<PAGE>
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q

(Mark One)

/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the quarterly period ended June 30, 2000

                                       OR

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

For the transition period from _______________________ to ______________________

Commission file number: 0-18418

              PRUDENTIAL-BACHE CAPITAL RETURN FUTURES FUND 2, L.P.
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

Delaware                                        13-3533120
--------------------------------------------------------------------------------
(State or other jurisdiction of      (I.R.S. Employer Identification No.)
incorporation or organization)

One New York Plaza, 13th Floor New York, New York            10292
--------------------------------------------------------------------------------
(Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code (212) 778-7866

                                      N/A
--------------------------------------------------------------------------------
   Former name, former address and former fiscal year, if changed since last
                                    report.

   Indicate by check CK 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 CK  No __

<PAGE>
                         Part I. FINANCIAL INFORMATION
                          ITEM 1. FINANCIAL STATEMENTS
              PRUDENTIAL-BACHE CAPITAL RETURN FUTURES FUND 2, L.P.
                            (a limited partnership)
                       STATEMENTS OF FINANCIAL CONDITION
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                                        June 30,        December 31,
                                                                          2000              1999
<S>                                                                   <C>               <C>
----------------------------------------------------------------------------------------------------
ASSETS
Cash                                                                   $ 3,365,515      $ 4,573,677
Net unrealized (loss) gain on open futures and options contracts           (61,005)         582,280
U.S. Treasury bills, at amortized cost                                  11,745,727       14,715,473
Net premiums paid on options                                                    --           83,238
                                                                      -------------     ------------
Total assets                                                           $15,050,237      $19,954,668
                                                                      -------------     ------------
                                                                      -------------     ------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Redemptions payable                                                    $ 1,195,853      $   935,402
Net unrealized loss on open forward contracts                               86,275           59,834
Due to affiliates                                                           40,247           40,762
Accrued expenses payable                                                    32,864           60,689
Premiums received on options                                                28,996               --
Management fees payable                                                     26,111           34,924
                                                                      -------------     ------------
Total liabilities                                                        1,410,346        1,131,611
                                                                      -------------     ------------
Commitments
Partners' capital
Limited partners (66,487 and 81,738 units outstanding)                  13,503,405       18,634,742
General partner (672 and 826 units outstanding)                            136,486          188,315
                                                                      -------------     ------------
Total partners' capital                                                 13,639,891       18,823,057
                                                                      -------------     ------------
Total liabilities and partners' capital                                $15,050,237      $19,954,668
                                                                      -------------     ------------
                                                                      -------------     ------------
Net asset value per limited and general partnership unit ('Units')     $    203.10      $    227.98
                                                                      -------------     ------------
                                                                      -------------     ------------
----------------------------------------------------------------------------------------------------
                  The accompanying notes are an integral part of these statements.
</TABLE>
                                       2
<PAGE>
              PRUDENTIAL-BACHE CAPITAL RETURN FUTURES FUND 2, L.P.
                            (a limited partnership)
                            STATEMENTS OF OPERATIONS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                    Six Months                     Three Months
                                                  Ended June 30,                  Ended June 30,
                                            ---------------------------     ---------------------------
                                               2000            1999            2000            1999
<S>                                         <C>             <C>             <C>             <C>
-------------------------------------------------------------------------------------------------------
REVENUES
Net realized gain (loss) on commodity
  transactions                              $  (655,387)    $ 1,042,199     $  (364,991)    $   443,664
Change in net unrealized gain/loss on
  open commodity positions                     (669,726)        225,214        (465,670)        614,853
Interest from U.S. Treasury bills               349,112         381,734         167,639         185,226
                                            -----------     -----------     -----------     -----------
                                               (976,001)      1,649,147        (663,022)      1,243,743
                                            -----------     -----------     -----------     -----------
EXPENSES
Commissions                                     688,877         934,049         316,058         457,442
Management fees                                 178,760         249,837          81,495         122,887
Incentive fees                                       --         125,526              --         101,013
General and administrative                       68,112          81,658          34,729          42,929
                                            -----------     -----------     -----------     -----------
                                                935,749       1,391,070         432,282         724,271
                                            -----------     -----------     -----------     -----------
Net income (loss)                           $(1,911,750)    $   258,077     $(1,095,304)    $   519,472
                                            -----------     -----------     -----------     -----------
                                            -----------     -----------     -----------     -----------
ALLOCATION OF NET INCOME (LOSS)
Limited partners                            $(1,892,623)    $   255,496     $(1,084,345)    $   514,277
                                            -----------     -----------     -----------     -----------
                                            -----------     -----------     -----------     -----------
General partner                             $   (19,127)    $     2,581     $   (10,959)    $     5,195
                                            -----------     -----------     -----------     -----------
                                            -----------     -----------     -----------     -----------
NET INCOME (LOSS) PER WEIGHTED AVERAGE
LIMITED AND GENERAL PARTNERSHIP UNIT
Net income (loss) per weighted average
  limited and general partnership unit      $    (24.57)    $      2.64     $    (14.99)    $      5.46
                                            -----------     -----------     -----------     -----------
                                            -----------     -----------     -----------     -----------
Weighted average number of limited
  and general partnership units
  outstanding                                    77,806          97,587          73,047          95,184
                                            -----------     -----------     -----------     -----------
                                            -----------     -----------     -----------     -----------
-------------------------------------------------------------------------------------------------------
</TABLE>

