##### Table of Contents





UNITED STATES
    SECURITIES AND EXCHANGE COMMISSION
    WASHINGTON, D.C. 20549
  FORM 10-Q
  (X) QUARTERLY REPORT PURSUANT TO SECTION 13 or
    15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the quarterly period ended March 31, 2010
  OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
    THE SECURITIES EXCHANGE ACT OF 1934
  
  000-50735
  POTOMAC FUTURES FUND L.P.
     New York

13-3937275(State or other jurisdiction of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)   c/o Ceres
    Managed Futures LLC
 55 East
59th
Street -
10th Floor
 New York, New York 10022
     (212) 559-2011
       Yes X  No
    Yes   No
  Rule 12b-2
  Large
    accelerated filer
    Accelerated filer
    Non-accelerated filer X
    Smaller reporting company  rule 12b-2
  Yes   No X




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##### 



POTOMAC FUTURES FUND L.P.
  FORM 10-Q
  INDEX
  PageNumberPART I - Financial Information:Item 1.

Financial Statements:Statements of Financial Condition
    at
March 31, 2010 and December 31, 2009 (unaudited)

3Statements of Income and Expenses
    and Changes in Partners Capital for the three 
    months ended March 31, 2010 and 2009
    (unaudited)

4Notes to Financial Statements, including the Financial
    Statements of CMF Campbell Master Fund L.P.
    (unaudited)

5 - 21Item 2.

Managements Discussion and
    Analysis of Financial Condition
    and Results of Operations

22  25Item 3.

Quantitative and Qualitative
    Disclosures about Market Risk

26  27Item 4.

Controls and Procedures

28PART II - Other Information

29  32ExhibitsEX-31.1EX-31.2EX-32.1EX-32.2   2




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##### Table of Contents



PART I Item 1.
    Financial Statements  Potomac Futures Fund L.P.
    Statements of Financial Condition
    (Unaudited)  March 31,


December 31,2010


2009Assets:Investment in Master, at fair value

$
47,382,264


$
52,227,304Cash


120,068



105,370Total assets

$
47,502,332


$
52,332,674Liabilities and Partners Capital:Liabilities:Accrued expenses:Brokerage fees

$
257,304


$
283,469Management fees


78,568



86,598Other


104,085



90,507Redemptions payable


1,363,204



1,730,773Total liabilities


1,803,161



2,191,347Partners Capital:General Partner, 624.1683 Unit equivalents
outstanding at March 31, 2010
    and December 31, 2009


802,343



839,974Limited Partners, 34,926.7606 and 36,634.7661 Redeemable
    Units of Limited Partnership Interest outstanding
at March 31, 2010 and December 31, 2009, respectively


44,896,828



49,301,353Total partners capital


45,699,171



50,141,327Total liabilities and partners capital

$
47,502,332


$
52,332,674Net Asset Value per Unit

$
1,285.46


$
1,345.75    3




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Potomac Futures Fund L.P.
    Statements of Income and Expenses and Changes in Partners Capital
    (Unaudited) Three Months EndedMarch 31,2010
    
    
    2009Income:Net realized gains (losses) on closed contracts  allocated from Master

    $
    (3,039,275
    )
    
    $
    1,060,255Change in net unrealized gains (losses) on open contracts  allocated from Master

    
    1,858,685
    
    
    
    (777,287
    )Interest income allocated from Master

    
    5,768
    
    
    
    17,189Expenses allocated from Master

    
    (37,371
    )
    
    
    (18,643
    )Total income (loss)

    
    (1,212,193
    )
    
    
    281,514Expenses:Brokerage fees

    
    766,568
    
    
    
    1,312,391Management fees

    
    234,084
    
    
    
    401,127Other

    
    55,477
    
    
    
    65,130Total expenses

    
    1,056,129
    
    
    
    1,778,648Net income (loss)

    
    (2,268,322
    )
    
    
    (1,497,134
    )Additions  Limited Partners

    
    105,000
    
    
    
    520,000Redemptions  Limited Partners

    
    (2,278,834
    )
    
    
    (11,483,236
    )Net increase (decrease) in partners capital

    
    (4,442,156
    )
    
    
    (12,460,370
    )Partners Capital, beginning of period

    
    50,141,327
    
    
    
    85,654,503Partners Capital, end of period

    $
    45,699,171
    
    
    $
    73,194,133Net Asset Value per Unit (35,550.9289 and 49,588.0206 Units
    outstanding at March 31, 2010 and 2009, respectively)

    $
    1,285.46
    
    
    $
    1,476.04Net income (loss) per Redeemable Unit of Limited Partnership
    Interest and General Partner Unit equivalent

    $
    (60.29
    )
    
