DEAN WITTER INTERMEDIATE TERM US TREASURY TRUST, 497, 1995-09-26

DEAN WITTER INTERMEDIATE TERM US TREASURY TRUST
497, 1995-09-26

Previous: FIRST TRUST COMBINED SERIES 254, 487, 1995-09-26

Next: FIRST TRUST SPECIAL SITUATIONS TRUST SERIES 124, 487, 1995-09-26

<PAGE>
Filed Pursuant to Rule 497(c)
Registration File No.: 33-57789

<PAGE>
DEAN WITTER
INTERMEDIATE TERM
U.S. TREASURY TRUST

PROSPECTUS --SEPTEMBER 18, 1995

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

Dean Witter Intermediate Term U.S. Treasury Trust (the "Fund") is an open-end
diversified management investment company whose investment objective is
current income and preservation of principal. The Fund seeks to achieve its
objective by investing substantially all of its assets in U.S. Treasury
securities backed by the full faith and credit of the U.S. Government. (See
"Investment Objective and Policies.") Shares of the Fund are not issued,
insured or guaranteed, as to value or yield, by the U.S. Government or its
agencies or instrumentalities.

Shares of the Fund are sold and redeemed at net asset value without the
imposition of a sales charge. The Fund is authorized to reimburse specific
expenses incurred in promoting the distribution of the Fund's shares,
including personal services to shareholders and maintenance of shareholder
accounts, in accordance with a Plan of Distribution pursuant to Rule 12b-1
under the Investment Company Act of 1940. Reimbursement may in no event
exceed an amount equal to payments at the annual rate of 0.35% of the average
daily net assets of the Fund.

This Prospectus sets forth concisely the information you should know before
investing in the Fund. It should be read and retained for future reference.
Additional information about the Fund is contained in the Statement of
Additional Information, dated September 18, 1995, which has been filed with
the Securities and Exchange Commission, and which is available at no charge
upon request of the Fund at the address or telephone numbers listed on this
page. The Statement of Additional Information is incorporated herein by
reference.

TABLE OF CONTENTS

Prospectus Summary .................................................... 2

Summary of Fund Expenses .............................................. 3

The Fund and its Management ........................................... 4

Investment Objective and Policies ..................................... 4

Purchase of Fund Shares ............................................... 6

Shareholder Services .................................................. 8

Redemptions and Repurchases ........................................... 10

Dividends, Distributions and Taxes .................................... 11

Performance Information ............................................... 12

Additional Information ................................................ 13

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND THE SHARES ARE
NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY.

DEAN WITTER
INTERMEDIATE TERM U.S. TREASURY TRUST
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
(212) 392-2550
(800) 869-6397

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.

Dean Witter Distributors Inc., Distributor

<PAGE>

PROSPECTUS SUMMARY

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

<TABLE>
<CAPTION>
<S> <C>
The Fund The Fund is organized as a Trust, commonly known as a Massachusetts
business trust, and is an open-end diversified management investment
company investing in U.S. Treasury securities backed by the full faith and
credit of the U.S. Government.

Shares Shares of beneficial interest with $0.01 par value (see page 13).
Offered
Offering The price of the shares offered by this Prospectus is determined once daily
Price as of 4:00 p.m., New York time, on each day that the New York Stock
Exchange is open, and is equal to the net asset value per share without a
sales charge (see page 6).

Minimum The minimum initial purchase is $1,000 and the minimum subsequent
Purchase investment is $100 (see page 6).
Investment The investment objective of the Fund is current income and preservation of
Objective principal.

Investment In order to maximize the amount of the Fund's dividends which are exempt
Policies from state and local income taxation, the Fund will invest substantially
all of its assets in U.S. Treasury securities which are direct obligations
of the U.S. Government (see page 4).

Investment Dean Witter InterCapital Inc. ("InterCapital"), the Investment Manager of
Manager the Fund, and its wholly-owned subsidiary, Dean Witter Services Company
Inc. serve in various investment management, advisory, management and
administrative capacities to ninety-six investment companies and other
portfolios with assets of approximately $75.1 billion at July 31, 1995 (see
page 4).

Management Fee The Investment Manager receives a monthly fee at the annual rate of 0.35%
of daily net assets (see page 4).

Dividends and Dividends are declared daily and paid monthly. Capital gains distributions,
Capital Gains if any, are paid at least once a year or are retained for reinvestment by
Distributions the Fund. Dividends and capital gains distributions are automatically
invested in additional shares at net asset value unless the shareholder
elects to receive cash (see page 11).

Distributor Dean Witter Distributors Inc. (the "Distributor") is the distributor of the
and Plan of Fund's shares (see page 6). The Fund is authorized to reimburse specific
Distribution expenses incurred in promoting the distribution of the Fund's shares,
including personal services to shareholders and maintenance of shareholders
accounts, in accordance with a Plan of Distribution with the Distributor
pursuant to Rule 12b-1 under the Investment Company Act of 1940.
Reimbursement may in no event exceed an amount equal to payments at an
annual rate of 0.35% of average daily net assets of the Fund (see page 7).

Redemption At net asset value; account may be involuntarily redeemed if total value of
the account is less than $100 (see pages 10-11).

Risks The Fund invests substantially all of its assets in U.S. Treasury
securities which are subject to minimal risk of default but which may be
subject to risk of loss of investment value due to interest rate
fluctuations. It may engage in the purchase of such securities on a
when-issued basis. The value of the Fund's portfolio securities, and
therefore the Fund's net asset value per share, may increase or decrease
due to various factors, principally changes in prevailing interest rates.
Generally, a rise in interest rates will result in a decrease in the Fund's
net asset value per share, while a drop in interest rates will result in an
increase in the Fund's net asset value per share. A portion of the U.S.
Treasury securities in which the Fund invests may be zero coupon Treasury
securities. Such securities are subject to greater market price
fluctuations during periods of changing prevailing interest rates (see
pages 5-6).
</TABLE>

The above is qualified in its entirety by the detailed information appearing
elsewhere in this Prospectus
and in the Statement of Additional Information.

<PAGE>

SUMMARY OF FUND EXPENSES
- -----------------------------------------------------------------------------

The following table illustrates all expenses and fees that a shareholder
of the Fund will incur.

<TABLE>
<CAPTION>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases ................................ None
Maximum Sales Charge Imposed on Reinvested Dividends ..................... None
Deferred Sales Charge .................................................... None
Redemption Fees .......................................................... None
Exchange Fee ............................................................. None
ANNUAL FUND OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees+ ......................................................... 0.175%
12b-1 Fees* .............................................................. 0.350%
Other Expenses+ .......................................................... 0.175%
Total Fund Operating Expenses**+ ......................................... 0.700%
<FN>

- ---------------
* A portion of the 12b-1 fee, which may not exceed 0.25% of the Fund's
average daily net assets, is characterized as a service fee within
the meaning of National Association of Securities Dealers ("NASD")
guidelines and is a payment made for personal service and/or
maintenance of shareholder accounts provided by account executives
(See, "Purchase of Fund Shares").

** "Total Fund Operating Expenses," as shown above, is based upon the
sum of the 12b-1 Fees, Management Fees and estimated "Other
Expenses," which may be incurred by the Fund for the fiscal period
ending February 29, 1996, as annualized.

+ The Investment Manager has undertaken to assume all expenses (except
for any brokerage and 12b-1 fees) and to waive the compensation
provided for in its Management Agreement until such time as the Fund
has $50 million of net assets or until six months from the date of
commencement of the Fund's operations, whichever occurs first. The
fees and expenses disclosed above reflect the assumption of expenses
and the waiver of any compensation by the Investment Manager for a
six month period from commencement of operations. Assuming no waiver
of management fees and no assumption of other expenses, it is
estimated that, for the fiscal period ending February 29, 1996, the
"Management Fees" would be 0.35%, "Other Expenses" would be 0.348%
and "Total Fund Operating Expenses" would be 1.048%, as annualized.
</TABLE>

<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS
- ---------------------------------------------------------------------------------- -------- ---------
<S> <C> <C>
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period: ................. $7 $22
</TABLE>

The above example should not be considered a representation of past or
future expenses or performance. Actual expenses of the Fund may be more or
less than those shown.

The purpose of this table is to assist the investor in understanding the
various costs and expenses that an investor in the Fund will bear directly or
indirectly. For a more complete description of these costs and expenses, see
"The Fund and its Management" and "Purchase of Fund Shares--Plan of
Distribution" in this Prospectus.

Long-term shareholders of the Fund may pay more in distribution fees than
the economic equivalent of the maximum front-end sales charges permitted by
the NASD.

<PAGE>

THE FUND AND ITS MANAGEMENT
- -----------------------------------------------------------------------------

Dean Witter Intermediate Term U.S. Treasury Trust (the "Fund") is an
open-end diversified management investment company. The Fund is a trust of
the type commonly known as a "Massachusetts business trust" and was organized
under the laws of The Commonwealth of Massachusetts on February 9, 1995.

Dean Witter InterCapital Inc. ("InterCapital" or the "Investment
Manager"), whose address is Two World Trade Center, New York, New York 10048,
is the Fund's Investment Manager. The Investment Manager, which was
incorporated in July, 1992, is a wholly-owned subsidiary of Dean Witter,
Discover & Co. ("DWDC"), a balanced financial services organization providing
a broad range of nationally marketed credit and investment products.

InterCapital and its wholly-owned subsidiary, Dean Witter Services
Company, serve in various investment management, advisory, management and
administrative capacities to a total of ninety-six investment companies,
thirty of which are listed on the New York Stock Exchange, with combined
total assets of approximately $72.8 billion as of July 31, 1995. The
Investment Manager also manages portfolios of pension plans, other
institutions and individuals which aggregated approximately $2.3 billion at
such date.

The Fund has retained the Investment Manager to provide administrative
services, manage its business affairs and manage the investment of the Fund's
assets, including the placing of orders for the purchase and sale of
portfolio securities. InterCapital has retained Dean Witter Services Company
Inc. to perform the aforementioned administrative services for the Fund. The
Fund's Board of Trustees reviews the various services provided by or under
the direction of the Investment Manager to ensure that the Fund's general
investment policies and programs are being properly carried out and that
administrative services are being provided to the Fund in a satisfactory
manner.

As full compensation for the services and facilities furnished to the Fund
and for expenses of the Fund assumed by the Investment Manager, the Fund pays
the Investment Manager monthly compensation calculated daily by applying an
annual rate of 0.35% to the Fund's net assets determined as of the close of
each business day.

The Fund's expenses include: the fee of the Investment Manager; taxes;
certain legal, transfer agent, custodian and auditing fees; and printing and
other expenses relating to the Fund's operations which are not expressly
assumed by the Investment Manager under its Investment Management Agreement
with the Fund. The Investment Manager has undertaken to assume all expenses
(except for brokerage and 12b-1 fees) and waive the compensation provided for
in its Investment Management Agreement until such time as the Fund has $50
million of net assets or until six months from the date of commencement of
the Fund's operations, whichever occurs first.

INVESTMENT OBJECTIVE AND POLICIES
- -----------------------------------------------------------------------------

The investment objective of the Fund is current income and preservation of
principal. The Fund will seek to achieve its investment objective by
investing, under normal circumstances, at least 95% of its total assets in
U.S. Treasury securities. U.S. Treasury securities, which presently consist
of U.S. Treasury bills, U.S. Treasury notes and U.S. Treasury bonds, are
direct obligations of the U.S. Treasury and are backed by the "full faith and
credit" of the U.S. Government. The investment objective is a fundamental
policy of the Fund and may not be changed without the approval of the holders
of a majority of the Fund's shares. There is no assurance that the Fund's
investment objective will be achieved.

Neither the value nor the yield of the U.S. Treasury securities in which
the Fund invests (or the value or yield of shares of the Fund) are guaranteed
by the U.S. Government. The value of the Fund's portfolio securities and
therefore the net asset value of the Fund's shares may increase or decrease
due to changes in prevailing interest rates and other factors. Generally, as
prevailing interest rates rise, the value of the securities held by the Fund,
and concomitantly, the net asset value of the Fund's shares, will fall.
Intermediate term debt securities are generally subject to a lesser degree of
market fluctuation as a result of changes in interest rates than debt
securities with longer maturities. Conversely, the yield available on
intermediate term securities has also historically been lower than those
available from long term securities. Under normal circumstances, the Fund
will maintain a portfolio with a dollar-weighted average maturity of

<PAGE>

between 3 and 8 years. There may be periods during which, in the opinion of
the Investment Manager, market conditions warrant the Fund retaining cash or
investing a substantial portion of its assets in short-term U.S. Treasury
securities. During such periods in which the Fund has adopted a temporary
"defensive" posture, the Fund's average dollar-weighted maturity may be less
than three years.

ZERO COUPON TREASURY SECURITIES. A portion of the U.S. Treasury securities
purchased by the Fund may be "zero coupon" Treasury securities. These are
U.S. Treasury notes and bonds which have been stripped of their unmatured
interest coupons and receipts or which are certificates representing
interests in such stripped debt obligations and coupons. Such securities are
purchased at a discount from their face amount, giving the purchaser the
right to receive their full value at maturity. A zero coupon security pays no
interest to its holder during its life. Its value to an investor consists of
the difference between its face value at the time of maturity and the price
for which it was acquired, which is generally an amount significantly less
than its face value (sometimes referred to as a "deep discount" price).

The interest earned on such securities is, implicitly, automatically
compounded and paid out at maturity. While such compounding at a constant
rate eliminates the risk of receiving lower yields upon reinvestment of
interest if prevailing interest rates decline, the owner of a zero coupon
security will be unable to participate in higher yields upon reinvestment of
interest received if prevailing interest rates rise. For this reason, zero
coupon securities are subject to substantially greater market price
fluctuations during periods of changing prevailing interest rates than are
comparable debt securities which make current distributions of interest.
Current federal tax law requires that a holder (such as the Fund) of a zero
coupon security accrue a portion of the discount at which the security was
purchased as income each year even though the Fund receives no interest
payments in cash on the security during the year. See "Dividends,
Distributions and Taxes."

Certain banks and brokerage firms have separated ("stripped") the
principal portions ("corpus") from the coupon portions of the U.S. Treasury
bonds and notes and sell them separately in the form of receipts or
certificates representing undivided interests in these instruments (which
instruments are generally held by a bank in a custodial or trust account).
The Fund will not purchase any such receipts or certificates representing
stripped corpus or coupon interests in U.S. Treasury securities sold by banks
and brokerage firms. The Fund will only purchase zero coupon Treasury
securities which have been stripped by the Federal Reserve Bank.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES AND FIRM COMMITMENTS. From time
to time, in the ordinary course of business, the Fund may purchase U.S.
Treasury securities on a when-issued or delayed delivery basis or may
purchase or sell U.S. Treasury securities on a firm commitment basis. For
example, the Fund may wish to purchase U.S. Treasury notes and bonds sold at
periodic U.S. Treasury auctions prior to a month or more of their issuance
("when-issued"). When such transactions are negotiated, the price is fixed at
the time of the commitment, but delivery and payment can take place a month
or more after the date of the commitment. While the Fund will only purchase
securities on a when-issued, delayed delivery or firm commitment basis with
the intention of acquiring the securities, the Fund may sell the securities
before the settlement date, if it is deemed advisable. The securities so
purchased or sold are subject to market fluctuation and no interest accrues
to the purchaser during this period. At the time the Fund makes the
commitment to purchase or sell securities on a when-issued, delayed delivery
or firm commitment basis, it will record the transaction and thereafter
reflect the value, each day, of such security purchased or, if a sale, the
proceeds to be received, in determining its net asset value. At the time of
delivery of the securities, their value may be more or less than the purchase
or sale price. The Fund will also establish a segregated account with its
custodian bank in which it will continually maintain cash or cash equivalents
or other portfolio (U.S. Treasury) securities equal in value to commitments
to purchase securities on a when-issued, delayed delivery or firm commitment
basis.

REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements in an
amount up to 5% of its net assets. Repurchase agreements may be viewed as a
type of secured lending by the Fund, and which typically involve the
acquisition by the Fund of debt securities, from a selling financial
institution such as a bank, savings and loan association or broker-dealer.
The agreement provides that the Fund will sell back to the institution, and
that the institution will repurchase, the underlying security ("collateral")
at a specified price and at a fixed time in the future, usually not more than
seven days from the date of purchase.

<PAGE>

While repurchase agreements involve certain risks not associated with direct
investments in debt securities, the Fund follows procedures designed to
minimize such risks. These procedures include effecting repurchase
transactions only with large, well-capitalized and well-established financial
institutions whose financial condition will be continually monitored by the
Adviser subject to procedures established by the Board of Trustees of the
Fund. In addition, the value of the collateral underlying the repurchase
agreement will be at least equal to the repurchase price, including any
accrued interest earned on the repurchase agreement. In the event of a
default or bankruptcy by a selling financial institution, the Fund will seek
to liquidate such collateral. However, the exercising of the Fund's right to
liquidate such collateral could involve certain costs or delays and, to the
extent that proceeds from any sale upon a default of the obligation to
repurchase were less than the repurchase price, the Fund could suffer a loss.
The Fund will not invest in repurchase agreements that do not mature within
seven days and in other illiquid securities if, in the aggregate, such
investments amount to more than 15% of its net assets.

