##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2008

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission
file number 0-26004

DIVERSIFIED FUTURES TRUST I

(Exact name of Registrant as specified in its charter)



|                                                            |  |                                    
|----------------------------------------------------------- |  | -----------------------------------
|Delaware                                                    |  | 13-3780260                         
|State or other jurisdiction ofincorporation or organization |  | (I.R.S. EmployerIdentification No.)



|                                                |  |           
|----------------------------------------------- |  | ----------
|900 King Street, Suite 100, Rye Brook, New York |  | 10573     
|(Address of principal executive offices)        |  | (Zip Code)

Registrants telephone number, including area code: (914) 307-7000

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

None

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

Limited Interests

(Title of class)

Indicate by check mark if Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes    ̈    No  x

Indicate by check mark if Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.    Yes   ̈    No  x

Indicate by check mark whether Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that Registrant 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 incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See definition of accelerated filer, large accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                           |  |                             
|-------------------------- |  | ----------------------------
|Large accelerated filer   ̈ |  | Accelerated filer   ̈        
|Non-accelerated filer  x   |  | Smaller Reporting Company   ̈

Indicate by check mark whether Registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes   ̈    No  x

The value of Limited Interests in the Registrant as of June 30, 2008 is $11,815,293.









---

##### Table of Contents

DOCUMENTS INCORPORATED BY REFERENCE

Registrants Annual Report to Interestholders for the year ended December 31, 2008 is incorporated by reference into Parts II and IV of this Annual Report on Form 10-K

[Remainder of page intentionally left blank]



2



---

##### Table of Contents

DIVERSIFIED FUTURES TRUST I

(a Delaware Business Trust)





TABLE OF
CONTENTS







|           |  |                                                                                                             |  |     
|---------- |  | ----------------------------------------------------------------------------------------------------------- |  | ----
|           |  |                                                                                                             |  | PAGE
|PART I     |  |                                                                                                            
|           |  |                                                                                                            
|Item 1.    |  | Business                                                                                                    |  | 4   
|Item 1A.   |  | Risk Factors                                                                                                |  | 5   
|Item 1B.   |  | Unresolved Staff Comments                                                                                   |  | 10  
|Item 2.    |  | Properties                                                                                                  |  | 10  
|Item 3.    |  | Legal Proceedings                                                                                           |  | 10  
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                                         |  | 10  
|           | 
|PART II    |  |                                                                                                            
|           |  |                                                                                                            
|Item 5.    |  | Market for Registrants Common Equity, Related Stockholder Mattersand Issuer Purchases of Equity
Securities |  | 10  
|Item 6.    |  | Selected Financial Data                                                                                     |  | 10  
|Item 7.    |  | Managements Discussion and Analysis of Financial Conditionand Results of Operation                         |  | 11  
|Item 7A.   |  | Quantitative and Qualitative Disclosures About Market Risk                                                  |  | 20  
|Item 8.    |  | Financial Statements and Supplementary Data                                                                 |  | 20  
|Item 9.    |  | Changes in and Disagreements with Accountants on Accountingand Financial Disclosure                         |  | 21  
|Item 9AT.  |  | Controls and Procedures                                                                                     |  | 21  
|Item 9B.   |  | Other Information                                                                                           |  | 22  
|           | 
|PART III   |  |                                                                                                            
|           |  |                                                                                                            
|Item 10.   |  | Directors, Executive Officers and Corporate Governance                                                      |  | 22  
|Item 11.   |  | Executive Compensation                                                                                      |  | 25  
|Item 12.   |  | Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters               |  | 25  
|Item 13.   |  | Certain Relationships and Related Transactions, and Director Independence                                   |  | 26  
|Item 14.   |  | Principal Accounting Fees and Services                                                                      |  | 26  
|           | 
|PART IV    |  |                                                                                                            
|           |  |                                                                                                            
|Item 15.   |  | Exhibits, Financial Statement Schedules                                                                     |  | 27  
|           |  | Financial Statements and Financial Statement Schedules                                                      |  | 27  
|           |  | Exhibits                                                                                                    |  | 27  
|           |  | Reports on Form 8-K                                                                                         |  | 29  
|           |  |                                                                                                            
|SIGNATURES |  |                                                                                                             |  | 63  



3



---

##### Table of Contents

PART I



|Item 1. | Business
|------- | --------

General

Diversified Futures Trust I (Registrant), a Delaware business trust, was organized under the Delaware Statutory Trust Act on
May 18, 1994 and will terminate on December 31, 2020 unless terminated sooner under the provisions of the Third Amended and Restated Declaration of Trust and Trust Agreement (the Trust Agreement). Registrants
trustee is Wilmington Trust Company. Registrant was formed to engage in the speculative trading of commodity futures, forwards and option contracts. Registrants fiscal year for book and tax purposes ends on December 31.

Registrant is engaged solely in the business of commodity futures and forward trading; therefore, presentation of industry segment information is not applicable.

Managing Owner and its Affiliates

Preferred Investment Solutions Corp. (Preferred or the Managing Owner) has been the managing owner of Registrant since October 1, 2004.

Effective December 1, 2008, in accordance with the Third Amended and Restated Declaration of Trust and Trust Agreement, the Managing Owner is no longer required to
maintain at least 1% interest in Registrant.

The Trading Advisor and the Trading Vehicle

Prior to January 1, 2007, all trading decisions for Registrant were made by Appleton Capital Management Ltd. (through September 29, 2006), Graham Capital
Management L.P. and Aspect Capital Limited. The Managing Owner terminated the advisory agreements with these trading advisors during 2006.

Effective
January 1, 2007, Registrant became a member of and allocated all of its assets to WCM Pool LLC (the Trading Vehicle), a Delaware limited liability company, and received a voting membership interest in the Trading Vehicle and
became party to the Trading Vehicles Organization Agreement. The Trading Vehicle was formed to function as an aggregate trading vehicle for its members. Registrant, Futures Strategic Trust and Kenmar Global Trust are the sole members of the
Trading Vehicle as of December 31, 2008. Preferred is the Managing Owner of each of these Trading Vehicle members and has been delegated administrative authority over the operations of the Trading Vehicle. The Trading Vehicle engages in the
speculative trading of futures and forwards contracts.

The Trading Vehicle has entered into an advisory agreement (the Trading Vehicle Advisory
Agreement) with Winton Capital Management Limited (Winton), whereby Winton makes the trading decisions for the Trading Vehicle and, in turn, Registrant, pursuant to Wintons Diversified Program. The Advisory
Agreement may be terminated for various reasons, including at the discretion of the Trading Vehicle. Registrant has allocated 100% of the proceeds from the initial and continuous offering of Registrant to the Trading Vehicle. Registrant, through its
investment in the Trading Vehicle, pays a monthly management fee equal to 0.16667% (2% annually) of the assets allocated to the Trading Advisor. Registrant, through its investment in the Trading Vehicle, pays Winton an incentive fee of 20% of
New High Net Trading Profits (as defined in the Advisory Agreement) generated by the Trading Vehicle. Incentive fees will accrue monthly and be paid quarterly in arrears.

The term Trading Advisor, as used herein, refers to Winton. The term Trading Advisory Agreement, as used herein, refers to the Trading Vehicle Advisory Agreement.

Competition

The Managing Owner and its
affiliates have formed, and may continue to form, various entities to engage in the speculative trading of futures, forwards and option contracts that have certain of the same investment policies as Registrant.

Registrant does not currently, and does not intend in the future to, solicit the sale of additional Interests. As such, Registrant does not compete with other entities
to attract new fund participants. However, to the extent that the Trading Advisor recommends similar or identical trades to Registrant and other accounts that it manages, Registrant may compete with those accounts, as well as with other market
participants, for the execution of the same or similar trades.

Employees

Registrant has no employees. Management and administrative services for Registrant are performed by the Managing Owner or third parties pursuant to the Trust Agreement,
as further discussed in Notes 3 and 4 to Registrants financial statements included in its annual report to the interest holders for the year ended December 31, 2008 (Registrants 2008 Annual Report), which is filed
as an exhibit hereto.



4



---

##### Table of Contents

|Item 1A. | Risk Factors
|-------- | ------------

THE RISKS YOU FACE

You Should Not Rely on Past Performance in Deciding Whether to Buy Units

The Trading Advisor selected by the Managing Owner to manage the assets of the Trust has a performance history through the date of its selection by the Managing Owner. You must consider, however, the uncertain
significance of past performance, and you should not rely on the Trading Advisors or the Managing Owners records to date for predictive purposes. You should not assume that any Trading Advisors future trading decisions will create
profit, avoid substantial losses or result in performance for the Trust that is comparable to the Trading Advisors or to the Managing Owners past performance. In fact, as a significant amount of academic study has shown, futures funds
more frequently than not underperform the past performance records included in their prospectuses.

Price Volatility May Possibly Cause the Total Loss
of Your Investment

Futures and forward contracts have a high degree of price variability and are subject to occasional rapid and substantial changes.
Consequently, you could lose all or substantially all of your investment in the Trust.

Speculative and Volatile Markets Combined With Highly Leveraged
Trading May Cause the Trust to Incur Substantial Losses.

The markets in which the Trust trades are speculative, highly leveraged and involve a high
degree of risk. The Trading Advisors trading considered individually involves a significant risk of incurring large losses, and there can be no assurance that the Trust will not incur such losses. Futures and forward prices are volatile.
Volatility increases risk, particularly when trading with leverage. Trading on a highly leveraged basis, as does the Trust, even in stable markets involves risk; doing so in volatile markets necessarily involves a substantial risk of sudden,
significant losses. Due to such leverage, even a small movement in price could cause large losses for the Trust. Market volatility will increase the potential for large losses. Market volatility and leverage mean that the Trust could incur
substantial losses, potentially impairing its equity base and ability to achieve its long-term profit objectives even if favorable market conditions subsequently develop.

In addition to the leveraged trading described above, the Managing Owner has the ability to further increase the leverage of Registrant by allocating notional equity to the Trading Advisor (in a maximum amount of up
to 20% of net asset value), which would then permit the Trading Advisor to trade the account of Registrant as if more equity were committed to such accounts than is, in fact, the case. Although the Managing Owner has the option to allocate
additional notional equity to the Trading Advisor, the Managing Owner has no current plans to do so.

Fees and Commissions are Charged Regardless of
Profitability and May Result in Depletion of Trust Assets

The Trust is subject to the fees and expenses which are payable irrespective of profitability
in addition to performance fees which, are payable based on the profitability of the Trust, and, as a multi-advisor fund, upon the Trading Advisors performance. Consequently, the expenses of the Trust could, over time, result in significant
losses to your investment therein. Included in these charges are brokerage fees and operating expenses. On Registrants forward trading, bid-ask spreads are incorporated into the pricing of Registrants forward contracts by its
counterparties in addition to the brokerage fees paid by Registrant. It is not possible to quantify the bid-ask spreads paid by Registrant because Registrant cannot determine the profit its counterparty is making on the forward trades
into which it enters. An investor may never achieve profits.

Market Conditions May Impair Profitability

The trading systems used by certain Trading Advisors are technical, trend-following methods. The profitability of trading under this system depends on, among other
things, the occurrence of significant price trends, which are sustained movements, up or down, in futures and forward prices. Such trends may not develop; there have been periods in the past without price trends. The likelihood of Interests being
profitable could be materially diminished during periods when events external to the markets themselves have an important impact on prices. During such periods, the Trading Advisors historic price analysis could establish positions on the
wrong side of the price movements caused by such events.

Discretionary Trading Strategies May Incur Substantial Losses

Discretionary traders, while they may utilize market charts, computer programs and compilations of quantifiable fundamental information to assist them in making trading
decisions, make such decisions on the basis of their own judgment and trading instinct, not on the basis of trading signals generated by any program or model. Such traders may be more prone to subjective judgments, which may have greater
potentially adverse effects on their performance than systematic traders, which emphasize eliminating the effects of emotionalism on their trading. Reliance on trading judgment may, over time, produce less consistent



5



---

##### Table of Contents

trading results than implementing a systematic approach. Discretionary traders, like trend-following traders, are unlikely to be profitable unless major
price movements occur. Discretionary traders are highly unpredictable, and can incur substantial losses even in apparently favorable markets.

Systematic Trading Strategies May Incur Substantial Losses

A systematic trader will generally rely to some degree on judgmental decisions
concerning, for example, what markets to follow and commodities to trade, when to liquidate a position in a contract which is about to expire and how large a position to take in a particular commodity. Although these judgmental decisions may have a
substantial effect on a systematic traders performance, such traders primary reliance is on trading programs or models that generate trading signals. The systems utilized to generate trading signals are changed from time to time
(although generally infrequently), but the trading instructions generated by the systems being used are followed without significant additional analysis or interpretation. Therefore, systematic trading may incur substantial losses by failing to
capitalize on market trends that their systems would otherwise have exploited by applying their generally mechanical trading systems by judgmental decisions of employees. Furthermore, any trading system or trader may suffer substantial losses by
misjudging the market. Systematic traders tend to rely on computerized programs, and some consider the prospect of disciplined trading, which largely removes the emotion of the individual trader from the trading process, advantageous. Due to their
reliance upon computers, systematic traders are generally able to incorporate a significant amount of data into a particular trading decision. However, when fundamental factors dominate the market, trading systems may suffer rapid and severe losses
due to their inability to respond to such factors until such factors have had a sufficient effect on the market to create a trend of enough magnitude to generate a reversal of trading signals, by which time a precipitous price change may already be
in progress, preventing liquidation at anything but substantial losses.

Decisions Based Upon Fundamental Analysis May Not Result in Profitable Trading

Traders that utilize fundamental trading strategies attempt to examine factors external to the trading market that affect the supply and demand for a
particular futures and forward contracts in order to predict future prices. Such analysis may not result in profitable trading because the analyst may not have knowledge of all factors affecting supply and demand, prices may often be affected by
unrelated factors, and purely fundamental analysis may not enable the trader to determine quickly that previous trading decisions were incorrect. In addition, because of the breadth of fundamental data that exists, a fundamental trader may not be
able to follow developments in all such data, but instead may specialize in analyzing a narrow set of data, requiring trading in fewer markets. Consequently, a fundamental trader may have less flexibility in adverse markets to trade other futures
and forward markets than traders that do not limit the number of markets traded as a result of a specialized focus.

Increase in Assets Under Management
May Affect Trading Decisions

The more equity a Trading Advisor manages, the more difficult it may be for that Trading Advisor 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 one or more of the Trading Advisors to modify trading decisions for the
Trust, which could have a detrimental effect on your investment in such Trust.

You Cannot be Assured of the Trading Advisors Continued Services
Which May Be Detrimental to Trust

You cannot be assured that any Trading Advisor will be willing or able to continue to provide advisory services to
the Trust for any length of time. There is severe competition for the services of qualified trading advisors, and the Trust may not be able to retain satisfactory replacement or additional trading advisors on acceptable terms or the Trading Advisor
may require the Trust to pay higher fees in order to be able to retain such Trading Advisor.

Limited Ability to Liquidate Your Investment

There is no secondary market for the Units. While the Units have redemption rights, there are restrictions, and possible fees assessed. For example,
Units may be redeemed only as of the close of business on the last business day of a calendar month provided a request for redemption is received at least five business days prior to the end of such month excluding the last business day of the
month. Transfers of Units are subject to limitations, and the Managing Owner may deny a request to transfer if it determines that the transfer may result in adverse legal or tax consequences for the Trust.

Possible Illiquid Markets May Exacerbate Losses

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. Periods of illiquidity have accrued from time-to-time in the past, such as in connection with
Russias default on its sovereign debt in 1998.Such periods of illiquidity and the events that trigger them are difficult to predict and there can be no assurance that the Trading Advisor will be able to do so. There can be no assurance that
market illiquidity will not cause losses for the Trust. The large size of the positions which the Trading Advisor is expected to acquire for the Trust increases the risk of illiquidity by both making its positions more difficult to liquidate and
increasing the losses incurred while trying to do so.



6



---

##### Table of Contents

The risk of loss due to potentially illiquid markets is more acute in respect of over-the-counter instruments than in
respect of exchange-traded instruments because the performance of those contracts is not guaranteed by an exchange or clearinghouse and the Trust will be at risk to the ability of the counterparty to the instrument to perform its obligations
thereunder. Because these markets are not regulated, there are no specific standards or regulatory supervision of trade pricing and other trading activities that occur in those markets.

Because the Trust does not Acquire Any Asset with Intrinsic Value, the Positive Performance of Your Investment Is Wholly Dependent Upon an Equal and Offsetting Loss

Futures and forward trading is a risk transfer economic activity. For every gain there is an equal and offsetting loss rather than an opportunity to participate over time
in general economic growth. Unlike most alternative investments, an investment in the Trust does not involve acquiring any asset with intrinsic value. Overall stock and bond prices could rise significantly and the economy as a whole prospers; while
the Trust trades unprofitably.

Failure of Futures and Foreign Exchange Trading to be Non-Correlated to General Financial Markets Will Eliminate
Benefits of Diversification

Historically, managed futures and foreign exchange generally have been 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 would be exactly opposite between two asset classes. Because of this non-correlation, Registrant cannot be expected to be profitable during unfavorable periods for the stock market, or
vice-versa. The futures and forward markets are fundamentally different from the securities markets in that for every gain in futures and forward trading, there is an equal and offsetting loss. If the Trust does not perform in a manner
non-correlated with the general financial markets or does not perform successfully, you will obtain no diversification benefits by investing in the Units of the Trust and the Trust may have no gains to offset your losses from other investments.

Trading on Commodity Exchanges Outside the United States is Not Subject to U.S. Regulation

The Trading Advisor may engage in some or all of its trading on behalf of the Trust on commodity exchanges outside the United States. Trading on such exchanges is not
regulated by any United States governmental agency and may involve certain risks not applicable to trading on United States exchanges. In trading contracts denominated in currencies other than U.S. dollars, the Trust will be subject to the risk of
adverse exchange-rate movements between the dollar and the functional currencies of such contracts. Additionally, trading on foreign exchanges is also subject to the risk of exchange controls, expropriation, excessive taxation or government
disruption. Investors could incur substantial losses from trading on foreign exchanges by the Trust to which such investors would not have been subject had the Trading Advisor limited its trading to U.S. markets.

Various Actual and Potential Conflicts of Interest May Be Detrimental to Unitholders

The Trust is subject to actual and potential conflicts of interests involving the Managing Owner, the Trading Advisor, and various brokers and servicing agents. The Managing Owner, the Trading Advisor, and their
respective principals, all of which are engaged in other investment activities, are not required to devote substantially all of their time to the Trusts business, which also presents the potential for numerous conflicts of interest with the
Trust. As a result of these and other relationships, parties involved with the Trust have a financial incentive to act in a manner other than in the best interests of the Trust and its Unitholders. The Managing Owner has not established any formal
procedure to resolve conflicts of interest. Consequently, investors will be dependent on the good faith of the respective parties subject to such conflicts to resolve them equitably. Although the Managing Owner attempts to monitor these conflicts,
it is extremely difficult, if not impossible, for the Managing Owner to ensure that these conflicts do not, in fact, result in adverse consequences to the various Trust.

The Trust may be subject to certain conflicts with respect to its clearing broker(s), its futures broker, and any executing broker including, but not limited to, conflicts that result from receiving greater amounts of
compensation from other clients, purchasing opposite or competing positions on behalf of third party accounts traded through the clearing broker, the futures broker and executing brokers.

Unitholders Taxed Currently

Unitholders are subject to tax each year
on their allocable share of the income or gains (if any) of the Trust, whether or not they receive distributions. Moreover, the Managing Owner does not intend to make any distributions to Unitholders in respect of the Trust. Consequently,
Unitholders will be required either to redeem Units or to make use of other sources of funds to discharge their tax liabilities in respect of any profits earned by the Trust.

In comparing the profit objectives of the Trust with the performance of more familiar securities in which one might invest, prospective investors must recognize that if they purchased equity or debt, there probably
would be no tax due on the appreciation in the value of such holdings until disposition. In the case of the Trust, on the other hand, a significant portion of



7



---

##### Table of Contents

any appreciation in the Net Asset Value per Unit must be paid in taxes by the Unitholders of the Trust every year, resulting in a substantial cumulative
reduction in their net after-tax returns. Because Unitholders will be taxed currently on their allocable share of the income or gains of the Trust, if any, the Trust may trade successfully but investors nevertheless would have recognized
significantly greater gains on an after-tax basis had they invested in conventional stocks with comparable performance.

Limitation on Deductibility of
Investment Advisory Fees

Non-corporate Unitholders may be required to treat the amount of Incentive Fees and other expenses of the Trust as
investment advisory fees which may be subject to substantial restrictions on deductibility for federal income tax purposes. In the absence of further regulatory or statutory clarification, the Managing Owner is not classifying these
expenses as investment advisory fees, but this is a position to which the Internal Revenue Service (the IRS) may object. If a substantial portion of the fees and other expenses of the Trust were characterized as
investment advisory fees, an investment in the Trust might no longer be economically viable.

Taxation of Interest Income Irrespective of
Trading Losses

With respect to the Trust, the Net Asset Value per Unit reflects the trading profits and losses as well as the interest income earned
and expenses incurred by the Trust. However, losses on the Trusts trading will be almost exclusively capital losses, and capital losses are deductible against ordinary income only to the extent of $3,000 per year in the case of non-corporate
taxpayers. Consequently, if a non-corporate Unitholder had, for example, an allocable trading (i.e., capital) loss of $10,000 in a given fiscal year and allocable interest (i.e., ordinary) income (after reduction for expenses) of $5,000, the
Unitholder would have incurred a net loss in the Net Asset Value of such Unitholders Units equal to $5,000 but would recognize taxable income of $2,000 (assuming a 40% tax rate). The limited deductibility of capital losses for non-corporate
Unitholders could result in such Unitholders having a tax liability in respect of their investment in the Trust despite incurring a financial loss on their Units of the Trust.

Possibility of a Tax Audit of Both the Trust and the Unitholders

There can be no assurance that the tax returns of
the Trust will not be audited by the IRS. If such an audit results in an adjustment, Unitholders of the Trust could themselves be audited as well as being required to pay additional taxes, interest and possibly penalties.

PROSPECTIVE INVESTORS ARE STRONGLY URGED TO CONSULT THEIR OWN TAX ADVISERS AND COUNSEL WITH RESPECT TO THE POSSIBLE TAX CONSEQUENCES TO THEM OF AN INVESTMENT IN
REGISTRANT; SUCH TAX CONSEQUENCES MAY DIFFER IN RESPECT OF DIFFERENT INVESTORS.

Failure or Lack of Segregation of Assets May Increase Losses

The Commodity Exchange Act (CEA) requires a futures commission merchant (FCM) clearing broker to segregate all
funds received from customers from such brokers proprietary assets. If the clearing broker fails to do so, the assets of the Trust might not be fully protected in the event of their bankruptcy. Furthermore, in the event of the clearing
brokers bankruptcy, the Trust 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
Trust (for example, Treasury bills deposited by the Trust with the clearing broker as margin) was held by the clearing broker.

In the event of the
FCMs bankruptcy, Registrant may recover a pro-rata share or none of its assets.

Default by Counterparty and Credit Risk Could Cause Substantial
Losses

Dealers in forward contracts are not regulated by the CEA and are not obligated to segregate customer assets. As a result, Unitholders do not
have such basic protections with respect to the trading in forward contracts by the Trust. This lack of regulation in these markets could expose the Trust in certain circumstances to significant losses in the event of trading abuses or financial
failure by the counterparties. The Trust also faces the risk of non-performance by the counterparties to the over-the-counter contracts. Unlike in futures contracts, the counterparty to these contracts is generally a single bank or other financial
institution, rather than a clearing organization backed by a group of financial institutions. As a result, there will be greater counterparty credit risk in these transactions. The clearing member, clearing organization or other counterparty may not
be able to meet its obligations, in which case the Trust could suffer significant losses on these contracts.

Regulatory Changes or Actions May Alter
the Nature of an Investment in the Trust

Considerable regulatory attention has been focused on non-traditional investment pools, in particular
commodity pools such as the Trust, publicly distributed in the United States. There has been significant international governmental concern expressed regarding, for example, (i) the disruptive effects of speculative trading on the central
banks attempts to influence exchange rates and (ii) the need to regulate the derivatives markets in general. There is a possibility of future regulatory changes altering, perhaps to a material extent, the nature of an investment in the
Trust.



8



---

##### Table of Contents

The futures markets are subject to comprehensive statutes, regulations, and margin requirements. In addition, the
Commodity Futures Trading Commission (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. The effect of any future regulatory change on the Trust is impossible to predict, but could be substantial and adverse.

