November 1, 2004
	Supplement
SUPPLEMENT DATED NOVEMBER 1, 2004 TO THE PROSPECTUS OF Morgan Stanley Tax-Free Daily Income Trust Dated March 18, 2004 Effective November 1, 2004, the Board of Trustees of the Fund approved amending and restating the existing investment management agreement for the Fund ("Current Investment Management Agreement") to remove the administration services component from the Current Investment Management Agreement. Morgan Stanley Investment Advisors Inc., the Fund's Investment Manager ("MSIA"), will continue to provide investment advisory services under the amended and restated investment advisory agreement. The administration services previously provided to the Fund by MSIA will be provided by Morgan Stanley Services Company Inc. ("Administrator") pursuant to a separate administration agreement entered into by the Fund with the Administrator for a fee of 0.05% of the Fund's daily net assets. Under the amended and restated investment advisory agreement, the advisory fee was reduced to 0.45% of the portion of the daily net assets not exceeding $500 million; 0.375% of the portion of the daily net assets exceeding $500 million but not exceeding $750 million; 0.325% of the portion of the daily net assets exceeding $750 million but not exceeding $1 billion; 0.30% of the portion of the daily net assets exceeding $1 billion but not exceeding $1.5 billion; 0.275% of the portion of the daily net assets exceeding $1.5 billion but not exceeding $2 billion; 0.25% of the portion of the daily net assets exceeding $2 billion but not exceeding $2.5 billion; 0.225% of the portion of the daily net assets exceeding $2.5 billion but not exceeding $3 billion; 0.20% of the portion of daily net assets exceeding $3 billion but not exceeding $15 billion; and 0.199% of the portion of the daily net assets exceeding $15 billion. Although the entities providing administration services to the Fund have changed, the Morgan Stanley personnel performing such services will remain the same. Furthermore, the changes will not result in any increase in the amount of total combined fees paid by the Fund for investment advisory and administration services, or any decrease in the nature or quality of the investment advisory or administration services received by the Fund. All references in the Prospectus to the "Investment Manager" are changed to "Investment Adviser." PLEASE RETAIN THIS SUPPLEMENT FOR YOUR FUTURE REFERENCE.
37955SPT-01