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, 2000 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
MORGAN STANLEY 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___________
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<TABLE>
MORGAN STANLEY DEAN WITTER SPECTRUM STRATEGIC L.P.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
September 30, 2000
<CAPTION>
PART I. FINANCIAL INFORMATION
<S>
<C>
Item 1. Financial Statements
Statements of Financial Condition September 30, 2000
(Unaudited) and December 31, 1999..........................2
Statements of Operations for the Quarters Ended
September 30, 2000 and 1999 (Unaudited)....................3
Statements of Operations for the Nine Months Ended
September 30, 2000 and 1999 (Unaudited)....................4
Statements of Changes in Partners' Capital for the
Nine Months Ended September 30, 2000 and 1999
(Unaudited)................................................5
Statements of Cash Flows for the Nine Months Ended
September 30, 2000 and 1999 (Unaudited)....................6
Notes to Financial Statements (Unaudited)...............7-
13
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.......14-25
Item 3. Quantitative and Qualitative Disclosures about
Market Risk ........................................25-38
Part II. OTHER INFORMATION
Item 1. Legal Proceedings......................................39
Item 2. Changes in Securities and Use of Proceeds...........39-41
Item 5. Other Information......................................41
Item 6. Exhibits and Reports on Form 8-K....................41-42
</TABLE>
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<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
MORGAN STANLEY DEAN WITTER SPECTRUM STRATEGIC L.P.
STATEMENTS OF FINANCIAL CONDITION
<CAPTION>
September 30, December 31,
2000 1999 $
$
(Unaudited)
ASSETS
<S> <C> <C>
Equity in futures interests trading accounts:
Cash 71,900,368 97,808,328
Net unrealized gain on open contracts (MSIL)
64,081 -
Net unrealized loss on open contracts (MS & Co.)
(350,550) -
Net unrealized gain (loss) on open contracts (Carr) (2,067
,875) 9,563,813
Total net unrealized gain (loss) on open contracts (2,354,344)
9,563,813
Net option premiums 460,781 (11,653)
Total Trading Equity 70,006,805 107,360,488
Subscriptions receivable 911,879 1,743,958
Interest receivable (DWR) 301,636 339,582
Total Assets 71,220,320 109,444,028
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Redemptions payable 1,138,372 847,860
Accrued brokerage fees (DWR) 469,566 590,001
Accrued management fees 222,854 313,646
Total Liabilities 1,830,792 1,751,507
Partners' Capital
Limited Partners (7,118,702.096 and
6,723,390.378 Units, respectively) 68,661,243 106,542,362
General Partner (75,507.615 and
72,581.141 Units, respectively) 728,285 1,150,159
Total Partners' Capital 69,389,528 107,692,521
Total Liabilities and Partners' Capital 71,220,320 10
9,444,028
NET ASSET VALUE PER UNIT 9.65
15.85
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
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<TABLE>
MORGAN STANLEY DEAN WITTER SPECTRUM STRATEGIC L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Quarters Ended September 30,
2000 1999
$ $
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized (3,723,715) 12,435,209
Net change in unrealized (7,176,016) 5,952,922
Total Trading Results (10,899,731) 18,388,131
Interest Income (DWR) 953,188 769,843
Total Revenues (9,946,543) 19,157,974
EXPENSES
Brokerage fees (DWR) 1,474,148 1,537,297
Management fees 704,705 822,398
Incentive fees ____-___ 1,431,393
Total Expenses 2,178,853 3,791,088
NET INCOME (LOSS) (12,125,396) 15,366,886
NET INCOME (LOSS) ALLOCATION
Limited Partners (11,999,310)
15,205,244
General Partner (126,086) 161,642
NET INCOME (LOSS) PER UNIT
Limited Partners
(1.67) 2.34
General Partner
(1.67) 2.34
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
MORGAN STANLEY DEAN WITTER SPECTRUM STRATEGIC L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Nine Months Ended September 30,
2000 1999
$ $
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized (26,885,793) 19,657,278
Net change in unrealized (11,918,157) 11,237,514
Total Trading Results (38,803,950) 30,894,792
Interest Income (DWR) 2,974,323 2,025,084
Total Revenues (35,829,627) 32,919,876
EXPENSES
Brokerage fees (DWR) 4,580,112 4,078,080
Management fees 2,317,950 2,199,368
Incentive fees 979,550
2,451,152
Total Expenses 7,877,612 8,728,600
NET INCOME (LOSS) (43,707,239) 24,191,276
NET INCOME (LOSS) ALLOCATION
Limited Partners (43,250,365) 23,935,478
General Partner (456,874) 255,798
NET INCOME (LOSS) PER UNIT
Limited Partners (6.20) 3.73
General Partner (6.20) 3.73
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
MORGAN STANLEY DEAN WITTER SPECTRUM STRATEGIC L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Nine Months Ended September 30, 2000 and 1999
(Unaudited)
<CAPTION>
Units of
Partnership Limited General
Interest Partners Partner Total
<S> <C> <C> <C> <C>
Partners' Capital,
December 31, 1998 6,096,199.701 $69,671,636 $750,139 $70,4
21,775
Offering of Units 994,405.918 12,368,782 50,000 12,418,782
Net Income
- 23,935,478 255,798 24,191,276
Redemptions (467,357.707) (5,815,724)
- (5,815,724)
Partners' Capital,
September 30, 1999 6,623,247.912 $100,160,172 $1,
055,937 $101,216,109
Partners' Capital,
December 31, 1999 6,795,971.519 $106,542,362 $1,150,159
$107,692,521
Offering of Units 1,300,404.027 15,969,299 35,000
16,004,299
Net Loss
- (43,250,365) (456,874)
(43,707,239)
Redemptions (902,165.835) (10,600,053)
- (10,600,053)
Partners' Capital,
September 30, 2000 7,194,209.711 $68,661,243 $728
,285 $69,389,528
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
MORGAN STANLEY DEAN WITTER SPECTRUM STRATEGIC L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
For the Nine Months Ended September 30,
2000 1999
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) (43,707,239) 2
4,191,276
Noncash item included in net income (loss):
Net change in unrealized 11,918,157 (
11,237,514)
(Increase) decrease in operating assets:
Net option premiums (472,434) 620,276
Interest receivable (DWR) 37,946 (74,964)
Increase (decrease) in operating liabilities:
Accrued brokerage fees (DWR) (120,435) 130,591
Accrued management fees (90,792)
67,263
Incentive fees payable
- 1,286,786
Net cash provided by (used for) operating activities (3
2,434,797) 14,983,714
CASH FLOWS FROM FINANCING ACTIVITIES
Offering of Units 16,004,299 1
2,418,782 Decrease in
subscriptions receivable 832,079 469,151
Increase in redemptions payable 290,512 261,318
Redemptions of Units (10,600,053)
(5,815,724)
Net cash provided by financing activities 6,526,837
7,333,527
Net increase (decrease) in cash (25,907,960) 2
2,317,241
Balance at beginning of period 97,808,328
63,919,054
Balance at end of period 71,900,368
86,236,295
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
MORGAN STANLEY DEAN WITTER SPECTRUM STRATEGIC L.P.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
The unaudited financial statements contained herein include, in
the opinion of management, all adjustments necessary for a fair
presentation of the results of operations and financial condition
of Morgan Stanley 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, 1999 Annual Report on Form 10-K.
