Edgar Filing: BLACKROCK SENIOR HIGH INCOME FUND, INC.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-07456

Name of Fund: BlackRock Senior High Income Fund, Inc. (ARK)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: Anne F. Ackerley, Chief Executive Officer, BlackRock Senior High Income Fund, Inc., 55 East 52^nd Street, New York, NY 10055

Registrant’s telephone number, including area code: (800) 882-0052, Option 4

Date of fiscal year end: 02/28/2011

Date of reporting period: 08/31/2010

Item 1 – Report to Stockholders


	August 31, 2010

Semi-Annual Report (Unaudited)

BlackRock Corporate High Yield Fund, Inc. (COY)

BlackRock Corporate High Yield Fund III, Inc. (CYE)

BlackRock Debt Strategies Fund, Inc. (DSU)

BlackRock Floating Rate Income Strategies Fund II, Inc. (FRB)

BlackRock Senior High Income Fund, Inc. (ARK)

Not FDIC Insured § No Bank Guarantee § May Lose Value

Table of Contents



		Page


Dear Shareholder		3
Semi-Annual Report:
Fund Summaries		4
The Benefits and Risks of Leveraging		9
Derivative Financial Instruments		9
Financial Statements:
Schedules of Investments		10
Statements of Assets and Liabilities		48
Statements of Operations		49
Statements of Changes in Net Assets		50
Statements of Cash Flows		53
Financial Highlights		54
Notes to Financial Statements		59
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements		67
Officers and Directors		71
Additional Information		72



2	SEMI-ANNUAL REPORT	AUGUST 31, 2010

Dear Shareholder

The global economic recovery continues, although global and US economic statistics show that the pace of economic growth has slowed. The sovereign debt crisis in Europe, slowing growth in China and concerns over the possibility that the United States and other developed markets are heading for a double-dip recession have all acted to depress investor sentiment. Despite broadening evidence of a slowdown in global economic activity, market volatility has normalized from the extreme levels seen in recent months. In the United States, economic data continues to be mixed, but it is our view that the preponderance of data suggests that the recovery is continuing. The critical issue for investors remains the question of whether the economy will experience a double-dip recession. We are on the optimistic side of this debate and would point out that while the recovery has been slow, we have made significant progress.

Global equity markets have moved unevenly higher since bottoming out in early 2009 as investors were enticed by depressed valuations, improved corporate earnings, and their desire for higher yields. Several significant downturns, however, have occurred — primarily as a result of mixed economic data and concerns about the possibility of prolonged deflation (especially in Europe). As the period drew to a close, equity markets lost ground on weaker-than-expected economic data, most notably from the United States. International equities posted negative returns on both a six- and 12-month basis while US equities posted negative returns over the six months, but were still showing positive returns on a 12-month basis as the domestic economic recovery had been more pronounced and credit-related issues held European markets down. Within the United States, smaller cap stocks continue to outperform large caps year-to-date.

In fixed income markets, yields have fluctuated significantly over the past year as economic data has been mixed. Risk aversion and credit issues have kept interest rates low and US Treasury yields have fallen significantly as investors favored “safe haven” assets. As the period drew to a close, Treasuries modestly outperformed the spread sectors of the market (those driven by changes in credit risk). Corporate credit spreads benefited from the low rate environment and high yield fixed income remains attractive due to low default rates and better-than-expected results on European bank stress tests. Meanwhile, tax-exempt municipal bonds slightly outperformed US investment grade bonds on a 12-month basis, but underperformed year-to-date as investors rotated to the relative safety of Treasuries.

Regarding cash investments, yields on money market securities remain near all-time lows (producing returns only marginally above zero percent), with the Federal Open Market Committee reiterating that economic circumstances are likely to necessitate an accommodative interest rate stance for an “extended period.”

Against this backdrop, the major market averages posted the following returns:


Total Returns as of August 31, 2010	6-month		12-month

US large cap equities (S&P 500 Index)	(4.04	)%	4.91	%

US small cap equities (Russell 2000 Index)	(3.60	)	6.60

International equities (MSCI Europe, Australasia, Far East Index)	(3.04	)	(2.34	)

3-month Treasury bill (BofA Merrill Lynch 3-Month Treasury Bill Index)	0.07		0.14

US Treasury securities (BofA Merrill Lynch 10-Year US Treasury Index)	11.49		11.58

US investment grade bonds (Barclays Capital US Aggregate Bond Index)	5.81		9.18

Tax-exempt municipal bonds (Barclays Capital Municipal Bond Index)	5.42		9.78

US high yield bonds (Barclays Capital US Corporate High Yield 2% Issuer Capped Index)	6.62		21.40


	Past performance is no guarantee of future results. Index performance shown for illustrative purposes only. You cannot invest directly in an index.

Although conditions have improved over the past couple of years, investors across the globe continue to face uncertainty about the future direction of economic growth. Through periods of uncertainty, as ever, BlackRock’s full resources are dedicated to the management of our clients’ assets. For additional market perspective and investment insight, visit www.blackrock.com/shareholdermagazine, where you’ll find the most recent issue of our award-winning Shareholder^® magazine, as well as its quarterly companion newsletter, Shareholder Perspectives. We thank you for entrusting BlackRock with your investments, and we look forward to your continued partnership in the months and years ahead.

Sincerely,

-s- Rob Kapito

Rob Kapito

President, BlackRock Advisors, LLC



	THIS PAGE NOT PART OF YOUR FUND REPORT		3




Fund Summary as of August 31, 2010	BlackRock Corporate High Yield Fund, Inc.

Fund Overview

BlackRock Corporate High Yield Fund, Inc.’s (COY) (the “Fund”) investment objective is to provide shareholders with current income by investing primarily in a diversified portfolio of fixed income securities, which are rated in the lower rating categories of the established rating services (BB or lower by Standard & Poor’s Corporation (“S&P”) or Ba or lower by Moody’s Investors Service, Inc. (“Moody’s”)) or are unrated securities considered by BlackRock to be of comparable quality. The Fund’s secondary objective is to provide stockholders with capital appreciation. The Fund invests, under normal market conditions, at least 80% of its assets in high yield debt instruments, including high yield bonds (commonly referred to as “junk” bonds) and corporate loans which are below investment grade quality. The Fund may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objectives will be achieved.

Performance

For the six months ended August 31, 2010, the Fund returned 6.15% based on market price and 7.94% based on net asset value (“NAV”). For the same period, the closed-end Lipper High Current Yield Funds (Leveraged) category posted an average return of 10.10% based on market price and 7.66% based on NAV. All returns reflect reinvestment of dividends. The Fund’s premium to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. During the six-month period, high yield bonds lagged investment grade issues but outperformed the broad US equity market. Given our outlook for a continued slow economic environment, we focused more on sectors and companies with relatively stable cash flows and the ability to generate steady income, and less on companies which require growth to prosper and service their debt. Outside of this focus, the Fund’s investments in special situations and recovery stories, most notably in the automotive sector, contributed to the Fund’s outperformance versus its peer group. The Fund’s underweight in higher quality speculative grade names and overweight in lower quality credits benefited performance. Toward the end of the period, we moved to an underweight position in lower quality names as lower quality issues have recently become expensive relative to higher quality names. During the period, the Fund maintained leverage at an average of approximately 17% of its total managed assets, which detracted from relative performance versus competitors that maintained higher leverage, as would be expected when markets are advancing. The Fund’s exposure to Floating Rate Loans detracted from performance (despite favorable security selection within the sector) as the bank loan sector underperformed high yield during the period.


	The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

Fund Information


Symbol on NYSE	COY
Initial Offering Date	June 25, 1993
Yield on Closing Market Price as of August 31, 2010 ($6.98)¹	8.77%
Current Monthly Distribution per Share²	$0.051
Current Annualized Distribution per Share²	$0.612
Leverage as of August 31, 2010³	17%


	¹	Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

	²	The distribution rate is not constant and is subject to change.

	³	Represents loan outstanding as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributable to borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 9.

The table below summarizes the changes in the Fund’s market price and NAV per share:



	8/31/10		2/28/10		Change			High		Low

Market Price	$	6.98	$	6.88		1.45	%	$	7.08	$	5.50
Net Asset Value	$	6.85	$	6.64		3.16	%	$	7.02	$	6.60

The following charts show the portfolio composition of the Fund’s long-term investments and credit quality allocations of the Fund’s corporate bond investments:

Portfolio Composition


	8/31/10		2/28/10

Corporate Bonds	84	%	82	%
Floating Rate Loan Interests	12		13
Common Stocks	2		3
Other Interests	2		2

Credit Quality Allocations⁴


	8/31/10		2/28/10

BBB/Baa	3	%	3	%
BB/Ba	36		30
B	46		46
CCC/Caa	11		12
CC/Ca	—		1
D	—		1
Not Rated	4		7


	⁴	Using the higher of S&P’s or Moody’s ratings.



4	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Fund Summary as of August 31, 2010	BlackRock Corporate High Yield Fund III, Inc.

Fund Overview

BlackRock Corporate High Yield Fund III, Inc.’s (CYE) (the “Fund”) primary investment objective is to provide current income by investing primarily in fixed-income securities, which are rated in the lower rating categories of the established rating services (BBB or lower by S&P or Baa or lower by Moody’s) or are unrated securities of comparable quality. The Fund’s secondary investment objective is to provide capital appreciation. The Fund may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objectives will be achieved.

Performance

For the six months ended August 31, 2010, the Fund returned 8.45% based on market price and 7.81% based on NAV. For the same period, the closed-end Lipper High Current Yield Funds (Leveraged) category posted an average return of 10.10% based on market price and 7.66% based on NAV. All returns reflect reinvestment of dividends. The Fund moved from a discount to NAV to a premium by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. During the six-month period, high yield bonds lagged investment grade issues but outperformed the broad US equity market, as the slowing economy and concerns about Europe caused investors to sell riskier investments and falling interest rates pushed up the prices of higher quality bonds. Given our outlook for a continued slow economic environment, we began to focus more on sectors and companies with relatively stable cash flows and the ability to generate steady income, and less on companies with less stable cash flow and which require growth to be able to service their debt. Outside of this focus, we continued to invest in a few special situations and recovery stories, most notably in the automotive sector. These investments were key contributors to the Fund’s outperformance versus its peer group for the period. The Fund’s underweight position in higher quality speculative grade names and overweight in lower quality credits benefited performance during the period. Toward the end of the period, we moved to an underweight position in lower quality names, which we believe will benefit the Fund going forward as lower quality issues have recently become expensive relative to higher quality names. During the period, the Fund maintained leverage at an average amount between 18% to 20% of its total managed assets, which detracted from relative performance versus competitors that maintained higher leverage, as would be expected when markets are advancing. The Fund’s exposure to Floating Rate Loans detracted from performance (despite favorable security selection within the sector) as the bank loan sector underperformed high yield during the period.


	The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.

Fund Information


Symbol on NYSE	CYE
Initial Offering Date	January 30, 1998
Yield on Closing Market Price as of August 31, 2010 ($6.92)¹	8.67%
Current Monthly Distribution per Share²	$0.05
Current Annualized Distribution per Share²	$0.60
Leverage as of August 31, 2010³	20%


	¹	Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

	²	The distribution rate is not constant and is subject to change.

	³	Represents loan outstanding as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributable to borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 9.

The table below summarizes the changes in the Fund’s market price and NAV per share:



	8/31/10		2/28/10		Change			High		Low

Market Price	$	6.92	$	6.67		3.75	%	$	7.14	$	5.29
Net Asset Value	$	6.90	$	6.69		3.14	%	$	7.13	$	6.66

The following charts show the portfolio composition of the Fund’s long-term investments and credit quality allocations of the Fund’s corporate bond investments:

Portfolio Composition


	8/31/10		2/28/10

Corporate Bonds	80	%	81	%
Floating Rate Loan Interests	14		13
Common Stocks	2		4
Other Interests	2		2
Preferred Stocks	2		—

Credit Quality Allocations⁴


	8/31/10		2/28/10

BBB/Baa	3	%	3	%
BB/Ba	35		29
B	46		47
CCC/Caa	11		12
D	—		1
Not Rated	5		8


⁴Using the higher of S&P’s or Moody’s ratings.



SEMI-ANNUAL REPORT	AUGUST 31, 2010	5




Fund Summary as of August 31, 2010	BlackRock Debt Strategies Fund, Inc.


Fund Overview

BlackRock Debt Strategies Fund, Inc.’s (DSU) (the “Fund”) primary investment objective is to provide current income by investing primarily in a diversified portfolio of US companies’ debt instruments, including corporate loans, which are rated in the lower rating categories of the established rating services (BBB or lower by S&P or Baa or lower by Moody’s) or unrated debt instruments, which are in the judgment of the investment adviser of equivalent quality. The Fund’s secondary objective is to provide capital appreciation. Corporate loans include senior and subordinated corporate loans, both secured and unsecured. The Fund may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objectives will be achieved.



Performance

For the six months ended August 31, 2010, the Fund returned 4.91% based on market price and 7.61% based on NAV. For the same period, the closed-end Lipper High Current Yield Funds (Leveraged) category posted an average return of 10.10% based on market price and 7.66% based on NAV. All returns reflect reinvestment of dividends. The Fund moved from a premium to NAV to a discount by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. The Fund’s Lipper category competitors invest primarily in high yield bonds, whereas the Fund invests in both high yield bonds and bank loans. During the period, approximately 48% of the Fund was invested in bank loans, with 43% in high yield, and the remainder in common stock, convertibles and investment-grade bonds. The Fund performed in line with its Lipper category, even though bank loans underperformed high yield during the period. The Fund maintained relatively conservative positioning, with a focus on sectors that are less sensitive to the economy and the consumer. This positioning had a negative impact on performance in a generally improving market, although it proved beneficial during the market correction that occurred in the second quarter of 2010. The Fund continued to maintain relatively low levels of leverage, which detracted from performance versus competitors that maintained higher leverage, as would be expected in an advancing market. Contributing positively to performance were the Fund’s overweight position in the automobiles sector, investments in several distressed credits and special situations, and an underweight position in health care.


	The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.



Fund Information


Symbol on NYSE		DSU
Initial Offering Date		March 27, 1998
Yield on Closing Market Price as of August 31, 2010 ($3.92)¹		8.88%
Current Monthly Distribution per Share²		$0.029
Current Annualized Distribution per Share²		$0.348
Leverage as of August 31, 2010³		16%


¹	Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

²	A change in the distribution rate was declared on September 1, 2010. The Monthly Distribution per Share was decreased to $0.027. The Yield on Closing Market Price, Current Monthly Distribution per Share and Current Annualized Distribution per Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to change in the future.

³	Represents loan outstanding as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributable to borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 9.

The table below summarizes the changes in the Fund’s market price and NAV per share:



	8/31/10		2/28/10		Change			High		Low

Market Price	$	3.92	$	3.91		0.26	%	$	4.42	$	2.95
Net Asset Value	$	4.00	$	3.89		2.83	%	$	4.14	$	3.89

The following charts show the portfolio composition of the Fund’s long-term investments and credit quality allocations of the Fund’s corporate bond investments:



Portfolio Composition


	8/31/10		2/28/10

Floating Rate Loan Interests	50	%	47	%
Corporate Bonds	46		49
Common Stocks	3		4
Other Interests	1		—



Credit Quality Allocations⁴


	8/31/10		2/28/10

BBB/Baa	6	%	5	%
BB/Ba	30		27
B	48		44
CCC/Caa	9		11
D	—		1
Not Rated	7		12


⁴	Using the higher of S&P’s or Moody’s ratings.



6	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Fund Summary as of August 31, 2010	BlackRock Floating Rate Income Strategies Fund II, Inc.


Fund Overview

BlackRock Floating Rate Income Strategies Fund II, Inc.’s (FRB) (the “Fund”) investment objective is to provide shareholders with high current income and such preservation of capital as is consistent with investment in a diversified, leveraged portfolio consisting primarily of floating rate debt securities and instruments. The Fund seeks to achieve its investment objective by investing, under normal market conditions, at least 80% of its assets in floating rate debt securities, including floating or variable rate debt securities that pay interest at rates that adjust whenever a specified interest rate changes and/or which reset on predetermined dates (such as the last day of a month or calendar quarter). The Fund invests a substantial portion of its investments in floating rate debt securities consisting of secured or unsecured senior floating rate loans that are rated below investment grade. The Fund may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.



Performance

For the six months ended August 31, 2010, the Fund returned (7.02)% based on market price and 4.25% based on NAV. For the same period, the closed-end Lipper Loan Participation Funds category posted an average return of 2.23% based on market price and 2.82% based on NAV. The performance of the Lipper category does not necessarily correlate to that of the Fund, as the Lipper group comprises both closed-end funds and unleveraged continuously offered closed-end funds. All returns reflect reinvestment of dividends. The Fund’s premium to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. The Fund’s allocation to high yield bonds (approximately 20%) benefited performance as the sector performed well during the period. We focused on higher quality loan structures and borrowers with relatively stable cash flows and the ability to generate steady income. Outside of this focus, we invested in a few special situations and recovery stories, most notably in the automotive sector, which contributed positively to performance. The Fund’s overweight in higher quality speculative investments and underweight in lower quality credits modestly detracted from performance. The Fund maintained leverage at an average between 16% to 17% of its total managed assets, which detracted from relative performance versus competitors that maintained higher leverage, as would be expected when markets are advancing.


	The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.



Fund Information


Symbol on NYSE		FRB
Initial Offering Date		July 30, 2004
Yield on Closing Market Price as of August 31, 2010 ($13.50)¹		6.67%
Current Monthly Distribution per Share²		$0.075
Current Annualized Distribution per Share²		$0.900
Leverage as of August 31, 2010³		17%


¹	Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

²	The distribution rate is not constant and is subject to change.

³	Represents loan outstanding as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributable to borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 9.

The table below summarizes the changes in the Fund’s market price and NAV per share:



	8/31/10		2/28/10		Change			High		Low

Market Price	$	13.50	$	15.01		(10.06	)%	$	15.63	$	12.80
Net Asset Value	$	13.27	$	13.16		0.84	%	$	13.52	$	13.03

The following charts show the portfolio composition of the Fund’s long-term investments and credit quality allocations of the Fund’s corporate bond investments:



Portfolio Composition

	8/31/10		2/28/10

Floating Rate Loan Interests	76	%	73	%
Corporate Bonds	22		26
Other Interests	1		1
Common Stock	1		—



Credit Quality Allocations⁴


	8/31/10		2/28/10

BBB/Baa	6	%	6	%
BB/Ba	34		34
B	48		38
CCC/Caa	6		10
CC/Ca	1		1
D	—		2
Not Rated	5		9


⁴	Using the higher of S&P’s or Moody’s ratings.



SEMI-ANNUAL REPORT	AUGUST 31, 2010	7




Fund Summary as of August 31, 2010	BlackRock Senior High Income Fund, Inc.

Fund Overview

BlackRock Senior High Income Fund, Inc.’s (ARK) (the “Fund”) investment objective is to provide high current income by investing principally in senior debt obligations of companies, including corporate loans made by banks and other financial institutions and both privately placed and publicly offered corporate bonds and notes. The Fund may invest directly in such securities or synthetically through the use of derivatives.

No assurance can be given that the Fund’s investment objective will be achieved.

Performance

For the six months ended August 31, 2010, the Fund returned 3.86% based on market price and 5.98% based on NAV. For the same period, the closed-end Lipper High Current Yield Funds (Leveraged) category posted an average return of 10.10% based on market price and 7.66% based on NAV. All returns reflect reinvestment of dividends. The Fund moved from a premium to NAV to a discount by period end, which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. The Fund’s Lipper category competitors invest primarily in high yield bonds, whereas the Fund invests in both high yield bonds and bank loans. During the period, approximately 46% of the Fund was invested in bank loans, with 47% in high yield, and the remainder in common stock, convertibles and investment-grade bonds. The Fund’s allocation to bank loans detracted from relative performance during the period, as loans underperformed high yield. The Fund maintained relatively conservative positioning, with a focus on sectors that are less sensitive to the economy and the consumer. This positioning had a negative impact on performance in a generally improving market, although it proved beneficial during the market correction that occurred in the second quarter of 2010. The Fund continued to maintain relatively low levels of leverage (less than 15%), which detracted from performance versus competitors that maintained higher leverage, as would be expected in an advancing market. Contributing positively to performance were the Fund’s overweight position in the automobiles sector, investments in several distressed credits and special situations, and an underweight position in health care.


	The views expressed reflect the opinions of BlackRock as of the date of this report and are subject to change based on changes in market, economic or other conditions. These views are not intended to be a forecast of future events and are no guarantee of future results.


Fund Information


Symbol on NYSE		ARK
Initial Offering Date		April 30, 1993
Yield on Closing Market Price as of August 31, 2010 ($3.94)¹		7.61%
Current Monthly Distribution per Common Share²		$0.025
Current Annualized Distribution per Common Share²		$0.300
Leverage as of August 31, 2010³		13%


	¹	Yield on closing market price is calculated by dividing the current annualized distribution per share by the closing market price. Past performance does not guarantee future results.

	²	The distribution is not constant and is subject to change.

	³	Represents loan outstanding as a percentage of total managed assets, which is the total assets of the Fund (including any assets attributable to borrowings) minus the sum of liabilities (other than borrowings representing financial leverage). For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 9.

The table below summarizes the changes in the Fund’s market price and NAV per share:



	8/31/10		2/28/10		Change			High		Low

Market Price	$	3.94	$	3.94		0.00	%	$	4.48	$	3.59
Net Asset Value	$	3.99	$	3.91		2.05	%	$	4.09	$	3.87

The following charts show the portfolio composition of the Fund’s long-term investments and credit quality allocations of the Fund’s corporate bond investments:



Portfolio Composition


	8/31/10		2/28/10

Floating Rate Loan Interests	51	%	46	%
Corporate Bonds	46		52
Common Stocks	2		2
Other Interests	1		—



Credit Quality Allocations⁴


	8/31/10		2/28/10

BBB/Baa	7	%	5	%
BB/Ba	32		33
B	48		43
CCC/Caa	7		11
D	—		1
Not Rated	6		7


	⁴	Using the higher of S&P’s or Moody’s ratings.



8	SEMI-ANNUAL REPORT	AUGUST 31, 2010

The Benefits and Risks of Leveraging

The Funds may utilize leverage to seek to enhance the yield and NAV. However, these objectives cannot be achieved in all interest rate environments.

The Funds may utilize leverage by borrowing through a credit facility. In general, the concept of leveraging is based on the premise that the financing cost of assets to be obtained from leverage will be based on short-term interest rates, which normally will be lower than the income earned by each Fund on its longer-term portfolio investments. To the extent that the total assets of each Fund (including the assets obtained from leverage) are invested in higher-yielding portfolio investments, each Fund’s shareholders will benefit from the incremental net income.

The interest earned on securities purchased with the proceeds from leverage is paid to shareholders in the form of dividends, and the value of these portfolio holdings is reflected in the per share NAV. However, in order to benefit shareholders, the yield curve must be positively sloped; that is, short-term interest rates must be lower than long-term interest rates. If the yield curve becomes negatively sloped, meaning short-term interest rates exceed long-term interest rates, income to shareholders will be lower than if the Funds had not used leverage.

To illustrate these concepts, assume a Fund’s capitalization is $100 million and it issues debt securities for an additional $30 million, creating a total value of $130 million available for investment in long-term securities. If prevailing short-term interest rates are 3% and long-term interest rates are 6%, the yield curve has a strongly positive slope. In this case, the Fund pays interest expense on the $30 million of debt securities based on the lower short-term interest rates. At the same time, the securities purchased by the Fund with assets received from borrowings earn income based on long-term interest rates. In this case, the interest expense of borrowings is significantly lower than the income earned on the Fund’s long-term investments, and therefore the shareholders are the beneficiaries of the incremental net income.

If short-term interest rates rise, narrowing the differential between short-term and long-term interest rates, the incremental net income pickup will be reduced or eliminated completely. Furthermore, if prevailing short-term interest rates rise above long-term interest rates of 6%, the yield curve has a negative slope. In this case, the Fund pays interest expense on the higher short-term interest rates whereas the Fund’s total portfolio earns income based on lower long-term interest rates.

Furthermore, the value of the Fund’s portfolio investments generally varies inversely with the direction of long-term interest rates, although other factors can influence the value of portfolio investments. In contrast, the redemption value of the Fund’s borrowings do not fluctuate in relation to interest rates. As a result, changes in interest rates can influence the Fund’s NAV positively or negatively in addition to the impact on Fund performance from leverage from borrowings discussed above.

The use of leverage may enhance opportunities for increased income to the Funds and shareholders, but as described above, it also creates risks as short- or long-term interest rates fluctuate. Leverage also will generally cause greater changes in each Fund’s NAV, market price and dividend rate than a comparable portfolio without leverage. If the income derived from securities purchased with assets received from leverage exceeds the cost of leverage, each Fund’s net income will be greater than if leverage had not been used. Conversely, if the income from the securities purchased is not sufficient to cover the cost of leverage, each Fund’s net income will be less than if leverage had not been used, and therefore the amount available for distribution to shareholders will be reduced. Each Fund may be required to sell portfolio securities at inopportune times or at distressed values in order to comply with regulatory requirements applicable to the use of leverage or as required by the terms of leverage instruments, which may cause a Fund to incur losses. The use of leverage may limit each Fund’s ability to invest in certain types of securities or use certain types of hedging strategies. Each Fund will incur expenses in connection with the use of leverage, all of which are borne by shareholders and may reduce income.

Under the Investment Company Act of 1940, the Funds are permitted to borrow through their credit facility up to 33¹/₃% of their total managed assets. As of August 31, 2010, the Funds had outstanding leverage from borrowings as a percentage of their total managed assets as follows:



	Percent of Leverage

COY	17	%
CYE	20	%
DSU	16	%
FRB	17	%
ARK	13	%

Derivative Financial Instruments

The Funds may invest in various derivative instruments, including financial futures contracts, swaps, foreign currency exchange contracts and options, as specified in Note 2 of the Notes to Financial Statements, which may constitute forms of economic leverage. Such instruments are used to obtain exposure to a market without owning or taking physical custody of securities or to hedge market, equity, credit and/or foreign currency exchange rate risks. Such derivative instruments involve risks, including the imperfect correlation between the value of a derivative instrument and the underlying asset, possible default of the counterparty to the transaction or illiquidity of the derivative instrument. The Funds’ ability to successfully use a derivative instrument depends on the investment advisor’s ability to accurately predict pertinent market movements, which cannot be assured. The use of derivative instruments may result in losses greater than if they had not been used, may require a Fund to sell or purchase portfolio securities at inopportune times or for distressed values, may limit the amount of appreciation a Fund can realize on an investment, may result in lower dividends paid to shareholders or may cause a Fund to hold a security that it might otherwise sell. The Funds’ investments in these instruments are discussed in detail in the Notes to Financial Statements.



SEMI-ANNUAL REPORT	AUGUST 31, 2010	9




Schedule of Investments August 31, 2010 (Unaudited)	BlackRock Corporate High Yield Fund, Inc. (COY)
	(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value

Building Products — 0.1%
Masonite Worldwide Holdings (a)		5,953	$	226,214

Capital Markets — 0.1%
E*Trade Financial Corp. (a)		26,900		333,829

Chemicals — 0.0%
Wellman Holdings, Inc. (a)		1,425		71

Communications Equipment — 0.5%
Loral Space & Communications Ltd. (a)		22,577		1,208,773

Construction Materials — 0.0%
Nortek, Inc. (a)		2,020		83,830

Containers & Packaging — 0.0%
Smurfit Kappa Plc (a)		3,634		31,776

Electrical Equipment — 0.0%
Medis Technologies Ltd. (a)		67,974		2,107

Household Durables — 0.2%
Beazer Homes USA, Inc. (a)		113,588		393,014

Machinery — 0.2%
Accuride Corp., Restricted Shares (a)		84,389		92,828
Navistar International Corp. (a)		8,700		364,356

				457,184

Media — 0.4%
Charter Communications, Inc. (a)		15,186		516,324
Gannett Co., Inc.		39,500		477,555

				993,879

Paper & Forest Products — 0.1%
Ainsworth Lumber Co. Ltd. (a)		36,744		86,144
Ainsworth Lumber Co. Ltd. (a)(b)		41,686		97,731
Western Forest Products, Inc. (a)		147,968		40,935
Western Forest Products, Inc. (a)(b)		41,528		11,488

				236,298

Semiconductors & Semiconductor
Equipment — 0.0%
SunPower Corp., Class B (a)		352		3,640

Software — 0.2%
HMH Holdings/EduMedia (a)		83,184		415,922

Wireless Telecommunication Services — 0.1%
FiberTower Corp. (a)		76,542		274,786

Total Common Stocks — 1.9%				4,661,323




Corporate Bonds	Par (000)

Aerospace & Defense — 0.4%
Bombardier, Inc., 7.75%, 3/15/20 (b)	USD	200	215,000
DynCorp International, Inc., 10.38%, 7/01/17 (b)		230	228,850
Kratos Defense & Security Solutions, Inc., 10.00%, 6/01/17		500	516,250

			960,100


Corporate Bonds	Par (000)		Value

Air Freight & Logistics — 0.6%
National Air Cargo Group, Inc.:
Series 1, 12.38%, 8/16/15	USD	695	$	695,000
Series 2, 12.38%, 8/16/15		695		695,000

				1,390,000

Airlines — 2.9%
Air Canada (b):
9.25%, 8/01/15		970		950,600
12.00%, 2/01/16		260		243,100
American Airlines, Inc., 10.50%, 10/15/12 (b)		870		924,375
American Airlines Pass Through Trust, Series 2001-02, 7.86%, 4/01/13		390		408,135
Continental Airlines, Inc.:
6.75%, 9/15/15 (b)		540		534,600
Series 1997-4-B, 6.90%, 7/02/18		503		490,655
Series 2001-1-C, 7.03%, 12/15/12		224		222,395
Delta Air Lines, Inc., Series B, 9.75%, 12/17/16		926		972,807
United Air Lines, Inc., 12.75%, 7/15/12		1,982		2,210,376

				6,957,043

Auto Components — 1.5%
Allison Transmission, Inc. (b):
11.00%, 11/01/15		220		236,500
11.25%, 11/01/15 (c)		164		176,300
Delphi International Holdings Unsecured, 12.00%, 10/06/14		41		39,860
The Goodyear Tire & Rubber Co.:
8.25%, 8/15/20		400		409,500
8.75%, 8/15/20		280		296,100
Icahn Enterprises LP, 8.00%, 1/15/18		2,475		2,462,625

				3,620,885

Beverages — 0.2%
Cott Beverages USA, Inc., 8.13%, 9/01/18 (b)		245		252,044
Crown European Holdings SA, 7.13%, 8/15/18 (b)	EUR	225		292,259

				544,303

Biotechnology — 0.3%
QHP Pharma, 10.25%, 3/15/15 (b)	USD	582		593,916

Building Products — 1.5%
Associated Materials LLC, 9.88%, 11/15/16		710		752,600
Building Materials Corp. of America (b):
6.88%, 8/15/18		490		476,525
7.00%, 2/15/20		570		567,150
Momentive Performance Materials, Inc., Series WI, 9.75%, 12/01/14		695		678,494
Ply Gem Industries, Inc., 11.75%, 6/15/13		1,130		1,163,900

				3,638,669

Capital Markets — 0.5%
E*Trade Financial Corp., 3.43%, 8/31/19 (b)(d)(e)		226		271,200
Marsico Parent Co., LLC, 10.63%, 1/15/16 (b)		904		334,480
Marsico Parent Holdco, LLC, 12.50%, 7/15/16 (b)(c)		254		22,889
Marsico Parent Superholdco, LLC, 14.50%, 1/15/18 (b)(c)		266		23,928
Offshore Group Investments Ltd., 11.50%, 8/01/15 (b)		480		478,800

				1,131,297

Portfolio Abbreviations

To simplify the listings of portfolio holdings in the Schedules of Investments, the names and descriptions of many of the securities have been abbreviated according to the following list:


CAD	Canadian Dollar
EUR	Euro
FKA	Formerly Known As
GBP	British Pound
PIK	Payment-In-Kind
USD	US Dollar


See Notes to Financial Statements.

10	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Schedule of Investments (continued)	BlackRock Corporate High Yield Fund, Inc. (COY)
	(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value

Chemicals — 3.5%
American Pacific Corp., 9.00%, 2/01/15	USD	800	$	791,000
CF Industries, Inc.:
6.88%, 5/01/18		405		426,263
7.13%, 5/01/20		715		766,837
Chemtura Corp., 7.88%, 9/01/18 (b)		490		500,412
Georgia Gulf Corp., 9.00%, 1/15/17 (b)		155		160,619
Hexion U.S. Finance Corp.:
9.75%, 11/15/14		730		717,225
8.88%, 2/01/18		690		638,250
Huntsman International LLC (b):
6.88%, 11/15/13		260		324,543
8.63%, 3/15/20		220		218,075
Ineos Finance Plc, 9.00%, 5/15/15 (b)		385		389,331
Innophos, Inc., 8.88%, 8/15/14		740		758,500
MacDermid, Inc., 9.50%, 4/15/17 (b)		1,180		1,196,225
OXEA Finance/Cy SCA, 9.63%, 7/15/17 (b)	EUR	385		504,968
Wellman Holdings, Inc., Subordinate Note (d):
(Second Lien), 10.00%, 1/29/19 (b)	USD	790		687,300
(Third Lien), 5.00%, 1/29/19 (c)		259		101,015

				8,180,563

Commercial Banks — 3.0%
CIT Group, Inc.:
7.00%, 5/01/16		1,735		1,648,250
7.00%, 5/01/17		5,870		5,519,631

				7,167,881

Commercial Services & Supplies — 1.1%
ACCO Brands Corp., 10.63%, 3/15/15		480		528,000
RSC Equipment Rental, Inc., 10.00%, 7/15/17 (b)		555		604,950
Scientific Games International, Inc., 9.25%, 6/15/19		215		227,900
West Corp., 11.00%, 10/15/16		1,170		1,228,500

				2,589,350

Construction Materials — 0.9%
Nortek, Inc., 11.00%, 12/01/13		2,029		2,138,035

Consumer Finance — 1.0%
Credit Acceptance Corp., 9.13%, 2/01/17 (b)		640		663,200
Ford Motor Credit Co. LLC:
3.28%, 1/13/12 (f)		195		191,100
7.80%, 6/01/12		200		210,468
8.00%, 12/15/16		170		184,609
6.63%, 8/15/17		1,150		1,168,828

				2,418,205

Containers & Packaging — 3.2%
Ball Corp., 6.75%, 9/15/20		475		499,938
Berry Plastics Corp.:
8.88%, 9/15/14		755		719,137
8.25%, 11/15/15		125		125,313
9.50%, 5/15/18 (b)		395		363,400
Berry Plastics Holding Corp., 8.88%, 9/15/14		2,305		2,195,512
Graphic Packaging International, Inc., 9.50%, 6/15/17		810		862,650
Impress Holdings BV, 3.65%, 9/15/13 (b)(f)		390		368,550
Owens-Brockway Glass Container, Inc., 6.75%, 12/01/14	EUR	152		194,548
Pregis Corp., 12.38%, 10/15/13	USD	1,130		1,130,000
Smurfit Kappa Acquisitions (b):
7.25%, 11/15/17		465		601,057
7.75%, 11/15/19		440		571,530

				7,631,635



Corporate Bonds	Par (000)		Value

Diversified Consumer Services — 1.2%
Service Corp. International, 7.00%, 6/15/17	USD	2,800	$	2,898,000

Diversified Financial Services — 6.7%
Ally Financial Inc. (b):
8.30%, 2/12/15		1,970		2,048,800
7.50%, 9/15/20		1,760		1,742,400
Axcan Intermediate Holdings, Inc., 12.75%, 3/01/16		935		936,169
FCE Bank Plc:
7.88%, 2/15/11		1,150		1,785,742
7.13%, 1/16/12		1,450		1,901,826
7.13%, 1/15/13		550		721,382
GMAC, Inc.:
7.50%, 12/31/13		350		357,437
2.74%, 12/01/14 (f)		371		318,959
8.00%, 3/15/20 (b)		2,300		2,357,500
Leucadia National Corp., 8.13%, 9/15/15		1,120		1,192,800
Reynolds Group DL Escrow, Inc., 7.75%, 10/15/16 (b)		1,340		1,350,050
Reynolds Group Issuer, Inc. (b):
7.75%, 10/15/16		350		450,186
8.50%, 5/15/18		710		681,600

				15,844,851

Diversified Telecommunication Services — 4.5%
Broadview Networks Holdings, Inc., 11.38%, 9/01/12		1,000		980,000
Frontier Communications Corp.:
7.88%, 4/15/15		550		580,250
8.25%, 4/15/17		700		740,250
8.50%, 4/15/20		325		344,906
GCI, Inc., 8.63%, 11/15/19		1,100		1,155,000
ITC Deltacom, Inc., 10.50%, 4/01/16		500		492,500
Nordic Telephone Co. Holdings ApS, 8.88%, 5/01/16 (b)		200		210,000
Qwest Communications International, Inc.:
7.50%, 2/15/14		1,890		1,925,437
8.00%, 10/01/15 (b)		500		537,500
Series B, 7.50%, 2/15/14		1,385		1,410,969
Qwest Corp.:
7.63%, 6/15/15		500		561,250
8.38%, 5/01/16		650		757,250
Windstream Corp.:
8.13%, 8/01/13		400		426,500
7.88%, 11/01/17		600		609,000

				10,730,812

Energy Equipment & Services — 1.9%
Compagnie Générale de Géophysique-Veritas:
7.50%, 5/15/15		1,210		1,197,900
7.75%, 5/15/17		300		297,750
Expro Finance Luxembourg SCA, 8.50%, 12/15/16 (b)		1,715		1,603,525
Global Geophysical Services, Inc., 10.50%, 5/01/17 (b)		285		282,150
North American Energy Alliance LLC, 10.88%, 6/01/16 (b)		625		675,000
Thermon Industries, Inc., 9.50%, 5/01/17 (b)		500		512,500

				4,568,825

Food & Staples Retailing — 0.9%
AmeriQual Group LLC, 9.50%, 4/01/12 (b)		750		735,000
Rite Aid Corp.:
9.75%, 6/12/16		380		403,750
10.25%, 10/15/19		580		595,950
8.00%, 8/15/20 (b)		480		477,000

				2,211,700


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	11




Schedule of Investments (continued)	BlackRock Corporate High Yield Fund, Inc. (COY)
	(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value

Food Products — 0.5%
B&G Foods, Inc., 7.63%, 1/15/18	USD	200	$	205,750
Reddy Ice Corp., 11.25%, 3/15/15 (b)		410		415,638
Smithfield Foods, Inc., 10.00%, 7/15/14 (b)		440		491,150
TreeHouse Foods, Inc., 7.75%, 3/01/18		150		158,625

				1,271,163

Health Care Equipment & Supplies — 1.4%
DJO Finance LLC, 10.88%, 11/15/14		2,255		2,415,669
Hologic, Inc., 2.00%, 12/15/37 (d)(g)		910		822,412

				3,238,081

Health Care Providers & Services — 4.9%
American Renal Holdings, 8.38%, 5/15/18 (b)		260		260,000
Gentiva Health Services, Inc., 11.50%, 9/01/18 (b)		655		677,925
HCA, Inc.:
9.13%, 11/15/14		1,645		1,727,250
8.50%, 4/15/19		935		1,024,994
7.25%, 9/15/20		2,145		2,241,525
inVentiv Health Inc., 10.00%, 8/15/18 (b)		600		586,500
Omnicare, Inc., 7.75%, 6/01/20		465		465,000
Tenet Healthcare Corp.:
9.00%, 5/01/15		1,717		1,828,605
10.00%, 5/01/18		622		699,750
8.88%, 7/01/19		2,010		2,173,312

				11,684,861

Health Care Technology — 1.1%
IMS Health, Inc., 12.50%, 3/01/18 (b)		2,235		2,589,806

Hotels, Restaurants & Leisure — 2.3%
Diamond Resorts Corp., 12.00%, 8/15/18 (b)		1,100		1,039,500
Enterprise Inns Plc, 6.50%, 12/06/18	GBP	388		491,129
Harrah’s Operating Co., Inc., 11.25%, 6/01/17	USD	615		658,050
Inn of the Mountain Gods Resort & Casino, 12.00%, 11/15/10 (a)(h)		1,425		623,437
Little Traverse Bay Bands of Odawa Indians, 10.25%, 2/15/14 (a)(b)(h)		1,175		396,563
MGM Mirage, 13.00%, 11/15/13		90		103,950
MGM Resorts International:
10.38%, 5/15/14		235		256,150
11.13%, 11/15/17		780		871,650
Marina District Finance Co., Inc., 9.88%, 8/15/18 (b)		340		339,150
Travelport LLC:
5.16%, 9/01/14 (f)		145		134,488
9.88%, 9/01/14		190		194,275
Tropicana Entertainment LLC, Series WI, 9.63%, 12/15/14 (a)(h)		315		230
Virgin River Casino Corp., 9.00%, 1/15/12 (a)(h)		805		362,250

				5,470,822

Household Durables — 3.6%
Beazer Homes USA, Inc.:
6.88%, 7/15/15		170		147,050
8.13%, 6/15/16		295		258,125
12.00%, 10/15/17		1,425		1,604,906
9.13%, 6/15/18		1,620		1,433,700
DFS Furniture Holdings Plc, 9.75%, 7/15/17 (b)	GBP	193		277,494
K. Hovnanian Enterprises, Inc., 10.63%, 10/15/16	USD	1,620		1,571,400
Ryland Group Inc., 6.63%, 5/01/20		625		585,938


Corporate Bonds	Par (000)		Value

Household Durables (concluded)
Standard Pacific Corp.:
9.25%, 4/15/12	USD	125	$	128,281
6.25%, 4/01/14		485		452,263
7.00%, 8/15/15		325		299,000
10.75%, 9/15/16		1,285		1,352,462
8.38%, 5/15/18		535		514,938

				8,625,557

Independent Power Producers & Energy Traders — 2.9%
The AES Corp., 8.75%, 5/15/13 (b)		587		596,539
Calpine Construction Finance Co. LP, 8.00%, 6/01/16 (b)		1,190		1,249,500
Energy Future Holdings Corp., 10.00%, 1/15/20 (b)		3,115		2,999,754
Energy Future Intermediate Holding Co. LLC, 10.00%, 12/01/20		161		154,718
NRG Energy, Inc.:
7.25%, 2/01/14		1,215		1,239,300
7.38%, 2/01/16		250		251,875
7.38%, 1/15/17		385		387,888

				6,879,574

Industrial Conglomerates — 2.6%
Sequa Corp. (b):
11.75%, 12/01/15		2,190		2,255,700
13.50%, 12/01/15 (c)		3,759		3,909,102

				6,164,802

Insurance — 0.9%
Alliant Holdings I, Inc., 11.00%, 5/01/15 (b)		1,600		1,642,000
USI Holdings Corp., 4.25%, 11/15/14 (b)(f)		630		533,925

				2,175,925

Life Sciences Tools & Services — 0.2%
Patheon, Inc., 8.63%, 4/15/17 (b)		540		537,975

Machinery — 1.8%
AGY Holding Corp., 11.00%, 11/15/14		900		765,000
Accuride Corp., 7.50%, 2/26/20 (c)(d)		9		22,842
Navistar International Corp.:
3.00%, 10/15/14 (d)		1,750		1,909,687
8.25%, 11/01/21		1,000		1,047,500
Oshkosh Corp., 8.25%, 3/01/17		130		136,825
Titan International, Inc., 5.63%, 1/15/17 (b)(d)		220		261,800

				4,143,654

Marine — 0.7%
Horizon Lines, Inc., 4.25%, 8/15/12 (d)		1,985		1,667,400

Media — 12.8%
Affinion Group, Inc.:
10.13%, 10/15/13		2,235		2,290,875
10.13%, 10/15/13		715		731,087
CCH II LLC, 13.50%, 11/30/16		502		595,301
CCO Holdings LLC (b):
7.88%, 4/30/18		430		445,050
8.13%, 4/30/20		430		452,575
CMP Susquehanna Corp., 3.64%, 5/15/14 (b)(f)		150		3,000
CSC Holdings, Inc., 8.50%, 4/15/14		370		404,225
Catalina Marketing Corp., 10.50%, 10/01/15 (b)(c)		555		593,850
Clear Channel Worldwide Holdings, Inc.:
9.25%, 12/15/17		779		808,212
Series B, 9.25%, 12/15/17		3,945		4,137,319
Cox Enterprises, Inc.:
Loan Close 2, 4.00%, 8/15/18		605		605,266
Loan Close 3, 8/15/18		700		700,000
Shares Loan, 4.00%, 8/15/18		714		713,688


See Notes to Financial Statements.