PORTFOLIO MANAGEMENT

The Fund's portfolio is actively managed by its Investment Manager with a
view to achieving the Fund's investment objective. In determining which
securities to purchase for the Fund or hold in the Fund's portfolio, the
Investment Manager will rely on information from various sources, including
research, analysis and appraisals of brokers and dealers, including Dean
Witter Reynolds Inc. ("DWR"), a broker-dealer affiliate of the Investment
Manager; the views of the Trustees of the Fund and others regarding economic
developments and interest rate trends; and the Investment Manager's own
analysis of factors it deems relevant. The Fund's portfolio is managed within
InterCapital's Government Fixed Income Group, which manages seven funds and
fund portfolios, with approximately $10.3 billion in assets as of June 30,
1995. Rajesh K. Gupta, Senior Vice President of InterCapital and a member of
InterCapital's Taxable Fixed-Income Group, is the primary portfolio manager
of the Fund. Mr. Gupta has been a portfolio manager at InterCapital for over
five years.

Brokerage commissions are not normally charged on the purchase or sale of
U.S. Government obligations, but such transactions may involve costs in the
form of spreads between bid and asked prices. Pursuant to an order of the
Securities and Exchange Commission, the Fund may effect principal
transactions in certain money market instruments with DWR. In addition, the
Fund may incur brokerage commissions on transactions conducted through DWR.
Although the Fund does not intend to engage in short-term trading of
portfolio securities as a means of achieving its investment objective, it may
sell portfolio securities without regard to the length of time they have been
held whenever such sale will, in the opinion of the Investment Manager,
strengthen the Fund's position and contribute to its investment objective. It
is not anticipated that the portfolio trading engaged in by the Fund will
result in its portfolio turnover rate exceeding 100%.

PURCHASE OF FUND SHARES
- -----------------------------------------------------------------------------

The Fund offers its shares for sale to the public on a continuous basis.
Pursuant to a Distribution Agreement between the Fund and Dean Witter
Distributors Inc. (the "Distributor"), an affiliate of the Investment
Manager, shares of the Fund are distributed by the Distributor and offered by
DWR and others who have entered into Selected Dealer agreements with the
Distributor ("Selected Broker-Dealers"). The principal executive office of
the Distributor is located at Two World Trade Center, New York, New York
10048.

The minimum initial purchase is $1,000 and subsequent purchases of $100 or
more may be made by sending a check, payable to Dean Witter Intermediate Term
U.S. Treasury Trust, directly to Dean Witter Trust Company (the "Transfer
Agent") at P.O. Box 1040, Jersey City, NJ 07303 or by contacting an account
executive of DWR or another Selected Broker-Dealer. In the case of
investments pursuant to systematic payroll deduction plans (including
Individual Retirement Plans), the Fund, in its discretion, may accept
investments without regard to any minimum amounts which would otherwise be
required if the Fund has reason to believe that additional investments will
increase the investment in all accounts under such plans to at least $1,000.
Certificates for shares purchased will not be issued unless requested by the
shareholder in writing to the Transfer Agent. The offering price will be the
net asset value per share next determined (see "Determination of Net Asset
Value" below) following receipt of an order.

<PAGE>

Shares of the Fund are sold through the Distributor on a normal three
business day settlement basis; that is, payment generally is due on or before
the third business day (settlement date) after the order is placed with the
Distributor. Shares of the Fund purchased through the Distributor are
entitled to dividends beginning on the next business day following settlement
date. Since DWR and other Selected Broker-Dealers forward investor's funds on
settlement date, they will benefit from the temporary use of the funds where
payment is made prior thereto. Shares purchased through the Transfer Agent
are entitled to dividends beginning on the next business day following
receipt of an order. As noted above, orders placed directly with the Transfer
Agent must be accompanied by payment. Investors will be entitled to receive
capital gains distributions if their order is received by the close of
business on the day prior to the record date for such distributions.

Sales personnel are compensated for selling shares of the Fund at the time
of their sale by the Distributor and/or Selected Broker-Dealer. In addition,
some sales personnel of the Selected Broker-Dealer will receive various types
of non-cash compensation as special sales incentives including trips,
educational and/or business seminars and merchandise. The Fund and the
Distributor reserve the right to reject any purchase orders.

DETERMINATION OF NET ASSET VALUE

The net asset value per share of the Fund is determined by taking the value
of all the assets of the Fund, subtracting all liabilities, dividing by the
number of shares outstanding and adjusting the result to the nearest cent.
The net asset value per share is determined by the Investment Manager as of
4:00 P.M. New York time (or, on days when the New York Stock Exchange closes
prior to 4:00 p.m., at such earlier time), on each day that the New York
Stock Exchange is open. The net asset value per share will not be determined
on Good Friday and on such other federal and non-federal holidays as are
observed by the New York Stock Exchange.

In the calculation of the Fund's net asset value: (1) all portfolio
securities for which over-the-counter market quotations are readily available
are valued at the bid price; (2) when market quotations are not readily
available, including circumstances under which it is determined by the
Investment Manager that sale or bid prices are not reflective of a security's
market value, portfolio securities are valued at their fair value as
determined in good faith under procedures established by and under the
general supervision of the Fund's Board of Trustees (valuation of securities
for which market quotations are not readily available may be based upon
current market prices of securities which are comparable in coupon, rating
and maturity or an appropriate matrix utilizing similar factors); and (3)
short-term debt instruments having a maturity date of more than 60 days are
valued on a "mark-to-market" basis, that is, at prices based on market
quotations for securities of similar type, yield, quality and maturity, until
60 days prior to maturity and thereafter at amortized cost. Short-term
instruments having a maturity date of 60 days or less at the time of purchase
are valued at amortized cost unless the Board of Trustees determines this
does not represent fair market value.

Certain of the Fund's portfolio securities may be valued by an outside
pricing service approved by the Fund's Trustees. The pricing service utilizes
a matrix system incorporating security quality, maturity and coupon as the
evaluation model parameters, and/or research and evaluations by its staff,
including review of broker-dealer market price quotations, in determining
what it believes is the fair valuation of the portfolio securities valued by
such pricing service.

PLAN OF DISTRIBUTION

The Fund has entered into a Plan of Distribution pursuant to Rule 12b-1 under
the Investment Com- pany Act of 1940, as amended (the "Act"), with the
Distributor whereby the expenses of certain activities and services,
including personal services to shareholders and maintenance of shareholder
accounts, in connection with the distribution of the Fund's shares are
reimbursed. The principal activities and services which may be provided by
the Distributor and its affiliates, or any other Selected Broker-Dealer under
the Plan include: (1) compensation to, and expenses of, DWR account
executives and others, including overhead and telephone expenses; (2) sales
incentives and bonuses to sales representatives and to marketing personnel in
connection with promoting sales of the Fund's shares; (3) expenses incurred
in connection with promoting sales of the Fund's shares; (4) preparing and
distributing sales literature; and (5) providing advertising and promotional
activities, including direct mail solicitation and television, radio,
newspaper, magazine and other media advertisements.

<PAGE>

Reimbursements for these services will be made in monthly payments by the
Fund, which will in no event exceed an amount equal to a payment at the
annual rate of 0.35% of the Fund's average daily net assets. A portion of the
amount payable pursuant to the Plan, which may not exceed 0.25% of the Fund's
average daily net assets, is characterized as a service fee within the
meaning of the NASD guidelines. Expenses incurred pursuant to the Plan in any
fiscal year will not be reimbursed by the Fund through payments accrued in
any subsequent fiscal year.

SHAREHOLDER SERVICES
- -----------------------------------------------------------------------------

AUTOMATIC INVESTMENT OF DIVIDENDS AND DISTRIBUTIONS.
All income dividends and capital gains distributions are automatically paid
in full and fractional shares of the Fund (or, if specified by the
shareholder, any other open-end investment company for which InterCapital
serves as investment manager (collectively, with the Fund, the "Dean Witter
Funds")), unless the shareholder requests that they be paid in cash.

INVESTMENT OF DIVIDENDS AND DISTRIBUTIONS RECEIVED IN CASH. Any shareholder
who receives a cash payment representing a dividend or capital gains
distribution may invest such dividend or distribution at the net asset value
next determined after receipt by the Transfer Agent by returning the check or
the proceeds to the Transfer Agent within 30 days after the payment date.

EASYINVEST (SERVICE MARK) Shareholders may subscribe to EasyInvest, an
automatic purchase plan which provides for any amount from $100 to $5,000 to
be transferred automatically from a checking or savings account, on a
semi-monthly, monthly or quarterly basis, to the Fund's Transfer Agent for
investment in shares of the Fund.

SYSTEMATIC WITHDRAWAL PLAN. A systematic withdrawal plan (the "Withdrawal
Plan") is available for shareholders who own or purchase shares of the Fund
having a minimum value of $10,000 based upon the then current net asset
value. The Withdrawal Plan provides for monthly or quarterly (March, June,
September and December) checks in any dollar amount, not less than $25, or in
any whole percentage of the account balance, on an annualized basis. Only
shareholders having accounts in which no share certificates have been issued
will be permitted to enroll in the Withdrawal Plan.

Shareholders wishing to enroll in the Withdrawal Plan should make this
election on the Investment Application or contact their DWR or other Selected
Broker-Dealer account executive or the Transfer Agent.

TAX SHELTERED RETIREMENT PLANS. Retirement plans are available through the
Investment Manager for use by the self-employed, eligible Individual
Retirement Accounts and Custodial Accounts under Section 403(b)(7) of the
Internal Revenue Code. Adoption of such plans should be on advice of legal
counsel or tax adviser.

For further information regarding plan administration, custodial fees and
other details, investors should contact their DWR or other Selected
Broker-Dealer account executive or the Transfer Agent.

EXCHANGE PRIVILEGE

An "Exchange Privilege", that is, the privilege of exchanging shares of
certain Dean Witter Funds for shares of the Fund, exists whereby shares of
various Dean Witter Funds which are open-end investment companies sold with
either a front-end (at time of purchase) sales charge ("FESC funds") or a
contingent deferred (at time of redemption) sales charge ("CDSC funds"), may
be exchanged for shares of the Fund, Dean Witter Short-Term U.S. Treasury
Trust, Dean Witter Limited Term Municipal Trust, Dean Witter Short-Term Bond
Fund, Dean Witter Balanced Growth Fund and Dean Witter Balanced Income Fund
and for shares of five Dean Witter Funds which are money market funds: Dean
Witter Liquid Asset Fund Inc., Dean Witter U.S. Government Money Market
Trust, Dean Witter Tax-Free Daily Income Trust, Dean Witter California Tax
Free Daily Income Trust and Dean Witter New York Municipal Money Market Trust
(which eleven funds, including the Fund, are hereinafter collectively
referred to as the "Exchange Funds"). An exchange from an FESC fund or a CDSC
fund to an Exchange Fund that is not a money market fund is on the basis of
the next calculated net asset value per share of each fund after the exchange
order is received. When exchanging into a money market fund from an FESC fund
or a CDSC fund, shares of the FESC fund or the CDSC fund are redeemed at
their next calculated net asset value and exchanged for shares of the money
market fund at their net asset value determined the following business day.

<PAGE>

Subsequently, shares of the Exchange Fund received in an exchange for shares
of an FESC fund (regardless of the type of fund originally purchased) may be
redeemed and exchanged for shares of Exchange Funds, FESC funds or CDSC funds
(however, shares of CDSC funds, including shares acquired in exchange for (i)
shares of FESC funds or (ii) shares of Exchange Funds which were acquired in
exchange for shares of FESC funds, may not be exchanged for shares of FESC
funds). Additionally, shares of Exchange Funds received in an exchange for
shares of a CDSC fund (regardless of the type of fund originally purchased)
may be redeemed and exchanged for shares of Exchange Funds or CDSC funds.
Ultimately, any applicable contingent deferred sales charge ("CDSC") will
have to be paid upon redemption of shares originally purchased from a CDSC
fund. (If shares of an Exchange Fund received in exchange for shares
originally purchased from a CDSC fund are exchanged for shares of another
CDSC fund having a different CDSC schedule than that of the CDSC fund from
which the Exchange Fund shares were acquired, the shares will be subject to
the higher CDSC schedule.) During the period of time the shares originally
purchased from a CDSC fund remain in the Exchange Fund, the holding period
(for the purpose of determining the rate of CDSC) is frozen so that the
charge is based upon the period of time the shareholder actually held shares
of a CDSC fund. However, in the case of shares exchanged into an Exchange
Fund on or after April 23, 1990, upon a redemption of shares which results in
a CDSC being imposed, a credit (not to exceed the amount of the CDSC) will be
given in an amount equal to the Exchange Fund 12b-1 fees, if any, incurred on
or after that date which are attributable to those shares (see "Purchase of
Fund Shares--Plan of Distribution" in the respective Exchange Fund Prospectus
for a description of Exchange Fund distribution fees). Exchanges involving
FESC funds or CDSC funds may be made after the shares of the FESC fund or
CDSC fund acquired by purchase (not by exchange or dividend reinvestment)
have been held for thirty days. There is no waiting period for exchanges of
shares acquired by exchange or dividend reinvestment.

Purchases and exchanges should be made for investment purposes only. A
pattern of frequent exchanges may be deemed by the Distributor to be abusive
and contrary to the best interests of the Fund's other shareholders and, at
the Distributor's discretion, may be limited by the Fund's refusal to accept
additional purchases and/or exchanges from the investor. Although the Fund
does not have any specific definition of what constitutes a pattern of
frequent exchanges, and will consider all relevant factors in determining
whether a particular situation is abusive and contrary to the best interests
of the Fund and its other shareholders, investors should be aware that the
Fund and each of the other Dean Witter Funds may in their discretion limit or
otherwise restrict the number of times this Exchange Privilege may be
exercised by any investor. Any such restriction will be made by the Fund on a
prospective basis only, upon notice to the shareholder not later than ten
days following such shareholder's most recent exchange.

The Exchange Privilege may be terminated or revised at any time by the
Fund and/or any of such Dean Witter Funds for which shares of the Fund may be
exchanged, upon such notice as may be required by applicable regulatory
agencies (presently sixty days' prior written notice for termination or
material revision), provided that six months' prior written notice of
termination will be given to the shareholders who hold shares of the Exchange
Funds pursuant to this Exchange Privilege, and provided further that the
Exchange Privilege may be terminated or materially revised without notice
under certain unusual circumstances. Shareholders maintaining margin accounts
with DWR or another Selected Broker-Dealer are referred to their account
executive regarding restrictions on exchange of shares of the Fund pledged in
their margin account.

The current prospectus for each fund describes its investment objective(s)
and policies, and shareholders should obtain one and read it carefully before
investing. Exchanges are subject to the minimum investment requirement and
any other conditions imposed by each fund. In the case of any shareholder
holding a share certificate or certificates, no exchanges may be made until
all applicable share certificates have been received by the Transfer Agent
and deposited in the shareholder's account. An exchange will be treated for
federal income tax purposes the same as a repurchase or redemption of shares,
on which the shareholder may realize a capital gain or loss. However, the
ability to deduct capital losses on an exchange may be limited in situations
where there is an exchange of shares within ninety days after the shares are
purchased. The Exchange Privilege is only available in states where an
exchange may legally be made.

If DWR or another Selected Broker-Dealer is the current broker-dealer of
record and its account

<PAGE>

numbers are part of the account information, shareholders may initiate an
exchange of shares of the Fund for shares of any of the above Dean Witter
Funds pursuant to this Exchange Privilege by contacting their DWR or other
Selected Broker-Dealer account executive (no Exchange Privilege Authorization
Form is required). Other shareholders (and those shareholders who are clients
of DWR or another Selected Broker-Dealer but who wish to make exchanges
directly by writing or telephoning the Transfer Agent) must complete and
forward to the Transfer Agent an Exchange Privilege Authorization Form,
copies of which may be obtained from the Transfer Agent, to initiate an
exchange. If the Authorization Form is used, exchanges may be made by
contacting the Transfer Agent at (800) 869-6397 (toll free). The Fund will
employ reasonable procedures to confirm that exchange instructions
communicated over the telephone are genuine. Such procedures include
requiring various forms of personal identification such as name, mailing
address, social security or other tax identification number and DWR or other
Selected Broker-Dealer account number (if any). Telephone instructions will
also be recorded. If such procedures are not employed, the Fund may be liable
for any losses due to unauthorized or fraudulent instructions.

Telephone exchange instructions will be accepted if received by the
Transfer Agent between 9:00 a.m. and 4:00 p.m. New York time, on any day the
New York Stock Exchange is open. Any shareholder wishing to make an exchange
who has previously filed an Exchange Privilege Authorization Form and who is
unable to reach the Fund by telephone should contact his or her DWR or other
Selected Broker-Dealer account executive, if appropriate, or make a written
exchange request. Shareholders are advised that during periods of drastic
economic or market changes it is possible that the telephone exchange
procedures may be difficult to implement, although this has not been the
experience of the Dean Witter Funds in the past.

For further information regarding the Exchange Privilege, shareholders
should contact their DWR or other Selected Broker-Dealer account executive or
the Transfer Agent.

