FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C. 20549

                (X) QUARTERLY REPORT UNDER SECTION 13 or 15(d)

                    OF THE SECURITIES EXCHANGE ACT OF 1934

              OR ( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d)

                    OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter ended September 30, 1998

Commission File Number 0-28336


                   SMITH BARNEY MID-WEST FUTURES FUND L.P. II
             (Exact name of registrant as specified in its charter)

          New York                                        13-3772374
(State or other jurisdiction of                       (I.R.S. Employer
 incorporation or organization)                        Identification No.)


                    c/o Smith Barney Futures Management Inc.
                           390 Greenwich St. - 1st Fl.
                            New York, New York 10013
              (Address and Zip Code of principal executive offices)

                                 (212) 723-5424
              (Registrant's telephone number, including area code)


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


<PAGE>




                  SMITH BARNEY MID-WEST FUTURES FUND L.P. II
                                   FORM 10-Q
                                     INDEX

                                                                      Page
                                                                     Number

PART I - Financial Information:

       Item 1.     Financial Statements:
                   Statement of Financial Condition at
                   September 30, 1998 and December 31,
                   1997.                                                3

                   Statement of Income and Expenses
                   and Partners' Capital for the three
                   and nine months ended September 30,
                   1998 and 1997.                                       4

                   Notes to Financial Statements                     5 - 8

       Item 2.     Management's Discussion and Analysis
                   of Financial Condition and Results of
                   Operations                                        9 - 11

       Item 3.     Quantitative and Qualitative
                   Disclosures of Market Risk                           12

PART II - Other Information                                         13 - 14




                                      2

<PAGE>


                                     PART I

                          Item 1. Financial Statements

                   SMITH BARNEY MID-WEST FUTURES FUND L.P. II
                        STATEMENT OF FINANCIAL CONDITION


                                                   September 30,    December 31,
                                                       1998            1997
Assets:
                                                   -------------    ------------
                                                    (Unaudited)

Equity in commodity futures trading account:
Cash and cash equivalents                           $ 79,953,549    $ 98,812,037
Net unrealized appreciation
on open futures contracts                             24,038,376       4,837,350

                                                    ------------    ------------

                                                     103,991,925     103,649,387

Interest receivable                                      266,041         349,777
                                                    ------------    ------------

                                                    $104,257,966    $103,999,164
                                                    ============    ============



LIABILITIES AND PARTNERS' CAPITAL:

Liabilities:

Accrued expenses:
Commissions                                         $    521,290    $    519,996
Management fees                                          345,609         344,931
Administrative fees                                       86,402          86,233
Incentive fees                                           832,948       1,062,363
Other                                                     53,980          47,822
Redemptions payable                                      795,784         620,745
                                                    ------------    ------------

                                                       2,636,013       2,682,090
                                                    ------------    ------------

Partners' Capital:
General Partner, 608.9156 Unit
equivalents outstanding in 1998 and 1997               1,136,237       1,055,939
Limited Partners, 53,850.8178 and
57,816.3107 Units of Limited
Partnership Interest outstanding
in 1998 and 1997, respectively                       100,485,716     100,261,135
                                                    ------------    ------------

                                                     101,621,953     101,317,074
                                                    ------------    ------------

                                                    $104,257,966    $103,999,164
                                                    ============    ============

See Notes to Financial Statements.
                                        3

<PAGE>

                   SMITH BARNEY MID-WEST FUTURES FUND L.P. II
             STATEMENT OF INCOME AND EXPENSES AND PARTNERS' CAPITAL
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                              THREE MONTHS ENDED               NINE MONTHS ENDED
                                                                 SEPTEMBER 30,                   SEPTEMBER 30,
                                                       ------------------------------    ------------------------------
                                                             1998            1997             1998             1997
<S>                                                          <C>              <C>             <C>               <C>    
Income:
Net gains (losses) on trading of commodity
futures:
Realized gains (losses) on closed positions            $      58,379    $   9,854,146    $  (6,893,386)   $   3,355,023
Change in unrealized gains/losses on open
positions                                                 28,506,170        4,606,113       19,201,026        6,109,922
                                                       _____________    _____________    _____________    _____________

