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 March 31, 1997

Commission File Number 33-80723


               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 Inc.
                           390 Greenwich St. - 1st Fl.
                            New York, New York 10013
              (Address and Zip Code of principal executive offices)

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



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


<PAGE>




               SMITH BARNEY 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
                   March 31, 1997 and December 31, 1996.                3

                   Statement of Income and Expenses
                   and Partners' Capital for the three
                   months ended March 31, 1997.                         4

                   Notes to Financial Statements                      5 - 8

       Item 2.     Management's Discussion and Analysis
                   of Financial Condition and Results of
                   Operations                                         9 - 10

PART II - Other Information                                             11



                                      2

<PAGE>

                                     PART I

                          Item 1. Financial Statements


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



                                                        MARCH 31,   DECEMBER 31,
                                                          1997         1996
                                                      -----------   -----------
ASSETS:
                                                      (Unaudited)

Equity in commodity futures trading account:
  Cash and cash equivalents                           $10,203,463   $ 9,941,903
  Net unrealized appreciation
   on open futures contracts                              604,190       241,456
  Zero Coupons, $19,974,000 and $20,100,000
   principal amount in 1997 and 1996, respectively,
   due November 15, 2003 at market value
   (amortized cost $13,133,904 and $13,012,176
   in 1997 and 1996, respectively)                     12,779,165    13,093,140
                                                      -----------   -----------

                                                       23,586,818    23,276,499
 Receivable from SB on sale of
   Zero Coupons                                            80,484             -
                                                      -----------   -----------

                                                      $23,667,302   $23,276,499
                                                      ===========   ===========



LIABILITIES AND PARTNERS' CAPITAL:


Liabilities:

 Accrued expenses:
  Management fees                                     $    34,690   $    74,500
  Commissions                                              78,142        33,970
  Incentive fees                                          190,380       421,541
  Due to Smith Barney                                     356,755       449,877
  Other                                                    37,293        39,050
 Redemptions payable                                      146,228
                                                      -----------   -----------
                                                          843,488     1,018,938
Partners' Capital:

General Partner, 203 Unit
  equivalents outstanding  in 1997 and 1996               231,964       224,790
Limited Partners, 19,771 and 19,897
  Units of Limited Partnership Interest
  outstanding in 1997 and 1996, respectively           22,591,850    22,032,771
                                                      -----------   -----------

                                                       22,823,814    22,257,561
                                                      -----------   -----------

                                                      $23,667,302   $23,276,499
                                                      ===========   ===========
See Notes to Financial Statements 




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

                                                                   THREE-MONTHS
                                                                       ENDED
                                                                     MARCH 31,
                                                                       1997
                                                                   ------------
Income:
  Net gains on trading of commodity
   interests:
  Realized gains on closed positions                               $  1,040,385
  Change in unrealized gains/losses on
   open positions                                                       362,734
                                                                   ------------


                                                                      1,403,119
Less, brokerage commissions and clearing
  fees ($3,508)                                                        (242,260)
                                                                   ------------


  Net realized and unrealized gains                                   1,160,859

  Unrealized depreciation
   on Zero Coupons                                                     (435,703)
  Loss on sale of bonds                                                  (2,275)
  Interest income                                                       297,608
                                                                   ------------

                                                                      1,020,489
                                                                   ------------

Expenses:

  Management fees                                                       103,869
  Incentive fees                                                        190,380
  Other expenses                                                         13,759
                                                                   ------------

                                                                        308,008
                                                                   ------------


  Net income                                                            712,481
  Redemptions                                                          (146,228)
                                                                   ------------


  Net increase in Partners' capital                                     566,253

Partners' capital, beginning of period                               22,257,561
                                                                   ------------


Partners' capital, end of period                                   $ 22,823,814

                                                                   ============
Net Asset Value per Unit
 (19,974 Units outstanding at
  March 31, 1997 )                                                 $   1,142.68

                                                                   ============
Net income per Unit of Limited Partnership
   Interest and General Partner Unit equivalent                    $      35.34

                                                                   ============

Redemption Net Asset Value per Unit                                $   1,160.54

                                                                   ============

See Notes to Financial Statements.



                                       4

<PAGE>



              SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P. II
                  NOTES TO STATEMENT OF FINANCIAL CONDITION
                                 MARCH 31, 1997
                                   (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  interest  payments  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, 19,897 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  Inc. acts as the general  partner (the
"General Partner") of the Partnership. Smith Barney Inc. ("SB"), an affiliate of
the General Partner,  acts as commodity broker for the Partnership.  All trading
decisions  are  currently  being  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,  includes all  adjustments,  consisting only of normal  recurring
adjustments,  necessary for a fair presentation of the  Partnership's  financial
condition  at March 31,  1997 and the  results of its  operations  for the three
months ended March 31, 1997. These financial  statements  present the results of
an interim period 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, 1996.

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



                                      5

<PAGE>



               SMITH BARNEY PRINCIPAL PLUS FUTURES FUND L.P. II
                          NOTES TO FINANCIAL STATEMENTS
                                   (Continued)


2. Net Asset Value Per Unit:

       Changes in net asset value per Unit for the three  months ended March 31,
1997 were as follows:

                                                 THREE-MONTHS
                                                     ENDED
                                                 MARCH 31, 1997
                                                   ----------
Net realized and unrealized gains                  $   57.75
Realized and unrealized losses
 on Zero Coupons                                      (21.79)
Interest income                                        14.81
Expenses                                              (15.32)
Other                                                  (0.11)
                                                   ----------

Increase for period                                    35.34

Net Asset Value per Unit,
 beginning of period                                1,107.34
                                                   ----------
Net Asset Value per Unit,
 end of period                                     $1,142.68
                                                   ==========
Redemption Net Asset
 Value per Unit*                                   $1,160.54
                                                   ==========

* For the purpose of a redemption,  any accrued  liability for  reimbursement of
offering and  organization  expenses will not reduce  redemption net asset value
per unit.

