MORGAN STANLEY SPECTRUM SELECT LP - 10-K Annual Report

Back to GetFilings.com

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, 2001 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 0-19511

MORGAN STANLEY SPECTRUM SELECT L.P.

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

DELAWARE 13-3619290
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

Demeter Management Corporation
c/o Managed Futures Department,
825 Third Avenue, 8th Floor,
New York, NY 10022
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (201) 876-4647

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]

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 a specified
date within 60 days prior to the date of filing: $235,810,682 at January 31,
2002.

DOCUMENTS INCORPORATED BY REFERENCE
(See Page 1)

MORGAN STANLEY SPECTRUM SELECT L.P.
(formerly, "Morgan Stanley Dean Witter Spectrum Select L.P.")
INDEX TO ANNUAL REPORT ON FORM 10-K
DECEMBER 31, 2001

Page No.

DOCUMENTS INCORPORATED BY REFERENCE. . . . . . . . . . . . . . . . . 1

Part I .

Item 1. Business. . . . . . . . . . . . . . . . . . . . . . . . 2-6

Item 2. Properties. . . . . . . . . . . . . . . . . . . . . . . . 6

Item 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . .6

Item 4. Submission of Matters to a Vote of Security Holders. . . .6

Part II.

Item 5. Market for the Registrant's Partnership Units
and Related Security Holder Matters . . . . . . . . . . 7-8

Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . 9

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . 10-22

Item 7A. Quantitative and Qualitative Disclosures About
Market Risk . . . . . . . . . . . . . . . . . . . . . 22-35

Item 8. Financial Statements and Supplementary Data. . .. . . . ..35

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure. . . . . . . . . . . .36

Part III.

Item 10. Directors and Executive Officers of the Registrant . 37-41

Item 11. Executive Compensation . . . . . . . . . . . . . . . . . 41

Item 12. Security Ownership of Certain Beneficial Owners
and Management . . . . . . . . . . . . . . . . . . . 41-42

Item 13. Certain Relationships and Related Transactions . . . . . .42

Part IV.

Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K. . . . . . . . . . . . . . . . . 43-44

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
March 23, 2001 I

Partnership's Supplement to the
Prospectus dated December 6, 2001 I

Annual Report to Morgan Stanley
Spectrum Series Limited Partners
for the year ended December 31,
2001 II, III and IV

PART I
Item 1. BUSINESS
(a) General Development of Business. Morgan Stanley Spectrum
Select L.P. (the "Partnership") is a Delaware 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,
including but not limited to foreign currencies, financial
instruments, metals, energy and agricultural products. The
Partnership commenced operations on August 1, 1991. The
Partnership is one of the Morgan Stanley Spectrum Series
(formerly, "Morgan Stanley Dean Witter Spectrum Series") of funds,
comprised of the Partnership, Morgan Stanley Spectrum Commodity
L.P., Morgan Stanley Spectrum Currency L.P., Morgan Stanley
Spectrum Global Balanced L.P., Morgan Stanley Spectrum Strategic
L.P. and Morgan Stanley Spectrum Technical L.P. (collectively, the
"Spectrum Series").

On November 1, 2001, Morgan Stanley Dean Witter Spectrum Select
L.P., Morgan Stanley Dean Witter Spectrum Commodity L.P., Morgan
Stanley Dean Witter Spectrum Currency L.P., Morgan Stanley Dean
Witter Spectrum Global Balanced L.P., Morgan Stanley Dean Witter
Spectrum Strategic L.P., and Morgan Stanley Dean Witter Spectrum
Technical L.P., were renamed Morgan Stanley Spectrum Select L.P.,
Morgan Stanley Spectrum Commodity L.P., Morgan Stanley Spectrum

Currency L.P., Morgan Stanley Spectrum Global Balanced L.P.,
Morgan Stanley Spectrum Strategic L.P. and Morgan Stanley Spectrum
Technical L.P., respectively.

The 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. Inc. ("MS & Co.") and Morgan Stanley & Co.
International Limited ("MSIL"). Demeter, Morgan Stanley DW, MS &
Co. and MSIL are wholly-owned subsidiaries of Morgan Stanley Dean
Witter & Co. ("MSDW"). The trading advisors to the Partnership
are EMC Capital Management, Inc., Rabar Market Research, Inc.,
Sunrise Capital Management, Inc., and Northfield Trading L.P.
(collectively, the "Trading Advisors").

Effective April 2, 2001, Dean Witter Reynolds Inc. changed its
name to Morgan Stanley DW Inc.

Effective May 1, 2001, the Partnership entered into a management
agreement with Northfield Trading L.P. ("Northfield") adding
Northfield as its fourth Trading Advisor to the Partnership.

The managing underwriter for the Spectrum Series is Morgan
Stanley DW.

Units of limited partnership interest ("Unit(s)") are offered for
sale at monthly closings at a price equal to 100% of the net
asset value per Unit at the close of business on the last day of
each month.

The Partnership's net asset value per Unit at December 31, 2001
was $23.96, representing an increase of 1.65 percent from the net
asset value per Unit of $23.57 at December 31, 2000. For a more
detailed description of the Partnership's business, see
subparagraph (c).

(b) Financial Information about Segments. For financial
information reporting purposes, the Partnership is deemed to
engage in one industry segment, the speculative trading of
futures, forwards, and options. 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 Advisors.
For a detailed description of the different facets of the
Partnership's business, see those portions of the Partnership's
prospectus, dated March 23, 2001 (the "Prospectus"), and the
Partnership's supplement to the Prospectus dated December 6, 2001
(the "Supplement"), incorporated by reference in this Form 10-K,
set forth below.

Facets of Business
1. Summary 1. "Summary" (Pages 1-8 of
the Prospectus and Page
S-2 of the Supplement).

2. Futures, Options, and 2. "The Futures, Options, and
Forwards Markets Forwards Markets" (Pages
145-149 of the Prospectus).

3. Partnership's Trading 3. "Use of Proceeds" (Page
Arrangements and 26-28 of the Prospectus
Policies and Page S-5 of the
Supplement) "The
Trading Advisors"
(Pages 71-123 of the
Prospectus and Pages
S-33-S-43 of the Supple-
ment).

4. Management of the Part- 4. "The Trading Advisors -
nership The Management Agree-
ments" (Page 71 of the
Prospectus), "The
General Partner" (Pages
66-70 of the Prospectus
and Pages S-31 - S-32 of
the Supplement), "The Com-
modity Brokers" (Pages
125-127 of the Prospec-
tus) and "The Limited
Partnership Agreements"
(Pages 128-131 of the
Prospectus).

5. Taxation of the Partner- 5. "Material Federal Income
ship's Limited Partners Tax Considerations" and
"State and Local Income Tax
Aspects" (Pages 136-143 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.

Item 2. PROPERTIES
The 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 825 Third Avenue, 8th
Floor, New York, NY 10022.

Demeter changed its address from 2 World Trade Center, New York,
NY 10048.

Item 3. LEGAL PROCEEDINGS
In April 2001, the Appellate Division of New York State dismissed
the class action previously disclosed in the Partnership's Form
10-K for the year ended December 31, 2000. Because plaintiffs did
not exercise their right to appeal any further, this dismissal
constituted a final resolution of the case.

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, 2001 was
approximately 18,634.

(c) Distributions
No distributions have been made by the Partnership since it
commenced trading operations on August 1, 1991. 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 distribution of Partnership profits.

(d) Use of Proceeds
Units are sold at monthly closings as of the last day of each
month at a price equal to 100% of the net asset value per Unit as
of the date of such monthly closing.

Through December 31, 2001, 21,179,165.261 Units were sold, leaving
4,434,801.839 Units unsold at December 31, 2001. The aggregate

price of the Units sold through December 31, 2001 was
$350,924,568.

Since no expenses are chargeable against proceeds, 100% of the
proceeds of the offering have been applied to the working capital
of the Partnership for use in accordance with the "Use of
Proceeds" section of the Prospectus and the Supplement.

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

The Partnership's investment in futures, forwards, and options
may, from time to time, be illiquid. Most U.S. futures exchanges
limit fluctuations in prices during a single day by regulations
referred to as "daily price fluctuations limits" or "daily
limits". Trades may not be executed at prices beyond the daily
limit. If the price for a particular futures or options contract
has increased or decreased by an amount equal to the daily limit,
positions in that futures or options contract can neither be taken
nor liquidated unless traders are willing to effect trades at or

within the limit. Futures prices have occasionally moved the
daily limit for several consecutive days with little or no
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.

The Partnership has never had illiquidity affect a material
portion of its assets.

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

Results of Operations.
General. The Partnership's results depend on the Trading Advisors
and the ability of each Trading Advisor's trading program to take
advantage of price movements or other profit opportunities in the
futures, forwards, and options markets. The following presents a
summary of the Partnership's operations for the three years ended
December 31, 2001 and a general discussion of its trading
activities during each period. It is important to note, however,
that the Trading Advisors trade in various markets at different
times and that prior activity in a particular market does not mean
that such market will be actively traded by the Trading Advisors
or will be profitable in the future. Consequently, the results of
operations of the Partnership are difficult to discuss other than
in the context of the Trading Advisors' trading activities on
behalf of the Partnership and how the Partnership has performed in
the past.

At December 31, 2001, the Partnership's total capital was
$241,411,585, an increase of $20,681,616 from the Partnership's
total capital of $220,729,969 at December 31, 2000. For the year
ended December 31, 2001, the Partnership generated net income of
$3,165,349, total subscriptions aggregated $41,261,535 and total
redemptions aggregated $23,745,268.

For the year ended December 31, 2001, the Partnership recorded
total trading revenues, including interest income, of $30,468,895
and posted an increase in net asset value per Unit. The most
significant gains of approximately 8.2% were recorded in the
global interest rate futures markets primarily during August,
September and October from previously established long positions
in short and intermediate term U.S. interest rate futures as
prices continued trending higher following interest rate cuts by
the U.S. and European central banks and as investors sought a
safe-haven from the decline in stock prices. Additional gains
were recorded throughout the majority of the first quarter from
previously established long positions in Japanese government bond
futures as prices moved higher on concerns regarding that
country's economy. In the global stock index futures markets,
profits of approximately 5.1% were recorded throughout a majority
of the third quarter from previously established short positions
in DAX, Hang Seng, Nikkei and S&P 500 Index futures as the trend
in equity prices continued sharply lower amid worries regarding
global economic uncertainty. A portion of the Partnership's
overall gains was partially offset by losses of approximately
2.6% recorded in the energy markets throughout a majority of the
fourth quarter from volatile price movement in natural gas
futures as a result of a continually changing outlook for supply,
production and demand. In the currency markets, losses of
approximately 0.1% were recorded throughout a majority of the

fourth quarter from transactions involving the euro and Swiss
franc. Total expenses for the year were $27,303,546, resulting
in net income of $3,165,349. The net asset value of a Unit
increased from $23.57 at December 31, 2000 to $23.96 at December
31, 2001.

At December 31, 2000, the Partnership's total capital was
$220,729,969, an increase of $6,924,295 from the Partnership's
total capital of $213,805,674 at December 31, 1999. For the year
ended December 31, 2000, the Partnership generated net income of
$14,291,045, total subscriptions aggregated $28,581,403 and total
redemptions aggregated $35,948,153.

For the year ended December 31, 2000, the Partnership recorded
total trading revenues, including interest income, of $35,083,619
and posted an increase in net asset value per Unit. The most
significant gains of approximately 9.3% were recorded in the
global interest rate futures markets primarily during August,
November and December from long positions in U.S. interest rate
futures as prices climbed higher amid a drop in stock prices and
as fears of an economic slowdown drew investors to the perceived
safety of government securities. Additional gains were recorded
during December from long positions in European and Australian
interest rate futures as prices in these markets rose amid the
speculation that the U.S. Federal Reserve would lower interest
rates in the near future following their decision to switch to an

easing policy bias. In the currency markets, gains of
approximately 8.2% were recorded primarily during January, March,
April and October from short positions in the euro and the Swiss
franc as the value of these European currencies weakened relative
to the U.S. dollar amid skepticism about Europe's economic
outlook. In the energy markets, gains of approximately 4.0% were
recorded primarily during May, August, September, November and
December from long positions in natural gas futures as prices
trended upward, amid supply and storage concerns. A portion of
the Partnership's overall gains was partially offset by losses of
approximately 4.9% recorded in the global stock index futures
markets primarily during mid-April from long positions in U.S.
stock index futures as domestic equity prices declined following
the release of an unexpected jump in the Consumer Price Index.
During the first half of September, additional losses were
recorded from long positions in U.S. stock index futures as
prices declined due to jitters in the technology sector and a
worrisome spike in oil prices. In the metals markets, losses of
approximately 3.5% were experienced from long positions in copper
and aluminum futures as prices moved lower during February, May,
October and December, after concerns mounted that demand would
weaken amid a cooling of the U.S. economy. Total expenses for
the year were $20,792,574, resulting in net income of
$14,291,045. The net asset value of a Unit increased from $22.00
at December 31, 1999 to $23.57 at December 31, 2000.

At December 31, 1999, the Partnership's total capital was
$213,805,674, an increase of $13,723,158 from the Partnership's
total capital of $200,082,516 at December 31, 1998. For the year
ended December 31, 1999, the Partnership generated a net loss of
$16,694,414, total subscriptions aggregated $51,589,367 and total
redemptions aggregated $21,171,795.

For the year ended December 31, 1999, the Partnership recorded
total trading revenues, including interest income, of $4,778,950
and posted a decrease in net asset value per Unit. The
Partnership recorded a net loss during 1999 with losses of
approximately 3.27% being experienced primarily in the global
interest rate futures markets, particularly from short-term price
volatility in U.S. and European interest rate futures. Losses
were recorded during September from short positions in Australian
bond futures as prices spiked higher on technically based buying
and short covering. Losses of approximately 2.07% were also
recorded from short Japanese government bond futures positions
early in the first quarter as prices surged higher in response to
the Bank of Japan's aggressive easing of monetary policy.
Additional losses were experienced later in the first quarter
from newly established long positions as prices retreated
following comments by Bank of Japan Governor Hayami that he
expected interest rates in Japan to rise over time. In the
metals markets, losses of approximately 1.33% were experienced,

particularly during the month of March from long silver futures
positions as prices declined after Berkshire Hathaway's annual
report failed to provide any new information on the company's
silver positions. During October, additional losses were
recorded from long silver futures positions as prices decreased
following a reversal lower in gold prices. Offsetting gains were
recorded from long positions in gold futures as gold prices
soared during September following the Bank of England's second
gold auction and an announcement by several European central
banks stating that they were to restrict the sales of gold
reserves for five years. Gains of approximately 3.11% recorded
in the energy markets helped to mitigate overall Partnership
losses for the year. Long futures positions in crude oil and its
refined products proved profitable as oil prices trended
significantly higher largely attributed to the news that both
OPEC and non-OPEC countries had reached and adhered to an
agreement to cut total output. Total expenses for the year were
$21,473,364, resulting in a net loss of $16,694,414. The net
asset value of a Unit decreased from $23.80 at December 31, 1998
to $22.00 at December 31, 1999.

