**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington,D.C. 20549**

**FORM 10-K**
| **x**      | ** ** | **Annual Report Pursuant to Section 13 or 15(d) of  the Securities Exchange Act of 1934**                                            |
|------------|------------|--------------------------------------------------------------------------------------------------------------------------------------|
| ** ** | ** ** | **For the Fiscal Year Ended: December 31,  2006**                                                                               |
| ** ** | ** ** | **or**                                                                                                                               |
| **o**      | ** ** | **Transition Report Pursuant to  Section 13 or 15(d) of the Securities Exchange Act of 1934**

**Commission File Number: 000-50725** |

 

**NESTORPARTNERS**

(Exact name of registrant as specified in its charter)

| **New Jersey**                   | ** ** | **22-2149317**       |
|----------------------------------|------------|----------------------|
| (State or other  jurisdiction of |       | (I.R.S. Employer     |
| incorporation or  organization)  |       | Identification  No.) |

 
| **c/o MILLBURN RIDGEFIELD CORPORATION**   |
|-------------------------------------------|
| **411  West Putnam Avenue**               |
|                                      | **Greenwich,  Connecticut  06830** |   |
| (Address of  principal executive offices) |

 

Registrant’stelephone number, including area code:   **(203) 625-7554**

Securitiesregistered pursuant to Section 12(b) of the Act:   **None**

Securitiesregistered pursuant to Section 12(g) of the Act:    LimitedPartnership Interests

(Title of Class)

Indicate by check mark if the registrant is awell-known seasoned issuer, as defined in Rule 405 of the Securities Act.   Yes o  No x

Indicate by check mark if the registrant is notrequired to file reports pursuant to Section 13 or Section 15(d) of theAct.   Yes o  No x

Indicate by check mark whether the registrant (1) hasfiled all reports required to be filed by Section 13 or 15(d) of the SecuritiesExchange Act of 1934 during the preceding 12 months (or for such shorter periodthat the registrant was required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days.   Yes x  Noo

Indicate by check mark if disclosure of delinquentfilers pursuant to Item 405 of Regulation S-K is not contained herein, and willnot be contained, to the best of registrant’s knowledge, in definitive proxy orinformation statements incorporation by reference in Part III of this Form 10-Kor any amendment to this Form 10-K.  x

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer.  See definition of“accelerated filer and large accelerated filer” in Rule 12b-2 of the ExchangeAct.  (Check one): 

Large accelerated filer o                AcceleratedFiler o                Non-acceleratedfiler x

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12b-2 of theAct).   Yes o  Nox

State the aggregate market value of the voting andnon-voting common equity held by non-affiliates computed by reference to theprice at which the common equity was last sold, or the average bid and askedprice of such common equity, as of the last business day of the registrant’smost recently completed second fiscal quarter.

Not applicable.

 

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**DocumentsIncorporated by Reference**

Registrant’s Financial Statements for the years endedDecember 31, 2006, 2005 and 2004 with Report of Independent Registered PublicAccounting Firm, the annual report to security holders for the fiscal yearended December 31, 2006, is incorporated by reference into Part II Item 8 andPart IV hereof and filed as an exhibit herewith.

 

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PART I

Item1.    Business

(a)          General development of business

Nestor Partners (the “Partnership”)is a limited partnership organized December 13, 1976 under the New JerseyUniform Limited Partnership Act.  Thegeneral partner of the Partnership is Millburn Ridgefield Corporation, aDelaware corporation (the “General Partner”).

The Partnership’sbusiness is trading a diversified portfolio of futures, forward and relatedoption contracts on currencies, metals, financial instruments, stock indices,energy and agricultural commodities. Approximately 30%-45% of the Partnership’s trading, measured by theGeneral Partner’s assessment of risk, currently takes place in the currencymarkets.  The Partnership began itstrading activities in February 1977.  Alltrading decisions are made by the General Partner.

The General Partner wasorganized in May 1982 to manage discretionary accounts in futures and forwardmarkets.  It is the corporate successorto a futures trading and advisory organization which has been continuouslymanaging assets in the currency and futures markets using quantitative,systematic techniques since 1971.  TheGeneral Partner has been registered with the Commodity Futures TradingCommission (“CFTC”) as a “commodity pool operator” since July 1, 1982 and as a “commoditytrading advisor” since September 13, 1984 and is a member of National FuturesAssociation.  The Millburn Corporation,an affiliate of the General Partner, performs certain accounting,administrative and operating functions for the Partnership and other commoditypools and investment partnerships managed by the General Partner.

As of December 31, 2006,the aggregate net asset value of the Partnership was $147,701,841.  The value at December 31, 2006 of a limitedpartner’s initial $1,000 investment in the Partnership on February 1, 1977would be $43,344.14, based on the actual rate of return a limited partner’sinvestment in the Partnership would have recognized, net of the highest chargesapplicable to a limited partner, during each month in the calculation periodfrom February 1977 to December 31, 2006.

The Partnership’s fiscalyear ends on December 31.

The Partnership willterminate on October 31, 2017 or upon the prior withdrawal, insolvency ordissolution of the General Partner or occurrence of any event legally requiringtermination.

The Partnership is not a registered investment companyor mutual fund.  Accordingly, investorsin the Partnership do not have the protections afforded by the InvestmentCompany Act of 1940, as amended.

(b)           Financial information about industry segments

The Partnership’s business constitutes only onesegment, i.e., a speculative commodity pool. The Partnership does not engage in sales of goods and services.  Financial information regarding thePartnership’s business is set forth in Item 6 “Selected Financial Data” and inthe Partnership’s Financial Statements included as Exhibit 13.01 to thisreport.

(c)           Narrative description of business

The Partnership engagesin the speculative trading of futures, options on futures and forwardcontracts.  The Partnership’s soletrading adviser is the General Partner. The Partnership trades, pursuant to the General Partner’s DiversifiedPortfolio, in the agricultural, metals, energy, interest rate and stock indexfutures and futures options markets and in the currency markets, tradingprimarily forward contracts in the interbank market.  The objective of the General Partner’strading method is to participate in all major sustained price moves in themarkets traded. The General Partner’s approach is medium-term to long-term innature. The General Partner makes trading decisions pursuant to its tradingmethod, which includes technical trend analysis, certain non-trend-followingtechnical systems, and money management principles, which may be revised fromtime to time.

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The General Partner isengaged in an ongoing research effort to improve its trading methods and toapply its quantitative analytic expertise to new financial products.

Successful systematicfutures trading depends on two factors; development and selection of the trading systems used in each market,and allocation of portfolio risk among the markets available for trading.

Market environmentschange over time, and particular systems may perform well in one environmentbut poorly in another.  Likewise,portfolio sectors and individual markets go through periods where systematictrading is very profitable and other periods where no system makes any money.

The goal of the GeneralPartner’s research has been to develop and select a mix of systems in eachmarket and allocate risk across a wide array of markets, so as to containoverall portfolio risk in the targeted range, while allowing exposure toprofitable trend opportunities.  Over thelast 30 years, the General Partner has developed hundreds of trading systems.These trading systems generate buy or sell decisions in a particular marketbased on the direction of price movements in the market.

Of course, systems can bematerially different — better in some periods and worse in others.  The main distinguishing features aretime-frame over which systems work (intra-day to long-term), the type of datafed into them (granularity [ticks to weeks/months], type [market or economicstatistics], source [cash, futures or options markets]), and the objective ofthe system (profiting from trends, trading-ranges or volatility).  No single approach will work all thetime.  Therefore, the General Partner’sobjective is to have several approaches operating at all times.  Since the early 1980’s, the General Partnerhas selected multiple systems for each market.

When arriving at theportfolio allocation, the General Partner seeks maximum diversification subjectto liquidity constraints.  The marketstraded and allocations are reviewed monthly, although changes may occur lessfrequently.  The following factors areconsidered in constructing a universe of markets to trade for eachportfolio:  profitability, correlation ofmarket performance, liquidity of markets, professional judgment, desired diversificationand transaction costs.  Once the universeof markets is established, the General Partner’s simulation and optimizationtechniques help determine which markets to include in the portfolio.  The current allocation to any market in theportfolio does not exceed 4.5%.

Risk is a function ofboth price level and price volatility. In attempting to assess market volatility as a means of monitoring andevaluating risk, the General Partner uses its volatility overlay as a part ofindividual market risk management. This system is designed to measure the riskin the portfolio’s position in each market and signals a decrease in positionsize when risk increases and an increase in position size when risk decreases.The General Partner’s volatility overlay maintains overall portfolio risk anddistribution of risk across markets within designated ranges.  It is applied to the systematic strategiesdescribed above.  A secondary benefit ofthe volatility overlay can be timely profit taking.  Because markets tend to become more volatileafter a profitable trend has been long underway, the volatility overlay oftensignals position reductions before trend reversals.

In addition to the volatility overlay, the GeneralPartner’s risk management focuses on money management principles applicable tothe portfolio as a whole such as portfolio diversification and control ofleverage and portfolio size.  There are,however, no restrictions on the amount of leverage the General Partner may useat any time.

Pursuant to the Amended and Restated Agreement ofLimited Partnership (the “Limited Partnership Agreement”), the General Partnerreceives a flat-rate monthly brokerage fee equal to 0.458 of 1% of themonth-end Net Assets (a 5.5% annual rate). The General Partner charges less than the annual brokerage rate of 5.5%to those subscribers who subscribe without incurring the selling commissionpaid by the General Partner, or subscribe incurring reduced selling commissionspaid by the General Partner.  Thesereductions have no effect on other investors. The General Partner also receives a profit share equal to 20% of any newtrading profit as defined, determined as of the end of each calendar year.  The annual profit share is calculated net ofbrokerage fees and administrative expenses.

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The Partnership pays its administrative expenses,including costs incurred in connection with the continuing offering of thelimited partnership interests (“Interests”), and any extraordinary expenseswhich it may incur.  The General Partnerpays all the routine costs of executing and clearing the Partnership’s tradesand all compensation due to the selling agents.

UBS Financial Services Inc. (“UBS”), Deutsche BankSecurities, Inc. “Deutsche Bank”), Merrill Lynch, Pierce, Fenner & SmithInc. (“Merrill Lynch”), Credit Suisse Securities (USA) LLC (“Credit Suisse”)and First International Banque SA (UK Branch) (“Fimat”) act as the futuresbrokers for the Partnership.  ThePartnership executes currency forward trades with several brokers and banks,including Morgan Stanley & Co. Incorporated and clears all such trades withMorgan Stanley & Co. Incorporated, serving as prime broker.  The Partnership pays “bid asked” spreads onits forward trades, as such spreads are incorporated into the pricing offorward contracts.  The General Partnermonitors the Partnership’s trades to ensure that the prices it receives arecompetitive.

Each partner has a capital account, and its initialbalance is the amount of his contribution to the Partnership.  There is also a new profit memo account whichis credited with the General Partner’s profit share on redeemed Interests andany excess of the General Partner’s profit share over the Partnership’s taxablegains at year-end.  The Net Assets of thePartnership are determined monthly, and any increase or decrease from the endof the preceding month is added to or subtracted from the accounts (includingthe new profit memo account) of the partners in the ratio that each accountbears to all accounts.  The credits tothe new profit memo account are charged to the accounts of the limitedpartners.

At the end of each fiscalyear the Partnership’s taxable capital gain or loss (including gains and losseson open positions in certain futures and forward contracts which are “marked-to-market”at the end of the Partnership’s fiscal year) and ordinary income and expenseare allocated among the partners for tax purposes, and each partner who is aUnited States citizen or resident is required to include on his personal incometax return his distributive share of such items.  Items of operating income such as interestand items of operating expense such as legal, accounting and filing fees thataccrued during each month will be allocated among the persons who were partnersduring each month in the ratio that each partner’s capital account bears to allpartners’ capital accounts.

Net capital gain isallocated first to the General Partner up to the amount of the General Partner’sprofit share for the year and then up to the amount of any balance in the newprofit memo account.  Net capital gain isnext allocated to each partner who has redeemed all or a portion of hisInterests during the year to the extent that the amount received on redemptionexceeds the partner’s Tax Basis.  Apartner’s Tax Basis is the amount paid for the Interests redeemed plus nettaxable income less taxable losses previously allocated to such Interests andless amounts previously distributed to the partner with respect to the redeemedInterests.  Remaining net capital gain isallocated among the partners whose capital accounts have increased from theirTax Basis.  The allocation to eachpartner is in the ratio that his increase bears to all partners’increases.  Net capital gain remaining isallocated to each partner in the ratio that his capital account value bears tothe total capital account value of all partners.

Net capital loss isallocated first to each limited partner who has redeemed all or a portion ofhis Interests during the year to the extent that the amount the partner’s TaxBasis for the Interests redeemed exceeds the amount received onredemption.  Remaining net taxablecapital loss is allocated among the partners whose capital accounts havedecreased from their Tax Basis.  Theallocation to each partner is in the ratio that his decrease bears to allpartners’ decreases.  Net capital lossremaining is allocated to each partner in the ratio that his capital accountvalue bears to the total capital account value of all partners.

The Partnership’s cashand U.S. Treasury instruments are used by the Partnership to engage in itstrading activities and as reserves to support that trading.  The Partnership’s assets deposited with thePartnership’s futures brokers as margin are maintained in “customer segregatedfunds accounts” or “foreign futures and foreign options secured amount accounts”and are held in cash, or U.S. Treasury instruments.  Partnership assets not deposited as marginare maintained in bank or brokerage accounts and are held primarily in bankmoney market funds or U.S. Treasury instruments.

