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 June 30, 2006 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 0-15442

	MORGAN STANLEY CORNERSTONE FUND IV L.P.

	(Exact name of registrant as specified in its charter)

		New York						     13-3393597
(State or other jurisdiction of		   		  (I.R.S. Employer
incorporation or organization)			       Identification No.)

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

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

Dean Witter Cornerstone Fund IV


(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___________

Indicate by check-mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer.  See definition
of ?accelerated filer and large accelerated filer? in Rule 12b-2 of the
Exchange Act.  (Check one):

Large accelerated filer___Accelerated filer____Non-accelerated filer X

Indicate by check-mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).  Yes___  No X


	<page> <table> MORGAN STANLEY CORNERSTONE FUND IV L.P.

(formerly, Dean Witter Cornerstone Fund IV)

	INDEX TO QUARTERLY REPORT ON FORM 10-Q

	June 30, 2006

<caption>


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

				<c>
		Statements of Financial Condition as of June 30, 2006
		(Unaudited) and December 31, 2005	2

		Statements of Operations for the Three and Six Months
		Ended June 30, 2006 and 2005 (Unaudited)	3

		Statements of Changes in Partners? Capital for the
		Six Months Ended June 30, 2006 and 2005 (Unaudited)	4

		Statements of Cash Flows for the Six Months Ended
		June 30, 2006 and 2005 (Unaudited)	5

		Notes to Financial Statements (Unaudited)	6-11

Item 2.	Management?s Discussion and Analysis of
			Financial Condition and Results of Operations	12-24

Item 3.	Quantitative and Qualitative Disclosures about
			Market Risk	25-34

Item 4.	Controls and Procedures	..35


PART II. OTHER INFORMATION

Item 1A.Risk Factors 	36

Item 5.	Other Information	36-37

Item 6.	Exhibits 	37
</table>


<page> <table> PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

	MORGAN STANLEY CORNERSTONE FUND IV L.P.
(formerly, Dean Witter Cornerstone Fund IV)
	STATEMENTS OF FINANCIAL CONDITION
<caption>
	June 30,	     December 31,
	       2006      	    2005
	$	$
	(Unaudited)
ASSETS

	<c>	<c>
Equity in futures interests trading accounts:
	Unrestricted cash	52,970,356	64,125,073
	Restricted cash	       24,727	         ?

	     Total cash	52,995,083	 64,125,073

	Net unrealized gain (loss) on open contracts (MS & Co.)        	(22,646)       	     1,973,887

		Total Trading Equity    	52,972,437      	 66,098,960

Interest receivable (Morgan Stanley DW)	171,980	170,317
Due from Morgan Stanley DW	         53,482	          55,750

	     Total Assets	    53,197,899             	      66,325,027

LIABILITIES AND PARTNERS? CAPITAL

Liabilities

Redemptions payable	712,319	1,232,662
Accrued management fees	154,915	193,125
Accrued administrative expenses	           84,000	         110,888

	     Total Liabilities	         951,234	     1,536,675

Partners? Capital

Limited Partners (9,720.223 and
  10,902.992 Units, respectively)	51,691,057	 64,109,338
General Partner (104.479 and
   115.479 Units, respectively)	        555,608	        679,014

	     Total Partners? Capital	    52,246,665	  64,788,352

	     Total Liabilities and Partners? Capital	    53,197,899 	   66,325,027

NET ASSET VALUE PER UNIT	        5,317.89	     5,879.98
<fn>
	The accompanying notes are an integral part
	of these financial statements.
</table>
<page> <table> 	MORGAN STANLEY CORNERSTONE FUND IV L.P.
(formerly, Dean Witter Cornerstone Fund IV)
	STATEMENTS OF OPERATIONS
(Unaudited)

<caption>

                             For the Three Months	                       For the Six Months
  	                  Ended June 30,     	                          Ended June 30,


                           2006   	        2005    	      2006   	    2005
                              $	           $	         $    	     $

	       <c>		<c>		<c>			<c>
INVESTMENT INCOME
	Interest income (Morgan Stanley DW)                   	   519,040		       428,219	   1,053,010		          842,126

EXPENSES
	Brokerage commissions (Morgan Stanley DW)	         542,813	655,006	1,064,199		1,565,667
	Management fees	                                                       481,422     	    669,437	1,011,978 		   1,368,608
	Common administrative expenses	                               44,000              35,000	        81,000	          	68,000

		   Total Expenses 	                                            1,068,235	   1,359,443	  2,157,177 		     3,002,275

NET INVESTMENT LOSS 	                                           (549,195)	      (931,224)	  (1,104,167)		  (2,160,149)

TRADING RESULTS
Trading profit (loss):
	Realized	                                                                  (1,313,733) 	(587,032)	(2,926,888)		(8,018,488)
	Net change in unrealized	                                         2,112,898	   8,457,153  	    (1,996,533)            (1,788,509)

		  Total Trading Results	                                       799,165	   7,870,121	   (4,923,421)		  (9,806,997)

