UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended September 30, 2007

OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period fromto

Commission File Number000-16526

HUTTON INVESTORS FUTURES FUND L.P. II(Exact name of registrant as specified in its charter)Delaware


13-3406160(State or other jurisdiction of
incorporation or organization)


(I.R.S. Employer
Identification No.)c/o Citigroup Managed Futures LLC
731 Lexington Avenue – 25th Fl.
New York, New York 10022(Address of principal executive offices) (Zip Code)(212) 559-2011(Registrant’s telephone number, including area code)


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.

YesXNo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of ‘‘accelerated filer and large accelerated filer’’ in Rule 12b-2 of the Exchange Act. (check one):

Large accelerated filerAccelerated filerNon-accelerated filerX

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YesNoX

As of October 31, 2007, 1,492.0950 Limited Partnership Redeemable Units were outstanding.

---



HUTTON INVESTORS FUTURES FUND L.P. II

FORM 10-Q

INDEX

Page
NumberPART I - Financial InformationItem 1.


Financial Statements:Statements of Financial Condition at September 30, 2007 (liquidation basis) and December 31, 2006 (unaudited)


3Condensed Schedules of Investments at September 30, 2007 (liquidation basis) and December 31, 2006 (unaudited)


4 - 5Statements of Income and Expenses and Partners’ Capital for the three and nine months ended September 30, 2007 (liquidation basis) and 2006 (unaudited)


6Statement of Partner’s Capital for the nine months ended September 30, 2007 (liquidation basis) (unaudited)


7Statements of Cash Flows for the three and nine months ended September 30, 2007 (liquidation basis) and 2006 (unaudited)


8Notes to Financial Statements (unaudited)


9 - 12Item 2.


Management’s Discussion and Analysis of Financial Condition and Results of Operations


13 - 15Item 3.


Quantitative and Qualitative Disclosures about Market Risk


16 - 17Item 4.


Controls and Procedures


18PART II - Other Information


19


2

---



PART I

Item 1. Financial Statements

Hutton Investors Futures Fund L.P. II
Statements of Financial Condition
(Unaudited)

September 30,
2007
(liquidation basis)
(Note 1)


December 31,
2006Assets:Equity in commodity futures trading account:Cash (restricted $2,834,061 and $2,207,171 in 2007 and 2006, respectively)



$
9,616,561




$
12,381,207Net unrealized appreciation on open futures positions




1,947,977





389,768Unrealized appreciation on open forward contracts




292,699





118,20811,857,237





12,889,183Interest receivable




30,659





43,070$
11,887,896




$
12,932,253Liabilities and Partners’ Capital:Liabilities:Unrealized depreciation on open forward contracts



$
222,862




$
39,210Accrued expenses:Brokerage commissions




61,700





50,500Other




22,623





21,251Redemptions payable




272,718





85,900579,903





196,861Partners’ Capital:General Partner, 44 Unit equivalents outstanding in 2007 and 2006




307,682





314,967Limited Partners, 1,573.0950 and 1,735.0950 Redeemable Units of Limited Partnership Interest outstanding in 2007 and 2006, respectively




11,000,311





12,420,42511,307,993





12,735,392$
11,887,896




$
12,932,253


See accompanying notes to financial statements.

3

---



Hutton Investors Futures Fund L.P. II
Condensed Schedule of Investments
(liquidation basis, see Note 1)
September 30, 2007
(Unaudited)

Fair Value


% of Partners’
CapitalFutures Contracts PurchasedEnergy



$
331,828





2.93
%Grains




1,221,804





10.80Indices




190,747





1.69Interest Rates U.S.




(4,769
)




(0.04
)Interest Rates Non U.S.




(92,350
)




(0.82
)Metals




418,240





3.70Softs




16,547





0.15Total futures contracts purchased




2,082,047





18.41Futures Contracts SoldEnergy




4,140





0.03Indices




(91,889
)




(0.81
)Interest Rates Non U.S.




(27,632
)




(0.24
)Softs




(18,689
)




(0.17
)Total futures contracts sold




(134,070
)




(1.19
)Unrealized Appreciation on Forward ContractsCurrencies




292,699





2.59Total unrealized appreciation on forward contracts




292,699





2.59Unrealized Depreciation on Forward ContractsCurrencies




(222,862
)




(1.97
)Total unrealized depreciation on forward contracts




(222,862
)




(1.97
)Total fair value



$
2,017,814





17.84
%


See accompanying notes to financial statements.

