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 June 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
                   June 30, 1998 and December 31, 1997.                3

                   Statement of Income and Expenses
                   and Partners' Capital for the three
                   and six months ended June 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


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

Equity in commodity futures trading account:
  Cash and cash equivalents                       $  83,844,716    $  98,812,037
  Net unrealized appreciation (depreciation)
   on open futures contracts                         (4,467,794)       4,837,350

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

                                                     79,376,922      103,649,387

Interest receivable                                     259,878          349,777
                                                  -------------    -------------

                                                  $  79,636,800    $ 103,999,164
                                                  =============    =============



LIABILITIES AND PARTNERS' CAPITAL:

Liabilities:

 Accrued expenses:
  Commissions                                     $     398,184    $     519,996
  Management fees                                       263,917          344,931
  Administrative fees                                    65,979           86,233
  Incentive  fees                                             -        1,062,363
  Other                                                  63,662           47,822
Redemptions payable                                     452,288          620,745
                                                  -------------    -------------

                                                      1,244,030        2,682,090
                                                  -------------    -------------

Partners' Capital:
General Partner, 608.9156  Unit equivalents
 outstanding in 1998 and 1997                           850,022        1,055,939
Limited Partners, 55,547.9032 and
 57,816.3107 Units of Limited
 Partnership Interest outstanding in 1998
 and 1997, respectively                              77,542,748      100,261,135
                                                  -------------    -------------

                                                     78,392,770      101,317,074
                                                  -------------    -------------

                                                  $  79,636,800    $ 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                 SIX MONTHS ENDED
                                                                     JUNE 30,                          JUNE 30,
                                                          ------------------------------    ------------------------------
                                                               1998            1997             1998             1997
                                                          -------------    -------------    -------------    -------------
<S>                                                             <C>             <C>              <C>               <C>  
Income:
  Net gains (losses) on trading of commodity futures:
  Realized losses on closed positions                     $  (2,562,481)   $  (8,985,376)   $  (6,951,765)   $  (6,499,123)
  Change in unrealized gains/losses on open
   positions                                                 (5,421,133)       2,361,536       (9,305,144)       1,503,809
                                                          -------------    -------------    -------------    -------------

                                                             (7,983,614)      (6,623,840)     (16,256,909)      (4,995,314)
Less, brokerage commissions and clearing fees
  ($17,890, $15,281, $42,756 and $27,826, respectively)      (1,310,883)      (1,338,643)      (2,832,179)      (2,545,888)
                                                          -------------    -------------    -------------    -------------

  Net realized and unrealized losses                         (9,294,497)      (7,962,483)     (19,089,088)      (7,541,202)



  Interest income                                               810,659          882,010        1,793,982        1,637,283
                                                          -------------    -------------    -------------    -------------

                                                             (8,483,838)      (7,080,473)     (17,295,106)      (5,903,919)
                                                          -------------    -------------    -------------    -------------


Expenses:
  Management fees                                               822,538          864,073        1,761,587        1,646,651
  Administrative fees                                           205,634          216,018          440,396          411,418
  Other                                                          20,297           21,681           41,352           48,188
                                                          -------------    -------------    -------------    -------------

                                                              1,048,469        1,101,772        2,243,335        2,106,257
                                                          -------------    -------------    -------------    -------------

  Net loss                                                   (9,532,307)      (8,182,245)     (19,538,441)      (8,010,176)
  Additions                                                           -       13,490,500                -       26,776,900
  Redemptions                                                (2,195,660)      (1,085,559)      (3,385,863)      (2,411,392)
                                                          -------------    -------------    -------------    -------------

  Net increase (decrease) in Partners' capital              (11,727,967)       4,222,696      (22,924,304)      16,355,332

Partners' capital, beginning of period                       90,120,737       80,584,105      101,317,074       68,451,469
                                                          -------------    -------------    -------------    -------------

Partners' capital, end of period                          $  78,392,770    $  84,806,801    $  78,392,770    $  84,806,801
                                                          -------------    -------------    -------------    -------------

Net asset value per Unit
  (56,156.8188 and 60,082.0960 Units outstanding
  at June 30, 1998 and 1997, respectively)                $    1,395.96    $    1,411.52    $    1,395.96    $    1,411.52
                                                          -------------    -------------    -------------    -------------


Net loss per Unit of Limited Partnership
  Interest and General Partner Unit equivalent            $     (166.45)   $     (134.56)   $     (338.17)   $     (126.41)
                                                          -------------    -------------    -------------    -------------
</TABLE>

See Notes to Financial Statements 

                                        4

<PAGE>



                  Smith Barney Mid-West Futures Fund L.P. II
                         Notes to Financial Statements
                                 June 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. Smith Barney Inc. ("SB"), an affiliate of
the General Partner,  acts as commodity broker for the Partnership.  All trading
decisions for the  Partnership  are being made by John W. Henry & Company,  Inc.
(the  "Advisor").  On November 28, 1997,  Smith Barney  Holdings Inc. was merged
with Salomon Inc to form Salomon Smith Barney Holdings Inc.  ("SSBH"),  a wholly
owned subsidiary of Travelers Group. SB is a wholly owned subsidiary of SSBH.

