PRUDENTIAL BACHE DIVERSIFIED FUTURES FUND L P - 10-Q Quarterly Report

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the quarter ended June 30, 2003

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

For the transition period from _______________________ to ______________________

Commission file number: 0-17592

PRUDENTIAL-BACHE DIVERSIFIED FUTURES FUND L.P.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)

Delaware 13-3464456
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)

One New York Plaza, 13th Floor, New York, New York
10292
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (212) 778-7866

N/A
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.

Indicate by check CK 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 _CK_ No __

Indicate by check CK whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes __ No _CK

Part I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PRUDENTIAL-BACHE DIVERSIFIED FUTURES FUND L.P.
(a limited partnership)
STATEMENTS OF FINANCIAL CONDITION
(Unaudited)

2

PRUDENTIAL-BACHE DIVERSIFIED FUTURES FUND L.P.
(a limited partnership)
CONDENSED SCHEDULES OF INVESTMENTS
(Unaudited)

3

PRUDENTIAL-BACHE DIVERSIFIED FUTURES FUND L.P.
(a limited partnership)
STATEMENTS OF OPERATIONS
(Unaudited)

STATEMENT OF CHANGES IN PARTNERS' CAPITAL
(Unaudited)

4

PRUDENTIAL-BACHE DIVERSIFIED FUTURES FUND L.P.
(a limited partnership)
NOTES TO FINANCIAL STATEMENTS
June 30, 2003
(Unaudited)
A. General

These financial statements have been prepared without audit. In the opinion
of Seaport Futures Management, Inc. (the 'General Partner'), the financial
statements contain all adjustments (consisting of only normal recurring
adjustments) necessary to state fairly the financial position of
Prudential-Bache Diversified Futures Fund L.P. (the 'Partnership') as of June
30, 2003 and December 31, 2002 and the results of its operations for the six and
three months ended June 30, 2003 and 2002. However, the operating results for
the interim periods may not be indicative of the results expected for the full
year.

Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been omitted. It is suggested that
these financial statements be read in conjunction with the financial statements
and notes thereto included in the Partnership's annual report on Form 10-K filed
with the Securities and Exchange Commission for the year ended December 31,
2002.

In February 2003, Prudential Financial, Inc. ('Prudential') and Wachovia
Corp. ('Wachovia') announced an agreement to combine each company's respective
retail securities brokerage and clearing operations within a new firm, which
will be headquartered in Richmond, Virginia. Under the agreement, Prudential
will have a 38% ownership interest in the new firm and Wachovia will own 62%.
The transaction, which includes the securities brokerage, securities clearing,
and debt capital markets operations of Prudential Securities Incorporated
('PSI'), but does not include the equity sales, trading and research operations
or commodity brokerage and derivative operations of PSI (which were renamed
Prudential Equity Group, Inc. upon closing), closed July 1, 2003. The Managing
Owner, as well as the commodity broker, will continue to be indirect wholly
owned subsidiaries of Prudential.

B. Related Parties

The General Partner and its affiliates perform services for the Partnership
which include, but are not limited to: brokerage services; accounting and
financial management; registrar, transfer and assignment functions; investor
communications, printing and other administrative services. A portion of the
general and administrative expenses of the Partnership for the six and three
months ended June 30, 2003 and 2002 was borne by Prudential Equity Group, Inc.
('PEG'), an affiliate of the General Partner, and its affiliates.

Costs and expenses charged to the Partnership for these services for the six
and three months ended June 30, 2003 and 2002 were:

For the six months For the three months
ended June 30, ended June 30,
--------------------- -----------------------
2003 2002 2003 2002
- -----------------------------------------------------------------------------
Commissions $365,261 $265,436 $185,283 $123,051
General and administrative 4,350 4,225 2,175 2,112
-------- -------- -------- --------
$369,611 $269,661 $187,458 $125,163
-------- -------- -------- --------
-------- -------- -------- --------

Expenses payable to the General Partner and its affiliates (which are
included in accrued expenses payable) as of June 30, 2003 and December 31, 2002
were $2,092 and $2,713, respectively.

The Partnership's assets are maintained either in trading or cash accounts
with PEG, the Partnership's commodity broker and an affiliate of the General
Partner, for margin purposes.

The Partnership, acting through its trading manager, may execute
over-the-counter, spot, forward and/or option foreign exchange transactions with
PEG. PEG then engages in back-to-back trading with an affiliate,
Prudential-Bache Global Markets Inc. ('PBGM'). PBGM attempts to earn a profit on
such transactions. PBGM keeps its prices on foreign currency competitive with
other interbank currency trading desks. All

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over-the-counter currency transactions are conducted between PEG and the
Partnership pursuant to a line of credit. PEG may require that collateral be
posted against the marked-to-market positions of the Partnership.

C. Derivative Instruments and Associated Risks

The Partnership is exposed to various types of risk associated with the
derivative instruments and related markets in which it invests. These risks
include, but are not limited to, risk of loss from fluctuations in the value of
derivative instruments held (market risk) and the inability of counterparties
to perform under the terms of the Partnership's investment activities (credit
risk).

Market risk

Trading in futures and forward contracts (including foreign exchange)
involves entering into contractual commitments to purchase or sell a particular
commodity at a specified date and price. The gross or face amount of the
contracts, which is typically many times that of the Partnership's net assets
being traded, significantly exceeds the Partnership's future cash requirements
since the Partnership intends to close out its open positions prior to
settlement. As a result, the Partnership is generally subject only to the risk
of loss arising from the change in the value of the contracts. As such, the
Partnership considers the 'fair value' of its derivative instruments to be the
net unrealized gain or loss on the contracts. The market risk associated with
the Partnership's commitments to purchase commodities is limited to the gross or
face amount of the contracts held. However, when the Partnership enters into a
contractual commitment to sell commodities, it must make delivery of the
underlying commodity at the contract price and then repurchase the contract at
prevailing market prices or settle in cash. Since the repurchase price to which
a commodity can rise is unlimited, entering into commitments to sell commodities
exposes the Partnership to unlimited risk.

Market risk is influenced by a wide variety of factors including government
programs and policies, political and economic events, the level and volatility
of interest rates, foreign currency exchange rates, the diversification effects
among the derivative instruments the Partnership holds and the liquidity and
inherent volatility of the markets in which the Partnership trades.

Credit risk

When entering into futures or forward contracts, the Partnership is exposed
to credit risk that the counterparty to the contract will not meet its
obligations. The counterparty for futures contracts traded on United States and
most foreign futures exchanges is the clearinghouse associated with the
particular exchange. In general, clearinghouses are backed by their corporate
members who are required to share any financial burden resulting from the
nonperformance by one of their members and, as such, should significantly reduce
this credit risk. In cases where the clearinghouse is not backed by the clearing
members (i.e., some foreign exchanges), it is normally backed by a consortium of
banks or other financial institutions. On the other hand, there is concentration
risk on forward transactions entered into by the Partnership as PEG, the
Partnership's commodity broker, is the sole counterparty. The Partnership has
entered into a master netting agreement with PEG and, as a result, presents
unrealized gains and losses on open forward positions as a net amount in the
statements of financial condition. The amount at risk associated with
counterparty nonperformance of all of the Partnership's contracts is the net
unrealized gain included in the statements of financial condition; however,
counterparty non-performance on only certain of the partnership contracts may
result in greater loss than non-performance on all of the Partnership contracts.
There can be no assurance that any counterparty, clearing member or
clearinghouse will meet its obligations to the Partnership.

The General Partner attempts to minimize both credit and market risks by
requiring the Partnership and its trading manager to abide by various trading
limitations and policies. The General Partner monitors compliance with these
trading limitations and policies which include, but are not limited to:
executing and clearing all trades with creditworthy counterparties; limiting the
amount of margin or premium required for any one commodity or all commodities
combined; and generally limiting transactions to contracts which are traded in
sufficient volume to permit the taking and liquidating of positions.
Additionally, pursuant to the advisory agreement among the Partnership, the
General Partner and the trading manager, the General Partner has the right,
among other rights, to terminate the trading manager if the net asset value
allocated to the trading manager declines by 50% from the value at the beginning
of any year or 40% since the commencement of trading activities. Furthermore,
the Partnership Agreement provides that the Partnership

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will liquidate its positions, and eventually dissolve, if the Partnership
experiences a decline in the net asset value to less than 50% of the value at
commencement of trading activities. In each case, the decline in net asset value
is after giving effect for distributions and redemptions. The General Partner
may impose additional restrictions (through modifications of trading limitations
and policies) upon the trading activities of the trading manager as it, in good
faith, deems to be in the best interests of the Partnership.

PEG, when acting as the Partnership's futures commission merchant in
accepting orders for the purchase or sale of domestic futures and options
contracts, is required by Commodity Futures Trading Commission ('CFTC')
regulations to separately account for and segregate as belonging to the
Partnership all assets of the Partnership relating to domestic futures and
options trading and is not allowed to commingle such assets with other assets of
PEG. At June 30, 2003, such segregated assets totalled $6,802,938. Part 30.7 of
the CFTC regulations also requires PEG to secure assets of the Partnership
related to foreign futures and options trading which totalled $2,420,532 at June
30, 2003. There are no segregation requirements for assets related to forward
trading.

As of June 30, 2003, all of the Partnership's open futures and forward
contracts mature within one year.

D. Financial Highlights

These financial highlights represent the overall results of the Partnership
during the six and three month periods ended June 30, 2003 and 2002,
respectively. An individual Partner's actual results may differ depending on
the timing of redemptions.
7

PRUDENTIAL-BACHE DIVERSIFIED FUTURES FUND L.P.
(a limited partnership)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

The Partnership commenced operations on October 19, 1988 with gross proceeds
of $30,107,800. After accounting for organizational and offering costs, the
Partnership's net proceeds were $29,387,470.

At June 30, 2003, 100% of the Partnership's total net assets was allocated to
commodities trading. A significant portion of the net asset value was held in
U.S. Treasury bills (which represented approximately 75% of the net asset value
prior to redemptions payable) and cash, which are used as margin for the
Partnership's trading in commodities. Inasmuch as the sole business of the
Partnership is to trade in commodities, the Partnership continues to own such
liquid assets to be used as margin.

The percentage that U.S. Treasury bills bears to the total net assets varies
each day, and from month to month, as the market values of commodity interests
change. The balance of the net assets is held in the Partnership's commodity
trading accounts. All interest earned on the Partnership's interest-bearing
funds is paid to the Partnership.

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

Since the Partnership's business is to trade futures and forward contracts,
its capital is at risk due to changes in the value of these contracts (market
risk) or the inability of counterparties to perform under the terms of the
contracts (credit risk). The Partnership's exposure to market risk is influenced
by a number of factors including the volatility of interest rates and foreign
currency exchange rates, the liquidity of the markets in which the contracts are
traded and the relationships among the contracts held. The inherent uncertainty
of the Partnership's speculative trading as well as the development of drastic
market occurrences could result in monthly losses considerably beyond the
Partnership's experience to date and could ultimately lead to a loss of all or
substantially all of investors' capital. The General Partner attempts to
minimize these risks by requiring the Partnership and its trading manager to
abide by various trading limitations and policies, which include limiting margin
amounts, trading only in liquid markets and permitting the use of stop loss
provisions. See Note C to the financial statements for a further discussion of
the credit and market risks associated with the Partnership's futures and
forward contracts.

Redemptions by limited partners were $417,334 and $223,650 for the six and
three months ended June 30, 2003, respectively, and General Partner redemptions
for the six and three months ended June 30, 2003, totalled $4,121 and $1,539,
respectively. Redemptions recorded from commencement of operations (October 19,
1988) through June 30, 2003 totalled $51,721,508 and $1,126,760 for the limited
partners and General Partner, respectively. Limited partners may redeem units as
of the last business day of any calendar quarter at the then current net asset
value per Unit. Future redemptions will impact the amount of funds available for
investment in commodity contracts in subsequent periods.

The Partnership does not have, nor does it expect to have, any capital
assets.

Results of Operations

The net asset value per Unit as of June 30, 2003 was $512.96, an increase of
13.91% from the December 31, 2002 net asset value per Unit of $450.33 and a
decrease of 0.68% from the March 31, 2003 net asset value per Unit of $516.49.
Past performance is not necessarily indicative of future results.

The Partnership's trading gains before commissions were $1,605,000 and
$173,000 during the six and three months ended June 30, 2003, respectively,
compared to gains of $1,466,000 and $2,083,000 for the

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corresponding periods in the prior year. Due to the nature of the Partnership's
trading activities, a period to period comparison of its trading results is not
meaningful. However, a detailed discussion of the Partnership's current quarter
trading results is presented below.

Quarterly Market Overview

In the U.S., the beginning of the second quarter of 2003 saw few signs of
relief from a sluggish economy with a growth rate of 2.4 percent. Nominal GDP
continued to trend downward in hand with falling consumer and producer prices
and interest rates. Concerns about the slump in American telecom and internet
industries, accounting fraud and the largest budget deficit the U.S. has ever
faced have hampered investments in the U.S. Despite resolution to the war in
Iraq, consumer and business confidence remained tepid. Companies desiring to
improve profits remained unwilling to make big capital spending commitments or
increase their workforces and inventories. Orders to U.S. factories for
big-ticket items and production figures fell in April. In June, the unemployment
rate jumped to a nine-year high of 6.4 percent. Payroll slashes in manufacturing
and information industries generated the greatest job losses. As companies
attempted to do more with leaner workforces, overall productivity rose and
provided support for household income. The rise in income, combined with low
interest rates, reduced taxes, and availability of substantial home equity
spurred gains in consumer spending and increased sales of new homes. Toward the
end of the quarter, manufacturing rose slightly, but still indicated that the
sector shrank for the fourth straight month. Meanwhile, new orders for durable
goods, machinery, automobiles, electrical equipment, home supplies and computers
increased, reversing previous downward trends.

Global economies remained weak in the second quarter of 2003 and were further
hampered by the decline of the U.S. dollar which made overseas goods more
expensive, thus, curtailing demand. In May, Germany, Italy and the Netherlands
reported an unexpected contraction in their economies during the first three
months of the year with Germany and Netherlands experiencing a second quarter of
negative growth. The European Union stated that overall economic growth had
stalled and consequently, applied pressure on the central banks to ease interest
rates. Business investment dropped sharply while domestic demand remained bleak.
The Japanese economy continued to stumble as other Asian economies began to
recover from the effects of the SARS outbreak. Furthermore, fears of deflation
loomed over already troubled global economies.

Indices: Despite economic data indicating the worst is not yet over, global
equity markets surged in the second quarter of 2003. Spurred by the easing of
geopolitical tensions, massive short covering, excess liquidity, some positive
first quarter earnings reports, and optimism that economic recovery is near,
investors flocked toward equities. A rally in Japanese stocks was fueled
primarily by foreign mutual funds, hedge funds and other non-Japanese
institutional investors who invested more than ten times as much as local
investors in June. The Japanese Nikkei, London FTSE, Dow Jones Industrial
Average, NASDAQ and S&P 500 all ended the quarter higher.

Interest rates: Fixed income markets in May witnessed a drop in interest
rates of developed countries due to the U.S. Federal Reserve (the 'Fed')
deflation talk as well as institutions and hedge funds borrowing to purchase
longer maturities, possible Fed purchases of longer maturities, hedging by
mortgage investors as rates fell, and central banks buying dollars and investing
in Treasuries. The decline in interest rates led to gains in German, Japanese,
U.S. Treasury and Eurodollar bond prices. In June, the market reacted with
disappointment to the Fed's quarter-point cut in short-term interest rates and
as a result, intermediate and long-term rates rose. Investors in Japan moved
capital into the equity markets at the expense of U.S. Treasury and Japanese
bonds. Concern about deteriorating public finances in most large economies and a
renewed interest in equities in hopes of an economic recovery resulted in
falling bond prices through the quarter and the subsequent rising of long-term
rates.

Currencies: In the foreign exchange markets, the U.S. dollar moved sharply
lower against most major currencies during the quarter. Investors shifted their
focus from the war in Iraq to concerns about U.S. economic health with its
widening current account deficit and lower relative interest rate resulting in
the dollar's three-year low against the Canadian and Australian dollar and
four-year low against the Euro. The reversal of the U.S.'s strong dollar policy
by Treasury Secretary Snow led to a further sell off of the greenback leading to
a 4.5-year low against the Swiss franc.

Energies: Energy price declines began in March and continued as the war in
Iraq became inevitable. Because supplies were secured and unthreatened by the
war, the prices of crude oil, unleaded gasoline and

9

London gas oil were down in April of 2003. Natural gas prices were largely
unaffected by events in the Middle East, Nigeria and Venezuela. In order to
stave off the declining prices and correct an oversupply as crude demand reached
a seasonal low, OPEC members agreed to cut current output by seven percent in
April. Toward the end of the quarter, energy prices, in general, were higher due
to Nigeria's general worker's strike, low U.S. oil inventory levels and
expectations of U.S. economic growth.

Quarterly Partnership Performance

The following is a summary of performance for the major sectors in which the
Partnership traded:

Currencies (+): The U.S. dollar fell against many foreign currencies amid
concerns of a weak U.S. economy. Long Australian dollar/U.S. dollar and
euro/U.S. dollar cross-rate positions resulted in net gains.

Interest rates (+): Weak global economies, fears of deflation and renewed
interest in equities resulted in falling global bond prices. Short U.S. Treasury
and European bond positions led to net gains.

Indices (+): Long positions in the NASDAQ, Japanese Nikkei Dow and German DAX
indices led to net gains as global equity markets rose throughout the quarter.

Metals (-): The falling U.S. dollar spurred speculative buying and consumer
interest resulting in rising gold prices. Short positions in gold resulted in
net losses. Declines in manufacturing resulted in falling base metal prices.
Positions in aluminum and copper resulted in net losses.

Softs (-): The cocoa market saw increased production and price volatility
throughout the quarter with long positions resulting in net losses. Higher
global productions resulted in decreasing coffee prices and a net loss in long
coffee positions.

Energies (-): Nigeria's general worker's strike, low U.S. oil inventory
levels and expectation of economic growth led to rising energy prices toward the
end of the quarter. Positions in light crude oil and heating oil resulted in net
losses.

Grains (-): Corn and wheat prices continued to decline due to ideal weather
conditions and a strong harvest resulting in net losses for long positions.

Interest income is earned on the Partnership's investment in U.S. Treasury
bills and varies monthly according to interest rates, as well as the effect of
trading performance and redemptions on the level of interest-bearing funds.
Interest income from U.S. Treasury bills decreased by $10,000 and $5,000 for the
six and three months ended June 30, 2003 as compared to the corresponding period
in 2002, respectively. These declines in interest income were principally due to
lower interest rates during the six and three months ended June 30, 2003 versus
the corresponding periods in 2002. These declines were partially offset by
higher overall investment in U.S. Treasury bills primarily due to the effect of
favorable trading performance during 2002 and the first half of 2003 on the
monthly net asset values, which in turn was offset, in part, by the effect of
redemptions on the monthly net asset values.

Commissions paid to PEG are calculated on the Partnership's net asset value
on the first day of each month and, therefore, vary monthly according to trading
performance and redemptions. Commissions increased by $100,000 and $62,000 for
the six and three months ended June 30, 2003 as compared to the corresponding
periods in 2002, respectively. These increases were primarily due to the effect
of favorable trading performance (offset, in part, by redemptions) during 2002
and the first half of 2003 on the monthly net asset values.

All trading decisions for the Partnership are made by John W. Henry &
Company, Inc. (the 'Trading Manager'). Management fees are calculated on the
Partnership's net asset value as of the end of each month and, therefore, are
affected by trading performance and redemptions. Management fees increased by
$26,000 and $13,000 for the six and three months ended June 30, 2003 as compared
to the corresponding periods in 2002, respectively. These increases were
primarily due to fluctuations in monthly net asset values as further discussed
above.

Incentive fees are based on the 'New High Net Trading Profits' generated by
the Trading Manager, as defined in the advisory agreement among the Partnership,
the General Partner and the Trading Manager. Incentive fees incurred for the six
months ended June 30, 2003 totalled $23,000. No incentive fees were incurred
during the three months ended June 30, 2003 and the six months ended June 30,
2002.
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General and administrative expenses include audit, tax and legal fees as well
as printing and postage costs. General and administrative expenses for the six
and three months ended June 30, 2003 were relatively comparable to the
corresponding periods in 2002.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, the General Partner
carried out an evaluation, under the supervision and with the participation of
the officers of the General Partner, including the General Partner's chief
executive officer and chief financial officer, of the effectiveness of the
design and operation of the Partnership's disclosure controls and procedures.
Based upon that evaluation, the General Partner's chief executive officer and
chief financial officer concluded that the Partnership's disclosure controls and
procedures are effective.
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PART II. OTHER INFORMATION

Item 1. Legal Proceedings--There are no material legal proceedings pending by
or against the Registrant or the General Partner.

Item 2. Changes in Securities--None

Item 3. Defaults Upon Senior Securities--None

Item 4. Submission of Matters to a Vote of Security Holders--None

Item 5. Other Information--Effective May 2003, Ronald J. Ivans was elected by
the Board of Directors of Prudential Securities Futures Management, Inc.
as Chief Financial Officer and Treasurer replacing Steven Weinreb.

Item 6. (a) Exhibits

4.1 Agreement of Limited Partnership of the Registrant, dated as of
May 25, 1988 as amended and restated as of July 12, 1988
(incorporated by reference to Exhibit 3.1 and 4.1 of
Registrant's Annual Report on Form 10-K for the period ended
December 31, 1988)

4.2 Subscription Agreement (incorporated by reference to
Exhibit 4.2 to the Registrant's Registration Statement on
Form S-1, File No. 33-22100)

4.3 Request for Redemption (incorporated by reference to
Exhibit 4.3 to the Registrant's Registration
Statement on Form S-1, File No. 33-22100)

31.1-- Certification pursuant to Exchange Act Rules
13a-14 and 15d-14 (filed herewith)

31.2-- Certification pursuant to Exchange Act
Rules 13a-14 and 15d-14 (filed herewith)

32.1-- Certification pursuant to 18
U.S.C. Section 1350 as adopted
pursuant to Section 906 of the
SARBANES-OXLEY Act of 2002
(furnished herewith)

32.2-- Certification pursuant to 18
U.S.C. Section 1350 as
adopted pursuant to Section
906 of the SARBANES-OXLEY Act
of 2002 (furnished herewith)

(b) Reports on Form 8-K--None

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

PRUDENTIAL-BACHE DIVERSIFIED FUTURES FUND L.P.

By: Seaport Futures Management, Inc.
A Delaware corporation, General Partner

By: /s/ Ronald J. Ivans Date: August 14, 2003
----------------------------------------
Ronald J. Ivans
Chief Financial Officer
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