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

	FORM 10-K

[X]	Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [No Fee Required]
For the year ended December 31, 2005 or

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

Commission File Number 0-31563

	MORGAN STANLEY SPECTRUM CURRENCY L.P.

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

		DELAWARE		        				13-4084211
(State or other jurisdiction of				  (I.R.S. Employer
incorporation or organization)			 	  	  Identification No.)

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

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

Securities registered pursuant to Section 12(b) of the Act:
									   Name of each exchange
    Title of each class 						   on which registered

		None								   None

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

	Units of Limited Partnership Interest

	(Title of Class)

Indicate by check-mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act.  Yes          No  X

Indicate by check-mark if the registrant is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act.  Yes          No  X

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

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

Indicate by check-mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer.  See definitions 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 Act).  Yes       No  X

State the aggregate market value of the Units of Limited Partnership Interest
held by non-affiliates of the registrant.  The aggregate market value shall be
computed by reference to the price at which Units were sold as of the last
business day of the registrant?s most recently completed second fiscal quarter:
$245,822,083 at June 30, 2005.

	DOCUMENTS INCORPORATED BY REFERENCE
	(See Page 1)


	<page> <table> MORGAN STANLEY SPECTRUM CURRENCY L.P.
	INDEX TO ANNUAL REPORT ON FORM 10-K
	DECEMBER 31, 2005
                      <caption>                                 Page No.

							<c>
DOCUMENTS INCORPORATED BY REFERENCE. . . . . . . . . . . . . 	. . . .  1

Part I .

	Item 1.   Business. . . . . . . . . . . . . . . . . . . . . . . . 2-5

	Item 1A.  Risk Factors. . . . . . . . . . . . . . . . . . . . . . . 6

	Item 1B.  Unresolved Staff Comments . . . . . . . . . . . . . . . . 6

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

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

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

Part II.

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

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

	Item 7.		Management?s Discussion and Analysis of Financial
				Condition and Results of Operations. . . . . . . . . .	10-30

	Item 7A. Quantitative and Qualitative Disclosures About
		         Market Risk . . . . . . . . . . . . . . . . . . . . .	30-41

	Item 8.  Financial Statements and Supplementary Data. . . . . . . .41

	Item 9.		Changes in and Disagreements with Accountants on
				Accounting and Financial Disclosure. . . . . . . . . .	. .41

	Item 9A. Controls and Procedures . . . . . . . . . . . . . . . .42-44

	Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . 44

Part III.

	Item 10.		Directors and Executive Officers of the Registrant . .	45-50

	Item 11. Executive Compensation . . . . . . . . . . . . . . . . . .50

	Item 12.		Security Ownership of Certain Beneficial Owners
				and Management. .  . . . . . . . . . . . . . . . . . .	. .51
	Item 13.	 Certain Relationships and Related Transactions . . . . . .51
	Item 14.	 Principal Accounting Fees and Services . . . . . . . . 	51-53
Part IV.

	Item 15.		Exhibits and Financial Statement Schedules . . . . . .	54-55

</table>




<page>



	DOCUMENTS INCORPORATED BY REFERENCE


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



         Documents Incorporated                  Part of Form l0-K


   Partnership?s Prospectus dated
   April 25, 2005 	       	 I

   Partnership's Supplement to
   the Prospectus dated December 15, 2005			 I

   Annual Report to Morgan Stanley
   Spectrum Series Limited
   Partners for the year ended
   December 31, 2005		II, III, and IV
























<page> PART I
Item 1.  BUSINESS


(a) General Development of Business. Morgan Stanley Spectrum Cur-
rency L.P. (the "Partnership") is a Delaware limited partnership
organized in 1999 to engage primarily in the speculative trading
of futures contracts, options on futures contracts, and forward
contracts in global currency markets.  The Partnership commenced
trading operations on July 3, 2000.  The Partnership is one of the
Morgan Stanley Spectrum series of funds, comprised of the
Partnership,  Morgan Stanley Spectrum Global Balanced L.P., Morgan
Stanley Spectrum Strategic L.P., Morgan Stanley  Spectrum Select
L.P., and Morgan Stanley Spectrum Technical L.P. (collectively,
the ?Spectrum Series?).

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. ?).  Demeter, Morgan Stanley
DW, and MS & Co. are wholly-owned
subsidiaries of Morgan Stanley.  The trading advisors to the
Partnership are John W. Henry & Company, Inc. and Sunrise Capital
Partners, LLC (individually, a ?Trading Advisor?, or collectively,
the ?Trading Advisors?).


<page> Units of limited partnership interest (?Unit(s)?) are sold
at monthly closings at a purchase price equal to 100% of the net
asset value per Unit as of the close of business on the last day
of each month.

The managing underwriter for the Partnership is Morgan Stanley DW.

The Partnership began the year at a net asset value per Unit of
$14.41 and returned -18.3% to $11.78 on December 31, 2005.  For a
more detailed description of the Partnership's business see
subparagraph (c).

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

(c) Narrative Description of Business.  The Partnership is in the
business of speculative trading of futures, forwards, and options,
pursuant to trading instructions provided by the Trading Advisors.
For a detailed description of the different facets of the
Partnership's business, see those portions of the Partnership's


<page> prospectus, dated April 25, 2005 (the ?Prospectus?), and
the Partnership's supplement to the Prospectus dated December 15,
2005 (the ?Supplement?), incorporated by reference in this Form
10-K, set forth below.

	Facets of Business
	1.	Summary	1.	"Summary" (Pages 1-9 of
			 the Prospectus and Page
			 S-1 of the Supplement).

	2.	Futures, Options, and	2.	"The Futures, Options, and
		Forwards Markets		 Forwards Markets" (Pages
				 147-151 of the Prospectus).

	3.	Partnership's Trading	3.	?Use of Proceeds? (Pages
		Arrangements and		 26-28 of the Prospectus
		Policies		 and Page S-5 of the
				 Supplement).  ?The Trading
 Advisors? (Pages 70-125 of
				 the Prospectus and Pages
				 S-33 - S-40 of the
				 Supplement).

	4.	Management of the Part-	4.	"The Trading Advisors -
	 	nership		 Management Agree-
				 ments? (Page 70 of the
				 Prospectus), "The
				 General Partner" (Pages
				 66-69 of the Prospectus
				 and Page S-32 of the
				 Supplement), ?The Com-
 modity Brokers? (Pages
 127-128 of the Prospectus)
 and ?The Limited
 Partnership Agreements?
(Pages 130-133 of the
 Prospectus).








<page>
	5.	Taxation of the Partner-	5. 	?Material Federal Income
		ship?s Limited Partners		 Tax  Considerations? and
				?State and Local Income Tax
					 Aspects? (Pages 139-145 of
 the Prospectus and Page
 S-42 of the Supplement).

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

(e) Available Information.  The Partnership files an annual report
on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K, and all amendments to these reports with the Securities
and Exchange Commission (?SEC?).  You may read and copy any
document filed by the Partnership at the SEC?s Public Reference
Room at 100 F Street, N.E., Washington, D.C.  20549. Please call
the SEC at 1-800-SEC-0330 for information on Public Reference
Room. The Partnership does not maintain an internet website,
however, the SEC maintains a website that contains annual,
quarterly, and current reports, proxy statements, and other
information that issuers (including the Partnership) file
electronically with the SEC.  The SEC?s website address is
http://www.sec.gov.



<page>
Item 1A.  RISK FACTORS
The Partnership is in the business of speculative trading of
futures, forwards, and options.  For a detailed description of the
risks that may affect the business of the Partnership or the
limited partnership interests offered by the Partnership, see
those portions of the Partnership?s Prospectus and the
Partnership?s Supplement, incorporated by reference in this Form
10-K, set forth in the ?Risk Factors? section of the Prospectus
at pages 10-15 and the ?Risk Factors? section of the Supplement
at pages  S-2 ? S-4.




Item 1B.  UNRESOLVED STAFF COMMENTS
Not applicable.


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


Item 3.  LEGAL PROCEEDINGS
None.

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

<page> PART II

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


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

(b) Holders.  The number of holders of Units at December 31, 2005
was approximately 27,706.

(c) Distributions. No distributions have been made by the
Partnership since it commenced trading operations on July 3, 2000.
Demeter has sole discretion to decide what distributions, if
any, shall be made to investors in the Partnership. Demeter
currently does not intend to make any distributions of the
Partnership?s profits.

(d) Securities Sold; Consideration. Units are continuously sold
at monthly closings at a purchase price equal to 100% of the net
asset value per Unit as of the close of business on the last day
of each month.

The aggregate price of the Units sold through December 31, 2005
was $337,372,764.


<page>
(e) Underwriter.  The managing underwriter for the Partnership is
Morgan Stanley DW.

(f) Use of Proceeds.
					SEC
Registration Statement on Form S-1  Units Registered   Effective Date
File Number

Initial Registration	12,000,000.000	    March 6, 2000	333-90485
Additional Registration	1,000,000.000		April 30, 2002	333-84654
Additional Registration	14,000,000.000 	  April 28, 2003	      333-104004
Additional Registration	  25,000,000.000	April 28, 2004	333-113398
  Total Units Registered	 52,000,000.000

Units sold through 12/31/05   	  25,620,364.700
Units unsold through 12/31/05   26,379,635.300

Since no expenses are chargeable against proceeds, 100% of the
proceeds of the offering have been applied to the working capital
of the Partnership for use in accordance with the ?Use of
Proceeds? section of the Prospectus and the Supplement included as
part of the above referenced Registration Statements.











<page> <table>
Item 6.  SELECTED FINANCIAL DATA (in dollars)




		<caption>

                                   For the Years Ended December 31,
                       2005          2004        2003          2002   	    2001__


			<c>			<c>		<c>		<c>		<c>
Total Trading Results
including interest
income 			(34,033,766)	    2,632,707   28,185,655   16,183,891    7,353,454


Net Income (Loss)	      (49,703,859)  (11,908,707)   16,796,809   10,283,120    4,336,339


Net Income (Loss)
Per Unit (Limited
& General Partners)	     (2.63)        (1.25)         1.73         1.52         1.24


Total Assets		      216,070,006   277,046,143   192,464,641   98,379,320   49,112,223


Total Limited
Partners' Capital		206,199,270	  270,231,305   188,042,673   93,891,619   45,598,611


Net Asset Value
Per Unit 			     	11.78	  	  14.41         15.66        13.93        12.41







</table>

















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


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

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


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

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





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

There are no known material trends, favorable or unfavorable, that
would affect, nor any expected material changes to, the Partner-
ship?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 Advisors
and the ability of each Trading Advisor?s trading program to take
advantage of price movements in the futures, forwards, and options
markets.  The following presents a summary of the Partnership's
operations for each of the three years in the period ended
December 31, 2005, and a general discussion of its trading

<page>
activities during each period.  It is important to note, however,
that the Trading Advisors trade in various markets at different
times and that prior activity in a particular market does not mean
that such market will be actively traded by the Trading Advisors
or will be profitable in the future.  Consequently, the results of
operations of the Partnership are difficult to discuss other than
in the context of the Trading Advisors' trading activities on
behalf of the Partnership 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 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
<page> 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, and brokerage
fees expenses of the Partnership are recorded on an accrual basis.

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

The Partnership recorded totaling trading results including
interest income totaling $(34,033,766) and expenses totaling
$15,670,093, resulting in a net loss of $49,703,859 for the year
ended December 31, 2005.  The Partnership?s net asset value per
Unit decreased from $14.41 at December 31, 2004 to $11.78 at
December 31, 2005.  Total redemptions and subscriptions for the
year were $55,375,643 and $40,465,529, respectively, and the
Partnership?s ending capital was $208,486,757 at December 31,
2005, a decrease of $64,613,973 from ending capital at December
31, 2004 of $273,100,730.

The most significant trading losses of approximately 9.5%, 1.9%,
1.9%, 1.3% and 1.0%, respectively, resulted from positions in
<page> European currencies against the U.S. dollar.  Early in
the first quarter, losses resulted from long positions in the
British pound, Norwegian krone, euro, Czech koruna, and Polish
zloty versus the U.S. dollar after the U.S. dollar?s value
reversed sharply higher amid an increase in U.S. interest rates
and consumer prices.  The U.S. dollar?s value also advanced in
response to expectations that the Chinese government would
announce postponement of its re-valuation of the Chinese yuan.
During February, losses were incurred from short European
currency positions after the U.S. dollar?s value weakened in
response to concern for the considerable U.S. Current-Account
deficit as expressed by U.S. Federal Reserve Chairman Alan
Greenspan.  During early March, short European currency
positions continued to experience losses as their values moved
higher amid a sharp rise in German industrial production.
Further losses were recorded from newly established long
European currency positions versus the U.S. dollar as the U.S.
dollar?s value reversed sharply higher amid an increase in U.S.
interest rates and consumer prices.  During the second quarter,
long British pound positions incurred losses as the pound?s
value declined after British Prime Minister Tony Blair's Labour
Party won re-election with a reduced government majority, and
then moved lower later in the quarter on growing speculation
that the interest rate differential between the U.S. and the
<page> U.K. would tighten.  During July, long British pound
positions experienced additional losses as the value of the
pound dropped sharply on geopolitical concerns after a terror
attack on the London public transportation system.  During
August, short British pound positions incurred losses as the
value of the U.S. dollar declined amid higher crude oil prices,
lower durable goods orders, the U.S. trade imbalance, and
economic warnings from U.S. Federal Reserve Chairman Alan
Greenspan.  During September, losses were recorded from long
positions in the British pound, Norwegian krone, and Czech
koruna, as the value of the U.S. dollar advanced amid bolstered
expectations that the U.S. Federal Reserve would continue to
raise interest rates.  During the fourth quarter, long British
pound positions versus the U.S. dollar incurred further losses
as the pound?s value weakened after the Bank of England
indicated that a cut in its interest rates would likely take
place in March of 2006.  Short positions in European currencies,
particularly the euro, Norwegian krone, and Czech koruna, versus
the U.S. dollar also experienced losses as their values moved
higher in response to a rise in the euro-zone Organization for
Economic Cooperation & Development?s leading indicator of 106 in
August from a July figure of 105.5.  European currency values
also moved higher with the euro, which was boosted by
expectations that the European Central Bank might raise interest
rates.  Additional losses of approximately 7.0%, 2.9%, and 2.8%,
<page> respectively, were  recorded from positions in the South
African rand and both the Australian and New Zealand dollars
(collectively, the ?Commodity Currencies?).  During the first
quarter, losses stemmed from both long and short positions in
these currencies versus the U.S. dollar as the Commodity
Currencies values traded counter to the U.S. dollar.  During the
second quarter, long positions in the Australian dollar versus
the U.S. dollar incurred losses as the Australian dollar
declined amid falling gold prices.  During the third quarter,
short positions in the Australian and New Zealand dollars versus
the U.S. dollar recorded losses as the values of the Commodity
Currencies moved higher on strong economic data out of the
region.  During September, losses were recorded from long
Australian and New Zealand dollar positions as the value of the
U.S. dollar advanced amid bolstered expectations that the U.S.
Federal Reserve would continue to raise interest rates. Also
forcing the New Zealand dollar lower were fears for an economic
slow-down in New Zealand during 2006.  During October, long
positions in the Commodity Currencies versus the U.S. dollar
resulted in losses as their values weakened in response to
volatile gold prices.  The Australian dollar was also pressured
lower after the Reserve Bank of Australia kept its overnight
interest rate unchanged.


<page> During November, short positions in the South African
rand and Australian dollar incurred losses as their values
reversed higher on stronger gold prices.  Finally during
December, long positions in both the New Zealand and Australian
dollars experienced losses amid weaker-than-expected economic
growth data combined with a lack of confidence for further
interest rate hikes from the Reserve Bank of New Zealand.
Losses of approximately 2.9% were recorded primarily during the
first quarter from positions in the Singapore dollar versus the
U.S. dollar.  During February, long positions in the Singapore
dollar against the U.S. dollar incurred losses early in the
month as the U.S. dollar?s value benefited from positive
economic sentiment.  Newly established short Singapore dollar
positions also incurred losses later in the month after the U.S.
dollar weakened due to a larger-than-expected drop in January
leading economic indicators and news that South Korea?s Central
Bank planned to reduce its U.S. dollar currency reserves.
During March, long positions in the Singapore dollar versus the
U.S. dollar resulted in losses as the value of the U.S. dollar
reversed sharply higher amid an increase in U.S. interest rates
and U.S. consumer prices.  Positions in the Singapore dollar
against the U.S. dollar held during the third quarter also
contributed to losses.  A portion of the Partnership?s overall
losses for the year was offset by gains of approximately 12.5%

<page> from short positions in the Japanese yen against the U.S.
dollar.  During March, gains resulted as the U.S. dollar
advanced against the yen due to an increase in U.S. interest
rates.  Short Japanese yen positions held during the second
quarter also recorded gains as the yen?s value declined during
May and June in response to weak Japanese economic data.  During
July, gains resulted after the U.S. dollar?s value strengthened
against the yen on significant interest rate differentials
between the U.S. and Japan.  Market participants also drove the
U.S. dollar higher against the yen during July following the
release of strong U.S. economic data and news that the U.S.
Current-Account deficit had narrowed.  During September, short
Japanese yen positions profited after the yen?s value declined
in the wake of weak Japanese economic data.  During the fourth
quarter, short Japanese yen positions continued to record gains
as the yen?s value trended lower against the U.S. dollar after
the potential for higher U.S. interest rates continued to
bolster the value of the U.S. dollar.  The Japanese yen was also
pulled lower on investor sentiment that future action by the
Chinese government regarding further Chinese yuan re-valuation
was farther away than previously expected.  Additional gains of
approximately 1.4% resulted during the second quarter 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

<page> 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.

The Partnership recorded total trading results including interest
income totaling $2,632,707 and expenses totaling $14,541,414,
resulting in a net loss of $11,908,707 for the year ended December
31, 2004.  The Partnership?s net asset value per Unit decreased
from $15.66 at December 31, 2003 to $14.41 at December 31, 2004.
Total redemptions and subscriptions for the year were $20,575,860
and $115,529,377, respectively, and the Partnership?s ending
capital was $273,100,730 at December 31, 2004, an increase of
$83,044,810 from ending capital at December 31, 2003 of
$190,055,920.

The most significant trading losses of approximately 8.8% were
recorded from positions in the Japanese yen versus the U.S.
dollar.  Short yen positions against the U.S. dollar recorded

<page> losses during March, as the yen reversed higher due to
speculation that the Bank of Japan was relaxing its efforts to
weaken the yen.  After reversing to long yen positions, the U.S.
dollar surged upwards against most currencies during April
following the release of stronger-than-expected U.S. jobs data,
thereby causing additional losses.  The yen also came under
pressure from weakening efforts undertaken by the Japanese
government.  Short yen positions incurred losses during May as
the U.S. dollar?s value declined amid fears of potential
terrorist attacks, expanding energy prices, and the release of
weaker-than-expected U.S. economic data.  During June, short yen
positions experienced further losses due to the yen?s rise
prompted by better-than-anticipated improvements in Japanese
economic data.  The yen continued its rise later in the month in
response to speculation that the Bank of Japan would move to
raise interest rates amid further confirmation that Japan's
economic recovery was on track.  During August and September,
short yen positions also experienced losses as the U.S. dollar?s
value declined under pressure from concerns for the rate of U.S.
economic growth, soft economic data, and record-high oil prices.
Finally, long yen positions incurred losses during December as
the yen?s value declined early in the month due to weak Japanese
machinery orders and temporary U.S. dollar strength.  Additional
Partnership losses of approximately 4.1% resulted from positions

<page> in the British pound, primarily during the fourth
quarter.  During both October and November, short pound
positions generated losses as the pound?s value reversed higher
amid a decline in the U.S. dollar prompted by higher oil prices
and concerns for the growing U.S. Current-Account deficit.
During December, long pound positions recorded losses as the
pound?s value declined due to weaker-than-expected U.K. economic
data and the releases of dovish minutes from the Bank of
England's December meeting, which reflected the possibility for
future interest rate cuts.  Partnership losses of approximately
2.1% were experienced from short positions in the Mexican peso
versus the U.S. dollar, primarily during the first quarter, as
the  peso reversed higher in response to encouraging signs of a
recovery in the Mexican economy.  Partnership losses of
approximately 1.8% resulted during the first nine months of the
year from positions in the South African rand versus the U.S.
dollar.  During January and February, long rand positions
declined amid expectations for weaker gold prices caused by
improvements in the global economy.  During April, long South
African rand positions versus the U.S. dollar experienced
losses as the U.S. dollar?s value moved higher amid economic
optimism.  During May, short South African rand positions
incurred losses as the commodity-linked currency reversed higher
in response to rising gold prices.  During July, the U.S.

