UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549

	FORM 10-Q

[X]	Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 2006 or

[ ]	Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from                to

Commission File Number 0-23577


	MORGAN STANLEY DIVERSIFIED FUTURES FUND L.P.

	(Exact name of registrant as specified in its charter)

		Delaware						     13-3461507
(State or other jurisdiction of		     		 (I.R.S. Employer
incorporation or organization)			      Identification No.)


Demeter Management Corporation
330 Madison Avenue, 8th Floor
New York, NY                   		   		          10017
(Address of principal executive offices)            	  (Zip Code)

Registrant?s telephone number, including area code  	(212) 905-2700

Dean Witter Diversified Futures Fund Limited Partnership


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

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

Yes    X       	No___________


Indicate by check-mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer.  See definition
of ?accelerated filer and large accelerated filer? in Rule 12b-2 of the
Exchange Act.  (Check one):

Large accelerated filer___Accelerated filer___Non-accelerated filer  X


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



<page> <table> MORGAN STANLEY DIVERSIFIED FUTURES FUND L.P.

(formerly, Dean Witter Diversified Futures Fund
Limited Partnership)

	INDEX TO QUARTERLY REPORT ON FORM 10-Q

	June 30, 2006

<caption>



PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

				<c>
		Statements of Financial Condition as of June 30, 2006
		(Unaudited) and December 31, 2005..........................2

		Statements of Operations for the Three and Six Months
		Ended June 30, 2006 and 2005 (Unaudited)...................3

		Statements of Changes in Partners? Capital for the
		Six Months Ended June 30, 2006 and 2005 (Unaudited)........4

		Statements of Cash Flows for the Six Months Ended
		June 30, 2006 and 2005 (Unaudited).........................5

		Notes to Financial Statements (Unaudited)...............6-11

Item 2.	Management?s Discussion and Analysis of
			Financial Condition and Results of Operations.......12-28

Item 3.	Quantitative and Qualitative Disclosures about
			Market Risk.........................................28-40

Item 4.	Controls and Procedures.............................40-41


PART II. OTHER INFORMATION

Item 1A.Risk Factors...........................................42

Item 5.	Other Information......................................42

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

</table>


<page> <table> PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements

	MORGAN STANLEY DIVERSIFIED FUTURES FUND L.P.
(formerly, Dean Witter Diversified Futures Fund Limited Partnership)
	STATEMENTS OF FINANCIAL CONDITION
<caption>
			June 30,	December 31,
			        2006        	        2005
			$	$
			(Unaudited)
ASSETS

		<c>	<c>
Equity in futures interests trading accounts:
	Unrestricted cash	32,621,073	34,746,433
	Restricted cash	    1,878,198	    2,710,691

	     Total cash	   34,499,271	  37,457,124

     Net unrealized gain on open contracts (MS&Co.)	1,476,238	    1,179,435
     Net unrealized gain on open contracts (MSIL)	             113,043	       709,610

		Total net unrealized gain on open contracts	     1,589,281	    1,889,045

		Total Trading Equity	36,088,552	39,346,169

Interest receivable (Morgan Stanley DW)	       107,474	        100,340

		Total Assets	   36,196,026	  39,446,509

LIABILITIES AND PARTNERS? CAPITAL

Liabilities

Redemptions payable	413,773	745,648
Administrative expenses payable	78,678	127,837
Accrued management fees (VK Capital)	         65,214	        101,453

		Total Liabilities	       557,665	        974,938

Partners? Capital

Limited Partners (33,522.055 and
	37,999.829 Units, respectively)	35,243,842	38,064,633
General Partner (375.245 and
     406.245 Units, respectively)	       394,519	        406,938

		Total Partners? Capital	  35,638,361	   38,471,571

		Total Liabilities and Partners? Capital	   36,196,026	   39,446,509

NET ASSET VALUE PER UNIT	                                                             1,051.36	       1,001.71
<fn>
	The accompanying notes are an integral part
	of these financial statements.
</table>


<page> <table> 	MORGAN STANLEY DIVERSIFIED FUTURES FUND L.P.
(formerly, Dean Witter Diversified Futures Fund Limited Partnership)
	STATEMENTS OF OPERATIONS
(Unaudited)

<caption>

                              For the Three Months                        	For the Six Months
                                    Ended June 30,                               Ended June 30,


                       2006   	               2005    	        2006   	    2005
                           $	                  $	             $	  $

	<c>	<c>		<c>	<c>
INVESTMENT INCOME
	Interest income (Morgan Stanley DW)	       344,726   		      251,174	   653,760		       493,904

EXPENSES
	Brokerage commissions (Morgan Stanley DW)	415,739	641,360	867,474		1,323,505
	Management fees (VK Capital)	196,024      	    356,633	    416,649		     783,035
	Transaction fees and costs	26,531	          36,496    	53,828		        72,309
	Administrative expenses	     25,000	       37,000	      55,000		      73,000

		   Total Expenses 	   663,294	  1,071,489	  1,392,951		    2,251,849

NET INVESTMENT LOSS 	  (318,568)	    (820,315)	   (739,191)		  (1,757,945)

TRADING RESULTS
Trading profit (loss):
	Realized	393,571	(6,849,275)	3,060,668		(7,330,114)
	Net change in unrealized	   569,524	   6,210,927 	   (299,764)		(1,247,454)

	           Total Trading Results	   963,095	      (638,348)	   2,760,904		   (8,577,568)

NET INCOME (LOSS)	   644,527	   (1,458,663)	  2,021,713		 (10,335,513)

