FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

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

                     OF THE SECURITIES EXCHANGE ACT OF 1934

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

                     OF THE SECURITIES EXCHANGE ACT OF 1934



For the Quarter ended June 30, 2004

Commission File Number 0-26132

                   SMITH BARNEY DIVERSIFIED FUTURES FUND L.P.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

     New York                                             13-3729162
--------------------------------------------------------------------------------
(State or other jurisdiction of                       (I.R.S. Employer
  incorporation or organization)                       Identification No.)

                        c/o Citigroup Managed Futures LLC
                            399 Park Avenue - 7th Fl.
                            New York, New York 10022
--------------------------------------------------------------------------------
              (Address and Zip Code of principal executive offices)

                                 (212) 599-2011
--------------------------------------------------------------------------------
             (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                              Yes X   No____


Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in rule 12b-2 of the Exchange Act).

                              Yes___  No   X



<PAGE>


                   SMITH BARNEY DIVERSIFIED FUTURES FUND L.P.
                                    FORM 10-Q
                                      INDEX

                                                                     Page
                                                                    Number
PART I - Financial Information:

     Item 1. Financial Statements:

              Statements of Financial Condition
              at June 30, 2004 and December 31,
              2003 (unaudited).                                        3

              Condensed Schedules of Investments at
              June 30, 2004 and December 31, 2003
              (unaudited).                                           4 - 5

              Statements of Income and Expenses
              and Partners' Capital for the three and six
              months ended June 30, 2004
              and 2003 (unaudited).                                    6

              Statements of Cash Flows for the three and six
              months ended June 30, 2004 and 2003
              (unaudited).                                             7

              Notes to Financial Statements
              (unaudited)                                            8 - 12

     Item 2.  Management's Discussion and
              Analysis of Financial Condition
              and Results of Operations                             13 - 15

     Item 3.  Quantitative and Qualitative
              Disclosures about Market Risk                         16 - 17

     Item 4.  Controls and Procedures                                  18

PART II - Other Information                                            19


                                       2
<PAGE>



                                     PART I

                          Item 1. Financial Statements

                   Smith Barney Diversified Futures Fund L.P.
                        Statements of Financial Condition
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                        June 30,    December 31,
                                                                          2004         2003
                                                                       ------------------------
<S>                                                                        <C>          <C>
ASSETS:

Equity in commodity futures trading account:
Cash (restricted $7,095,145 and $13,379,393 in 2004 and 2003,
  respectively)                                                        $68,452,561   $67,983,573
Net unrealized appreciation on open futures positions                           --     3,677,203
Unrealized appreciation on open forward contracts                          497,718     4,260,481
                                                                       -----------   -----------
                                                                        68,950,279    75,921,257
Interest receivable                                                         46,587        40,233
                                                                       -----------   -----------
                                                                       $68,996,866   $75,961,490
                                                                       ===========   ===========

LIABILITIES AND PARTNERS' CAPITAL:

Liabilities:
 Net unrealized depreciation on open futures positions                 $   509,608   $        --
 Unrealized depreciation on open forward contracts                       1,076,858     2,298,360
 Accrued expenses:
  Commissions                                                              303,899       344,098
  Management fees                                                          104,335       119,768
  Incentive fees                                                              --         761,281
  Other                                                                     64,119        41,458
 Redemptions payable                                                       900,288       669,179
                                                                       -----------   -----------
                                                                         2,959,107     4,234,144
                                                                       -----------   -----------

Partners' Capital:
General Partner, 1,276.7484 Unit equivalents outstanding
  in 2004 and 2003                                                       2,019,024     2,089,578
Limited Partners, 40,482.7241 and 42,549.0942 Redeemable Units of
  Limited Partnership Interest outstanding in 2004 and 2003,
  respectively                                                          64,018,735    69,637,768
                                                                       -----------   -----------
                                                                        66,037,759    71,727,346
                                                                       -----------   -----------
                                                                       $68,996,866   $75,961,490
                                                                       ===========   ===========
</TABLE>

See Accompanying Notes to Unaudited Financial Statements.



                                       3
<PAGE>
                   Smith Barney Diversified Futures Fund L.P.
                        Condensed Schedule of Investments
                                  June 30, 2004
                                   (Unaudited)
<TABLE>
<CAPTION>
Sector                                       Contract                                               Fair Value
--------                                     ----------                                             ------------
<S>                                          <C>                                                      <C>
Currencies
                                            Futures contract(0.16)%                                $  (102,184)
                                            Futures contracts sold (0.16)%                            (108,883)
                                                                                                    -----------
                                             Total futures contracts (0.32)%                          (211,067)

                                            Unrealized appreciation on forward contracts 0.39%         254,344
                                            Unrealized depreciation on forward contracts (0.89)%      (585,783)
                                                                                                    -----------
                                             Total forward contracts (0.50)%                          (331,439)
                                                                                                    -----------
  Total Currencies (0.82)%                                                                            (542,506)
                                                                                                    -----------
Energy
                                            Futures contracts purchased 0.23%                          150,708
                                            Futures contracts sold (0.00)%*                               (100)
                                                                                                    -----------
 Total Energy 0.23%                                                                                    150,608
                                                                                                    -----------
Grains
                                            Futures contracts purchased (0.13)%                        (86,261)
                                            Futures contracts sold 0.12%                                79,160
                                                                                                    -----------
 Total Grains (0.01)%                                                                                   (7,101)
                                                                                                    -----------
Interest Rates U.S.
                                            Futures contracts purchased 0.04%                           26,375
                                            Futures contracts sold (0.59)%                            (390,310)
                                                                                                     -----------
 Total Interest Rates U.S. (0.55)%                                                                    (363,935)
                                                                                                     -----------
Interest Rates Non-U.S
                                            Futures contracts purchased (0.01)%                         (3,158)
                                            Futures contracts sold (0.42)%                            (277,863)
                                                                                                     -----------
 Total Interest Rates Non-U.S. (0.43)%                                                                (281,021)
                                                                                                     -----------
Total Livestock (0.06)%                     Futures contract (0.06)%                                   (37,927)
                                                                                                     -----------
Metals
                                            Futures contracts purchased 0.00%*                             400
                                            Futures contracts sold (0.04)%                             (24,445)
                                                                                                     -----------
                                             Total futures contracts (0.04)%                           (24,045)

