UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-K

                  Annual Report Pursuant to Section 13 or 15(d)

                     of the Securities Exchange Act of 1934

                      For the year ended December 31, 2000

Commission File Number 0-26132

                SMITH BARNEY DIVERSIFIED FUTURES FUND L.P.
             (Exact name of registrant as specified in its charter)

            New York                               13-3729162
       (State or other jurisdiction of            (I.R.S. Employer
       incorporation or organization)            Identification No.)

                     c/o Smith Barney Futures Management LLC
                           388 Greenwich St. - 7th Fl.
                            New York, New York 10013
              (Address and Zip Code of principal executive offices)

                                 (212) 723-5424
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:  None
Securities registered pursuant to Section 12(g) of the Act:  Units
                                                             of Limited
                                                             Partnership
                                                             Interest
                                                             (Title of Class)

Indicate by check mark whether the 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 the  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 [X]

As of February 28, 2001,  Limited  Partnership  Units with an aggregate value of
$72,666,658 were outstanding and held by non-affiliates.

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None




<PAGE>





                                     PART I

Item 1. Business.

         (a) General  development of business.  Smith Barney Diversified Futures
Fund  L.P.   ("Partnership")  is  a  limited  partnership  organized  under  the
partnership  laws of the State of New  York,  on  August  13,  1993 to engage in
speculative trading of a diversified portfolio of commodity interests, including
futures contracts, options and forwards. The commodity interests that are traded
by the  Partnership  are volatile and involve a high degree of market risk.  The
Partnership commenced trading operations on January 12, 1994. A total of 150,000
Units of Limited Partnership Interest in the Partnership  ("Units") were offered
to the  public.  A  Registration  Statement  on Form S-1  relating to the public
offering  became  effective  on October 29, 1993.  Between  October 29, 1993 and
January  11,  1994,  75,615  Units  were sold to the  public at $1,000 per Unit.
Proceeds of the offering  were held in an escrow  account and were  transferred,
along with the general  partner's  contribution of $781,000 to the Partnership's
trading account on January 12, 1994 when the Partnership  commenced trading.  An
additional 150,000 Units were registered on a Registration Statement on Form S-1
effective  February 17, 1994. Sales of additional  Units and additional  general
partner  contributions  and redemptions of Units for the year ended December 31,
2000 are reported in the Statement of Partners'  Capital on page F-6 under "Item
8. Financial Statements and Supplementary Data."

                                       2
<PAGE>


     The general partner has agreed to make capital contributions, if necessary,
so that its general partnership  interest will be equal to the greater of (i) an
amount to entitle it to 1% of each material item of  Partnership  income,  loss,
deduction  or  credit  and  (ii)  the  greater  of  (a)  1%  of  the   partners'
contributions  to the  Partnership  or (b)  $25,000.  The  Partnership  will  be
liquidated upon the first of the following to occur:  December 31, 2013; the net
asset  value  of a Unit  decreases  to less  than  $400 as of the  close  of any
business  day;  or  under  certain  circumstances  as  defined  in  the  Limited
Partnership Agreement of the Partnership (the "Limited Partnership Agreement").
     Smith  Barney  Futures  Management  LLC acts as the  general  partner  (the
"General  Partner") of the Partnership.  The  Partnership's  commodity broker is
Salomon Smith Barney Inc.  ("SSB").  SSB is an affiliate of the General Partner.
The  General  Partner is wholly  owned by Salomon  Smith  Barney  Holdings  Inc.
("SSBHI"), which is the sole owner of SSB. SSBHI is a wholly owned subsidiary of
Citigroup Inc.
     The Partnership's  trading of futures,  forwards and options contracts,  if
applicable,  on  commodities  is done on United  States of America  and  foreign
commodity  exchanges.  It engages in such trading through a commodity  brokerage
account maintained with SSB.

                                       3
<PAGE>


     As of December 31, 2000, all commodity  trading  decisions are made for the
Partnership by Campbell & Company, Inc. ("Campbell"),  Willowbridge  Associates,
Inc.  ("Willowbridge"),  Bridgewater Associates Inc.  ("Bridgewater"),  Dominion
Capital Management Inc.  ("Dominion") and Stonebrook  Structured  Products,  LLC
("Stonebrook")   (collectively,   the  "Advisors").  None  of  the  Advisors  is
affiliated  with one another,  the General  Partner or SSB. The Advisors are not
responsible for the organization or operation of the Partnership.  John W. Henry
&  Company,  Inc.  ("JWH")  and  Rabar  Market  Research,  Inc.  ("Rabar")  were
terminated  as  Advisors to the  Partnership  on July 1, 2000.  Bridgewater  and
Dominion were added as Advisors on that date
     Pursuant  to  the  terms  of the  Management  Agreements  (the  "Management
Agreements"), the Partnership pays Campbell, Dominion and Willowbridge a monthly
management  fee equal to 1/6 of 1% (2% per year) of Net Assets  allocated to the
Advisor as of the end of each month.  Bridgewater  receives a monthly management
fee  equal  to 5/48 of 1%  (1.25%  per  year)  of month  end Net  Assets  of the
Partnership allocated to the Advisor as of the end of each month. For the period
January  1,  2000  through  February  29,  2000,  Stonebrook  was paid a monthly
management fee equal to 1/16 of 1% (0.75% per year) of a fixed notional  account
size of  $75,000,000.  Effective  March 1, 2000,  Stonebrook  receives a monthly
management fee equal to 1/20 of 1% (0.60% per year) of a fixed notional  account
size  determined on a monthly  basis by the General  Partner.  In addition,  the
Partnership is obligated to pay each Advisor, except Stonebrook, 20% of the New



                                       4
<PAGE>

Trading Profits, as defined in the Management Agreements, earned by each Advisor
to the  Partnership  in each calendar  quarter.  Stonebrook  does not receive an
incentive  fee.  For the  period  January 1, 2000  through  June 30,  2000,  the
Partnership  was  obligated  to pay John W.  Henry &  Company,  Inc.  a  monthly
management  fee equal to 1/3 of 1% (4% per year) and an  incentive  fee  payable
quarterly equal to 15% of the New Trading Profits,  as defined in the Management
Agreement.
         The  Partnership  has entered into a Customer  Agreement  with SSB (the
"Customer Agreement") which provides that the Partnership will pay SSB a monthly
brokerage  fee equal to 11/24 of 1% of  month-end  Net Assets  allocated  to the
Advisors (5.5% per year) in lieu of brokerage  commissions on a per trade basis.
Persons investing $1,000,000 or more will pay a reduced brokerage fee of 7/24 of
1% of month-end Net Assets (3.5% per year),  receiving the differential  between
this reduced fee and 5.5% per year in the form of additional  Units.  SSB pays a
portion of its brokerage fees to its financial  consultants  who have sold Units
and who are registered as associated  persons with the Commodity Futures Trading
Commission (the "CFTC").  The Partnership pays for National Futures  Association
("NFA")  fees,  exchange  and  clearing  fees,  give-up  and user fees and floor
brokerage fees. The Customer Agreement between the Partnership and SSB gives the
Partnership the legal right to net unrealized  gains and losses.  Brokerage fees
will be paid for the life of the  Partnership,  although  the rate at which such
fees are paid may be changed.



                                       5
<PAGE>

         In addition,  SSB pays the  Partnership  interest on 80% of the average
daily  equity  maintained  in cash in its account  during each month at a 30-day
U.S.  Treasury  bill  rate  determined  weekly  by  SSB  based  on  the  average
non-competitive  yield on 3-month U.S.  Treasury  bills maturing in 30 days from
the date on which such weekly rate is determined.
         (b) Financial  information about industry  segments.  The Partnership's
business  consists  of  only  one  segment,  speculative  trading  of  commodity
interests.  The Partnership  does not engage in sales of goods or services.  The
Partnership's net income (loss) from operations for the years ended December 31,
2000, 1999,  1998, 1997 and 1996 is set forth under "Item 6. Selected  Financial
Data". The Partnership capital as of December 31, 2000 was $80,499,049.
         (c)  Narrative  description  of business.
              See  Paragraphs  (a) and (b) above.
              (i) through (x) - Not applicable.
              (xi) through (xii) - Not applicable.
              (xiii) - The Partnership has no employees.
         (d) Financial  Information About Geographic Areas. The Partnership does
not  engage in sales of goods or  services,  or own any long lived  assets,  and
therefore this item is not applicable.
Item 2.  Properties.
                The  Partnership  does  not own or  lease  any  properties.  The
General Partner operates out of facilities provided by its affiliate, SSB.

