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, 2006
                            -----------------------

                         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

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

      Securities registered pursuant to              Name of each exchange on
Section 12(b) of the Act Title of each cass.             which registered.
---------------------------------------------     -----------------------------

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

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

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

Yes [X]   No [  ]

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

[X]

Indicate by check mark whether the registrant is 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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Not applicable

                      DOCUMENTS INCORPORATED BY REFERENCE

Registrant's Financial Statements for the Years ended December 31, 2006, 2005
and 2004 with Reports of Independent Registered Public Accounting Firms, the
annual report to securities holders for the fiscal year ended December 31,
2006, 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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                                     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, 2006, there are four Commodity Trading Advisors and one
      commodity fund: Campbell & Company, Inc., Forecast Trading Group, LLC,
      Xplor Capital Management, LLC, Ansbacher Investment Management, Inc. and
      the Winton Futures Fund LP (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.


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      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.

Investment in Commodity Funds
-----------------------------

      The ProFutures Diversified Fund L.P. (the "Partnership") has invested in
      futures funds for two reasons. The industry is trending toward the use of
      funds rather than individual managed accounts. The top tier Commodity
      Trading Advisors (CTA) only offer their investment management through one
      of their funds (i.e. Winton Futures Fund). They do not want investors to
      know the specifics of their daily trading positions, so no one can
      duplicate their methodology.

      The top tier CTAs often require at least a $10 million trading level. The
      Partnership net asset value is less than $30 million, with a trading
      level as high as $38 million. The minimum trading levels for these top
      tier CTAs require a higher allocation than desired for diversification
      and management of risk to the partners. The minimum investment for the
      funds ranges from $50,000 to $1 million. The replacement of CTA managed
      accounts with funds potentially allows for greater diversification, less
      risk and increased flexibility in managing 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 $75,247
      and $80,079 for the years ended December 31, 2006 and 2005.

      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 for the year ended December 31, 2004.



                                    Page 4
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      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 Advisors. Similarly, the
      Partnership may renew its relationship with each Advisor on the same or
      different terms.

      Notional Funding Note: As of December 31, 2006, the Partnership has
      allocated notional funds to Advisors equal to approximately 24% 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 1.1% 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.



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Regulation
----------

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

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

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

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

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

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

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

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

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

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

Item 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.


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      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 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



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      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 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



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      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.

      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



                                    Page 9
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      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 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.



                                    Page 10
<PAGE>

      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.

      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.



                                    Page 11
<PAGE>

      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.

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, 2006, 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, 2006, a total
      of 8,903.6039 Units are outstanding and held by 654 Unit holders,
      including 187.1212 Units held by the General Partner and its principals.
      During the calendar year 2006, a total of 1,430.5486 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, 2006, 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 2006, 2005, 2004, 2003 and 2002.

                                                               2006
                                                          ---------------

Realized Gains (Losses)                               $        1,553,478
Change in Unrealized
   Gains (Losses) on
   Open Contracts                                              1,943,771
Income from Investment in
   Winton Futures Fund                                           398,122
Interest Income                                                1,292,259
Management Fees                                                1,944,002
Incentive Fees                                                   530,112
Net Income (loss)                                              1,608,816
General Partner Capital                                          592,117
Limited Partner Capital                                       27,581,995
Partnership Capital                                           28,274,112
Net Asset Value per General
   And Limited Partner Unit
   at End of Year                                               3,164.35
Net Income (loss) per Unit*                                       165.07


                                                               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



                                    Page 13
<PAGE>

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


                                                               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

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.


                                    Page 14
<PAGE>

      Critical Accounting Policies

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

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

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

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

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

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

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


                                    Page 15
<PAGE>

      (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, 2006
----------------------------

The year 2006 had net income of $1,608,816 or $165.07 per unit. At December 31,
2006, partners' capital totaled $28,174,112, versus $30,940,638 December 31,
2005, including capital redemptions of $4,375,342. Net Asset Value per unit at
December 31, 2006 amounted to $3,164.35, as compared to $2,994.02 at December
31, 2005, an increase of 5.69%.

