UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



_________________________



FORM 10-Q

_________________________





|S | QUARTERLY REPORT PURSUANT TO SECTION 13
    OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|- | --------------------------------------------------------------------------------------------
|  |                                                                                             
|  | For the quarterly period ended: September  30, 2011                                         
|  |                                                                                             
|£ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
|  |                                                                                             
|  | For the transition period: ____________________ to ____________________                     





Commission File Number: 000-52544





Aspen Diversified Fund LLC

(Exact name of registrant as specified in
its charter)





|Delaware                                                       |                                                                                    | 32-0145465                          
|-------------------------------------------------------------- | ---------------------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or organization) |                                                                                    | (IRS Employer Identification Number)
|                                                               |                                                                                    |                                     
|                                                               | 4200 Northside Parkway Building 11, Suite 200 Atlanta, GA 30327                    |                                     
|                                                               | (Address of principal executive offices)                                           |                                     
|                                                               |                                                                                    |                                     
|                                                               | (404) 879-5126                                                                     |                                     
|                                                               | (Telephone Number)                                                                 |                                     
|                                                               |                                                                                    |                                     
|                                                               | Not applicable                                                                     |                                     
|                                                               | (Former name, former address and former fiscal year, if changed since last report) |                                     

i





|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.   
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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|                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                           
|Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files.)
|                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                           
|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.                                                        
|                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                           
|Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act).                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                           

ii





Table of Contents



PART I – FINANCIAL INFORMATION



|Item 1. | Financial Statements                                                                  | 1 
|------- | ------------------------------------------------------------------------------------- | --
|        |                                                                                       |   
|        | Interim Statements of Assets and Liabilities                                          | 1 
|        |                                                                                       |   
|        | Interim Statements of Operations                                                      | 2 
|        |                                                                                       |   
|        | Interim Statements of Changes in Net Assets                                           | 3 
|        |                                                                                       |   
|        | Interim Statements of Cash Flows                                                      | 4 
|        |                                                                                       |   
|        | Notes to Financial Statements                                                         | 5 
|        |                                                                                       |   
|Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 17
|        |                                                                                       |   
|Item 3. | Quantitative and Qualitative Disclosures about Market Risk                            | 18
|        |                                                                                       |   
|Item 4. | Controls and Procedures                                                               | 19





PART II – OTHER INFORMATION



|Item 1.  | Legal Proceedings                                           | 20
|-------- | ----------------------------------------------------------- | --
|         |                                                             |   
|Item 1A. | Risk Factors                                                | 20
|         |                                                             |   
|Item 2.  | Unregistered Sales of Equity Securities and Use of Proceeds | 20
|         |                                                             |   
|Item 3.  | Defaults Upon Senior Securities                             | 21
|         |                                                             |   
|Item 4.  | (Removed and Reserved)                                      | 21
|         |                                                             |   
|Item 5.  | Other Information                                           | 21
|         |                                                             |   
|Item 6.  | Exhibits                                                    | 21

iii





PART I – FINANCIAL INFORMATION



Item 1. Financial Statements.



Aspen Diversified Fund LLC

Interim Statements of Assets and Liabilities



|                                                                                                                                                                        |  | Unaudited          |             |                  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------ | ----------- | -----------------
|                                                                                                                                                                        |  | September 30, 2011 |             | December 31, 2010
|ASSETS                                                                                                                                                                  |  |                    |             |                  
|                                                                                                                                                                        |  |                    |             |                  
|Investments in investment funds--at fair value--Note B      (cost:
    $26,975,139 and $28,822,465 at  September 30, 2011      and December 31, 2010,
    respectively) |  | $                  | 27,748,569  |                  
|Investment in futures contracts--at fair value--Note B                                                                                                                  |  |                    | 6,253,696   |                  
|Total investments                                                                                                                                                       |  |                    | 34,002,265  |                  
|Cash and cash equivalents                                                                                                                                               |  |                    | 67,212,062  |                  
|Other receivables                                                                                                                                                       |  |                    | 208,441     |                  
|Investments in transit                                                                                                                                                  |  |                    | -0-         |                  
|Investment fund redemptions receivable                                                                                                                                  |  |                    | -0-         |                  
|                                                                                                                                                                        |  |                    |             |                  
|TOTAL ASSETS                                                                                                                                                            |  | $                  | 101,422,768 |                  
|                                                                                                                                                                        |  |                    |             |                  
|LIABILITIES AND NET ASSETS                                                                                                                                              |  |                    |             |                  
|                                                                                                                                                                        |  |                    |             |                  
|LIABILITIES                                                                                                                                                             |  |                    |             |                  
|                                                                                                                                                                        |  |                    |             |                  
|Investment in futures contracts--at fair value--Note B                                                                                                                  |  | $                  | 4,640,439   |                  
|Commissions payable                                                                                                                                                     |  |                    | 24,672      |                  
|Management, incentive & administrative fees payable--Note D                                                                                                             |  |                    | 98,599      |                  
|Accounts payable                                                                                                                                                        |  |                    | 70,957      |                  
|Managed accounts fees payable                                                                                                                                           |  |                    | 453,193     |                  
|Membership redemptions payable                                                                                                                                          |  |                    | 485,849     |                  
|Capital contributions received in advance of admission date                                                                                                             |  |                    | 2,133,368   |                  
|                                                                                                                                                                        |  |                    |             |                  
|TOTAL LIABILITIES                                                                                                                                                       |  |                    | 7,907,077   |                  
|                                                                                                                                                                        |  |                    |             |                  
|NET ASSETS-- Note C                                                                                                                                                     |  |                    | 93,515,691  |                  
|                                                                                                                                                                        |  |                    |             |                  
|TOTAL LIABILITIES AND NET ASSETS                                                                                                                                        |  | $                  | 101,422,768 |                  





See notes
to financial statements.

-1-


Table of Contents


Aspen Diversified
Fund LLC

Interim
Statements of Operations

(Unaudited)





|                                                                |  | For the three months ended September 30, 2011 |           | For the three months ended September 30, 2010 |  | For the nine months ended September 30, 2011 |           | For the nine months ended September 30, 2010
|--------------------------------------------------------------- |  | --------------------------------------------- | --------- | --------------------------------------------- |  | -------------------------------------------- | --------- | --------------------------------------------
|Investment income                                               |  |                                               |           |                                               |  |                                              |           |                                             
|                                                                |  |                                               |           |                                               |  |                                              |           |                                             
|Realized and unrealized gain (loss) on investments--Note B      |  |                                               |           |                                               |  |                                              |           |                                             
|Realized gain (loss) on investments                             |  | $                                             | (728,570  | )                                             |  | $                                            | 675,103   |                                             
|Unrealized gain (loss) on investments                           |  |                                               | 1,032,387 |                                               |  |                                              | 3,867,429 |                                             
|Net investment income (loss)                                    |  |                                               | 303,817   |                                               |  |                                              | 4,542,532 |                                             
|                                                                |  |                                               |           |                                               |  |                                              |           |                                             
|Operating expenses                                              |  |                                               |           |                                               |  |                                              |           |                                             
|Management and incentive fees                                   |  |                                               | 205,561   |                                               |  |                                              | 227,054   |                                             
|Administrative fees                                             |  |                                               | 77,796    |                                               |  |                                              | 89,691    |                                             
|Managed account fees                                            |  |                                               | 539,758   |                                               |  |                                              | 316,419   |                                             
|Trailing commissions                                            |  |                                               | 72,705    |                                               |  |                                              | 68,935    |                                             
|Miscellaneous operating expenses                                |  |                                               | 65,605    |                                               |  |                                              | 57,664    |                                             
|Total operating expenses                                        |  |                                               | 961,425   |                                               |  |                                              | 759,763   |                                             
|                                                                |  |                                               |           |                                               |  |                                              |           |                                             
|NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS |  | $                                             | (657,608  | )                                             |  | $                                            | 3,782,769 |                                             







See notes to financial statements.

