund receives no interest payments in cash on the security during the year.
See "Dividends, Distributions and Taxes."

Certain banks and brokerage firms have separated ("stripped") the principal
portions ("corpus") from the coupon portions of the U.S. Treasury bonds and
notes and sell them separately in the form of receipts or certificates
representing undivided interests in these instruments (which instruments are
generally held by a bank in a custodial or trust account). The Fund will not
purchase any such receipts or certificates representing stripped corpus or
coupon interests in U.S. Treasury securities sold by banks and brokerage firms.
The Fund will only purchase zero coupon Treasury securities which have been
stripped by the Federal Reserve Bank.

When-Issued and Delayed Delivery Securities and Firm Commitments. From time
to time, in the ordinary course of business, the Fund may purchase U.S.
Treasury securities on a when-issued or delayed delivery basis or may purchase
or sell U.S. Treasury securities on a firm commitment basis. For example, the
Fund may wish to purchase U.S. Treasury notes and bonds sold at periodic U.S.
Treasury auctions prior to a month or more of their issuance ("when-issued").
When such 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 the commitment. While the Fund will only purchase securities on a
when-issued, delayed delivery or firm 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 accrues to the purchaser
during this period. At the time the Fund makes the commitment to purchase or
sell securities on a when-issued, delayed delivery or firm 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. The Fund will also establish a
segregated account with its custodian bank in which it will continually
maintain cash or cash equivalents or other portfolio (U.S. Treasury) securities
equal in value to commitments to purchase securities on a when-issued, delayed
delivery or firm commitment basis.

Year 2000. The investment management services provided to the Fund by the
Investment Man-

6
<PAGE>

ager 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 cannot 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. The Investment
Manager, the Distributor and the Transfer Agent have been actively working on
necessary changes to their own computer systems to prepare for the year 2000
and expect that their systems will be adapted before that date, but there can
be no assurance that they will be successful, or that interaction with other
non-complying computer systems will not impair their services at that time.

In addition, it is possible that the markets for securities in which the
Fund invests may be detrimentally affected by computer failures throughout the
financial services industry beginning January 1, 2000. Improperly functioning
trading systems may result in settlement problems and liquidity issues. In
addition, corporate and governmental data processing errors may result in
production problems for individual companies and overall economic
uncertainties. Earnings of individual issuers will be affected by remediation
costs, which may be substantial and may be reported inconsistently in U.S. and
foreign financial statements. Accordingly, the Fund's investments may be
adversely affected.

PORTFOLIO MANAGEMENT

The Fund's portfolio is actively managed by its Investment Manager with a
view to achieving the Fund's investment objective. In determining which
securities to purchase for the Fund or hold in the Fund's portfolio, the
Investment Manager will rely on information from various sources, including
research, analysis and appraisals of brokers and dealers, including Dean Witter
Reynolds Inc., Morgan Stanley & Co. Incorporated and other broker-dealers that
are affiliates of the Investment Manager and others regarding economic
developments and interest rate trends, and the Investment Manager's own
analysis of factors it deems relevant. The Fund's portfolio is managed within
MSDW Advisors' Taxable Fixed Income Group, which manages 23 funds and fund
portfolios, with approximately $13.8 billion in assets as of June 30, 1998.
Rajesh K. Gupta, Senior Vice President of MSDW Advisors and Manager of MSDW
Advisors' Government Fixed-Income Group, has been the primary portfolio manager
of the Fund since its inception and has been a portfolio manager at MSDW
Advisors for over five years.

Brokerage commissions are not normally charged on the purchase or sale of
U.S. Government obligations, but such transactions may involve costs in the
form of spreads between bid and asked prices. Pursuant to an order of the
Securities and Exchange Commission, the Fund may effect principal transactions
in certain money market instruments with Dean Witter Reynolds Inc. In addition,
the Fund may incur brokerage commissions on transactions conducted through Dean
Witter Reynolds Inc., Morgan Stanley & Co. Incorporated and other brokers and
dealers that are affiliates of the Investment Manager. Although the Fund does
not intend to engage in short-term trading of portfolio securities as a means
of achieving its investment objective, it may sell portfolio securities without
regard to the length of time they have been held whenever such sale will, in
the opinion of the Investment Manager, strengthen the Fund's position and
contribute to its investment objective. It is not anticipated that the
portfolio trading engaged in by the Fund will result in its portfolio turnover
rate exceeding 200% in any one year. The Fund will incur costs commensurate
with its portfolio turnover rate. Short term gains and losses may result from
such transactions. See "Dividends, Distributions and Taxes" for a full
discussion of the tax implications of the Fund's trading policy.

PURCHASE OF FUND SHARES
- -----------------------------------------------------------------------------

The Fund offers its shares for sale to the public on a continuous basis.
Pursuant to a Distribution Agreement between the Fund and Morgan Stanley Dean
Witter Distributors Inc. ("MSDW Distributors"

<PAGE>

or the "Distributor"), an affiliate of the Investment Manager, shares of the
Fund are distributed by the Distributor and offered by Dean Witter Reynolds
Inc. ("DWR"), a selected dealer and subsidiary of Morgan Stanley Dean Witter &
Co., and others who have entered into Selected Dealer agreements with the
Distributor ("Selected Broker-Dealers"). It is anticipated that DWR will
undergo a change of corporate name which is expected to incorporate the brand
name of "Morgan Stanley Dean Witter," pending approval of various regulatory
authorities. The principal executive office of the Distributor is located at
Two World Trade Center, New York, New York 10048.

The minimum initial purchase is $10,000 (the Fund and the Distributor may,
from time to time accept initial purchases of $5,000). The minimum initial
purchase in the case of investments through EasyInvest (Service Mark), an
automatic purchase plan (see "Shareholder Services"), is $1,000, provided that
the schedule of automatic investments will result in investments totalling at
least $10,000 within the first twelve months. In the case of investments
pursuant to systematic payroll deduction plans (including Individual Retirement
Plans), the Fund, in its discretion, may accept investments without regard to
any minimum amounts which would otherwise be required if the Fund has reason to
believe that additional investments will increase the investment in all
accounts under such plans to at least $10,000. Minimum subsequent purchases of
$100 or more may be made by sending a check, payable to Morgan Stanley Dean
Witter Short-Term U.S. Treasury Trust, directly to Morgan Stanley Dean Witter
Trust FSB (the "Transfer Agent" or "MSDW Trust") at P.O. Box 1040, Jersey City,
NJ 07303 or by contacting a Morgan Stanley Dean Witter Financial Advisor or
other Selected Broker-Dealer representative of DWR or another Selected
Broker-Dealer. The offering price will be the net asset value per share next
determined (see "Determination of Net Asset Value" below) following receipt and
acceptance by the Transfer Agent of an order in proper form and accompanied by
payment in Federal funds (i.e., monies of member banks within the Federal
Reserve System held on deposit at a Federal Reserve Bank) available to the Fund
for investment. Orders for the purchase of Fund shares placed by investors
through DWR or another Selected Broker-Dealer will be transmitted to the
Transfer Agent for purchase on that date, with payment in Federal funds
transmitted to the Transfer Agent on the business day following the day the
order is placed. Shares commence earning income on the date following the date
of purchase. Certificates for shares purchased will not be issued unless
requested by the shareholder in writing to the Transfer Agent.

Sales personnel of a Selected Broker-Dealer are compensated for shares of
the Fund sold by them by the Distributor or any of its affiliates and/or by a
Selected Broker-Dealer. In addition, some sales personnel of the Selected
Broker-Dealer will receive various types of non-cash compensation as special
sales incentives, including trips to educational and/or business seminars and
merchandise. The Fund and the Distributor reserve the right to reject any
purchase orders.

DETERMINATION OF NET ASSET VALUE

The net asset value per share of the Fund is determined by taking the value
of all the assets of the Fund, subtracting all liabilities, dividing by the
number of shares outstanding and adjusting the result to the nearest cent. The
net asset value per share is determined by the Investment Manager as of 4:00
p.m. New York 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). The net asset value per share will not be determined on Good
Friday and on such other federal and non-federal holidays as are observed by
the New York Stock Exchange.

In the calculation of the Fund's net asset value: (1) all portfolio
securities for which over-the-counter market quotations are readily available
are valued at the bid price; (2) when market quotations are not readily
available, including circumstances under which it is determined by the
Investment Manager that sale or bid prices are not reflective of a security's
market value, portfolio securities are valued at

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<PAGE>
their fair value as determined in good faith under procedures established by
and under the general supervision of the Fund's Board of Trustees (valuation of
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 (3)
short-term debt instruments having a maturity date of more than 60 days are
valued on a "mark-to-market" basis, that is, at prices based on market
quotations for securities of similar type, yield, quality and maturity, until
60 days prior to maturity and thereafter at amortized cost. Short-term
instruments having a maturity date of 60 days or less at the time of purchase
are val-ued at amortized cost unless the Board of Trustees determines this does
not represent the securities' market value, in which case these securities will
be valued at their fair value as determined by the Trustees.

Certain of the Fund's portfolio securities may be valued by an outside
pricing service approved by the Fund's Trustees. The pricing service may
utilize a matrix system incorporating security quality, maturity and coupon as
the evaluation model parameters, and/or research and 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.

PLAN OF DISTRIBUTION

The Fund has entered into a Plan of Distribution pursuant to Rule 12b-1
under the Investment Com-pany Act of 1940, as amended (the "Act"), with the
Distributor whereby the expenses of certain activities and services, including
personal services to shareholders and maintenance of shareholder accounts, in
connection with the distribution of the Fund's shares are reimbursed. The
principal activities and services which may be provided by the Distributor and
its affiliates, or any other Selected Broker-Dealer under the Plan include: (1)
compensation to, and expenses of, Morgan Stanley Dean Witter Financial Advisors
and other Selected Broker-Dealer representatives, including overhead and
telephone expenses; (2) sales incentives and bonuses to sales representatives
and to marketing personnel in connection with promoting sales of the Fund's
shares; (3) expenses incurred in connection with promoting sales of the Fund's
shares; (4) preparing and distributing sales literature; and (5) providing
advertising and promotional activities, including direct mail solicitation and
television, radio, newspaper, magazine and other media advertisements.
Reimbursements for these services will be made in monthly payments by the Fund,
which will in no event exceed an amount equal to a payment at the annual rate
of 0.35% of the Fund's average daily net assets. A portion of the amount
payable pursuant to the Plan, which may not exceed 0.25% of the Fund's average
daily net assets, is characterized as a service fee within the meaning of the
NASD guidelines. The services fee is a payment made for personal services
and/or the maintenance of shareholder accounts. Expenses incurred pursuant to
the Plan in any fiscal year will not be reimbursed by the Fund through payments
accrued in any subsequent fiscal year. The Fund accrued $827,872 to the
Distributor pursuant to the Plan for the fiscal year ended May 31, 1998. This
is an accrual at the annual rate of 0.34% of the Fund's average daily net
assets.

SHAREHOLDER SERVICES
- -----------------------------------------------------------------------------

Automatic Investment of Dividends and Distribu-tions. All income dividends
and capital gains distributions are automatically paid in full and fractional
shares of the Fund, unless the shareholder requests that they be paid in cash.
Such dividends and distributions will be paid in shares of the Fund at net
asset value per share. At any time an investor may request the Transfer Agent
in writing to have subsequent dividends and/or capital gains distributions paid
to the investor in cash rather than shares. To assure sufficient time to
process the change, such request should be received by the Transfer Agent at
least five business days prior to the payment date for which it commences to
take effect. In the case of

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<PAGE>
recently purchased shares for which registration instructions have not been
received on the record date, cash payments will be made to DWR or other
Selected Broker-Dealer through whom shares were purchased.

Investment of Distributions Received in Cash. Any shareholder who receives a
cash payment representing a dividend or capital gains distribution may invest
such dividend or distribution at the net asset value next determined after
receipt by the Transfer Agent by returning the check or the proceeds to the
Transfer Agent within 30 days after the payment date.

Targeted Dividends (Service Mark). In states where it is legally
permissible, shareholders may also have all income dividends and capital gains
distributions automatically invested in shares of an open-end investment
company for which MSDW Advisors serves as investment manager (collectively, the
"Morgan Stanley Dean Witter Funds"), other than Morgan Stanley Dean Witter
Short-Term U.S. Treasury Trust. Such investment will be made as described above
for automatic investment in shares of the Fund, at the net asset value per
share of the selected Morgan Stanley Dean Witter Fund as of the close of
business on the payment date and will begin to earn dividends, if any, in the
selected Morgan Stanley Dean Witter Fund the next business day. To participate
in the Targeted Dividends program, shareholders should contact their Morgan
Stanley Dean Witter Financial Advisor or other Selected Broker-Dealer
representative or the Transfer Agent. Shareholders of the Fund must be
shareholders of the selected Class of the Morgan Stanley Dean Witter Fund
targeted to receive investments from dividends at the time they enter the
Targeted Dividends program. Investors should review the prospectus of the
targeted Morgan Stanley Dean Witter Fund before entering the program.

EasyInvest (Service Mark). Shareholders may subscribe to EasyInvest, an
automatic purchase plan which provides for any amount from $100 to $5,000 to be
transferred automatically from a checking or savings account or following
redemption of shares of a Morgan Stanley Dean Witter money market fund, on a
semi-monthly, monthly or quarterly basis, to the Fund's Transfer Agent for
investment in shares of the Fund (see "Purchase of Fund Shares" and
"Redemptions and Repurchases--Involuntary Redemption"). Shares purchased
through EasyInvest will be added to the shareholder's existing account at the
net asset value calculated the same business day the transfer of funds is
effected. For further information or to subscribe to EasyInvest, shareholders
should contact their Morgan Stanley Dean Witter Financial Advisor or other
Selected Broker-Dealer representative or the Transfer Agent.

Systematic Withdrawal Plan. A systematic withdrawal plan (the "Withdrawal
Plan") is available for shareholders who own or purchase shares of the Fund
having a minimum value of $10,000 based upon the then current offering price.
The Withdrawal Plan provides for monthly or quarterly (March, June, September
and December) checks in any dollar amount, not less than $25, or in any whole
percentage of the account balance, on an annualized basis. The shares will be
redeemed at their net asset value determined, at the shareholder's option, on
the tenth or twenty-fifth day (or next following business day) of the relevant
month or quarter and normally a check for the proceeds will be mailed by the
Transfer Agent, or amounts credited to a shareholder's DWR or other Selected
Broker-Dealer brokerage account, within five business days after the date of
redemption. Only shareholders having accounts in which no share certificates
have been issued will be permitted to enroll in the Withdrawal Plan.

Withdrawal Plan payments should not be considered as dividends, yields or
income. If periodic withdrawal plan payments continuously exceed net investment
income and net capital gains, the shareholder's original investment will be
correspondingly reduced and ultimately exhausted.

Each withdrawal constitutes a redemption of shares and any gain or loss
realized must be recognized for federal income, and generally, state and local
tax purposes.

Shareholders wishing to enroll in the Withdrawal Plan should make this
election on the Investment Application or contact their Morgan Stanley Dean
Witter Financial Advisor or other Selected Broker-Dealer representative or the
Transfer Agent.

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<PAGE>
Tax Sheltered Retirement Plans. Retirement plans are available through the
Investment Manager for use by the self-employed, eligible Individual Retirement
Accounts and Custodial Accounts under Section 403(b)(7) of the Internal Revenue
Code. Adoption of such plans should be on advice of legal counsel or tax
adviser.

For further information regarding plan administration, custodial fees and
other details, investors should contact their Morgan Stanley Dean Witter
Financial Advisor or other Selected Broker-Dealer representative or the
Transfer Agent.

EXCHANGE PRIVILEGE

An "Exchange Privilege," that is, the privilege of exchanging shares of
certain Morgan Stanley Dean Witter Funds for shares of the Fund, exists whereby
shares of Morgan Stanley Dean Witter Funds that are multiple class funds
("Morgan Stanley Dean Witter Multi-Class Funds"), shares of Morgan Stanley Dean
Witter Multi-State Municipal Series Trust and Morgan Stanley Dean Witter Hawaii
Municipal Trust, which are Morgan Stanley Dean Witter Funds sold with a
front-end sales charge ("FSC Funds"), and shares of Morgan Stanley Dean Witter
Global Short-Term Income Fund Inc. ("Global Short-Term"), which is a Morgan
Stanley Dean Witter Fund offered with a contingent deferred sales charge
("CDSC"), may be exchanged for shares of the Fund, Morgan Stanley Dean Witter
Limited Term Municipal Trust and Morgan Stanley Dean Witter Short-Term Bond
Fund, and for shares of five Morgan Stanley Dean Witter Funds which are money
market funds: Morgan Stanley Dean Witter Liquid Asset Fund Inc., Morgan Stanley
Dean Witter U.S. Government Money Market Trust, Morgan Stanley Dean Witter
Tax-Free Daily Income Trust, Morgan Stanley Dean Witter California Tax Free
Daily Income Trust and Morgan Stanley Dean Witter New York Municipal Money
Market Trust (which eight funds, including the Fund, are hereinafter
collectively referred to as "Exchange Funds"). Shares of the Exchange Funds
received in an exchange for shares of a Morgan Stanley Dean Witter Multi-Class
Fund may be redeemed and exchanged only for shares of the corresponding Class
of a Morgan Stanley Dean Witter Multi-Class Fund or for shares of one of the
other Exchange Funds, provided that shares of the Exchange Funds received in an
exchange for Class A shares of a Morgan Stanley Dean Witter Multi-Class Fund
may also be redeemed and exchanged for shares of a FSC Fund, and shares of the
Exchange Funds received in an exchange for Class B shares of a Morgan Stanley
Dean Witter Multi-Class Fund may also be redeemed and exchanged for shares of
Global Short-Term. In addition, shares of the Exchange Funds received in an
exchange for shares of a FSC Fund may be redeemed and exchanged for Class A
shares of a Morgan Stanley Dean Witter Multi-Class Fund or for shares of one of
the other Exchange Funds, and shares of the Exchange Funds received in an
exchange for shares of Global Short-Term may be redeemed and exchanged for
Class B shares of a Morgan Stanley Dean Witter Multi-Class Fund or for shares
of one of the other Exchange Funds.

An exchange to an Exchange Fund that is not a money market fund is on the
basis of the next calculated net asset value per share of each fund after the
exchange order is received. When exchanging into a money market fund, shares of
the Multi-Class Fund, the FSC Fund, Global Short-Term or the Exchange Fund are
redeemed at their next calculated net asset value and exchanged for shares of
the money market fund at their net asset value determined the following
business day. Ultimately, any applicable CDSC will have to be paid upon
redemption of shares originally purchased from Global Short-Term or a Class of
a Morgan Stanley Dean Witter Multi-Class Fund that imposes a CDSC. (If shares
of an Exchange Fund received in exchange for shares originally purchased from
Global Short-Term or Class B of a Morgan Stanley Dean Witter Multi-Class Fund
are exchanged for shares of Global Short-Term or another Morgan Stanley Dean
Witter Multi-Class Fund having a different CDSC schedule than that of Global
Short-Term or the Morgan Stanley Dean Witter Multi-Class Fund from which the
Exchange Fund shares were acquired, the shares will be subject to the higher
CDSC schedule.) During the period of time the shares originally purchased from
Global Short-Term or from a Class of a Morgan Stanley Dean Witter Multi-Class
Fund that imposes a CDSC remain in the

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<PAGE>

Exchange Fund, the holding period (for the purpose of determining the rate of
CDSC) is frozen. If those shares are subsequently re-exchanged for shares of a
Morgan Stanley Dean Witter Multi-Class Fund or shares of Global Short-Term, the
holding period previously frozen when the first exchange was made resumes on
the last day of the month in which shares of a Morgan Stanley Dean Witter
Multi-Class Fund or shares of Global Short-Term are reacquired. Thus, the CDSC
is based upon the time (calculated as described above) the shareholder was
invested in shares of a Morgan Stanley Dean Witter Multi-Class Fund or in
shares of Global Short-Term. In the case of exchanges of Class A shares of a
Morgan Stanley Dean Witter Multi-Class Fund which are subject to a CDSC, the
holding period also includes the time (calculated as described above) the
shareholder was invested in shares of a FSC Fund. In the case of shares
exchanged into an Exchange Fund on or after April 23, 1990, upon a redemption
of shares which results in a CDSC being imposed, a credit (not to exceed the
amount of the CDSC) will be given in an amount equal to the Exchange Fund 12b-1
fees, if any, incurred on or after that date which are attributable to those
shares (see "Purchase of Fund Shares--Plan of Distribution" in the respective
Exchange Fund Prospectus for a description of Exchange Fund distribution fees).
Exchanges may be made after the shares of the fund acquired by purchase (not by
exchange or dividend reinvestment) have been held for thirty days. There is no
waiting period for exchanges of shares acquired by exchange or dividend
reinvestment.

Additional Information Regarding Exchanges. Purchases and exchanges should
be made for investment purposes only. A pattern of frequent exchanges may be
deemed by the Distributor to be abusive and contrary to the best interests of
the Fund's other shareholders and, at the Distributor's discretion, may be
limited by the Fund's refusal to accept additional purchases and/or exchanges
from the investor. Although the Fund does not have any specific definition of
what constitutes a pattern of frequent exchanges, and will consider all
relevant factors in determining whether a particular situation is abusive and
contrary to the best interests of the Fund and its other shareholders,
investors should be aware that the Fund and each of the other Morgan Stanley
Dean Witter Funds may in their discretion limit or otherwise restrict the
number of times this Exchange Privilege may be exercised by any investor. Any
such restriction will be made by the Fund on a prospective basis only, upon
notice to the shareholder not later than ten days following such shareholder's
most recent exchange.

The Exchange Privilege may be terminated or revised at any time by the Fund
and/or any of such Morgan Stanley Dean Witter Funds for which shares of the
Fund may be exchanged, upon such notice as may be required by applicable
regulatory agencies (presently sixty days' prior written notice for termination
or material revision), provided that six months' prior written notice of
termination will be given to the shareholders who hold shares of the Exchange
Funds pursuant to this Exchange Privilege, and provided further that the
Exchange Privilege may be terminated or materially revised without notice under
certain unusual circumstances. Shareholders maintaining margin accounts with
DWR or another Selected Broker-Dealer are referred to their Morgan Stanley Dean
Witter Financial Advisor or other Selected Broker-Dealer representative
regarding restrictions on exchange of shares of the Fund pledged in their
margin account.

The current prospectus for each fund describes its investment objective(s)
and policies, and shareholders should obtain one and read it carefully before
investing. Exchanges are subject to the minimum investment requirement of each
Class of shares and any other conditions imposed by each fund. In the case of
any shareholder holding a share certificate or certificates, no exchanges may
be made until all applicable share certificates have been received by the
Transfer Agent and deposited in the shareholder's account. An exchange will be
treated for federal income tax purposes the same as a repurchase or redemption
of shares, on which the shareholder may realize a capital gain or loss.
However, the ability to deduct capital losses on an exchange may be limited in
situations where there is an exchange of shares within ninety days after the
shares are purchased. The Exchange Privilege is only available in states where
an exchange may legally be made.

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<PAGE>

If DWR or another Selected Broker-Dealer is the current broker-dealer of
record and its account numbers are part of the account information,
shareholders may initiate an exchange of shares of the Fund for shares of any
of the above Morgan Stanley Dean Witter Funds pursuant to this Exchange
Privilege by contacting their Morgan Stanley Dean Witter Financial Advisor or
other Selected Broker-Dealer representative (no Exchange Privilege
Authorization Form is required). Other shareholders (and those shareholders who
are clients of DWR or another Selected Broker-Dealer but who wish to make
exchanges directly by writing or telephoning the Transfer Agent) must complete
and forward to the Transfer Agent an Exchange Privilege Authorization Form,
copies of which may be obtained from the Transfer Agent, to initiate an
exchange. If the Authorization Form is used, exchanges may be made by
contacting the Transfer Agent at (800) 869-NEWS (toll-free).

The Fund will employ reasonable procedures to confirm that exchange
instructions communicated over the telephone are genuine. Such procedures
include requiring various forms of personal identification such as name,
mailing address, social security or other tax identification number and DWR or
other Selected Broker-Dealer account number (if any). Telephone instructions
will also be recorded. If such procedures are not employed, the Fund may be
liable for any losses due to unauthorized or fraudulent instructions.

Telephone exchange instructions will be accepted if received by the Transfer
Agent between 9:00 a.m. and 4:00 p.m. New York time, on any day the New York
Stock Exchange is open. Any shareholder wishing to make an exchange who has
previously filed an Exchange Privilege Authorization Form and who is unable to
reach the Fund by telephone should contact his or her Morgan Stanley Dean
Witter Financial Advisor or other Selected Broker-Dealer representative, if
appropriate, or make a written exchange request. Shareholders are advised that
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 experience of the Morgan Stanley Dean Witter Funds in the past.

For further information regarding the Exchange Privilege, shareholders
should contact their Morgan Stanley Dean Witter Financial Advisor or other
Selected Broker-Dealer representative or the Transfer Agent.

REDEMPTIONS AND REPURCHASES
- -----------------------------------------------------------------------------

REDEMPTIONS. Shares of the Fund may be redeemed through the Transfer Agent
(without redemption or other charge) on any day that the New York Stock
Exchange is open (see "Purchase of Fund Shares--Determination of Net Asset
Value"). Redemptions will be effected at the net asset value per share next
determined after the receipt of a redemption request meeting the applicable
requirements described below.

1. BY CHECK

The Transfer Agent will supply blank checks to any shareholder who has
requested them on an Investment Application. The shareholder may make checks
payable to the order of anyone in any amount not less than $500 (checks written
in amounts under $500 will not be honored by the Transfer Agent). Shareholders
must sign checks exactly as their shares are registered. If the account is a
joint account, the check may contain one signature unless the joint owners have
specifically specified on an Investment Application that all owners are
required to sign checks. Only shareholders having accounts in which no share
certificates have been issued will be permitted to redeem shares by check or
enroll in the Systematic Withdrawal Plan.

Shares will be redeemed at their net asset value next determined (see
"Purchase of Fund Shares--Determination of Net Asset Value") after receipt by
the Transfer Agent of a check which does not exceed the value of the account.
Payment of the proceeds of a check will normally be made on the next business
day after receipt by the Transfer Agent of the check in proper form. Shares
purchased by check (including a certified or bank cashier's check) are not
normally available to cover redemption checks until fifteen days after receipt
of

13
<PAGE>
the check used for investment by the Transfer Agent. The Transfer Agent will
not honor a check in an amount exceeding the value of the account at the time
the check is presented for payment. Since the dollar value of an account is
constantly changing, it is not possible for a shareholder to determine in
advance the total value of its account so as to write a check for the
redemption of the entire account. For the same reason, a shareholder should not
write a check for substantially all of the current value of the shares in its
account with the Fund.

2. BY TELEPHONE OR WIRE INSTRUCTIONS WITH PAYMENT TO PREDESIGNATED BANK
ACCOUNT

A shareholder may redeem shares by telephoning or sending wire instructions
to the Transfer Agent. Payment will be made by the Transfer Agent to the
shareholder's bank account at any commercial bank designated by the shareholder
in an Investment Application, by wire if the amount is $1,000 or more and the
shareholder so requests, and otherwise by mail. Normally, the Transfer Agent
will transmit payment the next business day following receipt of a request for
redemption in proper form. Only shareholders having accounts in which no share
certificates have been issued will be permitted to redeem shares by wire
instructions.

DWR and any other participating Selected Broker-Dealers have informed the
Distributor and the Fund that, on behalf of and as agent for their customers
who are shareholders of the Fund, they will transmit to the Fund requests for
redemption of shares owned by their customers. In such cases, the Transfer
Agent will wire proceeds of redemptions to DWR's or other Selected
Broker-Dealer's bank account for credit to the shareholders' accounts the
following business day. DWR and other participating Selected Broker-Dealers
have also informed the Distributor and the Fund that they do not charge for
this service.

Redemption instructions must include the shareholder's name and account
number and be wired or called to the Transfer Agent at 800-869-NEWS
(toll-free).

3. BY MAIL

A shareholder may redeem shares by sending a letter to Morgan Stanley Dean
Witter Trust FSB, P.O. Box 983, Jersey City, NJ 07303, requesting redemption
and surrendering share certificates if any have been issued.

Redemption proceeds will be mailed to the shareholder at his or her
registered address or mailed or wired to his or her predesignated bank account,
as he or she may request. Proceeds of redemption may also be sent to some other
person, as requested by the shareholder in accordance with the general
redemption requirements listed below.

GENERAL REDEMPTION REQUIREMENTS

Written requests for redemption must be signed by the registered
shareholder(s). If the proceeds are to be paid to anyone other than the
registered shareholder(s) or sent to any address other than the shareholder's
registered address or predesignated bank account, signatures must be guaranteed
by an eligible guarantor acceptable to the Transfer Agent, (shareholders should
contact the Transfer Agent for a determination as to whether a particular
institution is such an eligible guarantor), except in the case of redemption by
check. Additional documentation may be required where shares are held by a
corporation, partnership, trust or other organization. With regard to shares of
the Fund acquired pursuant to the Exchange Privilege, any applicable contingent
deferred sales charge will be imposed upon the redemption of such shares (see
"Purchase of Fund Shares--Exchange Privilege").

If shares to be redeemed are represented by a share certificate, the request
for redemption must be accompanied by the share certificate and a stock
assignment form signed by the registered shareholder(s) exactly as the account
is registered. Signatures must be guaranteed by a commercial bank or member
firm of a domestic stock exchange. Additional documentation may be required
where shares are held by a corporation, partnership, trust or other
organization.

All requests for redemption should be sent to Morgan Stanley Dean Witter
Trust FSB, P.O. Box 983, Jersey City, NJ 07303.

Generally, the Fund will attempt to make payment for all redemptions within
one business day, and in no event later than seven days after receipt of

14
<PAGE>
such redemption request in proper form. However, if the shares being redeemed
were purchased by check (including a certified or bank cashier's check),
payment may be delayed for the minimum time needed to verify that the check
used for investment has been honored (not more than fifteen days from the time
of receipt of the check by the Transfer Agent). In addition, the Fund may
postpone redemptions at certain times when normal trading is not taking place
on the New York Stock Exchange.

Whether certificates are held by the shareholder or shares are held in a
shareholder's account, if the proceeds are to be paid to any person other than
the record owner, or if the proceeds are to be paid to a corporation (other
than DWR or any other Selected Broker-Dealer for the account of the
shareholder), partnership, trust or fiduciary, or sent to the shareholder at an
address other than the registered address, signature(s) must be guaranteed by
an eligible guarantor acceptable to the Transfer Agent (shareholders should
contact the Transfer Agent for a determination as to whether a particular
institution is such an eligible guarantor). A stock power may be obtained from
any dealer or commercial bank.

Repurchase. DWR and other Selected Broker-Dealers are authorized to
repurchase shares represented by a share certificate which is delivered to any
of their offices. Shares held in a shareholder's account without a share
certificate may also be repurchased by DWR and other Selected Broker-Dealers
upon the telephonic request of the shareholder. The repurchase price is the net
asset value next determined (see "Purchase of Fund Shares--Determination of Net
Asset Value") after such repurchase order is received. Payment for shares
repurchased may be made by the Fund to DWR and other Selected Broker-Dealers
for the account of the shareholder. The offers by DWR and other Selected
Broker-Dealers to repurchase shares from shareholders may be suspended by them
at any time. In that event, shareholders may redeem their shares through the
Fund's Transfer Agent as set forth above under "Redemption."

Payment for Shares Redeemed or Repurchased. Payment for shares presented for
repurchase or redemption will be made by check within seven days after receipt
by the Transfer Agent of the certificate and/or written request in good order.
Such payment may be postponed or the right of redemption suspended under
unusual circumstances. If the shares to be redeemed have recently been
purchased by check, payment of the redemption proceeds may be delayed for the
minimum time needed to verify that the check used for investment has been
honored (not more than fifteen days from the time of receipt of the check by
the Transfer Agent). Shareholders maintaining margin accounts with DWR or other
Selected Broker-Dealers are referred to their Morgan Stanley Dean Witter
Financial Advisor or other Selected Broker-Dealer representative regarding
restrictions on redemption of shares of the Fund pledged in the margin account.

Reinstatement Privilege. A shareholder who has had his or her shares
redeemed or repurchased and has not previously exercised this reinstatement
privilege may, within 35 days after the date of the redemption or repurchase,
reinstate any portion or all of the proceeds of such redemption or repurchase
in shares of the Fund at net asset value next determined after a reinstatement
request, together with the proceeds, is received by the Transfer Agent.

Involuntary Redemption. The Fund reserves the right to redeem, on 60 days'
notice and at net asset value, the shares of any shareholder whose shares have
a value of less than $1,000 as a result of redemptions or repurchases, or such
lesser amount as may be fixed by the Trustees or, in the case of an account
opened through EasyInvest (Service Mark), if after twelve months the
shareholder has invested less than $10,000 in the account. However, before the
Fund redeems such shares and sends the proceeds to the shareholder, it will
notify the shareholder that the value of the shares is less than the applicable
amount and allow him or her 60 days to make an additional investment in an
amount which will increase the value of his or her account to at least the
applicable amount or more before the redemption is processed.

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<PAGE>

DIVIDENDS, DISTRIBUTIONS AND TAXES
- -----------------------------------------------------------------------------

Dividends and Distributions. The Fund declares dividends from net investment
income on each day the New York Stock Exchange is open for business. Such
dividends are payable monthly. The Fund intends to distribute net capital
gains, if any, at least once each year. The Fund may, however, elect to retain
all or a portion of any such net long-term capital gains in any year.

All dividends and any capital gains distributions will be paid in additional
Fund shares and automatically credited to the shareholder's account without
issuance of a share certificate unless the shareholder requests in writing that
all dividends or all dividends and distributions be paid in cash. (See
"Shareholder Services--Automatic Investment of Dividends and Distributions".)

TAXATION

Federal Taxes. Because the Fund intends to distribute substantially all of
its net investment income and net short-term capital gains to shareholders and
otherwise remain qualified as a regulated investment company under Subchapter M
of the Internal Revenue Code, it is not expected that the Fund will be required
to pay any federal income tax on such income and capital gains. Shareholders
will normally have to pay federal income taxes on the dividends and capital
gains distributions they receive from the Fund. Distributions of net investment
income and net short-term capital gains are taxable to the shareholder as
ordinary dividend income regardless of whether the shareholder receives such
distributions in additional shares or in cash. Any dividends declared in the
last quarter of any calendar year which are paid in the following year prior to
February 1 will be deemed received by the shareholder in the prior year.

Long-term and short-term capital gains may be generated by the sale of
portfolio securities by the Fund. Distributions of 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.

No portion of such distributions will be eligible for the dividends received
deduction for corporations. To avoid being subject to a 31% federal backup
withholding tax on taxable dividends, capital gains distributions and the
proceeds of redemptions and repurchases, shareholders' taxpayer identification
numbers must be furnished and certified as to accuracy.

Current federal law requires that a holder (such as the Fund) of a zero
coupon security accrue a portion of the discount at which the security was
purchased as income each year even though the Fund receives no interest
payments in cash on the security during the year. Accordingly, the Fund may be
required to pay out as an income distribution each year an amount which is
greater than the total amount of cash receipts of interest the Fund actually
received. Such distributions will be made from the available cash of the Fund
or by liquidation of portfolio securities, if necessary.

The Fund may at times make payments from sources other than income or net
capital gains. Payments from such sources will, in effect, represent a return
of a portion of each shareholder's investment. All, or a portion, of such
payments will not be taxable to shareholders.

After the end of the year, shareholders will receive full information on
their dividends and capital gains distributions for tax purposes, including
information as to the Federal tax status of dividends and distributions paid or
retained by the Fund.

The foregoing discussion relates solely to the Federal income tax
consequences of an investment in the Fund and dividends (where applicable) and
distributions may also be subject to state and local taxes (see "State and
Local Taxes" below); therefore, each shareholder is advised to consult his or
her own tax adviser.

State and Local Taxes. The Fund intends to invest only in U.S. Treasury
obligations that provide interest income exempt from state and local taxes.
Because all States presently allow the pass-through of federal obligation
interest derived from specific

16
<PAGE>
federal obligations, it is anticipated that substantially all of the interest
income generated by the Fund and paid out to shareholders as net investment
income will be exempt from state and local taxation. Such investment income,
however, will not be exempt from federal tax. Furthermore, any capital gains
realized by the Fund will not be exempt from federal, and generally, state and
local taxes. It should be noted that although the Fund intends to invest only
in securities the pass-through income from which is believed exempt from state
and local income taxes, it is possible that a state or local taxing authority
may seek to tax an investor on a portion of the interest income of a particular
government obligation held by the Fund. Shareholders are urged to consult their
tax advisers with respect to specific questions regarding federal, state and
local taxes.

