FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                 (X) QUARTERLY REPORT UNDER SECTION 13 or 15(d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934

               OR ( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d)

                     OF THE SECURITIES EXCHANGE ACT OF 1934


For the Quarter ended September 30, 1998

Commission File Number 0-16526



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


        Delaware                                            13-3406160
(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                         Identification No.)


                    c/o Smith Barney Futures Management Inc.
                          390 Greenwich St. - 1st. Fl.
                            New York, New York 10013
              (Address and Zip Code of principal executive offices)


                                 (212) 723-5424
              (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.

                                                Yes   X    No


<PAGE>



                      HUTTON INVESTORS FUTURES FUND L.P. II
                                    FORM 10-Q
                                      INDEX

                                                                         Page
                                                                         Number

PART I - Financial Information:

    Item 1.   Financial Statements:

              Statement of Financial Condition at
              September 30, 1998 and December 31,
              1997.                                                       3

              Statement of Income and Expenses and Partners' Capital
              for the three and nine months ended September 30, 1998
              and 1997.                                                   4

              Notes to Financial Statements                             5 - 8

    Item 2.   Management's Discussion and Analysis
              of Financial Condition and Results of
              Operations                                                9 - 11

    Item 3.   Quantitative and Qualitative Disclosures
                    of Market Risk                                       12

PART II - Other Information                                            13 - 14



                                                           2

<PAGE>

                                     PART I

                          Item 1. Financial Statements

                      HUTTON INVESTORS FUTURES FUND L.P. II
                        STATEMENT OF FINANCIAL CONDITION


<TABLE>
<CAPTION>

                                                  SEPTEMBER 30,  DECEMBER 31,
                                                      1998             1997
                                                   ----------   ------------
                                                  (Unaudited)
<S>                                                 <C>               <C>

ASSETS:
Equity in commodity futures trading account:
  Cash and cash equivalents                        $19,372,799   $21,096,196

  Net unrealized appreciation on open
   futures contracts                                 4,346,448     1,285,315

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

                                                   $23,719,247   $22,381,511
                                                   ===========   ===========





LIABILITIES AND PARTNERS' CAPITAL:

Liabilities:
 Accrued expenses:
  Commissions on open futures contracts            $   105,608   $    88,012
  Incentive fees                                       433,960       347,297
  Other                                                 27,117        24,732
 Redemptions payable                                    80,714       379,980

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

                                                       647,399       840,021

                                                   -----------   -----------
Partners' capital :

  General Partner, 44 Unit equivalents
  in 1998 and 1997                                     273,187       245,869
  Limited Partners, 3,672 and 3,811 Units
  of Limited Partnership Interest
  outstanding in 1998 and 1997, respectively        22,798,661    21,295,621

                                                   -----------   -----------
                                                    23,071,848    21,541,490

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

                                                   $23,719,247   $22,381,511
                                                   ===========   ===========
</TABLE>

See Notes to Financial Statements.


                                                           3

<PAGE>


                      HUTTON INVESTORS FUTURES FUND L.P. II
             STATEMENT OF INCOME AND EXPENSES AND PARTNERS' CAPITAL
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                              THREE MONTHS ENDED              NINE MONTHS ENDED
                                                                 SEPTEMBER 30,                  SEPTEMBER 30,
                                                         -----------    ------------    -------------   -------------
                                                               1998            1997             1998            1997

                                                         -----------    ------------     ------------    ------------
<S>                                                           <C>            <C>              <C>             <C>

Income:
  Net gains (losses) on trading of commodity
   futures:
  Realized gains (losses) on closed positions           $   (579,586)   $  1,404,647    $   (317,219)   $  1,463,491
  Change in unrealized gains/losses on open
   positions                                               5,017,429         320,642       3,061,133         537,522

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

                                                           4,437,843       1,725,289       2,743,914       2,001,013
Less, brokerage commissions and clearing fees
  ($4,995, $5,562, $15,348 and $11,679, respectively)       (193,542)       (181,507)       (594,355)       (499,543)