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The Partnership does notengage in lending (other than through permitted securities investments).  The General Partner does not anticipatemaking any distributions of Partnership profits, if any.

Regulation

Under the Commodity Exchange Act, as amended (the “CEA”),commodity exchanges and futures trading are subject to regulation by theCFTC.  National Futures Association (“NFA”),a “registered futures association” under the CEA, is the only non-exchangeself-regulatory organization for futures industry professionals.  The CFTC has delegated to NFA responsibilityfor the registration of “commodity trading advisors,” “commodity pooloperators,” “futures commission merchants,” “introducing brokers” and theirrespective associated persons and “floor brokers” and “floor traders.”  The CEA requires commodity pool operators andcommodity trading advisors, such as the General Partner, and commodity brokersor futures commission merchants, such as the UBS, Merrill Lynch, Deutsche Bank,Credit Suisse and Fimat to be registered and to comply with various reportingand record keeping requirements.  TheCFTC may suspend a commodity pool operator’s or trading advisor’s registrationif it finds that its trading practices tend to disrupt orderly marketconditions or in certain other situations. In the event that the registration of the General Partner as a commoditypool operator or a commodity trading advisor were terminated or suspended, theGeneral Partner would be unable to continue to manage the business of thePartnership.  Should the General Partner’sregistration be suspended, termination of the Partnership might result.

In addition to such registration requirements, theCFTC and certain commodity exchanges have established limits on the maximum netlong or net short position which any person may hold or control in particularcommodities.  Most exchanges also limitthe changes in futures contract prices that may occur during a single tradingday.   Currency forward contracts are notsubject to regulation by any United States Government agency.

(i)   through (xii) - not applicable.

(xiii)   the Partnership has noemployees.

(d)           Financial information aboutgeographic areas

The Partnership does not engage in material operationsin foreign countries (although it does trade from the United States in foreigncurrency forward contracts and on foreign futures exchanges), nor is a materialportion of its revenues derived from foreign customers.

(e)           Availableinformation

The Partnership files quarterly, annual and currentreports with the Securities and Exchange Commission (“SEC”).  These reports are available to read and copyat the SEC’s Public Reference Facilities in Washington, D.C. at 100 F Street,N.E., Room 1580, Washington, D.C. 20549. Please call the SEC’s toll free number, 1-800-SEC-0330, for furtherinformation.  The Partnership does notmaintain a website where these reports are posted.  However, the Partnership’s filings are postedon the SEC’s website at http://www.sec.gov.

Item1A. Risk Factors

***Riskof Loss***.  An investor may incur significant losses onan investment in the Partnership.  TheGeneral Partner cannot provide any assurance that investors will not lose allor substantially all of their investment.

***PastPerformance Records.***   Although the General Partner has significantexperience trading customer funds in the futures markets, and the Partnershipitself has traded successfully since inception, **PAST PERFORMANCE IS NOT NECESSARILYINDICATIVE OF FUTURE RESULTS. ****R**eturns recognizedby any given investor are materially affected by when that investor invested inthe Partnership.

***Futuresand Forward Contract Trading Is Volatile***.  Trading inthe futures and forward markets typically results in volatile performance.  Several occasions in the recent past havewitnessed sudden and major reversals in these markets, resulting in majorlosses for traders.  The performancerecord of the General Partner’s trading has exhibited a considerable degree ofvolatility.

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***HighlyLeveraged Trading.***   The low margin deposits normally required in futuresand forward trading permit an extremely high degree of leverage.  The Partnership may frequently hold positionswith a gross value as much as ten or more times of the Partnership’s NetAssets.  Consequently, even a slightmovement in the prices of its open positions could result in significantlosses.

***MarketsMay Be Illiquid or Disrupted.***   Most United States futures exchangeslimit fluctuations in some futures contract prices during a single day byregulations referred to as “daily limits.” During a single trading day no trades may be executed in such contractsat prices beyond the daily limit.  Oncethe price of a futures contract has increased or decreased to the limit point,positions can be neither taken nor liquidated. Futures prices have occasionally moved to the daily limit for severalconsecutive days with little or no trading. Similar occurrences could prevent the Partnership from promptlyliquidating unfavorable positions and subject the Partnership to substantiallosses.  Also, the CFTC or exchanges maysuspend or limit trading.  Trading onnon-United States exchanges may also be subject to price fluctuation limits andare otherwise subject to periods of significant illiquidity.  Trading in the forward currency markets isnot subject to daily limits, although such trading is also subject to periodsof significant illiquidity.

***Failureof Brokerage Firms and Forward Market Participants.***   The CEA, as amendedrequires a clearing broker to segregate all funds received from such broker’scustomers in respect of futures (but not forward) transactions from such broker’sproprietary funds.  If any of thePartnership’s commodity brokers were not to do so to the full extent requiredby law, or in the event of a substantial default by one or more of such broker’sother customers, the assets of the Partnership might not be fully protected inthe event of the bankruptcy of such broker. Furthermore, in the event of such a bankruptcy, the Partnership would belimited to recovering only a *pro rata* shareof all available funds segregated on behalf of the affected commodity broker’scombined customer accounts, even though certain property specifically traceableto the Partnership (for example, United States Treasury bills or cash depositedby the Partnership with such broker) was held by such broker.  Commodity broker bankruptcies have occurredin which customers were not able to recover from the broker’s estate the fullamount of their funds on deposit with such broker and owing to them.  Commodity broker bankruptcies are not insuredby any governmental agency, and investors would not have the benefit of anyprotection such as that afforded customers of bankrupt securities broker-dealersby the Securities Investors Protection Corporation.

In respect of its forwardtrading, the Partnership will be subject to the risk of the inability orrefusal to perform with respect to such contracts on the part of the principalsor agents with or through which the Partnership trades.  Any failure or refusal to discharge theircontractual obligations by the counterparties with which the Partnership dealson the forward markets, whether due to insolvency, bankruptcy or other causes,could subject the Partnership to substantial losses.  The Partnership will not be excused fromperformance under any forward contracts into which it has entered due todefaults under other forward contracts which in the General Partner’s strategywere to have substantially “covered” the former.  The Partnership deals in the forward marketsonly with major financial institution counterparties which the General Partnerconsiders to be creditworthy.  However,defaults have occurred in the forward markets, and the risk of such defaultscannot be eliminated from the Partnership’s trading.

***CertainSpecial Considerations Related to Forward Trading.*** ** **None of the CFTC, NFA, futuresexchanges or banking authorities currently regulate forward trading.  Because a principal portion of thePartnership’s currency trading takes place in the forward markets, prospectiveinvestors must recognize that much of the Partnership’s activity takes place inunregulated markets rather than on futures exchanges subject to thejurisdiction of the CFTC or other regulatory bodies.  Partnership funds on deposit with thecurrency forward counterparties with which the Partnership trades are notprotected by the same segregation requirements imposed on CFTC regulatedcommodity brokers in respect of customer funds deposited with them.  Although the Partnership deals only withmajor financial institutions as currency forward counterparties, the insolvencyor bankruptcy of a currency forward counterparty could subject the Partnershipto the loss of its entire deposit with such counterparty.  The forward markets are wellestablished.  However, it is impossibleto predict how, given certain unusual market scenarios, the unregulated natureof these markets might affect the Partnership.

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***SwapTrading***.  The Partnership may trade swaps.  Swaps involve many of the same risks as thosedescribed above with respect to forward trading.  Swap contracts are not traded on exchanges;rather, banks and dealers act as principals in the swap market.  As a result, the Partnership will be subjectto the risk of the inability or refusal to perform with respect to suchcontracts on the part of the counterparties with which the Partnershiptrades.  The Partnership intends to enterinto swaps only with highly creditworthy banks and dealers.  The swap market is generally not regulated byany U.S. or non-U.S. governmental authority. Speculative position limits are not applicable to swap transactions,although the counterparties with which the Partnership will deal may limit thesize or duration of positions available to the Partnership as a consequence ofcredit considerations.  Finally, swapsmay be illiquid and participants in the swap market are not required to makecontinuous markets in the swap contracts they trade.

***Tradingin Options.***   TheGeneral Partner has traded futures and forward options on behalf of thePartnership in the past and may trade such instruments in the future.  Although successful options trading requiresmany of the same skills as successful futures and forward trading, the risksinvolved are somewhat different.  Forexample, the assessment of near-term market volatility - which is directlyreflected in the price of outstanding options - can be of much greatersignificance in trading options than it is in many long-term futuresstrategies.  The use of options can beextremely expensive if market volatility is incorrectly predicted.

***Tradingon Futures Exchanges Outside the United States.***   The General Partnertrades on futures exchanges outside the United States on behalf of thePartnership.  Trading on such exchangesis not regulated by any United States government agency and may involve certainrisks not applicable to trading on United States exchanges.  For example, some non-U.S. exchanges, incontrast to United States exchanges, are “principals’ markets” similar to theforward markets in which performance is the responsibility only of theindividual member with whom the Partnership has entered into a futures contractand not of any exchange or clearing corporation.  In such cases, the Partnership will besubject to the risk of the inability or refusal to perform with respect theindividual member with whom the Partnership has entered into a futurescontract.  Trading on foreign exchangesinvolves the additional risks of expropriation, burdensome or confiscatorytaxation, moratoriums, exchange or investment controls and political ordiplomatic disruptions, each of which might materially adversely affect thePartnership’s trading activities.  Intrading on foreign exchanges, the Partnership is also subject to the risk ofchanges in the exchange rates between the United States dollar and thecurrencies in which the foreign contracts are settled.

***SubstantialCharges to Partnership.***   The Partnership is obligated to paythe General Partner brokerage commissions and annual operating expensesregardless of whether the Partnership is profitable.  (Operating expenses are limited to 1/4 of 1%per annum of the average month-end Net Assets of the Partnership.)  In addition, the General Partner receives,with respect to each Interest, a profit share of 20% of any increase in TradingProfits over the previous high point in Trading Profits at the end of eachfiscal year.  Trading Profits are basedupon the increase in value of each Interest at the end of each fiscal year (orwhen an Interest is redeemed) including any unrealized appreciation in openfutures and forward positions.  Suchappreciation may never be realized by the Partnership.

Because investors willpurchase Interests at different times they may recognize different amounts ofTrading Profits.  Each limited partnerwill pay a profit share only on Trading Profits applicable to itsInterests.  Investors who make multipleinvestments in the Partnership will receive separate Interests for purposes oftracking the profit share.   As a result,investors who own multiple Interests may pay a profit share in respect of someof their Interests even if they experience a loss on an aggregate basis.

Forward trading isconducted in a principals’ market in which counterparties buy and sellcurrencies among each other, including a “bid-ask” spread in theirpricing.  Institutions trading in suchmarkets do not pay brokerage commissions in addition to such spreads.  It is not possible to quantify the “bid-ask”spreads paid by the Partnership in respect of its currency trading because itis not possible for the Partnership to know what, if any, profit itscounterparty is making on the forward trades into which it enters.  However, these spreads represent asignificant execution cost to the Partnership.

***TradingDecisions Based on Technical Systems.***   Trading decisions of the GeneralPartner are not determined by analysis of fundamental supply and demandfactors, general economic factors or anticipated world events, but by technicaltrading systems involving trend analysis and other factors and the moneymanagement principles developed by the General Partner and its affiliates.  The profitability of any trading systeminvolving technical trend analysis depends upon the occurrence in the future ofsignificant sustained price moves in at least some of the markets traded.  Without such sustained price moves in atleast some of the markets traded, the General Partner’s trend-following systemsare unlikely to produce profits and the Partnership could suffer significantlosses.

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***DiscretionaryAspects of the General Partner’s Strategies***.  Although theGeneral Partner applies highly systematic strategies, these strategies retaincertain discretionary aspects. Decisions, for example, to adjust the size of positions indicated by thesystematic strategies, which futures contracts to trade and method of orderentry, require judgmental input from the General Partner’s principals.  Discretionary decision-making may result inthe General Partner’s making unprofitable trades in situations when a morewholly systematic approach would not have done so.

***PossibleEffects of Technical Trading Systems.***   There has been, in recent years, asubstantial increase in interest in technical futures trading systems, particularlytrend-following systems.  As the capitalunder the management of trading systems based on the same general principlesincreases, an increasing number of traders may attempt to initiate or liquidatesubstantial positions at or about the same time as the Partnership, orotherwise alter historical trading patterns or affect the execution of trades,to the significant detriment of the Partnership.

Although the Partnershipis as likely to be profitable as unprofitable in up or down markets, there issome tendency for managed futures products — particularly those managed bysystematic, trend-following advisors — to perform similarly during the same orapproximately the same periods. Prospective investors must recognize that, irrespective of the skill andexpertise of the General Partner, the success of the Partnership may besubstantially dependent on general market conditions over which the GeneralPartner has no control.

In addition, there hasbeen an increase in the use of trading systems employing counter-trendtechniques that attempt to profit from the wide use of trend following systemsby running stop points or otherwise.  Theincreased use of such techniques could alter trading patterns the GeneralPartner attempts to exploit to the detriment of the Partnership.

