WITTER DEAN PRINCIPAL PLUS FUND L P - 10-K Annual Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [No Fee Required]
For the year ended December 31, 2004 or

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required]
For the transition period from ________________to___________________

Commission File Number 0-18314

DEAN WITTER PRINCIPAL PLUS FUND L.P.

(Exact name of registrant as specified in its Limited Partnership Agreement)

DELAWARE 13-3541588
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

Demeter Management Corporation
330 Madison Avenue, 8th Floor
New York, NY 10017
(Address of principal executive offices) (Zip Code)

Registrant?s telephone number, including area code (212) 905-2700

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange
Title of each class on which registered

None None

Securities registered pursuant to Section 12(g) of the Act:

Units of Limited Partnership Interest

(Title of Class)

Indicate by check-mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No _____

Indicate by check-mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (section 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment of this Form 10-K. [X]

Indicate by check-mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes _____ No __X___

State the aggregate market value of the Units of Limited Partnership Interest
held by non-affiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which Units were sold as of the last
business day of the registrant?s most recently completed second fiscal quarter:
$24,145,714 at June 30, 2004.

DOCUMENTS INCORPORATED BY REFERENCE
(See Page 1)

DEAN WITTER PRINCIPAL PLUS FUND L.P.
INDEX TO ANNUAL REPORT ON FORM 10-K
DECEMBER 31, 2004

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the following documents are incorporated by reference
as follows:

Documents Incorporated Part of Form 10-K

Partnership's Prospectus dated
November 8, 1995 I

Annual Report to Dean Witter
Principal Plus Fund L.P.
Limited Partners for the year
ended December 31, 2004 II, III, and IV

PART I
Item 1. BUSINESS

(a) General Development of Business. Dean Witter Principal Plus
Fund L.P. (the "Partnership") is a Delaware limited partnership
organized in 1989 to engage primarily in the speculative trading
of futures contracts, options on futures contracts, and forward
contracts on physical commodities and other commodity interests
(collectively, ?Futures Interests?). The Partnership commenced
trading operations on February 14, 1990.

The Partnership?s general partner is Demeter Management
Corporation (?Demeter?). The non-clearing commodity broker is
Morgan Stanley DW Inc. (?Morgan Stanley DW?). The clearing
commodity brokers are Morgan Stanley & Co. Incorporated (?MS &
Co.?) and Morgan Stanley & Co. International Limited (?MSIL?).
Demeter, Morgan Stanley DW, MS & Co., and MSIL are wholly-owned
subsidiaries of Morgan Stanley. The trading advisor to the
Partnership is SSARIS Advisors, LLC, (the ?Trading Advisor?).

From February 1, 1996 through August 31, 2003 (the ?Guarantee
Period?), the Partnership had approximately 80% of its assets
invested in zero-coupon United States Treasury Securities (the
?Yield Pool?) and its remaining assets were invested in Futures
Interests.

The investment in the Yield Pool was made in order to
ensure a guaranteed net asset value per limited partnership
interest (?Unit(s)?) of $1,961.00 as of the end of the Guarantee
Period, which occurred on August 31, 2003. At the end of the
Guarantee Period the net asset value per Unit was $2,058.58,
greater than the guaranteed net asset value of at least $1,961.00
per Unit. The zero-coupon U.S. Treasury Securities matured and
the Yield Pool was liquidated on August 31, 2003. The proceeds
from its liquidation were invested in and will continue to be used
in the trading of Futures Interests described above without any
guarantee with respect to the net asset value per Unit at any
future date.

The Partnership's net asset value per Unit of limited partnership
interest at December 31, 2004 was $1,970.00, representing a
decrease of 4.1 percent from the net asset value per Unit of
$2,053.17 at December 31, 2003. For a more detailed description
of the Partnership's business, see subparagraph (c).

(b) Financial Information about Segments. For financial infor-
mation reporting purposes, the Partnership is deemed to engage in
one industry segment, the speculative trading of futures,
forwards, and options on such contracts. The relevant financial
information is presented in Items 6 and 8.

(c) Narrative Description of Business. The Partnership is in the
business of speculative trading of futures, forwards, and options
pursuant to trading instructions provided by the Trading Advisor.
For a detailed description of the different facets of the
Partnership's business, see those portions of the Partnership's
prospectus, dated November 8, 1995 (the ?Prospectus?),
incorporated by reference in this Form 10-K, set forth below.

Facets of Business
1. Summary 1. "Summary of the Prospectus"
(Pages 2-14 of the
Prospectus).

2. Commodity Markets 2. "The Futures, Options, and
Forward Markets" (Pages
51-56 of the Prospectus).

3. Partnership's Commodity 3. ?Trading Policies? (Page
Trading Arrangements and 62). ?The Trading Advisor?
Policies (Pages 58-62 of the
Prospectus). ?The Yield
Pool? (Page 63 of the
Prospectus). ?The
Trading Company? (Pages
63-64 of the Prospectus).

4. Management of the Part- 4. "The Management Agree-
nership ment?(Pages 66-67 of the
Prospectus). ?The General
Partner? (Pages 48-50 of
The Prospectus) and
"The Commodity Broker?
(Pages 64-65 of the
Prospectus). ?The
Partnership Agreement?
(Pages 70-73 of the
Prospectus).

5. Taxation of the Partner- 5. ?Material Federal Income
ship?s Limited Partners Tax Aspects? and "State
and Local Income Tax
Aspects" (Pages 77-86 of
The Prospectus).

(d) Financial Information about Geographic Areas. The Partnership
has not engaged in any operations in foreign countries; however,
the Partnership (through the commodity brokers) enters into
forward contract transactions where foreign banks are the
contracting party and trades in futures, forwards, and options on
foreign exchanges.

(e) Available Information. The Partnership files annual reports
on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K, and all amendments to these reports with the Securities
and Exchange Commission (?SEC?). You may read and copy any
document filed by the Partnership at the SEC?s Public Reference
Room at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for information on
the Public Reference Room. The Partnership does not maintain an
internet website, however, the SEC maintains a website that
contains annual, quarterly, and current reports, proxy statements,
and other information that issuers (including the Partnership)
file electronically with the SEC. The SEC?s website address is
http://www.sec.gov.

Item 2. PROPERTIES
The Partnership?s executive and administrative offices are located
within the offices of Morgan Stanley DW. The Morgan Stanley DW
offices utilized by the Partnership are located at 330 Madison
Avenue, 8th Floor, New York, NY 10017.

Demeter changed its address in August 2004 from 825 Third Avenue,
9th Floor, New York, NY 10022 to 330 Madison Avenue, 8th Floor,
New York, NY 10017.

Item 3. LEGAL PROCEEDINGS
None.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.

PART II

Item 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP UNITS AND RELATED
SECURITY HOLDER MATTERS

(a) Market Information. There is no established public trading
market for Units of the Partnership.

(b) Holders. The number of holders of Units at December 31, 2004
was approximately 1,526.

(c) Distributions. No distributions have been made by the
Partnership since it commenced operations on February 14, 1990.
Demeter has sole discretion to decide what distributions, if any,
shall be made to investors in the Partnership. Demeter currently
does not intend to make any distributions of Partnership?s
profits.

Item 6. SELECTED FINANCIAL DATA (in dollars)

Item 7.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Liquidity. The Partnership deposits its assets with Morgan
Stanley DW as non-clearing broker, and MS & Co. and MSIL as
clearing brokers in separate futures, forwards, and options
trading accounts established for the Trading Advisor. Such assets
are used as margin to engage in trading and may be used as margin
solely for the Partnership?s trading. The assets are held in
either non-interest bearing bank accounts or in securities and
instruments permitted by the Commodity Futures Trading Commission
for investment of customer segregated or secured funds. Since the
Partnership?s sole purpose is to trade in futures, forwards, and
options, it is expected that the Partnership will continue to own
such liquid assets for margin purposes.

The Partnership?s investment in futures, forwards, and options
may, from time to time, be illiquid. Most U.S. futures exchanges
limit fluctuations in prices during a single day by regulations
referred to as ?daily price fluctuations limits? or ?daily
limits?. Trades may not be executed at prices beyond the daily
limit. If the price for a particular futures or options contract
has increased or decreased by an amount equal to the daily limit,
positions in that futures or options contract can neither be taken

nor liquidated unless traders are willing to effect trades
at or within the limit. Futures prices have occasionally moved
the daily limit for several consecutive days with little or no
trading. These market conditions could prevent the Partnership
from promptly liquidating its futures or options contracts and
result in restrictions on redemptions.

There is no limitation on daily price moves in trading forward
contracts on foreign currencies. The markets for some world
currencies have low trading volume and are illiquid, which may
prevent the Partnership from trading in potentially profitable
markets or prevent the Partnership from promptly liquidating
unfavorable positions in such markets, subjecting it to
substantial losses. Either of these market conditions could
result in restrictions on redemptions. For the periods covered by
this report, illiquidity has not materially affected the
Partnership assets.

There are no known material trends, demands, commitments, events,
or uncertainties at the present time that are reasonably likely to
result in the Partnership?s liquidity increasing or decreasing in
any material way.

Capital Resources. The Partnership does not have, nor
expects to have, any capital assets. Redemptions of Units in the
future will affect the amount of funds available for investments
in futures, forwards, and options in subsequent periods. It is
not possible to estimate the amount, and therefore the impact, of
future outflows of Units.

There are no known material trends, favorable or unfavorable, that
would affect, nor any expected material changes to, the
Partnership?s capital resource arrangements at the present time.

Off-Balance Sheet Arrangements and Contractual Obligations. The
Partnership does not have any off-balance sheet arrangements, nor
does it have contractual obligations or commercial commitments to
make future payments that would affect its liquidity or capital
resources.

Results of Operations
General. The Partnership's results depend on the Trading Advisor
and the ability of the Trading Advisor's trading program to take
advantage of price movements in the futures, forwards, and options
markets. The following presents a summary of the Partnership's
operations for each of the three years in the period ended
December 31, 2004, and a general discussion of its trading
activities during each period. It is important to note, however,

that the Trading Advisor trades in various markets at
different times and that prior activity in a particular market
does not mean that such market will be actively traded by the
Trading Advisor or will be profitable in the future. Consequently,
the results of operations of the Partnership are difficult to
discuss other than in the context of the Trading Advisor's trading
activities on behalf of the Partnership during the period in
question. Past performance is no guarantee of future results.

The Partnership?s results of operations set forth in its financial
statements are prepared in accordance with accounting principles
generally accepted in the United States of America, which require
the use of certain accounting policies that affect the amounts
reported in these financial statements, including the following:
The contracts the Partnership trades are accounted for on a trade-
date basis and marked to market on a daily basis. The difference
between their cost and market value is recorded on the
Consolidated Statements of Operations as ?Net change in unrealized
trading profit (loss)? for open (unrealized) contracts, and
recorded as ?Realized trading profit (loss)? when open positions
are closed out. The sum of these amounts, along with the
?Proceeds from Litigation Settlement?, constitutes the
Partnership?s trading results. The market value of a futures

contract is the settlement price on the exchange on which
that futures contract is traded on a particular day. The value of
foreign currency forward contracts is based on the spot rate as of
the close of business. Prior to August 31, 2003 the difference
between the cost of the zero-coupon U.S. Treasury Securities and
its market value was recorded as ?Change in value of Yield Pool?.
Interest income, as well as management fees, incentive fees, and
brokerage fees expenses of the Partnership are recorded on an
accrual basis.

Demeter believes that, based on the nature of the operations of
the Partnership, no assumptions relating to the application of
critical accounting policies other than those presently used could
reasonably affect reported amounts.

