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

                           FORM 10-Q

[X]   Quarterly  report pursuant to Section 13 or  15(d)  of  the
Securities Exchange Act of 1934
For the quarterly period ended September 30, 1999 or

[  ]   Transition report pursuant to Section 13 or 15(d)  of  the
Securities Exchange Act of 1934
For the transition period from ________________to_____________

Commission File Number 0-13299


                DEAN WITTER CORNERSTONE FUND III
    (Exact name of registrant as specified in its charter)


              New York                            13-3190919
(State or other jurisdiction of              (I.R.S. Employer
incorporation or organization)               Identification No.)


c/o Demeter Management Corporation
Two  World  Trade  Center, 62 Fl.,  New  York,  NY          10048
(Address of principal executive offices)           (Zip Code)


Registrant's telephone number, including area code (212) 392-5454

(Former  name, former address, and former fiscal year, if changed
since last report)


Indicate  by check-mark whether the registrant (1) has filed  all
reports  required  to be filed by Section  13  or  15(d)  of  the
Securities  Exchange Act of 1934 during the preceding  12  months
(or  for such shorter period that the registrant was required  to
file  such  reports),  and (2) has been subject  to  such  filing
requirements for the past 90 days.

Yes    X       No











<PAGE>
<TABLE>
                DEAN WITTER CORNERSTONE FUND III

             INDEX TO QUARTERLY REPORT ON FORM 10-Q

                       September 30, 1999

<CAPTION>
PART I. FINANCIAL INFORMATION
<S>                                                         <C>
Item 1. Financial Statements

   Statements of Financial Condition
   September 30, 1999 (Unaudited) and December 31, 1998.......2

   Statements of Operations for the Quarters Ended
   September 30, 1999 and 1998 (Unaudited)....................3

   Statements of Operations for the Nine Months Ended
   September 30, 1999 and 1998 (Unaudited)....................4

   Statements of Changes in Partners' Capital for the
   Nine Months Ended September 30, 1999 and 1998 (Unaudited)..5

   Statements of Cash Flows for the Nine Months Ended
   September 30, 1999 and 1998 (Unaudited)....................6

   Notes to Financial Statements (Unaudited)...............7-11

Item 2. Management's Discussion and Analysis of Financial

Condition and Results of Operations.............. 12-20

Item 3. Quantitative and Qualitative Disclosures about
        Market Risk ......................................20-32

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings.................................. 33

Item 2.  Changes in Securities and Use of Proceeds........33-34

Item 6.  Exhibits and Reports on Form 8-K................... 34


</TABLE>











<PAGE>
<TABLE>

                 PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

                DEAN WITTER CORNERSTONE FUND III
               STATEMENTS OF FINANCIAL CONDITION

<CAPTION>

                                   September 30,   December 31,
                                      1999              1998
                                         $              $
                                    (Unaudited)
ASSETS
<S>                              <C>               <C>
Equity in futures interests trading accounts:
 Cash                           33,783,604       38,504,975
 Net unrealized gain on open contracts984,033     2,102,810
 Net option premiums              (139,169)          (50,047)

      Total Trading Equity      34,628,468       40,557,738

 Interest receivable (DWR)         112,952          120,465
 Due from DWR                       77,798            81,647

      Total Assets              34,819,218       40,759,850

LIABILITIES AND PARTNERS' CAPITAL

Liabilities

 Redemptions payable               277,651          220,184
 Accrued administrative expenses   162,942          104,780
 Accrued management fees           115,137          135,067

      Total Liabilities            555,730          460,031

Partners' Capital

 Limited Partners (11,273.419 and
    12,193.413 Units, respectively)33,836,968    39,835,572
 General Partner (142.103 Units)       426,520         464,247

 Total Partners' Capital        34,263,488       40,299,819

  Total  Liabilities and Partners' Capital   34,819,218       40,
759,850


NET ASSET VALUE PER UNIT          3,001.48          3,266.97

<FN>
          The accompanying notes are an integral part
                 of these financial statements.
</TABLE>
<PAGE>
<TABLE>
                DEAN WITTER CORNERSTONE FUND III
                    STATEMENTS OF OPERATIONS
                           (Unaudited)

<CAPTION>




                                For the Quarters Ended September 30,

                                     1999                1998
                                       $             $
REVENUES
<S>                       <C>                <C>
 Trading profit (loss):
    Realized                    (140,237)     1,195,020
         Net      change      in     unrealized       (1,169,348)
3,556,398

      Total Trading Results   (1,309,585)     4,751,418

           Interest       Income       (DWR)              344,598
422,909

      Total Revenues            (964,987)     5,174,327


EXPENSES

    Brokerage commissions (DWR)  556,565       543,426
    Management fees              351,219       434,472
    Transaction fees and costs    41,564        57,477
    Administrative expenses       20,836          20,852

      Total Expenses             970,184      1,056,227

NET INCOME (LOSS)              (1,935,171)    4,118,100


NET INCOME (LOSS) ALLOCATION

    Limited Partners           (1,911,525)   3,997,158
    General Partner               (23,646)     120,942

NET INCOME (LOSS) PER UNIT

       Limited    Partners                (166.41)         316.52
General Partner                   (166.41)      316.52

<FN>

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

</TABLE>

<PAGE>
<TABLE>
                DEAN WITTER CORNERSTONE FUND III
                    STATEMENTS OF OPERATIONS
                           (Unaudited)


<CAPTION>



                             For the Nine Months Ended September 30,

                                     1999                1998
                                       $             $
REVENUES
<S>                          <C>             <C>
 Trading profit (loss):
    Realized                       (183,542)  5,018,082
                      Net   change  in  unrealized    (1,118,777)
3,103,163

      Total Trading Results     (1,302,319)   8,121,245

    Interest Income (DWR)        1,024,396    1,280,723

      Total Revenues              (277,923)     9,401,968


EXPENSES

    Brokerage commissions (DWR)  1,577,672    1,636,282
    Management fees              1,110,193    1,270,563
    Transaction fees and costs     144,499      168,130
    Administrative expenses         58,162         53,026