                                            Unrealized appreciation on forward contracts 0.36%         243,374
                                            Unrealized depreciation on forward contracts (0.74)%      (491,075)
                                                                                                    -----------
                                             Total forward contracts (0.38)%                          (247,701)
                                                                                                     -----------
 Total Metals (0.42)%                                                                                 (271,746)
                                                                                                    -----------
Softs
                                            Futures contracts purchased (0.09)%                        (61,321)
                                            Futures contracts sold 0.22%                               144,859
                                                                                                     ----------
 Total Softs 0.13%                                                                                      83,538
                                                                                                    -----------
Indices
                                            Futures contract 0.29%                                     189,789
                                            Futures contracts sold (0.01)%                              (8,447)
                                                                                                    -----------
 Total Indices 0.28%                                                                                   181,342
                                                                                                    -----------
Total Fair Value (1.65)%                                                                           $(1,088,748)
                                                                                                    ===========
                 Country                                   Investments at         % of Investments at
                 Composition                                 Fair Value                Fair Value
                 -------------------                        -------------            ---------------
                 Australia                                   $    12,828                 1.18%
                 Canada                                           (2,757)               (0.25)
                 Germany                                         (57,773)               (5.31)
                 France                                          (17,832)               (1.64)
                 Hong Kong                                          (974)               (0.09)
                 Italy                                             6,096                 0.56
                 Japan                                            24,367                 2.24
                 Spain                                            (5,421)               (0.50)
                 United Kingdom                                 (366,264)              (33.64)
                 United States                                  (681,018)              (62.55)
                                                           --------------              -------
                                                           $  (1,088,748)             (100.00)%
                                                           ==============              =======
</TABLE>
Percentages are based on Partners' capital unless otherwise indicated.
* Due to rounding
See Accompanying Notes to Unaudited Financial Statements.
                                       4
<PAGE>
                 Smith Barney Diversified Futures Fund L.P.
                        Condensed Schedule of Investments
                                December 31, 2003
                                   (Unaudited)
<TABLE>
<CAPTION>
Sector                                              Contract                                                      Fair Value
------------------------------------------------    --------------------------------------------------     -----------------------
<S>                                                 <C>                                                               <C>
Currencies                                          Futures contracts purchased 2.31%                             $1,653,934
                                                    Futures contracts sold (0.14)%                                  (100,293)
                                                                                                                  ----------
                                                     Total futures contracts 2.17%                                 1,553,641

                                                    Unrealized appreciation on forward contracts 2.65%             1,897,711
                                                    Unrealized depreciation on forward contracts (1.56)%          (1,116,272)
                                                                                                                  ----------
                                                     Total forward contracts 1.09%                                   781,439
                                                                                                                  ----------
     Total Currencies 3.26%                                                                                        2,335,080
                                                                                                                  ----------
Total Energy (0.11)%                                Futures contracts purchased (0.11)%                              (76,535)
                                                                                                                  ----------

Grains                                              Futures contracts purchased 0.95%                                680,144
                                                    Futures contracts sold (0.09)%                                   (66,550)
                                                                                                                  ----------
     Total Grains 0.86%                                                                                              613,594
                                                                                                                  ----------

Total Interest Rates U.S. (0.17)%                   Futures contracts purchased (0.17)%                             (119,927)
                                                                                                                  ----------

Interest Rates Non-U.S.                             Futures contracts purchased 0.22%                                159,634
                                                    Futures contracts sold (0.04)%                                   (28,643)
                                                                                                                  ----------
     Total Interest Rates Non-U.S. 0.18%                                                                             130,991
                                                                                                                  ----------

Livestock                                           Futures contracts purchased (0.02)%                              (13,500)
                                                    Futures contracts sold 0.01%                                       9,408
                                                                                                                  ----------
     Total Livestock (0.01)%                                                                                          (4,092)
                                                                                                                  ----------

Total Lumber 0.01%                                  Futures contracts purchased 0.01%                                  6,402
                                                                                                                  ----------

Metals                                              Futures contracts purchased 0.58%                                413,768
                                                    Futures contracts sold (0.00)% *                                  (1,550)
                                                                                                                  ----------
                                                     Total futures contracts 0.58%                                   412,218

                                                    Unrealized appreciation on forward contracts 3.29%             2,362,770
                                                    Unrealized depreciation on forward contracts (1.65)%          (1,182,088)
                                                                                                                  ----------
                                                     Total forward contracts 1.64%                                 1,180,682
                                                                                                                  ----------
     Total Metals 2.22%                                                                                            1,592,900
                                                                                                                  ----------
Softs                                               Futures contracts purchased (0.14)%                              (99,050)
                                                    Futures contracts sold 0.03%                                      22,953
                                                                                                                  ----------
     Total Softs (0.11)%                                                                                             (76,097)
                                                                                                                  ----------