1. Organization
Morgan Stanley Dean Witter Spectrum Strategic L.P. is a Delaware
limited partnership organized to engage primarily in the
speculative trading of futures and forward contracts, options on
futures contracts, physical commodities and other commodity
interests, including but not limited to foreign currencies,
financial instruments, metals, energy and agricultural products
(collectively, "futures interests"). The Partnership is one of
the Morgan Stanley Dean Witter Spectrum Series of funds,
comprised of the Partnership, Morgan Stanley Dean Witter Spectrum
Commodity L.P., Morgan Stanley Dean Witter Spectrum Currency
L.P., Morgan Stanley Dean Witter Spectrum Global Balanced L.P.,
Morgan Stanley Dean Witter Spectrum Select L.P. and Morgan
Stanley Dean Witter Spectrum Technical L.P.
<PAGE>
MORGAN STANLEY DEAN WITTER SPECTRUM STRATEGIC L.P.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
The general partner is Demeter Management Corporation
("Demeter"). The non-clearing commodity broker is Dean Witter
Reynolds Inc. ("DWR"). The trading advisors to the Partnership
are Blenheim Investments Inc. ("Blenheim"), Allied Irish Capital
Management, Ltd. ("AICM") and Eclipse Capital Management, Inc.
("Eclipse"), (collectively, the "Trading Advisors"). Carr
Futures Inc. ("Carr"), an unaffiliated clearing commodity broker,
provides clearing and execution services for Blenheim and AICM.
Morgan Stanley & Co., Inc. ("MS & Co.") and Morgan Stanley & Co.
International Limited ("MSIL") provide clearing and execution
services for Eclipse. Demeter, DWR, MS & Co. and MSIL are
wholly-owned subsidiaries of Morgan Stanley Dean Witter & Co.
2. Related Party Transactions
The Partnership's cash is on deposit with DWR, Carr, MS & Co. and
MSIL in futures interests trading accounts to meet margin
requirements as needed. DWR pays interest on these funds based on
a prevailing rate on U.S. Treasury bills. Brokerage fees are paid
to DWR.
<PAGE>
MORGAN STANLEY DEAN WITTER SPECTRUM STRATEGIC L.P.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
3. Financial Instruments
The Partnership trades futures and forward contracts, options on
futures contracts, physical commodities and other commodity
interests, including but not limited to foreign currencies,
financial instruments, metals, energy and agricultural products.
Futures 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.
In June 1998, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standard ("SFAS") No.
133, "Accounting for Derivative Instruments and Hedging
Activities" effective for fiscal years beginning after June 15,
2000, as amended by SFAS No. 137. The Partnership adopted the
provisions of SFAS No. 133 beginning with the fiscal year ended
December 31, 1998. SFAS No. 133 superceded SFAS Nos. 119 and
105, which required the disclosure of average aggregate fair
values and contract/notional values, respectively, of derivative
financial instruments for an entity that carries its assets at
fair value.
<PAGE>
MORGAN STANLEY DEAN WITTER SPECTRUM STRATEGIC L.P.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
SFAS No. 133 was further amended by SFAS No. 138, which clarifies
issues surrounding interest rate risk, foreign currency
denominations, normal purchases and sales and net hedging. The
application of SFAS No. 133, as amended by SFAS No. 137, did not
have a significant effect on the Partnership's financial
statements, nor will the application of the provisions of SFAS
No. 138 have a significant effect on the Partnership's financial
statements.
SFAS No. 133 defines a derivative as a financial instrument or
other contract that has all three of the following
characteristics:
1) One or more underlying notional amounts or payment
provisions;
2) Requires no initial net investment or a smaller initial net
investment than would be required relative to changes in market
factors;
3) Terms require or permit net settlement.
Generally derivatives include futures, forwards, swaps or option
contracts, or other financial instruments with similar
characteristics such as caps, floors and collars.
The net unrealized gain (loss) on open contracts is reported as a
component of "Equity in futures interests trading accounts" on
the
<PAGE>
MORGAN STANLEY DEAN WITTER SPECTRUM STRATEGIC L.P.
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
statements of financial condition and totaled $(2,354,344) and
$9,563,813 at September 30, 2000 and December 31, 1999,
respectively.
