**UNITED STATES SECURITIESAND EXCHANGE COMMISSION**

**Washington, D.C.20549**

**FORM 10-Q**

**(Mark One)**

**x**** QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period endedMarch 31, 2007**

**OR**

**o**** TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934**

**For the transition period from                to                **

**Commission File Number 0-51087**

# **ML APPLETON FUTURESACCESS LLC**

(Exact Name of Registrant asspecified in its charter)
| **Delaware**                     | **20-1227880**                     |
|----------------------------------|------------------------------------|
| (State or other  jurisdiction of | (IRS Employer  Identification No.) |
| incorporation or  organization)  |                               |

 

**c/o Merrill Lynch AlternativeInvestments LLC**

**Princeton Corporate Campus**

**800 Scudders Mill Road -  Section 2G**

**Plainsboro,New Jersey 08536**

(Address ofprincipal executive offices)

(Zip Code)

**609-282-6091**

(Registrant’s telephone number, including area code)

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

Yes x     No o

Indicate by check mark whether the registrant is alarge accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer andlarge accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o  Acceleratedfiler o     Non-acceleratedfiler x

Indicate by check markwhether registrant is a shell company (as defined by Rule 12b-2 of the ExchangeAct).

Yes o     No x

Indicate by check mark whether the registrant hasfiled all documents and reports required to be filed by Sections 12, 13 or15(d) of the Securities Exchange Act of 1934 subsequent to the distribution ofsecurities under a plan confirmed by a court.

Yes o     No o

 

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**ML APPLETON FUTURESACCESS LLC**

QUARTERLY REPORT FOR MARCH 31, 2007 ON FORM 10-Q

Table of Contents
|          | ** **                                                                                  | **PAGE** |
|----------|---------------------------------------------------------------------------------------------|----------|
| PART  I  |                                                                                        |
|     |                                                                                        |
| Item 1.  | Financial Statements                                                                        | 2        |
|     |                                                                                        |     |
| Item 2.  | Management’s  Discussion and Analysis of Financial Condition and Results of Operations | 9        |
|     |                                                                                        |     |
| Item 3.  | Quantitative  and Qualitative Disclosures About Market Risk                                 | 10       |
|     |                                                                                        |     |
| Item 4.  | Controls and  Procedures                                                                    | 13       |
|     |                                                                                        |     |
| PART  II |                                                                                        |
|     |                                                                                        |
| Item 1.  | Legal Proceedings                                                                           | 14       |
|     |                                                                                        |     |
| Item 2.  | Unregistered  Sales of Equity Securities and Use of Proceeds                                | 15       |
|     |                                                                                        |     |
| Item 3.  | Defaults Upon  Senior Securities                                                            | 15       |
|     |                                                                                        |     |
| Item 4.  | Submission of  Matters to a Vote of Security Holders                                        | 15       |
|     |                                                                                        |     |
| Item 5.  | Other Information                                                                           | 15       |
|     |                                                                                        |     |
| Item 6.  | Exhibits and  Reports on Form 8-K                                                           | 16       |

 

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PART I - FINANCIALINFORMATION

Item1.    Financial Statements

ML APPLETONFUTURESACCESS LLC

(a Delaware Limited Liability Company)

STATEMENTS OF FINANCIAL CONDITION
| ** **                                                                       | ** ** | **March 31,** | ** ** | ** **            | ** ** |
|----------------------------------------------------------------------------------|------------|--------------------|------------|-----------------------|------------|
| ** **                                                                       | ** ** | **2007**           | ** ** | **December 31,** | ** ** |
| ** **                                                                       | ** ** | **(unaudited)**    | ** ** | **2006**              | ** ** |
| ** **                                                                       | ** ** | ** **         | ** ** | ** **            | ** ** |
| **ASSETS:**                                                                      | ** ** | ** **         | ** ** | ** **            | ** ** |
| Equity in commodity  futures trading accounts:                                   |       |               |       |                  |       |
| Cash (including  restricted cash of $2,126,316 for 2007 and $2,126,316 for 2006) |       | $                  | 86,865,275 |                  | $          | 79,765,050 |   |
| Net unrealized  profit (loss) on open contracts                                  |       | (8,245,490         | )          | 9,247,823             |       |
| Cash                                                                             |       | 127,253            |       | 236,003               |       |
| Accrued interest                                                                 |       | 365,260            |       | 333,978               |       |
|                                                                             |       |               |       |                  |       |
| **TOTAL  ASSETS**                                                                |       | $                  | 79,112,298 |                  | $          | 89,582,854 |   |
|                                                                             |       |               |       |                  |       |
| **LIABILITIES AND MEMBERS’  CAPITAL:**                                      | ** ** | ** **         | ** ** | ** **            | ** ** |
| LIABILITIES:                                                                     |       |               |       |                  |       |
| Management fee  payable                                                          |       | $                  | 131,326    |                  | $          | 147,853 |   |
| Sponsor fee  payable                                                             |       | 120,885            |       | 132,885               |       |
| Peformance fee  payable                                                          |       | —             |       | 2,400,245             |       |
| Redemptions  payable                                                             |       | 3,138,572          |       | 491,360               |       |
| Initial offering  costs payable                                                  |       | 20,414             |       | 22,866                |       |
| Other                                                                            |       | 316,952            |       | 281,485               |       |
|                                                                             |       |               |       |                  |       |
| Total  liabilities                                                               |       | 3,728,149          |       | 3,476,694             |       |
|                                                                             |       |               |       |                  |       |
| MEMBERS’ CAPITAL:                                                           |       |               |       |                  |       |
|  Sponsor’s Interest  (20,324 Units and 20,324 Units)                   |       | 19,356             |       | 22,374                |       |
|  Members’ Interest  (78,913,818 Units and 77,899,209 Units)            |       | 75,364,793         |       | 86,083,786            |       |
|                                                                             |       |               |       |                  |       |
| Total members’  capital                                                     |       | 75,384,149         |       | 86,106,160            |       |
|                                                                             |       |               |       |                  |       |
| **TOTAL LIABILITIES AND MEMBERS’  CAPITAL**                                 |       | $                  | 79,112,298 |                  | $          | 89,582,854 |   |

 

**NET ASSET VALUE PER UNIT (Note 2)**

(Based on 78,934,142 and 77,919,533 Units outstanding, unlimited Unitsauthorized)

See notes to financial statements.

