UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-K

                  Annual Report Pursuant to Section 13 or 15(d)

                     of the Securities Exchange Act of 1934

                      For the year ended December 31, 2000

Commission File Number 0-22489

             SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P. II
(Exact name of registrant as specified in its charter)


            New York                                 13-3862967
 (State or other jurisdiction of                  (I.R.S. Employer
  incorporation or organization)                Identification No.)

                     c/o Smith Barney Futures Management LLC
                           388 Greenwich St. - 7th Fl.
                            New York, New York 10013
              (Address and Zip Code of principal executive offices)

                                 (212) 723-5424
              (Registrant's telephone number, including area code)
        Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Units
                                                            of Limited
                                                            Partnership
                                                            Interest
                                                            (Title of Class)

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

                                                        Yes   X    No

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
form 10-K [X]

As of February 28, 2001,  Limited  Partnership  Units with an aggregate value of
$16,717,233 were outstanding and held by non-affiliates.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None




<PAGE>


                                     PART I

Item 1. Business.

     (a) General  development of business.  Smith Barney  Principal Plus Futures
Fund L.P. II (the "Partnership") is a limited partnership  organized on November
16, 1995 under the  partnership  laws of the State of New York. The  Partnership
engages in speculative  trading of commodity  interests,  including contracts on
foreign currencies,  commodity options and commodity futures contracts including
futures  contracts on United States  Treasury and other  financial  instruments,
foreign currencies and stock indices. The Partnership maintains a portion of its
assets  in  principal  amounts  stripped  from  U.S.  Treasury  Bonds  under the
Treasury's  STRIPS program ("Zero  Coupons") which payments will be due November
15, 2003. The  Partnership  uses the Zero Coupons and its other assets to margin
its commodities account.
     A total of 60,000 Units of Limited Partnership  Interest in the Partnership
(the  "Units")  were offered to the public.  Between April 3, 1996 and August 8,
1996,  19,897 Units were sold to the public at $1,000 per Unit.  Proceeds of the
offering along with the General Partners'  contribution of $203,000 were held in
escrow  until  August 9, 1996 at which time an  aggregate  of  $20,100,000  were
turned over to the Partnership and the Partnership commenced trading operations.
     Smith  Barney  Futures  Management  LLC acts as the  general  partner  (the
"General  Partner") of the Partnership.  The  Partnership's  commodity broker is
Salomon Smith Barney Inc.  ("SSB").  SSB is an affiliate of the General Partner.
The  General  Partner is wholly  owned by Salomon  Smith  Barney  Holdings  Inc.

                                       2

<PAGE>

("SSBHI"), which is the sole owner of SSB. SSBHI is a wholly owned subsidiary of
Citigroup Inc.

         The Partnership's  trading of futures,  forwards and options contracts,
if  applicable,  on  commodities is done on United States of America and foreign
commodity  exchanges.  It engages in such trading through a commodity  brokerage
account maintained with SSB.
         Under  the  Limited  Partnership  Agreement  of  the  Partnership  (the
"Limited Partnership  Agreement"),  the General Partner administers the business
and affairs of the Partnership.  As of December 31, 2000, all commodity  trading
decisions are made for the Partnership by Winton Capital  Management  ("Winton")
and   Willowbridge   Associates   Inc.   ("Willowbridge")   (collectively,   the
"Advisors").  Neither of the Advisors is affiliated  with the General Partner or
SSB. The Advisors are not responsible  for the  organization or operation of the
Partnership.  Effective  July  1,  2000,  John  W.  Henry &  Company,  Inc.  was
terminated as an Advisor to the  Partnership  and Winton was added as an Advisor
on that date.
         Pursuant to the terms of the  Management  Agreements  (the  "Management
Agreements"),  the  Partnership  is  obligated  to pay  Willowbridge  a  monthly
management  fee  equal  to 1/6 of 1% (2%  per  year)  of  month-end  Net  Assets
allocated to it and pay Winton a monthly management fee equal to 1/8 of 1% (1.5%
per year) of the month-end Net Assets allocated to it. The Partnership will also
pay each Advisor an incentive fee payable  quarterly equal to 20% of New Trading


                                       3

<PAGE>

Profits  earned  by it  for  the  Partnership  (as  defined  in  the  Management
Agreements).
         The Customer  Agreement  provides that the  Partnership  will pay SSB a
monthly  brokerage fee equal to 7/12 of 1% of month-end Net Assets  allocated to
the  Advisors  (7% per  year) in lieu of  brokerage  commissions  on a per trade
basis. SSB pays a portion of its brokerage fees to its financial consultants who
have sold Units and who are registered as associated  persons with the Commodity
Futures  Trading  Commission  (the "CFTC").  The  Partnership  pays for National
Futures  Association  ("NFA") fees, exchange and clearing fees, give-up and user
fees and floor brokerage  fees.  Brokerage fees will be paid for the life of the
Partnership,  although the rate at which such fees are paid may be changed.  The
Customer  Agreement  between the  Partnership  and SSB gives the Partnership the
legal right to net unrealized gains and losses.
         In addition,  SSB pays the  Partnership  interest on 80% of the average
daily  equity  maintained  in cash in its account  during each month at a 30-day
U.S.  Treasury  bill  rate  determined  weekly  by  SSB  based  on  the  average
non-competitive  yield on 3-month U.S.  Treasury  bills maturing in 30 days from
the date on which such weekly rate is determined.
         In the unlikely event that the Partnership is required to meet a margin
call  in  excess  of the  cash  balance  in its  trading  accounts,  SSBHI  will
contribute up to an amount equal to the maturity  value of the Zero Coupons held
by the Partnership at the time of such call to the capital of the Partnership to


                                       4

<PAGE>

permit it to meet its  margin  obligations  in excess of its cash  balance.  The
guarantee can only be invoked once. After the guarantee is invoked, trading will
cease and the  General  Partner  will  either wait until the end of the month in
which the Zero Coupons come due (November 2003),  (the "First Payment Date"), or
will  distribute  cash and Zero  Coupons to the  limited  partners.  The General
Partner  will provide a copy of SSBHI's  annual  report as filed with the SEC to
any limited partner requesting it.
         (b) Financial  information about industry  segments.  The Partnership's
business  consists  of  only  one  segment,  speculative  trading  of  commodity
interests.  The Partnership  does not engage in sales of goods or services.  The
Partnership's  net income from operations for the years ended December 31, 2000,
1999 and 1998 is set forth under "Item 6. Selected  Financial Data." Partnership
capital as of December 31, 2000 was $16,573,979.
         (c)  Narrative  description  of business.
              See Paragraphs (a) and (b)  above.
              (i)  through  (x)  -  Not  applicable.
              (xi)  through  (xii)  - Not applicable.
              (xiii) - The Partnership has no employees.
         (d)  Financial  Information  About  Geographic Areas. The  Partnership
does not  engage in sales of goods or  services  or own any long  lived  assets,
and therefore this item is not applicable.

                                       5
<PAGE>


Item 2.Properties.
       The Partnership does not own or lease any properties. The General Partner
operates out of facilities provided by its affiliate, SSB.
Item 3.Legal Proceedings.
       Salomon  Smith  Barney Inc,  ("SSB") is  a New York  corporation with its
 principal place of business at 388 Greenwich St., New York, New York 10013. SSB
 is registered as a broker-dealer and futures commission  merchant ("FCM"),  and
 provides futures  brokerage and clearing  services for institutional and retail
 participants  in the  futures  markets.  SSB and its  affiliates  also  provide
 investment banking and other financial services for clients worldwide.
          There have been no administrative,  civil or criminal actions pending,
 on appeal or concluded  against SSB or any of its individual  principals within
 the past five  years that  management  believes  may have a material  impact on
 SSB's ability to act as an FCM. In the ordinary course of its business,  SSB is
 a party to various claims and regulatory  inquiries.  Proceedings  deemed to be
 material for purposes of CFTC disclosure requirements are:
          In  September  1992,  Harris  Trust and  Savings  Bank (as trustee for
 Ameritech Pension Trust),  Ameritech  Corporation,  and an officer of Ameritech
 sued Salomon Brothers Inc and Salomon  Brothers Realty  Corporation in the U.S.
 District  Court for the Northern  District of Illinois  (Harris  Trust  Savings
 Bank, not individually  but solely as trustee for the Ameritech  Pension Trust,
 Ameritech Corporation and John A. Edwardson v. Salomon Brothers Inc and Salomon
 Brothers  Realty  Corp.).  The  complaint  alleged that  purchases by Ameritech