The Partnership recorded total trading results including interest
totaling $318,224 and expenses totaling $1,391,404, and minority
interest of $12,518, resulting in a net loss of $1,060,662 for the
year ended December 31, 2004. The Partnership?s net asset value
per Unit decreased from $2,053.17 at December 31, 2003 to
$1,970.00 at December 31, 2004. Total redemptions for the year
were $3,194,825 and the Partnership?s ending capital was
$22,268,511 at December 31, 2004, a decrease of $4,255,487 from
ending capital at December 31, 2003 of $26,523,998.

The most significant trading losses of approximately 1.0%
were recorded in the currency markets during the first nine
months of the year. During the first quarter, long cross-rate
positions in the Swiss franc versus the Japanese yen resulted in
losses as the yen?s value reversed higher due to speculation that
the Bank of Japan was relaxing its efforts to weaken the yen.
Long positions in the U.S. dollar index were also unprofitable as
the U.S. dollar?s value declined due to a reduction in Bank of
Japan intervention activity. During the second quarter, losses
were incurred from long positions in the Japanese yen versus the
U.S. dollar as the U.S. dollar surged following the release of
stronger-than-expected U.S. jobs data. The yen also came under
pressure from weakening efforts by Japanese government currency
market interventions. Losses were also incurred from short U.S.
dollar positions against the South African rand as the U.S.
dollar benefited from rising U.S. interest rates and the
perception that the U.S. economy was experiencing a sustainable
recovery. During the third quarter, short cross-rate positions
in the Australian dollar versus the Japanese yen incurred losses
as the Australian currency reversed higher amid speculation for
increases in Australian interest rates. During August, losses
were experienced from short positions in the Japanese yen versus
the U.S. dollar, Swiss franc, Australian dollar, and the euro as
the value of the yen moved higher due to higher Japanese equity

prices and the release of positive Japanese economic data.
During September, short positions in the Mexican peso versus the
U.S. dollar resulted in losses as the U.S. dollar reversed lower
amid perceptions that the U.S. Federal Reserve reformed their
outlook regarding aggressive increases in interest rates. Long
positions in the Japanese yen versus the U.S. dollar also
incurred losses during September as the yen declined from Japan?s
swelling national debt and a reversal of the U.S. dollar?s value
in response to a hike in U.S. interest rates. Additional losses
of approximately 0.7% were recorded in the metals markets from
positions in base metals. Long futures positions in nickel
experienced losses as prices fell due to a strengthening of the
U.S. dollar during January. Additionally, short nickel futures
positions during May experienced losses as prices increased due
to a weaker U.S. dollar and strong Asian demand. During the
third quarter, further sector losses resulted from long nickel
futures positions after prices declined amid a slowdown in demand
from China. Smaller losses resulted from long futures positions
in nickel during the fourth quarter as prices weakened amid
concern for demand and an advancing U.S. dollar. In the
agricultural markets, losses of approximately 0.6% were incurred
from positions in soybean oil, sugar, and cocoa. Short futures
positions in soybean oil generated losses after prices reversed
higher amid news of reduced supply, strong Chinese

export demand, and rumors that U.S. soybean crops were
possibly infected by a damaging fungus. Long futures positions
in sugar incurred losses during October and November as prices
for the commodity moved lower in response to technically-based
selling and news of weaker demand. Elsewhere in the agricultural
complex, losses were experienced from positions in cocoa as a
result of ?whipsawing? in prices due to supply and demand
concerns throughout a majority of the year. A portion of the
Partnership?s overall losses for the year was offset by gains of
approximately 1.9% achieved in the global stock index markets,
primarily during the fourth quarter from long positions in S&P
500 Index futures as prices advanced in response to a decline in
oil prices, positive consumer sentiment, and an increase in
corporate earnings. Additional gains of approximately 0.5% were
recorded in the global interest rates markets during the first,
third, and fourth quarter of the year from long positions in U.S.
and European interest rate futures. During the first quarter,
long positions benefited from a rally in bond prices sparked by
low inflation and reduced concerns for increases in interest
rates. Long positions also profited during the third quarter as
prices trended higher in response to a surge in oil prices, a
drop in equity prices, and a conflicted economic picture
generated by U.S. economic reports. Further gains from long
positions in European interest rates were recorded in the

fourth quarter as prices continued to trend higher for the
aforementioned reasons, in addition to the rise in the value of
the euro, which created strong demand for euro-denominated
investments. Smaller gains of approximately 0.3% were
experienced in the energy markets. During a majority of the
year, long positions in crude oil behaved well as prices trended
higher due to consistent news of tight supply, continuing
geopolitical concerns in the Middle East, concerns that top
Russian oil producer, Yukos, may break up or stop selling oil,
production disruptions in the Gulf of Mexico, growing civil
unrest in Nigeria, and the threat of a national strike in Norway.

The Partnership recorded total trading results including interest
and change in the value of the Yield Pool totaling $1,166,605,
expenses totaling $1,807,047, and minority interest of $33,904,
resulting in a net loss of $606,538 for the year ended December
31, 2003. The Partnership?s net asset value per Unit increased
from $2,031.46 at December 31, 2002 to $2,053.17 at December 31,
2003. Total redemptions for the year were $7,254,598 and the
Partnership?s ending capital was $26,523,998 at December 31,
2003, a decrease of $7,861,136 from ending capital at December
31, 2002 of $34,385,134.

The most significant trading gains of approximately 2.7%
were recorded in the global stock index markets from long
positions in S&P 500 Index futures as global equity prices
trended higher
throughout the latter half of the year in response to positive
earnings announcements and the prospect of interest rates in the
U.S. remaining low, and an overall improved global economic
outlook. Additional gains of approximately 0.7% in the metals
markets were experienced, primarily during October, by long
futures positions in nickel and copper as industrial metals
prices rallied in response to increased demand especially from
China, as well as to growing investor sentiment that the global
economy was on the path to recovery. A portion of the
Partnership?s overall gains for the year was offset by losses of
approximately 0.3% in the agricultural markets on corn futures
positions as the price of corn was lifted higher with wheat
prices during January and then traded in a volatile pattern
during April and August amid supply and weather-related issues.

The Partnership recorded total results including interest and
change in the value of the Yield Pool totaling $1,960,508,
expenses totaling $1,912,700, and minority interest of $63,005,
resulting in net income of $110,813 for the year ended December
31, 2002. The Partnership?s net asset value per Unit increased

from $1,983.47 at December 31, 2001 to $2,031.46 at December 31,
2002. Total redemptions for the year were $3,037,991 and the
Partnership?s ending capital was $34,385,134 at December 31,
2002, a decrease of $2,927,178 from ending capital at December
31, 2001 of $37,312,312.

The most significant trading gains of approximately 4.0% were
recorded in the global interest rate futures markets by long
positions in European, Japanese, and U.S. interest rate futures,
predominantly during the third quarter, as prices trended higher
amid a shift in assets from stocks into bonds as investors sought
the safety of fixed income investments. Additional gains of
approximately 0.5% were recorded in the currency markets during
May, June, and December from long positions in the euro, Swiss
franc, and Japanese yen versus the U.S. dollar as the U.S.
dollar?s value weakened amid investors? fears concerning
increased global tensions, specifically the threat of war between
India and Pakistan, the looming threat of a military strike
against Iraq, and the resumption of North Korea?s nuclear
program. A portion of the Partnership?s overall gains was offset
by losses of approximately 4.3% recorded in the global stock
index futures markets from long positions in U.S., European, and
Japanese stock index futures as prices continued to weaken

throughout the majority of the year, particularly during July,
September, and December, amid continued economic uncertainty and
ongoing political concerns.

For an analysis of unrealized gains and (losses) by contract type
and a further description of 2004 trading results, refer to the
Partnership?s Annual Report to Limited Partners for the year ended
December 31, 2004, which is incorporated by reference to Exhibit
13.01 of this Form 10-K.

The Partnership's gains and losses are allocated among its
partners for income tax purposes.

Market Risk.
Financial Instruments. The Partnership is a party to financial
instruments with elements of off-balance sheet market and credit
risk. The Partnership trades Futures Interests. In entering
into these contracts, the Partnership is subject to the market
risk that such contracts may be significantly influenced by
market conditions, such as interest rate volatility, resulting in
such contracts being less valuable. If the markets should move
against all of the positions held by the Partnership at the same

time, and if the Trading Advisor was unable to offset
positions of the Partnership, the Partnership could lose all of
its assets and limited partners would realize a 100% loss.

In addition to the Trading Advisor's internal controls, the
Trading Advisor must comply with the Partnership?s trading
policies that include standards for liquidity and leverage that
must be maintained. The Trading Advisor and Demeter monitor the
Partnership's trading activities to ensure compliance with the
trading policies and Demeter can require the Trading Advisor to
modify positions of the Partnership if Demeter believes they
violate the Partnership's trading policies.

Credit Risk.
In addition to market risk, in entering into futures, forward, and
options contracts there is a credit risk to the Partnership that
the counterparty on a contract will not be able to meet its
obligations to the Partnership. The ultimate counterparty or
guarantor of the Partnership for futures, forward, and options
contracts traded in the United States and most foreign exchanges
on which the Partnership trades is the clearinghouse associated
with such exchange. In general, a clearinghouse is backed by the
membership of the exchange and will act in the event of non-
performance by one of its members or one of its member?s

customers, which should significantly reduce this credit
risk. There is no assurance that a clearinghouse, exchange, or
other exchange member will meet its obligations to the
Partnership, and Demeter and the commodity brokers will not
indemnify the Partnership against a default by such parties.
Further, the law is unclear as to whether a commodity broker has
any obligation to protect its customers from loss in the event of
an exchange or clearinghouse defaulting on trades effected for the
broker?s customers. In cases where the Partnership trades off-
exchange forward contracts with a counterparty, the sole recourse
of the Partnership will be the forward contract?s counterparty.

Demeter deals with these credit risks of the Partnership in
several ways. First, it monitors the Partnership?s credit
exposure to each exchange on a daily basis. The commodity
brokers inform the Partnership, as with all their customers, of
its net margin requirements for all its existing open positions
and Demeter has installed a system which permits it to monitor
the Partnership?s potential net credit exposure, exchange by
exchange, by adding the unrealized trading gains on each
exchange, if any, to the Partnership?s margin liability thereon.

Second, the Partnership?s trading policies limit the amount
of its net assets that can be committed at any given time to
futures contracts and require a minimum amount of diversification
in the Partnership?s trading, usually over several different
products and exchanges. Historically, the Partnership?s exposure
to any one exchange has typically amounted to only a small
percentage of its total net assets and on those relatively few
occasions where the Partnership?s credit exposure climbs above
such level, Demeter deals with the situation on a case by case
basis, carefully weighing whether the increased level of credit
exposure
remains appropriate. Material changes to the trading policies may
be made only with the prior written approval of the limited
partners owning more than 50% of Units then outstanding.

Third, with respect to forward contract trading, the Partnership
trades with only those counterparties which Demeter, together
with Morgan Stanley DW, have determined to be creditworthy. The
Partnership presently deals with MS & Co. as the sole
counterparty on forward contracts.

For additional information, see the ?Financial Instruments?
section under ?Notes to Financial Statements? in the
Partnership?s Annual Report to Limited Partners for the

year ended December 31, 2004, which is incorporated by
reference to Exhibit 13.01 of this Form 10-K.

Inflation has not been a major factor in the Partnership?s
operations.

Item 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Introduction

The Partnership is a commodity pool engaged primarily in the
speculative trading of futures, forwards, and options. The
market-sensitive instruments held by the Partnership are acquired
for speculative trading purposes only and, as a result, all or
substantially all of the Partnership?s assets are at risk of
trading loss. Unlike an operating company, the risk of market-
sensitive instruments is inherent to the primary business
activity of the Partnership.

