FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

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

                     OF THE SECURITIES EXCHANGE ACT OF 1934

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

                     OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter ended March 31, 2002
                      --------------

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 Smith Barney Futures Management LLC
                           388 Greenwich St. - 7th Fl.
                            New York, New York 10013
-------------------------------------------------------------------------------
              (Address and Zip Code of principal executive offices)


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


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

                                                 Yes   X    No
                                                     -----     ----


<PAGE>


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

                                                                     Page
                                                                    Number

PART I - Financial Information:

   Item 1.    Financial Statements:

              Statement of Financial Condition
              at March 31, 2002 and December 31,
              2001 (unaudited).                                       3

              Condensed Schedules of Investments at
              March 31, 2002 and December 21, 2001
              (unaudited).                                          4 - 5

              Statement of Income and Expenses and Partners'
              Capital for the three months ended March 31,
              2002 and 2001 (unaudited).                              6

              Notes to Financial Statements
              (unaudited)                                           7 - 8

   Item 2.    Management's Discussion and
              Analysis of Financial Condition
              and Results of Operations                            11 - 12

   Item 3.    Quantitative and Qualitative
              Disclosures of Market Risk                           13 - 14

PART II - Other Information                                          15


                                        2
<PAGE>


                                     PART I
                          ITEM 1. FINANCIAL STATEMENTS

                   SMITH BARNEY DIVERSIFIED FUTURES FUND L.P.
                        STATEMENT OF FINANCIAL CONDITION
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                 March 31,     December 31,
                                                   2002             2001
                                                -----------    ------------
<S>                                                   <C>           <C>
Assets:
Equity in commodity futures trading account:
  Cash                                          $58,557,495   $63,493,595
  Net unrealized appreciation
   on open positions                              4,030,868     2,703,661
  Commodity options owned, at fair value
   (cost $0 and 1,752,250 in 2002 and
    2001, respectively)                                 -         849,250
                                                -----------   -----------
                                                 62,588,363    67,046,506
Interest receivable                                  71,996        77,094
                                                -----------   -----------
                                                $62,660,359   $67,123,600
                                                ===========   ===========

LIABILITIES AND PARTNERS' CAPITAL:

Liabilities:
 Accrued expenses:
  Commissions                                   $   289,545   $   308,245
  Management fees                                   135,669       153,342
  Other                                             101,796        75,682
 Redemptions payable                              1,013,691       217,590
                                                -----------   -----------
                                                  1,540,701       754,859
                                                -----------   -----------
Partners' Capital:

General Partner, 2,048.9308 Unit
   equivalents outstanding in 2002 and 2001       2,250,156     2,379,259
Limited Partners, 53,604.7342 and
  55,105.2813 Units of Limited Partnership
  Interest outstanding in 2002 and 2001,
  respectively                                   58,869,502    63,989,482
                                                -----------   -----------
                                                 61,119,658    66,368,741
                                                -----------   -----------
                                                $62,660,359   $67,123,600
                                                ===========   ===========
</TABLE>


See Notes to Financial Statements.
                                        3



<PAGE>


                                  Smith Barney
                          Diversified Futures Fund L.P.
                        Condensed Schedule of Investments
                                 March 31, 2002
                                   (Unaudited)
<TABLE>
<CAPTION>
<S>                                              <C>                            <C>
Sector                                          Contract                       Fair Value
---------------------------------  ------------------------------------     -----------------

Currencies
                                   Exchange contracts purchased - 0.25%            $ 149,882
                                   Exchange contracts sold - 0.31%                   191,650
                                                                            -----------------
                                     Total Exchange - 0.56%                          341,532


                                   Over the counter contracts purchased - (0.04)%    (21,578)
                                   Over the counter contracts sold - 0.39%           240,216
                                                                            -----------------
                                     Total Over the counter - 0.35%                  218,638

                                                                            -----------------
   Total Currencies - 0.91%                                                          560,170
                                                                            -----------------


Total Energy - 2.41%               Futures contracts purchased - 2.41%             1,470,190
                                                                            -----------------