NET INCOME (LOSS) ALLOCATION

	Limited Partners	639,920	  (1,440,548)	2,001,920		(10,206,116)
	General Partner 	4,607	(18,115)	19,793		(129,397)


NET INCOME (LOSS) PER UNIT

	Limited Partners                  12.27                   (30.53)                 49.65               (218.12)
	General Partner                   12.27	                   (30.53)                 49.65               (218.12)



<fn>



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

<page> <table> MORGAN STANLEY DIVERSIFIED FUTURES FUND L.P.
(formerly, Dean Witter Diversified Futures Fund Limited Partnership)
	STATEMENTS OF CHANGES IN PARTNERS? CAPITAL
For the Six Months Ended June 30, 2006 and 2005
(Unaudited)


<caption>


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

			<c>	<c>	<c>	<c>
Partners? Capital,
December 31, 2004	47,700.181	60,558,644	762,650 	61,321,294

Net Loss                                                                   ?    	         (10,206,116)	(129,397)	(10,335,513)

Redemptions	   (3,420.604)	       (3,720,062)     	          ?        	(3,720,062)

Partners? Capital,
June 30, 2005	    44,279.577	   46,632,466	      633,253	 47,265,719




Partners? Capital,
December 31, 2005	38,406.074	38,064,633	406,938 	38,471,571

Net Income                                                              ?    	             2,001,920	19,793	2,021,713

Redemptions	     (4,508.774)	       (4,822,711)        	     (32,212)	     (4,854,923)

Partners? Capital,
June 30, 2006	  33,897.300	   35,243,842	     394,519	 35,638,361





<fn>







The accompanying notes are an integral part
	of these financial statements.
</table>
<page> <table> MORGAN STANLEY DIVERSIFIED FUTURES FUND L.P.
(formerly, Dean Witter Diversified Futures Fund Limited Partnership)
	STATEMENTS OF CASH FLOWS
(Unaudited)


<caption>



				     For the Six Months Ended June 30,

				        2006        	        2005
				$	$


			<c>	<c>
CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss)	2,021,713	(10,335,513)
Noncash item included in net income (loss):
	Net change in unrealized	299,764	1,247,454

(Increase) decrease in operating assets:
	Restricted cash	832,493	3,285,222
	Interest receivable (Morgan Stanley DW)    	                                         (7,134)	(8,645)
	Due from Morgan Stanley DW	    -    	1,576

Decrease in operating liabilities:
	Administrative expenses payable  	(49,159)	                            (4,357)
	Accrued management fees (VK Capital)             	    (36,239)               (32,195)

Net cash provided by (used for) operating activities	  3,061,438	  (5,846,458)


CASH FLOWS FROM FINANCING ACTIVITIES

Cash paid for redemptions of Units	  (5,186,798)	   (4,164,381)

Net cash used for financing activities	  (5,186,798)	   (4,164,381)

Net decrease in unrestricted cash	(2,125,360)	(10,010,839)

Unrestricted cash at beginning of period	  34,746,433	   52,556,192

Unrestricted cash at end of period	   32,621,073	   42,545,353




<fn>

	The accompanying notes are an integral part
	of these financial statements.

</table>


<page> MORGAN STANLEY DIVERSIFIED FUTURES FUND L.P.
         (formerly, Dean Witter Diversified Futures Fund
Limited Partnership)
NOTES TO FINANCIAL STATEMENTS

June 30, 2006

(Unaudited)


The unaudited financial statements contained herein include, in
the opinion of management, all adjustments necessary for a fair
presentation of the results of operations and financial condition
of Morgan Stanley Diversified Futures Fund L.P. (formerly known
as Dean Witter Diversified Futures Fund Limited Partnership)
(the ?Partnership?).  The financial statements and condensed notes
herein should be read in conjunction with the Partnership?s
December 31, 2005 Annual Report on Form 10-K.  Certain prior year
amounts relating to cash balances were reclassified on the
Statements of Financial Condition and the related Statements of
Cash Flows to conform to 2006 presentation.  Such reclass-
ifications have no impact on the Partnership?s reported net income
(loss).

1.  Organization
Morgan Stanley Diversified Futures Fund L.P. (formerly known as
Dean Witter Diversified Futures Fund Limited Partnership) is a
Delaware limited partnership organized in 1987 to engage primarily
in the speculative trading of futures and forward contracts on
physical commodities and other commodity interests, including, but
not limited to, foreign currencies, financial instruments, metals,
energy, and agricultural products.
<page> MORGAN STANLEY DIVERSIFIED FUTURES FUND L.P.
        (formerly, Dean Witter Diversified Futures Fund
                       Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)


Effective July 20, 2006, Dean Witter Diversified Futures Fund
Limited Partnership was renamed to Morgan Stanley Diversified
Futures Fund L.P.



The Partnership?s general partner is Demeter Management
Corporation (?Demeter?). The non-clearing commodity broker is
Morgan Stanley DW Inc. (?Morgan Stanley DW?).  The clearing
commodity brokers are Morgan Stanley & Co. Incorporated (?MS &
Co.?) and Morgan Stanley & Co. International Limited (?MSIL?).
The trading manager is VK Capital Inc. (?VK Capital? or the
?Trading Manager?).  Demeter, Morgan Stanley DW, MS & Co., MSIL,
and VK Capital are wholly-owned subsidiaries of Morgan Stanley.