The futures, forwards, and options traded by the Partnership
involve varying degrees of related market risk. Market risk is
often dependent upon changes in the level or volatility of
interest rates, exchange rates, and prices of financial
instruments and commodities, factors that result in frequent
changes in the fair value of the Partnership?s open positions, and
consequently in its earnings, whether realized or unrealized, and

cash flow. Gains and losses on open positions of exchange-
traded futures, forwards, and options are settled daily through
variation margin. Gains and losses on off-exchange-traded forward
currency contracts are settled upon termination of the contract,
however, the Partnership is required to meet margin requirements
equal to the net unrealized loss on open contracts in the
Partnership accounts with the counterparty, which is accomplished
by daily maintenance of the cash balance in a custody account held
at Morgan Stanley DW for the benefit of MS & Co.

The Partnership?s total market risk may increase or decrease as
it is influenced by a wide variety of factors, including, but not
limited to, the diversification among the Partnership?s open
positions, the volatility present within the markets, and the
liquidity of the markets.

The face value of the market sector instruments held by the
Partnership is typically many times the applicable margin
requirements. Margin requirements generally range between 2% and
15% of contract face value. Additionally, the use of leverage
causes the face value of the market sector instruments held by the
Partnership to typically be many times the total capitalization of
the Partnership.

The Partnership?s past performance is no guarantee of its
future results. Any attempt to numerically quantify the
Partnership?s market risk is limited by the uncertainty of its
speculative
trading. The Partnership?s speculative trading and use of
leverage may cause future losses and volatility (i.e., ?risk of
ruin?) that far exceed the Partnership?s experiences to date under
the ?Partnership?s Value at Risk in Different Market Sectors?
section and significantly exceed the Value at Risk (?VaR?) tables
disclosed.

Limited partners will not be liable for losses exceeding the
current net asset value of their investment.

Quantifying the Partnership?s Trading Value at Risk
The following quantitative disclosures regarding the Partner-
ship?s market risk exposures contain ?forward-looking statements?
within the meaning of the safe harbor from civil liability
provided for such statements by the Private Securities Litigation
Reform Act of 1995 (set forth in Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of
1934). All quantitative disclosures in this section are deemed
to be forward-looking statements for purposes of the safe harbor,
except for statements of historical fact.

The Partnership accounts for open positions on the basis of mark
to market accounting principles. Any loss in the market value of
the Partnership?s open positions is directly reflected in the
Partnership?s earnings and cash flow.

The Partnership?s risk exposure in the market sectors traded by
the Trading Advisor is estimated below in terms of VaR. The
Partnership estimates VaR using a model based upon historical
simulation (with a confidence level of 99%) which involves
constructing a distribution of hypothetical daily changes in the
value of a trading portfolio. The VaR model takes into account
linear exposures risks including equity and commodity prices,
interest rates, foreign exchange rates, and correlation among
these variables. The hypothetical changes in portfolio
value are based on daily percentage changes observed in key market
indices or other market factors (?market risk factors?) to which
the portfolio is sensitive. The one-day 99% confidence level of
the Partnership?s VaR corresponds to the negative change in
portfolio value that, based on observed market risk factors, would
have been exceeded once in 100 trading days, or one day in 100.
VaR typically does not represent the worst case outcome. Demeter
uses approximately four years of daily market data (1,000
observations) and revalues its portfolio (using delta-gamma

approximations) for each of the historical market moves that
occurred over this time period. This generates a probability
distribution of daily ?simulated profit and loss? outcomes. The
VaR is the appropriate percentile of this distribution. For
example, the 99% one-day VaR would represent the 10th worst
outcome from Demeter?s simulated profit and loss series.

The Partnership?s VaR computations are based on the risk
representation of the underlying benchmark for each instrument or
contract and do not distinguish between exchange and non-exchange
dealer-based instruments. They are also not based on exchange
and/or dealer-based maintenance margin requirements.

VaR models, including the Partnership?s, are continuously evolving
as trading portfolios become more diverse and modeling techniques
and systems capabilities improve. Please note that the VaR model
is used to numerically quantify market risk for historic reporting
purposes only and is not utilized by either Demeter or the Trading
Advisor in their daily risk management activities. Please further
note that VaR as described above may not be comparable to
similarly titled measures used by other entities.

The Partnership?s Value at Risk in Different Market Sectors
The following table indicates the VaR associated with the
Partnership?s open positions as a percentage of total net assets
by primary market risk category at December 31, 2004 and 2003.
At December 31, 2004 and 2003, the Partnership?s total
capitalization was approximately $22 million and $27 million,
respectively.

Primary Market December 31, 2004 December 31, 2003
Risk Category Value at Risk Value at Risk
Equity (1.30)% (1.38)%
Interest Rate (0.34) (0.42)
Currency (0.27) (0.38)
Commodity (0.10) (0.11)
Aggregate Value at Risk (1.22)% (1.33)%

The VaR for a market category represents the one-day downside risk
for the aggregate exposures associated with this market category.
The Aggregate Value at Risk listed above represents the VaR of the
Partnership?s open positions across all the market categories, and
is less than the sum of the VaRs for all such market categories
due to the diversification benefit across asset classes.

Because the business of the Partnership is the speculative
trading of futures, forwards, and options, the composition of its
trading portfolio can change significantly over any given time

period, or even within a single trading day, which could
positively or negatively materially impact market risk as
measured by VaR.

The table below supplements the December 31, 2004 VaR set forth
above by presenting the Partnership?s high, low, and average VaR,
as a percentage of total net assets for the four quarter-end
reporting periods from January 1, 2004 through December 31, 2004.

Primary Market Risk Category High Low Average
Equity (1.54)% (0.79)% (1.19)%
Interest Rate (0.73) (0.32) (0.49)
Currency (0.27) (0.11) (0.21)
Commodity (0.40) (0.02) (0.18)
Aggregate Value at Risk (1.39)% (0.93)% (1.16)%

Limitations on Value at Risk as an Assessment of Market Risk
VaR models permit estimation of a portfolio?s aggregate market
risk exposure, incorporating a range of varied market risks;
reflect risk reduction due to portfolio diversification or hedging
activities; and can cover a wide range of portfolio assets.
However, VaR risk measures should be viewed in light of the

methodology?s limitations, which include, but may not be
limited to the following:
* past changes in market risk factors will not always result in
accurate predictions of the distributions and correlations of
future market movements;
* changes in portfolio value caused by market movements may
differ from those of the VaR model;
* VaR results reflect past market fluctuations applied to
current trading positions while future risk depends on future
positions;
* VaR using a one-day time horizon does not fully capture the
market risk of positions that cannot be liquidated or hedged
within one day; and
* the historical market risk factor data used for VaR estimation
may provide only limited insight into losses that could be
incurred under certain unusual market movements.

In addition, the VaR tables above, as well as the past performance
of the Partnership, give no indication of the Partnership?s
potential ?risk or ruin?.

The VaR tables provided present the results of the Partnership?s
VaR for each of the Partnership?s market risk exposures and on an
aggregate basis at December 31, 2003, and for the four

quarter-end reporting periods during calendar year 2004.
VaR is not necessarily representative of the Partnership?s
historic risk, nor should it be used to predict the Partnership?s
future financial performance or its ability to manage or monitor
risk.
There can be no assurance that the Partnership?s actual losses on
a particular day will not exceed the VaR amounts indicated above
or that such losses will not occur more than once in 100 trading
days.

Non-Trading Risk
The Partnership has non-trading market risk on its foreign cash
balances. These balances and any market risk they may represent
are immaterial.

The Partnership also maintains a substantial portion
(approximately 99% as of December 31, 2004) of its available
assets in cash at Morgan Stanley DW. A decline in short-term
interest rates would result in a decline in the Partnership?s
cash management income. This cash flow risk is not considered to
be material.

Materiality, as used throughout this section, is based on an
assessment of reasonably possible market movements and any
associated potential losses, taking into account the
leverage, optionality, and multiplier features of the
Partnership?s market-sensitive instruments, in relation to the
Partnership?s net assets.

Qualitative Disclosures Regarding Primary Trading Risk Exposures
The following qualitative disclosures regarding the Partnership?s
market risk exposures ? except for (A) those disclosures that are
statements of historical fact and (B) the descriptions of how the
Partnership manages its primary market risk exposures ? constitute
forward-looking statements within the meaning of Section 27A of
the Securities Act and Section 21E of the Securities Exchange Act.
The Partnership?s primary market risk exposures, as well as the
strategies used and to be used by Demeter and the Trading Advisor
for managing such exposures, are subject to numerous
uncertainties, contingencies and risks, any one of which could
cause the actual results of the Partnership?s risk controls to
differ materially from the objectives of such strategies.
Government interventions, defaults and expropriations, illiquid
markets, the emergence of dominant fundamental factors, political
upheavals, changes in historical price relationships, an influx of
new market participants, increased regulation, and many other
factors could result in material losses, as well as in material
changes to the risk exposures and the risk management strategies

of the Partnership. Investors must be prepared to lose all
or substantially all of their investment in the Partnership.

The following were the primary trading risk exposures of the
Partnership at December 31, 2004, by market sector. It may be
anticipated, however, that these market exposures will vary
materially over time.

Equity. The primary market exposure of the Partnership at
December 31, 2004 was to the global stock index sector,
primarily to equity price risk in the G-7 countries. The G-7
countries consist of France, the U.S., Britain, Germany, Japan,
Italy, and Canada. The stock index futures traded by the
Partnership are by law limited to futures on broadly-based
indices. At December 31, 2004, the Partnership?s exposures were
to the S&P 500 (U.S.), DAX (Germany), and NIKKEI (Japan) stock
indices. The Partnership is exposed to the risk of adverse price
trends or static markets in the U.S., European, and Japanese
stock indices. Static markets would not cause major market
changes, but would make it difficult for the Partnership to avoid
trendless price movements, resulting in numerous small losses.

Interest Rate. The Partnership?s second largest market
exposure at December 31, 2004 was to the global interest rate
sector. Exposure was primarily spread across the European, U.S.,
Australian, and Japanese interest rate sectors. Interest rate
movements directly affect the price of the sovereign bond futures
positions held by the Partnership and indirectly affect the value
of its stock index and currency positions. Interest rate
movements in one country, as well as relative interest rate
movements between countries, materially impact the Partnership?s
profitability. The Partnership?s interest rate exposure is
generally to interest rate fluctuations in the U.S. and the other
G-7 countries. However, the Partnership also takes futures
positions in the government debt of smaller countries - e.g.,
Australia. Demeter anticipates that the G-7 countries and
Australian interest rates will remain the primary interest rate
exposure of the Partnership for the foreseeable future. The
speculative futures positions held by the Partnership may range
from short to long-term instruments. Consequently, changes in
short, medium, or long-term interest rates may have an effect on
the Partnership.

Currency. The Partnership?s third largest market exposure at
December 31, 2004 was to the currency sector. The currency

exposure is to exchange rate fluctuations, primarily
fluctuations which disrupt the historical pricing relationships
between different currencies and currency pairs. Interest rate
changes, as well as political and general economic conditions
influence these fluctuations. The Partnership trades a large
number of currencies, including cross-rates - i.e., positions
between two currencies other than the U.S. dollar. At December
31, 2004, the Partnership?s major exposures were to the euro,
Japanese yen, Swiss franc, Australian dollar, and Canadian dollar
currency crosses, as well as outright U.S. dollar positions.
Outright positions consist of the U.S. dollar vs. other
currencies. These other currencies include major and minor
currencies. Demeter does not anticipate that the risk associated
with the Partnership?s currency trades will change significantly
in the future.