12	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Schedule of Investments (continued)	BlackRock Corporate High Yield Fund, Inc. (COY)
	(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value

Media (concluded)
DISH DBS Corp., 7.00%, 10/01/13	USD	90	$	93,713
Gray Television, Inc., 10.50%, 6/29/15		420		404,250
Harland Clarke Holdings Corp.:
6.00%, 5/15/15 (f)		330		277,200
9.50%, 5/15/15		390		371,475
Intelsat Corp., 9.25%, 6/15/16		2,090		2,215,400
Interactive Data Corp., 10.25%, 8/01/18 (b)		945		980,437
Liberty Global, Inc., 4.50%, 11/15/16 (b)(d)		440		539,000
Liberty Media Corp., 3.13%, 3/30/23 (d)		1,023		1,112,512
Lighthouse International Co. SA:
8.00%, 4/30/14	EUR	519		388,045
8.00%, 4/30/14 (b)		53		39,627
Live Nation Entertainment, Inc., 8.13%, 5/15/18 (b)	USD	600		579,000
McClatchy Co., 11.50%, 2/15/17 (b)		1,285		1,326,762
Nielsen Finance LLC:
11.63%, 2/01/14		70		78,488
10.00%, 8/01/14		2,085		2,189,250
ProtoStar I Ltd., 18.00%, 10/15/12 (a)(b)(d)(h)		812		771,181
Rainbow National Services LLC (b):
8.75%, 9/01/12		410		410,513
10.38%, 9/01/14		1,496		1,552,100
Regal Entertainment Group, 9.13%, 8/15/18		305		312,625
Seat Pagine Gialle SpA, 10.50%, 1/31/17 (b)	EUR	125		147,318
TL Acquisitions, Inc., 10.50%, 1/15/15 (b)	USD	1,120		1,069,600
UPC Germany GmbH (b):
8.13%, 12/01/17	EUR	640		657,600
8.13%, 12/01/17		407		526,086
9.63%, 12/01/19		530		703,546
UPC Holding BV, 9.88%, 4/15/18 (b)	USD	500		520,625
Unitymedia GmbH, 9.63%, 12/01/19	EUR	158		209,736
Ziggo Bond Co. BV, 8.00%, 5/15/18 (b)		343		441,187

				30,397,724

Metals & Mining — 4.1%
AK Steel Corp., 7.63%, 5/15/20	USD	20		20,150
Aleris International, Inc. (a)(h):
9.00%, 12/15/14		950		1,900
10.00%, 12/15/16		800		304
Drummond Co., Inc.:
9.00%, 10/15/14 (b)		800		837,000
7.38%, 2/15/16		215		215,269
FMG Finance Property Ltd. (b):
10.00%, 9/01/13		500		550,625
10.63%, 9/01/16		1,100		1,274,625
Foundation PA Coal Co., 7.25%, 8/01/14		1,850		1,854,625
Goldcorp, Inc., 2.00%, 8/01/14 (d)		615		747,994
McJunkin Red Man Corp., 9.50%, 12/15/16 (b)		565		498,612
Murray Energy Corp., 10.25%, 10/15/15 (b)		490		501,025
New World Resources NV:
7.38%, 5/15/15		245		304,267
7.88%, 5/01/18		190		243,185
7.88%, 5/01/18 (b)		192		245,745
Novelis, Inc., 11.50%, 2/15/15		405		445,500
Ryerson, Inc.:
7.84%, 11/01/14 (f)		380		352,450
12.00%, 11/01/15		245		252,044
Steel Dynamics, Inc., 7.38%, 11/01/12		250		265,625
United States Steel Corp., 7.38%, 4/01/20		480		486,000
Vedanta Resources Plc, 9.50%, 7/18/18 (b)		600		630,000

				9,726,945


Corporate Bonds	Par (000)		Value

Multiline Retail — 2.5%
Dollar General Corp.:
10.63%, 7/15/15	USD	1,285	$	1,410,288
11.88%, 7/15/17 (c)		4,007		4,608,050

				6,018,338

Oil, Gas & Consumable Fuels — 8.3%
Arch Coal, Inc.:
8.75%, 8/01/16		55		59,538
7.25%, 10/01/20		790		801,850
Atlas Energy Operating Co. LLC:
12.13%, 8/01/17		450		516,938
10.75%, 2/01/18		240		264,600
Berry Petroleum Co., 8.25%, 11/01/16		470		474,700
Bill Barrett Corp., 9.88%, 7/15/16		40		43,400
Chesapeake Energy Corp.:
6.63%, 8/15/20		2,170		2,178,137
2.25%, 12/15/38 (d)		775		580,281
Coffeyville Resources LLC, 9.00%, 4/01/15 (b)		270		277,425
Connacher Oil and Gas Ltd. (b):
11.75%, 7/15/14		165		179,025
10.25%, 12/15/15		1,075		1,075,000
Consol Energy, Inc., 8.25%, 4/01/20 (b)		1,825		1,936,781
Crosstex Energy LP, 8.88%, 2/15/18		375		387,188
Denbury Resources, Inc., 8.25%, 2/15/20		652		696,010
Linn Energy LLC, 8.63%, 4/15/20 (b)		1,005		1,060,275
Massey Energy Co., 6.88%, 12/15/13		865		875,812
Niska Gas Storage US LLC, 8.88%, 3/15/18 (b)		1,730		1,820,825
OPTI Canada, Inc. (b):
9.00%, 12/15/12		1,615		1,619,037
9.75%, 8/15/13		900		888,750
Patriot Coal Corp., 8.25%, 4/30/18		380		377,150
Peabody Energy Corp., 6.50%, 9/15/20		1,000		1,051,250
Petrohawk Energy Corp.:
10.50%, 8/01/14		530		592,275
7.88%, 6/01/15		450		466,875
QEP Resources, Inc., 6.88%, 3/01/21		430		448,275
Range Resources Corp., 8.00%, 5/15/19		400		428,000
Teekay Corp., 8.50%, 1/15/20		610		651,175

				19,750,572

Paper & Forest Products — 2.6%
Ainsworth Lumber Co. Ltd., 11.00%, 7/29/15 (b)(c)		337		287,866
Boise Paper Holdings LLC:
9.00%, 11/01/17		310		326,275
8.00%, 4/01/20		140		142,450
Clearwater Paper Corp., 10.63%, 6/15/16		370		416,250
Georgia-Pacific LLC, 8.25%, 5/01/16 (b)		1,525		1,669,875
Glatfelter, 7.13%, 5/01/16 (b)		190		191,187
NewPage Corp., 11.38%, 12/31/14		2,930		2,380,625
Verso Paper Holdings LLC, 11.50%, 7/01/14		785		828,175

				6,242,703

Pharmaceuticals — 0.6%
Angiotech Pharmaceuticals, Inc., 4.29%, 12/01/13 (f)		995		803,463
Elan Finance Plc, 8.88%, 12/01/13		90		90,675
Novasep Holding SAS, 9.63%, 12/15/16 (b)	EUR	580		617,404

				1,511,542

Real Estate Investment Trusts (REITs) — 0.6%
iStar Financial, Inc., 5.65%, 9/15/11	USD	1,500		1,374,375

Real Estate Management & Development — 0.5%
Forest City Enterprises, Inc., 7.63%, 6/01/15		1,325		1,209,063


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	13




Schedule of Investments (continued)	BlackRock Corporate High Yield Fund, Inc. (COY)
	(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value

Road & Rail — 0.9%
Avis Budget Car Rental LLC, 9.63%, 3/15/18	USD	475	$	496,375
Hertz Holdings Netherlands BV, 8.50%, 7/31/15 (b)	EUR	660		869,841
Syncreon Global Ireland Ltd., 9.50%, 5/01/18 (b)	USD	750		733,125

				2,099,341

Semiconductors & Semiconductor Equipment — 0.2%
Advanced Micro Devices, Inc.:
6.00%, 5/01/15 (d)		129		126,259
7.75%, 8/01/20 (b)		265		262,350

				388,609

Software — 0.0%
BMS Holdings, Inc., 8.59%, 2/15/12 (b)(c)(f)		445		8,906

Specialty Retail — 1.6%
Group 1 Automotive, Inc., 2.25%, 6/15/36 (d)(g)		985		749,831
Hillman Group, Inc., 10.88%, 6/01/18 (b)		490		515,725
Ltd. Brands, Inc., 8.50%, 6/15/19		745		841,850
Sonic Automotive, Inc., 9.00%, 3/15/18		345		351,038
Toys ‘R’ Us-Delaware, Inc., 7.38%, 9/01/16 (b)		390		393,900
United Auto Group, Inc., 7.75%, 12/15/16		950		907,250

				3,759,594

Textiles, Apparel & Luxury Goods — 0.2%
Quiksilver, Inc., 6.88%, 4/15/15		470		434,750

Tobacco — 0.1%
Vector Group Ltd., 11.00%, 8/15/15		300		305,625

Wireless Telecommunication Services — 5.2%
Cricket Communications, Inc.:
10.00%, 7/15/15		1,795		1,880,262
7.75%, 5/15/16		336		346,920
Digicel Group Ltd. (b):
8.88%, 1/15/15		635		639,763
9.13%, 1/15/15 (c)		1,711		1,719,185
8.25%, 9/01/17		850		882,937
10.50%, 4/15/18		500		536,250
FiberTower Corp., 9.00%, 1/01/16 (c)		293		249,069
iPCS, Inc., 2.59%, 5/01/13 (f)		760		710,600
MetroPCS Wireless, Inc., 9.25%, 11/01/14		2,365		2,459,600
Nextel Communications, Inc.:
Series E, 6.88%, 10/31/13		1,110		1,107,225
Series F, 5.95%, 3/15/14		100		96,625
Orascom Telecom Finance SCA, 7.88%, 2/08/14 (b)		265		251,750
Sprint Capital Corp., 6.88%, 11/15/28		1,720		1,436,200

				12,316,386

Total Corporate Bonds — 98.9%				235,210,163




Floating Rate Loan Interests (f)

Auto Components — 1.0%
Affinion Group Holdings, Inc., Term Loan, 8.51%, 3/01/12 (c)		455		436,988
Allison Transmission, Inc., Term Loan, 3.04%, 8/07/14		2,164		1,994,156

				2,431,144

Automobiles — 1.3%
Ford Motor Co., Tranche B-1 Term Loan, 3.03%, 12/15/13		3,243		3,119,476

Building Products — 1.2%
CPG International I, Inc., Term Loan, 5.54%, 2/28/11		2,940		2,939,698


Floating Rate Loan Interests (f)	Par (000)		Value

Capital Markets — 0.1%
Marsico Parent Co., LLC, Term Loan, 5.31% – 5.56%, 12/15/14	USD	377	$	261,513

Chemicals — 0.2%
PQ Corp. (FKA Niagara Acquisition, Inc.), Term Loan (First Lien), 3.52% – 3.73%, 7/30/14		406		371,090

Construction & Engineering — 0.7%
Safway Services, LLC, Last Out Tranche Loan, 15.63%, 12/14/17		1,750		1,750,000

Diversified Telecommunication Services — 1.8%
Wind Finance SL SA, Euro Facility (Second Lien), 7.89%, 12/17/14	EUR	3,350		4,236,667

Health Care Providers & Services — 0.8%
Harden Healthcare LLC:
Add-on Term Loan, 7.75%, 3/02/15	USD	500		490,000
Tranche A Term Loan, 8.50%, 2/22/15		436		427,280
inVentiv Health, Inc. (FKA Ventive Health, Inc.), Term Loan B, 6.50%, 7/31/16		900		898,312

				1,815,592

Hotels, Restaurants & Leisure — 1.2%
Travelport LLC (FKA Travelport, Inc.), Loan, 8.37%, 3/27/12 (c)		3,121		2,902,582

IT Services — 0.4%
First Data Corp.:
Initial Tranche B-1 Term Loan, 3.01%, 9/24/14		47		39,964
Initial Tranche B-2 Term Loan, 3.01%, 9/24/14		380		323,556
Initial Tranche B-3 Term Loan, 3.01%, 9/24/14		743		633,782

				997,302

Independent Power Producers & Energy Traders — 1.0%
Texas Competitive Electric Holdings Co., LLC (TXU):
Initial Tranche B-1 Term Loan, 3.79% – 4.03%, 10/10/14		205		155,503
Initial Tranche B-2 Term Loan, 3.79% – 4.07%, 10/10/14		296		224,518
Initial Tranche B-3 Term Loan, 3.79% – 4.03%, 10/10/14		2,558		1,928,166

				2,308,187

Media — 1.6%
Cengage Learning Acquisitions, Inc. (Thomson Learning), Tranche 1 Incremental Term Loan, 7.50%, 7/03/14		1,470		1,465,100
HMH Publishing Co., Ltd., Tranche A Term Loan, 5.79%, 6/12/14 (c)		883		804,193
Newsday, LLC, Fixed Rate Term Loan, 10.50%, 8/01/13		1,375		1,459,219

				3,728,512

Multiline Retail — 0.6%
Hema Holding BV, Mezzanine, 9.15%, 1/29/17 (c)	EUR	1,043		1,216,042
The Neiman Marcus Group, Inc., Term Loan, 2.30%, 4/06/13	USD	225		213,631

				1,429,673

Oil, Gas & Consumable Fuels — 1.3%
Tronox Worldwide LLC:
Tranche B-1 Term Loan, 11.25%, 9/20/10		1,104		1,112,496
Tranche B-2 Term Loan, 11.25%, 9/20/10		296		298,879
Turbo Beta Ltd., Dollar Facility, 14.50%, 3/15/18 (c)		2,216		1,756,268

				3,167,643


See Notes to Financial Statements.

14	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Schedule of Investments (continued)	BlackRock Corporate High Yield Fund, Inc. (COY)
	(Percentages shown are based on Net Assets)


Floating Rate Loan Interests (f)	Par (000)		Value

Paper & Forest Products — 0.3%
Verso Paper Finance Holdings LLC, PIK Loan, 6.69% – 7.44%, 2/01/13 (c)	USD	1,240	$	743,985

Real Estate Management & Development — 0.6%
Realogy Corp.:
Initial Term Loan B, 3.30% – 3.53%, 10/10/13		373		322,075
Synthetic Letter of Credit, 0.11%, 10/10/13		75		64,760
Second Lien Term Facility, 13.50%, 10/15/17		925		975,875

				1,362,710

Specialty Retail — 0.2%
Claire’s Stores, Inc., Term Loan B, 3.01% – 3.23%, 5/29/14		133		113,398
Michaels Stores, Inc., Term Loan B-1, 2.63% – 2.81%, 10/31/13		331		312,138

				425,536

Total Floating Rate Loan Interests — 14.3%				33,991,310




Other Interests (i)	Beneficial Interest (000)

Auto Components — 1.9%
Delphi Debtor-in-Possession Holding Co. LLP Class B Membership Interests		— (j)		4,553,557

Media — 0.0%
Adelphia Escrow		700		70
Adelphia Recovery Trust		878		3,512

				3,582

Total Other Interests — 1.9%				4,557,139




Preferred Stocks	Shares

Diversified Financial Services — 0.9%
Ally Financial Inc., 7.00% (b)		2,674		2,208,808

Household Durables — 0.1%
Beazer Homes USA, Inc., 7.50% (d)		5,000		99,050

Media — 0.0%
CMP Susquehanna Radio Holdings Corp. (a)(b)(f)		34,982		—

Total Preferred Stocks — 1.0%				2,307,858




Warrants (k)

Health Care Providers & Services — 0.0%
HealthSouth Corp. (Expires 1/16/14)		29,930		1

Media — 0.0%
CMP Susquehanna Radio Holdings Corp. (Expires 3/26/19) (b)		39,975		—
New Vision Holdings LLC (Expires 9/30/14)		14,965		150

				150

Oil, Gas & Consumable Fuels — 0.0%
Turbo Cayman Ltd. (No Expiration)		1		—

Software — 0.0%
HMH Holdings/EduMedia (Expires 3/09/17)		9,997		—

Total Warrants — 0.0%		151

Total Long-Term Investments (Cost — $285,578,895) — 118.0%				280,727,944


Short-Term Securities	Shares		Value

BlackRock Liquidity Funds, TempCash, Institutional Class, 0.27% (l)(m)		322,368	$	322,368

Total Short-Term Securities (Cost — $322,368) — 0.1%				322,368




Options Purchased	Contracts

Over-the-Counter Call Options — 0.0%
Marsico Parent Superholdco LLC, Strike Price USD 942.86, expires 12/21/19, Broker Goldman Sachs Bank USA		17		—

Total Options Purchased (Cost — $16,622) — 0.0%				—

*Total Investments (Cost — $285,917,885) — 118.1%**				281,050,312
Liabilities in Excess of Other Assets — (18.1)%				(43,199,176	)

Net Assets — 100.0%			$	237,851,136



*	The cost and unrealized appreciation (depreciation) of investments as of August 31, 2010, as computed for federal income tax purposes, were as follows:

	Aggregate cost	$	287,104,524

	Gross unrealized appreciation	$	13,346,589
	Gross unrealized depreciation		(19,400,801	)

	Net unrealized depreciation	$	(6,054,212	)


(a)	Non-income producing security.

(b)	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.

(c)	Represents a payment-in-kind security which may pay interest/dividends in additional face/shares.

(d)	Convertible security.

(e)	Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

(f)	Variable rate security. Rate shown is as of report date.

(g)	Represents a step-down bond that pays an initial coupon rate for the first period and then a lower coupon rate for the following periods. Rate shown is as of report date.

(h)	Issuer filed for bankruptcy and/or is in default of interest payments.

(i)	Other interests represent beneficial interest in liquidation trusts and other reorganization entities and are non-income producing.

(j)	Amount is less than $1,000.

(k)	Warrants entitle the Fund to purchase a predetermined number of shares of common stock and are non-income producing. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date, if any.

(l)	Investments in companies considered to be an affiliate of the Fund during the period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:



Affiliate	Shares Held at February 28, 2010	Net Activity		Shares Held at August 31, 2010	Income

BlackRock Liquidity Funds, TempFund, Institutional Class	4,931,674	(4,609,306	)	322,368	$	2,350


(m)	Represents the current yield as of report date.


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	15




Schedule of Investments (continued)	BlackRock Corporate High Yield Fund, Inc. (COY)


•	Foreign currency exchange contracts as of August 31, 2010 were as follows:



Currency Purchased		Currency Sold		Counterparty	Settlement Date	Unrealized Appreciation (Depreciation)

EUR	763,800	USD	980,728	Citibank NA	9/15/10	$	(12,823	)
USD	16,539,551	EUR	13,056,000	Citibank NA	9/15/10		(5,315	)
USD	489,452	EUR	385,000	Deutsche Bank AG	9/15/10		1,571
USD	179,941	CAD	190,000	Deutsche Bank AG	10/20/10		1,906
GBP	114,000	USD	177,834	UBS AG	10/20/10		(3,059	)
USD	2,115,757	GBP	1,386,000	Citibank NA	10/20/10		(9,141	)
USD	293,808	GBP	192,500	Deutsche Bank AG	10/20/10		(1,317	)
USD	178,806	GBP	116,000	Royal Bank of Scotland Plc	10/20/10		964

Total						$	(27,214	)


•	Financial futures contracts sold as of August 31, 2010 were as follows:

Contracts

Issue

Exchange

Expiration
Date

Notional
Value

Unrealized
Appreciation

S&P 500
Index

Chicago
Mercantile

September
2010

6,922,729

108,779


•	Credit default swaps on single-name issuers — buy protection outstanding as of August 31, 2010 were as follows:



Issuer	Pay Fixed Rate	Counterparty	Expiration	Notional Amount (000)		Unrealized Appreciation (Depreciation)

iStar Financial, Inc.	5.00%	Morgan Stanley Capital Services, Inc.	September 2011	$	1,500	$	35,889

K. Hovnanian Enterprises, Inc.	5.00%	Goldman Sachs Bank USA	December 2011	$	475		28,246

K. Hovnanian Enterprises, Inc.	5.00%	Goldman Sachs Bank USA	December 2013	$	925		155,858

Louisiana- Pacific Corp.	5.00%	JPMorgan Chase Bank NA	March 2014	$	500		(106,314	)

Total						$	113,679


•	Credit default swaps on single-name issuers — sold protection outstanding as of August 31, 2010 were as follows:



Issuer	Receive Fixed Rate	Counterparty	Expiration	Credit Rating¹	Notional Amount (000)²		Unrealized Appreciation (Depreciation)

Texas Competitive Electric Holdings Co. LLC	5.00%	Goldman Sachs International	September 2012	CCC	$	475	$	(42,756	)

Realogy Corp.	5.00%	Credit Suisse International	March 2015	C	$	100		699

Realogy Corp.	5.00%	JPMorgan Chase Bank NA	March 2015	C	$	450		(15,573	)

Advanced Micro Devices, Inc.	5.00%	JPMorgan Chase Bank NA	March 2015	B+	$	550		(6,161	)

Levi Strauss & Co.	5.00%	Citibank NA	June 2015	B+	$	360		221

NOVA Chemicals Corp.	5.00%	Goldman Sachs International	June 2015	B+	$	350		(6,416	)

Levi Strauss & Co.	5.00%	Goldman Sachs International	September 2015	B+	$	500		—

Realogy Corp.	5.00%	JPMorgan Chase Bank NA	September 2015	C	$	125		(450	)

Total							$	(70,436	)


		¹	Using Standard & Poor’s rating of the issuer.

		²	The maximum potential amount the Fund may pay should a negative credit take place as defined under the terms of the agreement.

•	For Fund compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

•	Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivatives, which are as follows:

	•	Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

	•	Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

	•	Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivatives)

	The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.


See Notes to Financial Statements.

16	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Schedule of Investments (concluded)	BlackRock Corporate High Yield Fund, Inc. (COY)


The following tables summarize the inputs used as of August 31, 2010 in determining the fair valuation of the Fund’s investments and derivatives:



Valuation Inputs	Level 1		Level 2			Level 3			Total

Assets:
Investments in Securities:
Long-Term Investments:
Common Stocks	$	4,022,995	$	222,335		$	415,993		$	4,661,323
Corporate Bonds		—		230,198,853			5,011,310			235,210,163
Floating Rate Loan Interests		—		22,125,725			11,865,585			33,991,310
Other Interests		—		4,553,557			3,582			4,557,139
Preferred Stocks		2,307,858		—			—			2,307,858
Warrants		—		—			151			151
Short-Term Securities		322,368		—			—			322,368
Liabilities:
Unfunded Loan Commitments		—		—			(21,252	)		(21,252	)

Total	$	6,653,221	$	257,100,470		$	17,275,369		$	281,029,060



Derivative Financial Instruments¹

Valuation Inputs	Level 1		Level 2			Level 3			Total

Assets:
Credit contracts		—	$	220,913			—		$	220,913
Equity contracts	$	108,779		—			—			108,779
Foreign currency exchange contracts		—		4,441			—			4,441
Liabilities:
Credit contracts		—		(177,670	)		—			(177,670	)
Foreign currency exchange contracts		—		(31,655	)		—			(31,655	)

Total	$	108,779	$	16,029			—		$	124,808


	¹	Derivative financial instruments are financial futures contracts, swaps and foreign currency exchange contracts. Financial futures contracts, swaps and foreign currency exchange contracts are valued at the unrealized appreciation/depreciation on the instrument.

The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used in determining fair value:



	Common Stocks			Corporate Bonds			Floating Rate Loan Interests			Other Interests			Warrants			Unfunded Loan Commitments			Total

Assets/Liabilities:
Balance, as of February 28, 2010	$	75,096		$	3,961,360		$	19,218,811		$	4,212,670		$	150		$	(51,643	)	$	27,416,444
Accrued discounts/premiums		—			12,626			79,364			—			—			—			91,990
Net realized gain (loss)		—			5,192			215,474			311,075			22,463			—			554,204
Net change in unrealized appreciation/depreciation²		8,805			(138,594	)		852,238			323,519			1			30,391			1,076,360
Purchases		—			34,239			8,418,054			319,000			—			—			8,771,293
Sales		—			—			(13,176,786	)		(609,125	)		(22,463	)		—			(13,808,374	)
Transfers in³		415,922			1,390,000			917,280			—			—			—			2,723,202
Transfers out³		(83,830	)		(253,513	)		(4,658,850	)		(4,553,557	)		—			—			(9,549,750	)

Balance, as of August 31, 2010	$	415,993		$	5,011,310		$	11,865,585		$	3,582		$	151		$	(21,252	)	$	17,275,369


	²	Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations. The change in the unrealized appreciation/depreciation on the securities still held on August 31, 2010 was $249,870.

	³	The Fund’s policy is to recognize transfers in and transfers out as of the end of the period of the event or the change in circumstances that caused the transfer.


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	17




Schedule of Investments August 31, 2010 (Unaudited)	BlackRock Corporate High Yield Fund III, Inc. (CYE)
	(Percentages shown are based on Net Assets)


Common Stocks	Shares		Value

Building Products — 0.1%
Masonite Worldwide Holdings (a)		5,365	$	203,870

Capital Markets — 0.1%
E*Trade Financial Corp. (a)		29,600		367,336

Chemicals — 0.2%
LyondellBasell Industries NV, Class A (a)		6,388		130,954
LyondellBasell Industries NV, Class B (a)		18,485		378,758
Wellman Holdings, Inc. (a)		1,522		76

				509,788

Commercial Services & Supplies — 0.1%
Air Lease Corp. (a)(b)		12,900		258,000

Communications Equipment — 0.5%
Loral Space & Communications Ltd. (a)		25,022		1,339,678

Construction Materials — 0.0%
Nortek, Inc. (a)		2,145		89,017

Diversified Financial Services — 0.0%
Citigroup, Inc. (a)		1		4

Electrical Equipment — 0.0%
Medis Technologies Ltd. (a)		70,784		2,194

Hotels, Restaurants & Leisure — 0.0%
Buffets Restaurants Holdings, Inc. (a)		1,099		4,616

Household Durables — 0.2%
Beazer Homes USA, Inc. (a)		153,500		531,110

Machinery — 0.2%
Accuride Corp., Restricted Shares (a)		90,983		100,081
Navistar International Corp. (a)		9,400		393,672

				493,753

Media — 0.7%
Charter Communications, Inc. (a)		16,555		562,870
Gannett Co., Inc.		44,700		540,423
Gray Television, Inc. (a)		162,000		299,700
Sinclair Broadcast Group, Inc., Class A (a)		50,000		299,000

				1,701,993

Paper & Forest Products — 0.3%
Ainsworth Lumber Co. Ltd. (a)		122,117		286,297
Ainsworth Lumber Co. Ltd. (a)(b)		140,415		329,195
Western Forest Products, Inc. (a)		158,023		43,716
Western Forest Products, Inc. (a)(b)		45,762		12,660

				671,868


Semiconductors & Semiconductor Equipment — 0.0%
SunPower Corp., Class B (a)		778		8,044

Software — 0.3%
HMH Holdings/EduMedia (a)		90,514		452,570
TiVo, Inc. (a)		26,525		208,487

				661,057

Wireless Telecommunication Services — 0.1%
FiberTower Corp. (a)		76,542		274,786

Total Common Stocks — 2.8%				7,117,114


Corporate Bonds	Par (000)		Value

Aerospace & Defense — 0.4%
Bombardier, Inc., 7.75%, 3/15/20 (b)	USD	200	$	215,000
DynCorp International, Inc., 10.38%, 7/01/17 (b)		230		228,850
Kratos Defense & Security Solutions, Inc., 10.00%, 6/01/17		540		557,550

				1,001,400

Air Freight & Logistics — 0.6%
National Air Cargo Group, Inc.:
Series 1, 12.38%, 8/16/15		755		755,000
Series 2, 12.38%, 8/16/15		755		755,000

				1,510,000

Airlines — 2.9%
Air Canada (b):
9.25%, 8/01/15		1,060		1,038,800
12.00%, 2/01/16		280		261,800
American Airlines, Inc., 10.50%, 10/15/12 (b)		940		998,750
American Airlines Pass Through Trust, Series 2001-02, 7.86%, 4/01/13		400		418,600
Continental Airlines, Inc.:
6.75%, 9/15/15 (b)		630		623,700
Series 1997-4-B, 6.90%, 7/02/18 (c)		522		508,827
Series 2001-1-C, 7.03%, 12/15/12		250		249,236
Delta Air Lines, Inc., Series B, 9.75%, 12/17/16		1,045		1,097,526
United Air Lines, Inc., 12.75%, 7/15/12		2,082		2,320,895

				7,518,134

Auto Components — 1.5%
Allison Transmission, Inc. (b):
11.00%, 11/01/15		230		247,250
11.25%, 11/01/15 (d)		177		190,275
Delphi International Holdings Unsecured, 12.00%, 10/06/14		91		89,282
The Goodyear Tire & Rubber Co.:
8.25%, 8/15/20		440		450,450
8.75%, 8/15/20		250		264,375
Icahn Enterprises LP:
4.00%, 8/15/13 (b)(e)(f)		255		232,050
8.00%, 1/15/18		2,470		2,457,650

				3,931,332

Beverages — 0.1%
Cott Beverages USA, Inc., 8.13%, 9/01/18 (b)		264		271,590
Crown European Holdings SA, 7.13%, 8/15/18 (b)	EUR	245		318,238

				589,828

Biotechnology — 0.2%
QHP Pharma, 10.25%, 3/15/15 (b)	USD	591		602,400

Building Products — 1.5%
Associated Materials LLC, 9.88%, 11/15/16		770		816,200
Building Materials Corp. of America (b):
6.88%, 8/15/18		530		515,425
7.00%, 2/15/20		620		616,900
Momentive Performance Materials, Inc., Series WI, 9.75%, 12/01/14		735		717,544
Ply Gem Industries, Inc., 11.75%, 6/15/13		1,180		1,215,400

				3,881,469

Capital Markets — 0.7%
E*Trade Financial Corp. (e)(g):
3.39%, 8/31/19 (b)		244		292,800
Series A, 3.64%, 8/31/19		7		8,400
MU Finance Plc, 8.75%, 2/01/17 (b)	GBP	422		621,312


See Notes to Financial Statements.

18	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Schedule of Investments (continued)	BlackRock Corporate High Yield Fund III, Inc. (CYE)
	(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value

Capital Markets (concluded)
Marsico Parent Co., LLC, 10.63%, 1/15/16 (b)	USD	963	$	356,310
Marsico Parent Holdco, LLC, 12.50%, 7/15/16 (b)(d)		272		24,452
Marsico Parent Superholdco, LLC, 14.50%, 1/15/18 (b)(d)		289		26,008
Offshore Group Investments Ltd., 11.50%, 8/01/15 (b)		520		518,700

				1,847,982

Chemicals — 3.5%
American Pacific Corp., 9.00%, 2/01/15		880		870,100
CF Industries, Inc.:
6.88%, 5/01/18		440		463,100
7.13%, 5/01/20		780		836,550
Chemtura Corp., 7.88%, 9/01/18 (b)		530		541,262
Georgia Gulf Corp., 9.00%, 1/15/17 (b)		165		170,981
Hexion U.S. Finance Corp.:
9.75%, 11/15/14		790		776,175
8.88%, 2/01/18		765		707,625
Huntsman International LLC (b):
6.88%, 11/15/13		280		349,508
8.63%, 3/15/20		235		232,944
Ineos Finance Plc, 9.00%, 5/15/15 (b)		420		424,725
Innophos, Inc., 8.88%, 8/15/14		825		845,625
MacDermid, Inc., 9.50%, 4/15/17 (b)		1,260		1,277,325
OXEA Finance/Cy SCA, 9.50%, 7/15/17 (b)		555		585,525
Wellman Holdings, Inc., Subordinate Note (e):
(Second Lien), 10.00%, 1/29/19 (b)		844		734,280
(Third Lien), 5.00%, 1/29/19 (d)		276		107,749

				8,923,474

Commercial Banks — 3.1%
CIT Group, Inc.:
7.00%, 5/01/16		3,076		2,922,662
7.00%, 5/01/17		5,170		4,861,488
Glitnir Banki HF (a)(h):
4.15%, 4/20/10 (b)		111		31,635
6.38%, 9/25/12 (b)		500		142,500
Series EMTN, 5.07%, 1/27/10	EUR	50		17,741
Series EMTN, 3.00%, 6/30/10		45		15,967
Series GMTN, 4.38%, 2/05/10		50		17,742

				8,009,735

Commercial Services & Supplies — 1.0%
ACCO Brands Corp., 10.63%, 3/15/15	USD	250		275,000
RSC Equipment Rental, Inc., 10.00%, 7/15/17 (b)		585		637,650
Scientific Games International, Inc., 9.25%, 6/15/19		230		243,800
West Corp., 11.00%, 10/15/16		1,290		1,354,500

				2,510,950

Construction Materials — 1.0%
Nortek, Inc., 11.00%, 12/01/13		2,395		2,523,239

Consumer Finance — 1.0%
Credit Acceptance Corp., 9.13%, 2/01/17 (b)		680		704,650
Ford Motor Credit Co. LLC:
3.28%, 1/13/12 (f)		215		210,700
7.80%, 6/01/12		200		210,468
8.00%, 12/15/16		180		195,468
6.63%, 8/15/17		1,260		1,280,629

				2,601,915


Corporate Bonds	Par (000)		Value

Containers & Packaging — 3.2%
Ball Corp., 6.75%, 9/15/20	USD	525	$	552,562
Berry Plastics Corp.:
8.88%, 9/15/14		810		771,525
8.25%, 11/15/15		135		135,338
9.50%, 5/15/18 (b)		435		400,200
Berry Plastics Holding Corp., 8.88%, 9/15/14		2,470		2,352,675
Graphic Packaging International, Inc., 9.50%, 6/15/17		840		894,600
Impress Holdings BV, 3.65%, 9/15/13 (b)(f)		420		396,900
Owens-Brockway Glass Container, Inc., 6.75%, 12/01/14	EUR	155		198,388
Pregis Corp., 12.38%, 10/15/13	USD	1,200		1,200,000
Smurfit Kappa Acquisitions (b):
7.25%, 11/15/17		495		639,835
7.75%, 11/15/19		470		610,498

				8,152,521

Diversified Consumer Services — 1.2%
Service Corp. International, 7.00%, 6/15/17		3,000		3,105,000

Diversified Financial Services — 6.9%
Ally Financial Inc. (b):
8.30%, 2/12/15		1,990		2,069,600
7.50%, 9/15/20		1,910		1,890,900
Axcan Intermediate Holdings, Inc., 12.75%, 3/01/16		995		996,244
FCE Bank Plc:
7.88%, 2/15/11		700		1,086,973
7.13%, 1/16/12		1,800		2,360,888
7.13%, 1/15/13		1,050		1,377,184
GMAC, Inc.:
7.50%, 12/31/13		280		285,950
2.74%, 12/01/14 (f)		394		338,732
8.00%, 3/15/20 (b)		3,180		3,259,500
Leucadia National Corp., 8.13%, 9/15/15		1,175		1,251,375
Reynolds Group DL Escrow, Inc., 7.75%, 10/15/16 (b)		1,460		1,470,950
Reynolds Group Issuer, Inc. (b):
7.75%, 10/15/16		400		514,499
8.50%, 5/15/18		775		744,000

				17,646,795

Diversified Telecommunication Services — 4.5%
Broadview Networks Holdings, Inc., 11.38%, 9/01/12		1,035		1,014,300
Frontier Communications Corp.:
7.88%, 4/15/15		630		664,650
8.25%, 4/15/17		800		846,000
8.50%, 4/15/20		350		371,438
GCI, Inc., 8.63%, 11/15/19		1,200		1,260,000
ITC Deltacom, Inc., 10.50%, 4/01/16		540		531,900
Nordic Telephone Co. Holdings ApS, 8.88%, 5/01/16 (b)		215		225,750
Qwest Communications International, Inc.:
7.50%, 2/15/14		2,020		2,057,875
8.00%, 10/01/15 (b)		600		645,000
Series B, 7.50%, 2/15/14		1,450		1,477,187
Qwest Corp.:
7.63%, 6/15/15		525		589,312
8.38%, 5/01/16		680		792,200
Windstream Corp.:
8.13%, 8/01/13		460		490,475
7.88%, 11/01/17		630		639,450

				11,605,537


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	19




Schedule of Investments (continued)	BlackRock Corporate High Yield Fund III, Inc. (CYE)
	(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value

Energy Equipment & Services — 1.9%
Compagnie Générale de Géophysique-Veritas:
7.50%, 5/15/15	USD	1,315	$	1,301,850
7.75%, 5/15/17		320		317,600
Expro Finance Luxembourg SCA, 8.50%, 12/15/16 (b)		1,835		1,715,725
Global Geophysical Services, Inc., 10.50%, 5/01/17 (b)		310		306,900
North American Energy Alliance LLC, 10.88%, 6/01/16 (b)		665		718,200
Thermon Industries, Inc., 9.50%, 5/01/17 (b)		555		568,875

				4,929,150

Food & Staples Retailing — 0.9%
AmeriQual Group LLC, 9.50%, 4/01/12 (b)		800		784,000
Rite Aid Corp.:
9.75%, 6/12/16		410		435,625
10.25%, 10/15/19		670		688,425
8.00%, 8/15/20 (b)		530		526,688

				2,434,738

Food Products — 0.5%
B&G Foods, Inc., 7.63%, 1/15/18		220		226,325
Reddy Ice Corp., 11.25%, 3/15/15 (b)		440		446,050
Smithfield Foods, Inc., 10.00%, 7/15/14 (b)		460		513,475
TreeHouse Foods, Inc., 7.75%, 3/01/18		160		169,200

				1,355,050

Health Care Equipment & Supplies — 1.4%
DJO Finance LLC, 10.88%, 11/15/14		2,455		2,629,919
Hologic, Inc., 2.00%, 12/15/37 (e)(i)		955		863,081

				3,493,000

Health Care Providers & Services — 4.9%
American Renal Holdings, 8.38%, 5/15/18 (b)		280		280,000
Gentiva Health Services, Inc., 11.50%, 9/01/18 (b)		710		734,850
HCA, Inc.:
9.13%, 11/15/14		1,785		1,874,250
8.50%, 4/15/19		1,020		1,118,175
7.25%, 9/15/20		2,315		2,419,175
inVentiv Health Inc., 10.00%, 8/15/18 (b)		650		635,375
Omnicare, Inc., 7.75%, 6/01/20		500		500,000
Tenet Healthcare Corp.:
9.00%, 5/01/15		1,799		1,915,935
10.00%, 5/01/18		644		724,500
8.88%, 7/01/19		2,279		2,464,169

				12,666,429

Health Care Technology — 1.1%
IMS Health, Inc., 12.50%, 3/01/18 (b)		2,405		2,786,794

Hotels, Restaurants & Leisure — 2.3%
Diamond Resorts Corp., 12.00%, 8/15/18 (b)		1,190		1,124,550
Enterprise Inns Plc, 6.50%, 12/06/18	GBP	425		537,963
Harrah’s Operating Co., Inc., 11.25%, 6/01/17	USD	660		706,200
Inn of the Mountain Gods Resort & Casino, 12.00%, 11/15/10 (a)(h)		1,550		678,125
Little Traverse Bay Bands of Odawa Indians, 10.25%, 2/15/14 (a)(b)(h)		1,290		435,375
MGM Mirage, 13.00%, 11/15/13		110		127,050
MGM Resorts International:
10.38%, 5/15/14		255		277,950
11.13%, 11/15/17		820		916,350
Marina District Finance Co., Inc., 9.88%, 8/15/18 (b)		370		369,075

Corporate Bonds	Par (000)		Value

Hotels, Restaurants & Leisure (concluded)
Travelport LLC:
5.16%, 9/01/14 (f)	USD	160	$	148,400
9.88%, 9/01/14		210		214,725
Tropicana Entertainment LLC, Series WI, 9.63%, 12/15/14 (a)(h)		305		223
Virgin River Casino Corp., 9.00%, 1/15/12 (a)(h)		940		423,000

				5,958,986

Household Durables — 3.5%
Beazer Homes USA, Inc.:
6.88%, 7/15/15		185		160,025
8.13%, 6/15/16		315		275,625
12.00%, 10/15/17		1,345		1,514,806
9.13%, 6/15/18		1,770		1,566,450
DFS Furniture Holdings Plc, 9.75%, 7/15/17 (b)	GBP	208		299,061
K. Hovnanian Enterprises, Inc., 10.63%, 10/15/16	USD	1,725		1,673,250
Ryland Group Inc., 6.63%, 5/01/20		675		632,812
Standard Pacific Corp.:
9.25%, 4/15/12		135		138,544
6.25%, 4/01/14		365		340,363
7.00%, 8/15/15		265		243,800
10.75%, 9/15/16		1,390		1,462,975
8.38%, 5/15/18		605		582,313

				8,890,024

Independent Power Producers & Energy Traders — 2.8%
The AES Corp., 8.75%, 5/15/13 (b)		450		457,313
Calpine Construction Finance Co. LP, 8.00%, 6/01/16 (b)		1,260		1,323,000
Energy Future Holdings Corp., 10.00%, 1/15/20 (b)		3,395		3,269,395
Energy Future Intermediate Holding Co. LLC, 10.00%, 12/01/20		174		167,211
NRG Energy, Inc.:
7.25%, 2/01/14		1,275		1,300,500
7.38%, 2/01/16		270		272,025
7.38%, 1/15/17		400		403,000

				7,192,444

Industrial Conglomerates — 2.5%
Sequa Corp. (b):
11.75%, 12/01/15		2,340		2,410,200
13.50%, 12/01/15 (d)		3,954		4,112,171

				6,522,371

Insurance — 0.9%
Alliant Holdings I, Inc., 11.00%, 5/01/15 (b)		1,700		1,744,625
USI Holdings Corp., 4.25%, 11/15/14 (b)(f)		680		576,300

				2,320,925

Leisure Equipment & Products — 0.4%
Brunswick Corp., 11.25%, 11/01/16 (b)		795		908,288

Life Sciences Tools & Services — 0.2%
Patheon, Inc., 8.63%, 4/15/17 (b)		585		582,806

Machinery — 1.7%
AGY Holding Corp., 11.00%, 11/15/14		980		833,000
Accuride Corp., 7.50%, 2/26/20 (d)(e)		10		24,627
Navistar International Corp.:
3.00%, 10/15/14 (e)		1,900		2,073,375
8.25%, 11/01/21		1,000		1,047,500
Oshkosh Corp., 8.25%, 3/01/17		140		147,350
Titan International, Inc., 5.63%, 1/15/17 (b)(e)		240		285,600

				4,411,452

Marine — 0.7%
Horizon Lines, Inc., 4.25%, 8/15/12 (e)		2,230		1,873,200


See Notes to Financial Statements.