Indices                                             Futures contracts purchased 1.67%                              1,195,478
                                                    Futures contracts sold 0.06%                                      41,530
                                                                                                                  ----------
     Total Indices 1.73%                                                                                           1,237,008
                                                                                                                  ----------

Total Fair Value 7.86%                                                                                            $5,639,324
                                                                                                                   =========
                                                           Investments      % of Investments
                  Country Composition                     at Fair Value      at Fair Value
                 -----------------------------            -------------      ---------------
                 Australia                                   $  57,663               1.02%
                 Canada                                         35,485               0.63
                 France                                         33,586               0.60
                 Germany                                       312,479               5.54
                 Hong Kong                                       3,903               0.07
                 Italy                                         (10,477)             (0.19)
                 Japan                                          27,224               0.48
                 Spain                                         113,433               2.01
                 United Kingdom                              1,411,139              25.02
                 United States                               3,654,889              64.82
                                                          ------------             -------
                                                            $5,639,324             100.00%
                                                          =============            =======
</TABLE>
Percentages are based on Partners' capital unless otherwise indicated
* Due to rounding
See Accompanying Notes to Unaudited Financial Statements.
                                       5
<PAGE>


                   Smith Barney Diversified Futures Fund L.P.
             Statements of Income and Expenses and Partners' Captial
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                    Three Months Ended              Six Months Ended
                                                        June 30,                        June 30,
                                             ---------------------------      -----------------------------
                                                   2004            2003           2004            2003
                                             ---------------------------      ------------------------------
<S>                                                <C>             <C>              <C>          <C>
Income:
 Net gains (losses) on trading of
  commodity interests:
 Realized gains (losses) on
  closed positions                           $ (3,160,991)   $  4,897,300    $  9,027,671    $ 19,146,319
 Change in unrealized losses on
  open positions                               (6,803,613)     (1,452,020)     (6,728,072)     (7,066,456)
                                             ------------    ------------     -----------     -----------
                                               (9,964,604)      3,445,280       2,299,599      12,079,863
 Interest income                                  133,034         161,006         266,322         331,868
                                             ------------    ------------     ------------   ------------
                                               (9,831,570)      3,606,286       2,565,921      12,411,731
                                             ------------    ------------     ------------   ------------
Expenses:

 Brokerage commissions including
  clearing fees  of $28,999, $37,549,
  $60,800 and $78,881, respectively             1,016,094       1,127,920       2,159,132       2,262,680
 Management fees                                  329,924         364,543         704,906         763,770
 Incentive fees                                      --           491,755       1,880,089       1,497,113
 Other expenses                                    21,781          22,248          44,237          44,954
                                              -----------     -----------    ------------    ------------
                                                1,367,799       2,006,466       4,788,364       4,568,517
                                              -----------    ------------    ------------    ------------

 Net income (loss)                            (11,199,369)      1,599,820      (2,222,443)      7,843,214

 Additions                                            194           2,332           1,995           4,518
 Redemptions                                   (1,765,681)     (1,723,194)     (3,469,139)     (3,088,936)
                                               ----------    ------------    ------------    ------------
 Net increase (decrease) in
Partners' capital                             (12,964,856)       (121,042)     (5,689,587)      4,758,796

Partners' capital, beginning of
period                                         79,002,615      72,941,785      71,727,346      68,061,947
                                              -----------    ------------    ------------    ------------

Partners' capital, end of period             $ 66,037,759    $ 72,820,743    $ 66,037,759    $ 72,820,743
                                              ===========    ============    ============    ============

Net asset value per Redeemable
  Unit (41,759.4725 and 46,051.1771
  Redeemable Units outstanding at June 30,
  2004 and  2003, respectively)              $   1,581.38    $   1,581.30    $   1,581.38    $   1,581.30
                                             ============    ============    ============    ============

Net income (loss) per Redeemable
  Unit of Limited Partnership Interest
  and General Partner Unit equivalent        $    (262.34)   $      33.34    $     (55.26)   $     162.87
                                             ============    ============     ============   ============

</TABLE>

See Accompanying Notes to Unaudited Financial Statements.


                                       6
<PAGE>

                   Smith Barney Diversified Futures Fund L.P.
                            Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                       Three Months Ended                Six Months Ended
                                                            June 30,                         June 30,
                                                  ------------------------------    ---------------------------
                                                          2004           2003            2004          2003
                                                  ------------------------------    --------------------------
<S>                                                       <C>            <C>            <C>             <C>
  Cash flows from operating activities:
    Net income (loss)                              $(11,199,369)     $1,599,820    $ (2,222,443)   $  7,843,214
    Adjustments to reconcile net income
     (loss) to net cash provided by
     (used in) operating activities:
      Changes in operating assets and liabilities:
            Net unrealized appreciation
            (depreciation) on open futures
             positions                                5,831,346       1,923,272       4,186,811       7,135,373
            Unrealized appreciation on open
             forward contracts                        1,342,464      (1,219,280)      3,762,763        (444,683)
            (Increase) decrease in interest
             receivable                                   4,276          10,067          (6,354)          1,822

            Unrealized depreciation on open
             forward contracts                         (370,197)        748,028      (1,221,502)        375,766
        Accrued expenses:
           Increase (decrease) in
            commissions                                 (77,279)        (15,078)        (40,199)         15,306
           Decrease in management fees                  (26,715)         (4,301)        (15,433)        (25,968)
           Increase (decrease) in
             incentive fees                          (1,880,089)       (513,602)       (761,281)        436,721
           Increase (decrease) in other                  10,006          22,248          22,661          44,955
        Increase (decrease) in redemptions
         payable                                        524,535        (197,396)        231,109          59,704
                                                   ------------    ------------    ------------    ------------
              Net cash provided by (used in)
               operating activities                  (5,841,022)      2,353,778       3,936,132      15,442,210
                                                   ------------    ------------    ------------    ------------

