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

FORM 10-Q

[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 2006 or

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

Commission File Number 0-19511

MORGAN STANLEY SPECTRUM SELECT L.P.

(Exact name of registrant as specified in its charter)

Delaware 13-3619290
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

Demeter Management Corporation
330 Madison Avenue, 8th Floor
New York, NY 10017
(Address of principal executive offices) (Zip Code)

Registrant?s telephone number, including area code (212) 905-2700

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

Indicate by check-mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

Yes X No___________

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. (Check one):

Large accelerated filer___Accelerated filer____Non-accelerated filer X

Indicate by check-mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes ___ No X

<page> <table> MORGAN STANLEY SPECTRUM SELECT L.P.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

June 30, 2006

PART I. FINANCIAL INFORMATION
<s> <c>
Item 1. Financial Statements

Statements of Financial Condition as of June 30, 2006
(Unaudited) and December 31, 2005 2

Statements of Operations for the Three and Six Months
Ended June 30, 2006 and 2005 (Unaudited) 3

Statements of Changes in Partners? Capital for the
Six Months Ended June 30, 2006 and 2005 (Unaudited) 4

Statements of Cash Flows for the Six Months Ended
June 30, 2006 and 2005 (Unaudited) 5

Notes to Financial Statements (Unaudited) 6-12

Item 2. Management?s Discussion and Analysis of
Financial Condition and Results of Operations 13-28

Item 3. Quantitative and Qualitative Disclosures about
Market Risk 28-42

Item 4. Controls and Procedures 42

PART II. OTHER INFORMATION

Item 1A.Risk Factors 43

Item 2. Unregistered Sales of Equity Securities
and Use of Proceeds 43-44

Item 5. Other Information 45

Item 6. Exhibits 45
</table>

<page. <table> PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

MORGAN STANLEY SPECTRUM SELECT L.P.
STATEMENTS OF FINANCIAL CONDITION
<caption>
June 30, December 31,
2006 2005
$ $
(Unaudited)
ASSETS
<s> <c> <c>
Equity in futures interests trading accounts:
Unrestricted cash 506,436,437 475,166,952
Restricted cash 46,774,696 51,242,347

Total cash 553,211,133 526,409,299

Net unrealized gain on open contracts (MS&Co.) 11,626,678 9,019,008
Net unrealized gain on open contracts (MSIL) 1,043,087 9,166,796

Total net unrealized gain on open contracts 12,669,765 18,185,804

Total Trading Equity 565,880,898 544,595,103

Subscriptions receivable 7,794,462 4,455,213
Interest receivable (Morgan Stanley DW) 1,759,097 1,417,447

Total Assets 575,434,457 550,467,763

LIABILITIES AND PARTNERS? CAPITAL

Liabilities

Redemptions payable 6,306,645 13,439,853
Accrued brokerage fees (Morgan Stanley DW) 2,901,506 2,730,072
Accrued management fees 1,383,836 1,295,496

Total Liabilities 10,591,987 17,465,421

Partners? Capital

Limited Partners (18,780,973.840 and
19,209,338.858 Units, respectively) 558,553,514 527,198,790
General Partner (211,461.769 Units) 6,288,956 5,803,552

Total Partners? Capital 564,842,470 533,002,342

Total Liabilities and Partners? Capital 575,434,457 550,467,763

NET ASSET VALUE PER UNIT 29.74 27.45
<fn>

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

</table>

<page> <table> MORGAN STANLEY SPECTRUM SELECT L.P.
STATEMENTS OF OPERATIONS
(Unaudited)

<caption>
For the Three Months For the Six Months
Ended June 30, Ended June 30,

2006 2005 2006 2005
$ $ $ $
<s> <c> <c> <c> <c>
INVESTMENT INCOME
Interest income (Morgan Stanley DW) 5,360,860 2,919,056 9,745,669 5,343,283

EXPENSES
Brokerage fees (Morgan Stanley DW) 8,540,432 9,869,703 16,557,242 20,154,873
Management fees 4,068,156 3,857,380 7,880,945 7,866,638

Total Expenses 12,608,588 13,727,083 24,438,187 28,021,511

NET INVESTMENT LOSS (7,247,728) (10,808,027) (14,692,518) (22,678,228)

TRADING RESULTS
Trading profit (loss):
Realized 46,301,251 2,089,197 64,325,929 (24,637,261)
Net change in unrealized (14,908,905) 10,485,024 (5,516,039) (518,091)

Total Trading Results 31,392,346 12,574,221 58,809,890 (25,155,352)

NET INCOME (LOSS) 24,144,618 1,766,194 44,117,372 (47,833,580)

NET INCOME (LOSS) ALLOCATION

Limited Partners 23,878,300 1,749,177 43,631,968 (47,327,425)
General Partner 266,318 17,017 485,404 (506,155)

NET INCOME (LOSS) PER UNIT

Limited Partners 1.26 0.07 2.29 (2.36)
General Partner 1.26 0.07 2.29 (2.36)

<fn>

The accompanying notes are an integral part
of these financial statements.
</table>

<page> <table>
MORGAN STANLEY SPECTRUM SELECT L.P.
STATEMENTS OF CHANGES IN PARTNERS? CAPITAL
For the Six Months Ended June 30, 2006 and 2005
(Unaudited)

Units of
Partnership Limited General
Interest Partners Partner Total
$ $ $
<s> <c> <c> <c> <c>
Partners? Capital,
December 31, 2004 20,263,823.593 579,155,164 6,150,961 585,306,125

Offering of Units 2,318,924.730 60,708,731 380,000 61,088,731

Net Loss ? (47,327,425) (506,155) (47,833,580)

Redemptions (1,536,429.261) (40,331,932) ? (40,331,932)

Partners? Capital,
June 30, 2005 21,046,319.062 552,204,538 6,024,806 558,229,344

Partners? Capital,
December 31, 2005 19,420,800.627 527,198,790 5,803,552 533,002,342