The $2,354,344 net unrealized loss on open contracts at September
30, 2000 and the $9,563,813 net unrealized gain on open contracts
at December 31, 1999 related to exchange-traded futures and
futures-styled option contracts.
Exchange-traded futures and futures-styled option contracts held
by the Partnership at September 30, 2000 and December 31, 1999
mature through December 2001.
The Partnership has credit risk associated with counterparty non-
performance. The credit risk associated with the instruments in
which the Partnership is involved is limited to the amounts
reflected in the Partnership's statements of financial condition.
The Partnership also has credit risk because DWR, Carr, MS & Co.
and MSIL 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
<PAGE>
MORGAN STANLEY DEAN WITTER SPECTRUM STRATEGIC L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
settled on a daily basis. Each of DWR, Carr, MS & Co. and MSIL,
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 (loss) on all open futures and futures-styled
options contracts, which funds, in the aggregate, totaled
$69,546,024 and $107,372,141 at September 30, 2000 and December
31, 1999, 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 (loss) 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 and MS & Co., the counterparties on
all of such contracts, to perform. The Partnership has netting
agreements with Carr and MS & Co. These agreements, which seek
to reduce the Partnership's, Carr's and MS & Co.'s exposure on
off-exchange-traded forward currency contracts, should materially
<PAGE>
MORGAN STANLEY DEAN WITTER SPECTRUM STRATEGIC L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
decrease the Partnership's credit risk in the event of Carr's or
MS & Co.'s bankruptcy or insolvency.
Carr's parent, Credit Agricole Indosuez, has guaranteed to the
Partnership payment of the net liquidating value of the
transactions in the Partnership's account with Carr (including
foreign currency contracts).
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity - The Partnership deposits its assets with DWR as non-
clearing broker and Carr, MS & Co. and MSIL as clearing brokers
in separate futures trading accounts established for each Trading
Advisor, which assets are used as margin to engage in trading.
The assets are held in either non-interest bearing bank accounts
or in securities and instruments permitted by the CFTC for
investment of customer segregated or secured funds. The
Partnership's assets held by the commodity brokers may be used as
margin solely for the Partnership's trading. Since the
Partnership's sole purpose is to trade in futures, forwards and
options, it is expected that the Partnership will continue to own
such liquid assets for margin purposes.
The Partnership's investment in futures, forwards and options
may, from time to time, be illiquid. Most U.S. futures exchanges
limit fluctuations in prices during a single day by regulations
referred to as "daily price fluctuations limits" or "daily
limits". Trades may not be executed at prices beyond the daily
limit. If the price for a particular futures or options contract
has increased or decreased by an amount equal to the daily limit,
positions in that futures or options contract can neither be
taken nor liquidated unless traders are willing to effect trades
at or within the limit. Futures prices have occasionally moved
the daily limit for several consecutive days with little or no
<PAGE>
trading. These market conditions could prevent the Partnership
from promptly liquidating its futures or options contracts 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.
The Partnership has never had illiquidity affect a material
portion of its assets.
Capital Resources - The Partnership does not have, or expect to
have, any capital assets. Redemptions, exchanges and sales of
additional units of limited partnership interest ("Unit(s)") in
the future will affect the amount of funds available for
investment in futures interests in subsequent periods. It is not
possible to estimate the amount and therefore, the impact of
future redemptions of Units.
<PAGE>
Results of Operations
General. The Partnership's results depend on its Trading
Advisors and the ability of the Trading Advisors' trading
programs to take advantage of price movements or other profit
opportunities in the futures, forwards, and options markets. The
following presents a summary of the Partnership's operations for
the quarters and nine months ended September 30, 2000 and 1999,
respectively, and a general discussion of its trading activities
during each period. It is important to note, however, that the
Trading Advisors trade in various markets at different times and
that prior activity in a particular market does not mean that
such market will be actively traded by the Trading Advisors or
will be profitable in the future. Consequently, the results of
operations of the Partnership are difficult to discuss other than
in the context of its Trading Advisors' trading activities on
behalf of the Partnership as a whole and how the Partnership has
performed in the past.
For the Quarter and Nine Months Ended September 30, 2000
For the quarter ended September 30, 2000, the Partnership
recorded total trading losses net of interest income of
$9,946,543 and posted a decrease in Net Asset Value per Unit.
The most significant losses of approximately 5.1% were recorded
in the currency markets primarily from long positions in the euro
and Swiss franc as the value of these European currencies
weakened during mid July amid a combination of inflationary
<PAGE>
worries in Europe and renewed doubts over the European Central
Bank's handling of monetary policy. Additional losses were
experienced during mid-September from short positions in the euro
as its value reversed sharply and suddenly higher versus the U.S.
dollar after the world's major central banks carried out
coordinated intervention to buy euros because of concern about
the potential implications of recent movements in the euro on the
world economy. In soft commodities, losses of approximately 2.7%
were experienced throughout the majority of the quarter from long
positions in lumber futures as prices declined amid weak demand
and abundant supplies. In the global interest rate futures
markets, losses of approximately 2.7% were recorded primarily
during August and September from short positions in German
interest rate futures positions as German bond prices moved
higher. In the global stock index futures markets, losses of
approximately 2.6% were incurred primarily during the first half
of September from long positions in U.S. and German stock index
futures as prices declined due to jitters in the technology
sector and a worrisome spike in oil prices. In the energy
markets, losses of approximately 1.9% were recorded primarily
during August from short positions in crude oil futures as prices
increased amid ongoing supply concerns that outweighed signals
from Saudi Arabia that it would seek a suitable production
increase to ease the crunch. Additional losses were recorded
during September from long positions in crude oil futures as
prices dropped after President Clinton ordered the release of 30
<PAGE>
million barrels of oil in the U.S.'s emergency Strategic
Petroleum Reserve over a period of a month in order to stabilize
prices and to ease shortages as the U.S. winter approaches. In
the agricultural markets, losses of approximately 1.0% were
experienced primarily during mid-September from long wheat
futures positions as prices dropped on a larger-than-expected
crop projection by the USDA and in anticipation of a good
harvest. These losses were partially offset by gains of
approximately 1.6% recorded in the metals markets throughout a
majority of the quarter from long positions in copper futures as
prices moved higher due to a rise in COMEX copper stocks. Total
expenses for the three months ended September 30, 2000 were
$2,178,853, resulting in a net loss of $12,125,396. The value of
a Unit decreased from $11.32 at June 30, 2000 to $9.65 at
September 30, 2000.
