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 Period ended September 30, 1997 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 No. 33-90360
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.)
c/o Demeter Management Corp.
Two World Trade Center, New York, NY 62 Fl. 10048
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 392-5454
(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
<PAGE>
<TABLE>
DEAN WITTER DIVERSIFIED FUTURES FUND L.P.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
September 30, 1997
<CAPTION>
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements
Statements of Financial Condition September 30, 1997
(Unaudited) and December 31, 1996.....................2
Statements of Operations for the Quarters Ended
September 30, 1997 and 1996 (Unaudited)...............3
Statements of Operations for the Nine Months Ended
September 30, 1997 and 1996 (Unaudited)...............4
Statements of Changes in Partners' Capital for the
Nine Months ended September 30, 1997 and 1996
(Unaudited)...........................................5
Statements of Cash Flows for the Nine Months Ended
September 30, 1997 and 1996 (Unaudited)...............6
Notes to Financial Statements (Unaudited)......... 7-12
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations..13-20
Part II. OTHER INFORMATION
Item 1. Legal Proceedings..............................21-22
Item 5. Other Information.................................22
Item 6. Exhibits and Reports on Form 8-K..................23
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER DIVERSIFIED FUTURES FUND L.P.
STATEMENTS OF FINANCIAL CONDITION
<CAPTION>
September 30, December 31,
1997 1996
$ $
(Unaudited)
ASSETS
<S> <C> <C>
Equity in Commodity futures trading accounts:
Cash 139,549,772 166,737,088
Net unrealized gain (loss) on open contracts 7,275,895 (10,164)
Total Trading Equity 146,825,667 166,726,924
Interest receivable (DWR) 509,204 574,678
Due from DWR 49,418 -
Total Assets 147,384,289 167,301,602
LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Redemptions payable 2,605,612 2,811,995
Accrued management fee (DWFCM) 355,773 455,428
Accrued brokerage commissions (DWR) 342,938 208,243
Administrative expenses payable 155,517 106,568
Accrued transaction fees and costs 27,323 32,213
Total Liabilities 3,487,163 3,614,447
Partners' Capital
Limited Partners (147,650.508 and
177,301.806 Units, respectively) 141,709,552 161,609,600
General Partner (2,279.285 Units) 2,187,574 2,077,555
Total Partners' Capital 143,897,126 163,687,155
Total Liabilities and Partners' Capital 147,384,289 167,301,602
NET ASSET VALUE PER UNIT 959.76 911.49
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER DIVERSIFIED FUTURES FUND L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Quarters Ended September 30,
1997 1996
$ $
REVENUES
<S> <C> <C>
Trading profit:
Realized 2,501,495 2,891,666
Net change in unrealized 7,003,329 11,362,983
Total Trading Results 9,504,824 14,254,649
Interest Income (DWR) 1,572,409 1,602,020
Total Revenues 11,077,233 15,856,669
EXPENSES
Brokerage commissions (DWR) 2,477,991 2,918,020
Management fees (DWFCM) 1,098,735 1,188,119
Transaction fees and costs 208,337 200,962
Administrative expenses 51,000 9,000
Total Expenses 3,836,063 4,316,101
NET INCOME 7,241,170 11,540,568
NET INCOME ALLOCATION
Limited Partners 7,137,732 11,403,524
General Partner 103,438 137,044
NET INCOME PER UNIT
Limited Partners 45.38 60.13
General Partner 45.38 60.13
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER DIVERSIFIED FUTURES FUND L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
For the Nine Months Ended September 30,
1997 1996
$ $
REVENUES
<S> <C> <C>
Trading profit (loss):
Realized 9,092,269 (9,464,278)
Net change in unrealized 7,286,059 4,199,900
Total Trading Results 16,378,328 (5,264,378)
Interest Income (DWR) 4,975,667 5,120,541
Total Revenues 21,353,995 (143,837)
EXPENSES
Brokerage commissions (DWR) 8,391,865 10,273,703
Management fees (DWFCM) 3,559,022 3,844,588
Transaction fees and costs 684,099 780,077
Administrative expenses 144,000 49,000