Commodity.
Energy. At December 31, 2004, the Partnership had market
exposure in the energy sector. The Partnership?s energy
exposure was primarily to futures contracts in crude oil and
its related products, and natural gas. Price movements in
these markets result from geopolitical developments,
particularly in the Middle East, as well as weather patterns

and other economic fundamentals. Significant profits
and losses, which have been experienced in the past, are
expected to continue to be experienced in the future.
Natural gas has exhibited volatility in price resulting from
weather patterns and supply and demand factors and will
likely continue in this choppy pattern.

Soft Commodities and Agriculturals. At December 31, 2004,
the Partnership had market exposure to the markets that
comprise these sectors. Most of the exposure was to the
corn, wheat, soybeans, and sugar markets. Supply and demand
inequalities, severe weather disruptions, and market
expectations affect price movements in these markets.

Metals. At December 31, 2004, the Partnership had market
exposure in the metals sector. The Partnership's metals
exposure was to fluctuations in the price of base metals,
such as zinc, and precious metals, such as gold. Economic
forces, supply and demand inequalities, geopolitical
factors, and market expectations influence price movements
in these markets. The Trading Advisor utilizes the trading
system(s) to take positions when market opportunities
develop, and Demeter anticipates that the Partnership will
continue to do so.

Qualitative Disclosures Regarding Non-Trading Risk
Exposure
The following was the only non-trading risk exposures of the
Partnership at December 31, 2004:

Foreign Currency Balances. The Partnership?s primary
foreign currency balances at December 31, 2004 were in
Japanese yen, Australian dollars, Swiss francs, euros,
Canadian dollars, British pounds, and South African rand.
The Partnership controls the non-trading risk of foreign
currency balances by regularly converting them back into
U.S. dollars upon liquidation of their respective positions.

Qualitative Disclosures Regarding Means of Managing Risk Exposure
The Partnership and the Trading Advisor, separately, attempt to
manage the risk of the Partnership?s open positions in
essentially the same manner in all market categories traded.
Demeter attempts to manage market exposure by diversifying the
Partnership?s assets among different market sectors and trading
approaches, and by monitoring the performance of the Trading
Advisor daily. In addition, the Trading Advisor establishes
diversification guidelines, often set in terms of the maximum
margin to be committed to positions in any one market sector or
market-sensitive instrument.

Demeter monitors and controls the risk of the
Partnership?s non-trading instrument, cash. Cash is the only
Partnership investments directed by Demeter, rather than the
Trading Advisor.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements are incorporated by
reference to the Partnership's Annual Report, which is filed as
Exhibit 13.01 hereto.

Supplementary data specified by Item 302 of Regulation S-K:

Summary of Quarterly Results (Unaudited)

Net Income/(Loss)
Total Trading Results Allocated to Net Income/(Loss)
including interest Partners for Per Unit for
Quarter and change in value Tax and Net Tax and Net
Ended of Yield Pool Asset Valuation Asset Valuation

2004
March 31 $ 314,862 $ (52,198) $ (4.24)
June 30 (537,589) (873,377) (68.98)
September 30 (35,552) (367,498) (29.87)
December 31 576,503 232,411 19.92

Total $ 318,224 $(1,060,662) $ (83.17)

2003
March 31 $ 41,044 $ (25,574) $ (1.55)
June 30 730,869 623,298 39.21
September 30 (229,081) (468,414) (31.09)
December 31 623,773 178,175 15.14

Total $1,166,605 $ 307,485 $ 21.71

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES
(a) As of the end of the period covered by this annual report,
the President and Chief Financial Officer of Demeter, the
general partner of the Partnership, have evaluated the
effectiveness of the Partnership?s disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) of
the Exchange Act), and have judged such controls and
procedures to be effective.

(b) There have been no material changes during the period covered
by this annual report in the Partnership?s internal controls
or in other factors that could significantly affect these
controls subsequent to the date of their evaluation.

Management?s Report on Internal Control Over Financial Reporting
Demeter is responsible for the management of the Partnership.

Management of Demeter (?Management?) is responsible for
establishing and maintaining adequate internal control over
financial reporting. The internal control over financial
reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in
accordance with generally accepted accounting principles.

The Partnership?s internal control over financial reporting
includes those policies and procedures that:

* Pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and
dispositions of the assets of the Partnership;

* Provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and
that the Partnership?s transactions are being made only in
accordance with authorizations of Management and directors;
and

* Provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of
the Partnership?s assets that could have a material effect on
the financial statements.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Partnership?s
internal control over financial reporting as of December 31,
2004. In making this assessment, Management used the criteria
set forth by the Committee of Sponsoring Organizations of the
Treadway Commission in Internal Control-Integrated Framework.
Based on our assessment and those criteria, Management believes
that the Partnership maintained effective internal control over
financial reporting as of December 31, 2004.

Deloitte & Touche LLP, the Partnership?s independent registered
public accounting firm, has issued an audit report on Management?s
assessment of the Partnership?s internal control over financial
reporting and on the effectiveness of the Partnership?s internal
control over financial reporting. This report, which expresses
unqualified opinions on Management?s assessment and on the
effectiveness of the Partnership?s internal control over financial
reporting, appears under ?Report of Independent Registered Public

Accounting Firm? in the Partnership?s Annual Report to
Limited Partners for the year ended December 31, 2004.

Item 9B. OTHER INFORMATION
The Board of Directors of Demeter, the general partner of the
registrant, approved the engagement of Ernst & Young LLP as the
registrant?s principal accountant for tax purposes. Ernst & Young
LLP was engaged by the registrant on November 1, 2004. Deloitte &
Touche LLP will continue as the registrant?s principal accountant
and audit the financial statements of the registrant.

There have been no material disagreements with Deloitte & Touche
LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure.

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

There are no directors or executive officers of the Partnership.
The Partnership is managed by Demeter.

Directors and Officers of the General Partner
The directors and executive officers of Demeter are as follows:

Mr. Jeffrey D. Hahn resigned his position as Chief Financial
Officer and Director of Demeter.

Mr. Jeffrey S. Swartz resigned his position as a Director of
Demeter.

Mr. Jeffrey A. Rothman, age 43, is the Chairman of the Board of
Directors and President of Demeter. Mr. Rothman is the Managing
Director of Morgan Stanley Managed Futures, responsible for
overseeing all aspects of the firm?s managed futures department.
Mr. Rothman has been with the managed futures department for
eighteen years. Throughout his career, Mr. Rothman has helped
with the development, marketing, and administration of
approximately 40 commodity pools. Mr. Rothman is an active member
of the Managed Funds Association and has recently served on its
Board of Directors. Mr. Rothman has a B.A. degree in Liberal Arts
from Brooklyn College, New York.

Mr. Richard A. Beech, age 53, is a Director of Demeter.
Mr. Beech has been associated with the futures industry for over
25 years. He has been at Morgan Stanley DW since August 1984 where
he is
presently an Executive Director and head of Futures, Forex &
Metals. Mr. Beech began his career at the Chicago Mercantile
Exchange, where he became the Chief Agricultural Economist doing
market analysis, marketing, and compliance. Prior to joining
Morgan Stanley DW, Mr. Beech worked at two investment banking
firms in operations, research, managed futures, and sales
management. Mr. Beech has a B.S. degree in Business
Administration from Ohio State University and an M.B.A. degree
from Virginia Polytechnic Institute and State University.

Mr. Raymond A. Harris, age 48, is a Director of Demeter. Mr.
Harris is currently Managing Director and head of Client Solutions
for Morgan Stanley Individual Investor Group (?IIG?), a Board
Member of Morgan Stanley DW Inc., and Director of Morgan Stanley
Trust. Mr. Harris joined Morgan Stanley in 1982 and served in
financial and operational assignments for Dean Witter Reynolds.
In 1994, he joined the Discover Financial Services division,
leading restructuring and product development efforts. Mr. Harris
became Chief Administrative Officer for Morgan Stanley Investment
Management in 1999. In 2001, he was named head of Global Products

and Services for Investment Management. Mr. Harris has an
M.B.A. in Finance from the University of Chicago and a B.A. degree
from Boston College.

Mr. Frank Zafran, age 50, is a Director of Demeter. Mr. Zafran is
an Executive Director of Morgan Stanley and, in September 2002,
was named Chief Administrative Officer of Morgan Stanley?s Client
Solutions Division. Mr. Zafran joined the firm in 1979 and has
held various positions in Corporate Accounting and the Insurance
Department, including Senior Operations Officer ? Insurance
Division, until his appointment in 2000 as Director of 401(k) Plan
Services, responsible for all aspects of 401(k) Plan Services
including marketing, sales, and operations. Mr. Zafran received a
B.S. degree in Accounting from Brooklyn College, New York.

Mr. Douglas J. Ketterer, age 39, is a Director of Demeter. Mr.
Ketterer is a Managing Director and has had responsibility for
managing a number of departments at Morgan Stanley over the years,
most recently as head of the Investment Solutions Group, which is
comprised of a number of departments which offer products and
services through Morgan Stanley?s IIG (including Managed Futures,
Alternative Investments, Insurance Services, Personal Trust,

Corporate Services, and others). Mr. Ketterer joined the
firm in 1990 in the Corporate Finance Division as a part of the
Retail Products Group. He later moved to the origination side of
Investment Banking, and then, after the merger between Morgan
Stanley and Dean Witter, served in the Product Development Group
at Morgan Stanley Dean Witter Advisors (now known as Morgan
Stanley Funds). From the summer of 2000 to the summer of 2002, Mr.
Ketterer served as the Chief Administrative Officer for Morgan
Stanley Investment Management, where he headed the Strategic
Planning & Administrative Group. Mr. Ketterer received his M.B.A.
from New York University?s Leonard N. Stern School of Business and
his B.S. in Finance from the University at Albany?s School of
Business.

Mr. Todd Taylor, age 42, is a Director of Demeter. Mr. Taylor
began his career with Morgan Stanley in June 1987 as a Financial
Advisor in the Dallas office. In 1995, he joined the Management
Training Program in New York and was appointed Branch Manager of
the Missouri and southern Illinois branch offices in 1997. Three
years later, in 2000, Mr. Taylor was appointed to a newly created
position, Director of IIG Learning and Development, before
becoming the Director of IIG Strategy in 2002. Most recently, Mr.
Taylor has taken on a new role as the High Net Worth Segment

Director. Mr. Taylor graduated from Texas Tech University
with a B.B.A. in Finance.

Mr. William D. Seugling, age 35, is a Director of Demeter. Mr.
Seugling is a Managing Director at Morgan Stanley and currently
serves as Director of Client Solutions for U.S. Private Wealth
Management. Mr. Seugling joined Morgan Stanley in June 1993 as
an Associate in Equity Structured Products having previously
worked in research and consulting for Greenwich Associates from
October 1991 to June 1993. Since 1994, he has focused broadly on
analysis and solutions for wealthy individuals and families
culminating in his current role within the division. He was
named Vice President in 1996 and an Executive Director in 1999.
Mr. Seugling graduated cum laude from Bucknell University with a
B.S. in Management and a concentration in Chemistry.

Ms. Louise M. Wasso-Jonikas, age 51, is a Director of Demeter.
Ms. Wasso-Jonikas is a Managing Director of Morgan Stanley and
the Director of Alternative Investments for the IIG of Morgan
Stanley. Ms. Wasso-Jonikas was Co-Founder, President, and Chief
Operating Officer of Graystone Partners, an objective consulting
firm, from 1993 to 1999, when Graystone was acquired by Morgan
Stanley. Prior to founding Graystone, Ms. Wasso-Jonikas was a

Senior Vice President at Bessemer Trust and opened their
Chicago office. She also was a Vice President at the Northern
Trust in their Wealth Management Services Group where she worked
exclusively with their largest private clients and family offices
throughout the U.S. and abroad, serving their broad investment
and custody needs. Ms. Wasso-Jonikas also worked as an equity
block trader with Goldman Sachs and with Morgan Stanley advising
and managing money for private clients. Ms. Wasso-Jonikas? focus
is on developing a robust external manager platform utilizing
alternative managers for Morgan Stanley?s IIG private clients as
well as overseeing some of the Morgan Stanley?s largest client
relationships. Ms. Wasso-Jonikas holds a B.A. in Economics from
Mount Holyoke College and an M.B.A in Finance from the University
of Chicago Graduate School of Business.