    $
    (29.54
    )Weighted average units outstanding

    
    36,945.2836
    
    
    
    53,441.2865
    4




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##### Table of Contents



Potomac Futures Fund L.P.
    Notes to Financial Statements
March 31, 2010
    (Unaudited)  1.
    General:             5




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##### Table of Contents



Potomac Futures Fund L.P.
    Notes to Financial Statements
March 31, 2010
    (Unaudited)
  Form 10-K
          6




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##### Table of Contents



Potomac Futures Fund L.P.
    Notes to Financial Statements
    March 31, 2010
    (Unaudited)
    CMF
    Campbell Master Fund L.P.
    Statements of Financial Condition
    (Unaudited)
  March 31,
    
    
    December 31,2010
    
    
    2009Assets:Equity in trading account:Cash
    
    $
    43,030,189
    
    
    $
    57,797,715Cash margin
    
    
    7,244,737
    
    
    
    5,501,376Net unrealized appreciation on open futures contracts
    
    
    849,406
    
    
    
    Net unrealized appreciation on open forward contracts
    
    
    349,514
    
    
    
    Options
owned, at fair value (cost $72,576 and
$96,122 at March 31, 2010 and December 31, 2009, respectively)
    
    
    62,323
    
    
    
    94,039Total assets
    
    $
    51,536,169
    
    
    $
    63,393,130Liabilities and Partners Capital:Liabilities:Net unrealized depreciation on open futures contracts
    
    $
    
    
    
    $
    366,940Net unrealized depreciation on open forward contracts
    
    
    
    
    
    
    431,591Options
written, at fair value (premium $31,350 and
$34,361 at March 31, 2010 and December 31, 2009, respectively)
    
    
    26,946
    
    
    
    35,406Accrued expenses:Professional fees
    
    
    11,058
    
    
    
    33,530Total liabilities
    
    
    38,004
    
    
    
    867,467Partners Capital:General
Partner, 0.0000 Unit equivalents at March 31, 2010 and
December 31, 2009
    
    
    
    
    
    
    Limited
Partners, 47,688.8913 and 56,557.8676 Redeemable
Units of Limited Partnership Interest outstanding at March 31, 2010
and December 31, 2009, respectively
    
    
    51,498,165
    
    
    
    62,525,663Total liabilities and partners capital
    
    $
    51,536,169
    
    
    $
    63,393,130Net Asset Value per
Redeemable Unit
    
    $
    1,079.88
    
    
    $
    1,105.52
  7




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##### Table of Contents



Potomac Futures Fund L.P.
    Notes to Financial Statements
    March 31, 2010
    (Unaudited)
  CMF
    Campbell Master Fund L.P.
    Condensed Schedule of Investments
    March 31, 2010
    (Unaudited)
  Notional ($)/ Number
    
    
    
    
    
    
    % of Partnersof Contracts
    
    
    Fair Value
    
    
    CapitalFutures Contracts PurchasedEnergy
    
    
    101
    
    
    $
    198,229
    
    
    
    0.39
    %Grains
    
    
    21
    
    
    
    (14,302
    )
    
    
    (0.03
    )Interest Rates Non-U.S.
    
    
    971
    
    
    
    131,109
    
    
    
    0.26Interest Rates U.S.
    
    
    450
    
    
    
    (151,441
    )
    
    
    (0.29
    )Indices
    
    
    612
    
    
    
    403,310
    
    
    
    0.78Livestock
    
    
    34
    
    
    
    17,580
    
    
    
    0.03Metals
    
    
    22
    
    
    
    39,820
    
    
    
    0.08Softs
    
    
    8
    
    
    
    (3,180
    )
    
    
    (0.01
    )Total futures contracts purchased
    
    
    
    
    
    
    621,125
    
    
    
    1.21Futures Contracts SoldEnergy
    
    
    9
    
    
    
    28,170
    
    
    
    0.06Grains
    
    
    115
    
    
    
    107,500
    
    
    
    0.21Interest Rates Non-U.S.
    
    
    414
    
    
    
    104,784
    
    
    
    0.20Indices
    
    
    2
    
    
    
    (7,895
    )
    
    
    (0.02
    )Softs
    
    
    12
    
    
    
    (4,278
    )
    
    
    (0.01
    )Total futures contracts sold
    
    
    
    
    
    
    228,281
    
    
    
    0.44Unrealized Appreciation on Forward ContractsCurrencies
    
    
    $146,331,646
    
    
    
    1,698,559
    
    
    
    3.30Metals
    
    
    47
    
    
    
    358,475
    
    
    
    0.70Total unrealized appreciation on forward contracts
    
    
    
    
    
    
    2,057,034
    
    
    
    4.00Unrealized Depreciation on Forward ContractsCurrencies
    
    
    $132,588,595
    
    
    
