TCW/DW SMALL CAP GROWTH FUND, N-30D, 1998-10-26

TCW/DW SMALL CAP GROWTH FUND
N-30D, 1998-10-26

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<PAGE>

TCW/DW SMALL CAP GROWTH FUND Two World Trade Center, New York, New York 10048
LETTER TO THE SHAREHOLDERS August 31, 1998

DEAR SHAREHOLDER:

We are pleased to present the semiannual letter to shareholders of TCW/DW
Small Cap Growth Fund for the six-month period ended August 31, 1998.

Extremely favorable economic conditions led to a positive environment for
equity investors early in 1998. In July, the market reached new highs as
investors savored the low inflation and falling interest rates, which were
sustained by the Asian financial crisis. However, as the contagion spread
from Asia to Russia and then to Latin America, it became apparent that
neither Europe nor the United States would be spared. Confidence was further
eroded, particularly for foreign investors, by the threat of impeachment
proceedings in Washington, D.C.

Toward the conclusion of the period under review small-cap stocks were
buffeted by the worst two-month decline since late 1987. As a result, TCW/DW
Small Cap Fund's Class B shares registered a total return of -25.09 percent
for the six-month period ended August 31, 1998, versus -26.48 percent for the
Russell 2000 Index and-25.11 percent for the Lipper Analytical Services, Inc.
Small Cap Funds Index. For the same period, the Fund's Class A, C and D
shares produced total returns of -24.79 percent, -25.13 percent and -24.75
percent. THE PERFORMANCE OF THE FUND'S FOUR SHARE CLASSES VARIES BECAUSE OF
DIFFERING EXPENSES.

THE MARKETPLACE

Although the U.S. economy is just beginning to feel the impact of the global
financial crisis, in the view of the Fund's investment adviser, TCW Funds
Management, Inc. (TCW), the worst may be behind us. After the late-August
decline, which saw the Dow Jones Industrial Average plummet more than 500
points, the average stock on the New York Stock Exchange was down nearly 40
percent from its high, and the average NASDAQ stock had dropped nearly 50
percent.

Against a backdrop of sharply lower interest rates, TCW believes that most
valuation measures now suggest that the market may be

<PAGE>
TCW/DW SMALL CAP GROWTH FUND
LETTER TO THE SHAREHOLDERS August 31, 1998, continued

undervalued. Financial adversity, such as the highly publicized rescue of the
hedge fund Long-Term Capital Management, ultimately can prove to be positive
for the markets because it often induces central banks to assume more
accommodative monetary policies. Thus it is not surprising that the
bankruptcy of Orange County, California and the collapse of the Mexican peso
marked the end rather than the beginning of a financial crisis in 1994.
Similarly, while it cannot be said with precision that history will repeat
itself, the bankruptcies of Pan Am and Bank of New England in 1991, Republic
Bank of 1988 and Franklin National in 1974, were all followed by booming
stock markets.

This is not meant to minimize the uncertainty with which investors have had
to cope. Indeed, the dangers are perhaps as serious as any that investors
have faced in several decades. However, many stocks have been sold down to
levels that discount a severe recession, even though the U.S. economy
continues to show impressive strength. According to TCW, current valuations
of many small-cap stocks appear to leave little room for the possibility that
the U.S. economy will be resilient and that the current financial crisis will
end just as previous crises have ended. TCW believes that any improvement in
investor psychology may be followed by a sharp recovery in stock prices,
particularly in the small-cap area. Similarly, TCW expects the lack of
liquidity that has punished small-cap stocks to work in their favor when
investors scramble to rebuild positions in rapidly growing companies.

THE PORTFOLIO

On August 31, 1998, the Fund had net assets of approximately $240 million.
The biggest change in the portfolio over the last six months was the increase
in the consumer area. The portfolio manager took advantage of the sharp
declines in several specialty retail companies, such as Guitar Center, Inc.
and Just For Feet, Inc., and added to the Fund's holdings in this sector. The
portfolio's greatest industry exposure at the end of August was to computer
software & services (20 percent of net assets), business services (17.2
percent) and health care-related (13.6 percent).

The Fund continues to invest in rapidly growing companies where earnings
power and growth rates are considered underestimated by Wall Street
consensus. In order to minimize the impact of a slowing economy TCW is
emphasizing companies that focus on a specific market niche that it believes
to be relatively insulated from macroeconomic trends. Examples include health
care-related companies, such as Sepracor, Inc. and Total Renal Care Holdings,
Inc., which benefit from new products and the intense pressure to lower
costs; technology companies that are exploiting the trend to outsourcing
information technology services (Dendrite International and MAXIMUS, Inc.);
software companies, including VeriSign, Inc. and Yahoo!, Inc., which benefit
from the explosive growth of the Internet, and numerous specialty retailers
(Guitar Center, Inc., Bed Bath & Beyond, Inc. and Just For Feet, Inc., for
example) that are dominating their respective market niches.

