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 811-08603

Name of Fund: BlackRock Debt Strategies Fund, Inc. (DSU)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: Anne F. Ackerley, Chief Executive Officer, BlackRock Debt Strategies Fund, Inc., 40 East 52^nd Street, New York, NY 10022.

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

Date of fiscal year end: 02/28/2010

Date of reporting period: 08/31/2009

Item 1 – Report to Stockholders

EQUITIES  FIXED INCOME  REAL ESTATE   LIQUIDITY  ALTERNATIVES  BLACKROCK SOLUTIONS

Semi-Annual Report

AUGUST 31, 2009 | (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
MAY LOSE VALUE
NO BANK GUARANTEE

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	45
Statements of Operations	46
Statements of Changes in Net Assets	47
Statements of Cash Flows	49
Financial Highlights	50
Notes to Financial Statements	55
Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements	63
Officers and Directors	67
Additional Information	68

2 SEMI-ANNUAL REPORT AUGUST 31, 2009

Dear Shareholder

The past 12 months reveal two distinct economic and market backdrops — one of extreme investor pessimism and decided weakness, and another of increased optimism amid growing signs of recovery. The start of the period was characterized by the former. September through December 2008 saw the surge of the economic storm that sparked the worst recession in decades. The months featured, among others, the infamous collapse of Lehman Brothers, uniformly poor economic data and plummeting investor confidence that resulted in massive government intervention (on a global scale) in the financial system and the economy. The tide turned dramatically in March 2009, however, on the back of new US government initiatives, as well as better-than-expected economic data and upside surprises in corporate earnings.

In this environment, US equities contended with extraordinary volatility, posting steep declines through mid-March before embarking on a rally that resulted in strong year-to-date returns for all major indexes. June saw a brief correction, though it appeared to be induced more by profit-taking and portfolio rebalancing than by a change in the economic outlook. The experience in international markets was similar to that in the United States. Notably, emerging markets staged a strong comeback in 2009 as these areas of the globe have generally seen a stronger acceleration in economic activity.

In fixed income markets, the flight-to-safety premium in Treasury securities prevailed during the equity market downturn, but more recently, ongoing concerns about deficit spending, debt issuance, inflation and dollar weakness have kept Treasury yields higher. At the same time, relatively attractive yields and distressed valuations among non-Treasury assets, coupled with a more favorable macro environment, drew in sidelined investors and triggered a sharp recovery in these sectors. This was particularly evident in the high yield sector, which has firmly outpaced all other taxable asset classes since the start of 2009. The municipal bond market enjoyed strong returns in 2009 as well, buoyed by a combination of attractive valuations, robust retail investor demand and a slowdown in forced selling. Moreover, the Build America Bond program has alleviated supply pressures, creating a more favorable technical environment. In particular, August marked the municipal market’s best monthly performance in more than 20 years, as the asset class has regained year-to-date all that was lost during 2008.

Overall, results for the major benchmark indexes were mixed. Higher-risk assets (i.e., equities and high yield bonds) and Treasuries reflected a bifurcated market, while less-risky fixed income investments posted stable, modest returns.

Total Returns as of August 31, 2009	6-month			12-month
US equities (S&P 500 Index)		40.52	%		(18.25	)%
Small cap US equities (Russell 2000 Index)		48.25			(21.29	)
International equities (MSCI Europe, Australasia, Far East Index)		53.47			(14.95	)
US Treasury securities (BofA Merrill Lynch 10-Year US Treasury Index*)		(1.61	)		6.77
Taxable fixed income (Barclays Capital US Aggregate Bond Index)		5.95			7.94
Tax-exempt fixed income (Barclays Capital Municipal Bond Index)		5.61			5.67
High yield bonds (Barclays Capital US Corporate High Yield 2% Issuer Capped Index)		36.31			7.00

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

The market environment has visibly improved since the beginning of the year, but a great deal of uncertainty and risk remain. Through periods of market turbulence, as ever, BlackRock’s full resources are dedicated to the management of our clients’ assets. We invite you to visit www.blackrock.com/funds for our most current views on the economy and financial markets. As always, we thank you for entrusting BlackRock with your investments, and we look forward to continuing to serve you in the months and years ahead.

Sincerely,

Rob Kapito
President, BlackRock Advisors, LLC

Announcement to Shareholders

On June 16, 2009, BlackRock, Inc. announced that it received written notice from Barclays PLC (“Barclays”) in which Barclays’ Board of Directors had accepted BlackRock’s offer to acquire Barclays Global Investors (“BGI”). At a special meeting held on August 6, 2009, BlackRock’s proposed purchase of BGI was approved by an overwhelming majority of Barclays’ voting shareholders, an important step toward closing the transaction. The combination of BlackRock and BGI will bring together market leaders in active and index strategies to create the preeminent asset management firm. The transaction is scheduled to be completed in the fourth quarter of 2009, subject to important fund shareholder and regulatory approvals.

THIS PAGE NOT PART OF YOUR FUND REPORT 3

Fund Summary as of August 31, 2009 BlackRock Corporate High Yield Fund, Inc.

Investment Objective

BlackRock Corporate High Yield Fund, Inc. (COY) (the “Fund”) seeks to provide shareholders with current income with a secondary objective of providing shareholders with capital appreciation. The Fund seeks to achieve its objective by investing primarily in a diversified portfolio of fixed-income securities that are rated below investment grade by the established rating services (Ba or lower by Moody’s Investors Service, Inc. (“Moody’s”) or BB or lower by Standard & Poor’s Corporation (“S&P’s”)) or are unrated securities of comparable quality.

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

Performance

For the six months ended August 31, 2009, the Fund returned 66.35% based on market price and 49.85% 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 50.49% on a market price basis and 40.06% on a NAV basis. During the period, the Fund moved from a discount to a premium to NAV, which accounts for the difference between performance based on price and performance based on NAV. The period featured the largest six-month rise in high yield market history, providing a good environment for bottom-up security selection, with no emphasis on any one sector. We gradually decreased cash and increased the Fund’s risk as market conditions dictated. Overall, there was a wide dispersion of returns among the Fund’s Lipper competitors, as many funds did well while others struggled with credit issues or retained too defensive a strategy. Security selection was the primary contributor to performance during the period. The Fund maintains a 16% position in floating rate loan interests, which detracted as these securities underperformed high yield corporate bonds. During the period, the Fund moved from a larger cash balance to a balance of less than 3%, which has benefited performance in the rising market.

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 New York Stock Exchange (“NYSE”)	COY
Initial Offering Date	June 25, 1993
Yield on Closing Market Price as of August 31, 2009 ($6.06)1	12.08%
Current Monthly Distribution per Share2	$0.061
Current Annualized Distribution per Share2	$0.732
Leverage as of August 31, 20093	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	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 borrowing) 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:

	8/31/09	2/28/09	Change		High	Low
Market Price	$6.06	$3.91	54.99	%	$6.28	$3.20
Net Asset Value	$5.85	$4.19	39.62	%	$5.87	$3.97

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

	8/31/09		2/28/09
Corporate Bonds	82	%	82	%
Floating Rate Loan Interests	16		16
Common Stocks	2		1
Non-Agency Mortgage-Backed Securities	—		1

Credit Quality Allocations⁴

	8/31/09		2/28/09
BBB/Baa	5	%	4	%
BB/BB	31		31
B/B	37		47
CCC/Caa	21		12
CC/Ca	2		1
D	1		—
Not Rated	3		5
4 Using the higher of S&P’s or Moody’s ratings.

4 SEMI-ANNUAL REPORT AUGUST 31, 2009

Fund Summary as of August 31, 2009	BlackRock Corporate High Yield Fund III, Inc.
Investment Objective

BlackRock Corporate High Yield Fund III, Inc. (CYE) (the “Fund”) seeks to provide shareholders with current income by investing primarily in a diversified portfolio of fixed income securities that are rated in the lower rating categories of the established rating services (Ba or lower by Moody’s or BB or lower by S&P’s) or are unrated securities of comparable quality.

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

     Performance

For the six months ended August 31, 2009, the Fund returned 68.87% based on market price and 52.83% based on NAV. For the same period, the closed-end Lipper High Current Yield Funds (Leveraged) category posted an average return of 50.49% on a market price basis and 40.06% on a NAV basis. All returns reflect reinvestment of dividends. The Fund’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The period featured the largest six-month rise in high yield market history, providing a good environment for bottom-up security selection, with no emphasis on any one sector. We gradually decreased cash and increased the Fund’s risk as market conditions have dictated. Overall, there was a wide dispersion of returns among the Fund’s Lipper competitors, as many funds did well while others struggled with credit issues or retained too defensive a strategy. Security selection was the primary contributor to performance during the period. The Fund maintains a 16% position in floating rate loan interests, which detracted as these securities underperformed high yield corporate bonds. During the period, the Fund moved from a larger cash balance to a balance of less than 1%, which has benefited performance in the rising market.

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, 2009 ($5.62)1	11.74%
Current Monthly Distribution per Share2	$0.055
Current Annualized Distribution per Share2	$0.660
Leverage as of August 31, 20093	18%

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 borrowing) 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:

	8/31/09		2/28/09		Change			High		Low
Market Price		$5.62		$3.57		57.42	%		$5.82		$3.05
Net Asset Value		$5.77		$4.05		42.47	%		$5.78		$3.83

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
	8/31/09			2/28/09
Corporate Bonds		81	%		82	%
Floating Rate Loan Interests		16			16
Non-Agency Mortgage-Backed Securities		—			1
Common Stocks		3			1

Credit Quality Allocations4
	8/31/09			2/28/09
AAA/Aaa		—			1	%
BBB/Baa		4	%		5
BB/Ba		31			30
B/B		35			46
CCC/Caa		22			14
CC/Ca		3			1
D		1			—
Not Rated		4			3

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

SEMI-ANNUAL REPORT AUGUST 31, 2009 5

Fund Summary as of August 31, 2009	BlackRock Debt Strategies Fund, Inc.
Investment Objective

BlackRock Debt Strategies Fund, Inc. (DSU) (the “Fund”) seeks to provide current income by investing primarily in a diversified portfolio of US companies’ debt instruments, including corporate loans, that are rated in the lower rating categories of the established rating services (Ba or lower by Moody’s or BB or lower by S&P’s) or unrated debt instruments of comparable quality.