                                                          28,564,549       14,460,259       12,307,640        9,464,945
Less, brokerage commissions and clearing fees
($21,803, $23,998, $64,559 and $51,824 respectively)      (1,461,753)      (1,528,028)      (4,293,932)      (4,073,916)
                                                       _____________    _____________    _____________    _____________

Net realized and unrealized gains                         27,102,796       12,932,231        8,013,708        5,391,029
Interest income                                              820,501          943,813        2,614,483        2,581,096
                                                       _____________    _____________    _____________    _____________

                                                          27,923,297       13,876,044       10,628,191        7,972,125
                                                       _____________    _____________    _____________    _____________


Expenses:
Management fees                                              905,102          976,642        2,666,689        2,623,293
Administrative fees                                          226,275          244,160          666,671          655,578
Incentive fees                                               832,948          327,899          832,948          327,899
Other                                                         19,662            6,499           61,014           63,111
                                                       _____________    _____________    _____________    _____________

                                                           1,983,987        1,555,200        4,227,322        3,669,881
                                                       _____________    _____________    _____________    _____________

Net income                                                25,939,310       12,320,844        6,400,869        4,302,244

Additions                                                          -                -                -       26,876,900
Redemptions                                               (2,710,127)        (948,514)      (6,095,990)      (3,359,906)
                                                       _____________    _____________    _____________    _____________

Net increase in Partners' capital                         23,229,183       11,372,330          304,879       27,819,238

Partners' capital, beginning of period                    78,392,770       84,898,377      101,317,074       68,451,469
                                                       _____________    _____________    _____________    _____________

Partners' capital, end of period                       $ 101,621,953    $  96,270,707    $ 101,621,953    $  96,270,707
                                                       -------------    -------------    -------------    -------------

Net asset value per Unit
(54,459.7334 and 59,557.5932 Units outstanding
at September 30, 1998 and 1997, respectively)          $    1,866.00    $    1,616.43    $    1,866.00    $    1,616.43
                                                       -------------    -------------    -------------    -------------


Net income per Unit of Limited Partnership
Interest and General Partner Unit equivalent           $      470.04    $      204.91    $      131.87    $       78.50
                                                       -------------    -------------    -------------    -------------
</TABLE>

See Notes to Financial Statements                             
                                       4
<PAGE>



                  Smith Barney Mid-West Futures Fund L.P. II
                         Notes to Financial Statements
                              September 30, 1998
                                  (Unaudited)

1. General:

      Smith  Barney  Mid-West  Futures  Fund L.P.  II,(the  "Partnership")  is a
limited  partnership  which was organized on June 3, 1994 under the  partnership
laws of the  State  of New  York  to  engage  in the  speculative  trading  of a
diversified  portfolio  of  commodity  interests  including  futures  contracts,
options and forward  contracts.  The commodity  interests that are traded by the
Partnership  are  volatile  and  involve  a high  degree  of  market  risk.  The
Partnership commenced trading operations on September 1, 1994.

       Smith Barney  Futures  Management  Inc. acts as the general  partner (the
"General  Partner") of the Partnership.  On September 1, 1998, the Partnership's
commodity  broker,  Smith  Barney  Inc.,  merged with  Salomon  Brothers Inc and
changed its name to Salomon  Smith Barney Inc.  ("SSB").  SSB is an affiliate of
the General Partner. The General Partner is wholly owned by Salomon Smith Barney
Holdings Inc.  ("SSBH"),  which is the sole owner of SSB. SSBH is a wholly owned
subsidiary of Travelers Group Inc. All trading decisions for the Partnership are
being made by John W. Henry & Company, Inc. (the "Advisor"). (see Note 5)

      The accompanying financial statements are unaudited but, in the opinion of
management,  include  all  adjustments  (consisting  only  of  normal  recurring
adjustments)  necessary for a fair presentation of the  Partnership's  financial
condition at September 30, 1998 and the results of its  operations for the three
and nine months ended September 30, 1998 and 1997.  These  financial  statements
present  the  results of interim  periods  and do not  include  all  disclosures
normally  provided in annual  financial  statements.  It is suggested that these
financial  statements be read in conjunction  with the financial  statements and
notes  included in the  Partnership's  annual report on Form 10-K filed with the
Securities and Exchange Commission for the year ended December 31, 1997.