For the nine months ended September 30, 2000, the Partnership
recorded total trading losses net of interest income of
$35,829,627 and posted a decrease in Net Asset Value per Unit.
The most significant losses of approximately 14.5% were recorded
in the global stock index futures markets primarily from short
positions in U.S. stock index futures as domestic equity prices
moved higher in early January on fears of an interest rate hike
and reports of a major corporate merger. Additional losses were
recorded during February from short positions in NASDAQ 100 Index
futures as the NASDAQ Index climbed higher on strength in
<PAGE>
computer-chip maker and biotechnology companies. During the
first half of September, additional losses were incurred from
long positions in U.S. stock index futures as prices declined due
to jitters in the technology sector and a worrisome spike in oil
prices. In the currency markets, losses of approximately 13.7%
were recorded primarily during January and February from long
positions in the euro as its value weakened versus the U.S.
dollar due to skepticism regarding Europe's economic outlook.
Additional losses were recorded from long positions in the euro
and Swiss franc as the value of these European currencies
weakened during mid July amid a combination of inflationary
worries in Europe and renewed doubts over the European Central
Bank's handling of monetary policy. During mid September,
additional losses were experienced from short positions in the
euro as its value reversed sharply and suddenly higher versus the
U.S. dollar after the world's major central banks carried out
coordinated intervention to buy euros. Losses were also
experienced during April from long positions in the Japanese yen
as the value of the yen weakened versus the U.S. dollar amid
fears of additional Bank of Japan intervention. During May and
June, additional losses were recorded from short positions in the
Japanese yen as the value of the U.S. dollar weakened versus the
yen due primarily to the perception that interest rates in the
U.S. may have topped out. In the global interest rate futures
markets, losses of approximately 12.9% were experienced from
short positions in U.S. Treasury bond futures as interest rates
<PAGE>
at the longer end of the yield curve declined during the second
half of January, thus resulting in domestic bond prices being
pushed higher. During February, losses were incurred from short
positions in German interest rate futures as prices increased
following a surge in U.S. bond prices. During April, additional
losses were recorded from long positions in U.S. interest rate
futures as prices declined amid fears of higher interest rates
and a late month bounce in equity prices. In the metals markets,
losses of approximately 12.3% were incurred primarily from long
positions in aluminum and copper futures as prices reversed lower
in early February due primarily to technically based selling. In
late February and late March, prices continued lower led downward
by falling prices of other base metals and the softening of oil
prices. Additional losses were recorded during April, late May
and early June from long positions in aluminum and copper futures
as prices declined on technical factors. In soft commodities,
losses of approximately 8.1% were recorded during January,
February and early April from long coffee futures positions as
coffee prices declined in the wake of forecasts for a bumper crop
in Brazil and on technically based selling. These losses were
partially offset by gains of approximately 17.4% recorded
primarily during January in the energy markets from long futures
positions in crude oil and its refined products as oil prices
increased on growing speculation that Organization of Petroleum
Exporting Countries (OPEC) would extend production cuts beyond
<PAGE>
the deadline of March 2000. Additional gains were recorded
during March from short positions in crude oil futures as prices
declined after OPEC effectively restored production levels to
their year-earlier level. Additional gains were recorded early
in May from long futures positions in crude oil as oil prices
increased amid concerns over tight gasoline supplies ahead of the
peak driving summer season and after comments from OPEC ministers
who saw no need to raise supplies further. Profits were also
recorded primarily during May from long positions in natural gas
futures as prices continued their upward trend, as data released
by the American Gas Association further confirmed fears that
inventory levels remain low. Total expenses for the nine months
ended September 30, 2000 were $7,877,612, resulting in a net loss
of $43,707,239. The value of a Unit decreased from $15.85 at
December 31, 1999 to $9.65 at September 30, 2000.
For the Quarter and Nine Months Ended September 30, 1999
For the quarter ended September 30, 1999, the Partnership
recorded total trading revenues including interest income of
$19,157,974 and posted an increase in Net Asset Value per Unit.
