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. 0-26338
DEAN WITTER SPECTRUM TECHNICAL L.P.
(Exact name of registrant as specified in its charter)
Delaware 13-3782231
(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 TECHNICAL 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.......13-21
Part II. OTHER INFORMATION
Item 1. Legal Proceedings......................................22
Item 2. Changes in Securities and Use of Proceeds...........22-23
Item 6. Exhibits and Reports on Form 8-K.......................23
</TABLE>
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
DEAN WITTER SPECTRUM TECHNICAL 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 206,394,071 168,849,922
Net unrealized gain on open contracts 38,717,919 12,2
96,712
Total Trading Equity 245,111,990 181,146,634
Subscriptions receivable 5,199,391 2,965,621
Interest receivable (DWR) 731,914 657,562
Total Assets 251,043,295 184,769,817
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Redemptions payable 1,615,504 1,009,230
Accrued brokerage fees (DWR) 1,406,937 1,097,194
Accrued management fees 776,241 573,696
Incentive fees payable 746,222 139,190
Total Liabilities 4,544,904 2,819,310
Partners' Capital
Limited Partners (14,943,469.879 and
12,308,185.227 Units, respectively) 244,001,087 180,099,271
General Partner (152,943.553 and
126,515.511 Units, respectively) 2,497,304 1,851,236
Total Partners' Capital 246,498,391 181,950,507
Total Liabilities and Partners' Capital 251,043,295 184,769,817
NET ASSET VALUE PER UNIT 16.33 14.63
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER SPECTRUM TECHNICAL L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Quarters Ended September 30,
1998 1997
$ $
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized (4,813,089) 6,987,098
Net change in unrealized 40,764,560 2,653,287
Total Trading Results 35,951,471 9,640,385
Interest Income (DWR) 2,165,631 1,616,004
Total Revenues 38,117,102 11,256,389
EXPENSES
Brokerage fees (DWR) 3,910,830 3,025,230
Incentive fees 2,443,972 -
Management fees 2,157,699 1,544,198
Total Expenses 8,512,501 4,569,428
NET INCOME 29,604,601 6,686,961
NET INCOME ALLOCATION
Limited Partners 29,303,559
6,646,000
General Partner
301,042
40,961
NET INCOME PER UNIT
Limited Partners 2.00
.62
General Partner
2.00 .62
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER SPECTRUM TECHNICAL L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Nine Months Ended September 30,
1998 1997
$ $
REVENUES
<S> <C> <C>
Trading profit:
Realized 13,007,107 5,346,080
Net change in unrealized 26,421,207 4,725,888
Total Trading Results 39,428,314 10,071,968
Interest Income (DWR) 6,008,143 4,219,684
Total Revenues 45,436,457 14,291,652
EXPENSES
Brokerage fees (DWR) 11,107,075 8,396,911
Management fees 5,955,922 4,148,649
Incentive fees 2,653,466 230,786
Total Expenses 19,716,463 12,776,346
NET INCOME 25,719,994 1,515,306
NET INCOME ALLOCATION
Limited Partners 25,458,926 1,500,589
General Partner 261,068 14,717
NET INCOME PER UNIT
Limited Partners 1.70 .19
General Partner 1.70 .19
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER SPECTRUM TECHNICAL 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 8,300,169.234 $111,852,280 $1,133,349
$112,985,629
Offering of Units 4,275,849.472 58,483,471 510,000
58,993,471
Net Income - 1,500,589 14,717
1,515,306
Redemptions (663,161.227) (9,083,723) -
(9,083,723)
Partners' Capital
September 30, 1997 11,912,857.479 $162,752,617 $1,658,066
$164,410,683
Partners' Capital
December 31, 1997 12,434,700.738 $180,099,271 $1,851,236
$181,950,507
Offering of Units 3,755,829.080 54,600,215 385,000
54,985,215
Net Income - 25,458,926 261,068
25,719,994
Redemptions (1,094,116.386) (16,157,325) -
(16,157,325)
Partners' Capital
September 30, 1998 15,096,413.432 $244,001,087 $2,497,304
$246,498,391
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER SPECTRUM TECHNICAL 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 25,719,994 1
,515,306
Noncash item included in net income :
Net change in unrealized (26,421,207) (
4,725,888)
(Increase) decrease in operating assets:
Interest receivable (DWR) (74,352) (
156,312)
Net option premiums - 187,275
Increase in operating liabilities:
Accrued brokerage fees (DWR) 309,743 225,943
Accrued management fees 202,545
147,659
Incentive fees payable 607,032
- -
Net cash provided by (used for) operating activities 343,755
(2,806,017)
CASH FLOWS FROM FINANCING ACTIVITIES
Continuous offering 54,985,215 5
8,993,471
Increase in redemptions payable 606,274 452,849
Increase in subscriptions receivable(2,233,770) (
313,115)
Redemptions of units (16,157,325)
(9,083,723)
Net cash provided by financing activities 37,200,394
50,049,482
Net increase in cash 37,544,149 4
7,243,465
Balance at beginning of period 168,849,922 1
06,460,248
Balance at end of period 206,394,071 1
53,703,713
<FN>
The accompanying notes are an integral part
of these financial statements.
