March 26, 2004


Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.  20549

     Re:  ProFutures Diversified Fund, L.P.
          Commission File #0-16898

Dear Sirs:

The filing contains Form 10-K for the year ended December 31, 2003.

                        Very truly yours,

                        ProFutures Diversified Fund, L.P.



                   SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C.  20549

                                 FORM 10-K

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

               For the fiscal year ended December 31, 2003
                            -----------------

                     Commission File number 0-16898
                                  -------


                    ProFutures Diversified Fund, L.P.
                    ---------------------------------
            (Exact name of Partnership as specified in charter)

     Delaware                                        75-2197831
-----------------------                 ------------------------------------
(State of organization)                (I.R.S. Employer Identification No.)



                              ProFutures, Inc.
                            11612 Bee Cave Road
                                  Suite 100
                            Austin, Texas  78738
                            --------------------
                  (Address of principal executive offices)

                       Partnership's telephone number

                               (800) 348-3601
                               --------------

Securities registered pursuant to Section 12(b) of the Act

   Title of each class.      Name of each exchange on which registered.
   --------------------      ------------------------------------------

      Securities registered pursuant to Section 12(g) of the Act

                    Units of Limited Partnership Interest
                    -------------------------------------
                               (Title of Class)

Indicate by check mark whether the Partnership (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 Partnership was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.

Yes [X]   No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporation by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.

[X]

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

Yes [ ]   No [X]

State the aggregate market value of the voting and non-voting stock held by
non-affiliates computed by reference to the price at which the stock was
last sold, or the average bid and asked prices of such stock, as of the last
business day of the registrant's most recently completed second fiscal
quarter.  (See definition of affiliate in Rule 405, 17 CFR 230.405.)


                               Not applicable


                    DOCUMENTS INCORPORATED BY REFERENCE
      Portions of the Partnership's Prospectus dated July 31, 1994 and
                    Supplement dated January 31, 1995
            Post-Effective Amendment No. 3 dated June 23, 1995
                     are incorporated by reference in
          Part I, Part II, Part III and Part IV of this Form 10-K


                                  PART I


Item 1.  Business.

General
-------

  ProFutures Diversified Fund, L.P. (the "Partnership") is a limited
  partnership organized on March 10, 1987, under the laws of the State of
  Delaware.  The business of the Partnership is the speculative trading of
  futures contracts and other financial instruments.  The Partnership commenced
  its business operation in  August 1987 under the name ATA Research/ProFutures
  Diversified Fund, L.P.  Effective June 1, 2000, the Partnership changed its
  name from ATA Research/  ProFutures Diversified Fund, L.P. to ProFutures
  Diversified Fund, L.P.  Effective October 1, 2000, ATA Research, Inc., the
  Partnership's co-general  partner, withdrew as co-general partner.
  ProFutures, Inc. remains as the sole General Partner.

  The office of the Partnership is located at 11612 Bee Cave Road, Suite 100,
  Austin, Texas 78738; the telephone number is (800) 348-3601.

Trading Activity
----------------

  ProFutures, Inc., a Texas corporation, is the General Partner of the
  Partnership which administers the business and affairs of the Partnership
  (exclusive of its trading operations).  Trading decisions are made by
  independent Commodity Trading Advisors chosen by the General Partner.  At
  December 31, 2003, there are five Commodity Trading Advisors:  Campbell &
  Company, Inc., Grinham Managed Funds Pty. Ltd., Conquest Capital LLC,
  Rhicon Currency Management, Winton Capital Management Limited (collectively,
  the "Advisors").  All advisory fees are paid by the Partnership.  Advisors
  may be changed from time to time by the General Partner.

  ProFutures, Inc. is registered with the CFTC as a Commodity Trading Advisor
  and Commodity Pool Operator and is a member of the NFA.  Gary D. Halbert is
  the Chairman and President, and principal stockholder, of ProFutures, Inc.,
  which was incorporated and began operation in December, 1984, and specializes
  in speculative managed futures accounts.

  The objective of the Partnership is to achieve appreciation of its assets
  through speculative trading of futures contracts and interbank forward
  currency contracts.  It ordinarily maintains open positions for a
  relatively short period of time.  The Partnership's ability to make a
  profit depends largely on the success of the Advisors in identifying
  market trends and price movements and buying or selling accordingly.

  The Partnership's Trading Policies are set forth on Page 59 of the
  Partnership's Prospectus dated July 31, 1994, which is incorporated herein
  by reference.

  Material changes in the Trading Policies described in the Prospectus must
  be approved by a vote of a majority of the outstanding Units of Limited
  Partnership Interest.  A change in contracts traded, however, will not be
  deemed to be a material change in the Trading Policies.

Trading Methods and Advisors
----------------------------

  Futures traders basically rely on either or both of two types of analysis
  for their trading decisions, "technical" or "fundamental".  Technical
  analysis uses the theory that a study of the markets will provide a means
  of anticipating price changes.  Technical analysis generally will include a
  study of actual daily, weekly and monthly price fluctuations, volume
  variations and changes in open interest, utilizing charts and/or computers
  for analysis of these items.  Fundamental analysis, on the other hand,
  relies on a study and evaluation of external factors which affect the price
  of a futures contract in order to predict prices.  These include political
  and economic events, weather, supply and demand and changes in interest
  rates.

  The respective Advisors' trading strategies attempt to detect trends in
  price movements for the commodities monitored by them.  They normally seek
  to establish positions and maintain such positions while the particular
  market moves in favor of the position and to exit the particular market
  and/or establish reverse positions when the favorable trend either reverses
  or does not materialize.  These trading strategies are not normally
  successful if a particular market is moving in an erratic and non-trending
  manner.

  Because of the nature of the commodities markets, prices frequently appear
  to be trending when a particular market is, in fact, without a trend.  In
  addition, the trading strategies may identify a particular market as
  trending favorably to a position even though actual market performance
  thereafter is the reverse of the trend identified.

  None of the Advisors or their respective principals own any Units of the
  Partnership.  The Partnership's Advisors are independent Commodity Trading
  Advisors and are not affiliated with the General Partner; however, they
  also may be Advisors to other commodity pools with which the General Partner
  is currently associated and may own an interest in those pools.  Each Advisor
  is registered with the CFTC and is a member in such capacity with the NFA.
  Because of their confidential nature, proprietary trading records of the
  Advisors and their respective principals are not available for inspection
  by the Limited Partners of the Partnership.

Fees, Compensation and Expenses
-------------------------------

  The Partnership pays the General Partner a monthly management fee of
  1/4 of 1% (3% annually) of month-end Net Asset Value.

  Kenmar Global Strategies Inc. (Kenmar) assists the General Partner in making
  decisions about which commodity trading advisors to hire, the allocations
  among the advisors and the day-to-day monitoring and risk management of the
  Partnership's trading activities.  Kenmar receives a monthly management fee
  of 1/12 of 1% (1% annually) of month-end Net Asset Value.

  The current Advisors receive management fees ranging from 1% to 2% annually
  of Allocated Net Asset Value (as defined in the trading advisory contracts).
  Each of the Advisors receives a quarterly incentive fee ranging from 20% to
  25% of Trading Profits (as defined).  The quarterly incentive fees are
  payable only on cumulative profits achieved by each Advisor.  For example, if
  one of the Advisors to the Partnership experiences a loss after an incentive
  fee payment is made, that Advisor retains such payments but receives no
  further incentive fees until such Advisor has recovered the loss and then
  generated subsequent Trading Profits since the last incentive fee was paid
  such Advisor.  An incentive fee may be paid to one Advisor but the
  Partnership may experience no change or a decline in its Net Asset Value
  because of the performance of another Advisor.  The General Partner may
  allocate or reallocate the Partnership's assets at any time among the current
  Advisors or any others that may be selected.  Upon termination of an
  Advisor's contract, or at any other time in the discretion of the General
  Partner, the Partnership may employ other advisors whose compensation may be
  calculated without regard to the losses which may be incurred by the present
  Advisors.  Similarly, the Partnership may renew its relationship with each
  Advisor on the same or different terms.

  Notional Funding Note:  As of December 31, 2003, the Partnership has
  allocated notional funds to Advisors equal to approximately 37% of the
  Partnership's cash and/or other margin - qualified assets.  Of course, this
  percentage may be higher or lower over any given 12 month period.  The
  management fees paid to an Advisor, if any, are a percentage of the nominal
  account size of the account if an account had been notionally funded.  The
  nominal account size is equal to a specific amount of funds initially
  allocated to an Advisor which increases by profits and decreases by losses
  in the account, but not by additions to or withdrawals of actual funds from
  the account.  Some, but not all, Advisors are expected to be allocated
  notional funds, and not all of the Advisors allocated notional funds are
  expected to be paid management fees.  Further, the amount of cash and/or
  other margin-qualified assets in an account managed by an Advisor will vary
  greatly at various times in the course of the Partnership's business,
  depending on the General Partner's general allocation strategy and
  pertinent margin requirements for the trading strategies undertaken by an
  Advisor.

  The Partnership is obligated to pay its periodic operating expenses,
  consisting substantially of preparation of the limited partners' tax return
  information, filing and recording charges, legal, printing, accounting and
  auditing fees plus non-recurring expenses. Those periodic recurring
  expenses are estimated at approximately .5% of the Partnership's average
  annual Net Asset Value.  Non-recurring expenses, not included within these
  estimates, include expenses associated with significant litigation
  including, but not limited to, class action suits, suits involving the
  indemnification provisions of the Agreement of the Limited Partnership or
  any other agreement to which the Partnership is a party; by their nature,
  the dollar amount of non-recurring expenses cannot be estimated.

  Additional descriptions and definitions are set forth in "Fees,
  Compensation and Expenses" on Pages 30-35 of the Partnership's Prospectus,
  dated July 31, 1994, which is incorporated herein by reference.

Brokerage Arrangements
----------------------

  The General Partner, among other responsibilities, has the duty to select the
  brokerage firms through which the Partnership's trading will be executed.
  The General Partner has selected ABN AMRO Incorporated (ABN) as the
  Partnership's primary clearing broker.  ABN is registered with the CFTC as a
  Futures Commission Merchant.  It is a member of the NFA and a clearing member
  of the Chicago Board of Trade and the International Monetary Market of the
  Chicago Mercantile Exchange.