Trust Trading is Not Transparent

Trading decisions in respect of the Trust, are made by the Trading Advisor. While the Managing Owner
receives daily trade confirmations from the clearing broker and foreign exchange dealers, such information is not provided to Unitholders and the Trusts trading results are reported to the Unitholders. Accordingly, an investment in the Trust
does not offer you the same transparency, i.e., an ability to review all investment positions daily that a personal trading account offers. The Managing Owner may (but is under no obligation to) provide estimated daily or weekly values to
unitholders.

Lack of Independent Experts Representing Investors

The Managing Owner has consulted with counsel, accountants and other experts regarding the formation and operation of the Trust. No counsel has been appointed to represent an investor in connection with the offering
of the Units. Accordingly, you should consult your own legal, tax and financial advisers regarding the desirability of an investment in the Trust.

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

The Trust may trade foreign exchange contracts in the
interbank market. Since forward contracts are traded in unregulated markets between principals, the commodity pools also assume the risk of loss from counterparty nonperformance. In the future, the Trust may also trade swap agreements, hybrid
instruments and other off-exchange contracts. Swap agreements involve trading income streams such as fixed rate or floating rate interest. Hybrids are instruments, which combine features of a security with those of a futures contract. The dealer
market for off-exchange instruments is becoming less liquid. Because there is no exchange or clearing- house for these contracts, the Trust will be subject to the credit risk and nonperformance of the counterparty. Additionally, because these
off-exchange contracts are not regulated by the CFTC, the Trust will not receive the protections, which are provided by the CFTCs regulatory scheme.

There may be an additional risk due to the fact Registrant may trade foreign exchange contracts off-exchange and, as such, does not have protection of an exchange. There is also the additional risk that the assets held with the clearing
broker for trading off-exchange foreign currencies are not required to be segregated.

Registrant may also trade options on futures. Although successful
options trading requires many of the same skills as successful futures trading, the risks are different. Successful options trading requires a trader to assess accurately near-term market volatility because that volatility is immediately reflected
in the price of outstanding options. Correct assessment of market volatility can therefore be of much greater significance in trading options than it is in many long-term futures strategies where volatility does not have as great an effect on the
price of a futures contract.

Foreign Exchange Currency Trading is Not Subject to CFTC Regulation

The Trading Advisor may trade its program by entering into spot and forward transactions involving currencies with United States and foreign banks and currency dealers.
As with the risks involved in forward contracts (see above), trading in spot and forward foreign exchange transactions is not regulated by the CFTC and such contracts are not traded on or guaranteed by an exchange or its clearing house.

Possibility of Termination of the Trust or any Trust Before Expiration of its Stated Term

As Managing Owner, the Managing Owner may withdraw from the Trust, which would cause the Trust to terminate unless a Substitute Managing Owner was appointed. Other events, such as a long-term substantial loss suffered
by any Trust, could also cause the Trust to terminate before the expiration of its stated term. This could cause you to liquidate your investments and upset the overall maturity and timing of your investment portfolio. If the registrations with the
CFTC or memberships in the NFA of the Managing Owner or the clearing broker were revoked or suspended, such entity would no longer be able to provide services to the Trust.

Registrant is subject to Speculative Position Limits

The CFTC and U.S. futures exchanges have established
speculative position limits (referred to as position limits) on the maximum position in certain futures interests contracts that may be held or controlled by any one person or group. Therefore, the Trading Advisor may have to reduce the
size of its position in one or more futures contracts in order to avoid exceeding such position limits, which could adversely affect the profitability of Registrant.



9



---

##### Table of Contents

Reliance on the Trading Advisor to Trade Successfully

The Trading Advisor is responsible for making all futures, forwards, and options trading decisions on behalf of Registrant. The Managing Owner has no control over the
specific trades the Trading Advisor makes, leverage used, risks and/or concentrations assumed or whether the Trading Advisor will act in accordance with the disclosure documents or descriptive materials furnished by them to the Managing Owner. The
Managing Owner can provide no assurance that the trading programs employed by the Trading Advisor will be successful.



|Item 1B. | Unresolved Staff Comments
|-------- | -------------------------

None



|Item 2. | Properties
|------- | ----------

Registrant does not own or use
any physical properties in the conduct of its business. Registrants only place of business is the place of business of the Managing Owner.

Certain
administrative services are provided by Spectrum Global Fund Administration, L.L.C., Registrants administrator (the Administrator), which is located at 33 West Monroe, Suite 1000, Chicago, IL 60603.



|Item 3. | Legal Proceedings
|------- | -----------------

There are no material
proceedings pending by or against Registrant or the Managing Owner.



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

None

PART II



|Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|------- | ------------------------------------------------------------------------------------------------------------

On January 5, 1995, Registrant completed its initial offering and on August 31, 1996 the continuous offering period expired. A significant secondary market for
the Limited Interests has not developed, and it is not expected that one will develop in the future. There are also certain restrictions set forth in the Trust Agreement limiting the ability of an Interestholder to transfer Interests. However,
Interests may be redeemed as of the last business day of any calendar quarter at the then current net asset value per Interest. Consequently, holders of Interests may not be able to liquidate their investments in the event of an emergency or for any
other reason.

There are no material restrictions upon Registrants present or future ability to make distributions in accordance with the provisions
of the Trust Agreement. No distributions have been made since inception and no distributions are anticipated in the future.

As of January 31, 2009,
there were 375 holders of record owning 44,420.3842 Interests, which include 451 General Interests.



|Item 6. | Selected Financial Data
|------- | -----------------------

The following
table presents selected financial data of Registrant. This data should be read in conjunction with the financial statements of Registrant and the notes thereto on pages 6 through 16 of Registrants 2008 Annual Report, which is filed as an
exhibit here to.



|                                                |  |                         |            |      |   |            |  |   |            |   |  |      |            |   |  |   |            |  
|----------------------------------------------- |  | ----------------------- | ---------- | ---- | - | ---------- |  | - | ---------- | - |  | ---- | ---------- | - |  | - | ---------- | -
|                                                |  | Year Ended December 31, |           
|                                                |  | 2008                    |            | 2007 |   | 2006       |  |   | 2005       |   |  | 2004 |           
|Total revenues (including interest)             |  | $                       | 2,787,930  |      | $ | 2,045,248  |  | $ | 817,235    |   |  | $    | 1,226,876  |   |  | $ | 559,273    |  
|Net income (loss)                               |  | $                       | 1,138,501  |      | $ | 585,390    |  | $ | (679,505   | ) |  | $    | (517,955   | ) |  | $ | (1,749,866 | )
|Net income (loss) per weighted average Interest |  | $                       | 25.03      |      | $ | 11.17      |  | $ | (10.10     | ) |  | $    | (6.49      | ) |  | $ | (19.52     | )
|Total assets                                    |  | $                       | 11,732,797 |      | $ | 11,365,592 |  | $ | 14,369,565 |   |  | $    | 17,739,364 |   |  | $ | 20,833,363 |  
|Net asset value per Interest                    |  | $                       | 260.16     |      | $ | 235.63     |  | $ | 222.71     |   |  | $    | 232.38     |   |  | $ | 237.65     |  



10



---

##### Table of Contents

|Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

Critical Accounting Policies

Preparation of the financial statements
and related disclosures in compliance with accounting principles generally accepted in the United States of America requires the application of appropriate accounting rules and guidance. Applying these policies requires the Managing Owner to make
judgments, estimates and assumptions in connection with the preparation of Registrants financial statements. Actual results may differ from the estimates used.

The Managing Owner has evaluated Registrants financial statements and related disclosures and has determined that the policies discussed below are critical accounting policies because they involve estimates,
judgments and assumptions that are particularly complex, subjective or uncertain. For a further discussion of Registrants significant accounting policies, see Note 2 to Registrants financial statements for the year ended
December 31, 2008, which is filed as an exhibit herewith.

The valuation of Registrants investments that are not traded on a United States or
internationally recognized futures exchange is a critical accounting policy. The market values of futures (exchange traded) contracts is verified by Registrants administrator, which obtains valuation data from third party data providers such
as Bloomberg, Reuters and Super Derivatives and compares those prices with Registrants clearing broker. The market value of currency swap and forward (non-exchange traded) contracts is extrapolated on a forward basis from the spot prices
quoted as of 4 PM on the last business day of the reporting period. All values assigned by the administrator and confirmed by the Managing Owner are final and conclusive as to all of Registrants Unitholders.

As such, if actual results vary from estimates used, they are not anticipated to have a material impact on the financial statements and related disclosures.

Registrant records all investments at fair value in its financial statements, with changes in fair value reported as a component of RevenuesUnrealized in the
Statements of Operations. Registrant considers prices for exchange traded commodity futures and options contracts to be based on quoted prices in active markets for identical assets (Level 1). The values of forwards, swaps, and certain option
contracts for which market quotations are not readily available are priced by third party data providers such as Bloomberg, Reuters and/or Super Derivatives who derive fair values for those assets from observable inputs (Level 2). Level 3 inputs
reflect Registrants assumptions that it believes market participants would use in pricing the asset or liability. Registrant develops Level 3 inputs based on the best information available in the circumstances, which may include indirect
correlation to a market value, combinations of market values or Registrants proprietary data. Level 3 inputs generally include information derived through extrapolation or interpolation of observable market data.

In July 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation FIN No. 48, Accounting for Uncertainty in Income
Taxes - an interpretation of FASB Statement No. 109 (FIN 48), which clarifies the accounting for uncertainty in tax positions. FIN 48 requires that Registrant recognize in its financial statements the impact of a tax
position if that position is more likely than not of being sustained on audit based on the technical merits of the position. The provisions of FIN 48 were effective for fiscal years beginning after December 15, 2006, with the cumulative effect
of the change in accounting principle recorded as an adjustment to opening retained earnings. In connection with the adoption of FIN 48, Registrant has elected an accounting policy to classify interest and penalties related to unrecognized tax
benefits as interest or other expense. All tax years which are statutorily open are subject to examination by the appropriate taxing authorities. The Managing Owner evaluated the impact of adopting FIN 48 on Registrants financial statements.
The adoption of FIN 48 had no material impact on Registrant, as Registrants tax positions are based on established tax precedence for the tax treatment of investment partnerships as flow through tax entities.

In September 2006, the FASB issued SFAS No. 157 (SFAS 157), Fair Value Measurements. SFAS 157 requires use of a fair value
hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three levels: quoted market prices in active markets for identical assets and liabilities (Level 1), inputs other than quoted market prices that are
observable for the asset or liability, either directly or indirectly (Level 2), and unobservable inputs for the asset or liability (Level 3). SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15,
2007.

Registrant adopted SFAS 157 in the first quarter of 2008. The adoption of SFAS 157 had no impact to the items required to be carried at fair value
(investments) in Registrants financial statements. $0 or 0.00% of Registrants investments at December 31, 2008 are classified as Level 1 or Level 3 and $11,561,900 or 100.00% are classified as Level 2 using the fair value hierarchy
of SFAS 157. $0 or 0.00% of Registrants investments at December 31, 2007 are classified as Level 1 or Level 2 and $11,055,308 or 100.00% are classified as Level 3 using the fair value hierarchy of SFAS 157.

Investments classified as Level 2 and Level 3 under SFAS 157 represent the Registrants investment in the Trading Vehicle and are valued monthly at the net asset
value as reported by the Trading Vehicle. The Trading Vehicles net asset value is determined based upon its managements best estimate of the fair value of its underlying net assets, substantially all of which are investments valued using
Level 1 inputs but include certain assets and liabilities where the inputs into the determination of fair value require management judgment or estimation. The Managing Owner determined that certain of the Trading Vehicles assets and
liabilities which require management judgment or estimation were not material to the Registrants financial statements and therefore the Registrants investment in the Trading Vehicle should be classified as Level 2 at December 31,
2008. A table presenting the changes in the



11



---

##### Table of Contents

Level 2 and Level 3 fair value categories for the years ended December 31, 2008 and 2007 is provided in Note 5 of Registrants financial statements
included in Registrants 2008 Annual Report. Of the $1,985,705 and $1,442,225 of gains for the years ended December 31, 2008 and 2007, respectively, reported on Level 2 and Level 3 investments in Note 5, $(94,690) and $283,249,
respectively, represent a change in unrealized gain (loss) allocated from the Trading Vehicle on Registrants statements of operations.

In October
2008, the FASB issued FASB Staff Position FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active (FSP FAS 157-3). FSP FAS 157-3 clarified the application
of FAS 157. FSP FAS 157-3 demonstrated how the fair value of a financial asset is determined when the market for that financial asset is inactive. FSP FAS 157-3 was effective upon issuance, including prior periods for which financial
statements had not been issued. The Managing Owner evaluated the impact of adopting FSP 157-3 on Registrants financial statements. The adoption of this standard did not have an impact on the Registrants financial statements.

In February 2007, the FASB issued SFAS No. 159 (SFAS 159), The Fair Value Option for Financial Assets and Financial Liabilities,
including an amendment of SFAS 115. This statement provides companies with an option to report selected financial assets and liabilities at fair value. This statement is effective for fiscal years beginning after November 15, 2007 with early
adoption permitted. The Managing Owner evaluated the impact of adopting SFAS 159 on Registrants financial statements. The Registrant adopted SFAS 159 during the first quarter of 2008, and it did not have a material effect on the
Registrants financial statements, as the Registrant did not elect the fair value option for any eligible financial assets or liabilities

In April
2007, the FASB released FASB Staff Position FIN No. 39-1 Offsetting of Amounts Related to Certain Contracts (FSP FIN 39-1). FSP FIN 39-1 requires that offsetting of assets and liabilities in the balance sheet is
improper except where a right of setoff exists. The application of FSP FIN 39-1 is required for fiscal years beginning after November 15, 2007 and interim period within those fiscal years. The Managing Owner evaluated the impact of adopting FSP
FIN 39-1 and its impact on the Registrants financial statements. The adoption of this standard did not have an impact on the Registrants financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities  an amendment of FASB Statement No. 133 (SFAS 161). SFAS 161
establishes, among other things, the disclosure requirements for derivative instruments and for hedging activities. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008.
The Managing Owner evaluated the impact of adopting SFAS 161 and its impact on the Registrants financial statements. The adoption of this standard is not expected to have an impact on the Registrants financial statements

Liquidity and Capital Resources

Registrant commenced operations on
January 5, 1995 with gross proceeds of $25,262,800 allocated to commodities trading. Additional contributions raised through the continuous offering of limited interests (Limited Interests) and general interests
(General Interests or Managing Owner Interests and, together with the Limited Interests, Interests) of beneficial ownership in Registrant through August 31, 1996 resulted in additional
gross proceeds to Registrant of $41,129,100. The continuous offering period ended on August 31, 1996.

The Trust Agreement provides that an Interest
holder may redeem its Interests as of the last business day of any calendar quarter at the then current net asset value per Interest. Redemptions of Limited Interests for the years ended December 31, 2008, 2007 and 2006 were $571,494,
$2,531,444 and $3,127,780, respectively. Redemptions of General Interests for the years ended December 31, 2008, 2007 and 2006 were $7,971, $35,880 and $26,319, respectively. Future redemptions will impact the amount of funds available for
investment in commodity contracts in subsequent periods.

At December 31, 2008, 100.05% of Registrants net assets were allocated to commodities
trading through its investment in the Trading Vehicle. A significant portion of Registrants net assets invested in the Trading Vehicle was held in cash, which was used as margin for trading in commodities. In as much as the sole business of
Registrant is to trade in commodities (through its investment in the Trading Vehicle), Registrant continues to own such liquid assets to be used as margin. The clearing broker and bank credit the Trading Vehicle (and, in turn, Registrant, as a
member of the Trading Vehicle) with interest income on 100% of its average daily equity maintained in its accounts with the clearing broker and bank during each month at competitive interest rates.

The commodities contracts may be subject to periods of illiquidity because of market conditions, regulatory considerations and other reasons. For example, commodity
exchanges limit fluctuations in certain commodity futures contract prices during a single day by regulations referred to as daily limits. During a single day, no trades may be executed at prices beyond the daily limit. Once the price of
a futures contract for a particular commodity has increased or decreased by an amount equal to the daily limit, positions in the commodity can neither be taken nor liquidated unless traders are willing to effect trades at or within the limit.
Commodity futures prices have occasionally moved the daily limit for several consecutive days with little or no trading. Such market conditions could prevent the Trading Vehicle (and, in turn, Registrant) from promptly liquidating its commodity
futures positions.

Since Registrants business is to trade futures and forward contracts (through its investment in the Trading Vehicle), its capital
is at risk due to changes in the value of these contracts (market risk) or the inability of counterparties to perform under the terms of



12



---

##### Table of Contents

the contracts (credit risk). Registrants exposure to market risk is influenced by a number of factors including the volatility of interest rates and
foreign currency exchange rates, the liquidity of the markets in which the contracts are traded and the relationships among the contracts held. The inherent uncertainty of Registrants speculative trading as well as the development of drastic
market occurrences could result in losses considerably beyond Registrants experience to date and could ultimately lead to a loss of all or substantially all of investors capital. The Managing Owner attempts to minimize these risks by
requiring Registrant, the Trading Vehicle and the Trading Advisor to abide by various trading limitations and policies, which include limiting margin amounts, trading only in liquid markets and permitting the use of stop loss provisions. For a
further discussion of the credit and market risks associated with Registrants futures and forward contracts through its investment in the Trading Vehicle, see Note 7 to Registrants financial statements for the year ended
December 31, 2008, which is filed as an exhibit herewith.

Market Overview

Following is a market overview for the years ended December 31, 2008, December 31, 2007 and December 31, 2006:

The Year Ended December 31, 2008

2008 was a watershed year for the world economy and the financial
industry. It marked the end of an era for the world economyan era of rising leverage, bloated balance sheets, inflated asset valuations, and above all, a dangerously unbalanced international economic and financial arrangement that was heavily
reliant on the American consumer as the buyer of last resort. The financial market upheavals of the past year, rivaled only by those of the Great Depression, smashed the aging edifice of the old era. The pain was all the more acute for the financial
sector, where the yearlong nightmare was topped off by the eruption of the Bernie Madoff scandal. Thanks to the dramatic monetary and fiscal policy moves worldwide, most notably by the US Federal Reserve, the US is unlikely to repeat the Depression
of the 1930s. However, the liquidity environment is likely to remain challenged and a sustainable economic recovery may well not begin until 2010.

The US economic data reported throughout the year were horrendous. The US economy lost 2.6 million jobs in 2008, the most since 1945. Of these, 1.9 million jobs were lost in the last few months of the year. The unemployment rate
jumped to over 7% to end the year, which is the highest it has been in sixteen years. The latest reported US housing prices showed a drop of over 15% from January 2008 through October 2008 and a 30% decline from January 2007 through October 2008 was
reported. At year end, housing starts were at the lowest levels in 50-years and housing permits, one of the leading economic indicators, were at 27-year lows. Retail sales struggled through 2008 and capped the year with one of the worst holiday
seasons on record.

According to the Merrill Lynch Index, treasuries of all maturities combined returned almost 15% in 2008. The Federal Reserve added
additional liquidity and slashed the Federal Discount Rate to a 0.0% - 0.25% range during December. For the first half of the year, the Federal Reserve Open Market Committee lowered rates in attempts to improve market conditions due to the sub-prime
mortgage crisis. Additional rate reductions were geared to stimulate the economy in the face of the global credit crisis as numerous financial institutions announced faltering operations during the last few months of 2008. As a result, the Discount
Rate and Federal Funds Rate decreased over 4% throughout the year.

As the housing and credit markets around the globe crumbled, the worlds central
banks worked collaboratively and lowered key rates throughout 2008. The Bank of England, faced with a deepening banking crisis and recession, lowered their rate by approximately 3.5% throughout the year. Even the President of the European Central
Bank (ECB), Jean Claude Trichet, had to abandon his long term hawkish stance as the ECB lowered rates to 2.0% by year end. The scene was all too familiar in Asia as the Peoples Bank of China and the Bank of Japan lowered rates in
2008.

Currencies:The Dollar Index, which measures the US unit against a basket of other currencies, capped off the year by gaining roughly 6%. The
greenbacks most noteworthy gains were concentrated on the euro, pound and Australian and New Zealand dollars. The US dollar continued to decline versus the Japanese yen in December and fell approximately 19% for the year, the largest decline
in more than twenty years. Japan appeared to be significantly less exposed to the credit crisis compared to the US, England, European Union, China and other nations as the yen witnessed gains across the board in 2008. Though the euro lost value
versus the US dollar in 2008, it ended the year with record performance versus the pound. The pound was the weakest among major currencies versus the US dollar with an approximate 27% slide during the year.

Energies:After crude reached a record high close of over $145 a barrel on July 3, the deleveraging and a severe drop off in demand caused the price of crude
to plummet. Within the Dow Jones AIG Commodity Index (DJAIG) crude was one of the worst performing sectors in 2008, posting losses in excess of 50% by closing the year near $45 a barrel. Crude continued to slide despite
significant OPEC (Organization of the Petroleum Exporting Countries) supply decreases in September, in October and again in December. Heating oil and reformulated gasoline had similar 2008 price trends. Reformulated gasoline posted the worst
performance within the DJAIG with losses amounting to roughly 60% for the year. Natural gas witnessed handsome returns through July as the price of domestic natural gas surged from the first quarter and rallied over 70% for the year. However, like
other commodities, the global economic malaise caused demand to drop off considerably leading to dramatic price reductions throughout the second half of the year. The dispute between Russia and the Ukraine, which disrupted the supply of natural gas
to Central and Eastern Europe during December, had little impact on price. Within the DJAIG, natural gas realized a loss near 25% for the year, which was the best performance for all energies within the Index.



13



---

##### Table of Contents

Agriculturals:Wheat, corn, soybeans and cotton ended the year with strong overall returns for December but all
suffered rather disappointing returns for the year. Overall for 2008, wheat, corn, soybeans and cotton ended the period down approximately 31%, 11%, 19% and 28%, respectively, within the DJAIG. Wheat gained early in the year on fears of feed grain
shortage but record annual harvest, followed by the wheat deleveraging that occurred in the second half of the year due to the global financial meltdown, led to increased supplies plaguing silos across the globe. The ethanol story, the growing
potential of an eventual global food shortage and capital flows into commodities, were all factors behind corns rally in the first half of 2008 that seemed to disappear in the third and fourth quarters of the year. Despite excessive
precipitation across the central bean belt and increased demand from China, which lent support for soybeans performance realized during the first and second quarters, all gains were erased in the third and fourth quarters.

Indices:The global equity performance for 2008 in general can be described as dreadful. The year started off poorly and the markets just got worse. Many market
participants fell victim to forced selling as massive capital outflows continued through year end. The global credit crisis and the recession worsened, but a flake of relief emerged as central banks worked collaboratively and lowered key rates,
added substantial liquidity and enacted stimulus packages during the final months of the year with more promised for 2009. The result for the major US indices was a modest advance in December as the Dow Jones Industrial Average posted a slight gain;
however, it ended the year down approximately 34%. The S&P 500 ended December with an advance but posted an approximate 37% loss for the year. For December, the NASDAQ recorded positive overall performance but technology stocks were a major
victim of the global economic collapse and realized an approximate 40% loss for the year. In Europe, the DAX and CAC witnessed positive performance in December; however, they posted losses of approximately 40% and 43%, respectively, for the year.
The London FTSE and Russian equities finished December and the year with negative returns. The three majors in Asia  the Nikkei, Hang Seng and Kospi  ended 2008 on a rally but down considerably for the year. Australia and New Zealand
witnessed steep losses in 2008 as well. The Latin American block was hit hard by the economic meltdown as the Mexican Bolsa Index and the Brazilian Bovespa Stock Index closed the year down considerably.

Metals:Gold posted strong performance as the precious metal advanced approximately 8% in December and finished 2008 up almost 5%. Asian and geopolitical buying,
flight-to-safety, strong European dealer demand and small losses in the US Dollar Index all factored into golds run in December. Silver, platinum and palladium all recorded gains in December; however, silver posted large losses within the
DJAIG on the year. Among base metals, 2008 was a terrible year across the board. The global housing and commercial real-estate market collapse and the looming economic recession caused demand for these metals to grind to a halt. Also, large
inventories of these metals drove the prices down further. Within the DJAIG, aluminum, zinc, copper and nickel wrapped up the year down approximately 36%, 49%, 54% and 55%, respectively.

Softs and Livestock: Sugar featured a relatively quiet December and lost about 1% overall for the month as abundant supply prevailed. However, sugar was the leading commodity in the DJAIG and witnessed an
overall gain of over 9% for the year. Coffee and cocoa ended a miserable year with negative overall performance. As the global economy worsened, beef demand continued to fall, resulting in cattle prices dropping by a disappointing 12% within the
DJAIG for the year. Hogs were one of the few sectors within the DJAIG to cap the year with overall positive returns. Demand increases, mainly in China, drove hog prices up over 5% in 2008 within the DJAIG.