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

     Performance

For the six months ended August 31, 2009, the Fund returned 74.49% based on market price and 51.87% based on NAV. For the same period, the closed-end Lipper High Current Yield Funds (Leveraged) category posted an average return of 50.49% on a market price basis and 40.06% on a NAV basis. All returns reflect reinvestment of dividends. The Fund moved from a discount to a premium to NAV, which accounts for the difference between performance based on price and performance based on NAV. The Fund benefited from a slight bias to lower-quality credits, which outperformed higher-quality credits during the six months. Unlike its Lipper peers, the Fund invests in floating rate loan interests as well as high yield bonds. Loans underperformed bonds for the period; consequently, the Fund’s 41% average allocation to loans detracted from relative performance. The Fund also maintained a relatively low level of leverage (less than 15%), which detracted in the strong market environment. During the period, the Fund moved from a larger cash balance to a balance of less than 1%, which has benefited performance in the rising market.

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, 2009 ($3.35)1	12.72%
Current Monthly Distribution per Share2	$0.0355
Current Annualized Distribution per Share2	$0.4260
Leverage as of August 31, 20093	12%

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, 2009. The Monthly Distribution per Share was decreased to $0.031. 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 further 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 borrowing) 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:

	8/31/09	2/28/09	Change		High	Low
Market Price	$3.35	$2.07	61.84	%	$3.58	$1.63
Net Asset Value	$3.31	$2.35	40.85	%	$3.31	$2.21

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
	8/31/09			2/28/09
Corporate Bonds		55	%		53	%
Floating Rate Loan Interests		41			43
Common Stocks		4			3
Non-Agency Mortgage-Backed Securities		—			1

Credit Quality Allocations4
	8/31/09			2/28/09
BBB/Baa		1	%		9	%
BB/Ba		26			—
B/B		38			59
CCC/Caa		16			21
CC/Ca		4			4
C/C		2			—
D		2			1
Not Rated		11			6

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

6 SEMI-ANNUAL REPORT AUGUST 31, 2009

Fund Summary as of August 31, 2009	BlackRock Floating Rate Income Strategies Fund II, Inc.
Investment Objective

BlackRock Floating Rate Income Strategies Fund II, Inc. (FRB) (the “Fund”) seeks a 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.

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

Performance

For the six months ended August 31, 2009, the Fund returned 46.51% based on market price and 42.76% based on NAV. For the same period, the closed-end Lipper Loan Participation Funds category posted an average return of 54.27% on a market price basis and 37.19% on a NAV basis. All returns reflect reinvestment of dividends. The Fund’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The Fund benefited from a slight bias to lower-quality credits, which outperformed higher-quality in 2009, and a 27% allocation to high yield corporate bonds, which outperformed floating rate loan interests. The Fund’s relatively low level of leverage (around 16%) detracted in the strong market environment. During the period, the Fund moved from a larger cash balance to a balance of less than 2%, which has benefited performance in the rising market.

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, 2009 ($11.45)1		9.78%
Current Monthly Distribution per Share2	$0.09335
Current Annualized Distribution per Share2	$1.12020
Leverage as of August 31, 20093	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, 2009. The Monthly Distribution per Share was decreased to $0.081. 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 further 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 borrowing) 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:

	8/31/09			2/28/09			Change		High			Low
Market Price		$	11.45		$	8.28	38.29	%		$	11.66		$	7.16
Net Asset Value		$	12.02		$	8.92	34.75	%		$	12.02		$	8.58

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

	8/31/09		2/28/09
Floating Rate Loan Interests	73	%	71	%
Corporate Bonds	27		28
Non-Agency Mortgage-Backed Securities	—		1

Credit Quality Allocations⁴

	8/31/09		2/28/09
BBB/Baa	7	%	15	%
BB/Ba	42		8
B/B	36		57
CCC/Caa	9		15
CC/Ca	1		2
D	1		1
Not Rated	4		2

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

SEMI-ANNUAL REPORT AUGUST 31, 2009 7

Fund Summary as of August 31, 2009	BlackRock Senior High Income Fund, Inc.
Investment Objective

BlackRock Senior High Income Fund, Inc. (ARK) (the “Fund”) seeks to provide shareholders with as high a level of current income as is consistent with its investment policies and prudent investment management 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.

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

Performance

For the six months ended August 31, 2009, the Fund returned 51.37% based on market price and 43.72% based on NAV. For the same period, the closed-end Lipper High Current Yield Funds (Leveraged) category posted an average return of 50.49% on a market price basis and 40.06% on a NAV basis. All returns reflect reinvestment of dividends. The Fund’s discount to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The Fund benefited from a slight bias to lower-quality credits, which outperformed higher-quality credits. Unlike its Lipper peers, the Fund invests in floating rate loan interests as well as high yield corporate bonds. Loans underperformed bonds for the period; consequently, the Fund’s 40% average allocation to floating rate loan interests detracted from relative performance. The Fund also maintained a relatively low level of leverage (less than 15%), which detracted in the strong market environment. During the period, the Fund moved from a larger cash balance to a balance of less than 1%, which has benefited performance in the rising market.

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, 2009 ($3.18)1	9.43%
Current Monthly Distribution per Common Share2	$0.025
Current Annualized Distribution per Common Share2	$0.300
Leverage as of August 31, 20093	8%

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 borrowing) 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:

	8/31/09			2/28/09			Change			High			Low
Market Price		$	3.18		$	2.21		43.89	%		$	3.35		$	1.78
Net Asset Value		$	3.47		$	2.54		36.61	%		$	3.47		$	2.41

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

	8/31/09		2/28/09
Corporate Bonds	55	%	55	%
Floating Rate Loan Interests	43		44
Common Stock	2		—
Non-U.S. Government Agency Mortgage-Backed Securities	—		1

Credit Quality Allocations⁴

	8/31/09		2/28/09
BBB/Baa	5	%	2	%
BB/Ba	27		22
B/B	40		59
CCC/Caa	19		8
CC/Ca	1		3
D	3		1
Not Rated	5		5

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

8 SEMI-ANNUAL REPORT AUGUST 31, 2009

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 through borrowings or issuance of short-term debt. In general, the concept of leveraging is based on the premise that the 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 the debt securities issuance earn the income based on long-term interest rates. In this case, the interest expense of the debt securities 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 debt securities 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 debt securities.

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. A Fund may be required to sell portfolio securities at inopportune times 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 a Fund’s ability to invest in certain types of securities or use certain types of hedging strategies. A Fund will incur expenses in connection with the use of leverage, all of which are borne by the shareholders and may reduce income.

Under the Investment Company Act of 1940, the Funds are permitted to borrow through a credit facility and the issuance of short-term debt securities up to 33¹/₃% of their total managed assets. As of August 31, 2009, the Funds had outstanding leverage from credit facility borrowings as a percentage of total managed assets as follows:

	Percent of Leverage
COY	16	%
CYE	18	%
DSU	12	%
FRB	16	%
ARK	8	%

Derivative Financial Instruments

The Funds may invest in various derivative instruments, including swap agreements, foreign currency exchange contracts and options, as specified in Note 2 of the Notes to Financial Statements, which 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 and/or interest 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 and illiquidity of the derivative instrument. A Fund’s 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 the Funds to sell or purchase portfolio securities at inopportune times or for distressed values, may limit the amount of appreciation the Funds can realize on an investment or may cause the Funds to hold a security that they might otherwise sell. The Funds’ investments in these instruments are discussed in detail in the Notes to Financial Statements.

SEMI-ANNUAL REPORT AUGUST 31, 2009 9

Schedule of Investments August 31, 2009 (Unaudited)	BlackRock Corporate High Yield Fund, Inc. (COY)
	(Percentages shown are based on Net Assets)

Common Stocks	Shares		Value
Building Products — 0.7%
Masonite Worldwide Holdings (a)		35,518	$	1,436,703
Capital Markets — 0.4%
E*Trade Financial Corp. (a)		479,000		843,040
Chemicals — 0.0%
Wellman Holdings, Inc. (a)		1,425		356
Communications Equipment — 0.8%
Loral Space & Communications Ltd. (a)		77,483		1,599,249
Containers & Packaging — 0.0%
Smurfit Kappa Plc (a)		3,634		28,637
Electrical Equipment — 0.0%
Medis Technologies Ltd. (a)		67,974		19,373
SunPower Corp. Class B (a)		352		7,529
				26,902
Paper & Forest Products — 0.1%
Ainsworth Lumber Co. Ltd. (a)		37,144		53,608
Ainsworth Lumber Co. Ltd. (a)(b)		41,686		59,972
Western Forest Products, Inc. (a)(b)		41,528		9,863
Western Forest Products, Inc. (a)		147,968		35,142
				158,585
Total Common Stocks — 2.0%				4,093,472

Corporate Bonds		Par  (000)
Airlines — 1.6%
American Airlines Pass Through Trust Series 2001-02, 7.86%, 4/01/13	USD	390	372,450
Continental Airlines, Inc.:
Series 1997-4-B, 6.90%, 7/02/18		674	525,389
Series 2001-1-C, 7.03%, 12/15/12		281	221,711
Series 2003-RJ, 7.88%, 1/02/20		587	384,428
United Air Lines, Inc., 12.75%, 7/15/12		1,750	1,680,000
			3,183,978
Auto Components — 1.4%
Allison Transmission, Inc., 11.00%, 11/01/15 (b)		670	603,000
The Goodyear Tire & Rubber Co.:
7.86%, 8/15/11		1,355	1,348,225
8.63%, 12/01/11		712	719,120
Lear Corp., 8.75%, 12/01/16 (a)(c)		405	218,700
			2,889,045
Automobiles — 0.4%
Ford Capital BV, 9.50%, 6/01/10		710	702,900
Building Products — 0.2%
Ply Gem Industries, Inc., 11.75%, 6/15/13		580	484,300
Capital Markets — 0.5%
E*Trade Financial Corp. (b):
12.50%, 11/30/17 (d)		71	71,887
3.43%, 8/31/19 (e)(f)		226	386,178
Marsico Parent Co., LLC, 10.63%, 1/15/16 (a)(c)		1,004	421,680
Marsico Parent Holdco, LLC, 12.50%, 7/15/16 (b)(d)		418	100,337
Marsico Parent Superholdco, LLC, 14.50%, 1/15/18 (b)(d)		287	74,609
			1,054,691

