UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(Amendment No. 1)

(Mark One)

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

For the Fiscal Year Ended December 31, 2008

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

_______________________

Commission File Number: 0-16898

PROFUTURES DIVERSIFIED FUND, L.P.

(Exact name of registrant as specified in its charter)

DELAWARE (State or other jurisdiction of incorporation or organization)		75-2197831 (I.R.S. Employer Identification No.)

ProFutures, Inc.

11719 Bee Cave Road

Suite 200

Austin, Texas 78738

(Address of principal executive offices)

(800) 348-3601

(Registrant’s telephone number)

__________________________

Copies to:

Nathan Ballard

Lauren Wolf

Sidley Austin LLP

One South Dearborn

Chicago, Illinois 60603

Page 1

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Limited Partnership Interests

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o  No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o  No x

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 o

Indicate by check mark if the disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o  No x

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

Not Applicable.

DOCUMENTS INCORPORATED BY REFERENCE

Registrant’s Financial Statements for the Years ended December 31, 2008, 2007 and 2006 with Reports of Independent Registered Public Accounting Firms, the annual report to securities holders for the fiscal year ended December 31, 2008, is incorporated by reference into Part II Item 8 and Part IV hereof and filed as an exhibit herewith. Portions of the Registrant’s Prospectus dated July 31, 1994 and Supplement dated January 31, 1995 Post-Effective Amendment No. 3 dated June 23, 1995 also are incorporated by reference in Part II and Part IV of this Form 10-K/A.

Page 2

EXPLANATORY NOTE

The Partnership is filing this Form 10-K/A to include amended financial statements of the Partnership solely to correct a typographical error in the Condensed Schedule of Investments. The financial statements as included in the Partnership’s Form 10-K filed with the Securities and Exchange Commission on April 15, 2009 (the “Original Form 10-K”) incorrectly stated the Partnership’s proportional share of an investment in an underlying commodity pool (Valhalla Synergy Master Fund Ltd. with fair value of $4,297,429) as existing as of December 31, 2008 when the proportional share of such investment should have been included as existing as of December 31, 2007. This error has been corrected in the financial statements in this filing. In addition, as required by Rule 12b-25 under the Securities Exchange Act of 1934, new certifications by the principal executive officer and principal financial officer of the General Partner are filed as exhibits.

Except as required to reflect the item described above, no attempt has been made in this Form 10-K/A to modify or update disclosures in the Original Form 10-K. This Form 10-K/A does not reflect events occurring after the filing of the Previous Forms 10-K or modify or update any related disclosures. Information not affected by the amendment is unchanged and reflects the disclosure made at the time of the filing of the Previous Forms 10-K. Accordingly, this form 10-K/A should be read in conjunction with the Previous Forms 10-K and the Fund’s filings made with the Securities and Exchange Commission subsequent to the filing of the Previous Forms 10-K.

Page 3

Item 8. Financial Statements and Supplementary Data.

Financial statements meeting the requirements of Regulation S-X are listed following this report.

Because the Partnership is a Smaller Reporting Company, as defined by Rule 229.10(f)(1), the supplementary financial information required by Item 302 of Regulation S-K is not applicable.

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a)

Financial Statements.

The following financial statements of the Partnership are included with the 2008 Report of Independent Registered Public Accounting Firm.

Report of Independent Registered Public Accounting Firm

Statements of Financial Condition

Condensed Schedules of Investments

Statements of Operations

Statements of Changes in Partners’ Capital

Statements of Cash Flows

Notes to Financial Statements

Pursuant to Rule 3-09 of Regulation S-X, the following financial statements for Winton Futures Fund, L.P. (US) and ProFutures Strategic Allocation Trust are included herewith along with their respective 2008 Reports of Independent Registered Public Accounting Firms.

Winton Futures Fund L.P. (US)

Report of Independent Registered Public Accounting Firm

Statements of Financial Condition

Condensed Schedules of Investments

Statements of Operations

Statements of Changes in Partners’ Capital

Notes to Financial Statements

ProFutures Strategic Allocation Trust

Report of Independent Registered Public Accounting Firm

Statements of Financial Condition

Condensed Schedules of Investments

Statements of Operations

Statements of Changes in Partners’ Capital

Notes to Financial Statements

The audited financial statements of two unaffiliated commodity funds in which the Partnership has underlying investments, SHK Diversified LLC and Valhalla Synergy Fund LLC (together, the “Commodity Funds”), are not included herewith. Although the Partnership is required to include the financial statements of the Commodity Funds in this Annual Report on Form 10-K pursuant to Rule 3-09 of Regulation S-X, the Commodity Funds are not willing to provide their audited financial statements to the Partnership, and, accordingly, the Partnership is unable to include them herein. The Partnership has no independent access to or control over the dissemination of the audited financial statements of these unaffiliated Commodity Funds. As of March 16, 2009, the Partnership no longer has any amounts invested in SHK Diversified LLC.

Page 4

(b)

Exhibits.

	*1.1	Form of Selling Agreement between the Partnership and ProFutures Financial Group, Inc.
	*1.2	Form of Additional Selling Agents Agreement between ProFutures Financial Group, Inc. and certain Additional Selling Agents.
	*3.1	Agreement of Limited Partnership (attached to the Prospectus as Exhibit A).
	*3.2	Subscription Agreement and Power of Attorney (attached to the Prospectus as Exhibit B).
	*3.3	Request for Redemption Form (attached to the Prospectus as Exhibit C).
	*5.1	Opinion of Counsel as to the legality of the Units.
	*8.1	Tax Opinion of Counsel.
	*10.4	Form of Consulting Agreement between the Registrant and Kenmar Global Strategies Inc.
	*10.6	Form of Amended and Restated Stock Subscription Agreement by and between ABN AMRO Incorporated and ProFutures, Inc.
	31.01	Certification of Gary D. Halbert, President, pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934.
	31.02	Certification of Debi B. Halbert, Chief Financial Officer, pursuant to Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934.
	32.01	Certification of Gary D. Halbert, President, pursuant to 18 U.S.C. Section 1350 as enacted by Section 906 of The Sarbanes-Oxley Act of 2002.
	32.02	Certification of Debi B. Halbert, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350 as enacted by Section 906 of The Sarbanes-Oxley Act of 2002.

(c)

Financial Statement Schedules.

Not applicable or information included in the financial statements.

____________________

The foregoing forms of exhibits were filed in the April 6, 1987 Registration Statement No. 33-13008 and/or Post-Effective Amendment No. 1 thereto filed March 11, 1988, and/or the June 5, 1991 Registration Statement No. 33-41073, and/or Pre-Effective Amendment No. 1 thereto filed August 8, 1991, and/or Post-Effective Amendment No. 1 thereto filed March 26, 1992; and/or the October 14, 1992 Registration Statement No. 33-53324, and/or the November 17, 1992 Pre-effective Amendment No. 1 thereto and/or the July 2, 1993 Registration Statement No. 33-65596, and/or the Pre-Effective Amendment No. 1 thereto filed August 16, 1993, and Supplement dated December 3, 1993, Post-Effective Amendment No. 2 thereto filed June 30, 1994 and Supplement dated January 31, 1995, and/or Post-Effective Amendment No. 3 dated June 23 1995; and/or Form 10-K for the year ended 2001; and/or Form 10-Q for the quarter ended June 30, 2002. Accordingly, such exhibits are incorporated herein by reference and notified herewith.