Offering of Units 1,381,439.762 40,353,096 ? 40,353,096

Net Income ? 43,631,968 485,404 44,117,372

Redemptions (1,809,804.780) (52,630,340) ? (52,630,340)

Partners? Capital,
June 30, 2006 18,992,435.609 558,553,514 6,288,956 564,842,470

<fn>

The accompanying notes are an integral part
of these financial statements.
</table>

<page> <table> MORGAN STANLEY SPECTRUM SELECT L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)

For the Six Months Ended June 30,

2006 2005
$ $

<s> <c> <c>
CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss) 44,117,372 (47,833,580)
Noncash item included in net income (loss):
Net change in unrealized 5,516,039 518,091

(Increase) decrease in operating assets:
Restricted cash 4,467,651 10,526,262
Interest receivable (Morgan Stanley DW) (341,650) (255,463)
Net option premiums ? 2,330,480

Increase (decrease) in operating liabilities:
Accrued brokerage fees (Morgan Stanley DW) 171,434 (167,150)
Accrued management fees 88,340 (63,811)

Net cash provided by (used for) operating activities 54,019,186 (34,945,171)

CASH FLOWS FROM FINANCING ACTIVITIES

Cash received from offering of Units 37,013,847 68,439,003
Cash paid for redemptions of Units (59,763,548) (36,889,251)

Net cash provided by (used for) financing activities (22,749,701) 31,549,752

Net increase (decrease) in unrestricted cash 31,269,485 (3,395,419)

Unrestricted cash at beginning of period 475,166,952 488,346,785

Unrestricted cash at end of period 506,436,437 484,951,366

<fn>

The accompanying notes are an integral part
of these financial statements.
</table>

<page> MORGAN STANLEY SPECTRUM SELECT L.P.
NOTES TO FINANCIAL STATEMENTS

June 30, 2006

(Unaudited)

The unaudited financial statements contained herein include, in
the opinion of management, all adjustments necessary for a fair
presentation of the results of operations and financial condition
of Morgan Stanley Spectrum Select L.P. (the ?Partnership?). The
financial statements and condensed notes herein should be read in
conjunction with the Partnership?s December 31, 2005 Annual Report
on Form 10-K. Certain prior year amounts relating to cash
balances were reclassified on the Statements of Financial
Condition and the related Statements of Cash Flows to conform to
2006 presentation. Such reclassifications have no impact on the
Partnership?s reported net income (loss).

1. Organization
Morgan Stanley Spectrum Select L.P. is a Delaware limited
partnership organized in 1991 to engage primarily in the
speculative trading of futures contracts, options on futures
contracts, and forward contracts on physical commodities and
other commodity interests, including, but not limited to, foreign
currencies, financial instruments, metals, energy, and
agricultural products. The Partnership is one of the Morgan
Stanley Spectrum Series of funds, comprised of the Partnership,

<page> MORGAN STANLEY SPECTRUM SELECT L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Morgan Stanley Spectrum Currency L.P., Morgan Stanley Spectrum
Global Balanced L.P., Morgan Stanley Spectrum Strategic L.P., and
Morgan Stanley Spectrum Technical L.P.

The Partnership?s general partner is Demeter Management
Corporation (?Demeter?). The non-clearing commodity broker is
Morgan Stanley DW Inc. (?Morgan Stanley DW?). The clearing
commodity brokers are Morgan Stanley & Co. Incorporated (?MS &
Co.?) and Morgan Stanley & Co. International Limited (?MSIL?).
Demeter, Morgan Stanley DW, MS & Co., and MSIL are wholly-owned
subsidiaries of Morgan Stanley. The trading advisors to the
Partnership are EMC Capital Management, Inc., Northfield Trading
L.P., Rabar Market Research, Inc., Sunrise Capital Management,
Inc., and Graham Capital Management, L.P. (individually, a
?Trading Advisor?, or collectively, the ?Trading Advisors?).

2. Related Party Transactions
The Partnership?s cash is on deposit with Morgan Stanley DW, MS &
Co., and MSIL in futures, forwards, and options trading accounts
to meet margin requirements as needed. Monthly, Morgan Stanley DW
pays the Partnership interest income equal to 80% of the month?s

<page> MORGAN STANLEY SPECTRUM SELECT L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

average daily Net Assets at a rate equal to a prevailing rate on
U.S. Treasury bills. The Partnership pays brokerage fees to
Morgan Stanley DW.

3. Financial Instruments
The Partnership trades futures contracts, options on futures
contracts, and forward contracts on physical commodities and other
commodity interests, including, but not limited to, foreign
currencies, financial instruments, metals, energy, and
agricultural products. Futures and forwards represent contracts
for delayed delivery of an instrument at a specified date and
price. Risk arises from changes in the value of these contracts
and the potential inability of counterparties to perform under the
terms of the contracts. There are numerous factors which may
significantly influence the market value of these contracts,
including interest rate volatility.

The market value of exchange-traded contracts is based on the
settlement price quoted by the exchange on the day with respect
to which market value is being determined. If an exchange-traded
contract could not have been liquidated on such day due to the
operation of daily limits or other rules of the exchange, the
settlement price shall be the settlement price on the first

<page> MORGAN STANLEY SPECTRUM SELECT L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

subsequent day on which the contract could be liquidated. The
market value of off-exchange-traded contracts is based on the
fair market value quoted by the counterparty.

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

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

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

<page> MORGAN STANLEY SPECTRUM SELECT L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The net unrealized gains (losses) on open contracts, reported as a
component of ?Equity in futures interests trading accounts? on the
Statements of Financial Condition, and their longest contract
maturities were as follows:

Net Unrealized Gains/(Losses)
on Open Contracts Longest Maturities
Exchange- Off-Exchange- Exchange- Off-Exchange-
Date Traded Traded Total Traded Traded
$ $ $
Jun. 30, 2006 14,802,465 (2,132,700) 12,669,765 Dec. 2007 Sep. 2006
Dec. 31, 2005 16,351,481 1,834,323 18,185,804 Jun. 2007 Mar. 2006

The Partnership has credit risk associated with counterparty non-
performance. As of the date of the financial statements, the
credit risk associated with the instruments in which the
Partnership trades is limited to the amounts reflected in the
Partnership?s Statements of Financial Condition.