The Year Ended December 31, 2007

The
global economy endured the unfolding of the subprime credit crisis for most of 2007. August 2007 will forever be etched in the financial pantheon alongside 1998 and 1987 as defining events of their respective decades. The US economy has cooled
considerably since the beginning of the year and many economists are signifying a recessionary like outlook at best in the coming months, not the soft landing that was anticipated. While the US economy proved volatile
throughout the year, the rest of the world appeared to be going strong.

During 2007, single-family housing starts and permits hit sixteen-year lows as
starts fell over 5% and are approximately 24% below 2006. The Home Builders Confidence Index witnessed the lowest drawdown in nineteen years. In November, UK housing prices showed their greatest monthly dive in twelve years as the subprime crisis
clearly impacted non-US markets. Inflation concerns led to the Bank of England (BOE) to cut rates late in 2007.

In the US, the
unemployment rate unexpectedly jumped to 5.0% during the fourth quarter as private sector payrolls fell, signaling the first decline in four years. For the first time since September 2003, fewer than half of the industries surveyed added jobs.

Currencies: While the US dollar managed periodic strength during December, the dollar ended 2007 with staggering losses to major rivals. The final
2007 tally saw the euro, pound and yen gaining over 10%, 6% and 2%, respectively. After witnessing a record monthly low in November, the Dollar Index ended the year over 76.5. Throughout the year, emerging nations gained greater confidence in their
domestic economic strength. Many, especially in Asia, slowly abandoned the managed dollar peg.

The pound finished the year with gains on the dollar,
despite losses in December as a result of a BOE rate decrease. The euro had a strong year and benefited from perceptions that the European Central Bank (ECB) would not be lowering rates any time soon as ECB President Jean Claude
Trichet issued a series of hawkish comments, mainly as related to inflation concerns. European Union economic data was mixed to weak, including a twenty-two month low reading of the German IFO Business Confidence Index.



14



---

##### Table of Contents

The yen closed out 2007 up 2% for the year on the US dollar. Japanese economic data persisted as lackluster and those
calling for a rate increase have now mostly backed away from that forecast. The yuan extended its yearlong gradual advance in December as the Peoples Bank of China continued to contract. Since abandonment of the US dollar peg in January 2005, the
yuan has risen 12% to the dollar. The Canadian, Australian and New Zealand dollars posted gains on the year against the US dollar.

Energies: It was
a tremendous year for the petroleum sector as crude oil prices rose more than 40% within the Dow Jones AIG Index and closed 2007 over $95. Crude briefly reached the ominous $100 level but the market failed to hold that level in initial efforts.
Geopolitical events were supportive during the year, encouraging the high volatility patterns. Supply/demand fundamentals have been trending weaker and the market saw periodic selling as related to concerns surrounding slowing US and global growth.
The US dollar remained a key influence and the dollars demise was a key factor in crudes run. Overall demand for commodities as an asset class was supportive, particularly in the Peoples Republic of China and in India.

Reformulated gasoline soared throughout the year and topped off with a year-to-date gain of over 45% within the Dow Jones AIG Index. Heating oil performed well in 2007
and closed up 5.5% within the same index. Distillate inventories remained below the five-year average and Department of Energy inventories ran 6% under last year despite relatively moderate weather conditions.

Agriculturals: Clearly, 2007 was a superior year for commodities as evidence by stronger readings in the major indices. The 19-component Dow Jones AIG Index
witnessed a yearly gain of over 11%. Commodities attracted significant interest as an alternative asset class throughout 2007. Corn closed the year at prices that have not been seen since the summer of 1996. One key fundamental factor contributing
to corns growth, besides the evident global demand for ethanol, is the increased quality of living in developing countries such as China and India. On the production side, perhaps with the exception of soybeans, wherever crop
interchangeability allows, corn will continue to steal acres from competing agricultural products.

Soybean prices finished the year over $12.50, which is
second to historical highs set in June of 1973. The fundamentals for soybeans remain demand driven. Chinas need for beans, bean oil and bean meal is so massive that all importation taxes and tariffs on all three have been dropped, which is a
rare move. On the supply side, the battle for global acreage will hinge on the relative value of competing crops. In 2007, the wheat market realized an outstanding 87% increase in prices from 2006, setting new all time record prices. This gain is
despite the historic drought in Australia, one of the worlds largest producers of the grain. On the whole, cotton improved in 2007 ending the year with over a 22% increase, at a level that has not been seen since early 2004.

Indices: The major US equity indices slumped in the fourth quarter under the weight of the subprime credit crisis but still tallied gains for the year. For 2007,
the Dow Jones rose over 6%, the S&P 500 added 3.5%, while the tech heavy NASDAQ was the leading performer with a 10% gain. The fourth quarter sell-off was a result of traders becoming increasingly concerned about the economy in general and
housing in particular. Some doubted the Federal Reserves (Fed) resolve to address the economic issues in the face of growing inflation concerns. Also, interest and demand for commodities as an alternative asset class weighed on
the equity sector.

To a lesser extent, European equities echoed the weak tone of the US during the fourth quarter. However, the German DAX showed strong
gains of 22% during 2007. The CAC and FTSE scored much lower gains of 1% and 4%. The broad based Pan-European Dow Jones STOXX 600 suffered minor losses as markets outside of the big three struggled.

Equities soared in Asia with the Hang Seng Index, Shanghai Composite, Kospi Index and Australian All Ordinaries setting record highs during 2007. During the fourth
quarter, volatility was rampant across Asian equities. While the Hang Seng performed extremely well, with almost a 40% gain on the year, it was a different story for Japan as the NIKKEI lost over 11%, resulting in the first decline in the past five
years. Despite the International Monetary Fund lowering Japans growth rate in November, business investment remained expansionary and many market participants view a Japanese recession as unlikely.

Interest Rates: With inflation concerns and the global credit crisis taking center stage during the second half of the year, the Fed reacted aggressively on
September 18 and cut both the Fed Funds rate by 50 basis points from 5.25% to 4.75% and the discount rate to 5.25%. After this action, the yield curve showed significant steepening. The 2 and 10 year benchmark notes ended the year lower than
2006. The Federal Reserve indicated possible future US rate hikes in the coming months. The TED spread continued to rise through November.

After a pair of
rate hikes in the first half of the year, the ECB held steady at 4.00% through year-end and the euro benefited from perceptions that the ECB seems to be in a holding pattern. The BOE issued three quarter-point rate increases in the first half of
2007. Forced to deal with the Northern Rock Crisis, declines in consumer confidence, housing declines and weakness in the service sector during the second half of the year, the BOE slashed their rate by a quarter-point in December to end the year at
5.50%.

The Bank of Japan (BOJ) raised rates in the first quarter of the year and held the rate steady through the end of the year. A
rash of lackluster economic data weighed on BOJ officials but they kept the rates unchanged. The Peoples Bank of China drained liquidity and gradually hiked interest rates throughout 2007.

Metals: Base metals had a rather difficult 2007. The dismal housing market, poor construction data in the US and UK and the sliding US dollar had a significant
impact. Zinc was the worst performer among the nineteen components of the Dow Jones AIG Index, with



15



---

##### Table of Contents

annual losses over 43%. Aluminum and nickel witnessed steep losses over 18% and 16% within the Dow Jones AIG Index, respectively. In December, copper had a
rough month but still posted an annual gain of over 4.5%.

Precious metals, on the other hand, recorded tremendous gains during 2007. Gold sky rocketed to
a near twenty-eight year high and finished 2007 up over 32%. This trend was fueled by the weak dollar, soaring oil prices, subprime credit woes and several geopolitical events, including the recent developments in Pakistan. Gold saw spotty selling
per the yen carry trade and other margin needs during the second half of the year. Silver traded with more volatility than gold and experienced less flight-to-safety demand and ended the year topping a 9% profit. Platinum had a positive year as
Asian demand for the metal held strong.

Softs and Livestock: Citrus finished up 2007 on the rally side following forecasts of freezing temperatures
in the sunshine state. However, this rally could not offset losses realized throughout the year. Sugar and coffee had a rather difficult year as well. Within the Dow Jones AIG Index sugar and coffee were down more than 14% and 6%, respectively.
Following negative 2006 performance, cocoa rebounded in 2007, achieving a 17% return on the year.

2007 proved less than kind to livestock prices as both
cattle and hogs suffered losses. Live cattle were down more than 6% within the Dow Jones AIG Index. Korea rejected a series of shipments of US beef on trepidation of mad-cow disease concerns. Hogs were the second worst performer within the Dow Jones
AIG Index with a 30% loss.

The Year Ended December 31, 2006

The U.S. Federal Reserve (Fed) ceased raising rates in the fourth quarter. The perception remains that although the economy is slowing, there is no
danger of a recession and that a soft landing is the most likely scenario. Range trading may be the dominant pattern for the next few months as prices react to the economic data. The yield on the benchmark U.S. 10-Year note finished November at an
11-month low. A weaker U.S. dollar failed to dampen enthusiasm for U.S. Treasuries. The latest data available shows capital flows to the U.S. rose in October.

On the employment front, job growth accelerated in December as non-farm payrolls rose while the unemployment rate held steady at 4.5%. This is down from 4.9% at the start of 2006. Of some concern was a 0.5% jump in average hourly earnings,
taking them up 4.2% over the past 12 months. Overall, the employment picture persists as healthy but the construction, manufacturing and retail sectors all lost jobs in December.

Regarding U.S. inflation, the November Consumer Price Index (CPI) was unchanged and the Core CPI, which factors out the more volatile food and energy prices, was also flat. This is the lowest
reading for the core rate since November 2005. There were clearly no inflation worries in this data. The Producer Price Index (PPI) was not as controlled, climbing 2.0%, the most since 1974. The surge was caused by a jump in
energy, car and truck prices.

Housing has been a major economic concern in 2006. November Housing Starts rose following a big drop in October.
November Housing Permits, however, fell slightly. Over the past 11 months, Housing Starts were 12.5% below 2005 levels while Housing Permits were off 14.1%. Homebuilders confidence, as indicated by the NAHB/Wells Fargo Index fell in December.

The overall consumer confidence picture remained mixed with the high end and electronics sectors doing well. November Retail Sales rose 1.0%. The
unusually warm weather hurt clothing and Department Store Sales. Third quarter Gross Domestic Product, a measure of economic growth, was revised downwards to the lowest level since the fourth quarter of 2005. Home building remains the main drag on
growth.

While the Fed was on hold with respect to interest rate policy, the European Central Bank (ECB), the Bank of England
(BOE) and the Peoples Bank of China (PBC) all raised interest rates. British housing prices and CPI growth continue to be high. Germany continues to exhibit growth, and leads the increasingly strong Eurozone.
The Bank of Japan (BOJ) remained cautious, with no additional rate hikes following the July increase to 0.25%. The economy appears mixed, with consumer spending still less than the economy requires. The Bank of Canada, Reserve
Bank of Australia and New Zealand central bank all remained on hold in December.

Currencies: The euro strengthened versus the U.S. dollar in 2006,
reversing the pattern from 2005. The euro also strengthened against the Japanese yen, achieving record levels in December. Germany, the engine of Eurozone growth, has been the strongest European economy this year. Interest rate differential factors
supported the euro through much of the fourth quarter of 2006. Of great significance, central banks around the globe have initiated a policy of diversification out of the U.S. dollar and into the euro, the British pound, and to a lesser extent, the
Japanese yen.

The British pound ended the year slightly off its high, after rising approximately 14% versus the U.S. dollar. British housing prices have
been surging and the CPI came in above the BOEs target.

The Japanese yen fell against the U.S. dollar, euro and British pound during the fourth
quarter of 2006. Japan exited its deflationary era in 2006, although the fourth quarter saw less than robust growth on the consumer side. Other Asian currencies were better performers, with the Korean won having a particularly solid December and
fourth quarter.



16



---

##### Table of Contents

The Peoples Bank of China continues to tighten the reins on the economy. Most recently, the PBC increased the reserve
requirement ratio for banks and raised the base interest rate 50 points to 6.72%. The yuan has shown an accumulative appreciation of about 3.7% since the July 2005 revaluation.

Energies: Crude oil was strong during the first half of the year and weakened during the second half, with the exception of a brief respite during November. Crude ended December around $60 per barrel, which
contrasts to its mid-July peak of nearly $78 per barrel. Record warm weather in key consuming regions in the U.S. put pressure on the market during the quarter, as did a generally benign geopolitical scene and poor member compliance with OPECs
announced production cuts.

The unusually warm weather kept heating oil under pressure during December. Heating oil will be dependent on a general recovery
in commodity prices and a sudden weather shift in coming weeks. Department of Energy gasoline inventories are 0.5% below last season. The driving season was extended by the warm weather conditions.

Natural gas fell during the fourth quarter with the weather weighing heavily on investor sentiment. Inventories are still burdensome and demand is slowing rather than
rising during the normally strong seasonal demand time frame. What remains to be seen is whether the markets have discounted the majority of these bearish fundamentals.

Grains:While Decembers performance was mixed, corn trended upwards for the fourth quarter as a whole. The last week of the month, quarter, and year saw the posting of a multi-year high, with the final
price for 2006 settling at the highest weekly close on the charts since the drought-driven summer rally in July of 1996. The main drivers behind the re-awakening of corn prices were threefold: 1) an increase in overseas demand due to improving
global economic conditions; 2) the expansion of the production of ethanol; and 3) the ongoing increase in hedge fund and money managers investing in alternative non-correlated asset classes. For the quarter as a whole, despite a large trading
range, the wheat market put in somewhat disappointing, albeit upward trending performance. The uncertainty caused by ongoing drought conditions in Australia, the relatively high price for wheat and tight global stocks had an effect on supply and
demand. The trend for soybean prices was higher for the fourth quarter of 2006. Export demand for soybeans, soybean oil and soybean meal all appear to be increasing. As corn production is increasingly diverted to the production of ethanol,
substitute feedstuffs, with soybeans as the closest surrogate, may also feel the upward pull of prices. As the global supply of foreign cotton sold out late in the year, prices began to move higher from mid-November through the end of the year. The
lethargy that characterized most of 2006 was a product of a massive carryover of last years crop, along with last summers unfortunate elimination of a marketing program which left U.S. cotton uncompetitively priced.

Indices:U.S. equities recorded their best gains in three years during the fourth quarter of 2006. The weakness in real estate that may have caused a shift into
equities, large levels of global liquidity, a drop in oil prices, a quiet geopolitical atmosphere, solid earnings and a brisk mergers and acquisitions calendar all added to the positive performance. A shift out of commodities also aided the tone of
global equities. Blue chips, financials, oil and big caps did well, and at the end of the quarter technology names took a leading role.

It was also a very
good December, fourth quarter and year for the European equity markets. Markets in Germany, the U.K. and France all ended higher for the fourth quarter. Heavy merger and acquisition activity was a major feature in Europe, along with a solid run of
earnings and significant fund inflows. The strong U.S. market was also a psychological plus. The prospect of further rate hikes from the ECB, and to a lesser extent the BOE, failed to diminish enthusiasm.

Asian/Pacific Rim equities also recorded solid 2006 gains, despite volatile trading. Record highs were achieved in Singapore, Australia and New Zealand during the final
session of the year as well as for Chinas Shanghai Composite. A growing Japanese economy served to buoy enthusiasm and a modest 0.25% base interest rate was supportive. Thailands SET Index had a very volatile month after the central bank
attempted to impose controls on capital for foreign investors in the stock market, but that was quickly reversed when the SET tumbled 15%, and prices subsequently recovered. However, Thailand has seen continuing political unrest.

Interest Rates: As expected, the Fed remained on hold at its December 12 meeting. The minutes of the most recent Federal Open Market Committee
(FOMC) meeting were virtually the same as the November meeting, indicating that the FOMC unanimously agreed that inflation persists as the primary concern to the economy. However, at the same time they stated the economy might
have been a bit softer than previously thought.

In the international arena, the ECB increased rates 25 basis points in December and the BOE raised rates
25 basis points in November. The BOJ made just one move to 0.25% in 2006. Japanese consumer data has been a bit sluggish; something the BOJ will keep in focus. The Peoples Bank of China is currently engaged in a tightening process, and is actively
draining liquidity by increasing reserve requirements.

Metals: A weak U.S. dollar helped support gold for most of the quarter but during late
December the dollar showed signs of a consolidation rally and gold fell. Plunging energy prices had a negative impact on gold prices as well. Silver traded at its best levels in more than six months during the quarter, but ended the year off its
highs. For the year, silver significantly outperformed gold. Speculative participation was heavy throughout the quarter, setting the stage for high volatility. A steady increase in inventories weighed on copper prices in the fourth quarter. A
lessening of labor concerns, particularly in Chile and Canada, and the fact that Chinas buying pace slowed in 2006 added to the negative tone. Zinc supplies remained tight and strong demand



17



---

##### Table of Contents

continued. Aluminum prices held up well in the fourth quarter in the face of a general commodity weakness. Nickel was one of the strongest performers in the
metals group due to tight supply and a strong pattern of stainless steel demand.

Softs:Forecasts for a significant global supply surplus of sugar
weighed on sentiment, causing prices to decline 29% on the year. This made sugar the weakest agricultural commodity in the Dow Jones/AIG Index. Coffee prices remained relatively flat for 2006 and overall global coffee demand was solid. Scaled back
cocoa crop prospects for the Ivory Coast, the worlds largest producer, added to the commoditys recent bullish tone. The political situation in the Ivory Coast continues fairly quiet but civil unrest remains a potential factor. The cattle
market traded sideways for most of the fourth quarter until severe weather conditions reduced cattle supply and caused prices to rise in the second half of December. Hog supply was ample during the quarter as the US entered a seasonally slow demand
period. On the bright side, the most recent USDA estimate is that US pork exports will rise in 2007 to follow the 2006 increase.

Sector Performance

Due to the nature of Registrants trading activities, a period-to-period comparison of its trading results is not meaningful. However, a
discussion of Registrants trading results for the major sectors in which Registrant traded for the years ended December 31, 2008, December 31, 2007 and December 31, 2006 are presented below.

The Year Ended December 31, 2008

Currencies: (+) Registrant experienced a majority of its gains in the Swiss franc, Canadian dollar, euro and British pound. The majority of losses were seen in the South African rand and New Zealand dollar.

Energies: (+)Registrant experienced gains in reformulated gasoline, heating oil, brent crude, crude oil and gas oil. Losses incurred in natural gas.

Grains: (+)Registrant experienced gains in cotton, corn and soybeans. Losses incurred in wheat.

Indices: (+)Registrant experienced a majority of its gains in the DJ Stoxx 50, S&P 500, DAX and Nikkei. Losses were made in the NASDAX 100.

Interest Rates: (+)Registrant experienced a majority of its gains in US Treasury Notes, Eurodollar and the German Bund and BOBL. The majority of losses
were incurred in Euroyen Tiffe and Canadian bonds.

Meats: (-)Registrant experienced gains in feeder cattle and live hogs. Losses were incurred in
live cattle.

Metals: (+)Registrant experienced gains in gold, zinc and platinum. Losses were incurred in copper and aluminum.

Softs: (-) Registrant experienced gains in coffee and cocoa. Losses were incurred in sugar.

The Year Ended December 31, 2007

Currencies: (+) Registrants investments in this sector experienced a majority of its losses in Japanese yen, Mexican peso, Japanese yen versus the euro, Swiss franc and South African rand. The majority of gains were
experienced in the euro, Canadian dollar, Brazilian real, Australian dollar and the euro versus the Japanese yen.

Energies:
(+)Registrants investments in this sector experienced losses in gasoline and heating oil. Gains were made in crude oil, gas oil and natural gas.

Grains: (+)Registrants investments in this sector experienced losses in corn and cotton. Gains were made in soybean oil, canola oil, wheat, soybean meal and soybeans.

Indices: (-) Registrants investments in this sector experienced a majority of its losses in the FTSE 100, Nikkei, Taiwan, Hang Seng and the CAC 40 indices.
The majority of gains were made in the Australian All Ordinaries, DAX and the Mid Cap 400 indices.

Interest Rates: (+) Registrants
investments in this sector experienced a majority of its losses in Australian bonds, Australian Bank Bills and Eurodollars. The majority of gains were made in Short Sterling, Japanese Government Bonds, British Gilt and U.S. Treasury Notes.

Meats: (+) Registrants investments in this sector experienced losses in feeder cattle. Gains were made in live cattle and live hogs.

Metals: (+)Registrants investments in this sector experienced losses in copper, aluminum, zinc and silver. Gains were made in gold,
lead, nickel and platinum.



18



---

##### Table of Contents

Softs: (-) Registrants investments in this sector experienced losses in cocoa and coffee. Gains were made in
sugar.

The Year Ended December 31, 2006

Currencies: (-)Registrants revenue from the currency sector was down for the year, with a majority of the losses coming from long and short positions in the Euro, Norwegian Krone and Swiss Franc.

Energies: (-)Registrants revenue from The energy sector was down for 2006. The majority of the losses were from long and short positions in
crude oil and heating oil.

Grains: (-)Registrants revenue from the grain sector was down for the year, with a majority of the losses coming
from long and short positions in corn, wheat and soybean oil.

Indices: (+)Registrants revenue from the sector was positive for 2006
primarily due to long positions in the DAX, the IBEX and the Hang Seng indices.

Interest Rates: (+)Registrants revenue from the sector
was up for the year, with a majority of the gains coming from short positions in the Eurodollar, Short Sterling and Euribor.

Metals:
(+) Registrants long positions in gold, aluminum and zinc contributed to a gain in Registrants revenue from the sector for 2006.

Softs: (-)Registrants revenue from the sector was down for the year, with losses from long and short positions in cocoa and cattle.

Results of Operations

The net asset value (Net Asset Value) per Interest as of December 31, 2008, was $260.16, an
increase of 10.41% from the December 31, 2007 Net Asset Value per Interest of $235.63, which was an increase of 5.80% from the December 31, 2006 Net Asset Value per Interest of $222.71 which was a decrease of 4.16% from the
December 31, 2005 Net Asset Value per Interest of $232.38. The CISDM CPO Asset Weighted Index (formerly known as the Zurich Fund/Pool Qualified Universe Index) returned 16.29%, 8.55% and 8.30% for the years ended December 31, 2008, 2007
and 2006, respectively. The CISDM CPO Asset Weighted Index is the dollar weighted, total return of all commodity pools tracked by Managed Account Reports, LLC. Past performance is not necessary indicative of future results.

Registrants average net asset level during the year ended December 31, 2008 was approximately $11,409,000, a decrease of approximately $258,000 as compared to
the year ended December 31, 2007 primarily due to the effects of redemptions. Registrants average net asset level during the year ended December 31, 2007 was approximately $11,667,000, a decrease of approximately $3,511,000 as
compared to the year ended December 31, 2006 primarily due to the effects of redemptions. Registrants average net asset level during the year ended December 31, 2006 was approximately $15,178,000, a decrease of approximately
$2,637,000 as compared to the year ended December 31, 2005 primarily due to the effects of redemptions and negative trading performance.

Registrants trading gains before commissions and other chargers were approximately $2,651,000, $1,560,000 and $67,000 for the years ended December 31, 2008, 2007 and 2006, respectively.

Interest income is earned on the average daily equity maintained with the clearing broker or bank at competitive interest rates and, therefore, varies monthly according
to interest rates, trading performance and redemptions. Interest income during the year ended December 31, 2008 was approximately $137,000, a decrease of approximately $349,000 as compared to the year ended December 31, 2007 primarily due
to a decrease in average net assets discussed above and declining short term interest rates. Interest income during the year ended December 31, 2007 was approximately $486,000, a decrease of approximately $265,000 as compared to the year ended
December 31, 2006 primarily due to a decrease in average net assets discussed above. Interest income during the year ended December 31, 2006 was approximately $751,000, an increase of approximately $167,000 as compared to the year ended
December 31, 2005 primarily due to increased short-term interest rates, which more than offset the decrease in average net assets discussed above.

Administrative services are calculated on Registrants Net Asset Value at the beginning of each month and, therefore, vary according to monthly trading performance and redemptions. Other transaction fees consist of National Futures
Association, exchange and clearing fees as well as floor brokerage costs and give-up charges, which are based on the number of trades the Trading Advisor executes, as well as which exchange, clearing firm or bank on, or through, which the contract
is traded. Administrative services and other transaction fees during the year ended December 31, 2008 were approximately $886,000, a decrease of approximately $23,000 as compared to the year ended December 31, 2007 primarily due to a
decrease in average net assets discussed above. Administrative services and other transaction fees during the year ended December 31, 2007 were approximately $909,000, a decrease of approximately $282,000 as compared to the year ended
December 31, 2006 primarily due to a decrease in average net assets discussed above. Administrative services and other transaction fees during the year



19



---

##### Table of Contents

ended December 31, 2006 were approximately $1,191,000, a decrease of approximately $197,000 as compared to the year ended December 31, 2005
primarily due to a decrease in average net assets discussed above.