Mr. Kevin Perry, age 35, is the Chief Financial Officer of
Demeter. Mr. Perry currently serves as an Executive Director and
Controller within the IIG at Morgan Stanley. Mr. Perry joined
Morgan Stanley in October 2000 and is also Chief Financial
Officer of Morgan Stanley Trust National Association, Van Kampen
Funds Inc., and Morgan Stanley Distribution, Inc. Prior to
joining Morgan Stanley, Mr. Perry worked as an auditor and
consultant in the financial services practice of Ernst & Young

LLP from October 1991 to October 2000. Mr. Perry received
a B.S. degree in Accounting from the University of Notre Dame in
1991 and is a Certified Public Accountant.

All of the foregoing directors have indefinite terms.

The Audit Committee
The Partnership is operated by its general partner, Demeter, and
does not have an audit committee. The entire Board of Directors
of Demeter serves as the audit committee. None of the
directors are considered to be ?independent? as that term is used
in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange
Act of 1934, as amended. The Board of Directors of Demeter has
determined that Mr. Kevin Perry is the audit committee financial
expert.

Code of Ethics
The Partnership has not adopted a code of ethics that applies to
the Partnership?s principal executive officer, principal financial
officer, principal accounting officer or controller, or persons
performing similar functions. The Partnership is operated by its
general partner, Demeter. The President, Chief Financial Officer,
and each member of the Board of Directors of Demeter are employees
of Morgan Stanley and are subject to the code of ethics adopted by

Morgan Stanley, the text of which can be viewed on Morgan
Stanley?s website at http://www.morganstanley.com/ourcommitment/
codeofconduct.html.

Item 11. EXECUTIVE COMPENSATION
The Partnership has no directors and executive officers. As a
limited partnership, the business of the Partnership is managed by
Demeter, which is responsible for the administration of the
business affairs of the Partnership but receives no compensation
for such services.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

(a) Security Ownership of Certain Beneficial Owners - At December
31, 2004, there were no persons known to be beneficial owners of
more than 5 percent of the Units.

(b) Security Ownership of Management - At December 31, 2004,
Demeter owned 154.030 Units of general partnership interest,
representing a 1.36 percent interest in the Partnership.

(c) Changes in Control ? None.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Refer to Note 2 - "Related Party Transactions" of "Notes to
Consolidated Financial Statements", in the accompanying Annual
Report to Limited Partners for the year ended December 31, 2004,
which is incorporated by reference to Exhibit 13.01 of this Form
10-K. In its capacity as the Partnership's retail commodity
broker, Morgan Stanley DW received commodity brokerage fees (paid
and accrued by the Partnership) of $985,617 for the year ended
December 31, 2004.

Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The Partnership pays all accounting fees as discussed in Note 1
to the Consolidated Financial Statements, ?Operating Expenses? in
the Annual Report to the Limited Partners for the year ended
December 31, 2004.

(1) Audit Fees. The aggregate fees for professional services
rendered by Deloitte & Touche LLP in connection with their audit
of the Partnership?s Consolidated Financial Statements and
reviews of the Consolidated Financial Statements included in our
Quarterly Reports on Form 10-Q, and in connection with statutory
and regulatory filings for the year ended December 31, 2004 were
approximately $42,460 and for the year ended December 31, 2003
were $40,338.

(2) Audit-Related Fees. There were no fees for
assurance and related services rendered by Deloitte & Touche LLP
for the years ended December 31, 2004 and 2003.

(3) Tax Fees. The aggregate fees for tax compliance services
rendered by Ernst & Young LLP were approximately $34,146 and
Deloitte & Touche LLP were $33,164 for the years ended December
31, 2004 and 2003, respectively.

(4) All Other Fees. None.

As of the date of this Report, the Board of Directors of Demeter
has not adopted pre-approval policies and procedures. As a
result, all services provided by Ernst & Young LLP and Deloitte &
Touche LLP must be directly pre-approved by the Board of Directors
of Demeter. Additionally, all services provided by Deloitte &
Touche LLP and Ernst & Young LLP must be communicated to Morgan
Stanley?s Audit Director.

PART IV
Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K

(a) 1. Listing of Financial Statements
The following financial statements and report of independent
registered public accounting firm, all appearing in the
accompanying Annual Report to Limited Partners for the year ended
December 31, 2004, are incorporated by reference to Exhibit 13.01
of this Form 10-K:
- - Report of Deloitte & Touche LLP, independent registered
public accounting firm, for the years ended December 31,
2004, 2003, and 2002.

- - Consolidated Statements of Financial Condition, including the
Consolidated Schedules of Investments, as of December 31,
2004 and 2003.

- - Consolidated Statements of Operations, Changes in Partners?
Capital, and Cash Flows for the years ended December 31,
2004, 2003, and 2002.

- - Notes to Consolidated Financial Statements.

With the exception of the aforementioned information and the
information incorporated in Items 7, 8, and 13, the Annual Report
to Limited Partners for the year ended December 31, 2004 is not
deemed to be filed with this report.

2. Listing of Financial Statement Schedules
No financial statement schedules are required to be filed with
this report.

(c) Exhibits
Refer to Exhibit Index on age E-1 to E-2.

SIGNATURES

Pursuant to the requirements of Sections 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

DEAN WITTER PRINCIPAL PLUS FUND L.P.
(Registrant)

BY: Demeter Management Corporation,
General Partner

March 31, 2005 BY: /s/ Jeffrey A. Rothman
Jeffrey A. Rothman,
President

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

Demeter Management Corporation.

BY: /s/ Jeffrey A. Rothman March 31, 2005
Jeffrey A. Rothman, President

/s/ Richard A. Beech March 31, 2005
Richard A. Beech, Director

/s/ Raymond A. Harris March 31, 2005
Raymond A. Harris, Director

/s/ Frank Zafran March 31, 2005
Frank Zafran, Director

/s/ Douglas J. Ketterer March 31, 2005
Douglas J. Ketterer, Director

/s/ Todd Taylor March 31, 2005
Todd Taylor, Director

/s/ William D. Seugling March 31, 2005
William D. Seugling, Director

/s/ Louise M. Wasso-Jonikas March 31, 2005
Louise M. Wasso-Jonikas, Director

/s/ Kevin Perry March 31, 2005
Kevin Perry, Chief Financial Officer

EXHIBIT INDEX

ITEM

3.01 Amended and Restated Limited Partnership Agreement of the
Partnership, dated as of August 29, 1995, is incorporated by
reference to Exhibit 3.01 and Exhibit 3.02 of the
Partnership's Registration Statement (File No. 33-95414) on
Form S-1.

10.01 Amended and Restated Management Agreement among the
Partnership, Demeter, and RXR, Inc., dated as of December 29,
1995, is incorporated by reference to Exhibit 10.02 of the
Partnership's Registration Statement (File No. 33-95414) on
Form S-1.

10.02 Amended and Restated Management Agreement between the
Partnership and Dean Witter Reynolds Inc., dated as of
December 29, 1995, is incorporated by reference to Exhibit
10.01 of the Partnership?s Registration Statement (File No.
33-95414) on Form S-1.

10.03 Amended and Restated Customer Agreement between the
Partnership and Morgan Stanley DW, dated as of June 22, 2000,
is incorporated by reference to Exhibit 10.01 of the
Partnership?s Form 8-K (File No. 0-18314) filed with the
Securities and Exchange Commission on November 13, 2001.

10.04 Commodity Futures Customer Agreement between MS & Co. and the
Partnership, and acknowledged and agreed to by Morgan Stanley
DW, dated as of May 1, 2000, is incorporated by reference to
Exhibit 10.02 of the Partnership?s Form 8-K (File No. 0-
18314) filed with the Securities and Exchange Commission on
November 13, 2001.

10.05 Customer Agreement between the Partnership and MS & Co.,
dated as of May 1, 2000, is incorporated by reference to
Exhibit 10.04 of the Partnership?s Form 8-K (File No. 0-
18314) filed with the Securities and Exchange Commission on
November 13, 2001.

10.06 Foreign Exchange and Options Master Agreement between MS &
Co. and the Partnership, dated as of April 30, 2000, is
incorporated by reference to Exhibit 10.05 of the
Partnership?s Form 8-K (File No. 0-18314) filed with the
Securities and Exchange Commission on November 13, 2001.

10.07 Securities Account Control Agreement among the Partnership,
MS & Co., and Morgan Stanley DW, dated as of May 1, 2000,
is incorporated by reference to Exhibit 10.03 of the
Partnership?s Form 8-K (File No. 0-18314) filed with the
Securities and Exchange Commission on November 13, 2001.

13.01 December 31, 2004 Annual Report to Limited Partners is
filed herewith.

31.01 Certification of President of Demeter Management
Corporation, the general partner of the Partnership
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.02 Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.

32.01 Certification of President of Demeter Management Corpor-
ation, the general partner of the Partnership, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.

32.02 Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Principal
Plus
Fund

December 31, 2004
Annual Report

[LOGO] Morgan Stanley

DEAN WITTER PRINCIPAL PLUS FUND L.P.

HISTORICAL FUND PERFORMANCE

Presented below is the percentage change in Net Asset Value per Unit from the
start of each calendar year the Fund has traded. Also provided is the
inception-to-date return and the compound annualized return since inception for
the Fund. Past performance is no guarantee of future results.

INCEPTION- COMPOUND
TO-DATE ANNUALIZED
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 RETURN RETURN
FUND % % % % % % % % % % % % % % % % %
- ---------------------------------------------------------------------------------------------------------------------------------

Principal Plus Fund 7.5 10.4 9.4 11.6 (8.6) 18.0 (5.3) 15.4 10.5 (3.8) 7.0 2.1 2.4 1.1 (4.1) 97.0 4.7
(10 1/2 mos.)
- ---------------------------------------------------------------------------------------------------------------------------------

DEMETER MANAGEMENT CORPORATION

330 Madison Avenue, 8th Floor
New York, NY 10017
Telephone (212) 905-2700

DEAN WITTER PRINCIPAL PLUS FUND L.P.
ANNUAL REPORT
2004

Dear Limited Partner:

This marks the fifteenth annual report for the Dean Witter Principal Plus
Fund L.P. (the "Fund"). The Fund began the year at a Net Asset Value per Unit
per Limited Partnership Agreement of $2,053.17 and decreased by 4.1% to
$1,970.00 on December 31, 2004. The Fund has increased by 97.0% since it began
trading in February 1990 (a compound annualized return of 4.7%).

Detailed performance information for the Fund is located in the body of the
financial report. We provide a trading results by sector chart that portrays
trading gains and trading losses for the year in each sector in which the Fund
participates.

The trading results by sector chart indicates the year's composite percentage
returns generated by the specific assets dedicated to trading within each
market sector in which the Fund participates. Please note that there is not an
equal amount of assets in each market sector, and the specific allocations of
assets by the Fund to each sector will vary over time within a predetermined
range. Below the chart is a description of the factors that influenced trading
gains and trading losses within the Fund during the year.

Should you have any questions concerning this report, please feel free to
contact Demeter Management Corporation, 330 Madison Avenue, 8th Floor, New
York, NY 10017 or your Morgan Stanley Financial Advisor.

I hereby affirm, that to the best of my knowledge and belief, the information
contained in this report is accurate and complete. Past performance is no
guarantee of future results.

Sincerely,

/s/ Jeffrey A. Rothman
Jeffrey A. Rothman
Chairman of the Board of Directors and President
Demeter Management Corporation
General Partner for
Dean Witter Principal Plus Fund L.P.

