<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES Two World Trade Center,
LETTER TO THE SHAREHOLDERS October 31, 2000 New York, New York 10048
DEAR SHAREHOLDER:
The U.S. economy continued to register solid economic growth over the 12-month
period ended October 31, 2000. Unemployment reached a 30-year low and real
personal consumption accelerated. The tightening labor market and rising oil
prices led to increased concern that inflationary pressures would surface. In
response, the Federal Reserve Board increased the federal funds rate 100 basis
points in three moves between February and May. The federal funds rate
currently stands at a nine-year high of 6.50 percent. The Fed's shift toward a
tighter monetary policy, which began last year, caused long-term interest rates
to increase in 1999. Early this year, however, the U.S. Treasury announced its
plans to utilize a growing federal budget surplus to reduce its debt. This
announcement precipitated a rally in the bond market. By the end of October
2000, long-term interest rates had declined significantly. Vigilance by the
Federal Reserve in controlling inflation and signs of moderating economic
activity also contributed to more favorable bond market conditions.
MUNICIPAL MARKET CONDITIONS
The long-term insured municipal index, which stood at 6.03 percent at the end
of October 1999, reached a high of 6.19 percent in mid January before declining
to 5.65 percent at the end of October 2000. Because bond prices move inversely
to changes in interest rates, bond prices declined in 1999 but improved this
year. The municipal yield curve flattened 79 basis points during the year and
the pickup for extending maturities from one to 30 years declined from 225
basis points in October 1999 to 146 basis points at the end of this October.
The ratio of municipal yields as a percentage of Treasury yields has
historically been used as a measure of relative value. A rising yield ratio
indicates weaker relative performance by municipals, a declining ratio stronger
performance. Over the past 12 months, this ratio has averaged 98 percent.
Long-term municipal yields have generally followed the trend of U.S. Treasury
yields. For the past three years the high and low ratios have been 100 percent
and 83 percent, respectively.
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
LETTER TO THE SHAREHOLDERS October 31, 2000, continued
During the first 10 months of 2000, municipal underwriting was 17 percent below
the same period last year. Refunding activity, the most interest-rate-sensitive
component of supply, dropped nearly 60 percent. Approximately 40 percent of the
underwritings were enhanced with bond insurance, versus an average of 50
percent in the previous three years.
30-YEAR BOND YIELDS 1994-2000
Date AAA Ins Tsy % Relationship
---- ------- --- --------------
12/31/93 5.40% 6.34% 85.17%
01/31/94 5.40 6.24 86.54%
02/28/94 5.80 6.66 87.09%
03/31/94 6.40 7.09 90.27%
04/29/94 6.35 7.32 86.75%
05/31/94 6.25 7.43 84.12%
06/30/94 6.50 7.61 85.41%
07/29/94 6.25 7.39 84.57%
08/31/94 6.30 7.45 84.56%
09/30/94 6.55 7.81 83.87%
10/31/94 6.75 7.96 84.80%
11/30/94 7.00 8.00 87.50%
12/30/94 6.75 7.88 85.66%
01/31/95 6.40 7.70 83.12%
02/28/95 6.15 7.44 82.66%
03/31/95 6.15 7.43 82.77%
04/28/95 6.20 7.34 84.47%
05/31/95 5.80 6.66 87.09%
06/30/95 6.10 6.62 92.15%
07/31/95 6.10 6.86 88.92%
08/31/95 6.00 6.66 90.09%
09/29/95 5.95 6.48 91.82%
10/31/95 5.75 6.33 90.84%
11/30/95 5.50 6.14 89.58%
12/29/95 5.35 5.94 90.07%
01/31/96 5.40 6.03 89.55%
02/29/96 5.60 6.46 86.69%
03/29/96 5.85 6.66 87.84%
04/30/96 5.95 6.89 86.36%
05/31/96 6.05 6.99 86.55%
06/28/96 5.90 6.89 85.63%
07/31/96 5.85 6.97 83.93%
08/30/96 5.90 7.11 82.98%
09/30/96 5.70 6.93 82.25%
10/31/96 5.65 6.64 85.09%
11/29/96 5.50 6.35 86.61%
12/31/96 5.60 6.63 84.46%
01/31/97 5.70 6.79 83.95%
02/28/97 5.65 6.80 83.09%
03/31/97 5.90 7.10 83.10%
04/30/97 5.75 6.94 82.85%
05/30/97 5.65 6.91 81.77%
06/30/97 5.60 6.78 82.60%
07/30/97 5.30 6.30 84.13%
08/31/97 5.50 6.61 83.21%
09/30/97 5.40 6.40 84.38%
10/31/97 5.35 6.15 86.99%
11/30/97 5.30 6.05 87.60%
12/31/97 5.15 5.92 86.99%
01/31/98 5.15 5.80 88.79%
02/28/98 5.20 5.92 87.84%
03/31/98 5.25 5.93 88.53%
04/30/98 5.35 5.95 89.92%
05/29/98 5.20 5.80 89.66%
06/30/98 5.20 5.65 92.04%
07/31/98 5.18 5.71 90.72%
08/31/98 5.03 5.27 95.45%
09/30/98 4.95 5.00 99.00%
10/31/98 5.05 5.16 97.87%
11/30/98 5.00 5.06 98.81%
12/31/98 5.05 5.10 99.02%
01/31/99 5.00 5.09 98.23%
02/28/99 5.10 5.58 91.40%
03/31/99 5.15 5.63 91.47%
04/30/99 5.20 5.66 91.87%
05/31/99 5.30 5.83 90.91%
06/30/99 5.47 5.96 91.78%
07/31/99 5.55 6.10 90.98%
08/31/99 5.75 6.06 94.88%
09/30/99 5.85 6.05 96.69%
10/31/99 6.03 6.16 97.89%
11/30/99 6.00 6.29 95.39%
12/31/99 5.97 6.48 92.13%
01/31/00 6.18 6.49 95.22%
02/29/00 6.04 6.14 98.37%
03/31/00 5.82 5.83 99.83%
04/30/00 5.91 5.96 99.16%
05/31/00 5.91 6.01 98.34%
06/30/00 5.84 5.90 98.98%
07/31/00 5.73 5.78 99.13%
08/31/00 5.62 5.67 99.12%
09/30/00 5.74 5.89 97.45%
10/31/00 5.65 5.79 97.58%
Source: Municipal Market Data - A Division of Thomson Financial Group and
Bloomberg L.P.