4

---



Hutton Investors Futures Fund L.P. II
Condensed Schedule of Investments
December 31, 2006
(Unaudited)

Fair Value


% of Partners’
CapitalFutures Contracts PurchasedGrains



$
66,738





0.52
%Indices




144,698





1.14Interest Rates U.S.




(232,564
)




(1.83
)Interest Rates Non-U.S.




(108,453
)




(0.85
)Softs




99,648





0.78Total futures contracts purchased




(29,933
)




(0.24
)Futures Contracts SoldEnergy




418,440





3.29Interest Rates Non-U.S.




83,720





0.66Metals




(100,150
)




(0.79
)Softs




17,691





0.14Total futures contracts sold




419,701





3.30Unrealized Appreciation on Forward ContractsCurrencies




118,208





0.93Total unrealized appreciation on forward contracts




118,208





0.93Unrealized Depreciation on Forward ContractsCurrencies




(39,210
)




(0.31
)Total unrealized depreciation on forward contracts




(39,210
)




(0.31
)Total fair value



$
468,766





3.68
%


See accompanying notes to financial statements.

5

---



Hutton Investors Futures Fund L.P. II
Statements of Income and Expenses and Partners’ Capital
(Unaudited)

Three Months ended
September 30,


Nine Months ended
September 30,2007
(liquidation basis)
(Note 1)


2006


2007
(liquidation basis)
(Note 1)


2006Income:Net gains (losses) on trading of commodity interests:Net realized losses on closed positions



$
(794,712
)



$
(1,444,243
)



$
(1,596,819
)



$
(1,465,579
)Change in net unrealized gains on open positions




1,202,442





1,389,629





1,549,048





411,411407,730





(54,614
)




(47,771
)




(1,054,168
)Interest income




100,741





131,244





326,646





416,808508,471





76,630





278,875





(637,360
)Expenses:Brokerage commissions including clearing fees of $6,399, $6,879, $21,132 and $19,647, respectively




174,811





229,625





573,388





718,707Other expenses




16,919





1,065





50,486





33,291191,730





230,690





623,874





751,998Net income (loss)




316,741





(154,060
)




(344,999
)




(1,389,358
)Redemptions-Limited Partners




(272,718
)




(388,142
)




(1,082,400
)




(1,729,455
)Net increase (decrease) in Partners’ Capital




44,023





(542,202
)




(1,427,399
)




(3,118,813
)Partners’ Capital, beginning of period




11,263,970





13,911,427





12,735,392





16,488,038Partners’ Capital, end of period



$
11,307,993




$
13,369,225




$
11,307,993




$
13,369,225Net Asset Value per Redeemable Unit (1,617.0950 and 1,791.0950 Redeemable Units outstanding at September 30, 2007 and 2006, respectively)



$
6,992.78




$
7,464.27




$
6,992.78




$
7,464.27Net income (loss) per Redeemable Unit of Limited Partnership Interest and General Partner Unit equivalent



$
191.26




$
(83.59
)



$
(165.57
)



$
(713.94
)


See accompanying notes to financial statements.

6

---



Hutton Investors Futures Fund L.P. II
Statement of Partners’ Capital
for the nine months ended September 30, 2007
(liquidation basis, see Note 1)
(Unaudited)

Limited
Partners


General
Partner


TotalPartners’ Capital at December 31, 2006



$
12,420,425




$
314,967




$
12,735,392Net loss




(337,714
)




(7,285
)




(344,999
)Redemption of 162.0000 Redeemable Units of Limited Partnership Interest




(1,082,400
)




—





(1,082,400
)Partners’ Capital at September 30, 2007



$
11,000,311




$
307,682




$
11,307,993


Net Asset Value per Redeemable Unit:December 31, 2006:



$
7,158.35September 30, 2007:



$
6,992.78


See accompanying notes to financial statements.