<PAGE>
TCW/DW SMALL CAP GROWTH FUND
LETTER TO THE SHAREHOLDERS August 31, 1998, continued

OPPORTUNITIES IN SMALL CAPS

TCW continues to believe that the growth prospects for the kinds of companies
in which the Fund invests make them attractive, even in difficult economic
environments. Given the backdrop of continued economic weakness in Asia and
turmoil in Russia, TCW anticipates inflation, interest rates and economic
growth in the year ahead will be lower than many observers expected just a
few months ago. As a result, TCW believes that smaller companies may exhibit
what many others could find lacking in 1999 -earnings growth. Because
earnings growth is expected to be harder to come by until foreign financial
crises are resolved, the above-average growth that small-cap companies are
poised to deliver could make them particularly attractive to growth-oriented
investors.

Further, TCW is confident that small-cap growth stocks will ultimately
reflect the above-average growth rates of their issuing companies. In TCW's
view, recent underperformance in this sector has created valuation levels for
many small caps that are very compelling. In terms of earnings, sales and
book value, TCW believes that small-cap growth stocks are as attractive
relative to the S&P 500 as they were at the market bottoms in 1990 and 1987.

LOOKING AHEAD

TCW believes that small-cap growth stocks will continue to provide
above-average long-term returns. This outlook is enhanced by the fact that
valuations today are unusually attractive in relation to expected rates of
earnings growth.

We appreciate your support of TCW/DW Small Cap Growth Fund and look forward
to continuing to serve your investment needs.

Very truly yours,

/s/ Charles A. Fiumefreddo
CHARLES A. FIUMEFREDDO
Chairman of the Board

<PAGE>
TCW/DW SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS August 31, 1998 (unaudited)

<TABLE>
<CAPTION>
NUMBER OF
SHARES VALUE
- --------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (98.8%)
Advertising (4.3%)
411,607 Outdoor Systems, Inc.* .......................................... $ 9,569,863
21,800 TMP Worldwide, Inc.* ............................................ 633,562
--------------
10,203,425
--------------
Auto Parts -Original
Equipment (0.4%)
54,600 Tower Automotive, Inc.* ......................................... 999,862
--------------
Biotechnology (1.7%)
83,800 BioReliance Corp.* .............................................. 670,400
174,000 Neose Technologies, Inc.* ....................................... 1,696,500
37,500 Sepracor, Inc.* ................................................. 1,785,937
--------------
4,152,837
--------------
Broadcast Media (3.2%)
167,900 Gemstar International Group Ltd.* ............................... 5,834,525
89,300 Westwood One, Inc.* ............................................. 1,724,606
--------------
7,559,131
--------------
Cable & Telecommunications (0.5%)
71,000 MetroNet Communications Corp. (Class B)* ........................ 1,251,375
--------------
Clothing/Shoe/Accessory
Chains (1.3%)
60,400 AnnTaylor Stores Corp.* ......................................... 1,468,475
104,900 Marks Bros. Jewelers, Inc.* ..................................... 1,586,612
--------------
3,055,087
--------------
Computer Software (3.7%)
11,900 Actuate Software Corp.* ......................................... 127,925
61,800 Brio Techology, Inc.* ........................................... 652,762
82,600 CBT Group PLC (ADR)(Ireland)* ................................... 3,840,900
47,100 Concord Communications, Inc.* ................................... 1,248,150
69,900 Micromuse Inc.* ................................................. 1,004,812
38,900 ModaCAD, Inc.* .................................................. 486,250
67,300 Pegasus Systems, Inc.* .......................................... 1,051,562
92,500 QAD, Inc. ...................................................... 341,094
22,600 TAVA Technologies, Inc. ........................................ 97,462
--------------
8,850,917
--------------
Computer/Video Chains (2.7%)
54,300 MRV Communications, Inc.* ....................................... 302,044
116,500 Network Appliance, Inc.* ........................................ 4,856,594
92,400 Sigma Designs, Inc. ............................................ 167,475
41,100 VeriSign, Inc. .................................................. 1,155,937
--------------
6,482,050
--------------
Computers -Services (0.6%)
41,000 International Network Services* ................................. $ 1,337,625
--------------
Computers Software
& Services (20.0%)
103,200 Aspect Development, Inc.* ....................................... 2,941,200
108,100 Aspen Technology, Inc.* ......................................... 2,560,619
211,350 Citrix Systems, Inc.* ........................................... 12,165,834
181,200 DAOU Systems, Inc.* ............................................. 1,404,300
404,000 Dendrite International, Inc.* ................................... 7,979,000
73,900 Documentum, Inc.* ............................................... 2,641,925
106,500 HNC Software, Inc.* ............................................ 3,860,625
127,900 International Integration Inc.* ................................. 1,966,462
220,000 Legato Systems, Inc.* .......................................... 7,700,000
3,700 MicroStrategy Inc.* ............................................ 105,450
194,400 Siebel Systems, Inc.* .......................................... 3,572,100
51,900 Technisource, Inc.* ............................................. 428,175
36,800 THINK New Ideas, Inc.* .......................................... 496,800
--------------
47,822,490
--------------
Diversified Commercial
Services (12.6%)
58,400 Administaff, Inc.* .............................................. 1,825,000
101,400 CIBER, Inc.* ................................................... 2,547,675
108,200 Compass International Services Corp.* ........................... 1,095,525
58,000 Consolidation Capital Corp.* .................................... 732,250
28,200 Data Processing Resources Corp.* ................................ 705,000
39,700 MemberWorks Inc.* ............................................... 610,387
114,600 META Group, Inc. ............................................... 2,829,187
203,500 National TechTeam, Inc.* ........................................ 1,322,750
102,150 Robert Half International, Inc.* ................................ 4,903,200
274,200 Romac International, Inc.* ...................................... 5,141,250
156,900 Saville Systems Ireland PLC (ADR)(Ireland)* .................... 2,539,819
109,500 Snyder Communications, Inc.* .................................... 3,298,688
80,100 The Vincam Group, Inc.* ......................................... 911,138
97,300 USWeb Corp.* .................................................... 1,362,200
20,600 Whittman-Hart, Inc.* ............................................ 381,100
--------------
30,205,169
--------------
Diversified Financial Services (1.0%)
55,000 CB Richard Ellis Services, Inc.* ................................ 1,509,063
66,200 Imperial Credit Industries, Inc. ............................... 885,425
--------------
2,394,488
--------------
Education (0.1%)
EduTrek International, Inc.
28,900 (Class A)* ...................................................... 195,075
--------------