-2-


Table of Contents


Aspen Diversified
Fund LLC

Interim
Statements of Changes in Net Assets

(Unaudited)



|                                        |  | For
    the nine months ended  September 30, 2011 |             | For the nine months ended September 30, 2010
|--------------------------------------- |  | ------------------------------------------------- | ----------- | --------------------------------------------
|Net assets at beginning of period       |  | $                                                 | 99,674,394  |                                             
|                                        |  |                                                   |             |                                             
|Capital contributions                   |  |                                                   | 17,095,966  |                                             
|                                        |  |                                                   |             |                                             
|Redemptions                             |  |                                                   | (17,448,289 | )                                           
|                                        |  |                                                   |             |                                             
|Net (decrease) increase from operations |  |                                                   | (5,806,380  | )                                           
|                                        |  |                                                   |             |                                             
|NET ASSETS AT END OF PERIOD             |  | $                                                 | 93,515,691  |                                             





See notes to financial statements.

-3-


Table of Contents


Aspen Diversified Fund LLC

Interim Statements of Cash Flows

(Unaudited)



|                                                                                                                                                     |  | For the nine months ended September 30, 2011 |             | For the ninemonths ended September 30, 2010
|---------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------- | ----------- | -------------------------------------------
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                                                                 |  |                                              |             |                                            
|                                                                                                                                                     |  |                                              |             |                                            
|Net increase (decrease) in net assets resulting from operations                                                                                      |  | $                                            | (5,806,380  | )                                          
|                                                                                                                                                     |  |                                              |             |                                            
|Adjustments to reconcile net increase (decrease) in net assets
    resulting from operations to net cash provided by (used in) operating activities: |  |                                              |             |                                            
|Purchase of net investments                                                                                                                          |  |                                              | (8,500,000  | )                                          
|Proceeds from disposition of investments                                                                                                             |  |                                              | 9,853,648   |                                            
|Realized loss (gain)                                                                                                                                 |  |                                              | 493,679     |                                            
|Unrealized loss (gain) on investments                                                                                                                |  |                                              | 2,432,946   |                                            
|Decrease (increase) in redemptions receivable                                                                                                        |  |                                              | 29,645,432  |                                            
|Decrease in other receivable                                                                                                                         |  |                                              | 250         |                                            
|Decrease in investments in transit                                                                                                                   |  |                                              | 16,600,000  |                                            
|Increase in commissions payable                                                                                                                      |  |                                              | 870         |                                            
|Increase in accrued operating expense                                                                                                                |  |                                              | 19,657      |                                            
|Increase in managed accounts fee payable                                                                                                             |  |                                              | 53,085      |                                            
|Decrease in management, incentive and          administrative fees payable                                                                           |  |                                              | (3,622      | )                                          
|                                                                                                                                                     |  |                                              |             |                                            
|NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                                                                                  |  |                                              | 44,789,566  |                                            
|                                                                                                                                                     |  |                                              |             |                                            
|CASH FLOWS FROM FINANCING ACTIVITIES                                                                                                                 |  |                                              |             |                                            
|                                                                                                                                                     |  |                                              |             |                                            
|Capital contributions received from members                                                                                                          |  |                                              | 18,707,944  |                                            
|Membership redemptions                                                                                                                               |  |                                              | (19,643,717 | )                                          
|                                                                                                                                                     |  |                                              |             |                                            
|NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES                                                                                                  |  |                                              | (935,773    | )                                          
|                                                                                                                                                     |  |                                              |             |                                            
|NET INCREASE IN CASH AND CASH EQUIVALENTS                                                                                                            |  |                                              | 43,853,793  |                                            
|                                                                                                                                                     |  |                                              |             |                                            
|Cash and cash equivalents at beginning of period                                                                                                     |  |                                              | 23,358,269  |                                            
|                                                                                                                                                     |  |                                              |             |                                            
|CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                                                                           |  | $                                            | 67,212,062  |                                            
|                                                                                                                                                     |  |                                              |             |                                            
|Cash paid for interest                                                                                                                               |  | $                                            | -0-         |                                            
|                                                                                                                                                     |  |                                              |             |                                            
|Cash paid for taxes                                                                                                                                  |  | $                                            | -0-         |                                            



SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:



At September 30, 2011 and 2010, the Fund had membership
redemptions payable of $485,849 and $1,819,985, and contributions received in advance of admission date of $2,133,368 and $7,885,600,
respectively.



See notes to financial statements.

-4-


Table of Contents


Aspen Diversified
Fund LLC

Notes to Financial Statements



NOTE A – DESCRIPTION OF BUSINESS AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Aspen Diversified Fund LLC
(the “Fund”) is a Delaware limited liability company that seeks to provide its investors with a rate of return
not generally correlated with traditional investments. The Fund offers units in multiple classes (Class A, B, C, D and E). As
of  September 30, 2011, no Class D units were outstanding. The Fund is a speculative commodity pool and is a
“fund-of-funds” which invests in other commodity pools known as “Investee Pools” as well as
separately managed accounts (together with Investee Pools, “Investment Funds”) managed by independent commodity
trading advisors (“CTAs”), or other portfolio managers (together “Portfolio Managers”).



The following accounting policies are presented
to assist the reader in understanding the Fund’s financial statements:



The accompanying unaudited financial statements
of the Fund have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”)
for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.  Accordingly,
they do not include all of the information and footnotes required by GAAP for complete financial statements.  In the
opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement
of the financial condition and operations of the Fund for the period presented have been included. The following is a description
of the more significant of those policies that the Fund follows in preparing its financial statements.



Valuation of Investments in Investment Funds:
The Fund values investments in investment funds for which there is no ready market at fair value as determined by Aspen Partners,
Ltd. (the “Managing Member”).



The valuation of Investment Funds purchased
or held by the Fund ordinarily are based on the value provided most recently to the Managing Member by each Investment Fund, which
the Managing Member believes to be reliable and which reflects the amount that the Fund might reasonably expect to receive for
the position if the Fund’s interest were redeemed at the time of valuation. The Managing Member’s reliance on or consideration
of the values of Investment Funds will be based on: (i) due diligence performed prior to making an investment in an Investment
Fund; (ii) ongoing due diligence and monitoring; (iii) periodic variation analysis and review by the Fund and/or the Fund’s
auditors; and (iv) any other information reasonably available from the market or other third parties.