7

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Hutton Investors Futures Fund L.P. II
Statements of Cash Flows
(Unaudited)

Three Months ended
September 30,


Nine Months ended
September 30,2007
(liquidation basis,)
see Note 1)


2006


2007
(liquidation basis,)
see Note 1)


2006Cash flows from operating activities:Net income (loss)



$
316,741




$
(154,060
)



$
(344,999
)



$
(1,389,358
)Adjustments to reconcile net income (loss) to net cash used in operating activities:Changes in operating assets and liabilities:(Increase) decrease in restricted cash



$
(326,378
)



$
(895,711
)



$
(626,890
)



$
(539,780
)(Increase) decrease in net unrealized appreciation on open futures positions




(1,136,940
)




(1,010,945
)




(1,558,209
)




(1,010,945
)(Increase) decrease in unrealized appreciation on open forward contracts




(152,451
)




(98,508
)




(174,491
)




885,691(Increase) decrease in interest receivable




4,032





4,348





12,411





(381
)Increase (decrease) in net unrealized depreciation on open futures positions




—





(171,685
)




—





(9,227
)Increase (decrease) in unrealized depreciation on open forward contracts




86,949





(108,491
)




183,652





(276,930
)Accrued expenses:Increase (decrease) in brokerage commissions




(10,100
)




17,000





11,200





21,850Increase (decrease) in other




(3,606
)




(23,778
)




1,372





(36,020
)Net cash used in operating activities




(1,221,753
)




(2,441,830
)




(2,495,954
)




(2,355,100
)Cash flows from financing activities:Payments for redemptions—Limited Partners




(482,908
)




(166,053
)




(895,582
)




(1,668,441
)Net change in unrestricted cash




(1,704,661
)




(2,607,883
)




(3,391,536
)




(4,023,541
)Unrestricted cash, at beginning of period




8,487,161





12,566,921





10,174,036





13,982,579Unrestricted cash, at end of period



$
6,782,500




$
9,959,038




$
6,782,500




$
9,959,038


See accompanying notes to financial statements.

8

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Hutton Investors Futures Fund L.P. II
Notes to Financial Statements
September 30, 2007
(Unaudited)

1.    General

Hutton Investors Futures Fund L.P. II (the ‘‘Partnership’’) is a limited partnership organized on March 31, 1987 under the partnership laws of the State of Delaware to engage in the speculative trading of a diversified portfolio of commodity interests including futures contracts, options and forward contracts. The commodity interests that are traded by the Partnership are volatile and involve a high degree of market risk. The Partnership commenced operations on July 24, 1987.

Citigroup Managed Futures LLC, a Delaware Limited Liability company, acts as the general partner (the ‘‘General Partner’’) of the Partnership. The Partnership’s commodity broker is Citigroup Global Markets Inc. (‘‘CGM’’). CGM is an affiliate of the General Partner. The General Partner is wholly owned by Citigroup Global Markets Holdings Inc. (‘‘CGMHI’’), which is the sole owner of CGM. CGMHI is a wholly owned subsidiary of Citigroup Inc. As of September 30, 2007, all trading decisions are made for the Partnership by John W. Henry & Company, Inc. (the ‘‘Advisor’’).

As of September 30, 2007 the Partnership is within the 12-month window of its liquidation date which has caused the Partnership to move from a going concern basis to a liquidation basis of accounting. The liquidation basis of accounting requires the Partnership to record assets and liabilities at values expected to be achieved in liquidation. The change in basis of accounting from a going concern basis to a liquidation basis did not have a material effect on the Partnership’s carrying value of assets and liabilities or its results of operations. All carrying values, whether market or fair values, are expected to be achieved by management during liquidation. Also, the liquidation basis of accounting requires the financial statements to include a statement of net assets available to partners or changes in net assets available to partners. The Statement of Partners’ Capital (included herein) presents the same information and thus a statement of net assets available to partners or changes in net assets available to partners has not been presented for the three and nine months eneded September 30, 2007, respectively.

The accompanying financial statements are unaudited but, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Partnership’s financial condition at September 30, 2007 and December 31, 2006 and the results of its operations and cash flows for the three and nine months ended September 30, 2007 and 2006. These financial statements present the results of interim periods and do not include all disclosures normally provided in annual financial statements. You should read these financial statements together with the financial statements and notes included in the Partnership’s annual report on Form 10-K filed with the Securities and Exchange Commission (the ‘‘SEC’’) for the year ended December 31, 2006.

Due to the nature of commodity trading, the results of operations for the interim periods presented should not be considered indicative of the results that may be expected for the entire year.