Corporate Bonds		Par  (000)	Value
Chemicals — 1.9%
American Pacific Corp., 9.00%, 2/01/15	USD	800	$	722,000
Innophos, Inc., 8.88%, 8/15/14		740		717,800
MacDermid, Inc., 9.50%, 4/15/17 (b)		1,180		991,200
Olin Corp., 8.88%, 8/15/19		275		277,750
Terra Capital, Inc., Series B, 7.00%, 2/01/17		205		193,213
Wellman Holdings, Inc. (e):
Second Lien Subordinate Note, 10.00%, 1/29/19 (b)		790		790,000
Third Lien Subordinate Note, 5.00%, 1/29/19		246		123,250
				3,815,213
Commercial Services & Supplies — 4.0%
Altegrity, Inc., 10.50%, 11/01/15 (b)		700		579,250
ISS Financing, 11.00%, 6/15/14	EUR	206		381,515
RSC Equipment Rental, Inc., 10.00%, 7/15/17 (b)	USD	555		579,975
Scientific Games International, Inc., 9.25%, 6/15/19 (b)		785		804,625
Waste Services, Inc., 9.50%, 4/15/14		2,800		2,772,000
West Corp.:
9.50%, 10/15/14		700		645,750
11.00%, 10/15/16		2,570		2,370,825
				8,133,940
Construction & Engineering — 0.7%
Dycom Industries, Inc., 8.13%, 10/15/15		1,650		1,435,500
Construction Materials — 1.3%
Nortek, Inc., 10.00%, 12/01/13		2,020		1,878,600
Texas Industries, Inc., 7.25%, 7/15/13		720		673,200
				2,551,800
Consumer Finance — 0.2%
Ford Motor Credit Co. LLC:
3.26%, 1/13/12 (g)		195		162,338
7.80%, 6/01/12		200		185,009
8.00%, 12/15/16		170		148,944
				496,291
Containers & Packaging — 4.1%
Berry Plastics Holding Corp., 4.50%, 9/15/14 (g)		1,655		1,191,600
Crown European Holdings SA, 6.25%, 9/01/11	EUR	73		104,653
Graphic Packaging International, Inc.:
8.50%, 8/15/11	USD	512		510,720
9.50%, 8/15/13		60		60,150
9.50%, 6/15/17 (b)		1,075		1,101,875
Impress Holdings BV, 3.63%, 9/15/13 (b)(g)		390		356,363
Owens Brockway Glass Container, Inc.:
8.25%, 5/15/13		925		934,250
6.75%, 12/01/14	EUR	152		211,371
Packaging Dynamics Finance Corp., 10.00%, 5/01/16 (b)	USD	1,255		401,600
Pregis Corp., 12.38%, 10/15/13		1,130		1,017,000
Rock-Tenn Co., 8.20%, 8/15/11		1,875		1,931,250
Solo Cup Co., 10.50%, 11/01/13 (b)		450		472,500
				8,293,332
Diversified Consumer Services — 1.3%
Service Corp., International, 7.00%, 6/15/17		2,800		2,618,000

See Notes to Financial Statements.
10	SEMI-ANNUAL REPORT	AUGUST 31, 2009

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

Corporate Bonds		Par  (000)	Value
Diversified Financial Services — 7.5%
Axcan Intermediate Holdings, Inc., 12.75%, 3/01/16	USD	490	$	512,050
Bank of America Corp., 5.65%, 5/01/18		700		676,860
CIT Group, Inc., 5.00%, 2/01/15		1,005		565,570
FCE Bank Plc:
7.875%, 2/15/11	GBP	1,150		1,750,452
7.125%, 1/16/12	EUR	2,850		3,697,637
7.125%, 1/15/13		550		689,924
Series JD, 2.12%, 9/30/09 (g)		250		355,266
GMAC LLC (b):
7.25%, 3/02/11	USD	1,148		1,077,685
6.88%, 9/15/11		500		461,250
6.88%, 8/28/12		740		643,800
2.56%, 12/01/14 (g)		841		647,570
6.75%, 12/01/14		1,690		1,385,800
8.00%, 11/01/31		1,980		1,529,550
Leucadia National Corp., 8.13%, 9/15/15		1,250		1,225,000
				15,218,414
Diversified Telecommunication Services — 5.2%
Broadview Networks Holdings, Inc., 11.38%, 9/01/12		1,000		860,000
Cincinnati Bell, Inc., 7.25%, 7/15/13		435		421,950
Nordic Telephone Co. Holdings ApS, 8.88%, 5/01/16 (b)		1,340		1,360,100
Qwest Communications International, Inc.:
7.50%, 2/15/14		1,890		1,823,850
3.50%, 11/15/25 (e)		620		613,800
Series B, 7.50%, 2/15/14		1,645		1,587,425
Qwest Corp.:
3.88%, 6/15/13 (g)		1,350		1,248,750
7.63%, 6/15/15		500		496,250
8.38%, 5/01/16 (b)		400		404,000
Windstream Corp., 8.13%, 8/01/13		1,780		1,780,000
				10,596,125
Electric Utilities — 1.1%
NSG Holdings LLC, 7.75%, 12/15/25 (b)		965		805,775
Tenaska Alabama Partners LP, 7.00%, 6/30/21 (b)		1,730		1,502,580
				2,308,355
Electrical Equipment — 0.0%
UCAR Finance, Inc., 10.25%, 2/15/12		49		47,591
Electronic Equipment, Instruments & Components — 0.3%
Jabil Circuit, Inc., 7.75%, 7/15/16		280		275,450
Sanmina-SCI Corp., 8.13%, 3/01/16		270		232,875
				508,325
Energy Equipment & Services — 0.7%
Compagnie Générale de Géophysique-Veritas:
7.50%, 5/15/15		195		185,250
7.75%, 5/15/17		300		283,500
North American Energy Partners, Inc., 8.75%, 12/01/11		355		326,600
Transocean, Inc., Series A, 1.63%, 12/15/37 (e)		730		709,925
				1,505,275
Food & Staples Retailing — 0.5%
AmeriQual Group LLC, 9.50%, 4/01/12 (b)		750		487,500
Duane Reade, Inc., 11.75%, 8/01/15 (b)		160		161,600
Rite Aid Corp., 9.75%, 6/12/16 (b)		390		412,425
				1,061,525

Corporate Bonds		Par  (000)	Value
Food Products — 0.5%
Smithfield Foods, Inc., 10.00%, 7/15/14 (b)	USD	760	$	775,200
Tyson Foods, Inc., 10.50%, 3/01/14		270		301,050
				1,076,250
Health Care Equipment & Supplies — 2.4%
Catalent Pharma Solutions, Inc., 9.50%, 4/15/15 (d)		900		742,500
DJO Finance LLC, 10.88%, 11/15/14		2,675		2,568,000
Hologic, Inc., 2.00%, 12/15/37 (e)(i)		1,860		1,501,950
				4,812,450
Health Care Providers & Services — 1.2%
Community Health Systems, Inc., Series WI, 8.88%, 7/15/15		190		190,712
Tenet Healthcare Corp. (b):
9.00%, 5/01/15		1,502		1,539,550
10.00%, 5/01/18		622		670,205
				2,400,467
Hotels, Restaurants & Leisure — 4.6%
American Real Estate Partners LP, 7.13%, 2/15/13		2,815		2,674,250
Gaylord Entertainment Co., 8.00%, 11/15/13		595		542,938
Greektown Holdings, LLC, 10.75%, 12/01/13 (a)(b)(c)		522		112,230
Harrah’s Operating Co., Inc., 10.00%, 12/15/18 (b)		881		616,700
Inn of the Mountain Gods Resort & Casino, 12.00%, 11/15/10 (a)(c)		1,425		627,000
Little Traverse Bay Bands of Odawa Indians, 10.25%, 2/15/14 (a)(b)(c)		1,175		517,000
MGM Mirage, 11.13%, 11/15/17 (b)		780		844,350
Penn National Gaming, Inc., 6.88%, 12/01/11		1,875		1,875,000
San Pasqual Casino, 8.00%, 9/15/13 (b)		925		874,125
Scientific Games Corp., 0.75%, 12/01/24 (e)(i)		270		264,263
Shingle Springs Tribal Gaming Authority, 9.38%, 6/15/15 (b)		45		31,950
Travelport LLC:
4.99%, 9/01/14 (g)		145		105,125
9.88%, 9/01/14		190		161,025
Tropicana Entertainment LLC Series WI, 9.63%, 12/15/14 (a)(c)		315		197
Virgin River Casino Corp., 9.00%, 1/15/12 (a)(c)		805		82,513
				9,328,666
Household Durables — 2.0%
American Greetings Corp., 7.38%, 6/01/16		975		833,625
Beazer Homes USA, Inc.:
8.38%, 4/15/12		855		645,525
8.13%, 6/15/16		120		74,400
4.63%, 6/15/24 (e)		120		99,000
Jarden Corp., 8.00%, 5/01/16		240		246,000
KB Home:
6.38%, 8/15/11		29		28,710
9.10%, 9/15/17		320		326,400
Meritage Homes Corp., 6.25%, 3/15/15		250		215,000
Standard Pacific Corp.:
6.25%, 4/01/14		700		549,500
7.00%, 8/15/15		1,075		843,875
Toll Brothers Finance Corp., 8.91%, 10/15/17		219		243,825
				4,105,860
IT Services — 1.8%
Alliance Data Systems Corp., 1.75%, 8/01/13 (e)		1,340		1,192,600
First Data Corp.:
9.88%, 9/24/15		160		136,800
11.25%, 3/31/16 (b)		2,320		1,774,800
SunGard Data Systems, Inc., 10.63%, 5/15/15 (b)		530		547,225
				3,651,425