                   STATEMENT OF CHANGES IN PARTNERS' CAPITAL
                                  (Unaudited)
<TABLE>
<CAPTION>
                                                              LIMITED        GENERAL
                                                UNITS        PARTNERS        PARTNER         TOTAL
<S>                                            <C>          <C>             <C>           <C>
-----------------------------------------------------------------------------------------------------
Partners' capital--December 31, 1999             82,564     $18,634,742     $ 188,315     $18,823,057
Net loss                                             --      (1,892,623)      (19,127)     (1,911,750)
Redemptions                                     (15,405)     (3,238,714)      (32,702)     (3,271,416)
                                               --------     -----------     ---------     -----------
Partners' capital--June 30, 2000                 67,159     $13,503,405     $ 136,486     $13,639,891
                                               --------     -----------     ---------     -----------
                                               --------     -----------     ---------     -----------
-----------------------------------------------------------------------------------------------------
                  The accompanying notes are an integral part of these statements.
</TABLE>
                                       3
<PAGE>
              PRUDENTIAL-BACHE CAPITAL RETURN FUTURES FUND 2, L.P.
                            (a limited partnership)
                         NOTES TO FINANCIAL STATEMENTS
                                 JUNE 30, 2000
                                  (Unaudited)

A. General

   These financial statements have been prepared without audit. In the opinion
of Prudential Securities Futures Management Inc. (the 'General Partner'), the
financial statements contain all adjustments (consisting of only normal
recurring adjustments) necessary to present fairly the financial position of
Prudential-Bache Capital Return Futures Fund 2, L.P. (the 'Partnership') as of
June 30, 2000 and the results of its operations for the six and three months
ended June 30, 2000 and 1999. However, the operating results for the interim
periods may not be indicative of the results expected for a full year.

   Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted accounting
principles have been omitted. It is suggested that these financial statements be
read in conjunction with the financial statements and notes thereto included in
the Partnership's annual report on Form 10-K filed with the Securities and
Exchange Commission for the year ended December 31, 1999.

B. Related Parties

   The General Partner is a wholly owned subsidiary of Prudential Securities
Incorporated ('PSI'). The General Partner and its affiliates perform services
for the Partnership which include, but are not limited to: brokerage services;
accounting and financial management; registrar, transfer and assignment
functions; investor communications, printing and other administrative services.

