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

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 000-22491

DIVERSIFIED MULTI-ADVISOR FUTURES FUND L.P. II

(Exact name of registrant as specified in its charter)

New York		13-3769020
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

c/o Ceres Managed Futures LLC
522 Fifth Avenue — 14th Floor
New York, New York 10036
(Address of principal executive offices) (Zip Code)

(212) 296-1999
(Registrant’s telephone number, including area code)

          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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes       No   

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

Large accelerated filer		Accelerated filer		Non-accelerated filer X		Smaller reporting company
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes       No X

As of April 30, 2011, 15,393.9812 Limited Partnership Redeemable Units were outstanding.

DIVERSIFIED MULTI-ADVISOR FUTURES FUND L.P. II

FORM 10-Q

INDEX

				Page
				Number
PART I - Financial Information:
Item 1.		Financial Statements:
		Statements of Financial Condition at March 31, 2011 (unaudited) and December 31, 2010		3
		Condensed Schedules of Investments at March 31, 2011 (unaudited) and December 31, 2010		4–5
		Statements of Income and Expenses and Changes in Partners’ Capital for the three months ended March 31, 2011 and 2010 (unaudited)		6
		Notes to Financial Statements (unaudited)		7–17
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		18–20
Item 3.		Quantitative and Qualitative Disclosures about Market Risk		21–25
Item 4.		Controls and Procedures		26
PART II - Other Information				27–32
Exhibits Exhibit 31.1 Certification Exhibit 31.2 Certification Exhibit 32.1 Certification Exhibit 32.2 Certification

PART I

Item 1. Financial Statements

Diversified Multi-Advisor Futures Fund L.P. II
Statements of Financial Condition

		(Unaudited)
		March 31,				December 31,
		2011				2010
Assets:
Investment in Funds, at fair value		$	18,479,900			$	19,030,434
Equity in trading account:
Cash			5,963,824				5,731,113
Cash margin			1,057,200				1,224,258
Net unrealized appreciation on open futures contracts			334,446				240,495
			25,835,370				26,226,300
Interest receivable			287				463
Total assets		$	25,835,657			$	26,226,763
Liabilities and Partners’ Capital:
Liabilities:
Net unrealized depreciation on open forward contracts		$	12,486			$	—
Accrued expenses:
Brokerage fees			129,116				131,134
Management fees			42,622				43,327
Other			120,764				99,561
Redemptions payable			216,381				203,384
Total liabilities			521,369				477,406
Partners’ Capital:
General Partner, 196.3844 unit equivalents at March 31, 2011 and December 31, 2010			312,939				311,546
Limited Partners, 15,689.5694 and 16,034.8072 Redeemable Units outstanding at March 31, 2011 and December 31, 2010, respectively			25,001,349				25,437,811
Total partners’ capital			25,314,288				25,749,357
Total liabilities and partners’ capital		$	25,835,657			$	26,226,763
Net asset value per unit		$	1,593.50			$	1,586.41

See accompanying notes to financial statements.

Diversified Multi-Advisor Futures Fund L.P. II
Condensed Schedule of Investments
March 31, 2011
(Unaudited)

		Number of								% of Partners’
		Contracts				Fair Value				Capital
Futures Contracts Purchased
Currencies			165				221,089				0.87	%
Energy			10				13,750				0.06
Grains			12				19,592				0.08
Indices			46				27,851				0.11
Interest Rates Non-U.S.			130				(11,533	)			(0.04	)
Interest Rates U.S.			64				(12,030	)			(0.05	)
Livestock			1				3,550				0.01
Metals			8				26,070				0.10
Softs			3				458				0.00	*
Total futures contracts purchased							288,797				1.14
Futures Contracts Sold
Currencies			15				46,387				0.18
Grains			3				(2,750	)			(0.01	)
Indices			1				(416	)			0.00	*
Interest Rates Non-U.S.			17				3,228				0.01
Metals			1				(800	)			(0.00	)*
Total futures contracts sold							45,649				0.18
Unrealized Appreciation on Open Forward Contracts
Metals			56				185,411				0.73
Total unrealized appreciation on open forward contracts							185,411				0.73
Unrealized Depreciation on Open Forward Contracts
Metals			54				(197,897	)			(0.78	)
Total unrealized depreciation on open forward contracts							(197,897	)			(0.78	)
Investment in Funds
CMF Willowbridge Argo Master Fund L.P.							3,872,923				15.30
CMF Graham Capital Master Fund L.P.							4,771,880				18.85
CMF Eckhardt Master Fund L.P.							6,708,293				26.50
CMF SandRidge Master Fund L.P.							3,126,804				12.35
Total investment in Funds							18,479,900				73.00
Net fair value						$	18,801,860				74.27	%

See accompanying notes to financial statements.

Diversified Multi-Advisor Futures Fund L.P. II
Condensed Schedule of Investments
December 31, 2010

		Number of								% of Partners’
		Contracts				Fair Value				Capital
Futures Contracts Purchased
Currencies			79			$	206,190				0.80	%
Energy			3				5,317				0.02
Grains			8				14,281				0.05
Livestock			1				280				0.00	*
Indices			194				(36,833	)			(0.14	)
Interest Rates Non-U.S.			81				19,565				0.08
Interest Rates U.S.			69				45,789				0.18
Metals			4				35,295				0.14
Softs			1				525				0.00	*
Total futures contracts purchased							290,409				1.13
Futures Contracts Sold
Currencies			30				(47,113	)			(0.19	)
Energy			1				(2,251	)			(0.01	)
Indices			1				(550	)			(0.00	)
Total futures contracts sold							(49,914	)			(0.20	)
Investment in Funds
CMF Willowbridge Argo Master Fund L.P.							4,427,857				17.20
CMF Graham Capital Master Fund L.P.							5,410,815				21.01
CMF Eckhardt Master Fund L.P.							5,913,996				22.97
CMF SandRidge Master Fund L.P.							3,277,766				12.73
Total investment in Funds							19,030,434				73.91
Net fair value						$	19,270,929				74.84	%

See accompanying notes to financial statements.