Management fees are calculated on the Net Asset Value of Registrants investment
in the Trading Vehicle at the end of each month, and therefore, are affected by trading performance and redemptions. Management fees during the year ended December 31, 2008 were approximately $235,000, a decrease of approximately $3,000 as
compared to the year ended December 31, 2007 primarily due to a decrease in average net assets discussed above. Management fees during the year ended December 31, 2007 were approximately $238,000, a decrease of approximately $68,000 as
compared to the year ended December 31, 2006 primarily due to a decrease in average net assets discussed above. Management fees during the year ended December 31, 2006 were approximately $306,000, a decrease of approximately $51,000 as
compared to the year ended December 31, 2005 primarily due to a decrease in average net assets discussed above.

General and administrative expenses
net of any reimbursement from the Managing Owner for the years ending December 31, 2008, 2007 and 2006 were approximately $60,000, $57,000 and $0, respectively. These expenses charged to Registrant through its investment in the Trading Vehicle
include accounting, audit, tax, and legal fees, as well as printing and postage costs related to reports sent to limited owners. Reimbursement received by the Registrant from the Managing Owner totaled approximately $23,000, $0 and $0 for the years
ended December 31, 2008, 2007 and 2006. Reimbursement in 2008 represents the Registrants pro-rata allocation of the Spectrum Global Fund Administration administrative fee from the Trading Vehicle.

Incentive fees, which are based on the New High Net Trading Profits (as defined in the Advisory Agreement) generated by the Trading Advisor, are accrued
monthly and are ultimately determined as of the close of business on the last business day of each calendar quarter. Incentive fees of approximately $469,000, $256,000 and $0 were incurred for the years ended December 31, 2008, 2007 and 2006,
respectively.

Inflation

Inflation has had no material
impact on operations or on the financial condition of Registrant from inception through December 31, 2008.

Off-Balance Sheet Arrangements and
Contractual Obligations

As of December 31, 2008, Registrant had not utilized special purpose entities to facilitate off-balance sheet financing
arrangements and has no loan guarantee arrangements or off-balance sheet arrangements of any kind other than agreements entered into in the normal course of business, which may include indemnification provisions related to certain risks service
providers, such as our accountants, undertake in performing services which are in the best interests of Registrant. While Registrants exposure under such indemnification provisions cannot be estimated, these general business indemnifications
are not expected to have a material impact on Registrants financial position.

Registrants contractual obligations are with the Managing Owner
and the Trading Vehicle and, as a result of its investment in the Trading Vehicle, with the Trading Advisor and the Trading Vehicles commodity broker. Management fees payable by Registrant to the Trading Advisor (through its investment in the
Trading Vehicle) and the Managing Owner are calculated as a fixed percentage of the Trading Vehicle and Registrants Net Asset Value, respectively. Incentive fees payable by the Registrant to the Trading Advisor (through its investment in the
Trading Vehicle) are at a fixed rate, calculated as a percentage of the Trading Vehicles New High Net Trading Profits. As such, the Managing Owner cannot anticipate the amounts to be paid for future periods as Net Asset Values and
New High Net Trading Profits are not known until a future date. Commissions payable to the Trading Vehicles commodity broker are based on a cost per executed trade and, as such, the Managing Owner cannot anticipate the amount that
will be required under the brokerage agreement, as the level of executed trades are not known until a future date. These agreements are effective for one-year terms, renewable automatically for additional one-year terms unless terminated.
Additionally, these agreements may be terminated by either party thereto for various reasons. For a further discussion of Registrants contractual obligations, see Notes 1, 3 and 4 to Registrants financial statements for the year ended
December 31, 2008, which is filed as an exhibit herewith.



|Item 7A. | Quantitative and Qualitative Disclosures About Market Risk
|-------- | ----------------------------------------------------------

Information regarding quantitative and qualitative disclosures about market risk is not required pursuant to Item 305(e) of Regulation S-K.



|Item 8. | Financial Statements and Supplementary Data
|------- | -------------------------------------------

The financial statements are incorporated by reference to pages 3 through 5 of Registrants 2008 Annual Report, which is filed as an exhibit hereto.



20



---

##### Table of Contents

Selected unaudited quarterly financial data for the years ended December 31, 2008 and 2007 are summarized below:



|                                                                                                  |  |              |            |   |               |   |              |  |   |               |   |  |   |          
|------------------------------------------------------------------------------------------------- |  | ------------ | ---------- | - | ------------- | - | ------------ |  | - | ------------- | - |  | - | ---------
|                                                                                                  |  | FirstQuarter |            |   | SecondQuarter |   | ThirdQuarter |  |   | FourthQuarter
|2008:                                                                                             |  |              |            |   |               |   |              |  |   |               |   |  |   |          
|Total revenues (including interest)                                                               |  | $            | 1,503,615  |   |               | $ | 811,654      |  | $ | (812,403      | ) |  | $ | 1,285,064
|                                                                                                  |  |              |            |   |               |   |              |  |   |               |   |  |   |          
|Total revenues (including interest) less commissions administrative services and transaction fees |  | $            | 1,281,210  |   |               | $ | 584,575      |  | $ | (1,032,390    | ) |  | $ | 1,068,584
|                                                                                                  |  |              |            |   |               |   |              |  |   |               |   |  |   |          
|Net income (loss)                                                                                 |  | $            | 933,916    |   |               | $ | 369,200      |  | $ | (1,097,730    | ) |  | $ | 933,115  
|                                                                                                  |  |              |            |   |               |   |              |  |   |               |   |  |   |          
|Net income (loss) per weighted average interest                                                   |  | $            | 20.07      |   |               | $ | 8.04         |  | $ | (24.28        | ) |  | $ | 20.88    
|                                                                                                  |  |              |            |   |               |   |              |  |   |               |   |  |   |          
|                                                                                                  |  |              |            |  
|                                                                                                  |  | FirstQuarter |            |   | SecondQuarter |   | ThirdQuarter |  |   | FourthQuarter
|2007:                                                                                             |  |              |            |   |               |   |              |  |   |               |   |  |   |          
|Total revenues (including interest)                                                               |  | $            | (941,296   | ) |               | $ | 1,730,898    |  | $ | 587,164       |   |  | $ | 668,482  
|                                                                                                  |  |              |            |   |               |   |              |  |   |               |   |  |   |          
|Total revenues (including interest) less commissions administrative services and transaction fees |  | $            | (1,190,777 | ) |               | $ | 1,503,920    |  | $ | 372,119       |   |  | $ | 451,320  
|                                                                                                  |  |              |            |   |               |   |              |  |   |               |   |  |   |          
|Net income (loss)                                                                                 |  | $            | (1,257,913 | ) |               | $ | 1,355,600    |  | $ | 231,105       |   |  | $ | 256,598  
|                                                                                                  |  |              |            |   |               |   |              |  |   |               |   |  |   |          
|Net income (loss) per weighted average interest                                                   |  | $            | (21.87     | ) |               | $ | 25.12        |  | $ | 4.66          |   |  | $ | 5.39     
|                                                                                                  |  |              |            |   |               |   |              |  |   |               |   |  |   |          

There were no extraordinary, unusual or infrequently occurring items recognized in any quarter reported above, and
Registrant has not disposed of any segments of its business. There have been no year-end adjustments that are material to the results of any fiscal quarter reported above.



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

None



|Item 9AT. | Controls and Procedures
|--------- | -----------------------

Evaluation
of Disclosure Controls and Procedures

Registrants disclosure controls and procedures (as such term is defined in Rules 13a-15(e)
and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) are designed to ensure that information required to be disclosed by Registrant in reports filed or submitted under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the SEC), and that such information is accumulated and communicated to
Registrants management, including the Managing Owners Co-Chief Executive Officers and Director of Fund Administration (who, in these capacities, function as the Principal Executive Officers and Principal Financial Officer, respectively,
of Registrant), as appropriate to allow for timely decisions regarding required disclosure.

In designing and evaluating Registrants disclosure
controls and procedures, the Managing Owner recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of
disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of the controls can prove absolute assurance that all control issues and instances of fraud, if any, within Registrant have been detected.

The Managing Owners management, under the supervision and with the participation of certain officers of the Managing Owner (including the Managing Owners
Co-Chief Executive Officers and Director of Fund Administration), has evaluated the effectiveness of Registrants disclosure controls and procedures as of December 31, 2008. Based upon such evaluation, the Managing Owners Co-Chief
Executive Officers and Director of Fund Administration have concluded that, as of December 31, 2008, Registrants disclosure controls and procedures were effective.



21



---

##### Table of Contents

Managements Report on Internal Control Over Financial Reporting

Registrants management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act
Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of Registrants management, including the Managing Owners Co-Chief Executive Officers and Director of Fund Administration, Registrant conducted an evaluation
of the effectiveness of its internal control over financial reporting as of December 31, 2008 based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Based on the evaluation under the framework in Internal Control - Integrated Framework issued by COSO, the Managing Owner concluded that Registrants internal controls over financial reporting
were effective as of December 31, 2008.

There are inherent limitations in the effectiveness of any internal control system, including the possibility
of human error and the circumvention of overriding controls. Because of these inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Accordingly, even effective internal control over financial
reporting can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to
the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Attestation Report of the Registered Public Accounting Firm

Registrants 2008 Annual Report does not
include an attestation report of Registrants independent registered public accounting firm regarding the Registrants internal control over financial reporting. Managements report was not subject to attestation by Registrants
independent registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit Registrant to provide only managements report in its 2008 Annual Report.

Changes in Internal Control Over Financial Reporting

There
have been no changes in Registrants internal control over financial reporting (as defined in Rules 13a  15(f) and 15d  15(f) under the Exchange Act) during the fourth quarter of 2008 that have materially affected, or are reasonably
likely to materially affect, Registrants internal control over financial reporting.



|Item 9B. | Other Information
|-------- | -----------------

None

PART III



|Item 10. | Directors, Executive Officers and Corporate Governance
|-------- | ------------------------------------------------------

Registrant had no directors or executive officers. Registrant is managed by the Managing Owner.

The directors and
executive officers of the Managing Owner are as follows:

Mr. Kenneth A. Shewer (born 1953), a Director and Co-Chief Executive Officer of
the Managing Owner, has been a principal, associated person and NFA associate member of the Managing Owner since February 8, 1984, May 1,1985 and August 1, 1985, respectively. He has been Chairman and Co-Chief Executive Officer
of the Managing Owner since February 1984. Mr. Shewer was employed by Pasternak, Baum and Co., Inc. (Pasternak, Baum), an international cash commodity firm, from June 1976 until September 1983. Mr. Shewer created and
managed Pasternak, Baums Grain Logistics and Administration Department and created its Domestic Corn and Soybean Trading Department. Mr. Shewers responsibilities at Pasternak, Baum included merchandising South American grain and
exporting United States corn and soybeans. In 1982, Mr. Shewer became co-manager of Pasternak, Baums F.O.B. Corn Department. In 1983, Mr. Shewer was made Vice President and Director of Pasternak, Baum. Mr. Shewer has traveled
extensively in South America and Europe in connection with the commodity business and has organized and effected grain and oilseed sales in those regions, the former Soviet Union, and the Far East. While at Pasternak, Baum, Mr. Shewer was a
member of the St. Louis Merchants Exchange and was associated with the National Grain and Feed Association and the North American Export Grain Association.

Mr. Shewer graduated from Syracuse University with a B.S. degree in 1975. Mr. Shewer sits on the Board of the Stacy Joy Goodman Memorial Foundation, a non-profit charity committed to finding a cure for Juvenile Diabetes. He is
also a member of the Board of the Diabetes Research Institute Foundation, a not-for-profit organization affiliated with the University of Miami School of Medicine. Mr. Shewer is a founding member and a member of the Board of the Greenwich
Roundtable. He is also a Director of The Kenmar Global ECO Foundation Inc., which was formed in order to make a meaningful, positive impact on society and the environment by identifying and supporting organizations that promote environmental and
sustainability causes around the world.



22



---

##### Table of Contents

Mr. Marc S. Goodman (born 1948), a Director and Co-Chief Executive Officer of the Managing Owner, has
been a principal, associated person and NFA associate member of the Managing Owner since February 7, 1984, May 1, 1985 and August 1, 1985, respectively. He has been President and Co-Chief Executive Officer of the Managing Owner
since February 1984. Mr. Goodman joined Pasternak, Baum in September 1974 and was a Vice President and Director from July 1981 until September 1983. While at Pasternak, Baum, Mr. Goodman was largely responsible for business development
outside of the United States, for investment of its corporate retirement funds, and for selecting trading personnel in the Vegetable Oil Division. Mr. Goodman also created and developed Pasternak, Baums Lauric Oils Department.
Mr. Goodman has conducted extensive business in South America, Europe and the Far East; he has been a merchandiser of all major vegetable oils and their by-products, and of various other commodities such as sunflower seeds, frozen poultry,
pulses and potatoes.

Mr. Goodman graduated from the Bernard M. Baruch School of Business of the City University of New York with a B.B.A. in 1969 and
an M.B.A. in 1971 in Finance and Investments, where he was awarded an Economics and Finance Department Fellowship from September 1969 through June 1971. Mr. Goodman is a member of the American Arbitration Association; while at Pasternak, Baum,
he was a member of the National Institute of Oilseeds Products and the American Fats and Oils Association (including its Export Rules Committee).

Mr. Goodman is the Chairman of the Board of the Stacy Joy Goodman Memorial Foundation, a non-profit charity committed to finding a cure for Juvenile Diabetes. He is also the most recent past Chairman of the Board of the Diabetes
Research Institute Foundation, a not-for-profit organization that is the principle source of funding for the Diabetes Research Institute, a world renowned cure based research center affiliated with the University of Miami School of Medicine.
Mr. Goodman is a founding member and member of the Board of the Greenwich Roundtable. He is also a Director of The Kenmar Global ECO Foundation Inc., which was formed in order to make a meaningful, positive impact on society and the environment
by identifying and supporting organizations that promote environmental and sustainability causes around the world.

Messrs. Shewer and Goodman left
Pasternak, Baum in September 1983 to form Kenmar Advisory Corp. (now known as Preferred Investment Solutions Corp., the Managing Owner) and they have occupied their present positions with the Managing Owner since that time.

Ms. Esther Eckerling Goodman (born 1952), Senior Executive Vice President and Chief Operating Officer of the Managing Owner, has been a principal, associated
person and NFA associate member of the Managing Owner since May 12, 1988, July 17, 1986 and July 17, 1986, respectively. She joined the Managing Owner in July 1986 and is its Chief Operating Officer and Senior Executive Vice
President. Ms. Goodman has been involved in the futures industry since 1974. From 1974 through 1976, she was employed by Conti-Commodity Services, Inc. and ACLI Commodity Services, Inc., in the areas of hedging, speculative trading and tax
arbitrage. In 1976, Ms. Goodman joined Loeb Rhoades & Company, Inc. where she was responsible for developing and managing a managed futures program that, in 1979, became the trading system for Westchester Commodity Management, an
independent commodity-trading advisor of which Ms. Goodman was a founder and principal. From 1983 through mid-1986, Ms. Goodman was employed as a marketing executive at Commodities Corp. (USA) of Princeton, New Jersey. Ms. Goodman was
a Director of the Managed Futures Trade Association from 1987 to 1991 and a Director of its successor organization, the Managed Futures Association, from 1991 to 1995 (now the Managed Funds Association). Ms. Goodman graduated from Stanford
University with a B.A. degree in psychology in 1974.

Ms. Goodman is married to Mr. Marc Goodman.

Mr. Braxton Glasgow III (born 1953) has been a principal, associated person, branch manager and NFA associate member of the Managing Owner since
June 21, 2001, June 21, 2001, July 13, 2004 and June 8, 2001, respectively. Mr. Glasgow has been an Executive Vice President of the Managing Owner since joining the Managing Owner in May 2001. Mr. Glasgow is
responsible for business development. Previously, he served as Executive Vice President, Director of Client Services and a Principal at Chesapeake Capital Corp., a commodities trading firm, and as Senior Managing Director at Signet Investment
Banking Co. Mr. Glasgow began his career at PricewaterhouseCoopers, where he specialized in mergers and acquisitions and private equity, including extensive work in Europe and the Far East. Mr. Glasgow received a B.S. in Accounting from
the University of North Carolina at Chapel Hill and is a Certified Public Accountant. From 1994 to 1995, he was President of the Jay Group Ltd. Mr. Glasgow received a B.S. degree in accounting from the University of North Carolina in 1975.

Ms. Maureen D. Howley (born 1967) has been a principal of the Managing Owner since August 11, 2003. She has been a Senior Vice
President and Chief Financial Officer of the Managing Owner since joining the Managing Owner in July 2003. She is responsible for corporate finance. From July 2001 until July 2003, Ms. Howley was an Associate at Andor Capital Management, LLC,
an equity hedge fund company. At Andor, she was responsible for managing the corporate accounting functions. Previously, she was the Controller at John W. Henry & Company, Inc., a commodity-trading advisor (JWH), where she held
positions of increasing responsibility from September 1996 to July 2001. She began her career at Deloitte & Touche where she specialized in the financial services industry. She held many positions of increasing responsibility for seven
years, and left as an Audit Senior Manager in September 1996 to join JWH. Ms. Howley received a B.A. in Accounting from Muhlenberg College in 1989 and designation as a Certified Public Accountant in 1990.

Mr. Lawrence S. Block (born 1967) has been a Senior Vice President and General Counsel of the Managing Owner since joining the Managing Owner in March
2005. Prior to joining the Managing Owner, Mr. Block was a Managing Director and General Counsel of Lipper & Company, L.P., a New York-based investment management firm, from January 1998 until March



23



---

##### Table of Contents

2005. Prior to joining Lipper & Company, Mr. Block was a senior associate at the law firm Cadwalader, Wickersham & Taft in New York
from May 1996 through December 1997. Mr. Block also worked as an associate at the law firm Proskauer Rose Goetz & Mendelsohn from September 1992 through May 1996. Mr. Block received a B.S. in Business Administration with a
concentration in Accounting from the University of North Carolina at Chapel Hill in 1989 and a J.D. from the University of Pennsylvania School of Law in 1992. Mr. Blocks registration as a principal of the Managing Owner has been effective
since March 17, 2005.

Mr. David K. Spohr (born 1963), Senior Vice President and Director of Fund Administration of the Managing
Owner, joined the Managing Owner in 2005. He is responsible for the development and execution of the administration group support responsibilities and, as Director of Fund Administration, functions as the Principal Financial/Accounting Officer of
Registrant. From 2002 to 2005, Mr. Spohr was a Vice President at Safra Group, where he was responsible for the Alternative Investment operations, tax reporting and pricing valuation. From 2000 to 2002, he was a consultant to The Safra Group.
From 1994-1999, he was Manager of Investment Services for the Bank of Bermuda, supporting private client transactions. From 1993 to 1994, he was the Manager of Global Operations for Highbridge Capital Corporation during the funds infancy.
Mr. Spohr received a B.S. in Business Economics from The State University of New York College at Oneonta in 1985 and designation as a Chartered Financial Analyst in 1998.

Ms. Joanne D. Rosenthal (born 1965) has been a principal, associated person and NFA associate member of the Managing Owner since February 29, 2000, February 29, 2000 and
November 30, 1999, respectively. Ms. Rosenthal is Senior Vice President and Director of Portfolio Management and Implementation for the Managing Owner. Prior to joining the Managing Owner in October 1999, Ms. Rosenthal spent nine
years at The Chase Manhattan Bank, in various positions of increasing responsibility. From July 1991 through April 1994, she managed the Trade Execution Desk and from May 1994 through September 1999, she was a Vice President and Senior Portfolio
Manager of Chase Alternative Asset Management, Inc. Ms. Rosenthal received a Masters of Business Administration with a concentration in Finance from Cornell University and a Bachelor of Arts in Economics from Concordia University in Montreal,
Canada.

Mr. Peter J. Fell (born 1960), Senior Vice President and Director of Due Diligence since joining the Managing Owner in September
2004. He is responsible for manager selection and due diligence. Mr. Fell is a member of the Investment Committee. From 2000 through August 2004, Mr. Fell was a founding partner and Investment Director of Starview Capital Management. Prior
to co-founding Starview Capital Management, Mr. Fell was Vice President of Research and Product Development at Merrill Lynch Investment Partners Inc (MLIP). He was responsible for the investment evaluation and recommendation process pertaining
to MLIP funds and sat on MLIPs Investment Committee. Prior to joining MLIP, Mr. Fell had been with Deutsche Bank Financial Products Corporation for six years starting in 1989, where he was Vice President in the over-the-counter fixed
income derivatives area. From 1985 to 1989, he was employed by Manufacturers Hanover Trust Company, ultimately holding the position of Assistant Vice President in the Swaps and Futures Group. Mr. Fell holds an A.B. cum laude in Music Theory and
History and an M.B.A. in Finance from Columbia University.

Mr. Bala Kasturi(born 1964), Senior Vice President and Director of Risk Management
, joined the Managing Owner in March 2006. He is responsible for investment analytics and portfolio/risk management and collaborates on manager due diligence and analytics. Mr. Kasturi is a member of the Investment Committee. From January 2002
through January 2004, Mr. Kasturi served as a Managing Partner and Portfolio Manager at Vega Asset Management USA LLC and from January 2004 to July 2005, he served as Managing Partner and Portfolio Manager of the Taurus Global Macro Fund at
VegaPlus Capital Partners USA LLC. Prior to joining VegaPlus, Mr. Kasturi was a macro fund manager at Bankers Trust/Deutsch Asset Management from January 2000 through December 2001 for the DB Global Macro Fund where he developed quantitative
models for valuation and trading across all asset classes and strategies. From October 1997 through December 2000, he was Portfolio Manager at Bankers Trust for a global fixed income fund. Mr. Kasturi worked at Tiger Management from March 1993
through October 1997 as a Risk Manager, where he developed market risk systems and was a member of the Risk Management Committee. Mr. Kasturi has an undergraduate degree in Commerce from Osmania University in India, an MBA from Northeast
Louisiana University and a MS in Computer Science from Ballarat University in Australia.

Ms. Melissa Cohn (born 1960), Managing Director and
Senior Research Analyst, joined the Managing Owner in 1988. Her responsibilities include manager due diligence, manager analysis, and portfolio/risk management. Ms. Cohn has been involved in the futures industry for over 20 years. Prior to
joining the Managing Owner, she spent six years in positions of increasing responsibility in the Commodities Division at Shearson Lehman Hutton Inc. Her experience includes that of Sales Assistant, Assistant Commodity Trader and Trader executing
orders from numerous CTAs that traded through Shearson. Ms. Cohn graduated from the University of Wisconsin Madison with a B.S. in Agriculture in 1982.

Mr. Gordon Nicholson(born 1965), Vice President and Senior Research Analyst, graduated from John Abbott College in 1985 with a Diploma of Collegiate Studies - Pure and Applied Sciences; from Bishops University in 1988
with a B.A. in Political Science and Economics and from Vermont Law School in 1993 with a J.D. Mr. Nicholson is also a Certified Financial Advisor and Chartered Alternative Investment Analyst. Mr. Nicholson joined the Kenmar Group in June
2005 and currently serves as Vice President, Director and Senior Research Analyst for the Managing Owner. Mr. Nicholson is a Member of Registrants Investment Committee. Previously, he was the Manager  Credit and Pricing, at
Bombardier, Inc., a manufacturer of planes and trains, where he held positions of increasing responsibility from April 2003 to June 2005. Prior to that, from July 2002 to April 2003, he was a Senior Credit Analyst at Bombardier Capital, Inc., an
asset management firm.



24



---

##### Table of Contents

Ms. Jennifer S. Moros (born 1970) has been a Senior Vice President, Marketing and Investor Relations of
the Managing Owner since joining the Managing Owner in January 2007. From October 2006 until December 2006, she worked at The Bank of New York. Previously, she was the Chief Operating Officer and Director of Marketing of Coronat Capital Management,
LLC, a small start-up hedge fund, from November 2004 until September 2005. Previously, she was Vice President and Product Manager at Credit Suisse in their Alternative Capital Division from February 2000 until November 2004, responsible for
marketing, new product development and reporting for their fund of hedge funds business. From June 1998 to January 2000, she was a Senior Associate in the Marketing and Business Development areas at Zweig-DiMenna, a large long/short equity hedge
fund. Prior to this, she was employed at Symphony Alternative Investments, an alternatives pension consulting firm, from July 1997 to June 1998, where she was responsible for quantitative and qualitative assessments and recommendations of
alternative investments including hedge funds, private equity and venture capital for large institutional clients. From November 1993 until July 1995, Ms. Moros was a Financial Analyst at Bankers Trust and a Business Applications Analyst at
National Westminster Bancorp from August 1992 until November 1993. Ms. Moros received an M.B.A in Finance from The Sloan School at the Massachusetts Institute of Technology in 1997 and a B.S. in Economics from The Wharton School of the
University of Pennsylvania in 1992.