<page> dollar?s upward reversal was prompted by upbeat market
sentiment.  During August, long rand positions experienced
further losses as the rand?s value moved lower due to a
reduction in interest rates by the South African Reserve Bank.
Long positions in the Norwegian krone versus the U.S. dollar
incurred losses of approximately 1.4%, primarily during the
second and third quarter, as the value of the U.S. dollar
temporarily moved higher in response to growing confidence in
the U.S. economy.  A portion of the Partnership?s overall losses
for the year was offset by gains achieved primarily during the
fourth quarter from long positions in the euro, Swiss franc, and
Polish zloty versus the U.S. dollar of approximately 7.0%, 2.7%,
and 2.1%, respectively.  The U.S. dollar?s value trended lower
throughout the quarter amid rising oil prices, reports of
weaker-than-expected U.S. economic data, growing U.S. Current-
Account deficit, and the investment community?s perception that
the Bush Administration would not move to intervene in the U.S.
dollar?s decline.  Additional gains of approximately 2.3% and
1.9%, were recorded from long positions in the New Zealand
dollar and Brazilian real versus the U.S. dollar, respectively,
as both foreign currencies benefited from a weaker U.S. dollar
during the fourth quarter.  Additionally, the New Zealand
dollar?s value moved higher as it was propelled by stronger gold
prices.


<page> The Partnership recorded total trading results including
income interest totaling $28,185,655 and expenses totaling
$11,388,846, resulting in net income of $16,796,809 for the year
ended December 31, 2003.  The Partnership?s net asset value per
Unit increased from $13.93 at December 31, 2002 to $15.66 at
December 31, 2003.  Total redemptions and subscriptions for the
year were $13,573,717 and $90,673,376, respectively, and the
Partnership?s ending capital was $190,055,920 at December 31,
2003, an increase of $93,896,468 from ending capital at December
31, 2002 of $96,159,452.

The most significant trading gains of approximately 12.0% were
recorded from long positions in the euro versus the U.S. dollar
as the U.S. dollar?s value weakened throughout a majority of the
year.  Fears of a military conflict with Iraq, skepticism
regarding the likelihood of a U.S. economic recovery, and fears
of a potential terrorist attack resulted in gains from long euro
positions during January, April, and May.  A confluence of
factors during December including concerns regarding U.S. budget
and trade deficits, a dip in consumer confidence, an outbreak of
Mad Cow Disease in the U.S., and continued fears of a potential
terrorist attack forced the U.S. dollar to retreat further and
the euro to climb.  Additional gains of approximately 8.7%
resulted from long positions in the Australian dollar versus the

<page> U.S. dollar during April, May, and June and again during
November and December as the Australian currency strengthened in
response to continued weakness in the U.S. dollar, higher
interest rates in Australia relative to those in the U.S., and
higher gold prices.  Gains of approximately 3.8% were provided
by long positions in the South African rand versus the U.S.
dollar during April and December due to significant interest
rate differentials between the two countries, economic concerns
regarding U.S. budget and trade deficits, and fears of a
potential terrorist attack.  Smaller profits of approximately
2.5% were experienced from long positions in the New Zealand
dollar versus the U.S. dollar primarily during November as the
U.S. dollar?s value tumbled to a six-year low versus the New
Zealand currency.  A portion of the Partnership?s gains for the
year was offset by losses of approximately 2.4% from positions
in the British pound versus the U.S. dollar as the value of the
pound strengthened during April and May on expectations that the
Bank of England would likely leave interest rates unchanged and
upon the release of lower-than-expected unemployment data from
Great Britain.  During June, losses stemmed from positions in
the pound versus the U.S. dollar as the pound?s value increased
early in the month, amid expectations that the Bank of England
would likely leave interest rates unchanged, and then reversed
lower, after the British Finance Minister released positive

<page> comments regarding the U.K.?s entry prospects into the
European Union.  Additional losses of approximately 2.3%
resulted from short positions in the Swiss franc versus the U.S.
dollar during September as the U.S. dollar?s value declined amid
concerns about the strength of the U.S. economy and the
potential impact of a statement by the G-7 countries supporting
?more flexible exchange rates.? The G-7 countries consist of
France, the U.S., Britain, Germany, Japan, Italy, and Canada.

For an analysis of unrealized gains and (losses) by contract type
and a further description of 2005 trading results, refer to the
Partnership?s Annual Report to Limited Partners for the year ended
December 31, 2005, which is incorporated by reference to Exhibit
13.01 of this Form 10-K.

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

Market Risk.
Financial Instruments.  The Partnership is a party to financial
instruments with elements of off-balance sheet market and credit
risk.  The Partnership trades futures contracts, options on
futures contracts, and forward contracts in global currency
markets.  In entering into these contracts, the Partnership is
subject to the market risk that such contracts may be

<page> significantly influenced by market conditions, such as
interest rate volatility, resulting in such contracts being less
valuable. If the markets should move against all of the positions
held by the Partnership at the same time, and if the Trading
Advisors were unable to offset positions of the Partnership, the
Partnership could lose all of its assets and the limited partners
would realize a 100% loss.

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

Credit Risk.
In addition to market risk, in entering into futures, forward, and
options contracts there is a credit risk to the Partnership that
the counterparty on a contract will not be able to meet its
obligations to the Partnership. The ultimate counterparty or
guarantor of the Partnership for futures, forward, and options
contracts traded in the United States and most foreign exchanges

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

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

<page> exchange, if any, to the Partnership?s margin liability
thereon.

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

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



<page>
For additional information, see the ?Financial Instruments?
section under ?Notes to Financial Statements? in the Partnership?s
Annual Report to Limited Partners for the year ended December 31,
2005, which is incorporated by reference to Exhibit 13.01 of this
Form 10-K.

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

Item 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Introduction
The Partnership is a commodity pool engaged primarily in the
speculative trading of futures, forwards, and options.  The
market-sensitive instruments held by the Partnership are acquired
for speculative trading purposes only and, as a result, all or
substantially all of the Partnership?s assets are at risk of
trading loss.  Unlike an operating company, the risk of market-
sensitive instruments is inherent to the primary business activity
of the Partnership.

The futures, forwards, and options traded by the Partnership
involve varying degrees of related market risk.  Market risk is
often dependent upon changes in the level or volatility of

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

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

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

<page> causes the face value of the market sector instruments held
by the Partnership to typically be many times the total
capitalization of the Partnership.

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

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

Quantifying the Partnership?s Trading Value at Risk
The following quantitative disclosures regarding the Partner-
ship?s market risk exposures contain ?forward-looking statements?
within the meaning of the safe harbor from civil liability
provided for such statements by the Private Securities Litigation
Reform Act of 1995 (set forth in Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of


<page> 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 Advisors 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 risks including equity and commodity prices,
interest rates, foreign exchange rates, and correlation among
these variables. The hypothetical changes in portfolio value are
based on daily percentage changes observed in key market
indices or other market factors (?market risk factors?) to which
the portfolio is sensitive.  The one-day 99%  confidence level of
the Partnership?s VaR corresponds to the negative change in
portfolio value that, based on observed market risk factors, would
have been exceeded once in 100 trading days, or one day in 100.

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

<page> The Partnership?s Value at Risk in Different Market Sectors
The following table indicates the VaR associated with the
Partnership?s open positions as a percentage of total Net Assets
by primary market risk category at December 31, 2005 and 2004.  At
December 31, 2005 and 2004, the Partnership?s total capitali-
zation was approximately $208 million and $273 million,
respectively.

Primary Market         December 31, 2005     December 31, 2004
Risk Category	  	     Value at Risk	       Value at Risk
Currency				    (2.40)%		  	(3.93)%

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.

The table below supplements the December 31, 2005 VaR set forth
above by presenting the Partnership?s high, low, and average
VaR, as a percentage of total Net Assets for the four quarter-
end reporting periods from January 1, 2005 through December 31,
2005.


<page>
Primary Market Risk Category     High      Low      Average

Currency					  (3.97)%	  (2.40)%	  (3.00)%


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



<page>
*	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 exposure at December 31, 2004, and for the
four quarter-end reporting periods during calendar year 2005.  VaR
is not necessarily representative of the Partnership?s historic
risk, nor should it be used to predict the Partnership?s future
financial performance or its ability to manage or monitor risk.
There can be no assurance that the Partnership?s actual losses on
a particular day will not exceed the VaR amounts indicated above
or that such losses will not occur more than once in 100 trading
days.

Non-Trading Risk
The Partnership has non-trading market risk on its foreign cash
balances.  The Partnership did not have any foreign currency
balances at December 31, 2005.

<page>
The Partnership also maintains a substantial portion of its
available assets in cash at Morgan Stanley DW; as of December 31,
2005, 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 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
<page> strategies used and to be used by Demeter and the Trading
Advisors for managing such exposures, are subject to numerous
uncertainties, contingencies and risks, any one of which could
cause the actual results of the Partnership?s risk controls to
differ materially from the objectives of such strategies.
Government interventions, defaults and expropriations, illiquid
markets, the emergence of dominant fundamental factors, political
upheavals, changes in historical price relationships, an influx of
new market participants, increased regulation, and many other
factors could result in material losses, as well as in material
changes to the risk exposures and the risk management strategies
of the Partnership. Investors must be prepared to lose all or
substantially all of their investment in the Partnership.

The following was the only trading risk exposure of the
Partnership at December 31, 2005.  It may be anticipated,
however, that market exposure will vary materially over time.

Currency.  At December 31, 2005, the Partnership had market
exposure in the currency sector.  Exposure was to exchange rate
fluctuations, primarily fluctuations which disrupt the
historical pricing relationships between different currencies
and currency pairs.  Interest rate changes, as well as political
and general economic conditions influence these fluctuations.
<page> At December 31, 2005, the Partnership?s 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 December 31, 2005, there was no non-trading risk exposure
because the Partnership did not have any foreign currency
balances.

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

<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 Advisors.

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

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

Summary of Quarterly Results (Unaudited)

Quarter   Total Trading Results    		Net	       Net Income/
Ended	   including interest income   Income/(Loss)  (Loss) Per Unit

2005
March 31		$(48,508,520)		$(52,693,364)	   $  (2.75)
June 30		  25,201,383		  21,375,686 	       1.08
September 30	 (14,631,269) 	 	 (18,608,748)	      (0.96)
December 31	   3,904,640	 	     222,567	         -

Total			$(34,033,766)   	$(49,703,859) 	    $ (2.63)
2004
March 31		$(13,624,011)		$(17,153,573)	   $  (1.25)
June 30		 (19,529,341)		 (23,130,916) 	      (1.48)
September 30	 (19,847,451) 	 	 (23,397,173)	      (1.35)
December 31	  55,633,510	 	  51,772,955	       2.83

Total			$  2,632,707   		$(11,908,707) 	    $ (1.25)

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

None.


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

   (b)	There have been no material changes during the period
covered by this annual report in the Partnership?s
internal 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.


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

Management of Demeter (?Management?) is responsible for
establishing and maintaining adequate internal control over
financial reporting.  The internal control over financial
reporting is designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of

<page>
Financial Statements for external purposes in accordance with
generally accepted accounting principles.

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

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

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

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

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future

<page> periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Partnership?s
internal control over financial reporting as of December 31,
2005.  In making this assessment, Management used the criteria
set forth by the Committee of Sponsoring Organizations of the
Treadway Commission in Internal Control-Integrated Framework.
Based on our assessment and those criteria, Management believes
that the Partnership maintained effective internal control over
financial reporting as of December 31, 2005.

Deloitte & Touche LLP, the Partnership?s independent registered
public accounting firm, has issued an attestation report on
Management?s assessment of the Partnership?s internal control over
financial reporting and on the effectiveness of the Partnership?s
internal control over financial reporting.  This report, which
expresses an unqualified opinion on Management?s assessment and on
the effectiveness of the Partnership?s internal control over
financial reporting, appears under ?Report of Independent
Registered Public Accounting Firm? in the Partnership?s Annual
Report to Limited Partners for the year ended December 31, 2005.

Item 9B.  OTHER INFORMATION
None.

<page> PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

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

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

Effective May 1, 2005, Mr. Raymond A. Harris resigned his position
as a Director of Demeter.

Effective May 1, 2005, Mr. Todd Taylor resigned his position as a
Director of Demeter.

Effective May 1, 2005, Mr. William D. Seugling resigned his
position as a Director of Demeter.

Effective May 1, 2005, Ms. Louise M. Wasso-Jonikas resigned her
position as a Director of Demeter.

Mr. Jeffrey A. Rothman, age 44, is the Chairman of the Board of
Directors and President of Demeter. Mr. Rothman is the Managing
Director of Morgan Stanley Alternative Investments Group,
responsible for overseeing all aspects of the firm?s Managed
Futures Department.  Mr. Rothman has been with the Managed Futures

<page> Department for nineteen years.  Throughout his career, Mr.
Rothman has helped with the development, marketing, and
administration of approximately 40 commodity pools. Mr. Rothman is
an active member of the Managed Funds Association and has recently
served on its Board of Directors.  Mr. Rothman has a B.A. degree
in Liberal Arts from Brooklyn College, New York.

Mr. Richard A. Beech, age 54, is a Director of Demeter.  Mr. Beech
has been associated with the futures industry for over 25 years.
He has been at Morgan Stanley DW since August 1984, where he is
presently an Executive Director in the Fixed Income Department.
Mr. Beech began his career at the Chicago Mercantile Exchange,
where he became the Chief Agricultural Economist doing market
analysis, marketing, and compliance. Prior to joining Morgan
Stanley DW, Mr. Beech worked at two investment banking firms in
operations, research, managed futures, and sales management.  Mr.
Beech has a B.S. degree in Business Administration from Ohio State
University and an M.B.A. degree from Virginia Polytechnic
Institute and State University.

Ms. Shelley Hanan, age 45, is a Director of Demeter. Ms. Hanan
joined Morgan Stanley in 1984.  She eventually became the Regional
Manager of the Southwest for Private Wealth Management and a
Senior Representative for the Morgan Stanley Foundation in

<page> Southern California.  Her focus was senior relationship
management of the firm?s largest private clients in the Southwest.
Since January 2005, Ms. Hanan has held the position of Chief
Operating Officer of the U.S. Client Coverage Group and is a
Managing Director.  Ms. Hanan graduated from the University of
California at San Diego with a B.A. in Psychology.

Mr. Frank Zafran, age 51, is a Director of Demeter.  Mr. Zafran is
a Managing Director of Morgan Stanley and, in November 2005, was
named Managing Director of Wealth Solutions.  Previously, Mr.
Zafran was Chief Administrative Officer of Morgan Stanley?s Client
Solutions Division. Mr. Zafran joined the firm in 1979 and has
held various positions in Corporate Accounting and the Insurance
Department, including Senior Operations Officer ? Insurance
Division, until his appointment in 2000 as Director of 401(k) Plan
Services, responsible for all aspects of 401(k) Plan Services
including marketing, sales, and operations. Mr. Zafran received a
B.S. degree in Accounting from Brooklyn College, New York.

Mr. Douglas J. Ketterer, age 40, is a Director of Demeter.  Mr.
Ketterer is a Managing Director at Morgan Stanley and is head of
the Managed Money Group.  The Managed Money Group is comprised of
a number of departments (including the Alternative Investments
Group, Consulting Services Group, and Mutual Fund Department)
which offer products and services through Morgan Stanley?s Global

<page> Wealth Management Group.  Mr. Ketterer joined Morgan
Stanley in 1990 and has served in many roles in the corporate
finance/investment banking, asset management, and distribution
divisions of the firm.  Mr. Ketterer received his M.B.A. from New
York University?s Leonard N. Stern School of Business and his B.S.
in Finance from the University at Albany?s School of Business.

Mr. Harry Handler, age 47, is a Director of Demeter. Mr. Handler
serves as an Executive Director for Morgan Stanley in the Global
Wealth Management Group.  Mr. Handler works in the Investment
Solutions Division as Chief Infrastructure and Risk Officer.
Additionally, Mr. Handler also serves as Chairman of the Morgan
Stanley DW Best Execution Committee and manages the Global Wealth
Management Group Stock Lending business.  In his prior position,
Mr. Handler was a Systems Director in Information Technology, in
charge of Equity and Fixed Income Trading Systems along with the
Special Products, such as Unit Trusts, Managed Futures, and
Annuities.  Prior to his transfer to the Information Technology
Area, Mr. Handler managed the Foreign Currency and Precious Metals
Trading Desk for Dean Witter, a predecessor company to Morgan
Stanley.  He also held various positions in the Futures Division
where he helped to build the Precious Metals Trading Operation of
Dean Witter.  Before joining Dean Witter, Mr. Handler worked at
Mocatta Metals as an Assistant to the Chairman.  His roles at
Mocatta Metals included stints on the Futures Order Entry Desk and
the Commodities Exchange Trading Floor.  Additional work included

<page> building a computerized Futures Trading System and writing
a history of the company.  Mr. Handler graduated on the Dean?s
List from the University of Wisconsin-Madison with a B.A. degree
and a double major in History and Political Science.

Mr. Kevin Perry, age 36, is the Chief Financial Officer of
Demeter.  Mr. Perry currently serves as an Executive Director
and Controller within the Global Wealth Management Group at
Morgan Stanley.  Mr. Perry joined Morgan Stanley in October 2000
and is also Chief Financial Officer of Morgan Stanley Trust
National Association.  Prior to joining Morgan Stanley, Mr.
Perry worked as an auditor and consultant in the financial
services practice of Ernst & Young LLP from October 1991 to
October 2000.  Mr. Perry received a B.S. degree in Accounting
from the University of Notre Dame in 1991 and is a Certified
Public Accountant.

All of the foregoing directors have indefinite terms.

The Audit Committee
The Partnership is operated by its general partner, Demeter, and
does not have an audit committee.  The entire Board of
Directors of Demeter serves as the audit committee.  None of the

<page> directors are considered to be ?independent? as that term
is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities
Exchange Act of 1934, as amended.  The Board of Directors of
Demeter has determined that Mr. Kevin Perry is the audit committee
financial expert.

Code of Ethics
The Partnership has not adopted a code of ethics that applies to
the Partnership?s principal executive officer, principal financial
officer, principal accounting officer or controller, or persons
performing similar functions.  The Partnership is operated by its
general partner, Demeter.  The President, Chief Financial Officer,
and each member of the Board of Directors of Demeter are employees
of Morgan Stanley and are subject to the code of ethics adopted by
Morgan Stanley, the text of which can be viewed on Morgan
Stanley?s website at http://www.morganstanley.com/ourcommitment/
codeofconduct.html.

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


<page>
Item 12. 	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
		MANAGEMENT
(a)	Security Ownership of Certain Beneficial Owners ? At December
31, 2005, there were no persons known to be beneficial owners of
more than 5 percent of the Units.

(b)	Security Ownership of Management - At December 31, 2005,
Demeter owned 194,237.343 Units of general partnership interest,
representing a 1.10 percent interest in the Partnership.

(c)  Changes in Control ? None.

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Refer to Note 2 - "Related Party Transactions" of "Notes to
Financial Statements", in the accompanying Annual Report to
Limited Partners for the year ended December 31, 2005, which is
incorporated by reference to Exhibit 13.01 of this Form 10-K.  In
its capacity as the Partnership's retail commodity broker, Morgan
Stanley DW received commodity brokerage fees (paid and accrued by
the Partnership) of $10,921,579 for the year ended December 31,
2005.




<page> Item 14.  PRINCIPAL ACCOUNTING FEES AND SERVICES
Morgan Stanley DW, on behalf of the Partnership, pays all
accounting fees.  The Partnership reimburses Morgan Stanley DW
through the brokerage fees it pays, as discussed in the Notes to
Financial Statements in the Annual Report to the Limited Partners
for the year ended December 31, 2005.

(1) 	Audit Fees.  The aggregate fees for professional services
rendered by Deloitte & Touche LLP in connection with their audit
of the Partnership?s Financial Statements and review of the
Financial Statements included in the Quarterly Reports on Form
10-Q, audit of Management?s assessments on the effectiveness of
the internal control over financial reporting, and in connection
with statutory and regulatory filings were approximately $39,513
for the year ended December 31, 2005 and $39,713 for the year
ended December 31, 2004.

(2) 	Audit-Related Fees.  None.

(3)	Tax Fees.  The Partnership did not pay Deloitte & Touche LLP
any amounts in 2005 and 2004 for professional services in
connection with tax compliance, tax advice, and tax planning.  The
Partnership engaged another unaffiliated professional firm to
provide services in connection with tax compliance, tax advice,
and tax planning.
<page>
(4) All Other Fees.  None.

The Board of Directors of Demeter serves as the audit committee
with respect to the Partnership.  The Board of Directors of
Demeter has not established pre-approval policies and procedures
with respect to the engagement of audit or permitted non-audit
services rendered to the Partnership.  Consequently, all audit and
permitted non-audit services provided by Deloitte & Touche LLP
that are borne by Morgan Stanley DW through the brokerage fees
paid for by the Partnership are approved by Morgan Stanley?s Board
Audit Committee and the Board of Directors of Demeter.













<page>
PART IV
Item 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

1. Listing of Financial Statements
The following Financial Statements and report of independent
registered public accounting firm, all appearing in the
accompanying Annual Report to Limited Partners for the year
ended December 31, 2005, are incorporated by reference to
Exhibit 13.01 of this Form 10-K:
   -	Report of Deloitte & Touche LLP, independent registered
public accounting firm, for the years ended December 31,
2005, 2004, and 2003.