***Changesin Trading Method.***   The General Partner may modify its trading methodwithout approval by or notice to limited partners.  Modifications may include changes in orsubstitution of technical trading systems, risk control overlays, moneymanagement principles and markets traded and introduction of non-technicalfactors and methods of analysis and non-trend-following technical systems andmethods of analysis.  The trading systemsto be utilized by the General Partner are proprietary and confidential.

***PossibleEffects of Speculative Position Limits.***   The CFTC and United States exchangeshave established limits referred to as “position limits” on the maximum netlong or net short speculative futures position which any person may hold or controlin particular futures contracts. Generally, banks and dealers do not impose such limits with respect toforward contracts in currencies.  Allfutures accounts managed by the General Partner and its affiliates are combinedfor position limit purposes.  Withrespect to trading in futures contracts subject to position limits (forexample, corn, wheat, cotton, soybeans, soybean meal and oil), the GeneralPartner may reduce the size of the positions which would otherwise be taken forthe Partnership to avoid exceeding the limits. If position limits are exceeded by the General Partner in the opinion ofthe CFTC or any other regulatory body, exchange or board, the General Partnerwill liquidate positions in all accounts under its management, including the Partnership,as nearly as possible in proportion to respective amounts of equity in eachaccount to the extent necessary to comply with applicable position limits.  However, notwithstanding the foregoing,certain accounts managed by the General Partner may be designed to track aparticular index and the General Partner does not intend to reduce thepositions held in those accounts proportionately, because this would be asource of tracking error.

***OtherClients of the General Partner and Its Affiliates.***   The General Partnermanages futures and forward accounts other than the Partnership, includingaccounts in which the General Partner, its principals and employees havesignificant investments.  The GeneralPartner and its affiliates may manage additional accounts in the future.  It is possible that such accounts may be incompetition with the Partnership for the same or similar positions in thefutures and forward markets.  The GeneralPartner intends generally to use similar trading methods for the Partnershipand all other systematic accounts the General Partner and its affiliatesmanage.  The General Partner will notknowingly or deliberately use systems for any account that are inferior tosystems employed for any other account or favor any account over any otheraccount.  No assurance is given, however,that the results of the Partnership’s trading will be similar to that of otheraccounts concurrently managed by the General Partner or its affiliates.

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***PossibleAdverse Effects of Increasing the Assets Managed by the General Partner.*** The General Partner has not agreed to limit the amount of additionalequity which it may manage.  The rates ofreturn achieved by trading advisors often tend to degrade as assets undermanagement increase.  There can be noassurance that the General Partner’s strategies will not be adversely affectedby additional equity, including the Partnership’s account, accepted by theGeneral Partner.

***Dependenceon Key Personnel.***   Despite the systematic methods used by the GeneralPartner, it is dependent on the services of a limited number of keypersons.  The loss of any such personscould make it more difficult for the General Partner to continue to manage thePartnership.

***LimitedAbility to Liquidate Investment in Interests.***   An investment in anInterest cannot be immediately liquidated by a limited partner.  Interests may be transferred only underlimited circumstances and no market for Interests will exist at any time.  A limited partner can liquidate hisinvestment through redemption of his Interest. A limited partner may require the Partnership to redeem all or a portionof his Interest as of the last day of any month on fifteen days’ written noticeto the General Partner.  Because noticesof redemption must be submitted significantly in advance of the actualredemption date, the value received upon redemption may differ significantlyfrom the value of the Interest at the time a decision to redeem is made.  Furthermore, because redemptions are onlypermitted at month-end, investors are not able to select the value, or even theapproximate value, at which they will redeem their Interests.

***Conflictsof Interest.***   ThePartnership will be subject to a number of actual and potential conflicts ofinterest.  Such conflicts may include,among other things, the possibility of the General Partner, a commodity brokerfor the Partnership or any of their respective affiliates favoring othercustomer accounts or their own proprietary trading in certain respects overthat of the Partnership.

***LimitedPartners Will Not Participate in Management.***   Purchasers of Interests will not beentitled to participate in the management of the Partnership or the conduct ofits business.  Such authority is vestedsolely in the General Partner.

***ProfitsIncluded in Taxable Income Whether or Not Cash or Other Property isDistributed.***   ThePartnership is not required to make any distributions of cash or other propertyto the partners.  If the Partnership hastaxable income for a fiscal year, such income will be taxable to limitedpartners who are U.S. taxpayers in accordance with their allocable shares ofthe Partnership’s profits, irrespective of the fact that no cash or otherproperty has been distributed to them. Accordingly, the tax liability of limited partners for any profits ofthe Partnership will almost certainly exceed any distributions received fromit.

***PossibleLimitation on Deductibility of “Investment Advisory Fees.”***   Noncorporate investorsmay be required to treat the amount of any incentive profit shares as well as aportion of the brokerage commissions and other ordinary expenses of thePartnership, as “investment advisory fees” which may be subject to substantialrestrictions on deductibility for federal income tax purposes.  Any such classification of these amountscould substantially increase the amount of the Partnership’s profits (if any)subject to tax.

***“Passive”Losses.***  Anyincome derived from the Partnership’s trading activities will constitute “PortfolioIncome” or other income not from a passive activity, which means that lossesresulting from a limited partner’s other passive activities cannot be offsetagainst such income.

***Possibilityof Tax Audit.***  Therecan be no assurance that the Partnership’s tax returns will not be audited bythe Internal Revenue Service or that adjustments to such returns will not bemade as a result of such an audit.  If anaudit results in an adjustment, limited partners may be required to payadditional taxes, plus interest and possibly penalties and additions to tax.

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***PossibleChanges in the Tax Code.***  In recent years, the United States federalincome tax law has undergone repeated and substantial changes, a number ofwhich have been materially adverse, or potentially materially adverse, toinvestment partnerships.  It isimpossible to predict what the effect of future changes in the Internal RevenueCode of 1986, as amended, will be on an investment in the Partnership.

***StatutoryRegulation.***   Althoughthe Partnership and the General Partner are subject to regulation by the CFTC,the Partnership is not registered under the Investment Company Act of1940.  Investors are, therefore, notaccorded the protection provided by such legislation.

***FutureRegulatory and Market Changes.***   The regulation of the United Statescommodities markets has undergone substantial change in recent years, a processwhich is expected to continue.  Inaddition, a number of substantial regulatory changes are pending or in progressin certain foreign markets.  The effectof regulatory change on the Partnership is impossible to predict but could bematerial and adverse.

Some concern has beenexpressed by various governmental authorities that the impact of speculativepools of capital, such as the Partnership, on international currency trading ismaking it significantly more costly and difficult for central banks andgovernments to influence exchange rates. This and similar concerns could lead to pressure to restrict the accessof speculative capital to these markets.

In addition to regulatorychanges, the economic features of the markets to be traded by the Partnershiphave undergone, and are expected to continue to undergo, rapid and substantialchanges as new strategies and instruments have been introduced.  Furthermore, the number of participants, particularlyinstitutional participants, in the futures and forward markets appears to haveexpanded substantially.  There can be noassurance as to how the General Partner will perform given the changes to, andincreased competition in, the marketplace.

Item2.   Properties

The Partnership does not own or use any physicalproperties in the conduct of its business. The General Partner or an affiliate perform administrative services forthe Partnership from their offices.

Item3.   Legal Proceedings

The General Partner is not aware of any pending legalproceedings to which either the Partnership is a party or to which any of itsassets are subject.  In addition thereare no pending material legal proceedings involving the General Partner.

Item4.   Submission of Matters to a Vote of Security Holders

None.

PART II

Item 5.   Market for the Registrant’s Common Equity and

          Related Stockholder Matters

(a)   Market Information.

There is no trading market for the Interests, and noneis likely to develop.  Interests may beredeemed upon  15 business days’ writtennotice to the General Partner at their net asset value as of the last day ofany month, subject to certain early redemption charges.

(b)   Holders.

As of December 31, 2006, there were 497 holders of Interests.

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(c)   Dividends.

No distributions or dividends have been made on theInterests, and the General Partner has no present intention to make any.

(d)   Securities Authorized forIssuance Under Equity Compensation Plans.

None.

(e)   Recent Sales of UnregisteredSecurities; Use of Proceeds from Registered Securities.

The Partnership did not sell any unregisteredsecurities within the past three years which have not previously been includedin the Partnership’s Quarterly Reports on Form 10-Q or in a Current Report onForm 8-K.

(f)   Issuer Purchases of EquitySecurities.

Pursuant to the Partnership’s Agreement of LimitedPartnership, limited Partners may withdraw capital from their capital accountsin Partnership as of the end of each calendar month.  The withdrawal of capital by limited partnershas no impact on the value of the capital accounts of other limited partners.

The following table summarizes limited partnerwithdrawals during the fourth calendar quarter of 2006:
| **Month**          | ** ** | ** ** | **Limited Partners  Amount withdrawn** | ** ** | **Special Limited Partners  Amount withdrawn** | ** ** |
|--------------------|------------|------------|--------------------------------------------------|------------|---------------------------------------------------------------|------------|
|               |       |       |                                             |       |                                                          |
| October 31, 2006   |       | $          | 8,436,321                                        |       | $                                                             | 371        |   |
| November 30,  2006 |       | $          | 5,923,369                                        |       | —                                                        |       |
| December 31,  2006 |       | $          | 11,560,400                                       |       | $                                                             | 510,630    |   |
| Total              |       | $          | 25,920,090                                       |       | $                                                             | 511,001    |   |

 

Item6.   Selected Financial Data

The following is a summary of operations for thefiscal years 2006, 2005, 2004, 2003 and 2002 and total assets of thePartnership at December 31, 2006, 2005, 2004, 2003 and 2002.
| ** **                                         | ** ** | **For the Year  Ended  December 31,  2006** | ** **  | **For the Year  Ended  December 31,  2005** | ** ** | **For the Year   Ended  December 31,   2004** | ** ** | **For the Year   Ended  December 31,   2003** | ** **  | **For the Year   Ended  December 31,   2002** | ** ** |
|----------------------------------------------------|------------|------------------------------------------------------------|-------------|------------------------------------------------------------|------------|------------------------------------------------------------------------|------------|------------------------------------------------------------------------|-------------|------------------------------------------------------------------------|------------|
| Income Statement  Items:                           |       |                                                       |        |                                                       |       |                                                                   |       |                                                                   |        |                                                                   |       |
|                                               |       |                                                       |        |                                                       |       |                                                                   |       |                                                                   |        |                                                                   |       |
| Interest income                                    |       | $                                                          | 8,039,516   |                                                       | $          | 4,819,054                                                              |       | $                                                                      | 2,406,435   |                                                                   | $          | 2,061,312 |   | $ | 2,985,561 |   |
| Total net  realized and unrealized gains (losses)* |       | $                                                          | 13,862,815  |                                                       | $          | 9,676,626                                                              |       | $                                                                      | (510,071    | )                                                                      | $          | 6,747,761 |   | $ | 38,834,784 |   |
|                                               |       |                                                       |        |                                                       |       |                                                                   |       |                                                                   |        |                                                                   |       |
| Expenses:                                          |       |                                                       |        |                                                       |       |                                                                   |       |                                                                   |        |                                                                   |       |
| Brokerage  commissions                             |       | $                                                          | 4,317,248   |                                                       | $          | 4,802,240                                                              |       | $                                                                      | 5,497,025   |                                                                   | $          | 5,378,592 |   | $ | 4,580,773 |   |
| Administrative  expenses (including custody fees)  |       | $                                                          | 475,795     |                                                       | $          | 460,610                                                                |       | $                                                                      | 528,584     |                                                                   | $          | 456,873 |   | $ | 393,610 |   |
| Profit share                                       |       | $                                                          | 2,092,010   |                                                       | $          | 1,140,619                                                              |       | $                                                                      | 484,760     |                                                                   | $          | 668,526 |   | $ | 3,393,398 |   |
|                                               |       |                                                       |        |                                                       |       |                                                                   |       |                                                                   |        |                                                                   |       |
| Net Income  (loss)                                 |       | $                                                          | 15,017,278  |                                                       | $          | 8,092,211                                                              |       | $                                                                      | (4,614,005  | )                                                                      | $          | 2,305,082 |   | $ | 33,452,564 |   |
|                                               |       |                                                       |        |                                                       |       |                                                                   |       |                                                                   |        |                                                                   |       |
| Balance Sheet  Items:                              |       |                                                       |        |                                                       |       |                                                                   |       |                                                                   |        |                                                                   |       |
| Total assets                                       |       | $                                                          | 163,312,251 |                                                       | $          | 180,964,978                                                            |       | $                                                                      | 209,518,483 |                                                                   | $          | 214,486,737 |   | $ | 145,414,744 |   |
| Total partners’ capital                       |       | $                                                          | 147,701,841 |                                                       | $          | 170,951,921                                                            |       | $                                                                      | 193,578,138 |                                                                   | $          | 210,664,198 |   | $ | 140,956,833 |   |

 

*From trading of futures and forward contracts,foreign exchange transactions and U.S. Treasury obligations

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Item 7.   Management’s Discussion and Analysis of Financial

Condition and Results of Operations

Reference is made to “Item 6.  Selected Financial Data” and “Item8.  Financial Statements andSupplementary Data.”  The informationcontained therein is essential to, and should be read in conjunction with, thefollowing analysis.

Capital Resources

Interests may be offered for sale as of the beginning,and may be redeemed as of the end, of each month.