   The costs incurred for these services for the six and three months ended June
30, 2000 and 1999 were:

<TABLE>
<CAPTION>
                                                                           For the three months
                                         For the six months ended                  ended
                                                 June 30,                        June 30,
                                        ---------------------------      -------------------------
                                          2000              1999           2000             1999
<S>                                     <C>              <C>             <C>              <C>
                                        ----------------------------------------------------------
Commissions                             $688,877         $  934,049      $316,058         $457,442
General and administrative                35,054             35,785        17,735           17,830
                                        --------         ----------      --------         --------
                                        $723,931         $  969,834      $333,793         $475,272
                                        --------         ----------      --------         --------
                                        --------         ----------      --------         --------
</TABLE>

   The Partnership's assets are maintained either in trading or cash accounts
with PSI, the Partnership's commodity broker, or for margin purposes, with the
various exchanges on which the Partnership is permitted to trade.

   The Partnership, acting through its trading managers, executes
over-the-counter, spot, forward and/or option foreign exchange transactions with
PSI. PSI then engages in back-to-back trading with an affiliate,
Prudential-Bache Global Markets Inc. ('PBGM'). PBGM attempts to earn a profit on
such transactions. PBGM keeps its prices on foreign currency competitive with
other interbank currency trading desks. All over-the-counter currency
transactions are conducted between PSI and the Partnership pursuant to a line of
credit. PSI may require that collateral be posted against the marked-to-market
positions of the Partnership.

C. Derivative Instruments and Associated Risks

   The Partnership is exposed to various types of risk associated with the
derivative instruments and related markets in which it invests. These risks
include, but are not limited to, risk of loss from fluctuations in the value of
derivative instruments held (market risk) and the inability of counterparties to
perform under the terms of the Partnership's investment activities (credit
risk).

Market risk

   Trading in futures and forward (including foreign exchange transactions)
contracts involves entering into contractual commitments to purchase or sell a
particular commodity at a specified date and price. The gross or face amount of
the contracts, which is typically many times that of the Partnership's net
assets

                                       4

<PAGE>
being traded, significantly exceeds the Partnership's future cash requirements
since the Partnership intends to close out its open positions prior to
settlement. As a result, the Partnership is generally subject only to the risk
of loss arising from the change in the value of the contracts. As such, the
Partnership considers the 'fair value' of its futures and forward contracts to
be the net unrealized gain or loss on the contracts. The market risk associated
with the Partnership's commitments to purchase commodities is limited to the
gross or face amount of the contracts held. However, when the Partnership enters
into a contractual commitment to sell commodities, it must make delivery of the
underlying commodity at the contract price and then repurchase the contract at
prevailing market prices. Since the repurchase price to which a commodity can
rise is unlimited, entering into commitments to sell commodities exposes the
Partnership to unlimited risk.

   Trading in options involves the payment or receipt of a premium and the
corresponding right or obligation, as the case may be, to either purchase or
sell the underlying commodity for a specified price during a limited period of
time. Purchasing options involves the risk that the underlying commodity does
not change price as expected, so that the option expires worthless and the
premium is lost. On the other hand, selling options involves unlimited risk
because the Partnership is exposed to the potentially unlimited price movement
in the underlying commodity.

   Market risk is influenced by a wide variety of factors including government
programs and policies, political and economic events, the level and volatility
of interest rates, foreign currency exchange rates, the diversification effects
among the derivative instruments the Partnership holds and the liquidity and
inherent volatility of the markets in which the Partnership trades.

Credit risk

   When entering into futures, forward and options contracts, the Partnership is
exposed to credit risk that the counterparty to the contract will not meet its
obligations. The counterparty for futures and options contracts traded in the
United States and on most foreign futures and options exchanges is the
clearinghouse associated with such exchanges. In general, clearinghouses are
backed by the corporate members of the clearinghouse who are required to share
any financial burden resulting from the nonperformance by one of its members
and, as such, should significantly reduce this credit risk. In cases where the
clearinghouse is not backed by the clearing members (i.e., some foreign
exchanges), it is normally backed by a consortium of banks or other financial
institutions. On the other hand, the sole counterparty to the Partnership's
forward transactions is PSI, the Partnership's commodity broker. The Partnership
has entered into a master netting agreement with PSI and, as a result, presents
unrealized gains and losses on open forward positions as a net amount in the
statements of financial condition. The amount at risk associated with
counterparty nonperformance of all of the Partnership's contracts is the net
unrealized gain (plus premiums paid on options) included in the statements of
financial condition. There can be no assurance that any counterparty, clearing
member or clearinghouse will meet its obligations to the Partnership.