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

  Net realized and unrealized gains                        4,244,301       1,543,782       2,149,559       1,501,470
  Interest income                                            192,566         194,924         587,739         577,289

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

                                                           4,436,867       1,738,706       2,737,298       2,078,759

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

Expenses:
  Incentive fees                                             433,960          96,503         441,174         298,741
  Other                                                       11,714          13,146          33,752          33,829

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

                                                             445,674         109,649         474,926         332,570

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

  Net income                                               3,991,193       1,629,057       2,262,372       1,746,189
  Redemptions                                                (80,714)       (212,364)       (732,014)       (579,762)

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

  Net increase in Partners' capital                        3,910,479       1,416,693       1,530,358       1,166,427

Partners' capital, beginning of period                    19,161,369      18,902,899      21,541,490      19,153,165

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

Partners' capital, end of period                        $ 23,071,848    $ 20,319,592    $ 23,071,848    $ 20,319,592
                                                        ------------    ------------    ------------    ------------

Net asset value per Unit
  (3,716 and 3,923 Units outstanding
  at September 30, 1998 and 1997, respectively)         $   6,208.79    $   5,179.61    $   6,208.79    $   5,179.61
                                                        ------------    ------------    ------------    ------------


Net income per Unit of Limited Partnership
  Interest and General Partner Unit equivalent          $   1,070.32    $     410.97    $     620.85    $     437.55
                                                        ------------    ------------    ------------    ------------
</TABLE>

See Notes to Finanacial Statements


                                                           4

<PAGE>



                      HUTTON INVESTORS FUTURES FUND L.P. II
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 1998
                                   (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.

     Smith  Barney  Futures  Management  Inc.  acts as the general  partner (the
"General  Partner") of the Partnership.  On September 1, 1998, the Partnership's
commodity  broker,  Smith  Barney  Inc.,  merged with  Salomon  Brothers Inc and
changed its name to Salomon  Smith Barney Inc.  ("SSB").  SSB is an affiliate of
the General Partner. The General Partner is wholly owned by Salomon Smith Barney
Holdings Inc.  ("SSBH"),  which is the sole owner of SSB. SSBH is a wholly owned
subsidiary  of  Travelers  Group Inc.  All  trading  decisions  are made for the
Partnership  by John W.  Henry  &  Company,  Inc.,  and  TrendLogic  Associates,
(collectively, the "Advisors"). (see Note 5)

         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, 1998 and the results of its  operations for the three
and nine months ended September 30, 1998 and 1997.  These  financial  statements
present  the  results of interim  periods  and do not  include  all  disclosures
normally  provided in annual  financial  statements.  It is suggested that these
financial  statements be read in conjunction  with the financial  statements and
notes  included in the  Partnership's  annual report on Form 10-K filed with the
Securities and Exchange Commission for the year ended December 31, 1997.

         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.


                                                           5

<PAGE>



                      HUTTON INVESTORS FUTURES FUND L.P. II
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 1998
                                   (continued)

2.  Net Asset Value Per Unit

         Changes in net asset value per Unit for the three and nine months ended
September 30, 1998 and 1997 were as follows:

                                  THREE-MONTHS ENDED         NINE-MONTHS ENDED
                                     SEPTEMBER 30,              SEPTEMBER 30,
                                   1998          1997         1998        1997

Net realized and unrealized
 gains                         $1,138.19    $  389.46    $  593.50      $376.06
Interest income                    51.64        49.17       154.50       144.38
Expenses                         (119.51)      (27.66)     (127.15)      (82.89)
                               ---------    ---------    ---------    ---------

Increase for period             1,070.32       410.97       620.85       437.55

Net Asset Value per Unit,
 beginning of period            5,138.47     4,768.64     5,587.94     4,742.06
                               ---------    ---------    ---------    ---------

Net Asset Value per Unit,
 end of period                $ 6,208.79    $5,179.61    $6,208.79    $5,179.61
                               =========    =========    =========    =========


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
activity are shown in the statement of income and expenses.