      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 June 30, 1998 and the results of its  operations  for the three and
six months ended June 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 six  months  ended
June 30, 1998 and 1997 were as follows:

                                  THREE-MONTHS ENDED         SIX-MONTHS ENDED
                                      JUNE  30,                  JUNE 30,
                                  1998        1997           1998        1997

Net realized and unrealized
 losses                        $ (162.27)   $ (130.93)   $ (330.36)   $ (117.01)
Interest income                    14.20        14.57        31.10        29.86
Expenses                          (18.38)      (18.20)      (38.91)      (39.26)
                               ---------    ---------    ---------    ---------

Decrease for period              (166.45)     (134.56)     (338.17)     (126.41)

Net Asset Value per Unit,
 beginning of period            1,562.41     1,546.08     1,734.13     1,537.93
                               ---------    ---------    ---------    ---------

Net Asset Value per Unit,
 end of period                 $1,395.96    $1,411.52    $1,395.96    $1,411.52
                               =========    =========    =========    =========


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  SB  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 June 30, 1998 and Decmber 31, 1997 was $(4,467,794) and $4,837,350,
respectively,  and the average fair value during the six and twelve  months then
ended, based on monthly calculation, was $610,094 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 SB.

      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 June 30, 1998, the
notional or contractual amounts of the Partnership's  commitment to purchase and
sell these  instruments was  $915,823,511  and  $988,517,835,  respectively,  as
detailed  below.  All of these  instruments  mature  within one year of June 30,
1998.  However,  due  to  the  nature  of  the  Partnership's  business,   these
instruments may not be held to maturity. At June 30, 1998, the fair value of the
Partnership's  derivatives,  including  options  thereon,  was  $(4,467,794)  as
detailed below.
                                          JUNE 30, 1998
                                     NOTIONAL OR CONTRACTUAL
                                      AMOUNT OF COMMITMENTS
                                   TO PURCHASE     TO SELL          FAIR VALUE

Currencies *                       $119,489,220    $228,922,641    $ (4,497,777)
Interest Rates U.S.                 438,645,513               -         858,050
Interest Rates Non U.S.             357,688,778     706,816,233         392,189
Metals                                        -      38,413,040        (834,535)
Indices                                       -      14,365,921        (385,721)
                                   ------------    ------------    ------------

Totals                             $915,823,511    $988,517,835    $ (4,467,794)
                                   ============    ============    ============


      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 net  unrealized  gain
amount listed for the currency sector represent OTC contracts. All other sectors
listed represent exchange traded contracts.

                                        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 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 second 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 six months  ended June 30,  1998,  Partnership  capital  decreased
22.6% from $101,317,074 to $78,392,770. This decrease was primarily attributable
to net loss from  operations  of  $19,538,441  coupled  with the  redemption  of
1,199.9631  Units resulting in an outflow of $3,385,863 for the six months ended
June 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, SB 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 failure of vendors,  clients,  or  regulators to resolve
their  own Year  2000  compliance  issues  in a timely  manner  could  result in
material financial risk to the Partnership.

Results of Operations

      During the  Partnership's  second quarter of 1998, the net asset value per
Unit decreased 10.7% from $1,562.41 to $1,395.96 as

                                       9

<PAGE>



compared  to the second  quarter  of 1997 in which the net asset  value per Unit
decreased  8.7%.  The   Partnership   experienced  a  net  trading  loss  before
commissions  and expenses in the second  quarter of 1998 of  $7,983,614.  Losses
were recognized in the trading of commodity futures in currencies,  U.S. and non
U.S.  interest  rates,  metals and indices.  The  Partnership  experienced a net
trading loss before  commissions  and expenses in the second  quarter of 1997 of
$6,623,840.  Losses  were  recognized  in the  trading of  commodity  futures in
currencies and U.S. and non U.S.  interest  rates and were  partially  offset by
losses recognized in the trading of 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 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 June 30, 1998  decreased by $71,351 and for the six
months  ended  June  30,  1998,   increased  by  $156,699  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 1998 in addition to negative  trading  performance.  The increase in
interest  income  over the six  month  period  is  primarily  the  result of net
additions on the  Partnership's  equity maintained in cash during the six months
ended December 31, 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
clearing fees for the three months ended June 30, 1998  decreased by $27,760 and
for the six months ended June 30, 1998  increased by $286,291 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 June 30,
1998 decreased

                                       10

<PAGE>



by $41,535 and for the six months  ended June 30, 1998  increased by $114,936 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 June 30, 1998  decreased by $10,384 and for the
six months  ended June 30,  1998  administrative  fees  increased  by $28,978 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.  There were no  incentive  fees earned for the
three and six months ended June 30, 1998 and 1997.


                                       11

<PAGE>



Item 3.     Quantitative and Qualitative Disclosures of Market Risk

      The  fund  is  subject  to  SEC  Financial   Reporting   Release  No.  48,
Quantitative and Qualitative Disclosures of Market Risk and will comply with the
disclosure and reporting requirements in its form 10K 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"), SB
            and The Robinson  Humphrey  Company,  Inc.  ("R- H"), all  currently
            subsidiaries of Salomon Smith Barney Holdings Inc. ("SSBHI"),  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

                                       13

<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.) had been  subject to a stay by agreement of the parties
            which will expire on August 21, 1998.

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:    8/14/98

       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:    8/14/98


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

Date:    8/14/98


                                       15