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	11

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

Corporate Bonds		Par  (000)	Value
Independent Power Producers & Energy Traders — 3.6%
The AES Corp., 8.75%, 5/15/13 (b)	USD	994	$	1,008,910
AES Eastern Energy LP Series 99-B, 9.67%, 1/02/29		575		494,500
Calpine Construction Finance Co. LP, 8.00%, 6/01/16 (b)		915		910,425
Energy Future Holdings Corp., 11.25%, 11/01/17 (d)		3,498		2,002,248
NRG Energy, Inc.:
7.25%, 2/01/14		1,525		1,483,063
7.38%, 2/01/16		930		889,313
Texas Competitive Electric Holdings Co. LLC, 10.50%, 11/01/16 (d)		951		527,507
				7,315,966
Industrial Conglomerates — 1.7%
Sequa Corp. (b):
11.75%, 12/01/15		2,380		1,499,400
13.50%, 12/01/15 (d)		3,636		1,899,829
				3,399,229
Insurance — 1.0%
Alliant Holdings I, Inc., 11.00%, 5/01/15 (b)		1,600		1,460,000
USI Holdings Corp., 4.32%, 11/15/14 (b)(g)		630		486,675
				1,946,675
Leisure Equipment & Products — 0.6%
Brunswick Corp., 11.25%, 11/01/16 (b)		1,070		1,120,825
Life Sciences Tools & Services — 0.1%
Bio-Rad Laboratories, Inc., 8.00%, 9/15/16 (b)		200		204,000
Machinery — 0.8%
AGY Holding Corp., 11.00%, 11/15/14		1,200		948,000
Accuride Corp., 8.50%, 2/01/15 (a)(c)		515		103,000
CPM Holdings, Inc., 10.63%, 9/01/14 (b)		100		101,000
RBS Global, Inc.:
9.50%, 8/01/14 (b)		205		188,600
8.88%, 9/01/16		420		337,050
				1,677,650
Marine — 0.6%
Horizon Lines, Inc., 4.25%, 8/15/12 (e)		1,090		792,975
Navios Maritime Holdings, Inc., 9.50%, 12/15/14		442		386,750
				1,179,725
Media — 10.1%
Affinion Group, Inc.:
10.13%, 10/15/13		1,255		1,247,156
10.13%, 10/15/13 (b)		355		352,781
CCO Holdings LLC, 8.75%, 11/15/13		515		520,150
CMP Susquehanna Corp., 4.75%, 5/15/14 (b)		150		3,000
CSC Holdings, Inc.:
8.50%, 4/15/14 (b)		370		375,550
Series B, 7.63%, 4/01/11		325		329,062
Cablevision Systems Corp., Series B, 8.00%, 4/15/12		965		986,712
Catalina Marketing Corp., 10.50%, 10/01/15 (b)(d)		1,970		1,915,825
Charter Communications Holdings II, LLC, 10.25%, 9/15/10 (a)(c)		685		761,206
Charter Communications Operating, LLC (a)(b)(c):
8.00%, 4/30/12		500		503,750
8.38%, 4/30/14		660		668,250
EchoStar DBS Corp., 7.00%, 10/01/13		90		88,200
Harland Clarke Holdings Corp.:
6.00%, 5/15/15 (g)		330		235,950
9.50%, 5/15/15 (b)		390		331,500
Intelsat Corp., 9.25%, 6/15/16		2,040		2,065,500
Intelsat Subsidiary Holding Co. Ltd., 8.88%, 1/15/15 (b)		250		250,625

Corporate Bonds		Par  (000)	Value
Media (concluded)
Liberty Media Corp., 3.13%, 3/30/23 (e)	USD	1,023	$	982,080
Local Insight Regatta Holdings, Inc., 11.00%, 12/01/17		673		255,740
Network Communications, Inc., 10.75%, 12/01/13		20		4,050
Nielsen Finance LLC,:
11.63%, 2/01/14		70		69,475
10.00%, 8/01/14		1,740		1,644,300
ProtoStar I Ltd., 18.00%, 10/15/12 (a)(b)(c)(e)		812		324,708
Rainbow National Services LLC, 10.38%, 9/01/14 (b)		1,496		1,563,320
TL Acquisitions, Inc., 10.50%, 1/15/15 (b)		3,895		3,544,450
UPC Holdings BV, 9.88%, 4/15/18 (b)		500		505,625
Virgin Media, Inc., 6.50%, 11/15/16 (b)(e)		1,125		1,019,531
				20,548,496
Metals & Mining — 5.1%
Aleris International, Inc. (a)(c):
9.00%, 12/15/14		950		2,375
10.00%, 12/15/16		800		2,000
Anglo American Capital Plc, 9.38%, 4/08/19 (b)		345		403,650
Drummond Co., Inc., 7.38%, 2/15/16 (b)		215		189,200
FMG Finance Property Ltd. (b):
10.00%, 9/01/13		500		527,500
10.63%, 9/01/16		1,210		1,300,750
Foundation PA Coal Co., 7.25%, 8/01/14		1,850		1,803,750
Freeport-McMoRan Copper & Gold, Inc., 8.38%, 4/01/17		960		1,000,800
Novelis, Inc.:
7.25%, 2/15/15		1,875		1,518,750
11.50%, 2/15/15 (b)		405		391,838
Ryerson, Inc.:
7.86%, 11/01/14 (g)		380		323,000
12.00%, 11/01/15		245		225,400
Steel Dynamics, Inc., 7.38%, 11/01/12		440		432,300
Teck Resources Ltd.:
10.25%, 5/15/16		285		314,925
10.75%, 5/15/19		1,095		1,246,931
Vedanta Resources Plc, 9.50%, 7/18/18 (b)		600		564,000
				10,247,169
Multiline Retail — 0.5%
Dollar General Corp.:
10.63%, 7/15/15		265		294,150
11.88%, 7/15/17 (d)		185		207,662
Macy’s Retail Holdings, Inc., 5.88%, 1/15/13		455		429,026
				930,838
Oil, Gas & Consumable Fuels — 9.0%
Arch Coal, Inc., 8.75%, 8/01/16 (b)		290		290,000
Atlas Energy Operating Co. LLC, 12.13%, 8/01/17		450		474,750
Atlas Energy Resources LLC, 10.75%, 2/01/18 (b)		1,000		1,010,000
Berry Petroleum Co., 8.25%, 11/01/16		470		418,300
Bill Barrett Corp., 9.88%, 7/15/16		225		234,000
Chesapeake Energy Corp.:
9.50%, 2/15/15		500		510,000
7.25%, 12/15/18		990		905,850
2.25%, 12/15/38 (e)		775		520,219
Connacher Oil and Gas Ltd. (b):
11.75%, 7/15/14		165		167,475
10.25%, 12/15/15		1,075		757,875
Corral Finans AB, 2.01%, 4/15/10 (b)(d)		1,630		1,185,624
EXCO Resources, Inc., 7.25%, 1/15/11		2,435		2,386,300
Encore Acquisition Co., 6.25%, 4/15/14		1,850		1,646,500
Forest Oil Corp., 7.25%, 6/15/19		2,260		2,124,400
Massey Energy Co., 3.25%, 8/01/15 (e)		1,210		904,475
OPTI Canada, Inc., 8.25%, 12/15/14		1,450		942,500

See Notes to Financial Statements.
12	SEMI-ANNUAL REPORT	AUGUST 31, 2009

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

Corporate Bonds	Par (000)		Value
Oil, Gas & Consumable Fuels (concluded)
PetroHawk Energy Corp.:
10.50%, 8/01/14 (b)	USD	530	$	567,100
7.88%, 6/01/15		450		436,500
Range Resources Corp., 8.00%, 5/15/19		400		408,000
Sabine Pass LNG LP, 7.50%, 11/30/16		350		283,500
SandRidge Energy, Inc.:
8.63%, 4/01/15 (d)		120		112,800
9.88%, 5/15/16 (b)		500		500,000
8.00%, 6/01/18 (b)		935		846,175
Teekay Shipping Corp., 8.88%, 7/15/11		640		636,800
				18,269,143
Paper & Forest Products — 2.9%
Ainsworth Lumber Co. Ltd., 11.00%, 7/29/15 (b)(d)		320		127,039
Clearwater Paper Corp., 10.63%, 6/15/16 (b)		370		396,362
Georgia-Pacific Corp., 8.13%, 5/15/11		145		148,988
Georgia-Pacific LLC, 8.25%, 5/01/16 (b)		1,525		1,540,250
International Paper Co., 9.38%, 5/15/19		490		550,616
NewPage Corp., 10.00%, 5/01/12		2,440		1,323,700
Norske Skog Canada Ltd. Series D, 8.63%, 6/15/11		825		482,625
Verso Paper Holdings LLC:
11.50%, 7/01/14 (b)		320		313,600
Series B, 4.23%, 8/01/14 (g)		260		145,600
Series B, 9.13%, 8/01/14		1,425		929,813
				5,958,593
Pharmaceuticals — 0.9%
Angiotech Pharmaceuticals, Inc., 4.11%, 12/01/13 (g)		1,440		1,209,600
Elan Finance Plc, 8.88%, 12/01/13		90		86,850
Valeant Pharmaceuticals International, 8.38%, 6/15/16 (b)		515		522,725
				1,819,175
Real Estate Investment Trusts (REITs) — 0.8%
FelCor Lodging LP, 8.50%, 6/01/11		245		229,687
HCP, Inc., 5.65%, 12/15/13		420		404,645
iStar Financial, Inc.:
5.65%, 9/15/11		1,500		855,000
Series B, 5.13%, 4/01/11		220		118,800
				1,608,132
Real Estate Management & Development — 1.3%
Forest City Enterprises, Inc., 7.63%, 6/01/15		2,525		1,584,438
Realogy Corp.:
10.50%, 4/15/14		520		309,400
12.38%, 4/15/15		1,935		783,675
				2,677,513
Semiconductors & Semiconductor Equipment — 0.5%
Spansion, Inc., 3.79%, 6/01/13 (a)(b)(c)		1,135		1,007,313
Software — 0.0%
BMS Holdings, Inc., 8.35%, 2/15/12 (b)(d)(g)		407		6,532
Specialty Retail — 2.9%
Asbury Automotive Group, Inc., 7.63%, 3/15/17		330		270,600
General Nutrition Centers, Inc.:
6.40%, 3/15/14 (g)		1,640		1,443,200
10.75%, 3/15/15		1,200		1,134,000
Group 1 Automotive, Inc., 2.25%, 6/15/36 (h)		985		698,119
Limited Brands, Inc., 8.50%, 6/15/19 (b)		745		754,708
Michaels Stores, Inc., 11.38%, 11/01/16		690		593,400
United Auto Group, Inc., 7.75%, 12/15/16		1,030		906,400
				5,800,427