         The  Customer  Agreement  between  the  Partnership  and SSB  gives the
Partnership the legal right to net unrealized gains and losses.

         All of the commodity  interests  owned by the  Partnership are held for
trading purposes. The fair value of these commodity interests, including options
thereon,  at  September  30,  1998 and  December  31,  1997 was  $4,346,448  and
$1,285,315,  respectively, and the average fair value during the nine and twelve
months then ended,  based on monthly  calculation,  was $958,831 and $1,284,957,
respectively.

4.  Financial Instrument Risk:

         The  Partnership  is party to financial  instruments  with off- balance
sheet risk, including derivative financial  instruments and derivative commodity
instruments,  in the normal course of its business.  These financial instruments
include forwards, futures and

                                                           6

<PAGE>



options,  whose value is 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 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 in the  statement of financial  condition and
not  represented  by the contract or notional  amounts of the  instruments.  The
Partnership has concentration  risk because the sole counterparty or broker with
respect to the Partnership's assets is SSB.

         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 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 notional or  contractual  amounts of these  instruments,  while not
recorded in the financial  statements,  reflect the extent of the  Partnership's
involvement  in these  instruments.  At  September  30,  1998,  the  notional or
contractual  amounts of the Partnership's  commitment to purchase and sell these
instruments was  $289,489,158 and $21,051,889  respectively,  as detailed below.
All of these instruments

                                                           7

<PAGE>



mature within one year of September 30, 1998. However,  due to the nature of the
Partnership's  business,  these  instruments  may not be held  to  maturity.  At
September 30, 1998, the fair value of the Partnership's  derivatives,  including
options thereon, was $4,346,448, as detailed below.

                                  SEPTEMBER 30, 1998
                               NOTIONAL OR CONTRACTUAL
                               AMOUNT OF COMMITMENTS
                              TO PURCHASE       TO SELL    FAIR VALUE

Currencies:
-Exchange Traded Contracts   $    508,625   $   196,200   $     6,910
-OTC Contracts                 46,826,786    10,965,860       736,000
Energy                          1,515,382             -        26,318
Grains                            106,404       902,925       137,059
Interest Rates U.S.            70,968,219             -     1,099,953
Interest Rates Non-U.S        167,894,816       135,469     2,145,009
Livestock                               -       174,160         1,260
Metals                            838,463     2,508,793       (69,283)
Softs                             674,454     1,471,365        (5,548)
Indices                           156,009     4,697,117       268,770
                             ------------   -----------   -----------

Totals                       $289,489,158   $21,051,889   $ 4,346,448
                             ============   ===========   ===========


         At  December  31,  1997,  the  notional or  contractual  amounts of the
Partnership's  commitment to purchase and sell these instruments was $93,971,478
and  $106,119,565,  respectively,  and,  the  fair  value  of the  Partnership's
derivatives, including options thereon, was $1,285,315, as detailed below.

                                   DECEMBER 31, 1997
                                NOTIONAL OR CONTRACTUAL
                                AMOUNT OF COMMITMENTS
                              TO PURCHASE        TO SELL   FAIR VALUE

Currencies:
- Exchange Traded Contracts   $   202,585   $  1,130,915   $    6,183
- OTC Contracts                20,110,834     40,229,303       90,831
Energy                                  -      1,835,392      114,647
Grains                            269,580        998,400       16,461
Interest Rates U.S.            26,445,738        471,375      122,125
Interest Rates Non-U.S         42,438,955     50,816,858      134,897
Livestock                               -        120,150        4,750
Metals                          2,269,614      6,174,125      661,030
Softs                           1,891,654      1,664,380       23,372
Indices                           342,518      2,678,667      111,019
                              -----------   ------------   ----------

Totals                        $93,971,478   $106,119,565   $1,285,315
                              ===========   ============   ==========

5.       Subsequent Event:

         On October 8, 1998, Travelers Group Inc. merged with Citicorp Inc. and
changed its name to Citigroup Inc.