Financial Information About Industry Segments
---------------------------------------------

  The Partnership operates in only one industry segment, that of the
  speculative trading of futures contracts and other financial instruments.
  See also "Description of Futures Trading", pages 64 to 65 of the Prospectus
  dated July 31, 1994, which is incorporated herein by reference.

Regulation
----------

  The U.S. futures markets are regulated under the Commodity Exchange Act
  (CEA), which is administered by the Commodity Futures Trading Commission
  (CFTC), a federal agency created in 1974.  The CFTC licenses and regulates
  commodity exchanges, commodity brokerage firms (referred to in the industry
  as "Futures Commission Merchants"), Commodity Pool Operators, Commodity
  Trading Advisors and others.  The General Partner is registered with the
  CFTC as a Commodity Pool Operator and each Advisor is registered as a
  Commodity Trading Advisor.

  Futures professionals such as the General Partner and the Advisors are
  also regulated by the National Futures Association (NFA), a self-regulatory
  organization for the futures industry that supervises the dealings between
  futures professionals and their customers.  If the pertinent CFTC
  registrations or NFA memberships were to lapse, be suspended or be revoked,
  the General Partner would be unable to act as the Partnership's Commodity
  Pool Operator, and the respective Advisors as Commodity Trading Advisors,
  to the Partnership.

  The CFTC has adopted disclosure, reporting and recordkeeping requirements
  for Commodity Pool Operators (such as the General Partner) and disclosure
  and recordkeeping requirements for Commodity Trading Advisors.  The
  reporting rules require pool operators to furnish to the participants in
  their pools a monthly statement of account, showing the pool's income or
  loss and change in Net Asset Value and an annual financial report, audited
  by an independent certified public accountant.

  The CFTC and the exchanges have pervasive powers over the futures markets,
  including the emergency power to suspend trading and order trading for
  liquidation only (i.e., traders may liquidate existing positions but not
  establish new positions).  The exercise of such powers could adversely
  affect the Partnership's trading.

Competition
-----------

  The Partnership may experience increased competition for the same futures or
  option contracts.  The Advisors may recommend similar or identical trades
  to other accounts which they may manage; thus, the Partnership may be in
  competition with such accounts for the same or similar positions.  Such
  competition may also increase due to the widespread utilization of
  computerized trend-based trading methods similar to the methods used by
  some of the Advisors.  This Partnership may also compete with other funds
  organized by the General Partner.

Financial Information About Foreign and Domestic Operations
-----------------------------------------------------------

  The Partnership does not expect to engage in any operations in foreign
  countries nor does it expect to earn any portion of the Partnership's
  revenue from customers in foreign countries.

Available Information
---------------------

  The Partnership is an electronic filer with the Securities and Exchange
  Commission (SEC).  The SEC maintains an Internet Site that contains reports,
  proxy and information statements, and other information regarding issuers
  that file electronically with the SEC (http://www.sec.gov).  The General
  Partner will voluntarily provide electronic or paper copies of this filing
  free of charge upon request.


Item 2.  Properties.

  The Partnership does not own or lease any real property.  The General
  Partner currently provides all necessary office space at no additional
  charge to the Partnership.


Item 3.  Legal Proceedings.

  The Partnership is not aware of any material pending legal proceedings to
  which it is a party or to which any of its assets are subject.


Item 4.  Submission of Matters to a Vote of Security Holders.

  During the fourth quarter of the fiscal year ended December 31, 2003, no
  matters were submitted to a vote of the holders of Units of Limited
  Partnership Interest ("Units") through the solicitation of proxies or
  otherwise.


                                 PART II


Item 5.  Market for Partnership's Securities and Related Security Holder
         Matters.

  The Partnership has filed a registration statement with the Securities and
  Exchange Commission for the sale of up to $38,547,364 in Units of Limited
  Partnership Interest.  Such registration statement became effective as of
  July 31, 1994.  This offering was extended on January 31, 1995 and
  continued through April 30, 1995.  On June 23, 1995, Post-Effective
  Amendment No. 3 was filed to deregister $20,721,920 of Units of Limited
  Partnership Interest.  As of December 31, 2003, a total of 12,941 Units
  are outstanding and held by 956 Unit holders, including 225 Units held by
  the General Partner and its principals.  During the calendar year 2003, a
  total of 1,188 Units were redeemed.

  The General Partner has sole discretion in determining what distributions,
  if any, the Partnership will make to its Unit holders.  The General Partner
  made no distributions as of December 31, 2003, or as of the date hereof.  A
  Limited Partner may request and receive redemption of Units subject to
  restrictions in the limited partnership agreement.


Item 6.  Selected Financial Data.

  Following is a summary of certain financial information for the Partnership
  for the calendar years 2003, 2002, 2001, 2000 and 1999.

                                                      2003
                                                      ----

Realized Gains (Losses)                          $  8,453,501
Change in Unrealized
  Gains (Losses) on
  Open Contracts                                      285,932
Interest Income                                       352,209
Management Fees                                     2,130,952
Incentive Fees                                      1,456,891
Net Income (loss)                                   4,462,334
General Partner Capital                               584,564
Limited Partner Capital                            33,041,117
Partnership Capital                                33,625,681
Net Asset Value per General
  and Limited Partner Unit
  at End of Year                                     2,598.48
Net Income (loss) per Unit*                            326.46

                                                      2002
                                                      ----

Realized Gains (Losses)                          $  6,268,491
Change in Unrealized
  Gains (Losses) on
  Open Contracts                                      659,039
Interest Income                                       510,306
Management Fees                                     2,065,751
Incentive Fees                                      1,104,271
Net Income (loss)                                   3,057,896
General Partner Capital                               511,577
Limited Partner Capital                            31,618,764
Partnership Capital                                32,130,341
Net Asset Value per General
  and Limited Partner Unit
  at End of Year                                     2,274.04
Net Income (loss) per Unit*                            201.95

                                                      2001
                                                      ----

Realized Gains (Losses)                          $  2,875,708
Change in Unrealized
  Gains (Losses) on
  Open Contracts                                      365,300
Interest Income                                     1,309,764
Management Fees                                     2,385,535
Incentive Fees                                        656,540
Net Income (loss)                                     201,219
General Partner Capital                               458,665
Limited Partner Capital                            33,325,130
Partnership Capital                                33,783,795
Net Asset Value per General
  and Limited Partner Unit
  at End of Year                                     2,038.84
Net Income (loss) per Unit*                             11.05

                                                      2000
                                                      ----

Realized Gains (Losses)                          $ (8,292,461)
Change in Unrealized
  Gains (Losses) on
  Open Contracts                                   (2,089,239)
Interest Income                                     3,045,014
Management Fees                                     2,906,733
Incentive Fees                                      1,049,494
Net Income (loss)                                 (13,427,731)
General Partner Capital                               455,817
Limited Partner Capital                            40,014,820
Partnership Capital                                40,470,637
Net Asset Value per General
  and Limited Partner Unit
  at End of Year                                     2,026.18
Net Income (loss) per Unit*                           (548.00)

                                                      1999
                                                      ----

Realized Gains                                   $  1,352,473
Change in Unrealized
  Gains (Losses) on
  Open Contracts                                    2,464,741
Interest Income                                     3,582,696
Management Fees                                     4,167,022
Incentive Fees                                      1,765,210
Net Income (loss)                                  (1,300,309)
General Partner Capital                             1,075,348
Limited Partner Capital                            69,348,028
Partnership Capital                                70,423,376
Net Asset Value per General
  and Limited Partner Unit
  at End of Year                                     2,515.07
Net Income (loss) per Unit*                            (41.89)


---------------
* based on weighted average units outstanding during the year.


Item 7.  Management's Discussion and Analysis of Financial Condition and
         Results of Operations.

  The Partnership commenced trading on August 3, 1987.  The success of the
  Partnership is dependent on the ability of the Advisors to generate profits
  through speculative trading sufficient to produce substantial capital
  appreciation after payment of all fees and expenses.  Future results will
  depend in large part upon the futures markets in general, the performance
  of the Advisors for the Partnership and the amount of redemptions and
  changes in interest rates.  Due to the highly leveraged nature of futures
  trading, small price movements may result in substantial losses.  Because
  of the nature of these factors and their interaction, it is impossible to
  predict future operating results.

  Critical Accounting Policies

  The preparation of financial statements in conformity with accounting
  principles generally accepted in the United States requires management to
  make estimates and assumptions that affect the reported amounts of assets and
  liabilities and disclosures of contingent assets and liabilities at the date
  of the financial statements and the reported amounts of income and expense
  during the reporting period.  Management believes that the estimates utilized
  in preparing the financial statements are reasonable and prudent; however,
  actual results could differ from those estimates.  The Partnership's
  significant accounting policies are described in detail in Note 1 to the
  Financial Statements.

  The Partnership records all investments at fair value in its financial
  statements, with changes in fair value reported as a component of realized
  and change in unrealized trading gain (loss) in the Statements of Operations.
  Generally, fair values are based on market prices; however, in certain
  circumstances, estimates are involved in determining fair value in the
  absence of an active market closing price (e.g. swap and forward contracts
  which are traded in the inter-bank market).

  (a)  Liquidity.  Substantially all of the Partnership's assets are held
  in cash or cash equivalents.  There are no restrictions on the liquidity
  of these assets except for amounts on deposit with the broker needed to
  meet margin requirements on open futures contracts.

  Most United States exchanges (but generally not foreign exchanges, or banks
  or broker-dealer firms in the case of foreign currency forward contracts)
  limit by regulation the amount of fluctuation limits. The daily limits
  establish the maximum amount the price of a futures contract may vary
  either up or down from the previous day's settlement price at the end of
  the trading session.  Once the "daily limit" has been reached in a
  particular commodity, no trades may be made at a price beyond the limit.
  Positions in the commodity can then be taken or liquidated only if traders
  are willing to effect trades at or within the limit during the period for
  trading on such day.  Because the "daily limit" rule only governs price
  movement for a particular trading day, it does not limit losses.  The rule
  may, in fact, substantially increase losses because it may prevent the
  liquidation of unfavorable positions.  Futures prices have occasionally
  moved the daily limit for several consecutive trading days, and thereby
  prevented prompt liquidation of futures positions on one side of the
  market, subjecting those futures traders involved to substantial losses.