Total Expenses 12,778,986 14,947,368
NET INCOME (LOSS) 8,575,009 (15,091,205)
NET INCOME (LOSS) ALLOCATION
Limited Partners 8,464,990 (14,933,404)
General Partner 110,019 (157,801)
NET INCOME (LOSS) PER UNIT
Limited Partners 48.27 (69.23)
General Partner 48.27 (69.23)
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER DIVERSIFIED FUTURES FUND L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
For the Nine Months Ended September 30, 1997 and 1996
(Unaudited)
<CAPTION>
Units of
Partnership Limited General
Interest Partners Partner Total
<S> <C> <C> <C> <C>
Partners' Capital
December 31, 1995 207,349.537 $192,029,423 2,134,341 $194,163,764
Net Loss - (14,933,404) (157,801) (15,091,205)
Redemptions (19,873.982) (16,498,367) - (16,498,367)
Partners' Capital
September 30, 1996 187,475.555 $160,597,652 $1,976,540 $162,574,192
Partners' Capital
December 31, 1996 179,581.091 $161,609,600 $2,077,555 $163,687,155
Net Income - 8,464,990 110,019 8,575,009
Redemptions (29,651.298) (28,365,038) - (28,365,038)
Partners' Capital
September 30, 1997 149,929.793 $141,709,552 $2,187,574 $143,897,126
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER DIVERSIFIED FUTURES FUND L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
For the Nine Months Ended September 30,
1997 1996
$ $
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) 8,575,009 (15,091,205)
Noncash item included in net income (loss):
Net change in unrealized (7,286,059) (4,199,900)
(Increase) decrease in operating assets:
Interest receivable (DWR) 65,474 161,032
Due from DWR (49,418) 116,467
Increase (decrease) in operating liabilities:
Accrued management fee (DWFCM) (99,655) (72,578)
Accrued brokerage commissions (DWR) (134,695) (341,876)
Administrative expenses payable 48,949 (17,633)
Accrued transaction fees and costs (4,890) (32,525)
Net cash provided by (used for) operating activities 1,384,105 (19,478,218)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in redemptions payable (206,383) 2,030,956
Redemptions of units (28,365,038) (16,498,367)
Net cash used for financing activities (28,571,421) <14,467,411)
Net decrease in cash (27,187,316) (33,945,629)
Balance at beginning of period 166,737,088 186,577,817
Balance at end of period 139,549,772 152,632,188
<FN>
The accompanying footnotes are an integral part
of these financial statements.
</TABLE>
<PAGE>
DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
The financial statements include, in the opinion of management,
all adjustments necessary for a fair presentation of the results
of operations and financial condition. The financial statements
and condensed notes herein should be read in conjunction with the
Partnership's December 31, 1996 Annual Report on Form 10-K.
1. Organization
Dean Witter Diversified Futures Fund Limited Partnership (the
"Partnership") is a limited partnership organized to engage in
the speculative trading of commodity futures and futures related
contracts, including forward contracts on foreign currencies
(collectively, "futures interests"). The general partner for the
Partnership is Demeter Management Corporation ("Demeter"). The
commodity broker for most of the Partnership's transactions is
Dean Witter Reynolds Inc. ("DWR"). The trading manager is Dean
Witter Futures & Currency Management, Inc. ("DWFCM"). Demeter,
DWR and DWFCM are all wholly owned subsidiaries of Morgan
Stanley, Dean Witter, Discover & Co. ("MSDWD").
On July 31, 1997, DWR closed the sale of its institutional
futures business and foreign currency trading operations to Carr
Futures Inc. ("Carr"), a subsidiary of Credit Agricole Indosuez.
Following the sale, Carr became the counterparty on the
Partnership's foreign currency trades. However, during a
transition period of about four months, DWR will continue to
<PAGE>
DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
perform certain services relating to the Partnership's futures
trading including clearance. After such transaction period, DWR
will continue to serve as a non-clearing commodity broker for the
Partnership with Carr providing all clearing services for
Partnership transactions.