                                                                 8

<PAGE>




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 and cash equivalents  (such as U.S.  Treasury Bills,  which  constituted
approximately  70% of the  Partnership's  assets at September  30, 1998) and net
unrealized appreciation (depreciation) on open futures contracts. 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 1998.

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

         For the nine months  ended  September  30,  1998,  Partnership  capital
increased 7.1% from  $21,541,490 to $23,071,848.  This increase was attributable
to net income from  operations of $2,262,372  which was partially  offset by the
redemption of 139 Units  resulting in an outflow of $732,014 for the nine months
ended  September  30, 1998.  Future  redemptions  can impact the amount of funds
available for investment in commodity contract positions in subsequent months.

Operational Risk

         The General Partner administers the business of the Partnership through
various  systems and processes  maintained by SSBH. SSBH has analyzed the impact
of the year 2000 on its systems and processes and  modifications  for compliance
are  proceeding  according to plan.  All  modifications  necessary for year 2000
compliance  are expected to be completed by the first  quarter of 1999.  In July
1998, SSB participated in successful  industry-wide  testing  coordinated by the
Securities  Industry  Association  and plans to participate in such tests in the
future.  The  purpose of  industry-wide  testing is to confirm  that  exchanges,
clearing organizations,  and other securities industry participants are prepared
for the year 2000.

         The most likely and most significant risk to the Partnership associated
with the lack of year 2000  readiness  is the failure of outside  organizations,
including the commodities  exchanges,  clearing organizations or regulators with
which the  Partnership  interacts to resolve  their year 2000 issues in a timely
manner.  This risk could  involve the  inability to  determine  the value of the
Partnership  at some  point  in time  and  would  make  effecting  purchases  or
redemptions of Units in the Partnership infeasible

                                                         9

<PAGE>



until such valuation was determinable.

         In  addition,  the  General  Partner is  addressing  the  technological
implications that will result from regulatory and market changes due to Europe's
Economic and Monetary Union ("EMU").

         Risks to the Partnership  exist in the lack of experience with this new
currency and the potential impact it can have on the Advisors' trading programs.
Risks  also  exist  in  the  failure  of  external  information  technology  and
accounting  systems to  adequately  prepare  for the  conversion.  This issue is
particularly   acute  in  the  area  of  the  exchanges,   clearing  houses  and
over-the-counter  foreign  exchange  markets  where the  futures  interests  are
traded. If the necessary changes are not properly  implemented,  the Partnership
could suffer failed trade settlements,  inability to reconcile trading positions
and funding  disruptions.  Such events could result in erroneous  entries in the
Partnership's  accounts,  mispriced  transactions,  and a delay or  inability to
provide  timely  pricing of Units for the  purpose of  effecting  purchases  and
redemptions.

         SSB has evaluated its internal  systems and made the necessary  changes
to  accommodate  EMU  transactions  on behalf of the  Partnership.  The  General
Partner will continue to monitor and  communicate  with the Advisors and related
third-party  entities to assure  preparation for the EMU conversion and advanced
notification of impending issues or problems.

Results of Operations

         During the Partnership's third quarter of 1998, the net asset value per
Unit  increased  20.8% from  $5,138.47  to  $6,208.79,  as compared to the third
quarter  of 1997 in which  the net  asset  value per Unit  increased  8.6%.  The
Partnership  experienced  a net trading gain before  brokerage  commissions  and
related fees in the third quarter of 1998 of $4,437,843.  Gains were  recognized
in the trading of  currencies,  livestock,  U.S.  and non U.S.  interest  rates,
indices  and grains  and were  partially  offset by losses in softs,  metals and
energy products. The Partnership experienced a net trading gain before brokerage
commissions  and related fees in the third quarter of 1997 of $1,725,289.  Gains
were recognized in the trading of commodity futures in currencies,  U.S. and non
U.S.  interest rates and indices and were partially offset by losses  recognized
in metals, softs, energy products, grains and livestock.