      Total Expenses             2,890,526     3,128,001

NET INCOME (LOSS)                (3,168,449)   6,273,967


NET INCOME (LOSS) ALLOCATION

        Limited    Partners             (3,130,722)     6,092,123
    General Partner                (37,727)    181,844

NET INCOME (LOSS) PER UNIT

    Limited Partners                (265.49)     475.91
    General Partner                 (265.49)     475.91

<FN>
          The accompanying notes are an integral part
                 of these financial statements.
</TABLE>



<PAGE>
<TABLE>

                DEAN WITTER CORNERSTONE FUND III
           STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
     For the Nine Months Ended September 30, 1999 and 1998
                          (Unaudited)


<CAPTION>


                          Units of
                        Partnership Limited   General
                          Interest   Partners Partner    Total



<S>                       <C>                                 <C>
<C>                              <C>
Partners' Capital,
    December   31,   1997      13,734.437             $39,970,539
$1,143,835                       $41,114,374

Offering   of  Units           5.184              15,998        -
15,998

Net      Income                     -                   6,092,123
181,844                           6,273,967

Redemptions                  (897.394)                (2,849,139)
-                                  (2,849,139)

Partners' Capital,
    September   30,   1998     12,842.227             $43,229,521
$1,325,679                       $44,555,200





Partners' Capital,
    December   31,   1998      12,335.516             $39,835,572
$464,247                         $40,299,819

Net    Loss                       -                   (3,130,722)
(37,727)                         (3,168,449)

Redemptions                  (919.994)                (2,867,882)
-                                  (2,867,882)

Partners' Capital,
    September   30,   1999    11,415.522              $33,836,968
$426,520                         $34,263,488


<FN>







           The accompanying notes are an integral part
                 of these financial statements.
</TABLE>
<PAGE>
<TABLE>

                DEAN WITTER CORNERSTONE FUND III
                    STATEMENTS OF CASH FLOWS
                           (Unaudited)




<CAPTION>

                              For the Nine Months Ended September 30,

                                     1999              1998
                                        $            $
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                         <C>                          <C>
   Net  income  (loss)                 (3,168,449)              6
,273,967
 Noncash item included in net income (loss):
      Net  change  in  unrealized       1,118,777               (
3,103,163)

 (Increase) decrease in operating assets:
    Net option premiums              89,122              (7,952)
      Interest receivable (DWR)       7,513              6,538
    Due from DWR                      3,849              (2,139)

 Increase (decrease) in operating liabilities:
          Accrued      administrative      expenses        58,162
47,316
          Accrued      management      fees              (19,930)
11,041

  Net  cash  provided  by  (used for)  operating  activities   (1
,910,956)                                      3,225,608


CASH FLOWS FROM FINANCING ACTIVITIES

  Offering of units                   -                    15,998
Increase   (decrease)  in  redemptions  payable57,467           (
128,767)
Redemptions   of  units              (2,867,882)                (
2,849,139)

   Net   cash   used  for  financing  activities      (2,810,415)
(2,961,908)

 Net increase (decrease) in cash(4,721,371)              263,700
     Balance    at    beginning    of    period        38,504,975
39,762,715

     Balance     at     end    of    period            33,783,604
40,026,415

<FN>



          The accompanying notes are an integral part
                 of these financial statements.
</TABLE>

<PAGE>

                DEAN WITTER CORNERSTONE FUND III

                  NOTES TO FINANCIAL STATEMENTS

                           (Unaudited)



The  financial statements include, in the opinion of  management,

all  adjustments necessary for a fair presentation of the results

of  operations and financial condition of Dean Witter Cornerstone

Fund  III  (the  "Partnership").  The  financial  statements  and

condensed  notes  herein should be read in conjunction  with  the

Partnership's December 31, 1998 Annual Report on Form 10-K.



1. Organization

Dean  Witter  Cornerstone  Fund  III  is  a  limited  partnership

organized  to  engage  in  the speculative  trading  of  futures,

options  and  forward contracts on foreign currencies  and  other

commodity  interests  (collectively, "futures  interests").   The

Partnership  is  one  of  the  Dean  Witter  Cornerstone   Funds,

comprised  of  Dean Witter Cornerstone Fund II, the  Partnership,

and  Dean  Witter Cornerstone Fund IV. The Partnership's  general

partner is Demeter Management Corporation ("Demeter").  The  non-

clearing  commodity broker is Dean Witter Reynolds  Inc.  ("DWR")

and  an unaffiliated clearing commodity broker, Carr Futures Inc.

("Carr"), provides clearing and execution services.  Both Demeter

and  DWR  are  wholly-owned subsidiaries of Morgan  Stanley  Dean

Witter  &  Co. ("MSDW"). The trading managers to the  Partnership

are  Welton Investment Corporation ("Welton") and Sunrise Capital

Management   Inc.   ("Sunrise"),  (collectively,   the   "Trading

Managers").



<PAGE>

                DEAN WITTER CORNERSTONE FUND III
           NOTES TO FINANCIAL STATEMENTS (CONTINUED)



Commencing with the September 30, 1999 monthly closing,  the  Net

Assets previously managed by Abraham Trading Co. were reallocated

to Welton Investment Corporation.  Additionally, any net proceeds

or  redemptions  received via monthly exchanges into  or  out  of

Cornerstone  III  will be allocated equally  between  Welton  and

Sunrise.



2. Related Party Transactions

The Partnership's cash is on deposit with DWR and Carr in futures

interests trading accounts to meet margin requirements as needed.

DWR  pays  interest on these funds based on current 13-week  U.S.

Treasury  bill rates.  The Partnership pays brokerage commissions

to DWR.



3.  Financial Instruments

The Partnership trades futures, options and forward contracts  on

foreign  currencies  and other commodity interests.  Futures  and

forwards   represent  contracts  for  delayed  delivery   of   an

instrument  at  a  specified date and price.   Risk  arises  from

changes  in  the  value  of  these contracts  and  the  potential

inability  of  counterparties to perform under the terms  of  the

contracts.   There  are numerous factors which may  significantly

influence the market value of these contracts, including interest

rate volatility.