3. Offering and Organization Costs:

      Offering and  organization  expenses of $560,000  relating to the issuance
and marketing of Units offered were initially paid by SB. The accrued  liability
for  reimbursement  of offering and  organization  expenses  will not reduce Net
Asset Value per Unit for any purpose (other than financial reporting), including
calculation of advisory and brokerage  fees and the  redemption  value of Units.
Interest earned by the Partnership will be used to reimburse SB for the offering
and  organization  expenses of the  Partnership  plus interest at the prime rate
quoted by the Chase  Manhattan  Bank until such time as such  expenses are fully
reimbursed. As of March 31, 1997, the Partnership has reimbursed SB for $203,245
of offering and organization expenses and $23,775 of interest.


                                      6

<PAGE>



4.    Trading Activities:

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

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

        All of the commodity  interests  owned by the  Partnership  are held for
trading purposes. The fair value of these commodity interests, including options
thereon,  at March 31, 1997 was  $604,190  and the average fair value during the
three months ended March 31, 1997, based on monthly calculation, was $906,844.

5.    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
include forwards,  futures and options,  whose value is based upon an underlying
asset,  index, or reference rate, and generally  represent future commitments to
exchange  currencies  or  cash  flows,  to  purchase  or  sell  other  financial
instruments  at specific  terms at specified  future  dates,  or, in the case of
derivative commodity instruments, to have a reasonable possibility to be settled
in cash or with another financial instrument. These instruments may be traded on
an  exchange  or  over-the-counter  ("OTC").  Exchange  traded  instruments  are
standardized and include futures and certain option contracts. OTC contracts are
negotiated between contracting parties and include forwards and certain options.
Each of these  instruments  is subject to various risks similar to those related
to the underlying  financial  instruments  including  market and credit risk. In
general,  the  risks  associated  with OTC  contracts  are  greater  than  those
associated  with  exchange  traded  instruments  because of the greater  risk of
default by the counterparty to an OTC contract.

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

        Credit risk is the possibility  that a loss may occur due to the failure
of a counterparty to perform  according to the terms of a contract.  Credit risk
with  respect to exchange  traded  instruments  is reduced to the extent that an
exchange or clearing  organization  acts as a counterparty to the  transactions.
The

                                      7

<PAGE>



Partnership's  risk of loss in the event of  counterparty  default is  typically
limited to the amounts  recognized in the  statement of financial  condition and
not  represented  by the contract or notional  amounts of the  instruments.  The
Partnership has concentration  risk because the sole counterparty or broker with
respect to the Partnership's assets is SB.

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

        The  notional or  contractual  amounts of these  instruments,  while not
recorded in the financial  statements,  reflect the extent of the  Partnership's
involvement in these instruments. At March 31, 1997, the notional or contractual
amounts of the  Partnership's  commitment to purchase and sell these instruments
was $14,910,976 and $60,524,581,  respectively,  as detailed below. All of these
instruments mature within one year of March 31, 1997. However, due to the nature
of the Partnership's business, these instruments may not be held to maturity. At
March 31,  1997,  the fair  value of the  Partnership's  derivatives,  including
options thereon, was $604,190, as detailed below.


                                  NOTIONAL OR CONTRACTUAL
                                   AMOUNT OF COMMITMENTS
                                TO PURCHASE      TO SELL           FAIR VALUE

Currencies
- Exchange Traded Contracts     $ 1,471,000     $ 3,470,375        $ (59,950)
- OTC Contracts                   2,545,125       7,020,107          (41,842)
Energy                                    0         373,900            6,420
Interest Rates U.S.                       0      17,886,675          174,150
Interest Rates Non-U.S.           4,051,776      29,797,072           81,382
Grains                            3,087,894               0          364,080
Livestock                           512,400               0            8,200
Softs                             1,719,131         947,089           73,657
Metals                            1,375,000         842,440            5,008
Indices                             148,650         186,923           (6,915)
                                ------------    ------------       ----------

Totals                          $14,910,976     $60,524,581        $ 604,190
                                ============    ============       =========




                                          8

<PAGE>



                                     PART I

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

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  deposit  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 first
quarter of 1997.

      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 three months ended March 31, 1997,  Partnership  capital increased
2.5% from  $22,257,561 to  $22,823,814.  This increase was  attributable  to net
income from operations of $712,481 and partially offset by the redemption of 126
Units resulting in an outflow of $146,228 for the quarter ended March 31, 1997.


Results of Operations

      During the three months ended March 31, 1997, the  Partnership's net asset
value per Unit  increased  3.2% from  $1,107.34 to  $1,142.68.  The  Partnership
experienced  a net trading  gain before  commissions  and  expenses in the first
quarter of 1997 of $1,403,119. Gains were recognized in the trading of commodity
futures in currencies,  softs,  grains,  interest rates,  indices and metals and
were partially offset by losses recognized in energy products and livestock. The
Partnership  commenced  trading  operations on August 9, 1996, and, as a result,
comparative information is not available.

      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

                                      9

<PAGE>



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 Treasury bill rate  determined  weekly by SB based
on the average  non-competitive yield on 3-month U.S. Treasury bills maturing in
30 days.

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

      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.

      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.



                                      10

<PAGE>



                            PART II OTHER INFORMATION

Item 1.  Legal Proceedings - None

Item 2.  Changes in Securities - 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



                                      11

<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 Inc.
        (General Partner)


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

Date:    5/12/97

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

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


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


Date:    5/12/97


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

Date:    5/12/97



                                      12