TCW DW TERM TRUST 2003, N-30D, 1996-12-03

TCW DW TERM TRUST 2003
N-30D, 1996-12-03

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<PAGE>

TCW/DW TERM TRUST 2003
Two World Trade Center
New York, New York 10048

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

For the six-month period ended September 30, 1996, TCW/DW Term Trust
2003's net asset value per share increased modestly from $8.88 to $8.89.
Based on this change, and including reinvestment of dividends totaling
approximately $0.28 per share, the Trust's total return for the period was
3.92 percent. Over the same period, the market price of the Trust's shares on
the New York Stock Exchange (NYSE) increased from $7.25 to $7.625 per share.
Based on this change, and including reinvestment of dividends, the Trust's
total return for the period was 9.17 percent. The Trust's investment
performance is largely attributable to the narrowing of the market discount
to net asset value of the Trust's shares from 17.0 percent to 14.2 percent
during the period.

In August, the Trust raised its monthly dividend from $0.045 to $0.0485
per share to reflect an increase in the Trust's portfolio earnings, which was
largely the result of the Federal Reserve Board's decision to cut short-term
interest rates by 25 basis points in July and December 1995 and January of
this year.

THE MARKET

During the six-month period under review, the yield curve steepened
slightly while the overall level of interest rates remained relatively
constant amid light trading volumes and mixed economic reports. Data released
during the period indicated little or no threat of significant inflation in
the economy. However, stronger gross domestic product, employment, housing
and consumer confidence data showed signs of a robust level of activity.

Minutes of the August meeting of the Federal Reserve Board's Federal Open
Market Committee were interpreted by some investors as an indication that the
central bank was likely to tighten monetary policy before the end of the year
in response to the increase in economic activity. Accordingly, investors
anticipate a modest tightening of short-term rates while maintaining a
neutral outlook on intermediate to long term interest rates.

According to the Trust's investment adviser, TCW Funds Management, Inc.
(TCW) the recent rise in long-term interest rates reduced mortgage prepayment
risk, which aided the recent performance of mortgage-backed securities. The
issuance of new collateralized mortgage obligations (CMOs) is currently at a
fraction of the volume generated in previous years, lending support to
mortgage yield spreads.

THE PORTFOLIO

Approximately 70 percent of the Trust is invested in AAA-rated mortgage
pass-through securities or CMOs with durations, average lives or expected
maturity dates that correspond closely to the termination date of the Trust.
An additional 19 percent is invested in inverse floating rate CMOs issued by
U.S. government agencies. Inverse floaters have coupons that reset by a
multiple in a direction opposite that of a specified index. The remaining 11
percent is invested in AAA-rated municipal bonds and short-term investments.
The municipal bond holdings play an important role as the Trust seeks to
achieve its objective of returning the original $10 offering price to
shareholders at maturity. On September 30, 1996, the Trust's degree of
leverage (the ratio of debt to assets) was 31 percent of total assets.

<PAGE>

LOOKING AHEAD

The Trust's investment adviser is generally positive regarding the
mortgage-backed sector over the long-term. Although signs of robust economic
activity have reappeared in recent months, real interest rates (interest
rates minus inflation) remain at historically high levels. (In the past,
periods of strong bond market performance have correlated with high real
rates of interest). The Trust's net asset and NYSE market values will
continue to fluctuate as both respond to changes in market conditions and
interest rates.

We would like to remind you that the Trustees have approved a procedure
whereby the Trust may attempt, when appropriate, to reduce or eliminate a
market value discount from net asset value by repurchasing shares in the open
market or in privately negotiated transactions at a price not above market
value or net asset value, whichever is lower at the time of purchase. During
the six month period under review, the Trust purchased 3,124,300 shares of
beneficial interest at a weighted average market discount of 15.24 percent.

We appreciate your support of TCW/DW Term Trust 2003 and look forward to
continuing to serve your investment needs and objectives.

