Schedule 13G

Capstead Mortgage Corporation

(Name of Issuer)

Common Stock ($0.01 par value)

(Title of Class of Securities)

14067E506

(CUSIP Number)

July  28,  2008

(Date of Event which Requires Filing of this Statement)

Check the appropriate box to designate the rule pursuant to which this Schedule is filed:

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page.

The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 14067E506

1. Names of Reporting Persons.
   I.R.S. Identification Nos. of above persons (entities only).

   Highland Capital Management, L.P.

2. Check the Appropriate Box if a Member of a Group (See Instructions)
   1.  
   2.  
3. SEC Use Only
4. Citizenship or Place of Organization

   Delaware

9. Aggregate Amount Beneficially Owned by Each Reporting Person

   2,828,409

10. Check if the Aggregate Amount in Row 9 Excludes Certain Shares (See Instructions)    
11. Percent of Class Represented by Amount in Row 9

    5.3%

12. Type of Reporting Person (See Instructions)

    IA

CUSIP No. 14067E506

1. Names of Reporting Persons.
   I.R.S. Identification Nos. of above persons (entities only).

   Strand Advisors, Inc.

2. Check the Appropriate Box if a Member of a Group (See Instructions)
   1.  
   2.  
3. SEC Use Only
4. Citizenship or Place of Organization

   Delaware

9. Aggregate Amount Beneficially Owned by Each Reporting Person

   2,828,409

10. Check if the Aggregate Amount in Row 9 Excludes Certain Shares (See Instructions)    
11. Percent of Class Represented by Amount in Row 9

    5.3%

12. Type of Reporting Person (See Instructions)

    CO

CUSIP No. 14067E506

1. Names of Reporting Persons.
   I.R.S. Identification Nos. of above persons (entities only).

   James D. Dondero

2. Check the Appropriate Box if a Member of a Group (See Instructions)
   1.  
   2.  
3. SEC Use Only
4. Citizenship or Place of Organization

   United States

9. Aggregate Amount Beneficially Owned by Each Reporting Person

   2,828,409

10. Check if the Aggregate Amount in Row 9 Excludes Certain Shares (See Instructions)    
11. Percent of Class Represented by Amount in Row 9

    5.3%

12. Type of Reporting Person (See Instructions)

    IN

Item 1.

1. Name of Issuer

   Capstead Mortgage Corporation (the "Issuer")

2. Address of Issuer's Principal Executive Offices

   8401 North Central Expressway, Suite 800
   Dallas, TX 75255

Item 2.

1. Name of Person Filing

   This statement is filed by and on behalf of: (i) Highland Capital Management, L.P. (“Highland Capital”); (ii) Strand Advisors, Inc.
   (“Strand”); and (iii) James D. Dondero (“Dondero”).
   
   Highland Capital principally serves as an investments adviser/ and or manager to other persons to other persons, including
   Highland Credit Strategies Master Fund, L.P., Highland Credit Opportunities CDO, L.P., and Highland Crusader Offshore Partners,
   L.P. Highland Capital may be deemed to beneficially own shares owned and/or held by and/or for the account and
   benefit of persons, including Highland Credit Strategies Master Fund, L.P., Highland Credit Opportunities CDO, L.P., and Highland
   Crusader Offshore Partners, L.P. Strand serves as the general partner of Highland Capital; Strand may be deemed to
   beneficially own shares owned and/or held by and/or for the account of and/or benefit of Highland Capital. Dondero is the
   President and a director of Strand; Dondero may be deemed to beneficially own shares owned and/or held by and/or for the
   account of and/or benefit of Strand.
   
   Each of the reporting persons may be deemed to be a member of a group with respect to the Issuer or securities of the Issuer for the
   purposes of Section 13(d) or 13(g) of the Act. Each of the reporting persons declares that neither the filing of this statement nor
   anything herein shall be construed as an admission that such person is, for the purposes of Section 13(d) or 13(g) of the Act or any
   other purpose, (i) acting (or has agreed or is agreeing to act together with any other person) as a partnership, limited partnership,
   syndicate, or other group for the purpose of acquiring, holding, or disposing of securities of the issuer or otherwise with respect to
   the Issuer or any securities of the Issuer or (ii) a member of any group with respect to the Issuer or any securities of the Issuer.

2. Address of Principal Business Office or, if None, Residence

   Two Galleria Tower
   13455 Noel Road, Suite 800
   Dallas, TX 75240

3. Citizenship

   See Item 4 of each cover page for the respective reporting persons.