  Liquidity will be of concern to the Partnership primarily in that the futures
  markets in which the Advisors take positions may have periods in which
  illiquidity makes it impossible or economically undesirable to execute
  trades which its respective trading strategy would otherwise suggest.
  Other than in respect of the functioning of the markets in which it trades,
  liquidity will be of little relevance to the operation of the Partnership
  except insofar as the General Partner is relatively thinly capitalized.
  Nonetheless, the General Partner believes it has sufficient funding to
  meet both its capital contribution and net worth requirements based on
  capital contributions from the principals of the General Partner, or
  alternative funding sources, including the stock subscription from the
  Clearing Broker to ProFutures, Inc.

  (b)  Capital Resources.  The Partnership's initial offering and sale of Units
  of Limited Partnership Interest commenced on May 27, 1987 and ended on
  July 31, 1987 after having sold $6,130,568 of units at the initial
  offering price of $1,000.  The Partnership commenced trading August 3,
  1987.  The Partnership continued offering Units through February 29,
  1988.  Thereafter additional offerings of the Partnership's Units of
  Limited Partnership Interest occurred on April 15, 1988, August 24,
  1991, May 14, 1992, November 30, 1992, August 30, 1993 and July 31,
  1994.  The offering effective July 31, 1994 was extended on January 31,
  1995 and continued through April 30, 1995.  In June 1995, Post-Effective
  Amendment No. 3 was filed to deregister the Partnership's remaining
  $20,721,920 of Units of Limited Partnership Interest.

  Since the Partnership's business is the purchase and sale of various
  commodity interests, it will make few, if any, capital expenditures.


  (c)  Results of Operations.  The Partnership's net income (loss) for each
  quarter of the years ended December 31, 2003 and 2002 consisted of the
  following:

                           1st Qtr.      2nd Qtr.      3rd Qtr.      4th Qtr.
                             2003          2003          2003          2003
                           --------      --------      --------      --------

    Gain (loss) from
      trading            $  3,863,024  $   758,956   $  (211,935)  $ 1,502,383
    Net investment (loss)  (1,178,000)    (578,844)     (529,808)   (1,119,704)
    Net income (loss)       2,685,024      180,112      (741,743)    2,338,941

    Net income (loss)
      per Unit                 191.41        13.07        (54.65)       175.93
    Increase (decrease)
      in Net Asset Value
      per Unit                 189.53        12.46        (53.94)       176.39

    Net Asset Value per
      Unit at end of
      period                 2,463.57     2,476.03      2,422.09      2,598.48


                           1st Qtr.      2nd Qtr.      3rd Qtr.      4th Qtr.
                             2002          2002          2002          2002
                           --------      --------      --------      --------

    Gain (loss) from
      trading            $ (2,299,482) $ 1,989,666   $ 6,153,185   $    36,534
    Net investment (loss)    (420,873)    (448,058)   (1,371,286)     (581,790)
    Net income (loss)      (2,720,355)   1,541,608     4,781,899      (545,256)

    Net income (loss)
      per Unit                (167.32)      100.35        327.60        (37.99)
    Increase (decrease)
      in Net Asset Value
      per Unit                (162.38)      105.99        327.39        (35.80)

    Net Asset Value per
      Unit at end of
      period                 1,876.46     1,982.45      2,309.84      2,274.04


  Due to the speculative nature of trading commodity interests, the
  Partnership's income or loss from operations may vary widely from period to
  period.  Management cannot predict whether the Partnership's future Net Asset
  Value per Unit will increase or experience a decline.

  PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.


  Year Ended December 31, 2003
  ----------------------------

  2003 had net income of $4,462,334 or $326.46 per Unit.  At December 31, 2003,
  partners' capital totaled $33,625,681, a net increase of $1,495,340 from
  December 31, 2002 including capital redemptions of $2,966,994.  Net Asset
  Value per Unit at December 31, 2003 amounted to $2,598.48, as compared to
  $2,274.04 at December 31, 2002, an increase of 14.27%.

  The net income for 2003 resulted primarily from trading gains in the foreign
  currencies, agricultural, energy, equities and metals markets, partially
  offset by losses in the interest rates markets.

  Fourth Quarter 2003
  -------------------

  The economy continued to grow in the fourth quarter, though at a slower pace
  than the third quarter.  The futures markets were very volatile, with many
  trends underway that the traders were able to capitalize on.

  The Partnership had a gain of 2.99% in October 2003.  The Partnership had
  large gains in foreign currencies and stock indexes, with smaller gains in
  agricultural commodities and base metals.  There were some losses in interest
  rates and energy.

  In November 2003, the Partnership had a loss of 1.07%.  The Partnership had
  small gains in foreign currencies and precious metals.  However, there were
  losses in most of the other sectors that offset these gains.

  In December 2003, the Partnership had a gain of 5.29%.  The Partnership had
  gains in foreign currencies and precious metals.  There were small losses in
  the other sectors.

  The Partnership had a total return of 7.28% for the quarter and 14.27% for
  the year ended December 31, 2003.  For the fourth quarter 2003, the majority
  of the Partnership's trading gains were in foreign currencies and the largest
  loss was in interest rates.

  Third Quarter 2003
  ------------------

  The economy continued to improve in the third quarter.  The equity markets
  were mostly up.  Most analysts expect the economy to continue to improve
  for the remainder of the year.

  The Partnership had a loss of 3.46% in July.  The Partnership had losses
  in bonds and other interest rate contracts and foreign currencies.  There
  were gains in stock indexes, metals, energy and certain agricultural
  commodities.

  In August 2003, the Partnership had a gain of 1.22%.  The Partnership had
  gains in foreign currencies, energy, stock indexes and metals.  There were
  losses in bonds and certain agricultural commodities.

  In September 2003, the Partnership had a small gain of 0.10%.  The
  Partnership had gains in foreign currencies, which were offset by losses
  in energy.  The other sectors were generally flat.

  The Partnership had a total return of (2.18)% for the quarter and 6.51%
  for the nine months ended September 30, 2003.  For the third quarter 2003,
  the majority of the Partnership's trading gains were in stock indexes and
  the largest loss was in energy.  In September 2003, two new traders,
  Rhicon Currency and Conquest Capital, were added to the Partnership.

  Second Quarter 2003
  -------------------

  Futures were somewhat more stable in the second quarter as compared to the
  first.  The war with Iraq ended, and the stock markets began a steady
  climb that lasted through the end of the quarter.

  In April 2003, the Partnership had a gain of 0.11%.  There were gains in
  currencies, primarily because of the falling dollar.  However, these gains
  were mostly offset by losses in nearly all of the other sectors.

  In May 2003, the Partnership gained 4.95%.  The Partnership had gains in
  interest rates, especially bonds.  There were also gains in currencies,
  metals, and stock indexes.  There were some losses in energy and certain
  agricultural commodities.

  In June 2003, the Partnership has a loss of 4.34%.  There were losses in
  interest rates, especially bonds.  There were also losses in energy,
  metals and certain agricultural commodities.  Most other sectors were
  basically flat.

  At the beginning of June 2003, notional funds were added back to trading,
  as the leverage was increased back to 150%.  This is about the same level
  as before the notional funds were temporarily eliminated several months ago.

  The Partnership had a total return of 0.51% for the quarter and 8.88% for
  the six months ended June 30, 2003.  For the second quarter 2003, the
  majority of the Partnership's trading gains were in foreign currencies and
  the largest loss was in energy futures.

  First Quarter 2003
  ------------------

  The futures markets were quite volatile in the first quarter of 2003.  The
  looming war with Iraq caused energy prices to skyrocket.  Many other
  markets were choppy due to this uncertainty.  Consumer confidence dropped
  dramatically.  The traders were able to capitalize on the volatility in
  the markets.

  In January 2003, the Partnership gained 5.32%.  There were large gains in
  foreign currencies and energy, with smaller gains in interest rates,
  precious and base metals and stock indexes.  There were some small losses
  in grains.

  In February 2003 , the Partnership gained 8.19%.  There were large gains
  in energy, with smaller gains in interest rates and currencies.  There
  were some small losses in stock indexes and metals.  Most other sectors
  were basically flat.

  In February 2003, the Partnership eliminated most of its notional funding
  and traded at near 100% of assets, rather than 150% of assets (with
  notional funding).  One advisor, Campbell & Company, also scaled back
  their open positions.  These changes were made due to the uncertainty of
  the pending war with Iraq.

  In March 2003, the Partnership lost 4.93%. There were large losses in most
  sectors, especially energy, after oil prices dropped.  Some of the gains
  from the previous two months were reversed in March 2003.

  Also in March 2003, Quay Capital Management had a change of its top
  management, resulting in the departure of one of the principals
  responsible for trading the account.  As a result, they were terminated as
  one of the Advisors in the Fund.  No replacement Advisor was selected by
  month-end.

  Overall, the Partnership had a total return of 8.33% for the three months
  ended March 31, 2003.  The majority of the Partnership's trading gains
  were in energy and foreign currencies and the largest loss was in stock
  index futures.

  Year Ended December 31, 2002
  ----------------------------

  2002 had net income of $3,057,896 or $201.95 per Unit.  At December 31, 2002,
  partners' capital totaled $32,130,341, a net decrease of $1,653,454 from
  December 31, 2001 including capital redemptions of $4,711,350.  Net Asset
  Value per Unit at December 31, 2002 amounted to $2,274.04, as compared to
  $2,038.84 at December 31, 2001, an increase of 11.54%.

  The net income for 2002 resulted primarily from trading gains in the
  foreign currencies and interest rates markets, partially offset by
  losses in the agricultural, energy, equities and metals markets.

  Fourth Quarter 2002
  -------------------

  The futures markets continued to be very volatile in the fourth quarter of
  2002.  The ongoing threat of war with Iraq, and its impact on the energy
  markets, caused much of the volatility.  Gold prices soared in part due to
  this uncertainty, as well as uncertainty over economic prospects for the
  future.  The equity markets were up, for the most part, at the end of the
  quarter.

  In October, the Partnership lost 6.66%.  There were very large losses in
  interest rates, energy and foreign currencies.  There were also smaller
  losses in other sectors.

  In November, the Partnership lost another 2.14%.  There were gains in
  foreign currencies, base metals, and stock indexes but these were offset
  by losses in interest rates, energy and precious metals.

  In December, the Partnership had a gain of 7.79%.  There were gains in
  interest rates, foreign currencies and energy which offset the losses in
  the base metals, equities and agricultural sectors.

  The Partnership finished the year with a gain of 11.54%.  The volatility in
  the futures markets allowed some traders to capitalize on trends in various
  markets.

