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

FORM 10-K

[X] Annual report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [No Fee Required]
For the year ended December 31, 2000 or

[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [No Fee Required]
For the transition period from
________________to___________________
Commission File Number 0-17446

DEAN WITTER DIVERSIFIED FUTURES FUND II L.P.

(Exact name of registrant as specified in its Limited Partnership
Agreement)

DELAWARE 13-
3490286
(State or other jurisdiction of (I.R.S.
Employer
incorporation or organization)
Identification No.)

c/o Demeter Management Corporation
Two World Trade Center, - 62nd Flr., New York, N.Y.
10048 (Address of principal executive offices)
(Zip Code)


Registrant's telephone number, including area code (212)
392-5454

Securities registered pursuant to Section 12(b) of the Act:

Name of each
exchange
Title of each class on which
registered
None None

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

Units of Limited Partnership Interest

(Title of Class)

Indicate by check-mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _____

Indicate by check-mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (section 229.405 of this
chapter) is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of
this Form 10-K or any amendment of this Form 10-K. [X]

State the aggregate market value of the Units of Limited
Partnership Interest held by non-affiliates of the registrant.
The aggregate market value shall be computed by reference to the
price at which units were sold as of a specified date within 60
days prior to the date of filing: $7,719,211 at January 31, 2001.

DOCUMENTS INCORPORATED BY REFERENCE
(See Page 1)



DEAN WITTER DIVERSIFIED FUTURES FUND II L.P.
INDEX TO ANNUAL REPORT ON FORM 10-K
DECEMBER 31, 2000

Page No.


DOCUMENTS INCORPORATED BY REFERENCE. . . . . . . . . . . . .
. . . . 1

Part I .

Item 1.Business. . . . . . . . . . . . . . . . . . . . . . . .
2-4

Item 2.Properties. . . . . . . . . . . . . . . . . . . . . . .
. 4

Item 3.Legal Proceedings. . . . . . . . . . . . . . . . . . .
4-5

Item 4.Submission of Matters to a Vote of Security Holders. .
. 5

Part II.

Item 5.Market for the Registrant's Partnership Units
and Related Security Holder Matters. .. . . . . . . .
. . 6

Item 6.Selected Financial Data. . . . . . . . . . . . . . . .
. . 7

Item 7.Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . .
.8-19

Item 7A. Quantitative and Qualitative Disclosures About
Market Risk . . . . . . . . . . . . . . . . . . . . .
.19-31

Item 8.Financial Statements and Supplementary Data. . .. . . .
. 32

Item 9. Changes in and
Disagreements with Accountants on
Accounting and Financial Disclosure. . . . . . . . . .
. .32
Part III.

Item 10. Directors and
Executive Officers of the Registrant. .. 33-37

Item 11.Executive Compensation . . . . . . . . . . . . . . . .
. .37

Item 12. Security
Ownership of Certain Beneficial Owners
and Management. . . . . . . . . . . . . . . . . . . .
.. 37

Item 13. Certain
Relationships and Related Transactions . . . . 37-38

Part IV.

Item 14. Exhibits,
Financial Statement Schedules, and
Reports on Form 8-K . . . . . . . . . . . . . . . . . .
..39








DOCUMENTS INCORPORATED BY REFERENCE


Portions of the following documents are incorporated by
reference as follows:



Documents Incorporated Part of Form 10-
K

Partnership's Prospectus dated
October 28,
1988 I

Annual Report
to Dean Witter
Diversified Futures Fund II L.P.
Limited Partners for the year
ended December 31, 2000 II, III and IV































PART I

Item 1. BUSINESS

(a) General Development of Business. Dean Witter Diversified

Futures Fund II L.P. (the "Partnership") is a Delaware limited

partnership organized to engage primarily in the speculative

trading of commodity futures and forward contracts, physical

commodities, and other commodity interests.



The general partner for the Partnership is Demeter Management

Corporation ("Demeter"). The non-clearing commodity broker is

Dean Witter Reynolds, Inc. ("DWR"). The clearing commodity

brokers are Morgan Stanley & Co. Incorporated ("MS & Co.") and

Morgan Stanley & Co. International Limited ("MSIL"), which

provide clearing and execution services. Prior to May 2000, Carr

Futures Inc. provided clearing and execution services to the

Partnership. The trading manager is Dean Witter Futures &

Currency Management Inc. ("DWFCM" or the "Trading Manager").

Demeter, DWR, MS & Co., MSIL and DWFCM are wholly-owned

subsidiaries of Morgan Stanley Dean Witter & Co. ("MSDW").



The Partnership's net asset value per unit of limited partnership

interest ("Unit(s)") as of December 31, 2000 was $3,075.90,

representing an increase of 20.3 percent from the net asset value

per Unit of $2,556.25 at December 31, 1999. For a more detailed

description of the Partnership's business, see subparagraph (c).





(b) Financial Information about Segments. For financial

information reporting purposes, the Partnership is deemed to

engage in one industry segment, the speculative trading of

futures and forwards. The relevant financial information is

presented in Items 6 and 8.



(c) Narrative Description of Business. The Partnership is in the

business of speculative trading of futures and forwards, pursuant

to trading instructions provided by the Trading Manager. For a

detailed description of the different facets of the Partnership's

business, see those portions of the Partnership's Prospectus

dated October 28, 1988 (the "Prospectus"), incorporated by

reference in this Form 10-K, set forth below:

Facets of Business

1. Summary 1. "Summary of the Prospectus"
(Pages 2-7).

2. Commodity Markets 2. "The Commodities Markets"
(Pages 57-67).

3. Partnership's Commodity 3. "Trading Policies" (Pages
Trading Arrangements and
29-38). "The Trading
Policies Manager" (Pages 29-38).

4. Management of the Part- 4. "The Management
Agreement"
nership (Pages 39-41). "The
General Partner" (Pages
41-56) and "The Commodity
Broker" (Pages 56-57).
"The Limited Partnership
Agreement" (Pages 68-73).

5. Taxation of the Partner- 5. "Federal Income Tax
Aspects" ship's Limited Partners and "State and
Local
Income Tax Aspects"
(Pages 75-83).



(d) Financial Information about Geographic Areas

The Partnership has not engaged in any operations in foreign

countries; however, the Partnership (through the commodity

brokers) enters into forward contract transactions where foreign

banks are the contracting party and trades in futures and

forwards on foreign exchanges.


Item 2. PROPERTIES
The executive and administrative offices are located within the

offices of DWR. The DWR offices utilized by the Partnership are

located at Two World Trade Center, 62nd Floor, New York, NY

10048.



Item 3. LEGAL PROCEEDINGS

Similar class actions were filed in 1996 in California and New

York State courts. Each of these actions were dismissed in 1999.

However, in the New York State class action is still pending

because, plaintiffs appealed the trial court's dismissal of their

case on March 3, 2000.



On September 18 and 20, 1996, purported class actions were filed

in the Supreme Court of the State of New York, New York County,

on behalf of all purchasers of interests in limited partnership

commodity pools sold by DWR. Named defendants include DWR,

Demeter, DWFCM, MSDW, the Partnership, certain limited

partnership commodity pools of which Demeter is the general

partner and certain Trading Managers to those pools. A

consolidated and



amended complaint in the action pending in the Supreme Court of

the State of New York was filed on August 13, 1997, alleging that

the defendants committed fraud, breach of fiduciary duty, and

negligent misrepresentation in the sale and operation of the

various limited partnership commodity pools. The complaints

sought unspecified amounts of compensatory and punitive damages

and other relief. The New York Supreme Court dismissed the New

York action in November 1998, but granted plaintiffs leave to

file an amended complaint, which they did in early December 1998.

The defendants filed a motion to dismiss the amended complaint

with prejudice on February 1, 1999. By decision dated December

21, 1999, the New York Supreme Court dismissed the case with

prejudice. However, on March 3, 2000, plaintiffs appealed the

trial court's dismissal of their case.



Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.





















PART II

Item 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP UNITS AND
RELATED
SECURITY HOLDER MATTERS


(a) Market Information

There is no established public trading market for Units of the

Partnership.



(b) Holders

The number of holders of Units at December 31, 2000 was

approximately 395.



(c) Distributions

No distributions have been made by the Partnership since it

commenced trading operations on January 18, 1989. Demeter has

sole discretion to decide what distributions, if any, shall be

made to investors in the Partnership. Demeter currently does not

intend to make any distribution of Partnership profits.




