2

----

 

STATEMENTS OF OPERATIONS

(unaudited)
| ** **                                   | ** ** | **For the three** | ** **  | **For the three** | ** ** |
|----------------------------------------------|------------|-----------------------------|-------------|-----------------------------|------------|
| ** **                                   | ** ** | **months ended**       | ** **  | **months ended**       | ** ** |
| ** **                                   | ** ** | **March 31,**          | ** **  | **March 31,**          | ** ** |
| ** **                                   | ** ** | **2007**                    | ** **  | **2006**                    | ** ** |
| **TRADING  LOSS:**                           | ** ** | ** **                  | ** **  | ** **                  | ** ** |
|                                         |       |                        |        |                        |       |
| Realized                                     |       | $                           | 5,193,324   |                        | $          | (2,142,583 | ) |
| Change in unrealized                         |       | (17,493,313                 | )           | (2,383,856                  | )          |
|                                         |       |                        |        |                        |       |
| Total trading loss                           |       | (12,299,989                 | )           | (4,526,439                  | )          |
|                                         |       |                        |        |                        |       |
| **INVESTMENT  INCOME:**                      | ** ** | ** **                  | ** **  | ** **                  | ** ** |
| Interest                                     |       | 1,125,214                   |        | 279,230                     |       |
|                                         |       |                        |        |                        |       |
| **EXPENSES:**                                | ** ** | ** **                  | ** **  | ** **                  | ** ** |
| Management fee                               |       | 423,106                     |        | 132,425                     |       |
| Sponsor fee                                  |       | 389,208                     |        | 140,910                     |       |
| Other                                        |       | 144,131                     |        | 33,666                      |       |
|                                         |       |                        |        |                        |       |
| Total expenses                               |       | 956,445                     |        | 307,001                     |       |
|                                         |       |                        |        |                        |       |
| **NET  INVESTMENT INCOME (LOSS)**            |       | 168,769                     |        | (27,771                     | )          |
|                                         |       |                        |        |                        |       |
| **NET  LOSS**                                |       | $                           | (12,131,220 | )                           | $          | (4,554,210 | ) |
|                                         |       |                        |        |                        |       |
| **NET  LOSS PER UNIT:**                      | ** ** | ** **                  | ** **  | ** **                  | ** ** |
| ** **                                   | ** ** | ** **                  | ** **  | ** **                  | ** ** |
| Weighted average number of Units outstanding |       |                        |        |                        |       |
| Class A                                      |       | 7,418,744                   |        | 2,762,898                   |       |
| Class C                                      |       | 52,827,355                  |        | 19,704,253                  |       |
| Class D                                      |       | 14,125,547                  |        | 1,346,164                   |       |
| Class I                                      |       | 6,065,230                   |        | 2,441,663                   |       |
|                                         |       |                        |        |                        |       |
| Net loss per weighted average Unit           |       |                        |        |                        |       |
| Class A                                      |       | $                           | (0.1555     | )                           | $          | (0.1676 | ) |
| Class C                                      |       | $                           | (0.1502     | )                           | $          | (0.1739 | ) |
| Class D                                      |       | $                           | (0.1504     | )                           | $          | (0.1594 | ) |
| Class I                                      |       | $                           | (0.1515     | )                           | $          | (0.1844 | ) |

 

See notes to financialstatements.

3

----

 

STATEMENTS OF CHANGES INMEMBERS’ CAPITAL

For the three monthsended March 31, 2007 and 2006 

(unaudited)
| ** **                 | ** ** | **Members’ Capital  December 31, 2005** | ** ** | **Subscriptions** | ** ** | **Redemptions** | ** ** | **Members’ Capital  March 31, 2006** | ** ** | **Members’ Capital  December 31, 2006** | ** ** | **Subscriptions** | ** ** | **Redemptions** | ** ** | **Members’ Capital  March 31, 2007** | ** ** |
|----------------------------|------------|-------------------------------------------------------------|------------|-------------------|------------|-----------------|------------|----------------------------------------------------------|------------|-------------------------------------------------------------|------------|-------------------|------------|-----------------|------------|----------------------------------------------------------|------------|
|                       |       |                                                        |       |              |       |            |       |                                                     |       |                                                        |       |              |       |            |       |                                                     |       |
| Class A                    |       | 2,015,034                                                   |       | 1,195,537         |       | (29,250         | )          | 3,181,321                                                |       | 6,711,299                                                   |       | 1,272,991         |       | (299,997        | )          | 7,684,293                                                |       |
| Class C                    |       | 14,289,916                                                  |       | 10,830,300        |       | (591,766        | )          | 24,528,450                                               |       | 51,147,894                                                  |       | 4,329,067         |       | (2,339,765      | )          | 53,137,196                                               |       |
| Class D                    |       | 375,509                                                     |       | 970,655           |       | —          |       | 1,346,164                                                |       | 14,081,577                                                  |       | 131,911           |       | (2,400,000      | )          | 11,813,488                                               |       |
| Class I                    |       | 1,627,486                                                   |       | 1,346,504         |       | (49,701         | )          | 2,924,289                                                |       | 5,958,439                                                   |       | 357,444           |       | (37,042         | )          | 6,278,841                                                |       |
|                       |       |                                                        |       |              |       |            |       |                                                     |       |                                                        |       |              |       |            |       |                                                     |       |
| Total Members’  Units |       | 18,307,945                                                  |       | 14,342,996        |       | (670,717        | )          | 31,980,224                                               |       | 77,899,209                                                  |       | 6,091,413         |       | (5,076,804      | )          | 78,913,818                                               |       |
|                       |       |                                                        |       |              |       |            |       |                                                     |       |                                                        |       |              |       |            |       |                                                     |       |
| Class A                    |       | 10,158                                                      |       | —            |       | —          |       | 10,158                                                   |       | 10,158                                                      |       | —            |       | —          |       | 10,158                                                   |       |
| Class C                    |       | 10,166                                                      |       | —            |       | —          |       | 10,166                                                   |       | 10,166                                                      |       | —            |       | —          |       | 10,166                                                   |       |
| Class D                    |       | —                                                      |       | —            |       | —          |       | —                                                   |       | —                                                      |       | —            |       | —          |       | —                                                   |       |
| Class I                    |       | —                                                      |       | —            |       | —          |       | —                                                   |       | —                                                      |       | —            |       | —          |       | —                                                   |       |
|                       |       |                                                        |       |              |       |            |       |                                                     |       |                                                        |       |              |       |            |       |                                                     |       |
| Total Sponsor’s Units |       | 20,324                                                      |       | —            |       | —          |       | 20,324                                                   |       | 20,324                                                      |       | —            |       | —          |       | 20,324                                                   |       |