Corporate Bonds		Par (000)	Value
Textiles, Apparel & Luxury Goods — 1.1%
Levi Strauss & Co., 8.63%, 4/01/13	EUR	850	$	1,163,732
Quiksilver, Inc., 6.88%, 4/15/15	USD	1,600		1,016,000
				2,179,732
Wireless Telecommunication Services — 5.8%
Cricket Communications, Inc.:
9.38%, 11/01/14		2,405		2,266,712
10.00%, 7/15/15		835		807,862
Crown Castle International Corp., 9.00%, 1/15/15		205		213,200
Digicel Group Ltd. (b):
8.88%, 1/15/15		1,285		1,146,862
9.13%, 1/15/15 (d)		1,911		1,683,744
FiberTower Corp., 9.00%, 11/15/12 (e)		633		327,578
iPCS, Inc., 2.61%, 5/01/13 (g)		760		623,200
MetroPCS Wireless, Inc., 9.25%, 11/01/14		2,085		2,045,905
Nextel Communications, Inc.:
Series E, 6.88%, 10/31/13		1,670		1,494,650
Series F, 5.95%, 3/15/14		100		84,000
Orascom Telecom Finance SCA, 7.88%, 2/08/14 (b)		265		238,500
Sprint Capital Corp.:
7.63%, 1/30/11		780		780,975
6.88%, 11/15/28		170		123,675
				11,836,863
Total Corporate Bonds — 94.7%				192,013,714

Floating Rate Loan Interests
Auto Components — 2.2%
Allison Transmission, Inc., Term Loan, 3.03%, 8/07/14		1,376	1,174,545
Dana Holding Corp., Term Advance, 7.25%, 1/31/15		1,872	1,433,085
Delphi Corp. (a)(c):
Initial Tranche Term Loan C, 10.50%, 12/31/09		2,855	1,570,378
Subsequent Tranche Term Loan C, 10.50%, 12/31/09		292	160,747
			4,338,755
Building Products — 1.3%
CPG International I Inc., Term Loan, 5.27%, 2/28/11		2,970	2,672,864
Capital Markets — 0.1%
Marsico Parent Co., LLC, Term Loan, 4.81%, 12/15/14		462	198,749
Chemicals — 1.4%
PQ Corp. (fka Niagara Acquisition, Inc.):
Loan (Second Lien), 6.77%, 7/30/15		3,250	1,787,500
Term Loan (First Lien), 3.52% – 3.75%, 7/31/14		743	611,944
Solutia Inc., Loan, 7.25%, 2/28/14		410	406,227
			2,805,671
Diversified Telecommunication Services — 2.4%
Wind Finance SL S.A., Euro Facility (Second Lien), 7.70%, 12/17/14	EUR	3,350	4,817,000
Food & Staples Retailing — 0.6%
Rite Aid Corp., Tranche 4 Term Loan, 9.50%, 6/04/15	USD	1,200	1,242,000
Health Care Providers & Services — 2.0%
HCA Inc., Tranche A-1 Term Loan, 2.10%, 11/17/12		3,467	3,236,443
Rotech Healthcare Inc., Term Loan B, 6.26%, 9/26/11		1,681	806,730
			4,043,173

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	13

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

Floating Rate Loan Interests		Par (000)	Value
Hotels, Restaurants & Leisure — 0.8%
Travelport LLC (fka Travelport Inc.), Loan, 7.99%, 3/27/12	USD	2,861	$	1,602,147
IT Services — 0.0%
First Data Corp., Initial Tranche B-1 Term Loan, 3.01% – 3.02%, 9/24/14		100		83,101
Independent Power Producers & Energy Traders – 1.8%
Texas Competitive Electric Holdings Co., LLC (TXU):
Initial Tranche B-1 Term Loan, 3.78% – 3.79%, 10/10/14		207		157,595
Initial Tranche B-2 Term Loan, 3.78%, 10/10/14		1,204		915,037
Initial Tranche B-3 Term Loan, 3.78%, 10/10/14		3,439		2,602,398
				3,675,030
Machinery – 1.1%
Navistar Financial Corp., Tranche A Term loan, 2.31%, 3/27/10		500		485,000
Navistar International Corp.:
Revolving Credit-Linked Deposit, 3.36% – 3.51%, 1/19/12		505		469,650
Term Advance, 3.51%, 1/19/12		1,385		1,288,050
				2,242,700
Media — 3.3%
Affinion Group Holdings, Inc., Loan, 8.27%, 3/01/12		419		366,678
Cengage Learning Acquisitions, Inc. (Thomson Learning), Tranche 1 Incremental Term Loan, 7.50%, 7/03/14		1,485		1,425,600
HMH Publishing Co. Ltd. (fka Education Media):
Mezzanine, 17.50%, 11/14/14		6,221		933,183
Tranche A Term Loan, 5.26%, 6/12/14		2,414		1,867,663
NV Broadcasting, LLC, Second Lien, 8.72%, 11/03/14 (a)(c)		1,000		10,000
Newsday, LLC, Fixed Rate Term Loan, 9.75%, 8/01/13		750		763,125
Virgin Media Investment Holdings Ltd. C Facility, 3.62%, 7/17/13	GBP	525		752,112
World Color Press Inc., and World Color (USA) Corp. (fka Quebecor World Inc.), Advance, 9.00%, 6/30/12	USD	500		496,250
				6,614,611
Multiline Retail — 0.1%
The Neiman Marcus Group Inc., Term Loan, 2.28% – 2.63%, 4/06/13		120		98,786
Oil, Gas & Consumable Fuels — 0.7%
Turbo Beta Ltd. Dollar Facility, 2.50% – 12.00%, 3/15/18		2,147		1,503,089
Paper & Forest Products — 0.3%
NewPage Corp., Term Loan, 4.06%, 12/22/14		487		451,459
Verso Paper Finance Holdings LLC, Loan, 6.73% – 7.48%%, 2/01/13		1,159		231,896
				683,355
Real Estate Management & Development — 0.2%
Realogy Corp.:
Initial Term B Loan, 3.28%, 10/10/13		377		287,415
Synthetic LC, 0.11%, 10/10/13		119		90,763
				378,178

Floating Rate Loan Interests		Par (000)	Value
Specialty Retail — 0.1%
Claire’s Stores Term Loan B, 5.27%, 5/29/14	USD	265	$	172,629
Total Floating Rate Loan Interests — 18.4%				37,171,838

Other Interests (i)	Beneficial Interest (000)
Media — 0.1%
Adelphia Escrow		700		70
Adelphia Recovery Trust		878		3,512
Total Other Interests — 0.0%				3,582
Preferred Stocks		Shares
Capital Markets — 0.0%
Marsico Parent Superholdco, LLC, 16.75% (b)		67		17,085
Media — 0.0%
CMP Susquehanna Radio Holdings Corp., 0% (a)(b)(g)		34,982		—
Total Preferred Stocks — 0.0%				17,085
Warrants (j)
Health Care Providers & Services — 0.0%
HealthSouth Corp. (expires 1/16/14)		29,930		—
Media — 0.0%
CMP Susquehanna Radio Holdings Corp. (expires 3/26/19) (b)		39,975		—
Oil, Gas & Consumable Fuels — 0.0%
Turbo Cayman Ltd. (No Expiration)		1		—
Total Warrants — 0.0%				—
Total Long-Term Investments (Cost — $271,263,265) — 115.1%				233,299,691
Short-Term Securities
BlackRock Liquidity Funds, TempCash 0.26% (k)(l)		2,032,607		2,032,607
Total Short-Term Securities (Cost — $2,032,607) — 1.0%				2,032,607
Options Purchased		Contracts
Over-the-Counter Call Options
Marsico Parent Superholdco LLC, expiring December 2009 at USD 942.86, Broker Goldman Sachs & Co.		17		17,000
Total Options Purchased (Cost — $16,622) — 0.0%				17,000
Total Investments (Cost — $273,312,494*) — 116.1%				235,349,298
Liabilities in Excess of Other Assets — (16.1)%				(32,699,558	)
Net Assets — 100.0%			$	202,649,740

See Notes to Financial Statements.
14	SEMI-ANNUAL REPORT	AUGUST 31, 2009

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

* The cost and unrealized appreciation (depreciation) of investments as of August 31, 2009, as computed for federal income tax purposes, were as follows:

Aggregate cost	$	274,419,893
Gross unrealized appreciation	$	8,030,039
Gross unrealized depreciation		(47,100,634	)
Net unrealized depreciation	$	(39,070,595	)

(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)	Represents a payment-in-kind security which may pay interest/dividends in additional par/shares.
(e)	Convertible security.
(f)	Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.
(g)	Variable rate security. Rate shown is as of report date.
(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 is as of report date.
(i)	Other interests represent beneficial interest in liquidation trusts and other reorganization entities and are non-income producing.
(j)	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.
(k)	Investments in companies considered to be an affiliate of the Fund, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as follows:

Affiliate	Net Activity			Income
BlackRock Liquidity Funds, TempCash	$	2,032,607		$	4,915
BlackRock Liquidity Series, LLC Cash Sweep Series	$	(7,111,263	)	$	461

(l)	Represents the current yield as of report date.
•	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 ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report which may combine industry sub-classifications for reporting ease.
•	Foreign currency exchange contracts as of August 31, 2009 were as follows:

Currency Purchased		Currency Sold		Counterparty	Settlement Date	Unrealized Appreciation (Depreciation)
USD	11,026,273	EUR	7,899,500	Citibank NA	9/16/09	$	(298,752	)
USD	423,465	EUR	300,000	UBS AG	9/16/09		(6,627	)
USD	174,975	CAD	190,000	Barclays Bank Plc	10/28/09		1,404
USD	1,739,108	GBP	1,064,000	Citibank NA	10/28/09		7,110
Total						$	(296,865	)

• Credit default swaps on single-name issues – buy protection outstanding as of August 31, 2009 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	USD	1,500	$	273,762
Black & Decker Corp.	2.93	%	Goldman Sachs Bank USA	March 2014	USD	600		(35,219	)
Louisiana Pacific Corp.	5.00	%	JPMorgan Chase Bank NA	March 2014	USD	500		(95,335	)
Macy’s Retail Holdings Corp.	8.05	%	Goldman Sachs Bank USA	March 2014	USD	600		(112,690	)
Masco Corp.	5.85	%	Goldman Sachs Bank USA	March 2014	USD	750		(99,209	)
Mohawk Industries Inc.	4.70	%	Goldman Sachs Bank USA	March 2014	USD	750		(82,112	)
Tyson Foods Inc.	4.25	%	Goldman Sachs Bank USA	March 2014	USD	400		(37,313	)
Centex Corp.	1.00	%	Deutsche Bank AG	June 2014	USD	250		(8,534	)
First Data Corp.	5.00	%	Credit Suisse International	June 2014	USD	250		(21,929	)
Lennar Corp.	5.75	%	JPMorgan Chase Bank NA	June 2014	USD	250		(30,077	)
Standard Pacific Corp.	5.00	%	JPMorgan Chase Bank NA	June 2014	USD	475		(1,740	)
Brunswick Corp.	5.00	%	Morgan Stanley Capital Services, Inc.	September 2014	USD	2,750		19,040
Centex Corp.	1.00	%	Deutsche Bank AG	September 2014	USD	175		(1,401	)
Limited Brands Inc.	1.00	%	Goldman Sachs Bank USA	September 2014	USD	50		571
Limited Brands Inc.	1.00	%	JPMorgan Chase Bank NA	September 2014	USD	1,000		10,644
Pulte Homes Inc.	1.00	%	JPMorgan Chase Bank NA	September 2014	USD	350		5,558
Standard Pacific Corp.	5.00	%	Credit Suisse International	September 2014	USD	530		21,112
Meritage Homes, Inc.	5.00	%	Credit Suisse International	June 2015	USD	530		(10,201	)
K. Hovnanian Enterprise Inc.	5.00	%	JPMorgan Chase Bank NA	June 2016	USD	620		87,927
Total							$	(117,146	)