   -	Statements of Financial Condition, including the Schedules
of Investments, as of December 31, 2005 and 2004.

   -	Statements of Operations, Changes in Partners' Capital,
and Cash Flows for the years ended December 31, 2005,
2004, and 2003.

   -	Notes to Financial Statements.


With the exception of the aforementioned information and the
information incorporated in Items 7, 8, and 13, the Annual
Report to Limited Partners for the year ended December 31,
2005, is not deemed to be filed with this report.

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



<page> 3.	Exhibits
For the exhibits incorporated by reference or filed herewith
to this report, refer to Exhibit Index on Page  E-1 to E-4.
























<page>	SIGNATURES

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


				MORGAN STANLEY SPECTRUM CURRENCY L.P.
					(Registrant)

				BY:	Demeter Management Corporation,
					General Partner

March 31, 2006		BY: /s/	Jeffrey A. Rothman
					 	Jeffrey A. Rothman,
					  	President

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

Demeter Management Corporation.

BY: /s/ 	Jeffrey A. Rothman                    		March 31, 2006
	  	Jeffrey A. Rothman, President

    /s/    Richard A. Beech                      		March 31, 2006
           Richard A. Beech, Director

    /s/    Shelley Hanan                          		March 31, 2006
           Shelley Hanan, Director

    /s/    Frank Zafran		           		March 31, 2006
	    	Frank Zafran, Director

    /s/ 	Douglas J. Ketterer                 		March 31, 2006
	 	Douglas J. Ketterer, Director

    /s/	Harry Handler		                 	March 31, 2006
	  	Harry Handler, Director

    /s/  	Kevin Perry			                  	March 31, 2006
	    	Kevin Perry, Chief Financial Officer










      <page> 	EXHIBIT INDEX
ITEM

3.01	Form of Amended and Restated Limited Partnership
Agreement of the Partnership, is incorporated by
reference to Exhibit A of the Partnership?s
Prospectus, dated April 25, 2005, filed with the
Securities and Exchange Commission pursuant to Rule
424(b)(3) under the Securities Act of 1933 on April
29, 2005.

3.02	Certificate of Limited Partnership, dated October 20,
1999, is incorporated by reference to Exhibit 3.02 of
the Partnership?s Registration Statement on Form S-1
(File No. 333-90485) filed with the Securities and
Exchange Commission on November 5, 1999.

3.03	Certificate of Amendment of Certificate of Limited
Partnership, dated November 1, 2001, (changing its
name from Morgan Stanley Dean Witter Spectrum Currency
L.P.) is incorporated by reference to Exhibit 3.01 of
the Partnership?s Form 8-K (File No. 0-31563) filed
with the Securities and Exchange Commission on
November 1, 2001.

10.01	Management Agreement among the Partnership, Demeter,
and John W. Henry & Company, Inc., dated as of March
6, 2000, is incorporated by reference to Exhibit 10.01
of the Partnership?s Quarterly Report on Form 10-Q
(File No. 0-31563) filed with the Securities and
Exchange Commission on November 14, 2000.

10.01(a)	Amendment to Management Agreement, dated as of
November 30, 2000, among the Partnership, John W.
Henry & Company, Inc., and Demeter is incorporated by
reference to Exhibit 10.01 of the Partnership's Form
8-K (File No. 0-31563), filed with the Securities and
Exchange Commission on January 3, 2001.

10.02	Management Agreement among the Partnership, Demeter,
and Sunrise Capital Partners, LLC, dated as of March
6, 2000, is incorporated by reference to Exhibit 10.02
of the Partnership?s Quarterly Report on Form 10-Q
(File No. 0-31563) filed with the Securities and
Exchange Commission on November 14, 2000.



E-1
<page>
10.02(a)	Amendment to Management Agreement, dated as of
November 30, 2000, among the Partnership, Sunrise
Capital Partners, LLC, and Demeter is incorporated by
reference to Exhibit 10.02 of the Partnership's Form
8-K (File No. 0-31563), filed with the Securities and
Exchange Commission on January 3, 2001.

10.05		Amended and Restated Escrow Agreement among the
Partnership, Morgan Stanley Spectrum Select L.P.,
Morgan Stanley Spectrum Technical L.P., Morgan Stanley
Spectrum Strategic L.P., Morgan Stanley Spectrum
Global Balanced L.P., Morgan Stanley Spectrum
Commodity L.P., Morgan Stanley DW, and The Chase
Manhattan Bank, the escrow agent, dated as of March
10, 2000, is incorporated by reference to Exhibit
10.05 of the Partnership?s Registration Statement on
Form S-1 (File No. 333-90485) filed with the
Securities and Exchange Commission on November 5,
2001.
10.06	    Form of Subscription and Exchange Agreement and Power
of Attorney to be executed by each purchaser of Units
is incorporated by reference to Exhibit B of the
Partnership?s Prospectus, dated April 25, 2005, filed
with the Securities and Exchange Commission pursuant
to Rule 424(b)(3) under the Securities Act of 1933 on
April 29, 2005.
10.08	    Form of Subscription

executed by each purchaser of Units is incorporated by
reference to Exhibit C of the Partnership?s
Prospectus, dated April 25, 2005, filed with the
Securities and Exchange Commission pursuant to Rule
424(b)(3) under the Securities Act of 1933 on April
29, 2005.
10.09		Customer Agreement between the Partnership and Morgan
Stanley DW, dated as of June 30, 2000, is incorporated
by reference to Exhibit 10.01 of the Partnership?s
Form 8-K (File No. 0-31563) filed with the Securities
and Exchange Commission on November 1, 2001.



E-2
<page>
10.09(a)	Amendment No. 1 to the Amended and Restated Customer
Agreement between the Partnership and Morgan Stanley
DW Inc., dated July 1, 2005, is incorporated by
reference to Exhibit 10.09(a) of the Partnership?s
Form 10-Q (File No. 0-31563) filed with the Securities
and Exchange Commission on August 10, 2005.
10.10	 	Commodity Futures Customer Agreement between MS & Co.
and the Partnership, and acknowledged and agreed to by
Morgan Stanley DW, dated as of June 6, 2000, is
incorporated by reference to Exhibit 10.02 of the
Partnership?s Form 8-K (File No. 0-31563) filed with
the Securities and Exchange Commission on November 1,
2001.
10.11	 	Foreign Exchange and Options Master Agreement between
MS & Co. and the Partnership, dated as of June 30,
2000, is incorporated by reference to Exhibit 10.04 of
the Partnership?s Form 8-K (File No. 0-31563) filed
with the Securities and Exchange Commission on
November 1, 2001.

10.12		Securities Account Control Agreement among the
Partnership, MS & Co., and Morgan Stanley DW, dated as
of June 6, 2000, is incorporated by reference to
Exhibit 10.03 of the Partnership?s Form 8-K (File No.
0-31563) filed with the Securities and Exchange
Commission on November 1, 2001.

13.10		December 31, 2005 Annual Report to Limited Partners is
filed herewith.
31.01		Certification of President of Demeter Management
Corporation, the general partner of the Partnership
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
31.02		Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.





E-3
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.
E-4

<PAGE>

                                                                 Morgan Stanley
                                                                Spectrum Series

 December 31, 2005
 Annual Report


[LOGO] Morgan Stanley

<PAGE>

MORGAN STANLEY SPECTRUM SERIES

HISTORICAL FUND PERFORMANCE

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

<TABLE>
<CAPTION>
                                                                                                                    INCEPTION-
                                                                                                                     TO-DATE
                     1991    1992  1993   1994   1995 1996  1997 1998 1999    2000   2001   2002  2003 2004   2005    RETURN
FUND                  %       %     %      %      %    %     %    %    %       %      %      %     %    %      %        %
-------------------------------------------------------------------------------------------------------------------------------
<S>                <C>      <C>    <C>  <C>      <C>  <C>   <C>  <C>  <C>   <C>      <C>   <C>    <C>  <C>   <C>    <C>
Spectrum Currency.    --      --    --     --     --   --    --   --   --     11.7   11.1   12.2  12.4 (8.0) (18.3)   17.8
                                                                            (6 mos.)
-------------------------------------------------------------------------------------------------------------------------------
Spectrum Global
 Balanced.........    --      --    --   (1.7)   22.8 (3.6) 18.2 16.4  0.8    0.9    (0.3) (10.1) 6.2  (5.6)  4.2     52.3
                                        (2 mos.)
-------------------------------------------------------------------------------------------------------------------------------
Spectrum Select...   31.2   (14.4) 41.6  (5.1)   23.6  5.3  6.2  14.2 (7.6)   7.1     1.7   15.4  9.6  (4.7) (5.0)    174.5
                   (5 mos.)
-------------------------------------------------------------------------------------------------------------------------------
Spectrum Strategic    --      --    --    0.1    10.5 (3.5) 0.4  7.8  37.2   (33.1)  (0.6)  9.4   24.0  1.7  (2.6)    41.8
                                        (2 mos.)
-------------------------------------------------------------------------------------------------------------------------------
Spectrum Technical    --      --    --   (2.2)   17.6 18.3  7.5  10.2 (7.5)   7.8    (7.2)  23.3  23.0  4.4  (5.4)    123.6
                                        (2 mos.)
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
                    COMPOUND
                   ANNUALIZED
                     RETURN
FUND                   %
-----------------------------
<S>                <C>
Spectrum Currency.    3.0

-----------------------------
Spectrum Global
 Balanced.........    3.8

-----------------------------
Spectrum Select...    7.3

-----------------------------
Spectrum Strategic    3.2

-----------------------------
Spectrum Technical    7.5

-----------------------------
</TABLE>

<PAGE>

DEMETER MANAGEMENT CORPORATION

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

MORGAN STANLEY SPECTRUM SERIES
ANNUAL REPORT
2005

Dear Limited Partner:

  This marks the sixth annual report for Morgan Stanley Spectrum Currency L.P.,
the twelfth annual report for Morgan Stanley Spectrum Global Balanced L.P.,
Morgan Stanley Spectrum Strategic L.P., and Morgan Stanley Spectrum Technical
L.P., and the fifteenth annual report for Morgan Stanley Spectrum Select L.P.
The Net Asset Value per Unit for each of the five Morgan Stanley Spectrum funds
("Fund(s)") as of December 31, 2005 was as follows:

<TABLE>
<CAPTION>
                                                    % CHANGE
                    FUNDS                    N.A.V. FOR YEAR
                    ----------------------------------------
                    <S>                      <C>    <C>
                    Spectrum Currency        $11.78  (18.3)%
                    ----------------------------------------
                    Spectrum Global Balanced $15.23    4.2%
                    ----------------------------------------
                    Spectrum Select          $27.45   (5.0)%
                    ----------------------------------------
                    Spectrum Strategic       $14.18   (2.6)%
                    ----------------------------------------
                    Spectrum Technical       $22.36   (5.4)%
                    ----------------------------------------
</TABLE>

  Since its inception in July 2000, Spectrum Currency has increased by 17.8% (a
compound annualized return of 3.0%). Since their inception in November 1994,
Spectrum Global Balanced has increased by 52.3% (a compound annualized return
of 3.8%), Spectrum Strategic has increased by 41.8% (a compound annualized
return of 3.2%), and Spectrum Technical has increased by 123.6% (a compound
annualized return of 7.5%). Since its inception in August 1991, Spectrum Select
has increased by 174.5% (a compound annualized return of 7.3%).

  Detailed performance information for each Fund is located in the body of the
financial report. For each Fund, we provide a trading results by sector chart
that portrays trading gains and trading losses for the year in each sector in
which the Fund participates. In the case of Spectrum Currency, we provide the
trading gains and trading losses for the five major currencies in which the
Fund participates, and composite information for all other "minor" currencies
traded within the Fund.

<PAGE>

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

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

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

Sincerely,

/s/ Jeffrey A. Rothman
Jeffrey A. Rothman
Chairman of the Board of Directors and President
Demeter Management Corporation
General Partner for
Morgan Stanley Spectrum Currency L.P.
Morgan Stanley Spectrum Global Balanced L.P.
Morgan Stanley Spectrum Select L.P.
Morgan Stanley Spectrum Strategic L.P.
Morgan Stanley Spectrum Technical L.P.

<PAGE>

                      This page intentionally left blank.



<PAGE>

MORGAN STANLEY SPECTRUM CURRENCY L.P.

                                     [CHART]

                                        Year ended December 31, 2005
                                        ----------------------------
Australian dollar                                -2.95%
British pound                                    -9.48%
Euro                                             -1.86%
Japanese yen                                     12.46%
Swiss franc                                       1.40%
Minor currencies                                -12.86%



Note:Reflects trading results only and does not include fees or interest income.
     Minor currencies may include, but are not limited to, the South African
     rand, Thai baht, Greek drachma, Singapore dollar, Mexican peso, New
     Zealand dollar, Australian dollar, Polish zloty, Brazilian real, Norwegian
     krone, and Czech koruna.

FACTORS INFLUENCING ANNUAL TRADING LOSSES:
..  Losses resulted from positions in European currencies against the U.S.
   dollar. Early in the first quarter, losses resulted from long positions in
   the British pound, Norwegian krone, euro, Czech koruna, and Polish zloty
   versus the U.S. dollar after the U.S. dollar's value reversed sharply higher
   amid an increase in U.S. interest rates and consumer prices. The U.S.
   dollar's value also advanced in response to expectations that the Chinese
   government would announce postponement of its re-valuation of the Chinese
   yuan. During February, losses were incurred from short European currency
   positions after the U.S. dollar's value weakened in response to concern for
   the considerable U.S. Current-Account deficit as expressed by U.S. Federal
   Reserve Chairman Alan Greenspan. During early March, short European currency
   positions continued to experience losses as their values moved higher amid a
   sharp rise in German industrial production. Further losses were recorded
   from newly established long European currency positions versus the U.S.
   dollar as the U.S. dollar's value reversed sharply higher amid an increase
   in U.S. interest rates and consumer prices. During the second quarter, long
   British pound positions incurred losses as the pound's value declined after
   British Prime Minister Tony Blair's Labour Party won re-election with a
   reduced government majority, and then

<PAGE>

MORGAN STANLEY SPECTRUM CURRENCY L.P.

FACTORS INFLUENCING ANNUAL TRADING LOSSES: (continued)

 moved lower later in the quarter on growing speculation that the interest rate
  differential between the U.S. and the U.K. would tighten. During July, long
  British pound positions experienced additional losses as the value of the
  pound dropped sharply on geopolitical concerns after a terror attack on the
  London public transportation system. During August, short British pound
  positions incurred losses as the value of the U.S. dollar declined amid
  higher crude oil prices, lower durable goods orders, the U.S. trade
  imbalance, and economic warnings from U.S. Federal Reserve Chairman Alan
  Greenspan. During September, losses were recorded from long positions in the
  British pound, Norwegian krone, and Czech koruna, as the value of the U.S.
  dollar advanced amid bolstered expectations that the U.S. Federal Reserve
  would continue to raise interest rates. During the fourth quarter, long
  British pound positions versus the U.S. dollar incurred further losses as the
  pound's value weakened after the Bank of England indicated that a cut in its
  interest rates would likely take place in March of 2006. Short positions in
  European currencies, particularly the euro, Norwegian krone, and Czech
  koruna, versus the U.S. dollar also experienced losses as their values moved
  higher in response to a rise in the euro-zone Organization for Economic
  Cooperation & Development's leading indicator of 106 in August from a July
  figure of 105.5. European currency values also moved higher with the euro,
  which was boosted by expectations that the European Central Bank might raise
  interest rates.

..  Additional losses were recorded from positions in the South African rand and
   both the Australian and New Zealand dollars (collectively, the "Commodity
   Currencies"). During the first quarter, losses stemmed from both long and
   short positions in these currencies versus the U.S. dollar as the Commodity
   Currencies values traded counter to the U.S. dollar. During the second
   quarter, long positions in the Australian dollar versus the U.S. dollar
   incurred losses as the Australian dollar declined amid falling gold prices.
   During the third quarter, short positions in the Australian and New Zealand
   dollars versus the U.S. dollar recorded losses as the values of the
   Commodity Currencies moved higher on strong economic data out of the region.
   During September, losses were recorded from long Australian and New Zealand
   dollar positions as the value of the U.S. dollar advanced amid bolstered
   expectations that the U.S. Federal Reserve would continue to raise interest
   rates. Also forcing the New Zealand dollar lower were fears for an economic
   slow-down in New Zealand during 2006. During October, long positions in the
   Commodity Currencies versus the U.S. dollar resulted in losses as their
   values weakened in response to volatile gold prices. The Australian dollar
   was also pressured lower after the Reserve Bank of Australia kept its
   overnight interest rate

<PAGE>

MORGAN STANLEY SPECTRUM CURRENCY L.P.

FACTORS INFLUENCING ANNUAL TRADING LOSSES: (continued)

 unchanged. During November, short positions in the South African rand and
  Australian dollar incurred losses as their values reversed higher on stronger
  gold prices. Finally during December, long positions in both the New Zealand
  and Australian dollars experienced losses amid weaker-than-expected economic
  growth data combined with a lack of confidence for further interest rate
  hikes from the Reserve Bank of New Zealand.

..  Losses were also recorded primarily during the first quarter from positions
   in the Singapore dollar versus the U.S. dollar. During February, long
   positions in the Singapore dollar against the U.S. dollar incurred losses
   early in the month as the U.S. dollar's value benefited from positive
   economic sentiment. Newly established short Singapore dollar positions also
   incurred losses later in the month after the U.S. dollar weakened due to a
   larger-than-expected drop in January leading economic indicators and news
   that South Korea's Central Bank planned to reduce its U.S. dollar currency
   reserves. During March, long positions in the Singapore dollar versus the
   U.S. dollar resulted in losses as the value of the U.S. dollar reversed
   sharply higher amid an increase in U.S. interest rates and U.S. consumer
   prices. Positions in the Singapore dollar against the U.S. dollar held
   during the third quarter also contributed to losses.

FACTORS INFLUENCING ANNUAL TRADING GAINS:
..  Gains were achieved from short positions in the Japanese yen against the
   U.S. dollar. During March, gains resulted as the U.S. dollar advanced
   against the yen due to an increase in U.S. interest rate. Short Japanese yen
   positions held during the second quarter also recorded gains as the yen's
   value declined during May and June in response to weak Japanese economic
   data. During July, gains resulted after the U.S. dollar's value strengthened
   against the yen on significant interest rate differentials between the U.S.
   and Japan. Market participants also drove the U.S. dollar higher against the
   yen during July following the release of strong U.S. economic data and news
   that the U.S. Current-Account deficit had narrowed. During September, short
   Japanese yen positions profited after the yen's value declined in the wake
   of weak Japanese economic data. During the fourth quarter, short Japanese
   yen positions continued to record gains as the yen's value trended lower
   against the U.S. dollar after the potential for higher U.S. interest rates
   continued to bolster the value of the U.S. dollar. The Japanese yen was also
   pulled lower on investor sentiment that future action by the Chinese
   government regarding further Chinese yuan re-valuation was farther away than
   previously expected.

<PAGE>

MORGAN STANLEY SPECTRUM CURRENCY L.P.

FACTORS INFLUENCING ANNUAL TRADING GAINS: (continued)


..  Additional gains resulted during the second quarter 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>

MORGAN STANLEY SPECTRUM GLOBAL BALANCED L.P.

                                     [CHART]


                                   Year ended December 31, 2005
                                   ----------------------------
Currencies                                    -3.21%
Interest Rates                                 0.87%
Stock Indices                                  9.97%
Energies                                       0.29%
Metals                                         0.05%
Agriculturals                                 -0.62%



Note: Reflects trading results only and does not include fees or interest
      income.

FACTORS INFLUENCING ANNUAL TRADING GAINS:
..  Gains were recorded in the global stock indices sector, primarily during the
   third and fourth quarter of the year, from long positions in Pacific Rim and
   European stock index futures. During July, gains were recorded as prices
   increased amid positive economic data out of the U.S. and Japan. Prices
   continued to strengthen after China reformed its U.S. dollar currency peg
   policy. Finally, strong corporate earnings out of the European Union
   resulted in optimistic investor sentiment and pushed prices higher. During
   September, long Japanese stock index futures positions experienced gains as
   prices increased on positive comments from Bank of Japan Governor Toshihiko
   Fukui. Additional sector gains resulted from long positions in European
   stock index futures as prices rose amid declining oil prices and signs that
   the global economy could move forward despite Hurricane Katrina's
   devastation of the U.S. Gulf Coast. During the fourth quarter, long
   positions in Japanese and European stock index futures continued to benefit
   largely in response to falling energy prices, strong corporate earnings, and
   positive economic data out of the U.S. Strong investor optimism for
   continued improvement in the Japanese economy during 2006 also benefited
   prices.

<PAGE>

MORGAN STANLEY SPECTRUM GLOBAL BALANCED L.P.