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>
TCW/DW SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS August 31, 1998 (unaudited) continued

NUMBER OF
SHARES VALUE
- --------------------------------------------------------------------------------------------
Electronic Data Processing (4.0%)
144,700 Artesyn Technologies, Inc.* ..................................... $ 2,152,413
177,700 Avid Technology, Inc.* .......................................... 4,486,925
111,600 Macromedia, Inc.* ............................................... 1,401,975
86,500 SIPEX Corp.* .................................................... 1,551,594
--------------
9,592,907
--------------
Electronics -Semiconductors/
Components (2.3%)
154,800 Maxim Integrated Products, Inc.* ................................ 4,257,000
76,700 Semtech Corp.* .................................................. 1,208,025
--------------
5,465,025
--------------
Foods & Beverages (0.5%)
126,600 Balance Bar Co.* ............................................... 1,171,050
--------------
Health Care Miscellaneous (0.6%)
36,300 IDX Systems Corp.* .............................................. 1,542,750
--------------
Healthcare Products & Services (3.4%)
50,400 Cerner Corp.* ................................................... 1,108,800
248,100 Ocular Sciences, Inc. ........................................... 4,388,269
106,200 QuadraMed Corp.* ................................................ 2,528,888
--------------
8,025,957
--------------
Household Furnishings & Appliances (0.8%)
74,100 Restoration Hardware, Inc.* ..................................... 1,898,813
--------------
Internet (4.8%)
29,300 Broadcast.com Inc.* ............................................. 1,091,425
77,400 E*TRADE Group, Inc.* ............................................ 1,286,775
41,000 Exodus Communications, Inc.* .................................... 1,148,000
3,200 GeoCities* ...................................................... 57,600
47,600 Verio Inc.* ..................................................... 1,011,500
102,000 Yahoo! Inc.* .................................................... 6,936,000
--------------
11,531,300
--------------
Managed Health Care (3.1%)
189,967 Concentra Managed Care, Inc.* .................................. 2,422,079
139,400 Envoy Corp.* ................................................... 3,014,525
32,500 Healthcare Recoveries, Inc.* ................................... 316,875
59,900 Superior Consultant Holdings Corp.* ............................. 1,767,050
--------------
7,520,529
--------------
Marine Transportation (0.4%)
46,200 Atlantic Coast Airlines Holdings, Inc.* ......................... 1,045,275
--------------
Media Conglomerates (3.0%)
159,400 Clear Channel Communications, Inc.* ............................. $ 7,173,000
--------------
Medical Specialties (5.0%)
169,900 Diametrics Medical, Inc.* ....................................... 637,125
172,600 Hanger Orthopedic Group, Inc.* .................................. 2,578,213
150,400 IRIDEX Corp.* ................................................... 695,600
240,900 Safeskin Corp.* ................................................. 8,100,263
--------------
12,011,201
--------------
Medical/Nursing Services (1.5%)
59,700 IMPATH, Inc.* ................................................... 1,410,413
109,667 Total Renal Care Holdings, Inc.* ................................ 2,083,673
--------------
3,494,086
--------------
Oilfield Services/Equipment (0.8%)
175,300 Eagle Geophysical, Inc. ........................................ 964,150
101,600 Friede Goldman International, Inc.* ............................. 1,066,800
--------------
2,030,950
--------------
Other Consumer Services (2.3%)
98,040 CSG Systems International, Inc.* ................................ 3,578,460
85,400 MAXIMUS, Inc.* .................................................. 1,873,463
--------------
5,451,923
--------------
Other Specialty Stores (1.3%)
131,900 Guitar Center, Inc.* ............................................ 2,473,125
93,500 Petco Animal Supplies, Inc* ..................................... 648,656
--------------
3,121,781
--------------
Property -Casualty Insurance (0.4%)
28,000 Executive Risk, Inc. ............................................ 1,008,000
--------------
Restaurants (0.3%)
49,200 IL Fornaio (America) Corp. ...................................... 492,000
--------------
Retail -General Merchandise (2.7%)
144,500 Cost Plus, Inc.* ................................................ 3,720,875
96,975 Dollar Tree Stores, Inc.* ....................................... 2,812,275
--------------
6,533,150
--------------
Retail -Specialty (2.0%)
201,400 Bed Bath & Beyond, Inc.* ........................................ 3,625,200
117,300 Hollywood Entertainment Corp.* .................................. 1,194,994
--------------
4,820,194
--------------