Fourth Quarter 2006
-------------------

The Fourth Quarter saw volatility in the equities and currencies. The
Partnership had large gains in equities and currencies with smaller gains in
agricultural commodities and with very little of those gains offset by losses
in long-term interest rates and energy.

The Partnership had a gain of 1.73% in October. The Partnership had gains in
equities, currencies and agricultural commodities; losses were mainly in
interest rates.

The Partnership had a gain of 1.57% in November. The Partnership had gains in
currencies, equities and precious metals; losses were mostly in interest rates.

The Partnership had a gain of 3.35% in December. The Partnership had large
gains in equities and currencies with smaller gains in interest rates; losses
were in precious metals, energy and agricultural commodities.

The Partnership ended the quarter with a gain of 6.8%.

Third Quarter 2006
------------------

The Third Quarter saw volatility in the energy, interest rates, currencies, and
the precious metals markets. The Partnership had large losses in energy with
other losses in agricultural commodities, short-term and intermediate interest
rates, and precious metals; with very little of these losses offset by gains in
the stock indexes, currencies, base metals and long-term interest rate markets.
The current economic and interest rate uncertainty, coupled with international
tensions, is creating a very tense and unsettling environment in the markets.
Much of the uncertainty in the markets is due to the growing reality that the
US and the global economies are slowing down. Demand for most commodities
decreases as the economy slows down. A heated debate also remains over the
direction of inflation, which has a significant impact on many commodity
prices.

The Partnership had a loss of 1.56% in July. The Partnership had losses in
interest rates, agricultural commodities and energy; gains were mainly in
currencies and metals.

The Partnership had a gain of 0.52% in August. The Partnership had gains in
interest rates and foreign currencies that were largely offset by losses in
energy and to a lesser extent base metals and stock indexes.

The Partnership had a loss of 2.14% in September. The Partnership had large
losses in energy with small losses in metals, currencies, bonds and certain
agricultural commodities; gains were in stock indexes and bonds.

The Partnership ended the Quarter with a loss of 3.16%.



                                    Page 16
<PAGE>

Second Quarter 2006
-------------------

The second quarter once again saw continued volatility in the oil, interest
rates and the precious metals markets. May and June were difficult months for
most Trading Advisors and futures funds, primarily due to severe reversals in
numerous trends that had been in place for several months. The trend reversals
resulted in earlier gains being wiped out by the end of the quarter.

The Partnership had a gain of 3.69% in April. The Partnership had very large
gains in base and precious metals, with smaller gains in interest rates, energy
and stock indices. Losses were in foreign currencies and certain agricultural
commodities.

The Partnership had a loss of 2.67% in May. The Partnership had gains in
precious metals, base metals and foreign currencies. There were losses in
interest rates, energy, stock indices and certain agricultural commodities.

The Partnership had a loss of 2.21% in June. The Partnership's only gains were
in short-term interest rates. There were losses in all the other sectors,
including energy, foreign currencies, metals, certain agricultural commodities,
stock indices and medium and long-term interest rates.

The Partnership ended the quarter with a loss of 1.19%.

First Quarter 2006
------------------

The first quarter saw continued volatility in the oil, interest rates and
precious metals markets, especially gold. Oil prices continued their climb,
with some modest drops along the way. Interest rates were somewhat volatile as
investors tried to anticipate how far the Fed was going to go in its rate
hiking activity. Gold prices reached highs not seen in decades.

In January, the Partnership gained 2.38%. The Partnership had very large gains
in stock indices, with smaller gains in energy and metals. There were losses in
foreign currencies, interest rates and certain agricultural commodities.

The Partnership had a loss of 2.45% in February. The Partnership had gains in
stock indices. There were large losses in energy and foreign currencies, with
smaller losses in metals, interest rates and certain agricultural commodities.

The Partnership had a gain of 3.69% in March. The Partnership had very large
gains in interest rates and metals, with smaller gains in stock indices and
certain agricultural commodities. There were losses in energy and foreign
currencies.