    (1,606,676
    )
    
    
    (3.12
    )Metals
    
    
    20
    
    
    
    (100,844
    )
    
    
    (0.20
    )Total unrealized depreciation on forward contracts
    
    
    
    
    
    
    (1,707,520
    )
    
    
    (3.32
    )Options OwnedCurrenciesCalls
    
    
    $4,141,363,503
    
    
    
    58,583
    
    
    
    0.11Puts
    
    
    $327,095,393
    
    
    
    3,740
    
    
    
    0.01Total options owned
    
    
    
    
    
    
    62,323
    
    
    
    0.12Options WrittenCurrenciesCalls
    
    $
    3,121,165,059
    
    
    
    (23,016
    )
    
    
    (0.04
    )Puts
    
    $
    42,029,853,468
    
    
    
    (3,930
    )
    
    
    (0.01
    )Total options written
    
    
    
    
    
    
    (26,946
    )
    
    
    (0.05
    )Total fair value
    
    
    
    
    
    $
    1,234,297
    
    
    
    2.40
    %
 8




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##### Table of Contents



Potomac Futures Fund L.P.Notes to Financial
StatementsMarch 31, 2010(Unaudited)
  CMF
    Campbell Master Fund L.P.Condensed Schedule of
InvestmentsDecember 31, 2009(Unaudited)
 Notional ($)/Number of





% of PartnersContracts


Fair Value


CapitalFutures Contracts PurchasedEnergy


36


$
21,183



0.03
%Grains


3



2,325



0.00
*Interest Rates
    Non-U.S.


446



(283,167
)


(0.45
)Interest Rates U.S.


507



(493,888
)


(0.79
)Indices


455



441,278



0.71Metals


18



(83,265
)


(0.13
)Softs


22



(4,234
)


(0.00
)*Total futures contracts purchased






(399,768
)


(0.63
)Futures Contracts SoldEnergy


1



2,730



0.00
*Grains


9



2,750



0.00
*Interest Rates
    Non-U.S.


136



26,911



0.04Interest Rates U.S.


2



437



0.00
*Total futures contracts sold






32,828



0.04Unrealized Appreciation on Forward ContractsCurrencies


$135,784,768



2,033,847



3.25Metals


37



285,660



0.46Total unrealized appreciation on forward contracts






2,319,507



3.71Unrealized Depreciation on Forward ContractsCurrencies


$154,270,721



(2,642,315
)


(4.23
)Metals


17



(108,783
)


(0.17
)Total unrealized depreciation on forward contracts






(2,751,098
)


(4.40
)Options OwnedCurrenciesCalls


$2,499,064,517



49,773



0.08Puts


$430,245,216



44,266



0.07Total options owned






94,039



0.15Options WrittenCurrenciesCalls


$13,333,773



(26,438
)


(0.04
)Puts


$43,764,467,517



(8,968
)


(0.01
)Total options written






(35,406
)


(0.05
)Total fair value





$
(739,898
)


(1.18
)%   *
    
    Due to rounding.
 9




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##### Table of Contents



Potomac Futures Fund L.P.
    Notes to Financial Statements
    March 31, 2010
    (Unaudited)
  CMF
    Campbell Master Fund L.P.
    Statements of Income and Expenses and Changes in Partners Capital
    (Unaudited)
   Three Months EndedMarch 31,2010
    
    
    2009Income:Net gains (losses) on trading of commodity interests:Net realized gains (losses) on closed contracts
    
    $
    (3,557,353
    )
    
    $
    1,537,936Change in net unrealized gains (losses) on open contracts
    
    
    1,994,729
    
    
    
    (1,147,857
    )Gain (loss) from trading, net
    
    
    (1,562,624
    )
    
    
    390,079Interest
income
    
    
    6,486
    
    
    
    24,796Total
income (loss)
    
    
    (1,556,138
    )
    
    
    414,875Expenses:Clearing fees
    
    
    31,142
    
    
    
    15,589Professional fees
    
    
    11,528
    
    
    
    11,238Total expenses
    
    
    42,670
    
    
    
    26,827Net income (loss)
    
    
    (1,598,808
    )
    
    
    388,048Additions  Limited Partners
    
    
    105,000
    
    
    
    520,000Redemptions  Limited Partners
    
    
    (9,527,204
    )
    
    
    (18,841,676
    )Distribution
of interest income to feeder funds
    
    
    (6,486
    )
    
    
    (24,796
    )Net increase (decrease) in Partners Capital
    
    
    (11,027,498
    )
    
    
    (17,958,424
    )Partners Capital, beginning of period
    
    
    62,525,663
    
    
    