<PAGE>

                DEAN WITTER CORNERSTONE FUND III
           NOTES TO FINANCIAL STATEMENTS (CONTINUED)




In  June  1998, the Financial Accounting Standards  Board  issued

Statement  of  Financial Accounting Standard  ("SFAS")  No.  133,

"Accounting  for  Derivative Instruments and Hedging  Activities"

effective  for fiscal years beginning after June 15,  1999.   The

Partnership  elected  to adopt the provisions  of  SFAS  No.  133

beginning  with  the  fiscal year that ended December  31,  1998.

SFAS  No. 133 supersedes SFAS No. 119 and No. 105, which required

the   disclosure   of   average   aggregate   fair   values   and

contract/notional  values, respectively, of derivative  financial

instruments for an entity which carries its assets at fair value.

The  application  of  SFAS No. 133 does not  have  a  significant

effect on the Partnership's financial statements.



The  net  unrealized  gain on open contracts  is  reported  as  a

component  of  "Equity in futures interests trading accounts"  on

the  Statements of Financial Condition and totaled  $984,033  and

$2,102,810  at  September  30,  1999  and  December   31,   1998,

respectively.



Of  the  $984,033  net  unrealized  gain  on  open  contracts  at

September  30, 1999, $671,559 related to exchange-traded  futures

and  futures-styled option contracts and $312,474 related to off-

exchange-traded forward currency contracts.





<PAGE>
                DEAN WITTER CORNERSTONE FUND III
           NOTES TO FINANCIAL STATEMENTS (CONTINUED)


Of  the  $2,102,810  net unrealized gain  on  open  contracts  at

December 31, 1998, $2,250,314 related to exchange-traded  futures

and futures-styled option contracts and $(147,504) related to off-

exchange-traded forward currency contracts.



Exchange-traded futures and futures-styled options contracts held

by  the  Partnership at September 30, 1999 and December 31,  1998

mature  through  March  2000 and June  1999,  respectively.  Off-

exchange   traded  forward  currency  contracts   held   by   the

Partnership  at September 30, 1999 and December 31,  1998  mature

through December 1999 and March 1999, respectively.



The  Partnership  is subject to the credit risk  associated  with

counterparty  non-performance.  The credit risk  associated  with

the  instruments in which the Partnership is involved is  limited

to  the  amounts  reflected  in the Partnership's  Statements  of

Financial  Condition.  DWR and Carr act as the futures commission

merchants  or  the counterparties with respect  to  most  of  the

Partnership's  assets. Exchange-traded futures and futures-styled

options  contracts  are marked to market on a daily  basis,  with

variations  in value settled on a daily basis. Each  of  DWR  and

Carr,   as  a  futures  commission  merchant  for  all   of   the

Partnership's exchange-traded futures and futures-styled  options

contracts, are required, pursuant to regulations of the Commodity

Futures  Trading Commission ("CFTC") to segregate from their  own

assets,  and  for the sole benefit of their commodity  customers,

all funds held by

<PAGE>

                DEAN WITTER CORNERSTONE FUND III
           NOTES TO FINANCIAL STATEMENTS (CONCLUDED)




them  with  respect to exchange-traded futures and futures-styled

options   contracts,  including  an  amount  equal  to  the   net

unrealized  gain  on all open futures and futures-styled  options

contracts, which funds, in the aggregate, totaled $34,455,163 and

$40,755,289  at  September  30,  1999  and  December  31,   1998,

respectively.



With  respect  to  the Partnership's off-exchange-traded  forward

currency  contracts, there are no daily settlements of variations

in value nor is there any requirement that an amount equal to the

net  unrealized  gain  on open forward contracts  be  segregated.

With   respect  to  those  off-exchange-traded  forward  currency

contracts, the Partnership is at risk to the ability of Carr, the

sole  counterparty on all of such contracts, to perform.   Carr's

parent,   Credit  Agricole  Indosuez,  has  guaranteed   to   the

Partnership  payment  of  the  net  liquidating  value   of   the

transactions  in  the Partnership's account with Carr  (including

foreign currency contracts).
















<PAGE>
Item   2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Liquidity -  Assets of the Partnership are deposited with DWR  as

non-clearing  broker  and  Carr as clearing  broker  in  separate

futures interest trading accounts. Such assets are held in either

non-interest bearing bank accounts or in securities  approved  by

the  CFTC  for  investment of customer funds.  The  Partnership's

assets held by DWR and Carr may be used as margin solely for  the

Partnership's trading.  Since the Partnership's sole  purpose  is

to   trade  in  futures  interests,  it  is  expected  that   the

Partnership  will continue to own such liquid assets  for  margin

purposes.



The  Partnership's investment in futures interests may, from time

to time, be illiquid.  Most United States futures exchanges limit

fluctuations in certain futures interest prices during  a  single

day  by  regulations  referred to as  "daily  price  fluctuations

limits" or "daily limits".  Pursuant to such regulations,  during

a  single trading day no trades may be executed at prices  beyond

the  daily limit.  If the price for a particular futures interest

has increased or decreased by an amount equal to the daily limit,

positions  in  such  futures interest can neither  be  taken  nor

liquidated  unless  traders are willing to effect  trades  at  or

within  the  limit.   Futures interests prices have  occasionally

moved the daily limit for several consecutive days with little or

no trading.  Such market conditions could prevent the Partnership

from  promptly  liquidating its futures interests and  result  in

restrictions on redemptions.



<PAGE>

There  is  no limitation on daily price moves in trading  forward

contracts  on  foreign  currency.  The  markets  for  some  world

currencies  have low trading volume and are illiquid,  which  may

prevent  the  Partnership from trading in potentially  profitable

markets  or  from  promptly  liquidating  unfavorable  positions,

subjecting  it  to substantial losses.  Either  of  these  market

conditions could result in restrictions on redemptions.



