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 September 30, 2007 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
522 Fifth Avenue, 13th Floor
New York, NY 10036
(Address of principal executive offices) (Zip Code)

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

(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

September 30, 2007

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

Statements of Financial Condition as of September 30, 2007
(Unaudited) and December 31, 2006 2

Statements of Operations for the Three and Nine Months
Ended September 30, 2007 and 2006 (Unaudited) 3

Statements of Changes in Partners' Capital for the
Nine Months Ended September 30, 2007 and 2006 (Unaudited) 4

Statements of Cash Flows for the Nine Months Ended
September 30, 2007 and 2006 (Unaudited) 5

Schedules of Investments as of September 30, 2007
(Unaudited) and December 31, 2006...........................6

Notes to Financial Statements (Unaudited) 7-14

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 15-30

Item 3. Quantitative and Qualitative Disclosures about
Market Risk 30-43

Item 4. Controls and Procedures 44

Item 4T. Controls and Procedures 44

PART II. OTHER INFORMATION

Item 1A.Risk Factors 45

Item 2. Unregistered Sales of Equity Securities
and Use of Proceeds 45-46

Item 5. Other Information ... 46

Item 6. Exhibits 46-47
</table>

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

MORGAN STANLEY SPECTRUM SELECT L.P.
STATEMENTS OF FINANCIAL CONDITION
<caption>
September 30, December 31,
2007 2006
$ $
(Unaudited)
ASSETS
<s> <c> <c>
Equity in futures interests trading accounts:
Unrestricted cash 443,366,675 472,088,633
Restricted cash 47,100,397 64,801,445

Total cash 490,467,072 536,890,078

Net unrealized gain on open contracts (MS&Co.) 33,275,747 11,039,855
Net unrealized gain on open contracts (MSIP) 1,507,175 921,756

Total net unrealized gain on open contracts 34,782,922 11,961,611

Total Trading Equity 525,249,994 548,851,689

Subscriptions receivable 1,996,517 4,725,710
Interest receivable (MS&Co.) 1,307,468 1,858,406

Total Assets 528,553,979 555,435,805

LIABILITIES AND PARTNERS' CAPITAL

Liabilities

Redemptions payable 10,465,722 7,988,976
Accrued brokerage fees (MS&Co.) 2,427,950 2,727,852
Accrued management fees 1,060,545 1,196,492
Accrued incentive fee 445,293 -

Total Liabilities 14,399,510 11,913,320

Partners' Capital
Limited Partners (17,195,472.423 and
18,501,387.237 Units, respectively) 508,499,625 537,667,844
General Partner (191,224.769 and
201,460.769 Units, respectively) 5,654,844 5,854,641

Total Partners' Capital 514,154,469 543,522,485

Total Liabilities and Partners' Capital 528,553,979 555,435,805

NET ASSET VALUE PER UNIT 29.57 29.06
<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)

For the Three Months For the Nine Months
Ended September 30, Ended September 30,

2007 2006 2007 2006
$ $ $ $
<s> <c> <c> <c> <c>
INVESTMENT INCOME
Interest income (MS&Co.) 4,817,933 5,482,892 15,050,688 15,228,561

EXPENSES
Brokerage fees (MS&Co.) 7,810,074 8,220,584 23,635,367 24,777,826
Management fees 3,420,998 3,915,861 10,385,929 11,796,806
Incentive fees 497,617 - 497,617 -

Total Expenses 11,728,689 12,136,445 34,518,913 36,574,632

NET INVESTMENT LOSS (6,910,756) (6,653,553) (19,468,225) (21,346,071)

TRADING RESULTS
Trading profit (loss):
Realized (29,965,493) (23,258,682) 5,348,358 41,067,247
Net change in unrealized 15,497,488 (243,326) 22,821,311 (5,759,365)

Total Trading Results (14,468,005) (23,502,008) 28,169,669 35,307,882

NET INCOME (LOSS) (21,378,761) (30,155,561) 8,701,444 13,961,811

NET INCOME (LOSS) ALLOCATION

Limited Partners (21,141,608) (29,819,979) 8,602,350 13,811,989
General Partner (237,153) (335,582) 99,094 149,822