PERFORMANCE
During the 12-month period ended October 31, 2000, the net asset value (NAV) of
Morgan Stanley Dean Witter Quality Municipal Securities (IQM) increased from
$13.45 to $14.28 per share. Based on this change, plus a reinvestment of
tax-free dividends totaling $0.805 per share, the Trust's total NAV return was
13.44 percent. IQM's value on the New York Stock Exchange (NYSE) increased from
$12.0625 to $12.125 per share during this period. Based on this change plus
reinvestment of tax-free dividends, IQM's total market return was 7.40 percent.
As of October 31, 2000, IQM's share price was at a 15.09 percent discount to
its NAV.
2
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
LETTER TO THE SHAREHOLDERS October 31, 2000, continued
Monthly dividends for the fourth quarter of 2000 were declared in September.
Beginning with the October payment, the monthly dividend was decreased from
$0.0675 to $0.0625 per share. The new dividend reflects current earnings and
the Trust's level of undistributed net investment income which was $0.077 per
share on October 31, 2000, versus $0.124 per share 12 months earlier.
PORTFOLIO STRUCTURE
The Trust's investments were diversified among 12 long-term sectors and 56
credits. At the end of October, the portfolio's average maturity was 18 years.
Average duration, a measure of portfolio sensitivity to interest rates, was 7.9
years. Generally, bonds with longer durations have greater volatility. The
accompanying charts and tables provide current information on the portfolio's
credit quality, maturity distribution and sector diversification. Optional call
provisions and their respective cost (book) yields by year are also shown.
THE IMPACT OF LEVERAGING
As discussed in previous shareholder reports, the total income available for
distribution to common shareholders includes incremental income provided by the
Trust's outstanding Auction Rate Preferred shares (ARPS). ARPS dividends
reflect prevailing short-term interest rates on maturities normally ranging
from one week to one year. Incremental income to common shareholders depends on
two factors. The first factor is the amount of ARPS outstanding, while the
second is the spread between the portfolio's cost yield and ARPS expenses (ARPS
auction rate and expenses). The greater the spread and amount of ARPS
outstanding, the greater the amount of incremental income available for
distribution to common shareholders. The level of net investment income
available for distribution to common shareholders varies with the level of
short-term interest rates. ARPS leverage also increases the price volatility of
common shares and has the effect of extending portfolio duration.
During the 12-month period, ARPS leverage contributed approximately $0.05 per
share to common share earnings. The Trust's five ARPS series totaling $97
million represented 29 percent of net assets. Yields on the IQM's four weekly
ARPS series ranged between 3.00 and 5.50 percent. The yield on the Trust's
12-month ARPS series with a January 2001 rollover is 4.05 percent. In
comparison, the yield on 1-year municipal notes increased from 3.77 percent at
the end of October 1999 to 4.19 percent at the end of this October.
3
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
LETTER TO THE SHAREHOLDERS October 31, 2000, continued
LOOKING AHEAD
The slower pace of economic growth and moderate inflation have caused the bond
market to anticipate a shift by the Federal Reserve Board to a neutral bias in
its monetary policy and the possibility of easing in 2001. This should create a
favorable environment for municipal bonds.
The Trust's procedure for reinvestment of all dividends and distributions on
common shares is through purchases in the open market. This method helps
support the market value of the Trust's shares. In addition, we would like to
remind you that the Trustees have approved a procedure whereby the Trust may,
when appropriate, purchase 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. The Trust may also utilize procedures to reduce
or eliminate the amount of outstanding ARPS, including their purchase in the
open market or in privately negotiated transactions. During the fiscal period
ended October 31, 2000, the Trust purchased and retired 856,455 shares of
common stock at a weighted average market discount of 11.64 percent.
We appreciate your ongoing support of Morgan Stanley Dean Witter Quality
Municipal Securities and look forward to continuing to serve your investment
needs.
Very truly yours,
/s/ CHARLES A. FIUMEFREDDO /s/ MITCHELL M. MERIN
-------------------------- ---------------------
CHARLES A. FIUMEFREDDO MITCHELL M. MERIN
Chairman of the Board President
4
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
LETTER TO THE SHAREHOLDERS October 31, 2000, continued
LARGEST SECTORS AS OF OCTOBER 31, 2000
(% OF NET ASSETS)
GENERAL OBLIGATION 17%
TRANSPORTATION 12%
MORTGAGE 11%
WATER & SEWER 11%
IDR/PCR* 11%
PUBLIC FACILITY 8%
HOSPITAL 8%
EDUCATION 7%
ELECTRIC 7%
* INDUSTRIAL DEVELOPMENT/POLLUTION CONTROL REVENUE
PORTFOLIO STRUCTURE IS SUBJECT TO CHANGE.
CREDIT RATINGS AS OF OCTOBER 31, 2000
(% OF TOTAL LONG-TERM PORTFOLIO)
Aa or AA 50%
Aaa or AAA 34%
A or A 16%
AS MEASURED BY MOODY'S INVESTORS SERVICES, INC.