The amount of capital raised for the Partnershipshould not have a significant impact on its operations, as the Partnership hasno significant capital expenditure or working capital requirements other thanfor monies to pay trading losses, brokerage commissions and charges.  Within broad ranges of capitalization, theGeneral Partner’s trading positions should increase or decrease in approximateproportion to the size of the Partnership.

The Partnership raises additional capital only throughthe sale of Interests and capital is increased through trading profits (ifany).  The Partnership does not engage inborrowing.

The Partnership trades futures, options and forwardcontracts, and may trade swap contracts, on interest rates, commodities,currencies, metals, energy and stock indices. Risk arises from changes in the value of these contracts (market risk)and the potential inability of counterparties or brokers to perform under theterms of their contracts (credit risk). Market risk is generally to be measured by the face amount of thefutures positions acquired and the volatility of the markets traded.  The credit risk from counterpartynon-performance associated with these instruments is the net unrealized gain,if any, on these positions plus the value of the margin or collateral held bythe counterparty.  The risks associatedwith exchange-traded contracts are generally perceived to be less than thoseassociated with over-the-counter transactions, because exchanges typically (butnot universally) provide clearinghouse arrangements in which the collectivecredit (in some cases limited in amount, in some cases not) of the members ofthe exchange is pledged to support the financial integrity of the exchange.  In over-the-counter transactions, on theother hand, traders must rely solely on the credit of their respectiveindividual counterparties.  Margins whichmay be subject to loss in the event of a default, are generally required inexchange trading, and counterparties may require margin or collateral in theover-the-counter markets.

The General Partner has procedures in place to controlmarket risk, although there can be no assurance that they will, in fact,succeed in doing so.  These proceduresprimarily focus on (1) real time monitoring of open positions;(2) diversifying positions among various markets; (3) limiting theassets committed as margin, generally within a range of 12% to 35% of anaccount’s Net Assets at exchange minimum margins, (including imputed margins onforward positions) although the amount committed to margin at any time may besubstantially higher; (4) prohibiting pyramiding (that is, usingunrealized profits in a particular market as margin for additional positions inthe same market); and (5) changing the equity utilized for trading by anaccount solely on a controlled periodic basis rather than as an automaticconsequence of an increase in equity resulting from trading profits.  The Partnership controls credit risk bydealing exclusively with large, well capitalized financial institutions asbrokers and counterparties.

The financial instruments traded by the Partnershipcontain varying degrees of off-balance sheet risk whereby changes in the marketvalues of the futures and forward contracts underlying the financialinstruments or the Partnership’s satisfaction of the obligations may exceed theamount recognized in the statement of financial condition of the Partnership.

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Due to the nature of the Partnership’s business,substantially all its assets are represented by cash and United Statesgovernment obligations, while the Partnership maintains its market exposurethrough open futures and forward contract positions.

The Partnership’s futures contracts are settled byoffset and are cleared by the exchange clearinghouse function.  Open futures positions are marked to marketeach trading day and the Partnership’s trading accounts are debited or creditedaccordingly.  Options on futurescontracts are settled either by offset or by exercise.  If an option on a future is exercised, thePartnership is assigned a position in the underlying future which is thensettled by offset.  The Partnership’sspot and forward currency transactions conducted in the interbank market aresettled by netting offsetting positions or payment obligations and by cashpayments.

The value of the Partnership’s cash and financialinstruments is not materially affected by inflation.  Changes in interest rates, which are oftenassociated with inflation, could cause the value of certain of the Partnership’sdebt securities to decline, but only to a limited extent.  More important, changes in interest ratescould cause periods of strong up or down market price trends, during which thePartnership’s profit potential generally increases.  However, inflation can also give rise tomarkets which have numerous short price trends followed by rapid reversals,markets in which the Partnership is likely to suffer losses.

Liquidity

The Partnership’s assets are generally held as cash orcash equivalents which are used to margin the Partnership’s futures and forwardcurrency positions and withdrawn, as necessary, to pay redemptions andexpenses.  Other than potentialmarket-imposed  limitations on liquidity,due, for example, to limited open interest in certain futures markets or todaily price fluctuation limits, which are inherent in the Partnership’s futuresand forward trading, the Partnership’s assets are highly liquid and areexpected to remain so.  During itsoperations through December 31, 2006, the Partnership experienced no meaningfulperiods of illiquidity in any of the numerous markets traded by the GeneralPartner.

Critical AccountingEstimates

The Partnership recordsits transactions in futures and forward currency contracts, including relatedincome and expenses, on a trade date basis. Open futures contracts traded on an exchange are valued at market, whichis based on the closing settlement price on the exchange where the futures contractis traded by the Partnership on the day with respect to which Net Assets arebeing determined.  Open forward currencycontracts are recorded at fair value, based on pricing models  that consider the current market prices (“SpotPrices”) plus the time value of money (“Forward Points”) and contractual pricesof the underlying financial instruments. The Spot Prices and Forward Points for open forward currency contractsare generally based on the 3:00 P.M. New York time prices provided by widelyused quotation service providers on the day with respect to which Net Assetsare being determined.  The Forward Pointsfrom the quotation service providers are generally in periods of one month, twomonths, three months and six months forward while the contractual forwarddelivery dates for the foreign currency contracts traded by the Partnership maybe in between these periods.

The General Partner’spolicy is to calculate the Forward Points for each contract being valued bydetermining the number of days from the date the forward currency contract is beingvalued to its maturity date and then using straight-line interpolation tocalculate the valuation of Forward Points for the applicable forward currencycontract.  The General Partner will alsocompare the calculated price to the forward currency prices provided by dealersto determine whether the calculated price is fair and reasonable.

The preparation offinancial statements in conformity with accounting principles generallyaccepted in the United States of America requires management to make estimatesand assumptions, such as accrual of expenses, that affect the amounts anddisclosures reported in the financial statements.  Based on the nature of the business andoperations of the Partnership, the General Partner believes that the estimatesutilized in preparing the Partnership’s financial statements are appropriateand reasonable, however actual results could differ from these estimates.

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The estimates useddo not provide a range of possible results that would require the exercise ofsubjective judgment.  The General Partnerfurther believes that, based on the nature of the business and operations ofthe Partnership, no other reasonable assumptions relating to the application ofthe Partnership’s critical accounting estimates other than those currently usedwould likely result in materially different amounts from those reported.

Off-Balance SheetArrangements

The Partnership does not engage in off-balance sheetarrangements with other entities.

ContractualObligations

The Partnership does not enter into any contractualobligations or commercial commitments to make future payments of a type thatwould be typical for an operating company or that would affect its liquidity orcapital resources.  The Partnership’ssole business is trading futures and forward currency contracts, both long(contracts to buy) and short (contracts to sell).  All such contracts are settled by offset, notdelivery.  Substantially all suchcontacts are for settlement within four months of the trade date andsubstantially all such contracts are held by the Partnership for less than fourmonths before being offset or rolled over into new contracts with similarmaturities.   The Partnership’s FinancialStatements, included as Exhibit 13.01 to this report, present a CondensedSchedule of Investments setting forth net unrealized appreciation(depreciation) of the Partnership’s open future and forward currency contracts,both long and short, at December 31, 2006.

Results of Operations

*Performance Summary*

The Partnership’s success depends on the GeneralPartner’s ability to recognize and capitalize on trends and other profitopportunities in different sectors of the world economy.  The General Partner’s trading methods areconfidential, so that substantially the only information that can be furnishedregarding the Partnership’s results of operations is its performancerecord.  Unlike most operatingbusinesses, general economic or seasonal conditions have no direct effect onthe profit potential of the Partnership, while, at the same time, its pastperformance is not necessarily indicative of future results.  Because of the speculative nature of itstrading, operational or economic trends have little relevance to thePartnership’s results.  The GeneralPartner believes, however, that there are certain market conditions — forexample, markets with strong price trends — in which the Partnership has abetter opportunity of being profitable than in others.

*2006*

During 2006, the Partnership achieved a net realizedand unrealized gain of $13,862,815 from its trading operations (includingforeign exchange transactions and translations).  Brokerage commissions of $4,317,248,administrative expenses of $448,912 and custody fees of $26,883 were paid oraccrued.  The Partnership paid a profitshare to the General Partner of $2,092,010. Interest income of $8,039,516 offset the Partnership’s expensesresulting in a net gain of $15,017,278. An analysis of the trading gain (loss) by sector is as follows:

| Sector         |   | % Gain (Loss) |   |
|----------------|--------|--------------------|--------|
|           |   |               |   |
| Currencies     |   | (5.88              | )%     |
| Energies       |   | 0.32               | %      |
| Grains         |   | (2.02              | )%     |
| Interest Rates |   | 1.26               | %      |
| Livestock      |   | (0.60              | )%     |
| Metals         |   | 8.78               | %      |
| Softs          |   | (0.31              | )%     |
| Stock Indices  |   | 8.01               | %      |
|           |   |               |   |
| Total          |   | 9.56               | %      |

 

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The Partnership generated a moderate gain for theyear.  Trading of metals and stock indexfutures produced significant profits, and trading of interest rate and energyfutures added small gains.  On the otherhand, currency trading resulted in a sizable loss, and trading activity ingrains, livestock and softs was somewhat negative.

Strong economic conditions worldwide underpinnedindustrial and precious metal prices. Periodic fears of shortages also buoyed the prices of industrialmetals.  Concern about inflation, aweaker U.S. dollar, and reserve diversification out of dollars provided anadded boost to precious metal prices.  Inaddition, introduction of a silver ETF alongside the existing gold ETFsincreased the demand for precious metals. Consequently, long positions in copper, zinc, nickel, tin, aluminum,lead, gold, silver, and platinum were profitable.

Broad based growth, encompassing the emergingmarkets—led by China and India—the U.S., Europe, and by year-end even Japanencouraged investors worldwide.  Hence,long positions in European, Chinese, Hong Kong, and U.S. stock index futureswere profitable.

During the first half of 2006, short positions inshort-term and long-term interest rate futures were widely profitable asinterest rates rose on the back of strong growth, inflation worries, and FedFunds rate increases.  By July, however,there was growing concern that tighter Central Bank monetary policiesthroughout the world might induce a growth slowdown.  As a result, interest rates, particularlylong-term interest rates, came down and losses on short positions offset mostof the earlier gains.  The downwardpressure on long-term interest rates was augmented by OPEC and Bank of Chinapurchases of longer term government bonds for reserve management purposes.  On balance, there was still a modest profitfor the year from interest rate trading.

Currency trading was unprofitable throughout theyear.  Significant volatility withoutsustained trends characterized most currency markets.  Market participants continued to discuss thelikelihood of a weaker dollar, but with the Bank of China tightly controllingthe movements of the yuan, fluctuations in most major currencies wererestrained and no sustained dollar move occurred.

Elsewhere, trading of grains, softs, and livestock wassomewhat unprofitable, while energy trading produced a fractional gain.

*2005*

During 2005, the Partnership achieved a net realizedand unrealized gain of $9,676,626 from its trading operations (includingforeign exchange transactions and translations).  Brokerage commissions of $4,802,240,administrative expenses of $434,264 and custody fees of $26,346 were paid oraccrued.  The Partnership paid a profit shareto the General Partner of $1,140,619. Interest income of $4,819,054 partially offset the Partnership’sexpenses resulting in a net gain of $8,092,211. An analysis of the trading gain (loss) by sector is as follows:

| Sector         |   | % Gain (Loss) |   |
|----------------|--------|---------------|--------|
|           |   |          |   |
| Currencies     |   | (3.35         | )%     |
| Energies       |   | 1.20          | %      |
| Grains         |   | (2.81         | )%     |
| Interest Rates |   | 2.20          | %      |
| Livestock      |   | (0.62         | )%     |
| Metals         |   | 3.11          | %      |
| Softs          |   | (0.31         | )%     |
| Stock Indices  |   | 7.97          | %      |
|           |   |          |   |
| Total          |   | 7.39          | %      |

 

ThePartnership produced a modest gain for the year.  Stock indices were strongly profitable, andto a lesser extent so were cross rate currency positions, metals, energy andinterest rates.  On the other hand,sizable losses resulted from trading dollar currency positions, and lessershortfalls came from trading grains, softs, and livestock.

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Internationalequity indices were highly profitable in 2005. Following some consolidation early in the year, non-U.S. equity indexesmoved broadly higher through year-end. There were gains from long positions in Asian, European, and SouthAfrican stock indices.  Solid growthworldwide propelled equities forward despite the headwinds that came from highenergy prices and rising interest rates. Trading of U.S. stock indices, whichwere range-bound for most of 2005, was not profitable, however.

Stronggrowth of industrial production, especially in China, underpinned demand formetals, and long positions in copper, zinc and platinum generated gains.   Continuing expansion of money supplyworldwide fueled demand for precious metals and long gold and silver positionswere also profitable.

Energyprices were volatile, but still moved somewhat higher on balance for the year,and long positions in crude, heating oil, London gasoil, unleaded gasoline, andkerosene were slightly profitable.  Bythe end of 2005, however, position sizes had been reduced significantly.

Interestrates were quite volatile during 2005. Early in the year, markets expected continuing declines in non-U.S.interest rates, and further advances in short term U.S. rates.  Later on, however, interest rates rose ratherbroadly as the European Central Bank joined the Federal Reserve in raisingofficial rates, as growth in emerging economies remained strong, as Japanshowed evidence of exiting from its protracted slump, and as high prices forenergy and other commodities induced inflation fears that periodically roiledmarkets. In this environment, profits from long non-U.S. interest ratepositions during the first half of 2005 were largely offset by losses fromthese positions in the second half. Indeed, by year-end, the portfolio’s interest rate positions had beenreduced or reversed from long to short, anticipating higher interest rates.