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>
TCW/DW SMALL CAP GROWTH FUND
PORTFOLIO OF INVESTMENTS August 31, 1998 (unaudited) continued

NUMBER OF
SHARES VALUE
- --------------------------------------------------------------------------------------------
Retail -Specialty Apparel (2.5%)
249,475 Just For Feet, Inc.* ........................................... $ 3,508,242
181,700 Sunglass Hut International, Inc.* ............................... 1,044,775
143,700 The North Face, Inc.* .......................................... 1,454,963
--------------
6,007,980
--------------
Semiconductor Equipment (0.5%)
106,000 ATMI, Inc.* ..................................................... 1,232,250
--------------
Semiconductors (0.8%)
109,300 MIPS Technologies, Inc.* ........................................ 1,885,425
--------------
Smaller Banks (0.1%)
7,875 Bank of Granite Corp. ........................................... 228,375
--------------
Telecommunication Equipment (3.6%)
173,500 DSP Communications, Inc.* ....................................... 1,984,406
32,700 Genesys Telecommunications Laboratories, Inc.* .................. 588,600
100,800 GeoTel Communications Corp.* .................................... 3,528,000
84,700 Premisys Communications, Inc.* ................................. 714,656
113,400 Xylan Corp.* .................................................... 1,715,175
--------------
8,530,837
--------------
TOTAL COMMON STOCKS
(Identified Cost $201,484,164) ................................. $236,324,289
--------------
</TABLE>

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN
THOUSANDS VALUE
- --------------------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENT (0.4%)
REPURCHASE AGREEMENT
$1,015 The Bank of New York 5.75%
due 09/01/98 (dated 08/31/98;
proceeds $1,015,493)(a)
(Identified Cost $1,015,331) .................................... $1,015,331
-------------
TOTAL INVESTMENTS
(Identified Cost $202,499,495) (b)................................ 99.2% 237,339,620
OTHER ASSETS IN EXCESS OF LIABILITIES ............................ 0.8 1,989,486
-------- -------------
NET ASSETS ....................................................... 100.0% $239,329,106
======== =============
</TABLE>

- ------------
ADR American Depository Receipt.

* Non-income producing security.

(a) Collateralized by $972,950 U.S. Treasury Note 5.875% due 11/15/05
valued at $1,035,637.

(b) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation is
$77,838,081 and the aggregate gross unrealized depreciation is
$42,997,956, resulting in net unrealized appreciation of $34,840,125.

