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

                                  SCHEDULE 13G

                    Under the Securities Exchange Act of 1934
                               (Amendment No. 3)*

                               DURECT CORPORATION
                               ------------------
                                (Name of Issuer)

                    Common Stock, $.0001 par value per share
                    ----------------------------------------
                         (Title of Class of Securities)

                                    266605104
                                    ---------
                                 (CUSIP Number)

                                February 14, 2005
                                -----------------
                      (Date of Event which Requires Filing
                               of this Statement)

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

             [ ] Rule 13d-1(b)
             [X] Rule 13d-1(c)
             [ ] Rule 13d-1(d)

*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 on 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).

                          Continued on following pages
                                Page 1 of 8 Pages




                                  SCHEDULE 13G

CUSIP No. 266605104                                            Page 2 of 8 Pages


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

                  SAGAMORE HILL CAPITAL MANAGEMENT L.P.

2        Check the Appropriate Box If a Member of a Group (See Instructions)

                                              a. [ ]
                                              b. [X]

3        SEC Use Only

4        Citizenship or Place of Organization

                  DELAWARE

                            5             Sole Voting Power
  Number of                                        125,397
   Shares
Beneficially                6             Shared Voting Power
  Owned By                                         0
   Each
 Reporting                  7             Sole Dispositive Power
  Person                                           125,397
  With
                            8             Shared Dispositive Power
                                                   0

9        Aggregate Amount Beneficially Owned by Each Reporting Person

                                    125,397

10       Check Box If the Aggregate Amount in Row (9) Excludes Certain
         Shares (See Instructions)

                                    [   ]

11       Percent of Class Represented By Amount in Row (9)

                                    .24%

12       Type of Reporting Person (See Instructions)

                                    PN





                                  SCHEDULE 13G

CUSIP No. 266605104                                            Page 3 of 8 Pages


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

                  SAGAMORE HILL MANAGERS LLC

2        Check the Appropriate Box If a Member of a Group (See Instructions)

                                              a. [ ]
                                              b. [X]

3        SEC Use Only

4        Citizenship or Place of Organization

                  DELAWARE

                            5             Sole Voting Power
  Number of                                        125,397
   Shares
Beneficially                6             Shared Voting Power
  Owned By                                         0
   Each
 Reporting                  7             Sole Dispositive Power
  Person                                           125,397
  With
                            8             Shared Dispositive Power
                                                   0

9        Aggregate Amount Beneficially Owned by Each Reporting Person

                                    125,397

10       Check Box If the Aggregate Amount in Row (9) Excludes Certain
         Shares (See Instructions)

                                    [   ]

11       Percent of Class Represented By Amount in Row (9)

                                    .24%

12       Type of Reporting Person (See Instructions)

                                    OO





                                  SCHEDULE 13G

CUSIP No. 266605104                                            Page 4 of 8 Pages


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

                  STEVEN H. BLOOM

2        Check the Appropriate Box If a Member of a Group (See Instructions)

                                              a. [ ]
                                              b. [X]

3        SEC Use Only

4        Citizenship or Place of Organization

                  UNITED STATES

                            5             Sole Voting Power
  Number of                                        125,397
   Shares
Beneficially                6             Shared Voting Power
  Owned By                                         0
   Each
 Reporting                  7             Sole Dispositive Power
  Person                                           125,397
  With
                            8             Shared Dispositive Power
                                                   0

9        Aggregate Amount Beneficially Owned by Each Reporting Person

                                    125,397

10       Check Box If the Aggregate Amount in Row (9) Excludes Certain
         Shares (See Instructions)

                                    [   ]

11       Percent of Class Represented By Amount in Row (9)

                                    .24%

12       Type of Reporting Person (See Instructions)

                                    IN; HC





                                                               Page 5 of 8 Pages

Item 1(a)         Name of Issuer:

                  Durect Corporation (the "Issuer")

Item 1(b)         Address of the Issuer's Principal Executive Offices:

                  10240 Bubb Road, Cupertino, California  95014

Item 2(a)         Name of Person Filing:

                  The  Statement  is filed on  behalf  of each of the  following
persons (collectively, the "Reporting Persons"):

                  i)    Sagamore  Hill  Capital  Management  L.P.  ("Sagamore
                        Hill Capital Management");

                  ii)   Sagamore Hill Managers LLC ("Sagamore Hill Managers");
                        and

                  iii)  Steven H. Bloom ("Mr. Steven Bloom").