REDEMPTIONS AND REPURCHASES
- -----------------------------------------------------------------------------

REDEMPTIONS. Shares of the Fund may be redeemed for cash at any time at the
net asset value per share next determined. If shares are held in a
shareholder's account at the Transfer Agent without a share certificate, a
written request for redemption must be sent to the Fund's Transfer Agent at
P.O. Box 983, Jersey City, NJ 07303. The share certificate, or an
accompanying stock power, and the request for redemption, must be signed by
the shareholder or shareholders exactly as the shares are registered. Each
request for redemption, whether or not accompanied by a share certificate,
must be sent to the Fund's Transfer Agent, which will redeem the shares at
their net asset value next determined as described under "Purchase of Fund
Shares--Determination of Net Asset Value" after it receives the request, and
certificate, if any, in good order. Any redemption request received after
such determination will be redeemed at the next determined net asset value.
The term "good order" means that the share certificate, if any, and request
for redemption are properly signed, accompanied by any documentation required
by the Transfer Agent, and bear signature guarantees when required by the
Fund or the Transfer Agent. If redemption is requested by a corporation,
partnership, trust or fiduciary, the Transfer Agent may require that written
evidence of authority acceptable to the Transfer Agent be submitted before
such request is accepted. With regard to shares of the Fund acquired pursuant
to the Exchange Privilege, any applicable contingent deferred sales charge
will be imposed upon the redemption of such shares (see "Purchase of Fund
Shares--Exchange Privilege").

Whether certificates are held by the shareholder or shares are held in a
shareholder's account, if the proceeds are to be paid to any person other
than the record owner, or if the proceeds are to be paid to a corporation
(other than DWR or any other Selected Broker-Dealer for the account of the
shareholder), partnership, trust or fiduciary, or sent to the shareholder at
an address other than the registered address, signature(s) must be guaranteed
by an eligible guarantor acceptable to the Transfer Agent (shareholders
should contact the Transfer Agent for a determination as to whether a
particular institution is such an eligible guarantor). A stock power may be
obtained from any dealer or commercial bank. The Fund may change the
signature guarantee requirements from time to time upon notice to
shareholders, which may be by means of a revised prospectus.

<PAGE>

REPURCHASES. DWR and other Selected Broker-Dealers are authorized to
repurchase shares represented by a share certificate which is delivered to
any of their offices. Shares held in a shareholder's account without a share
certificate may also be repurchased by DWR and other Selected Broker-Dealers
upon the telephonic request of the shareholder. The repurchase price is the
net asset value next determined (see "Purchase of Fund Shares--Determination
of Net Asset Value") after such repurchase order is received by DWR or the
other Selected Broker-Dealer. The offers by DWR and other Selected
Broker-Dealers to repurchase shares from shareholders may be suspended by
them at any time. In that event, shareholders may redeem their shares through
the Fund's Transfer Agent as set forth above under "Redemption."

PAYMENT FOR SHARES REDEEMED OR REPURCHASED. Payment for shares presented for
repurchase or redemption will be made by check within seven days after
receipt by the Transfer Agent of the certificate and/or written request in
good order. Such payment may be postponed or the right of redemption
suspended under unusual circumstances. If the shares to be redeemed have
recently been purchased by check, payment of the redemption proceeds may be
delayed for the minimum time needed to verify that the check used for
investment has been honored (not more than fifteen days from the time of
receipt of the check by the Transfer Agent). Shareholders maintaining margin
accounts with DWR or other Selected Broker-Dealers are referred to their
account executive regarding restrictions on redemption of shares of the Fund
pledged in the margin account.

REINSTATEMENT PRIVILEGE. A shareholder who has had his or her shares redeemed
or repurchased and has not previously exercised this reinstatement privilege
may, within 30 days after the date of the redemption or repurchase, reinstate
any portion or all of the proceeds of such redemption or repurchase in shares
of the Fund at net asset value next determined after a reinstatement request,
together with the proceeds, is received by the Transfer Agent.

INVOLUNTARY REDEMPTION. The Fund reserves the right to redeem, on 60 days'
notice and at net asset value, the shares of any shareholder whose shares
have a value of less than $100 as a result of redemptions or repurchases, or
such lesser amount as may be fixed by the Trustees. However, before the Fund
redeems such shares and sends the proceeds to the shareholder, it will notify
the shareholder that the value of the shares is less than $100 and allow him
or her 60 days to make an additional investment in an amount which will
increase the value of his or her account to $100 or more before the
redemption is processed.

DIVIDENDS, DISTRIBUTIONS AND TAXES
- -----------------------------------------------------------------------------

DIVIDENDS AND DISTRIBUTIONS. The Fund declares dividends from net investment
income on each day the New York Stock Exchange is open for business. Such
dividends are payable monthly. The Fund may distribute quarterly net realized
short-term capital gains, if any, in excess of any net realized long-term
capital losses. The Fund intends to distribute dividends from net long-term
capital gains, if any, at least once each year. The Fund may, however, elect
to retain all or a portion of any such net long-term capital gains in any
year.

All dividends and any capital gains distributions will be paid in
additional Fund shares and automatically credited to the shareholder's
account without issuance of a share certificate unless the shareholder
requests in writing that all dividends or all dividends and distributions be
paid in cash. (See "Shareholder Services--Automatic Investment of Dividends
and Distributions".)

TAXATION

FEDERAL TAXES. Because the Fund intends to distribute subtantially all of its
net investment income and net short-term capital gains to shareholders and
otherwise remain qualified as a regulated investment company under Subchapter
M of the Internal Revenue Code, it is not expected that the Fund will be
required to pay any federal income tax on such income and capital gains.
Shareholders will normally have to pay federal income taxes on the dividends
and capital gains distributions they receive from the Fund. Distributions of
net investment income and net short-term capital gains are taxable to the
shareholder as ordinary dividend income regardless of whether the shareholder
receives such distributions in additional shares or in cash. Any dividends
declared in the last quarter of any calendar year which are paid in the
following year prior to February 1 will be deemed received by the shareholder
in the prior year.

Long-term and short-term capital gains may be generated by the sale of
portfolio securities by the

<PAGE>

Fund. Distributions of long-term capital gains, if any, are taxable to
shareholders as long-term capital gains regardless of how long a shareholder
has held the Fund's shares and regardless of whether the distribution is
received in additional shares or in cash.

No portion of such distributions will be eligible for the dividends
received deduction for corporations. To avoid being subject to a 31% federal
backup withholding tax on taxable dividends, capital gains distributions and
the proceeds of redemptions and repurchases, shareholders' taxpayer
identification numbers must be furnished and certified as to accuracy.

Current federal law requires that a holder (such as the Fund) of a zero
coupon security accrue a portion of the discount at which the security was
purchased as income each year even though the Fund receives no interest
payments in cash on the security during the year. Accordingly, the Fund may
be required to pay out as an income distribution each year an amount which is
greater than the total amount of cash receipts of interest the Fund actually
received. Such distributions will be made from the available cash of the Fund
or by liquidation of portfolio securities, if necessary.

After the end of the year, shareholders will receive full information on
their dividends and capital gains distributions for tax purposes, including
information as to the Federal tax status of dividends and distributions paid
or retained by the Fund.

The foregoing discussion relates solely to the Federal income tax
consequences of an investment in the Fund and dividends (where applicable)
and distributions may also be subject to state and local taxes (see "State
and Local Taxes" below); therefore, each shareholder is advised to consult
his or her own tax adviser.

STATE AND LOCAL TAXES. The Fund intends to invest substantially all of its
assets in U.S. Treasury obligations that provide interest income exempt from
state and local taxes. Because all States presently allow the pass-through of
federal obligation interest derived from specific federal obligations, it is
anticipated that substantially all of the interest income generated by the
Fund and paid out to shareholders as net investment income will be exempt
from state and local taxation. Such investment income, however, will not be
exempt from federal tax. Furthermore, any capital gains realized by the Fund
will not be exempt from federal, and generally, state and local taxes. It
should be noted that although the Fund intends to invest only in securities
the pass-through income from which is believed exempt from state and local
income taxes, it is possible that a state or local taxing authority may seek
to tax an investor on a portion of the interest income of a particular
government obligation held by the Fund. Shareholders are urged to consult
their tax advisers regarding specific questions regarding federal, state and
local taxes.

PERFORMANCE INFORMATION
- -----------------------------------------------------------------------------

From time to time the Fund may quote its "yield" and/or its "total return"
in advertisements and sales literature. Both the yield and the total return
of the Fund are based on historical earnings and are not intended to indicate
future performance. The yield of the Fund is computed by dividing the net
investment income of the Fund over a 30-day period by an average value (using
the average number of shares entitled to receive dividends and the net asset
value per share at the end of the period), all in accordance with applicable
regulatory requirements. Such amount is compounded for six months and then
annualized for a twelve-month period to derive the yield of the Fund. The
Fund may also quote its tax-equivalent yield, which is calculated by
determining the pre-tax yield which after being taxed at a stated rate, would
be equivalent to the yield determined as described above.

The "average annual total return" of the Fund refers to a figure
reflecting the average annualized percentage increase (or decrease) in the
value of an initial investment in the Fund of $1,000 over one, five and ten
years, or the life of the Fund, if less than any of the foregoing. Average
annual total return reflects all income earned by the Fund, any appreciation
or depreciation of the assets of the Fund, and all expenses incurred by the
Fund, for the stated periods. It also assumes reinvestment of all dividends
and distributions paid by the Fund.

<PAGE>

The Fund from time to time may also advertise its performance relative to
certain performance rankings and indexes compiled by independent
organizations (such as Lipper Analytical Services Inc.).

ADDITIONAL INFORMATION
- -----------------------------------------------------------------------------

VOTING RIGHTS. All shares of beneficial interest of the Fund are of $0.01
par value and are equal as to earnings, assets and voting privileges. There
are no conversion, pre-emptive or other subscription rights. In the event of
liquidation, each share of beneficial interest of the Fund is entitled to its
portion of all of the Fund's assets after all debts and expenses have been
paid. The shares do not have cumulative voting rights.

The Fund is not required to hold Annual Meetings of Shareholders and in
ordinary circumstances the Fund does not intend to hold such meetings. The
Trustees may call Special Meetings of Shareholders for action by shareholder
vote as may be required by the Act or the Declaration of Trust. The Trustees
themselves have the power to alter the number and the terms of office of the
Trustees and they may at any time lengthen their own terms or make their
terms of unlimited duration and appoint their own successors, provided that
always at least a majority of the Trustees has been elected by the
shareholders of the Fund. Under certain circumstances the Trustees may be
removed by action of the Trustees. The shareholders also have the right under
certain circumstances to remove the Trustees.

Under Massachusetts law, shareholders of a business trust may, under
certain circumstances, be held personally liable as partners for the
obligations of the Fund. The Declaration of Trust contains an express
disclaimer of shareholder liability for acts or obligations of the Fund and
requires that notice of such disclaimer be given in each instrument entered
into or executed by the Fund. Under the Declaration of Trust, indemnification
shall be made out of the Fund's property for any shareholder held personally
liable for the obligations of the Fund. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Fund itself would be unable to meet its
obligations. Given the above limitations on shareholder personal liability
and the nature of the Fund's assets and operations, the possibility of the
Fund being unable to meet its obligations is remote and thus, in the opinion
of Massachusetts counsel to the Fund, the risk to Fund shareholders is
remote.

CODE OF ETHICS. Directors, officers and employees of InterCapital, Dean
Witter Services Company Inc. and the Distributor are subject to a strict Code
of Ethics adopted by those companies. The Code of Ethics is intended to
ensure that the interests of shareholders and other clients are placed ahead
of any personal interest, that no undue personal benefit is obtained from a
person's employment activities and that actual and potential conflicts of
interest are avoided. To achieve these goals and comply with regulatory
requirements, the Code of Ethics requires, among other things, that personal
securities transactions by employees of the companies be subject to an
advance clearance process to monitor that no Dean Witter Fund is engaged at
the same time in a purchase or sale of the same security. The Code of Ethics
bans the purchase of securities in an initial public offering, and also
prohibits engaging in futures and option transactions and profiting on
short-term trading (that is, a purchase within sixty days of a sale or a sale
within sixty days of a purchase) of a security. In addition, investment
personnel may not purchase or sell a security for their personal account
within thirty days before or after any transaction in any Dean Witter Fund
managed by them. Any violations of the Code of Ethics are subject to
sanctions, including reprimand, demotion or suspension or termination of
employment. The Code of Ethics comports with regulatory requirements and the
recommendations in the recent report by the Investment Company Institute
Advisory Group on Personal Investing.

SHAREHOLDER INQUIRIES. All inquiries regarding the Fund should be directed to
the Fund at the telephone numbers or address set forth on the front cover of
this Prospectus.

The Investment Manager provided the initial capital for the Fund by
purchasing 10,000 shares of the Fund for $100,000 on May 2, 1995. As of the
date of this Prospectus, the Investment Manager owned 100% of the outstanding
shares of the Fund. The Investment Manager may be deemed to control the Fund
until such time as it owns less than 25% of the outstanding shares of the
Fund.

<PAGE>

DEAN WITTER
INTERMEDIATE TERM U.S. TREASURY TRUST
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048

TRUSTEES
Jack F. Bennett
Michael Bozic
Charles A. Fiumefreddo
Edwin J. Garn
John R. Haire
Manuel H. Johnson
Paul Kolton
Michael E. Nugent
Philip J. Purcell
John L. Schroeder

OFFICERS
Charles A. Fiumefreddo
Chairman and Chief Executive Officer

Sheldon Curtis
Vice President, Secretary and
General Counsel

Rajesh K. Gupta
Vice President

Thomas F. Caloia
Treasurer

CUSTODIAN
The Bank of New York
90 Washington Street
New York, New York 10286

TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
Dean Witter Trust Company
Harborside Financial Center
Plaza Two
Jersey City, New Jersey 07311

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

INVESTMENT MANAGER
Dean Witter InterCapital Inc.

<PAGE>

DEAN WITTER
INTERMEDIATE
TERM
U.S. TREASURY
TRUST

STATEMENT OF ADDITIONAL INFORMATION
SEPTEMBER 18, 1995

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

Dean Witter Intermediate Term U.S. Treasury Trust (the "Fund") is an
open-end, diversified management investment company whose investment
objective is current income and preservation of principal. The Fund seeks to
achieve its investment objective by investing substantially all of its assets
in U.S. Treasury securities backed by the full faith and credit of the U.S.
Government.

A Prospectus for the Fund dated September 18, 1995, which provides the
basic information you should know before investing in the Fund, may be
obtained without charge from the Fund at the address or telephone number
listed below or from the Fund's Distributor, Dean Witter Distributors Inc.,
or from Dean Witter Reynolds Inc., at any of its branch offices. This
Statement of Additional Information is not a Prospectus. It contains
information in addition to and more detailed than that set forth in the
Prospectus. It is intended to provide additional information regarding the
activities and operations of the Fund, and should be read in conjunction with
the Prospectus.

Dean Witter
Intermediate Term U.S. Treasury Trust
Two World Trade Center
New York, New York 10048
(212) 392-2550

<PAGE>

TABLE OF CONTENTS
- -----------------------------------------------------------------------------

The Fund and its Management ............................ 3
Trustees and Officers ................................. 6
Investment Practices and Policies ..................... 12
Investment Restrictions ............................... 13
Portfolio Transactions and Brokerage .................. 14
The Distributor ....................................... 15
Shareholder Services .................................. 17
Redemptions and Repurchases ........................... 22
Dividends, Distributions and Taxes .................... 22
Performance Information ............................... 23
Description of Shares of the Fund ..................... 24
Custodian and Transfer Agent .......................... 25
Independent Accountants ............................... 25
Reports to Shareholders ............................... 25
Legal Counsel ......................................... 25
Experts ............................................... 25
Registration Statement ................................ 25
Report of Independent Accountants ..................... 26
Statement of Assets and Liabilities at August 31, 1995 27

</TABLE>

<PAGE>

THE FUND AND ITS MANAGEMENT
- -----------------------------------------------------------------------------

THE FUND

The Fund is a trust of the type commonly known as a "Massachusetts
business trust" and was organized under the laws of the Commonwealth of
Massachusetts on February 9, 1995.

THE INVESTMENT MANAGER

Dean Witter InterCapital Inc. (the "Investment Manager" or
"InterCapital"), a Delaware corporation, whose address is Two World Trade
Center, New York, New York 10048, is the Fund's Investment Manager.
InterCapital is a wholly-owned subsidiary of Dean Witter, Discover & Co.
("DWDC"), a Delaware corporation. The daily management of the Fund and
research relating to the Fund's portfolio is conducted by or under the
direction of officers of the Fund and of the Investment Manager, subject to
review of investments by the Fund's Board of Trustees. In addition, Trustees
of the Fund provide guidance on economic factors and interest rate trends.
Information as to these Trustees and Officers is contained under the caption
"Trustees and Officers".