OR STANDARD & POOR'S CORP.
PORTFOLIO STRUCTURE IS SUBJECT TO CHANGE.
DISTRIBUTION BY MATURITY
(% OF NET ASSETS)
-----------------
WEIGHTED AVERAGE
MATURITY 18 YEARS
-----------------
UNDER 1 YEAR 0.5%
1-5 YEARS 0.0%
5-10 YEARS 4.6%
10-20 YEARS 65.3%
20-30 YEARS 25.4%
30+ YEARS 2.5%
PORTFOLIO STRUCTURE IS SUBJECT TO CHANGE.
5
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
LETTER TO THE SHAREHOLDERS October 31, 2000, continued
CALL AND COST (BOOK) YIELD STRUCTURE
(BASED ON LONG-TERM PORTFOLIO)
OCTOBER 31, 2000
BONDS CALLABLE
------------------------
WEIGHTED AVERAGE
CALL PROTECTION: 5 YEARS
------------------------
2000 0%
2001 0%
2002 3%
2003 56%
2004 17%
2005 0%
2006 0%
2007 4%
2008 1%
2009 7%
2010+ 12%
COST (BOOK) YIELD*
------------------------
WEIGHTED AVERAGE
BOOK YIELD: 5.6%
------------------------
2000
2001
2002 4.9%
2003 5.6%
2004 5.6%
2005
2006
2007 5.6%
2008 5.2%
2009 5.4%
2010+ 5.6%
* COST OR "BOOK" YIELD IS THE ANNUAL INCOME EARNED ON A PORTFOLIO INVESTMENT
BASED ON ITS ORIGINAL PURCHASE PRICE BEFORE TRUST OPERATING EXPENSES. FOR
EXAMPLE, THE TRUST IS EARNING A BOOK YIELD OF 4.9% ON 3% OF THE LONG-TERM
PORTFOLIO THAT IS CALLABLE IN 2002.
PORTFOLIO STRUCTURE IS SUBJECT TO CHANGE.
6
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
RESULTS OF ANNUAL MEETING (unaudited)
* * *
On June 22, 2000, an annual meeting of the Trust's shareholders was held for
the purpose of voting on the following matter, the results of which were as
follows:
(1) ELECTION OF TRUSTEES:
Edwin J. Garn
For ........................................................... 13,963,468
Withheld ...................................................... 253,028
Michael E. Nugent
For ........................................................... 13,974,585
Withheld ...................................................... 241,911
Philip J. Purcell
For ........................................................... 13,968,715
Withheld ...................................................... 247,781
The following Trustees were not standing for reelection at this meeting:
Michael Bozic, Charles A. Fiumefreddo, Wayne E. Hedien, Dr. Manuel H.
Johnson and John L. Schroeder. Additionally, James F. Higgins was elected
as a Trustee of the Trust by the Board of Trustees effective July 25, 2000.
7
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
PORTFOLIO OF INVESTMENTS October 31, 2000
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
----------- ---------- ---------- ---------------
<S> <C> <C> <C> <C>
TAX-EXEMPT MUNICIPAL BONDS (97.8%)
General Obligation (17.1%)
$ 5,000 De Kalb County, Georgia, Refg 1993 ............................................ 5.25 % 01/01/20 $ 4,846,900
4,020 Chicago, Illinois, Ser 2000 A (FGIC) .......................................... 6.125 01/01/21 4,230,286
4,000 Anne Arundel County, Maryland, Ser 1999 ....................................... 5.00 05/15/19 3,821,160
10,000 Washington Suburban Sanitation District, Maryland, Refg 1993 Second Ser ....... 5.25 06/01/14 10,080,500
New York, New York,
10,000 1994 Ser D ................................................................... 5.75 08/15/08 10,370,500
5,000 1994 Ser C ................................................................... 5.50 10/01/10 5,116,300
10,000 Metropolitan Government of Nashville & Davidson County, Tennessee,
Refg Ser 1997 ................................................................ 5.125 05/15/25 9,379,100
10,000 Seattle, Washington, Refg Ser 1993 ............................................ 5.65 01/01/20 10,043,300
-------- ------------
58,020 57,888,046
-------- ------------
Educational Facilities Revenue (7.3%)
3,500 District of Columbia, Georgetown University Ser 1993 .......................... 5.25 04/01/13 3,434,165
Illinois Educational Facilities Authority,
4,695 Illinois Wesleyan University Ser 1993 ........................................ 5.70 09/01/23 4,679,131
4,955 Northwestern University Refg Ser 1993 ........................................ 5.375 12/01/21 4,829,738
Massachusetts Health & Educational Facilities Authority,
10,000 Boston College Ser K ......................................................... 5.25 06/01/18 9,731,000
2,100 Wentworth Institute of Technology Ser B (Connie Lee) ......................... 5.50 10/01/23 2,049,159
-------- ------------
25,250 24,723,193
-------- ------------
Electric Revenue (6.7%)
3,000 Los Angeles Department of Water & Power, California, Issue of 1992 ............ 6.375 02/01/20 3,118,140
5,000 South Carolina Public Service Authority, 1993 Refg Ser A (MBIA) ............... 5.50 07/01/21 4,926,750
5,000 Chelan County Public Utility District #1, Washington, Hydro Refg
Ser 1993 G ................................................................... 5.375 06/01/18 4,840,700
10,000 Snohomish County Public Utility District #1, Washington, Ser 1993 B (AMT) ..... 5.80 01/01/24 9,689,700
-------- ------------
23,000 22,575,290
-------- ------------
Hospital Revenue (7.7%)
3,500 Maine Health & Higher Educational Facilities Authority, Ser 1993 D (FSA) ...... 5.50 07/01/18 3,464,615
10,000 Missouri Health & Educational Facilities Authority, Barnes-Jewish Inc/
Christian Health Services Ser 1993 A ......................................... 5.25 05/15/14 9,971,800
10,000 Fairfax County Industrial Development Authority, Virginia, Inova Health
Refg Ser 1993 A .............................................................. 5.25 08/15/19 9,676,800
3,000 Wisconsin Health & Educational Facilities Authority, Catholic Health Corp
Ser 1993 ..................................................................... 5.375 11/15/13 2,908,380
-------- ------------
26,500 26,021,595
-------- ------------
</TABLE>
See Notes to Financial Statements
8
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
PORTFOLIO OF INVESTMENTS October 31, 2000, continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
----------- ---------- ---------- ---------------
<S> <C> <C> <C> <C>
Industrial Development/Pollution Control Revenue (10.7%)