2. Related Party Transactions
The Partnership's cash is on deposit with DWR and Carr in
commodity trading accounts to meet margin requirements as needed.
DWR pays interest on these funds based on current 13-week U.S.
Treasury Bill rates. Brokerage expenses incurred by the
Partnership are paid to DWR. Management and incentive fees
incurred by the Partnership are paid to DWFCM.
3. Financial Instruments
The Partnership trades futures and forward contracts in interest
rates, stock indices, commodities, currencies, petroleum and
precious metals. Futures and forwards represent contracts for
delayed delivery of an instrument at a specified date and 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. At September 30, 1997 and
December 31, 1996, open contracts were:
<PAGE>
DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Contract or Notional Amount
September 30, 1997 December 31,
1996 $ $
Exchange-Traded-Contracts
Financial Futures:
Commitments to Purchase 5,324,000 -
Commitments to Sell - -
Commodity Futures:
Commitments to Purchase 81,363,000 28,117,000
Commitments to Sell 60,617,000 84,112,000
Foreign Futures:
Commitments to Purchase 228,880,000 86,391,000
Commitments to Sell 65,269,000 163,838,000
Off-Exchange-Traded
Forward Currency Contracts
Commitments to Purchase 278,256,000 442,642,000
Commitments to Sell 275,115,000 573,157,000
A portion of the amounts indicated as off-balance-sheet risk in
forward currency contracts is due to offsetting forward
commitments to purchase and to sell the same currency on the same
date in the future. These commitments are economically
offsetting, but are not offset in the forward market until the
settlement date.
The net unrealized gains (losses) on open contracts are reported
as a component of "Equity in Commodity futures trading accounts"
on the Statements of Financial Condition and totaled $7,275,895
and $(10,164) at September 30, 1997 and December 31, 1996,
respectively. Of the $7,275,895 net unrealized gain on open
contracts at September 30, 1997, $4,492,936 related to exchange-
traded futures contracts and $2,782,959 related to off-exchange-
<PAGE>
DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
traded forward currency contracts. Of the $10,164 net unrealized
loss on open contracts at December 31, 1996, $3,667,477 related
to exchange-traded futures contracts and $(3,677,641) related to
off-exchange-traded forward currency contracts.
Exchange-traded futures contracts held by the Partnership at
September 30, 1997 and December 31, 1996 mature through December
1998 and June 1997, respectively. Off-exchange-traded forward
currency contracts held by the Partnership at September 30, 1997
and December 31, 1996 mature through January 1998 and February
1997, respectively. The contract amounts in the above table
represent the Partnership's extent of involvement in the
particular class of financial instrument, but not the credit risk
associated with counterparty nonperformance. The credit risk
associated with these instruments is limited to the amounts
reflected in the Partnership's Statements of Financial Condition.
The Partnership also has credit risk because either DWR or Carr
acts as the futures commission merchant or the counterparty, 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. DWR, as the
futures commission merchant for all of the Partnership's exchange-
traded-futures contracts, is required pursuant to regulations of
the Commodity Futures Trading Commission ("CFTC") to segregate
from
<PAGE>
DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
its own assets and for the sole benefit of its commodity
customers all funds held by DWR with respect to exchange-traded
futures contracts including an amount equal to the net unrealized
gain on all open futures contracts, which funds totaled
$144,013,245 and $170,404,565 at September 30, 1997 and December
31, 1996, 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 gain 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 Carr, the sole counterparty on all such contracts,
to perform. Carr's parent, Credit Agricole Indosuez, has
guaranteed Carr's obligations to the Partnership.