2.  Related Party Transactions
The Partnership?s cash is on deposit with Morgan Stanley DW, MS &
Co., and MSIL in futures and forwards trading accounts to meet
margin requirements as needed.  Monthly, Morgan Stanley DW pays
the Partnership interest income equal to 80% of its average daily
Net Assets for the month at a prevailing rate on U.S. Treasury
bills.  The Partnership pays brokerage commissions to Morgan
Stanley DW.  Management fees and incentive fees (if any) incurred
by the Partnership are paid to VK Capital.

<page> MORGAN STANLEY DIVERSIFIED FUTURES FUND L.P.
        (formerly, Dean Witter Diversified Futures Fund
                       Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)


3.  Financial Instruments
The Partnership trades futures and forward contracts on physical
commodities and other commodity interests, including, but not
limited to, foreign currencies, financial instruments, metals,
energy, and agricultural products.  Futures and forwards
represent contracts for delayed delivery of an instrument at a
specified date and price.  Risk arises from changes in the value
of these contracts and the potential inability of counterparties
to perform under the terms of the contracts. There are numerous
factors which may significantly influence the market value of
these contracts, including interest rate volatility.

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


<page> MORGAN STANLEY DIVERSIFIED FUTURES FUND L.P.
        (formerly, Dean Witter Diversified Futures Fund
                       Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

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

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

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

The net unrealized gains on open contracts, reported as a
component of ?Equity in futures interests trading accounts? on the


<page> MORGAN STANLEY DIVERSIFIED FUTURES FUND L.P.
        (formerly, Dean Witter Diversified Futures Fund
                       Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Statements of Financial Condition, and their longest contract
maturities were as follows:
                        Net Unrealized Gains
                         on Open Contracts               Longest Maturities

                 Exchange-  Off-Exchange-              Exchange- Off-Exchange-
Date              Traded       Traded        Total      Traded      Traded
                     $           $             $

Jun. 30, 2006 	 490,054	1,099,227	 1,589,281	 Mar. 2008	  Sep. 2006
Dec. 31, 2005    1,240,235	  648,810	 1,889,045	 Sep. 2006    Mar. 2006


The Partnership has credit risk associated with counterparty non-
performance.  As of the date of the financial statements, the
credit risk associated with the instruments in which the
Partnership trades is limited to the amounts reflected in the
Partnership?s Statements of Financial Condition.



The Partnership also has credit risk because Morgan Stanley DW, MS
& Co., and MSIL act as the futures commission merchants or the
counterparties, with respect to most of the Partnership?s assets.
Exchange-traded futures and forward contracts are marked to market
on a daily basis, with variations in value settled on a daily
basis.  Morgan Stanley DW, MS & Co., and MSIL, each as a futures


commission merchant for the Partnership?s exchange-traded futures
and forward contracts, are required, pursuant to regulations of
the Commodity Futures Trading Commission (?CFTC?), to segregate
from their own assets, and for the sole benefit of their commodity
<page> MORGAN STANLEY DIVERSIFIED FUTURES FUND L.P.
(formerly, Dean Witter Diversified Futures Fund
Limited Partnership)
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)

customers, all funds held by them with respect to exchange-traded
futures and forward contracts, including an amount equal to the
net unrealized gains (losses) on all open futures and forward
contracts, which funds, in the aggregate, totaled $34,989,325
and $38,697,359 at June 30, 2006 and December 31, 2005,
respectively. With respect to the Partnership?s off-exchange-
traded forward currency contracts, there are no daily exchange-
required settlements of variation in value, nor is there any
requirement that an amount equal to the net unrealized gains
(losses) on open forward contracts be segregated.  However, the
Partnership is required to meet margin requirements equal to the
net unrealized loss on open contracts in the Partnership accounts
with the counterparty, which is accomplished by daily maintenance
of the cash balance in a custody account held at Morgan Stanley DW
for the benefit of MS & Co. With respect to those off-exchange-
traded forward currency contracts, the Partnership is at risk to
the ability of MS & Co., the sole counterparty on all such
contracts, to perform.  The Partnership has a netting agreement
with MS & Co.  This agreement, which seeks to reduce both the
Partnership?s and MS & Co.?s exposure on off-exchange-traded
forward currency contracts, should materially decrease the
Partnership?s credit risk in the event of MS & Co.?s bankruptcy or
insolvency.


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


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

The Partnership?s investment in futures and forwards may, from
time to time, be illiquid.  Most U.S. futures exchanges limit
fluctuations in prices during a single day by regulations referred
to as ?daily price fluctuations limits? or ?daily limits?.  Trades
may not be executed at prices beyond the daily limit.  If the
price for a particular futures contract has increased or decreased
by an amount equal to the daily limit, positions in that futures
contract can neither be taken nor liquidated unless traders are
willing to effect trades at or within the limit.  Futures prices
have occasionally moved the daily limit for several consecutive
days with little or no trading.  These market conditions could
prevent the Partnership from promptly liquidating its futures
contracts and result in restrictions on redemptions.
<page> There is no limitation on daily price moves in trading
forward contracts on foreign currencies.  The markets for some
world currencies have low trading volume and are illiquid, which
may prevent the Partnership from trading in potentially profitable
markets or prevent the Partnership from promptly liquidating
unfavorable positions in such markets, subjecting it to
substantial losses.  Either of these market conditions could
result in restrictions on redemptions.  For the periods covered by
this report, illiquidity has not materially affected the
Partnership?s assets.

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

Capital Resources.  The Partnership does not have, nor expects to
have, any capital assets.  Redemptions of units of limited
partnership interest (?Unit(s)?) in the future will affect the
amount of funds available for investments in futures and forwards
in subsequent periods.  It is not possible to estimate the amount,
and therefore the impact, of future outflows of Units.