9

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Hutton Investors Futures Fund L.P. II
Notes to Financial Statements
September 30, 2007
(Unaudited)

2.    Financial Highlights:

Changes in Net Asset Value per Redeemable Unit of Limited Partnership Interest for the three and nine months ended September 30, 2007 and 2006 were as follows:

Three Months Ended
September 30,


Nine Months Ended
September 30,2007


2006


2007


2006Net realized and unrealized gains (losses) *



$
140.64




$
(154.21
)



$
(325.77
)



$
(915.88
)Interest income




60.82





71.21





189.56





218.90Expenses **




(10.20
)




(0.59
)




(29.36
)




(16.96
)Increase (decrease) for the period




191.26





(83.59
)




(165.57
)




(713.94
)Net Asset Value per Redeemable Unit, beginning of period




6,801.52





7,547.86





7,158.35





8,178.21Net Asset Value per Redeemable Unit, end of period



$
6,992.78




$
7,464.27




$
6,992.78




$
7,464.27


|* | Includes brokerage commissions.
|- | -------------------------------

|** | Excludes brokerage commissions.
|-- | -------------------------------

Three Months Ended
September 30,


Nine Months Ended
September 30,2007


2006


2007


2006Ratio to average net assets: ***Net investment loss before incentive fees****




(3.3
)%




(3.0
)%




(3.5
)%




(3.0
)%Operating expenses




6.9
%




7.0
%




7.3
%




6.8
%Incentive fees




—
%




—
%




—
%




—
%Total expenses




6.9
%




7.0
%




7.3
%




6.8
%Total return:Total return before incentive fees




2.8
%




(1.1
)%




(2.3
)%




(8.7
) %Incentive fees




—
%




—
%




—
%




—
%Total return after incentive fees




2.8
%




(1.1
)%




(2.3
)%




(8.7
) %


|*** | Annualized (other than incentive fees)
|--- | --------------------------------------

|**** | Interest income less total expenses (exclusive of incentive fees)
|---- | -----------------------------------------------------------------

The above ratios may vary for individual investors based on the timing of capital transactions during the period. Additionally, these ratios are calculated for the Limited Partner class using the Limited Partners’ share of income, expenses and average net assets.

10

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Hutton Investors Futures Fund L.P. II
Notes to Financial Statements
September 30, 2007
(Unaudited)

3.    Trading Activities:

The Partnership was formed for the purpose of trading contracts in a variety of commodity interests, including derivative financial instruments and derivative commodity instruments. The results of the Partnership’s trading activities are shown in the Statements of Income and Expenses and Partners’ Capital and are discussed in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The Customer Agreement between the Partnership and CGM gives the Partnership the legal right to net unrealized gains and losses on open futures positions.

All of the commodity interests owned by the Partnership are held for trading purposes. The average fair values of these interests during the nine months ended September 30, 2007 and the year ended December 31, 2006, based on a monthly calculation, were $635,872 and $745,307, respectively. The fair value of these commodity interests, including options thereon, if applicable, at September 30, 2007 and December 31, 2006, were $2,017,814 and $468,766, respectively. Fair values for exchange traded commodity futures and options are based on quoted market prices for those futures and options. Fair values for all other financial instruments for which market quotations are not readily available are based on other measures of fair value deemed appropriate by the General Partner.

4.    Financial Instrument Risks:

In the normal course of its business, the Partnership is party to financial instruments with off-balance sheet risk, including derivative financial instruments and derivative commodity instruments. These financial instruments may include forwards, futures and options, whose values are based upon an underlying asset, index, or reference rate, and generally represent future commitments to exchange currencies or cash flows, to purchase or sell other financial instruments at specific terms at specified future dates, or, in the case of derivative commodity instruments, to have a reasonable possibility to be settled in cash, through physical delivery or with another financial instrument. These instruments may be traded on an exchange or over-the-counter (‘‘OTC’’). Exchange traded instruments are standardized and include futures and certain option contracts. OTC contracts are negotiated between contracting parties and include forwards and certain options. Each of these instruments is subject to various risks similar to those related to the underlying financial instruments including market and credit risk. In general, the risks associated with OTC contracts are greater than those associated with exchange traded instruments because of the greater risk of default by the counterparty to an OTC contract.

Market risk is the potential for changes in the value of the financial instruments traded by the Partnership due to market changes, including interest and foreign exchange rate movements and fluctuations in commodity or security prices. Market risk is directly impacted by the volatility and liquidity in the markets in which the related underlying assets are traded.

Credit risk is the possibility that a loss may occur due to the failure of a counterparty to perform according to the terms of a contract. Credit risk with respect to exchange traded instruments is reduced to the extent that an exchange or clearing organization acts as a counterparty to the transactions. The Partnership’s risk of loss in the event of counterparty default is typically limited to the amounts recognized as unrealized appreciation in the statements of financial condition and not represented by the contract or notional amounts of the instruments. The Partnership has credit risk and concentration risk because the sole counterparty or broker with respect to the Partnership’s assets is CGM.

