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

                                   FORM N-CSR

                   CERTIFIED SHAREHOLDER REPORT OF REGISTERED
                         MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-03128

Morgan Stanley Dividend Growth Securities Inc.
               (Exact name of registrant as specified in charter)

1221 Avenue of the Americas, New York, New York 10020
         (Address of principal executive offices)                   (Zip code)

Ronald E. Robison
1221 Avenue of the Americas, New York, New York 10020
                                      (Name and address of agent for service)

Registrant's telephone number, including area code: 212-762-4000

Date of fiscal year end: February 29, 2004

Date of reporting period: February 29, 2004


Item 1 - Report to Shareholders

Welcome, Shareholder:

In this report, you'll learn about how your investment in Morgan Stanley Dividend Growth Securities performed during the annual period. We will provide an overview of the market conditions, and discuss some of the factors that affected performance during the reporting period. In addition, this report includes the Fund's financial statements and a list of Fund investments.

This material must be preceded or accompanied by a prospectus for the fund being offered. Market forecasts provided in this report may not necessarily come to pass. There is no assurance that the Fund will achieve its investment objective. The Fund is subject to market risk, which is the possibility that market values of securities owned by the Fund will decline and, therefore, the value of the Fund's shares may be less than what you paid for them. Accordingly, you can lose money investing in this Fund.

	Fund Report
	For the year ended February 29, 2004

Total Return for the 12-Months Ended February 29, 2004

Class A						Class B						Class C						Class D						S&P 500 Index1						Lipper Large-Cap Value Funds Index2
37.26%							36.62	%					36.25	%					37.58	%					38.52	%					39.40	%

Past performance is no guarantee of future results and current performance may be lower or higher than the figures shown. For more up-to-date information, including month-end performance figures, please visit morganstanley.com or speak with your Financial Advisor. Investment returns and principal value will fluctuate and fund shares, when redeemed, may be worth more or less than their original costs.

The performance of the Fund's four share classes varies because each has different expenses. The Fund's total return figures assume the reinvestment of all distributions but do not reflect the deduction of any applicable sales charges. Such costs would lower performance. See Performance Summary for standardized performance information.

Market Conditions

The U.S. equity markets rose strongly during the 12 months ended February 29, 2004. The period began amid great investor uncertainty concerning geopolitical issues and the bear market of 2001–2002. Investors' concerns began to abate in March 2003 as the Iraq conflict met a swift conclusion and economic indicators began to suggest that a period of economic recovery lay ahead. These positive factors fueled a stock market rally that began in March and solidified during the latter half of last year. Strong third- and fourth-quarter gross domestic product growth figures, a rebound in corporate earnings and an inflow of assets from pension and other institutional investors combined to drive equities higher. In the early part of 2004, however, the equity market cooled on investor concerns that stocks had become overvalued and the Federal Reserve might raise interest rates.

Various sectors' performance during the period was largely determined by their economic sensitivity. Highly cyclical information technology stocks rallied on investor anticipation of increased capital spending, while industrials and materials benefited from a rise in manufacturing activity, high commodity prices, a depreciating dollar and growing demand from China. Financial stocks also performed well, boosted by low interest rates and several high-profile mergers. In contrast, the more traditionally conservative sectors as consumer staples and utilities lagged, though all sectors returned positive gains.

Performance Analysis

The Fund underperformed the S&P 500 Index and the Lipper Large-Cap Value Funds Index. The largest detractor from the Fund's relative performance was stock selection and its below-benchmark position in technology stocks. The companies that we invest in are generally higher-quality, large-capitalization ones, which lagged their more-speculative peers in the benchmark. Our emphasis on higher-quality companies also hampered the Fund's relative performance in the utilities and health-care sectors. We have increased the Fund's exposure to technology in order to capture the recovery in corporate technology spending and technology's cyclical recovery. The Fund's position in energy — specifically oilfield services — has also been raised to take advantage of high oil prices and increased spending from major competitors.

The largest contributors to performance were in the consumer-related sectors, both discretionary and staples. Consumer spending remained high throughout the period, interest rates low and refinancing activity strong. In addition to these factors, both sectors benefited from an expected strong tax-rebate season

2

and favorable year-over-year comparisons. The Fund's basic materials holdings rallied sharply as the dollar remained weak and demand for raw materials rose from China. Industrials also provided a positive contribution to performance, as manufacturing activity increased and the global economy continued along its cyclical path to recovery.

TOP 10 HOLDINGS
United Technologies Corp.					3.1	%
Target Corp.					3.1
Alcoa, Inc.					3.1
Pfizer Inc.					3.0
Johnson Controls, Inc.					2.9
Deere & Co.					2.7
International Business Machines Corp.					2.6
Lincoln National Corp.					2.5
3M Co.					2.5
Citigroup Inc.					2.5

TOP FIVE INDUSTRIES
Industrial Conglomerates					7.7	%
Pharmaceuticals: Major					6.7
Major Banks					6.1
Integrated Oil					5.6
Discount Stores					4.6

Subject to change daily. All percentages are a percentage of net assets. Provided for informational purposes only and should not be deemed a recommendation to buy or sell the securities mentioned. Morgan Stanley is a full-service securities firm engaged in securities trading and brokerage activities, investment banking, research and analysis, financing and financial advisory services.

Investment Strategy

The Fund will normally invest at least 80% of its assets in common stocks of companies with a record of paying dividends and the potential for increasing dividends. The Fund's "Investment Manager," Morgan Stanley Investment Advisors Inc., initially employs a quantitative screening process in an attempt to identify a number of common stocks which are undervalued and which have a record of paying dividends. The Investment Manager then applies qualitative analysis to determine which stocks it believes have the potential to increase dividends and, finally, to determine whether any of the stocks should be added to or sold from the Fund's portfolio.

Annual Householding Notice

To reduce printing and mailing costs, the Fund attempts to eliminate duplicate mailings to the same address. The Fund delivers a single copy of certain shareholder documents, including shareholder reports, prospectuses and proxy materials, to investors with the same last name who reside at the same address. Your participation in this program will continue for an unlimited period of time unless you instruct us otherwise. You can request multiple copies of these documents by calling (800) 350-6414, 8:00 a.m. to 8:00 p.m., ET. Once our Customer Service Center has received your instructions, we will begin sending individual copies for each account within 30 days.

Proxy Voting Policies and Procedures

A description of the Fund's policies and procedures with respect to the voting of proxies relating to the Fund's portfolio securities is available without charge, upon request, by calling (800) 869-NEWS. This information is also available on the Securities and Exchange Commission's website at http://www.sec.gov.

3

	Performance Summary

Performance of a $10,000 Investment — Class B

Past performance is not predictive of future returns. Investment return and principal value will fluctuate. When you sell fund shares, they may be worth less than their original cost. The graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Performance for Class A, Class B, Class C, and Class D shares will vary due to differences in sales charges and expenses.

4

Average Annual Total Returns — Period Ended February 29, 2004

						Class A Shares* (since 07/28/97)						Class B Shares** (since 03/31/81)						Class C Shares† (since 07/28/97)						Class D Shares†† (since 07/28/97)
Symbol						DIVAX						DIVBX						DIVCX						DIVDX
1 Year							37.26%	3					36.62%	3					36.25%	3					37.58%	3
							30.06	4					31.62	4					35.25	4					—
5 Years							0.80	3					0.16	3					0.06	3					1.04	3
							(0.28)	4					(0.12)	4					0.06	4					—
10 Years							—						8.59	3					—						—
							—						8.59	4					—						—
Since Inception							3.45	3					12.03	3					2.68	3					3.69	3
							2.60	4					12.03	4					2.68	4					—

Notes on Performance

(1) The Standard & Poor's 500 Index (S&P 500®) is a broad-based index, the performance of which is based on the performance of 500 widely-held common stocks chosen for market size, liquidity and industry group representation. The Index does not include any expenses, fees or charges. Such costs would lower performance. It is not possible to invest directly in an index.

(2) The Lipper Large-Cap Value Funds Index is an equally weighted performance index of the largest qualifying funds (based on net assets) in the Lipper Large-Cap Value Funds classification. The Index, which is adjusted for capital gains distributions and income dividends, is unmanaged and should not be considered an investment. There are currently 30 funds represented in this Index.

(3) Figure shown assumes reinvestment of all distributions and does not reflect the deduction of any sales charges.

(4) Figure shown assumes reinvestment of all distributions and the deduction of the maximum applicable sales charge. See the Fund's current prospectus for complete details on fees and sales charges.

* The maximum front-end sales charge for Class A is 5.25%.

** The maximum contingent deferred sales charge (CDSC) for Class B is 5.0%. The CDSC declines to 0% after six years.

† The maximum contingent deferred sales charge for Class C is 1.0% for shares redeemed within one year of purchase.

†† Class D has no sales charge.

‡ Closing value assuming a complete redemption on February 29, 2004.

5

Morgan Stanley Dividend Growth Securities Inc.

Portfolio of Investments February 29, 2004

NUMBER OF SHARES								VALUE
				Common Stocks (98.4%)
				Aerospace & Defense (0.6%)
	495,600			Northrop Grumman Corp.				$	50,110,116
				Aluminum (3.5%)
	658,700			Alcan Aluminum Ltd. (Canada)					31,373,881
	6,429,300			Alcoa, Inc.					240,905,871
									272,279,752
				Apparel/Footwear (1.2%)
	2,032,000			VF Corp.					91,297,760
				Auto Parts: O.E.M. (2.9%)
	3,896,700			Johnson Controls, Inc.					227,255,544
				Beverages: Non-Alcoholic (2.2%)
	3,518,500			Coca-Cola Co. (The)					175,784,260
				Biotechnology (0.9%)
	997,400			Amgen Inc. *					63,364,822
	145,200			Gilead Sciences, Inc. *					7,871,292
									71,236,114
				Chemicals: Major      Diversified (2.5%)
	4,445,200			Dow Chemical Co. (The)					193,232,844
				Computer Communications (1.6%)
	5,520,900			Cisco Systems, Inc. *					127,532,790
				Computer Peripherals (0.3%)
	291,000			Lexmark International, Inc. *					23,946,390
				Computer Processing Hardware (1.0%)
	2,455,700			Dell Inc. *					80,178,605
				Data Processing Services (1.6%)
	3,125,500			First Data Corp.					128,082,990
				Discount Stores (4.6%)
	5,506,800			Target Corp.					242,078,928
	2,060,200			Wal-Mart Stores, Inc.					122,705,512
									364,784,440
				Drugstore Chains (1.0%)
	1,998,500			CVS Corp.					74,943,750
				Electric Utilities (2.2%)
	1,713,200			Exelon Corp.					115,024,248
	814,500			FPL Group, Inc.					53,471,925
									168,496,173
				Finance/Rental/Leasing (2.0%)
	546,500			Fannie Mae				$	40,932,850
	4,281,500			MBNA Corp.					117,013,395
									157,946,245
				Financial Conglomerates (3.4%)
	3,958,900			Citigroup Inc.					198,974,314
	1,706,800			J.P. Morgan Chase & Co.					70,012,936
									268,987,250
				Food Distributors (1.2%)
	2,453,800			SYSCO Corp.					97,293,170
				Food: Major Diversified (2.4%)
	3,675,200			PepsiCo, Inc.					190,742,880
				Home Improvement Chains (2.4%)
	5,094,000			Home Depot, Inc. (The)					184,963,140
				Hospital/Nursing Management (0.3%)
	534,100			HCA, Inc.					22,709,932
				Household/Personal Care (4.3%)
	2,458,800			Avon Products, Inc.					173,591,280
	1,617,100			Procter & Gamble Co. (The)					165,768,921
									339,360,201
				Industrial Conglomerates (7.7%)
	2,551,200			3M Co.					199,044,624
	5,036,500			General Electric Co.					163,786,980
	2,664,700			United Technologies Corp.					245,445,517
									608,277,121
				Information Technology     Services (3.0%)
	1,417,100			Accenture Ltd. (Class A) (Bermuda) *					32,735,010
	2,128,600			International Business Machines Corp.					205,409,900
									238,144,910
				Integrated Oil (5.6%)
	3,938,500			BP PLC (ADR) (United Kingdom)					193,774,200
	4,037,900			Exxon Mobil Corp.					170,278,243
	1,468,900			Royal Dutch Petroleum Co. (NY Registered Shares)					72,842,751
									436,895,194

See Notes to Financial Statements

6

Morgan Stanley Dividend Growth Securities Inc.