FACTORS INFLUENCING ANNUAL TRADING GAINS: (continued)


..  Additional gains were recorded in the global interest rate markets primarily
   during the second and fourth quarter of the year from positions in European
   interest rate futures. During the second quarter, long positions in European
   interest rate futures achieved gains as prices moved higher amid concerns
   for euro-zone economic growth, speculation for reductions in European
   interest rates by the European Central Bank, and rejections of a proposed
   European Union constitution. During the fourth quarter, short positions in
   European interest rate futures initially benefited as prices weakened on
   concerns for potential increases in euro-zone interest rates by the European
   Central Bank. Prices continued to fall later during the quarter despite
   European Central Bank rates being left unchanged at 2%. Further selling
   pressure resulted following the European Central Bank President Jean-Claude
   Trichet's comments confirming that the European Central Bank would continue
   to gauge measurements sensitive to the risk of suddenly rising inflation.

..  The energy sector supplied gains, achieved primarily during August, from
   long futures positions in natural gas as prices first climbed higher on
   supply and demand concerns and then strengthened further after Hurricane
   Katrina struck the Gulf of Mexico.

..  Smaller gains recorded in metals occurred during the fourth quarter from
   long futures positions in copper as prices increased on news of strong
   demand from India, China, and the Middle East combined with weak global
   supplies.

FACTORS INFLUENCING ANNUAL TRADING LOSSES:
..  Losses were incurred in the currency markets primarily during the first and
   third quarter, as well as during December. During the first quarter, losses
   stemmed from long positions in the Singapore dollar versus the U.S. dollar
   as the U.S. dollar advanced further due to expectations that the Chinese
   government would announce postponement of Chinese yuan re-valuation for the
   foreseeable future. Additional losses resulted during January from positions
   in the U.S. dollar index, as well as positions in various foreign currencies
   versus the U.S. dollar, such as the British pound and Australian dollar.
   During January, short U.S. dollar positions versus the South African rand
   and euro also resulted in losses after the U.S. dollar's value reversed
   sharply higher amid conflicting economic data, improvements in U.S. trade
   deficit data, and speculation for higher U.S. interest rates. Short
   positions in the Singapore dollar and euro versus the U.S. dollar
   experienced losses during February as the U.S. dollar's value declined amid
   news of disappointing U.S. economic data and proposed U.S. dollar reductions
   in foreign central bank currency reserves. Losses resulted during March from
   long

<PAGE>

MORGAN STANLEY SPECTRUM GLOBAL BALANCED L.P.

FACTORS INFLUENCING ANNUAL TRADING LOSSES: (continued)

 positions in the Singapore dollar and euro versus the U.S. dollar, as well as
  from outright short positions in the U.S. dollar index, after the value of
  the U.S. dollar reversed sharply higher supported by market expectations for
  and the eventual increase in the U.S. federal funds rate by the U.S. Federal
  Reserve. The value of the U.S. dollar strengthened further following the
  release of a larger-than-expected increase in February consumer prices.
  During the third quarter, losses were incurred from long U.S. dollar
  positions against the Singapore dollar, New Zealand dollar, and euro as the
  value of the U.S. dollar declined amid higher crude oil prices, lower durable
  goods orders, the U.S. trade imbalance, and economic warnings from U.S.
  Federal Reserve Chairman Alan Greenspan. Additional losses stemmed from short
  euro cross- rate positions against the Norwegian krone after the euro's value
  moved higher in response to U.S. dollar weakness. During December, losses
  were incurred from short U.S. dollar positions against both the New Zealand
  and Australian dollars following weaker-than-expected economic growth data
  combined with a lack of confidence for further interest rate hikes from the
  Reserve Bank of New Zealand.

..  Smaller losses resulted in the agricultural markets from long futures
   positions in corn held during the first quarter after prices declined amid a
   stronger U.S. dollar and technically-based selling. Additional losses
   resulted from long futures positions in cocoa held during the third quarter
   as prices moved lower on new hopes for political stability in the Ivory
   Coast. Long futures positions in cotton experienced losses during May as
   prices moved lower on supply increases. During December, short futures
   positions in corn, soybeans and its related products incurred losses after
   prices advanced on reports of strong demand and news of weaker-than-expected
   supplies.

<PAGE>

                      This page intentionally left blank.

<PAGE>

MORGAN STANLEY SPECTRUM SELECT L.P.

                                     [CHART]


                                    Year ended December 31, 2005
                                    ----------------------------
Currencies                                    -5.51%
Interest Rates                                -0.91%
Stock Indices                                  4.35%
Energies                                       1.00%
Metals                                         3.35%
Agriculturals                                 -0.62%


Note: Reflects trading results only and does not include fees or interest
      income.

FACTORS INFLUENCING ANNUAL TRADING LOSSES:
..  Losses were recorded in the currency markets during the first and third
   quarter, as well as during December, from positions in foreign currencies
   versus the U.S. dollar. During January, long positions in the euro versus
   the U.S. dollar incurred losses after the U.S. dollar's value reversed
   sharply higher amid conflicting economic data, improvements in U.S. trade
   deficit numbers, and speculation for higher U.S. interest rates. The U.S.
   dollar's value also advanced in response to expectations that the Chinese
   government would announce postponement of Chinese yuan re-valuation for the
   foreseeable future. Additional losses were recorded during February from
   short positions in the euro versus the U.S. dollar as the U.S. dollar
   weakened in response to concern for the considerable U.S. Current-Account
   deficit expressed by the U.S. Federal Reserve Chairman Alan Greenspan. The
   value of the U.S. dollar was further weakened during the remainder of
   February by a larger-than-expected drop in January leading economic
   indicators and news that South Korea's Central Bank would be reducing its
   U.S. dollar currency reserves. Long European currency positions versus the
   U.S. dollar also recorded losses during March after the value of the U.S.
   dollar reversed sharply higher benefiting from higher U.S. interest rates
   and consumer prices. During August, long U.S. dollar positions against the
   British pound and euro resulted in losses as the value of the U.S. dollar

<PAGE>

MORGAN STANLEY SPECTRUM SELECT L.P.

FACTORS INFLUENCING ANNUAL TRADING LOSSES: (continued)

 declined amid higher crude oil prices, lower durable goods orders, the U.S.
  trade imbalance, and economic warnings from U.S. Federal Reserve Chairman
  Alan Greenspan. During December, the largest losses were incurred from long
  U.S. dollar positions versus the euro after the euro's value increased during
  mid-month on the possibility that the European Central Bank would raise
  interest rates in 2006. Additional losses resulted from long U.S. dollar
  positions versus the South African rand and both the Australian and New
  Zealand dollars as their values reversed higher with gold prices. Sector
  losses also stemmed from short U.S. dollar positions against the British
  pound.

..  Losses were also recorded in the global interest rate markets primarily
   during the third quarter from long positions in U.S. interest rate futures.
   During July, long positions experienced losses as prices declined following
   a rise in interest rates and after the U.S. Labor Department released its
   June employment report. During September, long positions incurred additional
   losses as prices weakened after it was revealed that measurements of
   Hurricane Katrina's economic impact were not weak enough to deter the U.S.
   Federal Reserve from its policy of raising interest rates.

..  Smaller losses were incurred in the agricultural markets primarily during
   the second and third quarter from long futures positions in wheat and corn.
   During April, long futures positions in wheat resulted in losses as prices
   fell in response to favorable weather in growing regions and reduced foreign
   demand. During July and August, long positions in corn futures experienced
   losses after prices weakened in response to higher silo rates and forecasts
   for supply increases.

<PAGE>

MORGAN STANLEY SPECTRUM SELECT L.P.



FACTORS INFLUENCING ANNUAL TRADING GAINS:
..  Gains established in the global stock index markets occurred during the
   third and fourth quarter from positions in Japanese and European stock index
   futures. During July, long positions in Pacific Rim and European stock index
   futures benefited after positive economic data out of the U.S. and Japan
   pushed global equity prices higher. Prices continued to strengthen after
   China reformed its U.S. dollar currency peg policy. Strong corporate
   earnings out of the European Union, Japan, and the U.S. resulted in
   optimistic investor sentiment and pushed prices further. During September,
   long positions in Japanese stock index futures experienced gains as prices
   increased on positive comments from Bank of Japan Governor Toshihiko Fukui,
   who said the Japanese economy was in the process of emerging from a soft
   patch. Additional sector gains resulted from long positions in European
   stock index futures as oil prices declined and investors embraced signs that
   the global economy could move forward despite Hurricane Katrina's
   devastation of the U.S. Gulf Coast. During the fourth quarter, long
   positions in Japanese and European stock index futures supplied gains as
   prices increased in response to falling energy prices, strong corporate
   earnings, and positive economic data out of the U.S. European stock markets
   also found support from the possibility of an end to U.S. interest rate
   increases.

..  Additional gains were recorded in metals during the third and fourth quarter
   from long futures positions in copper, aluminum, and zinc as prices
   strengthened amid supply tightness and strong demand from China, India, and
   the Middle East.

..  In the energy markets, gains were achieved primarily during August from long
   futures positions in natural gas, crude oil and its related products as
   prices rose on supply and demand concerns. After Hurricane Katrina struck
   the Gulf of Mexico, prices advanced further to touch record highs.

<PAGE>

                      This page intentionally left blank.

<PAGE>

MORGAN STANLEY SPECTRUM STRATEGIC L.P.

                                     [CHART]

                                Year ended December 31, 2005
                                ----------------------------
Currencies                               -11.19%
Interest Rates                             0.42%
Stock Indices                              1.26%
Energies                                   1.12%
Metals                                     6.87%
Agriculturals                              2.45%

Note: Reflects trading results only and does not include fees or interest
      income.

FACTORS INFLUENCING ANNUAL TRADING LOSSES:
..  Losses were incurred in the currency markets throughout much of the year
   from U.S. dollar positions versus a variety of foreign currencies. During
   January, long positions in the Japanese yen and Australian dollar versus the
   U.S. dollar incurred losses after the U.S. dollar's value reversed higher
   amid improvements in U.S. trade deficit numbers, higher U.S. interest rates,
   and China's reluctance to re-value the yuan. Short positions in the Swiss
   franc and Japanese yen against the U.S. dollar experienced losses during
   February as the U.S. dollar weakened amid concerns for the U.S.
   Current-Account deficit, a larger-than-expected drop in January leading
   economic indicators, and news that South Korea's Central Bank planned to
   reduce its U.S. dollar currency reserves. During March, long positions in
   the Canadian dollar, Japanese yen, Australian dollar, Swiss franc, and euro
   versus the U.S. dollar experienced losses after the U.S. dollar reversed
   higher, benefiting from increases in U.S. interest rates. During April,
   losses were recorded from positions in most major currencies relative to the
   U.S. dollar as the U.S. dollar's value remained volatile due to speculation
   on the U.S. Federal Reserve's interest rate policy, high oil prices, and
   weak U.S. economic data. During May, losses were recorded from long
   positions in the Japanese yen, Swiss franc, Canadian dollar, and Australian
   dollar versus the U.S. dollar as the U.S. dollar increased after China
   downplayed rumors of a move toward a flexible exchange rate. Later in the
   month, most

<PAGE>

MORGAN STANLEY SPECTRUM STRATEGIC L.P.

FACTORS INFLUENCING ANNUAL TRADING LOSSES: (continued)

 foreign currencies declined with the euro, which dropped in response to
  weaker-than-expected French economic data. During June, losses stemmed from
  positions in the Australian dollar versus the U.S. dollar as the value of the
  Australian currency moved without consistent direction amid a rise in gold
  prices during early June and concerns over global commodity demand in the
  latter part of the month. Additional losses stemmed from long Japanese yen
  positions during mid-June, as well as from short Canadian dollar positions.
  During July, losses were incurred from short positions in the euro and Swiss
  franc after the euro advanced amid new signals that the European Central Bank
  would stand firm against calls to cut interest rates. Additional losses
  followed the release of positive U.S. economic data, particularly from long
  positions in the British pound and Australian dollar against the U.S. dollar.
  During August, long U.S. dollar positions against the Canadian dollar,
  Australian dollar, Japanese yen, euro, and Swiss franc, recorded losses as
  the value of the U.S. dollar declined amid higher crude oil prices, lower
  durable goods orders, the U.S. trade imbalance, and economic warnings from
  U.S. Federal Reserve Chairman Alan Greenspan. During the fourth quarter,
  losses resulted from short positions in European currencies, particularly the
  euro and Swiss franc, versus the U.S. dollar as their values moved higher in
  response to a rise in the euro-zone Organization for Economic Cooperation &
  Development's leading indicator of 106 in August from a July figure of 105.5.
  European currency values also moved higher with the euro, which was boosted
  by expectations that the European Central Bank might raise interest rates
  next year. Additional losses resulted from long positions in the Canadian
  dollar versus the U.S. dollar. Finally, losses were also incurred from long
  positions in the Australian dollar versus the U.S. dollar, as the Australian
  dollar initially weakened in response to volatile gold prices, as well as
  from short U.S. dollar positions against the British pound.

FACTORS INFLUENCING ANNUAL TRADING GAINS:
..  Gains were recorded in metals primarily during the third and fourth quarter
   from long futures positions in base metals. During the third quarter, long
   futures positions in zinc, aluminum, and copper were profitable as prices
   strengthened amid supply tightness and strong demand from China. Long
   futures positions in zinc, aluminum, and copper continued to record gains
   during the fourth quarter as prices trended higher on news of consistently
   strong demand from India, China, and the Middle East combined with tight
   market supply.

<PAGE>

MORGAN STANLEY SPECTRUM STRATEGIC L.P.

FACTORS INFLUENCING ANNUAL TRADING GAINS: (continued)


..  In the agricultural markets, gains were recorded primarily during November
   and December from long futures positions in sugar after prices rose in
   response to divisions among European Union countries over a proposal to cut
   sugar export prices.

..  Gains were recorded in global stock indices primarily during July,
   September, and November from long positions in European and Pacific Rim
   stock index futures. During July, Japanese equity prices initially increased
   on positive economic data out of Japan and better-than-expected Japanese
   corporate earnings. Prices strengthened further after China reformed its
   U.S. dollar currency peg policy. During September, long positions in
   Japanese stock index futures experienced gains as prices increased on
   positive comments from Bank of Japan Governor Toshihiko Fukui, who said the
   Japanese economy was in the process of emerging from a soft patch. During
   November, long positions in European and Japanese stock index futures
   experienced gains as markets reacted positively to weak energy prices and
   strong U.S. equity prices. European markets prices were also pulled higher
   on strong corporate earnings, while Japanese equity markets were buoyed by
   optimism about the future of the Japanese economy.

..  Gains were recorded in the energy markets primarily during the third quarter
   from long futures positions in crude oil and its related products. During
   July, prices surged on possible supply disruptions in the Gulf of Mexico
   caused by Hurricane Dennis. Prices continued to move higher towards the end
   of the month in response to news of several refinery fires in Texas and
   Louisiana, declining U.S. inventories, and passage by the U.S. Congress of
   President George Bush's energy bill. During August, long futures positions
   continued to benefit as prices climbed higher on supply and demand concerns.
   After Hurricane Katrina struck the Gulf of Mexico, prices advanced further
   to touch new record highs.

<PAGE>

MORGAN STANLEY SPECTRUM STRATEGIC L.P.

FACTORS INFLUENCING ANNUAL TRADING GAINS: (continued)


..  Smaller gains were achieved in the global interest rate markets during the
   second and fourth quarter from positions in European and Japanese interest
   rate futures. During the second quarter, long positions in European interest
   rate futures positions benefited from rising prices supported by weakness in
   equity markets, disappointing European economic data, speculation that
   certain hedge funds experienced significant trading losses, rejections by
   the European Central Bank to alter interest rates, and concerns for the
   future of the European integration process. Later in the quarter, prices
   strengthened amid a sharp reduction in Swedish interest rates, the release
   of weaker-than-expected French consumer spending, and higher oil prices.
   Long Japanese interest rate futures positions also benefited after prices
   increased during April due to weaker Japanese equity markets and then
   continued to rise during June after the release of weak Japanese economic
   data. During the fourth quarter, short positions in short-term European
   interest rate futures experienced gains as euribor prices trended lower
   following the European Central Bank President Jean-Claude Trichet's comments
   confirming that the European Central Bank would continue to gauge
   measurements sensitive to the risk of suddenly rising inflation.

<PAGE>

MORGAN STANLEY SPECTRUM TECHNICAL L.P.

                                     [CHART]

                                  Year ended December 31, 2005
                                  ----------------------------
Currencies                                  -3.28%
Interest Rates                              -1.86%
Stock Indices                                3.88%
Energies                                     1.30%
Metals                                       5.61%
Agriculturals                               -4.41%

Note: Reflects trading results only and does not include fees or interest
      income.

FACTORS INFLUENCING ANNUAL TRADING LOSSES:
..  Losses were incurred in the agricultural markets throughout a majority of
   the year from futures positions in lean hogs, soybeans and its related
   products, wheat, and live cattle. During the first quarter, losses were
   experienced from long futures positions in lean hogs as prices weakened on
   news of a reduction in demand. Additional losses were experienced from short
   futures positions in the soybean complex and wheat as prices reversed higher
   on news of extremely cold weather in the U.S. growing regions and rumors of
   a reduction on world output during 2005. Long lean hog futures experienced
   further losses during March as prices declined on speculative selling.
   During the second quarter, long futures positions in lean hogs and live
   cattle also incurred losses as prices finished lower on news of a reduction
   in foreign export demand. Long futures positions in lean hogs continued to
   incur losses as prices moved lower during May in response to continued
   weakening demand. During the third quarter, losses stemmed from short
   futures positions in lean hogs and live cattle, as well as from long futures
   positions in the soybean complex. During July, short futures positions in
   live cattle recorded losses after prices reversed higher in response to
   lower slaughter rates. During August, losses resulted from long futures
   positions in the soybean complex as prices reversed lower due to forecasts
   for supply increases. Short futures positions in lean hogs also incurred
   losses

<PAGE>

MORGAN STANLEY SPECTRUM TECHNICAL L.P.

FACTORS INFLUENCING ANNUAL TRADING LOSSES: (continued)

 during August after prices rose in response to reports of lower slaughter
  rates. During September, losses stemmed from short futures positions in live
  cattle as prices rose amid higher slaughter rates caused by increases in
  market demand.

..  In the currency markets, losses resulted primarily during the first quarter,
   August, and December. During the first quarter, losses were recorded from
   long positions in the British pound and Swiss franc versus the U.S. dollar
   after the U.S. dollar's value advanced in response to speculation that China
   would move toward a flexible exchange and amid expectations for higher U.S.
   interest rates. During August, long U.S. dollar positions against the
   British pound and Swiss franc recorded losses as the value of the U.S.
   dollar declined amid higher crude oil prices, lower durable goods orders,
   the U.S. trade imbalance, and economic warnings from U.S. Federal Reserve
   Chairman Alan Greenspan. During December, long positions in both the
   Australian and New Zealand dollars versus the U.S. dollar experienced losses
   as the values of both of these commodity currencies decreased with higher
   gold prices.

..  Smaller losses were experienced in the global interest rate markets
   primarily during the third quarter and December from positions in Australian
   and U.S. interest rate futures. During July, long positions in U.S. interest
   rate futures resulted in losses as prices reversed lower following a rise in
   interest rates and after the U.S. Labor Department released its June
   employment report. During August, short positions in U.S. fixed-income
   futures incurred losses as prices reversed higher on worries about the
   global economic impact of Hurricane Katrina and growing speculation that the
   U.S. Federal Reserve would stop raising interest rates sooner than
   previously thought. During September, long positions in Australian bond
   futures recorded losses as prices declined after Australia's largest ever
   annual jobs gain initiated speculation that the Reserve Bank of Australia
   would perhaps reconsider its stance on interest rates. Additional losses
   stemmed from long positions in U.S. fixed-income futures. During December,
   short positions in U.S. interest rate futures experienced losses as prices
   advanced after the U.S. Federal Open Market Committee's policy meeting,
   where policy makers dropped references to "accommodation" in the
   accompanying policy statement causing bond market participants to speculate
   that the 18-month tightening cycle of U.S. interest rates was possibly
   nearing its end.

<PAGE>

MORGAN STANLEY SPECTRUM TECHNICAL L.P.


FACTORS INFLUENCING ANNUAL TRADING GAINS:
..  Gains were achieved in metals during the third and fourth quarter from long
   futures positions in copper, zinc, aluminum, gold, and silver. During the
   third quarter, long futures positions in base and precious metals recorded
   profits as prices moved higher in response to supply tightness and strong
   global demand. During the fourth quarter, long futures positions in base and
   precious metals continued to supply gains as prices trended higher on
   consistently strong demand from India, China, and the Middle East.

