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 from                to

Commission File Number 0-18314

	MORGAN STANLEY PRINCIPAL PLUS FUND L.P.

	(Exact name of registrant as specified in its charter)

		Delaware						     13-3541588
(State or other jurisdiction of		   		  (I.R.S. Employer
incorporation or organization)			       Identification No.)


Demeter Management Corporation
522 Fifth Avenue, 13th Floor
New York, NY							      	10036
(Address of principal executive offices)	  	         (Zip Code)

Registrant?s telephone number, including area code       (212) 296-1999



(Former name, former address, and former fiscal year, if changed since
last report)

40: Indicate by check mark whether the registrant (1) has filed all reports
41: 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 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 filer___Accelerated filer____Non-accelerated filer X

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).  Yes___  No X


	<page> <table> MORGAN STANLEY PRINCIPAL PLUS FUND L.P.

	INDEX TO QUARTERLY REPORT ON FORM 10-Q

	September 30, 2007

<caption>


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

				<c>
	Consolidated Statements of Financial Condition as of
	September 30, 2007 (Unaudited) and December 31, 2006..........2

	Consolidated Statements of Operations for the Three and
	Nine Months Ended September 30, 2007 and 2006 (Unaudited).....3

	Consolidated Statements of Changes in Partners? Capital for
the Nine Months Ended September 30, 2007 and 2006 (Unaudited).4

	Consolidated Statements of Cash Flows for the Nine Months
	Ended September 30, 2007 and 2006 (Unaudited).................5

	Consolidated Schedules of Investments as of September 30,
	2007 (Unaudited) and December 31, 2006........................6

	Notes to Consolidated Financial Statements (Unaudited).....7-13

Item 2.	Management?s Discussion and Analysis of
			Financial Condition and Results of Operations........14-28

Item 3.	Quantitative and Qualitative Disclosures about
			Market Risk..........................................28-42

Item 4.	Controls and Procedures.................................42

Item 4T.	Controls and Procedures.................................42


PART II. OTHER INFORMATION

Item 1A.Risk Factors............................................43

Item 6.	Exhibits................................................43


</table>


<page> <table> PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

	MORGAN STANLEY PRINCIPAL PLUS FUND L.P.
	CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<caption>
               September 30,	     December 31,
                                     2007      	    2006
	                      $	    $
	                        (Unaudited)
ASSETS

	<c>	<c>
Equity in futures interests trading accounts:
	Unrestricted cash	11,277,683	13,545,110
    Restricted cash					                            756,452	       681,672

	     Total cash	  12,034,135	   14,226,782

	Net unrealized gain on open contracts (MS&Co.)	357,326   	         10,199
	Net unrealized gain (loss) on open contracts (MSIP)	       (21,319)	         11,335

	     Total net unrealized gain on open contracts	      336,007	         21,534

	     Total Trading Equity	12,370,142	  14,248,316

Interest receivable (MS&Co.)	         35,925	          56,037

	     Total Assets	  12,406,067	   14,304,353

LIABILITIES AND PARTNERS? CAPITAL

Liabilities

Accrued administrative expenses	86,080	99,434
Redemptions payable	73,534	137,293
Accrued brokerage fees (MS&Co.)	41,067	47,350
Accrued management fees  	        10,267	         11,838

	     Total Liabilities          210,948	      295,915

Minority Interest	          3,783	          3,253

Partners? Capital

Limited Partners (6,245.088 and
    7,225.105 Units, respectively)	11,984,032	13,798,864
General Partner (108.030 Units)	      207,304	        206,321

	     Total Partners? Capital	  12,191,336  	   14,005,185

	     Total Liabilities and Partners? Capital	  12,406,067	   14,304,353


NET ASSET VALUE PER UNIT 	      1,918.95	       1,909.85

<fn>

	The accompanying notes are an integral part
	of these consolidated financial statements.
</table>


	<page> <table> MORGAN STANLEY PRINCIPAL PLUS FUND L.P.
	CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

	<caption>

                                        For the Three Months                    For the Nine Months
                                   Ended September 30,                   Ended September 30,


                             2007   	              2006    	        2007   	    2006
                        $	                 $	            $	 	$

	                                                                 <c>                             <c>          	 <c>		<c>
INVESTMENT INCOME
	Interest income (MS&Co.)	    128,958		    171,682	   427,419		           503,581

EXPENSES
	Brokerage commissions (MS&Co.)	122,944	149,093	390,142	475,165
	Administrative expenses	39,000	29,000	103,000	81,000
	Management fees	30,736	37,273      	    97,535	118,791
	Transaction fees and costs	     18,685	      13,372	     42,925	      35,880

		   Total Expenses 	    211,365	    228,738	   633,602	    710,836

NET INVESTMENT LOSS 	     (82,407)	     (57,056)	  (206,183)	   (207,255)

TRADING RESULTS
Trading profit (loss):
	Realized	(124,699)	26,781 	(63,003)	(110,240)
	Net change in unrealized	    153,740	     239,635	      314,473	     434,818

		   Total Trading Results	      29,041	     266,416	   251,470 	      324,578

NET INCOME (LOSS) BEFORE
 MINORITY INTEREST	(53,366)	209,360	45,287	117,323

Less: Minority Interest	         (571)	        2,063        	          530	          547

NET INCOME (LOSS)	    (52,795)	     207,297	     44,757   	    116,776

NET INCOME (LOSS) ALLOCATION

	Limited Partners	(52,087)	204,370	                 43,774  	115,191
	General Partner 	(708)	2,927		          983	       1,585


NET INCOME (LOSS) PER UNIT

	Limited Partners                                                  	(6.55)	        27.09            	   9.10	14.67
	General Partner                                                  	(6.55)	        27.09            	   9.10	14.67


                        Units                  Units            Units             Units
WEIGHTED AVERAGE NUMBER
	OF UNITS OUTSTANDING               6,454.443     7,802.921    6,776.800    8,244.526      		 	(0.19)
 <fn>
The accompanying notes are an integral part
of these consolidated financial statements.