The Partnership also has credit risk because Morgan Stanley DW, MS
& Co., and MSIL act as the futures commission merchants or the
counterparties, with respect to most of the Partnership?s assets.

Exchange-traded futures, forward, and futures-styled options
contracts are marked to market on a daily basis, with variations
in value settled on a daily basis. Morgan Stanley DW, MS & Co.,
and MSIL, each as a futures commission merchant for the

<page> MORGAN STANLEY SPECTRUM SELECT L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Partnership?s exchange-traded futures, forward, and futures-styled
options contracts, are required, pursuant to regulations of the
Commodity Futures Trading Commission (?CFTC?), to segregate from
their own assets, and for the sole benefit of their commodity
customers, all funds held by them with respect to exchange-traded
futures, forward, and futures-styled options contracts, including
an amount equal to the net unrealized gains (losses) on all open
futures, forward, and futures-styled options contracts, which
funds, in the aggregate, totaled $568,013,598 and $542,760,780 at
June 30, 2006 and December 31, 2005, respectively. With respect
to the Partnership?s off-exchange-traded forward currency
contracts, there are no daily exchange-required settlements of
variation in value, nor is there any requirement that an amount
equal to the net unrealized gains (losses) on open forward
contracts be segregated. However, the Partnership is required to
meet margin requirements equal to the net unrealized loss on open
contracts in the Partnership accounts with the counterparty,
which is accomplished by daily maintenance of the cash balance in
a custody account held at Morgan Stanley DW for the benefit of
MS & Co. With respect to those off-exchange-traded forward
currency contracts, the Partnership is at risk to the ability of
MS & Co., the sole counterparty on all such contracts, to perform.
The Partnership has a netting agreement with MS & Co. This

<page> MORGAN STANLEY SPECTRUM SELECT L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)

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.

<page> Item 2. MANAGEMENT?S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

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

The Partnership?s investment in futures, forwards, and options
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 or options contract
has increased or decreased by an amount equal to the daily limit,
positions in that futures or options 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
<page> trading. These market conditions could prevent the
Partnership from promptly liquidating its futures or options
contracts and result in restrictions on redemptions.

There is no limitation on daily price moves in trading forward
contracts on foreign currencies. The markets for some world
currencies have low trading volume and are illiquid, which may
prevent the Partnership from trading in potentially profitable
markets or prevent the Partnership from promptly liquidating
unfavorable positions in such markets, subjecting it to
substantial losses. Either of these market conditions could
result in restrictions on redemptions. For the periods covered by
this report, illiquidity has not materially affected the
Partnership?s assets.

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

Capital Resources. The Partnership does not have, nor expects to
have, any capital assets. Redemptions, exchanges, and sales of
units of limited partnership interest (?Unit(s)?) in the future
will affect the amount of funds available for investments in
futures, forwards, and options in subsequent periods. It is not

<page> possible to estimate the amount, and therefore the impact,
of future inflows and outflows of Units.

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

Off-Balance Sheet Arrangements and Contractual Obligations. The
Partnership does not have any off-balance sheet arrangements, nor
does it have contractual obligations or commercial commitments to
make future payments that would affect its liquidity or capital
resources.

Results of Operations
General. The Partnership?s results depend on the Trading
Advisors and the ability of each Trading Advisor?s trading
program(s) to take advantage of price movements in the futures,
forwards, and options markets. The following presents a summary
of the Partnership?s operations for the three and six month
periods ended June 30, 2006 and 2005, and a general discussion of
its trading activities during each period. It is important to
note, however, that the Trading Advisors trade 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 Advisors or will be profitable in the future.
Consequently, the results of operations of the Partnership are
<page> difficult to discuss other than in the context of the
Trading Advisors? trading activities on behalf of the Partnership
during the period in question. Past performance is no guarantee
of future results.

The Partnership?s results of operations set forth in the
financial statements on pages 2 through 12 of this report are
prepared in accordance with accounting principles generally
accepted in the United States of America, which require the use
of certain accounting policies that affect the amounts reported
in these financial statements, including the following: The
contracts the Partnership trades are accounted for on a trade-
date basis and marked to market on a daily basis. The difference
between their cost and market value is recorded on the Statements
of Operations as ?Net change in unrealized trading profit (loss)?
for open (unrealized) contracts, and recorded as ?Realized
trading profit (loss)? when open positions are closed out. The
sum of these amounts constitutes the Partnership?s trading
results. The market value of a futures contract is the
settlement price on the exchange on which that futures contract
is traded on a particular day. The value of foreign currency
forward contracts is based on the spot rate as of the close of
business. Interest income, as well as management fees, incentive
fees, and brokerage fees expenses of the Partnership are recorded
on an accrual basis.
<page> Demeter believes that, based on the nature of the
operations of the Partnership, no assumptions relating to the
application of critical accounting policies other than those
presently used could reasonably affect reported amounts.

For the Three and Six Months Ended June 30, 2006

The Partnership recorded total trading results including interest
income totaling $36,753,206 and expenses totaling $12,608,588,
resulting in net income of $24,144,618 for the three months ended
June 30, 2006. The Partnership?s net asset value per Unit
increased from $28.48 at March 31, 2006 to $29.74 at June 30,
2006.