Very truly yours,

/s/ Charles A. Fiumefreddo
----------------------
Charles A. Fiumefreddo
Chairman of the Board

<PAGE>

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TCW/DW TERM TRUST 2003
Portfolio of Investments September 30, 1996 (unaudited)
- -----------------------------------------------------------------------------

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ------------------------------------------------------------ --------- ---------- --------------
<S> <C> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS (122.2%)
U.S. GOVERNMENT AGENCIES (89.8%)
$ 7,150 Federal Home Loan Mortgage Corp. 1409 S (PAC) ............... 9.87+ % 11/15/07 $ 5,898,751
70,000 Federal Home Loan Mortgage Corp. 1465 G (PAC)++ ............ 7.00 12/15/07 69,104,728
11,000 Federal Home Loan Mortgage Corp. 1479 M (PAC) ............... 7.50 10/15/22 10,367,337
8,100 Federal Home Loan Mortgage Corp. 1498 N (PAC) ............... 7.50 04/15/23 7,608,144
11,600 Federal Home Loan Mortgage Corp. 1504 B (PAC) ............... 7.00 12/15/22 10,594,140
20,594 Federal Home Loan Mortgage Corp. 1505 LA .................... 7.00 08/15/22 19,573,511
21,675 Federal Home Loan Mortgage Corp. 1507 L ..................... 7.00 10/15/22 20,596,437
11,289 Federal Home Loan Mortgage Corp. 1517 O (PAC) ............... 7.50 01/15/23 10,622,538
9,700 Federal Home Loan Mortgage Corp. 1522 K++ ................... 6.50 12/15/22 8,845,180
2,406 Federal Home Loan Mortgage Corp. 1524 SA .................... 8.50+ 05/15/08 1,998,591
6,001 Federal Home Loan Mortgage Corp. 1527 QD .................... 7.50 01/15/07 6,087,156
17,099 Federal Home Loan Mortgage Corp. 1535 B ..................... 7.00 01/15/23 16,277,041
8,166 Federal Home Loan Mortgage Corp. 1539 SA .................... 7.638+ 06/15/08 5,797,776
42,385 Federal Home Loan Mortgage Corp. 1542 N (PAC)++ ............ 7.00 01/15/22 40,927,304
38,223 Federal Home Loan Mortgage Corp. 1543 UG (PAC)++ ........... 7.00 01/15/23 36,390,843
17,005 Federal Home Loan Mortgage Corp. 1544 M ..................... 7.332+ 07/15/08 12,376,224
8,461 Federal Home Loan Mortgage Corp. 1556 SA .................... 9.512+ 08/15/13 6,028,119
12,360 Federal Home Loan Mortgage Corp. 1563 SA .................... 8.083+ 08/15/08 9,594,450
16,914 Federal Home Loan Mortgage Corp. 1565 IB (TAC) .............. 5.80+ 08/15/08 12,479,195
17,355 Federal Home Loan Mortgage Corp. 1576 SA .................... 5.294+ 09/15/08 31,182,055
32,363 Federal Home Loan Mortgage Corp. 1602 PW++ .................. 6.50 12/15/21 10,721,876
14,703 Federal Home Loan Mortgage Corp. 1604 S ..................... 5.909+ 11/15/08 12,917,624
16,371 Federal Home Loan Mortgage Corp. 1606 KD (PAC) .............. 7.249+ 11/15/08 15,110,331
39,760 Federal Home Loan Mortgage Corp. G 15 PA ++ ................. 7.00 12/25/21 38,146,734
6,710 Federal National Mortgage Assoc. 1993-101 SA (TAC) ......... 9.227+ 06/25/08 5,994,862
6,394 Federal National Mortgage Assoc. 1993-101 SB (TAC) ......... 11.026+ 06/25/08 4,963,705
4,526 Federal National Mortgage Assoc. 1993-114 SC ................ 9.00+ 07/25/08 3,817,563
32,200 Federal National Mortgage Assoc. 1993-121 B++ ............... 7.00 03/25/23 30,880,869
19,250 Federal National Mortgage Assoc. 1993-135 S ................. 6.499+ 07/25/08 14,100,625
12,570 Federal National Mortgage Assoc. 1993-135 SB ................ 6.685+ 06/25/08 9,333,058
26,400 Federal National Mortgage Assoc. 1993-141 B++ ............... 7.00 04/25/23 25,316,309
9,344 Federal National Mortgage Assoc. 1993-141 SA ................ 10.00+ 03/25/23 8,041,854
31,579 Federal National Mortgage Assoc. 1993-165 SM (TAC) ......... 7.082+ 05/25/23 24,266,527
11,589 Federal National Mortgage Assoc. 1993-173 S ................. 5.925+ 09/25/08 9,405,659
71,000 Federal National Mortgage Assoc. 1993-21 H (PAC)++ ......... 7.00 03/25/22 68,546,858
12,210 Federal National Mortgage Assoc. 1993-20 L .................. 7.00 12/25/22 11,617,889
7,210 Federal National Mortgage Assoc. 1993-24 C (PAC) ........... 7.50 09/25/22 6,939,625
26,250 Federal National Mortgage Assoc. 1993-206 N++ ............... 6.50 11/25/23 24,424,058
7,037 Federal National Mortgage Assoc. 1993-233 J ................. 6.00 06/25/08 6,659,215
12,293 Federal National Mortgage Assoc. 1993-40 K .................. 7.00 04/25/08 11,868,497
15,398 Federal National Mortgage Assoc. 1993-41 C (PAC) ........... 7.00 03/25/21 15,136,788
9,907 Federal National Mortgage Assoc. 1993-63 SD (TAC) .......... 8.136+ 05/25/08 7,959,379
4,854 Federal National Mortgage Assoc. 1993-65 SC ................. 8.873+ 06/25/12 4,067,039