The General Partner monitors and controls the Partnership’s risk exposure on a daily basis through financial, credit and risk management monitoring systems, and accordingly believes that it has effective procedures for evaluating and limiting the credit and market risks to which the Partnership is subject. These monitoring systems allow the General Partner to statistically analyze actual trading results with

11

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Hutton Investors Futures Fund L.P. II
Notes to Financial Statements
September 30, 2007
(Unaudited)

risk-adjusted performance indicators and correlation statistics. In addition, on-line monitoring systems provide account analysis of futures, forwards and options positions by sector, margin requirements, gain and loss transactions and collateral positions.

The majority of these instruments mature within one year of the inception date. However, due to the nature of the Partnership’s business, these instruments may not be held to maturity.

12

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

Liquidity and Capital Resources

The Partnership does not engage in the sale of goods or services. Its only assets are its equity in its commodity futures trading account, consisting of cash, net unrealized appreciation on open futures and unrealized appreciation on open forward contracts and interest receivable. Because of the low margin deposits normally required in commodity futures trading, relatively small price movements may result in substantial losses to the Partnership. While substantial losses could lead to a substantial decrease in liquidity, no such losses occurred in the Partnership’s third quarter of 2007.

The Partnership’s capital consists of the capital contributions of the partners as increased or decreased by realized and/or unrealized gains or losses on commodity futures trading, expenses, interest income, redemptions of Redeemable Units and distributions of profits, if any.

For the nine months ended September 30, 2007, Partnership capital decreased 11.2% from $12,735,392 to $11,307,993. This decrease was attributable to a net loss from operations of $344,999 and the redemption of 162 Redeemable Units of Limited Partnership Interest resulting in an outflow of $1,082,400. Future redemptions can impact the amount of funds available for investment in commodity contract positions in subsequent periods.

Critical Accounting Policies

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

As of September 30, 2007 the Partnership is within the 12-month window of its liquidation date which has caused the Partnership to move from a going concern basis to a liquidation basis of accounting. The liquidation basis of accounting requires the Partnership to record assets and liabilities at values expected to be achieved in liquidation. The change in basis of accounting from a going concern basis to a liquidation basis did not have a material effect on the Partnership’s carrying value of assets and liabilities nor its results of operations. All carrying values, whether market or fair values, are expected to be achieved by management during liquidation. Also, the liquidation basis of accounting requires the financial statements to include a statement of net assets available to partners or changes in net assets available to partners. The Statement of Partners’ Capital (included herein) presents the same information and thus a statement of net assets available to partners or changes in net assets available to partners has not been presented for the three and nine months eneded September 30, 2007, respectively

All commodity interests (including derivative financial instruments and derivative commodity instruments) are used for trading purposes. The commodity interests are recorded on trade date and open contracts are recorded in the statements of financial condition at fair value on the last business day of the period, which represents market value for those commodity interests for which market quotations are readily available or other measures of fair value deemed appropriate by management of the General Partner for those commodity interests and foreign currencies for which market quotations are not readily available. Investments in commodity interests denominated in foreign currencies are translated into U.S. dollars at the exchange rates prevailing on the last business day of the period. Realized gains (losses) and changes in unrealized values on open positions are recognized in the period in which the contract is closed or the changes occur and are included in net gains (losses) on trading of commodity interests.

Foreign currency contracts are those contracts where the Partnership agrees to receive or deliver a fixed quantity of foreign currency for an agreed-upon price on an agreed future date. Foreign currency contracts are valued daily, and the Partnership’s net equity therein, representing unrealized gain or loss on the contracts as measured by the difference between the forward foreign exchange rates at the date of entry into the contracts and the forward rates at the reporting dates, is included in the statement of financial condition. Realized gains (losses) and changes in unrealized values on foreign currency contracts are recognized in the period in which the contract is closed or the changes occur and are included in the statements of income and expenses and partners’ capital.