Diversified Multi-Advisor Futures Fund L.P. II
Statements of Income and Expenses and Changes in Partners’ Capital
(Unaudited)

		Three Months Ended
		March 31,
		2011				2010
Investment Income:
Interest income		$	1,369			$	1,146
Interest income from investment in Funds			3,603				2,447
Total investment income (loss)			4,972				3,593
Expenses:
Brokerage fees including clearing fees			433,320				512,868
Management fees			128,398				149,229
Other			42,993				45,977
Total expenses			604,711				708,074
Net investment income (loss)			(599,739	)			(704,481	)
Trading Results:
Net gains (losses) on trading of commodity interests and investment in Funds:
Net realized gains (losses) on closed contracts			448,157				175,407
Net realized gains (losses) on investment in Funds			684,039				(951,523	)
Change in net unrealized gains (losses) on open contracts			81,465				53,756
Change in net unrealized gains (losses) on investments in Funds			(499,270	)			(172,315	)
Total trading results			714,391				(894,675	)
Net income (loss)			114,652				(1,599,156	)
Redemptions — General Partner			—				(125,000	)
Redemptions — Limited Partners			(549,721	)			(868,843	)
Net increase (decrease) in Partners’ Capital			(435,069	)			(2,592,999	)
Partners’ Capital, beginning of period			25,749,357				31,924,681
Partners’ Capital, end of period		$	25,314,288			$	29,331,682
Net asset value per unit (15,885.9538 and 17,900.1413 units outstanding at March 31, 2011 and 2010, respectively)		$	1,593.50			$	1,638.63
Net income (loss) per unit*		$	7.09			$	(85.94	)
Weighted average units outstanding			16,135.8789				18,337.5392

See accompanying notes to financial statements.

Diversified Multi-Advisor Futures Fund L.P. II
Notes to Financial Statements
March 31, 2011
(Unaudited)

1. General:

     Diversified Multi-Advisor Futures Fund L.P. II (the “Partnership”) is a limited partnership organized on May 10, 1994 under the partnership laws of the State of New York to engage, directly or indirectly, in the speculative trading of a diversified portfolio of commodity interests including futures contracts, options, swaps and forward contracts. The sectors traded include currencies, energy, grains, indices, metals, softs, livestock and U.S. and non-U.S. interest rates. The commodity interests that are traded by the Partnership and the Funds (as defined in Note 5 “Investment in Funds”) are volatile and involve a high degree of market risk. The Partnership was authorized to sell 100,000 redeemable units of limited partnership interest (“Redeemable Units”) during its initial offering period. The Partnership no longer offers Redeemable Units for sale.

     Ceres Managed Futures LLC, a Delaware limited liability company, acts as the general partner (the “General Partner”) and commodity pool operator of the Partnership. The General Partner is wholly owned by Morgan Stanley Smith Barney Holdings LLC (“MSSB Holdings”). Morgan Stanley, indirectly through various subsidiaries, owns a majority equity interest in MSSB Holdings. Citigroup Global Markets Inc. (“CGM”), the commodity broker and a selling agent for the Partnership, owns a minority equity interest in MSSB Holdings. Citigroup Inc. (“Citigroup”), indirectly through various subsidiaries, wholly owns CGM. Prior to July 31, 2010, the date as of which MSSB Holdings became its owner, the General Partner was wholly owned by Citigroup Financial Products Inc., a wholly owned subsidiary of Citigroup Global Markets Holdings Inc., the sole owner of which is Citigroup. As of March 31, 2011, all trading decisions for the Partnership are made by the Advisors (defined below).

     As of March 31, 2011, all trading decisions are made for the Partnership by Capital Fund Management S.A. (“CFM”), Graham Capital Management L.P. (“Graham”), Willowbridge Associates Inc. (“Willowbridge”), Eckhardt Trading Company (“Eckhardt”) and SandRidge Capital L.P. (“SandRidge”) (each an “Advisor” and collectively, the “Advisors”), each of which is a registered commodity trading advisor. Each Advisor is allocated a portion of the Partnership’s assets to manage. The Partnership invests the portion of its assets allocated to CFM directly, whereas the Partnership invests the portion of its assets allocated to each of the other Advisors indirectly through investments in master funds.

     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 their initial capital contribution and profits, if any, net of distributions.

     The accompanying financial statements are unaudited but, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the Partnership’s financial condition at March 31, 2011 and December 31, 2010, and the results of its operations and changes in partners’ capital for the three months ended March 31, 2011 and 2010. These financial statements present the results of interim periods and do not include all disclosures normally provided in annual financial statements. You should read these financial statements together with the financial statements and notes included in the Partnership’s annual report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) for the year ended December 31, 2010.

     The preparation of financial statements and accompanying notes in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. In making these estimates and assumptions, management has considered the effects, if any, of events occurring after the date of the Partnership’s Statements of Financial Condition through the date the financial statements were filed. Actual results could differ from these estimates.

     Due to the nature of commodity trading, the results of operations for the interim periods presented should not be considered indicative of the results that may be expected for the entire year.

Diversified Multi-Advisor Futures Fund L.P. II
Notes to Financial Statements
March 31, 2011
(Unaudited)

2. Financial Highlights:

     Changes in net asset value per unit for the three months ended March 31, 2011 and 2010 were as follows:

		Three Months Ended
		March 31,
		2011				2010
Net realized and unrealized gains (losses)*		$	17.41			$	(75.49	)
Interest income			0.30				0.19
Expenses **			(10.62	)			(10.64	)
Increase (decrease) for the period			7.09				(85.94	)
Net asset value per unit, beginning of period			1,586.41				1,724.57
Net asset value per unit, end of period		$	1,593.50			$	1,638.63

		Three Months Ended
		March 31,
		2011				2010
Ratio to average net assets:***
Net investment income (loss) before incentive fees****			(9.5	)%			(9.5	)%
Operating expenses			9.6	%			9.6	%
Incentive fees			—	%			—	%
Total expenses			9.6	%			9.6	%
Total return:
Total return before incentive fees			0.4	%			(5.0	)%
Incentive fees			—	%			—	%
Total return after incentive fees			0.4	%			(5.0	)%

     The above ratios may vary for individual investors based on the timing of capital transactions during the period. Additionally, these ratios are calculated for the limited partner class using the limited partners’ share of income, expenses and average net assets.

3. 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 Partnership’s investments are in other Funds which trade these instruments. The results of the Partnership’s trading activities are shown in the Statements of Income and Expenses and Changes in Partners’ Capital.

     The customer agreements between the Partnership and CGM and the Funds and CGM give the Partnership and the Funds the legal right to net unrealized gains and losses on open futures contracts and open forward contracts. The Partnership and the Funds net, for financial reporting purposes, the unrealized gains and losses on open futures and on open forward contracts on the Statements of Financial Condition.

     All of the commodity interests owned by the Partnership are held for trading purposes. All of the commodity interests owned by the Funds are held for trading purposes. The monthly average number of futures contracts traded directly by the Partnership during the three months ended March 31, 2011 and 2010 were 549 and 676, respectively. The monthly average number of metals forward contracts traded during the three months ended March 31, 2011 was 110. There were no metals forward contracts traded during the three months ended March 31, 2010.

     Brokerage fees are calculated as a percentage of the Partnership’s adjusted net asset value on the last day of each month and are

Diversified Multi-Advisor Futures Fund L.P. II
Notes to Financial Statements
March 31, 2011
(Unaudited)

affected by trading performance and redemptions.