Page 5

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Partnership has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	PROFUTURES DIVERSIFIED FUND, L.P.
	(Partnership)



April 27, 2009	By /s/ GARY D. HALBERT
Date		Gary D. Halbert, President and Director
		ProFutures, Inc.
		General Partner



April 27, 2009	By /s/ DEBI B. HALBERT
Date		Debi B. Halbert, Chief Financial Officer,
		Treasurer and Director
		ProFutures, Inc.
		General Partner

Page 6

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated.



April 27, 2009	By /s/ GARY D. HALBERT
Date		Gary D. Halbert, President and Director
		ProFutures, Inc.
		General Partner



April 27, 2009	By /s/ DEBI B. HALBERT
Date		Debi B. Halbert, Chief Financial Officer,
		Treasurer and Director
		ProFutures, Inc.
		General Partner

Page 7

PROFUTURES DIVERSIFIED FUND, L.P.

ANNUAL REPORT

December 31, 2008

PROFUTURES DIVERSIFIED FUND, L.P.

______________________

TABLE OF CONTENTS

______________________

		PAGES


Report of Independent Registered Public Accounting Firm		F-2

Financial Statements

	Statements of Financial Condition	F-3

	Condensed Schedules of Investments	F-4 – F-8

	Statements of Operations	F-9

	Statements of Changes in Partners’ Capital (Net Asset Value)	F-10

	Statements of Cash Flows	F-11

	Notes to Financial Statements	F-12 – F-27

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the General Partner

ProFutures Diversified Fund, L.P.

We have audited the statements of financial condition, including the condensed schedules of investments, of ProFutures Diversified Fund, L.P. (the Partnership) as of December 31, 2008 and 2007 and the related statements of operations, changes in partners’ capital (net asset value) and of cash flows for each of the two years in the period ended December 31, 2008. These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ProFutures Diversified Fund, L.P. as of December 31, 2008 and 2007, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2008 in conformity with U.S. generally accepted accounting principles.

We were previously unable to complete audit procedures on the valuation of the Partnership’s investment in SHK Diversified LLC and, as a result, issued a qualified opinion on May 15, 2008 on the Partnership’s financial statements as of and for the year ended December 31, 2007. As described in Note 7 to the financial statements, the Partnership received all of the proceeds from its investment in SHK Diversified LLC as of March 16, 2009. As a result, we are now issuing an unqualified opinion on the Partnerships’ financial statements for the year ended December 31, 2007 which is different than the opinion we originally issued on May 15, 2008.

We were not engaged to examine management’s assessment of the effectiveness of ProFutures Diversified Fund’s internal control over financial reporting as of December 31, 2008, included in the accompanying management’s annual report on internal controls over financial reporting and, accordingly, we do not express an opinion thereon.

/s/McGladrey & Pullen, LLP

Chicago, Illinois

April 15, 2009

F-2

PROFUTURES DIVERSIFIED FUND, L.P.

STATEMENTS OF FINANCIAL CONDITION

December 31, 2008 and 2007

_______________

	2008		2007
ASSETS
Equity in broker trading accounts
Cash	$	6,035,775	$	1,433,626
Options on futures contracts, at fair value (premiums received - $0 and $34,500, respectively)		0		(32,775	)
Unrealized gain (loss) on open contracts		289,265		4,010

Deposits with broker		6,325,040		1,404,861

Cash		3,533		3,387
Investments in other commodity pools		12,583,933		16,889,459
Redemption receivable from other commodity pool		1,315,742		4,500,000

Total assets	$	20,228,248	$	22,797,707

LIABILITIES
Accounts payable	$	40,823	$	97,542
Commissions and other trading fees payable on open contracts		1,576		266
Incentive fees payable		185,497		0
Management fees payable (includes $129,324 and $61,761 payable to the General Partner at December 31, 2008 and 2007, respectively)		156,423		70,758
Redemptions payable		342,900		1,205,314

Total liabilities		727,219		1,373,880

PARTNERS’ CAPITAL (Net Asset Value)
Partners’ Capital (Non-restricted units):
General Partner – 173 and 187 units outstanding at December 31, 2008 and 2007, respectively		543,779		545,791
Limited Partners – 5,686 and 7,158 units outstanding at December 31, 2008 and 2007, respectively		17,851,493		20,878,036
Partners’ Capital (Side pocket/restricted units):
General Partner – 12 and 0 units outstanding at December 31, 2008 and 2007, respectively		32,232		0
Limited Partners – 403 and 0 units outstanding at and December 31, 2008 and 2007, respectively		1,073,525		0

Total partners’ capital (net asset value)		19,501,029		21,423,827

	$	20,228,248	$	22,797,707

See accompanying notes.

F-3

PROFUTURES DIVERSIFIED FUND, L.P.

CONDENSED SCHEDULES OF INVESTMENTS

December 31, 2008 and 2007

_______________

	2008						2007
	Fair			% of Net			Fair			% of Net
	Value			Asset Value			Value			Asset Value
LONG FUTURES CONTRACTS(1)

Description

U.S.
Agricultural	$	67,037			0.34	%	$	0			0.00	%
Energy		20,667			0.10	%		0			0.00	%
Interest rate		188,883			0.97	%		0			0.00	%
Stock index		33,545			0.17	%		0			0.00	%

Total U.S. long futures contracts	$	310,132			1.58	%	$	0			0.00	%

Foreign
Agriculture	$	1,226			0.01	%	$	0			0.00	%
Interest rate		18,911			0.10	%		0			0.00	%

Total foreign long futures contracts	$	20,137			0.11	%	$	0			0.00	%

SHORT FUTURES CONTRACTS(1)

Description

U.S.
Agricultural	$	(45,260	)		(0.23	)%	$	0			0.00	%
Currency		101			0.00	%		0			0.00	%
Energy		6,870			0.04	%		0			0.00	%
Interest rate		20,969			0.11	%		0			0.00	%
Stock index		(22,085	)		(0.12	)%		4,010			0.02	%

Total U.S. short futures contracts	$	(39,405	)		(0.20	)%	$	4,010			0.02	%

Foreign
Interest rate	$	2,654			0.01	%	$	0			0.00	%
Stock index		(4,253	)		(0.02	)%		0			0.00	%

Total foreign short futures contracts	$	(1,599	)		(0.01	)%	$	0			0.00	%

Total futures contracts	$	289,265			1.48	%	$	4,010			0.02	%

WRITTEN OPTIONS ON FUTURES CONTRACTS(1)

Stock index	$	0			0.00	%	$	(32,775	)		(0.15	)%

Total written options on futures contracts (premiums received – $0 and $34,500, respectively)	$	0			0.00	%	$	(32,775	)		(0.15	)%

_________________________

(1)	No individual futures or options on futures contract positions constitutes greater than 5% of the Partnership’s Net Asset Value at December 31, 2008 or 2007. Accordingly, the number of contracts and expiration dates are not presented.

See accompanying notes.

F-4

PROFUTURES DIVERSIFIED FUND, L.P.

