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 June 30, 2008 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)

Indicate by check mark whether the
registrant (1) has filed all reports
required to be filed by Section 13 or
 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

Yes    X       	No__________

Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company.  See the definitions of "large accelerated filer",
"accelerated filer" and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.

Large accelerated filer_______ 		Accelerated filer_______
Non-accelerated filer   X   		Smaller reporting company_______

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

	June 30, 2008

<caption>


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

				<c>
	Consolidated Statements of Financial Condition as of
	June 30, 2008 (Unaudited) and December 31, 2007...............2

	Consolidated Statements of Operations for the Three and Six
	Months Ended June 30, 2008 and 2007 (Unaudited)...............3

	Consolidated Statements of Changes in Partners? Capital for
the Six Months Ended June 30, 2008 and 2007 (Unaudited) ......4

	Consolidated Statements of Cash Flows for the Six Months
	Ended June 30, 2008 and 2007 (Unaudited)......................5

	Condensed Consolidated Schedules of Investments as of
	June 30, 2008 (Unaudited) and December 31, 2007...............6

	Notes to Consolidated Financial Statements (Unaudited).....7-15

Item 2.	Management?s Discussion and Analysis of
			Financial Condition and Results of Operations........16-28

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

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

Item 4T.	Controls and Procedures.................................43


PART II. OTHER INFORMATION

Item 1A.Risk Factors............................................44

Item 5.	Other Information....................................44-45

Item 6.	Exhibits................................................46

</table>


<page> <table> PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

117:    MORGAN STANLEY PRINCIPAL PLUS FUND L.P.
	CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<caption>
	                       June 30,	     December 31,
                            2008      	    2007
	                      $	    $
	                        (Unaudited)
ASSETS

	<c>	<c>
Trading Equity:
	Unrestricted cash	8,061,431	10,672,528
    Restricted cash					                            383,780	       794,923

	     Total cash	    8,445,211	   11,467,451

	Net unrealized gain on open contracts (MS&Co.)	158,612	175,590
	Net unrealized gain (loss) on open contracts (MSIP)	        45,764	         (1,445)

	     Total net unrealized gain on open contracts	       204,376	       174,145

	     Total Trading Equity	8,649,587	11,641,596

Interest receivable (MS&Co.)	          12,690	        27,058

	     Total Assets	     8,662,277	  11,668,654

LIABILITIES AND PARTNERS? CAPITAL

Liabilities

Redemptions payable	118,580	135,954
Accrued administrative expenses	109,409	108,641
Accrued brokerage fees (MS&Co.)	28,510	38,533
Accrued management fees  	           7,127	          9,633

	     Total Liabilities             263,626		      292,761

Minority Interest	        (11,827)	              294

Partners? Capital

Limited Partners (4,823.322 and
    5,967.302 Units, respectively)	8,226,232	11,173,321
General Partner (108.030 Units)	       184,246	        202,278

	     Total Partners? Capital	    8,410,478  	   11,375,599

	     Total Liabilities and Partners? Capital	    8,662,277	   11,668,654


NET ASSET VALUE PER UNIT 	       1,705.51	       1,872.42

<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 Six Months
  	                        Ended June 30,                           Ended June 30,

                                            2008  	              2007   	        2008  	    2007
                                            $	                  $	            $		$

	<c>	<c>		<c>	<c>
INVESTMENT INCOME
	Interest income (MS&Co.)	       34,659		    142,540	     90,182		          298,461

EXPENSES
	Brokerage fees (MS&Co.)	94,182	131,253	205,315	267,198
	Administrative expenses	      29,000	      35,000	      58,000	      64,000
	Management fees	23,545	32,813   	    51,328	66,799
	Transaction fees and costs	       17,880	      11,680	     30,008	      24,240

		   Total Expenses 	    164,607	    210,746	    344,651	    422,237

NET INVESTMENT LOSS 	    (129,948)	     (68,206)	   (254,469)	   (123,776)

TRADING RESULTS
Trading profit (loss):
	Realized	(523,239)	411,375	(718,271)	61,696
	Net change in unrealized	      (36,650)	      75,421	      30,231   	     160,733

		   Total Trading Results	    (559,889)	    486,796	   (688,040) 	     222,429

NET INCOME (LOSS) BEFORE
 MINORITY INTEREST	(689,837)	418,590	(942,509)	98,653

Less: Minority Interest	      (8,958)	         4,625        	    (12,121)	        1,101