</table>


<page> <table> MORGAN STANLEY PRINCIPAL PLUS FUND L.P.
	CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS? CAPITAL
	For the Nine Months Ended September 30, 2007 and 2006
	(Unaudited)

<caption>



	  Units of
	   Partnership	Limited	General
	   Interest   	Partners	Partner	   Total
		$	$	   $

	<c>	<c>	<c>	<c>
Partners? Capital,
	December 31, 2005	   8,927.367	16,716,099	          204,759	              16,920,858

Net Income                   	?		115,191	1,585	116,776

Redemptions	   (1,327.573)	 (2,521,585)                ?      	  (2,521,585)

Partners? Capital,
	September 30, 2006	    7,599.794	  14,309,705	  206,344	  14,516,049





Partners? Capital,
	December 31, 2006	   7,333.135	13,798,864	          206,321	              14,005,185

Net Income                   	?		43,774	983	44,757

Redemptions	   (980.017)	 (1,858,606)                ?      	  (1,858,606)

Partners? Capital,
	September 30, 2007	    6,353.118	  11,984,032	  207,304	  12,191,336








<fn>




The accompanying notes are an integral part
	of these consolidated financial statements.
</table>


<page> <table> 	MORGAN STANLEY PRINCIPAL PLUS FUND L.P.
	CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)


<caption>


	          For the Nine Months Ended September 30,

	      2007     	      2006
	      $	      $


CASH FLOWS FROM OPERATING ACTIVITIES

			<c>	<c>
Net income 	44,757	116,776
Noncash item included in net income:
	Net change in unrealized	(314,473)	(434,818)

(Increase) decrease in operating assets:
	Restricted cash	(74,780)	(62,079)
	Interest receivable (MS&Co.)	20,112	(2,475)

Decrease in operating liabilities:
	Accrued administrative expenses	(13,354)	(36,115)
	Accrued brokerage fees (MS&Co.)	(6,283)	(8,013)
	Accrued management fees	      (1,571)	            (2,002)

Net cash used for operating activities	   (345,592)	        (428,726)


CASH FLOWS FROM FINANCING ACTIVITIES

Cash paid for redemptions of Units	(1,922,365)	(2,510,963)
Increase in minority interest	            530	                 547

Net cash used for financing activities	  (1,921,835)	     (2,510,416)

Net decrease in unrestricted cash	(2,267,427)	(2,939,142)

Unrestricted cash at beginning of period	  13,545,110	    16,730,219

Unrestricted cash at end of period	  11,277,683	    13,791,077






<fn>

	The accompanying notes are an integral part
	of these consolidated financial statements.
</table>


<page> <table> MORGAN STANLEY PRINCIPAL PLUS FUND L.P.
CONSOLIDATED SCHEDULES OF INVESTMENTS
September 30, 2007 (Unaudited) and December 31, 2006

<caption>


Futures and Forward Contracts
Long
Unrealized
Gain/(Loss)

Percentage of
  Net Assets
      Short
  Unrealized
 Gain/(Loss)

Percentage of
  Net Assets
       Net
  Unrealized
  Gain/(Loss)

$
%
$
%
$

September 30, 2007, Partnership Net Assets:  $12,191,336





<c>
<c>
<c>
<c>
<c>
Commodity
     25,422
        0.21
     19,800
       0.16
     45,222
Equity
 141,651
        1.16
 ?
          ?
   141,651
Foreign currency
     34,809
        0.29
     66,618
       0.55
   101,427
Interest rate
     31,521
        0.26
       2,778
       0.02
     34,299






     Grand Total:
   233,403
        1.92
     89,196
       0.73
   322,599

     Unrealized Currency Gain





     13,408

     Total Net Unrealized Gain per Statement of Financial Condition



     336,007


 December 31, 2006, Partnership Net Assets: $14,005,185









Commodity
       6,542
        0.05
      28,610
       0.20
     35,152
Equity
     6,338
        0.05
 ?
          ?
       6,338
Foreign currency
     (5,450)
       (0.04)
         (788)
      (0.01)
      (6,238)
Interest rate
   (59,578)
       (0.43)
      77,876
       0.56
     18,298






     Grand Total:
   (52,148)
       (0.37)
    105,698
       0.75
     53,550

     Unrealized Currency Loss





   (32,016)

     Total Net Unrealized Gain per Statement of Financial Condition



      21,534

<fn>




The accompanying notes are an integral part
of these consolidated financial statements.
</table>





<page> MORGAN STANLEY PRINCIPAL PLUS FUND L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2007

(Unaudited)

The unaudited consolidated financial statements contained herein
include, in the opinion of management, all adjustments necessary
for a fair presentation of the results of operations and financial
condition of Morgan Stanley Principal Plus Fund L.P. (the
?Partnership?).  The consolidated financial statements and
condensed notes herein should be read in conjunction with the
Partnership?s December 31, 2006, Annual Report on Form 10-K.

1.  Organization
Morgan Stanley Principal Plus Fund L.P. is a Delaware limited
partnership organized in 1989 to engage primarily in the
speculative trading of futures contracts, options on futures
contracts, and forward contracts on physical commodities and other
commodity interests (collectively, ?Futures Interests?).

The Partnership?s general partner is Demeter Management
Corporation (?Demeter?).  Morgan Stanley & Co. Incorporated
(?MS&Co.?) is the Partnership?s principal commodity broker-dealer
and also acts as the counterparty on all trading of foreign
currency forward contracts.  In addition, Morgan Stanley & Co.

<page> MORGAN STANLEY PRINCIPAL PLUS FUND L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

International plc (?MSIP?) serves as the commodity broker for
trades on the London Metal Exchange.  Demeter, MS&Co., and MSIP
are wholly-owned subsidiaries of Morgan Stanley.  The trading
advisor to the Partnership is SSARIS Advisors, LLC (the ?Trading
Advisor?).  Morgan Stanley Principal Plus Fund Management L.P.
(the ?Trading Company?) was established solely to trade in Futures
Interests on behalf of the Partnership.

2.  Related Party Transactions
The Partnership?s and Trading Company?s cash is on deposit with
MS&Co. and MSIP in futures, forward, and options trading accounts
to meet margin requirements as needed.  MS&Co. pays monthly
interest income on 100% and 90% of the Partnership?s and the
Trading Company?s, respectively, average daily Net Assets for the
month at a rate equal to the monthly average yield on the 4-week
U.S. Treasury bills discount rate during such month.  The Trading
Company pays brokerage fees to MS&Co.

3.  Financial Instruments
The Partnership trades Futures Interests.  Futures and forwards
represent contracts for delayed delivery of an instrument at a
specified date and price.  Risk arises from changes in the value
of these contracts and the potential inability of counterparties
to perform under the terms of the contracts.  There are numerous

<page> MORGAN STANLEY PRINCIPAL PLUS FUND L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

factors which may significantly influence the market value of
these contracts, including interest rate volatility.


The market value of exchange-traded contracts is based on the
settlement price quoted by the exchange on the day with respect to
which market value is being determined.  If an exchange-traded
contract could not have been liquidated on such day due to the
operation of daily limits or other rules of the exchange, the
settlement price shall be the settlement price on the first
subsequent day on which the contract could be liquidated.  The
market value of off-exchange-traded contracts is based on the fair
market value quoted by the counterparty.