In certain circumstances, the Managing Member
may determine that the value provided by an Investment Fund does not represent the fair value of the Fund’s interests in
the Investment Fund. This determination may be based upon, among other things: (i) the absence of transaction activity in interests
in a particular Investment Fund; (ii) the imposition by an Investment Fund of extraordinary restrictions on redemptions, including
limitations on the percentage of Investment Fund assets that may be redeemed during a certain time period; (iii) a determination
by the Managing Member that it would be impracticable to liquidate the Fund’s holdings in a particular Investment Fund; (iv)
a conclusion that the Investment Fund’s valuation was based on valuation procedures that do not provide for valuation of
underlying securities at market value or fair value as appropriate; (v) actual knowledge (if any) of the value of underlying portfolio
holdings; (vi) ongoing due diligence and monitoring that indicates that the valuation provided by the Investment Fund is not reliable,
such as significant variations between estimates and final values provided by an Investment Fund or lesser variations that occur
on a regular basis with respect to a specific Investment Fund; or (vii) available market data or other relevant circumstances,
including unusual or extraordinary circumstances.



In the event that an Investment Fund does not
report a month-end value to the Fund on a timely basis, the fair value of the Investment Fund will be based on the most recent
value reported by the Investment Fund, as well as any other relevant information available at the time the Fund values its portfolio.
In this unusual event, it may be appropriate to consider the factors set forth herein; provided, however, that the Managing Member
may not find such factors useful if, among other things, the Investment Fund in question is intended to have low correlation with
the overall markets or a particular market (in which case the Managing Member may not have information necessary to determine whether
a discount or premium would best reflect such significant events).

-5-


Table of Contents


Aspen Diversified Fund
LLC

Notes to Financial Statements





NOTE A – DESCRIPTION OF BUSINESS AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued



Where deemed appropriate by the Managing Member,
investments in Investment Funds or illiquid securities may be valued at cost. Cost is used only when the Managing Member determines
that cost best approximates the fair value of the particular position under consideration. For example, cost may not be appropriate
when the Fund is aware of similar sales to third parties at materially different prices or in other circumstances where cost may
not approximate fair value (which could include situations in which there have been no sales to third parties).



Valuation of Investments in Futures Contracts:
These instruments include open trade equity positions (futures contracts and currency forwards) that are actively traded on commodities
exchanges with quoted pricing for corroboration. Futures contracts and currency forwards are reported at fair value using Level
1 inputs, as described in “Investment Valuations” below. Investments in Futures contracts further include open trade
equity that are quoted prices for identical or similar assets that are not traded on active markets.



Investment Income: Investment income
includes realized and unrealized gains and losses from the Fund’s investments in Investment Funds, managed accounts and interest
income. Gains, losses, income earned and expenses incurred by the Investment Funds are allocated to the Fund based on the Fund’s
percentage ownership in each respective fund. Investment transactions are recorded on the trade date.



Income Taxes: No provision for
income taxes has been made in the accompanying financial statements as all items of the Fund’s income, loss, deduction
and credit are passed through to, and taken into account by, the Fund’s members on their own income tax returns. The
primary difference between accounting of income for financial statement purposes and accounting of income for tax purposes
relates to certain gains and losses that are not immediately realized for income tax purposes for the period ended September 30,
2011. There were no material differences between the cost basis of the Fund’s assets and liabilities for financial and
income tax reporting purposes.



The Fund has reviewed
all open tax years and major jurisdictions and concluded that there is no tax liability resulting from unrecognized tax benefits
relating to uncertain income tax positions taken or expected to be taken on the tax return for the most recent fiscal year-end.
The Fund is also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax
benefits will significantly change in the next 12 months.

Cash and Cash
Equivalents:  For purposes of reporting cash flows, the Fund considers demand deposits and all unrestricted,
highly liquid investments with original maturities of three months or less, which can be readily converted to cash on demand,
without penalty, to be cash equivalents. Beginning December 31, 2010 through December 31, 2012 all non-interest bearing
demand deposits are fully insured by the FDIC. The Fund has established managed accounts to be traded by certain foreign
exchange and CTAs on behalf of the Fund.  Cash in managed accounts is held by Newedge USA, LLC and R.J. O’Brien
& Associates, LLC to secure trading positions in currency and commodity futures. These funds are privately insured by
the Securities Investor Protection Corporation (“SIPC”) as such limits may be amended from time to time.

-6-


Table of Contents


Aspen Diversified Fund
LLC

Notes to Financial Statements





NOTE A – DESCRIPTION OF BUSINESS AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued



Aspen Diversified Fund LLC

Cash Held in Excess of Federally Insured
Limits



|                                    |  | Balance as of September 30, 2011 |            | Balance as of December 31, 2010
|----------------------------------- |  | -------------------------------- | ---------- | -------------------------------
|Cash in bank                        |  | $                                | 7,477,454  |                                
|Cash equivalent (T-bills)           |  |                                  | 1,399,970  |                                
|Cash held - managed accounts        |  |                                  | 58,334,838 |                                
|Total bank balance                  |  |                                  | 67,212,262 |                                
|FDIC insurance                      |  |                                  | (7,477,454 | )                              
|SIPC insurance                      |  |                                  | (500,000   | )                              
|Uninsured, uncollateralized balance |  | $                                | 59,234,808 |                                



Estimates:
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure
of contingent 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 those estimates.

Investment Valuations: In accordance
with generally accepted accounting principles in the USA (“GAAP”), fair value is defined as the price that the Fund
would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement
date. GAAP also establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based
upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly
to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions
market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund.
Unobservable inputs reflect the Fund’s own assumptions about the assumptions that market participants would use in pricing
the asset or liability developed based on the best information available under the circumstances. Each investment is assigned a
level based upon the observability of the inputs which are significant to the overall valuation.

The three-tier hierarchy of inputs is
summarized below.

Level 1 Inputs –Unadjusted
quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.

Level 2 Inputs –Observable
inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.
These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest
rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

Level 3 Inputs –Unobservable
inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund’s own
assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best
information available.

The inputs used to measure fair
value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the
fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level
input that is significant to the fair value measurement in its entirety. All assets and liabilities are measured at fair
value on a recurring basis by level within the fair value hierarchy as reported on the Statement of Assets
and Liabilities.

-7-


Table of Contents


Aspen Diversified Fund
LLC

Notes to Financial Statements





NOTE
B –INVESTMENTS IN INVESTMENT FUNDS & FUTURES CONTRACTS



At September 30, 2011 and
during the nine months then ended, investments and net realized and unrealized gains (losses) on Investment Funds and
futures contracts consisted of the following:



|Investment Funds and Futures Contracts |  | Gains/(Losses) for the nine months ended September 30, 2011 |            | Cost Basis as of September 30, 2011 |  | Fair Value as of September 30, 2011 |            | % of Fund’s Net Assets
|-------------------------------------- |  | ----------------------------------------------------------- | ---------- | ----------------------------------- |  | ----------------------------------- | ---------- | ----------------------
|Investment funds:                      |  |                                                             |            |                                     |  |                                     |            |                       
|Aspen Commodity Long Short Fund, LLC   |  |                                                             | (1,012,998 | )                                   |  |                                     | 16,538,203 |                       
|Boronia Diversified Fund (U.S.), LP †  |  |                                                             | 3,801      |                                     |  |                                     | -0-        |                       
|Crabel Fund, LP                        |  |                                                             | 294,441    |                                     |  |                                     | 8,000,000  |                       
|Discus Feeder Ltd. †                   |  |                                                             | 2,722      |                                     |  |                                     | -0-        |                       
|Graham Global Investments Fund Ltd. †  |  |                                                             | 22,283     |                                     |  |                                     | -0-        |                       
|Man-AHL Diversified Fund LP †          |  |                                                             | (198       | )                                   |  |                                     | -0-        |                       
|Robeco Transtrend Diversified Fund LLC |  |                                                             | (533,282   | )                                   |  |                                     | 2,436,936  |                       
|                                       |  |                                                             |            |                                     |  |                                     |            |                       
|Total investment funds                 |  |                                                             | (1,223,231 | )                                   |  |                                     | 26,975,139 |                       
|                                       |  |                                                             |            |                                     |  |                                     |            |                       
|Futures contracts, net                 |  |                                                             | (1,703,394 | )                                   |  |                                     | -0-        |                       
|                                       |  |                                                             |            |                                     |  |                                     |            |                       
|Total                                  |  | $                                                           | (2,926,625 | )                                   |  | $                                   | 26,975,139 |                       
|                                       |  |                                                             |            |                                     |  |                                     |            |                       
|Other assets, less liabilities         |  |                                                             |            |                                     |  |                                     |            |                       
|                                       |  |                                                             |            |                                     |  |                                     |            |                       
|Net assets                             |  |                                                             |            |                                     |  |                                     |            |                       



† Fund Shares were fully disposed of during 2010.

