##### 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 June 30, 2009
  OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
    THE SECURITIES EXCHANGE ACT OF 1934
  
  000-50735
  SMITH BARNEY 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 Citigroup
    Managed Futures LLC
 55 East
59th
Street -
10th Fl
 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




---



##### 



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

Financial Statements:Statements of Financial Condition
    at
June 30, 2009 and December 31, 2008 (unaudited)

3Statements of Income and Expenses
    and Partners Capital for the three and six
    months ended June 30, 2009 and 2008
    (unaudited)

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

5 - 15Item 2.

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

16  19Item 3.

Quantitative and Qualitative
    Disclosures about Market Risk

20  21Item 4T.

Controls and Procedures

22PART II - Other Information

23  28ExhibitsEX-10--JOINDER AGREEMENTEX-31.1--CERTIFICATIONEX-31.2 CERTIFICATIONEX-32.1 CERTIFICATIONEX-32.2 CERTIFICATION   2




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##### Table of Contents



PART I Item 1.
    Financial Statements  Smith
    Barney Potomac Futures Fund L.P.
    Statements of Financial Condition
    (Unaudited)  June 30,


December 31,2009


2008Assets:Investment in Master, at fair value

$
64,923,588


$
91,152,448Cash


107,995



97,834Total assets

$
65,031,583


$
91,250,282Liabilities and Partners Capital:Liabilities:Accrued expenses:Brokerage commissions

$
352,254


$
494,272Management fees


107,655



151,058Other


86,233



121,454Redemptions payable


1,666,591



4,828,995Total liabilities


2,212,733



5,595,779Partners Capital:General Partner, 624.1683 and 729.3902 Unit equivalents
outstanding at June 30, 2009
    and December 31, 2008


846,148



1,098,155Limited Partners, 45,714.7822 and 56,162.1745 Redeemable
    Units of Limited Partnership Interest outstanding
at June 30, 2009 and December 31, 2008, respectively


61,972,702



84,556,348Total partners capital


62,818,850



85,654,503Total liabilities and partners capital

$
65,031,583


$
91,250,282    3




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##### Table of Contents



Smith
    Barney Potomac Futures Fund L.P.
    Statements of Income and Expenses and Partners Capital
    (Unaudited) Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Income:Net realized gains (losses) on closed positions allocated from Master

    $
    (5,121,812
    )
    
    $
    1,512,815
    
    
    $
    (4,061,557
    )
    
    $
    2,817,030Change in net unrealized gains (losses) on open positions allocated from Master

    
    710,548
    
    
    
    6,190,837
    
    
    
    (66,739
    )
    
    
    6,331,864Interest income allocated from Master

    
    14,132
    
    
    
    373,352
    
    
    
    31,321
    
    
    
    1,007,378Expenses allocated from Master

    
    (16,832
    )
    
    
    (29,841
    )
    
    
    (35,475
    )
    
    
    (65,395
    )Total income (loss)

    
    (4,413,964
    )
    
    
    8,047,163
    
    
    
    (4,132,450
    )
    
    
    10,090,877Expenses:Brokerage commissions

    
    1,110,773
    
    
    
    2,190,866
    
    
    
    2,423,164
    
    
    
    4,595,214Management fees

    
    339,445
    
    
    
    670,042
    
    
    
    740,572
    
    
    
    1,405,436Other

    
    57,031
    
    
    
    54,227
    
    
    
    122,161
    
    
    
    104,633Total expenses

    
    1,507,249
    
    
    
    2,915,135
    
    
    
    3,285,897
    
    
    
    6,105,283Net income (loss)

    
    (5,921,213
    )
    
    
    5,132,028
    
    
    
    (7,418,347
    )
    
    
    3,985,594Additions  Limited Partners

    
    1,449,000
    
    
    
    820,000
    
    
    
    1,969,000
    
    
    
    4,645,000Redemptions  Limited Partners

    
    (5,755,486
    )
    
    
    (21,641,054
    )
    