PERFORMANCE INFORMATION
- -----------------------------------------------------------------------------

From time to time the Fund may quote its "yield" and/or its "total return"
in advertisements and sales literature. Both the yield and the total return of
the Fund are based on historical earnings and are not intended to indicate
future performance. The yield of the Fund is computed by dividing the net
investment income of the Fund over a 30-day period by an average value (using
the average number of shares entitled to receive dividends and the net asset
value per share at the end of the period), all in accordance with applicable
regulatory requirements. Such amount is compounded for six months and then
annualized for a twelve-month period to derive the yield of the Fund. The Fund
may also quote its tax-equivalent yield, which is calculated by determining the
pre-tax yield which after being taxed at a stated rate, would be equivalent to
the yield determined as described above.

The "average annual total return" of the Fund refers to a figure reflecting
the average annualized percentage increase (or decrease) in the value of an
initial investment in the Fund of $1,000 over periods of one, five and ten
years or over the life of the Fund, if less than any of the foregoing. Average
annual total return reflects all income earned by the Fund, any appreciation or
depreciation of the assets of the Fund, and all expenses incurred by the Fund,
for the stated periods. It also assumes reinvestment of all dividends and
distributions paid by the Fund.

The Fund from time to time may also advertise its performance relative to
certain performance rankings and indexes compiled by independent organizations
(such as Lipper Analytical Services Inc.).

ADDITIONAL INFORMATION
- -----------------------------------------------------------------------------

Voting Rights. All shares of beneficial interest of the Fund are of $0.01
par value and are equal as to earnings, assets and voting privileges. There are
no conversion, pre-emptive or other subscription rights. In the event of
liquidation, each share of beneficial interest of the Fund is entitled to its
portion of all of the Fund's assets after all debts and expenses have been
paid. The shares do not have cumulative voting rights.

The Fund is not required to hold Annual Meetings of Shareholders and in
ordinary circumstances the Fund does not intend to hold such meetings. The
Trustees may call Special Meetings of Shareholders for action by shareholder
vote as may be required by the Act or the Declaration of Trust. The Trustees
themselves have the power to alter the number and the terms of office of the
Trustees and they may at any time lengthen their own terms or make their terms
of unlimited duration and appoint their own successors, provided that always at
least a majority of the Trustees has been elected by the shareholders of the
Fund. Under certain circumstances the

17
<PAGE>
Trustees may be removed by action of the Trustees. The shareholders also have
the right under certain circumstances to remove the Trustees.

Under Massachusetts law, shareholders of a business trust may, under certain
circumstances, be held personally liable as partners for the obligations of the
Fund. The Declaration of Trust contains an express disclaimer of shareholder
liability for acts or obligations of the Fund and requires that notice of such
disclaimer be given in each instrument entered into or executed by the Fund.
Under the Declaration of Trust, indemnification shall be made out of the Fund's
property for any shareholder held personally liable for the obligations of the
Fund. Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the Fund itself
would be unable to meet its obligations. Given the above limitations on
shareholder personal liability and the nature of the Fund's assets and
operations, the possibility of the Fund being unable to meet its obligations is
remote and thus, in the opinion of Massachusetts counsel to the Fund, the risk
to Fund shareholders is remote.

Code of Ethics. Directors, officers and employees of MSDW Advisors, MSDW
Services and MSDW Distributors are subject to a strict Code of Ethics adopted
by those companies. The Code of Ethics is intended to ensure that the interests
of shareholders and other clients are placed ahead of any personal interest,
that no undue personal benefit is obtained from a person's employment
activities and that actual and potential conflicts of interest are avoided. To
achieve these goals and comply with regulatory requirements, the Code of Ethics
requires, among other things, that personal securities transactions by
employees of the companies be subject to an advance clearance process to
monitor that no Morgan Stanley Dean Witter Fund is engaged at the same time in
a purchase or sale of the same security. The Code of Ethics bans the purchase
of securities in an initial public offering, and also prohibits engaging in
futures and options transactions and profiting on short-term trading (that is,
a purchase within sixty days of a sale or a sale within sixty days of a
purchase) of a security. In addition, investment personnel may not purchase or
sell a security for their personal account within thirty days before or after
any transaction in any Morgan Stanley Dean Witter Fund managed by them. Any
violations of the Code of Ethics are subject to sanctions, including reprimand,
demotion or suspension or termination of employment. The Code of Ethics
comports with regulatory requirements and the recommendations in the 1994
report by the Investment Company Institute Advisory Group on Personal
Investing.

Master/Feeder Conversion. The Fund reserves the right to seek to achieve its
investment objective by investing all of its investable assets in a
diversified, open-end management investment company having the same investment
objective and policies and substantially the same investment restrictions as
those applicable to the Fund.

Shareholder Inquiries. All inquiries regarding the Fund should be
directed to the Fund at the telephone numbers or address set forth on the
front cover of this Prospectus.

18
<PAGE>

Morgan Stanley Dean Witter MORGAN STANLEY
Short-Term U.S. Treasury Trust DEAN WITTER
Two World Trade Center SHORT-TERM
New York, New York 10048 U.S. TREASURY
TRUST
TRUSTEES
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Wayne E. Hedien
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder

OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer

Barry Fink
Vice President, Secretary and General Counsel

Rajesh K. Gupta
Vice President

Thomas F. Caloia
Treasurer

CUSTODIAN
The Bank of New York
90 Washington Street
New York, New York 10286

TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Morgan Stanley Dean Witter Trust FSB
Harborside Financial Center
Plaza Two
Jersey City, New Jersey 07311

INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036

INVESTMENT MANAGER
Morgan Stanley Dean Witter Advisors Inc. PROSPECTUS--JULY 29, 1998

<PAGE>

MORGAN STANLEY
DEAN WITTER
SHORT-TERM
U.S. TREASURY
TRUST

STATEMENT OF ADDITIONAL INFORMATION
JULY 29, 1998

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

Shares of the Fund are sold and redeemed at net asset value without the
imposition of a sales charge. The Fund is authorized to reimburse specific
expenses incurred in promoting the distribution of the Fund's shares, including
personal services to shareholders and maintenance of shareholder accounts, in
accordance with a Plan of Distribution pursuant to Rule 12b-1 under the
Investment Company Act of 1940. Reimbursement may in no event exceed an amount
equal to payments at the annual rate of 0.35% of the average daily net assets
of the Fund.

A Prospectus for the Fund dated July 29, 1998, which provides the basic
information you should know before investing in the Fund, may be obtained
without charge from the Fund at the address or telephone numbers listed below
or from the Fund's Distributor, Morgan Stanley Dean Witter Distributors Inc.,
or from Dean Witter Reynolds Inc., at any of its branch offices. This Statement
of Additional Information is not a Prospectus. It contains information in
addition to and more detailed than that set forth in the Prospectus. It is
intended to provide additional information regarding the activities and
operations of the Fund, and should be read in conjunction with the Prospectus.

Morgan Stanley Dean Witter
Short-Term U.S. Treasury Trust
Two World Trade Center
New York, New York 10048
(212) 392-2550 or
(800) 869-NEWS (toll-free)

<PAGE>
TABLE OF CONTENTS
- -----------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S> <C>
The Fund and Its Management.......... 3
Trustees and Officers................ 7
Investment Practices and Policies ... 13
Investment Restrictions.............. 14
Portfolio Transactions and
Brokerage........................... 15
The Distributor...................... 16
Shareholder Services ................ 19
Redemptions and Repurchases.......... 24
Dividends, Distributions and Taxes .. 24
Performance Information ............. 26
Description of Shares of the Fund .. 26
Custodian and Transfer Agent ....... 27
Independent Accountants.............. 27
Reports to Shareholders.............. 27
Legal Counsel........................ 27
Experts.............................. 28
Registration Statement .............. 28
Financial Statements--May 31, 1998 . 29
Report of Independent Accountants ... 38
</TABLE>

2
<PAGE>
THE FUND AND ITS MANAGEMENT
- -----------------------------------------------------------------------------

THE FUND

The Fund is a trust of the type commonly known as a "Massachusetts business
trust" and was organized under the laws of the Commonwealth of Massachusetts on
June 4, 1991 under the name Dean Witter Short-Term U.S. Treasury Trust. On June
22, 1998, the Trustees of the Fund adopted an Amendment to the Declaration of
Trust of the Fund changing the name of the Fund to Morgan Stanley Dean Witter
Short-Term U.S. Treasury Trust.

THE INVESTMENT MANAGER

Morgan Stanley Dean Witter Advisors Inc. (the "Investment Manager" or "MSDW
Advisors"), a Delaware corporation, whose address is Two World Trade Center,
New York, New York 10048, is the Fund's Investment Manager. MSDW Advisors is a
wholly-owned subsidiary of Morgan Stanley Dean Witter & Co. ("MSDW"), a
Delaware corporation. The daily management of the Fund and research relating to
the Fund's portfolio is conducted by or under the direction of officers of the
Fund and of the Investment Manager, subject to review by the Fund's Board of
Trustees. Information as to these Trustees and officers is contained under the
caption "Trustees and Officers."

MSDW Advisors is the investment manager or investment advisor of the
following investment companies, which are collectively referred to as the
"Morgan Stanley Dean Witter Funds":

<TABLE>
<CAPTION>
<S> <C>
OPEN-END FUNDS
1 Active Assets California Tax-Free Trust
2 Active Assets Government Securities Trust
3 Active Assets Money Trust
4 Active Assets Tax-Free Trust
5 Morgan Stanley Dean Witter American Value Fund
6 Morgan Stanley Dean Witter Balanced Growth Fund
7 Morgan Stanley Dean Witter Balanced Income Fund
8 Morgan Stanley Dean Witter California Tax-Free Daily Income Trust
9 Morgan Stanley Dean Witter California Tax-Free Income Fund
10 Morgan Stanley Dean Witter Capital Appreciation Fund
11 Morgan Stanley Dean Witter Capital Growth Securities
12 Morgan Stanley Dean Witter Competitive Edge Fund, "Best Ideas" Portfolio
13 Morgan Stanley Dean Witter Convertible Securities Trust
14 Morgan Stanley Dean Witter Developing Growth Securities Trust
15 Morgan Stanley Dean Witter Diversified Income Trust
16 Morgan Stanley Dean Witter Dividend Growth Securities Inc.
17 Morgan Stanley Dean Witter Equity Fund
18 Morgan Stanley Dean Witter European Growth Fund Inc.
19 Morgan Stanley Dean Witter Federal Securities Trust
20 Morgan Stanley Dean Witter Financial Services Trust
21 Morgan Stanley Dean Witter Fund of Funds
22 Dean Witter Global Asset Allocation Fund
23 Morgan Stanley Dean Witter Global Dividend Growth Securities
24 Morgan Stanley Dean Witter Global Short-Term Income Fund Inc.
25 Morgan Stanley Dean Witter Global Utilities Fund
26 Morgan Stanley Dean Witter Growth Fund

3
<PAGE>
27 Morgan Stanley Dean Witter Hawaii Municipal Trust
28 Morgan Stanley Dean Witter Health Sciences Trust
29 Morgan Stanley Dean Witter High Yield Securities Inc.
30 Morgan Stanley Dean Witter Income Builder Fund
31 Morgan Stanley Dean Witter Information Fund
32 Morgan Stanley Dean Witter Intermediate Income Securities
33 Morgan Stanley Dean Witter Intermediate Term U.S. Treasury Trust
34 Morgan Stanley Dean Witter International SmallCap Fund
35 Morgan Stanley Dean Witter Japan Fund
36 Morgan Stanley Dean Witter Limited Term Municipal Trust
37 Morgan Stanley Dean Witter Liquid Asset Fund Inc.
38 Morgan Stanley Dean Witter Market Leader Trust
39 Morgan Stanley Dean Witter Mid-Cap Dividend Growth Securities
40 Morgan Stanley Dean Witter Mid-Cap Growth Fund
41 Morgan Stanley Dean Witter Multi-State Municipal Series Trust
42 Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
43 Morgan Stanley Dean Witter New York Municipal Money Market Trust
44 Morgan Stanley Dean Witter New York Tax-Free Income Fund
45 Morgan Stanley Dean Witter Growth Fund Inc.
46 Morgan Stanley Dean Witter Precious Metals and Trust
47 Dean Witter Retirement Series
48 Morgan Stanley Dean Witter Dimensions Investment Series
49 Morgan Stanley Dean Witter Select Reinvestment Fund
50 Morgan Stanley Dean Witter Short-Term Bond Fund
51 Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
52 Morgan Stanley Dean Witter Special Value Fund
53 Morgan Stanley Dean Witter S&P 500 Index Fund
54 Morgan Stanley Dean Witter Strategist Fund
55 Morgan Stanley Dean Witter-Exempt Securities Trust
56 Morgan Stanley Dean Witter Tax-Free Daily Income Trust
57 Morgan Stanley Dean Witter U.S. Government Money Market Trust
58 Morgan Stanley Dean Witter U.S. Government Securities Trust
59 Morgan Stanley Dean Witter Utilities Fund
60 Morgan Stanley Dean Witter Value-Added Market Series
61 Morgan Stanley Dean Witter Variable Investment Series
62 Morgan Stanley Dean Witter World Wide Income Trust

CLOSED-END FUNDS
1 InterCapital California Insured Municipal Income Trust
2 InterCapital California Quality Municipal Securities
3 Dean Witter Government Income Trust
4 High Income Advantage Trust
5 High Income Advantage Trust II
6 High Income Advantage Trust III
7 InterCapital Income Securities Inc.
8 InterCapital Insured California Municipal Securities

4
<PAGE>
9 InterCapital Insured Municipal Bond Trust
10 InterCapital Insured Municipal Income Trust
11 InterCapital Insured Municipal Securities
12 InterCapital Insured Municipal Trust
13 Municipal Income Opportunities Trust
14 Municipal Income Opportunities Trust II
15 Municipal Income Opportunities Trust III
16 Municipal Income Trust
17 Municipal Income Trust II
18 Municipal Income Trust III
19 Municipal Premium Income Trust
20 InterCapital New York Quality Municipal Securities
21 Morgan Stanley Dean Witter Prime Income Trust
22 InterCapital Quality Municipal Income Trust
23 InterCapital Quality Municipal Investment Trust
24 InterCapital Quality Municipal Securities
</TABLE>

In addition, Morgan Stanley Dean Witter Services Company Inc. ("MSDW
Services"), a wholly-owned subsidiary of MSDW Advisors, serves as manager for
the following investment companies for which TCW Funds Management, Inc. is
the investment advisor (the "TCW/DW Funds"):

<TABLE>
<CAPTION>
<S> <C>
OPEN-END FUNDS
1 TCW/DW Emerging Markets Opportunities Trust
2 TCW/DW Global Telecom Trust
3 TCW/DW Income and Growth Fund
4 TCW/DW Latin American Growth Fund
5 TCW/DW Mid-Cap Equity Trust
6 TCW/DW North American Government Income Trust
7 TCW/DW Small Cap Growth Fund
8 TCW/DW Total Return Trust

CLOSED-END FUNDS

1 TCW/DW Term Trust 2000
2 TCW/DW Term Trust 2002
3 TCW/DW Term Trust 2003
</TABLE>

MSDW Advisors also serves as: (i) administrator of The BlackRock Strategic
Term Trust Inc., a closed-end investment company; (ii) sub-administrator of
Templeton Global Governments Income Trust, a closed-end investment company; and
(iii) investment advisor of Offshore Dividend Growth Fund and Offshore Money
Market Fund, mutual funds established under the laws of the Cayman Islands and
available only to investors who are participants in the International Active
Assets Account program and are neither citizens nor residents of the United
States.

Pursuant to an Investment Management Agreement (the "Agreement") with the
Investment Manager, the Fund has retained the Investment Manager to manage the
investment of the Fund's assets, including the placing of orders for the
purchase and sale of portfolio securities. The Investment Manager obtains and
evaluates such information and advice relating to the economy, securities
markets and specific securities as it considers necessary or useful to
continuously manage the assets of the Fund in a manner consistent with its
investment objective.

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, such

5
<PAGE>

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. The Investment Manager
has retained MSDW Services to provide its administrative services under the
Agreement.

Expenses not expressly assumed by the Investment Manager under the Agreement
or by Morgan Stanley Dean Witter Distributors Inc. ("MSDW Distributors" or the
"Distributor"), the Distributor of the Fund's shares (see "The Distributor"),
will be paid by the Fund. Such expenses include, but are not limited to: fees
pursuant to the Fund's Plan of Distribution; 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 and Statements of Additional Information of the Fund and
supplements thereto to the Fund's shareholders; all expenses of shareholders'
and Trustees' meetings and of preparing, printing and mailing of proxy
statements and reports to shareholders; fees and travel expenses of Trustees 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 Trustees 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) and independent accountants; membership dues of industry associations;
interest on Fund borrowings; postage; insurance premiums on property or
personnel (including officers and Trustees) 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.

As full compensation for the services and facilities furnished to the Fund
and expenses of the Fund assumed by the Investment Manager, the Fund pays the
Investment Manager monthly compensation calculated daily by applying the annual
rate of 0.35% to the net assets of the Fund, determined as of the close of each
business day. For the fiscal years ended May 31, 1996, May 31, 1997 and 1998,
the Fund accrued to the Investment Manager total compensation under the
Agreement in the amounts of $970,394, $902,158 and $841,955, respectively.

The 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. The Agreement in no way restricts the Investment
Manager from acting as investment manager or adviser to others.

The Investment Manager paid the organizational expenses of the Fund in the
amount of approximately $135,000 incurred prior to the offering of the Fund's
shares. The Fund has reimbursed the Investment Manager for such expenses.

The Agreement was initially approved by the Trustees on February 21, 1997
and by the shareholders of the Fund at a Special Meeting of Shareholders held
on May 21, 1997. The Agreement is substantially identical to a prior investment
management agreement which was initially approved by the Trustees on October
30, 1992 and by the shareholders of the Fund at a Special Meeting of
Shareholders held on January 12, 1993. The Agreement took effect on May 31,
1997 upon the consummation of the merger of Dean Witter, Discover & Co. with
Morgan Stanely Group Inc. The Agreement may be terminated at any time, without
penalty, on thirty days' notice by the Board of Trustees

6
<PAGE>
of the Fund, by the holders of a majority, as defined in the Investment Company
Act of 1940 (the "Act"), of the outstanding shares of the Fund, or by the
Investment Manager. The Agreement will automatically terminate in the event of
its assignment (as defined in the Act).

Under its terms, the Agreement has an initial term ending April 30, 1999 and
will continue from year to year thereafter, provided such continuance of the
Agreement is approved at least annually by the vote of the holders of a
majority, as defined in the Act, of the outstanding shares of the Fund, or by
the Board of Trustees of the Fund; provided that in either event such
continuance is approved annually by the vote of a majority of the Trustees of
the Fund who are not parties to the Agreement or "interested persons" (as
defined in the Act) of any such party (the "Independent Trustees"), which vote
must be cast in person at a meeting called for the purpose of voting on such
approval.

The Fund has acknowledged that the name "Morgan Stanley Dean Witter" is a
property right of DWR. The Fund has agreed that MSDW, or any corporate
affiliate of MSDW, may use or, at any time, permit others to use, the name
"Morgan Stanley Dean Witter." The Fund has also agreed that in the event the
investment management contract between MSDW Advisors and the Fund is
terminated, or if the affiliation between MSDW Advisors and its parent is
terminated, the Fund will eliminate the name "Morgan Stanley Dean Witter" from
its name if MSDW, or any corporate affiliate of MSDW, shall so request.

TRUSTEES AND OFFICERS
- -----------------------------------------------------------------------------

The Trustees and Executive Officers of the Fund, their principal business
occupations during the last five years and their affiliations, if any, with the
86 Morgan Stanley Dean Witter Funds and the 11 TCW/DW Funds are shown below:

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- -------------------------------------------- --------------------------------------------------------
<S> <C>
Michael Bozic (57) Chairman and Chief Executive Officer of Levitz Furniture
Trustee Corporation (since November, 1995); Director or Trustee of
c/o Levitz Furniture Corporation the Morgan Stanley Dean Witter Funds; formerly President and
7887 N. Federal Highway Chief Executive Officer of Hills Department Stores (May,
Boca Raton, Florida 1991-July, 1995); formerly variously Chairman and Chief
Executive Officer, President and Chief Operating Officer
(1987-1991) of the Sears Merchandise Group of Sears, Roebuck
and Co.; Director of Eaglemark Financial Services, Inc., the
and Weirton Steel Corporation.

Charles A. Fiumefreddo* (65) Chairman, Director or Trustee, President and Chief Executive
Chairman, President, Officer of the Morgan Stanley Dean Witter Funds; Chairman,
Chief Executive Officer Chief Executive Officer and Trustee of the TCW/DW Funds; formerly
and Trustee Chairman, Chief Executive Officer and Director of MSDW Advisors,
Two World Trade Center MSDW Distributors and MSDW Services, Executive Vice President
New York, New York and Director of Dean Witter Reynolds Inc. ("DWR"), Chairman
and Director of Morgan Stanley Trust FSB ("MSDW Trust"), and
Director and/or officer of various MSDW subsidiaries (until
June, 1998).

7
<PAGE>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- -------------------------------------------- --------------------------------------------------------
Edwin J. Garn (65) Director or Trustee of the Morgan Stanley Dean Witter Funds;
Trustee formerly United States Senator (R-Utah)(1974-1992) and
c/o Huntsman Corporation Chairman, Senate Banking Committee (1980-1986); formerly Mayor 500
Huntsman Way of Salt Lake City, Utah (1971-1974); formerly Astronaut, Space
Salt Lake City, Utah Shuttle Discovery (April 12-19, 1985); Vice Chairman, Corporation (since January,
1993); Director of Franklin Covey (time management systems), John
Alden Financial Corp. (health insurance), United States
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.

John R. Haire (73) Chairman of the Audit Committee and Director or Trustee of
Trustee each of the Morgan Stanley Dean Witter Funds; Chairman of
Two World Trade Center the Audit Committee and Trustee of the TCW/DW Funds; formerly
New York, New York Chairman of the Independent Directors or Trustees of the Morgan
Stanley Dean Witter Funds and the TCW/DW Funds (until June, 1998);
formerly President, Council for Aid to Education (1978-1989), and
Chairman and Chief Executive Officer of Anchor Corporation, an
Investment Adviser (1964-1978).

Wayne E. Hedien (64) Retired; Director or Trustee of the Morgan Stanley Dean Witter
Trustee Funds, Director of the PMI Group, Inc. (private mortgage
c/o Gordon Altman Butowsky insurance); Trustee and Vice Chairman of The Field Museum
Weitzen Shalov & Wein of Natural History; formerly associated with the Allstate
Counsel to the Independent Trustees Companies (1966-1994), most as Chairman of The Allstate
114 West 47th Street Corporation (March, -December, 1994) and Chairman and
New York, New York Chief Executive of its wholly-owned subsidiary,
Allstate Insurance Company (July, 1989-December, 1994); director of
various other business and haritable organizations.

Dr. Manuel H. Johnson (49) Senior Partner, Johnson Smick International, Inc., a consulting
Trustee firm; Co-Chairman and a founder of the Group of Seven Council
c/o Johnson Smick International, Inc. (G7C), an international economic commission; Director or
1133 Connecticut Avenue, N.W. Trustee of the Morgan Stanley Dean Witter Funds; Trustee of
Washington, D.C. the TCW/DW Funds; Director of NASDAQ (since June, 1995); Director
of Greenwich Capital Markets Inc. (broker-dealer); and NVR,
Inc. (home construction); Chairman and Trustee of the Financial
Accounting Foundation (oversight organization for 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
(1982-1986).

8
<PAGE>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- -------------------------------------------- --------------------------------------------------------
Michael E. Nugent (62) General Partner, Triumph Capital, L.P., a private partnership;
Trustee Director or Trustee of the Morgan Stanley Dean Witter Funds;
c/o Triumph Capital, L.P. Trustee of the TCW/DW Funds; formerly Vice President, Bankers
237 Park Avenue Trust Company and BT Capital Corporation (1984-1988); director
New York, New York of various business organizations.

Philip J. Purcell* (54) Chairman of the Board of Directors and Chief Executive Officer
Trustee of MSDW, DWR and Novus Credit Services Inc.; Director of MSDW
1585 Broadway Distributors; Director or Trustee of the Morgan Stanley Dean
New York, New York Witter Funds; Director and/or officer of various MSDW
subsidiaries.

John L. Schroeder (67) Retired; Director or Trustee of the Morgan Stanley Dean Witter
Trustee Funds; Trustee of the TCW/DW Funds; Director of Citizens
c/o Gordon Altman Butowsky Utilities Company; formerly Executive Vice President and Chief
Weitzen Shalov & Wein Investment Officer of the Home Insurance Company (August,
Counsel to the Independent Trustees 1991-September, 1995).
114 West 47th Street
New York, New York

Barry Fink (43) Senior Vice President (since March, 1997) and Secretary and
Vice President, General Counsel (since February, 1997) and Director (since
Secretary and General Counsel July, 1998) of MSDW Advisors and MSDW Services; Senior Vice
Two World Trade Center President (since March, 1997) and Assistant Secretary and
New York, New York Assistant General Counsel (since February, 1997) of MSDW
Distributors; Assistant Secretary of DWR (since August, 1996); Vice
President, Secretary and General Counsel of the Morgan Stanley
Dean Witter Funds and the TCW/DW Fnds (since February, 1997);
previously First Vice President (June, 1993-February, 1997), Vice
President (until June, 1993) and Assistant Secretary and Assistant
General Counsel of MSDW Advisors and MSDW Services and Assistant
Secretary of the Morgan Stanley Dean Witter Funds and TCW/DW
Funds.

Rajesh K. Gupta (38) Senior Vice President of MSDW Advisors; Vice President of
Vice President various Morgan Stanley Dean Witter Funds.
Two World Trade Center
New York, New York

Thomas F. Caloia (52) First Vice President and Assistant Treasurer of MSDW Advisors
Treasurer and MSDW Services; Treasurer of the Morgan Stanley Dean Witter
Two World Trade Center Funds and the TCW/DW Funds.
New York, New York
</TABLE>

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

9
<PAGE>

In addition, Mitchell M. Merin, President, Chief Executive Officer and
Director of MSDW Advisors and MSDW Services, Chairman and Director of MSDW
Distributors and MSDW Trust, Executive Vice President and Director of DWR, and
Director of SPS Transaction Services, Inc. and various other MSDW subsidiaries,
Robert M. Scanlan, President, Chief Operating Officer and Director of MSDW
Advisors and MSDW Services, Executive Vice President of MSDW Distributors and
MSDW Trust and Director of MSDW Trust, Robert S. Giambrone, Senior Vice
President of MSDW Advisors, MSDW Services, MSDW Distributors and MSDW Trust and
Director of MSDW Trust, Joseph J. McAlinden, Executive Vice President and Chief
Investment Officer of MSDW Advisors and Director of MSDW Trust, and Peter M.
Avelar, James F. Willison and Jonathan R. Page, Senior Vice Presidents of MSDW
Advisors, are Vice Presidents of the Fund, and Marilyn K. Cranney and Carsten
Otto, First Vice Presidents and Assistant General Counsels of MSDW Advisors and
MSDW Services, Frank Bruttomesso, LouAnne D. McInnis and Ruth Rossi, Vice
Presidents and Assistant General Counsels of MSDW Advisors and MSDW Services,
and Todd Lebo, a staff attorney with MSDW Advisors, are Assistant Secretaries
of the Fund.

THE BOARD OF TRUSTEES, THE INDEPENDENT TRUSTEES, AND THE COMMITTEES

The Board of Trustees consists of nine (9) trustees. These same individuals
also serve as directors or trustees for all of the Morgan Stanley Dean Witter
Funds, and are referred to in this section as Trustees. As of the date of this
Statement of Additional Information, there are a total of 86 Morgan Stanley
Dean Witter Funds, comprised of 132 portfolios. As of June 30, 1998, the Morgan
Stanley Dean Witter Funds had total net assets of approximately $106 billion
and more than six million shareholders.

Seven Trustees (77% of the total number) have no affiliation or business
connection with MSDW Advisors or any of its affiliated persons and do not own
any stock or other securities issued by MSDW Advisors' parent company, MSDW.
These are the "disinterested" or "independent" Trustees. Four of the seven
independent Trustees are also Independent Trustees of the TCW/DW Funds.

Law and regulation establish both general guidelines and specific duties for
the Independent Trustees. The Morgan Stanley Dean Witter Funds seek as
Independent 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. Indeed, by serving on the Funds' Boards, certain Trustees who would
otherwise be qualified and in demand to serve on bank boards would be
prohibited by law from doing so.

All of the Independent Trustees serve as members of the Audit Committee.
Three of them also serve as members of the Derivatives Committee. During the
calendar year ended December 31, 1997, the Audit Committee, the Derivatives
Committee and the Independent Trustees held a combined total of seventeen
meetings.

The Independent 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 Trustees are required to select and nominate individuals to fill
any Independent 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 such a
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 such services; and 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.

10
<PAGE>

Finally, the Board of each Fund has formed 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.

ADVANTAGES OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR ALL MORGAN
STANLEY DEAN WITTER FUNDS

The Independent Trustees and the Funds' management believe that having the
same Independent 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 Trustees for each of the Funds or even of
sub-groups of Funds. They believe that having the same individuals serve as
Independent 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 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 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 Trustees of the caliber, experience
and business acumen of the individuals who serve as Independent Trustees of the
Morgan Stanley Dean Witter Funds.

COMPENSATION OF INDEPENDENT TRUSTEES

The Fund pays each Independent Trustee an annual fee of $800 plus a per
meeting fee of $50 for meetings of the Board of Trustees, the Independent
Trustees or Committees of the Board of Trustees attended by the Trustee (the
Fund pays the Chairman of the Audit Committee an additional annual fee of
$750). If a Board meeting and a meeting of the Independent Trustees or a
Committee meeting, or a meeting of the Independent Trustees and/or more than
one Committee meeting, take place on a single day, the Trustees are paid a
single meeting fee by the Fund. The Fund also reimburses such Trustees for
travel and other out-of-pocket expenses incurred by them in connection with
attending such meetings. Trustees 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 Trustee. Mr. Haire currently
serves as Chairman of the Audit Committee. Prior to June 1, 1998, Mr. Haire
also served as Chairman of the Independent Trustees, for which services the
Fund paid him an additional annual fee of $1,200.

The following table illustrates the compensation paid to the Fund's
Independent Trustees by the Fund for the fiscal year ended May 31, 1998.

FUND COMPENSATION

<TABLE>
<CAPTION>
AGGREGATE
NAME OF INDEPENDENT COMPENSATION
TRUSTEE FROM THE FUND
- -------------------------- ---------------
<S> <C>
Michael Bozic ............. $1,650
Edwin J. Garn ............. $1,800
John R. Haire ............. $3,650
Wayne E. Hedien ........... $1,332
Dr. Manuel H. Johnson .... $1,750
Michael E. Nugent ......... $1,800
John L. Schroeder.......... $1,800
</TABLE>

The following table illustrates the compensation paid to the Fund's
Independent Trustees for the calendar year ended December 31, 1997 for services
to the 84 Morgan Stanley Dean Witter Funds and, in the case of Messrs. Haire,
Johnson, Nugent and Schroeder, the 14 TCW/DW Funds that were in operation at
December 31, 1997. Mr. Haire serves as Chairman of the Audit Committee of each
Morgan Stanley Dean Witter Fund and each TCW/DW Fund and, prior to June 1,
1998, also served as Chairman of the Independent Directors or Trustees of those
Funds. With respect to Messrs. Haire, Johnson,

11
<PAGE>

Nugent and Schroeder, the TCW/DW Funds are included solely because of a limited
exchange privilege between those Funds and five Morgan Stanley Dean Witter
Money Market Funds. Mr. Hedien's term as Director or Trustee of each Morgan
Stanley Dean Witter Fund commenced on September 1, 1997.

CASH COMPENSATION FROM MORGAN STANLEY DEAN WITTER FUNDS AND TCW/DW FUNDS

<TABLE>
<CAPTION>
FOR SERVICE AS
CHAIRMAN OF
FOR SERVICE INDEPENDENT FOR SERVICE AS TOTAL CASH
AS DIRECTOR OR DIRECTORS/ CHAIRMAN OF COMPENSATION
TRUSTEE AND FOR SERVICE AS TRUSTEES AND INDEPENDENT FOR SERVICES TO
COMMITTEE TRUSTEE AND AUDIT TRUSTEES 84 MORGAN STANLEY
MEMBER OF 84 COMMITTEE COMMITTEES OF 84 AND AUDIT DEAN WITTER
NAME OF MORGAN STANLEY MEMBER OF 14 MORGAN STANLEY COMMITTEES OF 14 FUNDS AND 14
INDEPENDENT TRUSTEE DEAN WITTER FUNDS TCW/DW FUNDS DEAN WITTER FUNDS TCW/DW FUNDS TCW/DW FUNDS
- --------------------- ----------------- -------------- ----------------- ---------------- -----------------
<S> <C> <C> <C> <C> <C>
Michael Bozic ........ $133,602 -- -- -- $133,602
Edwin J. Garn ........ 149,702 -- -- -- 149,702
John R. Haire ........ 149,702 $73,725 $157,463 $25,350 406,240
Wayne E. Hedien ...... 39,010 -- -- -- 39,010
Dr. Manuel H. Johnson 145,702 71,125 -- -- 216,827
Michael E. Nugent ... 149,702 73,725 -- -- 223,427
John L. Schroeder .... 149,702 73,725 -- -- 223,427
</TABLE>

As of the date of this Statement of Additional Information, 57 of the Morgan
Stanley Dean Witter Funds, including the Fund, have adopted a retirement
program under which an Independent 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 or 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 Trustee referred to as an "Eligible 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 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 29.41% of his or her Eligible Compensation plus
0.4901667% of such Eligible Compensation for each full month of service as an
Independent Director or Trustee of any Adopting Fund in excess of five years up
to a maximum of 58.82% 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 Trustee for service to the Adopting
Fund in the five year period prior to the date of the Eligible 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 Trustees by the Fund for the fiscal year ended May 31, 1998
and by the 57 Morgan Stanley Dean Witter Funds (including the Fund) for the
year ended December 31, 1997, and the estimated retirement benefits for the
Fund's Independent Trustees, to commence upon their retirement, from the Fund
as of May 31, 1997 and from the 57 Morgan Stanley Dean Witter Funds as of
December 31, 1997.

(1) An Eligible Trustee may elect alternate payments of his her retirement
benefits based upon the combined life expectancy of such Eligible Trustee
and his or her spouse on the date of such Eligible Trustee's retirement.
The amount estimated to be payable under this method, through the remainder
of the later of the lives of such Eligible Trustee and spouse, will be the
actuarial equivalent of the Regular Benefit. In addition, the Eligible
Trustee may elect that the surviving spouse's periodic payment of benefits
will be equal to either 50% or 100% of the previous periodic amount, an
election that, respectively, increases or decreases the previous periodic
amount so that the resulting payments will be the actuarial equivalent of
the Regular Benefit.

12
<PAGE>
RETIREMENT BENEFITS FROM THE FUND AND ALL MORGAN STANLEY DEAN WITTER FUNDS

ESTIMATED ANNUAL
RETIREMENT BENEFITS BENEFITS
FOR ALL ADOPTING FUNDS ACCRUED AS EXPENSES UPON RETIREMENT(2)
-------------------------------- ----------------------- --------------------
ESTIMATED
CREDITED
YEARS ESTIMATED
OF SERVICE AT PERCENTAGE OF BY ALL FROM FROM ALL
NAME OF INDEPENDENT RETIREMENT ELIGIBLE BY THE ADOPTING THE ADOPTING
TRUSTEE (MAXIMUM 10) COMPENSATION FUND FUNDS FUND FUNDS
- -------------------------- --------------- --------------- -------- ------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Michael Bozic ............. 10 58.82% $ 391 $ 20,499 $1,029 $ 55,026
Edwin J. Garn ............. 10 58.82 $ 662 30,878 $1,029 55,026
John R. Haire ............. 10 58.82 $(111) (19,823)(3) $2,418 132,002
Wayne E. Hedien............ 9 50.00 $ 327 0 $ 875 46,772
Dr. Manuel H. Johnson .... 10 58.82 $ 262 12,832 $1,029 55,026
Michael E. Nugent ......... 10 58.82 $ 496 22,546 $1,029 55,026
John L. Schroeder.......... 8 49.02 $ 769 39,350 $ 861 46,123
</TABLE>

(2) Based on current levels of compensation. Amount of annual benefits also
varies depending on the Trustee's elections described in Footnote (1)
above.
(3) This number reflects the effect of the extension of Mr. Haire's term as
Director or Trustee until May 1, 1999.