The Partnership?s contracts are accounted for on a trade-date
basis and marked to market on a daily basis.  The Partnership
accounts for its derivative investments in accordance with the
provisions of Statement of Financial Accounting Standards No.
133, ?Accounting for Derivative Instruments and Hedging
Activities? (?SFAS No. 133?).  SFAS No. 133 defines a derivative
as a financial instrument or other contract that has all three of
the following characteristics:






<page> MORGAN STANLEY PRINCIPAL PLUS FUND L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

1)	One or more underlying notional amounts or payment
provisions;
2)	Requires no initial net investment or a smaller initial net
investment than would be required relative to changes in
market factors;
3)	Terms require or permit net settlement.

Generally, derivatives include futures, forward, swap or options
contracts, and other financial instruments with similar
characteristics such as caps, floors, and collars.


The net unrealized gains on open contracts, reported as a
component of ?Equity in futures interests trading accounts? on the
Consolidated Statements of Financial Condition, and their longest
contract maturities were as follows:

	Net Unrealized Gains
	on Open Contracts	Longest Maturities
		Off-			Off-
	Exchange-	Exchange-		Exchange-	Exchange-
Date	 Traded 	 Traded 	Total	 Traded 	 Traded
	  $	   $	  $
Sep. 30, 2007	336,007	-  	336,007	    Mar. 2008       -
Dec. 31, 2006	21,534	-  	21,534    	Jun. 2007       -

The Partnership has credit risk associated with counterparty non-
performance.  As of the date of the consolidated financial

<page> MORGAN STANLEY PRINCIPAL PLUS FUND L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



statements, the credit risk associated with the instruments in
which the Partnership trades is limited to the amounts reflected
in the Partnership?s Consolidated Statements of Financial
Condition.


The Partnership also has credit risk because MS&Co. and MSIP act
as the futures commission merchants or the counterparties, with
respect to most of the Partnership?s assets. Exchange-traded
futures, exchange-traded forward, and exchange-traded futures-
styled options contracts are marked to market on a daily basis,
with variations in value settled on a daily basis.  MS&Co. and
MSIP, each as a futures commission merchant for the Partnership?s
exchange-traded futures, exchange-traded forward, and exchange-
traded futures-styled options contracts, are required, pursuant to
regulations of the Commodity Futures Trading Commission (?CFTC?),
to segregate from their own assets, and for the sole benefit of
their commodity customers, all funds held by them with respect to
exchange-traded futures, exchange-traded forward, and exchange-
traded futures-styled options contracts, including an amount equal
to the net unrealized gains (losses) on all open exchange-traded
futures, exchange-traded forward, and exchange-traded futures-
styled options contracts, which  funds, in the aggregate, totaled
$12,370,142 and $14,248,316 at September 30, 2007, and December

<page> MORGAN STANLEY PRINCIPAL PLUS FUND L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

31, 2006, respectively.  With respect to the Partnership?s off-
exchange-traded forward currency contracts, there are no daily
settlements of variation in value, nor is there any requirement
that an amount equal to the net unrealized gains (losses) on such
contracts be segregated.  However, the Partnership is required to
meet margin requirements equal to the net unrealized loss on open
forward currency contracts in the Partnership accounts with the
counterparty, which is accomplished by daily maintenance of the
cash balance in a custody account held at MS&Co.  With respect to
those off-exchange-traded forward currency contracts, the
Partnership is at risk to the ability of MS&Co., the sole
counterparty on all such contracts, to perform. The Partnership
has a netting agreement with MS&Co.   This agreement, which seeks
to reduce both the Partnership?s and MS&Co.?s exposure to off-
exchange-traded forward currency contracts, should materially
decrease the Partnership?s credit risk in the event of MS&Co.?s
bankruptcy or insolvency.



4.  New Accounting Developments
In July 2006, the Financial Accounting Standards Board (?FASB?)
issued interpretation No. 48, ?Accounting for Uncertainty in
Income Taxes ? an interpretation of FASB Statement 109? (?FIN
48?).  FIN 48 clarifies the accounting for income taxes by
prescribing the minimum recognition threshold a tax position must

<page> MORGAN STANLEY PRINCIPAL PLUS FUND L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONCLUDED)



meet before being recognized in the financial statements.  FIN 48
was effective for the Partnership as of January 1, 2007.  Based
on its analysis, management believes that the adoption of FIN 48
has no impact on the Partnership?s financial statements.




In September 2006, the FASB issued SFAS No. 157, ?Fair Value
Measurements? (?SFAS No. 157?).  SFAS No. 157 defines fair value,
establishes a framework for measuring fair value, and expands
disclosures about fair value measurements.  SFAS NO. 157 is
effective for the Partnership as of January 1, 2008.  The impact
to the Partnership?s consolidated financial statements, if any, is
currently being assessed.

5.  Restricted and Unrestricted Cash
As reflected on the Partnership?s Consolidated Statements of
Financial Condition, restricted cash represents cash on deposit to
satisfy margin requirements for trading.  These amounts of
restricted cash are maintained in separate trading accounts.  Cash
that is not on deposit to satisfy the margin requirements for
trading is reflected as unrestricted cash.




<page>
Item 2.	MANAGEMENT?S DISCUSSION AND ANALYSIS OF FINANCIAL
	CONDITION AND RESULTS OF OPERATIONS


Liquidity.  The Partnership deposits its assets with MS&Co. and
MSIP as commodity brokers in separate futures, forward, and
options trading accounts established for the Trading Advisor.
Such assets are used as margin to engage in trading and may be
used as margin solely for the Partnership?s trading. The assets
are held in either non-interest bearing bank accounts or in
securities and instruments permitted by the CFTC for investment of
customer segregated or secured funds.  Since the Partnership?s
sole purpose is to trade in futures, forwards, and options, it is
expected that the Partnership will continue to own such liquid
assets for margin purposes.

The Partnership?s investment in futures, forwards, and options
may, from time to time, be illiquid.  Most U.S. futures exchanges
limit fluctuations in prices during a single day by regulations
referred to as ?daily price fluctuations limits? or ?daily
limits?.  Trades may not be executed at prices beyond the daily
limit.  If the price for a particular futures or options contract
has increased or decreased by an amount equal to the daily limit,
positions in that futures or options contract can neither be taken
nor liquidated unless traders are willing to effect trades at or
within the limit.  Futures prices have occasionally moved the
daily limit for several consecutive days with little or no
trading. These market conditions could prevent the Partnership
<page> from promptly liquidating its futures or options contracts
and result in restrictions on redemptions.

