UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 1998 or
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission File No. 0-26280
DEAN WITTER SPECTRUM STRATEGIC L.P.
(Exact name of registrant as specified in its charter)
Delaware 13-3782225
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
No.)
c/o Demeter Management Corporation
Two World Trade Center, 62 Fl., New York, NY 10048
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 392-5454
(Former name, former address, and former fiscal year, if changed
since last report)
Indicate by check-mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
<PAGE>
<TABLE>
DEAN WITTER SPECTRUM STRATEGIC L.P.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
September 30, 1998
<CAPTION>
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements
Statements of Financial Condition September 30, 1998
(Unaudited) and December 31, 1997.........................2
Statements of Operations for the Quarters Ended
September 30, 1998 and 1997 (Unaudited)...................3
Statements of Operations for the Nine Months Ended
September 30, 1998 and 1997 (Unaudited)...................4
Statements of Changes in Partners' Capital for the
Nine Months Ended September 30, 1998 and 1997
(Unaudited)...............................................5
Statements of Cash Flows for the Nine Months Ended
September 30, 1998 and 1997 (Unaudited)...................6
Notes to Financial Statements (Unaudited)..............7-
12
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations......13-20
Part II. OTHER INFORMATION
Item 1. Legal Proceedings.....................................21
Item 2. Changes in Securities and Use of Proceeds..........21-22
Item 6. Exhibits and Reports on Form 8-K......................22
</TABLE>
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<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
DEAN WITTER SPECTRUM STRATEGIC L.P.
STATEMENTS OF FINANCIAL CONDITION
<CAPTION>
September 30, December 31,
1998 1997
$ $
(Unaudited)
ASSETS
<S> <C> <C>
Equity in Commodity futures trading accounts:
Cash 59,350,791 57,104,003
Net unrealized gain on open contracts 7,003,461 2,527,613
Net option premiums 22,399 322,123
Total Trading Equity 66,376,651 59,953,739
Subscriptions receivable 674,039 833,259
Interest receivable (DWR) 192,304 223,045
Total Assets 67,242,994 61,010,043
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Redemptions payable 1,070,142 1,366,164
Accrued brokerage fees (DWR) 334,525 360,041
Accrued management fees 180,275 188,257
Incentive fees payable 178,429 -
Total Liabilities 1,763,371 1,914,462
Partners' Capital
Limited Partners (5,752,620.053 and
5,460,628.572 Units, respectively) 64,777,642 58,482,349
General Partner (62,339.891 and
57,258.883 Units, respectively) 701,981 613,232
Total Partners' Capital 65,479,623 59,095,581
Total Liabilities and Partners' Capital 67,242,994 61,01
0,043
NET ASSET VALUE PER UNIT 11.26 10.71
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER SPECTRUM STRATEGIC L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Quarters Ended September 30,
1998 1997
$ $
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized 8,082,719 1,598,983
Net change in unrealized 6,700,615 (2,829,411)
Total Trading Results 14,783,334 (1,230,428)
Interest Income (DWR) 535,743 628,913
Total Revenues 15,319,077 (601,515)
EXPENSES
Brokerage fees (DWR) 958,070 1,187,561
Management fees 514,836 606,131
Incentive fees 178,428 127,509
Total Expenses 1,651,334 1,921,201
NET INCOME (LOSS) 13,667,743 (2,522,716)
NET INCOME (LOSS) ALLOCATION
Limited Partners 13,522,556 (2,507,603)
General Partner 145,187 (15,113)
NET INCOME (LOSS) PER UNIT
Limited Partners
2.33 (.44)
General Partner
2.33 (.44)
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER SPECTRUM STRATEGIC L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Nine Months Ended September 30,
1998 1997
$ $
REVENUES
<S> <C> <C>
Trading profit:
Realized 2,125,953 3,748,975
Net change in unrealized 4,475,848 717,205
Total Trading Results 6,601,801 4,466,180
Interest Income (DWR) 1,732,273 1,678,432
Total Revenues 8,334,074 6,144,612
EXPENSES
Brokerage fees (DWR) 3,169,563 3,305,511
Management fees 1,675,367 1,633,015
Incentive fees 178,428 427,095
Total Expenses 5,023,358 5,365,621
NET INCOME 3,310,716 778,991
NET INCOME ALLOCATION
Limited Partners 3,271,967 770,488
General Partner 38,749 8,503
NET INCOME PER UNIT
Limited Partners
.55 .39
General Partner
.55 .39
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER SPECTRUM STRATEGIC L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Nine Months Ended September 30, 1998 and 1997
(Unaudited)
<CAPTION>
Units of
Partnership Limited General
Interest Partners Partner Total
<S> <C> <C> <C>
<C>
Partners' Capital
December 31, 1996 4,229,101.851 $44,645,423 $473,454
$45,118,877
Continuous Offering 1,640,719.535 19,108,856 130,000
19,238,856
Net Income - 770,488 8,503 778,991
Redemptions (448,952.022) (5,181,426) -
(5,181,426)
Partners' Capital
September 30, 1997 5,420,869.364 $59,343,341 $611,957
$59,955,298
Partners' Capital
December 31, 1997 5,517,887.455 $58,482,349 $613,232
$59,095,581
Continuous Offering1,196,114.812 11,881,056 50,000
11,931,056
Net Income - 3,271,967 38,749
3,310,716
Redemptions (899,042.323) (8,857,730) -
(8,857,730)
Partners' Capital
September 30, 1998 5,814,959.944 $64,777,642 $701,981
$65,479,623
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER SPECTRUM STRATEGIC L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
For the Nine Months Ended September 30,
1998 1997
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
<S>
<C> <C>
Net income: 3,310,716 778,991
Noncash item included in net income:
Net change in unrealized (4,475,848) (
717,205)
(Increase) decrease in operating assets:
Net option premiums 299,724 (
429,165)
Interest receivable (DWR) 30,741 (37,933)
Increase (decrease) in operating liabilities:
Accrued brokerage fees (DWR) (25,516) 72,594
Accrued management fees (7,982) 50,257
Incentive fees payable 178,429
- -
Net cash used for operating activities (689,736)
(282,461)
CASH FLOWS FROM FINANCING ACTIVITIES
Continuous offering 11,931,056 1
9,238,856
(Increase) decrease in subscriptions receivable159,220
(1,233,166)
Decrease in redemptions payable (296,022) (
996,749)
Redemptions of units (8,857,730)
(5,181,426)
Net cash provided by financing activities 2,936,524
11,827,515
Net increase in cash 2,246,788 1
1,545,054
Balance at beginning of period 57,104,003 4
5,997,912
Balance at end of period 59,350,791 5
7,542,966
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
DEAN WITTER SPECTRUM STRATEGIC L.P.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
The financial statements include, in the opinion of management,
all adjustments necessary for a fair presentation of the results
of operations and financial condition of Dean Witter Spectrum
Strategic L.P. (the "Partnership"). The financial statements and
condensed notes herein should be read in conjunction with the
Partnership's December 31, 1997 Annual Report on Form 10-K.
1. Organization
Dean Witter Spectrum Strategic L.P. is a limited partnership
organized to engage in the speculative trading of futures,
forward and options contracts on commodities and commodity
related interests, including foreign currencies, financial
instruments, and physical commodities (collectively, "futures
interests"). The Partnership is one of the Dean Witter Spectrum
Series of Funds, comprised of the Partnership, Dean Witter
Spectrum Global Balanced L.P., Dean Witter Spectrum Technical
L.P. and Dean Witter Spectrum Select L.P. The general partner is
Demeter Management Corporation ("Demeter"). The non-clearing
commodity broker is Dean Witter Reynolds Inc. ("DWR"), an
affiliate of Demeter. The clearing commodity broker is Carr
Futures Inc. ("Carr"), providing clearing and execution services.