 

See notes to financial statements.

 

4

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STATEMENTS OF CHANGES INMEMBERS’ CAPITAL

For the three monthsended March 31, 2007 and 2006 

(unaudited)
| ** **                     | ** ** | **Members’ Capital  December 31, 2005** | ** ** | **Subscriptions** | ** ** | **Redemptions** | ** ** | **Net Loss** | ** ** | **Members’ Capital  March 31, 2006** | ** ** | **Members’ Capital  December 31, 2006** | ** ** | **Subscriptions** | ** ** | **Redemptions** | ** ** | **Net Loss** | ** ** | **Members’ Capital  March 31, 2007** | ** ** |
|--------------------------------|------------|-------------------------------------------------------------|------------|-------------------|------------|-----------------|------------|-------------------|------------|----------------------------------------------------------|------------|-------------------------------------------------------------|------------|-------------------|------------|-----------------|------------|-------------------|------------|----------------------------------------------------------|------------|
|                           |       |                                                        |       |              |       |            |       |              |       |                                                     |       |                                                        |       |              |       |            |       |              |       |                                                     |       |
| Class A                        |       | $                                                           | 2,205,634  |              | $          | 1,263,929       |       | $                 | (32,251    | )                                                        | $          | (461,561                                                    | )          | $                 | 2,975,751  |            | $          | 7,453,230         |       | $                                                        | 1,399,115  |   | $ | (309,118 | ) | $ | (1,151,791 | ) | $ | 7,391,436 |   |
| Class C                        |       | 15,516,532                                                  |       | 11,197,546        |       | (585,933        | )          | (3,424,731        | )          | 22,703,414                                               |       | 55,775,159                                                  |       | 4,647,921         |       | (2,419,907      | )          | (7,932,669        | )          | 50,070,504                                               |       |
| Class D                        |       | 418,886                                                     |       | 1,084,999         |       | —          |       | (214,518          | )          | 1,289,367                                                |       | 16,184,797                                                  |       | 145,999           |       | (2,398,800      | )          | (2,125,042        | )          | 11,806,954                                               |       |
| Class I                        |       | 1,789,391                                                   |       | 1,457,120         |       | (46,788         | )          | (450,133          | )          | 2,749,590                                                |       | 6,670,600                                                   |       | 385,759           |       | (41,760         | )          | (918,700          | )          | 6,095,899                                                |       |
|                           |       |                                                        |       |              |       |            |       |              |       |                                                     |       |                                                        |       |              |       |            |       |              |       |                                                     |       |
| Total Members’  Interests |       | $                                                           | 19,930,443 |              | $          | 15,003,594      |       | $                 | (664,972   | )                                                        | $          | (4,550,943                                                  | )          | $                 | 29,718,122 |            | $          | 86,083,786        |       | $                                                        | 6,578,794  |   | $ | (5,169,585 | ) | $ | (12,128,202 | ) | $ | 75,364,793 |   |
|                           |       |                                                        |       |              |       |            |       |              |       |                                                     |       |                                                        |       |              |       |            |       |              |       |                                                     |       |
| Class A                        |       | $                                                           | 11,142     |              | $          | —          |       | $                 | —     |                                                     | $          | (1,627                                                      | )          | $                 | 9,515      |            | $          | 11,285            |       | $                                                        | —     |   | $ | — |   | $ | (1,511 | ) | $ | 9,774 |   |
| Class C                        |       | 11,061                                                      |       | —            |       | —          |       | (1,640            | )          | 9,421                                                    |       | 11,089                                                      |       | —            |       | —          |       | (1,507            | )          | 9,582                                                    |       |
| Class D                        |       | —                                                      |       | —            |       | —          |       | —            |       | —                                                   |       |                                                        |       | —            |       | —          |       | —            |       | —                                                   |       |
| Class I                        |       | —                                                      |       | —            |       | —          |       | —            |       | —                                                   |       |                                                        |       | —            |       | —          |       | —            |       | —                                                   |       |
|                           |       |                                                        |       |              |       |            |       |              |       |                                                     |       |                                                        |       |              |       |            |       |              |       |                                                     |       |
| Total Sponsor’s  Interest |       | $                                                           | 22,203     |              | $          | —          |       | $                 | —     |                                                     | $          | (3,267                                                      | )          | $                 | 18,936     |            | $          | 22,374            |       | $                                                        | —     |   | $ | — |   | $ | (3,018 | ) | $ | 19,356 |   |
| Total Members’ Capital    |       | $                                                           | 19,952,646 |              | $          | 15,003,594      |       | $                 | (664,972   | )                                                        | $          | (4,554,210                                                  | )          | $                 | 29,737,058 |            | $          | 86,106,160        |       | $                                                        | 6,578,794  |   | $ | (5,169,585 | ) | $ | (12,131,220 | ) | $ | 75,384,149 |   |

 

See notes to financialstatements.