Portfolio of Investments February 29, 2004 continued

NUMBER OF SHARES								VALUE
				Investment Banks/Brokers (3.1%)
	659,600			Goldman Sachs Group, Inc. (The)				$	69,831,852
	779,700			Lehman Brothers Holdings Inc.					67,607,787
	1,728,700			Merrill Lynch & Co., Inc.					105,813,727
									243,253,366
				Investment Managers (0.9%)
	2,203,800			Mellon Financial Corp.					71,359,044
				Life/Health Insurance (2.5%)
	4,306,500			Lincoln National Corp.					199,950,795
				Major Banks (6.1%)
	2,237,200			Bank of America Corp.					183,271,424
	1,233,900			Bank of New York Co., Inc. (The)					40,718,700
	1,645,900			Comerica, Inc.					94,705,086
	1,973,300			KeyCorp					63,974,386
	394,200			PNC Financial Services Group					23,108,004
	1,349,900			Wells Fargo & Co.					77,416,765
									483,194,365
				Major Telecommunications (2.0%)
	4,094,900			Verizon Communications Inc.					156,957,517
				Managed Health Care (1.1%)
	971,757			Anthem, Inc. *					83,522,514
				Medical Specialties (0.7%)
	430,200			Guidant Corp.					29,313,828
	477,800			Medtronic, Inc.					22,408,820
									51,722,648
				Multi-Line Insurance (1.6%)
	1,150,700			American International Group, Inc.					85,151,800
	646,500			Hartford Financial Services Group, Inc. (The)					42,345,750
									127,497,550
				Office Equipment/Supplies (1.9%)
	3,675,100			Pitney Bowes, Inc.					151,965,385
				Oilfield Services/Equipment (1.7%)
	1,729,000			Halliburton Co.				$	55,258,840
	1,233,300			Schlumberger Ltd.					79,535,517
									134,794,357
				Packaged Software (3.3%)
	496,500			Mercury Interactive Corp. *					24,100,110
	7,465,000			Microsoft Corp.					197,822,500
	1,004,800			SAP AG (ADR) (Germany)					39,790,080
									261,712,690
				Pharmaceuticals: Major (6.7%)
	5,379,600			Bristol-Myers Squibb Co.					149,660,472
	6,457,200			Pfizer Inc.					236,656,380
	3,503,400			Wyeth					138,384,300
									524,701,152
				Railroads (1.0%)
	2,341,100			Burlington Northern Santa Fe Corp.					75,336,598
				Semiconductors (1.5%)
	535,600			Analog Devices, Inc.					26,726,440
	876,200			Intel Corp.					25,611,326
	586,400			Marvell Technology Group Ltd. (Bermuda) *					26,698,792
	462,300			Maxim Integrated Products, Inc.					23,073,393
	510,500			Texas Instruments Inc.					15,646,825
									117,756,776
				Services to the Health     Industry (0.4%)
	838,700			Medco Health Solutions Inc. *					27,391,942
				Tobacco (1.4%)
	1,962,400			Altria Group, Inc.					112,936,120
				Trucks/Construction/Farm     Machinery (4.1%)
	1,469,400			Caterpillar Inc.					111,307,050
	3,341,300			Deere & Co.					214,611,699
									325,918,749
				Total Common Stocks
				(Cost $3,648,124,188)					7,744,453,139

See Notes to Financial Statements

7

Morgan Stanley Dividend Growth Securities Inc.

Portfolio of Investments February 29, 2004 continued

PRINCIPAL AMOUNT IN THOUSANDS								VALUE
				Short-Term Investment (2.3%) Repurchase Agreement
$	185,126			Joint repurchase agreement account 1.03% due 03/01/04 (dated 02/27/04; proceeds $185,141,890) (a) (Cost $185,126,000)				$	185,126,000

Total Investments
(Cost $3,833,250,188) (b)				100.7 %					7,929,579,139
Liabilities In Excess of Other Assets				(0.7)					(57,214,180	)
Net Assets				100.0 %				$	7,872,364,959

ADR American Depository Receipt.

* Non-income producing security.

(a) Collateralized by federal agency and U.S. Treasury obligations.

(b) The aggregate cost for federal income tax purposes is $3,834,872,610. The aggregate gross unrealized appreciation is $4,125,595,005 and the aggregate gross unrealized depreciation is $30,888,476, resulting in net unrealized appreciation of $4,094,706,529.

See Notes to Financial Statements

8

Morgan Stanley Dividend Growth Securities Inc.

Financial Statements

Statement of Assets and Liabilities

February 29, 2004

Assets:
Investments in securities, at value (cost $3,833,250,188)				$	7,929,579,139
Cash					20,753
Receivable for:
Dividends					14,059,554
Capital stock sold					4,618,592
Foreign withholding taxes reclaimed					12,722
Prepaid expenses and other assets					112,765
Total Assets					7,948,403,525
Liabilities:
Payable for:
Investments purchased					59,375,912
Capital stock redeemed					7,410,585
Distribution fee					5,960,223
Investment management fee					2,777,312
Accrued expenses and other payables					514,534
Total Liabilities					76,038,566
Net Assets				$	7,872,364,959
Composition of Net Assets:
Paid-in-capital				$	3,107,888,303
Net unrealized appreciation					4,096,328,951
Accumulated undistributed net investment income					21,815,603
Accumulated undistributed net realized gain					646,332,102
Net Assets				$	7,872,364,959
Class A Shares:
Net Assets				$	126,463,480
Shares Outstanding (500,000,000 shares authorized, $.01 par value)					3,010,264
Net Asset Value Per Share				$	42.01
Maximum Offering Price Per Share,
(net asset value plus 5.54% of net asset value)				$	44.34
Class B Shares:
Net Assets				$	7,039,582,602
Shares Outstanding (500,000,000 shares authorized, $.01 par value)					167,277,350
Net Asset Value Per Share				$	42.08
Class C Shares:
Net Assets				$	118,104,263
Shares Outstanding (500,000,000 shares authorized, $.01 par value)					2,819,210
Net Asset Value Per Share				$	41.89
Class D Shares:
Net Assets				$	588,214,614
Shares Outstanding (500,000,000 shares authorized, $.01 par value)					13,991,966
Net Asset Value Per Share				$	42.04

Statement of Operations

For the year ended February 29, 2004

Net Investment Income:
Income
Dividends (net of $1,733,381 foreign withholding tax)				$	172,593,645
Interest					864,747
Total Income					173,458,392
Expenses
Distribution fee (Class A shares)					286,608
Distribution fee (Class B shares)					66,545,693
Distribution fee (Class C shares)					999,334
Investment management fee					31,307,373
Transfer agent fees and expenses					8,725,071
Shareholder reports and notices					433,868
Custodian fees					358,134
Registration fees					105,091
Directors' fees and expenses					63,755
Professional fees					67,591
Other					179,796
Total Expenses					109,072,314
Less: distribution fee rebate (Class B shares)					(18,800,608	)
Net Expenses					90,271,706
Net Investment Income					83,186,686
Net Realized and Unrealized Gain:
Net realized gain					1,166,883,849
Net change in unrealized appreciation					1,011,336,415
Net Gain					2,178,220,264
Net Increase				$	2,261,406,950

See Notes to Financial Statements

9

Morgan Stanley Dividend Growth Securities Inc.

Financial Statements continued

Statement of Changes in Net Assets

				FOR THE YEAR ENDED FEBRUARY 29, 2004				FOR THE YEAR ENDED FEBRUARY 28, 2003
Increase (Decrease) in Net Assets:
Operations:
Net investment income				$	83,186,686			$	83,384,383
Net realized gain					1,166,883,849				168,461,681
Net change in unrealized appreciation					1,011,336,415				(2,624,203,210	)
Net Increase (Decrease)					2,261,406,950				(2,372,357,146	)
Dividends and Distributions to Shareholders from:
Net investment income
Class A shares					(1,963,643	)			(2,241,425	)
Class B shares					(74,340,471	)			(77,556,153	)
Class C shares					(878,589	)			(1,055,263	)
Class D shares					(8,714,782	)			(8,637,871	)
Net realized gain
Class A shares					(10,500,574	)			(2,997,124	)
Class B shares					(581,521,886	)			(197,956,757	)
Class C shares					(8,873,020	)			(2,584,634	)
Class D shares					(43,854,656	)			(10,202,124	)
Total Dividends and Distributions					(730,647,621	)			(303,231,351	)
Net decrease from capital stock transactions					(241,898,098	)			(1,356,525,019	)
Net Increase (Decrease)					1,288,861,231				(4,032,113,516	)
Net Assets:
Beginning of period					6,583,503,728				10,615,617,244
End of Period (Including accumulated undistributed net investment income of $21,815,603 and $24,473,032, respectively)				$	7,872,364,959			$	6,583,503,728

See Notes to Financial Statements

10

Morgan Stanley Dividend Growth Securities Inc.

Notes to Financial Statements February 29, 2004

1.   Organization and Accounting Policies

Morgan Stanley Dividend Growth Securities Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as a diversified, open-end management investment company. The Fund's investment objective is to provide reasonable current income and long-term growth of income and capital. The Fund seeks to achieve its objective by investing primarily in common stock of companies with a record of paying dividends and the potential for increasing dividends. The Fund was incorporated in Maryland on December 22, 1980 and commenced operations on March 30, 1981. On July 28, 1997, the Fund converted to a multiple class share structure.

The Fund offers Class A shares, Class B shares, Class C shares and Class D shares. The four classes are substantially the same except that most Class A shares are subject to a sales charge imposed at the time of purchase and some Class A shares, and most Class B shares and Class C shares are subject to a contingent deferred sales charge imposed on shares redeemed within one year, six years and one year, respectively. Class D shares are not subject to a sales charge. Additionally, Class A shares, Class B shares and Class C shares incur distribution expenses.

The following is a summary of significant accounting policies:

A.   Valuation of Investments — (1) an equity portfolio security listed or traded on the New York Stock Exchange ("NYSE") or American Stock Exchange or other exchange is valued at its latest sale price prior to the time when assets are valued; if there were no sales that day, the security is valued at the mean between the last reported bid and asked price; (2) an equity portfolio security listed or traded on the Nasdaq is valued at the Nasdaq Official Closing Price; if there were no sales that day, the security is valued at the mean between the last reported bid and asked price; (3) all other portfolio securities for which over-the-counter market quotations are readily available are valued at the mean between the last reported bid and asked price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (4) for equity securities traded on foreign exchanges, the last reported sale price or the latest bid price may be used if there were no sales on a particular day; (5) when market quotations are not readily available or Morgan Stanley Investment Advisors Inc. (the "Investment Manager") determines that the latest sale price, the bid price or the mean between the last reported bid and asked price do not reflect a security's market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund's Directors; (6) certain portfolio securities may be valued by an outside pricing service approved by the Fund's Directors. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business on the NYSE. If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Fund's

11

Morgan Stanley Dividend Growth Securities Inc.

