The cover appears to have been addressed originally to Mazatlan. Apparently upon arrival, it was redirected to Mexico (City) DF. Hence Mazatlan was crossed out. I see no arrival marking for Matazlan, but as this was ordinary First Class Mail, I don't think it would have been required.
I started with an assumption that this was a business letter and that Senor Preston was an agent or representative for the company. A. Shilling & Company was a producer of coffee and spices for cooking. Perhaps he was a buyer of raw spices, or a local distributor of the end product.
Looking at the markings chronologically, I believe that the octagonal mark with date May 29 1884 is some form of arrival marking, but I did not find it in Taylor' catalog of Mexico postmarks.
The next mark by date is the red oval with Ma(y) 9, 1885 and again I cannot find a similar marking in Taylor.
Where this cover has been for 12 months is not obvious. It has no Dead Letter Office (Rezagos) markings, nor any type of "Return to Sender" markings. One possibility (speculation) is that it was delivered to business office of Senor A. Preston, which perhaps was a branch office of A. Schilling & Co. This office then held the letter in expectation that Preston would return.
After a year, they decided to forward the letter back to San Francisco. Note it was forwarded and not "returned" by the post office.
The red oval was probably applied when returned to the local post office on May 9, 1885.
The circular marking over the octagon boxed marking it does not have a legible year date, but appears to be May 11, so it would be from the return of the letter. I believe that the "A" at the bottom might indicate that the office handling the letter this date was Sucursal A, or what we could call Branch/Station A.
The May 14, 1885 CDS "RECIBIDO" on the reverse is from the Main post office in Mexico City.
The cover was received back at San Francisco CA on May 21, 1885 and given the "REC'D" CDS on reverse, and presumably delivered to the Merchant Exchange address.
From Wikipedia, regarding the "Merchants Exchange" building:
"The original Battery Street building, two blocks from the current site, was a three-story brick structure built in 1851 to house the Merchants Exchange, an association of city traders and businessmen. It had a library and a meeting room with bulletins on arriving ships and cargoes. Watchmen on the roof would relay messages of arriving ships to the merchants in the meeting room below, so they could then rush to the docks to meet them."
I've passed this along to someone smarter than me
, and if I learn more I'll add it.