N-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number: 811-07377

Morgan Stanley Capital Opportunities Trust

(Exact name of registrant as specified in charter)

522 Fifth Avenue, New York, New York	10036
(Address of principal executive offices)	(Zip code)

Randy Takian
522 Fifth Avenue, New York, New York 10036

(Name and address of agent for service)

Registrant’s telephone number, including area code: 212-296-6963

Date of fiscal year end: November 30, 2009

Date of reporting period: August 31, 2009

Item 1. Schedule of Investments.

The Fund’s schedule of investments as of the close of the reporting period prepared pursuant to Rule 12-12 of Regulation S-X is as follows:

Morgan Stanley Capital Opportunities Trust

Portfolio of Investments § August 31, 2009 (unaudited)

NUMBER OF
SHARES			VALUE
		Common Stocks (95.6%)
		Air Freight & Logistics (2.4%)
	208,485	Expeditors International of Washington, Inc.	$	6,809,120
		Capital Markets (4.3%)
	155,687	Greenhill & Co., Inc.		12,330,410
		Chemicals (5.0%)
	169,625	Monsanto Co.		14,228,145
		Communications Equipment (2.3%)
	89,912	Research In Motion Ltd. (Canada) (a)		6,568,971
		Computers & Peripherals (6.1%)
	103,327	Apple, Inc. (a)		17,380,635
		Construction Materials (1.2%)
	257,220	Cemex SAB de CV (ADR) (Mexico) (a)		3,415,882
		Distributors (3.1%)
	2,684,465	Li & Fung Ltd. (Bermuda) (b)(c)		8,867,898
		Diversified Financial Services (6.6%)
	992,610	BM&F BOVESPA SA (Brazil)		6,130,410
	18,164	CME Group, Inc.		5,286,451
	295,038	Leucadia National Corp. (a)		7,337,595
				18,754,456
		Health Care Technology (3.2%)
	228,099	Athenahealth, Inc. (a)		9,176,423
		Hotels, Restaurants & Leisure (5.4%)
	165,983	Ctrip.com International Ltd. (ADR) (Cayman Islands) (a)		8,123,208
	136,279	Wynn Resorts Ltd. (a)		7,376,782
				15,499,990
		Household Durables (1.0%)
	97,398	Gafisa SA (ADR) (Brazil)		2,854,735
		Information Technology Services (6.4%)
	59,837	Mastercard, Inc. (Class A)		12,124,771
	441,728	Redecard SA (Brazil)		6,016,426
				18,141,197
		Internet & Catalog Retail (5.8%)
	201,734	Amazon.com, Inc. (a)		16,378,783
		Internet Software & Services (15.6%)
	28,959	Baidu.com, Inc. (ADR) (Cayman Islands) (a)		9,558,208
	40,256	Google, Inc. (Class A) (a)		18,584,987
	1,100,000	Tencent Holdings Ltd. (Cayman Islands) (b)		16,359,825
				44,503,020
		Life Sciences Tools & Services (5.9%)
	237,795	Illumina, Inc. (a)		8,387,030
	134,303	Techne Corp.		8,282,466
				16,669,496
		Media (1.8%)
	114,537	Morningstar, Inc. (a)		5,073,989
		Oil, Gas & Consumable Fuels (7.2%)
	165,625	Range Resources Corp.		8,011,281
	11,495	Southwestern Energy Co. (a)		423,706
	262,531	Ultra Petroleum Corp. (Canada) (a)		12,189,314
				20,624,301
		Professional Services (2.6%)
	193,927	Costar Group, Inc. (a)		7,359,530
		Real Estate Management & Development (3.7%)
	513,846	Brookfield Asset Management, Inc. (Class A) (Canada)		10,446,489
		Semiconductors & Semiconductor Equipment (3.2%)
	360,674	Tessera Technologies, Inc. (a)		9,063,738
		Software (2.8%)
	151,971	Salesforce.com, Inc. (a)		7,882,736
		Total Common Stocks (Cost $260,725,451)		272,029,944

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Morgan Stanley Capital Opportunities Trust

Portfolio of Investments § August 31, 2009 (unaudited) continued

NUMBER OF
SHARES (000)
		Short-Term Investment (d)(4.4%)
		Investment Company
	12,484	Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class (Cost $12,483,649)			$	12,483,649
		Total Investments (Cost $273,209,100) (e)	100.0	%		284,513,593
		Liabilities in Excess of Other Assets	(0.0	)		(22,394	)
		Net Assets	100.0	%	$	284,491,199

ADR	American Depositary Receipt.
(a)	Non-income producing security.
(b)	Securities with a total market value equal to $25,227,723 have been valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund’s Trustees. Such fair value measurements may be level 2 measurements if observable inputs are available.
(c)	Security trades on a Hong Kong exchange.
(d)	The Fund invests in Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class, an open-end management investment company managed by the Investment Adviser. Investment advisory fees paid by the Fund are reduced by an amount equal to the advisory and administrative service fees paid by Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class with respect to assets invested by the Fund in Morgan Stanley Institutional Liquidity Funds — Money Market Portfolio — Institutional Class.
(e)	The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes.

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MS Capital Opportunities Trust
Notes to the Portfolio of Investments
SFAS 157 Disclosure
8/31/2009

The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”), effective December 1, 2007. In accordance with SFAS 157, fair value is defined as the price that the Fund would receive to sell an investment or pay to transfer a liability in a timely transaction with an independent buyer in the principal market, or in the absence of a principal market the most advantageous market for the investment or liability. SFAS 157 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed baed on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Fund’s investments. The inputs are summarized in the three broad levels listed below.

