Schedule 14A Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ X ]
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Check the appropriate box:

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[ ] Definitive Additional Materials
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InterCapital Quality Municipal Income Trust . . . . . . . . . . .
(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (check the appropriate box):
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INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 25, 1994

The Annual Meeting of Shareholders of INTERCAPITAL QUALITY MUNICIPAL
INCOME TRUST (the "Trust"), an unincorporated business trust organized under
the laws of the Commonwealth of Massachusetts, will be held in the Conference
Center, Sixty-First Floor, 2 World Trade Center, New York, New York 10048, on
October 25, 1994, at 9:00 A.M., New York City time, for the following
purposes:

MATTERS TO BE VOTED ON BY ALL SHAREHOLDERS:

1. To elect six (6) Trustees, four (4) to serve until the 1997 Annual
Meeting, one (1) to serve until the 1996 Annual Meeting and one (1) to
serve until the 1995 Annual Meeting or until their successors shall have
been elected and qualified;

2. To approve or disapprove continuance of the currently effective
Investment Management Agreement with Dean Witter InterCapital Inc.;

3. To ratify or reject the selection of Price Waterhouse as the
Trust's independent accountants for the fiscal year ending October 31,
1994; and

4. To transact such other business as may properly come before the
Meeting or any adjournments thereof.

Shareholders of record as of the close of business on July 29, 1994 are
entitled to notice of and to vote at the Meeting. If you cannot be present in
person, your management would greatly appreciate your filling in, signing and
returning the enclosed proxy promptly in the envelope provided for that
purpose.

In the event that the necessary quorum to transact business or the vote
required to approve or reject any proposal is not obtained at the Meeting,
the persons named as proxies may propose one or more adjournments of the
Meeting for a total of not more than 60 days in the aggregate to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of the holders of a majority of the Trust's shares present
in person or by proxy at the Meeting. The persons named as proxies will vote
in favor of such adjournment those proxies which they are entitled to vote in
favor of the proposal to approve continuance of the Investment Management
Agreement and will vote against any such adjournment those proxies required
to be voted against that proposal.

SHELDON CURTIS,
Secretary

August 5, 1994
New York, New York

IMPORTANT
YOU CAN HELP AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP LETTERS
TO ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. IF YOU ARE
UNABLE TO BE PRESENT IN PERSON, PLEASE FILL IN, SIGN AND RETURN THE ENCLOSED
PROXY IN ORDER THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE MEETING.
THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.

INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST

TWO WORLD TRADE CENTER, NEW YORK, NEW YORK 10048

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 25, 1994

This statement is furnished in connection with the solicitation of proxies
by the Board of Trustees (the "Board") of INTERCAPITAL QUALITY MUNICIPAL
INCOME TRUST (the "Trust"), for use at the Annual Meeting of Shareholders of
the Trust to be held on October 25, 1994 (the "Meeting"), and at any
adjournments thereof.

If the enclosed form of proxy is properly executed and returned in time to
be voted at the Meeting, the proxies named therein will vote the shares
represented by the proxy in accordance with the instructions marked thereon.
Unmarked proxies will be voted for each of the nominees for election as
Trustee to be elected by all Shareholders and in favor of Proposals 2 and 3
as set forth in the attached Notice of Annual Meeting of Shareholders. A
proxy may be revoked at any time prior to its exercise by any of the
following: written notice of revocation to the Secretary of the Trust,
execution and delivery of a later dated proxy to the Secretary of the Trust,
or attendance and voting at the Meeting.

Shareholders of record as of the close of business on July 29, 1994, the
record date for the determination of Shareholders entitled to notice of and
to vote at the Meeting, are entitled to one vote for each share held and a
fractional vote for a fractional share. On July 29, 1994, there were
outstanding 38,444,713 Common Shares of beneficial interest and 5,600
Preferred Shares of beneficial interest of the Trust, all with $.01 par
value. No person was known to own as much as 5% of the outstanding shares of
the Trust on that date. The Trustees and officers of the Trust, together,
owned less than 1% of the Trust's outstanding shares on that date.

The cost of soliciting proxies for the Meeting will be borne by the Trust.
The solicitation of proxies will be by mail, which may be supplemented by
solicitation by mail, telephone or otherwise through Trustees and officers of
the Trust and officers and regular employees of Dean Witter InterCapital Inc.
("InterCapital" or the "Investment Manager"), without special compensation
therefor. The first mailing of this proxy statement is expected to be made on
or about August 5, 1994.

(1) ELECTION OF TRUSTEES

The number of Trustees has been fixed by the Trustees, pursuant to the
Trust's Declaration of Trust, at twelve. At the Meeting, six Trustees are to
be elected to the Trust's Board of Trustees. There are currently twelve
Trustees, four of whom (Dr. Manuel H. Johnson, Paul Kolton, John L. Schroeder
and Edward R. Telling) are standing for election at this Meeting to serve
until the 1997 Annual Meeting, one of whom (Michael Bozic) is standing for
election at this Meeting to serve until the 1996 Meeting and one of whom
(Philip J. Purcell) is standing for election at this Meeting to serve until
the 1995 Annual Meeting in accordance with the Trust's Declaration of Trust.
At the Meeting, pursuant to the Trust's Declaration of Trust, six Trustees
are to be elected to the Trust's Board of Trustees by the holders of the
Common Shares and the Preferred Shares voting together as a single class.

Nine of the current twelve Trustees (Jack F. Bennett, Michael Bozic, Edwin
J. Garn, John R. Haire, John E. Jeuck, Manuel H. Johnson, Paul Kolton,
Michael E. Nugent, and John L. Schroeder) are "Independent Trustees", that
is, Trustees who are not "interested persons" of the Trust, as that term is
defined in the Investment Company Act of 1940, as amended (the "Act"). The
nominees for election as Trustees have been proposed by the Trustees now
serving or, in the case of the nominees for positions as Independent
Trustees, by the Independent Trustees now serving. Messrs. Bozic, Purcell and
Schroeder were elected as Trustees by the Trustees on April 8, 1994. All of
the other Trustees have been elected by the shareholders of the Trust.

The Board has two committees, an Audit Committee and a Committee of the
Independent Trustees, consisting, in both cases, of the Independent Trustees.
Mr. Haire serves as the Chairman of both Committees. There are no nominating
or compensation committees of the Board.

The functions of the Audit Committee are: recommendation to the Trustees
of the engagement or discharge of the Trust's independent accountants;
direction and supervision of investigations into matters within the scope of
the independent accountants' duties, including the power to retain outside
specialists; review with the independent accountants of the audit plan and
results of the auditing engagement; approval of each professional service,
audit and non-audit, provided by the independent accountants and other
accounting firms prior to the performance of such service; review of the
independence of the independent accountants; consideration of the range of
audit and non-audit fees; review of the adequacy of the Trust's system of
internal accounting controls; advice to the independent accountants and
personnel of management that they have direct access to the Committee at all
times; and preparation and submission of Committee meeting minutes to the
full Board.

The functions of the Committee of the Independent Trustees are:
recommendation to the full Board of approval of any management, advisory
and/or administration agreements; recommendations to the full Board of any
underwriting and/or distribution agreements; review of the fidelity bond and
premium allocation; review of errors and omissions, uncollectible items of
deposit and any other joint insurance policies and premium allocation; review
of, and monitoring of compliance with, procedures adopted pursuant to certain
rules promulgated under the Act; review of, and monitoring of compliance
with, guidelines and procedures for effecting principal transactions in
certain taxable money market instruments with Dean Witter Reynolds Inc.
("DWR"); and such other duties as the Independent Trustees shall, from time
to time, conclude are necessary to carry out their duties under the Act.