NET INCOME (LOSS) PER UNIT

Limited Partners (1.16) (1.59) 0.51 0.70
General Partner (1.16) (1.59) 0.51 0.70

Units Units Units Units
WEIGHTED AVERAGE NUMBER
OF UNITS OUTSTANDING 17,744,142.966 19,017,055.500 18,209,734.053 19,089,725.854 (0.19)

<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 Nine Months Ended September 30, 2007 and 2006
(Unaudited)

Units of
Partnership Limited General
Interest Partners Partner Total
$ $ $
<s> <c> <c> <c> <c>
Partners' Capital,
December 31, 2005 19,420,800.627 527,198,790 5,803,552 533,002,342

Offering of Units 2,084,611.535 60,239,714 - 60,239,714

Net Income - 13,811,989 149,822 13,961,811

Redemptions (2,516,978.515) (72,614,331) - (72,614,331)

Partners' Capital,
September 30, 2006 18,988,433.647 528,636,162 5,953,374 534,589,536

Units of
Partnership Limited General
Interest Partners Partner Total
$ $ $
Partners' Capital,
December 31, 2006 18,702,848.006 537,667,844 5,854,641 543,522,485

Offering of Units 1,285,666.373 36,860,346 - 36,860,346

Net Income - 8,602,350 99,094 8,701,444

Redemptions (2,601,817.187) (74,630,915) (298,891) (74,929,806)

Partners' Capital,
September 30, 2007 17,386,697.192 508,499,625 5,654,844 514,154,469

<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 Nine Months Ended September 30,

2007 2006
$ $

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

Net income 8,701,444 13,961,811
Noncash item included in net income:
Net change in unrealized (22,821,311) 5,759,365

(Increase) decrease in operating assets:
Restricted cash 17,701,048 (585,466)
Interest receivable (MS&Co.) 550,938 (353,185)

Increase (decrease) in operating liabilities:
Accrued brokerage fees (MS&Co.) (299,902) (28,094)
Accrued management fee (135,947) (8,030)
Accrued incentive fee 445,293 -

Net cash provided by operating activities 4,141,563 18,746,401

CASH FLOWS FROM FINANCING ACTIVITIES

Cash received from offering of Units 39,589,539 59,160,387
Cash paid for redemptions of Units (72,453,060) (77,952,111)

Net cash used for financing activities (32,863,521) (18,791,724)

Net decrease in unrestricted cash (28,721,958) (45,323)

Unrestricted cash at beginning of period 472,088,633 475,166,952

Unrestricted cash at end of period 443,366,675 475,121,629

<fn>

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

</table>

<page><table> MORGAN STANLEY SPECTRUM SELECT L.P.
SCHEDULES OF INVESTMENTS
September 30, 2007 (Unaudited) and December 31, 2006

September 30, 2007, Partnership Net Assets: $514,154,469

Futures and Forward Contracts
Long
Unrealized
Gain/(Loss)

Percentage of
Net Assets
Short
Unrealized
Gain/(Loss)

Percentage of
Net Assets

Net Unrealized
Gain/(Loss)

$
%
$
%
$
<s>
<c>
<c>
<c>
<c>
<c>
Commodity
18,081,423
3.52
840,361
0.16
18,921,784
Equity
1,254,590
0.24
(1,582,801)
(0.31)
(328,211)
Foreign currency
12,999,339
2.53
2,201,199
0.43
15,200,538
Interest rate
1,240,174
0.24
(98,993)
(0.02)
1,141,181

Grand Total:
33,575,526
6.53
1,359,766
0.26
34,935,292

Unrealized Currency Loss

(152,370)

Total Net Unrealized Gain per Statement of Financial Condition

34,782,922

December 31, 2006, Partnership Net Assets: $543,522,485

Futures and Forward Contracts
Long
Unrealized
Gain/(Loss)

Percentage of
Net Assets
Short
Unrealized
Gain/(Loss)

Percentage of
Net Assets

Net Unrealized
Gain/(Loss)