The Partnership's overall performance record represents varied
results of trading in different futures, forwards, and options
markets. For a further description of 2001 trading results, refer
to the letter to the Limited Partners in the accompanying Annual

Report to Limited Partners for the year ended December 31, 2001,
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.

Credit Risk.
Financial Instruments. The Partnership is a party to financial
instruments with elements of off-balance sheet market and credit
risk. The Partnership may trade futures, forwards, and options
in interest rates, stock indices, commodities, currencies,
petroleum and precious metals. 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
Advisors were unable to offset positions of the Partnership, the
Partnership could lose all of its assets investors would realize
a 100% loss.

In addition to the Trading Advisors' internal controls, the
Trading Advisors must comply with the trading policies of the
Partnership. These trading policies include standards for
liquidity and leverage with which the Partnership must comply.
The Trading Advisors and Demeter monitor the Partnership's

trading activities to ensure compliance with the trading
plicies. Demeter may require the Trading Advisors to modify
positions of the Partnership if Demeter believes they violate the
Partnership's trading policies.

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 contracts traded in the
United States and the 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. For example, a
clearinghouse may cover a default by drawing upon a defaulting
member's mandatory contributions and/or non-defaulting members'
contributions to a clearinghouse guarantee fund, established
lines or letters of credit with banks, and/or the clearinghouse's
surplus capital and other available assets of the exchange and
clearinghouse, or assessing its members. In cases where the
Partnership trades off-exchange forward contracts with a
counterparty, the sole recourse of the Partnership will be the
forward contracts counterparty.

There can be no assurance that a clearinghouse, exchange or
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. Any such obligation on the part of a broker appears
even less clear where the default occurs in a non-U.S.
jurisdiction.

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, calculating not only
the amount of margin required for it but also the amount of its
unrealized gains at each exchange, if any. The commodity brokers
inform the Partnership, as with all their customers, of its net
margin requirements for all its existing open positions, but do
not break that net figure down, exchange by exchange. Demeter,
however, has installed a system which permits it to monitor the
Partnership's potential margin liability, exchange by exchange.
As a result, Demeter is able to monitor the Partnership's
potential net credit exposure to each exchange by adding the
unrealized trading gains on that 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, in addition, a minimum amount of
diversification in the Partnership's trading, usually over
several different products. One of the aims of such trading
policies has been to reduce the credit exposure of the
Partnership to a single exchange and, historically, the
Partnership's exposure to one exchange has typically amounted to
only a small percentage of its total net assets. On those
relatively few occasions where the Partnership's credit exposure
may climb 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.

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

See "Financial Instruments" under Notes to Financial Statements
in the Partnership's Annual Report to Limited Partners for the
year ended December 31, 2001, which is incorporated by reference
to Exhibit 13.01 of this Form 10-K.

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 central, not incidental, to the
Partnership's main business activities.

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. Fluctuations in market risk based
upon these factors result in frequent changes in the fair value
of the Partnership's open positions, and, consequently, in its
earnings and cash flow.

The Partnership's total market risk is influenced by a wide
variety of factors, including the diversification among the
Partnership's open positions, the volatility present within the
markets, and the liquidity of the markets. At different times,
each of these factors may act to increase or decrease the market
risk associated with the Partnership.

The Partnership's past performance is not necessarily indicative
of its future results. Any attempt to numerically quantify the
Partnership's market risk is limited by the uncertainty of its
speculative trading. The Partnership's speculative trading may
cause future losses and volatility (i.e. "risk of ruin") that far
exceed the Partnership's experiences to date or any reasonable
expectations based upon historical changes in market value.

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

The Partnership accounts for open positions 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, whether realized or unrealized, and its
cash flow. Profits and losses on open positions of exchange-
traded futures, forwards, and options are settled daily through
variation margin.

The Partnership's risk exposure in the market sectors traded by
the Trading Advisors is estimated below in terms of Value at Risk
("VaR"). The VaR model used by the Partnership includes many
variables that could change the market value of the Partnership's
trading portfolio. The Partnership estimates VaR using a model
based upon historical simulation with a confidence level of 99%.
Historical simulation involves constructing a distribution of
hypothetical daily changes in the value of a trading portfolio.
The VaR model takes into account linear exposures to price and
interest rate risk. Market risks that are incorporated in the
VaR model include equity and commodity prices, interest rates,
foreign exchange rates, and correlation among these variables.
The hypothetical changes in portfolio value are based on daily
percentage changes observed in key market indices or other market
factors ("market risk factors") to which the portfolio is
sensitive. The historical observation period of the
Partnership's VaR is approximately four years. The one-day 99%

confidence level of the Partnership's VaR corresponds to the
negative change in portfolio value that, based on observed market
risk factors, would have been exceeded once in 100 trading days.

VaR models, including the Partnership's, are continuously
evolving as trading portfolios become more diverse and modeling
techniques and systems capabilities improve. Please note that
the VaR model is used to numerically quantify market risk for
historic reporting purposes only and is not utilized by either
Demeter or the Trading Advisors in their daily risk management
activities.

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, 2001 and 2000.
At December 31, 2001 and 2000, the Partnership's total
capitalization was approximately $241 million and $221 million,
respectively.
Primary Market December 31, 2001 December 31, 2000
Risk Category Value at Risk Value at Risk

Currency (1.36)% (0.58)%
Interest Rate (0.49) (2.33)
Equity (0.28) (0.55)
Commodity (0.41) (0.59)
Aggregate Value at Risk (1.55)% (2.65)%

Aggregate Value at Risk represents the aggregate VaR of all the
Partnership's open positions and not the sum of the VaR of the
individual market categories listed above. Aggregate VaR will be
lower as it takes into account correlation among different
positions and categories.

The table above represents the VaR of the Partnership's open
positions at December 31, 2001 and 2000 only and is not
necessarily representative of either the historic or future risk
of an investment in the Partnership. Because the Partnership's
only business is the speculative trading of futures, forwards,
and options, the composition of its trading portfolio can change
significantly over any given time period, or even within a single
trading day. Any changes in open positions could positively or
negatively materially impact market risk as measured by VaR.

The table below supplements the December 31, 2001 VaR by
presenting the Partnership's high, low and average VaR, as a
percentage of total net assets for the four quarterly reporting
periods from January 1, 2001 through December 31, 2001.

Primary Market Risk Category High Low Average
Currency (1.98)% (0.54)% (1.13)%
Interest Rate (1.46) (0.49) (1.03)
Equity (0.48) (0.28) (0.35)
Commodity (0.73) (0.41) (0.61)
Aggregate Value at Risk (2.10)% (1.55)% (1.79)%

Limitations on Value at Risk as an Assessment of Market Risk
The face value of the market sector instruments held by the
Partnership is typically many times the applicable margin
requirements. Margin requirements generally range between 2% and
15% of contract face value. Additionally, the use of leverage
causes the face value of the market sector instruments held by
the Partnership to typically be many times the total
capitalization of the Partnership. The value of the
Partnership's open positions thus creates a "risk of ruin" not
typically found in other investments. The relative size of the
positions held may cause the Partnership to incur losses greatly
in excess of VaR within a short period of time, given the effects
of the leverage employed and market volatility. The VaR tables
above, as well as the past performance of the Partnership, give
no indication of such "risk of ruin". In addition, VaR risk
measures should be viewed in light of the methodology's
limitations, which include the following:

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

The VaR tables above present the results of the Partnership's VaR
for each of the Partnership's market risk exposures and on an
aggregate basis at December 31, 2001, and 2000, and for the end
of the four quarterly reporting periods during calendar year
2001. Since VaR is based on historical data, VaR should not be
viewed as predictive of the Partnership's future financial
performance or its ability to manage or monitor risk. There can
be no assurance that the Partnership's actual losses on a
particular day will not exceed the VaR amounts indicated above or
that such losses will not occur more than once in 100 trading
days.

Non-Trading Risk
The Partnership has non-trading market risk on its foreign cash
balances not needed for margin. These balances and any market
risk they may represent are immaterial.

At December 31, 2001, the Partnership's cash balance at Morgan
Stanley DW was approximately 91% of its total net asset value. A
decline in short-term interest rates will result in a decline in
the Partnership's cash management income. This cash flow risk is
not considered material.

Materiality, as used throughout this section, is based on an
assessment of reasonably possible market movements and any
associated potential losses taking into account the leverage,
optionality and multiplier features of the Partnership's market-
sensitive instruments, 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 Advisors for managing such exposures are
subject to numerous uncertainties, contingencies and risks, any
one of which could cause the actual results of the Partnership's
risk controls to differ materially from the objectives of such
strategies. Government interventions, defaults and expro-
priations, 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, 2001, by market sector. It may be
anticipated, however, that these market exposures will vary
materially over time.

Currency. The primary market exposure of the Partnership at
December 31, 2001 was to the currency sector. The Partnership's
currency exposure was to exchange rate fluctuations, primarily
fluctuations which disrupt the historical pricing relationships

between different currencies and currency pairs. Interest rate
changes as well as political and general economic conditions
influence these fluctuations. The Partnership trades in a large
number of currencies, including cross-rates - i.e., positions
between two currencies other than the U.S. dollar. At December
31, 2001, the Partnership's major exposures were to Japanese yen
currency crosses and outright U.S. dollar positions. Outright
positions consist of the U.S. dollar vs. other currencies. These
other currencies include major and minor currencies. Demeter
does not anticipate that the risk profile of the Partnership's
currency sector will change significantly in the future. The
currency trading VaR figure includes foreign margin amounts
converted into U.S. dollars with an incremental adjustment to
reflect the exchange rate risk inherent to the dollar-based
Partnership in expressing VaR in a functional currency other than
dollars.

Interest Rate. The second largest market exposure at December 31,
2001 was to the global interest rate complex. The Partnership's
exposure in the interest rate market complex was primarily spread
across the U.S., Japanese and European interest rate sectors.
Interest rate movements directly affect the price of the
sovereign bond futures positions held by the Partnership and
indirectly affect the value of its stock index and currency
positions. Interest rate movements in one country as well as

relative interest rate movements between countries materially
impact the Partnership's profitability. The Partnership's
primary interest rate exposure is generally to interest rate
fluctuations in the United States and the other G-7 countries.
The G-7 countries consist of France, U.S., Britain, Germany,
Japan, Italy and Canada. However, the Partnership also takes
futures positions in the government debt of smaller nations -
e.g. Australia. Demeter anticipates that G-7 and Australian
interest rates will remain the primary interest rate 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.

Equity. The primary equity exposure at December 31, 2001 was to
equity price risk in the G-7 countries. The stock index futures
traded by the Partnership are by law limited to futures on
broadly-based indices. At December 31, 2001, the Partnership's
primary exposures were to the Hang Seng (China), Nikkei (Japan),
S&P 500 (U.S.) and DAX (Germany) stock indices. The Partnership
is primarily exposed to the risk of adverse price trends or
static markets in the U.S., European and Japanese indices.
Static markets would not cause major market changes but would
make it difficult for the Partnership to avoid being "whipsawed"
into numerous small losses.

Commodity.
Energy. At December 31, 2001, the Partnership's energy
exposure was shared primarily by futures contracts in
crude oil and its related products, and natural gas. Price
movements in these markets result from political
developments in the Middle East, weather patterns and other
economic fundamentals. It is possible that volatility will
remain high. Significant profits and losses, which have
been experienced in the past, will continue to be
experienced in these markets. Natural gas has exhibited
volatility in prices resulting from weather patterns and
supply and demand factors and may continue in this choppy
pattern.

Soft Commodities and Agriculturals. At December 31,
2001, the Partnership had exposure to the markets that
comprise these sectors. Most of the exposure was to corn,
soybean meal and soybean markets. Supply and demand
inequalities, severe weather disruption and market
expectations affect price movements in these markets.

Metals. The Partnership's metals exposure at December 31,
2001 was to fluctuations in the price of precious metals,
such as silver, and base metals, such as copper, zinc,
nickel and aluminum. Economic forces, supply and demand
inequalities, geopolitical factors and market expectations

influence price movement in these markets. The Trading
Advisors have, from time to time, taken positions when
market opportunities develop. Demeter anticipates that the
Partnership will continue to be exposed to the precious and
base metals markets.

Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following was the only non-trading risk exposure of the
Partnership at December 31, 2001:

Foreign Currency Balances. The Partnership's primary
foreign currency balances at December 31, 2001 was in
Japanese yen, Hong Kong dollars, Canadian dollars and Swiss
francs. The Partnership controls the non-trading risk of
these 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 Advisors, separately, attempt to
manage the risk of the Partnership's open positions in
essentially the same manner in all market categories traded.
Demeter attempts to manage market exposure by diversifying the
Partnership's assets among different Trading Advisors, each of
whose strategies focus on different market sectors and trading
approaches, and monitoring the performance of the Trading

Advisors daily. In addition, the Trading Advisors establish
diversification guidelines, often set in terms of the maximum
margin to be committed to positions in any one market sector or
market-sensitive instrument.

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

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The 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:

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

None.

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:

Robert E. Murray, age 41, is the Executive Director of Morgan
Stanley DW's Managed Futures Department, a leading commodity pool
operator with approximately $1.4 billion in assets across a
variety of U.S. and international public and private managed
futures funds. In this capacity, Mr. Murray is responsible for
overseeing all aspects of Morgan Stanley DW's Managed Futures
Department. Mr. Murray began at Dean Witter in 1984 and has been
closely involved in the growth of managed futures at the firm
over the last 17 years. He is also the Chairman and President of
Morgan Stanley Futures & Currency Management Inc. ("MSFCM")
(formerly known as Dean Witter Futures & Currency Management
Inc.), Morgan Stanley's internal commodity trading advisor, and
is Chairman and President of Demeter Management Corporation, the
entity which acts as a general partner for Morgan Stanley DW's
managed futures funds. Mr. Murray has served as the Vice
Chairman and a Director of the Board of the Managed Futures
Association and is currently a member of the Board of Directors

o the National Futures Association. Mr. Murray received a
Bachelors Degree in Finance from Geneseo State University in
1983.

Mitchell M. Merin, age 48, is a Director of Demeter. Mr. Merin
is also a Director of MSFCM. Mr. Merin was appointed the Chief
Operating Officer of Individual Asset Management for MSDW in
December 1998 and the President and Chief Executive Officer of
Morgan Stanley Dean Witter Advisors in February 1998. He has
been an Executive Vice President of Morgan Stanley DW since 1990,
during which time he has been Director of Morgan Stanley DW's
Taxable Fixed Income and Futures divisions, Managing Director in
Corporate Finance and Corporate Treasurer. Mr. Merin received
his Bachelors degree from Trinity College in Connecticut and his
M.B.A. degree in Finance and Accounting from the Kellogg Graduate
School of Management of Northwestern University in 1977.