                                       6

<PAGE>

 Pension  Trust from the Salomon  entities  of  approximately  $20.9  million in
 participations  in a portfolio of motels  owned by Motels of America,  Inc. and
 Best Inns, Inc. violated the Employee Retirement Income Security Act ("ERISA"),
 the Racketeer  Influenced and Corrupt  Organization Act ('RICO") and state law.
 Salomon  Brothers  Inc had  acquired  the  participations  issued  by Motels of
 America and Best Inns to finance  purchases of motel portfolios and sold 95% of
 three  such  issues  and 100% of one such  issue to  Ameritech  Pension  Trust.
 Ameritech Pension Trust's  complaint sought (1) approximately  $20.9 million on
 the ERISA  claim,  and (2) in excess of $70  million  on the RICO and state law
 claims as well as other relief.  In various  decisions  between August 1993 and
 July 1999, the courts hearing the case have dismissed all of the allegations in
 the complaint against the Salomon entities. In October 1999, Ameritech appealed
 to the U.S. Supreme Court and in January 2000, the Supreme Court agreed to hear
 the case.  An argument was heard on April 17, 2000.  The appeal seeks review of
 the  decision  of the U.S.  Court  of  Appeals  for the  Seventh  Circuit  that
 dismissed the sole remaining ERISA claim against the Salomon entities.  In June
 the Supreme Court reversed the Seventh Circuit and the matter has been remanded
 to the Trial Courts.
          Both the  Department  of Labor and the Internal  Revenue  Service have
 advised Salomon  Brothers Inc that they were or are reviewing the  transactions
 in which Ameritech Pension Trust acquired such participations.  With respect to
 the Internal  Revenue Service review,  Salomon Smith Barney  Holdings,  Salomon

                                       7


<PAGE>

 Brothers Inc and Salomon  Brothers  Realty have consented to extensions of time
 for the  assessment  of excise taxes that may be claimed to be due with respect
 to the transactions for the years 1987, 1988 and 1989.
     In December  1996, a complaint  seeking  unspecified  monetary  damages was
filed by Orange County,  California against numerous brokerage firms,  including
Salomon Smith Barney,  in the U.S.  Bankruptcy Court for the Central District of
California.  (County  of  Orange et aL v. Bear  Stearns & Co.  Inc.  et al.) The
complaint alleged,  among other things, that the brokerage firms recommended and
sold  unsuitable  securities  to Orange  County.  Salomon  Smith  Barney and the
remaining brokerage firms settled with Orange County in mid 1999.
     In June  1998,  complaints  were filed in the U.S.  District  Court for the
Eastern District of Louisiana in two actions (Board of  Liquidations,  City Debt
of the City of New  Orleans v. Smith  Barney  Inc,  et ano.  and The City of New
Orleans v. Smith Barney Inc. et ano.),  in which the City of New Orleans seeks a
determination that Smith Barney Inc. and another underwriter will be responsible
for any  damages  that the City may  incur in the  event  the  Internal  Revenue
Service  denies tax exempt  status to the City's  General  Obligation  Refunding
Bonds Series 1991.  The  complaints  were  subsequently  amended.  Salomon Smith
Barney has asked the court to dismiss the amended  complaints.  The Court denied
the motion but stayed the case. Subsequently, the city withdrew its lawsuit.
     It November  1998, a class action  complaint was filed in the United States
District  Court for the Middle  District of Florida  (Dwight  Brock as Clerk for
Collier     County    v.    Merrill  Lynch, et al.). The complaint alleged that,



                                       8


<PAGE>

 pursuant to a nationwide  conspiracy,  17 broker-dealer  defendants,  including
 Salomon Smith Barney,  charged  excessive  mark-ups in connection with advanced
 refunding transactions.  Among other relief, plaintiffs sought compensatory and
 punitive  damages,  restitution  and/or  rescission  of  the  transactions  and
 disgorgement of alleged excessive profits. In October 1999, the plaintiff filed
 a second amended complaint. Salomon Smith Barney has asked the court to dismiss
 the amended complaint.
          In connection with the Louisiana and Florida matters,  the IRS and SEC
 have  been  conducting  an  industry-wide  investigation  into the  pricing  of
 Treasury securities in advanced refunding  transactions.  In April 2000 SSB and
 several  other  broker-dealers  entered into a settlement  with the IRS and the
 SEC.
          In December 1998, Salomon Smith Barney was one of twenty-eight  market
 making firms that reached a settlement with the SEC in the matter titled In the
 Matter of Certain Market Making Activities on NASDAQ. As part of the settlement
 of that matter,  Salomon Smith Barney, without admitting or denying the factual
 allegations,  agreed to an order  that  required  that it: (i) cease and desist
 from  committing or causing any violations of Sections  15(c)(1) and (2) of the
 Securities Exchange Act of 1934 and Rules l5cl -2, 15c2-7 and 17a-3 thereunder,
 (ii) pay penalties totaling  approximately  $760,000,  and (iii) submit certain
 policies and procedures to an independent consultant for review.
          In March 1999, a complaint seeking in excess of $250 million was filed
 by a hedge fund and its investment  advisor against Salomon Smith Barney in the
 Supreme  Court of the State of New York,  County of New York (MKP Master  Fund,


                                       9


<PAGE>

 LDC et al. v. Salomon Smith Barney Inc.).  The complaint  included  allegations
 that,  while  acting as prime broker for the hedge fund,  Salomon  Smith Barney
 breached its contracts with  plaintiffs,  misused their monies,  and engaged in
 tortious (wrongful) conduct,  including breaching its fiduciary duties. Salomon
 Smith Barney asked the court to dismiss the complaint in full. In October 1999,
 the court  dismissed the tort claims,  including  the breach of fiduciary  duty
 claims.  The court allowed the breach of contract and misuse of money claims to
 stand, Salomon Smith Barney will continue to contest this lawsuit vigorously.
Item 4.  Submission of Matters to a Vote of Security Holders.
         There were no matters  submitted  to the  security  holders  for a vote
during the last fiscal year covered by this report.
                                     PART II
Item 5. Market for Registrant's Common Equity and Related Security Holder
        Matters.
                    (a)  Market  Information.  The  Partnership  has  issued  no
                         stock.  There  is no  public  market  for the  Units of
                         Limited Partnership Interest.
                    (b   Holders.  The  number of  holders  of Units of  Limited
                         Partnership Interest as of December 31, 2000 was 886.
                    (c)  Distribution.   The   Partnership  did  not  declare  a
                         distribution in 2000 or 1999
                    (d)  Use of Proceeds.  There were no additional sales in the
                         years ended December 31, 2000, 1999 and 1998.



                                       10
<PAGE>


Item 6. Selected Financial Data. The Partnership commenced trading operations on
August 9, 1996.  Realized and unrealized  trading gains  (losses),  realized and
unrealized gains (losses) on Zero Coupons,  interest  income,  net income (loss)
and increase (decrease) in net asset value per Unit for the years ended December
31, 2000, 1999, 1998, 1997 and for the period from August 9, 1996  (commencement
of trading  operations)  to December  31, 1996 and total  assets at December 31,
2000, 1999, 1998, 1997 and 1996 were as follows:

<TABLE>
<CAPTION>
<S>                                  <C>              <C>           <C>            <C>          <C>
                                     2000           1999            1998           1997           1996
                                -------------   -------------   -------------  ------------  -------------
Realized and unrealized trading
 gains(losses) net of brokerage
 commissions and clearing fees
 of $624,556, $934,444, $914,741,
 $958,141, and $346,364,
 respectively                  $    203,233    $ (1,722,069)   $  2,010,123   $    372,990   $  2,812,357

Realized and unrealized
 appreciation (depreciation)
 on  Zero Coupons                   471,530      (1,058,378)        644,098        429,903         80,764

Interest income                     970,693       1,106,132       1,126,341      1,212,251        434,374
                               ------------    ------------    ------------   ------------   ------------

                               $  1,645,456    $ (1,674,315)   $  3,780,562   $  2,015,144   $  3,327,495
                               ============    ============    ============   ============   ============

Net income (loss)              $  1,420,294    $ (2,130,054)   $  3,174,331   $  1,359,429   $  2,717,561
                               ============    ============    ============   ============   ============

Increase (decrease) in
 net asset value per unit      $     119.81    $    (133.74)   $     186.29   $      68.65   $     135.20
                               ============    ============    ============   ============   ============

Total assets                   $ 17,471,747    $ 19,486,036    $ 23,386,690   $ 23,217,865   $ 23,276,499
                               ============    ============    ============   ============   ============
</TABLE>




                                       11
<PAGE>


Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations.
         (a)  Liquidity.  The  Partnership  does not engage in sales of goods or
services.  Its only  assets  are its  equity in its  commodity  futures  trading
account,   consisting  of  cash,  Zero  Coupons,  net  unrealized   appreciation
(depreciation) on open futures contracts and interest receivable. Because of the
low margin deposits  normally  required in commodity  trading,  relatively small
price  movements  may  result in  substantial  losses to the  Partnership.  Such
substantial  losses could lead to a material decrease in liquidity.  To minimize
this risk, the Partnership follows certain policies including:
         (1)  Partnership  funds are invested only in commodity  interests which
are traded in sufficient volume to permit, in the opinion of the Advisors,  ease
of taking and liquidating positions.
         (2) No Advisor will initiate  additional  positions in any commodity if
such  additional   positions  would  result  in  aggregate   positions  for  all
commodities  requiring as margin more than 66-2/3% of the  Partnership's  assets
allocated to the Advisor.
         (3) The  Partnership  will not employ the  trading  technique  commonly
known as  "pyramiding",  in which the  speculator  uses  unrealized  profits  on
existing positions as margin for the purchase or sale of additional positions in
the same or related commodities.
         (4) The  Partnership  will not  utilize  borrowings  except  short-term
borrowings if the Partnership  takes delivery of any cash  commodities.