..  Gains were recorded in global stock indices primarily during the third
   quarter from long positions in European and Pacific Rim stock index futures
   as prices increased amid positive economic data out of the U.S. and Japan, a
   strong U.S. jobs number, and better-than-expected Japanese corporate
   earnings. Prices continued to strengthen after China reformed its U.S.
   dollar currency peg policy. Strong corporate earnings out of the European
   Union and the U.S. also pushed prices higher. During September, long
   positions in European stock index futures benefited as oil prices declined
   and investors embraced signs that the global economy could move forward
   despite Hurricane Katrina's devastation of the U.S. Gulf Coast. Additional
   gains resulted from long positions in Japanese stock index futures as prices
   increased on positive comments from Bank of Japan Governor Toshihiko Fukui,
   who said the Japanese economy was in the process of emerging from a soft
   patch.

..  In the energy markets, gains resulted primarily during August from long
   futures positions in crude oil, its related products, and natural gas as
   prices climbed higher throughout the month on supply and demand concerns.
   After Hurricane Katrina struck the Gulf of Mexico, prices advanced further
   to touch new record highs.

Managed futures investments are speculative, involve a high degree of risk, use
significant leverage, are generally illiquid, have substantial charges, are
subject to conflicts of interest, and are suitable only for the risk capital
portion of an investor's portfolio. Before investing in any managed futures
investment, qualified investors should read the prospectus or offering
documents carefully for additional information with respect to charges,
expenses, and risks. Past performance is no guarantee of future results.

<PAGE>

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<PAGE>

MORGAN STANLEY SPECTRUM SERIES

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

  Demeter Management Corporation ("Demeter"), the general partner of Morgan
Stanley Spectrum Currency L.P., Morgan Stanley Spectrum Global Balanced L.P.,
Morgan Stanley Spectrum Select L.P., Morgan Stanley Spectrum Strategic L.P.,
and Morgan Stanley Spectrum Technical L.P. (individually, a "Partnership", or
collectively, the "Partnerships"), is responsible for the management of the
Partnerships.

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

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

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

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

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

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

<PAGE>

  Management assessed the effectiveness of each Partnership's internal control
over financial reporting as of December 31, 2005. In making this assessment,
Management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission in Internal Control-Integrated
Framework. Based on our assessment and those criteria, Management believes that
each Partnership maintained effective internal control over financial reporting
as of December 31, 2005.

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

/s/ Jeffrey A. Rothman
Jeffrey A. Rothman
President

/s/ Kevin Perry
Kevin Perry
Chief Financial Officer

New York, New York
March 21, 2006

<PAGE>

MORGAN STANLEY SPECTRUM SERIES

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Limited Partners and the General Partner of Morgan Stanley Spectrum
Currency L.P., Morgan Stanley Spectrum Global Balanced L.P., Morgan Stanley
Spectrum Select L.P., Morgan Stanley Spectrum Strategic L.P., and Morgan
Stanley Spectrum Technical L.P.:

  We have audited management's assessment, included in the accompanying
Management's Report on Internal Control Over Financial Reporting, that Morgan
Stanley Spectrum Currency L.P., Morgan Stanley Spectrum Global Balanced L.P.,
Morgan Stanley Spectrum Select L.P., Morgan Stanley Spectrum Strategic L.P.,
and Morgan Stanley Spectrum Technical L.P. (collectively, the "Partnerships")
maintained effective internal control over financial reporting as of December
31, 2005, based on criteria established in Internal Control--Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission. The Partnerships' management is responsible for maintaining
effective internal control over financial reporting and for its assessment of
the effectiveness of internal control over financial reporting. Our
responsibility is to express an opinion on management's assessment and an
opinion on the effectiveness of the Partnerships' internal control over
financial reporting based on our audit.

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

  A company's internal control over financial reporting is a process designed
by, or under the supervision of, the company's principal executive and
principal financial officers, or persons performing similar functions, and
effected by the company's board of directors, management, and other personnel
to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A compa-

<PAGE>

ny's internal control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the company's assets that could have a
material effect on the financial statements.

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

  In our opinion, management's assessment that the Partnerships maintained
effective internal control over financial reporting as of December 31, 2005, is
fairly stated, in all material respects, based on the criteria established in
Internal Control--Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Also in our opinion, the Partnerships
maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2005, based on the criteria established in
Internal Control--Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission.

  We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the financial statements as of and
for the year ended December 31, 2005 of the Partnerships and our report dated
March 21, 2006 expressed an unqualified opinion on those financial statements.

/s/ Deloitte & Touche LLP

New York, New York
March 21, 2006

<PAGE>

MORGAN STANLEY SPECTRUM SERIES

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Limited Partners and the General Partner of Morgan Stanley Spectrum
Currency L.P., Morgan Stanley Spectrum Global Balanced L.P., Morgan Stanley
Spectrum Select L.P., Morgan Stanley Spectrum Strategic L.P., and Morgan
Stanley Spectrum Technical L.P. :

  We have audited the accompanying statements of financial condition of Morgan
Stanley Spectrum Currency L.P., Morgan Stanley Spectrum Global Balanced L.P.,
Morgan Stanley Spectrum Select L.P., Morgan Stanley Spectrum Strategic L.P.,
and Morgan Stanley Spectrum Technical L.P. (collectively, the "Partnerships"),
including the schedules of investments, as of December 31, 2005 and 2004, and
the related statements of operations, changes in partners' capital, and cash
flows for each of the three years in the period ended December 31, 2005. These
financial statements are the responsibility of the Partnerships' management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

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

  In our opinion, such financial statements present fairly, in all material
respects, the financial position of Morgan Stanley Spectrum Currency L.P.,
Morgan Stanley Spectrum Global Balanced L.P., Morgan Stanley Spectrum Select
L.P., Morgan Stanley Spectrum Strategic L.P., and Morgan Stanley Spectrum
Technical L.P. at December 31, 2005 and 2004, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2005, in conformity with accounting principles generally accepted
in the United States of America.


<PAGE>

  As discussed in Note 1, in 2005 the Partnerships modified their
classification of cash within the statements of financial condition and the
related statements of cash flows.

  We have also audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the effectiveness of the
Partnerships' internal control over financial reporting as of December 31,
2005, based on the criteria established in Internal Control--Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated March 21, 2006 expressed an unqualified opinion
on management's assessment of the effectiveness of the Partnerships' internal
control over financial reporting and an unqualified opinion on the
effectiveness of the Partnerships' internal control over financial reporting.

    /s/ Deloitte & Touche LLP
New York, New York
March 21, 2006

<PAGE>

MORGAN STANLEY SPECTRUM CURRENCY L.P.
STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                                         DECEMBER 31,
                                                                   ------------------------
                                                                       2005        2004
                                                                   ------------ -----------
                                                                        $           $
<S>                                                                <C>          <C>
                                         ASSETS
Equity in futures interests trading accounts:
 Unrestricted cash                                                  207,952,625 253,222,567
 Restricted cash                                                        --          169,680
                                                                   ------------ -----------
   Total Cash                                                       207,952,625 253,392,247
 Net unrealized gain on open contracts (MS & Co.)                     6,202,194  16,647,953
                                                                   ------------ -----------
   Total Trading Equity                                             214,154,819 270,040,200
Subscriptions receivable                                              1,355,204   6,690,404
Interest receivable (Morgan Stanley DW)                                 559,983     315,539
                                                                   ------------ -----------
   Total Assets                                                     216,070,006 277,046,143
                                                                   ============ ===========

                            LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Redemptions payable                                                   6,346,278   2,499,153
Accrued brokerage fees (Morgan Stanley DW)                              862,131   1,007,999
Accrued management fees                                                 374,840     438,261
                                                                   ------------ -----------
   Total Liabilities                                                  7,583,249   3,945,413
                                                                   ------------ -----------
PARTNERS' CAPITAL
Limited Partners (17,508,991.514 and 18,755,238.476 Units,
 respectively)                                                      206,199,270 270,231,305
General Partner (194,237.343 and 199,150.709 Units, respectively)     2,287,487   2,869,425
                                                                   ------------ -----------
   Total Partners' Capital                                          208,486,757 273,100,730
                                                                   ------------ -----------
   Total Liabilities and Partners' Capital                          216,070,006 277,046,143
                                                                   ============ ===========
NET ASSET VALUE PER UNIT                                                  11.78       14.41
                                                                   ============ ===========
</TABLE>
STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                           FOR THE YEARS ENDED DECEMBER 31,
                                       ---------------------------------------
                                            2005          2004         2003
                                       -------------  -----------  -----------
                                             $             $            $
 <S>                                   <C>            <C>          <C>
 INVESTMENT INCOME
   Interest income (Morgan Stanley
    DW)                                    5,391,828    2,064,338    1,006,410
                                       -------------  -----------  -----------
 EXPENSES
   Brokerage fees (Morgan Stanley DW)     10,921,579   10,011,029    6,109,327
   Management fees                         4,748,514    4,352,622    2,656,229
   Incentive fees                            --           177,763    2,623,290
                                       -------------  -----------  -----------
    Total Expenses                        15,670,093   14,541,414   11,388,846
                                       -------------  -----------  -----------
 NET INVESTMENT LOSS                     (10,278,265) (12,477,076) (10,382,436)
                                       -------------  -----------  -----------
 TRADING RESULTS
 Trading profit (loss):
   Realized                              (28,979,835) (11,200,944)  27,952,154
   Net change in unrealized              (10,445,759)  11,769,313     (772,909)
                                       -------------  -----------  -----------
    Total Trading Results                (39,425,594)     568,369   27,179,245
                                       -------------  -----------  -----------
 NET INCOME (LOSS)                       (49,703,859) (11,908,707)  16,796,809
                                       =============  ===========  ===========
 NET INCOME (LOSS) ALLOCATION:
 Limited Partners                        (49,177,845) (11,774,885)  16,514,538
 General Partner                            (526,014)    (133,822)     282,271
 NET INCOME (LOSS) PER UNIT:
 Limited Partners                              (2.63)       (1.25)        1.73
 General Partner                               (2.63)       (1.25)        1.73
</TABLE>

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

<PAGE>

MORGAN STANLEY SPECTRUM GLOBAL BALANCED L.P.

STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                             DECEMBER 31,
                                                        ----------------------
                                                           2005           2004
                                                        -----------    ----------
                                                            $              $
 <S>                                                    <C>            <C>
                                    ASSETS
 Equity in futures interests trading accounts:
   Unrestricted cash                                     41,897,899    44,914,117
   Restricted cash                                        2,476,604     3,978,399
                                                        -----------    ----------
    Total Cash                                           44,374,503    48,892,516
                                                        -----------    ----------
   Net unrealized gain on open contracts (MS&Co.)           562,409       932,265
   Net unrealized gain (loss) on open contracts (MSIL)       40,229      (114,942)
                                                        -----------    ----------
    Total net unrealized gain on open contracts             602,638       817,323
                                                        -----------    ----------
    Total Trading Equity                                 44,977,141    49,709,839
 Subscriptions receivable                                   295,999       640,161
 Interest receivable (Morgan Stanley DW)                    149,040        83,972
                                                        -----------    ----------
    Total Assets                                         45,422,180    50,433,972
                                                        ===========    ==========

                       LIABILITIES AND PARTNERS' CAPITAL
 LIABILITIES
 Redemptions payable                                        851,645       582,712
 Accrued brokerage fees (Morgan Stanley DW)                 171,976       188,436
 Accrued management fees                                     46,733        51,206
                                                        -----------    ----------
    Total Liabilities                                     1,070,354       822,354
                                                        -----------    ----------
 PARTNERS' CAPITAL
 Limited Partners (2,879,808.149 and
  3,359,662.807 Units, respectively)                     43,870,162    49,068,822
 General Partner (31,618.331 and
  37,164.331 Units, respectively)                           481,664       542,796
                                                        -----------    ----------
    Total Partners' Capital                              44,351,826    49,611,618
                                                        -----------    ----------
    Total Liabilities and Partners' Capital              45,422,180    50,433,972
                                                        ===========    ==========
 NET ASSET VALUE PER UNIT                                     15.23         14.61
                                                        ===========    ==========
</TABLE>

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                           FOR THE YEARS ENDED DECEMBER 31,
                                         ------------------------------------
                                             2005         2004        2003
                                         ------------  ----------  ----------
                                              $            $           $
  <S>                                    <C>           <C>         <C>
  INVESTMENT INCOME
    Interest income (Morgan Stanley DW)     1,370,806     625,965     525,817
                                         ------------  ----------  ----------

  EXPENSES
    Brokerage fees (Morgan Stanley DW)      2,126,114   2,332,241   2,328,615
    Management fees                           577,754     633,766     632,782
                                         ------------  ----------  ----------
     Total Expenses                         2,703,868   2,966,007   2,961,397
                                         ------------  ----------  ----------

  NET INVESTMENT LOSS                      (1,333,062) (2,340,042) (2,435,580)
                                         ------------  ----------  ----------

  TRADING RESULTS
  Trading profit (loss):
    Realized                                3,338,207   1,049,835   3,711,981
    Net change in unrealized                 (214,685) (1,729,717)  1,801,107
                                         ------------  ----------  ----------
                                            3,123,522    (679,882)  5,513,088
  Proceeds from Litigation Settlement           2,230       2,296      --
                                         ------------  ----------  ----------
     Total Trading Results                  3,125,752    (677,586)  5,513,088
                                         ------------  ----------  ----------

  NET INCOME (LOSS)                         1,792,690  (3,017,628)  3,077,508
                                         ============  ==========  ==========

  NET INCOME (LOSS) ALLOCATION:
  Limited Partners                          1,769,412  (2,985,362)  3,043,649
  General Partner                              23,278     (32,266)     33,859

  NET INCOME (LOSS) PER UNIT:
  Limited Partners                               0.62       (0.86)       0.90
  General Partner                                0.62       (0.86)       0.90
</TABLE>

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

<PAGE>

MORGAN STANLEY SPECTRUM SELECT L.P.

STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                          DECEMBER 31,
                                                    ------------------------
                                                        2005           2004
                                                    ------------    -----------
                                                         $              $
   <S>                                              <C>             <C>
                                   ASSETS
   Equity in futures interests trading accounts:
     Unrestricted cash                               475,166,952    488,346,785
     Restricted cash                                  51,242,347     75,488,462
                                                    ------------    -----------
      Total Cash                                     526,409,299    563,835,247
                                                    ------------    -----------
     Net unrealized gain on open contracts (MSIL)      9,166,796      3,053,732
     Net unrealized gain on open contracts
      (MS&Co.)                                         9,019,008     12,072,891
                                                    ------------    -----------
      Total net unrealized gain on open contracts     18,185,804     15,126,623
     Net option premiums                                 --           3,366,493
                                                    ------------    -----------
      Total Trading Equity                           544,595,103    582,328,363
   Subscriptions receivable                            4,455,213     12,736,861
   Interest receivable (Morgan Stanley DW)             1,417,447        757,981
                                                    ------------    -----------
      Total Assets                                   550,467,763    595,823,205
                                                    ============    ===========
                      LIABILITIES AND PARTNERS' CAPITAL
   LIABILITIES
   Redemptions payable                                13,439,853      5,692,215
   Accrued brokerage fees (Morgan Stanley DW)          2,730,072      3,468,754
   Accrued management fees                             1,295,496      1,356,111
                                                    ------------    -----------
      Total Liabilities                               17,465,421     10,517,080
                                                    ------------    -----------
   PARTNERS' CAPITAL
   Limited Partners (19,209,338.858 and
    20,050,871.818 Units, respectively)              527,198,790    579,155,164
   General Partner (211,461.769 and
    212,951.775 Units, respectively)                   5,803,552      6,150,961
                                                    ------------    -----------
      Total Partners' Capital                        533,002,342    585,306,125
                                                    ------------    -----------
      Total Liabilities and Partners' Capital        550,467,763    595,823,205
                                                    ============    ===========
   NET ASSET VALUE PER UNIT                                27.45          28.88
                                                    ============    ===========
</TABLE>
STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                          FOR THE YEARS ENDED DECEMBER 31,
                                      ---------------------------------------
                                           2005            2004         2003
                                      -------------    -----------  -----------
                                            $               $            $
 <S>                                  <C>              <C>          <C>
 INVESTMENT INCOME
  Interest income (Morgan Stanley DW)    12,876,956      4,952,656    2,843,612
                                      -------------    -----------  -----------
 EXPENSES
  Brokerage fees (Morgan Stanley DW)     36,601,881     36,680,599   25,658,616
  Management fees                        15,652,447     14,450,217   10,617,352
  Incentive fees                            --           6,104,991    3,750,169
                                      -------------    -----------  -----------
    Total Expenses                       52,254,328     57,235,807   40,026,137
                                      -------------    -----------  -----------
 NET INVESTMENT LOSS                    (39,377,372)   (52,283,151) (37,182,525)
                                      -------------    -----------  -----------
 TRADING RESULTS
 Trading profit (loss):
  Realized                                7,018,678     50,580,928   52,485,483
  Net change in unrealized                3,059,181    (21,655,342)  18,883,947
                                      -------------    -----------  -----------
                                         10,077,859     28,925,586   71,369,430
 Proceeds from Litigation Settlement         85,000         45,665       --
                                      -------------    -----------  -----------
    Total Trading Results                10,162,859     28,971,251   71,369,430
                                      -------------    -----------  -----------
 NET INCOME (LOSS)                      (29,214,513)   (23,311,900)  34,186,905
                                      =============    ===========  ===========
 NET INCOME (LOSS) ALLOCATION:
 Limited Partners                       (28,920,794)   (23,067,010)  33,822,853
 General Partner                           (293,719)      (244,890)     364,052
 NET INCOME (LOSS) PER UNIT:
 Limited Partners                             (1.43)         (1.43)        2.66
 General Partner                              (1.43)         (1.43)        2.66
</TABLE>

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

<PAGE>

MORGAN STANLEY SPECTRUM STRATEGIC L.P.

STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                              DECEMBER 31,
                                                       -------------------------
                                                           2005            2004
                                                       ------------    -----------
                                                            $               $
<S>                                                    <C>             <C>
                                     ASSETS
Equity in futures interests trading accounts:
 Unrestricted cash                                      142,187,180    161,592,256
 Restricted cash                                         19,593,820     16,808,205
                                                       ------------    -----------
   Total Cash                                           161,781,000    178,400,461
                                                       ------------    -----------
 Net unrealized gain (loss) on open contracts (MS&Co.)    7,823,513       (226,980)
 Net unrealized gain on open contracts (MSIL)             5,662,270      2,886,349
                                                       ------------    -----------
   Total net unrealized gain on open contracts           13,485,783      2,659,369
 Net option premiums                                           (568)       263,288
                                                       ------------    -----------
   Total Trading Equity                                 175,266,215    181,323,118
Subscriptions receivable                                  1,351,545      5,084,126
Interest receivable (Morgan Stanley DW)                     445,924        238,656
                                                       ------------    -----------
   Total Assets                                         177,063,684    186,645,900
                                                       ============    ===========

                        LIABILITIES AND PARTNERS' CAPITAL

LIABILITIES
Redemptions payable                                       4,515,005      1,725,329
Accrued incentive fees                                    1,704,356        188,744
Accrued brokerage fees (Morgan Stanley DW)                  837,558      1,080,805
Accrued management fees                                     381,027        409,897
                                                       ------------    -----------
   Total Liabilities                                      7,437,946      3,404,775
                                                       ------------    -----------
PARTNERS' CAPITAL
Limited Partners (11,834,304.588 and
 12,446,331.591 Units, respectively)                    167,774,452    181,218,795
General Partner (130,584.135 and
 138,896.135 Units, respectively)                         1,851,286      2,022,330
                                                       ------------    -----------
   Total Partners' Capital                              169,625,738    183,241,125
                                                       ------------    -----------
   Total Liabilities and Partners' Capital              177,063,684    186,645,900
                                                       ============    ===========
NET ASSET VALUE PER UNIT                                      14.18          14.56
                                                       ============    ===========
</TABLE>

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                               FOR THE YEARS ENDED DECEMBER 31,
                                           ---------------------------------------
                                                2005            2004         2003
                                           -------------    -----------  -----------
                                                 $               $            $
<S>                                        <C>              <C>          <C>
INVESTMENT INCOME
 Interest income (Morgan Stanley DW)           4,008,536      1,602,712      741,890
                                           -------------    -----------  -----------

EXPENSES
 Brokerage fees (Morgan Stanley DW)           11,407,747      9,860,579    6,611,238
 Management fees                               4,685,477      4,006,640    2,735,685
 Incentive fees                                2,251,786      2,751,859    2,123,832
                                           -------------    -----------  -----------
  Total Expenses                              18,345,010     16,619,078   11,470,755
                                           -------------    -----------  -----------

NET INVESTMENT LOSS                          (14,336,474)   (15,016,366) (10,728,865)
                                           -------------    -----------  -----------

TRADING RESULTS
Trading profit (loss):
 Realized                                     (2,036,361)    21,527,423   30,251,636
 Net change in unrealized                     10,826,414     (5,262,416)     990,641
                                           -------------    -----------  -----------
                                               8,790,053     16,265,007   31,242,277
Proceeds from Litigation Settlement                  454            173       --
                                           -------------    -----------  -----------
  Total Trading Results                        8,790,507     16,265,180   31,242,277
                                           -------------    -----------  -----------

NET INCOME (LOSS)                             (5,545,967)     1,248,814   20,513,412
                                           =============    ===========  ===========

NET INCOME (LOSS) ALLOCATION:
Limited Partners                              (5,489,130)     1,239,931   20,281,103
General Partner                                  (56,837)         8,883      232,309

NET INCOME (LOSS) PER UNIT:
Limited Partners                                   (0.38)          0.25         2.77
General Partner                                    (0.38)          0.25         2.77
</TABLE>

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

<PAGE>

MORGAN STANLEY SPECTRUM TECHNICAL L.P.

STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
                                                          DECEMBER 31,
                                                    ------------------------
                                                        2005        2004
                                                    -----------  -----------
                                                         $           $
   <S>                                              <C>          <C>
                                   ASSETS
   Equity in futures interests trading accounts:
    Unrestricted cash                               591,492,563  584,988,965
    Restricted cash                                 127,922,335  160,985,939
                                                    -----------  -----------
      Total Cash                                    719,414,898  745,974,904
                                                    -----------  -----------
    Net unrealized gain on open contracts (MSIL)     24,718,032    4,707,076
    Net unrealized gain (loss) on open contracts
     (MS&Co.)                                        (2,653,896)  22,634,674
                                                    -----------  -----------
      Total net unrealized gain on open contracts    22,064,136   27,341,750
                                                    -----------  -----------
      Total Trading Equity                          741,479,034  773,316,654
   Subscriptions receivable                           8,317,319   17,135,652
   Interest receivable (Morgan Stanley DW)            1,887,334    1,000,293
                                                    -----------  -----------
      Total Assets                                  751,683,687  791,452,599
                                                    ===========  ===========

                      LIABILITIES AND PARTNERS' CAPITAL

   LIABILITIES
   Redemptions payable                               22,863,255    6,466,684
   Accrued brokerage fees (Morgan Stanley DW)         3,775,150    4,629,988
   Accrued management fees                            1,629,189    1,632,040
                                                    -----------  -----------
      Total Liabilities                              28,267,594   12,728,712
                                                    -----------  -----------

   PARTNERS' CAPITAL
   Limited Partners (32,000,561.834 and
    32,613,627.616 Units, respectively)             715,669,731  770,511,257
   General Partner (346,372.001 and
    347,618.087 Units, respectively)                  7,746,362    8,212,630
                                                    -----------  -----------
      Total Partners' Capital                       723,416,093  778,723,887
                                                    -----------  -----------
      Total Liabilities and Partners' Capital       751,683,687  791,452,599
                                                    ===========  ===========

   NET ASSET VALUE PER UNIT                               22.36        23.63
                                                    ===========  ===========
</TABLE>

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                          FOR THE YEARS ENDED DECEMBER 31,
                                       -------------------------------------
                                           2005           2004         2003
                                       -----------    -----------  -----------
                                            $              $            $
  <S>                                  <C>            <C>          <C>
  INVESTMENT INCOME
   Interest income (Morgan Stanley DW)  17,176,811      6,171,302    3,316,107
                                       -----------    -----------  -----------

  EXPENSES
   Brokerage fees (Morgan Stanley DW)   49,430,024     45,508,966   30,273,037
   Management fees                      19,268,955     16,226,640   10,835,994
   Incentive fees                        2,668,447     12,132,833   13,042,559
                                       -----------    -----------  -----------
     Total Expenses                     71,367,426     73,868,439   54,151,590
                                       -----------    -----------  -----------

  NET INVESTMENT LOSS                  (54,190,615)   (67,697,137) (50,835,483)
                                       -----------    -----------  -----------

  TRADING RESULTS
  Trading profit (loss):
   Realized                             19,045,879    122,928,230  116,446,374
   Net change in unrealized             (5,277,614)   (19,092,460)  22,330,997
                                       -----------    -----------  -----------
                                        13,768,265    103,835,770  138,777,371
  Proceeds from Litigation Settlement        4,209          3,018       --
                                       -----------    -----------  -----------
     Total Trading Results              13,772,474    103,838,788  138,777,371
                                       -----------    -----------  -----------

  NET INCOME (LOSS)                    (40,418,141)    36,141,651   87,941,888
                                       ===========    ===========  ===========

  NET INCOME (LOSS) ALLOCATION:
  Limited Partners                     (39,990,714)    35,747,190   86,960,795
  General Partner                         (427,427)       394,461      981,093

  NET INCOME (LOSS) PER UNIT:
  Limited Partners                           (1.27)          0.99         4.23
  General Partner                            (1.27)          0.99         4.23
</TABLE>

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

<PAGE>

MORGAN STANLEY SPECTRUM CURRENCY L.P.

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 2005, 2004, AND 2003

<TABLE>
<CAPTION>
                          UNITS OF
                         PARTNERSHIP     LIMITED      GENERAL
                          INTEREST       PARTNERS     PARTNER      TOTAL
                       --------------  -----------  ----------  -----------
                                            $            $           $
    <S>                <C>             <C>          <C>         <C>
    Partners' Capital,
    December 31, 2002   6,902,618.107   93,891,619   2,267,833   96,159,452
    Offering of Units   6,157,215.998   89,883,376     790,000   90,673,376
    Net income               --         16,514,538     282,271   16,796,809
    Redemptions          (920,425.880) (12,246,860) (1,326,857) (13,573,717)
                       --------------  -----------  ----------  -----------
    Partners' Capital,
    December 31, 2003  12,139,408.225  188,042,673   2,013,247  190,055,920
    Offering of Units   8,372,327.316  114,539,377     990,000  115,529,377
    Net loss                 --        (11,774,885)   (133,822) (11,908,707)
    Redemptions        (1,557,346.356) (20,575,860)     --      (20,575,860)
                       --------------  -----------  ----------  -----------
    Partners' Capital,
    December 31, 2004  18,954,389.185  270,231,305   2,869,425  273,100,730
    Offering of Units   3,336,357.445   40,295,529     170,000   40,465,529
    Net loss                 --        (49,177,845)   (526,014) (49,703,859)
    Redemptions        (4,587,517.773) (55,149,719)  (225,924)  (55,375,643)
                       --------------  -----------  ----------  -----------
    Partners' Capital,
    December 31, 2005  17,703,228.857  206,199,270   2,287,487  208,486,757
                       ==============  ===========  ==========  ===========
</TABLE>

MORGAN STANLEY SPECTRUM GLOBAL BALANCED L.P.

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 2005, 2004, AND 2003

<TABLE>
<CAPTION>
                           UNITS OF
                          PARTNERSHIP     LIMITED    GENERAL
                           INTEREST       PARTNERS   PARTNER     TOTAL
                         -------------  -----------  -------  -----------
                                             $          $          $
      <S>                <C>            <C>          <C>      <C>
      Partners' Capital,
      December 31, 2002  3,460,180.682   49,814,229  591,203   50,405,432
      Offering of Units    690,016.887   10,491,897     --     10,491,897
      Net income               --         3,043,649   33,859    3,077,508
      Redemptions         (748,285.123) (11,285,344) (50,000) (11,335,344)
                         -------------  -----------  -------  -----------
      Partners' Capital,
      December 31, 2003  3,401,912.446   52,064,431  575,062   52,639,493
      Offering of Units    778,018.263   11,587,284     --     11,587,284
      Net loss                 --        (2,985,362) (32,266)  (3,017,628)
      Redemptions         (783,103.571) (11,597,531)    --    (11,597,531)
                         -------------  -----------  -------  -----------
      Partners' Capital,
      December 31, 2004  3,396,827.138   49,068,822  542,796   49,611,618
      Offering of Units    345,735.053    4,999,666     --      4,999,666
      Net income               --         1,769,412   23,278    1,792,690
      Redemptions         (831,135.711) (11,967,738) (84,410) (12,052,148)
                         -------------  -----------  -------  -----------
      Partners' Capital,
      December 31, 2005  2,911,426.480   43,870,162  481,664   44,351,826
                         =============  ===========  =======  ===========
</TABLE>

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

<PAGE>

MORGAN STANLEY SPECTRUM SELECT L.P.

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 2005, 2004, AND 2003

<TABLE>
<CAPTION>
                         UNITS OF
                        PARTNERSHIP     LIMITED      GENERAL
                         INTEREST       PARTNERS     PARTNER       TOTAL
                      --------------  ------------  ---------  ------------
                                           $            $            $
   <S>                <C>             <C>           <C>        <C>
   Partners' Capital,
   December 31, 2002  10,681,668.047   292,226,000  3,151,799   295,377,799
   Offering of Units   4,942,610.490   141,160,704  1,340,000   142,500,704
   Net income               --          33,822,853    364,052    34,186,905
   Redemptions        (1,058,775.458)  (30,542,924)     --      (30,542,924)
                      --------------  ------------  ---------  ------------
   Partners' Capital,
   December 31, 2003  14,565,503.079   436,666,633  4,855,851   441,522,484
   Offering of Units   7,215,873.382   208,687,672  1,540,000   210,227,672
   Net loss                 --         (23,067,010)  (244,890)  (23,311,900)
   Redemptions        (1,517,552.868)  (43,132,131)     --      (43,132,131)
                      --------------  ------------  ---------  ------------
   Partners' Capital,
   December 31, 2004  20,263,823.593   579,155,164  6,150,961   585,306,125
   Offering of Units   3,482,044.148    91,946,015    380,000    92,326,015
   Net loss                 --         (28,920,794)  (293,719)  (29,214,513)
   Redemptions        (4,325,067.114) (114,981,595)  (433,690) (115,415,285)
                      --------------  ------------  ---------  ------------
   Partners' Capital,
   December 31, 2005  19,420,800.627   527,198,790  5,803,552   533,002,342
                      ==============  ============  =========  ============
</TABLE>

MORGAN STANLEY SPECTRUM STRATEGIC L.P.

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 2005, 2004, AND 2003

<TABLE>
<CAPTION>
                          UNITS OF
                         PARTNERSHIP     LIMITED     GENERAL
                          INTEREST       PARTNERS    PARTNER      TOTAL
                       --------------  -----------  ---------  -----------
                                            $           $           $
    <S>                <C>             <C>          <C>        <C>
    Partners' Capital,
    December 31, 2002   6,530,775.305   74,487,934    881,138   75,369,072
    Offering of Units   2,823,095.529   36,375,972    180,000   36,555,972
    Net income               --         20,281,103    232,309   20,513,412
    Redemptions          (877,978.963) (11,168,017)     --     (11,168,017)
                       --------------  -----------  ---------  -----------
    Partners' Capital,
    December 31, 2003   8,475,891.871  119,976,992  1,293,447  121,270,439
    Offering of Units   5,057,597.578   73,841,018    720,000   74,561,018
    Net income               --          1,239,931      8,883    1,248,814
    Redemptions          (948,261.723) (13,839,146)     --     (13,839,146)
                       --------------  -----------  ---------  -----------
    Partners' Capital,
    December 31, 2004  12,585,227.726  181,218,795  2,022,330  183,241,125
    Offering of Units   2,346,340.284   31,611,503      --      31,611,503
    Net loss                 --         (5,489,130)   (56,837)  (5,545,967)
    Redemptions        (2,966,679.287) (39,566,716)  (114,207) (39,680,923)
                       --------------  -----------  ---------  -----------
    Partners' Capital,
    December 31, 2005  11,964,888.723  167,774,452  1,851,286  169,625,738
                       ==============  ===========  =========  ===========
</TABLE>

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

<PAGE>

MORGAN STANLEY SPECTRUM TECHNICAL L.P.

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 2005, 2004, AND 2003

<TABLE>
<CAPTION>
                         UNITS OF
                        PARTNERSHIP     LIMITED      GENERAL
                         INTEREST       PARTNERS     PARTNER       TOTAL
                      --------------  ------------  ---------  ------------
                                           $            $            $
   <S>                <C>             <C>           <C>        <C>
   Partners' Capital,
   December 31, 2002  18,239,525.857   332,124,550  3,697,076   335,821,626
   Offering of Units   7,617,427.705   156,115,402  1,240,000   157,355,402
   Net income               --          86,960,795    981,093    87,941,888
   Redemptions        (2,082,749.238)  (42,934,638)     --      (42,934,638)
                      --------------  ------------  ---------  ------------
   Partners' Capital,
   December 31, 2003  23,774,204.324   532,266,109  5,918,169   538,184,278
   Offering of Units  11,745,240.279   259,052,698  1,900,000   260,952,698
   Net income               --          35,747,190    394,461    36,141,651
   Redemptions        (2,558,198.900)  (56,554,740)     --      (56,554,740)
                      --------------  ------------  ---------  ------------
   Partners' Capital,
   December 31, 2004  32,961,245.703   770,511,257  8,212,630   778,723,887
   Offering of Units   6,431,314.024   139,226,034    480,000   139,706,034
   Net loss                 --         (39,990,714)  (427,427)  (40,418,141)
   Redemptions        (7,045,625.892) (154,076,846)  (518,841) (154,595,687)
                      --------------  ------------  ---------  ------------
   Partners' Capital,
   December 31, 2005  32,346,933.835   715,669,731  7,746,362   723,416,093
                      ==============  ============  =========  ============
</TABLE>

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

<PAGE>

MORGAN STANLEY SPECTRUM CURRENCY L.P.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                        FOR THE YEARS ENDED DECEMBER 31,
                                     -------------------------------------
                                         2005         2004         2003
                                     -----------  -----------  -----------
                                          $            $            $
<S>                                  <C>          <C>          <C>
CASH FLOWS FROM
 OPERATING ACTIVITIES
Net income (loss)                    (49,703,859) (11,908,707)  16,796,809
Noncash item included in net
 income (loss):
  Net change in unrealized            10,445,759  (11,769,313)     772,909
(Increase) decrease in operating
 assets:
  Restricted cash                        169,680     (169,680)      --
  Interest receivable
   (Morgan Stanley DW)                  (244,444)    (213,650)     (31,679)
Increase (decrease) in operating
 liabilities:
  Accrued brokerage fees
   (Morgan Stanley DW)                  (145,868)     346,433      345,106
  Accrued management fees                (63,421)     150,624      150,046
  Accrued incentive fees                  --         (399,035)     159,553
                                     -----------  -----------  -----------
Net cash provided by (used for)
 operating activities                (39,542,153) (23,963,328)  18,192,744
                                     -----------  -----------  -----------

CASH FLOWS FROM
 FINANCING ACTIVITIES
Cash received from offering of Units  45,800,729  117,548,841   86,142,266
Cash paid from redemptions of
 Units                               (51,528,518) (19,137,190) (14,039,569)
                                     -----------  -----------  -----------
Net cash provided by (used for)
 financing activities                 (5,727,789)  98,411,651   72,102,697
                                     -----------  -----------  -----------

Net increase (decrease) in
 unrestricted cash                   (45,269,942)  74,448,323   90,295,441

Unrestricted cash at beginning of
 period                              253,222,567  178,774,244   88,478,803
                                     -----------  -----------  -----------

Unrestricted cash at end of period   207,952,625  253,222,567  178,774,244
                                     ===========  ===========  ===========
</TABLE>

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

<PAGE>

MORGAN STANLEY SPECTRUM GLOBAL BALANCED L.P.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                            FOR THE YEARS ENDED DECEMBER 31,
                                         --------------------------------------
                                             2005            2004         2003
                                         ------------    -----------  -----------
                                              $               $            $
<S>                                      <C>             <C>          <C>
CASH FLOWS FROM
 OPERATING ACTIVITIES
Net income (loss)                           1,792,690     (3,017,628)   3,077,508
Noncash item included in net
 income (loss):
  Net change in unrealized                    214,685      1,729,717   (1,801,107)
(Increase) decrease in operating assets:
  Restricted cash                           1,501,795       (116,681)    (685,089)
  Interest receivable
   (Morgan Stanley DW)                        (65,068)       (43,862)      13,348
  Net option premiums                         --             (39,600)     752,173
Decrease in operating liabilities:
  Accrued brokerage fees
   (Morgan Stanley DW)                        (16,460)        (6,455)      (7,218)
  Accrued management fees                      (4,473)        (1,754)      (1,962)
                                         ------------    -----------  -----------
Net cash provided by (used for)
 operating activities                       3,423,169     (1,496,263)   1,347,653
                                         ------------    -----------  -----------

CASH FLOWS FROM
 FINANCING ACTIVITIES
Cash received from offering of Units        5,343,828     11,983,540   10,172,272
Cash paid from redemptions of Units       (11,783,215)   (12,047,859) (11,199,079)
                                         ------------    -----------  -----------
Net cash used for financing activities     (6,439,387)       (64,319)  (1,026,807)
                                         ------------    -----------  -----------

Net increase (decrease) in unrestricted
 cash                                      (3,016,218)    (1,560,582)     320,846

Unrestricted cash at beginning of
 period                                    44,914,117     46,474,699   46,153,853
                                         ------------    -----------  -----------

Unrestricted cash at end of period         41,897,899     44,914,117   46,474,699
                                         ============    ===========  ===========
</TABLE>

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

<PAGE>

MORGAN STANLEY SPECTRUM SELECT L.P.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                         FOR THE YEARS ENDED DECEMBER 31,
                                      --------------------------------------
                                          2005          2004         2003
                                      ------------  -----------  -----------
                                           $             $            $
   <S>                                <C>           <C>          <C>
   CASH FLOWS FROM
    OPERATING ACTIVITIES
   Net income (loss)                   (29,214,513) (23,311,900)  34,186,905
   Noncash item included in net
    income (loss):
     Net change in unrealized           (3,059,181)  21,655,342  (18,883,947)
   (Increase) decrease in operating
    assets:
     Restricted cash                    24,246,115  (15,987,079) (25,458,104)
     Net option premiums                 3,366,493   (2,134,005)  (1,232,488)
     Interest receivable
      (Morgan Stanley DW)                 (659,466)    (507,361)     (15,337)
   Increase (decrease) in operating
    liabilities:
     Accrued brokerage fees
      (Morgan Stanley DW)                 (738,682)   1,067,674      738,759
     Accrued management fees               (60,615)     362,561      305,694
     Accrued incentive fees                --        (2,227,005)   2,227,005
                                      ------------  -----------  -----------
   Net cash used for operating
    activities                          (6,119,849) (21,081,773)  (8,131,513)
                                      ------------  -----------  -----------

   CASH FLOWS FROM
    FINANCING ACTIVITIES
   Cash received from offering of
    Units                              100,607,663  210,179,028  136,503,231
   Cash paid from redemptions of
    Units                             (107,667,647) (39,845,039) (30,014,204)
                                      ------------  -----------  -----------
   Net cash provided by (used for)
    financing activities                (7,059,984) 170,333,989  106,489,027
                                      ------------  -----------  -----------

   Net increase (decrease) in
    unrestricted cash                  (13,179,833) 149,252,216   98,357,514

   Unrestricted cash at beginning of
    period                             488,346,785  339,094,569  240,737,055
                                      ------------  -----------  -----------

   Unrestricted cash at end of period  475,166,952  488,346,785  339,094,569
                                      ============  ===========  ===========
</TABLE>

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

<PAGE>

MORGAN STANLEY SPECTRUM STRATEGIC L.P.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                          FOR THE YEARS ENDED DECEMBER 31,
                                       -------------------------------------
                                           2005         2004         2003
                                       -----------  -----------  -----------
                                            $            $            $
  <S>                                  <C>          <C>          <C>
  CASH FLOWS FROM
   OPERATING ACTIVITIES
  Net income (loss)                     (5,545,967)   1,248,814   20,513,412
  Noncash item included in net
   income (loss):
    Net change in unrealized           (10,826,414)   5,262,416     (990,641)
  (Increase) decrease in operating
   assets:
    Restricted cash                     (2,785,615)  (3,161,765)  (1,920,957)
    Net option premiums                    263,856      414,992     (455,512)
    Interest receivable
     (Morgan Stanley DW)                  (207,268)    (172,065)      (4,813)
  Increase (decrease) in operating
   liabilities:
    Accrued incentive fees               1,515,612     (622,506)     811,250
    Accrued brokerage fees
     (Morgan Stanley DW)                  (243,247)     430,756      218,453
    Accrued management fees                (28,870)     140,911       90,394
                                       -----------  -----------  -----------
  Net cash provided by (used for)
   operating activities                (17,857,913)   3,541,553   18,261,586
                                       -----------  -----------  -----------

  CASH FLOWS FROM
   FINANCING ACTIVITIES
  Cash received from offering of Units  35,344,084   74,620,070   33,067,265
  Cash paid from redemptions of
   Units                               (36,891,247) (12,769,688) (11,627,695)
                                       -----------  -----------  -----------
  Net cash provided by (used for)
   financing activities                 (1,547,163)  61,850,382   21,439,570
                                       -----------  -----------  -----------

  Net increase (decrease) in
   unrestricted cash                   (19,405,076)  65,391,935   39,701,156

  Unrestricted cash at beginning of
   period                              161,592,256   96,200,321   56,499,165
                                       -----------  -----------  -----------

  Unrestricted cash at end of period   142,187,180  161,592,256   96,200,321
                                       ===========  ===========  ===========
</TABLE>

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

<PAGE>

MORGAN STANLEY SPECTRUM TECHNICAL L.P.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                      FOR THE YEARS ENDED DECEMBER 31,
                                   --------------------------------------
                                       2005          2004         2003
                                   ------------  -----------  -----------
                                        $             $            $
<S>                                <C>           <C>          <C>
CASH FLOWS FROM
 OPERATING ACTIVITIES
Net income (loss)                   (40,418,141)  36,141,651   87,941,888
Noncash item included in net
 income (loss):
  Net change in unrealized            5,277,614   19,092,460  (22,330,997)
(Increase) decrease in operating
 assets:
  Restricted cash                    33,063,604  (71,797,043) (50,136,502)
  Interest receivable
   (Morgan Stanley DW)                 (887,041)    (708,483)     (22,974)
  Net option premiums                   --         3,973,725  (3,973,725)
Increase (decrease) in operating
 liabilities:
  Accrued brokerage fees
   (Morgan Stanley DW)                 (854,838)   1,682,213    1,041,470
  Accrued management fees                (2,851)     547,516      411,562
  Accrued incentive fees                --        (4,924,640)   4,924,640
                                   ------------  -----------  -----------
Net cash provided by (used for)
 operating activities                (3,821,653) (15,992,601)  17,855,362
                                   ------------  -----------  -----------

CASH FLOWS FROM
 FINANCING ACTIVITIES
Cash received from offering of
 Units                              148,524,367  259,672,165  148,609,073
Cash paid from redemptions of
 Units                             (138,199,116) (53,013,759) (43,204,854)
                                   ------------  -----------  -----------
Net cash provided by financing
 activities                          10,325,251  206,658,406  105,404,219
                                   ------------  -----------  -----------

Net increase in unrestricted cash     6,503,598  190,665,805  123,259,581

Unrestricted cash at beginning of
 period                             584,988,965  394,323,160  271,063,579
                                   ------------  -----------  -----------

Unrestricted cash at end of period  591,492,563  584,988,965  394,323,160
                                   ============  ===========  ===========
</TABLE>

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

<PAGE>

MORGAN STANLEY SPECTRUM CURRENCY L.P.