Joseph G. Siniscalchi, age 56, is a Director of Demeter. Mr.
Siniscalchi joined Morgan Stanley DW in July 1984 as a First Vice
President, Director of General Accounting and served as a Senior
Vice President and Controller for Morgan Stanley DW's Securities
Division through 1997. He is currently Managing Director,
responsible for the Client Support Service Division of Morgan
Stanley DW. From February 1980 to July 1984, Mr. Siniscalchi was
Director of Internal Audit at Lehman Brothers Kuhn Loeb, Inc.

Edward C. Oelsner, III, age 60, is a Director of Demeter. Mr.
Oelsner is currently an Executive Vice President and head of the
Product Development Group at Morgan Stanley Dean Witter Advisors,
an affiliate of Morgan Stanley DW. Mr. Oelsner joined Morgan
Stanley DW in 1981 as a Managing Director in Morgan Stanley DW's
Investment Banking Department specializing in coverage of
regulated industries and, subsequently, served as head of the
Morgan Stanley DW Retail Products Group. Prior to joining Morgan
Stanley DW, Mr. Oelsner held positions at The First Boston
Corporation as a member of the Research and Investment Banking
Departments from 1967 to 1981. Mr. Oelsner received his M.B.A.
in Finance from the Columbia University Graduate School of
Business in 1966 and an A.B. in Politics from Princeton
University in 1964.

Richard A. Beech, age 50, is a Director of Demeter. Mr. Beech
has been associated with the futures industry for over 24 years.
He has been at Morgan Stanley DW since August 1984 where he is
presently Executive Director and head of Branch Futures. 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 also had worked at two investment banking firms in
operations, research, managed futures and sales management.

Raymond A. Harris, age 45, is currently Managing Director in
Asset Management Services. He previously served as CAO of Morgan
Stanley Dean Witter Asset Management. From July 1982 to July
1994, Mr. Harris served in financial, administrative and other
assignments at Dean Witter Reynolds, Inc. and Dean Witter,
Discover & Co. From August 1994 to January 1999, he worked in
Discover Financial Services and the firm's Credit Service
business units. Mr. Harris has been with Morgan Stanley Dean
Witter & Co. and its affiliates since July 1982. He has a B.A.
degree from Boston College and an M.B.A. in finance from the
University of Chicago.

Anthony J. DeLuca, age 39, became a Director of Demeter on
September 14, 2000. Mr. DeLuca is also a Director of MSFCM. Mr.
DeLuca was appointed the Controller of Asset Management for MSDW
in June 1999. Prior to that, Mr. DeLuca was a partner at the
accounting firm of Ernst & Young LLP, where he had MSDW as a
major client. Mr. DeLuca had worked continuously at Ernst &
Young LLP ever since 1984, after he graduated from Pace
University with a B.B.A. degree in Accounting.

Raymond E. Koch, age 46, is Chief Financial Officer of Demeter.
Mr. Koch began his career at MSDW in 1988, has overseen the
Managed Futures Accounting function since 1992, and is currently
an Executive Director in Investment Management Controllers. From

November 1979 to June 1988, Mr. Koch held various positions at
Thomson McKinnon Securities, Inc. culminating as Manager, Special
Projects in the Capital Markets Division. From August 1977 to
November 1979 he was an auditor, specializing in financial
services at Deloitte Haskins & Sells. Mr. Koch received his
B.B.A. in accounting from Iona College in 1977, an M.B.A. in
finance from Pace University in 1984 and is a Certified Public
Accountant.

All of the foregoing directors have indefinite terms.

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, 2001, 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, 2001,
Demeter owned 108,076.600 Units of General Partnership Interest
representing a 1.07 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
Financial Statements", in the accompanying Annual Report to
Limited Partners for the year ended December 31, 2001, 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 $17,183,347 for the year ended December 31,
2001.

PART IV
Item 14.EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. Listing of Financial Statements
The following financial statements and report of independent auditors,
all appearing in the accompanying Annual Report to Limited Partners
for the year ended December 31, 2001 are incorporated by reference to
Exhibit 13.01 of this Form 10-K:
- - Report of Deloitte & Touche LLP, independent auditors, for the years
ended December 31, 2001, 2000 and 1999.

- - Statements of Financial Condition as of December 31, 2001 and 2000.

- - Schedule of Investments as of December 31, 2001.

- - Statements of Operations, Changes in Partners' Capital, and Cash
Flows for the years ended December 31, 2001, 2000 and 1999.

- - Notes to 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, 2001 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.

(b) Reports on Form 8-K
During the quarter/year ended December 31, 2001, the following Forms 8-K
were filed by the Partnership:

On April 25, 2001, the Partnership filed the Current Report on Form 8-K
for the purpose of reporting, under Item 5, the Partnership having
entered a management agreement with Northfield Trading L.P., thereby
adding Northfield Trading L.P. as a trading advisor for the Partnership.

On November 1, 2001, the Partnership filed the Current Report on Form
8-K for the purpose of reporting, under Item 5, the Partnership's change
of name; the relocation of offices of the Partnership and Demeter; the
transfer of futures and options clearing of the Partnership to MS & Co.;
and the replacement by MS & Co. as counterparty on all foreign currency
forward contracts for the Partnership.

(c) Exhibits
Refer to Exhibit Index on Page E-1 to E-3.

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.

MORGAN STANLEY SPECTRUM SELECT L.P.
(Registrant)

BY: Demeter Management Corporation,
General Partner

March 26, 2002 BY: /s/ Robert E. Murray
Robert E. Murray, Director,
Chairman of the Board and
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/ Robert E. Murray March 26, 2002
Robert E. Murray, Director,
Chairman of the Board and
President

/s/ Mitchell M. Merin March 26, 2002
Mitchell M. Merin, Director

/s/ Joseph G. Siniscalchi March 26, 2002
Joseph G. Siniscalchi, Director

/s/ Edward C. Oelsner III March 26, 2002
Edward C. Oelsner III, Director

/s/ Richard A. Beech March 26, 2002
Richard A. Beech, Director

/s/ Raymond A. Harris March 26, 2002
Raymond A. Harris, Director

/s/ Anthony J. DeLuca March 26, 2002
Anthony J. DeLuca, Director

/s/ Raymond E. Koch March 26, 2002
Raymond E. Koch, Chief
Financial Officer and Principal
Accounting Officer

EXHIBIT INDEX

ITEM
3.01 Form of Amended and Restated Limited Partnership
Agreement of the Partnership, is incorporated by
reference to Exhibit A of the Partnership's
Prospectus, dated March 23, 2001, filed with the
Securities and Exchange Commission pursuant to Rule
424(b)(3) under the Securities Act of 1933 on April
6, 2001.
3.02 Certificate of Limited Partnership, dated March 19,
1991, is incorporated by reference to Exhibit 3.02 of
the Partnership's Registration Statement on Form S-1
(File No. 333-47829) filed with the Securities and
Exchange Commission on March 12, 1998.
3.03 Certificate of Amendment Certificate of Limited
Partnership, dated April 6, 1999, is incorporated by
reference to Exhibit 3.03 of the Partnership's
Registration Statement on Form S-1 (File No. 333-
68773) filed with the Securities and Exchange
Commission on April 12, 1999.
3.04 Certificate of Amendment of Certificate of Limited
Partnership, dated November 1, 2001 (changing its
name from Morgan Stanley Dean Witter Spectrum Select
L.P.), is incorporated by reference to Exhibit 3.01
of the Partnership's Form 8-K (File No. 0-19511)
filed with the Securities and Exchange Commission on
November 1, 2001.
10.01 Amended and Restated Management Agreement, dated as
of June 1, 1998, among the Partnership, Demeter, and
Rabar Market Research, Inc. is incorporated by
reference to Exhibit 10.01 of the Partnership's Form
10-K (File No. 0-19511) for fiscal year ended
December 31, 1998 filed on March 31, 1999.
10.02 Amended and Restated Management Agreement, dated as
of June 1, 1998, among the Partnership, Demeter, and
EMC Capital Management, Inc. is incorporated by
reference to Exhibit 10.02 of the Partnership's Form
10-K (File No. 0-19511) for fiscal year ended
December 31, 1998 filed on March 31, 1999.

10.03 Amended and Restated Management Agreement, dated as
of June 1, 1998, among the Partnership, Demeter, and
Sunrise Capital Management, Inc. is incorporated by
reference to Exhibit 10.03 of the Partnership's Form
10-K (File No. 0-19511) for fiscal year ended
December 31, 1998 filed on March 31, 1999.
10.04 Management Agreement, dated as of May 1, 2001, among
the Partnership, Demeter, and Northfield Trading
L.P., is incorporated by reference to Exhibit 10.01
of the Partnership's Form 8-K (File No. 0-19511)
filed with the Securities and Exchange Commission on
April 25, 2001.
10.07 Form of Subscription and Exchange Agreement and Power
of Attorney to be executed by each purchaser of Units
is incorporated by reference to Exhibit B of the
Partnership's Prospectus, dated March 23, 2001, filed
with the Securities and Exchange Commission pursuant
to Rule 424(b)(3) under the Securities Act of 1933 on
April 6, 2001.
10.10 Amended and Restated Escrow Agreement, dated as of
March 10, 2000, among the Partnership, Morgan Stanley
Spectrum Strategic L.P., Morgan Stanley Spectrum
Global Balanced L.P., Morgan Stanley Spectrum
Technical L.P., Morgan Stanley Spectrum Currency
L.P., Morgan Stanley Spectrum Commodity L.P., Morgan
Stanley DW, and The Chase Manhattan Bank is
incorporated by reference to Exhibit 10.10 of the
Partnership's Registration Statement on Form S-1
(File No. 333-90467) filed with the Securities and
Exchange Commission on November 2, 2001.
10.11 Form of Subscription Agreement Update Form to be
executed by purchasers of Units is incorporated by
reference to Exhibit C of the Partnership's
Prospectus, dated March 23, 2001, filed with the
Securities and Exchange Commission pursuant to Rule
424(b)(3) under the Securities Act of 1933 on April
6, 2001.
10.12 Amended and Restated Customer Agreement between the
Partnership and Morgan Stanley DW, dated as of
October 16, 2000, is incorporated by reference to
Exhibit 10.01 of the Partnership's Form 8-K (File No.
0-19511) filed with the Securities and Exchange
Commission on November 1, 2001.

10.13 Commodity Futures Customer Agreement between MS & Co.
and the Partnership, and acknowledged and agreed to
by Morgan Stanley DW, dated as of June 6, 2000, is
incorporated by reference to Exhibit 10.02 of the
Partnership's Form 8-K (File No. 0-19511) filed with
the Securities and Exchange Commission on November 1,
2001.
10.14 Customer Agreement between the Partnership and MSIL,
dated as of June 6, 2000, is incorporated by
reference to Exhibit 10.04 of the Partnership's Form
8-K (File No. 0-19511) filed with the Securities and
Exchange Commission on November 1, 2001.
10.15 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. 0-19511)
filed with the Securities and Exchange Commission on
November 1, 2001.
10.16 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.
0-19511) filed with the Securities and Exchange
Commission on November 1, 2001.
13.01 December 31, 2001 Annual Report to Limited Partners
is filed herewith.

Morgan Stanley
Spectrum Series

[GRAPHIC]

December 31, 2001
Annual Report

[LOGO] Morgan Stanley

Morgan Stanley Spectrum Series
Historical Fund Performance
Presented below is the percentage change in Net Asset Value per Unit from the
start of every calendar year each Fund has traded. Also provided is the
inception-to-date return and the annualized return since inception for each
Fund. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

Funds
- -----
Spectrum Commodity
Year Return
---- ------
1998 -34.3%
1999 15.8%
2000 3.2%
2001 -25.6%

Inception-to-Date Return: -41.6%
Annualized Return: -12.6%
- ----------------------------------------------------------------------

Spectrum Currency
Year Return
---- ------
2000 (6 months) 11.7%
2001 11.1%
Inception-to-Date Return: 24.1%
Annualized Return: 15.5%
- ----------------------------------------------------------------------

Spectrum Global Balanced
Year Return Year Return
- ---- ------ ---- ------
1994 (2 months) -1.7% 1998 16.4%
1995 22.8% 1999 0.7%
1996 -3.6% 2000 0.9%
1997 18.2% 2001 -0.3%
Inception-to-Date Return: 62.1%
Annualized Return: 7.0%
- ----------------------------------------------------------------------

Spectrum Select
Year Return Year Return
- ---- ------ ---- ------
1991 (5 months) 31.2% 1996 5.3%
1992 -14.4% 1997 6.2%
1993 41.6% 1998 14.2%
1994 -5.1% 1999 -7.6%
1995 23.6% 2000 7.1%
2001 1.7%
Inception-to-Date Return: 139.6%
Annualized Return: 8.8%
- ----------------------------------------------------------------------

Spectrum Strategic
Year Return Year Return
- ---- ------ ---- ------
1994 (2 months) 0.1% 1998 7.8%
1995 10.5% 1999 37.2%
1996 -3.5% 2000 -33.1%
1997 0.4% 2001 -0.6%
Inception-to-Date Return: 5.5%
Annualized Return: 0.8%
- ----------------------------------------------------------------------

Spectrum Technical
Year Return Year Return
- ---- ------ ---- ------
1994 (2 months) -2.2% 1998 10.2%
1995 17.6% 1999 -7.5%
1996 18.3% 2000 7.8%
1997 7.5% 2001 -7.2%
Inception-to-Date Return: 49.3%
Annualized Return: 5.8%

Demeter Management Corporation
c/o Managed Futures Department
825 Third Avenue, 8th Floor
New York, NY 10022
Telephone (201) 876-4647

Morgan Stanley Spectrum Series
Annual Report
2001

Dear Limited Partner:

This marks the eighth annual report for Morgan Stanley Spectrum Global
Balanced, Morgan Stanley Spectrum Strategic and Morgan Stanley Spectrum
Technical, the eleventh annual report for Morgan Stanley Spectrum Select, the
fourth annual report for Morgan Stanley Spectrum Commodity and the second
annual report for Morgan Stanley Spectrum Currency. The Net Asset Value per
Unit for each of the six Morgan Stanley Spectrum Funds as of December 31, 2001
was as follows:

Funds N.A.V. % change for year
----- ------ -----------------

Spectrum Commodity $ 5.84 -25.6%
Spectrum Currency $12.41 11.1%
Spectrum Global Balanced $16.21 -0.3%
Spectrum Select $23.96 1.7%
Spectrum Strategic $10.55 -0.6%
Spectrum Technical $14.93 -7.2%

Spectrum Commodity

During the year, the Fund recorded a decrease in Net Asset Value per Unit. The
most significant losses were experienced in the energy markets throughout a
majority of the year from long positions in natural gas futures as prices
reversed the sharp upward trend experienced in late 2000 amid reports of
increased inventories and forecasts for favorable weather. In the metals
markets, losses were experienced throughout a majority of the year from long
positions in copper and aluminum futures as the slowdown in the U.S. economy
and weak demand drove prices lower. In the agricultural markets, losses were
incurred from long positions in corn and wheat futures as prices moved lower
due to favorable weather forecasts and on reports of declining demand. In the
soft commodities markets, losses were recorded throughout a majority of the
year from long cotton futures positions as prices moved lower on weak export
sales and low demand.