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>
TCW/DW SMALL CAP GROWTH FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1998 (unaudited)

<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $202,499,495) ......................... $237,339,620
Receivable for:
Investments sold ...................................... 3,692,334
Shares of beneficial interest sold .................... 175,065
Prepaid expenses and other assets ....................... 80,214
--------------
TOTAL ASSETS .......................................... 241,287,233
--------------
LIABILITIES:
Payable for:
Shares of beneficial interest repurchased.............. 955,838
Investments purchased.................................. 406,419
Plan of distribution fee .............................. 248,608
Management fee ........................................ 153,880
Investment advisory fee ............................... 102,587
Accrued expenses and other payables ..................... 90,795
--------------
TOTAL LIABILITIES ..................................... 1,958,127
--------------
NET ASSETS ............................................ $239,329,106
==============
COMPOSITION OF NET ASSETS:
Paid-in-capital.......................................... $197,738,006
Net unrealized appreciation ............................. 34,840,125
Accumulated net investment loss ......................... (3,505,923)
Accumulated undistributed net realized gain ............. 10,256,898
--------------
NET ASSETS ............................................ $239,329,106
==============
CLASS A SHARES:
Net Assets............................................... $853,724
Shares Outstanding (unlimited authorized, $.01 par
value).................................................. 53,600
NET ASSET VALUE PER SHARE ............................. $15.93
======
MAXIMUM OFFERING PRICE PER SHARE,
(net asset value plus 5.54% of net asset value) ..... $16.81
======
CLASS B SHARES:
Net Assets............................................... $237,449,183
Shares Outstanding (unlimited authorized, $.01 par
value).................................................. 15,039,360
NET ASSET VALUE PER SHARE ............................. $15.79
======
CLASS C SHARES:
Net Assets............................................... $1,017,374
Shares Outstanding (unlimited authorized, $.01 par
value).................................................. 64,430
NET ASSET VALUE PER SHARE ............................. $15.79
======
CLASS D SHARES:
Net Assets............................................... $8,825
Shares Outstanding (unlimited authorized, $.01 par
value).................................................. 553
NET ASSET VALUE PER SHARE ............................. $15.96
======
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

7
<PAGE>
TCW/DW SMALL CAP GROWTH FUND
FINANCIAL STATEMENTS, continued

STATEMENT OF OPERATIONS
For the six months ended August 31, 1998 (unaudited)

<TABLE>
<CAPTION>
<S> <C>
NET INVESTMENT INCOME:
INCOME
Interest .................................. $ 106,013
Dividends ................................. 47,249
--------------
TOTAL INCOME ............................ 153,262
--------------
EXPENSES
Plan of distribution fee (Class A shares) 931
Plan of distribution fee (Class B shares) . 1,475,042
Plan of distribution fee (Class C shares) . 5,880
Management fee ............................ 1,025,247
Investment advisory fee ................... 683,499
Transfer agent fees and expenses........... 258,076
Registration fees ......................... 64,889
Shareholder reports and notices ........... 51,707
Custodian fees ............................ 24,457
Professional fees ......................... 24,167
Trustees' fees and expenses ............... 19,241
Organizational expenses ................... 15,378
Other ..................................... 10,671
--------------
TOTAL EXPENSES .......................... 3,659,185
--------------
NET INVESTMENT LOSS ..................... (3,505,923)
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain.......................... 13,848,319
Net change in unrealized appreciation .... (91,060,964)
--------------
NET LOSS ................................ (77,212,645)
--------------
NET DECREASE .............................. $(80,718,568)
==============
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS

8
<PAGE>
TCW/DW SMALL CAP GROWTH FUND
FINANCIAL STATEMENTS, continued

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
AUGUST 31, 1998 FEBRUARY 28, 1998*
- ------------------------------------------------------ --------------- ------------------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss ................................... $ (3,505,923) $ (6,259,873)
Net realized gain ..................................... 13,848,319 8,132,612
Net change in unrealized appreciation ................. (91,060,964) 87,911,112
--------------- ------------------
NET INCREASE (DECREASE) ............................. (80,718,568) 89,783,851
Net decrease from transactions in shares of beneficial
interest.............................................. (21,828,002) (16,691,187)
--------------- ------------------
NET INCREASE (DECREASE) ............................. (102,546,570) 73,092,664
NET ASSETS:
Beginning of period.................................... 341,875,676 268,783,012
--------------- ------------------
END OF PERIOD
(Including a net investment loss of $3,505,923 and
$0, respectively) ................................... $ 239,329,106 $341,875,676
=============== ==================
</TABLE>

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

* Class A, Class C and Class D shares were issued July 28, 1997.

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>
TCW/DW SMALL CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS August 31, 1998 (unaudited)

1. ORGANIZATION AND ACCOUNTING POLICIES

TCW/DW Small Cap Growth Fund (the "Fund") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as a non-diversified, open-end
management investment company. The Fund's investment objective is capital
appreciation. The Fund seeks to achieve its objective by investing primarily
in common stocks and other equity securities of lesser known, smaller
capitalization domestic and foreign companies. The Fund was organized as a
Massachusetts business trust on March 11, 1992 and commenced operations on
August 2, 1993. On July 28, 1997, the Fund commenced offering three
additional classes of shares, with the then current shares designated as
Class B shares.