SCHEDULES OF INVESTMENTS

DECEMBER 31, 2005 AND 2004

<TABLE>
<CAPTION>
                                                                  LONG UNREALIZED  PERCENTAGE   SHORT UNREALIZED  PERCENTAGE
FUTURES AND FORWARD CONTRACTS:                                      GAIN/(LOSS)   OF NET ASSETS   GAIN/(LOSS)    OF NET ASSETS
------------------------------                                    --------------- ------------- ---------------- -------------
2005 PARTNERSHIP NET ASSETS: $208,486,757                                $              %              $               %
<S>                                                               <C>             <C>           <C>              <C>
Foreign currency                                                    (1,081,795)       (0.52)       7,283,989         3.49
                                                                    ----------        -----        ---------         ----
  Grand Total:                                                      (1,081,795)       (0.52)       7,283,989         3.49
                                                                    ==========        =====        =========         ====
  Unrealized Currency Gain/(Loss)

  Total Net Unrealized Gain per Statement of Financial Condition

2004 PARTNERSHIP NET ASSETS: $273,100,730
Foreign currency                                                    16,600,066         6.08*          47,887         0.02
                                                                    ----------        -----        ---------         ----
  Grand Total:                                                      16,600,066         6.08           47,887         0.02
                                                                    ==========        =====        =========         ====
  Unrealized Currency Gain/(Loss)

  Total Net Unrealized Gain per Statement of Financial Condition

</TABLE>
<TABLE>
<CAPTION>
                                                                  NET UNREALIZED
FUTURES AND FORWARD CONTRACTS:                                     GAIN/(LOSS)
------------------------------                                    --------------
2005 PARTNERSHIP NET ASSETS: $208,486,757                               $
<S>                                                               <C>
Foreign currency                                                     6,202,194
                                                                    ----------
  Grand Total:                                                       6,202,194

  Unrealized Currency Gain/(Loss)                                       --
                                                                    ----------
  Total Net Unrealized Gain per Statement of Financial Condition     6,202,194
                                                                    ==========
2004 PARTNERSHIP NET ASSETS: $273,100,730
Foreign currency                                                    16,647,953
                                                                    ----------
  Grand Total:                                                      16,647,953

  Unrealized Currency Gain/(Loss)                                       --
                                                                    ----------
  Total Net Unrealized Gain per Statement of Financial Condition    16,647,953
                                                                    ==========
</TABLE>
* No single contract's value exceeds 5% of Net Assets.

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

<PAGE>

MORGAN STANLEY SPECTRUM GLOBAL BALANCED L.P.

SCHEDULES OF INVESTMENTS

DECEMBER 31, 2005 AND 2004

<TABLE>
<CAPTION>
                                                                  LONG UNREALIZED  PERCENTAGE   SHORT UNREALIZED  PERCENTAGE
FUTURES AND FORWARD CONTRACTS:                                      GAIN/(LOSS)   OF NET ASSETS   GAIN/(LOSS)    OF NET ASSETS
------------------------------                                    --------------- ------------- ---------------- -------------

2005 PARTNERSHIP NET ASSETS: $44,351,826                                 $              %              $               %
<S>                                                               <C>             <C>           <C>              <C>
Commodity                                                              74,261          0.17          (9,113)         (0.02)
Equity                                                                431,246          0.97            --              --
Foreign currency                                                       25,515          0.06         (31,429)         (0.07)
Interest rate                                                          37,273          0.08         186,788           0.42
                                                                     --------         -----         -------          -----
  Grand Total:                                                        568,295          1.28         146,246           0.33
                                                                     ========         =====         =======          =====
  Unrealized Currency Loss

  Total Net Unrealized Gain per Statement of Financial Condition


2004 PARTNERSHIP NET ASSETS: $49,611,618
Commodity                                                            (174,817)        (0.35)         88,890           0.18
Equity                                                                416,781          0.84            --              --
Foreign currency                                                      233,829          0.47          15,689           0.03
Interest rate                                                          25,587          0.05         181,418           0.37
                                                                     --------         -----         -------          -----
  Grand Total:                                                        501,380          1.01         285,997           0.58
                                                                     ========         =====         =======          =====
  Unrealized Currency Gain

  Total Net Unrealized Gain per Statement of Financial Condition

</TABLE>
<TABLE>
<CAPTION>
                                                                  NET UNREALIZED
FUTURES AND FORWARD CONTRACTS:                                     GAIN/(LOSS)
------------------------------                                     -----------

2005 PARTNERSHIP NET ASSETS: $44,351,826                                $
<S>                                                               <C>
Commodity                                                              65,148
Equity                                                                431,246
Foreign currency                                                       (5,914)
Interest rate                                                         224,061
                                                                     --------
  Grand Total:                                                        714,541

  Unrealized Currency Loss                                           (111,903)
                                                                     --------
  Total Net Unrealized Gain per Statement of Financial Condition      602,638
                                                                     ========

2004 PARTNERSHIP NET ASSETS: $49,611,618
Commodity                                                             (85,927)
Equity                                                                416,781
Foreign currency                                                      249,518
Interest rate                                                         207,005
                                                                     --------
  Grand Total:                                                        787,377

  Unrealized Currency Gain                                             29,946
                                                                     --------
  Total Net Unrealized Gain per Statement of Financial Condition      817,323
                                                                     ========
</TABLE>

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

<PAGE>

MORGAN STANLEY SPECTRUM SELECT L.P.

SCHEDULES OF INVESTMENTS

DECEMBER 31, 2005 AND 2004

<TABLE>
<CAPTION>
                                                                  LONG UNREALIZED  PERCENTAGE   SHORT UNREALIZED  PERCENTAGE
FUTURES AND FORWARD CONTRACTS:                                      GAIN/(LOSS)   OF NET ASSETS   GAIN/(LOSS)    OF NET ASSETS
------------------------------                                    --------------- ------------- ---------------- -------------

2005 PARTNERSHIP NET ASSETS: $533,002,342                                $              %              $               %
<S>                                                               <C>             <C>           <C>              <C>
Commodity                                                           15,589,813         2.92          (730,681)       (0.14)
Equity                                                               1,882,850         0.35            12,500          --
Foreign currency                                                    (2,386,026)       (0.44)        4,136,927         0.78
Interest rate                                                          684,290         0.13         1,798,925         0.34
                                                                    ----------        -----        ----------        -----
  Grand Total:                                                      15,770,927         2.96         5,217,671         0.98
                                                                    ==========        =====        ==========        =====
  Unrealized Currency Loss

  Total Net Unrealized Gain per Statement of Financial Condition


2004 PARTNERSHIP NET ASSETS: $585,306,125
Commodity                                                            5,488,782         0.94           642,817         0.11
Equity                                                               7,810,435         1.33            --              --
Foreign currency                                                     3,951,731         0.68        (2,735,991)       (0.47)
Interest rate                                                        1,815,260         0.31           828,324         0.14
                                                                    ----------        -----        ----------        -----
  Grand Total:                                                      19,066,208         3.26        (1,264,850)       (0.22)
                                                                    ==========        =====        ==========        =====
  Unrealized Currency Loss

  Total Net Unrealized Gain per Statement of Financial Condition

</TABLE>
<TABLE>
<CAPTION>
                                                                  NET UNREALIZED
FUTURES AND FORWARD CONTRACTS:                                     GAIN/(LOSS)
------------------------------                                    --------------

2005 PARTNERSHIP NET ASSETS: $533,002,342                               $
<S>                                                               <C>
Commodity                                                           14,859,132
Equity                                                               1,895,350
Foreign currency                                                     1,750,901
Interest rate                                                        2,483,215
                                                                    ----------
  Grand Total:                                                      20,988,598

  Unrealized Currency Loss                                          (2,802,794)
                                                                    ----------
  Total Net Unrealized Gain per Statement of Financial Condition    18,185,804
                                                                    ==========

2004 PARTNERSHIP NET ASSETS: $585,306,125
Commodity                                                            6,131,599
Equity                                                               7,810,435
Foreign currency                                                     1,215,740
Interest rate                                                        2,643,584
                                                                    ----------
  Grand Total:                                                      17,801,358

  Unrealized Currency Loss                                          (2,674,735)
                                                                    ----------
  Total Net Unrealized Gain per Statement of Financial Condition    15,126,623
                                                                    ==========
</TABLE>
  The accompanying notes are an integral part of these financial statements.

<PAGE>

MORGAN STANLEY SPECTRUM STRATEGIC L.P.

SCHEDULES OF INVESTMENTS

DECEMBER 31, 2005 AND 2004

<TABLE>
<CAPTION>
                                                                  LONG UNREALIZED  PERCENTAGE   SHORT UNREALIZED  PERCENTAGE
FUTURES AND FORWARD CONTRACTS:                                      GAIN/(LOSS)   OF NET ASSETS   GAIN/(LOSS)    OF NET ASSETS
------------------------------                                    --------------- ------------- ---------------- -------------
2005 PARTNERSHIP NET ASSETS: $169,625,738                                $              %              $               %
<S>                                                               <C>             <C>           <C>              <C>
Commodity                                                           16,718,531         9.86*          (28,242)       (0.01)
Equity                                                                 (96,027)       (0.06)           --              --
Foreign currency                                                    (1,327,499)       (0.78)       (2,048,373)       (1.21)
Interest rate                                                           --              --            582,959         0.34
                                                                    ----------        -----        ----------        -----
  Grand Total:                                                      15,295,005         9.02        (1,493,656)       (0.88)
                                                                    ==========        =====        ==========        =====
  Unrealized Currency Loss

  Total Net Unrealized Gain per Statement of Financial Condition

2004 PARTNERSHIP NET ASSETS: $183,241,125
Commodity                                                            2,260,763         1.23           811,061         0.44
Equity                                                                 746,712         0.41            --              --
Foreign currency                                                     1,083,470         0.59        (1,174,936)       (0.64)
Interest rate                                                         (999,978)       (0.54)          (59,493)       (0.03)
                                                                    ----------        -----        ----------        -----
  Grand Total:                                                       3,090,967         1.69          (423,368)       (0.23)
                                                                    ==========        =====        ==========        =====
  Unrealized Currency Loss

  Total Net Unrealized Gain per Statement of Financial Condition

</TABLE>
<TABLE>
<CAPTION>
                                                                  NET UNREALIZED
FUTURES AND FORWARD CONTRACTS:                                     GAIN/(LOSS)
------------------------------                                     -----------
2005 PARTNERSHIP NET ASSETS: $169,625,738                               $
<S>                                                               <C>
Commodity                                                           16,690,289
Equity                                                                 (96,027)
Foreign currency                                                    (3,375,872)
Interest rate                                                          582,959
                                                                    ----------
  Grand Total:                                                      13,801,349

  Unrealized Currency Loss                                            (315,566)
                                                                    ----------
  Total Net Unrealized Gain per Statement of Financial Condition    13,485,783
                                                                    ==========
2004 PARTNERSHIP NET ASSETS: $183,241,125
Commodity                                                            3,071,824
Equity                                                                 746,712
Foreign currency                                                       (91,466)
Interest rate                                                       (1,059,471)
                                                                    ----------
  Grand Total:                                                       2,667,599

  Unrealized Currency Loss                                              (8,230)
                                                                    ----------
  Total Net Unrealized Gain per Statement of Financial Condition     2,659,369
                                                                    ==========
</TABLE>
* No single contract's value exceeds 5% of Net Assets.

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

<PAGE>

MORGAN STANLEY SPECTRUM TECHNICAL L.P.

SCHEDULES OF INVESTMENTS

DECEMBER 31, 2005 AND 2004

<TABLE>
<CAPTION>
                                                                  LONG UNREALIZED  PERCENTAGE   SHORT UNREALIZED  PERCENTAGE
FUTURES AND FORWARD CONTRACTS:                                      GAIN/(LOSS)   OF NET ASSETS   GAIN/(LOSS)    OF NET ASSETS
------------------------------                                    --------------- ------------- ---------------- -------------
2005 PARTNERSHIP NET ASSETS: $723,416,093                                $              %              $               %
<S>                                                               <C>             <C>           <C>              <C>
Commodity                                                           33,767,846         4.66        (1,474,466)       (0.20)
Equity                                                              (1,753,796)       (0.24)           --              --
Foreign currency                                                    (4,881,736)       (0.67)       (2,151,613)       (0.30)
Interest rate                                                        1,726,772         0.24         2,349,450         0.32
                                                                    ----------        -----        ----------        -----
  Grand Total:                                                      28,859,086         3.99        (1,276,629)       (0.18)
                                                                    ==========        =====        ==========        =====
  Unrealized Currency Loss

  Total Net Unrealized Gain per Statement of Financial Condition


2004 PARTNERSHIP NET ASSETS: $778,723,887
Commodity                                                            4,959,331         0.63         1,798,641         0.23
Equity                                                               7,857,895         1.01          (817,447)       (0.10)
Foreign currency                                                    13,746,446         1.77        (2,924,743)       (0.38)
Interest rate                                                        3,829,920         0.49          (382,283)       (0.05)
                                                                    ----------        -----        ----------        -----
  Grand Total:                                                      30,393,592         3.90        (2,325,832)       (0.30)
                                                                    ==========        =====        ==========        =====
  Unrealized Currency Loss

  Total Net Unrealized Gain per Statement of Financial Condition

</TABLE>
<TABLE>
<CAPTION>
                                                                  NET UNREALIZED
FUTURES AND FORWARD CONTRACTS:                                     GAIN/(LOSS)
------------------------------                                     -----------
2005 PARTNERSHIP NET ASSETS: $723,416,093                               $
<S>                                                               <C>
Commodity                                                           32,293,380
Equity                                                              (1,753,796)
Foreign currency                                                    (7,033,349)
Interest rate                                                        4,076,222
                                                                    ----------
  Grand Total:                                                      27,582,457

  Unrealized Currency Loss                                          (5,518,321)
                                                                    ----------
  Total Net Unrealized Gain per Statement of Financial Condition    22,064,136
                                                                    ==========

2004 PARTNERSHIP NET ASSETS: $778,723,887
Commodity                                                            6,757,972
Equity                                                               7,040,448
Foreign currency                                                    10,821,703
Interest rate                                                        3,447,637
                                                                    ----------
  Grand Total:                                                      28,067,760

  Unrealized Currency Loss                                            (726,010)
                                                                    ----------
  Total Net Unrealized Gain per Statement of Financial Condition    27,341,750
                                                                    ==========
</TABLE>
  The accompanying notes are an integral part of these financial statements.

<PAGE>

MORGAN STANLEY SPECTRUM SERIES

NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION.  Morgan Stanley Spectrum Currency L.P. ("Spectrum Currency"),
Morgan Stanley Spectrum Global Balanced L.P. ("Spectrum Global Balanced"),
Morgan Stanley Spectrum Select L.P. ("Spectrum Select"), Morgan Stanley
Spectrum Strategic L.P. ("Spectrum Strategic"), and Morgan Stanley Spectrum
Technical L.P. ("Spectrum Technical") (individually, a "Partnership", or
collectively, the "Partnerships"), are limited partnerships organized to engage
in the speculative trading of futures contracts, options on futures and forward
contracts, and forward contracts on physical commodities and other commodity
interests, including, but not limited to, foreign currencies, financial
instruments, metals, energy, and agricultural products (collectively, "Futures
Interests").
  The general partner for each Partnership is Demeter Management Corporation
("Demeter"). The non-clearing commodity broker is Morgan Stanley DW Inc.
("Morgan Stanley DW"). The clearing commodity brokers for Spectrum Global
Balanced, Spectrum Select, Spectrum Strategic, and Spectrum Technical are
Morgan Stanley & Co. Incorporated ("MS&Co.") and Morgan Stanley & Co.
International Limited ("MSIL"). Spectrum Currency's clearing commodity broker
is MS&Co. For Spectrum Strategic, Morgan Stanley Capital Group Inc. ("MSCG")
acts as the counterparty on all of the options on foreign currency forward
contracts. Effective January 2006, for Spectrum Technical, MSCG acts as the
counterparty on all the options on foreign currency forward contracts. Demeter,
Morgan Stanley DW, MS&Co., MSIL, and MSCG are wholly-owned subsidiaries of
Morgan Stanley.
  Demeter is required to maintain a 1% minimum interest in the equity of each
Partnership and income (losses) are shared by Demeter and the limited partners
based upon their proportional ownership interests.

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

<PAGE>

MORGAN STANLEY SPECTRUM SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)


REVENUE RECOGNITION.  Futures Interests are open commitments until settlement
date, at which time they are realized. They are valued at market on a daily
basis and the resulting net change in unrealized gains and losses is reflected
in the change in unrealized trading profit (loss) on open contracts from one
period to the next on the Statements of Operations. Monthly, Morgan Stanley DW
pays each Partnership interest income equal to 80% of the month's average daily
"Net Assets" (as defined in the Limited Partnership Agreements) in the case of
Spectrum Currency, Spectrum Select, Spectrum Strategic, and Spectrum Technical,
and on 100% in the case of Spectrum Global Balanced. The interest rate is equal
to a prevailing rate on U.S. Treasury bills. For purposes of such interest
payments, Net Assets do not include monies owed to the Partnerships on Futures
Interests.
  The Partnerships' functional currency is the U.S. dollar; however, they
transact business in currencies other than the U.S. dollar. Assets and
liabilities denominated in currencies other than the U.S. dollar are translated
into U.S. dollars at the rates in effect at the date of the Statements of
Financial Condition. Income and expense items denominated in currencies other
than the U.S. dollar are translated into U.S. dollars at the rates in effect
during the period. Gains and losses resulting from the translation to U.S.
dollars are reported in income currently.

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

CONDENSED SCHEDULES OF INVESTMENTS.  In December 2003, the American Institute
of Certified Public Accountants' Accounting Standards Executive Committee
issued Statement of Position 03-4 ("SOP 03-4") "Reporting Financial Highlights
and Schedule of Investments by Nonregistered Investment Partnerships: An
Amendment to the Audit and Accounting Guide Audits Of Investment Companies and
AICPA Statement of Position 95-2, Financial Reporting By Nonpublic Investment
Partnerships". SOP 03-4 requires commodity pools to disclose the number of
contracts, the contracts' expiration dates, and the

<PAGE>

MORGAN STANLEY SPECTRUM SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

cumulative unrealized gains/(losses) on open futures contracts, when the
cumulative unrealized gains/(losses) on an open futures contract exceeds 5% of
Net Assets, taking long and short positions into account separately. SOP 03-4
also requires ratios for net investment income/(losses), expenses before and
after incentive fees, and net income/(losses) based on average net assets, and
ratios for total return before and after incentive fees based on average units
outstanding to be disclosed in Financial Highlights. SOP 03-4 was effective for
fiscal years ending after December 15, 2003.

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

BROKERAGE AND RELATED TRANSACTION FEES AND COSTS.  The brokerage fees for
Spectrum Currency and Spectrum Global Balanced are accrued at a flat monthly
rate of  1/12 of 4.6% (a 4.6% annual rate) of Net Assets as of the first day of
each month.