</TABLE>

<PAGE>

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TCW/DW TERM TRUST 2003
Portfolio of Investments September 30, 1996 (unaudited)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ------------------------------------------------------------ --------- ---------- --------------
<S> <C> <C> <C> <C>
$12,823 Federal National Mortgage Assoc. 1993-72 S .................. 8.75+ % 05/25/08 $ 10,779,438
15,947 Federal National Mortgage Assoc. 1993-72 SA ................. 7.307+ 05/25/08 10,400,184
6,579 Federal National Mortgage Assoc. 1993-86 SD ................. 10.306+ 05/25/08 5,600,374
9,019 Federal National Mortgage Assoc. 1993-93 SA ................. 40.454+ 05/25/08 7,421,129
13,292 Federal National Mortgage Assoc. 1993-95 SE ................. 10.512+ 06/25/08 11,198,315
10,000 Federal National Mortgage Assoc. 1993-98 N .................. 7.00 06/25/23 9,550,000
13,093 Federal National Mortgage Assoc. 1993-196 SA ................ 8.249+ 10/25/08 10,907,734
38,585 Federal National Mortgage Assoc. G 1993-26 A++ .............. 7.00 07/25/23 36,149,177
--------------
TOTAL U.S. GOVERNMENT AGENCIES
(IDENTIFIED COST $893,284,614) .................................................. 814,592,815
--------------
PRIVATE ISSUES (32.4%)
7,165 Bear Stearns Mortgage Securities Inc. 1993-6 A7 (PAC) ...... 7.10 06/25/24 6,981,577
14,026 Bear Stearns Mortgage Securities Inc. 1993-8 A7 (PAC) ...... 7.50 08/25/24 13,998,452
54,416 Bear Stearns Mortgage Securities Inc. 1993-8 A11 (TAC) ..... 7.50 08/25/24 52,320,984
25,800 Chase Mortgage Finance Corp. 1993-G A10 (PAC) ............... 7.00 05/25/24 23,804,993
4,784 First Boston Mortgage Securities Corp. 1993-5 A15 .......... 7.30 03/25/09 4,724,200
36,683 General Electric Capital Mortgage Services 1994-1 A8 ....... 6.50 01/25/24 31,717,131
14,252 Prudential Home Mortgage Securities 1993-23 A12 (PAC)++ .... 6.50 07/25/08 13,194,195
27,363 Prudential Home Mortgage Securities 1993-35 A12 ............ 6.75 09/25/08 25,646,576
18,000 Prudential Home Mortgage Securities 1993-60 A3 (PAC) ....... 6.75 12/25/23 16,060,865
36,408 Residential Funding Mortgage Securities I 1993-S 40 A8 (TAC) 6.75 11/25/23 33,717,542
5,315 Ryland Mortgage Securities Corp. 1993-3 7 (PAC)++ .......... 6.71 08/25/08 4,926,040
28,218 Salomon Brothers Mortgage Securities VII Inc. 1993-3 A7C ... 7.20 08/25/23 27,598,395
40,500 Salomon Brothers Mortgage Securities VII Inc. 1993-5 A4 .... 7.39* 10/25/18 38,981,250
--------------
TOTAL PRIVATE ISSUES
(IDENTIFIED COST $310,126,562) .................................................. 293,672,199
--------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(IDENTIFIED COST $1,203,411,176) ................................................ 1,108,265,014
--------------
U.S. GOVERNMENT AGENCIES MORTGAGE
PASS-THROUGH SECURITIES (4.7%)
11,327 Federal Home Loan Mortgage Corp. PC Gold .................... 6.00 06/01/08 10,749,616
2,544 Federal National Mortgage Assoc. ............................ 5.50 02/01/09 2,244,883
27,171 Federal National Mortgage Assoc. ............................ 6.50 06/01/00 24,482,712
5,060 Federal National Mortgage Assoc. ............................ 7.00 08/01/08 4,654,756
--------------
TOTAL U.S. GOVERNMENT AGENCIES MORTGAGE
PASS-THROUGH SECURITIES
(IDENTIFIED COST $43,870,802) ................................................... 42,131,967