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

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

The following is a summary of significant accounting policies:

A. VALUATION OF INVESTMENTS--(1) An equity security listed or traded on the
New York or American or other domestic or foreign stock exchange is valued at
its latest sale price on that exchange prior to the time when assets are
valued; if there were no sales that day, the security is valued at the latest
bid price (in cases where securities are traded on more than one exchange,
the securities are valued on the exchange designated as the primary market
pursuant to procedures adopted by the Trustees); (2) all other portfolio
securities for which over-the-counter market quotations are readily available
are valued at the latest available bid price prior to the time of valuation;
(3) when market quotations are not readily available, including circumstances
under which it is determined by TCW Funds Management, Inc. (the "Adviser")
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 (4) short-term debt securities having a
maturity date of more than sixty days at time of purchase are valued on a
mark-to-market basis until sixty days prior to

<PAGE>
TCW/DW SMALL CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS August 31, 1998 (unaudited) continued

maturity and thereafter at amortized cost based on their value on the 61st
day. Short-term debt securities having a maturity date of sixty days or less
at the time of purchase are valued at amortized cost.

B. ACCOUNTING FOR INVESTMENTS--Security transactions are accounted for on
the trade date (date the order to buy or sell is executed). Realized gains
and losses on security transactions are determined by the identified cost
method. Dividend income and other distributions are recorded on the
ex-dividend date. Discounts are accreted over the life of the respective
securities. Interest income is accrued daily.

C. MULTIPLE CLASS ALLOCATIONS--Investment income, expenses (other than
distribution fees), and realized and unrealized gains and losses are
allocated to each class of shares based upon the relative net asset value on
the date such items are recognized. Distribution fees are charged directly to
the respective class.

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

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

F. ORGANIZATIONAL EXPENSES--Morgan Stanley Dean Witter Advisors Inc.,
formerly Dean Witter InterCapital Inc., an affiliate of Morgan Stanley Dean
Witter Services Co. Inc. (the "Manager"), paid the organizational expenses of
the Fund in the amount of $170,413 which have been reimbursed for the full
amount thereof. Such expenses were deferred and fully amortized as of August 1,
1998.

<PAGE>
TCW/DW SMALL CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS August 31, 1998 (unaudited) continued

2. MANAGEMENT AGREEMENT

Pursuant to a Management Agreement, the Fund pays the Manager a management
fee, accrued daily and payable monthly, by applying the annual rate of 0.60%
to the net assets of the Fund determined as of the close of each business
day.

Under the terms of the Management Agreement, the 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 Manager also bears the cost of telephone
services, heat, light, power and other utilities provided to the Fund.

3. INVESTMENT ADVISORY AGREEMENT

Pursuant to an Investment Advisory Agreement, the Fund pays an advisory fee,
accrued daily and payable monthly, by applying the annual rate of 0.40% to
the net assets of the Fund determined as of the close of each business day.

Under the terms of the Investment Advisory Agreement, the Fund has retained
the Adviser to invest the Fund's assets, including placing orders for the
purchase and sale of portfolio securities. The Adviser 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. In addition, the Adviser pays the salaries of all personnel,
including officers of the Fund, who are employees of the Adviser.

4. PLAN OF DISTRIBUTION

Shares of the Fund are distributed by Morgan Stanley Dean Witter Distributors
Inc. (the "Distributor"), an affiliate of the Manager. The Fund has adopted a
Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act. The
Plan provides that the Fund will pay the Distributor a fee which is accrued
daily and paid monthly at the following annual rates: (i) Class A -up to
0.25% of the average daily net assets of Class A; (ii) Class B -1.0% of the
lesser of: (a) the average daily aggregate gross sales of the Class B shares
since the inception of the Fund (not including reinvestment of dividend or
capital gain distributions) less the average daily aggregate net asset value
of the Class B shares redeemed since the Fund's inception upon which a
contingent deferred sales charge has been imposed or waived: or (b) the
average daily net assets of Class B; and (iii) Class C -up to 1.0% of the
average daily net assets of Class C. In the case of Class A shares, amounts
paid under the Plan are paid to the Distributor for services provided. In the
case of Class B and Class C shares, amounts paid under the Plan are paid to
the

<PAGE>
TCW/DW SMALL CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS August 31, 1998 (unaudited) continued

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

In the case of Class B shares, provided that the Plan continues in effect,
any cumulative expenses incurred by the Distributor but not yet recovered may
be recovered through the payment of future distribution fees from the Fund
pursuant to the Plan and contingent deferred sales charges paid by investors
upon redemption of Class B shares. Although there is no legal obligation for
the Fund to pay expenses incurred in excess of payments made to the
Distributor under the Plan and the proceeds of contingent deferred sales
charges paid by investors upon redemption of shares, if for any reason the
Plan is terminated, the Trustees will consider at that time the manner in
which to treat such expenses. The Distributor has advised the Fund that such
excess amounts, including carrying charges, totaled $13,292,649 at August 31,
1998.