<page> There are no known material trends, favorable or
unfavorable, that would affect, nor any expected material changes
to, the  Partnership?s capital resource arrangements at the
present time.

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

Results of Operations
General.  The Partnership?s results depend on the Trading Manager
and the ability of the Trading Manager?s trading programs to take
advantage of price movements in the futures and forwards markets.
The following presents a summary of the Partnership?s operations
for the three and six month periods ended June 30, 2006 and 2005,
and a general discussion of its trading activities during each
period.  It is important to note, however, that the Trading
Manager trades in various markets at different times and that
prior activity in a particular market does not mean that such
market will be actively traded by the Trading Manager or will be
profitable in the future.  Consequently, the results of
operations of the Partnership are difficult to discuss other than
in the context of the Trading Manager?s trading activities on
behalf of the Partnership during the period in question. Past
performance is no guarantee of future results.
<page>
The Partnership?s results of operations set forth in the financial
statements on pages 2 through 11 of this report are prepared in
accordance with accounting principles generally accepted in the
United States of America, which require the use of certain
accounting policies that affect the amounts reported in these
financial statements, including the following:  The contracts the
Partnership trades are accounted for on a trade-date basis and
marked to market on a daily basis.  The difference between their
cost and market value is recorded on the Statements of Operations
as ?Net change in unrealized trading profit (loss)? for open
(unrealized) contracts, and recorded as ?Realized trading profit
(loss)? when open positions are closed out.  The sum of these
amounts constitutes the Partnership?s trading results.  The market
value of a futures contract is the settlement price on the
exchange on which that futures contract is traded on a particular
day. The value of foreign currency forward contracts is based on
the spot rate as of the close of business.  Interest income, as
well as management fees, incentive fees, brokerage commissions,
and transaction fees and costs of the Partnership are recorded on
an accrual basis.

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

<page>
For the Three and Six Months Ended June 30, 2006
The Partnership recorded total trading results including interest
income totaling $1,307,821 and expenses totaling $663,294,
resulting in net income of $644,527 for the three months ended
June 30, 2006.  The Partnership?s net asset value per Unit
increased from $1,039.09 at March 31, 2006 to $1,051.36 at June
30, 2006.

The most significant trading gains of approximately 6.9% were
recorded in the metals markets from long futures positions in
copper, nickel, zinc, and aluminum, as prices increased sharply
during April and May to record highs amid strong global
industrial demand from the U.S., China, and India.  Within the
precious metals markets, gold and silver prices both rallied to
25-year highs in April, benefiting from strong demand and lagging
supply.  Additional gains of approximately 2.1% were experienced
in global interest rate futures markets, primarily during April,
from short positions in German, U.S., Japanese, and Australian
fixed-income futures.  Within European markets, rising equity
prices and strong economic data pushed German fixed-income
futures prices lower.  Similarly, U.S. interest rates climbed
higher following the release of stronger-than-expected economic
data.  Japanese interest rate futures also dropped amid growing
speculation that the Bank of Japan would end its ?ultra-easy?
monetary policy and begin to increase interest rates.  Finally,
Australian interest rates also declined, due in part to optimism
<page> that the Australian economy, which is heavily dependent on
the sale of natural resources, would continue to benefit from
rising commodity prices.  Within the currency markets, gains of
approximately 1.8% were recorded during April from short
positions in the U.S. dollar as the value of the U.S. dollar
declined against many of its major rivals, notably the euro,
Japanese yen, Singapore dollar, Swedish krona, and Swiss franc,
amid news that foreign central banks would diversify their
currency reserves away from the U.S. dollar.  During May, long
positions in the euro versus the U.S. dollar experienced gains as
the value of the euro continued to strengthen against the U.S.
dollar after Dutch Finance Minister Gerritt Zalm said that the
European Central Bank will not intervene to halt the appreciation
of the euro.  A portion of these gains for the quarter was offset
by losses of approximately 6.6% in global equity indices during
May from long positions in U.S., European, and Pacific Rim
(Australian, Hong Kong, and Japanese) stock index futures as
prices declined due to inflation concerns and uncertainty
regarding future interest rate policy.  Further losses in the
global stock index sector were incurred towards the end of June
from newly established short futures positions in U.S. and
Pacific Rim stock indices as prices reversed higher on hopes of a
pause in the U.S. interest rate hikes.  Additional losses of
approximately 1.8% were incurred in the energy markets during May
from long futures positions in crude oil and its related products
as prices fell on renewed optimism that the standoff between Iran
and the West could be resolved diplomatically.  Further losses in
<page> the energy sector were recorded during June from short
futures positions in crude oil and its related products as prices
reversed higher amid reports from the U.S. Department of Energy
showing lower-than-expected levels of domestic gasoline
inventories and fears of supply disruptions in the Gulf of
Mexico.  Smaller losses of approximately 0.3% were incurred in
the agricultural markets during May from short positions in live
cattle futures as prices reversed higher after news that South
Korea would resume U.S. beef imports.  Additional losses were
recorded during May and June from long positions in corn futures
as prices fell primarily due to heavy fund-selling.


The Partnership recorded total trading results including interest
income totaling $3,414,664 and expenses totaling $1,392,951,
resulting in net income of $2,021,713 for the six months ended
June 30, 2006.  The Partnership?s net asset value per Unit
increased from $1,001.71 at December 31, 2005 to $1,051.36 at
June 30, 2006.

