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, 2005

                        ------------------------------

                        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.
                              11719 Bee Cave Road
                                   Suite 200
                              Austin, Texas 78738

                           ------------------------
                   (Address of principal executive offices)
                        Partnership's telephone number
                                (800) 348-3601
                                --------------
<TABLE>
<CAPTION>
<S>                                                                  <C>
Securities registered pursuant to Section 12(b) of the Act
                 Title of each class.                                Name of each exchange on which registered.

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</TABLE>

          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 a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check
one):

Large accelerated filer [ ]  Accelerated Filer [ ]  Non-accelerated filer [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.)



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<PAGE>

Not applicable

                      DOCUMENTS INCORPORATED BY REFERENCE

Registrant's Financial Statements for the Years ended December 31, 2005, 2004
and 2003 with Reports of Independent Registered Public Accounting Firms, the
annual report to securities holders for the fiscal year ended December 31,
2005, is incorporated by reference into Part II Item 8 and Part IV hereof and
filed as an exhibit herewith. Portions of the Registrant's Prospectus dated
July 31, 1994 and Supplement dated January 31, 1995 Post-Effective Amendment
No. 3 dated June 23, 1995 also are incorporated by reference in Part I, Part
II, Part III and Part IV of this Form 10-K



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<PAGE>

                                    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 11719 Bee Cave Road,
     Suite 200, 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, 2005, there are five Commodity Trading Advisors: Campbell &
     Company, Inc., Grinham Managed Funds Pty. Ltd., Winton Capital Management
     Limited, Forecast Trading Group, LLC and Tucson Asset Management, Inc.
     (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.



                                    Page 3
<PAGE>

     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. Effective October 16,
     2004, the Partnership pays the General Partner an additional monthly
     management fee of .0625% (.75% annually) of the Partnership's month-end
     Net Asset Value for consulting services rendered to the Partnership.

     On October 25, 2004, the Partnership entered into a consulting agreement
     effective November 1, 2004, with Altegris Investments, Inc. (Altegris),
     whereby Altegris will recommend the selection and termination of the
     Advisors and the allocation and reallocation of the Partnership's assets.
     Pursuant to the consulting agreement, Altegris receives a monthly
     consulting fee equal to .0208% (.25% annually) of the Partnership's
     month-end Net Asset Value. The consulting fee (included in management
     fees in the statement of operations) earned by Altegris totaled $89,079
     and $13,651 for the years ended December 31, 2005 and 2004.

     Prior to October 15, 2004, Kenmar Global Strategies Inc. (Kenmar)
     assisted the General Partner in making decisions about which Advisors to
     hire, the allocations among the Advisors and the day-to-day monitoring
     and risk management of the Partnership's trading activities. Kenmar
     received a monthly management fee of 1/12 of 1% (1% annually) of
     month-end Net Asset Value. Effective October 15, 2004, ProFutures, Inc.
     terminated the consulting agreement between Kenmar and the Partnership.
     Accordingly, Kenmar was paid a pro rated monthly management fee for the
     period October 1, 2004 through October 15, 2004. Management fees earned
     by Kenmar totaled $266,317 and $342,122 for the years ended December 31,
     2004 and 2003, respectively.

     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 of
     20% 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



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<PAGE>

     Advisors. Similarly, the Partnership may renew its relationship with each
     Advisor on the same or different terms.

     Notional Funding Note: As of December 31, 2005, the Partnership has
     allocated notional funds to Advisors equal to approximately 38% 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 .8% 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 Partnership deposits funds with Man Financial Inc. 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.

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



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<PAGE>

     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 1A.  Risk Factors.

Market Risks
------------

     Possible Total Loss of an Investment in the Partnership.

     Futures and forward contracts have a high degree of price variability and
     are subject to occasional rapid and substantial changes. Consequently, an
     investor could lose all or substantially all of its investment.

     The Units Will be Highly Leveraged.

     Because the amount of margin funds necessary to be deposited with a
     clearing broker in order to enter into a futures or forward contract
     position is typically about 2% to 10% of the total value of the contract,
     the Partnership will be able to hold positions with face values equal to
     several times the Partnership's net assets. As a result of this
     leveraging, even a small movement in the price of a contract can cause
     major losses. The General Partner will monitor the leverage of the
     Partnership regularly but is not limited by the amount of leverage it may
     employ.

     Illiquidity of an Investment.

     There is no secondary market for the Units. While the Units have
     redemption rights, there are restrictions. For example, redemptions can
     occur only at the end of a month. If a large number of redemption
     requests



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     were to be received at one time, the Partnership might have to liquidate
     positions to satisfy the requests. Such a forced liquidation could
     adversely affect the Partnership and consequently an investor's
     investment. Transfers of the Units are subject to limitations.

     Market Illiquidity.