5

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ML APPLETONFUTURESACCESS LLC

(a DelawareLimited Liability Company)

NOTES TO FINANCIALSTATEMENTS

(unaudited)

1.               SUMMARY OFSIGNIFICANT ACCOUNTING POLICIES

In the opinion of management, the financial statementscontain all adjustments necessary to present fairly the financial position ofML Appleton FuturesAccess LLC (the “Fund”) as of March 31, 2007, and theresults of its operations for the three months ended March 31, 2007 and2006.  However, the operating results forthe interim period may not be indicative of the results for the full year.

Certain information andfootnote disclosures normally included in annual financial statements preparedin accordance with accounting principles generally accepted in the UnitedStates of America (“US GAAP”) have been omitted.  It is suggested that these financialstatements be read in conjunction with the financial statements and notesthereto included in the Fund’s Annual Report on Form 10-K filed with theSecurities and Exchange Commission for the year ended December 31, 2006.

The preparation offinancial statements in conformity with US GAAP requires management to makeestimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expensesduring the reporting period.  Actualresults could differ from those estimates.

2.               NET ASSET VALUE PERUNIT

For financial reporting purposes, in conformity withUS GAAP, the Fund deducted the total initial offering costs at inception fromMembers’ Capital for purposes of determining Net Asset Value.  For all other purposes, including computingNet Asset Value for purposes of member subscription and redemption activity,such costs are amortized over 60 months. Consequently, the Net Asset Value andNet Asset Value per Unit of the different Classes for financial reportingpurposes and for all other purposes are as follows:

At March 31, 2007 the Net Asset Values of the different Classes ofUnits are as follows:

|            | ** ** | **Net Asset Value** | ** ** | ** **               | ** ** | **Net Asset Value per Unit** | ** ** |
|------------|------------|-------------------------------|------------|--------------------------|------------|--------------------------------------------------|------------|
| ** ** | ** ** | **All Other  Purposes**  | ** ** | **Financial  Reporting** | ** ** | **Number of  Units**                        | ** ** | **All Other  Purposes** | ** ** | **Financial  Reporting** | ** ** |
| Class A    |       | $                             | 7,403,608  |                     | 7,401,210  |                                             | 7,694,451  |   | $ | 0.9622 |   | $ | 0.9619 |   |
| Class C    |       | 50,096,376                    |       | 50,080,086               |       | 53,147,362                                       |       | $ | 0.9426 |   | $ | 0.9423 |   |
| Class D    |       | 11,806,956                    |       | 11,806,954               |       | 11,813,488                                       |       | $ | 0.9994 |   | $ | 0.9994 |   |
| Class I    |       | 6,097,625                     |       | 6,095,899                |       | 6,278,841                                        |       | $ | 0.9711 |   | $ | 0.9709 |   |
|       |       | $                             | 75,404,565 |                     | $          | 75,384,149                                       |       | 78,934,142 |   |   |   |   |   |
|            |            |                               |            |                          |            |                                                  |            |  |  |  |  |  |  |  |  |

 

6

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At December 31, 2006 the Net Asset Values of the different Classes ofUnits were:

|            | ** ** | **Net Asset Value** | ** ** | ** **               | ** ** | **Net Asset Value per Unit** | ** ** |
|------------|------------|-------------------------------|------------|--------------------------|------------|--------------------------------------------------|------------|
| ** ** | ** ** | **All Other  Purposes**  | ** ** | **Financial  Reporting** | ** ** | **Number of  Units**                        | ** ** | **All Other  Purposes** | ** ** | **Financial  Reporting** | ** ** |
| Class A    |       | $                             | 7,467,193  |                     | 7,464,515  |                                             | 6,721,457  |   | $ | 1.1109 |   | $ | 1.1106 |   |
| Class C    |       | 55,804,482                    |       | 55,786,248               |       | 51,158,060                                       |       | $ | 1.0908 |   | $ | 1.0905 |   |
| Class D    |       | 16,184,799                    |       | 16,184,797               |       | 14,081,577                                       |       | $ | 1.1494 |   | $ | 1.1494 |   |
| Class I    |       | 6,672,555                     |       | 6,670,600                |       | 5,958,439                                        |       | $ | 1.1198 |   | $ | 1.1195 |   |
|       |       | $                             | 86,129,029 |                     | $          | 86,106,160                                       |       | 77,919,533 |   |   |   |   |   |
|            |            |                               |            |                          |            |                                                  |            |  |  |  |  |  |  |  |  |

 

3.               MARKET AND CREDIT RISKS

The nature of this Fund has certain risks, whichcannot be presented on the financial statements.  The following summarizes some of those risks.

Market Risk

Derivative instruments involve varying degrees ofmarket risk.  Changes in the level orvolatility of interest rates, foreign currency exchange rates or the marketvalues of the financial instruments or commodities underlying such derivativeinstruments frequently result in changes in the Fund’s Net unrealized profit(loss) on such derivative instruments as reflected in the Statements ofFinancial Condition.  The Fund’s exposureto market risk is influenced by a number of factors, including therelationships among the derivative instruments held by the Fund as well as thevolatility and liquidity of the markets in which the derivative instruments aretraded. Investments in foreign markets may also entail legal and politicalrisks.

The Sponsor of the Fund,Merrill Lynch Alternative Investments (“MLAI”), has procedures in placeintended to control market risk exposure, although there can be no assurancethat they will, in fact, succeed in doing so. These procedures focus primarily on monitoring the trading of AppletonCapital Management (“Appleton”), the trading advisor, calculating the Net AssetValue of the Fund as of the close of business on each day and reviewingoutstanding positions for over-concentrations. While MLAI does not intervene in the markets to hedge or diversify theFund’s market exposure, MLAI may urge Appleton to reallocate positions in anattempt to avoid over-concentrations. However, such interventions are expected to be unusual.  It is expected that MLAI’s basic risk controlprocedures will consist of the ongoing process of advisor monitoring, with themarket risk controls being applied by Appleton.