NET INCOME (LOSS)	   (680,879)	    413,965	      (930,388)	      97,552

NET INCOME (LOSS) ALLOCATION

	Limited Partners	(667,454)	407,494	(912,356)  	95,861
	General Partner 	(13,425)	6,471	     (18,032)	       1,691


NET INCOME (LOSS) PER UNIT

	Limited Partners           (124.27)	        59.90                (166.91)	15.65
	General Partner             (124.27)	        59.90                (166.91)	 15.65


			                       Units               Units	 Units	         Units
WEIGHTED AVERAGE NUMBER
	OF UNITS OUTSTANDING                                   5,289.309		    6,746.718	    5,577.225	    	6,934.160

<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 Six Months Ended June 30, 2008 and 2007
	(Unaudited)

<caption>



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

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

Net Income                   	?		95,861	1,691	97,552

Redemptions	      (744.243)	 (1,415,799)                 ?      	  (1,415,799)

Partners? Capital,
	June 30, 2007  	          6,588.892	  12,478,926	  208,012	 12,686,938





Partners? Capital,
	December 31, 2007	   6,075.332	11,173,321	          202,278	              11,375,599

Net Loss                   	?		(912,356)	(18,032)	(930,388)

Redemptions	  (1,143.980)	 (2,034,733)                 ?      	  (2,034,733)

Partners? Capital,
	June 30, 2008  	          4,931.352	  8,226,232	  184,246	 8,410,478







<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 Six Months  Ended June 30,

	      2008     	      2007
	      $	      $


CASH FLOWS FROM OPERATING ACTIVITIES

			<c>	<c>
Net income (loss)	(930,388)	97,552
Noncash item included in net income (loss):
	Net change in unrealized	(30,231)	(160,733)

(Increase) decrease in operating assets:
	Restricted cash	411,143	(147,801)
	Interest receivable (MS&Co.)	14,368	11,367

Increase (decrease) in operating liabilities:
	Accrued administrative expenses	768	2,654
	Accrued brokerage fees (MS&Co.)	(10,023)	(4,382)
	Accrued management fees	        (2,506)	            (1,096)

Net cash used for operating activities	    (546,869)	        (202,439)


CASH FLOWS FROM FINANCING ACTIVITIES

Cash paid for redemptions of Units	(2,052,107)	(1,407,824)
Increase (decrease) in minority interest	      (12,121)	            1,101

Net cash used for financing activities	   (2,064,228)	    (1,406,723)

Net decrease in unrestricted cash	(2,611,097)	(1,609,162)

Unrestricted cash at beginning of period	   10,672,528	    13,545,110

Unrestricted cash at end of period	    8,061,431	    11,935,948





<fn>




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



<page> <table> MORGAN STANLEY PRINCIPAL PLUS FUND L.P.
CONDENSED CONSOLIDATED SCHEDULES OF INVESTMENTS
June 30, 2008 (Unaudited) and December 31, 2007
<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)

$
%
$
%
$

 June 30, 2008, Partnership Net Assets:  $8,410,478





<c>
<c>
<c>
<c>
<c>
Commodity
     69,946
        0.83
     67,546
       0.80
   137,492
Equity
   (8,708)
       (0.10)
       8,065
       0.10
        (643)
Foreign currency
    30,283
      0.36
          ?
          ?
     30,283
Interest rate
      9,976
        0.12
      (3,037)
      (0.04)
       6,939






     Grand Total:
  101,497
        1.21
     72,574
       0.86
   174,071

     Unrealized Currency Gain





     30,305

     Total Net Unrealized Gain



    204,376


 December 31, 2007, Partnership Net Assets: $11,375,599









Commodity
     36,831
        0.32
      (2,953)
      (0.03)
     33,878
Equity
   77,062
        0.68
      (8,416)
      (0.07)
     68,646
Foreign currency
     ?
     ?
       4,126
       0.04
       4,126
Interest rate
     41,660
        0.36
      (7,908)
      (0.07)
     33,752






     Grand Total:
   155,553
        1.36
    (15,151)
      (0.13)
   140,402

     Unrealized Currency Gain





     33,743

     Total Net Unrealized Gain



    174,145

<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

June 30, 2008

(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, 2007, 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").  The commodity brokers are Morgan Stanley
& Co. Incorporated ("MS&Co.") and Morgan Stanley & Co.
International plc ("MSIP").  MS&Co. also acts as the counterparty
on all trading of foreign currency forward contracts.  MSIP serves
as the commodity broker for trades on the London Metal Exchange.