NET INCOME (LOSS)	                                                    249,970	  6,938,897	   (6,027,588)		 (11,967,146)

NET INCOME (LOSS) ALLOCATION

	Limited Partners	                  247,557	  6,851,201	(5,964,597)		(11,825,339)
	General Partner 	2,413	87,696	(62,991)		(141,807)


NET INCOME (LOSS) PER UNIT

	Limited Partners                                                    	  19.74    	           556.87	 	(562.09)	(900.48)
	General Partner                                                           19.74                556.87	 	(562.09)	(900.48)

<fn>


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


<page> <table> 	MORGAN STANLEY CORNERSTONE FUND IV L.P.
(formerly, Dean Witter Cornerstone Fund IV)
	STATEMENTS OF CHANGES IN PARTNERS? CAPITAL
	For the Six Months Ended June 30, 2006 and 2005
	(Unaudited)

<caption>



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

	<c>	<c>	<c>	<c>
Partners? Capital,
   December 31, 2004	13,031.460	 93,819,259	1,147,630	94,966,889

Net Loss                                                                   ? 	  	(11,825,339)	(141,807)	(11,967,146)

Redemptions	    (723.908)	   (4,391,067)	      ?        	   (4,391,067)

Partners? Capital,
   June 30, 2005                                              12,307.552	 	  77,602,853	  1,005,823	   78,608,676



Partners? Capital,
   December 31, 2005	11,018.471	 64,109,338	  679,014	64,788,352

Net Loss                                                                   ? 	  	(5,964,597)	(62,991)	(6,027,588)

Redemptions	    (1,193.769)	   (6,453,684)	   (60,415)	   (6,514,099)

Partners? Capital,
   June 30, 2006                                                9,824.702	 	  51,691,057	    555,608	   52,246,665




<fn>









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


<page> <table>	MORGAN STANLEY CORNERSTONE FUND IV L.P.
(formerly, Dean Witter Cornerstone Fund IV)
	STATEMENTS OF CASH FLOWS
(Unaudited)

<caption>

	    For the Six Months Ended June 30,

	      2006     	      2005
	      $	      $


	<c>	<c>
CASH FLOWS FROM OPERATING ACTIVITIES

Net loss 	(6,027,588)	(11,967,146)
Noncash item included in net loss:
       Net change in unrealized                                                    	   1,996,533	1,788,509

(Increase) decrease in operating assets:
       Restricted cash	(24,727)	12,902
       Interest receivable (Morgan Stanley DW)	(1,663)	(27,124)
       Due from Morgan Stanley DW	2,268	(78,701)

Decrease in operating liabilities:
       Accrued management fees	(38,210)	(48,033)
       Accrued administrative expenses	        (26,888)	           (21,479)

Net cash used for operating activities	    (4,120,275)	    (10,341,072)


CASH FLOWS FROM FINANCING ACTIVITIES

Cash paid for redemptions of Units	    (7,034,442)	    (4,453,480)

Net cash used for financing activities	   (7,034,442)	   (4,453,480)

Net decrease in unrestricted cash	(11,154,717)	(14,794,552)

Unrestricted cash at beginning of period	   64,125,073	   89,655,633

Unrestricted cash at end of period	    52,970,356	   74,861,081



<fn>



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

</table>


<page> MORGAN STANLEY CORNERSTONE FUND IV L.P.
(formerly, Dean Witter Cornerstone Fund IV)
NOTES TO FINANCIAL STATEMENTS

June 30, 2006

(Unaudited)


The unaudited financial statements contained herein include, in
the opinion of management, all adjustments necessary for a fair
presentation of the results of operations and financial condition
of Morgan Stanley Cornerstone Fund IV L.P. (formerly known as
Dean Witter Cornerstone Fund IV) (the ?Partnership?).  The
financial statements and condensed notes herein should be read in
conjunction with the Partnership?s December 31, 2005 Annual
Report on Form 10-K.  Certain prior year amounts relating to cash
balances were reclassified on the Statements of Financial
Condition and the related Statements of Cash Flows to conform to
2006 presentation.  Such reclassifications have no impact on the
Partnership?s reported net income (loss).

1.  Organization
Morgan Stanley Cornerstone Fund IV L.P. (formerly known as Dean
Witter Cornerstone Fund IV) is a New York limited partnership
organized in 1986 to engage in the speculative trading of futures
contracts, options on futures contracts, and forward contracts on
foreign currencies.  The Partnership is one of the Morgan Stanley
Cornerstone Funds, comprised of the Partnership, Morgan Stanley

<page> MORGAN STANLEY CORNERSTONE FUND IV L.P.
(formerly, Dean Witter Cornerstone Fund IV)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Cornerstone Fund II L.P., and Morgan Stanley Cornerstone Fund III
L.P.

Effective July 21, 2006, Dean Witter Cornerstone Fund IV was
renamed to Morgan Stanley Cornerstone Fund IV L.P.