The nominees of the Board of Trustees for election as Trustees are listed
below. It is the intention of the persons named in the enclosed form of Proxy
to vote the shares represented by them for the election of these nominees:
Michael Bozic, Dr. Manuel H. Johnson, Paul Kolton, Philip J. Purcell, John L.
Schroeder and Edward R. Telling. Should any of the nominees become unable or
unwilling to accept nomination or election, the persons named in the Proxy
will exercise their voting power in favor of such person or persons as the
Board may recommend. All of the nominees have consented to being named in
this proxy statement and to serve if elected. The Trust knows no reason why
any of said nominees would be unable or unwilling to accept nomination or
election. Trustees will be elected by a plurality of the votes cast at the
meeting. Abstentions and broker "non-votes" will have the same effect as a
vote against the proposal.

Pursuant to the provisions of the Declaration of Trust, the nominees for
election as Trustees are divided into three separate classes, each class
having a term of three years. The term of office of one of each of the three
classes will expire each year.

The Board has determined that the nominees for election as Trustee shall
be standing for election as Trustee in each of the three classes of Trustee
as follows: Class I--Messrs. Bennett, Bozic, Fiumefreddo and Jeuck; Class
II--Messrs. Johnson, Kolton, Schroeder and Telling; and Class III--Messrs.
Garn, Haire, Nugent

and Purcell. Each nominee will, if elected, serve a term of up to
approximately three years running for the period assigned to that class and
terminating at the date of the annual meeting of Shareholders so designated
by the Board, or any adjournment thereof. As a consequence of this method of
election, the replacement of a majority of the Board could be delayed for up
to two years. In addition, the Board has further determined that one each of
the Class I Trustees and the Class III Trustees will be designated to be
elected by the Preferred Shareholders voting separately. In this regard,
Charles A. Fiumefreddo and John R. Haire have been designated as the nominees
to be elected to the Trust's Board of Trustees by the Preferred Shareholders,
the term of each to expire with his designated Class. In accordance with the
above, one Trustee in Class I is standing for election at this Meeting and,
if elected, will serve until the 1996 Annual Meeting or until his successor
shall have been elected and qualified, the Trustees in Class II are standing
for election at this Meeting and, if elected, will serve until the 1997
Annual Meeting or until their successors shall have been elected and
qualified and one Trustee in Class III is standing for election at this
Meeting and, if elected, will serve until the 1995 Annual Meeting or until
his successor shall have been elected and qualified.

The following information regarding each of the nominees for election as
Trustee, and each of the other members of the Board, includes his principal
occupations and employment for at least the last five years, his age, shares
of the Trust owned, if any, as of July 29, 1994 (shown in parentheses),
positions with the Trust, and directorships or trusteeships in other
companies which file periodic reports with the Securities and Exchange
Commission, including other investment companies for which InterCapital
serves as investment manager or investment adviser, namely, InterCapital
Income Securities Inc., InterCapital Insured Municipal Bond Trust,
InterCapital Quality Municipal Investment Trust, InterCapital Insured
Municipal Trust, InterCapital Insured Municipal Income Trust, InterCapital
California Insured Municipal Income Trust, InterCapital Quality Municipal
Securities, InterCapital Quality Municipal Investment Trust, InterCapital
California Quality Municipal Securities, InterCapital New York Quality
Municipal Securities, InterCapital Insured Municipal Securities, InterCapital
Insured California Municipal Securities, Dean Witter High Yield Securities
Inc., Dean Witter Liquid Asset Fund Inc., Dean Witter Variable Investment
Series, Dean Witter Select Municipal Reinvestment Fund, Dean Witter U.S.
Government Money Market Trust, Dean Witter U.S. Government Securities Trust,
Dean Witter Tax-Exempt Securities Trust, Dean Witter Tax-Free Daily Income
Trust, Dean Witter American Value Fund, Dean Witter Convertible Securities
Trust, Dean Witter Dividend Growth Securities Inc., Dean Witter Global
Short-Term Income Fund Inc., Dean Witter Natural Resource Development
Securities Inc., Dean Witter Pacific Growth Fund Inc., Dean Witter Federal
Securities Trust, Dean Witter World Wide Investment Trust, Dean Witter
Developing Growth Securities Trust, Dean Witter California Tax-Free Income
Fund, Dean Witter New York Tax-Free Income Fund, Dean Witter Strategist Fund,
Dean Witter Managed Assets Trust, Dean Witter Value-Added Market Series, Dean
Witter Utilities Fund, Dean Witter California Tax-Free Daily Income Trust,
High Income Advantage Trust, High Income Advantage Trust II, High Income
Advantage Trust III, Dean Witter World Wide Income Trust, Dean Witter
Intermediate Income Securities, Dean Witter European Growth Fund Inc., Dean
Witter Precious Metals and Minerals Trust, Dean Witter Capital Growth
Securities, Dean Witter New York Municipal Money Market Trust, Dean Witter
Multi-State Municipal Series Trust, Dean Witter Short-Term U.S. Treasury
Trust, Active Assets California Tax-Free Trust, Active Assets Money Trust,
Active Assets Tax-Free Trust, Active Assets Government Securities Trust, Dean
Witter Diversified Income Trust, Dean Witter Health Sciences Trust, Dean
Witter Retirement Series, Dean Witter Global Dividend Growth Securities, Dean
Witter Limited Term Municipal Trust, Dean Witter Government Income Trust,
Dean Witter Premier Income Trust, 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, Municipal Premium Income Trust, Dean Witter
Short-Term Bond Fund, Dean Witter Global Utilities Fund, Dean Witter National
Municipal Trust, Dean Witter High Income Securities and Dean Witter
International SmallCap Fund

(these investment companies, including the Trust, are referred to herein
collectively as the "Dean Witter Funds"), and 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 Growth Fund, TCW/DW
Balanced Fund, TCW/DW North American Intermediate Income Trust, TCW/DW
Emerging Markets Opportunities Trust, TCW/DW Term Trust 2000, TCW/DW Term
Trust 2002 and TCW/DW Term Trust 2003 (the "TCW/DW Funds").

The nominees for Trustees to be elected at the Meeting by all Shareholders
are:

MICHAEL BOZIC, Trustee since April, 1994; age 53; President and Chief
Executive Officer of Hills Department Stores (since May, 1991); formerly
Chairman and Chief Executive Officer (January, 1987-August, 1990) and
President and Chief Operating Officer (August, 1990-February, 1991) of the
Sears Merchandise Group of Sears, Roebuck and Co.; Director or Trustee of the
Dean Witter Funds; Director of Harley Davidson Credit Inc., the United Negro
College Fund and Domain Inc. (home decor retailer).

DR. MANUEL H. JOHNSON, Trustee since July, 1991; age 45; Senior Partner
Johnson Smick International, Inc., a consulting firm (since June, 1985); Koch
Professor of International Economics and Director of the Center for Global
Market Studies at George Mason University (since September, 1990);
Co-Chairman and a founder of the Group 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
Greenwich Capital Markets Inc. (broker-dealer); formerly Vice Chairman of the
Board of Governors of the Federal Reserve System (February, 1986-August,
1990) and Assistant Secretary of the U.S. Treasury (1982-1986).

PAUL KOLTON, Trustee since July, 1991; age 71; Director or Trustee of the
Dean Witter Funds; Chairman of the Audit Committee and Chairman of the
Committee of the Independent Trustees and Trustee of the TCW/DW Funds;
formerly Chairman of Financial Accounting Standards Advisory Council and
Chairman and Chief Executive Officer of the American Stock Exchange; Director
of UCC Investors Holding Inc. (Uniroyal Chemical Company, Inc.); Director or
Trustee of various not-for-profit organizations.