$
%
$
%
$

Commodity
456,160
0.08
2,995,834
0.55
3,451,994
Equity
4,924,820
0.91
-
-
4,924,820
Foreign currency
(247,846)
(0.05)
2,552,915
0.47
2,305,069
Interest rate
(2,248,119)
(0.41)
4,585,113
0.84
2,336,994

Grand Total:
2,885,015
0.53
10,133,862
1.86
13,018,877

Unrealized Currency Loss

(1,057,266)

Total Net Unrealized Gain per Statement of Financial Condition

11,961,611

<fn>

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

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

September 30, 2007

(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, 2006, Annual
Report on Form 10-K.

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,
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.

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

The Partnership's general partner is Demeter Management
Corporation ("Demeter"). Morgan Stanley & Co. Incorporated
("MS&Co.") is the Partnership's principal commodity broker-dealer
and also acts as the counterparty on all trading of foreign
currency forward contracts. In addition, Morgan Stanley & Co.
International plc ("MSIP") serves as the commodity broker for
trades on the London Metal Exchange. Demeter, MS&Co., and MSIP
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 MS&Co. and MSIP in
futures, forward, and options trading accounts to meet margin
requirements as needed. MS&Co. pays the Partnership at each month
end interest income on 80% of the funds on deposit with the
commodity brokers at a rate equal to the monthly average of the
4-week U.S. Treasury bills discount rate during such month. The
Partnership pays brokerage fees to MS&Co.

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

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
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.

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

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, swap or options
contracts, and other financial instruments with similar
characteristics such as caps, floors, and collars.

The net unrealized gains 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:
<page> MORGAN STANLEY SPECTRUM SELECT L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Net Unrealized Gains
on Open Contracts Longest Maturities
Exchange- Off-Exchange- Exchange- Off-Exchange-
Date Traded Traded Total Traded Traded
$ $ $
Sep. 30, 2007 27,859,496 6,923,426 34,782,922 Mar. 2009 Dec. 2007
Dec. 31, 2006 10,738,293 1,223,318 11,961,611 Jun. 2008 Mar. 2007

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 MS&Co. and MSIP act
as the futures commission merchants or the counterparties, with
respect to most of the Partnership's assets. Exchange-traded
futures, exchange-traded forward, and exchange-traded futures-
styled options contracts are marked to market on a daily basis,
with variations in value settled on a daily basis. MS&Co. and
MSIP, each as a futures commission merchant for the Partnership's
exchange-traded futures, exchange-traded forward, and exchange-
traded 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

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

their commodity customers, all funds held by them with respect to
exchange-traded futures, exchange-traded forward, and exchange-
traded futures-styled options contracts, including an amount equal
to the net unrealized gains (losses) on all open exchange-traded
futures, exchange-traded forward, and exchange-traded futures-
styled options contracts, which funds, in the aggregate, totaled
$518,326,568 and $547,628,371 at September 30, 2007, and December
31, 2006, respectively. With respect to the Partnership's off-
exchange-traded forward currency contracts, there are no daily
settlements of variation in value, nor is there any requirement
that an amount equal to the net unrealized gains (losses) on such
contracts be segregated. However, the Partnership is required to
meet margin requirements equal to the net unrealized loss on open
forward currency contracts in the Partnership accounts with the
counterparty, which is accomplished by daily maintenance of the
cash balance in a custody account held at 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 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> MORGAN STANLEY SPECTRUM SELECT L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

4. New Accounting Developments
In July 2006, the Financial Accounting Standards Board ("FASB")
issued interpretation No. 48, "Accounting for Uncertainty in
Income Taxes " an interpretation of FASB Statement 109 - ("FIN
48"). FIN 48 clarifies the accounting for income taxes by
prescribing the minimum recognition threshold a tax position must
meet before being recognized in the financial statements. FIN 48
was effective for the Partnership as of January 1, 2007. Based
on its analysis, management believes that the adoption of FIN 48
has no impact on the Partnership's financial statements.