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


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 bill discount rate during such month.  The Trading
Company pays brokerage fees to MS&Co.

3.  Income Taxes
No provision for income taxes has been made in the accompanying
financial statements, as partners are individually responsible
for reporting income or loss based upon their respective share of
the Partnership?s revenues or expenses for income tax purposes.
The Partnership files U.S. federal and state tax returns.  The
2004 through 2007 tax years generally remain subject to
examination by U.S. federal and most state tax authorities.
<page> MORGAN STANLEY PRINCIPAL PLUS FUND L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)



4.  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
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.

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

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:

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 "Trading Equity" on the Consolidated Statements of
Financial Condition, and their longest contract maturities were as
follows:





<page> <table> MORGAN STANLEY PRINCIPAL PLUS FUND L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
<caption>
	Net Unrealized Gains
	on Open Contracts	Longest Maturities
		Off-			Off-
	Exchange-	Exchange-		Exchange-	Exchange-
Date	 Traded 	 Traded 	Total	 Traded 	 Traded
	  $	   $	  $

	<c>	  <c>	<c>	<c>           <c>
Jun. 30, 2008	204,376            -		204,376	    Dec. 2008       -
Dec. 31, 2007	174,145	-  	174,145    	Jun. 2008       -
</table>
The Partnership has credit risk associated with counterparty non-
performance.  As of the date of the consolidated financial
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 acting as a commodity broker 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"),

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

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 $8,649,587 and $11,641,596 at June 30, 2008, and December
31, 2007, 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

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



decrease the Partnership?s credit risk in the event of MS&Co.?s
bankruptcy or insolvency.




5.  New Accounting Developments

In September 2006, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards No.
157 ("SFAS 157"), "Fair Value Measurements".  SFAS 157 requires
use of a fair value hierarchy that prioritizes the inputs to
valuation techniques used to measure fair value into three
levels: Level 1 - quoted market prices in active markets for
identical assets and liabilities; Level 2 - inputs other than
quoted market prices that are observable for the asset or
liability, either directly or indirectly (including quoted prices
for similar investments, interest rates, credit risk); and Level
3 - unobservable inputs for the asset or liability (including the
Partnership?s own assumptions used in determining the fair value
of investments).

Demeter evaluated the impact of adopting SFAS 157 on the
Partnership?s financial statements.  The Partnership adopted SFAS
157 as of January 1, 2008.  Based on its analysis, the effect of
applying SFAS 157 to the investments included in the financial
statements does not have a material impact on the Partnership?s
financial statements.
<page> <table> MORGAN STANLEY PRINCIPAL PLUS FUND L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The following table summarizes the Valuation of the Partnership?s
investments by the above SFAS 157 fair value hierarchy as of June
30, 2008:    <caption>



Assets
Quoted Prices in
Active Markets for
  Identical Assets
        (Level 1)
Significant Other
   Observable
      Inputs
     (Level 2)
Significant
  Unobservable
   Inputs
 (Level 3)




      Total


<c>
<c>
 <c>

<c>	<c>
Unrealized gain on open contracts
       $ 204,376
      n/a
 n/a

$$   	       $   204,376
 </table>
In March 2008, the FASB issued SFAS No. 161, Disclosures about
Derivative Instruments and Hedging Activities ("SFAS 161").  SFAS
161 is intended to improve financial reporting about derivative
instruments and hedging activities by requiring enhanced
disclosures to enable investors to better understand how those
instruments and activities are accounted for; how and why they are
used; and their effects on a Partnership?s financial position,
financial performance, and cash flows.  SFAS 161 is effective for
financial statements issued for fiscal years beginning after
November 15, 2008, and interim periods within those fiscal years.
The Partnership is currently evaluating the impact that the
adoption of SFAS No. 161 will have on its financial statement
disclosures.

6.  Restricted and Unrestricted Cash
As reflected on the Partnership?s Consolidated Statements of
Financial Condition, restricted cash equals the cash portion of

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


assets on deposit to meet margin requirements plus the cash
required to offset unrealized losses on foreign currency forwards
and options and offset losses on offset London Metal Exchange
positions.  All of these amounts are maintained separately.  Cash
that is not classified as restricted cash is therefore classified
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 six month periods ended June 30, 2008
and 2007, 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 behalf of
<page> 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 15 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 gain (loss)" for open (unrealized) contracts,
and recorded as "Realized trading gain (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.