There is no limitation on daily price moves in trading forward
contracts on foreign currencies.  The markets for some world
currencies have low trading volume and are illiquid, which may
prevent the Partnership from trading in potentially profitable
markets or prevent the Partnership from promptly liquidating
unfavorable positions in such markets, subjecting it to
substantial losses.  Either of these market conditions could
result in restrictions on redemptions. For the periods covered by
this report, illiquidity has not materially affected the
Partnership?s assets.

There are no known material trends, demands, commitments, events,
or uncertainties at the present time that are reasonably likely to
result in the Partnership?s liquidity increasing or decreasing in
any material way.

Capital Resources.  The Partnership does not have, nor does it
expect to have, any capital assets.  Redemptions of units of
limited partnership interest (?Unit(s)?) in the future will affect
the amount of funds available for investments in futures,
forwards, and options in subsequent periods.  It is not possible
to estimate the amount, and therefore the impact, of future
outflows of Units.
<page> There are no known material trends, favorable or
unfavorable, that would affect, nor any expected material changes
to, the Partnership?s capital resource arrangements at the present
time.

Off-Balance Sheet Arrangements and Contractual Obligations.  The
Partnership does not have any off-balance sheet arrangements, nor
does it have contractual obligations or commercial commitments to
make future payments that would affect its liquidity or capital
resources.

Results of Operations
General.  The Partnership?s results depend on the Trading Advisor
and the ability of the Trading Advisor?s trading program to take
advantage of price movements in the futures, forward, and options
markets.  The following presents a summary of the Partnership?s
operations for the three and nine month periods ended September
30, 2007, and 2006, and a general discussion of its trading
activities during each period.  It is important to note, however,
that the Trading Advisor trades in various markets at different
times and that prior activity in a particular market does not mean
that such market will be actively traded by the Trading Advisor or
will be profitable in the future. Consequently, the results of
operations of the Partnership are difficult to discuss other than
in the context of the Trading Advisor?s trading activities on
<page> behalf of the Partnership during the period in question.
Past performance is no guarantee of future results.

The Partnership?s results of operations set forth in the
financial statements on pages 2 through 13 of this report are
prepared in accordance with accounting principles generally
accepted in the United States of America, which require the use
of certain accounting policies that affect the amounts reported
in these financial statements, including the following: The
contracts the Partnership trades are accounted for on a trade-
date basis and marked to market on a daily basis. The difference
between their cost and market value is recorded on the
Consolidated Statements of Operations as ?Net change in
unrealized trading profit (loss)? for open (unrealized)
contracts, and recorded as ?Realized trading profit (loss)? when
open positions are closed out.  The sum of these amounts
constitutes the Partnership?s trading results.  The market value
of a futures contract is the settlement price on the exchange on
which that futures contract is traded on a particular day.  The
value of a foreign currency forward contract is based on the spot
rate as of the close of business.  Interest income, as well as
management fees, incentive fees, brokerage fees, and transaction
fees and costs of the Partnership are recorded on an accrual
basis.

<page> Demeter believes that, based on the nature of the
operations of the Partnership, no assumptions relating to the
application of critical accounting policies other than those
presently used could reasonably affect reported amounts.

For the Three and Nine Months Ended September 30, 2007
The Partnership recorded total trading results including interest
income totaling $157,999, expenses totaling $211,365, and
minority interest of $571, resulting in a net loss of $52,795 for
the three months ended September 30, 2007.  The Partnership?s net
asset value per Unit decreased from $1,925.50 at June 30, 2007,
to $1,918.95 at September 30, 2007.

The most significant trading losses of approximately 2.6% were
recorded in the global stock index sector primarily during July
and August from long positions in European and U.S. equity index
futures as prices fell sharply amid speculation that a widening
credit crunch, sparked by U.S. sub-prime mortgage losses, would
erode global economic growth and corporate earnings.  Elsewhere,
losses of approximately 0.3% were incurred in the agricultural
markets primarily during August from long positions in live
cattle futures as prices fell amid concerns that a decline in the
U.S. economy and further losses in the equity markets would cause
a decline in consumer demand.  Elsewhere in the agricultural
complex, short positions in corn futures resulted in additional
losses during August as prices increased amid fears that <page>
persistent dry weather in global growing regions would
significantly decrease supply.  Further losses of approximately
0.3% were experienced in the metals markets primarily during
August from both short and long positions in copper and zinc
futures as prices moved without consistent direction amid
conflicting data regarding supply and demand.  A portion of the
Partnership?s losses in the third quarter was offset by gains of
approximately 2.4% experienced in the global interest rate sector
primarily during August from long positions in U.S., German, and
Japanese fixed-income futures as prices increased in a worldwide
?flight-to-quality? after volatility in global equity markets,
spurred by losses in the U.S. sub-prime mortgage sector, caused
investors to seek the ?safe haven? of government bonds.  During
September, smaller gains were recorded from long positions in
U.S. interest rate futures as prices moved higher leading up to
and after the U.S. Federal Reserve?s decision to cut interest
rates at its September 18 meeting.  Further gains of
approximately 0.7% were experienced in the currency sector during
August from long positions in the Australian dollar versus the
New Zealand dollar as the value of the Australian dollar moved
higher against the New Zealand dollar after the Australian Bureau
of Statistics reported that retail sales in Australia had climbed
more than expected in July.  Additional gains were recorded
during September from outright short positions in the U.S. Dollar
Index, as well as from long positions in the euro and British
pound versus the U.S. dollar, as the value of the U.S. dollar
<page> moved lower relative to most of its major rivals amid the
aforementioned interest rate cut by the U.S. Federal Reserve.
Furthermore, the value of the U.S. dollar was pulled lower amid
speculation that the U.S. Federal Reserve would continue to
reduce interest rates in the near term in order to spur economic
growth after the recent collapse of the sub-prime mortgage
market.  Lastly, short positions in the euro versus the Norwegian
krone resulted in gains during September as the value of the
Norwegian krone moved higher in tandem with rising energy prices.
Smaller gains of approximately 0.1% were recorded in the energy
markets primarily during July from long futures positions in
Brent crude oil as prices moved higher amid worries that supplies
of European North Sea oil would dwindle.

The Partnership recorded total trading results including interest
income totaling $678,889, expenses totaling $633,602, and
minority interest of $530, resulting in net income of $44,757 for
the nine months ended September 30, 2007.  The Partnership?s net
asset value per Unit increased from $1,909.85 at December 31,
2006, to $1,918.95 at September 30, 2007.

