FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

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

                     OF THE SECURITIES EXCHANGE ACT OF 1934

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

                     OF THE SECURITIES EXCHANGE ACT OF 1934


For the Quarter ended September 30, 1999

Commission File Number 0-22489


               SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P. II
(Exact name of registrant as specified in its  charter)


      New York                            13-3862967
(State or other jurisdiction of          (I.R.S. Employer
 incorporation or organization)              Identification No.)

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

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



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
                                                 Yes   X    No

<PAGE>






                SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P. II
                                    FORM 10-Q
                                      INDEX

                                                                       Page
                                                                      Number

PART I - Financial Information:

  Item 1.  Financial Statements:
           Statement of Financial Condition at
           September 30, 1999 and December 31, 1998
           (unaudited).                                                 3

           Statement of Income and Expenses and Partners'  Capital
           for the three and nine months ended September 30, 1999
           and 1998 (unaudited).                                        4

           Notes to Financial Statements
           (unaudited)                                                5 - 9

 Item 2.   Management's Discussion and Analysis
           of Financial Condition and Results of
           Operations                                                10 - 13

 Item 3.   Quantitative and Qualitative Disclosures
           of Market Risk                                            14 - 15

PART II - Other Information                                             16

                              2

<PAGE>

                                     PART I

                          Item 1. Financial Statements


                SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P.II
                        STATEMENT OF FINANCIAL CONDITION
                              (Unaudited)

                                                    September 30,  DECEMBER 31,
                                                         1999           1998
                                                    ------------   ------------
ASSETS:

Equity in commodity futures trading account:
  Cash                                               $ 8,389,558   $ 8,835,664
  Net unrealized appreciation
   on open futures contracts                             518,000       903,705
  Zero Coupons, $15,753,000 and $16,838,000
   principal amount in 1999 and 1998, repectively,
   due November 15, 2003 at market value
   (amortized cost $12,158,191 and $12,384,517
    in 1999 and 1998, respectively)                   12,375,714    13,446,490
                                                    ------------   -----------

                                                      21,283,272    23,185,859
 Receivable from SSB on sale of
   Zero Coupons                                          228,391       174,309
 Interest income                                          26,869        26,522

                                                    -----------    -----------
                                                     $21,538,532   $23,386,690
                                                    ============    ===========


LIABILITIES AND PARTNERS' CAPITAL:


Liabilities:

 Accrued expenses:
 Commissions                                         $    73,016   $    77,866
 Management fees                                          32,368        35,086
 Other                                                    43,104        37,245
 Redemptions payable                                     389,274       298,339
                                                     -----------   -----------
                                                         537,762       448,536
                                                     -----------   -----------
Partners' Capital:

General Partner, 203 Unit
  equivalents outstanding  in 1999 and 1998              270,625       276,543
Limited Partners, 15,550 and 16,635
  Units of Limited Partnership Interest
  outstanding in 1999 and 1998, respectively          20,730,145    22,661,611
                                                    ------------   -----------
                                                      21,000,770    22,938,154
                                                    ------------    -----------
                                                     $21,538,532   $23,386,690
                                                     ===========    ===========

See Notes to Financial Statements.

                                             3

<PAGE>


                 SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P.II
             STATEMENT OF INCOME AND EXPENSES AND PARTNERS' CAPITAL
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                               THREE MONTHS ENDED             NINE MONTHS ENDED
                                                                   SEPTEMBER 30,                SEPTEMBER 30,
                                                         ----------------------------    ----------------------------
                                                              1999             1998            1999           1998
                                                         ----------------------------    ----------------------------
<S>                                                          <C>                <C>              <C>         <C>
Income:
  Net gains (losses) on trading of commodity
   futures:
  Realized gains on closed positions                     $    303,764    $    968,868    $    978,854    $    653,093
  Change in unrealized gains/losses on open
   positions                                               (1,020,476)      3,241,534        (385,705)      2,546,280
                                                         ------------    ------------    ------------    ------------
                                                             (716,712)      4,210,402         593,149       3,199,373
Less, brokerage commissions including clearing fees of
  $6,628, $5,150, $19,441 and $16,419, respectively          (242,734)       (229,377)       (732,256)       (670,803)
                                                         ------------    ------------    ------------    ------------
  Net realized and unrealized gains (losses)                 (959,446)      3,981,025        (139,107)      2,528,570
  Gain on sale of Zero Coupons                                  3,025          15,365          26,656          65,474
  Unrealized appreciation (depreciation)
  on Zero Coupons                                             (83,711)        718,876        (844,450)        821,953
  Interest income                                             285,400         274,572         836,880         852,632
                                                         ------------    ------------    ------------    ------------
                                                             (754,732)      4,989,838        (120,021)      4,268,629
                                                         ------------    ------------    ------------    ------------