Notes to Financial Statements February 29, 2004 continued

Directors or by the Investment Manager using a pricing service and/or procedures approved by the Fund Directors; and (7) short-term debt securities having a maturity date of more than sixty days at time of purchase are valued on a mark-to-market basis until sixty days prior to maturity and thereafter at amortized cost based on their value on the 61st day. Short-term debt securities having a maturity date of sixty days or less at the time of purchase are valued at amortized cost.

B.   Accounting for Investments — Security transactions are accounted for on the trade date (date the order to buy or sell is executed). Realized gains and losses on security transactions are determined by the identified cost method. Dividend income and other distributions are recorded on the ex-dividend date. Discounts are accreted and premiums are amortized over the life of the respective securities. Interest income is accrued daily.

C.   Repurchase Agreements — Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund, along with other affiliated entities managed by the Investment Manager, may transfer uninvested cash balances into one or more joint repurchase agreement accounts. These balances are invested in one or more repurchase agreements and are collateralized by cash, U.S. Treasury or federal agency obligations. The Fund may also invest directly with institutions in repurchase agreements. The Fund's custodian receives the collateral, which is marked-to-market daily to determine that the value of the collateral does not decrease below the repurchase price plus accrued interest.

D.   Multiple Class Allocations — Investment income, expenses (other than distribution fees), and realized and unrealized gains and losses are allocated to each class of shares based upon the relative net asset value on the date such items are recognized. Distribution fees are charged directly to the respective class.

E.   Federal Income Tax Policy — It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Accordingly, no federal income tax provision is required.

F.   Dividends and Distributions to Shareholders — Dividends and distributions to shareholders are recorded on the ex-dividend date.

G.   Use of Estimates — The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates.

2.   Investment Management Agreement

Pursuant to an Investment Management Agreement with the Investment Manager, the Fund pays a management fee, accrued daily and payable monthly, by applying the following annual rates to the net assets of the Fund determined at the close of each business day: 0.625% to the portion of daily net assets not exceeding $250 million; 0.50% to the portion of daily net assets exceeding $250 million but not exceeding

12

Morgan Stanley Dividend Growth Securities Inc.

Notes to Financial Statements February 29, 2004 continued

$1 billion; 0.475% to the portion of daily net assets exceeding $1 billion but not exceeding $2 billion; 0.45% to the portion of daily net assets exceeding $2 billion but not exceeding $3 billion; 0.425% to the portion of daily net assets exceeding $3 billion but not exceeding $4 billion; 0.40% to the portion of daily net assets exceeding $4 billion but not exceeding $5 billion; 0.375% to the portion of daily net assets exceeding $5 billion but not exceeding $6 billion; 0.35% to the portion of daily net assets exceeding $6 billion but not exceeding $8 billion; 0.325% to the portion of daily net assets exceeding $8 billion but not exceeding $10 billion; 0.30% to the portion of daily net assets exceeding $10 billion but not exceeding $15 billion; and 0.275% to the portion of daily net assets exceeding $15 billion.

3.   Plan of Distribution

Shares of the Fund are distributed by Morgan Stanley Distributors Inc. (the "Distributor"), an affiliate of the Investment Manager. The Fund has adopted a Plan of Distribution (the "Plan") pursuant to Rule 12b-1 under the Act. The Plan provides that the Fund will pay the Distributor a fee which is accrued daily and paid monthly at the following annual rates: (i) Class A – up to 0.25% of the average daily net assets of Class A; (ii) Class B – 1.0% of the lesser of: (a) the average daily aggregate gross sales of the Class B shares since the inception of the Plan on July 2, 1984 (not including reinvestment of dividends or capital gain distributions) less the average daily aggregate net asset value of the Class B shares redeemed since the Plan's inception upon which a contingent deferred sales charge has been imposed or waived; or (b) the average daily net assets of Class B attributable to shares issued, net of related shares redeemed, since the Plan's inception; and (iii) Class C – up to 1.0% of the average daily net assets of Class C.

In the case of Class B shares, provided that the Plan continues in effect, any cumulative expenses incurred by the Distributor but not yet recovered may be recovered through the payment of future distribution fees from the Fund pursuant to the Plan and contingent deferred sales charges paid by investors upon redemption of Class B shares. Although there is no legal obligation for the Fund to pay expenses incurred in excess of payments made to the Distributor under the Plan and the proceeds of contingent deferred sales charges paid by investors upon redemption of shares, if for any reason the Plan is terminated, the Trustees will consider at that time the manner in which to treat such expenses. The Distributor has advised the Fund that such excess amounts totaled $2,815,526 at February 29, 2004.

For the year ended February 29, 2004, the Distributor rebated a portion of the distribution fees paid by the Fund on Class B shares in the amount of $18,800,608.

In the case of Class A shares and Class C shares, expenses incurred pursuant to the Plan in any calendar year in excess of 0.25% or 1.0% of the average daily net assets of Class A or Class C, respectively, will not be reimbursed by the Fund through payments in any subsequent year, except that expenses representing a gross sales credit to Morgan Stanley Financial Advisors or other selected broker-dealer representatives may be reimbursed in the subsequent calendar year. For the year ended February 29, 2004, the distribution fee was accrued for Class A shares and Class C shares at the annual rate of 0.24% and 1.0%, respectively.

13

Morgan Stanley Dividend Growth Securities Inc.

Notes to Financial Statements February 29, 2004 continued

The Distributor has informed the Fund that for the year ended February 29, 2004, it received contingent deferred sales charges from certain redemptions of the Fund's Class A shares, Class B shares and Class C shares of $4,102, $4,133,193 and $17,240, respectively and received $515,084 in front-end sales charges from sales of the Fund's Class A shares. The respective shareholders pay such charges which are not an expense of the Fund.

4.   Security Transactions and Transactions with Affiliates

The cost of purchases and the proceeds from sales of portfolio securities, excluding short-term investments, for the year ended February 29, 2004 aggregated $2,479,920,779 and $3,572,142,809, respectively.

Included in the aforementioned are sales with Morgan Stanley Utilities Fund of $1,634,053, including a net realized gain of $202,320.

For the year ended February 29, 2004, the Fund incurred brokerage commissions of $899,547 with Morgan Stanley & Co., Inc., an affiliate of the Investment Manager and Distributor, for portfolio transactions executed on behalf of the Fund.

The Fund has an unfunded noncontributory defined benefit pension plan covering certain independent Directors of the Fund who will have served as independent Directors for at least five years at the time of retirement. Benefits under this plan are based on factors which include years of service and compensation. Aggregate pension costs for the year ended February 29, 2004 included in Directors' fees and expenses in the Statement of Operations amounted to $7,213. At February 29, 2004, the Fund had an accrued pension liability of $61,516 which is included in accrued expenses in the Statement of Assets and Liabilities.

On December 2, 2003, the Directors voted to close the plan to new participants, eliminate the future benefits growth due to increases to compensation after July 31, 2003 and effective April 1, 2004, establish an unfunded deferred compensation plan which allows each independent Trustee to defer payment of all or a portion of the fees he receives for serving on the Board of Directors throughout the year.

Morgan Stanley Trust, an affiliate of the Investment Manager and Distributor, is the Fund's transfer agent. At February 29, 2004, the Fund had transfer agent fees and expenses payable of approximately $91,000.

5.   Federal Income Tax Status

The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations which may differ from generally accepted accounting principles. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification.

14

Morgan Stanley Dividend Growth Securities Inc.

Notes to Financial Statements February 29, 2004 continued

Dividends and distributions which exceed net investment income and net realized capital gains for tax purposes, are reported as distributions of paid-in-capital.

The tax character of distributions paid was as follows:

				FOR THE YEAR ENDED FEBRUARY 29, 2004				FOR THE YEAR ENDED FEBRUARY 28, 2003
Ordinary income				$	93,623,781			$	89,490,712
Long-term capital gains					637,023,840				213,740,639
Paid-in-capital					—				—
Total distributions				$	730,647,621			$	303,231,351
As of February 29, 2004, the tax-basis components of accumulated earnings were as follows:
Undistributed ordinary income				$	66,895,307
Undistributed long-term gains					645,556,496
Net accumulated earnings					712,451,803
Capital loss carryforward*					(42,620,160	)
Temporary differences					(61,516	)
Net unrealized appreciation					4,094,706,529
Total accumulated earnings				$	4,764,476,656

*As of February 29, 2004, the Fund had a net capital loss carryforward of $42,620,160 of which $37,562,781 will expire on February 28, 2010 and $5,057,379 will expire on February 28, 2011 to offset future capital gains to the extent provided by regulations.

As part of the Fund's acquisition of the assets of Morgan Stanley Equity Fund ("Equity"), the Fund obtained a net capital loss carryforward of $121,087,370 from Equity. Utilization of this carryforward is subject to limitations imposed by the Internal Revenue Code and Treasury Regulations, reducing the total carryforward available.

As of February 29, 2004, the Fund had temporary book/tax differences primarily attributable to capital loss deferrals on wash sales and permanent book/tax differences primarily attributable to a capital loss carryforward written off by the Fund due to a merger. To reflect reclassifications arising from the permanent differences, paid-in-capital was charged $78,520,580, accumulated undistributed net realized gain was credited $78,467,210 and accumulated undistributed net investment income was credited $53,370.

15

Morgan Stanley Dividend Growth Securities Inc.

Notes to Financial Statements February 29, 2004 continued

6.   Capital Stock

Transactions in capital stock were as follows:

				FOR THE YEAR ENDED FEBRUARY 29, 2004								FOR THE YEAR ENDED FEBRUARY 28, 2003
				SHARES				AMOUNT				SHARES				AMOUNT
CLASS A SHARES
Sold					651,542			$	25,429,321				807,118			$	31,752,569
Shares issued in connection with the acquisition of Morgan Stanley Equity Fund					101,388				4,101,120				—				—
Reinvestment of dividends and distributions					284,735				11,143,948				106,190				4,371,930
Redeemed					(1,097,538	)			(43,265,319	)			(970,871	)			(38,277,429	)
Net decrease – Class A					(59,873	)			(2,590,930	)			(57,563	)			(2,152,930	)
CLASS B SHARES
Sold					9,195,221				362,374,599				9,619,119				386,653,422
Shares issued in connection with the acquisition of Morgan Stanley Equity Fund					2,575,564				104,507,279				—				—
Reinvestment of dividends and distributions					15,069,631				591,619,055				6,030,065				248,999,928
Redeemed					(36,423,311	)			(1,429,573,259	)			(51,108,510	)			(2,008,751,524	)
Net decrease – Class B					(9,582,895	)			(371,072,326	)			(35,459,326	)			(1,373,098,174	)
CLASS C SHARES
Sold					558,455				22,071,616				492,590				19,786,226
Shares issued in connection with the acquisition of Morgan Stanley Equity Fund					193,897				7,834,971				—				—
Reinvestment of dividends and distributions					235,875				9,228,507				84,072				3,456,704
Redeemed					(602,576	)			(23,686,489	)			(841,485	)			(33,132,034	)
Net increase (decrease) – Class C					385,651				15,448,605				(264,823	)			(9,889,104	)
CLASS D SHARES
Sold					4,007,163				159,335,542				3,402,262				136,185,393
Shares issued in connection with the acquisition of Morgan Stanley Equity Fund					205,852				8,330,415				—				—
Reinvestment of dividends and distributions					1,254,655				49,088,021				433,093				17,658,220
Redeemed					(2,534,996	)			(100,437,425	)			(3,110,440	)			(125,228,424	)
Net increase – Class D					2,932,674				116,316,553				724,915				28,615,189
Net decrease in Fund					(6,324,443	)		$	(241,898,098	)			(35,056,797	)		$	(1,356,525,019	)

16

Morgan Stanley Dividend Growth Securities Inc.