The most significant trading gains of approximately 3.5% were
experienced in the global interest rate sector during May and
June from short positions in European fixed-income futures as
prices trended lower amid consistently strong consumer sentiment
and unemployment data out of Germany and the United Kingdom.
<page> Elsewhere, gains were recorded from short positions in
Japanese government bond futures primarily during June as prices
moved lower on weaker demand for Japanese yen-denominated assets.
During August, newly established long positions in U.S., German,
and Japanese fixed-income futures resulted in gains as prices
increased in a continuation of a worldwide ?flight-to-quality?
after volatility in global equity markets, spurred by losses in
the U.S. sub-prime mortgage sector, caused investors to seek the
?safe haven? of government bonds.  During September, smaller
gains were recorded from long positions in U.S. interest rate
futures as prices moved higher leading up to and after the U.S.
Federal Reserve?s decision to cut interest rates at its September
18, 2007,  meeting.  Additional gains of approximately 0.7% were
recorded in the metals markets during February, March, and April
from long positions in nickel and copper futures as prices moved
higher on speculation that low stockpiles would create a supply
shortage in the future and after the International Monetary
Fund's strong global growth forecasts bolstered sentiment that
demand for base metals would increase this year.  Further gains
were recorded from newly established short positions in nickel
futures as prices moved lower during June on news that China
would cut stainless steel output.  Elsewhere, short positions in
silver futures resulted in gains during March and June as prices
fell amid speculative selling.  Gains of approximately 0.4% were
recorded in the energy markets during March, April, and July from
long futures positions in Brent crude oil and gasoline as prices
<page> increased amid concerns of rising geopolitical tension in
the Middle East and worries that supplies of European North Sea
oil were dwindling.  Finally, gains of approximately 0.4% were
experienced in the currency sector primarily during April, May,
and September from outright short positions in the U.S. Dollar
Index, as well as from long positions in the euro and British
pound versus the U.S. dollar, as the value of the euro moved
higher after the Ifo Institute stated that German business
sentiment had climbed to the second highest on record in April
and the value of the British pound moved higher as consistently
strong economic data out of the United Kingdom increased
speculation that the Bank of England would increase interest
rates.  In addition, the value of the U.S. dollar moved lower
relative to most of its major rivals leading up to and after the
U.S. Federal Reserve?s decision to cut interest rates at its
September 18 meeting.  A portion of the Partnership?s gains in
the first nine months of the year was offset by losses of
approximately 2.7% recorded in the global stock index sector
during February and early March from long positions in U.S.,
European, and Pacific Rim stock index futures as prices reversed
sharply lower after a massive sell-off in the global equity
markets that began on February 27, 2007, following comments from
former U.S. Federal Reserve Chairman Alan Greenspan that the U.S.
economy could be due for a recession.  In addition, concerns that
tighter credit conditions in China and Japan might dampen global
growth first sent Chinese stock markets plunging before the sell-
<page> off spread to other equity markets.  During July and
August, long positions in European and U.S. equity index futures
resulted in further losses as prices fell sharply amid
speculation that a widening credit crunch, sparked by U.S. sub-
prime mortgage losses, would erode global economic growth and
corporate earnings.  Additional losses of approximately 0.7% were
recorded in the agricultural markets from both short and long
positions in lean hog futures as prices moved without consistent
direction during January, March, and May amid conflicting news
regarding  supply and demand.  Meanwhile, long positions in corn
futures resulted in losses during January as prices declined due
to speculative selling.  Further losses were incurred from newly
established short positions in corn futures as prices moved
higher during May, June, and August amid lower production and
fears that persistent dry weather in global growing regions would
significantly decrease supply.


For the Three and Nine Months Ended September 30, 2006
The Partnership recorded total trading results including interest
income totaling $438,098, expenses totaling $228,738, and
minority interest of $2,063, resulting in net income of $207,297
for the three months ended September 30, 2006.  The Partnership?s
net asset value per Unit increased from $1,882.97 at June 30,
2006, to $1,910.06 at September 30, 2006.

<page> The most significant trading gains of approximately 1.3%
were recorded in the global interest rate sector, primarily
during August, from long positions in U.S. fixed-income futures
as prices increased on higher demand amid concerns of a slowing
global economy and news that Iran would continue its nuclear
research program. During September, U.S. interest rate futures
prices moved higher following government reports showing a weak
housing market and slowing manufacturing activity. Additional
gains of approximately 0.9% were recorded in the global stock
index markets, during August and September, from long positions
in S&P 500 Index futures as prices moved higher on strong
performance in the technology sector, solid corporate earnings,
and a stronger than expected increase in U.S. consumer
confidence.  Within the metals markets, gains of approximately
0.1% were recorded, primarily during July and August, from long
positions in nickel futures as prices advanced on reports of weak
global stockpiles, consistently strong global demand, and lower
than forecasted production. In addition, prices were boosted by
news of labor disputes at mining facilities in Canada.  A portion
of the Partnership?s overall gains for the quarter was offset by
losses of approximately 0.5% in the agricultural markets during
July from short positions in corn futures as prices increased on
high demand and low inventories.  Additional losses were
experienced from newly established long positions in corn futures
as prices reversed lower towards the latter half of July on
favorable weather forecasts.  Elsewhere in the agricultural
<page> complex, losses were incurred during July from long
positions in orange juice futures as prices moved lower after the
U.S. Department of Agriculture reported an increase in orange
juice production.  Additional losses were incurred from newly
established short positions in orange juice futures as prices
reversed higher towards the end of July on concerns regarding
poor harvest due to hot weather and labor shortages.  Elsewhere
in the agricultural complex, long positions in lean hog and live
cattle futures incurred losses during July and September as
prices declined on technically-based selling.  Additional losses
of approximately 0.1% were incurred in the currency markets,
primarily during August, from long positions in the euro versus
the Australian dollar and U.S. dollar as the Australian dollar
strengthened on expectations that the Reserve Bank of Australia
would raise interest rates in the near future, while the U.S.
dollar moved higher on stronger than expected economic data.

The Partnership recorded total trading results including interest
income totaling $828,159, expenses totaling $710,836, and minority
interest of $547, resulting in net income of $116,776 for the nine
months ended September 30, 2006.  The Partnership?s net asset
value per Unit increased from $1,895.39 at December 31, 2005, to
$1,910.06 at September 30, 2006.