                                       12


<PAGE>

         (5) The Advisors may, from time to time, employ trading strategies such
as spreads or  straddles  on behalf of the  Partnership.  The term  "spread"  or
"straddle"   describes  a  commodity  futures  trading  strategy  involving  the
simultaneous buying and selling of contracts on the same commodity but involving
different  delivery  dates or markets and in which the trader  expects to earn a
profit from a widening or narrowing of the difference  between the prices of the
two contracts.
         (6) The  Partnership  will not permit  the  churning  of its  commodity
trading accounts.
         (7) The  Partnership may cease trading and liquidate all open positions
prior to its dissolution if its Net Assets  (excluding assets maintained in Zero
Coupons) decrease to 10% of those assets on the day trading commenced  (adjusted
for redemptions).
         The  Partnership  is party to financial  instruments  with  off-balance
sheet risk, including derivative financial  instruments and derivative commodity
instruments,  in the normal course of its business.  These financial instruments
may  include  forwards,  futures  and  options,  whose  value is  based  upon an
underlying  asset,  index,  or reference  rate, and generally  represent  future
commitments to exchange  currencies or cash flows,  or to purchase or sell other
financial  instruments  at specified  terms at specified  future dates.  Each of
these  instruments  is subject to various risks similar to those relating to the
underlying financial  instruments  including market and credit risk. The General
Partner monitors and controls the  Partnership's  risk exposure on a daily basis
through financial, credit and risk management monitoring systems and accordingly


                                       13

<PAGE>

believes that it has effective procedures for evaluating and limiting the credit
and  market  risks to which the  Partnership  is  subject.  (See  also  "Item 8.
Financial  Statements  and  Supplementary  Data."  for  further  information  on
financial instrument risk included in the notes to financial statements.)
             Other than the risks inherent in commodity trading, the Partnership
knows of no trends,  demands,  commitments,  events or uncertainties  which will
result  in or  which  are  reasonably  likely  to  result  in the  Partnership's
liquidity  increasing or decreasing in any material way. The Limited Partnership
Agreement  provides  that the  Partnership  will cease  trading  operations  and
liquidate  all open  positions  upon the  first to occur of the  following:  (i)
December  31,  2015;  (ii) at the end of the  month  in which  the Zero  Coupons
purchased by the  Partnership  come due (November 15, 2003),  unless the General
Partner elects otherwise;  (iii) the vote to dissolve the Partnership by limited
partners  owning  more than 50% of the Units;  (iv)  assignment  by the  General
Partner  of all of its  interest  in the  Partnership  or  withdrawal,  removal,
bankruptcy  or any other event that causes the General  Partner to cease to be a
general partner under the Partnership Act unless the Partnership is continued as
described in the Limited Partnership Agreement;  (v) the Partnership is required
to register  under the  Investment  Company Act of 1940 and the General  Partner
determines that dissolution is therefore in the Partnership's best interest;  or
(vi) the  occurrence of any event which shall make it unlawful for the existence
of the Partnership to be continued.


                                       14

<PAGE>

         (b)  Capital  resources.  (i) The  Partnership  has  made  no  material
commitments for capital expenditures.
                (ii) The  Partnership's  capital  will  consist  of the  capital
contributions  of the  partners as  increased or decreased by gains or losses on
commodity trading and Zero Coupon appreciation or depreciation, and by expenses,
interest  income,  redemptions of Units and  distributions  of profits,  if any.
Gains or losses  on  commodity  trading  cannot be  predicted.  Market  moves in
commodities  are dependent  upon  fundamental  and  technical  factors which the
Partnership  may or may not be  able  to  identify.  Partnership  expenses  will
consist of, among other things, commissions, management fees and incentive fees.
The level of these  expenses  is  dependent  upon the level of trading  gains or
losses and the ability of the Advisors to identify  and take  advantage of price
movements  in the  commodity  markets,  in  addition  to the level of Net Assets
maintained.  Furthermore,  the  Partnership  will receive no payment on its Zero
Coupons until their due date.  However,  the Partnership will accrue interest on
the Zero  Coupons  and Limited  Partners  will be required to report as interest
income on their  U.S.  tax  returns  in each year  their  pro-rata  share of the
accrued  interest on the Zero Coupons even though no interest will be paid prior
to their due date. In addition,  the amount of interest income payable by SSB is
dependent upon interest rates over which the Partnership has no control.
         No  forecast  can be made as to the level of  redemptions  in any given


                                       15


<PAGE>

period.  A limited  partner  may cause  all of his Units to be  redeemed  by the
Partnership  at the net asset value thereof as of the last day of a quarter (the
"Redemption  Date")  on  ten  days'  written  notice  to  the  General  Partner.
Redemption fees equal to 2% of redemption net asset value per Unit redeemed will
be charged to any limited partner who redeems his Units on the first,  second or
third  possible  redemption  dates  and  1% on the  fourth  and  fifth  possible
redemption dates,  respectively.  Thereafter, no redemption fee will be charged.
For the year  ended  December  31,  2000,  3,049  Units were  redeemed  totaling
$3,693,417.  For the year ended  December  31, 1999,  1,497 Units were  redeemed
totaling  $1,960,998.  For the year ended  December 31,  1998,  2,130 Units were
redeemed  totaling  $2,542,381.  During 1998,  SSB received  redemption  fees of
$8,992.
         For each Unit redeemed the  Partnership  liquidates  $1,000  (principal
amount) of Zero Coupons and will continue to liquidate $1,000 (principal amount)
of Zero Coupons per Unit redeemed.  These  liquidations  will be at market value
which will be less than the amount  payable on their due date.  Moreover,  it is
possible  that  the  market  value  of the Zero  Coupon  could be less  than its
purchase price plus the original issue discount amortized to date.
         (c) Results of  operations.  For the year ended  December 31, 2000, the
Net Asset per Unit  increased  9.8% from  $1,228.54 to  $1,348.35.  For the year
ended  December  31,  1999,  the Net Asset  Value per Unit  decreased  9.8% from
$1,362.28 to  $1,228.54.  For the year ended  December  31, 1998,  the Net Asset
Value per Unit increased 15.8% from $1,175.99 to $1,362.28.


                                       16

<PAGE>

         The  Partnership  experienced  net  trading  gains of  $827,789  before
commissions  and  expenses in 2000.  Gains were  primarily  attributable  to the
trading  in  currencies,  energy,  U.S.  and  non-U.S.  interest  rates and were
partially  offset  by  losses  recognized  in  the  trading  of  grains,  softs,
livestock,   metals  and  indices.   The  Partnership   experienced   unrealized
appreciation  of $446,478 on Zero Coupons  during 2000 and a gain on the sale of
Zero Coupons of $25,052 during 2000.
         The  Partnership  experienced  net trading  losses of  $787,625  before
commissions  and expenses for the period  ended  December 31, 1999.  Losses were
attributable  to the trading of commodity  futures in non-U.S.  interest  rates,
softs,  indices,  metals,  grains and currencies offset by gains in U.S interest
rates  and  energy.  The  Partnership  experienced  unrealized  depreciation  of
$1,084,077 on Zero Coupons during 1999 and a gain on the sale of Zero coupons of
$25,699 during 1999.
         The  Partnership  experienced  net trading gains of $2,924,864,  before
commissions  and expenses in 1998.  These gains were  attributable to trading in
energy  and U.S.  and  non-U.S.  interest  rates  products  offset  by losses in
currencies,  grains,  livestock,  metals,  softs and  indices.  The  Partnership
experienced unrealized  appreciation of $565,392 on Zero Coupons during 1998 and
a gain on the sale of Zero Coupons of $78,706 during 1998.
         Commodity  markets are highly  volatile.  Broad price  fluctuations and
rapid  inflation  increase  the risks  involved in commodity  trading,  but also