-8-


Table of Contents


Aspen Diversified Fund
LLC

Notes to Financial Statements





NOTE
B –INVESTMENTS IN INVESTMENT FUNDS & FUTURES CONTRACTS
– Continued



At September 30, 2011, the
fair value measurements were as follows:



|Fair Value Measurement                |  | Quoted Prices in Active Markets (Level 1) |           | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
|------------------------------------- |  | ----------------------------------------- | --------- | --------------------------------------------- |  | -----------------------------------------
|Investments in investment funds       |  | $                                         | -0-       |                                               |  | $                                        
|Investments in Futures contracts, net |  |                                           | 1,613,257 |                                               |  |                                          
|Total                                 |  | $                                         | 1,613,257 |                                               |  | $                                        



At
September 30, 2011, the Fund’s investments in futures contracts and net unrealized gains by type, were as
follows:



|Futures Contract Type       |  | Unrealized Gains
|--------------------------- |  | ----------------
|Foreign exchange contracts  |  | $               
|Commodity futures contracts |  |                 
|Total                       |  | $               

-9-


Table of Contents


Aspen Diversified Fund
LLC

Notes to Financial Statements





NOTE
B –INVESTMENTS IN INVESTMENT FUNDS & FUTURES CONTRACTS
– Continued



At December 31, 2010 and
during the nine months ended September 30, 2010, investments and net realized and unrealized gains (losses) on Investment Funds and
futures contracts consisted of the following:



|Investment Funds and Futures Contracts            |  | Gains/(Losses) for the nine months ended September 30, 2010 |           | Cost Basis as of December 31, 2010 |  | Fair Value as of December 31, 2010 |            | % of Fund’s Net Assets
|------------------------------------------------- |  | ----------------------------------------------------------- | --------- | ---------------------------------- |  | ---------------------------------- | ---------- | ----------------------
|Investment funds:                                 |  |                                                             |           |                                    |  |                                    |            |                       
|Abraham Commodity Fund LP ‡                       |  | $                                                           | (189,827  | )                                  |  | $                                  | -0-        |                       
|AlphaMosaic (US) LLC (Altis – Cell No. 151) ‡     |  |                                                             | (55,977   | )                                  |  |                                    | -0-        |                       
|AlphaMosaic (US) LLC (Krom River – Cell No. 42) ‡ |  |                                                             | 53,450    |                                    |  |                                    | -0-        |                       
|APM Hedged Global Commodity Fund, LDC ‡           |  |                                                             | (116,186  | )                                  |  |                                    | -0-        |                       
|Aspen Commodity Long Short Fund, LLC              |  |                                                             | (20,839   | )                                  |  |                                    | 20,275,790 |                       
|Boronia Diversified Fund (U.S.), LP †             |  |                                                             | 374,983   |                                    |  |                                    | -0-        |                       
|Coolmore Partners LP ‡                            |  |                                                             | (29,505   | )                                  |  |                                    | -0-        |                       
|Discus Feeder Ltd. †                              |  |                                                             | (228,680  | )                                  |  |                                    | -0-        |                       
|Galena Fund Ltd. ‡                                |  |                                                             | 70,538    |                                    |  |                                    | -0-        |                       
|Global Commodity Systematic LP ‡                  |  |                                                             | (59,413   | )                                  |  |                                    | -0-        |                       
|Graham Global Investments Fund, Ltd. †            |  |                                                             | 569,099   |                                    |  |                                    | -0-        |                       
|LD Commodities Alpha Fund LP ‡                    |  |                                                             | 11,554    |                                    |  |                                    | -0-        |                       
|Man-AHL Diversified II LP †                       |  |                                                             | 808,029   |                                    |  |                                    | -0-        |                       
|Millburn Commodity Fund LP ‡                      |  |                                                             | 71,837    |                                    |  |                                    | -0-        |                       
|MMT Energy Fund ‡                                 |  |                                                             | (93,718   | )                                  |  |                                    | -0-        |                       
|Robeco Transtrend Diversified Fund LLC            |  |                                                             | 762,992   |                                    |  |                                    | 8,546,675  |                       
|Sparta Commodities US Feeder Fund LLC ‡           |  |                                                             | (299,680  | )                                  |  |                                    | -0-        |                       
|Winton Futures Fund †                             |  |                                                             | 421,977   |                                    |  |                                    | -0-        |                       
|                                                  |  |                                                             |           |                                    |  |                                    |            |                       
|Total investment funds                            |  | $                                                           | 2,050,634 |                                    |  |                                    | 28,822,465 |                       
|                                                  |  |                                                             |           |                                    |  |                                    |            |                       
|Futures contracts, net                            |  |                                                             | 2,002,461 |                                    |  |                                    | -0-        |                       
|                                                  |  |                                                             |           |                                    |  |                                    |            |                       
|TOTAL                                             |  | $                                                           | 4,053,095 |                                    |  | $                                  | 28,822,465 |                       
|                                                  |  |                                                             |           |                                    |  |                                    |            |                       
|Other assets, less liabilities                    |  |                                                             |           |                                    |  |                                    |            |                       
|                                                  |  |                                                             |           |                                    |  |                                    |            |                       
|Net assets                                        |  |                                                             |           |                                    |  |                                    |            |                       



† Fund shares were fully disposed of during 2010.

‡ Fund shares were transferred to Aspen Commodity Long Short Fund, LLC as of May 1, 2010.