CONDENSED SCHEDULES OF INVESTMENTS (CONTINUED)

December 31, 2008 and 2007

_______________

	2008					2007
	Fair		% of Net			Fair		% of Net
	Value		Asset Value			Value		Asset Value
INVESTMENTS IN OTHER COMMODITY POOLS

ProFutures Strategic Allocation Trust(1)
Investment Objective
To achieve capital appreciation by trading U.S. and Non U.S. futures and forward currency contracts
Redemption Provisions
Monthly, with 10 days notice	$	0		0.00	%	$	5,495,004		25.65	%

SHK Diversified LLC(2)
Investment Objective
To achieve capital appreciation by trading U.S. and Non U.S. futures and forward currency contracts		1,315,743		6.75	%		3,117,286		14.55	%

Valhalla Synergy Fund LLC
Investment Objective
To achieve capital appreciation by trading U.S. and Non U.S. futures and forward currency contracts
Redemption Provisions
Quarterly, with 30 days notice		2,740,835		14.05	%		4,419,668		20.63	%

Winton Futures Fund, L.P. (US) – Institutional Interests(3)
Investment Objective
To achieve capital appreciation by trading U.S. and Non U.S. futures contracts
Redemption Provisions
Monthly, with 15 days notice		8,527,355		43.73	%		3,857,501		18.01	%

Total investments in other commodity pools	$	12,583,933		64.53	%	$	16,889,459		78.44	%

_________________________

(1)

The Managing Owner of ProFutures Strategic Allocation Trust is ProFutures, Inc., the Partnership’s General Partner.

(2)

As of January 31, 2008, the managing member of SHK Diversified LLC (SHK) temporarily suspended future redemptions from this fund. This action was taken by the managing member due to a decline in the liquidity of the markets traded by this fund combined with a significant number of requests for redemptions from this fund. On April 28, 2008, the Partnership submitted a request for full redemption from SHK. Effective December 31, 2008, the managing member of SHK distributed approximately half of the Partnership’s investment in SHK to the Partnership, which was paid to the Partnership on January 15, 2009. Effective February 28, 2009, the managing member of SHK distributed the remaining portion of the Partnership’s investment in SHK to the Partnership, which was paid to the Partnership on March 16, 2009.

(3)	The General Partner of Winton Futures Fund, L.P. (US) is Altegris Portfolio Management, Inc., an affiliate of Altegris Investments, Inc.

See accompanying notes.

F-5

PROFUTURES DIVERSIFIED FUND, L.P.

CONDENSED SCHEDULES OF INVESTMENTS (CONTINUED)

December 31, 2008 and 2007

_______________

Proportional Share of Investments of Other Commodity Pools as of December 31, 2008(1)

Description	Investment Objective	Redemption Provisions	Fair Value			% of Net Asset Value

Valhalla Synergy Master Fund Ltd.	To achieve capital appreciation through the speculative trading of commodities, commodity futures contracts, options on futures contracts and commodities, and spot and forward contracts traded in U.S. and non-U.S. markets.	Monthly – with 30 days written notice	$	2,734,502			14.02	%

Money Market Mutual Fund Investments

Shares	Description	Cost	Fair Value			% of Net Asset Value

1,121,826	UBS Select Prime Institutional Fund	$ 1,121,826	$	1,121,826			5.75	%

U.S. Government Agency Bonds and Notes
Face Value	Description	Range of Maturity Dates	Fair Value			% of Net Asset Value

$1,278,210	Federal Home Loan Bank (0.03 – 4.35%)	01/2009 to 12/2010	$	1,281,568			6.57	%

Open Long and Short Futures Contracts

No. of Contracts	Description	Range of Expiration Dates	Fair Value			% of Net Asset Value

	Long Futures Contracts
	Metals
3	Copper	01/2009 to 05/2009	$	9,130			0.05	%
519	Gold	04/2009 to 12/2010	$	1,747,460			8.96	%
88	Silver	05/2009 to 07/2011	$	(593,490	)		(3.04	)%

	Short Futures Contracts
	Metals
9	Copper	02/2009 to 05/2009	$	(65,331	)		(0.34	)%
519	Gold	02/2009 to 06/2012	$	(2,537,283	)		(13.01	)%
88	Silver	03/2009 to 12/2011	$	(75,238	)		(0.39	)%

Open Long and Short Forward Contracts

No. of Contracts	Description	Range of Expiration Dates	Value			% of Net Asset Value

	Long Forward Contracts
	Metals
394	Aluminum	01/2009 to 12/2012	$	5,470,495			28.05	%
121	Copper	01/2009 to 12/2011	$	4,836,078			24.80	%

	Short Forward Contracts
	Metals
349	Aluminum	01/2009 to 12/2012	$	(4,626,265	)		(23.72	)%
114	Copper	01/2009 to 12/2011	$	(4,446,044	)		(22.80	)%

See accompanying notes.

F-6

PROFUTURES DIVERSIFIED FUND, L.P.

CONDENSED SCHEDULES OF INVESTMENTS (CONTINUED)

December 31, 2008 and 2007

_______________

Purchased Options on Futures Contracts

No. of Contracts	Description	Range of Expiration Dates	Fair Value	% of Net Asset Value
	Metals
14	Aluminum	01/2009 to 12/2011	$126,957	0.65 %
14	Copper	01/2009 to 12/2010	$235,909	1.21 %

Written Options on Futures Contracts

No. of Contracts	Description	Range of Expiration Dates	Fair Value	% of Net Asset Value
	Metals
29	Aluminum	01/2009 to 12/2011	$(105,759)	0.54 %
14	Copper	01/2009 to 12/2010	$(346,786)	1.78 %

Physical Inventory
	Description		Fair Value	% of Net Asset Value
	Metals
	Aluminum		$ 32,010	0.16 %
	Copper		$1,639,383	8.41 %

_______________

(1)

Represents the Partnership’s proportional share of other commodity pool’s individual underlying investments and open futures contracts which exceed 5% of the Partnership’s Net Asset Value at December 31, 2008. In certain situations, open futures contracts that are less than 5% of the Partnership’s Net Asset Value at December 31, 2008 may be presented to better indicate the Partnership’s net exposure to a particular underlying commodity.

See accompanying notes.

F-7

PROFUTURES DIVERSIFIED FUND, L.P.