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

For the Three and Six Months Ended June 30, 2008
The Partnership recorded total trading results including interest
income totaling $(525,230), expenses totaling $164,607, and
minority interest of $(8,958), resulting in a net loss of
$680,879 for the three months ended June 30, 2008.  The
Partnership?s net asset value per Unit decreased from $1,829.78
at March 31, 2008, to $1,705.51 at June 30, 2008.

The most significant trading losses of approximately 5.6% were
recorded within the global interest rate sector, primarily during
April, from long positions in U.S., European, and Pacific Rim
fixed-income futures as prices declined amid speculation that the
U.S. Federal Reserve, European Central Bank, and Bank of Japan
might not reduce borrowing costs as much as previously expected
in 2008 due to accelerating global inflation. During May,
additional losses were recorded from long positions in U.S.,
European, and Australian fixed-income futures as prices fell
after a government report showed the U.S. economy grew faster
during the first quarter than previously stated. Also, prices
fell further on news of accelerating inflation and better-than-
expected growth in the Euro-Zone. Further losses of approximately
2.6% were experienced in the global stock index sector during
June from long positions in European, U.S., and Australian equity
<page> index futures as prices moved sharply lower throughout the
month on concerns that surging commodity prices and additional
subprime-related writedowns would erode corporate earnings and
continue to slow global economic growth.  In addition, prices of
European stock index futures were pressured lower after
government reports revealed an unexpected drop in Germany?s
consumer confidence and a continued housing slump in the United
Kingdom.  Within the currency markets, losses of approximately
0.7% were experienced primarily during April from short positions
in the British pound versus the Swiss franc and U.S. dollar
recorded losses as the value of the British pound increased
relative to these currencies amid speculation that the Bank of
England might slow the pace of interest rate cuts amid concerns
of accelerating global inflation. Meanwhile, long positions in
the euro versus the Australian dollar and Norwegian krone also
experienced losses during April as the value of the euro fell
after the Ifo Institute reported a much weaker-than-expected
German business sentiment reading. A portion of the Partnership?s
losses in the second quarter was offset by gains of approximately
3.0% achieved in the energy markets from long futures positions
in crude oil and its related products as prices moved sharply
higher due to a drop in OPEC output, supply threats in Nigeria
and Iraq, growing Asian fuel consumption, and an unexpected
decline in domestic inventories.

<page> The Partnership recorded total trading results including
interest income totaling $(597,858), expenses totaling $344,651,
and minority interest of $(12,121), resulting in a net loss of
$930,388 for the six months ended June 30, 2008.  The
Partnership?s net asset value per Unit decreased from $1,872.42
at December 31, 2007, to $1,705.51 at June 30, 2008.

The most significant trading losses of approximately 6.4% were
recorded in the global stock index sector throughout the first
quarter from long positions in European and U.S. equity index
futures as prices moved lower on concerns that a persistent U.S.
housing slump, mounting losses linked to U.S. subprime mortgage
investments, and a weakening job market would restrain consumer
spending and curb global economic growth. During June, additional
losses were incurred from long positions in European, U.S., and
Australian equity index futures as prices continued to move lower
on concerns that record commodity prices and additional subprime-
related writedowns would erode corporate earnings and continue to
slow global economic growth. Within the global interest rate
sector, losses of approximately 4.5% were recorded, primarily
during February, April, and May, from long positions in U.S.,
European, and Pacific Rim fixed-income futures as prices declined
amid speculation that the U.S. Federal Reserve, European Central
Bank, and Bank of Japan might not reduce borrowing costs as much
as previously expected in 2008 due to accelerating global
inflation. Additional losses of approximately 1.1% were incurred
<page> in the currency sector, primarily during February and
April, from short positions in the British pound versus the Swiss
franc, U.S. dollar, and euro as the value of the British pound
strengthened against these currencies amid increased demand for
the higher-yielding currency and speculation that the Bank of
England might slow the pace of interest rate cuts amid concerns
of accelerating global inflation. Elsewhere in the currency
sector, long positions in the euro versus the Norwegian krone,
Australian dollar, and British pound resulted in losses as the
value of the euro declined against these currencies during
February and April after reports showed the Euro-Zone?s Gross
Domestic Product slowed more-than-expected in the fourth quarter
of 2007 and the Ifo Institute reported a much weaker-than-
expected German business sentiment reading. Smaller losses of
approximately 0.1% were recorded within the metals markets,
primarily during March, from long positions in zinc and copper
futures as prices decreased amid speculation that a slumping U.S.
economy might lead to a decline in global demand for base metals.
A portion of the Partnership?s losses during the first half of
the year was offset by gains of approximately 2.9% experienced in
the energy sector, primarily during the second quarter, from long
futures positions in crude oil and its related products as prices
moved sharply higher due to a drop in OPEC output, supply threats
in Nigeria and Iraq, growing Asian fuel consumption, and an
unexpected decline in domestic inventories. Additional gains of
2.2% were achieved in the agricultural complex from long futures
<page> positions in corn and the soybean complex as prices rose
during January and February following news that global production
might drop amid higher demand for alternative biofuels and
speculation that demand from China might climb after severe
winter storms damaged some of the nation?s major crops. During
June, prices continued to increase on supply concerns after
severe floods in the U.S. Midwest also damaged crops. Elsewhere
in the agricultural complex, gains were experienced during
January and March from short positions in live cattle futures as
prices declined amid speculative selling. Finally, gains were
achieved throughout the first quarter from long futures positions
in sugar as prices increased amid speculation that future demand
might strengthen.