20	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Schedule of Investments (continued)	BlackRock Corporate High Yield Fund III, Inc. (CYE)
	(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value

Media — 12.7%
Affinion Group, Inc.:
10.13%, 10/15/13	USD	2,445	$	2,506,125
10.13%, 10/15/13		765		782,212
CCH II LLC, 13.50%, 11/30/16		543		643,098
CCO Holdings LLC (b):
7.88%, 4/30/18		470		486,450
8.13%, 4/30/20		470		494,675
CMP Susquehanna Corp., 3.64%, 5/15/14 (b)(f)		160		3,200
CSC Holdings, Inc., 8.50%, 4/15/14		390		426,075
Catalina Marketing Corp., 10.50%, 10/01/15 (b)(d)		610		652,700
Clear Channel Worldwide Holdings, Inc.:
9.25%, 12/15/17		835		866,312
Series B, 9.25%, 12/15/17		4,240		4,446,700
Cox Enterprises, Inc.:
Loan Close 2, 4.00%, 8/15/18		636		635,530
Loan Close 3, 4.00%, 8/15/18		735		735,000
Shares Loan, 4.00%, 8/15/18		749		749,372
DISH DBS Corp., 7.00%, 10/01/13		90		93,713
Gray Television, Inc., 10.50%, 6/29/15		455		437,938
Harland Clarke Holdings Corp.:
6.00%, 5/15/15 (f)		350		294,000
9.50%, 5/15/15		420		400,050
Intelsat Corp., 9.25%, 6/15/16		2,120		2,247,200
Interactive Data Corp., 10.25%, 8/01/18 (b)		1,030		1,068,625
Liberty Global, Inc., 4.50%, 11/15/16 (b)(e)		470		575,750
Liberty Media Corp., 3.13%, 3/30/23 (e)		1,113		1,210,387
Lighthouse International Co. SA:
8.00%, 4/30/14	EUR	546		408,232
8.00%, 4/30/14 (b)		67		50,094
Live Nation Entertainment, Inc., 8.13%, 5/15/18 (b)	USD	650		627,250
McClatchy Co., 11.50%, 2/15/17 (b)		1,395		1,440,337
Nielsen Finance LLC:
11.63%, 2/01/14		180		201,825
10.00%, 8/01/14		2,145		2,252,250
ProtoStar I Ltd., 18.00%, 10/15/12 (a)(b)(e)(h)		850		807,410
Rainbow National Services LLC (b):
8.75%, 9/01/12		440		440,550
10.38%, 9/01/14		1,582		1,641,325
Regal Entertainment Group, 9.13%, 8/15/18		335		343,375
Seat Pagine Gialle SpA, 10.50%, 1/31/17 (b)	EUR	136		160,282
TL Acquisitions, Inc., 10.50%, 1/15/15 (b)	USD	1,330		1,270,150
UPC Germany GmbH (b):
8.13%, 12/01/17		755		775,762
8.13%, 12/01/17	EUR	441		570,035
9.63%, 12/01/19		570		756,644
UPC Holding BV, 9.88%, 4/15/18 (b)	USD	500		520,625
Unitymedia GmbH, 9.63%, 12/01/19	EUR	168		223,011
Ziggo Bond Co. BV, 8.00%, 5/15/18 (b)		388		499,069

				32,743,338

Metals & Mining — 4.0%
AK Steel Corp., 7.63%, 5/15/20	USD	20		20,150
Aleris International, Inc. (a)(h):
9.00%, 12/15/14		1,035		2,070
10.00%, 12/15/16		800		304
Drummond Co., Inc.:
9.00%, 10/15/14 (b)		875		915,469
7.38%, 2/15/16		225		225,281
FMG Finance Property Ltd. (b):
10.00%, 9/01/13		535		589,169
10.63%, 9/01/16		1,180		1,367,325
Foundation PA Coal Co., 7.25%, 8/01/14		1,975		1,979,937
GoldCorp, Inc., 2.00%, 8/01/14 (e)		665		808,806
McJunkin Red Man Corp., 9.50%, 12/15/16 (b)		605		533,913
Murray Energy Corp., 10.25%, 10/15/15 (b)		520		531,700

Corporate Bonds	Par (000)		Value

Metals & Mining (concluded)
New World Resources NV:
7.38%, 5/15/15	EUR	255	$	316,686
7.88%, 5/01/18		190		243,185
7.88%, 5/01/18 (b)		210		268,784
Novelis, Inc., 11.50%, 2/15/15	USD	430		473,000
Ryerson, Inc.:
7.84%, 11/01/14 (f)		400		371,000
12.00%, 11/01/15		265		272,619
Steel Dynamics, Inc., 7.38%, 11/01/12		260		276,250
United States Steel Corp., 7.38%, 4/01/20		520		526,500
Vedanta Resources Plc, 9.50%, 7/18/18 (b)		640		672,000

				10,394,148

Multiline Retail — 2.5%
Dollar General Corp.:
10.63%, 7/15/15		1,393		1,528,817
11.88%, 7/15/17 (d)		4,351		5,003,650

				6,532,467

Oil, Gas & Consumable Fuels — 8.3%
Arch Coal, Inc.:
8.75%, 8/01/16		55		59,538
7.25%, 10/01/20		855		867,825
Atlas Energy Operating Co. LLC:
12.13%, 8/01/17		500		574,375
10.75%, 2/01/18		260		286,650
Berry Petroleum Co., 8.25%, 11/01/16		510		515,100
Bill Barrett Corp., 9.88%, 7/15/16		45		48,825
Chesapeake Energy Corp.:
6.63%, 8/15/20		2,360		2,368,850
2.25%, 12/15/38 (e)		800		599,000
Coffeyville Resources LLC, 9.00%, 4/01/15 (b)		295		303,113
Connacher Oil and Gas Ltd. (b):
11.75%, 7/15/14		175		189,875
10.25%, 12/15/15		1,145		1,145,000
Consol Energy, Inc., 8.25%, 4/01/20 (b)		1,990		2,111,887
Crosstex Energy LP, 8.88%, 2/15/18		405		418,163
Denbury Resources, Inc., 8.25%, 2/15/20		737		786,747
Linn Energy LLC, 8.63%, 4/15/20 (b)		1,100		1,160,500
Massey Energy Co., 6.88%, 12/15/13		945		956,812
Niska Gas Storage US LLC, 8.88%, 3/15/18 (b)		1,870		1,968,175
OPTI Canada, Inc. (b):
9.00%, 12/15/12		1,735		1,739,337
9.75%, 8/15/13		975		962,812
Patriot Coal Corp., 8.25%, 4/30/18		420		416,850
Peabody Energy Corp., 6.50%, 9/15/20		1,100		1,156,375
Petrohawk Energy Corp.:
10.50%, 8/01/14		555		620,213
7.88%, 6/01/15		460		477,250
QEP Resources, Inc., 6.88%, 3/01/21		450		469,125
Range Resources Corp., 8.00%, 5/15/19		400		428,000
Teekay Corp., 8.50%, 1/15/20		660		704,550

				21,334,947

Paper & Forest Products — 2.9%
Ainsworth Lumber Co. Ltd., 11.00%, 7/29/15 (b)(d)		1,134		969,671
Boise Paper Holdings LLC:
9.00%, 11/01/17		330		347,325
8.00%, 4/01/20		165		167,888
Clearwater Paper Corp., 10.63%, 6/15/16		390		438,750
Georgia-Pacific LLC, 8.25%, 5/01/16 (b)		1,600		1,752,000
Glatfelter, 7.13%, 5/01/16 (b)		210		211,312
NewPage Corp., 11.38%, 12/31/14		3,150		2,559,375
Verso Paper Holdings LLC, 11.50%, 7/01/14		840		886,200

				7,332,521


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	21




Schedule of Investments (continued)	BlackRock Corporate High Yield Fund III, Inc. (CYE)
	(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)			Value

Pharmaceuticals — 0.6%
Angiotech Pharmaceuticals, Inc., 4.29%, 12/01/13 (f)	USD	1,050	$	847,875
Elan Finance Plc, 8.88%, 12/01/13		105		105,787
Novasep Holding SAS, 9.63%, 12/15/16 (b)	EUR	630		670,629

				1,624,291

Real Estate Management & Development — 0.5%
Forest City Enterprises, Inc., 7.63%, 6/01/15	USD	1,425		1,300,313

Road & Rail — 0.9%
Avis Budget Car Rental LLC, 9.63%, 3/15/18		510		532,950
Hertz Holdings Netherlands BV, 8.50%, 7/31/15 (b)	EUR	710		935,738
Syncreon Global Ireland Ltd., 9.50%, 5/01/18 (b)	USD	820		801,550

				2,270,238

Semiconductors & Semiconductor Equipment — 0.2%
Advanced Micro Devices, Inc.:
6.00%, 5/01/15 (e)		138		135,068
7.75%, 8/01/20 (b)		285		282,150

				417,218

Software — 0.0%
BMS Holdings, Inc., 8.59%, 2/15/12 (b)(d)(f)		477		9,542

Specialty Retail — 1.6%
Group 1 Automotive, Inc., 2.25%, 6/15/36 (e)(i)		1,055		803,119
Hillman Group, Inc., 10.88%, 6/01/18 (b)		530		557,825
Ltd. Brands, Inc., 8.50%, 6/15/19		785		887,050
Sonic Automotive, Inc., 9.00%, 3/15/18		370		376,475
Toys ‘R’ Us-Delaware, Inc., 7.38%, 9/01/16 (b)		420		424,200
United Auto Group, Inc., 7.75%, 12/15/16		1,025		978,875

				4,027,544

Textiles, Apparel & Luxury Goods — 0.2%
Quiksilver, Inc., 6.88%, 4/15/15		530		490,250

Tobacco — 0.1%
Vector Group Ltd., 11.00%, 8/15/15		325		331,094

Wireless Telecommunication Services — 4.9%
Cricket Communications, Inc.:
10.00%, 7/15/15		1,890		1,979,775
7.75%, 5/15/16		220		227,150
Digicel Group Ltd. (b):
8.88%, 1/15/15		700		705,250
9.13%, 1/15/15 (d)		1,783		1,791,915
8.25%, 9/01/17		870		903,712
10.50%, 4/15/18		500		536,250
FiberTower Corp., 9.00%, 1/01/16 (d)		293		249,068
iPCS, Inc., 2.59%, 5/01/13 (f)		815		762,025
MetroPCS Wireless, Inc., 9.25%, 11/01/14		2,405		2,501,200
Nextel Communications, Inc.:
Series E, 6.88%, 10/31/13		1,170		1,167,075
Series F, 5.95%, 3/15/14		110		106,288
Orascom Telecom Finance SCA, 7.88%, 2/08/14 (b)		275		261,250
Sprint Capital Corp., 6.88%, 11/15/28		1,790		1,494,650

				12,685,608

Total Corporate Bonds — 98.4%				253,780,887




Floating Rate Loan Interests (f)

Auto Components — 1.0%
Affinion Group Holdings, Inc., Term Loan, 8.51%, 3/01/12 (d)		455		436,988
Allison Transmission, Inc., Term Loan, 3.04%, 8/07/14		2,213		2,039,026

				2,476,014


Floating Rate Loan Interests (f)	Par (000)			Value

Automobiles — 1.3%
Ford Motor Co., Tranche B-1 Term Loan, 3.03%, 12/15/13	USD	3,592	$	3,455,826

Building Products — 1.3%
CPG International I, Inc., Term Loan, 5.54%, 2/28/11		3,234		3,233,668

Capital Markets — 0.1%
Marsico Parent Co., LLC, Term Loan, 5.31% – 5.56%, 12/15/14		377		261,514

Chemicals — 0.1%
PQ Corp. (FKA Niagara Acquisition, Inc.), Term Loan (First Lien), 3.52% – 3.73%, 7/30/14		376		343,728

Commercial Services & Supplies — 0.9%
AWAS Finance Luxembourg Sarl, Term Loan, 7.75%, 6/10/16		1,000		1,005,833
Delos Aircraft, Inc., Term Loan 2, 7.00%, 3/17/16		550		552,979
International Lease Finance Corp., Term Loan 1, 6.75%, 3/17/15		750		755,938

				2,314,750

Construction & Engineering — 0.8%
Safway Services, LLC, Last Out Tranche Loan, 15.63%, 12/14/17		2,000		2,000,000

Consumer Finance — 1.7%
American General Finance Corp., Term Loan, 7.25%, 4/21/15		4,250		4,199,531
DaimlerChrysler Financial Services Americas LLC, Term Loan (Second Lien), 6.78%, 8/05/13		250		249,113

				4,448,644

Diversified Telecommunication Services — 1.7%
Wind Finance SL SA, Euro Facility (Second Lien), 7.89%, 12/17/14	EUR	3,460		4,375,781

Electric Utilities — 0.5%
New Development Holdings, LLC, Term Loan, 7.00%, 7/03/17	USD	1,350		1,363,500

Health Care Providers & Services — 0.7%
Harden Healthcare LLC:
Add-on Term Loan, 7.75%, 3/02/15		525		514,500
Tranche A Term Loan, 8.50%, 2/22/15		495		485,545
inVentiv Health, Inc. (FKA Ventive Health, Inc.), Term Loan B, 6.50%, 7/31/16		900		898,313

				1,898,358

Hotels, Restaurants & Leisure — 1.2%
Travelport LLC (FKA Travelport, Inc.), Loan, 8.37%, 3/27/12 (d)		3,334		3,100,402

IT Services — 0.4%
First Data Corp.:
Initial Tranche B-1 Term Loan, 3.01%, 9/24/14		284		242,384
Initial Tranche B-2 Term Loan, 3.01%, 9/24/14		408		348,130
Initial Tranche B-3 Term Loan, 3.01%, 9/24/14		595		507,148

				1,097,662

Independent Power Producers & Energy Traders — 1.0%
Texas Competitive Electric Holdings Co., LLC (TXU):
Initial Tranche B-1 Term Loan, 3.79% – 4.03%, 10/10/14		215		162,909
Initial Tranche B-2 Term Loan, 3.79% – 4.07%, 10/10/14		255		193,115
Initial Tranche B-3 Term Loan, 3.79% – 4.03%, 10/10/14		2,807		2,115,640

				2,471,664

Media — 1.6%
Cengage Learning Acquisitions, Inc. (Thomson Learning), Tranche 1 Incremental Term Loan, 7.50%, 7/03/14		1,715		1,709,284
HMH Publishing Co., Ltd., Tranche A Term Loan, 5.79%, 6/12/14 (d)		958		872,304


See Notes to Financial Statements.

22	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Schedule of Investments (continued)	BlackRock Corporate High Yield Fund III, Inc. (CYE)
	(Percentages shown are based on Net Assets)


Floating Rate Loan Interests (f)	Par (000)				Value

Media (concluded)
Newsday, LLC, Fixed Rate Term Loan, 10.50%, 8/01/13	USD	1,325		$	1,406,156
Protostar Ltd., Debtor in Possession Term Loan, 18.00%, 10/26/10 (d)		159			158,820

					4,146,564

Multiline Retail — 0.1%
The Neiman Marcus Group, Inc., Term Loan, 2.30%, 4/06/13		244			231,433

Oil, Gas & Consumable Fuels — 1.3%
Tronox Worldwide LLC:
Tranche B-1 Term Loan, 11.25%, 9/20/10		1,261			1,271,424
Tranche B-2 Term Loan, 11.25%, 9/20/10		339			341,576
Turbo Beta Ltd., Dollar Facility, 14.50%, 3/15/18 (d)		2,322			1,839,899

					3,452,899

Paper & Forest Products — 0.3%
Verso Paper Finance Holdings LLC, PIK Loan, 6.69% – 7.44%, 2/01/13 (d)		1,340			804,059

Real Estate Management & Development — 0.6%
Realogy Corp.:
Initial Term Loan B, 3.30% – 3.53%, 10/10/13		398			343,264
Synthetic Letter of Credit, 0.11%, 10/10/13		81			70,156
Second Lien Term Facility, 13.50%, 10/15/17		1,000			1,055,000

					1,468,420

Specialty Retail — 0.2%
Claire’s Stores, Inc., Term Loan B, 3.01% – 3.23%, 5/29/14		137			117,564
Michaels Stores, Inc., Term Loan B-1, 2.63% – 2.81%, 10/31/13		355			334,433

					451,997

Wireless Telecommunication Services — 0.7%
Vodafone Americas Finance 2 Inc., Initial Loan, 6.88%, 7/30/15		1,750			1,750,000

Total Floating Rate Loan Interests — 17.5%					45,146,883




Other Interests (j)		Beneficial Interest (000)

Auto Components — 2.0%
Delphi Debtor-in-Possession Holding Co. LLP Class B Membership Interests		—	(k)		5,037,660
Lear Corp. Escrow		460			5,750

					5,043,410

Hotels, Restaurants & Leisure — 0.0%
Buffets, Inc.		575			58

Media — 0.0%
Adelphia Escrow		750			75
Adelphia Recovery Trust		941			3,762

					3,837

Total Other Interests — 2.0%					5,047,305




Preferred Stocks	Shares

Auto Components — 0.1%
Dana Holding Corp., 4.00% (b)(e)		2,200			210,100

Diversified Financial Services — 1.5%
Ally Financial Inc., 7.00% (b)		3,245			2,680,472
Citigroup, Inc., 7.50% (e)		11,000			1,258,950

					3,939,422


Preferred Stocks	Shares			Value

Household Durables — 0.1%
Beazer Homes USA, Inc., 7.50% (e)		10,132		$	200,715

Media — 0.2%
CMP Susquehanna Radio Holdings Corp. (a)(b)(f)		37,314			—
TRA Global, Inc. (a)		286,652			463,144

					463,144

Real Estate Investment Trusts (REITs) — 0.0%
MPG Office Trust, Inc., Series A, 7.63% (a)		8,994			97,045

Thrifts & Mortgage Finance — 0.0%
Fannie Mae, Series O (a)		30,000			12,300
Freddie Mac, Series Z (a)		75,961			25,067

					37,367

Total Preferred Stocks — 1.9%					4,947,793




Warrants (l)


Containers & Packaging — 0.0%
MDP Acquisitions Plc (Expires 10/01/13)		700			31,460

Health Care Providers & Services — 0.0%
HealthSouth Corp. (Expires 1/16/14)		32,042			—

Hotels, Restaurants & Leisure — 0.0%
Buffets Restaurants Holdings, Inc. (Expires 4/29/14)		485			5

Media — 0.0%
CMP Susquehanna Radio Holdings Corp. (Expires 3/26/19) (b)		42,640			1
New Vision Holdings LLC (Expires 9/30/14)		22,447			224

					225


Oil, Gas & Consumable Fuels — 0.0%
Turbo Cayman Ltd. (No Expiration)		1			—

Software — 0.0%
HMH Holdings/EduMedia (Expires 3/09/17)		11,225			—

Total Warrants — 0.0%					31,690

Total Long-Term Investments (Cost — $321,408,636) — 122.6%					316,071,672




Short-Term Securities

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.24% (m)(n)		2,569,493			2,569,493

Total Short-Term Securities (Cost — $2,569,493) — 1.0%					2,569,493




Options Purchased	Contracts

Over-the-Counter Call Options — 0.0%
Marsico Parent Superholdco LLC, Strike Price USD 942.86, expires 12/21/19, Broker Goldman Sachs Bank USA		19			—

Total Options Purchased (Cost — $18,578) — 0.0%					—

*Total Investments (Cost — $323,996,707) — 123.6%**					318,641,165

Liabilities in Excess of Other Assets — (23.6)%					(60,886,126	)

Net Assets — 100.0%				$	257,755,039


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	23




Schedule of Investments (continued)	BlackRock Corporate High Yield Fund III, Inc. (CYE)


*	The cost and unrealized appreciation (depreciation) of investments as of August 31, 2010, as computed for federal income tax purposes, were as follows:

	Aggregate cost	$	325,170,052

	Gross unrealized appreciation	$	15,013,408
	Gross unrealized depreciation		(21,542,295	)

	Net unrealized depreciation	$	(6,528,887	)


(a)	Non-income producing security.

(b)	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.

(c)	All or a portion of security has been pledged as collateral in connection with swaps.

(d)	Represents a payment-in-kind security which may pay interest/dividends in additional face/shares.

(e)	Convertible security.

(f)	Variable rate security. Rate shown is as of report date.

(g)	Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

(h)	Issuer filed for bankruptcy and/or is in default of interest payments.

(i)	Represents a step-down bond that pays an initial coupon rate for the first period and then a lower coupon rate for the following periods. Rate shown is as of report date.

(j)	Other interests represent beneficial interest in liquidation trusts and other reorganization entities and are non-income producing.

(k)	Amount is less than $1,000.

(l)	Warrants entitle the Fund to purchase a predetermined number of shares of common stock and are non-income producing. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date, if any.

(m)	Investments in companies considered to be an affiliate of the Fund during the period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:



Affiliate	Shares Held at February 28, 2010	Net Activity		Shares Held at August 31, 2010	Income

BlackRock Liquidity Funds, TempFund, Institutional Class	3,276,755	(707,262	)	2,569,493	$	1,690


(n)	Represents the current yield as of report date.

•	Foreign currency exchange contracts as of August 31, 2010 were as follows:



Currency Purchased		Currency Sold		Counterparty	Settlement Date	Unrealized Appreciation (Depreciation)

EUR	784,300	USD	1,007,943	Citibank NA	9/15/10	$	(14,059	)
USD	16,913,617	EUR	13,357,500	Citibank NA	9/15/10		(13,317	)
USD	315,687	EUR	245,000	Deutsche Bank AG	9/15/10		5,218
GBP	238,000	USD	371,268	UBS AG	10/20/10		(6,387	)
USD	2,211,164	GBP	1,448,500	Citibank NA	10/20/10		(9,553	)
USD	425,230	CAD	449,000	Deutsche Bank AG	10/20/10		4,505
USD	316,702	GBP	207,500	Deutsche Bank AG	10/20/10		(1,420	)
USD	342,197	GBP	222,000	Royal Bank of Scotland	10/20/10		1,845

Total						$	(33,168	)

•

Financial futures contracts sold as of August 31, 2010 were as follows:

Contracts

Issue

Exchange

Expiration
Date

Notional
Value

Unrealized
Appreciation

S&P 500
Index

Chicago
Mercantile

September
2010

7,189,857

113,832


•	Credit default swaps on single-name issuers — buy protection outstanding as of August 31, 2010 were as follows:


	Issuer	Pay Fixed Rate		Counterparty	Expiration	Notional Amount (000)		Unrealized Appreciation (Depreciation)

	K. Hovnanian	5.00	%	Goldman Sachs	December	$	510	$	30,327
	Enterprises, Inc.			International	2011

	K. Hovnanian	5.00	%	Goldman Sachs	December	$	1,000		168,495
	Enterprises, Inc.			Bank USA	2013

	Louisiana-	5.00	%	JPMorgan	March 2014	$	500		(106,314	)
	Pacific Corp.			Chase Bank NA

	Brunswick Corp.	5.00	%	Goldman Sachs	September	$	200		(10,541	)
				Bank USA	2014

	Total							$	81,967


•	Credit default swaps on single-name issuers — sold protection outstanding as of August 31, 2010 were as follows:


	Issuer	Receive Fixed Rate		Counterparty	Expiration	Credit Rating¹	Notional Amount (000)²		Unrealized Appreciation (Depreciation)

	Texas Competitive	5.00	%	Goldman Sachs	September	CCC	$	500	$	(45,006	)
	Electric Holdings			International	2012
	Co., LLC

	Realogy Corp.	5.00	%	Credit Suisse	March 2015	C	$	100		699
				International

	Advanced	5.00	%	JPMorgan	March 2015	B+	$	600		(6,721	)
	Micro Devices,			Chase Bank NA
	Inc.

	Realogy Corp.	5.00	%	JPMorgan	March 2015	C	$	475		(16,004	)
				Chase Bank NA

	Levi	5.00	%	Goldman Sachs	June 2015	B+	$	235		1,254
	Strauss & Co.			International

	NOVA	5.00	%	Goldman Sachs	June 2015	B+	$	375		(6,874	)
	Chemicals Corp.			International

	Levi	5.00	%	Goldman Sachs	September	B+	$	560		—
	Strauss & Co.			International	2015

	Realogy Corp.	5.00	%	JPMorgan	September	C	$	125		(450	)
				Chase Bank NA	2015

	Total								$	(73,102	)


	¹	Using S&P’s rating of the issuer.

	²	The maximum potential amount the Fund may pay should a negative event take place as defined under the terms of agreement.

•	For Fund compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

•	Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivatives, which are as follows:

	•	Level 1 — price quotations in active markets/exchanges for identical assets and liabilities


See Notes to Financial Statements.

24	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Schedule of Investments (concluded)	BlackRock Corporate High Yield Fund III, Inc. (CYE)


•	Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

•	Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivatives)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the inputs used as of August 31, 2010 in determining the fair valuation of the Fund’s investments and derivatives:



Valuation Inputs	Level 1		Level 2			Level 3			Total

Assets:
Investments in Securities:
Long-Term Investments:
Common Stocks	$	5,977,192	$	687,276		$	452,646		$	7,117,114
Corporate Bonds		—		248,391,323			5,389,564			253,780,887
Floating Rate Loan Interests		—		31,243,970			13,902,913			45,146,883
Other Interests		—		5,037,660			9,645			5,047,305
Preferred Stocks		4,274,549		210,100			463,144			4,947,793
Warrants		—		—			31,690			31,690
Short-Term Securities		2,569,493		—			—			2,569,493
Liabilities:
Unfunded loan commitments		—		—			(47,602	)		(47,602	)

Total	$	12,821,234	$	285,570,329		$	20,202,000		$	318,593,563



	Derivative Financial Instruments¹

Valuation Inputs	Level 1		Level 2			Level 3			Total

Assets:
Credit contracts		—	$	200,775			—		$	200,775
Equity contracts	$	113,832		—			—			113,832
Foreign currency exchange contracts		—		11,568			—			11,568
Liabilities:
Credit contracts		—		(191,910	)		—			(191,910	)
Foreign currency exchange contracts		—		(44,736	)		—			(44,736	)

Total	$	113,832	$	(24,303	)		—		$	89,529


	¹	Derivative financial instruments are financial futures contracts, swaps and foreign currency exchange contracts. Financial futures contracts, swaps and foreign currency exchange contracts are valued at the unrealized appreciation/depreciation on the instrument.

The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used in determining fair value:



	Common Stocks			Corporate Bonds			Floating Rate Loan Interests			Other Interests			Preferred Stocks		Warrants			Unfunded Loan Commitments			Total

Assets/Liabilities:
Balance, as of February 28, 2010	$	79,746		$	4,246,019		$	21,135,986		$	4,699,133		$	1	$	230		$	(115,579	)	$	30,045,536
Accrued discounts/premiums		—			13,176			122,051			—			—		—			—			135,227
Net realized gain (loss)		—			9,735			272,814			349,894			—		25,669			—			658,112
Net change in unrealized appreciation/depreciation²		9,348			(153,725	)		313,212			358,728			—		—			67,977			595,540
Purchases		—			35,613			741,716			319,000			—		—			—			1,096,329
Sales		—			—			(6,741,723	)		(685,200	)		—		(25,669	)		—			(7,452,592	)
Transfers in³		452,570			1,510,000			2,999,158			5,750			463,143		31,460			—			5,462,081
Transfers out³		(89,018	)		(271,254	)		(4,940,301	)		(5,037,660	)		—		—			—			(10,338,233	)

Balance, as of August 31, 2010	$	452,646		$	5,389,564		$	13,902,913		$	9,645		$	463,144	$	31,690		$	(47,602	)	$	20,202,000


	²	Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations. The change in the unrealized appreciation/depreciation on the securities still held on August 31, 2010 was $110,767.

	³	The Fund’s policy is to recognize transfers in and out as of the end of the period of the event or the change in circumstances that caused the transfer.


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	25




Schedule of Investments August 31, 2010 (Unaudited)	BlackRock Debt Strategies Fund, Inc. (DSU)
	(Percentages shown are based on Net Assets)


Common Stocks (a)	Shares		Value

Building Products — 0.3%
Masonite Worldwide Holdings		32,730	$	1,243,740

Chemicals — 0.2%
GEO Specialty Chemicals, Inc.		339,340		130,273
LyondellBasell Industries NV, Class A		9,898		202,909
LyondellBasell Industries NV, Class B		31,315		641,644
Wellman Holdings, Inc.		5,373		269

				975,095

Construction Materials — 0.0%
Nortek, Inc.		2,970		123,255

Containers & Packaging — 1.7%
Smurfit Kappa Plc		36,342		317,776
Viskase Cos., Inc.		1,428,423		6,770,725

				7,088,501

Electrical Equipment — 0.0%
Medis Technologies Ltd.		286,757		8,889

Hotels, Restaurants & Leisure — 0.0%
Buffets Restaurants Holdings, Inc.		2,753		11,563
HRP Corp., Class B (b)(c)		5,000		50

				11,613

Metals & Mining — 0.2%
Euramax International		2,337		771,309

Paper & Forest Products — 1.3%
Ainsworth Lumber Co. Ltd.		1,095,719		2,568,854
Ainsworth Lumber Co. Ltd. (b)		1,335,501		3,131,010
Western Forest Products, Inc. (b)		211,149		58,413

				5,758,277

Semiconductors & Semiconductor
Equipment — 0.0%
SunPower Corp., Class B		4,892		50,583

Software — 0.2%
HMH Holdings/EduMedia		161,041		805,207

Specialty Retail — 0.0%
Movie Gallery, Inc.		503,737		604

Total Common Stocks — 3.9%				16,837,073




Corporate Bonds	Par (000)

Aerospace & Defense — 1.2%
Bombardier, Inc., 7.75%, 3/15/20 (b)	USD	1,750	1,881,250
Kratos Defense & Security Solutions, Inc., 10.00%, 6/01/17		1,160	1,197,700
TransDigm, Inc., 7.75%, 7/15/14		2,000	2,060,000

			5,138,950

Airlines — 0.7%
Air Canada, 9.25%, 8/01/15 (b)		1,250	1,225,000
Delta Air Lines, Inc., Series B, 9.75%, 12/17/16		950	997,751
United Air Lines, Inc., 12.75%, 7/15/12		793	884,150

			3,106,901

Auto Components — 1.3%
The Goodyear Tire & Rubber Co., 8.75%, 8/15/20		130	137,475
Icahn Enterprises LP:
7.75%, 1/15/16		320	317,600
8.00%, 1/15/18		5,260	5,233,700
Venture Holdings Co. LLC (a)(d)(e):
12.00%, 6/01/09		4,450	—
Series B, 9.50%, 7/01/05		1,800	180

			5,688,955


Corporate Bonds	Par (000)		Value

Beverages — 0.1%
Crown European Holdings SA, 7.13%, 8/15/18 (b)	EUR	410	$	532,562

Biotechnology — 0.1%
QHP Pharma, 10.25%, 3/15/15 (b)	USD	491		500,586

Building Products — 2.5%
Building Materials Corp. of America, 7.00%, 2/15/20 (b)		1,300		1,293,500
CPG International I, Inc.:
7.50%, 7/01/12 (f)		7,500		7,246,875
10.50%, 7/01/13		1,300		1,298,375
Momentive Performance Materials, Inc., Series WI, 9.75%, 12/01/14		105		102,506
Ply Gem Industries, Inc., 11.75%, 6/15/13		1,050		1,081,500

				11,022,756

Capital Markets — 0.4%
E*Trade Financial Corp., 4.01%, 8/31/19 (b)(g)(h)		593		711,600
MU Finance Plc, 8.75%, 2/01/17 (b)	GBP	698		1,027,667

				1,739,267

Chemicals — 3.0%
American Pacific Corp., 9.00%, 2/01/15	USD	1,490		1,473,237
CF Industries, Inc., 6.88%, 5/01/18		1,475		1,552,437
GEO Specialty Chemicals, Inc. (b):
7.50%, 3/31/15 (c)(g)		4,171		2,711,012
10.00%, 3/31/15		4,106		2,668,640
Hexion U.S. Finance Corp.:
9.75%, 11/15/14		585		574,763
8.88%, 2/01/18		455		420,875
OXEA Finance/Cy SCA, 9.50%, 7/15/17 (b)		465		490,575
Wellman Holdings, Inc., Subordinate Note (g):
(Second Lien), 10.00%, 1/29/19 (b)		2,978		2,590,860
(Third Lien), 5.00%, 1/29/19 (c)		978		381,332

				12,863,731

Commercial Banks — 2.2%
CIT Group, Inc.:
7.00%, 5/01/16		1,615		1,534,250
7.00%, 5/01/17		7,820		7,353,240
Glitnir Banki HF (a)(d):
4.15%, 4/20/10 (b)		184		52,440
6.38%, 9/25/12 (b)		1,115		317,775
Series EMTN, 5.07%, 1/27/10	EUR	50		17,741
Series EMTN, 3.00%, 6/30/10		75		26,612
Series GMTN, 4.38%, 2/05/10		85		30,161

				9,332,219

Commercial Services & Supplies — 1.0%
ACCO Brands Corp., 10.63%, 3/15/15	USD	660		726,000
Clean Harbors, Inc., 7.63%, 8/15/16		1,200		1,230,000
The Geo Group, Inc., 7.75%, 10/15/17 (b)		850		875,500
RSC Equipment Rental, Inc., 10.00%, 7/15/17 (b)		970		1,057,300
West Corp., 9.50%, 10/15/14		340		346,800

				4,235,600

Construction Materials — 0.7%
Nortek, Inc., 11.00%, 12/01/13		2,983		3,143,546

Consumer Finance — 1.1%
Credit Acceptance Corp., 9.13%, 2/01/17 (b)		570		590,662
Ford Motor Credit Co. LLC:
3.28%, 1/13/12 (f)		2,680		2,626,400
6.63%, 8/15/17		900		914,735
Inmarsat Finance Plc, 7.38%, 12/01/17 (b)		725		743,125

				4,874,922


See Notes to Financial Statements.