The most significant trading gains of approximately 1.4% were
recorded in the global stock index markets, primarily during
January and March, from long positions in U.S. equity index
<page> futures as prices trended higher on strong corporate
earnings and solid economic data.  Additional gains were
experienced, during August and September, from long positions in
U.S. equity index futures as prices increased on falling energy
prices. In addition, the S&P 500 Index closed at a five-and-a-
half year high after the U.S. Conference Board reported a
stronger than expected rebound in consumer confidence in
September. Additional gains of approximately 0.7% were
experienced within the metals markets, primarily during January
and March, from long futures positions in copper, nickel, and
zinc as prices strengthened amid weak supplies, forecasts for
continued buying by China, and acceleration in global demand.
Further gains were experienced, during July and August, from long
positions in nickel futures as prices advanced on reports of weak
global stockpiles, consistently strong global demand, and lower
than forecasted production. In addition, prices were boosted by
news of labor disputes at mining facilities in Canada.   Smaller
gains of approximately 0.6% were recorded in the global interest
rate futures markets, during March and April, from short
positions in U.S. fixed-income futures as prices trended lower
amid strength in regional equity markets and investor sentiment
that interest rates in the United States would rise in order to
combat inflation.  During August, further gains were recorded
from long positions in U.S. fixed-income futures as prices
increased on higher demand amid concerns of a slowing global
economy and news that Iran would continue its nuclear research
<page> program.  U.S. interest rate futures prices also moved
higher during September following government reports showing a
weak housing market and slowing manufacturing activity. A portion
of the Partnership?s overall gains for the first nine months of
the year was offset by losses of approximately 0.7% in the
agricultural markets, during May, from short futures positions in
corn as prices moved higher on news of strong demand and bullish
export data. During June, newly established long positions in
corn futures incurred further losses as prices reversed lower on
favorable weather conditions in the U.S. Midwest and reports of
improved crop conditions. Additional losses were recorded during
July from short and long positions in corn futures as prices
moved higher amid high demand but reversed lower at the end of
the month as the U.S. corn harvest started. Further losses in the
agricultural complex were incurred during July from long
positions in orange juice futures as prices moved lower after the
U.S. Department of Agriculture reported an increase in orange
juice production.  Additional losses were incurred from newly
established short positions in orange juice futures as prices
reversed higher toward the end of July on concerns regarding a
poor harvest due to hot weather and labor shortages.  Within the
energy markets, losses of approximately 0.2% were incurred during
March from short futures positions in crude oil and its related
products as prices moved higher on fears of supply disruptions
fueled by news of geopolitical tensions in Nigeria.  Newly
established long positions in crude oil futures experienced
<page> additional losses as prices fell during May after supply
data from the U.S. Department of Energy showed crude oil
inventory levels at an eight-year high.  Crude oil prices
continued to fall into June on news of the death of Iraqi
insurgent leader Abu Musab al-Zarqawi and positive steps taken
regarding the nuclear standoff between the U.S. and Iran.
Elsewhere in the energy markets, further losses were incurred
during July from short positions in natural gas futures as prices
moved higher amid hot weather across much of the U.S. and news of
a decline in domestic supplies. During August, additional losses
were recorded from newly established long positions in natural
gas futures as prices reversed lower on an overabundance in
supply.

Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Introduction
The Partnership is a commodity pool engaged primarily in the
speculative trading of futures, forwards, and options.  The
market-sensitive instruments held by the Partnership are acquired
for speculative trading purposes only and, as a result, all or
substantially all of the Partnership?s assets are at risk of
trading loss.  Unlike an operating company, the risk of market-
sensitive instruments is inherent to the primary business
activity of the Partnership.

<page> The futures, forwards, and options traded by the
Partnership involve varying degrees of related market risk.
Market risk is often dependent upon changes in the level or
volatility of interest rates, exchange rates, and prices of
financial instruments and commodities, factors that result in
frequent changes in the fair value of the Partnership?s open
positions, and consequently in its earnings, whether realized or
unrealized, and cash flow.  Gains and losses on open positions of
exchange-traded futures, exchange-traded forward, and exchange-
traded futures-styled options contracts are settled daily through
variation margin.  Gains and losses on off-exchange-traded
forward currency contracts are settled upon termination of the
contract.  However, the Partnership is required to meet margin
requirements equal to the net unrealized loss on open forward
currency contracts in the Partnership accounts with the
counterparty, which is accomplished by daily maintenance of the
cash balance in a custody account held at MS&Co.

The Partnership?s total market risk may increase or decrease as
it is influenced by a wide variety of factors, including, but not
limited to, the diversification among the Partnership?s open
positions, the volatility present within the markets, and the
liquidity of the markets.

The face value of the market sector instruments held by the
Partnership is typically many times the applicable margin <page>
requirements.  Margin requirements generally range between 2% and
15% of contract face value.  Additionally, the use of leverage
causes the face value of the market sector instruments held by
the Partnership typically to be many times the total
capitalization of the Partnership.

The Partnership?s past performance is no guarantee of its future
results.  Any attempt to numerically quantify the Partnership?s
market risk is limited by the uncertainty of its speculative
trading.  The Partnership?s speculative trading and use of
leverage may cause future losses and volatility (i.e., ?risk of
ruin?) that far exceed the Partnership?s experience to date under
the ?Partnership?s Value at Risk in Different Market Sectors?
section and significantly exceed the Value at Risk (?VaR?) tables
disclosed.

Limited partners will not be liable for losses exceeding the
current net asset value of their investment.

Quantifying the Partnership?s Trading Value at Risk
The following quantitative disclosures regarding the Partner-
ship?s market risk exposures contain ?forward-looking statements?
within the meaning of the safe harbor from civil liability
provided for such statements by the Private Securities Litigation
Reform Act of 1995 (set forth in Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of
<page> 1934).  All quantitative disclosures in this section are
deemed to be forward-looking statements for purposes of the safe
harbor, except for statements of historical fact.

The Partnership accounts for open positions on the basis of mark
to market accounting principles.  Any loss in the market value of
the Partnership?s open positions is directly reflected in the
Partnership?s earnings and cash flow.
The Partnership?s risk exposure in the market sectors traded by
the Trading Advisor is estimated below in terms of VaR. The
Partnership estimates VaR using a model based upon historical
simulation (with a confidence level of 99%) which involves
constructing a distribution of hypothetical daily changes in the
value of a trading portfolio.  The VaR model takes into account
linear exposures to risk including equity and commodity prices,
interest rates, foreign exchange rates, and correlation among
these variables.  The hypothetical changes in portfolio value are
based on daily percentage changes observed in key market indices
or other market factors (?market risk factors?) to which the
portfolio is sensitive.  The one-day 99% confidence level of the
Partnership?s VaR corresponds to the negative change in portfolio
value that, based on observed market risk factors, would have been
exceeded once in 100 trading days, or one day in 100.  VaR
typically does not represent the worst case outcome.  Demeter uses
approximately four years of daily market data (1,000 observations)
and re-values its portfolio (using delta-gamma approximations) for
<page> each of the historical market moves that occurred over this
time period.  This generates a probability distribution of daily
?simulated profit and loss? outcomes.  The VaR is the appropriate
percentile of this distribution.  For example, the 99% one-day VaR
would represent the 10th worst outcome from Demeter?s simulated
profit and loss series.