Grains
                                   Futures contracts purchased - 0.22%               136,506
                                   Futures contracts sold - 0.19%                    113,291
                                                                            -----------------
  Total Grains - 0.41%                                                               249,797
                                                                            -----------------


Total Interest Rates U.S. - 0.71%  Futures contracts sold - 0.71%                    431,334
                                                                            -----------------

Interest Rates Non-U.S.
                                   Futures contracts purchased - 0.24%               146,641
                                   Futures contracts sold - 1.50%                    919,064
                                                                            -----------------
   Total Interest Rates Non-U.S. - 1.74%                                           1,065,705
                                                                            -----------------


Total Livestock - 0.26%            Futures contracts sold - 0.26%                    156,146
                                                                            -----------------

Metals
                                   Futures contracts purchased - 0.32%               195,317
                                   Futures contracts sold - (0.15)%                  (90,487)
                                                                            -----------------
   Total Metals - 0.17%                                                              104,830
                                                                            -----------------

Softs
                                   Futures contracts purchased - 0.27%               166,789
                                   Futures contracts sold - (0.12)%                  (75,498)
                                                                            -----------------
  Total Softs - 0.15%                                                                 91,291
                                                                            -----------------

Indices
                                   Futures contracts purchased - (0.20)%            (124,952)
                                   Futures contracts sold - 0.05%                     30,746
                                                                            -----------------
  Total Indices - (0.15)%                                                            (94,206)
                                                                            -----------------

Total Lumber - (0.01)%             Futures contracts purchased - (0.01)%              (4,389)
                                                                            -----------------


Total Fair Value - 6.60%                                                         $ 4,030,868
                                                                            =================


Country Composition                                        Investments       % of Investments
                                                         at Fair Value         at Fair Value
---------------------------------  ------------------------------------     -----------------

Australia                                                     $ 35,313                 0.88%
Canada                                                          11,809                 0.29%
France                                                          11,543                 0.29%
Germany                                                        527,473                13.09%
Hong Kong                                                        7,475                 0.19%
Italy                                                            5,789                 0.14%
Japan                                                          (96,307)               (2.39)%
Spain                                                             (196)               (0.01)%
United Kingdom                                                 873,532                21.67%
United States                                                2,654,437                65.85%
                                   ------------------------------------     -----------------
                                                           $ 4,030,868               100.00%
                                   ====================================     =================
</TABLE>

Percentages are based on Partners' capital unless otherwise indicated
See Notes to Financial Statements

                                                    4


<PAGE>



                   Smith Barney Diversified Futures Fund L.P.
                        Condensed Schedule of Investments
                                December 31, 2001
                                   (Unaudited)
<TABLE>
<CAPTION>
<S>                                              <C>                                             <C>
Sector                                     Contract                                            Fair Value
-----------------------------------------  -------------------------------------       -------------------
Energy                                     Futures contracts purchased - (0.06)%                $ (40,499)
                                           Futures contracts sold - (0.19)%                      (126,734)
                                                                                       -------------------
  Total Energy - (0.25)%                                                                         (167,233)
                                                                                       -------------------

Grains                                     Futures contracts purchased - (0.01)%                   (4,000)
                                           Futures contracts sold - 0.42%                         280,846
                                                                                       -------------------
  Total Grains - 0.41%                                                                            276,846
                                                                                       -------------------

Interest Rates U.S.                        Futures contracts purchased - 0.07%                     48,625
                                           Futures contracts sold - 0.03%                          14,496
                                                                                       -------------------
  Total Interest Rates U.S. - 0.10%                                                                63,121
                                                                                       -------------------

Interest Rates Non-U.S.                    Futures contracts purchased - (0.19)%                 (129,572)
                                           Futures contracts sold - 0.29%                         194,860
                                                                                       -------------------
  Total Interest Rates Non-U.S. - 0.10%                                                            65,288
                                                                                       -------------------