In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements" ("SFAS No. 157"). SFAS No. 157 defines fair value,
establishes a framework for measuring fair value, and expands
disclosures about fair value measurements. SFAS No. 157 is
effective for the Partnership as of January 1, 2008. The impact
to the Partnership's financial statements, if any, is currently
being assessed.

5. Restricted and Unrestricted Cash
As reflected on the Partnership's Statements of Financial
Condition, restricted cash represents cash on deposit to satisfy
margin requirements for trading. These amounts of restricted cash

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

are maintained in separate trading accounts. Cash that is not on
deposit to satisfy the margin requirements for trading is
reflected as unrestricted cash.

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

Liquidity. The Partnership deposits its assets with MS&Co. and
MSIP as commodity brokers in separate futures, forward, 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 does it
expect 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 to take advantage of price movements in the futures,
forward, and options markets. The following presents a summary
of the Partnership''s operations for the three and nine month
periods ended September 30, 2007, and 2006, 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 difficult to discuss other than in the context of
the Trading Advisors' trading activities on behalf of the <page>
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 14 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 a foreign currency
forward contract 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.

Demeter believes that, based on the nature of the operations of
the Partnership, no assumptions relating to the application of
<page> critical accounting policies other than those presently
used could reasonably affect reported amounts.

For the Three and Nine Months Ended September 30, 2007

The Partnership recorded total trading results including interest
income totaling $(9,650,072) and expenses totaling $11,728,689,
resulting in a net loss of $21,378,761 for the three months ended
September 30, 2007. The Partnership's net asset value per Unit
decreased from $30.73 at June 30, 2007, to $29.57 at September
30, 2007.

The most significant trading losses of approximately 2.9% were
recorded in the global stock index sector primarily during July
and August from long positions in Japanese, European, and U.S.
equity index futures as prices fell sharply amid speculation that
a widening credit crunch, sparked by U.S. sub-prime mortgage
losses, would erode global economic growth and corporate
earnings. Additional losses of approximately 1.3% were incurred
in the global interest rate sector, also during July and August,
from short positions in European, Australian, and U.S. fixed-
income futures as prices reversed sharply higher in a worldwide
"flight-to-quality" after the significant decline in the global
equity markets resulted in substantially higher demand for the
"safe haven" of government bonds. Smaller losses continued
during September from long positions in European interest rate
futures as prices reversed lower following a rebound in global
equities, which reduced demand for the relative safety of <page>
government debt. A portion of the Partnership's losses during
the quarter was offset by gains of approximately 1.2% experienced
in the agricultural markets during August and September from long
positions in wheat futures as prices increased to a record high
amid persistently strong international demand and news from the
U.S. Department of Agriculture that global stockpiles would fall
to the lowest level in 26 years. Further gains of approximately
0.4% were recorded in the metals markets primarily during
September from long positions in gold and platinum futures as
prices moved higher due to persistent weakness in the value of
the U.S. dollar. In addition, prices of gold futures rose on
speculation that a strike in Peru's largest gold mine would
disrupt global supplies. Smaller gains of approximately 0.2%
were experienced in the energy markets primarily during July and
September from long futures positions in crude oil and its
related products as prices moved higher amid persistent concerns
regarding U.S. refinery capacity and after continuous hurricane
activity in the Gulf of Mexico threatened production facilities.
Lastly, further gains of approximately 0.1% were recorded in the
currency sector primarily during September from long positions in
the euro, Canadian dollar, and Norwegian krone versus the U.S.
dollar, as well as outright short positions in the U.S. Dollar
Index, as the value of the U.S. dollar moved lower relative to
most of its major rivals leading up to and after the U.S. Federal
Reserve's decision to cut interest rates at its September 18
meeting. In addition, the value of the U.S. dollar was pulled
lower amid speculation that the U.S. Federal Reserve would
continue to reduce interest rates in the near term. Conversely,
<page> the value of the Canadian dollar and Norwegian krone moved
higher in tandem with rising energy prices on investor belief
that surging oil prices and exports would expand these respective
economies.