--------------
</TABLE>

<PAGE>
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TCW/DW TERM TRUST 2003
Portfolio of Investments September 30, 1996 (unaudited)
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT (IN COUPON MATURITY
THOUSANDS) RATE DATE VALUE
- ----------- ------------------------------------------------------------ --------- ---------- --------------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS (15.8%)
EDUCATIONAL FACILITIES REVENUE (3.5%)
$ 5,000 Maricopa County Unified School District #41, Arizona,
Gilbert Refg (FGIC) ........................................ 0.00% 01/01/03 $ 3,660,500
6,465 Maricopa County Unified School District #97, Arizona,
Deer Valley Refg (Secondary MBIA) .......................... 0.00 07/01/04 4,362,064
6,000 Maricopa County Unified School District #28, Arizona,
Kyrene Elementary Refg Ser 1993 B (FGIC) ................... 0.00 07/01/04 4,048,320
11,445 Houston Independent School District, Texas, Refg ........... 0.00 08/15/04 7,674,444
Spring Independent School District, Texas,
8,205 Refg Ser 1993 .............................................. 0.00 02/15/03 5,970,369
8,100 Refg Ser 1993 .............................................. 0.00 02/15/04 5,571,018
--------------
31,286,715
--------------
ELECTRIC REVENUE (3.8%)
12,840 Austin, Texas, Combined Ser A (MBIA) ........................ 0.00 11/15/02 9,511,230
5,200 Lower Colorado River Authority, Texas, Jr Lien 4th Ser (FGIC) 0.00 01/01/04 3,598,712
San Antonio, Texas,
12,700 Electric & Gas Refg Ser A (AMBAC) .......................... 0.00 02/01/03 9,259,062
17,500 Electric & Gas Refg Ser A (AMBAC) .......................... 0.00 02/01/04 12,059,950
--------------
34,428,954
--------------
GENERAL OBLIGATION (4.2%)
19,650 North Slope Boro, Alaska, Ser 1992 A (MBIA) ................. 0.00 06/30/02 14,643,770
5,000 Scottsdale, Arizona, Refg (Secondary MBIA) .................. 0.00 07/01/04 3,396,650
Port of Oakland, California,
3,000 Refg Ser 1993 F (MBIA) ..................................... 0.00 11/01/03 2,106,869
3,500 Refg Ser 1993 F (MBIA) ..................................... 0.00 11/01/04 2,321,900
6,500 New Orleans, Louisiana, Refg (AMBAC) ........................ 0.00 09/01/04 4,348,760
16,000 Pennsylvania, Second Ser 1992 (Secondary MBIA) .............. 0.00 07/01/04 10,926,880
--------------
37,744,829
--------------
HOSPITAL REVENUE (0.7%)
10,000 California Statewide Communities Development Authority,
UniHealth Ser A (AMBAC) .................................... 0.00 10/01/04 6,662,100
--------------

OTHER REVENUE (1.5%)
5,460 Rosemont, Illinois, Tax Increment Ser C-3 (FGIC) ........... 0.00 12/01/03 3,792,025
16,040 Texas State Public Finance Authority, Refg Ser 1990 (MBIA) . 0.00 02/01/05 10,421,830
--------------
14,213,855
--------------
WATER & SEWER REVENUE (2.1%)
Houston, Texas,
10,000 Water & Sewer Jr Lien Ser C (AMBAC) ........................ 0.00 12/01/03 6,993,800
18,640 Water & Sewer Jr Lien Ser C (AMBAC) ........................ 0.00 12/01/04 12,313,584
--------------
19,307,384
--------------
TOTAL MUNICIPAL BONDS (IDENTIFIED COST $139,769,913.07) .............. 143,643,837
--------------
</TABLE>

<PAGE>
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- ------------

PC Participation Certificate.

PAC Planned Amortization Class.

TAC Targeted Amortization Class.