Both Demeter and DWR are wholly-owned subsidiaries of Morgan
Stanley Dean Witter & Co. ("MSDW"). Demeter has retained
Blenheim Investments, Inc., Willowbridge Associates Inc. and
Stonebrook Capital Management, Inc. ("Stonebrook"), (the "Trading
Advisors"), as the trading advisors
<PAGE>
DEAN WITTER SPECTRUM STRATEGIC L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
for the Partnership.
Effective April 30, 1998, A. Gary Shilling & Co., Inc.
("Shilling") was removed as a Trading Advisor to the Partnership.
All assets formerly managed by Shilling were allocated to
Stonebrook on June 1, 1998.
2. Summary of Significant Accounting Policies
Effective June 1, 1998, brokerage fees were reduced to 1/12 of
7.25% (7.25% annually) of Net Assets as of the first day of the
month.
Stonebrook is paid a monthly management fee equal to 1/12 of 3%
(a 3% annual rate) of the Net Assets allocated to Stonebrook on
the first day of each month.
3. Related Party Transactions
The Partnership's cash is on deposit with DWR and Carr in futures
interest trading accounts to meet margin requirements as needed.
DWR pays interest on these funds based on current 13-week U.S.
Treasury bill rates. Brokerage expenses incurred by the
Partnership are paid to DWR.
4. Financial Instruments
The Partnership trades futures, options and forward contracts in
<PAGE>
DEAN WITTER SPECTRUM STRATEGIC L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
interest rates, stock indices, commodities and currencies.
Futures, options and forwards represent contracts for delayed
delivery of an instrument at a specified date and price. Risk
arises from changes in the value of these contracts and the
potential inability of counterparties to perform under the terms
of the contracts. There are numerous factors which may
significantly influence the market value of these contracts,
including interest rate volatility. At September 30, 1998 and
December 31, 1997, open contracts were:
Contract or Notional Amount
September 30, 1998 December 31, 1997
$ $
Exchange-Traded Contracts
Financial Futures:
Commitments to Purchase 522,161,000 87,114,000
Commitments to Sell 22,866,000 69,871,000
Options Written 1,131,000 -
Commodity Futures:
Commitments to Purchase 68,536,000 32,034,000
Commitments to Sell 29,530,000 24,672,000
Options Written 1,600,000 -
Foreign Futures:
Commitments to Purchase 258,783,000 119,070,000
Commitments to Sell 25,369,000 5,387,000
Off-Exchange-Traded
Forward Currency Contracts
Commitments to Purchase - 748,000
Commitments to Sell 1,350,000 748,000
A portion of the amounts indicated as off-balance-sheet risk in
forward currency contracts is due to offsetting forward
commitments to purchase and to sell the same currency on the same
date in the future. These commitments are economically
offsetting, but are not offset in the forward market until the
settlement date.
<PAGE>
DEAN WITTER SPECTRUM STRATEGIC L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The net unrealized gains on open contracts are reported as a
component of "Equity in Commodity futures trading accounts" on
the Statements of Financial Condition and totaled $7,003,461 and
$2,527,613 at September 30, 1998 and December 31, 1997,
respectively.
Of the $7,003,461 net unrealized gain on open contracts at
September 30, 1998, $7,006,094 related to exchange-traded futures
and options contracts and $(2,633) related to off-exchange-traded
forward currency contracts.
The $2,527,613 net unrealized gain on open contracts at December
31, 1997 all related to exchange-traded futures contracts.
Exchange-traded futures contracts held by the Partnership at
September 30, 1998 and December 31, 1997 mature through December
1999 and December 1998, respectively. Off-exchange-traded
forward currency contracts held by the Partnership at September
30, 1998 and December 31, 1997 mature through October 1998 and
January 1998, respectively.
The contract amounts in the above table represent the
Partnership's extent of involvement in a particular class of
financial instrument, but not the credit risk associated with
counterparty non-performance. The credit risk associated with
<PAGE>
DEAN WITTER SPECTRUM STRATEGIC L.P.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
these instruments is limited to the amounts reflected in the
Partnership's Statements of Financial Condition.