InterCapital is also the investment manager (or investment adviser and
administrator) of the following investment companies: Dean Witter Liquid
Asset Fund Inc., InterCapital Income Securities Inc., InterCapital Insured
Municipal Bond Trust, InterCapital Insured Municipal Trust, Dean Witter High
Yield Securities Inc., Dean Witter Tax-Free Daily Income Trust, Dean Witter
Developing Growth Securities Trust, Dean Witter Tax-Exempt Securities Trust,
Dean Witter Natural Resource Development Securities Inc., Dean Witter
Dividend Growth Securities Inc., Dean Witter American Value Fund, Dean Witter
U.S. Government Money Market Trust, Dean Witter Variable Investment Series,
Dean Witter World Wide Investment Trust, Dean Witter Select Municipal
Reinvestment Fund, Dean Witter U.S. Government Securities Trust, Dean Witter
California Tax-Free Income Fund, Dean Witter New York Tax-Free Income Fund,
Dean Witter Convertible Securities Trust, Dean Witter Federal Securities
Trust, Dean Witter Value-Added Market Series, High Income Advantage Trust,
High Income Advantage Trust II, High Income Advantage Trust III, Dean Witter
Government Income Trust, Dean Witter Utilities Fund, Dean Witter Managed
Assets Trust, Dean Witter California Tax-Free Daily Income Trust, Dean Witter
Strategist Fund, Dean Witter World Wide Income Trust, Dean Witter
Intermediate Income Securities, Dean Witter New York Municipal Money Market
Trust, Dean Witter Capital Growth Securities, Dean Witter European Growth
Fund Inc., Dean Witter Precious Metals and Minerals Trust, Dean Witter Global
Short-Term Income Fund Inc., Dean Witter Pacific Growth Fund Inc., Dean
Witter Multi-State Municipal Series Trust, Dean Witter Diversified Income
Trust, Dean Witter Premier Income Trust, InterCapital Quality Municipal
Investment Trust, InterCapital Quality Municipal Income Trust, InterCapital
Quality Municipal Securities, InterCapital California Quality Municipal
Securities, InterCapital New York Quality Municipal Securities, Dean Witter
Retirement Series, Dean Witter Health Sciences Trust, InterCapital Insured
Municipal Income Trust, InterCapital California Insured Municipal Income
Trust, InterCapital Insured Municipal Securities, InterCapital Insured
California Municipal Securities, Dean Witter Global Dividend Growth
Securities, Dean Witter Limited Term Municipal Trust, Dean Witter Short-Term
Bond Fund, Dean Witter Global Utilities Fund, Dean Witter National Municipal
Trust, Dean Witter High Income Securities, Dean Witter International Small
Cap Fund, Dean Witter Mid-Cap Growth Fund, Dean Witter Select Dimensions
Series, Dean Witter Global Asset Allocation Fund, Active Assets Money Trust,
Active Assets Tax-Free Trust, Dean Witter Balanced Growth Fund, Dean Witter
Balanced Income Fund, Dean Witter Hawaii Municipal Trust, Dean Witter Capital
Appreciation Fund, Active Assets California Tax-Free Trust and Active Assets
Government Securities Trust. Also, the Investment Manager serves as
investment adviser and administrator to Municipal Income Trust, Municipal
Income Trust II, Municipal Income Trust III, Municipal Income Opportunities
Trust, Municipal Income Opportunities Trust II, Municipal Income
Opportunities Trust III, Prime Income Trust and Municipal Premium Income
Trust. The foregoing investment companies, together with the Fund, are
collectively referred to as the Dean Witter Funds. In addition, Dean Witter
Services Company Inc., ("DWSC"), a wholly-owned subsidiary of InterCapital,
serves as manager for the following investment companies, for which TCW Funds
Management, Inc. is the investment adviser: TCW/DW Core Equity Trust, TCW/DW
North American Government Income Trust, TCW/DW Latin American Growth Fund,
TCW/DW Income and Growth Fund, TCW/DW Small Cap

<PAGE>

Growth Fund, TCW/DW Balanced Fund, TCW/DW North American Intermediate Income
Trust, TCW/DW Global Convertible Trust, TCW/DW Total Return Trust, TCW/DW
Term Trust 2000, TCW/DW Term Trust 2002, TCW/DW Term Trust 2003 and TCW/DW
Emerging Markets Opportunities Trust (the "TCW/DW Funds"). InterCapital also
serves as: (i) sub-adviser to Templeton Global Opportunities Trust, an
open-end investment company; (ii) administrator of The BlackRock Strategic
Term Trust Inc., a closed-end investment company; and (iii) sub-administrator
of MassMutual Participation Investors and Templeton Global Governments Income
Trust, closed-end investment companies.

InterCapital also serves as an investment adviser for Dean Witter World
Wide Investment Fund, an investment company organized under the laws of
Luxembourg, shares of which are not available for purchase in the United
States or by American citizens outside the United States.

Pursuant to an Investment Management Agreement (the "Agreement") with the
Investment Manager, the Fund has retained the Investment Manager to manage
the investment of the Fund's assets, including the placing of orders for the
purchase and sale of portfolio securities. The Investment Manager obtains and
evaluates such information and advice relating to the economy, securities
markets and specific securities as it considers necessary or useful to
continuously manage the assets of the Fund in a manner consistent with its
investment objective.

Under the terms of the Agreement, in addition to managing the Fund's
investments, the Investment Manager maintains certain of the Fund's books and
records and furnishes, at its own expense, such office space, facilities,
equipment, clerical help, bookkeeping and certain legal services as the Fund
may reasonably require in the conduct of its business, including the
preparation of prospectuses, proxy statements and reports required to be
filed with Federal and state securities commissions (except insofar as the
participation or assistance of independent accountants and attorneys is, in
the opinion of the Investment Manager, necessary or desirable). In addition,
the Investment Manager pays the salaries of all personnel, including officers
of the Fund, who are employees of the Investment Manager. The Investment
Manager also bears the cost of telephone service, heat, light, power and
other utilities provided to the Fund.

Pursuant to a Services Agreement between InterCapital and DWSC,
InterCapital has retained DWSC to provide administrative services to the
Fund.

Expenses not expressly assumed by the Investment Manager under the
Agreement or by Dean Witter Distributors Inc. ("Distributors" or the
"Distributor"), the Distributor of the Fund's shares (see "The Distributor"),
will be paid by the Fund. The expenses borne by the Fund include, but are not
limited to: fees pursuant to the Fund's Plan of Distribution; charges and
expenses of any registrar, custodian, stock transfer and dividend disbursing
agent; brokerage commissions; taxes; engraving and printing share
certificates; registration costs of the Fund and its shares under federal and
state securities laws; the cost and expense of printing, including
typesetting, and distributing Prospectuses and Statements of Additional
Information of the Fund and supplements thereto to the Fund's shareholders;
all expenses of shareholders' and Trustees' meetings and of preparing,
printing and mailing of proxy statements and reports to shareholders; fees
and travel expenses of Trustees or members of any advisory board or committee
who are not employees of the Investment Manager or any corporate affiliate of
the Investment Manager; all expenses incident to any dividend, withdrawal or
redemption options; charges and expenses of any outside service used for
pricing of the Fund's shares; fees and expenses of legal counsel, including
counsel to the Trustees who are not interested persons of the Fund or of the
Investment Manager (not including compensation or expenses of attorneys who
are employees of the Investment Manager) and independent accountants;
membership dues of industry associations; interest on Fund borrowings;
postage; insurance premiums on property or personnel (including officers and
Trustees) of the Fund which inure to its benefit; extraordinary expenses
(including, but not limited to, legal claims and liabilities and litigation
costs and any indemnification relating thereto); and all other costs of the
Fund's operation.

As full compensation for the services and facilities furnished to the Fund
and expenses of the Fund assumed by the Investment Manager, the Fund pays the
Investment Manager monthly compensation calculated daily by applying the
annual rate of 0.35% to the net assets of the Fund, determined as of the

<PAGE>

close of each business day. The Investment Manager has undertaken to assume
all expenses except for the Plan of Distribution fee and brokerage fees and
to waive the compensation provided for in the Management Agreement until such
time as the Fund had $50 million of net assets or until six months from the
commencement of operations, whichever occurs first.

Total operating expenses of the Fund are subject to applicable limitations
under rules and regulations of states where the Fund is authorized to sell
its shares. Therefore, operating expenses are effectively subject to the most
restrictive applicable limitations as the same may be amended from time to
time. Presently, the most restrictive limitation to which the Fund is subject
is as follows: if, in any fiscal year, the Fund's total operating expenses,
exclusive of taxes, interest, brokerage fees, distribution fees and
extraordinary expenses (to the extent permitted by applicable state
securities laws and regulations), exceed 2 1/2 % of the first $30,000,000 of
average daily net assets, 2% of the next $70,000,000 and 1 1/2 % of any
excess over $100,000,000, the Investment Manager will reimburse the Fund for
the amount of such excess. Such amount, if any, will be calculated daily and
credited on a monthly basis.

The Agreement provides that in the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of its obligations thereunder,
the Investment Manager is not liable to the Fund or any of its investors for
any act or omission by the Investment Manager or for any losses sustained by
the Fund or its investors. The Agreement in no way restricts the Investment
Manager from acting as investment manager or adviser to others.

The Investment Manager will pay the organizational expenses of the Fund
incurred prior to the offering of the Fund's shares. The Fund has agreed to
reimburse the Investment Manager for such expenses, up to a maximum of
$250,000. The Fund will defer and amortize the reimbursed expenses on the
straight line method over a period not to exceed five years from the date of
commencement of the Fund's operations.

The Agreement was initially approved by the Board of Trustees on April 20,
1995. The Agreement may be terminated at any time, without penalty, on thirty
days' notice by the Board of Trustees of the Fund or by the Investment
Manager. The Agreement will automatically terminate in the event of its
assignment (as defined in the Act). Under its terms, the Agreement will
continue in effect until April 30, 1996 and will continue from year to year
thereafter, provided such continuance of the Agreement is approved at least
annually by the vote of the holders of a majority, as defined in the Act, of
the outstanding shares of the Fund, or by the Board of Trustees of the Fund;
provided that in either event such continuance is approved annually by the
vote of a majority of the Trustees of the Fund who are not parties to the
Agreement or "interested persons" (as defined in the Act) of any such party,
which vote must be cast in person at a meeting called for the purpose of
voting on such approval.

The Fund has acknowledged that the name "Dean Witter" is a property right
of DWR. The Fund has agreed that DWR or its parent company may use or, at any
time, permit others to use, the name "Dean Witter". The Fund has also agreed
that in the event the investment management contract between InterCapital and
the Fund is terminated, or if the affiliation between InterCapital and its
parent is terminated, the Fund will eliminate the name "Dean Witter" from its
name if DWR or its parent company shall so request.

<PAGE>

TRUSTEES AND OFFICERS
- -----------------------------------------------------------------------------

The Trustees and Executive Officers of the Fund, their principal business
occupations during the last five years and their affiliations, if any, with
InterCapital and with the 78 Dean Witter Funds and the 13 TCW/DW Funds are
shown below:

<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- -------------------------------------------- ------------------------------------------------------------
<S> <C>
Jack F. Bennett (71) Retired; Director or Trustee of the Dean Witter Funds;
Trustee formerly Senior Vice President and Director of Exxon
c/o Gordon Altman Butowsky Corporation (1975-January 31, 1989) and Under Secretary of
Weitzen Shalov & Wein the U.S. Treasury for Monetary Affairs (1974-1975); Director
Counsel to the Independent Trustees of Philips Electronics N.V., Tandem Computers Inc. and
114 West 47th Street Massachusetts Mutual Insurance Co.; Director or Trustee of
New York, New York various not-for-profit and business organizations.

Michael Bozic (54) Private Investor; Director or Trustee of the Dean Witter
Trustee Funds; formerly President and Chief Executive Officer of
c/o Gordon Altman Butowsky Hills Department Stores (May, 1991-June, 1995); formerly
Weitzen Shalov & Wein Chairman and Chief Executive Officer (January, 1987-August,
Counsel to the Independent Trustees 1990) and President and Chief Operating Officer (August,
114 West 47th Street 1990-February, 1991) of the Sears Merchandise Group of
New York, New York Sears, Roebuck and Co.; Director of Eaglemark Financial
Services, Inc., the United Negro College Fund, Weirton Steel
Corporation and Domain Inc. (home decor retailer).

Charles A. Fiumefreddo* (62) Chairman, Chief Executive Officer and Director of
Chairman of the Board, President and InterCapital, Distributors and DWSC; Executive Vice
Chief Executive Officer and Trustee, President and Director of DWR; Chairman, Trustee or
Two World Trade Center Director, President and Chief Executive Officer of the Dean
New York, New York Witter Funds; Chairman, Chief Executive Officer and Trustee
of the TCW/DW Funds; formerly Executive Vice President and
Director of DWDC; Chairman and Director of Dean Witter Trust
Company ("DWTC") (since October, 1989); Director of various
DWDC subsidiaries and affiliates; formerly Executive Vice
President and Director of DWDC (until February 1993).

Edwin J. Garn (62) Director or Trustee of the Dean Witter Funds; formerly United
Trustee States Senator (R-Utah) (1974-1992) and Chairman, Senate Banking
c/o Huntsman Chemical Corporation Committee (1980-1986); formerly Mayor of Salt Lake City, Utah
2000 Eagle Gate Tower (1971-1974); formerly Astronaut, Space Shuttle Discovery (April
Salt Lake City, Utah 12-19, 1985); Vice Chairman, Huntsman Chemical Corporation (since
January, 1993); Member of the board of various civic and charitable
organizations.
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- -------------------------------------------- ------------------------------------------------------------
<S> <C>
John R. Haire (70) Chairman of the Audit Committee and Chairman of the Committee
Trustee of the Independent Directors or Trustees and Director or Trustee
Two World Trade Center of the Dean Witter Funds; Trustee of the TCW/DW Funds; formerly
New York, New York President, Council for Aid to Education (1978-October, 1989),
and Chairman and Chief Executive Officer of Anchor Corporation,
an Investment Adviser (1964-1978); Director of Washington National
Corporation (insurance).

Dr. Manuel H. Johnson (46) Senior Partner, Johnson Smick International, Inc., a consulting
Trustee firm; Koch Professor of International Economics and Director of
c/o Johnson Smick International, Inc. the Center for Global Market Studies at George Mason University
1133 Connecticut Avenue, N.W. (since September, 1990); Co-Chairman and a founder of the Group
Washington, D.C. of Seven Council (G7C), an international economic commission (since
September, 1990); Director or Trustee of the Dean Witter Funds;
Trustee of the TCW/DW Funds; Director of NASDAQ (since June, 1995);
Director of Greenwich Capital Markets Inc. (broker-dealer);
formerly Vice Chairman of the Board of Governors at the Federal
Reserve System (February, 1986-August, 1990) and Assistant
Secretary of the U.S. Treasury (1982-1986).

Paul Kolton (72) Director or Trustee of the Dean Witter Funds; Chairman of the
Trustee Audit Committee and Committee of Independent Trustees and Trustee
c/o Gordon Altman Butowsky of the TCW/DW Funds; formerly Chairman of the Financial Accounting
Weitzen Shalov & Wein Standards Advisory Council and Chairman and Chief Executive Officer
Counsel to the Independent Trustees of the American Stock Exchange; Director of UCC Investors Holding
114 West 47th Street Inc. (Uniroyal Chemical Company Inc.); director and/or trustee
New York, New York of various not-for-profit organizations.

Michael E. Nugent (59) General Partner, Triumph Capital, L.P., a private investment
Trustee partnership (since April, 1988); Director or Trustee of the Dean
c/o Triumph Capital, L.P. Witter Funds; Trustee of the TCW/DW Funds; formerly Vice President,
237 Park Avenue Bankers Trust Company and BT Capital Corporation (September,
New York, New York 1984-March, 1988); Director of various business organizations.

Philip J. Purcell* (51) Chairman of the Board of Directors and Chief Executive Officer
Trustee of DWDC, Dean Witter and Novus Credit Services Inc.; Director
Two World Trade Center of InterCapital, DWSC and Distributors; Director or Trustee of
New York, New York the Dean Witter Funds; Director and/or officer of various DWDC
subsidiaries.

</TABLE>
7

<PAGE>
<TABLE>
<CAPTION>
NAME, AGE, POSITION WITH FUND AND ADDRESS PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- -------------------------------------------- ------------------------------------------------------------
<S> <C>
John L. Schroeder (65) Executive Vice President and Chief Investment Officer of the Home
Trustee Insurance Company (since August, 1991); Director or Trustee of
c/o The Home Insurance Company the Dean Witter Funds; Trustee of the TCW/DW Funds; Director of
59 Maiden Lane Citizens Utilities Company; formerly Chairman and Chief Investment
New York, New York Officer of Axe-Houghton Management and the Axe-Houghton Funds
(April, 1983-June, 1991) and President of USF&G Financial Services,
Inc. (June 1990-June, 1991).

Sheldon Curtis (63) Senior Vice President, Secretary and General Counsel of InterCapital
Vice President, Secretary and DWSC; Senior Vice President and Secretary of DWTC; Senior
and General Counsel Vice President, Assistant Secretary and Assistant General Counsel
Two World Trade Center of Dean Witter Distributors Inc.; Assistant Secretary of DWDC
New York, New York and DWR; Vice President, Secretary and General Counsel of the
Dean Witter Funds and the TCW/DW Funds.