-10-


Table of Contents


Aspen Diversified Fund
LLC

Notes to Financial Statements





NOTE
B –INVESTMENTS IN INVESTMENT FUNDS & FUTURES CONTRACTS
– Continued



At December 31, 2010, the
fair value measurements were as follows:



|Description                           |  | Quoted Prices in Active Markets (Level 1) |           | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
|------------------------------------- |  | ----------------------------------------- | --------- | --------------------------------------------- |  | -----------------------------------------
|Investments in investment funds       |  | $                                         | -0-       |                                               |  | $                                        
|Investments in Futures contracts, net |  |                                           | 1,593,824 |                                               |  |                                          
|Total                                 |  | $                                         | 1,593,824 |                                               |  | $                                        



The investment objectives
and redemption policies for the Investment Funds and managed accounts in which the Fund was invested as of September 30, 2011 were
as follows:



|Investment Funds & Managed Accounts                                       |  | Investment Objective      |  | Redemption Permitted
|------------------------------------------------------------------------- |  | ------------------------- |  | --------------------
|ADF Trading Company I, LLC (Welton Investment Corporation)                |  | Systematic Trend Follower |  | Daily               
|ADF Trading Company IV, LLC (Blackwater Capital Management, LLC)          |  | Systematic Trend Follower |  | Daily               
|ADF Trading Company VI, LLC (Abraham Trading Company)                     |  | Systematic Trend Follower |  | Daily               
|ADF Trading Company VII, LLC (Aspen Partners, Ltd.)                       |  | Systematic Trend Follower |  | Daily               
|ADF Trading Company VIII, LLC (LBR Group, Inc.)                           |  | Discretionary Short-Term  |  | Daily               
|ADF Trading Company IX, LLC (Eckhardt Trading Company)                    |  | Systematic Trend Follower |  | Daily               
|ADF Trading Company X, LLC (Saxon Investment Corporation)                 |  | Systematic Trend Follower |  | Daily               
|ADF Trading Company XI, LLC (Rotella Investment Corporation)              |  | Systematic Trend Follower |  | Daily               
|ADF Trading Company XII, LLC (Tactical Investment Management Corporation) |  | Systematic Trend Follower |  | Daily               
|Aspen Commodity Long/Short Fund, LLC                                      |  | Commodity Specialist      |  | Monthly             
|Crabel Fund, LP                                                           |  | Systematic Short Term     |  | Monthly             
|Robeco Transtrend Diversified Fund LLC                                    |  | Systematic Trend Follower |  | Monthly             



The Investment Funds engage primarily in speculative
trading of U.S. and foreign futures contracts and options on U.S. and foreign futures contracts, and foreign currency transactions.
The Investment Funds are exposed to both market risks – the risk arising from changes in the market value of the contracts
and credit risk – the risk of failure by another party to perform according to the terms of a contract. Furthermore, certain
of the Investment Funds include restrictions as to the minimum amount of time that an investor must remain invested in the Investment
Fund.



The Fund is required to disclose any
investments that exceed 5% of the Fund’s net assets at year end.  Information is not available to determine
if an individual investment held by any of the Investment Funds exceeded 5% of the Fund’s net assets at September 30, 2011 and
December 31, 2010.



At September 30, 2011 and December 31, 2010,
the Fund had remitted $-0- and $16,600,000, respectively, to Investment Funds that was not credited to the Fund’s
respective capital accounts until the first day of the following month.  These amounts have been recorded as
investments in transit.

-11-


Table of Contents


Aspen Diversified Fund
LLC

Notes to Financial Statements





NOTE C – NET ASSETS



The Fund maintains separate capital accounts
for its members.  Net profits and net losses, and expenses attributable to each class are allocated to the members holding
units of each class in proportion to their respective unit ownership percentages.



Each member may withdraw all or any portion
of his/her capital account as of the end of each calendar month, provided that the withdrawing member gives at least ten days prior
written notice.



The Fund admits members only on the first
day of each month.  At September 30, 2011 and December 31, 2010, the Fund had received capital contributions of $2,133,368
and $521,391, respectively that were credited to the members’ capital accounts on the first day of the following month
or in a future admission period.  These amounts have been recorded as capital contributions received in advance of
admission date.



The Fund may be dissolved at any time by the
determination of the Managing Member to dissolve and liquidate the Fund.



NOTE D – RELATED PARTY TRANSACTIONS



The Fund pays various monthly fees to the Managing
Member, Aspen Partners, Ltd., which vary by unit class.  The annual fee percentages by unit class are as follows:



|                    |  | Class A Units |        | Class B Units |  | Class C Units |        | Class D Units |  | Class E Units
|------------------- |  | ------------- | ------ | ------------- |  | ------------- | ------ | ------------- |  | -------------
|Management fees     |  |               | 1.00%  |               |  |               | 1.00%  |               |  |              
|Incentive fees      |  |               | 10.00% |               |  |               | 10.00% |               |  |              
|Administrative fees |  |               | 0.35%  |               |  |               | 0.35%  |               |  |              



On December 1, 2010 the administrative fee
for Class C increased from 0.05% to 0.10%. In addition, the Fund pays its operating expenses and custody fees. The operating expenses
will be allocated pro-rata to each class of units. The custody fees will be paid by each class as incurred.



The incentive fees are equal to the
applicable percentage of the new investment profits earned monthly by class over the high water mark (i.e., the
highest level of cumulative trading profits as of any previous calendar month-end with respect to each
CTA).  During the nine months ended September 30, 2011 and 2010, the Fund recognized management and incentive
fee expenses of $667,815 and $680,876, respectively.



During the nine months ended
September 30, 2011 and 2010, the Fund recognized administrative fee expenses of $251,317 and $269,655, respectively.



At September 30, 2011 and December 31, 2010,
accounts payable consisted of $98,599 and $102,221, respectively, related to management fees, incentive fees and administrative fees.

-12-


Table of Contents


Aspen Diversified Fund
LLC

Notes to Financial Statements





NOTE E – FINANCIAL HIGHLIGHTS



Financial highlights were as follows for the
 nine months ended September 30, 2011:



|Per unit activity:                             |  | Class A Units |        | Class B Units |  | Class C Units |        | Class D Units † |  | Class E Units
|---------------------------------------------- |  | ------------- | ------ | ------------- |  | ------------- | ------ | --------------- |  | -------------
|Beginning net unit value at December 31, 2010  |  | $             | 115.78 |               |  | $             | 131.86 |                 |  | $            
|                                               |  |               |        |               |  |               |        |                 |  |              
|Net loss  from investments in investment funds |  |               | (3.97  | )             |  |               | (4.57  | )               |  |              
|Interest income                                |  |               | 0.00   |               |  |               | 0.00   |                 |  |              
|Total investment loss                          |  |               | (3.97  | )             |  |               | (4.57  | )               |  |              
|                                               |  |               |        |               |  |               |        |                 |  |              
|Management & incentive fees                    |  |               | (0.85  | )             |  |               | (0.98  | )               |  |              
|Administrative fees                            |  |               | (0.30  | )             |  |               | (0.34  | )               |  |              
|Other expenses                                 |  |               | (3.66  | )             |  |               | (2.27  | )               |  |              
|Total operating expenses                       |  |               | (4.81  | )             |  |               | (3.59  | )               |  |              
|                                               |  |               |        |               |  |               |        |                 |  |              
|Ending unit value at September 30, 2011        |  | $             | 107.00 |               |  | $             | 123.70 |                 |  | $            



† Class D units had not yet been issued as of September 30, 2011.



These amounts were calculated based on the
weighted average of monthly units outstanding by class.



|                    | Class A Units |        | Class B Units |  | Class C Units |        | Class D Units |  | Class E Units
|------------------- | ------------- | ------ | ------------- |  | ------------- | ------ | ------------- |  | -------------
|Net investment loss |               | (3.98% | )             |  |               | (2.82% | )             |  |              
|Operating expenses  |               | (4.20% | )             |  |               | (2.77% | )             |  |              
|Net loss            |               | (8.17% | )             |  |               | (5.60% | )             |  |              
|Total return        |               | (7.59% | )             |  |               | (6.19% | )             |  |              



The portfolio turnover rate for the nine months ended September 30,
2011 was 30.95%.