     The following tables indicate the gross fair values of derivative instruments of futures and forward contracts traded directly by the Partnership as separate assets and liabilities as of March 31, 2011 and December 31, 2010.

		March 31, 2011
Assets
Futures Contracts
Currencies		$	272,520
Energy			13,820
Grains			22,129
Indices			29,685
Interest Rates U.S.			453
Interest Rates Non-U.S.			11,084
Livestock			3,550
Metals			26,070
Softs			4,525
Total unrealized appreciation on open futures contracts		$	383,836
Liabilities
Futures Contracts
Currencies		$	(5,044	)
Energy			(70	)
Grains			(5,287	)
Indices			(2,250	)
Interest Rates U.S.			(12,483	)
Interest Rates Non-U.S.			(19,389	)
Metals			(800	)
Softs			(4,067	)
Total unrealized depreciation on open futures contracts		$	(49,390	)
Net unrealized depreciation on open futures contracts		$	334,446	*

		March 31, 2011
Assets
Forward Contracts
Metals		$	185,411
Total unrealized appreciation on open forwards contracts		$	185,411
Liabilities
Forward Contracts
Metals		$	(197,897	)
Total unrealized depreciation on open forwards contracts		$	(197,897	)
Net unrealized depreciation on open forwards contracts		$	(12,486	)**

		December 31, 2010
Assets
Futures Contracts
Currencies		$	206,190
Energy			5,317
Grains			14,281
Indices			19,159
Interest Rates U.S.			45,789
Interest Rates Non-U.S.			22,310
Livestock			280
Metals.			35,295
Softs.			525
Total unrealized appreciation on open futures contracts		$	349,146
Liabilities
Futures Contracts
Currencies		$	(47,113	)
Energy			(2,251	)

		December 31, 2010
Indices			(56,542	)
Interest Rates Non-U.S.			(2,745	)
Total unrealized depreciation on open futures contracts		$	(108,651	)
Net unrealized appreciation on open futures contracts		$	240,495	*

•

This amount is in “Net unrealized appreciation on open futures contracts” on the Statements of Financial Condition.

Diversified Multi-Advisor Futures Fund L.P. II
Notes to Financial Statements
March 31, 2011
(Unaudited)

The following tables indicate the trading gains and losses, by market sector, on derivative instruments traded directly by the Partnership for the three months ended March 31, 2011 and 2010.

		Three Months Ended				Three Months Ended
		March 31, 2011				March 31, 2010
		Gain (loss) from				Gain (loss) from
Sector		trading				trading
Currencies		$	295,759			$	(150,702	)
Energy			29,245				38,004
Grains			12,061				(29,731	)
Indices			255,466				(52,095	)
Interest Rates U.S.			109,295				245,284
Interest Rates Non-U.S.			(253,036	)			225,149
Livestock			(3,700	)			(4,630	)
Softs			(17,962	)			(13,656	)
Metals			102,494				(28,460	)
Total		$	529,622			$	229,163

4. Fair Value Measurements:

     Partnership’s and the Funds’ Investments. All commodity interests (including derivative financial instruments and derivative commodity instruments) are held for trading purposes. The commodity interests are recorded on trade date and open contracts are recorded at fair value (as described below) at the measurement date. Investments in commodity interests denominated in foreign currencies are translated into U.S. dollars at the exchange rates prevailing at the measurement date. Gains or losses are realized when contracts are liquidated. Unrealized gains or losses on open contracts are included as a component of equity in trading account on the Statements of Financial Condition. Net realized gains or losses and any change in net unrealized gains or losses from the preceding period are reported in the Statements of Income and Expenses and Changes in Partners’ Capital.

     Partnership’s and the Funds’ Fair Value Measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date current market conditions. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to fair values derived from unobservable inputs (Level 3). The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety. Management has concluded that based on available information in the marketplace, the Partnership’s and the Funds’ Level 1 assets and liabilities are actively traded.

     GAAP also requires the need to use judgment in determining if a formerly active market has become inactive and in determining fair values when the market has become inactive. Management has concluded that based on available information in the marketplace, there has not been a significant decrease in the volume and level of activity in the Partnership’s and the Funds’ Level 2 assets and liabilities.

     The Partnership and the Funds will separately present purchases, sales, issuances, and settlements in its reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and make disclosures regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy as required under GAAP.

     The Partnership and the Funds consider prices for exchange-traded commodity futures, forwards and options contracts to be based on unadjusted quoted prices in active markets for identical assets (Level 1). The values of non-exchange-traded forwards, swaps and certain options contracts for which market quotations are not readily available are priced by broker-dealers who derive fair values for those assets from observable inputs (Level 2). Investments in Funds (other commodity pools) where there are no other rights or obligations inherent within the ownership interest held by the Partnership are priced based on the end of the day net asset value (Level 2). The value of the Partnership’s investments in Funds reflects its proportional interest in the Funds. As of and for the periods ended March 31, 2011 and December 31, 2010, the Partnership and the Funds did not hold any derivative instruments that are priced at fair value using unobservable inputs through the application of management’s assumptions and internal valuation pricing models (Level 3).

Diversified Multi-Advisor Futures Fund L.P. II
Notes to Financial Statements
March 31, 2011
(Unaudited)

						Quoted Prices in								Significant
						Active Markets for				Significant Other				Unobservable
						Identical Assets				Observable Inputs				Inputs
		3/31/2011				(Level 1)				(Level 2)				(Level 3)
Assets
Investment in Funds		$	18,479,900			$	—			$	18,479,900			$	—
Futures			383,836				383,836				—				—
Forwards			185,411				185,411				—				—
Total Assets			19,049,147				569,247				18,479,900				—
Liabilities
Futures			49,390				49,390				—				—
Forwards			197,897				197,897				—				—
Total Liabilities			247,287				247,287				—				—
Net fair value		$	18,801,860			$	321,960			$	18,479,900			$	—

						Quoted Prices in								Significant
						Active Markets for				Significant Other				Unobservable
						Identical Assets				Observable Inputs				Inputs
		12/31/2010*				(Level 1)				(Level 2)				(Level 3)
Assets
Investment in Funds		$	19,030,434			$	—			$	19,030,434			$	—
Futures			349,146				349,146				—				—
Total Assets			19,379,580				349,146				19,030,434				—
Liabilities
Futures			108,651				108,651				—				—
Net fair value		$	19,270,929			$	240,495			$	19,030,434			$	—

5. Investment in Funds:

     The assets allocated to CFM for trading are invested directly pursuant to CFM’s Discus (1.5x Leverage) Program, a proprietary, systematic trading system.