Livestock                                  Futures contracts purchased - 0.06%                     42,050
                                           Futures contracts sold - (0.08)%                       (57,934)
                                                                                       -------------------
  Total Livestock - (0.02)%                                                                       (15,884)
                                                                                       -------------------

Metals                                     Futures contracts purchased -  0.12%                    82,041
                                           Futures contracts sold - (0.55)%                      (365,357)
                                                                                       -------------------
  Total Metals - (0.43)%                                                                         (283,316)
                                                                                       -------------------

Currencies                                 Exchange contracts purchased - 0.75%                   501,553
                                           Exchange contracts sold - 1.38%                        914,350
                                                                                       -------------------
                                             Total Exchange - 2.13%                             1,415,903

                                           Over the counter contracts purchased - 0.20%           132,886
                                           Over the counter contracts sold - 1.47%                974,655
                                                                                      -------------------
                                             Total Over the counter - 1.67%                     1,107,541
                                                                                       -------------------

  Total Currencies - 3.80%                                                                      2,523,444
                                                                                       -------------------

Softs                                      Futures contracts purchased - 0.19%                    125,707
                                           Futures contracts sold - (0.02) %                      (14,192)
                                                                                       -------------------
   Total Softs - 0.17%                                                                            111,515
                                                                                       -------------------

Indices                                     Futures contracts purchased - 0.21%                   140,713
                                            Futures contracts sold - (0.01)%                       (5,850)
                                                                                       -------------------
   Total Indices - 0.20%                                                                          134,863
                                                                                       -------------------

Total Lumber - (0.01)%                     Futures contracts sold - (0.01)%                        (4,983)
                                                                                       -------------------

Total Fair Value on Future and Forwards - 4.07%                                                 2,703,661
                                                                                       -------------------

Total Currencies - 1.28%                   Commodity options owned - 1.28%                        849,250
                                                                                       -------------------

Total Investments - 5.35%                                                                      $3,552,911
                                                                                       ===================
                                                                    Investments         % of Investments
Country Composition                                               at Fair Value          at Fair Value
-----------------------------------------  -------------------------------------       -------------------
Australia                                                               $18,429              0.52%
Canada                                                                   22,325              0.63%
France                                                                   24,533              0.69%
Germany                                                                 144,855              4.08%
Hong Kong                                                                 3,976              0.11%
Italy                                                                     1,696              0.05%
Japan                                                                   (73,301)            (2.06)%
Spain                                                                    (5,828)            (0.16)%
United Kingdom                                                         (432,138)           (12.16)%
United States                                                         3,848,364            108.32%
                                           -------------------------------------       ------------
                                                                     $3,552,911            100.00%
                                           =====================================       ============
</TABLE>
Percentages are based on Partners' capital unless otherwise indicated
See Notes to Financial Statements.

                                        5
<PAGE>


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

<TABLE>
<CAPTION>

                                                          THREE MONTHS ENDED
                                                                       MARCH 31,
                                                   -----------------------------
                                                       2002              2001
                                                   -------------   -------------
<S>                                                     <C>             <C>
Income:
  Net gains (losses) on trading of commodity
   interests:
  Realized gains (losses) on closed positions       $ (4,652,859)   $  2,876,167
  Change in unrealized gains on open
   positions                                           2,230,207         266,180
                                                    ------------    ------------

                                                      (2,422,652)      3,142,347
  Interest income                                        208,737         769,474
                                                    ------------    ------------

                                                      (2,213,915)      3,911,821
                                                    ------------    ------------



Expenses:
  Brokerage commissions including clearing fees
     of $45,642 and $65,445, respectively                944,592       1,194,359*
  Management fees                                        414,181         575,040
  Other expenses                                          26,114          29,631
  Incentive fees                                             -           836,800
                                                    ------------    ------------

                                                       1,384,887       2,635,830
                                                    ------------    ------------

  Net income (loss)                                   (3,598,802)      1,275,991
  Additions                                                2,477           6,321
  Redemptions                                         (1,652,758)     (3,221,283)
                                                    ------------    ------------