Expenses:
  Management fees                                             101,119          97,092         303,179         281,891
  Incentive fees                                                 --           167,031          20,500         167,031
  Other                                                         8,733          13,485          38,844          48,406
                                                         ------------    ------------    ------------    ------------
                                                              109,852         277,608         362,523         497,328
                                                         ------------    ------------    ------------    ------------

  Net income (loss)                                          (864,584)      4,712,230        (482,544)      3,771,301
  Redemptions                                                (389,274)       (283,648)     (1,454,840)     (2,244,042)
                                                         ------------    ------------    ------------    ------------
  Net increase (decrease) in Partners' capital             (1,253,858)      4,428,582      (1,937,384)      1,527,259
Partners' capital, beginning of period                     22,254,628      19,404,881      22,938,154      22,306,204
                                                         ------------    ------------    ------------    ------------
Partners' capital, end of period                         $ 21,000,770    $ 23,833,463    $ 21,000,770    $ 23,833,463
                                                         ------------    ------------    ------------    ------------
Net asset value per Unit
  ( 15,753 and 17,057 Units outstanding
  at September 30, 1999 and 1998, respectively)          $   1,333.13    $   1,397.28    $   1,333.13    $   1,397.28
                                                         ------------    ------------    ------------    ------------
Net income (loss) per Unit of Limited Partnership
  Interest and General Partner Unit equivalent           $     (53.88)   $     273.01    $     (29.15)   $     221.29
                                                         ------------    ------------    ------------    ------------
</TABLE>


See Notes to Financial Statements
                                                                            4



<PAGE>


                SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P. II
                          NOTES TO FINANCIAL STATEMENTS
                               September 30, 1999
                                   (UNAUDITED)

1.  General

     Smith Barney  Principal Plus Futures Fund L.P. II (the  "Partnership")  was
formed  under  the laws of the  State  of New York on  November  16,  1995.  The
Partnership  engages in the  speculative  trading of a diversified  portfolio of
commodity interests, including futures contracts, options and forward contracts.
The  commodity  interests  that are traded by the  Partnership  are volatile and
involve a high degree of market risk. The Partnership maintains a portion of its
assets  in  principal  amounts  stripped  from  U.S.  Treasury  Bonds  under the
Treasury=s STRIPS program which payments are due approximately  seven years from
the date trading commenced ("Zero Coupons").

     Between April 3, 1996 (commencement of offering period) and August 8, 1996,
19,896 Units of limited  partnership  interest were sold at $1,000 per unit. The
proceeds of the offering were held in an escrow account until August 9, 1996, at
which time they were turned over to the Partnership for trading.

     Smith  Barney  Futures  Management  LLC acts as the  general  partner  (the
"General  Partner") of the Partnership.  The General Partner changed its form of
organization from a corporation to a limited liability company. The Parnership's
commodity  broker is Salomon Smith Barney Inc.  ("SSB").  SSB is an affiliate of
the General Partner. The General Partner is wholly owned by Salomon Smith Barney
Holdings Inc.  ("SSBH"),  which is the sole owner of SSB. SSBH is a wholly owned
subsidiary of Citigroup Inc. All trading  decisions are made for the Partnership
by John W. Henry & Company, Inc. and Willowbridge Associates Inc. (collectively,
the "Advisors").

     The accompanying  financial statements are unaudited but, in the opinion of
management,  include  all  adjustments,  consisting  only  of  normal  recurring
adjustments,  necessary for a fair presentation of the  Partnership's  financial
condition  at  September  30, 1999 and  December  31, 1998  (unaudited)  and the
results of its operations for the three and nine months ended September 30, 1999
and 1998. These financial  statements present the results of interim periods and
do not include all disclosures normally provided in annual financial statements.
It is suggested that these financial  statements be read in conjunction with the
Partnership=s  annual report on Form 10-K filed with the Securities and Exchange
Commission for the year ended December 31, 1998.