For the nine months ended September 30, 1997 and the year ended
December 31, 1996, the average fair value of financial
instruments held for trading purposes was as follows:
September 30, 1997
Assets Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 51,824,000 203,668,000
Commodity Futures 60,285,000 73,082,000
Foreign Futures 185,189,000 114,331,000
Off-Exchange-Traded Forward
Currency Contracts 270,314,000 395,392,000
<PAGE>
DEAN WITTER DIVERSIFIED FUTURES FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
December 31, 1996
Assets Liabilities
$ $
Exchange-Traded Contracts:
Financial Futures 198,372,000 116,558,000
Commodity Futures 92,560,000 69,758,000
Foreign Futures 282,199,000 109,444,000
Off-Exchange-Traded Forward
Currency Contracts 489,931,000 540,039,000
<PAGE>
Item 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Liquidity - The Partnership's assets are on deposit in futures
interest trading accounts with DWR and Carr, and are used by the
Partnership as margin to engage in futures interest trading. DWR
and Carr hold such assets in either designated depositories or in
securities approved by the CFTC for investment of customer funds.
The Partnership's assets held by DWR and Carr may be used as
margin solely for the Partnership's trading. Since the
Partnership's sole purpose is to trade in futures interests, it
is expected that the Partnership will continue to own such liquid
assets for margin purposes.
The Partnership's investment in futures interests may, from time
to time, be illiquid. Most United States futures exchanges limit
fluctuations in certain futures interest prices during a single
day by regulations referred to as "daily price fluctuations
limits" or "daily limits". Pursuant to such regulations, during
a single trading day no trades may be executed at prices beyond
the daily limit. If the price of a particular futures interest
has increased or decreased by an amount equal to the "daily
limit", positions in such futures interest can neither be taken
nor liquidated unless traders are willing to effect trades at or
within the limit. Futures interest prices have occasionally
moved the daily limit for several consecutive days with little or
no trading. Such market conditions could prevent the Partnership
from promptly liquidating its futures interests and result in
<PAGE>
restrictions on redemptions. However, since the commencement of
trading by the Partnership, there has never been a time when
illiquidity has affected a material portion of the Partnership's
assets.
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 and subjecting it to
substantial losses. Either of these market conditions could
result in restrictions on redemptions.
Capital Resources - The Partnership does not have, nor does it
expect to have, any capital assets. Redemptions of additional
Units of Limited Partnership Interest in the future will affect
the amount of funds available for investments in futures
interests in subsequent periods. As redemptions are at the
discretion of the Limited Partners, it is not possible to
estimate the amount and therefore the impact of future
redemptions.
Results of Operations
For the Quarter and Nine Months Ended September 30, 1997
For the quarter ended September 30, 1997, the Partnership's total
trading revenues including interest income were $11,077,233.
<PAGE>
During the third quarter, the Partnership posted a gain in Net
Asset Value per Unit. The most significant gains were recorded
in financial futures due primarily to an upward trend in global
interest rate futures prices during July and September. Smaller
profits were recorded in global stock index futures from short
Nikkei Index futures during the quarter. In the currency
markets, gains were recorded during July from short German mark
positions as the value of the U.S. dollar increased versus the
German mark. During August, the value of the German mark
increased versus the U.S. dollar, resulting in losses for the
Partnership. This upward price move resulted in new long German
mark positions, which profited during September. Additional
currency gains were recorded from transactions involving the
Malaysian ringgit, Australian dollar and Swedish krona. A
portion of these currency gains was offset by losses experienced
from transactions involving the British pound and Japanese yen.
In the energy markets, gains were recorded from long natural gas
positions as prices increased during August and September. In
metals, gains were recorded from long zinc futures during July
and long silver futures positions during September. Gains were
also recorded from short copper futures positions during August
and September. Trading losses in aluminum futures during August
offset a portion of these gains. In soft commodities and
agricultural markets, losses were recorded as a result of short-
term volatile price movement in a majority of the markets traded,
particularly, cocoa, cotton and corn futures. Total expenses for
the quarter were $3,836,063, resulting in net income of
<PAGE>
$7,241,170. The value of an individual Unit in the Partnership
increased from $914.38 at June 30, 1997 to $959.76 at September
30, 1997.