  Net decrease in Partners' capital                   (5,249,083)     (1,938,971)
Partners' capital, beginning of period                66,368,741      80,499,049
                                                    ------------    ------------

Partners' capital, end of period                    $ 61,119,658    $ 78,560,078
                                                    ============   =============

Net asset value per Unit
  (55,653.6650 and 63,634.5374 Units outstanding
  at March 31, 2002 and 2001, respectively)         $   1,098.21    $   1,234.55
                                                    ============    ============

Net income (loss) per Unit of Limited Partnership
  Interest and General Partner Unit equivalent      $     (63.01)   $      20.60
                                                    ============    ============
</TABLE>

* Amounts reclassified for comparative purposes
See Notes to Financial Statements

                                        6


<PAGE>


                   Smith Barney Diversified Futures Fund L.P.
                          Notes to Financial Statements
                                 March 31, 2002
                                   (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.

     Smith  Barney  Futures  Management  LLC acts as the  general  partner  (the
"General  Partner") of the Partnership.  The  Partnership's  commodity broker is
Salomon Smith Barney Inc.  ("SSB").  SSB is an affiliate of the General Partner.
The  General  Partner is wholly  owned by Salomon  Smith  Barney  Holdings  Inc.
("SSBHI"), which is the sole owner of SSB. SSBHI is a wholly owned subsidiary of
Citigroup  Inc. As of March 31,  2002,  all trading  decisions  are made for the
Partnership  by  Campbell  &  Company,  Inc.,  Willowbridge  Associates,   Inc.,
Stonebrook  Structured  Products,  LLC,  Winton  Capital  Management  and Graham
Capital  Management L.P.  (collectively the "Advisors").  Effective February 15,
2002,  Dominion  Capital  Management,  Inc. was  terminated as an Advisor to the
Partnership.

     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 March  31,  2002 and  December  31,  2001 and the  results  of its
operations for the three months ended March 31, 2002 and 2001.  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, 2001.

     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.


                                        7
<PAGE>


                   Smith Barney Diversified Futures Fund L.P.
                          Notes to Financial Statements
                                 March 31, 2002
                                   (continued)
                                   (Unaudited)

2.   Financial Highlights:

     Changes in net asset value per Unit for the three months ended March 31,
2002 and 2001 were as follows:

                                          THREE-MONTHS ENDED
                                                MARCH 30,
                                       -----------------------
                                           2002          2001
                                        --------      ---------
<TABLE>
<CAPTION>
<S>                                        <C>             <C>
Net realized and unrealized
  gains(losses)                         $ (58.94)     $  30.97
Interest income                             3.67         11.73
Expenses                                   (7.74)       (22.10)
                                        ---------     ---------
Increase(decrease) for period             (63.01)        20.60
Net Asset Value per Unit,
 beginning of period                    1,161.22      1,213.95
                                       ---------      ---------
Net Asset Value per Unit,
 end of period                        $ 1,098.21    $ 1,234.55
                                       =========     =========

Ratios to average net assets:
Net income(loss) before incentive         (23.2)%        11.0%
Incentive fee                               0.0%         (4.4)%
                                        ---------     ---------
Net income (loss) after incentive
 fee                                      (23.2)%         6.6%
                                        =========     ---------

Operating expenses                          8.9%          9.4%
Incentive fees                              0.0%          4.4%
                                       ---------     ---------
Total expenses and incentive fee            8.9%         13.7%
                                        =========     =========

Total return:
Total return before incentive fee          (5.4)%         4.3%
Incentive fee                               0.0%         (2.6)%
                                        ---------     ---------
Total return after incentive fee           (5.4)%         1.7%
                                        =========     =========
</TABLE>

                                        8
<PAGE>


                   Smith Barney Diversified Futures Fund L.P.
                          Notes to Financial Statements
                                 March 31, 2002
                                   (Unaudited)
                                   (Continued)


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
activity  are  shown in the  statement  of income  and  expenses  and  partners'
capital.