Rajesh K. Gupta (35) Senior Vice President of InterCapital (since April, 1991);
Vice President previously Vice President of InterCapital; Vice President of various
Two World Trade Center Dean Witter Funds.
New York, New York

Thomas F. Caloia (48) First Vice President (since May, 1991) and Assistant Treasurer
Treasurer (since January, 1993) of InterCapital; First Vice President and
Two World Trade Center Assistant Treasurer of DWSC; Treasurer of the Dean Witter Funds
New York, New York and the TCW/DW Funds; previously Vice President of InterCapital.
</TABLE>
[FN]
- ---------------
* Denotes Trustees who are "interested persons" of the Fund, as defined in the
Act.

In addition, Robert M. Scanlan, President and Chief Operating Officer of
InterCapital and DWSC, Executive Vice President of Distributors and DWTC and
Director of DWTC, David A. Hughey, Executive Vice President and Chief
Administrative Officer of InterCapital, DWSC and Distributors and President
and Director of DWTC, and Edmund C. Puckhaber, Executive Vice President of
InterCapital, and Robert S. Giambrone, Senior Vice President of InterCapital,
DWSC, Distributors and DWTC and Joseph J. McAlinden, Peter Avelar, Jonathan
R. Page, and James F. Willison Senior Vice Presidents of InterCapital, are
Vice Presidents of the Fund and Marilyn K. Cranney and Barry Fink, First Vice
Presidents and Assistant General Counsels of InterCapital, and Lou Anne D.
McInnis and Ruth Rossi, Vice Presidents and Assistant General Counsels of
InterCapital, are Assistant Secretaries of the Fund.

BOARD OF TRUSTEES; RESPONSIBILITIES AND COMPENSATION OF INDEPENDENT TRUSTEES

As mentioned above under the caption "The Fund and its Management," the
Fund is one of the Dean Witter Funds, a group of investment companies managed
by InterCapital. As of the date of this Statement of Additional Information,
there are a total of 78 Dean Witter Funds, comprised of 118 portfolios. As of
July 31, 1995, the Dean Witter Funds had total net assets of approximately
$67.2 billion and more than five million shareholders.

The Board of Directors or Trustees, consisting of ten (10) directors or
trustees, is the same for each of the Dean Witter Funds. Some of the Funds
are organized as business trusts, others as corporations, but the functions
and duties of directors and trustees are the same. Accordingly, directors and
trustees of the Dean Witter Funds are referred to in this section as
Trustees.

<PAGE>

Eight Trustees, that is, 80% of the total number, have no affiliation or
business connection with InterCapital or any of its affiliated persons and do
not own any stock or other securities issued by InterCapital's parent
company, DWDC. These are the "disinterested" or "independent" Trustees. Five
of the eight Independent Trustees are also Independent Trustees of the TCW/DW
Funds. As of the date of this Statement of Additional Information, there are
a total of 13 TCW/DW Funds. Two of the Funds' Trustees, that is, the
management Trustees, are affiliated with InterCapital.

As noted in a federal court ruling, "[T]he independent directors . . . are
expected to look after the interests of shareholders by 'furnishing an
independent check upon management,' especially with respect to fees paid to
the investment company's sponsor." In addition to their general "watchdog"
duties, the Independent Trustees are charged with a wide variety of
responsibilities under the Act. In order to perform their duties effectively,
the Independent Trustees are required to review and understand large amounts
of material, often of a highly technical and legal nature.

The Dean Witter Funds seek as Independent Trustees individuals of
distinction and experience in business and finance, government service or
academia; that is, people whose advice and counsel are valuable and in demand
by others and for whom there is often competition. To accept a position on
the Funds' Boards, such individuals may reject other attractive assignments
because of the demands made on their time by the Funds. Indeed, to serve on
the Funds' Boards, certain Trustees who would be qualified and in demand to
serve on bank boards would be prohibited by law from serving at the same time
as a director of a national bank and as a Trustee of a Fund.

The Independent Trustees are required to select and nominate individuals
to fill any Independent Trustee vacancy on the Board of any Fund that has a
Rule 12b-1 plan of distribution. Since most of the Dean Witter Funds have
such a plan, and since all of the Funds' Boards have the same members, the
Independent Trustees effectively control the selection of other Independent
Trustees of all the Dean Witter Funds.

GOVERNANCE STRUCTURE OF THE DEAN WITTER FUNDS

While the regulatory system establishes both general guidelines and
specific duties for the Independent Trustees, the governance arrangements
from one investment company group to another vary significantly. In some
groups the Independent Trustees perform their role by attendance at periodic
meetings of the board of directors with study of materials furnished to them
between meetings. At the other extreme, an investment company complex may
employ a full-time staff to assist the Independent Trustees in the
performance of their duties.

The governance structure of the Dean Witter Funds lies between these two
extremes. The Independent Trustees and the Funds' Investment Manager alike
believe that these arrangements are effective and serve the interests of the
Funds' shareholders. All of the Independent Trustees serve as members of the
Audit Committee and the Committee of the Independent Trustees. Three of them
also serve as members of the Derivatives Committee.

The Committee of the Independent Trustees is charged with recommending to
the full Board approval of management, advisory and administration contracts,
Rule 12b-1 plans and distribution and underwriting agreements, continually
reviewing Fund performance, checking on the pricing of portfolio securities,
brokerage commissions, transfer agent costs and performance, and trading
among Funds in the same complex, and approving fidelity bond and related
insurance coverage and allocations, as well as other matters that arise from
time to time.

The Audit Committee is charged with recommending to the full Board the
engagement or discharge of the Fund's independent accountants; directing
investigations into matters within the scope of the independent accountants'
duties, including the power to retain outside specialists; reviewing with the
independent accountants the audit plan and results of the auditing
engagement; approving professional services provided by the independent
accountants and other accounting firms prior to the performance of such
services; reviewing the independence of the independent accountants;
considering the range of

<PAGE>

audit and non-audit fees; reviewing the adequacy of the Fund's system of
internal controls; advising the independent accountants and management
personnel that they have direct access to the Committee at all times; and
preparing and submitting Committee meeting minutes to the full Board.

Finally, the Board of each Fund has established a Derivatives Committee to
establish parameters for and oversee the activities of the Fund with respect
to derivative investments, if any, made by the Fund.

During the calendar year ended December 31, 1994, the three Committees
held a combined total of eleven meetings. The Committee meetings are
sometimes held away from the offices of InterCapital and sometimes in the
Board room of InterCapital. These meetings are held without management
directors or officers being present, unless and until they may be invited to
the meeting for purposes of furnishing information or making a report. These
separate meetings provide the Independent Trustees an opportunity to explore
in depth with their own independent legal counsel, independent auditors and
other independent consultants, as needed, the issues they believe should be
addressed and resolved in the interests of the Funds' shareholders.

DUTIES OF CHAIRMAN OF COMMITTEES

The Chairman of the Committees maintains an office at the Funds'
headquarters in New York. He is responsible for keeping abreast of regulatory
and industry developments and the Funds' operations and management. He
screens and/or prepares written materials and identifies critical issues for
the Independent Trustees to consider, develops agendas for Committee
meetings, determines the type and amount of information that the Committees
will need to form a judgment on the issues, and arranges to have the
information furnished. He also arranges for the services of independent
experts to be provided to the Committees and consults with them in advance of
meetings to help refine reports and to focus on critical issues. Members of
the Committees believe that the person who serves as Chairman of all three
Committees and guides their efforts is pivotal to the effective functioning
of the Committees.

The Chairman of the Committees also maintains continuous contact with the
Funds' management, with independent counsel to the Independent Trustees and
with the Funds' independent auditors. He arranges for a series of special
meetings involving the annual review of investment management and other
operating contracts of the Funds and, on behalf of the Committees, conducts
negotiations with the Investment Manager and other service providers. In
effect, the Chairman of the Committees serves as a combination of chief
executive and support staff of the Independent Trustees.

The Chairman of the Committees is not employed by any other organization
and devotes his time primarily to the services he performs as Committee
Chairman and Independent Trustee of the Dean Witter Funds and as an
Independent Trustee of the TCW/DW Funds. The current Committee Chairman has
had more than 35 years experience as a senior executive in the investment
company industry.

VALUE OF HAVING SAME INDIVIDUALS AS INDEPENDENT TRUSTEES FOR ALL DEAN WITTER
FUNDS

The Independent Trustees and the Funds' management believe that having the
same Independent Trustees for each of the Dean Witter Funds is in the best
interests of all the Funds' shareholders. This arrangement avoids the
duplication of effort that would arise from having different groups of
individuals serving as Independent Trustees for each of the Funds or even of
sub-groups of Funds. It is believed that having the same individuals serve as
Independent Trustees of all the Funds tends to increase their knowledge and
expertise regarding matters which affect the Fund complex generally and
enhances their ability to negotiate on behalf of each Fund with the Fund's
service providers. This arrangement also precludes the likelihood of separate
groups of Independent Trustees arriving at conflicting decisions regarding
operations and management of the Funds and avoids the cost and confusion that
would likely ensue. Finally, it is believed that having the same Independent
Trustees serve on all Fund Boards enhances the ability of each Fund to
obtain, at modest cost to each separate Fund, the services of Independent
Trustees, and a Chairman of their Committees, of the caliber, experience and
business acumen of the individuals who serve as Independent Trustees of the
Dean Witter Funds.

<PAGE>

COMPENSATION OF INDEPENDENT TRUSTEES

The Fund will pay each Independent Trustee an annual fee of $1,000 plus a
per meeting fee of $50 for meetings of the Board of Trustees or committees of
the Board of Trustees attended by the Trustee (the Fund will pay the Chairman
of the Audit Committee an annual fee of $750 and will pay the Chairman of the
Committee of the Independent Trustees an additional annual fee of $2,400, in
each case inclusive of the Committee meeting fees). The Fund will also
reimburse such Trustees for travel and other out-of-pocket expenses incurred
by them in connection with attending such meetings. Trustees and officers of
the Fund who are or have been employed by the Investment Manager or an
affiliated company will not receive any compensation or expense reimbursement
from the Fund. Payments will commence as of the time the Fund begins paying
management fees, which, pursuant to an undertaking by the Investment Manager,
will be at such time as the Fund has $50 million of net assets or six months
from the date of commencement of the Fund's operations, whichever occurs
first.

At such time as the Fund has been in operation, and has paid fees to the
Independent Trustees, for a full fiscal year, and assuming that during such
fiscal year the Fund holds the same number of Board and committee meetings as
were held by the other Dean Witter Funds during the calendar year ended
December 31, 1994, it is estimated that compensation paid to each Independent
Trustee during such fiscal year will be the amount shown in the following
table.

FUND COMPENSATION (ESTIMATED)

<TABLE>
<CAPTION>
AGGREGATE
COMPENSATION
NAME OF INDEPENDENT TRUSTEE FROM THE FUND
- --------------------------- ---------------
<S> <C>
Jack F. Bennett ............ $ 1,750
Michael Bozic .............. 1,750
Edwin J. Garn .............. 1,750
John R. Haire .............. 4,450*
Dr. Manuel H. Johnson ..... 1,750
Paul Kolton ................ 1,750
Michael E. Nugent .......... 1,750
John L. Schroeder .......... 1,750
<FN>
* Of Mr. Haire's compensation from the Fund, $3,150 is paid to him as
Chairman of the Committee of the Independent Trustees ($2,400) and as
Chairman of the Audit Committee ($750).
</TABLE>

The following table illustrates the compensation paid to the Fund's
Independent Trustees for the calendar year ended December 31, 1994 for
services to the 73 Dean Witter Funds and, in the case of Messrs. Haire,
Johnson, Kolton and Nugent, the 13 TCW/DW Funds that were in operation at
December 31, 1994. With respect to Messrs. Haire, Johnson, Kolton and Nugent,
the TCW/DW Funds are included solely because of a limited exchange privilege
between those Funds and five Dean Witter Money Market Funds. Mr. Schroeder
was elected as a Trustee of the TCW/DW Funds on April 20, 1995.

CASH COMPENSATION FROM DEAN WITTER FUNDS AND TCW/DW FUNDS

<TABLE>
<CAPTION>
FOR SERVICE AS
FOR SERVICE AS CHAIRMAN OF TOTAL CASH
DIRECTOR OR FOR SERVICE AS COMMITTEES OF COMPENSATION
TRUSTEE AND TRUSTEE AND INDEPENDENT FOR SERVICES TO
COMMITTEE MEMBER COMMITTEE MEMBER DIRECTORS/ 73 DEAN WITTER
NAME OF INDEPENDENT OF 73 DEAN WITTER OF 13 TCW/DW TRUSTEES AND FUNDS AND 13
TRUSTEE FUNDS FUNDS AUDIT COMMITTEES TCW/DW FUNDS
- -------------------------- ----------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Jack F. Bennett ........... $125,761 -- -- $125,761
Michael Bozic ............. 82,637 -- -- 82,637
Edwin J. Garn ............. 125,711 -- -- 125,711
John R. Haire ............. 101,061 $66,950 $225,563** 393,574
Dr. Manuel H. Johnson .... 122,461 60,750 -- 183,211
Paul Kolton ............... 128,961 51,850 34,200*** 215,011
Michael E. Nugent ......... 115,761 52,650 -- 168,411
John L. Schroeder ......... 85,938 -- -- 85,938
<FN>
** For the 73 Dean Witter Funds.

*** For the 13 TCW/DW Funds.
</TABLE>

<PAGE>

As of the date of this Statement of Additional Information, the aggregate
number of shares of beneficial interest of the Fund owned by the Fund's
officers and Trustees as a group was less than 1 percent of the Fund's shares
of beneficial interest outstanding.

INVESTMENT PRACTICES AND POLICIES
- -----------------------------------------------------------------------------

As stated in the Prospectus, the Fund will invest substantially all of its
assets in U.S. Treasury securities backed by the full faith and credit of the
U.S. Government.

U.S. Treasury securities presently consist of U.S. Treasury bills
(maturities of one year or less), U.S. Treasury notes (maturities of one to
ten years) and U.S. Treasury bonds (generally maturities of greater than ten
years), all of which are direct obligations of the U.S. Government and, as
such, are backed by the "full faith and credit" of the United States.

Zero Coupon Treasury Securities. A portion of the U.S. Treasury securities
purchased by the Fund may be "zero coupon" Treasury securities. These are
U.S. Treasury notes and bonds which have been stripped of their unmatured
interest coupons and receipts or which are certificates representing
interests in such stripped debt obligations and coupons. Such securities are
purchased at a discount from their face amount, giving the purchaser the
right to receive their full value at maturity. A zero coupon security pays no
interest to its holder during its life. Its value to an investor consists of
the difference between its face value at the time of maturity and the price
for which it was acquired, which is generally an amount significantly less
than its face value (sometimes referred to as a "deep discount" price).

In the last few years a number of banks and brokerage firms have separated
("stripped") the principal portions ("corpus") from the coupon portions of
the U.S. Treasury bonds and notes and sold them separately in the form of
receipts or certificates representing undivided interests in these
instruments (which instruments are generally held by a bank in a custodial or
trust account). The Fund will not purchase any such receipts or certificates
representing stripped corpus interests in U.S. Treasury securities sold by
banks and brokerage firms. The Fund will only purchase zero coupon Treasury
Securities which have been stripped by the Federal Reserve Bank.

When-Issued and Delayed Delivery Securities and Firm Commitments. From
time to time, in the ordinary course of business, the Fund may purchase U.S.
Treasury securities on a when-issued or delayed delivery basis or may
purchase or sell U.S. Treasury securities on a firm commitment basis. For
example, the Fund may wish to purchase U.S. Treasury notes and bonds sold at
periodic U.S. Treasury auctions prior to their issuance ("when-issued"). When
such transactions are negotiated, the price is fixed at the time of the
commitment, but delivery and payment can take place a month or more after the
date of the commitment. While the Fund will only purchase securities on a
when-issued, delayed delivery or firm commitment basis with the intention of
acquiring the securities, the Fund may sell the securities before the
settlement date, if it is deemed advisable. The securities so purchased or
sold are subject to market fluctuation and no interest accrues to the
purchaser during this period. At the time the Fund makes the commitment to
purchase or sell securities on a when-issued, delayed delivery or firm
commitment basis, it will record the transaction and thereafter reflect the
value, each day, of such security purchased or, if a sale, the proceeds to be
received, in determining its net asset value. At the time of delivery of the
securities, their value may be more or less than the purchase or sale price.
The

<PAGE>

Fund will also establish a segregated account with its custodian bank in
which it will continually maintain cash or cash equivalents or other
portfolio (U.S. Treasury) securities equal in value to commitments to
purchase securities on a when-issued, delayed delivery or firm commitment
basis.