     Futures and forward positions cannot always be liquidated at the desired
     price. It is difficult to execute a trade at a specific price when there
     is a relatively small volume of buy and sell orders in a market. A market
     disruption, such as when foreign governments may take or be subject to
     political actions which disrupt the markets in their currency or major
     exports, can also make it difficult to liquidate a position. Unexpected
     market illiquidity has caused major losses in recent years in such
     sectors as emerging markets and mortgage backed securities. There can be
     no assurance that the same will not happen to the Partnership at any time
     or from time to time. The large size of the positions which the General
     Partner anticipates the Advisors acquiring for the Partnership increases
     the risk of illiquidity by both making its positions more difficult to
     liquidate and increasing the losses incurred while trying to do so.

     Forward Transactions are Not Regulated and are Subject to Credit Risk.

     The Partnership trades forward contracts in foreign currencies. Forward
     contracts are typically traded through a dealer market which is dominated
     by major money center banks and is not regulated by the CFTC. Thus,
     investors do not receive the protection of CFTC regulation or the
     statutory scheme of the Commodity Exchange Act in connection with this
     trading activity by the Partnership. Also, the Partnership faces the risk
     of non-performance by the counterparties to the forward contracts and
     such non-performance may cause some or all of your gain to be unrealized.

     Non-Correlated, Not Negatively Correlated, Performance Objective.

     Historically, managed futures have been generally non-correlated to the
     performance of other asset classes such as stocks and bonds.
     Non-correlation means that there is no statistically valid relationship
     between the past performance of futures and forward contracts on the one
     hand and stocks or bonds on the other hand. Non-correlation should not be
     confused with negative correlation, where the performance of two asset
     classes would be exactly opposite. Because of this non-correlation, the
     Partnership cannot be expected to be automatically profitable during
     unfavorable periods for the stock market, or vice versa. The futures,
     forward and swap markets are fundamentally different from the securities
     markets in that for every gain made in a futures, forward or swap
     transaction, the opposing side of that transaction will have an equal and
     offsetting loss. If the Partnership does not perform in a manner
     non-correlated with the general financial markets or does not perform
     successfully, investors will obtain no diversification benefits by
     investing in the Units and the Partnership may have no gains to offset an
     investor's losses from other investments.

     Foreign Currency Trading.

     Cash foreign currency markets are substantially unregulated and price
     movements in such markets are caused by many unpredictable factors
     including general economic and financial conditions, governmental
     policies, national and international political and economic events, and
     changes in interest rates. Such factors combined with the lack of
     regulation could expose the Partnership to significant losses which it
     might otherwise have avoided. Positions in cash foreign currencies can be
     established using less margin than is typical for futures contracts.
     Thus, a small movement in the price of the underlying currency can result
     in a substantial price movement relative to the margin deposit. In
     addition, cash foreign currencies are traded through a dealer market and
     not on an exchange. This presents the risks of both counterparty
     creditworthiness and possible default or bankruptcy by the counterparty.

Trading Risks
-------------

     There are disadvantages to making trading decisions based on technical
     analysis.

     The Advisors may base their trading decisions on trading strategies that
     use mathematical analyses of technical factors relating to past market
     performance. The buy and sell signals generated by a technical,
     trend-following trading strategy are derived from a study of actual
     daily, weekly and monthly price



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<PAGE>

     fluctuations, volume variations and changes in open interest in the
     markets. The profitability of any technical, trend-following trading
     strategy depends upon the occurrence in the future of significant,
     sustained price moves in some of the markets traded. A danger for
     trend-following traders is whip-saw markets, that is, markets in which a
     potential price trend may start to develop but reverses before an actual
     trend is realized. A pattern of false starts may generate repeated entry
     and exit signals in technical systems, resulting in unprofitable
     transactions. In the past, there have been prolonged periods without
     sustained price moves. Presumably these periods will continue to occur.
     Periods without sustained price moves may produce substantial losses for
     trend-following trading strategies. Further, any factor that may lessen
     the prospect of these types of moves in the future, such as increased
     governmental control of, or participation in, the relevant markets, may
     reduce the prospect that any trend- following trading strategy will be
     profitable in the future.

     There are disadvantages to making trading decisions based on fundamental
     analysis.

     Certain Advisors may base their decisions on trading strategies which
     utilize in whole or in part fundamental analysis of underlying market
     forces. Fundamental analysis attempts to examine factors external to the
     trading market which affect the supply and demand for a particular
     commodity interest in order to predict future prices. Such analysis may
     not result in profitable trading because certain Trading Advisors may not
     have knowledge of all factors affecting supply and demand or may
     incorrectly interpret the information it does have. Furthermore, prices
     may often be affected by unrelated or unexpected factors and fundamental
     analysis may not enable the trader to determine whether its previous
     decisions where incorrect in sufficient time to avoid substantial losses.
     In addition, fundamental analysis assumes that commodity markets are
     inefficient-- i.e., that commodity prices do not always reflect all
     available information--which some market analysts dispute.

     The use of multiple Advisors may result in offsetting or opposing trading
     positions and may also require one Advisor to fund the margin
     requirements of another Advisor.