      Due to the nature of commodity trading,  the results of operations for the
interim  periods  presented  should not be considered  indicative of the results
that may be expected for the entire year.


                                      5

<PAGE>



                  Smith Barney Mid-West Futures Fund L.P. II
                        Notes to Financial Statements
                                 (continued)

2. Net Asset Value Per Unit:

       Changes in net asset value per Unit for the three and nine  months  ended
September 30, 1998 and 1997 were as follows:

                                 THREE-MONTHS ENDED         NINE-MONTHS ENDED
                                    SEPTEMBER 30,              SEPTEMBER 30,
                                 1998        1997            1998        1997

Net realized and unrealized
gains                          $  491.20    $  215.09    $  160.84    $   98.21
Interest income                    14.78        15.75        45.88        45.60
Expenses                          (35.94)      (25.93)      (74.85)      (65.31)
                               ---------    ---------    ---------    ---------

Increase for period               470.04       204.91       131.87        78.50

Net Asset Value per Unit,
beginning of period             1,395.96     1,411.52     1,734.13     1,537.93
                               ---------    ---------    ---------    ---------

Net Asset Value per Unit,
end of period                  $1,866.00    $1,616.43    $1,866.00    $1,616.43
                               =========    =========    =========    =========


3. Trading Activities:

      The  Partnership  was formed for the  purpose  of trading  contracts  in a
variety of commodity interests,  including derivative financial  instruments and
derivative  commodity  instruments.  The  results of the  Partnership's  trading
activity are shown in the statement of income and expenses.

      The  Customer   Agreement  between  the  Partnership  and  SSB  gives  the
Partnership the legal right to net unrealized gains and losses.

      All of the  commodity  interests  owned  by the  Partnership  are held for
trading purposes. The fair value of these commodity interests, including options
thereon,  at  September  30,  1998 and  December  31, 1997 was  $24,038,376  and
$4,837,350,  respectively, and the average fair value during the nine and twelve
months then ended, based on monthly calculation,  was $3,817,400 and $5,283,180,
respectively.

4. Financial Instrument Risk:

      The Partnership is party to financial  instruments with off- balance sheet
risk,  including  derivative  financial  instruments  and  derivative  commodity
instruments, in the normal course of its

                                      6

<PAGE>



business.  These financial  instruments  include forwards,  futures and options,
whose value is based upon an underlying  asset,  index,  or reference  rate, and
generally  represent future commitments to exchange currencies or cash flows, to
purchase or sell other  financial  instruments  at specific  terms at  specified
future dates,  or, in the case of derivative  commodity  instruments,  to have a
reasonable  possibility  to  be  settled  in  cash  or  with  another  financial
instrument.  These instruments may be traded on an exchange or  over-the-counter
("OTC").  Exchange traded  instruments are  standardized and include futures and
certain  option  contracts.  OTC contracts are  negotiated  between  contracting
parties and include forwards and certain options.  Each of these  instruments is
subject to various risks similar to those  related to the  underlying  financial
instruments  including market and credit risk. In general,  the risks associated
with OTC  contracts  are greater  than those  associated  with  exchange  traded
instruments because of the greater risk of default by the counterparty to an OTC
contract.

      Market risk is the  potential  for  changes in the value of the  financial
instruments traded by the Partnership due to market changes,  including interest
and foreign  exchange rate movements and  fluctuations  in commodity or security
prices.  Market risk is directly impacted by the volatility and liquidity in the
markets in which the related underlying assets are traded.

      Credit risk is the possibility that a loss may occur due to the failure of
a counterparty to perform according to the terms of a contract. Credit risk with
respect to exchange traded instruments is reduced to the extent that an exchange
or  clearing  organization  acts  as a  counterparty  to the  transactions.  The
Partnership's  risk of loss in the event of  counterparty  default is  typically
limited to the amounts  recognized in the  statement of financial  condition and
not  represented  by the contract or notional  amounts of the  instruments.  The
Partnership has concentration  risk because the sole counterparty or broker with
respect to the Partnership's assets is SSB.