$ 10,000 Hawaii Department of Budget & Finance, Hawaiian Electric Co Inc
Ser 1993 (AMT) (MBIA) ........................................................ 5.45 % 11/01/23 $ 9,575,700
4,000 Calvert County, Maryland, Baltimore Gas & Electric Co Refg
Ser 1993 ..................................................................... 5.55 07/15/14 4,066,840
2,500 Washoe County, Nevada, Sierra Pacific Power Co Ser 1987 (Ambac) ............... 6.30 12/01/14 2,594,175
4,000 Brazos River Authority, Texas, Houston Lighting & Power Co
Ser 1993 (MBIA) .............................................................. 5.60 12/01/17 4,018,040
5,000 Marshall County, West Virginia, Ohio Power Co Ser B (MBIA) .................... 5.45 07/01/14 5,047,050
10,000 Weston, Wisconsin, Wisconsin Public Service Co Refg Ser 1993 .................. 6.90 02/01/13 10,748,800
-------- ------------
35,500 36,050,605
-------- ------------
Mortgage Revenue - Multi-Family (5.1%)
4,010 Illinois Housing Development Authority, 1993 Ser A ............................ 5.90 07/01/12 4,036,185
13,310 Wisconsin Housing & Economic Development Authority, 1993 Ser .................. 5.55 11/01/15 13,005,733
-------- ------------
17,320 17,041,918
-------- ------------
Mortgage Revenue - Single Family (6.1%)
5,000 Alaska Housing Finance Corporation, 1997 Ser A (MBIA) ......................... 6.00 06/01/27 5,036,350
3,830 Connecticut Housing Finance Authority, 1993 SubSer F-1 ........................ 5.60 05/15/11 3,901,353
8,700 Kentucky Housing Corporation, Federally Insured/Gtd Loans 1993 Ser B .......... 5.40 07/01/14 8,710,962
3,000 Virginia Housing Development Authority, 1992 Ser A ............................ 7.10 01/01/25 3,090,930
-------- ------------
20,530 20,739,595
-------- ------------
Public Facilities Revenue (8.0%)
11,000 California Public Works Board, Correctional 1993 Ser D COPs ................... 5.375 06/01/18 11,028,160
4,000 Maine Municipal Bond Bank, 1993 Ser E ......................................... 5.30 11/01/13 4,026,840
2,000 Kansas City School District Building Corporation, Missouri, Elementary
Ser 1993 D (FGIC) ............................................................ 5.00 02/01/14 1,984,540
10,000 Regional Convention & Sports Complex Authority, Missouri, Refg Ser A 1993 ..... 5.60 08/15/17 10,024,800
-------- ------------
27,000 27,064,340
-------- ------------
Resource Recovery Revenue (3.1%)
10,000 Northeast Maryland Waste Disposal Authority, Montgomery County
-------- Ser 1993 A (AMT) ............................................................. 6.30 07/01/16 10,280,600
------------
Transportation Facilities Revenue (12.4%)
5,000 Miami-Dade County, Florida, Miami International Airport Ser 2000 A
(AMT) (FGIC) ................................................................. 6.00 10/01/24 5,211,700
3,000 Hawaii Airports, Refg Ser 2000 B (AMT) (FGIC) ................................. 6.625 07/01/18 3,267,900
3,000 Illinois Toll Highway Authority, Priority Refg 1998 Ser A (FSA) ............... 5.50 01/01/15 3,089,190
5,000 Wayne County, Michigan, Detroit Metropolitan Wayne County Airport
Sub Lien Ser 1993 C (MBIA) ................................................... 5.25 12/01/13 5,017,450
5,000 Minneapolis - St Paul Metropolitan Airports Commission, Minnesota,
Ser 1999 A (FGIC) ............................................................ 5.125 01/01/31 4,662,500
4,000 Nevada Department of Business & Industry, Las Vegas Monorail, 1st Tier
Ser 2000 (Ambac) ............................................................. 5.375 01/01/40 3,773,040
3,000 Pennsylvania Turnpike Commission, Ser A 1998 (Ambac) .......................... 4.75 12/01/27 2,609,340
</TABLE>
See Notes to Financial Statements
9
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
PORTFOLIO OF INVESTMENTS October 31, 2000, continued
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT IN COUPON MATURITY
THOUSANDS RATE DATE VALUE
----------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
$ 9,965 South Carolina Transportation Infrastructure Bank, Ser 1999 A (Ambac) ...... 5.50 % 10/01/16 $ 10,101,321
4,175 Virginia Transportation Board, US Route 58 Corridor Ser 1993 B ............. 5.50 05/15/18 4,186,523
-------- ------------
42,140 41,918,964
-------- ------------
Water & Sewer Revenue (10.7%)
4,000 Phoenix Civic Improvement Corporation, Arizona, Wastewater Refg Ser 1993 ... 5.00 07/01/18 3,784,160
5,000 Los Angeles County Sanitation Districts Financing Authority, California,
1993 Ser A ................................................................ 5.25 10/01/19 4,929,050
Louisville & Jefferson County Metropolitan Sewer District, Kentucky,
3,000 Ser 1993 A (MBIA) ......................................................... 5.50 05/15/21 2,974,410
5,000 Ser 1993 B (MBIA) ......................................................... 5.50 05/15/23 4,930,000
5,020 Massachusetts Water Resources Authority, 1993 Ser C ........................ 5.25 12/01/20 4,850,575
5,000 New York City Municipal Water Finance Authority, New York, 1994 Ser B ...... 5.50 06/15/19 4,959,400
5,905 Philadelphia, Pennsylvania, Water & Wastewater Ser 1993 (FSA) .............. 5.50 06/15/14 5,974,148
4,000 Norfolk, Virginia, Water Ser 1993 (Ambac) .................................. 5.375 11/01/23 3,884,400
-------- ------------
36,925 36,286,143
-------- ------------
Other Revenue (2.9%)
1,000 Florida Department of Environmental Protection, Preservation 2000
Ser 1999 A (FGIC) ......................................................... 5.25 07/01/13 1,013,550
5,000 New York Local Government Assistance Corporation, Ser 1993 C ............... 5.50 04/01/18 5,001,700
4,000 Philadelphia, Pennsylvania, Gas Works Second Ser 1998 (FSA) ................ 5.00 07/01/23 3,684,040
-------- ------------
10,000 9,699,290
-------- ------------
332,185 TOTAL TAX-EXEMPT MUNICIPAL BONDS (Cost $328,670,923)................................................... 330,289,579