Credit Risk

The risks associated with exchange-traded contractsare typically perceived to be less than those associated with over-the-counter(non-exchange-traded) transactions, because exchanges typically provideclearinghouse arrangements in which the collective credit (in some caseslimited in amount, in some cases not) of the members of the exchange is pledgedto support the financial integrity of the exchange.  In over-the-counter transactions, on theother hand, traders must rely solely on the credit of their respectiveindividual counterparties. Margins, which may be subject to loss in the eventof a default, are generally required in exchange trading, and counterpartiesmay also require margin in the over-the-counter markets.

The credit risk associated with these instruments fromcounterparty nonperformance is the Net unrealized profit (loss), if any,included in the Statements of Financial Condition. The Fund attempts

7

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to mitigate this risk by dealing exclusively withMerrill Lynch & Co. Inc. (“Merrill Lynch”) entities as clearing brokers.

The Fund, in its normal course of business, entersinto various contracts, with Merrill Lynch Pierce Fenner & Smith Inc. (“MLPF&S”)acting as its commodity broker.  Pursuantto the brokerage arrangement with MLPF&S (which includes a nettingarrangement), to the extent that such trading results in receivables from andpayables to MLPF&S, these receivables and payables are offset and reportedas a net receivable or payable and included in Equity in commodity futurestrading accounts on the Statements of Financial Condition.

4.               RECENT ACCOUNTING PRONOUNCEMENTS

In July 2006, the Financial Accounting StandardsBoard (“FASB”) issued Interpretation No. 48 (“FIN 48”), Accounting forUncertainty in Income Taxes — an interpretation of FASB Statement No. 109. FIN48 prescribes the minimum recognition threshold a tax position must meet inconnection with accounting for uncertainties in income tax positions taken orexpected to be taken by an entity before being measured and recognized in thefinancial statements. Adoption of FIN 48 is required for fiscal years beginningafter December 15, 2006. The Fund has evaluated its tax positions and has determinedthat the implementation of this pronouncement does not have a material impacton the Fund’s financial statements.

InSeptember 2006, the FASB issued Statement of Financial Accounting Standards No.157, Fair Value Measurements (“FAS 157”).  FAS 157 establishes acommon definition for fair value under accounting principles generally acceptedin the United States of America, establishes a framework for measuring fairvalue and expands disclosure requirements about such fair valuemeasurements.  FAS 157 is effective for fiscal years beginning afterNovember 15, 2007.  The Fund is currently evaluating the impact ofadopting FAS 157 on its financial statements.

8

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Item 2:            Management’s Discussion and Analysisof Financial Condition and Results of Operations

MONTH-END NET ASSET VALUEPER UNIT

(NON US GAAP)

MLAI believes that the Net Asset Value used tocalculate subscription and redemption value and to report performance toinvestors throughout the year is the most valuable to the Members of theFund.  Therefore, the charts belowreferencing Net Asset Value and performance measurements are based on the NetAsset Value for all other purposes, as discussed in Note 2 to the financialstatements.

Class A
|      | ** ** | **Jan.** | ** ** | **Feb.** | ** ** | **Mar.** | ** ** |
|------|------------|----------|------------|----------|------------|----------|------------|
| 2006 |       | $        | 1.1026     |     | $          | 1.0013   |       | $ | 0.9367 |   |
| 2007 |       | $        | 1.1381     |     | $          | 1.0669   |       | $ | 0.9622 |   |

 

Class C
|      | ** ** | **Jan.** | ** ** | **Feb.** | ** ** | **Mar.** | ** ** |
|------|------------|----------|------------|----------|------------|----------|------------|
| 2006 |       | $        | 1.0929     |     | $          | 0.9915   |       | $ | 0.9268 |   |
| 2007 |       | $        | 1.1165     |     | $          | 1.0460   |       | $ | 0.9426 |   |

 

Class D
|      | ** ** | **Jan.** | ** ** | **Feb.** | ** ** | **Mar.** | ** ** |
|------|------------|----------|------------|----------|------------|----------|------------|
| 2006 |       | $        | 1.1251     |     | $          | 1.0231   |       | $ | 0.9583 |   |
| 2007 |       | $        | 1.1789     |     | $          | 1.1068   |       | $ | 0.9994 |   |

 

Class I
|      | ** ** | **Jan.** | ** ** | **Feb.** | ** ** | **Mar.** | ** ** |
|------|------------|----------|------------|----------|------------|----------|------------|
| 2006 |       | $        | 1.1079     |     | $          | 1.0060   |       | $ | 0.9414 |   |
| 2007 |       | $        | 1.1476     |     | $          | 1.0764   |       | $ | 0.9711 |   |

 

PerformanceSummary

January 1, 2007 toMarch 31, 2007

The Fund posted anet loss trading in financials and currencies due to difficult tradingconditions for all currency market participants as some longstanding positionswere exited as the favorable conditions of the last quarter of 2006 experienceda very soft landing.

The beginning ofthe quarter proved to be uneventful from a performance point of view. Themiddle of the quarter was extremely difficult for the Fund with volatility andlongstanding trends coming to an abrupt halt, not just in currency markets butin global macro markets generally. The difficulties in the currency marketsexperienced mid-quarter continued into the end of the quarter with the majorforeign exchange market being subject to some harsh reversals and some choppyvolatility.

There appears tobe two opposite forces pulling on the U.S. dollar and the Japanese yen.However, the significant interest rate differential and the outlook for furtherrates hikes from the U.S. Federal Reserve would appear to support the U.S.dollar. Against this, there appears to be a reluctance to hold U.S. currencyagainst the backdrop of increasing deficits and the war in Iraq.