Turningto currencies, cross rate trades based on selling low yield currencies andbuying high interest rate currencies were profitable.  In particular, selling yen and buying theAustralian dollar, Canadian dollar and British pound was profitable, as wasselling the euro and buying Polish zlotys and Canadian dollars.

Dollartrading, however, was unprofitable throughout the year.  The U.S. currency was not able to sustain atrend and exhibited significant volatility, especially during the second halfof 2005. As a result, 14 of the 17 currencies traded versus the dollarregistered losses or no appreciable gain for the year.

Trading of agricultural commodities and livestockgenerated losses.  Prices of corn, wheatand elements of the soybean complex experienced wide swings in 2005, and modestlosses were sustained across the grain sector of the portfolio.  A long sugar position was quite profitable asweather related crop shortages in Brazil and Asia increased demand for thecommodity and prompted short covering as well. However, losses from trading coffee, cotton, and cocoa were more thanoffsetting.  Livestock trading wasmarginally unprofitable.

*2004*

During 2004, thePartnership had a net realized and unrealized loss of $510,071 from its tradingoperations (including foreign exchange transactions and translations).  Brokerage commissions of $5,497,025,administrative expenses of $499,091 and custody fees of $29,493 were paid oraccrued.  The Partnership paid a profitshare to the General Partner of $484,760. Interest income of $2,406,435 partially offset the Partnership’sexpenses resulting in a net loss of $4,614,005. An analysis of the trading gain (loss) by sector is as follows:

| Sector         |   | % Gain (Loss) |   |
|----------------|--------|---------------|--------|
|           |   |          |   |
| Currencies     |   | (3.05         | )%     |
| Energies       |   | 2.55          | %      |
| Grains         |   | 0.45          | %      |
| Interest Rates |   | 2.94          | %      |
| Livestock      |   | 0.14          | %      |
| Metals         |   | (0.22         | )%     |
| Softs          |   | 0.20          | %      |
| Stock Indices  |   | (2.48         | )%     |
|           |   |          |   |
| Total          |   | 0.53          | %      |

 

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While the Partnership hada net dollar trading loss during 2004, there was a percentage trading gain inthe aggregate sectors due to the timing of additional capital contributions andmonthly volatility.

The year 2004 wasdistinguished by dramatic transitions in the underlying character of markettrading dynamics. Profitable trends in January and February gave way to a sixmonth period of trendless, turbulent action across a broad swath of marketsthat produced significant losses. Beginning in September, trends reappeared andthe Partnership chalked up a sharp recovery in the year’s final fourmonths.  Interest rate and energy tradingwere profitable and to a lesser extent so was trading of agriculturalcommodities.  These gains were partiallyoffset by losses from currency, stock index and metals trading. The Partnershipgenerated a small trading loss for the year.

At the start of the year,long positions in note and bond futures, particularly for the U.S. and Europe,were quite profitable as sluggish European growth, concerns about a “jobless’U.S. recovery and central bank buying of treasuries drove interest ratesdown.  Rising energy prices benefitedlong energy positions, and equity and metals trading were profitable.  Currency trading was very unprofitable,however, as a dollar decline halted and reversed during the quarter.

From March throughAugust, a number of uncertainties plagued market participants including:  the June Iraqi elections, the U.S.Presidential elections in November, the strength of the American economy andthrust of Federal Reserve policy, and China’s foreign exchange, industrial andmonetary policy directions.  As a result,markets across the board displayed unprofitable, directionless priceaction.  Trading of currencies, interestrates, stock indices, metals and agricultural commodities produced losses.  Energy trading was the only profitable sectorfor this period.

As the aforementioneduncertainties began to clarify, market participants became more confident oftheir opinions and a number of profitable trend opportunities emerged.  In particular, a sharp dollar decline led toprofits from a series of short dollar positions, particularly versus the euroand Korean won.  This dollar sell off wasprompted by worries about persistent U. S. current account and budget deficits,as well as the rising probability that foreign central banks would begin todiversify their international reserve holdings away from the American currency.Trading of interest rate, stock index, and metal futures was also profitableover the last four months of the year.

Item7A.  Quantitative and QualitativeDisclosures About Market Risk

**Introduction**

***Past Results Are Not Necessarily Indicative of Future Performance***

The Partnership is a speculative commodity pool.  Unlike an operating company, the risk ofmarket sensitive instruments is integral, not incidental, to the Partnership’smain line of business.

Market movements result in frequent changes in thefair market value of the Partnership’s open positions and, consequently, in itsearnings and cash flow.  The Partnership’smarket risk is influenced by a wide variety of factors, including the level andvolatility of interest rates, exchange rates, equity price levels, the marketvalue of financial instruments and contracts, the diversification effects amongthe Partnership’s open positions and the liquidity of the markets in which ittrades.

The Partnership can rapidly acquire and/or liquidateboth long and short positions in a wide range of different markets.  Consequently, it is not possible to predicthow a particular future market scenario will affect performance, and thePartnership’s past performance is not necessarily indicative of its futureresults.

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Value at Risk is a measure of the maximum amount whichthe Partnership could reasonably be expected to lose in a given marketsector.  However, the inherentuncertainty of the Partnership’s speculative trading and the recurrence in themarkets traded by the Partnership of market movements far exceeding expectationscould result in actual trading or non-trading losses far beyond the indicatedValue at Risk or the Partnership’s experience to date (*i.e.,*“risk of ruin”).  In light of theforegoing as well as the risks and uncertainties intrinsic to all futureprojections, the inclusion of the quantification included in this sectionshould not be considered to constitute any assurance or representation that thePartnership’s losses in any market sector will be limited to Value at Risk orby the Partnership’s attempts to manage its market risk.

Materiality, as used in this section “Quantitative andQualitative Disclosures About Market Risk,” is based on an assessment ofreasonably possible market movements and the potential losses caused by suchmovements, taking into account the leverage, optionality and multiplierfeatures of the Partnership’s market sensitive instruments.

Quantifying thePartnership’s Trading Value at Risk

***QuantitativeForward-Looking Statements***

*The following quantitative disclosures regardingthe Partnership’s market risk exposures contain “forward-looking statements”within the meaning of the safe harbor from civil liability provided for suchstatements by the Private Securities Litigation Reform Act of 1995 (set forthin Section 27A of the Securities Act and Section 21E of the Securities ExchangeAct of 1934).  All quantitativedisclosures in this section are deemed to be forward-looking statements forpurposes of the safe harbor, except for statements of historical fact.*

The Partnership’s risk exposure in the various marketsectors traded by the General Partner is quantified below in terms of Value atRisk.  Due to the Partnership’smark-to-market accounting, any loss in the fair value of the Partnership’s openpositions is directly reflected in the Partnership’s earnings (realized orunrealized) and cash flow (at least in the case of exchange-traded contracts inwhich profits and losses on open positions are settled daily through variationmargin).

Exchange maintenance margin requirements have been usedby the Partnership as the measure of its Value at Risk.  Maintenance margin requirements are set byexchanges to equal or exceed 95-99% of the maximum one-day losses in the fairvalue of any given contract incurred during the time period over which historicalprice fluctuations are researched for purposes of establishing marginlevels.  The maintenance margin levelsare established by dealers and exchanges using historical price studies as wellas an assessment of current market volatility (including the implied volatilityof the options on a given futures contract) and economic fundamentals toprovide a probabilistic estimate of the maximum expected near-term one-dayprice fluctuation.

In the case of market sensitive instruments which arenot exchange traded (almost exclusively currencies in the case of thePartnership), the Partnership calculates Value at Risk using exchangemaintenance margin requirements for equivalent or similar futures positions.

In quantifying the Partnership’s Value at Risk, 100%positive correlation in the different positions held in each market riskcategory has been assumed.  Consequently,the margin requirements applicable to the open contracts have simply beenaggregated to determine each trading category’s aggregate Value at Risk.  The diversification effects resulting fromthe fact that the Partnership’s positions are rarely, if ever, 100% positivelycorrelated have not been reflected.

***The Partnership’s Trading Value at Risk in Different MarketSectors***

The following tables indicate the average, highest andlowest amounts of trading Value at Risk associated with the Partnership’s openpositions by market category for fiscal years ended December 31, 2006 and2005.  During fiscal year 2006 and 2005,the Partnership’s average total capitalization was approximately $176.1 millionand $170.2 million, respectively.

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| **Fiscal Year 2006** | ** ** |
|--------------------------------|------------|
| **Market Sector**         | ** ** | **Average   Value at Risk** | ** ** | **% of Average   Capitalization** | ** ** | **Highest  Value At Risk** | ** ** | **Lowest  Value At Risk** | ** ** |
|                           |       |   |   |   |   |   |   |   |   |
| Interest Rates                 |       | $ | 5.0 |   | 2.8 | % | $ | 7.8 |   | $ | 2.3 |   |
| Currencies                     |       | $ | 7.4 |   | 4.2 | % | $ | 8.8 |   | $ | 5.9 |   |
| Stock Indices                  |       | $ | 6.8 |   | 4.0 | % | $ | 11.1 |   | $ | 2.2 |   |
| Metals                         |       | $ | 1.5 |   | 0.9 | % | $ | 1.8 |   | $ | 1.1 |   |
| Softs                          |       | $ | 0.9 |   | 0.5 | % | $ | 1.1 |   | $ | 0.6 |   |
| Grains                         |       | $ | 0.6 |   | 0.3 | % | $ | 0.8 |   | $ | 0.4 |   |
| Energies                       |       | $ | 1.7 |   | 1.0 | % | $ | 2.0 |   | $ | 1.0 |   |
| Livestock                      |       | $ | 0.2 |   | 0.2 | % | $ | 0.3 |   | $ | 0.0 |   |
| Total                          |       | $ | 24.1 |   | 13.9 | % |   |   |   |   |

 
| **Fiscal Year 2005** | ** ** |
|--------------------------------|------------|
| **Market Sector**         | ** ** | **Average   Value at Risk** | ** ** | **% of Average   Capitalization** | ** ** | **Highest  Value At Risk** | ** ** | **Lowest  Value At Risk** | ** ** |
|                           |       |   |   |   |   |   |   |   |   |
| Interest Rates                 |       | $ | 5.1 |   | 3.0 | % | $ | 6.4 |   | $ | 3.9 |   |
| Currencies                     |       | $ | 10.1 |   | 5.9 | % | $ | 13.6 |   | $ | 7.9 |   |
| Stock Indices                  |       | $ | 9.3 |   | 5.5 | % | $ | 11.0 |   | $ | 7.7 |   |
| Metals                         |       | $ | 1.8 |   | 1.1 | % | $ | 1.9 |   | $ | 1.5 |   |
| Softs                          |       | $ | 1.0 |   | 0.6 | % | $ | 1.4 |   | $ | 0.5 |   |
| Grains                         |       | $ | 0.4 |   | 0.2 | % | $ | 0.5 |   | $ | 0.2 |   |
| Energies                       |       | $ | 1.3 |   | 0.8 | % | $ | 1.7 |   | $ | 0.5 |   |
| Livestock                      |       | $ | 0.2 |   | 0.1 | % | $ | 0.2 |   | $ | 0.1 |   |
| Total                          |       | $ | 29.2 |   | 17.2 | % |   |   |   |   |

 

Average, highest and lowest Value at Risk amountsrelate to the quarter-end amounts during each fiscal year.  Average Capitalization is the average of thePartnership’s capitalization at the end of each month during the fiscal year2006 and 2005.  Dollar amounts representmillions of dollars.

***Material Limitations on Value at Risk as an Assessment ofMarket Risk***

The face value of the market sector instruments heldby the Partnership is typically many times the applicable maintenance marginrequirement (maintenance margin requirements generally ranging betweenapproximately 1% and 10% of contract face value) as well as many times thecapitalization of the Partnership.  Themagnitude of the Partnership’s open positions creates a “risk of ruin” nottypically found in most other investment vehicles.  Because of the size of its positions, certainmarket conditions — unusual, but historically recurring from time to time —could cause the Partnership to incur severe losses over a short period oftime.  The foregoing Value at Risk table— as well as the past performance of the Partnership — give no indication ofthis “risk of ruin.”

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***Non-Trading Risk***

The Partnership has non-trading market risk on itsforeign cash balances not needed for margin. However, these balances (as well as any market risk they represent) areimmaterial.

The Partnership also has non-trading cash flow risk asa result of holding a substantial portion (over 80%) of its assets in U.S.Treasury notes and other short-term debt instruments (as well as any marketrisk they represent) for margin and cash management purposes.  Although the General Partner does not anticipatethat, even in the case of major interest rate movements, the Partnership wouldsustain a material mark-to-market loss on its securities positions, ifshort-term interest rates decline so will the Partnership’s cash managementincome.  The Partnership also maintains aportion (approximately 3 - 10%) of its assets in cash in interest-bearing bankaccounts.  These cash balances are alsosubject (as well as any market risk they represent) to cash flow risk, which isnot material.