13

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In July 2006, the Financial Accounting Standards Board (the ‘‘FASB’’) released FASB Interpretation No. 48 ‘‘Accounting for Uncertainty in Income Taxes’’ (FIN 48).  FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements.  FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Partnership’s tax returns to determine whether the tax positions are ‘‘more-likely-than-not’’ of being sustained by the applicable tax authority.  Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year.  The Partnership adopted FIN 48 as of January 1, 2007, and the application of this standard did not impact the financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards (‘‘SFAS’’) No. 157, ‘‘FAIRVALUEMEASUREMENTS’’. This accounting standard establishes a single authoritative definition of fair value sets out a framework for measuring fair value and expands disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and the interim periods within those fiscal years. As of September 30, 2007, the Partnership is still evaluating the impact the adoption of SFAS No. 157 will have on the financial statement amounts; however, additional disclosures will be required about the inputs used to develop the measurements and the effect of certain measurements on changes in Partners’ Capital for the period.

Results of Operations

During the Partnership’s third quarter of 2007, the Net Asset Value per Redeemable unit increased 2.8% from $6,801.52 to $6,992.78 as compared to a decrease of 1.1% in the third quarter of 2006. The Partnership experienced a net trading gain (comprised of net realized gains (losses) on closed positions and change in net unrealized gains (losses) on open positions) before brokerage commissions and related fees in the third quarter of 2007 of $407,730. Gains were primarily attributable to the trading of commodity futures in energy, grains and U.S. interest rates and were partially offset by losses in currencies, non-U.S. interest rates, metals, softs and indices. The Partnership experienced a net trading loss before brokerage commissions and related fees in the third quarter of 2006 of $54,614. Losses were primarily attributable to the trading of commodity futures in grains, non-U.S. interest rates, metals and indices and were partially offset by gains in currencies, energy, softs and U.S. interest rates.

The third quarter results were impacted by widespread economic concerns related to sub-prime mortgage lending issues resonated throughout the capital and commodity markets. The fund registered losses in currencies, non-U.S. interest-rates, metals, stock indices and agricultural softs while it registered gains in energy, grains and U.S. interest-rates.

In the currencies, losses were primarily incurred in Japanese Yen and Swiss Francs trades. High non-directional volatility was seen especially in Japanese Yen due to the brief unwinding of the currency carry trade. In the Non-U.S. fixed income sector, losses were caused by reversal of well-established trends due to widespread uncertainty as the markets speculated the future direction of the interest rates, especially in Europe. Trading in agricultural softs such as cotton and coffee also contributed to the losses. In the metals sector, trading in silver and gold contributed to the losses due to widespread selling and reversal of technical trends. Losses were also encountered in the stock indices as concerns of economic weakness dominated the markets and previously established long-term trends were broken.

The fund registered gains in the energy sector primarily due to trades in crude oil. Weaker U.S. Dollar and strong demand driven by global growth pushed the crude oil price to its highest exchange-listed value. Strong gains were also registered in grains, especially in wheat as strong technical trends continued to push the prices to new highs. Trading in U.S. fixed income sector also contributed to the gains as yields on the long term Government bonds declined to their lowest levels in the year driven by strong demand due to flight to quality.

During the nine months ended September 30, 2007, the Net Asset Value per Redeemable Unit decreased 2.3% from $7,158.35 to $6,992.78 as compared to a decrease of 8.7% in the same period of 2006. The Partnership experienced a net trading loss (comprised of net realized gains (losses) on closed positions and change in net unrealized gains (losses) on open positions) before brokerage commissions

14

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and related fees in the nine months ended September 30, 2007 of $47,771. Losses were primarily attributable to the trading of commodity futures in currencies, energy, metals, softs and indices and were partially offset by gains in grains, U.S. interest rates and non-U.S. interest rates. The Partnership experienced a net trading loss before brokerage commissions and related fees in the nine months ended September 30, 2006 of $1,054,168. Losses were primarily attributable to the trading of commodity futures in currencies, grains, non-U.S. interest rates, livestock, softs and indices and were partially offset by gains in energy, metals and U.S. interest rates.

Commodity futures markets are highly volatile. The potential for broad and rapid price fluctuations increases the risks involved in commodity trading but also increases the possibility of profit. The profitability of the Partnership depends on the existence of major price trends and the ability of the Advisor to correctly identify those price trends. Price trends are influenced by, among other things, changing supply and demand relationships, weather, governmental, agricultural, commercial and trade programs and policies, national and international political and economic events and changes in interest rates. To the extent that market trends exist and the Advisor is able to identify them, the Partnership expects to increase capital through operations.