-------- ------------
SHORT-TERM TAX-EXEMPT MUNICIPAL OBLIGATIONS (0.5%)
1,000 Idaho Health Facilities Authority, St Lukes Regional Medical Center
Ser 2000 (FSA) (Demand 11/01/00) .......................................... 4.60* 07/01/30 1,000,000
700 Harris County Health Facilities Development Corporation, Texas, Methodist
Hospital Ser 1994 (Demand 11/01/00) ....................................... 4.60* 12/01/25 700,000
-------- ------------
1,700 TOTAL SHORT-TERM TAX-EXEMPT MUNICIPAL OBLIGATIONS (Cost $1,700,000) ................................... 1,700,000
-------- -------------
$333,885 TOTAL INVESTMENTS (Cost $330,370,923) (a) .................................................... 98.3% 331,989,579
========
OTHER ASSETS IN EXCESS OF LIABILITIES ........................................................ 1.7 5,832,632
----- ------------
NET ASSETS ................................................................................... 100.0% $337,822,211
===== ============
</TABLE>
See Notes to Financial Statements
10
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
PORTFOLIO OF INVESTMENTS October 31, 2000, continued
---------------
AMT Alternative Minimum Tax.
COPs Certificates of Participation.
* Current coupon of variable rate demand obligation.
(a) The aggregate cost for federal income tax purposes approximates
the aggregate cost for book purposes. The aggregate gross
unrealized appreciation is $3,917,373 and the aggregate gross
unrealized depreciation is $2,298,717, resulting in net
unrealized appreciation of $1,618,656.
Bond Insurance:
---------------
Ambac Ambac Assurance Corporation.
Connie Lee Connie Lee Insurance Company - A wholly owned subsidiary of Ambac
Assurance Corporation.
FGIC Financial Guaranty Insurance Company.
FSA Financial Security Assurance Inc.
MBIA Municipal Bond Investors Assurance Corporation.
GEOGRAPHIC SUMMARY OF INVESTMENTS
Based on Market Value as a Percent of Net Assets
Alaska ........................ 1.5%
Arizona ....................... 1.1
California .................... 5.6
Connecticut ................... 1.2
District of Columbia .......... 1.0
Florida ....................... 1.8
Georgia ....................... 1.4
Hawaii ........................ 3.8
Idaho ......................... 0.3
Illinois ...................... 6.2
Kentucky ...................... 4.9
Maine ......................... 2.2
Maryland ...................... 8.4
Massachusetts ................. 4.9
Michigan ...................... 1.5
Minnesota ..................... 1.4
Missouri ...................... 6.5
Nevada ........................ 1.9
New York ...................... 7.5
Pennsylvania .................. 3.6
South Carolina ................ 4.5
Tennessee ..................... 2.8
Texas ......................... 1.4
Virginia ...................... 6.2
Washington .................... 7.3
West Virginia ................. 1.5
Wisconsin ..................... 7.9
----
Total ......................... 98.3%
====
See Notes to Financial Statements
11
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2000
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(cost $330,370,923) .................................................... $331,989,579
Cash ..................................................................... 33,582
Interest receivable ...................................................... 6,192,097
Prepaid expenses ......................................................... 27,960
------------
TOTAL ASSETS .......................................................... 338,243,218
------------
LIABILITIES:
Payable for:
Dividends to preferred shareholders ................................... 111,744
Investment management fee ............................................. 103,334
Common shares of beneficial interest repurchased ...................... 97,509
Accrued expenses ......................................................... 108,420
------------
TOTAL LIABILITIES ..................................................... 421,007
------------
NET ASSETS ............................................................ $337,822,211
============
COMPOSITION OF NET ASSETS:
Preferred shares of beneficial interest (1,000,000 shares authorized of
non-participating $.01 par value, 1,940 shares outstanding) ............ $ 97,000,000
------------
Common shares of beneficial interest (unlimited shares authorized of
$.01 par value, 16,861,958 shares outstanding) ......................... 251,465,949
Net unrealized appreciation .............................................. 1,618,656
Accumulated undistributed net investment income .......................... 1,295,261
Accumulated net realized loss ............................................ (13,557,655
------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS .......................... 240,822,211
------------
TOTAL NET ASSETS ...................................................... $337,822,211
============
NET ASSET VALUE PER COMMON SHARE
($240,822,211 divided by 16,861,958 common shares outstanding).......... $14.28
======
</TABLE>
See Notes to Financial Statements
12
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
FINANCIAL STATEMENTS, continued
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 2000
NET INVESTMENT INCOME:
INTEREST INCOME ............................................... $18,563,380
-----------
EXPENSES
Investment management fee ..................................... 1,168,911
Auction commission fees ....................................... 308,365
Professional fees ............................................. 90,216
Transfer agent fees and expenses .............................. 58,165
Shareholder reports and notices ............................... 49,907
Auction agent fees ............................................ 40,439
Registration fees ............................................. 24,832
Trustees' fees and expenses ................................... 18,809
Custodian fees ................................................ 17,621