   The General Partner attempts to minimize both credit and market risks by
requiring the Partnership and its trading managers to abide by various trading
limitations and policies. The General Partner monitors compliance with these
trading limitations and policies which include, but are not limited to:
executing and clearing all trades with creditworthy counterparties (currently,
PSI is the sole counterparty or broker), limiting the amount of margin or
premium required for any one commodity or all commodities combined and generally
limiting transactions to contracts which are traded in sufficient volume to
permit the taking and liquidating of positions. Additionally, pursuant to each
Advisory Agreement among the Partnership, the General Partner and each trading
manager, the General Partner shall automatically terminate a trading manager if
the net asset value allocated to the trading manager declines by 33 1/3% since
the commencement of its trading activities or from the value at the beginning of
any year (except for Welton Investment Corporation for which automatic
termination relates only to a decline from the commencement of trading
activities). Furthermore, the Amended and Restated Agreement of Limited
Partnership provides that the Partnership will liquidate its positions, and
eventually dissolve, if the Partnership experiences a decline in the net asset
value to less than 50% of the value at commencement of trading activities. In
each case, the decline in net asset value is after giving effect for
distributions and redemptions. The General Partner may impose additional
restrictions (through modifications of such trading limitations and policies)
upon the trading activities of the trading managers as it, in good faith, deems
to be in the best interests of the Partnership.

   PSI, when acting as the Partnership's futures commission merchant in
accepting orders for the purchase or sale of domestic futures and options
contracts, is required by Commodity Futures Trading Commission

                                       5

<PAGE>
('CFTC') regulations to separately account for and segregate as belonging to the
Partnership all assets of the Partnership relating to domestic futures and
options trading and is not to commingle such assets with other assets of PSI. At
June 30, 2000, such segregated assets totalled $12,921,841. Part 30.7 of the
CFTC regulations also requires PSI to secure assets of the Partnership related
to foreign futures and options trading which totalled $2,099,400 at June 30,
2000. There are no segregation requirements for assets related to forward
trading.

   As of June 30, 2000, the Partnership's open futures, forward and options
contracts mature within one year.

   At June 30, 2000 and December 31, 1999, the fair value of open futures,
forward and options contracts was:

<TABLE>
<CAPTION>
                                                  2000                           1999
                                       --------------------------     --------------------------
                                         Assets       Liabilities       Assets       Liabilities
                                       ----------     -----------     ----------     -----------
<S>                                    <C>            <C>             <C>            <C>
Futures Contracts:
  Domestic exchanges
     Interest rates                    $   34,612      $    7,263     $   78,005     $        --
     Stock indices                            640          11,544         75,245           5,420
     Currencies                            12,922          58,821         76,089          30,830
     Commodities                           79,917           2,030         52,327          24,170
  Foreign exchanges
     Interest rates                        13,873          33,172        116,588           1,038
     Stock indices                         29,150          18,934         81,199           1,899
     Commodities                            9,863         123,330        168,686          26,889
Forward Contracts:
     Currencies                            36,804         123,079         14,912          74,746
Options Contracts:
  Domestic exchanges
     Interest rates                            --           2,394             --              --
     Stock indices                             --           4,925         95,700              --
     Currencies                                --           5,088             --              --
     Commodities                               --           3,477         13,050           1,125
                                       ----------     -----------     ----------     -----------
                                       $  217,781      $  394,057     $  771,801     $   166,117
                                       ----------     -----------     ----------     -----------
                                       ----------     -----------     ----------     -----------
</TABLE>
                                       6
<PAGE>
              PRUDENTIAL-BACHE CAPITAL RETURN FUTURES FUND 2, L.P.
                            (a limited partnership)
           ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

   The Partnership commenced trading operations on October 6, 1989 with gross
proceeds of $101,010,000. After accounting for organizational and offering
costs, the Partnership's net proceeds were $99,010,000.