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	15

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

• Credit default swaps on single-name issues — sold protection outstanding as of August 31, 2009 were as follows:

Issuer	Receive Fixed Rate		Counterparty	Expiration	Rating1	Notional Amount (000)2		Unrealized Appreciation (Depreciation)
Ford Motor Co.	3.80	%	UBS AG	March 2010	CCC–	USD	930	$	(29,878	)
Ford Motor Co.	5.00	%	Goldman Sachs Bank USA	June 2010	CCC–	USD	3,750		(136,990	)
Beazer Homes USA Inc.	5.00	%	Credit Suisse International	June 2011	D	USD	150		2,415
Beazer Homes USA Inc.	5.00	%	Credit Suisse International	September 2011	D	USD	250		3,168
Beazer Homes USA Inc.	5.00	%	Goldman Sachs Bank USA	September 2011	D	USD	200		(651	)
Beazer Homes USA Inc.	5.00	%	JPMorgan Chase Bank NA	September 2011	D	USD	100		650
D.R. Horton Inc.	1.00	%	JPMorgan Chase Bank NA	September 2014	BB–	USD	175		(12	)
Total								$	(161,298	)

1	Using Standard & Poor’s rating of the issuer.
2	The maximum potential amount the Fund may pay should a negative credit event take place as defined under the terms of the agreement.

•	Currency Abbreviations:
	CAD	Canadian Dollar
	EUR	Euro
	GBP	British Pound
	USD	US Dollar

•	Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of fair value measurements. Various inputs are used in determining the fair value of investments, which are as follows:
	•	Level 1 — price quotations in active markets/exchanges for identical securities
	•	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)
	The inputs or methodology 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 table summarizes the inputs used as of August 31, 2009 in determining the fair valuation of the Fund’s investments:

Valuation Inputs	Investments in Securities
	Assets
Level 1
Long-Term Investments:
Common Stocks	$	4,004,507
Short-Term Securities		2,032,607
Total Level 1		6,037,114
Level 2
Long-Term Investments:
Common Stocks		88,609
Corporate Bonds		190,772,757
Floating Rate Loan Interests		17,431,025
Preferred Stocks		17,085
Total Level 2		208,309,476
Level 3
Long-Term Investments:
Common Stocks		356
Corporate Bonds		1,240,957
Floating Rate Loan Interests		19,740,813
Other Interests		3,582
Total Level 3		20,985,708
Total	$	235,332,298

Valuation Inputs	Other Financial Instruments1
	Assets		Liabilities
Level 1		—		—
Level 2	$	450,361	$	(1,008,670	)
Level 3		—		—
Total	$	450,361	$	(1,008,670	)

¹ Other financial instruments are swaps, foreign currency exchange contracts and options purchased. Swaps and foreign currency exchange contracts are shown at the unrealized appreciation/depreciation on the instrument and options purchased are shown at market value.

The following is a reconciliation of investments for unobservable inputs (Level 3) used in determining fair value:

	Investment in Securities
	Common Stocks		Corporate Bonds			Floating Rate Loan Interests			Other Interests		Total
Balance as of February 28, 2009	$	356	$	1,404,473		$	14,962,760		$	3,582	$	16,371,171
Accrued discounts/premiums		—		—			—			—		—
Realized gain (loss)		—		—			(1,216,555	)		—		(1,216,555	)
Change in unrealized appreciation (depreciation)2		—		(169,765	)		4,806,263			—		4,636,498
Net purchases (sales)		—		3,249			(3,596,611	)		—		(3,593,362	)
Net transfer in/out of Level 3		—		3,000			4,784,956			—		4,787,956
Balance as of August 31, 2009	$	356	$	1,240,957		$	19,740,813		$	3,582	$	20,985,708

² Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations.

See Notes to Financial Statements.
16	SEMI-ANNUAL REPORT	AUGUST 31, 2009

Schedule of Investments August 31, 2009 (Unaudited)	BlackRock Corporate High Yield Fund III, Inc. (CYE)
	(Percentages shown are based on Net Assets)

Common Stocks	Shares		Value
Auto Components — 0.5%
Federal-Mogul Corp. Class A (a)		76,700	$	964,886
Building Products — 0.6%
Masonite Worldwide Holdings (a)		34,575		1,398,559
Capital Markets — 0.4%
E*Trade Financial Corp. (a)		506,000		890,560
Chemicals — 0.0%
Wellman Holdings, Inc. (a)		1,522		381
Communications Equipment — 0.8%
Loral Space & Communications Ltd. (a)		82,907		1,711,200
Diversified Financial Services — 0.6%
Bank of America Corp. (a)		70,000		1,231,305
Electrical Equipment — 0.0%
Medis Technologies Ltd. (a)		70,784		20,173
SunPower Corp. Class B (a)		778		16,641
				36,814
Hotels, Restaurants & Leisure — 0.0%
Buffets Restaurants Holdings, Inc. (a)		1,099		11
Household Durables — 0.2%
Beazer Homes USA, Inc. (a)		100,000		431,000
Media — 0.3%
Sirius XM Radio, Inc. (a)		865,000		582,578
Paper & Forest Products — 0.2%
Ainsworth Lumber Co. Ltd.		125,117		180,575
Ainsworth Lumber Co. Ltd. (a)(b)		140,415		202,008
Western Forest Products, Inc. (a)(b)		45,762		10,868
Western Forest Products, Inc. (a)		158,023		37,530
				430,981
Software — 0.1%
TiVo, Inc. (a)		31,000		304,110
Wireless Telecommunication Services — 0.0%
iPCS, Inc. (a)		4,621		72,966
Total Common Stocks — 3.7%				8,055,351

Corporate Bonds		Par (000)
Airlines — 1.6%
American Airlines Pass Through Trust Series 2001-02, 7.86%, 4/01/13	USD	400	382,000
Continental Airlines, Inc.:
Series 1997-4-B, 6.90%, 7/02/18 (c)		698	544,847
Series 2001-1-C, 7.03%, 12/15/12		314	248,469
Series 2003-RJ, 7.88%, 1/02/20		663	434,178
United Air Lines, Inc., 12.75%, 7/15/12		1,850	1,776,000
			3,385,494
Auto Components — 1.5%
Allison Transmission, Inc., 11.00%, 11/01/15 (b)		736	662,400
The Goodyear Tire & Rubber Co.:
7.86%, 8/15/11		1,450	1,442,750
8.63%, 12/01/11		652	658,520
Lear Corp. (a)(d):
8.50%, 12/01/13		380	205,200
8.75%, 12/01/16		585	315,900
			3,284,770

Corporate Bonds		Par (000)	Value
Automobiles — 0.4%
Ford Capital BV, 9.50%, 6/01/10	USD	785	$	777,150
Building Products — 0.2%
Ply Gem Industries, Inc., 11.75%, 6/15/13		610		509,350
Capital Markets — 0.5%
E*Trade Financial Corp.:
12.50%, 11/30/17 (e)		76		76,820
12.50%, 11/30/17 (b)(e)		2		2,155
3.38%, 8/31/19 (b)(f)(g)		244		416,935
Series A, 3.64%, 8/31/19 (b)(f)(g)		7		11,961
Marsico Parent Co., LLC, 10.63%, 1/15/16 (a)(b)		1,073		450,660
Marsico Parent Holdco, LLC, 12.50%, 7/15/16 (b)(e)		447		107,337
Marsico Parent Superholdco, LLC, 14.50%, 1/15/18 (b)(e)		307		79,822
				1,145,690
Chemicals — 1.9%
American Pacific Corp., 9.00%, 2/01/15		880		794,200
Innophos, Inc., 8.89%, 8/15/14		825		800,250
MacDermid, Inc., 9.50%, 4/15/17 (b)		1,260		1,058,400
Olin Corp., 8.88%, 8/15/19		295		297,950
Terra Capital, Inc., Series B, 7.00%, 2/01/17		215		202,637
Wellman Holdings, Inc. (f):
Second Lien Subordinate Note, 10.00%, 1/29/19 (b)		844		844,000
Third Lien Subordinate Note, 5.00%, 1/29/19		263		131,467
				4,128,904
Commercial Banks — 0.1%
Glitnir Banki HF (a)(d):
4.15%, 4/20/10 (b)		211		41,673
4.97%, 1/18/12 (b)		100		19,750
6.38%, 9/25/12 (b)		500		98,750
Series EMTN, 5.07%, 1/27/10	EUR	50		14,694
Series EMTN, 3.00%, 6/30/10		45		13,225
Series GMTN, 4.38%, 2/05/10		50		14,694
				202,786
Commercial Services & Supplies — 4.0%
Altegrity, Inc., 10.50%, 11/01/15 (b)	USD	700		579,250
ISS Financing, 11.00%, 6/15/14	EUR	277		408,030
RSC Equipment Rental, Inc., 10.00%, 7/15/17 (b)	USD	585		611,325
Scientific Games International, Inc., 9.25%, 6/15/19 (b)		855		876,375
Waste Services, Inc., 9.50%, 4/15/14		3,000		2,970,000
West Corp.:
9.50%, 10/15/14		750		691,875
11.00%, 10/15/16		2,650		2,444,625
				8,581,480
Construction & Engineering — 0.7%
Dycom Industries, Inc., 8.13%, 10/15/15		1,750		1,522,500
Construction Materials — 1.3%
Nortek, Inc., 10.00%, 12/01/13		2,145		1,994,850
Texas Industries, Inc., 7.25%, 7/15/13		785		733,975
				2,728,825
Consumer Finance — 0.2%
Ford Motor Credit Co. LLC:
3.26%, 1/13/12 (h)		215		178,987
7.80%, 6/01/12		200		185,009
8.00%, 12/15/16		180		157,706
				521,702