Other ......................................................... 40,401
-----------
TOTAL EXPENSES ............................................. 1,817,666
Less: expense offset .......................................... (17,581)
-----------
NET EXPENSES ............................................... 1,800,085
-----------
NET INVESTMENT INCOME ...................................... 16,763,295
-----------
NET REALIZED AND UNREALIZED GAIN:
Net realized gain ............................................. 727,547
Net change in unrealized depreciation ......................... 12,898,713
-----------
NET GAIN ................................................... 13,626,260
-----------
NET INCREASE .................................................. $30,389,555
===========
See Notes to Financial Statements
13
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
FINANCIAL STATEMENTS, continued
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE YEAR FOR THE YEAR
ENDED ENDED
OCTOBER 31, 2000 OCTOBER 31, 1999
------------------ -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income ...................................... $ 16,763,295 $ 17,203,701
Net realized gain .......................................... 727,547 449,551
Net change in unrealized appreciation/depreciation ......... 12,898,713 (28,700,689)
------------- -------------
NET INCREASE (DECREASE) ................................. 30,389,555 (11,047,437)
------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Preferred .................................................. (3,824,096) (3,265,064)
Common ..................................................... (13,838,773) (14,171,566)
------------- -------------
TOTAL DIVIDENDS ......................................... (17,662,869) (17,436,630)
------------- -------------
Decrease from transactions in common shares of
beneficial interest ...................................... (10,279,055) (7,168,282)
------------- -------------
NET INCREASE (DECREASE) ................................. 2,447,631 (35,652,349)
NET ASSETS:
Beginning of period ........................................ 335,374,580 371,026,929
------------- -------------
END OF PERIOD
(Including undistributed net investment income of
$1,295,261 and $2,194,835, respectively)................. $337,822,211 $335,374,580
============ ============
</TABLE>
See Notes to Financial Statements
14
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS October 31, 2000
1. ORGANIZATION AND ACCOUNTING POLICIES
Morgan Stanley Dean Witter Quality Municipal Securities (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 current income which is exempt from federal income tax.
The Trust was organized as a Massachusetts business trust on March 3, 1993 and
commenced operations on September 29, 1993.
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 - Portfolio securities are valued by an outside
independent pricing service approved by the Trustees. The pricing service has
informed the Trust that in valuing the portfolio securities, it uses both a
computerized matrix of tax-exempt securities and evaluations by its staff, in
each case based on information concerning market transactions and quotations
from dealers which reflect the bid side of the market each day. The portfolio
securities are thus valued by reference to a combination of transactions and
quotations for the same or other securities believed to be comparable in
quality, coupon, maturity, type of issue, call provisions, trading
characteristics and other features deemed to be relevant. 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 and nontaxable 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 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
15
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS October 31, 2000, continued
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 tax purposes are reported as distributions of paid-in-capital.
2. INVESTMENT MANAGEMENT AGREEMENT
Pursuant to an Investment Management Agreement with Morgan Stanley Dean Witter
Advisors Inc. (the "Investment Manager"), the Trust pays the Investment Manager
a management fee, calculated weekly and payable monthly, by applying the annual
rate of 0.35% to the Trust's weekly net assets.
3. SECURITY TRANSACTIONS AND TRANSACTIONS WITH AFFILIATES
The cost of purchases and proceeds from sales of portfolio securities,
excluding short-term investments, for the year ended October 31, 2000
aggregated $15,913,772 and $25,185,921, respectively.
Morgan Stanley Dean Witter Trust FSB, an affiliate of the Investment Manager,
is the Trust's transfer agent. At October 31, 2000, the Trust had transfer
agent fees and expenses payable of approximately $100.
The Trust has an unfunded noncontributory defined benefit pension plan covering
all independent Trustees of the Trust 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 October 31, 2000
included in Trustees' fees and expenses in the Statement of Operations amounted
to $7,342. At October 31, 2000, the Trust had an accrued pension liability of
$41,319, which is included in accrued expenses in the Statement of Assets and
Liabilities.
4. PREFERRED SHARES OF BENEFICIAL INTEREST
The Trust is authorized to issue up to 1,000,000 non-participating preferred
shares of beneficial interest having a par value of $.01 per share, in one or
more series, with rights as determined by the Trustees, without approval of the
common shareholders. The Trust has issued Series 1 though 5, Auction Rate
Preferred Shares ("Preferred Shares") which have a liquidation value of $50,000
per share plus the redemption premium, if any, plus accumulated but unpaid
dividends, whether or not declared, thereon to
16
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS October 31, 2000, continued
the date of distribution. The Trust may redeem such shares, in whole or in
part, at the original purchase price of $50,000 per share plus accumulated but
unpaid dividends, whether or not declared, thereon to the date of redemption.