Item 6. SELECTED FINANCIAL DATA (in dollars)








For the Years Ended December 31,
2000 1999 1998
1997 1996

Total Revenues
(including interest) 2,174,535 (65,754) 1,559,110 2,490,979
643,498


Net Income (Loss) 1,452,113 (948,607) 543,088 1,247,087
(824,517)

Net Income (Loss)
Per Unit (Limited
& General Partners) 519.65 (268.20) 140.02 272.02
(122.41)


Total Assets 8,517,311 8,365,734 10,845,654 11,801,172
12,617,666


Total Limited
Partners' Capital 8,027,946 7,787,964 10,281,223 11,209,045
12,019,867


Net Asset Value Per
Unit 3,075.90 2,556.25 2
,824.45 2,684.43 2,412.41

























Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS


Liquidity. The Partnership deposits its assets with DWR as non-

clearing broker and MS & Co. and MSIL as clearing brokers in

separate futures and forwards trading accounts established for

the Trading Manager, which assets are used as margin to engage in

trading. The assets are held in either non-interest-bearing bank

accounts or in securities and instruments permitted by the

Commodity Futures Trading Commission ("CFTC") for investment of

customer segregated or secured funds. The Partnership's assets

held by the commodity brokers may be used as margin solely for

the Partnership's trading. Since the Partnership's sole purpose

is to trade in futures and forwards, it is expected that the

Partnership will continue to own such liquid assets for margin

purposes.



The Partnership's investment in futures and forwards may, from

time to time, be illiquid. Most U.S. futures exchanges limit

fluctuations in prices during a single day by regulations

referred to as "daily price fluctuations limits" or "daily

limits". Trades may not be executed at prices beyond the daily

limit. If the price for a particular futures contract has

increased or decreased by an amount equal to the daily limit,

positions in that futures contract can neither be taken nor

liquidated unless traders are willing to effect trades at or

within the limit. Futures prices have occasionally moved the

daily limit for several consecutive days with little or no

trading. These market conditions could



prevent the Partnership from promptly liquidating its futures

contracts and result in restrictions on redemptions.



There is no limitation on daily price moves in trading forward

contracts on foreign currency. 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.



The Partnership has never had illiquidity affect a material

portion of its assets.



Capital Resources. The Partnership does not have, or expect to

have, any capital assets. Redemptions of Units in the future

will affect the amount of funds available for investments in

futures and forwards in subsequent periods. It is not possible

to estimate the amount and therefore the impact of future

redemptions of Units.



Results of Operations.

General. The Partnership's results depend on its Trading Manager

and the ability of the Trading Manager's trading programs to take

advantage of price movements or other profit opportunities in the



futures and forwards markets. The following presents a summary

of the Partnership's operations for the three years ended

December 31, 2000 and a general discussion of its trading

activities during each period. It is important to note, however,

that the Trading Manager trades in various markets at different

times and that prior activity in a particular market does not

mean that such market will be actively traded by the Trading

Manager or will be profitable in the future. Consequently, the

results of operations of the Partnership are difficult to discuss

other than in the context of its Trading Manager's trading

activities on behalf of the Partnership as a whole and how the

Partnership has performed in the past.




At December 31, 2000, the Partnership's total capital was

$8,347,840, an increase of $294,026 from the Partnership's total

capital of $8,053,814 at December 31, 1999. For the year ended

December 31, 2000, the Partnership generated net income of

$1,452,113, and total redemptions aggregated $1,158,087.



For the year ended December 31, 2000, the Partnership recorded

total trading revenues, including interest income, of $2,174,535

and posted an increase in net asset value per Unit. In the

energy sector, profits of approximately 17.5% resulted primarily

from long positions in the natural gas and crude oil futures

markets. Natural gas saw its price rise to record levels in



2000. Recent low inventory levels, sluggish supply and cold

winter weather combined to push prices to such high levels. In

the crude oil market, gains were realized from long positions

earlier in the year as prices rose to nine-year highs on a

combination of cold weather, declining inventories and increasing

demand. In addition, concerns about future output levels from

the world's leading producer countries added to the upward price

momentum. Later in the year, however, profits resulted from

short positions as the price of crude oil futures fell on

expectations that Iraqi oil exports would resume and on fears

that the slowdown in the economy would curb demand while at the

same time increase supply. In the currency markets, gains of

approximately 13.5% were recorded primarily from short positions

in the euro, Swiss franc and Swedish krona as the value of these

European currencies weakened relative to the U.S. dollar amid

skepticism about Europe's economic outlook. Strong economic data

out of the U.S. and interest rate hikes in the U.S. also boosted

the dollar and, subsequently, added to the euro's difficulties.

Later in the year as the bullish trend in the U.S. dollar

reversed, additional gains were recorded from long positions in

the euro, Swiss franc and Swedish krona versus the U.S. dollar as

a result of new confidence in the European economy and overall

skepticism regarding the U.S. economy. Profits of approximately

1.7% were recorded in the agricultural markets primarily from

short positions in the corn market during the middle of the year

as the price of corn trended lower on favorable weather



conditions that resulted in good prospects for high crop yields.

A portion of these gains was offset by losses experienced in the

metals, stock index and soft commodities markets. The majority of

losses, approximately 7.1%, were experienced in the metals

markets primarily from aluminum futures. From a technical

standpoint, the price of aluminum traded in a very volatile

pattern throughout the year leaving, little opportunity for the

development of trends. In addition, long positions in this

market, particularly in the second half of the year, resulted in

losses as prices declined after concerns mounted that demand

would weaken amid a cooling of the U.S. economy. Losses of

approximately 5.0% were recorded in the global stock index

futures markets. The S&P 500 Index traded in a very choppy

pattern resulting in losses for both long and short positions.

Contributing to this price pattern was uncertainty over the state

of the U.S. economy. Total expenses for the year were $722,422,

resulting in net income of $1,452,113. The net asset value of a

unit increased from $2,556.25 at December 31, 1999 to $3,075.90

at December 31, 2000.



At December 31, 1999, the Partnership's total capital was

$8,053,814, a decrease of $2,521,152 from the Partnership's total

capital of $10,574,966 at December 31, 1998. For the year ended

December 31, 1999, the Partnership generated a net loss of

$948,607, and total redemptions aggregated $1,572,545.





For the year ended December 31, 1999, the Partnership recorded

total trading losses, net of interest income, of $65,754 and

posted a decrease in net asset value per Unit. The Partnership

experienced losses in the global interest rate futures markets,

approximately 8.92%, primarily from short Australian interest

rate futures positions as prices increased during July and August

on the temporary strength in U.S. bonds and weaker-than-expected

business spending data out of Australia. Additional losses were

recorded from short Japanese bond futures positions as prices

increased during the first and third quarters. In the currency

markets, losses of approximately 7.08% were recorded primarily

from Australian dollar positions. Throughout a majority of the

first quarter, losses were experienced from long Australian

dollar positions as its value dropped significantly relative to

the U.S. dollar on speculation regarding potential currency

devaluations in the Asian region. Early in the third quarter,

additional losses were recorded from long positions in this

currency due to depressed commodities prices, emerging market

concerns and on-going talks that China may eventually devalue its

currency. Newly established short positions in the Australian

dollar resulted in losses during September as its value

strengthened relative to the U.S. dollar following the rally in

gold prices. Offsetting currency gains of 3.76% were recorded

from Japanese yen positions, primarily long positions. During

the third quarter, gains were recorded from long positions in the

Japanese yen as the value of the yen climbed to a 44-month



high versus the U.S. dollar due to continued optimism over

Japan's economic recovery. The energy markets produced gains of

approximately 7.39%. During March, gains were recorded from long

positions in oil futures as prices moved significantly higher on

news that both OPEC and non-OPEC countries had reached an

agreement to cut total output beginning April 1st. Gains were

also recorded in this market complex during the third quarter

after OPEC ministers confirmed that they would uphold their

global cutbacks until April of next year. Total expenses for the

year were $882,853, resulting in a net loss of $948,607. The net

asset value of a Unit decreased from $2,824.45 at December 31,

1998 to $2,556.25 at December 31, 1999.



At December 31, 1998, the Partnership's total capital was

$10,574,966, a decrease of $913,260 from the Partnership's total

capital of $11,488,226 at December 31, 1997. For the year ended

December 31, 1998, the Partnership generated net income of

$543,088, and total redemptions aggregated $1,456,348.