                                       17
<PAGE>

increase the possibility of profit. The profitability of the Partnership depends
on the  existence  of major  price  trends and the  ability of the  Advisors  to
identify  those price trends  correctly.  Price trends are  influenced by, among
other things, changing supply and demand relationships,  weather,  governmental,
agricultural,   commercial  and  trade  programs  and  policies,   national  and
international  political and economic  events and changes in interest  rates. To
the extent that market trends exist and the Advisors are able to identify  them,
the Partnership expects to increase capital through operations.
         (d)        Operational Risk
                    The  Partnership  is  directly  exposed  to market  risk and
credit  risk,  which  arise in the  normal  course of its  business  activities.
Slightly  less  direct,  but of critical  importance,  are risks  pertaining  to
operational and back office support.  This is particularly the case in a rapidly
changing and increasingly global environment with increasing transaction volumes
and an expansion in the number and  complexity  of products in the  marketplace.
Such risks  include:
Operational/Settlement  Risk - the risk of financial  and  opportunity  loss and
legal liability attributable to operational problems, such as inaccurate pricing
of transactions,  untimely trade execution,  clearance and/or settlement, or the
inability to process large volumes of  transactions.  The Partnership is subject
to increased  risks with respect to its trading  activities  in emerging  market
securities,  where clearance,  settlement, and custodial risks are often greater


                                       18
<PAGE>

than  in  more  established  markets.
Technological Risk - the risk of loss attributable to technological  limitations
or hardware failure that constrain the Partnership's ability to gather, process,
and communicate information efficiently and securely,  without interruption,  to
customers,  among units  within the  Partnership,  and in the markets  where the
Partnership participates.
Legal/Documentation  Risk - the risk of loss attributable to deficiencies in the
documentation  of  transactions  (such  as  trade  confirmations)  and  customer
relationships  (such as master  netting  agreements)  or errors  that  result in
noncompliance with applicable legal and regulatory requirements.
Financial  Control  Risk - the  risk  of loss  attributable  to  limitations  in
financial  systems and controls.  Strong  financial  systems and controls ensure
that assets are safeguarded,  that  transactions are executed in accordance with
management's   authorization,   and  that  financial   information  utilized  by
management and  communicated to external  parties,  including the  Partnership's
unitholder, creditors, and regulators, is free of material errors.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Introduction
         The Partnership is a speculative  commodity pool. The market  sensitive
instruments held by it are acquired for speculative trading purposes, and all or
substantially all of the Partnership's assets are subject to the risk of trading

                                       19
<PAGE>

loss. Unlike an operating company,  the risk of market sensitive  instruments is
integral, not incidental, to the Partnership's main line of business.
         Market movements result in frequent changes in the fair market value of
the  Partnership's  open positions and,  consequently,  in its earnings and cash
flow. The Partnership's  market risk is influenced by a wide variety of factors,
including the level and volatility of interest  rates,  exchange  rates,  equity
price  levels,  the market value of financial  instruments  and  contracts,  the
diversification results among the Partnership's open positions and the liquidity
of the markets in which it trades.
         The  Partnership  rapidly  acquires and liquidates  both long and short
positions in a wide range of different markets. Consequently, it is not possible
to predict how a particular future market scenario will affect performance,  and
the Partnership's  past performance is not necessarily  indicative of its future
results.
         Value at Risk is a measure of the maximum amount which the  Partnership
could  reasonably  be expected to lose in a given market  sector.  However,  the
inherent uncertainty of the Partnership's speculative trading and the recurrence
in the markets  traded by the  Partnership  of market  movements  far  exceeding
expectations could result in actual trading or non-trading losses far beyond the
indicated Value at Risk or the Partnership's  experience to date (i.e., "risk of
ruin").  In  light  of the  foregoing  as well as the  risks  and  uncertainties



                                       20
<PAGE>

intrinsic  to all  future  projections,  the  inclusion  of  the  quantification
included in this section should not be considered to constitute any assurance or
representation  that the  Partnership's  losses  in any  market  sector  will be
limited to Value at Risk or by the  Partnership's  attempts to manage its market
risk.
Quantifying the Partnership's Trading Value at Risk
         The following  quantitative  disclosures  regarding  the  Partnership'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 (such as the terms of  particular  contracts  and the number of market risk
sensitive instruments held during or at the end of the reporting period).
         The Partnership's risk exposure in the various market sectors traded by
the  Advisors  is  quantified  below in  terms  of  Value  at  Risk.  Due to the
Partnership's  mark-to-market  accounting,  any  loss in the  fair  value of the
Partnership's open positions is directly reflected in the Partnership's earnings
(realized or unrealized).
          Exchange  maintenance  margin  requirements  have  been  used  by  the
Partnership as the measure of its Value at Risk. Maintenance margin requirements
are set by exchanges to equal or exceed the maximum losses  reasonably  expected


                                       21
<PAGE>

to be incurred in the fair value of any given contract in 95%-99% of any one-day
intervals.  The  maintenance  margin  levels  are  established  by  dealers  and
exchanges  using  historical  price  studies as well as an assessment of current
market  volatility  (including the implied  volatility of the options on a given
futures contract) and economic fundamentals to provide a probabilistic  estimate
of the maximum expected near-term one-day price fluctuation.  Maintenance margin
has been used rather than the more generally  available initial margin,  because
initial margin  includes a credit risk component  which is not relevant to Value
at Risk
         In the case of market  sensitive  instruments  which  are not  exchange
traded  (almost  exclusively  currencies  in the case of the  Partnership),  the
margin requirements for the equivalent futures positions have been used as Value
at  Risk.  In those  rare  cases in  which a  futures-equivalent  margin  is not
available, dealers' margins have been used.
         The fair value of the Partnership's  futures and forward positions does
not have any  optionality  component.  However,  certain of the  Advisors  trade
commodity options. The Value at Risk associated with options is reflected in the
following  table  as the  margin  requirement  attributable  to  the  instrument
underlying each option. Where this instrument is a futures contract, the futures
margin,   and   where   this   instrument   is   a   physical   commodity,   the
futures-equivalent  maintenance  margin  has  been  used.  This  calculation  is


                                       22
<PAGE>

conservative in that it assumes that the fair value of an option will decline by
the same  amount as the fair value of the  underlying  instrument,  whereas,  in
fact,  the fair values of the options  traded by the  Partnership  in almost all
cases fluctuate to a lesser extent than those of the underlying instruments.
         In  quantifying  the   Partnership's   Value  at  Risk,  100%  positive
correlation  in the  different  positions  held in each market risk category has
been  assumed.  Consequently,  the margin  requirements  applicable  to the open
contracts have simply been added to determine each trading category's  aggregate
Value at Risk.  The  diversification  effects  resulting  from the fact that the
Partnership's positions are rarely, if ever, 100% positively correlated have not
been reflected.

                                       23
<PAGE>


The Partnership's Trading Value at Risk in Different Market Sectors
         The following table indicates the trading Value at Risk associated with
the Partnership's open positions by market category as of December 31, 2000. All
open position  trading risk exposures of the  Partnership  have been included in
calculating  the  figures  set  forth  below.  As  of  December  31,  2000,  the
Partnership's total capitalization was $16,573,979.

<TABLE>
<CAPTION>
<S>                                              <C>         <C>            <C>        <C>
                                                December 31, 2000
                                                                            Year to Date
                                                          % of Total        High       Low
Market Sector                             Value at Risk Capitalization      Value at Risk
--------------------------------------------------------------------------------------------
Currencies
 - Exchange Traded Contracts                 $  197,938      1.19%    $  532,135   $   53,445
Energy                                           34,000      0.21%       790,700       25,700
Grains                                           66,789      0.40%       209,900        6,300
Interest rates U.S                              119,000      0.72%       272,600       10,090
Interest rates Non-U.S                          552,984      3.34%       736,677      170,842
Livestock                                        28,520      0.17%        56,540        4,500
Metals (Exchange Traded and OTC Contracts)      120,725      0.73%       300,550       18,000
Softs                                            61,822      0.37%       209,500       21,500
Indices                                          26,202      0.16%       303,411       12,344
Lumber                                            2,200      0.01%       170,955        1,100
                                             ----------     ------
Total                                        $1,210,180      7.30%
                                             ==========     ======
</TABLE>



                                       24
<PAGE>




As of December 31, 1999, the Partnership's total capitalization was $18,847,102.