    127,474,962Partners Capital, end of period
    
    $
    51,498,165
    
    
    $
    109,516,538Net Asset Value per Redeemable Unit
(47,688.8913 and 96,468.4496 Units outstanding at
March 31, 2010 and 2009, respectively)
    
    $
    1,079.88
    
    
    $
    1,135.26Net income (loss) per Redeemable Unit of Limited Partnership Interest
    
    $
    (25.51
    )
    
    $
    2.64Weighted average units outstanding
    
    
    54,543.8885
    
    
    
    106,758.7725
  10




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##### Table of Contents



Potomac Futures Fund L.P.
    Notes to Financial Statements
March 31, 2010
    (Unaudited)
  2.
    Financial
    Highlights:    Three Months EndedMarch 31,2010
    
    
    2009Net realized
and unrealized gains (losses) allocated from Master*
    
    $
    (52.34
    )
    
    $
    (20.99
    )Interest
income allocated from Master
    
    
    0.16
    
    
    
    0.34Expenses **
    
    
    (8.11
    )
    
    
    (8.89
    )Increase
(decrease) for the period
    
    
    (60.29
    )
    
    
    (29.54
    )Net Asset
Value per Redeemable Unit, beginning of period
    
    
    1,345.75
    
    
    
    1,505.58Net Asset
Value per Redeemable Unit, end of period
    
    $
    1,285.46
    
    
    $
    1,476.04   *
    
    Includes Partnership brokerage fees and clearing fees
    allocated from the Master.**
    
    Excludes Partnership brokerage fees and clearing fees
    allocated from the Master.  Three Months EndedMarch 31,2010
    
    
    2009Ratio to
average net assets:***Net
investment income (loss) before incentive fees****
    
    
    (9.4
    )%
    
    
    (9.2
    )%Operating
expenses
    
    
    9.4
    %
    
    
    9.3
    %Incentive fees
    
    
    
    %
    
    
    
    %Total expenses
    
    
    9.4
    %
    
    
    9.3
    %Total return:Total return before incentive fees
    
    
    (4.5
    )%
    
    
    (2.0
    )%Incentive fees
    
    
    
    %
    
    
    
    %Total return after incentive fees
    
    
    (4.5
    )%
    
    
    (2.0
    )%   ***
    
    Annualized (other than incentive fee).****
    
    Interest income allocated from Master less total expenses.   11




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##### Table of Contents



Potomac Futures Fund L.P.
    Notes to Financial Statements
March 31, 2010
    (Unaudited)
    Three Months

EndedMarch 31,2010
    
    
    2009Net realized and unrealized gains (losses)*
    
    $
    (25.41
    )
    
    $
    2.49Interest income
    
    
    0.13
    
    
    
    0.25Expenses **
    
    
    (0.23
    )
    
    
    (0.10
    )Increase (decrease) for the period
    
    
    (25.51
    )
    
    
    2.64Distribution
of interest income to feeder funds
    
    
    (0.13
    )
    
    
    (0.25
    )Net Asset
Value per Redeemable Unit, beginning of period
    
    
    1,105.52
    
    
    
    1,132.87Net Asset
value per Redeemable Unit, end of period
    
    $
    1,079.88
    
    
    $
    1,135.26*     Includes clearing
fees.**  Excludes clearing fees.Three Months

EndedMarch 31,2010
    
    
    2009Ratios to Average Net Assets:***Net
investment income (loss)****
    
    
    (0.3
    )%
    
    
    0.0
    %*****Operating
expenses
    
    
    0.3
    %
    
    
    0.1
    %Total return
    
    
    (2.3
    )%
    
    
    0.2
    %
 ***
    
    Annualized.****
    
    Interest income less total expenses.*****
    
    Due to rounding.
   3. Trading Activities:
     12




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##### Table of Contents



Potomac Futures Fund L.P.
    Notes to Financial Statements
March 31, 2010
    (Unaudited)
     Assets

March 31, 2010Futures ContractsEnergy

$
226,399Grains


107,867Interest Rates
    Non-U.S.


353,708Interest Rates U.S.


4,991Indices


445,258Livestock


18,900Metals


39,820Softs


5,499Total unrealized appreciation on open futures contracts

$
1,202,442LiabilitiesFutures ContractsGrains

$
(14,669
)Interest Rates
    Non-U.S.


(117,815
)Interest Rates U.S.