   At June 30, 2000, 100% of the Partnership's total net assets was allocated to
commodities trading. A significant portion of the net asset value was held in
U.S. Treasury bills (which represented approximately 79% of the net asset value
prior to redemptions payable) and cash, which are used as margin for the
Partnership's trading in commodities. Inasmuch as the sole business of the
Partnership is to trade in commodities, the Partnership continues to own such
liquid assets to be used as margin.

   The percentage that U.S. Treasury bills bears to the total net assets varies
each day, and from month to month, as the market values of commodity interests
change. The balance of the net assets is held in cash. All interest earned on
the Partnership's interest-bearing funds is paid to the Partnership.p]The
commodities contracts are subject to periods of illiquidity because of market
conditions, regulatory considerations and other reasons. For example, commodity
exchanges limit fluctuations in certain commodity futures contract prices during
a single day by regulations referred to as 'daily limits.' During a single day,
no trades may be executed at prices beyond the daily limit. Once the price of a
futures contract for a particular commodity has increased or decreased by an
amount equal to the daily limit, positions in the commodity can neither be taken
nor liquidated unless traders are willing to effect trades at or within the
limit. Commodity futures prices have occasionally moved the daily limit for
several consecutive days with little or no trading. Such market conditions could
prevent the Partnership from promptly liquidating its commodity futures
positions.

   Since the Partnership's business is to trade futures, forward and options
contracts, its capital is at risk due to changes in the value of these contracts
(market risk) or the inability of counterparties to perform under the terms of
the contracts (credit risk). The Partnership's exposure to market risk is
influenced by a number of factors including the volatility of interest rates and
foreign currency exchange rates, the liquidity of the markets in which the
contracts are traded and the relationships among the contracts held. The
inherent uncertainty of the Partnership's speculative trading as well as the
development of drastic market occurrences could result in monthly losses
considerably beyond the Partnership's experience to date and could ultimately
lead to a loss of all or substantially all of investors' capital. The general
partner attempts to minimize these risks by requiring the Partnership and its
trading managers to abide by various trading limitations and policies, which
include limiting margin amounts, trading only in liquid markets and utilizing
stop loss provisions. See Note C to the financial statements for a further
discussion on the credit and market risks associated with the Partnership's
futures, forward and options contracts.

   Redemptions recorded for the six and three months ended June 30, 2000 were
and $3,238,714 and $1,183,870, respectively, for the limited partners and
$32,702 and $11,983, respectively, for the general partner, and from
commencement of operations, October 6, 1989, through June 30, 2000, totalled
$130,250,510 for the limited partners and $1,861,650 for the general partner.
Future redemptions will impact the amount of funds available for investment in
commodity contracts in subsequent periods.

   The Partnership does not have, nor does it expect to have, any capital
assets.

Results of Operations

   The net asset value per Unit as of June 30, 2000 was $203.10, a decrease of
10.91% from the December 31, 1999 net asset value per Unit of $227.98 and a
decrease of 6.87% from the March 31, 2000 net asset value per Unit of $218.09.

   The Partnership had gross trading gains/(losses) of approximately
$(1,325,000) and $(831,000) during the six and three months ended June 30, 2000,
respectively, compared to $1,267,000 and $1,059,000 for the corresponding
periods in the prior year. Due to the nature of the Partnership's trading
activities, a period to period comparison of its trading results is not
meaningful. However, a detailed discussion of the Partnership's current quarter
trading results is presented below.