The Partnership recorded total trading results including interest
income totaling $43,220,357 and expenses totaling $34,518,913,
resulting in net income of $8,701,444 for the nine months ended
September 30, 2007. The Partnership's net asset value per Unit
increased from $29.06 at December 31, 2006, to $29.57 at
September 30, 2007.

The most significant trading gains of approximately 4.6% were
experienced in the currency sector during April, May, June, and
September from long positions in the euro, Canadian dollar,
Australian dollar, Turkish lira, and Brazilian real versus the
U.S. dollar, as well as outright short positions in the U.S.
Dollar Index, as the value of these currencies strengthened
relative to the U.S. dollar amid the release of consistently
strong economic data out of their respective countries.
Furthermore, the value of the U.S. dollar weakened against most
of its major rivals leading up to and after the U.S. Federal
Reserve's decision to cut interest rates at its September 18
meeting. Additional gains of approximately 3.9% were recorded in
the global interest rate sector during January, May, and June
from short positions in European interest rate futures as prices
initially fell after reports showed confidence in the Euro-Zone
economy stayed close to a six-year high in December and <page>
unemployment dropped in the United Kingdom and Germany. In
addition, European fixed-income futures prices fell after reports
showed Italian retail sales were stronger than expected during
April and German investor confidence rose during May.
Furthermore, prices continued to move lower on news that housing
prices in the United Kingdom showed their biggest jump this year.
During August, long positions in Japanese government bond futures
resulted in smaller gains as prices increased in a continuation
of a worldwide "flight-to-quality" after volatility in the global
equity markets, spurred by losses in the U.S. sub-prime mortgage
sector, caused investors to seek the "safe haven" of government
bonds. Smaller gains of approximately 0.5% were recorded in the
agricultural markets during June, August, and September from long
positions in wheat futures as prices rose amid persistently
strong international demand and news from the U.S. Department of
Agriculture that global stockpiles would fall to the lowest level
in 26 years. Elsewhere, long positions in soybean oil and
soybean meal futures resulted in gains primarily during May and
June as prices moved higher after a representative from the
European Union announced plans to increase alternative fuel
sources and U.S. government reports showed that soybean acreage
was down from a year earlier. A portion of the Partnership'
gains in the first nine months of the year was offset by losses
of approximately 2.0% recorded in the metals markets throughout a
majority of the year from both short and long positions in
silver, gold, and aluminum futures as prices moved without
consistent direction due to conflicting data regarding supply and
demand, as well as uncertainty regarding the direction of the
<page> U.S. dollar. Additional losses of approximately 1.3% were
incurred in the global stock index sector during February and
early March from long positions in Japanese and U.S. stock index
futures as prices reversed sharply lower after a massive sell-off
in the global equity markets that began on February 27, 2007,
following comments from former U.S. Federal Reserve Chairman Alan
Greenspan that the U.S. economy could be due for a recession. In
addition, concerns that tighter credit conditions in China and
Japan might dampen global growth first sent Chinese stock markets
plunging before the sell-off spread to other equity markets.
During July and August, long positions in U.S. equity index
futures resulted in further losses as prices fell sharply amid
speculation that a widening credit crunch, sparked by U.S. sub-
prime mortgage losses, would erode global economic growth and
corporate earnings. Smaller losses of approximately 0.1% were
experienced within the energy markets during March from short
positions in natural gas futures as prices reversed higher after
the U.S. Department of Energy reported that supplies were down
15% from a year earlier. Further losses were recorded from both
short and long positions in natural gas futures as prices moved
in a trendless pattern during May. During August, long positions
in gasoline futures resulted in losses as prices declined amid
concerns that a slowdown in the global economy would negatively
impact global energy demand.

For the Three and Nine Months Ended September 30, 2006

The Partnership recorded total trading results including interest
income totaling $(18,019,116) and expenses totaling $12,136,445,
<page> resulting in a net loss of $30,155,561 for the three
months ended September 30, 2006. The Partnership's net asset
value per Unit decreased from $29.74 at June 30, 2006, to $28.15
at September 30, 2006.