Capital  Resources. The Partnership does not have,  nor  does  it

expect  to  have,  any  capital assets.  Future  redemptions  and

exchanges  of  Units of Limited Partnership Interest  ("Unit(s)")

will  affect  the  amount of funds available  for  investment  in

futures interests in subsequent periods.  Since they are  at  the

discretion  of Limited Partners, it is not possible  to  estimate

the  amount  and therefore, the impact of future redemptions  and

exchanges.



Results of Operations

For the Quarter and Nine Months Ended September 30, 1999

For  the  quarter  ended  September  30,  1999,  the  Partnership

recorded  total trading losses net of interest income of $964,987

and  posted  a  decrease in Net Asset Value per  Unit.  The  most

significant  losses  were recorded from  trading  S&P  500  Index

futures  as domestic equity prices moved in a short-term volatile

pattern  during late July and August due to inflationary concerns

in  the  U.S.  Additional losses were experienced in this  market

complex  during  July  from long positions  in  Hang  Seng  Index

futures as Hong Kong equity prices moved lower due to rising



<PAGE>

China-Taiwan  tensions  and a decline in China's  gross  domestic

product.   In global interest rate futures, losses were  recorded

during August from short eurodollar positions as U.S. bond prices

moved temporarily higher during mid-month due to benign inflation

data.   Smaller losses were incurred from short positions in  the

Swiss  franc  and  the  euro  as  the  value  of  these  European

currencies reversed their previous downward trend versus the U.S.

dollar during July due to strong economic data out of Europe  and

U.S.  inflationary  fears.  The losses recorded  in  this  market

complex  were mitigated by gains recorded from long positions  in

the  Japanese yen as the value of the yen strengthened versus the

U.S.  dollar  during  the  quarter amid  optimism  regarding  the

Japanese economy.  A portion of the Partnership's overall  losses

for  the quarter was offset by gains recorded from long positions

in  crude oil and its refined products, unleaded gas, heating oil

and  gas  oil.   Oil  prices increased during  July,  August  and

September,  due  primarily to a perceived  tightness  in  supply,

increasing  demand and an announcement by OPEC officials  stating

that  they  would  maintain output cuts until April  2000.  Total

expenses  for  the  three months ended September  30,  1999  were

$970,184, resulting in a net loss of $1,935,171.  The value of  a

Unit  decreased from $3,167.89 at June 30, 1999 to  $3,001.48  at

September 30, 1999.



For  the  nine  months ended September 30, 1999, the  Partnership

recorded  total trading losses net of interest income of $277,923

and posted a decrease in Net Asset Value per Unit.  The most



<PAGE>

significant losses were incurred from short positions in Japanese

government  bond futures as prices increased during  January  and

February.  During January, Japanese government bond prices  moved

higher in a "flight-to-quality" due to renewed concerns regarding

the  Brazilian  economy.   Prices in  this  market  continued  to

increase during February amid growing speculation that a rise  in

Japanese bond yields would result in Japanese investors replacing

international  bonds with yen-denominated debt.   In  currencies,

losses were experienced from long British pound positions as  the

value of the pound weakened versus the U.S. dollar during May due

to  fear  of  an  interest rate cut by the Bank of  England.   In

global stock index futures, losses were recorded during July from

long  positions  in Hang Seng Index futures as Hong  Kong  equity

prices  moved  lower due to rising China-Taiwan  tensions  and  a

decline  in China's gross domestic product.  Smaller losses  were

incurred in the metals markets during May from long positions  in

most  base  metals as prices declined amid abundant supplies  and

weak  demand.   A  portion of these losses was  offset  by  gains

recorded from long futures positions in crude oil and its refined

products as oil prices climbed during the first quarter  on  news

that both OPEC and non-OPEC countries had reached an agreement to

cut  total  output beginning April 1st.  Oil prices  received  an

added boost during the second and third quarters due to declining

inventory  levels and increasing demand. Total expenses  for  the

nine  months ended September 30, 1999 were $2,890,526,  resulting

in  a net loss of $3,168,449.  The value of a Unit decreased from

$3,266.97  at  December 31, 1998 to $3,001.48  at  September  30,

1999.

<PAGE>

For the Quarter and Nine Months Ended September 30, 1998

For  the  quarter  ended  September  30,  1998,  the  Partnership

recorded  total  trading revenues including  interest  income  of

$5,174,327  and posted an increase in Net Asset Value  per  Unit.

The  most  significant gains were recorded in the global interest

rate  futures  markets  during August  and  September  from  long

positions  in U.S. and European bond futures as prices  in  these

markets  trended higher.  Most global bond prices rallied  higher

during  the last two months of the quarter as investors continued

to  flock  to  these  perceived "safe havens"  due  to  worldwide

economic  uncertainty and the subsequent volatility.   Additional

gains were recorded in this market complex as long Japanese  bond

futures  positions profited from the upward trend in prices.   In

the  agricultural  markets,  profits  were  recorded  from  short

positions  in the livestock and corn futures as prices  in  these

markets  decreased  during  July and  August  due  to  increasing

supplies  and  declining demand.  A portion of  these  gains  was

offset by losses recorded in global stock index futures from long

S&P  500 Index futures positions as domestic stock prices plunged

during  late  July  and throughout August after  reaching  record

levels early in the quarter.  Additional losses were recorded  in

the  metals  markets  during July from short  positions  in  base

metals futures as prices moved higher early in the month.   As  a

result of this move higher, long positions in these markets  were

established only to result in additional losses in late  July  as

prices regained their previous downward momentum.  Smaller losses

were  recorded in energy futures trading during September.  Total

expenses for the three months ended September 30, 1998 were

<PAGE>

$1,056,227, resulting in net income of $4,118,100.  The value  of

a  Unit increased from $3,152.91 at June 30, 1998 to $3,469.43 at

September 30, 1998.



For  the  nine  months ended September 30, 1998, the  Partnership

recorded  total  trading revenues including  interest  income  of

$9,401,968  and posted an increase in Net Asset Value  per  Unit.