The Partnership?s general partner is Demeter Management
Corporation (?Demeter?).  The non-clearing commodity broker is
Morgan Stanley DW Inc. (?Morgan Stanley DW?). The clearing
commodity broker is Morgan Stanley & Co. Incorporated (?MS &
Co.?).  Demeter, Morgan Stanley DW, and MS & Co. are wholly-owned
subsidiaries of Morgan Stanley.  The trading managers to the
Partnership are John W. Henry & Company, Inc. and Sunrise Capital
Management, Inc. (individually, a ?Trading Manager?, or
collectively, the ?Trading Managers?).

2.  Related Party Transactions
The Partnership?s cash is on deposit with Morgan Stanley DW and
MS & Co. in futures, forwards, and options trading accounts to
meet margin requirements as needed.  Monthly, Morgan Stanley DW
pays the Partnership interest income equal to 80% of its average
daily Net Assets at a rate equal to the average yield on 13-week
U.S. Treasury bills.  The Partnership pays brokerage commissions
to Morgan Stanley DW.
<page> MORGAN STANLEY CORNERSTONE FUND IV L.P.
(formerly, Dean Witter Cornerstone Fund IV)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

3.  Financial Instruments
The Partnership trades futures contracts, options on futures
contracts, and forward contracts on foreign currencies.  Futures
and forwards represent contracts for delayed delivery of an
instrument at a specified date and price.  Risk arises from
changes in the value of these contracts and the potential
inability of counterparties to perform under the terms of the
contracts.  There are numerous factors which may significantly
influence the market value of these contracts, including interest
rate volatility.

The market value of exchange-traded contracts is based on the
settlement price quoted by the exchange on the day with respect
to which market value is being determined.  If an exchange-traded
contract could not have been liquidated on such day due to the
operation of daily limits or other rules of the exchange, the
settlement price shall be the settlement price on the first
subsequent day on which the contract could be liquidated.  The
market value of off-exchange-traded contracts is based on the
fair market value quoted by the counterparty.

The Partnership?s contracts are accounted for on a trade-date
basis and marked to market on a daily basis. The Partnership
accounts for its derivative investments in accordance with the
<page> MORGAN STANLEY CORNERSTONE FUND IV L.P.
(formerly, Dean Witter Cornerstone Fund IV)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
provisions of Statement of Financial Accounting Standards No.
133, ?Accounting for Derivative Instruments and Hedging
Activities? (?SFAS No. 133?).  SFAS No. 133 defines a derivative
as a financial instrument or other contract that has all three of
the following characteristics:

1)	One or more underlying notional amounts or payment
provisions;
2)	Requires no initial net investment or a smaller initial net
investment than would be required relative to changes in
market factors;
3)	Terms require or permit net settlement.

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

The net unrealized gains (losses) on open contracts, reported as a
component of ?Equity in futures interests trading accounts? on the
Statements of Financial Condition, and their longest contract
maturities were as follows:









<page> MORGAN STANLEY CORNERSTONE FUND IV L.P.
(formerly, Dean Witter Cornerstone Fund IV)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

                  Net Unrealized Gains/(Losses)
                        on Open Contracts                Longest Maturities

                 Exchange-  Off-Exchange-             Exchange-  Off-Exchange-
Date              Traded      Traded       Total       Traded       Traded
                     $          $            $

Jun. 30, 2006	-	       (22,646)			    (22,646)	-	Sep. 2006
Dec. 31, 2005	-	1,973,887	1,973,887	-	Mar. 2006

The Partnership has credit risk associated with counterparty non-
performance.  As of the date of the financial statements, the
credit risk associated with the instruments in which the
Partnership trades is limited to the amounts reflected in the
Partnership?s Statements of Financial Condition.

The Partnership also has credit risk because Morgan Stanley DW
and MS & Co. act as the futures commission merchants or the
counterparties, with respect to most of the Partnership?s assets.
Exchange-traded futures, forward, and futures-styled options
contracts are marked to market on a daily basis, with variations
in value settled on a daily basis.  Morgan Stanley DW and MS &
Co., each as a futures commission merchant for the Partnership?s
exchange-traded futures, forward, and futures-styled options
contracts, are required, pursuant to regulations of the Commodity


Futures Trading Commission (?CFTC?), to segregate from their own
assets, and for the sole benefit of their commodity customers,
all funds held by them with respect to exchange-traded futures,
forward, and futures-styled options contracts, including an
<page> MORGAN STANLEY CORNERSTONE FUND IV L.P.
(formerly, Dean Witter Cornerstone Fund IV)
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)

amount equal to the net unrealized gains (losses) on all open
futures, forward, and futures-styled options contracts.  With
respect to the Partnership?s off-exchange-traded forward currency
contracts, there are no daily exchange-required settlements of
variation in value, nor is there any requirement that an amount
equal to the net unrealized gains (losses) on open forward
contracts be segregated.  However, the Partnership is required to
meet margin requirements equal to the net unrealized loss on open
contracts in the Partnership accounts with the counterparty, which
is accomplished by daily maintenance of the cash balance in a
custody account held at Morgan Stanley DW for the benefit of MS &
Co. With respect to those off-exchange-traded forward currency
contracts, the Partnership is at risk to the ability of MS & Co.,
the sole counterparty on all such contracts, to perform.  The
Partnership has a netting agreement with MS & Co.  This
agreement, which seeks to reduce both the Partnership?s and MS &
Co.?s exposure on off-exchange-traded forward currency contracts,
should materially decrease the Partnership?s credit risk in the
event of MS & Co.?s bankruptcy or insolvency.