         Commodity futures markets are highly volatile. Broad price fluctuations
and rapid  inflation  increase the risks involved in commodity  trading but also
increase the possibility of profit. The profitability of the Partnership depends
on the  existence  of major  price  trends and the  ability of the  Advisors  to
identify  correctly  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

                                                        10

<PAGE>



exist and the Advisors are able to identify  them,  the  Partnership  expects to
increase capital through operations.
         Interest  income earned on U.S.  Treasury Bills decreased by $2,358 for
the three months ended  September  30,  1998,  as compared to the  corresponding
period in 1997.  Interest  income for the nine months ended  September 30, 1998,
increased  by  $10,450  as  compared  to  the  corresponding   period  in  1997.
Fluctuations in interest income are due to the percentage of U.S. Treasury Bills
to assets held by the Partnership  varying as a result of the effects of trading
performance on Partnership equity.

         Brokerage commissions are based on the number of trades executed by the
Advisors.  Accordingly, they must be compared in relation to the fluctuations in
the monthly net asset values.  Brokerage  commissions and fees for the three and
nine  months  ended  September  30,  1998  increased  by  $12,035  and  $94,812,
respectively, as compared to the corresponding periods in 1997.

         Incentive fees are based on the new trading  profits  generated by each
Advisor as defined in the  advisory  agreements  between  the  Partnership,  the
General  Partner and each Advisor.  Trading  performance  for the three and nine
months  ended  September  30, 1998  resulted in  incentive  fees of $433,960 and
$441,174, respectively.  Trading performance for the three and nine months ended
September  30,  1997  resulted  in  incentive   fees  of  $13,146  and  $33,829,
respectively.


                                                        11

<PAGE>



Item 3.           Quantitative and Qualitative Disclosures of Market Risk

         The Partnership is subject to SEC Financial  Reporting  Release No. 48,
regarding  quantitative  and  qualitative  disclosures  of market  risk and will
comply with the  disclosure  and reporting  requirements  in its Form 10-K as of
December 31, 1998.

                                                        12

<PAGE>




                        PART II OTHER INFORMATION


Item 1.       Legal Proceedings

          Between May 1994 and the present, Salomon Brothers Inc. ("SBI"), Smith
          Barney Inc. ("SB") and The Robinson  Humphrey  Company,  Inc. ("R-H"),
          all  currently  subsidiaries  of Salomon  Smith Barney  Holdings  Inc.
          ("SSBH"),  along with a number of other broker-dealers,  were named as
          defendants in  approximately  25 federal court  lawsuits and two state
          court lawsuits,  principally alleging that companies that make markets
          in securities  traded on NASDAQ violated the federal antitrust laws by
          conspiring  to maintain a minimum  spread of $.25  between the bid and
          asked price for certain securities. The federal lawsuits and one state
          court case were  consolidated  for pre-trial  purposes in the Southern
          District  of New  York in the fall of 1994  under  the  caption  In re
          NASDAQ  Market-Makers  Antitrust  Litigation,  United States  District
          Court, Southern District of New York No. 94-CIV-3996 (RWS); M.D.L. No.
          1023. The other state court suit,  Lawrence A. Abel v. Merrill Lynch &
          Co., Inc. et al.;  Superior Court of San Diego,  Case No. 677313,  has
          been  dismissed  without  prejudice  in  conjunction  with  a  tolling
          agreement.