The Partnership ended the quarter with a gain of 3.62%.

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, an increase of 10.91%.

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.



                                    Page 17
<PAGE>

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 gain of 1.40%. 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 gain of 0.87%.

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.


                                    Page 18
<PAGE>

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 gain of 0.50%.

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.

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.




                                    Page 19
<PAGE>

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.

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.

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



                                    Page 20
<PAGE>

of trading loss. Unlike an operating company, the risk involved in trading
market sensitive derivative instruments is integral, not incidental, to the
Partnership's business.

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

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

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

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

Quantitative Disclosures About Trading Risk

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

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

The Partnership has used commodity exchange maintenance margin requirements as
the measure of its Value at Risk in a given market sector. Maintenance margin
requirements are set by exchanges to equal or exceed the maximum losses
reasonably expected to be incurred in the fair value of any given contract in
95% - 99% of any one-day intervals. The maintenance margin levels are
established by brokers and exchanges using historical price studies as well as
an assessment of current market volatility (including the implied volatility of
the options on a given futures contract) and economic fundamentals to provide a
probabilistic estimate of the maximum expected near-term one-day price
fluctuation. Maintenance margin has been used rather than the more generally
available initial margin, because initial margin includes a credit risk
component which is not relevant to Value at Risk.

The following table indicates the trading Value at Risk associated with the
Partnership's open positions by market category as of December 31, 2006 and
2005. All open position trading risk exposures of the Partnership have been
included in calculating the figures set forth below. As of December 31, 2006
and 2005, the Partnership's total capitalization was approximately $28.2
million and $30.9 million, respectively.


                                    Page 21
<PAGE>

                          December 31,                      December 31,
                              2006                              2005
                      -------------------                -------------------
                                     % of                             % of
                   Value at          Total          Value at         Total
  Market Sector      Risk        Capitalization       Risk       Capitalization
  -------------      ----        --------------       ----       --------------

Agriculture        $   29,675         0.11%         $  136,499         0.44%
Currencies            990,937         3.52%            836,650         2.70%
Energy and Other       41,600         0.15%             56,400         0.18%
Stock Indices       1,012,952         3.60%            990,332         3.20%
Interest Rates        563,543         2.00%            994,297         3.21%
Metals                 42,970         0.15%            245,009         0.79%
                     --------       -------         ----------      --------

      Total        $2,681,677         9.53%         $3,259,187        10.52%
                   ==========         =====         ==========        ======

The Partnership is subject to indirect exposure from Winton Futures Fund.

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

Qualitative Disclosures About Trading Risk

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

The following were the primary trading risk exposures of the Partnership as of
and during the year ended December 31, 2006, 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, 2006, 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.



                                    Page 22
<PAGE>

Metals
------

The Partnership's primary metals market exposure is to fluctuations in the
price of both precious and base metals. As of December 31, 2006, the
Partnership's primary exposures were to copper, 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, hogs and food/fiber products as of December 31, 2006.

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, 2006, the Partnership's primary exposures were in
Australian Dollars, Canadian Dollars, British Pounds, Japanese Yen, Swiss
Francs, Euros, Mexican Pesos and New Zealand Dollars. The General Partner
anticipates that the risk profile of the Partnership's currency sector will
predominantly relate to the U.S. and major European and Asian countries. The
currency trading Value at Risk figure includes foreign margin amounts converted
into U.S. dollars with an incremental adjustment to reflect the exchange rate
risk inherent to the dollar-based Partnership in expressing Value at Risk in a
functional currency other than dollars.

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

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

Energy
------

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

Disclosures About Non-Trading Risk

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

The Partnership also has non-trading cash flow risk as a result of investing a
substantial portion of its assets in interest-bearing deposits with brokers. If
short-term interest rates 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.


                                    Page 23
<PAGE>

Qualitative Disclosures About Managing Risk Exposure

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

Item 8.   Financial Statements and Supplementary Data.