In the case of Class A shares and Class C shares, expenses incurred pursuant
to the Plan in any calendar year in excess of 0.25% or 1.0% of the average
daily net assets of Class A or Class C, respectively, will not be reimbursed
by the Fund through payments in any subsequent year, except that expenses
representing a gross sales credit to Morgan Stanley Dean Witter Financial
Advisors, and other selected broker-dealer representatives may be reimbursed
in the subsequent calendar year. For the six months ended August 31, 1998,
the distribution fee was accrued for Class A shares and Class C shares at the
annual rate of 0.25% and 1.0%, respectively.

The Distributor has informed the Fund that for the six months ended August
31, 1998, it received contingent deferred sales charges from certain
redemptions of the Fund's Class B shares and Class C shares of $611,733 and
$1,506, respectively and received $12,573 in front-end sales charges from
sales of the Fund's Class A shares. The respective shareholders pay such
charges which are not an expense of the Fund.

<PAGE>
TCW/DW SMALL CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS August 31, 1998 (unaudited) continued

5. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES

The cost of purchases and proceeds from sales of portfolio securities,
excluding short-term investments, for the six months ended August 31, 1998
aggregated $81,435,261 and $115,658,201, respectively.

For the six months ended August 31, 1998, the Fund incurred brokerage
commissions of $4,500 with Morgan Stanley & Co., an affiliate of the Manager,
for portfolio transactions executed on behalf of the Fund.

Morgan Stanley Dean Witter Trust FSB, an affiliate of the Manager and
Distributor, is the Fund's transfer agent. At August 31, 1998, the Fund had
transfer agent fees and expenses payable of approximately $19,000.

6. SHARES OF BENEFICIAL INTEREST

Transactions in shares of beneficial interest were as follows:

<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
AUGUST 31, 1998 FEBRUARY 28, 1998*
------------------------------ ------------------------------
(UNAUDITED)
SHARES AMOUNT SHARES AMOUNT
------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C>
CLASS A SHARES
Sold 43,737 $ 970,849 13,711 $ 261,176
Redeemed (3,182) (67,251) (666) (13,032)
------------- --------------- ------------- ---------------
Net increase -Class A 40,555 903,598 13,045 248,144
------------- --------------- ------------- ---------------
CLASS B SHARES
Sold 1,916,530 41,439,862 5,153,345 91,806,062
Redeemed (3,036,616) (64,617,021) (6,080,943) (109,578,810)
------------- --------------- ------------- ---------------
Net decrease -Class B (1,120,086) (23,177,159) (927,598) (17,772,748)
------------- --------------- ------------- ---------------
CLASS C SHARES
Sold 30,858 666,692 49,455 935,270
Redeemed (10,181) (221,133) (5,702) (111,875)
------------- --------------- ------------- ---------------
Net increase -Class C 20,677 445,559 43,753 823,395
------------- --------------- ------------- ---------------
CLASS D SHARES
Sold -- -- 553 10,022
------------- --------------- ------------- ---------------
Net decrease in Fund (1,058,854) $(21,828,002) (870,247) $ (16,691,187)
============= =============== ============= ===============
</TABLE>

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

* For Class A, C and D shares, for the period July 28, 1997 (issue date)
through February 28, 1998.

<PAGE>
TCW/DW SMALL CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS August 31, 1998 (unaudited) continued

7. FEDERAL INCOME TAX STATUS

At February 28, 1998, the Fund had a net capital loss carryover of
approximately $3,370,000 which will be available through February 28, 2005 to
offset future capital gains to the extent provided by regulations.

As of February 28, 1998, the Fund had temporary book/tax differences
primarily attributable to capital loss deferrals on wash sales.

<PAGE>
TCW/DW SMALL CAP GROWTH FUND
FINANCIAL HIGHLIGHTS

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

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX FOR THE YEAR ENDED FEBRUARY 28, AUGUST 2, 1993*
MONTHS ENDED ----------------------------------------------------- THROUGH
AUGUST 31, 1998++ 1998***++ 1997 1996** 1995 FEBRUARY 28, 1994
- --------------------------------------- ---------------- ------------ ------------ ------------- ------------ -----------------
(unaudited)
<S> <C> <C> <C> <C> <C> <C>
CLASS B SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .. $21.08 $15.73 $16.24 $9.90 $10.30 $10.00
---------------- ------------ ------------ ------------- ----------- -----------------

Net investment loss .................... (0.21) (0.37) (0.26) (0.19) (0.18) (0.07)
Net realized and unrealized gain
(loss)................................. (5.08) 5.72 (0.25) 6.53 (0.22) 0.37
---------------- ------------ ------------ ------------- ----------- -----------------