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

                              5
<PAGE>




2. Net Asset Value Per Unit:

     Changes  in net asset  value per Unit for the three and nine  months  ended
September 30, 1999 and 1998 were as follows:


                                       THREE-MONTHS ENDED     NINE-MONTHS ENDED
                                          SEPTEMBER 30,           SEPTEMBER
                                        1999        1998        1999       1998
                                     ---------------------  -------------------
Net realized and unrealized
 gains (losses)                  $   (59.80)  $  230.66   $   (8.69)    $151.30
Realized and unrealized gains
 (losses) on Zero Coupons             (5.03)      42.54      (49.37)      50.90
Interest income                       17.79       15.90       50.97       46.99
Expenses                              (6.84)     (16.09)     (22.06)     (27.90)
                                   --------    --------    --------    ---------

Increase (decrease) for
 period                              (53.88)     273.01      (29.15)     221.29

Net Asset Value per Unit,
  beginning of period              1,387.01    1,124.27    1,362.28    1,175.99
                                  --------    --------     --------    --------

Net Asset Value per Unit,
  end of period                  $ 1,333.13  $ 1,397.28   $1,333.13  $ 1,397.28
                                  =========    ========    ========   =========


3. Trading Activities:

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

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

         All of the commodity  interests  owned by the  Partnership are held for
trading purposes. The fair value of these commodity interests, including options
thereon, if applicable, at September 30, 1999 and December 31, 1998 was $518,000
and  $903,705,  respectively,  and the  average  fair value  during the nine and
twelve  months  then ended  based on monthly  calculation,  was  $1,067,426  and
$982,632, respectively.

4. Financial Instrument Risk:

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

                              6
<PAGE>


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

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

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

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

         The notional or  contractual  amounts of these  instruments,  while not
recorded in the financial  statements,  reflect the extent of the  Partnership=s
involvement in these instruments.

                                   7


<PAGE>

         At September  30,  1999,  the  notional or  contractual  amounts of the
Partnership=s  commitment to purchase and sell these instruments was $86,391,194
and  $83,407,383,  respectively,  as detailed  below.  All of these  instruments
mature within one year of September 30, 1999. However,  due to the nature of the
Partnership=s  business,  these  instruments  may not be held  to  maturity.  At
September 30, 1999, the fair value of the Partnership's  derivatives,  including
options thereon, if applicable, was $518,000, as detailed below.

                                 SEPTEMBER 30, 1999
                                     (Unaudited)
                               NOTIONAL OR CONTRACTUAL
                               AMOUNT OF COMMITMENTS
                              TO PURCHASE      TO SELL     FAIR VALUE

Currencies
- Exchange Traded Contracts   $ 7,715,262   $ 2,367,337   $ 133,075
- OTC Contracts                10,932,213     1,626,997      19,887
Energy                          5,024,126          --       286,296
Grains                               --            --          --
Interest Rates U.S.            21,843,650     3,971,438     (21,275)
Interest Rates Non-U.S         35,428,942    73,345,278      71,521
Livestock                       1,133,940          --        (3,440)
Metals                            815,376       208,798       1,121
Softs                           3,497,685     1,096,550      40,971
Indices                              --         790,985     (10,156)
                              -----------   -----------   ---------

Totals                        $86,391,194   $83,407,383   $ 518,000
                              ===========   ===========   =========

                                        8

<PAGE>




         At December 31, 1998, the Partnership's commitment to purchase and sell
these instruments was $57,847,242 and $52,605,224,  respectively,  and, the fair
value  of  the  Partnership's   derivatives,   including  options  thereon,   if
applicable, was $903,705, as detailed below.

                                  DECEMBER 31, 1998
                                     (Unaudited)
                               NOTIONAL OR CONTRACTUAL
                               AMOUNT OF COMMITMENTS
                               TO PURCHASE     TO SELL     FAIR VALUE

Currencies
 - Exchange Traded Contracts   $   558,900   $   552,600   $  (6,300)
 - OTC Contracts                 3,487,638     1,291,020      24,255
Energy                                --         812,280      27,010
Grains                                --         810,535      27,312
Interest Rates U.S.              7,605,156     8,066,963     (65,138)
Interest Rates Non-U.S          44,897,799    38,932,518     818,733
Metals                             379,338     1,396,540      33,623
Softs                              918,411       742,768      44,210
                               -----------   -----------   ---------

Total                          $57,847,242   $52,605,224   $ 903,705
                               ===========   ===========   =========

                              9
<PAGE>



                               PART I
Item 2.      Management=s  Discussion  and Analysis of Financial  Condition and
             Results of Operations.