The most significant gains of approximately 16.6% were recorded
in the energy markets primarily from long futures positions in
crude, heating and gas oil, and unleaded gas, as oil prices
climbed higher throughout the quarter after OPEC ministers
confirmed that they will uphold their global cutbacks until April
of next year. Reports of declining crude oil and gasoline
<PAGE>
inventories also boosted prices in this market. In the metals
markets, significant gains of approximately 16.0% were recorded
primarily from long gold futures positions as prices skyrocketed
due to the results of the Bank of England's second gold auction
on September 21 and the announcement of a plan by several
European central banks to restrict sales of their gold reserves
for five years. Additional gains were recorded from long silver
futures positions as silver prices increased following gold's
lead. These gains were partially offset by losses of
approximately 4.8% recorded in the global interest rate futures
markets primarily from short U.S. interest rate futures positions
as U.S. Treasury prices temporarily climbed higher during mid
July as talks of economic problems in Latin America sent
Argentine and Brazilian stock markets sharply lower, thus fueling
demand for the safety of U.S. government securities. Losses were
also recorded in this market complex during September as domestic
bond prices moved higher on the release of benign inflation data
and diminished fears of another interest rate increase by the
Federal Reserve. In the currency markets, losses of
approximately 4.5% were experienced primarily during July from
short Japanese yen positions as its value reached a 5 1/2 month high
versus the U.S. dollar due to inflationary pressures in the
United States and optimistic prospects for economic growth in
Japan. In agriculturals, losses of approximately 3.1% were
recorded in early July primarily from long soybean futures
positions as prices declined on forecasts for favorable crop
<PAGE>
weather in the U.S. During August, additional losses were
recorded from short positions in soybeans, soybean meal and
soybean oil futures as prices increased significantly amid drier-
than-expected weather in the U.S. midwest, forecasts for very
little rain and concerns about shriveling production. Total
expenses for the three months ended September 30, 1999 were
$3,791,088, resulting in net income of $15,366,886. The value of
a Unit increased from $12.94 at June 30, 1999 to $15.28 at
September 30, 1999.
For the nine months ended September 30, 1999, the Partnership
recorded total trading revenues including interest income of
$32,919,876 and posted an increase in Net Asset Value per Unit.
The most significant gains of approximately 33.3% were recorded
in the energy markets primarily from long futures positions in
crude oil and its refined products, unleaded gas, heating oil and
gas oil, as prices climbed higher during March following an
agreement reached by both OPEC and non-OPEC countries to cut
total output beginning April 1st.. Oil prices continued to move
higher throughout the third quarter due to declining supplies,
increasing demand and evidence that output cuts were being
adhered to. In the metals markets, gains of approximately 21.7%
were recorded primarily from long positions in gold futures as
gold prices soared during September following the Bank of
England's second gold auction and an announcement by several
European central banks stating that they were to restrict the
<PAGE>
sales of gold reserves for five years. Additional gains were
recorded from long copper futures positions as copper prices
soared during mid April on a wave of fund buying and during June
on news that a major U.S. producer would cut back production.
Copper prices also moved higher during August and September
resulting in profits for the Partnership's long positions. In
the global interest rate futures markets, gains of approximately
3.7% were recorded primarily during February from short U.S.
interest rate futures positions as prices dropped in reaction to
Federal Reserve Chairman Alan Greenspan's warnings that a strong
economy could reignite inflation. A higher-than-expected rise in
the Consumer Price Index and fears of a tighter Federal Reserve
monetary policy resulted in additional gains in this market
during May and June. These gains were partially offset by losses
of approximately 8.5% recorded in the currency markets primarily
during January from long Japanese yen positions after an
intervention by the Bank of Japan boosted the U.S. dollar against
the yen and helped ease concerns about the impact of a strong yen
on Japanese exports. Losses were also recorded during March from
short Japanese yen positions as the value of the yen increased
versus the U.S. dollar amid new signs that Japan's economy may be
on the mend. Losses were recorded from short Japanese yen
positions during June and July as its value reached a 5 1/2 month
high versus the U.S. dollar due to inflationary pressures in the
United States and optimistic prospects for economic growth in
Japan. In the agricultural markets, losses of approximately 6.6%
<PAGE>
were recorded primarily during May from long positions in soybean
futures as prices declined due to favorable planting forecasts
and a bearish USDA supply-demand report. During early July
losses were recorded from long soybean futures positions as
prices declined on forecasts for favorable crop weather in the
U.S. During August, additional losses were recorded from short
positions in soybeans, soybean meal and soybean oil futures as
prices increased significantly amid drier-than-expected weather
in the U.S. midwest, forecasts for very little rain and concerns
about shriveling production. In the global stock index futures
markets, losses of approximately 5.0% were recorded primarily
during March and April from short S&P 500 Index futures positions
as equity prices increased in reaction to Wall Street reaching a
major milestone, as the Dow Jones Industrial Average hit 10,000
for the first time, and in response to an interest rate cut by
the European Central Bank. Total expenses for the nine months
ended September 30, 1999 were $8,728,600, resulting in net income
of $24,191,276. The value of a Unit increased from $11.55 at
December 31, 1998 to $15.28 at September 30, 1999.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Introduction
The Partnership is a commodity pool involved in the speculative
trading of futures interests. The market-sensitive instruments
held by the Partnership are acquired for speculative trading
purposes only and, as a result, all or substantially all of the
<PAGE>
Partnership's assets are at risk of trading loss. Unlike an
operating company, the risk of market-sensitive instruments is
central, not incidental, to the Partnership's main business
activities.
The futures interests traded by the Partnership involve varying
degrees of market risk. Market risk is often dependent upon
changes in the level or volatility of interest rates, exchange
rates, and prices of financial instruments and commodities.
Fluctuations in market risk based upon these factors result in
frequent changes in the fair value of the Partnership's open
positions, and, consequently, in its earnings and cash flow.
The Partnership's total market risk is influenced by a wide
variety of factors, including the diversification among the
Partnership's open positions, the volatility present within the
markets, and the liquidity of the markets. At different times,
each of these factors may act to increase or decrease the market
risk associated with the Partnership.
The Partnership's past performance is not necessarily indicative
of its future results. Any attempt to numerically quantify the
Partnership's market risk is limited by the uncertainty of its
speculative trading. The Partnership's speculative trading may
cause future losses and volatility (i.e. "risk of ruin") that far
<PAGE>
exceed the Partnership's experiences to date or any reasonable
expectations based upon historical changes in market value.
Quantifying the Partnership's Trading Value at Risk
The following quantitative disclosures regarding the
Partnership's market risk exposures contain "forward-looking
statements" within the meaning of the safe harbor from civil
liability provided for such statements by the Private Securities
Litigation Reform Act of 1995 (set forth in Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934). All quantitative disclosures in this section are
deemed to be forward-looking statements for purposes of the safe
harbor, except for statements of historical fact.