PHILIP J. PURCELL,* Trustee since April, 1994; age 50; Chairman of the
Board of Directors and Chief Executive Officer of Dean Witter, Discover & Co.
("DWDC"), DWR and Novus Credit Services Inc.; Director of InterCapital, Dean
Witter Services Company, Inc. ("DWSC") and Dean Witter Distributors Inc.
("Distributors"); Director or Trustee of the Dean Witter Funds; Director
and/or officer of various Dean Witter, Discover & Co. ("DWDC") subsidiaries.

JOHN L. SCHROEDER, Trustee since April, 1994; age 64; Executive Vice
President and Chief Investment Officer of the Home Insurance Company (since
August, 1991); Director or Trustee of the Dean Witter Funds; Director of
Citizens Utilities Company; formerly Chairman and Chief Investment 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).

EDWARD R. TELLING,* Trustee since July, 1991; age 75; Retired; Director or
Trustee of the Dean Witter Funds; formerly Chairman of the Board of Directors
and Chief Executive Officer (1978-1985) and President (January, 1981-March,
1982 and February, 1984-August, 1984) of Sears, Roebuck and Co. ("Sears");
formerly Director of Sears.

The Trustees who are not standing for reelection at the Meeting are:

JACK F. BENNETT, Trustee since July, 1991; age 70; Retired; Director or
Trustee of the Dean Witter Funds; formerly Senior Vice President and Director
of Exxon Corporation (1975-1989) and Under Secretary

of the U.S. Treasury for Monetary Affairs (1974-1975); Director of Philips
Electronics N.V., Tandem Computers Inc. and Massachusetts Mutual Insurance
Co.; Director or Trustee of various not-for-profit and business
organizations.

CHARLES A. FIUMEFREDDO,* Trustee since June, 1991; age 61; Chairman,
Chief Executive Officer and Director of InterCapital, DWSC and Distributors;
Executive Vice President and Director of DWR; Chairman, Director or Trustee,
President and Chief Executive Officer of the Dean Witter Funds; Chairman,
Chief Executive Officer and Trustee of the TCW/DW Funds; Chairman and
Director of Dean Witter Trust Company ("DWTC") (since October, 1989);
formerly Executive Vice President and Director of DWDC (until February,
1993); Director of various DWDC subsidiaries.

EDWIN JACOB (JAKE) GARN, Trustee since January, 1993; age 61; Director or
Trustee of the Dean Witter Funds; formerly United States Senator (R-Utah)
(1974-1992) and Chairman, Senate Banking Committee (1980-1986); formerly
Mayor of Salt Lake City, Utah (1971-1974); formerly Astronaut, Space Shuttle
Discovery (April 12-19, 1985); Vice Chairman, Huntsman Chemical Corporation
(since January, 1993); Member of the board of various civic and charitable
organizations.

JOHN R. HAIRE, Trustee since July, 1991; age 69; Chairman of the Audit
Committee and Chairman of the Committee of the Independent Directors or
Trustees and Director or Trustee of the Dean Witter Funds; Trustee of the
TCW/DW Funds; formerly 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) and Bowne & Co., Inc. (printing).

DR. JOHN E. JEUCK, Trustee since July, 1991; age 77; retired; Director or
Trustee of the Dean Witter Funds; formerly Robert Law Professor of Business
Administration, Graduate School of Business, University of Chicago; Business
consultant.

MICHAEL E. NUGENT, Trustee since July, 1991; age 58; General Partner,
Triumph Capital, L.P., a private investment partnership (since April, 1988);
Director or Trustee of the Dean Witter Funds; Trustee of the TCW/DW Funds;
formerly Vice President, Bankers Trust Company and BT Capital Corporation
(September, 1984-March, 1988); Director of various business organizations.

The executive officers of the Trust other than shown above are: Sheldon
Curtis, Vice President, Secretary and General Counsel; Robert M. Scanlan,
Vice President; David A. Hughey, Vice President; Edmund C. Puckhaber, Vice
President; James F. Willison, Vice President; and Thomas F. Caloia,
Treasurer. In addition, Peter M. Avelar, Jonathan R. Page, Katherine H.
Stromberg and Joseph Arcieri are Vice Presidents of the Trust and Marilyn K.
Cranney, Barry Fink, Lawrence S. Lafer, Lou Anne D. McInnis and Ruth Rossi
serve as Assistant Secretaries. Mr. Curtis is 62 years old and is currently
Senior Vice President and General Counsel of InterCapital and DWSC and
Assistant Secretary of DWR and DWDC; he is also Senior Vice President,
Assistant Secretary and Assistant General Counsel of Distributors and Senior
Vice President and Secretary of DWTC. Mr. Scanlan is 58 years old and is
currently President and Chief Operating Officer of InterCapital (since March,
1993) and DWSC; he is also Executive Vice President of Distributors and
Executive Vice President and Director of DWTC. He was previously Executive
Vice President of InterCapital (November, 1990-March, 1993) and prior thereto
was Chairman of Harborview Group Inc. Mr. Hughey is 62 years old and is
currently Executive Vice President and Chief Administrative Officer of
InterCapital and DWSC; he is also

- - ---------------
* Messrs. Fiumefreddo, Purcell and Telling may be deemed "interested
persons" as defined in Section 2(a)(19) of the Act, of the Trust and its
Investment Manager due to their affiliation with the Investment Manager
and/or its affiliated companies.

Executive Vice President and Chief Administrative Officer of Distributors and
of DWTC as well as a Director of DWTC. He was previously President of DWTC
(October, 1989-March, 1993). Mr. Willison is 50 years old and is currently
Senior Vice President of InterCapital. Mr. Caloia is 47 years old and is
currently First Vice President of InterCapital and Assistant Treasurer of
InterCapital and DWSC. Mr. Avelar is 34 years old and is currently Senior
Vice President of InterCapital. He was previously employed by PaineWebber
Asset Management as a senior portfolio manager (March, 1989-December, 1990)
and by Delaware Investment Advisers as a senior portfolio manager (June,
1987-March, 1989). Mr. Page is 47 years old and is currently Senior Vice
President of InterCapital. Ms. Stromberg is 46 years old and is currently
Vice President of InterCapital (since April, 1992). She was formerly a
portfolio manager with InterCapital (October, 1991-April, 1992) and Vice
President of Kidder Peabody Asset Management (October, 1985-October, 1991).
Mr. Arcieri is 46 years old and is currently Vice President of InterCapital.
Other than Mr. Scanlan, Mr. Avelar and Ms. Stromberg, each of the above
officers has been an employee of InterCapital or DWR (formerly the corporate
parent of InterCapital) for over five years.

Messrs. Fiumefreddo, Purcell and Telling, who serve as Trustees of the
Trust, and certain other officers of the Trust own securities of DWDC which,
in the aggregate, constitute less than 1% of the securities of each class
outstanding.

Each of the Independent Trustees is paid by the Trust an annual retainer
fee of $1,200 plus $50 for each meeting of the Board, the Audit Committee or
the Committee of the Independent Trustees attended by the Trustee in person
(the Trust pays the Chairman of the Audit Committee an additional annual fee
of $1,000 and pays 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), together with any out-of-pocket expenses incurred by them in
connection with attendance at any such meetings. The Trust pays no
remuneration to any Trustee who is not an Independent Trustee or to any of
the Trust's officers. For the fiscal period ended October 31, 1993, the Trust
accrued a total of $21,554 for Trustees' fees and expenses. Commencing
January 1, 1994, the Trust has adopted a retirement program under which an
Independent Trustee who retires after a minimum required period of service
would be entitled to retirement payments upon reaching the eligible
retirement date (normally, after attaining age 72) based upon length of
service and computed as a percentage of one-fifth of the total compensation
earned by such Trustee for service to the Trust in the five-year period prior
to the date of the Trustee's retirement. During the fiscal period ended
October 31, 1993, the Board held five meetings, and the Audit Committee and
the Committee of the Independent Trustees, which are both presently comprised
of the nine Independent Trustees, held three meetings and ten meetings,
respectively. During the fiscal period ended October 31, 1993, no Trustee
attended fewer than 75% of the meetings of the Board, the Audit Committee and
the Committee of the Independent Trustees held while he served in such
positions.