Repurchase Agreements. As stated in the Prospectus, the Fund may enter
into repurchase agreements in an amount up to 5% of its net assets.
Repurchase agreements may be viewed as a type of secured lending by the Fund,
and which typically involve the acquisition by the Fund of debt securities,
from a selling financial institution such as a bank, savings and loan
association or broker-dealer. The agreement provides that the Fund will sell
back to the institution, and that the institution will repurchase, the
underlying security ("collateral") at a specified price and at a fixed time
in the future, usually not more than seven days from the date of purchase.
The collateral will be maintained in a segregated account and will be marked
to market daily to determine that the value of the collateral, as specified
in the agreement, does not decrease below the purchase price plus accrued
interest. If such decrease occurs, additional collateral will be requested
and, when received, added to the account to maintain full collateralization.
The Fund will accrue interest from the institution until the time when the
repurchase is to occur. Although such date is deemed by the Fund to be the
maturity date of a repurchase agreement, the maturities of securities subject
to repurchase agreements are not subject to any limits.

While repurchase agreements involve certain risks not associated with
direct investments in debt securities, the Fund follows procedures designed
to minimize such risks. These procedures include effecting repurchase
transactions only with large, well-capitalized and well-established financial
institutions whose financial condition will be continually monitored by the
Adviser subject to procedures established by the Board of Trustees of the
Fund. In addition, as described above, the value of the collateral underlying
the repurchase agreement will be at least equal to the repurchase price,
including any accrued interest earned on the repurchase agreement. In the
event of a default or bankruptcy by a selling financial institution, the Fund
will seek to liquidate such collateral. However, the exercising of the Fund's
right to liquidate such collateral could involve certain costs or delays and,
to the extent that proceeds from any sale upon a default of the obligation to
repurchase were less than the repurchase price, the Fund could suffer a loss.
The Fund will not invest in repurchase agreements that do not mature within
seven days and in other illiquid securities if, in the aggregate, such
investments amount to more than 15% of its net assets.

INVESTMENT RESTRICTIONS
- -----------------------------------------------------------------------------

The Fund has adopted certain investment restrictions as fundamental
policies which cannot be changed without the approval of the holders of a
"majority" of the outstanding shares of the Fund, as defined in the Act.
Majority is defined in the Act as the lesser of (a) 67% or more of the shares
present at a meeting of shareholders, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented by proxy, or (b)
more than 50% of the outstanding shares. It is the Trust's fundamental policy
not to concentrate in any one industry and for the purposes of this policy,
U.S. Government securities are not considered to be an industry.

These restrictions provide that the Fund may not:

1. Invest more than 5% of the value of its total assets in the
securities of any one issuer (other than obligations issued or guaranteed
by the United States Government, its agencies or instrumentalities).

2. Purchase common stocks, preferred stocks, warrants, other equity
securities, corporate bonds, municipal bonds or industrial revenue bonds;

3. Borrow money, except from banks for temporary or emergency
purposes, including the meeting of redemption requests which might
otherwise require the untimely disposition of securities. Borrowing in the
aggregate may not exceed 20%, and borrowing for purposes other than
meeting redemptions may not exceed 5% of the value of the Fund's total
assets (including the amount borrowed), less liabilities (not including
the amount borrowed) at the time the borrowing is made. Borrowings in
excess of 5% will be repaid before additional investments are made;

<PAGE>

4. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except in an amount up to 10% of the value of its net assets, but only to
secure borrowings for temporary or emergency purposes;

5. Sell securities short or purchase securities on margin;

6. Write or purchase put or call options;

7. Underwrite the securities of other issuers or purchase restricted
securities;

8. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity futures contracts or oil and gas
interests;

9. Make loans to others except through the purchase of qualified debt
obligations in accordance with the Fund's investment objectives and
policies;

10. Issue senior securities as defined in the Act except insofar as
the Fund may be deemed to have issued a senior security by reason of: (a)
borrowing money in accordance with restrictions described above or (b) by
purchasing securities on a when-issued or delayed delivery basis or
purchasing or selling securities on a forward commitment basis;

11. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation, acquisition of assets
or plan of reorganization.

In addition, as a nonfundamental policy, the Fund may not invest in
securities of any issuer if, in the exercise of reasonable diligence, any
officer or trustee of the Fund or any officer or director of the Investment
Manager owns more than 1/2 of 1% of the outstanding securities of such
issuer, and such officers, trustees and directors who own more than 1/2 of 1%
own in the aggregate more than 5% of the outstanding securities of such
issuers.

If a percentage restriction is adhered to at the time of an investment, a
later increase or decrease in percentage resulting from a change in values of
portfolio securities or amount of total or net assets will not constitute a
violation of any of the foregoing restrictions.

PORTFOLIO TRANSACTIONS AND BROKERAGE
- -----------------------------------------------------------------------------

Subject to the general supervision by the Trustees of the Fund, the
Investment Manager is responsible for decisions to buy and sell securities
for the Fund, the selection of brokers and dealers to effect the
transactions, and the negotiation of brokerage commissions, if any. Purchases
and sales of portfolio securities are normally transacted through issuers,
underwriters or major dealers in U.S. Government securities acting as
principals. Such transactions are made on a net basis and do not involve
payment of brokerage commissions. The cost of securities purchased from an
underwriter usually includes a commission paid by the issuer to the
underwriters; transactions with dealers normally reflect the spread between
bid and asked prices.

The Investment Manager currently serves as investment manager to a number
of clients, including other investment companies, and may in the future act
as investment manager or adviser to others. It is the practice of the
Investment Manager to cause purchase and sale transactions to be allocated
among the Fund and others whose assets it manages in such a manner as it
deems equitable. In making such allocations among the Fund and other client
accounts, the main factors considered are the respective investment
objectives, the relative size of portfolio holdings of the same or comparable
securities, the availability of cash for investment, the size of investment
commitments generally held and the opinions of the persons responsible for
managing the portfolios of the Fund and other client accounts.

The policy of the Fund regarding purchases and sales of securities for its
portfolio is that primary consideration will be given to obtaining the most
favorable prices and efficient executions of transactions. In seeking to
implement the Fund's policies, the Investment Manager effects transactions
with those brokers and dealers who the Investment Manager believes provide
the most favorable prices and are capable of providing efficient executions.
If the Investment Manager believes such prices and executions are obtainable
from more than one broker or dealer, it may give consideration to placing
portfolio

<PAGE>

transactions with those brokers and dealers who also furnish research and
other services to the Fund or the Investment Manager. Such services may
include, but are not limited to, any one or more of the following:
information as to the availability of securities for purchase or sale;
statistical or factual information or opinions pertaining to investment; wire
services; and appraisals or evaluations of portfolio securities.

The information and services received by the Investment Manager from
brokers and dealers may be of benefit to the Investment Manager in the
management of accounts of some of its other clients and may not in all cases
benefit the Fund directly. While the receipt of such information and services
is useful in varying degrees and would generally reduce the amount of
research or services otherwise performed by the Investment Manager and
thereby reduce its expenses, it is of indeterminable value and the management
fee paid to the Investment Manager is not reduced by any amount that may be
attributable to the value of such services.

Pursuant to an order of the Securities and Exchange Commission, the Fund
may effect principal transactions in certain money market instruments with
DWR. The Fund will limit its transactions with DWR to U.S. Treasury
securities. Such transactions will be effected with DWR only when the price
available from DWR is better than that available from other dealers.

Consistent with the policy described above, brokerage transactions in
securities listed on exchanges or admitted to unlisted trading privileges may
be effected through DWR. In order for DWR to effect any portfolio
transactions for the Fund, the commissions, fees or other remuneration
received by DWR must be reasonable and fair compared to the commissions, fees
or other remuneration paid to other brokers in connection with comparable
transactions involving similar securities being purchased or sold on an
exchange during a comparable period of time. This standard would allow DWR to
receive no more than the remuneration which would be expected to be received
by an unaffiliated broker in a commensurate arm's length transaction.
Furthermore, the Trustees of the Fund, including a majority of the Trustees
who are not "interested" Trustees, have adopted procedures which are
reasonably designed to provide that any commissions, fees or other
remuneration paid to DWR are consistent with the foregoing standard.

Portfolio turnover rate is defined as the lesser of the value of the
securities purchased or securities sold, excluding all securities whose
maturities at time of acquisition were one year or less, divided by the
average monthly value of such securities owned during the year. However,
because of the short-term nature of the Fund's portfolio securities, it is
anticipated that the number of purchases and sales or maturities of such
securities will be substantial. Nevertheless, as brokerage commissions are
not normally charged on purchases and sales of such securities, the large
number of these transactions does not have an adverse effect upon the net
yield and net asset value of the shares of the Fund.

THE DISTRIBUTOR
- -----------------------------------------------------------------------------

As discussed in the Prospectus, shares of the Fund are distributed by Dean
Witter Distributors Inc. (the "Distributor"). The Distributor has entered
into a Selected Dealer Agreement with DWR, which through its own sales
organization sells shares of the Fund, and may enter into selected
broker-dealer agreements with others. The Distributor, a Delaware
corporation, is an indirect wholly-owned subsidiary of DWDC. The Trustees of
the Fund, including a majority of the Independent Trustees, approved, at
their meeting on April 20, 1995, a Distribution Agreement appointing the
Distributor exclusive distributor of the Fund's shares and providing for the
Distributor to bear distribution expenses not borne by the Fund. By its
terms, the Distribution Agreement continues until April 30, 1996, and
provides that it will remain in effect from year to year thereafter if
approved by the Board.

The Distributor bears all expenses it may incur in providing services
under the Distribution Agreement. Such expenses include the payment of
commissions for sales of the Fund's shares and incentive compensation to
account executives. The Distributor also pays certain expenses in connection
with the distribution of the Fund's shares, including the costs of preparing,
printing and distributing advertising or promotional materials, and the costs
of printing and distributing prospectuses and supplements thereto used in
connection with the offering and sale of the Fund's shares. The Fund bears
the costs of initial typesetting, printing and distribution or prospectuses
and supplements thereto to

<PAGE>

shareholders. The Fund also bears the costs of registering the Fund and its
shares under federal and state securities laws. The Fund and Distributor have
agreed to indemnify each other against certain liabilities, including
liabilities under the Securities Act of 1933, as amended. Under the
Distribution Agreement, the Distributor uses its best efforts in rendering
services to the Fund, but in the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations, the Distributor is
not liable to the Fund or any of its shareholders for any error of judgment
or mistake of law or for any act or omission or for any losses sustained by
the Fund or its shareholders.

PLAN OF DISTRIBUTION

As discussed in the Prospectus, the Fund has entered into a Plan of
Distribution pursuant to Rule 12b-1 under the Act with the Distributor
whereby the expenses of certain activities in connection with the
distribution of shares of the Fund are reimbursed. The Plan was initially
approved by the Trustees of the Fund on April 20, 1995, and by InterCapital,
the then sole shareholder of the Fund on May 3, 1995. The vote of the
Trustees included a majority of the Trustees who are not and were not at the
time of their votes interested persons of the Fund and who have and had at
the time of their votes no direct or indirect financial interest in the
operation of the Plan (the "Independent 12b-1 Trustees"), cast in person at a
meeting called for the purpose of voting on such Plan. In determining to
approve the Plan, the Trustees, including the Independent Trustees, concluded
that, in their judgment, there is a reasonable likelihood that the Plan will
benefit the Fund and its shareholders.

The Plan provides that the Distributor will bear the expense of all
promotional and distribution related activities on behalf of the Fund,
including personal services to shareholders and maintenance of shareholder
accounts, except for expenses that the Trustees determine to reimburse, as
described below. The following activities and services may be provided by the
Distributor, DWR, its affiliates and any other selected broker-dealer may be
reimbursed for the following expenses and services under the Plan: (1)
compensation to and expenses of account executives and other employees of
DWR, its affiliates and other selected broker-dealers, including overhead and
telephone expenses; (2) sales incentives and bonuses to sales representatives
and to marketing personnel in connection with promoting sales of the Fund's
shares; (3) expenses incurred in connection with promoting sales of the
Fund's shares; (4) preparing and distributing sales literature; and (5)
providing advertising and promotional activities, including direct mail
solicitation and television, radio, newspaper, magazine and other media
advertisements.

The Fund is authorized to reimburse specific expenses incurred or to be
incurred in promoting the distribution of the Fund's shares and in servicing
shareholder accounts. Reimbursement is made through monthly payments in
amounts determined in advance of each fiscal quarter by the Trustees,
including a majority of the Independent 12b-1 Trustees. The amount of each
monthly payment may in no event exceed an amount equal to a payment at the
annual rate of 0.35 of 1% of the Fund's average daily net assets during the
month. No interest or other financing charges, if any, incurred on any
distribution expenses will be reimbursable under the Plan. In making
quarterly determinations of the amounts that may be expended by the Fund, the
Distributor will provide and the Trustees will review a quarterly budget of
projected distribution expenses to be incurred on behalf of the Fund,
together with a report explaining the purposes and anticipated benefits of
incurring such expenses. The Trustees will determine which particular
expenses, and the portions thereof, that may be borne by the Fund, and in
making such a determination shall consider the scope of the Distributor's
commitment to promoting the distribution of the Fund's shares.

The Distributor has informed the Fund that a portion of the fees payable
by the Fund each year pursuant to the Plan equal to 0.25% of the Fund's
average daily net assets is characterized as a "service fee" under the Rules
of Fair Practice of the National Association of Securities Dealers (of which
the Distributor is a member). Such portion of the fee is a payment made for
personal service and/or maintenance of shareholder accounts. The remaining
portion of the Plan fees payable by the Fund is characterized as an
"asset-based sales charge" as defined by the aforementioned Rules of Fair
Practice.

<PAGE>

DWR's account executives are credited with an annual gross residual
commission, currently a gross residual of up to 0.35% of the current value of
the respective accounts for which they are the account executives of record.
The "gross residual" is a charge which reflects residual commissions paid by
DWR to its account executives and expenses of DWR associated with the sale
and promotion of Fund shares and the servicing of shareholders' accounts,
including the expenses of operating branch offices in connection with the
servicing of shareholders' accounts, which expenses include lease costs, the
salaries and employee benefits of operations and sales support personnel,
utility costs, communications costs and the costs of stationery and supplies
and other expenses relating to branch office servicing of shareholder
accounts. The portion of the annual gross residual commission allocated to
servicing of shareholders' accounts does not exceed 0.25% of the average
annual net asset value of shares sold by the account executive.

Under the Plan, the Distributor uses its best efforts in rendering
services to the Fund, but in the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations, the Distributor is
not liable to the Fund or any of its shareholders for any error of judgment
or mistake of law or for any act or omission or for any losses sustained by
the Fund or its shareholders.

The Plan will remain in effect until April 30, 1996, and will continue
from year to year thereafter, provided such continuance is approved annually
by a vote of the Trustees, including a majority of the Independent 12b-1
Trustees. Any amendment to increase materially the maximum amount authorized
to be spent under the Plan must be approved by the shareholders of the Fund,
and all material amendments to the Plan must be approved by the Trustees in
the manner described above. The Plan may be terminated at any time, without
payment of any penalty, by vote of a majority of the Independent 12b-1
Trustees or by a vote of the holders of a majority of the outstanding voting
securities of the Trust (as defined in the Act) on not more than 30 days
written notice to any other party to the Plan. So long as the Plan is in
effect, the selection or nomination of the Independent Trustees is committed
to the discretion of the Independent Trustees.

Under the Plan the Distributor provides the Fund, for review by the
Trustees, and the Trustees review, promptly after the end of each calendar
quarter, a written report regarding the distribution expenses incurred on
behalf of the Fund during such calendar quarter, which report includes (1) an
itemization of the types of expenses and the purposes therefor; (2) the
amounts of such expenses; and (3) a description of the benefits derived by
the Fund. In the Trustees' quarterly review of the Plan they consider its
continued appropriateness and the level of compensation provided therein.

No interested person of the Fund nor any Trustee of the Fund who is not an
interested person of the Fund, as defined in the Act, has any direct or
indirect financial interest in the operation of the Plan except to the extent
that the Distributor, InterCapital, DWSC, DWR or certain of its employees may
be deemed to have such an interest as a result of benefits derived from the
successful operation of the Plan or as a result of receiving a portion of the
amounts expended thereunder by the Fund.

DETERMINATION OF NET ASSET VALUE

As discussed in the Prospectus, the net asset value per share of the Fund
is determined at 4:00 p.m., New York time (or, on days when the New York
Stock Exchange closes prior to 4:00 p.m., at such earlier time), on each day
the New York Stock Exchange is open, by taking the value of all the assets of
the Fund, subtracting all liabilities, dividing by the number of shares
outstanding and adjusting the result to the nearest cent. The New York Stock
Exchange currently observes the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.

SHAREHOLDER SERVICES
- -----------------------------------------------------------------------------

Shareholder Investment Account. Upon purchase of shares of the Fund, a
Shareholder Investment Account is opened for the investor on the books of the
Fund, maintained by Dean Witter Trust Company (the "Transfer Agent"), in full
and fractional shares of the Fund (rounded to the nearest 1/100 of a share).
This is an open account in which shares owned by the investor are credited by
the Transfer Agent in lieu

<PAGE>

of issuance of a share certificate. If a share certificate is desired, it
must be requested in writing for each transaction. Certificates are issued
only for full shares and may be redeposited in the account at any time. There
is no charge to the investor for issuance of a certificate. No certificates
will be issued for fractional shares or to shareholders who have elected the
pre-designated bank account method, Systematic Withdrawal Plan or check
writing privilege of withdrawing cash from their accounts. Whenever a
shareholder instituted transaction takes place in the Shareholder Investment
Account, the shareholder will be mailed a written confirmation of the
transaction from the Fund or from DWR or other selected broker-dealer.