Liquidity and Capital Resources

         The Partnership  does not engage in the sale of goods or services.  Its
only assets are its equity in its commodity futures trading account,  consisting
of  cash  and  cash  equivalents,  Zero  Coupons,  net  unrealized  appreciation
(depreciation)  on open  futures and forward  contracts,  commodity  options and
interest  receivable.  Because of the low margin deposits  normally  required in
commodity  futures  trading,  relatively  small  price  movements  may result in
substantial losses to the Partnership.  While substantial losses could lead to a
substantial  decrease  in  liquidity  no such losses  occurred  during the third
quarter of 1999.

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

         For the nine months  ended  September  30,  1999,  Partnership  capital
decreased 8.4% from  $22,938,154 to $21,000,770.  This decrease was attributable
to the redemption of 1,085 Units  totalling  $1,454,840  coupled with a net loss
from operations of $482,544 for the nine months ended September 30, 1999. Future
redemptions  can  impact  the  amount  of funds  available  for  investments  in
commodity contract positions in subsequent periods.

Risk of Computer System Failure (Year 2000 Issue)

                  The Year 2000 issue is the  result of  existing  computers  in
many  businesses  using  only two digits to  identify a year in the date  field.
These  computers and programs,  often referred to as  "information  technology,"
were  designed  and  developed  without  considering  the impact of the upcoming
change in the century. If not corrected,  many computer  applications could fail
or create  erroneous  results at the Year 2000.  Such systems and  processes are
dependent on correctly identifying dates in the next century.

                                   10
<PAGE>


                  The  General   Partner   administers   the   business  of  the
Partnership through various systems and processes maintained by SSBH and SSB. In
addition, the operation of the Partnership is dependent on the capability of the
Partnership's  Advisors,  the brokers and  exchanges  through which the Advisors
trade, and other third parties to prepare adequately for the Year 2000 impact on
their  systems  and  processes.   The  Partnership  itself  has  no  systems  or
information technology applications relevant to its operations.

                  The General Partner,  SSB, SSBH and their parent  organization
Citigroup Inc. have  undertaken a  comprehensive,  firm-wide  evaluation of both
internal and external  systems  (systems  related to third parties) to determine
the  specific  modifications  needed to prepare for the year 2000.  The combined
Year 2000 program in SSB is expected to cost approximately $140 million over the
four years from 1996 through 1999, and has involved over 450 people.  As of June
30, 1999, SSB has completed all compliance and certification work.

                  The systems and components  supporting  the General  Partner's
business that require  remediation  have been brought into Year 2000 compliance.
Final testing and certification was completed as of June 30, 1999.

                  This expenditure and the General Partner's resources dedicated
to the  preparation  for Year 2000 do not and will not have a material impact on
the operation or results of the Partnership.

                  The General Partner has received  statements from the Advisors
that they have completed their Year 2000 remediation programs.

                  The most likely and most  significant  risk to the Partnership
associated  with the lack of Year  2000  readiness  is the  failure  of  outside
organizations,  including the commodities exchanges, clearing organizations,  or
regulators  with which the  Partnership  interacts  to  resolve  their Year 2000
issues in a timely  manner.  This risk could  involve the inability to determine
the value of the  Partnership  at some  point in time and would  make  effecting
purchases  or  redemptions  of Units in the  Partnership  infeasible  until such
valuation was determinable.

                  SSB has  successfully  participated in  industry-wide  testing
including:  The Streetwide  Beta Testing  organized by the  Securities  Industry
Association  (SIA),  a  government  securities  clearing  test with the  Federal
Reserve Bank of New York,  The  Depository  Trust  Company,  and The Bank of New
York,  and the Futures  Industry  Association  participants  test. The firm also
participated in the streetwide testing that was conducted from March through May
1999.

                  It is possible that problems may occur that would require some
time to repair.  Moreover,  it is possible that problems will occur outside SSBH
and the General Partner for which SSBH or the General Partner could experience a
secondary  effect.  Consequently,  SSBH and the General  Partner  have  prepared
comprehensive,  written  contingency plans so that alternative  procedures and a
framework for critical decisions are defined before any potential crisis occurs.



                              11

<PAGE>

                  The  goal  of  year  2000  contingency  planning  is a set  of
alternate  procedures to be used in the event of a critical  system failure by a
supplier or  counterparty.  Planning  work was  completed in January  1999,  and
testing of  alternative  procedures  will be  completed  in the third and fourth
quarters of 1999.