The most significant trading gains of approximately 5.4% were
recorded in the global interest rate futures markets from short
positions in U.S., European, Japanese, and Australian interest
rate futures as global bond prices trended lower during April.
In the U.S., interest rate futures prices declined following the
release of stronger-than-expected economic data. Similarly in
Europe, rising equity prices and strong economic growth pressured
European fixed-income futures prices lower. U.S fixed-income
futures prices continued to move lower into May amid higher-than-
forecasted manufacturing and construction data and a sixteenth
consecutive interest rate hike by the U.S. Federal Reserve, while
Australian fixed-income futures prices also declined on an
optimistic outlook for the Australian economy as commodity prices
<page> climbed higher. Finally, additional gains were achieved in
the global interest rate sector during June as prices for U.S.
and European fixed-income futures continued to move lower on
strong economic data out of the U.S. and Europe. In the metals
sector, gains of approximately 3.4% were experienced during April
and May from long futures positions in copper, nickel, and
aluminum as prices rallied sharply on strong global industrial
demand, particularly from the U.S., China, and India, and reports
of decreasing inventories. Additional gains were experienced from
long positions in gold and silver futures as prices reached 25-
year highs, benefiting from strong demand and lagging supply. In
addition, demand for precious metals increased given continued
geopolitical concerns regarding Iran?s nuclear program and
inflation concerns due to high energy prices. A portion of the
Partnership?s gains in the second quarter was offset by losses of
approximately 1.7% in the global equity index market from long
positions in U.S., European, and Japanese stock index futures as
prices reversed lower during May and June. The weakness in the
equity markets was attributed to inflation fears and uncertainty
regarding global interest rate policy. Within the Asian equity
index markets, long positions incurred losses as prices suffered
a heavy sell-off as investors expressed concern that a global
economic slowdown will negatively affect Japan?s export-driven
economy. Losses of approximately 0.8% were incurred in the
agricultural complex from long positions in wheat futures as
prices fell in April and June on forecasts for favorable weather
<page> in U.S. wheat-growing regions. Elsewhere in the
agricultural complex, short futures positions in soybeans
recorded losses as prices moved higher in April on speculative
buying and increased demand. Smaller losses were recorded during
June from newly established long positions as prices moved lower
on forecasts for rain in the drought-suffering regions of the
U.S. Additional losses of approximately 0.4% were incurred in the
energy sector from short positions in natural gas futures as
prices moved higher on fears of a possible supply shortage. In
May, losses were also incurred from long futures positions in
crude oil and its related products as prices fell during the
month after supply data showed an increase in domestic gasoline
and crude oil inventories. Further losses in the energy markets
were recorded during June from newly established long positions
in natural gas futures as prices reversed higher on reports of a
supply surplus and fears of a slowing global economy. Smaller
losses of approximately 0.2% were incurred in the currency
markets from short positions in the Japanese yen, Australian
dollar, and Swiss franc relative to the U.S. dollar as the value
of the U.S. dollar weakened on news that foreign central banks,
including Russia, Sweden, and several Middle Eastern central
banks were diversifying their currency reserves away from the
U.S. dollar. Also pressuring the value of the U.S. dollar lower
were concerns over the steep U.S. trade deficit and speculation
that the U.S. Federal Reserve may be near the end of its interest
rate tightening campaign. In addition to the U.S. dollar
<page> weakening, the Japanese yen strengthened on speculation of
a possible Bank of Japan interest rate hike, while the Swiss
franc moved higher on the political tensions in the Middle East,
which increased the demand for the safe-haven currency. The
Australian dollar also moved higher on an unexpected interest
rate hike by the Reserve Bank of Australia in May.

The Partnership recorded total trading results including interest
income totaling $68,555,559 and expenses totaling $24,438,187,
resulting in net income of $44,117,372 for the six months ended
June 30, 2006. The Partnership?s net asset value per Unit
increased from $27.45 at December 31, 2005 to $29.74 at June 30,
2006.

The most significant trading gains of approximately 8.8% were
experienced in the global interest rate sector from short
positions in U.S., European, and Japanese interest rate futures as
global bond prices trended lower throughout a majority of the
first quarter amid strength in regional equity markets and
investor sentiment that interest rates in the United States, the
European Union, and Japan will rise. U.S. fixed-income futures
continued to move lower into the second quarter following the
release of stronger-than-expected U.S. economic data. Similarly in
Germany, rising equity prices, strong economic growth and concerns
about rising oil prices pressured German fixed-income futures
prices even lower in the second quarter. Additional gains of
<page> approximately 6.3% were recorded in the metals markets from
long futures positions in copper, nickel, zinc, and aluminum as
base metals prices rallied throughout the second quarter on strong
global demand and reports of falling inventories. As a result,
copper and nickel prices hit new-record highs during the month of
May. Further gains in the metals markets were experienced from
long positions in gold and silver futures as prices reached 25-
year highs, benefiting from strong demand and lagging supply.
Demand for gold increased given continued geopolitical concerns
regarding Iran?s nuclear program and inflation concerns due to
high energy prices. Smaller gains, approximately 0.6%, were
experienced in the global stock index sector from long positions
in European and Australian stock index futures as global equity
prices trended higher during the first quarter on strong corporate
earnings and solid economic data. Long positions in Hong Kong
equity index futures also recorded gains as prices moved higher
during April on positive performance in the technology sector and
speculation that the end is near for the U.S. Federal Reserve?s
interest rate tightening campaign. A portion of the Partnership?s
gains in the first six months of the year was offset by losses of
approximately 3.0% incurred in the currency market from short
positions in the Japanese yen, Swiss franc, and Australian dollar.
Throughout a majority of the first half of the year, the U.S.
dollar moved lower on news that foreign central banks are
beginning to diversify their currency reserves away from U.S.
dollar-denominated assets, as well as uncertainty regarding the
<page> future of the U.S. Federal Reserve?s interest rate
tightening campaign. The Japanese yen and Swiss franc moved higher
against the U.S. dollar during January and February as strong
economic data out of the two regions increased speculation that
the Bank of Japan and European Central Bank may raise interest
rates. During April, the Japanese yen strengthened on speculation
of a possible Bank of Japan interest rate hike in the near-future,
while the Swiss franc moved higher on the political tensions in
the Middle East, which increased the demand for the safe-haven
currency. The Australian dollar also moved higher on an unexpected
interest rate hike by the Reserve Bank of Australia in May. Losses
of approximately 1.0% were experienced in the energy markets from
positions in crude oil, heating oil, and natural gas futures.
During February, long futures positions in crude oil and its
related products recorded losses as prices declined after Chinese
government authorities announced that China would place an
emphasis on prospecting alternative energy sources in the future,
reports of larger-than-expected supplies from the International
Energy Agency, and mild weather in the U.S. Northeast. Further
losses in the energy markets were recorded during March from short
positions in the aforementioned markets as prices reversed higher
early in the month on supply fears. In May, losses were incurred
from long futures positions in crude oil and its related products
as prices fell after supply data showed an increase in domestic
gasoline and crude oil inventories. Additional losses were
incurred from short positions in natural gas as prices moved
<page> higher on fears of a possible supply shortage. Smaller
losses were experienced during June from newly established long
positions in natural gas futures as prices reversed higher on
reports of a supply surplus and fears of a slowing global economy.
Losses of approximately 0.8% were incurred in the agricultural
complex from long positions in wheat futures as prices fell in
March, April, and June on forecasts for favorable weather in U.S.
wheat-growing regions. Elsewhere in the agricultural complex,
short futures positions in soybeans recorded losses as prices
moved higher in April on speculative buying and increased demand.
Losses were also recorded in soybean futures during June from
newly established long positions as prices moved lower on
forecasts for rain in the drought-suffering regions of the U.S.
Additionally, short positions in soybean oil also recorded losses
during the first quarter.