     The use of multiple Advisors may result in developments or positions that
     adversely affect the Partnership's Net Asset Value. For example, because
     the Advisors trading will be acting independently, the Partnership could
     buy and sell the same futures contract, thereby incurring additional
     expenses but with no net change in its holdings. The Advisors also may
     compete, from time to time, for the same trades or other transactions,
     increasing the cost to the Partnership of making trades or transactions
     or causing some of them to be foregone altogether. Even though each
     Advisor's margin requirements ordinarily will be met from that Advisor's
     allocated net assets, one Advisor may incur losses of such magnitude that
     the Partnership is unable to meet margin calls from the allocated net
     assets of that Advisor. If such an event were to occur, then the
     Partnership's clearing brokers may require liquidations and contributions
     from the allocated net assets of another Advisor.

     Speculative Position Limits May Alter Trading Decisions for the
     Partnership.

     The CFTC has established limits on the maximum net long or net short
     positions which any person may hold or control in certain futures
     contracts. Exchanges also have established such limits. All accounts
     controlled by the General Partner, including the account of the
     Partnership, are combined for speculative position limit purposes. If
     positions in those accounts were to approach the level of the particular
     speculative position limit, such limits could cause a modification of the
     General Partner's trading decisions for the Partnership or force
     liquidation of certain futures positions.

     Increase in Assets Under Management May Affect Trading Decisions.

     The more assets the General Partner manages, the more difficult it may be
     for the General Partner to trade profitably because of the difficulty of
     trading larger positions without adversely affecting prices and
     performance. Accordingly, such increases in equity under management may
     require the General Partner to modify its trading decisions for the
     Partnership which could have a detrimental effect on an investor's
     investment.



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<PAGE>

     The Partnership's Trading is Not Transparent.

     The General Partner makes the Partnership's trading decisions. While the
     General Partner receives daily trade confirmations from its clearing
     brokers, only the Partnership's net trading results are reported to
     investors and only on a monthly basis. Accordingly, an investment in the
     Partnership does not offer investors the same transparency, i.e., an
     ability to review all investment positions daily, that a personal trading
     account offers.

Tax Risks
---------

     Investors are Taxed Based on Their Share of Profits in the Partnership.

     Investors are taxed each year on their share of the Partnership's
     profits, if any, irrespective of whether they redeem any Units or receive
     any cash distributions from the Partnership. All performance information
     provided by the Partnership is presented on a pre-tax basis; investors
     who experience such performance may have to redeem Units or pay the
     related taxes from other sources.

     Tax Could be Due From Investors on Their Share of the Partnership's
     Ordinary Income Despite Overall Losses.

     Investors may be required to pay tax on their allocable share of the
     Partnership's ordinary income, which is the Partnership's interest income
     and gain on some foreign futures contracts, even though the Partnership
     incurs overall losses. Capital losses can be used only to offset capital
     gains and $3,000 of ordinary income each year. Consequently, if an
     investor were allocated $5,000 of ordinary income and $10,000 of capital
     losses, the investor would owe tax on $2,000 of ordinary income even
     though the investor would have a $5,000 loss for the year. The $7,000
     capital loss carry forward could be used in subsequent years to offset
     capital gain and ordinary income, but subject to the same annual
     limitation on its deductibility against ordinary income.

     Deductibility of Management and Performance Fees.

     Although the Partnership treats the management fees and advisory fees
     paid and other expenses of the Partnership as ordinary and necessary
     business expenses, upon audit the Partnership may be required to treat
     such fees as "investment advisory fees" if the Partnership's trading
     activities were determined to not constitute a trade or business for tax
     purposes. If the expenses were investment advisory expenses, an
     investor's tax liability would likely increase. In addition, upon audit,
     a portion of the management and performance fees might be treated as a
     non-deductible syndication cost or might be treated as a reduction in the
     Partnership's capital gain or as an increase in the Partnership's capital
     loss. If the management and performance fees were so treated, an
     investor's tax liability would likely increase.

Other Risks
-----------

     Fees and Commissions are Charged Regardless of Profitability and are
     Subject to Change.

     The Partnership is subject to substantial charges payable irrespective of
     profitability in addition to advisory fees which are payable based on an
     Advisor's profitability. Included in these charges are management,
     organization and offering, and brokerage fees and operating expenses. On
     the Partnership's forward trading, "bid-ask" spreads and prime brokerage
     fees are incorporated into the pricing of the Partnership's forward and
     swap contracts, respectively, by the counterparties in addition to the
     brokerage fees paid by the Partnership. It is not possible to quantify
     the "bid-ask" spreads and prime brokerage fees paid by the Partnership
     because the Partnership cannot determine the profit its counterparty is
     making on its forward and swap transactions. Such spreads can at times be
     significant. In addition, Advisors may be changed from time to time,
     leading to changes to the management fees and advisory fees paid by the
     Partnership.

     Failure of Brokerage Firms; Disciplinary History of Clearing Brokers.