The Partnership accounts for open positions using mark-to-market
accounting principles. Any loss in the market value of the
Partnership's open positions is directly reflected in the
Partnership's earnings, whether realized or unrealized, and cash
flow. Profits and losses on open positions of exchange-traded
futures interests are settled daily through variation margin.
The Partnership's risk exposure in the market sectors traded by
the Trading Advisors is estimated below in terms of Value at Risk
("VaR"). The VaR model used by the Partnership includes many
variables that could change the market value of the Partnership's
trading portfolio. The Partnership estimates VaR using a model
<PAGE>
based upon historical simulation with a confidence level of 99%.
Historical simulation involves constructing a distribution of
hypothetical daily changes in the value of a trading portfolio.
The VaR model takes into account linear exposures to price and
interest rate risk. Market risks that are incorporated in the
VaR model include equity and commodity prices, interest rates,
foreign exchange rates, and correlation among these variables.
The hypothetical changes in portfolio value are based on daily
percentage changes observed in key market indices or other market
factors ("market risk factors") to which the portfolio is
sensitive. The historical observation period of the Partnership's
VaR is approximately four years. The one-day 99% confidence
level of the Partnership's VaR corresponds to the negative change
in portfolio value that, based on observed market risk factors,
would have been exceeded once in 100 trading days.
VaR models, including the Partnership's, are continuously
evolving as trading portfolios become more diverse and modeling
techniques and systems capabilities improve. Please note that
the VaR model is used to numerically quantify market risk for
historic reporting purposes only and is not utilized by either
Demeter or the Trading Advisors in their daily risk management
activities.
<PAGE>
The Partnership's Value at Risk in Different Market Sectors
The following table indicates the VaR associated with the
Partnership's open positions as a percentage of total Net Assets
by primary market risk category as of September 30, 2000 and
1999. At September 30, 2000 and 1999, the Partnership's total
capitalization was approximately $69 million and $101 million,
respectively.
Primary Market September 30, 2000 September 30, 1999
Risk Category Value at Risk Value at Risk
Commodity (2.18)% (3.13)%
Currency (0.43) (1.58)
Interest Rate (0.25) (0.52)
Equity (0.64) (1.78)
Aggregate Value at Risk (2.30)% (3.96)%
Aggregate Value at Risk represents the aggregate VaR of all the
Partnership's open positions and not the sum of the VaR of the
individual Market Categories listed above. Aggregate VaR will be
lower as it takes into account correlation among different
positions and categories.
The table above represents the VaR of the Partnership's open
positions at September 30, 2000 and 1999 only and is not
necessarily representative of either the historic or future risk
of an investment in the Partnership. Because the Partnership's
only business is the speculative trading of futures interests,
<PAGE>
the composition of its trading portfolio can change significantly
over any given time period, or even within a single trading day.
Any changes in open positions could positively or negatively
materially impact market risk as measured by VaR.
The table below supplements the quarter-end VaR by presenting the
Partnership's high, low and average VaR, as a percentage of total
Net Assets for the four quarterly reporting periods from October
1, 1999 through September 30, 2000.
Primary Market Risk Category High Low Average
Commodity (2.18)% (1.49)% (1.85)%
Currency (0.95) (0.43) (0.79)
Interest Rate (1.00) (0.25) (0.47)
Equity (2.15) (0.18) (0.89)
Aggregate Value at Risk (2.97)% (1.97)% (2.43)%
Limitations on Value at Risk as an Assessment of Market Risk
The face value of the market sector instruments held by the
Partnership is typically many times the applicable margin
requirements. Margin requirements generally range between 2% and
15% of contract face value. Additionally, the use of leverage
causes the face value of the market sector instruments held by
the Partnership to typically be many times the total
capitalization of the Partnership. The value of the
Partnership's open positions thus creates a "risk of ruin" not
typically found in other
<PAGE>
investments. The relative size of the positions held may cause
the Partnership to incur losses greatly in excess of VaR within a
short period of time, given the effects of the leverage employed
and market volatility. The VaR tables above, as well as the past
performance of the Partnership, give no indication of such "risk
of ruin". In addition, VaR risk measures should be viewed in
light of the methodology's limitations, which include the
following:
past changes in market risk factors will not always result
in accurate predictions of the distributions and correlations of
future market movements;
changes in portfolio value in response to market movements
may differ from those of the VaR model;
VaR results reflect past trading positions while future risk
depends on future positions;
VaR using a one-day time horizon does not fully capture the
market risk of positions that cannot be liquidated or hedged
within one day; and
the historical market risk factor data used for VaR
estimation may provide only limited insight into losses that
could be incurred under certain unusual market movements.
The VaR tables above present the results of the Partnership's VaR
for each of the Partnership's market risk exposures and on an
aggregate basis at September 30, 2000 and for the end of the four
quarterly reporting periods from October 1, 1999 through
September
<PAGE>
30, 2000. Since VaR is based on historical data, VaR should not
be viewed as predictive of the Partnership's future financial
performance or its ability to manage or monitor risk. There can
be no assurance that the Partnership's actual losses on a
particular day will not exceed the VaR amounts indicated above or
that such losses will not occur more than 1 in 100 trading days.
Non-Trading Risk
The Partnership has non-trading market risk on its foreign cash
balances not needed for margin. These balances and any market
risk they may represent are immaterial. At September 30, 2000 the
Partnership's cash balance at DWR was approximately 86% of its
total Net Asset Value. A decline in short-term interest rates
will result in a decline in the Partnership's cash management
income. This cash flow risk is not considered material.