CONDENSED SCHEDULES OF INVESTMENTS (CONTINUED)

December 31, 2008 and 2007

_______________

Proportional Share of Investments of Other Commodity Pools as of December 31, 2007(1)

Description	Investment Objective	Redemption Provisions	Fair Value	% of Net Asset Value
Valhalla Synergy Master Fund Ltd.	To achieve capital appreciation through the speculative trading of commodities, commodity futures contracts, options on futures contracts and commodities, and spot and forward contracts traded in U.S. and non-U.S. markets.	Monthly – with 30 days written notice	$4,297,429	20.06 %

Money Market Mutual Fund Investments

Shares	Description		Cost	Fair Value	% of Net Asset Value

2,603,841	UBS Select Prime Institutional Fund		$2,603,841	$2,603,841	12.15%

Open Long and Short Futures Contracts

No. of Contracts	Description	Range of Expiration Dates		Fair Value	% of Net Asset Value

	Long Futures Contracts
	Metals
2,939	Gold	04/2008 to 12/2010		$15,781,819	73.66%
661	Silver	05/2008 to 07/2010		$2,095,969	9.78%

	Short Futures Contracts
	Metals
2,964	Gold	02/2008 to 06/2012		$(10,928,866)	(51.01)%
668	Silver	03/2008 to 12/2010		$(950,826)	(4.44)%

Open Long and Short Forward Contracts

No. of Contracts	Description	Range of Expiration Dates	Fair Value	% of Net Asset Value

	Long Forward Contracts
	Metals
313	Copper	01/2008 to 12/2011	$9,141,316	42.67%
336	Aluminum	01/2008 to 12/2011	$2,107,432	9.84%

	Short Forward Contracts
	Metals
314	Copper	01/2008 to 12/2011	$(8,743,537)	(40.81)%
341	Aluminum	01/2008 to 12/2011	$(2,249,393)	(10.50)%

_______________

(1)

Represents the Partnership’s proportional share of other commodity pool’s individual underlying investments and open futures and forward contracts which exceed 5% of the Partnership’s Net Asset Value at December 31, 2007. In certain situations open futures contracts that are less than 5% of the Partnership’s Net Asset Value may be presented to indicate the Partnership’s net exposure to a particular underlying commodity.

See accompanying notes.

F-8

PROFUTURES DIVERSIFIED FUND, L.P.

STATEMENTS OF OPERATIONS

For the Years Ended December 31, 2008 and 2007

_______________

	2008 Non-restricted			2008 Side pocket/ restricted			2008 Total			2007 Total
TRADING AND INVESTING GAINS (LOSSES)
Gain (loss) from futures and options on futures trading
Realized	$	1,061,006		$	0		$	1,061,006		$	(596,059	)
Change in unrealized		283,530			0			283,530			(478,142	)
Brokerage commissions		(116,150	)		0			(116,150	)		(281,061	)

Gain (loss) from futures and options on futures trading		1,228,386			0			1,228,386			(1,355,262	)
Gain (loss) from trading of forward currency contracts and options on forward currency contracts
Realized		0			0			0			467,487
Change in unrealized		0			0			0			(371,164	)

Gain (loss) from trading of forward currency contracts and options on forward currency contracts		0			0			0			96,323
Income (loss) from investments in other commodity pools, net		1,452,633			(104,924	)		1,347,709			492,472

Total trading and investing gains (losses)		2,681,019			(104,924	)		2,576,095			(766,467	)

NET INVESTMENT INCOME (LOSS)
Income
Interest income		37,120			0			37,120			182,150

Expenses
Incentive fees		383,650			0			383,650			69,916
Management fees (includes $683,889 and $951,279 charged by the General Partner for the years ended December 31, 2008 and 2007, respectively)		796,035			74,671			870,706			1,112,227
Operating expenses		344,501			96,860			441,361			430,033

Total expenses		1,524,186			171,531			1,695,717			1,612,176

General Partner management fees waived		(77,739	)		0			(77,739	)		(114,074	)

Net expenses		1,446,447			171,531			1,617,978			1,498,102

Net investment income (loss)		(1,409,327	)		(171,531	)		(1,580,858	)		(1,315,952	)

NET INCOME (LOSS)	$	1,271,692		$	(276,455	)	$	995,237		$	(2,082,419	)

NET INCOME (LOSS) PER GENERAL AND LIMITED PARTNER UNIT
(based on weighted average number of units outstanding during the year of 6,189,924 and 8,364, respectively)	$	205.48		$	(299.19	)		(1)		$	(248.97	)

INCREASE (DECREASE) IN NET ASSET VALUE PER GENERAL AND LIMITED PARTNER UNIT	$	223.08		$	(299.36	)		(1)		$	(247.57	)

_______________

(1)	A total net income (loss) per general and limited partnership Unit and a total for the increase (decrease) in Net Asset Value per general and limited partnership Unit are not presented as the amounts are instead shown for each separate class of Units.

See accompanying notes.

F-9

PROFUTURES DIVERSIFIED FUND, L.P.

STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL (NET ASSET VALUE)

For the Years Ended December 31, 2008 and 2007

_______________

	Total Number of			Partners’ Capital
	Units			General			Limited			Total
Non-restricted units

Balances at December 31, 2006		8,903			592,117			27,581,995			28,174,112

Net (loss) for the year ended December 31, 2007					(46,326	)		(2,036,093	)		(2,082,419	)

Redemptions		(1,558	)		0			(4,667,866	)		(4,667,866	)

Balances at December 31, 2007		7,345			545,791			20,878,036			21,423,827

Transfer to side pocket/restricted		(923	)		(71,709	)		(2,664,700	)		(2,736,409	)

Net income for the year ended December 31, 2008					37,465			1,234,227			1,271,692

Redemptions		(916	)		0			(2,671,425	)		(2,671,425	)

Transfer from side pocket/restricted(2)		353			32,232			1,075,355			1,107,587

Balances at December 31, 2008		5,859		$	543,779		$	17,851,493		$	18,395,272

Side pocket/restricted units

Balances at December 31, 2007		0		$	0		$	0		$	0

Transfer from non-restricted		923			71,709			2,664,700			2,736,409

Net (loss) for the year ended December 31, 2008					(7,245	)		(269,210	)		(276,455	)

Redemptions(1)		(92	)		0			(246,610	)		(246,610	)

Transfer to non-restricted(2)		(416	)		(32,232	)		(1,075,355	)		(1,107,587	)

Balances at December 31, 2008		415		$	32,232		$	1,073,525		$	1,105,757

Total Partners’ Capital (Net Asset Value) at December 31, 2006				$	592,117		$	27,581,995		$	28,174,112

Total Partners’ Capital (Net Asset Value) at December 31, 2007				$	545,791		$	20,878,036		$	21,423,827

Total Partners’ Capital (Net Asset Value) at December 31, 2008				$	576,011		$	18,925,018		$	19,501,029

Net Asset Value Per Unit
Non-restricted						Side pocket/restricted
December 31,						December 31,
2008		2007		2006		2008		2007
$	3,139.86	$	2,916.78	$	3,164.35	$	2,663.73	$	N/A

_______________

(1)

Side pocket/restricted unit redemptions have been recorded in accordance with the Statement of Financial Accounting Standards No. 150. Redemptions approved by the General Partner, prior to the period end, that are not effective until subsequent periods are recorded in the current period. Also includes the portion of the December 31, 2008 distribution from SHK related to partners who have completely redeemed from the Partnership and do not hold non-restricted units. Effective February 28, 2009, all partners who have completely redeemed from the Partnership and do not hold non-restricted units will be paid their final redemption in March 2009.

(2)

The Partnership recorded a receivable in the statement of financial condition for proceeds received in January 2009 from its investment in SHK that is held in side pocket/restricted units. As a result, half of the units held in the side pocket/restricted units were transferred and converted to non-restricted units at the December 31, 2008 non-restricted net asset value per unit.

See accompanying notes.

F-10

PROFUTURES DIVERSIFIED FUND, L.P.