Interest income on 80% of the Partnership’s daily equity maintained in cash was earned at the monthly average 13-week U.S. Treasury bill yield. CGM may continue to maintain the Partnership’s assets in cash and/or place all of the Partnership’s assets in 90-day Treasury bills and pay the Partnership 80% of the interest earned on the Treasury bills purchased. CGM will retain 20% of any interest earned on Treasury bills. Interest income for the three and nine months ended September 30, 2007 decreased by $30,503 and $90,162 as compared to the corresponding period in 2006. Interest income decreased during the three and nine months ended September 30, 2007 due to lower average net assets as compared to the corresponding periods in 2006.

Brokerage commissions are based on the number of trades executed by the Advisor. Brokerage commissions and fees for the three and nine months ended September 30, 2007 decreased by $54,814 and $145,319 as compared to the corresponding periods in 2006. The decrease in commissions and fees is primarily due to a lower number of traded contracts during the three and nine months ended September 30, 2007 as compared to the corresponding periods in 2006.

Incentive fees are based on the new trading profits generated by the Advisor as defined in the advisory agreement between the Partnership, the General Partner and the Advisor. There were no incentive fees earned during the three and nine months ended September 30, 2007 and 2006.

15

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Item 3.    Quantitative and Qualitative Disclosures about Market Risk

The Partnership is a speculative commodity pool. The market sensitive instruments held by it are acquired for speculative trading purposes, and all or substantially all of the Partnership’s assets are subject to the risk of trading loss. Unlike an operating company, the risk of market sensitive instruments is integral, not incidental, to the Partnership’s main line of business.

Market movements result in frequent changes in the fair value of the Partnership’s open positions and, consequently, in its earnings and cash flow. The Partnership’s market risk is influenced by a wide variety of factors, including the level and volatility of interest rates, exchange rates, equity price levels, the value of financial instruments and contracts, the diversification effects among the Partnership’s open positions and the liquidity of the markets in which the Partnership trades.

The Partnership rapidly acquires and liquidates both long and short positions in a wide range of different markets. Consequently, it is not possible to predict how a particular future market scenario will affect performance, and the Partnership’s past performance is not necessarily indicative of its future results.

Value at Risk is a measure of the maximum amount which the Partnership could reasonably be expected to lose in a given market sector. However, the inherent uncertainty of the Partnership’s speculative trading and the recurrence in the markets traded by the Partnership of market movements far exceeding expectations could result in actual trading or non-trading losses far beyond the indicated Value at Risk or the Partnership’s experience to date (i.e., ‘‘risk of ruin’’). In light of the foregoing, as well as the risks and uncertainties intrinsic to all future projections, the inclusion of the quantification in this section should not be considered to constitute any assurance or representation that the Partnership’s losses in any market sector will be limited to Value at Risk or by the Partnership’s attempts to manage its market risk.

Exchange maintenance margin requirements have been used by the Partnership as the measure of its Value at Risk. Maintenance margin requirements are set by exchanges to equal or exceed the maximum losses reasonably expected to be incurred in the fair value of any given contract in 95%-99% of any one-day interval. Maintenance margin has been used rather than the more generally available initial margin, because initial margin includes a credit risk component, which is not relevant to Value at Risk.

16

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The following table indicates the trading Value at Risk associated with the Partnership’s open positions by market category as of September 30, 2007, and the highest, lowest and average values during the three months ended September 30, 2007. All open position trading risk exposures of the Partnership have been included in calculating the figures set forth below. As of September 30, 2007, the Partnership’s total capitalization was $11,307,993. There has been no material change in the trading Value at Risk information previously disclosed in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2006.

September 30, 2007
(Unaudited)

Three Months Ended September 30, 2007Market Sector


Value at Risk


% of Total
Capitalization


High
Value at Risk


Low
Value at Risk


Average
Value at Risk*Currencies:– OTC Contracts



$
465,750





4.12
%



$
480,870




$
163,755




$
346,364Energy




527,050





4.66
%




577,700





42,000





411,867Grains




294,000





2.60
%




294,000





110,775





192,792Interest Rates U.S.




172,700





1.53
%




203,600





13,750





130,767Interest Rates Non-U.S.




275,628





2.44
%




418,354





60,944





212,640Metals:– Exchange Traded Contracts




240,000





2.13
%




278,000





27,500





170,333Softs




213,870





1.89
%




223,070





83,300





154,697Indices




271,144





2.39
%




382,088





119,603





233,095Totals



$
2,460,142





21.76
%


*    Average of month-end Values at Risk.