  Third Quarter 2002
  ------------------

  The futures markets continued to be volatile in the third quarter
  of 2002.  The equity markets suffered losses during the quarter,
  which significantly impacted the commodities markets.  The looming
  threat of war with Iraq also had an impact on the markets,
  especially oil and gas futures.

  In July, the Partnership gained 6.89%.  There were gains in interest
  rates and stock indexes along with gains in certain agricultural
  commodities.  These gains were partially offset by losses in the
  energy complex and metals.

  In August, the Partnership gained another 3.87%.  Again, there were
  gains in interest rate markets.  There were also gains in energy,
  precious metals, grains and livestock.  There were losses in foreign
  currencies, stock index futures, and base metals.

  In September, the Partnership had yet another gain of 4.94%.  There
  were gains in interest rates along with gains in stock indexes and
  energy.  There were losses in precious metals.

  The had a total return of 16.51% for the quarter and 13.29% for the
  nine months ended September 30, 2002.  For the third quarter 2002, the
  majority of the Partnership's trading gains were in interest rate
  futures and stock index futures and the largest loss was in foreign
  currencies.

  Second Quarter 2002
  -------------------

  The futures markets continued to be volatile in the second quarter of
  2002, though there was a surge at the end of the quarter.  The extreme
  volatility of the equity markets, mainly on the downside, had a major
  impact on the commodities markets.  Many of the US and overseas stock
  indexes and foreign currencies were very active.  Some of this was the
  result of the corporate scandals that continue to rock the markets.

  In April, the Partnership lost 4.43%.  Although there were gains in
  Swiss Francs, natural gas, and Euros, they were more than offset by
  losses in the German Stock Index, the Canadian Dollar, the NASDAQ 100,
  and various bond futures.

  In May, the Partnership was essentially flat, with a gain of .26%.
  There were gains in foreign currencies due to the drop of the U.S.
  dollar.  There were also gains in precious metals and agricultural
  commodities.  The gains were offset by losses in the energy complex,
  interest rates and some metals.

  In June, the Partnership had a gain of 10.26%.  There were gains in
  Euro futures, and a gain in EuroDollar futures.  There were also gains
  in various stock indexes.  There were losses in British Pounds, the
  Nikkei Stock Index, and Gold, but these were more than offset by the
  gains.

  The Partnership had a total return of 5.65% for the quarter and
  (2.77)% for the six months ended June 30, 2002.  For the second
  quarter 2002, the majority of the Partnership's trading gains were in
  foreign currencies and the largest loss was in the energy markets.

  First Quarter 2002
  ------------------

  The futures markets remained choppy in the first quarter of 2002.
  While the economy was showing some signs of improvement, there were
  also some negative signs that caused uncertainty.  The troubles in the
  Middle East lead to large increases in oil and gas prices.  Gold
  prices also moved higher early in the quarter, but gave back some of
  their gains at the end of the quarter.

  In January 2002, the Partnership lost 6.25%.  There were large losses
  in stock indexes and agricultural commodities.  Large losses were also
  incurred in interest rates and metals.  Many of the other sectors were
  essentially flat.

  In February 2002, the Partnership lost 5.58%.  The Partnership once
  again experienced losses in stock indexes and interest rates.  In
  addition, there were also losses in the energy complex and foreign
  currencies.  There were some gains in agricultural commodities and
  precious metals.  These however, were not enough to offset the losses.

  In March 2002, the Partnership managed to gain 3.97%.  There were
  gains in the energy complex, including Brent Crude Oil and Unleaded
  Gas.  There were also some gains in bonds and stock indexes.  There
  were losses in currencies, including the Japanese Yen and the Swiss
  Franc.  There were also some small losses in cotton and aluminum.
  These losses however were not enough to offset the gains.

  Year Ended December 31, 2001
  ----------------------------

  2001 had net income of $201,219 or $11.05 per Unit.  At December 31, 2001,
  partners' capital totaled $33,783,795, a net decrease of $6,686,842 from
  December 31, 2000.  Net Asset Value per Unit at December 31, 2001 amounted
  to $2,038.84, as compared to $2,026.18 at December 31, 2000, an increase of
  0.62%.

  The net income for 2001 resulted primarily from trading gains in the
  interest rate, equity, metals and currencies markets, partially offset by
  losses in the agricultural and energy markets.  Partners' capital was
  further reduced by redemptions of $6,888,061 during 2001.

  Fourth Quarter 2001
  -------------------

  The fourth quarter of 2001 was marked by very volatile markets in the
  aftermath of the events of September 11th, especially in terms of interest
  rates.  The Fund had an 8.65% gain in October.  This was mostly attributed
  to large gains in long-term interest rates, especially Euro Bond Futures and
  U.S. Treasury Bond Futures.  The Fund also had significant gains in short-
  term interest rates, and medium-term interest rates.

  In November, many of the October gains were reversed.  There was a loss of
  10.76%.  The losses were mainly in short, medium and long-term interest
  rates.  There were also some losses in currencies.  The Fed's continued
  aggressive rate cutting policy resulted in very volatile markets for
  interest rate futures.

  In December, the Fund had a small loss of 1.26%.  Although there were large
  gains in currencies, especially Japanese Yen contracts, these gains were
  offset by losses in interest rate futures.  There were also losses in
  agriculture, metals and energy.

  Third Quarter 2001
  ------------------

  The Partnership's net trading gains for the quarter ended September 30, 2001
  resulted from gains in the agricultural, equities, metals and interest rates
  market sectors, offset slightly by losses in the energies markets.

  The quarter ended September 30, 2001 started out with gains in July in base
  metals, precious metals, stock index futures and short-term interest rates.
  The Fed's continuing loose monetary policy kept both short-term and long-term
  interest rates somewhat volatile.  August brought large gains in interest
  rates and smaller gains in the base metals.

  September 2001 was a very volatile month for the Fund due to the events of
  September 11th.  Although the U.S. markets were closed for the remainder of
  the week, most overseas markets remained open, and significant gains were
  made during this period.  The Fund had significant profits in short-term
  interest rate futures (mostly overseas).  There were also large gains made in
  medium-term interest rates, which were partially offset by losses in long-
  term interest rates.  There were also some significant gains in base metals
  and losses in energy, which was especially volatile after the attacks on the
  World Trade Center and the Pentagon.  The Fund was able to end the quarter
  with a profit of 8.36% and 5.10% for the nine months ended September 30,
  2001.

  Second Quarter 2001
  -------------------

  Those sectors which gained in March of 2001 showed losses of similar
  magnitude in April 2001.  A large part of the loss was a direct result of a
  sudden and unexpected cut in U.S. interest rates by the Federal Reserve on
  April 18th.  This caused stock indexes as well as other markets to sharply
  reverse their previous trends.  May brought a small gain from a variety of
  markets.

  As of June 1, 2001, the General Partner made two significant changes to the
  Fund.  First, Gamma Capital Management was terminated as a Trading Advisor
  and replaced with Winton Capital Management, Ltd.  Second, the Fund's
  leverage was increased through the use of notional funds to approximately
  150% of assets.  The General Partner instructed Winton to move into the
  market in stages during the month of June rather than establish all positions
  at once.  The Fund ended the second quarter 2001 with a loss of 6.25% and the
  first half of 2001 was a loss of 3.01%.

  First Quarter 2001
  ------------------

  The dominant economic force in the first quarter of 2001 was a series of
  interest rate cuts by the U.S. Federal Reserve.  This proved helpful in some
  markets and created difficulty in others, yielding a relatively flat period
  for the Fund early in 2001.  The Fund's Trading Advisors had small losses
  during January and February.  March 2001 was a much more active month, and
  the Advisors were able to show gains in almost all market sectors,
  particularly foreign currencies, stock indexes, and interest rates.  The only
  negative sector in March was energy.  For the first quarter of 2001, the
  Fund's net result was a gain of 3.45%.


Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

Introduction

The Partnership is a commodity investment pool engaged in the trading of U.S.
and foreign futures contracts, options on U.S. and foreign futures contracts
and other commodity interests, including forward contracts on currencies
(collectively, "commodity interests").  These market sensitive derivative
instruments are acquired for speculative trading purposes.  All, or
substantially all, of the Partnership's assets are, accordingly, subject to
the risk of trading loss.  Unlike an operating company, the risk involved in
trading market sensitive derivative instruments is integral, not incidental,
to the Partnership's business.

Market movements result in frequent changes in the fair market 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 commodity price levels, the level and volatility of interest rates,
foreign currency exchange rates, equity price levels, the market 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 acquires and liquidates, generally on a short-term basis, both
long and short positions in a wide range of commodities markets.
Consequently, it is not possible to predict how a particular market scenario
projected into the future 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.  In light of the foregoing, as well as the risks and uncertainties
intrinsic to all future projections, the inclusion of the quantitative
disclosure 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 the Value at Risk or by the Partnership's attempts
to manage its market risk.

Materiality, as used in this section, is based on an assessment of reasonably
possible market movements and the potential losses caused by such movements,
taking into account the leverage, optionality and multiplier features of the
Partnership's market sensitive commodity interests.

Quantitative Disclosures About Trading Risk

The following quantitative disclosures regarding the Partnership's market risk
exposures contain "forward-looking statements" within the meaning of the safe
harbor from civil liability provided for such statements by the Private
Securities Litigation Reform Act of 1995 (set forth in Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934).  All quantitative disclosures in this section are deemed to be
forward-looking statements for purposes of the safe harbor, except for
statements of historical fact (such as the terms and amounts related to
particular contracts and commodity interests held during or at the end of
the reporting period).

Risk exposure in the various market sectors traded by the Partnership's
Advisors is quantified below in terms of Value at Risk.  Commodity interests
are recorded in the financial statements at fair market value; therefore, any
loss in the fair value of the Partnership's open positions is directly
reflected in the Partnership's earnings (realized or unrealized) and cash
flow.

The Partnership has used commodity exchange maintenance margin requirements as
the measure of its Value at Risk in a given market sector.  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.  The maintenance margin levels are
established by brokers and exchanges using historical price studies as well
as an assessment of current market volatility (including the implied
volatility of the options on a given futures contract) and economic
fundamentals to provide a probabilistic estimate of the maximum expected
near-term one-day price fluctuation.  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.