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	17

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

Corporate Bonds		Par (000)	Value
Containers & Packaging — 4.1%
Berry Plastics Holding Corp., 4.50%, 9/15/14 (h)	USD	1,765	$	1,270,800
Crown European Holdings SA, 6.25%, 9/01/11	EUR	75		107,521
Graphic Packaging International, Inc.:
8.50%, 8/15/11	USD	540		538,650
9.50%, 8/15/13		65		65,163
9.50%, 6/15/17 (b)		1,120		1,148,000
Impress Holdings BV, 3.63%, 9/15/13 (b)(h)		420		383,775
Owens-Brockway Glass Container, Inc.:
8.25%, 5/15/13		1,000		1,010,000
6.75%, 12/01/14	EUR	155		215,543
Packaging Dynamics Finance Corp., 10.00%, 5/01/16 (b)	USD	1,355		433,600
Pregis Corp., 12.38%, 10/15/13		1,200		1,080,000
Rock-Tenn Co., 8.20%, 8/15/11		2,000		2,060,000
Solo Cup Co., 10.50%, 11/01/13 (b)		475		498,750
				8,811,802
Diversified Consumer Services — 1.3%
Service Corp. International, 7.00%, 6/15/17		3,000		2,805,000
Diversified Financial Services — 7.6%
Axcan Intermediate Holdings, Inc., 12.75%, 3/01/16		520		543,400
Bank of America Corp., 5.65%, 5/01/18		800		773,554
CIT Group, Inc.
0.76%, 3/12/10		135		84,375
5.20%, 11/03/10		200		120,290
4.75%, 12/15/10		185		112,032
5.00%, 2/01/15		1,065		599,335
FCE Bank Plc:
7.88%, 2/15/11	GBP	700		1,065,492
7.13%, 1/16/12	EUR	2,850		3,697,637
7.13%, 1/15/13		1,050		1,317,129
Series JD, 2.12%, 9/30/09 (h)		270		383,688
GMAC LLC (b):
7.25%, 3/02/11	USD	1,279		1,200,661
6.88%, 9/15/11		500		461,250
6.88%, 8/28/12		750		652,500
2.56%, 12/01/14 (h)		884		680,680
6.75%, 12/01/14		1,810		1,484,200
8.00%, 11/01/31		2,020		1,560,450
General Motors Acceptance Corp. of Canada Ltd., 6.00%, 5/25/10	CAD	300		266,094
Leucadia National Corp., 8.13%, 9/15/15	USD	1,325		1,298,500
				16,301,267
Diversified Telecommunication Services — 5.3%
Broadview Networks Holdings, Inc., 11.38%, 9/01/12		1,035		890,100
Cincinnati Bell, Inc., 7.25%, 7/15/13		470		455,900
Nordic Telephone Co. Holdings ApS, 8.88%, 5/01/16 (b)		1,445		1,466,675
Qwest Communications International, Inc.:
7.50%, 2/15/14 (c)		2,020		1,949,300
3.50%, 11/15/25 (f)		640		633,600
Series B, 7.50%, 2/15/14		1,730		1,669,450
Qwest Corp.:
3.88%, 6/15/13 (h)		1,550		1,433,750
7.63%, 6/15/15		525		521,063
8.38%, 5/01/16 (b)		400		404,000
Windstream Corp., 8.13%, 8/01/13		1,900		1,900,000
				11,323,838

Corporate Bonds		Par (000)	Value
Electric Utilities — 1.1%
NSG Holdings LLC, 7.75%, 12/15/25 (b)	USD	1,030	$	860,050
Tenaska Alabama Partners LP, 7.00%, 6/30/21 (b)		1,859		1,615,275
				2,475,325
Electrical Equipment — 0.0%
UCAR Finance, Inc., 10.25%, 2/15/12		55		53,419
Electronic Equipment, Instruments & Components — 0.3%
Jabil Circuit, Inc., 7.75%, 7/15/16		295		290,206
Sanmina-SCI Corp., 8.13%, 3/01/16		300		258,750
				548,956
Energy Equipment & Services — 0.7%
Compagnie Générale de Géophysique-Veritas:
7.50%, 5/15/15		215		204,250
7.75%, 5/15/17		320		302,400
North American Energy Partners, Inc., 8.75%, 12/01/11		375		345,000
Transocean, Inc., Series A, 1.63%, 12/15/37 (f)		765		743,963
				1,595,613
Food & Staples Retailing — 0.5%
AmeriQual Group LLC, 9.50%, 4/01/12 (b)		800		520,000
Duane Reade, Inc., 11.75%, 8/01/15 (b)		165		166,650
Rite Aid Corp., 9.75%, 6/12/16		410		433,575
				1,120,225
Food Products — 0.5%
Smithfield Foods, Inc., 10.00%, 7/15/14 (b)		780		795,600
Tyson Foods, Inc., 10.50%, 3/01/14		265		295,475
				1,091,075
Health Care Equipment & Supplies — 2.3%
Catalent Pharma Solutions, Inc., 9.50%, 4/15/15 (e)		930		767,250
DJO Finance LLC, 10.88%, 11/15/14		2,820		2,707,200
Hologic, Inc., 2.00%, 12/15/37 (f)(i)		1,960		1,582,700
				5,057,150
Health Care Providers & Services — 1.2%
Community Health Systems, Inc., Series WI, 8.88%, 7/15/15		210		210,787
Tenet Healthcare Corp. (b):
9.00%, 5/01/15		1,564		1,603,100
10.00%, 5/01/18		644		693,910
				2,507,797
Hotels, Restaurants & Leisure — 4.7%
American Real Estate Partners LP, 7.13%, 2/15/13		3,045		2,892,750
Gaylord Entertainment Co., 8.00%, 11/15/13		635		579,438
Greektown Holdings, LLC, 10.75%, 12/01/13 (a)(b)(d)		559		120,185
Harrah’s Operating Co., Inc., 10.00%, 12/15/18 (b)		945		661,500
Inn of the Mountain Gods Resort & Casino, 12.00%, 11/15/10 (a)(d)		1,550		682,000
Little Traverse Bay Bands of Odawa Indians, 10.25%, 2/15/14 (a)(b)(d)		1,290		567,600
MGM Mirage, 11.13%, 11/15/17 (b)		820		887,650
Penn National Gaming, Inc., 6.88%, 12/01/11		2,025		2,025,000
San Pasqual Casino, 8.00%, 9/15/13 (b)		975		921,375
Scientific Games Corp., 0.75%, 12/01/24 (f)(i)		280		274,050
Shingle Springs Tribal Gaming Authority, 9.38%, 6/15/15 (b)		60		42,600

See Notes to Financial Statements.
18	SEMI-ANNUAL REPORT	AUGUST 31, 2009

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

Corporate Bonds		Par (000)	Value
Hotels, Restaurants & Leisure (concluded)
Travelport LLC:
4.99%, 9/01/14 (h)	USD	160	$	116,000
9.88%, 9/01/14		210		177,975
Tropicana Entertainment LLC Series WI, 9.63%, 12/15/14 (a)(d)		305		191
Virgin River Casino Corp., 9.00%, 1/15/12 (a)(d)		940		96,350
				10,044,664
Household Durables — 1.9%
American Greetings Corp., 7.38%, 6/01/16		1,020		872,100
Beazer Homes USA, Inc.:
8.38%, 4/15/12		905		683,275
8.13%, 6/15/16		130		80,600
4.63%, 6/15/24 (f)		130		107,250
Jarden Corp., 8.00%, 5/01/16		275		281,875
KB Home:
6.38%, 8/15/11		29		28,710
9.10%, 9/15/17		335		341,700
Meritage Homes Corp., 6.25%, 3/15/15		250		215,000
Standard Pacific Corp.:
6.25%, 4/01/14		525		412,125
7.00%, 8/15/15		935		733,975
Toll Brothers Finance Corp., 8.91%, 10/15/17		231		257,185
				4,013,795
IT Services — 1.8%
Alliance Data Systems Corp., 1.75%, 8/01/13 (f)		1,380		1,228,200
First Data Corp.:
9.88%, 9/24/15		170		145,350
11.25%, 3/31/16 (b)		2,435		1,862,775
SunGard Data Systems Inc., 10.63%, 5/15/15 (b)		580		598,850
				3,835,175
Independent Power Producers & Energy Traders — 3.6%
The AES Corp., 8.75%, 5/15/13 (b)		1,070		1,086,050
AES Eastern Energy LP, Series 99-B, 9.67%, 1/02/29		610		524,600
Calpine Construction Finance Co. LP, 8.00%, 6/01/16 (b)		965		960,175
Energy Future Holdings Corp., 11.25%, 11/01/17 (e)		3,763		2,153,934
NRG Energy, Inc.:
7.25%, 2/01/14		1,625		1,580,313
7.38%, 2/01/16		1,000		956,250
Texas Competitive Electric Holdings Co. LLC, 10.50%, 11/01/16 (e)		1,014		562,674
				7,823,996
Industrial Conglomerates — 1.8%
Icahn Enterprises LP, 4.00%, 8/15/13 (f)(h)		255		196,350
Sequa Corp. (b):
11.75%, 12/01/15		2,540		1,600,200
13.50%, 12/01/15 (e)		3,825		1,998,521
				3,795,071
Insurance — 1.0%
Alliant Holdings I, Inc., 11.00%, 5/01/15 (b)		1,700		1,551,250
USI Holdings Corp., 4.32%, 11/15/14 (b)(h)		680		525,300
				2,076,550
Leisure Equipment & Products — 0.6%
Brunswick Corp., 11.25%, 11/01/16 (b)		1,140		1,194,150
Life Sciences Tools & Services — 0.1%
Bio-Rad Laboratories, Inc., 8.00%, 9/15/16 (b)		175		178,500