26	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Schedule of Investments (continued)	BlackRock Debt Strategies Fund, Inc. (DSU)
	(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value

Containers & Packaging — 2.7%
Ball Corp., 6.75%, 9/15/20	USD	625	$	657,813
Berry Plastics Corp.:
8.25%, 11/15/15		2,100		2,105,250
9.50%, 5/15/18 (b)		895		823,400
Berry Plastics Holding Corp., 8.88%, 9/15/14		470		447,675
Beverage Packaging Holdings Luxembourg II SA, 8.00%, 12/15/16	EUR	260		312,187
Crown Americas LLC, 7.63%, 5/15/17 (b)	USD	710		757,925
Graphic Packaging International, Inc., 9.50%, 6/15/17		975		1,038,375
Smurfit Kappa Acquisitions (b):
7.25%, 11/15/17	EUR	830		1,072,854
7.75%, 11/15/19		785		1,019,661
Smurfit Kappa Funding Plc, 7.75%, 4/01/15	USD	3,325		3,325,000

				11,560,140

Diversified Financial Services — 4.4%
Ally Financial, Inc.:
8.30%, 2/12/15 (b)		1,700		1,768,000
7.50%, 9/15/20 (b)		5,450		5,395,500
8.00%, 11/01/31		1,350		1,329,750
Archimedes Funding III Ltd., 5.50%, 11/29/11 (b)		3,734		2,240,208
Axcan Intermediate Holdings, Inc., 12.75%, 3/01/16		705		705,881
FCE Bank Plc, 7.13%, 1/16/12	EUR	3,250		4,262,714
GMAC, Inc.:
5.38%, 6/06/11		436		551,140
7.50%, 12/31/13	USD	90		91,913
8.00%, 3/15/20 (b)		200		205,000
Preferred Term Securities VI, Ltd. (a)(b)(g)		35		1,750
Reynolds Group DL Escrow, Inc., 7.75%, 10/15/16 (b)		1,625		1,637,187
Reynolds Group Issuer, Inc., 7.75%, 10/15/16 (b)	EUR	650		836,060

				19,025,103

Diversified Telecommunication Services — 2.5%
Frontier Communications Corp., 8.25%, 4/15/17	USD	2,915		3,082,613
ITC Deltacom, Inc., 10.50%, 4/01/16		1,750		1,723,750
Nordic Telephone Co. Holdings ApS, 8.88%, 5/01/16 (b)		390		409,500
Qwest Corp., 8.38%, 5/01/16		4,000		4,660,000
tw telecom holdings, Inc., 8.00%, 3/01/18		920		956,800

				10,832,663

Electronic Equipment, Instruments & Components — 0.0%
Muzak Holdings, LLC, 13.00%, 3/15/10 (a)(d)		2,675		268

Energy Equipment & Services — 0.9%
Compagnie Générale de Géophysique-Veritas, 7.50%, 5/15/15		1,845		1,826,550
Expro Finance Luxembourg SCA, 8.50%, 12/15/16 (b)		2,000		1,870,000

				3,696,550

Food & Staples Retailing — 0.4%
Rite Aid Corp., 9.75%, 6/12/16		1,590		1,689,375

Food Products — 0.6%
B&G Foods, Inc., 7.63%, 1/15/18		900		925,875
Bumble Bee Foods LLC, 7.75%, 12/15/15 (b)		730		771,975
Smithfield Foods, Inc., 10.00%, 7/15/14 (b)		940		1,049,275

				2,747,125

Health Care Equipment & Supplies — 0.3%
DJO Finance LLC, 10.88%, 11/15/14		1,345		1,440,831


Corporate Bonds	Par (000)		Value

Health Care Providers & Services — 1.2%
American Renal Holdings, 8.38%, 5/15/18 (b)	USD	470	$	470,000
inVentiv Health, Inc., 10.00%, 8/15/18 (b)		405		395,888
Tenet Healthcare Corp.:
9.00%, 5/01/15		680		724,200
8.88%, 7/01/19		3,280		3,546,500

				5,136,588

Health Care Technology — 0.8%
IMS Health, Inc., 12.50%, 3/01/18 (b)		2,980		3,453,075

Hotels, Restaurants & Leisure — 1.4%
Diamond Resorts Corp., 12.00%, 8/15/18 (b)		1,040		982,800
HRP Myrtle Beach Holdings LLC, 14.69%, 4/01/14 (a)(b)(d)(h)		6,891		689
HRP Myrtle Beach Operations LLC (a)(b)(d)(h):
0.00%, 4/01/12		5,000		500
12.04%, 4/01/13		5,000		500
Little Traverse Bay Bands of Odawa Indians, 10.25%, 2/15/14 (a)(b)(d)		2,560		864,000
MGM Mirage, 13.00%, 11/15/13		345		398,475
MGM Resorts International, 11.13%, 11/15/17		1,340		1,497,450
Marina District Finance Co., Inc., 9.88%, 8/15/18 (b)		310		309,225
Travelport LLC, 5.16%, 9/01/14 (f)		2,160		2,003,400
Tropicana Entertainment LLC, Series WI, 9.63%, 12/15/14 (a)(d)		530		387

				6,057,426

Household Durables — 1.0%
Beazer Homes USA, Inc., 12.00%, 10/15/17		1,700		1,914,625
K. Hovnanian Enterprises, Inc., 10.63%, 10/15/16		1,695		1,644,150
Standard Pacific Corp.:
6.25%, 4/01/14		315		293,738
7.00%, 8/15/15		600		552,000

				4,404,513

IT Services — 0.3%
SunGard Data Systems, Inc., 4.88%, 1/15/14		1,265		1,211,238

Independent Power Producers &
Energy Traders — 2.6%
The AES Corp., 8.75%, 5/15/13 (b)		261		265,241
Calpine Construction Finance Co. LP, 8.00%, 6/01/16 (b)		1,750		1,837,500
Energy Future Holdings Corp., 10.00%, 1/15/20 (b)		3,190		3,071,980
NRG Energy, Inc.:
7.25%, 2/01/14		3,705		3,779,100
7.38%, 2/01/16		690		695,175
7.38%, 1/15/17		665		669,987
8.50%, 6/15/19		800		822,000

				11,140,983

Industrial Conglomerates — 1.7%
Sequa Corp. (b):
11.75%, 12/01/15		2,850		2,935,500
13.50%, 12/01/15 (c)		4,023		4,183,759

				7,119,259

Insurance — 0.6%
Alliant Holdings I, Inc., 11.00%, 5/01/15 (b)		1,100		1,128,875
USI Holdings Corp., 4.25%, 11/15/14 (b)(f)		1,630		1,381,425

				2,510,300

Leisure Equipment & Products — 0.3%
Brunswick Corp., 11.25%, 11/01/16 (b)		980		1,119,650


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	27




Schedule of Investments (continued)	BlackRock Debt Strategies Fund, Inc. (DSU)
	(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value

Machinery — 1.5%
ESCO Corp., 4.41%, 12/15/13 (b)(f)	USD	3,070	$	2,793,700
Navistar International Corp., 8.25%, 11/01/21		2,000		2,095,000
Titan International, Inc., 8.00%, 1/15/12		1,530		1,591,200

				6,479,900

Media — 6.2%
Affinion Group, Inc., 10.13%, 10/15/13		2,835		2,905,875
CCO Holdings LLC, 7.88%, 4/30/18 (b)		2,075		2,147,625
CSC Holdings, Inc., 8.50%, 4/15/14		680		742,900
Clear Channel Worldwide Holdings, Inc.:
9.25%, 12/15/17		639		662,963
Series B, 9.25%, 12/15/17		5,422		5,686,322
DISH DBS Corp., 7.00%, 10/01/13		3,000		3,123,750
Gannett Co., Inc.:
10.00%, 4/01/16		390		435,848
9.38%, 11/15/17 (b)		1,015		1,111,425
Interactive Data Corp., 10.25%, 8/01/18 (b)		1,715		1,779,312
McClatchy Co., 11.50%, 2/15/17 (b)		1,355		1,399,038
Nielsen Finance LLC, 11.63%, 2/01/14		1,925		2,158,406
Regal Entertainment Group, 9.13%, 8/15/18		555		568,875
Seat Pagine Gialle SpA, 10.50%, 1/31/17 (b)	EUR	241		284,029
TL Acquisitions, Inc., 10.50%, 1/15/15 (b)	USD	895		854,725
UPC Germany GmbH, 8.13%, 12/01/17 (b)		3,000		3,082,500

				26,943,593

Metals & Mining — 0.9%
Aleris International, Inc. (a)(d):
9.00%, 12/15/14		1,100		2,200
10.00%, 12/15/16		1,500		570
Murray Energy Corp., 10.25%, 10/15/15 (b)		490		501,025
RathGibson, Inc., 11.25%, 2/15/14 (a)(d)		4,440		47,730
Ryerson, Inc., 7.84%, 11/01/14 (f)(i)		3,595		3,334,363

				3,885,888

Multiline Retail — 0.8%
Dollar General Corp.:
10.63%, 7/15/15		1,075		1,179,813
11.88%, 7/15/17 (c)		1,775		2,041,250

				3,221,063

Oil, Gas & Consumable Fuels — 2.6%
Arch Coal, Inc., 8.75%, 8/01/16		235		254,388
Atlas Energy Operating Co. LLC:
12.13%, 8/01/17		1,440		1,654,200
10.75%, 2/01/18		355		391,387
Coffeyville Resources LLC, 9.00%, 4/01/15 (b)		490		503,475
Consol Energy, Inc., 8.25%, 4/01/20 (b)		1,750		1,857,187
Crosstex Energy LP, 8.88%, 2/15/18		225		232,313
Denbury Resources, Inc.:
9.75%, 3/01/16		925		1,019,812
8.25%, 2/15/20		670		715,225
Forest Oil Corp., 8.50%, 2/15/14		470		499,375
Massey Energy Co., 6.88%, 12/15/13		1,300		1,316,250
OPTI Canada, Inc., 9.00%, 12/15/12 (b)		1,850		1,854,625
Titan Petrochemicals Group Ltd., 8.50%, 3/18/12 (b)		1,760		968,000

				11,266,237

Paper & Forest Products — 2.8%
Ainsworth Lumber Co. Ltd., 11.00%, 7/29/15 (b)(c)		4,312		3,686,510
Clearwater Paper Corp., 10.63%, 6/15/16		640		720,000
Georgia-Pacific LLC, 8.25%, 5/01/16 (b)		2,950		3,230,250
NewPage Corp., 11.38%, 12/31/14		3,890		3,160,625
Verso Paper Holdings LLC:
11.50%, 7/01/14		550		580,250
Series B, 4.22%, 8/01/14 (f)		890		729,800

				12,107,435


Corporate Bonds	Par (000)		Value

Pharmaceuticals — 0.4%
Angiotech Pharmaceuticals, Inc., 4.29%, 12/01/13 (f)	USD	1,570	$	1,267,775
Novasep Holding SAS, 9.63%, 12/15/16 (b)	EUR	564		600,373

				1,868,148

Real Estate Investment Trusts (REITs) — 0.2%
Omega Healthcare Investors, Inc., 7.50%, 2/15/20 (b)	USD	1,010		1,052,925

Software — 0.0%
BMS Holdings, Inc., 8.59%, 2/15/12 (b)(c)(f)		1,780		35,611

Specialty Retail — 0.3%
United Auto Group, Inc., 7.75%, 12/15/16		1,275		1,217,625

Textiles, Apparel & Luxury Goods — 0.3%
Phillips-Van Heusen Corp.:
7.38%, 5/15/20		925		952,750
7.75%, 11/15/23		410		446,140

				1,398,890

Wireless Telecommunication Services — 3.5%
Cricket Communications, Inc., 7.75%, 5/15/16		3,050		3,149,125
Digicel Group Ltd. (b):
9.13%, 1/15/15 (c)		3,948		3,967,740
8.25%, 9/01/17		300		311,625
MetroPCS Wireless, Inc.:
9.25%, 11/01/14		760		790,400
9.25%, 11/01/14		2,100		2,184,000
Nextel Communications, Inc., Series E, 6.88%, 10/31/13		2,275		2,269,312
Orascom Telecom Finance SCA, 7.88%, 2/08/14 (b)		755		717,250
Sprint Capital Corp.:
8.38%, 3/15/12		625		660,938
6.88%, 11/15/28		1,000		835,000

				14,885,390

Total Corporate Bonds — 55.5%				239,687,787




Floating Rate Loan Interests (f)

Aerospace & Defense — 0.4%
Hawker Beechcraft Acquisition Co., LLC:
Letter of Credit Linked Deposit, 0.43%, 3/26/14	124	98,445
Term Loan, 2.26% – 2.53%, 3/26/14	2,072	1,650,926

		1,749,371

Airlines — 0.4%
Delta Air Lines, Inc., Credit-Linked Deposit Loan, 0.11% – 2.28%, 4/30/12	1,940	1,855,125

Auto Components — 2.7%
Affinion Group Holdings, Inc., Term Loan, 8.51%, 3/01/12 (c)	3,194	3,066,405
Affinion Group, Inc., Tranche B Term Loan, 5.00%, 10/09/16	998	959,675
Allison Transmission, Inc., Term Loan, 3.04%, 8/07/14	7,267	6,695,941
Dana Holding Corp., Term Advance, 4.52% – 6.50%, 1/30/15	346	339,646
The Goodyear Tire & Rubber Co., Loan (Second Lien), 2.24%, 4/30/14	750	694,336

		11,756,003

Automobiles — 0.7%
Ford Motor Co.:
Tranche B-1 Term Loan, 3.03%, 12/15/13	2,935	2,823,307
Tranche B-2 Term Loan, 3.03%, 12/15/13	316	302,847

		3,126,154


See Notes to Financial Statements.

28	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Schedule of Investments (continued)	BlackRock Debt Strategies Fund, Inc. (DSU)
	(Percentages shown are based on Net Assets)


Floating Rate Loan Interests (f)	Par (000)		Value

Beverages — 0.6%
SW Acquisitions Co., Inc., Term Loan, 5.75%, 6/01/16	USD	2,638	$	2,640,222

Building Products — 1.0%
Building Materials Corp. of America, Term Loan Advance, 3.06%, 2/22/14		553		542,139
Goodman Global, Inc., Term Loan, 6.25%, 2/13/14		2,683		2,692,335
Momentive Performance Materials
(Blitz 06-103 GmbH), Tranche B-2 Term
Loan, 2.88%, 12/04/13	EUR	1,075		1,248,770

				4,483,244

Chemicals — 3.2%
CF Industries, Inc., Term Loan B-1, 4.50%, 4/05/15	USD	1,534		1,541,528
Chemtura Corp.:
Debtor in Possession Term Facility, 6.00%, 2/11/11		1,600		1,596,000
Exit Term Loan, 5.50%, 8/16/16		1,300		1,305,417
Gentek Holding, LLC, Tranche B Term Loan, 7.00%, 10/29/14		724		724,154
MacDermid, Inc., Tranche C Term Loan, 2.27%, 4/12/14	EUR	697		803,984
Nalco Co., Term Loan, 6.50%, 5/13/16	USD	1,708		1,713,442
PQ Corp. (FKA Niagara Acquisition, Inc.), Term Loan, (First Lien), 3.52% – 3.73%, 7/30/14		3,306		3,022,858
Rockwood Specialties Group, Inc., Term Loan H, 6.00%, 5/15/14		1,340		1,339,436
Solutia, Inc., Term Loan, 4.75%, 3/17/17		1,820		1,818,404

				13,865,223

Commercial Banks — 0.4%
CIT Group, Inc., Term Loan, 6.25%, 1/20/12		1,500		1,495,110

Commercial Services & Supplies — 3.5%
ARAMARK Corp.:
Letter of Credit-1 Facility, 0.11%, 1/26/14		55		51,997
Letter of Credit-2 Facility, 0.11%, 7/26/16		64		61,826
Term Loan B, 3.78%, 7/26/16		970		940,102
US Term Loan, 2.41%, 1/26/14		761		719,013
AWAS Finance Luxembourg Sarl, Term Loan, 7.75%, 6/10/16		2,250		2,263,124
Altegrity, Inc., Incremental Term Loan, 7.75%, 2/21/15		3,000		2,988,750
Casella Waste Systems, Inc., Term Loan B, 7.00%, 4/09/14		386		388,030
Delos Aircraft, Inc., Term Loan 2, 7.00%, 3/17/16		975		980,282
International Lease Finance Corp., Term Loan 1, 6.75%, 3/17/15		2,800		2,822,168
Quad Graphics, Term Loan, 5.50%, 4/20/16		950		906,300
Synagro Technologies, Inc., Term Loan (First Lien), 2.27% – 2.28%, 4/02/14		786		664,011
West Corp., Incremental Term Loan B-3, 7.25%, 10/24/13		2,104		2,097,152

				14,882,755

Construction & Engineering — 0.6%
Safway Services, LLC, First Out Tranche Loan, 9.00%, 12/18/17		2,750		2,750,000

Construction Materials — 0.2%
Fairmount Minerals Ltd., Term Loan B, 6.25%, 8/05/16		675		675,281

Consumer Discretionary — 1.0%
Laureate Education, Series A New Term Loan, 7.00%, 8/15/14		4,297		4,224,708


Floating Rate Loan Interests (f)	Par (000)		Value

Consumer Finance — 1.9%
AGFS Funding Co., Term Loan, 7.25%, 4/21/15	USD	5,000	$	4,940,625
DaimlerChrysler Financial Services Americas LLC, Term Loan (Second Lien), 6.78%, 8/05/13		3,432		3,420,315

				8,360,940

Containers & Packaging — 0.2%
Anchor Glass Container Corp., Term Loan (First Lien), 6.00%, 3/02/16		243		240,556
BWAY Holding Co., Term Loan B, 5.50% – 6.00%, 6/16/17		357		356,126
Berry Plastics Holding Corp., Term Loan C, 2.38%, 4/03/15		343		312,757
ICL Industrial Containers ULC/ICL Contenants Industriels ULC (FKA BWAY Corp.), Term Loan C, 5.50% – 6.00%, 6/16/17		33		33,408

				942,847

Diversified Consumer Services — 1.5%
Coinmach Service Corp., Term Loan, 3.35%, 11/14/14		4,583		3,995,790
ServiceMaster Co.:
Closing Date Loan, 2.77% – 3.04%, 7/24/14		2,305		2,118,965
Delayed Draw Term Loan, 2.77%, 7/24/14		230		211,017

				6,325,772

Diversified Financial Services — 1.0%
Reynolds Group Holdings, Inc.:
Incremental US Term Loan, 6.25%, 5/05/16		1,400		1,390,084
US Term Loan, 6.25%, 5/05/16		1,193		1,186,239
Whitelabel IV SA:
Term Loan B1, 5.00%, 8/11/17	EUR	565		708,837
Term Loan B2, 5.00%, 8/11/17		935		1,173,030

				4,458,190

Diversified Telecommunication Services — 2.1%
Cincinnati Bell, Inc., Tranche B Term Loan, 6.50%, 6/11/17	USD	1,995		1,980,038
Hawaiian Telcom Communications, Inc., Tranche C Term Loan, 4.75%, 5/30/14 (c)		4,644		3,250,642
Level 3 Communications, Incremental Term Loan, 2.53% – 2.78%, 3/13/14		3,250		2,911,288
Wind Telecomunicazioni SpA:
Term Loan Facility B2, 4.66%, 5/24/13		568		551,841
Term Loan Facility C2, 3.66%, 5/26/14		568		551,841

				9,245,650

Electric Utilities — 0.7%
New Development Holdings, LLC, Term Loan, 7.00%, 7/03/17		3,000		3,030,000

Electronic Equipment, Instruments &
Components — 1.0%
CDW LLC (FKA LOW Corp.), Term Loan, 4.28%, 10/10/14		2,259		2,023,280
Flextronics International Ltd., Closing Date Loan B, 2.56%, 10/01/12		535		515,205
Styron Sarl, Term Loan, 7.50%, 6/17/16		1,600		1,612,496

				4,150,981

Energy Equipment & Services — 0.4%
MEG Energy Corp., Tranche D Term Loan, 6.00%, 4/03/16		1,912		1,906,924

Food & Staples Retailing — 1.4%
AB Acquisitions UK Topco 2 Ltd. (FKA Alliance Boots), Facility B1, 3.55%, 7/09/15	GBP	1,700		2,425,350
Pierre Foods, Term Loan, 7.00%, 3/03/16	USD	1,284		1,280,600
Pilot Travel Centers, LLC, Initial Tranche B Term Loan, 5.25%, 6/30/16		2,157		2,159,485

				5,865,435


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	29




Schedule of Investments (continued)	BlackRock Debt Strategies Fund, Inc. (DSU)
	(Percentages shown are based on Net Assets)


Floating Rate Loan Interests (f)	Par (000)		Value

Food Products — 1.7%
Dole Food Co., Inc., Tranche B-1 Term Loan, 5.00% – 5.50%, 3/02/17	USD	797	$	798,767
Michael Foods Group, Inc. (FKA M-Foods Holdings, Inc.), Term Loan B, 6.25%, 6/29/16		1,000		1,000,714
Pilgrim’s Pride Corp., Term Loan A, 5.53%, 12/01/12		1,430		1,415,700
Pinnacle Foods Finance LLC, Tranche D Term Loan, 6.00%, 4/02/14		2,063		2,065,579
Solvest, Ltd. (Dole), Tranche C-1 Term Loan, 5.00% – 5.50%, 3/02/17		1,979		1,982,800

				7,263,560

Health Care Equipment & Supplies — 0.7%
DJO Finance LLC (FKA ReAble Therapeutics Finance LLC), Term Loan, 3.26%, 5/20/14		3,074		2,915,908

Health Care Providers & Services — 4.6%
CHS/Community Health Systems, Inc.:
Delayed Draw Term Loan, 2.55%, 7/25/14		205		193,242
Term Loan Facility, 2.55%, 7/25/14		4,024		3,794,425
DaVita, Inc., Tranche B-1 Term Loan, 1.77% – 2.04%, 10/05/12		600		590,747
Gentiva Health Services, Inc., Term Loan B, 6.75%, 8/12/16		1,100		1,085,562
HCA, Inc.:
Tranche A-1 Term Loan, 2.03%, 11/16/12		4,569		4,395,650
Tranche B-1 Term Loan, 2.78%, 11/18/13		245		235,811
Harden Healthcare LLC:
Add-on Term Loan, 7.75%, 3/02/15		2,650		2,597,000
Tranche A Term Loan, 8.50%, 2/22/15		793		776,873
inVentiv Health, Inc. (FKA Ventive Health, Inc.), Term Loan B, 6.50%, 7/31/16		3,250		3,243,906
Renal Advantage Holdings, Inc., Tranche B Term Loan, 6.00%, 6/03/16		1,100		1,100,000
Vanguard Health Holding Co. II, LLC (Vanguard Health Systems, Inc.), Initial Term Loan, 5.00%, 1/29/16		1,845		1,823,056

				19,836,272

Health Care Technology — 0.6%
IMS Health, Inc., Tranche B Dollar Term Loan, 5.25%, 2/26/16		2,721		2,725,821

Hotels, Restaurants & Leisure — 2.7%
Harrah’s Operating Co., Inc.:
Term Loan B-1, 3.50%, 1/28/15		449		383,817
Term Loan B-3, 3.50% – 3.53%, 1/28/15		1,404		1,199,391
Term Loan B-4, 9.50%, 10/31/16		2,239		2,284,770
Six Flags Theme Parks, Inc., Tranche B Term Loan (First Lien), 6.00%, 6/30/16		3,386		3,347,210
Universal City Development Partners Ltd., Loan, 7.75%, 11/06/14		2,488		2,499,938
VML US Finance LLC (FKA Venetian Macau):
Term B Delayed Draw Project Loan, 5.04%, 5/25/12		1,060		1,042,023
Term B Funded Project Loan, 5.04%, 5/27/13		1,013		990,932

				11,748,081

IT Services — 2.8%
Ceridian Corp., US Term Loan, 3.26%, 11/09/14		2,910		2,588,882
EVERTEC, Inc., Term Loan B, 7.00%, 8/20/16		1,150		1,124,125
First Data Corp.:
Initial Tranche B-2 Term Loan, 3.01%, 9/24/14		2,801		2,388,167
Initial Tranche B-3 Term Loan, 3.01%, 9/24/14		1,375		1,172,779
SunGard Data Systems, Inc. (Solar Capital Corp.), Incremental Term Loan, 6.75%, 2/28/14		349		348,613
TransUnion LLC, Term Loan, 6.75%, 6/15/17		4,250		4,288,518

				11,911,084


Floating Rate Loan Interests (f)	Par (000)		Value

Independent Power Producers & Energy Traders — 0.5%
Dynegy Holdings, Inc.:
Term Letter of Credit Facility, 4.02%, 4/02/13	USD	327	$	321,860
Tranche B Term Loan, 4.02%, 4/02/13		26		25,777
Texas Competitive Electric Holdings Co., LLC (TXU):
Initial Tranche B-2 Term Loan, 3.79% – 4.07%, 10/10/14		2,171		1,645,021
Initial Tranche B-3 Term Loan, 3.79% – 4.03%, 10/10/14		196		148,085

				2,140,743

Industrial Conglomerates — 0.3%
Sequa Corp., Term Loan, 3.79%, 12/03/14		1,394		1,282,098

Insurance — 0.1%
Alliant Holdings I, Inc., Term Loan, 3.53%, 8/21/14		581		552,049

Internet & Catalog Retail — 0.3%
FTD Group, Inc., Tranche B Term Loan, 6.75%, 8/26/14		1,096		1,096,254

Leisure Equipment & Products — 0.3%
EB Sports Corp., Loan, 11.50%, 5/01/12 (c)		1,466		1,392,281

Machinery — 0.2%
Generac Acquisition Corp., Term Loan (First Lien), 2.81% – 3.03%, 11/10/13		343		315,378
Oshkosh Truck Corp., Term Loan B, 6.44% – 6.54%, 12/06/13		612		614,883

				930,261

Media — 8.2%
Cengage Learning Acquisitions, Inc. (Thomson Learning), Tranche 1 Incremental Term Loan, 7.50%, 7/03/14		2,526		2,517,582
Charter Communications Operating, LLC:
New Term Loan, 2.26%, 3/06/14		546		516,358
Term Loan B1, 7.25%, 3/06/14		1,672		1,707,700
Term Loan C, 3.79%, 9/06/16		5,302		5,071,115
Ellis Communications KDOC, LLC, Loan, 10.00%, 12/30/11		6,303		2,363,533
HMH Publishing Co., Ltd., Tranche A Term Loan, 5.79%, 6/12/14 (c)		3,154		2,871,752
Hanley-Wood, LLC, Term Loan, 2.56% – 2.63%, 3/10/14		742		321,082
Interactive Data Corp., Term Loan, 6.75%, 1/29/17		1,300		1,307,583
Lavena Holding 3 GmbH (Prosiebensat.1 Media AG):
Facility B1, 3.52%, 6/30/15	EUR	337		322,477
Facility C1, 3.77%, 6/30/16		674		644,953
Mediacom Illinois, LLC (FKA Mediacom Communications, LLC), Tranche D Term Loan, 5.50%, 3/31/17	USD	993		972,327
Newsday, LLC, Fixed Rate Term Loan, 10.50%, 8/01/13		4,250		4,510,312
Sinclair Television Group, Inc., New Tranche B Loan, 5.50% – 6.25%, 10/29/15		1,587		1,588,602
Springer Science+Business Media SA, Facility A1, 6.75%, 7/01/16	EUR	1,900		2,381,692
Sunshine Acquisition Ltd. (FKA HIT Entertainment), Term Facility, 5.68%, 6/01/12	USD	1,432		1,335,986
TWCC Holdings Corp., Replacement Term Loan, 5.00%, 9/14/15		1,943		1,940,669
UPC Financing Partnership, Facility U, 4.64%, 12/31/17	EUR	1,600		1,882,159
Virgin Media Investment Holdings, Ltd., Facility B, 4.77%, 12/31/15	GBP	1,250		1,858,360
Yell Group Plc Facility A3-Yell Finance (UK) Limited, 2.60%, 4/30/14	USD	1,406		1,357,031

				35,471,273


See Notes to Financial Statements.

30	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Schedule of Investments (continued)	BlackRock Debt Strategies Fund, Inc. (DSU)
	(Percentages shown are based on Net Assets)


Floating Rate Loan Interests (f)	Par (000)		Value

Metals & Mining — 0.6%
Euramax International, Inc., Domestic Term Loan:
10.00%, 6/29/13	USD	1,286	$	1,196,384
14.00%, 6/29/13 (c)		1,343		1,249,093

				2,445,477

Multi-Utilities — 0.3%
Energy Transfer Equity, LP, Term Loan, 2.02%, 11/01/12		750		734,062
FirstLight Power Resources, Inc. (FKA NE Energy, Inc.):
Synthetic Letter of Credit, 0.41%, 11/01/13		9		7,940
Term B Advance (First Lien), 3.06%, 11/01/13		509		472,314

				1,214,316

Multiline Retail — 1.7%
Dollar General Corp., Tranche B-2 Term Loan, 3.01% – 3.03%, 7/07/14		2,179		2,097,209
Hema Holding BV:
Facility B, 2.65%, 7/06/15	EUR	369		442,525
Facility C, 3.40%, 7/05/16		369		442,525
Facility D, 5.65%, 1/01/17		2,900		3,399,399
The Neiman Marcus Group, Inc., Term Loan, 2.30%, 4/06/13	USD	966		915,428

				7,297,086

Oil, Gas & Consumable Fuels — 2.2%
Big West Oil, LLC, Term Loan, 12.00%, 7/23/15		1,500		1,518,125
Tronox Worldwide LLC:
Tranche B-1 Term Loan, 11.25%, 9/20/10		2,246		2,264,723
Tranche B-2 Term Loan, 11.25%, 9/20/10		603		608,433
Turbo Beta Ltd., Dollar Facility, 14.50%, 3/15/18 (c)	GBP	6,226		4,934,275

				9,325,556

Paper & Forest Products — 0.6%
Georgia-Pacific LLC, Term Loan B, 2.30% – 2.53%, 12/23/12	USD	214		210,797
Verso Paper Finance Holdings LLC, PIK Loan, 6.69% – 7.44%, 2/01/13 (c)		4,208		2,524,622

				2,735,419

Personal Products — 0.0%
American Safety Razor Co., LLC, Term Loan (First Lien), 8.75%, 7/31/13 (c)		161		148,717

Pharmaceuticals — 0.8%
Warner Chilcott Co., LLC, Term Loan A, 6.00%, 10/30/14		708		706,642
Warner Chilcott Corp.:
Additional Term Loan B, 6.25%, 4/30/15		676		675,102
Term Loan B-1, 6.25%, 4/30/15		270		269,162
Term Loan B-2, 6.25%, 4/30/15		445		444,781
Term Loan B-3, 6.50%, 2/20/16		872		875,000
Term Loan B-4, 6.50%, 2/20/16		283		283,914

				3,254,601

Professional Services — 0.4%
Booz Allen Hamilton, Inc., Term Loan C, 6.00%, 7/31/15		1,741		1,740,815

Real Estate Management & Development — 1.7%
Enclave, Term Loan (First Lien), 6.14%, 3/01/12 (a)(d)		4,000		1
Realogy Corp.:
Delayed Draw Term Loan B, 3.30% – 3.53%, 10/10/13		1,468		1,266,267
Initial Term Loan B, 3.30%, 10/10/13		4,418		3,812,239
Synthetic Letter of Credit, 0.11%, 10/10/13		757		653,512
Term Loan (Second Lien), 13.50%, 10/15/17		1,500		1,582,500

				7,314,519


Floating Rate Loan Interests (f)	Par (000)		Value

Semiconductors & Semiconductor Equipment — 0.2%
Freescale Semiconductor, Inc., Extended Maturity Term Loan, 4.56%, 12/01/16	USD	740	$	661,722

Software — 0.3%
Telcordia Technologies, Inc., Term Loan, 6.75%, 4/30/16		1,097		1,096,336

Specialty Retail — 0.9%
Burlington Coat Factory Warehouse Corp., Term Loan, 2.54% – 2.66%, 5/28/13		680		644,130
Michaels Stores, Inc.:
Term Loan B-1, 2.63% – 2.81%, 10/31/13		1,384		1,305,420
Term Loan B-2, 4.88% – 5.06%, 7/31/16		543		523,653
Toys ‘R’ Us, Inc., Term Loan B, 6.00%, 8/17/16		1,500		1,496,241

				3,969,444

Textiles, Apparel & Luxury Goods — 0.3%
Phillips Van Heusen Corp., U.S. Tranche B Term Loan, 4.75%, 5/06/16		1,325		1,332,158

Wireless Telecommunication Services — 1.9%
Cavtel Holdings, LLC, Term Loan, 10.50%, 12/31/12 (c)		825		779,602
Digicel International Finance Ltd., U.S. Term Loan (Non-Rollover), 3.06%, 3/30/12		1,167		1,139,381
MetroPCS Wireless, Inc.:
Tranche B-1 Term Loan, 2.56%, 11/03/13		83		81,058
Tranche B-2 Term Loan B, 3.81%, 11/03/16		909		891,419
Vodafone Americas Finance 2 Inc., Initial Loan, 6.88%, 7/30/15		5,500		5,500,000

				8,391,460

Total Floating Rate Loan Interests — 59.8%				257,983,246




Other Interests (j)	Beneficial Interest (000)

Airlines — 0.1%
Delta Air Lines, Inc. Default Escrow:
8.33%		5,505		98,539
10.00%		4,200		75,180

				173,719

Auto Components — 0.0%
Intermet Liquidating Trust, Class A		833		250

Diversified Financial Services — 0.3%
J.G. Wentworth LLC Preferred Equity Interests (k)		1		1,190,710

Household Durables — 0.2%
Stanley Martin, Class B Membership Units (k)		2		947,250

Media — 0.0%
Adelphia Escrow		7,500		750
Adelphia Preferred Escrow		5		1
Adelphia Recovery Trust		9,406		37,624
Adelphia Recovery Trust, Series ACC-6B INT		500		50

				38,425

Metals & Mining — 0.3%
RathGibson Acquisition Co., LLC (k)		280		1,488,924

Specialty Retail — 0.0%
Buffets, Inc.		1,440		144
Movie Gallery, Inc. Default Escrow		21,700		217

				361

Total Other Interests — 0.9%				3,839,639


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	31




Schedule of Investments (continued)	BlackRock Debt Strategies Fund, Inc. (DSU)
	(Percentages shown are based on Net Assets)


Warrants (l)	Shares		Value

Health Care Providers & Services — 0.0%
HealthSouth Corp. (Expires 1/16/14)		126,761	$	1

Hotels, Restaurants & Leisure — 0.0%
Buffets Restaurants Holdings, Inc. (Expires 4/29/14)		1,216		12

Media — 0.0%
Charter Communications, Inc. (Expires 11/30/14)		12,661		69,636

Oil, Gas & Consumable Fuels — 0.0%
Turbo Cayman Ltd. (No Expiration)		4		—

Software — 0.0%
HMH Holdings/EduMedia (Expires 3/09/17)		24,924		—

Specialty Retail — 0.0%
Movie Gallery, Inc. (Expires 5/15/15)		62,323		1

Total Warrants — 0.0%				69,650

Total Long-Term Investments (Cost — $596,588,061) — 120.1%				518,417,395




Short-Term Securities	Beneficial Interest (000)

Bank of New York Cash Reserves, 0.01% (m)	USD	2,175		2,174,508

Total Short-Term Securities (Cost — $2,174,508) — 0.5%				2,174,508

*Total Investments (Cost — $598,762,569) — 120.6%**				520,591,903
Liabilities in Excess of Other Assets — (20.6)%				(89,033,094	)

Net Assets — 100.0%			$	431,558,809



*	The cost and unrealized appreciation (depreciation) of investments as of August 31, 2010, as computed for federal income tax purposes, were as follows:


Aggregate cost	$	595,470,258

Gross unrealized appreciation	$	24,052,036
Gross unrealized depreciation		(98,930,391	)

Net unrealized depreciation	$	(74,878,355	)


(a)	Non-income producing security.

(b)	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.

(c)	Represents a payment-in-kind security which may pay interest/dividends in additional face/shares.

(d)	Issuer filed for bankruptcy and/or is in default of interest payments.

(e)	As a result of bankruptcy proceedings, the company did not repay the principal amount or accrued interest of the security upon maturity.

(f)	Variable rate security. Rate shown is as of report date.

(g)	Convertible security.

(h)	Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

(i)	All or a portion of security has been pledged as collateral in connection with swaps.

(j)	Other interests represent beneficial interest in liquidation trusts and other reorganization entities and are non-income producing.

(k)	The investment is held by a wholly-owned taxable subsidiary of the Fund.

(l)	Warrants entitle the Fund to purchase a predetermined number of shares of common stock and are non-income producing. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date, if any.

(m)	Represents the current yield as of report date.

•	Investments in companies considered to be an affiliate of the Fund during the period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:



Affiliate	Shares Held at February 28, 2010	Net Activity	Shares Held at August 31, 2010	Income

BlackRock Liquidity Funds, TempFund, Institutional Class	1,319,723	(1,319,723)	—	$2,856


•	Foreign currency exchange contracts as of August 31, 2010 were as follows:



Currency Purchased		Currency Sold		Counterparty	Settlement Date	Unrealized Appreciation (Depreciation)

EUR	2,395,100	USD	3,055,024	Citibank NA	9/15/10	$	(19,898	)
USD	20,931,990	EUR	16,528,000	Citibank NA	9/15/10		(12,675	)
USD	520,319	EUR	403,500	Deutsche Bank AG	9/15/10		8,995
CAD	1,140,500	USD	1,083,775	UBS AG	10/20/10		(15,098	)
USD	3,702,055	CAD	3,909,000	Deutsche Bank AG	10/20/10		39,222
USD	5,130,643	GBP	3,328,500	Royal Bank of Scotland Plc	10/20/10		27,669

Total						$	28,215


•	Credit default swaps on single-name issuers — buy protection outstanding as of August 31, 2010 were as follows:



Issuer	Pay Fixed Rate	Counterparty	Expiration	Notional Amount (000)		Unrealized Appreciation (Depreciation)

K. Hovnanian	5.00%	Goldman Sachs	December	$	855	$	50,843
Enterprises, Inc.		Bank USA	2011
K. Hovnanian	5.00%	Goldman Sachs	September	$	250		21,190
Enterprises, Inc.		Bank USA	2013
Brunswick Corp.	5.00%	Goldman Sachs	September	$	325		(17,128	)
		Bank USA	2015

Total						$	54,905


•	Credit default swaps on traded issuers — sold protection outstanding as of August 31, 2010 were as follows:



Issuer	Receive Fixed Rate	Counterparty	Expiration	Credit Rating¹	Notional Amount (000)²	Unrealized Depreciation

BAA Ferrovial	2.00%	Deutsche	March 2012	A–	GBP 900	$(48,632)
Junior Term Loan		Bank AG


		¹	Using S&P’s rating of the issuer.

		²	The maximum potential amount the Fund may pay should a negative event take place as defined under the terms of agreement.

•	For Fund compliance purposes,the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

•	Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivatives, which are as follows:

	•	Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

	•	Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)


See Notes to Financial Statements.

32	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Schedule of Investments (concluded)	BlackRock Debt Strategies Fund, Inc. (DSU)


•	Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivatives)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the inputs used as of August 31, 2010 in determining the fair valuation of the Fund’s investments and derivatives:



Valuation Inputs	Level 1		Level 2			Level 3			Total

Assets:
Investments in Securities:
Long-Term Investments:
Common Stocks	$	11,681,179	$	4,220,095		$	935,799		$	16,837,073
Corporate Bonds		—		229,063,438			10,624,349			239,687,787
Floating Rate Loan Interests		—		205,463,969			52,519,277			257,983,246
Other Interests		—		173,719			3,665,920			3,839,639
Warrants		69,636		—			14			69,650
Short-Term Securities		—		2,174,508			—			2,174,508

Liabilities:
Unfunded Loan Commitments		—		—			(52,865	)		(52,865	)

Total	$	11,750,815	$	441,095,729		$	67,692,494		$	520,539,038



	Derivative Financial Instruments¹

Valuation Inputs	Level 1		Level 2			Level 3			Total

Assets:
Credit contracts		—	$	72,033			—		$	72,033
Foreign currency exchange contracts		—		75,886			—			75,886
Liabilities:
Credit contracts		—		(17,128	)	$	(48,632	)		(65,760	)
Foreign currency exchange contracts		—		(47,671	)		—			(47,671	)

Total		—	$	83,120		$	(48,632	)	$	34,488


¹	Derivative financial instruments are swaps and foreign currency exchange contracts. Swaps and foreign currency exchange contracts are valued at the unrealized appreciation/depreciation on the instrument.

The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used in determining fair value:



	Common Stocks			Corporate Bonds			Floating Rate Loan Interests			Other Interests			Warrants			Unfunded Loan Commitments			Total

Assets/Liabilities:
Balance, as of February 28, 2010	$	311,675		$	11,805,208		$	58,483,045		$	2,253,500		$	31,175			—		$	72,884,603
Accrued discounts/premiums		—			283,239			312,255			—			—			—			595,494
Net realized gain (loss)		—			177,745			(6,167,426	)		364,537			—			—			(5,625,144	)
Net change in unrealized appreciation/depreciation²		713,481			758,386			8,253,852			79,727			(31,161	)	$	(52,865	)		9,721,420
Purchases		—			23,853			3,147,673			—			—			—			3,171,526
Sales		—			(2,406,340	)		(31,346,952	)		(520,768	)		—			—			(34,274,060	)
Transfers in³		805,207			—			32,221,417			1,488,924			—			—			34,515,548
Transfers out³		(894,564	)		(17,742	)		(12,384,587	)		—			—			—			(13,296,893	)

Balance, as of August 31, 2010	$	935,799		$	10,624,349		$	52,519,277		$	3,665,920		$	14		$	(52,865	)	$	67,692,494


²	Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations. The change in the unrealized appreciation/depreciation on the securities still held on August 31, 2010 was $1,342,598.

³	The Fund’s policy is to recognize transfers in and transfers out as of the end of the period of the event or the change in circumstances that caused the transfer.

The following table is a reconciliation of Level 3 derivative financial instruments for which significant unobservable inputs were used in determining fair value:



	Credit Contracts

Liabilities:
Balance, as of February 28, 2010	$	(94,696	)
Accrued discounts/premiums		—
Net realized gain (loss)		—
Net change in unrealized appreciation/depreciation⁴		46,064
Purchases		—
Sales		—
Transfers in⁵		—
Transfers out⁵		—

Balance, as of August 31, 2010	$	(48,632	)


⁴	Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations. The change in the unrealized appreciation/depreciation on swaps still held on August 31, 2010 was $46,064.

⁵	The Fund’s policy is to recognize transfers in and transfers out as of the end of the period of the event or the change in circumstances that caused the transfer.