(2) APPROVAL OR DISAPPROVAL OF CURRENTLY EFFECTIVE
INVESTMENT MANAGEMENT AGREEMENT

The Trust's investments are managed by Dean Witter InterCapital Inc.
(referred to herein as the "Investment Manager" or "InterCapital"), pursuant
to an Investment Management Agreement dated June 30, 1993 (referred to herein
as the "Management Agreement") which took effect upon the distribution by
Sears, Roebuck and Co. ("Sears") to its shareholders of all the common shares
of DWDC (the parent company of InterCapital and DWR) then owned by Sears.

The Management Agreement was approved by the Board of Trustees on October
30, 1992, and by the shareholders of the Trust at a Special Meeting of
Shareholders held on January 13, 1993. The present Management Agreement
supersedes an earlier management agreement originally entered into by the
Trust with DWR, through its InterCapital Division, and initially approved by
the Board, including a majority of the Independent Trustees, on April 29,
1992. In an internal reorganization which took place in January, 1993,

InterCapital assumed the investment management activities previously
performed by the InterCapital Division of DWR. The assumption by InterCapital
of DWR's rights and obligations under this earlier management agreement in
connection with the reorganization was approved by the Trustees at a meeting
held on October 30, 1992 and also by the shareholders of the Trust at a
Special Meeting of Shareholders on January 13, 1993.

The terms of the Management Agreement, including fees payable by the Trust
thereunder, are substantially identical in all respects to those of the
Management Agreement except for the dates of effectiveness and expiration and
the name of the Investment Manager. The terms of the Management Agreement are
described below. The Management Agreement's continuation until April 30, 1995
was approved by the Trustees, including a majority of the Independent
Trustees at a meeting of the Board held on April 8, 1994. In the event
shareholders do not approve continuance of the Management Agreement by the
required majority vote at the forthcoming meeting or any adjournment thereof,
the Board of Trustees of the Trust will take such action as it deems to be in
the best interest of the Trust and its shareholders, which may include
calling a special meeting of shareholders to vote on a new investment
advisory agreement.

In considering whether or not to approve the Management Agreement, the
Board of Trustees reviewed the terms of the agreement and considered all
materials and information deemed relevant to its determination. Among other
things, the Board considered the nature and scope of services to be rendered,
the quality of the Manager's services and personnel, and the appropriateness
of the fees that are paid under the Management Agreement. Based upon its
review, the Board of Trustees, including all of the Independent Trustees,
determined that the approval of the Management Agreement was in the best
interests of the Trust and its shareholders.

The favorable vote of a majority of the outstanding voting securities of
the Trust is required for the approval of the Management Agreement. Such a
majority is defined in the Act as the lesser of: (a) 67% or more of the
shares present at the Meeting, if the holders of more than 50% of the
outstanding shares of the Trust are present or represented by proxy, or (b)
more than 50% of the outstanding shares.

THE MANAGEMENT AGREEMENT

The Management Agreement provides that the Investment Manager shall obtain
and evaluate such information and advice relating to the economy, securities
and commodity markets and securities and commodities as it deems necessary or
useful to discharge its duties under the Management Agreement, and that it
shall continuously supervise the management of the assets of the Trust in a
manner consistent with the investment objectives and policies of the Trust
and subject to such other limitations and directions as the Board may, from
time to time, prescribe.

Under the Management Agreement, the Trust is obligated to bear all of the
costs and expenses of its operation, except those specifically assumed by the
Investment Manager, including, without limitation: charges and expenses of
any registrar, custodian or depository appointed by the Trust for the
safekeeping of its cash, portfolio securities or commodities and other
property, and any stock transfer or dividend agent or agents appointed by the
Trust; brokers' commissions chargeable to the Trust in connection with
portfolio securities transactions to which the Trust is a party; all taxes,
including securities or commodities issuance and transfer taxes, and
corporate fees payable by the Trust to federal, state or other governmental
agencies; costs and expenses of engraving or printing of certificates
representing shares of the Trust; all costs and expenses in connection with
registration and maintenance of registration of the Trust and of its shares
with the Securities and Exchange Commission and various states and other
jurisdictions (including filing fees and legal fees and disbursements of
counsel); the cost and expense of printing, including typesetting, and
distributing prospectuses of the Trust to its Shareholders; all expenses of
Shareholders' and Trustees' meetings and of preparing, printing and mailing
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 the payment of any dividend, distribution, withdrawal or
redemption, whether in shares or in cash; charges and expenses of any outside
service used for the pricing of the Trust's shares; charges and expenses of
legal counsel, including counsel to the Independent Trustees of the Trust,
and independent accountants in connection with any matter relating to the
Trust (not including compensation or expenses of attorneys employed by the
Investment Manager); association dues; interest payable on the Fund's
borrowings; fees and expenses incident to the listing of the Trust's shares
on any stock exchange; postage; insurance premiums on property or personnel
(including officers and Trustees) of the Fund which inure to its benefit; and
extraordinary expenses (including, but not limited to, legal claims and
liabilities and litigation costs and any indemnification related thereto);
and all other charges and costs of the Fund's operations unless otherwise
explicitly provided in the Management Agreement.

The Management Agreement provides that the Investment Manager shall
continuously manage the assets of the Trust in a manner consistent with the
Trust's investment objectives. The Investment Manager has authority to place
orders for the purchase and sale of portfolio securities on behalf of the
Trust without prior approval of its Trustees. The Trustees review the
investment portfolio at their regular meetings. In addition, the Investment
Manager pays the compensation of the officers of the Trust and provides the
Trust with office space and equipment, and clerical and bookkeeping services
and telephone service, heat, light, power and other utilities. The Investment
Manager also pays for the services of personnel in connection with the
pricing of the Trust's shares and 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 return for its services and the expenses the
Investment Manager assumes under the Management Agreement, the Trust pays the
Investment Manager compensation which is accrued daily and payable monthly
and which is determined by applying the annual rate of 0.35% to the Trust's
average weekly net assets. For the fiscal period ended October 31, 1993, the
Trust accrued to the Investment Manager total compensation of $3,069,133. The
net assets of the Trust totalled $924,910,063 at October 31, 1993.

The Management Agreement provides that it shall continue in effect until
April 30, 1994 and that, after the initial period of effectiveness, it will
continue in effect from year to year thereafter provided such continuance is
approved at least annually by vote of a majority, as defined in the act, of
the outstanding voting securities of the Trust or by the Trustees of the
Trust, and, in either event, by the vote cast in person by a majority of the
Trustees who are not parties to the Management Agreement or "interested
persons" of any such party (as defined in the Act) at a meeting called for
the purpose of voting on such approval. The Management Agreement's
continuation until April 30, 1995 was approved by the Trustees, including a
majority of the Independent Trustees, at a Meeting of the Trustees held on
April 8, 1994, called for the purpose of approving the Management Agreement.

The Management Agreement also provides that it may be terminated at any
time by the Investment Manager, the Trustees or by a vote of a majority of
the outstanding voting securities of the Trust, in each instance without the
payment of any penalty, on thirty days' notice and provides for its automatic
termination in the event of its assignment.

Effective December 31, 1993, pursuant to a Services Agreement between
InterCapital and its wholly-owned subsidiary, Dean Witter Services Company
Inc. ("DWSC"), DWSC began to provide the administrative services to the Trust
which were previously performed directly by InterCapital. The foregoing
internal reorganization did not result in any change in the nature or scope
of the administrative services being provided to the Trust or any of the fees
being paid by the Trust for the overall services being performed under the
terms of the Management Agreement.