  Cash flows from financing activities:
    Proceeds from additions L.P.                            194           2,332           1,995           4,518
    Payments for redemptions                         (1,765,681)     (1,723,194)     (3,469,139)     (3,088,936)
                                                   ------------    ------------    ------------    ------------
               Net cash provided by (used in)
               financing activities                  (1,765,487)     (1,720,862)     (3,467,144)     (3,084,418)
                                                   ------------    ------------    ------------    ------------
               Net change in cash                    (7,606,509)        632,916         468,988      12,357,792
              Cash, at beginning of period           76,059,070      75,782,177      67,983,573      64,057,301
                                                    -----------    ------------    ------------    ------------
              Cash, at end of period               $ 68,452,561    $ 76,415,093    $ 68,452,561    $ 76,415,093
                                                   ============    ============    ============    ============
</TABLE>


See Accompanying Notes to Unaudited Financial Statements.

                                       7
<PAGE>

                   Smith Barney Diversified Futures Fund L.P.
                          Notes to Financial Statements
                                  June 30, 2004
                                   (Unaudited)


1.   General:

     Smith Barney Diversified Futures Fund L.P. (the "Partnership") is a limited
partnership organized under the laws of the State of New York on August 13, 1993
to engage in the  speculative  trading of a  diversified  portfolio of commodity
interests  including  futures  contracts,  options  and forward  contracts.  The
commodity  interests that are traded by the Partnership are volatile and involve
a high degree of market risk. The Partnership  commenced  trading  operations on
January 12, 1994.

     Citigroup  Managed  Futures LLC,  formerly Smith Barney Futures  Management
LLC, acts as the general partner (the "General Partner") of the Partnership. The
Partnership's  commodity  broker  is  Citigroup  Global  Markets  Inc.  ("CGM"),
formerly  Salomon Smith Barney Inc. CGM is an affiliate of the General  Partner.
The General  Partner is wholly owned by Citigroup  Global Markets  Holdings Inc.
("CGMHI"),  formerly Salomon Smith Barney Holdings Inc., which is the sole owner
of CGM. CGMHI is a wholly owned subsidiary of Citigroup Inc.  ("Citigroup").  As
of June 30, 2004, all trading decisions are made for the Partnership by Campbell
& Company, Inc.,  Willowbridge  Associates,  Inc., Winton Capital Management and
Graham  Capital  Management  L.P.  (each  an  "Advisor"  and  collectively,  the
"Advisors").

     The accompanying  financial statements are unaudited but, in the opinion of
management,  include  all  adjustments,  consisting  only  of  normal  recurring
adjustments,  necessary for a fair presentation of the  Partnership's  financial
condition  at June 30,  2004  and  December  31,  2003  and the  results  of its
operations  and cash flows for the three and six months  ended June 30, 2004 and
2003. These financial  statements  present the results of interim periods and do
not include all disclosures  normally  provided in annual financial  statements.
You  should  read  these  financial   statements  together  with  the  financial
statements  and notes included in the  Partnership's  annual report on Form 10-K
filed with the  Securities  and Exchange  Commission for the year ended December
31, 2003.

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



                                       8
<PAGE>


                   Smith Barney Diversified Futures Fund L.P.
                          Notes to Financial Statements
                                  June 30, 2004
                                   (Unaudited)
                                   (Continued)



2.   Financial Highlights:

     Changes  in Net Asset  Value per  Redeemable  Unit of  Limited  Partnership
Interest  for the  three and six  months  ended  June 30,  2004 and 2003 were as
follows:
<TABLE>
<CAPTION>

                                       Three Months Ended         Six Months  Ended
                                             June 30,                  June 30,
                                     ---------------------     ----------------------
                                         2004        2003          2004        2003
                                     ---------   ----------    ----------   ---------
<S>                                      <C>         <C>           <C>          <C>
Net realized and unrealized
 gains (losses)*                    $ (257.21)    $  48.50     $  (0.66)    $ 204.09
Interest income                          3.12         3.45         6.19         7.02
Expenses **                             (8.25)      (18.61)      (60.79)      (48.24)
                                     ---------    ---------    ---------    ---------
Increase (decrease) for the period    (262.34)       33.34       (55.26)      162.87
Net Asset Value per Redeemable
 Unit, beginning of period           1,843.72     1,547.96     1,636.64     1,418.43
                                     ---------    ---------    ---------    ---------
Net Asset Value per Redeemable
Unit, end of period                $ 1,581.38   $ 1,581.30   $ 1,581.38   $ 1,581.30
                                     =========    =========    =========    =========
</TABLE>

*   Includes brokerage commissions.
**  Excludes brokerage commissions.