-13-


Table of Contents


Aspen Diversified Fund
LLC

Notes to Financial Statements





NOTE E – FINANCIAL HIGHLIGHTS –
Continued



Financial highlights were as follows for the
 nine months ended September 30, 2010:



|Per unit activity:                              |  | Class A Units |        | Class B Units |  | Class C Units |        | Class D Units † |  | Class E Units
|----------------------------------------------- |  | ------------- | ------ | ------------- |  | ------------- | ------ | --------------- |  | -------------
|Beginning net unit value at December 31, 2009   |  | $             | 109.66 |               |  | $             | 122.50 |                 |  | $            
|                                                |  |               |        |               |  |               |        |                 |  |              
|Net income from investments in investment funds |  |               | 4.15   |               |  |               | 4.70   |                 |  |              
|Interest income                                 |  |               | 0.00   |               |  |               | 0.00   |                 |  |              
|Total investment income                         |  |               | 4.15   |               |  |               | 4.70   |                 |  |              
|                                                |  |               |        |               |  |               |        |                 |  |              
|Management & incentive fees                     |  |               | (0.81  | )             |  |               | (0.91  | )               |  |              
|Administrative fees                             |  |               | (0.28  | )             |  |               | (0.32  | )               |  |              
|Other expenses                                  |  |               | (2.33  | )             |  |               | (0.85  | )               |  |              
|Total operating expenses                        |  |               | (3.42  | )             |  |               | (2.08  | )               |  |              
|                                                |  |               |        |               |  |               |        |                 |  |              
|Ending unit value at September 31, 2010         |  | $             | 110.39 |               |  | $             | 125.12 |                 |  | $            



† Class D Units had not yet been issued as of September 30, 2010.



These amounts were calculated based on the
weighted average of monthly units outstanding by class.



|                      | Class A Units |        | Class B Units |  | Class C Units |        | Class D Units |  | Class E Units
|--------------------- | ------------- | ------ | ------------- |  | ------------- | ------ | ------------- |  | -------------
|Net investment income |               | 5.42%  |               |  |               | 3.72%  |               |  |              
|Operating expenses    |               | (3.73% | )             |  |               | (1.71% | )             |  |              
|Net income            |               | 2.05%  |               |  |               | 2.02%  |               |  |              
|Total return          |               | 0.66%  |               |  |               | 2.14%  |               |  |              



The portfolio turnover rate for the nine months ended September 30,
2010 was 54.96%.





NOTE F – INVESTMENTS IN
DERIVATIVES CONTRACTS



Investments in derivative contracts are subject
to additional risks that can result in a loss of the investment. The Fund’s activities and exposure are classified by the
following underlying risks: interest rate, credit foreign currency exchange rate, commodity price, and equity price risks. In addition,
the Fund is also subject to counterparty risk should it’s counterparties fail to meet the terms of their contracts.



The Fund’s derivative activity
is stated at fair value. Changes in unrealized appreciation or depreciation of the investments are recognized as unrealized gains
and losses in the statement of operations.

-14-


Table of Contents


Aspen Diversified Fund
LLC

Notes to Financial Statements





NOTE F – INVESTMENTS IN
DERIVATIVES CONTRACTS- Continued



Forward Contracts



Forward currency and commodities
transactions are contracts for delayed delivery of specific currencies and commodities in which the seller agrees to make delivery
at a specified date. The Fund enters into these contracts as speculative investments in the change in value of foreign currencies.
Risks associated with foreign currency and commodities contracts include the inability
of counterparties to meet the terms of their contracts as well as movements in fair value and exchange rates. Changes in unrealized
appreciation or depreciation of the investments are recognized as unrealized gains and losses in the statement of operations.



Futures Contracts



A futures contract represents a
commitment for the future purchase or sale of an asset at a specified price on a specified date. The fund may use futures contracts
to gain exposure to, or hedge against, changes in the value of equities and commodities, interest rates or foreign currencies.



Futures contracts provide reduced
counterparty risk to the Fund since futures are exchange-traded. The purchase and sale of futures contracts requires margin deposits
with a Futures Commission Merchant. (“FCM”) Payments are made or received by the Fund each day, depending on the fluctuations
in the contract value, and are recorded as unrealized gains or losses on the Fund’s financial statements.



The volume of the Fund’s derivative
activities based on their notional amounts and number of contracts as of September 30, 2011 and December 31, 2010:



|September 30, 2011             |  | Long Exposure |                  | Short Exposure
|------------------------------ |  | ------------- | ---------------- | --------------
|Primary Underlying Risk        |  |               | Notional Amounts |               
|Foreign currency exchange rate |  |               |                  |               
|Forward contracts              |  | $             | 5,663,000        |               
|Commodity price                |  |               |                  |               
|Futures contracts              |  |               | 264,689,000      |               
|Total                          |  | $             | 270,352,000      |               



|December 31, 2010              |  | Long Exposure |                  | Short Exposure
|------------------------------ |  | ------------- | ---------------- | --------------
|Primary Underlying Risk        |  |               | Notional Amounts |               
|Foreign currency exchange rate |  |               |                  |               
|Forward contracts              |  | $             | 26,660,000       |               
|Commodity price                |  |               |                  |               
|Futures contracts              |  |               | 131,702,000      |               
|Total                          |  | $             | 158,362,000      |               

-15-


Table of Contents


Aspen Diversified Fund
LLC

Notes to Financial Statements





NOTE F – INVESTMENTS IN
DERIVATIVES CONTRACTS- Continued



The fair value amounts of derivative
instruments in the statement of financial condition as derivative contracts, categorized by primary underlying risk for the period
ended September 30, 2011 and year ended December 31, 2010:



|                                        |  | September 30, 2011 |           | December 31, 2010     
|--------------------------------------- |  | ------------------ | --------- | ----------------------
|Primary underlying risk                 |  | Derivative Assets  |           | Derivative Liabilities
|Foreign currency exchange rate          |  |                    |           |                       
|Forward contracts                       |  | $                  | 411,079   |                       
|Commodity price                         |  |                    |           |                       
|Futures contracts                       |  |                    | 5,842,617 |                       
|                                        |  |                    |           |                       
|Gross derivative assets and liabilities |  |                    | 6,253,696 |                       
|                                        |  |                    |           |                       
|Less: Master netting arrangements       |  |                    | -0-       |                       
|Less: Cash collateral applied           |  |                    | -0-       |                       
|                                        |  |                    |           |                       
|Net derivative assets and liabilities   |  | $                  | 6,253,696 |                       



The net gain and loss
amounts included in the statement of operations as net gain from derivative contracts, categorized by underlying risk for the
three and nine months ended September 30, 2011 and 2010:

|Primary underlying risk               |  | For the three months ended September 30, 2011 |         | For the three months ended September 30, 2010 |  | For the nine months ended September 30, 2011 |           | For the nine months ended September 30, 2010
|------------------------------------- |  | --------------------------------------------- | ------- | --------------------------------------------- |  | -------------------------------------------- | --------- | --------------------------------------------
|Foreign currency exchange rate        |  |                                               |         |                                               |  |                                              |           |                                             
|Forward contracts                     |  | $                                             | (44,771 | )                                             |  | $                                            | (72,913   | )                                           
|Commodity price                       |  |                                               |         |                                               |  |                                              |           |                                             
|Futures contracts                     |  |                                               | 918,959 |                                               |  |                                              | 1,826,464 |                                             
|                                      |  |                                               |         |                                               |  |                                              |           |                                             
|Net derivative assets and liabilities |  | $                                             | 874,188 |                                               |  | $                                            | 1,753,551 |                                             



For the nine months ended September 30, 2011 and 2010, futures contracts per
Note B are presented net of interest income and expense, and commission expense for a net decrease of $330,701 and $185,967 respectively.