The most significant trading losses of approximately 3.6% were
incurred in the global interest rate futures markets primarily
during July from short positions in U.S., British, German, and
Japanese fixed-income futures as prices reversed higher on
significant geopolitical concerns after North Korea conducted
long-range missile tests, terrorist bombings aboard commuter
trains in Bombay, India, and fears of an escalating conflict in
the Middle East. Prices for German fixed-income futures
continued to rise in August after the "ZEW" report showed
investor confidence in Germany fell to its lowest level since
June 2001. Meanwhile, British fixed-income futures prices
increased on weaker than expected industrial data. Finally,
short positions in Japanese fixed-income futures incurred losses
during August as prices were pressured higher after lower than
expected inflation data dampened expectations for an interest
rate hike by the Bank of Japan in the near future. Losses of
approximately 0.8% were recorded in the energy markets during
July and August from long futures positions in crude oil and its
related products as prices moved lower after weaker than expected
U.S. economic data led investors to believe that energy demand
would be negatively affected and the U.S. Department of Labor
reported an unexpected climb in domestic gasoline supplies.
Prices were pressured further lower after news of an official
<page> cease-fire between Israel and Hezbollah militants in
Lebanon and news that the Organization of Petroleum Exporting
Countries reduced its 2006 oil demand growth forecast. Within
the agricultural markets, losses of approximately 0.7% were
incurred primarily during July from long futures positions in
wheat and soybean oil as prices decreased on forecasts of
improved weather conditions across the growing regions of the
U.S. Additional losses were incurred during July from long
positions in cocoa futures as prices reversed lower on news from
the International Cocoa Organization that global supplies were
still adequate to meet demand. A portion of the Partnership's
overall losses for the quarter was offset by gains of
approximately 0.4% in the global stock index markets during July
and August from long positions in Hong Kong stock index futures
as prices moved higher on news that Gross Domestic Product in
China surged to 10.9% in the first six months of this year.
Additional gains in the global stock index futures markets were
experienced during September from long positions in European
equity index futures as prices were supported higher on merger
and acquisition activity and stronger than expected corporate
earnings. Within the currency markets, gains of approximately
0.3% were recorded primarily during August from short positions
in the Japanese yen against the U.S. dollar, British pound, and
euro as the value of the Japanese yen moved lower against other
foreign currencies after the Japanese Consumer Price Index for
July came in lower than expected and was revised down for the
previous months. As such, this weaker than expected inflation
data diminished expectations of another interest rate hike by the
<page> Bank of Japan this year. Finally, smaller gains of
approximately 0.2% were recorded within the metals markets from
long futures positions in nickel during July and August as prices
reached record highs on strong demand from China and inadequate
inventories. Additionally, prices moved higher on news of a labor
strike at a Canadian nickel mine.

The Partnership recorded total trading results including interest
income totaling $50,536,443 and expenses totaling $36,574,632,
resulting in net income of $13,961,811 for the nine months ended
September 30, 2006. The Partnership's net asset value per Unit
increased from $27.45 at December 31, 2005, to $28.15 at September
30, 2006.