<PAGE>

MORGAN STANLEY SPECTRUM SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

  Brokerage fees for Spectrum Select, Spectrum Strategic, and Spectrum
Technical are currently accrued at a flat monthly rate of  1/12 of 6.00% (a
6.00% annual rate) of Net Assets as of the first day of each month.

  Effective July 1, 2005, brokerage fees for Spectrum Select, Spectrum
Strategic, and Spectrum Technical were reduced from  1/12 of 7.25% (a 7.25%
annual rate) to  1/12 of 6.00% (a 6.00% annual rate) of Net Assets as of the
first day of each month.
  Such brokerage fees currently cover all brokerage fees, transaction fees and
costs, and ordinary administrative and continuing offering expenses.

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

CONTINUING OFFERING.  Units of each Partnership are offered at a price equal to
100% of the Net Asset Value per Unit as of the close of business on the last
day of each month. No selling commissions or charges related to the continuing
offering of Units are paid by the limited partners or the Partnerships. Morgan
Stanley DW pays all such costs.

REDEMPTIONS.  Limited partners may redeem some or all of their Units at 100% of
the Net Asset Value per Unit as of the end of the last day of any month that is
at least six months after the closing at which a person first becomes a limited
partner. The Request for Redemption must be delivered to a limited partner's
local Morgan Stanley Branch Office in time for it to be forwarded and received
by Demeter no later than 3:00 p.m., New York City time, on the last day of the
month in which the redemption is to be effective. Redemptions must be made in
whole Units, in a minimum amount of 50 Units required for each redemption,
unless a limited partner is redeeming his entire interest in a Partnership.

<PAGE>

MORGAN STANLEY SPECTRUM SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

Units redeemed on or prior to the last day of the twelfth month from the date
of purchase will be subject to a redemption charge equal to 2% of the Net Asset
Value of a Unit on the Redemption Date. Units redeemed after the last day of
the twelfth month and on or prior to the last day of the twenty-fourth month
from the date of purchase will be subject to a redemption charge equal to 1% of
the Net Asset Value of a Unit on Redemption Date. Units redeemed after the last
day of the twenty-fourth month from the date of purchase will not be subject to
a redemption charge. The foregoing redemption charges are paid to Morgan
Stanley DW.

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

DISTRIBUTIONS.  Distributions, other than redemptions of Units, are made on a
pro-rata basis at the sole discretion of Demeter. No distributions have been
made to date. Demeter does not intend to make any distributions of the
Partnerships' profits.

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

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

<PAGE>

MORGAN STANLEY SPECTRUM SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)


LITIGATION SETTLEMENT.  On February 27, 2002, Spectrum Global Balanced,
Spectrum Select, Spectrum Strategic, and Spectrum Technical received
notification of a preliminary entitlement to payment from the Sumitomo Copper
Litigation Settlement Administrator, and the Partnerships received settlement
award payments in the amounts of $233,074, $4,636,156, $17,556, and $306,400,
respectively, during August 2002, $0, $45,665, $173, and 3,018, respectively,
during July 2004 and $2,230, $85,000, $454, and $4,209, respectively, during
November 2005. Spectrum Global Balanced received a settlement award payment in
the amount of $2,296 during October 2004. Any amounts received are accounted
for in the period received, for the benefit of the limited partners at the date
of receipt.

RECLASSIFICATIONS.  Certain 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 2005 presentation. Such
reclassifications have no impact to the Partnerships' reported net income
(loss).

--------------------------------------------------------------------------------
2. RELATED PARTY TRANSACTIONS

The Partnerships pay brokerage fees to Morgan Stanley DW as described in Note
1. Spectrum Global Balanced, Spectrum Select, Spectrum Strategic, and Spectrum
Technical's cash is on deposit with Morgan Stanley DW, MS&Co., and MSIL, and
Spectrum Currency's cash is on deposit with Morgan Stanley DW and MS&Co., in
futures interests trading accounts to meet margin requirements as needed.
Morgan Stanley DW pays interest on these funds as described in Note 1.

--------------------------------------------------------------------------------
3. TRADING ADVISORS

Demeter, on behalf of each Partnership, retains certain commodity trading
advisors to make all trading decisions for the Partnerships. The trading
advisors for each Partnership at December 31, 2005 were as follows:

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

Morgan Stanley Spectrum Global Balanced L.P.
  SSARIS Advisors, LLC

<PAGE>

MORGAN STANLEY SPECTRUM SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)


Morgan Stanley Spectrum Select L.P.
  EMC Capital Management, Inc. ("EMC")
  Northfield Trading L.P. ("Northfield")
  Rabar Market Research, Inc. ("Rabar")
  Sunrise Capital Management, Inc. ("Sunrise")
  Graham Capital Management, L.P. ("Graham"),
   effective January 1, 2004

Morgan Stanley Spectrum Strategic L.P.
  Blenheim Capital Management, L.L.C. ("Blenheim")
  Eclipse Capital Management, Inc. ("Eclipse")
  FX Concepts (Trading Advisor), Inc. ("FX Concepts"),
   effective November 1, 2004

  Effective April 30, 2004, Allied Irish Capital Management Ltd. was terminated
  as a trading advisor for Spectrum Strategic.

Morgan Stanley Spectrum Technical L.P.
  Campbell & Company, Inc. ("Campbell")
  Chesapeake Capital Corporation ("Chesapeake")
  John W. Henry & Company, Inc. ("JWH")
  Winton Capital Management Limited ("Winton"),
   effective January 1, 2004
  Compensation to the trading advisors by the Partnerships consists of a
management fee and an incentive fee as follows:

MANAGEMENT FEE.  The management fee for Spectrum Currency is accrued at a rate
of  1/12 of 2% per month of Net Assets allocated to each trading advisor on the
first day of each month (a 2% annual rate).

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

  The management fee for Spectrum Select is accrued at a rate of  1/4 of 1% per
month of Net Assets allocated to EMC, Northfield, Rabar, and Sunrise on the
first day of each month (a 3% annual rate) and  1/12 of 2% per month of Net
Assets allocated to Graham on the first day of each month (a 2% annual rate).
  The management fee for Spectrum Strategic is accrued at a rate of  1/12 of 3%
per month of Net Assets allocated to Blenheim and Eclipse on the first day of
each month (a 3% annual rate) and  1/12 of 2% per month of Net Assets allocated
to FX Concepts on the first day of each month (a 2% annual rate).


<PAGE>

MORGAN STANLEY SPECTRUM SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

  The management fee for Spectrum Technical is accrued at the rate of  1/12 of
2% per month of Net Assets allocated to JWH and Winton on the first day of each
month (a 2% annual rate) and  1/12 of 3% per month of Net Assets allocated to
Campbell and Chesapeake on the first day of each month (a 3% annual rate).

INCENTIVE FEE.   Spectrum Currency pays a monthly incentive fee equal to 20% of
the trading profits experienced with respect to each trading advisor's
allocated Net Assets as of the end of each calendar month.

  Spectrum Global Balanced pays a monthly incentive fee equal to 15% of the
trading profits experienced with respect to the sole trading advisor's
allocated Net Assets as of the end of each calendar month.

  Spectrum Select pays a monthly incentive fee equal to 15% of the trading
profits experienced with respect to the Net Assets allocated to each of EMC,
Northfield, Rabar, and Sunrise as of the end of each calendar month and 20% of
the trading profits experienced with respect to the Net Assets allocated to
Graham as of the end of each calendar month.

  Spectrum Strategic pays a monthly incentive fee equal to 15% of the trading
profits experienced with respect to the Net Assets allocated to each of
Blenheim and Eclipse as of the end of each calendar month and 20% of the
trading profits experienced with respect to the Net Assets allocated to FX
Concepts as of the end of each calendar month.

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

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

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

<PAGE>

MORGAN STANLEY SPECTRUM SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)


--------------------------------------------------------------------------------
4. FINANCIAL INSTRUMENTS
The Partnerships trade Future Interests. Futures and forwards represent
contracts for delayed delivery of an instrument at a specified date and price.
Risk arises from changes in the value of these contracts and the potential
inability of counterparties to perform under the terms of the contracts. There
are numerous factors which may significantly influence the market value of
these contracts, including interest rate volatility.

  The market value of exchange-traded contracts is based on the settlement
price quoted by the exchange on the day with respect to which market value is
being determined. If an exchange-traded contract could not have been liquidated
on such day due to the operation of daily limits or other rules of the
exchange, the settlement price shall be the settlement price on the first
subsequent day on which the contract could be liquidated. The market value of
off-exchange-traded contracts is based on the fair market value quoted by the
counterparty.
  The Partnerships' contracts are accounted for on a trade-date basis and
marked to market on a daily basis. The Partnerships account for their
derivative investments in accordance with the provisions of Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS No. 133"). SFAS No. 133 defines a derivative as
a financial instrument or other contract that has all three of the following
characteristics:

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

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

(3) Terms require or permit net settlement.

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


<PAGE>

MORGAN STANLEY SPECTRUM SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)

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

SPECTRUM CURRENCY

<TABLE>
<CAPTION>
                      NET UNREALIZED GAINS
                        ON OPEN CONTRACTS        LONGEST MATURITIES
                 ------------------------------- -------------------
                             OFF-                            OFF-
                 EXCHANGE- EXCHANGE-             EXCHANGE- EXCHANGE-
            YEAR  TRADED    TRADED      TOTAL     TRADED    TRADED
            ---- --------- ---------- ---------- --------- ---------
                     $         $          $
            <S>  <C>       <C>        <C>        <C>       <C>
            2005    --      6,202,194  6,202,194    --     Mar. 2006
            2004    --     16,647,953 16,647,953    --     Mar. 2005
</TABLE>

SPECTRUM GLOBAL BALANCED

<TABLE>
<CAPTION>
                      NET UNREALIZED GAINS
                        ON OPEN CONTRACTS      LONGEST MATURITIES
                   --------------------------- -------------------
                               OFF-                        OFF-
                   EXCHANGE- EXCHANGE-         EXCHANGE- EXCHANGE-
              YEAR  TRADED    TRADED    TOTAL   TRADED    TRADED
              ---- --------- --------- ------- --------- ---------
                       $         $        $
              <S>  <C>       <C>       <C>     <C>       <C>
              2005  581,983   20,655   602,638 Mar. 2006 Mar. 2006
              2004  746,251   71,072   817,323 Mar. 2005 Mar. 2005
</TABLE>

SPECTRUM SELECT

<TABLE>
<CAPTION>
                      NET UNREALIZED GAINS
                        ON OPEN CONTRACTS        LONGEST MATURITIES
                 ------------------------------- -------------------
                              OFF-                           OFF-
                 EXCHANGE-  EXCHANGE-            EXCHANGE- EXCHANGE-
            YEAR  TRADED     TRADED     TOTAL     TRADED    TRADED
            ---- ---------- --------- ---------- --------- ---------
                     $          $         $
            <S>  <C>        <C>       <C>        <C>       <C>
            2005 16,351,481 1,834,323 18,185,804 Jun. 2007 Mar. 2006
            2004 13,504,844 1,621,779 15,126,623 Jun. 2006 Mar. 2005
</TABLE>

SPECTRUM STRATEGIC

<TABLE>
<CAPTION>
                  NET UNREALIZED GAINS/(LOSSES)
                        ON OPEN CONTRACTS         LONGEST MATURITIES
                --------------------------------- -------------------
                              OFF-                            OFF-
                EXCHANGE-   EXCHANGE-             EXCHANGE- EXCHANGE-
           YEAR  TRADED      TRADED      TOTAL     TRADED    TRADED
           ---- ---------- ----------  ---------- --------- ---------
                    $           $          $
           <S>  <C>        <C>         <C>        <C>       <C>
           2005 16,488,302 (3,002,519) 13,485,783 Jun. 2010 Jul. 2006
           2004  3,084,000   (424,631)  2,659,369 Mar. 2006 Mar. 2005
</TABLE>

SPECTRUM TECHNICAL

<TABLE>
<CAPTION>
                  NET UNREALIZED GAINS/(LOSSES)
                        ON OPEN CONTRACTS         LONGEST MATURITIES
                --------------------------------- -------------------
                              OFF-                            OFF-
                EXCHANGE-   EXCHANGE-             EXCHANGE- EXCHANGE-
           YEAR  TRADED      TRADED      TOTAL     TRADED    TRADED
           ---- ---------- ----------  ---------- --------- ---------
                    $           $          $
           <S>  <C>        <C>         <C>        <C>       <C>
           2005 26,727,989 (4,663,853) 22,064,136 Jun. 2007 Mar. 2006
           2004 15,108,739 12,233,011  27,341,750 Jun. 2006 Mar. 2005
</TABLE>

<PAGE>

MORGAN STANLEY SPECTRUM SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)


  The Partnerships have credit risk associated with counterparty
nonperformance. As of the date of the financial statements, the credit risk
associated with the instruments in which the Partnerships trade is limited to
the amounts reflected in the Partnerships' Statements of Financial Condition.

  The Partnerships also have credit risk because Morgan Stanley DW, MS&Co.,
MSIL, and/or MSCG act as the futures commission merchants or the
counterparties, with respect to most of the Partnerships' assets.
Exchange-traded futures, forward, options on forward, and futures-styled
options contracts are marked to market on a daily basis, with variations in
value settled on a daily basis. Morgan Stanley DW, MS&Co., and MSIL, each as a
futures commission merchant for each Partnership's exchange-traded futures,
forward, options on forward, and futures-styled options contracts, are
required, pursuant to regulations of the Commodity Futures Trading Commission,
to segregate from their own assets, and for the sole benefit of their commodity
customers, all funds held by them with respect to exchange-traded futures,
forward, options on forward, and futures-styled options contracts, including an
amount equal to the net unrealized gains (losses) on all open futures, forward,
options on forward, and futures-styled options contracts, which funds, in the
aggregate, totaled at December 31, 2005 and 2004 respectively, $44,956,486 and
$49,638,767 for Spectrum Global Balanced, $542,760,780 and $577,340,091 for
Spectrum Select, $178,269,302 and $181,484,461 for Spectrum Strategic, and
$746,142,887 and $761,083,643 for Spectrum Technical. With respect to each
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, each 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 Partnerships are at risk to the ability of MS&Co., the
sole counterparty on all such contracts, to perform. Each Partnership has a
netting agreement with MS&Co. These agreements, which seek to reduce both the
Partnerships' and MS&Co.'s exposure on off-exchange-traded forward currency
contracts, should materially decrease the Partnerships' credit risk in the
event of MS&Co.'s bankruptcy or insolvency.

<PAGE>

MORGAN STANLEY SPECTRUM SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)


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

SPECTRUM CURRENCY

<TABLE>
                 <S>                                 <C>
                 PER UNIT OPERATING PERFORMANCE:
                 NET ASSET VALUE, JANUARY 1, 2005:   $  14.41
                                                     --------
                 NET OPERATING RESULTS:
                   Interest Income                       0.28
                   Expenses                             (0.82)
                   Realized Loss                        (1.54)
                   Unrealized Loss                      (0.55)
                                                     --------
                   Net Loss                             (2.63)
                                                     --------
                 NET ASSET VALUE, DECEMBER 31, 2005: $  11.78
                                                     ========

                 FOR THE 2005 CALENDAR YEAR:
                 RATIOS TO AVERAGE NET ASSETS:
                   Net Investment Loss                 (4.4)%
                   Expenses before Incentive Fees       6.8 %
                   Expenses after Incentive Fees        6.8 %
                   Net Loss                           (21.4)%
                 TOTAL RETURN BEFORE INCENTIVE FEES   (18.3)%
                 TOTAL RETURN AFTER INCENTIVE FEES    (18.3)%

                 INCEPTION-TO-DATE RETURN              17.8 %
                 COMPOUND ANNUALIZED RETURN             3.0 %
</TABLE>

SPECTRUM GLOBAL BALANCED

<TABLE>
                <S>                                    <C>
                PER UNIT OPERATING PERFORMANCE:
                NET ASSET VALUE, JANUARY 1, 2005:      $ 14.61
                                                       -------
                NET OPERATING RESULTS:
                  Interest Income                         0.43
                  Expenses                               (0.85)
                  Realized Profit                         1.11
                  Unrealized Loss                        (0.07)
                  Proceeds from Litigation Settlement     0.00
                                                       -------
                  Net Income                              0.62
                                                       -------
                NET ASSET VALUE, DECEMBER 31, 2005:    $ 15.23
                                                       =======

                FOR THE 2005 CALENDAR YEAR:
                RATIOS TO AVERAGE NET ASSETS:
                  Net Investment Loss                   (2.9)%
                  Expenses before Incentive Fees         5.9 %
                  Expenses after Incentive Fees          5.9 %
                  Net Income                             3.9 %
                TOTAL RETURN BEFORE INCENTIVE FEES       4.2 %
                TOTAL RETURN AFTER INCENTIVE FEES        4.2 %

                INCEPTION-TO-DATE RETURN                52.3 %
                COMPOUND ANNUALIZED RETURN               3.8 %
</TABLE>

<PAGE>

MORGAN STANLEY SPECTRUM SERIES

NOTES TO FINANCIAL STATEMENTS
(continued)


SPECTRUM SELECT

<TABLE>
<S>                                                     <C>
PER UNIT OPERATING PERFORMANCE:
NET ASSET VALUE, JANUARY 1, 2005:                       $  28.88
                                                        --------
NET OPERATING RESULTS:
 Interest Income                                            0.63
 Expenses                                                  (2.54)
 Realized Profit                                            0.33
 Unrealized Profit                                          0.15
 Proceeds from Litigation Settlement                        0.00
                                                        --------
 Net Loss                                                  (1.43)
                                                        --------
NET ASSET VALUE, DECEMBER 31, 2005:                     $  27.45
                                                        ========

FOR THE 2005 CALENDAR YEAR:
RATIOS TO AVERAGE NET ASSETS:
 Net Investment Loss                                      (7.2)%
 Expenses before Incentive Fees                            9.5 %
 Expenses after Incentive Fees                             9.5 %
 Net Loss                                                 (5.3)%
TOTAL RETURN BEFORE INCENTIVE FEES                        (5.0)%
TOTAL RETURN AFTER INCENTIVE FEES                         (5.0)%

INCEPTION-TO-DATE RETURN                                 174.5 %
COMPOUND ANNUALIZED RETURN                                 7.3 %
</TABLE>

SPECTRUM STRATEGIC

<TABLE>
<S>                                                     <C>
PER UNIT OPERATING PERFORMANCE:
NET ASSET VALUE, JANUARY 1, 2005:                       $ 14.56
                                                        -------
NET OPERATING RESULTS:
 Interest Income                                           0.31
 Expenses                                                 (1.44)
 Realized Loss                                            (0.10)
 Unrealized Profit                                         0.85
 Proceeds from Litigation Settlement                       0.00
                                                        -------
 Net Loss                                                 (0.38)
                                                        -------
NET ASSET VALUE, DECEMBER 31, 2005:                     $ 14.18
                                                        =======

FOR THE 2005 CALENDAR YEAR:
RATIOS TO AVERAGE NET ASSETS:
 Net Investment Loss                                     (8.4)%
 Expenses before Incentive Fees                           9.4 %
 Expenses after Incentive Fees                           10.8 %
 Net Loss                                                (3.3)%
TOTAL RETURN BEFORE INCENTIVE FEES                       (1.4)%
TOTAL RETURN AFTER INCENTIVE FEES                        (2.6)%

INCEPTION-TO-DATE RETURN                                 41.8 %
COMPOUND ANNUALIZED RETURN                                3.2 %
</TABLE>

<PAGE>

MORGAN STANLEY SPECTRUM SERIES

NOTES TO FINANCIAL STATEMENTS
(concluded)


SPECTRUM TECHNICAL

<TABLE>
<S>                                                     <C>
PER UNIT OPERATING PERFORMANCE:
NET ASSET VALUE, JANUARY 1, 2005:                       $  23.63
                                                        --------
NET OPERATING RESULTS:
 Interest Income                                            0.51
 Expenses                                                  (2.10)
 Realized Profit                                            0.48
 Unrealized Loss                                           (0.16)
 Proceeds from Litigation Settlement                        0.00
                                                        --------
 Net Loss                                                  (1.27)
                                                        --------
NET ASSET VALUE, DECEMBER 31, 2005:                     $  22.36
                                                        ========

FOR THE 2005 CALENDAR YEAR:
RATIOS TO AVERAGE NET ASSETS:
 Net Investment Loss                                      (7.3)%
 Expenses before Incentive Fees                            9.3 %
 Expenses after Incentive Fees                             9.6 %
 Net Loss                                                 (5.4)%
TOTAL RETURN BEFORE INCENTIVE FEES                        (5.0)%
TOTAL RETURN AFTER INCENTIVE FEES                         (5.4)%

INCEPTION-TO-DATE RETURN                                 123.6 %
COMPOUND ANNUALIZED RETURN                                 7.5 %
</TABLE>

<PAGE>


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