The  most significant profits were recorded from long global bond

futures  positions,  particularly U.S. and German  bond  futures,

during the third quarter as a result of a strong upward trend  in

prices during August and September.  Most global bond prices were

pushed  significantly  higher during  this  period  as  investors

sought   a  "safe  haven"  in  lieu  of  the  worldwide  economic

instability,  particularly in emerging markets.  Smaller  profits

were  recorded  from long positions in Japanese bond  futures  as

prices in this market also trended higher.  In global stock index

futures, profits were recorded from long U.S. and European  stock

index  futures  positions  as prices  in  these  markets  trended

consistently  higher  to record highs throughout  the  first  six

months  of  the year before reversing sharply lower  during  late

July  and  early  August.  Additional  gains  were  recorded   in

livestock  futures  from short cattle and hog futures  as  prices

declined  during  the  second  and third  quarters.   Gains  were

recorded  in  energies from short crude oil futures positions  as

oil prices declined during January and February on news of easing

tensions in the Middle East, and again during May, June and  July

on  reports of increasing supplies.  Smaller gains were  recorded

from  short  positions in sugar futures as sugar  prices  trended

lower between January and April.  A

<PAGE>

portion  of  these  gains was offset by losses  recorded  in  the

metals  markets from short gold futures positions as gold  prices

reversed  higher  during January and September.   Smaller  losses

were  recorded  from long silver futures during March  as  silver

prices  reversed  lower  after trending  steadily  higher  during

January  and early February.  In currencies, losses were recorded

from transactions involving the British pound, as its value moved

in  a  trendless pattern relative to the U.S. dollar  during  the

first  nine  months  of the year.  Total expenses  for  the  nine

months ended September 30, 1998 were $3,128,001, resulting in net

income  of  $6,273,967.   The value  of  a  Unit  increased  from

$2,993.52  at  December 31, 1997 to $3,469.43  at  September  30,

1998.



Year  2000 Problem.  Commodity pools, like financial and business

organizations  and individuals around the world,  depend  on  the

smooth functioning of computer systems.  Many computer systems in

use  today cannot recognize the computer code for the year  2000,

but revert to 1900 or some other date.  This is commonly known as

the  "Year  2000  Problem". The Partnership  could  be  adversely

affected  if computer systems used by it or any third party  with

whom  it has a material relationship do not properly process  and

calculate date-related information and data concerning  dates  on

or  after January 1, 2000.  Such a failure could adversely affect

the  handling or determination of futures trades and  prices  and

other services.





<PAGE>

MSDW  began its planning for the Year 2000 Problem in  1995,  and

currently  has several hundred employees working on  the  matter.

It  has developed its own Year 2000 compliance plan to deal  with

the  problem and had the plan approved by the company's executive

management,   Board  of  Directors  and  Information   Technology

Department. Demeter is coordinating with MSDW to address the Year

2000  Problem  with  respect to Demeter's computer  systems  that

affect  the  Partnership.  This includes  hardware  and  software

upgrades, systems consulting and computer maintenance.



Beyond  the  challenge  facing  internal  computer  systems,  the

systems  failure  of  any  of the third  parties  with  whom  the

Partnership  has a material relationship - the futures  exchanges

and  clearing organizations through which it trades, Carr, or the

Trading  Managers - could result in a material financial risk  to

the  Partnership.  All  U.S. futures  exchanges  are  subject  to

monitoring  by the CFTC of their Year 2000 preparedness  and  the

major  foreign futures exchanges are also expected to be  subject

to market-wide testing of their Year 2000 compliance during 1999.

Demeter  intends to monitor the progress of Carr and the  Trading

Managers throughout 1999 in their Year 2000 compliance and, where

applicable,  to  test its external interface with  Carr  and  the

Trading Managers.



A  worst case scenario would be one in which trading of contracts

on  behalf  of the Partnership becomes impossible as a result  of

the  Year 2000 problem encountered by any third parties.  A  less

catastrophic but more likely scenario would be one in which

<PAGE>

trading  opportunities diminish as a result of technical problems

resulting  in  illiquidity  and  fewer  opportunities   to   make

profitable trades. MSDW has begun developing various "contingency

plans" in the event that the systems of such third parties  fail.

Demeter  intends  to  consult closely with MSDW  in  implementing

those  plans.  Despite the best efforts of both Demeter and MSDW,

however,  it is possible that these steps will not be  sufficient

to avoid any adverse impact to the Partnership.


Risks  Associated  With  the Euro.  On January  1,  1999,  eleven

countries  in  the  European Union established  fixed  conversion

rates on their existing sovereign currencies and converted  to  a

common   single  currency  (the  "euro").   During  a  three-year

transition  period,  the sovereign currencies  will  continue  to

exist  but  only as a fixed denomination of the euro.  Conversion

to the euro prevents the Trading Managers from trading in certain

currencies and thereby limits their ability to take advantage  of

potential market opportunities that might otherwise have  existed

had  separate  currencies been available  to  trade.  This  could

adversely affect the performance results of the Partnership.



Item  3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES  ABOUT  MARKET
RISK

Introduction


The  Partnership  is a commodity pool engaged  primarily  in  the

speculative  trading of futures interests.  The market  sensitive

instruments  held  by  the Partnership are  acquired  solely  for

speculative trading purposes and, as a result, all or

<PAGE>

substantially all of the Partnership's assets are subject to  the

risk  of trading loss.  Unlike an operating company, the risk  of

market-sensitive instruments is integral, not incidental, to  the

Partnership's primary business activities.



The  futures interests traded by the Partnership involve  varying

degrees  of  related  market risk.  Such  market  risk  is  often

dependent  upon  changes in the level or volatility  of  interest

rates,   exchange  rates,  and/or  market  values  of   financial

instruments and commodities.  Fluctuations in related market risk

based  upon the aforementioned factors result in frequent changes

in  the  fair  value  of the Partnership's open  positions,  and,

consequently, in its earnings and cash flow.



The  Partnership's  total market risk is  influenced  by  a  wide

variety  of factors, including the diversification effects  among

the Partnership's existing open positions, the volatility present

within  the  market(s), and the liquidity of the  market(s).   At

varying  times,  each of these factors may act to  exacerbate  or

mute the market risk associated with the Partnership.