For the nine months ended September 30, 1997, the Partnership's
total trading revenues including interest income were
$21,353,995. During the first three-quarters of year, the
Partnership posted a gain in Net Asset Value per Unit. The most
significant trading gains were recorded in the currency markets
as a result of a strengthening in the value of the U.S. dollar
relative to most major currencies during the period January
through April. Additional currency gains were recorded during
the third quarter from transactions involving the German mark,
Malaysian ringgit, Swedish krona and Australian dollar. A
portion of these gains was offset by losses from transactions
involving the British pound and Canadian dollar during February,
March and May. In metals, gains experienced from short gold
futures positions in January and July from long zinc futures
positions in July and long silver futures positions in September
more than offset losses recorded from base metals futures during
the second quarter. A portion of the Partnership's overall
gains for the first nine months of the year was offset by losses
from trading energy futures as oil and gas prices moved without
consistent direction for a majority of the year. One exception
in the energy complex was natural gas futures prices, which
increased during the third quarter, thus resulting in gains from
long positions. In soft commodities, losses recorded from
trading
<PAGE>
cocoa, cotton and sugar futures during the third quarter offset
profits recorded during the first half of the year from long
coffee futures positions. In agricultural markets, losses were
recorded from trading corn futures during the third quarter and
soybean oil during the first half of the year. In financial
futures, trading gains recorded from short Nikkei Index and long
global interest rate futures during the third quarter more than
offset the losses experienced in global interest rate futures as
a result of short-term price volatility during the first four
months of the year. Total expenses for the period were
$12,778,986, resulting in net income of $8,575,009. The value of
an individual Unit in the Partnership increased from $911.49 at
December 31, 1996 to $959.76 at September 30, 1997.
For the Quarter and Nine Months Ended September 30, 1996
For the quarter ended September 30, 1996, the Partnership's total
trading revenues including interest income were $15,856,669.
During the third quarter, the Partnership posted an increase in
Net Asset Value per Unit. The most significant trading gains
were recorded in the financial futures markets from long
Australian, European and Japanese bond futures positions as
global interest rate futures prices moved steadily higher between
July and September. Additional gains were recorded in the energy
markets from long positions in crude, heating and gas oil futures
as prices in these markets trended higher throughout the quarter.
<PAGE>
Gains were also recorded in metals as a downward move in aluminum
futures prices during September resulted in gains from previously
established short positions. A portion of the overall gains for
the quarter was offset by losses experienced in the agricultural
currency and soft commodities markets. In the agricultural
markets, losses were recorded as soybean and corn futures prices
moved in an inconsistent pattern during most of the quarter.
Additional losses were recorded in the currency markets during
August from short Australian dollar positions as its value
reversed higher relative to the U.S. dollar and other world
currencies and from short Japanese yen positions as its value
increased sharply during late August. In soft commodities,
losses were recorded as a result of trendless movement in cotton
and coffee prices throughout most of the quarter. Total expenses
for the quarter were $4,316,101, resulting in net income of
$11,540,568. The value of an individual Unit in the Partnership
increased from $807.05 at June 30, 1996 to $867.18 at September
30, 1996.
For the nine months ended September 30, 1996, the Partnership's
total trading losses net of interest income were $143,837.
During the first nine months, the Partnership posted a decrease
in Net Asset Value per Unit. The most significant losses were
recorded in soft commodities as a result of choppy price movement
in coffee, cotton and cocoa futures during a majority of the
first nine months of the year. Additional losses were recorded
in the agricultural markets as a result of trendless price
movement in
<PAGE>
soybean products during the first and third quarters of the year.
Gains from long corn and wheat futures positions during the
second quarter offset a portion of these losses. In financial
futures trading, losses were recorded as a result of short-term
volatile movement in global stock index futures prices during the
first nine months of the year. In interest rate futures, gains
experienced during the third quarter from long Australian and
European bond futures positions more than offset losses recorded
during the first half of the year in U.S. and Japanese interest
rate futures. In the currency markets, losses were recorded
during February as a result of a sharp and sudden trend reversal
in the previous downward move in the value of the Japanese yen
and most European currencies, which had resulted in gains during
January. Smaller currency losses were recorded from transactions
involving the Canadian dollar. Trading gains experienced from
transactions involving the German mark relative to the U.S.