<page>
504:   Item 2. MANAGEMENT?S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS


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

The Partnership?s investment in futures, forwards, and options
may, from time to time, be illiquid.  Most U.S. futures exchanges
limit fluctuations in prices during a single day by regulations
referred to as ?daily price fluctuations limits? or ?daily
limits?.  Trades may not be executed at prices beyond the daily
limit.  If the price for a particular futures or options contract
has increased or decreased by an amount equal to the daily limit,
positions in that futures or options contract can neither be taken
nor liquidated unless traders are willing to effect trades at or
within the limit. Futures prices have occasionally moved the daily
limit for several consecutive days with little or no trading.
<page> These market conditions could prevent the Partnership from
promptly liquidating its futures or options contracts and result
in restrictions on redemptions.

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

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

Capital Resources.  The Partnership does not have, nor expects to
have, any capital assets.  Redemptions of units of limited
partnership interest (?Unit(s)?) in the future will affect the
amount of funds available for investments in futures, forwards,
<page> and options in subsequent periods. It is not possible to
estimate the amount, and therefore the impact, of future outflows
of Units.

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

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

Results of Operations
General. The Partnership?s results depend on the Trading Managers
and the ability of each Trading Manager?s trading program to take
advantage of price movements in the futures, forwards, and
options markets.  The following presents a summary of the
Partnership?s operations for the three and six month periods
ended June 30, 2006 and 2005, and a general discussion of its
trading activities during each period. It is important to note,
however, that the Trading Managers trade in various markets at
different times and that prior activity in a particular market
does not mean that such market will be actively traded by the
Trading Managers or will be profitable in the future.
<page> Consequently, the results of operations of the Partnership
are difficult to discuss other than in the context of the Trading
Managers? trading activities on behalf of the Partnership during
the period in question.  Past performance is no guarantee of
future results.

The Partnership?s results of operations set forth in the financial
statements on pages 2 through 11 of this report are prepared in
accordance with accounting principles generally accepted in the
United States of America, which require the use of certain
accounting policies that affect the amounts reported in these
financial statements, including the following:  The contracts the
Partnership trades are accounted for on a trade-date basis and
marked to market on a daily basis.  The difference between their
cost and market value is recorded on the Statements of Operations
as ?Net change in unrealized trading profit (loss)? for open
(unrealized) contracts, and recorded as ?Realized trading profit
(loss)? when open positions are closed out.  The sum of these
amounts constitutes the Partnership?s trading results.  The market
value of a futures contract is the settlement price on the
exchange on which that futures contract is traded on a particular
day.  The value of foreign currency forward contracts is based on
the spot rate as of the close of business.  Interest income, as
well as management fees, incentive fees, brokerage commissions
expenses of the Partnership are recorded on an accrual basis.

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

For the Three and Six Months Ended June 30, 2006
The Partnership recorded total trading results including interest
income totaling $1,318,205 and expenses totaling $1,068,235,
resulting in net income of $249,970 for the three months ended
June 30, 2006.  The Partnership?s net asset value per Unit
increased from $5,298.15 at March 31, 2006 to $5,317.89 at June
30, 2006.