For the Three and Six Months Ended June 30, 2005
The Partnership recorded total trading results including interest
income totaling $15,493,277 and expenses totaling $13,727,083,
resulting in net income of $1,766,194 for the three months ended
June 30, 2005. The Partnership?s net asset value per Unit
increased from $26.45 at March 31, 2005 to $26.52 at June 30,
2005.

The most significant trading gains of approximately 5.8% were
recorded in the global interest rate markets from long positions
<page> in European interest rate futures as prices moved higher
throughout the quarter amid concerns for euro-zone economic
growth, speculation for reductions in European interest rates by
the European Central Bank, and rejections of a proposed European
constitution. Additional Partnership gains of approximately 2.3%
were achieved in the currency markets during May and June from
short positions in the euro and Swiss franc versus the U.S.
dollar. During May, the U.S. dollar increased after China
downplayed rumors of a move toward a flexible exchange rate, while
the value of the euro and Swiss franc moved lower on weaker-than-
expected French economic data, the rejection of a proposed
European Union constitution by French voters, and speculation that
future European Constitutional referendums would result in similar
outcomes. During June, short euro and Swiss franc positions
continued to profit as European currency values declined amid
market pessimism for future European integration and the release
of weak European economic data. The U.S. dollar also increased
against other currencies in June following the ninth consecutive
quarter-point increase in U.S. interest rates. A portion of the
Partnership?s gains for the quarter was offset by losses of
approximately 2.0% in the metals markets from positions in both
precious and base metals. During April and May, long futures
positions in base metals recorded losses as prices fell due to
news of increases in supply, fears that a slowing global economy
would weaken demand, and a stronger U.S. dollar. During June,
losses were recorded from short gold positions after prices <page>
reversed higher amid technically-based buying, while long futures
positions in silver experienced losses amid strength in the U.S.
dollar. Additional Partnership losses of approximately 1.6% were
recorded in the energy markets primarily during April from long
futures positions in crude oil and its related products as prices
reversed lower amid greater refinery production, slower growth in
demand, and signs of weaker U.S. economic growth. Losses also
resulted from long positions in natural gas as prices declined
with crude oil prices. Losses of approximately 1.4% were incurred
in the agricultural markets from long futures positions in coffee,
wheat, and cotton. During April, long futures positions in wheat
resulted in losses as prices fell in response to favorable weather
in growing regions, improved crop conditions, and reduced foreign
demand. During May, losses stemmed from long futures positions in
cotton as prices moved lower on supply increases and the lack of
damage to crops by the touchdown of a hurricane in U.S. growing
regions. During June, long futures positions in coffee
experienced losses after prices fell amid news of growth in
exports from coffee-producing countries. Partnership losses of
approximately 0.6% stemmed from the global stock index markets
primarily during April from long positions in Pacific Rim stock
index futures as prices declined amid U.S. economic growth
concerns and higher oil prices. Consistent weakness in global
economic data, combined with weaker-than-expected U.S. Gross
Domestic Product data, resulted in prices falling lower during the
second half of April.
<page> The Partnership recorded total trading results including
interest income totaling $(19,812,069) and expenses totaling
$28,021,511, resulting in a net loss of $47,833,580 for the six
months ended June 30, 2005. The Partnership?s net asset value
per Unit decreased from $28.88 at December 31, 2004 to $26.52 at
June 30, 2005.