+ Inverse floater: interest rate moves inversely to a designated
index, such as LIBOR (London Inter-Bank Offered Rate) or COFI
(Cost of Funds Index), typically at a multiple of the changes of
the relevant index rate.

++ Some or all of these securities are pledged in connection with
reverse repurchase agreements.

* Floating rate securities. Rate shown is the rate in effect at
September 30, 1996.

(a) Securities were purchased on a discount basis. The interest rates
shown have been adjusted to reflect a money market equivalent
yield.

(b) The aggregate cost for federal income tax purposes approximates
identified cost. The aggregate gross unrealized appreciation was
$3,955,439 and the aggregate gross unrealized depreciation was
$96,966,512, resulting in net unrealized depreciation of
$93,011,073.

Bond Insurance:
- ---------------

AMBAC AMBAC Indemnity Corporation.

FGIC Financial Guaranty Insurance Company.

MBIA Municipal Bond Investors Assurance Corporation.

See Notes to Financial Statements

<PAGE>

TCW/DW TERM TRUST 2003
Financial Statements
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>

STATEMENT OF ASSETS AND LIABILITIES STATEMENT OF OPERATIONS
September 30, 1996 (unaudited) For the year ended September 30, 1996 (unaudited)
- -----------------------------------------------------------------------------
<S> <C>
</TABLE>

<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in securities, at value
(identified cost $1,396,046,546) .. $1,303,035,473
Cash ................................ 66,450
Interest receivable ................. 6,993,298
Deferred organizational expenses ... 9,961
Prepaid expenses .................... 115,111
--------------
TOTAL ASSETS ...................... 1,310,220,293
--------------
LIABILITIES:
Reverse repurchase agreements ...... 401,039,000
Payable for:
Interest ........................... 1,478,629
Shares of beneficial interest
repurchased ....................... 301,200
Management fee ..................... 296,189
Investment advisory fee ............ 197,459
Accrued expenses and other payables 107,649
Contingencies (Note 9) .............. --
--------------
TOTAL LIABILITIES ................. 403,420,126
--------------
NET ASSETS:
Paid-in-capital ..................... 974,369,987
Net unrealized depreciation ......... (93,011,073)
Accumulated undistributed net
investment income .................. 30,156,646
Accumulated net realized loss ...... (4,715,393)
--------------
NET ASSETS ........................ $ 906,800,167
==============
NET ASSET VALUE PER SHARE,
102,015,340 shares outstanding
(unlimited shares authorized of
$.01 par value) .................... $ 8.89
==============
NET INVESTMENT INCOME:
INTEREST INCOME .................... $ 49,006,732
--------------
EXPENSES
Management fee ...................... 1,762,225
Investment advisory fee ............. 1,174,816
Transfer agent fees and expenses ... 150,650
Registration fees ................... 52,777
Professional fees ................... 45,875
Shareholder reports and notices .... 44,689
Insurance expense ................... 29,753
Custodian fees ...................... 27,189
Pricing fees ........................ 16,910
Trustees' fees and expenses ......... 16,667
Organizational expenses ............. 3,171
Other ............................... 4,263
--------------
TOTAL OPERATING EXPENSES ........... 3,328,985
Interest expense .................... 10,866,437
--------------
TOTAL EXPENSES ..................... 14,195,422
--------------
NET INVESTMENT INCOME .............. 34,811,310
Net change in unrealized
depreciation ...................... (9,996,188)
--------------
NET INCREASE ....................... $ 24,815,122
==============
</TABLE>

See Notes to Financial Statements

<PAGE>

TCW/DW TERM TRUST 2003
Financial Statements (continued)

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

<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE YEAR
ENDED ENDED
SEPTEMBER 30, 1996 MARCH 31, 1996
------------------ --------------
(UNAUDITED)
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ........................................ $ 34,811,310 $ 66,986,679
Net realized loss ............................................ -- (295,785)
Net change in unrealized depreciation ........................ (9,996,188) 86,800,987
------------ -----------
Net increase ................................................ 24,815,122 153,491,881
Dividends from net investment income .......................... (28,671,977) (58,589,855)
Net decrease from transactions in shares of beneficial
interest ...................................................... (23,041,446) (43,280,134)
------------ -----------
Total increase (decrease) ................................... (26,898,301) 51,621,892
NET ASSETS:
Beginning of period ........................................... 933,698,468 882,076,576
------------ -----------
END OF PERIOD (Including undistributed net investment
income of $30,156,646 and $24,017,313, respectively) ........ $906,800,167 $933,698,468
============ ===========
</TABLE>