***Qualitative Disclosures Regarding Primary Trading RiskExposures***

*The following qualitative disclosures regarding thePartnership’s market risk exposures — except for (i) those disclosures that arestatements of historical fact and (ii) the descriptions of how the GeneralPartner manages the Partnership’s primary market risk exposures — constituteforward-looking statements within the meaning of Section 27A of the SecuritiesAct and Section 21E of the Securities Exchange Act.  The Partnership’s primary market riskexposures as well as the strategies used and to be used by the General Partner*for*managing such exposures are subject to numerous uncertainties,contingencies and risks, any one of which could cause the actual results of thePartnership’s risk controls to differ materially from the objectives of suchstrategies.  Government interventions,defaults and expropriations, illiquid markets, the emergence of dominantfundamental factors, political upheavals, changes in historical price relationships,an influx of new market participants, increased regulation and many otherfactors could result in material losses as well as in material changes to therisk exposures and the risk management strategies of the Partnership.  There can be no assurance that thePartnership’s current market exposure and/or risk management strategies willnot change materially or that any such strategies will be effective in eitherthe short- or long-term.  Investors mustbe prepared to lose all or substantially all of their investment in thePartnership.*

The following were the primary trading risk exposuresof the Partnership as of December 31, 2006, by market sector.

Financial Instruments.  Interest rate movements directly affect theprice of the sovereign bond futures positions held by the Partnership and indirectlythe value of its stock index and currency positions.  Interest rate movements in one country aswell as relative interest rate movements between countries may materiallyimpact the Partnership’s profitability. The Partnership’s primary interest rate exposure is to interest ratefluctuations in the United States and other major industrialized, or Group ofSeven (Canada, France, Germany, Italy, Japan, United Kingdom and United States,collectively “G-7”), countries.  However,the Partnership also may take positions in futures contracts on the governmentdebt of other nations.  The GeneralPartner anticipates that G-7 interest rates, both long-term and short-term,will remain the primary market exposure of the Partnership for the foreseeablefuture.

Currencies.  Exchange rate risk is the principal marketexposure of the Partnership.  ThePartnership’s currency exposure is to exchange rate fluctuations, primarilyfluctuations which disrupt the historical pricing relationships betweendifferent currencies and currency pairs. These fluctuations are influenced by interest rate changes as well aspolitical and general economic conditions. The Partnership trades in a large number of currencies, includingcross-rates — i.e., positions between two currencies other than the U.S.dollar.  As of December 31, 2006 thePartnership’s primary currency exposures were in the U.S. dollar versus theEuro, Swiss Franc, Czech Krone, Polish Zloty, Norwegian Krone, HungarianForint, Swedish Krona, Canadian Dollar, Korean Won, Singapore Dollar, SouthAfrican Rand, New Zealand Dollar, Australian Dollar, Japanese Yen, MexicanPeso, Turkish Lira, Indian Rupee and British Pound.  The primary exposures in the currency crosseswere in the Japanese Yen versus the Canadian Dollar, Australian Dollar, SwissFranc, Euro, Mexican Peso, New Zealand Dollar and British Pound and in the Euroversus the Japanese Yen, British Pound, Swiss Franc, Polish Zloty, NorwegianKrone, Hungarian Forint, Mexican Peso, New Zealand Dollar, Swedish Krona, TurkishLira and Canadian Dollar.

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Stock Indices.  The Partnership’s primary equity exposure,through stock index futures, is to equity price risk in the G-7 countries.  As of December 31, 2006, the Partnership’sprimary exposures were in the E Mini Nasdaq 100, E-Mini S&P 500, E-MiniRussell 2000, and E-Mini Dow (United States); FTSI 100 (United Kingdom); TOPIXand Nikkei (Japan); TSE 60 (Canada); DAX (Germany); and CAC-40 (France).  The Partnership’s exposure to stock indexfutures of other countries at December 31, 2006 were in the Simex Taiwan Index(Taiwan), Simex (Singapore), ALL Shares (South Africa), SPI 200 (Australia),IBEX 35 (Spain), Hang Seng and H-Shares (Hong Kong), AEX (Netherlands), MIB 30(Italy), OMX (Sweden) and the DJ Euro Stoxx 50 (Euro Zone) stock indices.

Metals.  The Diversified Portfolio used for thePartnership trades precious and base metals. As of December 31, 2006, the Partnership’s metals market exposure was ingold, silver, platinum, aluminum, copper, lead, nickel, tin and zinc.

Agricultural.  The Partnership’s primary commoditiesexposure is to agricultural price movements, which are often directly affectedby severe or unexpected weather conditions. As of December 31, 2006, the Partnership had exposure to agricultural commodities,including coffee, sugar, cocoa, cotton, wheat, corn, the soybean complex aswell as live cattle and hogs.

Energy.  The Partnership’s primary energy marketexposure is to gas and oil price movements, often resulting from politicaldevelopments in the Middle East and economic conditions worldwide.  Energy prices are volatile and substantialprofits and losses have been and are expected to continue to be experienced inthis market.

***Qualitative Disclosures Regarding Non-Trading Risk Exposure***

The following were the only non-trading risk exposuresof the Partnership as of December 31, 2006.

Foreign Currency Balances.  The Partnership’s primary foreign currencybalances are in Japanese Yen, Euro, British Pounds, Australian Dollars,Canadian Dollars, Swiss Franc, Swedish Krona, South African Rand and Hong KongDollars.  The Partnership controls thenon-trading risk of these balances by regularly converting these balances backinto dollars (no less frequently than twice a month).

Securities Positions.  The Partnership’s only market exposure ininstruments held other than for trading is in its securities portfolio.  The Partnership holds only cash orinterest-bearing, credit risk-free, short-term paper — typically U.S. Treasuryinstruments with durations no longer than 1 year.  Violent fluctuations in prevailing interestrates could cause immaterial mark-to-market losses on the Partnership’ssecurities, although substantially all of these short-term instruments are heldto maturity.

***Qualitative Disclosures Regarding Means of Managing RiskExposure***

The General Partner attempts to control risk throughthe systematic application of its trading method, which includes a multi-systemapproach to price trend recognition, an analysis of market volatility, theapplication of certain money management principles, which may be revised fromtime to time, and adjusting leverage or portfolio size.  In addition, the General Partner limits itstrading to markets which it believes are sufficiently liquid in respect of theamount of trading it contemplates conducting.

The goal of the General Partner’s research has been todevelop and select a mix of systems in each market and allocate risk across awide array of markets, so as to contain overall portfolio risk within atargeted range, while allowing exposure to profitable trend opportunities.  Over the last 30 years, the General Partnerhas developed hundreds of trading systems. These trading systems generate buyor sell decisions in a particular market based on the direction of price movementsin the market.

Of course, systems can be materially different —better in some periods and worse in others. The main distinguishing features are time-frame over which systems work(intra-day to long-term), the type of data fed into them (granularity [ticks toweeks/months], type [market or economic statistics], source [cash, futures oroptions markets]), and the objective of the system (profiting from trends,trading-ranges or volatility).  No singleapproach will work all the time. Therefore, the General Partner’s objective is to have several approachesoperating at all times.  Since the early1980’s, the General Partner has selected multiple systems for each market.

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When arriving at the portfolio allocation, the GeneralPartner seeks maximum diversification subject to liquidity constraints.  The markets traded and allocations arereviewed monthly, although changes may occur less frequently.  The following factors are considered inconstructing a universe of markets to trade for each portfolio:  profitability, correlation of marketperformance, liquidity of markets, professional judgment, desireddiversification and transaction costs. Once the universe of markets is established, the General Partner’ssimulation and optimization techniques help determine which markets to includein the portfolio.  The current allocationto any market in the portfolio does not exceed 4.5%.

In attempting to assess market volatility as a meansof monitoring and evaluating risk, the General Partner uses its volatilityoverlay as a part of individual market risk management. This system is designedto measure the risk in the portfolio’s position in each market and signals adecrease in position size when risk increases and an increase in position sizewhen risk decreases. The General Partner’s volatility overlay maintains overallportfolio risk and distribution of risk across markets within designatedranges.  It is applied to the systematicstrategies described above.  A secondarybenefit of the volatility overlay can be timely profit taking.  Because markets tend to become more volatileafter a profitable trend has been long underway, the volatility overlay oftensignals position reductions before trend reversals.

In addition to the volatility overlay, the GeneralPartner’s risk management focuses on money management principles applicable tothe portfolio as a whole rather than to individual markets.  The first principle is portfoliodiversification, which attempts to improve the quality of profits by reducingvolatility.

Additional money management principles applicable tothe portfolio as a whole include: (1) limiting the assets committed as margin or collateral,generally within a range of 12% to 35% of an account’s net assets, though theamount may at any time be substantially higher; (2) prohibiting pyramiding -that is, using unrealized profits in a particular market as margin foradditional positions solely in the same market; and (3) changing theequity used for trading by an account solely on a controlled periodic basis,not automatically due to an increase in equity from trading profits.

Another important risk management function is thecareful control of leverage or portfolio size. Leverage levels are determinedby simulating the entire portfolio—all markets, all systems, all risk controloverlays, the exact weightings of the markets in the portfolio and the proposedlevel of leverage—over the past five or ten years to determine the worst caseexperienced by the portfolio in the simulation period.

The worst case or peak-to-trough drawdown is measuredfrom a daily high in portfolio assets to the subsequent daily low whether thatoccurs days, weeks or months after the daily high. If the General Partnerconsiders the drawdown too severe, it reduces the leverage or portfolio size.There are, however, no restrictions on the amount of leverage the GeneralPartner may use at any given time.

Item 8.   Financial Statements and Supplementary Data

Financial statements required by this item, includingthe report of Deloitte & Touche LLP for the fiscal years ended December 31,2006, 2005 and 2004 are included as Exhibit 13.01 to this report.

The following summarized quarterly financialinformation presents the results of operations for the three month periodsended March 31, June 30, September 30 and December 31, 2006 and 2005.  This information has not been audited.
| ** **                                   | ** ** | **Fourth Quarter  2006** | ** ** | **Third Quarter  2006** | ** ** | **Second Quarter  2006** | ** ** | **First Quarter  2006** | ** ** |
|----------------------------------------------|------------|-------------------------------|------------|------------------------------|------------|-------------------------------|------------|------------------------------|------------|
| Interest Income:                             |       | $                             | 1,903,919  |                         | $          | 2,180,864                     |       | $                            | 2,107,172  |   | $ | 1,847,561 |   |
| Net Realized and  Unrealized Gains (Losses): |       | 16,790,125                    |       | (9,661,082                   | )          | (8,817,953                    | )          | 15,551,725                   |       |
| Expenses*                                    |       | 3,013,893                     |       | 200,775                      |       | 204,207                       |       | 3,466,178                    |       |
| Net Income (Loss):                           |       | 15,680,151                    |       | (7,680,993                   | )          | (6,914,988                    | )          | 13,933,108                   |       |
|                                              |            |                               |            |                              |            |                               |            |                              |            |  |  |  |  |

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*  Expenses are inclusive of any realized andaccrued profit share to the General Partner.

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| ** **                                   | ** ** | **Fourth Quarter  2005** | ** ** | **Third Quarter  2005** | ** ** | **Second Quarter  2005** | ** ** | **First Quarter  2005** | ** ** |
|----------------------------------------------|------------|-------------------------------|------------|------------------------------|------------|-------------------------------|------------|------------------------------|------------|
| Interest Income:                             |       | $                             | 1,416,980  |                         | $          | 1,240,684                     |       | $                            | 1,091,606  |   | $ | 1,069,784 |   |
| Net Realized and  Unrealized Gains (Losses): |       | 6,740,563                     |       | 11,612,135                   |       | 3,565,696                     |       | (12,241,768                  | )          |
| Expenses*:                                   |       | 1,905,087                     |       | 1,638,897                    |       | 1,341,486                     |       | 1,517,999                    |       |
| Net Income (Loss):                           |       | 6,252,456                     |       | 11,213,922                   |       | 3,315,816                     |       | (12,689,983                  | )          |
|                                              |            |                               |            |                              |            |                               |            |                              |            |  |  |  |  |

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*  Expenses are inclusive of any realized andaccrued profit share to the General Partner.

There were no extraordinary, unusual or infrequentlyoccurring items recognized in any quarter within the two most recent fiscalyears, and the Partnership has not disposed of any segments of itsbusiness.  There have been no year-endadjustments that are material to the results of any fiscal quarter reportedabove.

Item9.   Changes in and Disagreements with Accountantson Accounting and Financial Disclosure

None.

Item 9A.   Controls and Procedures

The General Partner, with the participation of theGeneral Partner’s principal executive officers and principal financial officer,has evaluated the effectiveness of the design and operation of its disclosurecontrols and procedures with respect to the Partnership as of the end of thefiscal year covered by this Annual Report, and, based on their evaluation, haveconcluded that these disclosure controls and procedures are effective.  There were no significant changes in theGeneral Partner’s internal controls with respect to the Partnership or in otherfactors applicable to the Partnership that could significantly affect thesecontrols subsequent to the date of their evaluation.

Item 9B.   Other Information.

None.

PART III

Item10.   Directors, Executive Officers andCorporate Governance

(a,b)  Identificationof Directors and Executive Officers

The Partnership has no directors or executiveofficers.  The Partnership is controlledand managed by the General Partner.

The General Partner, is a Delaware corporationorganized in May 1982 to manage discretionary accounts in futures and forwardmarkets.  It is the corporate successorto a futures trading and advisory organization which has been continuouslymanaging assets in the currency and futures markets using quantitative, systematictechniques since 1971.