The most significant trading gains of approximately 4.3%, 0.8%,
0.4%, 0.4% and 0.2%, respectively, were experienced during April
and May from long positions in the euro, Norwegian krone, British
pound, Singapore dollar, and Czech koruna versus the U.S. dollar
as the U.S. dollar weakened against its major rivals. In April,
the U.S. dollar trended lower on news that foreign central banks
were diversifying their currency reserves away from the U.S.
dollar. Also contributing to the U.S. dollar?s decline was
increased speculation that the U.S. Federal Reserve may pause its
interest rate tightening campaign. During May, the U.S. dollar
continued to be pressured lower versus the euro and British pound
as benign inflation data and weaker-than-expected housing starts
data boosted speculation that the U.S. Federal Reserve is nearing
<page> the end of its interest rate tightening policy. In
addition, the value of the U.S. dollar was negatively affected by
the persistent tensions between the U.S. and Iran over Iran?s
uranium enrichment program. Conversely, strong manufacturing data
out of the United Kingdom supported the British pound, while the
euro strengthened after Dutch Finance Minister Gerritt Zalm said
that the European Central Bank will not intervene to halt the
appreciation of the euro, as well as on increased expectations of
an interest rate hike in the near-future by the European Central
Bank. Additional gains of approximately 2.8% experienced in May
and June resulted from short positions in the South African rand
versus the U.S. dollar as the rand fell in tandem with falling
commodities prices, news that South Africa?s current account
deficit widened to a 24-year high and expectations that the
country?s Gross Domestic Product growth will be weaker-than-
expected. Additional gains of approximately 0.5% were experienced
from short positions in the Mexican peso versus the U.S. dollar
as the value of the peso declined against the U.S. dollar,
primarily during April, amid continuing political uncertainty in
the country. A portion of the Partnership?s gains in the second
quarter was offset by losses of approximately 4.2%, 1.9%, 1.1%
and 0.9%, respectively, primarily incurred in April, from short
positions in the Japanese yen, Australian dollar, Swiss franc,
and New Zealand dollar versus the U.S. dollar as the value of the
U.S. dollar moved lower due to the aforementioned reasons. In
addition to the U.S. dollar weakening, the Japanese yen
<page> strengthened on speculation of a possible Bank of Japan
interest rate hike, while the Swiss franc moved higher on
political tensions in the Middle East, which increased the demand
for the safe-haven currency. The Australian dollar also moved
higher on an unexpected interest rate hike by the Reserve Bank of
Australia in May. Smaller losses of approximately 0.9% were
incurred from long positions in the Brazilian real versus the
U.S. dollar as the value of the Brazilian real fell in May amid
weakness in the emerging markets. Further losses were experienced
from newly established short positions in the Brazilian real as
it strengthened against the U.S. dollar in June on speculation
that the U.S. Federal Reserve may be near the end of its interest
rate tightening campaign.

The Partnership recorded total trading results including interest
income totaling $(3,870,411) and expenses totaling $2,157,177,
resulting in a net loss of $6,027,588 for the six months ended
June 30, 2006.  The Partnership?s net asset value per Unit
decreased from $5,879.98 at December 31, 2005 to $5,317.89 at
June 30, 2006.

The most significant trading losses of approximately 8.7%, 4.0%,
2.0% and 0.6%, respectively, resulted from short positions in the
Japanese yen, Swiss franc, Australian dollar, and Norwegian krone
versus the U.S. dollar.  During April and May, the U.S. dollar
moved lower on news that foreign central banks are beginning to
<page> diversify their currency reserves away from U.S. dollar-
denominated assets, as well as uncertainty regarding the future
of the U.S. Federal Reserve?s interest rate tightening campaign.
The Japanese yen, Swiss franc, and Norwegian krone moved higher
against the U.S. dollar during January and February as strong
economic data out of the two regions increased speculation that
the Bank of Japan and European Central Bank may raise interest
rates. During April, the Japanese yen strengthened on speculation
of a possible Bank of Japan interest rate hike, while the Swiss
franc moved higher on political tensions in the Middle East. The
Australian dollar also moved higher on an unexpected interest
rate hike by the Reserve Bank of Australia in May. Additional
losses of approximately 0.9% were incurred from long positions in
the Brazilian real versus the U.S. dollar as the value of the
Brazilian real fell in May amid weakness in the emerging markets.
Newly established short positions in the Brazilian real incurred
further losses as it strengthened against the U.S. dollar in June
on speculation that the U.S. Federal Reserve may be near the end
of its interest rate tightening campaign. Smaller losses of
approximately 0.9% were recorded, primarily during March, from
both long and short positions in the Polish zloty against the
U.S. dollar as the value of the zloty moved without consistent
direction amid conflicting economic data out of Poland. A portion
of the Partnership?s losses in the first six months of the year
was offset by gains of approximately 2.6% and 2.5%, respectively,
recorded from short positions in the South African rand versus
<page> the U.S. dollar and long positions in the euro against the
U.S. dollar.  The South African rand weakened against the U.S.
dollar during June as the ?commodity-currency? fell in tandem
with falling gold prices. Meanwhile the euro strengthened
relative to the U.S. dollar after Dutch Finance Minister Gerritt
Zalm said that the European Central Bank will not intervene to
halt the appreciation of the euro, as well as on increased
expectations of an interest rate hike in the near-future by the
European Central Bank. Smaller gains of approximately 1.5% were
recorded from long positions in the Singapore dollar as it
benefited from the declining U.S. dollar. Additional gains of
approximately 0.9% were experienced, primarily during March, from
short positions in the New Zealand dollar versus the U.S. dollar
as the value of the New Zealand dollar trended lower on
expectations for an economic slowdown in New Zealand. Further
gains of 0.5% were recorded from short positions in the Mexican
peso versus the U.S. dollar as the value of the peso declined
against the U.S. dollar, primarily during April, amid continuing
political uncertainty in that country.

For the Three and Six Months Ended June 30, 2005
The Partnership recorded total trading results including interest
income totaling $8,298,340 and expenses totaling $1,359,443,
resulting in net income of $6,938,897 for the three months ended
June 30, 2005.  The Partnership?s net asset value per Unit
<page> increased from $5,830.16 at March 31, 2005 to $6,387.03 at
June 30, 2005.