STATEMENTS OF CASH FLOWS

For the Years Ended December 31, 2008 and 2007

_______________

	2008			2007
OPERATING ACTIVITIES
Net income (loss)	$	995,237		$	(2,082,419	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
(Income) from investments in other commodity pools, net		(1,347,709	)		(492,472	)
Change in operating assets and liabilities
(Increase) decrease in cash deposits with broker		(4,602,149	)		11,891,969
(Increase) decrease in option premiums paid (received)		(34,500	)		(28,625	)
(Increase) decrease in unrealized gain (loss) on open contracts		(283,530	)		478,142
(Increase) decrease in cash deposits in forward trading
collateral accounts		0			5,412,319
(Increase) decrease in net premiums paid on options on
forward currency contracts		0			3,294
(Increase) decrease in unrealized gain (loss) on open
forward currency contracts and options on
forward currency contracts		0			371,164
Additions to investments in other commodity pools		(10,690,000	)		(15,803,865	)
Redemptions from other commodity pools		19,527,493			4,245,000
(Decrease) increase in accounts payable		(56,719	)		43,536
(Decrease) increase in commissions and other
trading fees on open contracts		1,310			(5,685	)
(Decrease) increase in incentive fees payable		185,497			(62,651	)
(Decrease) increase in management fees payable		85,665			(168,219	)

Net cash provided by (used in) Operating Activities		3,780,595			3,801,488

FINANCING ACTIVITIES
Redemptions paid		(3,780,449	)		(3,801,305	)

Net cash provided by (used in) Financing Activities		(3,780,449	)		(3,801,305	)

Net cash increase (decrease) for the year		146			183

Cash at beginning of year		3,387			3,204

Cash at end of year	$	3,533		$	3,387

See accompanying notes.

F-11

PROFUTURES DIVERSIFIED FUND, L.P.

NOTES TO FINANCIAL STATEMENTS

_______________

Note 1.

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General Description of the Partnership

ProFutures Diversified Fund, L.P. (the Partnership) is a Delaware limited partnership, which operates as a commodity investment pool. The Partnership engages in the speculative trading of futures contracts, options on futures contracts, physical commodities, interbank forward currency contracts and options on interbank forward currency contracts, directly and through its investments in other commodity pools. The Partnership closed to investors in 1995 and will terminate at the end of December 2012, at which time the remaining assets will be distributed.

As more fully described in Note 7., effective April 1, 2008, the Partnership established a “side pocket/restricted” account for each investor. The Partnership transferred its interest in SHK Diversified LLC (SHK), which had a net asset value of $2,736,409 and a per unit value of $2,963.09 as of March 31, 2008, to a side pocket/restricted share class. Partners of record on April 1, 2008 have a proportional interest in the assets, liabilities and income or loss related to this side pocket.

Partners who have requested redemptions will continue to participate in any income or loss specifically from the SHK side pocket investment until such time as the Partnership receives its redemption proceeds or liquidation proceeds from SHK. The side pocket/restricted share class will also bear its proportionate share of the Partnership’s expenses, as well as all expenses directly related to this class’ establishment and existence. Effective December 31, 2008, SHK distributed approximately half ($1,315,742) of the Partnership’s investment in SHK to the Partnership, which was paid to the Partnership on January 15, 2009. Effective February 28, 2009, SHK distributed the remaining portion ($1,335,258) of the Partnership’s investment in SHK to the Partnership, which was paid to the Partnership on March 16, 2009.

Regulation

As a registrant with the Securities and Exchange Commission, the Partnership is subject to the regulatory requirements under the Securities Act of 1933 and the Securities Exchange Act of 1934. As a commodity investment pool, the Partnership is subject to the regulations of the Commodity Futures Trading Commission, an agency of the United States (U.S.) government which regulates most aspects of the commodity futures industry; rules of the National Futures Association, an industry self-regulatory organization; and the requirements of commodity exchanges, futures commission merchants, and interbank market makers through which the Partnership trades.

Method of Reporting

The Partnership’s financial statements are presented in accordance with accounting principles generally accepted in the United States of America, which require the use of certain estimates made by the Partnership’s management.

For purposes of both financial reporting and calculation of redemption value, Net Asset Value per Unit is calculated by dividing Net Asset Value by the total number of units outstanding.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from the estimates and assumptions utilized.

F-12

PROFUTURES DIVERSIFIED FUND, L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

_______________

Note 1.

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair Value of Financial Instruments

All of the Partnership’s investment assets and liabilities are considered financial instruments and are reflected at fair value, or at carrying amounts that approximate fair value because of the short maturity of the instruments.

On January 1, 2008, the Partnership adopted Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS No. 157). The adoption of SFAS No. 157 did not have a material impact on the Partnership’s financial position, results of operations or cash flows.

SFAS No. 157 defines fair value 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 and sets out a fair value hierarchy. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Inputs are broadly defined under SFAS No. 157 as assumptions market participants would use in pricing an asset or liability. The three levels of the fair value hierarchy under SFAS No. 157 are described below:

Level 1. Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2.

Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly. A significant adjustment to a Level 2 input could result in the Level 2 measurement becoming a Level 3 measurement.

Level 3.

Inputs are unobservable for the asset or liability.

The fair values of futures contracts are based upon exchange settlement prices. The Partnership uses futures contracts as part of its trading activities. These contracts are classified as Level 1 of the fair value hierarchy.

The fair values of Level 1 financial instruments at December 31, 2008, consisted of the following:

Futures contracts

$289,265

The Partnership’s investments in other commodity pools are reported in the statement of financial condition at fair value. Fair value ordinarily represents the Partnership’s proportionate share of each other commodity pool’s net asset value determined for each commodity pool in accordance with such commodity pool’s valuation policies and as reported by their management at the time of the Partnership’s valuation. Generally, the fair value of the Partnership’s investment in a commodity pool represents the amount that the Partnership could reasonably expect to receive from such commodity pool if the Partnership’s investment was redeemed at the time of valuation, based on information reasonably available at the time the valuation is made and that the Partnership believes to be reliable. The Partnership records its proportionate share of other commodity pools’ income or loss in the statement of operations. This financial instrument is classified in Level 3 of the fair value hierarchy.

F-13

PROFUTURES DIVERSIFIED FUND, L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

_______________

Note 1.

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair Value of Financial Instruments (Continued)

The fair values of Level 3 financial instruments at December 31, 2008, consisted of the following:

Investments in other commodity pools

$12,583,933

The following table presents a reconciliation of the activity for the investments in other commodity pools:

	Balance at January 1, 2008:	$16,889,459
	Income (loss) from investments in other commodity pools, net	1,347,709
	Additions and redemptions, net	(5,653,235)
	Transfers in and/or out of Level 3	0
	Balance at December 31, 2008:	$12,583,933

Income (loss) from investments in other commodity pools, net includes $780,220 attributable to the change in unrealized gain (loss) on the Partnership’s investments in other commodity pools held at December 31, 2008.

Futures and Forward Currency Contracts

Transactions are accounted for on the trade date. Gains or losses are realized when contracts are liquidated. Unrealized gains or losses on open contracts (the difference between contract trade price and market price) are reflected in the statement of financial condition as a net gain or loss, as there exists a right of offset of unrealized gains or losses in accordance with Financial Accounting Standards Board (FASB) Interpretation No. 39 – Offsetting of Amounts Related to Certain Contracts. Any change in net unrealized gain or loss from the preceding period is reported in the statement of operations. Brokerage commissions on futures contracts include other trading fees and are charged to expense when contracts are opened. Fair value of exchange-traded contracts is based upon exchange settlement prices. Fair value of non-exchange-traded contracts is based on third party quoted dealer values on the interbank market.