dollar and other world currencies during April and July helped to
mitigate currency losses. A portion of overall losses during the
first nine months of the year was offset by gains from short
aluminum futures positions as prices declined sharply during
September. These gains, coupled with smaller profits from
trading gold, more than offset losses experienced in silver and
other base metals during the first half of the year. Gains
experienced during the third quarter in the energy markets from a
strong upward move in heating, gas and crude oil futures prices
more than offset losses experienced from trading unleaded gas
futures earlier in the year. Total expenses for the period were
<PAGE>
$14,947,368, resulting in a net loss of $15,091,205. The value
of an individual Unit in the Partnership decreased from $936.41
at December 31, 1995 to $867.18 at September 30, 1996.
<PAGE>
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
On September 6, 10, and 20, 1996, and on March 13, 1997, similar
purported class actions were filed in the Superior Court of the
State of California, County of Los Angeles, on behalf of all
purchasers of interests in limited partnership commodity pools
sold by DWR. Named defendants include DWR, Demeter, DWFCM, MSDWD
(all such parties referred to hereafter as the "Dean Witter
Parties"), the Partnership, certain other limited partnership
commodity pools of which Demeter is the general partner, and
certain trading advisors to those pools. On June 16, 1997, the
plaintiffs in the above actions filed a consolidated amended
complaint. Similar purported class actions were also filed on
September 18 and 20, 1996 in the Supreme Court of the State of
New York, New York County, and on November 14, 1996 in the
Superior Court of the State of Delaware, New Castle County,
against the Dean Witter Parties and certain trading advisors on
behalf of all purchasers of interests in various limited
partnership commodity pools including the Partnership, sold by
DWR. Generally, these complaints allege, among other things,
that the defendants committed fraud, deceit, misrepresentation,
breach of fiduciary duty, fraudulent and unfair business
practices, unjust enrichment, and conversion in connection with
the sale and operation of the various limited Partnership
commodity pools. The complaints seek unspecified amounts of
compensatory and punitive damages and other relief. It is
possible that additional similar actions may be filed and that,
in the course of these actions, other parties
<PAGE>
could be added as defendants. The Dean Witter Parties believe
that they and the Partnership have strong defenses to, and they
and the Partnership will vigorously contest, the actions.
Although the ultimate outcome of legal proceedings cannot be
predicted with certainty, it is the opinion of management of the
Dean Witter Parties that the resolution of the actions will not
have a material adverse effect on the financial condition or the
results of operations of any of the Dean Witter Parties or the
Partnership.
Item 5. OTHER INFORMATION
On July 21, 1997, MSDWD, the sole shareholder of Demeter,
appointed a new Board of Directors consisting of Richard M.
DeMartini, Mark J. Hawley, Lawrence Volpe, Joseph G. Siniscalchi,
Edward C. Oelsner III, and Robert E. Murray.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(A) Exhibits - None.
(B) Reports on Form 8-K - None.
<PAGE>
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)
November 7, 1997 By: /s/ Patti L. Behnke
Patti L. Behnke
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.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule containssummary financial information extracted from Dean
Witter Diversified Futures Fund Limited Partnership and is qualified in
its entirety by reference to such financial instruments.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> SEP-30-1997
<CASH> 139,549,772
<SECURITIES> 0
<RECEIVABLES> 558,622<F1>
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 147,384,289<F2>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 147,384,289<F3>
<SALES> 0
<TOTAL-REVENUES> 21,353,995<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 12,778,986
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 8,575,009
<INCOME-TAX> 0
<INCOME-CONTINUING> 8,575,009
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,575,009
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Receivables include interest receivable of $509,204 and due from DWR
of $49,418.
<F2>In addition to cash and receivables, total assets include net unrealized
gain on open contracts of $7,275,895.
<F3>Liabilities include redemptions payable of $2,605,612, accrued brokerage
commissions of $355,773, accrued management fees of $342,938,
administrative expenses payable of $115,517 and accrued transaction fees
and costs of $27,323.
<F4>total revenue includes realized trading revenue of $9,092,269, net
change in unrealized of $7,286,059 and interest income of $4,975,667.
</FN>
</TABLE>