                                       7

<PAGE>
Quarterly Market Overview

   U.S. economic growth remained rapid throughout April and May, evidenced by
economic indicators across the board. Consumer spending trended upward strongly
and housing demand was high. Industrial production and wages expanded briskly in
response to burgeoning domestic demand. Labor markets continued to be very tight
as employment surged. Signs of an economic slowdown appeared towards the end of
the quarter as markets reacted to higher than expected unemployment numbers at
the end of May. However, economic expansion remained robust in most world
markets throughout the quarter. The Japanese economy showed indications of
increased demand in the first five months of 2000. Economic activity in
developing countries also continued. Key South American economies recovered from
recent recessions, while several Asian emerging market countries settled into
growth at a more sustained rate.

   During the quarter, financial markets were dominated by continued volatility
in the equity sector. U.S. equity markets, especially more speculative
technology stocks, experienced a sell-off in April as investors' confidence
declined. Stock indices rallied toward the end of June, but the S&P, Dow, and
NASDAQ all ended the first half of the year down.

   Global bond markets mirrored the volatility of the equity markets. Early in
the quarter, both U.S. and European prices on interest rate instruments fell due
to a rate hike by the European Central Bank at the end of April and a strong
U.S. economy. Global bond prices plummeted again in May in anticipation of a
U.S. interest rate hike. The U.S. Federal Reserve raised rates by 50 basis
points to 6.5%. This forceful policy (more than the 25 basis point increases
implemented since mid 1999) was due to the persistent strength of overall demand
and growing pressure in a tight labor market. As the quarter continued and new
economic data was released, it became apparent that the U.S. economy was
decelerating and bond prices rallied slightly.

   The value of the U.S. dollar appreciated considerably against most major
currencies at the beginning of the quarter, reflecting, in part, the larger
increases in U.S. long-term yields relative to rates in most foreign countries.
The dollar's rise against the euro was sizable, but it also made moderate gains
against the British pound, Japanese yen, and Canadian dollar. In June, as the
U.S. economy showed signs of slowing down, the U.S. dollar weakened against most
major currencies. The euro reached all time lows in May before rallying in June
as a result of solid European economic data and sentiment that the currency was
undervalued. In May, the Japanese yen rose against the U.S. dollar supported by
expectations of a possible change in the Bank of Japan's zero-interest rate
policy. As the Japanese economy failed to sustain its recovery momentum, the yen
lost some ground. The Canadian dollar rallied towards the end of the quarter due
to steady Canadian economic data combined with signs of softening in the U.S.
economy.

   Increased demand caused oil prices to surge at the beginning of the quarter.
In June, OPEC countries agreed to increase oil production as higher gas prices
put inflationary pressure on global economies and oil prices reversed downward.
In the metals markets, the trend of falling prices in April and May reversed
itself later in the quarter as gold soared driven, in part, by weakening in the
U.S. dollar and U.S. economy.

Quarterly Partnership Performance

   The following is a summary of performance for the major sectors in which the
Partnership traded:

   Currency (-): Shifting expectations about the timing of tightening monetary
policy by the Bank of Japan reversed the direction of the yen downward,
resulting in losses for long yen positions. The Swiss franc fell to new
eleven-year lows against the U.S. dollar, resulting in losses in Swiss
franc/U.S. dollar cross-rates. The Swiss franc continues to be plagued by the
euro's poor price action as the market remains disappointed over the lack of
central bank support for the euro.

   Financial (-): Short 30-year U.S. bond positions lost value as bond prices
rallied following a higher than expected unemployment number in May and lack of
action by the U.S. Federal Reserve at its meeting in June. Losses in long
10-year euro bond positions were due, in part, to actions taken by the European
Central Bank to raise short-term rates in April and June.

   Metal (-): Short copper and gold positions incurred losses as metal prices
rose due to a weakening U.S. economy.

                                       8

<PAGE>
   Index (-): The second quarter brought a reversal to some trends in the global
equity markets. A strong U.S. economy started showing signs of slowdown and U.S.
equity markets experienced an April sell-off. Overall, continued volatility in
world markets resulted in losses in FTSE, S&P, and Nikkei Dow positions.