                                       9
<PAGE>


 Financial Highlights (continued):
<TABLE>
<CAPTION>
                                       Three Months Ended         Six Months  Ended
                                             June 30,                  June 30,
                                     ---------------------     ----------------------
                                         2004        2003          2004       2003
                                     ---------   ----------    ----------   ---------
<S>                                       <C>        <C>            <C>        <C>
Ratio to average net assets: ***
Net investment loss before
 incentive fees ****                     (6.9)%      (7.4)%        (7.3)%     (7.5)%
                                         ====        ====          ====       ====

Operating expenses                        7.7%        8.3%          8.0%       8.4%
Incentive fees                            0.0%        2.7%          2.6%       4.1%
                                         ----        ----          ----       ----
Total expenses                            7.7%       11.0%         10.6%      12.5%
                                         ====        ====          ====       ====

Total return:
Total return before incentive fees      (14.2)%       2.8%         (0.6)%     13.8%
Incentive fees                           (0.0)%      (0.6)%        (2.8)%     (2.3)%
                                         ----        ----          ----       ----
Total return after incentive fees       (14.2)%       2.2%         (3.4)%     11.5%
                                         ====        ====          ====       ====
</TABLE>


*** Annualized (other than incentive fees)
**** Interest income less total expenses (exclusive of incentive fees).
The  above  ratios  may vary for  individual  investors  based on the  timing of
capital  transactions  during  the  period.   Additionally,   these  ratios  are
calculated for the Limited  Partner class using the Limited  Partners'  share of
income, expenses and average net assets.


                                       10
<PAGE>


3.   Trading Activities:

     The  Partnership  was formed for the  purpose  of  trading  contracts  in a
variety of commodity interests,  including derivative financial  instruments and
derivative  commodity  instruments.  The  results of the  Partnership's  trading
activities  are shown in the  Statements  of Income and Expenses  and  Partners'
Capital and are  discussed in Item 2,  Management's  Discussion  and Analysis of
Financial Condition and Results of Operations.

     The  Customer   Agreement   between  the  Partnership  and  CGM  gives  the
Partnership  the legal right to net unrealized  gains and losses on open futures
positions.

     All of the  commodity  interests  owned  by the  Partnership  are  held for
trading purposes.  The average fair values of these interests during the six and
twelve  months ended June 30, 2004 and  December  31,  2003,  based on a monthly
calculation,  were $3,514,395 and $4,386,216,  respectively.  The fair values of
these commodity interests, including options thereon, if applicable, at June 30,
2004 and December 31, 2003, were $(1,088,748) and $5,639,324, respectively. Fair
values for  exchange  traded  commodity  futures and options are based on quoted
market prices for those futures and options. Fair values for all other financial
instruments for which market  quotations are not readily  available are based on
calculations approved by the General Partner.

4.   Financial Instrument Risk:

     In the normal course of its business, the Partnership is party to financial
instruments  with  off-balance  sheet  risk,   including   derivative  financial
instruments and derivative commodity  instruments.  These financial  instruments
may  include  forwards,  futures  and  options,  whose  values are based upon an
underlying  asset,  index,  or reference  rate, and generally  represent  future
commitments  to exchange  currencies  or cash  flows,  to purchase or sell other
financial  instruments at specific terms at specified  future dates,  or, in the
case of derivative commodity instruments, to have a reasonable possibility to be
settled in cash, through physical delivery or with another financial instrument.
These  instruments  may be traded on an  exchange or  over-the-counter  ("OTC").
Exchange  traded  instruments are  standardized  and include futures and certain
option contracts.  OTC contracts are negotiated between  contracting parties and
include forwards and certain options.


                                       11
<PAGE>



     Each of these  instruments  is subject to  various  risks  similar to those
related to the  underlying  financial  instruments  including  market and credit
risk. In general, the risks associated with OTC contracts are greater than those
associated  with  exchange  traded  instruments  because of the greater  risk of
default by the counterparty to an OTC contract.

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

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

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

     The majority of these instruments  mature within one year of June 30, 2004.
However, due to the nature of the Partnership's business,  these instruments may
not be held to maturity.



                                       12
<PAGE>



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

Liquidity and Capital Resources

     The Partnership does not engage in the sale of goods or services.  Its only
assets are its equity in its commodity  futures trading  account,  consisting of
cash,  net  unrealized  appreciation  on open futures and forward  contracts and
interest  receivable.  Because of the low margin deposits  normally  required in
commodity  futures  trading,  relatively  small  price  movements  may result in
substantial losses to the Partnership.  While substantial losses could lead to a
decrease in  liquidity,  no such losses  occurred  during the second  quarter of
2004.

     The  Partnership's  capital  consists of the capital  contributions  of the
partners as increased or decreased by realized and/or unrealized gains or losses
on  commodity  futures  trading,   expenses,   interest  income,  additions  and
redemptions of Redeemable Units and distributions of profits, if any.

     For the six months ended June 30, 2004,  Partnership capital decreased 7.9%
from  $71,727,346 to $66,037,759.  This decrease was  attributable to a net loss
from operations of $2,222,443 and the redemption of 2,067.5549  Redeemable Units
totaling  $3,469,139,  partially offset by additional sales of 1.1848 Redeemable
Units  of  Limited  Partnership  Interest  totaling  $1,995.  Persons  investing
$1,000,000 or more will pay a reduced brokerage fee,  receiving the differential
in the form of additional  Redeemable Units.  Future  redemptions can impact the
amount of funds  available  for  investment in commodity  contract  positions in
subsequent periods.

Critical Accounting Policies

     The  preparation  of financial  statements  in conformity  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities,  disclosures of contingent assets and liabilities at the
date of the financial  statements and reported  amounts of revenues and expenses
during the reporting period. Actual results could differ from these estimates.