Mr. Frank Coloccia (born 1965), Senior Vice President and Chief Technology Officer, graduated from
Manhattan College in 1987 and 1993 with a BS in Computer Information Systems and MBA in Management Information Systems, respectively. Since December 2007, Mr. Coloccia has been Senior Vice President and Chief Technology Officer for all of the
Kenmar Group of companies, including Preferred. Prior to joining Kenmar, Mr. Coloccia was a Managing Partner of JFA Group LLC, a consulting firm owned by Mr. Coloccia, from September 2007 until December 2007, as well as from September 2006
until January 2007. From January 2007 until September 2007, Mr. Coloccia was the Chief Research Officer at The Info Pro, an independent market research company for the Information Technology industry. Prior to that time, he was Senior Vice
President of Xandros Inc., a provider of Linux-based server, desktop and Windows-Linux cross-platform systems management tools, from April 2006 until September 2006. From November 1999 through February 2006, Mr. Coloccia was the President and
Chief Technology Officer of Creative Technologies Group Inc., a consulting company that specialized in networking and application support for the small-medium enterprises market.

Section 16(a) Beneficial Ownership Reporting Compliance

Certain of the Managing Owners directors
and officers and any persons holding more than ten percent of Registrants Limited Interests (Ten Percent Owners) are required to report their initial ownership of Interests and any subsequent changes in that ownership to the
Securities and Exchange Commission (the SEC) on Forms 3, 4 or 5. Such directors and officers and Ten Percent Owners are required by SEC regulations to furnish Registrant with copies of all Forms 3, 4 and 5 they file. There are no
Ten Percent Owners of Registrants Limited Interests. All filing requirements of Section 16(a) of the Exchange Act were timely complied with during the fiscal year. In making these disclosures, Registrant has relied solely on written
representations of the Managing Owners directors and officers and Registrants Ten Percent Owners or copies of the reports that they have filed with the SEC during and with respect to its most recent fiscal year.

Code of Ethics

Preferred has adopted a Code of Ethics for its
Co-Chief Executive Officers and Director of Fund Administration (who, in these capacities, function as the Co-Chief Executive Officers and Principal Financial/Accounting Officer, respectively, of Registrant), accounting managers and persons
performing similar functions. A copy of the Code of Ethics is attached as an exhibit hereto.

Audit Committee Financial Expert

Registrant itself does not have any employees. Preferred serves as Managing Owner of Registrant. The Board of Directors of Preferred has delegated audit committee
responsibilities to the Internal Controls and Disclosure Committee. David K. Spohr is Preferreds Director of Fund Administration (and, in that capacity, functions as Registrants Principal Financial/Accounting Officer), is a member of the
Internal Controls and Disclosure Committee, and serves as the audit committee financial expert for Registrant. Mr. Spohr is not a member of Preferreds Board of Directors and he is not independent of management.



|Item 11. | Executive Compensation
|-------- | ----------------------

Registrant does
not pay or accrue any fees, salaries or any other form of compensation for officers of the Managing Owner for their services. (See also Item 13, Certain Relationships and Related Transactions, for information regarding compensation to the
Managing Owner).



|Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|-------- | ----------------------------------------------------------------------------------------------

As of January 31, 2009, Preferred owns 451 General Units in Registrant. As of January 31, 2009, all of Preferreds stock is owned indirectly and equally by
Messrs. Goodman and Shewer, Preferreds sole directors.



25



---

##### Table of Contents

As of January 31, 2009, the following officers of the Managing Owner are deemed to own beneficially the following
number of Interests issued by Registrant:



|                  |  |                                                                        |  |                                           |  |                 |  
|----------------- |  | ---------------------------------------------------------------------- |  | ----------------------------------------- |  | --------------- | -
|Title of Class    |  | Name and Addresses of Beneficial Owner                                 |  | Amount and Nature of Beneficial Ownership |  | Percent ofClass |  
|General Interests |  | Marc S. Goodman 900 King Street, Suite 100
Rye Brook, New York 10573   |  | 451 General Interests (*)                 |  | 100             | %
|General Interests |  | Kenneth A. Shewer 900 King Street, Suite
100 Rye Brook, New York 10573 |  | 451 General Interests (*)                 |  | 100             | %
|General Interests |  | Esther E. Goodman 900 King Street, Suite
100 Rye Brook, New York 10573 |  | 451 General Interests (**)                |  | 100             | %



|(*) | These Interests are held indirectly through Preferred. The Beneficial Owner disclaims beneficial ownership over such securities for purposes of Section 16 of the Securities
Exchange Act of 1934, except to the extent of his pecuniary interest therein.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(**) | These Interests are held by the Beneficial Owners spouse indirectly through Preferred. The Beneficial Owner disclaims beneficial ownership over such securities for purposes of
Section 16 of the Securities Exchange Act of 1934, except to the extent of her pecuniary interest therein.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As of January 31, 2009,
no Interestholder beneficially owned more than five percent (5%) of the outstanding Limited Interests issued by Registrant.



|Item 13. | Certain Relationships and Related Transactions, and Director Independence
|-------- | -------------------------------------------------------------------------

Registrant has and will continue to have certain relationships with the Managing Owner and its affiliates. However, there have been no direct financial transactions between Registrant and the directors or officer of
the Managing Owner.

Reference is made to Notes 1, 3 and 4 to the financial statements in Registrants 2008 Annual Report which is filed as an exhibit
hereto, which identifies the related parties and discusses the services provided by these parties and the amounts paid or payable for their services.

Director Independence

David K. Spohr is Preferreds Director of Fund Administration (and, in that capacity, functions as
Registrants Principal Financial/Accounting Officer), is a member of the Internal Controls and Disclosure Committee, and serves as the audit committee financial expert for Registrant. Mr. Spohr is not a member of
Preferreds Board of Directors and he is not independent of management.



|Item 14. | Principal Accounting Fees and Services
|-------- | --------------------------------------

Audit Fees and All Other Fees

Registrants principal accountant since October 15, 2007 has been Eisner LLP
(Eisner). Registrants principal accountant for the year ended December 31, 2006 and for the period January 1, 2007 through September 14, 2007 was Deloitte & Touche LLP (D&T). We
have been advised by Eisner that neither the firm, nor any member of the firm, has any financial interest, direct or indirect, in any capacity in Registrant or its affiliates.

(a) Audit Fees

Fees for audit services performed by Eisner totaled approximately $41,000 and $28,000 for 2008 and
2007, respectively, including fees associated with the review of Registrants quarterly reports on Form 10-Q. Fees for audit services performed by D&T totaled approximately $22,000 and $58,000 for 2007 and 2006, respectively, including fees
associated with the annual audit and the reviews of Registrants quarterly reports on Form 10-Q.

(b) Audit-Related Fees

The audit-related fees billed to Registrant by Eisner for 2008 totaled $0. The audit-related fees billed to Registrant by Eisner for the period of October 15, 2007
through December 31, 2007 totaled $0. The audit-related fees billed to Registrant by D&T for the year ended December 31, 2006 and for the period January 1, 2007 through September 14, 2007 for products and services other than
the services reported above totaled $0.



26



---

##### Table of Contents

(c) Tax Fees

There
were no fees for tax services performed by, or billed to the Registrant by Eisner for 2008 and 2007.

(d) All Other Fees.

The other fees billed to Registrant by D&T for the year ended December 31, 2006 and for the period January 1, 2007 through September 14, 2007 for
products and services other than the services reported above totaled $0. The other fees billed to Registrant by Eisner for the period of October 15, 2007 through December 31, 2007 totaled $0. The other fees billed to Registrant by Eisner
for December 31, 2008 totaled $0.

PART IV



|          |  |                                                                                                                                                                                                                                                                                                            |  |                         
|--------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------
|          |  |                                                                                                                                                                                                                                                                                                            |  | Annual ReportPage Number
|Item 15.  |  | Exhibits, Financial Statement Schedules                                                                                                                                                                                                                                                                    |  |                         
|          |  |                                                                                                                                                                                                                                                                                                           
|(a)    1. |  | Financial Statements and Report of Independent Registered Public Accounting Firm incorporated by reference to Registrants 2008 Annual Report which is filed as
an exhibit hereto                                                                                                                          |  |                         
|          |  |                                                                                                                                                                                                                                                                                                           
|          |  | Report of Independent Registered Public Accounting Firm  Eisner LLP                                                                                                                                                                                                                                       |  | 1                       
|          |  |                                                                                                                                                                                                                                                                                                           
|          |  | Report of Independent Registered Public Accounting Firm  Deloitte and Touche L.L.P.                                                                                                                                                                                                                       |  | 2                       
|          |  |                                                                                                                                                                                                                                                                                                           
|          |  | Financial Statements:                                                                                                                                                                                                                                                                                      |  |                         
|          |  |                                                                                                                                                                                                                                                                                                           
|          |  | Statements of Financial Condition  December 31, 2008 and 2007                                                                                                                                                                                                                                             |  | 3                       
|          |  |                                                                                                                                                                                                                                                                                                           
|          |  | Statements of Operations  Years ended December 31, 2008, 2007 and 2006                                                                                                                                                                                                                                    |  | 4                       
|          |  |                                                                                                                                                                                                                                                                                                           
|          |  | Statements of Changes in Trust Capital  Years ended December 31, 2008, 2007 and 2006                                                                                                                                                                                                                      |  | 5                       
|          |  |                                                                                                                                                                                                                                                                                                           
|          |  | Notes to Financial Statements                                                                                                                                                                                                                                                                              |  | 6 16                   
|          |  |                                                                                                                                                                                                                                                                                                           
|2.        |  | Financial Statement Schedules                                                                                                                                                                                                                                                                              |  |                         
|          | 
|          |  | All schedules have been omitted because they are not applicable or the required information is included in the financial statements or the notes thereto                                                                                                                                                  
|          |  |                                                                                                                                                                                                                                                                                                           
|3.        |  | Exhibits                                                                                                                                                                                                                                                                                                   |  |                         
|          |  |                                                                                                                                                                                                                                                                                                           
|          |  | Description:                                                                                                                                                                                                                                                                                               |  |                         
|          | 
|4.1       |  | Third Amended and Restated Declaration of Trust Agreement of Diversified Futures Trust I dated as of December 1, 2008 (filed herewith)                                                                                                                                                                    
|          | 
|4.2       |  | Subscription Agreement (incorporated by reference to Exhibit C to Registrants Registration Statement on Form S-1, File No. 33-81534, dated as of September 13,
1994)                                                                                                                                     
|          | 
|4.3       |  | Request for Redemption (incorporated by reference to Exhibit D to Registrants Registration Statement on Form S-1, File No. 33-81534, dated as of September 13,
1994)                                                                                                                                     
|          |  |                                                                                                                                                                                                                                                                                                           
|4.4       |  | The Privacy Notices of the Managing Owner dated January 2009 (filed herewith)                                                                                                                                                                                                                              |  |                         
|          | 
|10.1      |  | Escrow Agreement, dated September 14, 1994, among Registrant, Prudential Securities Futures Management Inc., Prudential Securities Incorporated and The Bank of New York
(incorporated by reference to Exhibit 10.1 of Registrants Quarterly Report on Form 10-Q for the period ended September 30, 1994)
|          | 
|10.2      |  | Brokerage Agreement, dated as of January 4, 1995, between Registrant and Prudential Securities Incorporated (incorporated by reference to Exhibit 10.2 of Registrants Annual
Report on Form 10-K for the period ended December 31, 1994)                                                                 



27



---

##### Table of Contents

|      |  |                                                                                                                                                                                                                                                                                                                                                                                                            
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|10.3  |  | Advisory Agreement dated as of September 13, 1994 among Registrant, Prudential Securities Future Management, Inc., and John W. Henry & Co., Inc. (incorporated by reference to Exhibit
10.3 of Registrants Quarterly Report on Form 10-Q for the period ended period ended September 30, 1994)                                                                                                            
|      | 
|10.4  |  | Representation Agreement Concerning the Registration Statement and the Prospectus, dated as of September 13, 1994 among Registrant, Prudential Securities Futures Management, Inc., Prudential
Securities Inc., Wilmington Trust Company and John W. Henry & Company, Inc. (incorporated by reference to Exhibit10.4 of Registrants Quarterly Report on Form 10-Q for the period ended September 30, 1994)
|      | 
|10.5  |  | Net Worth Agreement, dated as of September 13, 1994 between Prudential Securities Futures Management, Inc. and Prudential Securities (incorporated by reference to Exhibit 10.5 of
Registrants Quarterly Report on Form 10-Q for the period ended September 30, 1994)                                                                                                                                     
|      | 
|10.6  |  | Secured Demand Note, dated as of January 4, 1995 between Prudential Securities Group, Inc. and Prudential Securities Futures Management Inc. (incorporated by reference to Exhibit 10.6 of
Registrants Annual Report on Form 10-K for the year ended December 31, 1994)                                                                                                                                   
|      | 
|10.7  |  | Secured Demand Note Collateral Agreement, dated as of January 4, 1995, between Prudential Securities Futures Management Inc. and Prudential Securities Group Inc.(incorporated by reference to
Exhibit 10.7 of Registrants Annual Report on Form 10-K for the year ended December 31, 1994)                                                                                                               
|      | 
|10.8  |  | Form of Foreign Currency Addendum to Brokerage Agreement between Registrant and Prudential Securities Incorporated (incorporated by reference to Exhibit 10.8 of Registrants Quarterly
Report on Form 10-Q for the period ended March 31, 1996)                                                                                                                                                           
|      | 
|10.9  |  | Amendment to Advisory Agreement, dated October 1, 2000, among Registrant, Prudential Securities Futures Management, Inc. and John W. Henry & Company, Inc. (incorporated by reference to
Exhibit 10.9 of Registrants Quarterly Report on Form 10-Q for the period ended September 30, 2000                                                                                                                
|      | 
|10.10 |  | Advisory Agreement, dated as of February 14, 2003, among Registrant, Prudential Securities Futures Management Inc., and Aspect Capital Limited (incorporated by reference to Exhibit 10.10 of
Registrants Annual Report on 10-K for the year ended December 31, 2002)                                                                                                                                     
|      | 
|10.11 |  | Advisory Agreement, dated as of February 7, 2003, among Registrant, Prudential Securities Futures Management, Inc., and Graham Capital Management, L.P. (incorporated by reference to Exhibit
10.11 of Registrants Annual Report on Form 10-K for the year ended December 31, 2002)                                                                                                                       
|      | 
|10.12 |  | Advisory Agreement, dated as of February 3, 2003, among Registrant, Prudential Securities Futures Management Inc., and Appleton Capital Management Limited (incorporated by reference to Exhibit
10.12 of Registrants Annual Report on Form 10-K for the year ended December 31, 2003)                                                                                                                    
|      | 
|10.13 |  | Service Agreement among Registrant, Prudential Securities Futures Management Inc. and Wachovia Securities, LLC dated as of July 1, 2003 (incorporated by reference to Exhibit 10.13 of
Registrants Annual Report on Form 10-K for the year ended December 31, 2003)                                                                                                                                       
|      | 
|10.14 |  | Novation letter among Registrant, Trading Advisor and Managing Owner dated September 14, 2004 (incorporated by reference to Exhibit 10.14 of Registrants Annual Report on Form 10-K for the
year ended December 31, 2005)                                                                                                                                                                                 
|      | 
|10.15 |  | Letter Agreement Amending and Restating Brokerage Agreements between the Managing Owner and Prudential Financial Derivatives, LLC dated October 1, 2004 (incorporated by reference to Exhibit
10.15 of Registrants Annual Report on Form 10-K for the year ended December 31, 2005)                                                                                                                       
|      | 
|10.16 |  | Advisory Agreement among the Managing Owner, WCM Pool LLC and Winton Capital Management Limited dated November 20, 2006 (incorporated by reference to Exhibit 10.16 to Registrants Annual
Report on Form 10-K for the year ended December 31, 2007)                                                                                                                                                       
|      | 
|10.17 |  | WCM Pool LLC Organization Agreement dated November 20, 2006 (incorporated by reference to Exhibit 10.17 to Registrants Annual Report on Form 10-K for the year ended December 31,
2007)                                                                                                                                                                                                                   
|      | 
|10.18 |  | Administrative Service Agreement between WCM Pool LLC and Preferred Investment Solutions Corp. dated November 20, 2006 (incorporated by reference to Exhibit 10.18 to Registrants Annual
Report on Form 10-K for the year ended December 31, 2007)                                                                                                                                                        
|      | 
|10.19 |  | Amendment No. 1 to WCM Pool LLC Organization Agreement dated March 30, 2007 (incorporated by reference to Exhibit 10.19 to Registrants Annual Report on Form 10-K for the year ended
December 31, 2007)                                                                                                                                                                                                   



28



---

##### Table of Contents

|      |  |                                                                                                                                                                                                                                                                                                        
|----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      | 
|10.20 |  | Services Agreement between Spectrum Global Fund Administration, L.L.C. and Registrant dated May 23, 2007 (incorporated by reference to Exhibit 10.20 to Registrants Annual Report on
Form 10-K for the year ended December 31, 2007)                                                                  
|      | 
|10.21 |  | Amendment No. 1 to Services Agreement between Spectrum Global Fund Administration, L.L.C. and Registrant dated January 1, 2009 (filed herewith)                                                                                                                                                        
|      | 
|13.1  |  | Registrants 2008 Annual Report (with the exception of the information and data incorporated by reference in Items 7 and 8 of this Annual Report on Form 10-K, no other information or data
appearing in Registrants 2008 Annual Report is to be deemed filed as part of this report) (filed herewith)
|      | 
|14.1  |  | Preferred Investment Solutions Corp. Code of Ethics (adopted pursuant to Section 406 of Sarbanes Oxley Act of 2002) as of October 13, 2008                                                                                                                                                             
|      | 
|31.1  |  | Certification pursuant to Exchange Act Rules 13a-14 and 15d-14 (filed herewith)                                                                                                                                                                                                                        
|      | 
|31.2  |  | Certification pursuant to Exchange Act Rules 13a-14 and 15d-14 (filed herewith)                                                                                                                                                                                                                        
|      | 
|32.1  |  | Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)                                                                                                                                                             
|      | 
|32.2  |  | Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith)                                                                                                                                                             
|      | 
|(b)   |  | Report on Form 8-K  Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year; Financial Statements and Exhibits, dated December 1, 2008
(incorporated by reference)                                                                                                                   

[Remainder of page intentionally left blank]



29



---

##### Table of Contents

DIVERSIFIED FUTURES TRUST I

ANNUAL REPORT

December 31, 2008



30



---

##### Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Managing Owner and Limited Owners of

Diversified Futures Trust I

We have audited the accompanying statements of financial condition of Diversified Futures Trust I (the Trust) as of December 31,
2008 and 2007, and the related statements of operations and changes in trust capital and the financial highlights for the years ended December 31, 2008 and 2007. These financial statements and the financial highlights are the responsibility of
the Trusts management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in
accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights
are free of material misstatement. The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trusts internal control over financial reporting. Accordingly, we express no such
opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the
financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Diversified Futures Trust I at December 31, 2008 and 2007, and the results of its operations and changes in its
trust capital and financial highlights for the years ended December 31, 2008 and 2007, in conformity with accounting principles generally accepted in the United States of America.

EISNER LLP

New York, New York

March 25, 2009



31



---

##### Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Managing Owner and Limited Owners of

Diversified Futures Trust I

We have audited the statements of operations and changes in trust capital for the year ended December 31, 2006 of Diversified Futures Trust I (the
Trust). These financial statements are the responsibility of the Trusts management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
Trusts internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the results of operations and changes in trust capital of
Diversified Futures Trust I for the year ended December 31, 2006 in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP

New York, New York

March 28, 2007



32



---

##### Table of Contents

DIVERSIFIED FUTURES TRUST I

STATEMENTS OF FINANCIAL CONDITION

December 31,
2008 and 2007







|                                                                                                                |  |      |            |      |   |           
|--------------------------------------------------------------------------------------------------------------- |  | ---- | ---------- | ---- | - | ----------
|                                                                                                                |  | 2008 |            | 2007
|ASSETS                                                                                                          |  |      |            |      |   |           
|Cash                                                                                                            |  | $    | 29,574     |      | $ | 5,805     
|Redemptions receivable from WCM Pool LLC                                                                        |  |      | 139,679    |      |   | 304,479   
|Investment in WCM Pool LLC, at fair value(100.05% and 100.53% of net asset value, respectively)                 |  |      | 11,561,900 |      |   | 11,055,308
|Receivable from Managing Owner                                                                                  |  |      | 1,644      |      |   | 0         
|                                                                                                                |  |      |            |      |   |           
|Total assets                                                                                                    |  | $    | 11,732,797 |      | $ | 11,365,592
|                                                                                                                |  |      |            |      |   |           
|LIABILITIES                                                                                                     |  |      |            |      |   |           
|Redemptions payable                                                                                             |  | $    | 139,702    |      | $ | 302,152   
|Administrative services                                                                                         |  |      | 36,869     |      |   | 66,250    
|                                                                                                                |  |      |            |      |   |           
|Total liabilities                                                                                               |  |      | 176,571    |      |   | 368,402   
|                                                                                                                |  |      |            |      |   |           
|TRUST CAPITAL (Net Asset Value)                                                                                 |  |      |            |      |   |           
|Limited Interests (43,969.385 and 46,189.067 interestsoutstanding) at December 31, 2008 and 2007, respectively. |  |      | 11,438,896 |      |   | 10,883,382
|General Interests (451 and 483 interests outstanding)at December 31, 2008 and 2007, respectively.               |  |      | 117,330    |      |   | 113,808   
|                                                                                                                |  |      |            |      |   |           
|Total trust capital (Net Asset Value)                                                                           |  |      | 11,556,226 |      |   | 10,997,190
|                                                                                                                |  |      |            |      |   |           
|Total liabilities and trust capital                                                                             |  | $    | 11,732,797 |      | $ | 11,365,592
|                                                                                                                |  |      |            |      |   |           

Net Asset Value per Limited and General Interest



|        |  |                  |        |      |   |       
|------- |  | ---------------- | ------ | ---- | - | ------
|2008    |  | December 31,2007 |        | 2006
|$260.16 |  | $                | 235.63 |      | $ | 222.71
|        |  |                  |        |      |   |       

See accompanying notes.