The following table indicates the trading Value at Risk associated with the
Partnership's open positions by market category as of December 31, 2003 and
2002.  All open position trading risk exposures of the Partnership have
been included in calculating the figures set forth below.  As of December 31,
2003 and 2002, the Partnership's total capitalization was approximately
$33.6 million and $32.1 million, respectively.

                                December 31,               December 31,
                                    2003                       2002
                           ----------------------     ----------------------
                                          % of                       % of
                                          Total                      Total
                            Value at     Capital-      Value at     Capital-
   Market Sector              Risk       ization         Risk       ization
   -------------           ----------    -------      ----------    -------

   Agriculture             $  110,000      0.33%      $  217,000      0.68%
   Currencies               1,348,000      4.01%         584,000      1.82%
   Energy and Other           584,000      1.74%         867,000      2.70%
   Stock Indices            1,675,000      4.99%         435,000      1.35%
   Interest Rates           1,520,000      4.52%       1,963,000      6.11%
   Metals                     509,000      1.51%         205,000      0.64%
                           ----------     -----       ----------     -----

        Total              $5,746,000     17.10%      $4,271,000     13.30%
                           ==========     ======      ==========     =====


The following table indicates the total annual returns for 2003 by market
category based on trading gains and losses (before commissions, interest, other
fees and expenses) earned during the year.  These returns are calculated based
on the net asset value per unit at the beginning of the fiscal year 2003.

                                          Trading
                                        Gain/(Loss)
                                        -----------

   Agriculture                             0.65 %
   Currencies                             19.58 %
   Energy and Other                        0.81 %
   Stock Indices                           6.26 %
   Interest Rates                         (2.17)%
   Metals                                  2.98 %
                                          -------

                                          28.11 %
                                          =======


The face value of the market sector instruments held by the Partnership is
typically many times the applicable maintenance margin requirement
(maintenance margin requirements generally range between approximately 1%
and 10% of contract face value) as well as many times the capitalization of
the Partnership.  The magnitude of the Partnership's open positions creates
a risk of loss not typically found in most other financial instruments.
Because of the size of its positions, certain market conditions - unusual,
but historically recurring from time to time - could cause the Partnership to
incur severe losses over a short period of time.  The foregoing Value at Risk
table - as well as the past performance of the Partnership - give no
indication of the magnitude of this risk of loss.

Qualitative Disclosures About Trading Risk

The following qualitative disclosures regarding the Partnership's market risk
exposures - except for (i) those disclosures that are statements of historical
fact and (ii) the descriptions of how the Partnership manages its primary
market risk exposures - constitute forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act.  The Partnership's primary market risk exposures as well as the
strategies used and to be used by the General Partner and the Advisors for
managing such exposures are subject to numerous uncertainties, contingencies
and risks, any one of which could cause the actual results of the
Partnership's risk controls to differ materially from the objectives of such
strategies.  Government interventions, defaults and expropriations, illiquid
markets, the emergence of dominant fundamental factors, political upheavals,
changes in historical price relationships, an influx of new market
participants, increased regulation and many other factors could result in
material losses as well as in material changes to the risk exposures and the
risk management strategies of the Partnership. There can be no assurance that
the Partnership's current market exposure and/or risk management strategies
will not change materially or that any such strategies will be effective in
either the short- or long-term.  Investors must be prepared to lose all or
substantially all of their investment in the Partnership.

The following were the primary trading risk exposures of the Partnership as
of and during the year ended December 31, 2003, by market sector.

Stock Indices
-------------

The Partnership's primary equity exposure is to fluctuations in equity prices.
The stock index futures traded by the Partnership are limited to futures on
broadly based indices.  As of December 31, 2003, the Partnership's
exposure was to stock indices in the U.S., European, Australian and Asian
markets.  The General Partner anticipates that the Partnership will primarily
be exposed to the risk of adverse price trends or static markets in the major
U.S. and global equity indices.

Metals
------

The Partnership's primary metals market exposure is to fluctuations in the
price of both precious and base metals.  As of December 31, 2003, the
Partnership's primary exposures were to aluminum, nickel, copper, tin,
gold, silver, lead and zinc.  The General Partner anticipates that the
Partnership will continue to be exposed to the metals markets.

Agriculture
-----------

The Partnership's primary agriculture commodities exposure is to agricultural
price movements which are often directly affected by severe or unexpected
weather conditions.  The Partnership's agriculture commodities exposure was
primarily to pork bellies, cattle, cotton, lumber and soy bean products as of
December 31, 2003.  The General Partner anticipates that agriculture
commodities such as meats and fibers may also be a potential market exposure.

Currencies
----------

The Partnership's currency exposure is to exchange rate fluctuations,
primarily fluctuations which disrupt the historical pricing relationships
between different currencies and currency pairs.  These fluctuations are
influenced by interest rate changes as well as political and general economic
conditions.  The Partnership trades long and short positions in a large number
of currencies, including cross-currency positions between two currencies other
than the U.S. dollar.  As of December 31, 2003, the Partnership's primary
exposures were in Australian dollars, British Pounds, Japanese Yen, Swiss
Francs and Euros.  The General Partner anticipates that the risk profile of the
Partnership's currency sector will predominantly relate to the U.S. and major
European and Asian countries.  The currency trading Value at Risk figure
includes foreign margin amounts converted into U.S. dollars with an incremental
adjustment to reflect the exchange rate risk inherent to the dollar-based
Partnership in expressing Value at Risk in a functional currency other than
dollars.

Interest Rates
--------------

Interest rate movements directly affect the value of commodity interests
related to U.S. and foreign bonds and bond indices, and indirectly affect the
value of its equity index and currency positions.  Interest rate movements in
one country, as well as relative interest rate movements between countries, can
materially impact the Partnership's profitability.  The Partnership's primary
interest rate exposure is to interest rate fluctuations in the United States
and the major European and Asian countries.  However, the Partnership may also
take positions affected by interest rates on the government debt of smaller
nations, such as Australia.  The General Partner anticipates that interest
rates in such major countries will be a primary market exposure of the
Partnership for the foreseeable future.  The changes in interest rates which
would likely have the most effect on the Partnership are changes in long-term,
as opposed to short-term, rates.  Most of the financial instruments underlying
the commodity interests held by the Partnership during the year were medium- to
long-term instruments.  Consequently, even a material change in short-term
rates might have little effect on the Partnership if medium- to long-term
rates were to remain steady.

Energy
------

The Partnership's energy market exposure is to gas and oil price movements,
often resulting from political developments in the Middle East.

Disclosures About Non-Trading Risk

The Partnership has non-trading market risk on its foreign cash balances not
needed to maintain margin requirements.  However, these balances (as well as
the market risk they represent) are immaterial.

The Partnership also has non-trading cash flow risk as a result of investing
a substantial portion of its assets in interest-bearing deposits with brokers.
If short-term interest rates decline, then cash flow from interest income
related to broker deposits will also decline.

Qualitative Disclosures About Managing Risk Exposure

The means by which the General Partner and the Advisors attempt to manage
the risk of the Partnership's open positions is essentially the same in all
market categories traded.  The General Partner attempts to manage market
exposure by (i) diversifying the Partnership's assets among different
Advisors whose strategies focus on different market sectors and trading
approaches, and (ii) monitoring the Partnership's actual market exposures on
a daily basis and reallocating assets away from Advisors, as necessary, if an
over-concentration develops and persists in any one market sector or market
sensitive commodity interest.  Each Advisor applies its own risk management
policies to its trading.  These Advisor policies generally limit the total
exposure that may be taken per "risk unit" of assets under management.  In
addition, many Advisors follow diversification guidelines (often formulated
in terms of the maximum margin which they will commit to positions in any one
contract or group of related contracts), as well as imposing "stop-loss"
points at which open positions must be closed out.  Certain Advisors treat
their risk control policies as strict rules; others only as general
guidelines for controlling risk.


Item 8.  Financial Statements and Supplementary Data.

  Financial statements meeting the requirements of Regulation S-X are listed
  following this report. The Supplementary Financial information specified by
  Item 302 of Regulation S-K is included in Item 7(c), Results of Operations.


Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure.

  None.


Item 9A.  Controls and Procedures.

  ProFutures, Inc., as General Partner of ProFutures Diversified Fund, L.P.,
  with the participation of the General Partner's President and Chief Financial
  Officer, has evaluated the effectiveness of the design and operation of its
  disclosure controls and procedures (as defined in the Securities Exchange Act
  of 1934 Rules 13a-15(e) or 15d-15(e)) with respect to the Partnership as of
  the end of the period covered by this annual report.  Based on their
  evaluation, the President and Chief Financial Officer have concluded that
  these disclosure controls and procedures are effective.  There were no
  changes in the General Partner's internal control over financial reporting
  applicable to the Partnership identified in connection with the evaluation
  required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that
  occurred during the last fiscal quarter that have materially affected, or are
  reasonably likely to materially affect, internal control over financial
  reporting applicable to the Partnership.



                                PART III


Item 10.  Directors and Executive Officers of the Partnership.

  The Partnership is a limited partnership and therefore does not have any
  directors or officers.  The Partnership's General Partner, ProFutures, Inc.,
  administers and manages the affairs of the Partnership.

  The Board of Directors of ProFutures, Inc., in its capacity as the audit
  committee for the Partnership, has determined that Debi B. Halbert qualifies
  a an "audit committee financial expert" in accordance with the applicable
  rules and regulations of the Securities and Exchange Commission.  She is not
  independent of management.

  The Partnership has adopted a Code of Ethics that applies to the Partnership
  and its affiliates as well as the Executive Officers of ProFutures, Inc.  The
  Partnership's Code of Ethics is attached hereto as an Exhibit.


Item 11.  Executive Compensation.

  As discussed above, the Partnership does not have any officers, directors or
  employees.  The General Partner received monthly management fees which
  aggregated $1,026,367 for 2003, or approximately 3% of the Partnership's Net
  Asset Value.


Item 12.  Security Ownership of Certain Beneficial Owners and Management.

  (a)  As of December 31, 2003, a total of 12,941 Units are issued and
       outstanding, representing 1 General Partner and 955 Limited
       Partners.  The Partnership knows of no one person who owns
       beneficially more than 5% of the Units of Limited Partnership Interest.

  (b)  The General Partner and its principals owned 225 Units as of
       December 31, 2003, having an aggregate value of $584,564, which is
       approximately 1.7% of the Net Asset Value of the Partnership.

  (c)  Changes in control.  None have occurred and none are expected.