Notes to Financial Statements February 29, 2004 continued

7.   Fund Merger

On December 22, 2003, the Fund acquired all the net assets of Equity based on the respective valuations as of the close of business on December 19, 2003 pursuant to a plan of reorganization approved by the shareholders of Equity on December 16, 2003. The acquisition was accomplished by a tax-free exchange of 101,388 Class A shares of the Fund at a net asset value of $40.44 per share for 533,177 Class A shares of Equity; 2,575,564 Class B shares of the Fund at a net asset value of $40.55 per share for 14,190,097 Class B shares of Equity; 193,897 Class C shares of the Fund at a net asset value of $40.39 per share for 1,059,741 Class C shares of Equity; and 205,852 Class D shares of the Fund at a net asset value of $40.45 per share for 1,067,527 Class D shares of Equity. The net assets of the Fund and Equity immediately before the acquisition were $7,684,808,181 and $124,773,785, respectively, including unrealized appreciation of $8,380,961 for Equity. Immediately after the acquisition, the combined net assets of the Fund amounted to $7,809,581,966.

8.   Legal Matters

The Investment Manager, certain affiliates of the Investment Manager, certain officers of such affiliates and certain investment companies advised by the Investment Manager or its affiliates, including the Fund, are named as defendants in a number of similar class action complaints, which were recently consolidated. This consolidated action also names as defendants certain individual Trustees and Directors of the Morgan Stanley funds. The consolidated amended complaint generally alleges that defendants, including the Fund, violated their statutory disclosure obligations and fiduciary duties by failing properly to disclose (i) that the Investment Manager and certain affiliates of the Investment Manager allegedly offered economic incentives to brokers and others to recommend the funds advised by the Investment Manager or its affiliates to investors rather than funds managed by other companies, and (ii) that the funds advised by the Investment Manager or its affiliates, including the Fund, allegedly paid excessive commissions to brokers in return for their efforts to recommend these funds to investors. The complaint seeks, among other things, unspecified compensatory damages, rescissionary damages, fees and costs. The defendants intend to move to dismiss the action and otherwise vigorously to defend it. While the Fund believes that it has meritorious defenses, the ultimate outcome of this matter is not presently determinable at this early stage of the litigation, and no provision has been made in the Fund's financial statements for the effect, if any, of this matter.

17

Morgan Stanley Dividend Growth Securities Inc.

Financial Highlights

Selected ratios and per share data for a share of capital stock outstanding throughout each period:

				FOR THE YEAR ENDED FEBRUARY 28,
				2004*				2003				2002				2001				2000*
Class A Shares
Selected Per Share Data:
Net asset value, beginning of period				$	34.01			$	46.44			$	52.54			$	50.11			$	60.22
Income (loss) from investment operations:
Net investment income‡					0.61				0.68				0.71				0.84				0.94
Net realized and unrealized gain (loss)					11.62				(11.41	)			(3.51	)			8.35				(7.75	)
Total income (loss) from investment operations					12.23				(10.73	)			(2.80	)			9.19				(6.81	)
Less dividends and distributions from:
Net investment income					(0.65	)			(0.72	)			(0.70	)			(0.92	)			(0.99	)
Net realized gain					(3.58	)			(0.98	)			(2.60	)			(5.84	)			(2.31	)
Total dividends and distributions					(4.23	)			(1.70	)			(3.30	)			(6.76	)			(3.30	)
Net asset value, end of period				$	42.01			$	34.01			$	46.44			$	52.54			$	50.11
Total Return†					37.26	%			(23.66	)%			(5.35	)%			19.31	%			(12.07	)%
Ratios to Average Net Assets(1):
Expenses					.80	%			0.77	%			0.73	%			0.73	%			0.67	%
Net investment income					1.56	%			1.69	%			1.46	%			1.57	%			1.52	%
Supplemental Data:
Net assets, end of period, in thousands					$126,451				$104,419				$145,257				$223,106				$214,669
Portfolio turnover rate					34	%			7	%			0	%			1	%			4	%

* Year ended February 29.

‡ The per share amounts were computed using an average number of shares outstanding during the period.

† Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period.

(1) Reflects overall Fund ratios for investment income and non-class specific expenses.

See Notes to Financial Statements

18

Morgan Stanley Dividend Growth Securities Inc.

Financial Highlights continued

				FOR THE YEAR ENDED FEBRUARY 28,
				2004*				2003				2002				2001				2000*
Class B Shares
Selected Per Share Data:
Net asset value, beginning of period				$	34.04			$	46.46			$	52.54			$	50.10			$	60.18
Income (loss) from investment operations:
Net investment income‡					0.43				0.37				0.34				0.47				0.64
Net realized and unrealized gain (loss)					11.64				(11.41	)			(3.50	)			8.35				(7.73	)
Total income (loss) from investment operations					12.07				(11.04	)			(3.16	)			8.82				(7.09	)
Less dividends and distributions from:
Net investment income					(0.45	)			(0.40	)			(0.32	)			(0.54	)			(0.68	)
Net realized gain					(3.58	)			(0.98	)			(2.60	)			(5.84	)			(2.31	)
Total dividends and distributions					(4.03	)			(1.38	)			(2.92	)			(6.38	)			(2.99	)
Net asset value, end of period				$	42.08			$	34.04			$	46.46			$	52.54			$	50.10
Total Return†					36.62	%			(24.27	)%			(6.06	)%			18.48	%			(12.49	)%
Ratios to Average Net Assets(1):
Expenses					1.28	% (2)			1.54	%			1.49	%			1.42	%			1.15	%
Net investment income					1.08	% (2)			0.92	%			0.70	%			0.88	%			1.04	%
Supplemental Data:
Net assets, end of period, in millions				$	7,040			$	6,020			$	9,865			$	11,819			$	12,869
Portfolio turnover rate					34	%			7	%			0	%			1	%			4	%

* Year ended February 29.

‡ The per share amounts were computed using an average number of shares outstanding during the period.

† Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period.

(1) Reflects overall Fund ratios for investment income and non-class specific expenses.

(2) If the Distributor had not rebated a portion of its fee to the Fund, the expense and net investment income ratios would have been 1.56% and 0.80%, respectively.

See Notes to Financial Statements

19

Morgan Stanley Dividend Growth Securities Inc.

Financial Highlights continued

				FOR THE YEAR ENDED FEBRUARY 28,
				2004*				2003				2002				2001				2000*
Class C Shares
Selected Per Share Data:
Net asset value, beginning of period				$	33.92			$	46.32			$	52.44			$	49.96			$	60.02
Income (loss) from investment operations:
Net investment income‡					0.31				0.37				0.35				0.50				0.47
Net realized and unrealized gain (loss)					11.60				(11.38	)			(3.49	)			8.32				(7.70	)
Total income (loss) from investment operations					11.91				(11.01	)			(3.14	)			8.82				(7.23	)
Less dividends and distributions from:
Net investment income					(0.36	)			(0.41	)			(0.38	)			(0.50	)			(0.52	)
Net realized gain					(3.58	)			(0.98	)			(2.60	)			(5.84	)			(2.31	)
Total dividends and distributions					(3.94	)			(1.39	)			(2.98	)			(6.34	)			(2.83	)
Net asset value, end of period				$	41.89			$	33.92			$	46.32			$	52.44			$	49.96
Total Return†					36.25	%			(24.26	)%			(6.05	)%			18.54	%			(12.73	)%
Ratios to Average Net Assets(1):
Expenses					1.56	%			1.54	%			1.48	%			1.37	%			1.43	%
Net investment income					0.80	%			0.92	%			0.71	%			0.93	%			0.76	%
Supplemental Data:
Net assets, end of period, in thousands				$	118,104			$	82,544			$	124,976			$	139,320			$	135,496
Portfolio turnover rate					34	%			7	%			0	%			1	%			4	%

* Year ended February 29.

‡ The per share amounts were computed using an average number of shares outstanding during the period.

† Does not reflect the deduction of sales charge. Calculated based on the net asset value as of the last business day of the period.

(1) Reflects overall Fund ratios for investment income and non-class specific expenses.

See Notes to Financial Statements

20

Morgan Stanley Dividend Growth Securities Inc.

Financial Highlights continued

				FOR THE YEAR ENDED FEBRUARY 28,
				2004*				2003				2002				2001				2000*
Class D Shares
Selected Per Share Data:
Net asset value, beginning of period				$	34.03			$	46.47			$	52.59			$	50.16			$	60.26
Income (loss) from investment operations:
Net investment income‡					0.70				0.77				0.83				0.97				1.09
Net realized and unrealized gain (loss)					11.63				(11.41	)			(3.53	)			8.35				(7.76	)
Total income (loss) from investment operations					12.33				(10.64	)			(2.70	)			9.32				(6.67	)
Less dividends and distributions from:
Net investment income					(0.74	)			(0.82	)			(0.82	)			(1.05	)			(1.12	)
Net realized gain					(3.58	)			(0.98	)			(2.60	)			(5.84	)			(2.31	)
Total dividends and distributions					(4.32	)			(1.80	)			(3.42	)			(6.89	)			(3.43	)
Net asset value, end of period				$	42.04			$	34.03			$	46.47			$	52.59			$	50.16
Total Return†					37.58	%			(23.50	)%			(5.10	)%			19.60	%			(11.85	)%
Ratios to Average Net Assets(1):
Expenses					0.56	%			0.54	%			0.49	%			0.48	%			0.43	%
Net investment income					1.80	%			1.92	%			1.70	%			1.82	%			1.76	%
Supplemental Data:
Net assets, end of period, in thousands				$	588,215			$	376,299			$	480,234			$	423,519			$	405,246
Portfolio turnover rate					34	%			7	%			0	%			1	%			4	%

* Year ended February 29.

‡ The per share amounts were computed using an average number of shares outstanding during the period.

† Calculated based on the net asset value as of the last business day of the period.

(1) Reflects overall Fund ratios for investment income and non-class specific expenses.

See Notes to Financial Statements

21

Morgan Stanley Dividend Growth Securities Inc.

Independent Auditor's Report

To the Shareholders and Board of Directors of
Morgan Stanley Dividend Growth Securities Inc.:

We have audited the accompanying statement of assets and liabilities of Morgan Stanley Dividend Growth Securities Inc. (the "Fund"), including the portfolio of investments, as of February 29, 2004, and the related statements of operations for the year then ended and changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights 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 and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of February 29, 2004, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. 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, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Morgan Stanley Dividend Growth Securities Inc. as of February 29, 2004, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP
New York, New York
April 15, 2004

2004 Federal Tax Notice (unaudited)

During the fiscal year ended February 29, 2004, the Fund paid to its shareholders $3.54 per share from long-term capital gains. For such period, 100% of the income dividends paid qualified for the dividends received deduction available to corporations.