The most significant trading gains of approximately 6.8% and
2.8%, respectively, resulted during May and June from short
positions in the euro and Swiss franc versus the U.S. dollar.
During May, the U.S. dollar increased after China downplayed
rumors of a move toward a flexible exchange rate, while the value
of the euro and Swiss franc moved lower on weaker-than-expected
French economic data, the rejection of a proposed European Union
constitution by French voters, and speculation that future
European Constitution referendums would result in similar
outcomes.  During June, short euro and Swiss franc positions
continued to profit as European currency values declined amid
market pessimism for future European integration, the release of
weak European economic data, and greater-than-expected capital
outflows into U.S. markets.  The U.S. dollar also increased
against other currencies following the ninth consecutive quarter-
point increase in U.S. interest rates.  Additional Partnership
gains of approximately 2.2% and 1.1%, respectively, were recorded
primarily during May and June from long positions in the Mexican
peso and Brazilian real versus the U.S. dollar as the value of
these currencies moved higher after Mexico?s Central Bank
representatives elected not to change Mexico?s monetary policy
and Brazil?s Minister of Finance reported increased foreign
investment in Brazil.  During June, the peso?s value continued
<page> its move higher amid comments from Mexico?s Finance
Minister, Francisco Gil Diaz, that the Mexican economy was on
track to meet the government's growth estimates for the year.
Further Partnership gains of approximately 2.0% were experienced
from short positions in the Japanese yen versus the U.S. dollar
as the yen?s value declined during May and June in response to
weak Japanese economic data.  A portion of Partnership?s overall
gains was offset by losses of approximately 4.3% recorded from
long positions in the British pound versus the U.S. dollar as the
pound?s value declined during May after British Prime Minister
Tony Blair's Labour Party re-election with a reduced government
majority, and then moved lower during June on growing speculation
the interest rate differential between the U.S. and the U.K.
would tighten.  Smaller Partnership losses of approximately 1.0%
stemmed from long positions in the Australian dollar versus the
U.S. dollar as the Australian dollar declined amid falling gold
prices, primarily during May.

The Partnership recorded total trading results including interest
income totaling $(8,964,871) and expenses totaling $3,002,275,
resulting in a net loss of $11,967,146 for the six months ended
June 30, 2005.  The Partnership?s net asset value per Unit
decreased from $7,287.51 at December 31, 2004 to $6,387.03 at
June 30, 2005.

<page> The most significant trading losses of approximately 6.1%,
1.3%, and 1.2%, respectively, resulted from positions in the
South African rand, New Zealand dollar, and Australian dollar
(collectively the ?Commodity Currencies?), versus the U.S.
dollar.  During the first quarter, losses resulted as the
Commodity Currency values traded counter to the U.S. dollar due
to a variety of macro-economic stimuli that caused the U.S.
dollar?s value to advance.  During the second quarter, the values
of the Commodity Currencies were impacted by speculation for
higher interest rates and falling gold prices.  Additional
Partnership losses of approximately 4.4% were incurred from long
positions in the British pound versus the U.S. dollar as the
pound?s value declined during May after British Prime Minister
Tony Blair's Labour Party re-election with a reduced government
majority, and then moved lower during June on growing speculation
the interest rate differential between the U.S. and the U.K.
would tighten.  Smaller Partnership losses of approximately 1.1%
were experienced from positions in the euro versus the U.S.
dollar primarily during the first quarter after the U.S. dollar?s
value moved higher during January amid improvements in the U.S.
Current-Account, speculation for higher U.S. interest rates, and
news that the Chinese government postponed its revaluation of the
Chinese yuan.  During February, losses were incurred from short
euro positions as the U.S. dollar?s value weakened due to
concerns for the U.S. Current-Account deficit as expressed by
U.S. Federal Reserve Chairman Alan Greenspan.  During early
<page> March, short euro positions continued to experience losses
as its value strengthened amid a sharp rise in German industrial
production.  A portion of the Partnership?s overall losses for
first six months of the year was offset by gains of approximately
2.2% experienced from short positions in the Japanese yen versus
the U.S. dollar as the yen?s value declined during May and June
in response to weak Japanese economic data.  Smaller Partnership
gains of approximately 1.0% were recorded from short positions in
the Swiss franc versus the U.S. dollar after the U.S. dollar
increased during May as China downplayed rumors of a move toward
a flexible exchange rate and the franc moved lower on weaker-
than-expected French economic data, the rejection of a proposed
European Union constitution by French voters, and speculation
that future European Constitution referendums would result in
similar outcomes.  During June, short franc positions continued
to profit as European currency values declined amid market
pessimism for future European integration, the release of weak
European economic data, and greater-than-expected capital
outflows into U.S. markets.