Item 13.  Certain Relationships and Related Transactions.

  The Partnership's Prospectus, dated July 31, 1994, Pages 16-18, which is
  incorporated herein by reference, contains information concerning the
  relationships and transactions between the General Partner, the Clearing
  Broker and the Partnership.


Item 14.  Principal Accounting Fees and Services.

  Arthur F. Bell, Jr. & Associates, L.L.C. billed the Partnership aggregate
  fees for services rendered to the Partnership for the last two fiscal
  years as follows:

                                         2003              2002
                                      ----------        ----------

          Audit Fees (1)              $   38,779        $   32,914
          Audit-Related Fees (2)      $   25,614        $   21,764
          Tax Fees (3)                $    4,242        $    5,869
          All Other Fees (4)          $    2,600        $    2,400


  (1)  Audit fees relate to the annual audit, quarterly reviews, and assistance
       with and review of documents filed with the Securities and Exchange
       Commission.

  (2)  Audit-Related Fees relate to the monthly recalculation of net asset
       value and net asset value per unit, from information provided by the
       General Partner, and consultation on the preparation of month-end
       account statements provided to each partner.

  (3)  Tax Fees relate to the preparation of the U.S. Partnership and
       applicable state information tax returns.

  (4)  All Other Fees relate to the preparation of performance records and
       related footnotes for the Partnership and each Advisor.

  The Board of Directors of ProFutures, Inc., in its capacity as the audit
  committee for the Partnership, approved all of the services described above.
  The audit committee has determined that the payments made to its independent
  accountant for non-audit services are compatible with maintaining such
  auditor's independence.

  The audit committee explicitly pre-approves all audit and non-audit services
  and all engagement fees and terms, except as otherwise permitted by
  regulation.



                                 PART IV


Item 15.  Exhibits, Financial Statements, Schedules and Reports on Form 8-K.

  (a)(1)  Financial Statements.

          See Index to Financial Statements on page F-1.

          The Financial Statements begin on page F-3.

  (a)(2)  Schedules are omitted for the reason that all required information
          is contained in the financial statements included in (a)(1) above
          or are not applicable.

  (a)(3)  Exhibits as required by Item 601 of Regulation S-K.

          *1.1          Form of Selling Agreement between the Partnership and
                        ProFutures Financial Group, Inc.
          *1.2          Form of Additional Selling Agents Agreement between
                        ProFutures Financial Group, Inc. and certain
                        Additional Selling Agents.
          *3.1          Agreement of Limited Partnership (attached to the
                        Prospectus as Exhibit A).
          *3.2          Subscription Agreement and Power of Attorney (attached
                        to the Prospectus as Exhibit B).
          *3.3          Request for Redemption Form (attached to the
                        Prospectus as Exhibit C).
          *5.1          Opinion of Counsel as to the legality of the Units.
          *8.1          Tax Opinion of Counsel
         *10.4          Form of Consulting Agreement between the Registrant and
                        Kenmar Global Strategies Inc.
         *10.6          Form of Amended and Restated Stock Subscription
                        Agreement by and between ABN AMRO Incorporated and
                        ProFutures, Inc.


-----------------------
*  The foregoing forms of exhibits were filed in the April 6, 1987
   Registration Statement No. 33-13008 and/or Post-Effective Amendment No. 1
   thereto filed March 11, 1988, and/or the June 5, 1991 Registration
   Statement No. 33-41073, and/or Pre-Effective Amendment No. 1 thereto filed
   August 8, 1991, and/or Post-Effective Amendment No. 1 thereto filed
   March 26, 1992; and/or the October 14, 1992 Registration Statement
   No. 33-53324, and/or the November 17, 1992 Pre-effective Amendment No. 1
   thereto and/or the July 2, 1993 Registration Statement No. 33-65596, and/
   or the Pre-Effective Amendment No. 1 thereto filed August 16, 1993, and
   Supplement dated December 3, 1993, Post-Effective Amendment No. 2 thereto
   filed June 30, 1994 and Supplement dated January 31, 1995, and/or Post-
   Effective Amendment No. 3 dated June 23, 1995; and/or Form 10-K for the year
   ended 2001; and/or Form 10-Q for the quarter ended June 30, 2002.
   Accordingly, such exhibits are incorporated herein by reference and notified
   herewith.

  (b)  Reports on Form 8-K.

       None.

  (c)  Exhibits.

       14.1   Code of Ethics.

       31.01  Certification of Gary D. Halbert, President, pursuant to Rules
              13a-14 and 15d-14 of the Securities Exchange Act of 1934.

       31.02  Certification of Debi B. Halbert, Chief Financial Officer,
              pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange
              Act of 1934.

       32.01  Certification of Gary D. Halbert, President, pursuant to 18
              U.S.C. Section 1350 as enacted by Section 906 of The Sarbanes-
              Oxley Act of 2002.

       32.02  Certification of Debi B. Halbert, Chief Financial Officer,
              pursuant to 18 U.S.C. Section 1350 as enacted by Section 906 of
              The Sarbanes-Oxley Act of 2002.

  (d)  Financial Statement Schedules.

       Not Applicable or information included in the financial statements.

                                 SIGNATURES



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


PROFUTURES DIVERSIFIED FUND, L.P.
(Partnership)



March 26, 2004                By  /s/ GARY D. HALBERT
--------------------------      -----------------------------------------
Date                            Gary D. Halbert, President and Director
                                ProFutures, Inc., General Partner
                                ProFutures Diversified Fund, L.P.



March 26, 2004                By  /s/ DEBI B. HALBERT
--------------------------      -----------------------------------------
Date                            Debi B. Halbert, Chief Financial Officer,
                                  Treasurer and Director
                                ProFutures, Inc., General Partner
                                ProFutures Diversified Fund, L.P.



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 in the capacities and on the dates indicated.



March 26, 2004                By  /s/ GARY D. HALBERT
--------------------------      -----------------------------------------
Date                            Gary D. Halbert, President and Director
                                ProFutures, Inc., General Partner
                                ProFutures Diversified Fund, L.P.



March 26, 2004                By  /s/ DEBI B. HALBERT
--------------------------      -----------------------------------------
Date                            Debi B. Halbert, Chief Financial Officer,
                                  Treasurer and Director
                                ProFutures, Inc., General Partner
                                ProFutures Diversified Fund, L.P.



                        PROFUTURES DIVERSIFIED FUND, L.P.



                                -----------------
                                TABLE OF CONTENTS
                                -----------------


                                                                      PAGES
                                                                      -----

Independent Auditors' Report                                           F-2

Financial Statements

  Statements of Financial Condition                                    F-3

  Condensed Schedule of Investments                                    F-4

  Statements of Operations                                             F-5

  Statements of Changes in Partners' Capital (Net Asset Value)         F-6

  Notes to Financial Statements                                     F-7 - F-11


                                      F-1



                           INDEPENDENT AUDITOR'S REPORT
                           ----------------------------


To the Partners
ProFutures Diversified Fund, L.P.


We have audited the accompanying statements of financial condition of
ProFutures Diversified Fund, L.P. as of December 31, 2003 and 2002, including
the December 31, 2003 condensed schedule of investments, and the related
statements of operations and changes in partners' capital (net asset value) for
the years ended December 31, 2003, 2002 and 2001.  These financial statements
are the responsibility of the Partnership's management.  Our responsibility is
to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America.  Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of ProFutures Diversified Fund,
L.P. as of December 31, 2003 and 2002, and the results of its operations and
the changes in its net asset values for the years ended December 31, 2003, 2002
and 2001, in conformity with accounting principles generally accepted in the
United States of America.



                              /s/ ARTHUR F. BELL, JR. & ASSOCIATES, L.L.C.



Hunt Valley, Maryland
January 27, 2004


                                       F-2



                        PROFUTURES DIVERSIFIED FUND, L.P.
                        STATEMENTS OF FINANCIAL CONDITION
                            December 31, 2003 and 2002
                                    -------------


                                                      2003            2002
                                                      ----            ----
ASSETS
  Equity in broker trading accounts
    Cash                                          $19,912,171     $30,570,988
    Unrealized gain on open contracts               2,016,022       2,332,972
                                                  -----------     -----------

        Deposits with broker                       21,928,193      32,903,960

  Cash                                                  2,693           2,461
  Cash deposits in forward trading
    collateral accounts                            12,770,126               0
  Unrealized gain on open forward contracts           602,882               0
                                                  -----------     -----------

        Total assets                              $35,303,894     $32,906,421
                                                  ===========     ===========

LIABILITIES
  Accounts payable                                $    16,615     $    22,197
  Commissions and other trading fees
    on open contracts                                  42,749          49,856
  Incentive fees payable                              609,264         123,003
  Management fees payable                             324,421         329,890
  Redemptions payable                                 685,164         251,134
                                                  -----------     -----------

        Total liabilities                           1,678,213         776,080
                                                  -----------     -----------

PARTNERS' CAPITAL (Net Asset Value)
  General Partner - 225 units outstanding
    at December 31, 2003 and 2002                     584,564         511,577
  Limited Partners - 12,716 and 13,904 units
    outstanding at December 31, 2003 and 2002      33,041,117      31,618,764
                                                  -----------     -----------

        Total partners' capital
           (Net Asset Value)                       33,625,681      32,130,341
                                                  -----------     -----------

                                                  $35,303,894     $32,906,421
                                                  ===========     ===========


                               See accompanying notes.

                                         F-3



                        PROFUTURES DIVERSIFIED FUND, L.P.
                        CONDENSED SCHEDULE OF INVESTMENTS
                                December 31, 2003
                                   ------------


LONG FUTURES CONTRACTS
----------------------

                                                                  % of Net
             Description                                 Value   Asset Value
             -----------                                 -----   -----------

             Agricultural                             $   21,471     0.06 %
             Currency                                    208,492     0.62 %
             Energy                                      116,904     0.35 %
             Interest rate                               234,248     0.70 %
             Metal                                       877,367     2.61 %
             Stock index                                 558,645     1.66 %
                                                      ----------    -------

             Total long futures contracts             $2,017,127     6.00 %
                                                      ----------    -------


SHORT FUTURES CONTRACTS
----------- -----------

             Agricultural                             $   13,648     0.04 %
             Currency                                    (13,476)   (0.04)%
             Interest rate                                (9,156)   (0.03)%
             Metal                                        (1,161)   (0.00)%
             Stock index                                   9,040     0.03 %
                                                      ----------    -------

             Total short futures contracts            $   (1,105)   (0.00)%
                                                      ----------    -------

             Total futures contracts                  $2,016,022     6.00 %
                                                      ==========    =======

FORWARD CURRENCY CONTRACTS
--------------------------

                                                                  % of Net
             Description                                 Value   Asset Value
             -----------                                 -----   -----------

             Long forward currency contracts          $ (666,790)   (1.98)%
             Short forward currency contracts          1,269,672     3.77 %
                                                      ----------    -------

             Total forward currency contracts         $  602,882     1.79 %
                                                      ==========    =======


                            See accompanying notes.

