Here's the appropriate part of the admission letter:  
 
"We are happy to inform you that we are able to offer             you admission to our Master’s degree program for the start             of Fall quarter 2011-2012.  Congratulations! While you applied directly to our PhD program, this             year the number of well-qualified applicants has far             exceeded the number of people we can accept.              Students enrolled under the MS option exclusively             pursue the Master of Science degree. You may, however, take             the PhD qualifying examination and advance to PhD candidacy             by filing a petition with the EE Admissions Office after             completing two full quarters of graduate study (excluding             summer) and identifying a faculty advisor." 
 
 
and their response when I asked about funding: 
 
"Thank you for your email. We are currently in the process of       allocating funds and students will know no later than April 20 if       they receive a fellowship. Fellowship       awards are based upon merit achievement, including undergraduate       academic performance and research potential. Recipients receive       8-10 units of tuition per quarter and a quarterly stipend, usually       for up to 3 quarters. Incoming students who are admitted to the Ph.D. program       will also be considered for the Stanford Graduate Fellowship, a       prestigious three-year University award. More information on the       Stanford Graduate Fellowship can be found online." 
 
 
 
So you're saying that since I'm not yet accepted to PhD I won't be offered funding?