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	33




Schedule of Investments August 31, 2010 (Unaudited)	BlackRock Floating Rate Income Strategies Fund II, Inc. (FRB)
	(Percentages shown are based on Net Assets)


Common Stocks (a)	Shares		Value

Building Products — 0.1%
Masonite Worldwide Holdings		3,830	$	145,540

Chemicals — 0.0%
GEO Specialty Chemicals, Inc.		10,732		4,120
Wellman Holdings, Inc.		181		9

				4,129

Construction Materials — 0.0%
Nortek, Inc.		710		29,465

Electrical Equipment — 0.0%
Medis Technologies Ltd.		13,053		405

Semiconductors & Semiconductor Equipment — 0.1%
SunPower Corp., Class B		5,332		55,133

Software — 0.2%
HMH Holdings/EduMedia		47,611		238,055

Total Common Stocks — 0.4%				472,727




Corporate Bonds	Par (000)

Airlines — 0.4%
Air Canada, 9.25%, 8/01/15 (b)	USD	250		245,000
Delta Air Lines, Inc., Series B, 9.75%, 12/17/16		285		299,325

				544,325

Auto Components — 0.8%
Delphi International Holdings Unsecured, 12.00%, 10/06/14		16		15,830
Icahn Enterprises LP:
7.75%, 1/15/16		105		104,213
8.00%, 1/15/18		1,000		995,000

				1,115,043

Building Products — 2.4%
Building Materials Corp. of America, 7.00%, 2/15/20 (b)		425		422,875
CPG International I, Inc., 7.50%, 7/01/12 (c)		3,000		2,898,750

				3,321,625

Capital Markets — 0.2%
E*Trade Financial Corp., 4.00%, 8/31/19 (b)(d)(e)		46		55,200
Marsico Parent Co., LLC, 10.63%, 1/15/16 (b)		593		219,410
Marsico Parent Holdco, LLC, 12.50%, 7/15/16 (b)(f)		166		14,971
Marsico Parent Superholdco, LLC, 14.50%, 1/15/18 (b)(f)		176		15,865

				305,446

Chemicals — 1.1%
CF Industries, Inc., 6.88%, 5/01/18		480		505,200
GEO Specialty Chemicals, Inc. (b):
7.50%, 3/31/15 (d)(f)		702		456,366
10.00%, 3/31/15		691		448,864
Wellman Holdings, Inc., Subordinate Note (Third Lien), 5.00%, 1/29/19 (d)(f)		195		76,181

				1,486,611

Commercial Banks — 1.1%
CIT Group, Inc., 7.00%, 5/01/17		1,585		1,490,395

Commercial Services & Supplies — 0.5%
Clean Harbors, Inc., 7.63%, 8/15/16		400		410,000
The Geo Group, Inc., 7.75%, 10/15/17 (b)		300		309,000

				719,000


Corporate Bonds	Par (000)		Value

Construction Materials — 0.5%
Nortek, Inc., 11.00%, 12/01/13	USD	713	$	751,487

Consumer Finance — 0.5%
Credit Acceptance Corp., 9.13%, 2/01/17 (b)		190		196,888
Inmarsat Finance Plc, 7.38%, 12/01/17 (b)		525		538,125

				735,013

Containers & Packaging — 2.4%
Berry Plastics Corp.:
8.25%, 11/15/15		900		902,250
9.50%, 5/15/18 (b)		280		257,600
Berry Plastics Holding Corp., 8.88%, 9/15/14		50		47,625
Clondalkin Acquisition BV, 2.54%, 12/15/13 (b)(c)		1,500		1,308,750
Owens-Brockway Glass Container, Inc., 6.75%, 12/01/14	EUR	113		144,631
Smurfit Kappa Acquisitions (b):
7.25%, 11/15/17		275		355,464
7.75%, 11/15/19		265		344,217

				3,360,537

Diversified Financial Services — 1.6%
Ally Financial Inc., 8.30%, 2/12/15 (b)	USD	950		988,000
Axcan Intermediate Holdings, Inc., 12.75%, 3/01/16		100		100,125
FCE Bank Plc, 7.13%, 1/16/12	EUR	400		524,642
Reynolds Group DL Escrow, Inc., 7.75%, 10/15/16 (b)	USD	400		403,000
Reynolds Group Issuer, Inc., 7.75%, 10/15/16 (b)	EUR	200		257,249

				2,273,016

Diversified Telecommunication Services — 1.0%
Frontier Communications Corp., 8.25%, 4/15/17	USD	290		306,675
ITC Deltacom, Inc., 10.50%, 4/01/16		500		492,500
Qwest Communications International, Inc., 8.00%, 10/01/15 (b)		300		322,500
Qwest Corp., 8.38%, 5/01/16		240		279,600

				1,401,275

Energy Equipment & Services — 0.5%
Expro Finance Luxembourg SCA, 8.50%, 12/15/16 (b)		750		701,250

Food & Staples Retailing — 0.3%
AmeriQual Group LLC, 9.50%, 4/01/12 (b)		250		245,000
Rite Aid Corp., 8.00%, 8/15/20 (b)		140		139,125

				384,125

Food Products — 0.7%
B&G Foods, Inc., 7.63%, 1/15/18		300		308,625
Bumble Bee Foods LLC, 7.75%, 12/15/15 (b)		240		253,800
Smithfield Foods, Inc., 10.00%, 7/15/14 (b)		390		435,337

				997,762

Health Care Equipment & Supplies — 0.5%
DJO Finance LLC, 10.88%, 11/15/14		685		733,806

Health Care Providers & Services — 0.9%
American Renal Holdings, 8.38%, 5/15/18 (b)		75		75,000
HCA, Inc., 7.25%, 9/15/20		255		266,475
Tenet Healthcare Corp.:
9.00%, 5/01/15		95		101,175
8.88%, 7/01/19		690		746,062

				1,188,712

Health Care Technology — 0.8%
IMS Health, Inc., 12.50%, 3/01/18 (b)		980		1,135,575


See Notes to Financial Statements.


34	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Schedule of Investments (continued)	BlackRock Floating Rate Income Strategies Fund II, Inc. (FRB)
	(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value

Hotels, Restaurants & Leisure — 1.1%
Little Traverse Bay Bands of Odawa Indians, 10.25%, 2/15/14 (a)(b)(g)	USD	1,565	$	528,188
MGM Resorts International, 10.38%, 5/15/14		260		283,400
Travelport LLC, 5.16%, 9/01/14 (c)		815		755,912

				1,567,500

Independent Power Producers & Energy Traders — 2.5%
Calpine Construction Finance Co. LP, 8.00%, 6/01/16 (b)		1,215		1,275,750
Energy Future Holdings Corp., 10.00%, 1/15/20 (b)		500		481,501
NRG Energy, Inc., 7.25%, 2/01/14		1,660		1,693,200

				3,450,451

Industrial Conglomerates — 0.5%
Sequa Corp., 13.50%, 12/01/15 (b)(f)		679		705,814

Media — 2.6%
Affinion Group, Inc., 10.13%, 10/15/13		555		568,875
CSC Holdings, Inc., 8.50%, 4/15/14		230		251,275
Clear Channel Worldwide Holdings, Inc.:
9.25%, 12/15/17		212		219,950
Series B, 9.25%, 12/15/17		847		888,291
DISH DBS Corp., 7.00%, 10/01/13		525		546,656
Seat Pagine Gialle SpA, 10.50%, 1/31/17 (b)	EUR	60		70,713
TL Acquisitions, Inc., 10.50%, 1/15/15 (b)	USD	135		128,925
UPC Germany GmbH, 8.13%, 12/01/17 (b)		1,000		1,027,500

				3,702,185

Metals & Mining — 0.4%
FMG Finance Property Ltd., 4.30%, 9/01/11 (b)(c)		180		180,225
Ryerson, Inc., 7.84%, 11/01/14 (c)		450		417,375

				597,600

Multiline Retail — 0.2%
Dollar General Corp., 11.88%, 7/15/17 (f)		235		270,250

Oil, Gas & Consumable Fuels — 0.6%
Coffeyville Resources LLC, 9.00%, 4/01/15 (b)		160		164,400
OPTI Canada, Inc., 9.00%, 12/15/12 (b)		665		666,663

				831,063

Paper & Forest Products — 0.1%
Verso Paper Holdings LLC, Series B, 4.22%, 8/01/14 (c)		180		147,600

Pharmaceuticals — 0.9%
Angiotech Pharmaceuticals, Inc., 4.29%, 12/01/13 (c)		300		242,250
Elan Finance Plc, 4.38%, 11/15/11 (c)		950		948,812

				1,191,062

Textiles, Apparel & Luxury Goods — 0.1%
Phillips-Van Heusen Corp., 7.38%, 5/15/20		195		200,850

Wireless Telecommunication Services — 1.8%
Cricket Communications, Inc., 7.75%, 5/15/16		825		851,812
Digicel Group Ltd. (b):
9.13%, 1/15/15 (f)		399		400,995
8.25%, 9/01/17		100		103,875
iPCS, Inc., 2.59%, 5/01/13 (c)		500		467,500
Nextel Communications, Inc., Series E, 6.88%, 10/31/13		425		423,938
Sprint Capital Corp., 8.38%, 3/15/12		200		211,500

				2,459,620

Total Corporate Bonds — 27.0%				37,768,998


Floating Rate Loan Interests (c)		Par (000)		Value

Aerospace & Defense — 1.6%
DynCorp International, Term Loan, 6.25%, 7/07/16	USD	575	$	570,544
Hawker Beechcraft Acquisition Co., LLC:
Letter of Credit Linked Deposit, 0.43%, 3/26/14		45		35,596
Term Loan, 2.26%, 3/26/14		736		586,523
TASC, Inc.:
Tranche A Term Loan, 5.50%, 12/18/14		323		323,269
Tranche B Term Loan, 5.75%, 12/18/15		657		658,342

				2,174,274

Auto Components — 3.0%
Affinion Group Holdings, Inc., Term Loan, 8.51%, 3/01/12 (f)		341		327,741
Affinion Group, Inc., Tranche B Term Loan, 5.00%, 10/09/16		748		719,756
Allison Transmission, Inc., Term Loan, 3.04%, 8/07/14		2,643		2,435,781
Dana Holding Corp., Term Advance, 4.52% – 6.50%, 1/30/15		475		466,419
Exide Global Holdings Netherlands C.V., European Borrower, Term Loan, 3.94%, 5/15/12	EUR	170		199,538
GPX International Tire Corp. (a)(g):
Tranche B Term Loan, 10.25%, 3/30/12		549		—
PIK fee 12.00%, 4/11/12	USD	9		—

				4,149,235

Automobiles — 1.2%
Ford Motor Co.:
Tranche B-1 Term Loan, 3.03%, 12/15/13		1,626		1,563,953
Tranche B-2 Term Loan, 3.03%, 12/15/13		146		139,915

				1,703,868

Beverages — 1.0%
SW Acquisitions Co., Inc., Term Loan, 5.75%, 6/01/16		1,368		1,369,720

Building Products — 1.8%
Building Materials Corp. of America, Term Loan Advance, 3.06%, 2/22/14		470		461,329
Goodman Global, Inc., Term Loan, 6.25%, 2/13/14		1,432		1,436,894
Momentive Performance Materials (Blitz 06-103 GmbH), Tranche B-2 Term Loan, 2.88%, 12/04/13	EUR	345		400,768
PGT Industries, Inc., Tranche A-2 Term Loan, 7.25%, 2/14/12	USD	226		209,183

				2,508,174

Capital Markets — 0.3%
Nuveen Investments, Inc., Term Loan (First Lien), 3.48% – 3.53%, 11/13/14		525		463,477

Chemicals — 5.2%
CF Industries, Inc., Term Loan B-1, 4.50%, 4/05/15		487		489,310
Chemtura Corp.:
Debtor in Possession Term Facility, 6.00%, 2/11/11		800		798,000
Exit Term Loan, 5.50%, 8/16/16		800		803,334
Gentek Holding, LLC, Tranche B Term Loan, 7.00%, 10/29/14		453		452,596
Huish Detergents, Inc., Tranche B Term Loan, 2.02%, 4/26/14		331		312,553
Lyondell Chemical Co., Exit Term Loan, 5.50%, 4/08/16		335		337,326
MacDermid, Inc., Tranche C Term Loan, 2.27%, 4/12/14	EUR	285		328,609
Nalco Co., Term Loan, 6.50%, 5/13/16	USD	1,262		1,266,457
PQ Corp. (FKA Niagara Acquisition, Inc.), Term Loan (First Lien), 3.52% – 3.73%, 7/30/14		1,304		1,191,937
Rockwood Specialties Group, Inc., Term Loan H, 6.00%, 5/15/14		678		678,089


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	35




Schedule of Investments (continued)	BlackRock Floating Rate Income Strategies Fund II, Inc. (FRB)
	(Percentages shown are based on Net Assets)


Floating Rate Loan Interests (c)	Par (000)			Value

Chemicals (concluded)
Solutia, Inc., Term Loan, 4.75%, 3/17/17	USD	647	$	646,907

				7,305,118

Commercial Banks — 0.9%
CIT Group, Inc., Term Loan, 6.25%, 1/20/12		1,325		1,320,681

Commercial Services & Supplies — 6.4%
ARAMARK Corp.:
Letter of Credit-1 Facility, 0.11%, 1/26/14		18		16,881
Letter of Credit-2 Facility, 0.11%, 7/26/16		29		27,635
U.S. Term Loan, 2.41%, 1/26/14		247		233,436
U.S. Term Loan B, 3.78%, 7/26/16		433		420,209
AWAS Finance Luxembourg Sarl, Term Loan, 7.75%, 6/10/16		675		678,937
Adesa, Inc. (KAR Holdings, Inc.), Initial Term Loan, 3.02%, 10/21/13		407		391,331
Advanced Disposal Services, Inc., Term Loan B, 6.00%, 1/14/15		498		497,500
Altegrity, Inc., Incremental Term Loan, 7.75%, 2/21/15		1,000		996,250
Casella Waste Systems, Inc., Term Loan B, 7.00%, 4/09/14		495		497,475
Diversey, Inc. (FKA Johnson Diversey, Inc.), Tranche B Dollar Term Loan, 5.50%, 11/24/15		498		496,256
Delos Aircraft, Inc., Term Loan 2, 7.00%, 3/17/16		600		603,250
International Lease Finance Corp., Term Loan 1, 6.75%, 3/17/15		1,150		1,159,105
Protection One, Inc., Term Loan, 6.00%, 6/04/16		870		860,213
Quad Graphics, Term Loan, 5.50%, 4/20/16		300		286,200
Synagro Technologies, Inc., Term Loan (First Lien), 2.27% – 2.28%, 4/02/14		970		819,650
West Corp., Incremental Term Loan B-3, 7.25%, 10/24/13		1,011		1,008,119

				8,992,447

Communications Equipment — 0.1%
Sorenson Communications, Tranche C Term Loan, 6.00%, 8/16/13		134		119,799

Construction & Engineering — 0.7%
Acquilex Holdings, LLC, Term Loan B, 5.50%, 4/01/16		100		99,334
Safway Services, LLC, First Out Tranche Loan, 9.00%, 12/18/17		900		900,000

				999,334

Construction Materials — 0.3%
Fairmount Minerals Ltd., Term Loan B, 6.25%, 8/05/16		475		475,198

Consumer Finance — 2.6%
AGFS Funding Co., Term Loan, 7.25%, 4/21/15		2,025		2,000,953
DaimlerChrysler Financial Services Americas LLC, Term Loan (Second Lien), 6.78%, 8/05/13		1,687		1,681,510

				3,682,463

Containers & Packaging — 0.8%
Anchor Glass Container Corp., Term Loan (First Lien), 6.00%, 3/02/16		325		321,913
BWAY Holding Co., Term Loan, 5.50% – 6.00%, 6/16/17		128		127,840
Berry Plastics Holding Corp., Term Loan C, 2.32% – 2.38%, 4/03/15		366		333,444
Graham Packaging Co., LP, Term Loan C, 6.75%, 4/05/14		274		275,460
ICL Industrial Containers ULC/ICL Contenants Industriels ULC (FKA BWAY Corp.), Term Loan C, 5.50% – 6.00%, 6/16/17		12		11,993

				1,070,650


Floating Rate Loan Interests (c)	Par (000)		Value

Diversified Consumer Services — 3.1%
Coinmach Service Corp., Term Loan, 3.35%, 11/14/14	USD	1,466	$	1,278,313
Laureate Education, Series A New Term Loan, 7.00%, 8/15/14		2,059		2,024,942
ServiceMaster Co.:
Closing Date Loan, 2.77% – 3.04%, 7/24/14		964		886,036
Delayed Draw Term Loan, 6.25% – 2.77%, 7/24/14		96		88,236

				4,277,527

Diversified Financial Services — 2.0%
MSCI, Inc., Term Loan, 4.75%, 6/01/16		923		925,379
Reynolds Group Holdings, Inc.:
Incremental US Term Loan, 6.25%, 5/05/16		600		595,750
US Term Loan, 6.25%, 5/05/16		596		592,498
Whitelabel IV SA:
Term Loan B-1, 5.00%, 8/11/17		188		236,279
Term Loan B-2, 5.00%, 8/11/17		312		391,010

				2,740,916

Diversified Telecommunication Services — 2.6%
Cincinnati Bell Inc., Tranche B Term Loan, 6.50%, 6/11/17		723		717,764
Integra Telecom Holdings, Inc., Term Loan, 9.25%, 4/15/15		800		798,000
Level 3 Communications, Incremental Term Loan, 2.53% – 2.78%, 3/13/14		1,650		1,478,039
Wind Finance SL SA, Euro Facility (Second Lien), 7.89%, 12/17/14	EUR	525		663,955

				3,657,758

Electric Utilities — 1.1%
New Development Holdings, LLC, Term Loan, 7.00%, 7/03/17	USD	1,500		1,515,000

Electrical Equipment — 0.5%
Baldor Electric Co., Term Loan, 5.25% – 5.50%, 1/31/14		640		639,625

Electronic Equipment, Instruments & Components — 1.4%
CDW LLC (FKA CDW Corp.), Term Loan B, 4.28%, 10/10/14		677		606,494
Flextronics International Ltd.:
Closing Date Loan B, 2.56%, 10/01/12		558		537,039
Delayed Draw Term Loan A-2, 2.51%, 10/01/14		21		19,419
Delayed Draw Term Loan A-3, 2.56%, 10/01/14		24		22,656
Styron Sarl, Term Loan B, 7.50%, 6/17/16		800		806,248

				1,991,856

Energy Equipment & Services — 0.5%
MEG Energy Corp., Tranche D Term Loan, 6.00%, 4/03/16		744		742,587

Food & Staples Retailing — 2.9%
AB Acquisitions UK Topco 2 Ltd. (FKA Alliance Boots), Facility B1, 3.55%, 7/09/15	GBP	675		963,006
Bolthouse Farms, Inc., Term Loan (First Lien), 5.50%, 2/11/16	USD	599		595,202
DS Waters of America, Inc., Term Loan, 2.51%, 10/29/12		456		435,918
Pierre Foods, Term Loan, 7.00%, 3/03/16		585		583,294
Pilot Travel Centers, LLC, Initial Tranche B Term Loan, 5.25%, 6/30/16		1,294		1,295,691
Rite Aid Corp., Term Loan B, 6.00%, 7/09/14		250		241,500

				4,114,611

Food Products — 2.6%
CII Investment, LLC (FKA Cloverhill):
Term Loan A, 8.50%, 10/14/14		445		444,771
Term Loan B, 8.50%, 10/14/14		541		540,943
Dole Food Co., Inc., Tranche B-1 Term Loan,
5.00% – 5.50%, 3/02/17		207		207,640


See Notes to Financial Statements.


36	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Schedule of Investments (continued)	BlackRock Floating Rate Income Strategies Fund II, Inc. (FRB)
	(Percentages shown are based on Net Assets)



Floating Rate Loan Interests (c)	Par (000)		Value

Food Products (concluded)
Michael Foods Group, Inc. (FKA M-Foods Holdings, Inc.), Term Loan B, 6.25%, 6/29/16	USD	500	$	500,357
Pilgrim’s Pride Corp., Term Loan A, 5.53%, 12/01/12		640		633,600
Pinnacle Foods Finance LLC, Tranche D Term Loan, 6.00%, 4/02/14		838		839,048
Solvest, Ltd. (Dole), Tranche C-1 Term Loan, 5.00% – 5.50%, 3/02/17		522		522,815

				3,689,174

Health Care Equipment & Supplies — 1.0%
Biomet, Inc., Dollar Term Loan, 3.26% – 3.54%, 3/25/15		425		410,687
DJO Finance LLC (FKA ReAble Therapeutics Finance LLC), Term Loan, 3.26%, 5/20/14		439		416,558
Fresenius AG:
Tranche C-1 Dollar Term Loan, 4.50%, 9/10/14		343		343,171
Tranche C-2 Term Loan, 4.50%, 9/10/14		183		183,340

				1,353,756

Health Care Providers & Services — 5.7%
CHS/Community Health Systems, Inc.:
Delayed Draw Term Loan, 2.55%, 7/25/14		89		83,541
Term Loan Facility, 2.55%, 7/25/14		1,668		1,572,484
DaVita, Inc., Tranche B-1 Term Loan, 1.77% – 2.04%, 10/05/12		175		172,301
Gentiva Health Services, Inc., Term Loan B, 6.75%, 8/12/16		600		592,125
HCA, Inc.:
Tranche A-1 Term Loan, 2.03%, 11/16/12		976		938,607
Tranche B-1 Term Loan, 2.78%, 11/18/13		311		298,895
Tranche B-2 Term Loan, 3.78%, 3/31/17		553		535,175
Harden Healthcare LLC:
Add-on Term Loan, 7.75%, 3/02/15		700		686,000
Tranche A Term Loan, 8.50%, 2/22/15		396		388,436
inVentiv Health, Inc. (FKA Ventive Health, Inc.), Term Loan B, 6.50%, 7/31/16		1,200		1,197,750
Renal Advantage Holdings, Inc., Tranche B Term Loan, 6.00%, 6/03/16		600		600,000
Vanguard Health Holding Co. II, LLC (Vanguard Health Systems, Inc.), Initial Term Loan, 5.00%, 1/29/16		893		882,066

				7,947,380

Health Care Technology — 0.7%
IMS Health, Inc., Tranche B Dollar Term Loan, 5.25%, 2/26/16		977		979,144

Hotels, Restaurants & Leisure — 4.7%
Harrah’s Operating Co., Inc.:
Term Loan B-1, 3.50%, 1/28/15		128		109,662
Term Loan B-3, 3.50% – 3.53%, 1/28/15		1,876		1,603,075
Penn National Gaming, Inc., Term Loan B, 2.01% – 2.24%, 10/03/12		450		438,916
Six Flags Theme Parks, Inc., Tranche B Term Loan (First Lien), 6.00%, 6/30/16		943		932,437
Travelport LLC (FKA Travelport, Inc.):
Delayed Draw Term Loan, 2.76%, 8/23/13		250		237,198
Original Post-First Amendment and Restatement Synthetic Letter of Credit Loan, 3.03%, 8/23/13		24		22,493
Tranche B Dollar Term Loan, 2.76%, 8/23/13		131		123,870
Universal City Development Partners Ltd.:
Term Loan, 7.75%, 11/06/14		746		749,981
Term Loan B, 5.50%, 11/16/14		769		769,967
VML US Finance LLC (FKA Venetian Macau), Term B:
Delayed Draw Project Loan, 5.04%, 5/25/12		534		524,738
Funded Project Loan, 5.04%, 5/27/13		1,036		1,017,964

				6,530,301


Floating Rate Loan Interests (c)	Par (000)		Value

IT Services — 4.5%
Audio Visual Services Group, Inc., Tranche B Term Loan (First Lien), 2.79%, 2/28/14 (f)	USD	495	$	366,234
Ceridian Corp., US Term Loan, 3.26%, 11/09/14		1,046		930,608
EVERTEC, Inc., Term Loan B, 7.00%, 8/20/16		400		391,000
First Data Corp.:
Initial Tranche B-1 Term Loan, 3.01%, 9/24/14		311		265,695
Initial Tranche B-2 Term Loan, 3.01%, 9/24/14		1,501		1,279,939
Initial Tranche B-3 Term Loan, 3.01%, 9/24/14		480		409,222
SunGard Data Systems, Inc. (Solar Capital Corp.), Incremental Term Loan, 6.75%, 2/28/14		1,110		1,108,367
TransUnion LLC, Term Loan, 6.75%, 6/15/17		1,500		1,513,594

				6,264,659

Independent Power Producers & Energy Traders — 1.0%
Dynegy Holdings, Inc.:
Term Letter of Credit Facility, 4.02%, 4/02/13		242		238,039
Tranche B Term Loan, 4.02%, 4/02/13		19		19,064
Texas Competitive Electric Holdings Co., LLC (TXU):
Initial Tranche B-1 Term Loan, 3.79% – 4.03%, 10/10/14		819		620,561
Initial Tranche B-3 Term Loan, 3.79% – 4.03%, 10/10/14		614		463,155

				1,340,819

Industrial Conglomerates — 1.4%
Sequa Corp., Term Loan, 3.79%, 12/03/14		2,122		1,952,134

Insurance — 0.5%
Alliant Holdings I, Inc., Term Loan, 3.53%, 8/21/14		810		769,589

Internet & Catalog Retail — 0.3%
FTD Group, Inc., Tranche B Term Loan, 6.75%, 8/26/14		382		382,115

Machinery — 0.3%
Oshkosh Truck Corp., Term Loan B, 6.44% – 6.54%, 12/06/13		487		489,796

Marine — 0.2%
Horizon Lines, LLC:
Revolving Loan, 3.52% – 3.55%, 8/08/12		195		166,986
Term Loan, 3.79%, 8/08/12		148		134,762

				301,748

Media — 16.0%
Cengage Learning Acquisitions, Inc. (Thomson Learning), Tranche 1 Incremental Term Loan, 7.50%, 7/03/14		1,755		1,749,201
Cequel Communications, LLC, New Term Loan, 2.30%, 11/05/13		530		509,095
Charter Communications Operating, LLC:
New Term Loan, 2.26%, 3/06/14		259		245,270
Term Loan B-1, 7.25%, 3/06/14		524		535,252
Term Loan C, 3.79%, 9/06/16		2,827		2,703,933
Clarke American Corp., Term Loan B, 2.76%, 6/30/14		723		622,942
FoxCo Acquisition Sub, LLC, Term Loan, 7.50%, 7/14/15		414		398,168
HMH Publishing Co., Ltd., Tranche A Term Loan, 5.79%, 6/12/14 (f)		1,008		917,024
Hanley-Wood, LLC, Term Loan, 2.56% – 2.63%, 3/10/14		975		421,688
Intelsat Corp. (FKA PanAmSat Corp.):
Tranche B-2-A Term Loan, 3.03%, 1/03/14		165		156,337
Tranche B-2-B Term Loan, 3.03%, 1/03/14		165		156,289
Tranche B-2-C Term Loan, 3.03%, 1/03/14		165		156,289


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	37




Schedule of Investments (continued)	BlackRock Floating Rate Income Strategies Fund II, Inc. (FRB)
	(Percentages shown are based on Net Assets)


Floating Rate Loan Interests (c)	Par (000)		Value

Media (concluded)
Intelsat Subsidiary Holding Co. Ltd., Term Loan B, 3.03%, 7/03/13	USD	728	$	694,367
Interactive Data Corp., Term Loan, 6.75%, 1/29/17		700		704,083
Lavena Holding 3 GmbH (Prosiebensat.1 Media AG), Facility B1, 3.52%, 6/30/15	EUR	337		322,477
MCNA Cable Holdings LLC (OneLink Communications), Loan, 6.89%, 3/01/13 (f)	USD	586		497,921
Mediacom Illinois, LLC (FKA Mediacom Communications, LLC):
Term Loan, 4.50%, 10/23/17		1,000		943,733
Tranche D Term Loan, 5.50%, 3/31/17		496		486,164
Newsday, LLC, Fixed Rate Term Loan, 10.50%, 8/01/13		1,325		1,406,156
Nielsen Finance LLC:
Class A, Dollar Term Loan, 2.29%, 8/09/13		13		12,557
Class B, Dollar Term Loan, 4.04%, 5/01/16		1,354		1,308,709
Class C, Dollar Term Loan, 4.04%, 5/28/16		352		337,668
Penton Media, Inc., Term Loan (First Lien), 5.00%, 8/01/14 (f)		486		335,005
Regal Cinemas Corp., Term Loan, 4.03%, 11/19/16		324		320,135
Sinclair Television Group, Inc., New Tranche B Loan, 5.50% – 6.25%, 10/29/15		614		614,148
Springer Science+Business Media SA, Facility A1, 6.75%, 7/01/16	EUR	1,000		1,253,522
Sunshine Acquisition Ltd. (FKA HIT Entertainment), Term Facility, 5.68%, 6/01/12	USD	522		487,136
TWCC Holdings Corp., Replacement Term Loan, 5.00%, 9/14/15		1,061		1,059,830
UPC Financing Partnership, Facility U, 4.64%, 12/31/17	EUR	1,050		1,235,167
Virgin Media Investment Holdings, Ltd., B Facility, 4.77%, 12/31/15	GBP	750		1,115,016
Yell Group Plc Facility A3-Yell Finance (UK) Limited, 2.60, 4/30/14	USD	703		678,516

				22,383,798

Multi-Utilities — 0.2%
FirstLight Power Resources, Inc. (FKA NE Energy, Inc.):
Synthetic Letter of Credit, 0.41%, 11/01/13		4		3,493
Term B Advance (First Lien), 3.06%, 11/01/13		224		207,769

				211,262

Multiline Retail — 1.4%
Dollar General Corp., Tranche B-2 Term Loan, 3.01% – 3.03%, 7/07/14		960		924,512
Hema Holding BV:
Facility B, 2.65%, 7/06/15		209		250,764
Facility C, 3.40%, 7/05/16		209		250,764
The Neiman Marcus Group, Inc., Term Loan, 2.30%, 4/06/13		540		511,563

				1,937,603

Oil, Gas & Consumable Fuels — 1.0%
Big West Oil, LLC, Term Loan, 12.00%, 7/23/15		500		506,041
Tronox Worldwide LLC:
Tranche B-1 Term Loan, 11.25%, 9/20/10		709		715,176
Tranche B-2 Term Loan, 11.25%, 9/20/10		191		192,137

				1,413,354

Paper & Forest Products — 1.2%
Georgia-Pacific LLC, Term Loan B, 2.30% – 2.53%, 12/23/12		847		834,628
Verso Paper Finance Holdings LLC, PIK Loan, 6.69% – 7.44%, 2/01/13 (f)		1,327		796,357

				1,630,985


Floating Rate Loan Interests (c)	Par (000)		Value

Personal Products — 0.0%
American Safety Razor Co., LLC, Term Loan (First Lien), 8.75%, 7/31/13 (f)	USD	54	$	49,564

Pharmaceuticals — 1.0%
Warner Chilcott Co., LLC, Term Loan A, 6.00%, 10/30/14		398		397,019
Warner Chilcott Corp.:
Additional Term Loan, 6.25%, 4/30/15		217		216,970
Term Loan B-1, 6.25%, 4/30/15		163		162,700
Term Loan B-2, 6.25%, 4/30/15		273		272,549
Term Loan B-3, 6.50%, 2/20/16		272		272,727
Term Loan B-4, 6.50%, 2/20/16		88		88,493

				1,410,458

Professional Services — 0.9%
Booz Allen Hamilton, Inc., Tranche C Term Loan, 6.00%, 7/31/15		1,244		1,243,439

Real Estate Management & Development — 1.9%
Mattamy Funding Partnership, Term Loan, 2.56%, 4/11/13		229		211,049
Realogy Corp.:
Delayed Draw Term Loan B, 3.30% – 3.53%, 10/10/13		1,393		1,202,268
Initial Term Loan B, 3.30%, 10/10/13		1,213		1,047,033
Synthetic Letter of Credit, 0.11%, 10/10/13		208		179,487

				2,639,837

Semiconductors & Semiconductor Equipment — 0.2%
Freescale Semiconductor, Inc., Extended Maturity Term Loan, 4.56%, 12/01/16		300		268,266

Software — 0.8%
Telcordia Technologies, Inc., Term Loan, 6.75%, 4/30/16		698		697,669
Vertafore, Inc., Term Loan B, 6.75%, 7/28/16		355		352,781

				1,050,450

Specialty Retail — 1.7%
Bass Pro Group LLC, Term Loan, 5.00% – 5.75%, 4/10/15		180		179,492
Burlington Coat Factory Warehouse Corp., Term Loan, 2.54% – 2.66%, 5/28/13		220		208,395
Matalan, Term Loan, 5.57%, 3/24/16	GBP	300		455,723
Michaels Stores, Inc., Term Loan B-1:
2.63% – 2.81%, 10/31/13	USD	523		493,755
4.88% – 5.06%, 7/31/16		277		266,804
Toys ‘R’ Us, Inc., Term Loan B, 6.00%, 8/17/16		800		797,995

				2,402,164

Textiles, Apparel & Luxury Goods — 0.8%
Hanesbrands, Inc., New Term Loan, 5.25%, 12/10/15		368		371,091
Phillips Van Heusen Corp., Tranche B Loan, 4.75%, 5/06/16		776		780,264

				1,151,355

Wireless Telecommunication Services — 3.0%
Digicel International Finance Ltd., U.S. Term Loan (Non-Rollover), 3.06%, 3/30/12		2,340		2,284,435
MetroPCS Wireless, Inc.:
Tranche B-1 Term Loan, 2.56%, 11/03/13		84		81,163
Tranche B-2 Term Loan B, 3.81%, 11/03/16		910		892,574
Vodafone Group Americas Finance 2 Inc., Initial Loan, 6.88%, 7/30/15		1,000		1,000,000

				4,258,172

Total Floating Rate Loan Interests — 93.0%				130,065,640


See Notes to Financial Statements.

38	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Schedule of Investments (continued)	BlackRock Floating Rate Income Strategies Fund II, Inc. (FRB)
	(Percentages shown are based on Net Assets)


Other Interests (h)	Beneficial Interest (000)			Value

Auto Components — 1.1%
Delphi Debtor-in-Possession Holding Co. LLP Class B Membership Interests	USD	—	(i)	$	1,558,950

Diversified Financial Services — 0.2%
J.G. Wentworth LLC Preferred Equity Interest (j)		—	(i)		299,336

Total Other Interests — 1.3%					1,858,286




Warrants (k)	Shares

HMH Holdings/EduMedia (Expires 3/09/17)		5,330			—

Total Warrants — 0.0%					—

Total Long-Term Investments (Cost — $176,704,266) — 121.7%					170,165,651




Short-Term Securities

BlackRock Liquidity Funds, TempFund, Institutional Class, 0.25% (l)(m)		1,227,551			1,227,551

Total Short-Term Securities (Cost — $1,227,551) — 0.9%					1,227,551




Options Purchased	Contracts

Over-the-Counter Call Options — 0.0%
Marsico Parent Superholdco LLC, Strike Price USD 942.86, expires 12/21/19, Broker Goldman Sachs Bank USA		11			—

Total Options Purchased (Cost — $10,756) — 0.0%					—

*Total Investments (Cost — $177,942,573) — 122.6%**					171,393,202
Liabilities in Excess of Other Assets — (22.6)%					(31,552,737	)

Net Assets — 100.0%				$	139,840,465




*	The cost and unrealized appreciation (depreciation) of investments as of August 31, 2010, as computed for federal income tax purposes, were as follows:


Aggregate cost	$	178,037,546

Gross unrealized appreciation	$	3,393,067
Gross unrealized depreciation		(10,037,411	)

Net unrealized depreciation	$	(6,644,344	)


(a)	Non-income producing security.

(b)	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.

(c)	Variable rate security. Rate shown is as of report date.

(d)	Convertible security.

(e)	Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.

(f)	Represents a payment-in-kind security which may pay interest/dividends in additional face/shares.

(g)	Issuer filed for bankruptcy and/or is in default of interest payments.

(h)	Other interests represent beneficial interest in liquidation trusts and other reorganization entities and are non-income producing.

(i)	Amount is less than $1,000.

(j)	The investment is held by a wholly owned taxable subsidiary of the Fund.

(k)	Warrants entitle the Fund to purchase a predetermined number of shares of common stock and are non-income producing. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date, if any.

(l)	Investments in companies considered to be an affiliate of the Fund during the period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:



Affiliate	Shares Held at February 28, 2010		Net Activity			Shares Held at August 31, 2010		Income

BlackRock Liquidity Funds, TempFund, Institutional Class		1,797,812		(570,261	)		1,227,551	$	2,472


(m)	Represents the current yield as of report date.

•	Foreign currency exchange contracts as of August 31, 2010 were as follows:



Currency Purchased		Currency Sold		Counterparty	Settlement Date	Unrealized Appreciation (Depreciation)

USD	211,852	EUR	160,000	Citibank NA	9/15/10	$	9,096
USD	6,736,299	EUR	5,347,500	Deutsche Bank AG	9/15/10		(40,177	)
EUR	619,200	USD	789,751	Citibank NA	9/15/10		(5,086	)
USD	2,855,495	GBP	1,852,500	Royal Bank of	10/20/10		15,399
				Scotland

Total						$	(20,768	)


•	For Fund compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

•	Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivatives, which are as follows:

	•	Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

	•	Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

	•	Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivatives)

	The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	39




Schedule of Investments (concluded)	BlackRock Floating Rate Income Strategies Fund II, Inc. (FRB)

The following tables summarize the inputs used as of August 31, 2010 in determining the fair valuation of the Fund’s investments and derivatives:



Valuation Inputs	Level 1		Level 2		Level 3			Total

Assets:
Investments in Securities:
Long-Term Investments:
Common Stocks	$	230,543		—	$	242,184		$	472,727
Corporate Bonds		—	$	36,771,757		997,241			37,768,998
Floating Rate Loan Interests		—		107,309,721		22,755,919			130,065,640
Other Interests		—		1,558,950		299,336			1,858,286
Short-Term Securities		1,227,551		—		—			1,227,551
Liabilities:
Unfunded Loan Commitments		—		—		(50,937	)		(50,937	)

Total	$	1,458,094	$	145,640,428	$	24,243,743		$	171,342,265



	Derivative Financial Instruments¹

Valuation Inputs	Level 1		Level 2			Level 3		Total

Assets:
Foreign currency exchange contracts		—	$	24,495			—	$	24,495
Liabilities:
Foreign currency exchange contracts		—		(45,263	)		—		(45,263	)

Total		—	$	(20,768	)		—	$	(20,768	)


	¹	Derivative financial instruments are foreign currency exchange contracts. Foreign currency exchange contracts are valued at the unrealized appreciation/depreciation on the instrument.

The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:



	Common Stocks			Corporate Bonds			Floating Rate Loan Interests			Other Interests			Unfunded Loan Commitments			Total

Assets/Liabilities:
Balance as of August 31, 2009	$	30,435		$	1,016,670		$	18,711,638		$	1,622,470		$	(34,025	)	$	21,347,188
Accrued discounts/premiums		—			24,219			64,432			—			—			88,651
Net realized gain (loss)		—			5			(954,756	)		—			—			(954,751	)
Net change in unrealized appreciation/depreciation²		3,159			(48,878	)		1,737,603			(63,520	)		(16,912	)		1,611,452
Purchases		—			4,776			7,083,084			—			—			7,087,860
Sales		—			449			(15,639,731	)		—			—			(15,639,282	)
Transfers in³		238,055			—			14,824,999			299,336			—			15,362,390
Transfers out³		(29,465	)		—			(3,071,350	)		(1,558,950	)		—			(4,659,765	)

Balance, as of August 31, 2010	$	242,184		$	997,241		$	22,755,919		$	299,336		$	(50,937	)	$	24,243,743


	²	Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations. The change in the unrealized appreciation/depreciation on the securities still held on August 31, 2010 was $231,584.

	³	The Fund’s policy is to recognize transfers in and transfers out as of the end of the period of the event or the change in circumstances that caused the transfer.


See Notes to Financial Statements.