Automatic Investment of Dividends and Distributions. All dividends and
capital gains distributions are automatically paid in full and fractional
shares of the Fund, unless the shareholder requests that they be paid in
cash. Each purchase of shares of the Fund is made upon the condition that the
Transfer Agent is thereby automatically appointed as agent of the investor to
receive all dividends and capital gains distributions on shares owned by the
investor. Such dividends and distributions will be paid in shares of the Fund
at the net asset value per share as of the close of business on the record
date. An investor may terminate such agency at any time and may request the
Transfer Agent in writing to have subsequent dividends and/or capital gains
distributions paid in cash rather than shares. To assure sufficient time to
process the change, such request must be received by the Transfer Agent at
least five (5) business days prior to the record date for which it commences
to take effect. In case of recently purchased shares for which registration
instructions have not been received on the record date, cash payments will be
made to DWR or other selected broker-dealer.

Investment of Distributions Received in Cash. As discussed in the
Prospectus, any shareholder who receives a cash payment representing a
dividend or capital gains distribution may invest such dividend or
distribution at net asset value (without sales charge) by returning the check
or the proceeds to the Transfer Agent within 30 days after the payment date.
If the shareholder returns the proceeds of a dividend or distribution, such
funds must be accompanied by a signed statement indicating that the proceeds
constitute a dividend or distribution to be invested. Such investment will be
made at the net asset value per share next determined after receipt of the
check or the proceeds by the Transfer Agent.

Direct Investments through Transfer Agent. As discussed in the Prospectus,
a shareholder may make additional investments in Fund shares at any time by
sending a check in any amount, not less than $100, payable to Dean Witter
Intermediate Term U.S. Treasury Trust, directly to the Transfer Agent. Such
amounts will be applied to the purchase of Fund shares at the net asset value
per share next computed after receipt of the check or purchase payment by the
Transfer Agent. The shares so purchased will be credited to the investor's
account.

EasyInvest (Service Mark) . Shareholders may subscribe to EasyInvest, an
automatic purchase plan which provides for any amount from $100 to $5,000 to
be transferred automatically from a checking or savings account, on a
semi-monthly, monthly or quarterly basis, to the Transfer Agent for
investment in shares of the Fund. Shares purchased through EasyInvest will be
added to the shareholder's existing account at the net asset value calculated
the same business day the transfer of funds is effected. For further
information or to subscribe to EasyInvest, shareholders should contact their
DWR or other selected broker-dealer account executive or the Transfer Agent.

Targeted Dividends (Service Mark) . In states where it is legally
permissible to do so, shareholders may also have all income dividends and
capital gains distributions automatically invested in shares of an open-end
Dean Witter Fund other than Dean Witter Intermediate Term U.S. Treasury
Trust. Such investment will be made as described above for automatic
investment in shares of the Fund, at the net asset value per share of the
selected Dean Witter Fund as of the close of business on the payment date of
the dividend or distribution, and will begin to earn dividends, if any, in
the selected Dean Witter Fund the next business day. To participate in the
Targeted Dividends program, shareholders should contact their DWR or other
selected broker-dealer account executive or the Transfer Agent. Shareholders
of the Fund must be shareholders of the Dean Witter Fund targeted to receive
investments from dividends at the time they enter the Targeted Dividends
program. Investors should review the prospectus of the targeted Dean Witter
Fund before entering the program.

<PAGE>

Systematic Withdrawal Plan. As discussed in the Prospectus, a withdrawal
plan is available for shareholders who own or purchase shares of the Fund
having a minimum value of $10,000 based upon the then current net asset
value. The plan provides for monthly or quarterly (March, June, September and
December) checks in any dollar amount, not less than $25, or in any whole
percentage of the account balance, on an annualized basis.

Dividends and capital gains distributions on shares held under the
Systematic Withdrawal Plan will be invested in additional full and fractional
shares at net asset value (without a sales charge). Shares will be credited
to an open account for the investor by the Transfer Agent; no share
certificates will be issued. A shareholder is entitled to a share certificate
upon written request to the Transfer Agent, although in that event the
shareholder's Systematic Withdrawal Plan will be terminated.

Withdrawal Plan payments should not be considered as dividends, yields or
income. If periodic withdrawal plan payments continuously exceed net
investment income and net capital gains, the shareholder's original
investment will be correspondingly reduced and ultimately exhausted.

Each withdrawal constitutes a redemption of shares and any gain or loss
realized must be recognized for federal income tax purposes.

The Transfer Agent acts as agent for the shareholder in tendering to the
Fund for redemption sufficient full and fractional shares to provide the
amount of the periodic withdrawal payment designated in the application. The
shares will be redeemed at their net asset value determined, at the
shareholder's option, on the tenth or twenty-fifth day (or next following
business day) of the relevant month or quarter and normally a check for the
proceeds will be mailed by the Transfer Agent, or amounts credited to a
shareholder's DWR or other Selected Broker-Dealer brokerage account, within
five business days after the date of redemption. The Withdrawal Plan may be
terminated at any time by the Fund.

A shareholder may, at any time, change the amount and interval of
withdrawal payments and the address to which checks are mailed by written
notification to the Transfer Agent. The shareholder's signature on such
instructions must be guaranteed by an eligible guarantor acceptable to the
Transfer Agent (shareholders should contact the Transfer Agent for a
determination as to whether a particular institution is such an eligible
guarantor). The shareholder's signature on such notification must be
guaranteed in the manner described above. The shareholder may also terminate
the Systematic Withdrawal Plan at any time by written notice to the Transfer
Agent. In the event of such termination, the account will be continued as a
Shareholder Investment Account. The shareholder may also redeem all or part
of the shares held in the Systematic Withdrawal Plan account (see
"Redemptions and Repurchases" in the Prospectus) at any time. The Systematic
Withdrawal Plan is not available for shares held in an Exchange Privilege
Account.

EXCHANGE PRIVILEGE

As discussed in the Prospectus under the caption "Exchange Privilege," an
Exchange Privilege exists whereby investors who have purchased shares of any
of the Dean Witter Funds sold with either a front-end sales charge ("FESC
funds") or a contingent deferred sales charge ("CDSC funds") will be
permitted, after the shares of the fund acquired by purchase (not by exchange
or dividend reinvestment) have been held for thirty days, to redeem all or
part of their shares in that fund, have the proceeds invested in shares of
the Fund, Dean Witter Short-Term U.S. Treasury Trust, Dean Witter Limited
Term Municipal Trust, Dean Witter Short-Term Bond Fund, Dean Witter Balanced
Growth Fund and Dean Witter Balanced Income Fund and in shares of five money
market funds: Dean Witter Liquid Asset Fund Inc., Dean Witter Tax-Free Daily
Income Trust, Dean Witter California Tax-Free Daily Income Trust, Dean Witter
New York Municipal Money Market Trust, or Dean Witter U.S. Government Money
Market Trust (these eleven funds, including the Fund, are hereinafter
collectively referred to as "Exchange Funds"). There is no waiting period for
exchanges of shares acquired by exchange or dividend reinvestment.
Subsequently, shares of Exchange Funds received in an exchange for shares of
an FESC fund (regardless of the type of fund originally purchased) may be
redeemed and exchanged for shares of other Exchange Funds, FESC funds or CDSC
funds (however, shares of CDSC funds, including shares acquired in exchange
of (i) shares of FESC funds or (ii) shares of Exchange Funds which were
acquired

<PAGE>

in exchange for shares of FESC funds, may not be exchanged for shares of FESC
funds). Additionally, shares of Exchange Funds received in an exchange for
shares of a CDSC fund (regardless of the type of fund originally purchased)
may be redeemed and exchanged for shares of Exchange Funds or CDSC funds.
Ultimately, any applicable contingent deferred sales charge ("CDSC") will
have to be paid upon redemption of shares originally purchased from a CDSC
fund. An exchange will be treated for federal income tax purposes the same as
a repurchase or redemption of shares, on which the shareholder may realize a
capital gain or loss.

Any new account established through the Exchange Privilege will have the
same registration and cash dividend or dividend reinvestment plan as the
present account, unless the Transfer Agent receives written notification to
the contrary. For telephone exchanges, the exact registration of the existing
account and the account number must be provided.

Any shares held in certificate form cannot be exchanged but must be
forwarded to the Transfer Agent and deposited into the shareholder's account
before being eligible for exchange. (Certificates mailed in for deposit
should not be endorsed.)

When shares of any CDSC fund are exchanged for shares of any Exchange
Fund, the exchange is executed at no charge to the shareholder, without the
imposition of the CDSC at the time of the exchange. During the period of time
the shareholder remains in the Exchange Fund (calculated from the last day of
the month in which the Exchange Fund shares were acquired), the holding
period or "year since purchase payment made" is frozen. When shares are
redeemed out of the Exchange Fund, they will be subject to a CDSC which would
be based upon the period of time the shareholder held shares in a CDSC fund.
However, in the case of shares of a CDSC fund exchanged into the Exchange
Fund on or after April 23, 1990, upon redemption of shares which results in a
CDSC being imposed, a credit (not to exceed the amount of the CDSC) will be
given in an amount equal to the Exchange Fund 12b-1 distribution fees, if
any, incurred on or after that date which are attributable to those shares.
Shareholders acquiring shares of an Exchange Fund pursuant to this exchange
privilege may exchange those shares back into a CDSC fund from the Exchange
Fund, with no CDSC being imposed on such exchange. The holding period
previously frozen when shares were first exchanged for shares of the Exchange
Fund resumes on the last day of the month in which shares of a CDSC fund are
reacquired. Thus, a CDSC is imposed only upon an ultimate redemption, based
upon the time (calculated as described above) the shareholder was invested in
a CDSC fund. Shares of a CDSC fund acquired in exchange for shares of an FESC
fund (or in exchange for shares of other Dean Witter Funds for which shares
of an FESC fund have been exchanged) are not subject to any CDSC upon their
redemption.

When shares initially purchased in a CDSC fund are exchanged for shares of
another CDSC fund or for shares of an Exchange Fund, the date of purchase of
the shares of the fund exchanged into, for purposes of the CDSC upon
redemption, will be the last day of the month in which the shares being
exchanged were originally purchased. In allocating the purchase payments
between funds for purposes of the CDSC, the amount which represents the
current net asset value of shares at the time of the exchange which were (i)
purchased more than three or six years (depending on the CDSC schedule
applicable to the shares) prior to the exchange, (ii) originally acquired
through reinvestment of dividends or distributions and (iii) acquired in
exchange for shares of FESC funds, or for shares of other Dean Witter Funds
for which shares of FESC funds have been exchanged (all such shares called
"Free Shares"), will be exchanged first. Shares of Dean Witter American Value
Fund acquired prior to April 30, 1984, shares of Dean Witter Dividend Growth
Securities Inc. and Dean Witter Natural Resource Development Securities Inc.
acquired prior to July 2, 1984, and shares of Dean Witter Strategist Fund
acquired prior to November 8, 1989 are also considered Free Shares and will
be the first Free Shares to be exchanged. After an exchange, all dividends
earned on shares in the Exchange Fund will be considered Free Shares. If the
exchanged amount exceeds the value of such Free Shares, an exchange is made,
on a block-by-block basis, of non-Free Shares held for the longest period of
time (except that if shares held for identical periods of time but subject to
different CDSC schedules are held in the same Exchange Privilege Account, the
shares of that block that are subject to a lower CDSC rate will be exchanged
prior to the shares of that block that are subject to a higher CDSC rate).
Shares equal to any appreciation in the value of non-Free Shares exchanged
will be treated as Free Shares, and the amount

<PAGE>

of the purchase payments for the non-Free Shares of the fund exchanged into
will be equal to the lesser of (a) the purchase payments for, or (b) the
current net asset value of, the exchanged non-Free Shares. If an exchange
between funds would result in exchange of only part of a particular block of
non-Free Shares, then shares equal to any appreciation in the value of the
block (up to the amount of the exchange) will be treated as Free Shares and
exchanged first, and the purchase payment for that block will be allocated on
a pro rata basis between the non-Free Shares of that block to be retained and
the non-Free Shares to be exchanged. The prorated amount of such purchase
payment attributable to the retained non-Free Shares will remain as the
purchase payment for such shares, and the amount of purchase payment for the
exchanged non-Free Shares will be equal to the lesser of (a) the prorated
amount of the purchase payment for, or (b) the current net asset value of,
those exchanged non-Free Shares. Based upon the procedures described in the
CDSC fund Prospectus under the caption "Contingent Deferred Sales Charge",
any applicable CDSC will be imposed upon the ultimate redemption of shares of
any fund, regardless of the number of exchanges since those shares were
originally purchased.

The Transfer Agent acts as agent for shareholders of the Fund in effecting
redemptions of Fund shares and in applying the proceeds to the purchase of
other fund shares. In the absence of negligence on its part, neither the
Transfer Agent nor the Fund shall be liable for any redemption of Fund shares
caused by unauthorized telephone or telegraph instructions. Accordingly, in
such event, the investor shall bear the risk of loss. The staff of the
Securities and Exchange Commission is currently considering the propriety of
such policies.

With respect to the redemption or repurchase of shares of the Fund, the
application of proceeds to the purchase of new shares in the Fund or any
other of the funds and the general administration of the Exchange Privilege,
the Transfer Agent acts as agent for the Distributor and any selected
broker-dealer in the performance of such functions.

With respect to exchanges, redemptions or repurchases, the Transfer Agent
shall be liable for its own negligence and not for the default or negligence
of its correspondents or for losses in transit. The Fund shall not be liable
for any default or negligence of the Transfer Agent, the Distributor or any
selected broker-dealer.

The Distributor and any selected broker-dealer have authorized and
appointed the Transfer Agent to act as their agent in connection with the
application of proceeds of any redemption of Fund shares to the purchase of
the shares of any other fund and the general administration of the Exchange
Privilege. No commission or discounts will be paid to the Distributor or any
selected broker-dealer for any transactions pursuant to this Exchange
Privilege.

Shares of the Fund acquired from a CDSC Fund or an FESC Fund pursuant to
the Exchange Privilege will be held by the Fund's Transfer Agent in an
Exchange Privilege Account distinct from any account of the same shareholder
who may have acquired shares of the Fund directly. A shareholder of the Fund
will not be permitted to make additional investments in such Exchange
Privilege Account, except through the exchange of additional shares of the
fund in which the shareholder had initially invested, and the proceeds of any
shares redeemed from such Account may not thereafter be placed back into that
Account. If such a shareholder desires to make any additional investments in
the Fund, a separate account will be maintained for receipt of such
investments. The Fund will have additional costs for account maintenance if a
shareholder has more than one account with the Fund.

Exchanges are subject to the minimum investment requirement and any other
conditions imposed by each fund. (The minimum initial investment is $10,000
for Dean Witter Short-Term U.S. Treasury Trust and $5,000 for Dean Witter
Liquid Asset Fund Inc., Dean Witter Tax-Free Daily Income Trust, Dean Witter
California Tax-Free Daily Income Trust, and Dean Witter New York Municipal
Money Market Trust, although those funds may, at their discretion, accept
initial investments of as low as $1,000. The minimum initial investment for
all other Dean Witter Funds for which the Exchange Privilege is available is
$1,000.) Upon exchange into an Exchange Fund, the shares of that fund will be
held in a special Exchange Privilege Account separately from accounts of
those shareholders who have acquired their shares directly from that fund. As
a result, certain services normally available to shareholders of the Fund or
of money market funds, including the check writing feature, will not be
available for funds held in that account.

<PAGE>

The Fund and each of the other Dean Witter Funds may limit the number of
times this Exchange Privilege may be exercised by any investor within a
specified period of time. Also, the Exchange Privilege may be terminated or
revised at any time by any of the Dean Witter Funds, upon such notice as may
be required by applicable regulatory agencies (presently sixty days prior
written notice for termination or material revision), provided that six
months' prior written notice of termination will be given to the shareholders
who hold shares of Exchange Funds, pursuant to this Exchange Privilege, and
provided further that the Exchange Privilege may be terminated or materially
revised at times (a) when the New York Stock Exchange is closed for other
than customary weekends and holidays, (b) when trading on that Exchange is
restricted, (c) when an emergency exists as a result of which disposal by the
Fund of securities owned by it is not reasonably practicable or it is not
reasonably practicable for the Fund fairly to determine the value of its net
assets, (d) during any other period when the Securities and Exchange
Commission by order so permits (provided that applicable rules and
regulations of the Securities and Exchange Commission shall govern as to
whether the conditions prescribed in (b) or (c) exist), or (e), if the Fund
would be unable to invest amounts effectively in accordance with its
investment objective(s), policies and restrictions.

For further information regarding the Exchange Privilege, shareholders
should contact their DWR or other selected broker-dealer account executive or
the Transfer Agent.