The most significant trading gains of approximately 9.3% were
recorded from long futures positions in base and precious metals.
Copper, aluminum, zinc, and nickel prices strengthened throughout
a majority of the year amid weak supplies, forecasts for
continued buying in China, and acceleration in demand from Japan,
Europe, and the U.S.  Within the precious metals markets, gold
and silver prices moved higher on persistent demand from foreign
central banks.  Additional gains of approximately 2.8% were
<page> experienced in global interest rate futures markets,
primarily during March and April, from short positions in German,
U.S., Japanese, and Australian fixed-income futures.  Within
European markets, rising equity prices and strong economic growth
pushed German fixed-income futures prices lower.  Similarly, U.S.
fixed-income futures declined following the release of stronger-
than-expected economic data.  Additional gains were recorded from
short positions in Japanese interest rate futures as prices
declined amid growing speculation that the Bank of Japan would
end its ?ultra-easy? monetary policy and begin to increase
interest rates.  Finally, gains were experienced from short
positions in Australian fixed-income futures as prices also
declined, due in part to optimism that the Australian economy,
which is heavily dependent on the sale of natural resources,
would continue to benefit from rising commodity prices.  A
portion of these gains was offset by losses of approximately 3.4%
in the energy markets during February from long positions in
crude oil futures as prices declined after Chinese government
authorities announced that China would place an emphasis on
prospecting alternative energy sources in the future, reports of
larger-than-expected supplies from the International Energy
Agency, and mild weather in the U.S. Northeast.  Additional
losses were incurred in the energy markets during May from long
futures positions in crude oil and its related products as prices
fell on renewed optimism that the standoff between Iran and the
West could be resolved diplomatically.  In June, short futures
positions in crude oil and its related products incurred losses
<page> as prices reversed higher amid reports from the U.S.
Department of Energy showing lower-than-expected levels of
domestic gasoline inventories and fears of supply disruptions in
the Gulf of Mexico.  Within the global stock index futures
markets, losses of approximately 1.9% were incurred from long
positions in U.S., European, and Hong Kong stock index futures as
prices declined due to inflation concerns and uncertainty
regarding future interest rate policy.  Further losses in the
global stock index sector were incurred during June from short
futures positions in U.S. and Hong Kong stock indices as prices
reversed higher.  These markets finished stronger for the month,
rallying on hopes of a pause in the U.S. interest rate hikes.
Further losses of approximately 0.7% were incurred in the
currency markets from long U.S. dollar positions versus the
Australian dollar and Japanese yen as the U.S. dollar?s value
reversed lower against these currencies during January on
expectations that a string of increases in interest rates by the
U.S. Federal Reserve would soon come to an end.  Also pushing the
value of the U.S. dollar lower against its rivals was speculation
that several major central banks would diversify some of their
assets away from the U.S. dollar.  Further losses in the currency
sector were experienced during February from short U.S. dollar
positions relative to the euro, Australian dollar, and Japanese
yen as the value of the U.S. dollar reversed higher after
declining U.S. unemployment and increased wage inflation data led
investors to predict that U.S. interest rates would continue to
increase.  The value of the Australian dollar also moved lower in
<page> the wake of a temporary decline in gold prices.  During
June, long positions in the euro and Japanese yen versus the U.S.
dollar recorded further losses as the U.S. dollar reversed higher
against most of its rivals amid diplomatic developments made
between the U.S. and Iran regarding Iran?s nuclear research
program, as well as the news of the confirmed death of insurgent
leader Abu Musab al-Zarqawi in Iraq.  Furthermore, the value of
the U.S. dollar continued to move higher in the days leading up
to the U.S. Federal Reserve?s seventeenth consecutive rate hike
on June 29.  Additionally, the value of the Japanese yen declined
during the first half of June relative to the U.S. dollar after
comments from Bank of Japan Governor Toshihiko Fukui implied that
the Bank of Japan will not raise interest rates in the near-term,
thus continuing Japan?s ?zero-interest-rate policy?.  Smaller
losses of approximately 0.6% were incurred in the agricultural
markets during May from short positions in corn futures as prices
settled higher on news of strong demand and bullish export data.

For the Three and Six Months Ended June 30, 2005
The Partnership recorded total trading results including interest
income totaling $(387,174) and expenses totaling $1,071,489,
resulting in a net loss of $1,458,663 for the three months ended
June 30, 2005.  The Partnership?s net asset value per Unit
decreased from $1,097.97 at March 31, 2005 to $1,067.44 at June
30, 2005.