PRINCIPAL PLUS FUND

[CHART]

Year ended December 31, 2004
-----------------------------
Currencies -0.96%
Interest Rates 0.48%
Stock Indices 1.86%
Energies 0.31%
Metals -0.67%
Agriculturals -0.64%

Note:Includes trading results and commissions but does not include other fees
or interest income.

FACTORS INFLUENCING ANNUAL TRADING LOSSES:
.. The most significant losses were recorded in the currency markets during the
first nine months of the year. During the first quarter, long cross-rate
positions in the Swiss franc versus the Japanese yen resulted in losses as
the yen's value reversed higher due to speculation that the Bank of Japan
was relaxing its efforts to weaken the yen. Long positions in the U.S.
dollar index were also unprofitable as the U.S. dollar's value declined due
to a reduction in Bank of Japan intervention activity. During the second
quarter, losses were incurred from long positions in the Japanese yen versus
the U.S. dollar as the U.S. dollar surged following the release of
stronger-than-expected U.S. jobs data. The yen also came under pressure from
weakening efforts by Japanese government currency market interventions.
Losses were also incurred from short U.S. dollar positions against the South
African rand as the U.S. dollar benefited from rising U.S. interest rates
and the perception that the U.S. economy was experiencing a sustainable
recovery. During the third quarter, short cross-rate positions in the
Australian dollar versus the Japanese yen incurred losses as the Australian
currency reversed higher amid speculation for increases in Australian
interest rates. During August, losses were experienced from short positions
in the Japanese yen versus the U.S. dollar, Swiss franc, Australian dollar,
and the euro as the value of the yen moved higher due to higher Japanese
equity prices and the release of positive Japanese economic data. During
September, short positions in the Mexican peso versus the U.S. dollar
resulted in losses as the U.S. dollar reversed lower amid perceptions that
the U.S. Federal Reserve reformed their outlook regarding aggressive
increases in interest rates. Long positions in the Japanese yen versus the
U.S. dollar also incurred losses during

PRINCIPAL PLUS FUND

September as the yen declined from Japan's swelling national debt and a
reversal of the U.S. dollar's value in response to a hike in U.S. interest
rates.

.. Additional losses were recorded in the metals markets from positions in base
metals. Long futures positions in nickel experienced losses as prices fell
due to a strengthening of the U.S. dollar during January. Additionally,
short nickel futures positions during May experienced losses as prices
increased due to a weaker U.S. dollar and strong Asian demand. During the
third quarter, further sector losses resulted from long nickel futures
positions after prices declined amid a slowdown in demand from China.
Smaller losses resulted from long futures positions in nickel during the
fourth quarter as prices weakened amid concern for demand and an advancing
U.S. dollar.

.. In the agricultural markets, losses were incurred from positions in soybean
oil, sugar, and cocoa. Short futures positions in soybean oil generated
losses after prices reversed higher amid news of reduced supply, strong
Chinese export demand, and rumors that U.S. soybean crops were possibly
infected by a damaging fungus. Long futures positions in sugar incurred
losses during October and November as prices for the commodity moved lower
in response to technically-based selling and news of weaker demand.
Elsewhere in the agricultural complex, losses were experienced from
positions in cocoa as a result of "whipsawing" in prices due to supply and
demand concerns throughout a majority of the year.

FACTORS INFLUENCING ANNUAL TRADING GAINS:
.. Gains were achieved in the global stock index markets, primarily during the
fourth quarter from long positions in S&P 500 Index futures as prices
advanced in response to a decline in oil prices, positive consumer
sentiment, and an increase in corporate earnings.

.. Additional gains were recorded in the global interest rates markets during
the first, third, and fourth quarter of the year from long positions in U.S.
and European interest rate futures. During the first quarter, long positions
benefited from a rally in bond prices sparked by low inflation and reduced
concerns for increases in interest rates. Long positions also profited
during the third quarter as prices trended higher in response to a surge in
oil prices, a drop in equity prices, and a conflicted economic picture
generated by U.S. economic reports. Further gains from long positions in
European interest rates were recorded in the fourth quarter as prices
continued to trend higher for the aforementioned reasons, in addition to the
rise in the value of the euro, which created strong demand for
euro-denominated investments.

.. Smaller gains were experienced in the energy markets. During a majority of
the year, long positions in crude oil behaved well as prices trended higher
due to consistent news of tight supply, continuing geopolitical concerns in
the Middle East, concerns that top Russian oil producer, Yukos, may break up
or stop selling oil, production disruptions in the Gulf of Mexico, growing
civil unrest in Nigeria, and the threat of a national strike in Norway.

DEAN WITTER PRINCIPAL PLUS FUND L.P.

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Demeter Management Corporation ("Demeter"), the general partner of Dean
Witter Principal Plus Fund L.P. (the "Partnership"), is responsible for the
management of the Partnership.

Management of Demeter ("Management") is responsible for establishing and
maintaining adequate internal control over financial reporting. The internal
control over financial reporting is designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally
accepted accounting principles.

The Partnership's internal control over financial reporting includes those
policies and procedures that:

.. Pertain to the maintenance of records that, in reasonable detail, accurately
and fairly reflect the transactions and dispositions of the assets of the
Partnership;

.. Provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally
accepted accounting principles, and that the Partnership's transactions are
being made only in accordance with authorizations of Management and
directors; and

.. Provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Partnership's assets
that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial
reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Partnership's internal control
over financial reporting as of December 31, 2004. In making this assessment,
Management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission in Internal Control--Integrated
Framework. Based on our assessment and those criteria, Management believes that
the Partnership maintained effective internal control over financial reporting
as of December 31, 2004.

Deloitte & Touche LLP, the Partnership's independent registered public
accounting firm, has issued an audit report on Management's assessment of the
Partnership's internal control over financial reporting and on the
effectiveness of the Partnership's internal control over financial reporting.
This report, which expresses unqualified opinions on Management's assessment
and on the effectiveness of the Partnership's internal control over financial
reporting, appears under "Report of Independent Registered Public Accounting
Firm" on the following page.

New York, New York
March 11, 2005

DEAN WITTER PRINCIPAL PLUS FUND L.P.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Limited Partners and the General Partner:

We have audited management's assessment, included in the accompanying
Management's Report on Internal Control Over Financial Reporting, that Dean
Witter Principal Plus Fund L.P. (the "Partnership") maintained effective
internal control over financial reporting as of December 31, 2004, based on
criteria established in Internal Control--Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission. The
Partnership's management is responsible for maintaining effective internal
control over financial reporting and for its assessment of the effectiveness of
internal control over financial reporting. Our responsibility is to express an
opinion on management's assessment and an opinion on the effectiveness of the
Partnership's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of internal
control over financial reporting, evaluating management's assessment, testing
and evaluating the design and operating effectiveness of internal control, and
performing such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable basis for our
opinions.

A company's internal control over financial reporting is a process designed
by, or under the supervision of, the company's principal executive and
principal financial officers, or persons performing similar functions, and
effected by the company's board of directors, management, and other personnel
to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company's internal
control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly

reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition
of the company's assets that could have a material effect on the financial
statements.

Because of the inherent limitations of internal control over financial
reporting, including the possibility of collusion or improper management
override of controls, material misstatements due to error or fraud may not be
prevented or detected on a timely basis. Also, projections of any evaluation of
the effectiveness of the internal control over financial reporting to future
periods are subject to the risk that the controls may become inadequate because
of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

In our opinion, management's assessment that the Partnership maintained
effective internal control over financial reporting as of December 31, 2004, is
fairly stated, in all material respects, based on the criteria established in
Internal Control--Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Also in our opinion, the Partnership
maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2004, based on the criteria established in
Internal Control--Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the financial statements as of and
for the year ended December 31, 2004 of the Partnership and our report dated
March 11, 2005 expressed an unqualified opinion on those financial statements.

/s/ Deloitte & Touche LLP

New York, New York
March 11, 2005

DEAN WITTER PRINCIPAL PLUS FUND L.P.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Limited Partners and the General Partner:

We have audited the accompanying consolidated statements of financial
condition of Dean Witter Principal Plus Fund L.P. (the "Partnership") and its
subsidiary Dean Witter Principal Plus Fund Management L.P. (the "Trading
Company"), including the consolidated schedules of investments, as of December
31, 2004 and 2003, and the related consolidated statements of operations,
changes in partners' capital, and cash flows for each of the three years in the
period ended December 31, 2004. These consolidated financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.

We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the consolidated financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall consolidated financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the consolidated financial position of the Partnership and
the Trading Company at December 31, 2004 and 2003, and the consolidated results
of their operations and their cash flows for each of the three years in the
period ended December 31, 2004, in conformity with accounting principles
generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the effectiveness of the
Partnership's internal control over financial reporting as of December 31,
2004, based on the criteria established in Internal Control--Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated March 11, 2005 expressed an unqualified opinion
on management's assessment of the effectiveness of the Partnership's internal
control over financial reporting and an unqualified opinion on the
effectiveness of the Partnership's internal control over financial reporting.

/s/ Deloitte & Touche LLP
New York, New York
March 11, 2005

DEAN WITTER PRINCIPAL PLUS FUND L.P.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

DECEMBER 31,
----------------------
2004 2003
---------- ----------
$ $

ASSETS
Equity in futures interests trading accounts:
Cash 22,881,606 26,475,763
Net unrealized gain on open contracts
(MS&Co.) 188,733 633,291
Net unrealized gain (loss) on open
contracts (MSIL) (31,009) 203,735
---------- ----------
Total net unrealized gain on open
contracts 157,724 837,026
Net option premium -- (11,000)
---------- ----------
Total Trading Equity 23,039,330 27,301,789
Interest receivable (Morgan Stanley DW) 36,748 20,168
---------- ----------
Total Assets 23,076,078 27,321,957
========== ==========

LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Redemptions payable 579,359 447,519
Accrued administrative expenses 119,556 211,963
Accrued brokerage fees (Morgan Stanley DW) 76,522 90,367
Accrued management fees 19,130 22,592
---------- ----------
Total Liabilities 794,567 772,441
---------- ----------
Minority Interest 13,000 25,518
---------- ----------
PARTNERS' CAPITAL
Limited Partners (11,149.771 and
12,764.514 Units, respectively) 21,965,072 26,207,748
General Partner (154.030 Units) 303,439 316,250
---------- ----------
Total Partners' Capital 22,268,511 26,523,998
---------- ----------
Total Liabilities and
Partners' Capital 23,076,078 27,321,957
========== ==========
NET ASSET VALUE PER UNIT 1,970.00 2,053.17
========== ==========

The accompanying notes are an integral part of these consolidated financial
statements.