    
    (17,238,722
    )
    
    
    (36,045,362
    )Redemptions  General Partner
    
    (147,584
    )
    
    
    
    
    
    
    (147,584
    )
    
    
    Net increase (decrease) in partners capital

    
    (10,375,283
    )
    
    
    (15,689,026
    )
    
    
    (22,835,653
    )
    
    
    (27,414,768
    )Partners Capital, beginning of period

    
    73,194,133
    
    
    
    137,143,909
    
    
    
    85,654,503
    
    
    
    148,869,651Partners Capital, end of period

    $
    62,818,850
    
    
    $
    121,454,883
    
    
    $
    62,818,850
    
    
    $
    121,454,883Net Asset Value per Unit (46,338.9505 and 74,756.0427 Units
    outstanding at June 30, 2009 and 2008, respectively)

    $
    1,355.64
    
    
    $
    1,624.68
    
    
    $
    1,355.64
    
    
    $
    1,624.68Net income (loss) per Redeemable Unit of Limited Partnership
    Interest and General Partner Unit equivalent

    $
    (120.40
    )
    
    $
    63.49
    
    
    $
    (149.94
    )
    
    $
    51.23
    4




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##### Table of Contents



Smith
    Barney Potomac Futures Fund L.P.
    Notes to Financial Statements
    June 30, 2009
    (Unaudited)  1.
    General:              Form 10-K
         5




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##### Table of Contents



Smith
    Barney Potomac Futures Fund L.P.
    Notes to Financial Statements
    June 30, 2009
    (Unaudited)
    CMF
    Campbell Master Fund L.P.
    Statements of Financial Condition
    (Unaudited)
  June 30,
    
    
    December 31,2009
    
    
    2008Assets:Equity in trading account:Cash
    
    $
    73,508,270
    
    
    $
    119,063,081Cash margin
    
    
    6,613,828
    
    
    
    7,947,067Net unrealized appreciation on open futures contracts
    
    
    
    
    
    
    159,230Net unrealized appreciation on open forward contracts
    
    
    
    
    
    
    397,543Options
owned, at fair value (cost $33,503 and
$36,166 at June 30, 2009 and December 31, 2008, respectively)
    
    
    34,422
    
    
    
    20,304Total assets
    
    $
    80,156,520
    
    
    $
    127,587,225Liabilities and Partners Capital:Liabilities:Net unrealized depreciation on open futures contracts
    
    $
    44,149
    
    
    $
    Net unrealized depreciation on open forward contracts
    
    
    8,900
    
    
    
    Options written, at fair value (premium $104,768 and
$108,994 at June 30, 2009 and December 31, 2008, respectively)
    
    
    54,374
    
    
    
    82,624Accrued expenses:Professional fees
    
    
    18,238
    
    
    
    29,639Total liabilities
    
    
    125,661
    
    
    
    112,263Partners Capital:General Partner, 0.0000 Unit equivalents at June 30, 2009 and
December 31, 2008
    
    
    
    
    
    
    Limited Partners Capital, 75,093.4702 and 112,523.4490 Redeemable
Units of Limited Partnership Interest outstanding at June 30, 2009
and December 31, 2008, respectively
    
    
    80,030,859
    
    
    
    127,474,962Total liabilities and partners capital
    
    $
    80,156,520
    
    
    $
    127,587,225
  6




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##### Table of Contents



Smith
    Barney Potomac Futures Fund L.P.
    Notes to Financial Statements
    June 30, 2009
    (Unaudited)
  CMF
    Campbell Master Fund L.P.
    Schedule of Investments
    June 30, 2009
    (Unaudited)
  Notional($)/Number of

    
    
    
    
    
    
    % of PartnersContracts

    

    
    Fair Value
    
    
    CapitalFutures
Contracts PurchasedEnergy
    
    
    83
    
    
    $
    (72,376
    )
    
    
    (0.09
    )%Interest Rates Non-U.S.
    