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

     All of the  commodity  interests  owned  by the  Partnership  are  held for
trading  purposes.  The average  fair value  during the three and twelve  months
ended March 31, 2002 and December 31, 2001, based on a monthly calculation,  was
$2,693,875  and  $3,898,076,  respectively.  The fair  value of these  commodity
interests,  including  options  thereon,  if  applicable,  at March 31, 2002 and
December 31, 2001, was $4,030,868 and $3,552,911, respectively.

4.       Financial Instrument Risk:

     The Partnership is party to financial  instruments with  off-balance  sheet
risk,  including  derivative  financial  instruments  and  derivative  commodity
instruments,  in the normal course of its business.  These financial instruments
may  include  forwards,  futures  and  options,  whose  value is  based  upon an
underlying  asset,  index,  or reference  rate, and generally  represent  future
commitments  to exchange  currencies  or cash  flows,  to purchase or sell other
financial  instruments at specific terms at specified  future dates,  or, in the
case of derivative commodity instruments, to have a reasonable possibility to be
settled in cash, 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.  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.

                                        9
<PAGE>

                   Smith Barney Diversified Futures Fund L.P.
                          Notes to Financial Statements
                                 March 31, 2002
                                   (Unaudited)



     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  (depreciation) in
the  statement of financial  condition  and not  represented  by the contract or
notional  amounts of the  instruments.  The Partnership has  concentration  risk
because the sole counterparty or broker with respect to the Partnership's assets
is SSB.

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

     The  notional  or  contractual  amounts  of these  instruments,  while  not
recorded in the financial  statements,  reflect the extent of the  Partnership's
involvement  in these  instruments.  The  majority of these  instruments  mature
within  one  year  of  March  31,  2002.  However,  due  to  the  nature  of the
Partnership's business, these instruments may not be held to maturity.


                                       10
<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  (depreciation)  on open futures and forward
contracts,  commodity options 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
first quarter of 2002.

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

     For the three months ended March 31, 2002,  Partnership  capital  decreased
7.9% from  $66,368,741 to  $61,119,658.  This decrease was  attributable  to the
redemption of 1,502.7475 Units totaling $1,652,758, coupled with a net loss from
operations of  $3,598,802  which was  partially  offset by  additional  sales of
2.2005 Units totaling $2,477.  Persons  investing  $1,000,000 or more will pay a
reduced  brokerage  fee,  receiving the  differential  in the form of additional
Units.  Future  redemptions  can  impact  the  amount  of  funds  available  for
investments in commodity contract positions in subsequent periods.

Results of Operations

     During the  Partnership's  first  quarter of 2002,  the net asset value per
unit  decreased  5.4% from  $1,161.22 to $1,098.21 as compared to an increase of
1.7% in the first  quarter of 2001.  The  Partnership  experienced a net trading
loss before brokerage  commissions and related fees in the first quarter of 2002
of $2,422,652.  Losses were primarily  attributable  to the trading of commodity
contracts in currencies,  softs, metals, U.S. interest rates, grains and indices
and were partially  offset by gains in energy,  livestock and non-U.S.  interest
rates.  The  Partnership   experienced  a  net  trading  gain  before  brokerage
commissions  and related fees in the first quarter of 2001 of $3,142,347.  Gains
were primarily  attributable to the trading of commodity  futures in currencies,
indices, grains, metals, softs, livestock,  U.S. and non-U.S. interest rates and
were partially offset by losses in energy.



                                       11
<PAGE>

     Commodity futures markets are highly volatile. Broad price fluctuations and
rapid  inflation  increase  the risks  involved in commodity  trading,  but also
increase the possibility of profit. The profitability of the Partnership depends
on the  existence  of major  price  trends and the  ability of the  Advisors  to
identify  correctly  those price trends.  Price trends are  influenced by, among
other things, changing supply and demand relationships,  weather,  governmental,
agricultural,   commercial  and  trade  programs  and  policies,   national  and
international  political and economic  events and changes in interest  rates. To
the extent that market 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 on the monthly  average  30-day U.S.  Treasury  bill rate  determined
weekly by SSB 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.
Interest  income for the three months ended March 31, 2002 decreased by $560,737
as compared to the corresponding period in 2001. The decrease in interest income
is primarily  due to a decrease in interest  rates during the three months ended
March 31, 2002 as compared to 2001.