<page> Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK

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

The futures, forwards, and options traded by the Partnership
involve varying degrees of related market risk.  Market risk is
often dependent upon changes in the level or volatility of
interest rates, exchange rates, and prices of financial
instruments and commodities, factors that result in frequent
changes in the fair value of the Partnership?s open positions,
and consequently in its earnings, whether realized or unrealized,
and cash flow.  Gains and losses on open positions of exchange-
traded futures, forwards, and options are settled daily through
variation margin.  Gains and losses on off-exchange-traded
forward currency contracts are settled upon termination of the
contract, however, the Partnership is required to meet margin
requirements equal to the net unrealized loss on open contracts
in the Partnership accounts with the counterparty, which is
accomplished by daily maintenance of the cash balance in a <page>
custody account held at Morgan Stanley DW for the benefit of MS &
Co.

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

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

The Partnership?s past performance is no guarantee of its future
results.  Any attempt to numerically quantify the Partnership?s
market risk is limited by the uncertainty of its speculative
trading.  The Partnership?s speculative trading and use of
leverage may cause future losses and volatility (i.e., ?risk of
ruin?) that far exceed the Partnership?s experience to date under
the ?Partnership?s Value at Risk in Different Market Sectors?
section and significantly exceed the Value at Risk (?VaR?)
tables disclosed.
<page> Limited partners will not be liable for losses exceeding
the current net asset value of their investment.

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

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

The Partnership?s risk exposure in the market sectors traded by
the Trading Managers is estimated below in terms of VaR. The
Partnership estimates VaR using a model based upon historical
simulation (with a confidence level of 99%) which involves
constructing a distribution of hypothetical daily changes in the
value of a trading portfolio.  The VaR model takes into account
linear exposures to risk including equity and commodity prices,
<page> interest rates, foreign exchange rates, and correlation
among these variables. The hypothetical changes in portfolio value
are based on daily percentage changes observed in key market
indices or other market factors (?market risk factors?) to which
the portfolio is sensitive.  The one-day 99% confidence level of
the Partnership?s VaR corresponds to the negative change in
portfolio value that, based on observed market risk factors, would
have been exceeded once in 100 trading days, or one day in 100.
VaR typically does not represent the worst case outcome.  Demeter
uses approximately four years of daily market data (1,000
observations) and re-values its portfolio (using delta-gamma
approximations) for each of the historical market moves that
occurred over this time period.  This generates a probability
distribution of daily ?simulated profit and loss? outcomes.  The
VaR is the appropriate percentile of this distribution.  For
example, the 99% one-day VaR would represent the 10th worst
outcome from Demeter?s simulated profit and loss series.

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

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

The Partnership?s Value at Risk in Different Market Sectors
The following table indicates the VaR associated with the
Partnership?s open positions as a percentage of total Net Assets
by primary market risk category at June 30, 2006 and 2005.  At
June 30, 2006 and 2005, the Partnership?s total capitalization
was approximately $52 million and $79 million, respectively.

Primary Market	        June 30, 2006	     June 30, 2005
Risk Category		   Value at Risk		Value at Risk
Currency				  (1.84)%			    (4.03)%

The VaR for a market category represents the one-day downside
risk for the aggregate exposures associated with this market
category.  Because the business of the Partnership is the
speculative trading of futures, forwards, and options, the
composition of its trading portfolio can change significantly
over any given time period, or even within a single trading day,
which could positively or negatively materially impact market
risk as measured by VaR.
<page> The table below supplements the quarter-end VaR set forth
above by presenting the Partnership?s high, low, and average VaR,
as a percentage of total Net Assets for the four quarter-end
reporting periods from July 1, 2005 through June 30, 2006.

Primary Market Risk Category        High      Low      Average
Currency   					(2.74)%	(1.45)%	(2.11)%

Limitations on Value at Risk as an Assessment of Market Risk
VaR models permit estimation of a portfolio?s aggregate market
risk exposure, incorporating a range of varied market risks;
reflect risk reduction due to portfolio diversification or hedging
activities; and can cover a wide range of portfolio assets.
However, VaR risk measures should be viewed in light of the
methodology?s limitations, which include, but may not be limited
to the following:
*	past changes in market risk factors will not always result in
accurate predictions of the distributions and correlations of
future market movements;
*	changes in portfolio value caused by market movements may
differ from those of the VaR model;
*	VaR results reflect past market fluctuations applied to current
trading positions while future risk depends on future
positions;


<page>
*	VaR using a one-day time horizon does not fully capture the
market risk of positions that cannot be liquidated or hedged
within one day; and
*	the historical market risk factor data used for VaR estimation
may provide only limited insight into losses that could be
incurred under certain unusual market movements.

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

The VaR tables provided present the results of the Partnership?s
VaR for its market risk exposures at June 30, 2005, and for the
four quarter-end reporting periods from July 1, 2005 through June
30, 2006.  VaR is not necessarily representative of the
Partnership?s historic risk, nor should it be used to predict the
Partnership?s future financial performance or its ability to
manage or monitor risk.  There can be no assurance that the
Partnership?s actual losses on a particular day will not exceed
the VaR amounts indicated above or that such losses will not
occur more than once in 100 trading days.