     The Commodity Exchange Act requires a clearing broker to segregate all
     funds received from customers from such broker's proprietary assets. If
     any of the clearing brokers fails to do so, the assets of the



                                    Page 9
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     Partnership might not be fully protected in the event of the bankruptcy
     of the clearing broker. Furthermore, in the event of any of the clearing
     broker's bankruptcy, the Partnership could be limited to recovering only
     a pro rata share of all available funds segregated on behalf of the
     clearing broker's combined customer accounts, even though certain
     property specifically traceable to the Partnership (for example, Treasury
     bills deposited by the Partnership with the clearing broker as margin)
     was held by the clearing broker. The clearing brokers have been the
     subject of certain regulatory and private causes of action in the past
     and may be again in the future. Such actions could affect the ability of
     a clearing firm to conduct its business. Furthermore, dealers in forward
     contracts are not regulated by the Commodity Exchange Act and are not
     obligated to segregate customer assets. As a result, you do not have such
     basic protections in forward contracts.

     Investors Must Not Rely on Past Performance of the General Partner in
     Deciding Whether to Buy Units.

     The future performance of the Partnership is not predictable, and no
     assurance can be given that the Partnership will perform successfully in
     the future. Past performance of a trading program is not necessarily
     indicative of future results.

     Lack of Independent Experts Representing Investors.

     The General Partner has consulted with counsel, accountants and other
     experts regarding the formation and operation of the Partnership. No
     counsel has been appointed to represent the investors in connection with
     the offering of the Units. Accordingly, each prospective investor should
     consult his own legal, tax and financial advisers regarding the
     desirability of an investment in the Partnership.

     Reliance on the General Partner.

     The incapacity of the General Partner's principals could have a material
     and adverse effect on the General Partner's ability to discharge its
     obligations to the Partnership. Neither the General Partner nor its
     principals are under any obligation to devote a minimum amount of time to
     the Partnership.

     Possibility of Termination of the Partnership Before Expiration of its
     Stated Term.

     The General Partner may withdraw from the Partnership upon 120 days'
     notice, which would cause the Partnership to terminate. Other events,
     such as a long-term substantial loss suffered by the Partnership, could
     also cause the Partnership to terminate before the expiration of its
     stated term. This could cause an investor to liquidate its investments
     and upset the overall maturity and timing of such investor's investment
     portfolio. If the registrations with the CFTC or memberships in the NFA
     of the General Partner or the clearing brokers were revoked or suspended,
     such entity would no longer be able to provide services to the
     Partnership.

     The Partnership is Not a Regulated Investment Company.

     Although the General Partner is subject to regulation by the CFTC, the
     Partnership is not an investment company subject to the Investment
     Company Act of 1940. Accordingly, investors do not have the protections
     afforded by that statute which, for example, require investment companies
     to have a majority of disinterested directors and regulate the
     relationship between the adviser and the investment company.

     Proposed Regulatory Change is Impossible to Predict.

     The futures markets are subject to comprehensive statutes, regulations
     and margin requirements. In addition, the CFTC and the exchanges are
     authorized to take extraordinary actions in the event of a market
     emergency, including, for example, the retroactive implementation of
     speculative position limits or higher margin requirements, the
     establishment of daily price limits and the suspension of trading. The
     regulation of futures and forward transactions in the United States is a
     rapidly changing area of law and is subject to modification by government
     and judicial action. In addition, various national governments have
     expressed concern regarding the disruptive effects of speculative trading
     in the currency markets and the need to regulate the "derivatives"
     markets in general. The effect of any future regulatory change on the
     Partnership is impossible to predict, but could be substantial and
     adverse.



                                    Page 10
<PAGE>

     Forwards, Swaps, Hybrids and Other Derivatives are Not Subject to CFTC
     Regulation.

     The Partnership may trade foreign exchange contracts in the interbank
     market. In addition to swaps, the Partnership may also trade hybrid
     instruments and other off-exchange contracts. Swap agreements involve
     trading income streams such as fixed rate for floating rate interest.
     Hybrids are instruments which combine features of a security with those
     of a futures contract. There is no exchange or clearinghouse for these
     contracts, they are not regulated by the CFTC, and traders must rely on
     the creditworthiness of the counterparty to fulfill the obligations of
     the transaction. The Partnership will not receive the protections which
     are provided by the CFTC's regulatory scheme for these transactions.

     Options on Futures are Speculative and Highly Leveraged.

     In the future, options on futures contracts may be used by the
     Partnership to generate premium income or capital gains. Futures options
     involve risks similar to futures in that options are speculative and
     highly leveraged. The buyer of an option risks losing the entire purchase
     price (the premium) of the option. The writer (seller) of an option risks
     losing the difference between the premium received for the option and the
     price of the commodity or futures contract underlying the option which
     the writer must purchase or deliver upon exercise of the option (which
     losses can be unlimited). Specific market movements of the commodities or
     futures contracts underlying an option cannot accurately be predicted.

     The Partnership Will Trade Extensively in Foreign Markets.