For the year ended December 31, 1998, the Partnership recorded

total trading revenues, including interest income, of $1,559,110

and posted an increase in net asset value per Unit. Gains of

approximately 13.65% were recorded in the global interest rate

futures markets from bond futures in most major world countries

throughout the year. The most significant gains were recorded in

German, by approximately 5.66%, U.S., by approximately 4.06% and



Japanese bond futures, by approximately 2.99% from primarily long

positions during August and September as investors sought the

safety of fixed income investments from notable volatility in the

global financial markets. Additional profits were recorded from

short Japanese government bond futures positions during December

as prices declined amid a surge in Japanese bond yields, which

was attributed to news that Japan's Ministry of Finance would end

outright purchases of government debt. Total expenses for the

year were $1,016,022, resulting in net income of $543,088. The

net asset value of a Unit increased from $2,684.43 at December

31, 1997 to $2,824.45 at December 31, 1998.



The Partnership's overall performance record represents varied

results of trading in different futures and forwards markets.

For a further description of 2000 trading results, refer to the

letter to the Limited Partners in the accompanying Annual Report

to Limited Partners for the year ended December 31, 2000, which

is incorporated by reference to Exhibit 13.01 of this Form 10-K.

The Partnership's gains and losses are allocated among its

partners for income tax purposes.



Credit Risk.

Financial Instruments. The Partnership is a party to financial

instruments with elements of off-balance sheet market and credit

risk. The Partnership may trade futures and forwards in a

portfolio of agricultural commodities, energy products, foreign



currencies, interest rates, precious and base metals, soft

commodities, and stock indices. In entering into these

contracts, the Partnership is subject to the market risk that

such contracts may be significantly influenced by market

conditions, such as interest rate volatility, resulting in such

contracts being less valuable. If the markets should move

against all of the positions held by the Partnership at the same

time, and if the Trading Manager was unable to offset positions

of the Partnership, the Partnership could lose all of its assets

and investors would realize a 100% loss.



In addition to the Trading Manager's internal controls, the

Trading Manager must comply with the trading policies of the

Partnership. These trading policies include standards for

liquidity and leverage with which the Partnership must comply.

The Trading Manager and Demeter monitor the Partnership's trading

activities to ensure compliance with the trading policies.

Demeter may require the Trading Manager to modify positions of

the Partnership if Demeter believes they violate the

Partnership's trading policies.



In addition to market risk, in entering into futures and forwards

contracts there is a credit risk to the Partnership that the

counterparty on a contract will not be able to meet its

obligations to the Partnership. The ultimate counterparty or

guarantor of the Partnership for futures contracts traded in the



United States and the foreign exchanges on which the Partnership

trades is the clearinghouse associated with such exchange. In

general, a clearinghouse is backed by the membership of the

exchange and will act in the event of non-performance by one of

its members or one of its member's customers, which should

significantly reduce this credit risk. For example, a

clearinghouse may cover a default by drawing upon a defaulting

member's mandatory contributions and/or non-defaulting members'

contributions to a clearinghouse guarantee fund, established

lines or letters of credit with banks, and/or the clearinghouse's

surplus capital and other available assets of the exchange and

clearinghouse, or assessing its members. In cases where the

Partnership trades off-exchange forward contracts with a

counterparty, the sole recourse of the Partnership will be the

forward contracts counterparty.



There is no assurance that a clearinghouse or exchange will meet

its obligations to the Partnership, and Demeter and the commodity

brokers will not indemnify the Partnership against a default by

such parties. Further, the law is unclear as to whether a

commodity broker has any obligation to protect its customers from

loss in the event of an exchange or clearinghouse defaulting on

trades effected for the broker's customers. Any such obligation

on the part of a broker appears even less clear where the default

occurs in a non-U.S. jurisdiction.





Demeter deals with these credit risks of the Partnership in

several ways. First, it monitors the Partnership's credit

exposure to each exchange on a daily basis, calculating not only

the amount of margin required for it but also the amount of its

unrealized gains at each exchange, if any. The commodity brokers

inform the Partnership, as with all their customers, of its net

margin requirements for all its existing open positions, but do

not break that net figure down, exchange by exchange. Demeter,

however, has installed a system which permits it to monitor the

Partnership's potential margin liability, exchange by exchange.

As a result, Demeter is able to monitor the Partnership's

potential net credit exposure to each exchange by adding the

unrealized trading gains on that exchange, if any, to the

Partnership's margin liability thereon.



Second, the Partnership's trading policies limit the amount of

its net assets that can be committed at any given time to futures

contracts and require, in addition, a minimum amount of

diversification in the Partnership's trading, usually over

several different products. One of the aims of such trading

policies has been to reduce the credit exposure of the

Partnership to a single exchange and, historically, the

Partnership's exposure to any one exchange has typically amounted

to only a small percentage of its total net assets. On those

relatively few occasions where the Partnership's credit exposure

may climb above that level, Demeter deals with the situation on a



case by case basis, carefully weighing whether the increased

level of credit exposure remains appropriate. Material changes

to the trading policies may be made only with the prior written

approval of the Limited Partners owning more than 50% of Units

then outstanding.



Third, with respect to forward contract trading, the Partnership

trades with only those counterparties which Demeter, together

with DWR, have determined to be creditworthy. The Partnership

presently deals with MS & Co. as the sole counterparty on forward

contracts.



See "Financial Instruments" under Notes to Financial Statements

in the Partnership's Annual Report to Limited Partners for the

year ended December 31, 2000, which is incorporated by reference

to Exhibit 13.01 of this Form 10-K.



Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK

Introduction

The Partnership is a commodity pool involved in the speculative

trading of futures and forwards. The market-sensitive

instruments held by the Partnership are acquired for speculative

trading purposes only and, as a result, all or substantially all

of the Partnership's assets are at risk of trading loss. Unlike

an





operating company, the risk of market-sensitive instruments is

central, not incidental, to the Partnership's main business

activities.



The futures and forwards traded by the Partnership involve

varying degrees of related market risk. Market risk is often

dependent upon changes in the level or volatility of interest

rates, exchange rates, and prices of financial instruments and

commodities. Fluctuations in market risk based upon these

factors result in frequent changes in the fair value of the

Partnership's open positions, and, consequently, in its earnings

and cash flow.



The Partnership's total market risk is influenced by a wide

variety of factors, including the diversification among the

Partnership's open positions, the volatility present within the

markets, and the liquidity of the markets. At different times,

each of these factors may act to increase or decrease the market

risk associated with the Partnership.



The Partnership's past performance is not necessarily indicative

of its future results. Any attempt to numerically quantify the

Partnership's market risk is limited by the uncertainty of its

speculative trading. The Partnership's speculative trading may

cause future losses and volatility (i.e. "risk of ruin") that far





exceed the Partnership's experiences to date or any reasonable

expectations based upon historical changes in market value.



Quantifying the Partnership's Trading Value at Risk

The following quantitative disclosures regarding the

Partnership's market risk exposures contain "forward-looking

statements" within the meaning of the safe harbor from civil

liability provided for such statements by the Private Securities

Litigation Reform Act of 1995 (set forth in Section 27A of the

Securities Act of 1933 and Section 21E of the Securities Exchange

Act of 1934). All quantitative disclosures in this section are

deemed to be forward-looking statements for purposes of the safe

harbor, except for statements of historical fact.



The Partnership accounts for open positions using mark-to-market

accounting principles. Any loss in the market value of the

Partnership's open positions is directly reflected in the

Partnership's earnings, whether realized or unrealized, and its

cash flow. Profits and losses on open positions of exchange-

traded futures and forwards are settled daily through variation

margin.



The Partnership's risk exposure in the market sectors traded by

the Trading Manager is estimated below in terms of Value at Risk

("VaR"). The VaR model used by the Partnership includes many

variables that could change the market value of the Partnership's



trading portfolio. The Partnership estimates VaR using a model

based upon historical simulation with a confidence level of 99%.

Historical simulation involves constructing a distribution of

hypothetical daily changes in the value of a trading portfolio.



The VaR model takes into account linear exposures to price and

interest rate risk. Market risks that are incorporated in the

VaR model include equity and commodity prices, interest rates,

foreign exchange rates, and correlation among these variables.

The hypothetical changes in portfolio value are based on daily

percentage changes observed in key market indices or other market

factors ("market risk factors") to which the portfolio is

sensitive. The historical observation period of the Partnership's

VaR is approximately four years. The one-day 99% confidence

level of the Partnership's VaR corresponds to the negative change

in portfolio value that, based on observed market risk factors,

would have been exceeded once in 100 trading days.



VaR models, including the Partnership's, are continuously

evolving as trading portfolios become more diverse and modeling

techniques and systems capabilities improve. Please note that

the VaR model is used to numerically quantify market risk for

historic reporting purposes only and is not utilized by either

Demeter or the Trading Manager in their daily risk management

activities.