40	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Schedule of Investments August 31, 2010 (Unaudited)	BlackRock Senior High Income Fund, Inc. (ARK)
	(Percentages shown are based on Net Assets)


Common Stocks (a)	Shares		Value

Building Products — 0.2%
Masonite Worldwide Holdings		12,832	$	487,616

Capital Markets — 0.2%
E*Trade Financial Corp.		27,100		336,311

Chemicals — 0.0%
GEO Specialty Chemicals, Inc.		142,466		54,693
Wellman Holdings, Inc.		5,131		256

				54,949

Construction Materials — 0.0%
Nortek, Inc.		2,570		106,655

Containers & Packaging — 0.1%
Smurfit Kappa Plc		18,171		158,888

Metals & Mining — 0.1%
Euramax International		935		308,517

Paper & Forest Products — 0.8%
Ainsworth Lumber Co. Ltd.		346,134		811,493
Ainsworth Lumber Co. Ltd. (b)		421,556		988,315

				1,799,808

Software — 0.2%
HMH Holdings/EduMedia		76,829		384,143

Total Common Stocks — 1.6%				3,636,887




Corporate Bonds	Par (000)

Aerospace & Defense — 1.2%
Bombardier, Inc., 7.75%, 3/15/20 (b)	$	900		967,500
Kratos Defense & Security Solutions, Inc., 10.00%, 6/01/17		600		619,500
TransDigm, Inc., 7.75%, 7/15/14		1,100		1,133,000

				2,720,000

Airlines — 0.8%
Air Canada, 9.25%, 8/01/15 (b)		700		686,000
Delta Air Lines, Inc., Series B, 9.75%, 12/17/16		475		498,875
United Air Lines, Inc., 12.75%, 7/15/12		595		663,113

				1,847,988

Auto Components — 1.3%
Icahn Enterprises LP:
7.75%, 1/15/16		160		158,800
8.00%, 1/15/18		2,690		2,676,550
Venture Holdings Co. LLC (a)(c)(d):
12.00%, 6/01/09		700		—
Series B, 9.50%, 7/01/05		3,325		333

				2,835,683

Biotechnology — 0.1%
QHP Pharma, 10.25%, 35 (b)		262		267,262

Building Products — 2.8%
Building Materials Corp. of America, 7.00%, 2/15/20 (b)		675		671,625
CPG International I, Inc.:
7.50%, 7/01/12 (e)		3,500		3,381,875
10.50%, 7/01/13		1,500		1,498,125
Ply Gem Industries, Inc., 11.75%, 6/15/13		725		746,750

				6,298,375


Corporate Bonds	Par (000)		Value

Chemicals — 3.0%
American Pacific Corp., 9.00%, 2/01/15	$	610	$	603,138
CF Industries, Inc., 6.88%, 5/01/18		770		810,425
GEO Specialty Chemicals, Inc. (b):
7.50%, 3/31/15 (f)(g)		1,869		1,214,605
10.00%, 3/31/15		1,839		1,195,168
OXEA Finance/Cy SCA, 9.50%, 7/15/17 (b)		240		253,200
Wellman Holdings, Inc., Subordinate Note (g):
(Second Lien), 10.00%, 1/29/19 (b)		2,383		2,073,210
(Third Lien), 5.00%, 1/29/19 (f)		1,680		655,335

				6,805,081

Commercial Banks — 2.0%
CIT Group, Inc., 7.00%, 5/01/17		4,845		4,555,812

Commercial Services & Supplies — 1.0%
ACCO Brands Corp., 10.63%, 3/15/15		365		401,500
Clean Harbors, Inc., 7.63%, 8/15/16		700		717,500
The Geo Group, Inc., 7.75%, 10/15/17 (b)		450		463,500
RSC Equipment Rental, Inc., 10.00%, 7/15/17 (b)		550		599,500

				2,182,000

Construction Materials — 1.2%
Nortek, Inc., 11.00%, 12/01/13		2,581		2,720,173

Consumer Finance — 1.4%
Credit Acceptance Corp., 9.13%, 2/01/17 (b)		300		310,875
Ford Motor Credit Co. LLC:
3.28%, 1/13/12 (e)		1,340		1,313,200
6.63%, 8/15/17		400		406,549
Inmarsat Finance Plc, 7.38%, 12/01/17 (b)		1,150		1,178,750

				3,209,374

Containers & Packaging — 2.3%
Ball Corp., 6.75%, 9/15/20		325		342,062
Berry Plastics Corp., 8.25%, 11/15/15		1,100		1,102,750
Clondalkin Acquisition BV, 2.54%, 12/15/13 (b)(e)		2,000		1,745,000
Crown Americas LLC, 7.63%, 5/15/17 (b)		400		427,000
Graphic Packaging International, Inc., 9.50%, 6/15/17		555		591,075
Smurfit Kappa Funding Plc, 7.75%, 4/01/15		1,050		1,050,000

				5,257,887

Diversified Financial Services — 4.1%
Ally Financial, Inc. (b):
8.30%, 2/12/15		4,700		4,888,000
7.50%, 9/15/20		1,650		1,633,500
Axcan Intermediate Holdings, Inc., 12.75%, 3/01/16		370		370,463
Highland Legacy Ltd., 6.72%, 6/01/11 (b)(e)		3,081		1,417,351
Reynolds Group DL Escrow, Inc., 7.75%, 10/15/16 (b)		955		962,162

				9,271,476

Diversified Telecommunication Services — 2.8%
Frontier Communications Corp., 8.25%, 4/15/17		1,460		1,543,950
ITC Deltacom, Inc., 10.50%, 4/01/16		900		886,500
Nordic Telephone Co. Holdings ApS, 8.88%, 5/01/16 (b)		180		189,000
Qwest Corp., 8.38%, 5/01/16		3,000		3,495,000
tw telecom holdings, Inc., 8.00%, 3/01/18		230		239,200

				6,353,650

Energy Equipment & Services — 0.8%
Compagnie Générale de Géophysique-Veritas, 7.50%, 5/15/15		965		955,350
Expro Finance Luxembourg SCA, 8.50%, 12/15/16 (b)		1,000		935,000

				1,890,350


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	41




Schedule of Investments (continued)	BlackRock Senior High Income Fund, Inc. (ARK)
	(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value

Food & Staples Retailing — 0.4%
Rite Aid Corp., 9.75%, 6/12/16	$	825	$	876,562

Food Products — 0.7%
B&G Foods, Inc., 7.63%, 1/15/18		500		514,375
Bumble Bee Foods LLC, 7.75%, 12/15/15 (b)		380		401,850
Smithfield Foods, Inc., 10.00%, 7/15/14 (b)		630		703,237

				1,619,462

Health Care Equipment & Supplies — 0.7%
DJO Finance LLC, 10.88%, 11/15/14		710		760,587
Hologic, Inc., 2.00%, 12/15/37 (g)(h)		830		750,113

				1,510,700

Health Care Providers & Services — 1.8%
American Renal Holdings, 8.38%, 5/15/18 (b)		245		245,000
HCA, Inc., 8.50%, 4/15/19		210		230,213
inVentiv Health, Inc., 10.00%, 8/15/18 (b)		210		205,275
Tenet Healthcare Corp.:
10.00%, 5/01/18		850		956,250
8.88%, 7/01/19		2,230		2,411,187

				4,047,925

Health Care Technology — 0.8%
IMS Health, Inc., 12.50%, 3/01/18 (b)		1,580		1,830,825

Hotels, Restaurants & Leisure — 1.2%
Diamond Resorts Corp., 12.00%, 8/15/18 (b)		540		510,300
Little Traverse Bay Bands of Odawa Indians, 10.25%, 2/15/14 (a)(b)(c)		1,210		408,375
MGM Mirage, 13.00%, 11/15/13		80		92,400
MGM Resorts International:
10.38%, 5/15/14		720		784,800
11.13%, 11/15/17		750		838,125
Marina District Finance Co., Inc., 9.88%, 8/15/18 (b)		160		159,600
Tropicana Entertainment LLC, Series WI, 9.63%, 12/15/14 (a)(c)		220		161

				2,793,761

Household Durables — 0.9%
Beazer Homes USA, Inc., 12.00%, 10/15/17		1,000		1,126,250
K. Hovnanian Enterprises, Inc., 10.63%, 10/15/16		900		873,000

				1,999,250

Independent Power Producers & Energy Traders — 2.7%
The AES Corp., 8.75%, 5/15/13 (b)		139		141,259
Calpine Construction Finance Co. LP, 8.00%, 6/01/16 (b)		1,600		1,680,000
Energy Future Holdings Corp., 10.00%, 1/15/20 (b)		1,065		1,025,598
NRG Energy, Inc.:
7.25%, 2/01/14		2,020		2,060,400
7.38%, 2/01/16		375		377,812
7.38%, 1/15/17		365		367,738
8.50%, 6/15/19		500		513,750

				6,166,557

Industrial Conglomerates — 1.5%
Sequa Corp. (b):
11.75%, 12/01/15		1,430		1,472,900
13.50%, 12/01/15 (f)		1,930		2,007,176

				3,480,076

Machinery — 1.7%
ESCO Corp., 4.41%, 12/15/13 (b)(e)		1,540		1,401,400
Navistar International Corp., 8.25%, 11/01/21		1,500		1,571,250
Titan International, Inc., 8.00%, 1/15/12		770		800,800

				3,773,450


Corporate Bonds	Par (000)		Value

Media — 6.5%
Affinion Group, Inc., 10.13%, 10/15/13	$	1,455	$	1,491,375
CCO Holdings LLC, 7.88%, 4/30/18 (b)		1,075		1,112,625
CSC Holdings, Inc., 8.50%, 4/15/14		390		426,075
Clear Channel Worldwide Holdings, Inc.:
9.25%, 12/15/17		340		352,750
Series B, 9.25%, 12/15/17		2,757		2,891,404
DISH DBS Corp.:
7.00%, 10/01/13		850		885,062
6.63%, 10/01/14		750		766,875
Gannett Co., Inc.:
10.00%, 4/01/16		205		229,100
9.38%, 11/15/17 (b)		530		580,350
Interactive Data Corp., 10.25%, 8/01/18 (b)		900		933,750
McClatchy Co., 11.50%, 2/15/17 (b)		745		769,213
Nielsen Finance LLC, 11.63%, 2/01/14		1,000		1,121,250
Regal Entertainment Group, 9.13%, 8/15/18		290		297,250
UPC Germany GmbH, 8.13%, 12/01/17 (b)		1,500		1,541,250
Virgin Media Secured Finance Plc, 6.50%, 1/15/18		1,250		1,300,000

				14,698,329

Metals & Mining — 0.9%
Aleris International, Inc., 9.00%, 12/15/14 (a)(c)		840		1,680
Murray Energy Corp., 10.25%, 10/15/15 (b)		260		265,850
RathGibson, Inc., 11.25%, 2/15/14 (a)(c)		2,175		23,381
Ryerson, Inc., 7.84%, 11/01/14 (e)		1,800		1,669,500

				1,960,411

Multiline Retail — 0.8%
Dollar General Corp.:
10.63%, 7/15/15		660		724,350
11.88%, 7/15/17 (f)		948		1,090,200

				1,814,550

Oil, Gas & Consumable Fuels — 2.5%
Arch Coal, Inc., 8.75%, 8/01/16		140		151,550
Atlas Energy Operating Co. LLC:
12.13%, 8/01/17		825		947,719
10.75%, 2/01/18		200		220,500
Coffeyville Resources LLC, 9.00%, 4/01/15 (b)		260		267,150
Consol Energy, Inc., 8.25%, 4/01/20 (b)		900		955,125
Crosstex Energy LP, 8.88%, 2/15/18		120		123,900
Denbury Resources, Inc.:
9.75%, 3/01/16		520		573,300
8.25%, 2/15/20		351		374,692
Forest Oil Corp., 8.50%, 2/15/14		280		297,500
Massey Energy Co., 6.88%, 12/15/13		800		810,000
OPTI Canada, Inc., 9.00%, 12/15/12 (b)		1,000		1,002,500

				5,723,936

Paper & Forest Products — 1.8%
Ainsworth Lumber Co. Ltd., 11.00%, 7/29/15 (b)(f)		1,356		1,159,529
Clearwater Paper Corp., 10.63%, 6/15/16		365		410,625
Georgia-Pacific LLC, 8.25%, 5/01/16 (b)		1,630		1,784,850
Verso Paper Holdings LLC:
11.50%, 7/01/14		315		332,325
Series B, 4.22%, 8/01/14 (e)		485		397,700

				4,085,029

Pharmaceuticals — 0.4%
Angiotech Pharmaceuticals, Inc., 4.29%, 12/01/13 (e)		955		771,163

Real Estate Investment Trusts (REITs) — 0.3%
Omega Healthcare Investors, Inc., 7.50%, 2/15/20 (b)		530		552,525


See Notes to Financial Statements.

42	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Schedule of Investments (continued)	BlackRock Senior High Income Fund, Inc. (ARK)
	(Percentages shown are based on Net Assets)


Corporate Bonds	Par (000)		Value

Specialty Retail — 0.4%
United Auto Group, Inc., 7.75%, 12/15/16	$	845	$	806,975

Textiles, Apparel & Luxury Goods — 0.5%
Phillips-Van Heusen Corp.:
7.38%, 5/15/20		485		499,550
7.75%, 11/15/23		215		233,952
Quiksilver, Inc., 6.88%, 4/15/15		525		485,625

				1,219,127

Wireless Telecommunication Services — 3.4%
Cricket Communications, Inc.:
10.00%, 7/15/15		140		146,650
7.75%, 5/15/16		1,770		1,827,525
Digicel Group Ltd., 12.00%, 4/01/14 (b)		800		914,000
MetroPCS Wireless, Inc.:
9.25%, 11/01/14		2,000		2,080,000
9.25%, 11/01/14		10		10,400
Nextel Communications, Inc.:
Series E, 6.88%, 10/31/13		1,340		1,336,650
Series F, 5.95%, 3/15/14		100		96,625
Orascom Telecom Finance SCA, 7.88%, 2/08/14 (b)		395		375,250
Sprint Capital Corp.:
7.63%, 1/30/11		220		223,850
8.38%, 3/15/12		325		343,687
6.88%, 11/15/28		370		308,950

				7,663,587

Total Corporate Bonds — 54.7%				123,609,311




Floating Rate Loan Interests (e)

Aerospace & Defense — 0.7%
Hawker Beechcraft Acquisition Co., LLC:
Letter of Credit Linked Deposit, 0.43%, 3/26/14		52		41,029
Term Loan, 2.26%, 3/26/14		866		689,965
TASC, Inc., Tranche B Term Loan, 5.75%, 12/18/15		875		877,187

				1,608,181

Airlines — 0.5%
Delta Air Lines, Inc., Credit-Linked Deposit Loan, 0.11% – 2.28%, 4/30/12		1,213		1,159,453
Auto Components — 3.6%
Affinion Group Holdings, Inc., Loan, 8.51%, 3/01/12 (f)		1,543		1,481,063
Affinion Group, Inc., Tranche B Term Loan, 5.00%, 10/09/16		748		719,756
Allison Transmission, Inc., Term Loan, 3.04%, 8/07/14		5,421		4,995,521
Dana Holding Corp., Term Advance, 4.52% – 6.50%, 1/30/15		592		580,817
The Goodyear Tire & Rubber Co., Loan (Second Lien), 2.24%, 4/30/14		300		277,734

				8,054,891

Automobiles — 0.7%
Ford Motor Co.:
Tranche B-1 Term Loan, 3.03%, 12/15/13		1,548		1,489,061
Tranche B-2 Term Loan, 3.03%, 12/15/13		170		162,994

				1,652,055

Beverages — 0.6%
SW Acquisitions Co., Inc., Term Loan, 5.75%, 6/01/16		1,443		1,444,603


Floating Rate Loan Interests (e)	Par (000)		Value

Building Products — 0.9%
Building Materials Corp. of America, Term Loan Advance, 3.06%, 2/22/14	$	415	$	407,498
Goodman Global, Inc., Term Loan, 6.25%, 2/13/14		1,523		1,528,082

				1,935,580

Capital Markets — 0.2%
Nuveen Investments, Inc., Term Loan (First Lien), 3.48% – 3.53%, 11/13/14		625		551,758

Chemicals — 3.3%
CF Industries, Inc., Term Loan B-1, 4.50%, 4/05/15		796		799,522
Chemtura Corp.:
Debtor in Possession Term Facility, 6.00%, 2/11/11		800		798,000
Exit Term Loan, 5.50%, 8/16/16		800		803,334
Gentek Holding, LLC, Tranche B Term Loan, 7.00%, 10/29/14		362		362,077
Nalco Co., Term Loan, 6.50%, 5/13/16		1,015		1,018,132
PQ Corp. (FKA Niagara Acquisition, Inc.), Term Loan (First Lien), 3.52% – 3.73%, 7/30/14		2,166		1,980,629
Rockwood Specialties Group, Inc., Term Loan H, 6.00%, 5/15/14		736		735,226
Solutia, Inc., Term Loan, 4.75%, 3/17/17		997		996,396

				7,493,316

Commercial Banks — 0.5%
CIT Group, Inc., Term Loan, 6.25%, 1/20/12		1,025		1,021,659

Commercial Services & Supplies — 3.8%
ARAMARK Corp.:
Letter of Credit-1 Facility, 0.11%, 1/26/14		33		31,209
Letter of Credit-2 Facility, 0.11%, 7/26/16		41		40,039
U.S. Term Loan, 2.41%, 1/26/14		457		431,557
U.S. Term Loan B, 3.78%, 7/26/16		628		608,813
AWAS Finance Luxembourg Sarl, Term Loan, 7.75%, 6/10/16		1,125		1,131,562
Altegrity, Inc., Incremental Term Loan, 7.75%, 2/21/15		1,500		1,494,375
Casella Waste Systems, Inc., Term Loan B, 7.00%, 4/09/14		218		218,889
Delos Aircraft, Inc., Term Loan 2, 7.00%, 3/17/16		1,075		1,080,823
International Lease Finance Corp., Term Loan 1, 6.75%, 3/17/15		1,500		1,511,876
Quad Graphics, Term Loan, 5.50%, 4/20/16		500		477,000
Synagro Technologies, Inc., Term Loan (First Lien), 2.27% – 2.28%, 4/02/14		422		356,370
West Corp., Incremental Term Loan B-3, 7.25%, 10/24/13		1,093		1,089,582

				8,472,095

Construction & Engineering — 0.9%
Brand Energy & Infrastructure Services, Inc.
(FR Brand Acquisition Corp.), Synthetic Letter of Credit, Term Loan (First Lien), 0.56%, 2/07/14		500		455,625
Safway Services, LLC, First Out Tranche Loan, 9.00%, 12/18/17		1,500		1,500,000

				1,955,625

Construction Materials — 0.2%
Fairmount Minerals Ltd., Term Loan B, 6.25%, 8/05/16		350		350,146

Consumer Finance — 1.1%
AGFS Funding Co., Term Loan, 7.25%, 4/21/15		2,500		2,470,312

Containers & Packaging — 0.4%
Anchor Glass Container Corp., Term Loan (First Lien), 6.00%, 3/02/16		149		147,261
BWAY Holding Co., Term Loan B, 5.50% – 6.00%, 6/16/17		197		196,326
Berry Plastics Holding Corp., Term Loan C, 2.32% – 2.38%, 4/03/15		496		452,306


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	43




Schedule of Investments (continued)	BlackRock Senior High Income Fund, Inc. (ARK)
	(Percentages shown are based on Net Assets)


Floating Rate Loan Interests (e)	Par (000)		Value

Containers & Packaging (concluded)
ICL Industrial Containers ULC/ICL Contenants Industriels ULC (FKA BWAY Corp.), Term Loan C, 5.50% – 6.00%, 6/16/17	$	18	$	18,417

				814,310

Diversified Consumer Services — 2.6%
Coinmach Service Corp., Term Loan, 3.35%, 11/14/14		1,955		1,704,417
Laureate Education, Series A New Term Loan, 7.00%, 8/15/14		2,945		2,895,832
ServiceMaster Co.:
Closing Date Loan, 2.77% – 3.04%, 7/24/14		1,200		1,103,366
Delayed Draw Term Loan, 2.77%, 7/24/14		120		109,879

				5,813,494

Diversified Financial Services — 0.8%
Reynolds Group Holdings, Inc.:
Incremental US Term Loan, 6.25%, 5/05/16		800		794,334
US Term Loan, 6.25%, 5/05/16		894		889,679

				1,684,013

Diversified Telecommunication Services — 2.0%
Cincinnati Bell, Inc., Tranche B Term Loan, 6.50%, 6/11/17		1,022		1,014,769
Integra Telecom Holdings, Inc., Term Loan, 9.25%, 4/15/15		925		922,687
Level 3 Communications, Incremental Term Loan, 2.53% – 2.78%, 3/13/14		2,225		1,993,113
Wind Telecomunicazioni SpA:
Term Loan Facility B2, 4.66%, 5/26/14		300		291,187
Term Loan Facility C2, 3.66%, 5/24/13		300		291,188

				4,512,944

Electric Utilities — 0.8%
New Development Holdings LLC, Term Loan, 7.00%, 7/03/17		1,750		1,767,500

Electrical Equipment — 0.3%
Baldor Electric Co., Term Loan, 5.25% – 5.50%, 1/31/14		585		584,773

Electronic Equipment, Instruments &
Components — 0.8%
CDW LLC (FKA CDW Corp.), Term Loan, 4.28%, 10/10/14		1,212		1,085,335
Styron Sarl, Term Loan, 7.50%, 6/17/16		800		806,248

				1,891,583

Energy Equipment & Services — 0.4%
MEG Energy Corp., Tranche D Term Loan, 6.00%, 4/03/16		967		964,650

Food & Staples Retailing — 0.8%
Pierre Foods, Term Loan, 7.00%, 3/03/16		674		671,957
Pilot Travel Centers LLC, Initial Tranche B Term Loan, 5.25%, 6/30/16		1,078		1,079,742

				1,751,699

Food Products — 1.7%
Dole Food Co., Inc., Tranche B-1 Term Loan, 5.00% – 5.50%, 3/02/17		437		437,396
Michael Foods Group, Inc. (FKA M-Foods Holdings, Inc., Term Loan B, 6.25%, 6/29/16		500		500,357
Pilgrim’s Pride Corp., Term Loan A, 5.53%, 12/01/12		725		717,750
Pinnacle Foods Finance LLC, Tranche D Term Loan, 6.00%, 4/02/14		1,096		1,097,370
Solvest, Ltd. (Dole), Tranche C-1 Term Loan, 5.00% – 5.50%, 3/02/17		1,081		1,083,316

				3,836,189


Floating Rate Loan Interests (e)	Par (000)		Value

Health Care Equipment & Supplies — 0.4%
DJO Finance LLC (FKA ReAble Therapeutics Finance LLC), Term Loan, 3.26%, 5/20/14	$	878	$	833,117

Health Care Providers & Services — 4.9%
CHS/Community Health Systems, Inc.:
Delayed Draw Term Loan, 2.55%, 7/25/14		122		115,481
Term Loan Facility, 2.55%, 7/25/14		2,346		2,212,287
DaVita, Inc., Tranche B-1 Term Loan, 1.77% – 2.04%, 10/05/12		300		295,374
Gentiva Health Services, Inc., Term Loan B, 6.75%, 8/12/16		600		592,125
HCA, Inc.:
Tranche A-1 Term Loan, 2.03%, 11/16/12		2,495		2,400,150
Tranche B-1 Term Loan, 2.78%, 11/18/13		125		120,312
Harden Healthcare LLC:
Add-on Term Loan, 8.50%, 2/22/15		396		388,436
Tranche A Term Loan, 7.75%, 3/02/15		1,400		1,372,000
inVentiv Health, Inc. (FKA Ventive Health, Inc.), Term Loan B, 6.50%, 7/31/16		2,000		1,996,250
Renal Advantage Holdings, Inc., Tranche B Term Loan, 6.00%, 6/03/16		600		600,000
Vanguard Health Holding Co. II, LLC (Vanguard Health Systems, Inc.), Initial Term Loan, 5.00%, 1/29/16		967		955,875

				11,048,290

Health Care Technology — 0.6%
IMS Health Inc., Tranche B Dollar Term Loan, 5.25%, 2/26/16		1,454		1,457,111

Hotels, Restaurants & Leisure — 3.1%
Harrah’s Operating Co., Inc.:
Term Loan B-3, 3.50% – 3.53%, 1/28/15		976		834,364
Term Loan B-4, 9.50%, 10/31/16		1,244		1,269,316
Six Flags Theme Parks, Inc., Tranche B Term Loan (First Lien), 6.00%, 6/30/16		1,838		1,817,057
Universal City Development Partners Ltd., Loan, 7.75%, 11/06/14		1,244		1,249,969
VML US Finance LLC (FKA Venetian Macau):
Term B Delayed Draw Project Loan, 5.04%, 5/25/12		546		536,546
Term B Funded Project Loan, 5.04%, 5/27/13		1,415		1,386,668

				7,093,920

IT Services — 3.6%
Audio Visual Services Group, Inc., Tranche B Term Loan (First Lien), 2.79%, 2/28/14 (f)		990		732,468
Ceridian Corp., US Term Loan, 3.26%, 11/09/14		1,470		1,307,975
EVERTEC, Inc., Term Loan B, 7.00%, 8/20/16		675		659,813
First Data Corp.:
Initial Tranche B-1 Term Loan, 3.01%, 9/24/14		175		149,384
Initial Tranche B-2 Term Loan, 3.01%, 9/24/14		1,449		1,235,373
Initial Tranche B-3 Term Loan, 3.01%, 9/24/14		1,073		914,979
SunGard Data Systems, Inc. (Solar Capital Corp.), Incremental Term Loan, 6.75%, 2/28/14		853		851,796
TransUnion LLC, Term Loan, 6.75%, 6/15/17		2,250		2,270,392

				8,122,180

Independent Power Producers & Energy Traders — 0.3%
Dynegy Holdings, Inc.:
Term Letter of Credit Facility, 4.02%, 4/02/13		192		189,027
Tranche B Term Loan, 4.02%, 4/02/13		15		15,139
Texas Competitive Electric Holdings Co., LLC (TXU):
Initial Tranche B-2 Term Loan, 3.79% – 4.07%, 10/10/14		481		364,674
Initial Tranche B-3 Term Loan, 3.79% – 4.03%, 10/10/14		226		170,298

				739,138


See Notes to Financial Statements.

44	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Schedule of Investments (continued)	BlackRock Senior High Income Fund, Inc. (ARK)
	(Percentages shown are based on Net Assets)


Floating Rate Loan Interests (e)	Par (000)		Value

Industrial Conglomerates — 0.2%
Sequa Corp., Term Loan, 3.79%, 12/03/14	$	475	$	437,000

Insurance — 0.1%
Alliant Holdings I, Inc., Term Loan, 3.53%, 8/21/14		139		132,262

Internet & Catalog Retail — 0.3%
FTD Group, Inc., Tranche B Term Loan, 6.75%, 8/26/14		573		573,173

Leisure Equipment & Products — 0.1%
Fender Musical Instruments Corp.:
Delayed Draw Loan, 2.55%, 6/09/14		109		90,666
Initial Loan, 2.79%, 6/09/14		215		179,482

				270,148

Machinery — 0.3%
Oshkosh Truck Corp., Term Loan B, 6.44% – 6.54%, 12/06/13		661		664,534

Media — 9.6%
Cengage Learning Acquisitions, Inc. (Thomson Learning), Tranche 1 Incremental Term Loan, 7.50%, 7/03/14		3,435		3,423,727
Charter Communications Operating, LLC:
New Term Loan, 2.26%, 3/06/14		273		258,179
Term Loan B1, 7.25%, 3/06/14		873		892,087
Term Loan C, 3.79%, 9/06/16		3,093		2,958,615
Ellis Communications KDOC, LLC, Loan, 10.00%, 12/30/11		3,879		1,454,482
HMH Publishing Co., Ltd., Tranche A Term Loan, 5.79%, 6/12/14 (f)		1,888		1,718,697
Hanley-Wood, LLC, Term Loan, 2.56% – 2.63%, 3/10/14		975		421,687
Interactive Data Corp., Term Loan, 6.75%, 1/29/17		700		704,083
Mediacom Illinois, LLC (FKA Mediacom Communications, LLC), Tranche D Term Loan, 5.50%, 3/31/17		496		486,164
Newsday, LLC, Fixed Rate Term Loan, 10.50%, 8/01/13		3,250		3,449,062
Penton Media, Inc., Term Loan (First Lien), 5.00%, 8/01/14 (f)		728		502,507
Sinclair Television Group, Inc., New Tranche B Loan, 5.50% – 6.25%, 10/29/15		1,011		1,011,982
Sunshine Acquisition Ltd. (FKA HIT Entertainment), Term Facility, 5.68%, 6/01/12		970		904,682
TWCC Holdings Corp., Replacement Term Loan, 5.00%, 9/14/15		1,040		1,039,071
UPC Financing Partnership, Facility Term Loan, 4.25%, 12/30/16		1,750		1,680,000
Yell Group Plc Facility A3-Yell Finance (UK) Ltd., 2.60%, 8/09/11		703		678,516

				21,583,541

Metals & Mining — 0.7%
Euramax International, Inc., Domestic Term Loan:
10.00%, 6/29/13		858		797,682
13.00%, 6/29/13 (f)		896		832,873

				1,630,555

Multi-Utilities — 0.2%
FirstLight Power Resources, Inc. (FKA NE Energy, Inc.):
Synthetic Letter of Credit, 0.41%, 11/01/13		7		6,669
Term B Advance (First Lien), 3.06%, 11/01/13		428		396,712

				403,381


Floating Rate Loan Interests (e)	Par (000)		Value

Multiline Retail — 0.6%
Dollar General Corp., Tranche B-2 Term Loan, 3.01% – 3.03%, 7/07/14	$	983	$	945,881
The Neiman Marcus Group, Inc., Term Loan, 2.30%, 4/06/13		507		480,151

				1,426,032

Oil, Gas & Consumable Fuels — 1.0%
Big West Oil, LLC, Term Loan, 12.00%, 7/23/15		750		759,062
Tronox Worldwide LLC:
Tranche B-1 Term Loan, 11.25%, 9/20/10		1,182		1,191,960
Tranche B-2 Term Loan, 11.25%, 9/20/10		318		320,228

				2,271,250

Personal Products — 0.0%
American Safety Razor Co., LLC, Term Loan (First Lien), 8.75%, 7/31/13 (f)		81		74,352

Pharmaceuticals — 0.7%
Warner Chilcott Co., LLC, Term Loan A, 6.00%, 10/30/14		382		381,432
Warner Chilcott Corp.:
Additional Term Loan B, 6.25%, 4/30/15		360		359,650
Term Loan B-1, 6.25%, 4/30/15		149		148,410
Term Loan B-2, 6.25%, 4/30/15		246		245,418
Term Loan B-3, 6.50%, 2/20/16		385		386,364
Term Loan B-4, 6.50%, 2/20/16		125		125,365

				1,646,639

Professional Services — 0.4%
Booz Allen Hamilton, Inc., Tranche C Term Loan, 6.00%, 7/31/15		995		994,751

Real Estate Management & Development — 0.7%
Realogy Corp., Synthetic Letter of Credit, 0.11%, 10/10/13		1,853		1,598,751

Semiconductors & Semiconductor Equipment — 0.2%
Freescale Semiconductor, Inc., Extended Maturity Term Loan, 4.56%, 12/01/16		390		348,745

Software — 0.2%
Telcordia Technologies, Inc., Term Loan, 6.75%, 4/30/16		549		548,168

Specialty Retail — 1.2%
Burlington Coat Factory Warehouse Corp., Term Loan, 2.54% – 2.66%, 5/28/13		355		336,274
Michaels Stores, Inc.:
Term Loan B-1, 2.63% – 2.81%, 10/31/13		733		691,584
Term Loan B-2, 4.88% – 5.06%, 7/31/16		798		769,875
Toys ‘R’ Us, Inc., Term Loan B, 6.00%, 8/17/16		1,000		997,494

				2,795,227

Textiles, Apparel & Luxury Goods — 0.3%
Phillips Van Heusen Corp., U.S. Tranche B Term Loan, 4.75%, 5/06/16		748		751,718

Wireless Telecommunication Services — 2.6%
Cavtel Holdings, LLC, Term Loan, 10.50%, 12/31/12 (f)		401		378,664
Digicel International Finance Ltd., U.S. Term Loan (Non-Rollover), 3.06%, 3/30/12		2,352		2,295,875
MetroPCS Wireless, Inc.:
Tranche B-1 Term Loan, 2.56%, 11/03/13		42		40,529
Tranche B-2 Term Loan, 3.81%, 11/03/16		454		445,710
Vodafone Americas Finance 2 Inc., Initial Loan, 6.88%, 7/30/15		2,750		2,750,000

				5,910,778

Total Floating Rate Loan Interests — 59.9%				135,145,590


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	45




Schedule of Investments (continued)	BlackRock Senior High Income Fund, Inc. (ARK)
	(Percentages shown are based on Net Assets)


Other Interests (i)	Beneficial Interest (000)			Value

Auto Components — 0.0%
Intermet Liquidating Trust	$	321		$	96

Diversified Financial Services — 0.4%
J.G. Wentworth LLC Preferred Equity Interests (j)		—	(k)		951,244

Media — 0.0%
Adelphia Preferred Escrow		3			—
Adelphia Recovery Trust		250			25

					25

Metals & Mining — 0.3%
RathGibson Acquisition Co., LLC (j)		137			729,063

Total Other Interests — 0.7%					1,680,428




Warrants (l)	Shares

Media — 0.0%
Charter Communications, Inc. (Expires 11/30/14)		6,862			37,741

Total Warrants — 0.0%					37,741

Total Long-Term Investments (Cost — $286,008,061) — 116.9%					264,109,957




Short-Term Securities	Beneficial Interest (000)

Bank of New York Cash Reserves, 0.01% (m)	$	1,257			1,257,197

Total Short-Term Securities (Cost — $1,257,197) — 0.6%					1,257,197

*Total Investments (Cost — $287,265,258) — 117.5%**					265,367,154
Liabilities in Excess of Other Assets — (17.5)%					(39,482,031	)

Net Assets — 100.0%				$	225,885,123


*	The cost and unrealized appreciation (depreciation) of investments as of August 31, 2010, as computed for federal income tax purposes, were as follows:


Aggregate cost	$	286,641,288

Gross unrealized appreciation	$	8,966,866
Gross unrealized depreciation		(30,241,000	)

Net unrealized depreciation	$	(21,274,134	)


(a)	Non-income producing security.

(b)	Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration to qualified institutional investors.

(c)	Issuer filed for bankruptcy and/or is in default of interest payments.

(d)	As a result of bankruptcy proceedings, the company did not repay the principal amount or accrued interest of the security upon maturity.

(e)	Variable rate security. Rate shown is as of report date.

(f)	Represents a payment-in-kind security which may pay interest/dividends in additional face/shares.

(g)	Convertible security.


(h)	Represents a step-down bond that pays an initial coupon rate for the first period and then a lower coupon rate for the following periods. Rate shown reflects the current yield as of report date.

(i)	Other interests represent beneficial interest in liquidation trusts and other reorganization entities and are non-income producing.

(j)	The investment is held by a wholly-owned taxable subsidiary of the Fund. (k) Amount is less than $1,000.

(l)	Warrants entitle the Fund to purchase a predetermined number of shares of common stock and are non-income producing. The purchase price and number of shares are subject to adjustment under certain conditions until the expiration date, if any.

(m)	Represents the current yield as of report date.

•	Investments in companies considered to be an affiliate of the Fund during the period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as amended, were as follows:



Affiliate	Shares Held at February 28, 2010		Net Activity			Shares Held at August 31, 2010		Income

BlackRock Liquidity
Funds, TempFund,
Institutional Class		1,938,484		(1,938,484	)		—	$	2,481


•	Foreign currency exchange contracts as of August 31, 2010 were as follows:



Currency Purchased	Currency Sold	Counterparty	Settlement Date		Unrealized Appreciation

USD 1,218,745	CAD 1,260,500	Citibank NA	10/20/10	$	37,624


•	Credit default swaps on single-name issuers — buy protection outstanding as of August 31, 2010 were as follows:



Issuer	Pay Fixed Rate	Counterparty	Expiration		Notional Amount (000)		Unrealized Appreciation

K. Hovnanian Enterprises, Inc.	5.00%	Goldman Sachs Bank USA	December 2011	$	460	$	27,354

K. Hovnanian Enterprises, Inc.	5.00%	Goldman Sachs Bank USA	September 2013	$	200		16,953

Total						$	44,307


•	For Fund compliance purposes,the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or rating group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine such industry sub-classifications for reporting ease.

•	Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivatives, which are as follows:

	•	Level 1 — price quotations in active markets/exchanges for identical assets and liabilities

	•	Level 2 — other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs)

	•	Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including the Fund’s own assumptions used in determining the fair value of investments and derivatives)


See Notes to Financial Statements.

46	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Schedule of Investments (concluded)	BlackRock Senior High Income Fund, Inc. (ARK)

The following tables summarize the inputs used as of August 31, 2010 in determining the fair valuation of the Fund’s investments and derivatives:



Valuation Inputs	Level 1		Level 2		Level 3			Total

Assets:
Investments in Securities:
Long-Term Investments:
Common Stocks	$	1,742,075	$	1,455,720	$	439,092		$	3,636,887
Corporate Bonds		—		117,053,310		6,556,001			123,609,311
Floating Rate
Loan Interests		—		111,466,918		23,678,672			135,145,590
Other Interests		—		—		1,680,428			1,680,428
Warrants		37,741		—		—			37,741
Short-Term Securities		—		1,257,197		—			1,257,197
Liabilities:
Unfunded Loan Commitments		—		—		(21,065	)		(21,065	)

Total	$	1,779,816	$	231,233,145	$	32,333,128		$	265,346,089



	Derivative Financial Instruments¹

Valuation Inputs	Level 1		Level 2		Level 3		Total

Assets:
Credit contracts		—	$	44,307		—	$	44,307
Foreign currency exchange contracts		—		37,624		—		37,624

Total		—	$	81,931		—	$	81,931


¹	Derivative financial instruments are swaps and foreign currency exchange contracts. Swaps and foreign currency exchange contracts are valued at the unrealized appreciation/depreciation on the instrument.

The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used in determining fair value:



	Common Stocks			Corporate Bonds			Floating Rate Loan Interests			Other Interests			Unfunded Loan Commitments			Total

Assets/Liabilities:
Balance, as of February 28, 2010	$	179,112		$	8,012,790		$	17,012,972		$	1,066,529			—		$	26,271,403
Accrued discounts/premiums		—			76,793			67,437			—			—			144,230
Net realized gain (loss)		—			978			(144,168	)		140,206			—			(2,984	)
Net change in unrealized appreciation/depreciation²		291,009			(656,826	)		1,002,706			(55,075	)	$	(21,065	)		560,749
Purchases		—			40,983			4,032,676			—			—			4,073,659
Sales		—			(918,717	)		(8,741,584	)		(200,295	)		—			(9,860,596	)
Transfers in³		384,143			—			12,515,127			729,063			—			13,628,333
Transfers out³		(415,172	)		—			(2,066,494	)		—			—			(2,481,666	)

Balance, as of August 31, 2010	$	439,092		$	6,556,001		$	23,678,672		$	1,680,428		$	(21,065	)	$	32,333,128


²	Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations. The change in the unrealized appreciation/depreciation on the securities still held on August 31, 2010 was $(200,839).

³	The Fund’s policy is to recognize transfers in and transfers out as of the end of the period of the event or the change in circumstances that caused the transfer.


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	47

Statements of Assets and Liabilities


August 31, 2010 (Unaudited)	BlackRock Corporate High Yield Fund, Inc. (COY)			BlackRock Corporate High Yield Fund III, Inc. (CYE)			BlackRock Debt Strategies Fund, Inc. (DSU)			BlackRock Floating Rate Income Strategies Fund II, Inc. (FRB)			BlackRock Senior High Income Fund, Inc. (ARK)

Assets

Investments at value — unaffiliated¹	$	280,727,944		$	316,071,672		$	520,591,903		$	170,165,651		$	265,367,154
Investments at value — affiliated²		322,368			2,569,493			—			1,227,551			—
Unrealized appreciation on swaps		220,913			200,775			72,033			—			44,307
Unrealized appreciation on foreign currency exchange contracts		4,441			11,568			75,886			24,495			37,624
Unrealized appreciation on unfunded loan commitments		—			—			—			3,402			—
Foreign currency at value³		3,919			31,364			5,267			52,181			298
Cash		1,983,051			—			—			—			—
Cash on deposit for financial futures contracts		700,000			730,000			—			—			—
Interest receivable		5,215,987			5,713,643			6,444,882			1,449,301			3,098,007
Investments sold receivable		1,566,211			1,694,528			8,973,940			4,988,501			3,221,960
Swaps receivable		46,600			49,300			91,584			—			58,635
Principal paydowns receivable		—			—			1,687,486			21,787			45,562
Swap premium paid		412,021			224,500			96,183			—			553
Dividends receivable		—			13,331			57,825			—			—
Commitment fees receivable		—			—			6,041			2,286			2,990
Dividends receivable — affiliated		—			—			477			—			536
Prepaid expenses		18,345			19,510			35,515			11,127			18,293
Other assets		123,061			134,832			1,863,165			104,659			749,553

Total assets		291,344,861			327,464,516			540,002,187			178,050,941			272,645,472



Liabilities

Loan payable		50,000,000			66,000,000			84,000,000			28,000,000			35,000,000
Unrealized depreciation on swaps		177,670			191,910			65,760			—			—
Unrealized depreciation on foreign currency exchange contracts		31,655			44,736			47,671			45,263			—
Unrealized depreciation on unfunded loan commitments		21,252			47,602			52,865			54,339			21,065
Cash held as collateral for swaps		100,000			—			—			—			—
Deferred income		—			—			87,260			85,072			35,935
Investments purchased payable		2,615,318			2,819,567			23,418,982			9,806,337			11,376,646
Swap premiums received		262,224			271,711			—			—			—
Investment advisory fees payable		121,007			162,340			261,246			106,599			109,616
Interest expense payable		99,466			124,416			177,668			61,251			76,258
Swaps payable		34,000			22,100			14,300			—			6,600
Margin variation payable		20,800			21,600			—			—			—
Commitment fees payable		1,659			518			—			—			—
Other affiliates payable		928			1,024			1,636			529			831
Officer’s and Directors’ fees payable		459			497			76,684			252			400
Income dividends payable		—			—			214,964			—			127,788
Other accrued expenses payable		—			1,456			24,342			13,112			5,210
Other liabilities		7,287			—			—			37,722			—

Total liabilities		53,493,725			69,709,477			108,443,378			38,210,476			46,760,349

Net Assets	$	237,851,136		$	257,755,039		$	431,558,809		$	139,840,465		$	225,885,123



Net Assets Consist of

Paid-in capital⁴	$	381,872,533		$	439,505,026		$	882,654,653		$	199,926,953		$	401,932,057
Undistributed (distributions in excess of) net investment income		1,564,261			607,410			(2,465,478	)		(745,306	)		3,813,705
Accumulated net realized loss		(140,824,582	)		(177,042,955	)		(370,880,215	)		(52,717,235	)		(158,023,391	)
Net unrealized appreciation/depreciation		(4,761,076	)		(5,314,442	)		(77,750,151	)		(6,623,947	)		(21,837,248	)

Net Assets	$	237,851,136		$	257,755,039		$	431,558,809		$	139,840,465		$	225,885,123

Net asset value	$	6.85		$	6.90		$	4.00		$	13.27		$	3.99

¹Investments at cost — unaffiliated	$	285,595,517		$	321,427,214		$	598,762,569		$	176,715,022		$	287,265,258

²Investments at cost — affiliated	$	322,368		$	2,569,493			—		$	1,227,551			—

³Foreign currency at cost	$	3,942		$	31,596		$	4,860		$	52,907		$	308

⁴Shares outstanding, 200 million shares authorized, par value $0.10 per share		34,740,689			37,345,262			107,772,006			10,540,570			56,606,319


See Notes to Financial Statements.

48	SEMI-ANNUAL REPORT	AUGUST 31, 2010

Statements of Operations


Six Months Ended August 31, 2010 (Unaudited)	BlackRock Corporate High Yield Fund, Inc. (COY)			BlackRock Corporate High Yield Fund III, Inc. (CYE)			BlackRock Debt Strategies Fund, Inc. (DSU)			BlackRock Floating Rate Income Strategies Fund II, Inc. (FRB)			BlackRock Senior High Income Fund, Inc. (ARK)

Investment Income

Interest	$	12,839,324		$	13,730,978		$	20,235,546		$	5,603,307		$	10,051,635
Facility and other fees		66,560			85,982			493,723			164,055			261,660
Dividends		61,537			144,039			—			—			—
Dividends — affiliated		2,350			1,690			5,765			2,472			2,481

Total income		12,969,771			13,962,689			20,735,034			5,769,834			10,315,776



Expenses

Investment advisory		741,764			978,541			1,541,366			628,550			659,185
Borrowing costs¹		134,220			143,307			232,416			88,716			140,825
Professional		56,180			50,219			114,878			64,537			74,059
Custodian		12,695			25,349			30,401			31,326			15,166
Printing		15,453			16,978			28,893			9,748			15,814
Accounting services		28,084			30,390			50,810			17,233			26,822
Transfer agent		21,731			20,573			50,524			17,337			28,526
Officer and Directors		11,732			12,795			22,819			7,010			11,690
Registration		6,176			6,521			20,096			4,735			10,191
Miscellaneous		35,231			36,520			34,459			19,833			17,723

Total expenses excluding interest expense		1,063,266			1,321,193			2,126,662			889,025			1,000,001
Interest expense		369,791			429,452			516,111			172,197			238,000

Total expenses		1,433,057			1,750,645			2,642,773			1,061,222			1,238,001
Less fees waived by advisor		(1,102	)		(760	)		(1,186	)		(1,074	)		(1,087	)

Total expenses after fees waived		1,431,955			1,749,885			2,641,587			1,060,148			1,236,914

Net investment income		11,537,816			12,212,804			18,093,447			4,709,686			9,078,862



Realized and Unrealized Gain (Loss)

Net realized gain (loss) from:
Investments		2,999,165			3,583,729			(3,981,045	)		(576,853	)		(1,825,878	)
Financial futures contracts		491,127			524,025			—			—			—
Swaps		(604,102	)		(248,804	)		41,873			2,111			20,099
Foreign currency transactions		2,719,547			2,789,331			3,201,987			888,279			(19,045	)

		5,605,737			6,648,281			(737,185	)		313,537			(1,824,824	)

Net change in unrealized appreciation/depreciation on:
Investments		1,397,957			1,344,908			15,644,633			1,490,889			5,632,315
Financial futures contracts		108,779			113,832			—			—			—
Swaps		405,802			238,857			111,087			(856	)		44,805
Foreign currency transactions		(1,392,930	)		(1,473,543	)		(1,793,437	)		(613,192	)		34,771
Unfunded loan commitments		30,391			67,977			(52,865	)		(16,912	)		(21,065	)

		549,999			292,031			13,909,418			859,929			5,690,826

Total realized and unrealized gain		6,155,736			6,940,312			13,172,233			1,173,466			3,866,002

Net Increase in Net Assets Resulting from Operations	$	17,693,552		$	19,153,116		$	31,265,680		$	5,883,152		$	12,944,864


¹	See Note 6 of the Notes to Financial Statements for details of borrowings.