As of the date of this Statement of Additional Information, the aggregate
number of shares of beneficial interest of the Fund owned by the Fund's
officers and Trustees as a group was less than 1 percent of the Fund's shares
of beneficial interest outstanding.

INVESTMENT PRACTICES AND POLICIES
- -----------------------------------------------------------------------------

As stated in the Prospectus, the Fund will invest all of its assets in U.S.
Treasury securities backed by the full faith and credit of the U.S.
Government.

U.S. Treasury securities presently consist of U.S. Treasury bills
(maturities of one year or less), U.S. Treasury notes (maturities of one to ten
years) and U.S. Treasury bonds (generally maturities of greater than ten
years), all of which are direct obligations of the U.S. Government and, as
such, are backed by the "full faith and credit" of the United States.

13
<PAGE>
In the last few years a number of banks and brokerage firms have separated
("stripped") the principal portions ("corpus") from the coupon portions of the
U.S. Treasury bonds and notes and sold them separately in the form of receipts
or certificates representing undivided interests in these instruments (which
instruments are generally held by a bank in a custodial or trust account). The
Fund will not purchase any such receipts or certificates representing stripped
corpus interests in U.S. Treasury securities sold by banks and brokerage firms.
The Fund will only purchase zero coupon Treasury Securities which have been
stripped by the Federal Reserve Bank.

When-Issued and Delayed Delivery Securities and Firm Commitments. From time
to time, in the ordinary course of business, the Fund may purchase U.S.
Treasury securities on a when-issued or delayed delivery basis or may purchase
or sell U.S. Treasury securities on a firm commitment basis. For example, the
Fund may wish to purchase U.S. Treasury notes and bonds sold at periodic U.S.
Treasury auctions prior to their issuance ("when-issued"). When such
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 the
commitment. While the Fund will only purchase securities on a when-issued,
delayed delivery or firm 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 accrues to the purchaser during this period. At the
time the Fund makes the commitment to purchase or sell securities on a
when-issued, delayed delivery or firm 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. The Fund will also establish a
segregated account with its custodian bank in which it will continually
maintain cash or cash equivalents or other portfolio (U.S. Treasury) securities
equal in value to commitments to purchase securities on a when-issued, delayed
delivery or firm commitment basis.

INVESTMENT RESTRICTIONS
- -----------------------------------------------------------------------------

The Fund has adopted certain investment restrictions as fundamental policies
which cannot be changed without the approval of the holders of a "majority" of
the outstanding shares of the Fund, as defined in the Act. Majority is defined
in the Act as the lesser of (a) 67% or more of the shares present at a meeting
of shareholders, if the holders of more than 50% of the outstanding shares of
the Fund are present or represented by proxy, or (b) more than 50% of the
outstanding shares.

These restrictions provide that the Fund may not:

1. 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. Purchase common stocks, preferred stocks, warrants, other equity
securities, corporate bonds, municipal bonds or industrial revenue bonds;

3. Borrow money, except from banks for temporary or emergency purposes,
including the meeting of redemption requests which might otherwise require
the untimely disposition of securities. Borrowing in the aggregate may not
exceed 20%, and borrowing for purposes other than meeting redemptions may
not exceed 5% of the value of the Fund's total assets (including the amount
borrowed), less liabilities (not including the amount borrowed) at the time
the borrowing is made. Borrowings in excess of 5% will be repaid before
additional investments are made;

4. Pledge, hypothecate, mortgage or otherwise encumber its assets, except
in an amount up to 10% of the value of its net assets, but only to secure
borrowings for temporary or emergency purposes;

5. Sell securities short or purchase securities on margin;

6. Write or purchase put or call options;

7. Underwrite the securities of other issuers or purchase restricted
securities;

14
<PAGE>
8. Purchase or sell real estate, real estate investment trust securities,
commodities or commodity contracts or oil and gas interests;

9. Make loans to others except through the purchase of qualified debt
obligations in accordance with the Fund's investment objectives and
policies;

10. Issue senior securities as defined in the Act except insofar as the
Fund may be deemed to have issued a senior security by reason of: (a)
borrowing money in accordance with restrictions described above or (b) by
purchasing securities on a when-issued or delayed delivery basis or
purchasing or selling securities on a forward commitment basis;

11. Invest in securities of other investment companies, except as they may
be acquired as part of a merger, consolidation, acquisition of assets or
plan of reorganization.

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.

If a percentage restriction is adhered to at the time of an 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 constitute a
violation of any of the foregoing restrictions.

PORTFOLIO TRANSACTIONS AND BROKERAGE
- -----------------------------------------------------------------------------

Subject to the general supervision of the Board of Trustees, the Investment
Manager is 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 portfolio
securities are normally transacted through issuers, underwriters or major
dealers in U.S. Government securities acting as principals. Such transactions
are made on a net basis and do not involve payment of brokerage commissions.
The cost of securities purchased from an underwriter usually includes a
commission paid by the issuer to the underwriters; transactions with dealers
normally reflect the spread between bid and asked prices. During the fiscal
years ended May 31, 1996, May 31, 1997 and May 31, 1998, the Fund did not pay
any brokerage commissions.

The Investment Manager currently serves as investment manager or advisor to
a number of clients, including other investment companies, and may in the
future act as investment manager or adviser to others. It is the practice of
the Investment Manager to cause purchase and sale transactions to be allocated
among the Fund and others whose assets it manages in such a 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 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.

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. In seeking to
implement the Fund's policies, the Investment Manager effects transactions with
those brokers and dealers who the Investment Manager believes provide the most
favorable prices and are capable of providing efficient executions. If the
Investment Manager believes such 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. Such 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.

15
<PAGE>

During the fiscal year ended May 31, 1998, the Fund paid no brokerage
commissions in connection with transactions to brokers because of research
services provided.

The information and services received by the Investment Manager from brokers
and dealers may be of benefit to the Investment Manager in the management of
accounts of some of its other clients and may not in all cases benefit the Fund
directly. While the receipt of such information and services is useful in
varying degrees and would generally reduce the amount of research or services
otherwise performed by the Investment Manager and thereby reduce its expenses,
it is of indeterminable value and the management fee paid to the Investment
Manager is not reduced by any amount that may be attributable to the value of
such services.

Pursuant to an order of the Securities and Exchange Commission, the Fund may
effect principal transactions in certain money market instruments with DWR. The
Fund will limit its transactions with DWR to U.S. Treasury securities. Such
transactions will be effected with DWR only when the price available from DWR
is better than that available from other dealers.

Consistent with the policy described above, brokerage transactions in
securities listed on exchanges or admitted to unlisted trading privileges may
be effected through DWR, Morgan Stanley & Co. Incorporated ("MS & Co.") and
other brokers and dealers that are affiliates of the Investment Manager. In
order for an affiliated broker or dealer to effect any portfolio transactions
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 Trustees of the Fund,
including a majority of the Trustees who are not "interested" Trustees, 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. During the fiscal years ended May
31, 1996, May 31, 1997 and May 31, 1998, the Fund did not pay any brokerage
commissions to DWR.

Portfolio turnover rate is defined as the lesser of the value of the
securities purchased or securities sold, excluding all securities whose
maturities at time of acquisition were one year or less, divided by the average
monthly value of such securities owned during the year. However, because of the
short-term nature of the Fund's portfolio securities, it is anticipated that
the number of purchases and sales or maturities of such securities will be
substantial. Nevertheless, as brokerage commissions are not normally charged on
purchases and sales of such securities, the large number of these transactions
does not have an adverse effect upon the net yield and net asset value of the
shares of the Fund. For the fiscal years ended May 31, 1996, 1997 and 1998, the
Fund's portfolio turnover rates were 63%, 149%, and 95% respectively.

THE DISTRIBUTOR
- -----------------------------------------------------------------------------

As discussed in the Prospectus, shares of the Fund are distributed by Morgan
Stanley Dean Witter Distributors Inc. (the "Distributor") and are offered for
sale to the public on a continuous basis at an offering price equal to the net
asset value per share next determined following a receipt of an order. The
Distributor has entered into a Selected Dealer Agreement with DWR, which
through its own sales organization sells shares of the Fund, and may enter into
selected dealer agreements with other selected broker-dealers. The Distributor,
a Delaware corporation, is a wholly-owned subsidiary of MSDW. As part of an
internal reorganization that took place in December, 1992, the Distributor
assumed the investment company share distribution activities previously
performed by DWR. The current Distribution Agreement appointing the Distributor
exclusive distributor of the Fund's shares and providing for the Distributor to
bear distribution expenses not borne by the Fund was approved by the Board of
Trustees, including all of the Independent Trustees, on April 24, 1997. By its
terms, the current Distribution Agreement had an initial term ending April 30,
1998, and will remain in effect from year to year thereafter if approved by the
Trustees. The current Distribution Agreement took effect on May 31, 1997 upon
the consummation of the

16
<PAGE>
merger of Dean Witter, Discover & Co. with Morgan Stanley Group Inc. and is
substantially identical to the Fund's prior Distribution Agreement except for
its dates of effectiveness and termination.

The Distributor has agreed to pay certain expenses of the offering of the
Fund's shares, including 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 will bear the costs of initial typesetting, printing
and distribution to shareholders. The Fund and the Distributor have agreed to
indemnify each other against certain liabilities, including liabilities under
the Securities Act of 1933, as amended.

PLAN OF DISTRIBUTION

As discussed in the Prospectus, the Fund has entered into a Plan of
Distribution pursuant to Rule 12b-1 under the Act with the Distributor whereby
the expenses of certain activities in connection with the distribution of
shares of the Fund are reimbursed. The Plan was initially approved by the
Trustees of the Fund on July 18, 1991, by DWR, the then sole shareholder of the
Fund on July 19, 1991, and by the Fund's shareholders at a Special Meeting of
Shareholders on October 14, 1992. The vote of the Trustees included a majority
of the Trustees who are not and were not at the time of their votes interested
persons of the Fund and who have and had at the time of their votes no direct
or indirect financial interest in the operation of the Plan (the "Independent
Trustees"), cast in person at a meeting called for the purpose of voting on
such Plan. In determining to approve the Plan, the Trustees, including the
Independent Trustees, concluded that, in their judgment, there is a reasonable
likelihood that the Plan will benefit the Fund and its shareholders.

The Plan provides that the Distributor will bear the expense of all
promotional and distribution related activities on behalf of the Fund,
including personal services to shareholders and maintenance of shareholder
accounts, except for expenses that the Trustees determine to reimburse, as
described below. The Distributor, DWR, its affiliates and any other selected
broker-dealer may be reimbursed for the following expenses and services under
the Plan: (1) compensation to and expenses of account executives and other
employees of DWR, its affiliates and other selected broker-dealers, including
overhead and telephone expenses; (2) sales incentives and bonuses to sales
representatives and to marketing personnel in connection with promoting sales
of the Fund's shares; (3) expenses incurred in connection with promoting sales
of the Fund's shares; (4) preparing and distributing sales literature; and (5)
providing advertising and promotional activities, including direct mail
solicitation and television, radio, newspaper, magazine and other media
advertisements.

The Fund is authorized to reimburse specific expenses incurred or to be
incurred in promoting the distribution of the Fund's shares and in servicing
shareholder accounts. Reimbursement is 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 0.35 of 1% of the Fund's average daily
net assets during the month. No interest or other financing charges, if any,
incurred on any distribution expenses will be reimbursable under the Plan. In
the case of all expenses other than expenses representing a residual to account
executives, such amounts shall be determined at the beginning of each calendar
quarter by the Trustees, including a majority of the Independent 12b-1
Trustees. Expenses representing a residual to account executives 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 expended by the
Fund, the Distributor will provide and the Trustees 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 Trustees 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 shares.

The Distributor has informed the Fund that a portion of the fees payable by
the Fund each year pursuant to the Plan equal to 0.25% of the Fund's average
daily net assets is characterized as a "service fee" under the Rules of the
Association of the National Association of Securities Dealers (of which the

17
<PAGE>
Distributor is a member). Such portion of the fee is a payment made for
personal service and/or maintenance of shareholder accounts. The remaining
portion of the Plan fees payable by the Fund is characterized as an
"asset-based sales charge" as defined by the aforementioned Rules of the
Association.

At their meeting held on October 30, 1992, the Trustees of the Fund,
including all of the Independent 12b-1 Trustees, approved certain amendments to
the Plan which took effect in January, 1993 and were designed to reflect the
fact that upon an internal reorganization, the share distribution and
shareholder service activities theretofore performed for the Fund by DWR were
assumed by the Distributor and DWR's sales activities are now being performed
pursuant to the terms of a selected dealer agreement between the Distributor
and DWR. The amendments provide that payments under the Plan will be made to
the Distributor rather than to DWR as before the amendment, and that the
Distributor in turn is authorized to make payments to DWR, its affiliates or
other selected broker-dealers (or direct that the Fund pay such entities
directly). The Distributor is also authorized to retain part of such fee as
compensation for its own distribution-related expenses, including personal
services to shareholders and maintenance of shareholder accounts. At their
meeting held on April 28, 1993, the Trustees of the Fund, including all of the
Independent 12b-1 Trustees, approved certain technical amendments to the Plan
in connection with recent amendments adopted by the National Association of
Securities Dealers, Inc. to its Rules of the Association. At their meeting held
on July 23, 1997, the Trustees of the Fund, including all of the Independent
12b-1 Trustees, approved amendments to the Plan to change the provisions
regarding quarterly budgets.

DWR's Financial Advisors are credited with an annual residual commission,
currently a residual of up to 0.35% of the current value of the respective
accounts for which they are the Financial Advisors of record. The residual is a
charge which reflects residual commissions paid by DWR to its Financial
Advisors and expenses of DWR associated with the sale and promotion of Fund
shares and the servicing of shareholders' accounts, including the expenses of
operating branch offices in connection with the servicing of shareholders'
accounts, which expenses include lease costs, the salaries and employee
benefits of operations and sales support personnel, utility costs,
communications costs and the costs of stationery and supplies and other
expenses relating to branch office servicing of shareholder accounts. The
portion of the annual residual commission allocated to servicing of
shareholders' accounts does not exceed 0.25% of the average annual net asset
value of shares sold by the Financial Advisor.

Under the Plan, 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.

The Fund accrued $827,872 to DWR and the Distributor pursuant to the Plan
for the fiscal year ended May 31, 1998, amounting to an annual rate of 0.35 of
1% of the Fund's average daily net assets for the fiscal year. Based upon the
total amounts spent by the Distributor during the period, it is estimated that
the amount paid by the Fund to the Distributor for distribution was spent in
approximately the following ways: (i) advertising--$-0-; (ii) printing and
mailing prospectuses to other than current shareholders--$-0-; (iii)
compensation to underwriters--$-0-; (iv) compensation to dealers--$-0-; (v)
compensation to sales personnel--$-0-; and (vi) other, which includes payments
to DWR for expenses substantially all of which relate to compensation of sales
personnel (including compensation for servicing shareholder accounts) and
associated overhead expenses--$827,872.

The Plan had an initial term ending April 30, 1993 and provides that it will
continue from year to year thereafter, provided such continuance is approved
annually by a vote of the Trustees, including a majority of the Independent
12b-1 Trustees. The most recent continuance of the Plan for one year, until
April 30, 1999, was approved by the Board of Trustees, including a majority of
the Independent 12b-1 Trustees, at their meeting held on April 30, 1998. Any
amendment to increase materially the maximum amount authorized to be spent
under the Plan must be approved by the shareholders of the Fund, and all
material amendments to the Plan must be approved by the Trustees 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

18
<PAGE>

Independent Trustees or by a vote of the holders of a majority of the
outstanding voting securities of the Trust (as defined in the 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 selection or nomination of the Independent Trustees is
committed to the discretion of the Independent 12b-1 Trustees.

Under the Plan the Distributor provides the Fund, for review by the
Trustees, and the Trustees review, promptly after the end of each calendar
quarter, a written report regarding the distribution expenses incurred on
behalf of the Fund during such calendar quarter, which report includes (1) an
itemization of the types of expenses and the purposes therefor; (2) the amounts
of such expenses; and (3) a description of the benefits derived by the Fund. In
the Trustees' quarterly review of the Plan they consider its continued
appropriateness and the level of compensation provided therein.

No interested person of the Fund nor any Trustee of the Fund who is not an
interested person of the Fund, as defined in the Act, has any direct or
indirect financial interest in the operation of the Plan except to the extent
that the Distributor, MSDW Advisors, MSDW Services, DWR or certain of its
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.

DETERMINATION OF NET ASSET VALUE

As discussed in the Prospectus, the net asset value per share of the Fund is
determined at 4:00 p.m., New York time, on each day 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), by taking the value of all the assets of the Fund,
subtracting all liabilities, dividing by the number of shares outstanding and
adjusting the result to the nearest cent. The New York Stock Exchange currently
observes the following holidays: New Year's Day, Reverend Dr. Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day.

SHAREHOLDER SERVICES
- -----------------------------------------------------------------------------

Shareholder Investment Account. Upon purchase of shares of the Fund, a
Shareholder Investment Account is opened for the investor on the books of the
Fund, maintained by Morgan Stanley Dean Witter Trust FSB (the "Transfer
Agent"), in full and fractional shares of the Fund (rounded to the nearest
1/100 of a share). This is an open account in which shares owned by the
investor are credited by the Transfer Agent in lieu of issuance of a share
certificate. If a share certificate is desired, it must be requested in writing
for each transaction. Certificates are issued only for full shares and may be
redeposited in the account at any time. There is no charge to the investor for
issuance of a certificate. No certificates will be issued for fractional shares
or to shareholders who have elected the pre-designated bank account method,
Systematic Withdrawal Plan or check writing privilege of withdrawing cash from
their accounts. Whenever a shareholder instituted transaction takes place in
the Shareholder Investment Account, the shareholder will be mailed a written
confirmation of the transaction from the Fund or from DWR or other selected
broker-dealer.

Automatic Investment of Dividends and Distributions. All dividends and
capital gains distributions are automatically paid in full and fractional
shares of the Fund, unless the shareholder requests that they be paid in cash.
Each purchase of shares of the Fund is made upon the condition that the
Transfer Agent is thereby automatically appointed as agent of the investor to
receive all dividends and capital gains distributions on shares owned by the
investor. Such dividends and distributions will be paid in shares of the Fund
at the net asset value per share as of the close of business on the record
date. An investor may terminate such agency at any time and may request the
Transfer Agent in writing to have subsequent dividends and/or capital gains
distributions paid in cash rather than shares. Such request must be received by
the Transfer Agent at least five (5) business days prior to the record date for
which it commences to take effect. In case of recently purchased shares for
which registration instructions have not been received on the record date, cash
payments will be made to DWR or other selected broker-dealer and will be
forwarded to the shareholders upon receipt of proper instructions. It has been
and remains the Fund's policy and practice that, if checks for dividends or
distributions paid in cash remain uncashed, no interest will accrue on amounts
represented by such uncashed checks.

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<PAGE>
Investment of Distributions Received in Cash. As discussed in the
Prospectus, any shareholder who receives a cash payment representing a dividend
or capital gains distribution may invest such dividend or distribution at net
asset value (without sales charge) by returning the check or the proceeds to
the Transfer Agent within 30 days after the payment date. If the shareholder
returns the proceeds of a dividend or distribution, such funds must be
accompanied by a signed statement indicating that the proceeds constitute a
dividend or distribution to be invested. Such investment will be made at the
net asset value per share next determined after receipt of the check or the
proceeds by the Transfer Agent.

Direct Investments through Transfer Agent. As discussed in the Prospectus, a
shareholder may make additional investments in Fund shares at any time by
sending a check in any amount, not less than $100, payable to Morgan Stanley
Dean Witter Short-Term U.S. Treasury Trust, directly to the Transfer Agent.
Such amounts will be applied to the purchase of Fund shares at the net asset
value per share next computed after receipt of the check or purchase payment by
the Transfer Agent. The shares so purchased will be credited to the investor's
account.

EasyInvest (Service Mark) . Shareholders may subscribe to EasyInvest, an
automatic purchase plan which provides for any amount from $100 to $5,000 to be
transferred automatically from a checking or savings account, on a
semi-monthly, monthly or quarterly basis, to the Transfer Agent for investment
in shares of the Fund. Shares purchased through EasyInvest will be added to the
shareholder's existing account at the net asset value calculated the same
business day the transfer of funds is effected. For further information or to
subscribe to EasyInvest, shareholders should contact their Morgan Stanley Dean
Witter Financial Advisor or other or other selected broker-dealer
representative or the Transfer Agent.

Targeted Dividends (Service Mark) . In states where it is legally
permissible to do so, shareholders may also have all income dividends and
capital gains distributions automatically invested in shares of an open-end
Morgan Stanley Dean Witter Fund other than Morgan Stanley Dean Witter Short
Term U.S. Treasury Trust. Such investment will be made as described above for
automatic investment in shares of the Fund, at the net asset value per share of
the selected Morgan Stanley Dean Witter Fund as of the close of business on the
payment date of the dividend or distribution, and will begin to earn dividends,
if any, in the selected Morgan Stanley Dean Witter Fund the next business day.
To participate in the Targeted Dividends program, shareholders should contact
their Morgan Stanley Dean Witter Financial Advisor or other selected
broker-dealer representative or the Transfer Agent. Shareholders of the Fund
must be shareholders of the Morgan Stanley Dean Witter Fund targeted to receive
investments from dividends at the time they enter the Targeted Dividends
program. Investors should review the prospectus of the targeted Morgan Stanley
Dean Witter Fund before entering the program.

Systematic Withdrawal Plan. As discussed in the Prospectus, a withdrawal
plan is available for shareholders who own or purchase shares of the Fund
having a minimum value of $10,000 based upon the then current offering price.
The plan provides for monthly or quarterly (March, June, September and
December) checks in any dollar amount, not less than $25, or in any whole
percentage of the account balance, on an annualized basis.

Dividends and capital gains distributions on shares held under the
Systematic Withdrawal Plan will be invested in additional full and fractional
shares at net asset value (without a sales charge). Shares will be credited to
an open account for the investor by the Transfer Agent; no share certificates
will be issued. A shareholder is entitled to a share certificate upon written
request to the Transfer Agent, although in that event the shareholder's
Systematic Withdrawal Plan will be terminated.

The Transfer Agent acts as agent for the shareholder in tendering to the
Fund for redemption sufficient full and fractional shares to provide the amount
of the periodic withdrawal payment designated in the application. The shares
will be redeemed at their net asset value determined, at the shareholder's
option, on the tenth or twenty-fifth day (or next following business day) of
the relevant month or quarter and normally a check for the proceeds will be
mailed by the Transfer Agent within five business days after the date of
redemption. The Withdrawal Plan may be terminated at any time by the Fund.

Any shareholder who wishes to have payments under the Withdrawal Plan made
to a third party or sent to an address other than the one listed on the account
must send complete written instructions to

20
<PAGE>

the Transfer Agent to enroll in the Withdrawal Plan. The shareholder's
signature on such instructions must be guaranteed by an eligible guarantor
acceptable to the Transfer Agent (shareholders should contact the Transfer
Agent for a determination as to whether a particular institution is such an
eligible guarantor). A shareholder may, at any time, change the amount and
interval of withdrawal payments and the address to which checks are mailed by
written notification to the Transfer Agent. The shareholder's signature on such
notification must be guaranteed in the manner described above. The shareholder
may also terminate the Systematic Withdrawal Plan at any time by written notice
to the Transfer Agent. In the event of such termination, the account will be
continued as a Shareholder Investment Account. The shareholder may also redeem
all or part of the shares held in the Systematic Withdrawal Plan account (see
"Redemptions and Repurchases" in the Prospectus) at any time. The Systematic
Withdrawal Plan is not available for shares held in an Exchange Privilege
Account.

EXCHANGE PRIVILEGE

As discussed in the Prospectus under the caption "Exchange Privilege," an
Exchange Privilege exists whereby investors who have purchased shares of any of
the Morgan Stanley Dean Witter Funds that are multiple class funds ("Morgan
Stanley Dean Witter Multi-Class Funds"), shares of Morgan Stanley Dean Witter
Multi-State Municipal Series Trust and Morgan Stanley Dean Witter Hawaii
Municipal Trust, which are Morgan Stanley Dean Witter Funds sold with a
front-end sales charge ("FSC Funds"), and shares of Morgan Stanley Dean Witter
Global Short-Term Income Fund Inc. ("Global Short-Term"), which is a Morgan
Stanley Dean Witter Fund offered with a contingent deferred sales charge
("CDSC"), will be permitted, after the shares of the fund acquired by purchase
(not by exchange or dividend reinvestment) have been held for thirty days, to
redeem all or part of their shares in that fund, have the proceeds invested in
shares of the Fund, Morgan Stanley Dean Witter Limited Term Municipal Trust and
Morgan Stanley Dean Witter Short-Term Bond Fund, and in shares of five money
market funds: Morgan Stanley Dean Witter Liquid Asset Fund Inc., Morgan Stanley
Dean Witter Tax-Free Daily Income Trust, Morgan Stanley Dean Witter California
Tax-Free Daily Income Trust, Morgan Stanley Dean Witter New York Municipal
Money Market Trust, or Morgan Stanley Dean Witter U.S. Government Money Market
Trust (these eight funds, including the Fund, are hereinafter collectively
referred to as "Exchange Funds"). There is no waiting period for exchanges of
shares acquired by exchange or dividend reinvestment. Shares of the Exchange
Funds received in an exchange for shares of a Morgan Stanley Dean Witter
Multi-Class Fund may be redeemed and exchanged only for shares of the
corresponding Class of a Morgan Stanley Dean Witter Multi-Class Fund or for
shares of one of the other Exchange Funds, provided that shares of the Exchange
Funds received in an exchange for Class A shares of a Morgan Stanley Dean
Witter Multi-Class Fund may also be redeemed and exchanged for shares of a FSC
fund, and shares of the Exchange Funds received in an exchange for Class B
shares of a Morgan Stanley Dean Witter Multi-Class Fund may also be redeemed
and exchanged for shares of Global Short-Term. In addition, shares of the
Exchange Funds received in an exchange for shares of a FSC fund may be redeemed
and exchanged for Class A shares of a Morgan Stanley Dean Witter Multi-Class
Fund or for shares of one of the other Exchange Funds, and shares of the
Exchange Funds received in an exchange for shares of Global Short-Term may be
redeemed and exchanged for Class B shares of a Morgan Stanley Dean Witter
Multi-Class Fund or for shares of one of the other Exchange Funds. Ultimately,
any applicable CDSC will have to be paid upon redemption of shares originally
purchased from Global Short-Term or a Class of a Morgan Stanley Dean Witter
Multi-Class Fund that imposes a CDSC. An exchange will be treated for federal
income tax purposes the same as a repurchase or redemption of shares, on which
the shareholder may realize a capital gain or loss.

Any new account established through the Exchange Privilege will have the
same registration and cash dividend or dividend reinvestment plan as the
present account, unless the Transfer Agent receives written notification to the
contrary. For telephone exchanges, the exact registration of the existing
account and the account number must be provided.

Any shares held in certificate form cannot be exchanged but must be
forwarded to the Transfer Agent and deposited into the shareholder's account
before being eligible for exchange. (Certificates mailed in for deposit should
not be endorsed.)

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<PAGE>

When shares of a Morgan Stanley Dean Witter Multi-Class Fund or Global
Short-Term are exchanged for shares of any Exchange Fund, the exchange is
executed at no charge to the shareholder, without the imposition of the CDSC at
the time of the exchange. During the period of time the shareholder remains in
the Exchange Fund (calculated from the last day of the month in which the
Exchange Fund shares were acquired), the holding period or "year since purchase
payment made" is frozen. When shares are redeemed out of the Exchange Fund,
they will be subject to a CDSC which would be based upon the period of time the
shareholder held shares in a Morgan Stanley Dean Witter Multi-Class Fund or in
Global Short-Term. However, in the case of shares exchanged into the Exchange
Fund on or after April 23, 1990, upon redemption of shares which results in a
CDSC being imposed, a credit (not to exceed the amount of the CDSC) will be
given in an amount equal to the Exchange Fund 12b-1 distribution fees, if any,
incurred on or after that date which are attributable to those shares.
Shareholders acquiring shares of an Exchange Fund pursuant to this exchange
privilege may exchange those shares back into a Morgan Stanley Dean Witter
Multi-Class Fund or Global Short-Term from the Exchange Fund, with no CDSC
being imposed on such exchange. The holding period previously frozen when
shares were first exchanged for shares of the Exchange Fund resumes on the last
day of the month in which shares of a Morgan Stanley Dean Witter Multi-Class
Fund or of Global Short-Term are reacquired. Thus, a CDSC is imposed only upon
an ultimate redemption, based upon the time (calculated as described above) the
shareholder was invested in a Morgan Stanley Dean Witter Multi-Class Fund or in
Global Short-Term. In the case of exchanges of Class A shares of a Morgan
Stanley Dean Witter Multi-Class Fund which are subject to a CDSC, the holding
period also includes the time (calculated as described above) the shareholder
was invested in a FSC Fund.

When shares initially purchased in a Morgan Stanley Dean Witter Multi-Class
Fund or in Global Short-Term are exchanged for shares of a Morgan Stanley Dean
Witter Multi-Class Fund, shares of Global Short-Term, shares of a FSC Fund, or
shares of an Exchange Fund, the date of purchase of the shares of the fund
exchanged into, for purposes of the CDSC upon redemption, will be the last day
of the month in which the shares being exchanged were originally purchased. In
allocating the purchase payments between funds for purposes of the CDSC, the
amount which represents the current net asset value of shares at the time of
the exchange which were (i) purchased more than one, three or six years
(depending on the CDSC schedule applicable to the shares) prior to the
exchange, (ii) originally acquired through reinvestment of dividends or
distributions and (iii) acquired in exchange for shares of FSC Funds, or for
shares of other Morgan Stanley Dean Witter Funds for which shares of FSC Funds
have been exchanged (all such shares called "Free Shares"), will be exchanged
first. After an exchange, all dividends earned on shares in the Exchange Fund
will be considered Free Shares. If the exchanged amount exceeds the value of
such Free Shares, an exchange is made, on a block-by-block basis, of non-Free
Shares held for the longest period of time (except that if shares held for
identical periods of time but subject to different CDSC schedules are held in
the same Exchange Privilege account, the shares of that block that are subject
to a lower CDSC rate will be exchanged prior to the shares of that block that
are subject to a higher CDSC rate). Shares equal to any appreciation in the
value of non-Free Shares exchanged will be treated as Free Shares, and the
amount of the purchase payments for the non-Free Shares of the fund exchanged
into will be equal to the lesser of (a) the purchase payments for, or (b) the
current net asset value of, the exchanged non-Free Shares. If an exchange
between funds would result in exchange of only part of a particular block of
non-Free Shares, then shares equal to any appreciation in the value of the
block (up to the amount of the exchange) will be treated as Free Shares and
exchanged first, and the purchase payment for that block will be allocated on a
pro rata basis between the non-Free Shares of that block to be retained and the
non-Free Shares to be exchanged. The prorated amount of such purchase payment
attributable to the retained non-Free Shares will remain as the purchase
payment for such shares, and the amount of purchase payment for the exchanged
non-Free Shares will be equal to the lesser of (a) the prorated amount of the
purchase payment for, or (b) the current net asset value of, those exchanged
non-Free Shares. Based upon the procedures described in the Morgan Stanley Dean
Witter Multi-Class Fund Prospectus under the caption "Purchase of Fund Shares"
and in the Global Short-Term Prospectus under the caption "Contingent Deferred
Sales Charge," any applicable CDSC will be imposed upon the ultimate redemption
of shares of any fund, regardless of the number of exchanges since those shares
were originally purchased.

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<PAGE>

With respect to the redemption or repurchase of shares of the Fund, the
application of proceeds to the purchase of new shares in the Fund or any other
of the funds and the general administration of the Exchange Privilege, the
Transfer Agent acts as agent for the Distributor and for the shareholder's
selected 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 selected
broker-dealer.

The Distributor and any selected broker-dealer have authorized and 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 the shares of any
other fund and the general administration of the Exchange Privilege. No
commission or discounts will be paid to the Distributor or any selected
broker-dealer for any transactions pursuant to this Exchange Privilege.

Shares of the Fund acquired pursuant to the Exchange Privilege will be held
by the Fund's Transfer Agent in an Exchange Privilege account distinct from any
account of the same shareholder who may have acquired shares of the Fund
directly. A shareholder of the Fund will not be permitted to make additional
investments in such Exchange Privilege account, except through the exchange of
additional shares of the fund in which the shareholder had initially invested,
and the proceeds of any shares redeemed from such Exchange Privilege account
may not thereafter be placed back into that Exchange Privilege account, except
by utilizing the Reinstatement Privilege (see "Redemptions and
Repurchases--Reinstatement Privilege"). If such a shareholder desires to make
any additional investments in the Fund, a separate account will be maintained
for receipt of such investments. The Fund will have additional costs for
account maintenance if a shareholder has more than one account with the Fund.

Exchanges are subject to the minimum investment requirement and any other
conditions imposed by each fund. (The minimum initial investment for the
Exchange Privilege account of each Class is $10,000 for the Fund (although the
Fund, in its discretion, may accept initial investments of as low as $5,000)
and $5,000 for Morgan Stanley Dean Witter Liquid Asset Fund Inc., Morgan
Stanley Dean Witter Tax-Free Daily Income Trust, Morgan Stanley Dean Witter
California Tax-Free Daily Income Trust, and Morgan Stanley Dean Witter New York
Municipal Money Market Trust, although those funds may, at their discretion,
accept initial investments of as low as $1,000. The minimum initial investment
for the Exchange Privilege account of each Class is $5,000 for Morgan Stanley
Dean Witter Special Value Fund. The minimum initial investment for the Exchange
Privilege account of each Class of all other Morgan Stanley Dean Witter Funds
for which the Exchange Privilege is available is $1,000.) Upon exchange into an
Exchange Fund, the shares of that fund will be held in a special Exchange
Privilege account separately from accounts of those shareholders who have
acquired their shares directly from that fund. As a result, certain services
normally available to shareholders of the Fund or of money market funds,
including the check writing feature, will not be available for funds held in
that account.

The Fund and each of the other Morgan Stanley Dean Witter Funds may limit
the number of times this Exchange Privilege may be exercised by any investor
within a specified period of time. Also, the Exchange Privilege may be
terminated or revised at any time by any of the Morgan Stanley Dean Witter
Funds, upon such notice as may be required by applicable regulatory agencies
(presently sixty days' prior written notice for termination or material
revision), provided that six months' prior written notice of termination will
be given to the shareholders who hold shares of Exchange Funds pursuant to this
Exchange Privilege, and provided further that the Exchange Privilege may be
terminated or materially revised at times (a) when the New York Stock Exchange
is closed for other than customary weekends and holidays, (b) when trading on
that Exchange is restricted, (c) when an emergency exists as a result of which
disposal by the Fund of securities owned by it is not reasonably practicable or
it is not reasonably practicable for the Fund fairly to determine the value of
its net assets, (d) during any other period when the Securities and Exchange
Commission by order so permits (provided that applicable rules and regulations
of the Securities and Exchange Commission shall govern as to whether the
conditions prescribed in (b) or (c) exist), or (e), if the Fund would be unable
to invest amounts effectively in accordance with its investment objective(s),
policies and restrictions.

23
<PAGE>
REDEMPTIONS AND REPURCHASES
- -----------------------------------------------------------------------------

As discussed in the Prospectus, shares of the Fund may be redeemed at net
asset value on any day the New York Stock Exchange is open (see "Determination
of Net Asset Value"). Redemptions will be effected at the net asset value per
share next determined after the receipt of a redemption request meeting the
applicable requirements discussed in the Prospectus. When a redemption is made
by check and a check is presented to the Transfer Agent for payment, the
Transfer Agent will redeem a sufficient number of full and fractional shares in
the shareholder's account to cover the amount of the check. This enables the
shareholder to continue earning daily income dividends until the check has
cleared.

A check drawn by a shareholder against his or her other account in the Fund
constitutes a request for redemption of a number of shares sufficient to
provide proceeds equal to the amount of the check. Payment of the proceeds of a
check will normally be made on the next business day after receipt by the
Transfer Agent of the check in proper form. If a check is presented for payment
to the Transfer Agent by a shareholder or payee in person, the Transfer Agent
will make payment by means of a check drawn on the Fund's account or, in the
case of a shareholder payee, to the shareholder's predesignated bank account,
but will not make payment in cash.