<TABLE>
<CAPTION>
<S>                                              <C>           <C>       <C>          <C>
                                               December 31, 1999
                                                                            Year to Date
                                                          % of Total       High            Low
Market Sector                              Value at Risk Capitalization   Value at Risk  Value at Risk
-------------------------------------------------------------------------------------------------------
Currencies
 - Exchange Traded                           $  257,696      1.37%       $  238,141   $  175,309
 - OTC Contracts                                226,009      1.20%          372,478      110,492
Energy                                          296,300      1.57%          346,300      200,600
Grains                                           37,750      0.20%           69,300       10,800
Interest rates U.S                              196,000      1.04%          301,400       68,000
Interest rates Non-U.S                          297,920      1.58%          787,846      115,899
Livestock                                        18,400      0.10%           46,400        6,400
Metals (Exchange Traded and OTC Contracts)      232,000      1.23%          359,300       30,000
Softs                                           163,067      0.86%          213,689       69,463
Indices                                         107,371      0.57%          286,160       34,795
                                            ----------   ----------
Total                                        $1,832,513      9.72%
                                            ==========   ==========
</TABLE>




                                       25
<PAGE>


Material Limitations on Value at Risk as an Assessment of Market Risk
         The face value of the market sector instruments held by the Partnership
is typically many times the applicable  maintenance margin  requirement  (margin
requirements  generally range between 2% and 15% of contract face value) as well
as, many times,  the  capitalization  of the  Partnership.  The magnitude of the
Partnership's  open  positions  creates a "risk of ruin" not typically  found in
most other investment  vehicles.  Because of the size of its positions,  certain
market  conditions -- unusual,  but historically  recurring from time to time --
could cause the  Partnership to incur severe losses over a short period of time.
The  foregoing  Value at Risk  table -- as well as the past  performance  of the
Partnership -- give no indication of this "risk of ruin."
Non-Trading Risk
         The  Partnership  has  non-trading  market  risk  on its  foreign  cash
balances not needed for margin.  However,  these balances (as well as any market
risk they represent) are immaterial.
         Materiality  as used in this  section,  "Qualitative  and  Quantitative
Disclosures About Market Risk," is based on an assessment of reasonably possible
market movements and the potential losses caused by such movements,  taking into
account the leverage,  optionality and multiplier  features of the Partnership's
market sensitive instruments.

                                       26
<PAGE>



Qualitative Disclosures Regarding Primary Trading Risk Exposures
         The  following  qualitative  disclosures  regarding  the  Partnership's
market risk exposures - except for (i) those  disclosures that are statements of
historical fact and (ii) 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 the  General  Partner  and the  Advisors  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 management  strategies of the Partnership.
There can be no assurance that the Partnership's  current market exposure and/or
risk  management  strategies  will  not  change  materially  or  that  any  such
strategies will be effective in either the short- or long- term.
Investors must be prepared to lose all or substantially  all of their investment
in the Partnership.


                                       27
<PAGE>

         The  following   were  the  primary   trading  risk  exposures  of  the
Partnership as of December 31, 2000, by market sector.
         Interest Rates.  Interest rate risk is the principal market exposure of
the  Partnership.  Interest  rate  movements  directly  affect  the price of the
futures  positions held by the Partnership and indirectly 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 primary interest rate exposure is
to interest rate  fluctuations in the United States and the other G-7 countries.
However,  the Partnership also takes futures positions on the government debt of
smaller nations -- e.g.,  Australia.  The General Partner  anticipates  that G-7
interest rates will remain the primary market  exposure of the  Partnership  for
the foreseeable future.
         Currencies.  The  Partnership's  currency  exposure is to exchange rate
fluctuations,  primarily  fluctuations  which  disrupt  the  historical  pricing
relationships   between   different   currencies  and  currency   pairs.   These
fluctuations  are  influenced  by interest rate changes as well as political and
general  economic  conditions.  The General Partner does not anticipate that the
risk profile of the Partnership's  currency sector will change  significantly in
the future.  The currency  trading Value at Risk figure includes  foreign margin
amounts  converted into U.S.  dollars with an incremental  adjustment to reflect
the exchange rate risk inherent to the  dollar-based  Partnership  in expressing
Value at Risk in a functional currency other than dollars.



                                       28
<PAGE>

         Stock Indices.  The Partnership's  primary equity exposure is 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.  As of
December 31, 2000,  the  Partnership's  primary  exposures  were in the S&P 500,
Financial  Times  (England),  Nikkei  (Japan)  and Hang Seng (Hong  Kong)  stock
indices.  The General Partner  anticipates  little,  if any,  trading in non-G-7
stock indices. The Partnership is primarily exposed to the risk of adverse price
trends or static  markets in the major  U.S.,  European  and  Japanese  indices.
(Static markets would not cause major market changes but would make it difficult
for the Partnership to avoid being "whipsawed" into numerous small losses.)
         Metals.   The  Partnership's   primary  metal  market  exposure  is  to
fluctuations in the price of gold and silver.  Although  certain of the Advisors
will from time to time  trade base  metals  such as  aluminum  and  copper,  the
principal  market  exposures of the Partnership  have  consistently  been in the
precious metals,  gold and silver. The General Partner anticipates that gold and
silver will remain the primary metals market exposure for the Partnership.
         Softs.   The   Partnership's   primary   commodities   exposure  is  to
agricultural  price  movements  which are often  directly  affected by severe or
unexpected weather conditions. Coffee, cocoa, cotton and sugar accounted for the
substantial  bulk of the  Partnership's  commodity  exposure as of December  31,
2000.
         Energy.  The  Partnership's  primary energy  market  exposure is to gas


                                       29
<PAGE>

and oil price  movements,  often  resulting from political  developments  in the
Middle East. Oil prices can be volatile and substantial  profits and losses have
been and are expected to continue to be experienced in this market
Qualitative Disclosures Regarding Non-Trading Risk Exposure
         The  following  were  the  only   non-trading  risk  exposures  of  the
Partnership as of December 31, 2000.
         Foreign Currency Balances.  The Partnership's  primary foreign currency
balances  are in  Japanese  yen,  Australian  dollar,  British  pounds and Swiss
francs.  The Advisor regularly  converts foreign currency balances to dollars in
an attempt to control the Partnership's non-trading risk.
         Securities  Positions.   The  Partnership's  only  market  exposure  in
instruments  held other than for trading is in its  securitites  portfolio.  The
Partnership maintains a portion of its assets in principal amounts stripped from
U.S. Treasury Bonds under the Treasury's STRIPS program. Violent fluctuations in
prevailing  interest rates could cause immaterial  mark-to-market  losses on the
Partnership's securities.
Qualitative Disclosures Regarding Means of Managing Risk Exposure
         The General  Partner  monitors  and  controls  the  Partnership's  risk
exposure  on a  daily  basis  through  financial,  credit  and  risk  management
monitoring systems and accordingly believes that it has effective procedures for
evaluating and limiting the credit and market risks to which the  Partnership is
subject.
         The General  Partner  monitors the  Partnership's  performance  and the


                                       30
<PAGE>

concentration of its open positions,  and consults with the Advisors  concerning
the Partnership's overall risk profile. If the General Partner felt it necessary
to do so, the General Partner could require certain of the Advisors to close out
individual  positions as well as enter certain positions traded on behalf of the
Partnership. However, any such intervention would be a highly unusual event. The
General  Partner  primarily  relies on the Advisors'  own risk control  policies
while maintaining a general  supervisory  overview of the  Partnership's  market
risk exposures.
         Each Advisor applies its own risk  management  policies to its trading.
The Advisors  often follow  diversification  guidelines,  margin limits and stop
loss points to exit a position.  The Advisors' research of risk management often
suggests ongoing modifications to their trading programs.
         As part of the General  Partner's risk management,  the General Partner
periodically  meets with the Advisors to discuss  their risk  management  and to
look for any material  changes to the  Advisors'  portfolio  balance and trading
techniques.  The  Advisors  are  required to notify the  General  Partner of any
material changes to their programs.
         In the unlikely event that the Partnership is required to meet a margin
call  in  excess  of the  cash  balance  in its  trading  accounts,  SSBHI  will
contribute up to an amount equal to the maturity  value of the Zero Coupons held
by the Partnership at the time of such call to the capital of the Partnership to
permit it to meet its margin obligations in excess of its cash balance.

                                       31
<PAGE>






Item 8.    Financial Statements and Supplementary Data.




                SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P. II
                          INDEX TO FINANCIAL STATEMENTS


                                                            Page
                                                           Number

        Oath or Affirmation                                 F-2

        Report of Independent Accountants                   F-3

        Financial Statements: Statement of
        Financial Condition at December 31,
        2000 and 1999                                       F-4

        Statement of Income and Expenses for
        the years ended December 31, 2000, 1999
        and 1998                                            F-5

        Statement of Partners' Capital for
        the years ended December 31, 2000, 1999
        and 1998                                            F-6

        Notes to Financial Statements                    F-7 - F-11


















                                       F-1


<PAGE>
                           To The Limited Partners of
                           Smith Barney Principal PLUS
                              Futures Fund L.P. II

  To the best of the knowledge and belief of the undersigned, the information
contained herein is accurate and complete.






