--------------------------------------------------------------------------------

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

                                    FORM 10-K

 ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
                          COMMISSION FILE NO. 333-46550

                                       OR

                        FOR THE TRANSITION PERIOD FROM TO

                          SHAFFER DIVERSIFIED FUND, LP
                (Name of registrant as specified in its charter)

                    DELAWARE                                 13-4132934
                    --------                                 ----------
        (State or other jurisdiction of                   (I.R.S. Employer
         Incorporation or organization)                 Identification No.)

            925 WESTCHESTER AVENUE,                            10604
                                                               -----
             WHITE PLAINS, NEW YORK                          (Zip Code)
             ----------------------
    (Address of principal executive offices)

         Issuer's Telephone Number, including Area Code: (800) 352-5265
                                                         --------------

           Securities registered under Section 12(b) of the Act: NONE

                       Securities registered under Section
                               12(g) of the Act:

                                      NONE
                                (Title of Class)

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 in response to Item
405 of Regulation S-K is not contained in this form, and no disclosure will 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 to this Form 10-K. Yes  X    No
                                       -----    ------
The Registrant has no voting stock. As of December 31, 2002 there were no Units
of Limited Partnership Interests issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE
Prospectus dated October 25, 2002 included within the Registration Statement on
Form S-1 (File No. 333-4655), incorporated by reference into Parts I and II.






<PAGE>

                  SHAFFER DIVERSIFIED FUND, LP

                              INDEX

 PART I - FINANCIAL INFORMATION                                        Page No.
 ------------------------------                                        --------

   Item 1.   Financial Statements

             Statements of Financial Condition                               3
             as of December 31, 2002 (unaudited)
             and December 31, 2001 (audited)

             Statements of Operations (unaudited) for the                    4
             Years ended December 31, 2002 and 2001 (audited)


             Statements of Cash Flows (uaudited) for the                     5
             Years Ended December 31, 2002 and 2001 (audited)

             Statements of Changes in Partners' Capital                      6
             (unaudited) for the Years Ended December 31, 2002
             and 2001 (audited)


             Notes to Financial Statements (unaudited)                       7


   Item 2.   Management's Discussion and Analysis                           10
             of Financial Condition and Results of Operations


 PART II - OTHER INFORMATION                                                11
 ---------------------------

   Item 1.   Legal Proceedings

   Item 2.   Changes in Securities and Use of Proceeds

   Item 3.   Defaults Upon Senior Securities

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

   Item 5.   Other Information

   Item 6.   Exhibits and Reports on Form 8-K


<PAGE>

                          SHAFFER DIVERSIFIED FUND, LP
                        STATEMENTS OF FINANCIAL CONDITION
          DECEMBER 31, 2002 (UNAUDITED) AND DECEMBER 31, 2001 (AUDITED)
<TABLE>
<CAPTION>
                                                                      December 31,    December 31,
                                                                        2002             2001
                                                                      --------         --------
<S>                                                                   <C>              <C>
ASSETS:

             Cash                                                         --                586
             Cash in escrow account                                       --            413,000
                                                                      --------         --------
                                                                             0          413,586
                                                                      --------         --------

                   Total assets                                       $      0         $413,586
                                                                      ========         ========
LIABILITIES:
      Subscription deposits                                           $   --           $413,000
                                                                      --------         --------
                   Total liabilities                                         0          413,000
                                                                      --------         --------
PARTNERS' CAPITAL (Net Asset Value)
      General Partner - 0 units
             outstanding at December 31, 2002
             and 1 unit at December 31, 2001                              --                586

      Limited Partners - 0 units
             outstanding at December 31, 2002
             and 1 unit at December 31, 2001                              --               --
                                                                      --------         --------
                   Total partners' capital
                     (Net Asset Value)                                       0              586
                                                                      --------         --------

                   Total partners' capital and liabilities            $      0         $413,586
                                                                      ========         ========

</TABLE>

                  See accompanying Notes to the Financial Statements.



<PAGE>


                          SHAFFER DIVERSIFIED FUND, LP
                            STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
<TABLE>
<CAPTION>
                                                              Unaudited    Audited
                                                                2002        2001
                                                              --------    --------
<S>                                                           <C>         <C>
INCOME
      Trading gains
             Realized                                         $ 67,441    $   --
             Change in unrealized                                 --          --
                                                              --------    --------

                   Gains (losses) from trading                  67,441           0

      Investment income
             Interest income                                    13,601        --
                                                              --------    --------

                   Total income (loss)                          81,042           0
                                                              --------    --------

OPERATING EXPENSES:
      Brokerage trading fees                                  $ 22,278    $   --
      Management fees                                           33,665        --
      Operating expenses                                        17,112       1,330
                                                              --------    --------