<page>
Non-Trading Risk
The Partnership has non-trading market risk on its foreign cash
balances.  The Partnership did not have any foreign currency
balances at June 30, 2006.
The Partnership also maintains a substantial portion of its
available assets in cash at Morgan Stanley DW; as of June 30,
2006, such amount is equal to approximately 102% of the
Partnership?s net asset value.  A decline in short-term interest
rates would result in a decline in the Partnership?s cash
management income. This cash flow risk is not considered to be
material.

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

Qualitative Disclosures Regarding Primary Trading Risk Exposures
The following qualitative disclosures regarding the Partnership?s
market risk exposures - except for (A) those disclosures that are
statements of historical fact and (B) the descriptions of how the
Partnership manages its primary market risk exposures -
constitute forward-looking statements within the meaning of
<page> 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 expro-
priations, illiquid markets, the emergence of dominant
fundamental factors, political upheavals, changes in historical
price relationships, an influx of new market participants,
increased regulation, and many other factors could result in
material losses, as well as in material changes to the risk
exposures and the risk management strategies of the Partnership.
Investors must be prepared to lose all or substantially all of
their investment in the Partnership.

The following was the only trading risk exposure of the
Partnership at June 30, 2006.  It may be anticipated, however,
that market exposure will vary materially over time.

Currency.  The Partnership?s currency market exposure at June 30,
2006 was to exchange rate fluctuations, primarily fluctuations
which disrupt the historical pricing relationships between
different currencies and currency pairs.  Interest rate changes,
as well as political and general economic conditions influence
<page> these fluctuations.  The Partnership trades a number of
currencies.  At June 30, 2006, the Partnership?s primary exposure
was to outright U.S. dollar positions.  Outright positions
consist of the U.S. dollar vs. other currencies.  These other
currencies include major and minor currencies.  Demeter does not
anticipate that the risk associated with the Partnership?s
currency trades will change significantly in the future.

Qualitative Disclosures Regarding Non-Trading Risk Exposure
At June 30, 2006, there was no non-trading risk exposure because
the Partnership did not have any foreign currency balance.

Qualitative Disclosures Regarding Means of Managing Risk Exposure
The Partnership and the Trading Managers, separately, attempt to
manage the risk of the Partnership?s open positions in essentially
the same manner in all market categories traded.  Demeter attempts
to manage market exposure by diversifying the Partnership?s assets
among different Trading Managers in a multi-manager Partnership,
each of whose strategies focus on different market sectors and
trading approaches, and by monitoring the performance of the
Trading Managers daily.  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.

<page> Demeter monitors and controls the risk of the
Partnership?s non-trading instrument, cash.  Cash is the only
Partnership invest-ment directed by Demeter, rather than the
Trading Managers.

Item 4.	CONTROLS AND PROCEDURES
(a)	As of the end of the period covered by this quarterly
report, the President and Chief Financial Officer of
Demeter, the general partner of the Partnership, have
evaluated the effectiveness of the Partnership?s disclosure
controls and procedures (as defined in Rules 13a?15(e) and
15d?15(e) of the Exchange Act), and have judged such
controls and procedures to be effective.

(b)	There have been no material changes during the period
covered by this quarterly report in the Partnership?s
internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) of the Exchange Act) or in
other factors that could significantly affect these controls
subsequent to the date of their evaluation.
<page> PART II.  OTHER INFORMATION

Item 1A. RISK FACTORS

Information regarding risk factors appears in Item 2.
?Management?s Discussion and Analysis of Financial Condition and
Results of Operations? and Item 3.  ?Quantitative and Qualitative
Disclosures about Market Risk? of this Form 10-Q.  There have been
no other material changes from the risk factors previously
referenced in the Partnership?s Report on Form 10-K for the fiscal
year ended December 31, 2005 and the Partnership?s Report on Form
10-Q for the quarter ended March 31, 2006.

Item 5. OTHER INFORMATION
Management.  In connection with the election of new directors to
the Board of Directors of Demeter, the following information
updates the disclosures in the Partnership?s Form 8-K filed on
March 27, 2006 and Form 8-K filed on April 5, 2006:

On May 11, 2006, the National Futures Association approved Mr.
Walter Davis, Mr. Michael McGrath, and Mr. Andrew Saperstein as
directors of Demeter.



<page> On July 20, 2006, the National Futures Association
approved Mr. Walter Davis as an associated person of Demeter.

Effective July 21, 2006 Dean Witter Cornerstone Fund IV was
renamed to Morgan Stanley Cornerstone Fund IV L.P.

Item 6.  EXHIBITS

31.01	Certification of President of Demeter Management
Corporation, the general partner of the Partnership,
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
31.02	Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership, pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.
32.01	Certification of President of Demeter Management
Corporation, the general partner of the Partnership,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
32.02	Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.









<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.



                        Morgan Stanley Cornerstone Fund IV L.P.
                          (Registrant)

                        By:   Demeter Management Corporation
                              (General Partner)

August 14, 2006         By:/s/ Kevin Perry
                               Kevin Perry
                               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.


















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