(156,432
)Indices


(49,843
)Livestock


(1,320
)Softs


(12,957
)Total unrealized depreciation on open futures contracts

$
(353,036
)Net unrealized appreciation on open futures contracts

$
849,406
*AssetsForward ContractsCurrencies

$
1,698,559Metals


358,475Total unrealized appreciation on open forward contracts

$
2,057,034LiabilitiesForward ContractsCurrencies

$
(1,606,676
)Metals


(100,844
)Total unrealized depreciation on open forward contracts

$
(1,707,520
)Net unrealized appreciation on open forward contracts

$
349,514
**   *
    
    This amount is in Net unrealized appreciation on open
    futures contracts on the Masters Statements of
    Financial Condition.**
    
    This amount is in Net unrealized appreciation on open
    forward contracts on the Masters Statements of
    Financial Condition.  13




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##### Table of Contents



Potomac Futures Fund L.P.
    Notes to Financial Statements
March 31, 2010
    (Unaudited)
  Assets

March 31, 2010Options OwnedCurrencies

$
62,323Total options owned

$
62,323
***LiabilitiesOptions WrittenCurrencies

$
(26,946
)Total options written

$
(26,946
)*******  
    This amount is in Options owned, at fair value on
    the Masters Statements of Financial Condition.**** This amount is in Options written, at fair value on
    the Masters Statements of Financial Condition.Assets

December 31, 2009Futures ContractsEnergy

$
28,837Grains


5,075Interest Rates
    Non-U.S.


76,641Interest Rates U.S.


437Indices


480,732Metals


410Softs


19,185Total unrealized appreciation on open futures contracts

$
611,317LiabilitiesFutures ContractsEnergy

$
(4,924
)Interest Rates
    Non-U.S.


(332,897
)Interest Rates U.S.


(493,888
)Indices


(39,454
)Metals


(83,675
)Softs


(23,419
)Total unrealized depreciation on open futures contracts

$
(978,257
)Net unrealized depreciation on open futures contracts

$
(366,940
)*AssetsForward ContractsCurrencies

$
2,033,847Metals


285,660Total unrealized appreciation on open forward contracts

$
2,319,507Liabilities

December 31, 2009Forward ContractsCurrencies

$
(2,642,315
)Metals


(108,783
)Total unrealized depreciation on open forward contracts

$
(2,751,098
)Net unrealized depreciation on open forward contracts

$
(431,591
)***   This amount is in Net unrealized depreciation on open
    futures contracts on the Masters Statements of
    Financial Condition.** This amount is in Net unrealized depreciation on open
    forward contracts on the Masters Statements of
    Financial Condition.Assets

December 31, 2009Options OwnedCurrencies

$
94,039Total options owned

$
94,039
***LiabilitiesOptions WrittenCurrencies

$
(35,406
)Total options written

$
(35,406
)****   ***
    
    This amount is in Options owned, at fair value on
    the Masters Statements of Financial Condition.****
    
    This amount is in Options written, at fair value on
    the Masters Statements of Financial Condition. 14




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##### Table of Contents



Potomac Futures Fund L.P.
    Notes to Financial Statements
March 31, 2010
    (Unaudited)
  Three Months Ended
    
    
    Three Months EndedMarch 31, 2010
    
    
    March 31, 2009Sector
    
    Gain (loss) from trading
    
    
    Gain (loss) from tradingCurrencies
    
    $
    (336,483
    )
    
    $
    455,504Energy
    
    
    (519,788
    )
    
    
    (37,109
    )Grains
    
    
    29,711
    
    
    
    Indices
    
    
    (1,232,613
    )
    
    
    (757,492
    )Interest Rates U.S.
    
    
    501,539
    
    
    
    137,452Interest Rates Non-U.S.
    
    
    536,561
    
    
    
    1,163,336Livestock
    
    
    18,480
    
    
    
    Metals
    
    
    (512,210
    )
    
    
    (571,612
    )Softs
    
    
    (47,821
    )
    
    
    Total
    
    $
    (1,562,624
    )*****
    
    $
    390,079
    *****
 
 *****
    
    This amount is in Gain (loss) from trading, net on the Masters Statements of Income and Expenses and Changes in Partners Capital.  4.
    Fair
    Value Measurements:  Partnerships Investments.
 Partnerships Fair
Value Measurements.
   15




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##### Table of Contents



Potomac Futures Fund L.P.
    Notes to Financial Statements
March 31, 2010
    (Unaudited)
  Quoted Pricesin Active Markets


Significant Other


Significantfor Identical


Observable Inputs


Unobservable3/31/2010


Assets (Level 1)


(Level 2)


Inputs (Level 3)AssetsInvestment in Master

$
47,382,264


$



$
47,382,264


$
Total fair value

$
47,382,264


$



$
47,382,264


$
Quoted Prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable Inputs
    
    
    Unobservable12/31/2009
    
    
    Assets (Level 1)
    
    
    (Level 2)
    
    
    Inputs (Level 3)AssetsInvestment in Master
    
    $
    52,227,304
    
    
    $
    
    
    