DEAN WITTER PRINCIPAL PLUS FUND L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED
DECEMBER 31,
---------------------------------
2004 2003 2002
---------- ---------- ---------
$ $ $

INVESTMENT INCOME
Interest income (Morgan Stanley DW) 286,825 1,205,905 1,868,607
Change in value of Yield Pool -- (914,023) (716,416)
---------- ---------- ---------
Total Investment Income 286,825 291,882 1,152,191
---------- ---------- ---------
EXPENSES
Brokerage fees (Morgan Stanley DW) 985,617 1,256,424 1,398,817
Management fees 246,404 314,106 349,705
Administrative expenses 117,000 199,000 123,000
Transaction fees and costs 42,383 37,517 41,178
---------- ---------- ---------
Total Expenses 1,391,404 1,807,047 1,912,700
---------- ---------- ---------
NET INVESTMENT LOSS (1,104,579) (1,515,165) (760,509)
---------- ---------- ---------
TRADING RESULTS
Trading profit (loss):
Realized 703,588 40,757 458,130
Net change in unrealized (679,302) 833,966 (372,008)
---------- ---------- ---------
24,286 874,723 86,122
Proceeds from Litigation Settlement 7,113 -- 722,195
---------- ---------- ---------
Total Trading Results 31,399 874,723 808,317
---------- ---------- ---------
NET INCOME (LOSS) BEFORE
MINORITY INTEREST (1,073,180) (640,442) 47,808
Less: Minority interest (12,518) (33,904) (63,005)
---------- ---------- ---------
NET INCOME (LOSS) (1,060,662) (606,538) 110,813
========== ========== =========
NET INCOME (LOSS) ALLOCATION:
Limited Partners (1,047,851) (595,526) 113,373
General Partner (12,811) (11,012) (2,560)
---------- ---------- ---------
NET INCOME (LOSS) (1,060,662) (606,538) 110,813
Less: Change in excess of market value
over amortized cost of zero-coupon
U.S. Treasury Securities -- (914,023) (716,416)
---------- ---------- ---------
NET INCOME (LOSS)
ALLOCATED TO PARTNERS
FOR TAX AND NET ASSET
VALUATION (1,060,662) 307,485 827,229
========== ========== =========
NET INCOME (LOSS) ALLOCATION FOR
TAX AND NET ASSET VALUATION
Limited Partners (1,047,851) 303,758 815,268
General Partner (12,811) 3,727 11,961

NET INCOME (LOSS) PER UNIT FOR TAX
AND NET ASSET VALUATION
Limited Partners (83.17) 21.71 47.99
General Partner (83.17) 21.71 47.99

The accompanying notes are an integral part of these consolidated financial
statements.

DEAN WITTER PRINCIPAL PLUS FUND L.P.

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 2004, 2003, AND 2002

UNITS OF
PARTNERSHIP LIMITED GENERAL
INTEREST PARTNERS PARTNER TOTAL
----------- ---------- -------- ----------
$ $ $

Partners' Capital,
December 31, 2001 17,989.656 36,673,490 638,822 37,312,312
Net income (loss) -- 113,373 (2,560) 110,813
Redemptions (1,513.284) (2,918,991) (119,000) (3,037,991)
---------- ---------- -------- ----------
Partners' Capital,
December 31, 2002 16,476.372 33,867,872 517,262 34,385,134
Net loss -- (595,526) (11,012) (606,538)
Redemptions (3,557.828) (7,064,598) (190,000) (7,254,598)
---------- ---------- -------- ----------
Partners' Capital,
December 31, 2003 12,918.544 26,207,748 316,250 26,523,998
Net loss -- (1,047,851) (12,811) (1,060,662)
Redemptions (1,614.743) (3,194,825) -- (3,194,825)
---------- ---------- -------- ----------
Partners' Capital,
December 31, 2004 11,303.801 21,965,072 303,439 22,268,511
========== ========== ======== ==========

The accompanying notes are an integral part of these consolidated financial
statements.

DEAN WITTER PRINCIPAL PLUS FUND L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED
DECEMBER 31,
----------------------------------
2004 2003 2002
---------- ---------- ----------
$ $ $

CASH FLOWS FROM
OPERATING
ACTIVITIES
Net income (loss) (1,060,662) (606,538) 110,813
Noncash items included in net
income (loss):
Net change in unrealized 679,302 (833,966) 372,008
Change in value of Yield
Pool -- 914,023 716,416
(Increase) decrease in
operating assets:
Net option premiums (11,000) 343,375 (332,375)
Interest receivable
(Morgan Stanley DW) (16,580) (17,925) 2,968
Investment in zero-coupon
U.S. Treasury Securities -- 32,138,219 775,078
Increase (decrease) in
operating liabilities:
Accrued administrative
expenses (92,407) 78,121 (31,123)
Accrued brokerage fees
(Morgan Stanley DW) (13,845) (24,594) (6,377)
Accrued management fees (3,462) (6,148) (1,594)
---------- ---------- ----------
Net cash provided by (used
for) operating activities (518,654) 31,984,567 1,605,814
---------- ---------- ----------

CASH FLOWS FROM
FINANCING ACTIVITIES
Increase (decrease) in
redemptions payable 131,840 (366,381) 368,447
Decrease in minority interest (12,518) (33,904) (63,005)
Redemptions of Units (3,194,825) (7,254,598) (3,037,991)
---------- ---------- ----------
Net cash used for financing
activities (3,075,503) (7,654,883) (2,732,549)
---------- ---------- ----------

Net increase (decrease) in cash (3,594,157) 24,329,684 (1,126,735)

Balance at beginning of period 26,475,763 2,146,079 3,272,814
---------- ---------- ----------

Balance at end of period 22,881,606 26,475,763 2,146,079
========== ========== ==========

The accompanying notes are an integral part of these consolidated financial
statements.

DEAN WITTER PRINCIPAL PLUS FUND L.P.

CONSOLIDATED SCHEDULES OF INVESTMENTS

DECEMBER 31, 2004 AND 2003

LONG UNREALIZED PERCENTAGE SHORT UNREALIZED PERCENTAGE NET UNREALIZED
FUTURES AND FORWARD CONTRACTS: GAIN/(LOSS) OF NET ASSETS GAIN/(LOSS) OF NET ASSETS GAIN/(LOSS)
- ------------------------------ --------------- ------------- ---------------- ------------- --------------
2004 PARTNERSHIP NET ASSETS:
$22,268,511 $ % $ % $

Commodity (45,429) (0.20) 23,311 0.10 (22,118)
Equity 172,980 0.78 -- -- 172,980
Foreign currency 54,200 0.24 3,141 0.01 57,341
Interest rate 3,230 0.02 39,256 0.18 42,486
------- ----- ------ ----- -------
Grand Total: 184,981 0.84 65,708 0.29 250,689
======= ===== ====== =====
Unrealized Currency Loss (92,965)
-------
Total Net Unrealized Gain per
Statement of Financial Condition 157,724
=======

2003 PARTNERSHIP NET ASSETS:
$26,523,998
Commodity 200,222 0.75 (2,050) (0.01) 198,172
Equity 389,000 1.47 -- -- 389,000
Foreign currency 170,018 0.64 32,498 0.12 202,516
Interest rate 75,683 0.29 -- -- 75,683
------- ----- ------ ----- -------
Grand Total: 834,923 3.15 30,448 0.11 865,371
======= ===== ====== =====
Unrealized Currency Loss (28,345)
-------
Total Net Unrealized Gain per
Statement of Financial Condition 837,026
=======

The accompanying notes are an integral part of these consolidated financial
statements.

DEAN WITTER PRINCIPAL PLUS FUND L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION. Dean Witter Principal Plus Fund L.P. (the "Partnership") is a
limited partnership organized to engage primarily in the speculative trading of
futures contracts, options on futures contracts, and forward contracts on
physical commodities, and other commodity interests (collectively, "Futures
Interests").
The Partnership's general partner is Demeter Management Corporation
("Demeter"). The non-clearing commodity broker is Morgan Stanley DW Inc.
("Morgan Stanley DW"). The clearing commodity brokers are Morgan Stanley & Co.
Incorporated ("MS&Co.") and Morgan Stanley & Co. International Limited
("MSIL"). Demeter, Morgan Stanley DW, MS&Co., and MSIL are wholly-owned
subsidiaries of Morgan Stanley. The trading advisor to the Partnership is
SSARIS Advisors, LLC (the "Trading Advisor").
Prior to August 31, 2003, part of the Partnership's objective was to achieve
long-term appreciation while assuring investors at least a 3% compound annual
rate of return over approximately seven and one-half years from February 1,
1996 through August 31, 2003 (the "Guarantee Period"). At the end of Guarantee
Period the Net Asset Value per limited partnership interest ("Unit(s)") was
guaranteed to be at least $1,961.00 per Unit. To accomplish this objective the
Partnership initially invested approximately 80% of the Partnership's assets in
zero-coupon U.S. Treasury Securities (the "Yield Pool"). The Partnership's
remaining assets were contributed to its subsidiary, Dean Witter Principal Plus
Fund Management L.P. (the "Trading Company"), which was established solely to
trade in Futures Interests on behalf of the Partnership.
At the end of the Guarantee Period on August 31, 2003, the Net Asset Value
per Unit was $2,058.58, greater than the guaranteed Net Asset Value of at least
$1,961.00 per Unit. The zero-coupon U.S. Treasury Securities matured and the
Yield Pool was liquidated on August 31, 2003. The proceeds from its liquidation
were invested in and will continue to be used in the trading of Futures
Interests described above without any guarantee with respect to the Net Asset
Value per Unit at any future date.

DEAN WITTER PRINCIPAL PLUS FUND L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

Effective June 20, 2002, Morgan Stanley Dean Witter & Co. changed its name to
Morgan Stanley.
Effective December 6, 2002, SSARIS Advisors, LLC ("SSARIS") replaced RXR Inc.
as Trading Advisor to the Partnership. SSARIS acquired RXR's trading program
and there has been no change in trading strategy.
Demeter is required to maintain a 1% minimum interest in the equity of the
Partnership and income (losses) are shared by Demeter and the limited partners
based upon their proportional ownership interests.

USE OF ESTIMATES. The financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America, which
require management to make estimates and assumptions that affect the reported
amounts in the financial statements and related disclosures. Management
believes that the estimates utilized in the preparation of the financial
statements are prudent and reasonable. Actual results could differ from those
estimates.

PRINCIPLES OF CONSOLIDATION. The consolidated financial statements include the
accounts of the Partnership and the Trading Company. All intercompany balances
have been eliminated.
The ownership by Demeter in the Trading Company represents a minority
interest in the Partnership. Demeter's share of the Trading Company's profits
or losses is deducted from consolidated results of operations.

REVENUE RECOGNITION. Prior to the end of the Guarantee Period, the Yield Pool
was valued at cost plus accreted interest with the accumulated unrealized gain
(loss) on the zero-coupon U.S. Treasury Securities separately disclosed. The
annual change in the Yield Pool's market value was reflected on the
Consolidated Statements of Operations. The Consolidated Statements of Financial
Condition and the Consolidated Statements of Operations have been reconciled to
reflect Net Assets, Net Asset Value per Unit and net income (loss) in
accordance with the terms of the Limited Partnership Agreement.

DEAN WITTER PRINCIPAL PLUS FUND L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

The following information pertains to the Yield Pool at December 31, 2004 and
2003:

2004 2003
---- ---------
$ $

Accreted Interest Income for the year -- 1,095,283

Futures Interests are open commitments until settlement date, at which time
they are realized. They are valued at market on a daily basis and the resulting
net change in unrealized gains and losses is reflected in the change in
unrealized trading profit (loss) on open contracts from one period to the next
on the Consolidated Statements of Operations. Monthly, Morgan Stanley DW pays
interest income on 100% and 90% of the Partnership's and the Trading Company's,
respectively, average daily Net Assets as defined in the Limited Partnership
Agreement for the month at a prevailing rate on U.S. Treasury bills. For
purposes of such interest payments, Net Assets do not include monies owed to
the Partnership and the Trading Company on Futures Interests.

NET INCOME (LOSS) PER UNIT. Net income (loss) per Unit of limited partnership
interest is computed using the weighted average number of Units outstanding
during the period.