Materiality, as used throughout this section, is based on an
assessment of reasonably possible market movements and any
associated potential losses, taking into account the leverage,
optionality and multiplier features of the Partnership's market-
sensitive instruments.
Qualitative Disclosures Regarding Primary Trading Risk Exposures
The following qualitative disclosures regarding the Partnership's
market risk exposures - except for (A) those disclosures that are
statements of historical fact and (B) the descriptions of how the
<PAGE>
Partnership manages its primary market risk exposures -
constitute forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act. The Partnership's primary market risk
exposures as well as the strategies used and to be used by
Demeter and the Trading Advisors for managing such exposures are
subject to numerous uncertainties, contingencies and risks, any
one of which could cause the actual results of the Partnership's
risk controls to differ materially from the objectives of such
strategies. Government interventions, defaults and
expropriations, illiquid markets, the emergence of dominant
fundamental factors, political upheavals, changes in historical
price relationships, an influx of new market participants,
increased regulation and many other factors could result in
material losses as well as in material changes to the risk
exposures and the risk management strategies of the Partnership.
Investors must be prepared to lose all or substantially all of
their investment in the Partnership.
The following were the primary trading risk exposures of the
Partnership as of September 30, 2000, by market sector. It may
be anticipated however, that these market exposures will vary
materially over time.
Commodity
Energy. The primary market exposure in the Partnership at
September 30, 2000 was in the energy sector. On September 30,
<PAGE>
2000, the Partnership's energy exposure was shared primarily by
futures contracts in the crude oil and natural gas markets.
Price movements in these markets result from political
developments in the Middle East, weather patterns, and other
economic fundamentals. It is possible that volatility will
remain high. Significant profits and losses, which have been
experienced in the past, are expected to continue to be
experienced in this market. Natural gas has exhibited volatility
in prices resulting from weather patterns and supply and demand
factors and may continue in this choppy pattern.
Soft Commodities and Agriculturals. On September 30, 2000, the
Partnership had exposure in the markets that comprise these
sectors, mostly in the cotton, soybeans and lumber markets.
Supply and demand inequalities, severe weather disruption and
market expectations affect price movements in these markets.
Metals. The Partnership's metals market exposure at September
30, 2000 was primarily to fluctuations in the price of base
metals. During periods of volatility, base metals may affect
performance dramatically. Certain Trading Advisors will, from
time to time, trade precious metals, for example, gold.
Exposure was evident in the gold market as gold prices were
volatile during the quarter. Demeter anticipates that the base
metals will remain the primary metals market exposure of the
Partnership.
<PAGE>
Currency. The Partnership's currency exposure at September 30,
2000 was to exchange rate fluctuations, primarily fluctuations
which disrupt the historical pricing relationships between
different currencies and currency pairs. Interest rate changes
as well as political and general economic conditions influence
these fluctuations. The Partnership trades in a large number of
currencies, including cross-rates - i.e., positions between two
currencies other than the U.S. dollar. For the third quarter of
2000, the Partnership's major exposures were in outright U.S.
dollar positions. Outright positions consist of the U.S. dollar
vs. other currencies. These other currencies include major and
minor currencies. Demeter does not anticipate that the risk
profile of the Partnership's currency sector will change
significantly in the future. The currency trading VaR figure
includes foreign margin amounts converted into U.S. dollars with
an incremental adjustment to reflect the exchange rate risk
inherent to the dollar-based Partnership in expressing VaR in a
functional currency other than dollars.
Interest Rate. The Partnership's exposure at September 30, 2000
was in the interest rate market complex was spread across the
U.S., Japanese and European interest rate sectors. Interest rate
movements directly affect the price of the sovereign bond futures
positions held by the Partnership and indirectly affect the value
of its stock index and currency positions. Interest rate
movements in one country as well as relative interest rate
<PAGE>
movements between countries materially impact the Partnership's
profitability. The Partnership's primary interest rate exposure
is generally to interest rate fluctuations in the United States
and the other G-7 countries. The G-7 countries consist of
France, U.S., Britain, Germany, Japan, Italy and Canada.
However, the Partnership also takes futures positions in the
government debt of smaller nations - e.g. Australia. Demeter
anticipates that G-7 and Australian interest rates will remain
the primary interest rate exposures of the Partnership for the
foreseeable future. The changes in interest rates which have the
most effect on the Partnership are changes in long-term, as
opposed to short-term, rates. Most of the speculative futures
positions held by the Partnership are in medium- to long-term
instruments. Consequently, even a material change in short-term
rates would have little effect on the Partnership, were the
medium- to long- term rates to remain steady.
Equity. The primary equity exposure at September 30, 2000 was
to equity price risk in the G-7 countries. The stock index
futures traded by the Partnership are by law limited to futures
on broadly based indices. As of September 30, 2000, the
Partnership's primary exposure was in the S&P 500 (U.S.), FTSE
(Britain) and DAX (Germany) stock indicies. The Partnership is
primarily exposed to the risk of adverse price trends or static
markets in the U.S., European and Japanese indices. Static
<PAGE>
markets would not cause major market changes but would make it
difficult for the Partnership to avoid being "whipsawed" into
numerous small losses.
Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following was the only non-trading risk exposure of the
Partnership as of September 30, 2000:
Foreign Currency Balances. The Partnership's primary foreign
currency balances at September 30, 2000 were in New Zealand
dollars and Canadian dollars. The Partnership controls the non-
trading risk of these balances by regularly converting these
balances back into dollars upon liquidation of the respective
position.
Qualitative Disclosures Regarding Means of Managing Risk Exposure
The Partnership and the Trading Advisors, separately, attempt to
manage the risk of the Partnership's open positions in
essentially the same manner in all market categories traded.