    
    567
    
    
    
    129,112
    
    
    
    0.16Interest Rates U.S.
    
    
    37
    
    
    
    34,172
    
    
    
    0.04Indices
    
    
    164
    
    
    
    141,085
    
    
    
    0.17Metals
    
    
    16
    
    
    
    (40,370
    )
    
    
    (0.05
    )Total futures contracts purchased
    
    
    
    
    
    
    191,623
    
    
    
    0.23Futures Contracts SoldEnergy
    
    
    25
    
    
    
    46,220
    
    
    
    0.06Interest Rates Non-U.S.
    
    
    101
    
    
    
    (446,664
    )
    
    
    (0.56
    )Interest Rates U.S.
    
    
    388
    
    
    
    (1,419
    )
    
    
    (0.00
    )*Indices
    
    
    148
    
    
    
    166,091
    
    
    
    0.21Total futures contracts sold
    
    
    
    
    
    
    (235,772
    )
    
    
    (0.29
    )Unrealized
Appreciation on Open Forward ContractsCurrencies
    
    
    116,640,317
    
    
    
    1,629,790
    
    
    
    2.04Metals
    
    
    11
    
    
    
    33,008
    
    
    
    0.04Total
unrealized appreciation on open forward contracts
    
    
    
    
    
    
    1,662,798
    
    
    
    2.08Unrealized
Depreciation on Open Forward ContractsCurrencies
    
    
    147,053,222
    
    
    
    (1,611,233
    )
    
    
    (2,01
    )Metals
    
    
    28
    
    
    
    (60,465
    )
    
    
    (0.07
    )Total unrealized depreciation on forward contracts
    
    
    
    
    
    
    (1,671,698
    )
    
    
    (2.08
    )Options OwnedCurrencies
    
    
    36,650,173,773
    
    
    
    34,422
    
    
    
    0.04Options WrittenCurrencies
    
    
    42,821,794,280
    
    
    
    (54,374
    )
    
    
    (0.07
    )Total fair value
    
    
    
    
    
    $
    (73,001
    )
    
    
    (0.09
    )%
 *
    
    Due to rounding. 7




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##### Table of Contents



Smith
    Barney Potomac Futures Fund L.P.Notes to Financial StatementsJune 30, 2009(Unaudited)
  CMF
    Campbell Master Fund L.P.Schedule of InvestmentsDecember 31, 2008(Unaudited)
 Notional($)/Number of

    
    



% of PartnersContracts

    

    
Fair Value


CapitalFutures Contracts PurchasedInterest Rates Non-U.S.

    
    1,065
    
    
$
600,131



0.47
%Interest Rates U.S.

    
    129
    
    

(204,258
)


(0.16
)Indices

    
    41
    
    

44,667



0.04Metals

    
    1
    
    

3,250



0.00
*Total futures contracts purchased

    
    
    
    

443,790



0.35Futures Contracts SoldEnergy

    
    20
    
    

(42,257
)


(0.03
)Interest Rates Non-U.S.

    
    174
    
    

(92,304
)


(0.07
)Interest Rates U.S.

    
    17
    
    

(987
)


(0.00
)*Indices

    
    193
    
    

(149,012
)


(0.12
)Total futures contracts sold

    
    
    
    

(284,560
)


(0.22
)Unrealized Appreciation on Open Forward ContractsCurrencies

    
    99,409,075
    
    

3,229,485



2.53Metals

    
    2
    
    

5,333



0.00
*Total unrealized appreciation on open forward contracts

    
    
    
    

3,234,818



2.53Unrealized Depreciation on Open Forward ContractsCurrencies

    
    88,487,957
    
    

(2,741,087
)


(2.15
)Metals

    
    31
    
    

(96,188
)


(0.08
)Total unrealized depreciation on open forward contracts

    
    
    
    

(2,837,275
)


(2.23
)Options OwnedCurrencies

    
    18,203,022,732
    
    