The  Partnership's past performance is not necessarily indicative

of   its   future  results.   Any  attempt  at  quantifying   the

Partnership's  market  risk  must be qualified  by  the  inherent

uncertainty  of its speculative trading, which may  cause  future

losses and volatility (i.e. "risk of ruin") far in excess of  the

Partnership's   experience   to  date   and/or   any   reasonable

expectation premised upon historical changes in the fair value of

<PAGE>

market-sensitive instruments.


Quantifying the Partnership's Trading Value at Risk


The    following    quantitative   disclosures   regarding    the

Partnership's  market  risk  exposures  contain  "forward-looking

statements"  within  the meaning of the safe  harbor  from  civil

liability  provided for such statements by the Private Securities

Litigation  Reform Act of 1995 (set forth in Section 27A  of  the

Securities Act of 1933 and Section 21E of the Securities Exchange

Act  of 1934).  All quantitative disclosures in this section  are

deemed to be forward-looking statements for purposes of the  safe

harbor, except for statements of historical fact.



The Partnership accounts for open positions on the basis of mark-

to-market accounting principles.  As such, any loss in  the  fair

value  of  the Partnership's open positions is directly reflected

in  the  Partnership's earnings, whether realized or  unrealized,

and  the  Partnership's cash flow, as profits and losses on  open

positions of exchange-traded futures interests are settled  daily

through variation margin.



The  Partnership's  risk exposure in the various  market  sectors

traded  by  the Trading Managers is estimated below in  terms  of

Value  at Risk ("VaR"). The VaR model employed by the Partnership

incorporates numerous variables that could impact the fair  value

of   the   Partnership's  trading  portfolio.   The   Partnership

estimates



<PAGE>

VaR  using  a  model  based  on  historical  simulation  with   a

confidence   level   of  99%.   Historical  simulation   involves

constructing  a  distribution of hypothetical  daily  changes  in

trading  portfolio  value.  The VaR model  generally  takes  into

account linear exposures to price and interest rate risk.  Market

risks  that are incorporated in the VaR model include equity  and

commodity prices, interest rates, foreign exchange rates, as well

as   correlation   that  exists  among  these   variables.    The

hypothetical  changes  in  portfolio value  are  based  on  daily

observed percentage changes in key market indices or other market

factors  ("market  risk  factors")  to  which  the  portfolio  is

sensitive.   In the case of the Partnership's VaR, the historical

observation   period   is   approximately   four   years.     The

Partnership's one-day 99% VaR corresponds to the negative  change

in  portfolio  value that, based on observed market  risk  factor

moves, would have been exceeded once in 100 trading days.



VaR models such as the Partnership's are continually evolving  as

trading  portfolios  become more diverse and modeling  techniques

and systems capabilities improve.  It must also be noted that the

VaR  model is used to quantify market risk for historic reporting

purposes  only  and  is  not utilized by either  Demeter  or  the

Trading Managers in their daily risk management activities.



The Partnership's Value at Risk in Different Market Sectors

The  following  table  indicates  the  VaR  associated  with  the

Partnership's open positions as a percentage of total Net Assets



<PAGE>

by market category as of September 30, 1999.  As of September 30,

1999,  the  Partnership's total capitalization was  approximately

$34  million.

     Primary Market            September 30, 1999
     Risk Category              Value at Risk

     Equity                        (0.10)%

     Interest Rate                 (0.74)

     Currency                      (0.87)

     Commodity                     (1.11)

     Aggregate Value at Risk       (1.73)%



Aggregate  value  at  risk represents the aggregate  VaR  of  the

Partnership's open positions and not the sum of the  VaR  of  the

individual categories listed above.  Aggregate VaR will be  lower

as  it  takes into account correlation among different  positions

and categories.


The  table  above  represents the VaR of the  Partnership's  open

positions  at  September  30, 1999 only and  is  not  necessarily

representative  of  either the historic  or  future  risk  of  an

investment  in  the  Partnership.   As  the  Partnership's   sole

business   is  the  speculative  trading  of  primarily   futures

interests, the composition of its portfolio of open positions can

change significantly over any given time period or even within  a

single  trading  day.   Such  changes  in  open  positions  could

materially   impact  market  risk  as  measured  by  VaR   either

positively or negatively.





<PAGE>

The  table below supplements the quarter-end VaR by presenting  the

Partnership's  high, low and average VaR as a percentage  of  total

Net Assets for the four quarterly reporting periods from October 1,

1998 through September 30, 1999.

Primary Market Risk Category        High      Low      Average

Equity                             (2.24)%   (0.10)%    (0.94)%

Interest Rate                      (1.32)    (0.43)     (0.90)
Currency                           (1.95)    (0.72)     (1.23)
Commodity                          (1.11)    (0.73)     (0.91)

Aggregate Value at Risk            (3.63)%   (1.61)%    (2.24)%


Limitations on Value at Risk as an Assessment of Market Risk

The  face  value  of  the  market sector instruments  held  by  the

Partnership is typically many times the applicable margin  require-

ments,  as such margin requirements generally range between 2%  and

15%  of  contract  face value.  Additionally, due  to  the  use  of

leverage, the face value of the market sector instruments  held  by

the Partnership is typically many times the total capitalization of

the Partnership.  The financial magnitude of the Partnership's open

positions thus creates a      "risk of ruin" not typically found in

other  investment  vehicles.   Due to  the  relative  size  of  the

positions held, certain market conditions may cause the Partnership

to  incur losses greatly in excess of VaR within a short period  of

time.  The foregoing VaR tables, as well as the past performance of

the  Partnership, gives no indication of such "risk  of  ruin".  In

addition, VaR risk measures should be interpreted in light  of  the

methodology's  limitations,  which  include  the  following:   past

changes  in  market  risk factors will not  always  yield  accurate

predictions of

<PAGE>

the  distributions  and  correlations of future  market  movements;

changes  in  portfolio  value in response to market  movements  may

differ  from  the responses implicit in a VaR model; published  VaR

results reflect past trading positions while future risk depends on

future  positions; VaR using a one-day time horizon does not  fully

capture  the market risk of positions that cannot be liquidated  or

hedged  within one day; and the historical market risk factor  data

used  for  VaR  estimation may provide only  limited  insight  into

losses   that  could  be  incurred  under  certain  unusual  market

movements.