On January 1, 2008, the Partnership adopted FASB Interpretation No. 39-1, Amendment of FASB Interpretation No. 39 (FIN 39-1). FIN 39-1 defines “right of setoff” and specifies what conditions must be met for a derivative contract to qualify for this right of setoff. It also addresses the applicability of a right of setoff to derivative instruments and clarifies the circumstances in which it is appropriate to offset amounts recognized for multiple derivative instruments executed with the same counterparty under a master netting arrangement and fair value amounts recognized for the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) arising from the same master netting arrangement as the derivative instruments. The adoption of FIN 39-1 did not have a material impact on the Partnership’s financial statements.

F-14

PROFUTURES DIVERSIFIED FUND, L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

_______________

Note 1.

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Income Taxes

The Partnership is not subject to federal income taxes. The Partnership prepares calendar year U.S. and applicable state information tax returns and reports to the partners their allocable shares of the Partnership’s income, expenses and trading and investing gains or losses.

The Partnership has continued to evaluate the application of FASB Interpretation No. 48 (FIN 48) entitled Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109, and has determined that FIN 48 does not have a material impact on the Partnership’s financial statements. In connection with the application of FIN 48, the Partnership has elected an accounting policy to classify interest and penalties, if any, as interest expense. The Partnership files U.S. federal and state tax returns. The 2005 through 2008 tax years generally remain subject to examination by U.S. federal and most state tax authorities.

Foreign Currency Transactions

The Partnership’s functional currency is the U.S. dollar; however, it transacts business in currencies other than the U.S. dollar. Assets and liabilities denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the rates in effect at the date of the statement of financial condition. Income and expense items denominated in currencies other than the U.S. dollar are translated into U.S. dollars at the rates in effect during the period. Gains and losses resulting from the translation to U.S. dollars are reported in trading and investing in gains (losses) in the statements of operations.

Redemptions of Units

Redemptions payable represent redemptions approved by the General Partner prior to the period end, including those that are not effective until subsequent periods. These redemptions have been recorded as redemptions and redemptions payable, using the period end Net Asset Value per unit, in accordance with the provisions of Statement of Financial Accounting Standards No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. The change in redemptions payable from the previous reporting period due to change in Net Asset Value is reported in net income and then allocated. Redemptions payable related to side pocketed/restricted Units at December 31, 2008 and December 31, 2007 are $124,216 and $0, respectively.

Recently Issued Accounting Pronouncement

In March 2008, the FASB issued SFAS No. 161, Disclosure about Derivative Instruments and Hedging Activities, an Amendment of FASB Statement No. 133 (SFAS No. 161). SFAS No. 161 is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity’s derivative instruments and hedging activities and their effects on the entity’s financial position, financial performance, and cash flows. SFAS No. 161 applies to all derivative instruments within the scope of SFAS No. 133. It also applies to non-derivative hedging instruments and all hedged items designated and qualifying as hedges under SFAS No. 133. SFAS No. 161 amends the current qualitative and quantitative disclosure requirements for derivative instruments and hedging activities set forth in SFAS No. 133 and generally increases the level of disaggregation that will be required in an entity’s financial statements. SFAS No. 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of gains and losses on derivative instruments, and disclosures about credit-risk related contingent features in derivative agreements. SFAS No. 161 is effective prospectively for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. As this pronouncement is disclosure related only, adoption is not expected to have a material impact on the Partnership’s financial statements.

F-15

PROFUTURES DIVERSIFIED FUND, L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

_______________

Note 2.

GENERAL PARTNER

The General Partner of the Partnership is ProFutures, Inc., which conducts and manages the business of the Partnership. The Agreement of Limited Partnership requires the General Partner to contribute to the Partnership an amount in the aggregate equal to at least the greater of (i) 3% of the aggregate initial capital contributions of all partners or $100,000, whichever is less, or (ii) 1% of the aggregate initial capital contributions of all partners.

The Agreement of Limited Partnership also requires that the General Partner maintain in the aggregate a net worth at least equal to (i) the lesser of $250,000 or 15% of the aggregate initial capital contributions of any limited partnerships for which it acts as general partner and which are capitalized at less than $2,500,000; and (ii) 10% of the aggregate initial capital contributions of any limited partnerships for which it acts as general partner and which are capitalized at greater than $2,500,000.

ProFutures, Inc. has a callable stock subscription agreement with MF Global Ltd. (MFG), the Partnership’s broker, whereby MFG has subscribed to purchase (up to $7,000,000, subject to conditions set forth in the stock subscription agreement dated October 22, 2004) the number of shares of common stock of ProFutures, Inc. necessary to maintain the General Partner’s net worth requirements.

The Partnership pays the General Partner a monthly management fee of 1/4 of 1% (3% annually) of month-end Net Asset Value. The General Partner receives an additional monthly management fee of .0625% (.75% annually) of the Partnership’s month-end Net Asset Value for consulting services rendered to the Partnership.

Total management fees earned by ProFutures, Inc. for the years ended December 31, 2008 and 2007 were $683,889 and $951,279, respectively. Management fees payable to ProFutures, Inc. as of December 31, 2008 and 2007 were $129,324 and $61,761, respectively. Management fees payable at December 31, 2008 includes $74,672 payable to ProFutures, Inc. related to the side pocket/restricted share class. This amount was accrued throughout 2008 and was paid in February 2009. During the years ended December 31, 2008 and 2007, the General Partner waived $77,739 and $114,074, respectively, of its monthly management fee related to the value of the Partnership's net assets invested in ProFutures Strategic Allocation Trust, an affiliated fund also managed by ProFutures, Inc. The General Partner considers this waiver of management fees necessary for the period February 1, 2007 to May 31, 2008 (the period the Partnership was invested in ProFutures Strategic Allocation Trust) given ProFutures, Inc. receives a 2% per annum administration fee from ProFutures Strategic Allocation Trust.

Note 3.

CONSULTANTS

The Partnership maintains a consulting agreement with Altegris Investments, Inc. (the CTA Consultant) and Altegris Portfolio Management, Inc. (the CPO Consultant), collectively (the Consultants), whereby the Consultants recommend the selection and termination of the Partnership’s trading advisors and other commodity pools and the allocation and reallocation of the Partnership’s assets. The CPO Consultant is the general partner of Winton Futures Fund, L.P. (US). Pursuant to the consulting agreement, the Consultants receive a monthly consulting fee equal to .0208% (.25% annually) of the Partnership’s month-end Net Asset Value (as defined in the Consulting Agreement). Effective April 1, 2007, certain net assets of the Partnership invested with managers affiliated with the Consultants are excluded from the month-end Net Asset Value when computing the consulting fees due to the Consultants. In addition, the net assets of the Partnership invested with a certain commodity trading advisor are excluded from the month-end Net Asset Value when computing the consulting fees due to the Consultants since the Consultants earn a percentage of such commodity trading advisor’s incentive fee.

F-16

PROFUTURES DIVERSIFIED FUND, L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

_______________

Note 3.