     All commodity interests  (including  derivative  financial  instruments and
derivative commodity  instruments) are used for trading purposes.  The commodity
interests  are  recorded on trade date and open  contracts  are  recorded in the
statements of financial  condition at fair value on the last business day of the
period,  which represents  market value for those commodity  interests for which
market  quotations are readily  available or other measures of fair value deemed
appropriate by management of the General Partner for those  commodity  interests
and foreign  currencies for which market  quotations are not readily  available.
Investments  in  commodity  interests  denominated  in  foreign  currencies  are
translated  into U.S.  dollars  at the  exchange  rates  prevailing  on the last
business day of the period.  Realized  gains  (losses) and changes in unrealized
values on open  positions are  recognized in the period in which the contract is
closed or the changes occur and are included in net gains (losses) on trading of
commodity interests.

     Foreign currency contracts are those contracts where the Partnership agrees
to receive or deliver a fixed  quantity of foreign  currency for an  agreed-upon
price on an agreed future date. Foreign currency contracts are valued daily, and
the  Partnership's net equity therein,  representing  unrealized gain or loss on
the contracts as measured by the difference between the forward foreign exchange


                                       13
<PAGE>

rates at the  date of entry  into the  contracts  and the  forward  rates at the
reporting dates, is included in the statement of financial  condition.  Realized
gains (losses) and changes in unrealized  values on foreign  currency  contracts
are  recognized  in the period in which the  contract  is closed or the  changes
occur and are included in the  statements  of income and expenses and  partners'
capital.

Results of Operations

     During the  Partnership's  second  quarter of 2004, the Net Asset Value per
Redeemable  Unit  decreased  14.2% from $1,843.72 to $1,581.38 as compared to an
increase of 2.2% in the second  quarter of 2003. The  Partnership  experienced a
net trading  loss before  brokerage  commissions  and related fees in the second
quarter of 2004 of $9,964,604. Losses were primarily attributable to the trading
of commodity contracts in currencies,  grains, U.S. and non-U.S. interest rates,
metals,  softs  and  indices  and were  partially  offset  by  gains in  energy,
livestock  and lumber.  The  Partnership  experienced  a net trading gain before
brokerage  commissions  and  related  fees  in the  second  quarter  of  2003 of
$3,445,280.  Gains were  primarily  attributable  to the  trading  of  commodity
contracts in  currencies,  U.S. and non-U.S.  interest  rates and were partially
offset by losses in energy, grains, softs, livestock, metals and indices.


     During the  Partnership's  six months  ended June 30,  2004,  the Net Asset
Value per Redeemable Unit decreased 3.4% from $1,636.64 to $1,581.38 as compared
to an increase of 11.5% for the six months ended June 30, 2003. The  Partnership
experienced a net trading gain before brokerage commissions and related fees for
the  six  months  ended  June  30,  2004 of  $2,299,599.  Gains  were  primarily
attributable to the trading of commodity contracts in energy,  grains,  non-U.S.
interest rates, livestock, metals and lumber and were partially offset by losses
in  currencies,   U.S.  interest  rates,  softs  and  indices.  The  Partnership
experienced a net trading gain before brokerage commissions and related fees for
the six  months  ended  June  30,  2003 of  $12,079,863.  Gains  were  primarily
attributable to the trading of commodity  contracts in currencies,  energy, U.S.
and  non-U.S.  interest  rates and were  partially  offset by losses in  grains,
softs, livestock, metals, softs and indices.

     The lack of persistent  trends resulted in a difficult  environment for the
Advisors  which  began  precisely  as the second  quarter of 2004 got  underway.
Trends in both  financial and commodity  futures  markets had been clear for the
previous three quarters.  In the second quarter of 2004, however,  substantially
opposing  fundamental  considerations  along with benign  short-term  volatility
greatly reduced the opportunities  for the Advisors  resulting in a particularly
difficult trading environment.

     The directionless  behavior of so many markets can be explained in terms of
a perception  that a significant  change may be underway in the global  economic
cycle.  Some of the primary drivers of these  conditions have been:  softer than
expected U.S.  economic data creating  confusion with regard to forecasting  the
pace of Federal Reserve  tightening;  U.S. and international  bonds,  equity and
currency  markets coping with indications of rising  inflation,  but at the same
time,  an apparent  pause in growth;  and a fragile  Eurozone  recovery  keeping
European Central Bank monetary intervention on hold.



                                       14
<PAGE>

     Trading in nearly all market sectors was  unprofitable  for the Partnership
except for positions in the energy sector, base metals,  soybean and longer-term
European  interest rates. The Asian interest rate and currency  markets,  global
stock indices and precious  metals were the primary  contributors  to the losses
while  trading  in crude  oil,  soybeans  and copper  provided  some  profits to
mitigate the other losses.


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

     Interest income on 80% of the Partnership's daily equity maintained in cash
was earned at the monthly  average  30-day U.S.  Treasury  bill rate  determined
weekly by CGM based on the  non-competitive  yield on three month U.S.  Treasury
bills  maturing 30 days from the date in which such  weekly rate is  determined.
CGM may continue to maintain the  Partnership's  assets in cash and/or place all
of the Partnership's assets in 90-day Treasury bills and pay the Partnership 80%
of the interest earned on the Treasury bills  purchased.  CGM will retain 20% of
any interest  earned on Treasury  bills.  Interest  income for the three and six
months ended June 30, 2004  decreased by $27,972 and $65,546,  respectively,  as
compared to the  corresponding  periods in 2003. The decrease in interest income
is primarily due to decreases in interest  rates and net assets during the three
and six months ended June 30, 2004 as compared to the  corresponding  periods in
2003.