-16-


Table of Contents


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



Liquidity.There are no known
demands, commitments, events or uncertainties that will result in or are reasonably likely to result in the Fund’s liquidity
increasing or decreasing in any material way.  The Investment Funds in which the Fund invests have varying liquidity
opportunities ranging from daily to annually.  The Fund maintains a limited cash position, but retains sufficient cash
to cover current and anticipated liabilities including withdrawal requests by members.  Redemption requests could be
delayed due to liquidity constraints of Investee Pools. Additionally, no material deficiencies in liquidity were identified and
there were no material unused sources of liquid assets.



Capital Resources.There
are no commitments for capital expenditures as of the end of the latest fiscal period.  Capital invested in the Fund
has increased as investors continue to purchase interests in the Fund.  The Fund anticipates offering interests on a
continuing basis. Each additional investment received increases the total capital available for investment. There are no known
material trends, favorable or unfavorable, that would affect, nor any expected material changes to, the Fund’s capital resource
arrangements at the present time.



Results of Operations.The
Fund is a collective investment pool.  Performance
of the Fund may vary considerably from one period to the next.  Results may also vary considerably when compared to results
from the same period in previous years.



The collective performance results of the
Investment Funds were negative during the nine months ended September 30, 2011.  The Fund’s performance coupled with ongoing
operating expenses resulted in an overall negative return for the nine months ended September 30, 2011 of (6.21%).  The returns
per class were as follows: (7.59%) for Class A units; (6.19%) for Class B units; (5.81%) for Class C units; and (5.48%) for
Class E units.  Comparative performance for the nine months ended September 30, 2010 resulted in returns per class as follows:
0.66% for Class A units; 2.14% for Class B units; 2.60% for Class C units; and 2.88% for Class E units.  Class A units were first
issued August 1, 2006; Class B units were first issued August 1, 2005; Class C units were first issued on April 1, 2008; and Class
E units were first issued July 1, 2005.  Differences in these results may be attributable to general market conditions, timing of
investments, and the differences in fee structures by class.



The Fund, like most managed futures
strategies, was profitable for the year as of April 30, 2011 due to less volatile trends in the market and prominent gains
achieved in the currency, precious metals and energy sectors.  Performance results in the month of May reversed previous
gains and put the Fund at a loss for the year as volatility across many financial markets caused significant losses for
most managed futures strategies.  Trend reversals resulted in significant losses in the same three sectors representing
the primary drivers of previous gains of the Fund - currencies, precious metals and energy.  Extremely rare occurrences –
such as losses in both equity markets and managed futures markets – continued through September 2011, signaling a lack of
consensus surrounding the outlook of continued economic growth. Such market inconsistency prevents medium- and
long-term investment strategies from identifying consistent market trends in which to profit.  The Fund's performance
is not inconsistent with the managed futures markets as a whole.



Off-Balance Sheet Arrangements.The
Fund does not have any off-balance sheet arrangements (as defined in Regulation S-K 303(a)(4)(ii)) that have or are reasonably
likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results
of operations, liquidity, capital expenditures or capital resources that are material to investors.



Portfolio Changes.In addition
to routine allocations and rebalancing of assets as determined by the Fund’s Investment Committee, the Fund terminated the Trading
Advisory Agreement between ADF Trading Company II, LLC and Systematic Alpha Asset Management (USA), LLC (previously known as Thor
Asset Management (USA), LLC) entered into on December 1, 2008 and filed as Exhibit 10.2 of the Fund's Form 10-Q filed on May 15,
2009.  Assets previously invested under the Trading Advisory Agreement were re-allocated among other investments held by the Fund.

-17-


Table of Contents


Item 3.  Quantitative and Qualitative
Disclosures about Market Risk.



The Fund is a speculative commodity pool and
is a “fund-of-funds” which invests in Investment Funds managed by independent CTAs, or other Portfolio Managers.  The
market sensitive instruments held by the Fund are acquired for speculative trading purposes, and all or a substantial amount of
the Fund’s assets are subject to the risk of trading loss.  Unlike an operating company, the risk of market sensitive
instruments is integral, not incidental, to the Fund’s main line of business.



Market movements result in frequent changes
in the fair market value of the Fund’s holdings and, consequently, in its earnings and cash flow.  The Fund’s
market risk is directly influenced by the market risk inherent in the trading of market sensitive instruments traded by Investment
Funds.  Holdings by Investment Funds are influenced by a wide variety of factors, including the level and volatility
of exchange rates, interest rates, equity price levels, the market value of financial instruments and contracts, the diversification
of the Investment Funds’ positions, and the liquidity of the markets in which they trade.



Investment Funds in which the Fund invests
rapidly acquire and liquidate 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 Fund’s past performance
is not indicative of its future results.  See “Item 1A. Risk Factors” of the Fund’s Form 10-K,
filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2011, for a discussion of trading and non-trading
risk factors applicable to the Fund and Investee Pools.



“Value at Risk”
is a measure of the maximum amount which the Fund could reasonably be expected to lose in a given market sector. The exposure by
Investment Funds to various market sectors is not transparent to the Fund and therefore, it is not possible to calculate the Value
at Risk in any particular market sector. The Value at Risk exposure of the Fund with any given Investment Fund is the amount of
capital invested with that Investment Fund, as set forth below.



|Fair Value of Market Risk Sensitive Instruments                      |  | Fair Value as of September 30, 2011 |            | % of Total
|-------------------------------------------------------------------- |  | ----------------------------------- | ---------- | ----------
|ADF Trading Company I, LLC (Welton Investment Corporation) †         |  | $                                   | 7,446,520  |           
|ADF Trading Company IV, LLC (Blackwater Capital Management LLC) †    |  |                                     | 10,326,717 |           
|ADF Trading Company V, LLC (Abraham Diversified Fund) †              |  |                                     | 9,159,644  |           
|ADF Trading Company VII, LLC (Aspen Partners, Ltd.) †                |  |                                     | 6,101,938  |           
|ADF Trading Company VIII, LLC (LBR Group Inc.) †                     |  |                                     | 4,569,640  |           
|ADF Trading Company IX, LLC (Eckhardt Trading Company) †             |  |                                     | 7,625,585  |           
|ADF Trading Company X, LLC (Saxon Investment Corporation) †          |  |                                     | 7,741,147  |           
|ADF Trading Company XI, LLC (Rotella Capital Management) †           |  |                                     | 7,896,839  |           
|ADF Trading Company XII, LLC (Tactical Investment Management Corp) † |  |                                     | 6,780,036  |           
|Aspen Commodity Long Short Fund, LLC                                 |  |                                     | 16,904,072 |           
|Crabel Fund LP                                                       |  |                                     | 8,294,441  |           
|Robeco Transtrend Diversified Fund LLC                               |  |                                     | 2,550,056  |           
|                                                                     |  | $                                   | 95,396,635 |           



† ADF Trading Company I, LLC,
ADF Trading Company IV, LLC, ADF Trading Company V, LLC, ADF Trading Company VII, LLC, ADF Trading Company VIII, LLC,
ADF Trading Company IX, LLC, ADF Trading Company X, LLC, ADF Trading Company XI, LLC, and ADF Trading Company XII, LLC (each a “Trading Company” and
together “Trading Companies”) are limited liability companies established by the Fund’s Managing Member through
which assets are allocated to managed accounts traded by Portfolio Managers as indicated. The fair value of these accounts includes
cash on deposit with the Fund’s clearing broker and the fair value of futures contracts held in each Trading Company’s
trading account.