By:  Daniel A. Dantuono, Chief Financial Officer
     Smith Barney Futures Management LLC
     General Partner, Smith Barney Principal PLUS
        Futures Fund L.P. II

Smith Barney Futures Management LLC
388 Greenwich Street
7th Floor
New York, N.Y.  10013
212-723-5424




                                   F-2
<PAGE>


                        Report of Independent Accountants

To the Partners of
   Smith Barney Principal PLUS Futures Fund L.P. II:

In our  opinion,  the  accompanying  statement of  financial  condition  and the
related  statements  of income and  expenses and of  partners'  capital  present
fairly,  in all  material  respects,  the  financial  position  of Smith  Barney
Principal  PLUS  Futures  Fund L.P.  II at December  31, 2000 and 1999,  and the
results  of its  operations  for each of the  three  years in the  period  ended
December 31, 2000, in conformity with accounting  principles  generally accepted
in  the  United  States  of  America.   These   financial   statements  are  the
responsibility of the management of the General Partner;  our  responsibility is
to express an opinion on these  financial  statements  based on our  audits.  We
conducted our audits of these  financial  statements in accordance with auditing
standards generally accepted in the United States of America, which require that
we plan and perform the audit to obtain  reasonable  assurance about whether the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial   statements,   assessing  the  accounting  principles  used  and
significant  estimates  made  by the  management  of the  General  Partner,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.



PricewaterhouseCoopers LLP
New York, New York
March 9, 2001


                                        F-3

<PAGE>



                           Smith Barney Principal PLUS
                              Futures Fund L.P. II
                        Statement of Financial Condition
                           December 31, 2000 and 1999
<TABLE>
<CAPTION>
<S>                                                                         <C>           <C>
                                                                           2000           1999
Assets:
Equity in commodity futures trading account:
   Cash (Note 3c)                                                      $ 4,968,714   $ 6,813,826
   Net unrealized appreciation on open positions                         1,258,784       313,668
   Zero coupons,  $12,292,000 and $15,341,000 principal
    amount in 2000 and 1999, respectively, due
    November 15, 2003, at fair value (amortized
    cost $10,283,556 and $12,033,954 in 2000 and 1999,
    respectively) (Notes 1 and 2)                                       10,707,930    12,011,850
                                                                       -----------   -----------
                                                                        16,935,428    19,139,344
   Receivable from SSB on sale of zero coupons                             514,560       322,229
   Interest Income                                                          21,759        24,463
                                                                       -----------   -----------
                                                                       $17,471,747   $19,486,036
                                                                       -----------   -----------


Liabilities and Partners' Capital:
Liabilities:
  Accrued expenses:
   Commissions                                                         $    45,810   $    62,619
   Management fees                                                           8,607        27,821
   Professional fees                                                        34,799        34,761
   Other                                                                     3,587         7,575
  Redemptions payable (Note 5)                                             804,965       506,158
                                                                       -----------   -----------
                                                                           897,768       638,934
                                                                       -----------   -----------
Partners' capital (Notes 1, 5 and 6):
  General Partner, 203 Unit equivalents outstanding in 2000 and 1999       273,715       249,394
  Limited Partners, 12,089 and 15,138 Units of Limited Partnership
   Interest outstanding in 2000 and 1999, respectively                  16,300,264    18,597,708
                                                                       -----------   -----------
                                                                        16,573,979    18,847,102
                                                                       -----------   -----------
                                                                       $17,471,747   $19,486,036
                                                                       -----------   -----------
</TABLE>


See notes to financial statements.

                                        F-4
<PAGE>


                           Smith Barney Principal PLUS
                              Futures Fund L.P. II
                        Statement of Income and Expenses
              for the years ended December 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>
<S>                                                                   <C>              <C>                 <C>
                                                                     2000               1999              1998

Income:
  Net gains (losses) on trading of commodity interests:
   Realized gains (losses) on closed positions                      $(117,327)         $(197,588)       $2,741,433
   Change in unrealized gains (losses) on open positions              945,116           (590,037)          183,431
                                                                 ------------       ------------      ------------
                                                                      827,789           (787,625)        2,924,864
  Less, Brokerage commissions including clearing fees of
   $38,519, $25,058 and $19,687, respectively (Note 3c)              (624,556)          (934,444)         (914,741)
                                                                 ------------       ------------      ------------
  Net realized and unrealized gains (losses)                          203,233         (1,722,069)        2,010,123
  Gains on sale of zero coupons                                        25,052             25,699            78,706
  Unrealized appreciation (depreciation) on zero coupons              446,478         (1,084,077)          565,392
  Interest income (Notes 2c and 3c)                                   970,693          1,106,132         1,126,341
                                                                 ------------       ------------      ------------
                                                                    1,645,456         (1,674,315)        3,780,562
                                                                 ------------       ------------      ------------
Expenses:
  Management fees (Note 3b)                                           178,204            387,055           384,863
  Incentive fees (Note 3b)                                                 --             20,500           167,031
  Professional fees                                                    41,096             38,693            41,032
  Other expenses                                                        5,862              9,491            13,305
                                                                 ------------       ------------      ------------
                                                                      225,162            455,739           606,231
                                                                 ------------       ------------      ------------
Net income (loss)                                                  $1,420,294        $(2,130,054)       $3,174,331
                                                                 ------------       ------------      -------------
Net income (loss) per Unit of Limited Partnership Interest
  and General Partner Unit equivalent (Notes 1 and 6)                 $119.81           $(133.74)          $186.29
                                                                 ------------       ------------      -------------
</TABLE>



See notes to financial statements.

                                             F-5
<PAGE>


                           Smith Barney Principal PLUS
                              Futures Fund L.P. II
                         Statement of Partners' Capital
              for the years ended December 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>
<S>                                                               <C>             <C>            <C>
                                                               Limited           General
                                                              Partners          Partner           Total

Partners' capital at December 31, 1997                      $ 22,067,478    $    238,726    $ 22,306,204
Net income                                                     3,136,514          37,817       3,174,331
Redemption of 2,130 Units of Limited Partnership Interest     (2,542,381)           --        (2,542,381)
                                                            ------------    ------------    ------------
Partners' capital at December 31, 1998                        22,661,611         276,543      22,938,154
Net loss                                                      (2,102,905)        (27,149)     (2,130,054)
Redemption of 1,497 Units of Limited Partnership Interest     (1,960,998)           --        (1,960,998)
                                                            ------------    ------------    ------------
Partners' capital at December 31, 1999                        18,597,708         249,394      18,847,102
Net income                                                     1,395,973          24,321       1,420,294
Redemption of 3,049 Units of Limited Partnership Interest     (3,693,417)           --        (3,693,417)
                                                            ------------    ------------    ------------
Partners' capital at December 31, 2000                      $ 16,300,264    $    273,715    $ 16,573,979
                                                            ------------    ------------    ------------
</TABLE>




See notes to financial statements.

                                             F-6
<PAGE>


                           Smith Barney Principal PLUS
                              Futures Fund L.P. II
                          Notes to Financial Statements


1.  Partnership Organization:
    Smith Barney  Principal PLUS Futures Fund L.P. II (the  "Partnership")  is a
    limited  partnership  which was  organized  on  November  16, 1995 under the
    partnership  laws of the State of New York. The  Partnership  engages in the
    speculative  trading of a  diversified  portfolio  of  commodity  interests,
    including futures contracts,  options and forward  contracts.  The commodity
    interests that are traded by the Partnership are volatile and involve a high
    degree of market risk. The Partnership will maintain a portion of its assets
    in principal  amounts stripped from U.S. Treasury Bonds under the Treasury's
    STRIPS  program which  payments are due  approximately  seven years from the
    date trading commenced ("Zero  Coupons").  The Partnership was authorized to
    sell 60,000 Units during its initial offering  period.  Smith Barney Futures
    Management  LLC acts as the general  partner (the "General  Partner") of the
    Partnership. The Partnership's commodity broker is Salomon Smith Barney Inc.
    ("SSB").  SSB is an affiliate of the General Partner. The General Partner is
    wholly owned by Salomon Smith Barney Holdings Inc.  ("SSBHI"),  which is the
    sole owner of SSB. SSBHI is a wholly owned  subsidiary of Citigroup Inc. The
    General  Partner and each limited partner share in the profits and losses of
    the Partnership in proportion to the amount of partnership interest owned by
    each except that no limited  partner shall be liable for  obligations of the
    Partnership in excess of his initial capital  contribution  and profits,  if
    any, net of distributions. The Partnership will be liquidated upon the first
    to occur of the  following:  December 31,  2015;  at the end of the month in
    which the Zero Coupons  purchased come due (November,  2003) ("First Payment
    Date"), unless the General Partner elects otherwise,  or under certain other
    circumstances as defined in the Limited Partnership  Agreement.  The General
    Partner, in its sole discretion,  may elect not to terminate the Partnership
    as of the First Payment Date. In the event that the General  Partner  elects
    to continue the Partnership, each limited partner shall have the opportunity
    to redeem all or some of his Units.