The most significant trading gains of approximately 6.5% were
recorded in the metals markets primarily during the first six
months of the year from long futures positions in copper, nickel,
zinc, and aluminum as base metals prices rallied 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 in May, benefiting from strong demand and lagging supply.
Demand for precious metals increased on continued geopolitical
concerns and inflation fears due to high energy prices.
Additional gains of approximately 4.8% were experienced within
the global interest rates sector, during March and April, from
short positions in U.S., European, and Australian interest rate
<page> 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 Australia would rise. U.S.
fixed-income futures continued to move lower into the second
quarter following the release of consistently strong 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. Smaller gains of approximately 1.0% were
recorded within the global stock index markets from long
positions in European and Australian stock index futures as
global equity prices trended higher throughout 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 amid speculation that the U.S. Federal
Reserve could be near the end of its interest rate tightening
campaign. During July, long positions in Hong Kong stock index
futures experienced gains as prices moved higher on news that
Gross Domestic Product in China surged to 10.9% in the first six
months of this year. Gains were also experienced during
September from long positions in European equity index futures as
prices were supported higher on merger and acquisition activity
and solid corporate earnings. A portion of the Partnership's
overall gains for the first nine months of the year was offset by
losses of approximately 2.7% in the currency markets primarily
during the first six months of the year from short positions in
<page> the Swiss franc and Japanese yen versus the U.S. dollar.
Throughout a majority of the first half of the year, the U.S.
dollar moved lower on news that foreign central banks were
beginning to diversify their currency reserves away from U.S.
dollar-denominated assets, as well as uncertainty regarding the
future of the U.S. Federal Reserve's interest rate tightening
campaign. The Swiss franc and Japanese yen moved higher against
the U.S. dollar during January and February as strong economic
data out of Switzerland and Japan increased speculation that the
Swiss National Bank and Bank of Japan might raise interest rates.
During April, the Swiss franc moved higher on the political
tensions in the Middle East, which increased the demand for the
1120: "safe haven" currency, while the Japanese yen strengthened on
speculation of a possible Bank of Japan interest rate hike in the
near-future. Short positions in the Australian dollar relative
to the U.S. dollar also incurred losses as the value of the
Australian dollar moved higher from May to July on an unexpected
interest rate hike by the Reserve Bank of Australia. Additional
losses of approximately 1.8% were incurred within the energy
markets throughout the first nine months of the year from futures
positions in crude oil and its related products, as well as in
natural gas. 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
<page> during March from short positions as prices reversed
higher early in the month on supply fears. During 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. Losses
were also incurred from short positions in natural gas as prices
moved higher on fears of a possible supply shortage. During
June, newly established long positions in natural gas futures
recorded losses as prices reversed lower on reports of a supply
surplus and fears of a slowing global economy. During July and
August, losses were experienced from long futures positions in
crude oil and its related products as prices moved lower after
weaker than expected U.S. economic data led investors to believe
that energy demand would be negatively affected and the U.S.
Department of Labor reported an unexpected climb in domestic
gasoline supplies. Prices were pressured further lower after
news of an official cease-fire between Israel and Hezbollah
militants in Lebanon and news that the Organization of Petroleum
Exporting Countries reduced its 2006 oil demand growth forecast.
Finally, the agricultural complex experienced losses of
approximately 1.5% from positions in wheat, soybeans, and cocoa
futures. Losses were incurred 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, while short
futures positions in soybeans recorded losses as prices moved
higher in March on speculative buying and increased demand.
During the third quarter, losses were incurred primarily during
July from long futures positions in wheat and soybean oil as
<page> prices decreased on forecasts of improved weather
conditions across the growing regions of the U.S.

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
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, exchange-traded forward, and exchange-traded
futures-styled options contracts 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 forward
<page> currency contracts in the Partnership accounts with the
counterparty, which is accomplished by daily maintenance of the
cash balance in a custody account held at 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 typically to be many times the total
capitalization of the Partnership.

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 experiences to date
under the "Partnership's Value at Risk in Different Market
Sectors" section and significantly exceed the Value at Risk
("VaR") tables disclosed.

<page> 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.

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
<page> 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 this time period. This generates a probability
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.
<page> 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 September 30, 2007, and 2006.
At September 30, 2007, and 2006, the Partnership's total
capitalization was approximately $514 million and $535 million,
respectively.

Primary Market September 30, 2007 September 30, 2006
Risk Category Value at Risk Value at Risk

Currency (1.37)% (0.99)%

Interest Rate (0.44) (1.46)

Equity (0.35) (1.46)

Commodity (2.21) (0.75)

Aggregate Value at Risk (2.96)% (1.86)%

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
<page> trading portfolio can change significantly over any given
time period, or even within a single trading day. Such changes
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
percentage of total Net Assets for the four quarter-end reporting
periods from October 1, 2006, through September 30, 2007.

Primary Market Risk Category High Low Average
Currency (1.53)% (1.11)% (1.32)%

Interest Rate (1.33) (0.44) (0.80)

Equity (1.95) (0.35) (1.12)

Commodity (2.21) (0.47) (0.96)

Aggregate Value at Risk (2.96)% (1.93)% (2.51)%

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:

<page>
* 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;
* 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 September 30, 2006, and for the four quarter-
end reporting periods from October 1, 2006, through September 30,
2007. 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
<page> 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.