Additionally, please note that 84.60% of the Fund's income dividends paid during the fiscal year ended February 29, 2004 qualified for the lower income tax rate available to individuals under the Jobs and Growth Tax Relief Reconciliation Act of 2003.

22

Morgan Stanley Dividend Growth Securities Inc.

Director and Officer Information

Independent Directors:

Name, Age and Address of Independent Director

Position(s) Held with Registrant

Term of Office and Length of Time Served*

Principal Occupation(s) During Past 5 Years**

Number of Portfolios in Fund Complex Overseen by Director***

Other Directorships Held by Director

Michael Bozic (63) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees 919 Third Avenue New York, NY

Director

Since April 1994

Private Investor; Director or Trustee of the Retail Funds (since April 1994) and the Institutional Funds (since July 2003); formerly Vice Chairman of Kmart Corporation (December 1998-October 2000), Chairman and Chief Executive Officer of Levitz Furniture Corporation (November 1995-November 1998) and President and Chief Executive Officer of Hills Department Stores (May 1991-July 1995); formerly variously Chairman, Chief Executive Officer, President and Chief Operating Officer (1987-1991) of the Sears Merchandise Group of Sears, Roebuck & Co.

208

Director of Weirton Steel Corporation.

Edwin J. Garn (71) c/o Summit Ventures LLC 1 Utah Center 201 S. Main Street Salt Lake City, UT

Director

Since January 1993

Director or Trustee of the Retail Funds (since January 1993) and the Institutional Funds (since July 2003); member of the Utah Regional Advisory Board of Pacific Corp.; formerly United States Senator (R-Utah) (1974-1992) and Chairman, Senate Banking Committee (1980-1986), Mayor of Salt Lake City, Utah (1971-1974), Astronaut, Space Shuttle Discovery (April 12-19, 1985), and Vice Chairman, Huntsman Corporation (chemical company).

208

Director of Franklin Covey (time management systems), BMW Bank of North America, Inc. (industrial loan corporation), United Space Alliance (joint venture between Lockheed Martin and the Boeing Company) and Nuskin Asia Pacific (multilevel marketing); member of the board of various civic and charitable organizations.

Wayne E. Hedien (70) c/o Kramer Levin Naftalis & Frankel LLP Counsel to the Independent Trustees 919 Third Avenue New York, NY

Director

Since September 1997

Retired; Director or Trustee of the Retail Funds; (Since September 1997) and the Institutional Funds (since July 2003); formerly associated with the Allstate Companies (1966-1994), most recently as Chairman of The Allstate Corporation (March 1993-December 1994) and Chairman and Chief Executive Officer of its wholly-owned subsidiary, Allstate Insurance Company (July 1989-December 1994).

208

Director of The PMI Group Inc. (private mortgage insurance); Trustee and Vice Chairman of The Field Museum of Natural History; director of various other business and charitable organizations.

23

Morgan Stanley Dividend Growth Securities Inc.

Director and Officer Information continued

Name, Age and Address of Independent Director

Position(s) Held with Registrant

Term of Office and Length of Time Served*

Principal Occupation(s) During Past 5 Years**

Number of Portfolios in Fund Complex Overseen by Director***

Other Directorships Held by Director

Dr. Manuel H. Johnson (55) c/o Johnson Smick International, Inc. 2099 Pennsylvania Avenue, N.W. Suite 950 Washington, D.C.

Director

Since July 1991

Senior Partner, Johnson Smick International, Inc., a consulting firm; Chairman of the Audit Committee and Director or Trustee of the Retail Funds (since July 1991) and the Institutional Funds (since July 2003); Co-Chairman and a founder of the Group of Seven Council (G7C), an international economic commission; formerly Vice Chairman of the Board of Governors of the Federal Reserve System and Assistant Secretary of the U.S. Treasury.

208

Director of NVR, Inc. (home construction); Chairman and Trustee of the Financial Accounting Foundation (oversight organization of the Financial Accounting Standards Board); Director of RBS Greenwich Capital Holdings (financial holding company).

Joseph J. Kearns (61) PMB754 23852 Pacific Coast Highway Malibu, CA

Director

Since July 2003

President, Kearns & Associates LLC (investment consulting); Deputy Chairman of the Audit Committee and Director or Trustee of the Retail Funds (since July 2003) and the Institutional Funds (since August 1994); previously Chairman of the Audit Committee of the Institutional Funds (October 2001-July 2003); formerly CFO of the J. Paul Getty Trust.

209

Director of Electro Rent Corporation (equipment leasing), The Ford Family Foundation, and the UCLA Foundation.

Michael E. Nugent (67) c/o Triumph Capital, L.P. 445 Park Avenue New York, NY

Director

Since July 1991

General Partner of Triumph Capital, L.P., a private investment partnership; Chairman of the Insurance Committee and Director or Trustee of the Retail Funds (since July 1991) and the Institutional Funds (since July 2001); formerly Vice President, Bankers Trust Company and BT Capital Corporation (1984-1988).

208

Director of various business organizations.

Fergus Reid (71) c/o Lumelite Plastics Corporation 85 Charles Colman Blvd. Pawling, NY

Director

Since July 2003

Chairman of Lumelite Plastics Corporation; Chairman of the Governance Committee and Director or Trustee of the Retail Funds (since July 2003) and the Institutional Funds (since June 1992).

209

Trustee and Director of certain investment companies in the JPMorgan Funds complex managed by J.P. Morgan Investment Management Inc.

24

Morgan Stanley Dividend Growth Securities Inc.

Director and Officer Information continued

Interested Directors:

Name, Age and Address of Interested Director

Position(s) Held with Registrant

Term of Office and Length of Time Served*

Principal Occupation(s) During Past 5 Years**

Number of Portfolios in Fund Complex Overseen by Director***

Other Directorships Held by Director

Charles A. Fiumefreddo (70) c/o Morgan Stanley Trust Harborside Financial Center, Plaza Two, Jersey City, NJ

Chairman of the Board and Director

Since July 1991

Chairman and Director or Trustee of the Retail Funds (since July 1991) and the Institutional Funds (since July 2003); formerly Chief Executive Officer of the Retail Funds (until September 2002).

208

None

James F. Higgins (56) c/o Morgan Stanley Trust Harborside Financial Center, Plaza Two, Jersey City, NJ

Director

Since June 2000

Director or Trustee of the Retail Funds (since June 2000) and the Institutional Funds (since July 2003); Senior Advisor of Morgan Stanley (since August 2000); Director of the Distributor and Dean Witter Realty Inc.; previously President and Chief Operating Officer of the Private Client Group of Morgan Stanley (May 1999-August 2000), and President and Chief Operating Officer of Individual Securities of Morgan Stanley (February 1997-May 1999).

208

Director of AXA Financial, Inc. and The Equitable Life Assurance Society of the United States (financial services).

Philip J. Purcell (60) 1585 Broadway New York, NY

Director

Since April 1994

Chairman of the Board of Directors and Chief Executive Officer of Morgan Stanley and Morgan Stanley DW Inc.; Director or Trustee of the Retail Funds (since April 1994) and the Institutional Funds (since July 2003); Director of the Distributor; Chairman of the Board of Directors and Chief Executive Officer of Novus Credit Services Inc.; Director and/or officer of various Morgan Stanley subsidiaries.

208

Director of American Airlines, Inc. and its parent company, AMR Corporation.

    * This is the earliest date the Director began serving the funds advised by Morgan Stanley Investment Advisors Inc. (the "Investment Manager") (the "Retail Funds").

  ** The dates referenced below indicating commencement of services as Director/Trustee for the Retail Funds and the funds advised by Morgan Stanley Investment Management Inc. and Morgan Stanley AIP GP LP (the "Institutional Funds") reflect the earliest date the Director/Trustee began serving the Retail or Institutional Funds as applicable.

*** The Fund Complex includes all open-end and closed-end funds (including all of their portfolios) advised by the Investment Manager and any funds that have an investment advisor that is an affiliated person of the Investment Manager (including but not limited to Morgan Stanley Investment Management Inc.).

25

Morgan Stanley Dividend Growth Securities Inc.

Director and Officer Information continued

Officers:

Name, Age and Address of Executive Officer

Position(s) Held with Registrant

Term of Office and Length of Time Served*

Principal Occupation(s) During Past 5 Years**

Mitchell M. Merin (50) 1221 Avenue of the Americas New York, NY

President

Since May 1999

President and Chief Operating Officer of Morgan Stanley Investment Management Inc.; President, Director and Chief Executive Officer of the Investment Manager and Morgan Stanley Services; Chairman and Director of the Distributor; Chairman and Director of the Transfer Agent; Director of various Morgan Stanley subsidiaries; President of the Institutional Funds (since July 2003) and President of the Retail Funds (since May 1999); Trustee (since July 2003) and President (since December 2002) of the Van Kampen Closed-End Funds; Trustee (since May 1999) and President (since October 2002) of the Van Kampen Open-End Funds.

Ronald E. Robison (65) 1221 Avenue of the Americas New York, NY

Executive Vice President and Principal Executive Officer

Since April 2003

Chief Global Operations Officer and Managing Director of Morgan Stanley Investment Management Inc.; Managing Director of Morgan Stanley & Co. Incorporated; Managing Director of Morgan Stanley; Managing Director, Chief Administrative Officer and Director of the Investment Manager and Morgan Stanley Services; Chief Executive Officer and Director of the Transfer Agent; Managing Director and Director of the Distributor; Executive Vice President and Principal Executive Officer of the Institutional Funds (since July 2003); previously President and Director of the Institutional Funds (March 2001-July 2003).

Barry Fink (49) 1221 Avenue of the Americas New York, NY

Vice President and General Counsel

Since February 1997

General Counsel (since May 2000) and Managing Director (since December 2000) of Morgan Stanley Investment Management; Managing Director (since December 2000), Secretary (since February 1997) and Director (since July 1998) of the Investment Manager and Morgan Stanley Services; Assistant Secretary of Morgan Stanley DW; Vice President of the Institutional Funds (since July 2003); Managing Director, Secretary and Director of the Distributor; previously Secretary of the Retail Funds (February 1997-July 2003); previously Vice President and Assistant General Counsel of the Investment Manager and Morgan Stanley Services (February 1997-December 2001).

Joseph J. McAlinden (61) 1221 Avenue of the Americas New York, NY

Vice President

Since July 1995

Managing Director and Chief Investment Officer of the Investment Manager and Morgan Stanley Investment Management Inc.; Director of the Transfer Agent, Chief Investment Officer of the Van Kampen Funds; Vice President of the Institutional Funds (since July 2003) and the Retail Funds (since July 1995).

Stefanie V. Chang (37) 1221 Avenue of the Americas New York, NY

Vice President

Since July 2003

Executive Director of Morgan Stanley & Co. Incorporated and Morgan Stanley Investment Management Inc. and Vice President of the Institutional Funds (since December 1997) and the Retail Funds (since July 2003); formerly practiced law with the New York law firm of Rogers & Wells (now Clifford Chance US LLP).

26

Morgan Stanley Dividend Growth Securities Inc.

Director and Officer Information continued

Name, Age and Address of Executive Officer

Position(s) Held with Registrant

Term of Office and Length of Time Served*

Principal Occupation(s) During Past 5 Years**

Francis J. Smith (38) c/o Morgan Stanley Trust Harborside Financial Center, Plaza Two, Jersey City, NJ

Treasurer and Chief Financial Officer

Treasurer since July 2003 and Chief Financial Officer since September 2002

Executive Director of the Investment Manager and Morgan Stanley Services (since December 2001); previously Vice President of the Retail Funds (September 2002-July 2003); previously Vice President of the Investment Manager and Morgan Stanley Services (August 2000-November 2001) and Senior Manager at PricewaterhouseCoopers LLP (January 1998-August 2000).

Thomas F. Caloia (57) c/o Morgan Stanley Trust Harborside Financial Center, Plaza Two, Jersey City, NJ

Vice President

Since July 2003

Executive Director (since December 2002) and Assistant Treasurer of the Investment Manager, the Distributor and Morgan Stanley Services; previously Treasurer of the Retail Funds (April 1989-July 2003); formerly First Vice President of the Investment Manager, the Distributor and Morgan Stanley Services.

Mary E. Mullin (36) 1221 Avenue of the Americas New York, NY

Secretary

Since July 2003

Executive Director of Morgan Stanley & Co. Incorporated and Morgan Stanley Investment Management Inc.; Secretary of the Institutional Funds (since June 1999) and the Retail Funds (since July 2003); formerly practiced law with the New York law firms of McDermott, Will & Emery and Skadden, Arps, Slate, Meagher & Flom LLP.

    * This is the earliest date the Officer began serving the Retail Funds. Each Officer serves an indefinite term, until his or her successor is elected.

  ** The dates referenced below indicating commencement of service as an Officer for the Retail and Institutional Funds reflect the earliest date the Officer began serving the Retail or Institutional Funds as applicable.

27

Directors Michael Bozic Charles A. Fiumefreddo Edwin J. Garn Wayne E. Hedien James F. Higgins Dr. Manuel H. Johnson Joseph J. Kearns Michael E. Nugent Philip J. Purcell Fergus Reid Officers Charles A. Fiumefreddo Chairman of the Board Mitchell M. Merin President Ronald E. Robison Executive Vice President and Principal Executive Officer Barry Fink Vice President and General Counsel Joseph J. McAlinden Vice President Stefanie V. Chang Vice President Francis J. Smith Treasurer and Chief Financial Officer Thomas F. Caloia Vice President Mary E. Mullin Secretary Transfer Agent Morgan Stanley Trust Harborside Financial Center, Plaza Two Jersey City, New Jersey 07311 Independent Auditors Deloitte & Touche LLP Two World Financial Center New York, New York 10281 Investment Manager Morgan Stanley Investment Advisors Inc. 1221 Avenue of the Americas New York, New York 10020 This report is submitted for the general information of the shareholders of the Fund. For more detailed information about the Fund, its fees and expenses and other pertinent information, please read its Prospectus. The Fund's Statement of Additional Information contains additional information about the Fund, including its directors. It is available, without charge, by calling (800) 869-NEWS. This report is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus. Read the Prospectus carefully before investing. Investments and services offered through Morgan Stanley DW Inc., member SIPC. Morgan Stanley Distributors Inc., member NASD. © 2004 Morgan Stanley 137910RPT-RA04-00009P-A02/04		MORGAN STANLEY FUNDS
		Morgan Stanley Dividend Growth Securities Annual Report February 29, 2004

Item 2. Code of Ethics.

(a) The Fund has adopted a code of ethics (the "Code of Ethics") that applies to
its principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the Fund or a third
party.

(b)  No information need be disclosed pursuant to this paragraph.

(c)  Not applicable.

(d)  Not applicable.

(e)  Not applicable.

(f)

     (1)  The Fund's Code of Ethics is attached hereto as Exhibit A.

     (2)  Not applicable.

     (3)  Not applicable.


Item 3.  Audit Committee Financial Expert.

The Fund's Board of Trustees has determined that it has two "audit committee
financial experts" serving on its audit committee, each of whom are
"independent" Trustees: Dr. Manuel H. Johnson and Joseph J. Kearns. Under
applicable securities laws, a person who is determined to be an audit committee
financial expert will not be deemed an "expert" for any purpose, including
without limitation for the purposes of Section 11 of the Securities Act of 1933,
as a result of being designated or identified as an audit committee financial
expert. The designation or identification of a person as an audit committee
financial expert does not impose on such person any duties, obligations, or
liabilities that are greater than the duties, obligations, and liabilities
imposed on such person as a member of the audit committee and Board of Trustees
in the absence of such designation or identification.





Item 4.  Principal Accountant Fees and Services.

(a)(b)(c)(d) and (g).  Based on fees billed for the periods shown:



           2004
                                                            Registrant            Covered Entities(1)

              Audit Fees...........................         $ 30,050              N/A

              Non-Audit Fees
                        Audit-Related Fees.........         $     684      (2)    $ 3,364,576        (2)
                        Tax Fees...................         $   5,193      (3)    $   652,431        (4)
                        All Other Fees.............         $     -               $     -
              Total Non-Audit Fees.................         $   5,877             $ 4,017,007

              Total................................         $  35,927             $ 4,017,007


           2003
                                                            Registrant            Covered Entities(1)
              Audit Fees...........................         $  30,733             N/A

              Non-Audit Fees
                        Audit-Related Fees.........         $     657      (2)    $ 2,620,902        (2)
                        Tax Fees...................         $   4,800      (3)    $   302,377        (4)
                        All Other Fees.............         $     -               $   423,095        (5)
              Total Non-Audit Fees.................         $   5,457             $ 3,346,374

              Total................................         $  36,190             $ 3,346,374


              N/A- Not applicable, as not required by Item 4.

              (1) Covered Entities include the Adviser (excluding sub-advisors)
                  and any entity controlling, controlled by or under common
                  control with the Adviser that provides ongoing services to the
                  Registrant.
              (2) Audit-Related Fees represent assurance and related services
                  provided that are reasonably related to the performance of the
                  audit of the financial statements of the Covered Entities' and
                  funds advised by the Adviser or its affiliates, specifically
                  data verification and agreed-upon procedures related to asset
                  securitizations and agreed-upon procedures engagements.
              (3) Tax Fees represent tax compliance, tax planning and tax advice
                  services provided in connection with the preparation and
                  review of the Registrant's tax returns.
              (4) Tax Fees represent tax compliance, tax planning and tax advice
                  services provided in connection with the review of Covered
                  Entities' tax returns.
              (5) All other fees represent project management for future
                  business applications and improving business and operational
                  processes.


                                       2



(e)(1) The audit committee's pre-approval policies and procedures are as follows:

                                 AUDIT COMMITTEE
                          AUDIT AND NON-AUDIT SERVICES
                       PRE-APPROVAL POLICY AND PROCEDURES
                                     OF THE
                  MORGAN STANLEY RETAIL AND INSTITUTIONAL FUNDS

                           AS ADOPTED JULY 31, 2003(1)


1.   STATEMENT OF PRINCIPLES

     The Audit Committee of the Board is required to review and, in its sole
discretion, pre-approve all Covered Services to be provided by the Independent
Auditors to the Fund and Covered Entities in order to assure that services
performed by the Independent Auditors do not impair the auditor's independence
from the Fund.

     The SEC has issued rules specifying the types of services that an
independent auditor may not provide to its audit client, as well as the audit
committee's administration of the engagement of the independent auditor. The
SEC's rules establish two different approaches to pre-approving services, which
the SEC considers to be equally valid. Proposed services either: may be
pre-approved without consideration of specific case-by-case services by the
Audit Committee ("general pre-approval"); or require the specific pre-approval
of the Audit Committee or its delegate ("specific pre-approval"). The Audit
Committee believes that the combination of these two approaches in this Policy
will result in an effective and efficient procedure to pre-approve services
performed by the Independent Auditors. As set forth in this Policy, unless a
type of service has received general pre-approval, it will require specific
pre-approval by the Audit Committee (or by any member of the Audit Committee to
which pre-approval authority has been delegated) if it is to be provided by the
Independent Auditors. Any proposed services exceeding pre-approved cost levels
or budgeted amounts will also require specific pre-approval by the Audit
Committee.

     The appendices to this Policy describe the Audit, Audit-related, Tax and
All Other services that have the general pre-approval of the Audit Committee.
The term of any general pre-approval is 12 months from the date of pre-approval,
unless the Audit Committee considers and provides a different period and states
otherwise. The Audit Committee will annually review and pre-approve the services
that may be provided by the Independent Auditors without obtaining specific
pre-approval from the Audit Committee. The Audit Committee will add to or
subtract from the list of general pre-approved services from time to time, based
on subsequent determinations.

- -------------------------
1    This Audit Committee Audit and Non-Audit Services Pre-Approval Policy and
     Procedures (the "Policy"), adopted as of the date above, supercedes and
     replaces all prior versions that may have been adopted from time to time.

                                       3


     The purpose of this Policy is to set forth the policy and procedures by
which the Audit Committee intends to fulfill its responsibilities. It does not
delegate the Audit Committee's responsibilities to pre-approve services
performed by the Independent Auditors to management.

     The Fund's Independent Auditors have reviewed this Policy and believes that
implementation of the Policy will not adversely affect the Independent Auditors'
independence.


2.   DELEGATION

     As provided in the Act and the SEC's rules, the Audit Committee may
delegate either type of pre-approval authority to one or more of its members.
The member to whom such authority is delegated must report, for informational
purposes only, any pre-approval decisions to the Audit Committee at its next
scheduled meeting.


3.   AUDIT SERVICES

     The annual Audit services engagement terms and fees are subject to the
specific pre-approval of the Audit Committee. Audit services include the annual
financial statement audit and other procedures required to be performed by the
Independent Auditors to be able to form an opinion on the Fund's financial
statements. These other procedures include information systems and procedural
reviews and testing performed in order to understand and place reliance on the
systems of internal control, and consultations relating to the audit. The Audit
Committee will approve, if necessary, any changes in terms, conditions and fees
resulting from changes in audit scope, Fund structure or other items.

     In addition to the annual Audit services engagement approved by the Audit
Committee, the Audit Committee may grant general pre-approval to other Audit
services, which are those services that only the Independent Auditors reasonably
can provide. Other Audit services may include statutory audits and services
associated with SEC registration statements (on Forms N-1A, N-2, N-3, N-4,
etc.), periodic reports and other documents filed with the SEC or other
documents issued in connection with securities offerings.

     The Audit Committee has pre-approved the Audit services in Appendix B.1.
All other Audit services not listed in Appendix B.1 must be specifically
pre-approved by the Audit Committee (or by any member of the Audit Committee to
which pre-approval has been delegated).


4.   Audit-related Services

                                       4


     Audit-related services are assurance and related services that are
reasonably related to the performance of the audit or review of the Fund's
financial statements and, to the extent they are Covered Services, the Covered
Entities or that are traditionally performed by the Independent Auditors.
Because the Audit Committee believes that the provision of Audit-related
services does not impair the independence of the auditor and is consistent with
the SEC's rules on auditor independence, the Audit Committee may grant general
pre-approval to Audit-related services. Audit-related services include, among
others, accounting consultations related to accounting, financial reporting or
disclosure matters not classified as "Audit services"; assistance with
understanding and implementing new accounting and financial reporting guidance
from rulemaking authorities; agreed-upon or expanded audit procedures related to
accounting and/or billing records required to respond to or comply with
financial, accounting or regulatory reporting matters; and assistance with
internal control reporting requirements under Forms N-SAR and/or N-CSR.

     The Audit Committee has pre-approved the Audit-related services in Appendix
B.2. All other Audit-related services not listed in Appendix B.2 must be
specifically pre-approved by the Audit Committee (or by any member of the Audit
Committee to which pre-approval has been delegated).


5.   Tax Services


     The Audit Committee believes that the Independent Auditors can provide Tax
services to the Fund and, to the extent they are Covered Services, the Covered
Entities, such as tax compliance, tax planning and tax advice without impairing
the auditor's independence, and the SEC has stated that the Independent Auditors
may provide such services.

     Pursuant to the preceding paragraph, the Audit Committee has pre-approved
the Tax Services in Appendix B.3. All Tax services in Appendix B.3 must be
specifically pre-approved by the Audit Committee (or by any member of the Audit
Committee to which pre-approval has been delegated).


6.   All Other Services


     The Audit Committee believes, based on the SEC's rules prohibiting the
Independent Auditors from providing specific non-audit services, that other
types of non-audit services are permitted. Accordingly, the Audit Committee
believes it may grant general pre-approval to those permissible non-audit
services classified as All Other services that it believes are routine and
recurring services, would not impair the independence of the auditor and are
consistent with the SEC's rules on auditor independence.

                                       5


     The Audit Committee has pre-approved the All Other services in Appendix
B.4. Permissible All Other services not listed in Appendix B.4 must be
specifically pre-approved by the Audit Committee (or by any member of the Audit
Committee to which pre-approval has been delegated).


7.   Pre-Approval Fee Levels or Budgeted Amounts

     Pre-approval fee levels or budgeted amounts for all services to be provided
by the Independent Auditors will be established annually by the Audit Committee.
Any proposed services exceeding these levels or amounts will require specific
pre-approval by the Audit Committee. The Audit Committee is mindful of the
overall relationship of fees for audit and non-audit services in determining
whether to pre-approve any such services.


8.   Procedures

     All requests or applications for services to be provided by the Independent
Auditors that do not require specific approval by the Audit Committee will be
submitted to the Fund's Chief Financial Officer and must include a detailed
description of the services to be rendered. The Fund's Chief Financial Officer
will determine whether such services are included within the list of services
that have received the general pre-approval of the Audit Committee. The Audit
Committee will be informed on a timely basis of any such services rendered by
the Independent Auditors. Requests or applications to provide services that
require specific approval by the Audit Committee will be submitted to the Audit
Committee by both the Independent Auditors and the Fund's Chief Financial
Officer, and must include a joint statement as to whether, in their view, the
request or application is consistent with the SEC's rules on auditor
independence.

     The Audit Committee has designated the Fund's Chief Financial Officer to
monitor the performance of all services provided by the Independent Auditors and
to determine whether such services are in compliance with this Policy. The
Fund's Chief Financial Officer will report to the Audit Committee on a periodic
basis on the results of its monitoring. Both the Fund's Chief Financial Officer
and management will immediately report to the chairman of the Audit Committee
any breach of this Policy that comes to the attention of the Fund's Chief
Financial Officer or any member of management.


9.   Additional Requirements

     The Audit Committee has determined to take additional measures on an annual
basis to meet its responsibility to oversee the work of the Independent Auditors
and to assure the auditor's independence from the Fund, such as reviewing a
formal written statement from the Independent Auditors delineating all
relationships between the Independent Auditors and the Fund, consistent with
Independence Standards Board No.


                                       6


1, and discussing with the Independent Auditors its methods and procedures for
ensuring independence.


10.  Covered Entities

     Covered Entities include the Fund's investment adviser(s) and any entity
controlling, controlled by or under common control with the Fund's investment
adviser(s) that provides ongoing services to the Fund(s). Beginning with
non-audit service contracts entered into on or after May 6, 2003, the Fund's
audit committee must pre-approve non-audit services provided not only to the
Fund but also to the Covered Entities if the engagements relate directly to the
operations and financial reporting of the Fund. This list of Covered Entities
would include:

         Morgan Stanley Retail Funds
         ---------------------------
         Morgan Stanley Investment Advisors Inc.
         Morgan Stanley & Co. Incorporated
         Morgan Stanley DW Inc.
         Morgan Stanley Investment Management
         Morgan Stanley Investments LP
         Van Kampen Asset Management Inc.
         Morgan Stanley Services Company, Inc.
         Morgan Stanley Distributors Inc.
         Morgan Stanley Trust FSB

         Morgan Stanley Institutional Funds
         ----------------------------------
         Morgan Stanley Investment Management Inc.
         Morgan Stanley Investments LP
         Morgan Stanley & Co. Incorporated
         Morgan Stanley Distribution, Inc.
         Morgan Stanley AIP GP LP
         Morgan Stanley Alternative Investment Partners LP


(e)(2) Beginning with non-audit service contracts entered into on or after May
6, 2003, the audit committee also is required to pre-approve services to Covered
Entities to the extent that the services are determined to have a direct impact
on the operations or financial reporting of the Registrant. 100% of such
services were pre-approved by the audit committee pursuant to the Audit
Committee's pre-approval policies and procedures (attached hereto).

(f)  Not applicable.

(g)  See table above.

(h)  The audit committee of the Board of Trustees has considered whether the
provision of services other than audit services performed by the auditors to the
Registrant and

                                       7


Covered Entities is compatible with maintaining the auditors' independence in
performing audit services.


Item 5. Audit Committee of Listed Registrants.

Applicable only for reports covering periods ending on or after the earlier of
(i) the first annual shareholder meeting after January 15, 2004 or (ii) October
31, 2004.


Item 6. [Reserved.]


Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.

Applicable only to annual reports filed by closed-end funds.


Item 8. [Reserved.]


Item 9 - Controls and Procedures

(a) The Fund's principal executive officer and principal financial officer have
concluded that the Fund's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Fund in this Form N-CSR
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.

    There were no significant changes or corrective actions with regard to
significant deficiencies or material weaknesses in the Fund's internal controls
or in other factors that could significantly affect the Fund's internal controls
subsequent to the date of their evaluation.


(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.


Item 10 Exhibits


                                       8


(a) The Code of Ethics for Principal Executive and Senior Financial Officers is
attached hereto.

(b) A separate certification for each principal executive officer and principal
financial officer of the registrant are attached hereto as part of EX-99.CERT.


                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

Morgan Stanley Dividend Growth Securities Inc.

/s/ Ronald E. Robison
Ronald E. Robison
Principal Executive Officer
April 20, 2004

     Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.

/s/ Ronald E. Robison
Ronald E. Robison
Principal Executive Officer
April 20, 2004

/s/ Francis Smith
Francis Smith
Principal Financial Officer
April 20, 2004


                                       9



                                                                    Exhibit 10 A

           CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL
                                    OFFICERS
                              ADOPTED JULY 31, 2003


I.   This Code of Ethics (the "Code") for the investment companies within the
     Morgan Stanley complex identified in Exhibit A (collectively, "Funds" and
     each, a "Fund") applies to each Fund's Principal Executive Officer,
     President, Principal Financial Officer and Treasurer (or persons performing
     similar functions) ("Covered Officers" each of whom are set forth in
     Exhibit B) for the purpose of promoting:

     o    honest and ethical conduct, including the ethical handling of actual
          or apparent conflicts of interest between personal and professional
          relationships.

     o    full, fair, accurate, timely and understandable disclosure in reports
          and documents that a company files with, or submits to, the Securities
          and Exchange Commission ("SEC") and in other public communications
          made by the Fund;

     o    compliance with applicable laws and governmental rules and
          regulations;

     o    prompt internal reporting of violations of the Code to an appropriate
          person or persons identified in the Code; and

     o    accountability for adherence to the Code.

          Each Covered Officer should adhere to a high standard of business
ethics and should be sensitive to situations that may give rise to actual as
well as apparent conflicts of interest. Any question about the application of
the Code should be referred to the General Counsel or his/her designee (who is
set forth in Exhibit C).

II.  Covered Officers Should Handle Ethically Actual and Apparent Conflicts of
     Interest


                                       10


     Overview. A "conflict of interest" occurs when a Covered Officer's private
interest interferes, or appears to interfere, with the interests of, or his
service to, the Fund. For example, a conflict of interest would arise if a
Covered Officer, or a member of his family, receives improper personal benefits
as a result of his position with the Fund.

     Certain conflicts of interest arise out of the relationships between
Covered Officers and the Fund and already are subject to conflict of interest
provisions in the Investment Company Act of 1940 ("Investment Company Act") and
the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example,
Covered Officers may not individually engage in certain transactions (such as
the purchase or sale of securities or other property) with the Fund because of
their status as "affiliated persons" (as defined in the Investment Company Act)
of the Fund. The Fund's and its investment adviser's compliance programs and
procedures are designed to prevent, or identify and correct, violations of these
provisions. This Code does not, and is not intended to, repeat or replace these
programs and procedures, and such conflicts fall outside the parameters of this
Code, unless or until the General Counsel determines that any violation of such
programs and procedures is also a violation of this Code.

     Although typically not presenting an opportunity for improper personal
benefit, conflicts may arise from, or as a result of, the contractual
relationship between the Fund and its investment adviser of which the Covered
Officers are also officers or employees. As a result, this Code recognizes that
the Covered Officers will, in the normal course of their duties (whether
formally for the Fund or for the investment adviser, or for both), be involved
in establishing policies and implementing decisions that will have different
effects on the Fund and its investment adviser. The participation of the Covered
Officers in such activities is inherent in the contractual relationship between
the Fund and the investment adviser and is consistent with the performance by
the Covered Officers of their duties as officers of the Fund. Thus, if performed
in conformity with the provisions of the Investment Company Act and the
Investment Advisers Act, such activities will be deemed to have been handled
ethically. In addition, it is recognized by the Funds' Boards of
Directors/Trustees ("Boards") that the Covered Officers may also be officers or
employees of one or more other investment companies covered by this or other
codes.

     Other conflicts of interest are covered by the Code, even if such conflicts
of interest are not subject to provisions in the Investment Company Act and the
Investment Advisers Act. The following list provides examples of conflicts of
interest under the Code, but Covered Officers should keep in mind that these
examples are not exhaustive. The overarching principle is that the personal
interest of a Covered Officer should not be placed improperly before the
interest of the Fund.

     Each Covered Officer must not:

     o    use his personal influence or personal relationships improperly to
          influence investment decisions or financial reporting by the Fund
          whereby the Covered Officer would benefit personally (directly or
          indirectly) to the detriment of the Fund;

                                       11


     o    cause the Fund to take action, or fail to take action, for the
          individual personal benefit of the Covered Officer rather than the
          benefit of the Fund; or

     o    use material non-public knowledge of portfolio transactions made or
          contemplated for, or actions proposed to be taken by, the Fund to
          trade personally or cause others to trade personally in contemplation
          of the market effect of such transactions.

     Each Covered Officer must, at the time of signing this Code, report to the
General Counsel all affiliations or significant business relationships outside
the Morgan Stanley complex and must update the report annually.

     Conflict of interest situations should always be approved by the General
Counsel and communicated to the relevant Fund or Fund's Board. Any activity or
relationship that would present such a conflict for a Covered Officer would
likely also present a conflict for the Covered Officer if an immediate member of
the Covered Officer's family living in the same household engages in such an
activity or has such a relationship. Examples of these include:

     o    service or significant business relationships as a director on the
          board of any public or private company;

     o    accepting directly or indirectly, anything of value, including gifts
          and gratuities in excess of $100 per year from any person or entity
          with which the Fund has current or prospective business dealings, not
          including occasional meals or tickets for theatre or sporting events
          or other similar entertainment; provided it is business-related,
          reasonable in cost, appropriate as to time and place, and not so
          frequent as to raise any question of impropriety;

     o    any ownership interest in, or any consulting or employment
          relationship with, any of the Fund's service providers, other than its
          investment adviser, principal underwriter, or any affiliated person
          thereof; and

     o    a direct or indirect financial interest in commissions, transaction
          charges or spreads paid by the Fund for effecting portfolio
          transactions or for selling or redeeming shares other than an interest
          arising from the Covered Officer's employment, such as compensation or
          equity ownership.

III. Disclosure and Compliance

     o    Each Covered Officer should familiarize himself/herself with the
          disclosure and compliance requirements generally applicable to the
          Funds;

     o    each Covered Officer must not knowingly misrepresent, or cause others
          to misrepresent, facts about the Fund to others, whether within or
          outside the


                                       12


          Fund, including to the Fund's Directors/Trustees and auditors, or to
          governmental regulators and self-regulatory organizations;

     o    each Covered Officer should, to the extent appropriate within his area
          of responsibility, consult with other officers and employees of the
          Funds and their investment advisers with the goal of promoting full,
          fair, accurate, timely and understandable disclosure in the reports
          and documents the Funds file with, or submit to, the SEC and in other
          public communications made by the Funds; and

     o    it is the responsibility of each Covered Officer to promote compliance
          with the standards and restrictions imposed by applicable laws, rules
          and regulations.

IV.  Reporting and Accountability

     Each Covered Officer must:

     o    upon adoption of the Code (thereafter as applicable, upon becoming a
          Covered Officer), affirm in writing to the Boards that he has
          received, read and understands the Code;

     o    annually thereafter affirm to the Boards that he has complied with the
          requirements of the Code;

     o    not retaliate against any other Covered Officer, other officer or any
          employee of the Funds or their affiliated persons for reports of
          potential violations that are made in good faith; and

     o    notify the General Counsel promptly if he/she knows or suspects of any
          violation of this Code. Failure to do so is itself a violation of this
          Code.

     The General Counsel is responsible for applying this Code to specific
situations in which questions are presented under it and has the authority to
interpret this Code in any particular situation. However, any waivers(2) sought by
a Covered Officer must be considered by the Board of the relevant Fund or Funds.

     The Funds will follow these procedures in investigating and enforcing this
Code:

     o    the General Counsel will take all appropriate action to investigate
          any potential violations reported to him;


- ------------------
2    Item 2 of Form N-CSR defines "waiver" as "the approval by the registrant of
     a material departure from a provision of the code of ethics."


                                       13


     o    if, after such investigation, the General Counsel believes that no
          violation has occurred, the General Counsel is not required to take
          any further action;

     o    any matter that the General Counsel believes is a violation will be
          reported to the relevant Fund's Audit Committee;

     o    if the directors/trustees/managing general partners who are not
          "interested persons" as defined by the Investment Company Act (the
          "Independent Directors/Trustees/Managing General Partners") of the
          relevant Fund concur that a violation has occurred, they will consider
          appropriate action, which may include review of, and appropriate
          modifications to, applicable policies and procedures; notification to
          appropriate personnel of the investment adviser or its board; or a
          recommendation to dismiss the Covered Officer or other appropriate
          disciplinary actions;

     o    the Independent Directors/Trustees/Managing General Partners of the
          relevant Fund will be responsible for granting waivers of this Code,
          as appropriate; and

     o    any changes to or waivers of this Code will, to the extent required,
          be disclosed as provided by SEC rules.

V.   Other Policies and Procedures

     This Code shall be the sole code of ethics adopted by the Funds for
purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and
forms applicable to registered investment companies thereunder. Insofar as other
policies or procedures of the Funds, the Funds' investment advisers, principal
underwriters, or other service providers govern or purport to govern the
behavior or activities of the Covered Officers who are subject to this Code,
they are superseded by this Code to the extent that they overlap or conflict
with the provisions of this Code unless any provision of this Code conflicts
with any applicable federal or state law, in which case the requirements of such
law will govern. The Funds' and their investment advisers' and principal
underwriters' codes of ethics under Rule 17j-1 under the Investment Company Act
and Morgan Stanley's Code of Ethics are separate requirements applying to the
Covered Officers and others, and are not part of this Code.

VI.  Amendments

     Any amendments to this Code, other than amendments to Exhibits A, B

or C, must be approved or ratified by a majority vote of the Board of each Fund,
including a majority of Independent Directors/Trustees/Managing General
Partners.

VII. Confidentiality

                                       14


     All reports and records prepared or maintained pursuant to this Code will
be considered confidential and shall be maintained and protected accordingly.
Except as otherwise required by law or this Code, such matters shall not be
disclosed to anyone other than the Independent Directors/Trustees/Managing
General Partners of the relevant Fund or Funds and their counsel, the relevant
Fund or Funds and their counsel and the relevant investment adviser and its
counsel.












                                       15





VIII. Internal Use

     The Code is intended solely for the internal use by the Funds and does not
constitute an admission, by or on behalf of any Fund, as to any fact,
circumstance, or legal conclusion



I have read and understand the terms of the above Code. I recognize the
responsibilities and obligations incurred by me as a result of my being subject
to the Code. I hereby agree to abide by the above Code.


__________________________

Date:_____________________
















                                       16





                                    EXHIBIT B

                               Institutional Funds
                                Covered Officers
                                ----------------

                          Mitchell M. Merin - President
  Ronald E. Robison - Executive Vice President and Principal Executive Officer
            James W. Garrett - Chief Financial Officer and Treasurer

                                  Retail Funds
                                Covered Officers
                                ----------------

                          Mitchell M. Merin - President
  Ronald E. Robison - Executive Vice President and Principal Executive Officer
               Frank Smith - Chief Financial Officer and Treasurer








                                       17






                                    EXHIBIT C
                                    ---------

                                 General Counsel
                                 ---------------

                                   Barry Fink























                                       18




                                                                   EXHIBIT 10 B1

                  CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

                                 CERTIFICATIONS
                                 --------------

I, Ronald E. Robison, certify that:

1.   I have reviewed this report on Form N-CSR of Morgan Stanley Dividend Growth
     Securities Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations, changes in net
     assets, and cash flows (if the financial statements are required to include
     a statement of cash flows) of the registrant as of, and for, the periods
     presented in this report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Rule 30a-3(c) under the Investment Company Act of 1940) for the
     registrant and have:

a)   designed such disclosure controls and procedures, or caused such disclosure
     controls and procedures to be designed under our supervision, to ensure
     that material information relating to the registrant, including its
     consolidated subsidiaries, is made known to us by others within those
     entities, particularly during the period in which this report is being
     prepared;

[b)  Omitted.]

c)   evaluated the effectiveness of the registrant's disclosure controls and
     procedures and presented in this report our conclusions about the
     effectiveness of the disclosure controls and procedures, as of a date
     within 90 days prior to the filing date of this report based on such
     evaluation; and

d)   disclosed in this report any change in the registrant's internal control
     over financial reporting that occurred during the registrant's most recent
     fiscal half-year (the registrant's second fiscal half-year in the case of
     an annual report) that has materially affected, or is reasonably likely to
     materially affect, the registrant's internal control over financial
     reporting; and

5.   The registrant's other certifying officer(s) and I have disclosed to the
     registrant's auditors and the audit committee of the registrant's board of
     directors (or persons performing the equivalent functions):

a)   all significant deficiencies and material weaknesses in the design or
     operation of internal control over financial reporting which are reasonably
     likely to adversely affect the registrant's ability to record, process,
     summarize, and report financial information; and

                                       19


b)   any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal controls
     over financial reporting.

Date:  April 20, 2004

                                                    /s/ Ronald E. Robison
                                                    Ronald E. Robison
                                                    Principal Executive Officer
























                                       20



                                                                   EXHIBIT 10 B2

                  CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

                                 CERTIFICATIONS

I, Francis Smith, certify that:

6.   I have reviewed this report on Form N-CSR of Morgan Stanley Dividend Growth
     Securities Inc.;

7.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

8.   Based on my knowledge, the financial statements and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations, changes in net
     assets, and cash flows (if the financial statements are required to include
     a statement of cash flows) of the registrant as of, and for, the periods
     presented in this report;

9.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Rule 30a-3(c) under the Investment Company Act of 1940) for the
     registrant and have:

b)   designed such disclosure controls and procedures, or caused such disclosure
     controls and procedures to be designed under our supervision, to ensure
     that material information relating to the registrant, including its
     consolidated subsidiaries, is made known to us by others within those
     entities, particularly during the period in which this report is being
     prepared;

[b)  Omitted.]

e)   evaluated the effectiveness of the registrant's disclosure controls and
     procedures and presented in this report our conclusions about the
     effectiveness of the disclosure controls and procedures, as of a date
     within 90 days prior to the filing date of this report based on such
     evaluation; and

f)   disclosed in this report any change in the registrant's internal control
     over financial reporting that occurred during the registrant's most recent
     fiscal half-year (the registrant's second fiscal half-year in the case of
     an annual report) that has materially affected, or is reasonably likely to
     materially affect, the registrant's internal control over financial
     reporting; and

10.  The registrant's other certifying officer(s) and I have disclosed to the
     registrant's auditors and the audit committee of the registrant's board of
     directors (or persons performing the equivalent functions):

c)   all significant deficiencies and material weaknesses in the design or
     operation of internal control over financial reporting which are reasonably
     likely to adversely affect the registrant's ability to record, process,
     summarize, and report financial information; and

                                       21


d)   any fraud, whether or not material, that involves management or other
     employees who have a significant role in the registrant's internal controls
     over financial reporting.

Date:  April 20, 2004

                                                   /s/ Francis Smith
                                                   Francis Smith
                                                   Principal Financial Officer

















                                       22




                            SECTION 906 CERTIFICATION

                Certification Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002

Morgan Stanley Dividend Growth Securities Inc.

     In connection with the Report on Form N-CSR (the "Report") of the
above-named issuer for the period ended February 29, 2004 that is accompanied by
this certification, the undersigned hereby certifies that:

1.   The Report fully complies with the requirements of Section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

2.   The information contained in the Report fairly presents, in all material
     respects, the financial condition and results of operations of the Issuer.



Date: April 20, 2004                                /s/ Ronald E. Robison
                                                    ---------------------------
                                                    Ronald E. Robison
                                                    Principal Executive Officer


A signed original of this written statement required by Section 906 has been
provided to Morgan Stanley Dividend Growth Securities Inc. and will be retained
by Morgan Stanley Dividend Growth Securities Inc. and furnished to the
Securities and Exchange Commission or its staff upon request.








                                       23



                            SECTION 906 CERTIFICATION

                Certification Pursuant to 18 U.S.C. Section 1350,
                             As Adopted Pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002

Morgan Stanley Dividend Growth Securities Inc.

     In connection with the Report on Form N-CSR (the "Report") of the
above-named issuer for the period ended February 29, 2004 that is accompanied by
this certification, the undersigned hereby certifies that:

1.   The Report fully complies with the requirements of Section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

2.   The information contained in the Report fairly presents, in all material
     respects, the financial condition and results of operations of the Issuer.



Date: April 20, 2004                           /s/ Francis Smith
                                               ----------------------
                                               Francis Smith
                                               Principal Financial Officer


A signed original of this written statement required by Section 906 has been
provided to Morgan Stanley Dividend Growth Securities Inc. and will be retained
by Morgan Stanley Dividend Growth Securities Inc. and furnished to the
Securities and Exchange Commission or its staff upon request.






                                       24