The Prospectus describes redemption procedures by check, telephone or wire
instructions with payment to a predesignated bank account, or by mail.

Payment for Shares Redeemed or Repurchased. As discussed in the Prospectus,
payment for shares presented for repurchase or redemption will be ordinarily
made by check within seven days after receipt by the Transfer Agent of the
certificate and/or written request in good order. Such payment may be postponed
or the right of redemption suspended at times (a) when the New York Stock
Exchange is closed for other than customary weekends and holidays, (b) when
trading on that Exchange is restricted, (c) when an emergency exists as a
result of which disposal by the Fund of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Fund to
fairly determine the value of its net assets, or (d) during any other period
when the Securities and Exchange Commission by order so permits; provided that
applicable rules and regulations of the Securities and Exchange Commission
shall govern as to whether the conditions prescribed in (b) or (c) exist. If
the shares to be redeemed have recently been purchased by check (including a
certified or bank cashier's check), payment of redemption proceeds may be
delayed for the minimum time needed to verify that the check used for
investment has been honored (not more than fifteen days from the time of
receipt of the check by the Transfer Agent).

Involuntary Redemption. As discussed in the Prospectus, due to the
relatively high cost of handling small investments, the Fund reserves the right
to redeem, at net asset value, the shares of any shareholders whose shares have
a value of less than $1,000 or such lesser amounts as may be fixed by the
Trustees. However, before the Trust redeems such shares and sends the proceeds
to the shareholder, it will notify the shareholder that the value of its shares
is less than $1,000 and allow the shareholder 60 days to make an additional
investment in an amount which will increase the value of the account to $1,000
or more before the redemption is processed.

DIVIDENDS, DISTRIBUTIONS AND TAXES
- -----------------------------------------------------------------------------

Because the Fund intends to distribute all of its net investment income and
capital gains to shareholders and intends to otherwise comply with all the
provisions of Subchapter M of the Internal Revenue Code of 1986, it is not
expected that the Fund will be required to pay any federal income tax on such
income and capital gains. If however, any such capital gains are retained, the
Fund will pay federal income tax thereon. In such a case, shareholders will
have to include such retained gains in their income but will be able to claim
their share of the tax paid by the Fund as a credit against their individual
federal income tax. The Fund intends to distribute to its shareholders each
calendar year a sufficient amount of ordinary income and capital gains to avoid
the imposition of the 4% excise tax.

Shareholders will normally have to pay federal income taxes on the dividends
and capital gains distributions they receive from the Fund. Such dividends and
distributions derived from net investment

24
<PAGE>

income or short-term capital gains are taxable to the shareholder as ordinary
dividend income regardless of how long a shareholder has held the Fund's shares
and whether the shareholder receives such dividends or distributions in
additional shares or in cash. Distributions of 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 Treasury
Department intends to issue regulations to permit shareholders to take into
account their proportionate share of the Fund's capital gains distributions
that will be subject to a reduced rate under the Taxpayer Relief Act of 1997.
The Taxpayer Relief Act reduced the maximum tax rate on long-term capital gains
from 28% to 20%; however, it also lengthened the required holding period to
obtain this lower rate from more than 12 months to more than 18 months.
However, the IRS Restructuring and Reform Act of 1998 reduces the holding
period requirement for the lower capital gain rate to mature 12 more than for
transactions occurring after January 1, 1998. These lower rates do not apply to
collectibles and certain other assets. Additionally, the maximum capital gain
rate for assets that are held more than 5 years and that are acquired after
December 31, 2000 is 18%.

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, capital gains distributions and
dividends 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 to the extent of such reduction below the shareholder's cost, but
nonetheless would be fully taxable at either ordinary or capital gain rates.
Therefore, an investor should consider the tax implications of purchasing Fund
shares immediately prior to a dividend or distribution record date.

Under current federal tax law, the Fund will receive net investment income
in the form of interest by virtue of holding Treasury bills, notes and bonds,
and will recognize income attributable to it from holding zero coupon Treasury
securities. Current federal tax law requires that a holder (such as the Fund)
of a zero coupon security accrue a portion of the discount at which the
security was purchased as income each year even though the Fund receives no
interest payment in cash on the security during the year. As an investment
company, the Fund must pay out substantially all of its net investment income
each year. Accordingly, the Fund may be required to pay out as an income
distribution each year an amount which is greater than the total amount of cash
receipts of interest the Fund actually received. 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 Trust 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.

State and Local Taxes. The Fund intends to invest only in the obligations of
the U.S. Government that provide interest income exempt from most state and
local taxes. Because all States presently allow the pass-through of federal
obligation interest derived from specific federal obligations, it is
anticipated that substantially all of the interest income generated by the Fund
and paid out to shareholders as net investment income will be exempt from the
taxation of most state and local jurisdictions. Such investment income,
however, will not be exempt from federal tax. Furthermore, any capital gains
realized by the Fund will not be exempt from federal, and generally, state and
local taxes. It should be noted that although the Fund intends to invest only
in securities the pass-through income from which is believed exempt from state
and local income taxes, except as noted above, it is possible that a state or
local taxing authority may seek to tax an investor on a portion of the interest
income of a particular government obligation held by the Fund.

Shareholders are urged to consult their own tax advisers regarding specific
questions as to federal, state or local taxes.

25
<PAGE>
PERFORMANCE INFORMATION
- -----------------------------------------------------------------------------

As discussed in the Prospectus, from time to time the Fund may quote its
"yield" and/or its "total return" in advertisements and sales literature. Yield
is calculated for any 30-day period as follows: the amount of interest and/or
dividend income for each security in the Fund's portfolio is determined in
accordance with regulatory requirements; the total for the entire portfolio
constitutes the Fund's gross income for the period. Expenses accrued during the
period are subtracted to arrive at "net investment income". The resulting
amount is divided by the product of the net asset value per share on the last
day of the period multiplied by the average number of Fund shares outstanding
during the period that were entitled to dividends. This amount is added to 1
and raised to the sixth power. 1 is then subtracted from the result and the
difference is multiplied by 2 to arrive at the annualized yield. The Fund's
yield for the 30-day period ended May 31, 1998 was 4.87%.

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 the Fund's
operations, if shorter than any of the foregoing. For the purpose of this
calculation, it is assumed that all dividends 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, 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 the Fund for the fiscal year ended May
31, 1998 and for the five year period ended May 31, 1998, and for the period
August 13, 1991 (commencement of operations) through May 31, 1998 were 6.68%,
4.55% and 5.30%, respectively.

In addition to the foregoing, the Fund may advertise its total return over
different periods of time by means of aggregate, average, year-by-year or other
types of total return figures. The Fund may compute its aggregate total return
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 by the initial $1,000 investment and subtracting 1 from the result. The
Fund's total returns for the year ended May 31, 1998, for the five year period
ended May 31, 1998, and for the period August 13, 1991 (commencement of
operations) through May 31, 1998 were 6.68%, 24.90% and 42.05% respectively.

The Fund may also advertise the growth of a hypothetical investment of
$10,000, $50,000 or $100,000 in shares of the Fund by adding 1 to the Fund's
aggregate total return and multiplying by $10,000, $50,000 or $100,000, as the
case may be. Investments of $10,000, $50,000 and $100,000 in the Fund at
inception would have grown to $14,205, $71,025 and $142,050, respectively, at
May 31, 1998.

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

DESCRIPTION OF SHARES OF THE FUND
- -----------------------------------------------------------------------------

The shareholders of the Fund are entitled to a full vote for each full share
held. All of the Trustees have been elected by the shareholders of the Fund,
most recently at a Special Meeting of shareholders held on May 21, 1997. The
Trustees themselves have the power to alter the number and the terms of office
of the Trustees, and they may at any time lengthen their own terms or make
their terms of unlimited duration and appoint their own successors, provided
that always at least a majority of the Trustees has been elected by the
shareholders of the Fund. Under certain circumstances the Trustees may be
removed by action of the Trustees. The shareholders also have the right under
certain circumstances to remove the Trustees. The voting rights of shareholders
are not cumulative, so that holders of more than 50 percent of the shares
voting can, if they choose, elect all Trustees being selected, while the
holders of the remaining shares would be unable to elect any Trustees.

26
<PAGE>
The Declaration of Trust permits the Trustees 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 (which would be used to distinguish among the rights of
different categories of shareholders, as might be required by future
regulations or other unforeseen circumstances). The Trustees have not presently
authorized any such additional series or classes of shares.

The Declaration of Trust further provides that no Trustee, officer, employee
or agent of the Fund is liable to the Fund or to a shareholder, nor is any
Trustee, 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 or
its own bad faith, willful misfeasance, gross negligence, or reckless disregard
of his duties. It also provides that all third persons shall look solely to the
Fund's property for satisfaction of claims arising in connection with the
affairs of the Fund. With the exceptions stated, the Declaration of Trust
provides that a Trustee, officer, employee or agent is entitled to be
indemnified against all liability in connection with the affairs of the Fund.

The Fund is authorized to issue an unlimited number of shares of beneficial
interest. The Fund shall be of unlimited duration, subject to the provisions in
the Declaration of Trust concerning termination by action of the shareholders.

CUSTODIAN AND TRANSFER AGENT
- -----------------------------------------------------------------------------

The Bank of New York, 90 Washington Street, New York, New York 10286 is
the Custodian of the Fund's assets. Any Fund cash balances with the Custodian
in excess of $100,000 are unprotected by Federal deposit insurance. Such
amounts may, at times, be substantial.

Morgan Stanley Dean Witter Trust FSB, ("MSDW Trust") Harborside Financial
Center, Plaza Two, Jersey City, New Jersey 07311 is the Transfer Agent of the
Trust's shares and Dividend Disbursing Agent for payment of dividends and
distributions on Trust shares and Agent for shareholders under various
investment plans described herein. MSDW Trust is an affiliate of Morgan Stanley
Dean Witter Advisors Inc., the Fund's Investment Manager, and of Morgan Stanley
Dean Witter Distributors Inc., the Fund's Distributor. As Transfer Agent and
Dividend Disbursing Agent, MSDW Trust'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 MSDW Trust receives a per shareholder account fee
from the Fund.

INDEPENDENT ACCOUNTANTS
- -----------------------------------------------------------------------------

PricewaterhouseCoopers LLP serves as the independent accountants of the
Fund. The independent accountants are responsible for auditing the annual
financial statements of the Fund.

REPORTS TO SHAREHOLDERS
- -----------------------------------------------------------------------------

The Fund will send to shareholders, at least semi-annually, reports showing
the Fund's portfolio and other information. An annual report, containing
financial statements audited by independent account-ants, will be sent to
shareholders each year.

The Fund's fiscal year ends on May 31. The financial statements of the Fund
must be audited at least once a year by independent accountants whose selection
is made annually by the Fund's Board of Trustees.

LEGAL COUNSEL
- -----------------------------------------------------------------------------

Barry Fink, Esq., who is an officer and the General Counsel of the
Investment Manager, is an officer and the General Counsel of the Fund.

27
<PAGE>
EXPERTS
- -----------------------------------------------------------------------------

The financial statements of the Fund 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.

REGISTRATION STATEMENT
- -----------------------------------------------------------------------------

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 Securities and Exchange Commission. The complete Registration
Statement may be obtained from the Securities and Exchange Commission upon
payment of the fee prescribed by the rules and regulations of the Commission.

28
<PAGE>
MORGAN STANLEY DEAN WITTER SHORT-TERM U.S. TREASURY TRUST

PORTFOLIO OF INVESTMENTS May 31, 1998

<TABLE>
<CAPTION>
PRINCIPAL DESCRIPTION
AMOUNT IN AND COUPON
THOUSANDS MATURITY DATE RATE VALUE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS (99.3%)
U.S. Treasury Notes (82.3%)
$1,900 03/31/00 ........................................................ 5.50 % $1,898,613
400 02/28/01 ........................................................ 5.625 400,684
3,300 11/15/00 ........................................................ 5.75 3,314,520
12,600 10/31/02 ........................................................ 5.75 12,667,536
19,000 11/30/02 ........................................................ 5.75 19,100,320
800 09/30/98 ........................................................ 6.00 801,704
9,400 06/30/99 ........................................................ 6.00 9,450,102
14,700 07/31/02 ........................................................ 6.00 14,911,386
26,930 09/30/00 ........................................................ 6.125 27,264,471
17,100 12/31/01 ........................................................ 6.125 17,387,793
1,750 07/31/98 ........................................................ 6.25 1,753,377
1,000 03/31/99 ........................................................ 6.25 1,006,060
13,500 04/30/01 ........................................................ 6.25 13,742,055
18,000 10/31/01 ........................................................ 6.25 18,361,800
3,500 02/28/02 ........................................................ 6.25 3,574,970
2,200 06/30/02 ........................................................ 6.25 2,250,072
10,000 05/15/99 ........................................................ 6.375 10,074,900
1,600 01/15/00 ........................................................ 6.375 1,619,824
8,000 04/30/00 ........................................................ 6.75 8,171,040
20,000 02/29/00 ........................................................ 7.125 20,513,400
10,000 07/15/98 ........................................................ 8.25 10,038,500
-------------
198,303,127
-------------
U.S. Treasury Strips (17.0%)
25,600 05/15/99 (Coupon) ............................................... 0.00 24,302,080
1,100 08/15/00 (Principal) ............................................ 0.00 974,897
6,100 11/15/01 (Principal) ............................................ 0.00 5,041,345
13,000 02/15/02 (Principal) ............................................ 0.00 10,605,920
-------------
40,924,242
-------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Identified Cost $236,713,024)(a) ............................... 99.3% 239,227,369
OTHER ASSETS IN EXCESS OF LIABLITIES ........................... 0.7 1,797,171
-------- -------------
NET ASSETS ...................................................... 100.0% $241,024,540
======== =============
</TABLE>

- ------------
(a)
The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation is
$3,558,734 and the aggregate gross unrealized depreciation is
$1,044,389, resulting in net unrealized appreciation of $2,514,345.

SEE NOTES TO FINANCIAL STATEMENTS

29
<PAGE>
MORGAN STANLEY DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
May 31, 1998

<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $236,713,024) ......... $239,227,369
Receivable for:
Interest............................... 3,022,057
Shares of beneficial interest sold ... 2,331,376
Prepaid expenses and other assets ...... 37,843
--------------
TOTAL ASSETS .......................... 244,618,645
--------------
LIABILITIES:
Payable for:
Shares of beneficial interest
repurchased........................... 3,208,007
Plan of distribution fee .............. 71,331
Investment management fee ............. 71,331
Dividends to shareholders ............. 70,555
Accrued expenses and other payables .... 172,881
---------------
TOTAL LIABILITIES ..................... 3,594,105
---------------
NET ASSETS ............................ $241,024,540
===============
COMPOSITION OF NET ASSETS:
Paid-in-capital.......................... $256,769,712
Net unrealized appreciation ............. 2,514,345
Accumulated undistributed net investment
income.................................. 205,261
Accumulated net realized loss ........... (18,464,778)
---------------
NET ASSETS ............................ $241,024,540
===============
NET ASSET VALUE PER SHARE,
24,192,405 shares outstanding
(unlimited shares authorized of $.01
par value)............................. $ 9.96
===============
</TABLE>

STATEMENT OF OPERATIONS
For the year ended May 31, 1998

<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INTEREST INCOME ....................... $14,715,707
--------------
EXPENSES
Investment management fee.............. 841,955
Plan of distribution fee .............. 827,872
Transfer agent fees and expenses ...... 113,907
Registration fees ..................... 64,175
Professional fees ..................... 44,016
Shareholder reports and notices ...... 40,837
Trustees' fees and expenses............ 16,417
Custodian fees ........................ 8,333
Other ................................. 12,948
--------------
TOTAL EXPENSES ...................... 1,970,460
--------------
NET INVESTMENT INCOME ............... 12,745,247
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized loss ..................... (250,683)
Net change in unrealized depreciation 3,306,205
--------------
NET GAIN ............................ 3,055,522
--------------
NET INCREASE .......................... $15,800,769
==============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

30
<PAGE>

MORGAN STANLEY DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
FINANCIAL STATEMENTS, continued

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
MAY 31, 1998 MAY 31, 1997
- ----------------------------------------------------- -------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ................................ $ 12,745,247 $ 13,978,300
Net realized loss .................................... (250,683) (293,887)
Net change in unrealized depreciation................. 3,306,205 112,927
-------------- --------------
NET INCREASE ....................................... 15,800,769 13,797,340
Dividends from net investment income.................. (12,934,573) (13,860,110)
Net increase (decrease) from transactions in shares
of beneficial interest............................... 7,891,155 (28,307,309)
-------------- --------------
NET INCREASE (DECREASE) ............................ 10,757,351 (28,370,079)
NET ASSETS:
Beginning of period................................... 230,267,189 258,637,268
-------------- --------------
END OF PERIOD
(Including undistributed net investment income of
$205,261 and $394,587, respectively) ............... $241,024,540 $230,267,189
============== ==============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

31
<PAGE>

MORGAN STANLEY DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
NOTES TO FINANCIAL STATEMENTS May 31, 1998

1. ORGANIZATION AND ACCOUNTING POLICIES

Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust (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 current income, preservation of principal and liquidity. The Fund
seeks to achieve its objective by investing its assets in U.S. Treasury
securities backed by the full faith and credit of the U.S. Government. The Fund
was organized as a Massachusetts business trust on June 4, 1991 and commenced
operations on August 13, 1991.

Effective June 22, 1998, the following entities have changed their name:

<TABLE>
<CAPTION>
OLD NAME NEW NAME
- ---------------------------------------------- ------------------------------------------------------------
<S> <C>
Dean Witter Short-Term U.S. Treasury Trust Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
Dean Witter InterCapital Inc. Morgan Stanley Dean Witter Advisors Inc.
Dean Witter Distributors Inc. Morgan Stanley Dean Witter Distributors Inc.
</TABLE>

The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts and disclosures. Actual results could differ
from those estimates.

The following is a summary of significant accounting policies:

A. VALUATION OF INVESTMENTS-- (1) 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; (2) when market
quotations are not readily available, including circumstances under which it is
determined by Morgan Stanley Dean Witter Advisors Inc. (the "Investment
Manager") that sale or bid prices are not reflective of a security's market
value, portfolio securities are valued at their fair value as determined in
good faith under procedures established by and under the general supervision of
the Trustees (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 (3) short-term debt securities having a
maturity date of more than sixty days at time of purchase are valued on a
mark-to-market basis until sixty days prior to maturity and thereafter at
amortized cost based on their value on the 61st day. Short-term debt securities
having a maturity date of sixty days or less at the time of purchase are valued
at amortized cost.

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.
Discounts are accreted over the life of the respective securities.
Interest income is accrued daily.

32
<PAGE>
MORGAN STANLEY DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
NOTES TO FINANCIAL STATEMENTS May 31, 1998, continued

C. 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.

D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS-- The Fund records dividends
and distributions to its shareholders on the ex-dividend date. The amount of
dividends and distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations which
may differ from generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in-capital.

2. INVESTMENT MANAGEMENT AGREEMENT

Pursuant to an Investment Management Agreement with the Investment Manager, the
Fund pays the Investment Manager a management fee, accrued daily and payable
monthly, by applying the annual rate of 0.35% to the net assets of the Fund
determined as of the close of each business day.

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

3. PLAN OF DISTRIBUTION

Morgan Stanley Dean Witter Distributors Inc. (the "Distributor"), an affiliate
of the Investment Manager, is the distributor of the Fund's shares and, in
accordance with a Plan of Distribution (the "Plan") pursuant to Rule 12b-1
under the Act, finances certain expenses in connection with the distribution of
shares of the Fund.

Under the Plan, the Distributor bears the expense of all promotional and
distribution related activities on behalf of the Fund, except for expenses
that the Trustees determine to reimburse, as described below. The

33
<PAGE>
MORGAN STANLEY DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
NOTES TO FINANCIAL STATEMENTS May 31, 1998, continued

following activities and services may be provided by the Distributor under the
Plan: (1) compensation to, and expenses of, Morgan Stanley Dean Witter
Financial Advisors, other employees and selected broker-dealers; (2) sales
incentives and bonuses to sales representatives and to marketing personnel in
connection with promoting sales of the Fund's shares; (3) expenses incurred in
connection with promoting sales of the Fund's shares; (4) preparing and
distributing sales literature; and (5) providing advertising and promotional
activities, including direct mail solicitation and television, radio,
newspaper, magazine and other media advertisements.

The Fund is authorized to reimburse the Distributor for specific expenses the
Distributor incurs or plans to incur in promoting the distribution of the
Fund's shares. The amount of each monthly reimbursement payment may in no event
exceed an amount equal to a payment at the annual rate of 0.35% of the Fund's
average daily net assets during the month. For the year ended May 31, 1998, the
distribution fee was accrued at the annual rate of 0.34%.

4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES

The cost of purchases and proceeds from sales/maturities of portfolio
securities for the year ended May 31, 1998 aggregated $211,152,327 and
$219,696,301, respectively.

Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager
and Distributor, is the Fund's transfer agent. At May 31, 1998, the Fund had
transfer agent fees and expenses payable of approximately $4,200.

The Fund has an unfunded noncontributory defined benefit pension plan covering
all independent Trustees of the Fund who will have served as independent
Trustees for at least five years at the time of retirement. Benefits under this
plan are based on years of service and compensation during the last five years
of service. Aggregate pension costs for the year ended May 31, 1998 included in
Trustees' fees and expenses in the Statement of Operations amounted to $2,990.
At May 31, 1998, the Fund had an accrued pension liability of $38,431 which is
included in accrued expenses in the Statement of Assets and Liabilities.

34
<PAGE>
MORGAN STANLEY DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
NOTES TO FINANCIAL STATEMENTS May 31, 1998, continued

5. SHARES OF BENEFICIAL INTEREST

Transactions in shares of beneficial interest were as follows:

<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
MAY 31, 1998 MAY 31, 1997
------------------------------- -------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Shares sold ............................... 28,646,260 $ 285,059,941 25,650,127 $ 253,738,691
Shares issued in reinvestment of
dividends................................. 1,058,231 10,524,484 1,132,124 11,170,571
-------------- --------------- -------------- ---------------
29,704,491 295,584,425 26,782,251 264,909,262
Shares repurchased ........................ (28,891,924) (287,693,270) (29,680,876) (293,216,571)
-------------- --------------- -------------- ---------------
Net increase (decrease) ................... 812,567 $ 7,891,155 (2,898,625) $ (28,307,309)
============== =============== ============== ===============
</TABLE>

6. FEDERAL INCOME TAX STATUS

At May 31, 1998, the Fund had a net capital loss carryover of approximately
$18,356,000, which may be used to offset future capital gains to the extent
provided by regulations, which is available through May 31 of the following
years:

<TABLE>
<CAPTION>
AMOUNT IN THOUSANDS
- ----------------------------------
2003 2004 2005 2006
- --------- -------- ------ ------
<S> <C> <C> <C>
$11,507 $6,271 $333 $245
========= ======== ====== ======
</TABLE>

Capital losses incurred after October 31 ("post-October losses") within the
taxable year are deemed to arise on the first business day of the Fund's next
taxable year. The Fund incurred and will elect to defer net capital losses of
approximately $108,000 during fiscal 1998.

As of May 31, 1998, the Fund had temporary book/tax differences primarily
attributable to post-October losses.

7. RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS

The Fund may invest a portion of its assets in zero coupon U.S. Treasury
securities. Zero coupon securities are subject to substantially greater market
fluctuations during periods of changing prevailing interest rates than are
comparable debt securities.

35
<PAGE>

MORGAN STANLEY DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
FINANCIAL HIGHLIGHTS

Selected ratios and per share data for a share of beneficial interest
outstanding throughout each period:

FOR THE YEAR ENDED MAY 31
-----------------------------------------------------------------
1998 1997 1996 1995 1994 1993
- ---------------------------------------- ------------ ------------ ------------ ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ... $ 9.85 $ 9.84 $ 9.98 $ 9.88 $10.34 $10.21
------------ ------------ ------------ ------------ ------------ ------------
Net investment income ................... 0.53 0.54 0.54 0.49 0.49 0.54
Net realized and unrealized gain (loss) 0.11 -- (0.14) 0.10 (0.45) 0.13
------------ ------------ ------------ ------------ ------------ ------------
Total from investment operations ....... 0.64 0.54 0.40 0.59 0.04 0.67
------------ ------------ ------------ ------------ ------------ ------------
Less dividends and distributions from:
Net investment income .................. (0.53) (0.53) (0.54) (0.49) (0.50) (0.53)
Net realized gain....................... -- -- -- -- -- (0.01)
------------ ------------ ------------ ------------ ------------ ------------
Total dividends and distributions ...... (0.53) (0.53) (0.54) (0.49) (0.50) (0.54)
------------ ------------ ------------ ------------ ------------ ------------
Net asset value, end of period .......... $ 9.96 $ 9.85 $ 9.84 $ 9.98 $ 9.88 $10.34
============ ============ ============ ============ ============ ============
TOTAL INVESTMENT RETURN+ ................ 6.68% 5.63% 4.09% 6.22% 0.25% 6.75%
RATIOS TO AVERAGE NET ASSETS:
Expenses ................................ 0.82% 0.83% 0.84% 0.84% 0.79% 0.80%
Net investment income ................... 5.30% 5.42% 5.33% 4.93% 4.74% 5.18%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands . $241,025 $230,267 $258,637 $273,184 $516,017 $584,206
Portfolio turnover rate ................. 95% 149% 63% 30% 49% 21%

</TABLE>

FOR THE PERIOD
AUGUST 13, 1991*
THROUGH
MAY 31, 1992
- ---------------------------------------- ------------------
<S> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ... $10.00
---------
Net investment income ................... 0.44
Net realized and unrealized gain (loss) 0.20
---------
Total from investment operations ....... 0.64
--------
Less dividends and distributions from:
Net investment income .................. (0.43)
Net realized gain....................... --
--------
Total dividends and distributions ...... (0.43)
--------
Net asset value, end of period .......... $10.21
========
TOTAL INVESTMENT RETURN+ ................ 6.55%(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses ................................ 0.79%(2)(3)
Net investment income ................... 5.49%(2)(3)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands . $523,555
Portfolio turnover rate ................. 12%(1)

</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

36
<PAGE>

MORGAN STANLEY DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Trustees
of Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust

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
Short-Term U.S. Treasury Trust (the "Fund"), formerly Dean Witter Short-Term
U.S. Treasury Trust, at May 31, 1998, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the six years in the
period then ended and for the period August 13, 1991 (commencement of
operations) through May 31, 1992, 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 May 31, 1998 by correspondence with the
custodian, provide a reasonable basis for the opinion expressed above.

PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
July 10, 1998

<PAGE>

MORGAN STANLEY DEAN WITTER SHORT-TERM U.S. TREASURY TRUST

PART C OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements

(1) Financial statements and schedules, included in Prospectus
(Part A): Page in
Prospectus
----------

Financial highlights for the period August 13, 1991 through May 31,
1992 and for the fiscal years ended May 31, 1993, 1994, 1995, 1996,
1997 and 1998........................................................4

(2) Financial statements included in the Statement of Additional
Information (Part B):
Page in
SAI

Portfolio of Investments at May 31, 1998............................29

Statement of Assets and Liabilities at May 31, 1998.................30

Statement of Operations for the year ended May 31, 1998.............30

Statement of Changes in Net Assets for the fiscal years ended May 31,
1997 and 1998.......................................................31

Notes to Financial Statements.......................................32

Financial highlights for the period August 13, 1991 through May 31,
1992 and for the fiscal years ended May 31, 1993, 1994, 1995, 1996,
1997 and 1998 ......................................................36

(3) Financial statements included in Part C:

None

(b) Exhibits:

1 -- Amendment to the Declaration of Trust dated June 22, 1998

2 -- By-Laws of the Registrant, Amended and Restated as of October 23, 1997

5 -- Form of Investment Management Agreement between the Registrant and
Morgan Stanley Dean Witter Advisors Inc.

8 -- Form of Amended and Restated Transfer Agency and Services Agreement
between Morgan Stanley Dean Witter Advisors Inc. and Morgan
Stanley Dean Witter Trust FSB

9 -- Form of Services Agreement between Morgan Stanley Dean Witter Advisors
Inc. and Morgan Stanley Dean Witter Services Company Inc.

<PAGE>

11 -- Consent of Independent Accountants

16 -- Schedules for Computation of Performance Quotations

27 -- Financial Data Schedule

Other -- Power of Attorney

- ----------
All other exhibits were previously filed via EDGAR and are incorporated
by reference.

Item 25. Persons Controlled by or Under Common Control with Registrant.
--------------------------------------------------------------
None

Item 26. Number of Holders of Securities.
--------------------------------

(1) (2)
Number of Record Holders
Title of Class at June 30, 1998
-------------- ----------------
Shares of Beneficial Interest 6,843

Item 27. Indemnification

Pursuant to Section 5.3 of the Registrant's Declaration of Trust and under
Section 4.8 of the Registrant's By-Laws, the indemnification of the
Registrant's trustees, officers, employees and agents is permitted if it is
determined that they acted under the belief that their actions were in or not
opposed to the best interest of the Registrant, and, with respect to any
criminal proceeding, they had reasonable cause to believe their conduct was not
unlawful. In addition, indemnification is permitted only if it is determined
that the actions in question did not render them liable by reason of willful
misfeasance, bad faith or gross negligence in the performance of their duties
or by reason of reckless disregard of their obligations and duties to the
Registrant. Trustees, officers, employees and agents will be indemnified for
the expense of litigation if it is determined that they are entitled to
indemnification against any liability established in such litigation. The
Registrant may also advance money for these expenses provided that they give
their undertakings to repay the Registrant unless their conduct is later
determined to permit indemnification.

Pursuant to Section 5.2 of the Registrant's Declaration of Trust
and paragraph 8 of the Registrant's Investment Management Agreement, neither
the Investment Manager nor any trustee, officer, employee or agent of the
Registrant shall be liable for any action or failure to act, except in the case
of bad faith, willful misfeasance, gross negligence or reckless disregard of
duties to the Registrant.

Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to trustees, officers and
controlling persons of the Registrant pursuant to the foregoing provisions or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a trustee, officer,
or controlling person of the Registrant in connection with

<PAGE>

the successful defense of any action, suit or proceeding) is asserted against
the Registrant by such trustee, officer or controlling person in connection
with the shares being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act, and will be governed by
the final adjudication of such issue.

The Registrant hereby undertakes that it will apply the
indemnification provision of its by-laws in a manner consistent with Release
11330 of the Securities and Exchange Commission under the Investment Company
Act of 1940, so long as the interpretation of Sections 17(h) and 17(i) of such
Act remains in effect.

Registrant, in conjunction with the Investment Manager,
Registrant's Trustees, and other registered investment management companies
managed by the Investment Manager, maintains insurance on behalf of any person
who is or was a Trustee, officer, employee, or agent of Registrant, or who is
or was serving at the request of Registrant as a trustee, director, officer,
employee or agent of another trust or corporation, against any liability
asserted against him and incurred by him or arising out of his position.
However, in no event will Registrant maintain insurance to indemnify any such
person for any act for which Registrant itself is not permitted to indemnify
him.

Item 28. Business and Other Connections of Investment Advisor

See "The Fund and Its Management" in the Prospectus regarding the
business of the investment advisor. The following information is given
regarding officers of Morgan Stanley Dean Witter Advisors Inc. ("MSDW
Advisors"). MSDW Advisors is a wholly-owned subsidiary of Morgan Stanley Dean
Witter & Co. The principal address of the Morgan Stanley Dean Witter Funds is
Two World Trade Center, New York, New York 10048.

The term "Morgan Stanley Dean Witter Funds" refers to the following
registered investment companies:

Closed-End Investment Companies
- -------------------------------
<S> <C>
(1) Dean Witter Government Income Trust
(2) High Income Advantage Trust
(3) High Income Advantage Trust II
(4) High Income Advantage Trust III
(5) InterCapital California Insured Municipal Income Trust
(6) InterCapital California Quality Municipal Securities
(7) InterCapital Income Securities Inc.
(8) InterCapital Insured California Municipal Securities
(9) InterCapital Insured Municipal Bond Trust
(10) InterCapital Insured Municipal Income Trust
(11) InterCapital Insured Municipal Securities
(12) InterCapital Insured Municipal Trust
(13) InterCapital New York Quality Municipal Securities
(14) InterCapital Quality Municipal Income Trust
(15) InterCapital Quality Municipal Investment Trust
(16) InterCapital Quality Municipal Securities
(17) Municipal Income Opportunities Trust

<PAGE>

(18) Municipal Income Opportunities Trust II
(19) Municipal Income Opportunities Trust III
(20) Municipal Income Trust
(21) Municipal Income Trust II
(22) Municipal Income Trust III
(23) Municipal Premium Income Trust
(24) Morgan Stanley Dean Witter Prime Income Trust

Open-end Investment Companies
- -----------------------------
(1) Active Assets California Tax-Free Trust
(2) Active Assets Government Securities Trust
(3) Active Assets Money Trust
(4) Active Assets Tax-Free Trust
(5) Dean Witter Global Asset Allocation Fund
(6) Dean Witter Retirement Series
(7) Morgan Stanley Dean Witter American Value Fund
(8) Morgan Stanley Dean Witter Balanced Growth Fund
(9) Morgan Stanley Dean Witter Balanced Income Fund
(10) Morgan Stanley Dean Witter California Tax-Free Daily Income Trust
(11) Morgan Stanley Dean Witter California Tax-Free Income Fund
(12) Morgan Stanley Dean Witter Capital Appreciation Fund
(13) Morgan Stanley Dean Witter Capital Growth Securities
(14) Morgan Stanley Dean Witter Competitive Edge Fund, "Best Ideas Portfolio"
(15) Morgan Stanley Dean Witter Convertible Securities Trust
(16) Morgan Stanley Dean Witter Developing Growth Securities Trust
(17) Morgan Stanley Dean Witter Diversified Income Trust
(18) Morgan Stanley Dean Witter Dividend Growth Securities Inc.
(19) Morgan Stanley Dean Witter Equity Fund
(20) Morgan Stanley Dean Witter European Growth Fund Inc.
(21) Morgan Stanley Dean Witter Federal Securities Trust
(22) Morgan Stanley Dean Witter Financial Services Trust
(23) Morgan Stanley Dean Witter Fund of Funds
(24) Morgan Stanley Dean Witter Global Dividend Growth Securities
(25) Morgan Stanley Dean Witter Global Short-Term Income Fund Inc.
(26) Morgan Stanley Dean Witter Global Utilities Fund
(27) Morgan Stanley Dean Witter Growth Fund
(28) Morgan Stanley Dean Witter Hawaii Municipal Trust
(29) Morgan Stanley Dean Witter Health Sciences Trust
(30) Morgan Stanley Dean Witter High Yield Securities Inc.
(31) Morgan Stanley Dean Witter Income Builder Fund
(32) Morgan Stanley Dean Witter Information Fund
(33) Morgan Stanley Dean Witter Intermediate Income Securities
(34) Morgan Stanley Dean Witter Intermediate Term U.S. Treasury Trust
(35) Morgan Stanley Dean Witter International SmallCap Fund
(36) Morgan Stanley Dean Witter Japan Fund
(37) Morgan Stanley Dean Witter Limited Term Municipal Trust
(38) Morgan Stanley Dean Witter Liquid Asset Fund Inc.
(39) Morgan Stanley Dean Witter Market Leader Trust
(40) Morgan Stanley Dean Witter Mid-Cap Dividend Growth Securities
(41) Morgan Stanley Dean Witter Mid-Cap Growth Fund
(42) Morgan Stanley Dean Witter Multi-State Municipal Series Trust

<PAGE>

(43) Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
(44) Morgan Stanley Dean Witter New York Municipal Money Market Trust
(45) Morgan Stanley Dean Witter New York Tax-Free Income Fund
(46) Morgan Stanley Dean Witter Pacific Growth Fund Inc.
(47) Morgan Stanley Dean Witter Precious Metals and Minerals Trust
(48) Morgan Stanley Dean Witter S&P 500 Index Fund
(49) Morgan Stanley Dean Witter Select Dimensions Investment Series
(50) Morgan Stanley Dean Witter Select Municipal Reinvestment Fund
(51) Morgan Stanley Dean Witter Short-Term Bond Fund
(52) Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
(53) Morgan Stanley Dean Witter Special Value Fund
(54) Morgan Stanley Dean Witter Strategist Fund
(55) Morgan Stanley Dean Witter Tax-Exempt Securities Trust
(56) Morgan Stanley Dean Witter Tax-Free Daily Income Trust
(57) Morgan Stanley Dean Witter U.S. Government Money Market Trust
(58) Morgan Stanley Dean Witter U.S. Government Securities Trust
(59) Morgan Stanley Dean Witter Utilities Fund
(60) Morgan Stanley Dean Witter Value-Added Market Series
(61) Morgan Stanley Dean Witter Variable Investment Series
(62) Morgan Stanley Dean Witter World Wide Income Trust

The term "TCW/DW Funds" refers to the following registered
investment companies:

Open-End Investment Companies
- -----------------------------
(1) TCW/DW Emerging Markets Opportunities Trust
(2) TCW/DW Global Telecom Trust
(3) TCW/DW Income and Growth Fund
(4) TCW/DW Latin American Growth Fund
(5) TCW/DW Mid-Cap Equity Trust
(6) TCW/DW North American Government Income Trust
(7) TCW/DW Small Cap Growth Fund
(8) TCW/DW Total Return Trust

Closed-End Investment Companies
- -------------------------------
(1) TCW/DW Term Trust 2000
(2) TCW/DW Term Trust 2002
(3) TCW/DW Term Trust 2003
</TABLE>

<PAGE>

NAME AND POSITION OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION WITH
MORGAN STANLEY DEAN OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS
WITTER ADVISORS INC. AND NATURE OF CONNECTION
- -------------------- ------------------------------------------------------
<S> <C>
Mitchell M. Merin Chairman and Director of Morgan Stanley Dean Witter
President, Chief Distributors Inc. ("MSDW Distributors") and Morgan
Executive Officer and Stanley Dean Witter Trust FSB ("MSDW Trust"); President,
Director Chief Executive Officer and Director of Morgan Stanley
Dean Witter Services Company Inc. ("MSDW Services");
Executive Vice President and Director of Dean Witter
Reynolds Inc. ("DWR"); Director of SPS Transactions
Services, Inc. and various other Morgan Stanley Dean
Witter & Co. ("MSDW") subsidiaries.