THE INVESTMENT MANAGER

Dean Witter InterCapital Inc. is the Trust's investment manager.
InterCapital maintains its offices at Two World Trade Center, New York, New
York 10048. InterCapital, which was incorporated in July, 1992, is a
wholly-owned subsidiary Dean Witter, Discover & Co. ("DWDC"), a balanced
financial services organization providing a broad range of nationally
marketed credit and investment products. As noted above, in an internal
reorganization which took place in January, 1993, InterCapital assumed the
investment advisory, management and administrative activities previously
performed by the InterCapital Division of DWR. InterCapital also manages and
advises or administers portfolios of other investment companies and pension
plans and other institutional and individual investors.

The Principal Executive Officer and Directors of InterCapital, and their
principal occupations, are:

Philip J. Purcell, Chairman of the Board of Directors and Chief Executive
Officer of DWDC and DWR and Director of InterCapital, DWSC and Distributors;
Richard M. DeMartini, President and Chief Operating Officer of Dean Witter
Capital and Director of DWDC, DWR, Distributors, DWSC and InterCapital; James
F. Higgins, President and Chief Operating Officer of Dean Witter Financial
and Director of DWDC, DWR, Distributors, InterCapital and DWSC; Charles A.
Fiumefreddo, Executive Vice President and Director of DWR and Chairman of the
Board of Directors and Chief Executive Officer and Director of InterCapital,
DWSC and Distributors; Christine A. Edwards, Executive Vice President,
Secretary, General Counsel and Director of DWDC, DWR and Distributors, and
Director of InterCapital and DWSC; and Thomas C. Schneider, Executive Vice
President, Chief Financial Officer and Director of DWR, Distributors and
InterCapital and DWSC.

The business address of the foregoing Directors and Executive Officers is
Two World Trade Center, New York, New York 10048.

InterCapital and its wholly-owned subsidiary, DWSC, serve in various
investment management, advisory, management and administrative capacities to
investment companies and pension plans and other institutional and individual
investors. The Appendix lists the investment companies for which InterCapital
provides investment management or investment advisory services and sets forth
the net assets and fees payable by such companies.

DWDC has its offices at Two World Trade Center, New York, New York 10048.
There are various lawsuits pending against DWDC involving material amounts
which, in the opinion of its management, will be resolved with no material
effect on the consolidated financial position of the company.

During the fiscal period ended October 31, 1993, the Fund accrued to Dean
Witter Trust Company, the Trust's Transfer Agent and an affiliate of the
Investment Manager, transfer agency fees of $30,082.

PORTFOLIO TRANSACTIONS AND BROKERAGE

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 advisor to others. It is the practice of the
Investment Manager to cause purchase and sale transactions to be allocated
among the Trust and others whose assets it manages in such manner as it deems
equitable. In making such allocations among the Trust 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 Trust and other client accounts.

Subject to the general supervision of the Board of Trustees, the
Investment Manager is responsible for decisions to buy and sell securities
for the Trust, the selection of brokers and dealers to effect the
transactions,

and the negotiation of brokerage commissions, if any. The Trust expects that
the primary market for the securities in which it invests will generally be
the over-the-counter market. Securities are generally traded on the
over-the-counter market on a "net" basis with non-affiliated dealers acting
as principal for their own accounts without a stated commission, although the
price of the security usually includes a profit to the dealer. Options and
futures transactions will usually be effected through a broker and a
commission will be charged. Purchases of money market instruments are made
from dealers, underwriters and issuers; sales, if any, prior to maturity are
made to dealers and issuers and the Trust does not normally incur any
brokerage commission expense on such transactions. Money market instruments
are generally traded on a "net" basis with dealers acting as principal for
their own accounts without a stated commission, although the price of the
security usually includes a profit to the dealer. The Trust also expects that
securities will be purchased at times in underwritten offerings where the
price includes a fixed amount of compensation to the underwriter, generally
referred to as the underwriter's concession or discount.

The policy of the Trust, regarding purchases and sales of securities for
its portfolio is that primary consideration be given to obtaining the most
favorable price and efficient execution of transactions. In seeking to
implement the Trust's policy, the Investment Manager will effect 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 price and execution are obtainable
from more than one broker or dealer, it may give consideration to placing
portfolio transactions with those brokers and dealers who also furnish
research and other services to the Trust 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
investments, wire services and appraisals or evaluations of portfolio
securities. Such 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 or all of their other clients and may not in
all cases benefit the Trust directly. While such services are useful and
important in supplementing its own research facilities, the Investment
Manager believes the value of such services is not determinable and does not
significantly reduce its expenses. The Trust does not reduce the management
fees it pays to the Investment Manager by any amount that may be attributable
to the value of such services. In transactions effected with a dealer, acting
as principal, who furnishes research services to the Trust, the Trust will
not purchase securities at a higher price, or sell securities at a lower
price, than would be the case if the dealer had not furnished such services.
During the fiscal period ended October 31, 1993, the Trust paid no brokerage
commissions. During the same period, the portfolio turnover rate was 4%.

Pursuant to an Order of the Securities and Exchange Commission, the Trust
may effect principal transactions in certain money market instruments with
DWR. The Trust will limit its transactions with DWR to U.S. Government and
government agency securities, bank money instruments (i.e., certificates of
deposit and bankers' acceptances) and commercial paper. 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 policies 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 Trust, 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 Trust, including a majority of its
Independent 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. During the fiscal period ended
October 31, 1993, the Trust did not pay any brokerage commissions to DWR.

(3) RATIFICATION OR REJECTION OF SELECTION OF INDEPENDENT ACCOUNTANTS

The Trustees have unanimously selected the firm of Price Waterhouse as the
Trust's independent accountants for the fiscal year ending October 31, 1994.
Price Waterhouse has been the independent accountants for the Trust since its
inception, and has no direct or indirect financial interest in the Trust.

A representative of Price Waterhouse is expected to be present at the
Meeting and will be available to make a statement, if he or she so desires,
and to respond to appropriate questions of Shareholders.

The affirmative vote of the holders of a majority of the shares
represented and entitled to vote at the Annual Meeting is required for
ratification of the selection of Price Waterhouse as the independent
accountants for the Trust. Abstentions and broker "non-votes" will have the
same effect as a vote against the proposal.

THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS RATIFY THE SELECTION OF
PRICE WATERHOUSE AS THE INDEPENDENT ACCOUNTANTS FOR THE TRUST.

ADDITIONAL INFORMATION

In the event that the necessary quorum to transact business or the vote
required to approve or reject any proposal is not obtained at the Meeting,
the persons named as proxies may propose one or more adjournments of the
Meeting for a total of not more than 60 days in the aggregate to permit
further solicitation of proxies. Any such adjournment will require the
affirmative vote of the holders of a majority of the Trust's shares present
in person or by proxy at the Meeting. The persons named as proxies will vote
in favor of such adjournment those proxies which they are entitled to vote in
favor of Proposal Two and will vote against any such adjournment these
proxies required to be voted against that proposal.

SHAREHOLDERS PROPOSALS

Proposals of security holders intended to be presented at the next Annual
Meeting of Shareholders must be received no later than June 15, 1995, for
inclusion in the proxy statement for that meeting.

OTHER BUSINESS

The management knows of no other matters which may be presented at the
Meeting. However, if any matters not now known properly come before the
Meeting, it is the intention of the persons named in the enclosed form of
proxy to vote all shares that they are entitled to vote on any such matter,
utilizing such proxy in accordance with their best judgment on such matters.