CONDENSED SCHEDULES OF INVESTMENTS. In December 2003, the American Institute
of Certified Public Accountants' Accounting Standards Executive Committee
issued Statement of Position 03-4 ("SOP 03-4") "Reporting Financial Highlights
and Schedule of Investments by Nonregistered Investment Partnerships: An
Amendment to the Audit and Accounting Guide Audits Of Investment Companies and
AICPA Statement of Position 95-2, Financial Reporting By Nonpublic Investment
Partnerships". SOP 03-4 requires commodity pools to disclose the number of
contracts, the contracts' expiration dates, and the cumulative unrealized
gains/(losses) on open futures contracts, when the cumulative unrealized
gains/(losses) on an open futures contract exceeds 5% of Net Assets, taking
long and short positions into account separately. SOP 03-4 also requires ratios
for net investment income/(losses), expenses before and after incentive fees,
and net income/(losses) based on average net assets, and ratios for total
return before and after

DEAN WITTER PRINCIPAL PLUS FUND L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

incentive fees based on average units outstanding to be disclosed in Financial
Highlights. SOP 03-4 was effective for fiscal years ending after December 15,
2003.

EQUITY IN FUTURES INTERESTS TRADING ACCOUNTS. The Partnership's asset "Equity
in futures interests trading accounts," reflected on the Consolidated
Statements of Financial Condition, consists of (A) cash on deposit with Morgan
Stanley DW, MS&Co., and MSIL to be used as margin for trading; (B) net
unrealized gains or losses on open contracts, which are valued at market and
calculated as the difference between original contract value and market value;
and (C) net option premiums, which represent the net of all monies paid and/or
received for such option premiums.
The Partnership, in the normal course of business, enters into various
contracts with MS&Co. and MSIL acting as its commodity brokers. Pursuant to
brokerage agreements with MS&Co. and MSIL, to the extent that such trading
results in unrealized gains or losses, the amounts are offset and reported on a
net basis on the Partnership's Consolidated Statements of Financial Condition.
The Partnership has offset the fair value amounts recognized for forward
contracts executed with the same counterparty as allowable under the terms of
its master netting agreement with MS&Co., the sole counterparty on such
contracts. The Partnership has consistently applied its right to offset.

BROKERAGE FEES AND RELATED TRANSACTION FEES AND COSTS. The monthly brokerage
fee is equal to 1/3 of 1% per month (a 4% annual rate) of the Partnership's
adjusted month-end Net Assets. Transaction fees and costs are accrued on a
half-turn basis. In 2004, 2003, and 2002, the brokerage fees charged were the
equivalent of a roundturn commission charge of approximately $119, $163, and
$170, respectively, per contract traded.

OPERATING EXPENSES. The Partnership bears all operating expenses related to
its trading activities. These include filing fees, clerical, administrative,
auditing, accounting, mailing, printing, and other incidental operating
expenses as permitted by the Limited Partner-

DEAN WITTER PRINCIPAL PLUS FUND L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

ship Agreement. In addition, the Partnership incurs a monthly management fee
and may incur an incentive fee. Demeter bears all other operating expenses.

REDEMPTIONS. Limited partners may redeem some or all of their Units at 100% of
the Net Asset Value per Unit as of the last day of any month upon five business
days advance notice by redemption form to Demeter.
Prior to August 31, 2003 the limited partners could redeem some or all of
their Units at 100% of the Net Asset Value per Unit as of the last day of any
calendar quarter upon five business days advance notice by redemption form to
Demeter.
During 2003 and 2002, the Partnership sold securities in the Yield Pool in
order to fund redemptions as detailed below, no securities were sold in 2004:

2004 2003 2002
---- --------- ---------
$ $ $

Cost of Securities Sold -- 2,086,473 1,820,659
Interest Accreted on Securities Sold -- 1,043,029 781,186
Proceeds from Sale of Securities -- 3,165,925 2,701,992

DISTRIBUTIONS. The Partnership did not make any distributions during the
Guarantee Period, and thereafter. Distributions, other than redemptions of
Units, will be made on a pro-rata basis at the sole discretion of Demeter. No
distributions have been made to date. Demeter does not intend to make any
distributions of the Partnership's profits.

INCOME TAXES. No provision for income taxes has been made in the accompanying
consolidated financial statements, as partners are individually responsible for
reporting income or loss based upon their respective share of the Partnership's
revenues and expenses for income tax purposes.

DISSOLUTION OF THE PARTNERSHIP. The Partnership will terminate on December 31,
2025, or at an earlier date if certain conditions set forth in the Limited
Partnership Agreement occur.
The Trading Company may terminate operations if its Net Assets decline to 5%
or less of consolidated Partnership Net Assets, and will terminate operations
if its Net Assets decline to less than 3% of consolidated Part-

DEAN WITTER PRINCIPAL PLUS FUND L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

nership Net Assets. At December 31, 2004 and 2003, the Trading Company had Net
Assets of $15,022,834 and $16,209,606, respectively, which represented 67% and
61% respectively, of the consolidated Partnership's Net Assets at the
respective dates.

LITIGATION SETTLEMENT. On February 27, 2002, the Partnership received
notification of a preliminary entitlement to payment from the Sumitomo Copper
Litigation Settlement Administrator, and the Partnership received settlement
award payments in the amount of $722,195 during August 2002 and $7,113 during
July 2004. Any amounts received are accounted for in the period received, for
the benefit of the limited partners at the date of receipt.

RECLASSIFICATIONS. Certain reclassifications have been made to the prior
years' financial statements to conform to the current year presentation. Such
reclassifications have no impact on the Partnership's reported net income
(loss).

- --------------------------------------------------------------------------------
2. RELATED PARTY TRANSACTIONS
The Trading Company pays a monthly brokerage fee to Morgan Stanley DW as
described in Note 1. The Partnership's and Trading Company's cash is on deposit
with Morgan Stanley DW, MS&Co., and MSIL in futures interests trading accounts
to meet margin requirements as needed. Morgan Stanley DW pays interest on these
funds as described in Note 1. Pursuant to the Limited Partnership Agreement,
Demeter initially invested $200,000 of General Partnership Interest in the
Trading Company.

- --------------------------------------------------------------------------------
3. TRADING ADVISOR
Compensation to SSARIS consists of a management fee and an incentive fee as
follows:

MANAGEMENT FEE. The Partnership pays a monthly management fee equal to 1/12
of 1% per month (a 1% annual rate) of the Partnership's adjusted Net Assets, as
defined in the Limited Partnership Agreement, as of the last day of each month.

INCENTIVE FEE. The Partnership pays an annual incentive fee to SSARIS equal to
15% of the "New

DEAN WITTER PRINCIPAL PLUS FUND L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

Appreciation", as defined in the Limited Partnership Agreement, of the Trading
Company's Net Assets as of the end of each annual incentive period ending
December 31. Such incentive fee is accrued in each month in which New
Appreciation occurs. In those months in which New Appreciation is negative,
previous accruals, if any, during the incentive period are reduced.

- --------------------------------------------------------------------------------
4. FINANCIAL INSTRUMENTS
The Partnership trades Futures Interests. Futures and forwards represent
contracts for delayed delivery of an instrument at a specified date and price.
Risk arises from changes in the value of these contracts and the potential
inability of counterparties to perform under the terms of the contracts. There
are numerous factors which may significantly influence the market value of
these contracts, including interest rate volatility.
The market value of exchange-traded contracts is based on the settlement
price quoted by the exchange on the day with respect to which market value is
being determined. If an exchange-traded contract could not have been liquidated
on such day due to the operation of daily limits or other rules of the
exchange, the settlement price shall be the settlement price on the first
subsequent day on which the contract could be liquidated. The market value of
off-exchange-traded contracts is based on the fair market value quoted by the
counterparty.
The Partnership's contracts are accounted for on a trade-date basis and
marked to market on a daily basis. The Partnership accounts for its derivative
investments in accordance with the provisions of Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and
Hedging Activities" ("SFAS No. 133"). SFAS No. 133 defines a derivative as a
financial instrument or other contract that has all three of the following
characteristics:

(1)One or more underlying notional amounts or payment provisions;

(2)Requires no initial net investment or a smaller initial net investment than
would be required relative to changes in market factors;

(3)Terms require or permit net settlement.

DEAN WITTER PRINCIPAL PLUS FUND L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)

Generally, derivatives include futures, forward, swaps or options contracts,
and other financial instruments with similar characteristics such as caps,
floors, and collars.
The net unrealized gains on open contracts at December 31, reported as a
component of "Equity in futures interests trading accounts" on the Consolidated
Statements of Financial Condition, and their longest contract maturities were
as follows:

NET UNREALIZED GAINS
ON OPEN CONTRACTS LONGEST MATURITIES
--------------------------- -------------------
OFF- OFF-
EXCHANGE- EXCHANGE- EXCHANGE- EXCHANGE-
YEAR TRADED TRADED TOTAL TRADED TRADED
- ---- --------- --------- ------- --------- ---------
$ $ $

2004 140,369 17,355 157,724 Mar. 2005 Mar. 2005
2003 816,989 20,037 837,026 Mar. 2004 Mar. 2004

The Partnership has credit risk associated with counterparty nonperformance.
The credit risk associated with the instruments in which the Partnership trades
is limited to the amounts reflected on the Partnership's Consolidated
Statements of Financial Condition.
The Partnership also has credit risk because Morgan Stanley DW, MS&Co., and
MSIL act as the futures commission merchants or the counterparties, with
respect to most of the Partnership's assets. Exchange-traded futures, forward,
and futures-styled options contracts are marked to market on a daily basis,
with variations in value settled on a daily basis. Morgan Stanley DW, MS&Co.,
and MSIL, each as a futures commission merchant for the Partnership's
exchange-traded futures, forward, and futures-styled options contracts, are
required, pursuant to regulations of the Commodity Futures Trading Commission,
to segregate from their own assets, and for the sole benefit of their commodity
customers, all funds held by them with respect to exchange-traded futures,
forward, and futures-styled options contracts, including an amount equal to the
net unrealized gains (losses) on all open futures, forward, and futures-styled
options contracts, which funds, in the aggregate, totaled $23,021,975 and
$27,292,752 at December 31, 2004 and 2003, respectively. With respect to the
Partnership's off- exchange-traded forward currency contracts, there are no
daily exchange-required settlements of variation in value,

DEAN WITTER PRINCIPAL PLUS FUND L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(concluded)

nor is there any requirement that an amount equal to the net unrealized gains
(losses) on open forward contracts be segregated. However, the Partnership is
required to meet margin requirements equal to the net unrealized loss on open
contracts in the Partnership accounts with the counterparty, which is
accomplished by daily maintenance of the cash balance in a custody account held
at Morgan Stanley DW for the benefit of MS&Co. With respect to those
off-exchange-traded forward currency contracts, the Partnership is at risk to
the ability of MS&Co., the sole counterparty on all such contracts, to perform.
The Partnership has a netting agreement with MS&Co. This agreement, which seeks
to reduce both the Partnership's and MS&Co.'s exposure on off-exchange-traded
forward currency contracts, should materially decrease the Partnership's credit
risk in the event of MS&Co.'s bankruptcy or insolvency.

- --------------------------------------------------------------------------------
5. FINANCIAL HIGHLIGHTS

PER UNIT:
---------

NET ASSET VALUE, JANUARY 1, 2004: $2,053.17
---------
NET OPERATING RESULTS:
Interest Income 23.42
Expenses (113.62)
Realized Profit 60.90
Unrealized Loss (55.47)
Proceeds from Litigation Settlement 0.58
---------
Loss before Minority Interest (84.19)
Add: Minority Interest 1.02
---------
Net Loss (83.17)
---------
NET ASSET VALUE, DECEMBER 31, 2004: $1,970.00
=========
RATIOS TO AVERAGE NET ASSETS:

Net Investment Loss (4.6)%
Expenses before Incentive Fees (5.7)%
Expenses after Incentive Fees (5.7)%
Net Loss (4.4)%

TOTAL RETURN BEFORE INCENTIVE FEES (4.1)%
TOTAL RETURN AFTER INCENTIVE FEES (4.1)%
INCEPTION-TO-DATE RETURN 97.0 %
COMPOUND ANNUALIZED RETURN 4.7 %

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Demeter Management Corporation
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