                                      F-4



                          PROFUTURES DIVERSIFIED FUND, L.P.
                              STATEMENTS OF OPERATIONS
               For the Years Ended December 31, 2003, 2002 and 2001
                                    -------------


                                        2003           2002           2001
                                        ----           ----           ----
TRADING GAINS (LOSSES)
  Gain (loss) from futures trading
    Realized                       $  7,100,121   $  6,268,491   $  2,875,708
    Change in unrealized               (316,950)       659,039        365,300
    Brokerage commissions              (870,743)    (1,047,627)    (1,142,855)
                                   ------------   ------------   ------------

        Gain from futures trading     5,912,428      5,879,903      2,098,153
                                   ------------   ------------   ------------

  Gain from forward trading
    Realized                          1,353,380              0              0
    Change in unrealized                602,882              0              0
                                   ------------   ------------   ------------

        Gain from forward trading     1,956,262              0              0
                                   ------------   ------------   ------------

        Total trading gains           7,868,690      5,879,903      2,098,153
                                   ------------   ------------   ------------

NET INVESTMENT INCOME (LOSS)
  Income
    Interest income                     352,209        510,306      1,309,764
                                   ------------   ------------   ------------

  Expenses
    Incentive fees                    1,456,891      1,104,271        656,540
    Management fees                   2,130,952      2,065,751      2,385,535
    Operating expenses                  170,722        162,291        164,623
                                   ------------   ------------   ------------

        Total expenses                3,758,565      3,332,313      3,206,698
                                   ------------   ------------   ------------

        Net investment (loss)        (3,406,356)    (2,822,007)    (1,896,934)
                                   ------------   ------------   ------------

        NET INCOME                 $  4,462,334   $  3,057,896   $    201,219
                                   ============   ============   ============

NET INCOME PER GENERAL AND
  LIMITED PARTNER UNIT
    (based on weighted average
    number of units outstanding
    during the year of 13,669,
    15,142 and 18,216,
    respectively)                  $     326.46   $     201.95   $      11.05
                                   ============   ============   ============

INCREASE IN NET ASSET VALUE
  PER GENERAL AND LIMITED
  PARTNER UNIT                     $     324.44   $     235.20   $      12.66
                                   ============   ============   ============


                               See accompanying notes.

                                         F-5



                          PROFUTURES DIVERSIFIED FUND, L.P.
           STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (NET ASSET VALUE)
               For the Years Ended December 31, 2003, 2002 and 2001
                                    -------------


                            Total                Partners' Capital
                          Number of   ----------------------------------------
                            Units       General       Limited        Total
                          ---------   ----------   ------------   ------------

Balances at
  December 31, 2000          19,974   $  455,817   $ 40,014,820   $ 40,470,637

Net income for
  the year ended
  December 31, 2001                        2,848        198,371        201,219

Redemptions                  (3,404)           0     (6,888,061)    (6,888,061)
                             ------   ----------   ------------   ------------

Balances at
  December 31, 2001          16,570      458,665     33,325,130     33,783,795

Net income for
  the year ended
  December 31, 2002                       52,912      3,004,984      3,057,896

Redemptions                  (2,441)           0     (4,711,350)    (4,711,350)
                             ------   ----------   ------------   ------------

Balances at
  December 31, 2002          14,129      511,577     31,618,764     32,130,341

Net income for
  the year ended
  December 31, 2003                       72,987      4,389,347      4,462,334

Redemptions                  (1,188)           0     (2,966,994)    (2,966,994)
                             ------   ----------   ------------   ------------

Balances at
  December 31, 2003          12,941   $  584,564   $ 33,041,117   $ 33,625,681
                             ======   ==========   ============   ============



                                       Net Asset Value Per Unit
                                   ---------------------------------

                                              December 31,
                                     2003        2002        2001
                                     ----        ----        ----

                                   $2,598.48   $2,274.04   $2,038.84
                                   =========   =========   =========


                               See accompanying notes.

                                         F-6



                         PROFUTURES DIVERSIFIED FUND, L.P.
                           NOTES TO FINANCIAL STATEMENTS
                                    -------------



Note 1.  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         -----------------------------------------------------------

         A.  General Description of the Partnership

             ProFutures Diversified Fund, L.P. (the Partnership) is a Delaware
             limited partnership which operates as a commodity investment pool.
             The Partnership engages in the speculative trading of futures
             contracts and interbank forward currency contracts.

         B.  Regulation

             As a registrant with the Securities and Exchange Commission, the
             Partnership is subject to the regulatory requirements under the
             Securities Act of 1933 and the Securities Exchange Act of 1934.
             As a commodity investment pool, the Partnership is subject to the
             regulations of the Commodity Futures Trading Commission, an agency
             of the United States (U.S.) government which regulates most
             aspects of the commodity futures industry; rules of the National
             Futures Association, an industry self-regulatory organization; and
             the requirements of commodity exchanges, Futures Commission
             Merchants (brokers), and interbank market makers through which
             the Partnership trades.

         C.  Method of Reporting

             The Partnership's financial statements are presented in accordance
             with accounting principles generally accepted in the United States
             of America, which require the use of certain estimates made by the
             Partnership's management.  Transactions are accounted for on the
             trade date.  Gains or losses are realized when contracts are
             liquidated.  Unrealized gains or losses on open contracts (the
             difference between contract trade price and market price) are
             reflected in the statement of financial condition as a net gain or
             loss, as there exists a right of offset of unrealized gains or
             losses in accordance with Financial Accounting Standards Board
             Interpretation No. 39 - "Offsetting of Amounts Related to Certain
             Contracts."  Any change in net unrealized gain or loss from the
             preceding period is reported in the statement of operations.

             For purposes of both financial reporting and calculation of
             redemption value, Net Asset Value per Unit is calculated by
             dividing Net Asset Value by the total number of units outstanding.

         D.  Brokerage Commissions

             Brokerage commissions include other trading fees and are charged
             to expense when contracts are opened.

         E.  Income Taxes

             The Partnership prepares calendar year U.S. and applicable state
             information tax returns and reports to the partners their
             allocable shares of the Partnership's income, expenses and trading
             gains or losses.


                                         F-7



                          PROFUTURES DIVERSIFIED FUND, L.P.
                      NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                    -------------



Note 1.  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (CONTINUED)
         -----------------------------------------------------------

         F.  Foreign Currency Transactions

             The Partnership's functional currency is the U.S. dollar; however,
             it transacts business in currencies other than the U.S. dollar.
             Assets and liabilities denominated in currencies other than the
             U.S. dollar are translated into U.S. dollars at the rates in
             effect at the date of the statement of financial condition.
             Income and expense items denominated in currencies other than the
             U.S. dollar are translated into U.S. dollars at the rates in
             effect during the period.  Gains and losses resulting from the
             translation to U.S. dollars are reported in income currently.

         G.  Statements of Cash Flows

             The Partnership has elected not to provide statements of cash
             flows as permitted by Statement of Financial Accounting Standards
             No. 102 - "Statement of Cash Flows - Exemption of Certain
             Enterprises and Classification of Cash Flows from Certain
             Securities Acquired for Resale."

Note 2.  GENERAL PARTNER
         ---------------

         The General Partner of the Partnership is ProFutures, Inc., which
         conducts and manages the business of the Partnership.  The Agreement
         of Limited Partnership requires the General Partner to contribute to
         the Partnership an amount in the aggregate equal to at least the
         greater of (i) 3% of the aggregate initial capital contributions of
         all partners or $100,000, whichever is less, or (ii) 1% of the
         aggregate initial capital contributions of all partners.

         The Agreement of Limited Partnership also requires that the General
         Partner maintain in the aggregate a net worth at least equal to (i)
         the lesser of $250,000 or 15% of the aggregate initial capital
         contributions of any limited partnerships for which it acts as general
         partner and which are capitalized at less than $2,500,000; and (ii)
         10% of the aggregate initial capital contributions of any limited
         partnerships for which it acts as general partner and which are
         capitalized at greater than $2,500,000.

         ProFutures, Inc. has callable subscription agreements with ABN AMRO
         Incorporated (ABN), the Partnership's broker, whereby ABN has
         subscribed to purchase (up to $7,000,000 subject to conditions set
         forth in the subscription agreement as amended effective May 20, 2002)
         the number of shares of common stock of ProFutures, Inc. necessary to
         maintain the General Partner's net worth requirements.

         The Partnership pays the General Partner a monthly management fee of
         1/4 of 1% (3% annually) of month-end Net Asset Value.


                                         F-8



                          PROFUTURES DIVERSIFIED FUND, L.P.
                      NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                    -------------



Note 2.  GENERAL PARTNER (CONTINUED)
         ---------------------------

         Total management fees earned by ProFutures, Inc. for the years ended
         December 31, 2003, 2002 and 2001 were $1,026,367, $925,637 and
         $1,127,522, respectively.  Management fees payable to ProFutures, Inc.
         as of December 31, 2003 and 2002 were $87,415 and $81,720,
         respectively.

Note 3.  CONSULTANT
         ----------

         Kenmar Global Strategies Inc. (Kenmar) assists the General Partner in
         making decisions about which commodity trading advisors to hire, the
         allocations among the advisors and the day-to-day monitoring and risk
         management of the Partnership's trading activities.  Kenmar receives a
         monthly management fee of 1/12 of 1% (1% annually) of month-end Net
         Asset Value.

Note 4.  COMMODITY TRADING ADVISORS
         --------------------------

         The Partnership has trading advisory contracts with several commodity
         trading advisors to furnish investment management services to the
         Partnership.  Certain advisors receive management fees ranging from 1%
         to 2% annually of Allocated Net Asset Value (as defined in each
         respective trading advisory contract).  In addition, the trading
         advisors receive quarterly incentive fees ranging from 20% to 25% of
         Trading Profits (as defined).