-3-

33



---

##### Table of Contents

DIVERSIFIED FUTURES TRUST I

STATEMENTS OF OPERATIONS

For the Years Ended
December 31, 2008, 2007 and 2006







|                                                                                   |  |      |           |   |      |   |           |      |  |   |           |  
|---------------------------------------------------------------------------------- |  | ---- | --------- | - | ---- | - | --------- | ---- |  | - | --------- | -
|                                                                                   |  | 2008 |           |   | 2007 |   |           | 2006 | 
|NET LOSS FROM TRUST OPERATIONS                                                     |  |      |           |   |      |   |           |      |  |   |           |  
|REVENUES                                                                           |  |      |           |   |      |   |           |      |  |   |           |  
|Realized                                                                           |  | $    | 0         |   |      | $ | 52,467    |      |  | $ | 150,177   |  
|Change in unrealized                                                               |  |      | 0         |   |      |   | (71,943   | )    |  |   | (83,560   | )
|Interest income                                                                    |  |      | 88        |   |      |   | 23,389    |      |  |   | 750,618   |  
|                                                                                   |  |      |           |   |      |   |           |      |  |   |           |  
|Total revenues                                                                     |  |      | 88        |   |      |   | 3,913     |      |  |   | 817,235   |  
|                                                                                   |  |      |           |   |      |   |           |      |  |   |           |  
|EXPENSES                                                                           |  |      |           |   |      |   |           |      |  |   |           |  
|Administrative services                                                            |  |      | 868,180   |   |      |   | 860,445   |      |  |   | 1,190,211 |  
|General and administrative                                                         |  |      | 1,900     |   |      |   | 303       |      |  |   | 0         |  
|Management fees                                                                    |  |      | 0         |   |      |   | 0         |      |  |   | 306,529   |  
|                                                                                   |  |      |           |   |      |   |           |      |  |   |           |  
|Total expenses                                                                     |  |      | 870,080   |   |      |   | 860,748   |      |  |   | 1,496,740 |  
|                                                                                   |  |      |           |   |      |   |           |      |  |   |           |  
|WCM Pool LLC administrative expenses borne by theManaging Owner and its affiliates |  |      | (22,788   | ) |      |   | 0         |      |  |   | 0         |  
|                                                                                   |  |      |           |   |      |   |           |      |  |   |           |  
|Net expenses                                                                       |  |      | 847,292   |   |      |   | 860,748   |      |  |   | 1,496,740 |  
|                                                                                   |  |      |           |   |      |   |           |      |  |   |           |  
|NET LOSS FROM TRUST OPERATIONS                                                     |  |      | (847,204  | ) |      |   | (856,835  | )    |  |   | (679,505  | )
|                                                                                   |  |      |           |   |      |   |           |      |  |   |           |  
|NET INCOME ALLOCATED FROM WCM POOL LLC:                                            |  |      |           |   |      |   |           |      |  |   |           |  
|REVENUES                                                                           |  |      |           |   |      |   |           |      |  |   |           |  
|Realized                                                                           |  |      | 2,745,933 |   |      |   | 1,295,747 |      |  |   | 0         |  
|Change in unrealized                                                               |  |      | (94,690   | ) |      |   | 283,249   |      |  |   | 0         |  
|Interest income                                                                    |  |      | 136,599   |   |      |   | 462,339   |      |  |   | 0         |  
|                                                                                   |  |      |           |   |      |   |           |      |  |   |           |  
|Total revenues                                                                     |  |      | 2,787,842 |   |      |   | 2,041,335 |      |  |   | 0         |  
|                                                                                   |  |      |           |   |      |   |           |      |  |   |           |  
|EXPENSES                                                                           |  |      |           |   |      |   |           |      |  |   |           |  
|Brokerage commissions and other transaction fees                                   |  |      | 17,771    |   |      |   | 48,221    |      |  |   | 0         |  
|Management fees                                                                    |  |      | 234,851   |   |      |   | 238,246   |      |  |   | 0         |  
|Incentive fees                                                                     |  |      | 468,887   |   |      |   | 255,978   |      |  |   | 0         |  
|General and administrative                                                         |  |      | 80,628    |   |      |   | 56,665    |      |  |   | 0         |  
|                                                                                   |  |      |           |   |      |   |           |      |  |   |           |  
|Total expenses                                                                     |  |      | 802,137   |   |      |   | 599,110   |      |  |   | 0         |  
|                                                                                   |  |      |           |   |      |   |           |      |  |   |           |  
|NET INCOME ALLOCATED FROMWCM POOL LLC                                              |  |      | 1,985,705 |   |      |   | 1,442,225 |      |  |   | 0         |  
|                                                                                   |  |      |           |   |      |   |           |      |  |   |           |  
|NET INCOME (LOSS)                                                                  |  | $    | 1,138,501 |   |      | $ | 585,390   |      |  | $ | (679,505  | )
|                                                                                   |  |      |           |   |      |   |           |      |  |   |           |  
|NET INCOME (LOSS) PER WEIGHTED AVERAGE LIMITED AND GENERAL INTEREST                |  |      |           |   |      |   |           |      |  |   |           |  
|Net income (loss) per weighted averageLimited and General Interest                 |  | $    | 25.03     |   |      | $ | 11.17     |      |  | $ | (10.10    | )
|                                                                                   |  |      |           |   |      |   |           |      |  |   |           |  
|Weighted average number of Limitedand General Interests outstanding                |  |      | 45,492    |   |      |   | 52,426    |      |  |   | 67,293    |  
|                                                                                   |  |      |           |   |      |   |           |      |  |   |           |  

See accompanying notes.



-4-

34



---

##### Table of Contents

DIVERSIFIED FUTURES TRUST I

STATEMENTS OF CHANGES IN TRUST CAPITAL

For the Years
Ended December 31, 2008, 2007 and 2006







|                                               |  |             |   |  |                  |            |   |                  |   |         |       |  |   |            |  
|---------------------------------------------- |  | ----------- | - |  | ---------------- | ---------- | - | ---------------- | - | ------- | ----- |  | - | ---------- | -
|                                               |  | Interests   |   |  | LimitedInterests |            |   | GeneralInterests |   |         | Total | 
|Trust capital atDecember 31, 2005              |  | 72,350.736  |   |  | $                | 16,635,191 |   |                  | $ | 177,537 |       |  | $ | 16,812,728 |  
|Redemptions                                    |  | (14,072.176 | ) |  |                  | (3,127,780 | ) |                  |   | (26,319 | )     |  |   | (3,154,099 | )
|Net loss for the yearended December 31, 2006   |  |             |   |  |                  | (672,157   | ) |                  |   | (7,348  | )     |  |   | (679,505   | )
|                                               |  |             |   |  |                  |            |   |                  |   |         |       |  |   |            |  
|Trust capital atDecember 31, 2006              |  | 58,278.560  |   |  |                  | 12,835,254 |   |                  |   | 143,870 |       |  |   | 12,979,124 |  
|Redemptions                                    |  | (11,606.493 | ) |  |                  | (2,531,444 | ) |                  |   | (35,880 | )     |  |   | (2,567,324 | )
|Net income for the yearended December 31, 2007 |  |             |   |  |                  | 579,572    |   |                  |   | 5,818   |       |  |   | 585,390    |  
|                                               |  |             |   |  |                  |            |   |                  |   |         |       |  |   |            |  
|Trust capital atDecember 31, 2007              |  | 46,672.067  |   |  |                  | 10,883,382 |   |                  |   | 113,808 |       |  |   | 10,997,190 |  
|Redemptions                                    |  | (2,251.682  | ) |  |                  | (571,494   | ) |                  |   | (7,971  | )     |  |   | (579,465   | )
|Net income for the yearended December 31, 2008 |  |             |   |  |                  | 1,127,008  |   |                  |   | 11,493  |       |  |   | 1,138,501  |  
|                                               |  |             |   |  |                  |            |   |                  |   |         |       |  |   |            |  
|Trust capital atDecember 31, 2008              |  | 44,420.385  |   |  | $                | 11,438,896 |   |                  | $ | 117,330 |       |  | $ | 11,556,226 |  
|                                               |  |             |   |  |                  |            |   |                  |   |         |       |  |   |            |  

See accompanying notes.



-5-

35



---

##### Table of Contents

DIVERSIFIED FUTURES TRUST I

NOTES TO FINANCIAL STATEMENTS

December 31, 2008

Note 1.       ORGANIZATION



|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | 
|A. |  | General Description of the Trust                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | 
|   |  | Diversified Futures Trust I (the Trust) was organized under the Delaware Statutory Trust Act on May 18, 1994 and will continue until December 31, 2020 unless terminated
sooner under the provisions of the Third Amended and Restated Declaration of Trust and Trust Agreement (the Trust Agreement). The Trust was formed to engage in the speculative trading of commodity futures and forward contracts.
The Trusts trustee is Wilmington Trust Company. Preferred Investment Solutions Corp. (Preferred or Managing Owner), is the managing owner of the Trust.                                                                                                                                                                                                                                                                                                                                                                 
|   | 
|   |  | Effective January 1, 2007, Preferred terminated the Trading Advisor Agreements with Aspect Capital Limited and Graham Capital Management, L.P., and the Trust contributed its net assets
to WCM Pool LLC (the Company) and received a Voting Membership Interest in the Company. The Company was formed to function as an aggregate trading vehicle. The sole members of the Company are the Trust, Futures Strategic Trust
(FST) and Kenmar Global Trust (KGT) as of December 31, 2008. Preferred is the Managing Owner of FST and KGT and has been delegated administrative authority over the operations of the Company. The Company engages
in the speculative trading of futures and forward contracts. The financial statements of the Company, including the condensed schedule of investments, are included in Section II of these financial statements and should be read in conjunction with
the Trusts financial statements.
|   | 
|B. |  | Regulation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | 
|   |  | As a registrant with the Securities and Exchange Commission, the Trust is subject to the regulatory requirements under the Securities Act of 1933 and the Securities Exchange Act of 1934. As a
commodity pool, the Trust is subject to the regulations of the Commodity Futures Trading Commission (CFTC), an agency of the United States (U.S.) government which regulates most aspects of the commodity futures industry; rules of
the National Futures Association, an industry self-regulatory organization; and the requirements of the various commodity exchanges where the Trust executes transactions. Additionally, the Trust is subject to the requirements of the futures
commission merchants (brokers) and interbank market makers through which the Company trades.                                                                                                                                                         
|   | 
|C. |  | The Offering                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | 
|   |  | On January 5, 1995, the Trust completed its initial offering having raised $25,262,800 from the sale of 249,628 limited interests (Limited Interests) and 3,000 general
interests (General Interests) (collectively, the Interests). Additional interests were offered and sold monthly at the then current net asset value (NAV) per Interest until the continuous
offering period expired on August 31, 1996. Additional contributions raised during the continuous offering period resulted in additional proceeds to the Trust of $41,129,100 from the sale of 299,640 Limited Interests and 1,628 General Interests.
General Interests were sold exclusively to the Managing Owner.                                                                                                                                                                                                                                              



-6-

36



---

##### Table of Contents

DIVERSIFIED FUTURES TRUST I

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008

Note 1.       ORGANIZATION (CONTINUED)



|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | 
|C. |  | The Offering (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | 
|   |  | Effective December 1, 2008, in accordance with the Third Amended and Restated Declaration of Trust and Trust Agreement, the Managing Owner is no longer required to maintain at least a 1%
interest in the Trust so long as it is acting as the Managing Owner.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | 
|D. |  | The Trading Managers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | 
|   |  | Until their terminations in 2006, each of the trading managers (Appleton Capital Management Ltd. (Appleton), Aspect Capital Limited (Aspect) and Graham
Capital Management, L.P. (Graham)) were paid a monthly management fee, pursuant to their advisory agreements, equal to 1/12 of 2% annually and an incentive fee of 20% of the New High Net Trading Profits on the portion
of Trust assets allocated to each. The advisory agreements may be terminated for a variety of reasons, including at the discretion of the Managing Owner. Effective September 29, 2006, Preferred terminated the trading advisor agreement of Appleton,
with the assets being reallocated to Graham and Aspect. After the termination of Appleton, Graham and Aspect each managed approximately 50% of the portfolio.
|   | 
|   |  | On December 31, 2006, the Managing Owner terminated the trading advisor agreements with Aspect and Graham and allocated those assets of the Trust to the Company, effective January 1, 2007.
The trading advisor of the Company is Winton Capital Management (Winton). The members of the Company, through their investment in the Company, pay Winton a 2% per annum management fee that is accrued and paid monthly. In addition,
the members of the Company, through their investment in the Company, pay Winton a 20% incentive fee, accrued monthly and paid quarterly, based on New High Net Trading Profits.                                                                                                                                                                                        

Note 2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | 
|A. |  | Basis of Accounting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | 
|   |  | The financial statements of the Trust are prepared in accordance with accounting principles generally accepted in the United States of America. Such principles require the Managing Owner to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | 
|   |  | Commodity futures and forward transactions are reflected on the trade date. Net unrealized gain or loss on open contracts (the difference between contract trade price and market price) is
reflected in the statement of financial condition in accordance with Financial Accounting Standards Board (FASB) Interpretation FIN No. 39  Offsetting of Amounts Related to Certain Contracts. The market value of
futures (exchange-traded) contracts is based upon the closing quotation on the various futures exchanges on which the contract is traded. The values which will be used by the Trust for open forward and option positions will be provided by its
administrator, who obtains market quotes from data vendors and third parties. Any change in net unrealized gain or loss during the current period is reported in the statement of operations. Realized gains and losses on commodity transactions are
recognized in the period in which the contracts are closed. Brokerage commissions include other trading fees and are charged to expense when incurred. Additionally, the Trust indirectly earned income or loss through investments in the Company (see
Note 5).



-7-

37



---

##### Table of Contents

DIVERSIFIED FUTURES TRUST I

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008

Note 2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A. |  | Basis of Accounting (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | 
|   |  | The weighted average number of Limited and General Interests outstanding was computed for purposes of disclosing net income (loss) per weighted average Limited and General Interest. The
weighted average Limited and General Interests are equal to the number of Interests outstanding at year end, adjusted proportionately for Interests redeemed based on their respective time outstanding during such year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   | 
|   |  | The Trust has elected not to provide a Statement of Cash Flows as permitted by Statement of Financial Account Standards (SFAS) No. 102, Statement of Cash Flows 
Exemption of Certain Enterprises and Classification of Cash Flows from Certain Securities Acquired for Resale.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | 
|   |  | Consistent with standard business practices in the normal course of business, the Trust has provided general indemnifications to the Managing Owner, its Trading Advisor and others when they
act, in good faith, in the best interests of the Trust. The Trust is unable to develop an estimate of the maximum potential amount of future payments that could potentially result from any hypothetical future claim, but expects the risk of having to
make any payments under these general business indemnifications to be remote.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | 
|   |  | In July 2006, the FASB issued FIN No. 48, Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109 (FIN 48), which
clarifies the accounting for uncertainty in tax positions. FIN 48 requires that the Trust recognize in its financial statements, the impact of a tax position if that position is more likely than not of being sustained on audit, based on the
technical merits of the position. The provisions of FIN 48 were effective for fiscal years beginning after December 15, 2006, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. In
connection with the adoption of FIN 48, the Trust has elected an accounting policy to classify interest and penalties related to unrecognized tax benefits as interest or other expense. All tax years which are statutorily open are subject to
examination by the appropriate taxing authorities. Preferred, as Managing Owner of the Trust, evaluated the impact of adopting FIN 48 on the Trusts financial statements. The adoption of FIN 48 had no material impact on the Trust, as the
Trusts tax positions are based on established tax precedence for the tax treatment of investment partnerships as flow through tax entities.
|   | 
|   |  | In September 2006, the FASB issued SFAS No. 157 (SFAS 157), Fair Value Measurements. SFAS 157 requires use of a fair value hierarchy that prioritizes the inputs
to valuation techniques used to measure fair value into three levels: quoted market prices in active markets for identical assets and liabilities (Level 1), inputs other than quoted market prices that are observable for the asset or liability,
either directly or indirectly (Level 2), and unobservable inputs for the asset or liability (Level 3). SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    



-8-

38



---

##### Table of Contents

DIVERSIFIED FUTURES TRUST I

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008

Note 2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



|   |  |                                                                                                                                                                                                                    
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A. |  | Basis of Accounting (Continued)                                                                                                                                                                                    
|   | 
|   |  | The Trust adopted SFAS 157 in the first quarter of 2008. The adoption of SFAS 157 had no impact to certain assets and liabilities required to be carried at fair value (investments) in these
financial statements.
|   | 
|   |  | The following table summarizes the assets and liabilities measured at fair value using the fair value hierarchy of SFAS 157:                                                                                       



December 31, 2008

Level 1

Level 2

Level 3


TotalAssets:Investment in WCM Pool LLC, at fair value

$
0

$
11,561,900

$
0


$
11,561,900Transfers in (out)

$
0

$
11,561,900

$
(11,561,900
)

$
0December 31, 2007

Level 1

Level 2

Level 3


TotalAssets:Investment in WCM Pool LLC, at fair value

$
0

$
0

$
11,055,308


$
11,055,308




| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Investments classified as Level 2 and Level 3 under SFAS 157 represent the Trusts investment in the Company andare valued monthly at the net asset value as reported by the
Company. The Companys net asset value is determinedbased upon its managements best estimate of the fair value of its underlying net assets, substantially all of which areinvestments valued using Level 1 inputs but include certain
assets and liabilities where the inputs into thedetermination of fair value require management judgment or estimation. Preferred determined that certain of theCompanys assets and liabilities which require management judgment or
estimation were not material to the Trustsfinancial statements and therefore, the Trusts investment in the Company should be classified as Level 2 atDecember 31, 2008. A table presenting the changes in the Level 2 and Level
3 fair value categories for the yearsended December 31, 2008 and 2007 is included in Note 5 of these financial statements. Of the $1,985,705 and$1,442,225 of gains for the years ended December 31, 2008 and 2007, respectively,
reported on Level 2 and Level 3investments in Note 5, $(94,690) and $283,249, respectively, represent a change in unrealized gain (loss) allocatedfrom the Company on the Trusts statements of operations.
| | 
| |  | In October 2008, the FASB issued FASB Staff Position FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active (FSP FAS
157-3). FSP FAS 157-3 clarified the application of SFAS 157. FSP FAS 157-3 demonstrated how the fair value of a financial asset is determined when the market for that financial asset is inactive. FSP FAS 157-3 demonstrated how the fair
value of a financial asset is determined when the market for that financial asset is inactive. FSP FAS 157-3 was effective upon issuance, including prior periods for which financial statements had not been issued. Preferred, as Managing Owner of the
Trust, evaluated the impact of adopting FSP FAS 157-3 on the Trusts financial statements. The adoption of this standard did not have an impact on the Trusts financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     



-9-

39



---

##### Table of Contents

DIVERSIFIED FUTURES TRUST I

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008

Note 2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A. |  | Basis of Accounting (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | 
|   |  | In February 2007, the FASB issued SFAS No. 159 (SFAS 159), The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of SFAS
115. This statement provides companies with an option to report selected financial assets and liabilities at fair value. This statement is effective for fiscal years beginning after November 15, 2007 with early adoption permitted. Preferred, as
Managing Owner of the Trust, evaluated the impact of adopting SFAS 159 on the Trusts financial statements                                                                                                                                
|   | 
|   |  | The Trust adopted SFAS 159 during the first quarter of 2008, and it did not have a material effect on the Trusts financial statements, as the Trust did not elect the fair value option
for any eligible financial assets or liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | 
|   |  | In April 2007, the FASB released FASB Staff Position FIN No. 39-1 Offsetting of Amounts Related to Certain Contracts (FSP FIN 39-1). FSP FIN 39-1 requires that
offsetting of assets and liabilities in the balance sheet is improper except where a right of setoff exists. The application of FSP FIN 39-1 is required for fiscal years beginning after November 15, 2007 and interim period within those fiscal years.
Preferred, as Managing Owner of the Trust, evaluated the impact of adopting of FSP FIN 39-1 and its impact on the Trusts financial statements. The adoption of this standard did not have an impact on Trusts financial
statements.
|   | 
|   |  | In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities  an amendment of FASB Statement No. 133 (SFAS
161). SFAS 161 establishes, among other things, the disclosure requirements for derivative instruments and for hedging activities. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after
November 15, 2008. Preferred, as Managing Owner of the Trust, evaluated the impact of adopting SFAS 161 on the Trusts financial statements. The adoption of this standard is not expected to have an impact on the Trusts financial
statements.    
|   | 
|B. |  | Cash                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | 
|   |  | Cash represents amounts deposited with a bank and/or clearing broker. The Trust receives interest on all cash balances held by the clearing broker and/or bank at prevailing rates, as well as
its pro rata share of interest income from the Company since January 1, 2007.                                                                                                                                                                                                                                                                                                                                                                                       
|   | 
|C. |  | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   | 
|   |  | The Trust is treated as a partnership for Federal income tax purposes. As such, the Trust is not required to provide for, or pay, any Federal or state income taxes. Income tax attributes that
arise from its operations are passed directly to the individual Interest holders. The Trust may be subject to other state and local taxes in jurisdictions in which it operates.                                                                                                                                                                                                                                                                                   
|   | 
|D. |  | Investment in WCM Pool LLC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | 
|   |  | The investment in the Company is reported in the Trusts statement of financial condition at the net asset value as reported by the Company. The Trust records its proportionate share of
the Companys income or loss in the statement of operations.                                                                                                                                                                                                                                                                                                                                                                                                             



-10-

40



---

##### Table of Contents

DIVERSIFIED FUTURES TRUST I

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008

Note 2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)



|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|D. |  | Investment in WCM Pool LLC (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | 
|   |  | Through its investment in the Company, the Trust pays its pro-rata share of the 2% annual management fee (accrued and paid monthly) and a 20% incentive fee on New High Net Trading
Profits (accrued monthly and paid quarterly) as defined in the advisory agreement. Valuation of futures contracts by the Company is discussed in the notes to the Companys financial statements included in Section II of this
report.                                                                                                                                                                                                               
|   | 
|E. |  | Profit and Loss Allocation, Distributions and Redemptions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | 
|   |  | Net income or loss for both financial and tax reporting purposes is allocated monthly to all Interest holders on a pro rata basis on each interest holders number of Interests
outstanding during the month.                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | 
|   |  | Distributions (other than redemptions of interests) are made at the sole discretion of the Managing Owner on a pro rata basis in accordance with the respective capital accounts of the
Interest holders. The Managing Owner has not and does not intend to make any distributions.                                                                                                                                                                                                                                                                                                                                                         
|   | 
|   |  | The Trust Agreement provides that an Interest holder may redeem its Interests as of the last business day of any calendar quarter at the then current NAV per interest.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | 
|F. |  | Foreign currency transaction                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | 
|   |  | The Trusts functional currency is the U.S. dollar; however, it transacts business in currencies other than the U.S. dollar. Assets and liabilities denominated in currencies other than
the U.S. dollar are translated into U.S. dollars at the rates in effect at the date of the statement of financial condition. Income and expense items denominated in currencies other than U.S. dollars are translated into U.S. dollars at the rates in
effect during the period. Gains and losses resulting from the translation to U.S. dollars are reported in operations currently under the caption realized on the statements of operations.
|   | 
|G. |  | Interest Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | 
|   |  | Interest income is recorded on an accrual basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

Note 3.       FEES



|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | 
|A. |  | Organizational, General and Administrative Costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | 
|   |  | Preferred pays all administrative costs for services it performs for the Trust. Administrative costs include, but are not limited to, those discussed in Note 4 below. Preferred also pays all
routine legal, audit, postage and other third party costs of the Trust. The Company allocates general and administrative costs on a pro-rata basis down to the Trust which we paid for by the Trust through its investment in the Company. The Trust pays
for its pro-rata allocation of expenses incurred by the Company except for the Spectrum Global Fund Administration administrative fee.



-11-

41



---

##### Table of Contents

DIVERSIFIED FUTURES TRUST I

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008

Note 3.       FEES (CONTINUED)



|   |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|B. |  | Management and Incentive Fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   | 
|   |  | Pursuant to the advisory agreements, Appleton, Graham and Aspect were paid a monthly management fee equal to 1/6 of 1% (a 2% annual rate) and an incentive fee of 20% of the New High Net
Trading Profits on the portion of Trust assets allocated to each through December 31, 2006. Effective with the Trust investment in the Company on January 1, 2007, the Trust pays its pro-rata share of management and incentive fees as disclosed
in Note 2 D through its investment in the Company.                                                                                                                                                                                                         
|   | 
|C. |  | Commissions and Administrative Services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | 
|   |  | On October 1, 2004, an agreement was executed between Preferred and Prudential Financial Derivatives LLC (PFD), which amended and restated the brokerage agreement, including fees
to be paid to PFD. The agreement incorporates the previous PFD brokerage agreements terms, revising the total fees paid by the Trust. Under the agreement, PFD will charge only transaction based fees effective October 1, 2004. Previously, PFD
was paid a fixed monthly fee of .64583 of 1% (7.75 per annum) of the Trusts net asset value as of the first day of each month. Subsequent to October 1, 2004, this monthly charge is now paid to the Managing Owner as an administrative charge for
its services.
|   | 
|   |  | Effective with the Trusts investment in the Company on January 1, 2007, the Trust deducts the cost of its pro-rata share of commissions allocated from the Company in calculation of the
Managing Owners 7.75% per annum administrative charge.                                                                                                                                                                                                                                                                                                                                                                                                                                                         

Note 4.       RELATED PARTIES



| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 
| |  | The Managing Owner or third parties engaged by the Managing Owner perform services for the Trust which include, but are not limited to: accounting and financial management; registrar,
transfer and assignment functions; investor communications; printing and other administrative services. Except for costs related to brokerage services, Preferred pays the costs of these services incurred on behalf of the Trust as well as the
Trusts routine operational, administrative, legal and auditing costs, and costs paid to organize the Trust and offer its Interests.
| | 
| |  | Costs and expenses charged to the Trust for services performed and/or paid for by the Managing Owner on behalf of the Trust for the years ended December 31, 2008, 2007 and 2006 were:                                                                                                                                                                                                                                                                                                                                                                                        



2008

2007

2006Administrative services

$
868,180

$
860,445

$
1,190,211




| |  |                                                                                                                                                                                                                                                                              
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Expenses payable to the Managing Owner and its affiliates (which are included in administrative services payable less anyreceivable from the Managing Owner on the statements of financial
condition) as of December 31, 2008 and 2007 were$35,225 and $66,250, respectively.