    $
    52,227,304
    
    
    $
    Total fair value
    
    $
    52,227,304
    
    
    $
    
    
    
    $
    52,227,304
    
    
    $
      Masters Investments.
 Masters Fair
Value Measurements.
 16




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##### Table of Contents



Potomac Futures Fund L.P.
    Notes to Financial Statements
March 31, 2010
    (Unaudited)
    Quoted Prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable Inputs
    
    
    Unobservable3/31/2010
    
    

Assets (Level 1)
    
    
    (Level 2)
    
    

Inputs (Level 3)AssetsFutures
    
    $
    849,406
    
    
    $
    849,406
    
    
    $
    
    
    
    $
    Forwards
    
    
    349,514
    
    
    
    257,631
    
    
    
    91,883
    
    
    
    Options owned
    
    
    62,323
    
    
    
    
    
    
    
    62,323
    
    
    
    Total assets
    
    
    1,261,243
    
    
    
    1,107,037
    
    
    
    154,206
    
    
    
    LiabilitiesOptions written
    
    $
    26,946
    
    
    $
    
    
    
    $
    26,946
    
    
    $
    Total liabilites
    
    
    26,946
    
    
    
    
    
    
    
    26,946
    
    
    
    Total fair value
    
    $
    1,234,297
    
    
    $
    1,107,037
    
    
    $
    127,260
    
    
    $
    
 Quoted Prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable Inputs
    
    
    Unobservable12/31/2009
    
    

Assets (Level 1)
    
    
    (Level 2)
    
    

Inputs (Level 3)AssetsForwards
    
    $
    176,877
    
    
    $
    176,877
    
    
    $
    
    
    
    $
    Options owned
    
    
    94,039
    
    
    
    
    
    
    
    94,039
    
    
    
    Total assets
    
    
    270,916
    
    
    
    176,877
    
    
    
    94,039
    
    
    
    LiabilitiesFutures
    
    $
    366,940
    
    
    $
    366,940
    
    
    $
    
    
    
    $
    Forwards
    
    
    608,468
    
    
    
    
    
    
    
    608,468
    
    
    
    Options written
    
    
    35,406
    
    
    
    
    
    
    
    35,406
    
    
    
    Total liabilites
    
    
    1,010,814
    
    
    
    366,940
    
    
    
    643,874
    
    
    
    Total fair value
    
    $
    (739,898
    )
    
    $
    (190,063
    )
    
    $
    (549,835
    )
    
    $
    
  17




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##### Table of Contents



Potomac Futures Fund L.P.
    Notes to Financial Statements
March 31, 2010
    (Unaudited)
  5.
    Financial
    Instrument Risks:             18




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##### Table of Contents



Potomac Futures Fund L.P.
    Notes to Financial Statements
March 31, 2010
    (Unaudited)
  6.  Critical
    Accounting Policies
  Use of Estimates
  Statement of Cash Flows
  Partnerships Investments
 Partnerships and the Masters Fair Value Measurements.
   19




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##### Table of Contents



Potomac Futures Fund L.P.
    Notes to Financial Statements
March 31, 2010
    (Unaudited)
  Futures Contracts
  Forward Foreign Currency Contracts
    London Metals Exchange Forward Contracts
 Options.
  Income Taxes
   20




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##### Table of Contents



Potomac Futures Fund L.P.
    Notes to Financial Statements
March 31, 2010
    (Unaudited)
    Subsequent Events.
  Recent Accounting Pronouncements.
  No. 2010-09 2010-09),
  Net Income (Loss) per Redeemable Unit.
 21




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##### Table of Contents



Item 2.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  Liquidity
    and Capital Resources
            Critical
    Accounting Policies
  Partnerships Investments
 Partnerships and the Masters Fair Value Measurements.
    22




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##### Table of Contents



Futures Contracts
  Forward Foreign Currency Contracts
    London Metals Exchange Forward Contracts
 Options.
  23




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##### Table of Contents



Results
    of Operations
           24




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##### Table of Contents



30-day 3-month and/or 90-day
        25




---



##### Table of Contents



Item 3.
    Quantitative
    and Qualitative Disclosures about Market Risk            one-day
 26




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##### Table of Contents



Form 10-K
   March 31, 2010

    (Unaudited)
  Three Months Ended March 31, 2010% of Total
    
    
    High
    
    
    Low
    
    
    AverageMarket Sector
    
    Value at Risk
    
    
    Capitalization
    
    
    Value at Risk
    
    
    Value at Risk
    
    
    Value at Risk*Currencies
    
    $
    1,468,601
    
    
    
    2.85
    %
    
    $
    2,368,529
    
    
    $
    45,857
    
    
    $
    1,275,554Energy
    
    
    398,700
    
    
    
    0.77
    %
    
    
    561,250
    
    
    
    75,800
    
    
    
    239,633Grains
    
    
    116,537
    
    
    
    0.23
    %
    
    
    116,537
    
    
    
    12,500
    
    
    
    75,437Interest Rates U.S.
    