</TABLE>
<PAGE>
DEAN WITTER SPECTRUM TECHNICAL 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
Technical 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 Technical L.P. is a limited partnership
organized to engage in the speculative trading of futures,
forward and options contracts on commodities, foreign currencies,
financial instruments and other commodity interests
(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 Strategic 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 Campbell & Company, Inc., Chesapeake Capital
Corporation ("Chesapeake") and John W. Henry & Company, Inc.,
(the "Trading Advisors"), to be the trading advisors for the
Partnership.
<PAGE>
DEAN WITTER SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. Summary of Significant Accounting Policies
Effective June 1, 1998, brokerage fees were reduced to 1/12 of
7.25% of Net Assets as of the first day of the month and the
monthly incentive fee rate with respect to the Net Assets
allocated to Chesapeake was changed to 19% of the "Trading
Profits" (as defined in the Limited Partnership Agreement).
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
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:
<PAGE>
DEAN WITTER SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Contract or Notional Amount
September 30, 1998 December 31, 1997
$ $
Exchange-Traded Contracts
Financial Futures:
Commitments to Purchase 821,969,000 302,165,000
Commitments to Sell 22,290,000 80,696,000
Commodity Futures:
Commitments to Purchase 25,939,000 36,753,000
Commitments to Sell 82,475,000 84,557,000
Foreign Futures:
Commitments to Purchase 1,557,388,000 283,941,000
Commitments to Sell 120,514,000 379,781,000
Off-Exchange-Traded
Forward Currency Contracts
Commitments to Purchase 516,287,000 116,349,000
Commitments to Sell 248,607,000 203,705,000
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.
The net unrealized gain on open contracts are reported as a
component of "Equity in Commodity futures trading accounts" on
the Statements of Financial Condition and totaled $38,717,919 and
$12,296,712 at September 30, 1998 and December 31, 1997,
respectively.
<PAGE>
DEAN WITTER SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Of the $38,717,919 net unrealized gain on open contracts at
September 30, 1998, $35,215,556 was related to exchange-traded
futures contracts and $3,502,363 related to off-exchange-traded
forward currency contracts.
Of the $12,296,712 net unrealized gain on open contracts at
December 31, 1997, $11,977,756 related to exchange-traded futures
contracts and $318,956 related to off-exchange-traded forward
currency contracts.