FINANCIAL STATEMENTS OF THE INVESTMENT MANAGER

The balance sheet of InterCapital, as of December 31, 1993, annexed hereto
as an Exhibit, is required by Rule 20a-2 under the Act. THIS IS NOT A
FINANCIAL STATEMENT OF THE TRUST. The Trust's financial statements are set
forth in its Annual Report for the fiscal period ended October 31, 1993,
copies of which were previously sent to Shareholders.

By Order of the Board of Trustees
SHELDON CURTIS
Secretary

APPENDIX

InterCapital serves as investment manager or investment adviser to the
following investment companies, with the net assets shown as of July 29,
1994:

(1) Dean Witter High Yield Securities Inc., with assets of approximately
$500 million, for an investment management fee at an annual rate of 0.50% on
assets up to $500 million, scaled down at various asset levels to 0.30% on
assets over $3 billion; (2) Dean Witter Liquid Asset Fund Inc., with assets
of approximately $8.6 billion, for an investment management fee at an annual
rate of 0.50% on assets up to $500 million, scaled down at various asset
levels to 0.248% on assets over $17.5 billion; (3) Dean Witter Tax-Exempt
Securities Trust, with assets of approximately $1.4 billion, for an
investment management fee at an annual rate of 0.50% on assets up to $500
million, scaled down at various assets levels to 0.325% on assets over $1.25
billion; (4) Dean Witter Tax-Free Daily Income Trust, with assets of
approximately $604 million, for an investment management fee at an annual
rate of 0.50% on assets up to $500 million, scaled down at various asset
levels to 0.25% on assets over $3 billion; (5) Dean Witter American Value
Fund, with assets of approximately $1.4 billion, for an investment management
fee at an annual rate of 0.625% on assets up to $250 million and 0.50% on
assets over $250 million; (6) Dean Witter Dividend Growth Securities Inc.,
with assets of approximately $6.8 billion, for an investment management fee
at an annual rate of 0.625% on assets up to $250 million, scaled down at
various asset levels to 0.325% on assets over $8 billion; (7) Dean Witter
Variable Investment Series, with assets of approximately $2.7 billion, for an
investment management fee at an annual rate of 1.0% (of which 40% is paid to
a Sub-Adviser) of the net assets of each of the European Growth Portfolio and
the Pacific Growth Portfolio, 0.75% of the net assets of the Global Dividend
Growth Portfolio, 0.65% of the net assets of the Capital Growth Portfolio,
0.65% of the net assets of the Utilities Portfolio up to $500 million and
0.55% of the net assets of the Portfolio over $500 million, 0.625% of the net
assets of the Dividend Growth Portfolio up to $500 million and 0.50% of the
net assets of the Portfolio over $500 million, and 0.50% of the net assets of
each of the other five Portfolios; (8) Dean Witter Select Municipal
Reinvestment Fund, with assets of approximately $93 million, for an
investment management fee at an annual rate of 0.50%; (9) Active Assets Money
Trust, with assets of approximately $4.4 billion, for an investment
management fee at an annual rate of 0.50% on assets up to $500 million,
scaled down at various asset levels to 0.25% on assets over $3 billion; (10)
Active Assets Tax-Free Trust, with assets of approximately $1.5 billion, for
an investment management fee at an annual rate of 0.50% on assets up to $500
million, scaled down at various asset levels to 0.25% on assets over $3
billion; (11) Active Assets California Tax-Free Trust, with assets of
approximately $282 million, for an investment management fee of 0.50% on
assets up to $500 million, scaled down at various levels to 0.25% on assets
over $3 billion; (12) Active Assets Government Securities Trust, with assets
of approximately $512 million, for an investment management fee at an annual
rate of 0.50% on assets up to $500 million, scaled down at various asset
levels to 0.25% on assets over $3 billion; (13) Dean Witter Natural Resource
Development Securities Inc., with assets of approximately $147 million, for
an investment management fee at an annual rate of 0.625% on assets up to $250
million and 0.50% on assets over $250 million; (14) Dean Witter U.S.
Government Money Market Trust, with assets of approximately $769 million, for
an investment management fee at an annual rate of 0.50% on assets up to $500
million, scaled down at various asset levels to 0.25% on assets over $3
billion; (15) Dean Witter Developing Growth Securities Trust, with assets of
approximately $307 million, for an investment management fee at an annual
rate of 0.50% on assets up to $500 million and 0.475% on assets over $500
million; (16) Dean Witter U.S. Government Securities Trust, with assets of
approximately $10.1 billion, for an investment management fee at an annual
rate of 0.50% on assets up to $1 billion, scaled down at various asset levels
to 0.30% on assets over $12.5 billion; (17) Dean Witter California Tax-Free
Income Fund, with assets of approximately $1.1 billion, for an investment
management fee at an annual rate of 0.55% on assets up to $500 million,
scaled down at various asset levels to 0.475% on assets over $1 billion; (18)
Dean Witter New York Tax-Free Income Fund, with assets of approximately $231
million, for an investment management fee at an annual rate of 0.55% on
assets up to

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$500 million and 0.525% on assets over $500 million; (19) Dean Witter
Convertible Securities Trust, with assets of approximately $190 million, for
an investment management fee at an annual rate of 0.60% on assets up to $750
million, scaled down at various asset levels to 0.425% on assets over $3
billion; (20) Dean Witter Federal Securities Trust, with assets of
approximately $927 million, for an investment management fee at an annual
rate of 0.55% on assets up to $1 billion, scaled down at various asset levels
to 0.35% on assets over $12.5 billion; (21) InterCapital Income Securities
Inc., with assets of approximately $212 million, for an investment management
fee at an annual rate of 0.50%; (22) Dean Witter Value-Added Market Series,
with assets of approximately $475 million, for an investment management fee
at an annual rate of 0.50% on assets up to $500 million and 0.45% on assets
over $500 million; (23) Dean Witter Utilities Fund, with assets of
approximately $3.3 billion, for an investment management fee at an annual
rate of 0.65% on assets up to $500 million, scaled down at various asset
levels to 0.425% on assets over $5 billion; (24) Dean Witter California
Tax-Free Daily Income Trust, with assets of approximately $604 million, for
an investment management fee at an annual rate of 0.50% on assets up to $500
million, scaled down at various asset levels to 0.25% on assets over $3
billion; (25) Dean Witter Managed Assets Trust, with assets of approximately
$305 million, for an investment management fee at an annual rate of 0.60% on
assets up to $500 million and 0.55% on assets over $500 million; (26) High
Income Advantage Trust, with assets of approximately $504 million, for an
investment management fee at an annual rate of 0.75% on assets up to $250
million, scaled down at various asset levels to 0.30% on assets over $1
billion; (27) High Income Advantage Trust II, with assets of approximately
$225 million, for an investment management fee at an annual rate of 0.75% on
assets up to $250 million, scaled down at various asset levels to 0.30% on
assets over $1 billion; (28) High Income Advantage Trust III, with assets of
approximately $86 million, for an investment management fee at an annual rate
of 0.75% on assets up to $250 million, scaled down at various asset levels to
0.30% on assets over $1 billion; (29) Dean Witter Strategist Fund, with
assets of approximately $806 million, for an investment management fee at an
annual rate of 0.60% on assets up to $500 million, scaled down at various
asset levels to 0.50% on assets over $1 billion; (30) Dean Witter
Intermediate Income Securities, with assets of approximately $246 million,
for an investment management fee at an annual rate of 0.60% on assets up to
$500 million, scaled down at various asset levels to 0.30% on assets over $1
billion; (31) Dean Witter World Wide Income Trust, with assets of
approximately $201 million, for an investment management fee at an annual
rate of 0.75% on assets up to $250 million, scaled down at various asset
levels to 0.30% on assets over $1 billion; (32) Dean Witter Government Income
Trust, with assets of approximately $504 million, for an investment
management fee at an annual rate of 0.60%; (33) Dean Witter New York
Municipal Money Market Trust, with assets of approximately $44 million, for
an investment management fee at an annual rate of 0.50% on assets up to $500
million, scaled down at various asset levels to 0.25% on assets over $3
billion; (34) Dean Witter European Growth Fund Inc., with assets of
approximately $693 million, for an investment management fee at an annual
rate of 1.0% on assets up to $500 million and 0.95% on assets over $500
million (of which 40% is paid to a Sub-Adviser); (35) Dean Witter Capital
Growth Securities, with assets of approximately $485 million, for an
investment management fee at an annual rate of 0.65% on assets up to $500
million, scaled down at various asset levels to 0.475% on assets over $1.5
billion; (36) Dean Witter Precious Metals and Minerals Trust, with assets of
approximately $68 million, for an investment management fee at an annual rate
of 0.80%; (37) Dean Witter Global Short-Term Income Fund Inc., with assets of
approximately $198 million, for an investment management fee at an annual
rate of 0.55% on assets up to $500 million and 0.50% on assets over $500
million; (38) Dean Witter Pacific Growth Fund Inc., with assets of
approximately $1.4 billion, for an investment management fee at an annual
rate of 1.0% on assets up to $1 billion and 0.95% on assets over $1 billion
(of which 40% is paid to a Sub-Adviser); (39) InterCapital Insured Municipal
Bond Trust, with assets of approximately $119 million, for an investment
management fee at an annual rate of 0.35%; (40) InterCapital Quality
Municipal Investment Trust, with assets of approximately $418 million, for an
investment management fee at an annual rate of 0.35%; (41) InterCapital
Insured Municipal Trust, with assets of approximately $540 million, for an
investment management fee at an annual rate of 0.35%; (42) InterCapital
Quality Municipal