4. Title of Class of Securities

   Common Stock ($0.01 par value)

5. CUSIP Number

   14067E506

Item 3. If this statement is filed pursuant to §§240.13d-1(b) or 240.13d-2(b) or (c), check whether the person filing is a:

1.    Broker or dealer registered under section 15 of the Act (15 U.S.C. 78o).
2.    Bank as defined in section 3(a)(6) of the Act (15 U.S.C. 78c).
3.    Insurance company as defined in section 3(a)(19) of the Act (15 U.S.C. 78c).
4.    Investment company registered under section 8 of the Investment Company Act of 1940 (15 U.S.C 80a-8).
5.    An investment adviser in accordance with §240.13d-1(b)(1)(ii)(E);
6.    An employee benefit plan or endowment fund in accordance with §240.13d-1(b)(1)(ii)(F);
7.    A parent holding company or control person in accordance with §240.13d-1(b)(1)(ii)(G);
8.    A savings associations as defined in Section 3(b) of the Federal Deposit Insurance Act (12 U.S.C. 1813);
9.    A church plan that is excluded from the definition of an investment company under section 3(c)(14) of the Investment Company Act of 1940 (15 U.S.C. 80a-3);
10.    Group, in accordance with §240.13d-1(b)(1)(ii)(J).

Item 4. Ownership

Provide the following information regarding the aggregate number and percentage of the class of securities of the issuer identified in Item 1.

1. Amount beneficially owned:

   2,828,409

2. Percent of class:

   5.3%

3. Number of shares as to which the person has:
   1. Sole power to vote or to direct the vote:

      2,828,409

   2. Shared power to vote or to direct the vote:

      0

   3. Sole power to dispose or to direct the disposition of:

      2,828,409

   4. Shared power to dispose or to direct the disposition of:

      0

Instruction. For computations regarding securities which represent a right to acquire an underlying security see §240.13d-3(d)(1).

Item 5. Ownership of Five Percent or Less of a Class

If this statement is being filed to report the fact that as of the date hereof the reporting person has ceased to be the beneficial owner of more than five percent of the class of securities, check the following    .

Instruction: Dissolution of a group requires a response to this item.

Not applicable.

Item 6. Ownership of More than Five Percent on Behalf of Another Person.

The following shall be filed as exhibits: copies of written agreements relating to the filing of joint acquisition statements as required by §240.13d-1(k) and copies of all written agreements, contracts, arrangements, understandings, plans or proposals relating to: (1) the borrowing of funds to finance the acquisition as disclosed in Item 3; (2) the acquisition of issuer control, liquidation, sale of assets, merger, or change in business or corporate structure or any other matter as disclosed in Item 4; and (3) the transfer or voting of the securities, finder's fees, joint ventures, options, puts, calls, guarantees of loans, guarantees against loss or of profit, or the giving or withholding of any proxy as disclosed in Item 6.

Not applicable.

Item 7. Identification and Classification of the Subsidiary Which Acquired the Security Being Reported on By the Parent Holding Company

If a parent holding company has filed this schedule, pursuant to Rule 13d-1(b)(ii)(G), so indicate under Item 3(g) and attach an exhibit stating the identity and the Item 3 classification of the relevant subsidiary. If a parent holding company has filed this schedule pursuant to Rule 13d-1(c) or Rule 13d-1(d), attach an exhibit stating the identification of the relevant subsidiary.

Not applicable.

Item 8. Identification and Classification of Members of the Group

If a group has filed this schedule pursuant to §240.13d-1(b)(1)(ii)(J), so indicate under Item 3(j) and attach an exhibit stating the identity and Item 3 classification of each member of the group. If a group has filed this schedule pursuant to §240.13d-1(c) or §240.13d-1(d), attach an exhibit stating the identity of each member of the group.

Not applicable.

Item 9. Notice of Dissolution of Group

Notice of dissolution of a group may be furnished as an exhibit stating the date of the dissolution and that all further filings with respect to transactions in the security reported on will be filed, if required, by members of the group, in their individual capacity. See Item 5.

Not applicable.

Item 10. Certification

By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect.

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

August  06,  2008

Date

Highland Capital Management, L.P. By: Strand Advisors, Inc., its general partner
/s/ James D. Dondero

Signature

James D. Dondero
President

Name / Title

Strand Advisors, Inc.
/s/ James D. Dondero

Signature

James D. Dondero
President

Name / Title

/s/ James D. Dondero

Signature

James D. Dondero

Name / Title

The original statement shall be signed by each person on whose behalf the statement is filed or his authorized representative. If the statement is signed on behalf of a person by his authorized representative other than an executive officer or general partner of the filing person, evidence of the representative's authority to sign on behalf of such person shall be filed with the statement, provided, however, that a power of attorney for this purpose which is already on file with the Commission may be incorporated by reference. The name and any title of each person who signs the statement shall be typed or printed beneath his signature.

NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties for whom copies are to be sent.

Attention: Intentional misstatements or omissions of fact constitute Federal criminal violations (See 18 U.S.C. 1001)