Level 1 – unadjusted quoted prices in active markets for identical investments

Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)

Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities and the determination of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each security.

The following is a summary of the inputs used as of August 31, 2009 in valuing the Fund’s investments carried at value:

	Fair Value Measurements at August 31, 2009 Using
			Unadjusted
			Quoted Prices In		Significant		Significant
			Active Market for		Other Observable		Unobservable
			Identical Investments		Inputs		Inputs
Investment Type	Total		(Level 1)		(Level 2)		(Level 3)
Common Stocks
Air Freight & Logistics	$	6,809,120	$	6,809,120		—		—
Capital Markets		12,330,410		12,330,410		—		—
Chemicals		14,228,145		14,228,145		—		—
Communications Equipment		6,568,971		6,568,971		—		—
Computers & Peripherals		17,380,635		17,380,635		—		—
Construction Materials		3,415,882		3,415,882		—		—
Distributors		8,867,898		—	$	8,867,898		—
Diversified Financial Services		18,754,456		18,754,456		—		—
Health Care Technology		9,176,423		9,176,423		—		—
Hotels, Restaurants & Leisure		15,499,990		15,499,990		—		—
Household Durables		2,854,735		2,854,735		—		—
Internet & Catalog Retail		16,378,783		16,378,783		—		—
Internet Software & Services		44,503,020		28,143,195		16,359,825		—
Information Technology Services		18,141,197		18,141,197		—		—
Life Sciences Tools & Services		16,669,496		16,669,496		—		—
Media		5,073,989		5,073,989		—		—
Oil, Gas & Consumable Fuels		20,624,301		20,624,301		—		—
Professional Services		7,359,530		7,359,530		—		—
Real Estate Management & Development		10,446,489		10,446,489		—		—
Semiconductors & Semiconductor Equipment		9,063,738		9,063,738		—		—
Software		7,882,736		7,882,736		—		—
Total Common Stocks		272,029,944		246,802,221		25,227,723		—
Short-Term Investment — Investment Company		12,483,649		12,483,649		—		—
Total	$	284,513,593	$	259,285,870	$	25,227,723		—

Valuation of Investments — (1) an equity portfolio security listed or traded on the New York Stock Exchange (“NYSE”) or American Stock Exchange or other exchange is valued at its latest sale price prior to the time when assets are valued; if there were no sales that day, the security is valued at the mean between the last reported bid and ask price; (2) an equity portfolio security listed or traded on the Nasdaq is valued at the Nasdaq Official Closing Price; if there were no sales that day, the security is valued at the mean between the last reported bid and ask price; (3) all other portfolio securities for which over-the-counter market quotations are readily available are valued at the mean between the last reported bid and ask price. In cases where a security is traded on more than one exchange, the security is valued on the exchange designated as the primary market; (4) for equity securities traded on foreign exchanges, the last reported sale price or the latest bid price may be used if there were no sales on a particular day; (5) when market quotations are not readily available including circumstances under which Morgan Stanley Investment Advisors Inc. (the “Investment Adviser”) determines that the latest sale price, the bid price or the mean between the last reported bid and ask price do not reflect a security’s market value, portfolio securities are valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund’s Trustees. Occasionally, developments affecting the closing prices of securities and other assets may occur between the times at which valuations of such securities are determined (that is, close of the foreign market on which the securities trade) and the close of business on the NYSE. If developments occur during such periods that are expected to materially affect the value of such securities, such valuations may be adjusted to reflect the estimated fair value of such securities as of the close of the NYSE, as determined in good faith by the Fund’s Trustees or by the Investment Adviser using a pricing service and/or procedures approved by the Trustees of the Fund; (6) certain portfolio securities may be valued by an outside pricing service approved by the Fund’s Trustees; (7) investments in open-end mutual funds, including the Morgan Stanley Institutional Liquidity Funds, are valued at the net asset value as of the close of each business day; and (8) short-term debt securities having a maturity date of more than sixty days at time of purchase are valued on a mark-to-market basis until sixty days prior to maturity and thereafter at amortized cost based on their value on the 61st day. Short-term debt securities having a maturity date of sixty days or less at the time of purchase are valued at amortized cost, which approximates market value.

Item 2. Controls and Procedures.

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

(b) There were no changes in the Fund’s internal control over financial reporting that occurred during the registrant’s fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Fund’s internal control over financial reporting.

Item 3. Exhibits.

(a) A separate certification for each principal executive officer and principal financial officer of the registrant are attached hereto.

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SIGNATURES

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

Morgan Stanley Capital Opportunities Trust

/s/ Randy Takian

Randy Takian
Principal Executive Officer
October 22, 2009

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

/s/ Randy Takian

Randy Takian
Principal Executive Officer
October 22, 2009

/s/ Francis Smith

Francis Smith
Principal Financial Officer
October 22, 2009

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EX-99.CERT

Exhibit 3 A1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Randy Takian, certify that:

1.	I have reviewed this report on Form N-Q of Morgan Stanley Capital Opportunities Trust;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Omitted;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 22, 2009

/s/ Randy Takian  

Randy Takian 

Principal Executive Officer 

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Exhibit 3 A2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Francis Smith, certify that:

1.	I have reviewed this report on Form N-Q of Morgan Stanley Capital Opportunities Trust;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Omitted;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

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

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 22, 2009

/s/ Francis Smith  

Francis Smith 

Principal Financial Officer 

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