I-2

Income Trust, with assets of approximately $847 million, for an investment
management fee at an annual rate of 0.35%; (43) Dean Witter Multi-State
Municipal Series Trust, with assets of approximately $466 million, for an
investment management fee at an annual rate of 0.35% of the net assets of
each Series; (44) Dean Witter Premier Income Trust, with assets of
approximately $51 million, for an investment management fee at an annual rate
of 0.50% (of which 40% is paid to a Sub-Adviser); (45) Dean Witter Short-Term
U.S. Treasury Trust, with assets of approximately $463 million, for an
investment management fee at an annual rate of 0.35%; (46) Dean Witter
Diversified Income Trust, with assets of approximately $392 million, for an
investment management fee at an annual rate of 0.40%; (47) Dean Witter Health
Sciences Trust, with assets of approximately $229 million, for an investment
management fee at an annual rate of 1.0%; (48) Dean Witter Retirement Series,
with assets of approximately $38 million, for an investment management fee at
an annual rate of 1.0% of the net assets of the Global Equity Series, 0.85%
of the net assets of each of the American Value Series, the Capital Growth
Series and the Strategist Series, 0.75% of the net assets of each of the
Dividend Growth Series and the Utilities Series, 0.65% of the net assets of
each of the U.S. Government Securities Series and the Intermediate Income
Securities Series, and 0.50% of the net assets of each of the Liquid Asset
Series, the U.S. Government Money Market Series and the Value-Added Market
Series; (49) InterCapital Insured Municipal Income Trust, with assets of
approximately $540 million, for an investment management fee at an annual
rate of 0.35%; (50) InterCapital California Insured Municipal Income Trust,
with assets of approximately $273 million, for an investment management fee
at an annual rate of 0.35%; (51) Dean Witter Global Dividend Growth
Securities, with assets of approximately $1.4 billion, for an investment
management fee at an annual rate of 0.75%; (52) InterCapital Quality
Municipal Securities, with assets of approximately $441 million, for an
investment management fee at an annual rate of 0.35%; (53) InterCapital
California Quality Municipal Securities, with assets of approximately $229
million, for an investment management fee at an annual rate of 0.35%; (54)
InterCapital New York Quality Municipal Securities, with assets of
approximately $104 million, for an investment management fee at an annual
rate of 0.35%; (55) Dean Witter Limited Term Municipal Trust, with assets of
approximately $135 million, for an investment management fee at an annual
rate of 0.50%; (56) Dean Witter Short-Term Bond Fund, with assets of
approximately $45 million, for an investment management fee at an annual rate
of 0.70%; (57) InterCapital Insured Municipal Securities, with assets of
approximately $146 million, for an investment management fee at an annual
rate of 0.35%; (58) InterCapital Insured California Municipal Securities,
with assets of approximately $64 million, for an investment management fee at
an annual rate of 0.35%; (59) Municipal Income Trust, with assets of
approximately $333 million, for an investment advisory fee at an annual rate
of 0.35% on assets up to $250 million and 0.25% on assets over $250 million;
(60) Municipal Income Trust II, with assets of approximately $288 million,
for an investment advisory fee at an annual rate of 0.40% on assets up to
$250 million and 0.30% on assets over $250 million; (61) Municipal Income
Trust III, with assets of approximately $64 million, for an investment
advisory fee at an annual rate of 0.40% on assets up to $250 million and
0.30% on assets over $250 million; (62) Municipal Income Opportunities Trust,
with assets of approximately $181 million, for an investment advisory fee at
an annual rate of 0.50%; (63) Municipal Income Opportunities Trust II, with
assets of approximately $177 million, for an investment advisory fee at an
annual rate of 0.50%; (64) Municipal Income Opportunities Trust III, with
assets of approximately $108 million, for an investment advisory fee at an
annual rate of 0.50%; (65) Municipal Premium Income Trust, with assets of
approximately $394 million, for an investment advisory fee at an annual rate
of 0.40%; (66) Prime Income Trust, with assets of approximately $283 million,
for an investment advisory fee at an annual rate of 0.90% on assets up to
$500 million and 0.85% on assets over $500 million; (67) Dean Witter Global
Utilities Fund, with assets of approximately $252 million, for an investment
management fee at an annual rate of 0.65%; (68) Dean Witter National
Municipal Securities, with assets of approximately $19 million, for an
investment advisory fee at an annual rate of 0.35%; (69) Dean Witter High
Income Securities, with assets of approximately $48 million, for an
investment advisory fee at an annual rate of 0.50%; and (70) Dean Witter
International SmallCap Fund, with assets of approximately $77 million, for an
investment advisory fee at an annual rate of

I-3

1.25%. InterCapital also serves as Investment Adviser of Dean Witter World
Wide Investment Trust and Dean Witter World Wide Investment Fund, along with
Daiwa International Capital Management Corp. and NatWest Investment
Management Limited. Dean Witter World Wide Investment Trust had assets of
approximately $570 million and InterCapital receives an Investment Adviser's
fee at an annual rate of 0.55% of the Trust's daily net assets up to $500
million and 0.5225% of the Trust's daily net assets over $500 million. Shares
of Dean Witter World Wide Investment Fund, an investment company organized
under the laws of Luxembourg, are not offered for purchase in the United
States or to American citizens outside of the United States. InterCapital
also serves as sub-adviser to Templeton Global Opportunities Trust, with
assets of approximately $487 million, for which it receives a fee of 0.25%
per annum.