     On July 1, 2005, the assets allocated to Willowbridge for trading were invested in CMF Willowbridge Argo Master Fund L.P. (“Willowbridge Master”), a limited partnership organized under the partnership laws of the State of New York. The Partnership purchased 10,980.9796 units of Willowbridge Master with cash equal to $9,895,326 and a contribution of open commodity futures and forward positions with a fair value of $1,085,654. Willowbridge Master was formed in order to permit commodity pools managed now or in the future by Willowbridge using its Argo Trading System, a proprietary, systematic trading system, to invest together in one trading vehicle. The General Partner is also the general partner of Willowbridge Master. Individual and pooled accounts currently managed by Willowbridge, including the Partnership, are permitted to be limited partners of Willowbridge Master. The General Partner and Willowbridge believe that trading through this structure should promote efficiency and economy in the trading process.

     On April 1, 2006, the assets allocated to Graham for trading were invested in CMF Graham Capital Master Fund L.P. (“Graham Master”), a limited partnership organized under the partnership laws of the State of New York. The Partnership purchased 11,192.9908 units of Graham Master with cash equal to $11,192,991. Graham Master was formed in order to permit commodity pools managed now or in the future by Graham using its K4D-15V Program, a proprietary, systematic trading system, to invest together in one trading vehicle. The General Partner is also the general partner of Graham Master. Individual and pooled accounts currently managed by Graham, including the Partnership, are permitted to be limited partners of Graham Master. The General Partner and Graham believe that trading through this structure should promote efficiency and economy in the trading process.

     On April 1, 2008, the assets allocated to Eckhardt for trading were invested in CMF Eckhardt Master Fund L.P. (“Eckhardt Master”), a limited partnership organized under the partnership laws of the State of New York. The Partnership purchased 7,000.0000 units of Eckhardt Master with cash equal to $7,000,000. Eckhardt Master was formed in order to permit commodity pools managed now or in the future by Eckhardt using its Standard Program, a proprietary, systematic trading system, to invest together in one

Diversified Multi-Advisor Futures Fund L.P. II
Notes to Financial Statements
March 31, 2011
(Unaudited)

trading vehicle. The General Partner is also the general partner of Eckhardt Master. Individual and pooled accounts currently managed by Eckhardt, including the Partnership, are permitted to be limited partners of Eckhardt Master. The General Partner and Eckhardt believe that trading through this structure should promote efficiency and economy in the trading process.

     On June 1, 2009, the assets allocated to SandRidge for trading were in invested in the CMF SandRidge Master Fund L.P. (“SandRidge Master”), a limited partnership organized under the partnership laws of the State of New York. The Partnership purchased 2,086.0213 units of SandRidge Master with cash equal to $4,288,986. SandRidge Master was formed in order to permit commodity pools managed now or in the future by SandRidge using its Energy Program, a proprietary, discretionary trading system, to invest together in one trading vehicle. The General Partner is also the general partner of SandRidge Master. Individual and pooled accounts currently managed by SandRidge, including the Partnership, are permitted to be limited partners of SandRidge Master. The General Partner and SandRidge believe that trading through this structure should promote efficiency and economy in the trading process.

     The General Partner is not aware of any material changes to the trading programs discussed above during the fiscal quarter ended March 31, 2011.

     Willowbridge Master’s, Graham Master’s, Eckhardt Master’s and SandRidge Master’s (collectively, the “Funds”) and the Partnership’s trading of futures, forwards, swaps and options contracts, if applicable, on commodities is done primarily on United States of America and foreign commodity exchanges. The Funds and the Partnership engage in such trading through a commodity brokerage account maintained with CGM.

     A limited partner may withdraw all or part of their capital contribution and undistributed profits, if any, from the Funds in multiples of the net asset value per Redeemable Unit as of the end of any day (the “Redemption Date”) after a request for redemption has been made to the general partner at least 3 days in advance of the Redemption Date. The units are classified as a liability when the limited partner elects to redeem and informs the Funds.

     Management and incentive fees are charged at the Partnership level. All exchange, clearing, user, give-up, floor brokerage and National Futures Association fees (collectively the “clearing fees”) are borne by the Partnership directly and through its investment in the Funds. All other fees including CGM’s direct brokerage fees are charged at the Partnership level.

     As of March 31, 2011, the Partnership owned approximately 2.3%, 3.0%, 26.0%, and 0.8%, of Willowbridge Master, Graham Master, Eckhardt Master and SandRidge Master, respectively. As of December 31, 2010, the Partnership owned approximately 2.1%, 3.2%, 25.0% and 0.6%, of Willowbridge Master, Graham Master, Eckhardt Master and SandRidge Master, respectively. It is the Partnership’s intention to continue to invest in the Funds. The performance of the Partnership is directly affected by the performance of the Funds. Expenses to investors as a result of the investment in the Funds are approximately the same and redemption rights are not affected.

     Summarized information reflecting the total assets, liabilities and capital of the Funds is shown in the following tables.

		March 31, 2011
		Total Assets				Total Liabilities				Total Capital
Willowbridge Master		$	168,695,333			$	80,498			$	168,614,835
Graham Master			158,542,504				335,674				158,206,830
Eckhardt Master			25,991,860				239,967				25,751,893
SandRidge Master			417,397,881				39,202,100				378,195,781
Total		$	770,627,578			$	39,858,239			$	730,769,339

		December 31, 2010
		Total Assets				Total Liabilities				Total Capital
Willowbridge Master		$	216,360,362			$	61,729			$	216,298,633
Graham Master			168,973,503				48,832				168,924,671
Eckhardt Master			23,748,773				62,448				23,686,325
SandRidge Master			581,631,311				52,896,054				528,735,257
Total		$	990,713,949			$	53,069,063			$	937,644,886

     Summarized information reflecting the net investment income (loss), total trading results and net income (loss) for the Funds is shown in the following tables.

Diversified Multi-Advisor Futures Fund L.P. II
Notes to Financial Statements
March 31, 2011
(Unaudited)

		For the three months ended March 31, 2011
		Net Investment				Total Trading				Net Income
		Income (Loss)				Results				(Loss)
Willowbridge Master		$	(25,559	)		$	6,874,935			$	6,849,376
Graham Master			(146,256	)			(1,070,720	)			(1,216,976	)
Eckhardt Master			(54,656	)			(273,717	)			(328,373	)
SandRidge Master			(250,105	)			15,043,073				14,792,968
Total		$	(476,576	)		$	20,573,571			$	20,096,995

		For the three months ended March 31, 2010
		Net Investment				Total Trading				Net Income
		Income (Loss)				Results				(Loss)
Willowbridge Master		$	(67,599	)		$	(20,526,632	)		$	(20,594,231	)
Graham Master			(99,316	)			(3,943,186	)			(4,042,502	)
Eckhardt Master			(36,785	)			(1,419,363	)			(1,456,148	)
SandRidge Master			(261,244	)			(15,233,208	)			(15,494,452	)
Total		$	(464,944	)		$	(41,122,389	)		$	(41,587,333	)

     Summarized information reflecting the Partnership’s investment in, and the operations of, the Funds is shown in the following tables.