Spectrum Currency

During the year, the Fund recorded an increase in Net Asset Value per Unit. The
most significant gains were recorded primarily in the South African rand from
previously established short positions in September, November and December as
its value trended lower relative to the U.S. dollar on global economic jitters
and emerging market concerns following Argentina's debt default. Profits were
recorded from previously established short positions in the Japanese yen early
in the year and again in December as the value of the yen weakened relative to
the U.S. dollar on continuing concerns for the Japanese economy. A portion of
the Fund's overall gains was partially offset by losses recorded in the British
pound primarily during May and early June from previously established long
positions as its value reversed lower relative to the U.S. dollar in reaction
to reports that British Prime Minister Blair will push for Great Britain's
entry into the European Monetary Union.

Spectrum Global Balanced

During the year, the Fund recorded a decrease in Net Asset Value per Unit. The
most significant losses were incurred primarily in the global stock index
futures markets throughout a majority of the first three quarters from long
positions in FTSE, DAX and S&P 500 Index futures as equity prices moved lower
amid worries regarding global economic uncertainty. In the energy markets,
losses were recorded throughout the year from positions in crude oil futures
and its related products as a result of volatility in oil prices due to a
continually changing outlook for supply, production and demand. A portion of
the Fund's overall losses was partially offset by gains recorded in the global
interest rate futures markets primarily during January and again in the third
quarter from previously established long positions in U.S. and European
interest rate futures as prices trended higher amid continued economic concerns
and interest rate cuts by the U.S. and European central banks. In the currency
markets, profits were recorded throughout a majority of the fourth quarter from
previously established short positions in the South African rand as its value
trended lower relative to the U.S. dollar while global economic jitters
persisted.

Spectrum Select

During the year, the Fund recorded an increase in Net Asset Value per Unit. The
most significant gains were recorded primarily in the global interest rate
futures markets during August, September and October from previously
established long positions in U.S. interest rate futures as prices trended
higher following interest rate cuts by the U.S. and European central banks. In
the global stock index futures markets, profits were recorded throughout a
majority of the third quarter from previously established short positions in
DAX, Hang Seng, Nikkei and S&P 500 Index futures as the trend in equity prices
continued sharply lower amid worries regarding global economic uncertainty. A
portion of the Fund's overall gains was partially offset by losses recorded in
the energy markets throughout a majority of the fourth quarter from volatile
price movement in natural gas futures as a result of a continually changing
outlook for supply, production and demand.

Spectrum Strategic

During the year, the Fund recorded a decrease in Net Asset Value per Unit. The
most significant losses were experienced primarily in the currency markets
throughout a majority of the fourth quarter from transactions involving the
euro and Swiss franc. In the global stock index futures markets, losses were
experienced throughout a majority of the first quarter from long positions in
U.S. stock index futures as U.S. stock prices declined after discouraging
corporate earnings warnings, inflationary news and on worries of a U.S.
economic slowdown. A portion of the Fund's overall losses was partially offset
by gains recorded in the soft commodities markets primarily during September
and November from long cocoa futures positions as prices soared higher on
expectations that global demand will outpace production. Additional gains were
recorded primarily during April, May and December from long lumber futures
positions as prices increased amid low inventories and on hopes of a pickup in
the U.S. economy.

Limited Partners of Spectrum Strategic are advised of a change in trading
personnel at one of the trading advisors employed by the Fund. Effective
January 1, 2002, Allied Irish Capital Management, Ltd., a trading advisor

to the Fund, announced the retirement of Mr. David Tease, a Director of Allied
Irish. Allied Irish trades its allocated portion of Fund assets pursuant to the
Worldwide Financial Futures Program, a portion of which was traded by Mr.
Tease, as discussed on page 101 of the Prospectus dated March 23, 2001.
Commencing on or about January 17, 2002, that portion of the Worldwide
Financial Futures Program previously traded by Mr. Tease (approximately $8.1
million, or 11.8% of Fund assets) is being traded by Mr. Gerry Grimes. Mr.
Grimes is Managing Director and a founding member of Allied Irish, with nearly
twenty years of experience in investment management. Mr. Grimes will employ a
discretionary trading approach based upon his fundamental economic analysis of
markets. He believes that the positioning of individual markets is a critical
factor in determining trading opportunities. Hence, he will place strong
emphasis on the gathering of intelligence in relation to market sentiment and
trade flow indicators to determine how individual markets are positioned. Mr.
Grimes will attempt to profit from those instances in which he determines that
a market is positioned in a manner contrary to his own fundamental view.
Pre-determined stop loss levels will be applied to all trades in an effort to
manage trade risk. In addition to trading a portion of the Fund's assets, Mr.
Grimes will continue in his role as trading controller for all three programs
employed in the Worldwide Financial Futures Program.

Spectrum Technical

During the year, the Fund recorded a decrease in Net Asset Value per Unit. The
most significant losses were recorded primarily in the energy markets
throughout the first nine months of the year from trading in crude oil futures
and its related products as a result of volatility in oil prices due to a
continually changing outlook for supply, production and demand. A portion of
the Fund's overall losses was partially offset by gains recorded in the global
interest rate futures markets primarily during August, September and October
from previously established long positions in U.S. interest rate futures as
prices trended higher following interest rate cuts by the U.S. and European
central banks. In the global stock index futures markets, profits were recorded
throughout a majority of the third quarter from previously established short
positions in DAX and Nikkei index futures as the trend in equity prices con-

tinued sharply lower amid worries regarding global economic uncertainty.

Should you have any questions concerning this report, please feel free to
contact Demeter Management Corporation, c/o Managed Futures Department, 825
Third Avenue, 8th Floor, New York, NY 10022 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 not a
guarantee of future results.

Sincerely,

/s/ Robert Murray
Robert E. Murray
Chairman
Demeter Management Corporation
General Partner

Morgan Stanley Spectrum Series
(formerly, Morgan Stanley Dean Witter Spectrum Series)

Independent Auditors' Report

To the Limited Partners and the General Partner of
Morgan Stanley Spectrum Commodity L.P.
(formerly, Morgan Stanley Dean Witter Spectrum Commodity L.P.),
Morgan Stanley Spectrum Currency L.P. (formerly, Morgan Stanley Dean Witter
Spectrum Currency L.P.),
Morgan Stanley Spectrum Global Balanced L.P. (formerly, Morgan Stanley Dean
Witter Spectrum Global Balanced L.P.),
Morgan Stanley Spectrum Select L.P. (formerly, Morgan Stanley Dean Witter
Spectrum Select L.P.),
Morgan Stanley Spectrum Strategic L.P. (formerly, Morgan Stanley Dean Witter
Spectrum Strategic L.P.), and Morgan Stanley Spectrum Technical L.P. (formerly,
Morgan Stanley Dean Witter Spectrum Technical L.P.):

We have audited the accompanying statements of financial condition of Morgan
Stanley Spectrum Commodity L.P., Morgan Stanley Spectrum Currency L.P.
("Spectrum Currency"), Morgan Stanley Spectrum Global Balanced L.P., Morgan
Stanley Spectrum Select L.P., Morgan Stanley Spectrum Strategic L.P., and
Morgan Stanley Spectrum Technical L.P. (collectively, the "Partnerships") as of
December 31, 2001 and 2000, including the schedules of investments as of
December 31, 2001, and the related statements of operations, changes in
partners' capital, and cash flows for the period from July 3, 2000
(commencement of operations) to December 31, 2000 and the year ended December
31, 2001 for Spectrum Currency, and for each of the three years in the period
ended December 31, 2001 for the other above mentioned Partnerships. These
financial statements are the responsibility of the Partnerships' management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating

the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material
respects, the financial position of Morgan Stanley Spectrum Commodity L.P.,
Morgan Stanley Spectrum Currency L.P., Morgan Stanley Spectrum Global Balanced
L.P., Morgan Stanley Spectrum Select L.P., Morgan Stanley Spectrum Strategic
L.P., and Morgan Stanley Spectrum Technical L.P. as of December 31, 2001 and
2000, and the results of their operations and their cash flows for the period
from July 3, 2000 (commencement of operations) to December 31, 2000 and the
year ended December 31, 2001 for Spectrum Currency, and for each of the three
years in the period ended December 31, 2001 for the other above mentioned
Partnerships, in conformity with accounting principles generally accepted in
the United States of America.

/s/ Deloitte & Touche LLP

New York, New York
February 15, 2002
(February 27, 2002 as to Note 7)

Morgan Stanley Spectrum Commodity L.P.
(formerly, Morgan Stanley Dean Witter Spectrum Commodity L.P.)
Statements of Financial Condition

December 31,
---------------------
2001 2000
---------- ----------
$ $

ASSETS
Equity in futures interests trading accounts:
Cash 12,980,361 20,529,979
Net unrealized gain on open contracts (MS&Co.) 289,317 160,096
Net unrealized gain (loss) on open contracts (MSIL) 77,762 (185,379)
---------- ----------
Total net unrealized gain (loss) on open contracts 367,079 (25,283)
---------- ----------
Total Trading Equity 13,347,440 20,504,696
Subscriptions receivable 108,050 215,897
Interest receivable (Morgan Stanley DW and
MS&Co.) 17,129 89,128
---------- ----------
Total Assets 13,472,619 20,809,721
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Redemptions payable 417,678 489,923
Accrued brokerage fees (Morgan Stanley DW and
MS&Co.) 52,001 77,628
Accrued management fees (MSCM) 28,261 42,189
---------- ----------
Total Liabilities 497,940 609,740
---------- ----------
PARTNERS' CAPITAL
Limited Partners (2,180,009.505 and 2,530,392.671
Units, respectively) 12,721,444 19,859,397
General Partner (43,395.648 Units) 253,235 340,584
---------- ----------
Total Partners' Capital 12,974,679 20,199,981
---------- ----------
Total Liabilities and Partners' Capital 13,472,619 20,809,721
========== ==========
NET ASSET VALUE PER UNIT 5.84 7.85
========== ==========

Statements of Operations

For the Years Ended
December 31,
--------------------------------
2001 2000 1999
---------- --------- ---------
$ $ $

REVENUES
Trading profit (loss):
Realized (4,662,750) 1,696,824 3,003,270
Net change in unrealized 392,362 (567,711) 1,178,071
---------- --------- ---------
Total Trading Results (4,270,388) 1,129,113 4,181,341
Interest income (Morgan Stanley DW and
MS&Co.) 518,759 1,047,350 864,383
---------- --------- ---------
Total (3,751,629) 2,176,463 5,045,724
---------- --------- ---------
EXPENSES
Brokerage fees (Morgan Stanley DW and
MS&Co.) 736,436 949,310 852,484
Management fees (MSCM) 400,237 546,187 583,893
Service fees (Demeter) -- 58,604 233,558
---------- --------- ---------
Total 1,136,673 1,554,101 1,669,935
---------- --------- ---------
NET INCOME (LOSS) (4,888,302) 622,362 3,375,789
========== ========= =========
Net Income (Loss) Allocation:
Limited Partners (4,800,953) 612,086 3,330,798
General Partner (87,349) 10,276 44,991
Net Income (Loss) per Unit:
Limited Partners (2.01) .24 1.04
General Partner (2.01) .24 1.04

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

Morgan Stanley Spectrum Currency L.P.
(formerly, Morgan Stanley Dean Witter Spectrum Currency L.P.)
Statements of Financial Condition

December 31,
---------------------
2001 2000
---------- ----------
$ $

ASSETS
Equity in futures interests trading accounts:
Cash 43,241,135 14,391,541
Net unrealized gain on open contracts (MS&Co.) 3,178,383 555,569
---------- ----------
Total Trading Equity 46,419,518 14,947,110
Subscriptions receivable 2,642,117 3,054,150
Interest receivable (Morgan Stanley DW) 50,588 55,464
---------- ----------
Total Assets 49,112,223 18,056,724
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Accrued incentive fees 913,255 32,876
Redemptions payable 165,224 2,237,351
Accrued brokerage fees (Morgan Stanley DW) 154,729 55,245
Accrued management fees 67,274 24,020
---------- ----------
Total Liabilities 1,300,482 2,349,492
---------- ----------
PARTNERS' CAPITAL
Limited Partners (3,674,315.446 and 1,252,545.441 Units,
respectively) 45,598,611 13,988,414
General Partner (178,332.987 and 153,905.792 Units, respectively) 2,213,130 1,718,818
---------- ----------
Total Partners' Capital 47,811,741 15,707,232
---------- ----------
Total Liabilities and Partners' Capital 49,112,223 18,056,724
========== ==========
NET ASSET VALUE PER UNIT 12.41 11.17
========== ==========

Statements of Operations

For the Period from
July 3, 2000
For the (commencement of
Year Ended operations) to
December 31, December 31,
2001 2000
-------------- -------------------
$ $

REVENUES
Trading profit:
Realized 3,998,924 1,126,201
Net change in unrealized 2,622,814 555,569
-------------- ---------
Total Trading Results 6,621,738 1,681,770
Interest income (Morgan Stanley DW) 731,716 236,461
-------------- ---------
Total 7,353,454 1,918,231
-------------- ---------
EXPENSES
Brokerage fees (Morgan Stanley DW) 1,297,698 249,571
Incentive fees 1,155,201 188,423
Management fees 564,216 171,693
-------------- ---------
Total 3,017,115 609,687
-------------- ---------
NET INCOME 4,336,339 1,308,544
============== =========
Net Income Allocation:
Limited Partners 4,119,027 1,134,371
General Partner 217,312 174,173

Net Income per Unit:
Limited Partners 1.24 1.17
General Partner 1.24 1.17

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

Morgan Stanley Spectrum Global Balanced L.P.
(formerly, Morgan Stanley Dean Witter Spectrum Global Balanced L.P.)