                                       6
<PAGE>


Item 3.  Legal Proceedings.
          Salomon Smith Barney Inc,  ("SSB") is a New York  corporation with its
 principal place of business at 388 Greenwich St., New York, New York 10013. SSB
 is registered as a broker-dealer and futures commission  merchant ("FCM"),  and
 provides futures  brokerage and clearing  services for institutional and retail
 participants  in the  futures  markets.  SSB and its  affiliates  also  provide
 investment banking and other financial services for clients worldwide.
          There have been no administrative,  civil or criminal actions pending,
 on appeal or concluded  against SSB or any of its individual  principals within
 the past five  years that  management  believes  may have a material  impact on
 SSB's ability to act as an FCM. In the ordinary course of its business,  SSB is
 a party to various claims and regulatory  inquiries.  Proceedings  deemed to be
 material for purposes of CFTC disclosure requirements are:
          In  September  1992,  Harris  Trust and  Savings  Bank (as trustee for
 Ameritech Pension Trust),  Ameritech  Corporation,  and an officer of Ameritech
 sued Salomon Brothers Inc and Salomon  Brothers Realty  Corporation in the U.S.
 District  Court for the Northern  District of Illinois  (Harris  Trust  Savings
 Bank, not individually  but solely as trustee for the Ameritech  Pension Trust,
 Ameritech Corporation and John A. Edwardson v. Salomon Brothers Inc and Salomon
 Brothers  Realty  Corp.).  The  complaint  alleged that  purchases by Ameritech
 Pension  Trust from the Salomon  entities  of  approximately  $20.9  million in
 participations  in a portfolio of motels  owned by Motels of America,  Inc. and
 Best Inns, Inc. violated the Employee Retirement Income Security Act ("ERISA"),



                                       7
<PAGE>

 the Racketeer  Influenced and Corrupt  Organization Act ('RICO") and state law.
 Salomon  Brothers  Inc had  acquired  the  participations  issued  by Motels of
 America and Best Inns to finance  purchases of motel portfolios and sold 95% of
 three  such  issues  and 100% of one such  issue to  Ameritech  Pension  Trust.
 Ameritech Pension Trust's  complaint sought (1) approximately  $20.9 million on
 the ERISA  claim,  and (2) in excess of $70  million  on the RICO and state law
 claims as well as other relief.  In various  decisions  between August 1993 and
 July 1999, the courts hearing the case have dismissed all of the allegations in
 the complaint against the Salomon entities. In October 1999, Ameritech appealed
 to the U.S. Supreme Court and in January 2000, the Supreme Court agreed to hear
 the case.  An argument was heard on April 17, 2000.  The appeal seeks review of
 the  decision  of the U.S.  Court  of  Appeals  for the  Seventh  Circuit  that
 dismissed the sole remaining ERISA claim against the Salomon entities.  In June
 the Supreme Court reversed the Seventh Circuit and the matter has been remanded
 to the Trial Courts.
          Both the  Department  of Labor and the Internal  Revenue  Service have
 advised Salomon  Brothers Inc that they were or are reviewing the  transactions
 in which Ameritech Pension Trust acquired such participations.  With respect to
 the Internal  Revenue Service review,  Salomon Smith Barney  Holdings,  Salomon
 Brothers Inc and Salomon  Brothers  Realty have consented to extensions of time
 for the  assessment  of excise taxes that may be claimed to be due with respect
 to the transactions for the years 1987, 1988 and 1989.


                                       8
<PAGE>

     In December  1996, a complaint  seeking  unspecified  monetary  damages was
filed by Orange County,  California against numerous brokerage firms,  including
Salomon Smith Barney,  in the U.S.  Bankruptcy Court for the Central District of
California.  (County  of  Orange et aL v. Bear  Stearns & Co.  Inc.  et al.) The
complaint alleged,  among other things, that the brokerage firms recommended and
sold  unsuitable  securities  to Orange  County.  Salomon  Smith  Barney and the
remaining brokerage firms settled with Orange County in mid 1999.
     In June  1998,  complaints  were filed in the U.S.  District  Court for the
Eastern District of Louisiana in two actions (Board of  Liquidations,  City Debt
of the City of New  Orleans v. Smith  Barney  Inc,  et ano.  and The City of New
Orleans v. Smith Barney Inc. et ano.),  in which the City of New Orleans seeks a
determination that Smith Barney Inc. and another underwriter will be responsible
for any  damages  that the City may  incur in the  event  the  Internal  Revenue
Service  denies tax exempt  status to the City's  General  Obligation  Refunding
Bonds Series 1991.  The  complaints  were  subsequently  amended.  Salomon Smith
Barney has asked the court to dismiss the amended  complaints.  The Court denied
the motion but stayed the case. Subsequently, the city withdrew its lawsuit.
     It November  1998, a class action  complaint was filed in the United States
District  Court for the Middle  District of Florida  (Dwight  Brock as Clerk for
Collier County v. Merrill Lynch, et al.). The complaint  alleged that,  pursuant
to a nationwide conspiracy, 17 broker-dealer defendants, including



                                       9
<PAGE>

 Salomon Smith Barney,  charged  excessive  mark-ups in connection with advanced
 refunding transactions.  Among other relief, plaintiffs sought compensatory and
 punitive  damages,  restitution  and/or  rescission  of  the  transactions  and
 disgorgement of alleged excessive profits. In October 1999, the plaintiff filed
 a second amended complaint. Salomon Smith Barney has asked the court to dismiss
 the amended complaint.
          In connection with the Louisiana and Florida matters,  the IRS and SEC
 have  been  conducting  an  industry-wide  investigation  into the  pricing  of
 Treasury securities in advanced refunding  transactions.  In April 2000 SSB and
 several  other  broker-dealers  entered into a settlement  with the IRS and the
 SEC.
          In December 1998, Salomon Smith Barney was one of twenty-eight  market
 making firms that reached a settlement with the SEC in the matter titled In the
 Matter of Certain Market Making Activities on NASDAQ. As part of the settlement
 of that matter,  Salomon Smith Barney, without admitting or denying the factual
 allegations,  agreed to an order  that  required  that it: (i) cease and desist
 from  committing or causing any violations of Sections  15(c)(1) and (2) of the
 Securities Exchange Act of 1934 and Rules l5cl -2, 15c2-7 and 17a-3 thereunder,
 (ii) pay penalties totaling  approximately  $760,000,  and (iii) submit certain
 policies and procedures to an independent consultant for review.
          In March 1999, a complaint seeking in excess of $250 million was filed
 by a hedge fund and its investment  advisor against Salomon Smith Barney in the
 Supreme  Court of the State of New York,  County of New York (MKP Master  Fund,



                                       10
<PAGE>

 LDC et al. v. Salomon Smith Barney Inc.).  The complaint  included  allegations
 that,  while  acting as prime broker for the hedge fund,  Salomon  Smith Barney
 breached its contracts with  plaintiffs,  misused their monies,  and engaged in
 tortious (wrongful) conduct,  including breaching its fiduciary duties. Salomon
 Smith Barney asked the court to dismiss the complaint in full. In October 1999,
 the court  dismissed the tort claims,  including  the breach of fiduciary  duty
 claims.  The court allowed the breach of contract and misuse of money claims to
 stand, Salomon Smith Barney will continue to contest this lawsuit vigorously.
Item 4.  Submission of Matters to a Vote of Security Holders.
               There were no matters  submitted  to the  security  holders for a
vote during the last fiscal year covered by this report.

                                     PART II
Item 5.    Market for Registrant's Common Equity and Related Security Holder
           Matters.
          (a)  Market Information. The Partnership has issued no stock. There is
               no established public market for the Units of Limited Partnership
               Interest.
          (b)  Holders.  The number of  holders of Units of Limited  Partnership
               Interest as of December 31, 2000 was 4,123.



                                       11
<PAGE>


               (c)  Distribution. The Partnership did not declare a distribution
                    in 2000 or 1999.
               (d)  Use of Proceeds:  For the twelve  months ended  December 31,
                    2000,  there were additional sales of 49.4149 Units totaling
                    $61,337.  For the twelve  months  ended  December  31, 1999,
                    there  were  additional  sales  of  88.1293  Units  totaling
                    $120,344.  For the twelve  months  ended  December 31, 1998,
                    there  were  additional  sales  of  90.7211  Units  totaling
                    $117,210.  Proceeds  from the sale of  additional  Units are
                    used in the trading of commodity interests including futures
                    contracts, options and forward contracts.

                                       12
<PAGE>


Item 6. Selected Financial Data. Realized and unrealized trading gains (losses),
interest  income,  net income (loss) and increase  (decrease) in net asset value
per Unit for the years ended December 31, 2000,  1999,  1998,  1997 and 1996 and
total assets at December 31, 2000, 1999, 1998, 1997 and 1996 were as follows:

<TABLE>
<CAPTION>
<S>                                  <C>             <C>             <C>            <C>            <C>
                                  2000               1999            1998            1997          1996
                              -------------      -------------   -------------   ------------     -----------
Realized and unrealized trading
 gains(losses) net of brokerage
 commissions and clearing fees
 of $5,795,482,  $7,950,768,
 $8,540,127,   $9,893,999, and
 $10,754,060,
 respectively                $  (8,911,325)   $  (8,806,023)   $  11,635,004   $   5,083,043   $  23,283,977


Interest income                  4,241,957        4,687,547        5,203,988       6,331,875       6,631,110
                             -------------    -------------    -------------   -------------   -------------

                             $  (4,669,368)   $  (4,118,476)   $  16,838,992   $  11,414,918   $  29,915,087
                             =============    =============    =============   =============   =============

Net income (loss)            $  (7,766,838)   $  (9,063,470)   $   9,913,148   $   5,525,809   $  21,056,614
                             =============    =============    =============   =============   =============
Increase (decrease) in net
 asset value per unit       $      (89.14)   $      (94.66)   $       99.32   $       48.07   $      158.70
                             =============    =============    =============   =============   =============

Total assets                 $  83,024,864    $ 120,563,424    $ 146,464,780   $ 154,556,541   $ 178,462,215
                             =============    =============    =============   =============   =============

</TABLE>


                                       13
<PAGE>



Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations.
         (a)  Liquidity.  The  Partnership  does not engage in sales of goods or
services.  Its only  assets  are its  equity in its  commodity  futures  trading
account,  consisting of cash, net unrealized appreciation (depreciation) on open
positions and interest  receivable.  Because of the low margin deposits normally
required in commodity  trading,  relatively  small price movements may result in
substantial  losses to the Partnership.  Such substantial losses could lead to a
material decrease in liquidity.  To minimize this risk, the Partnership  follows
certain policies including:
         (1)  Partnership  funds are invested only in commodity  interests which
are traded in sufficient volume to permit, in the opinion of the Advisors,  ease
of taking and liquidating positions.
         (2)  The   Partnership   diversifies   its   positions   among  various
commodities.
         (3) No Advisor initiates  additional positions in any commodity if such
additional  positions  would result in aggregate  positions for all  commodities
requiring as margin more than 66-2/3% of the  Partnership's  assets allocated to
the Advisor.
         (4) The  Partnership may  occasionally  accept delivery of a commodity.
Unless such  delivery is disposed  of  promptly  by  retendering  the  warehouse
receipt  representing  the  delivery  to the  appropriate  clearing  house,  the
physical commodity position will be fully hedged.

                                       14
<PAGE>


         (5) The  Partnership  does not employ the  trading  technique  commonly
known as  "pyramiding,"  in which the  speculator  uses  unrealized  profits  on
existing positions as margin for the purchase or sale of additional positions in
the same or related commodities.
         (6) The  Partnership  does not  utilize  borrowings  except  short-term
borrowings if the Partnership  takes delivery of any cash  commodities.
         (7) The Advisor may, from time to time, employ trading  strategies such
as  spreads  or  straddles  on  behalf of the Partnership. The term "spread"  or
straddle"   describes  a  commodity  futures  trading  strategy   involving  the
simultaneous  buying and selling of futures  contracts on the same commodity but
involving different delivery dates or markets and in which the trader expects to
earn a profit from a widening or narrowing of the difference  between the prices
of the two contracts.
         The  Partnership  is party to financial  instruments  with  off-balance
sheet risk, including derivative financial  instruments and derivative commodity
instruments,  in the normal course of its business.  These financial instruments
may  include  forwards,  futures  and  options,  whose  value is  based  upon an
underlying  asset,  index,  or reference  rate, and generally  represent  future
commitments to exchange  currencies or cash flows,  or to purchase or sell other
financial  instruments  at specified  terms at specified  future dates.  Each of
these  instruments  is subject to various risks similar to those relating to the
underlying financial  instruments  including market and credit risk. The General
Partner monitors and controls the  Partnership's  risk exposure on a daily basis


                                       15
<PAGE>

through financial, credit and risk management monitoring systems and accordingly
believes that it has effective procedures for evaluating and limiting the credit
and  market  risks to which  the  Partnership  is  subject.  (See  also  Item 8.
Financial   Statements  and  Supplementary  Data.  for  further  information  on
financial instrument risk included in the notes to financial statements.)
         Other than the risks  inherent in commodity  trading,  the  Partnership
knows of no trends,  demands,  commitments,  events or uncertainties  which will
result  in or  which  are  reasonably  likely  to  result  in the  Partnership's
liquidity  increasing or decreasing in any material way. The Limited Partnership
Agreement  provides  that the  Partnership  will cease  trading  operations  and
liquidate  all open  positions  upon the  first to occur of the  following:  (i)
December 31, 2013; (ii) the vote to dissolve the Partnership by limited partners
owning more than 50% of the Units;  (iii)  assignment by the General  Partner of
all of its interest in the Partnership or withdrawal, removal, bankruptcy or any
other  event that causes the  General  Partner to cease to be a general  partner
under the New York Revised  Limited  Partnership  Act unless the  Partnership is
continued  as  described in the Limited  Partnership  Agreement;  (iv) net asset
value per Unit falls to less than $400 as of the end of any trading  day; or (v)
the  occurrence  of any event which shall make it unlawful for the  existence of
the Partnership to be continued.

                                       16
<PAGE>


         (b)  Capital  resources.  (i) The  Partnership  has  made  no  material
commitments for capital expenditures.
             (ii)   The   Partnership's   capital   consists   of  the   capital
contributions  of the  partners as  increased or decreased by gains or losses on
commodity trading,  and by expenses,  interest income,  redemptions of Units and
distributions of profits, if any. Gains or losses on commodity trading cannot be
predicted.  Market moves in  commodities  are  dependent  upon  fundamental  and
technical  factors  which the  Partnership  may or may not be able to  identify.
Partnership   expenses  will  consist  of,  among  other  things,   commissions,
management  fees and incentive  fees.  The level of these  expenses is dependent
upon the level of trading and the ability of the  Advisors to identify  and take
advantage of price movements in the commodity markets,  in addition to the level
of net assets maintained.  In addition, the amount of interest income payable by
SSB is dependent upon interest rates over which the Partnership has no control.
         No  forecast  can be made as to the level of  redemptions  in any given
period.  A limited  partner  may cause  all of his Units to be  redeemed  by the
Partnership  at the Net Asset Value  thereof as of the last day of each month on
ten days'  written  notice to the  General  Partner.  No fee will be charged for
redemptions.  For the year  ended  December  31,  2000,  23,914.7410  Units were
redeemed totaling $29,303,982. For the year ended December 31, 1999, 12,865.1295
Units were redeemed totaling $17,452,603.  For the year ended December 31, 1998,
13,724.6661 Units were redeemed totaling $17,507.358.

                                       17
<PAGE>

         The  Partnership  ceased  to  offer  Units  effective  April  1,  1996.
Additional  sales of 49.4149 Units totaling $61,337 for the year ending December
31, 2000 and 88.1293 Units  totaling  $120,344 for the year ending  December 31,
1999 and 90.7211 Units totaling  $117,210 for the year ending December 31, 1998,
represent  additional  Units  offered as the  differential  between the ordinary
brokerage  fee  and the  reduced  brokerage  fee to  existing  limited  partners
investing $1,000,000 or more.
         (c) Results of Operations.
     For the  year  ended  December  31,  2000,  the net  asset  value  per Unit
decreased  6.8% from  $1,303.09 to  $1,213.95.  For the year ended  December 31,
1999,  the net asset value per Unit  decreased 6.8% from $1,397.75 to $1,303.09.
For the year ended  December  31, 1998,  the net asset value per Unit  increased
7.6% from $1,298.43 to $1,397.75.
     The  Partnership  experienced  net  trading  losses  of  $3,115,843  before
commissions  and  expenses for the year ended  December  31,  2000.  Losses were
primarily attributable to the trading in currencies,  U.S. and non-U.S. interest
rates, grains, livestock, indices, metals and softs and were partially offset by
gains recognized in the trading of energy products
     The   Partnership   experienced  net  trading  losses  of  $855,255  before
commissions  and expenses in 1999.  Losses were  primarily  attributable  to the



                                       18
<PAGE>

trading of non-U.S. interest rates, metals, softs, livestock, indices and grains
and were  partially  offset by gains  recognized  in the trading of  currencies,
energy and U.S. interest rates
     The  Partnership  experienced  net  trading  gains  of  $20,175,131  before
commissions  and  expenses in 1998.  Gains were  primarily  attributable  to the
trading of  commodity  futures in U.S.  and non- U.S.  interest  rates,  energy,
livestock,  grains and currencies and were partially offset by losses recognized
in the trading of indices, softs and metals.
     Commodity markets are highly volatile.  Broad price  fluctuations and rapid
inflation  increase the risks involved in commodity  trading,  but also increase
the possibility of profit.  The profitability of the Partnership  depends on the
existence  of major  price  trends and the  ability of the  Advisors to identify
those price  trends  correctly.  Price  trends are  influenced  by,  among other
things,  changing  supply  and  demand  relationships,   weather,  governmental,
agricultural,   commercial  and  trade  programs  and  policies,   national  and
international  political and economic  events and changes in interest  rates. To
the extent that market trends exist and the Advisors are able to identify  them,
the Partnership expects to increase capital through operations
     (d) Operational Risk
     The Partnership is directly  exposed to market risk and credit risk,  which
arise in the normal course of its business activities. Slightly less direct, but
of critical  importance,  are risks  pertaining to  operational  and back office
support.  This is particularly  the case in a rapidly  changing and increasingly



                                       19
<PAGE>

global environment with increasing  transaction  volumes and an expansion in the
number and complexity of products in the marketplace.
Such risks include:
Operational/Settlement  Risk - the risk of financial  and  opportunity  loss and
legal liability attributable to operational problems, such as inaccurate pricing
of transactions,  untimely trade execution,  clearance and/or settlement, or the
inability to process large volumes of  transactions.  The Partnership is subject
to increased  risks with respect to its trading  activities  in emerging  market
securities,  where clearance,  settlement, and custodial risks are often greater
than  in  more  established  markets.
Technological Risk - the risk of loss attributable to technological  limitations
or hardware failure that constrain the Partnership's ability to gather, process,
and communicate information efficiently and securely,  without interruption,  to
customers,  among units  within the  Partnership,  and in the markets  where the
Partnership participates.
Legal/Documentation  Risk - the risk of loss attributable to deficiencies in the
documentation  of  transactions  (such  as  trade  confirmations)  and  customer
relationships  (such as master  netting  agreements)  or errors  that  result in
noncompliance with applicable legal and regulatory requirements.
Financial  Control  Risk - the  risk  of loss  attributable  to  limitations  in
financial  systems and controls.  Strong  financial  systems and controls ensure
that assets are safeguarded,  that  transactions are executed in accordance with
management's


                                       20
<PAGE>

authorization,  and  that  financial  information  utilized  by  management  and
communicated  to external  parties,  including  the  Partnership's  unitholders,
creditors, and regulators, is free of material errors.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Introduction
         The Partnership is a speculative  commodity pool. The market  sensitive
instruments held by it are acquired for speculative trading purposes, and all or
substantially all of the Partnership's assets are subject to the risk of trading
loss. Unlike an operating company,  the risk of market sensitive  instruments is
integral, not incidental, to the Partnership's main line of business.
         Market movements result in frequent changes in the fair market value of
the  Partnership's  open positions and,  consequently,  in its earnings and cash
flow. The Partnership's  market risk is influenced by a wide variety of factors,
including the level and volatility of interest  rates,  exchange  rates,  equity
price  levels,  the market value of financial  instruments  and  contracts,  the
diversification results among the Partnership's open positions and the liquidity
of the markets in which it trades.
         The  Partnership  rapidly  acquires and liquidates  both long and short
positions  in a wide  range of  different  markets.  Conse-  quently,  it is not
possible  to  predict  how a  particular  future  market  scenario  will  affect
performance,   and  the  Partnership's   past  performance  is  not  necessarily
indicative of its future results.


                                       21
<PAGE>

         Value at Risk is a measure of the maximum amount which the  Partnership
could  reasonably  be expected to lose in a given market  sector.  However,  the
inherent uncertainty of the Partnership's speculative trading and the recurrence
in the markets  traded by the  Partnership  of market  movements  far  exceeding
expectations could result in actual trading or non-trading losses far beyond the
indicated Value at Risk or the Partnership's  experience to date (i.e., "risk of
ruin").  In  light  of the  foregoing  as well as the  risks  and  uncertainties
intrinsic  to all  future  projections,  the  inclusion  of  the  quantification
included in this section should not be considered to constitute any assurance or
representation  that the  Partnership's  losses  in any  market  sector  will be
limited to Value at Risk or by the  Partnership's  attempts to manage its market
risk.
Quantifying the Partnership's Trading Value at Risk
                  The   following   quantitative   disclosures   regarding   the
Partnership's market risk exposures contain "forward-looking  statements" within
the meaning of the safe harbor from civil liability provided for such statements
by the Private  Securities  Litigation  Reform Act of 1995 (set forth in Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act



                                       22
<PAGE>

of  1934).  All  quantitative  disclosures  in this  section  are  deemed  to be
forward-looking statements for purposes of the safe harbor except for statements
of historical fact (such as the terms of particular  contracts and the number of
market risk  sensitive  instruments  held during or at the end of the  reporting
period).
         The Partnership's risk exposure in the various market sectors traded by
the  Advisors  is  quantified  below in  terms  of  Value  at  Risk.  Due to the
Partnership's  mark-to-market  accounting,  any  loss in the  fair  value of the
Partnership's open positions is directly reflected in the Partnership's earnings
(realized or unrealized).
         Exchange   maintenance  margin  requirements  have  been  used  by  the
Partnership as the measure of its Value at Risk. Maintenance margin requirements
are set by exchanges to equal or exceed the maximum losses  reasonably  expected
to be incurred in the fair value of any given contract in 95%-99% of any one-day
intervals.  The  maintenance  margin  levels  are  established  by  dealers  and
exchanges  using  historical  price  studies as well as an assessment of current
market  volatility  (including the implied  volatility of the options on a given
futures contract) and economic fundamentals to provide a probabilistic  estimate
of the maximum expected near-term one-day price fluctuation.  Maintenance margin
has been used rather than the more generally  available initial margin,  because
initial margin  includes a credit risk component  which is not relevant to Value
at Risk.
         In the case of market  sensitive  instruments  which  are not  exchange
traded  (almost  exclusively  currencies  in the case of the  Partnership),  the
margin requirements for the equivalent futures positions have been used as Value
at  Risk.  In those  rare  cases in  which a  futures-equivalent  margin  is not
available, dealers' margins have been used.



                                       23
<PAGE>

         The fair value of the Partnership's  futures and forward positions does
not have any  optionality  component.  However,  certain of the  Advisors  trade
commodity options. The Value at Risk associated with options is reflected in the
following  table  as the  margin  requirement  attributable  to  the  instrument
underlying each option. Where this instrument is a futures contract, the futures
margin,   and   where   this   instrument   is   a   physical   commodity,   the
futures-equivalent  maintenance  margin  has  been  used.  This  calculation  is
conservative in that it assumes that the fair value of an option will decline by
the same  amount as the fair value of the  underlying  instrument,  whereas,  in
fact,  the fair values of the options  traded by the  Partnership  in almost all
cases fluctuate to a lesser extent than those of the underlying instruments.
         In  quantifying  the   Partnership's   Value  at  Risk,  100%  positive
correlation  in the  different  positions  held in each market risk category has
been  assumed.  Consequently,  the margin  requirements  applicable  to the open
contracts have simply been added to determine each trading category's  aggregate
Value at Risk.  The  diversification  effects  resulting  from the fact that the
Partnership's positions are rarely, if ever, 100% positively correlated have not
been reflected.

                                       24
<PAGE>


The Partnership's Trading Value at Risk in Different Market Sectors
         The following table indicates the trading Value at Risk associated with
the Partnership's open positions by market category as of December 31, 2000. All
open position  trading risk exposures of the  Partnership  have been included in
calculating  the  figures  set  forth  below.  As  of  December  31,  2000,  the
Partnership's total capitalization was approximately $80,499,049.


<TABLE>
<CAPTION>
<S>                                              <C>         <C>             <C>         <C>
                                              December 31, 2000
                                                                              Year to Date
                                                           % of Total        High          Low
Market Sector                              Value at Risk  Capitalization       Value at Risk
-------------------------------------------------------------------------------------------------
Currencies
-Exchange Traded Contracts                   $1,036,320      1.29%        $2,346,347   $  211,754
-OTC Contracts                                  534,174      0.66%         3,722,194      534,174
Energy                                          794,200      0.99%         5,401,200      562,400
Grains                                           79,900      0.10%         1,183,900       17,150
Interest rates U.S.                             745,550      0.93%         2,104,984      197,900
Interest rates Non-U.S                        2,209,842      2.74%         6,211,403    1,114,191
Livestock                                        38,980      0.05%           115,375        9,600
Metals (Exchange Traded and OTC Contracts)      188,650      0.23%         1,916,625      188,650
Softs                                            64,500      0.08%         1,489,882       16,500
Indices                                       1,594,597      1.98%         2,703,115      358,641
                                            ----------   ----------
Total                                        $7,286,713      9.05%
                                            ==========   ==========
</TABLE>



                                       25
<PAGE>


     As of  December  31,  1999,  the  Partnership's  total  capitalization  was
approximately $117,508,532.



<TABLE>
<CAPTION>
<S>                                               <C>           <C>                <C>             <C>
                                                  December 31, 1999
                                                                                    Year to Date
                                                                % of Total         High            Low
Market Sector                                  Value at Risk   Capitalization   Value at Risk   Value at Risk
-------------------------------------------------------------------------------------------------------------
Currencies
-Exchange Traded Contracts                   $   856,142       0.73%            $ 1,118,598   $   466,987
-OTC Contracts                                 2,522,728       2.15%              4,861,168     2,444,372
Energy                                         2,287,500       1.95%              2,876,700     1,480,266
Grains                                           483,740       0.41%              1,348,250       274,200
Interest rates U.S.                            1,758,561       1.50%              2,272,250       640,040
Interest rates Non-U.S                         3,094,296       2.63%              6,249,718     1,651,106
Livestock                                         65,500       0.05%                131,750        30,400
Metals (Exchange Traded and OTC Contracts)     1,703,375       1.45%              2,498,700       516,800
Softs                                          1,308,505       1.11%              1,373,896       839,305
Indices                                        2,043,921       1.74%              3,609,182       831,151
                                             -----------   -----------
Total                                         $16,124,268      13.72%
                                             ===========   ===========
</TABLE>





                                       26
<PAGE>


Material Limitations on Value at Risk as an Assessment of Market Risk
         The face value of the market sector instruments held by the Partnership
is typically many times the applicable  maintenance margin  requirement  (margin
requirements  generally range between 2% and 15% of contract face value) as well
as, many times,  the  capitalization  of the  Partnership.  The magnitude of the
Partnership's  open  positions  creates a "risk of ruin" not typically  found in
most other investment  vehicles.  Because of the size of its positions,  certain
market  conditions -- unusual,  but historically  recurring from time to time --
could cause the  Partnership to incur severe losses over a short period of time.
The  foregoing  Value at Risk  table -- as well as the past  performance  of the
Partnership -- give no indication of this "risk of ruin." Non-Trading Risk
         The  Partnership  has  non-trading  market  risk  on its  foreign  cash
balances not needed for margin.  However,  these balances (as well as any market
risk they represent) are immaterial.
         Materiality  as used in this  section,  "Qualitative  and  Quantitative
Disclosures About Market Risk," is based on an assessment of reasonably possible
market movements and the potential losses caused by such movements,  taking into
account the leverage,  optionality and multiplier  features of the Partnership's
market sensitive instruments.

                                       27
<PAGE>


Qualitative Disclosures Regarding Primary Trading Risk Exposures
     The following  qualitative  disclosures  regarding the Partnership's market
risk  exposures  - except  for (i)  those  disclosures  that are  statements  of
historical fact and (ii) the  descriptions  of how the  Partnership  manages its
primary market risk exposures - constitute forward-looking statements within the
meaning of Section 27A of the  Securities  Act and Section 21E of the Securities
Exchange Act. The  Partnership's  primary  market risk  exposures as well as the
strategies  used and to be used by the  General  Partner  and the  Advisors  for
managing such exposures are subject to numerous uncertainties, contingencies and
risks, any one of which could cause the actual results of the Partnership's risk
controls to differ materially from the objectives of such strategies. Government
interventions,  defaults and expropriations,  illiquid markets, the emergence of
dominant fundamental factors,  political upheavals,  changes in historical price
relationships,  an influx of new market  participants,  increased regulation and
many  other  factors  could  result in  material  losses as well as in  material
changes to the risk exposures and the management  strategies of the Partnership.
There can be no assurance that the Partnership's  current market exposure and/or
risk  management  strategies  will  not  change  materially  or  that  any  such
strategies will be effective in either the short- or long- term.  Investors must
be  prepared  to  lose  all or  substantially  all of  their  investment  in the
Partnership.
         The  following   were  the  primary   trading  risk  exposures  of  the
Partnership as of December 31, 2000, by market sector.



                                       28
<PAGE>

         Interest Rates.  Interest rate risk is the principal market exposure of
the  Partnership.  Interest  rate  movements  directly  affect  the price of the
futures  positions held by the Partnership and indirectly the value of its stock
index and currency positions.  Interest rate movements in one country as well as
relative  interest  rate  movements  between  countries  materially  impact  the
Partnership's profitability. The Partnership's primary interest rate exposure is
to interest rate  fluctuations in the United States and the other G-7 countries.
However,  the Partnership also takes futures positions on the government debt of
smaller nations -- e.g.,  Australia.  The General Partner  anticipates  that G-7
interest rates will remain the primary market  exposure of the  Partnership  for
the foreseeable future.
         Currencies.  The  Partnership's  currency  exposure is to exchange rate
fluctuations,  primarily  fluctuations  which  disrupt  the  historical  pricing
relationships   between   different   currencies  and  currency   pairs.   These
fluctuations  are  influenced  by interest rate changes as well as political and
general  economic  conditions.  The General Partner does not anticipate that the
risk profile of the Partnership's  currency sector will change  significantly in
the future.  The currency  trading Value at Risk figure includes  foreign margin
amounts  converted into U.S.  dollars with an incremental  adjustment to reflect
the exchange rate risk inherent to the  dollar-based  Partnership  in expressing
Value at Risk in a functional currency other than dollars.


                                       29
<PAGE>

         Stock Indices.  The Partnership's  primary equity exposure is to equity
price  risk  in the  G-7  countries.  The  stock  index  futures  traded  by the
Partnership  are by law  limited  to futures on  broadly  based  indices.  As of
December 31, 2000,  the  Partnership's  primary  exposures were in the Financial
Times  (England),  Nikkei (Japan) and Hang Seng (Hong Kong) stock  indices.  The
Partnership  is primarily  exposed to the risk of adverse price trends or static
markets in the major U.S., European and Japanese indices.  (Static markets would
not cause major market  changes but would make it difficult for the  Partnership
to avoid being "whipsawed" into numerous small losses.)
         Metals.   The  Partnership's   primary  metal  market  exposure  is  to
fluctuations in the price of gold and silver.  Although  certain of the Advisors
will from time to time  trade base  metals  such as  aluminum  and  copper,  the
principal  market  exposures of the Partnership  have  consistently  been in the
precious metals,  gold and silver. The General Partner anticipates that gold and
silver will remain the primary metals market exposure for the Partnership.
         Softs.   The   Partnership's   primary   commodities   exposure  is  to
agricultural  price  movements  which are often  directly  affected by severe or
unexpected  weather  conditions.  Cocoa,  cotton  and  sugar  accounted  for the
substantial  bulk of the  Partnership's  commodity  exposure as of December  31,
2000.
         Energy.  The  Partnership's  primary energy market  exposure is to gas
and oil price  movements,  often  resulting from political  developments in the
Middle East. Oil prices can be volatile and substantial profits and losses have
been and are expected to continue to be experienced in this market.



                                       30
<PAGE>

Qualitative Disclosures Regarding Non-Trading Risk Exposure

         The  following  were  the  only   non-trading  risk  exposures  of  the
Partnership as of December 31, 2000.
         Foreign Currency Balances.  The Partnership's  primary foreign currency
balances are in Japanese yen, Euro dollar,  British pounds and Swiss francs. The
Advisor regularly converts foreign currency balances to dollars in an attempt to
control the Partnership's non-trading risk.
         Qualitative Disclosures Regarding Means of Managing Risk Exposure.
         The General  Partner  monitors  and  controls  the  Partnership's  risk
exposure  on a  daily  basis  through  financial,  credit  and  risk  management
monitoring systems and accordingly believes that it has effective procedures for
evaluating and limiting the credit and market risks to which the  Partnership is
subject.
         The General  Partner  monitors the  Partnership's  performance  and the
concentration of its open positions,  and consults with the Advisors  concerning
the Partnership's overall risk profile. If the General Partner felt it necessary
to do so, the General Partner could require certain of the Advisors to close out
individual  positions as well as enter certain positions traded on behalf of the
Partnership. However, any such intervention would be a highly unusual event. The
General  Partner  primarily  relies on the Advisors'  own risk control  policies
while maintaining a general  supervisory  overview of the  Partnership's  market
risk exposures.


                                       31
<PAGE>

         Each Advisor applies its own risk  management  policies to its trading.
The Advisors  often follow  diversification  guidelines,  margin limits and stop
loss points to exit a position.  The Advisors' research of risk management often
suggests ongoing modifications to their trading programs.
         As part of the General  Partner's risk management,  the General Partner
periodically  meets with the Advisors to discuss  their risk  management  and to
look for any material  changes to the  Advisors'  portfolio  balance and trading
techniques.  The  Advisors  are  required to notify the  General  Partner of any
material changes to their programs.

                                       32
<PAGE>


36

Item 8.    Financial Statements and Supplementary Data.




                   SMITH BARNEY DIVERSIFIED FUTURES FUND L.P.
                          INDEX TO FINANCIAL STATEMENTS


                                              Page
                                             Number

Oath of Affirmation                            F-2

Report of Independent Accountants              F-3

Financial Statements:
Statement of Financial Condition at
December 31, 2000 and 1999                     F-4

Statement of Income and Expenses
for the years ended December 31, 2000
1999 and 1998                                  F-5

Statement of Partners' Capital for
the years ended December 31, 2000,
1999 and 1998                                  F-6

Notes to Financial Statements                F-7 - F-11








                                       F-1



<PAGE>

                           To The Limited Partners of
                                  Smith Barney
                          Diversified Futures Fund L.P.

To the best of the  knowledge  and belief of the  undersigned,  the  information
contained herein is accurate and complete.





By:  Daniel A. Dantuono, Chief Financial Officer
     Smith Barney Futures Management LLC
     General Partner, Smith Barney
        Diversified Futures Fund L.P.

Smith Barney Futures Management LLC
388 Greenwich Street
7th Floor
New York, N.Y.  10013
212-723-5424

                              F-2

<PAGE>


                           Report of Independent Accountants

To the Partners of
   Smith Barney Diversified Futures Fund L.P.:

In our  opinion,  the  accompanying  statement of  financial  condition  and the
related  statements  of income and  expenses and of  partners'  capital  present
fairly,  in all  material  respects,  the  financial  position  of Smith  Barney
Diversified  Futures Fund L.P. at December 31, 2000 and 1999, and the results of
its  operations  for each of the three years in the period  ended  December  31,
2000, in conformity with accounting  principles generally accepted in the United
States of America.  These  financial  statements are the  responsibility  of the
management of the General Partner;  our  responsibility is to express an opinion
on these financial  statements  based on our audits.  We conducted our audits of
these  financial  statements in accordance  with  auditing  standards  generally
accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence  supporting the amounts and  disclosures  in the financial  statements,
assessing the accounting  principles used and significant  estimates made by the
management  of  the  General  Partner,  and  evaluating  the  overall  financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.


PricewaterhouseCoopers LLP
New York, New York
February 22, 2001

                              F-3
<PAGE>




                                     Smith Barney
                             Diversified Futures Fund L.P.
                           Statement of Financial Condition
                              December 31, 2000 and 1999


<TABLE>
<CAPTION>
<S>                                                                   <C>            <C>
                                                                    2000           1999
Assets:
Equity in commodity futures trading account:
   Cash  (Note 3c)                                              $ 78,497,039   $114,347,833
   Net unrealized appreciation on open positions                   4,215,703      5,310,783
   Commodity options owned, at market value
   (cost $0 and $663,996 in 2000 and 1999, respectively)                --          501,192
                                                                ------------   ------------

                                                                  82,712,742    120,159,808

  Interest receivable                                                312,122        403,616
                                                                ------------   ------------
                                                                $ 83,024,864   $120,563,424
                                                                ------------   ------------


Liabilities and Partners' Capital:
Liabilities:
  Accrued expenses:
   Commissions                                                  $    376,655   $    556,459
   Management fees                                                   159,510        326,697
   Incentive fees                                                    290,312           --
   Professional fees                                                  69,352        120,995
   Other                                                               6,388          7,571
  Redemptions payable (Note 5)                                     1,623,598      2,043,170
                                                                ------------   ------------
                                                                   2,525,815      3,054,892
                                                                ------------   ------------
Partners' capital (Notes 1, 5 and 6):
  General Partner, 2,048.9308 Unit equivalents outstanding
   in 2000 and 1999                                                2,487,300      2,669,941
  Limited Partners, 64,262.8850 and 88,128.2111 Units of
   Limited Partnership Interest outstanding in 2000 and 1999,
   respectively                                                   78,011,749    114,838,591
                                                                ------------   ------------
                                                                  80,499,049    117,508,532
                                                                ------------   ------------
                                                                $ 83,024,864   $120,563,424
                                                                ------------   ------------
</TABLE>


See notes to financial statements.

                              F-4
<PAGE>



                                     Smith Barney
                             Diversified Futures Fund L.P.
                           Statement of Income and Expenses
                                  for the years ended
                           December 31, 2000, 1999 and 1998


<TABLE>
<CAPTION>
                                                               2000              1999            1998
Income:
<S>                                                             <C>               <C>              <C>
  Net gains (losses) on trading of commodity interests:
   Realized gains (losses) on closed positions            $ (2,183,567)   $  3,152,375    $ 22,204,292
   Change in unrealized losses on open positions              (932,276)     (4,007,630)     (2,029,161)
                                                          ------------    ------------    ------------
                                                            (3,115,843)       (855,255)     20,175,131

  Less, Brokerage commissions including clearing fees
   of $267,538, $237,946 and $251,241, respectively
   (Note 3c)                                                (5,795,482)     (7,950,768)     (8,540,127)
                                                          ------------    ------------    ------------
  Net realized and unrealized gains (losses)                (8,911,325)     (8,806,023)     11,635,004
  Interest income                                            4,241,957       4,687,547       5,203,988
                                                          ------------    ------------    ------------
                                                            (4,669,368)     (4,118,476)     16,838,992
                                                          ------------    ------------    ------------

Expenses:

  Management fees (Note 3b)                                  2,741,877       4,128,925       4,049,675
  Incentive fees (Note 3b)                                     290,312         668,443       2,741,328
  Professional fees                                             27,264         123,075          83,791
  Other expenses                                                38,017          24,551          51,050
                                                          ------------    ------------    ------------
                                                             3,097,470       4,944,994       6,925,844
                                                          ------------    ------------    ------------

Net income (loss)                                         $ (7,766,838)   $ (9,063,470)   $  9,913,148
                                                          ------------    ------------    ------------

Net income (loss) per Unit of Limited
  Partnership Interest and General Partner Unit
  equivalent (Notes 1 and 6)                              $     (89.14)   $     (94.66)   $      99.32
                                                          ------------    ------------    ------------


</TABLE>

See notes to financial statements.

                              F-5
<PAGE>



                                     Smith Barney
                             Diversified Futures Fund L.P.
                            Statement of Partners' Capital
                                  for the years ended
                           December 31, 2000, 1999 and 1998

<TABLE>
<CAPTION>
<S>                                            <C>               <C>            <C>
                                               Limited            General
                                              Partners            Partner          Total

Partners' capital at December 31, 1997   $ 148,720,868    $   2,660,393    $ 151,381,261
Net income                                   9,709,648          203,500        9,913,148
Sale of 90.7211 Units of Limited
  Partnership Interest                         117,210             --            117,210
Redemption of 13,724.6661 Units of
  Limited Partnership Interest             (17,507,358)            --        (17,507,358)
                                         -------------    -------------    -------------
Partners' capital at December 31, 1998     141,040,368        2,863,893      143,904,261
Net loss                                    (8,869,518)        (193,952)      (9,063,470)
Sale of 88.1293 Units of Limited
  Partnership Interest                         120,344             --            120,344
Redemption of 12,865.1295 Units of
  Limited Partnership Interest             (17,452,603)            --        (17,452,603)
                                         -------------    -------------    -------------
Partners' capital at December 31, 1999     114,838,591        2,669,941      117,508,532
Net loss                                    (7,584,197)        (182,641)      (7,766,838)
Sale of 49.4149 Units of Limited
  Partnership Interest                          61,337             --             61,337
Redemption of 23,914.7410 Units of
  Limited Partnership Interest             (29,303,982)            --        (29,303,982)
                                         -------------    -------------    -------------
Partners' capital at December 31, 2000   $  78,011,749    $   2,487,300    $  80,499,049
                                         -------------    -------------    -------------
</TABLE>


See notes to financial statements.

                              F-6
<PAGE>



                                     Smith Barney
                             Diversified Futures Fund L.P.
                             Notes to Financial Statements


1.  Partnership Organization:

    Smith Barney Diversified  Futures Fund L.P. (the "Partnership") is a limited
    partnership  which was  organized  on August 13, 1993 under the  partnership
    laws of the  State of New York to  engage in the  speculative  trading  of a
    diversified  portfolio of commodity  interests  including futures contracts,
    options and forward  contracts.  The commodity  interests that are traded by
    the  Partnership  are volatile and involve a high degree of market risk. The
    Partnership was authorized to sell 300,000 Units during its initial offering
    period. Smith Barney Futures Management LLC acts as the general partner (the
    "General Partner") of the Partnership. The Partnership's commodity broker is
    Salomon  Smith  Barney  Inc.  ("SSB").  SSB is an  affiliate  of the General
    Partner.  The  General  Partner  is wholly  owned by  Salomon  Smith  Barney
    Holdings Inc.  ("SSBHI"),  which is the sole owner of SSB. SSBHI is a wholly
    owned subsidiary of Citigroup Inc.

    The General Partner and each limited partner share in the profits and losses
    of the Partnership in proportion to the amount of partnership interest owned
    by each except that no limited  partner shall be liable for  obligations  of
    the Partnership in excess of his initial capital  contribution  and profits,
    if any, net of distributions.

    The Partnership will be liquidated upon the first of the following to occur:
    December 31, 2013; the net asset value of a Unit decreases to less than $400
    as of the close of any  business  day;  or under  certain  circumstances  as
    defined in the Limited Partnership Agreement.

2.  Accounting Policies:

    a. All commodity interests (including  derivative financial  instruments and
       derivative  commodity  instruments)  are used for trading  purposes.  The
       commodity  interests  are recorded on trade date and open  contracts  are
       recorded in the  statement  of  financial  condition at fair value on the
       last business day of the year,  which  represents  market value for those
       commodity  interests for which market  quotations are readily  available.
       Investments in commodity interests  denominated in foreign currencies are
       translated into U.S. dollars at the exchange rates prevailing on the last
       business  day of  the  year.  Realized  gains  (losses)  and  changes  in
       unrealized  values on  commodity  interests  and foreign  currencies  are
       recognized  in the period in which the  contract is closed or the changes
       occur and are  included  in net gains  (losses)  on trading of  commodity
       interests.

    b. The  partnership  may purchase and write (sell)  options.  An option is a
       contract  allowing,  but not requiring,  its holder to buy (call) or sell
       (put) a specific or  standard  commodity  or  financial  instrument  at a
       specified price during a specified time period. The option premium is the
       total  price  paid or  received  for the option  contract.  When the fund
       writes an option,  the premium received is recorded as a liability in the
       statement of financial  condition  and marked to market  daily.  When the
       fund purchases an option, the premium paid is recorded as an asset in the
       statement of financial condition and marked to market daily.

    c. Income  taxes have not been  provided  as each  partner  is  individually
       liable for the taxes,  if any, on his share of the  Partnership's  income
       and expenses.

                              F-7

<PAGE>




    d.The  preparation  of financial  statements  in conformity  with  generally
      accepted  accounting  principles requires management to make estimates and
      assumptions  that affect the reported amounts of 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.

3.  Agreements:

    a. Limited Partnership Agreement:

     The Limited  Partnership  Agreement provides that the General Partner shall
     manage the business of the Partnership  and may make all trading  decisions
     for the Partnership.

    b. Management Agreements:

     The General Partner has entered into Management  Agreements with Campbell &
     Co.,  Inc.  ("Campbell"),  Bridgewater  Associates,  Inc.  ("Bridgewater"),
     Dominion Capital Management,  Inc. ("Dominion"),  Willowbridge  Associates,
     Inc.   ("Williowbridge")   and   Stonebrook   Structured   Products,   LLC.
     ("Stonebrook"),   (collectively,  the  "Advisors"),   registered  commodity
     trading advisors. The Advisors are not affiliated with one another, are not
     affiliated  with the General Partner or SSB and are not responsible for the
     organization  or operation of the  Partnership.  The  Partnership  will pay
     Campbell,  Dominion and Willowbridge a monthly  management fee equal to 1/6
     of 1% (2% per year) of Net Assets allocated to the Advisor as of the end of
     each month. Bridgewater will receive a monthly management fee equal to 5/48
     of 1% (1.25% per year) of month end Net Assets of the Partnership allocated
     to the Advisor as of the end of each month.  For the period January 1, 2000
     through  February 29, 2000,  Stonebrook  was paid a monthly  management fee
     equal to 1/16 of 1% (0.75% per year) of a fixed  notional  account  size of
     $75,000,000.  Effective  March 1, 2000,  Stonebrook  will receive a monthly
     management  fee equal to 1/20 of 1% (0.60% per year) of the fixed  notional
     account  size  determined  on a monthly  basis by the General  Partner.  In
     addition,  the  Partnership is obligated to pay each Advisor 20% of the New
     Trading Profits,  as defined in the Management  Agreements,  earned by each
     Advisor for the Partnership in each calendar  quarter.  Stonebrook does not
     receive an incentive  fee. For the period  January 1, 2000 through June 30,
     2000, the Partnership was obligated to pay John W. Henry & Company,  Inc. a
     monthly  management  fee equal to 1/3 of 1% (4% per year) and an  incentive
     fee payable  quarterly equal to 15% of the New Trading Profits,  as defined
     in the Management  Agreement.  John W. Henry and Company,  Inc. ("JWH") and
     Rabar Market Research,  Inc. were terminated as Advisors to the Partnership
     on  July  1,  2000.  Bridgewater  Associates,  Inc.  and  Dominion  Capital
     Management, Inc. were added as Advisors on that date.

   c. Customer Agreement

     The Partnership  has entered into a Customer  Agreement which provides that
     the Partnership  will pay SSB a monthly  brokerage fee equal to 11/24 of 1%
     (5.5% per year) of month-end Net Assets in lieu of brokerage commissions on
     a per trade basis.  Persons investing $1,000,000 or more will pay a reduced
     brokerage  fee of 7/24 of 1% of  month-end  Net  Assets  (3.5%  per  year),
     receiving  the  differential  between this reduced fee and 5.5% per year in
     the form of additional Units. SSB will pay a portion of brokerage

                              F-8
<PAGE>

       fees to its financial  consultants  who have sold Units in this offering.
       Brokerage fees will be paid for the life of the Partnership, although the
       rate at which such fees are paid may be changed. The Partnership will pay
       for National Futures Association ("NFA") fees, exchange,  clearing, user,
       give-up and floor  brokerage  fees. All of the  Partnership's  assets are
       deposited in the Partnership's  account at SSB. The Partnership's cash is
       deposited by SSB in segregated  bank  accounts to the extent  required by
       Commodity Futures Trading  Commission  regulations.  At December 31, 2000
       and 1999, the amount of cash held for margin  requirements was $8,447,742
       and  $18,616,389,  respectively.  SSB has  agreed to pay the  Partnership
       interest on 80% of the average  daily  equity  maintained  in cash in its
       account during each month at a 30-day U.S.  Treasury bill rate determined
       weekly by SSB based on the average  noncompetitive  yield on 3-month U.S.
       Treasury  bills  maturing  in 30 days from the date on which such  weekly
       rate is determined.  The Customer  Agreement  between the Partnership and
       SSB gives the  Partnership  the legal right to net  unrealized  gains and
       losses.  The Customer  Agreement may be terminated  upon notice by either
       party.

4.  Trading Activities:

    The Partnership was formed for the purpose of trading contracts in a variety
    of commodity  interests,  including  derivative  financial  instruments  and
    derivative commodity  instruments.  The results of the Partnership's trading
    activities are shown in the statement of income and expenses.

    All of the commodity interests owned by the Partnership are held for trading
    purposes.  The average fair value  during the years ended  December 31, 2000
    and 1999,  based on a monthly  calculation,  was $3,287,910 and  $6,571,306,
    respectively. The fair value of these commodity interests, including options
    thereon,  if  applicable,  at December 31, 2000 and 1999 was  $4,215,703 and
    $5,811,975, respectively, as detailed below.

                                                     Fair Market Value
<TABLE>
<CAPTION>
                                             December 31,   December 31,
                                                    2000           1999
<S>                                                  <C>            <C>
Currencies:
 -Exchange Traded Contracts                  $ 2,468,848    $   423,503
 -OTC Contracts                                  (30,488)       196,398
Energy                                           249,658      1,095,761
Grains                                            70,445         64,492
Interest Rates U.S.                              836,897      1,352,098
Interest Rates Non-U.S                           405,108        220,653
Livestock                                         42,390        (19,700)
Metals (Exchange Traded and OTC Contracts)        (5,315)       941,009
Softs                                             45,386        493,230
Indices                                          132,774      1,044,531
                                             -----------    -----------
Total                                        $ 4,215,703    $ 5,811,975
                                             -----------    -----------


</TABLE>

                              F-9

<PAGE>


5.  Distributions and Redemptions:

    Distributions of profits, if any, will be made at the sole discretion of the
    General  Partner  and at such times as the General  Partner  may  decide.  A
    limited partner may require the Partnership to redeem his Units at their Net
    Asset  Value  as of the last day of each  month  on 10 days'  notice  to the
    General Partner. No fee will be charged for redemptions.

6.  Net Asset Value Per Unit:

    Changes  in the net asset  value per Unit of  Partnership  interest  for the
    years ended December 31, 2000, 1999 and 1998 were as follows:

<TABLE>
<CAPTION>

                                                         2000         1999         1998
<S>                                                       <C>          <C>          <C>

   Net realized and unrealized
   gains (losses)                                $    (103.90)$     (92.07)$     115.88
   Interest income                                      54.09        48.30        47.60
   Expenses                                            (39.33)      (50.89)      (64.16)
                                                     ---------    ---------    ---------
   Increase (decrease) for year                        (89.14)      (94.66)       99.32
   Net asset value per Unit, beginning of year       1,303.09     1,397.75     1,298.43
                                                     ---------    ---------    ---------
   Net asset value per Unit, end of year         $   1,213.95 $   1,303.09 $   1,397.75
                                                     ---------    ---------    ---------

</TABLE>

7.  Financial Instrument Risks:

    The Partnership is party to financial  instruments  with  off-balance  sheet
    risk, including  derivative  financial  instruments and derivative commodity
    instruments,   in  the  normal  course  of  its  business.  These  financial
    instruments may include forwards,  futures and options, whose value is based
    upon an underlying asset,  index, or reference rate, and generally represent
    future commitments to exchange currencies or cash flows, to purchase or sell
    other financial instruments at specific terms at specified future dates, or,
    in the  case of  derivative  commodity  instruments,  to  have a  reasonable
    possibility to be settled in cash, through physical delivery or with another
    financial  instrument.  These  instruments  may be traded on an  exchange or
    over-the-counter  ("OTC").  Exchange traded instruments are standardized and
    include futures and certain option  contracts.  OTC contracts are negotiated
    between contracting  parties and include forwards and certain options.  Each
    of these instruments is subject to various risks similar to those related to
    the underlying  financial  instruments  including market and credit risk. In
    general,  the risks  associated  with OTC  contracts  are greater than those
    associated with exchange traded  instruments  because of the greater risk of
    default by the counterparty to an OTC contract.

    Market  risk is the  potential  for  changes  in the value of the  financial
    instruments  traded  by the  Partnership  due to market  changes,  including
    interest and foreign  exchange rate movements and  fluctuations in commodity
    or security prices.  Market risk is directly  impacted by the volatility and
    liquidity in the markets in which the related underlying assets are traded.

    Credit risk is the possibility that a loss may occur due to the failure of a
    counterparty  to perform  according to the terms of a contract.  Credit risk
    with respect to exchange traded instruments is reduced to the extent that an
    exchange or clearing organization acts as a counterparty to the transactions
    (see  table  in Note  4).  The  Partnership's  risk of loss in the  event of
    counterparty default is typically limited to the amounts recognized in the


                              F-10

<PAGE>

    statement  of financial  condition  and not  represented  by the contract or
    notional  amounts of the  instruments.  The  Partnership has credit risk and
    concentration  risk because the sole  counterparty or broker with respect to
    the Partnership's assets is SSB.

    The General Partner monitors and controls the Partnership's risk exposure on
    a daily  basis  through  financial,  credit and risk  management  monitoring
    systems,  and  accordingly  believes  that it has effective  procedures  for
    evaluating and limiting the credit and market risks to which the Partnership
    is  subject.   These  monitoring   systems  allow  the  General  Partner  to
    statistically analyze actual trading results with risk-adjusted  performance
    indicators  and  correlation  statistics.  In addition,  on-line  monitoring
    systems provide account analysis of futures,  forwards and options positions
    by sector,  margin  requirements,  gain and loss transactions and collateral
    positions.

    The   notional  or   contractual   amounts  of  these   instruments,   while
    appropriately not recorded in the financial  statements,  reflect the extent
    of the Partnership's involvement in these instruments. The majority of these
    instruments mature within one year of December 31, 2000. However, due to the
    nature of the Partnership's  business,  these instruments may not be held to
    maturity.

8.  Subsequent Events:

    On January 1, 2001 there were additional sales representing  1.8388 Units of
    Limited  Partnership  Interest  totaling  $2,232  and on  January  31,  2001
    additional  redemptions  representing  854.5653 Units of Limited Partnership
    Interest totaling $1,011,301.

     Bridgewater   Associates,   Inc.  was  terminated  as  an  Advisor  to  the
     Partnership on March 1, 2001. Winton Capital  Management and Graham Capital
     Management L.P. were added as Advisors to the Partnership on that date.

                              F-11





<PAGE>




Item 9.   Changes in and Disagreements with Accountants on Accounting and
          Financial Disclosure.
     During the last two fiscal  years and any  subsequent  interim  period,  no
independent  accountant who was engaged as the principal accountant to audit the
Partnership's financial statements has resigned or was dismissed.
                                    PART III
Item 10. Directors and Executive Officers of the Registrant.
     The Partnership has no officers or directors and its affairs are managed by
its General Partner,  Smith Barney Futures  Management LLC. At December 31, 2000
investment  decisions  were be made by  Campbell  & Company,  Inc.,  Bridgewater
Associates,  Inc., Dominion Capital Management,  Inc., Willowbridge Associatees,
Inc. and Stonebrook Structured Products, LLC (collectively the "Advisors").
Item 11.  Executive Compensation.
     The  Partnership  has no directors or officers.  Its affairs are managed by
Smith Barney Futures  Management LLC, its General Partner.  SSB, an affiliate of
the General  Partner,  is the commodity  broker for the Partnership and receives
brokerage  commissions for such services, as described under "Item 1. Business."
Brokerage  commissions  and clearing fees of $5,795,482 were earned for the year
ended  December 31, 2000.  Management  fees and incentive fees of $2,741,877 and
$290,312,  respectively, were earned by the Advisors for the year ended December
31, 2000.

                                       33
<PAGE>


Item 12.         Security Ownership of Certain Beneficial Owners and Management.
                 (a).  Security ownership of certain beneficial owners.
                 The Partnership  knows of no person who beneficially owns more
than 5% of the Units outstanding.
                 (b). Security  ownership of management.  Under the terms of the
Limited  Partnership  Agreement,  the  Partnership's  affairs are managed by the
General Partner.  The General Partner owns Units of general partnership interest
equivalent to 2,048.9308  Units  (3.19%) of Limited  Partnership  Interest as of
December 31, 2000.
                 (c).  Changes in control.   None.
Item 13.   Certain Relationship and Related Transactions.
                  Salomon Smith Barney Inc. and Smith Barney Futures  Management
LLC would be  considered  promoters  for purposes of item 404 (d) of  Regulation
S-K. The nature and the amounts of compensation  each promoter will receive from
the  Partnership  are set forth under "Item 1.  Business",  "Item 11.  Executive
Compensation," and "Item 8. Financial Statements and Supplementary Data."
                                     PART IV
Item 14.       Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
         (a) (1) Financial Statements:
                 Statement of Financial Condition at December 31, 2000 and 1999.

                                       34
<PAGE>


                          Statement  of Income and  Expenses for the years ended
                          December  31,  2000,  1999  and  1998.   Statement  of
                          Partners'  Capital  for the years ended  December  31,
                          2000, 1999 and 1998.
                    (2)  Financial Statement Schedules:  Financial Data Schedule
                         for the year ended December 31, 2000.
                    (3)  Exhibits
                    3.1  - Limited  Partnership  Agreement (filed as Exhibit 3.1
                         to the  Registration  Statement  on Form S-1  (File No.
                         33-75056 and incorporated herein by reference).
                    3.2  - Certificate of Limited Partnership of the Partnership
                         as filed in the office of the County  Clerk of New York
                         County on October 13, 1993 (filed as Exhibit 3.2 to the
                         Registration  Statement on Form S-1 (File No. 33-75056)
                         and incorporated herein by reference).
                    10.1-Customer  Agreement  between the  Partnership and Smith
                         Barney  (filed  as  Exhibit  10.1  to the  Registration
                         Statement   on  Form  S-1  (File  No.   33-75056)   and
                         incorporated herein by reference).
                    10.3-Escrow Instructions  relating to escrow of subscription
                         funds  (filed  as  Exhibit  10.3  to  the  Registration
                         Statement   on  Form  S-1  (File  No.   33-75056)   and
                         incorporated herein by reference).
                    10.5-Management   Agreement  among  the   Partnership,   the
                         General Partner and Campbell & Company,  Inc. (filed as
                         Exhibit 10.5 to the Registration  Statement on Form S-1
                         (File  No.   33-75056)  and   incorporated   herein  by
                         reference).




                                       35
<PAGE>

                    10.6-Management Agreement among the Partnership, the General
                         Partner and Colorado Commodity  Management Corp. (filed
                         as Exhibit 10.6 to the  Registration  Statement on Form
                         S-1  (File No.  33-75056)  and  incorporated  herein by
                         reference).
                    10.7-Management   Agreement  among  the   Partnership,   the
                         General  Partner  and  John W.  Henry &  Company,  Inc.
                         (filed as Exhibit 10.7 to the Registration Statement on
                         Form S-1 (File No. 33-75056) and incorporated herein by
                         reference).
                    10.8-Management Agreement among the Partnership, the General
                         Partner and Hyman Beck & Company (filed as Exhibit 10.8
                         to the  Registration  Statement  on Form S-1  (File No.
                         33-75056) and incorporated herein by reference).
                    10.9-Letter  dated May 19, 1994 from the General  Partner to
                         Colorado Commodities  Management Corp.  terminating the
                         Management Agreement
                         (previously filed)
                   10.10-Management  Agreement    among   the  Partnership,  the
                         General   Partner   and   Chesapeake    Capital   Corp.
                         (previously filed).
                   10.11-Letters extending Management  Agreements with John W.
                         Henry & Company, Inc., Hyman Beck & Company, Campbell &
                         Co.,  Inc. and  Chesapeake  Capital  Corp.  (previously
                         filed)



                                       36
<PAGE>

                    10.12-  Management  Agreement  among  the  Partnership,  the
                         General  Partner  and Abraham  Trading Co.  (previously
                         filed).
                    10.13-  Management  Agreement  among  the  Partnership,  the
                         General   Partner  and  Rabar  Market   Research   Inc.
                         (previously filed).
                    10.14-  Management  Agreement  among  the  Partnership,  the
                         General  Partner  and  AIS  Futures  Management,   Inc.
                         (previously filed).
                    10.15- Letter dated October 1, 1996 from the General Partner
                         to Hyman  Beck &  Company  terminating  the  Management
                         Agreement (previously filed).
                    10.16-  Management  Agreement  among  the  Partnership,  the
                         General  Partner and Telesis  Management Inc. (filed as
                         Exhibit  10.16  to the Form  10-K  for the  year  ended
                         December 31, 1997).
                    10.17-  Letter   terminating   Management   Agreement   with
                         Chesapeake Capital  Corporation (filed as Exhibit 10.17
                         to the Form 10-K for the year ended
                         December 31, 1997).
                    10.18- Letter terminating  Management Agreement with Abraham
                         Trading  Co.  (filed as Exhibit  10.18 to the Form 10-K
                         for the year ended December 31, 1997)
                    10.19-  Management   Agreement  among  the  Partnership  the
                         General Partner and Trendview  Management,  Inc. (filed
                         as Exhibit 10.19 to the Form 10-K for the
                          year ended December 31, 1997).


                                       37
<PAGE>

                    10.20- Letters extending Management Agreements with Campbell
                         & Co.,  Chesapeake  Capital  Corp.,  John  W.  Henry  &
                         Company Inc., AIS Futures  Management  L.L.C.,  Abraham
                         Trading Co. and Rabar Market  Research  Inc.  (filed as
                         Exhibit  10.20  to the Form  10-K  for the  year  ended
                         December 31, 1997).
                    10.21-  Letter  terminating  AIS  Futures  Management,  Inc.
                         (previously filed)
                    10.22-   Letter   terminating    Telesis   Management   Inc.
                         (previously filed).
                    10.23- Letters extending Management Agreements with Campbell
                         & Co.,  John W.  Henry &  Company  Inc.,  Rabar  Market
                         Research Inc. and Trendview Management Inc. (previously
                         filed).
                    10.24-  Management   Agreement  among  the  Partnership  the
                         General  Partner  and  Willowbridge  Associates,   Inc.
                         (filed as  Exhibit  10.24 to the Form 10-K for the year
                         ended December 31, 1999).
                    10.25-  Management   Agreement  among  the  Partnership  the
                         General Partner and Stonebrook Capital Management, Inc.
                         (filed as  Exhibit  10.25 to the Form 10-K for the year
                         ended December 31, 1999).



                                       38
<PAGE>


                    10.26- Letters extending Management Agreements with Campbell
                         & Co., Inc., John W. Henry & Company Inc., Rabar Market
                         Research Inc. and Trendview Management Inc. (previously
                         filed).

                    10.27- Letters  terminating  John W.  Henry & Company  Inc.,
                         Rabar Market  Research  Inc. and  Trendview  Management
                         Inc. (filed herein).

                    10.28-  Management  Agreement  among  the  Partnership,  the
                         General Partner and Bridgewater Associates, Inc. (filed
                         herein).

                    10.29-  Management  Agreement  among  the  Partnership,  the
                         General Partner and Dominion Capital  Management,  Inc.
                         (filed herein).

                    10.30- Letter extending Management  Agreements with Campbell
                         &  Co.,  Inc.,   Willowbridge   Associates,   Inc.  and
                         Stonebrook Structured Products, LLC (filed herein).

                  (b) Reports on 8-K:   None Filed.

                                       39
<PAGE>


     Supplemental  Information  To Be Furnished  With Reports Filed  Pursuant To
Section 15(d) Of The Act by  Registrants  Which Have Not  Registered  Securities
Pursuant To Section 12 Of the Act.




Annual Report to Limited Partners

                                       40
<PAGE>



                                   SIGNATURES

          Pursuant to the  requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934,  the Registrant has duly caused this annual report on Form
10-K to be signed on its behalf by the  undersigned,  thereunto duly authorized,
in the City of New York and State of New York on the 30th day of March 2001.


SMITH BARNEY DIVERSIFIED FUTURES FUND L.P.


By:       Smith Barney Futures Management LLC
          (General Partner)



By        /s/        David J. Vogel
          David J. Vogel, President & Director


          Pursuant to the  requirements of the Securities  Exchange Act of 1934,
this annual report on Form 10-K has been signed below by the  following  persons
in the capacities and on the date indicated.


/s/  David J. Vogel                                  /s/ Jack H. Lehman III
David J. Vogel                                       Jack H. Lehman III
Director, Principal Executive                        Chairman and Director
Officer and President



/s/ Michael R. Schaefer                              /s/    Daniel A. Dantuono
Michael R. Schaefer                                  Daniel A. Dantuono
Director                                             Treasurer, Chief Financial
                                                     Officer and Director



/s/ Daniel R. McAuliffe, Jr.                         /s/ Steve J. Keltz
Daniel R. McAuliffe, Jr.                             Steve J. Keltz
Director                                             Secretary and Director




/s/ Shelley Ullman
Shelley Ullman
Director
                                       41