      The General Partner monitors and controls the Partnership's  risk exposure
on a daily  basis  through  financial,  credit  and risk  management  monitoring
systems  and,   accordingly  believes  that  it  has  effective  procedures  for
evaluating and limiting the credit and market risks to which the  Partnership is
subject.  These  monitoring  systems allow the General Partner to  statistically
analyze actual  trading  results with risk adjusted  performance  indicators and
correlation statistics. In addition,  on-line monitoring systems provide account
analysis  of  futures,   forwards  and  options  positions  by  sector,   margin
requirements, gain and loss transactions and collateral positions.

      The  notional  or  contractual  amounts  of these  instruments,  while not
recorded in the financial statements, reflect the extent

                                      7

<PAGE>



of the Partnership's  involvement in these  instruments.  At September 30, 1998,
the notional or contractual amounts of the Partnership's  commitment to purchase
and sell these instruments was $1,685,762,793 and $71,341,851,  respectively, as
detailed below. All of these instruments mature within one year of September 30,
1998.  However,  due  to  the  nature  of  the  Partnership's  business,   these
instruments  may not be held to maturity.  At September 30, 1998, the fair value
of the Partnership's derivatives, including options thereon, was $24,038,376, as
detailed below.
  
                                    SEPTEMBER 30, 1998
                                  NOTIONAL OR CONTRACTUAL
                                    AMOUNT OF COMMITMENTS
                                 TO PURCHASE     TO SELL          FAIR VALUE


Currencies *                    $  210,187,464   $   47,251,757   $    4,771,905
Interest Rates U.S.                415,664,100                -        5,806,025
Interest Rates Non-U.S.          1,059,813,606        3,286,548       12,069,579
Indices                                 97,623       20,803,546        1,390,867
                                --------------   --------------   --------------

Totals                          $1,685,762,793   $   71,341,851   $   24,038,376
                                ==============   ==============   ==============


      At  December  31,  1997,  the  notional  or  contractual  amounts  of  the
Partnership's commitment to purchase and sell these instruments was $439,703,147
and  $674,462,459,  respectively,  and  the  fair  value  of  the  Partnership's
derivatives, including options thereon, was $4,837,350, as detailed below.

                                        DECEMBER 31, 1997
                                     NOTIONAL OR CONTRACTUAL
                                       AMOUNT OF COMMITMENTS
                                  TO PURCHASE     TO SELL          FAIR VALUE

Currencies *                       $112,161,137    $214,988,952    $   (476,904)
Interest Rates U.S.                  93,164,750               -         740,813
Interest Rates Non-U.S.             222,477,455     410,908,324         268,873
Metals                               11,899,805      39,967,590       3,603,175
Indices                                       -       8,597,593         701,393
                                   ------------    ------------    ------------

Totals                             $439,703,147    $674,462,459    $  4,837,350
                                 ==============    ============   ==============

* The  notional or  contractual  commitment  amounts and the fair value  amounts
listed for the currency sector represent OTC contracts. All other sectors listed
represent exchange traded contracts.

5.    Subsequent Event:

      On October 8, 1998, Travelers Group Inc. merged with Citicorp
Inc. and changed its name to Citigroup Inc.

                                        8

<PAGE>


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


Liquidity and Capital Resources

      The Partnership does not engage in the sale of goods or services. Its only
assets are its equity in its commodity  futures trading account,  net unrealized
appreciation  (depreciation)  on open futures and forward  contracts,  commodity
options and interest  receivable.  Because of the low margin  deposits  normally
required in commodity  futures  trading,  relatively  small price  movements may
result in substantial losses to the Partnership.  While substantial losses could
lead to a decrease in liquidity, no such losses occurred in the third quarter of
1998.

      The  Partnership's  capital  consists of the capital  contributions of the
partners as  increased  or  decreased  by gains or losses on  commodity  futures
trading,  expenses,  interest income,  redemptions of Units and distributions of
profits, if any.