See Notes to Financial Statements

<PAGE>

TCW/DW TERM TRUST 2003
Financial Statements (continued)
- -----------------------------------------------------------------------------

STATEMENT OF CASH FLOWS For the year ended September 30, 1996 (unaudited)
- -----------------------------------------------------------------------------

<TABLE>
<CAPTION>
INCREASE (DECREASE) IN CASH:
<S> <C>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net investment income .......................................................... $ 34,811,310
Adjustments to reconcile net investment income to net cash provided by
operating
activities:
Decrease in receivables and other assets related to operations ............... 77,720
Increase in payables related to operations .................................... 53,710
Net amortization of discount/premium .......................................... (3,591,338)
------------
Net cash provided by operating activities ................................... 31,351,402
------------
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:
Principal prepayments/sales of investments ..................................... 15,041,533
Net purchases of short-term investments ........................................ (7,625,262)
------------
Net cash provided by investing activities ................................... 7,416,271
------------
CASH FLOWS USED FOR FINANCING ACTIVITIES:
Net payments for shares of beneficial interest repurchased ..................... (23,075,971)
Net proceeds from the issuance of reverse repurchase agreements ............... 13,028,000
Dividends to shareholders from net investment income ........................... (28,671,977)
------------
Net cash used for financing activities ...................................... (38,719,948)
------------
Net increase in cash ........................................................ 47,725
Cash at beginning of period ..................................................... 18,725
------------
CASH BALANCE AT END OF PERIOD ................................................... $ 66,450
============
Cash paid during the period for interest ........................................ $ 10,650,286
============
</TABLE>

See Notes to Financial Statements

<PAGE>

TCW/DW TERM TRUST 2003
Notes to Financial Statements September 30, 1996 (unaudited)
- -----------------------------------------------------------------------------

1. ORGANIZATION AND ACCOUNTING POLICIES -- TCW/DW Term Trust 2003 (the
"Trust") is registered under the Investment Company Act of 1940, as amended,
as a diversified, closed-end management investment company. The Trust's
investment objective is to provide high level of current income and return
$10 per share to shareholders on the termination date. The Trust seeks to
achieve its objective by investing in high quality fixed-income securities.
The Trust was organized as a Massachusetts business trust on January 20, 1993
and commenced operations on April 29, 1993. The Trust will distribute
substantially all of its net assets on or about December 31, 2003 and will
then terminate.

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 the Adviser that sale and bid prices are
not reflective of a security's market value, portfolio securities are
valued at their fair value as determined in good faith under procedures
established by and under the general supervision of the Trustees; (3)
certain portfolio securities may be valued by an outside pricing service
approved by the Trustees. The pricing service utilizes 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, if available,
in determining what it believes is the fair valuation of the portfolio
securities valued by such pricing service; 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
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. The Trust amortizes premiums and accretes
discounts over the life of the respective securities. Interest income is
accrued daily.

C. Federal Income Tax Status --It is the Trust'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 Trust records
dividends and distributions to its shareholders on the record date. The
amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income
tax regulations which may differ from generally accepted accounting
principles. These "book/tax" differences are either considered temporary
or permanent in nature. To the extent these differences are permanent in
nature, such amounts are reclassified within the capital accounts based
on their federal tax-basis treatment; temporary differences do not
require reclassification. Dividends and distributions which exceed net
investment income and net realized capital gains for financial reporting
purposes but not for tax

<PAGE>

TCW/DW TERM TRUST 2003
Notes to Financial Statements September 30, 1996 (unaudited) (continued)
- --------------------------------------------------------------------------------
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.

E. Organizational Expenses -- Dean Witter InterCapital Inc., an
affiliate of Dean Witter Services Company Inc. (the "Manager"), paid the
organizational expenses of the Trust in the amount of approximately
$31,600 which have been reimbursed for the full amount thereof. Such
expenses have been deferred and are being amortized on the straight-line
method over a period not to exceed five years from the commencement of
operations.

2. MANAGEMENT AGREEMENT -- Pursuant to a Management Agreement, the Trust pays
the Manager a management fee, accrued weekly and payable monthly, by applying
the annual rate of 0.39% to the Trust's weekly net assets.

Under the terms of the Management Agreement, the Manager maintains certain
of the Trust'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
Trust who are employees of the Manager. The Manager also bears the cost of
telephone services, heat, light, power and other utilities provided to the
Trust.