Demeter attempts to manage market exposure by diversifying the
Partnership's assets among different Trading Advisors, each of
whose strategies focus on different market sectors and trading
approaches, and by monitoring the performance of the Trading
Advisors daily. In addition, the Trading Advisors establish
diversification guidelines, often set in terms of the maximum
margin to be
<PAGE>
committed to positions in any one market sector or market-
sensitive instrument.
Demeter monitors and controls the risk of the Partnership's non-
trading instrument, cash. Cash is the only Partnership investment
directed by Demeter, rather than the Trading Advisors.
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Please refer to Legal Proceedings previously disclosed in the
Partnership's Form 10-Q(s) for the quarters ended March 31, 2000
and June 30, 2000 and Form 10-K for the year ended December 31,
1999.
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The Partnership, Morgan Stanley Dean Witter Spectrum Technical L.P.
("Spectrum Technical") and Morgan Stanley Dean Witter Spectrum
Global Balanced L.P. ("Spectrum Global Balanced") collectively
registered 10,000,000 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
<PAGE>
Spectrum Global Balanced collectively registered an additional
8,500,000 Units pursuant to another Registration Statement on Form
S-1, which became effective on April 30, 1996 (SEC File Number 333-
3222); such Units were allocated to the Partnership, Spectrum
Technical and Spectrum Global Balanced as follows: The Partnership
2,500,000, Spectrum Technical 5,000,000 and Spectrum Global
Balanced 1,000,000.
The Partnership registered an additional 6,500,000 Units pursuant
to another Registration Statement on Form S-1, which became
effective on February 28, 2000 (SEC File Number 333-90487).
The managing underwriter for the Partnership 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, 2000, 10,948,789.619 Units were sold, leaving
8,051,210.381 Units. The aggregate price of the Units sold through
June 30, 2000 is $121,194,987.
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
<PAGE>
included as part of each Registration Statement.
Item 5. OTHER INFORMATION
In the month of October 2000, the clearing commodity broker for
the Net Assets managed by Blenheim and AICM was changed from Carr
Futures Inc. to MS & Co. and MSIL.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) Exhibits
3.01 Form of Amended and Restated Limited Partnership Agreement
of the Partnership is incorporated by reference to Exhibit A of
the Partnership's Prospectus, dated March 6, 2000, filed
with the Securities and Exchange Commission pursuant to Rule
424(b)(3) under the Securities Act of 1933, as amended, on
March 9, 2000.
3.02 Certificate of Limited Partnership, dated April 18, 1994,
is incorporated by reference to Exhibit 3.02 of the
Partnership's Registration Statement on Form S-1 (File No. 33-
80146) filed with the Securities and Exchange Commission on June
10, 1994.
10.01 Management Agreement, dated as of November 1, 1994,
among the Partnership, Demeter Management Corporation, and
Blenheim Investments, Inc. is incorporated by reference to
Exhibit 10.02 of the Partnership's Form 10-K (File No. 0-
26280) for fiscal year ended December 31, 1998.
10.02 Management Agreement, dated as of November 1, 1994,
among the Partnership, Demeter Management Corporation, and
Willowbridge Associates, Inc. is incorporated by reference to
Exhibit 10.03 of the Partnership's Form 10-K (File No. 0- 26280)
for fiscal year ended December 31, 1998.
10.03 Amended and Restated Customer Agreement, dated as of
December 1, 1997, between the Partnership and Dean Witter
Reynolds Inc. is incorporated by reference to Exhibit 10.08 of
the Partnership's Form 10-K (File No. 0-26280) for fiscal year
ended December 31, 1998.
<PAGE>
10.04 Customer Agreement, dated as of December 1, 1997,
among the Partnership, Carr Futures, Inc., and Dean Witter
Reynolds Inc. is incorporated by reference to Exhibit 10.09 of
the Partnership's Form 10-K (File No. 0-26280) for fiscal year
ended December 31, 1998.
10.05 International Foreign Exchange Master Agreement, dated
as of August 1, 1997, between the Partnership and Carr Futures,
Inc. is incorporated by reference to Exhibit 10.10 of the
Partnership's Form 10-K (File No. 0-26280) for fiscal year
ended December 31, 1998.
10.06 Subscription and Exchange Agreement and Power of
Attorney to be executed by each purchaser of Units is
incorporated by reference to Exhibit B of the Partnerships
Prospectus dated March 6, 2000, filed with the Securities and
Exchange Commission pursuant to Rule 424(b)(3) under the
Securities Act of 1933, as amended, on March 9, 2000.
10.07 Escrow Agreement, dated September 30, 1994, among the
Partnership, Demeter Management Corporation, Dean Witter
Reynolds Inc., and Chemical Bank is incorporated by
reference to Exhibit 10.07 of the Partnership's Form 10-K
(File No. 0-26280) for fiscal year ended December 31, 1998.
10.08 Management Agreement, dated as of May 1, 1999, among
Dean Witter Spectrum Strategic L.P., Demeter Management
Corporation, and Allied Irish Capital Management Ltd. is
incorporated by reference to Exhibit 10.04 of the
Partnership's Registration Statement on Form S-1 (File No. 333-
90487) filed with the Securities and Exchange Commission on
November 5, 1999.
10.09 Management Agreement, dated as of June 1, 2000, among
the Partnership, Demeter and Eclipse Capital Management, Inc.
is filed herewith.
10.10 Customer Agreement, dated as of June 1, 2000, between
Morgan Stanley & Co. Incorporated, the Partnership and Dean
Witter Reynolds Inc. is incorporated by reference to Exhibit
10.10 of the Partnership's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2000, File No. 0-26280.
(B) Reports on Form 8-K. - None.
<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.
Morgan Stanley Dean Witter Spectrum
Strategic L.P. (Registrant)
By: Demeter Management Corporation
(General Partner)
November 14, 2000 By:/s/ Raymond E. Koch
_
Raymond E. Koch
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.