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Item 4.    Controls and Procedures

The Partnership’s disclosure controls and procedures are designed to ensure that information required to be disclosed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO) of the General Partner, to allow for timely decisions regarding required disclosure and appropriate SEC filings.

Management is responsible for ensuring that there is an adequate and effective process for establishing, maintaining and evaluating disclosure controls and procedures for the Partnership’s external disclosures.

The General Partner’s CEO and CFO have evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2007 and, based on that evaluation, the CEO and CFO have concluded that at that date the Partnership’s disclosure controls and procedures were effective.

The Partnership’sinternal control over financial reportingis a process under the supervision of the General Partner’s CEO and CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with U.S. generally accepted accounting principles. These controls include 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 (i) transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and (ii) the Partnership’s receipts are handled and expenditures are made only pursuant to authorizations of the General Partner; 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.

There were no changes in the Partnership’s internal control over financial reporting during the fiscal quarter ended September 30, 2007 that materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

18

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PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

The following information supplements and amends our discussion set forth under Part I. Item 3. ‘‘Legal Proceedings’’ in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, as updated by our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2007 and June 30, 2007.

Enron-Related Civil Actions

On August 27, 2007, the District Court for the Southern District of New York inIn Re. Enron Corp.reversed the rulings of the federal bankruptcy court that certain bankruptcy claims held by Citigroup transferees could be equitably subordinated or disallowed solely because of the alleged misconduct of Citigroup, and remanded for further proceedings.

IPO Regulatory Inquiries

On August 14, 2007, plaintiffs filed amended complaints in the six focus cases as well as amended master allegations for all cases in the coordinated proceedings. On September 27, 2007, plaintiffs filed a motion to certify new classes in the six focus cases.

Item 1A.    Risk Factors

There are no material changes from the risk factors set forth under Part I, Item 1A. ‘‘Risk Factors’’ in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006 and under Part II, Item 1A. ‘‘Risk Factors’’ in our Quarterly Report on Form 10-Q for the quarters ended March 31, 2007 and June30, 2007.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

The following chart sets forth the purchases of Redeemable Units by the Partnership.

Period


(a) Total Number
of Shares
(or Redeemable
Units)Purchased*


(b) Average
Price Paid per
Share (or
Redeemable Unit)**


(c) Total Number
of Shares (or Redeemable
Units) Purchased as
Part of Publicly
Announced Plans
or Programs


(d) Maximum Number
(or Approximate
Dollar Value) of Shares
(or Redeemable Units)
that May Yet Be
Purchased Under the
Plans or ProgramsJuly 1, 2007 -
July 31, 2007




—





N/A





N/A





N/AAugust 1, 2007 -
August 31, 2007




—





N/A





N/A





N/ASeptember 1, 2007 -
September 30, 2007




39




$
6,992.78





N/A





N/A39




$
6,992.78





N/A





N/A


|* Generally, Limited Partners are permitted to redeem their Redeemable Units as of the end of each month on 10 days’ notice to the General Partner. Under certain circumstances, the General Partner can compel redemption but to date the General Partner has not exercised this right. Purchases of Redeemable Units by the Partnership reflected in the chart above were made in the ordinary course of the Partnership’s business in connection with effecting redemptions for Limited Partners.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|** Redemptions of Redeemable Units are effected as of the last day of each month at the Net Asset Value per Redeemable Unit as of that day.
|-------------------------------------------------------------------------------------------------------------------------------------------

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

The exhibits required to be filed by Item 601 of Regulation S-K are incorporated herein by reference to the exhibit index of the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2006.

19

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Exhibit – 31.1 – Rule 13a-14(a)/15d-14(a) Certification
(Certification of President and Director)

Exhibit – 31.2 – Rule 13a-14(a)/15d-14(a) Certification
(Certification of Chief Financial Officer and Director)

Exhibit – 32.1 – Section 1350 Certification
(Certification of President and Director)

Exhibit – 32.2 – Section 1350 Certification
(Certification of Chief Financial Officer and Director)

20

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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.

HUTTON INVESTORS FUTURES FUND L.P. IIBy:


Citigroup Managed Futures LLC(General Partner)By:


/s/ Jerry PascucciJerry Pascucci
President and DirectorDate:


November 14, 2007By:


/s/ Jennifer MagroJennifer Magro
Chief Financial Officer and DirectorDate:


November 14, 2007


21

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