      For  the  nine  months  ended  September  30,  1998,  Partnership  capital
increased 0.3% from  $101,317,074 to  $101,621,953.  This increase was primarily
attributable  to a net gain from  operations of  $6,400,869  which was partially
offset  by the  redemption  of  3,965.4929  Units  resulting  in an  outflow  of
$6,095,990 for the nine months ended September 30, 1998. Future  redemptions can
impact the amount of funds  available  for  investments  in  commodity  contract
positions in subsequent periods.

Operational Risk

      The General Partner  administers  the business of the Partnership  through
various  systems and processes  maintained by SSBH. SSBH has analyzed the impact
of the year 2000 on its systems and processes and  modifications  for compliance
are  proceeding  according to plan.  All  modifications  necessary for year 2000
compliance  are expected to be completed by the first  quarter of 1999.  In July
1998, SSB participated in successful  industry-wide  testing  coordinated by the
Securities  Industry  Association  and plans to participate in such tests in the
future.  The  purpose of  industry-wide  testing is to confirm  that  exchanges,
clearing organizations,  and other securities industry participants are prepared
for the year 2000.

      The most likely and most  significant  risk to the Partnership  associated
with the lack of year 2000  readiness  is the failure of outside  organizations,
including the commodities  exchanges,  clearing organizations or regulators with
which the  Partnership  interacts to resolve  their year 2000 issues in a timely
manner.  This risk could  involve the  inability to  determine  the value of the
Partnership at

                                      9

<PAGE>



some point in time and would make effecting purchases or redemptions of Units in
the Partnership infeasible until such valuation was determinable.

      In  addition,   the  General  Partner  is  addressing  the   technological
implications that will result from regulatory and market changes due to Europe's
Economic and Monetary Union ("EMU").

      Risks to the  Partnership  exist in the lack of  experience  with this new
currency and the potential impact it can have on the Advisors'  trading program.
Risks  also  exist  in  the  failure  of  external  information  technology  and
accounting  systems to  adequately  prepare  for the  conversion.  This issue is
particularly   acute  in  the  area  of  the  exchanges,   clearing  houses  and
over-the-counter  foreign  exchange  markets  where the  futures  interests  are
traded. If the necessary changes are not properly  implemented,  the Partnership
could suffer failed trade settlements,  inability to reconcile trading positions
and funding  disruptions.  Such events could result in erroneous  entries in the
Partnership's  accounts,  mispriced  transactions,  and a delay or  inability to
provide  timely  pricing of Units for the  purpose of  effecting  purchases  and
redemptions.

      SSB has evaluated its internal  systems and made the necessary  changes to
accommodate EMU transactions on behalf of the  Partnership.  The General Partner
will  continue  to  monitor  and  communicate   with  the  Advisor  and  related
third-party  entities to assure  preparation for the EMU conversion and advanced
notification of impending issues or problems.

Results of Operations

      During the  Partnership's  third quarter of 1998,  the net asset value per
Unit  increased  33.7% from  $1,395.96  to  $1,866.00  as  compared to the third
quarter  of 1997 in which the net  asset  value per Unit  increased  14.5%.  The
Partnership  experienced  a net trading gain before  brokerage  commissions  and
related fees in the third quarter of 1998 of $28,564,549.  Gains were recognized
in the trading of commodity  futures in currencies,  U.S. and non-U.S.  interest
rates and metals and were partially offset by losses in indices. The Partnership
experienced a net trading gain before brokerage  commissions and related fees in
the third quarter of 1997 of  $14,460,259.  Gains were recognized in the trading
of commodity futures in currencies,  U.S.and non-U.S. interest rates, metals and
indices.

      Commodity  futures markets are highly volatile.  Broad price  fluctuations
and rapid inflation increase the risks involved in commodity  trading,  but also
increase the possibility of profit. The profitability of the Partnership depends
on the  existence  of major  price  trends  and the  ability  of the  Advisor to
identify  correctly  those price trends.  Price trends are  influenced by, among
other

                                       10

<PAGE>



things,  changing  supply  and  demand  relationships,   weather,  governmental,
agricultural,   commercial  and  trade  programs  and  policies,   national  and
international  political and economic  events and changes in interest  rates. To
the extent that market  trends  exist and the Advisor is able to identify  them,
the Partnership expects to increase capital through operations.