     A substantial portion of the Advisors' trades takes place on markets or
     exchanges outside the United States. The risk of loss in trading foreign
     futures contracts and foreign options can be substantial. Participation
     in foreign futures contracts and foreign options transactions involves
     the execution and clearing of trades on, or subject to the rules of, a
     foreign board of trade. Non-U.S. markets may not be subject to the same
     degree of regulation as their U.S. counterparts. None of the CFTC, NFA or
     any domestic exchange regulates activities of any foreign boards of
     trade, including the execution, delivery and clearing of transactions, or
     has the power to compel enforcement of the rules of a foreign board of
     trade or any applicable foreign laws. Trading on foreign exchanges also
     presents the risks of exchange controls, expropriation, taxation and
     government disruptions. The price of any foreign futures or foreign
     options contract and, therefore, the potential profit and loss thereon,
     may be affected by any variance in the foreign exchange rate between the
     time the order is placed and the time it is liquidated, offset or
     exercised. Certain foreign exchanges may also be in a more or less
     developmental stage so that prior price histories may not be indicative
     of current price dynamics. In addition, the Partnership may not have the
     same access to certain positions on foreign exchanges as do local
     traders, and the historical market data on which the General Partner
     bases its strategies may not be as reliable or accessible as it is in the
     United States. The rights of clients (such as the Partnership) in the
     event of the insolvency or bankruptcy of a non-U.S. market or broker are
     also likely to be more limited than in the case of U.S. markets or
     brokers. To the extent that a foreign entity does not have assets
     domiciled in the United States, satisfaction of any judgment against that
     party may be adversely affected.

     Restrictions on Transferability.

     An investor may transfer or assign its Units only upon prior written
     notice to the General Partner and if the General Partner is satisfied
     that the transfer complies with applicable laws and would not affect the
     tax status of the Partnership.

     Money Committed to Margin

     The Partnership may commit a substantial portion of its assets as margin
     for positions held by the clearing brokers. Because such commitment
     typically represents only a small percentage of the total value of such
     positions, adverse price movements can cause losses in excess of such
     commitment and potentially in excess of the total assets of the
     Partnership.



                                    Page 11
<PAGE>

Item 1B.  Unresolved Staff Comments.

     The Partnership has not received written comments from the Commission
     staff regarding its periodic or current reports under the Act within 180
     days before the end of its fiscal year to which this annual report
     relates.

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, 2005, 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, 2005, a total
     of 10,334 Units are outstanding and held by 754 Unit holders, including
     187 Units held by the General Partner and its principals. During the
     calendar year 2005, a total of 1,548 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, 2005, or as of
     the date hereof. A Limited Partner may request and receive redemption of
     Units subject to restrictions in the limited partnership agreement.



                                    Page 12
<PAGE>

Item 6.   Selected Financial Data.

     Following is a summary of certain financial information for the Partnership
     for the calendar years 2005, 2004, 2003, 2002 and 2001.

                                                                2005
                                                        ---------------------


Realized Gains (Losses)                             $               8,085,002
Change in Unrealized
    Gains (Losses) on
    Open Contracts                                                 (1,323,326)
Interest Income                                                       882,295
Management Fees                                                     2,118,910
Incentive Fees                                                        849,102
Net Income (loss)                                                   3,266,075
General Partner Capital                                               560,244
Limited Partner Capital                                            30,380,394
Partnership Capital                                                30,940,638
Net Asset Value per General
    And Limited Partner Unit
    at End of Year                                                   2,994.02
Net Income (loss) per Unit*                                            292.29

                                                                2004
                                                        ---------------------


Realized Gains (Losses)                             $               7,550,029
Change in Unrealized
    Gains (Losses) on
    Open Contracts                                                 (2,384,308)
Interest Income                                                       442,893
Management Fees                                                     2,160,170
Incentive Fees                                                      1,138,118
Net Income (loss)                                                   1,251,915
General Partner Capital                                               607,384
Limited Partner Capital                                            31,474,269
Partnership Capital                                                32,081,653
Net Asset Value per General
    And Limited Partner Unit
    at End of Year                                                   2,699.92
Net Income (loss) per Unit*                                            100.52



                                    Page 13
<PAGE>

                                                                  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



                                    Page 14
<PAGE>

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



                                    Page 15
<PAGE>

     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. 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, 2005
----------------------------

The year 2005 had net income of $3,266,075 or $292.29 per unit. At December
31, 2005, partners' capital totaled $30,940,638, versus $32,081,653 at
December 31, 2004, including capital redemptions of $4,407,090. Net Asset
Value per unit at December 31, 2005 amounted to $2,994.02, as compared to
$2,699.92 at December 31, 2004.

Fourth Quarter 2005
-------------------

The Partnership had a gain of 0.49% in October. The Partnership had large
gains in interest rates and foreign currencies, with smaller gains in base
metals. There were losses mainly in stock indices and energy.

The Partnership had a gain of 4.40% in November. The Partnership had large
gains in foreign currencies, with smaller gains in metals, stock indices and
certain agricultural commodities. There were losses in energy and interest
rates.

The Partnership had a loss of 3.34% in December. The Partnership had gains in
metals and stock indices. There were large losses in foreign currencies,
interest rates and certain agricultural commodities.

For the quarter, the Partnership had a small gain. Many of the gains for the
quarter were from foreign currencies.

Third Quarter 2005
------------------

In the third quarter, many of the ongoing trends in the commodity markets
continued. Interest rates and energy commodities were especially volatile. The
Partnership was able to capitalize on some of the energy trends, while the
interest rate trends mainly resulted in losses.