                   Total expenses                               73,055       1,330
                                                              --------    --------
      Net income (loss) before special
             allocation to the General Partner                   7,987      (1,330)

      Special allocation to the general partner                 19,052        --
                                                              --------    --------

      NET INCOME (LOSS) AVAILABLE FOR
             PRO RATA DISTRIBUTION                            $(11,065)   $ (1,330)
                                                              ========    ========


NET INCOME (LOSS) PER UNIT OF PARTNERSHIP INTEREST
      Weighted average number of units outstanding
             during the period                                1,068.225      2.000
                                                              ========    ========

Net Income (Loss) per unit                                    $ (10.36)   $(665.00)
                                                              ========    ========
</TABLE>

               See accompanying Notes to the Financial Statements.
<PAGE>

                          SHAFFER DIVERSIFIED FUND, LP
                            STATEMENTS OF CASH FLOWS
                 For the Years Ended December 31, 2002 and 2001
<TABLE>
<CAPTION>
                                                                                  Unaudited      Audited
                                                                                    2002           2001
                                                                                  ---------     ---------
<S>                                                                               <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
            Net income (loss)                                                     $   7,987    $  (1,330)
            Adjustments to reconcile net income (loss) to
              net cash used in operating activities
                Net change in unrealized - Futures Contracts                             --           --
                Net change in unrealized - US Government Securities                      --
                Net (purchases) of investments
                             in United States Government Securities                      --
                Increase in account payable and
                             accrued expenses                                            --            --
                                                                                  ---------     ---------
                Net cash used in operating activities                                 7,987        (1,330)
                                                                                  ---------     ---------
CASH FLOWS
FROM FINANCING ACTIVITIES
            Addition of units                                                     1,161,000            --
            Sales charges and syndication fees                                      (55,550)           --
            Redemption of units and withdrawals                                   1,114,023            --
                                                                                  ---------     ---------

                Net cash provided by financing activities                            (8,573)           --
                                                                                  =========     =========

Net decrease in cash and cash equivalents                                              (586)       (1,330)
                                                                                  ---------     ---------

CASH AND CASH EQUIVALENTS
            Beginning of period                                                         586         1,916
            End of period                                                         $       0     $     586
                                                                                  =========     =========

End of period cash and cash equivalents consists of:
            Cash in bank                                                                 --           586
                                                                                  ---------     ---------
                Total end of period cash and cash equivalents                     $       0     $     586
                                                                                  =========     =========

Supplemental Disclosure of Non Cash Financing Activities:

            Subscription deposits received in advance                             $ 413,000     $      --
                                                                                  =========     =========
</TABLE>

See accompanying Notes to the Financial Statements

<PAGE>
                          SHAFFER DIVERSIFIED FUND, LP
                   STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
                                 NET ASSET VALUE
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                        Total                       Partners' Capital
                                                        Units         General          Limited         Total
                                                     -----------    -----------      -----------    -----------
<S>                                                  <C>            <C>              <C>            <C>
YEAR ENDED DECEMBER 31, 2002
Balances at December 31, 2001                               2.00    $      (414)           1,000    $       586

Additions                                              1,150.203         50,000        1,111,000      1,161,000

Allocation of net income
     For the year ended December 31, 2002:
     Special allocation to the General Partner            18.161         19,052                          19,052

     Net income available for
     pro rata distribution                                                 (497)         (10,568)       (11,065)

Sales charges and syndication fees                                                       (55,550)       (55,550)

Redemptions and withdrawals                           (1,170.364)       (68,141)      (1,045,882)    (1,114,023)
                                                     -----------    -----------      -----------    -----------
Balances at December 31, 2002                              0.000    $         0      $         0    $         0
                                                     ===========    ===========      ===========    ===========
Net asset value per unit

     At December 31, 2002                                                            $      0.00
                                                                                     ===========

     At December 31, 2001                                                            $    293.00
                                                                                     ===========
</TABLE>

                 See accompanying Notes to the Financial Statements.
<PAGE>


                          SHAFFER DIVERSIFIED FUND, LP
                          NOTES TO FINANCIAL STATEMENTS

         The financial statements are unaudited (except for the balance sheet
         information as of December 31, 2001 and the statement of operations for
         the year ended December 31, 2001, which is derived from the Fund's
         audited financial statements) and reflect all adjustments (consisting
         only of normal recurring adjustments), which are, in the opinion of
         management, necessary for a fair presentation of the financial position
         and operating results for the periods. The financial statements should
         be read in conjunction with the notes thereto, together with
         management's discussion and analysis of financial condition and results
         of operations.

         NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


           A) GENERAL DESCRIPTION


                  Shaffer Diversified Fund, LP (the "Partnership" or the "Fund")
                  was a limited partnership organized on August 29, 2000 under
                  the Delaware Revised Uniform Limited Partnership Act. The Fund
                  was a commodity investment pool. Specifically, the Fund
                  invested in a diversified portfolio consisting primarily of
                  currency, interest rate, grain, metal and energy futures
                  contracts.


                  The Fund discontinued its trading as of December 19, 2002,
                  returned all proceeds of the Fund to the Partners and
                  terminated its existence as of December 31, 2002.


                  The General Partner of the Fund was Shaffer Asset Management,
                  Inc. The General Partner was also the commodity-trading
                  advisor of the Fund. On December 19, 2002, Shaffer Asset
                  Management, Inc. ceased the trading operations of the Fund,
                  returned the proceeds to the Partners, terminated the trading
                  advisory agreement, terminated all other agreements with the
                  Fund and withdrew as the General Partner of the Fund.





              B) FINANCIAL STATEMENT REPORTING


                  The Fund's financial statements are presented in conformity
                  with generally accepted accounting principles, which require
                  using certain estimates and assumptions made by the Fund's
                  management that affect the reported amounts of assets and
                  liabilities and disclosure of contingent assets and
                  liabilities at the date of the financial statements and the
                  reported amounts of revenues and expenses during the reporting
                  period. Actual results may differ from these estimates.


                  Transactions are accounted for on the trade date. Gains or
                  losses are realized when contracts are liquidated. Unrealized
                  gains and losses on open contracts (the difference between
                  contract trade price and market price) are reported in the
                  statement of financial position as a net gain or loss, as
                  there exists a right of offset of unrealized gains or losses
                  in accordance with Financial Accounting Standards Board
                  Interpretation No. 39 - "Offsetting of Amounts Related to
                  Certain Contracts." Any change in net unrealized gain or loss
                  from the preceding period is reported in the statement of
                  operations. Brokerage expenses and other trading fees paid
                  directly to the broker are included in "brokerage fees" and
                  are charged to expenses when contracts are open. United States
                  government securities are stated at cost plus accrued
                  interest, which approximates market value.






<PAGE>


              C) CASH AND CASH EQUIVALENTS


                  Cash and cash equivalents includes cash and money market
                  deposits held at financial institutions and short term
                  securities with maturity dates of less than three months from
                  the date of the financial statements.



              D) INCOME TAXES


                  The Partnership is not subject to income taxes. The partners
                  report their allocable share of income, expense and trading
                  gains or losses on their own tax returns.





              E) ORGANIZATION COSTS AND OPERATING EXPENSES


                  The General Partner had agreed to pay all expenses associated
                  with the organization of the Fund. Shaffer Asset Management,
                  Inc. incurred total costs in connection with the organization
                  of the Fund of approximately $463,000 through December 31,
                  2002. Shaffer Asset Management, Inc has terminated this
                  agreement.




              F) REGULATION


                  The Fund's operations are regulated by the provisions of the
                  Commodity Exchange Act, the regulations of the Commodity
                  Futures Trading Commission, and the rules of the National
                  Futures Association. The Fund is subject to regulatory
                  requirements under the Securities Act of 1933 and the
                  Securities Exchange Act of 1934. As a commodity investment
                  pool, the Fund is subject to the regulations of the Commodity
                  Futures Trading Commission, an agency of the United States
                  ("US") Government which regulates most aspects of the
                  commodity futures industry; the rules of the National Futures
                  Association, an industry self-regulatory organization; and the
                  requirements of the various commodity exchanges where the Fund
                  executes transactions. Additionally, the Fund is subject to
                  the requirements of Futures Commission Merchants or Brokers
                  through which the Fund trades.


                  In addition to such registration requirements, the CFTC and
                  certain commodity exchanges have established limits on the
                  maximum net long and net short positions which any person,
                  including the Fund, may hold or control in particular
                  commodities. Most exchanges also limit the maximum changes in
                  futures contract prices that may occur during a single trading
                  day.





              G) ALLOCATION OF INCOME


                  The General Partner and each Limited Partner share in the
                  profits and losses of the partnership in proportion to their
                  respective interests in the partnership, except for the
                  incentive allocation to the General Partner. A Limited
                  Partner's loss is limited to the amount of his or her
                  investment.





              H) NET ASSET VALUE PER UNIT


                  Net Asset Value is calculated by dividing the Net Assets of
                  the Fund at the end of the reporting period by the number of
                  Fund Units outstanding at the end of the reporting period.


                  The Net Assets of the Fund is equal to: total assets, less
                  total liabilities, of the Fund determined on the basis of
                  generally accepted accounting principles. Net Assets shall
                  include any unrealized profits or losses on open positions,
                  and any fee or expense including net asset fees accruing to
                  the Fund.