The Partnership's Value at Risk in Different Market Sectors

The following table indicates the VaR associated with the

Partnership's open positions as a percentage of total net assets

by primary market risk category as of December 31, 2000 and 1999.

As of both December 31, 2000 and 1999, the Partnership's total

capitalization was approximately $8 million.

Primary Market December 31, 2000
December 31, 1999
Risk Category Value at Risk Value at Risk

Interest Rate (2.79)% (0.22)%

Currency (1.64) (0.79)

Commodity (1.07) (0.80)

Equity (0.25) (0.16)

Aggregate Value at Risk (3.29)% (1.24)%



Aggregate Value at Risk represents the aggregate VaR of all the

Partnership's open positions and not the sum of the VaR of the

individual market categories listed above. Aggregate VaR will be

lower as it takes into account correlation among different

positions and categories.



The table above represents the VaR of the Partnership's open

positions at December 31, 2000 and 1999 only and is not

necessarily representative of either the historic or future risk

of an investment in the Partnership. Because the Partnership's

only business is the speculative trading of futures and forwards,

the composition of its trading portfolio can change significantly



over any given time period, or even within a single trading day.

Any changes in open positions could positively or negatively

materially impact market risk as measured by VaR.



The table below supplements the December 31, 2000 VaR by

presenting the Partnership's high, low and average VaR, as a

percentage of total net assets for the four quarterly reporting

periods from January 1, 2000 through December 31, 2000.



Primary Market Risk Category High Low Average

Interest Rate (2.79)% (0.57)% (1.62)%

Currency (2.78) (1.46) (1.88)

Commodity (2.40) (1.07) (1.80)

Equity (1.16) - (0.37)

Aggregate Value at Risk (3.29) (2.63)% (3.12)%

Limitations on Value at Risk as an Assessment of Market Risk

The face value of the market sector instruments held by the

Partnership is typically many times the applicable margin

requirements. Margin requirements generally range between 2% and

15% of contract face value. Additionally, the use of leverage

causes the face value of the market sector instruments held by

the Partnership to typically be many times the total

capitalization of the Partnership. The value of the

Partnership's open positions thus creates a "risk of ruin" not

usually found in other investments. The relative size of the

positions held may cause



the Partnership to incur losses greatly in excess of VaR within a

short period of time, given the effects of the leverage employed

and market volatility. The VaR tables above, as well as the past

performance of the Partnership, give no indication of such "risk

of ruin". In addition, VaR risk measures should be viewed in

light of the methodology's limitations, which include the

following:

past changes in market risk factors will not always result

in accurate predictions of the distributions and correlations of

future market movements;

changes in portfolio value in response to market movements

may differ from those of the VaR model;

VaR results reflect past trading positions while future risk

depends on future positions;

VaR using a one-day time horizon does not fully capture the

market risk of positions that cannot be liquidated or hedged

within one day; and

the historical market risk factor data used for VaR

estimation may provide only limited insight into losses that

could be incurred under certain unusual market movements.



The VaR tables above present the results of the Partnership's VaR

for each of the Partnership's market risk exposures and on an

aggregate basis at December 31, 2000 and 1999, and for the end of

the four quarterly reporting periods during calendar year 2000.





Since VaR is based on historical data, VaR should not be viewed

as predictive of the Partnership's future financial performance

or its ability to manage or monitor risk. There can be no

assurance that the Partnership's actual losses on a particular

day will not exceed the VaR amounts indicated above or that such

losses will not occur more than 1 in 100 trading days.



Non-Trading Risk

The Partnership has non-trading market risk on its foreign cash

balances not needed for margin. These balances and any market

risk they may represent are immaterial. At December 31, 2000,

the Partnership's cash balance at DWR was approximately 86% of

its total net asset value. A decline in short-term interest

rates will result in a decline in the Partnership's cash

management income. This cash flow risk is not considered to be

material.



Materiality, as used throughout this section, is based on an

assessment of reasonably possible market movements and any

associated potential losses taking into account the leverage,

optionality and multiplier features of the Partnership's market-

sensitive instruments.



Qualitative Disclosures Regarding Primary Trading Risk Exposures

The following qualitative disclosures regarding the Partnership's

market risk exposures - except for (A) those disclosures that are

statements of historical fact and (B) the descriptions of how the



Partnership manages its primary market risk exposures -

constitute forward-looking statements within the meaning of

Section 27A of the Securities Act and Section 21E of the

Securities Exchange Act. The Partnership's primary market risk

exposures as well as the strategies used and to be used by

Demeter and the Trading Manager for managing such exposures are

subject to numerous uncertainties, contingencies and risks, any

one of which could cause the actual results of the Partnership's

risk controls to differ materially from the objectives of such

strategies. Government interventions, defaults and

expropriations, illiquid markets, the emergence of dominant

fundamental factors, political upheavals, changes in historical

price relationships, an influx of new market participants,

increased regulation and many other factors could result in

material losses as well as in material changes to the risk

exposures and the risk management strategies of the Partnership.

Investors must be prepared to lose all or substantially all of

their investment in the Partnership.



The following were the primary trading risk exposures of the

Partnership as of December 31, 2000 by market sector. It may be

anticipated however, that these market exposures will vary

materially over time.



Interest Rate. The largest market exposure at December 31, 2000

was in the interest rate complex. Exposure was spread across





European, United States, Japanese and Australian interest rate

sectors. Interest rate movements directly affect the price of

the sovereign bond futures positions held by the Partnership and

indirectly affect the value of its stock index and currency

positions. Interest rate movements in one country as well as

relative interest rate movements between countries materially

impact the Partnership's profitability. The Partnership's

primary interest rate exposure is generally to interest rate

fluctuations in the United States and the other G-7 countries.

The G-7 countries consist of France, U.S., Britain, Germany,

Japan, Italy and Canada. However, the Partnership also takes

futures positions in the government debt of smaller nations -

e.g. Australia. Demeter anticipates that G-7 and Australian

interest rates will remain the primary interest rate exposure of

the Partnership for the foreseeable future. The changes which

have the most effect on the Partnership are in short- to

intermediate-term as opposed to long-term rates as most of the

speculative interest rate futures positions held by the

Partnership are in short-term and medium-term instruments.



Currency. The next most significant market exposure of the

Partnership at December 31, 2000 was in the foreign exchange

complex. The currency exposure is to exchange rate fluctuations,

primarily those which disrupt the historical pricing

relationships between different currencies and currency pairs.





Interest rate changes as well as political and general economic

conditions influence these fluctuations. The Partnership trades

in a large number of currencies, including cross-rates - i.e.,

positions between two currencies other than the U.S. dollar. The

Partnership's major exposures were in the euro currency crosses

and outright U.S. dollar positions. Outright positions consist

of the U.S. dollar vs. other currencies. These other currencies

include the major and minor currencies. Demeter does not

anticipate that the risk profile of the Partnership's currency

sector will change significantly in the future. The currency

trading VaR figure includes foreign margin amounts converted into

U.S. dollars with an incremental adjustment to reflect the

exchange rate risk inherent to the dollar-based Partnership in

expressing VaR in a functional currency other than U.S. dollars.



Commodity.

Energy. At December 31, 2000 the Partnership's next largest

exposure was in the energy complex. The largest exposure was in

natural gas, followed by crude oil and brent crude. Price

movement in these markets results from political developments in

Middle Eastern and OPEC and non-OPEC oil producing countries.

Weather patterns and other economic fundamentals also affect

prices. It is possible that volatility will remain high and that

significant profits and losses, which have been experienced in

the past, will continue to be experienced in this market.





Natural gas has exhibited volatility in prices resulting from

weather patterns and supply and demand factors and may continue

in this choppy pattern.



Soft Commodities and Agriculturals . At December 31, 2000 the

Partnership had exposure in the markets that comprise these

sectors. Exposure was in the corn, soybean, cotton, cocoa and

coffee markets. Supply and demand inequalities, severe weather

disruption and market expectations affect price movements in

these markets.



Metals. The Partnership's smallest exposure as of the end of the

fourth quarter was in the metals complex. The only positions

were in the LME nickel market. Prices in this market are

influenced by general economic conditions and warehouse stocks.



Equity. There was a relatively small exposure to stock indices

as of December 31, 2000. The Partnership trades these markets in

the United States and Japan and had small positions in both

markets. Stock indices are affected by the same factors that

influence the underlying equity issues such as the monetary and

fiscal policies of government, profit outlook and general

economic conditions.