Results of Operations

         During the Partnership's third quarter of 1999, the net asset value per
unit  decreased  3.9% from  $1,387.01 to $1,333.13 as compared to an increase of
24.3% in the third quarter of 1998.  The  Partnership  experienced a net trading
loss before brokerage  commissions and related fees in the third quarter of 1999
of  $716,712.  Losses were  primarily  attributable  to the trading of commodity
futures in currencies,  grains,  U.S. interest rates,  softs, metals and indices
and were partially offset by gains in livestock,  non - U.S.  interest rates and
energy.  The  Partnership  experienced  a  net  trading  gain  before  brokerage
commissions  and related fees in the third quarter of 1998 of $4,210,402.  Gains
were  recognized  in the trading of  commodity  futures in  currencies,  energy,
softs,  U.S. and non-U.S.  interest rates and were partially offset by losses in
grains, metals, and indices.

         Commodity futures markets are highly volatile. Broad price fluctuations
and rapid inflation increase the risks involved in commodity  trading,  but also
increase the possibility of profit. The profitability of the Partnership depends
on the  existence  of major  price  trends and the  ability of the  Advisors  to
identify  correctly  those price trends.  Price trends are  influenced by, among
other things, changing supply and demand relationships,  weather,  governmental,
agricultural,   commercial  and  trade  programs  and  policies,   national  and
international  political and economic  events and changes in interest  rates. To
the extent that market trends exist and the Advisors are able to identify  them,
the Partnership expects to increase capital through operations.

         Interest Income on 80% of the Partnership's  daily equity maintained in
cash was earned at the 30-day U.S.  Treasury bill rate determined  weekly by SSB
based on the  average  non-competitive  yield on  3-month  U.S.  Treasury  bills
maturing in 30 days.  Interest income  increased by $10,828 for the three months
ended  September  30, 1999 and  decreased  by $15,752 for the nine months  ended
September  30,  1999 as  compared  to the  corresponding  periods  in 1998.  The
decrease in interest income is primarily due to the effect of net redemptions on
the Partnership's equity maintained in cash during 1999.

         Brokerage commissions are calculated on the adjusted net asset value on
the  last  day of each  month  and  are  affected  by  trading  performance  and

                                   12
<PAGE>

redemptions.  Accordingly, they must be compared in relation to the fluctuations
in the monthly net asset value. Brokerage commissions and fees for the three and
nine  months  ended  September  30,  1999  increased  by  $13,357  and  $61,453,
respectively, as compared to the corresponding periods in 1998.

         Management fees are calculated as a percentage of the Partnership's net
asset value as of the end of each month and are affected by trading  performance
and redemptions.  Management fees increased by $4,027 and $21,288, respectively,
as compared to the corresponding periods in 1998.

         Incentive fees are based on the new trading  profits  generated by each
Advisor as defined in the  advisory  agreements  between  the  Partnership,  the
General  Partner and each Advisor.  Trading  performance  for the three and nine
months ended  September 30, 1999  resulted in incentive  fees of $0 and $20,500,
respectively.  Trading performance for the three and nine months ended September
30, 1998 resulted in incentive fees of $167,031.

                              13

<PAGE>


  Item 3.Quantitative and Qualitative Disclosures of Market Risk

           The Partnership is a speculative commodity pool. The market sensitive
  instruments held by it are acquired for speculative trading purposes,  and all
  or substantially  all of the  Partnership's  assets are subject to the risk of
  trading  loss.  Unlike an  operating  company,  the risk of  market  sensitive
  instruments is integral,  not incidental,  to the  Partnership's  main line of
  business.

           Market  movements result in frequent changes in the fair market value
  of the  Partnership's  open positions and,  consequently,  in its earnings and
  cash flow.  The  Partnership's  market risk is influenced by a wide variety of
  factors, including the level and volatility of interest rates, exchange rates,
  equity price levels, the market value of financial  instruments and contracts,
  the  diversification  effects among the  Partnership's  open positions and the
  liquidity of the markets in which it trades.

           The Partnership  rapidly  acquires and liquidates both long and short
  positions  in a wide  range  of  different  markets.  Consequently,  it is not
  possible  to predict  how a  particular  future  market  scenario  will affect
  performance,  and  the  Partnership's  past  performance  is  not  necessarily
  indicative of its future results.