Total from investment operations ...... (5.29) 5.35 (0.51) 6.34 (0.40) 0.30
---------------- ------------ ------------ ------------- ----------- -----------------

Net asset value, end of period ......... $15.79 $21.08 $15.73 $16.24 $9.90 $10.30
============ ============ ============= =========== =================

TOTAL INVESTMENT RETURN+................ (25.09)%(1) 34.01 % (3.14)% 64.04 % (3.88)% 3.00 %(1)

RATIOS TO AVERAGE NET ASSETS:
Expenses................................ 2.14 %(2)(4) 2.25 % 2.15 % 2.32 % 2.57 % 2.18 %(2)(3)
Net investment loss .................... (2.05)%(2)(4) (2.05)% (1.70)% (1.75)% (2.04)% (1.75)%(2)(3)
SUPPLEMENTAL DATA:
Net assets, end of period, in
thousands.............................. $237,449 $340,665 $268,783 $153,366 $69,984 $68,209
Portfolio turnover rate ................ 28 %(1) 61 % 42 % 52 % 116 % 69 %(1)

</TABLE>

- ------------
* Commencement of operations.
** Year ended February 29.
*** Prior to July 28, 1997, the Fund issued one class of shares. All shares
of the Fund held prior to that date have been designated Class B
shares.
++ The per share amounts were computed using an average number of shares
outstanding during the period.
+ Does not reflect the deduction of sales charge. Calculated based on the
net asset value as of the last business day of the period.
(1) Not annualized.
(2) Annualized.
(3) If the Fund had bourne all its expenses that were assumed or waived by
the Manager and Adviser, the annualized expense and net investment loss
ratios would have been 2.78% and (2.35)%, respectively.
(4) Reflects overall Fund ratios for investment income and non-class
specific expenses.

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>
TCW/DW SMALL CAP GROWTH FUND
FINANCIAL HIGHLIGHTS, continued

<TABLE>
<CAPTION>
FOR THE PERIOD
FOR THE SIX JULY 28, 1997*
MONTHS ENDED THROUGH
AUGUST 31, FEBRUARY 28,
1998++ 1998++
- -----------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
CLASS A SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .... $21.18 $18.12
------ ------
Net investment loss ..................... (0.25) (0.15)
Net realized and unrealized gain (loss) (5.00) 3.21
------ ------
Total from investment operations ....... (5.25) 3.06
------ ------
Net asset value, end of period .......... $15.93 $21.18
====== ======
TOTAL INVESTMENT RETURN+ ................ (24.79)%(1) 16.89 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses................................. 1.52 %(2)(3) 1.52 %(2)
Net investment loss ..................... (1.43)%(2)(3) (1.32)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands $854 $276
Portfolio turnover rate ................. 28 %(1) 61 %(1)
CLASS C SHARES
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period .... $21.08 $18.12
------ ------
Net investment loss ..................... (0.30) (0.24)
Net realized and unrealized gain (loss) (4.99) 3.20
------ ------
Total from investment operations ....... (5.29) 2.96
------ ------
Net asset value, end of period .......... $15.79 $21.08
====== ======
TOTAL INVESTMENT RETURN +................ (25.13)%(1) 16.39 %(1)
RATIOS TO AVERAGE NET ASSETS:
Expenses................................. 2.27 %(2)(3) 2.29 %(2)
Net investment loss ..................... (2.18)%(2)(3) (2.10)%(2)
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands $1,017 $923
Portfolio turnover rate ................. 28 %(1) 61 %(1)
</TABLE>

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

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>
TCW/DW SMALL CAP GROWTH FUND
FINANCIAL HIGHLIGHTS, continued

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

SEE NOTES TO FINANCIAL STATEMENTS

<PAGE>

TRUSTEES
John C. Argue
Richard M. DeMartini
Charles A. Fiumefreddo
John R. Haire
Dr. Manuel H. Johnson
Thomas E. Larkin, Jr.
Michael E. Nugent
John L. Schroeder
Marc I. Stern

OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer

Thomas E. Larkin, Jr.
President

Barry Fink
Vice President, Secretary and General Counsel

Christopher J. Ainley
Vice President

Charles Larsen
Vice President

Douglas S. Foreman
Vice President

Thomas F. Caloia
Treasurer

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

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

MANAGER
Morgan Stanley Dean Witter Services Company Inc.

ADVISER
TCW Funds Management, Inc.

The financial statements included herein have been taken from the records of
the Fund without examination by the independent accountants and accordingly
they do not express an opinion thereon.

This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and trustees,
fees, expenses and other pertinent information, please see the prospectus of
the Fund.

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

TCW/DW

SMALL CAP
GROWTH FUND

SEMIANNUAL REPORT
AUGUST 31, 1998