20,304



0.02Options WrittenCurrencies

    
    62,985,529,183
    
    

(82,624
)


(0.06
)Total fair value

    
    
    
    
$
494,453



0.39
%   *
    
    Due to rounding.
 8




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##### Table of Contents



Smith
    Barney Potomac Futures Fund L.P.
    Notes to Financial Statements
    June 30, 2009
    (Unaudited)
  CMF
    Campbell Master Fund L.P.
    Statements of Income and Expenses and Partners Capital
    (Unaudited)
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Income:Net gains (losses) on trading of commodity interests:Net realized gains (losses) on closed contracts
    
    $
    (6,670,059
    )
    
    $
    1,934,313
    
    
    $
    (5,132,123
    )
    
    $
    3,759,185Change in net unrealized gains (losses) on open contracts
    
    
    578,840
    
    
    
    8,268,036
    
    
    
    (569,017
    )
    
    
    8,463,737Gain (loss) from trading, net
    
    
    (6,091,219
    )
    
    
    10,202,349
    
    
    
    (5,701,140
    )
    
    
    12,222,922Interest
income
    
    
    18,962
    
    
    
    500,727
    
    
    
    43,758
    
    
    
    1,386,875Total
income (loss)
    
    
    (6,072,257
    )
    
    
    10,703,076
    
    
    
    (5,657,382
    )
    
    
    13,609,797Expenses:Clearing fees
    
    
    12,569
    
    
    
    31,493
    
    
    
    28,158
    
    
    
    72,313Professional fees
    
    
    9,735
    
    
    
    8,516
    
    
    
    20,973
    
    
    
    17,382Total expenses
    
    
    22,304
    
    
    
    40,009
    
    
    
    49,131
    
    
    
    89,695Net income (loss)
    
    
    (6,094,561
    )
    
    
    10,663,067
    
    
    
    (5,706,513
    )
    
    
    13,520,102Additions  Limited Partners
    
    
    1,449,000
    
    
    
    820,000
    
    
    
    1,969,000
    
    
    
    4,645,000Redemptions  Limited Partners
    
    
    (24,821,156
    )
    
    
    (32,673,406
    )
    
    
    (43,662,832
    )
    
    
    (52,059,149
    )Distribution
of interest income to feeder funds
    
    
    (18,962
    )
    
    
    (500,727
    )
    
    
    (43,758
    )
    
    
    (1,386,875
    )Net increase (decrease) in Partners Capital
    
    
    (29,485,679
    )
    
    
    (21,691,066
    )
    
    
    (47,444,103
    )
    
    
    (35,280,922
    )Partners Capital, beginning of period
    
    
    109,516,538
    
    
    
    203,106,344
    
    
    
    127,474,962
    
    
    
    216,696,200Partners Capital, end of period
    
    $
    80,030,859
    
    
    $
    181,415,278
    
    
    $
    80,030,859
    
    
    $
    181,415,278Net Asset Value per Redeemable Unit
(75,093.4702 and 154,624.8850 Redeemable Units outstanding at
June 30, 2009 and 2008, respectively)
    
    $
    1,065.75
    
    
    $
    1,173.26
    
    
    $
    1,065.75
    
    
    $
    1,173.26Net income (loss) per Redeemable Unit of Limited Partnership Interest
    
    $
    (69.28
    )
    
    $
    70.15
    
    
    $
    (66.64
    )
    
    $
    85.36
  9




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##### Table of Contents



Smith
    Barney Potomac Futures Fund L.P.
    Notes to Financial Statements
    June 30, 2009
    (Unaudited)
  2.
    Financial
    Highlights:    Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net realized and unrealized gains (losses) allocated from Master*

    $
    (112.46
    )
    
    $
    67.63
    
    
    $
    (133.45
    )
    
    $
    57.07Interest income allocated from Master

    
    0.29
    
    
    
    4.38
    
    
    
    0.63
    
    
    
    11.10Expenses**

    
    (8.23
    )
    
    
    (8.52
    )
    