The Partnership had a loss of 1.27% in July. The Partnership had large gains
in energy, with smaller gains in stock indices. There were losses in foreign
currencies, interest rates, metals and certain agricultural commodities.

The Partnership had a gain of 3.84% in August. The Partnership had very large
gains in energy, with smaller gains in metals. There were losses in
agriculture, stock indices and interest rates.

The Partnership had a loss of 1.61% in September. The Partnership had large
gains in foreign currencies and stock indices, with smaller gains in base
metals. There were large losses in interest rates, with smaller losses in
energy and precious metals.

Overall, the Partnership ended the quarter with a small gain.



                                    Page 16
<PAGE>

Second Quarter 2005
-------------------

The second quarter saw some trends emerge in the commodity markets that the
Partnership was able to capitalize on. Interest rates and the U.S. dollar
trades were especially profitable. Oil prices continued to be volatile.

The Partnership had a loss of 2.61% in April. The Partnership had losses in
energy, stock indices, metals and certain agricultural commodities. There were
large gains in interest rates (especially bonds) and smaller gains in foreign
currencies, but they were not enough to offset the losses in other sectors.

The Partnership had a gain of 5.52% in May. The Partnership had very large
gains in interest rates and foreign currencies, with smaller gains in
equities, agriculture and base metals. There were small losses in energy and
precious metals.

The Partnership had a gain of 4.98% in June. The Partnership had very large
gains in foreign currencies, with smaller gains in interest rates, base
metals, energy, equities and certain agricultural commodities. Losses were
mainly in precious metals.

Overall, the Partnership had a total return of 7.88% for the quarter.

First Quarter 2005
------------------

The first quarter was an especially volatile one for oil prices and for
interest rates. Oil prices continued to climb, and then drop. Short-term
interest rates climbed as the Federal Reserve Bank continued its policy of
raising short-term rates.

The Partnership had a loss of 4.0% in January. The Partnership had some gains
in interest rates and certain agricultural commodities. There were large
losses in foreign currencies, with smaller losses in stock indices, metals and
energy.

The Partnership had a gain of 2.07% in February. The Partnership had large
gains in stock indices, with smaller gains in short-term interest rates,
metals and energy. There were losses, mainly in bonds and agricultural
commodities.

The Partnership had a gain of 2.57% in March. The Partnership had large gains
in energy and interest rates, with smaller gains in base metals and certain
agricultural commodities. Losses were in foreign currencies, stock indices and
certain other agricultural commodities.

The Partnership ended the quarter with a modest gain.

Year Ended December 31, 2004
----------------------------

2004 had net income of $1,251,915 or $100.52 per Unit. At December 31, 2004,
partners' capital totaled $32,081,653, a net decrease of $1,544,028 from
December 31, 2003 including capital redemptions of $2,795,943. Net Asset Value
per Unit at December 31, 2004 amounted to $2,699.92, as compared to $2,598.48
at December 31, 2003, an increase of 3.90%.

The net income for 2004 resulted primarily from trading gains in the energy
and interest rates market sectors, offset by losses in the agricultural and
metals market sectors.

Fourth Quarter 2004
-------------------

The fourth quarter continued to be volatile for the markets, especially the
commodity markets. Oil and currencies were especially volatile. Many believe
the commodity markets will continue to be volatile due in part to increasing
demands on commodities from rapidly growing economies in China and India.



                                    Page 17
<PAGE>

The Partnership had a gain of 2.87% in October. The Partnership achieved gains
in interest rates, foreign currencies and energy, with smaller gains in stock
indices. There were losses in base metals, with smaller losses in agricultural
commodities.

The Partnership had a gain of 4.79% in November. The Partnership's largest
gains were in foreign currencies (the dollar declined in value significantly),
stock indices, interest rates and metals. The Partnership experienced small
losses in energy and certain agricultural commodities.

The Partnership had a loss of 0.69% in December. The Partnership had the
largest gains in equities, with smaller gains in interest rates. There were
losses in energy, foreign currencies, metals and certain agricultural
commodities.

Overall, the Partnership ended the quarter with a total return of 6.97%. For
the fourth quarter 2004, the largest trading gains were in the interest rates
and foreign currency sectors.

Third Quarter 2004
------------------

The economy continued to grow in the third quarter of 2004, though at a slower
pace. The economic news was a little more mixed, with both good news and
not-so-good news. Overall though, the growth is continuing, though rising oil
prices, trading above $50 a barrel, could put a damper on things in the coming
months.

The Partnership had a loss of 0.50% in July 2004. It was once again a very
difficult month in the markets, especially for trend followers. The
Partnership had large gains in energy, with smaller gains in agricultural
commodities and foreign currencies. However, these gains were offset by losses
in equities, interest rates and metals.

The Partnership had a gain of 0.41% in August 2004. The Fund started out
strong in August, but some of the gains were lost as some of the trends
reversed. The Partnership had gains in bonds and interest rates, with smaller
gains in equities. There were losses mainly in foreign currencies, metals and
agricultural commodities.