		March 31, 2011								For the three months ended March 31, 2011
		% of																				Net
		Partnership’s				Fair				Income				Expenses								Income				Investment				Redemptions
Fund		Net Assets				Value				(Loss)				Brokerage Fees				Other				(Loss)				Objective				Permitted
Willowbridge Master			15.30	%		$	3,872,923			$	150,565			$	842			$	650			$	149,073			Commodity Portfolio				Monthly
Graham Master			18.85	%			4,771,880				(31,601	)			4,659				678				(36,938	)		Commodity Portfolio				Monthly
Eckhardt Master			26.50	%			6,708,293				(61,869	)			10,875				4,477				(77,221	)		Commodity Portfolio				Monthly
SandRidge Master			12.35	%			3,126,804				131,277				1,908				643				128,726			Energy Portfolio				Monthly
Total						$	18,479,900			$	188,372			$	18,284			$	6,448			$	163,640
		December 31, 2010								For the three months ended March 31, 2010
		% of																				Net
		Partnership’s				Fair				Income				Expenses								Income				Investment				Redemptions
Investment		Net Assets				Value				(Loss)				Commissions				Other				(Loss)				Objective				Permitted
Willowbridge Master			17.20	%		$	4,427,857			$	(418,551	)		$	1,615			$	384			$	(420,550	)		Commodity Portfolio				Monthly
Graham Master			21.01	%			5,410,815				(213,006	)			4,411				713				(218,130	)		Commodity Portfolio				Monthly
Eckhardt Master			22.97	%			5,913,996				(403,242	)			6,042				5,026				(414,310	)		Commodity Portfolio				Monthly
SandRidge Master			12.73	%			3,277,766				(86,592	)			1,631				440				(88,663	)		Energy Portfolio				Monthly
Total						$	19,030,434			$	(1,121,391	)		$	13,699			$	6,563			$	(1,141,653	)

Diversified Multi-Advisor Futures Fund L.P. II
Notes to Financial Statements
March 31, 2011
(Unaudited)

6. Financial Instrument Risks:

     In the normal course of business, the Partnership and the Funds are parties to financial instruments with off-balance sheet risk, including derivative financial instruments and derivative commodity instruments. These financial instruments may include forwards, futures, options and swaps, whose values are based upon an underlying asset, index, or reference rate, and generally represent future commitments to exchange currencies or cash balances, or 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 forwards and option contracts. OTC contracts are negotiated between contracting parties and include certain forwards and option contracts. 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.

     The risk to the limited partners that have purchased interests in the Partnership is limited to the amount of their capital contributions to the Partnership and their share of the Partnership’s assets and undistributed profits. This limited liability is a consequence of the organization of the Partnership as a limited partnership under applicable law.

     Market risk is the potential for changes in the value of the financial instruments traded by the Partnership/Funds 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. The Partnership/Funds are exposed to a market risk equal to the value of futures and forward contracts purchased and unlimited liability on such contracts sold short.

     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. The Partnership’s/Funds’ risk of loss in the event of a counterparty default is typically limited to the amounts recognized in the Statements of Financial Condition and is not represented by the contract or notional amounts of the instruments. The Partnership’s/Funds’ risk of loss is reduced through the use of legally enforceable master netting agreements with counterparties that permit the Partnership/Funds to offset unrealized gains and losses and other assets and liabilities with such counterparties upon the occurrence of certain events. The Partnership/Funds have credit risk and concentration risk as the sole counterparty or broker with respect to the Partnership’s/Funds’ assets is CGM or a CGM affiliate. Credit risk with respect to exchange-traded instruments is reduced to the extent that through CGM, the Partnership’s/Funds’ counterparty is an exchange or clearing organization.

     As both a buyer and seller of options, the Funds pay or receive a premium at the outset and then bear the risk of unfavorable changes in the price of the contract underlying the option. Written options expose the Funds to potentially unlimited liability; for purchased options the risk of loss is limited to the premiums paid. Certain written put options permit cash settlement and do not require the option holder to own the reference asset. The Funds do not consider these contracts to be guarantees.

     The General Partner monitors and attempts to control the Partnership’s/Funds’ 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/Funds may be subject. These monitoring systems generally 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 majority of these instruments mature within one year of the inception date. However, due to the nature of the Partnership’s/Funds’ business, these instruments may not be held to maturity.

Diversified Multi-Advisor Futures Fund L.P. II
Notes to Financial Statements
March 31, 2011
(Unaudited)

7. Critical Accounting Policies:

     Use of Estimates. The preparation of financial statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses, and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. As a result, actual results could differ from these estimates.

Partnership’s and the Funds’ Investments. All commodity interests (including derivative financial instruments and derivative commodity instruments) are held for trading purposes. The commodity interests are recorded on trade date and open contracts are recorded at fair value (as described below) at the measurement date. Investments in commodity interests denominated in foreign currencies are translated into U.S. dollars at the exchange rates prevailing at the measurement date. Gains or losses are realized when contracts are liquidated. Unrealized gains or losses on open contracts are included as a component of equity in trading account on the Statements of Financial Condition. Net realized gains or losses and any change in net unrealized gains or losses from the preceding period are reported in the Statements of Income and Expenses and Changes in Partners’ Capital.

Partnership’s and the Funds’ Fair Value Measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to fair values derived from unobservable inputs (Level 3). The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety. Management has concluded that based on available information in the marketplace, the Partnership’s and the Funds’ Level 1 assets and liabilities are actively traded.

GAAP also requires the need to use judgment in determining if a formerly active market has become inactive and in determining fair values when the market has become inactive. Management has concluded that based on available information in the marketplace, there has not been a significant decrease in the volume and level of activity in the Partnership’s and the Funds’ Level 2 assets and liabilities.

The Partnership and the Funds will separately present purchases, sales, issuances, and settlements in its reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and make disclosures regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy as required under GAAP.

The Partnership and the Funds consider prices for exchange-traded commodity futures, forwards and options contracts to be based on unadjusted quoted prices in active markets for identical assets (Level 1). The values of non exchange-traded forwards, swaps and certain options contracts for which market quotations are not readily available are priced by broker-dealers who derive fair values for those assets from observable inputs (Level 2). Investments in funds (other commodity pools) where there are no other rights or obligations inherent within the ownership interest held by the Partnership are priced based on the end of the day net asset value (Level 2). The value of the Partnership’s investments in the Funds reflects its proportional interest in the Funds. As of and for the periods ended March 31, 2011 and December 31, 2010, the Partnership and the Funds did not hold any derivative instruments that are priced at fair value using unobservable inputs through the application of management’s assumptions and internal valuation pricing models (Level 3).