    
    424,750
    
    
    
    0.82
    %
    
    
    889,400
    
    
    
    168,160
    
    
    
    442,640Interest Rates Non-U.S.
    
    
    1,405,492
    
    
    
    2.73
    %
    
    
    1,738,177
    
    
    
    592,281
    
    
    
    1,016,945Livestock
    
    
    29,950
    
    
    
    0.06
    %
    
    
    33,350
    
    
    
    9,000
    
    
    
    9,983Metals
    
    
    401,707
    
    
    
    0.78
    %
    
    
    624,202
    
    
    
    69,732
    
    
    
    348,648Softs
    
    
    33,572
    
    
    
    0.07
    %
    
    
    63,300
    
    
    
    5,200
    
    
    
    41,357Indices
    
    
    2,281,448
    
    
    
    4.43
    %
    
    
    3,100,712
    
    
    
    463,480
    
    
    
    1,289,904Total
    
    $
    6,560,757
    
    
    
    12.74
    %
  *
    Average of Month-end Values at Risk
 27




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##### Table of Contents



Item 4.
    Controls
    and Procedures      Rules 13a-15(e) 15d-15(e)
  internal control over financial
    reporting
  
    pertain to the maintenance of records that in reasonable detail
    accurately and fairly reflect the transactions and dispositions
    of the assets of the Partnership;
    provide reasonable assurance that (i) transactions are
    recorded as necessary to permit preparation of financial
    statements in accordance with GAAP and (ii) the Partnerships
    receipts are handled and expenditures are made only pursuant to
    authorizations of the General Partner; and
    provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of the
    Partnerships assets that could have a material effect on
    the financial statements.   28




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##### Table of Contents



PART II.
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings  Form 10-K
 Credit
Crisis Related Matters
   29




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##### Table of Contents



Item 1A.  Risk     Factors
    Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds          (d) Maximum Number(or Approximate(c) Total Number



Dollar Value) of(a) Total







of Redeemable Units



Redeemable Units thatNumber of



(b) Average



Purchased as Part



May Yet BeRedeemable



Price Paid per



of Publicly Announced



Purchased Under thePeriod


Units Purchased*



Redeemable Unit**



Plans or Programs



Plans or ProgramsJanuary 1, 2010 -
    January 31, 2010



378.0183



$
1,249.78




N/A




N/AFebruary 1, 2010 -
February 28, 2010



351.6429



$
1,260.34




N/A




N/AMarch 1, 2010 -
March 31, 2010



1,060.4796



$
1,285.46




N/A




N/A1,790.1408



$
1,272.99   * Generally, limited partners
    are permitted to redeem their Redeemable Units as of the end of
    each month on 10 days notice to the General Partner.
    Under certain circumstances, the General Partner can compel
    redemption but to date the General Partner has not exercised
    this right. Purchases of Redeemable Units by the Partnership
    reflected in the chart above were made in the ordinary course of
    the Partnerships business in connection with effecting
    redemptions for limited partners.
  ** Redemptions of Redeemable
    Units are effected as of the last day of each month at the Net
    Asset Value per Redeemable Unit as of that day.
  Item 3.
    Defaults
    Upon Senior Securities  None  Item 4.
    [Removed and Reserved]  Item 5.
    Other
Information  None. 30




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##### Table of Contents



Item 6.
    Exhibits 3.1
    
    Certificate of Limited Partnership as filed in the office of the Secretary of State of the
State of New York, dated March 13, 1997 (filed as Exhibit 3.1 to the General Form for
Registration of Securities on Form 10 filed on April 30, 2004 and incorporated herein by
reference).(a)
    
    Certificate of Amendment of the Certificate of Limited Partnership as filed in the office
of the Secretary of State of the State of New York, dated February 26, 1999 (filed as
Exhibit 3.4 to the General Form for Registration of Securities on Form 10 filed on April 30,
2004 and incorporated herein by reference).(b)
    
    Certificate of Change of the Certificate of Limited Partnership as filed in the office of
the Secretary of State of the State of New York, effective January 31, 2000 (filed as
Exhibit 3.3 to the General Form for Registration of Securities on Form 10 filed on April 30,
2004 and incorporated herein by reference).(c)
    
    Certificate of Amendment of the Certificate of Limited Partnership as filed in the office
of the Secretary of State of the State of New York, dated April 1, 2001 (filed as Exhibit
3.2 to the General Form for Registration of Securities on Form 10 filed on April 30, 2004
and incorporated herein by reference).(d)
    