3. INVESTMENT ADVISORY AGREEMENT -- Pursuant to an Investment Advisory
Agreement with TCW Funds Management, Inc. (the "Adviser"), the Trust pays the
Adviser an advisory fee, accrued weekly and payable monthly, by applying the
annual rate of 0.26% to the Trust's weekly net assets.

Under the terms of the Investment Advisory Agreement, the Trust has
retained the Adviser to invest the Trust'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 Trust in a manner consistent with its
investment objective. In addition, the Adviser pays the salaries of all
personnel, including officers of the Trust, who are employees of the Adviser.

4. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES -- The proceeds
from sales/prepayments of portfolio securities, excluding short-term
investments, for the year six months ended September 30, 1996 were as
follows:

<TABLE>
<CAPTION>
SALES/PREPAYMENTS
-----------------
<S> <C>
U.S. Government Agencies .......................... $ 3,456,043
Private Issue Collateralized Mortgage Obligations 11,585,499
</TABLE>

Dean Witter Trust Company, an affiliate of the Manager, is the Trust's
transfer agent. At September 30, 1996, the Trust had transfer agent fees and
expenses payable of approximately $37,000.

<PAGE>

<TABLE>
<CAPTION>
CAPITAL PAID
PAR VALUE OF IN EXCESS OF
SHARES SHARES PAR VALUE
------------- ------------ --------------
<S> <C> <C> <C>
Balance, March 31, 1995 .............. 110,834,540 $1,108,345 $1,039,583,222
Treasury shares purchased and retired
(weighted average discount 14.75%)* (5,694,900) (56,949) (43,223,185)
------------- ------------ --------------
Balance, March 31, 1996 .............. 105,139,640 1,051,396 996,360,037
Treasury shares purchased and retired
(weighted average discount 15.24%)* (3,124,300) (31,243) (23,010,203)
------------- ------------ --------------
Balance, September 30, 1996 .......... 102,015,340 $1,020,153 $ 973,349,834
============= ============ ==============
</TABLE>

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

* The Trustees have voted to retire the shares purchased.

6. FEDERAL INCOME TAX STATUS -- At March 31, 1996, the Trust had a net
capital loss carryover of approximately $4,715,000 which will be available to
offset future capital gains to the extent provided by regulations. To the
extent that this carryover loss is used to offset future capital gains, it is
probable that the gains will not be distributed to shareholders.

7. REVERSE REPURCHASE AND DOLLAR ROLL AGREEMENTS -- Reverse repurchase and
dollar roll agreements involve the risk that the market value of the
securities the Trust is obligated to repurchase under the agreement may
decline below the repurchase price. In the event the buyer of securities
under a reverse repurchase or dollar roll agreement files for bankruptcy or
becomes insolvent, the Trust's use of proceeds may be restricted pending a
determination by the other party, or its trustee or receiver, whether to
enforce the Trust's obligation to repurchase the securities.

Reverse repurchase agreements are collateralized by Trust securities with
a market value in excess of the Trust's obligation under the contract. At
September 30, 1996, securities valued at $421,019,074 were pledged as
collateral.

At September 30, 1996, the reverse repurchase agreements outstanding were
$401,039,000 with a weighted interest rate of 5.44% maturing within 50 days.
The maximum and average daily amounts outstanding during the period were
$405,244,553 and $397,330,842, respectively. The weighted average interest
rate during the period was 5.48%.

8. DIVIDENDS -- The Trust declared the following dividends from net
investment income payable to shareholders of record subsequent to September
30, 1996:

<TABLE>
<CAPTION>
DECLARATION AMOUNT PER
DATE SHARE RECORD DATE PAYABLE DATE
- ------------------ ------------ ---------------- ----------------
<S> <C> <C> <C>
September 24, 1996 $0.0485 October 4, 1996 October 18, 1996
October 30, 1996 $0.0485 November 8, 1996 November 22, 1996

</TABLE>

<PAGE>

TCW/DW TERM TRUST 2003
Notes to Financial Statements September 30, 1996 (unaudited) (continued)
- --------------------------------------------------------------------------------
9. LITIGATION -- Two purported class action lawsuits, which were consolidated
for pretrial purposes, were instituted during 1994 in the United States
District Court, Southern District of New York, against the Trust, some of its
Trustees and officers, one of its underwriters, the lead representative of
its underwriters, the Adviser, the Manager and other defendants, by certain
shareholders of the Trust and another trust for which the defendants act in
similar capacities. The plaintiffs in these actions generally alleged that
the defendants made inadequate and misleading disclosures in the prospectus
for the Trust, in particular, as such disclosures relate to the nature and
risks of "inverse floaters," the Trust's investments in those securities, and
the weighted average maturity of the Trust's portfolio. Damages, including
punitive damages, were sought in an unspecified amount. On August 16, 1996,
the actions were dismissed, with prejudice for failure to state a claim.
Plaintiffs did not file a notice of appeal and their time to do so has
expired.