The  foregoing  VaR tables present the results of the Partnership's

VaR  for each of the Partnership's market risk exposures and on  an

aggregate basis at September 30, 1999 and for the end of  the  four

quarterly  reporting periods from October 1, 1998 through September

30, 1999. Since VaR is based on historical data, VaR should not  be

viewed   as   predictive  of  the  Partnership's  future  financial

performance or its ability to manage and monitor risk and there can

be  no  assurance  that  the  Partnership's  actual  losses  on   a

particular  day will not exceed the VaR amounts indicated  or  that

such losses will not occur more than 1 in 100 trading days.



Non-Trading Risk

The  Partnership  has non-trading market risk on its  foreign  cash

balances not needed for margin.  However, such balances, as well as

any   market   risk  they  may  represent,  are  immaterial.    The

Partnership  also  maintains a substantial  portion  (approximately

91%)  of its available assets in cash at DWR.  A decline in  short-

term interest



<PAGE>

rates will result in a decline in the Partnership's cash management

income. This cash flow risk is not considered material.



Materiality,  as  used  throughout this section,  is  based  on  an

assessment  of  reasonably  possible  market  movements   and   the

potential losses caused by such movements, taking into account  the

leverage,  optionality and multiplier features of the Partnership's

market- sensitive instruments.



Qualitative Disclosures Regarding Primary Trading Risk Exposures

The  following  qualitative disclosures regarding the Partnership's

market  risk exposures - except for (i) those disclosures that  are

statements of historical fact and (ii) the descriptions of how  the

Partnership manages its primary market risk exposures -  constitute

forward-looking statements within the meaning of Section 27A of the

Securities Act and Section 21E of the Securities Exchange Act.  The

Partnership's  primary  market  risk  exposures  as  well  as   the

strategies used and to be used by Demeter and the Trading  Managers

for  managing such exposures are subject to numerous uncertainties,

contingencies  and risks, any one of which could cause  the  actual

results  of  the  Partnership's risk controls to differ  materially

from  the objectives of such strategies.  Government interventions,

defaults  and  expropriations, illiquid markets, the  emergence  of

dominant  fundamental  factors,  political  upheavals,  changes  in

historical   price   relationships,  an  influx   of   new   market

participants,  increased regulation and many  other  factors  could

result  in  material losses as well as in material changes  to  the

risk



<PAGE>

exposures  and  the risk management strategies of the  Partnership.

Investors  must  be  prepared to lose all or substantially  all  of

their investment in the Partnership.



The  following  were the primary trading risk  exposures  of  the

Partnership as of September 30, 1999, by market sector.   It  may

be  anticipated  however, that these market exposures  will  vary

materially over time.

      Currency. The primary market exposure in the Partnership at

September 30, 1999 was in the currency sector.  The Partnership's

currency  exposure  is  to exchange rate fluctuations,  primarily

fluctuations  which disrupt the historical pricing  relationships

between  different currencies and currency pairs.  Interest  rate

changes  as  well  as  political and general economic  conditions

influence these fluctuations.  The Partnership trades in a  large

number  of  currencies, including cross-rates -  i.e.,  positions

between two currencies other than the U.S. dollar.  For the third

quarter  of 1999, the Partnership's major exposures were  in  the

euro   currency  crosses  and  outright  U.S.  dollar  positions.

(Outright  positions  consist  of  the  U.S.  dollar  vs.   other

currencies.  These other currencies include the major  and  minor

currencies).   Demeter does not anticipate that the risk  profile

of the Partnership's currency sector will change significantly in

the  future.   The  currency trading VaR figure includes  foreign

margin  amounts  converted into U.S. dollars with an  incremental

adjustment to reflect the exchange rate risk inherent to the



<PAGE>

dollar-based  Partnership  in  expressing  VaR  in  a  functional

currency other than dollars.

      Interest  Rate.  The  second largest market  exposure  this

quarter  was in the interest rate complex.  Exposure  was  spread

across   the  U.S.,  German,  Japanese,  Spanish  and  Australian

interest  rate sectors.  Interest rate movements directly  affect

the  price  of the sovereign bond futures positions held  by  the

Partnership  and indirectly affect the value of its  stock  index

and  currency positions.  Interest rate movements in one  country

as  well  as  relative interest rate movements between  countries

materially   impact   the   Partnership's   profitability.    The

Partnership's  primary  interest rate exposure  is  generally  to

interest rate fluctuations in the United States and the other G-7

countries.  However, the Partnership also takes futures positions

in  the government debt of smaller nations - e.g. Australia,  New

Zealand  and Spain.  Demeter anticipates that G-7 and  Australian

interest rates will remain the primary interest rate exposure  of

the  Partnership  for  the foreseeable future.   The  changes  in

interest  rates,  which have the most effect on the  Partnership,

are  changes in long-term, as opposed to short-term, rates.  Most

of  the speculative futures positions held by the Partnership are

in   medium-to-long  term  instruments.   Consequently,  even   a

material  change in short-term rates would have little effect  on

the  Partnership, were the medium-to-long term  rates  to  remain

steady.

      Equity. The primary equity exposure is to equity price risk

in the G-7 countries.  The stock index futures traded by the

<PAGE>

Partnership  are  by  law  limited to  futures  on  broadly-based

indices.   As  of  September 30, 1999, the Partnership's  primary

exposures  were  in the NASDAQ (U.S.) and CAC 40  (France)  stock

indices.   The Partnership is primarily exposed to  the  risk  of

adverse  price trends or static markets in the U.S. and  European

indices.   (Static markets would not cause major  market  changes

but  would  make it difficult for the Partnership to avoid  being

"whipsawed" into numerous small losses).

     Commodity.