For the Three and Six Months Ended June 30, 2007
The Partnership recorded total trading results including interest
income totaling $629,336, expenses totaling $210,746, and
minority interest of $4,625, resulting in net income of $413,965
for the three months ended June 30, 2007.  The Partnership?s net
asset value per Unit increased from $1,865.60 at March 31, 2007,
to $1,925.50 at June 30, 2007.

The most significant trading gains of approximately 1.9% were
recorded in the global interest rate sector primarily during May
and June from short positions in European fixed-income futures as
prices moved lower amid continued optimism about the European
<page> economy.  Additionally, European interest rate futures
prices were pressured lower on news that Germany's unemployment
rate held at a six-year low, French unemployment dropped to the
lowest level in 24 years, and housing prices in the United
Kingdom showed their biggest jump of 2007.  Elsewhere in the
interest rate futures markets, gains were recorded from short
positions in Japanese government bond futures during June as
prices moved lower on weaker demand for Japanese yen-denominated
assets.  Further gains of approximately 1.3% were experienced in
the global stock index sector during April and May from long
positions in U.S. and German equity index futures as prices moved
higher on continued strong corporate earnings and increased
merger and acquisition activity.  In addition, prices were
pressured higher amid strong U.S. retail sales data as well as
rising consumer sentiment in the Euro-Zone.  Within the metals
markets, gains of approximately 0.5% were experienced primarily
during April from long positions in nickel and copper futures as
prices increased after the International Monetary Fund's strong
global growth forecasts bolstered sentiment that demand for base
metals might increase in 2007.  Additional gains were recorded
from newly established short positions in nickel futures during
June as prices reversed lower on news that China might cut
stainless steel output.  Elsewhere in the metals complex, short
positions in silver futures resulted in gains during June as
prices fell amid speculative selling.  Smaller gains of
approximately 0.1% were recorded in the energy markets primarily
<page> during April from long futures positions in gasoline as
prices moved higher amid concerns of supply shortages going into
the U.S. summer driving season.  A portion of the Partnership?s
gains in the second quarter was offset by losses of approximately
0.1% experienced in the agricultural markets during May from both
short and long futures positions in lean hogs, feeder cattle, and
live cattle as prices moved without consistent direction.
Elsewhere in the agricultural complex, short positions in corn
futures resulted in additional losses during May as prices moved
higher amid lower production and increased demand for alternative
fuel sources.

The Partnership recorded total trading results including interest
income totaling $520,890, expenses totaling $422,237, and
minority interest of $ 1,101, resulting in net income of $97,552
for the six months ended June 30, 2007.  The Partnership?s net
asset value per Unit increased from $1,909.85 at December 31,
2006, to $1,925.50 at June 30, 2007.