Statements of Financial Condition

December 31,
----------------------
2001 2000
---------- ----------
$ $

ASSETS
Equity in futures interests trading accounts:
Cash 57,396,091 52,414,304
Net unrealized gain on open contracts (MS&Co.) 839,855 3,384,377
Net unrealized loss on open contracts (MSIL) (150,647) (66,733)
---------- ----------
Total net unrealized gain on open contracts 689,208 3,317,644
Net option premiums -- 192,500
---------- ----------
Total Trading Equity 58,085,299 55,924,448
Subscriptions receivable 611,641 530,634
Interest receivable (Morgan Stanley DW) 93,818 285,054
---------- ----------
Total Assets 58,790,758 56,740,136
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Redemptions payable 725,284 602,490
Accrued brokerage fees (Morgan Stanley DW) 219,946 202,789
Accrued management fees 59,768 55,107
---------- ----------
Total Liabilities 1,004,998 860,386
---------- ----------
PARTNERS' CAPITAL
Limited Partners (3,524,663.525 and 3,396,880.702 Units,
respectively) 57,127,967 55,220,008
General Partner (40,584.304 Units) 657,793 659,742
---------- ----------
Total Partners' Capital 57,785,760 55,879,750
---------- ----------
Total Liabilities and Partners' Capital 58,790,758 56,740,136
========== ==========
NET ASSET VALUE PER UNIT 16.21 16.26
========== ==========

Statements of Operations

For the Years Ended
December 31,
----------------------------------
2001 2000 1999
---------- ---------- ----------
$ $ $

REVENUES
Trading profit (loss):
Realized 3,618,628 (2,091,009) 2,425,585
Net change in unrealized (2,628,436) 2,507,530 (1,157,073)
---------- ---------- ----------
Total Trading Results 990,192 416,521 1,268,512
Interest income (Morgan Stanley DW) 2,160,076 3,275,958 2,385,751
---------- ---------- ----------
Total 3,150,268 3,692,479 3,654,263
---------- ---------- ----------
EXPENSES
Brokerage fees (Morgan Stanley DW) 2,597,121 2,558,008 2,387,515
Management fees 705,746 695,117 648,787
Incentive fees -- -- 215,651
---------- ---------- ----------
Total 3,302,867 3,253,125 3,251,953
---------- ---------- ----------
NET INCOME (LOSS) (152,599) 439,354 402,310
========== ========== ==========
Net Income (Loss) Allocation:
Limited Partners (150,650) 433,786 397,258
General Partner (1,949) 5,568 5,052
Net Income (Loss) per Unit:
Limited Partners (.05) .14 .12
General Partner (.05) .14 .12

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

Morgan Stanley Spectrum Select L.P.
(formerly, Morgan Stanley Dean Witter Spectrum Select L.P.)

Statements of Financial Condition

December 31,
------------------------
2001 2000
----------- -----------
$ $

ASSETS
Equity in futures interests trading accounts:
Cash 235,183,061 196,555,362
Net unrealized gain on open contracts (MS&Co.) 7,164,265 26,063,382
Net unrealized loss on open contracts (MSIL) (1,767,529) (511,085)
----------- -----------
Total net unrealized gain on open contracts 5,396,736 25,552,297
Net option premiums 167,063 --
----------- -----------
Total Trading Equity 240,746,860 222,107,659
Subscriptions receivable 4,991,166 1,583,941
Interest receivable (Morgan Stanley DW) 305,356 889,954
----------- -----------
Total Assets 246,043,382 224,581,554
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Redemptions payable 2,595,426 2,110,529
Accrued brokerage fees (Morgan Stanley DW) 1,440,360 1,231,479
Accrued management fees 596,011 509,577
----------- -----------
Total Liabilities 4,631,797 3,851,585
----------- -----------
PARTNERS' CAPITAL
Limited Partners (9,966,639.126 and 9,255,010.627
Units, respectively) 238,821,840 218,182,118
General Partner (108,076.600 Units) 2,589,745 2,547,851
----------- -----------
Total Partners' Capital 241,411,585 220,729,969
----------- -----------
Total Liabilities and Partners' Capital 246,043,382 224,581,554
=========== ===========
NET ASSET VALUE PER UNIT 23.96 23.57
=========== ===========

Statements of Operations

For the Years Ended
December 31,
-----------------------------------
2001 2000 1999
----------- ---------- -----------
$ $ $

REVENUES
Trading profit (loss):
Realized 43,420,724 6,845,291 (1,351,849)
Net change in unrealized (20,155,561) 18,665,233 (1,547,990)
----------- ---------- -----------
Total Trading Results 23,265,163 25,510,524 (2,899,839)
Interest income (Morgan Stanley DW) 7,203,732 9,573,095 7,678,789
----------- ---------- -----------
Total 30,468,895 35,083,619 4,778,950
----------- ---------- -----------
EXPENSES
Brokerage fees (Morgan Stanley DW) 17,183,347 14,706,945 15,188,479
Management fees 7,110,346 6,085,629 6,284,885
Incentive fees 3,009,853 -- --
----------- ---------- -----------
Total 27,303,546 20,792,574 21,473,364
----------- ---------- -----------
NET INCOME (LOSS) 3,165,349 14,291,045 (16,694,414)
=========== ========== ===========
Net Income (Loss) Allocation:
Limited Partners 3,123,455 14,165,099 (16,455,697)
General Partner 41,894 125,946 (238,717)
Net Income (Loss) per Unit:
Limited Partners .39 1.57 (1.80)
General Partner .39 1.57 (1.80)

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

Morgan Stanley Spectrum Strategic L.P.
(formerly, Morgan Stanley Dean Witter Spectrum Strategic L.P.)

Statements of Financial Condition

December 31,
--------------------------
2001 2000
-------------- ----------
$ $

ASSETS
Equity in futures interests trading accounts:
Cash 65,967,662 73,445,827
Net unrealized gain on open contracts (MS&Co.) 4,515,344 1,936,658
Net unrealized gain (loss) on open contracts
(MSIL) (23,578) 58,457
Net unrealized loss on open contracts (Carr) -- (8,983)
-------------- ----------
Total net unrealized gain on open contracts 4,491,766 1,986,132
Net option premiums 288,552 226,200
-------------- ----------
Total Trading Equity 70,747,980 75,658,159
Subscriptions receivable 651,936 462,060
Interest receivable (Morgan Stanley DW) 89,359 306,879
-------------- ----------
Total Assets 71,489,275 76,427,098
============== ==========
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Redemptions payable 2,072,098 1,307,093
Accrued brokerage fees (Morgan Stanley DW) 424,242 409,292
Accrued management fees 175,549 186,577
Accrued incentive fee -- 289,687
-------------- ----------
Total Liabilities 2,671,889 2,192,649
-------------- ----------
PARTNERS' CAPITAL
Limited Partners (6,449,326.013 and 6,919,445.814
Units, respectively) 68,012,216 73,433,119
General Partner (76,351.101 and 75,507.615 Units,
respectively) 805,170 801,330
-------------- ----------
Total Partners' Capital 68,817,386 74,234,449
-------------- ----------
Total Liabilities and
Partners' Capital 71,489,275 76,427,098
============== ==========
NET ASSET VALUE PER UNIT 10.55 10.61
============== ==========

Statements of Operations

For the Years Ended
December 31,
-----------------------------------
2001 2000 1999
---------- ----------- ----------
$ $ $

REVENUES
Trading profit (loss):
Realized 2,132,212 (23,193,914) 32,274,037
Net change in unrealized 2,505,634 (7,577,681) 4,264,478
---------- ----------- ----------
Total Trading Results 4,637,846 (30,771,595) 36,538,515
Interest income (Morgan Stanley DW) 2,217,963 3,832,634 3,017,103
---------- ----------- ----------
Total 6,855,809 (26,938,961) 39,555,618
---------- ----------- ----------
EXPENSES
Brokerage fees (Morgan Stanley DW) 5,152,756 5,798,093 5,837,887
Management fees 2,183,596 2,880,999 3,137,509
Incentive fees -- 1,269,237 2,451,152
---------- ----------- ----------
Total 7,336,352 9,948,329 11,426,548
---------- ----------- ----------
NET INCOME (LOSS) (480,543) (36,887,290) 28,129,070
========== =========== ==========
Net Income (Loss) Allocation:
Limited Partners (475,383) (36,503,461) 27,829,050
General Partner (5,160) (383,829) 300,020
Net Income (Loss) per Unit:
Limited Partners (0.06) (5.24) 4.30
General Partner (0.06) (5.24) 4.30

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

Morgan Stanley Spectrum Technical L.P.
(formerly, Morgan Stanley Dean Witter Spectrum Technical L.P.)

Statements of Financial Condition

December 31,
------------------------
2001 2000
----------- -----------
$ $

ASSETS
Equity in futures interests trading accounts:
Cash 246,172,354 231,502,090
Net unrealized gain on open contracts (MS&Co.) 14,299,794 41,877,552
Net unrealized loss on open contracts (MSIL) (2,794,179) (1,835,243)
----------- -----------
Total net unrealized gain on open contracts 11,505,615 40,042,309
----------- -----------
Total Trading Equity 257,677,969 271,544,399
Subscriptions receivable 4,445,562 1,087,585
Interest receivable (Morgan Stanley DW) 318,673 1,063,044
----------- -----------
Total Assets 262,442,204 273,695,028
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Redemptions payable 2,377,346 3,432,384
Accrued brokerage fees (Morgan Stanley DW) 1,509,205 1,458,126
Accrued management fees 581,531 559,827
Accrued incentive fee -- 111,599
----------- -----------
Total Liabilities 4,468,082 5,561,936
----------- -----------
PARTNERS' CAPITAL
Limited Partners (17,089,473.684 and 16,479,195.979
Units, respectively) 255,122,417 265,060,579
General Partner (191,022.517 Units) 2,851,705 3,072,513
----------- -----------
Total Partners' Capital 257,974,122 268,133,092
----------- -----------
Total Liabilities and Partners' Capital 262,442,204 273,695,028
=========== ===========
NET ASSET VALUE PER UNIT 14.93 16.08
=========== ===========

Statements of Operations

For the Years Ended
December 31,
-----------------------------------
2001 2000 1999
----------- ---------- -----------
$ $ $

REVENUES
Trading profit (loss):
Realized 30,115,483 12,255,064 726,179
Net change in unrealized (28,536,694) 22,006,013 (872,972)
----------- ---------- -----------
Total Trading Results 1,578,789 34,261,077 (146,793)
Interest income (Morgan Stanley DW) 8,288,660 11,613,896 9,593,178
----------- ---------- -----------
Total 9,867,449 45,874,973 9,446,385
----------- ---------- -----------
EXPENSES
Brokerage fees (Morgan Stanley DW) 19,556,056 17,835,223 19,176,380
Management fees 7,501,053 9,595,464 10,580,071
Incentive fees 2,093,709 166,085 430,097
----------- ---------- -----------
Total 29,150,818 27,596,772 30,186,548
----------- ---------- -----------
NET INCOME (LOSS) (19,283,369) 18,278,201 (20,740,163)
=========== ========== ===========
Net Income (Loss) Allocation:
Limited Partners (19,062,561) 18,053,408 (20,531,494)
General Partner (220,808) 224,793 (208,669)
Net Income (Loss) per Unit:
Limited Partners (1.15) 1.17 (1.21)
General Partner (1.15) 1.17 (1.21)

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

Morgan Stanley Spectrum Series
(formerly, Morgan Stanley Dean Witter Spectrum Series)

Statements of Changes in Partners' Capital
For the Years Ended December 31, 2001, 2000 and 1999

Units of
Partnership Limited General
Interest Partners Partner Total
------------- ---------- ------- ----------
$ $ $

Morgan Stanley Spectrum Commodity L.P.
(formerly, Morgan Stanley Dean Witter Spectrum
Commodity L.P.)
Partners' Capital,
December 31, 1998 3,788,464.700 24,622,999 285,317 24,908,316
Net income -- 3,330,798 44,991 3,375,789
Redemptions (682,597.530) (4,643,635) -- (4,643,635)
------------- ---------- ------- ----------
Partners' Capital,
December 31, 1999 3,105,867.170 23,310,162 330,308 23,640,470
Offering of Units 277,607.062 2,115,964 -- 2,115,964
Net income -- 612,086 10,276 622,362
Redemptions (809,685.913) (6,178,815) -- (6,178,815)
------------- ---------- ------- ----------
Partners' Capital,
December 31, 2000 2,573,788.319 19,859,397 340,584 20,199,981
Offering of Units 287,171.772 1,838,372 -- 1,838,372
Net loss -- (4,800,953) (87,349) (4,888,302)
Redemptions (637,554.938) (4,175,372) -- (4,175,372)
------------- ---------- ------- ----------
Partners' Capital,
December 31, 2001 2,223,405.153 12,721,444 253,235 12,974,679
============= ========== ======= ==========

Statements of Changes in Partners' Capital
For the Year Ended December 31, 2001 and the period from July 3, 2000
(commencement of operations) to December 31, 2000

Units of
Partnership Limited General
Interest Partners Partner Total
------------- ---------- --------- ----------
$ $ $

Morgan Stanley Spectrum Currency L.P.
(formerly, Morgan Stanley Dean Witter Spectrum Currency L.P.)
Partners' Capital,
July 3, 2000
(commencement of
operations) 2.000 10 10 20
Initial Offering 633,152.332 4,886,888 1,444,635 6,331,523
Offering of Units 980,783.417 10,281,803 100,000 10,381,803
Net income -- 1,134,371 174,173 1,308,544
Redemptions (207,486.516) (2,314,658) -- (2,314,658)
------------- ---------- --------- ----------
Partners' Capital,
December 31, 2000 1,406,451.233 13,988,414 1,718,818 15,707,232
Offering of Units 2,572,156.095 28,921,302 277,000 29,198,302
Net income -- 4,119,027 217,312 4,336,339
Redemptions (125,958.895) (1,430,132) -- (1,430,132)
------------- ---------- --------- ----------
Partners' Capital,
December 31, 2001 3,852,648.433 45,598,611 2,213,130 47,811,741
============= ========== ========= ==========

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

Morgan Stanley Spectrum Series
(formerly, Morgan Stanley Dean Witter Spectrum Series)

Statements of Changes in Partners' Capital
For the Years Ended December 31, 2001, 2000 and 1999

Units of
Partnership Limited General
Interest Partners Partner Total
------------- ----------- ------- -----------
$ $ $

Morgan Stanley Spectrum Global Balanced L.P.
(formerly, Morgan Stanley Dean Witter Spectrum Global
Balanced L.P.)
Partners' Capital,
December 31, 1998 2,869,073.505 45,399,750 514,122 45,913,872
Offering of Units 1,019,759.235 16,184,278 135,000 16,319,278
Net income -- 397,258 5,052 402,310
Redemptions (299,009.049) (4,771,448) -- (4,771,448)
------------- ----------- ------- -----------
Partners' Capital,
December 31, 1999 3,589,823.691 57,209,838 654,174 57,864,012
Offering of Units 568,088.752 8,983,545 -- 8,983,545
Net income -- 433,786 5,568 439,354
Redemptions (720,447.437) (11,407,161) -- (11,407,161)
------------- ----------- ------- -----------
Partners' Capital,
December 31, 2000 3,437,465.006 55,220,008 659,742 55,879,750
Offering of Units 640,074.598 10,254,342 -- 10,254,342
Net loss -- (150,650) (1,949) (152,599)
Redemptions (512,291.775) (8,195,733) -- (8,195,733)
------------- ----------- ------- -----------
Partners' Capital,
December 31, 2001 3,565,247.829 57,127,967 657,793 57,785,760
============= =========== ======= ===========

Units of
Partnership Limited General
Interest Partners Partner Total
-------------- ----------- --------- -----------
$ $ $