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The principals and senior officers of the GeneralPartner as of December 31, 2006 are as follows:

***Harvey Beker, age53.***  Mr.Beker is Co-Chief Executive Officer and Co-Chairman of the General Partner andThe Millburn Corporation, and a partner of their affiliate, ShareInVestResearch L.P.  He received a Bachelor ofArts degree in economics from New York University (“NYU”) in 1974 and a Masterof Business Administration degree in finance from NYU in 1975.  From June 1975 to July 1977, Mr. Beker wasemployed by Loeb Rhoades, Inc. where he developed and traded silver arbitragestrategies.  From July 1977 to June 1978,Mr. Beker was a futures trader at Clayton Brokerage Co. of St. Louis.  Mr. Beker has been employed by The MillburnCorporation since June 1978 and initially served as the Director of operationsfor its affiliate, Millburn Partners. During his tenure at Millburn (including its affiliates, MillburnPartners and CommInVest Research Limited Partnership (“CommInVest”)) he hasbeen instrumental in the development of the research, trading and operationsareas.  Mr. Beker became a principal ofthe firm in June 1982, and a partner in ShareInVest, the predecessor ofShareInVest Research L.P. (“ShareInVest”), in April 1982.

***Gregg R.Buckbinder, age 48.***  Mr. Buckbinder is Senior Vice-President andChief Operating Officer of the General Partner and The Millburn Corporation anda partner, since January 2000, of ShareInVest. He graduated cum laude from Pace University (“Pace”) in 1980 with aB.B.A. in accounting and received an M.S. in taxation from Pace in 1988.  He joined the General Partner and TheMillburn Corporation in January 1998 from Odyssey Partners, L.P. where he wasresponsible for the operation, administration and accounting of the firm’smerchant banking and managed account businesses from July 1990 through December1997.  Mr. Buckbinder was employed byTucker Anthony, a securities broker and dealer, from June 1985 to July 1990where he was First Vice President and Controller, and from August 1983 to June1984 where he designed and implemented various operations and accountingsystems.  He was with the publicaccounting firm of Ernst & Whinney from June 1984 to June 1985 as a managerin the tax department and from September 1980 to August 1983 as a seniorauditor, with an emphasis on clients in the financial services business.  He is a Certified Public Accountant and amember of the American Institute of Certified Public Accountants.

***George E.Crapple, age 62.*** Mr. Crapple is Co-Chief Executive Officer and Co-Chairman of the GeneralPartner and The Millburn Corporation and a partner of ShareInVest.  In 1966 he graduated with honors from theUniversity of Wisconsin where his field of concentration was economics and hewas elected to Phi Beta Kappa.  In 1969he graduated from Harvard Law School, **magnacum laude**, where he was a member of the Harvard Law Review.  He was a lawyer with Sidley & Austin,Chicago, Illinois, from 1969 until April 1, 1983, as a partner since 1975,specializing in commodities, securities, corporate and tax law.  He was first associated with the GeneralPartner in 1976 and joined General Partner and The Millburn Corporation(including its affiliates, Millburn Partners and CommInVest) on April 1, 1983on a full-time basis.  He became apartner in ShareInVest in April 1984. Mr. Crapple is a Director, Member of the Executive Committee, Chairmanof the Appeals Committee and a former Chairman of the Eastern Regional BusinessConduct Committee of the NFA, past Chairman of the Managed Funds Association, amember of the Global Markets Advisory Committee of the CFTC and a member of theboard of directors of the Futures Industry Association (“FIA”).

***Steven M. Felsenthal, age 37. ***Mr. Felsenthalis General Counsel and Chief Compliance Officer of the General Partner, TheMillburn Corporation and ShareInVest. Prior to joining Millburn in January 2004, Mr. Felsenthal was a seniorassociate in the investment management group at Schulte Roth & Zabel LLP(September 1999- January 2004), where he represented and advised hedge funds,registered investment companies, investment advisers, broker-dealers and banksin connection with all facets of their asset management businesses, and amember of the tax department of Kramer, Levin, Naftalis & Frankel LLP(October 1996- September 1999).  Hegraduated**cum laude** fromYeshiva University in 1991 with a bachelor of arts degree in political science,and **order of the coif** fromFordham University School of Law in 1996, where he also served as an editor ofthe Fordham Environmental Law Journal. Mr. Felsenthal received an LL.M degree in taxation from NYU School ofLaw in 2001 and has written and been quoted in numerous published articles, andspoken at conferences, on various topics related to investment management.  Mr. Felsenthal is a member of the New YorkState Bar and Co-Chairman of the Managed Funds Association CPO/CTA AdvisoryCommittee.

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***Mark B.Fitzsimmons, age 59.***  Mr. Fitzsimmons is a SeniorVice-President of the General Partner and The Millburn Corporation and apartner, since January 2000, of ShareInVest. His responsibilities include both business development and investmentstrategy.  He joined the General Partnerand its affiliates in January 1990 from Morgan Stanley & Co. Incorporatedwhere he was a Principal and Manager of institutional foreign exchange salesand was involved in strategic trading for the firm from October 1987 untilJanuary 1990.  From September 1977 toOctober 1987 he was with Chemical Bank New York Corporation (“Chemical”), firstas a Senior Economist in Chemical’s Foreign Exchange Advisory Service and lateras a Vice-President and Manager of Chemical’s Corporate Trading Group.  While at Chemical he also traded both foreignexchange and fixed income products.  FromSeptember 1973 to September 1977 Mr. Fitzsimmons was employed by the FederalReserve Bank of New York, dividing his time between the International ResearchDepartment and the Foreign Exchange Department. He graduated summa cum laude from the University of Bridgeport,Connecticut in 1970 with a B.S. in economics. His graduate work was done at the University of Virginia, where hereceived a certificate of candidacy for a Ph.D. in economics in 1973.

***Barry Goodman,age 49.***  Mr. Goodman is Executive Vice-President,Director of Trading and Co-Director of Research of the General Partner and TheMillburn Corporation and a partner of ShareInVest.  His responsibilities include overseeing thefirm’s trading operation and managing its trading relationships, as well as thedesign and implementation of trading systems. He graduated **magna cum laude**from Harpur College of the State University of New York in 1979 with a B.A. ineconomics.  From September 1980 throughOctober 1982 he was a commodity trader for E. F. Hutton & Co., Inc.   (“E.F. Hutton”).  At E.F. Hutton, he also designed andmaintained various technical indicators and coordinated research projectspertaining to the futures markets.  Hejoined the General Partner and The Millburn Corporation (including itsaffiliate, Millburn Partners) in November 1982 as Assistant Director ofTrading.  He became a partner inShareInVest in January 1994.

***Dennis B. Newton,age 55.*** Mr.Newton is a Senior Vice-President of the General Partner and The MillburnCorporation.  His primaryresponsibilities are in administration and business development.  Prior to joining the General Partner and TheMillburn Corporation in September 1991, Mr. Newton was President of PhoenixAsset Management, Inc. (“Phoenix”), a registered commodity pool operator fromApril 1990 to August 1991 and President of its affiliated introducing broker,Phoenix Futures Inc., from March 1990 to June 1991.  Prior to his employment with Phoenix, Mr.Newton was a Director of Managed Futures with Prudential-Bache Securities Inc.(“Prudential-Bache”) from October 1987 to March 1990 and was associated withits affiliated futures commission merchant entity, Prudential SecuritiesFutures Management, Inc.  Mr. Newtonjoined Prudential-Bache from Heinold Asset Management, Inc.  (“Heinold”), and its affiliated futurescommission merchant, Heinold Commodities Inc., where he was a member of thesenior management team from October 1974 to October 1987.  Heinold was a pioneer and one of the largestsponsors of funds utilizing futures and currency forward trading.

***Grant N. Smith,age 55.***  Mr.Smith is Executive Vice-President and Co-Director of Research of the GeneralPartner and The Millburn Corporation and a partner of ShareInVest.  He is responsible for the design, testing andimplementation of quantitative trading strategies, as well as for planning andoverseeing the computerized decision-support systems of the firm.  He received a B.S. degree from theMassachusetts Institute of Technology (“M.I.T.”) in 1974 and an M.S. degreefrom M.I.T. in 1975.  While at M.I.T. heheld several teaching and research positions in the computer science field andparticipated in various projects relating to database management.  He joined the predecessor entity to TheMillburn Corporation in June 1975, and has been continuously associated withthe General Partner, The Millburn Corporation and their affiliates since thattime.

***Tod A. Tanis, age52.***   Mr.Tanis is a Vice President, Principal Accounting Officer and Director ofOperations of the General Partner and The Millburn Corporation.  He is responsible for overseeing operationsand accounting for the firm’s commodity pools. He graduated from Grove City College in May 1976 with a B.A. inaccounting and joined the General Partner and The Millburn Corporation in Mayof 1983.  Prior to joining Millburn, hewas with E.F. Hutton, where he was a Manager from December 1982 to April 1983;a Supervisor from August 1982 to December 1982; an International Accountantfrom April 1979 to August 1982; and a staff accountant from June 1978 to April 1979.  As a Manager at E.F. Hutton, he wasresponsible for all internal and external commodity reporting.  Mr. Tanis also served as a Junior Accountantand then International Staff Accountant with Merrill Lynch & Company fromSeptember 1976 to May 1978.

(c)   Identificationof Certain Significant Employees

None.

(d)   Family Relationships

None.

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(e)   BusinessExperience

See Item 10 (a,b) above.

(f)   Involvement in Certain LegalProceedings

None.

(g)   Code of Ethics

The Partnership has no employees, officers or directors and is managedby the General Partner.  The General Partner has adopted an Executive Codeof Ethics that applies to its principal executive officers, principal financialofficer and principal accounting officer.  A copy of this Executive Codeof Ethics may be obtained at no charge by written request to MillburnRidgefield Corporation, 411 West Putnam Avenue, Greenwich, Connecticut 06830 orby calling 203-625-7554 (ask for Client Services).

(h)   AuditCommittee Financial Expert

Because the Partnership has no employees, officers ordirectors, the Partnership has no audit committee.  The Partnership is managed by the GeneralPartner.  Gregg Buckbinder serves as theGeneral Partner’s “audit committee financial expert.”  Mr. Buckbinder is not independent of themanagement of the General Partner.  TheGeneral Partner is a privately owned corporation managed by itsshareholders.  It has no independentdirectors.

Item11.  Executive Compensation

The Partnership has no directors, officers or employees.  None of the directors, officers or employeesof the General Partner receive compensation from the Partnership.  The General Partner makes all tradingdecisions on behalf of the Partnership. The General Partner receives monthly brokerage commissions of 0.458 of1% of the Partnership’s Net Assets (which is reduced to 0.167 of 1% of NetAssets, plus the cost of all commissions and clearing charges due tothird-party brokers, for partners who acquire their Interests directly throughthe General Partner) and an annual profit share of 20% of any new tradingprofit as defined.

27

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Item12.  Security Ownership of Certain Beneficial Ownersand Management

(a)          Security Ownership of Certain Beneficial Owners

As of December 31, 2006,the General Partner knows of the following person who owns beneficially morethan 5% of the Partnership’s Interests as follows: 
| ** **

** **

**Name and Address**                                              | ** ** | **Value of Interest** | ** ** | **Percentage of Limited  Partnership  Interests** | ** ** |
|-----------------------------------------------------------------------------------------------------|------------|---------------------------------|------------|-------------------------------------------------------------|------------|
|                                                                                                |       | **Held Directly**               | ** ** | **Held Indirectly (1)**                                     |       | **% Directly** |   | **% Indirectly** |   |
| Malcolm  H. Wiener  c/o Millburn Ridgefield Corporation  411 W. Putnam Avenue   Greenwich, CT 06830 |       | $                               | 0          |                                                        | $          | 22,250,140 |   | 0 | % | 15.49 | % |
|                                                                                                |       |                            |       |                                                        |       |   |   |   |   |
| ALFA Investors   2108 E. South Blvd.   Montgomery, AL 36116                                         |       | $                               | 7,366,395  |                                                        |       |   | 5.13 | % |   |   |
|                                                                                                     |            |                                 |            |                                                             |            |  |  |  |  |  |  |

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All of the Partnership’s general partner interest isheld by the General Partner.

(b)           Security Ownership of Management

The Partnership has noofficers or directors.  Under the termsof the Limited Partnership Agreement, the Partnership’s affairs are managed bythe General Partner, which has discretionary authority over the Partnership’strading.  As of December 31, 2006, theGeneral Partner’s interest was valued at $4,034,296, which constituted 2.73% ofthe Partnership’s capital as of December 31, 2006.