     Brokerage  commissions are calculated on the  Partnership's net asset value
as of the last day of each month and are  affected  by trading  performance  and
redemptions.  Accordingly, they must be compared in relation to the fluctuations
in monthly net asset values.  Commissions  and fees for the three and six months
ended June 30,  2004  decreased  by  $111,826  and  $103,548,  respectively,  as
compared  to the  corresponding  periods  in 2003.  The  decrease  in  brokerage
commissions  is due to a decrease in net assets  during the three and six months
ended June 30, 2004 as compared to the corresponding periods in 2003.

     Management  fees are  calculated  on the portion of the  Partnership's  net
asset value  allocated to each  Advisor at the end of the month and,  therefore,
are affected by trading  performance  and  redemptions.  Management fees for the
three and six months  ended June 30,  2004  decreased  by $34,619  and  $58,864,
respectively,  as compared to the corresponding periods in 2003. The decrease in
management  fees is due to a  decrease  in net  assets  during the three and six
months ended June 30, 2004 as compared to the corresponding periods in 2003.

     Incentive  fees are  based on the new  trading  profits  generated  by each
Advisor at the end of the quarter as defined in the advisory  agreements between
the Partnership,  the General Partner and each Advisor.  Trading performance for
the three and six months ended June 30, 2004  resulted in  incentive  fees of $0
and $1,880,089,  respectively.  Trading performance for the three and six months
ended June 30, 2003  resulted in  incentive  fees of  $491,755  and  $1,497,113,
respectively.


                                       15
<PAGE>


Item 3. Quantitative and Qualitative Disclosures about Market Risk


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

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

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

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

     Exchange  maintenance margin requirements have been used by the Partnership
as the measure of its Value at Risk.  Maintenance margin requirements are set by
exchanges  to equal or exceed  the  maximum  losses  reasonably  expected  to be
incurred  in the fair value of any given  contract  in  95%-99%  of any  one-day
interval.  Maintenance  margin  has been  used  rather  than the more  generally
available  initial  margin,  because  initial  margin  includes  a  credit  risk
component, which is not relevant to Value at Risk.


                                       16
<PAGE>


     The following table indicates the trading Value at Risk associated with the
Partnership's  open  positions  by market  category  as of June 30, 2004 and the
highest,  lowest and average  value during the three months ended June 30, 2004.
All open position  trading risk exposures of the Partnership  have been included
in  calculating  the  figures  set  forth  below.  As  of  June  30,  2004,  the
Partnership's total  capitalization was $66,037,759.  There has been no material
change in the trading  Value at Risk  information  previously  disclosed  in the
Partnership's Annual Report on Form 10-K for the year ended December 31, 2003.


                                  June 30, 2004
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                            Three Months Ended June 30, 2004
                                                                    -------------------------------------------------
                                                          % of Total           High               Low             Average
   Market Sector                       Value at Risk     Capitalization     Value at Risk     Value at Risk     Value at Risk
--------------------------------------------------------------------------------------------------------------------------
<S>                                         <C>                 <C>              <C>             <C>                 <C>
     Currencies:
     Exchange Traded
     Contracts                           $ 475,249              0.72%       $1,582,785           $553,365          $628,166
      - OTC Contracts                      755,971              1.15%          755,971            422,027           602,562
     Energy                                858,075              1.30%        1,977,750            858,075         1,383,505
     Grains                                 97,696              0.15%          638,578             87,177           237,431
     Interest Rates U.S.                   598,400              0.91%        1,249,450            384,771           630,100
     Interest Rates Non-U.S.             1,243,210              1.88%        2,426,145            953,440         1,196,173
     Livestock                             146,800              0.22%          148,100             94,964           118,555
     Metals:
      - Exchange Traded
     Contracts                             101,000              0.15%          452,100             97,000           104,667
      - OTC Contracts                       94,715              0.14%          186,485             45,015           118,092
     Softs                                 194,396              0.29%          280,684            186,284           205,438
     Indices                             1,537,042              2.33%        1,537,042            863,109         1,325,390
     Lumber                                      -                 -             2,200                  -             1,467
                                        ----------             -----
  Total                                 $6,102,554              9.24%
                                       ===========             =====
</TABLE>



                                       17
<PAGE>


Item 4. Controls and Procedures

     Based on their  evaluation  of the  Partnership's  disclosure  controls and
procedures as of June 30, 2004, the Chief Executive  Officer and Chief Financial
Officer have concluded that such controls and procedures are effective.

     During the  Partnership's  last fiscal quarter,  no changes occurred in the
Partnership's  internal  control over financial  reporting that have  materially
affected,  or are  reasonably  likely to materially  affect,  the  Partnership's
internal control over financial reporting.


                                       18
<PAGE>

                           PART II. OTHER INFORMATION


Item 1. Legal Proceedings

     The following  information  supplements and amends our discussion set forth
under Part I, Item 3 "Legal  Proceedings" in the Partnership's  Annual Report on
Form 10-K for the fiscal year ended  December 31, 2003 and under Part II, Item 1
"Legal  Proceedings" in the Partnership's  Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 2004.

WorldCom, Inc.

     On May 10,  2004,  Citigroup  announced  that it had  agreed  to pay  $2.65
billion to settle the WorldCom class action suits.

Item 2. Changes in  Securities,  Use of Proceeds and Issuer  Purchases of Equity
     Securities -

     Additional  Redeemable Units offered  represent a reduced  brokerage fee to
     existing  limited  partners who invested  $1,000,000 or more. For the three
     months ended June 30, 2004 and 2003,  there were additional  sales of 0 and
     2.8778 Redeemable Units totaling $0 and $4,518, respectively.

     Proceeds  from  the sale of  additional  Redeemable  Units  are used in the
     trading of commodity  interests  including futures  contracts,  options and
     forward contracts.