    Certificate of Amendment of the Certificate of Limited Partnership as filed in the office
of the Secretary of State of the State of New York, dated April 21, 2003 (filed as Exhibit
3.5 to the General Form for Registration of Securities on Form 10 filed on April 30, 2004
and incorporated herein by reference).(e)
    
    Certificate of Amendment of the Certificate of Limited Partnership as filed in the office
of the Secretary of State of the State of
New York, dated September 21, 2005 (filed as Exhibit 3.1(e) to the Form 10-Q
filed on November 16, 2009 and incorporated
herein by reference).(f)
    
    Certificate of Amendment of the Certificate of Limited Partnership as filed in the office
of the Secretary of State of the State of New York, dated September 19, 2008 (filed as Exhibit 3.1(f) to the Form 10-Q filed on November 16, 2009 and incorporated
herein by reference).(g)
    
    Certificate of Amendment of the Certificate of Limited Partnership as filed in the office
of the Secretary of State of the State of New York, dated September 28, 2009 (filed as
Exhibit 99.1 to the Form 8-K filed on September 30, 2009 and incorporated herein by
reference).3.2
    
    Third Amended and Restated Limited Partnership Agreement, dated February 22, 2010 (filed as
Exhibit 3.6 to the Current Report on Form 8-K filed on February 25, 2010 and incorporated herein by reference).10.1
    
    Form of Subscription Agreement (filed as Exhibit 10.1 to the Form 10-Q filed on November 16, 2009 and incorporated
herein by reference).10.2
    
    Second Amended and Restated Customer Agreement between the Partnership and Salomon Smith
Barney Inc., dated April 1, 2001 (filed as Exhibit 10.2 to the General Form for Registration
of Securities on Form 10 filed on April 30, 2004 and incorporated herein by reference).10.3
    
    Amended and Restated Agency Agreement among the Partnership, Smith Barney Futures Management
LLC and Salomon Smith Barney Inc., dated April 1, 2001 (filed as Exhibit 10.3 to the General
Form for Registration of Securities on Form 10 filed on April 30, 2004 and incorporated herein
by reference).10.4
    
    Joinder Agreement among the Partnership, Citigroup Managed Futures LLC, Citigroup Global
Markets Inc. and Morgan Stanley Smith Barney LLC, dated June 1, 2009 (filed as Exhibit 10 to
the Form 10-Q filed on August 14, 2009 and incorporated herein by reference).10.5
    
    Escrow Agreement among the Partnership, Smith Barney Futures Management Inc., Smith Barney
Inc. and European American Bank, dated April 15, 1997 (filed as Exhibit 10.5 to the Form 10-Q filed on November 16, 2009 and incorporated
herein by reference).10.6
    
    Management Agreement among the Partnership, Smith Barney Futures Management Inc. and Campbell
& Company, Inc., dated April 1, 1997 (filed as Exhibit 10.1 to the General Form for
Registration of Securities on Form 10 filed on April 30, 2004 and incorporated herein by
reference).(a)
    
    First Amendment to the Management Agreement among the Partnership, Smith Barney Futures
Management Inc., Campbell & Company, Inc. and SFG Global Investments, Inc., dated March 1,
1999 (filed as Exhibit 10.1(a) to the General Form for Registration of Securities on Form 10
filed on April 30, 2004 and incorporated herein by reference).(b)
    
    Second Amendment to the Management Agreement among the Partnership, Smith Barney Futures
Management LLC and Campbell & Company, Inc., dated April 1, 2001 (filed as Exhibit 10.1(b)
to the General Form for Registration of Securities on Form 10 filed on April 30, 2004 and
incorporated herein by reference).(c)
    
    Letter extending Management Agreement between the General Partner and Campbell & Company,
Inc. for 2009, dated June 9, 2009 (filed as Exhibit 10.6(c) to the Form 10-K filed on March
31, 2010 and incorporated herein by reference).31.1
    
    Rule 13a-14(a)/15d-14(a) Certification (Certification of President and Director).31.2
    
    Rule 13a-14(a)/15d-14(a) Certification (Certification of Chief Financial Officer and Director).32.1
    
    Section 1350 Certification (Certification of President and Director).32.2
    
    Section 1350 Certification (Certification of Chief Financial Officer and Director). 31




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##### Table of Contents



SIGNATURES
    POTOMAC FUTURES FUND L.P.By:

Ceres Managed Futures LLC(General
    Partner)By:

/s/  Jerry
    PascucciJerry
    Pascucci
    President and DirectorDate: May 17, 2010By:

/s/  Jennifer
    MagroJennifer
    Magro
    Chief Financial Officer and Director
(Principal Accounting Officer)Date: May 17, 2010  32