          In consolidated action, the plaintiffs purport to represent a class of
          persons who bought one or more of what they  currently  estimate to be
          approximately  1,650  securities on NASDAQ between May 1, 1989 and May
          27,  1994.  They seek  unspecified  monetary  damages,  which would be
          trebled under the antitrust  laws. The plaintiffs also seek injunctive
          relief,  as well as attorney's fees and the costs of the action.  (The
          state  cases seek  similar  relief.)  Plaintiffs  in the  consolidated
          action  filed  an  amended  consolidated   complaint  that  defendants
          answered in December 1995. On November 26, 1996, the Court certified a
          class composed of retail purchasers. A motion to include institutional
          investors in the class and to add class  representatives  was granted.
          In  December  1997,  SBI,  SB  and  R- H,  along  with  several  other
          broker-dealer  defendants,  executed a settlement  agreement  with the
          plaintiffs. This agreement has been preliminarily approved by the U.S.
          District Court for the Southern District of New York but is subject to
          final approval.

          On July 17, 1996, the Antitrust  Division of the Department of Justice
          filed a complaint  against a number of firms that act as market makers
          in  NASDAQ  stocks.  The  complaint  basically  alleged  that a common
          understanding  arose among NASDAQ  market  makers which worked to keep
          quote spreads in NASDAQ stocks artificially wide. Contemporaneous with
          the filing of the

                                                        13

<PAGE>



          complaint,  SBI, SB and other  defendants  entered  into a  stipulated
          settlement agreement, pursuant to which the defendants would agree not
          to engage in  certain  practices  relating  to the  quoting  of NASDAQ
          securities  and would  further  agree to implement a program to ensure
          compliance  with  federal  antitrust  laws and  with the  terms of the
          settlement. In entering into the stipulated settlement, SBI and SB did
          not admit any  liability.  There  are no  fines,  penalties,  or other
          payments of monies in connection with the  settlement.  In April 1997,
          the U.S. District Court for the Southern District of New York approved
          the  settlement.  In May 1997,  plaintiffs in the related civil action
          (who were  permitted to intervene for limited  purposes)  appealed the
          district court's approval of the settlement.  The appeal was argued in
          March 1998 and was affirmed in August 1998.

          The Securities and Exchange  Commission  ("SEC") is also  conducting a
          review  of the  NASDAQ  marketplace,  during  which it has  subpoenaed
          documents and taken the testimony of various individuals including SBI
          and SB personnel.  In July 1996, the SEC reached a settlement with the
          National  Association  of  Securities  Dealers  and  issued  a  report
          detailing certain  conclusions with respect to the NASD and the NASDAQ
          market.

          In December 1996, a complaint seeking unspecified monetary damages was
          filed by Orange County,  California  against numerous brokerage firms,
          including SB, in the U.S. Bankruptcy Court for the Central District of
          California. Plaintiff alleged, among other things, that the defendants
          recommended  and sold to  plaintiff  unsuitable  securities.  The case
          (County of Orange et al. v. Bear  Stearns & Co.  Inc. et al.) has been
          stayed by agreement of the parties.

Item 2.       Changes in Securities and Use of Proceeds - None

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.         (a) Exhibits - None

                (b) Reports on Form 8-K - None


                                                        14

<PAGE>



                        SIGNATURES
     Pursuant  to the  requirements  of Section  13 or 15 (d) 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. II


By:   Smith Barney Futures Management Inc.
         (General Partner)


By:
         David J. Vogel, President

Date:

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.
By:   Smith Barney Futures Management Inc.
         (General Partner)


By:
         David J. Vogel, President


Date:



By
         Daniel A. Dantuono
         Chief Financial Officer and
         Director

Date:

                                                        15

<PAGE>


                                 SIGNATURES
     Pursuant  to the  requirements  of Section  13 or 15 (d) 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. II


By:   Smith Barney Futures Management Inc.
           (General Partner)


By:   /s/ David J. Vogel, President
           David J. Vogel, President

Date:         11/12/98

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

By:   Smith Barney Futures Management Inc.
           (General Partner)


By:   /s/ David J. Vogel, President
          David J. Vogel, President


Date:         11/12/98



By   /s/ Daniel A. Dantuono
         Daniel A. Dantuono
         Chief Financial Officer and Director


Date:         11/12/98


                                                        15

<PAGE>