Qualitative Disclosures Regarding Non-Trading Risk Exposure

The following was the only non-trading risk exposure of the

Partnership at December 31, 2000:



Foreign Currency Balances. The Partnership's primary

foreign currency balances were in British Pounds. The

Partnership controls the non-trading risk of these balances

by regularly converting these balances back into U.S.

dollars upon liquidation of the respective position.



Qualitative Disclosures Regarding Means of Managing Risk Exposure

The Partnership and the Trading Manager, separately, attempt to

manage the risk of the Partnership's open positions in

essentially the same manner in all market categories traded.

Demeter attempts to manage market exposure by diversifying the

Partnership's assets among different market sectors and trading

approaches, and monitoring the performance of the Trading Manager

daily. In addition, the Trading Manager establishes diversi-

fication guidelines, often set in terms of the maximum margin to

be committed to positions in any one market sector or market-

sensitive instrument.



Demeter monitors and controls the risk of the Partnership's non-

trading instrument, cash. Cash is the only Partnership

investment directed by Demeter, rather than the Trading Manager.












Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Financial Statements are incorporated by reference to the

Partnership's Annual Report, which is filed as Exhibit 13.01

hereto.



Supplementary data specified by Item 302 of Regulation S-K:



Summary of Quarterly Results (Unaudited)

Net
Income/
(Loss) Per
Quarter Net Unit of Limited
Ended Revenue Income/(Loss)
Partnership Interest

2000
March 31 $ 480,364 $ 277,550 $ 88.09
June 30 305,012 133,298 44.73
September 30 (452,279) (597,100) (207.80)
December 31 1,841,438 1,638,365 594.63

Total $ 2,174,535 $ 1,452,113 $
519.65

1999
March 31 $ (411,324) $ (641,891) $(171.44)
June 30 209,318 (35,816) (10.07)
September 30 472,679 248,044 72.28
December 31 (336,427) (518,944) (158.97)

Total $ (65,754) $ (948,607)
$(268.20)



Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE


None.












PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

There are no directors or executive officers of the Partnership.

The Partnership is managed by Demeter.


Directors and Officers of the General Partner

The directors and officers of Demeter are as follows:



Robert E. Murray, age 40, is Chairman of the Board, President and

a Director of Demeter. Mr. Murray is also Chairman of the Board,

President and a Director of DWFCM. Mr. Murray is currently a

Senior Vice President of DWR's Managed Futures Department. Mr.

Murray began his career at DWR in 1984 and is currently the

Director of the Managed Futures Department. In this capacity, Mr.

Murray is responsible for overseeing all aspects of the firm's

Managed Futures Department. Mr. Murray previously served as Vice

Chairman and a Director of the Managed Funds Association, an

industry association for investment professionals in futures,

hedge funds and other alternative investments. Mr. Murray

graduated from Geneseo State University in May 1983 with a B.A.

degree in Finance.



Mitchell M. Merin, age 47, is a Director of Demeter. Mr. Merin

is also a Director of DWFCM. Mr. Merin was appointed the Chief

Operating Officer of Individual Asset Management for MSDW in

December 1998 and the President and Chief Executive Officer of





Morgan Stanley Dean Witter Advisors in February 1998. He has

been an Executive Vice President of DWR since 1990, during which

time he has been Director of DWR's Taxable Fixed Income and

Futures divisions, Managing Director in Corporate Finance and

Corporate Treasurer. Mr. Merin received his Bachelor's degree

from Trinity College in Connecticut and his M.B.A. degree in

Finance and Accounting from the Kellogg Graduate School of

Management of Northwestern University in 1977.



Joseph G. Siniscalchi, age 55, is a Director of Demeter. Mr.

Siniscalchi joined DWR in July 1984 as a First Vice President,

Director of General Accounting and served as a Senior Vice

President and Controller for DWR's Securities Division through

1997. He is currently Executive Vice President and Director of

the Operations Division of DWR. From February 1980 to July 1984,

Mr. Siniscalchi was Director of Internal Audit at Lehman Brothers

Kuhn Loeb, Inc.



Edward C. Oelsner, III, age 59, is a Director of Demeter. Mr.

Oelsner is currently an Executive Vice President and head of the

Product Development Group at Morgan Stanley Dean Witter Advisors,

an affiliate of DWR. Mr. Oelsner joined DWR in 1981 as a

Managing Director in DWR's Investment Banking Department

specializing in coverage of regulated industries and,

subsequently, served as head of the DWR Retail Products Group.

Prior to joining DWR, Mr. Oelsner held positions at The First





Boston Corporation as a member of the Research and Investment

Banking Departments from 1967 to 1981. Mr. Oelsner received his

M.B.A. in Finance from the Columbia University Graduate School of

Business in 1966 and an A.B. in Politics from Princeton

University in 1964.



Richard A. Beech, age 49, is a Director of Demeter. Mr. Beech

has been associated with the futures industry for over 23 years.

He has been at DWR since August 1984, where he is presently

Senior Vice President and head of Branch Futures. Mr. Beech

began his career at the Chicago Mercantile Exchange, where he

became the Chief Agricultural Economist doing market analysis,

marketing and compliance. Prior to joining DWR, Mr. Beech also

had worked at two investment banking firms in operations,

research, managed futures and sales management.



Raymond A. Harris, age 44, is a Director of Demeter. Mr. Harris

is currently Executive Vice President, Planning and

Administration for Morgan Stanley Dean Witter Asset Management

and has worked at DWR or its affiliates since July 1982, serving

in both financial and administrative capacities. From August

1994 to January 1999, he worked in two separate DWR affiliates,

Discover Financial Services and Novus Financial Corp.,

culminating as Senior Vice President. Mr. Harris received his





B.A. degree from Boston College and his M.B.A. in finance from

the University of Chicago.



Anthony J. DeLuca, age 38, became a Director of Demeter on

September 14, 2000. Mr. DeLuca is also a Director of DWFCM. Mr.

DeLuca was appointed the Controller of Asset Management for MSDW

in June 1999. Prior to that, Mr. DeLuca was a partner at the

accounting firm of Ernst & Young LLP, where he had MSDW as a

major client. Mr. DeLuca had worked continuously at Ernst &

Young LLP ever since 1984, after he graduated from Pace

University with a B.B.A. degree in Accounting.



Raymond E. Koch, age 45, is Chief Financial Officer of Demeter.

Effective July 10, 2000, Mr. Koch replaced Mr. Raibley as Chief

Financial Officer of Demeter. Mr. Koch began his career at MSDW

in 1988, has overseen the Managed Futures Accounting function

since 1992, and is currently First Vice President, Director of

Managed Futures and Realty Accounting. From November 1979 to

June 1988, Mr. Koch held various positions at Thomson McKinnon

Securities, Inc. culminating as Manager, Special Projects in the

Capital Markets Division. From August 1977 to November 1979 he

was an auditor, specializing in financial services at Deloitte

Haskins and Sells. Mr. Koch received his B.B.A. in accounting

from Iona College in 1977, an M.B.A. in finance from Pace

University in 1984 and is a Certified Public Accountant.





Lewis A. Raibley, III, age 38, served as Vice President, Chief

Financial Officer, and a Director of Demeter and DWFCM until his

resignation from MSDW on July 1, 2000.



All of the foregoing directors have indefinite terms.



Item 11. EXECUTIVE COMPENSATION

The Partnership has no directors and executive officers. As a

limited partnership, the business of the Partnership is managed

by Demeter, which is responsible for the administration of the

business affairs of the Partnership but receives no compensation

for such services.



Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

(a) Security Ownership of Certain Beneficial Owners - As of

December 31, 2000, there were no persons known to be beneficial

owners of more than 5 percent of the Units.



(b) Security Ownership of Management - At December 31, 2000,

Demeter owned 104 Units of General Partnership Interest

representing a 3.83 percent interest in the Partnership.



(c) Changes in Control - None







Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Refer to Note 2 - "Related Party Transactions" of "Notes to

Financial Statements", in the accompanying Annual Report to

Limited Partners for the year ended December 31, 2000, which is

incorporated by reference to Exhibit 13.01 of this Form 10-K. In

its capacity as the Partnership's retail commodity broker, DWR

received commodity brokerage commissions (paid and accrued by the

Partnership) of $444,258 for the year ended December 31, 2000.