Note 5.       INVESTMENT IN WCM POOL LLC



| |  |                                                                                                                                                                                                                                                                                                                                    
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Effective January 1, 2007, the Trust invested its assets in the Company. The Trusts investment in the Company represents approximately 71.68% and 54.86% of the net asset value of the
Company at December 31, 2008 and 2007, respectively. The investment in the Company is subject to the Organization Agreement of the Company.



-12-

42



---

##### Table of Contents

DIVERSIFIED FUTURES TRUST I

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008

Note 5.     INVESTMENT IN WCM POOL LLC (CONTINUED)

Summarized information for the Trusts investment in the Company is as follows:



Net Asset ValueDecember 31, 2007

Investments

Gain*

Redemptions


Net Asset ValueDecember 31, 2008WCM Pool LLC

$
11,055,308

$
0

$
1,985,705

$
(1,479,113
)

$
11,561,900Net Asset ValueDecember 31, 2006

Investments

Gain*

Redemptions


Net Asset ValueDecember 31, 2007WCM Pool LLC

$
0

$
12,966,087

$
1,442,225

$
(3,353,004
)

$
11,055,308*  Included in earnings




| |  |                                                                                                                                                                                                                     
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Trust may make additional contributions to or redemptions from, the Company on a monthly basis. Certain expensesallocated to the Trust from the Company are reimbursed by the Managing
Owner at the Trust level.

Note 6.       INCOME TAX REPORTING



| |  |                                                                                                                                                      
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------
| |  | There have been no differences between the tax basis and book basis of assets, liabilities or interest holders capital since inception of the Trust.

Note 7.       DERIVATIVE INSTRUMENTS AND ASSOCIATED RISKS



| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The Trusts investment in the Company is subject to the market and credit risks of the futures contracts, options on futures contracts, forward currency contracts and other financial
instruments held or sold short by the Company. The Trust bears the risk of loss only to the extent of the market value of its investments and, in certain specific circumstances, distributions and redemptions received.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | 
| |  | Through December 31, 2006, the Trust was exposed to various types of risks associated with the derivative instruments and related markets in which it invested. These risks included, but were
not limited to, risk of loss from fluctuations in the value of derivative instruments held (market risk) and the inability of counterparties to perform under the terms of the Trusts investment activities (credit risk).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | 
| |  | Market Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 
| |  | Trading in futures and forward contracts (including foreign exchange) involves entering into contractual commitments to purchase or sell a particular commodity at a specified date and price.
Through December 31, 2006, the gross or face amount of the contracts, which was typically many times that of the Trusts net assets being traded, significantly exceeded the Trusts future cash requirements since the Trust intended to close
out its open positions prior to settlement. As a result, the Trust was generally subject only to the risk of loss arising from the change in the value of the contracts. As such, the Trust considered the fair value of its derivative
instruments to be the net unrealized gain or loss on the contracts. The market risk associated with the Trusts commitments to purchase commodities was limited to the gross or face amount of the contracts held.



-13-

43



---

##### Table of Contents

DIVERSIFIED FUTURES TRUST I

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008

Note 7.     DERIVATIVE INSTRUMENTS AND ASSOCIATED RISKS (CONTINUED)



| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Market Risk (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | 
| |  | However, when the Trust entered into a contractual commitment to sell commodities, it had to make delivery of the underlying commodity at the contract price and then repurchase the contract
at prevailing market prices or settle in cash. Since the repurchase price to which a commodity can rise is unlimited, entering into commitments to sell commodities exposed the Trust to unlimited risk.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 
| |  | Market risk is influenced by a wide variety of factors, including government programs and policies, political and economic events, the level and volatility of interest rates, foreign currency
exchange rates, the diversification effects among the derivative instruments the Trust held and the liquidity and inherent volatility of the markets in which the Trust traded.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | 
| |  | Credit Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | 
| |  | Through December 31, 2006, when entering into futures or forward contracts, the Trust was exposed to credit risk that the counterparty to the contract would not meet its obligations. The
counterparty for futures contracts traded on United States and most foreign futures exchanges is the clearinghouse associated with the particular exchange. In general, clearinghouses are backed by their corporate members who are required to share
any financial burden resulting from the non-performance by one of their members and, as such, should significantly reduce this credit risk. In cases where the clearinghouse is not backed by the clearing members (i.e. some foreign exchanges), it is
normally backed by a consortium of banks or other financial institutions. On the other hand, there was concentration risk on forward transactions entered into by the Trust as the Trusts commodity broker, was the sole counterparty. The Trust
had entered into a master netting agreement with its broker and, as a result when applicable, presented unrealized gains and losses on open forward positions as a net amount in the statements of financial condition; however, counterparty
non-performance on only certain of the Trusts contracts may have resulted in greater loss than non-performance on all of the Trusts contracts. The amount at risk associated with counterparty non-performance of all of the Trusts
contracts was the net unrealized gain included in the statements of financial condition. There could be no assurance that any counterparty, clearing member or clearinghouse would meet its obligations to the Trust.
| | 
| |  | The Managing Owner attempted to minimize both credit and market risks by requiring the Trust and its trading managers to abide by various trading limitations and policies. The Managing Owner
monitored compliance with these trading limitations and policies, which included, but are not limited to, executing and clearing all trades with creditworthy counterparties; limiting the amount of margin or premium required for any one commodity or
all commodities combined; and generally limiting transactions to contracts which were traded in sufficient volume to permit the taking and liquidating of positions. Additionally, pursuant to the Advisory Agreement among the Trust, the Managing Owner
had the right, among others, to terminate each trading manager if the net asset value allocated to the trading manager declined by 33-1/3% from the value at the beginning of any year or since the commencement of trading activities. Furthermore, the
Third Amended and Restated Declaration of Trust and Trust Agreement provided that the Trust would liquidate its positions, and eventually dissolve, if the Trust experienced a decline in the net asset value of 50% from the value at the beginning of
any year or since the commencement of trading activities. In each case, the decline in net asset value was after giving effect for distributions and redemptions. The Managing Owner may have imposed additional restrictions (through modifications of
trading limitations and policies) upon the trading activities of the trading manager as it, in good faith, deemed to be in the best interests of the Trust.                



-14-

44



---

##### Table of Contents

DIVERSIFIED FUTURES TRUST I

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008

Note 7.       DERIVATIVE INSTRUMENTS AND ASSOCIATED RISKS (CONTINUED)



| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Credit Risk (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 
| |  | The Trust has cash on deposit with financial institutions. In the event of a financial institutions insolvency, recovery of cash on deposit may be limited to account insurance or other
protection afforded such deposits. The Managing Owner has established procedures to actively monitor market risk and minimize credit risk, although there can be no assurance that it will, in fact, succeed in doing so. The Interestholders bear the
risk of loss only to the extent of the market value of their respective investments and, in certain specific circumstances, distributions and redemptions received.                                                                                                                                                                                                                        
| | 
| |  | The Trusts futures commission merchant in accepting orders for the purchase or sale of domestic futures contracts, is required by CFTC regulations to separately account for and
segregate as belonging to the Trust all assets of the Trust relating to domestic futures trading and is not to commingle such assets with its other assets. At December 31, 2008 and 2007, such segregated assets totaled $0 and $1,042, respectively
which are included in cash and cash equivalents on the statements of financial condition. Part 30.7 of the CFTC regulations also requires the Trusts futures commission merchant to secure assets of the Trust related to foreign futures trading
which totaled $0 and $0 at December 31, 2008 and 2007, respectively. There are no segregation requirements for assets related to forward trading.



-15-

45



---

##### Table of Contents

DIVERSIFIED FUTURES TRUST I

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008



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

The following information presents per Interest operating performance data and other supplemental financial data for the years ended December 31, 2008, 2007 and 2006. This information has been derived from information presented in the
financial statements.



|                                                                                |  |      |        |       |      |   |        |       |  |   |        |      
|------------------------------------------------------------------------------- |  | ---- | ------ | ----- | ---- | - | ------ | ----- |  | - | ------ | -----
|                                                                                |  | 2008 |        |       | 2007 |   |        | 2006  | 
|Per Interest Performance                                                        |  |      |        |       |      |   |        |       |  |   |        |      
|(for an Interest outstanding throughout the entire year)                        |  |      |        |       |      |   |        |       |  |   |        |      
|Net asset value, beginning of year                                              |  | $    | 235.63 |       |      | $ | 222.71 |       |  | $ | 232.38 |      
|                                                                                |  |      |        |       |      |   |        |       |  |   |        |      
|Net realized gain and change in net unrealized gainon commodity transactions(1) |  |      | 57.79  | (3)   |      |   | 31.50  | (3)   |  |   | 1.42   | (4)  
|Interest income(1)                                                              |  |      | 3.00   | (3)   |      |   | 9.27   | (3)   |  |   | 11.15  | (4)  
|Expenses(1)                                                                     |  |      | (36.26 | )(3)  |      |   | (27.85 | )(3)  |  |   | (22.24 | )(4) 
|                                                                                |  |      |        |       |      |   |        |       |  |   |        |      
|Net increase (decrease) for the year                                            |  |      | 24.53  |       |      |   | 12.92  |       |  |   | (9.67  | )    
|                                                                                |  |      |        |       |      |   |        |       |  |   |        |      
|Net asset value per Interest, end of year                                       |  | $    | 260.16 |       |      | $ | 235.63 |       |  | $ | 222.71 |      
|                                                                                |  |      |        |       |      |   |        |       |  |   |        |      
|Total Return                                                                    |  |      |        |       |      |   |        |       |  |   |        |      
|Total return before incentive fees                                              |  |      | 14.52  | %     |      |   | 7.99   | %     |  |   | (4.16  | )%   
|Incentive fees                                                                  |  |      | (4.11  | )%    |      |   | (2.19  | )%    |  |   | 0.00   | %    
|                                                                                |  |      |        |       |      |   |        |       |  |   |        |      
|Total return after incentive fees                                               |  |      | 10.41  | %     |      |   | 5.80   | %     |  |   | (4.16  | )%   
|                                                                                |  |      |        |       |      |   |        |       |  |   |        |      
|Supplemental Data                                                               |  |      |        |       |      |   |        |       |  |   |        |      
|Ratios to average net asset value:                                              |  |      |        |       |      |   |        |       |  |   |        |      
|Net investment loss before incentive fees(2)                                    |  |      | (9.15  | )%(3) |      |   | (6.16  | )%(3) |  |   | (4.92  | )%(4)
|Incentive fees                                                                  |  |      | (4.11  | )%(3) |      |   | (2.19  | )%(3) |  |   | 0.00   | %(4) 
|                                                                                |  |      |        |       |      |   |        |       |  |   |        |      
|Net investment loss after incentive fees                                        |  |      | (13.26 | )%(3) |      |   | (8.35  | )%(3) |  |   | (4.92  | )%(4)
|                                                                                |  |      |        |       |      |   |        |       |  |   |        |      
|Interest income                                                                 |  |      | 1.20   | %(3)  |      |   | 4.16   | %(3)  |  |   | 4.95   | %(4) 
|                                                                                |  |      |        |       |      |   |        |       |  |   |        |      
|Incentive fees                                                                  |  |      | 4.11   | %(3)  |      |   | 2.19   | %(3)  |  |   | 0.00   | %(4) 
|Other expenses                                                                  |  |      | 10.35  | %(3)  |      |   | 10.32  | %(3)  |  |   | 9.87   | %(4) 
|                                                                                |  |      |        |       |      |   |        |       |  |   |        |      
|Total net expenses                                                              |  |      | 14.46  | %(3)  |      |   | 12.51  | %(3)  |  |   | 9.87   | %(4) 
|                                                                                |  |      |        |       |      |   |        |       |  |   |        |      

Total returns are calculated based on the change in value of an Interest during the year. An individual

Interestholders total returns and ratios may vary from the above total returns and ratios based on the timing of redemptions.



|(1) | Interest income per Interest and expenses per Interest are calculated by dividing interest income and expenses by the
weighted average number of Interests outstanding during the year. Net realized gain and change in net unrealized gain on commodity transactions is a balancing amount necessary to reconcile the change in net asset value per Interest with the other
per interest information.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Represents interest income less total expenses (exclusive of incentive fees).
|--- | -----------------------------------------------------------------------------

|(3) | Includes the Trusts proportionate share of income and expenses from WCM Pool LLC for the years ended
December 31, 2008 and 2007.
|--- | ---------------------------------------------------------------------------------------------------------------------------------

|(4) | Represents income (loss) and expenses from the Trusts operations.
|--- | ------------------------------------------------------------------



-16-

46



---

##### Table of Contents



SECTION II







47



---

##### Table of Contents

WCM POOL LLC

FINANCIAL STATEMENTS

December 31, 2008



48



---

##### Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Members of

WCM Pool LLC

We have audited the accompanying statements of financial condition, including the condensed schedules of investments, of WCM Pool LLC (the Company) as
of December 31, 2008 and 2007, and the related statements of operations and changes in members capital (net asset value) and the financial highlights for the years ended December 31, 2008 and 2007. These financial statements and the
financial highlights are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of the Companys
internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for
our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial
position of WCM Pool LLC at December 31, 2008 and 2007, and the results of its operations and changes in its members capital (net asset value) and the financial highlights for the years ended December 31, 2008 and 2007, in conformity
with accounting principles generally accepted in the United States of America.

Eisner LLP

New York, New York

March 25, 2009



49



---

##### Table of Contents

WCM POOL LLC

STATEMENTS OF FINANCIAL CONDITION

December 31, 2008 and 2007







|                                              |  |      |            |      |   |           
|--------------------------------------------- |  | ---- | ---------- | ---- | - | ----------
|                                              |  | 2008 |            | 2007
|ASSETS                                        |  |      |            |      |   |           
|Cash and cash equivalents (See Note 2)        |  | $    | 19,431,990 |      | $ | 20,525,950
|Interest receivable                           |  |      | 479        |      |   | 47,642    
|Net unrealized gain on open futures contracts |  |      | 269,887    |      |   | 434,983   
|                                              |  |      |            |      |   |           
|Total assets                                  |  | $    | 19,702,356 |      | $ | 21,008,575
|                                              |  |      |            |      |   |           
|LIABILITIES                                   |  |      |            |      |   |           
|Accrued expenses                              |  | $    | 38,738     |      | $ | 33,955    
|Management fees payable                       |  |      | 66,550     |      |   | 70,084    
|Incentive fees payable                        |  |      | 100,116    |      |   | 174,235   
|Redemptions payable                           |  |      | 3,367,541  |      |   | 580,258   
|                                              |  |      |            |      |   |           
|Total liabilities                             |  |      | 3,572,945  |      |   | 858,532   
|                                              |  |      |            |      |   |           
|MEMBERS CAPITAL (Net Asset Value)            |  |      |            |      |   |           
|Member DFF LP                                 |  |      | 0          |      |   | 3,165,178 
|Member DFT I                                  |  |      | 11,561,900 |      |   | 11,055,308
|Member KGT                                    |  |      | 638,493    |      |   | 1,732,978 
|Member FST                                    |  |      | 3,929,018  |      |   | 4,196,579 
|                                              |  |      |            |      |   |           
|Total members capital (Net Asset Value)      |  |      | 16,129,411 |      |   | 20,150,043
|                                              |  |      |            |      |   |           
|Total liabilities and members capital        |  | $    | 19,702,356 |      | $ | 21,008,575
|                                              |  |      |            |      |   |           

See accompanying notes.



-2-

50



---

##### Table of Contents

WCM POOL LLC

CONDENSED SCHEDULES OF INVESTMENTS

December 31, 2008 and 2007







|                                                  |  |                                                   |    |  |                          |          |   |                                                   |       |    |                          |   |         |  
|------------------------------------------------- |  | ------------------------------------------------- | -- |  | ------------------------ | -------- | - | ------------------------------------------------- | ----- | -- | ------------------------ | - | ------- | -
|                                                  |  | 2008                                              |    |  | 2007                     |         
|                                                  |  | NetUnrealizedGain (Loss)as a % ofMembers Capital |    |  | NetUnrealizedGain (Loss) |          |   | NetUnrealizedGain (Loss)as a % ofMembers Capital |       |    | NetUnrealizedGain (Loss) |  
|Futures Contracts                                 |  |                                                   |    |  |                          |          |   |                                                   |       |    |                          |   |         |  
|Futures contracts purchased:                      |  |                                                   |    |  |                          |          |   |                                                   |       |    |                          |   |         |  
|Commodities                                       |  | 0.00                                              | %  |  | $                        | 32       |   |                                                   | 1.82  | %  |                          | $ | 367,154 |  
|Currencies                                        |  | 0.20                                              | %  |  |                          | 31,725   |   |                                                   | (0.24 | )% |                          |   | (49,036 | )
|Interest rates                                    |  | 2.32                                              | %  |  |                          | 375,048  |   |                                                   | 0.57  | %  |                          |   | 115,021 |  
|Stock indices                                     |  | 0.00                                              | %  |  |                          | 0        |   |                                                   | 0.09  | %  |                          |   | 17,163  |  
|                                                  |  |                                                   |    |  |                          |          |   |                                                   |       |    |                          |   |         |  
|Net unrealized gain on futurescontracts purchased |  | 2.52                                              | %  |  |                          | 406,805  |   |                                                   | 2.24  | %  |                          |   | 450,302 |  
|                                                  |  |                                                   |    |  |                          |          |   |                                                   |       |    |                          |   |         |  
|Futures contracts sold:                           |  |                                                   |    |  |                          |          |   |                                                   |       |    |                          |   |         |  
|Commodities                                       |  | (0.27                                             | )% |  |                          | (43,517  | ) |                                                   | (0.01 | )% |                          |   | (1,873  | )
|Currencies                                        |  | (0.58                                             | )% |  |                          | (92,971  | ) |                                                   | (0.05 | )% |                          |   | (9,014  | )
|Interest rates                                    |  | 0.00                                              | %  |  |                          | (833     | ) |                                                   | (0.04 | )% |                          |   | (8,288  | )
|Stock indices                                     |  | 0.00                                              | %  |  |                          | 403      |   |                                                   | 0.02  | %  |                          |   | 3,856   |  
|                                                  |  |                                                   |    |  |                          |          |   |                                                   |       |    |                          |   |         |  
|Net unrealized loss on futures contracts sold     |  | (0.85                                             | )% |  |                          | (136,918 | ) |                                                   | (0.08 | )% |                          |   | (15,319 | )
|                                                  |  |                                                   |    |  |                          |          |   |                                                   |       |    |                          |   |         |  
|Net unrealized gain on open futures contracts     |  | 1.67                                              | %  |  | $                        | 269,887  |   |                                                   | 2.16  | %  |                          | $ | 434,983 |  
|                                                  |  |                                                   |    |  |                          |          |   |                                                   |       |    |                          |   |         |  

See accompanying notes.



-3-

51



---

##### Table of Contents

WCM POOL LLC

STATEMENTS OF OPERATIONS

For the Years Ended December 31, 2008 and 2007







|                      |  |      |           |   |      |   |          
|--------------------- |  | ---- | --------- | - | ---- | - | ---------
|                      |  | 2008 |           |   | 2007
|REVENUES              |  |      |           |   |      |   |          
|Realized $            |  |      | 4,820,038 |   |      | $ | 2,899,882
|Change in unrealized  |  |      | (165,096  | ) |      |   | 434,983  
|Interest income       |  |      | 241,413   |   |      |   | 804,211  
|                      |  |      |           |   |      |   |          
|Total revenues        |  |      | 4,896,355 |   |      |   | 4,139,076
|                      |  |      |           |   |      |   |          
|EXPENSES              |  |      |           |   |      |   |          
|Brokerage commissions |  |      | 31,212    |   |      |   | 79,343   
|Management fees       |  |      | 409,728   |   |      |   | 414,865  
|Incentive fees        |  |      | 830,827   |   |      |   | 562,491  
|Operating expenses    |  |      | 141,244   |   |      |   | 101,748  
|                      |  |      |           |   |      |   |          
|Total expenses        |  |      | 1,413,011 |   |      |   | 1,158,447
|                      |  |      |           |   |      |   |          
|NET INCOME            |  | $    | 3,483,344 |   |      | $ | 2,980,629
|                      |  |      |           |   |      |   |          

See accompanying notes.



-4-

52



---

##### Table of Contents

WCM POOL LLC

STATEMENTS OF CHANGES IN MEMBERS CAPITAL (NET ASSET VALUE)

For the Years Ended
December 31, 2008 and 2007







|                                               |  |                  |            |   |             |   |            |           |  |   |            |   |  |       |            |   |  |   |            |  
|---------------------------------------------- |  | ---------------- | ---------- | - | ----------- | - | ---------- | --------- |  | - | ---------- | - |  | ----- | ---------- | - |  | - | ---------- | -
|                                               |  | Members Capital |           
|                                               |  | MemberDFF LP     |            |   | MemberDFT I |   |            | MemberKGT |  |   | MemberFST  |   |  | Total |           
|Balances atJanuary 1, 2007                     |  | $                | 0          |   |             | $ | 0          |           |  | $ | 0          |   |  | $     | 0          |   |  | $ | 0          |  
|Additions                                      |  |                  | 3,636,165  |   |             |   | 12,966,087 |           |  |   | 2,143,975  |   |  |       | 5,002,950  |   |  |   | 23,749,177 |  
|Redemptions                                    |  |                  | (888,949   | ) |             |   | (3,353,004 | )         |  |   | (654,816   | ) |  |       | (1,682,994 | ) |  |   | (6,579,763 | )
|Net income for the year endedDecember 31, 2007 |  |                  | 417,962    |   |             |   | 1,442,225  |           |  |   | 243,819    |   |  |       | 876,623    |   |  |   | 2,980,629  |  
|                                               |  |                  |            |   |             |   |            |           |  |   |            |   |  |       |            |   |  |   |            |  
|Balances atDecember 31, 2007                   |  |                  | 3,165,178  |   |             |   | 11,055,308 |           |  |   | 1,732,978  |   |  |       | 4,196,579  |   |  |   | 20,150,043 |  
|Redemptions                                    |  |                  | (3,720,425 | ) |             |   | (1,479,113 | )         |  |   | (1,319,164 | ) |  |       | (985,274   | ) |  |   | (7,503,976 | )
|Net income for the year endedDecember 31, 2008 |  |                  | 555,247    |   |             |   | 1,985,705  |           |  |   | 224,679    |   |  |       | 717,713    |   |  |   | 3,483,344  |  
|                                               |  |                  |            |   |             |   |            |           |  |   |            |   |  |       |            |   |  |   |            |  
|Balances atDecember 31, 2008                   |  | $                | 0          |   |             | $ | 11,561,900 |           |  | $ | 638,493    |   |  | $     | 3,929,018  |   |  | $ | 16,129,411 |  
|                                               |  |                  |            |   |             |   |            |           |  |   |            |   |  |       |            |   |  |   |            |  

See accompanying notes.