The Partnership?s VaR computations are based on the risk
representation of the underlying benchmark for each instrument or
contract and do not distinguish between exchange and non-exchange
dealer-based instruments.  They are also not based on exchange
and/or dealer-based maintenance margin requirements.

VaR models, including the Partnership?s, are continually evolving
as trading portfolios become more diverse and modeling techniques
and systems capabilities improve.  Please note that the VaR model
is used to numerically quantify market risk for historic
reporting purposes only and is not utilized by either Demeter or
the Trading Advisor in their daily risk management activities.
Please further note that VaR as described above may not be
comparable to similarly-titled measures used by other entities.

The Partnership?s Value at Risk in Different Market Sectors
The following table indicates the VaR associated with the
Partnership?s open positions as a percentage of total Net Assets
by primary market risk category at September 30, 2007 and 2006. At
<page> September 30, 2007 and 2006, the Partnership?s total
capitalization was approximately $12 million and $15 million,
respectively.

Primary Market           September 30, 2007    September 30, 2006
Risk Category	  	        Value at Risk         Value at Risk

Interest Rate	(0.93)%	(1.38)%
Equity	                           (0.86)	(1.12)
Currency                  	(0.17)	(0.22)
Commodity           	(0.28)            	(0.18)
Aggregate Value at Risk 	(1.52)%        	(1.36)%


The VaR for a market category represents the one-day downside
risk for the aggregate exposures associated with this market
category.  The Aggregate Value at Risk listed above represents
the VaR of the Partnership?s open positions across all the market
categories, and is less than the sum of the VaRs for all such
market categories due to the diversification benefit across asset
classes.

Because the business of the Partnership is the speculative trading
of futures, forwards, and options, the composition of its trading
portfolio can change significantly over any given time period, or
even within a single trading day.  Such changes could positively
or negatively materially impact market risk as measured by VaR.

<page> The table below supplements the quarter-end VaR set forth
above by presenting the Partnership?s high, low, and average VaR,
as a percentage of total Net Assets for the four quarter-end
reporting periods from October 1, 2006, through September 30,
2007.

Primary Market Risk Category        High      Low      Average
Interest Rate	(0.93)%	(0.79)%	(0.87)%
Equity	(1.54)	(0.75)	(1.01)
Currency	(0.22)	(0.14)	(0.17)
Commodity	(0.41)	(0.17)	(0.27)
Aggregate Value at Risk	(1.83)%	(1.17)%	(1.48)%


Limitations on Value at Risk as an Assessment of Market Risk

VaR models permit estimation of a portfolio?s aggregate market
risk exposure, incorporating a range of varied market risks,
reflect risk reduction due to portfolio diversification or hedging
activities, and can cover a wide range of portfolio assets.
However, VaR risk measures should be viewed in light of the
methodology?s limitations, which include, but may not be limited
to the following:
*	past changes in market risk factors will not always result in
accurate predictions of the distributions and correlations of
future market movements;
*	changes in portfolio value caused by market movements may
differ from those of the VaR model;

<page>
*	VaR results reflect past market fluctuations applied to
current trading positions while future risk depends on future
positions;
*	VaR using a one-day time horizon does not fully capture the
market risk of positions that cannot be liquidated or hedged
within one day; and
*	the historical market risk factor data used for VaR
estimation may provide only limited insight into losses that
could be incurred under certain unusual market movements.

In addition, the VaR tables above, as well as the past performance
of the Partnership, give no indication of the Partnership?s
potential ?risk of ruin?.

The VaR tables provided present the results of the Partnership?s
VaR for each of the Partnership?s market risk exposures and on an
aggregate basis at September 30, 2006, and for the four quarter-
end reporting periods from October 1, 2006, through September 30,
2007.  VaR is not necessarily representative of the Partnership?s
historic risk, nor should it be used to predict the Partnership?s
future financial performance or its ability to manage or monitor
risk.  There can be no assurance that the Partnership?s actual
losses on a particular day will not exceed the VaR amounts
indicated above or that such losses will not occur more than once
in 100 trading days.
<page>
Non-Trading Risk
The Partnership has non-trading market risk on its foreign cash
balances.  These balances and any market risk they may represent
are immaterial.

The Partnership also maintains a substantial portion of its
available assets in cash at MS&Co.; as of September 30, 2007, such
amount is equal to approximately 95% of the Partnership?s net
asset value.  A decline in short-term interest rates would result
in a decline in the Partnership?s cash management income.  This
cash flow risk is not considered to be material.

Materiality, as used throughout this section, is based on an
assessment of reasonably possible market movements and any
associated potential losses, taking into account the leverage,
optionality, and multiplier features of the Partnership?s market-
sensitive instruments, in relation to the Partnership?s Net
Assets.

Qualitative Disclosures Regarding Primary Trading Risk Exposures
The following qualitative disclosures regarding the Partnership?s
market risk exposures ? except for (A) those disclosures that are
statements of historical fact and (B) the descriptions of how the
Partnership manages its primary market risk exposures ? constitute
forward-looking statements within the meaning of Section 27A of
<page> the Securities Act and Section 21E of the Securities
Exchange Act. The Partnership?s primary market risk exposures, as
well as the strategies used and to be used by Demeter and the
Trading Advisor for managing such exposures, are subject to
numerous uncertainties, contingencies and risks, any one of which
could cause the actual results of the Partnership?s risk controls
to differ materially from the objectives of such strategies.
Government interventions, defaults and expropriations, illiquid
markets, the emergence of dominant fundamental factors, political
upheavals, changes in historical price relationships, an influx of
new market participants, increased regulation, and many other
factors could result in material losses, as well as in material
changes to the risk exposures and the risk management strategies
of the Partnership.  Investors must be prepared to lose all or
substantially all of their investment in the Partnership.

The following were the primary trading risk exposures of the
Partnership at September 30, 2007, by market sector.  It may be
anticipated, however, that these market exposures will vary
materially over time.