Thomas C. Schneider Executive Vice President and Chief Strategic and
Executive Vice Administrative Officer of MSDW; Executive Vice
President and Chief President and Chief Financial Officer of MSDW Services
Financial Officer and MSDW Distributors; Director of DWR, MSDW Distributors and
MSDW.

Robert M. Scanlan President, Chief Operating Officer and Director of MSD
President, Chief Services, Executive Vice President of MSDW Distributors;
Operating Officer Executive Vice President and Director of MSDW Trust;
and Director Vice President of the Morgan Stanley Dean Witter Funds
and the TCW/DW Funds.

Joseph J. McAlinden Vice President of the Morgan Stanley Dean Witter Funds
Executive Vice President and Director of MSDW Trust.
and Chief Investment
Officer

Edward C. Oelsner, III
Executive Vice President

Barry Fink Assistant Secretary of DWR; Senior Vice President,
Senior Vice President, Secretary, General Counsel and Director of MSDW
Secretary, General Services; Senior Vice President, Assistant Secretary and
Counsel and Director Assistant General Counsel of MSDW Distributors; Vice
President, Secretary and General Counsel of the Morgan
Stanley Dean Witter Funds and the TCW/DW Funds.

Peter M. Avelar Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Mark Bavoso Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

<PAGE>

Edward F. Gaylor Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Robert S. Giambrone Senior Vice President of MSDW Services, MSDW
Senior Vice President Distributors and MSDW Trust and Director of MSDW Trust;
Vice President of the Morgan Stanley Dean Witter Funds
and the TCW/DW Funds.

Rajesh Gupta Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Kenton J. Hinchliffe Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Kevin Hurley Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Margaret Iannuzzi
Senior Vice President

Jenny Beth Jones Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

John B. Kemp, III President of MSDW Distributors.
Senior Vice President

Anita H. Kolleeny Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Jonathan R. Page Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Ira N. Ross Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Guy G. Rutherfurd, Jr. Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Rochelle G. Siegel Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Jayne M. Stevlingson Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

<PAGE>

Elizabeth A. Vetell
Senior Vice President

James F. Willison Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Ronald J. Worobel Vice President of various Morgan Stanley Dean Witter
Senior Vice President Funds.

Douglas Brown
First Vice President

Thomas F. Caloia First Vice President and Assistant Treasurer of
First Vice President MSDW Services; Assistant Treasurer of MSDW
and Assistant Distributors; Treasurer and Chief Financial Officer of the
Treasurer Morgan Stanley Dean Witter Funds and the TCW/DW
Funds.

Thomas Chronert
First Vice President

Rosalie Clough
First Vice President

Marilyn K. Cranney Assistant Secretary of DWR; First Vice President and
First Vice President Assistant Secretary of MSDW Services; Assistant
and Assistant Secretary Secretary of the Morgan Stanley Dean Witter Funds and
the TCW/DW Funds.

Salvatore DeSteno Vice President of MSDW Services.
First Vice President

Michael Interrante First Vice President and Controller of MSDW Services;
First Vice President Assistant Treasurer of MSDW Distributors; First Vice
and Controller President and Treasurer of MSDW Trust.

David Johnson
First Vice President

Stanley Kapica
First Vice President

Carsten Otto First Vice President and Assistant Secretary of MSDW
First Vice President Services; Assistant Secretary of the Morgan Stanley
and Assistant Secretary Dean Witter and the TCW/DW Funds.

<PAGE>
NAME AND POSITION OTHER SUBSTANTIAL BUSINESS, PROFESSION, VOCATION WITH
MORGAN STANLEY DEAN OR EMPLOYMENT, INCLUDING NAME, PRINCIPAL ADDRESS
WITTER ADVISORS INC. AND NATURE OF CONNECTION
- -------------------- ------------------------------------------------------
Robert Zimmerman
First Vice President

Dale Albright
Vice President

Joan G. Allman
Vice President

Andrew Arbenz
Vice President

Joseph Arcieri Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Nancy Belza
Vice President

Maurice Bendrihem
Vice President and
Assistant Controller

Frank Bruttomesso Vice President and Assistant Secretary of MSDW
Vice President and Services; Assistant Secretary of the Morgan Stanley Dean
Assistant Secretary Witter Funds and the TCW/DW Funds.

Ronald Caldwell
Vice President

Joseph Cardwell
Vice President

Philip Casparius
Vice President

David Dineen
Vice President

Bruce Dunn
Vice President

Michael Durbin
Vice President

Sheila Finnerty
Vice President

<PAGE>

Jeffrey D. Geffen
Vice President

Michael Geringer
Vice President

Ellen Gold
Vice President

Stephen Greenhut
Vice President

Sandra Grossman
Vice President

Peter W. Gurman
Vice President

Matthew Haynes Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Peter Hermann Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Elizabeth Hinchman
Vice President

David Hoffman
Vice President

Christopher Jones
Vice President

Kevin Jung
Vice President

Carol Espejo Kane
Vice President

James P. Kastberg
Vice President

Michelle Kaufman Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Paula LaCosta Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Gerard J. Lian Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Nancy Login
Vice President

Steven MacNamara
Vice President

Catherine Maniscalco Vice President of Morgan Stanley Dean Witter Natural
Vice President Resource Development Securities Inc.

Albert McGarity
Vice President

LouAnne D. McInnis Vice President and Assistant Secretary of MSDW
Vice President and Services; Assistant Secretary of the Morgan Stanley Dean
Assistant Secretary Witter Funds and the TCW/DW Funds.

Sharon K. Milligan
Vice President

Julie Morrone
Vice President

Mary Beth Mueller
Vice President

David Myers Vice President of Morgan Stanley Dean Witter Natural
Vice President Resource Development Securities Inc.

Richard Norris
Vice President

George Paoletti
Vice President

Anne Pickrell Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Michael Roan
Vice President

<PAGE>

John Roscoe
Vice President

Hugh Rose
Vice President

Robert Rossetti Vice President of various Morgan Stanley Dean Witter Funds
Vice President

Ruth Rossi Vice President and Assistant Secretary of MSDW
Vice President and Services; Assistant Secretary of the Morgan Stanley Dean
Assistant Secretary Witter Funds and the TCW/DW Funds.

Carl F. Sadler
Vice President

Deborah Santaniello
Vice President

Peter J. Seeley Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Robert Stearns
Vice President

Naomi Stein
Vice President

Kathleen H. Stromberg Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

Marybeth Swisher
Vice President

Robert Vanden Assem
Vice President

James P. Wallin
Vice President

Alice Weiss Vice President of various Morgan Stanley Dean Witter
Vice President Funds.

John Wong
Vice President

</TABLE>
<PAGE>

Item 29. Principal Underwriters

(a) Morgan Stanley Dean Witter Distributors Inc. ("MSDW Distributors"), a
Delaware corporation, is the principal underwriter of the Registrant. MSDW
Distributors is also the principal underwriter of the following investment
companies:
<TABLE>
<CAPTION>

<S> <C>
(1) Active Assets California Tax-Free Trust
(2) Active Assets Government Securities Trust
(3) Active Assets Money Trust
(4) Active Assets Tax-Free Trust
(5) Dean Witter Global Asset Allocation Fund
(6) Dean Witter Retirement Series
(7) Morgan Stanley Dean Witter American Value Fund
(8) Morgan Stanley Dean Witter Balanced Growth Fund
(9) Morgan Stanley Dean Witter Balanced Income Fund
(10) Morgan Stanley Dean Witter California Tax-Free Daily Income Trust
(11) Morgan Stanley Dean Witter California Tax-Free Income Fund
(12) Morgan Stanley Dean Witter Capital Appreciation Fund
(13) Morgan Stanley Dean Witter Capital Growth Securities
(14) Morgan Stanley Dean Witter Competitive Edge Fund, "Best Ideas Portfolio"
(15) Morgan Stanley Dean Witter Convertible Securities Trust
(16) Morgan Stanley Dean Witter Developing Growth Securities Trust
(17) Morgan Stanley Dean Witter Diversified Income Trust
(18) Morgan Stanley Dean Witter Dividend Growth Securities Inc.
(19) Morgan Stanley Dean Witter Equity Fund
(20) Morgan Stanley Dean Witter European Growth Fund Inc.
(21) Morgan Stanley Dean Witter Federal Securities Trust
(22) Morgan Stanley Dean Witter Financial Services Trust
(23) Morgan Stanley Dean Witter Fund of Funds
(24) Morgan Stanley Dean Witter Global Dividend Growth Securities
(25) Morgan Stanley Dean Witter Global Short-Term Income Fund Inc.
(26) Morgan Stanley Dean Witter Global Utilities Fund
(27) Morgan Stanley Dean Witter Growth Fund
(28) Morgan Stanley Dean Witter Hawaii Municipal Trust
(29) Morgan Stanley Dean Witter Health Sciences Trust
(30) Morgan Stanley Dean Witter High Yield Securities Inc.
(31) Morgan Stanley Dean Witter Income Builder Fund
(32) Morgan Stanley Dean Witter Information Fund
(33) Morgan Stanley Dean Witter Intermediate Income Securities
(34) Morgan Stanley Dean Witter Intermediate Term U.S. Treasury Trust
(35) Morgan Stanley Dean Witter International SmallCap Fund
(36) Morgan Stanley Dean Witter Japan Fund
(37) Morgan Stanley Dean Witter Limited Term Municipal Trust
(38) Morgan Stanley Dean Witter Liquid Asset Fund Inc.
(39) Morgan Stanley Dean Witter Market Leader Trust
(40) Morgan Stanley Dean Witter Mid-Cap Dividend Growth Securities
(41) Morgan Stanley Dean Witter Mid-Cap Growth Fund
(42) Morgan Stanley Dean Witter Multi-State Municipal Series Trust
(43) Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
(44) Morgan Stanley Dean Witter New York Municipal Money Market Trust
(45) Morgan Stanley Dean Witter New York Tax-Free Income Fund

<PAGE>

(46) Morgan Stanley Dean Witter Pacific Growth Fund Inc.
(47) Morgan Stanley Dean Witter Precious Metals and Minerals Trust
(48) Morgan Stanley Dean Witter Prime Income Trust
(49) Morgan Stanley Dean Witter S&P 500 Index Fund
(50) Morgan Stanley Dean Witter Short-Term Bond Fund
(51) Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
(52) Morgan Stanley Dean Witter Special Value Fund
(53) Morgan Stanley Dean Witter Strategist Fund
(54) Morgan Stanley Dean Witter Tax-Exempt Securities Trust
(55) Morgan Stanley Dean Witter Tax-Free Daily Income Trust
(56) Morgan Stanley Dean Witter U.S. Government Money Market Trust
(57) Morgan Stanley Dean Witter U.S. Government Securities Trust
(58) Morgan Stanley Dean Witter Utilities Fund
(59) Morgan Stanley Dean Witter Value-Added Market Series
(60) Morgan Stanley Dean Witter Variable Investment Series
(61) Morgan Stanley Dean Witter World Wide Income Trust
(1) TCW/DW Emerging Markets Opportunities Trust
(2) TCW/DW Global Telecom Trust
(3) TCW/DW Income and Growth
(4) TCW/DW Latin American Growth Fund
(5) TCW/DW Mid-Cap Equity Trust
(6) TCW/DW North American Government Income Trust
(7) TCW/DW Small Cap Growth Fund
(8) TCW/DW Total Return Trust
</TABLE>

(b) The following information is given regarding directors and officers of
MSDW Distributors not listed in Item 28 above. The principal address of
MSDW Distributors is Two World Trade Center, New York, New York 10048.
None of the following persons has any position or office with the
Registrant.

Name Positions and Office with MSDW Distributors
- ---- -------------------------------------------
Richard M. DeMartini Director

Christine Edwards Executive Vice President, Secretary,
Director and Chief Legal Officer.

Michael T. Gregg Vice President and Assistant Secretary.

James F. Higgins Director

Fredrick K. Kubler Senior Vice President, Assistant Secretary
and Chief Compliance Officer.

Philip J. Purcell Director

Item 30. Location of Accounts and Records

All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder
are maintained by the Investment

<PAGE>

Manager at its offices, except records relating to holders of shares issued by
the Registrant, which are maintained by the Registrant's Transfer Agent, at its
place of business as shown in the prospectus.

Item 31. Management Services

Registrant is not a party to any such management-related service
contract.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York
and State of New York on the 28th day of July, 1998.

MORGAN STANLEY DEAN WITTER SHORT-TERM U.S. TREASURY TRUST

By /s/ Barry Fink
----------------------------
Barry Fink
Vice President and Secretary

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 8 has been signed below by the following persons
in the capacities and on the dates indicated.

SIGNATURES TITLE DATE
---------- ----- ----

(1) Principal Executive Officer President, Chief
Executive Officer,
Trustee and Chairman

By /s/ Charles A. Fiumefreddo 07/28/98
--------------------------
Charles A. Fiumefreddo

(2) Principal Financial Officer Treasurer and Principal
Accounting Officer

By /s/ Thomas F. Caloia 07/28/98
--------------------------
Thomas F. Caloia

(3) Majority of the Trustees

Charles A. Fiumefreddo (Chairman)
Philip J. Purcell

By /s/ Barry Fink 07/28/98
--------------------------
Barry Fink
Attorney-in-Fact

Michael Bozic Manuel H. Johnson
Edwin J. Garn Michael E. Nugent
John R. Haire John L. Schroeder
Wayne E. Hedien

By /s/ David M. Butowsky 07/28/98
--------------------------
David M. Butowsky
Attorney-in-Fact

<PAGE>

EXHIBIT INDEX
-------------

1 -- Amendment to the Declaration of Trust dated June 22, 1998

2 -- By-Laws of the Registrant, Amended and Restated as of October 23,
1997

5 -- Form of Investment Management Agreement between the Registrant and
Morgan Stanley Dean Witter Advisors Inc.

8 -- Form of Amended and Restated Transfer Agency and Services
Agreement between Morgan Stanley Dean Witter Advisors Inc. and
Morgan Stanley Dean Witter Trust FSB

9 -- Form of Services Agreement between Morgan Stanley Dean Witter
Advisors Inc. and Morgan Stanley Dean Witter Services Company Inc.

11 -- Consent of Independent Accountants

16 -- Schedules for Computation of Performance Quotations

27 -- Financial Data Schedule

Other -- Power of Attorney

<PAGE>

CERTIFICATE

The undersigned hereby certifies that he is the Secretary of Dean
Witter Short-Term U.S. Treasury Trust (the "Trust"), an unincorporated business
trust organized under the laws of the Commonwealth of Massachusetts, that
annexed hereto is an Amendment to the Declaration of Trust of the Trust adopted
by the Trustees of the Trust on April 30, 1998 as provided in Section 9.3 of
the said Declaration, said Amendment to take effect on June 22, 1998, and I do
hereby further certify that such amendment has not been amended and is on the
date hereof in full force and effect.

Dated this 22nd day of June, 1998.

--------------------------------
Barry Fink
Secretary

<PAGE>

AMENDMENT

Dated: June 22, 1998

To be Effective: June 22, 1998

DEAN WITTER SHORT-TERM U.S. TREASURY TRUST

DECLARATION OF TRUST

DATED

JUNE 3, 1991

<PAGE>

Amendment dated June 22, 1998 to the Declaration of Trust (the
"Declaration") of Dean Witter Short-Term U.S. Treasury Trust, (the trust")
dated June 3, 1991

WHEREAS, the Trust was established by the Declaration on the date
hereinabove set forth under the laws of the Commonwealth of Massachusetts; and

WHEREAS, the Trustees of the Trust have deemed it advisable to
change the name of the Trust to "Morgan Stanley Dean Witter Short-Term U.S.
Treasury Trust," such change to be effective on June 22,1998;

NOW, THEREFORE:

1. Section 1.1 of Article I of the Declaration is hereby amended so
that that Section shall read in its entirety as follows:

"Section 1.1. Name. The name of the Trust created hereby is the
Morgan Stanley Dean Witter Short-term U.S. Treasury Trust and so
far as may be practicable the Trustees shall conduct the Trust's
activities, execute all documents and sue or be sued under that
name, which name (and the word "Trust" whenever herein used)
shall refer to the Trustees as Trustees, and not as individuals,
or personally, and shall not refer to the officers, agents,
employees or Shareholders of the Trust. Should the Trustees
determine that the use of such name is not advisable, they may
use such other name for the Trust as they deem proper and the
Trust may hold its property and conduct its activities under
such other name."

2. Subsection (o) of Section 1.2 of Article I of the Declaration is
hereby amended so that that subsection shall read in its entirety as follows:

"Section 1.2. Definitions...

"(o) "Trust" means the Morgan Stanley Dean Witter Short-Term
U.S. Treasury Trust."

3. Section 11.7 of Article XI of the Declaration is hereby amended
so that that section shall read as follows:

"Section 11.7. Use of the name "Morgan Stanley Dean Witter."
Morgan Stanley Dean Witter & Co. ("MSDW") has consented to the
use by the Trust of the identifying name "Morgan Stanley Dean
Witter," which is a property right of MSDW. The Trust will only
use the name "Morgan Stanley Dean Witter" as a component of its

<PAGE>

name and for no other purpose, and will not purport to grant to
any third party the right to use the name "Morgan Stanley Dean
Witter" for any purpose. MSDW, or any corporate affiliate of
MSDW, may use or grant to others the right to use the name
"Morgan Stanley Dean Witter," or any combination or abbreviation
thereof, as all or a portion of a corporate or business name or
for any commercial purpose, including a grant of such right to
any other investment company. At the request of MSDW or any
corporate affiliate of MSDW, the Trust will take such action as
may be required to provide its consent to the use of the name
"Morgan Stanley Dean Witter," or any combination or abbreviation
thereof, by MSDW or any corporate affiliate of MSDW, or by any
person to whom MSDW or a corporate affiliate of MSDW shall have
granted the right to such use. Upon the termination of any
investment advisory agreement into which a corporate affiliate
of MSDW and the Trust may enter, the Trust shall, upon request
of MSDW or any corporate affiliate of MSDW, cease to use the
name "Morgan Stanley Dean Witter" as a component of its name,
and shall not use the name, or any combination or abbreviation
thereof, as part of its name or for any other commercial
purpose, and shall cause its officers, Trustees and Shareholders
to take any and all actions which MSDW or any corporate
affiliate of MSDW may request to effect the foregoing and to
reconvey to MSDW any and all rights to such name."

4. The Trustees of the Trust hereby reaffirm the Declaration, as
amended, in all respects.

5. This Amendment may be executed in more than one counterpart,
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.

<PAGE>

IN WITNESS WHEREOF, the undersigned, the Trustees of the Trust, have executed
this instrument this 22nd day of June, 1998.

/s/ Michael Bozic /s/ Manuel H. Johnson
- ------------------------ ---------------------
Michael Bozic, as Trustee Manuel H. Johnson, as Trustee
and not individually and not individually
c/o Levitz Furniture Corp. c/o Johnson Smick International Inc.
6111 Broken Sound Parkway, NW 1133 Connecticut Avenue, NW
Boca Raton, FL 33487 Washington, D.C. 20036

/s/ Charles A. Fiumefreddo /s/ Michael E. Nugent
- ----------------------- ---------------------
Charles A. Fiumefreddo, as Trustee Michael E. Nugent, as Trustee
and not individually and not individually
Two World Trade Center c/o Triumph Capital, L.P.
New York, NY 10048 237 Park Avenue
New York, NY 10017

/s/ Edwin J. Garn /s/ Philip J. Purcell
- ----------------------- ---------------------
Edwin J. Garn, as Trustee Philip J. Purcell, as Trustee
and not individually and not individually
c/o Huntsman Corporation 1585 Broadway
500 Huntsman Way New York, NY 10036
Salt Lake City, UT 84111

/s/ John R. Haire /s/ John L. Schroeder
- ----------------------- ---------------------
John R. Haire, as Trustee John L. Schroeder, as Trustee
and not individually and not individually
Two World Trade Center c/o Gordon Altman Butowsky Weitzen
New York, NY 10048 Shalov & Wein
Counsel to the Independent Trustees
114 West 47th Street
New York, NY 10036
/s/ Wayne E. Hedien
- -----------------------
Wayne E. Hedien, as Trustee
and not individually
c/o Gordon Altman Butowsky Weitzen
Shalov & Wein
Counsel to the Independent Trustees
114 West 47th Street
New York, NY 10036

<PAGE>

STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )

On this 22nd day of June, 1998, MICHAEL BOZIC, CHARLES A.
FIUMEFREDDO, EDWIN J. GARN, JOHN R. HAIRE, WAYNE E. HEDIEN, MANUEL H. JOHNSON,
MICHAEL E. NUGENT, PHILIP J. PURCELL and JOHN L. SCHROEDER, known to me to be
the individuals described in and who executed the foregoing instrument,
personally appeared before me and they severally acknowledged the foregoing
instrument to be their free act and deed.

/s/ Marilyn K. Cranney
----------------------
Notary Public

MARILYN K. CRANNEY
NOTARY PUBLIC, State of New York
No. 24-4795538
Qualified in Kings County
Commission Expires May 31, 1999

<PAGE>
BY-LAWS

DEAN WITTER SHORT-TERM U.S. TREASURY TRUST
AMENDED AND RESTATED AS OF OCTOBER 23, 1997

ARTICLE I
DEFINITIONS

The terms "Commission," "Declaration," "Distributor," "Investment
Adviser," "Majority Shareholder Vote," "1940 Act," "Shareholder," "Shares,"
"Transfer Agent," "Trust," "Trust Property," and "Trustees" have the
respective meanings given them in the Declaration of Trust of Dean Witter
Short-Term U.S. Treasury Trust dated June 4, 1991.

ARTICLE II
OFFICES

SECTION 2.1. Principal Office. Until changed by the Trustees, the
principal office of the Trust in the Commonwealth of Massachusetts shall be
in the City of Boston, County of Suffolk.

SECTION 2.2. Other Offices. In addition to its principal office in the
Commonwealth of Massachusetts, the Trust may have an office or offices in the
City of New York, State of New York, and at such other places within and
without the Commonwealth as the Trustees may from time to time designate or
the business of the Trust may require.

ARTICLE III
SHAREHOLDERS' MEETINGS

SECTION 3.1. Place of Meetings. Meetings of Shareholders shall be held at
such place, within or without the Commonwealth of Massachusetts, as may be
designated from time to time by the Trustees.

SECTION 3.2. Meetings. Meetings of Shareholders of the Trust shall be held
whenever called by the Trustees or the President of the Trust and whenever
election of a Trustee or Trustees by Shareholders is required by the
provisions of Section 16(a) of the 1940 Act, for that purpose. Meetings of
Shareholders shall also be called by the Secretary upon the written request
of the holders of Shares entitled to vote not less than twenty-five percent
(25%) of all the votes entitled to be cast at such meeting, except to the
extent otherwise required by Section 16(c) of the 1940 Act, as made
applicable to the Trust by the provisions of Section 2.3 of the Declaration.
Such request shall state the purpose or purposes of such meeting and the
matters proposed to be acted on thereat. Except to the extent otherwise
required by Section 16(c) of the 1940 Act, as made applicable to the Trust by
the provisions of Section 2.3 of the Declaration, the Secretary shall inform
such Shareholders of the reasonable estimated cost of preparing and mailing
such notice of the meeting, and upon payment to the Trust of such costs, the
Secretary shall give notice stating the purpose or purposes of the meeting to
all entitled to vote at such meeting. No meeting need be called upon the
request of the holders of Shares entitled to cast less than a majority of all
votes entitled to be cast at such meeting, to consider any matter which is
substantially the same as a matter voted upon at any meeting of Shareholders
held during the preceding twelve months.

SECTION 3.3. Notice of Meetings. Written or printed notice of every
Shareholders' meeting stating the place, date, and purpose or purposes
thereof, shall be given by the Secretary not less than ten (10) nor more than
ninety (90) days before such meeting to each Shareholder entitled to vote at
such meeting. Such notice shall be deemed to be given when deposited in the
United States mail, postage prepaid, directed to the Shareholder at his
address as it appears on the records of the Trust.

SECTION 3.4. Quorum and Adjournment of Meetings. Except as otherwise
provided by law, by the Declaration or by these By-Laws, at all meetings of
Shareholders, the holders of a majority of the Shares

<PAGE>
issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall be requisite and shall constitute a quorum for
the transaction of business. In the absence of a quorum, the Shareholders
present or represented by proxy and entitled to vote thereat shall have the
power to adjourn the meeting from time to time. The Shareholders present in
person or represented by proxy at any meeting and entitled to vote thereat
also shall have the power to adjourn the meeting from time to time if the
vote required to approve or reject any proposal described in the original
notice of such meeting is not obtained (with proxies being voted for or
against adjournment consistent with the votes for and against the proposal
for which the required vote has not been obtained). The affirmative vote of
the holders of a majority of the Shares then present in person or represented
by proxy shall be required to adjourn any meeting. Any adjourned meeting may
be reconvened without further notice or change in record date. At any
reconvened meeting at which a quorum shall be present, any business may be
transacted that might have been transacted at the meeting as originally
called.

SECTION 3.5. Voting Rights, Proxies. At each meeting of Shareholders, each
holder of record of Shares entitled to vote thereat shall be entitled to one
vote in person or by proxy, executed in writing by the Shareholder or his
duly authorized attorney-in-fact, for each Share of beneficial interest of
the Trust and for the fractional portion of one vote for each fractional
Share entitled to vote so registered in his name on the records of the Trust
on the date fixed as the record date for the determination of Shareholders
entitled to vote at such meeting. No proxy shall be valid after eleven months
from its date, unless otherwise provided in the proxy. At all meetings of
Shareholders, unless the voting is conducted by inspectors, all questions
relating to the qualification of voters and the validity of proxies and the
acceptance or rejection of votes shall be decided by the chairman of the
meeting. Pursuant to a resolution of a majority of the Trustees, proxies may
be solicited in the name of one or more Trustees or Officers of the Trust.

SECTION 3.6. Vote Required. Except as otherwise provided by law, by the
Declaration of Trust, or by these By-Laws, at each meeting of Shareholders at
which a quorum is present, all matters shall be decided by Majority
Shareholder Vote.

SECTION 3.7. Inspectors of Election. In advance of any meeting of
Shareholders, the Trustees may appoint Inspectors of Election to act at the
meeting or any adjournment thereof. If Inspectors of Election are not so
appointed, the chairman of any meeting of Shareholders may, and on the
request of any Shareholder or his proxy shall, appoint Inspectors of Election
of the meeting. In case any person appointed as Inspector fails to appear or
fails or refuses to act, the vacancy may be filled by appointment made by the
Trustees in advance of the convening of the meeting or at the meeting by the
person acting as chairman. The Inspectors of Election shall determine the
number of Shares outstanding, the Shares represented at the meeting, the
existence of a quorum, the authenticity, validity and effect of proxies,
shall receive votes, ballots or consents, shall hear and determine all
challenges and questions in any way arising in connection with the right to
vote, shall count and tabulate all votes or consents, determine the results,
and do such other acts as may be proper to conduct the election or vote with
fairness to all Shareholders. On request of the chairman of the meeting, or
of any Shareholder or his proxy, the Inspectors of Election shall make a
report in writing of any challenge or question or matter determined by them
and shall execute a certificate of any facts found by them.

SECTION 3.8. Inspection of Books and Records. Shareholders shall have such
rights and procedures of inspection of the books and records of the Trust as
are granted to Shareholders under the Corporations and Associations Law of
the State of Maryland.

SECTION 3.9. Action by Shareholders Without Meeting. Except as otherwise
provided by law, the provisions of these By-Laws relating to notices and
meetings to the contrary notwithstanding, any action required or permitted to
be taken at any meeting of Shareholders may be taken without a meeting if a
majority of the Shareholders entitled to vote upon the action consent to the
action in writing and such consents are filed with the records of the Trust.
Such consent shall be treated for all purposes as a vote taken at a meeting
of Shareholders.

SECTION 3.10. Presence at Meetings. Presence at meetings of shareholders
requires physical attendance by the shareholder or his or her proxy at the
meeting site and does not encompass attendance by telephonic or other
electronic means.

2
<PAGE>
ARTICLE IV
TRUSTEES

SECTION 4.1. Meetings of the Trustees. The Trustees may in their
discretion provide for regular or special meetings of the Trustees. Regular
meetings of the Trustees may be held at such time and place as shall be
determined from time to time by the Trustees without further notice. Special
meetings of the Trustees may be called at any time by the President and shall
be called by the President or the Secretary upon the written request of any
two (2) Trustees.

SECTION 4.2. Notice of Special Meetings. Written notice of special
meetings of the Trustees, stating the place, date and time thereof, shall be
given not less than two (2) days before such meeting to each Trustee,
personally, by telegram, by mail, or by leaving such notice at his place of
residence or usual place of business. If mailed, such notice shall be deemed
to be given when deposited in the United States mail, postage prepaid,
directed to the Trustee at his address as it appears on the records of the
Trust. Subject to the provisions of the 1940 Act, notice or waiver of notice
need not specify the purpose of any special meeting.

SECTION 4.3. Telephone Meetings. Subject to the provisions of the 1940
Act, any Trustee, or any member or members of any committee designated by the
Trustees, may participate in a meeting of the Trustees, or any such
committee, as the case may be, by means of a conference telephone or similar
communications equipment if all persons participating in the meeting can hear
each other at the same time. Participation in a meeting by these means
constitutes presence in person at the meeting.

SECTION 4.4. Quorum, Voting and Adjournment of Meetings. At all meetings
of the Trustees, a majority of the Trustees shall be requisite to and shall
constitute a quorum for the transaction of business. If a quorum is present,
the affirmative vote of a majority of the Trustees present shall be the act
of the Trustees, unless the concurrence of a greater proportion is expressly
required for such action by law, the Declaration or these By-Laws. If at any
meeting of the Trustees there be less than a quorum present, the Trustees
present thereat may adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall have been
obtained.

SECTION 4.5. Action by Trustees Without Meeting. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required or permitted to be taken at
any meeting of the Trustees may be taken without a meeting if a consent in
writing setting forth the action shall be signed by all of the Trustees
entitled to vote upon the action and such written consent is filed with the
minutes of proceedings of the Trustees.

SECTION 4.6. Expenses and Fees. Each Trustee may be allowed expenses, if
any, for attendance at each regular or special meeting of the Trustees, and
each Trustee who is not an officer or employee of the Trust or of its
investment manager or underwriter or of any corporate affiliate of any of
said persons shall receive for services rendered as a Trustee of the Trust
such compensation as may be fixed by the Trustees. Nothing herein contained
shall be construed to preclude any Trustee from serving the Trust in any
other capacity and receiving compensation therefor.

SECTION 4.7. Execution of Instruments and Documents and Signing of Checks
and Other Obligations and Transfers. All instruments, documents and other
papers shall be executed in the name and on behalf of the Trust and all
checks, notes, drafts and other obligations for the payment of money by the
Trust shall be signed, and all transfer of securities standing in the name of
the Trust shall be executed, by the Chairman, the President, any Vice
President or the Treasurer or by any one or more officers or agents of the
Trust as shall be designated for that purpose by vote of the Trustees;
notwithstanding the above, nothing in this Section 4.7 shall be deemed to
preclude the electronic authorization, by designated persons, of the Trust's
Custodian (as described herein in Section 9.1) to transfer assets of the
Trust, as provided for herein in Section 9.1.

SECTION 4.8. Indemnification of Trustees, Officers, Employees and
Agents. (a) The Trust shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative

3
<PAGE>
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Trustee, officer, employee, or agent of the Trust. The
indemnification shall be against expenses, including attorneys' fees,
judgments, fines, and amounts paid in settlement, actually and reasonably
incurred by him in connection with the action, suit, or proceeding, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did
not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.

(b) The Trust shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action
or suit by or on behalf of the Trust to obtain a judgment or decree in its
favor by reason of the fact that he is or was a Trustee, officer, employee,
or agent of the Trust. The indemnification shall be against expenses,
including attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit, if he acted
in good faith and in a manner he reasonably believed to be in or not opposed
to the best interests of the Trust; except that no indemnification shall be
made in respect of any claim, issue, or matter as to which the person has
been adjudged to be liable for negligence or misconduct in the performance of
his duty to the Trust, except to the extent that the court in which the
action or suit was brought, or a court of equity in the county in which the
Trust has its principal office, determines upon application that, despite the
adjudication of liability but in view of all circumstances of the case, the
person is fairly and reasonably entitled to indemnity for those expenses
which the court shall deem proper, provided such Trustee, officer, employee
or agent is not adjudged to be liable by reason of his willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office.

(c) To the extent that a Trustee, officer, employee, or agent of the Trust
has been successful on the merits or otherwise in defense of any action, suit
or proceeding referred to in subsection (a) or (b) or in defense of any
claim, issue or matter therein, he shall be indemnified against expenses,
including attorneys' fees, actually and reasonably incurred by him in
connection therewith.

(d) (1) Unless a court orders otherwise, any indemnification under
subsections (a) or (b) of this section may be made by the Trust only as
authorized in the specific case after a determination that indemnification of
the Trustee, officer, employee, or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) or (b).

(2) The determination shall be made:

(i) By the Trustees, by a majority vote of a quorum which consists of
Trustees who were not parties to the action, suit or proceeding; or

(ii) If the required quorum is not obtainable, or if a quorum of
disinterested Trustees so directs, by independent legal counsel in a
written opinion; or

(iii) By the Shareholders.

(3) Notwithstanding any provision of this Section 4.8, no person shall
be entitled to indemnification for any liability, whether or not there is
an adjudication of liability, arising by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of duties as described
in Section 17(h) and (i) of the Investment Company Act of 1940
("disabling conduct"). A person shall be deemed not liable by reason of
disabling conduct if, either:

(i) a final decision on the merits is made by a court or other body
before whom the proceeding was brought that the person to be indemnified
("indemnitee") was not liable by reason of disabling conduct; or

(ii) in the absence of such a decision, a reasonable determination,
based upon a review of the facts, that the indemnitee was not liable by
reason of disabling conduct, is made by either--

4
<PAGE>
(A) a majority of a quorum of Trustees who are neither "interested
persons" of the Trust, as defined in Section 2(a)(19) of the
Investment Company Act of 1940, nor parties to the action, suit or
proceeding, or

(B) an independent legal counsel in a written opinion.

(e) Expenses, including attorneys' fees, incurred by a Trustee, officer,
employee or agent of the Trust in defending a civil or criminal action, suit
or proceeding may be paid by the Trust in advance of the final disposition
thereof if:

(1) authorized in the specific case by the Trustees; and

(2) the Trust receives an undertaking by or on behalf of the Trustee,
officer, employee or agent of the Trust to repay the advance if it is not
ultimately determined that such person is entitled to be indemnified by
the Trust; and

(3) either, (i) such person provides a security for his undertaking,
or

(ii) the Trust is insured against losses by reason of any lawful
advances, or

(iii) a determination, based on a review of readily available
facts, that there is reason to believe that such person ultimately
will be found entitled to indemnification, is made by either--

(A) a majority of a quorum which consists of Trustees who are
neither "interested persons" of the Trust, as defined in Section
2(a)(19) of the 1940 Act, nor parties to the action, suit or
proceeding, or

(B) an independent legal counsel in a written opinion.