     Futures Contracts. The Partnership and the Funds trade futures contracts and exchange-cleared swaps. Exchange-cleared swaps are swaps that are traded as futures. A futures contract is a firm commitment to buy or sell a specified quantity of investments, currency or a standardized amount of a deliverable grade commodity, at a specified price on a specified future date, unless the contract is closed before the delivery date or if the delivery quantity is something where physical delivery cannot occur (such as the S&P 500 Index), whereby such contract is settled in cash. Payments (“variation margin”) may be made or received by the Partnership and the Funds each business day, depending on the daily fluctuations in the value of the underlying contracts, and are recorded as unrealized gains or losses by the Partnership and the Funds. When the contract is closed, the Partnership and the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Transactions in futures contracts require participants to make both initial margin deposits of cash or other assets and variation margin deposits, through the futures broker, directly with the exchange on which the contracts are traded. Net realized gains (losses) and changes in net unrealized gains (losses) on futures contracts are included in the Statements of Income and Expenses and Changes in Partners’ Capital.

     Forward Foreign Currency Contracts. Foreign currency contracts are those contracts where the Partnership and the Funds agree to receive or deliver a fixed quantity of foreign currency for an agreed-upon price on an agreed future date. Foreign currency contracts are valued daily, and the Fund’s net equity therein, representing unrealized gain or loss on the contracts as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the reporting date, is included in the Statements of Financial Condition. Realized gains (losses) and changes in unrealized gains (losses) on foreign currency contracts are recognized in the period in which the contract is closed or the changes occur, respectively, and are included in the Statements of Income and Expenses and Changes in Partners’ Capital.

     The Funds do not isolate that portion of the results of operations arising from the effect of changes in foreign exchange rates on investments from fluctuations from changes in market prices of investments held. Such fluctuations are included in net gain (loss) on investments in the Statements of Income and Expenses and Changes in Partners’ Capital.

Diversified Multi-Advisor Futures Fund L.P. II
Notes to Financial Statements
March 31, 2011
(Unaudited)

     London Metals Exchange Forward Contracts. Metal contracts traded on the London Metals Exchange (“LME”) represent a firm commitment to buy or sell a specified quantity of aluminum, copper, lead, nickel, tin or zinc. LME contracts traded by the Partnership/Funds are cash settled based on prompt dates published by the LME. Payments (“variation margin”) may be made or received by the Partnership/Funds each business day, depending on the daily fluctuations in the value of the underlying contracts, and are recorded as unrealized gains or losses by the Funds. A contract is considered offset when all long positions have been matched with a like number of short positions settling on the same prompt date. When the contract is closed at the prompt date, the Partnership/Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Transactions in LME contracts require participants to make both initial margin deposits of cash or other assets and variation margin deposits, through the broker, directly with the LME. Net realized gains (losses) and changes in net unrealized gains (losses) on metal contracts are included in the Statements of Income and Expenses and Changes in Partners’ Capital.

     Options. The Funds may purchase and write (sell) both exchange listed and OTC options on commodities or financial instruments. 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 Funds write an option, the premium received is recorded as a liability in the Statements of Financial Condition and marked to market daily. When the Funds purchase an option, the premium paid is recorded as an asset in the Statements of Financial Condition and marked to market daily. Net realized gains (losses) and changes in net unrealized gains (losses) on options contracts are included in the Statements of Income and Expenses and Changes in Partners’ Capital.

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

     GAAP provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements and requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Partnership’s financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions with respect to tax at the Partnership level not deemed to meet the “more-likely-than-not” threshold would be recorded as a tax benefit or expense in the current year. The General Partner concluded that no provision for income tax is required of or disclosure in the Partnership’s financial statements.

          The Partnership files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. Generally, the 2007 through 2010 tax years remain subject to examination by U.S. federal and most state tax authorities. Management does not believe that there are any uncertain tax positions that require recognition of a tax liability.

     Subsequent Events. Management of the Partnership evaluates events that occur after the balance sheet date but before financial statements are filed. Management has assessed the subsequent events through the date of filing and has determined that there were no subsequent events requiring adjustment of or disclosure in the financial statements.

     Net Income (Loss) per unit. Net income (loss) per unit is calculated in accordance with investment company guidance. See Note 2, “Financial Highlights”.

      

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Liquidity and Capital Resources

     The Partnership does not engage in the sale of goods or services. The Partnership’s assets are its (i) investment in Funds, (ii) equity in its trading account, consisting of cash and cash equivalents, net unrealized appreciation on open futures contracts, net unrealized appreciation on open forward contracts, and (iii) interest receivable. Because of the low margin deposits normally required in commodity futures trading, relatively small price movements may result in substantial losses to the Partnership. While substantial losses could lead to a material decrease in liquidity, no such illiquidity occurred during the first quarter of 2011.

     The Partnership’s capital consists of the capital contributions of the partners as increased or decreased by gains or losses on trading and by expenses, interest income, redemptions of Redeemable Units and distributions of profits, if any.

     For the three months ended March 31, 2011, Partnership capital decreased 1.7% from $25,749,357 to $25,314,288. This decrease was attributable to the redemption of 345.2378 Redeemable Units totaling $549,721, which was partially offset by a net income from operations of $114,652. Future redemptions can impact the amount of funds available for investment in commodity contract positions in subsequent periods.

Critical Accounting Policies

      The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Management believes that the estimates utilized in preparing the financial statements are reasonable. Actual results could differ from those estimates. The Partnership’s significant accounting policies are described in detail in Note 7 of the Financial Statements.

      The Partnership records all investments at fair value in its financial statements, with changes in fair value reported as a component of net realized and change in net unrealized trading gain (loss) in the Statements of Income and Expenses and Changes in Partners’ Capital.

Results of Operations

     During the Partnership’s first quarter of 2011, the net asset value per unit increased 0.4% from $1,586.41 to $1,593.50 as compared to a decrease of 5.0% in the first quarter of 2010. The Partnership experienced a net trading gain (comprised of net realized gains (losses) on closed positions and investment in Funds and change in net unrealized gains (losses) on open positions and investment in Funds) before brokerage fees and related fees in the first quarter of 2011 of $714,391. Gains were primarily attributable to the Partnership’s and the Funds’ trading of commodity futures in currencies, energy, metals, softs and indices and were partially offset by losses in grains, livestock, non-U.S. and U.S. interest rates. The Partnership experienced a net trading loss before brokerage fees and related fees in the first quarter of 2010 of $894,675. Losses were primarily attributable to the Partnership’s and the Funds’ trading of commodity futures in currencies, energy, grains, U.S. interest rates, indices, metals and softs and were partially offset by gains in livestock and non-U.S. interest rates.