The most significant trading losses of approximately 4.6% resulted
in the currency sector during the second quarter from long
positions in the British pound versus the U.S. dollar as the U.S.
dollar?s value advanced after China downplayed rumors of a move
toward a flexible exchange rate during May and then rose further
during June following the ninth consecutive quarter-point increase
in U.S. interest rates. Losses of approximately 2.1% recorded in
the global stock index markets resulted during January, March, and
April from long positions in U.S. and Asian stock index futures.
During January, long U.S. index positions experienced losses after
prices declined amid weak consumer confidence data, concerns about
higher U.S. interest rates, and the potential for slower corporate
profit growth. Additional losses were incurred from long
positions in Japanese equity index futures as prices declined in
the wake of lower U.S. equity markets and weaker-than-expected
earnings in the Japanese technology sector. During March, long
positions in U.S. and Pacific Rim stock index futures incurred
losses after equity prices moved lower amid concerns for the
growing U.S. trade deficit, weakness in the U.S. dollar early in
<page> the month, inflation fears, and concerns that rising energy
prices would negatively impact economic growth in the U.S. and
Pacific Rim region. During April, long positions in Pacific Rim
stock index futures finished with losses as global equity prices
declined amid U.S. economic growth concerns and higher oil prices.
Consistent weakness in global economic data, combined with weaker-
than-expected U.S. Gross Domestic Product data, resulted in prices
falling further during the second half of the month, causing
additional losses from long positions. In the metals markets, the
Partnership incurred losses of approximately 2.1% largely during
the second quarter from positions in both precious and base
metals. During April and May, long futures positions in base
metals recorded losses as prices fell due to news of increases in
supply, fears that a slowing global economy would weaken demand,
and a stronger U.S. dollar. During June, losses were recorded
from short gold positions after prices reversed higher amid
technically-based buying, while long futures positions in silver
experienced losses amid strength in the U.S. dollar. Partnership
losses of approximately 0.9% were incurred in the energy markets
primarily during April from long futures positions in crude oil
and its related products as prices reversed lower amid greater
refinery production, slower growth in demand, and signs of weaker
economic growth. Losses also resulted from long positions in
natural gas as prices declined with crude oil prices. Smaller
Partnership losses of approximately 0.3% were experienced in the
agricultural markets from futures positions in sugar, wheat, and
<page> corn as prices traded without consistent direction
throughout a majority of the year. A portion of the Partnership?s
losses was offset by gains of approximately 6.0% achieved
primarily during the second quarter from long positions in
European interest rate futures as prices moved higher throughout
the quarter amid concerns for euro-zone economic growth,
speculation for reductions in European interest rates by the
European Central Bank, and rejections of a proposed European Union
constitution.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Introduction
The Partnership is a commodity pool engaged primarily in the
speculative trading of futures, forwards, and options. 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 inherent to the primary business activity
of the Partnership.

The futures, forwards, and options 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, factors that result in frequent
<page> changes in the fair value of the Partnership?s open
positions, and consequently in its earnings, whether realized or
unrealized, and cash flow. Gains and losses on open positions of
exchange-traded futures, forwards, and options are settled daily
through variation margin. Gains and losses on off-exchange-
traded forward currency contracts are settled upon termination of
the contract, however, the Partnership is required to meet margin
requirements equal to the net unrealized loss on open contracts
in Partnership accounts with the counterparty, which is
accomplished by daily maintenance of the cash balance in a
custody account held at Morgan Stanley DW for the benefit of MS &
Co.

The Partnership?s total market risk may increase or decrease as
it is influenced by a wide variety of factors, including, but not
limited to, the diversification among the Partnership?s open
positions, the volatility present within the markets, and the
liquidity of the markets.

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.
<page>
The Partnership?s past performance is no guarantee 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 and use of
leverage may cause future losses and volatility (i.e., ?risk of
ruin?) that far exceed the Partnership?s experience to date under
the ?Partnership?s Value at Risk in Different Market Sectors?
section and significantly exceed the Value at Risk (?VaR?) tables
disclosed.

Limited partners will not be liable for losses exceeding the
current net asset value of their investment.

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.

<page> The Partnership accounts for open positions on the basis of
mark to market accounting principles. Any loss in the market
value of the Partnership?s open positions is directly reflected in
the Partnership?s earnings and cash flow.

The Partnership?s risk exposure in the market sectors traded by
the Trading Advisors is estimated below in terms of VaR. The
Partnership estimates VaR using a model based upon historical
simulation (with a confidence level of 99%) which involves
constructing a distribution of hypothetical daily changes in the
value of a trading portfolio. The VaR model takes into account
linear exposures to risk including 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 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, or one day in 100. VaR
typically does not represent the worst case outcome. Demeter
uses approximately four years of daily market data (1,000
observations) and re-values its portfolio (using delta-gamma
approximations) for each of the historical market moves that
occurred over the time period. This generates a probability
<page> distribution of daily ?simulated profit and loss?
outcomes. The VaR is the appropriate percentile of this
distribution. For example, the 99% one-day VaR would represent
the 10th worst outcome from Demeter?s simulated profit and loss
series.

The Partnership?s VaR computations are based on the risk
representation of the underlying benchmark for each instrument or
contract and do not distinguish between exchange and non-exchange
dealer-based instruments. They are also not based on exchange
and/or dealer-based maintenance margin requirements.

VaR models, including the Partnership?s, are continually 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 Advisors in their daily risk management activities.
Please further note that VaR as described above may not be
comparable to similarly-titled measures used by other entities.

The Partnership?s Value at Risk in Different Market Sectors
The following table indicates the VaR associated with the
Partnership?s open positions as a percentage of total Net Assets
by primary market risk category at June 30, 2006 and 2005. At
<page> June 30, 2006 and 2005, the Partnership?s total
capitalization was approximately $565 million and $558 million,
respectively.
Primary Market June 30, 2006 June 30, 2005
Risk Category Value at Risk Value at Risk

Interest Rate (1.70)% (2.49)%

Currency (0.55) (1.94)

Equity (0.39) (2.51)

Commodity (0.49) (0.71)

Aggregate Value at Risk (1.73)% (3.18)%

The VaR for a market category represents the one-day downside risk
for the aggregate exposures associated with this market category.
The Aggregate Value at Risk listed above represents the VaR of the
Partnership?s open positions across all the market categories, and
is less than the sum of the VaRs for all such market categories
due to the diversification benefit across asset classes.

Because the business of the Partnership is the speculative
trading of futures, forwards, and options, the composition of its
trading portfolio can change significantly over any given time
period, or even within a single trading day, which could
positively or negatively materially impact market risk as
measured by VaR.

The table below supplements the quarter-end VaR set forth above
by presenting the Partnership?s high, low, and average VaR, as a
<page> percentage of total Net Assets for the four quarter-end
reporting periods from July 1, 2005 through June 30, 2006.