2.  Accounting Policies:
    a. All commodity interests (including  derivative financial  instruments and
       derivative  commodity  instruments)  are used for trading  purposes.  The
       commodity  interests  are recorded on trade date and open  contracts  are
       recorded in the  statement  of  financial  condition at fair value on the
       last business day of the year,  which  represents  market value for those
       commodity  interests for which market  quotations are readily  available.
       Investments in commodity interests  denominated in foreign currencies are
       translated into U.S. dollars at the exchange rates prevailing on the last
       business  day of  the  year.  Realized  gains  (losses)  and  changes  in
       unrealized  values on  commodity  interests  and foreign  currencies  are
       recognized  in the period in which the  contract is closed or the changes
       occur and are  included  in net gains  (losses)  on trading of  commodity
       interests.
    b. Income  taxes have not been  provided  as each  partner  is  individually
       liable for the taxes,  if any, on his share of the  Partnership's  income
       and expenses.
    c. The original issue  discount on the Zero Coupons is being  amortized over
       their life using the interest method and is included in interest income.
    d. Zero Coupons are recorded in the statement of financial condition at fair
       value.  Realized gain (loss) on the sale of Zero Coupons is determined on
       the amortized cost basis of the Zero Coupons at the time of sale.

                                   F-7
<PAGE>


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

3.  Agreements:
    a. Limited Partnership Agreement:
       The  General  Partner   administers  the  business  and  affairs  of  the
       Partnership  including  selecting  one or more  advisors to make  trading
       decisions for the Partnership.
    b. Management Agreements:
       The General  Partner,  on behalf of the  Partnership,  has  entered  into
       Management  Agreements  with Winton Capital  Management and  Willowbridge
       Associates Inc. ("Willowbridge") (the "Advisors"), which provide that the
       Advisors have sole discretion in determining the investment of the assets
       of the Partnership  allocated to each Advisor by the General Partner.  As
       compensation   for  services,   the   Partnership  is  obligated  to  pay
       Willowbridge  a  monthly  management  fee of 1/6 of 1% (2% per  year)  of
       month-end Net Assets allocated to it and pay Winton a monthly  management
       fee of 1/8 of 1% (1.5% per year) of month-end Net Assets allocated to it.
       The  Partnership  will also pay each  Advisor an  incentive  fee  payable
       quarterly  equal  to  20% of  New  Trading  Profits,  as  defined  in the
       Management  Agreements.  For the period  January 1, 2000 through June 30,
       2000, the Partnership was obligated to pay John W. Henry & Company,  Inc.
       a  monthly  management  fee of 1/3 of 1% (4% per year) of  month-end  Net
       Assets,  and an  incentive  fee of 15% of the  New  Trading  Profits,  as
       defined in the Management Agreement. Effective July 1, 2000 John W. Henry
       & Company,  Inc.  was  terminated  as an Advisor to the  Partnership  and
       Winton Capital Management was added as an Advisor on that date.
    c. Customer Agreement:
       The Partnership has entered into a Customer Agreement which provides that
       the Partnership will pay SSB a monthly  brokerage fee equal to 7/12 of 1%
       of month-end  Net Assets  allocated to the Advisors (7% per year) in lieu
       of brokerage  commissions  on a per trade basis. A portion of this fee is
       paid to employees of SSB who have sold Units of the Partnership. This fee
       does not include exchange,  clearing,  user, give-up, floor brokerage and
       NFA fees which will be borne by the Partnership. All of the Partnership's
       assets are deposited in the Partnership's account at SSB. The Partnership
       maintains  a portion  of these  assets in Zero  Coupons  and a portion in
       cash.  The  Partnership's  cash is  deposited by SSB in  segregated  bank
       accounts,  to the extent required by Commodity Futures Trading Commission
       regulations.  At December 31, 2000 and 1999,  the amount of cash held for
       margin requirements was $1,408,303 and $2,228,172, respectively. SSB will
       pay  the  Partnership  interest  on  80%  of  the  average  daily  equity
       maintained  in cash in its  account  during  each month at a 30-day  U.S.
       Treasury  bill  rate  determined  weekly  by SSB  based  on  the  average
       noncompetitive  yield on 3-month U.S.  Treasury bills maturing in 30 days
       from the date on which  such  weekly  rate is  determined.  The  Customer
       Agreement between the Partnership and SSB gives the Partnership the legal
       right to net unrealized gains and losses.  The Customer  Agreement may be
       terminated by either party.

                              F-8
<PAGE>


4.  Trading Activities:
    The Partnership was formed for the purpose of trading contracts in a variety
    of commodity  interests,  including  derivative  financial  instruments  and
    derivative commodity  instruments.  The results of the Partnership's trading
    activity  are shown in the  statement  of income  and  expenses.  All of the
    commodity  interests owned by the Partnership are held for trading purposes.
    The average  fair value  during the years ended  December 31, 2000 and 1999,
    based on a monthly calculation, was $575,395 and $855,578, respectively. The
    fair value of these  commodity  interests,  including  options  thereon,  if
    applicable,  at December  31,  2000 and 1999 was  $1,258,784  and  $313,668,
    respectively, as detailed below.

                                                      Fair Value

                                             December 31,     December 31,
                                                 2000             1999
Currencies:
  -Exchange Traded Contracts                 $   636,230    $    83,435
  -OTC                                              --          (72,633)
Energy                                            20,337         41,632
Grains                                            36,478         (3,896)
Interest Rates U.S.                              233,656        163,531
Interest Rates Non-U.S                           263,893        (42,138)
Livestock                                         42,715         (4,260)
Metals (Exchange Traded and OTC Contracts)         9,240         53,025
Softs                                             15,484         74,572
Indices                                           (3,198)        20,400
Lumber                                             3,949           --
                                             -----------    -----------
Total                                        $ 1,258,784    $   313,668
                                             -----------    -----------



5.  Distributions and Redemptions:
    Distributions of profits, if any, will be made at the sole discretion of the
    General Partner.  Beginning with the end of the first full quarter ending at
    least six months  after  trading  commenced  (March 31,  1997),  on 10 days'
    notice to the General Partner, a limited partner may require the Partnership
    to redeem his Units at their  Redemption  Net Asset Value as of the last day
    of a quarter.  Redemption fees equal to 2% of Redemption Net Asset Value per
    Unit redeemed  will be charged to any limited  partner who redeems his Units
    on the first, second or third possible redemption date, and 1% on the fourth
    and fifth possible redemption dates.  Thereafter,  no redemption fee will be
    charged.  During 1998, SSB received redemption fees of $8,992. There were no
    redemption fees charged during 2000 and 1999.

                                   F-9

<PAGE>



6.  Net Asset Value Per Unit:
    Changes  in the net asset  value per Unit of  Partnership  interest  for the
    years ended December 31, 2000, 1999 and 1998 were as follows:



<TABLE>
<CAPTION>
<S>                                                          <C>          <C>          <C>
                                                             2000         1999         1998

Net realized and unrealized gains (losses)               $   31.16   $  (109.18)  $   120.90
Realized and unrealized appreciation (depreciation)
 on Zero Coupons                                             35.19       (64.64)       36.63
Interest income                                              69.15        68.06        63.05
Expenses                                                    (15.69)      (27.98)      (34.29)
                                                          ---------    ---------    ---------
Increase (decrease) for period                              119.81      (133.74)      186.29
Net asset value per Unit, beginning of year               1,228.54     1,362.28     1,175.99
                                                          ---------    ---------    ---------
Net asset value per Unit, end of year                   $ 1,348.35  $  1,228.54  $  1,362.28
                                                          ---------    ---------    ---------
</TABLE>



7.  Guarantee:
    In the unlikely event that the Partnership is required to meet a margin call
    in excess of the cash balance in its trading accounts, SSBHI will contribute
    up to an amount equal to the maturity  value of the Zero Coupons held by the
    Partnership  at the time of such call to the capital of the  Partnership  to
    permit it to meet its margin obligations in excess of its cash balance.  The
    guarantee can only be invoked once. After the guarantee is invoked,  trading
    will cease and the General  Partner will either wait until the First Payment
    Date or will distribute cash and Zero Coupons to the limited partners.