The Partnership also has credit risk because DWR and Carr act as
the futures commission merchants or the counterparties, with
respect to most of the Partnership's assets. Exchange-traded
futures and futures styled options contracts are marked to market
on a daily basis, with variations in value settled on a daily
basis. Each of DWR and Carr, as a futures commission merchant
for the Partnership's exchange-traded futures and futures styled
options contracts, are required, pursuant to regulations of the
Commodity Futures Trading Commission ("CFTC"), to segregate from
their own assets, and for the sole benefit of their commodity
customers, all funds held by them with respect to exchange-traded
futures and futures styled options contracts, including an amount
equal to the net unrealized gain on all open futures and futures
styled options contracts, which funds, in the aggregate, totaled
$66,356,885 and $59,631,616 at September 30, 1998 and December
31, 1997, respectively. With respect to the Partnership's off-
exchange-traded forward currency contracts, there are no daily
settlements of variations in value nor is there any requirement
that an amount equal to the net unrealized gain on open forward
contracts be segregated. With respect to those off-exchange-
traded forward currency contracts, the Partnership is at risk to
the ability of Carr, the sole counterparty on all such contracts,
to perform. Carr's parent, Credit Agricole Indosuez, has
<PAGE>
DEAN WITTER SPECTRUM STRATEGIC L.P.
NOTES TO FINANCIAL STATEMENTS - (CONCLUDED)
guaranteed to the Partnership payment of the net liquidating
value of the transactions in the Partnership's account with Carr
(including foreign currency contracts).
For the nine months ended September 30, 1998 and the year ended
December 31, 1997, the average fair value of financial
instruments held for trading purposes was as follows:
September 30, 1998
Assets Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 136,904,000 50,858,000
Options on Financial Futures 46,604,000 1,525,000
Commodity Futures 45,908,000 16,688,000
Options on Commodity Futures 3,561,000 2,347,000
Foreign Futures 233,789,000 21,643,000
Options on Foreign Futures 1,410,000 -
Off-Exchange-Traded
Currency Contracts 84,000 512,000
December 31, 1997
Assets Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 30,123,000 70,617,000
Options on Financial Futures 18,562,000 1,261,000
Commodity Futures 80,636,000 24,285,000
Options on Commodity Futures 27,328,000 28,813,000
Foreign Futures 83,507,000 29,983,000
Options on Foreign Futures 4,320,000 479,000
Off-Exchange-Traded
Currency Contracts 507,000 922,000
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity - Assets of the Partnership are deposited with DWR as
non-clearing broker and Carr as clearing broker in separate
futures interest trading accounts established for each Trading
Advisor and are used by the Partnership as margin to engage in
futures interest trading. Such assets are held in either non-
interest bearing bank accounts or in securities approved by the
CFTC for investment of customer funds. The Partnership's assets
held by DWR and Carr may be used as margin solely for the
Partnership's trading. Since the Partnership's sole purpose is
to trade in futures interests, it is expected that the
Partnership will continue to own such liquid assets for margin
purposes.
The Partnership's investment in futures interests may, from time
to time, be illiquid. Most United States futures exchanges limit
fluctuations in certain futures interest prices during a single
day by regulations referred to as "daily price fluctuations
limits" or "daily limit." Pursuant to such regulations, during a
single trading day no trades may be executed at prices beyond the
daily limit. If the price of a particular futures interest has
increased or decreased by an amount equal to the daily limit,
positions in such futures interest can neither be taken nor
liquidated unless traders are willing to effect trades at or
within the limit. Futures interests prices have occasionally
moved the daily limit for several consecutive days with little or
no trading. Such market conditions could prevent the Partnership
<PAGE>
from promptly liquidating its futures interests and result in
restrictions on redemptions.
There is no limitation on daily price moves in trading forward
contracts on foreign currency. The markets for some world
currencies have low trading volume and are illiquid, which may
prevent the Partnership from trading in potentially profitable
markets or prevent the Partnership from promptly liquidating
unfavorable positions in such markets and subjecting it to
substantial losses. Either of these market conditions could
result in restrictions on redemptions.