     The most significant gains were achieved within the energy markets, primarily during February and March due to long futures positions in crude oil and its related products as prices rose amid an escalation in political instability in the Middle East and North Africa, prompting concerns that crude supplies may be disrupted. Additional gains were recorded from short positions in natural gas futures as prices declined in February on forecasts of warmer-than-normal weather in U.S. consuming regions that reduced demand for the heating fuel. Within the global stock index markets, gains were experienced primarily during January and February, largely in U.S. equity index futures, as prices were supported higher amid positive economic reports, including faster-than-expected global growth, a rebound in U.S. retail sales, and strong corporate earnings reports. Within the metals markets, gains were experienced primarily during February due to long futures positions in silver and gold as prices of silver futures extended a rally to a 30-year high and gold futures reached an all-time high after mounting unrest in the Middle East spurred demand for the precious metals as a “safe haven.” Within the currency markets, gains were experienced primarily in March from long positions in the Australian dollar and euro versus the U.S. dollar as the value of these currencies moved higher against the U.S. dollar after better-than-expected U.S. economic data and a report that revealed European consumer confidence rose to the highest level in a year boosted optimism about the global economic recovery and spurred demand for higher-yielding currency assets. Additional gains were recorded from long positions in the Japanese yen as it rallied to record highs in the wake of the March 11^th earthquake in Japan. Within the agricultural complex, gains were experienced primarily during January due to long futures positions in corn as prices increased to the highest levels since July 2008 after the U.S. government lowered forecasts for domestic inventories as adverse weather slashed harvests. Further gains were recorded within this sector during February from long positions in coffee futures as coffee prices rose to the highest level since 1997 on signs that global demand may outstrip production.

     A portion of the Partnership’s gains for the quarter was offset by losses incurred within the global interest rate sector, primarily during February, from short positions in U.S. and European fixed-income futures as prices increased amid a “flight-to-safety” spurred by geopolitical concerns in the Middle East and North Africa.

     Commodity futures markets are highly volatile. The potential for broad and rapid price fluctuations increases the risks involved in commodity trading, but also increases the possibility of profit. The profitability of the Partnership/Funds depends on the existence of major price trends and the ability of the Advisors to correctly identify those price trends. 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.

     Interest income on 80% of the average daily equity maintained in cash in the Partnership’s (or the Partnership’s allocable portion of a Fund’s) brokerage account was earned at a 30-day U.S. Treasury bill rate determined weekly by CGM based on the average non-competitive yield on 3-month U.S. Treasury bills maturing in 30 days. Interest income for the three months ended March 31, 2011 increased by $1,379, as compared to the corresponding period in 2010. This increase was due to higher U.S. Treasury bill rates during the three months ended March 31, 2011 as compared to the corresponding period in 2010. Interest earned by the Partnership will increase the net asset value of the Partnership. The amount of interest income earned by the Partnership depends on the average daily equity in the Partnership’s and the Funds’ account and upon interest rates over which neither the Partnership nor CGM has control.

     Brokerage fees are calculated as a percentage of the Partnership’s net asset value as of the last day of each month and are affected by trading performance and redemptions. Accordingly, they must be compared in relation to the fluctuations in the monthly net asset values. Brokerage fees for the three months ended March 31, 2011 decreased by $79,548, as compared to the corresponding period in 2010. The decrease in brokerage fees is due to lower average net assets during the three months ended March 31, 2011 as compared to the corresponding period in 2010.

     Management fees are calculated on the portion of the Partnership’s net asset value allocated to each Advisor at the end of the month and are affected by trading performance and redemptions. Management fees for the three months ended March 31, 2011 decreased by $20,831, as compared to the corresponding periods in 2010. The decrease in management fees is due to lower average net assets during the three months ended March 31, 2011 as compared to the corresponding period in 2010.

     Incentive fees are based on the new trading profits generated by each Advisor as defined in the advisory agreements among the Partnership, the General Partner and each Advisor. There were no incentive fees for the three months ended March 31, 2011 and 2010. An Advisor will not be paid incentive fees until the Advisor recovers the net loss incurred and earns additional new trading profits for the Partnership.

     In allocating the assets of the Partnership among the trading advisors, the General Partner considers past performance, trading style, volatility of markets traded and fee requirements. The General Partner may modify or terminate the allocation of assets among the trading advisors and may allocate assets to additional advisors at any time.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

     The Partnership and the Funds are speculative commodity pools. The market sensitive instruments held by the Partnership and the Funds are acquired for speculative trading purposes, and all or substantially all of the Partnership’s and the Funds’ 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 and the Funds’ main line of business.

     The risk to the limited partners that have purchased interests in the Partnership is limited to the amount of their capital contributions to the Partnership and their share of the Partnership assets and undistributed profits. This limited liability is a consequence of the organization of the Partnership as a limited partnership under applicable law.

     Market movements result in frequent changes in the fair value of the Partnership’s and the Funds’ open positions and, consequently, in their earnings and cash balances. The Partnership’s and the Funds’ 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 effects among the Partnership’s and the Funds’ open positions and the liquidity of the markets in which they trade.

     The Partnership and the Funds rapidly acquire and liquidate both long and short positions in a wide range of different markets. Consequently, it is not possible to predict how a particular future market scenario will affect performance, and the Partnership’s and the Funds’ past performance is not necessarily indicative of their future results.

     “Value at Risk” is a measure of the maximum amount which the Partnership and the Funds could reasonably be expected to lose in a given market sector. However, the inherent uncertainty of the Partnership’s and the Funds’ speculative trading and the recurrence in the markets traded by the Partnership and the Funds 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 and the Funds’ 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 in this section should not be considered to constitute any assurance or representation that the Partnership’s and the Funds’ losses in any market sector will be limited to Value at Risk or by the Partnership’s and the Funds’ attempts to manage its market risk.

     Exchange maintenance margin requirements have been used by the Partnership and the Funds 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 interval. 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.

     Value at Risk tables represent a probabilistic assessment of the risk of loss in market risk sensitive instruments. With the exception of CFM, the Partnership’s advisors currently trade the Partnership’s assets indirectly in master fund managed accounts over which they have been granted limited authority to make trading decisions. CFM directly trades a managed account in the Partnership’s name. The first two trading Value at Risk tables reflect the market sensitive instruments held by the Partnership directly and through its investment in the Funds as of March 31, 2011 and December 31, 2010. The remaining trading Value at Risk tables reflect the market sensitive instruments held by the Partnership directly (i.e., in the managed account in the Partnership’s name traded by CFM) and indirectly by each Fund separately.

     The following tables indicate the trading Value at Risk associated with the Partnership’s open positions by market category as of March 31, 2011 and December 31, 2010. As of March 31, 2011, the Partnership’s total capitalization was $25,314,288.

						% of Total
Market Sector		Value at Risk				Capitalization
Currencies		$	1,007,648				3.98	%
Energy			612,887				2.42	%
Grains			97,131				0.39	%
Indices			398,015				1.57	%
Interest Rates U.S.			337,766				1.33	%
Interest Rates Non-U.S.			338,843				1.34	%
Livestock			91,957				0.36	%
Metals			235,145				0.93	%
Softs			157,222				0.62	%
Total		$	3,276,614				12.94	%

     As of December 31, 2010, Partnership’s total capitalization was $25,749,357.