The Partnership had a loss of 0.16% in September 2004. The Partnership had
large gains in energy, capitalizing on the recent surges in oil prices. There
were also smaller gains in agricultural commodities. There were also losses in
equities, foreign currencies, interest rates and metals.

Overall, the Partnership ended the third quarter 2004 with a total return of
(0.25)% for the quarter and (2.94)% for the nine months ended September 30,
2004. For the third quarter 2004, the majority of the Partnership's trading
gains were in the energy and interest rates sectors and the largest losses
were in the equities and foreign currencies sectors.

Second Quarter 2004
-------------------

The economic recovery continued in the second quarter of 2004, and most
economic news was positive, though there was a little slowdown in June. The
futures markets were again volatile, especially in energy, interest rates and
currencies.

The Partnership had a loss of 7.27% in April 2004. The Partnership had large
losses in metals, interest rates, equities and foreign currencies, as well as
smaller losses in agriculture. The only bright spot was energy, where there
were some modest gains.

The Partnership had a loss of 0.33% in May 2004. The Partnership had large
gains in energy, with smaller gains in foreign currencies and base metals.
There were losses in equities, agriculture, interest rates and precious
metals. Campbell and Winton, our main trend-followers were essentially flat in
May.

The Partnership had a loss of 5.30% in June 2004, which was another very
volatile and difficult month in the markets. The Partnership had losses in
nearly all sectors. Losses were especially large in foreign currencies and
energy.



                                    Page 18
<PAGE>

Overall, the Partnership had a total return of (12.48)% for the quarter and
(2.70)% for the six months ended June 30, 2004. For the second quarter 2004,
the majority of the Partnership's trading gains were in the energy sector and
the largest loss was in foreign currencies.

First Quarter 2004
------------------

The economy continued to improve in the first quarter of 2004, and most
economic news was positive. The futures markets continued to be volatile,
especially energy and currencies.

The Partnership had a gain of 1.55% in January 2004. There were gains in
foreign currencies, stock indices and base metals, with smaller gains in
energy and interest rates. There were some losses in agriculture and precious
metals.

In February 2004, the Partnership had a gain of 8.80%. The largest gains were
in foreign currencies and interest rates, with smaller gains in energy,
agricultural commodities, metals and stock indices.

In March 2004, the Partnership had a gain of 0.62%. There were gains in
interest rates, agricultural commodities and metals. Most of these gains were
offset by losses in foreign currencies and equities.

Overall, the Partnership ended the quarter with a total return of 11.17%. The
largest trading gains were in the foreign currencies, interest rate and metal
sectors.

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 indices, 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.



                                    Page 19
<PAGE>

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 indices, 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 indices 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 indices 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 indices. 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 indices. 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 indices 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.



                                    Page 20
<PAGE>

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.

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.



                                    Page 21
<PAGE>

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, 2005 and
2004. All open position trading risk exposures of the Partnership have been
included in calculating the figures set forth below. As of December 31, 2005
and 2004, the Partnership's total capitalization was approximately $30.9
million and $32.1 million, respectively.

<TABLE>
<CAPTION>
                                             December 31,                                      December 31,
                                                 2005                                              2004
                                          -------------------                               -------------------
                                                                  % of                                            % of
                                  Value at                       Total              Value at                      Total
      Market Sector                  Risk                    Capitalization           Risk                   Capitalization
      -------------                  ----                    --------------           ----                   --------------
<S>                              <C>                               <C>               <C>                           <C>
Agriculture                      $     136,499                      0.44%            $    213,471                   0.67%
Currencies                             836,650                      2.70%               1,267,315                   3.95%
Energy and Other                        56,400                      0.18%                 135,190                   0.42%
Stock Indices                          990,332                      3.20%               1,753,085                   5.46%
Interest Rates                         994,297                      3.21%               1,231,253                   3.84%
Metals                                 245,009                      0.79%                 328,433                   1.02%
                                    ----------                   --------              ----------                --------

          Total                     $3,259,187                     10.52%              $4,928,747                  15.36%
                                    ==========                     ======              ==========                  ======
</TABLE>

The following table indicates the total annual returns for 2005 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
2005.

                                                      Trading
                                                    Gain/ (Loss)
                                                    ------------
   Agriculture                                          (0.04) %
   Currencies                                            2.71  %
   Energy and Other                                      6.15  %
   Stock Indices                                         3.69  %
   Interest Rates                                        4.66  %
   Metals                                                5.24  %
                                                     -----------

                                                        22.41  %
                                                     ===========

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



                                    Page 22
<PAGE>

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, 2005, 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, 2005, 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, 2005, the
Partnership's primary exposures were to aluminum, nickel, copper, tin, gold,
silver, lead, zinc and platinum. The General Partner anticipates that the
Partnership will continue to be exposed to the metals markets.

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

The Partnership's primary agriculture 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 cattle, lumber, grains and soybean and food/fiber products as of December
31, 2005.

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, 2005, the Partnership's primary
exposures were in Australian Dollars, Canadian 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.