-5-

53



---

##### Table of Contents

WCM POOL LLC

NOTES TO FINANCIAL STATEMENTS

December 31, 2008



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note 1. |  | ORGANIZATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        | 
|A.      |  | General Description of the Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | 
|        |  | WCM Pool LLC (the Company) is a limited liability company organized under the laws of Delaware on November 20, 2006 and commenced operations on January 1, 2007. The Company
will terminate on December 31, 2056 unless terminated sooner under the provisions of the Organization Agreement. The Company was formed to engage in the speculative trading of a diversified portfolio of futures contracts, options on futures
contracts and forward currency contracts and may, from time to time, engage in cash and spot transactions. Preferred Investment Solutions Corp. (Preferred) has been delegated administrative authority over the operations of the
Company. The Company consists of three members: Diversified Futures Trust I (Member DFT I), Futures Strategic Trust (Member FST) and Kenmar Global Trust (Member KGT) (collectively, the
Members) as of December 31, 2008. Diversified Futures Fund L.P. (Member DFF LP) redeemed all of its membership interests in the Company and terminated its fund operations as of December 31, 2008. Member DFT I,
Member KGT and Member DFF LP contributed their net assets to the Company effective January 1, 2007, while Member FST invested in the Company on April 1, 2007. Preferred is also the Managing Owner of each of the Members. Upon making the
initial capital contribution, each Member received Voting Membership Interests.
|        | 
|        |  | The Company is a Member-managed limited liability company that is not registered in any capacity with, or subject directly to regulation by, the Commodity Futures Trading Commission
(CFTC) or the United States Securities and Exchange Commission.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | 
|B.      |  | The Trading Advisor                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | 
|        |  | The Company entered into an advisory agreement with Winton Capital Management Limited (the Trading Advisor) to make the trading decisions for the Company. The Trading
Advisor manages approximately 100% of the assets of the Company pursuant to its Diversified Program Portfolio.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | 
|Note 2. |  | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        | 
|A.      |  | Basis of Accounting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | 
|        |  | The financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America, which require the Managing Member to make
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from these estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 
|        |  | Commodity futures and foreign exchange transactions are reflected in the accompanying statement of financial condition on a trade date basis. Net unrealized gain or loss on open contracts
(the difference between contract trade price and market price) is reflected in the financial statements in accordance with Financial Accounting Standards Board (FASB) Interpretation No. 39  Offsetting of Amounts Related to
Certain Contracts. The market value of futures (exchange-traded) contracts is based upon the closing quotation on the various futures exchanges on which the contract is traded. The values which will be used by the Company for open forward
positions will be provided by its administrator, who obtains market quotes from data vendors and third parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       



-6-

54



---

##### Table of Contents

WCM POOL LLC

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note 2. |  | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        | 
|A.      |  | Basis of Accounting (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | 
|        |  | Any change in net unrealized gain or loss during the current period is reported in the statement of operations. Realized gains and losses on transactions are recognized in the period in which
the contracts are closed. Brokerage commissions include other trading fees and are charged to expense when incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        | 
|        |  | The Company has elected not to provide a Statement of Cash Flows as permitted by Statement of Financial Accounting Standards (SFAS) No. 102, Statement of Cash Flows
 Exemption of Certain Enterprises and Classification of Cash Flows from Certain Securities Acquired for Resale.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        | 
|        |  | Consistent with standard business practices in the normal course of business, the Company has provided general indemnifications to its Trading Advisor and others when they act, in good faith,
in the best interests of the Company. The Company is unable to develop an estimate of the maximum potential amount of future payments that could potentially result from any hypothetical future claim, but expects the risk of having to make any
payments under these general business indemnifications to be remote.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 
|        |  | In July 2006, the FASB issued FASB Interpretation (FIN) No. 48, Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109
(FIN 48), which clarifies the accounting for uncertainty in tax positions. FIN 48 requires that the Company recognize in its financial statements, the impact of a tax position if that position is more likely than not of being
sustained on audit, based on the technical merits of the position. The provisions of FIN 48 were effective for fiscal years beginning after December 15, 2006, with the cumulative effect of the change in accounting principle recorded as an adjustment
to opening retained earnings. In connection with the adoption of FIN 48, the Company has elected an accounting policy to classify interest and penalties related to unrecognized tax benefits as interest or other expense. All tax years which are
statutorily open are subject to examination by the appropriate taxing authorities. Preferred, evaluated the impact of adopting FIN 48 on the Companys financial statements. The adoption of FIN 48 had no material impact on the Company, as the
Companys tax positions are based on established tax precedence for the tax treatment of investment partnerships as flow-through tax entities.
|        | 
|        |  | In September 2006, the FASB issued SFAS No. 157 (SFAS 157), Fair Value Measurements. SFAS 157 requires use of a fair value hierarchy that prioritizes the inputs
to valuation techniques used to measure fair value into three levels: quoted market prices in active markets for identical assets and liabilities (Level 1), inputs other than quoted market prices that are observable for the asset or liability,
either directly or indirectly (Level 2), and unobservable inputs for the asset or liability (Level 3). SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      



-7-

55



---

##### Table of Contents

WCM POOL LLC

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note 2. |  | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        | 
|A.      |  | Basis of Accounting (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | 
|        |  | The Company adopted SFAS 157 in the first quarter of 2008. The adoption of SFAS 157 had no impact on the investments required to be carried at fair value in these financial statements. The
Company considers prices for exchange traded commodity futures and options contracts to be based on quoted prices in active markets for identical assets (Level 1). The values of forwards, swaps and certain option contracts for which market
quotations are not readily available are priced by third party data providers such as Bloomberg, Reuters, and or Super Derivatives who derive fair values for those assets from models with observable inputs (Level 2). There are no Level 3 investments
on December 31, 2008 or 2007 using the fair value hierarchy of SFAS 157.
|        | 
|        |  | The following table summarizes the assets and liabilities measured at fair value using the fair value hierarchy of SFAS 157:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   



|                                              |  |         |         |         |   |         |  |       |   |  |   |        
|--------------------------------------------- |  | ------- | ------- | ------- | - | ------- |  | ----- | - |  | - | -------
|December 31, 2008                             |  | Level 1 |         | Level 2 |   | Level 3 |  | Total
|Assets:                                       |  |         |         |         |   |         |  |       |   |  |   |        
|Net unrealized gain on open futures contracts |  | $       | 269,887 |         | $ | 0       |  | $     | 0 |  | $ | 269,887
|                                              |  |         |         |        
|December 31, 2007                             |  | Level 1 |         | Level 2 |   | Level 3 |  | Total
|Assets:                                       |  |         |         |         |   |         |  |       |   |  |   |        
|Net unrealized gain on open futures contracts |  | $       | 434,983 |         | $ | 0       |  | $     | 0 |  | $ | 434,983



| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 
| |  | In October 2008, the FASB issued FASB Staff Position FAS 157-3, Determining the Fair Value of a Financial Asset Whenthe Market for That Asset Is Not Active (FSP FAS
157-3). FSP FAS 157-3 clarified the application of SFAS 157. FSPFAS 157-3 demonstrated how the fair value of a financial asset is determined when the market for that financial asset isinactive. FSP FAS 157-3 was effective upon
issuance, including prior periods for which financial statements had not beenissued. Preferred, evaluated the impact of adopting FSP 157-3 on the Companys financial statements. The adoption of thisstandard did not have an impact on the
Companys financial statements.
| | 
| |  | In February 2007, the FASB issued SFAS No. 159 (SFAS 159), The Fair Value Option for Financial Assets andFinancial Liabilities, including an amendment
of SFAS 115. This statement provides companies with an option to reportselected financial assets and liabilities at fair value. This statement is effective for fiscal years beginning after November 15,2007 with early adoption permitted.
Preferred, evaluated the impact of adopting SFAS 159 and its impact on Companysfinancial statements.                                                                                                                                                                           
| | 
| |  | The Company adopted SFAS 159 during the first quarter of 2008, and it did not have a material effect on the Companysfinancial statements, as the Company did not elect the fair value
option for any eligible financial assets or liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                         



-8-

56



---

##### Table of Contents

WCM POOL LLC

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note 2. |  | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | 
|A.      |  | Basis of Accounting (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        | 
|        |  | In April 2007, the FASB released FASB Staff Position FIN No. 39-1 Offsetting of Amounts Related to Certain Contracts (FSP FIN 39-1). FSP FIN 39-1 requires that
offsetting of assets and liabilities in the balance sheet is improper except where a right of setoff exists. The application of FSP FIN 39-1 is required for fiscal years beginning after November 15, 2007 and interim period within those fiscal years.
Preferred, evaluated the impact of adopting FSP FIN 39-1 and its impact on the Companys financial statements. The adoption of this standard did not have an impact on the Companys financial statements.
|        | 
|        |  | In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities  an amendment of FASB Statement No. 133 (SFAS
161). SFAS 161 establishes, among other things, the disclosure requirements for derivative instruments and for hedging activities. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after
November 15, 2008. Preferred, evaluated the impact of adopting SFAS 161 on the Companys financial statements. The adoption of this standard is not expected to have an impact on the Companys financial statements.     
|        | 
|B.      |  | Cash and Cash Equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | 
|        |  | Cash includes amounts deposited with a bank and clearing brokers, a portion of which is restricted for purposes of meeting margin requirements, which typically range from 0% to 35% of the
notional amounts of the derivatives traded. As of December 31, 2008 and 2007 restricted cash totaled $670,420 and $1,726,651 respectively. The Company receives interest on all cash balances held by the bank and clearing brokers at prevailing
interest rates.                                                                                                                                                                           
|        | 
|C.      |  | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|        | 
|        |  | The Company is treated as a partnership for Federal income tax purposes. As such, the Company is not required to provide for, or pay, any Federal or state income taxes. Income tax attributes
that arise from its operations are passed directly to the Members. The Company may be subject to other state and local taxes in jurisdictions in which it operates.                                                                                                                                                                                                                                                                      
|        | 
|D.      |  | Capital Accounts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 
|        |  | The Company accounts for subscriptions, allocations and redemptions on a per member capital account basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | 
|        |  | The Company allocates profits and losses, prior to calculation of the incentive fee, for both financial and tax reporting purposes to its Members monthly on a pro rata basis based on each
Members pro rata capital in the Company during the month. Each Member is then charged with the applicable incentive fee. Distributions (other than redemptions of capital) may be made at the sole discretion of the Members on a pro rata basis in
accordance with the Members respective capital balances. The Company has not made and does not presently intend to make, any distributions.                                           



-9-

57



---

##### Table of Contents

WCM POOL LLC

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note 2. |  | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        | 
|E.      |  | Foreign Currency Transactions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | 
|        |  | The Companys functional currency is the U.S. dollar; however, it transacts business in currencies other than the U.S. dollar. Assets and liabilities denominated in currencies other than
the U.S. dollar are translated into U.S. dollars at the rates in effect at the date of the statements of financial condition. Income and expense items denominated in currencies other than U.S. dollars are translated into U.S. dollars at the rates in
effect during the period. Gains and losses resulting from the translation to U.S. dollars are reported in operations currently under the caption realized in the statements of operations.
|        | 
|F.      |  | Interest Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | 
|        |  | Interest income is recorded on an accrual basis.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | 
|Note 3. |  | FEES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|        | 
|A.      |  | Operating Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        | 
|        |  | Operating expenses of the Company are paid for by the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        | 
|B.      |  | Management and Incentive Fees                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | 
|        |  | The Company accrues and pays the Trading Advisor a management fee at an annual rate of 2% of the Companys Net Assets determined as of the close of business each month. For purposes of
determining the management fee, any distributions, redemptions or reallocation of assets made as of the last day of the month shall be added back to the assets and there shall be no reduction for (i) the management fees calculated or (ii) any
accrued but unpaid incentive fees due the Trading Advisor.                                                                                                                                         
|        | 
|        |  | Additionally, the Company pays the Trading Advisor a quarterly incentive fee of 20% (the Incentive Fee) of New High Net Trading Profits (as defined in the Advisory
Agreement). For the years ended December 31, 2008 and 2007, the Trading Advisor earned incentive fees of $830,827 and $562,491, respectively, of which $100,116 and $174,235 remains payable at December 31, 2008 and 2007
respectively.                                                                                                                                                                                                                               
|        | 
|C.      |  | Commissions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 
|        |  | The Company is obligated to pay all floor brokerage expenses, give-up charges and National Futures Association clearing and exchange fees incurred in connection with the Companys
commodity trading activities.                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | 
|Note 4. |  | RELATED PARTIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | 
|        |  | The Company reimburses Preferred for services it performs for the Company, which include, but are not limited to: management, accounting, printing, and other administrative
services.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|        | 
|        |  | The expenses incurred by the Company for services performed by Preferred for the Company for the years ended December 31, 2008 and 2007 were:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  



|                           |  |      |        |      |   |  
|-------------------------- |  | ---- | ------ | ---- | - | -
|                           |  | 2008 |        | 2007
|General and administrative |  | $    | 24,350 |      | $ | 0
|                           |  |      |        |      |   |  



-10-

58



---

##### Table of Contents

WCM POOL LLC

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note 4. |  | RELATED PARTIES (CONTINUED)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | 
|        |  | Expenses payable to Preferred and its affiliates as of December 31, 2008 and 2007 were $7,480, and $0, respectively which are included in accrued expenses on the statement of financial
condition.                                                                                                                                                                                                                                                                                                                                                                                                                        
|        | 
|Note 5. |  | INCOME TAXES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | 
|        |  | There have been no differences between the tax basis and book basis of assets, liabilities or members capital since inception of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|        | 
|Note 6. |  | DEPOSITS WITH COMMODITY BROKER, PRIME BROKER AND BANK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        | 
|        |  | The Company deposits funds with a commodity broker subject to CFTC regulations and various exchange and commodity broker requirements. Margin requirements are satisfied by the deposit of cash
with such commodity broker. The Company earns interest income on assets deposited with the commodity broker. The Company also deposits funds with a prime broker. Margin requirements are satisfied by the deposit of cash with such prime broker. The
Company earns interest income on assets deposited with its prime broker. The Company also earns interest on funds deposited with JPMorgan Chase Bank, Nassau branch.
|        | 
|Note 7. |  | SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        | 
|        |  | Investments in the Company are made subject to the terms of the Organization Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 
|        |  | The Company is not required to make distributions, but could do so at the discretion of the Members. A Member can request and receive redemption of capital, subject to the terms in the
Organization Agreement.                                                                                                                                                                                                                                                                                                                                                                                                           
|        | 
|Note 8. |  | DERIVATIVE INSTRUMENTS AND ASSOCIATED RISKS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        | 
|        |  | The Company has cash on deposit with financial institutions. In the event of a financial institutions insolvency, recovery of cash on deposit may be limited to account insurance or
other protection afforded such deposits.                                                                                                                                                                                                                                                                                                                                                                                             
|        | 
|        |  | The Company is exposed to various types of risks associated with the derivative instruments and related markets in which it invests. These risks include, but are not limited to, risk of loss
from fluctuations in the value of derivative instruments held (market risk) and the inability of counterparties to perform under the terms of the Companys investment activities (credit risk).                                                                                                                                                                                                                            



-11-

59



---

##### Table of Contents

WCM POOL LLC

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note 8. |  | DERIVATIVE INSTRUMENTS AND ASSOCIATED RISKS (CONTINUED                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | 
|        |  | Market Risk (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|        | 
|        |  | Trading in futures and forward contracts (including foreign exchange) involves entering into contractual commitments to purchase or sell a particular commodity at a specified date and price.
The gross or face amount of the contracts, which is typically many times that of the Companys net assets being traded, significantly exceeds the Companys future cash requirements since the Company intends to close out its open positions
prior to settlement. As a result, the Company is generally subject only to the risk of loss arising from the change in the value of the contracts. As such, the Company considers the fair value of its derivative instruments to be the net
unrealized gain or loss on the contracts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | 
|        |  | The market risk associated with the Companys commitments to purchase commodities is limited to the gross or face amount of the contract held. However, when the Company enters into a
contractual commitment to sell commodities, it must make delivery of the underlying commodity at the contract price and then repurchase the contract at prevailing market prices or settle in cash. Since the repurchase price to which a commodity can
rise is unlimited, entering into commitments to sell commodities exposes the Company to unlimited risk.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        | 
|        |  | Market risk is influenced by a wide variety of factors, including government programs and policies, political and economic events, the level and volatility of interest rates, foreign currency
exchange rates, the diversification effect among the derivative instruments the Company holds and the liquidity and inherent volatility of the markets in which the Company trades.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        | 
|        |  | Credit Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|        | 
|        |  | When entering into futures or forward contracts, the Company is exposed to credit risk that the counterparty to the contract will not meet its obligations. The counterparty for futures
contracts traded on United States and most foreign futures exchanges is the clearinghouse associated with the particular exchange. In general, a clearinghouse is backed by its corporate members who are required to share any financial burden
resulting from the non-performance by one of their members and, as such, should significantly reduce this credit risk. In cases where the clearinghouse is not backed by the clearing members (i.e., some foreign exchanges), it is normally backed by a
consortium of banks or other financial institutions. On the other hand, there is concentration risk on forward transactions entered into by the Company, as the Companys forward broker is the sole counterparty. The Company has entered into a
master netting agreement with its forward broker and, as a result, when applicable, presents unrealized gains and losses on open forward positions as a net amount in the statements of financial condition. The amount at risk associated with
counterparty non-performance of all of the Companys contracts is the net unrealized gain or loss included in the statements of financial condition; however, counterparty non-performance on only certain of the Companys contracts may
result in greater loss than non-performance on all of the Companys contracts. There can be no assurance that any counterparty, clearing member or clearinghouse will meet its obligations to the Company.
|        | 
|        |  | Preferred attempts to minimize both credit and market risks by requiring the Company and its Trading Advisor to abide by various trading limitations and policies. Preferred monitors
compliance with these trading limitations and policies, which include, but are not limited to, executing and clearing all trades with creditworthy counterparties; limiting the amount of margin or premium required for any one commodity or all
commodities combined; and generally limiting transactions to contracts which are traded in sufficient volume to permit the taking and liquidating of positions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  



-12-

60



---

##### Table of Contents

WCM POOL LLC

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Note 8. |  | DERIVATIVE INSTRUMENTS AND ASSOCIATED RISKS (CONTINUED)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 
|        |  | Credit Risk (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        | 
|        |  | Additionally, pursuant to the Advisory Agreement among the Company, Preferred and the Trading Advisor, the Company shall automatically terminate the Trading Agreement, if the net asset value
allocated to the Trading Advisor declines by 40% from the value at the beginning of any year or since the effective date of the Advisory Agreement. The decline in net asset value is after giving effect for distributions, subscriptions and
redemptions.                                                                                                                                                                                                                                                                                                                                                                                                                                 
|        | 
|        |  | The Companys futures commission merchant, in accepting orders for the purchase or sale of domestic futures contracts, is required by CFTC regulations to separately account for and
segregate as belonging to the Company all assets of the Company relating to domestic futures trading and is not allowed to commingle such assets with its other assets. At December 31, 2008 and 2007, such segregated assets totaled $12,595,893 and
$17,941,562, respectively, which are included in cash and cash equivalents on the statements of financial condition. Part 30.7 of the CFTC regulations also requires the Companys futures commission merchant to secure assets of the Company
related to foreign futures trading which totaled $1,274,591 and $48,961 at December 31, 2008 and 2007, respectively. There are no segregation requirements for assets related to forward trading.
|        | 
|        |  | As of December 31, 2008, all open futures contracts mature within eighteen months.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         



-13-

61



---

##### Table of Contents

WCM POOL LLC

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 2008



|Note | 9.      FINANCIAL HIGHLIGHTS
|---- | ----------------------------

The following information presents the financial highlights of the Company for the years ended December 31, 2008 and 2007. This information has been derived from information presented in the financial statements.



|                                      |  |                   |    |  |                   |    |  |           |    |  |           |    |  |              |    |  |             |    |  |           |    |  |              |   
|------------------------------------- |  | ----------------- | -- |  | ----------------- | -- |  | --------- | -- |  | --------- | -- |  | ------------ | -- |  | ----------- | -- |  | --------- | -- |  | ------------ | --
|                                      |  | December 31, 2008 |    |  | December 31, 2007 |   
|                                      |  | MemberDFF LP      |    |  | MemberDFT I       |    |  | MemberKGT |    |  | MemberFST |    |  | MemberDFF LP |    |  | MemberDFT I |    |  | MemberKGT |    |  | MemberFST(5) |   
|Total return(1), (4)                  |  |                   |    |  |                   |    |  |           |    |  |           |    |  |              |    |  |             |    |  |           |    |  |              |   
|Total return beforeincentive fee      |  | 23.44             | %  |  | 23.44             | %  |  | 23.44     | %  |  | 23.44     | %  |  | 15.84        | %  |  | 15.84       | %  |  | 15.84     | %  |  | 26.12        | % 
|Incentive fee                         |  | (4.69             | )% |  | (4.69             | )% |  | (4.69     | )% |  | (4.69     | )% |  | (2.43        | )% |  | (2.42       | )% |  | (2.51     | )% |  | (4.92        | )%
|                                      |  |                   |    |  |                   |    |  |           |    |  |           |    |  |              |    |  |             |    |  |           |    |  |              |   
|Total return afterincentive fee       |  | 18.75             | %  |  | 18.75             | %  |  | 18.75     | %  |  | 18.75     | %  |  | 13.41        | %  |  | 13.42       | %  |  | 13.33     | %  |  | 21.20        | % 
|                                      |  |                   |    |  |                   |    |  |           |    |  |           |    |  |              |    |  |             |    |  |           |    |  |              |   
|Ratios to averagenet asset values(6): |  |                   |    |  |                   |    |  |           |    |  |           |    |  |              |    |  |             |    |  |           |    |  |              |   
|Expenses prior toincentive fee(2)     |  | 2.92              | %  |  | 2.91              | %  |  | 3.06      | %  |  | 2.92      | %  |  | 2.93         | %  |  | 2.92        | %  |  | 2.92      | %  |  | 2.97         | % 
|Incentive fee(1)                      |  | 4.15              | %  |  | 4.09              | %  |  | 4.92      | %  |  | 4.18      | %  |  | 2.21         | %  |  | 2.18        | %  |  | 2.30      | %  |  | 4.26         | % 
|                                      |  |                   |    |  |                   |    |  |           |    |  |           |    |  |              |    |  |             |    |  |           |    |  |              |   
|Total expenses andincentive fee       |  | 7.07              | %  |  | 7.00              | %  |  | 7.98      | %  |  | 7.10      | %  |  | 5.14         | %  |  | 5.10        | %  |  | 5.22      | %  |  | 7.23         | % 
|                                      |  |                   |    |  |                   |    |  |           |    |  |           |    |  |              |    |  |             |    |  |           |    |  |              |   
|Net investmentincome (loss)(2), (3)   |  | (1.71             | )% |  | (1.72             | )% |  | (1.66     | )% |  | (1.71     | )% |  | 1.00         | %  |  | 1.01        | %  |  | 1.07      | %  |  | 1.05         | % 
|                                      |  |                   |    |  |                   |    |  |           |    |  |           |    |  |              |    |  |             |    |  |           |    |  |              |   

Total returns are calculated based on the change in value of Members capital during the period. An
individual Members total returns and ratios may vary from the above total returns and ratios based on the timing of additions and redemptions



|(1) | Not annualized.
|--- | ---------------



|(2) | Annualized.
|--- | -----------



|(3) | Represents interest income less total expenses (exclusive of incentive fee).
|--- | ----------------------------------------------------------------------------



|(4) | Includes realized and unrealized gains (losses) on securities transactions.
|--- | ---------------------------------------------------------------------------



|(5) | Member FST contributed its net assets to the Company effective April 1, 2007.
|--- | -----------------------------------------------------------------------------



|(6) | Member DFF LP, ratios to average net asset values for the year ended December 31, 2008, were calculated prior to
its liquidating redemptions from the Company.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------



|Note | 10.    SUBSEQUENT EVENT
|---- | -----------------------

Effective
April 1, 2009, World Monitor Trust II Series D and F will contribute their net assets to the Company and receive Voting Membership Interests as new Members of the Company.



-14-

62



---

##### Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 27thday of March 2009.



|                            |  |                                     
|--------------------------- |  | ------------------------------------
|DIVERSIFIED FUTURES TRUST I
|                            | 
|By:                         |  | Preferred Investment Solutions Corp.
|                            |  | Managing Owner                      



|                                                          |  |                    |  |  |  |  |  |                     
|--------------------------------------------------------- |  | ------------------ |  |  |  |  |  | --------------------
|                                                          |  |                    |  | 
|                                                          |  |                    |  | 
|By:                                                       |  | /s/ David K. Spohr |  |  |  |  |  | Date: March 27, 2009
|David K. Spohr                                            |  |                    |  |  |  | 
|Senior Vice President and Director of Fund Administration |  |                    |  |  |  | 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of Registrant in the capacities indicated on March 27, 2009.



|                            |  |                                     
|--------------------------- |  | ------------------------------------
|DIVERSIFIED FUTURES TRUST I
|                            | 
|By:                         |  | Preferred Investment Solutions Corp.
|                            |  | Managing Owner                      



|                              |  |                       |  |  |  |  |  |                     
|----------------------------- |  | --------------------- |  |  |  |  |  | --------------------
|                              |  |                       |  | 
|By:                           |  | /s/ Kenneth A. Shewer |  |  |  |  |  | Date: March 27, 2009
|Kenneth A. Shewer             |  |                       |  |  |  | 
|Co-Chief Executive Officer    |  |                       |  |  |  | 
|(Principal Executive Officer) |  |                       |  |  |  | 



|                                                          |  |                    |  |  |  |  |  |                     
|--------------------------------------------------------- |  | ------------------ |  |  |  |  |  | --------------------
|                                                          |  |                    |  | 
|By:                                                       |  | /s/ David K. Spohr |  |  |  |  |  | Date: March 27, 2009
|David K. Spohr                                            |  |                    |  |  |  | 
|Senior Vice President and Director of Fund Administration |  |                    |  |  |  | 
|(Principal Financial/Accounting Officer)                  |  |                    |  |  |  | 



63



---

##### Table of Contents

OTHER INFORMATION

The actual round turn equivalent of brokerage commissions paid per trade for the year ended December 31, 2008 was $3.40.

Registrants Annual Report on Form 10-K as filed with the Securities and Exchange Commission is available to Interestholders without charge upon written request to:

Diversified Futures Trust I

c/o Preferred
Investment Solutions Corp

900 King Street, Suite 100

Rye Brook, NY 10573



64