Morgan Stanley Spectrum Select L.P.
(formerly, Morgan Stanley Dean Witter Spectrum Select L.P.)
Partners' Capital,
December 31, 1998 8,407,766.751 196,915,644 3,166,872 200,082,516
Offering of Units 2,238,093.744 51,589,367 -- 51,589,367
Net loss -- (16,455,697) (238,717) (16,694,414)
Redemptions (928,973.063) (21,171,795) -- (21,171,795)
-------------- ----------- --------- -----------
Partners' Capital,
December 31, 1999 9,716,887.432 210,877,519 2,928,155 213,805,674
Offering of Units 1,339,972.159 28,581,403 -- 28,581,403
Net income -- 14,165,099 125,946 14,291,045
Redemptions (1,693,772.364) (35,441,903) (506,250) (35,948,153)
-------------- ----------- --------- -----------
Partners' Capital,
December 31, 2000 9,363,087.227 218,182,118 2,547,851 220,729,969
Offering of Units 1,676,778.529 41,261,535 -- 41,261,535
Net income -- 3,123,455 41,894 3,165,349
Redemptions (965,150.030) (23,745,268) -- (23,745,268)
-------------- ----------- --------- -----------
Partners' Capital,
December 31, 2001 10,074,715.726 238,821,840 2,589,745 241,411,585
============== =========== ========= ===========

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

Morgan Stanley Spectrum Series
(formerly, Morgan Stanley Dean Witter Spectrum Series)

Statements of Changes in Partners' Capital
For the Years Ended December 31, 2001, 2000 and 1999

Units of
Partnership Limited General
Interest Partners Partner Total
-------------- ----------- --------- -----------
$ $ $

Morgan Stanley Spectrum Strategic L.P.
(formerly, Morgan Stanley Dean Witter Spectrum Strategic L.P.)
Partners' Capital,
December 31, 1998 6,096,199.701 69,671,636 750,139 70,421,775
Offering of Units - 1,300,877.987 16,846,544 100,000 16,946,544
Net income -- 27,829,050 300,020 28,129,070
Redemptions (601,106.169) (7,804,868) -- (7,804,868)
-------------- ----------- --------- -----------
Partners' Capital,
December 31, 1999 6,795,971.519 106,542,362 1,150,159 107,692,521
Offering of Units 1,467,043.314 17,566,488 35,000 17,601,488
Net loss -- (36,503,461) (383,829) (36,887,290)
Redemptions (1,268,061.404) (14,172,270) -- (14,172,270)
-------------- ----------- --------- -----------
Partners' Capital,
December 31, 2000 6,994,953.429 73,433,119 801,330 74,234,449
Offering of Units 892,802.518 9,240,482 9,000 9,249,482
Net loss -- (475,383) (5,160) (480,543)
Redemptions (1,362,078.833) (14,186,002) -- (14,186,002)
-------------- ----------- --------- -----------
Partners' Capital,
December 31, 2001 6,525,677.114 68,012,216 805,170 68,817,386
============== =========== ========= ===========

Units of
Partnership Limited General
Interest Partners Partner Total
-------------- ----------- --------- -----------
$ $ $
Morgan Stanley Spectrum Technical L.P.
(formerly, Morgan Stanley Dean Witter Spectrum Technical L.P.)
Partners' Capital,
December 31, 1998 15,824,199.968 252,455,045 2,646,389 255,101,434
Offering of Units - 3,976,153.731 61,073,132 410,000 61,483,132
Net loss -- (20,531,494) (208,669) (20,740,163)
Redemptions (1,772,457.606) (27,088,685) -- (27,088,685)
-------------- ----------- --------- -----------
Partners' Capital,
December 31, 1999 18,027,896.093 265,907,998 2,847,720 268,755,718
Offering of Units 2,110,290.038 29,668,693 -- 29,668,693
Net income -- 18,053,408 224,793 18,278,201
Redemptions (3,467,967.635) (48,569,520) -- (48,569,520)
-------------- ----------- --------- -----------
Partners' Capital,
December 31, 2000 16,670,218.496 265,060,579 3,072,513 268,133,092
Offering of Units 2,591,525.213 40,832,142 -- 40,832,142
Net loss -- (19,062,561) (220,808) (19,283,369)
Redemptions (1,981,247.508) (31,707,743) -- (31,707,743)
-------------- ----------- --------- -----------
Partners' Capital,
December 31, 2001 17,280,496.201 255,122,417 2,851,705 257,974,122
============== =========== ========= ===========

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

Morgan Stanley Spectrum Commodity L.P.
(formerly, Morgan Stanley Dean Witter Spectrum Commodity L.P.)

Statements of Cash Flows

For the Years Ended
December 31,
----------------------------------
2001 2000 1999
---------- ---------- ----------
$ $ $

CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (loss) (4,888,302) 622,362 3,375,789
Noncash item included in net income
(loss):
Net change in unrealized (392,362) 567,711 (1,178,071)
(Increase) decrease in operating
assets:
Interest receivable (Morgan
Stanley DW and MS&Co.) 71,999 (12,936) 2,530
Increase (decrease) in operating
liabilities:
Accrued brokerage fees (Morgan
Stanley DW and MS&Co.) (25,627) 6,801 (10,395)
Accrued management fees
(MSCM) (13,928) (6,322) (7,121)
Service fees payable (Demeter) -- (19,404) (2,849)
---------- ---------- ----------
Net cash provided by (used for)
operating activities (5,248,220) 1,158,212 2,179,883
---------- ---------- ----------
CASH FLOWS FROM
FINANCING ACTIVITIES
Offering of Units 1,838,372 2,115,964 --
(Increase) decrease in
subscriptions receivable 107,847 (215,897) --
Increase (decrease) in redemptions
payable (72,245) 220,378 (626,002)
Redemptions of Units (4,175,372) (6,178,815) (4,643,635)
---------- ---------- ----------
Net cash used for financing
activities (2,301,398) (4,058,370) (5,269,637)
---------- ---------- ----------
Net decrease in cash (7,549,618) (2,900,158) (3,089,754)
Balance at beginning of period 20,529,979 23,430,137 26,519,891
---------- ---------- ----------
Balance at end of period 12,980,361 20,529,979 23,430,137
========== ========== ==========

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

Morgan Stanley Spectrum Currency L.P.
(formerly, Morgan Stanley Dean Witter Spectrum Currency L.P.)

Statements of Cash Flows

For the Period from
July 3, 2000
For the Year (commencement of
Ended operations) to
December 31, December 31,
2001 2000
------------ -------------------
$ $

CASH FLOWS FROM
OPERATING ACTIVITIES
Net income 4,336,339 1,308,544
Noncash item included in net
income:
Net change in unrealized (2,622,814) (555,569)
(Increase) decrease in operating
assets:
Interest receivable (Morgan
Stanley DW) 4,876 (55,464)
Increase in operating liabilities:
Accrued incentive fees 880,379 32,876
Accrued brokerage fees
(Morgan Stanley DW) 99,484 55,245
Accrued management fees 43,254 24,020
---------- ----------
Net cash provided by
operating activities 2,741,518 809,652
---------- ----------
CASH FLOWS FROM
FINANCING ACTIVITIES
Initial offering -- 6,331,543
Offering of Units 29,198,302 10,381,803
(Increase) decrease in
subscriptions receivable 412,033 (3,054,150)
Increase (decrease) in
redemptions payable (2,072,127) 2,237,351
Redemptions of Units (1,430,132) (2,314,658)
---------- ----------
Net cash provided by
financing activities 26,108,076 13,581,889
---------- ----------
Net increase in cash 28,849,594 14,391,541
Balance at beginning of period 14,391,541 --
---------- ----------
Balance at end of period 43,241,135 14,391,541
========== ==========

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

Morgan Stanley Spectrum Global Balanced L.P.
(formerly, Morgan Stanley Dean Witter Spectrum Global Balanced L.P.)

Statements of Cash Flows

For the Years Ended
December 31,
-----------------------------------
2001 2000 1999
---------- ----------- ----------
$ $ $

CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (loss) (152,599) 439,354 402,310
Noncash item included in net
income (loss):
Net change in unrealized 2,628,436 (2,507,530) 1,157,073
(Increase) decrease in operating
assets:
Net option premiums 192,500 (192,500) --
Interest receivable (Morgan
Stanley DW) 191,236 (40,455) (77,458)
Increase (decrease) in operating
liabilities:
Accrued brokerage fees
(Morgan Stanley DW) 17,157 (14,106) 47,054
Accrued management fees 4,661 (3,833) 12,787
Incentive fees payable -- -- (69,730)
---------- ----------- ----------
Net cash provided by (used for)
operating activities 2,881,391 (2,319,070) 1,472,036
---------- ----------- ----------
CASH FLOWS FROM
FINANCING ACTIVITIES
Offering of Units 10,254,342 8,983,545 16,319,278
(Increase) decrease in subscriptions
receivable (81,007) 317,320 315,143
Increase (decrease) in redemptions
payable 122,794 (65,251) 549,551
Redemptions of Units (8,195,733) (11,407,161) (4,771,448)
---------- ----------- ----------
Net cash provided by
(used for) financing activities 2,100,396 (2,171,547) 12,412,524
---------- ----------- ----------
Net increase (decrease) in cash 4,981,787 (4,490,617) 13,884,560
Balance at beginning of period 52,414,304 56,904,921 43,020,361
---------- ----------- ----------
Balance at end of period 57,396,091 52,414,304 56,904,921
========== =========== ==========

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

Morgan Stanley Spectrum Select L.P.
(formerly, Morgan Stanley Dean Witter Spectrum Select L.P.)

Statements of Cash Flows

For the Years Ended
December 31,
--------------------------------------
2001 2000 1999
------------ ----------- -----------
$ $ $

CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (loss) 3,165,349 14,291,045 (16,694,414)
Noncash item included in net
income (loss):
Net change in unrealized 20,155,561 (18,665,233) 1,547,990
(Increase) decrease in
operating assets:
Net option premiums (167,063) 776,380 (776,380)
Interest receivable (Morgan
Stanley DW) 584,598 (167,649) (130,447)
Increase (decrease) in
operating liabilities:
Accrued brokerage
fees (Morgan Stanley DW) 208,881 (39,496) 106,631
Accrued management fees 86,434 (16,344) 44,124
------------ ----------- -----------
Net cash provided by (used
for) operating activities 24,033,760 (3,821,297) (15,902,496)
------------ ----------- -----------
CASH FLOWS FROM
FINANCING ACTIVITIES
Offering of Units 41,261,535 28,581,403 51,589,367
(Increase) decrease in
subscriptions receivable (3,407,225) 2,146,110 2,291,656
Increase (decrease) in
redemptions payable 484,897 (1,653,713) 2,824,861
Redemptions of Units (23,745,268) (35,948,153) (21,171,795)
------------ ----------- -----------
Net cash provided by (used for)
financing activities 14,593,939 (6,874,353) 35,534,089
------------ ----------- -----------
Net increase (decrease) in cash 38,627,699 (10,695,650) 19,631,593
Balance at beginning of period 196,555,362 207,251,012 187,619,419
------------ ----------- -----------
Balance at end of period 235,183,061 196,555,362 207,251,012
============ =========== ===========

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

Morgan Stanley Spectrum Strategic L.P.
(formerly, Morgan Stanley Dean Witter Spectrum Strategic L.P.)

Statements of Cash Flows

For the Years Ended
December 31,
------------------------------------
2001 2000 1999
----------- ----------- ----------
$ $ $

CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (loss) (480,543) (36,887,290) 28,129,070
Noncash item included in net
income (loss):
Net change in unrealized (2,505,634) 7,577,681 (4,264,478)
(Increase) decrease in operating
assets:
Net option premiums (62,352) (237,853) 237,299
Interest receivable (Morgan
Stanley DW) 217,520 32,703 (134,335)
Increase (decrease) in operating
liabilities:
Accrued brokerage fees
(Morgan Stanley DW) 14,950 (180,709) 184,395
Accrued management fees (11,028) (127,069) 94,670
Accrued incentive fee (289,687) 289,687 --
----------- ----------- ----------
Net cash provided by (used for)
operating activities (3,116,774) (29,532,850) 24,246,621
----------- ----------- ----------
CASH FLOWS FROM
FINANCING ACTIVITIES
Offering of Units 9,249,482 17,601,488 16,946,544
(Increase) decrease in
subscriptions receivable (189,876) 1,281,898 52,093
Increase in redemptions payable 765,005 459,233 448,884
Redemptions of Units (14,186,002) (14,172,270) (7,804,868)
----------- ----------- ----------
Net cash provided by
(used for) financing activities (4,361,391) 5,170,349 9,642,653
----------- ----------- ----------
Net increase (decrease) in cash (7,478,165) (24,362,501) 33,889,274
Balance at beginning of period 73,445,827 97,808,328 63,919,054
----------- ----------- ----------
Balance at end of period 65,967,662 73,445,827 97,808,328
=========== =========== ==========

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

Morgan Stanley Spectrum Technical L.P.
(formerly, Morgan Stanley Dean Witter Spectrum Technical L.P.)

Statements of Cash Flows

For the Years Ended
December 31,
-------------------------------------
2001 2000 1999
----------- ----------- -----------
$ $ $

CASH FLOWS FROM
OPERATING ACTIVITIES
Net income (loss) (19,283,369) 18,278,201 (20,740,163)
Noncash item included in net
income (loss):
Net change in unrealized 28,536,694 (22,006,013) 872,972
(Increase) decrease in operating
assets:
Net option premiums -- (74,725) 74,725
Interest receivable (Morgan
Stanley DW) 744,371 (162,089) (183,270)
Increase (decrease) in operating
liabilities:
Accrued brokerage fees
(Morgan Stanley DW) 51,079 (101,355) 120,330
Accrued management fees 21,704 (300,576) 66,388
Accrued incentive fee (111,599) 111,599 --
----------- ----------- -----------
Net cash provided by (used
for) operating activities 9,958,880 (4,254,958) (19,789,018)
----------- ----------- -----------
CASH FLOWS FROM
FINANCING ACTIVITIES
Offering of Units 40,832,142 29,668,693 61,483,132
(Increase) decrease in
subscriptions receivable (3,357,977) 2,839,329 75,719
Increase (decrease) in
redemptions payable (1,055,038) 374,791 1,718,282
Redemptions of Units (31,707,743) (48,569,520) (27,088,685)
----------- ----------- -----------
Net cash provided by (used for)
financing activities 4,711,384 (15,686,707) 36,188,448
----------- ----------- -----------
Net increase (decrease)
in cash 14,670,264 (19,941,665) 16,399,430
Balance at beginning of period 231,502,090 251,443,755 235,044,325
----------- ----------- -----------
Balance at end of period 246,172,354 231,502,090 251,443,755
=========== =========== ===========

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

Morgan Stanley Spectrum Commodity L.P. (formerly, Morgan Stanley Dean Witter
Spectrum Commodity L.P.)

Schedule of Investments
December 31, 2001

Partnership Net Assets: $12,974,679

Long Short
Gain/ Gain/ Net Percentage of # of Contracts/
Futures and Forward Contracts: (Loss) (Loss) Unrealized Gain/(Loss) Net Assets Notional Amounts
- ------------------------------ ------- ------ ---------------------- ------------- ----------------

$ $ $ %
Commodity 367,079
367,079 -- ------- 2.83 795
Total Net Unrealized Gain per Statement of
Financial Condition 367,079
=======

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

Morgan Stanley Spectrum Currency L.P. (formerly, Morgan Stanley Dean Witter
Spectrum Currency L.P.)