CONSULTANTS (CONTINUED)

The consulting fee (included in management fees in the statement of operations) earned by the Consultants for the years ended December 31, 2008 and 2007 totaled $10,683 and $21,603, respectively. The consulting fee payable (included in management fees payable in the statement of financial condition) to the Consultants as of December 31, 2008 and 2007 was $1,880 and $272, respectively. In addition to the monthly consulting fee, the Consultants earn commissions for introducing the Partnership to certain commodity trading advisors and other commodity pools based on the number of trades entered on behalf of the Partnership.

Note 4.

COMMODITY TRADING ADVISORS

The Partnership has trading advisory contracts with commodity trading advisors to furnish investment management services to the Partnership. These trading advisors typically receive management fees ranging from 0% to 2% annually of Allocated Net Asset Value (as defined in each respective trading advisory agreement). In addition, the commodity trading advisors typically receive quarterly incentive fees ranging from 20% to 25% of Trading Profits (as defined). Total management fees earned by the trading advisors amounted to $98,395 and $139,345 for the years ended December 31, 2008 and 2007, respectively. Total incentive fees earned by the trading advisors amounted to $383,650 and $69,916 for the years ended December 31, 2008 and 2007, respectively.

Note 5.

SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS

Limited Partners have the right to redeem units as of any month-end upon ten (10) days' prior written notice to the Partnership. Redemptions will be made on the last day of the month for an amount equal to the net asset value per unit, as defined, represented by the units to be redeemed. The right to obtain redemptions is also contingent upon the Partnership's having property sufficient to discharge its liabilities on the redemption date and may be delayed if the General Partner determines that earlier liquidation of commodity interest positions to meet redemption payments would be detrimental to the Partnership or non-redeeming Limited Partners.

Under certain circumstances, including, but not limited to, the inability to liquidate commodity positions or a delay in payments due the Partnership from commodity brokers, banks, commodity pools or other persons, the Partnership may in turn delay payment to Partners requesting redemption of units. In that event, payment for redemption of such units will be made to Limited Partners as soon thereafter as is practicable. As discussed more fully in Note 7, effective April 1, 2008, the General Partner established a side pocket/restricted share class for the Partnership’s interest in SHK. A Partner may not redeem units from the side pocket/restricted share class until management of SHK distributes proceeds from the Partnership’s investment in SHK to the Partnership. Effective December 31, 2008, SHK distributed half of the Partnership’s investment in SHK to the Partnership. As a result, half of the units held in the side pocket/restricted units were transferred and converted to non-restricted units at the December 31, 2008 non-restricted Net Asset Value per unit or were paid their pro rata share of the proceeds if they did not hold non-restricted units. Effective February 28, 2009, SHK distributed the remaining portion of the Partnership’s investment in SHK to the Partnership. As a result, all of the units held in the side pocket/restricted units were transferred and converted to non-restricted units at the February 28, 2009 non-restricted Net Asset Value per unit or were paid their pro rata share of the proceeds if they did not hold non-restricted units.

F-17

PROFUTURES DIVERSIFIED FUND, L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

_______________

Note 6.

DEPOSITS WITH BROKER

The Partnership deposits funds with MFG to act as broker, subject to Commodity Futures Trading Commission regulations and various exchange and broker requirements. Margin requirements are satisfied by the deposit of cash with such broker. All assets with MFG are subject to being collateralized for any amounts due to MFG to meet margin and other broker or regulatory requirements. The Partnership earns interest income on cash deposited with the broker.

Note 7.

INVESTMENTS IN OTHER COMMODITY POOLS

The Partnership invests in other commodity pools, which are subject to the terms of the respective limited partnership agreements and offering memoranda of such other commodity pools, which may, among other things, delay or suspend withdrawal rights under certain circumstances.

Summarized information for these investments is as follows:

	ProFutures						Valhalla			Winton
	Strategic			SHK			Synergy			Futures Fund,
	Allocation Trust			Diversified LLC			Fund LLC			L.P. (US)			Totals

Net Asset Value

December 31, 2006	$	0		$	0		$	0		$	9,338,122		$	9,338,122

Additions		7,364,000			3,500,000			4,439,865			500,000			15,803,865

Income (loss)		(886,996	)		(102,714	)		229,803			1,252,379			492,472

Redemptions		(982,000	)		(280,000	)		(250,000	)		(7,233,000	)		(8,745,000	)

Net Asset Value

December 31, 2007		5,495,004			3,117,286			4,419,668			3,857,501			16,889,459

Additions		4,500,000			0			0			6,190,000			10,690,000

Income (loss)		567,489			(385,801	)		421,167			744,854			1,347,709

Redemptions		(10,562,493	)		(1,415,742	)		(2,100,000	)		(2,265,000	)		(16,343,235	)

Net Asset Value

December 31, 2008	$	0		$	1,315,743		$	2,740,835		$	8,527,355		$	12,583,933

ProFutures Strategic Allocation Trust

The Partnership’s investment in ProFutures Strategic Allocation Trust (the Trust) is subject to an administration fee, charged by ProFutures, Inc., of 2.00% per annum, monthly management fees, charged by the commodity trading advisors, of 2.00% per annum, and quarterly incentive fees, charged by the commodity trading advisors, of 20% of trading profits. The Partnership fully redeemed from the Trust on May 31, 2008. For the year ended December 31, 2008, the Partnership’s proportionate share of administration fees, management fees and incentive fees charged by the Trust were approximately $77,900, $42,700 and $0, respectively. For the year ended December 31, 2007, the Partnership’s proportionate share of administration fees, management fees and incentive fees charged by the Trust were approximately $107,000, $116,000 and $32,000, respectively.

F-18

PROFUTURES DIVERSIFIED FUND, L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

_______________

Note 7.

INVESTMENTS IN OTHER COMMODITY POOLS (CONTINUED)

ProFutures Strategic Allocation Trust (Continued)

Condensed financial information as of December 31, 2007 and for the year then ended and for the five month period ended May 31, 2008 is as follows (the Partnership fully redeemed from the Trust as of May 31, 2008):

	December 31,
Statement of Financial Condition	2007

Assets
Equity in broker trading accounts
Cash	$	3,876,110
Unrealized gain on open contracts		66,075

Deposits with broker		3,942,185

Cash and cash equivalents		2,493,158
Investment in Winton Futures Fund, L.P. (US) paid in advance		7,000,000
Net premiums paid on options on forward currency contracts		11,338
Unrealized (loss) on open forward currency contracts and options on forward currency contracts		(251,518	)
Other assets		1,250

Total assets	$	13,196,413

Liabilities
Accounts payable	$	25,665
Commissions payable		1,982
Management fee payable		69,326
Incentive fee payable		0
Other payables		21,869
Redemptions payable		340,686

Total liabilities		459,528

Total Capital (Net Asset Value)		12,736,885

	$	13,196,413

	Five Months Ended			For the Year Ended
Statements of Operations	May 31, 2008			December 31, 2007

Trading and investing gains (losses)
Realized	$	(101,694	)	$	(983,178	)
Change in unrealized		456,850			(814,024	)
Brokerage commissions		(12,745	)		(77,794	)

Total trading gains (losses)		342,411			(1,874,996	)

Income from investment in Winton Futures Fund, L.P. (US)		981,259			0

Total trading and investing gains (losses)		1,323,670			(1,874,996	)

Net investment income (loss)
Interest income		47,506			583,254

Expenses
Incentive fees		0			73,475
Management and other fees		217,083			583,881
Operating expenses		63,591			116,273

Total expenses		280,674			773,629

Net investment (loss)		(233,168	)		(190,375	)

Net income (loss)	$	1,090,502		$	(2,065,371	)

F-19

PROFUTURES DIVERSIFIED FUND, L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

_______________

Note 7.