In its capacity as the Partnership's trading manager, DWFCM

received management fees of $231,777 and incentive fee of $21,098

for the year ended December 31, 2000.












































PART IV

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON
FORM 8-K

(a) 1. Listing of Financial Statements

The following financial statements and report of independent

auditors, all appearing in the accompanying Annual Report to

Limited Partners for the year ended December 31, 2000, are

incorporated by reference to Exhibit 13.01 of this Form 10-K:

- Report of Deloitte & Touche LLP, independent auditors, for
the years ended December 31, 2000, 1999 and 1998.

- Statements of Financial Condition as of December 31, 2000
and 1999.

- Statements of Operations, Changes in Partners' Capital, and
Cash Flows for the years ended December 31, 2000, 1999 and 1998.

- Notes to Financial Statements.


With the exception of the aforementioned information and the

information incorporated in Items 7, 8, and 13, the Annual Report

to Limited Partners for the year ended December 31, 2000 is not

deemed to be filed with this report.



2. Listing of Financial Statement Schedules

No financial statement schedules are required to be filed with this

report.



(b) Reports on Form 8-K

No reports on Form 8-K have been filed by the Partnership during

the last quarter of the period covered by this report.



(c) Exhibits

Refer to Exhibit Index on Page E-1.



SIGNATURES

Pursuant to the requirements of Sections 13 or 15(d) 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 II L.P.
(Registrant)

BY: Demeter Management
Corporation,
General Partner

March 30, 2001 BY: /s/ Robert E. Murray .
Robert E. Murray, Director,
Chairman of the Board and
President

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 and in the capacities and on the dates indicated.

Demeter Management Corporation.

BY: /s/ Robert E. Murray March 30, 2001
Robert E. Murray, Director,
Chairman of the Board and
President

/s/ Mitchell M. Merin March 30, 2001
Mitchell M. Merin, Director

/s/ Joseph G. Siniscalchi March 30, 2001
Joseph G. Siniscalchi, Director

/s/ Edward C. Oelsner III March 30, 2001
Edward C. Oelsner III, Director

/s/ Richard A. Beech March 30, 2001
Richard A. Beech, Director

/s/ Raymond A. Harris March 30, 2001
Raymond A. Harris, Director

/s/ Anthony J. DeLuca March 30, 2001
Anthony J. DeLuca, Director

/s/ Raymond E. Koch March 30, 2001
Raymond E. Koch, Chief
Financial Officer and Principal
Accounting Officer







EXHIBIT INDEX


ITEM

3.01 Limited Partnership Agreement of the Partnership, dated
as of October 28, 1988 is incorporated by reference to
Exhibit 3.01 and Exhibit 3.02 of the Partnership's
Registration Statement on Form S-1. File No. 24662)

10.01 Management Agreement among the Partnership, Demeter
Management Corporation and Dean Witter Futures & Currency
Management Inc. dated as of October 28, 1988 is
incorporated by reference to Exhibit 10.02 of the
Partnership's Registration Statement on Form S-1. (File
No. 24462)

10.03 Amended and Restated Customer Agreement dated as of
December 1, 1997, between the Partnership and Dean Witter
Reynolds Inc. is incorporated by reference to Exhibit 10.03 of
the Partnership's quarterly report on Form 10-Q for the
quarter ended March 31, 2000, File No. 0-17446.

10.04 Customer Agreement dated as of December 1, 1997,
between the Partnership, Carr Futures, Inc., and Dean Witter
Reynolds Inc. is incorporated by reference to Exhibit 10.04 of
the Partnership's quarterly report on Form 10-Q for the
quarter ended March 31, 2000, File No. 0-17446.

10.05 International Foreign Exchange Master Agreement dated
as of August 1, 1997, between the Partnership and Carr Futures,
Inc. is incorporated by reference to Exhibit 10.05 of the
Partnership's quarterly report on Form 10-Q for the quarter
ended March 31, 2000, File No. 0-17446.

10.06 Customer Agreement, dated as of May 1, 2000 between
Morgan Stanley & Co. Incorporated, the Partnership and Dean
Witter Reynolds Inc. is incorporated by reference to Exhibit
10.06 of the Partnership's quarterly Report on Form 10-Q for the
quarter ended June 30, 2000. (File No. 0-17446).

13.01 Annual Report to Limited Partners for the year ended
December 31, 2000 is filed herewith.







Diversified
Futures
Fund II

December 31, 2000
Annual Report

MORGAN STANLEY DEAN WITTER


Dean Witter Diversified Futures Fund II L.P.
Historical Fund Performance

Presented below is the percentage change in Net Asset Value per Unit from the
start of each calendar year the Fund has traded. Also provided is the incep-
tion-to-date return and the annualized return since inception for the Fund.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.



Year Return
---- ------

1989 (11 1/2 months) 5.8%
1990 51.9%
1991 21.7%
1992 18.0%
1993 7.3%
1994 5.4%
1995 -2.9%
1996 -4.8%
1997 11.2%
1998 5.2%
1999 -9.5%
2000 20.3%

Inception-to-Date Return: 207.6%
Annualized Return: 9.9%



Demeter Management Corporation
Two World Trade Center
62nd Floor
New York, NY 10048
Telephone (212) 392-8899

Dean Witter Diversified Futures Fund II L.P.
Annual Report
2000

Dear Limited Partner:

This marks the twelfth annual report for the Dean Witter Diversified Futures
Fund II L.P. (the "Fund"). The Fund began the year at a Net Asset Value per
Unit of $2,556.25 and increased by 20.3% to $3,075.90 on December 31, 2000. A
review of trading results for the year is provided in the Annual Report of the
Trading Manager located on the next page of this report.

Should you have any questions concerning this report, please feel free to con-
tact Demeter Management Corporation at Two World Trade Center, 62nd Floor, New
York, NY 10048, or your Morgan Stanley Dean Witter Financial Advisor.

I hereby affirm, that to the best of my knowledge and belief, the information
contained in this report is accurate and complete. Past performance is not a
guarantee of future results.

Sincerely,

/s/ Robert E. Murray
Robert E. Murray
Chairman
Demeter Management Corporation
General Partner


Dean Witter Diversified Futures Fund II L.P.

Annual Report of the Trading Manager

The Fund posted gains in 2000 as a result of strong trends in the energy, cur-
rency, and grain futures markets. In the energy sector, profits resulted from
long positions in the natural gas and crude oil futures markets. Natural gas
saw its price rise to record levels in 2000. Recent low inventory levels,
sluggish supply and cold winter weather combined to push prices to such high
levels. In the crude oil market, gains were realized from long positions ear-
lier in the year as prices rose to nine-year highs on a combination of cold
weather, declining inventories and increasing demand. In addition, concerns
about future output levels from the world's leading producer countries added
to the upward price momentum. Later in the year, however, profits resulted
from short positions as the price of crude oil futures fell on expectations
that Iraqi oil exports would resume and on fears that the slowdown in the
economy would curb demand while at the same time supply was increasing. In the
currency markets, gains were recorded from short positions in the euro, Swiss
franc and Swedish krona as the value of these European currencies weakened
relative to the U.S. dollar amid skepticism about Europe's economic outlook.
Strong economic data out of the U.S. and interest rate hikes in the U.S. also
boosted the dollar and, subsequently, added to the euro's difficulties. Later
in the year as the bullish trend in the U.S. dollar reversed, additional gains
were recorded from long positions in the euro, Swiss franc and Swedish krona
versus the U.S. dollar as a result of new confidence in the European economy
and an overall skepticism regarding the U.S. economy. Profits were also re-
corded from short positions in the corn market during the middle of the year
as the price of corn trended lower on favorable weather conditions that re-
sulted in good prospects for high crop yields.

A portion of these gains was offset by losses experienced in the metals, stock
index and soft commodity futures markets. The majority of losses in the metals
markets were experienced in the aluminum market. From a technical standpoint,
the price of aluminum traded in a very volatile pattern throughout the year
leaving little opportunity for the development of trends. In addition, long
positions in this market, particularly in the second half


of the year, resulted in losses as price declined after concerns mounted that
demand would weaken amid a cooling of the U.S. economy. Losses were also re-
corded in the global stock index futures markets. The S&P 500 Index traded in
a very choppy pattern resulting in losses for both long and short positions.
Contributing to this price pattern was uncertainty over the state of the U.S.
economy.

We appreciate your continued investment in Diversified Futures Fund II L.P.

Dean Witter Futures & Currency Management Inc.


Dean Witter Diversified Futures Fund II L.P.
Independent Auditors' Report

The Limited Partners and the General Partner:

We have audited the accompanying statements of financial condition of Dean
Witter Diversified Futures Fund II L.P. (the "Partnership") as of December 31,
2000 and 1999 and the related statements of operations, changes in partners'
capital, and cash flows for each of the three years in the period ended Decem-
ber 31, 2000. These financial statements are the responsibility of the Part-
nership's management. Our responsibility is to express an opinion on these fi-
nancial statements based on our audits.