The  following  chart  sets  forth  the  purchases  of  Redeemable  Units by the
     Partnership.
<TABLE>
<CAPTION>
<S>                             <C>                      <C>                     <C>                  <C>
---------------------------- ------------------------ ---------------------- -------------------- ----------------------

         Period              (a) Total Number of      (b) Average Price      (c) Total Number     (d) Maximum Number
                             Shares (or Units)        Paid per Share (or     of Shares (or        (or Approximate
                             Purchased*               Unit)**                Units) Purchased     Dollar Value) of
                                                                             as Part of           Shares (or Units)
                                                                             Publicly Announced   that May Yet Be
                                                                             Plans or Programs     Purchased Under the
                                                                                                  Plans or Programs
---------------------------- ------------------------ ---------------------- -------------------- ----------------------
April 1, 2004 - April 30,             194.0964                 $1,670.08              N/A                  N/A
2004
---------------------------- ------------------------ ---------------------- -------------------- ----------------------
May 1, 2004 - May 31, 2004            326.8056                 $1,656.14              N/A                  N/A
---------------------------- ------------------------ ---------------------- -------------------- ----------------------
June 1, 2004 - June 30,               569.3053                 $1,581.38              N/A                  N/A
2004
---------------------------- ------------------------ ---------------------- -------------------- ----------------------
Total                                 1,090.2073               $1,635.87              N/A                  N/A
---------------------------- ------------------------ ---------------------- -------------------- ----------------------
</TABLE>

* 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.



                                       19
<PAGE>

** 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 - None

Item 6. Exhibits and Reports of Form 8-K

     (a)  The exhibits  required to be filed by Item 601 of  Regulation  S-K are
          incorporated   herein  by  reference  to  the  exhibit  index  of  the
          Partnership's  Annual Report on Form 10-K for the year ended  December
          31, 2003.

          Exhibit - 31.1 - Rule 13a-14(a)/15d-14(a) Certification (Certification
          of President and Director).

          Exhibit - 31.2 - Rule 13a-14(a)/15d-14(a) Certification (Certification
          of Chief Financial Officer and Director).

          Exhibit  -  32.1  -  Section  1350  Certification   (Certification  of
          President and Director).

          Exhibit - 32.2 - Section 1350  Certification  (Certification  of Chief
          Financial Officer and Director).

     (b)  Reports on Form 8-K - None



                                       20
<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 thereunto duly authorized.

SMITH BARNEY DIVERSIFIED FUTURES FUND L.P.



By:        Citigroup Managed Futures LLC
           (General Partner)


By:        /s/ David J. Vogel
           -------------------------------
           David J. Vogel
           President and Director


Date:      8/13/04


By:       /s/ Daniel R. McAuliffe, Jr.
          -------------------------------
          Daniel R. McAuliffe, Jr.
          Chief Financial Officer and Director

Date:     8/13/04


                                       21
<PAGE>

                                                                    Exhibit 31.1
                                  CERTIFICATION

I, David J. Vogel, certify that:

1.   I have  reviewed  this  quarterly  report  on  Form  10-Q of  Smith  Barney
     Diversified Futures Fund L.P. (the "registrant");

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     c)   disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most  recent  fiscal  quarter  that  has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     a)   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.


Date: August 13, 2004
                                               /s/ David J. Vogel
                                                   ----------------
                                                   David J. Vogel
                                                   Citigroup Managed Futures LLC
                                                   President and Director


                                       22
<PAGE>


                                                                    Exhibit 31.2
                                  CERTIFICATION

I, Daniel R. McAuliffe, Jr., certify that:

1.   I have  reviewed  this  quarterly  report  on  Form  10-Q of  Smith  Barney
     Diversified Futures Fund L.P. (the "registrant");

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a)   designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     c)   disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most  recent  fiscal  quarter  that  has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     a)   all significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.


Date: August 13, 2004
                                        /s/ Daniel R. McAuliffe, Jr.
                                            ---------------------------
                                            Daniel R. McAuliffe, Jr.
                                            Citigroup Managed Futures LLC
                                            Chief Financial Officer and Director



                                       23
<PAGE>




                                                                    Exhibit 32.1
                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     In connection with the Quarterly Report of Smith Barney Diversified Futures
Fund L.P. (the  "Partnership")  on Form 10-Q for the period ending June 30, 2004
as filed with the  Securities  and Exchange  Commission  on the date hereof (the
"Report"),  I, David J.  Vogel,  President  and  Director of  Citigroup  Managed
Futures LLC, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss.
906 of the Sarbanes-Oxley Act of 2002, that:



     (1)  The Report fully  complies with the  requirements  of section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Partnership.

/s/ David J. Vogel
--------------------------
David J. Vogel
Citigroup Managed Futures LLC
President and Director

August 13, 2004



                                       24
<PAGE>


                                                                    Exhibit 32.2
                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     In connection with the Quarterly Report of Smith Barney Diversified Futures
Fund L.P. (the  "Partnership")  on Form 10-Q for the period ending June 30, 2004
as filed with the  Securities  and Exchange  Commission  on the date hereof (the
"Report"), I, Daniel R. McAuliffe,  Jr., Chief Financial Officer and Director of
Citigroup  Managed  Futures LLC,  certify,  pursuant to 18 U.S.C.  ss. 1350,  as
adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:



     (1)  The Report fully  complies with the  requirements  of section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Partnership.

/s/ Daniel R. McAuliffe, Jr.
----------------------------
Daniel R. McAuliffe, Jr.
Citigroup Managed Futures LLC
Chief Financial Officer and Director

August 13, 2004


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