                  This statement  relates to securities  held for the account of
the Sagamore Hill Hub Fund Ltd, a Cayman Islands  corporation  (the "Hub Fund").
Pursuant to a portfolio management  agreement,  Sagamore Hill Capital Management
serves as investment  manager of the Hub Fund. In such  capacity,  Sagamore Hill
Capital  Management may be deemed to be the beneficial  owner of securities held
for the account of the Hub Fund.  The general  partner of Sagamore  Hill Capital
Management is Sagamore Hill Managers.  In such capacity,  Sagamore Hill Managers
may be deemed to be the beneficial  owner of securities  held for the account of
the Hub Fund. Mr. Steven Bloom is the sole member of Sagamore Hill Managers.  In
such  capacity,  Mr.  Steven Bloom may be deemed to be the  beneficial  owner of
securities held for the account of the Hub Fund.

Item 2(b)         Address of Principal Business Office or, if None, Residence:

                  The address of the  principal  business  office of each of the
Reporting Persons is 10 Glenville Street, 3rd Floor, Greenwich, CT 06831.

Item 2(c)         Citizenship:

                  1)    Sagamore  Hill  Capital  Management  is a Delaware
                        limited partnership;

                  2)    Sagamore  Hill  Managers is a Delaware  limited
                        liability company; and

                  3)    Mr. Steven Bloom is a citizen of the United States.

Item 2(d)         Title of Class of Securities:

                  Common stock, $0.0001 par value per share (the "Shares").

Item 2(e)         CUSIP Number:

                  266605104




                                                               Page 6 of 8 Pages

Item 3.           If this statement is filed pursuant to Rule 13d-1(b), or
                  13d-2(b) or (c), check whether the person filing is a:

                  This Item 3 is not applicable.

Item 4.           Ownership:

Item 4(a)         Amount Beneficially Owned:

                  Each of the Sagamore  Hill Capital  Management,  Sagamore Hill
Managers  and  Mr.  Steven  Bloom  may  be  deemed  the   beneficial   owner  of
approximately  125,397 Shares  (assuming the  conversion of certain  convertible
bonds held for the account of the Hub Fund).

Item 4(b)         Percent of Class:

                  The number of Shares of which each of  Sagamore  Hill  Capital
Management,  Sagamore  Hill  Managers  and Mr.  Steven  Bloom  may be  deemed to
beneficially  own constitutes  approximately  .24% of the total number of Shares
outstanding  (assuming the conversion of certain  convertible bonds held for the
account of the Hub Fund) (based upon  information  provided by the Issuer in its
most recent  prospectus,  the number of Shares  outstanding was 51,802,765 as of
October 29, 2004).

Item 4(c)         Number of shares as to which such person has:

         Sagamore Hill Capital Management
         --------------------------------
         (i)       Sole power to vote or direct the vote                 125,397

         (ii)      Shared power to vote or to direct the vote                  0

         (iii)     Sole power to dispose or to direct the
                   disposition of                                        125,397

         (iv)      Shared power to dispose or to direct the
                   disposition of                                              0

         Sagamore Hill Managers
         ----------------------
         (i)       Sole power to vote or direct the vote                 125,397

         (ii)      Shared power to vote or to direct the vote                  0

         (iii)     Sole power to dispose or to direct the
                   disposition of                                        125,397

         (iv)      Shared power to dispose or to direct the
                   disposition of                                              0

         Mr. Steven Bloom
         ----------------
         (i)       Sole power to vote or direct the vote                 125,397

         (ii)      Shared power to vote or to direct the vote                  0

         (iii)     Sole power to dispose or to direct the
                   disposition of                                        125,397

         (iv)      Shared power to dispose or to direct the
                   disposition of                                              0





                                                               Page 7 of 8 Pages

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 Persons have ceased to be the beneficial owners of
more than five percent of the class of securities, check the following [X].

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

                  The shareholders of the Hub Fund have the right to participate
in the receipt of dividends  from, or proceeds from the sale of, the Shares held
by the Hub Fund in accordance with their ownership interests in the Hub Fund.

Item 7.           Identification and Classification of the Subsidiary Which
                  Acquired the Security Being Reported on by the Parent
                  Holding Company or Control Person:

                  This Item 7 is not applicable.

Item 8.           Identification and Classification of Members of the Group:

                  This Item 8 is not applicable.

Item 9.           Notice of Dissolution of Group:

                  This Item 9 is not applicable.

Item 10.          Certification:

                  By signing below each of the Reporting Persons certifies that,
to the best of such person's  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 such securities and were
not  acquired and are not held in  connection  with or as a  participant  in any
transaction having such purpose or effect.





                                                               Page 8 of 8 Pages

                                   SIGNATURES


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


Date:    February 18, 2005            SAGAMORE HILL CAPITAL MANAGEMENT L.P.


                                      By: /s/Steven H. Bloom
                                      ------------------------------------------
                                          Steven H. Bloom
                                          President

Date:    February 18, 2005            SAGAMORE HILL MANAGERS LLC


                                      By: /s/Steven H. Bloom
                                      ------------------------------------------
                                          Steven H. Bloom
                                          Sole Member


Date:    February 18, 2005            STEVEN H. BLOOM


                                      /s/Steven H. Bloom
                                      ------------------------------------------