We conducted our audits in accordance with auditing standards generally ac-
cepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the finan-
cial statements are free of material misstatement. An audit includes examin-
ing, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting princi-
ples used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits pro-
vide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material re-
spects, the financial position of Dean Witter Diversified Futures Fund II L.P.
at December 31, 2000 and 1999 and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2000 in
conformity with accounting principles generally accepted in the United States
of America.


/s/ Deloitte & Touche LLP

New York, New York
February 16, 2001


Dean Witter Diversified Futures Fund II L.P.
Statements of Financial Condition



December 31,
--------------------
2000 1999
--------- ---------
$ $

ASSETS
Equity in futures interests trading
accounts:
Cash 7,441,614 8,042,490
Net unrealized gain on open
contracts (MS&Co.) 1,212,863 --
Net unrealized loss on open
contracts (MSIL) (168,289) --
Net unrealized gain on open
contracts (Carr) -- 293,674
--------- ---------
Total net unrealized gain on
open contracts 1,044,574 293,674
--------- ---------
Total Trading Equity 8,486,188 8,336,164
Interest receivable (DWR) 31,123 29,570
--------- ---------
Total Assets 8,517,311 8,365,734
========= =========
LIABILITIES AND PARTNERS' CAPITAL
LIABILITIES
Redemptions payable 127,081 291,006
Accrued management fees (DWFCM) 21,293 20,914
Accrued incentive fee (DWFCM) 21,097 --
--------- ---------
Total Liabilities 169,471 311,920
--------- ---------
PARTNERS' CAPITAL
Limited Partners (2,609.949 and 3,046.638 Units,
respectively) 8,027,946 7,787,964
General Partner (104 Units) 319,894 265,850
--------- ---------
Total Partners' Capital 8,347,840 8,053,814
--------- ---------
Total Liabilities and
Partners' Capital 8,517,311 8,365,734
========= =========
NET ASSET VALUE PER UNIT 3,075.90 2,556.25
========= =========




The accompanying notes are an integral part of these financial statements.


Dean Witter Diversified Futures Fund II L.P.
Statements of Operations



For the Years Ended
December 31,
------------------------------
2000 1999 1998
--------- -------- ----------
$ $ $

REVENUES
Trading profit (loss):
Realized 1,068,453 (497,690) 2,694,659
Net change in unrealized 750,900 87,110 (1,542,785)
--------- -------- ----------
Total Trading Results 1,819,353 (410,580) 1,151,874
Interest income (DWR) 355,182 344,826 407,236
--------- -------- ----------
Total Revenues 2,174,535 (65,754) 1,559,110
--------- -------- ----------
EXPENSES
Brokerage commissions (DWR) 444,258 568,131 633,726
Management fee (DWFCM) 231,777 278,026 327,157
Transaction fees and costs 25,289 40,412 48,099
Incentive fee (DWFCM) 21,098 (3,716) 7,040
--------- -------- ----------
Total Expenses 722,422 882,853 1,016,022
--------- -------- ----------
NET INCOME (LOSS) 1,452,113 (948,607) 543,088
========= ======== ==========
Net Income (Loss) Allocation:
Limited Partners 1,398,069 (920,714) 528,526
General Partner 54,044 (27,893) 14,562
Net Income (Loss) per Unit:
Limited Partners 519.65 (268.20) 140.02
General Partner 519.65 (268.20) 140.02


Statements of Changes in Partners' Capital
For the Years Ended December 31, 2000, 1999 and 1998



Units of
Partnership Limited General
Interest Partners Partner Total
----------- ---------- ------- ----------
$ $ $

Partners' Capital,
December 31, 1997 4,279.580 11,209,045 279,181 11,488,226
Net income -- 528,526 14,562 543,088
Redemptions (535.498) (1,456,348) -- (1,456,348)
--------- ---------- ------- ----------
Partners' Capital,
December 31, 1998 3,744.082 10,281,223 293,743 10,574,966
Net loss -- (920,714) (27,893) (948,607)
Redemptions (593.444) (1,572,545) -- (1,572,545)
--------- ---------- ------- ----------
Partners' Capital,
December 31, 1999 3,150.638 7,787,964 265,850 8,053,814
Net income -- 1,398,069 54,044 1,452,113
Redemptions (436.689) (1,158,087) -- (1,158,087)
--------- ---------- ------- ----------
Partners' Capital,
December 31, 2000 2,713.949 8,027,946 319,894 8,347,840
========= ========== ======= ==========


The accompanying notes are an integral part of these financial statements.


Dean Witter Diversified Futures Fund II L.P.
Statements of Cash Flows



For the Years Ended
December 31,
----------------------------------
2000 1999 1998
---------- ---------- ----------
$ $ $

CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) 1,452,113 (948,607) 543,088
Noncash item included in net
income (loss):
Net change in unrealized (750,900) (87,110) 1,542,785
(Increase) decrease in operating assets:
Interest receivable (DWR) (1,553) 2,840 4,262
Increase (decrease) in operating
liabilities:
Accrued management fees (DWFCM) 379 (6,200) (2,389)
Accrued incentive fee (DWFCM) 21,097 (3,871) 3,871
---------- ---------- ----------
Net cash provided by (used
for) operating activities 721,136 (1,042,948) 2,091,617
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in redemptions payable (163,925) 51,303 (43,740)
Redemptions of Units (1,158,087) (1,572,545) (1,456,348)
---------- ---------- ----------
Net cash used for financing activities (1,322,012) (1,521,242) (1,500,088)
---------- ---------- ----------
Net increase (decrease) in cash (600,876) (2,564,190) 591,529
Balance at beginning of period 8,042,490 10,606,680 10,015,151
---------- ---------- ----------
Balance at end of period 7,441,614 8,042,490 10,606,680
========== ========== ==========


The accompanying notes are an integral part of these financial statements.


Dean Witter Diversified Futures Fund II L.P.
Notes to Financial Statements

1. Summary of Significant Accounting Policies

Organization--Dean Witter Diversified Futures Fund II L.P. (the "Partnership")
is a limited partnership organized to engage primarily in the speculative
trading of commodity futures and forward contracts, physical commodities, and
other commodity interests (collectively, "futures interests").

The general partner for the Partnership is Demeter Management Corporation
("Demeter"). The non-clearing commodity broker is Dean Witter Reynolds Inc.
("DWR"). Morgan Stanley & Co., Inc. ("MS&Co.") and Morgan Stanley & Co. Inter-
national Limited ("MSIL") provide clearing and execution services. Prior to
May 2000, Carr Futures Inc. ("Carr") provided clearing and execution services
to the Partnership. The trading manager is Dean Witter Futures & Currency Man-
agement Inc. ("DWFCM" or the "Trading Manager"). Demeter, DWR, DWFCM, MS&Co.
and MSIL are wholly-owned subsidiaries of Morgan Stanley Dean Witter & Co.
("MSDW").

Effective February 19, 1998, Morgan Stanley, Dean Witter, Discover & Co.
changed its corporate name to Morgan Stanley Dean Witter & Co.

Demeter is required to maintain a 1% minimum interest in the equity of the
Partnership and income (losses) are shared by Demeter and the Limited Partners
based upon their proportional ownership interests.

Use of Estimates--The financial statements are prepared in accordance with ac-
counting principles generally accepted in the United States of America, which
require management to make estimates and assumptions that affect the reported
amounts in the financial statements and related disclosures. Management be-
lieves that the estimates utilized in the preparation of the financial state-
ments are prudent and reasonable. Actual results could differ from those esti-
mates.

Revenue Recognition--Futures interests are open commitments until settlement
date. They are valued at market on a daily basis and the resulting net change
in unrealized gains and losses is reflected in the change in unrealized profit
(loss) on open contracts from one period to the next in the statements of op-
erations. Monthly, DWR pays the Partnership interest income based upon 80% of
its average daily Net Assets for the month at a prevailing rate for U.S. Trea-
sury bills. For purposes of such interest payments, Net Assets do not include
monies due the Partnership on futures interests, but not actually received.

Net Income (Loss) per Unit--Net income (loss) per unit of limited partnership
interest ("Unit(s)") is computed using the weighted average number of Units
outstanding during the period.