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	49

Statements of Changes in Net Assets


	BlackRock Corporate High Yield Fund, Inc. (COY)						BlackRock Corporate High Yield Fund III, Inc. (CYE)

Increase (Decrease) in Net Assets:	Six Months Ended August 31, 2010 (Unaudited)			Year Ended February 28, 2010			Six Months Ended August 31, 2010 (Unaudited)			Year Ended February 28, 2010

Operations

Net investment income	$	11,537,816		$	22,380,112		$	12,212,804		$	23,836,686
Net realized gain (loss)		5,605,737			(18,246,371	)		6,648,281			(16,068,173	)
Net change in unrealized appreciation/depreciation		549,999			106,169,011			292,031			115,769,455

Net increase in net assets resulting from operations		17,693,552			110,302,752			19,153,116			123,537,968



Dividends to Shareholders From

Net investment income		(10,622,990	)		(25,342,365	)		(11,200,041	)		(25,189,541	)



Capital Share Transactions

Reinvestment of dividends		188,036			832,119			81,395			111,029



Net Assets

Total increase in net assets		7,258,598			85,792,506			8,034,470			98,459,456
Beginning of period		230,592,538			144,800,032			249,720,569			151,261,113

End of period	$	237,851,136		$	230,592,538		$	257,755,039		$	249,720,569

Undistributed (distributions in excess of) net investment income	$	1,564,261		$	649,435		$	607,410		$	(405,353	)


See Notes to Financial Statements.

50	SEMI-ANNUAL REPORT	AUGUST 31, 2010

Statements of Changes in Net Assets (continued)


	BlackRock Debt Strategies Fund, Inc. (DSU)						BlackRock Floating Rate Income Strategies Fund II, Inc. (FRB)

Increase (Decrease) in Net Assets:	Six Months Ended August 31, 2010 (Unaudited)			Year Ended February 28, 2010			Six Months Ended August 31, 2010 (Unaudited)			Year Ended February 28, 2010

Operations

Net investment income	$	18,093,447		$	42,389,165		$	4,709,686		$	9,000,682
Net realized gain (loss)		(737,185	)		(109,291,069	)		313,537			(18,507,006	)
Net change in unrealized appreciation/depreciation		13,909,418			275,497,465			859,929			65,070,894

Net increase in net assets resulting from operations		31,265,680			208,595,561			5,883,152			55,564,570


Dividends and Distributions to Shareholders From

Net investment income		(19,393,663	)		(41,936,207	)		(4,736,968	)		(10,283,447	)
Tax return of capital		—			(926,392	)		—			(825,748	)

Decrease in net assets resulting from dividends and distributions to shareholders		(19,393,663	)		(42,862,599	)		(4,736,968	)		(11,109,195	)


Capital Share Transactions

Reinvestment of dividends		464,804			1,409,077			323,597			259,478


Net Assets

Total increase in net assets		12,336,821			167,142,039			1,469,781			44,714,853
Beginning of period		419,221,988			252,079,949			138,370,684			93,655,831

End of period	$	431,558,809		$	419,221,988		$	139,840,465		$	138,370,684

Distributions in excess of net investment income	$	(2,465,478	)	$	(1,165,262	)	$	(745,306	)	$	(718,024	)


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	51

Statements of Changes in Net Assets (concluded)


	BlackRock Senior High Income Fund, Inc. (ARK)

Increase (Decrease) in Net Assets:	Six Months Ended August 31, 2010 (Unaudited)			Year Ended February 28, 2010

Operations

Net investment income	$	9,078,862		$	20,424,882
Net realized loss		(1,824,824	)		(40,130,950	)
Net change in unrealized appreciation/depreciation		5,690,826			114,058,095

Net increase in net assets resulting from operations		12,944,864			94,352,027


Dividends to Shareholders From

Net investment income		(8,488,581	)		(16,952,851	)


Capital Share Transactions

Reinvestment of dividends		255,895			130,893


Net Assets

Total increase in net assets		4,712,178			77,530,069
Beginning of period		221,172,945			143,642,876

End of period	$	225,885,123		$	221,172,945

Undistributed net investment income	$	3,813,705		$	3,223,424


See Notes to Financial Statements.

52	SEMI-ANNUAL REPORT	AUGUST 31, 2010

Statements of Cash Flows


Six Months Ended August 31, 2010 (Unaudited)	BlackRock Corporate High Yield Fund, Inc. (COY)			BlackRock Corporate High Yield Fund III, Inc. (CYE)			BlackRock Debt Strategies Fund, Inc. (DSU)			BlackRock Floating Rate Income Strategies Fund II, Inc. (FRB)			BlackRock Senior High Income Fund, Inc. (ARK)

Cash Provided by Operating Activities

Net increase in net assets resulting from operations	$	17,693,552		$	19,153,116		$	31,265,680		$	5,883,152		$	12,944,864
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities:
(Increase) decrease in interest receivable		279,725			(78,080	)		223,299			168,191			79,630
(Increase) decrease in cash pledged as collateral for financial futures contracts		(700,000	)		(730,000	)		—			—			—
(Increase) decrease in swaps receivable		74,150			72,422			(86,247	)		7,389			(45,562	)
(Increase) decrease in commitment fees receivable		—			31			(6,041	)		(1,626	)		(2,990	)
Increase in dividends receivable — affiliated		—			—			(477	)		—			(536	)
Decrease in dividends receivable		18,400			19,829			1,671			—			—
(Increase) decrease in other assets		(118,546	)		(130,317	)		(1,274,922	)		(104,659	)		(649,399	)
Increase (decrease) in other liabilities		1,659			518			(204,300	)		37,710			(99,899	)
Increase in investment advisory fees payable		8,476			14,415			37,776			11,483			10,679
Increase (decrease) in interest expense payable		(15,739	)		(5,831	)		49,996			6,944			37,554
Increase in other affiliates payable		90			106			188			33			55
Decrease in accrued expenses payable		(77,969	)		(86,403	)		(119,661	)		(47,181	)		(123,214	)
Increase in margin variable payable		20,800			21,600			—			—			—
Decrease in swaps payable		(30,031	)		(11,126	)		(3,054	)		—			(1,032	)
Increase (decrease) in Officer’s and Directors’ payable		(168	)		(324	)		10,994			(121	)		129
Net periodic and termination payments of swaps		(117,179	)		18,086			66,076			—			36,197
Net realized and unrealized gain (loss)		(2,627,764	)		(3,231,187	)		(7,898,021	)		247,084			(2,829,404	)
Amortization of premium and accretion of discount on investments		(876,997	)		(799,723	)		(2,261,922	)		(676,292	)		(952,119	)
Paid-in-kind income		(186,225	)		(410,022	)		(971,600	)		(146,304	)		(301,590	)
Proceeds from sales and paydowns of long-term investments		133,440,900			145,146,179			208,784,670			82,381,239			114,105,522
Purchases of long-term investments		(117,822,703	)		(138,138,738	)		(225,501,618	)		(88,207,789	)		(107,836,091	)
Net proceeds (purchases) from sales of short-term securities		4,609,306			707,262			(854,785	)		570,261			1,691,943

Cash provided by operating activities		33,573,737			21,531,813			1,257,702			129,514			16,064,737


Cash Used for Financing Activities

Cash receipts from borrowings		53,000,000			62,000,000			167,000,000			60,000,000			79,000,000
Cash payments from borrowings		(75,000,000	)		(72,000,000	)		(150,000,000	)		(56,000,000	)		(87,000,000	)
Cash dividends paid to shareholders		(10,622,990	)		(11,118,646	)		(18,713,895	)		(4,413,371	)		(8,064,898	)
Increase in custodian bank payable		—			(1,393,499	)		—			4,446			—

Cash used for financing activities		(32,622,990	)		(22,512,145	)		(1,713,895	)		(408,925	)		(16,064,898	)


Cash Impact from Foreign Exchange Fluctuations

Cash impact from foreign exchange fluctuations		(397	)		734			(99,076	)		3,756			(16	)


Cash

Net increase (decrease) in cash		950,350			(979,598	)		(555,269	)		(275,655	)		(177	)
Cash and foreign currency at beginning of period		1,036,620			1,010,962			560,536			327,836			475

Cash and foreign currency at end of period	$	1,986,970		$	31,364		$	5,267		$	52,181		$	298


Cash Flow Information

Cash paid for interest	$	385,530		$	435,283		$	466,115		$	165,253		$	200,446


Noncash Financing Activities

Capital shares issued in reinvestment of dividends paid to shareholders	$	188,036		$	81,395		$	464,804		$	323,597		$	255,895


	A Statement of Cash Flows is presented when a Fund has a significant amount of borrowing during the period, based on the average borrowing outstanding in relation to average total assets.


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	53




Financial Highlights	BlackRock Corporate High Yield Fund, Inc. (COY)


	Six Months Ended August 31, 2010 (Unaudited)			Year Ended February 28, 2010			Period June 1, 2008 to February 28, 2009
										Year Ended May 31,

										2008			2007			2006			2005

Per Share Operating Performance

Net asset value, beginning of period	$	6.64		$	4.19		$	7.74		$	9.07		$	8.52		$	8.53		$	8.48

Net investment income¹		0.33			0.65			0.50			0.75			0.73			0.74			0.87
Net realized and unrealized gain (loss)		0.19			2.53			(3.50	)		(1.32	)		0.49			0.02			0.07

Net increase (decrease) from investment operations		0.52			3.18			(3.00	)		(0.57	)		1.22			0.76			0.94

Dividends from net investment income		(0.31	)		(0.73	)		(0.55	)		(0.76	)		(0.67	)		(0.77	)		(0.89	)

Net asset value, end of period	$	6.85		$	6.64		$	4.19		$	7.74		$	9.07		$	8.52		$	8.53

Market price, end of period	$	6.98		$	6.88		$	3.91		$	7.28		$	8.47		$	7.42		$	8.46



Total Investment Return²

Based on net asset value		7.94	%³		79.91	%		(38.98	)%³		(5.49	)%		15.60	%		9.75	%		11.31	%

Based on market price		6.15	%³		99.76	%		(39.46	)%³		(4.81	)%		23.96	%		(3.63	)%		13.75	%



Ratios to Average Net Assets

Total expenses		1.20	%⁴		1.18	%		2.29	%⁴		2.33	%		3.25	%		2.39	%		1.69	%

Total expenses after fees waived and paid indirectly		1.20	%⁴		1.18	%		2.29	%⁴		2.33	%		3.25	%		2.39	%		1.69	%

Total expenses after fees waived and paid indirectly and excluding interest expense		0.89	%⁴		0.92	%		1.17	%⁴		0.83	%		0.91	%		0.90	%		0.87	%

Net investment income		9.67	%⁴		11.36	%		11.45	%⁴		9.15	%		8.36	%		8.55	%		9.85	%



Supplemental Data

Net assets, end of period (000)	$	237,851		$	230,593		$	144,800		$	267,698		$	313,821		$	294,759		$	294,218

Borrowings outstanding, end of period (000)	$	50,000		$	72,000		$	38,700		$	64,700		$	126,200		$	127,700		$	100,600

Average borrowings outstanding during the period (000)	$	57,495		$	42,184		$	59,553		$	81,598		$	125,974		$	101,539		$	104,938

Portfolio turnover		38	%		85	%		37	%		38	%		62	%		57	%		57	%

Asset coverage, end of period per $1,000	$	5,756		$	4,203		$	4,742		$	5,138		$	3,487		$	3,308		$	3,925


	¹	Based on average shares outstanding.

	²	Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

	³	Aggregate total investment return.

	⁴	Annualized.


See Notes to Financial Statements.

54	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Financial Highlights	BlackRock Corporate High Yield Fund III, Inc. (CYE)


	Six Months Ended August 31, 2010 (Unaudited)			Year Ended February 28, 2010			Period June 1, 2008 to February 28, 2009
										Year Ended May 31,

										2008			2007			2006			2005

Per Share Operating Performance

Net asset value, beginning of period	$	6.69		$	4.05		$	7.62		$	8.99		$	8.46		$	8.46		$	8.43

Net investment income¹		0.33			0.64			0.50			0.73			0.71			0.72			0.85
Net realized and unrealized gain (loss)		0.18			2.68			(3.51	)		(1.33	)		0.49			0.02			0.07

Net increase (decrease) from investment operations		0.51			3.32			(3.01	)		(0.60	)		1.20			0.74			0.92

Dividends from net investment income		(0.30	)		(0.68	)		(0.56	)		(0.77	)		(0.67	)		(0.74	)		(0.89	)

Net asset value, end of period	$	6.90		$	6.69		$	4.05		$	7.62		$	8.99		$	8.46		$	8.46

Market price, end of period	$	6.92		$	6.67		$	3.57		$	7.03		$	8.53		$	7.36		$	8.38



Total Investment Return²

Based on net asset value		7.81	%³		86.65	%		(39.69	)%³		(5.69	)%		15.51	%		9.78	%		11.24	%

Based on market price		8.45	%³		111.12	%		(42.38	)%³		(8.30	)%		25.98	%		(3.59	)%		16.55	%



Ratios to Average Net Assets

Total expenses		1.35	%⁴		1.34	%		2.45	%⁴		2.47	%		3.38	%		2.49	%		1.81	%

Total expenses after fees waived and paid indirectly		1.35	%⁴		1.33	%		2.45	%⁴		2.47	%		3.38	%		2.49	%		1.81	%

Total expenses after fees waived and paid indirectly and excluding interest expense		1.02	%⁴		1.04	%		1.29	%⁴		0.96	%		1.04	%		1.00	%		0.99	%

Net investment income		9.42	%⁴		11.35	%		11.80	%⁴		9.01	%		8.25	%		8.45	%		9.71	%



Supplemental Data

Net assets, end of period (000)	$	257,755		$	249,721		$	151,261		$	284,361		$	335,479		$	315,699		$	315,626

Borrowings outstanding, end of period (000)	$	66,000		$	76,000		$	44,200		$	71,700		$	129,700		$	141,000		$	107,800

Average borrowings outstanding during the period (000)	$	66,348		$	49,196		$	65,500		$	88,466		$	134,704		$	109,144		$	112,501

Portfolio turnover		48	%		89	%		37	%		38	%		62	%		56	%		55	%

Asset coverage, end of period per $1,000	$	4,905		$	4,286		$	4,422		$	4,966		$	3,587		$	3,239		$	3,928


	¹	Based on average shares outstanding.

	²	Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

	³	Aggregate total investment return.

	⁴	Annualized.


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	55




Financial Highlights	BlackRock Debt Strategies Fund, Inc. (DSU)


	Six Months Ended August 31, 2010 (Unaudited)			Year Ended February 28,						Year Ended February 29, 2008			Year Ended February 28,
				Year Ended February 28,									Year Ended February 28,

				2010			2009						2007			2006

Per Share Operating Performance

Net asset value, beginning of period	$	3.89		$	2.35		$	5.57		$	7.01		$	6.69		$	7.06

Net investment income¹		0.17			0.39			0.52			0.66			0.68			0.63
Net realized and unrealized gain (loss)		0.12			1.55			(3.12	)		(1.43	)		0.28			(0.35	)

Net increase (decrease) from investment operations		0.29			1.94			(2.60	)		(0.77	)		0.96			0.28

Dividends and distributions from:
Net investment income		(0.18	)		(0.39	)		(0.62	)		(0.67	)		(0.64	)		(0.65	)
Tax return of capital		—			(0.01	)		—			—			—			—

Total dividends and distributions		(0.18	)		(0.40	)		(0.62	)		(0.67	)		(0.64	)		(0.65	)

Net asset value, end of period	$	4.00		$	3.89		$	2.35		$	5.57		$	7.01		$	6.69

Market price, end of period	$	3.92		$	3.91		$	2.07		$	5.43		$	7.28		$	6.77



Total Investment Return²

Based on net asset value		7.61	%³		87.82	%		(50.19	)%		(11.72	)%		15.35	%		4.57	%

Based on market price		4.91	%³		114.32	%		(54.99	)%		(17.13	)%		18.37	%		11.34	%



Ratios to Average Net Assets

Total expenses		1.22	%⁴		1.23	%		2.42	%		3.13	%		3.16	%		2.63	%

Total expenses after fees waived		1.22	%⁴		1.23	%		2.42	%		3.13	%		3.16	%		2.63	%

Total expenses after fees waived and excluding interest expense		0.98	%⁴		1.02	%		1.20	%		0.99	%		0.99	%		1.02	%

Net investment income		8.35	%⁴		12.16	%		11.79	%		9.90	%		9.97	%		9.55	%



Supplemental Data

Net assets, end of period (000)	$	431,559		$	419,222		$	252,080		$	594,204		$	745,944		$	708,411

Borrowings outstanding, end of period (000)	$	84,000		$	67,000		$	90,000		$	199,000		$	298,600		$	259,900

Average borrowings outstanding during the period (000)	$	79,701		$	58,574		$	163,286		$	272,846		$	283,906		$	294,371

Portfolio turnover		36	%		86	%		44	%		51	%		65	%		46	%

Asset coverage, end of period per $1,000	$	6,137		$	7,257		$	3,801		$	3,986		$	3,498		$	3,726


	¹	Based on average shares outstanding.

	²	Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

	³	Aggregate total investment return.

	⁴	Annualized.


See Notes to Financial Statements.

56	SEMI-ANNUAL REPORT	AUGUST 31, 2010




Financial Highlights	BlackRock Floating Rate Income Strategies Fund II, Inc. (FRB)


	Six Months Ended August 31, 2010 (Unaudited)			Year Ended February 28,						Year Ended February 29, 2008			Year Ended February 28,
				Year Ended February 28,									Year Ended February 28,

				2010			2009						2007			2006

Per Share Operating Performance

Net asset value, beginning of period	$	13.16		$	8.92		$	16.06		$	19.28		$	19.39		$	19.74

Net investment income¹		0.45			0.86			1.37			1.55			1.55			1.33
Net realized and unrealized gain (loss)		0.11			4.44			(6.98	)		(3.27	)		(0.12	)		(0.31	)

Net increase (decrease) from investment operations		0.56			5.30			(5.61	)		(1.72	)		1.43			1.02

Dividends and distributions from:
Net investment income		(0.45	)		(0.98	)		(1.53	)		(1.50	)		(1.54	)		(1.27	)
Net realized gain		—			—			—			—			—			(0.10	)
Tax return of capital		—			(0.08	)		—			—			—			—

Total dividends and distributions		(0.45	)		(1.06	)		(1.53	)		(1.50	)		(1.54	)		(1.37	)

Net asset value, end of period	$	13.27		$	13.16		$	8.92		$	16.06		$	19.28		$	19.39

Market price, end of period	$	13.50		$	15.01		$	8.28		$	14.75		$	18.50		$	17.76



Total Investment Return²

Based on net asset value		4.25	%³		62.08	%		(36.46	)%		(8.98	)%		8.31	%		6.07	%

Based on market price		(7.02	)%³		99.15	%		(35.78	)%		(12.88	)%		13.47	%		(1.35	)%



Ratios to Average Net Assets

Total expenses		1.51	%⁴		1.50	%		2.48	%		2.78	%		2.87	%		2.46	%

Total expenses after fees waived and paid indirectly		1.51	%⁴		1.50	%		2.48	%		2.78	%		2.87	%		2.46	%

Total expenses after fees waived and paid indirectly and excluding interest expense		1.26	%⁴		1.27	%		1.38	%		1.20	%		1.22	%		1.25	%

Net investment income		6.69	%⁴		7.40	%		10.08	%		8.39	%		8.03	%		6.88	%



Supplemental Data

Net assets, end of period (000)	$	139,840		$	138,371		$	93,656		$	168,553		$	202,364		$	203,557

Borrowings outstanding, end of period (000)	$	28,000		$	24,000		$	26,000		$	50,000		$	47,000		$	61,400

Average borrowings outstanding during the period (000)	$	26,576		$	22,225		$	45,165		$	55,269		$	61,022		$	63,725

Portfolio turnover		46	%		92	%		47	%		65	%		65	%		72	%

Asset coverage, end of period per $1,000	$	5,994		$	6,765		$	4,602		$	4,371		$	5,306		$	4,315


	¹	Based on average shares outstanding.

	²	Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

	³	Aggregate total investment return.

	⁴	Annualized.


See Notes to Financial Statements.

	SEMI-ANNUAL REPORT	AUGUST 31, 2010	57




Financial Highlights	BlackRock Senior High Income Fund, Inc. (ARK)


	Six Months Ended August 31, 2010 (Unaudited)			Year Ended February 28,						Year Ended February 29, 2008			Year Ended February 28,
				Year Ended February 28,									Year Ended February 28,

				2010			2009						2007			2006

Per Share Operating Performance

Net asset value, beginning of period	$	3.91		$	2.54		$	5.04		$	6.17		$	6.00		$	6.28

Net investment income¹		0.16			0.36			0.41			0.54			0.57			0.55
Net realized and unrealized gain (loss)		0.07			1.31			(2.43	)		(1.11	)		0.16			(0.27	)

Net increase (decrease) from investment operations		0.23			1.67			(2.02	)		(0.57	)		0.73			0.28

Dividends and distributions from:
Net investment income		(0.15	)		(0.30	)		(0.43	)		(0.56	)		(0.56	)		(0.56	)
Tax return of capital		—			—			(0.05	)		—			—			—

Total dividends and distributions		(0.15	)		(0.30	)		(0.48	)		(0.56	)		(0.56	)		(0.56	)

Net asset value, end of period	$	3.99		$	3.91		$	2.54		$	5.04		$	6.17		$	6.00

Market price, end of period	$	3.94		$	3.94		$	2.21		$	4.91		$	6.53		$	5.88



Total Investment Return²

Based on net asset value		5.98	%³		68.90	%		(42.15	)%		(9.76	)%		12.82	%		5.07	%

Based on market price		3.86	%³		95.61	%		(48.33	)%		(16.94	)%		21.84	%		4.13	%



Ratios to Average Net Assets

Total expenses		1.09	%⁴		1.13	%		2.24	%		2.70	%		3.03	%		2.39	%

Total expenses after fees waived		1.09	%⁴		1.13	%		2.24	%		2.70	%		3.03	%		2.39	%

Total expenses after fees waived and excluding interest expense		0.88	%⁴		0.93	%		1.05	%		0.86	%		0.90	%		0.91	%

Net investment income		8.01	%⁴		10.70	%		9.96	%		9.16	%		9.42	%		9.23	%



Supplemental Data

Net assets, end of period (000)	$	225,885		$	221,173		$	143,643		$	284,692		$	347,449		$	335,690

Borrowings outstanding, end of period (000)	$	35,000		$	43,000		$	47,000		$	91,500		$	132,000		$	141,700

Average borrowings outstanding during the period (000)	$	36,755		$	29,978		$	79,422		$	109,978		$	131,575		$	128,461

Portfolio turnover		38	%		80	%		49	%		48	%		62	%		48	%

Asset coverage, end of period per $1,000	$	7,452		$	6,144		$	4,056		$	4,112		$	3,632		$	3,369


	¹	Based on average shares outstanding.

	²	Total investment returns based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Where applicable, total investment returns exclude the effects of any sales charges and include the reinvestment of dividends and distributions.

	³	Aggregate total investment return.

	⁴	Annualized.


See Notes to Financial Statements.

58	SEMI-ANNUAL REPORT	AUGUST 31, 2010

Notes to Financial Statements (Unaudited)

1. Organization and Significant Accounting Policies:

BlackRock Corporate High Yield Fund, Inc. (“COY”), BlackRock Corporate High Yield Fund III, Inc. (“CYE”), BlackRock Debt Strategies Fund, Inc. (“DSU”) and BlackRock Floating Rate Income Strategies Fund II, Inc. (“FRB”) (collectively, the “Funds” or individually as a “Fund”) are registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as diversified, closed-end management investment companies. BlackRock Senior High Income Fund, Inc. (“ARK”) is registered under the 1940 Act as a non-diversified, closed-end management investment company. The Funds are organized as Maryland corporations. The Funds’ financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), which may require management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. The Funds determine and make available for publication the net asset values of their Common Shares on a daily basis.

The following is a summary of significant accounting policies followed by the Funds:

Valuation: The Funds fair value their financial instruments at market value using independent dealers or pricing services under policies approved by the Board of Directors (the “Board”). The Funds value their bond investments on the basis of last available bid prices or current market quotations provided by dealers or pricing services. Floating rate loan interests are valued at the mean of the bid prices from one or more brokers or dealers as obtained from a pricing service. In determining the value of a particular investment, pricing services may use certain information with respect to transactions in such investments, quotations from dealers, pricing matrixes, market transactions in comparable investments, various relationships observed in the market between investments and calculated yield measures based on valuation technology commonly employed in the market for such investments. Asset-backed and mortgage-backed securities are valued by independent pricing services using models that consider estimated cash flows of each tranche of the security, establish a benchmark yield and develop an estimated tranche specific spread to the benchmark yield based on the unique attributes of the tranche. Financial futures contracts traded on exchanges are valued at their last sale price. Swap agreements are valued utilizing quotes received daily by the Funds’ pricing service or through brokers, which are derived using daily swap curves and models that incorporate a number of market data factors, such as discounted cash flows and trades and values of the underlying reference instruments. Investments in open-end investment companies are valued at net asset value each business day. Short-term securities with remaining maturities of 60 days or less may be valued at amortized cost, which approximates fair value.

Equity investments traded on a recognized securities exchange or the NASDAQ Global Market System are valued at the last reported sale price that day or the NASDAQ official closing price, if applicable. For equity investments traded on more than one exchange, the last reported sale price on the exchange where the stock is primarily traded is used. Equity investments traded on a recognized exchange for which there were no sales on that day are valued at the last available bid price. If no bid price is available, the prior day’s price will be used, unless it is determined that such prior day’s price no longer reflects the fair value of the security.

Securities and other assets and liabilities denominated in foreign currencies are translated into US dollars using exchange rates determined as of the close of business on the New York Stock Exchange (“NYSE”). Foreign currency exchange contracts are valued at the mean between the bid and ask prices and are determined as of the close of business on the NYSE. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available.

Exchange-traded options are valued at the mean between the last bid and ask prices at the close of the options market in which the options trade. An exchange-traded option for which there is no mean price is valued at the last bid (long positions) or ask (short positions) price. If no bid or ask price is available, the prior day’s price will be used, unless it is determined that the prior day’s price no longer reflects the fair value of the option. Over-the-counter (“OTC”) options are valued by an independent pricing service using a mathematical model which incorporates a number of market data factors, such as the trades and prices of the underlying instruments.

In the event that application of these methods of valuation results in a price for an investment which is deemed not to be representative of the market value of such investment or is not available, the investment will be valued in accordance with a policy approved by the Board as reflecting fair value (“Fair Value Assets”). When determining the price for Fair Value Assets, the investment advisor and/or the sub-advisor seeks to determine the price that each Fund might reasonably expect to receive from the current sale of that asset in an arm’s-length transaction. Fair value determinations shall be based upon all available factors that the investment advisor and/or sub-advisor deems relevant. The pricing of all Fair Value Assets is subsequently reported to the Board or a committee thereof.

Generally, trading in foreign instruments is substantially completed each day at various times prior to the close of business on the NYSE. Occasionally, events affecting the values of such instruments may occur between the foreign market close and the close of business on the NYSE that may not be reflected in the computation of each Fund’s net assets. If events (for example, a company announcement, market volatility or a natural disaster) occur during such periods that are expected to materially affect the value of such instruments, those instruments may be Fair Value Assets and be valued at their fair values, as determined in good faith by the investment advisor using a pricing service and/or policies approved by the Board.

Foreign Currency Transactions: The Funds’ books and records are maintained in US dollars. Purchases and sales of investments are recorded at the rates of exchange prevailing on the date the transactions are entered into. Generally, when the US dollar rises in value against foreign currency, the Funds’ investments denominated in that currency will lose value because its currency is worth fewer US dollars; the opposite effect occurs if the US dollar falls in relative value.



SEMI-ANNUAL REPORT	AUGUST 31, 2010	59

Notes to Financial Statements (continued)

The Funds report foreign currency related transactions as components of realized gain (loss) for financial reporting purposes, whereas such components are treated as ordinary income for federal income tax purposes.

Preferred Stock: The Funds may invest in preferred stocks. Preferred stock has a preference over common stock in liquidation (and generally in receiving dividends as well) but is subordinated to the liabilities of the issuer in all respects. As a general rule, the market value of preferred stock with a fixed dividend rate and no conversion element varies inversely with interest rates and perceived credit risk, while the market price of convertible preferred stock generally also reflects some element of conversion value. Because preferred stock is junior to debt securities and other obligations of the issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer’s board of directors. Preferred stock also may be subject to optional or mandatory redemption provisions.

Floating Rate Loan Interests: The Funds may invest in floating rate loan interests. The floating rate loan interests the Funds hold are typically issued to companies (the “borrower”) by banks, other financial institutions, and privately and publicly offered corporations (the “lender”). Floating rate loan interests are generally non-investment grade, often involve borrowers whose financial condition is troubled or uncertain and companies that are highly levered. The Funds may invest in obligations of borrowers who are in bankruptcy proceedings. Floating rate loan interests may include fully funded term loans or revolving lines of credit. Floating rate loan interests are typically senior in the corporate capital structure of the borrower. Floating rate loan interests generally pay interest at rates that are periodically determined by reference to a base lending rate plus a premium. The base lending rates are generally the lending rate offered by one or more European banks, such as LIBOR (London InterBank Offered Rate), the prime rate offered by one or more US banks or the certificate of deposit rate. Floating rate loan interests may involve foreign borrowers, and investments may be denominated in foreign currencies. The Funds consider these investments to be investments in debt securities for purposes of their investment policies.

When a Fund buys a floating rate loan interest it may receive a facility fee and when it sells a floating rate loan interest it may pay a facility fee. On an ongoing basis, the Funds may receive a commitment fee based on the undrawn portion of the underlying line of credit amount of a floating rate loan interest. The Funds earn and/or pay facility and other fees on floating rate loan interests, which are shown as facility and other fees in the Statements of Operations. Facility and commitment fees are typically amortized to income over the term of the loan or term of the commitment, respectively. Consent and amendment fees are recorded to income as earned. Prepayment penalty fees, which may be received by the Funds upon the prepayment of a floating rate loan interest by a borrower, are recorded as realized gains. The Funds may invest in multiple series or tranches of a loan. A different series or tranche may have varying terms and carry different associated risks.

Floating rate loan interests are usually freely callable at the borrower’s option. The Funds may invest in such loans in the form of participations in loans (“Participations”) and assignments of all or a portion of loans from third parties. Participations typically will result in the Funds having a contractual relationship only with the lender, not with the borrower. The Funds will have the right to receive payments of principal, interest and any fees to which it is entitled only from the lender selling the Participation and only upon receipt by the lender of the payments from the borrower. In connection with purchasing Participations, the Funds generally will have no right to enforce compliance by the borrower with the terms of the loan agreement, nor any rights of offset against the borrower, and the Funds may not benefit directly from any collateral supporting the loan in which it has purchased the Participation. As a result, the Funds will assume the credit risk of both the borrower and the lender that is selling the Participation. The Funds’ investment in loan participation interests involves the risk of insolvency of the financial intermediaries who are parties to the transactions. In the event of the insolvency of the lender selling the Participation, the Funds may be treated as a general creditor of the lender and may not benefit from any offset between the lender and the borrower.

Zero-Coupon Bonds: The Funds may invest in zero-coupon bonds, which are normally issued at a significant discount from face value and do not provide for periodic interest payments. Zero-coupon bonds may experience greater volatility in market value than similar maturity debt obligations which provide for regular interest payments.

Segregation and Collateralization: In cases in which the 1940 Act and the interpretive positions of the Securities and Exchange Commission (“SEC”) require that the Funds either deliver collateral or segregate assets in connection with certain investments (e.g., financial futures contracts, foreign currency exchange contracts or swaps), or certain borrowings (e.g., loan payable), the Funds will, consistent with SEC rules and/or certain interpretive letters issued by the SEC, segregate collateral or designate on their books and records cash or other liquid securities having a market value at least equal to the amount that would otherwise be required to be physically segregated. Furthermore, based on requirements and agreements with certain exchanges and third party broker-dealers, each party has requirements to deliver/deposit securities as collateral for certain investments.

Investment Transactions and Investment Income: For financial reporting purposes, investment transactions are recorded on the dates the transactions are entered into (the trade dates). Realized gains and losses on investment transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend dates. Interest income, including amortization of premium and accretion of discount on debt securities, is recognized on the accrual basis. Consent fees are compensation for agreeing to changes in the terms of debt instruments and are included in facility and other fees in the Statements of Operations.

Dividends and Distributions: Dividends from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. If the total dividends and distributions made in any tax year exceeds net investment income and accumulated realized capital gains, a portion of the total distribution may be treated as a tax return of capital. The amount and timing of dividends and distributions are determined in accordance with federal income tax regulations, which may differ from US GAAP.



60	SEMI-ANNUAL REPORT	AUGUST 31, 2010

Notes to Financial Statements (continued)

Income Taxes: It is each Fund’s policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies (“RIC”) and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required.

Certain Funds have wholly owned taxable subsidiaries organized as limited liability companies (the “Taxable Subsidiaries”), each of which holds one of the investments listed in the Schedules of Investments. The Taxable Subsidiaries allow a Fund to hold an investment that is organized as an operating partnership while still satisfying RIC tax requirements. Income earned on the investments held by the Taxable Subsidiaries is taxable to such subsidiaries. Income tax expense, if any, of the Taxable Subsidiaries is reflected in the market value of the investments held by the Taxable Subsidiaries.

Each Fund files US federal and various state and local tax returns. No income tax returns are currently under examination. The statute of limitations on the Funds’ US federal tax returns remains open for each of the periods as follows:



	Four Years Ended	Year Ended	Period Ended	Two Years Ended

COY	—	February 28, 2010	February 28, 2009	May 31, 2008

CYE	—	February 28, 2010	February 28, 2009	May 31, 2008

DSU	February 28,	—	—	—
	2010

FRB	February 28,	—	—	—
	2010

ARK	February 28,	—	—	—
	2010

The statutes of limitations on the Funds’ state and local tax returns may remain open for an additional year depending upon the jurisdiction. There are no uncertain tax positions that require recognition of a tax liability.

Deferred Compensation and BlackRock Closed-End Share Equivalent Investment Plan: Under the deferred compensation plan approved by each Fund’s Board, non-interested Directors (“Independent Directors”) may defer a portion of their annual complex-wide compensation. Deferred amounts earn an approximate return as though equivalent dollar amounts had been invested in common shares of certain other BlackRock Closed-End Funds selected by the Independent Directors. This has approximately the same economic effect for the Independent Directors as if the Independent Directors had invested the deferred amounts directly in certain other BlackRock Closed-End Funds.

The deferred compensation plan is not funded and obligations thereunder represent general unsecured claims against the general assets of each Fund. Each Fund may, however, elect to invest in common shares of certain other BlackRock Closed-End Funds selected by the Independent Directors in order to match its deferred compensation obligations. Investments to cover each Fund’s deferred compensation liability, if any, are included in other assets in the Statements of Assets and Liabilities. Dividends and distributions from the BlackRock Closed-End Fund investments under the plan are included in dividends — affiliated in the Statements of Operations.

Other: Expenses directly related to a Fund are charged to that Fund. Other operating expenses shared by several funds are pro rated among those funds on the basis of relative net assets or other appropriate methods. The Funds have an arrangement with the custodians whereby fees may be reduced by credits earned on uninvested cash balances, which if applicable are shown as fees paid indirectly in the Statements of Operations. The custodians impose fees on overdrawn cash balances, which can be offset by accumulated credits earned or may result in additional custody charges.

2. Derivative Financial Instruments:

The Funds engage in various portfolio investment strategies using derivative contracts both to increase the returns of the Funds and to economically hedge, or protect, their exposure to certain risks such as credit risk, equity risk and foreign currency exchange rate risk. These contracts may be transacted on an exchange or OTC.

Losses may arise if the value of the contract decreases due to an unfavorable change in the market rates or values of the underlying instrument or if the counterparty does not perform under the contract. The Funds’ maximum risk of loss from counterparty credit risk on OTC derivatives is generally the aggregate unrealized gain netted against any collateral pledged by/posted to the counterparty. For OTC options purchased, the Funds bear the risk of loss in the amount of the premiums paid plus the positive change in market values net of any collateral received on the options should the counterparty fail to perform under the contracts. Options written by the Funds do not give rise to counterparty credit risk, as options written obligate the Funds to perform and not the counterparty. Counterparty risk related to exchange-traded financial futures contracts and options is deemed to be minimal due to the protection against defaults provided by the exchange on which these contracts trade.

The Funds may mitigate counterparty risk by procuring collateral and through netting provisions included within an International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreement implemented between a Fund and each of its respective counterparties. The ISDA Master Agreement allows each Fund to offset with each separate counterparty certain derivative financial instrument’s payables and/or receivables with collateral held. The amount of collateral moved to/from applicable counterparties is generally based upon minimum transfer amounts of up to $500,000. To the extent amounts due to the Funds from their counterparties are not fully collateralized contractually or otherwise, the Funds bear the risk of loss from counter-party non-performance. See Note 1 “Segregation and Collateralization” for information with respect to collateral practices. In addition, the Funds manage counterparty risk by entering into agreements only with counterparties that it believes have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties.

Certain ISDA Master Agreements allow counterparties to OTC derivatives to terminate derivative contracts prior to maturity in the event the Funds’ net assets decline by a stated percentage or the Funds fail to meet the terms of its ISDA Master Agreements, which would cause the Funds to accelerate payment of any net liability owed to the counterparty.

Financial Futures Contracts: The Funds purchase or sell financial futures contracts and options on financial futures contracts to gain exposure to, or economically hedge against, changes in the values of equity securities



SEMI-ANNUAL REPORT	AUGUST 31, 2010	61

Notes to Financial Statements (continued)

(equity risk). Financial futures contracts are contracts for delayed delivery of securities or currencies at a specific future date and at a specific price or yield. Pursuant to the contract, the Funds agree to receive from or pay to the broker an amount of cash equal to the daily fluctuation in value of the contract. Such receipts or payments are known as margin variation and are recognized by the Funds as unrealized gains or losses. When the contract is closed, the Funds record a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of financial futures transactions involves the risk of an imperfect correlation in the movements in the price of financial futures contracts and the underlying assets.

Foreign Currency Exchange Contracts: The Funds enter into foreign currency exchange contracts as an economic hedge against either specific transactions or portfolio instruments or to obtain exposure to foreign currencies (foreign currency exchange rate risk). A foreign currency exchange contract is an agreement between two parties to buy and sell a currency at a set exchange rate on a future date. Foreign currency exchange contracts, when used by the Funds, help to manage the overall exposure to the currency backing some of the investments held by the Funds. The contract is marked-to-market daily and the change in market value is recorded by the Funds as an unrealized gain or loss. When the contract is closed, the Funds record a realized gain or loss equal to the difference between the value at the time it was opened and the value at the time it was closed. The use of foreign currency exchange contracts involves the risk that the value of a foreign currency exchange contract changes unfavorably due to movements in the value of the referenced foreign currencies and the risk that a counterparty to the contract does not perform its obligations under the agreement.

Options: The Funds purchase and write call and put options to increase or decrease their exposure to underlying instruments (including equity risk) and/or, in the case of options written, to generate gains from options premiums. A call option gives the purchaser of the option the right (but not the obligation) to buy, and obligates the seller to sell (when the option is exercised), the underlying instrument at the exercise price at any time or at a specified time during the option period. A put option gives the holder the right to sell and obligates the writer to buy the underlying instrument at the exercise price at any time or at a specified time during the option period. When the Funds purchase (write) an option, an amount equal to the premium paid (received) by the Funds is reflected as an asset (liability). The amount of the asset (liability) is subsequently marked-to-market to reflect the current market value of the option purchased (written). When an instrument is purchased or sold through an exercise of an option, the related premium paid (or received) is added to (or deducted from) the basis of the instrument acquired or deducted from (or added to) the proceeds of the instrument sold. When an option expires (or the Funds enter into a closing transaction), the Funds realize a gain or loss on the option to the extent of the premiums received or paid (or gain or loss to the extent the cost of the closing transaction exceeds the premiums received or paid). When the Funds write a call option, such option is “covered,” meaning that the Funds hold the underlying instrument subject to being called by the option counterparty, or cash in an amount sufficient to cover the obligation. When the Funds write a put option, such option is covered by cash in an amount sufficient to cover the obligation.