<page> The most significant trading losses of approximately 7.1%
were recorded within the energy markets during April from long
positions in crude oil as prices reversed sharply lower after
U.S. government data pointed to greater refinery production and
rising supplies.  Prices were also pressured lower by the release
of slower demand growth forecasts.  Elsewhere in the energy
complex, losses resulted from long positions in natural gas as
prices dropped throughout the month in tandem with crude oil
prices.  Additional losses in the energy markets were experienced
during June from short positions in natural gas futures as prices
reversed higher on supply worries after a tropical storm entered
the Gulf of Mexico.  Smaller losses were experienced from short
positions in crude oil futures early in the month as prices
increased due to reports of weak supply.  In the agricultural
markets, losses of approximately 2.8% were recorded from both
long and short positions in corn as prices moved without
consistent direction throughout the quarter due to conflicting
news regarding supply and demand.  Elsewhere in the agricultural
complex, losses were incurred from long positions in cotton
futures during May as prices declined on news of weak demand in
China and technically-based selling.  Further losses were
experienced during June from short positions in cotton as prices
finished higher.  Smaller losses of approximately 1.4% were
recorded in the metals markets, primarily during June from
positions in copper futures as prices moved in a choppy manner
amid conflicting news regarding supply and demand.  Further
losses were experienced from both long and short positions in
<page> gold futures due to significant volatility in prices
resulting in trendless markets.  A portion of the Partnership?s
overall losses for the quarter was offset by gains of
approximately 5.7% in the global interest rate futures markets
during April from long positions in Japanese interest rate
futures as prices increased due to weak economic data and
geopolitical concerns over an intensifying rift between China and
Japan.  Additional gains were recorded from long positions in
European bond futures as prices increased amid a steady stream of
weak economic data from the major countries of the European
Union.  During May, gains were recorded from long positions in
European interest rate futures as prices trended higher early in
the month as investors sought the safe-haven of fixed-income
investments due to speculation that several hedge funds may have
experienced significant losses.  Prices then continued to
strengthen after European Central Bank representatives publicly
rejected calls for increases in European interest rates and after
French voters rejected the European Union constitution.  Finally
in June, gains were recorded from long positions in European and
Japanese interest rate futures as prices trended higher
throughout the month due to European Central Bank officials?
decision to keep key interest rates unchanged and the release of
weak economic data from Japan.  Later in the month, long
positions in European interest rate futures experienced further
gains as prices continued to move higher after the Swedish
Central Bank made a sharper cut in interest rates than had been
expected.  In the currency markets, gains of approximately 2.0%
<page> were recorded during May and June from short positions in
the Swedish krona, euro, Swiss franc, and Japanese yen as the
value of the U.S. dollar moved steadily higher after China
downplayed rumors of a move toward a flexible exchange rate, the
rejection of the European Union constitution by French voters,
data indicating a slowing in the euro-zone and Japanese
economies, and the ninth consecutive quarter-point interest rate
hike by the U.S. Federal Reserve.  Additional gains of
approximately 2.0% were experienced in the global stock index
futures markets during May and June from long positions in
European equity index futures as prices finished higher on strong
U.S. inflation data, strength in the technology sector, and
weakness in the euro.

The Partnership recorded total trading results including interest
income totaling $(8,083,664) and expenses totaling $2,251,849,
resulting in a net loss of $10,335,513 for the six months ended
June 30, 2005.  The Partnership?s net asset value per Unit
decreased from $1,285.56 at December 31, 2004 to $1,067.44 at
June 30, 2005.

The most significant trading losses of approximately 13.7% were
recorded in the currency markets from positions in the euro
relative to the British pound and the U.S. dollar.  During
January, long positions in the euro versus the British pound and
the U.S. dollar incurred losses as the value of the euro reversed
sharply lower in what many analysts described as a ?corrective?
<page> move after its strong upward trend during the fourth
quarter of 2004.  This decline in the value of the euro was
attributed to weak economic data out of the European Union and a
rebound in the value of its main rival, the U.S. dollar.
Additional losses were recorded during February and March from
both long and short positions in the euro against these
currencies as the value of the euro moved without consistent
direction amid conflicting economic data out of Germany, the
European Union?s largest economy.  Elsewhere in the currency
markets, losses resulted from positions in the Singapore dollar,
Swedish krona, South African rand, and Swiss franc relative to
the U.S dollar, primarily during February and March, as the value
of the U.S. dollar moved in a trendless range amid speculation
that China would re-value its currency, negative comments by the
U.S. Federal Reserve Chairman Alan Greenspan about the
considerable U.S. Current-Account deficit, and the U.S. Federal
Reserve's announcement of a quarter-point increase in the federal
funds rate.  Additional losses of approximately 4.4% were
incurred within the energy markets during January from short
positions in crude oil as prices moved higher amid speculation
that OPEC would move to cut production.  Prices were also
strengthened by forecasts for cold winter weather in the
Northeastern U.S.  Then in April, long positions in crude oil
resulted in additional losses as prices reversed sharply lower
after U.S. government data pointed to greater refinery production
and rising supplies.  Prices were also pressured lower by the
release of slower demand growth forecasts by the International
<page> Energy Agency.  Elsewhere in the energy complex, losses
resulted from long positions in natural gas as prices dropped
throughout the month in tandem with crude oil prices.  Additional
losses in the energy markets were experienced during June from
short positions in natural gas futures as prices reversed higher
on supply worries after a tropical storm entered the Gulf of
Mexico.  Smaller losses were experienced from short positions in
crude oil futures early in the month as prices increased due to
reports of weak supply.  Within the agricultural complex, losses
of approximately 2.8% were recorded from both long and short
positions in corn during March, April, May, and June as prices
moved without consistent direction throughout most of the year
due to conflicting news regarding supply and demand.  Elsewhere
in the agricultural markets, losses were experienced from short
positions in cotton futures during January as prices moved higher
early in the month due to speculative buying and news of a
decrease in supply.  Further losses were incurred from long
positions in cotton futures during May as prices declined on news
of weak demand in China and technically-based selling.  Smaller
losses of approximately 1.2% were recorded in the metals markets,
primarily during June from positions in copper futures as prices
moved without consistent direction amid conflicting news
regarding supply and demand.  Further losses were experienced
during April and June from both long and short positions in gold
futures due to significant volatility in prices.  A portion of
these losses for the first six months of the year was offset by
gains of approximately 3.9% recorded in the global interest rate
<page> futures markets.  During January, gains were recorded from
long positions in Japanese and European bond futures as prices
continued to trend higher due to conflicting economic data out of
Japan and the European Union and uncertainty in the equity
markets.  Further gains were experienced during April from long
positions in Japanese interest rate futures as prices increased
due to uncertainty regarding the direction of the Japanese
economy and geopolitical concerns over an intensifying rift
between China and Japan.  Also in April, gains were recorded from
long positions in European bond futures as prices increased amid
a steady stream of weak economic data from the major countries of
the European Union.  During May, gains were recorded from long
positions in European interest rate futures as prices increased
early in the month as investors sought the safe-haven of fixed-
income investments due to speculation that several hedge funds
may have experienced significant losses.  Prices then continued
to strengthen after European Central Bank representatives
publicly rejected calls for increases in European interest rates
and French voters rejected the European Union constitution.
Finally in June, gains were recorded from long positions in
European and Japanese interest rate futures as prices trended
higher throughout the month due to European Central Bank
officials? decision to keep key interest rates unchanged and the
release of weak economic data from Japan.  Later in the month,
long positions in European interest rate futures experienced
further gains as prices continued to move higher after the
Swedish Central Bank made a sharper cut in interest rates than
<page> had been expected.  Additional gains of approximately 1.8%
were experienced in the global stock index futures markets during
May and June from long positions in European equity index futures
as prices finished higher on strong U.S. inflation data, strength
in the technology sector, and weakness in the euro.

Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Introduction

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

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

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

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

The Partnership?s past performance is no guarantee of its future
results.  Any attempt to numerically quantify the Partnership?s
market risk is limited by the uncertainty of its speculative
trading.  The Partnership?s speculative trading and use of
leverage may cause future losses and volatility (i.e., ?risk of
ruin?) that far exceed the Partnership?s experience to date under
<page> the ?Partnership?s Value at Risk in Different Market
Sectors? section and significantly exceed the Value at Risk
(?VaR?) tables disclosed.
Limited partners will not be liable for losses exceeding the
current net asset value of their investment.

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

The Partnership accounts for open positions on the basis of mark
to market accounting principles.  Any loss in the market value of
the Partnership?s open positions is directly reflected in the
Partnership?s earnings and cash flow.

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

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

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

The Partnership?s Value at Risk in Different Market Sectors
The following table indicates the VaR associated with the
Partnership?s open positions as a percentage of total Net Assets
by primary market risk category at June 30, 2006 and 2005. At
June 30, 2006 and 2005, the Partnership?s total capitalization
was approximately $36 million and $47 million, respectively.

Primary Market            June 30, 2006          June 30, 2005
Risk Category	  	      Value at Risk          Value at Risk

Interest Rate				(0.61)%			  (1.87)%

Currency		  		    	(0.30)			  (1.26)

Equity					  -				  (0.65)

Commodity					(0.52)		   	  (0.40)

Aggregate Value at Risk	    	(0.80)%	  		  (1.80)%

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

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

The table below supplements the quarter-end VaR set forth above
by presenting the Partnership?s high, low, and average VaR, as a
percentage of total Net Assets for the four quarter-end reporting
periods from July 1, 2005 through June 30, 2006.

Primary Market Risk Category        High       Low      Average
Interest Rate					(1.78)%	 (0.61)%	 (1.11)%

Currency						(1.15)	 (0.30)	 (0.62)

Equity		    				(2.89)	   -		 (1.13)

Commodity						(1.17)	 (0.52)	 (0.76)


Aggregate Value at Risk			(3.07)%	 (0.80)%	 (1.98)%



Limitations on Value at Risk as an Assessment of Market Risk
VaR models permit estimation of a portfolio?s aggregate market
risk exposure, incorporating a range of varied market risks;
reflect risk reduction due to portfolio diversification or hedging
<page> activities; and can cover a wide range of portfolio assets.
However, VaR risk measures should be viewed in light of the
methodology?s limitations, which include, but may not be limited
to the following:

*	past changes in market risk factors will not always result in
accurate predictions of the distributions and correlations of
future market movements;
*	changes in portfolio value caused by market movements may
differ from those of the VaR model;
*	VaR results reflect past market fluctuations applied to current
trading positions while future risk depends on future
positions;
*	VaR using a one-day time horizon does not fully capture the
market risk of positions that cannot be liquidated or hedged
within one day; and
*	the historical market risk factor data used for VaR estimation
may provide only limited insight into losses that could be
incurred under certain unusual market movements.

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

The VaR tables provided present the results of the Partnership?s
VaR for each of the Partnership?s market risk exposures and on an
<page> aggregate basis at June 30, 2005, and for the four quarter-
end reporting periods from July 1, 2005 through June 30, 2006.
VaR is not necessarily representative of the Partnership?s
historic risk, nor should it be used to predict the Partnership?s
future financial performance or its ability to manage or monitor
risk.  There can be no assurance that the Partnership?s actual
losses on a particular day will not exceed the VaR amounts
indicated above or that such losses will not occur more than once
in 100 trading days.

Non-Trading Risk
The Partnership has non-trading market risk on its foreign cash
balances.  These balances and any market risk they may represent
are immaterial.

The Partnership also maintains a substantial portion of its
available assets in cash at Morgan Stanley DW; as of June 30,
2006, such amount is equal to approximately 93% of the
Partnership?s net asset value.  A decline in short-term interest
rates would result in a decline in the Partnership?s cash
management income. This cash flow risk is not considered to be
material.

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

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

<page> The following were the primary trading risk exposures of
the Partnership at June 30, 2006, by market sector.  It may be
anticipated, however, that these market exposures will vary
materially over time.