Interest Rate.  The largest market exposure of the Partnership at
September 30, 2007, was to the global interest rate sector.
Exposure was primarily spread across the U.S., Japanese,
European, Australian, New Zealand, and Canadian interest rate
sectors.  Interest rate movements directly affect the price of
<page> the sovereign bond futures positions held by the
Partnership and indirectly affect the value of its stock index
and currency positions.  Interest rate movements in one country,
as well as relative interest rate movements between countries,
materially impact the Partnership?s profitability.  The
Partnership?s interest rate exposure is generally to interest
rate fluctuations in the U.S. and the other G-7 countries?
interest rates.  The G-7 countries consist of France, the U.S.,
Britain, Germany, Japan, Italy, and Canada.  However, the
Partnership also takes futures positions in the government debt
of smaller countries ? e.g., New Zealand and Australia.  Demeter
anticipates that the G-7 countries? interest rates, as well as
New Zealand and Australian interest rates, will remain the
primary interest rate exposures of the Partnership for the
foreseeable future.  The speculative futures positions held by
the Partnership range from short to long-term instruments.
Consequently, changes in short, medium, or long-term interest
rates may have an effect on the Partnership.

Equity.  The second largest market exposure of the Partnership at
September 30, 2007, was to the global stock index sector,
primarily to equity price risk in the G-7 countries.  The stock
index futures traded by the Partnership are by law limited to
futures on broadly-based indices.  At September 30, 2007, the
Partnership?s primary exposures were to the SPI 200 (Australia),
CAC 40 (France), FTSE 100 (United Kingdom), S&P 500 (U.S.),
<page> NASDAQ 100 (U.S.), DAX (Germany), NIKKEI 225 (Japan), and
RUSSELL 2000 (U.S.) stock indices.  The Partnership is primarily
exposed to the risk of adverse price trends or static markets in
the U.S., Japanese, and European stock indices.  Static markets
would not cause major market changes, but would make it difficult
for the Partnership to avoid trendless price movements, resulting
in numerous small losses.

Currency.  At September 30, 2007, the Partnership had exposure to
the currency sector.  Exposure was to exchange rate fluctuations,
primarily fluctuations which disrupt the historical pricing
relationships between different currencies and currency pairs.
Interest rate changes, as well as political and general economic
conditions influence these fluctuations.  The Partnership trades
a large number of currencies, including cross-rates - i.e.,
positions between two currencies other than the U.S. dollar.  At
September 30, 2007, the Partnership?s major exposures were to
euro, Norwegian krone, Australian dollar, New Zealand dollar, and
Swiss franc currency crosses, as well as outright U.S. dollar
positions.  Outright positions consist of the U.S. dollar vs.
other currencies.  These other currencies include major and minor
currencies.  Demeter does not anticipate that the risk associated
with the Partnership?s currency trades will change significantly
in the future.


<page>
Commodity.
Soft Commodities and Agriculturals.  The third largest
market exposure of the Partnership at September 30, 2007,
was to the markets that comprise these sectors.  Most of the
exposure was to the soybeans, soybean meal, lean hogs,
cotton, coffee, corn, live cattle, sugar, feeder cattle, and
orange juice markets.  Supply and demand inequalities,
severe weather disruptions, and market expectations affect
price movements in these markets.

Metals.  At September 30, 2007, the Partnership had market
exposure in the metals sector.  The Partnership?s metals
exposure was to fluctuations in the price of base metals,
such as copper.  Economic forces, supply and demand
inequalities, geopolitical factors, and market expectations
influence price movements in these markets.  The Trading
Advisor utilizes the trading system(s) to take positions when
market opportunities develop, and Demeter anticipates that
the Partnership will continue to do so.

Energy.  At September 30, 2007, the Partnership had market
exposure to the energy sector.  The Partnership?s energy
exposure was shared primarily by futures contracts in oil
related products.  Price movements in these markets result
from geopolitical developments, particularly in the Middle
<page> East, as well as weather patterns, and other economic
fundamentals.  Significant profits and losses, which have
been experienced in the past, are expected to continue to be
experienced in the future.


Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following was the only non-trading risk exposure of the
Partnership at September 30, 2007:

Foreign Currency Balances.  The Partnership?s primary
foreign currency balances at September 30, 2007, were in
euros, Japanese yen, British pounds, Australian dollars, New
Zealand dollars, South African rand, Canadian dollars, Swiss
francs, and Norwegian kroner.  The Partnership controls the
non-trading risk of foreign currency balances by regularly
converting them back into U.S. dollars upon liquidation of
their respective positions.

Qualitative Disclosures Regarding Means of Managing Risk Exposure
The Partnership and the Trading Advisor, separately, attempt to
manage the risk of the Partnership?s open positions in essentially
the same manner in all market categories traded.  Demeter attempts
to manage market exposure by diversifying the Partnership?s assets
among different market sectors and trading approaches, and by
monitoring the performance of the Trading Advisor daily.  In
<page> addition, the Trading Advisor establishes diversification
guidelines, often set in terms of the maximum margin to be
committed to positions in any one market sector or market-
sensitive instrument.

Demeter monitors and controls the risk of the Partnership?s non-
trading instruments, cash.  Cash is the only Partnership
investment directed by Demeter, rather than the Trading Advisor.

Item 4.  CONTROLS AND PROCEDURES
(a)	As of the end of the period covered by this quarterly report,
the President and Chief Financial Officer of Demeter, the
general partner of the Partnership, have evaluated the
effectiveness of the Partnership?s disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) of
the Exchange Act), and have judged such controls and
procedures to be effective.

(b)	There have been no material changes during the period
covered by this quarterly report in the Partnership?s
internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) of the Exchange Act) or in
other factors that could significantly affect these controls
subsequent to the date of their evaluation.


<page>
Item 4T.  CONTROLS AND PROCEDURES
Not applicable.
<page> PART II.  OTHER INFORMATION


Item 1A.  RISK FACTORS

Information regarding risk factors appears in Item 2.
?Management?s Discussion and Analysis of Financial Condition and
Results of Operations? and Item 3. ?Quantitative and Qualitative
Disclosures about Market Risk? of this Form 10-Q.  There have been
no other material changes from the risk factors previously
referenced in the Partnership?s Report on Form 10-K for the fiscal
year ended December 31, 2006, and the Partnership?s Report on Form
10Q for the quarters ended March 31, 2007, and June 30, 2007.


Item 6.  EXHIBITS

31.01	Certification of President of Demeter Management
Corporation, the general partner of the Partnership,
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
31.02	Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership, pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.
32.01	Certification of President of Demeter Management
Corporation, the general partner of the Partnership,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
32.02	Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.





<page>


SIGNATURE



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.




                      Morgan Stanley Principal Plus Fund L.P.
                      (Registrant)

                      By:   Demeter Management Corporation
                            (General Partner)

November 14, 2007     By:  /s/Lee Horwitz
                              Lee Horwitz
                              Chief Financial Officer




The General Partner which signed the above is the only party
authorized to act for the Registrant.  The Registrant has no
principal executive officer, principal financial officer,
controller, or principal accounting officer and has no Board of
Directors.
















DEAN WITTER PRINCIPAL PLUS FUND L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1578: