WITTER DEAN DIVERSIFIED FUTURES FUND LP - 10-Q Quarterly Report

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

FORM 10-Q

[X] Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 2002 or

[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to__________________

Commission File Number 0-23577

DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP

(Exact name of registrant as specified in its charter)

Delaware 13-3461507
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

Demeter Management Corporation
c/o Managed Futures Department
825 Third Avenue, 8th Fl., New York, NY 10022
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (201) 209-8400

(Former name, former address, and former fiscal year, if changed
since last report)

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___________

DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP

INDEX TO QUARTERLY REPORT ON FORM 10-Q

June 30, 2002

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP
STATEMENTS OF FINANCIAL CONDITION

DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(Unaudited)

DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS
(Unaudited)

-
DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Six Months Ended June 30, 2002 and 2001
(Unaudited)

DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Unaudited)

DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS

June 30, 2002

(Unaudited)

The unaudited financial statements contained herein include, in
the opinion of management, all adjustments necessary for a fair
presentation of the results of operations and financial condition
of Dean Witter Diversified Futures Fund Limited Partnership (the
"Partnership"). The financial statements and condensed notes
herein should be read in conjunction with the Partnership's
December 31, 2001 Annual Report on Form 10-K.

1. Organization
Dean Witter Diversified Futures Fund Limited Partnership is a
Delaware limited partnership organized to engage primarily in the
speculative trading of futures contracts and forward contracts on
physical commodities and other commodity interests, including
foreign currencies, financial instruments, metals, energy products
and agriculturals.

The general partner for the Partnership is Demeter Management
Corporation ("Demeter"). The non-clearing commodity broker is
Morgan Stanley DW Inc. ("Morgan Stanley DW"). The clearing
commodity brokers are Morgan Stanley & Co., Inc. ("MS & Co.") and
Morgan Stanley & Co. International Limited ("MSIL"). The trading

DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

manager is Morgan Stanley Futures & Currency Management Inc.
("MSFCM" or the "Trading Manager"). Demeter, Morgan Stanley DW,
MS & Co., MSIL and MSFCM are wholly-owned subsidiaries of Morgan
Stanley.

Effective June 20, 2002, Morgan Stanley Dean Witter & Co. changed
its name to Morgan Stanley.

2. Related Party Transactions
The Partnership's cash is on deposit with Morgan Stanley DW, MS &
Co. and MSIL in futures and forwards trading accounts to meet
margin requirements as needed. Morgan Stanley DW pays interest on
these funds based on a prevailing rate on U.S. Treasury bills.
The Partnership pays brokerage commissions to Morgan Stanley DW.
Management fees and incentive fees, if any, incurred by the
Partnership are paid to MSFCM.

3. Financial Instruments
The Partnership trades futures contracts and forward contracts on
physical commodities and other commodity interests, including
foreign currencies, financial instruments, metals, energy and
agricultural products. Futures and forwards represent contracts
for delayed delivery of an instrument at a specified date and

DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

price. Risk arises from changes in the value of these contracts
and the potential inability of counterparties to perform under the
terms of the contracts. There are numerous factors which may
significantly influence the market value of these contracts,
including interest rate volatility.

The market value of contracts is based on closing prices quoted by
the exchange, bank or clearing firm through which the contracts
are traded.

The Partnership's contracts are accounted for on a trade-date
basis and marked to market on a daily basis. The Partnership
accounts for its derivative investments in accordance with the
provisions of Statement of Financial Accounting Standard No. 133,
"Accounting for Derivative Instruments and Hedging Activities"
("SFAS No. 133"). SFAS No. 133 defines a derivative as a
financial instrument or other contract that has all three of the
following characteristics:

1) One or more underlying notional amounts or payment
provisions;
2) Requires no initial net investment or a smaller initial net
investment than would be required relative to changes in
market factors;

DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

3) Terms require or permit net settlement.

Generally derivatives include futures, forward, swaps or options
contracts and other financial instruments with similar
characteristics such as caps, floors and collars.

The net unrealized gains (losses) on open contracts, reported as a
component of "Equity in futures interests trading accounts" on the
statements of financial condition and their longest contract
maturities were as follows:

Net Unrealized Gains (Losses)
on Open Contracts Longest Maturities

Exchange- Off-Exchange- Exchange- Off-Exchange-
Date Traded Traded Total Traded Traded
$ $ $

Jun. 30, 2002 4,297,072 9,124,231 13,421,303 Mar. 2004 Sep. 2002
Dec. 31, 2001 (450,218) (458,904) (909,122) Jun. 2003 Apr. 2002

The Partnership has credit risk associated with counterparty non-
performance. The credit risk associated with the instruments in
which the Partnership is involved is limited to the amounts
reflected in the Partnership's statements of financial condition.

DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The Partnership also has credit risk because Morgan Stanley DW, MS
& Co., and MSIL act as the futures commission merchants or the
counterparties, with respect to most of the Partnership's assets.
Exchange-traded futures contracts are marked to market on a daily
basis, with variations in value settled on a daily basis. Each of
Morgan Stanley DW, MS & Co. and MSIL, as a futures commission
merchant for the Partnership's exchange-traded futures contracts,
are required, pursuant to regulations of the Commodity Futures
Trading Commission ("CFTC"), to segregate from their own assets,
and for the sole benefit of their commodity customers, all funds
held by them with respect to exchange-traded futures contracts,
including an amount equal to the net unrealized gains(losses) on
all open futures contracts, which funds, in the aggregate, totaled
$81,588,712 and $80,423,880 at June 30, 2002 and December 31,
2001, respectively. With respect to the Partnership's off-
exchange-traded forward currency contracts, there are no daily
settlements of variations in value nor is there any requirement
that an amount equal to the net unrealized gains(losses) on open
forward contracts be segregated. With respect to those off-
exchange-traded forward currency contracts, the Partnership is at
risk to the ability of MS & Co., the sole counterparty on all of
such contracts, to perform. The Partnership has a netting
agreement with MS & Co. This agreement, which seeks to reduce

DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)

both the Partnership's and MS & Co.'s exposure on off-exchange-
traded forward currency contracts, should materially decrease the
Partnership's credit risk in the event of MS & Co.'s bankruptcy or
insolvency.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Liquidity - The Partnership deposits its assets with Morgan
Stanley DW as non-clearing broker and MS & Co. and MSIL as
clearing brokers in separate futures and forwards trading accounts
established for the Trading Manager, which assets are used as
margin to engage in trading. The assets are held in either non-
interest bearing bank accounts or in securities and instruments
permitted by the CFTC for investment of customer segregated or
secured funds. The Partnership's assets held by the commodity
brokers may be used as margin solely for the Partnership's
trading. Since the Partnership's sole purpose is to trade in
futures and forwards, it is expected that the Partnership will
continue to own such liquid assets for margin purposes.

The Partnership's investment in futures and forwards may, from
time to time, be illiquid. Most U.S. futures exchanges limit
fluctuations in prices during a single day by regulations referred
to as "daily price fluctuations limits" or "daily limits". Trades
may not be executed at prices beyond the daily limit. If the
price for a particular futures contract has increased or decreased
by an amount equal to the daily limit, positions in that futures
contract can neither be taken nor liquidated unless traders are
willing to effect trades at or within the limit. Futures prices
have occasionally moved the daily limit for several consecutive

days with little or no trading. These market conditions could
prevent the Partnership from promptly liquidating its futures
contracts and result in restrictions on redemptions.

There is no limitation on daily price moves in trading forward
contracts on foreign currencies. The markets for some world
currencies have low trading volume and are illiquid, which may
prevent the Partnership from trading in potentially profitable
markets or prevent the Partnership from promptly liquidating
unfavorable positions in such markets, subjecting it to
substantial losses. Either of these market conditions could
result in restrictions on redemptions.

There are no material trends, events or uncertainties known at the
present time that will result in or that are reasonably likely to
result in the Partnership's liquidity increasing or decreasing in
any material way.

The Partnership has never had illiquidity affect a material
portion of its assets.

The Partnership has no off-balance sheet arrangements, nor
contractual obligations or commercial commitments to make future
payments that would affect the Partnership's liquidity or capital
resources. The contracts traded by the Partnership are accounted

for on a trade-date basis and marked to market on a daily basis.
The value of foreign currency forward contracts is based on the
spot rate as of the close of business, New York City time, on a
given day.

Capital Resources. The Partnership does not have, nor expect to
have, any capital assets. Redemptions of additional units of
limited partnership interest ("Unit(s)") in the future will affect
the amount of funds available for investment in futures and
forwards in subsequent periods. It is not possible to estimate
the amount and therefore the impact of future redemptions of
Units.

There are no known material trends, favorable or unfavorable, nor
any expected material changes to the Partnership's capital
resource arrangements at the present time.

Results of Operations
General. The Partnership's results depend on the Trading Manager
and the ability of the Trading Manager's trading programs to take
advantage of price movements or other profit opportunities in the
futures and forwards markets. The following presents a summary of
the Partnership's operations for the three and six month periods
ended June 30, 2002 and 2001, and a general discussion of its
trading activities during each period. It is important to note,

however, that the Trading Manager trades in various markets at
different times and that prior activity in a particular market
does not mean that such market will be actively traded by the
Trading Manager or will be profitable in the future.
Consequently, the results of operations of the Partnership are
difficult to discuss other than in the context of the Trading
Manager's trading activities on behalf of the Partnership and how
the Partnership has performed in the past.

The Partnership's results of operations are set forth in
financial statements prepared in accordance with United States
generally accepted accounting principles, which require the use
of certain accounting policies that affect the amounts reported
in these financial statements, including the following. The
contracts the Partnership trades are accounted for on a trade-
date basis and marked to market on a daily basis. The difference
between their cost and market value is recorded on the Statements
of Operations as "Net change in unrealized profit/loss" for open
(unrealized) contracts, and recorded as "Realized profit/loss"
when open positions are closed out, and the sum of these amounts
constitutes the Partnership's trading revenues. Earned interest
income revenue, as well as management fees, incentive fees and
brokerage fees expenses of the Partnership are recorded on an
accrual basis. Demeter believes that, based on the nature of the
operations of the Partnership, no assumptions other than those

presently used relating to the application of critical accounting
policies are reasonably plausible that could affect reported
amounts.

For the Quarter and Six Months Ended June 30, 2002
For the quarter ended June 30, 2002, the Partnership recorded
total trading revenues, including interest income, of $16,964,860
and posted an increase in net asset value per Unit. The most
significant gains of approximately 27.1% were recorded in the
currency markets primarily during May and June from previously
established long positions in the Japanese yen, Swiss franc, euro
and Swedish krona relative to the U.S. dollar as the value of
these currencies strengthened against the U.S. dollar amid falling
equity prices, concerns regarding corporate accounting integrity
and weak U.S. economic data. Significant currency gains were also
recorded from long positions in the euro relative to the British
pound. Additional gains of approximately 5.2% were recorded in
the global interest rate futures markets primarily during June
from long positions in Japanese and German interest rate futures
as prices trended higher following weakness in U.S. equity
markets, geopolitical concerns and uncertainty surrounding a
global economic recovery. A portion of the Partnership's gains
was offset by losses of approximately 7.3% recorded in the energy
markets primarily during May from previously established long
futures positions in crude oil and its related products as prices
moved lower on supply and demand concerns. Additional losses of

approximately 2.6% were recorded in the metals markets primarily
during April from short positions in aluminum futures as prices
climbed higher on sentiment that an improving U.S. economy would
boost demand. Total expenses for the three months ended June 30,
2002 were $2,823,136, resulting in net income of $14,141,724. The
net asset value of a Unit increased from $1,196.80 at March 31,
2002 to $1,420.68 at June 30, 2002.

For the six months ended June 30, 2002, the Partnership recorded
total trading revenues, including interest income, of $18,991,676
and posted an increase in net asset value per Unit. The most
significant gains of approximately 17.1% were recorded in the
currency markets primarily during May and June from previously
established long positions in the Japanese yen, Swiss franc, euro
and Swedish krona relative to the U.S. dollar as the value of
these currencies strengthened against the U.S. dollar amid
falling equity prices, concerns regarding corporate accounting
integrity and weak U.S. economic data. Significant currency
gains were also recorded from long positions in the euro relative
to the British pound. Additional gains of approximately 4.7%
were recorded in the global interest rate futures markets
primarily during June from long positions in Japanese and German
interest rate futures as prices trended higher following weakness
in U.S. equity markets, geopolitical concerns and uncertainty
surrounding a global economic recovery. Gains of approximately
1.3% were recorded in the energy markets primarily during March

from previously established long positions in crude oil futures
as prices trended higher amid escalating Middle East tensions and
supply and demand factors. A portion of the Partnership's gains
was offset by losses of approximately 3.1% recorded in the metals
markets primarily during April from short positions in aluminum
futures as prices climbed higher on sentiment that an improving
U.S. economy would boost demand. Total expenses for the six
months ended June 30, 2002, were $4,427,077, resulting in net
income of $14,564,599. The net asset value of a Unit increased
from $1,190.47 at December 31, 2001 to $1,420.68 at June 30, 2002.

For the Quarter and Six Months Ended June 30, 2001
For the quarter ended June 30, 2001, the Partnership recorded
total trading losses, net of interest income, of $929,938 and
posted a decrease in net asset value per Unit. The most
significant losses of approximately 2.8% were experienced
primarily during June in the global interest rate futures markets
from short U.S. and German interest rate futures positions as
prices jumped higher on weaker than expected U.S. and European
economic data that set the stage for possible interest rate cuts.
In the metals markets, losses of approximately 2.4% were incurred
primarily during April from short aluminum futures positions as
prices rose on technically-based buying and production concerns.
In the global stock index futures markets, losses of approximately
2.0% were recorded primarily during late May and June from long
positions in S&P 500 Index futures as global stock prices declined

on worries that the U.S. economic slowdown will ignite a global
downturn and corporate earnings will suffer. In the currency
markets, losses of approximately 0.1% were recorded primarily
during April and May from short positions in the Japanese yen as
the value of the yen reversed higher versus the U.S. dollar
following a surprise interest rate cut by the U.S. Federal Reserve
and on optimism that the Japanese government would unveil an
emergency package to stimulate that country's ailing economy.
Offsetting currency gains were recorded during May from short
positions in the euro as its value weakened relative to the
British pound amid pessimism about European growth prospects.
These losses were partially offset by gains of approximately 3.4%
recorded in the energy markets primarily during May and June from
short natural gas futures positions as prices declined on reports
of growing inventories and a lack of demand throughout most of the
United States. In soft commodities, gains of approximately 0.9%
were recorded throughout a majority of the quarter from short
cotton futures positions as prices moved lower on weak export
sales and low demand. Total expenses for the three months ended
June 30, 2001 were $2,023,263, resulting in a net loss of
$2,953,201. The net asset value of a Unit decreased from
$1,245.51 at March 31, 2001 to $1,204.51 at June 30, 2001.

For the six months ended June 30, 2001, the Partnership recorded
total trading revenues, including interest income, of $5,790,916
and posted an increase in net asset value per Unit. The most

significant gains of approximately 5.1% were recorded throughout a
majority of the first quarter in the global interest rate futures
markets from long positions in the Japanese government bond
futures as prices moved higher on concerns regarding that
country's economy. Additional gains were recorded from short
positions in Australian interest rate futures as prices moved
lower amid the weakening of the Australian dollar. In soft
commodities, gains of approximately 3.8% were recorded throughout
a majority of the first and second quarters from short cotton
futures positions as prices moved lower on weak export sales and
low demand. In the currency markets, gains of approximately 1.6%
were recorded during May from short positions in the euro as its
value weakened relative to the British pound amid pessimism about
European economic growth prospects. These gains were partially
offset by losses of approximately 3.4% recorded in the metals
markets primarily during February from long positions in aluminum
futures as prices moved lower, pressured by the decline in the
U.S. equity market and the subsequent concerns over demand.
Additional losses were incurred during April from short aluminum
futures positions as prices rose on technically-based buying and
production concerns. In the energy markets, losses of
approximately 3.4% were recorded throughout the first six months
of the year from crude oil futures and its related products as a
result of volatility in oil prices due to a continually changing
outlook for supply, production and demand. In the global stock
index futures markets, losses of approximately 1.4% were recorded

primarily during late May and June from long positions in S&P 500
Index futures as global stock prices declined on worries that the
U.S. economic slowdown will ignite a global downturn. Total
expenses for the six months ended June 30, 2001 were $3,714,140,
resulting in net income of $2,076,776. The net asset value of a
Unit increased from $1,175.17 at December 31, 2000 to $1,204.51 at
June 30, 2001.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Introduction
The Partnership is a commodity pool engaged primarily in the
speculative trading of futures and forwards. The market-
sensitive instruments held by the Partnership are acquired for
speculative trading purposes only and, as a result, all or
substantially all of the Partnership's assets are at risk of
trading loss. Unlike an operating company, the risk of market-
sensitive instruments is central, not incidental, to the
Partnership's main business activities.

The futures and forwards traded by the Partnership involve
varying degrees of related market risk. Market risk is often
dependent upon changes in the level or volatility of interest
rates, exchange rates, and prices of financial instruments and
commodities. Fluctuations in market risk based upon these

factors result in frequent changes in the fair value of the
Partnership's open positions, and, consequently, in its earnings
and cash flow.

The Partnership's total market risk is influenced by a wide
variety of factors, including the diversification among the
Partnership's open positions, the volatility present within the
markets, and the liquidity of the markets. At different times,
each of these factors may act to increase or decrease the market
risk associated with the Partnership.

The Partnership's past performance is not necessarily indicative
of its future results. Any attempt to numerically quantify the
Partnership's market risk is limited by the uncertainty of its
speculative trading. The Partnership's speculative trading may
cause future losses and volatility (i.e., "risk of ruin") that
far exceed the Partnership's experience to date or any reasonable
expectations based upon historical changes in market value.

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 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.

The Partnership accounts for open positions on the basis of mark-
to-market accounting principles. Any loss in the market value of
the Partnership's open positions is directly reflected in the
Partnership's earnings, whether realized or unrealized, and its
cash flow. Profits and losses on open positions of exchange-
traded futures and forwards are settled daily through variation
margin.

The Partnership's risk exposure in the market sectors traded by
the Trading Manager is estimated below in terms of Value at Risk
("VaR"). The VaR model used by the Partnership includes many
variables that could change the market value of the Partnership's
trading portfolio. The Partnership estimates VaR using a model
based upon historical simulation with a confidence level of 99%.
Historical simulation involves constructing a distribution of
hypothetical daily changes in the value of a trading portfolio.
The VaR model takes into account linear exposures to price and
interest rate risk. Market risks that are incorporated in the
VaR model include equity and commodity prices, interest rates,
foreign exchange rates, and correlation among these variables.

The hypothetical changes in portfolio value are based on daily
percentage changes observed in key market indices or other market
factors ("market risk factors") to which the portfolio is
sensitive. The historical observation period of the Partner-
ship's VaR is approximately four years. The one-day 99%
confidence level of the Partnership's VaR corresponds to the
negative change in portfolio value that, based on observed market
risk factors, would have been exceeded once in 100 trading days.
In other words, one-day VaR for a portfolio is a number such that
losses in this portfolio are estimated to exceed the VaR only one
day in 100.

VaR is calculated using historical simulation. Demeter uses
approximately four years of daily market data (1,000 observations)
and revalues its portfolio (using delta-gamma approximations) for
each of the historical market moves that occurred over this time
period. This generates a probability distribution of daily
'simulated profit and loss' outcomes. The VaR is the appropriate
percentile of this distribution. For example, the 99% one-day VaR
would represent the 10th worst outcome from Demeter's simulated
profit and loss series.

VaR models, including the Partnership's, are continuously
evolving as trading portfolios become more diverse and modeling
techniques and systems capabilities improve. Please note that

the VaR model is used to numerically quantify market risk for
historic reporting purposes only and is not utilized by either
Demeter or the Trading Manager in their daily risk management
activities. Please further note that VaR as described above may
not be comparable to similarly titled measures used by other
companies.

The Partnership's Value at Risk in Different Market Sectors
The following table indicates the VaR associated with the
Partnership's open positions as a percentage of total net assets
by primary market risk category at June 30, 2002 and 2001. At
June 30, 2002 and 2001, the Partnership's total capitalization
was approximately $89 million and $84 million, respectively.

Primary Market June 30, 2002 June 30, 2001
Risk Category Value at Risk Value at Risk

Interest Rate (3.02)% (1.07)%
Currency (2.77) (2.14)
Equity (0.16) (0.07)
Commodity (0.97) (2.22)
Aggregate Value at Risk (4.18)% (3.10)%

The VaR for a market category represents the one-day downside risk
for the aggregate exposures associated with this market category.
The aggregate VaR, listed above for the Partnership, represents
the aggregate VaR of the Partnership's open positions across all

the market categories, and is less than the sum of the VaR(s) for
all such market categories due to the diversification benefit
across asset classes.

The table above represents the VaR of the Partnership's open
positions at June 30, 2002 and 2001 only and is not necessarily
representative of either the historic or future risk of an
investment in the Partnership. Because the Partnership's only
business is the speculative trading of futures and forwards, the
composition of its trading portfolio can change significantly
over any given time period, or even within a single trading day.
Any changes in open positions could positively or negatively
materially impact market risk as measured by VaR.

The table below supplements the quarter-end VaR by presenting the
Partnership's high, low and average VaR, as a percentage of total
net assets for the four quarterly reporting periods from July 1,
2001 through June 30, 2002.

Primary Market Risk Category High Low Average
Interest Rate (3.02)% (0.98)% (1.95)%

Currency (2.77) (1.57) (2.31)

Equity (0.18) - (0.11)

Commodity (2.28) (0.89) (1.30)

Aggregate Value at Risk (4.18)% (2.42)% (3.39)%

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 margin
requirements. Margin requirements generally range between 2% and
15% of contract face value. Additionally, the use of leverage
causes the face value of the market sector instruments held by the
Partnership to typically be many times the total capitalization of
the Partnership. The value of the Partnership's open positions
thus creates a "risk of ruin" not typically found in other
investments. The relative size of the positions held may cause
the Partnership to incur losses greatly in excess of VaR within a
short period of time, given the effects of the leverage employed
and market volatility. The VaR tables above, as well as the past
performance of the Partnership, give no indication of such "risk
of ruin". In addition, VaR risk measures should be viewed in light
of the methodology's limitations, which include the following:

? past changes in market risk factors will not always result in
accurate predictions of the distributions and correlations of
future market movements;
? changes in portfolio value caused by market movements may
differ from those of the VaR model;
? VaR results reflect past trading positions while future risk
depends on future positions;

? VaR using a one-day time horizon does not fully capture the
market risk of positions that cannot be liquidated or hedged
within one day; and
? the historical market risk factor data used for VaR estimation
may provide only limited insight into losses that could be
incurred under certain unusual market movements.

The VaR tables above present the results of the Partnership's VaR
for each of the Partnership's market risk exposures and on an
aggregate basis at June 30, 2002 and 2001, and for the end of the
four quarterly reporting periods from July 1, 2001 through June
30, 2002. Since VaR is based on historical data, VaR should not
be viewed as predictive of the Partnership's future financial
performance or its ability to manage or monitor risk. There can
be no assurance that the Partnership's actual losses on a
particular day will not exceed the VaR amounts indicated above or
that such losses will not occur more than once in 100 trading
days.

Non-Trading Risk
The Partnership has non-trading market risk on its foreign cash
balances not needed for margin. These balances and any market
risk they may represent are immaterial.

At June 30, 2002, the Partnership's cash balance at Morgan Stanley
DW was approximately 79% of its total net asset value. A decline
in short-term interest rates will result in a decline in the
Partnership's cash management income. This cash flow risk is not
considered to be material.

Materiality, as used throughout this section, is based on an
assessment of reasonably possible market movements and any
associated potential losses, taking into account the leverage,
optionality and multiplier features of the Partnership's market-
sensitive instruments, in relation to the Partnership's net
assets.

Qualitative Disclosures Regarding Primary Trading Risk Exposures
The following qualitative disclosures regarding the Partnership's
market risk exposures - except for (A) those disclosures that are
statements of historical fact and (B) 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 Demeter and the Trading Manager
for managing such exposures are subject to numerous uncertainties,
contingencies and risks, any one of which could cause the actual
results of the Partnership's risk controls to differ materially

from the objectives of such strategies. Government interventions,
defaults and expropriations, illiquid markets, the emergence of
dominant fundamental factors, political upheavals, changes in
historical price relationships, an influx of new market
participants, increased regulation and many other factors could
result in material losses as well as in material changes to the
risk exposures and the risk management strategies of the
Partnership. 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 at June 30, 2002, by market sector. It may be
anticipated, however, that these market exposures will vary
materially over time.

Interest Rate. The primary market exposure at June 30, 2002 was
primarily spread across the Japanese and German interest rate
sectors. Interest rate movements directly affect the price of the
sovereign bond futures positions held by the Partnership and
indirectly affect 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 generally to interest rate fluctuations
in the U.S. and the other G-7 countries. The G-7 countries

consist of France, the U.S., Britain, Germany, Japan, Italy, and
Canada. However, the Partnership also takes futures positions in
the government debt of smaller nations - e.g. Australia. Demeter
anticipates that G-7 and Australian interest rates will remain the
primary interest rate exposure of the Partnership for the
foreseeable future. The speculative futures positions held by the
Partnership may range from short to long-term instruments.
Consequently, changes in short, medium or long-term interest rates
may have an effect on the Partnership.

Currency. The second largest market exposure of the Partnership
at June 30, 2002 was to the currency sector. The Partnership's
currency exposure is to exchange rate fluctuations, primarily
fluctuations which disrupt the historical pricing relationships
between different currencies and currency pairs. Interest rate
changes as well as political and general economic conditions
influence these fluctuations. The Partnership trades a large
number of currencies, including cross-rates - i.e., positions
between two currencies other than the U.S. dollar. At June 30,
2002, the Partnership's major exposures were to euro currency
crosses and outright U.S. dollar positions. Outright positions
consist of the U.S. dollar vs. other currencies. These other
currencies include major and minor currencies. Demeter does not
anticipate that the risk profile of the Partnership's currency
sector will change significantly in the future. The currency
trading VaR figure includes foreign margin amounts converted into

U.S. dollars with an incremental adjustment to reflect the
exchange rate risk inherent to the U.S.-based Partnership in
expressing VaR in a functional currency other than U.S. dollars.

Equity. The Partnership's primary equity exposure at June 30,
2002 was to 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. At June 30, 2002, the Partnership's
primary exposure was to the S&P 500 stock index. The Partnership
is primarily exposed to the risk of adverse price trends or static
markets in the U.S. 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.

Commodity.
Soft Commodities and Agriculturals. At June 30, 2002, the
Partnership had exposure to the markets that comprise these
sectors. Most of the exposure was to the coffee, corn and
cotton markets. Supply and demand inequalities, severe
weather disruption and market expectations affect price
movements in these markets.

Metals. The Partnership's metals exposure at June 30, 2002
was to fluctuations in the price of precious metals, such as
gold, and base metals, such as copper and nickel. Economic

forces, supply and demand inequalities, geopolitical factors
and market expectations influence price movements in these
markets. The Trading Manager, from time to time, takes
positions when market opportunities develop. Demeter
anticipates that the Partnership will continue to be exposed
to the precious and base metals markets.

Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following was the only non-trading risk exposure of the
Partnership at June 30, 2002:

Foreign Currency Balances. The Partnership's primary foreign
currency balance at June 30, 2002 was in Japanese yen. The
Partnership controls the non-trading risk of these balances
by regularly converting them back into U.S. dollars upon
liquidation of their respective positions.

Qualitative Disclosures Regarding Means of Managing Risk Exposure
The Partnership and the Trading Manager, separately, attempt to
manage the risk of the Partnership's open positions in essentially
the same manner in all market categories traded. Demeter attempts
to manage market exposure by diversifying the Partnership's assets
among different market sectors and trading approaches, and
monitoring the performance of the Trading Manager daily. In
addition, the Trading Manager establishes diversification
guidelines, often set in terms of the maximum margin to be

committed to positions in any one market sector or market-
sensitive instrument.

Demeter monitors and controls the risk of the Partnership's non-
trading instrument, cash. Cash is the only Partnership investment
directed by Demeter, rather than the Trading Manager.

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS
None.

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

(A) Exhibits

3.01 Amended and Restated Limited Partnership Agreement of the
Partnership, dated as of June 30, 1995, is incorporated
by reference to Exhibit 3.01 of the Partnership's
Registration Statement on Form S-1 (File No. 33-90360).
10.01 Amended and Restated Management Agreement among the
Partnership, Demeter and MSFCM, dated as of August 31,
1995, is incorporated by reference to Exhibit 10.02 of
the Partnership's Registration Statement on Form S-1
(File No. 33-90360).
10.02 Amended and Restated Customer Agreement between the
Partnership and Morgan Stanley DW Inc., dated as of May
19, 2000, is incorporated by reference to Exhibit 10.01
of the Partnership's Form 8-K (File No. 0-23577) filed
with the Securities and Exchange Commission on November
13, 2001.
10.03 Commodity Futures Customer Agreement between Morgan
Stanley & Co. Incorporated and the Partnership, and
acknowledged and agreed to by Morgan Stanley DW Inc.,
dated as of May 1, 2000, is incorporated by reference to
Exhibit 10.02 of the Partnership's Form 8-K (File No. 0-
23577) filed with the Securities and Exchange Commission
on November 13, 2001.
10.04 Customer Agreement between the Partnership and Morgan
Stanley & Co. International Limited, dated as of May 1,
2000, is incorporated by reference to Exhibit 10.04 of
the Partnership's Form 8-K (File No. 0-23577) filed with
the Securities and Exchange Commission on November 13,
2001.

10.05 Foreign Exchange and Options Master Agreement between
Morgan Stanley & Co. Incorporated and the Partnership,
dated as of April 30, 2000, is incorporated by reference
to Exhibit 10.05 of the Partnership's Form 8-K (File No.
0-23577) filed with the Securities and Exchange
Commission on November 13, 2001.
10.06 Securities Account Control Agreement among the
Partnership, Morgan Stanley & Co. Incorporated, and
Morgan Stanley DW Inc., dated as of May 1, 2000, is
incorporated by reference to Exhibit 10.03 of the
Partnership's Form 8-K (File No. 0-23577) filed with the
Securities and Exchange Commission on November 13, 2001.
99.01 Certification of Periodic Financial Reports.

(B) Reports on Form 8-K - None.

SIGNATURE

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.

Dean Witter Diversified Futures
Fund Limited Partnership
(Registrant)

By: Demeter Management Corporation
(General Partner)

August 12, 2002 By:
Raymond E. Koch
Chief Financial Officer

The General Partner which signed the above is the only party
authorized to act for the Registrant. The Registrant has no
principal executive officer, principal financial officer,
controller, or principal accounting officer and has no Board of
Directors.

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Dean Witter Diversified
Futures Fund Limited Partnership (the "Partnership") on Form 10-Q
for the period ended June 30, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I,
Robert E. Murray, President, Demeter Management Corporation,
general partner of the Partnership, certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents,
in all material respects, the financial condition and
results of operations of the Partnership.

By: /s/ Robert E. Murray

Name: Robert E. Murray
Title: Chairman of the Board and President

Date: August 12, 2002

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Dean Witter Diversified
Futures Fund Limited Partnership (the "Partnership") on Form 10-Q
for the period ended June 30, 2002 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I,
Raymond E. Koch, Chief Financial Officer, Demeter Management
Corporation, general partner of the Partnership, certify, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section
13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents,
in all material respects, the financial condition and
results of operations of the Partnership.

By: /s/ Raymond E. Koch

Name: Raymond E. Koch
Title : Chief Financial Officer

Date: August 12, 2002