The most significant trading gains of approximately 1.1% were
recorded in the global interest rate sector throughout a
majority of the year from short positions in European fixed-
income futures as prices trended lower amid consistently strong
consumer sentiment and unemployment data out of Germany, France,
and the United Kingdom.  Elsewhere in the interest rate futures
markets, gains were recorded from short positions in Japanese
<page> government bonds primarily during June as prices moved
lower on weaker demand for Japanese yen-denominated assets.
Additional gains of approximately 1.0% were experienced in the
metals markets during February, March, and April from long
positions in nickel and copper futures as prices moved higher on
continued speculation that low stockpiles might 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 might increase in 2007.  Further gains
were recorded from newly established short positions in nickel
futures as prices reversed lower during June on news that China
might cut stainless steel output.  Elsewhere in the metals
complex, short positions in silver futures resulted in gains
during March and June as prices fell amid speculative selling.
Smaller gains of approximately 0.3% were recorded in the energy
markets during March and April from long futures positions in
gasoline and Brent crude oil as prices increased amid concerns
of rising geopolitical tension in the Middle East and supply
shortages going into the U.S. summer driving season.  A portion
of the Partnership?s gains in the first six months of the year
was offset by losses of approximately 0.4% 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
<page> selling.  Further losses were incurred from newly
established short positions in corn futures as prices reversed
higher in May amid lower production and increased demand for
alternative fuel sources.  Additional losses of approximately
0.3% were incurred in the currency sector from long positions in
the Mexican peso versus the U.S. dollar during January,
February, and June as the value of the Mexican peso weakened
leading up to and after the Bank of Mexico?s decision to hold
its benchmark rate at 7.25%.  Elsewhere, long positions in the
euro versus the Norwegian krone resulted in losses during
January and May.  Lastly, losses were recorded from both short
and long positions in the South African rand versus the U.S.
dollar as the value of the South African rand moved without
consistent direction throughout a majority of the year.  Smaller
losses of approximately 0.1% were recorded in the global stock
index sector primarily during February and March from long
positions in European equity index futures as prices declined in
a continuation of the sudden and sharp downward move that began
in late February with a 10% drop in the Shanghai stock market.
During June, long positions in European stock index futures
resulted in further losses within the global stock index futures
markets as prices fell amid speculation that there might be a
correction in real estate prices in Europe, while long positions
in Australian equity index futures moved lower due to weakness
in the metals markets.



<page>
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.

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
<page> 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
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"
<page> 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
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 <page>
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
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.
<page>
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 June 30, 2008 and 2007. At June
30, 2008 and 2007, the Partnership?s total capitalization was
approximately $8 million and $13 million, respectively.

Primary Market              June 30, 2008         June 30, 2007
Risk Category	  	        Value at Risk         Value at Risk

Interest Rate	          (0.43)%	(0.87)%
Currency	   (0.15)              	(0.17)
Equity                 	     (0.06)       	(1.54)
Commodity           	(1.12)            	(0.41)
Aggregate Value at Risk 	(1.10)%        	(1.83)%


The VaR for a market category represents the one-day downside
risk for the aggregate exposures associated with this market
<page> 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.

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 July 1, 2007, through June 30, 2008.

Primary Market Risk Category        High      Low      Average
Interest Rate	(1.22)%	(0.43)%	(0.82)%
Currency	(0.17)	(0.09)	(0.13)
Equity	(0.94)	(0.06)	(0.62)
Commodity	(1.12)	(0.28)	(0.53)
Aggregate Value at Risk	(1.52)%	(1.10)%	(1.32)%


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,
<page> 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;
*	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
<page> aggregate basis at June 30, 2008 and 2007, and for the four
quarter-end reporting periods from July 1, 2007, through June 30,
2008.  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.

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 June 30, 2008, such
amount was equal to approximately 96% 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-
<page> 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
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.

<page> The following were the primary trading risk exposures of
the Partnership at June 30, 2008, by market sector.  It may be
anticipated, however, that these market exposures will vary
materially over time.

Interest Rate.  The third largest market exposure of the
Partnership at June 30, 2008, was to the global interest rate
sector.  Exposure was primarily spread across the U.S., European,
Japanese, Australian, New Zealand, and Canadian interest rate
sectors.  Interest rate movements directly affect the price of
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., the United Kingdom,
Germany, Japan, Italy, and Canada.  However, the Partnership also
takes futures positions in the government debt of smaller
countries ? e.g., Australia and New Zealand.  Demeter anticipates
that the G-7 countries? interest rates, as well as the Australian
and New Zealand 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
<page> short, medium, or long-term interest rates may have an
effect on the Partnership.