Market Sector		Value at Risk				% of Total Capitalization
Currencies		$	648,426				2.51%
Energy			532,001				2.06%
Grains			158,953				0.63%
Indices			326,903				1.27%
Interest Rates U.S.			665,373				2.58%
Interest Rates Non-U.S.			250,133				0.97%
Livestock			77,288				0.30%
Metals			180,045				0.70%
Softs			84,111				0.33%
Total		$	2,923,233				11.35%

     The following tables indicate the trading Value at Risk associated with the Partnership’s direct investments and indirect investments in the Funds by market category as of March 31, 2011 and December 31,2010 and the highest and lowest value at any point and the average value during the three months ended March 31, 2011 and for the twelve months ended December 31, 2010. All open position trading risk exposures of the Partnership/Funds have been included in calculating the figures set forth below. There have been no material changes in the trading Value at Risk information previously disclosed in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2010.

     As of March 31, 2011, the Partnership’s total capitalization was $25,314,288. The Partnership’s Value at Risk for the portion of its assets that are traded directly through CFM’s Discus 1.5x Leverage Program was as follows:

March 31, 2011

										Three months ended March 31, 2011
						% of Total				High				Low				Average
Market Sector		Value at Risk				Capitalization				Value at Risk				Value at Risk				Value at Risk*
Currencies		$	301,417				1.19	%		$	418,480			$	56,937				276,030
Energy			39,948				0.16	%			79,747				3,750				21,483
Grains			21,089				0.08	%			21,089				4,500				12,146
Indices			220,543				0.87	%			510,250				32,135				304,128
Interest Rates U.S.			86,200				0.34	%			221,400				28,054				154,083
Interest Rates Non -U.S.			90,049				0.36	%			210,939				148,195				161,467
Livestock			1,250				0.00	%**			2,250				1,250				1,750
Metals			74,957				0.30	%			112,146				11,076				57,573
Softs			14,100				0.06	%			23,616				1,350				13,914
Total		$	849,553				3.36	%

     As of December 31, 2010, the Partnership’s total capitalization was $25,749,357. The Partnership’s Value at Risk for the portion of its assets that are traded directly through CFM’s Discus 1.5x Program was as follows:

December 31, 2010

										Twelve months ended December 31, 2010
						% of Total				High				Low				Average
Market Sector		Value at Risk				Capitalization				Value at Risk				Value at Risk				Value at Risk*
Currencies		$	146,900				0.57	%		$	500,141			$	27,947				147,542
Energy			10,437				0.04	%			174,316				3,750				55,610
Grains			14,220				0.06	%			44,329				5,130				21,009
Indices			642,967				2.50	%			3,274,371				65,971				498,257
Interest Rates U.S.			88,450				0.34	%			276,200				6,486				140,566
Interest Rates Non -U.S.			73,656				0.30	%			482,956				23,301				226,827
Livestock			1,000				0.00	%**			11,300				250				2,108
Metals			21,750				0.08	%			53,496				4,000				21,239
Softs			4,500				0.01	%			47,938				4,144				16,710
Total		$	1,003,880				3.90	%

     As of March 31, 2011, Willowbridge Master’s total capitalization was $168,614,835. The Partnership owned approximately 2.3% of Willowbridge Master. As of March 31, 2011, Willowbridge Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to Willowbridge for trading) was as follows:

March 31, 2011

										Three months ended March 31, 2011
						% of Total				High				Low				Average
Market Sector		Value at Risk				Capitalization				Value at Risk				Value at Risk				Value at Risk*
Currencies		$	3,114,825				1.85	%		$	3,114,825			$	657,720			$	1,874,919
Energy			3,518,500				2.09	%			3,518,500				1,464,750				2,468,833
Grains			681,000				0.40	%			2,109,250				226,500				1,002,500
Interest Rates U.S.			415,250				0.25	%			1,011,711				302,400				361,238
Interest Rates Non-U.S.			1,685,948				1.00	%			2,134,289				1,229,606				1,489,274
Metals			3,110,127				1.84	%			3,587,000				1,760,207				2,736,952
Softs			2,629,700				1.56	%			2,629,700				850,500				2,240,400
Total		$	15,155,350				8.99	%

     As of December 31, 2010, Willowbridge Master’s total capitalization was $216,298,633. The Partnership owned approximately 2.1% of Willowbridge Master. As of December 31, 2010, Willowbridge Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to Willowbridge for trading) was as follows:

December 31, 2010

										Twelve months ended December 31, 2010
						% of Total				High				Low				Average
Market Sector		Value at Risk				Capitalization				Value at Risk				Value at Risk				Value at Risk*
Currencies		$	2,232,591				1.03	%		$	7,096,121			$	940,854			$	3,547,819
Energy			2,742,900				1.27	%			6,539,400				460,750				2,570,821
Grains			2,062,750				0.95	%			3,762,750				207,200				1,238,276
Interest Rates U.S.			774,255				0.36	%			3,269,700				243,600				1,143,161
Interest Rates Non-U.S.			1,908,692				0.88	%			5,489,653				289,858				2,700,503
Livestock			112,000				0.05	%			171,200				44,800				92,018
Metals			3,791,000				1.75	%			5,643,396				710,500				2,729,785
Softs			2,024,400				0.94	%			3,388,150				198,000				1,542,246
Total		$	15,648,588				7.23	%

     As of March 31, 2011, Graham Master’s total capitalization was $158,206,830. The Partnership owned approximately 3.0% of Graham Master. As of March 31, 2011, Graham Master’s Value at Risk for its assets (including the portion of the Partnership’s assets allocated to Graham for trading) was as follows:

March 31, 2011

										Three months ended March 31, 2011
						% of Total				High				Low				Average
Market Sector		Value at Risk				Capitalization				Value at Risk				Value at Risk				Value at Risk*
Currencies		$	10,526,667				6.65	%		$	14,645,028			$	5,042,022			$	9,712,741
Energy			1,121,320				0.71	%			1,221,130				430,473				715,112
Grains			478,650				0.30	%			624,700				436,750				497,655
Indices			4,094,626				2.59	%			11,180,261				3,276,704				6,785,775
Interest Rates U.S.			829,155				0.52	%			1,205,145				545,675				851,529
Interest Rates Non-U.S.			2,782,686				1.76	%			3,022,899				1,439,332				2,717,692
Livestock			63,600				0.04	%			63,600				38,000				42,867
Metals			1,048,048				0.66	%			1,637,443				616,825				1,030,163
Softs			375,073				0.24	%			491,327				241,774				354,051
Total		$	21,319,825				13.47	%