     Energy.  On  September  30, 1999, the  Partnership's  energy

exposure was shared by futures contracts in the crude and heating

oil,  and unleaded gas markets.  Price movements in these markets

result  from  political developments in the Middle East,  weather

patterns,  and other economic fundamentals.  As oil  prices  have

increased about 100% this year, and, given that the agreement  by

OPEC  to cut production is approaching expiration in March  2000,

it  is  possible  that volatility will remain on  the  high  end.

Significant  profits  and losses have been and  are  expected  to

continue to be experienced in this market.

     Metals. The Partnership's primary metals market exposure  is

to  fluctuations  in  the  price of gold  and  silver.   Although

certain  Trading  Managers will, from time to  time,  trade  base

metals  such  as  copper, aluminum, zinc, nickel  and  lead,  the

principal  market exposures of the Partnership have  consistently

been  in precious metals, gold and silver.  A significant  amount

of  exposure was evident in the gold market as the price of  gold

increased dramatically following bullish comments by the European

<PAGE>                                                    Central

Bank.  Silver prices were also volatile over this period, and the

Trading  Managers have taken substantial positions when perceived

market  opportunities developed.  Demeter anticipates  that  gold

and silver will remain the primary metals market exposure for the

Partnership.

     Soft  Commodities and Agriculturals. On September 30,  1999,

the  Partnership  had  a reasonable amount  of  exposure  in  the

markets  that  comprise  these sectors.  Most  of  the  exposure,

however,  was in the coffee, corn and wheat markets.  Supply  and

demand   inequalities,  severe  weather  disruption  and   market

expectations affect price movements in these markets.



Qualitative Disclosures Regarding Non-Trading Risk Exposure

The  following  was  the only non-trading risk  exposure  of  the

Partnership as of September 30, 1999:



Foreign  Currency  Balances.  The Partnership's  primary  foreign

currency  balances  are in British pounds, Japanese  yen,  euros,

Swiss  francs, and Mexican pesos.  The Partnership  controls  the

non-trading risk of these balances by regularly converting  these

balances  back  into dollars upon liquidation of  the  respective

positions.



Qualitative Disclosures Regarding Means of Managing Risk Exposure

The  means  by  which  the Partnership and the  Trading  Managers

attempt to manage the risk of the Partnership's open positions



<PAGE>

are  essentially  the  same  in  all  market  categories  traded.

Demeter  attempts to manage the Partnership's market exposure  by

(i) diversifying the Partnership's assets among different Trading

Managers,  each  of  whose strategies focus on  different  market

sectors   and  trading  approaches,  and  (ii),  monitoring   the

performance  of  the  Trading Managers  on  a  daily  basis.   In

addition,   the   Trading   Managers  establish   diversification

guidelines,  often  set  in terms of the  maximum  margin  to  be

committed  to  positions  in any one  market  sector  or  market-

sensitive  instrument.  One should be aware that certain  Trading

Managers  treat  their  risk control policies  as  strict  rules,

whereas others treat such policies as general guidelines.



Demeter monitors and controls the risk of the Partnership's  non-

trading   instrument,  cash,  which  is  the   only   Partnership

investment directed by Demeter, rather than the Trading Managers.

























<PAGE>
                   PART II.  OTHER INFORMATION



Item 1.  LEGAL PROCEEDINGS

The  following supplements Legal Proceedings previously disclosed

in the Partnership's 1998 Form 10-K:



In  the  New  York  action, the motion  to  dismiss  the  amended

complaint  with prejudice has been fully briefed and  argued  and

the Dean Witter Parties are awaiting the New York Supreme Court's

decision.



In  the  California action, on September 24, 1999,  the  Superior

Court in the State of California entered an order dismissing  the

consolidated amended complaint without prejudice on consent.



Item 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

Dean  Witter  Cornerstone  Fund I ("Cornerstone  I"),  Dean  Witter

Cornerstone   Fund  II  ("Cornerstone  II"),  and  the  Partnership

collectively  registered 250,000 Units pursuant to  a  Registration

Statement on Form S-1, which became effective on May 31, 1984  (the

"Registration  Statement")  (SEC File  Numbers  2-88587;  88587-01;

88587-02).   As  contemplated  in the  Registration  Statement,  an

additional fund, Dean Witter Cornerstone Fund IV ("Cornerstone  IV"

and,  collectively  with  Cornerstone I,  Cornerstone  II  and  the

Partnership, the "Cornerstone Funds"), was registered  pursuant  to

Post-Effective Amendment No. 5 to the Registration Statement, which

became effective on February 6, 1987.  The managing underwriter for

the Cornerstone Funds is DWR.

<PAGE>

The  offering for Cornerstone III originally commenced on  May  31,

1984  and  currently continues with 74,405.186 Units  sold  through

October  1, 1999. The aggregate price of Units sold through October

1, 1999 was $137,132,762.



For the Cornerstone Funds in aggregate, 235,430.680 Units have been

sold  through  October 1, 1999, leaving 14,569.320 Units  remaining

available for sale as of October 1, 1999.



Effective September 30, 1984, Cornerstone II, the Partnership and

Cornerstone IV were closed to new investors; Units have been sold

since then solely in "Exchanges" with existing investors, at 100%

of Net Asset Value per Unit.  DWR has been paying all expenses in

connection with the offering of Units since September  30,  1994,

without reimbursement.



Item 6.  Exhibits and Reports on Form 8-K

     A)  Exhibits - None.

     B)  Reports on Form 8-K. - None.



















<PAGE>







                           SIGNATURE



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




                           Dean Witter Cornerstone Fund III
                             (Registrant)

                           By: Demeter Management Corporation
                               (General Partner)

November 12, 1999          By: /s/ Lewis A. Raibley, III
                                   Lewis A. Raibley, III
                                    Director  and Chief Financial
                               Officer




The  General  Partner which signed the above is  the  only  party
authorized  to  act  for the Registrant.  The Registrant  has  no
principal   executive  officer,  principal   financial   officer,
controller, or principal accounting officer and has no  Board  of
Directors.