Exchange-traded futures contracts held by the Partnership at
September 30, 1998 and December 31, 1997, mature through
September 1999 and December 31, 1998, respectively. Off-exchange-
traded forward currency contracts held by the Partnership at
September 30, 1998 and December 31, 1997, mature through December
1998 and March 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
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
<PAGE>
DEAN WITTER SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, is 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 contracts, which
funds, in the aggregate, totaled $241,609,627 and $180,827,678 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 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>
DEAN WITTER SPECTRUM TECHNICAL L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
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 354,177,000 125,801,000
Commodity Futures 21,708,000 93,258,000
Foreign Futures 662,496,000 360,427,000
Off-Exchange-Traded Forward
Currency Contracts 397,309,000 454,483,000
December 31, 1997
Assets Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 233,922,000 153,604,000
Options on Financial Futures 6,705,000 347,000
Commodity Futures 58,233,000 60,140,000
Options on Commodity Futures 2,181,000 -
Foreign Futures 205,510,000 168,044,000
Options on Foreign Futures 4,070,000 -
Off-Exchange-Traded Forward
Currency Contracts 103,299,000 111,186,000
<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 limits". Pursuant to such regulations, during
a single trading day no trades may be executed at prices beyond
the daily limit. If the price for a particular future 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
$38,117,102 and posted a gain in Net Asset Value per Unit. The
most significant gains were recorded in financial futures during
August
<PAGE>
and September from long global interest rate futures positions.
Long U.S. bond futures were especially profitable in September as
domestic bond prices moved higher in anticipation of an interest
rate cut by the Federal Reserve, the release of President
Clinton's grand jury testimony and on reports of losses by
several major hedge funds. Long European, particularly German,
and Japanese interest rate futures positions also provided gains
as the prices in these markets moved higher in response to global
economic uncertainty. Additional profits were recorded in the
agricultural markets throughout the quarter from short corn and
livestock futures positions as agricultural prices moved lower on
continued reports of abundant supplies and decreasing demand. A
portion of the Partnership's overall gains for the quarter was
offset by losses in the metals markets from short silver futures
positions held during September as precious metals prices were
pushed higher by the weakness in the U.S. dollar. As a result,
previous gains in this market resulting from a significant
decline in silver prices during August were returned. Additional
losses were experienced in the currency markets from short
British pound and Japanese yen positions as the value of these
currencies increased versus the U.S. dollar during August. This
weakness in the U.S. dollar was attributed to fears over the
White House scandal, the effect of the Latin American markets on
the U.S. economy, and the direction of U.S. interest rates.
These currency losses offset gains recorded from trading in the
Swiss franc throughout the quarter. Smaller losses were recorded
in the soft commodities markets from short coffee futures
positions as coffee prices reversed sharply higher in late July.
These losses offset
<PAGE>
gains from short sugar futures positions held during August as
sugar prices decreased due to lower demand and growing supplies
amid economic turmoil in emerging markets worldwide. Total
expenses for the three months ended September 30, 1998 were
$8,512,501, resulting in net income of $29,604,601. The value of
an individual Unit in the Partnership increased from $14.33 at
June 30, 1998 to $16.33 at September 30, 1998.
For the nine months ended September 30, 1998, the Partnership
recorded total trading revenues including interest income of
$45,436,457 and posted an increase in Net Asset Value per Unit.
The most significant gains were recorded in the financial futures
markets from long German bond futures positions as prices trended
higher during a majority of the first nine months, particularly
during the third quarter. Other long European and U.S. interest
rate futures positions contributed additional gains, primarily
during the last quarter, as a result of economic and political
instability worldwide. The agricultural markets provided gains
from short corn futures positions as grain prices moved lower
during a majority of the last quarter as supplies grew. The
energy markets recorded year-to-date gains from short crude oil
futures positions as oil prices declined during January and early
February as tensions eased in the Middle East. A portion of the
Partnership's overall gains was offset by losses in the metal
markets from long gold futures positions as gold prices moved
lower during a majority of the second quarter, adding to
January's losses from short gold futures positions as prices
moved higher during that month. Additional losses in metals
resulted from
<PAGE>
short silver futures positions during September as precious
metals prices pushed higher due to the weak U.S. dollar and long
copper futures positions during May as prices in this market
moved lower. The currency markets experienced additional losses
primarily from transactions involving the British pound as its
value moved without consistent direction during the first half of
the year. These losses continued during the third quarter as
short British pound positions proved unfavorable against the
weakening U.S. dollar. Total expenses for the nine months ended
September 30, 1998 were $19,716,463, resulting in net income of
$25,719,994. The value of an individual Unit in the Partnership
increased from $14.63 at December 31, 1997 to $16.33 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 revenues including interest income of
$11,256,389 and posted an increase in Net Asset Value per Unit.