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 MS&Co.; as of September 30, 2007, such
amount is equal to approximately 91% 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
<page> 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 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 September 30, 2007, by market sector. It may be
anticipated, however, that these market exposures will vary
materially over time.

Currency. The second largest market exposure of the Partnership
at September 30, 2007, was to the currency sector. The
Partnership's currency market exposure was to exchange rate
fluctuations, primarily fluctuations which disrupt the historical
<page> pricing relationships between different currencies and
currency pairs. Interest rate changes, as well as political and
general economic conditions influence these fluctuations. The
Partner-ship trades a large number of currencies, including
cross-rates - i.e., positions between two currencies other than
the U.S. dollar. At September 30, 2007, the Partnership's major
exposures were to the euro, Norwegian krone, and Canadian dollar
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.

Interest Rate. At September 30, 2007, the Partnership had market
exposure to the global interest rate sector. Exposure was
primarily spread across the U.S., Japanese, European, Australian,
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
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
<page> 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.

Equity. At September 30, 2007, 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.), DAX (Germany), NIKKEI 225 (Japan), TOPIX
(Japan), Hang Seng (China), Canadian S&P 60 (Canada), Dow Jones
(U.S.), S&P 500 (U.S.), FTSE 100 (United Kingdom), SPI 200
(Australia), Euro Stoxx 50 (Europe), and S&P/MIB Index (Italy)
stock indices. The Partnership is typically exposed to the risk
of adverse price trends or static markets in the European, U.S.,
Chinese, Japanese, and Australian 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.
Energy. The largest market exposure of the Partnership at
September 30, 2007, was to the energy sector. The
Partnership's energy exposure was shared primarily by
futures contracts in crude oil and its related products, and
natural gas. 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. Natural gas has exhibited volatility in prices
resulting from weather patterns and supply and demand
factors and will likely continue in this choppy pattern.

Metals. The third largest market exposure of the
Partnership at September 30, 2007, was to the metals sector.
The Partnership's metals exposure was to fluctuations in the
price of precious metals, such as gold, platinum, and silver
and base metals, such as copper, aluminum, nickel, zinc,
lead, and tin. Economic forces, supply and 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.

<page>
Soft Commodities and Agriculturals. At September 30, 2007,
the Partnership had market exposure to the markets that
comprise these sectors. Most of the exposure was to the
soybeans, soybean oil, soybean meal, wheat, coffee, live
cattle, cotton, corn, feeder cattle, cocoa, rubber, and lean
hogs markets. Supply and demand inequalities, severe
weather disruptions, and market expectations affect price
movements in these markets.

Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following was the only non-trading risk exposure of the
Partnership at September 30, 2007:

Foreign Currency Balances. The Partnership's primary foreign
currency balances at September 30, 2007, were in euros, Hong
Kong dollars, Australian dollars, British pounds, Norwegian
krone, Swiss francs, Canadian dollars, Japanese yen, and
Swedish krona. 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
<page> 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 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
<page> other factors that could significantly affect these
controls subsequent to the date of their evaluation.

Item 4T. CONTROLS AND PROCEDURES
Not applicable.

<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, 2006, and the Partnership's
Report on Form 10Q for the quarters ended March 31, 2007, and June
30, 2007.
<table>
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
SEC
Registration Statement on Form S-1 Units Registered Effective Date File Number

<s> <c> <c> <c>
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).
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 28,496,204.066
Units unsold through 9/30/07 13,503,795.934

Total Units sold
through 9/30/07 43,110,171.166
(pre and post conversion)
</table>

<page>
The managing underwriter for the Partnership is MS&Co.

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 September 30, 2007,
was $969,168,140.

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.

Item 5. OTHER INFORMATION

Effective December 1, 2007, Altis Partners (Jerey) Limited will be
added as a trading advisor to the Partnership.

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.

<page>
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)

November 13, 2007 By:/s/ Lee Horwitz
Lee Horwitz
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
Directors.