Currency.  At June 30, 2008, the Partnership had market 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 June 30, 2008, the Partnership?s major exposures were
to Australian dollar, New Zealand dollar, British pound, Japanese
yen, euro, and Norwegian krone currency crosses, as well as to
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.

Equity.  At June 30, 2008, the Partnership had market exposure 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 June 30, 2008, the Partnership?s primary exposures
were to the FTSE 100 (United Kingdom), DAX (Germany), SPI 200
<page> (Australia), S&P 500 (U.S.), EURO STOX 50 (Europe), NIKKEI
225 (Japan), and NASDAQ 100 (U.S.) stock indices.  The
Partnership is primarily exposed to the risk of adverse price
trends or static markets in the U.S., Japanese, European, and
Australian 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.

Commodity.
Soft Commodities and Agriculturals.  The largest market
exposure of the Partnership at June 30, 2008, was to the
markets that comprise these sectors.  Most of the exposure
was to the soybean meal, soybeans, coffee, corn, lean hogs,
live cattle, rapeseed, cotton, wheat, soybean oil, sugar,
and feeder cattle markets.  Supply and demand inequalities,
severe weather disruptions, and market expectations affect
price movements in these markets.

Energy.  The second largest market exposure of the
Partnership at June 30, 2008, was 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 East, as well as weather
patterns, and other economic fundamentals.  Significant
<page> profits and losses, which have been experienced in
the past, are expected to continue to be experienced in the
future.

Metals.  At June 30, 2008, the Partnership had market
exposure to the metals sector.  The Partnership?s metals
exposure was to fluctuations in the price of base metals,
such as nickel, zinc, aluminum, lead, and copper, as well as
precious metals, such as silver. 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 Trading Advisor will continue to do so.

Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following was the only non-trading risk exposure of the
Partnership at June 30, 2008:

Foreign Currency Balances.  The Partnership?s primary
foreign currency balances at June 30, 2008, were in euros,
British pounds, Australian dollars, Norwegian kroner,
Japanese yen, Hong Kong dollars, Canadian dollars, Swiss
francs, and New Zealand dollars.  The Partnership controls
the non-trading risk of foreign currency balances by <page>
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
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 instrument, cash.  Cash is the only Partnership investment
directed by Demeter, rather than the Trading Advisor.

Item 4.  CONTROLS AND PROCEDURES
	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.
<page>
Changes in Internal Control over Financial Reporting
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.

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, 2007, and the Partnership?s Report on Form
10Q for the quarter ended March 31, 2008.


Item 5.  OTHER INFORMATION
Limited Partners of the Partnership are advised that Demeter has
determined to withdraw from the Partnership effective November 30,
2008, and thereafter will commence dissolution of the Partnership
pursuant to the Partnership?s Limited Partnership Agreement.  In
connection with such withdrawal, Demeter will terminate trading
for the Partnership effective October 31, 2008, unless it becomes
necessary or is prudent to do so beforehand.  Following
termination of trading for the Partnership, all Partnership assets
will be paid interest at the rate equal to the average yield on 4-
week U.S. Treasury Bills, with your share of interest credited to
your Units.  The management and brokerage fees on any assets
remaining in the Partnership after October 31, 2008, will be
waived, given the absence of any further futures trading by the
Partnership.
<page> Through November 30, 2008, qualified Limited Partners may,
under certain conditions, redeem some or all of their interest in
the Partnership and use the proceeds of such redemption to
purchase an interest in another Morgan Stanley managed futures
partnership for which Demeter is the general partner (an offering
in any such managed futures partnership is by prospectus or
offering memorandum only).  Otherwise, Limited Partners may simply
redeem their interest in the Partnership and receive the proceeds
of such redemption in cash.  Whether you exchange or redeem your
Partnership Units, there will be no minimum holding period
requirement or redemption charge.  Limited Partners who do not
redeem their interest in the Partnership prior to November 30,
2008, should be aware that final distribution of any remaining
Partnership assets is anticipated to be made on or about December
15, 2008.

Mr. Michael Durbin became listed as a principal of Demeter by the
National Futures Association on June 5, 2008.

Mr. Jose Morales became listed as a principal of Demeter by the
National Futures Association on June 23, 2008.










<page>
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)

August 13, 2008       By:  /s/Christian Angstadt
                              Christian Angstadt
                              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
6
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