Schedule of Investments
December 31, 2001

Partnership Net Assets: $47,811,741

Long Short
Gain/ Gain/ Net Percentage of # of Contracts/
Futures and Forward Contracts: (Loss) (Loss) Unrealized Gain/(Loss) Net Assets Notional Amounts
- ------------------------------ ------- --------- ---------------------- ------------- ----------------

$ $ $ %
Foreign currency 503,253 2,675,130 3,178,383 6.65* 7,044,346,181
---------
Total Net Unrealized Gain per Statement of
Financial Condition 3,178,383
=========

*No single contract's value exceeds 5% of Net Assets.

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

Morgan Stanley Spectrum Global Balanced L.P. (formerly, Morgan Stanley Dean
Witter Spectrum Global Balanced L.P.)

Schedule of Investments
December 31, 2001

Partnership Net Assets: $57,785,760

Long
Gain/ Short Net Percentage of # of Contracts/
Futures and Forward Contracts: (Loss) Gain/(Loss) Unrealized Gain/(Loss) Net Assets Notional Amounts
- ------------------------------ -------- ----------- ---------------------- ------------- ----------------

$ $ $ %
Foreign Currency 545,662 121,385 667,047 1.15 6,800,319
Interest Rate (30,784) 207,014 176,230 0.30 1,132
Commodity (166,876) 43,389 (123,487) (0.21) 437
Equity 57,696 -- 57,696 0.10 209
-------- ------- -------- -----
Grand Total: 405,698 371,788 777,486 1.34
======== ======= =====
Unrealized Currency Loss (88,278)
--------
Total Net Unrealized Gain per Statement of
Financial Condition 689,208
========

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

Morgan Stanley Spectrum Select L.P. (formerly, Morgan Stanley Dean Witter
Spectrum Select L.P.)

Schedule of Investments
December 31, 2001

Partnership Net Assets: $241,411,585

Long Short Net Percentage of # of Contracts/
Futures and Forward Contracts: Gain/(Loss) Gain/(Loss) Unrealized Gain/(Loss) Net Assets Notional Amounts
- ------------------------------ ----------- ----------- ---------------------- ------------- ----------------

$ $ $ %
Foreign currency 3,340,060 5,340,666 8,680,726 3.60 19,685,077,273
Interest rate (590,545) 1,010,165 419,620 0.17 6,472
Commodity (1,867,521) (573,394) (2,440,915) (1.01) 2,686
Equity 142,296 (57,555) 84,741 0.03 722
---------- --------- ---------- -----
Grand Total: 1,024,290 5,719,882 6,744,172 2.79
========== ========= =====
Unrealized Currency Loss (1,347,436)
----------
Total Net Unrealized Gain per Statement of
Financial Condition 5,396,736
==========

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

Morgan Stanley Spectrum Strategic L.P. (formerly, Morgan Stanley Dean Witter
Spectrum Strategic L.P.)

Schedule of Investments
December 31, 2001

Partnership Net Assets: $68,817,386

Long Short Net Percentage of # of Contracts/
Futures and Forward Contracts: Gain/(Loss) Gain/(Loss) Unrealized Gain/(Loss) Net Assets Notional Amounts
- ------------------------------ ----------- ----------- ---------------------- ------------- ----------------

$ $ $ %
Foreign currency (163,374) 1,006,617 843,243 1.23 20,788
Commodity 2,761,214 632,208 3,393,422 4.93 4,965
Interest rate 160,801 -- 160,801 0.23 599
Equity 137,400 2,400 139,800 0.20 35
--------- --------- --------- ----
Grand Total: 2,896,041 1,641,225 4,537,266 6.59
========= ========= ====
Unrealized Currency Loss (45,500)
---------
Total Net Unrealized Gain per Statement of
Financial Condition 4,491,766
=========

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

Morgan Stanley Spectrum Technical L.P. (formerly, Morgan Stanley Dean Witter
Spectrum Technical L.P.)

Schedule of Investments
December 31, 2001

Partnership Net Assets: $257,947,122

Long Short Net Percentage of # of Contracts/
Futures and Forward Contracts: Gain/(Loss) Gain/(Loss) Unrealized Gain/(Loss) Net Assets Notional Amounts
- ------------------------------ ----------- ----------- ---------------------- ------------- ----------------

$ $ $ %
Foreign currency 2,247,864 10,754,547 13,002,411 5.04* 29,705,176,931
Interest rate (323,455) 1,378,568 1,055,113 0.41 8,984
Commodity (2,009,527) (1,765,451) (3,774,978) (1.46) 5,538
Equity 195,865 (31,771) 164,094 0.06 584
---------- ---------- ---------- -----
Grand Total: 110,747 10,335,893 10,446,640 4.05
========== ========== =====
Unrealized Currency Gain 1,058,975
----------
Total Net Unrealized Gain per Statement of
Financial Condition 11,505,615
==========

*No single contract's value exceeds 5% of Net Assets.
The accompanying notes are an integral part of these financial statements.

Morgan Stanley Spectrum Series
(formerly, Morgan Stanley Dean Witter Spectrum Series)

Notes to Financial Statements

1. Summary of Significant Accounting Policies

Organization--Morgan Stanley Spectrum Commodity L.P. (formerly known as Morgan
Stanley Dean Witter Spectrum Commodity L.P.) ("Spectrum Commodity"), Morgan
Stanley Spectrum Currency L.P. (formerly known as Morgan Stanley Dean Witter
Spectrum Currency L.P.) ("Spectrum Currency"), Morgan Stanley Spectrum Global
Balanced L.P. (formerly known as Morgan Stanley Dean Witter Spectrum Global
Balanced L.P.) ("Spectrum Global Balanced"), Morgan Stanley Spectrum Select
L.P. (formerly known as Morgan Stanley Dean Witter Spectrum Select L.P.)
("Spectrum Select"), Morgan Stanley Spectrum Strategic L.P. (formerly known as
Morgan Stanley Dean Witter Spectrum Strategic L.P.) ("Spectrum Strategic") and
Morgan Stanley Spectrum Technical L.P. (formerly known as Morgan Stanley Dean
Witter Spectrum Technical L.P.) ("Spectrum Technical"), (individually, a
"Partnership," or collectively, the "Partnerships"), are limited partnerships
organized to engage in the speculative trading of futures contracts, options on
futures contracts, and forward contracts on physical commodities and other
commodity interests, including, but not limited to foreign currencies,
financial instruments, metals, energy and agricultural products (collectively,
"futures interests").

The general partner for each Partnership 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.,
Inc. ("MS&Co.") and Morgan Stanley & Co. International Limited ("MSIL"). Prior
to October 2000, Carr Futures Inc. ("Carr") provided clearing and execution
services to Spectrum Global Balanced, Spectrum Select, Spectrum Strategic and
Spectrum Technical. Morgan Stanley Commodities Management, Inc. ("MSCM") is the
trading advisor to Spectrum Commodity. Demeter, Morgan Stanley DW, MS&Co., MSIL
and MSCM are wholly-owned subsidiaries of Morgan Stanley Dean Witter & Co.

Spectrum Commodity became one of the Spectrum Series of funds effective March
6, 2000.

Spectrum Currency commenced trading as of July 3, 2000.

Effective April 2, 2001, Dean Witter Reynolds Inc. changed its name to Morgan
Stanley DW Inc.

Effective September 28, 2001 Morgan Stanley Dean Witter Commodities Management
Inc. changed its name to Morgan Stanley Commodities Management Inc.
On November 1, 2001, the Partnerships were renamed Morgan Stanley Spectrum
Commodity L.P., Morgan Stanley Spectrum Currency L.P., Morgan Stanley Spectrum
Global Balanced L.P., Morgan Stanley Spectrum Select L.P., Morgan Stanley
Spectrum Strategic L.P. and Morgan Stanley Spectrum Technical L.P.

Morgan Stanley Spectrum Series
(formerly, Morgan Stanley Dean Witter Spectrum Series)

Notes to Financial Statements--(Continued)

Demeter is required to maintain a 1% minimum interest in the equity of each
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.

Revenue Recognition--Futures interests are open commitments until settlement
date. 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 profits
(losses) on open contracts from one period to the next in the statements of
operations. Monthly, Morgan Stanley DW pays each Partnership interest income
based upon 80% of its average daily "Net Assets" (as defined in the limited
partnership agreements) for the month in the case of Spectrum Commodity,
Spectrum Currency, Spectrum Select, Spectrum Strategic and Spectrum Technical,
and 100% in the case of Spectrum Global Balanced. The interest rate is equal to
a prevailing rate on U.S. Treasury bills. For purposes of such interest
payments, Net Assets do not include monies due the Partnership on futures
interests, but not actually received.

Net Income (Loss) per Unit--Net income (loss) per unit of limited partnership
interest ("Unit(s)") is computed using the weighted average number of Units
outstanding during the period.

Condensed Schedule of Investments--In March 2001, the American Institute of
Certified Public Accountants' Accounting Standards Executive Committee issued
Statement of Position ("SOP") 01-1, "Amendment to the Scope of Statement of
Position 95-2, Financial Reporting by Nonpublic Investment Partnerships, to
Include Commodity Pools" effective for fiscal years ending after December 15,
2001. Accordingly, commodity pools are now required to include a condensed
schedule of investments identifying those investments which constitute more
than 5% of net assets, taking long and short positions into account separately.

Equity in Futures Interests Trading Accounts--The Partnerships' asset "Equity
in futures interests trading accounts," reflected in the 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,

Morgan Stanley Spectrum Series
(formerly, Morgan Stanley Dean Witter Spectrum Series)

Notes to Financial Statements--(Continued)

and (C) net option premiums, which represent the net of all monies paid and/or
received for such option premiums.

The Partnerships, in their normal course of business, enter into various
contracts with MS&Co. and MSIL acting as their commodity brokers. Pursuant to
brokerage agreements with MS&Co. and MSIL, to the extent that such trading
results in unrealized gains or losses, these amounts are offset and reported on
a net basis on the Partnerships' statements of financial condition.

The Partnerships have offset the fair value amounts recognized for forward
contracts executed with the same counterparty as allowable under terms of the
master netting agreements with MS&Co., the sole counterparty on such contracts.
The Partnerships have consistently applied their right to offset.

Brokerage and Related Transaction Fees and Costs-- The brokerage fees for
Spectrum Commodity, Spectrum Currency and Spectrum Global Balanced are accrued
at a flat monthly rate of 1/12 of 4.6% (a 4.6% annual rate) of Net Assets as
of the first day of each month. Prior to April 1, 2000, brokerage fees for
Spectrum Commodity were accrued at a monthly rate of 1/12 of 3.65% of Net
Assets (a 3.65% annual rate) as of the first day of each month.

Brokerage fees for Spectrum Select, Spectrum Strategic and Spectrum Technical
are accrued at a flat monthly rate of 1/12 of 7.25% (a 7.25% annual rate) of
Net Assets as of the first day of each month.

Such brokerage fees currently cover all brokerage commissions, transaction fees
and costs and ordinary administrative and continuing offering expenses.

Service Fee--Prior to April 1, 2000, Spectrum Commodity paid Demeter a monthly
service fee equal to 1/12 of 1% per month (a 1% annual rate) of the
Partnership's Net Assets as of the first day of each month.

Operating Expenses--The Partnerships incur monthly management fees and may
incur incentive fees. All common administrative and continuing offering
expenses including legal, auditing, accounting, filing fees and other related
expenses are borne by Morgan Stanley DW through the brokerage fees paid by the
Partnerships.

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

Morgan Stanley Spectrum Series
(formerly, Morgan Stanley Dean Witter Spectrum Series)

Notes to Financial Statements--(Continued)

Distributions--Distributions, other than redemptions of Units, are made on a
pro-rata basis at the sole discretion of Demeter. No distributions have been
made to date.

Continuing Offering--Units of each Partnership are offered at a price equal to
100% of the Net Asset Value per Unit as of the close of business on the last
day of the month. No selling commissions or charges related to the continuing
offering of Units will be paid by the Limited Partners or the Partnerships.
Morgan Stanley DW will pay all such costs.

Redemptions--Limited Partners may redeem some or all of their Units at 100% of
the Net Asset Value per Unit as of the end of the last day of any month that is
at least six months after the closing at which a person becomes a Limited
Partner, upon five business days advance notice by redemption form to Demeter.
Thereafter, Units redeemed on or prior to the last day of the twelfth month
after such Units were purchased will be subject to a redemption charge equal to
2% of the Net Asset Value of a Unit on the date of such redemption. Units
redeemed after the last day of the twelfth month and on or prior to the last
day of the twenty-fourth month after which such Units were purchased will be
subject to a redemption charge equal to 1% of the Net Asset Value of a Unit on
the date of such redemption. Units redeemed after the last day of the
twenty-fourth month after which such Units were purchased will not be subject
to a redemption charge. The foregoing redemption charges are paid to Morgan
Stanley DW. Redemptions must be made in whole Units, in a minimum amount of 50
Units, unless a Limited Partner is redeeming his entire interest in a
Partnership.

Exchanges--On the last day of the first month which occurs more than six months
after a person first becomes a Limited Partner in any of the Partnerships, and
at the end of each month thereafter, Limited Partners may exchange their
investment among the Partnerships (subject to certain restrictions outlined in
the Limited Partnership Agreements) without paying additional charges.

Dissolution of the Partnerships--Spectrum Commodity will terminate on December
31, 2027, Spectrum Currency, Spectrum Global Balanced, Spectrum Strategic and
Spectrum Technical will terminate on December 31, 2035 and Spectrum Select will
terminate on December 31, 2025 regardless of financial condition at such time,
or at an earlier date if certain conditions occur as defined in each
Partnership's Limited Partnership Agreement.

2. Related Party Transactions

The Partnerships pay brokerage fees to Morgan Stanley DW as described in Note
1. Each Partnership'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 Spectrum Series
(formerly, Morgan Stanley Dean Witter Spectrum Series)

Notes to Financial Statements--(Continued)

Morgan Stanley DW pays interest on these funds as described in Note 1. Spectrum
Commodity paid Demeter a service fee prior to April 1, 2000 and pays management
fees, and when applicable, incentive fees to MSCM.

3. Trading Advisors

Demeter, on behalf of each Partnership, retains certain commodity trading
advisors to make all trading decisions for the Partnerships. The trading
advisors for each Partnership are as follows:

Morgan Stanley Spectrum Commodity L.P.
Morgan Stanley Commodities Management Inc.

Morgan Stanley Spectrum Currency L.P.
John W. Henry & Company, Inc. ("JWH")
Sunrise Capital Partners, LLC ("Sunrise")

Morgan Stanley Spectrum Global Balanced L.P.
RXR, Inc. ("RXR")

Effective June 1, 2001 RXR was acquired by SSARIS Advisors, LLC.

Morgan Stanley Spectrum Select L.P.
EMC Capital Management, Inc.
Rabar Market Research, Inc.
Sunrise Capital Management, Inc.
Northfield Trading L.P.

Effective May 1, 2001 Spectrum Select entered into a management agreement with
Northfield Trading L.P., ("Northfield") adding Northfield as its fourth trading
advisor to the Partnership.

Morgan Stanley Spectrum Strategic L.P.
Allied Irish Capital Management, Ltd. ("AICM")
Blenheim Capital Management, L.L.C. ("Blenheim")
Eclipse Capital Management, Inc. ("Eclipse")

Effective August 31, 2001 Blenheim Investments, Inc. changed its name to
Blenheim Capital Management, L.L.C.

Effective April 14, 2000, Willowbridge Associates Inc. ("Willowbridge") was
terminated as an advisor to Spectrum Strategic. The assets of the Partnership
previously allocated to Willowbridge were allocated to Eclipse, effective June
26, 2000.

Effective March 4, 1999, Stonebrook Capital Management Inc. ("Stonebrook") was
terminated as an advisor to Spectrum Strategic. The assets of the Partnership
previously allocated to Stonebrook were allocated to AICM, effective June 1,
1999.

Morgan Stanley Spectrum Technical L.P.
Campbell & Company, Inc. ("Campbell")
Chesapeake Capital Corporation ("Chesapeake")
John W. Henry & Company, Inc.

Morgan Stanley Spectrum Series
(formerly, Morgan Stanley Dean Witter Spectrum Series)

Notes to Financial Statements--(Continued)

Compensation to the trading advisors by the Partnerships consists of a
management fee and an incentive fee as follows:

Management Fee--The management fee for Spectrum Commodity is accrued at the
rate of 5/24 of 1% of Net Assets on the first day of each month (a 2.5% annual
rate).

The management fee for Spectrum Currency is accrued at the rate of 1/12 of 2%
of Net Assets on the first day of each month (a 2% annual rate). Prior to
December 1, 2000, the management fee was accrued at the rate of 1/3 of 1% of
Net Assets allocated to JWH on the first day of each month and 1/4 of 1% of
Net Assets allocated to Sunrise on the first day of each month (annual rates of
4% and 3%, respectively).

The management fee for Spectrum Global Balanced is accrued at the rate of 5/48
of 1% per month of Net Assets on the first day of each month (a 1.25% annual
rate).

The management fee for Spectrum Select is accrued at the rate of 1/4 of 1% per
month of Net Assets allocated to each trading advisor on the first day of each
month (a 3% annual rate).

The management fee for Spectrum Strategic is accrued at the rate of 1/12 of 3%
of Net Assets on the first day of each month, (a 3% annual rate). Prior to
March 23, 2001 the management fee allocated to Blenheim was accrued at a rate
of 1/12 of 4% per month of Net Assets as of the first day of each month (a 4%
annual rate).

The management fee for Spectrum Technical is accrued at the rate of 1/12 of 2%
of Net Assets allocated to JWH on the first day of each month, 1/12 of 3% of
Net Assets allocated to Campbell on the first day of each month and 1/12 of 4%
of Net Assets allocated to Chesapeake on the first day of each month (annual
rates of 2%, 3% and 4% respectively). Prior to December 1, 2000 the management
fee was accrued to each trading advisor at the rate of 1/3 of 1% of Net Assets
on the first day of each month (a 4% annual rate).

Incentive Fee--Spectrum Commodity pays an annual incentive fee equal to 17.5%
of Partnership trading profits, as determined from the end of the last period
in which an incentive fee was earned. Prior to December 1, 2000, Spectrum
Commodity paid an annual incentive fee to MSCM equal to 20% of the trading
profits.

Spectrum Currency pays a monthly incentive fee equal to 20% of the trading
profits experienced with respect to each trading advisor's allocated Net Assets
as of the end of each calendar month. Prior to December 1, 2000, Spectrum
Currency paid a monthly incentive fee equal to 15% of the trading profits.

Spectrum Global Balanced, Spectrum Select and Spectrum Strategic each pay a
monthly incentive fee equal to 15% of the

Morgan Stanley Spectrum Series
(formerly, Morgan Stanley Dean Witter Spectrum Series)

Notes to Financial Statements--(Continued)

trading profits experienced with respect to each trading advisor's allocated
Net Assets as of the end of each calendar month.

Spectrum Technical pays a monthly incentive fee equal to 20% of the trading
profits experienced with respect to the Net Assets allocated to Campbell and
JWH as of the end of each calendar month and 19% of the trading profits
experienced with respect to the Net Assets allocated to Chesapeake as of the
end of each calendar month. Prior to December 1, 2000, Spectrum Technical paid
an incentive fee equal to 15% of trading profits to Campbell and JWH.

Trading profits represent the amount by which profits from futures, forwards
and options trading exceed losses after brokerage and management fees are
deducted.

For all Partnerships when trading losses are incurred, no incentive fee will be
paid in subsequent months until all such losses are recovered. Cumulative
trading losses are adjusted on a pro-rata basis for the net amount of each
month's subscriptions and redemptions.

4. Financial Instruments

The Partnerships trade futures contracts, options on futures contracts, and
forward contracts on physical commodities and other commodity interests,
including, but not limited to foreign currencies, financial instruments,
metals, energy and agricultural products. Futures and forwards represent
contracts for delayed delivery of an instrument at a specified date and price.
Risk arises from changes in the value of these contracts and the potential
inability of counterparties to perform under the terms of the contracts. There
are numerous factors which may significantly influence the market value of
these contracts, including interest rate volatility.

The Partnership accounts for its derivative investments in accordance with the
provisions of Statement of Financial Accounting Standard 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.

Generally derivatives include futures, forward, swaps or options contracts and
other financial instruments with similar characteristics such as caps, floors
and collars.

Morgan Stanley Spectrum Series
(formerly, Morgan Stanley Dean Witter Spectrum Series)

Notes to Financial Statements--(Continued)

The net unrealized gains (losses) on open contracts at December 31, reported as
a component of "Equity in futures interests trading accounts" on the statements
of financial condition, and their longest contract maturities were as follows:

Spectrum Commodity

Net Unrealized Gains/
(Losses) on Open Contracts Longest Maturities
------------------------------- ---------------------
Off- Off-
Exchange- Exchange- Exchange- Exchange-
Year Traded Traded Total Traded Traded
---- --------- --------- --------- ---------- ----------

$ $ $
2001 367,079 -- 367,079 Dec. 2002 --
2000 (25,283) -- (25,283) April 2001 --

Spectrum Currency

Net Unrealized Gains
on Open Contracts Longest Maturities
------------------------------- ---------------------
Off- Off-
Exchange- Exchange- Exchange- Exchange-
Year Traded Traded Total Traded Traded
---- --------- --------- --------- ---------- ----------
$ $ $
2001 -- 3,178,383 3,178,383 -- March 2002
2000 -- 555,569 555,569 -- March 2001

Spectrum Global Balanced

Net Unrealized Gains/
(Losses) on Open Contracts Longest Maturities
------------------------------- ---------------------
Off- Off-
Exchange- Exchange- Exchange- Exchange-
Year Traded Traded Total Traded Traded
---- --------- --------- --------- ---------- ----------
$ $ $
2001 646,308 42,900 689,208 March 2002 March 2002
2000 3,374,178 (56,534) 3,317,644 June 2001 March 2001

Morgan Stanley Spectrum Series
(formerly, Morgan Stanley Dean Witter Spectrum Series)

Notes to Financial Statements--(Continued)

Spectrum Select

Net Unrealized Gains
on Open Contracts Longest Maturities
-------------------------------- --------------------
Off- Off-
Exchange- Exchange- Exchange- Exchange-
Year Traded Traded Total Traded Traded
---- ---------- --------- ---------- --------- ----------

$ $ $
2001 1,010,544 4,386,192 5,396,736 Dec. 2002 March 2002
2000 23,901,575 1,650,722 25,552,297 Dec. 2001 March 2001

Spectrum Strategic

Net Unrealized Gains
on Open Contracts Longest Maturities
-------------------------------- --------------------
Off- Off-
Exchange- Exchange- Exchange- Exchange-
Year Traded Traded Total Traded Traded
---- ---------- --------- ---------- --------- ----------
$ $ $
2001 4,491,712 54 4,491,766 Dec. 2002 Jan. 2002
2000 1,986,132 -- 1,986,132 Dec. 2001 --

Spectrum Technical

Net Unrealized Gains
on Open Contracts Longest Maturities
-------------------------------- --------------------
Off- Off-
Exchange- Exchange- Exchange- Exchange-
Year Traded Traded Total Traded Traded
---- ---------- --------- ---------- --------- ----------
$ $ $
2001 828,853 10,676,762 11,505,615 Dec. 2002 March 2002
2000 37,170,209 2,872,100 40,042,309 Dec. 2001 March 2001

Morgan Stanley Spectrum Series
(formerly, Morgan Stanley Dean Witter Spectrum Series)

Notes to Financial Statements--(Continued)

The Partnerships have credit risk associated with counterparty nonperformance.
The credit risk associated with the instruments in which the Partnerships are
involved is limited to the amounts reflected in the Partnerships' statements of
financial condition.

The Partnerships also have 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 Partnerships' assets. Exchange-traded futures and
futures-styled options contracts are marked to market on a daily basis, with
variations in value settled on a daily basis. Each of Morgan Stanley DW, MS&Co.
and MSIL, as a futures commission merchant for each Partnership's
exchange-traded futures 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 and
futures-styled options contracts, including an amount equal to the net
unrealized gains (losses) on all open futures and futures-styled options
contracts, which funds, in the aggregate, totaled at December 31, 2001 and 2000
respectively, $13,347,440 and $20,504,696 for Spectrum Commodity, $43,241,135
and $14,391,541 for Spectrum Currency, $58,042,399 and $55,788,482 for Spectrum
Global Balanced, $236,193,605 and $220,456,937 for Spectrum Select, $70,459,374
and $75,431,959 for Spectrum Strategic and $247,001,207 and $268,672,299 for
Spectrum Technical. With respect to the Partnerships' off-exchange-traded
forward currency contracts, there are no daily settlements of variations in
value nor is there any requirement that an amount equal to the net unrealized
gains (losses) on open forward contracts be segregated. With respect to those
off-exchange-traded forward currency contracts, the Partnerships are at risk to
the ability of MS&Co., the sole counterparty on all of such contracts, to
perform. Each Partnership has a netting agreement with MS&Co. These agreements,
which seek to reduce both the Partnerships' and MS&Co.'s exposure on
off-exchange-traded forward currency contracts, should materially decrease the
Partnerships' credit risk in the event of MS&Co.'s bankruptcy or insolvency.

Morgan Stanley Spectrum Series
(formerly, Morgan Stanley Dean Witter Spectrum Series)

Notes to Financial Statements--(Continued)

5. Financial Highlights

Spectrum Commodity

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

NET ASSET VALUE, JANUARY 1, 2001: $ 7.85
------
NET OPERATING RESULTS:
Realized Loss (1.91)
Unrealized Profit 0.16
Interest Income 0.22
Expenses (0.48)
------
Net Loss (2.01)
------
NET ASSET VALUE, DECEMBER 31, 2001: $ 5.84
======
Expense Ratio 7.4%
Net Loss Ratio (31.7)%
TOTAL RETURN (25.6)%

Spectrum Currency

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

NET ASSET VALUE, JANUARY 1, 2001: $11.17
------
NET OPERATING RESULTS:
Realized Profit 1.11
Unrealized Profit 1.00
Interest Income 0.28
Expenses (1.15)
------
Net Income 1.24
------
NET ASSET VALUE, DECEMBER 31, 2001: $12.41
======
Expense Ratio 9.8%
Net Income Ratio 14.0%

TOTAL RETURN 11.1%

Spectrum Global Balanced

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

NET ASSET VALUE, JANUARY 1, 2001: $16.26
------
NET OPERATING RESULTS:
Realized Profit 1.02
Unrealized Loss (0.74)
Interest Income 0.61
Expenses (0.94)
------
Net Loss (0.05)
------
NET ASSET VALUE, DECEMBER 31, 2001: $16.21
======
Expense Ratio 5.8%
Net Loss Ratio (0.3)%
TOTAL RETURN (0.3)%

Morgan Stanley Spectrum Series
(formerly, Morgan Stanley Dean Witter Spectrum Series)

Notes to Financial Statements--(Continued)

Spectrum Select

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

NET ASSET VALUE, JANUARY 1, 2001: $23.57
------
NET OPERATING RESULTS:
Realized Profit 4.56
Unrealized Loss (2.09)
Interest Income 0.75
Expenses (2.83)
------
Net Income 0.39
------
NET ASSET VALUE, DECEMBER 31, 2001: $23.96
======
Expense Ratio 11.4 %
Net Income Ratio 1.3 %
TOTAL RETURN 1.7 %

Spectrum Strategic

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

NET ASSET VALUE, JANUARY 1, 2001: $10.61
------
NET OPERATING RESULTS:
Realized Profit 0.32
Unrealized Profit 0.37
Interest Income 0.33
Expenses (1.08)
------
Net Loss (0.06)
------
NET ASSET VALUE, DECEMBER 31, 2001: $10.55
======
Expense Ratio 10.4 %
Net Loss Ratio (0.7)%
TOTAL RETURN (0.6)%

Spectrum Technical

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

NET ASSET VALUE, JANUARY 1, 2001: $16.08
------
NET OPERATING RESULTS:
Realized Profit 1.78
Unrealized Loss (1.69)
Interest Income 0.49
Expenses (1.73)
------
Net Loss (1.15)
------
NET ASSET VALUE, DECEMBER 31, 2001: $14.93
======
Expense Ratio 10.8 %
Net Loss Ratio (7.2)%
TOTAL RETURN (7.2)%

6. Legal Matters

In April 2001, the Appellate Division of New York State dismissed the class
action previously disclosed in the Partnership's Annual Report for the year
ended December 31, 2000. Because plaintiffs did not exercise their right to
appeal any further, this dismissal constituted a final resolution in this case.

Morgan Stanley Spectrum Series
(formerly, Morgan Stanley Dean Witter Spectrum Series)

Notes to Financial Statements--(Concluded)

7. Subsequent Event

On February 27, 2002, Morgan Stanley Spectrum Global Balanced L.P., Morgan
Stanley Spectrum Select L.P., Morgan Stanley Spectrum Strategic L.P., and
Morgan Stanley Spectrum Technical L.P. received notification of a preliminary
entitlement to payment from the Sumitomo Copper Litigation Settlement
Administrator. Such preliminary award, however, is subject to a court hearing
scheduled on April 10, 2002 and is entirely contingent on the court's final
approval. Any amount ultimately received will be accounted for in the period
received, for the benefit of the limited partners at the date of receipt.

[LOGO] Morgan Stanley
c/o Morgan Stanley Trust Company,
Attention: Managed Futures, 7th Floor,
Harborside Financial Center, Plaza Two
Jersey City, NJ 07311-3977

ADDRESS SERVICE REQUESTED

[LOGO] printed on recycled paper
PRESORTED
FIRST CLASS MAIL
U.S. POSTAGE
PAID
PERMIT #374
LANCASTER, PA