Primary Market Risk Category High Low Average
Interest Rate (1.70)% (0.31)% (1.03)%
Currency (1.06) (0.55) (0.76)
Equity (2.21) (0.39) (1.54)
Commodity (1.04) (0.49) (0.74)
Aggregate Value at Risk (2.96)% (1.73)% (2.62)%

Limitations on Value at Risk as an Assessment of Market Risk
VaR models permit estimation of a portfolio?s aggregate market
risk exposure, incorporating a range of varied market risks;
reflect risk reduction due to portfolio diversification or hedging
activities; and can cover a wide range of portfolio assets.
However, VaR risk measures should be viewed in light of the
methodology?s limitations, which include, but may not be limited
to the following:
* past changes in market risk factors will not always result in
accurate predictions of the distributions and correlations of
future market movements;
* changes in portfolio value caused by market movements may
differ from those of the VaR model;
* VaR results reflect past market fluctuations applied to current
trading positions while future risk depends on future
positions;
<page>
* 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.

In addition, the VaR tables above, as well as the past performance
of the Partnership, give no indication of the Partnership?s
potential ?risk of ruin?.

The VaR tables provided present the results of the Partnership?s
VaR for each of the Partnership?s market risk exposures and on an
aggregate basis at June 30, 2005, and for the four quarter-end
reporting periods from July 1, 2005 through June 30, 2006. VaR is
not necessarily representative of the Partnership?s historic risk,
nor should it be used to predict the Partnership?s future
financial performance or its ability to manage or monitor risk.
There can be no assurance that the Partnership?s actual losses on
a particular day will not exceed the VaR amounts indicated above
or that such losses will not occur more than once in 100 trading
days.

<page> Non-Trading Risk
The Partnership has non-trading market risk on its foreign cash
balances. These balances and any market risk they may represent
are immaterial.

The Partnership also maintains a substantial portion of its
available assets in cash at Morgan Stanley DW; as of June 30,
2006, such amount is equal to approximately 93% of the
Partnership?s net asset value. A decline in short-term interest
rates would result in a decline in the Partnership?s cash
management income. This cash flow risk is not considered to be
material.

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

Qualitative Disclosures Regarding Primary Trading Risk Exposures
The following qualitative disclosures regarding the Partnership?s
market risk exposures - except for (A) those disclosures that are
statements of historical fact and (B) the descriptions of how the
Partnership manages its primary market risk exposures - constitute
forward-looking statements within the meaning of Section 27A of
the Securities Act and Section 21E of the Securities Exchange Act.
<page> The Partnership?s primary market risk exposures, as well as
the strategies used and to be used by Demeter and the Trading
Advisors for managing such exposures, are subject to numerous
uncertainties, contingencies and risks, any one of which could
cause the actual results of the Partnership?s risk controls to
differ materially from the objectives of such strategies.
Government interventions, defaults and expropriations, illiquid
markets, the emergence of dominant fundamental factors, political
upheavals, changes in historical price relationships, an influx of
new market participants, increased regulation, and many other
factors could result in material losses, as well as in material
changes to the risk exposures and the risk management strategies
of the Partnership. Investors must be prepared to lose all or
substantially all of their investment in the Partnership.

The following were the primary trading risk exposures of the
Partnership at June 30, 2006, by market sector. It may be
anticipated, however, that these market exposures will vary
materially over time.

Interest Rate. The largest market exposure of the Partnership at
June 30, 2006 was to the global interest rate sector. Exposure
was primarily spread across European, U.S., Australian, Japanese,
and Canadian 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
<page> 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 interest rate exposure is
generally to interest rate fluctuations in the U.S. and the other
G-7 countries interest rates. The G-7 countries consist of
France, the U.S., Britain, Germany, Japan, Italy, and Canada.
However, the Partnership also takes futures positions in the
government debt of smaller countries ? e.g., Australia. Demeter
anticipates that the G-7 countries? interest rates and Australian
interest rates will remain the primary interest rate exposure of
the Partnership for the foreseeable future. The speculative
futures positions held by the Partnership may range from short to
long-term instruments. Consequently, changes in short, medium,
or long-term interest rates may have an effect on the
Partnership.

Currency. The third largest market exposure of the Partnership
at June 30, 2006 was to the currency sector. The Partnership?s
currency market exposure was to exchange rate fluctuations,
primarily fluctuations which disrupt the historical pricing
relationships between different currencies and currency
pairs. Interest rate changes, as well as political and general
economic conditions influence these fluctuations. The
Partnership trades a large number of currencies, including cross-
rates ? i.e., positions between two currencies other than the
<page> U.S. dollar. At June 30, 2006, the Partnership?s major
exposures were to euros, Japanese yen, British pounds, and Swiss
franc currency crosses, as well as to outright U.S. dollar
positions. Outright positions consist of the U.S. dollar vs.
other currencies. These other currencies include major and minor
currencies. Demeter does not anticipate that the risk associated
with the Partnership?s currency trades will change significantly
in the future.

Equity. At June 30, 2006, the Partnership had market exposure to
the global stock index sector, primarily to equity price risk in
the G-7 countries. The stock index futures traded by the
Partnership are by law limited to futures on broadly-based
indices. The Partnership?s primary market exposures were to the
NASDAQ 100 (U.S.), S&P 500 (U.S.), TOPIX (Japan), NIKKEI 225
(Japan), Euro Stox 50 (Europe), FTSE 100 (United Kingdom),
S&P/MIB (Italy), Hang Seng (China), and TAIWAN (Taiwan) stock
indices. The Partnership is typically exposed to the risk of
adverse price trends or static markets in the European, U.S.,
Chinese, and Japanese stock indices. Static markets would not
cause major market changes, but would make it difficult for the
Partnership to avoid trendless price movements, resulting in
numerous small losses.