      Interest  income on 80% of the  Partnership's  average  daily  equity  was
earned at the monthly  average 30 day U.S.  Treasury bill rate.  Interest income
for the three months ended  September 30, 1998 decreased by $123,312 and for the
nine months ended  September  30, 1998,  increased by $33,387 as compared to the
corresponding  periods in 1997. The decrease in interest income is primarily the
result of the effect of redemptions on the  Partnership's  equity  maintained in
cash during the three month  period.  The  increase in interest  income over the
nine month  period is primarily  the result of an increase in the  Partnership's
equity  maintained  in cash during the nine months ended  September  30, 1998 as
compared to 1997.

      Brokerage  commissions  are  calculated on the adjusted net asset value on
the  last  day  of  each  month  and,  therefore,   vary  according  to  trading
performance,  additions and redemptions.  Accordingly,  they must be compared in
relation to the  fluctuations  in the monthly net asset values.  Commissions and
fees for the three months ended  September 30, 1998 decreased by $66,275 and for
the nine months ended  September  30, 1998  increased by $220,016 as compared to
the corresponding periods in 1997.

      All trading  decisions for the Partnership are currently being made by the
Advisor. Management fees are calculated as a percentage of the Partnership's net
asset value as of the end of each month and are affected by trading performance,
additions and redemptions.  Management fees for the three months ended September
30, 1998  decreased by $71,540 and for the nine months ended  September 30, 1998
increased by $43,396 as compared to the corresponding periods in 1997.

      Administrative  fees are paid to the General Partner for administering the
business  and  affairs  of the  Partnership.  These  fees  are  calculated  as a
percentage of the  Partnership's net asset value as of the end of each month and
are affected by trading performance,  additions and redemptions.  Administrative
fees for the three months ended  September 30, 1998 decreased by $17,885 and for
the nine months  ended  September  30, 1998  administrative  fees  increased  by
$11,093 as compared to the corresponding periods in 1997.

       Incentive  fees are based on the new  trading  profits  generated  by the
Advisor  as defined in the  advisory  agreement  between  the  Partnership,  the
General  Partner and the  Advisor.  Trading  Performance  for the three and nine
months ended  September  30, 1998 and  resulted in  incentive  fees of $832,948.
Trading  performance  for the three and nine  months  ended  September  30, 1997
resulted in incentive fees of $327,899.

                                       11

<PAGE>




Item 3.     Quantitative and Qualitative Disclosures of Market Risk

      The  Partnership  is subject to SEC  Financial  Reporting  Release No. 48,
regarding  quantitative  and  qualitative  disclosures  of market  risk and will
comply with the  disclosure  and reporting  requirements  in its Form 10-K as of
December 31, 1998.


                                       12

<PAGE>



                           PART II OTHER INFORMATION

Item 1.     Legal Proceedings


            Between May 1994 and the present,  Salomon  Brothers  Inc.  ("SBI"),
            Smith Barney Inc.  ("SB") and The Robinson  Humphrey  Company,  Inc.
            ("R-H"), all currently subsidiaries of Salomon Smith Barney Holdings
            Inc.  ("SSBH"),  along with a number of other  broker-dealers,  were
            named as defendants in  approximately  25 federal court lawsuits and
            two state court lawsuits,  principally  alleging that companies that
            make  markets in  securities  traded on NASDAQ  violated the federal
            antitrust  laws by conspiring  to maintain a minimum  spread of $.25
            between the bid and asked price for certain securities.  The federal
            lawsuits and one state court case were  consolidated  for  pre-trial
            purposes  in the  Southern  District of New York in the fall of 1994
            under the caption In re NASDAQ Market-Makers  Antitrust  Litigation,
            United  States  District  Court,  Southern  District of New York No.
            94-CIV-3996  (RWS);  M.D.L.  No.  1023.  The other state court suit,
            Lawrence A. Abel v. Merrill Lynch & Co., Inc. et al.; Superior Court
            of San Diego, Case No. 677313,  has been dismissed without prejudice
            in conjunction with a tolling agreement.