As of December 31, 2006,the directors and executive officers of the General Partner own beneficiallyLimited Partnership Interests as follows: 
| ** **

** **

**Name**                                    | ** ** | **Value of Interest**                                                                                                        | ** ** | **Percentage of Limited  Partnership  Interests**                     | ** ** |
|---------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------------------------------------------|------------|
|                                                                |       | **Held Directly**                                                                                                                      | ** ** | **Held Indirectly (2)**                                                         |       | **% Directly** |   | **% Indirectly** |   |
|                                                                |       |                                                                                                                                   |       |                                                                            |       |   |   |   |   |
| Harvey Beker                                                        |       | $           967,388                                                             |       | $       7,242,136                            |       | 0.67 | % | 5.03 | % |
|                                                                |       |                                                                                                                                   |       |                                                                            |       |   |   |   |   |
| Gregg Buckbinder                                                    |       | $                      0 |       | $          329,582            |       | 0 | % | 0.23 | % |
|                                                                |       |                                                                                                                                   |       |                                                                            |       |   |   |   |   |
| George Crapple                                                      |       | $             26,474                                                  |       | $       5,097,890                            |       | 0.02 | % | 3.55 | % |
|                                                                |       |                                                                                                                                   |       |                                                                            |       |   |   |   |   |
| Steven M. Felsenthal                                                |       | $                      0 |       | $            37,336 |       | 0 | % | 0.03 | % |
|                                                                |       |                                                                                                                                   |       |                                                                            |       |   |   |   |   |
| Mark Fitzsimmons                                                    |       | $                      0 |       | $       1,953,603                            |       | 0 | % | 1.36 | % |
|                                                                |       |                                                                                                                                   |       |                                                                            |       |   |   |   |   |
| Barry Goodman                                                       |       | $                      0 |       | $       2,138,908                            |       | 0 | % | 1.49 | % |
|                                                                |       |                                                                                                                                   |       |                                                                            |       |   |   |   |   |
| Dennis Newton                                                       |       | $                      0 |       | $          254,160            |       | 0 | % | 0.18 | % |
|                                                                |       |                                                                                                                                   |       |                                                                            |       |   |   |   |   |
| Grant Smith                                                         |       | $        1,520,941                                                                             |       | $          934,562            |       | 1.06 | % | 0.65 | % |
|                                                                |       |                                                                                                                                   |       |                                                                            |       |   |   |   |   |
| Tod Tanis                                                           |       | $                      0 |       | $          616,948            |       | 0 | % | 0.43 | % |
|                                                                |       |                                                                                                                                   |       |                                                                            |       |   |   |   |   |
| directors and  executive officers of the General Partner as a group |       | $        2,514,803                                                                             |       | $     18,605,125                                       |       | 1.75 | % | 12.95 | % |

----

(1) Interests held indirectly include Interests withrespect to which a person holds voting or disposition power: (i) by virtue ofserving as one of two or fewer trustees, custodian or officer of the beneficialowner which is a charitable entity, benefit plan or custody account for thebenefit of a minor; (ii) with respect to certain Interests owned by members ofa person’s immediate family; or (iii) through a self directed benefit plan.

(2) Interests held indirectly include Interests withrespect to which a person holds voting or disposition power:  (i) by virtue of serving as one of two orfewer trustees, custodian or officer of the beneficial owner which is a charitableentity, benefit plan or custody account for the benefit of a minor; (ii) withrespect to certain Interests owned by members of a person’s immediate family;or (iii) through a self directed benefit plan.

28

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(c)           Changes in Control

None.

(d)           SecuritiesAuthorized for Issuance Under Equity Compensation Plans

None.

Item 13.  Certain Relationships and Related Transactions

See “Item 11.  Executive Compensation”and “Item 12.  Security Ownership ofCertain Beneficial Owners and Management.” The Partnership allocated to the General Partner $4,317,248 in brokeragefees and allocated $2,092,010 in profit share to the New Profits Memo Accountfor the year ended  December 31,2006.  The General Partner’s generalpartner interest showed an allocation of income of $505,493 for the year endedDecember 31, 2006.  The General Partnerhas paid certain administrative expenses to third-parties on behalf of thePartnership, related to legal, accounting, auditing, printing, postage andsimilar administrative expenses, and has been or will be reimbursed withoutinterest by the Partnership.  ThePartnership pays administrative expenses for legal, audit and accountingservices, up to 0.25 of 1% per annum of the Partnership’s average month-end netassets.  A portion of such expenses arepaid to an affiliate of the General Partner, The Millburn Corporation, for theprovision of accounting services to the Partnership.  The Partnership incurred administrativeexpenses of $448,912 during the year ended December 31, 2006 of which $308,037was paid or was payable to The Millburn Corporation.  The General Partner pays all administrativeexpenses in excess of 0.25 of 1% per annum of the Partnership’s averagemonth-end net assets.  The Partnership isprohibited from making any loans.

Item14.  Principal Accountant Fees andServices

(1)           AuditFees

The aggregate fees for professional services renderedby Deloitte & Touche LLP in connection with their audit of the Partnership’sfinancial statements in connection with the statutory and regulatory filingsfor the years ended December 31, 2006 and 2005 were approximately $93,000 and$39,600, respectively.

(2)           Audit-RelatedFees

There were no fees for assurance and related servicesrendered by Deloitte & Touche LLP for the years ended December 31, 2006 and2005.

(3)           TaxFees

The aggregate fees for professional services renderedby Deloitte & Touche LLP for tax compliance, advice or planning servicesrendered by Deloitte & Touche LLP for the benefit of the Partnership forthe years ended December 31, 2006 and 2005 were approximately $7,600 and $10,000,respectively.

(4)           AllOther Fees

None

29

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(5)           Pre-ApprovalPolicies

The board of directors of the General Partner pre-approves theengagement of the Partnership’s auditor for all services to be provided by theauditor.

PART IV

Item15.  Exhibits and Financial Statement Schedules

(a)(1)       Financial Statements

The following are included with the 2006 Report ofIndependent Registered Public Accounting Firm, a copy of which is filedherewith as Exhibit 13.01.

Affirmation of Millburn Ridgefield Corporation

Reportof Independent Registered Public Accounting Firm

Statementsof Financial Condition

CondensedSchedules of Investments

Statementsof Operations

Statementsof Changes in Partners’ Capital

Statementsof Financial Highlights

Notes to Financial Statements

(a)(2)       Financial Statement Schedules

All Schedules are omitted for the reason that they arenot required or are not applicable because equivalent information has beenincluded in the financial statements or the notes thereto.

(a)(3)       Exhibits as required by Item 601 of Regulation S-K

The following exhibits are included herewith.

| Designation | ** ** | **Description**                                                        |
|-------------|------------|------------------------------------------------------------------------|
|        |       |                                                                   |
| 13.01       |       | 2006 Report of Independent Registered Public  Accounting Firm          |
|        |       |                                                                   |
| 31.1        |       | Rule 13a-14(a)/15d-14(a) Certification of Principal  Executive Officer |
|        |       |                                                                   |
| 31.2        |       | Rule 13a-14(a)/15d-14(a) Certification of Principal  Executive Officer |
|        |       |                                                                   |
| 31.3        |       | Rule 13a-14(a)/15d-14(a) Certification of Principal  Financial Officer |
|        |       |                                                                   |
| 32.1        |       | Section 1350 Certification of Principal Executive  Officer             |
|        |       |                                                                   |
| 32.2        |       | Section 1350 Certification of Principal Executive  Officer             |
|        |       |                                                                   |
| 32.3        |       | Section 1350 Certification of Principal Financial  Officer             |

 

30

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The following exhibitswere filed by the Partnership as a part of its Registration Statement on Form10 (Reg. No. 000-50725) on April 29, 2004 and are incorporated herein byreference.

| Exhibit Number | ** ** | **Description  of Document**                                                                                                           |
|----------------|------------|----------------------------------------------------------------------------------------------------------------------------------------|
| 3.01           |       | Amended and Restated Certificate of Limited  Partnership of Nestor Partners                                                            |
| 4.01           |       | Amended and Restated  Agreement of Limited Partnership of Nestor Partners                                                              |
| 10.01          |       | Form of ISDA Master  Agreement and Credit Support Annex                                                                                |
| 10.02          |       | ISDA Master Agreement,  Schedule, and Credit Support Annex between Nestor Partners and Merrill Lynch  International Bank Limited       |
| 10.03          |       | ISDA Master Agreement,  Schedule, and Credit Support Annex between Nestor Partners and Dresdner Bank  A.G.                             |
| 10.04(a)       |       | Foreign Exchange  Customer Agreement between Nestor Partners and Morgan Stanley & Co.  Incorporated                                |
| 10.04(b)       |       | Customer Agreement  Foreign Currency Option Transactions between Nestor Partners and Morgan  Stanley Capital Group Inc.                |
| 10.05          |       | International Foreign  Exchange and Options Master Agreement between Deutsche Bank AG and Nestor  Partners                             |
| 10.06          |       | Acknowledgement of  Separate Risk Disclosure Statements and Customer Agreement between Merrill  Lynch Futures Inc. and Nestor Partners |
| 10.07          |       | Customer Agreement  between Warburg Dillon Reed LLC and Nestor Partners                                                                |
| 10.08          |       | Futures and Options  Agreement for Institutional Customers between Deutsche Morgan Grenfell Inc.  and Nestor Partners                  |

 

31

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SIGNATURES

Pursuant to the requirements of Section 13 or15(d) of the Securities Exchange Act of 1934, the Registrant has duly causedthis report to be signed on its behalf by the undersigned, thereunto dulyauthorized, on the 30th day of March, 2007.
|        |   | NESTOR PARTNERS |
|--------|--------|-----------------|
|   |   |            |
|   |   | By:             |   | Millburn Ridgefield Corporation, |
|   |   |            |   | General Partner |
|   |   |            |   |   |
|   |   | By:             |   | /s/ Harvey Beker |   |
|   |   |            |   | Harvey Beker |
|   |   |            |   | Co-Chief Executive Officer |

 

Pursuant to the requirements of the SecuritiesExchange Act of 1934, this report has been signed below by the followingpersons on behalf of the General Partner of the Registrant in the capacitiesand on the date indicated.
| Signature                  | ** ** | **Title with  General Partner**  | ** ** | **Date**            |
|----------------------------|------------|---------------------------------------|------------|---------------------|
|                       |       |                                  |       |                |
| /s/ Harvey Beker           |       | Co-Chief                              |       | March 30, 2007 |
| Harvey Beker               |       | Executive Officer and Director        |       |                |
|                       |       | (Principal Executive Officer)         |       |                |
|                       |       |                                  |       |                |
| /s/ George E. Crapple |       | Co-Chief Executive                    |       | March 30, 2007 |
| George E. Crapple          |       | Officer and Director                  |       |                |
|                       |       | (Principal Executive Officer)         |       |                |
|                       |       |                                  |       |                |
| /s/ Gregg Buckbinder       |       | Chief Financial and Operating Officer |       | March 30, 2007 |
| Gregg Buckbinder           |       | (Principal Financial Officer)         |       |                |
|                       |       |                                  |       |                |
| /s/ Tod A. Tanis           |       | Vice President                        |       | March 30, 2007 |
| Tod A. Tanis               |       | (Principal Accounting Officer)        |       |                |

 

(Being the principal executive officers, the principalfinancial officer and principal accounting officer, and a majority of thedirectors of Millburn Ridgefield Corporation)

Millburn RidgefieldCorporation

General Partner ofRegistrant

March 30, 2007
| By     |   | /s/ Harvey Beker           |   |
|--------|--------|----------------------------|--------|
|   |   | Harvey Beker               |   |
|   |   | Co-Chief Executive Officer |   |

 

32

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EXHIBIT INDEX

The following exhibits are included herewith.

| Designation  | ** ** | **Description**                                                        |
|--------------|------------|------------------------------------------------------------------------|
|   13.01 |       | 2006 Report of Independent Registered Public  Accounting Firm          |
| 31.1         |       | Rule  13a-14(a)/15d-14(a) Certification of Principal Executive Officer |
| 31.2         |       | Rule  13a-14(a)/15d-14(a) Certification of Principal Executive Officer |
| 31.3         |       | Rule  13a-14(a)/15d-14(a) Certification of Principal Financial Officer |
| 32.1         |       | Section 1350  Certification of Principal Executive Officer             |
| 32.2         |       | Section 1350  Certification of Principal Executive Officer             |
| 32.3         |       | Section 1350  Certification of Principal Financial Officer             |

 

The following exhibitswere filed by the Partnership as a part of its Registration Statement on Form10 (Reg. No. 000-50725) on April 29, 2004 and are incorporated herein byreference.
| Exhibit Number | ** ** | **Description  of Document**                                                                                                           |
|----------------|------------|----------------------------------------------------------------------------------------------------------------------------------------|
| 3.01           |       | Amended and Restated Certificate of Limited  Partnership of Nestor Partners                                                            |
| 4.01           |       | Amended and Restated  Agreement of Limited Partnership of Nestor Partners                                                              |
| 10.01          |       | Form of ISDA Master  Agreement and Credit Support Annex                                                                                |
| 10.02          |       | ISDA Master Agreement,  Schedule, and Credit Support Annex between Nestor Partners and Merrill Lynch  International Bank Limited       |
| 10.03          |       | ISDA Master Agreement,  Schedule, and Credit Support Annex between Nestor Partners and Dresdner Bank  A.G.                             |
| 10.04(a)       |       | Foreign Exchange  Customer Agreement between Nestor Partners and Morgan Stanley & Co.  Incorporated                                |
| 10.04(b)       |       | Customer Agreement  Foreign Currency Option Transactions between Nestor Partners and Morgan  Stanley Capital Group Inc.                |
| 10.05          |       | International Foreign  Exchange and Options Master Agreement between Deutsche Bank AG and Nestor  Partners                             |
| 10.06          |       | Acknowledgement of  Separate Risk Disclosure Statements and Customer Agreement between Merrill  Lynch Futures Inc. and Nestor Partners |
| 10.07          |       | Customer Agreement  between Warburg Dillon Reed LLC and Nestor Partners                                                                |
| 10.08          |       | Futures and Options  Agreement for Institutional Customers between Deutsche Morgan Grenfell Inc.  and Nestor Partners                  |

 

33

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