The traditionalpractice of holding a high yielding currency at the expense of a low-yield iscommonplace in the foreign exchange markets. The rationale is that in theabsence of any movement in the spot price,

9

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the currencymanager will benefit from the interest rate differential therein. Getting backto the specifics of March, it was a frustrating month in the sense that acurrency manager with more primitive risk management systems may have beenrewarded in the case of a position like the Euro/Japanese Yen. Having startedthe month at a level of 156.25, the cross continued to fall precipitously inthe first four days of the month. Ultimately, the market found supportmarginally below 151.00. Considering that the peak had been 159.50 in thelatter stages of the prior month, the total reversal in excess of 5% wasconsiderable, particularly when annualized volatility was being priced atbetween 6% and 7%. The model continued to react as it had done in the finaldays of February, by cutting positions due both to the increased volatility andalso the perceived change in overall direction of the market. The potential forfrustration, and the justification for the comment in the opening line of thisparagraph, stems from the fact that the next four weeks saw the marketgradually climb all the way back to 157.25 by the end of March. Thus, acomplete ignorance of volatility would have seen the portfolio hold onto theposition and make gains ultimately, albeit with extreme levels of profit andloss in the interim. Clearly, this approach is not in keeping with the Appletonrisk management credo. Portfolio volatility must be kept constant at all times.Therefore as the position in question continued to fall through successivelevels, the proprietary assessment of volatility crept up, with the consequencethat positions needed to be reduced in size in order to remain withinparameters.

January 1, 2006 toMarch 31, 2006

The Fund posted anet loss trading in financials and currencies due to difficult tradingconditions for all currency market participants as the market reversed somelong established trends and themes.

The maindifficulties continue to stem from the lack of direction in the Japaneseyen.  There appears to be two oppositeforces pulling on the U.S. dollar and the Japanese yen. However, thesignificant interest rate differential and the outlook for further rates hikesfrom the U.S. Federal Reserve would appear to support the U.S. dollar. Againstthis, there appears to be a reluctance to hold U.S. currency against thebackdrop of increasing deficits and the war in Iraq. As a result, the tradingcontinued to be trapped in the 116.00 to 119.00 range. Losses for the Fundcontinued through the end of the quarter due to the unwinding of the carrytrades across the board.

The traditionalpractice of holding a high yielding currency at the expense of a low-yield oneis commonplace in the foreign exchange markets. The rationale is that in theabsence of any movement in the spot price, the currency manager will benefitfrom the interest rate differential therein. Reflecting on the movement in the first quarter, or lack thereof, in themajor currency markets, Japanese yen, Euro, British pound and Canadian dollarshowed that the price action in that time period was a trend-follower’snightmare, with either little or no direction accompanied by patchy levels ofvolatility.

Item 3.   Quantitative and Qualitative Disclosures AboutMarket Risk

Introduction

TheFund is a speculative commodity pool. The market sensitive instruments held byit are acquired for speculative trading purposes and all or substantially allof the Fund’s assets are subject to the risk of trading loss.  Unlike an operating company, the risk ofmarket sensitive instruments is integral, not incidental, to the Fund’s mainline of business.

Market movementsresult in frequent changes in the fair market value of the Fund’s openpositions and, consequently, in its earnings and cash flow. The Fund’s marketrisk is influenced by a wide variety of factors, including the level andvolatility of interest rates, exchange rates, equity price levels, the marketvalue of financial instruments and contracts, the diversification effects amongthe Fund’s open positions and the liquidity of the markets in which it trades.

10

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The Fund, underthe direction of Appleton, rapidly acquires and liquidates both long and shortpositions in currency markets. Consequently, it is not possible to predict how a particular futuremarket scenario will affect performance, and the Fund’s past performance is notnecessarily indicative of its future results.

Value at Risk is ameasure of the maximum amount which the Fund could reasonably be expected tolose in a given market sector. However, the inherent uncertainty of the Fund’sspeculative trading and the recurrence in the markets traded by the Fund ofmarket movements far exceeding expectations could result in actual trading ornon-trading losses far beyond the indicated Value at Risk or the Fund’sexperience to date (i.e., “risk of ruin”). In light of the foregoing, as wellas the risks and uncertainties intrinsic to all future projections, thequantifications included in this section should not be considered to constituteany assurance or representation that the Fund’s losses in any market sectorwill be limited to Value at Risk or by the Fund’s attempts to manage its marketrisk.

Quantifying The Fund’sTrading Value At Risk

QuantitativeForward-Looking Statements

The followingquantitative disclosures regarding the Fund’s market risk exposures contain “forward-lookingstatement” within the meaning of the safe harbor form civil liability providedfor such statements by the Private Securities Litigation Reform Act of 1995(set forth in Section 27Aof the Securities Act of 1933 and Section 21E of theSecurities Exchange Act of 1934).  Allquantitative disclosures in this section are deemed to be forward-looking statementsfor purposes of the safe harbor, except for statements of historical fact.

The Fund’s riskexposure in the various market sectors traded by Appleton is quantified belowin terms of Value at Risk.  Due to theFund’s mark-to-market accounting, any loss in the fair value of the Fund’s openpositions is directly reflected in the Fund’s earnings (realized or unrealized)and cash flow (at least in the case of exchange-traded contracts in whichprofits and losses on open positions are settled daily through variationmargin).

Exchange maintenancemargin requirements have been used by the Fund as the measure of its Value atRisk.  Maintenance margin requirementsare set by exchanges to equal or exceed the maximum loss in the fair value ofany given contract incurred in 95%-99% of the one-day time periods included inthe historical sample (generally approximately one year) researched forpurposes of establishing margin levels. The maintenance margin levels are established by dealers and exchangesusing historical price studies as well as an assessment of current marketvolatility (including the implied volatility of the options on a given futurescontract) and economic fundamentals to provide a probabilistic estimate of themaximum expected near-term one-day price fluctuation.

100% positive correlation in the different positionsheld in each market risk category has been assumed.  Consequently, the margin requirementsapplicable to the open contracts have been aggregated to determine each tradingcategory’s aggregate Value at Risk.  Thediversification effects resulting from the fact that the Fund’s positions arerarely, if ever, 100% positively correlated have not been reflected.