Dean Witter Diversified Futures Fund II L.P.
Notes to Financial Statements--(Continued)


Equity in Futures Interests Trading Accounts--The Partnership's asset "Equity
in futures interests trading accounts," reflected in the statements of finan-
cial condition, consists of (A) cash on deposit with DWR, MS&Co. and MSIL to
be used as margin for trading and (B) net unrealized gains or losses on open
contracts, which are valued at market, and calculated as the difference be-
tween original contract value and market value.

The Partnership, in the normal course of business, enters into various con-
tracts with MS&Co. and MSIL acting as its commodity brokers. Pursuant to bro-
kerage agreements with MS&Co. and MSIL, to the extent that such trading re-
sults in unrealized gains or losses, the amounts are offset and reported on a
net basis in the Partnership's statements of financial condition.

The Partnership has offset the fair value amounts recognized for forward con-
tracts executed with the same counterparty as allowable under terms of the
master netting agreement with MS&Co., the sole counterparty on such contracts.
The Partnership has consistently applied its right to offset.

Brokerage Commissions and Related Transaction Fees and Costs--Brokerage com-
missions are accrued at 80% of DWR's published non-member rates on a half-turn
basis. Transaction fees and costs are accrued on a half-turn basis. Brokerage
commissions and transaction fees combined are capped at 13/20 of 1% per month
(a maximum 7.8% annual rate) of the Partnership's Net Assets as of the last
day of each month.

Operating Expenses--The Partnership incurs monthly management fees and may in-
cur incentive fees. Demeter and/or DWR bear all other operating expenses.

Income Taxes--No provision for income taxes has been made in the accompanying
financial statements, as partners are individually responsible for reporting
income or loss based upon their respective share of the Partnership's revenues
and expenses for income tax purposes.

Distributions--Distributions, other than redemptions of Units, are made on a
pro-rata basis at the sole discretion of Demeter. No distributions have been
made to date.

Redemptions--Limited Partners may redeem some or all of their Units at 100% of
the Net Asset Value per Unit as of the end of the last day of any calendar
quarter, upon five business days advance notice by redemption form to Demeter.

Dissolution of the Partnership--The Partnership will terminate on December 31,
2025 or at an earlier date if certain conditions set forth in the Limited
Partnership Agreement occur.


Dean Witter Diversified Futures Fund II L.P.
Notes to Financial Statements--(Continued)

2. Related Party Transactions

The Partnership pays brokerage commissions to DWR as described in Note 1. The
Partnership's cash is on deposit with DWR, MS&Co., and MSIL in futures inter-
ests trading accounts to meet margin requirements as needed. DWR pays interest
on these funds as described in Note 1.

Demeter, on behalf of the Partnership and itself, has entered into a Manage-
ment Agreement with DWFCM to make all trading decisions for the Partnership.

Compensation to DWFCM by the Partnership consists of a management fee and an
incentive fee as follows:

Management Fee--The monthly management fee is accrued daily at the rate of 1/4
of 1% (a 3% annual rate), of adjusted Net Assets, as defined in the Management
Agreement, at each month-end.

Incentive Fee--The Partnership pays an annual incentive fee to DWFCM equal to
15% of the trading profits earned by the Partnership as of the end of each an-
nual incentive period ending January 31. Trading profits represent the amount
by which profits from futures and forwards trading exceed losses after broker-
age commissions, management fees and transaction fees and costs are deducted.
Such incentive fee is accrued in each month in which trading profits occur. In
those months in which trading profits are negative, previous accruals, if any,
during the incentive period are reduced.

3. Financial Instruments

The Partnership trades commodity futures and forward contracts, physical com-
modities, and other commodity interests. Futures and forwards represent con-
tracts 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 in-
ability 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.

In June 1998, the Financial Accounting Standards Board ("FASB") issued State-
ment of Financial Accounting Standard ("SFAS") No. 133, "Accounting for Deriv-
ative Instruments and Hedging Activities" effective for fiscal years beginning
after June 15, 2000, as amended by SFAS No. 137. The Partnership adopted the
provisions of SFAS No. 133 beginning with the fiscal year ended December 31,
1998. SFAS No. 133 superceded SFAS Nos. 119 and 105, which required the dis-
closure of average aggregate fair values and contract/notional values, respec-
tively, of derivative financial instruments for an entity that carries its as-
sets at fair value. SFAS No. 133 was


Dean Witter Diversified Futures Fund II L.P.
Notes to Financial Statements--(Continued)

further amended by SFAS No. 138, which clarifies issues surrounding interest
rate risk, foreign currency denominations, normal purchases and sales and net
hedging. The application of SFAS No. 133, as amended by SFAS No. 137 and SFAS
No. 138, did not have a significant effect on the Partnership's financial
statements.

SFAS No. 133 defines a derivative as a financial instrument or other contract
that has all three of the following characteristics:

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

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

The net unrealized gains on open contracts are reported as a component of "Eq-
uity in futures interests trading accounts" on the statements of financial
condition and totaled $1,044,574 and $293,674 at December 31, 2000 and 1999,
respectively.

Of the $1,044,574 net unrealized gain on open contracts at December 31, 2000,
$718,718 related to exchange-traded futures contracts and $325,856 related to
off-exchange-traded forward currency contracts.

Of the $293,674 net unrealized gain on open contracts at December 31, 1999,
$262,869 related to exchange-traded futures contracts and $30,805 related to
off-exchange-traded forward currency contracts.

Exchange-traded futures contracts held by the Partnership at December 31, 2000
and 1999 mature through June 2002 and September 2000, respectively. Off-
exchange-traded forward currency contracts held by the Partnership at December
31, 2000 and 1999 mature through March 2001 and March 2000, respectively.

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

The Partnership also has credit risk because DWR, MS&Co., and MSIL act as the
futures commission merchants or the


Dean Witter Diversified Futures Fund II L.P.
Notes to Financial Statements--(Continued)

counterparties with respect to most of the Partnership's assets. Exchange-
traded futures contracts are marked to market on a daily basis, with varia-
tions in value settled on a daily basis. DWR, MS&Co. and MSIL each as a
futures commission merchant for the Partnership's exchange-traded futures con-
tracts, are required, pursuant to regulations of the Commodity Futures Trading
Commission to segregate from their own assets, and for the sole benefit of
their commodity customers, all funds held by them with respect to exchange-
traded futures contracts, including an amount equal to the net unrealized gain
on all open futures contracts, which funds, in the aggregate totaled
$8,160,332 and $8,305,359 at December 31, 2000 and 1999, 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 re-
quirement that an amount equal to the net unrealized gain on open forward con-
tracts be segregated. With respect to those off-exchange-traded forward cur-
rency contracts, the Partnership is at risk to the ability of MS&Co., the sole
counterparty on all of such contracts, to perform. The Partnership has a net-
ting agreement with MS&Co. This agreement, which seeks to reduce both the
Partnership's and MS&Co.'s exposure on off-exchange-traded forward currency
contracts, should materially decrease the Partnership's credit risk in the
event of MS&Co.'s bankruptcy or insolvency.

4. Legal Matters

Similar class actions were filed in 1996 in California and New York State
courts. Each of the actions were dismissed in 1999. However, the New York
state class action discussed below is still pending because plaintiffs ap-
pealed the final court's dismissal of their case on March 3, 2000.

On September 18 and 20, 1996, purported class actions were filed in the Su-
preme Court of the State of New York, New York County, on behalf of all pur-
chasers of interests in limited partnership commodity pools sold by DWR. Named
defendants include DWR, Demeter, DWFCM, MSDW, the Partnership, certain limited
partnership commodity pools of which Demeter is the general partner and cer-
tain trading managers to those pools. A consolidated and amended complaint in
the action pending in the Supreme Court of the State of New York was filed on
August 13, 1997, alleging that the defendants committed fraud, breach of fidu-
ciary duty, and negligent misrepresentation in the sale and operation of the
various limited partnership commodity pools. The complaints sought unspecified
amounts of compensatory and punitive damages and other relief. The New York
Supreme Court dismissed the New York action in November 1998, but granted
plaintiffs leave to file an amended complaint, which they did in early Decem-
ber 1998.


Dean Witter Diversified Futures Fund II L.P.
Notes to Financial Statements--(Concluded)

The defendants filed a motion to dismiss the amended complaint with prejudice
on February 1, 1999. By decision dated December 21, 1999, the New York Supreme
Court dismissed the case with prejudice. However, on March 3, 2000, plaintiffs
appealed the trial court's dismissal of their case.


MORGAN STANLEY DEAN WITTER & CO.
Two World Trade Center
62nd Floor
New York, NY 10048

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