    
    (17.12
    )
    
    
    (16.94
    )Increase (decrease) for the period

    
    (120.40
    )
    
    
    63.49
    
    
    
    (149.94
    )
    
    
    51.23Net Asset Value per Redeemable Unit, beginning of period

    
    1,476.04
    
    
    
    1,561.19
    
    
    
    1,505.58
    
    
    
    1,573.45Net Asset Value per Redeemable Unit, end of period

    $
    1,355.64
    
    
    $
    1,624.68
    
    
    $
    1,355.64
    
    
    $
    1,624.68   *
    
    Includes Partnership brokerage commissions and expenses
    allocated from the Master.**
    
    Excludes Partnership brokerage commissions and expenses
    allocated from the Master.  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Ratio to average net assets:***Net investment income (loss) before incentive fees****

    
    (9.0
    )%
    
    
    (8.0
    )%
    
    
    (9.1
    )%
    
    
    (7.6
    )%Operating expenses
    
    
    9.0
    %
    
    
    9.2
    %
    
    
    9.2
    %
    
    
    9.1
    %Incentive fees
    
    
    
    %
    
    
    
    %
    
    
    
    %
    
    
    
    %Total expenses

    
    9.0
    %
    
    
    9.2
    %
    
    
    9.2
    %
    
    
    9.1
    %Total return:Total return before incentive fees

    
    (8.2
    )%
    
    
    4.1
    %
    
    
    (10.0
    )%
    
    
    3.3
    %Incentive fees

    
    
    %
    
    
    
    %
    
    
    
    %
    
    
    
    %Total return after incentive fees

    
    (8.2
    )%
    
    
    4.1
    %
    
    
    (10.0
    )%
    
    
    3.3
    %   ***
    
    Annualized (other than incentive fee).****
    
    Interest income allocated from Master less total expenses.   10




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##### Table of Contents



Smith
    Barney Potomac Futures Fund L.P.
    Notes to Financial Statements
    June 30, 2009
    (Unaudited)
    Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net realized and unrealized gains (losses)*
    
    $
    (69.39
    )
    
    $
    67.08
    
    
    $
    (66.90
    )
    
    $
    77.63Interest income
    
    
    0.23
    
    
    
    3.13
    
    
    
    0.48
    
    
    
    7.83Expenses **
    
    
    (0.12
    )
    
    
    (0.06
    )
    
    
    (0.22
    )
    
    
    (0.10
    )Increase (decrease) for the period
    
    
    (69.28
    )
    
    
    70.15
    
    
    
    (66.64
    )
    
    
    85.36Distribution of interest income to feeder funds
    
    
    (0.23
    )
    
    
    (3.13
    )
    
    
    (0.48
    )
    
    
    (7.83
    )Net Asset Value per Redeemable Unit, beginning of
period
    
    
    1,135.26
    
    
    
    1,106.24
    
    
    
    1,132.87
    
    
    
    1,095.73Net Asset value per Redeemable Unit, end of period
    

    $
    1,065.75
    
    
    $
    1,173.26
    
    
    $
    1,065.75
    
    
    $
    1,173.26*     Includes clearing
fees.**  Excludes clearing fees.Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Ratios to Average Net Assets:***Net
investment income (loss)****
    
    
    0.0
    %*****
    
    
    1.0
    %
    
    
    0.0
    %*****
    
    
    1.3
    %Operating
expenses
    
    
    0.1
    %
    
    
    0.1
    %
    
    
    0.1
    %
    
    
    0.1
    %Total return
    
    
    (6.1)
    %
    
    
    6.3
    %
    
    
    (5.9)
    %
    
    
    7.8
    %
 ***
    
    Annualized.****
    
    Interest income less total expenses.*****
    
    Due to rounding.
   3. Trading Activities:
       11




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##### Table of Contents



Smith
    Barney Potomac Futures Fund L.P.
    Notes to Financial Statements
    June 30, 2009
    (Unaudited)
       June 30, 2009
    
    
    
    
    
    
    June 30, 2009
    
    
    
    
    
    June 30, 2009Assets
    
    
    
    
    
    Assets
    
    
    
    
    
    AssetsFutures Contracts
    
    
    
    
    
    Forward Contracts
    
    
    
    
    
    Options OwnedEnergy
    
    $
    69,855
    
    
    Currencies
    
    $
    1,629,790
    
    
    Currencies
    
    $
    34,422Interest Rates Non-U.S.
    