(f) The indemnification provided by this Section shall not be deemed
exclusive of any other rights to which a person may be entitled under any
by-law, agreement, vote of Shareholders or disinterested Trustees or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding the office, and shall continue as to a person
who has ceased to be a Trustee, officer, employee, or agent and inure to the
benefit of the heirs, executors and administrators of such person; provided
that no person may satisfy any right of indemnity or reimbursement granted
herein or to which he may be otherwise entitled except out of the property of
the Trust, and no Shareholder shall be personally liable with respect to any
claim for indemnity or reimbursement or otherwise.

(g) The Trust may purchase and maintain insurance on behalf of any person
who is or was a Trustee, officer, employee, or agent of the Trust, against
any liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such. However, in no event will the Trust
purchase insurance to indemnify any officer or Trustee against liability for
any act for which the Trust itself is not permitted to indemnify him.

(h) Nothing contained in this Section shall be construed to protect any
Trustee or officer of the Trust against any liability to the Trust or to its
security holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.

ARTICLE V
COMMITTEES

SECTION 5.1. Executive and Other Committees. The Trustees, by resolution
adopted by a majority of the Trustees, may designate an Executive Committee
and/or committees, each committee to consist of two (2) or more of the
Trustees of the Trust and may delegate to such committees, in the intervals
between meetings of the Trustees, any or all of the powers of the Trustees in
the management of the business and affairs of the Trust. In the absence of
any member of any such committee, the members thereof present at any meeting,
whether or not they constitute a quorum, may appoint a Trustee to act in
place of such absent member. Each such committee shall keep a record of its
proceedings.

5
<PAGE>
The Executive Committee and any other committee shall fix its own rules or
procedure, but the presence of at least fifty percent (50%) of the members of
the whole committee shall in each case be necessary to constitute a quorum of
the committee and the affirmative vote of the majority of the members of the
committee present at the meeting shall be necessary to take action.

All actions of the Executive Committee shall be reported to the Trustees
at the meeting thereof next succeeding to the taking of such action.

SECTION 5.2. Advisory Committee. The Trustees may appoint an advisory
committee which shall be composed of persons who do not serve the Trust in
any other capacity and which shall have advisory functions with respect to
the investments of the Trust but which shall have no power to determine that
any security or other investment shall be purchased, sold or otherwise
disposed of by the Trust. The number of persons constituting any such
advisory committee shall be determined from time to time by the Trustees. The
members of any such advisory committee may receive compensation for their
services and may be allowed such fees and expenses for the attendance at
meetings as the Trustees may from time to time determine to be appropriate.

SECTION 5.3. Committee Action Without Meeting. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required or permitted to be taken at
any meeting of any Committee of the Trustees appointed pursuant to Section
5.1 of these By-Laws may be taken without a meeting if a consent in writing
setting forth the action shall be signed by all members of the Committee
entitled to vote upon the action and such written consent is filed with the
records of the proceedings of the Committee.

ARTICLE VI
OFFICERS

SECTION 6.1. Executive Officers. The executive officers of the Trust shall
be a Chairman, a President, one or more Vice Presidents, a Secretary and a
Treasurer. The Chairman shall be selected from among the Trustees but none of
the other executive officers need be a Trustee. Two or more offices, except
those of President and any Vice President, may be held by the same person,
but no officer shall execute, acknowledge or verify any instrument in more
than one capacity. The executive officers of the Trust shall be elected
annually by the Trustees and each executive officer so elected shall hold
office until his successor is elected and has qualified.

SECTION 6.2. Other Officers and Agents. The Trustees may also elect one or
more Assistant Vice Presidents, Assistant Secretaries and Assistant
Treasurers and may elect, or may delegate to the President the power to
appoint, such other officers and agents as the Trustees shall at any time or
from time to time deem advisable.

SECTION 6.3. Term and Removal and Vacancies. Each officer of the Trust
shall hold office until his successor is elected and has qualified. Any
officer or agent of the Trust may be removed by the Trustees whenever, in
their judgment, the best interests of the Trust will be served thereby, but
such removal shall be without prejudice to the contractual rights, if any, of
the person so removed.

SECTION 6.4. Compensation of Officers. The compensation of officers and
agents of the Trust shall be fixed by the Trustees, or by the President to
the extent provided by the Trustees with respect to officers appointed by the
President.

SECTION 6.5. Power and Duties. All officers and agents of the Trust, as
between themselves and the Trust, shall have such authority and perform such
duties in the management of the Trust as may be provided in or pursuant to
these By-Laws, or to the extent not so provided, as may be prescribed by the
Trustees; provided, that no rights of any third party shall be affected or
impaired by any such By-Law or resolution of the Trustees unless he has
knowledge thereof.

SECTION 6.6. The Chairman. The Chairman shall preside at all meetings of
the Shareholders and of the Trustees, shall be a signatory on all Annual and
Semi-Annual Reports as may be sent to shareholders, and he shall perform such
other duties as the Trustees may from time to time prescribe.

6
<PAGE>
SECTION 6.7. The President. (a) The President shall be the chief executive
officer of the Trust; he shall have general and active management of the
business of the Trust, shall see that all orders and resolutions of the Board
of Trustees are carried into effect, and, in connection therewith, shall be
authorized to delegate to one or more Vice Presidents such of his powers and
duties at such times and in such manner as he may deem advisable.

(b) In the absence of the Chairman, the President shall preside at all
meetings of the shareholders and the Board of Trustees; and he shall perform
such other duties as the Board of Trustees may from time to time prescribe.

SECTION 6.8. The Vice Presidents. The Vice Presidents shall be of such
number and shall have such titles as may be determined from time to time by
the Trustees. The Vice President, or, if there be more than one, the Vice
Presidents in the order of their seniority as may be determined from time to
time by the Trustees or the President, shall, in the absence or disability of
the President, exercise the powers and perform the duties of the President,
and he or they shall perform such other duties as the Trustees or the
President may from time to time prescribe.

SECTION 6.9. The Assistant Vice Presidents. The Assistant Vice President,
or, if there be more than one, the Assistant Vice Presidents, shall perform
such duties and have such powers as may be assigned them from time to time by
the Trustees or the President.

SECTION 6.10. The Secretary. The Secretary shall attend all meetings of
the Trustees and all meetings of the Shareholders and record all the
proceedings of the meetings of the Shareholders and of the Trustees in a book
to be kept for that purpose, and shall perform like duties for the standing
committees when required. He shall give, or cause to be given, notice of all
meetings of the Shareholders and special meetings of the Trustees, and shall
perform such other duties and have such powers as the Trustees, or the
President, may from time to time prescribe. He shall keep in safe custody the
seal of the Trust and affix or cause the same to be affixed to any instrument
requiring it, and, when so affixed, it shall be attested by his signature or
by the signature of an Assistant Secretary.

SECTION 6.11. The Assistant Secretaries. The Assistant Secretary, or, if
there be more than one, the Assistant Secretaries in the order determined by
the Trustees or the President, shall, in the absence or disability of the
Secretary, perform the duties and exercise the powers of the Secretary and
shall perform such duties and have such other powers as the Trustees or the
President may from time to time prescribe.

SECTION 6.12. The Treasurer. The Treasurer shall be the chief financial
officer of the Trust. He shall keep or cause to be kept full and accurate
accounts of receipts and disbursements in books belonging to the Trust, and
he shall render to the Trustees and the President, whenever any of them
require it, an account of his transactions as Treasurer and of the financial
condition of the Trust; and he shall perform such other duties as the
Trustees, or the President, may from time to time prescribe.

SECTION 6.13. The Assistant Treasurers. The Assistant Treasurer, or, if
there shall be more than one, the Assistant Treasurers in the order
determined by the Trustees or the President, shall, in the absence or
disability of the Treasurer, perform the duties and exercise the powers of
the Treasurer and shall perform such other duties and have such other powers
as the Trustees, or the President, may from time to time prescribe.

SECTION 6.14. Delegation of Duties. Whenever an officer is absent or
disabled, or whenever for any reason the Trustees may deem it desirable, the
Trustees may delegate the powers and duties of an officer or officers to any
other officer or officers or to any Trustee or Trustees.

ARTICLE VII
DIVIDENDS AND DISTRIBUTIONS

Subject to any applicable provisions of law and the Declaration, dividends
and distributions upon the Shares may be declared at such intervals as the
Trustees may determine, in cash, in securities or other property, or in
Shares, from any sources permitted by law, all as the Trustees shall from
time to time determine.

7
<PAGE>
Inasmuch as the computation of net income and net profits from the sales
of securities or other properties for federal income tax purposes may vary
from the computation thereof on the records of the Trust, the Trustees shall
have power, in their discretion, to distribute as income dividends and as
capital gain distributions, respectively, amounts sufficient to enable the
Trust to avoid or reduce liability for federal income taxes.

ARTICLE VIII
CERTIFICATES OF SHARES

SECTION 8.1. Certificates of Shares. Certificates for Shares of each
series or class of Shares shall be in such form and of such design as the
Trustees shall approve, subject to the right of the Trustees to change such
form and design at any time or from time to time, and shall be entered in the
records of the Trust as they are issued. Each such certificate shall bear a
distinguishing number; shall exhibit the holder's name and certify the number
of full Shares owned by such holder; shall be signed by or in the name of the
Trust by the President, or a Vice President, and countersigned by the
Secretary or an Assistant Secretary or the Treasurer and an Assistant
Treasurer of the Trust; shall be sealed with the seal; and shall contain such
recitals as may be required by law. Where any certificate is signed by a
Transfer Agent or by a Registrar, the signature of such officers and the seal
may be facsimile, printed or engraved. The Trust may, at its option,
determine not to issue a certificate or certificates to evidence Shares owned
of record by any Shareholder.

In case any officer or officers who shall have signed, or whose facsimile
signature or signatures shall appear on, any such certificate or certificates
shall cease to be such officer or officers of the Trust, whether because of
death, resignation or otherwise, before such certificate or certificates
shall have been delivered by the Trust, such certificate or certificates
shall, nevertheless, be adopted by the Trust and be issued and delivered as
though the person or persons who signed such certificate or certificates or
whose facsimile signature or signatures shall appear therein had not ceased
to be such officer or officers of the Trust.

No certificate shall be issued for any share until such share is fully
paid.

SECTION 8.2. Lost, Stolen, Destroyed and Mutilated Certificates. The
Trustees may direct a new certificate or certificates to be issued in place
of any certificate or certificates theretofore issued by the Trust alleged to
have been lost, stolen or destroyed, upon satisfactory proof of such loss,
theft, or destruction; and the Trustees may, in their discretion, require the
owner of the lost, stolen or destroyed certificate, or his legal
representative, to give to the Trust and to such Registrar, Transfer Agent
and/or Transfer Clerk as may be authorized or required to countersign such
new certificate or certificates, a bond in such sum and of such type as they
may direct, and with such surety or sureties, as they may direct, as
indemnity against any claim that may be against them or any of them on
account of or in connection with the alleged loss, theft or destruction of
any such certificate.

ARTICLE IX
CUSTODIAN

SECTION 9.1. Appointment and Duties. The Trust shall at times employ a
bank or trust company having capital, surplus and undivided profits of at
least five million dollars ($5,000,000) as custodian with authority as its
agent, but subject to such restrictions, limitations and other requirements,
if any, as may be contained in these By-Laws and the 1940 Act:

(1) to receive and hold the securities owned by the Trust and deliver
the same upon written or electronically transmitted order;

(2) to receive and receipt for any moneys due to the Trust and deposit
the same in its own banking department or elsewhere as the Trustees may
direct;

(3) to disburse such funds upon orders or vouchers;

8
<PAGE>
all upon such basis of compensation as may be agreed upon between the
Trustees and the custodian. If so directed by a Majority Shareholder Vote,
the custodian shall deliver and pay over all property of the Trust held by it
as specified in such vote.

The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of
the custodian and upon such terms and conditions as may be agreed upon
between the custodian and such sub-custodian and approved by the Trustees.

SECTION 9.2. Central Certificate System. Subject to such rules,
regulations and orders as the Commission may adopt, the Trustees may direct
the custodian to deposit all or any part of the securities owned by the Trust
in a system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, or such other person as
may be permitted by the Commission, or otherwise in accordance with the 1940
Act, pursuant to which system all securities of any particular class or
series of any issuer deposited within the system are treated as fungible and
may be transferred or pledged by bookkeeping entry without physical delivery
of such securities, provided that all such deposits shall be subject to
withdrawal only upon the order of the Trust.

ARTICLE X
WAIVER OF NOTICE

Whenever any notice of the time, place or purpose of any meeting of
Shareholders, Trustees, or of any committee is required to be given in
accordance with law or under the provisions of the Declaration or these
By-Laws, a waiver thereof in writing, signed by the person or persons
entitled to such notice and filed with the records of the meeting, whether
before or after the holding thereof, or actual attendance at the meeting of
shareholders, Trustees or committee, as the case may be, in person, shall be
deemed equivalent to the giving of such notice to such person.

ARTICLE XI
MISCELLANEOUS

SECTION 11.1. Location of Books and Records. The books and records of the
Trust may be kept outside the Commonwealth of Massachusetts at such place or
places as the Trustees may from time to time determine, except as otherwise
required by law.

SECTION 11.2. Record Date. The Trustees may fix in advance a date as the
record date for the purpose of determining the Shareholders entitled to (i)
receive notice of, or to vote at, any meeting of Shareholders, or (ii)
receive payment of any dividend or the allotment of any rights, or in order
to make a determination of Shareholders for any other proper purpose. The
record date, in any case, shall not be more than one hundred eighty (180)
days, and in the case of a meeting of Shareholders not less than ten (10)
days, prior to the date on which such meeting is to be held or the date on
which such other particular action requiring determination of Shareholders is
to be taken, as the case may be. In the case of a meeting of Shareholders,
the meeting date set forth in the notice to Shareholders accompanying the
proxy statement shall be the date used for purposes of calculating the 180
day or 10 day period, and any adjourned meeting may be reconvened without a
change in record date. In lieu of fixing a record date, the Trustees may
provide that the transfer books shall be closed for a stated period but not
to exceed, in any case, twenty (20) days. If the transfer books are closed
for the purpose of determining Shareholders entitled to notice of a vote at a
meeting of Shareholders, such books shall be closed for at least ten (10)
days immediately preceding the meeting.

SECTION 11.3. Seal. The Trustees shall adopt a seal, which shall be in
such form and shall have such inscription thereon as the Trustees may from
time to time provide. The seal of the Trust may be affixed to any document,
and the seal and its attestation may be lithographed, engraved or otherwise
printed on any document with the same force and effect as if it had been
imprinted and attested manually in the same manner and with the same effect
as if done by a Massachusetts business corporation under Massachusetts law.

9
<PAGE>
SECTION 11.4. Fiscal Year. The fiscal year of the Trust shall end on such
date as the Trustees may by resolution specify, and the Trustees may by
resolution change such date for future fiscal years at any time and from time
to time.

SECTION 11.5. Orders for Payment of Money. All orders or instructions for
the payment of money of the Trust, and all notes or other evidences of
indebtedness issued in the name of the Trust, shall be signed by such officer
or officers or such other person or persons as the Trustees may from time to
time designate, or as may be specified in or pursuant to the agreement
between the Trust and the bank or trust company appointed as Custodian of the
securities and funds of the Trust.

ARTICLE XII
COMPLIANCE WITH FEDERAL REGULATIONS

The Trustees are hereby empowered to take such action as they may deem to
be necessary, desirable or appropriate so that the Trust is or shall be in
compliance with any federal or state statute, rule or regulation with which
compliance by the Trust is required.

ARTICLE XIII
AMENDMENTS

These By-Laws may be amended, altered, or repealed, or new By-Laws may be
adopted, (a) by a Majority Shareholder Vote, or (b) by the Trustees;
provided, however, that no By-Law may be amended, adopted or repealed by the
Trustees if such amendment, adoption or repeal requires, pursuant to law, the
Declaration, or these By-Laws, a vote of the Shareholders. The Trustees shall
in no event adopt By-Laws which are in conflict with the Declaration, and any
apparent inconsistency shall be construed in favor of the related provisions
in the Declaration.

ARTICLE XIV
DECLARATION OF TRUST

The Declaration of Trust establishing Dean Witter Short-Term U.S. Treasury
Trust, dated June 4, 1991, a copy of which is on file in the office of the
Secretary of the Commonwealth of Massachusetts, provides that the name Dean
Witter Short-Term U.S. Treasury Trust refers to the Trustees under the
Declaration collectively as Trustees, but not as individuals or personally;
and no Trustee, Shareholder, officer, employee or agent of Dean Witter
Short-Term U.S. Treasury Trust shall be held to any personal liability, nor
shall resort be had to their private property for the satisfaction of any
obligation or claim or otherwise, in connection with the affairs of said Dean
Witter Short-Term U.S. Treasury Trust, but the Trust Estate only shall be
liable.

<PAGE>

INVESTMENT MANAGEMENT AGREEMENT

AGREEMENT made as of the 31st day of May, 1997, and amended as of April 30,
1998, by and between Dean Witter Short-Term U.S. Treasury Trust, an
unincorporated business trust organized under the laws of the Commonwealth of
Massachusetts (hereinafter called the "Fund"), and Dean Witter InterCapital
Inc., a Delaware corporation (hereinafter called the "Investment Manager"):

WHEREAS, The Fund is engaged in business as an open-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended (the "Act"); and

WHEREAS, The Investment Manager is registered as an investment adviser
under the Investment Advisers Act of 1940, and engages in the business of
acting as investment adviser; and

WHEREAS, The Fund desires to retain the Investment Manager to render
management and investment advisory services in the manner and on the terms and
conditions hereinafter set forth; and

WHEREAS, The Investment Manager desires to be retained to perform services
on said terms and conditions:

Now, Therefore, this Agreement

W I T N E S S E T H:

that in consideration of the premises and the mutual covenants hereinafter
contained, the Fund and the Investment Manager agree as follows:

1. The Fund hereby retains the Investment Manager to act as investment
manager of the Fund and, subject to the supervision of the Trustees, to
supervise the investment activities of the Fund as hereinafter set forth.
Without limiting the generality of the foregoing, the Investment Manager shall
obtain and evaluate such information and advice relating to the economy,
securities and commodities markets and securities and commodities as it deems
necessary or useful to discharge its duties hereunder; shall continuously
manage the assets of the Fund in a manner consistent with the investment
objectives and policies of the Fund; shall determine the securities and
commodities to be purchased, sold or otherwise disposed of by the Fund and the
timing of such purchases, sales and dispositions; and shall take such further
action, including the placing of purchase and sale orders on behalf of the
Fund, as the Investment Manager shall deem necessary or appropriate. The
Investment Manager shall also furnish to or place at the disposal of the Fund
such of the information, evaluations, analyses and opinions formulated or
obtained by the Investment Manager in the discharge of its duties as the Fund
may, from time to time, reasonably request.

2. The Investment Manager shall, at its own expense, maintain such staff
and employ or retain such personnel and consult with such other persons as it
shall from time to time determine to be necessary or useful to the performance
of its obligations under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of the Investment Manager shall be deemed to
include persons employed or otherwise retained by the Investment Manager to
furnish statistical and other factual data, advice regarding economic factors
and trends, information with respect to technical and scientific developments,
and such other information, advice and assistance as the Investment Manager may
desire. The Investment Manager shall, as agent for the Fund, maintain the
Fund's records and books of account (other than those maintained by the Fund's
transfer agent, registrar, custodian and other agencies). All such books and
records so maintained shall be the property of the Fund and, upon request
therefor, the Investment Manager shall surrender to the Fund such of the books
and records so requested.

3. The Fund will, from time to time, furnish or otherwise make available
to the Investment Manager such financial reports, proxy statements and other
information relating to the business and affairs of the Fund as the Investment
Manager may reasonably require in order to discharge its duties and obligations
hereunder.

4. The Investment Manager shall bear the cost of rendering the investment
management and supervisory services to be performed by it under this Agreement,
and shall, at its own expense, pay the compensation of the officers and
employees, if any, of the Fund who are also directors, officers or employees of
the Investment Manager, and provide such office space, facilities and equipment
and such clerical help and

<PAGE>

bookkeeping services as the Fund shall reasonably require in the conduct of its
business. The Investment Manager shall also bear the cost of telephone service,
heat, light, power and other utilities provided to the Fund.

5. The Fund assumes and shall pay or cause to be paid all other expenses
of the Fund, including without limitation: fees pursuant to any plan of
distribution that the Fund may adopt; the charges and expenses of any
registrar, any custodian or depository appointed by the Fund for the
safekeeping of its cash, portfolio securities or commodities and other
property, and any stock transfer or dividend agent or agents appointed by the
Fund; brokers' commissions chargeable to the Fund in connection with portfolio
transactions to which the Fund is a party; all taxes, including securities or
commodities issuance and transfer taxes, and fees payable by the Fund to
federal, state or other governmental agencies; the cost and expense of
engraving or printing certificates representing shares of the Fund; all costs
and expenses in connection with the registration and maintenance of
registration of the Fund and its shares with the Securities and Exchange
Commission and various states and other jurisdictions (including filing fees
and legal fees and disbursements of counsel); the cost and expense of printing,
including typesetting, and distributing prospectuses and statements of
additional information of the Fund and supplements thereto to the Fund's
shareholders; all expenses of shareholders' and Trustees' meetings and of
preparing, printing and mailing proxy statements and reports to shareholders;
fees and travel expenses of Trustees 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 the payment of
any dividend, distribution, withdrawal or redemption, whether in shares or in
cash; charges and expenses of any outside service used for pricing of the
Fund's shares; charges and expenses of legal counsel, including counsel to the
Trustees of the Fund who are not interested persons (as defined in the Act) of
the Fund or the Investment Manager, and of independent accountants, in
connection with any matter relating to the Fund; membership dues of industry
associations; interest payable on Fund borrowings; postage; insurance premiums
on property or personnel (including officers and Trustees) 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
related thereto); and all other charges and costs of the Fund's operation
unless otherwise explicitly provided herein.

6. For the services to be rendered, the facilities furnished, and the
expenses assumed by the Investment Manager, the Fund shall pay to the
Investment Manager monthly compensation determined by applying the annual rate
of 0.35% to the Fund's daily net assets. Except as hereinafter set forth,
compensation under this Agreement shall be calculated and accrued daily and the
amounts of the daily accruals shall be paid monthly. Such calculations shall be
made by applying 1/365ths of the annual rates to the Fund's net assets each day
determined as of the close of business on that day or the last previous
business day. If this Agreement becomes effective subsequent to the first day
of a month or shall terminate before the last day of a month, compensation for
that part of the month this Agreement is in effect shall be prorated in a
manner consistent with the calculation of the fees as set forth above.

Subject to the provisions of paragraph 7 hereof, payment of the Investment
Manager's compensation for the preceding month shall be made as promptly as
possible after completion of the computations contemplated by paragraph 7
hereof.

7. In the event the operating expenses of the Fund, including amounts
payable to the Investment Manager pursuant to paragraph 6 hereof, for any
fiscal year ending on a date on which this Agreement is in effect, exceed the
expense limitations applicable to the Fund imposed by state securities laws or
regulations thereunder, as such limitations may be raised or lowered from time
to time, the Investment Manager shall reduce its management fee to the extent
of such excess and, if required, pursuant to any such laws or regulations, will
reimburse the Fund for annual operating expenses in excess of any expense
limitation that may be applicable; provided, however, there shall be excluded
from such expenses the amount of any interest, taxes, brokerage commissions,
distribution fees and extraordinary expenses (including but not limited to
legal claims and liabilities and litigation costs and any indemnification
related thereto) paid or payable by the Fund. Such reduction, if any, shall be
computed and accrued daily, shall be settled on a monthly basis, and shall be
based upon the expense limitation applicable to the Fund as at the end of the
last

<PAGE>

business day of the month. Should two or more such expense limitations be
applicable as at the end of the last business day of the month, that expense
limitation which results in the largest reduction in the Investment Manager's
fee shall be applicable.

For purposes of this provision, should any applicable expense limitation be
based upon the gross income of the Fund, such gross income shall include, but
not be limited to, interest on debt securities in the Fund's portfolio accrued
to and including the last day of the Fund's fiscal year, and dividends declared
on equity securities in the Fund's portfolio, the record dates for which fall
on or prior to the last day of such fiscal year, but shall not include gains
from the sale of securities.

8. The Investment Manager will use its best efforts in the supervision and
management of the investment activities of the Fund, but in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations hereunder, the Investment Manager shall not be liable to the Fund
or any of its investors for any error of judgment or mistake of law or for any
act or omission by the Investment Manager or for any losses sustained by the
Fund or its investors.

9. Nothing contained in this Agreement shall prevent the Investment
Manager or any affiliated person of the Investment Manager from acting as
investment adviser or manager for any other person, firm or corporation and
shall not in any way bind or restrict the Investment Manager or any such
affiliated person from buying, selling or trading any securities or commodities
for their own accounts or for the account of others for whom they may be
acting. Nothing in this Agreement shall limit or restrict the right of any
Trustee, officer or employee of the Investment Manager to engage in any other
business or to devote his or her time and attention in part to the management
or other aspects of any other business whether of a similar or dissimilar
nature.

10. This Agreement shall remain in effect until April 30, 1999 and from
year to year thereafter provided such continuance is approved at least annually
by the vote of holders of a majority, as defined in the Investment Company Act
of 1940, as amended (the "Act"), of the outstanding voting securities of the
Fund or by the Trustees of the Fund; provided that in either event such
continuance is also approved annually by the vote of a majority of the Trustees
of the Fund who are not parties to this Agreement or "interested persons" (as
defined in the Act) of any such party, which vote must be cast in person at a
meeting called for the purpose of voting on such approval; provided, however,
that (a) the Fund may, at any time and without the payment of any penalty,
terminate this Agreement upon thirty days' written notice to the Investment
Manager, either by majority vote of the Trustees of the Fund or by the vote of
a majority of the outstanding voting securities of the Fund; (b) this Agreement
shall immediately terminate in the event of its assignment (to the extent
required by the Act and the rules thereunder) unless such automatic
terminations shall be prevented by an exemptive order of the Securities and
Exchange Commission; and (c) the Investment Manager may terminate this
Agreement without payment of penalty on thirty days' written notice to the
Fund. Any notice under this Agreement shall be given in writing, addressed and
delivered, or mailed post-paid, to the other party at the principal office of
such party.

11. This Agreement may be amended by the parties without the vote or
consent of the shareholders of the Fund to supply any omission, to cure,
correct or supplement any ambiguous, defective or inconsistent provision
hereof, or if they deem it necessary to conform this Agreement to the
requirements of applicable federal laws or regulations, but neither the Fund
nor the Investment Manager shall be liable for failing to do so.

12. This Agreement shall be construed in accordance with the laws of the
State of New York and the applicable provisions of the Act. To the extent the
applicable law of the State of New York, or any of the provisions herein,
conflicts with the applicable provisions of the Act, the latter shall control.

13. The Investment Manager and the Fund each agree that the name "Dean
Witter," which comprises a component of the Fund's name, is a property right of
Dean Witter Reynolds Inc. The Fund agrees and consents that (i) it will only
use the name "Dean Witter" as a component of its name and for no other purpose,
(ii) it will not purport to grant to any third party the right to use the name
"Dean Witter" for any purpose, (iii) the Investment Manager or its parent,
Morgan Stanley Dean Witter & Co., or any corporate affiliate of the Investment
Manager's parent, may use or grant to others the right to use the name "Dean

<PAGE>

Witter," or any combination or abbreviation thereof, as all or a portion of a
corporate or business name or for any commercial purpose, including a grant of
such right to any other investment company, (iv) at the request of the
Investment Manager or its parent, the Fund will take such action as may be
required to provide its consent to the use of the name "Dean Witter," or any
combination or abbreviation thereof, by the Investment Manager or its parent or
any corporate affiliate of the Investment Manager's parent, or by any person to
whom the Investment Manager or its parent or any corporate affiliate of the
Investment Manager's parent shall have granted the right to such use, and (v)
upon the termination of any investment advisory agreement into which the
Investment Manager and the Fund may enter, or upon termination of affiliation
of the Investment Manager with its parent, the Fund shall, upon request by the
Investment Manager or its parent, cease to use the name "Dean Witter" as a
component of its name, and shall not use the name, or any combination or
abbreviation thereof, as a part of its name or for any other commercial
purpose, and shall cause its officers, Trustees and shareholders to take any
and all actions which the Investment Manager or its parent may request to
effect the foregoing and to reconvey to the Investment Manager or its parent
any and all rights to such name.

14. The Declaration of Trust establishing Dean Witter Short-Term U.S.
Treasury Trust, dated June 4, 1991, a copy of which, together with all
amendments thereto (the "Declaration"), is on file in the office of the
Secretary of the Commonwealth of Massachusetts, provides that the name Dean
Witter Short-Term U.S. Treasury Trust refers to the Trustees under the
Declaration collectively as Trustees, but not as individuals or personally; and
no Trustee, shareholder, officer, employee or agent of Dean Witter Short-Term
U.S. Treasury Trust shall be held to any personal liability, nor shall resort
be had to their private property for the satisfaction of any obligation or
claim or otherwise, in connection with the affairs of said Dean Witter
Short-Term U.S. Treasury Trust, but the Trust Estate only shall be liable.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement, as amended, on April 30, 1998 in New York, New York.

DEAN WITTER SHORT-TERM
U.S. TREASURY TRUST

By: /s/ BARRY FINK
..................................

Attest:

/s/ FRANK BRUTTOMESSO
........................................

DEAN WITTER INTERCAPITAL INC.

By: /s/ CHARLES A. FIUMEFREDDO
..................................
Attest:

/s/ MARILYN K. CRANNEY
........................................

<PAGE>

AMENDED AND RESTATED
TRANSFER AGENCY AND SERVICE AGREEMENT

with

MORGAN STANLEY DEAN WITTER TRUST FSB

[open-end funds]

<PAGE>

TABLE OF CONTENTS
-----------------

Page
----
Article 1 Terms of Appointment.............................................. 1

Article 2 Fees and Expenses................................................. 5

Article 3 Representations and Warranties of MSDW TRUST...................... 6

Article 4 Representations and Warranties of the Fund........................ 7

Article 5 Duty of Care and Indemnification.................................. 7

Article 6 Documents and Covenants of the Fund and MSDW TRUST................10

Article 7 Duration and Termination of Agreement.............................13

Article 8 Assignment........................................................14

Article 9 Affiliations......................................................14

Article 10 Amendment.........................................................15

Article 11 Applicable Law....................................................15

Article 12 Miscellaneous.....................................................15

Article 13 Merger of Agreement...............................................17

Article 14 Personal Liability................................................17

-i-

<PAGE>

AMENDED AND RESTATED TRANSFER AGENCY AND SERVICE AGREEMENT
----------------------------------------------------------

AMENDED AND RESTATED AGREEMENT made as of the 22nd day

of June, 1998 by and between each of the Funds listed on the signature pages

hereof, each of such Funds acting severally on its own behalf and not jointly

with any of such other Funds (each such Fund hereinafter referred to as the

"Fund"), each such Fund having its principal office and place of business at

Two World Trade Center, New York, New York, 10048, and MORGAN STANLEY DEAN

WITTER TRUST FSB ("MSDW TRUST"), a federally chartered savings bank, having its

principal office and place of business at Harborside Financial Center, Plaza

Two, Jersey City, New Jersey 07311.

WHEREAS, the Fund desires to appoint MSDW TRUST as its

transfer agent, dividend disbursing agent and shareholder servicing agent

and MSDW TRUST desires to accept such appointment;

NOW THEREFORE, in consideration of the mutual covenants

herein contained, the parties hereto agree as follows:

Article 1 Terms of Appointment; Duties of MSDW TRUST
------------------------------------------

1.1 Subject to the terms and conditions set forth in this Agreement,

the Fund hereby employs and appoints MSDW TRUST to act as, and MSDW TRUST

agrees to act as, the transfer agent for each series and class of shares of the

Fund, whether now or hereafter authorized or issued ("Shares"), dividend

disbursing agent and shareholder servicing agent in

-1-

<PAGE>

connection with any accumulation, open-account or similar plans provided to the

holders of such Shares ("Shareholders") and set out in the currently effective

prospectus and statement of additional information ("prospectus") of the Fund,

including without limitation any periodic investment plan or periodic

withdrawal program.

1.2 MSDW TRUST agrees that it will perform the following services:

(a) In accordance with procedures established from time to time

by agreement between the Fund and MSDW TRUST, MSDW TRUST shall:

(i) Receive for acceptance, orders for the purchase of Shares,

and promptly deliver payment and appropriate documentation therefor to the

custodian of the assets of the Fund (the "Custodian");

(ii) Pursuant to purchase orders, issue the appropriate number

of Shares and issue certificates therefor or hold such Shares in book form in

the appropriate Shareholder account;

(iii) Receive for acceptance redemption requests and redemption

directions and deliver the appropriate documentation therefor to the Custodian;

(iv) At the appropriate time as and when it receives monies paid

to it by the Custodian with respect to any redemption, pay over or cause to be

paid over in the appropriate manner such monies as instructed by the redeeming

Shareholders;

-2-

<PAGE>

(v) Effect transfers of Shares by the registered owners thereof

upon receipt of appropriate instructions;

(vi) Prepare and transmit payments for dividends and

distributions declared by the Fund;

(vii) Calculate any sales charges payable by a Shareholder on

purchases and/or redemptions of Shares of the Fund as such charges may be

reflected in the prospectus;

(viii) Maintain records of account for and advise the Fund and

its Shareholders as to the foregoing; and

(ix) Record the issuance of Shares of the Fund and maintain

pursuant to Rule 17Ad-10(e) under the Securities Exchange Act of 1934 ("1934

Act") a record of the total number of Shares of the Fund which are authorized,

based upon data provided to it by the Fund, and issued and outstanding. MSDW

TRUST shall also provide to the Fund on a regular basis the total number of

Shares that are authorized, issued and outstanding and shall notify the Fund in

case any proposed issue of Shares by the Fund would result in an overissue. In

case any issue of Shares would result in an overissue, MSDW TRUST shall refuse

to issue such Shares and shall not countersign and issue any certificates

requested for such Shares. When recording the issuance of Shares, MSDW TRUST

shall have no obligation to take cognizance of any Blue Sky laws relating to

the issue of sale of such Shares, which functions shall be the sole

responsibility of the Fund.

(b) In addition to and not in lieu of the services set forth

in the above paragraph (a), MSDW TRUST shall:

-3-

<PAGE>

(i) perform all of the customary services of a transfer agent,

dividend disbursing agent and, as relevant, shareholder servicing agent in

connection with dividend reinvestment, accumulation, open-account or similar

plans (including without limitation any periodic investment plan or periodic

withdrawal program), including but not limited to, maintaining all Shareholder

accounts, preparing Shareholder meeting lists, mailing proxies, receiving and

tabulating proxies, mailing shareholder reports and prospectuses to current

Shareholders, withholding taxes on U.S. resident and non-resident alien

accounts, preparing and filing appropriate forms required with respect to

dividends and distributions by federal tax authorities for all Shareholders,

preparing and mailing confirmation forms and statements of account to

Shareholders for all purchases and redemptions of Shares and other confirmable

transactions in Shareholder accounts, preparing and mailing activity statements

for Shareholders and providing Shareholder account information;

(ii) open any and all bank accounts which may be necessary or

appropriate in order to provide the foregoing services; and

(iii) provide a system that will enable the Fund to monitor the

total number of Shares sold in each State or other jurisdiction.

(i) identify to MSDW TRUST in writing those transactions and

assets to be treated as exempt from Blue Sky reporting for each State; and

-4-

<PAGE>

(ii) verify the inclusion on the system prior to activation of

each State in which Fund shares may be sold and thereafter monitor the daily

purchases and sales for shareholders in each State. The responsibility of MSDW

TRUST for the Fund's status under the securities laws of any State or other

jurisdiction is limited to the inclusion on the system of each State as to

which the Fund has informed MSDW TRUST that shares may be sold in compliance

with state securities laws and the reporting of purchases and sales in each

such State to the Fund as provided above and as agreed from time to time by the

Fund and MSDW TRUST.

(d) MSDW TRUST shall provide such additional services and

functions not specifically described herein as may be mutually agreed between

MSDW TRUST and the Fund. Procedures applicable to such services may be

established from time to time by agreement between the Fund and MSDW TRUST.