Capital Resources. The Partnership does not have, nor does it
expect to have, any capital assets. Future redemptions,
exchanges and sales of additional Units of Limited Partnership
Interest will affect the amount of funds available for investment
in futures interests in subsequent periods. Since they are at
the discretion of the Limited Partners, it is not possible to
estimate the amount, and therefore, the impact of future
redemptions, exchanges or sales of additional Units.
Results of Operations
For the Quarter and Nine Months Ended September 30, 1998
For the quarter ended September 30, 1998, the Partnership
recorded total trading revenues including interest income of
$15,319,077 and posted an increase in Net Asset Value per Unit.
The most significant gains were recorded during September
primarily from long positions in U.S., European, and particularly
German interest
<PAGE>
rate futures as both domestic and European bond prices pushed
sharply higher due to a flight-to-quality by investors seeking
"safety" from the recent global economic uncertainty. In the
energy markets, long crude oil futures positions produced
additional gains during September as oil prices increased due to
shrinking supplies and fear that Hurricane Georges would reduce
production in the Gulf of Mexico. These gains mitigated losses
incurred during July and August in this market as oil prices
declined amid speculation that OPEC would not follow through with
a production cut in the near future. A portion of the
Partnership's overall gains was offset by losses recorded in the
soft commodities markets from long cocoa futures positions as
cocoa prices moved lower throughout a majority of the quarter.
Cocoa prices reached 18-month lows during September amid selling
pressure by Ghanaian producers. Additional losses were
experienced in the agricultural markets from long positions in
soybean, soybean products and corn futures as grain prices
steadily declined throughout the quarter on reports of strong
crops and lower demand from overseas. Smaller losses were
recorded in the metals markets during July from short copper and
aluminum futures positions as base metals prices reversed higher
early in the month. Total expenses for the three months ended
September 30, 1998 were $1,651,334, resulting in net income of
$13,667,743. The value of an individual Unit in the Partnership
increased from $8.93 at June 30, 1998 to $11.26 at September 30,
1998.
<PAGE>
For the nine months ended September 30, 1998, the Partnership
recorded total trading revenues including interest income of
$8,334,074 and posted an increase in Net Asset Value per Unit.
The most significant gains were recorded from long German bond
futures positions as prices moved higher during a majority of the
first half of the year coupled with a sharp push higher during
the third quarter. Likewise, long positions in other European
and U.S. interest rate futures contributed additional gains in
the financial futures sector as investors flocked to these
perceived safe investments amid economic and political
instability worldwide during August and September. A portion of
the Partnership's overall gains was offset by losses incurred in
the soft commodities and currency markets. Long sugar futures
positions resulted in losses as sugar prices moved lower
throughout the first quarter. Trading in the Japanese yen also
resulted in year-to-date losses, particularly from short
positions held during early April as the value of the yen spiked
suddenly higher versus the U.S. dollar amid new optimism
regarding the Japanese economic stimulus package. In the metals
markets, smaller losses were experienced from long silver futures
positions as silver prices declined sharply during May. In the
agricultural markets, long grain futures positions held during
the third quarter incurred losses as prices declined on news of
increasing supplies amid decreasing demand, returning previously
recorded gains in this sector. Total expenses for the nine
months ended September 30, 1998 were $5,023,358, resulting in net
income of $3,310,716. The value of an individual Unit in the
<PAGE>
Partnership increased from $10.71 at December 31, 1997 to $11.26
at September 30, 1998.
For the Quarter and Nine Months Ended September 30, 1997
For the quarter ended September 30, 1997, the Partnership
recorded total trading losses net of interest income of $601,515,
and posted a decrease in Net Asset Value per Unit. Losses were
recorded during September from short positions in S&P 500 Index
futures as domestic equity prices moved higher. Additional
losses were recorded during August from long positions in U.S.
and European financial futures as prices in these markets
declined. Smaller losses were recorded from short-term price
volatility in agricultural futures during July and September, as
well as in copper futures during August and July. These losses
were partially offset by gains in currencies as short positions
in the German mark profited from a sharp decline in value
relative to the U.S. dollar during July. Additional gains
recorded during August from short positions in heating oil
futures and long positions in cocoa futures also helped to
mitigate overall Partnership losses during the quarter. Total
expenses for the three months ended September 30, 1997 were
$1,921,201, resulting in a net loss of $2,522,716. The value of
an individual Unit in the Partnership decreased from $11.50 at
June 30, 1997 to $11.06 at September 30, 1997.