<PAGE>





         NOTE 2. GENERAL PARTNER AND COMMODITY TRADING ADVISOR


              The General Partner of the Fund was Shaffer Asset Management, Inc.
              The General Partner was also the commodity-trading advisor of the
              Fund. On December 19, 2002, Shaffer Asset Management, Inc. closed
              the Fund, returned the proceeds to the Partners, terminated the
              trading advisory agreement, terminated all other agreements with
              the Fund and withdrew as the General Partner of the Fund.


              The General Partner shares in all Fund income and losses to the
              extent of its interest in the Fund. The General Partner also
              received on a quarterly basis an incentive allocation from the
              Fund equivalent to 15% per year of any increase in the cumulative
              appreciation of the net asset value of the Fund, as defined in the
              Partnership Agreement.





         NOTE 3. DEPOSITS WITH BROKER AND FINANCIAL INSTITUTIONS


              The Fund deposits assets with a broker subject to Commodity
              Futures Trading Commission regulations and various exchange and
              broker requirements and other financial institutions. The Fund
              satisfies margin requirements by depositing U.S. Treasury bills
              and cash with such broker and other financial institutions. The
              Fund earns interest income on these assets.





         NOTE 4. SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS


              Investments in the Fund were made by subscription agreement,
subject to acceptance by Shaffer Asset.





         NOTE 5. TRADING ACTIVITIES AND RELATED RISKS


              The Fund engaged in the speculative trading of US commodity
              futures contracts, which are derivative financial instruments.

<PAGE>



         ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS


         OVERVIEW


         Shaffer Diversified Fund, LP (the "Partnership" or the "Fund") was a
         limited partnership organized on August 29, 2000 under the Delaware
         Revised Uniform Limited Partnership Act as an investment vehicle that
         allowed investors to include commodity futures contracts traded on the
         United States commodity futures markets in their portfolios in the same
         way that they include mutual funds, money market funds and limited
         partnerships.


         The Fund originally filed a registration statement with the United
         States Securities and Exchange Commission on September 25, 2000 for the
         sale of a minimum of $1,000,000 and a maximum of $25,000,000 in Units
         of Limited Partnership at $1,000.00 each, ($950.00 + $50.00 sales
         charges & syndication fees), which registration statement was declared
         effective on October 16, 2001. The Fund's initial offering period
         lasted approximately 120 days and ended February 13, 2002. During the
         initial offering the Fund accepted subscriptions for 1,049 Units of
         Limited Partnership Interests at a selling price of $1,000.00 ($950.00
         + $50.00 sales charges & syndication fees) for a total of $1,049,000.
         Selling charges and expenses of $49,950.were disbursed at closing and
         the Fund commenced trading activities with net proceeds of $996,550.
         The Fund commenced trading February 14, 2002.


         The Fund discontinued its trading as of December 19, 2002, returned all
         proceeds of the Fund to the Partners and terminated its existence as of
         December 31, 2002.



         RESULTS OF OPERATIONS


         The Fund commenced trading operations February 14, 2002 and
         discontinued December 19, 2002. The return for the year ending December
         31, 2002 was -0-%.

<PAGE>

                           PART II - OTHER INFORMATION

<TABLE>
<CAPTION>

<S>                                     <C>
ITEM 1. Legal Proceedings

        None.

ITEM 2. Changes in Securities and Use of Proceeds

         The Fund terminated its trading operations, liquidated all
         assets, distributes the entire proceeds to the Partners and
         ceased existence.

ITEM 3. Defaults Upon Senior Securities

        None.

ITEM 4. Submission of Matters to a Vote of Security Holders

        None.

ITEM 5. Other Information

        None.

ITEM 6. Exhibits and Reports on Form 8-K


        A. Exhibits

           Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the
           United States Code - Daniel S. Shaffer

           Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the
           United States Code - Bruce I. Greenberg

        B. Reports on Form 8-K

                     None.
</TABLE>



<PAGE>
                                   SIGNATURES

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




                                              Shaffer Diversified Fund, LP

                                              By: Shaffer Asset Management, Inc.

                                              General Partner




          Date: January 28, 2003




                                        By:

                                          /s/ Bruce Ira Greenberg
                                          ------------------------
                                          Bruce I Greenberg
                                          Chief Financial Officer

                                          VP/Treasurer/Director


<PAGE>





                                  EXHIBIT INDEX

      Exhibit
      Index    Exhibit
     -------   -------

      99.1 Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of
           the United States Code - Daniel S. Shaffer

      99.2 Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of
           the United States Code - Bruce I. Greenberg




<PAGE>