    
    159,482
    
    
    Metals
    
    
    33,008Interest Rates U.S.
    
    
    175,573Indices
    
    
    316,378Total unrealized appreciation on open futures contracts
    
    $
    721,288
    
    
Total unrealized appreciation on open forward contracts
    
    $
    1,662,798
    
    
Total
options owned
    
    $
    34,422
    ***Liabilities
    
    
    
    
    
    Liabilities
    
    
    
    
    
    LiabilitiesFutures Contracts
    
    
    
    
    
    Forward Contracts
    
    
    
    
    
    Options WrittenEnergy
    
    $
    (96,011
    )
    
    Currencies
    
    $
    (1,611,233
    )
    
    Currencies
    
    $
    (54,374
    )Interest Rates Non-U.S.
    
    
    (477,034
    )
    
    Metals
    
    
    (60,465
    )Interest Rates U.S.
    
    
    (142,820
    )Indices
    
    
    (9,202
    )Metals
    
    
    (40,370
    )Total unrealized depreciation on open futures contracts
    
    $
    (765,437
    )
    

    Total unrealized depreciation on open forward contracts
    
    $
    (1,671,698
    )


    
Total
options written
    
    $
    (54,374
    )****Net unrealized depreciation on open futures contracts
    
    $
    (44,149
    )*
    
    Net unrealized depreciation on open forward contracts
    
    $
    (8,900
    )**
 
 *
    
    This amount is included in Net unrealized depreciation on open futures contracts on the Statements of Financial Condition.**
    
    This amount is included in Net unrealized depreciation on open forward contracts on the Statements of Financial Condition.***
    
    This amount is included in options owned, at fair value on the Statements of Financial Condition.****
    
    This amount is included in options written, at fair value on the Statements of Financial Condition. 12




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##### Table of Contents



Smith
    Barney Potomac Futures Fund L.P.
    Notes to Financial Statements
    June 30, 2009
    (Unaudited)
  Three Months Ended
    
    
    Six Months EndedJune 30, 2009
    
    
    June 30, 2009Sector
    
    Gain (loss) from trading
    
    
    Gain (loss) from tradingCurrencies
    
    $
    (1,285,041
    )
    
    $
    (829,537
    )Energy
    
    
    246,030
    
    
    
    208,920Indices
    
    
    (2,204,717
    )
    
    
    (2,962,209
    )Interest Rates Non-U.S.
    
    
    (2,910,860
    )
    
    
    (1,747,524
    )Interest Rates U.S.
    
    
    454,909
    
    
    
    592,362Metals
    
    
    (391,540
    )
    
    
    (963,152
    )Total
    
    $
    (6,091,219
    )
    
    $
    (5,701,140
    )
  4.
    Fair
    Value Measurements:  Investments.
 Fair Value Measurements. Fair Value Measurements Effective Date of FASB Statement No.
157
   Quoted Pricesin Active Markets


Significant Other


Significantfor Identical


Observable Inputs


Unobservable6/30/2009


Assets (Level 1)


(Level 2)


Inputs (Level 3)AssetsInvestment in Master

$
64,923,588


$



$
64,923,588


$
Total fair value

$
64,923,588


$



$
64,923,588


$
Quoted Prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable Inputs
    
    
    Unobservable12/31/2008
    
    
    Assets (Level 1)
    
    
    (Level 2)
    
    
    Inputs (Level 3)AssetsInvestment in Master
    
    $
    91,152,448
    
    
    $
    
    
    