8.  Financial Instrument Risks:
    The Partnership is party to financial  instruments  with  off-balance  sheet
    risk, including  derivative  financial  instruments and derivative commodity
    instruments,   in  the  normal  course  of  its  business.  These  financial
    instruments may include forwards,  futures and options, whose value is based
    upon an underlying asset,  index, or reference rate, and generally represent
    future commitments to exchange currencies or cash flows, to purchase or sell
    other financial instruments at specific terms at specified future dates, or,
    in the  case of  derivative  commodity  instruments,  to  have a  reasonable
    possibility to be settled in cash, through physical delivery or with another
    financial  instrument.  These  instruments  may be traded on an  exchange or
    over-the-counter  ("OTC").  Exchange traded instruments are standardized and
    include futures and certain option  contracts.  OTC contracts are negotiated
    between contracting  parties and include forwards and certain options.  Each
    of these instruments is subject to various risks similar to those related to
    the underlying  financial  instruments  including market and credit risk. In
    general,  the risks  associated  with OTC  contracts  are greater than those
    associated with exchange traded  instruments  because of the greater risk of
    default by the counterparty to an OTC contract. Market risk is the potential
    for  changes  in  the  value  of the  financial  instruments  traded  by the
    Partnership due to market changes,  including  interest and foreign exchange
    rate movements and fluctuations in commodity or security prices. Market risk
    is directly impacted by the volatility and liquidity in the markets in which
    the related underlying assets are traded.



                                   F-10
<PAGE>


    Credit risk is the possibility that a loss may occur due to the failure of a
    counterparty  to perform  according to the terms of a contract.  Credit risk
    with respect to exchange traded instruments is reduced to the extent that an
    exchange or clearing organization acts as a counterparty to the transactions
    (see  table  in Note  4).  The  Partnership's  risk of loss in the  event of
    counterparty  default is typically limited to the amounts  recognized in the
    statement  of financial  condition  and not  represented  by the contract or
    notional  amounts of the  instruments.  The  Partnership has credit risk and
    concentration  risk because the sole  counterparty or broker with respect to
    the  Partnership's  assets is SSB.
    The General Partner monitors and controls the Partnership's risk exposure on
    a daily  basis  through  financial,  credit and risk  management  monitoring
    systems,  and  accordingly  believes  that it has effective  procedures  for
    evaluating and limiting the credit and market risks to which the Partnership
    is  subject.   These  monitoring   systems  allow  the  General  Partner  to
    statistically  analyze actual trading results with risk adjusted performance
    indicators  and  correlation  statistics.  In addition,  on-line  monitoring
    systems provide account analysis of futures,  forwards and options positions
    by sector,  margin  requirements,  gain and loss transactions and collateral
    positions.
    The   notional  or   contractual   amounts  of  these   instruments,   while
    appropriately not recorded in the financial  statements,  reflect the extent
    of the Partnership's involvement in these instruments. The majority of these
    instruments mature within one year of December 31, 2000. However, due to the
    nature of the Partnership's  business,  these instruments may not be held to
    maturity.



                              F-11
<PAGE>





Item 9.     Changes in  and  Disagreements  with  Accountants on Accounting and
            Financial Disclosure.
                  During the last two  fiscal years and any subsequent  interim
period,  no independent  accountant who was engaged as the principal accountant
to audit the Partnership's financial statements has resigned or was dismissed.
                                    PART III
Item 10.    Directors and Executive Officers of the Registrant.
                  The  Partnership  has no officers or directors and its affairs
are  managed by its  General  Partner,  Smith  Barney  Futures  Management  LLC.
Investment decisions are made by the Advisors.
Item 11.    Executive Compensation.
                  The Partnership has no directors or officers.  Its affairs are
managed by Smith Barney Futures  Management  LLC, its General  Partner.  SSB, an
affiliate of the General  Partner,  is the commodity  broker for the Partnership
and receives brokerage  commissions for such services,  as described under "Item
1.  Business."  Brokerage  commissions and clearing fees of $624,556 were earned
for the year ended December 31, 2000. Management fees of $178,204 were earned by
the Advisors for the year ended December 31, 2000.  There were no incentive fees
earned by the Advisors for the year ended December 31, 2000.
Item 12. Security Ownership of Certain Beneficial Owners and Management
          (a). Security  ownership of certain beneficial owners. The Partnership
knows of no person  who beneficially owns more than 5% of the Units outstanding.



                                       32
<PAGE>

                  (b). Security ownership of management.  Under the terms of the
Limited  Partnership  Agreement,  the  Partnership's  affairs are managed by the
General Partner.  The General Partner owns Units of general partnership interest
equivalent  to 203 (1.6%) Units of Limited  Partnership  Interest as of December
31, 2000.
                  (c). Changes in control.  None.
Item 13.  Certain Relationships and Related Transactions.
               Salomon Smith Barney Inc. and Smith Barney Futures Management LL
would be considered promoters for purposes of Item 404(d) of Regulation S-K. The
nature and the amounts of  compensation  each  promoter  will  receive  from the
Partnership  are set  forth  under  "Item  1.  Business.",  "Item  8.  Financial
Statements and Supplementary Data." and "Item 11. Executive Compensation."

                                     PART IV
Item 14.    Exhibits, Financial Statement Schedules, and Reports on   Form 8-K.
         (a)  (1)   Financial Statements:
                    Statement of Financial Condition at December 31, 2000
                    and 1999.
                    Statement  of Income and Expenses for the years ended
                    December  31,  2000,  1999  and  1998.  Statement  of
                    Partners'  Capital for the years ended  December  31,
                    2000, 1999 and 1998.
              (2)   Financial Statement Schedules: Financial Data Schedule for
                    the year ended December 31, 2000.
              (3)   Exhibits:


                                       33
<PAGE>

          3.1  - Limited  Partnership  Agreement  (filed as  Exhibit  3.1 to the
               Registration  Statement  on Form  S-1  (File  No.  33-80723)  and
               incorporated herein by reference).

          3.2  - Certificate  of Limited  Partnership  of the  Partnership  as 1
               (File No. 33-80723) and incorporated herein by reference).

          10.1 - Customer  Agreement  between the  Partnership  and Smith Barney
               Shearson  Inc.  (filed  as  Exhibit  10.1  to  the   Registration
               Statement on Form S-1 (File No. 33-80723) and incorporated herein
               by reference).

          10.3 - Escrow  Instructions  relating to escrow of subscription  funds
               (filed as Exhibit 10.3 to the Registration  Statement on Form S-1
               (File No. 33-80723) and incorporated herein by reference).

          10.5 - Management Agreement among the Partnership, the General Partner
               and John W. Henry & Company, Inc. (JWH) (filed as Exhibit 10.5 to
               the  Registration  Statement on Form S-1 (File No.  33-80723) and
               incorporated herein by reference).

          10.6 - Management Agreement among the Partnership, the General Partner
               and  Willowbridge  Associates  Inc. (filed as Exhibit 10.6 to the
               Registration  Statement  on Form  S-1  (File  No.  33-80723)  and
               incorporated herein by reference).





                                       34
<PAGE>

          10.7 - Letters  extending  Management  Agreements with John W. Henry &
               Company,  Inc.  and  Willowbridge   Associates  Inc.  (previously
               filed).

          10.8 -  Letter  from  the  General  Partner   terminating   Management
               Agreement with John W. Henry & Company Inc. (filed herein).

          10.9 - Management Agreement among the Partnership, the General Partner
               and  Winton  Capital  Management  (filed herein).

          10.10- Letter  extending the Management  Agreement  with  Willowbridge
               Inc. (filed herein)

          (b) Reports on 8-K:  None Filed.

                                       35
<PAGE>


     Supplemental  Information  To Be Furnished  With Reports Filed  Pursuant To
Section 15(d) Of The Act by  Registrants  Which Have Not  Registered  Securities
Pursuant To Section 12 Of the Act.




Annual Report to Limited Partners


                                       36
<PAGE>

                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934,  the Registrant has duly caused this annual report on Form
10-K to be signed on its behalf by the  undersigned,  thereunto duly authorized,
in the City of New York and State of New York on the 30th day of March 2001.

SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P. II


By:       Smith Barney Futures Management LLC
          (General Partner)



By        /s/  David J. Vogel
          David J. Vogel, President & Director

          Pursuant to the  requirements of the Securities  Exchange Act of 1934,
this annual report on Form 10-K has been signed below by the  following  persons
in the capacities and on the date indicated.



/s/  David J. Vogel                                  /s/  Jack H. Lehman III
David J. Vogel                                      Jack H. Lehman III
Director, Principal Executive                       Chairman and Director
Officer and President



/s/  Michael R. Schaefer                            /s/  Daniel A. Dantuono
Michael R. Schaefer                                 Daniel A. Dantuono
Director                                            Treasurer, Chief Financial
                                                    Officer and Director



/s/ Daniel R. McAuliffe, Jr.                        /s/ Steve J. Keltz
Daniel R. McAuliffe, Jr.                            Steve J. Keltz
Director                                            Secretary and Director




/s/ Shelley Ullman
Shelley Ullman
Director

                                       37