In addition, four purported class action lawsuits have been filed in the
Superior Court for the State of California, County of Orange, against some of
the Trust's Trustees and officers, one of its underwriters, the lead
representative of its underwriters, the Adviser, the Manager and other
defendants -but not against the Trust -by certain shareholders of the
Trust and other trusts for which the defendants act in similar capacities.
These plaintiffs generally allege violations of state statutory and common
law in connection with the marketing of the Trust to customers of one of the
underwriters. Damages, including punitive damages, are sought in an
unspecified amount. On or about October 20, 1995, the plaintiffs filed an
amended complaint consolidating these four actions. All defendants except two
of the Trustees have filed answers and affirmative defenses to the
consolidated amended complaint. The two Trustees have moved to dismiss the
complaint against them. Certain of the defendants in these suits have
asserted their right to indemnification from the Trust. The ultimate outcome
of these matters is not presently determinable, and no provision has been
made in the Trust's financial statements for the effect, if any, of such
matters.

<PAGE>

TCW/DW TERM TRUST 2003
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 MONTHS FOR THE YEAR FOR THE YEAR APRIL 29, 1993*
ENDED SEPTEMBER ENDED MARCH ENDED MARCH THROUGH
30, 1996 31, 1996 31, 1995 MARCH 31, 1994
------------------ -------------- -------------- ---------------
(UNAUDITED)
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ...... $ 8.88 $ 7.96 $ 8.81 $ 9.40
------- ------ ------- ------
Net investment income ...................... 0.35 0.63 0.71 0.66
Net realized and unrealized gain (loss) ... (0.10) 0.76 (0.88) (0.62)
------- ------ ------- ------
Total from investment operations ........... 0.24 1.39 (0.17) 0.04
------- ------ ------- ------
Less dividends and distributions from:
Net investment income ..................... (0.28) (0.54) (0.62) (0.62)
Net realized gain ......................... -- (0.06) --
------- ------ ------- ------
Total dividends and distributions .......... (0.28) (0.54) (0.68) (0.62)
Anti-dilutive effect of acquiring treasury
shares .................................... 0.04 0.07 -- --
Less offering costs charged against capital -- -- -- (0.01)
------- ------ ------- ------
Net asset value, end of period ............. $ 8.89 $ 8.88 $ 7.96 $ 8.81
======= ====== ======= ======
Market value, end of period ................ $ 7.625 $ 7.25 $ 6.75 $8.875
======= ====== ======= ======

TOTAL INVESTMENT RETURN+ ................... 9.17%(1) 15.39% (17.00)% (4.33)%(1)
RATIOS TO AVERAGE NET ASSETS:
Operating expenses ......................... 0.74%(2) 0.77% 0.76% 0.73%(2)
Interest expense ........................... 2.42%(2) 2.36% 2.42% 1.06%(2)
Total expenses ............................. 3.16%(2) 3.13% 3.18% 1.79%(2)
Net investment income ...................... 7.75%(2) 6.98% 9.37% 7.61%(2)

SUPPLEMENTAL DATA:
Net assets, end of period, in millions .... $907 $934 $882 $976
Portfolio turnover rate .................... --% 1% -- %++ 53%(1)
</TABLE>

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

* Commencement of operations.

+ Total investment return is based upon the current market value on the first
day of each period reported. Dividends and distributions are assumed to be
reinvested at the prices obtained under the Trust's dividend reinvestment
plan. Total investment return does not reflect brokerage commissions.

++ Less than 0.5%.

(1) Not annualized.

(2) Annualized.

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

Sheldon Curtis
Vice President, Secretary and
General Counsel

Philip A. Barach
Vice President

Jeffrey E. Gundlach
Vice President

Thomas F. Caloia
Treasurer

TRANSFER AGENT

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

INDEPENDENT ACCOUNTANTS

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

MANAGER

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.

TCW/DW TERM TRUST 2003

SEMIANNUAL REPORT

SEPTEMBER 30, 1996