Note 5.  DEPOSITS WITH BROKER
         --------------------

         The Partnership deposits funds with ABN to act as broker, subject to
         Commodity Futures Trading Commission regulations and various exchange
         and broker requirements.  Margin requirements are satisfied by the
         deposit of cash with such broker.  The Partnership earns interest
         income on its assets deposited with the broker.

Note 6.  SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS
         --------------------------------------------

         Investments in the Partnership were made by subscription agreement,
         subject to acceptance by the General Partner.  The Partnership's most
         recent offering of Units of Limited Partnership Interest terminated on
         April 30, 1995.

         The Partnership is not required to make distributions, but may do so
         at the sole discretion of the General Partner.  A Limited Partner may
         request and receive redemption of units owned, subject to restrictions
         in the Agreement of Limited Partnership.


                                         F-9-



                          PROFUTURES DIVERSIFIED FUND, L.P.
                      NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                    -------------




Note 7.  TRADING ACTIVITIES AND RELATED RISKS
         ------------------------------------

         The Partnership engages in the speculative trading of U.S. and foreign
         futures contracts and forward contracts (collectively, "derivatives").
         The Partnership is exposed to both market risk, the risk arising from
         changes in the market value of the contracts, and credit risk, the
         risk of failure by another party to perform according to the terms of
         a contract.

         Purchase and sale of futures contracts requires margin deposits with
         the broker.  Additional deposits may be necessary for any loss on
         contract value.  The Commodity Exchange Act requires a broker to
         segregate all customer transactions and assets from such broker's
         proprietary activities.  A customer's cash and other property (for
         example, U.S. Treasury bills) deposited with a broker are considered
         commingled with all other customer funds subject to the broker's
         segregation requirements.  In the event of a broker's insolvency,
         recovery may be limited to a pro rata share of segregated funds
         available.  It is possible that the recovered amount could be less
         than total cash and other property deposited.

         For derivatives, risks arise from changes in the market value of the
         contracts.  Theoretically, the Partnership is exposed to a market risk
         equal to the notional contract value of futures and forward contracts
         purchased and unlimited liability on such contracts sold short.

         The Partnership has a portion of its assets on deposit with a
         financial institution in connection with its trading of forward
         contracts and its cash management activities.  In the event of a
         financial institution's insolvency, recovery of Partnership assets on
         deposit may be limited to account insurance or other protection
         afforded such deposits.  Since these forward contracts are traded in
         unregulated markets between principals, the Partnership also assumes
         the risk of loss from counterparty nonperformance.

         The General Partner has established procedures to actively monitor
         market risk and minimize credit risk, although there can be no
         assurance that it will, in fact, succeed in doing so.  The General
         Partner's basic market risk control procedures consist of continuously
         monitoring the trading activity of the various commodity trading
         advisors, with the actual market risk controls being applied by
         Kenmar, as a consultant, and the advisors themselves.  The General
         Partner seeks to minimize credit risk primarily by depositing and
         maintaining the Partnership's assets at financial institutions and
         brokers which the General Partner believes to be creditworthy.  The
         Limited Partners bear the risk of loss only to the extent of the
         market value of their respective investments and, in certain specific
         circumstances, distributions and redemptions received.


                                        F-10



                          PROFUTURES DIVERSIFIED FUND, L.P.
                      NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                                    -------------


Note 8.  FINANCIAL HIGHLIGHTS
         --------------------

         The following information presents per unit operating performance
         data and other supplemental financial data for the years ended
         December 31, 2003, 2002 and 2001.  This information has been derived
         from information presented in the financial statements.

                                               2003        2002        2001
                                               ----        ----        ----
         Per Unit Performance
         (for a unit outstanding throughout
          the entire year)
         ----------------------------------

         Net asset value per unit at
           beginning of year                 $2,274.04   $2,038.84   $2,026.18
                                             ---------   ---------   ---------

         Income (loss) from operations:
            Total trading gains (1)             573.64      421.57      116.80
            Net investment (loss) (1)          (249.20)    (186.37)    (104.14)
                                             ---------   ---------   ---------

                Total income from operations    324.44      235.20       12.66
                                             ---------   ---------   ---------

         Net asset value per unit at
           end of year                       $2,598.48   $2,274.04   $2,038.84
                                             =========   =========   =========

         Total Return                          14.27 %     11.54 %      0.62 %
                                               =======     =======     =======

         Supplemental Data

         Ratios to average net asset value:
            Expenses prior to incentive fees    6.83 %      7.38 %      6.88 %
            Incentive fees                      4.33 %      3.65 %      1.77 %
                                               -------     -------     -------

                Total expenses                 11.16 %     11.03 %      8.65 %
                                               =======     =======     =======

            Net investment (loss) (2)          (5.79)%     (5.69)%     (3.35)%
                                               =======     =======     =======


         Total returns are calculated based on the change in value of a unit
         during the year.  An individual partner's total returns and ratios may
         vary from the above total returns and ratios based on the timing of
         redemptions.

         ---------------
         (1)  The net investment (loss) per unit is calculated by dividing the
              net investment (loss) by the average number of units outstanding
              during the year.  Total trading gains is a balancing amount
              necessary to reconcile the change in net asset value per unit
              with the other per unit information.  Such balancing amount may
              differ from the calculation of total trading gains per unit due
              to the timing of trading gains and losses during the year
              relative to the number of units outstanding.
         (2)  Excludes incentive fees.


                                        F-11



                                 EXHIBIT 14.1
                                CODE OF ETHICS
                                --------------



This Code of Ethics (the "Code") covers the ProFutures companies, including
ProFutures, Inc., ProFutures Financial Group, Inc., ProFutures Capital
Management, Inc., as well as the public funds offered, including ProFutures
Diversified Fund, L.P., Alternative Asset Growth Fund, L.P. and ProFutures
Long/Short Growth Fund, L.P.  Collectively they will be referred to as
"ProFutures".  It applies to the Executive Officers (the "Covered Officers")
of ProFutures for the purpose of promoting:

     Honest and ethical conduct, which includes the ethical handling of
     conflicts of interest between personal and professional relationships;

     Full, fair, accurate and timely disclosure in reports and documents that
     ProFutures files with, or submits to the Securities and Exchange
     Commission and in other public communications made by ProFutures;

     Compliance with applicable laws and governmental rules and regulations;

     Prompt internal reporting of violations of the Code to appropriate
     personnel; and

     Accountability for adherence to the Code.

Covered Officers should follow a high standard of business ethics and should
be sensitive to situations that may be potential conflicts of interest.

A conflict of interest occurs when a Covered Officer's private interest
interferes with the interests of the Fund.  Each Covered Officer must not:

     Use his/her personal influence or personal relationships improperly to
     influence investment decisions or financial reporting by ProFutures
     whereby the Covered Officer would benefit personally (directly or
     indirectly) to the detriment of  ProFutures;

     Cause ProFutures to take action or fail to take action, for the individual
     personal benefit of the Covered Officer, rather than the benefit of
     ProFutures;

     Use material non-public knowledge of portfolio transactions made or
     contemplated for any Funds to trade personally or have others trade in
     anticipation of the market effect of such transactions.

Each Covered Officer should become familiar with this Code, and any questions
with any of the provisions should be directed to the Board of Directors, the
Compliance Officer, or legal counsel.  In addition, each Covered Officer:

     Must affirm in writing that he/she has read and understands the Code;

     Must annually thereafter affirm to the Board that he/she has complied
     with the requirements of the Code;

     Must not retaliate against any other Covered Officer, other officer, or
     employee of ProFutures for reports of potential violations made in good
     faith;

     Must notify the Board of Directors, the Compliance Officer, or legal
     counsel promptly if he/she knows or suspects of any violation of this
     Code.

All reports and records for this Code will be considered confidential. The Code
is intended solely for internal use by ProFutures, and does not constitute an
admission, by or on behalf of ProFutures, as to any fact, circumstance or legal
conclusion.



                                 EXHIBIT 31.01
                                 CERTIFICATION
                                 -------------



I, Gary D. Halbert, certify that:

1. I have reviewed this report on Form 10-K of ProFutures Diversified
Fund, L.P.;

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

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

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

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

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

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

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

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

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



Date:  March 26, 2004
       ----------------------------------



/s/ Gary D. Halbert
-----------------------------------------
Gary D. Halbert, President
ProFutures, Inc., General Partner



                                 EXHIBIT 31.02
                                 CERTIFICATION
                                 -------------



I, Debi B. Halbert, certify that:

1. I have reviewed this report on Form 10-K of ProFutures Diversified
Fund, L.P.;

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

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

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

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

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

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

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

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

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



Date:  March 26, 2004
       ----------------------------------



/s/ Debi B. Halbert
-----------------------------------------
Debi B. Halbert, Chief Financial Officer
ProFutures, Inc., General Partner



                                 EXHIBIT 32.01
                                 CERTIFICATION
                                 -------------



I, Gary D. Halbert, the President of ProFutures, Inc., as general partner of
ProFutures Diversified Fund, L.P., certify that (i) the Form 10-K for the year
ended December 31, 2003 of ProFutures Diversified Fund, L.P. fully
complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 and (ii) the information contained in the Form 10-K for
the year ended December 31, 2003 fairly presents, in all material respects,
the financial condition and results of operations of ProFutures Diversified
Fund, L.P.

                                       PROFUTURES DIVERSIFIED FUND, L.P.
                                       By:  ProFutures, Inc., general partner



                                       By:  /s/ Gary D. Halbert
                                            ---------------------------------
                                            Gary D. Halbert
                                            President
                                            March 26, 2004



                                 EXHIBIT 32.02
                                 CERTIFICATION
                                 -------------



I, Debi B. Halbert, the Chief Financial Officer of ProFutures, Inc., as general
partner of ProFutures Diversified Fund, L.P., certify that (i) the Form 10-K
for the year ended December 31, 2003 of ProFutures Diversified Fund, L.P.
fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 and (ii) the information contained in the Form
10-K for the year ended December 31, 2003 fairly presents, in all material
respects, the financial condition and results of operations of ProFutures
Diversified Fund, L.P.

                                       PROFUTURES DIVERSIFIED FUND, L.P.
                                       By:  ProFutures, Inc., general partner



                                       By:  /s/ Debi B. Halbert
                                            ---------------------------------
                                            Debi B. Halbert
                                            Chief Financial Officer
                                            March 26, 2004