INVESTMENTS IN OTHER COMMODITY POOLS (CONTINUED)

ProFutures Strategic Allocation Trust (Continued)

The accounting principles utilized by ProFutures Strategic Allocation Trust are consistent in all material respects with those utilized by the Partnership.

The Partnership’s investment in ProFutures Strategic Allocation Trust represents approximately 0% and 43.1% of the investee fund’s net asset value as of December 31, 2008 and 2007, respectively.

SHK Diversified LLC

As of January 31, 2008, the managing member of SHK Diversified LLC (SHK) temporarily suspended future redemptions. SHK’s managing member indicated to investors that this action was taken due to a decline in the liquidity of the markets traded by SHK combined with a significant number of requests for redemptions. On April 28, 2008, the Partnership submitted a request for full redemption from SHK. Effective December 31, 2008, SHK distributed approximately half ($1,315,742) of the Partnership’s investment in SHK to the Partnership which was paid to the Partnership on January 15, 2009. Effective February 28, 2009, SHK distributed the remaining portion ($1,335,258) of the Partnership’s investment in SHK to the Partnership which was paid to the Partnership on March 16, 2009.

The Partnership’s investment in SHK is stated at $1,315,743 and $3,117,286 at December 31, 2008 and 2007, respectively, and its proportionate share in the earnings (losses) of this investment for the years then ended of $(385,801) and $(102,714), respectively, is included in net income (loss) for the years then ended.

The General Partner established a side pocket/restricted share class for the Partnership’s interest in SHK effective April 1, 2008, until such time as these funds are released and can be valued with a reasonable degree of certainty. Investor units attributed to SHK were segregated into the side pocket while units not attributed to SHK continued to be available for redemption. Redemptions were paid in cash for the portion of the Partnership’s net assets not attributed to SHK while the net assets attributed to SHK were held in the side pocket. The side pocket/restricted share class also bore its proportionate share of the Partnership’s expenses, as well as all expenses directly related to this class’ establishment and operation. Effective February 28, 2009, the side pocket/restricted share class was terminated after all proceeds were received from the Partnership’s investment in SHK.

Investors in SHK are charged management fees of 6.00% per annum (in 2008, voluntarily reduced to 3.00% per annum by the Managing Member of SHK) and a profit share of 25% of trading profits. For the year ended December 31, 2008, the Partnership’s proportionate share of management fees and profit share charged by SHK were approximately $81,000 and $0, respectively. For the year ended December 31, 2007, the Partnership’s proportionate share of management fees and profit share charged by SHK were approximately $186,000 and $0, respectively.

F-20

PROFUTURES DIVERSIFIED FUND, L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

_______________

Note 7.

INVESTMENTS IN OTHER COMMODITY POOLS (CONTINUED)

SHK Diversified LLC (Continued)

Condensed financial information as of December 31, 2008 and 2007 and for the years then ended is as follows:

	December 31,			December 31,
Statements of Financial Condition	2008			2007

Assets
Money market funds	$	34,078,075		$	57,268,220
Equity in broker trading accounts
Cash (due to broker)		58,214,842			(114,907,191	)
Unrealized gain (loss) on open contracts		(33,879,348	)		128,343,818

Deposits with broker		58,413,569			13,436,627

Other assets		22,000			28,495

Total assets	$	58,435,569		$	70,733,342

Liabilities
Accounts payable	$	55,534		$	133,065
Commissions payable		54,229			161,822
Management fee payable		124,048			303,133
Incentive fee payable		4,686			4,686
Subscription received in advance		0			75,000
Redemptions payable		29,098,536			3,757,503

Total liabilities		29,337,033			4,435,209

Total Capital (Net Asset Value)		29,098,536			66,298,133

	$	58,435,569		$	70,733,342

	For the Year Ended			For the Year Ended
	December 31,			December 31,
Statements of Operations	2008			2007

Trading gains (losses)
Realized	$	158,094,631		$	(112,834,755	)
Change in unrealized		(162,223,165	)		113,795,613
Brokerage commissions		(3,565,740	)		(1,935,994	)

Total trading (losses)		(7,694,274	)		(975,136	)

Net investment income (loss)
Interest and dividend income		1,206,272			3,809,087

Expenses
Incentive fees		0			29,702
Management and other fees		1,531,615			3,951,943
Operating expenses		217,444			256,804

Total expenses		1,749,059			4,238,449

Net investment (loss)		(542,787	)		(429,362	)

Net (loss)	$	(8,237,061	)	$	(1,404,498	)

The accounting policies utilized by SHK Diversified LLC are consistent in all material respects with those utilized by the Partnership.

The Partnership’s investment in SHK represents approximately 4.5% and 4.7% of the investee fund’s net asset value as of December 31, 2008 and 2007, respectively.

F-21

PROFUTURES DIVERSIFIED FUND, L.P.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

_______________

Note 7.

INVESTMENTS IN OTHER COMMODITY POOLS (CONTINUED)

Valhalla Synergy Fund LLC

Valhalla Synergy Fund LLC invests substantially all of its assets through a “master-feeder” structure into Valhalla Synergy Master Fund Ltd. (the Master Fund), a Cayman Islands exempted company. Valhalla Synergy Fund LLC pays to the manager of the Master Fund a management fee of 2.00% per annum and an annual profit participation allocation of 20% of trading profits. For the years ended December 31, 2008 and 2007, the Partnership’s proportionate share of management fees charged by the Master Fund were approximately $70,000 and $81,500, respectively. For the years ended December 31, 2008 and 2007, the Partnership’s proportionate share of profit allocation charged by the Master Fund were approximately $105,292 and $57,000, respectively.

Valhalla Synergy Fund LLC condensed financial information primarily consists of their investment in the Master Fund and income is allocated from the Master Fund to Valhalla Synergy Fund LLC.

Valhalla Synergy Fund LLC net assets at December 31, 2008 and 2007 are $48,707,147 and $59,248,307, respectively. Total net income for the years ended December 31, 2008 and 2007 is $6,597,373 and $11,174,271, respectively.

The Partnership’s investment in Valhalla Synergy Fund LLC represents approximately 5.63% and 7.46% of the investee fund’s net asset value as of December 31, 2008 and 2007, respectively.

Management of the Partnership believes the accounting principles utilized by Valhalla Synergy Fund LLC are consistent in all material respects with those utilized by the Partnership.

Winton Futures Fund, L.P. (US) – Institutional Interests

Institutional Interests of Winton Futures Fund, L.P. (US) (formerly Class B Interests through May 2008) are charged management fees of 1.75% annually and incentive fees of 20% of trading profits. For the years ended December 31, 2008 and

PROFUTURES DIVERSIFIED FUND L P 10-K/A