    $
    91,152,448
    
    
    $
    Total fair value
    
    $
    91,152,448
    
    
    $
    
    
    
    $
    91,152,448
    
    
    $
      Investments.
 Fair
Value Measurements.
 13




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##### Table of Contents



Smith
    Barney Potomac Futures Fund L.P.
    Notes to Financial Statements
    June 30, 2009
    (Unaudited)
 Effective Date of FASB Statement No. 157
   Quoted Prices inActive Markets


Significant Other


Significantfor Identical


Observable Inputs


Unobservable6/30/2009


Assets (Level 1)


(Level 2)


Inputs (Level 3)AssetsForwards

$
18,557


$



$
18,557


$
Options owned


34,422







34,422



Total assets


52,979







52,979



LiabilitiesFutures

$
44,149


$
44,149


$



$
Forwards


27,457



27,457







Options written


54,374







54,374



Total liabilities


125,980



71,606



54,374



Total fair value

$
(73,001
)

$
(71,606
)

$
(1,395
)

$
Quoted Prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable Inputs
    
    
    Unobservable12/31/2008
    
    
    Assets (Level 1)
    
    
    (Level 2)
    
    

Inputs (Level 3)AssetsFutures
    
    $
    159,230
    
    
    $
    159,230
    
    
    $
    
    
    
    $
    Forwards
    
    
    488,398
    
    
    
    
    
    
    
    488,398
    
    
    
    Options owned
    
    
    20,304
    
    
    
    
    
    
    
    20,304
    
    
    
    Total assets
    
    
    667,932
    
    
    
    159,230
    
    
    
    508,702
    
    
    
    LiabilitiesForwards
    
    $
    90,855
    
    
    $
    90,855
    
    
    $
    
    
    
    $
    Options written
    
    
    82,624
    
    
    
    
    
    
    
    82,624
    
    
    
    Total liabilites
    
    
    173,479
    
    
    
    90,855
    
    
    
    82,624
    
    
    
    Total fair value
    
    $
    494,453
    
    
    $
    68,375
    
    
    $
    426,078
    
    
    $
       5.
    Financial
    Instrument Risks:  14




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##### Table of Contents



Smith
    Barney Potomac Futures Fund L.P.
    Notes to Financial Statements
    June 30, 2009
    (Unaudited)
           15




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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
  Use of Estimates
  Statement of Cash Flows
  Investments
 Fair Value Measurements. No. FAS 157-2, Effective Date of FASB Statement No. 157
    16




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##### Table of Contents



Futures Contracts
  Forward Foreign Currency Contracts
    London Metals Exchange Forward Contracts
 Options.
  Income Taxes
   17




---



##### Table of Contents



Recent Accounting Pronouncements.
  Subsequent Events.
  Results
    of Operations
             18




---



##### Table of Contents



30-day 3-month and/or 90-day
       19




---



##### Table of Contents



Item 3.
    Quantitative
    and Qualitative Disclosures about Market Risk          one-day
 20




---



##### Table of Contents



Form 10-K
  June 30,
    2009
    (Unaudited)
  Three Months Ended June 30, 2009% of Total
    
    
    High
    
    
    Low
    
    
    AverageMarket Sector
    
    Value at Risk
    
    
    Capitalization
    
    
    Value at Risk
    
    
    Value at Risk
    
    
    Value at Risk*Currencies
    
    $
    2,013,076
    
    
    
    2.51
    %
    
    $
    4,303,193
    
    
    $
    1,742,660
    
    
    $
    2,784,978Energy
    
    
    591,618
    
    
    
    0.74
    %
    
    
    930,274
    
    
    
    316,689
    
    
    
    610,620Interest Rates U.S.
    
    
    753,260
    
    
    
    0.94
    %
    
    
    1,097,280
    
    
    
    75,539
    
    
    
    684,291Interest Rates Non-U.S.
    