     Brokerage  commissions are calculated on the  Partnership's net asset value
as of the last day of each  month  and,  therefore,  vary  according  to 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
months  ended  March  31,  2002   decreased  by  $249,767  as  compared  to  the
corresponding period in 2001. The decrease in brokerage  commissions is due to a
decrease in assets during the three months ended March 31, 2002.

     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  months  ended  March 31,  2002  decreased  by $160,859 as compared to the
corresponding  period  in 2001.  The  decrease  in  management  fees is due to a
decrease in assets during the three months ended March 31, 2002.

     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.  There were no incentive
fees earned for the three months ending March 31, 2002. Trading  performance for
the three months ended March 31, 2001 resulted in incentive fees of $836,800.

                                       12
<PAGE>


Item 3.  Quantitative and Qualitative Disclosures of 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
included 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
intervals.  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.

                                       13
<PAGE>


     The following table indicates the trading Value at Risk associated with the
Partnership's  open positions by market  category as of March 31, 2002. All open
position  trading  risk  exposures  of the  Partnership  have been  included  in
calculating the figures set forth below. As of March 31, 2002, the Partnership's
total capitalization was approximately  $61,119,658.  There has been no material
change in the trading Value at Risk information previously disclosed in the Form
10-K for the year ended December 31, 2001.

                                 March 31, 2002
                                   (Unaudited)
<TABLE>
<CAPTION>
<S>                                 <C>         <C>              <C>         <C>

                                                                Year to Date
                                               % of Total       High          Low
Market Sector                Value at Risk   Capitalization  Value at Risk  Value at Risk
-----------------------------------------------------------------------------------------

Currencies:
 - Exchange Traded Contracts    $ 1,090,516     1.78%       $1,395,301      $811,429
 - OTC Contracts                  1,212,489     1.98%        1,440,741       999,738

Energy                            2,523,100     4.13%        2,523,100       809,900
Grains                              338,086     0.55%          372,831       189,990
Interest Rates U.S.                 912,400     1.49%          915,200       180,300
Interest Rates Non-U.S.           2,176,187     3.56%        2,248,759       549,484
Livestock                           119,600     0.20%          124,650        44,832
Metals:
 - Exchange Traded Contracts        435,600     0.71%          435,600        93,600
 - OTC Contracts                    538,800     0.88%          689,975        75,875
Softs                               376,599     0.62%          428,569       160,134
Indices                           2,326,207     3.81%        2,369,131       335,077
Lumber                                3,900     0.01%            9,200         1,300
                               ------------    ------
Total                           $12,053,484    19.72%
                               ============   =======
</TABLE>


                                       14
<PAGE>


                            PART II OTHER INFORMATION

Item 1.  Legal Proceedings - None

Item 2.   Changes in Securities and Use of Proceeds -

          Additional Units offered represent a reduced brokerage fee to existing
          limited  partners who invest  $1,000,000 or more. For the three months
          ended March 31,  2002,  there were  additional  sales of 2.2005  Units
          totaling $2,477. For the three months ended March 31, 2001, there were
          additional sales of 5.3306 Units totaling $6,321.

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

Item 3.   Defaults Upon Senior Securities - None

Item 4.   Submission of Matters to a Vote of Security Holders -   None

Item 5.   Other Information - None

Item 6.   (a) Exhibits - None

          (b) Reports on Form 8-K - None

                                       15
<PAGE>


                                   SIGNATURES

     Pursuant  to the  requirements  of Section  13 or 15 (d) of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

SMITH BARNEY DIVERSIFIED FUTURES FUND L.P.


By:        Smith Barney Futures Management LLC
           (General Partner)


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

Date:      5/13/02
           --------


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

By:        Smith Barney Futures Management LLC
           (General Partner)


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


Date:      5/13/02
           --------


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

Date: 5/13/02

                                       16