For the nine months ended September 30, 1997, the Partnership
recorded total trading revenues including interest income of
$6,144,612, and posted an increase in Net Asset Value per Unit.
<PAGE>
The most significant profits were recorded in currencies as short
German mark positions profited from a downward move relative to
the U.S. dollar during July. Currency gains were also recorded
from transactions involving the Japanese yen during the first
half of the year. Additional gains were recorded in soft
commodities from long cocoa futures positions as cocoa prices
moved higher during March, May, June and August. Smaller profits
were recorded from trading energy futures, particularly crude and
heating oil futures, during the first half of the year and from
long zinc and copper futures during January, February and May.
These gains were partially offset by losses recorded from trading
in global interest rate futures during January, April, June and
August. Smaller losses from trading S&P 500 Index futures during
the second and third quarter also offset a portion of overall
Partnership gains for the first nine months of the year. Total
expenses for the nine months ended September 30, 1997 were
$5,365,621 resulting in net income of $778,991. The value of an
individual Unit in the Partnership increased from $10.67 at
December 31, 1996 to $11.06 at September 30, 1997.
Year 2000 Problem - Commodity pools, like financial and business
organizations and individuals around the world, depend on the
smooth functioning of computer systems. Many computer systems in
use today cannot recognize the computer code for the year 2000,
but revert to 1900 or some other date. This is commonly known as
the "Year 2000 Problem". The Partnership could be adversely
affected if computer systems used by it or any third party with
whom it has a material relationship do not properly process and
<PAGE>
calculate date-related information and data concerning dates on
or after January 1, 2000. Such a failure could have a negative
impact on the handling or determination of futures trades and
prices and the services provided to the Partnership.
MSDW began its planning in response to the Year 2000 Problem in
1995 and currently has several hundred employees working on such
response. It has developed its own Year 2000 compliance plan to
deal with the problem and had the plan approved by the company's
executive management, Board of Directors and Information
Technology Department. Demeter is coordinating with MSDW in
taking steps that both believe are reasonably designed to address
the Year 2000 Problem with respect to Demeter's computer systems
that relate to the Partnership. This includes hardware and
software upgrades, systems consulting and computer maintenance.
Beyond the challenge facing internal computer systems, the
systems failure of any of the third parties with whom the
Partnership has a material relationship - the futures exchanges
and clearing organizations through which it trades, Carr, or the
Trading Advisors - could result in a material financial risk to
the Partnership. Regarding the futures exchanges, all U.S.
futures exchanges will be subject to the monitoring of the CFTC
for their Year 2000 preparedness and the major foreign futures
exchanges are also expected to be subject to market-wide testing
of their Year 2000 compliance during 1999. With respect to Carr
and the Trading Advisors, Demeter intends to monitor their
<PAGE>
progress throughout 1999 in their Year 2000 compliance and, where
applicable, to test its external interface with Carr and the
Trading Advisors.
Finally, MSDW has begun developing various "contingency plans" in
the event that the systems of such third parties fail, and
Demeter intends to consult closely with MSDW in implementing
those plans. MSDW has also recently reported that its
development of such contingency plans is proceeding on schedule.
Despite the best efforts of both Demeter and MSDW, however, there
can be no assurance that the above steps will be sufficient to
avoid any adverse impact to the Partnership, whether from
failures in their own computer systems or those of Carr, the
Trading Advisors or any other third party.
Risks Associated with the Euro - On January 1, 1999, eleven
countries in the European Union intend to establish fixed
conversion rates on their existing sovereign currencies and
convert to a common single currency (the "euro"). During a three-
year transition period, the existing sovereign currencies will
continue to exist but only as a fixed denomination of the euro.