Article 2 Fees and Expenses
-----------------

2.1 For performance by MSDW TRUST pursuant to this Agreement,

each Fund agrees to pay MSDW TRUST an annual maintenance fee for each

Shareholder account and certain transactional fees, if applicable, as set out

in the respective fee schedule attached hereto as Schedule A. Such fees and

out-of-pocket expenses and advances identified under Section 2.2 below may be

changed from time to time subject to mutual written agreement between the Fund

and MSDW TRUST.

2.2 In addition to the fees paid under Section 2.1 above, the

Fund agrees to reimburse MSDW TRUST for out of pocket expenses in connection

with the services rendered

-5-

<PAGE>

by MSDW TRUST hereunder. In addition, any other expenses incurred by MSDW TRUST

at the request or with the consent of the Fund will be reimbursed by the Fund.

2.3 The Fund agrees to pay all fees and reimbursable expenses

within a reasonable period of time following the mailing of the respective

billing notice. Postage for mailing of dividends, proxies, Fund reports and

other mailings to all Shareholder accounts shall be advanced to MSDW TRUST by

the Fund upon request prior to the mailing date of such materials.

Article 3 Representations and Warranties of MSDW TRUST
--------------------------------------------

MSDW TRUST represents and warrants to the Fund that:

3.1 It is a federally chartered savings bank whose principal

office is in New Jersey.

3.2 It is and will remain registered with the U.S. Securities

and Exchange Commission ("SEC") as a Transfer Agent pursuant to the

requirements of Section 17A of the 1934 Act.

3.3 It is empowered under applicable laws and by its charter and

By-Laws to enter into and perform this Agreement.

3.4 All requisite corporate proceedings have been taken to

authorize it to enter into and perform this Agreement.

3.5 It has and will continue to have access to the necessary

facilities, equipment and personnel to perform its duties and obligations under

this Agreement.

-6-
<PAGE>

Article 4 Representations and Warranties of the Fund
------------------------------------------

The Fund represents and warrants to MSDW TRUST that:

4.1 It is a corporation duly organized and existing and in good

standing under the laws of Delaware or Maryland or a trust duly organized and

existing and in good standing under the laws of Massachusetts, as the case may

be.

4.2 It is empowered under applicable laws and by its Articles of

Incorporation or Declaration of Trust, as the case may be, and under its

By-Laws to enter into and perform this Agreement.

4.3 All corporate proceedings necessary to authorize it to enter

into and perform this Agreement have been taken.

4.4 It is an investment company registered with the SEC under

the Investment Company Act of 1940, as amended (the "1940 Act").

4.5 A registration statement under the Securities Act of 1933

(the "1933 Act") is currently effective and will remain effective, and

appropriate state securities law filings have been made and will continue to be

made, with respect to all Shares of the Fund being offered for sale.

Article 5 Duty of Care and Indemnification
--------------------------------

5.1 MSDW TRUST shall not be responsible for, and the Fund shall

indemnify and hold MSDW TRUST harmless from and against, any and all losses,

damages, costs,

-7-

<PAGE>

charges, counsel fees, payments, expenses and liability arising out of or

attributable to:

(a) All actions of MSDW TRUST or its agents or subcontractors

required to be taken pursuant to this Agreement, provided that such actions are

taken in good faith and without negligence or willful misconduct.

(b) The Fund's refusal or failure to comply with the terms of

this Agreement, or which arise out of the Fund's lack of good faith, negligence

or willful misconduct or which arise out of breach of any representation or

warranty of the Fund hereunder.

subcontractors of information, records and documents which (i) are received by

MSDW TRUST or its agents or subcontractors and furnished to it by or on behalf

of the Fund, and (ii) have been prepared and/or maintained by the Fund or any

other person or firm on behalf of the Fund.

(d) The reliance on, or the carrying out by MSDW TRUST or its

agents or subcontractors of, any instructions or requests of the Fund.

(e) The offer or sale of Shares in violation of any requirement

under the federal securities laws or regulations or the securities or Blue Sky

laws of any State or other jurisdiction that notice of offering of such Shares

in such State or other jurisdiction or in violation of any stop order or other

determination or ruling by any federal agency or any State or other

jurisdiction with respect to the offer or sale of such Shares in such State or

other jurisdiction.

-8-

<PAGE>

5.2 MSDW TRUST shall indemnify and hold the Fund harmless from

or against any and all losses, damages, costs, charges, counsel fees, payments,

expenses and liability arising out of or attributable to any action or failure

or omission to act by MSDW TRUST as a result of the lack of good faith,

negligence or willful misconduct of MSDW TRUST, its officers, employees or

agents.

5.3 At any time, MSDW TRUST may apply to any officer of the Fund

for instructions, and may consult with legal counsel to the Fund, with respect

to any matter arising in connection with the services to be performed by MSDW

TRUST under this Agreement, and MSDW TRUST and its agents or subcontractors

shall not be liable and shall be indemnified by the Fund for any action taken

or omitted by it in reliance upon such instructions or upon the opinion of such

counsel. MSDW TRUST, its agents and subcontractors shall be protected and

indemnified in acting upon any paper or document furnished by or on behalf of

the Fund, reasonably believed to be genuine and to have been signed by the

proper person or persons, or upon any instruction, information, data, records

or documents provided to MSDW TRUST or its agents or subcontractors by machine

readable input, telex, CRT data entry or other similar means authorized by the

Fund, and shall not be held to have notice of any change of authority of any

person, until receipt of written notice thereof from the Fund. MSDW TRUST, its

agents and subcontractors shall also be protected and indemnified in

recognizing stock certificates which are reasonably believed to bear the proper

manual or facsimile signature of the officers of the Fund, and the proper

countersignature of any former transfer agent or registrar, or of a co-transfer

agent or co-registrar.

-9-

<PAGE>

5.4 In the event either party is unable to perform its

obligations under the terms of this Agreement because of acts of God, strikes,

equipment or transmission failure or damage reasonably beyond its control, or

other causes reasonably beyond its control, such party shall not be liable for

damages to the other for any damages resulting from such failure to perform or

otherwise from such causes.

5.5 Neither party to this Agreement shall be liable to the other

party for consequential damages under any provision of this Agreement or for

any act or failure to act hereunder.

5.6 In order that the indemnification provisions contained in

this Article 5 shall apply, upon the assertion of a claim for which either

party may be required to indemnify the other, the party seeking indemnification

shall promptly notify the other party of such assertion, and shall keep the

other party advised with respect to all developments concerning such claim. The

party who may be required to indemnify shall have the option to participate

with the party seeking indemnification in the defense of such claim. The party

seeking indemnification shall in no case confess any claim or make any

compromise in any case in which the other party may be required to indemnify it

except with the other party's prior written consent.

Article 6 Documents and Covenants of the Fund and MSDW TRUST
--------------------------------------------------

6.1 The Fund shall promptly furnish to MSDW TRUST the

following, unless previously furnished to Dean Witter Trust Company, the prior

transfer agent of the Fund:

-10-

<PAGE>

(a) If a corporation:

(i) A certified copy of the resolution of the Board of Directors

of the Fund authorizing the appointment of MSDW TRUST and the execution and

delivery of this Agreement;

(ii) A certified copy of the Articles of Incorporation and

By-Laws of the Fund and all amendments thereto;

(iii) Certified copies of each vote of the Board of Directors

designating persons authorized to give instructions on behalf of the Fund and

signature cards bearing the signature of any officer of the Fund or any other

person authorized to sign written instructions on behalf of the Fund;

(iv) A specimen of the certificate for Shares of the Fund in the

form approved by the Board of Directors, with a certificate of the Secretary of

the Fund as to such approval;

(b) If a business trust:

(i) A certified copy of the resolution of the Board of Trustees

of the Fund authorizing the appointment of MSDW TRUST and the execution and

delivery of this Agreement;

(ii) A certified copy of the Declaration of Trust and By-Laws of

the Fund and all amendments thereto;

-11-

<PAGE>

(iii) Certified copies of each vote of the Board of Trustees

designating persons authorized to give instructions on behalf of the Fund and

signature cards bearing the signature of any officer of the Fund or any other

person authorized to sign written instructions on behalf of the Fund;

(iv) A specimen of the certificate for Shares of the Fund in the

form approved by the Board of Trustees, with a certificate of the Secretary of

the Fund as to such approval;

supplements thereto filed with the SEC pursuant to the requirements of the

1933 Act or the 1940 Act;

(d) All account application forms or other documents relating to

Shareholder accounts and/or relating to any plan, program or service offered or

to be offered by the Fund; and

(e) Such other certificates, documents or opinions as MSDW TRUST

deems to be appropriate or necessary for the proper performance of its duties.

6.2 MSDW TRUST hereby agrees to establish and maintain

facilities and procedures reasonably acceptable to the Fund for safekeeping of

Share certificates, check forms and facsimile signature imprinting devices, if

any; and for the preparation or use, and for keeping account of, such

certificates, forms and devices.

-12-

<PAGE>

6.3 MSDW TRUST shall prepare and keep records relating to the

services to be performed hereunder, in the form and manner as it may deem

advisable and as required by applicable laws and regulations. To the extent

required by Section 31 of the 1940 Act, and the rules and regulations

thereunder, MSDW TRUST agrees that all such records prepared or maintained by

MSDW TRUST relating to the services performed by MSDW TRUST hereunder are the

property of the Fund and will be preserved, maintained and made available in

accordance with such Section 31 of the 1940 Act, and the rules and regulations

thereunder, and will be surrendered promptly to the Fund on and in accordance

with its request.

6.4 MSDW TRUST and the Fund agree that all books, records,

information and data pertaining to the business of the other party which are

exchanged or received pursuant to the negotiation or the carrying out of this

Agreement shall remain confidential and shall not be voluntarily disclosed to

any other person except as may be required by law or with the prior consent of

MSDW TRUST and the Fund.

6.5 In case of any request or demands for the inspection of the

Shareholder records of the Fund, MSDW TRUST will endeavor to notify the Fund

and to secure instructions from an authorized officer of the Fund as to such

inspection. MSDW TRUST reserves the right, however, to exhibit the Shareholder

records to any person whenever it is advised by its counsel that it may be held

liable for the failure to exhibit the Shareholder records to such person.

Article 7 Duration and Termination of Agreement
-------------------------------------

7.1 This Agreement shall remain in full force and effect until

August 1,

-13-

<PAGE>

2000 and from year-to-year thereafter unless terminated by either party as

provided in Section 7.2 hereof.

7.2 This Agreement may be terminated by the Fund on 60 days

written notice, and by MSDW TRUST on 90 days written notice, to the other party

without payment of any penalty.

7.3 Should the Fund exercise its right to terminate, all out-of-

pocket expenses associated with the movement of records and other materials

will be borne by the Fund. Additionally, MSDW TRUST reserves the right to

charge for any other reasonable fees and expenses associated with such

termination.

Article 8 Assignment
-----------

8.1 Except as provided in Section 8.3 below, neither this

Agreement nor any rights or obligations hereunder may be assigned by either

party without the written consent of the other party.

8.2 This Agreement shall inure to the benefit of and be binding

upon the parties and their respective permitted successors and assigns.

8.3 MSDW TRUST may, in its sole discretion and without further

consent by the Fund, subcontract, in whole or in part, for the performance of

its obligations and duties hereunder with any person or entity including but

not limited to companies which are affiliated with MSDW TRUST; provided,

however, that such person or entity has and maintains the qualifications, if

any, required to perform such obligations and duties, and that MSDW TRUST

-14-

<PAGE>

shall be as fully responsible to the Fund for the acts and omissions of any

agent or subcontractor as it is for its own acts or omissions under this

Agreement.

Article 9 Affiliations
------------

9.1 MSDW TRUST may now or hereafter, without the consent of or

notice to the Fund, function as transfer agent and/or shareholder servicing

agent for any other investment company registered with the SEC under the 1940

Act and for any other issuer, including without limitation any investment

company whose adviser, administrator, sponsor or principal underwriter is or

may become affiliated with Morgan Stanley Dean Witter & Co. or any of its

direct or indirect subsidiaries or affiliates.

9.2 It is understood and agreed that the Directors or Trustees

(as the case may be), officers, employees, agents and shareholders of the Fund,

and the directors, officers, employees, agents and shareholders of the Fund's

investment adviser and/or distributor, are or may be interested in MSDW TRUST

as directors, officers, employees, agents and shareholders or otherwise, and

that the directors, officers, employees, agents and shareholders of MSDW TRUST

may be interested in the Fund as Directors or Trustees (as the case may be),

officers, employees, agents and shareholders or otherwise, or in the investment

adviser and/or distributor as directors, officers, employees, agents,

shareholders or otherwise.

Article 10 Amendment
---------

10.1 This Agreement may be amended or modified by a written

agreement executed by both parties and authorized or approved by a resolution

of the Board of Directors or the Board of Trustees (as the case may be) of the

Fund.

-15-

<PAGE>

Article 11 Applicable Law
--------------

11.1 This Agreement shall be construed and the provisions

thereof interpreted under and in accordance with the laws of the State of New

York.

Article 12 Miscellaneous
-------------

12.1 In the event that one or more additional investment

companies managed or administered by Morgan Stanley Dean Witter Advisors Inc.

or any of its affiliates ("Additional Funds") desires to retain MSDW TRUST to

act as transfer agent, dividend disbursing agent and/or shareholder servicing

agent, and MSDW TRUST desires to render such services, such services shall be

provided pursuant to a letter agreement, substantially in the form of Exhibit A

hereto, between MSDW TRUST and each Additional Fund.

12.2 In the event of an alleged loss or destruction of any Share

certificate, no new certificate shall be issued in lieu thereof, unless there

shall first be furnished to MSDW TRUST an affidavit of loss or non-receipt by

the holder of Shares with respect to which a certificate has been lost or

destroyed, supported by an appropriate bond satisfactory to MSDW TRUST and the

Fund issued by a surety company satisfactory to MSDW TRUST, except that MSDW

TRUST may accept an affidavit of loss and indemnity agreement executed by the

registered holder (or legal representative) without surety in such form as MSDW

TRUST deems appropriate indemnifying MSDW TRUST and the Fund for the issuance

of a replacement certificate, in cases where the alleged loss is in the amount

of $1,000 or less.

12.3 In the event that any check or other order for payment of

money on the

-16-

<PAGE>

account of any Shareholder or new investor is returned unpaid for any reason,

MSDW TRUST will (a) give prompt notification to the Fund's distributor

("Distributor") (or to the Fund if the Fund acts as its own distributor) of

such non-payment; and (b) take such other action, including imposition of a

reasonable processing or handling fee, as MSDW TRUST may, in its sole

discretion, deem appropriate or as the Fund and, if applicable, the Distributor

may instruct MSDW TRUST.

12.4 Any notice or other instrument authorized or required by

this Agreement to be given in writing to the Fund or to MSDW TRUST shall be

sufficiently given if addressed to that party and received by it at its office

set forth below or at such other place as it may from time to time designate in

writing.

To the Fund:

[Name of Fund]
Two World Trade Center
New York, New York 10048

Attention: General Counsel

To MSDW TRUST:

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

Attention: President

Article 13 Merger of Agreement
-------------------

13.1 This Agreement constitutes the entire agreement between

the parties hereto and supersedes any prior agreement with respect to the

subject matter hereof whether oral or written.

-17-

<PAGE>

Article 14 Personal Liability
------------------

14.1 In the case of a Fund organized as a Massachusetts business

trust, a copy of the Declaration of Trust of the Fund is on file with the

Secretary of The Commonwealth of Massachusetts, and notice is hereby given that

this instrument is executed on behalf of the Board of Trustees of the Fund as

Trustees and not individually and that the obligations of this instrument are

not binding upon any of the Trustees or shareholders individually but are

binding only upon the assets and property of the Fund; provided, however, that

the Declaration of Trust of the Fund provides that the assets of a particular

Series of the Fund shall under no circumstances be charged with liabilities

attributable to any other Series of the Fund and that all persons extending

credit to, or contracting with or having any claim against, a particular Series

of the Fund shall look only to the assets of that particular Series for payment

of such credit, contract or claim.

IN WITNESS WHEREOF, the parties hereto have caused this
Amended and Restated Agreement to be executed in their names and on their
behalf by and through their duly authorized officers, as of the day and year
first above written.

MORGAN STANLEY DEAN WITTER FUNDS
--------------------------------

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

1. Morgan Stanley Dean Witter Liquid Asset Fund Inc.
2. Active Assets Money Trust
3. Morgan Stanley Dean Witter U.S. Government Money Market Trust
4. Active Assets Government Securities Trust
5. Morgan Stanley Dean Witter Tax-Free Daily Income Trust
6. Active Assets Tax-Free Trust
7. Morgan Stanley Dean Witter California Tax-Free Daily Income Trust
8. Morgan Stanley Dean Witter New York Municipal Money Market Trust
9. Active Assets California Tax-Free Trust

-18-

<PAGE>

EQUITY FUNDS
------------

10. Morgan Stanley Dean Witter American Value Fund
11. Morgan Stanley Dean Witter Mid-Cap Growth Fund
12. Morgan Stanley Dean Witter Dividend Growth Securities Inc.
13. Morgan Stanley Dean Witter Capital Growth Securities
14. Morgan Stanley Dean Witter Global Dividend Growth Securities
15. Morgan Stanley Dean Witter Income Builder Fund
16. Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
17. Morgan Stanley Dean Witter Precious Metals and Minerals Trust
18. Morgan Stanley Dean Witter Developing Growth Securities Trust
19. Morgan Stanley Dean Witter Health Sciences Trust
20. Morgan Stanley Dean Witter Capital Appreciation Fund
21. Morgan Stanley Dean Witter Information Fund
22. Morgan Stanley Dean Witter Value-Added Market Series
23. Morgan Stanley Dean Witter European Growth Fund Inc.
24. Morgan Stanley Dean Witter Pacific Growth Fund Inc.
25. Morgan Stanley Dean Witter International SmallCap Fund
26. Morgan Stanley Dean Witter Japan Fund
27. Morgan Stanley Dean Witter Utilities Fund
28. Morgan Stanley Dean Witter Global Utilities Fund
29. Morgan Stanley Dean Witter Special Value Fund
30. Morgan Stanley Dean Witter Financial Services Trust
31. Morgan Stanley Dean Witter Market Leader Trust
32. Morgan Stanley Dean Witter Fund of Funds
33. Morgan Stanley Dean Witter S&P 500 Index Fund
34. Morgan Stanley Dean Witter Competitive Edge Fund
35. Morgan Stanley Dean Witter Mid-Cap Dividend Growth Securities
36. Morgan Stanley Dean Witter Equity Fund
37. Morgan Stanley Dean Witter Growth Fund

BALANCED FUNDS
--------------

38. Morgan Stanley Dean Witter Balanced Growth Fund
39. Morgan Stanley Dean Witter Balanced Income Trust

ASSET ALLOCATION FUNDS
----------------------

40. Morgan Stanley Dean Witter Strategist Fund
41. Dean Witter Global Asset Allocation Fund

-19-

<PAGE>

FIXED INCOME FUNDS
------------------

42. Morgan Stanley Dean Witter High Yield Securities Inc.
43. Morgan Stanley Dean Witter High Income Securities
44. Morgan Stanley Dean Witter Convertible Securities Trust
45. Morgan Stanley Dean Witter Intermediate Income Securities
46. Morgan Stanley Dean Witter Short-Term Bond Fund
47. Morgan Stanley Dean Witter World Wide Income Trust
48. Morgan Stanley Dean Witter Global Short-Term Income Fund Inc.
49. Morgan Stanley Dean Witter Diversified Income Trust
50. Morgan Stanley Dean Witter U.S. Government Securities Trust
51. Morgan Stanley Dean Witter Federal Securities Trust
52. Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
53. Morgan Stanley Dean Witter Intermediate Term U.S. Treasury Trust
54. Morgan Stanley Dean Witter Tax-Exempt Securities Trust
55. Morgan Stanley Dean Witter Limited Term Municipal Trust
56. Morgan Stanley Dean Witter California Tax-Free Income Fund
57. Morgan Stanley Dean Witter New York Tax-Free Income Fund
58. Morgan Stanley Dean Witter Hawaii Municipal Trust
59. Morgan Stanley Dean Witter Multi-State Municipal Series Trust
60. Morgan Stanley Dean Witter Select Municipal Reinvestment Fund

SPECIAL PURPOSE FUNDS
---------------------

61. Dean Witter Retirement Series
62. Morgan Stanley Dean Witter Variable Investment Series
63. Morgan Stanley Dean Witter Select Dimensions Investment Series

TCW/DW FUNDS
------------

64. TCW/DW North American Government Income Trust
65. TCW/DW Latin American Growth Fund
66. TCW/DW Income and Growth Fund
67. TCW/DW Small Cap Growth Fund
68. TCW/DW Total Return Trust

-20-

<PAGE>

69. TCW/DW Global Telecom Trust
70. TCW/DW Mid-Cap Equity Trust
71. TCW/DW Emerging Markets Opportunities Trust

By:_________________________________
Barry Fink
Vice President and General Counsel

ATTEST:

________________________
Assistant Secretary

MORGAN STANLEY DEAN WITTER TRUST FSB

By:_________________________________
John Van Heuvelen
President

ATTEST:

________________________
Executive Vice President

-21-

<PAGE>

Exhibit A
---------

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

Gentlemen:

The undersigned, (inset name of investment company) a

(Massachusetts business trust/Maryland corporation) (the "Fund"), desires to

employ and appoint Morgan Stanley Dean Witter Trust FSB ("MSDW TRUST") to act

as transfer agent for each series and class of shares of the Fund, whether now

or hereafter authorized or issued ("Shares"), dividend disbursing agent and

shareholder servicing agent, registrar and agent in connection with any

accumulation, open-account or similar plan provided to the holders of Shares,

including without limitation any periodic investment plan or periodic

withdrawal plan.

The Fund hereby agrees that, in consideration for the

payment by the Fund to MSDW TRUST of fees as set out in the fee schedule

attached hereto as Schedule A, MSDW TRUST shall provide such services to the

Fund pursuant to the terms and conditions set forth in the Transfer Agency and

Service Agreement annexed hereto, as if the Fund was a signatory thereto.

-22-

<PAGE>

Please indicate MSDW TRUST's acceptance of employment

and appointment by the Fund in the capacities set forth above by so indicating

in the space provided below.

Very truly yours,

(name of fund)
---------------

By:__________________________________
Barry Fink
Vice President and General Counsel

ACCEPTED AND AGREED TO:

MORGAN STANLEY DEAN WITTER TRUST FSB

By:_______________________
Its:______________________
Date:_____________________

-23-

<PAGE>

SCHEDULE A

Fund: Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust

Fees: (1) Annual maintenance fee of $13.20 per shareholder account, payable
monthly.

(2) A fee equal to 1/12 of the fee set forth in (1) above, for providing
Forms 1099 for accounts closed during the year, payable following the
end of the calendar year.

(3) Out-of-pocket expenses in accordance with Section 2.2 of the
Agreement.

(4) Fees for additional services not set forth in this Agreement shall be
as negotiated between the parties.

<PAGE>
SERVICES AGREEMENT

AGREEMENT made as of the 17th day of April, 1995, and amended as of June
22, 1998, by and between Morgan Stanley Dean Witter Advisors Inc., a Delaware
corporation (herein referred to as "MSDW Advisors"), and Morgan Stanley Dean
Witter Services Company Inc., a Delaware corporation (herein referred to as
"MSDW Services").

WHEREAS, MSDW Advisors has entered into separate agreements (each such
agreement being herein referred to as an "Investment Management Agreement")
with certain investment companies as set forth on Schedule A (each such
investment company being herein referred to as a "Fund" and, collectively, as
the "Funds") pursuant to which MSDW Advisors is to perform, or supervise the
performance of, among other services, administrative services for the Funds
(and, in the case of Funds with multiple portfolios, the Series or Portfolios
of the Funds (such Series and Portfolio being herein individually referred to
as "a Series" and, collectively, as "the Series"));

WHEREAS, MSDW Advisors desires to retain MSDW Services to perform the
administrative services as described below; and

WHEREAS, MSDW Services desires to be retained by MSDW Advisors to perform
such administrative services:

Now, therefore, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:

1. MSDW Services agrees to provide administrative services to each Fund as
hereinafter set forth. Without limiting the generality of the foregoing, MSDW
Services shall (i) administer the Fund's business affairs and supervise the
overall day-to-day operations of the Fund (other than rendering investment
advice); (ii) provide the Fund with full administrative services, including
the maintenance of certain books and records, such as journals, ledger
accounts and other records required under the Investment Company Act of 1940,
as amended (the "Act"), the notification to the Fund and MSDW Advisors of
available funds for investment, the reconciliation of account information and
balances among the Fund's custodian, transfer agent and dividend disbursing
agent and MSDW Advisors, and the calculation of the net asset value of the
Fund's shares; (iii) provide the Fund with the services of persons competent
to perform such supervisory, administrative and clerical functions as are
necessary to provide effective operation of the Fund; (iv) oversee the
performance of administrative and professional services rendered to the Fund
by others, including its custodian, transfer agent and dividend disbursing
agent, as well as accounting, auditing and other services; (v) provide the
Fund with adequate general office space and facilities; (vi) assist in the
preparation and the printing of the periodic updating of the Fund's
registration statement and prospectus (and, in the case of an open-end Fund,
the statement of additional information), tax returns, proxy statements, and
reports to its shareholders and the Securities and Exchange Commission; and
(vii) monitor the compliance of the Fund's investment policies and
restrictions.

In the event that MSDW Advisors enters into an Investment Management
Agreement with another investment company, and wishes to retain MSDW Services
to perform administrative services hereunder, it shall notify MSDW Services
in writing. If MSDW Services is willing to render such services, it shall
notify MSDW Advisors in writing, whereupon such other Fund shall become a
Fund as defined herein.

2. MSDW Services shall, at its own expense, maintain such staff and employ
or retain such personnel and consult with such other persons as it shall from
time to time determine to be necessary or useful to the performance of its
obligations under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of MSDW Services shall be deemed to
include officers of MSDW Services and persons employed or otherwise retained
by MSDW Services (including officers and employees of MSDW Advisors, with the
consent of MSDW Advisors) to furnish services, statistical and other factual
data, information with respect to technical and scientific developments, and
such other information, advice and assistance as MSDW Services may desire.
MSDW Services shall maintain each Fund's records and books of account (other
than those maintained by the Fund's transfer agent, registrar, custodian and
other agencies). All such books and records so maintained shall be the
property of the Fund and, upon request therefor, MSDW Services shall
surrender to MSDW Advisors or to the Fund such of the books and records so
requested.

1
<PAGE>

3. MSDW Advisors will, from time to time, furnish or otherwise make
available to MSDW Services such financial reports, proxy statements and other
information relating to the business and affairs of the Fund as MSDW Services
may reasonably require in order to discharge its duties and obligations to
the Fund under this Agreement or to comply with any applicable law and
regulation or request of the Board of Directors/Trustees of the Fund.

4. For the services to be rendered, the facilities furnished, and the
expenses assumed by MSDW Services, MSDW Advisors shall pay to MSDW Services
monthly compensation calculated daily (in the case of an open-end Fund) or
weekly (in the case of a closed-end Fund) by applying the annual rate or
rates set forth on Schedule B to the net assets of each Fund. Except as
hereinafter set forth, (i) in the case of an open-end Fund, compensation
under this Agreement shall be calculated by applying 1/365th of the annual
rate or rates to the Fund's or the Series' daily net assets determined as of
the close of business on that day or the last previous business day and (ii)
in the case of a closed-end Fund, compensation under this Agreement shall be
calculated by applying the annual rate or rates to the Fund's average weekly
net assets determined as of the close of the last business day of each week.
If this Agreement becomes effective subsequent to the first day of a month or
shall terminate before the last day of a month, compensation for that part of
the month this Agreement is in effect shall be prorated in a manner
consistent with the calculation of the fees as set forth on Schedule B.
Subject to the provisions of paragraph 5 hereof, payment of MSDW Services'
compensation for the preceding month shall be made as promptly as possible
after completion of the computations contemplated by paragraph 5 hereof.

5. In the event the operating expenses of any open-end Fund and/or any
Series thereof, or of InterCapital Income Securities Inc., including amounts
payable to MSDW Advisors pursuant to the Investment Management Agreement, for
any fiscal year ending on a date on which this Agreement is in effect, exceed
the expense limitations applicable to the Fund and/or any Series thereof
imposed by state securities laws or regulations thereunder, as such
limitations may be raised or lowered from time to time, or, in the case of
InterCapital Income Securities Inc. or Morgan Stanley Dean Witter Variable
Investment Series or any Series thereof, the expense limitation specified in
the Fund's Investment Management Agreement, the fee payable hereunder shall
be reduced on a pro rata basis in the same proportion as the fee payable by
the Fund under the Investment Management Agreement is reduced.

6. MSDW Services shall bear the cost of rendering the administrative
services to be performed by it under this Agreement, and shall, at its own
expense, pay the compensation of the officers and employees, if any, of the
Fund employed by MSDW Services, and such clerical help and bookkeeping
services as MSDW Services shall reasonably require in performing its duties
hereunder.

7. MSDW Services will use its best efforts in the performance of
administrative activitives on behalf of each Fund, but in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations hereunder, MSDW Services shall not be liable to the Fund or any
of its investors for any error of judgment or mistake of law or for any act
or omission by MSDW Services or for any losses sustained by the Fund or its
investors. It is understood that, subject to the terms and conditions of the
Investment Management Agreement between each Fund and MSDW Advisors, MSDW
Advisors shall retain ultimate responsibility for all services to be
performed hereunder by MSDW Services. MSDW Services shall indemnify MSDW
Advisors and hold it harmless from any liability that MSDW Advisors may incur
arising out of any act or failure to act by MSDW Services in carrying out its
responsibilities hereunder.

8. It is understood that any of the shareholders, Directors/Trustees,
officers and employees of the Fund may be a shareholder, director, officer or
employee of, or be otherwise interested in, MSDW Services, and in any person
controlling, controlled by or under common control with MSDW Services, and
that MSDW Services and any person controlling, controlled by or under common
control with MSDW Services may have an interest in the Fund. It is also
understood that MSDW Services and any affiliated persons thereof or any
persons controlling, controlled by or under common control with MSDW Services
have and may have advisory, management, administration service or other
contracts with other organizations and persons, and may have other interests
and businesses, and further may purchase, sell or trade any securities or
commodities for their own accounts or for the account of others for whom they
may be acting.

2
<PAGE>

9. This Agreement shall continue until April 30, 1999, and thereafter
shall continue automatically for successive periods of one year unless
terminated by either party by written notice delivered to the other party
within 30 days of the expiration of the then-existing period. Notwithstanding
the foregoing, this Agreement may be terminated at any time, by either party
on 30 days' written notice delivered to the other party. In the event that
the Investment Management Agreement between any Fund and MSDW Advisors is
terminated, this Agreement will automatically terminate with respect to such
Fund.

10. This Agreement may be amended or modified by the parties in any manner
by written agreement executed by each of the parties hereto.

11. This Agreement may be assigned by either party with the written
consent of the other party.

12. This Agreement shall be construed and interpreted in accordance with
the laws of the State of New York.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement, as amended, on June 22, 1998 in New York, New York.

MORGAN STANLEY DEAN WITTER
ADVISORS INC.

By:
...............................

Attest:

..........................................

MORGAN STANLEY DEAN WITTER
SERVICES COMPANY INC.

By:
...............................

Attest:

..........................................

3
<PAGE>

SCHEDULE A
DEAN WITTER FUNDS
AS AMENDED AS OF JULY 22, 1998

<TABLE>
<CAPTION>
<S> <C>
OPEN-END FUNDS

1. Active Assets California Tax-Free Trust
2. Active Assets Government Securities Trust
3. Active Assets Money Trust
4. Active Assets Tax-Free Trust
5. Dean Witter Retirement Series
6. Morgan Stanley Dean Witter American Value Fund
7. Morgan Stanley Dean Witter Balanced Growth Fund
8. Morgan Stanley Dean Witter Balanced Income Fund
9. Morgan Stanley Dean Witter California Tax-Free Daily Income Trust
10. Morgan Stanley Dean Witter California Tax-Free Income Fund
11. Morgan Stanley Dean Witter Capital Appreciation Fund
12. Morgan Stanley Dean Witter Capital Growth Securities
13. Morgan Stanley Dean Witter Competitive Edge Fund,
"Best Ideas" Portfolio
14. Morgan Stanley Dean Witter Convertible Securities Trust
15. Morgan Stanley Dean Witter Developing Growth Securities Trust
16. Morgan Stanley Dean Witter Diversified Income Trust
17. Morgan Stanley Dean Witter Dividend Growth Securities Inc.
18. Morgan Stanley Dean Witter Equity Fund
19. Morgan Stanley Dean Witter European Growth Fund Inc.
20. Morgan Stanley Dean Witter Federal Securities Trust
21. Morgan Stanley Dean Witter Financial Services Trust
22. Morgan Stanley Dean Witter Fund of Funds
(i) Domestic Portfolio
(ii) International Portfolio
23. Morgan Stanley Dean Witter Global Dividend Growth Securities
24. Morgan Stanley Dean Witter Global Short-Term Income Fund Inc.
25. Morgan Stanley Dean Witter Global Utilities Fund
26. Morgan Stanley Dean Witter Growth Fund
27. Morgan Stanley Dean Witter Hawaii Municipal Trust
28. Morgan Stanley Dean Witter Health Sciences Trust
29. Morgan Stanley Dean Witter High Yield Securities Inc.
30. Morgan Stanley Dean Witter Income Builder Fund
31. Morgan Stanley Dean Witter Information Fund
32. Morgan Stanley Dean Witter Intermediate Income Securities
33. Morgan Stanley Dean Witter Intermediate Term U.S. Treasury Trust
34. Morgan Stanley Dean Witter International SmallCap Fund
35. Morgan Stanley Dean Witter Japan Fund
36. Morgan Stanley Dean Witter Limited Term Municipal Trust
37. Morgan Stanley Dean Witter Liquid Asset Fund Inc.
38. Morgan Stanley Dean Witter Market Leader Trust
39. Morgan Stanley Dean Witter Mid-Cap Dividend Growth Securities
40. Morgan Stanley Dean Witter Mid-Cap Growth Fund
41. Morgan Stanley Dean Witter Multi-State Municipal Series Trust
42. Morgan Stanley Dean Witter Natural Resource Development Securities Inc.
43. Morgan Stanley Dean Witter New York Municipal Money Market Trust
44. Morgan Stanley Dean Witter New York Tax-Free Income Fund
45. Morgan Stanley Dean Witter Pacific Growth Fund Inc.
46. Morgan Stanley Dean Witter Precious Metals and Minerals Trust
47. Morgan Stanley Dean Witter Select Dimensions Investment Series
(i) American Value Portfolio
(ii) Balanced Growth Portfolio
(iii) Developing Growth Portfolio
(iv) Diversified Income Portfolio
(v) Dividend Growth Portfolio
(vi) Emerging Markets Portfolio
(vii) Global Equity Portfolio
(viii) Growth Portfolio
(ix) Mid-Cap Growth Portfolio
(x) Money Market Portfolio
(xi) North American Government Securities Portfolio
(xii) Utilities Portfolio
(xiii) Value-Added Market Portfolio
48. Morgan Stanley Dean Witter Select Municipal Reinvestment Fund
49. Morgan Stanley Dean Witter U.S. Government Money Market Trust
50. Morgan Stanley Dean Witter Utilities Fund

A-1
<PAGE>
51. Morgan Stanley Dean Witter Short-Term Bond Fund
52. Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust
53. Morgan Stanley Dean Witter Special Value Fund
54. Morgan Stanley Dean Witter Strategist Fund
55. Morgan Stanley Dean Witter S&P 500 Index Fund
56. Morgan Stanley Dean Witter S&P 500 Select Fund
57. Morgan Stanley Dean Witter Tax-Exempt Securities Trust
58. Morgan Stanley Dean Witter Tax-Free Daily Income Trust
59. Morgan Stanley Dean Witter U.S. Government Securities Trust
60. Morgan Stanley Dean Witter S&P 500 Select Fund
61. Morgan Stanley Dean Witter Value-Added Market Series
62. Morgan Stanley Dean Witter Variable Investment Series
(i) Capital Appreciation Portfolio
(ii) Capital Growth Portfolio
(iii) Competitive Edge "Best Ideas" Portfolio
(iv) Dividend Growth Portfolio
(v) Equity Portfolio
(vi) European Growth Portfolio
(vii) Global Dividend Growth Portfolio
(viii) High Yield Portfolio
(ix) Income Builder Portfolio
(x) Money Market Portfolio
(xi) Quality Income Plus Portfolio
(xii) Pacific Growth Portfolio
(xiii) S&P 500 Index Portfolio
(xiv) Strategist Portfolio
(xv) Utilities Portfolio
63. Morgan Stanley Dean Witter World Wide Income Trust
64. Morgan Stanley Dean Witter Worldwide High Income Fund
65. Dean Witter Global Asset Allocation Fund
CLOSED-END FUNDS
66. High Income Advantage Trust
67. High Income Advantage Trust II
68. High Income Advantage Trust III
69. InterCapital Income Securities Inc.
70. Dean Witter Government Income Trust
71. InterCapital Insured Municipal Bond Trust
72. InterCapital Insured Municipal Trust
73. InterCapital Insured Municipal Income Trust
74. InterCapital California Insured Municipal Income Trust
75. InterCapital Insured Municipal Securities
76. InterCapital Insured California Municipal Securities
77. InterCapital Quality Municipal Investment Trust
78. InterCapital Quality Municipal Income Trust
79. InterCapital Quality Municipal Securities
80. InterCapital California Quality Municipal Securities
81. InterCapital New York Quality Municipal Securities
</TABLE>

A-2
<PAGE>
SCHEDULE B

MORGAN STANLEY DEAN WITTER SERVICES COMPANY INC.
SCHEDULE OF ADMINISTRATIVE FEES
AS AMENDED AS OF JUNE 22, 1998

Monthly compensation calculated daily by applying the following annual
rates to a fund's daily net assets:

FIXED INCOME FUNDS
- -------------------

<TABLE>
<CAPTION>
<S> <C>
Morgan Stanley Dean Witter Balanced 0.060% of the daily net assets.
Income Fund

Morgan Stanley Dean Witter California 0.055% of the portion of the daily net assets not exceeding $500
Tax-Free Income Fund million; 0.0525% of the portion of the daily net assets exceeding
$500 million but not exceeding $750 million; 0.050% of the portion
of the daily net assets exceeding $750 million but not exceeding $1
billion; 0.0475% of the portion of the daily net assets exceeding $1
billion but not exceeding $1.25 billion; and 0.045% of the portion
of the daily net assets exceeding $1.25 billion.