<page>
Commodity.
Soft Commodities and Agriculturals. The second largest
market exposure of the Partnership at June 30, 2006 was to
the markets that comprise these sectors. Most of the
exposure was to the cotton, lean hogs, soybean meal, cocoa,
coffee, soybean oil, sugar, soybeans, feeder cattle, live
cattle, orange juice, and rubber markets. Supply and demand
inequalities, severe weather disruptions and market
expectations affect price movements in these markets.

Energy. At June 30, 2006, the Partnership had market
exposure in the energy sector. The Partnership?s energy
exposure was shared primarily by futures contracts in crude
oil and its related products. Price movements in these
markets result from geopolitical developments, particularly
in the Middle East, as well as weather patterns and other
economic fundamentals. Significant profits and losses,
which have been experienced in the past, are expected to
continue to be experienced in the future.

Metals. At June 30, 2006, the Partnership had market
exposure in the metals sector. The Partnership's metals
exposure was to fluctuations in the price of base metals,
such as copper, nickel, and aluminum and precious metals,
such as gold and platinum. Economic forces, supply and
<page> demand inequalities, geopolitical factors, and market
expectations influence price movements in these markets.
The Trading Advisors utilize the trading system(s) to take
positions when market opportunities develop, and Demeter
anticipates that the Partnership will continue to do so.

Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following was the only non-trading risk exposure of the
Partnership at June 30, 2006:

Foreign Currency Balances. The Partnership?s primary foreign
currency balances at June 30, 2006 were in euros, Hong Kong
dollars, Japanese yen, British pounds, Australian dollars,
Norwegian krone, Swiss francs, and Canadian dollars. The
Partnership controls the non-trading risk of foreign
currency balances by regularly converting them back into
U.S. dollars upon liquidation of their respective positions.

Qualitative Disclosures Regarding Means of Managing Risk Exposure
The Partnership and the Trading Advisors, 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 Trading Advisors in a multi-advisor Partnership,
each of whose strategies focus on different market sectors and
trading approaches, and by monitoring the performance of the
<page> Trading Advisors daily. In addition, the Trading Advisors
establish diversification guidelines, often set in terms of the
maximum margin to be committed to positions in any one market
sector or market-sensitive instrument.

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

Item 4. CONTROLS AND PROCEDURES
(a) As of the end of the period covered by this quarterly
report, the President and Chief Financial Officer of
Demeter, the general partner of the Partnership, have
evaluated the effectiveness of the Partnership?s
disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) of the Exchange Act), and have
judged such controls and procedures to be effective.

(b) There have been no material changes during the period
covered by this quarterly report in the Partnership?s
internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) of the Exchange Act) or in
other factors that could significantly affect these
controls subsequent to the date of their evaluation.

<page> PART II. OTHER INFORMATION
Item 1A. RISK FACTORS
There have been no material changes from the risk factors
previously referenced in the Partnership?s Report on Form 10-K for
the fiscal year ended December 31, 2005 and the Partnership?s
Report on Form 10-Q for the quarter ended March 31, 2006.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
SEC
Registration Statement on Form S-1 Units
Registered Effective Date File Number

Initial Registration 60,000.000 May 17, 1991 33-39667
Supplemental Closing 10,000.000 August 23, 1991 33-42380
Additional Registration 75,000.000 August 31, 1993 33-65072
Additional Registration 60,000.000 October 27, 1997 333-01918
Pre-conversion 205,000.000

Units sold through 10/17/97 146,139.671
Units unsold through 10/17/97 58,860.329
(Ultimately de-registered)

Commencing with the April 30, 1998 monthly closing and with
becoming a member of the Spectrum Series of funds, each previously
outstanding Unit of the Partnership was converted into 100 Units,
totaling 14,613,967.100 (pre-conversion).

<page>
Additional Registration 1,500,000.000 May 11, 1998 333-47829
Additional Registration 5,000,000.000 January 21, 1999 333-68773
Additional Registration 4,500,000.000 February 28, 2000 333-90467
Additional Registration 1,000,000.000 April 30, 2002 333-84656
Additional Registration 7,000,000.000 April 28, 2003 333-104005
Additional Registration 23,000,000.000 April 28, 2004 333-113393
Total Units Registered 42,000,000.000

Units sold post conversion 25,927,846.766
Units unsold through 6/30/06 16,072,153.234

Total Units sold
through 6/30/06 40,541,813.866
(pre and post conversion)

The managing underwriter for the Partnership is Morgan Stanley DW.

Units are continuously sold at monthly closings at a purchase
price equal to 100% of the net asset value per Unit as of the
close of business on the last day of each month.

The aggregate price of the Units sold through June 30, 2006 was
$895,754,895.

Since no expenses are chargeable against proceeds, 100% of the
proceeds of the offering have been applied to the working capital
of the Partnership for use in accordance with the ?Use of
Proceeds? section of the prospectus included as part of the above
referenced Registration Statements.

<page>
Item 5. OTHER INFORMATION
Management. In connection with the election of new directors to
the Board of Directors of Demeter, the following information
updates the disclosures in the Partnership?s Form 8-K filed on
March 27, 2006 and Form 8-K filed on April 5, 2006:

On May 11, 2006, the National Futures Association approved Mr.
Walter Davis, Mr. Michael McGrath, and Mr. Andrew Saperstein as
directors of Demeter.

On July 20, 2006, the National Futures Association approved Mr.
Walter Davis as an associated person of Demeter.

Item 6. EXHIBITS

31.01 Certification of President of Demeter Management
Corporation, the general partner of the Partnership,
pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
31.02 Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership, pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.
32.01 Certification of President of Demeter Management
Corporation, the general partner of the Partnership,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
32.02 Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.

<page>

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.

Morgan Stanley Spectrum Select L.P.
(Registrant)

By: Demeter Management Corporation
(General Partner)

August 14, 2006 By:/s/ Kevin Perry
Kevin Perry
Chief Financial Officer

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