Conversion to the euro will prevent the Trading Advisors from
trading in certain currencies and thereby limit their ability to
take advantage of potential market opportunities that might
otherwise have existed had separate currencies been available to
trade, and could result in losses with respect to those
positions.
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Previously reported. See Form 10-Q for the quarter ended March
31, 1998.
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The Partnership, Dean Witter Spectrum Technical L.P. ("Spectrum
Technical"), and Dean Witter Spectrum Global Balanced L.P.
("Spectrum Global Balanced") collectively registered 10,000,000
Units of Limited Partnership Interest ("Units") pursuant to a
Registration Statement on Form S-1, which became effective on
September 15, 1994 (SEC File Number 33-80146). While such Units
were not allocated to the Partnership, Spectrum Technical and
Spectrum Global Balanced at that time, they were subsequently
allocated for convenience purposes as follows: the Partnership
4,000,000, Spectrum Technical 4,000,000 and Spectrum Global
Balanced 2,000,000. The Partnership, Spectrum Technical and
Spectrum Global Balanced collectively registered an additional
20,000,000 Units pursuant to a new Registration Statement on Form S-
1, which became effective on January 31, 1996 (SEC File Number 333-
00494); such units were allocated to the Partnership, Spectrum
Technical and Spectrum Global Balanced as follows: the Partnership
6,000,000, Spectrum Technical 9,000,000 and Spectrum Global
Balanced 5,000,000. The Partnership, Spectrum Technical and
Spectrum Global Balanced collectively registered an additional
8,500,000 Units pursuant to another Registration Statement on Form
S-1, which become effective on April 30, 1996 (SEC File Number 333-
3222); such Units were allocated to the Partnership, Spectrum
Technical and Spectrum Global
<PAGE>
Balanced as follows: The Partnership 2,500,000, Spectrum Technical
5,000,000 and Spectrum Global Balanced 1,000,000. The managing
underwriter for the Spectrum Series is DWR.
Units are being sold at monthly closings as of the last day of each
month at a price equal to 100% of the Net Asset Value of a Unit as
of the date of such monthly closing.
Through September 30, 1998, 7,946,386.447 Units were sold, leaving
4,553,613.553 Units unsold as of October 1, 1998. The aggregate
price of the Units sold through September 30, 1998 is $83,460,040.
Since DWR has paid all offering expenses and no other expenses are
chargeable against proceeds, 100% of the proceeds of the offering
have been applied to the working capital of the Partnership for use
in accordance with the "Use of Proceeds" section of the Prospectus
included as part of each Registration Statement.
Item 6. Exhibits and Reports on Form 8-K
Reports on Form 8-K - No reports have been filed for the quarter
ended September 30, 1998.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dean Witter Spectrum Strategic
L.P. (Registrant)
By: Demeter Management Corporation
(General Partner)
November 16, 1998 By: /s/ Lewis A. Raibley, III
Lewis A. Raibley, III
Chief Financial Officer
The General Partner which signed the above is the only party
authorized to act for the Registrant. The Registrant has no
principal executive officer, principal financial officer,
controller, or principal accounting officer and has no Board of
Directors.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Dean
Witter Spectrum Strategic L.P. and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 59,350,791
<SECURITIES> 0
<RECEIVABLES> 866,343<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 67,242,994<F2>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 67,242,994<F3>
<SALES> 0
<TOTAL-REVENUES> 8,334,074<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,023,358
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,310,716
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,310,716
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,310,716
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Receivables include subscription receivable of $674,039 and interest
receivable of $192,304.
<F2>In addition to cash and receivables, total assets include net
unrealized gain on open contracts of $7,003,461 and net option
premiums of $22,399.
<F3>Liabilities include redemptions payable of $1,070,142, accrued
brokerage fees of $334,525, accrued management fees of $180,275 and
incentive fees payable of $178,429.
<F4>Total revenues include realized trading revenue of $2,125,953, net
change in unrealized of $4,475,848 and interest income of $1,732,273.
</FN>
</TABLE>