    
    812,683
    
    
    
    1.02
    %
    
    
    2,212,147
    
    
    
    812,683
    
    
    
    1,544,432Metals
    
    
    396,401
    
    
    
    0.50
    %
    
    
    506,772
    
    
    
    29,024
    
    
    
    295,206Indices
    
    
    1,690,660
    
    
    
    2.11
    %
    
    
    3,249,010
    
    
    
    1,217,508
    
    
    
    2,021,045Total
    
    $
    6,257,698
    
    
    
    7.82
    %
  *
    Average of Month-end Values at Risk
 21




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##### Table of Contents



Item 4T.
    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.   22




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##### Table of Contents



PART II.
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings  Form 10-K
 Enron-Related Civil Actions
 Acquisition
Partners, L.P., et al. v. J.P. Morgan Chase & Co., et al., Avenue Capital Management II, L.P.,
et al. v. J.P. Morgan Chase & Co., et al. UniCredito Italiano, SpA, et al. v. J.P. Morgan Chase Bank, et. al.
 Subprime Mortgage-Related Litigation
 Buckingham v. Citigroup Inc., et al. Chen v. Citigroup Inc., et al. In re Citigroup Inc. Bond Litigation.
 Asher, et al. v. Citigroup Inc., et al. In re Citigroup Inc. Bond Litigation Asher, et al. v. Citigroup Inc., et al. Pellegrini v. Citigroup Inc., et al. In re Citigroup Inc. Bond Litigation
 Epirus Capital Management, LLC, et al. v. Citigroup Inc., et al. In re Citigroup Inc. Securities Litigation
 Auction Rate Securities-Related Litigation
 Securities Actions. American Eagle Outfitters, Inc., et al. v. Citigroup Global
Markets Inc. In re Citigroup Inc. Auction Rate Securities Litigation Finn v. Smith Barney, et al.
 Texas Instruments Inc. v. Citigroup Global Markets Inc. et al.
 Governmental and Regulatory Actions.
 23




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##### Table of Contents



Falcon and ASTA/MAT-Related Litigation
 Marie Raymond Revocable Trust, et al. v. MAT Five LLC, et al.
 In re MAT Five Securities Litigation.
 ECA Acquisitions, Inc., et al. v. MAT Three LLC, et al.
 Zentner v. Citigroup, et al. In re MAT Two Securities
Litigation, In re MAT Three Securities Litigation and In re MAT Five Securities Litigation.) In re MAT Five Securities
Litigation
 Zentner v. Citigroup, et al.
 Other Matters
 Underwriting Actions .
 American Home Mortgage In re American
Home Mortgage Securities Litigation
 American International Group In re American International Group, Inc. 2008 Securities Litigation
 24




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##### Table of Contents



Item 1A.  Risk
    Factors
  Form 10-K
  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds     25




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##### Table of Contents



(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 ProgramsApril 1, 2009 -
    April 30, 2009



1,064.9966



$
1,402.60




N/A




N/AMay 1, 2009 -
    May 31, 2009



1,864.4656



$
1,391.89




N/A




N/AJune 1, 2009 -
    June 30, 2009



1,229.3761



$
1,355.64




N/A




N/A4,158.8383



$
1,383.92   * 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.
    Submission
    of Matters to a Vote of Security Holders 
    None  Item 5.
    Other Information  Morgan Stanley/Citigroup Joint Venture
   26




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##### Table of Contents



Item 6.
    Exhibits  Regulation S-K Form 10-K
    Rule 13a-14(a)/15d-14(a)
   Rule 13a-14(a)/15d-14(a)
        27




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SIGNATURES
    SMITH BARNEY POTOMAC FUTURES FUND L.P.By:

Citigroup Managed Futures LLC(General
    Partner)By:

/s/  Jerry
    PascucciJerry
    Pascucci
    President and DirectorDate: August 14, 2009By:

/s/  Jennifer
    MagroJennifer
    Magro
    Chief Financial Officer and DirectorDate: August 14, 2009  28