Morgan Stanley Dean Witter Convertible 0.060% of the portion of the daily net assets not exceeding $750
Securities Trust million; 0.055% of the portion of the daily net assets exceeding
$750 million but not exceeding $1 billion; 0.050% of the portion of
the daily net assets of the exceeding $1 billion but not exceeding
$1.5 billion; 0.0475% of the portion of the daily net assets
exceeding $1.5 billion but not exceeding $2 billion; 0.045% of the
portion of the daily net assets exceeding $2 billion but not
exceeding $3 billion; and 0.0425% of the portion of the daily net
assets exceeding $3 billion.

Morgan Stanley Dean Witter Diversified 0.040% of the daily net assets.
Income Trust

Morgan Stanley Dean Witter Federal 0.055% of the portion of the daily net assets not exceeding $1
Securities Trust billion; 0.0525% of the portion of the daily net assets exceeding $1
billion but not exceeding $1.5 billion; 0.050% of the portion of the
daily net assets exceeding $1.5 billion but not exceeding $2
billion; 0.0475% of the portion of the daily net assets exceeding $2
billion but not exceeding $2.5 billion; 0.045% of the portion of the
daily net assets exceeding $2.5 billion but not exceeding $5
billion; 0.0425% of the portion of the daily net assets exceeding $5
billion but not exceeding $7.5 billion; 0.040% of the portion of the
daily net assets exceeding $7.5 billion but not exceeding $10
billion; 0.0375% of the portion of the daily net assets exceeding
$10 billion but not exceeding $12.5 billion; and 0.035% of the
portion of the daily net assets exceeding $12.5 billion.

Morgan Stanley Dean Witter Global 0.055% of the portion of the daily net assets not exceeding $500
Short-Term Income Fund Inc. million; and 0.050% of the portion of the daily net assets exceeding
$500 million.

Morgan Stanley Dean Witter Hawaii 0.035% of the daily net assets.
Municipal Trust

B-1
<PAGE>
Morgan Stanley Dean Witter High Yield 0.050% of the portion of the daily net assets not exceeding $500
Securities Inc. million; 0.0425% of the portion of the daily net assets
exceeding $500 million but not exceeding $750 million; 0.0375% of
the portion of the daily net assets exceeding $750 million but not
exceeding $1 billion; 0.035% of the portion of the daily net assets
exceeding $1 billion but not exceeding $2 billion; 0.0325% of the
portion of the daily net assets exceeding $2 billion but not
exceeding $3 billion; and 0.030% of the portion of daily net assets
exceeding $3 billion.

Morgan Stanley Dean Witter 0.060% of the portion of the daily net assets not exceeding $500
Intermediate Income Securities million; 0.050% of the portion of the daily net assets exceeding
$500 million but not exceeding $750 million; 0.040% of the portion
of the daily net assets exceeding $750 million but not exceeding $1
billion; and 0.030% of the portion of the daily net assets exceeding
$1 billion.

Morgan Stanley Dean Witter 0.035% of the daily net assets.
Intermediate Term
U.S. Treasury Trust

Morgan Stanley Dean Witter Limited 0.050% of the daily net assets.
Term Municipal Trust

Morgan Stanley Dean Witter Multi-State 0.035% of the daily net assets.
Municipal Series Trust (10 Series)

Morgan Stanley Dean Witter New York 0.055% of the portion of the daily net assets not exceeding $500
Tax-Free Income Fund million; and 0.0525% of the portion of the daily net assets
exceeding $500 million.

Morgan Stanley Dean Witter Retirement 0.065% of the daily net assets.
Series-Intermediate Income Securities
Series
U.S. Government Securities Series 0.065% of the daily net assets.

Morgan Stanley Dean Witter Select 0.039% of the daily net assets.
Dimensions Investment Series-North
American Government Securities
Portfolio

Morgan Stanley Dean Witter Select 0.050% of the daily net assets.
Municipal Reinvestment Fund

Morgan Stanley Dean Witter Short-Term 0.070% of the daily net assets.
Bond Fund

Morgan Stanley Dean Witter Short-Term 0.035% of the daily net assets.
U.S. Treasury Trust

B-2
<PAGE>
Morgan Stanley Dean Witter Tax-Exempt 0.050% of the portion of the daily net assets not exceeding $500
Securities Trust million; 0.0425% of the portion of the daily net assets exceeding
$500 million but not exceeding $750 million; 0.0375% of the portion
of the daily net assets exceeding $750 million but not exceeding $1
billion; and 0.035% of the portion of the daily net assets exceeding
$1 billion but not exceeding $1.25 billion; .0325% of the portion of
the daily net assets exceeding $1.25 billion.

Morgan Stanley Dean Witter U.S. 0.050% of the portion of the daily net assets not exceeding $1
Government Securities Trust billion; 0.0475% of the portion of the daily net assets exceeding $1
billion but not exceeding $1.5 billion; 0.045% of the portion of the
daily net assets exceeding $1.5 billion but not exceeding $2
billion; 0.0425% of the portion of the daily net assets exceeding $2
billion but not exceeding $2.5 billion; 0.040% of the portion of the
daily net assets exceeding $2.5 billion but not exceeding $5
billion; 0.0375% of the portion of the daily net assets exceeding $5
billion but not exceeding $7.5 billion; 0.035% of the portion of the
daily net assets exceeding $7.5 billion but not exceeding $10
billion; 0.0325% of the portion of the daily net assets exceeding
$10 billion but not exceeding $12.5 billion; and 0.030% of the
portion of the daily net assets exceeding $12.5 billion.

Morgan Stanley Dean Witter Variable
Investment Series-
High Yield Portfolio 0.050% of the portion of the daily net assets not exceeding $500
million; and 0.0425% of the daily net assets exceeding $500 million.
Quality Income Plus Portfolio 0.050% of the portion of the daily the net assets up to $500
million; and 0.045% of the portion of the daily net assets exceeds
$500 million.

Morgan Stanley Dean Witter World Wide 0.075% of the portion of the daily net assets up to $250 million;
Income Trust 0.060% of the portion of the daily net assets exceeding $250 million
but not exceeding $500 million; 0.050% of the portion of the daily
net assets of the exceeding $500 million but not exceeding $750
milliion; 0.040% of the portion of the daily net assets exceeding
$750 million but not exceeding $1 billion; and 0.030% of the portion
of the daily net assets exceeding $1 billion.

Morgan Stanley Dean Witter Worldwide 0.060% of the daily net assets.
High Income Fund

EQUITY FUNDS
- -------------

Morgan Stanley Dean Witter American 0.0625% of the portion of the daily net assets not exceeding $250
Value Fund million; 0.050% of the portion of the daily net assets exceeding
$250 million but not exceeding $2.25 billion; 0.0475% of the portion
of the daily net assets exceeding $2.25 billion but not exceeding
$3.5 billion; 0.0450% of the portion of the daily net assets
exceeding 3.5 billion but not exceeding 4.5 billion; and 0.0425% of
the portion of the daily net assets exceeding $4.5 billion.

B-3
<PAGE>
Morgan Stanley Dean Witter Balanced 0.060% of the daily net assets.
Growth Fund

Morgan Stanley Dean Witter Capital 0.075% of the portion of the daily net assets not exceeding $500
Appreciation Fund million; and 0.0725% of the portion of the daily net assets
exceeding $500 million.

Morgan Stanley Dean Witter Capital 0.065% of the portion of the daily net assets not exceeding $500
Growth Securities million; 0.055% of the portion exceeding $500 million but not
exceeding $1 billion; 0.050% of the portion of the daily net assets
exceeding $1 billion but not exceeding $1.5 billion; and 0.0475% of
the portion of the daily net assets exceeding $1.5 billion.

Morgan Stanley Dean Witter Developing 0.050% of the portion of the daily net assets not exceeding $500
Growth Securities Trust million; and 0.0475% of the portion of the daily net assets
exceeding $500 million.

Morgan Stanley Dean Witter Dividend 0.0625% of the portion of the daily net assets not exceeding $250
Growth Securities Inc. million; 0.050% of the portion of the daily net assets exceeding
$250 million but not exceeding $1 billion; 0.0475% of the portion of
the daily net assets exceeding $1 billion but not exceeding $2
billion; 0.045% of the portion of the daily net assets exceeding $2
billion but not exceeding $3 billion; 0.0425% of the portion of the
daily net assets exceeding $3 billion but not exceeding $4 billion;
0.040% of the portion of the daily net assets exceeding $4 billion
but not exceeding $5 billion; 0.0375% of the portion of the daily
net assets exceeding $5 billion but not exceeding $6 billion; 0.035%
of the portion of the daily net assets exceeding $6 billion but not
exceeding $8 billion; 0.0325% of the portion of the daily net assets
exceeding $8 billion but not exceeding $10 billion; 0.030% of the
portion of the daily net assets exceeding $10 billion but not
exceeding $15 billion; and 0.0275% of the portion of the daily net
assets exceeding $15 billion.

Morgan Stanley Dean Witter European 0.060% of the portion of the daily net assets not exceeding $500
Growth Fund Inc. million; 0.057% of the portion of the daily net assets exceeding
$500 million but not exceeding $2 billion; and 0.054% of the portion
of the daily net assets exceeding $2 billion.

Morgan Stanley Dean Witter Financial 0.075% of the daily net assets.
Services Trust

Morgan Stanley Dean Witter Fund
of Funds-
Domestic Portfolio None
International Portfolio None

Dean Witter Global Asset Allocation 0.070% of the daily net assets.
Fund

B-4
<PAGE>
Morgan Stanley Dean Witter Global 0.075% of the portion of the daily net assets not exceeding$1
Dividend Growth Securities billion; 0.0725% of the portion of the daily net assets exceeding $1
billion but not exceeding $1.5 billion; 0.070% of the portion of the
daily net assets exceeding $1.5 billion but not exceeding$2.5
billion; 0.0675% of the portion of the daily net assets exceeding
$2.5 billion but not exceeding $3.5 billion; 0.0650% of the portion
of the daily net assets exceeding $3.5 billion but not exceeding
$4.5 billion; and 0.0625% of the portion of the daily net assets
exceeding $4.5 billion.

Morgan Stanley Dean Witter Global 0.065% of the portion of the daily net assets not exceeding $500
Utilities Fund million; and 0.0625% of the portion of the daily net assets
exceeding $500 million.

Morgan Stanley Dean Witter Health 0.10% of the portion of daily net assets not exceeding $500 million;
Sciences Trust and 0.095% of the portion of daily net assets exceeding $500
million.

Morgan Stanley Dean Witter Income 0.075% of the portion of the net assets not exceeding $500 million;
Builder Fund and 0.0725% of the portion of daily net assets exceeding $500
million.

Morgan Stanley Dean Witter Information 0.075% of the portion of the daily net assets not exceeding $500
Fund million; and 0.0725% of the portion of the daily net assets
exceeding $500 million.

Morgan Stanley Dean Witter 0.075% of the daily net assets.
International SmallCap Fund

Morgan Stanley Dean Witter Japan Fund 0.060% of the daily net assets.

Morgan Stanley Dean Witter Market 0.075% of the daily net assets.
Leader Trust

Morgan Stanley Dean Witter Mid-Cap 0.075% of the portion of the daily net assets not exceeding $500
Growth Fund million; and 0.0725% of the portion of the daily net assets
exceeding $500 million.

Morgan Stanley Dean Witter Natural 0.0625% of the portion of the daily net assets not exceeding $250
Resource Development Securities Inc. million and 0.050% of the portion of the daily net assets exceeding
$250 million.

Morgan Stanley Dean Witter Pacific 0.060% of the portion of the daily net assets not exceeding $1
Growth Fund Inc. billion; 0.057% of the portion of the daily net assets exceeding $1
billion but not exceeding $2 billion; and 0.054% of the portion of
the daily net assets exceeding $2 billion.

Morgan Stanley Dean Witter Precious 0.080% of the daily net assets.
Metals and Minerals Trust

Dean Witter Retirement Series-
American Value Series 0.085% of the daily net assets.
Capital Growth Series 0.085% of the daily net assets.
Dividend Growth Series 0.075% of the daily net assets.
Global Equity Series 0.10% of the daily net assets.
Strategist Series 0.085% of the daily net assets.
Utilities Series 0.075% of the daily net assets.
Value Added Market Series 0.050% of the daily net assets.

B-5
<PAGE>
Morgan Stanley Dean Witter Select
Dimensions Investment Series-
American Value Portfolio 0.0625% of the daily net assets.
Balanced Growth Portfolio 0.065% of the daily net assets.
Developing Growth Portfolio 0.050% of the daily net assets.
Diversified Income Portfolio 0.040% of the daily net assets.
Dividend Growth Portfolio 0.0625% of the portion of the daily net assets not exceeding $500
million; and 0.050% of the portion of the daily net assets exceeding
$500 million.
Emerging Markets Portfolio 0.075% of the daily net assets.
Global Equity Portfolio 0.10% of the daily net assets.
Growth Portfolio 0.048% of the daily net assets.
Mid-Cap Growth Portfolio 0.075% of the daily net assets
Utilities Portfolio 0.065% of the daily net assets.
Value-Added Market Portfolio 0.050% of the daily net assets.

Morgan Stanley Dean Witter Special 0.075% of the daily net assets.
Value Fund

Morgan Stanley Dean Witter Strategist 0.060% of the portion of the daily net assets not exceeding $500
Fund million; 0.055% of the portion of the daily net assets exceeding
$500 million but not exceeding $1 billion; 0.050% of the portion of
the daily net assets exceeding $1 billion but not
exceeding $1.5 billion; 0.0475% of the portion of the daily net
assets exceeding $1.5 billion but not exceeding $2.0 billion; and
0.045% of the portion of the daily net assets exceeding $2.0
billion.

Morgan Stanley Dean Witter S&P 500 0.040% of the daily net assets.
Index Fund

Morgan Stanley Dean Witter Utilities 0.065% of the portion of the daily net assets not exceeding $500
Fund million; 0.055% of the portion of the daily net assets exceeding
$500 million but not exceeding $1 billion; 0.0525% of the portion of
the daily net assets exceeding $1 billion but not exceeding $1.5
billion; 0.050% of the portion of the daily net assets exceeding
$1.5 billion but not exceeding $2.5 billion; 0.0475% of the portion
of the daily net assets exceeding $2.5 billion but not exceeding
$3.5 billion; 0.045% of the portion of the daily net assets
exceeding $3.5 but not exceeding $5 billion; and 0.0425% of the
daily net assets exceeding $5 billion.

Morgan Stanley Dean Witter Value-Added 0.050% of the portion of the daily net assets not exceeding $500
Market Series million; 0.45% of the portion of the daily net assets exceeding $500
million but not exceeding $1 billion; 0.0425% of the portion of the
daily net assets exceeding $1.0 billion but not exceeding $2.0
billion; and 0.040% of the portion of the daily net assets exceeding
$2 billion.

Morgan Stanley Dean Witter Variable
Investment Series-
Capital Appreciation Portfolio 0.075% of the daily net assets.
Capital Growth Portfolio 0.065% of the daily net assets.
Competitive Edge "Best Ideas" 0.065% of the daily net assets.
Portfolio

B-6
<PAGE>
Dividend Growth Portfolio 0.0625% of the portion of the daily net assets not exceeding $500
million; and 0.050% of the portion of the daily net assets exceeding
$500 million but not exceeding $1 billion; 0.0475% of the portion of
the daily net assets exceeding $1.0 billion but not exceeding $2.0
billion; and 0.045% of the portion of the daily net assets exceeding
$2 billion.
Equity Portfolio 0.050% of the net assets of the portion of the daily net assets not
exceeding $1 billion; and 0.0475% of the portion of the daily net
assets exceeding $1 billion.
European Growth Portfolio 0.060% of the portion of the daily net assets not exceeding $500
million; and 0.057% of the portion of the daily net assets exceeding
$500 million.
Income Builder Portfolio 0.075% of the daily net assets.
S&P 500 Index Portfolio 0.040% of the daily net assets.
Strategist Portfolio 0.050% of the daily net assets.
Utilities Portfolio 0.065% of the portion of the daily net assets not exceeding $500
million and 0.055% of the portion of the daily net assets exceeding
$500 million.

Morgan Stanley Dean Witter Competitive 0.065% of the portion of the daily net assets not exceeding $1.5
Edge Fund, "Best Ideas" Portfolio billion; and 0.0625% of the portion of the daily net assets
exceeding $1.5 billion.

Morgan Stanley Dean Witter Equity Fund 0.051% of the daily net assets.

Morgan Stanley Dean Witter Growth Fund 0.048% of the portion of daily net assets not exceeding $750
million; 0.045% of the portion of daily net assets exceeding $750
million but not exceeding $1.5 billion; and 0.042% of the portion of
daily net assets exceeding $1.5 billion.

Morgan Stanley Dean Witter Mid-Cap 0.075 of the daily net assets.
Dividend Growth Fund

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

Active Assets Trusts: 0.050% of the portion of the daily net assets not exceeding $500
(1) Active Assets Money Trust million; 0.0425% of the portion of the daily net assets exceeding
(2) Active Assets Tax-Free Trust $500 million but not exceeding $750 million; 0.0375% of the portion
(3) Active Assets California Tax-Free of the daily net assets exceeding $750 million but not exceeding $1
Trust billion; 0.035% of the portion of the daily net assets exceeding $1
(4) Active Assets Government billion but not exceeding $1.5 billion; 0.0325% of the portion of
Securities Trust the daily net assets exceeding $1.5 billion but not exceeding $2
billion; 0.030% of the portion of the daily net assets exceeding $2
billion but not exceeding $2.5 billion; 0.0275% of the portion of
the daily net assets exceeding $2.5 billion but not exceeding $3
billion; and 0.025% of the portion of the daily net assets exceeding
$3 billion.

B-7
<PAGE>
Morgan Stanley Dean Witter California 0.050% of the portion of the daily net assets not exceeding $500
Tax-Free Daily Income Trust million; 0.0425% of the portion of the daily net assets exceeding
$500 million but not exceeding $750 million; 0.0375% of the portion
of the daily net assets exceeding $750 million but not exceeding $1
billion; 0.035% of the portion of the daily net assets exceeding $1
billion but not exceeding $1.5 billion; 0.0325% of the portion of
the daily net assets exceeding $1.5 billion but not exceeding $2
billion; 0.030% of the portion of the daily net assets exceeding $2
billion but not exceeding $2.5 billion; 0.0275% of the portion of
the daily net assets exceeding $2.5 billion but not exceeding $3
billion; and 0.025% of the portion of the daily net assets exceeding
$3 billion.

Morgan Stanley Dean Witter Liquid 0.050% of the portion of the daily net assets not exceeding $500
Asset Fund Inc. million; 0.0425% of the portion of the daily net assets exceeding
$500 million but not exceeding $750 million; 0.0375% of the portion
of the daily net assets exceeding $750 million but not exceeding $1
billion; 0.035% of the portion of the daily net assets exceeding $1
billion but not exceeding $1.35 billion; 0.0325% of the portion of
the daily net assets exceeding $1.35 billion but not exceeding $1.75
billion; 0.030% of the portion of the daily net assets exceeding
$1.75 billion but not exceeding $2.15 billion; 0.0275% of the
portion of the daily net assets exceeding $2.15 billion but not
exceeding $2.5 billion; 0.025%of the portion of the daily net assets
exceeding $2.5 billion but not exceeding $15 billion; 0.0249% of the
portion of the daily net assets exceeding $15 billion but not exceeding
$17.5 billion; and 0.0248% of the portion of the daily net assets
exceeding $17.5 billion.

Morgan Stanley Dean Witter New York 0.050% of the portion of the daily net assets not exceeding $500
Municipal Money Market Trust million; 0.0425% of the portion of the daily net assets exceeding
$500 million but not exceeding $750 million; 0.0375% of the portion
of the daily net assets exceeding $750 million but not exceeding $1
billion; 0.035% of the portion of the daily net assets exceeding
$1 billion but not exceeding $1.5 billion; 0.0325% of the portion
of the daily net assets exceeding $1.5 billion but not exceeding
$2 billion; 0.030% of the portion of the daily net assets exceeding
$2 billion but not exceeding $2.5 billion; 0.0275% of the portion of
the daily net assets exceeding $2.5 billion but not exceeding
$3 billion; and 0.025% of the portion of the daily net assets
exceeding $3 billion.

Dean Witter Retirement Series-
Liquid Asset Series 0.050% of the daily net assets.
U.S. Government Money 0.050% of the daily net assets.
Market Series

Morgan Stanley Dean Witter Select
Dimensions Investment Series-
Money Market Portfolio 0.050% of the daily net assets.

B-8
<PAGE>
Morgan Stanley Dean Witter Tax-Free 0.050% of the portion of the daily net assets not exceeding $500
Daily Income Trust million; 0.0425% of the portion of the daily net assets exceeding
$500 million but not exceeding $750 million; 0.0375% of the portion
of the daily net assets exceeding $750 million but not exceeding $1
billion; 0.035% of the portion of the daily net assets exceeding $1
billion but not exceeding $1.5 billion; 0.0325% of the portion of
the daily net assets exceeding $1.5 billion but not exceeding $2
billion; 0.030% of the portion of the daily net assets exceeding $2
billion but not exceeding $2.5 billion; 0.0275% of the portion of
the daily net assets exceeding $2.5 billion but not exceeding $3
billion; and 0.025% of the portion of the daily net assets exceeding
$3 billion.

Morgan Stanley Dean Witter U.S. 0.050% of the portion of the daily net assets not exceeding $500
Government Money Market Trust million; 0.0425% of the portion of the daily net assets exceeding
$500 million but not exceeding $750 million; 0.0375% of the portion
of the daily net assets exceeding $750 million but not exceeding $1
billion; 0.035% of the portion of the daily net assets exceeding $1
billion but not exceeding $1.5 billion; 0.0325% of the portion of
the daily net assets exceeding $1.5 billion but not exceeding $2
billion; 0.030% of the portion of the daily net assets exceeding $2
billion but not exceeding $2.5 billion; 0.0275% of the portion of
the daily net assets exceeding $2.5 billion but not exceeding $3
billion; and 0.025% of the portion of the daily net assets exceeding
$3 billion.

Morgan Stanley Dean Witter Variable 0.050% of the daily net assets.
Investment Series-
Money Market Portfolio
</TABLE>

Monthly compensation calculated weekly by applying the following annual
rates to a fund's weekly net assets:

CLOSED-END FUNDS
- -----------------

<TABLE>
<CAPTION>
<S> <C>
Dean Witter Government Income Trust 0.060% of the average weekly net assets.

High Income Advantage Trust 0.075% of the portion of the average weekly net assets not
exceeding $250 million; 0.060% of the portion of average weekly
net assets exceeding $250 million and not exceeding $500
million; 0.050% of the portion of average weekly net assets
exceeding $500 million and not exceeding $750 million; 0.040% of
the portion of average weekly net assets exceeding $750 million
and not exceeding $1 billion; and 0.030% of the portion of
average weekly net assets exceeding $1 billion.

High Income Advantage Trust II 0.075% of the portion of the average weekly net assets not
exceeding $250 million; 0.060% of the portion of average weekly
net assets exceeding $250 million and not exceeding $500
million; 0.050% of the portion of average weekly net assets
exceeding $500 million and not exceeding $750 million; 0.040% of
the portion of average weekly net assets exceeding $750 million
and not exceeding $1 billion; and 0.030% of the portion of
average weekly net assets exceeding $1 billion.

B-9
<PAGE>
High Income Advantage Trust III 0.075% of the portion of the average weekly net assets not
exceeding $250 million; 0.060% of the portion of average weekly
net assets exceeding $250 million and not exceeding $500
million; 0.050% of the portion of average weekly net assets
exceeding $500 million and not exceeding $750 million; 0.040% of
the portion of the average weekly net assets exceeding $750
million and not exceeding $1 billion; and 0.030% of the portion
of average weekly net assets exceeding $1 billion.

InterCapital Income Securities Inc. 0.050% of the average weekly net assets.

InterCapital Insured Municipal Bond 0.035% of the average weekly net assets.
Trust

InterCapital Insured Municipal Trust 0.035% of the average weekly net assets.

InterCapital Insured Municipal Income 0.035% of the average weekly net assets.
Trust

InterCapital California Insured 0.035% of the average weekly net assets.
Municipal Income Trust

InterCapital Quality Municipal 0.035% of the average weekly net assets.
Investment Trust

InterCapital New York Quality Municipal 0.035% of the average weekly net assets.
Securities

InterCapital Quality Municipal Income 0.035% of the average weekly net assets.
Trust

InterCapital Quality Municipal 0.035% of the average weekly net assets.
Securities

InterCapital California Quality 0.035% of the average weekly net assets.
Municipal Securities

InterCapital Insured Municipal 0.035% of the average weekly net assets.
Securities

InterCapital Insured California 0.035% of the average weekly net assets.
Municipal Securities

</TABLE>

B-10

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 8 to the registration
statement on Form N-1A (the "Registration Statement") of our report dated
July 10, 1998, relating to the financial statements and financial highlights
of Morgan Stanley Dean Witter Short-Term U.S. Treasury Trust, formerly Dean
Witter Short-Term U.S. Treasury Trust, which appears in such Statement of
Additional Information, and to the incorporation by reference of our report
into the Prospectus which constitutes part of this Registration Statement. We
also consent to the references to us under the headings "Independent
Accountants" and "Experts" in such Statement of Additional Information and to
the reference to us under the heading "Financial Highlights" in such
Prospectus.

/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
July 27, 1998

<PAGE>

DEAN WITTER SHORT - TERM U.S. TREASURY TRUST

SCHEDULE OF COMPUTATION OF YIELD QUOTATION
05/29/98

6
YIELD = 2 { [ ((a-b) /cd) +1] -1}

WHERE: a = Dividends and interest earned during the period
b = Expenses accrued for the period
c = The average daily number of shares outstanding
during the period that were entitled to receive
dividends
d = The maximum offering price per share on the last
day of the period

6
YIELD = 2{[((1,124,897.03 - 159,809.60)/24,122,389.083 x 9.96) +1] -1}

4.87%

<PAGE>
SCHEDULE FOR COMPUTATIONS OF PERFORMANCE QUOTATIONS
DEAN WITTER SHORT TERM US TREASURY TRUST

(A) TOTAL RETURN (NO LOAD FUND)

(B) AVERAGE ANNUAL TOTAL RETURNS (NO LOAD FUND)

FORMULA: - -
| _________________|
| | |
t = |/\ n | EV |
| \ | ---- | -1
| \ | P |
| \|
| |
_ _|

EV
TR = ---------- -1
P

t = AVERAGE ANNUAL COMPOUND RETURN
n = NUMBER OF YEARS
EV = ENDING VALUE
P = INITIAL INVESTMENT
TR = TOTAL RETURN

(A) (B)
$1,000 EV AS OF TOTAL NUMBER OF AVERAGE ANNUAL
INVESTED- P 31-MAY-98 RETURN-TR YEARS -n COMPOUND RETURN -t
- ----------- ----------- --------------- ------------ ----------------
31-May-97 $1,066.80 6.68% 1.00 6.68%

31-May-93 $1,249.00 24.90% 5.00 4.55%

13-Aug-91 $1,420.50 42.05% 6.80 5.30%

FORMULA G = (TR+1)*P
G = GROWTH OF INITIAL INVESTMENT
P = INITIAL INVESTMENT
TR = TOTAL RETURN SINCE INCEPTION

$10,000 TOTAL (C) GROWTH OF (D) GROWTH OF (E) GROWTH OF
INVESTED - P RETURN - TR $10,000 INVESTMENT-G $50,000 INVESTMENT - G $100,000 INVESTMENT - G
- ------------ ----------- ----------------------------------------------- --------------------------
<S> <C> <C> <C> <C>
13-Aug-91 42.05 $14,205 $71,025 142,050

</TABLE>

<PAGE>

<ARTICLE> 6
<CIK> 0000876162
<NAME> MORGAN STANLEY DEAN WITTER SHORT-TERM U.S. TREASURY TRUST

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-1998
<PERIOD-START> JUN-01-1997
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 236,713,024
<INVESTMENTS-AT-VALUE> 239,227,369
<RECEIVABLES> 5,353,433
<ASSETS-OTHER> 37,843
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 244,618,645
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,594,105
<TOTAL-LIABILITIES> 3,594,105
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 256,769,712
<SHARES-COMMON-STOCK> 24,192,405
<SHARES-COMMON-PRIOR> 23,379,838
<ACCUMULATED-NII-CURRENT> 205,261
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (18,464,778)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2,514,345
<NET-ASSETS> 241,024,540
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 14,715,707
<OTHER-INCOME> 0
<EXPENSES-NET> 1,970,460
<NET-INVESTMENT-INCOME> 12,745,247
<REALIZED-GAINS-CURRENT> (250,683)
<APPREC-INCREASE-CURRENT> 3,306,205
<NET-CHANGE-FROM-OPS> 15,800,769
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (12,934,573)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 28,646,260
<NUMBER-OF-SHARES-REDEEMED> (28,891,924)
<SHARES-REINVESTED> 1,058,231
<NET-CHANGE-IN-ASSETS> 10,757,351
<ACCUMULATED-NII-PRIOR> 394,587
<ACCUMULATED-GAINS-PRIOR> (18,214,095)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 841,955
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,970,460
<AVERAGE-NET-ASSETS> 240,558,538
<PER-SHARE-NAV-BEGIN> 9.85
<PER-SHARE-NII> .53
<PER-SHARE-GAIN-APPREC> .11
<PER-SHARE-DIVIDEND> (.53)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.96
<EXPENSE-RATIO> .82
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>

POWER OF ATTORNEY
-----------------

KNOW ALL MEN BY THESE PRESENTS, that WAYNE E. HEDIEN, whose

signature appears below, constitutes and appoints David M. Butowsky, Ronald M.

Feiman and Stuart M. Strauss, or either of them, his true and lawful

attorneys-in-fact and agents, with full power of substitution among himself and

each of the persons appointed herein, for him and in his name, place and stead,

in any and all capacities, to sign any amendments to any registration statement

of ANY OF THE DEAN WITTER FUNDS SET FORTH ON SCHEDULE A ATTACHED HERETO, and to

file the same, with all exhibits thereto, and other documents in connection

therewith, with the Securities and Exchange Commission, as fully to all intents

and purposes as he might or could do in person, hereby ratifying and confirming

all that said attorneys-in-fact and agents, or either of them, may lawfully do

or cause to be done by virtue hereof.

Dated: September 1, 1997
-----------------

/s/ Wayne E. Hedien
-------------------
Wayne E. Hedien

<PAGE>

Schedule A

1. Active Assets Money Trust
2. Active Assets Tax-Free Trust
3. Active Assets Government Securities Trust
4. Active Assets California Tax-Free Trust
5. Dean Witter New York Municipal Money Market Trust
6. Dean Witter American Value Fund
7. Dean Witter Tax-Exempt Securities Trust
8. Dean Witter Tax-Free Daily Income Trust
9. Dean Witter Capital Growth Securities
10. Dean Witter U.S. Government Money Market Trust
11. Dean Witter Precious Metals and Minerals Trust
12. Dean Witter Developing Growth Securities Trust
13. Dean Witter World Wide Investment Trust
14. Dean Witter Value-Added Market Series
15. Dean Witter Utilities Fund
16. Dean Witter Strategist Fund
17. Dean Witter California Tax-Free Daily Income Trust
18. Dean Witter Convertible Securities Trust
19. Dean Witter Intermediate Income Securities
20. Dean Witter World Wide Income Trust
21. Dean Witter S&P 500 Index Fund
22. Dean Witter U.S. Government Securities Trust
23. Dean Witter Federal Securities Trust
24. Dean Witter Multi-State Municipal Series Trust
25. Dean Witter California Tax-Free Income Fund
26. Dean Witter New York Tax-Free Income Fund
27. Dean Witter Select Municipal Reinvestment Fund
28. Dean Witter Variable Investment Series
29. High Income Advantage Trust
30. High Income Advantage Trust II
31. High Income Advantage Trust III
32. InterCapital Insured Municipal Bond Trust
33. InterCapital Insured Municipal Trust
34. InterCapital Insured Municipal Income Trust
35. InterCapital Quality Municipal Investment Trust
36. InterCapital Quality Municipal Income Trust
37. Dean Witter Government Income Trust
38. Municipal Income Trust
39. Municipal Income Trust II
40. Municipal Income Trust III
41. Municipal Income Opportunities Trust
42. Municipal Income Opportunities Trust II
43. Municipal Income Opportunities Trust III
44. Municipal Premium Income Trust
45. Prime Income Trust

<PAGE>

46. Dean Witter Short-Term U.S. Treasury Trust
47. Dean Witter Diversified Income Trust
48. InterCapital California Insured Municipal Income Trust
49. Dean Witter Health Sciences Trust
50. Dean Witter Global Dividend Growth Securities
51. InterCapital Quality Municipal Securities
52. InterCapital California Quality Municipal Securities
53. InterCapital New York Quality Municipal Securities
54. Dean Witter Retirement Series
55. Dean Witter Limited Term Municipal Trust
56. Dean Witter Short-Term Bond Fund
57. Dean Witter Global Utilities Fund
58. InterCapital Insured Municipal Securities
59. InterCapital Insured California Municipal Securities
60. Dean Witter High Income Securities
61. Dean Witter National Municipal Trust
62. Dean Witter International SmallCap Fund
63. Dean Witter Mid-Cap Growth Fund
64. Dean Witter Select Dimensions Investment Series
65. Dean Witter Global Asset Allocation Fund
66. Dean Witter Balanced Growth Fund
67. Dean Witter Balanced Income Fund
68. Dean Witter Intermediate Term U.S. Treasury Trust
69. Dean Witter Hawaii Municipal Trust
70. Dean Witter Japan Fund
71. Dean Witter Capital Appreciation Fund
72. Dean Witter Information Fund
73. Dean Witter Fund of Funds
74. Dean Witter Special Value Fund
75. Dean Witter Income Builder Fund
76. Dean Witter Financial Services Trust
77. Dean Witter Market Leader Trust
78. Dean Witter Managers' Select Fund
79. Dean Witter Liquid Asset Fund Inc.
80. Dean Witter Natural Resource Development Securities Inc.
81. Dean Witter Dividend Growth Securities Inc.
82. Dean Witter European Growth Fund Inc.
83. Dean Witter Pacific Growth Fund Inc.
84. Dean Witter High Yield Securities Inc.
85. Dean Witter Global Short-Term Income Fund Inc.
86. InterCapital Income Securities Inc.