Dividends, which are cumulative, are reset through auction procedures.
AMOUNT RANGE OF
SERIES SHARES* IN THOUSANDS* RATE* RESET DATE DIVIDEND RATES**
-------- --------- --------------- ---------- ------------ -----------------
1 340 $17,000 4.13% 11/07/00 3.65% - 4.25%
2 300 15,000 4.13 11/01/00 3.00 - 5.05
3 300 15,000 4.13 11/02/00 3.85 - 4.40
4 600 30,000 4.05 01/09/01 3.23 - 4.05
5 400 20,000 4.13 11/07/00 3.30 - 5.50
---------------
* As of October 31, 2000.
** For the year ended October 31, 2000.
Subsequent to October 31, 2000 and up through December 4, 2000, the Trust paid
dividends to Series 1 through 5 at rates ranging from 3.84% to 4.25%, in the
aggregate amount of $431,868.
The Trust is subject to certain restrictions relating to the preferred shares.
Failure to comply with these restrictions could preclude the Trust from
declaring any distributions to common shareholders or purchasing common shares
and/or could trigger the mandatory redemption of preferred shares at
liquidation value.
The preferred shares, which are entitled to one vote per share, generally vote
with the common shares but vote separately as a class to elect two Trustees and
on any matters affecting the rights of the preferred shares.
5. COMMON SHARES OF BENEFICIAL INTEREST
Transactions in common shares of beneficial interest were as follows:
<TABLE>
<CAPTION>
CAPITAL
PAID IN
EXCESS OF
SHARES PAR VALUE PAR VALUE
-------------- ----------- ---------------
<S> <C> <C> <C>
Balance, October 31, 1998 ................................................ 18,274,813 $182,748 $268,730,538
Treasury shares purchased and retired (weighted average discount 9.41%)* . (556,400) (5,564) (7,162,718)
---------- -------- ------------
Balance, October 31, 1999 ................................................ 17,718,413 177,184 261,567,820
Treasury shares purchased and retired (weighted average discount 11.64%)* (856,455) (8,564) (10,270,491)
---------- -------- ------------
Balance, October 31, 2000 ................................................ 16,861,958 $168,620 $251,297,329
========== ======== ============
</TABLE>
---------------
* The Trustees have voted to retire the shares purchased.
17
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
NOTES TO FINANCIAL STATEMENTS October 31, 2000, continued
6. FEDERAL INCOME TAX STATUS
During the year ended October 31, 2000, the Trust utilized approximately
$727,000 of its net capital loss carryover. At October 31, 2000, the Trust had
a net capital loss carryover of approximately $13,558,000, which may be used to
offset future capital gains to the extent provided by regulations, which will
be available through October 31 of the following years:
AMOUNT IN THOUSANDS
-----------------------------------------------
2002 2003 2004 2005
---- ---- ---- ----
$9,897 $2,809 $716 $136
====== ====== ==== ====
7. DIVIDENDS TO COMMON SHAREHOLDERS
On September 26, 2000, the Trust declared the following dividends from net
investment income:
AMOUNT
PER SHARE RECORD DATE PAYABLE DATE
---------- -------------------- ---------------------
$0.0625 November 3, 2000 November 17, 2000
$0.0625 December 8, 2000 December 22, 2000
8. EXPENSE OFFSET
The expense offset represents a reduction of the custodian fees for earnings on
cash balances maintained by the Trust.
9. RISKS RELATING TO CERTAIN FINANCIAL INSTRUMENTS
The Trust may invest a portion of its assets in residual interest bonds, which
are inverse floating rate municipal obligations. The prices of these securities
are subject to greater market fluctuations during periods of changing
prevailing interest rates than are comparable fixed rate obligations.
At October 31, 2000, the Trust did not hold positions in residual interest
bonds.
18
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
FINANCIAL HIGHLIGHTS
Selected ratios and per share data for a common share of beneficial interest
outstanding throughout each period:
<TABLE>
<CAPTION>
FOR THE YEAR ENDED OCTOBER 31*
------------------------------------------------------------------------
2000 1999 1998 1997 1996
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SELECTED PER SHARE DATA:
Net asset value, beginning of period ..................... $ 13.45 $ 14.99 $ 14.31 $ 13.44 $13.04
------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income ................................... 0.97 0.95 0.95 0.95 0.92
Net realized and unrealized gain (loss) ................. 0.81 (1.57) 0.64 0.69 0.23
------- ------- ------- ------- -------
Total income (loss) from investment operations ........... 1.78 (0.62) 1.59 1.64 1.15
------- ------- ------- ------- -------
Less dividends from:
Net investment income ................................... (0.81) (0.78) (0.75) (0.72) (0.72)
Common share equivalent of dividends paid to preferred
shareholders ........................................... (0.22) (0.18) (0.19) (0.18) (0.17)
-------- ------- -------- -------- -------
Total dividends .......................................... (1.03) (0.96) (0.94) (0.90) (0.89)
-------- ------- -------- -------- -------
Anti-dilutive effect of acquiring treasury shares ........ 0.08 0.04 0.03 0.13 0.14
-------- ------- -------- -------- -------
Net asset value, end of period ........................... $ 14.28 $ 13.45 $ 14.99 $14.31 $13.44
======= ======= ======= ====== ======
Market value, end of period .............................. $12.125 $12.063 $13.938 $12.50 $11.25
======= ======= ======= ====== ======
TOTAL RETURN+ ........................................... 7.40% (8.22)% 18.04% 18.11% 10.39%
RATIOS TO AVERAGE NET ASSETS OF COMMON SHAREHOLDERS:
Total expenses ........................................... 0.77%(1) 0.73 %(1) 0.72%(1) 0.71% 0.72%(1)
Net investment income before preferred stock dividends ... 7.09% 6.52 % 6.46% 6.87% 6.94%
Preferred stock dividends ................................ 1.62% 1.24 % 1.29% 1.30% 1.27%
Net investment income available to common shareholders ... 5.47% 5.28 % 5.17% 5.57% 5.67%
SUPPLEMENTAL DATA:
Net assets, end of period, in thousands .................. $337,822 $335,375 $371,027 $363,509 $364,858
Asset coverage on preferred shares at end of period ...... 348% 345 % 382% 374% 376%
Portfolio turnover rate .................................. 5% 10 % 3% 6% -
</TABLE>
-------------
* The per share amounts were computed using an average number of shares
outstanding during the period.