                                    Page 23
<PAGE>

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 rise, then cash flow from interest income related
to broker deposits will increase. 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.



                                    Page 24
<PAGE>

Item 8.   Financial Statements and Supplementary Data.

     Financial statements meeting the requirements of Regulation S-X are
     listed following this report. The following is the Supplementary
     Financial information specified by Item 302 of Regulation S-K for the
     years 2005 and 2004.

<TABLE>
<CAPTION>
                                  1st Qtr 2005    2nd Qtr 2005    3rd Qtr 2005     4th Qtr 2005
                                 -----------------------------------------------------------------

<S>                                <C>            <C>                <C>             <C>
Gain (loss) from trading              $807,186      $3,077,926        $741,073         $994,075
Net investment (loss)                (660,122)       (688,585)       (456,950)        (548,528)
Net Income (loss)                      147,064       2,389,341         284,123          445,547

Net income (loss) per Unit               12.44          210.11           25.97            42.17
Increase (decrease) in
   Net Asset Value per Unit              13.41          213.81           25.49            41.39

Net Asset Value per Unit
   at end of period                   2,713.33        2,927.14        2,952.63         2,994.02




                                  1st Qtr 2004    2nd Qtr 2004    3rd Qtr 2004     4th Qtr 2004
                                 -----------------------------------------------------------------

Gain (loss) from trading            $5,320,555    $(4,042,807)        $371,222       $2,660,482
Net investment (loss)              (1,593,519)       (503,276)       (450,004)        (510,738)
Net Income (loss)                    3,727,036     (4,546,083)        (78,782)        2,149,744

Net income (loss) per Unit              290.01        (360.71)          (6.40)           178.43
Increase (decrease) in
   Net Asset Value per Unit             290.36        (360.50)          (6.28)           177.86

Net Asset Value per Unit
   at end of period                   2,888.84        2,528.34        2,522.06         2,699.92
</TABLE>


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

     Previously disclosed.

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.



                                    Page 25
<PAGE>

                                   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 as 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.

     ProFutures, Inc. has adopted a code of ethics that applies to the
     Partnership and its affiliates as well as the executive officers of the
     General Partner. A copy of the code of ethics may be obtained at no
     charge by written request to the corporate secretary of ProFutures, Inc.,
     11719 Bee Cave Road, Suite 200, Austin, Texas 78738.

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 $1,201,191 for 2005.

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

     (a)  As of December 31, 2005, a total of 10,334 Units are issued and
          outstanding, representing 1 General Partner and 753 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 187 Units as of
          December 31, 2005, having an aggregate value of $560,244, which is
          approximately 1.8% 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.

     KBA Group LLP, as principal accountant for the year 2005, and Arthur F.
     Bell, Jr. & Associates, L.L.C., as principal accountant for the year
     2004, billed the Partnership aggregate fees for services rendered to the
     Partnership for the years 2005 and 2004, respectively, as follows:

                                          2005                  2004

      Audit Fees (1)               $              7,000  $           49,936
      Audit-Related Fees (2)       $                  0  $           39,330
      Tax Fees (3)                 $                  0  $            7,703
      All Other Fees (4)           $                  0  $            3,600



                                    Page 26
<PAGE>

     (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 and Financial Statement Schedules.

     (a)(1) Financial Statements.

            The following are included with the 2005 Report of Independent
            Registered Public Accounting Firm, a copy of which is filed
            herewith as Exhibit 13.01

                  Affirmation of ProFutures, Inc.
                  Reports of Independent Registered Public Accounting Firms
                  Statements of Financial Condition
                  Condensed Schedules of Investments
                  Statements of Operations
                  Statements of Changes in Partners' Capital
                  Notes to Financial Statements


     (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.



                                    Page 27
<PAGE>

               *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.

     (b)  Exhibits.

          13.1   2005 Report of Independent Registered Public Accounting Firm.

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

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

          32.1   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.

          32.2   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.

     (c)  Financial Statement Schedules.

          Not Applicable or information included in the financial statements.




-------------------------
*    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.



                                    Page 28
<PAGE>

                                  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 29, 2006                           By /s/ GARY D. HALBERT
-------------------------------             ----------------------------------
Date                                         Gary D. Halbert, President
                                               and Director
                                             ProFutures, Inc.
                                             General Partner



March 29, 2006                           By /s/ DEBI B. HALBERT
-------------------------------             ----------------------------------
Date                                         Debi B. Halbert, Chief Financial
                                               Officer, Treasurer and Director
                                             ProFutures, Inc.
                                             General Partner



                                    Page 29
<PAGE>

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 29, 2006                           By /s/ GARY D. HALBERT
-------------------------------             ----------------------------------
Date                                         Gary D. Halbert, President
                                               and Director
                                             ProFutures, Inc.
                                             General Partner



March 29, 2006                           By /s/ DEBI B. HALBERT
-------------------------------             ----------------------------------
Date                                         Debi B. Halbert, Chief Financial
                                               Officer, Treasurer and Director
                                             ProFutures, Inc.
                                             General Partner



                                    Page 30