The most significant gains were recorded in global interest rate
futures during July and September as long positions in
Australian, Japanese and most European interest rate futures
profited from an upward price trend. In global stock index
futures, gains were recorded from long positions in European and
U.S. stock index futures as prices in these markets also
increased during July and September. Additional gains were
recorded from short Nikkei Index futures positions as Japanese
equity prices declined during August and September. These gains
were partially offset by losses recorded from trendless price
movement in soft commodities
<PAGE>
and agricultural futures throughout a majority of the quarter.
Smaller losses experienced in currencies as a result of
inconsistent movement in the value of the British pound relative
to the U.S. dollar also offset a portion of overall Partnership
gains for the quarter. Total expenses for the three months
ended September 30, 1997 were $4,569,428 resulting in net income
of $6,686,961. The value of an individual Unit in the
Partnership increased from $13.18 at June 30, 1997 to $13.80 at
September 30, 1997.
For the nine months ended September 30, 1997, the Partnership
recorded total trading revenues including interest income of
$14,291,652 and posted an increase in Net Asset Value per Unit.
The most significant gains were recorded in financial futures as
long positions in global interest rate and stock index futures
profited from an upward price move during July and September.
Additional gains were recorded in metals from short gold futures
positions as gold prices declined during January, April, June and
July. Smaller profits were recorded in soft commodities as long
positions in coffee futures profited from a strong upward trend
during February, April and May. These gains were partially
offset by losses experienced in energy futures as oil prices
moved in a choppy pattern throughout a majority of the first nine
months of the year. Smaller losses recorded from trendless
movement in agricultural futures prices during the third quarter,
as well as in the value of the British pound throughout the year,
also offset a portion of the Partnership's overall gains for the
first three quarters of 1997. Total expenses for the nine months
<PAGE>
ended September 30, 1997 were $12,776,346 resulting in net income
of $1,515,306. The value of an individual Unit in the
Partnership increased from $13.61 at December 31, 1996 to $13.80
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
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.
<PAGE>
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
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
<PAGE>
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 its 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 filed. 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 Strategic L.P. ("Spectrum
Strategic") 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 Strategic and
Spectrum Global Balanced at that time, they were subsequently
allocated for convenience purposes as follows: Spectrum Strategic
4,000,000, the Partnership 4,000,000 and Spectrum Global Balanced
2,000,000. The Partnership, Spectrum Strategic 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 among the Spectrum Series as follows:
Spectrum Strategic 6,000,000, the Partnership 9,000,000 and
Spectrum Global Balanced 5,000,000. The Partnership, Spectrum
Strategic and 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 Strategic and Spectrum Global Balanced as
follows: Spectrum Strategic 2,500,000, the Partnership 5,000,000
<PAGE>
and Spectrum Global Balanced 1,000,000. The Partnership registered
an additional 5,000,000 Units pursuant to another Registration
Statement on Form S-1, which became effective on May 11, 1998 (SEC
File Number 333-47831). 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, 17,647,070.239 Units were sold, leaving
5,352,929.761 Units unsold as of September 30, 1998. The aggregate
price of the Units sold through September 30, 1998 is $224,294,230.
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 Technical
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 Technical 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> 206,394,071
<SECURITIES> 0
<RECEIVABLES> 5,931,305<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 251,043,295<F2>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 251,043,295<F3>
<SALES> 0
<TOTAL-REVENUES> 45,436,457<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 19,716,463
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 25,719,994
<INCOME-TAX> 0
<INCOME-CONTINUING> 25,719,994
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,719,994
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Receivables include subscriptions receivable of $5,199,391 and
interest receivable of $731,914.
<F2>In addition to cash and receivables, total assets include net
unrealized gain on open contracts of $38,717,919.
<F3>Liabilities include redemptions payable of $1,615,504,
accrued brokerage fees of $1,406,937, accrued management fees of
$776,241 and incentive fees payable of $746,222.
<F4>Total revenues include realized trading revenue of $13,007,107,
net change in unrealized of $26,421,207 and interest income of
$6,008,143.
</FN>
</TABLE>