   Energy (+): Long heating and crude oil positions resulted in gains for the
Partnership as increased demand drove oil prices upward.

   Interest income is earned on the Partnership's investments in U.S. Treasury
bills and varies monthly according to interest rates as well as the effect of
trading performance and redemptions on the level of interest-bearing funds.
Interest income from U.S. Treasury bills decreased by approximately $33,000 and
$18,000, respectively, for the six and three months ended June 30, 2000 compared
to the same periods in 1999. These declines in interest income were the result
of fewer funds being invested in U.S. Treasury bills principally due to weak
trading performance since October 1999 and redemptions. These declines were
partially offset by the impact of higher interest rates during the six and three
months ended June 30, 2000 versus the corresponding periods in 1999.

   Commissions paid to PSI are calculated on the Partnership's net asset value
on the first day of each month and, therefore, vary monthly according to trading
performance and redemptions. Commissions decreased by approximately $245,000 and
$141,000 for the six and three months ended June 30, 2000 as compared to the
same periods in 1999 principally due to the effect of weak trading performance
since October 1999 and redemptions on the monthly net asset values.

   All trading decisions are currently being made by Welton Investment
Corporation, Eclipse Capital Management, Inc. ('Eclipse'), Trendlogic
Associates, Inc. and Gaiacorp Ireland Limited. Management fees are calculated on
the Partnership's net asset value allocated to each trading manager as of the
end of each month and, therefore, are affected by trading performance and
redemptions. Management fees decreased by approximately $71,000 and $41,000 for
the six and three months ended June 30, 2000 as compared to the same periods in
1999 due to fluctuations in monthly net asset values as described in the
discussion on commissions above.

   Incentive fees are based on the New High Net Trading Profits generated by
each trading manager, as defined in each Advisory Agreement among the
Partnership, the General Partner and each trading manager. Eclipse generated
sufficient trading profits to earn incentive fees of approximately $126,000 and
$101,000 during the six and three months ended June 30, 1999. No incentive fees
were incurred by the Partnership during the six and three months ended June 30,
2000.

   General and administrative expenses decreased by approximately $14,000 and
$8,000 for the six and three months ended June 30, 2000 as compared to the same
periods in 1999. These expenses include reimbursements of costs incurred by the
General Partner on behalf of the Partnership, in addition to accounting, audit,
tax and legal fees as well as printing and postage costs related to reports sent
to limited partners.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   Information regarding quantitative and qualitative disclosures about market
risk is not required pursuant to Item 305(e) of Regulation S-K.

                                       9

<PAGE>
                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings--There are no material legal proceedings pending by or
        against the Registrant or the General Partner.

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-- Effective July 2000, Joseph A. Filicetti resigned as
                           President and as a Director of Prudential Securities
                           Futures Management Inc.

Item 6. Exhibits and Reports on Form 8-K:

       (a) Exhibits

             4.1  Agreement of Limited Partnership of the Registrant, dated as
                  of June 8, 1989 as amended and restated as of July 21, 1989
                  (incorporated by reference to Exhibits 3.1 and 4.1 to the
                  Registrant's Annual Report on Form 10-K for the period ended
                  December 31, 1989)

             4.2  Subscription Agreement (incorporated by reference to
                  Exhibit 4.2 to the Registrant's Registration Statement
                  on Form S-1, File No. 33-29039)

             4.3  Request for Redemption (incorporated by
                  reference to Exhibit 4.3 to the Registrant's
                  Registration Statement on Form S-1, File No.
                  33-29039)

            27    Financial Data Schedule (filed herewith)

       (b) Reports on Form 8-K--

           No reports on Form 8-K were filed during the quarter.

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<PAGE>
                                   SIGNATURES

   Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Prudential-Bache Capital Return Futures Fund 2, L.P.

By: Prudential Securities Futures Management Inc.
A Delaware corporation, General Partner

     By: /s/ Steven Carlino                       Date: August 14, 2000
     ----------------------------------------
     Steven Carlino
     Vice President and Treasurer

                                       11