+ Total return is based upon the current market value on the last day of each
period reported. Dividends are assumed to be reinvested at the prices
obtained under the Trust's dividend reinvestment plan. Total return does
not reflect brokerage commissions.
(1) Does not reflect the effect of expense offset of 0.01%.
See Notes to Financial Statements
19
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
INDEPENDENT AUDITORS' REPORT
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES
OF MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES:
We have audited the accompanying statement of assets and liabilities of Morgan
Stanley Dean Witter Quality Municipal Securities (the "Trust"), including the
portfolio of investments, as of October 31, 2000, and the related statements of
operations and changes in net assets, and the financial highlights for the year
then ended. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit. The statement of changes in net assets for the year ended October 31,
1999 and the financial highlights for each of the respective stated periods
ended October 31, 1999 were audited by other independent accountants whose
report, dated December 9, 1999, expressed an unqualified opinion on that
statement and financial highlights.
We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation
of securities owned as of October 31, 2000, by correspondence with the
custodian. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Morgan Stanley Dean Witter Quality Municipal Securities as of October 31, 2000,
the results of its operations, the changes in its net assets, and the financial
highlights for the year then ended, in conformity with accounting principles
generally accepted in the United States of America.
Deloitte & Touche LLP
New York, New York
December 8, 2000
2000 FEDERAL TAX NOTICE (unaudited)
For the year ended October 31, 2000, all of the Trust's dividends from
net investment income received by both common and preferred shareholder
classes were exempt interest dividends, excludable from gross income for
Federal income tax purposes.
20
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
CHANGE IN INDEPENDENT ACCOUNTANTS
On July 1, 2000 PricewaterhouseCoopers LLP resigned as independent accountants
of the Trust.
The reports of PricewaterhouseCoopers LLP on the financial statements of the
Trust for the past two fiscal years contained no adverse opinion or disclaimer
of opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principle.
In connection with its audits for the two most recent fiscal years and through
July 1, 2000, there have been no disagreements with PricewaterhouseCoopers LLP
on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreements if not resolved
to the satisfaction of PricewaterhouseCoopers LLP would have caused them to
make reference thereto in their report on the financial statements for such
years.
The Trust, with the approval of its Board of Trustees and its Audit Committee,
engaged Deloitte & Touche LLP as its new independent auditors as of July 1,
2000.
21
<PAGE>
MORGAN STANLEY DEAN WITTER QUALITY MUNICIPAL SECURITIES
REVISED INVESTMENT POLICY
On January 26, 2000, the Trustees of Morgan Stanley Dean Witter Quality
Municipal Securities (the "Trust") approved an investment policy whereby the
Trust would be permitted to invest up to 10% of its assets in inverse floating
rate municipal obligations. The inverse floating rate municipal obligations in
which the Trust will invest are typically created through a division of a fixed
rate municipal obligation into two separate instruments, a short-term
obligation and a long-term obligation. The interest rate on the short-term
obligation is set at periodic auctions. The interest rate on the long-term
obligation is the rate the issuer would have paid on the fixed income
obligation: (i) plus the difference between such fixed rate and the rate on the
short-term obligation, if the short-term rate is lower than the fixed rate; or
(ii) minus such difference if the interest rate on the short-term obligation is
higher than the fixed rate. The interest rates on these obligations generally
move in the reverse direction of market interest rates. If market interest
rates fall, the interest rate on the obligation will increase and if market
interest rates increase, the interest rate on the obligation will fall. Inverse
floating rate municipal obligations offer the potential for higher income than
is available from fixed rate obligations of comparable maturity and credit
rating. They also carry greater risks. In particular, the prices of inverse
floating rate municipal obligations are more volatile, i.e., they increase and
decrease in response to changes in interest rates to a greater extent than
comparable fixed rate obligations.
22
<PAGE>
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<PAGE>
TRUSTEES
-----------------------------------------------------
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
Wayne E. Hedien
James F. Higgins
Dr. Manuel H. Johnson
Michael E. Nugent
Philip J. Purcell
John L. Schroeder
OFFICERS
-----------------------------------------------------
Charles A. Fiumefreddo
Chairman and Chief Executive Officer
Mitchell M. Merin
President
Barry Fink
Vice President, Secretary and General Counsel
James F. Willison
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 AUDITORS
-----------------------------------------------------
Deloitte & Touche LLP
Two World Financial Center
New York, New York 10281
INVESTMENT MANAGER
-----------------------------------------------------
Morgan Stanley Dean Witter Advisors Inc.
Two World Trade Center
New York, New York 10048
MORGAN STANLEY
DEAN WITTER
QUALITY
MUNICIPAL
SECURITIES
ANNUAL REPORT
OCTOBER 31, 2000