I-4

EXHIBIT

INDEPENDENT AUDITORS' REPORT

Board of Directors and Stockholders of
Dean Witter InterCapital Inc.:

We have audited the accompanying balance sheet of Dean Witter InterCapital
Inc. (the "Company") (a wholly-owned subsidiary of Dean Witter, Discover &
Co.) as of December 31, 1993. This financial statement is the responsibility
of the Company's management. Our responsibility is to express an opinion on
this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards 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. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, such balance sheet presents fairly, in all material
respects, the financial position of Dean Witter InterCapital at December 31,
1993 in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE
February 28, 1994

A-1

DEAN WITTER INTERCAPITAL INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1993
(IN THOUSANDS)

ASSET
Cash and cash equivalents ........................................................... $ 57,810
Management and administration fees receivable ....................................... 27,010
Investments ......................................................................... 7,644
Office facilities, at cost (less accumulated depreciation and amortization of
$5,122) ............................................................................ 3,892
Other assets ........................................................................ 18,176
----------
$114,532
==========
LIABILITIES AND STOCKHOLDER'S EQUITY
Income taxes payable (Note 3) ....................................................... $ 45,545
Dividends payable ................................................................... 12,662
Accrued compensation and employee benefits .......................................... 12,337
Payable to affiliate ................................................................ 4,000
Other liabilities ................................................................... 14,998
----------
Total liabilities ............................................................... 89,532
----------
Stockholder's equity:
Common stock, $.01 par value; 1,000 shares authorized and outstanding ............. --
Additional paid-in capital ......................................................... 10,000
Retained earnings .................................................................. 15,000
----------
Total stockholder's equity ...................................................... 25,000
----------
$114,532
==========

See notes to consolidated balance sheet.

A-2

DEAN WITTER INTERCAPITAL INC.
NOTES TO CONSOLIDATED BALANCE SHEET

1. INTRODUCTION AND BASIS OF PRESENTATION

The consolidated balance sheet includes the accounts of Dean Witter
InterCapital Inc. and its wholly-owned subsidiaries (the "Company"). The
Company is wholly-owned by Dean Witter, Discover & Co. ("DWDC"), which was
formerly a subsidiary of Sears, Roebuck and Co. ("Sears"). All material
intercompany balances and transactions with its subsidiaries have been
eliminated.

On March 1, 1993, DWDC completed an initial public offering of 33.8
million shares of its common stock at $27 per share. This transaction had the
effect of reducing Sears ownership in DWDC to 80.1 percent. On June 30, 1993,
Sears divested its remaining ownership of DWDC's common stock by means of a
special dividend to Sears shareholders.

On December 22, 1993, Dean Witter Reynolds Inc. ("DWR") transferred the
net assets of the Company in the form of a dividend to DWDC. Prior to
December 22, 1993, the Company was wholly-owned by DWR, a wholly-owned
subsidiary of DWDC.

The Company is a registered investment adviser under the Investment
Advisers Act of 1940. The Company sponsors and performs management and
administrative services for mutual funds, principally those sold by DWR ("DWR
funds"). The Company also performs such services for individual,
institutional, trust and estate accounts.

The Company commenced operations in January 1993 and assumed the advisory
business of DWR.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash equivalents consist of highly liquid investments not held for resale
with maturities, when purchased, of three months or less.

Fixed assets are generally depreciated utilizing accelerated methods over
useful lives of five to eight years. Leasehold improvements are amortized
over the lesser of the lease term or useful life.

3. INCOME TAXES

The Company provides deferred income taxes which result from recording
certain transactions in different years for tax and financial reporting
purposes.

Payments for income taxes are limited to those which would result from the
Company filing a separate federal income tax return.

The Company has available net operating loss carryforwards at December 31,
1993 in the amount of $112,200,000 which begin to expire in 2002.

4. RELATED PARTY TRANSACTIONS

Certain administrative services are provided by DWR which are reimbursed
by the Company.

5. EMPLOYEE BENEFIT PLANS

Substantially all employees are covered by a non-contributory defined
benefit pension plan sponsored by DWR. Pension benefits are based on length
of service and average annual compensation.

A-3

Certain employees are covered by postretirement plans sponsored by DWR
that provide medical and life insurance for retirees and eligible dependents.
Eligibility for retiree medical and life benefits is generally based on a
combination of age and years of service at retirement.

The Company reimburses DWR for pension and other postretirement benefit
expenses.

6. LITIGATION

The Company has been named as a defendant in various lawsuits. It is the
opinion of management, after consultation with outside counsel, that the
resolution of such suits will not have a material adverse effect on the
consolidated financial condition of the Company.

7. FINANCIAL INSTRUMENTS FAIR VALUE INFORMATION

The estimated fair value amounts of financial instruments have been
determined by the Company using available market information and appropriate
valuation methodologies. Considerable judgment is required to develop
estimates of fair value.

Substantially all financial instruments on the Company's consolidated
balance sheet are carried at fair value or at amounts which approximate fair
value.

A-4

INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST
ANNUAL MEETING OF SHAREHOLDERS--OCTOBER 25, 1994

PROXY

The undersigned hereby appoints EDMUND C. PUCKHABER, SHELDON CURTIS,
ROBERT M. SCANLAN, or any of them, proxies, each with the power of
substitution, to vote on behalf of the undersigned at the Annual Meeting of
Shareholders of INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST on October 25,
1994 at 9:00, New York City time, and at any adjournment thereof, on the
proposals set forth in the Notice of Meeting dated August 5, 1994 as follows:

THIS PROXY IS SOLICITED BY THE TRUSTEES. IF NO SPECIFICATION IS MADE ON
REVERSE SIDE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES FOR TRUSTEE.

(Continued, and to be dated and signed on reverse side)

COMMON SHARES

1. ELECTION OF TRUSTEES:
[ ] FOR ALL NOMINEES
(except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY
(to vote for all nominees listed below)

Michael Bozic, Dr. Manuel H. Johnson, Paul Kolton, Philip J. Purcell, John L.
Schroeder and Edward R. Telling

(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name on the space provided below.)
- - -----------------------------------------------------------------------------
2. APPROVAL OF INVESTMENT MANAGEMENT AGREEMENT:
FOR [ ] AGAINST [ ] ABSTAIN [ ]

3. RATIFICATION OF APPOINTMENT OF PRICE WATERHOUSE AS INDEPENDENT
ACCOUNTANTS:
FOR [ ] AGAINST [ ] ABSTAIN [ ]

099

and in their discretion in the transaction of any other business which may
properly come before the meeting.

Please sign personally. If the share is registered in more than one name,
each joint owner or each fiduciary should sign personally. Only authorized
officers should sign for corporations.

Dated
- - -----------------------------------------------------------------------------

- - -----------------------------------------------------------------------------
Signature

IMPORTANT: PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD IN THE ENCLOSED
ENVELOPE.

INTERCAPITAL QUALITY MUNICIPAL INCOME TRUST
ANNUAL MEETING OF SHAREHOLDERS--OCTOBER 25, 1994

PROXY

THIS PROXY IS SOLICITED BY THE TRUSTEES. IF NO SPECIFICATION IS MADE ON
REVERSE SIDE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES FOR TRUSTEE.

(Continued, and to be dated and signed on reverse side)

PREFERRED SHARES

PLEASE MARK BOXES [//] OR [X] IN BLUE OR BLACK INK.
1. ELECTION OF TRUSTEE:
[ ] FOR ALL NOMINEES
(except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY
(to vote for all nominees listed below)

Michael Bozic, Dr. Manuel H. Johnson, Paul Kolton, Philip J. Purcell, John L.
Schroeder and Edward R. Telling

3. RATIFICATION OF APPOINTMENT OF PRICE WATERHOUSE AS INDEPENDENT
ACCOUNTANTS:
FOR [ ] AGAINST [ ] ABSTAIN [ ]

099

and in their discretion in the transaction of any other business which may
properly come before the meeting.

Please sign personally. If the share is registered in more than one name,
each joint owner or each fiduciary should sign personally. Only authorized
officers should sign for corporations.

Dated
- - -----------------------------------------------------------------------------

- - -----------------------------------------------------------------------------
Signature

IMPORTANT: PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD IN THE ENCLOSED
ENVELOPE.