           Value  at  Risk  is  a  measure  of  the  maximum  amount  which  the
  Partnership  could  reasonably  be expected to lose in a given market  sector.
  However, the inherent uncertainty of the Partnership's speculative trading and
  the  recurrence in the markets traded by the  Partnership of market  movements
  far  exceeding  expectations  could  result in actual  trading or  non-trading
  losses far beyond the indicated Value at Risk or the Partnership's  experience
  to date (i.e., "risk of ruin"). In light of the foregoing as well as the risks
  and uncertainties  intrinsic to all future  projections,  the inclusion of the
  quantification included in this section should not be considered to constitute
  any assurance or representation  that the  Partnership's  losses in any market
  sector  will be limited to Value at Risk or by the  Partnership's  attempts to
  manage its market risk.

                                   14

<PAGE>


         The following table indicates the trading Value at Risk associated with
the  Partnership's  open positions by market  category as of September 30, 1999.
All open position  trading risk exposures of the Partnership  have been included
in  calculating  the figures set forth  below.  As of September  30,  1999,  the
Partnership's total  capitalization was $21,000,770.  There has been no material
change in the trading Value at Risk information previously disclosed in the Form
10-K for the year ended December 31, 1998.

                               September 30, 1999
                                   (Unaudited)
                                              % of Total
Market Sector                Value at Risk   Capitalization

Currencies
 - OTC Contracts                $  203,067      0.97%
  - Exchange Traded Contracts      111,744      0.53%
Energy                             305,000      1.45%
Interest rates U.S.                116,500      0.56%
Interest rates Non-U.S             632,034      3.01%
Livestock                           24,000      0.12%
Metals                             250,600      1.19%
Softs                               63,938      0.30%
Indices                             39,504      0.19%
                                ----------      ----

Total                           $1,746,387      8.32%
                                ==========      ====


                                   15

<PAGE>

                            PART II OTHER INFORMATION

Item 1. Legal Proceedings

         For  information  concerning the suit filed by Harris Trust and Savings
Bank (as  trustee  for  Ameritech  Pension  Trust)  and others  against  Salomon
Brothers Inc., and Salomon Brothers Realty Corporation, see the description that
appears in the second and third  paragraphs  under the  caption  Item 3.  "Legal
Proceedings" on Form 10-K for the year ended December 31, 1998. In October 1999,
plaintiffs  filed a petition for certiorari  with the U. S. Supreme  Court.  The
petition  seeks  review of the U.S.  Court of Appeals for the Seventh  Circuit's
decision  reversing the denial of  defendants'  motion for summary  judgment and
dismissing the sole remaining ERISA claim against the Company.

         For information  concerning a purported class action in Florida against
numerous  broker-dealers  including Salomon Smith Barney Inc.  ("SSB"),  see the
description that appears in the sixth paragraph under the caption Item 3. "Legal
Proceedings"  on Form 10-K for the year ending  December  31,  1998.  In October
1999, plaintiff filed a second amended complaint.

         In March 1999, a complaint  seeking in excess of $250 million was filed
by a hedge fund and its investment  advisor  against SSB in the Supreme Court of
the  State of New  York,  County of New York  (MKP  Master  Fund,  LDC et al. v.
Salomon Smith Barney Inc.).  Plaintiffs allege that, while acting as their prime
broker SSB breached its contracts with plaintiffs, converted plaintiffs' monies,
and engaged in tortious  conduct,  including  breaching its fiduciary duties. In
October  1999,  the Court  granted in part and  denied in part  SSB's  motion to
dismiss the complaint.  The court dismissed  plaintiffs' tort claims,  including
the breach of  fiduciary  duty  claims,  but allowed the breach of contract  and
conversion  claims to  stand.  The  Company  intends  to  contest  this  lawsuit
vigorously.


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

Item 3.  Defaults Upon Senior Securities - None

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

Item 5.  Other Information - None

Item 6.  (a) Exhibits - None

         (b) Reports on Form 8-K - None




                              16

<PAGE>




                          SIGNATURES
           Pursuant  to  the  requirements  of  Section  13 or  15  (d)  of  the
Securities  Exchange Act of 1934,  the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P. II


By:   Smith Barney Futures Management LLC
     (General Partner)


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

Date:  11/12/99

           Pursuant to the requirements of the Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
registrant and in the capacities and on the dates indicated.
By:   Smith Barney Futures Management LLC
           (General Partner)


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


Date:  11/12/99


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

Date:  11/12/99

                              17