In purchasing and writing options, the Funds bear the risk of an unfavorable change in the value of the underlying instrument or the risk that the Funds may not be able to enter into a closing transaction due to an illiquid market. Exercise of an option written could result in the Funds purchasing or selling a security at a price different from the current market value.

Swaps: The Funds enter into swap agreements, in which the Funds and a counterparty agree to make periodic net payments on a specified notional amount. These periodic payments received or made by the Funds are recorded in the Statements of Operations as realized gains or losses, respectively. Any upfront fees paid are recorded as assets and any upfront fees received are recorded as liabilities and amortized over the term of the swap. Swaps are marked-to-market daily and changes in value are recorded as unrealized appreciation (depreciation). When the swap is terminated, the Funds will record a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Funds’ basis in the contract, if any. Generally, the basis of the contracts is the premium received or paid. Swap transactions involve, to varying degrees, elements of interest rate, credit and market risk in excess of the amounts recognized in the Statements of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counter-party to the agreements may default on its obligation to perform or disagree as to the meaning of the contractual terms in the agreements, and that there may be unfavorable changes in interest rates and/or market values associated with these transactions.

•

Credit default swaps — The Funds enter into credit default swaps to manage their exposure to the market or certain sectors of the market, to reduce their risk exposure to defaults of corporate and/or sovereign issuers or to create exposure to corporate and/or sovereign issuers to which they are not otherwise exposed (credit risk). The Funds enter into credit default agreements to provide a measure of protection against the default of an issuer (as buyer protection) and/or gain credit exposure to an issuer to which it is not otherwise exposed (as seller of protection). The Funds may either buy or sell (write) credit default swaps on single-name issuers (corporate or sovereign), a combination or basket of single-name issuers or traded indexes. Credit default swaps on single-name issuers are agreements in which the buyer pays fixed periodic payments to the seller in consideration for a guarantee from the seller to make a specific payment should a negative credit event take place (e.g., bankruptcy, failure to pay, obligation accelerators, repudiation, moratorium or restructuring). Credit default swaps on traded indexes are agreements in which the buyer pays fixed periodic payments to the seller in consideration for a guarantee from the seller to make a specific payment should a write-down, principal or interest shortfall or default of all or individual underlying securities included in the index occurs. As a buyer, if an underlying credit event occurs, the Funds will either receive from the seller an amount equal to the notional amount of the swap and deliver the referenced security or underlying securities comprising of an index or receive a net settlement of cash equal to the notional amount of the swap less the recovery value of the security or underlying securities comprising of an index. As a seller (writer), if an underlying credit event occurs, the Funds will either pay the buyer an amount equal to the notional amount of the swap and take delivery of the referenced security or underlying securities comprising of an index or pay a net settlement of cash equal to the notional amount of the swap less the recovery value of the security or underlying securities comprising of an index.



62	SEMI-ANNUAL REPORT	AUGUST 31, 2010

Notes to Financial Statements (continued)

Derivative Instruments Categorized by Risk Exposure:



Fair Values of Derivative Instruments as of August 31, 2010

	Asset Derivatives

	Statements of Assets and Liabilities Location	COY		CYE		DSU		FRB		ARK

Foreign currency exchange contracts	Unrealized appreciation on foreign currency exchange contracts	$	4,441	$	11,568	$	75,886	$	24,495	$	37,624
Credit contracts	Unrealized appreciation on swaps		220,913		200,775		72,033		—		44,307
Equity contracts	Net unrealized appreciation/depreciation; Investments at value — unaffiliated*		108,779		113,832		—		—		—

Total		$	334,133	$	326,175	$	147,919	$	24,495	$	81,931



	Liability Derivatives

	Statements of Assets and Liabilities Location	COY		CYE		DSU		FRB

Foreign currency exchange contracts	Unrealized depreciation on foreign currency exchange contracts	$	31,655	$	44,736	$	47,671	$	45,263
Credit contracts	Unrealized depreciation on swaps		177,670		191,910		65,760		—

Total		$	209,325	$	236,646	$	113,431	$	45,263


*		Includes cumulative appreciation/depreciation of financial futures contracts as reported in the Schedules of Investments. Only current day’s margin variation is reported within the Statements of Assets and Liabilities.

**		Includes options purchased at value as reported in the Schedules of Investments.



The Effect of Derivative Instruments on the Statements of Operations Six Months Ended August 31, 2010

	Net Realized Gain (Loss) from

	COY			CYE			DSU		FRB		ARK

Foreign currency exchange contracts:
Foreign currency exchange contracts***	$	2,836,491		$	2,854,781		$	2,966,761	$	951,106	$	(18,610	)
Credit contracts:
Swaps		(604,102	)		(248,804	)		41,873		2,111		20,099
Equity contracts:
Financial futures contracts		491,127			524,025			—		—		—

Total	$	2,723,516		$	3,130,002		$	3,008,634	$	953,217	$	1,489



	Net Change in Unrealized Appreciation/Depreciation on

	COY			CYE			DSU			FRB			ARK

Foreign currency exchange contracts:
Foreign currency exchange contracts***	$	(1,403,326	)	$	(1,469,905	)	$	(1,551,118	)	$	(501,671	)	$	34,787
Credit contracts:
Swaps		405,802			238,857			111,087			(856	)		44,805
Equity contracts:
Financial futures contracts		108,779			113,832			—			—			—
Options****		(3,230	)		(3,610	)		—			(2,090	)		—

Total	$	(891,975	)	$	(1,120,826	)	$	(1,440,031	)	$	(504,617	)	$	79,592


***		Foreign currency exchange contracts are included in the net realized gain (loss) from foreign currency transactions and net change in unrealized appreciation/depreciation on foreign currency transactions.

****		Options purchased are included in the net realized gain (loss) from investments and net change in unrealized appreciation/depreciation on investments.



SEMI-ANNUAL REPORT	AUGUST 31, 2010	63

Notes to Financial Statements (continued)

For the six months ended August 31, 2010, the average quarterly balances of outstanding derivative financial instruments were as follows:



	COY		CYE		DSU		FRB		ARK

Financial futures contracts:
Average number of contracts sold		25		25		—		—		—
Average notional value of contracts sold	$	6,592,015	$	6,719,116		—		—		—
Foreign currency exchange contracts:
Average number of contracts – US dollars purchased		6		6		7		4		1
Average number of contracts – US dollars sold		3		4		4		3		—
Average US dollar amounts purchased	$	19,020,717	$	20,159,404	$	32,132,405	$	11,171,524	$	904,578
Average US dollar amounts sold	$	1,352,639	$	1,629,522	$	5,459,252	$	1,882,599		—
Options:
Average number of contracts purchased		17		19		—		11		—
Average notional value of contracts purchased	$	16,029	$	17,914		—	$	10,371		—
Credit default swaps:
Average number of contracts – buy protection		8		6		4		—		3
Average number of contracts – sell protection		13		13		1		1		—
Average notional value – buy protection	$	6,912,500	$	4,691,250	$	1,967,500		—	$	922,500
Average notional value – sell protection	$	3,535,000	$	3,702,500	$	1,340,910	$	500,000		—

3. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. (“PNC”), Bank of America Corporation (“BAC”) and Barclays Bank PLC (“Barclays”) are the largest stockholders of BlackRock, Inc. (“BlackRock”). Due to the ownership structure, PNC is an affiliate of the Funds for 1940 Act purposes, but BAC and Barclays are not.

Each Fund entered into an Investment Advisory Agreement with BlackRock Advisors, LLC (the “Manager”), the Funds’ investment advisor, an indirect, wholly owned subsidiary of BlackRock, to provide investment advisory and administration services.

The Manager is responsible for the management of each Fund’s portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of each Fund. For such services, each Fund pays the Manager a monthly fee at an annual rate of each Fund’s average daily net assets, plus the proceeds of any outstanding borrowings used for leverage:



COY	0.50	%
CYE	0.60	%
DSU	0.60	%
FRB	0.75	%
ARK	0.50	%

The Manager entered into a sub-advisory agreement with BlackRock Financial Management, Inc. (“BFM”), an affiliate of the Manager. The Manager pays BFM for services it provides, a monthly fee that is a percentage of the investment advisory fees paid by each Fund to the Manager.

The Manager voluntarily agreed to waive its advisory fees by the amount of investment advisory fees each Fund pays to the Manager indirectly through each Fund’s investment in affiliated money market funds; however, the Manager does not waive its advisory fees by the amount of investment advisory fees paid through each Fund’s investment in other affiliated investment companies, if any. This amount is shown as fees waived by advisor in the Statements of Operations.

For the six months ended August 31, 2010, each Fund reimbursed the Manager for certain accounting services, which are included in accounting services in the Statements of Operations. The reimbursements were as follows:



COY	$	5,671
CYE	$	6,239
DSU	$	5,063
FRB	$	1,615
ARK	$	2,590

Certain officers and/or directors of the Funds are officers and/or directors of BlackRock or its affiliates. The Funds reimburse the Manager for compensation paid to the Funds’ Chief Compliance Officer.

4. Investments:

Purchases and sales of investments including paydowns and excluding short-term securities for the six months ended August 31, 2010, were as follows:



	Purchases		Sales

COY	$	109,166,705	$	123,313,503
CYE	$	132,482,678	$	135,210,998
DSU	$	207,960,488	$	203,954,932
FRB	$	80,212,760	$	78,977,778
ARK	$	101,314,718	$	104,406,607



64	SEMI-ANNUAL REPORT	AUGUST 31, 2010

Notes to Financial Statements (continued)

5. Commitments:

The Funds may invest in floating rate loan interests. In connection with these investments, the Funds may also enter into unfunded loan commitments (“commitments”). Commitments may obligate the Funds to furnish temporary financing to a borrower until permanent financing can be arranged. In connection with these commitments, the Funds earn a commitment fee, typically set as a percentage of the commitment amount. Such fee income, which is classified in the Statements of Operations as facility and other fees, is recognized ratably over the commitment period. As of August 31, 2010, the Funds had the following unfunded loan commitments:



Borrower	Unfunded Commitment		Value of Underlying Loan

COY

Delphi Holdings LLP	$	386,400	$	365,148

CYE

Delphi Holdings LLP	$	865,487	$	817,885

DSU

Delta, Inc.	$	1,475,000	$	1,422,135

FRB

CloverHill	$	200,510	$	203,912
Delphi Holdings LLP	$	153,455	$	145,015
Delta, Inc.	$	1,125,000	$	1,092,213
Horizon Lines LLC	$	142,723	$	129,611

ARK

Delta, Inc.	$	600,000	$	578,935

6. Borrowings:

On March 5, 2009, the Funds entered into a senior committed secured, 364-day revolving line of credit and a separate security agreement (the “SSB Agreement”) with State Street Bank and Trust Company (“SSB”). The Funds have granted a security interest in substantially all of their assets to SSB. The SSB Agreement allowed for the following maximum commitment amounts:



	Commitment Amounts

COY	$	81,000,000
CYE	$	85,000,000
DSU	$	135,000,000
FRB	$	58,000,000
ARK	$	91,000,000

Advances are made by SSB to the Funds, at the Funds’ option of (a) the higher of (i) 1.0% above the Fed Effective Rate and (ii) 1.0% above the Overnight LIBOR or (b) 1.0% above 7-day, 30-day, 60-day or 90-day LIBOR. In addition, the Funds pay a facility fee and a commitment fee based upon SSB’s total commitment to the Funds. The fees associated with each of the agreements are included in the Statements of Operations as borrowing costs. Advances to the Funds as of August 31, 2010 are shown in the Statements of Assets and Liabilities as loan payable. The SSB Agreement was renewed for 364 days under substantially the same terms effective March 4, 2010. The SSB Agreement allows for the following maximum commitment amounts:



	Commitment Amounts

COY	$	90,000,000
CYE	$	95,000,000
DSU	$	150,000,000
FRB	$	58,000,000
ARK	$	91,000,000

The Funds may not declare dividends or make other distributions on shares or purchase any such shares if, at the time of the declaration, distribution or purchase, asset coverage with respect to the outstanding short-term borrowings is less than 300%.

For the six months ended August 31, 2010, the daily weighted average interest rates for Funds with loans under the revolving credit agreements were as follows:



		Daily Weighted Average Interest Rate

COY		1.28%
CYE		1.28%
DSU		1.28%
FRB		1.29%
ARK		1.28%



SEMI-ANNUAL REPORT	AUGUST 31, 2010	65

Notes to Financial Statements (concluded)

7. Capital Loss Carryforwards:

As of February 28, 2010, the Funds had capital loss carryforwards available to offset future realized capital gains through the indicated expiration dates:



Expires February 28,	COY		CYE		DSU		FRB		ARK

2011	$	77,885,783	$	119,513,437	$	85,285,305		—	$	30,706,546
2012		6,647,369		1,938,881		17,223,475		—		22,345,071
2013		—		—		21,126,025		—		—
2014		—		—		20,233,987	$	203,838		4,906,362
2015		—		—		3,578,574		1,315,945		1,585,622
2016		454,146		363,401		—		—		—
2017		23,362,415		24,709,530		56,690,782		12,168,927		27,675,242
2018		36,323,237		33,834,777		148,062,952		38,830,450		60,685,648

Total	$	144,672,950	$	180,360,026	$	352,201,100	$	52,519,160	$	147,904,491

8. Market and Credit Risk:

In the normal course of business, the Funds invest in securities and enter into transactions where risks exist due to fluctuations in the market (market risk) or failure of the issuer of a security to meet all its obligations (issuer credit risk). The value of securities held by the Funds may decline in response to certain events, including those directly involving the issuers whose securities are owned by the Funds; conditions affecting the general economy; overall market changes; local, regional or global political, social or economic instability; and currency and interest rate and price fluctuations. Similar to issuer credit risk, the Funds may be exposed to counterparty credit risk, or the risk that an entity with which the Funds have unsettled or open transactions may fail to or be unable to perform on its commitments. The Funds manage counterparty credit risk by entering into transactions only with counterparties that they believe have the financial resources to honor their obligations and by monitoring the financial stability of those counterparties. Financial assets, which potentially expose the Funds to market, issuer and counterparty credit risks, consist principally of financial instruments and receivables due from counterparties. The extent of the Funds’ exposure to market, issuer and counterparty credit risks with respect to these financial assets is generally approximated by their value recorded in the Funds’ Statements of Assets and Liabilities, less any collateral held by the Funds.

9. Capital Share Transactions:

Each Fund is authorized to issue 200 million shares, par value $0.10 per share, all of which were initially classified as Common Shares. At August 31, 2010, the shares owned by affiliates of the Manager of FRB were 8,843. The Board is authorized, however, to reclassify any unissued shares without approval of Common Shareholders.

For the periods shown, shares issued and outstanding increased by the following amounts as a result of dividend reinvestments:



	Six Months Ended August 31, 2010		Year Ended February 28, 2010

COY		27,311		132,418
CYE		11,796		16,969
DSU		114,520		422,001
FRB		23,982		19,658
ARK		63,426		33,391

10. Subsequent Events:

Management’s evaluation of the impact of all subsequent events on the Funds’ financial statements was completed through the date the financial statements were issued and the following items were noted:

Each Fund paid a net investment income dividend on September 30, 2010 to shareholders of record on September 15, 2010 as follows:



		Common Dividend Per Share

COY		$0.051
CYE		$0.050
DSU		$0.027
FRB		$0.075
ARK		$0.025



66	SEMI-ANNUAL REPORT	AUGUST 31, 2010

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements

The Board of Directors (each, a “Board,” and, collectively, the “Boards,” and the members of which are referred to as “Board Members”) of each of BlackRock Corporate High Yield Fund, Inc. (“COY”), BlackRock Corporate High Yield Fund III, Inc. (“CYE”), BlackRock Debt Strategies Fund, Inc. (“DSU”), BlackRock Floating Rate Income Strategies Fund II, Inc. (“FRB”) and BlackRock Senior High Income Fund, Inc. (“ARK” and together with COY, CYE, DSU and FRB, each, a “Fund,” and, collectively, the “Funds”) met on April 8, 2010 and May 13 – 14, 2010 to consider the approval of each Fund’s investment advisory agreement (each, an “Advisory Agreement”) with BlackRock Advisors, LLC (the “Manager”), each Fund’s investment advisor. Each Board also considered the approval of the sub-advisory agreement (each, a “Sub-Advisory Agreement”) between the Manager and BlackRock Financial Management, Inc. (the “Sub-Advisor”), with respect to its Fund. The Manager and the Sub-Advisor are referred to herein as “BlackRock.” The Advisory Agreements and the Sub-Advisory Agreements are referred to herein as the “Agreements.”

Activities and Composition of the Board

The Board of each Fund consists of ten individuals, eight of whom are not “interested persons” of such Fund as defined in the Investment Company Act of 1940 (the “1940 Act”) (the “Independent Board Members”). The Board Members are responsible for the oversight of the operations of each Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Independent Board Members have retained independent legal counsel to assist them in connection with their duties. The Chairman of the Boards is an Independent Board Member. The Boards have established five standing committees: an Audit Committee, a Governance and Nominating Committee, a Compliance Committee, a Performance Oversight Committee and an Executive Committee, each of which is composed of Independent Board Members (except for the Executive Committee, which also has one interested Board Member) and is chaired by an Independent Board Member. The Boards also has one ad hoc committee, the Joint Product Pricing Committee, which consists of Independent Board Members and the directors/trustees of the boards of certain other BlackRock-managed funds, who are not “interested persons” of their respective funds.

The Agreements

Pursuant to the 1940 Act, the Boards are required to consider the continuation of the Agreements on an annual basis. In connection with this process, the Boards assessed, among other things, the nature, scope and quality of the services provided to the Funds by the personnel of BlackRock and its affiliates, including investment management, administrative and shareholder services, oversight of fund accounting and custody, marketing services and assistance in meeting applicable legal and regulatory requirements.

From time to time throughout the year, each Board, acting directly and through its committees, considered at each of its meetings factors that are relevant to its annual consideration of the renewal of the Agreements, including the services and support provided by BlackRock to the respective Fund and its shareholders. Among the matters the Board considered were: (a) investment performance for one-, three- and five-year periods, as applicable, against peer funds, and applicable benchmarks, if any, as well as senior management’s and portfolio managers’ analysis of the reasons for any over performance or underperformance against a Fund’s peers and/or benchmark, as applicable; (b) fees, including advisory and other amounts paid to BlackRock and its affiliates by each Fund for services such as call center and fund accounting; (c) each Fund’s operating expenses; (d) the resources devoted to and compliance reports relating to each Fund’s investment objective, policies and restrictions; (e) each Fund’s compliance with its Code of Ethics and compliance policies and procedures; (f) the nature, cost and character of non-investment management services provided by BlackRock and its affiliates; (g) BlackRock’s and other service providers’ internal controls; (h) BlackRock’s implementation of the proxy voting policies approved by the Boards; (i) execution quality of portfolio transactions; (j) BlackRock’s implementation of each Fund’s valuation and liquidity procedures; (k) an analysis of contractual and actual management fees for products with similar investment objectives across the open-end fund, closed-end fund and institutional account product channels, as applicable; and (l) periodic updates on BlackRock’s business.

Board Considerations in Approving the Agreements

The Approval Process: Prior to the April 8, 2010 meeting, the Boards requested and received materials specifically relating to the Agreements. The Boards are engaged in a process with BlackRock to periodically review the nature and scope of the information provided to better assist their deliberations. The materials provided in connection with the April meeting included: (a) information independently compiled and prepared by Lipper, Inc. (“Lipper”) on Fund fees and expenses, and the investment performance of each Fund as compared with a peer group of funds as determined by Lipper (collectively, “Peers”); (b) information on the profitability of the Agreements to BlackRock and a discussion of fall-out benefits to BlackRock and its affiliates and significant shareholders; (c) a general analysis provided by BlackRock concerning investment advisory fees charged to other clients, such as institutional clients and open-end funds, under similar investment mandates; (d) the impact of economies of scale; (e) a summary of aggregate amounts paid by each Fund to BlackRock; and (f) if applicable, a comparison of management fees to similar BlackRock closed-end funds, as classified by Lipper.

At an in-person meeting held on April 8, 2010, the Boards reviewed materials relating to their consideration of the Agreements. As a result of the discussions that occurred during the April 8, 2010 meeting, the Boards presented BlackRock with questions and requests for additional information and BlackRock responded to these requests with additional written information in advance of the May 13 – 14, 2010 Board meeting.

At an in-person meeting held on May 13 – 14, 2010, each Fund’s Board, including the Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and each respective Fund and the Sub-Advisory Agreement between the Manager and the Sub-Advisor with respect to each Fund, each for a one-year term ending June 30, 2011. In approving the continuation of the Agreements, the Boards considered: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of each Fund and BlackRock; (c) the advisory fee and the cost of the services and profits to be realized by BlackRock and its affiliates from their relationship with each Fund; (d) economies of scale; and (e) other factors deemed relevant by the Board Members.



SEMI-ANNUAL REPORT	AUGUST 31, 2010	67

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)

The Boards also considered other matters they deemed important to the approval process, such as services related to the valuation and pricing of each Fund’s portfolio holdings, direct and indirect benefits to BlackRock and its affiliates and significant shareholders from their relationship with each Fund and advice from independent legal counsel with respect to the review process and materials submitted for the Boards’ review. The Boards noted the willingness of BlackRock personnel to engage in open, candid discussions with the Boards. The Boards did not identify any particular information as controlling, and each Board Member may have attributed different weights to the various items considered.

A. Nature, Extent and Quality of the Services Provided by BlackRock: The Boards, including the Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of each Fund. Throughout the year, the Boards compared each Fund’s performance to the performance of a comparable group of closed-end funds, and the performance of a relevant benchmark, if any. The Boards met with BlackRock’s senior management personnel responsible for investment operations, including the senior investment officers. The Boards also reviewed the materials provided by each Fund’s portfolio management team discussing each Fund’s performance and each Fund’s investment objective, strategies and outlook.

The Boards considered, among other factors, the number, education and experience of BlackRock’s investment personnel generally and each Fund’s portfolio management team, investments by portfolio managers in the funds they manage, BlackRock’s portfolio trading capabilities, BlackRock’s use of technology, BlackRock’s commitment to compliance, BlackRock’s credit analysis capabilities, BlackRock’s risk analysis capabilities and BlackRock’s approach to training and retaining portfolio managers and other research, advisory and management personnel. The Boards also reviewed a general description of BlackRock’s compensation structure with respect to each Fund’s portfolio management team and BlackRock’s ability to attract and retain high-quality talent.

In addition to advisory services, the Boards considered the quality of the administrative and non-investment advisory services provided to each Fund. BlackRock and its affiliates and significant shareholders provide each Fund with certain administrative and other services (in addition to any such services provided to each Fund by third parties) and officers and other personnel as are necessary for the operations of each Fund. In addition to investment advisory services, BlackRock and its affiliates provide each Fund with other services, including: (i) preparing disclosure documents, such as the prospectus and the statement of additional information in connection with the initial public offering and periodic shareholder reports; (ii) preparing communications with analysts to support secondary market trading of each Fund; (iii) assisting with daily accounting and pricing; (iv) preparing periodic filings with regulators and stock exchanges; (v) overseeing and coordinating the activities of other service providers; (vi) organizing Board meetings and preparing the materials for such Board meetings; (vii) providing legal and compliance support; and (viii) performing other administrative functions necessary for the operation of each Fund, such as tax reporting, fulfilling regulatory filing requirements, and call center services. The Boards reviewed the structure and duties of BlackRock’s fund administration, accounting, legal and compliance departments and considered BlackRock’s policies and procedures for assuring compliance with applicable laws and regulations.

B. The Investment Performance of the Funds and BlackRock: The Boards, including the Independent Board Members, also reviewed and considered the performance history of each Fund. In preparation for the April 8, 2010 meeting, the Boards were provided with reports, independently prepared by Lipper, which included a comprehensive analysis of each Fund’s performance. The Boards also reviewed a narrative and statistical analysis of the Lipper data that was prepared by BlackRock, which analyzed various factors that affect Lipper’s rankings. In connection with their review, the Boards received and reviewed information regarding the investment performance of each Fund as compared to a representative group of similar funds as determined by Lipper and to all funds in each Fund’s applicable Lipper category. The Boards were provided with a description of the methodology used by Lipper to select peer funds. The Boards regularly review the performance of each Fund throughout the year.

The Boards of COY and CYE noted that, in general, COY and CYE performed better than their respective Peers in that the performance of each of COY and CYE were at or above the median of their Lipper Performance Universe in each of the one-, three- and five-year periods reported.

The Board of DSU noted that DSU performed below the median of its Lipper Performance Universe in the three- and five-year periods reported, but that DSU performed better than or equal to the median of its Lipper Performance Universe in the one-year period reported. The Board of DSU and BlackRock reviewed the reasons for DSU’s underperformance during the three- and five-year periods compared with its Peers. The Board of DSU was informed that, among other things, DSU’s credit positioning has traditionally been biased towards the lower quality ratings tiers, which negatively impacted relative performance in 2008.

The Board of FRB noted that FRB performed below the median of its Lipper Performance Universe in each of the one-, three- and five-year periods reported. The Board of FRB and BlackRock reviewed the reasons for FRB’s underperformance during these periods compared with its Peers. The Board of FRB was informed that, among other things, for much of 2007, and all of 2008 and 2009, FRB has run a relatively conservative investment strategy, emphasizing more recession-resistant sectors and underweighting higher volatility and more economically sensitive ones. In terms of general strategy, FRB remains relatively conservatively positioned despite the market’s improvement given the ongoing nature of the economic correction and credit crunch, as FRB’s portfolio managers believe that the deleveraging process will continue and impact consumers and more economically sensitive sectors.

The Board of ARK noted that ARK performed below the median of its Lipper Performance Universe in each of the one-, three- and five-year periods reported. The Board of ARK and BlackRock reviewed the reasons for ARK’s underperformance during these periods compared with its Peers. The Board of ARK was informed that, among other things, ARK’s credit positioning has traditionally been biased towards the lower quality ratings tiers, which negatively impacted relative performance in 2008.



68	SEMI-ANNUAL REPORT	AUGUST 31, 2010

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)

The Boards of DSU, FRB and ARK and BlackRock discussed BlackRock’s strategy for improving each respective Fund’s performance and BlackRock’s commitment to providing the resources necessary to assist each Fund’s portfolio managers and to improve each Fund’s performance.

The Boards noted that BlackRock has made changes to the organization of the overall fixed income group management structure designed to result in a strengthened leadership team with clearer accountability.

C. Consideration of the Advisory Fees and the Cost of the Services and Profits to be Realized by BlackRock and its Affiliates from their Relationship with the Funds: The Boards, including the Independent Board Members, reviewed each Fund’s contractual advisory fee rate compared with the other funds in its Lipper category. The Boards also compared each Fund’s total expenses, as well as actual management fees, to those of other funds in its Lipper category. The Boards considered the services provided and the fees charged by BlackRock to other types of clients with similar investment mandates, including separately managed institutional accounts.

The Boards received and reviewed statements relating to BlackRock’s financial condition and profitability with respect to the services it provided each Fund. The Boards were also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to each Fund. The Boards reviewed BlackRock’s profitability with respect to each Fund and other funds the Boards currently oversee for the year ended December 31, 2009 compared to available aggregate profitability data provided for the year ended December 31, 2008. The Boards reviewed BlackRock’s profitability with respect to other fund complexes managed by the Manager and/or its affiliates. The Boards reviewed BlackRock’s assumptions and methodology of allocating expenses in the profitability analysis, noting the inherent limitations in allocating costs among various advisory products. The Boards recognized that profitability may be affected by numerous factors including, among other things, fee waivers and expense reimbursements by the Manager, the types of funds managed, expense allocations and business mix, and the difficulty of comparing profitability as a result of those factors.

The Boards noted that, in general, individual fund or product line profitability of other advisors is not publicly available. Nevertheless, to the extent such information was available, the Boards considered BlackRock’s overall operating margin, in general, compared to the operating margin for leading investment management firms whose operations include advising closed-end funds, among other product types. That data indicates that operating margins for BlackRock with respect to its registered funds are generally consistent with margins earned by similarly situated publicly traded competitors. In addition, the Boards considered, among other things, certain third party data comparing BlackRock’s operating margin with that of other publicly traded asset management firms. That third party data indicates that larger asset bases do not, in themselves, translate to higher profit margins.

In addition, the Boards considered the cost of the services provided to each Fund by BlackRock, and BlackRock’s and its affiliates’ profits relating to the management and distribution of each Fund and the other funds advised by BlackRock and its affiliates. As part of their analysis, the Boards reviewed BlackRock’s methodology in allocating its costs to the management of each Fund. The Boards also considered whether BlackRock has the financial resources necessary to attract and retain high-quality investment management personnel to perform its obligations under the Agreements and to continue to provide the high quality of services that is expected by the Boards.

The Board of each Fund noted that its Fund’s contractual management fee rate was lower than or equal to the median contractual management fee rate paid by the Fund’s Peers, in each case, before taking into account any expense reimbursements or fee waivers.

D. Economies of Scale: The Boards, including the Independent Board Members, considered the extent to which economies of scale might be realized as the assets of each Fund increase. The Boards also considered the extent to which each Fund benefits from such economies and whether there should be changes in the advisory fee rate or structure in order to enable each Fund to participate in these economies of scale, for example through the use of breakpoints in the advisory fee based upon the asset level of each Fund.

The Boards noted that most closed-end fund complexes do not have fund level breakpoints because closed-end funds generally do not experience substantial growth after the initial public offering and each fund is managed independently consistent with its own investment objectives. The Boards noted that only one closed-end fund in the Fund Complex has breakpoints in its fee structure. Information provided by Lipper also revealed that only one closed-end fund complex with total closed-end fund nets assets exceeding $10 billion, as of December 31, 2009, used a complex level breakpoint structure.

E. Other Factors Deemed Relevant by the Board Members: The Boards, including the Independent Board Members, also took into account other ancillary or “fall-out” benefits that BlackRock or its affiliates and significant shareholders may derive from their respective relationships with the Funds, both tangible and intangible, such as BlackRock’s ability to leverage its investment professionals who manage other portfolios, an increase in BlackRock’s profile in the investment advisory community, and the engagement of BlackRock’s affiliates and significant shareholders as service providers to each Fund, including for administrative and distribution services. The Boards also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations. The Boards also noted that BlackRock may use and benefit from third party research obtained by soft dollars generated by certain mutual fund transactions to assist in managing all or a number of its other client accounts. The Boards further noted that BlackRock completed the acquisition of a complex of exchange-traded funds (“ETFs”) on December 1, 2009, and that BlackRock’s funds may invest in such ETFs without any offset against the management fees payable by the funds to BlackRock.

In connection with its consideration of the Agreements, the Boards also received information regarding BlackRock’s brokerage and soft dollar practices. The Boards received reports from BlackRock which included information on brokerage commissions and trade execution practices throughout the year.

The Boards noted the competitive nature of the closed-end fund marketplace, and that shareholders are able to sell their respective Fund shares in the secondary market if they believe that the Fund’s fees and expenses are too high or if they are dissatisfied with the performance of the Fund.



SEMI-ANNUAL REPORT	AUGUST 31, 2010	69

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (concluded)

Conclusion

The Boards, including the Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and each Fund for a one-year term ending June 30, 2011 and the Sub-Advisory Agreement between the Manager and the Sub-Advisor, with respect to each Fund, for a one-year term ending June 30, 2011. As part of its approval, each Board considered the discussions of BlackRock’s fee structure, as it applies to its respective Fund, being conducted by the ad hoc Joint Product Pricing Committee. Based upon its evaluation of all of the aforementioned factors in their totality, the Boards, including the Independent Board Members, were satisfied that the terms of the Agreements were fair and reasonable and in the best interest of each Fund and its shareholders. In arriving at a decision to approve the Agreements, the Boards did not identify any single factor or group of factors as all-important or controlling, but considered all factors together, and different Board Members may have attributed different weights to the various factors considered. The Independent Board Members were also assisted by the advice of independent legal counsel in making this determination. The contractual fee arrangements for each Fund reflect the results of several years of review by the Board Members and predecessor Board Members, and discussions between such Board Members (and predecessor Board Members) and BlackRock. Certain aspects of the arrangements may be the subject of more attention in some years than in others, and the Board Members’ conclusions may be based in part on their consideration of these arrangements in prior years.



70	SEMI-ANNUAL REPORT	AUGUST 31, 2010

Officers and Directors

Richard E. Cavanagh, Chairman of the Board and Director
Karen P. Robards, Vice Chair of the Board, Chair of the Audit Committee and Director
Richard S. Davis, Director
Frank J. Fabozzi, Director and Member of the Audit Committee
Kathleen F. Feldstein, Director
James T. Flynn, Director and Member of the Audit Committee
Henry Gabbay, Director
Jerrold B. Harris, Director
R. Glenn Hubbard, Director
W. Carl Kester, Director and Member of the Audit Committee
Anne Ackerley, Fund President and Chief Executive Officer
Brendan Kyne, Vice President
Neal Andrews, Chief Financial Officer
Jay Fife, Treasurer
Brian Kindelan, Chief Compliance Officer of the Funds
Howard Surloff, Secretary

Investment Advisor
BlackRock Advisors, LLC
Wilmington, DE 19809

Sub-Advisor
BlackRock Financial Management, Inc.
New York, NY 10055

Custodians
JPMorgan Chase Bank, N.A.¹New York, NY 10017

State Street Bank and Trust Company²Boston, MA 02111

The Bank of New York Mellon³New York, NY 10286

Transfer Agents
BNY Mellon Shareowner Services³Jersey City, NJ 07310

Computershare Trust Company, N.A.^1,2Providence, RI 02940

Accounting Agent
State Street Bank and Trust Company
Princeton, NJ 08540

Legal Counsel
Skadden, Arps, Slate, Meagher & Flom LLP
New York, NY 10036

Independent Registered Public Accounting Firm
Deloitte & Touche LLP
Princeton, NJ 08540

Address of the Funds
100 Bellevue Parkway
Wilmington, DE 19809


¹	For COY.
²	For CYE and FRB.
³	For DSU and ARK.



SEMI-ANNUAL REPORT	AUGUST 31, 2010	71

Additional Information

Dividend Policy

The Funds’ dividend policy is to distribute all or a portion of their net investment income to their shareholders on a monthly basis. In order to provide shareholders with a more stable level of dividend distributions, the Funds may at times pay out less than the entire amount of net investment income earned in any particular month and may at times in any particular month pay out such accumulated but undistributed income in addition to net investment income earned in that month. As a result, the dividends paid by the Funds for any particular month may be more or less than the amount of net investment income earned by the Funds during such month. The Funds’ current accumulated but undistributed net investment income, if any, is disclosed in the Statements of Assets and Liabilities, which comprises part of the financial information included in this report.

General Information

Electronic Delivery

Electronic copies of most financial reports are available on the Funds’ website or shareholders can sign up for e-mail notifications of quarterly statements, annual and semi-annual reports by enrolling in the Funds’ electronic delivery program.

Shareholders Who Hold Accounts with Investment Advisors, Banks or Brokerages:

Please contact your financial advisor to enroll. Please note that not all investment advisors, banks or brokerages may offer this service.

Householding

The Funds will mail only one copy of shareholder documents, including annual and semi-annual reports and proxy statements, to shareholders with multiple accounts at the same address. This practice is commonly called “householding” and is intended to reduce expenses and eliminate duplicate mailings of shareholder documents. Mailings of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please call (800) 441-7762.

Availability of Quarterly Schedule of Investments

Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the SEC’s website at http://www.sec.gov and may also be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. Each Fund’s Forms N-Q may also be obtained upon request and without charge by calling (800) 441-7762.

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available (1) without charge, upon request, by calling (800) 441-7762; (2) at http://www.blackrock.com; and (3) on the SEC’s website at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the Funds voted proxies relating to securities held in the Funds’ portfolios during the most recent 12-month period ended June 30 is available upon request and without charge (1) at http://www.blackrock.com or by calling (800) 441-7762 and (2) on the SEC’s website at http://www.sec.gov.



72	SEMI-ANNUAL REPORT	AUGUST 31, 2010

Additional Information (continued)

Section 19(a) Notices

These amounts and sources of distributions reported are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon each Fund’s investment experience during the year and may be subject to changes based on the tax regulations. The Funds will send you a Form 1099-DIV each calendar year that will tell you how to report these distributions for federal income tax purposes.


August 31, 2010

	Total Cumulative Distributions for the Fiscal Year								% Breakdown of the Total Cumulative Distributions for the Fiscal Year

	Net Investment Income		Net Realized Capital Gains		Return of Capital		Total Per Common Share		Net Investment Income		Net Realized Capital Gains		Return of Capital		Total Per Common Share

DSU		$0.178145		—		$0.001855		$0.180000		99%		0%		1%		100%
FRB		$0.398825		—		$0.051175		$0.450000		89%		0%		11%		100%

Each Fund estimates that it has distributed more than the amount of earned income and net realized gains; therefore, a portion of the distribution may be a return of capital. A return of capital may occur, for example, when some or all of the shareholder’s investment in a Fund is returned to the shareholder. A return of capital does not necessarily reflect a Fund’s investment performance and should not be confused with ‘yield’ or ‘income.’



SEMI-ANNUAL REPORT	AUGUST 31, 2010	73

Additional Information (concluded)

BlackRock Privacy Principles

BlackRock is committed to maintaining the privacy of its current and former fund investors and individual clients (collectively, “Clients”) and to safeguarding their non-public personal information. The following information is provided to help you understand what personal information BlackRock collects, how we protect that information and why in certain cases we share such information with select parties.

If you are located in a jurisdiction where specific laws, rules or regulations require BlackRock to provide you with additional or different privacy-related rights beyond what is set forth below, then BlackRock will comply with those specific laws, rules or regulations.

BlackRock obtains or verifies personal non-public information from and about you from different sources, including the following: (i) information we receive from you or, if applicable, your financial intermediary, on applications, forms or other documents; (ii) information about your transactions with us, our affiliates, or others; (iii) information we receive from a consumer reporting agency; and (iv) from visits to our websites.

BlackRock does not sell or disclose to non-affiliated third parties any non-public personal information about its Clients, except as permitted by law or as is necessary to respond to regulatory requests or to service Client accounts. These non-affiliated third parties are required to protect the confidentiality and security of this information and to use it only for its intended purpose.

We may share information with our affiliates to service your account or to provide you with information about other BlackRock products or services that may be of interest to you. In addition, BlackRock restricts access to non-public personal information about its Clients to those BlackRock employees with a legitimate business need for the information. BlackRock maintains physical, electronic and procedural safeguards that are designed to protect the non-public personal information of its Clients, including procedures relating to the proper storage and disposal of such information.



74	SEMI-ANNUAL REPORT	AUGUST 31, 2010

This report is transmitted to shareholders only. It is not a prospectus. Past performance results shown in this report should not be considered a representation of future performance. The Funds have leveraged their Common Shares, which creates risks for Common Shareholders, including the likelihood of greater volatility of net asset value and market price of the Common Shares, and the risk that fluctuations in short-term interest rates may reduce the Common Shares’ yield. Statements and other information herein are as dated and are subject to change.

(PAPERLESS LOGO)



#CEF1-5-8/10

Item 2 –	Code of Ethics – Not Applicable to this semi-annual report

Item 3 –	Audit Committee Financial Expert – Not Applicable to this semi-annual report

Item 4 –	Principal Accountant Fees and Services – Not Applicable to this semi-annual report

Item 5 –	Audit Committee of Listed Registrants – Not Applicable to this semi-annual report

Item 6 –	Investments
	(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form.
	(b) Not Applicable due to no such divestments during the semi-annual period covered since the previous Form N-CSR filing.

Item 7 –	Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not Applicable to this semi-annual report

Item 8 –	Portfolio Managers of Closed-End Management Investment Companies – Not Applicable to this semi-annual report

Item 9 –	Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not Applicable

Item 10 –	Submission of Matters to a Vote of Security Holders – On September 17, 2010, the Board of Directors of the Fund amended and restated in its entirety the bylaws of the Fund (the “Amended and Restated Bylaws”). The Amended and Restated Bylaws were deemed effective as of September 17, 2010 and set forth, among other things, the processes and procedures that shareholders of the Fund must follow, and specifies additional information that shareholders of the Fund must provide, when proposing director nominations at any annual meeting or special meeting in lieu of an annual meeting or other business to be considered at an annual meeting or special meeting.

Item 11 –	Controls and Procedures

11(a) –	The registrant’s principal executive and principal financial officers or persons performing similar functions have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date within 90 days of the filing of this report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.

11(b) –	There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12 –	Exhibits attached hereto

12(a)(1) –	Code of Ethics – Not Applicable to this semi-annual report

12(a)(2) –	Certifications – Attached hereto

12(a)(3) –	Not Applicable

12(b) –	Certifications – Attached hereto

	Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	BlackRock Senior High Income Fund, Inc.

	By:	/s/ Anne F. Ackerley
		Anne F. Ackerley
		Chief Executive Officer of
		BlackRock Senior High Income Fund, Inc.

	Date: November 5, 2010

	Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

	By:	/s/ Anne F. Ackerley
		Anne F. Ackerley
		Chief Executive Officer (principal executive officer) of
		BlackRock Senior High Income Fund, Inc.

	Date: November 5, 2010

	By:	/s/ Neal J. Andrews
		Neal J. Andrews
		Chief Financial Officer (principal financial officer) of
		BlackRock Senior High Income Fund, Inc.

	Date: November 5, 2010