REDEMPTIONS AND REPURCHASES
- -----------------------------------------------------------------------------

Payment for Shares Redeemed or Repurchased. As discussed in the
Prospectus, payment for shares presented for repurchase or redemption will be
ordinarily made by check within seven days after receipt by the Transfer
Agent of the certificate and/or written request in good order. Such payment
may be postponed or the right of redemption suspended at times (a) when the
New York Stock Exchange is closed for other than customary weekends and
holidays, (b) when trading on that Exchange is restricted, (c) when an
emergency exists as a result of which disposal by the Fund of securities
owned by it is not reasonably practicable or it is not reasonably practicable
for the Fund to fairly determine the value of its net assets, or (d) during
any other period when the Securities and Exchange Commission by order so
permits; provided that applicable rules and regulations of the Securities and
Exchange Commission shall govern as to whether the conditions prescribed in
(b) or (c) exist. If the shares to be redeemed have recently been purchased
by check (including a certified or bank cashier's check) and the check has
not yet cleared, payment of redemption proceeds may be delayed until the
check has cleared (not more than fifteen days from the time of receipt of the
check by the Transfer Agent).

Involuntary Redemption. As discussed in the Prospectus, due to the
relatively high cost of handling small investments, the Fund reserves the
right to redeem, at net asset value, the shares of any shareholders whose
shares have a value of less than $100 or such lesser amounts as may be fixed
by the Trustees. However, before the Trust redeems such shares and sends the
proceeds to the shareholder, it will notify the shareholder that the value of
its shares is less than $100 and allow the shareholder 60 days to make an
additional investment in an amount which will increase the value of the
account to $100 or more before the redemption is processed.

DIVIDENDS, DISTRIBUTIONS AND TAXES
- -----------------------------------------------------------------------------

Because the Fund intends to distribute all of its net investment income
and capital gains to shareholders and intends to otherwise comply with all
the provisions of Subchapter M of the Internal Revenue Code of 1986, it is
not expected that the Fund will be required to pay any federal income tax on
such income and capital gains. If however, any such capital gains are
retained, the Fund will pay federal income tax thereon. In such a case,
shareholders will have to include such retained gains in their income but
will be able to claim their share of the tax paid by the Fund as a credit
against their individual federal income tax.

Shareholders will normally have to pay federal income taxes on the
dividends and capital gains distributions they receive from the Fund. Such
dividends and distributions derived from net investment income or short-term
capital gains are taxable to the shareholder as ordinary dividend income
regardless of how long a shareholder has held the Fund's shares and whether
the shareholder receives such

<PAGE>

dividends or distributions in additional shares or in cash. Distributions of
long-term capital gains, if any, are taxable to shareholders as long-term
capital gains regardless of how long a shareholder has held the Fund's shares
and regardless of whether the distribution is received in additional shares
or in cash.

Any dividend or capital gains distribution received by a shareholder from
any investment company will have the effect of reducing the net asset value
of the shareholder's stock in that company by the exact amount of the
dividend or capital gains distribution. Furthermore, capital gains
distributions and dividends are subject to federal income taxes. If the net
asset value of the shares should be reduced below a shareholder's cost as a
result of the payment of dividends or the distribution of realized long-term
capital gains, such payment or distribution would be in part a return of the
shareholder's investment to the extent of such reduction below the
shareholder's cost, but nonetheless would be fully taxable at either ordinary
or capital gain rates. Therefore, an investor should consider the tax
implications of purchasing Fund shares immediately prior to a dividend or
distribution record date.

Under current federal tax law, the Fund will receive net investment income
in the form of interest by virtue of holding Treasury bills, notes and bonds,
and will recognize income attributable to it from holding zero coupon
Treasury securities. Current federal tax law requires that a holder (such as
the Fund) of a zero coupon security accrue a portion of the discount at which
the security was purchased as income each year even though the Fund receives
no interest payment in cash on the security during the year. As an investment
company, the Fund must pay out substantially all of its net investment income
each year. Accordingly, the Fund may be required to pay out as an income
distribution each year an amount which is greater than the total amount of
cash receipts of interest the Fund actually received. Such distributions will
be made from the available cash of the Fund or by liquidation of portfolio
securities, if necessary. If a distribution of cash necessitates the
liquidation of portfolio securities, the Investment Manager will select which
securities to sell. The Fund may realize a gain or loss from such sales. In
the event the Trust realizes net capital gains from such transactions, its
shareholders may receive a larger capital gain distribution, if any, than
they would in the absence of such transactions.

State and Local Taxes. The Fund intends to invest only in the obligations
of the U.S. Government that provide interest income exempt from most state
and local taxes. Because all States presently allow the pass-through of
federal obligation interest derived from specific federal obligations, it is
anticipated that substantially all of the interest income generated by the
Fund and paid out to shareholders as net investment income will be exempt
from the taxation of most state and local jurisdictions. Such investment
income, however, will not be exempt from federal tax. Furthermore, any
capital gains realized by the Fund will not be exempt from federal, and
generally, state and local taxes. It should be noted that although the Fund
intends to invest only in securities the pass-through income from which is
believed exempt from state and local income taxes, except as noted above, it
is possible that a state or local taxing authority may seek to tax an
investor on a portion of the interest income of a particular government
obligation held by the Fund.

Shareholders are urged to consult their own tax advisers regarding
specific questions as to federal, state or local taxes.

PERFORMANCE INFORMATION
- -----------------------------------------------------------------------------

As discussed in the Prospectus, from time to time the Fund may quote its
"yield" and/or its "total return" in advertisements and sales literature.
Yield is calculated for any 30-day period as follows: the amount of interest
and/or dividend income for each security in the Fund's portfolio is
determined in accordance with regulatory requirements; the total for the
entire portfolio constitutes the Fund's gross income for the period. Expenses
accrued during the period are subtracted to arrive at "net investment
income". The resulting amount is divided by the product of the net asset
value per share on the last day of the period multiplied by the average
number of Fund shares outstanding during the period that were entitled to
dividends. This amount is added to 1 and raised to the sixth power. 1 is then
subtracted from the result and the difference is multiplied by 2 to arrive at
the annualized yield.

The Fund's "average annual total return" represents an annualization of
the Fund's total return over a particular period and is computed by finding
the annual percentage rate which will result in the ending

<PAGE>

redeemable value of a hypothetical $1,000 investment made at the beginning of
a one, five or ten year period, or for the period from the date of
commencement of the Fund's operations, if shorter than any of the foregoing.
For the purpose of this calculation, it is assumed that all dividends and
distributions are reinvested. The formula for computing the average annual
total return involves a percentage obtained by dividing the ending redeemable
value by the amount of the initial investment, taking a root of the quotient
(where the root is equivalent to the number of years in the period) and
subtracting 1 from the result.

In addition to the foregoing, the Fund may advertise its total return over
different periods of time by means of aggregate, average, year-by-year or
other types of total return figures. The Fund may compute its aggregate total
return for specified periods by determining the aggregate percentage rate
which will result in the ending value of a hypothetical $1,000 investment
made at the beginning of the period. For the purpose of this calculation, it
is assumed that all dividends and distributions are reinvested. The formula
for computing aggregate total return involves a percentage obtained by
dividing the ending value by the initial $1,000 investment and subtracting 1
from the result.

The Fund may also advertise the growth of a hypothetical investment of
$10,000, $50,000 or $100,000 in shares of the Fund by adding 1 to the Fund's
aggregate total return and multiplying by $10,000, $50,000 or $100,000, as
the case may be.

The Fund from time to time may also advertise its performance relative to
certain performance rankings and indexes compiled by independent
organizations.

DESCRIPTION OF SHARES OF THE FUND
- -----------------------------------------------------------------------------

The shareholders of the Fund are entitled to a full vote for each full
share held. The Trustees have been elected by InterCapital as the sole
shareholder of the Fund. The Trustees themselves have the power to alter the
number and the terms of office of the Trustees, and they may at any time
lengthen their own terms or make their terms of unlimited duration and
appoint their own successors, provided that always at least a majority of the
Trustees has been elected by the shareholders of the Fund. Under certain
circumstances the Trustees may be removed by action of the Trustees. The
shareholders also have the right under certain circumstances to remove the
Trustees. The voting rights of shareholders are not cumulative, so that
holders of more than 50 percent of the shares voting can, if they choose,
elect all Trustees being selected, while the holders of the remaining shares
would be unable to elect any Trustees.

The Declaration of Trust permits the Trustees to authorize the creation of
additional series of shares (the proceeds of which would be invested in
separate, independently managed portfolios) and additional classes of shares
within any series (which would be used to distinguish among the rights of
different categories of shareholders, as might be required by future
regulations or other unforeseen circumstances). However, the Trustees have
not authorized any such additional series or classes of shares.

The Declaration of Trust further provides that no Trustee, officer,
employee or agent of the Fund is liable to the Fund or to a shareholder, nor
is any Trustee, officer, employee or agent liable to any third persons in
connection with the affairs of the Fund, except as such liability may arise
from his or its own bad faith, willful misfeasance, gross negligence, or
reckless disregard of his duties. It also provides that all third persons
shall look solely to the Fund's property for satisfaction of claims arising
in connection with the affairs of the Fund. With the exceptions stated, the
Declaration of Trust provides that a Trustee, officer, employee or agent is
entitled to be indemnified against all liability in connection with the
affairs of the Fund.

The Fund is authorized to issue an unlimited number of shares of
beneficial interest. The Fund shall be of unlimited duration, subject to the
provisions in the Declaration of Trust concerning termination by action of
the shareholders.

<PAGE>

CUSTODIAN AND TRANSFER AGENT
- -----------------------------------------------------------------------------

The Bank of New York, 90 Washington Street, New York, New York 10286 is
the Custodian of the Fund's assets. Any Fund cash balances with the Custodian
in excess of $100,000 are unprotected by Federal deposit insurance. Such
amounts may, at times, be substantial.

Dean Witter Trust Company, Harborside Financial Center, Plaza Two, Jersey
City, New Jersey 07311 is the Transfer Agent of the Trust's shares and
Dividend Disbursing Agent for payment of dividends and distributions on Trust
shares and Agent for shareholders under various investment plans described
herein. Dean Witter Trust Company is an affiliate of Dean Witter InterCapital
Inc., the Fund's Investment Manager, and of Dean Witter Distributors Inc.,
the Fund's Distributor. As Transfer Agent and Dividend Disbursing Agent, Dean
Witter Trust Company's responsibilities include maintaining shareholder
accounts, including providing subaccounting and recordkeeping services for
certain retirement accounts; disbursing cash dividends and reinvesting
dividends; processing account registration changes; handling purchase and
redemption transactions; mailing prospectuses and reports; mailing and
tabulating proxies; processing share certificate transactions; and
maintaining shareholder records and lists. For these services Dean Witter
Trust Company receives a per shareholder account fee from the Fund.

INDEPENDENT ACCOUNTANTS
- -----------------------------------------------------------------------------

Price Waterhouse LLP serves as the independent accountants of the Fund.
The independent accountants are responsible for auditing the annual financial
statements of the Fund.

REPORTS TO SHAREHOLDERS
- -----------------------------------------------------------------------------

The Fund will send to shareholders, at least semi-annually, reports
showing the Fund's portfolio and other information. An annual report,
containing financial statements audited by independent account- ants, will be
sent to shareholders each year.

The Fund's fiscal year ends on the last day of February. The financial
statements of the Fund must be audited at least once a year by independent
accountants whose selection is made annually by the Fund's Board of Trustees.

LEGAL COUNSEL
- -----------------------------------------------------------------------------

Sheldon Curtis, Esq., who is an officer and the General Counsel of the
Investment Manager, is an officer and the General Counsel of the Fund.

EXPERTS
- -----------------------------------------------------------------------------

The Statement of Assets and Liabilities of the Fund included in this
Statement of Additional Information and incorporated by reference in the
Prospectus have been so included and incorporated in reliance on the report
of Price Waterhouse LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

REGISTRATION STATEMENT
- -----------------------------------------------------------------------------

This Statement of Additional Information and the Prospectus do not contain
all of the Information set forth in the Registration Statement the Fund has
filed with the Securities and Exchange Commission. The complete Registration
Statement may be obtained from the Securities and Exchange Commission upon
payment of the fee prescribed by the rules and regulations of the Commission.

<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS
- -----------------------------------------------------------------------------

To the Shareholder and Trustees of
Dean Witter Intermediate Term U.S. Treasury Trust

In our opinion, the accompanying statement of assets and liabilities presents
fairly, in all material respects, the financial position of Dean Witter
Intermediate Term U.S. Treasury Trust ("the Fund") at August 31, 1995, in
conformity with generally accepted accounting principles. This financial
statement is the responsibility of the Fund's management; our responsibility
is to express an opinion on this financial statement based on our audit. We
conducted our audit of this financial statement in accordance with generally
accepted auditing standards which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statement is free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for the opinion expressed
above.

PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
September 5, 1995

<PAGE>

DEAN WITTER INTERMEDIATE TERM U.S. TREASURY TRUST
Statement of Assets and Liabilities at August 31, 1995
- -----------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Cash ................................................................................ $100,000
Deferred organizational expenses (Note 1) ........................................... 180,000
----------
Total Assets ....................................................................... 280,000
LIABILITIES:
Organizational expenses payable (Note 1) ............................................ 180,000
Commitments (Notes 1 and 2) ......................................................... -0-
==========
Net Assets ......................................................................... $100,000
==========
Net Asset Value Per Share (10,000 shares of beneficial interest outstanding;
unlimited
authorized shares of beneficial interest of $.01 par value) ......................... $10
==========
</TABLE>

NOTE 1 -- Dean Witter Intermediate Term U.S Treasury Trust (the "Fund")
was organized as a Massachusetts business trust on February 9, 1995. To date
the Fund has had no transactions other than those relating to organizational
matters and the sale of 10,000 shares of beneficial interest for $100,000 to
Dean Witter InterCapital Inc. (the "Investment Manager"). The Fund is
registered under the Investment Company Act of 1940, as amended (the "Act"),
as a diversified, open-end management investment company. Organizational
expenses of the Fund incurred prior to the offering of the Fund's shares will
be paid by the Investment Manager. It is currently estimated that the
Investment Manager will incur, and be reimbursed by the Fund for
approximately $180,000 in organizational expenses. These expenses will be
deferred and amortized by the Fund on the straight-line method over a period
not to exceed five years from the date of commencement of the Fund's
operations. In the event that, at any time during the five year period
beginning with the date of the commencement of operations, the initial shares
acquired by the Investment Manager prior to such date are redeemed, by any
holder thereof, the redemption proceeds payable in respect of such shares
will be reduced by the pro rata share (based on the proportionate share of
the initial shares redeemed to the total number of original shares
outstanding at the time of redemption) of the then unamortized deferred
organizational expenses as of the date of such redemption. In the event that
the Fund liquidates before the deferred organizational expenses are fully
amortized, the Investment Manager shall bear such unamortized deferred
organizational expenses.

NOTE 2 -- The Fund will enter into an investment management agreement with
the Investment Manager. Certain officers and/or trustees of the Fund are
officers and/or directors of the Investment Manager. The Fund has retained
the Investment Manager to manage the investment of the Fund's assets,
including the placing of orders for the purchase and sale of portfolio
securities. Under the terms of the Investment Management Agreement, the
Investment Manager maintains certain of the Fund's books and furnishes, at
its own expense, such office space, facilities, equipment, supplies, clerical
help and bookkeeping and certain legal services as the Fund may reasonably
require in the conduct of its business. In addition, the Investment Manager
pays the salaries of all personnel, including officers of the Fund, who are
employees of the Investment Manager. The Investment Manager also bears the
cost of the Fund's telephone service, heat, light, power and other utilities.

As full compensation for the services and facilities furnished to the Fund
and expenses of the Fund assumed by the Investment Manager, the Fund will pay
the Investment Manager monthly compensation calculated daily by applying the
annual rate of 0.35% to the Fund's daily net assets.

Shares of the Fund will be distributed by Dean Witter Distributors Inc.
(the "Distributor"), an affiliate of the Investment Manager. The Fund will
adopt a Plan of Distribution pursuant to Rule 12b-1 under the Act (the
"Plan"). The Plan provides that the Distributor will bear the expense of all
promotional and distribution related activities on behalf of the Fund,
including the payment of commissions for sales of the Fund's shares and
incentive compensation to and expenses of Dean Witter Reynolds Inc. ("DWR")
account executives and others who engage in or support distribution of shares
or who service

<PAGE>

shareholder accounts, including overhead and telephone expenses; printing and
distribution of prospectuses and reports used in connection with the offering
of the Fund's shares to other than current shareholders; and preparation,
printing and distribution of sales literature and advertising materials.

To compensate the Distributor for the services provided and for the
expenses borne by the Distributor and others under the Plan, the Fund will
pay the Distributor compensation accrued daily and payable monthly at the
annual rate of 0.35% of the Fund's average daily net assets.

Dean Witter Trust Company (the "Transfer Agent"), an affiliate of the
Investment Manager and the Distributor, is the transfer agent of the Fund's
shares, dividend disbursing agent for payment of dividends and distributions
on Fund shares and agent for shareholders under various investment plans.

The Investment Manager has undertaken to assume all operating expenses
(except for the Plan fee and brokerage fees) and waive the compensation
provided for in its investment management agreement for services rendered
until such time as the Fund has $50 million of net assets or until six months
from the date of commencement of the Fund's operations, whichever occurs
first.