Interest Rate.  At June 30, 2006, the second largest market
exposure of the Partnership was to the global interest rate
sector.  Exposure was primarily spread across U.S., European,
Japanese, and Australian interest rate sectors.  Interest rate
movements directly affect the price of the sovereign bond futures
positions held by the Partnership and indirectly affect the value
of its stock index and currency positions.  Interest rate
movements in one country, as well as relative interest rate
movements between countries, materially impact the Partnership?s
profitability.  The Partnership?s primary interest rate exposure
is generally to interest rate fluctuations in the U.S. and the
other G-7 countries.  The G-7 countries consist of France, the
U.S., Britain, Germany, Japan, Italy, and Canada.  However, the
Partnership also takes futures positions in the government debt
of smaller countries ? e.g., Australia.  Demeter anticipates that
the G-7 countries? interest rates will remain the primary
interest rate exposure of the Partnership for the foreseeable
future.  The speculative futures positions held by the
Partnership may range from short to long-term instruments.
Consequently, changes in short, medium, or long-term interest
rates may have an effect on the Partnership.

<page> Currency.  At June 30, 2006, the Partnership had market
exposure to the currency sector.  The Partnership?s currency
exposure is to exchange rate fluctuations, primarily fluctuations
which disrupt the historical pricing relationships between
different currencies and currency pairs.  Interest rate changes,
as well as political and general economic conditions influence
these fluctuations.  The Partnership trades a number of
currencies, including cross-rates - i.e., positions between two
currencies other than the U.S. dollar.  At June 30, 2006, the
Partnership?s major exposures were to the euro and Japanese yen
currency crosses, as well as to outright U.S. dollar positions.
Outright positions consist of the U.S. dollar vs. other
currencies.  These other currencies include major and minor
currencies.  Demeter does not anticipate that the risk associated
with the Partnership?s currency trades will change significantly
in the future.

Commodity.
Soft Commodities and Agriculturals.  The largest market
exposure of the Partnership at June 30, 2006 was to the
markets that comprise these sectors.  Most of the exposure
was to the cotton, coffee, corn, cocoa, wheat, sugar,
soybeans, and soybean meal markets.  Supply and demand
inequalities, severe weather disruptions, and market
expectations affect price movements in these markets.


<page>
Energy.  At June 30, 2006, the Partnership?s third largest
market exposure was to the energy sector.  The Partnership?s
primary energy exposure was to futures contracts in natural
gas and crude oil and its related products.  Price movements
in these markets result from geopolitical developments,
particularly in the Middle East, as well as weather patterns,
and other economic fundamentals.  Significant profits and
losses, which have been experienced in the past, are expected
to continue to be experienced in the future.  Natural gas has
exhibited volatility in price resulting from weather patterns
and supply and demand factors and will likely continue in
this choppy pattern.

Metals.	  At June 30, 2006, the Partnership had market
exposure in the metals sector.  The Partnership's metals
exposure was to fluctuations in the price of base metals,
such as aluminum and zinc and precious metals, such as gold
and silver.  Economic forces, supply and demand inequalities,
geopolitical factors, and market expectations influence price
movements in these markets.  The Trading Manager utilizes the
trading system(s) to take positions when market opportunities
develop, and Demeter anticipates that the Partnership will
continue to do so.



<page>
Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following was the only non-trading risk exposure of the
Partnership at June 30, 2006:

Foreign Currency Balances.  The Partnership?s primary foreign
currency balances at June 30, 2006 were in Australian
dollars, euros, British pounds, Japanese yen, and Hong Kong
dollars.  The Partnership controls the non-trading risk of
foreign currency balances by regularly converting them back
into U.S. dollars upon liquidation of their respective
positions.

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

<page> Demeter monitors and controls the risk of the Partnership?s
non-trading instrument, cash.  Cash is the only Partnership
investment directed by Demeter, rather than the Trading Manager.

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

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


<page> PART II.  OTHER INFORMATION
Item 1A. RISK FACTORS
Information regarding risk factors appears in Item 2.
?Management?s Discussion and Analysis of Financial Condition and
Results of Operations? and Item 3.  ?Quantitative and Qualitative
Disclosures about Market Risk? of this Form 10-Q.  There have been
no other material changes from the risk factors previously
referenced in the Partnership?s Report on Form 10-K for the fiscal
year ended December 31, 2005 and the Partnership?s Report on Form
10-Q for the quarter ended March 31, 2006.

Item 5.  OTHER INFORMATION
Management.  In connection with the election of new directors to
the Board of Directors of Demeter, the following information
updates the disclosures in the Partnership?s Form 8-K filed on
March 27, 2006 and Form 8-K filed on April 5, 2006:

On May 11, 2006, the National Futures Association approved Mr.
Walter Davis, Mr. Michael McGrath, and Mr. Andrew Saperstein as
directors of Demeter.

On July 20, 2006, the National Futures Association approved Mr.
Walter Davis as an associated person of Demeter.

Effective July 20, 2006 Dean Witter Diversified Futures Fund
Limited Partnership was renamed to Morgan Stanley Diversified
Futures Fund L.P.
<page>
Item 6.  EXHIBITS
31.01	Certification of President of Demeter Management
Corporation, the general partner of the Partnership,
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
31.02	Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership, pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.
32.01	Certification of President of Demeter Management
Corporation, the general partner of the Partnership,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
32.02	Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.









<page>



SIGNATURE



Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.




                      Morgan Stanley Diversified Futures Fund L.P.
                      (Registrant)

                      By:   Demeter Management Corporation
                            (General Partner)

August 14, 2006       By:/s/Kevin Perry
                            Kevin Perry
                            Chief Financial Officer





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














DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)


DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)