11

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***TheFund’s Trading Value at Risk in Different Market Sectors***

The following table indicates the average, highest and lowesttrading Value at Risk associated with the Fund’s open positions by marketcategory for the fiscal period. For the three months ended March 31, 2007 andMarch 31, 2006, the Fund’s average month-end Net Asset Value for all otherpurposes was approximately $83,502,684 and $24,627,633, respectively.

March 31, 2007

 
|                        | ** ** | **Average**                 | ** ** | **% of Average** | ** ** | **Highest Value** | ** ** | **Lowest Value** | ** ** |
|------------------------|------------|-----------------------------|------------|----------------------------|------------|------------------------|------------|-----------------------|------------|
| **Market Sector** | ** ** | **Value at Risk** | ** ** | **Capitalization**         | ** ** | **At Risk**       | ** ** | **At Risk**      | ** ** |
|                   |       |                        |       |                       |       |                   |       |                  |       |
| Currencies             |       | $                           | 2,126,316  |                       | 2.55       | %                      | $          | 2,126,316             |       | $ | 2,126,316 |   |
|                   |       |                        |       |                       |       |                   |       |                  |       |
| TOTAL                  |       | $                           | 2,126,316  |                       | 2.55       | %                      | $          | 2,126,316             |       | $ | 2,126,316 |   |

 

March 31, 2006

 
|                        | ** ** | **Average**                 | ** ** | **% of Average** | ** ** | **Highest Value** | ** ** | **Lowest Value** | ** ** |
|------------------------|------------|-----------------------------|------------|----------------------------|------------|------------------------|------------|-----------------------|------------|
| **Market Sector** | ** ** | **Value at Risk** | ** ** | **Capitalization**         | ** ** | **At Risk**       | ** ** | **At Risk**      | ** ** |
|                   |       |                        |       |                       |       |                   |       |                  |       |
| Currencies             |       | $                           | 2,126,316  |                       | 8.63       | %                      | $          | 2,126,316             |       | $ | 2,126,316 |   |
|                   |       |                        |       |                       |       |                   |       |                  |       |
| TOTAL                  |       | $                           | 2,126,316  |                       | 8.63       | %                      | $          | 2,126,316             |       | $ | 2,126,316 |   |

 

MaterialLimitations on Value at Risk as an Assessment of Market Risk

The face value of the market sector instruments held by theFund is typically many times the applicable maintenance margin requirement(maintenance margin requirements generally ranging between approximately 1% and10% of contract face value) as well as many times the capitalization of theFund.  The magnitude of the Fund’s openpositions creates a “risk of ruin” not typically found in most other investmentvehicles.  Because of the size of itspositions, certain market conditions — unusual, but historically recurring fromtime to time — could cause the Fund to incur severe losses over a short periodof time.   The foregoing Value at Risktable — as well as the past performance of the Fund — gives no indication ofthis “risk of ruin.”

**Non-TradingRisk**

Foreign Currency Balances;Cash on Deposit with MLPF&S

The Fund has non-tradingmarket risk on its foreign cash balances not needed for margin. However, thesebalances (as well as the market risk they represent) are immaterial.

The Fund also hasnon-trading market risk on the approximately 90%-95% of its assets which are heldin cash at MLPF&S. The value of this cash is not interest rate sensitive,but there is cash flow risk in that if interest rates decline so will the cashflow generated on these monies. This cash flow risk is immaterial.

12

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Item 4. Controls and Procedures

MLAI, the Sponsorof ML Appleton FuturesAccess LLC (the “Fund”), with the participation of theSponsor’s Chief Executive Officer and the Chief Financial Officer, hasevaluated the effectiveness of the design and operation of its disclosurecontrols and procedures with respect to the Fund as of the end of the period ofthis quarterly report, and, based on this evaluation, has concluded that thesedisclosure controls and procedures are effective.  Additionally, there were no significantchanges in the Fund’s internal controls or in other factors that couldsignificantly affect these controls subsequent to the date of this evaluation,including any corrective actions with regard to significant deficiencies andmaterial weaknesses.

13

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PART II - OTHER INFORMATION

Item 1.                                     LegalProceedings

Therehave been no administrative, civil or criminal actions, whether pending orconcluded, against MLAI or Merrill Lynch or any of its individual principalsduring the past five years which would be considered “material” as that term isdefined in Section 4.24(l)(2) of the Regulations of the CFTC, except asdescribed below.

OnMay 21, 2002, MLPF&S, with no admission of wrongdoing or liability, agreedto pay $48 million to the State of New York, $50 million to the remainingstates, Washington, D.C. & Puerto Rico and $2 million to NASAA relating toan investigation conducted by the New York Attorney General concerning researchpractices.

OnMarch 19, 2003, Merrill Lynch & Co., Inc., the parent company and anapproved person of MLPF&S, consented to an injunctive action instituted bythe Securities and Exchange Commission (the “SEC”).  In its complaint, the SEC alleged that threeyears ago, in 1999, Merrill Lynch aided and abetted Enron Corp.’s (“Enron”)violations of Sections 10(b), 13(a), 13(b)(2) and 13(b)(5) of the Exchange Actand Rules 10b-5, 12b-20, 13a-1, 13a-3 and 13b2-1 thereunder, as a result ofMerrill Lynch engaging in certain year-end transactions designed and proposedby Enron.  Without admitting or denyingthe allegations, Merrill Lynch consented to the entry of an injunctionenjoining it from violating the above-referenced provisions, and agreed to paydisgorgement, penalties and interest in the amount of $80 million.  In its release announcing the settlement, theCommission acknowledged that in agreeing to resolve this matter on the termsdescribed above, the Commission took into account certain affirmative conductby Merrill Lynch.