            In consolidated  action, the plaintiffs purport to represent a class
            of persons who bought one or more of what they currently estimate to
            be approximately  1,650 securities on NASDAQ between May 1, 1989 and
            May 27, 1994. They seek unspecified monetary damages, which would be
            trebled  under  the  antitrust   laws.  The  plaintiffs   also  seek
            injunctive  relief,  as well as attorney's fees and the costs of the
            action.  (The state cases seek similar  relief.)  Plaintiffs  in the
            consolidated  action filed an amended  consolidated  complaint  that
            defendants  answered in December  1995.  On November 26,  1996,  the
            Court certified a class composed of retail  purchasers.  A motion to
            include  institutional  investors  in the  class  and  to add  class
            representatives  was  granted.  In December  1997,  SBI, SB and R-H,
            along  with  several  other  broker-dealer  defendants,  executed  a
            settlement  agreement with the  plaintiffs.  This agreement has been
            preliminarily  approved by the U.S.  District Court for the Southern
            District of New York but is subject to final approval.

            On July 17,  1996,  the  Antitrust  Division  of the  Department  of
            Justice  filed a  complaint  against a number  of firms  that act as
            market makers in NASDAQ stocks. The complaint basically alleged that
            a common understanding arose among NASDAQ market makers which worked
            to keep quote spreads in

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<PAGE>



            NASDAQ stocks artificially wide.  Contemporaneous with the filing of
            the  complaint,   SBI,  SB  and  other  defendants  entered  into  a
            stipulated  settlement  agreement,  pursuant to which the defendants
            would  agree not to  engage in  certain  practices  relating  to the
            quoting of NASDAQ  securities and would further agree to implement a
            program to ensure  compliance  with federal  antitrust laws and with
            the  terms  of the  settlement.  In  entering  into  the  stipulated
            settlement,  SBI and SB did not  admit any  liability.  There are no
            fines, penalties, or other payments of monies in connection with the
            settlement.  In April 1997, the U.S. District Court for the Southern
            District  of  New  York  approved  the  settlement.   In  May  1997,
            plaintiffs  in the  related  civil  action  (who were  permitted  to
            intervene  for  limited  purposes)  appealed  the  district  court's
            approval of the settlement.  The appeal was argued in March 1998 and
            was affirmed in August 1998.

            The Securities and Exchange  Commission ("SEC") is also conducting a
            review of the NASDAQ  marketplace,  during  which it has  subpoenaed
            documents and taken the testimony of various  individuals  including
            SBI and SB  personnel.  In July 1996,  the SEC reached a  settlement
            with the National  Association  of  Securities  Dealers and issued a
            report  detailing  certain  conclusions with respect to the NASD and
            the NASDAQ market.

            In December 1996, a complaint seeking  unspecified  monetary damages
            was filed by Orange County,  California  against numerous  brokerage
            firms,  including SB, in the U.S.  Bankruptcy  Court for the Central
            District of California.  Plaintiff alleged, among other things, that
            the  defendants   recommended  and  sold  to  plaintiff   unsuitable
            securities.  The case (County of Orange et al. v. Bear Stearns & Co.
            Inc. et al.) has been stayed by agreement of the parties.

Item 2.     Changes in Securities and Use of Proceeds - None

Item 3.     Defaults Upon Senior Securities - None

Item 4.     Submission of Matters to a Vote of Security Holders -
            None

Item 5.     Other Information - None

Item 6.     (a) Exhibits - None

            (b) Reports on Form 8-K - None



                                       14



<PAGE>



                                   SIGNATURES
 
       Pursuant to the  requirements  of Section 13 or 15 (d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

SMITH BARNEY MID-WEST FUTURES FUND L.P. II


By:     Smith Barney Futures Management Inc.
        (General Partner)


By:     /s/ David J. Vogel, President
        David J. Vogel, President


Date:    11/12/98

       Pursuant to the requirements of the Securities Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.

By:     Smith Barney Futures Management Inc.
        (General Partner)


By:     /s/ David J. Vogel, President
        David J. Vogel, President


Date:    11/12/98



By:     /s/ Daniel A. Dantuono
        Daniel A. Dantuono
        Chief Financial Officer and
        Director


Date:    11/12/98

                                       15

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