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The quantitative disclosures above regarding
the Fund’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 21E
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). 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.



Item 4.  Controls and Procedures.



Evaluation of Disclosure Controls and
Procedures.The Managing Partner and the Chief Financial Officer of the Fund’s Managing Member have
evaluated the effectiveness of the design and operation of the Fund’s disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2011.  These controls and procedures are
designed to provide reasonable assurance that the Fund records, processes and summarizes the information required to be
disclosed in the reports submitted to the SEC in a timely and effective manner. Based upon this evaluation the Managing
Partner and Chief Financial Officer concluded that, as of September 30, 2011, the Fund’s disclosure controls were
effective.



Changes in Internal Control over
Financial Reporting.There have been no changes in the Fund’s internal control over financial reporting
in the three months ended September 30, 2011 that have materially affected or are reasonably likely to materially affect the
Fund’s internal control over financial reporting.



Limitations on the Effectiveness of Controls.
Any control system, no matter how well designed and operated, can provide reasonable (not absolute) assurance that its objectives
will be met. Furthermore, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud,
if any, have been detected.

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Table of Contents


PART II – OTHER INFORMATION



Item 1.  Legal Proceedings.



The Fund’s Managing Member is not aware
of any material legal proceedings threatened or pending to which the Fund is a party or of which any of the Fund’s property
is subject.



Item 1A.  Risk Factors.



There have been no material changes from the
risk factors previously disclosed in response to Item 1A to Part 1 of the Fund’s Form 10-K for the year ended December 31,
2010.



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



|(a) |  | From July 1, 2011 through September 30, 2011, a total of 83,827 units were sold for
                                                                            the aggregate net subscription amount of $9,560,953.  All sales were made only to “accredited
                                                                            investors” and to a limited number of investors who do not qualify as “accredited investors” in
                                                                            accordance with Rule 506 under Regulation D of the Securities Act of 1933, as amended (the “Securities
                                                                            Act”).  Details of the sale of these interests are as follows:
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Date of Sale |  | Class of Units |         | Subscription Amount |  | Number of Units |           | Price Per Unit
|------------ |  | -------------- | ------- | ------------------- |  | --------------- | --------- | --------------
|07/01/2011   |  |                | Class A |                     |  | $               | 95,497    |               
|07/01/2011   |  |                | Class B |                     |  |                 | 165,826   |               
|07/01/2011   |  |                | Class E |                     |  |                 | 137,000   |               
|08/01/2011   |  |                | Class A |                     |  |                 | 125,000   |               
|08/01/2011   |  |                | Class B |                     |  |                 | 330,391   |               
|08/01/2011   |  |                | Class E |                     |  |                 | 30,000    |               
|09/01/2011   |  |                | Class A |                     |  |                 | 130,000   |               
|09/01/2011   |  |                | Class B |                     |  |                 | 5,602,239 |               
|09/01/2011   |  |                | Class C |                     |  |                 | 2,945,000 |               
|             |  |                |         |                     |  | $               | 9,560,953 |               



























|(b) |  | Underwriters
and Other Purchasers.
|--- |  | ----------------------------------



| |  | The units were not publicly offered. Units were sold only to “accredited
                                                                            investors” and to a limited number of investors who do not qualify as “accredited investors” in accordance
                                                                            with Rule 506 under Regulation D of the Securities Act.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) |  | Consideration.
|--- |  | --------------



| |  | All units of the Fund were sold for cash as indicated under the heading
                                                                            “Subscription Amount” in the table above.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(d) |  | Exemption
from Registration Claimed.
|--- |  | ------------------------------------



| |  | The units were sold pursuant to Rule 506 of Regulation D under the Securities Act
                                                                            and the sales were exempt from registration under the Securities Act.
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(e) |  | Terms
of Conversion or Exercise.
|--- |  | --------------------------------



| |  | Not applicable.
| |  | ---------------



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|(f) |  | Use
of Proceeds.
|--- |  | ----------------



| |  | The Fund registered the units on a Registration Statement on Form 10
                                                                            (Registration No. 000-52544), which was declared effective by the SEC on August 6, 2007. The proceeds from the sale of units
                                                                            will be utilized by the Fund to invest in Investee Pools which engage in trading of futures, forward contracts, commodity
                                                                            interests and option contracts on the foregoing.  The Fund’s Investee Pools and Portfolio Managers may trade
                                                                            in as many as 30 to over 50 markets in the six  following sectors: currencies, precious and industrial metals, debt
                                                                            instruments, stock indices, agricultural commodities and energy.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | The Fund’s Managing Member estimates that 80% or more of the Fund’s
                                                                            assets with Investee Pools or Portfolio Managers, including the assets used to satisfy margin and collateral requirements,
                                                                            indirectly will be invested in U.S. Treasury bills or notes or other CFTC-authorized investments or held in bank or
                                                                            bank money market accounts.  All interest earned on Fund assets directly invested in interest bearing investments
                                                                            will accrue to the Fund.  The balance of the Fund’s assets will be held in cash in the Fund’s bank
                                                                            account and will be used to maintain liquidity to pay Fund expenses.  The Fund will make no loans, whether by
                                                                            direct loan, commercial paper purchase or other form of loan, to its Managing Member, any affiliate or employee of its
                                                                            Managing Member or any other party, and will not invest in equity securities without prior notice to members.  The
                                                                            Fund’s Managing Member will not commingle the property of the Fund with the property of any other person or
                                                                            entity.
| |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Item 3.  Defaults Upon Senior Securities.



None.



Item 4.  Removed and Reserved.



Item 5.  Other Information.



None.



Item 6.  Exhibits.



|3.1 |  | Certificate
of Formation of Aspen Diversified Fund LLC, dated April 7, 2005, incorporated by reference herein, previously
filed as an exhibit to the registrant’s Form 10-K filed on April 17, 2008.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3.2 |  | Limited
Liability Company Agreement of Aspen Diversified Fund LLC, incorporated by reference herein, previously
filed as an exhibit to the registrant’s Form 10 filed on August 6, 2007.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|31.1 |  | Certification
of the Managing Partner of the Fund’s Managing Member pursuant to Rule 13A-14(a) and Rule 15D-14(a),
of the Securities Exchange Act, as amended.
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------



|31.2 |  | Certification
of the Chief Financial Officer of the Fund’s Managing Member pursuant to Rule 13A-14(a) and Rule
15D-14(a), of the Securities Exchange Act, as amended.
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



|32.1 |  | Certification
of the Managing Partner of the Fund’s Managing Member pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|32.2 |  | Certification
of the Chief Financial Officer of the Fund’s Managing Member pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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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.



| | Dated: November 14, 2011                 
| | -----------------------------------------
| |                                          
| | Aspen Diversified Fund LLC               
| | By: Aspen Partners, Ltd., Managing Member
| |                                          
| | /s/ Kenneth E. Banwart                   
| | Kenneth E. Banwart                       
| | Managing Partner                         
| |                                          
| | /s/ Deborah Terry                        
| | Deborah Terry                            
| | Chief Financial Officer                  

-22-