      Financial statements meeting the requirements of Regulation S-X are
      listed following this report. The following is the Supplementary
      Financial information specified by Item 302 of Regulation S-K for the
      years 2006 and 2005.

<TABLE>
<CAPTION>
                                  1st Qtr 2006    2nd Qtr 2006    3rd Qtr 2006     4th Qtr 2006
                                 -----------------------------------------------------------------

<S>                                   <C>               <C>           <C>              <C>
Gain (loss) from trading              $1,616,518        $(9,768)      $(669,550)       $2,179,341
Net investment (loss)                  (529,715)       (380,670)       (254,721)        (342,619)
Net Income (loss)                      1,086,803       (390,438)       (924,271)        1,836,722

Net income (loss) per Unit                105.96         (39.12)         (96.47)           200.36
Increase (decrease) in
   Net Asset Value per Unit               106.39         (40.54)         (96.78)           201.26

Net Asset Value per Unit
   at end of period                     3,100.41        3,059.87        2,963.09         3,164.35
</TABLE>

<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
</TABLE>

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

      None.

Item 9A.  Controls and Procedures.

      ProFutures, Inc., as General Partner of ProFutures Diversified Fund,
      L.P., with the participation of the General Partner's President and Chief
      Financial Officer, has evaluated the effectiveness of the design and
      operation of its disclosure controls and procedures (as defined in the
      Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) with
      respect to the Partnership as of the end of the period covered by this
      annual report. Based on their evaluation, the President and Chief
      Financial Officer have concluded that


                                    Page 24
<PAGE>

      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.

Item 9B.  Other Information.

      None.


                                    PART III

Item 10.  Directors, Executive Officers and Corporate Governance.

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

      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.

      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.


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 $1,128,704 for 2006.

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

      (a)   As of December 31, 2006, a total of 8,903 Units are issued and
            outstanding, representing 1 General Partner and 653 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, 2006, having an aggregate value of $592,117, which is
            approximately 2% 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.


                                    Page 25
<PAGE>

Item 14.   Principal Accounting Fees and Services.

      KBA Group LLP billed the Partnership aggregate fees for services rendered
      to the Partnership for the last two years as follows:

                                               2006             2005

            Audit Fees                    $        33,010   $        7,000

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

            Audit-Related Fees. KBA Group LLP did not have any audit-related
            fees in 2006 or 2005.

            Tax Fees. KBA Group LLP did not have any fees related to tax
            compliance, tax advice, and tax planning services for the
            Partnership in 2006 or in 2005.

            All Other Fees. KBA Group LLP did not have any other fees in 2006
            or 2005.

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 2006 Report of Independent
            Registered Public Accounting Firm, a copy of which is filed
            herewith as Exhibit 13.01

                  Affirmation of ProFutures, Inc.
                  Report of Independent Registered Public Accounting Firm
                  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).



                                    Page 26
<PAGE>

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

     (b)   Exhibits.

           13.1   2006 Report of Independent Registered Public Accounting Firm.

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

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

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

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

      (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 27
<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)



April 2, 2007                     By /s/ GARY D. HALBERT
-----------------------              ------------------------------------------
Date                                  Gary D. Halbert, President and Director
                                      ProFutures, Inc.
                                      General Partner



April 2, 2007                     By /s/ DEBI B. HALBERT
-----------------------              ------------------------------------------
Date                                  Debi B. Halbert, Chief Financial Officer,
                                        Treasurer and Director
                                      ProFutures, Inc.
                                      General Partner




                                    Page 28
<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.




April 2, 2007                     By /s/ GARY D. HALBERT
-----------------------              ------------------------------------------
Date                                  Gary D. Halbert, President and Director
                                      ProFutures, Inc.
                                      General Partner



April 2, 2007                     By /s/ DEBI B. HALBERT
-----------------------              ------------------------------------------
Date                                  Debi B. Halbert, Chief Financial Officer,
                                        Treasurer and Director
                                      ProFutures, Inc.
                                      General Partner



                                    Page 29