InApril 2003, MLPF&S entered into a settlement with the SEC, the NationalAssociation of Securities Dealers (the “NASD”) and the New York Stock Exchange(the “NYSE”) as part of a joint settlement with the SEC, the NASD and the NYSEarising from a joint investigation by the SEC, the NASD and the NYSE intoresearch analysts conflicts of interests. Pursuant to the terms of the settlement with the SEC, NASD and NYSE,MLPF&S, without admitting or denying the allegations, consented to acensure.  In addition, MLPF&S agreedto a payment of (I) $100 million, which was offset in its entirety by the amountalready paid by MLPF&S in the related proceeding with the State of New Yorkand the other states (II) $75 million to fund the provision of independentresearch to investors; and (III) $25 million to promote investor education.  The payments for the provision of independentresearch to investors and to promote investor education are required to be madeover the course of the next five years. MLPF&S also agreed to comply with certain undertakings.

InMarch 2006, MLPF&S entered into a settlement with the SEC arising from aninvestigation related to MLPF&S’ retention and production of e-mail.  The SEC found that MLPF&S willfullyviolated Section 17(a) of the Exchange Act, and Rules 17a-4(b)(4) and 17a-4(j)thereunder.  Without admitting or denyingthe allegations, Merrill Lynch consented to the entry of an injunctionenjoining it from violating the above-referenced provisions, entered into anundertaking regarding its policies and procedures and agreed to pay a civilpenalty $2,500,000.

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Item 2.                                     UnregisteredSales of Equity Securities and Use of Proceeds

(a) Issuance to accredited investors pursuant toRegulation D and Section 4(6) under the Securities Act.  The selling agent of the following Class ofUnits was MLPF&S.

CLASS A

 

Subscription

 
| ** ** | ** ** | **Amount** | ** ** | **Units** | ** ** | **NAV (1)** | ** ** |
|------------|------------|------------|------------|-----------|------------|------------------|------------|
| Jan-07     |       | $          | 362,694    |      | 326,486    |             | $          | 1.1109 |   |
| Feb-07     |       | 425,110    |       | 373,526   |       | 1.1381           |       |
| Mar-07     |       | 611,311    |       | 572,979   |       | 1.0669           |       |
| Apr-07     |       | 198,897    |       | 206,711   |       | 0.9622           |       |
|            |            |            |            |           |            |                  |            |  |  |

 

CLASS C

 

Subscription

 
| ** ** | ** ** | **Amount** | ** ** | **Units** | ** ** | **NAV (1)** | ** ** |
|------------|------------|------------|------------|-----------|------------|------------------|------------|
| Jan-07     |       | $          | 986,982    |      | 904,824    |             | $          | 1.0908 |   |
| Feb-07     |       | 1,253,978  |       | 1,123,133 |       | 1.1165           |       |
| Mar-07     |       | 2,406,961  |       | 2,301,110 |       | 1.0460           |       |
| Apr-07     |       | 3,383,667  |       | 3,589,716 |       | 0.9426           |       |
|            |            |            |            |           |            |                  |            |  |  |

 

CLASS D

 

Subscription

 
| ** ** | ** ** | **Amount** | ** ** | **Units** | ** ** | **NAV (1)** | ** ** |
|------------|------------|------------|------------|-----------|------------|------------------|------------|
| Jan-07     |       | $          | —     |      | —     |             | $          | 1.1494 |   |
| Feb-07     |       | —     |       | —    |       | 1.1789           |       |
| Mar-07     |       | 145,999    |       | 131,911   |       | 1.1068           |       |
| Apr-07     |       | —     |       | —    |       | 0.9994           |       |
|            |            |            |            |           |            |                  |            |  |  |

 

CLASS I

 

Subscription

 
| ** ** | ** ** | **Amount** | ** ** | **Units** | ** ** | **NAV (1)** | ** ** |
|------------|------------|------------|------------|-----------|------------|------------------|------------|
| Jan-07     |       | $          | 9,949      |      | 8,885      |             | $          | 1.1198 |   |
| Feb-07     |       | 10,000     |       | 8,713     |       | 1.1476           |       |
| Mar-07     |       | 365,810    |       | 339,846   |       | 1.0764           |       |
| Apr-07     |       | 283,698    |       | 292,141   |       | 0.9711           |       |
|            |            |            |            |           |            |                  |            |  |  |

 

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(1) Net Asset Value forall other purposes

(b)   None.

(c)   None.

Item 3.                                     DefaultsUpon Senior Securities

None.

Item 4.                                     Submissionof Matters to a Vote of Security Holders

None.

Item 5.                                     OtherInformation

None.

15

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Item 6.                                     Exhibitsand Reports on Form 8-K.

(a)   Exhibits.

The following exhibits are incorporated by referenceor are filed herewith to this Quarterly Report on Form 10-Q:

31.01 and31.02               Rule13a-14(a)/15d-14(a) Certifications

Exhibit 31.01and 31.02:      Arefiled herewith.

32.01 and32.02               Section 1350Certifications

Exhibit 32.01and 32.02       Arefiled herewith.

(b) Reports on Form 8-K.

There were no reports on Form 8-K filed during the three months offiscal 2007.

16

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**SIGNATURES**

Pursuant to therequirements of the Securities Exchange Act of 1934, the registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto dulyauthorized.

 
|                | ML APPLETON FUTURESACCESS  LLC |
|---------------------|--------------------------------|
|                |                           |   |
|                |                           |   |
|                | By:                            | MERRILL LYNCH  ALTERNATIVE |   |
|                |                           | INVESTMENTS LLC |   |
|                |                           | (Manager) |   |
|                |                           |   |
|                |                           |   |
| Date: May 15,  2007 | By                             | /s/ BENJAMIN C. WESTON |   |
|                |                           | Benjamin C. Weston |
|                |                           | Chief Executive Officer and President  (Principal Executive Officer) |
|                |                           |   |
|                |                           |   |
| Date: May 15,  2007 |                           |   |
|                | By                             | /s/ BARBRA E. KOCSIS |   |
|                |                           | Barbra E. Kocsis |
|                |                           | Chief Financial  Officer |
|                |                           | (Principal  Financial and Accounting Officer) |
|                     |                                |  |  |  |  |

 

17

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