Corporate Bonds		Par (000)	Value
Machinery — 0.8%
AGY Holding Corp., 11.00%, 11/15/14	USD	1,280	$	1,011,200
Accuride Corp., 8.50%, 2/01/15 (a)(c)		555		111,000
CPM Holdings, Inc., 10.63%, 9/01/14 (b)		100		101,000
RBS Global, Inc.:
9.50%, 8/01/14 (b)		218		200,560
8.88%, 9/01/16		450		361,125
				1,784,885
Marine — 0.6%
Horizon Lines, Inc., 4.25%, 8/15/12 (f)		1,155		840,263
Navios Maritime Holdings, Inc., 9.50%, 12/15/14		477		417,375
				1,257,638
Media — 10.4%
Affinion Group, Inc.:
10.13%, 10/15/13		1,340		1,331,625
10.13%, 10/15/13 (b)		375		372,656
CCO Holdings LLC, 8.75%, 11/15/13		555		560,550
CMP Susquehanna Corp., 4.75%, 5/15/14 (b)		160		3,200
CSC Holdings, Inc.:
8.50%, 4/15/14 (b)		390		395,850
Series B, 7.63%, 4/01/11		225		227,812
Cablevision Systems Corp., Series B, 8.00%, 4/15/12		1,015		1,037,837
Catalina Marketing Corp., 10.50%, 10/01/15 (b)(e)		2,130		2,071,425
Charter Communications Holdings II, LLC, 10.25%, 9/15/10 (a)(d)		740		822,325
Charter Communications, Inc., 6.50%, 10/01/27 (a)(d)(f)		480		206,400
Charter Communications Operating, LLC (b):
11.25%, 4/30/12 (g)		500		503,750
8.38%, 4/30/14 (a)(d)		670		678,375
Clear Channel Communications, Inc.:
5.75%, 1/15/13		75		29,250
11.00%, 8/01/16 (e)		1,300		325,000
EchoStar DBS Corp., 7.00%, 10/01/13		90		88,200
Harland Clarke Holdings Corp.:
6.00%, 5/15/15 (h)		350		250,250
9.50%, 5/15/15 (b)		420		357,000
Intelsat Corp., 9.25%, 6/15/16		2,090		2,116,125
Intelsat Subsidiary Holding Co. Ltd., 8.88%, 1/15/15 (b)		260		260,650
Liberty Media Corp., 3.13%, 3/30/23 (f)		1,113		1,068,480
Local Insight Regatta Holdings, Inc., 11.00%, 12/01/17		748		284,240
Network Communications, Inc., 10.75%, 12/01/13		30		6,075
Nielsen Finance LLC:
11.63%, 2/01/14		180		178,650
10.00%, 8/01/14		1,890		1,786,050
ProtoStar I Ltd., 18.00%, 10/15/12 (a)(b)(d)(f)		850		339,962
Rainbow National Services LLC, 10.38%, 9/01/14 (b)		1,582		1,653,190
TL Acquisitions, Inc., 10.50%, 1/15/15 (b)		4,130		3,758,300
UPC Holdings BV, 9.88%, 4/15/18 (b)		500		505,625
Virgin Media, Inc., 6.50%, 11/15/16 (b)(f)		1,210		1,096,563
				22,315,415

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	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
Metals & Mining — 5.0%
Aleris International, Inc. (a)(d):
9.00%, 12/15/14	USD	1,035	$	2,588
10.00%, 12/15/16		800		2,000
Anglo American Capital Plc, 9.38%, 4/08/19 (b)		360		421,200
Drummond Co., Inc., 7.38%, 2/15/16 (b)		225		198,000
FMG Finance Property Ltd. (b):
10.00%, 9/01/13		535		564,425
10.63%, 9/01/16		1,295		1,392,125
Foundation PA Coal Co., 7.25%, 8/01/14		1,975		1,925,625
Freeport-McMoRan Copper & Gold, Inc., 8.38%, 4/01/17		990		1,032,075
Novelis, Inc.:
7.25%, 2/15/15		1,975		1,599,750
11.50%, 2/15/15 (b)		430		416,025
Ryerson, Inc.:
7.86%, 11/01/14 (h)		400		340,000
12.00%, 11/01/15		265		243,800
Steel Dynamics, Inc., 7.38%, 11/01/12		460		451,950
Teck Resources Ltd.:
10.25%, 5/15/16		300		331,500
10.75%, 5/15/19		1,150		1,309,563
Vedanta Resources Plc, 9.50%, 7/18/18 (b)		640		601,600
				10,832,226
Multiline Retail — 0.5%
Dollar General Corp.:
10.63%, 7/15/15		280		310,800
11.88%, 7/15/17 (e)		190		213,275
Macy’s Retail Holdings, Inc., 5.88%, 1/15/13		475		447,885
				971,960
Oil, Gas & Consumable Fuels — 8.9%
Arch Coal, Inc., 8.75%, 8/01/16 (b)		310		310,000
Atlas Energy Operating Co. LLC, 12.13%, 8/01/17		500		527,500
Atlas Energy Resources LLC, 10.75%, 2/01/18 (b)		1,075		1,085,750
Berry Petroleum Co., 8.25%, 11/01/16		510		453,900
Bill Barrett Corp., 9.88%, 7/15/16		240		249,600
Chesapeake Energy Corp.:
9.50%, 2/15/15		520		530,400
7.25%, 12/15/18		1,030		942,450
2.25%, 12/15/38 (f)		800		537,000
Connacher Oil and Gas Ltd. (b):
11.75%, 7/15/14		175		177,625
10.25%, 12/15/15		1,145		807,225
Corral Finans AB, 2.01%, 4/15/10 (b)(e)		1,693		1,231,636
EXCO Resources, Inc., 7.25%, 1/15/11		2,625		2,572,500
Encore Acquisition Co., 6.25%, 4/15/14		2,000		1,780,000
Forest Oil Corp., 7.25%, 6/15/19		2,405		2,260,700
Massey Energy Co., 3.25%, 8/01/15 (f)		1,250		934,375
OPTI Canada, Inc., 8.25%, 12/15/14		1,565		1,017,250
PetroHawk Energy Corp.:
10.50%, 8/01/14 (b)		555		593,850
7.88%, 6/01/15		460		446,200
Range Resources Corp., 8.00%, 5/15/19		400		408,000
Sabine Pass LNG LP, 7.50%, 11/30/16		390		315,900
SandRidge Energy, Inc.:
8.63%, 4/01/15 (e)		120		112,800
9.88%, 5/15/16 (b)		500		500,000
8.00%, 6/01/18 (b)		990		895,950
Teekay Shipping Corp., 8.88%, 7/15/11		575		572,125
				19,262,736

Corporate Bonds	Par (000)		Value
Paper & Forest Products — 3.1%
Ainsworth Lumber Co. Ltd., 11.00%, 7/29/15 (b)(e)	USD	1,079	$	427,925
Clearwater Paper Corp., 10.63%, 6/15/16 (b)		390		417,787
Georgia-Pacific Corp., 8.13%, 5/15/11		150		154,125
Georgia-Pacific LLC, 8.25%, 5/01/16 (b)		1,600		1,616,000
International Paper Co., 9.38%, 5/15/19		520		584,327
NewPage Corp., 10.00%, 5/01/12		2,590		1,405,075
Norske Skog Canada Ltd. Series D, 8.63%, 6/15/11		885		517,725
Verso Paper Holdings LLC:
11.50%, 7/01/14 (b)		335		328,300
Series B, 4.23%, 8/01/14 (h)		280		156,800
Series B, 9.13%, 8/01/14		1,525		995,063
				6,603,127
Pharmaceuticals — 0.9%
Angiotech Pharmaceuticals, Inc., 4.11%, 12/01/13 (h)		1,530		1,285,200
Elan Finance Plc, 8.88%, 12/01/13		105		101,325
Valeant Pharmaceuticals International, 8.38%, 6/15/16 (b)		545		553,175
				1,939,700
Real Estate Investment Trusts (REITs) — 0.5%
FelCor Lodging LP, 8.50%, 6/01/11		295		276,562
HCP, Inc., 5.65%, 12/15/13		440		423,914
iStar Financial, Inc., Series B, 5.13%, 4/01/11		230		124,200
Rouse Co. LP, 5.38%, 11/26/13 (a)(d)		395		298,225
				1,122,901
Real Estate Management & Development — 1.3%
Forest City Enterprises, Inc., 7.63%, 6/01/15		2,625		1,647,187
Realogy Corp.:
10.50%, 4/15/14		540		321,300
12.38%, 4/15/15		2,078		841,590
				2,810,077
Semiconductors & Semiconductor Equipment — 0.6%
Spansion, Inc. (a)(b)(d):
3.79%, 6/01/13		1,215		1,078,313
2.25%, 6/15/16 (f)		630		113,400
				1,191,713
Software — 0.0%
BMS Holdings, Inc., 8.35%, 2/15/12 (b)(e)(h)		436		6,998
Specialty Retail — 2.9%
Asbury Automotive Group, Inc., 7.63%, 3/15/17		350		287,000
General Nutrition Centers, Inc.:
6.40%, 3/15/14 (h)		1,760		1,548,800
10.75%, 3/15/15		1,285		1,214,325
Group 1 Automotive, Inc., 2.25%, 6/15/36 (i)		1,055		747,731
Limited Brands, Inc., 8.50%, 6/15/19 (b)		785		795,229
Michaels Stores, Inc., 11.38%, 11/01/16		750		645,000
United Auto Group, Inc., 7.75%, 12/15/16		1,110		976,800
				6,214,885
Textiles, Apparel & Luxury Goods — 1.1%
Levi Strauss & Co., 8.63%, 4/01/13	EUR	900		1,232,187
Quiksilver, Inc., 6.88%, 4/15/15	USD	1,750		1,111,250
				2,343,437
Thrifts & Mortgage Finance — 0.9%
Residential Capital Corp., 8.38%, 6/30/10		3,025		1,951,125

See Notes to Financial Statements.
20	SEMI-ANNUAL REPORT	AUGUST 31, 2009

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

Corporate Bonds	Par (000)		Value
Wireless Telecommunication Services — 6.2%
Cricket Communications, Inc.:
9.38%, 11/01/14	USD	2,535	$	2,389,238
10.00%, 7/15/15		890		861,075
Crown Castle International Corp., 9.00%, 1/15/15		215		223,600
Digicel Group Ltd. (b):
8.88%, 1/15/15		1,370		1,222,725
9.13%, 1/15/15 (e)		1,983		1,747,519
FiberTower Corp., 9.00%, 11/15/12 (f)		633		327,578
iPCS, Inc., 2.61%, 5/01/13 (h)		815		668,300
MetroPCS Wireless, Inc., 9.25%, 11/01/14		2,115		2,075,344
NII Holdings, Inc., 2.75%, 8/15/25 (f)		930		905,588
Nextel Communications, Inc.:
Series E, 6.88%, 10/31/13		1,730		1,548,350
Series F, 5.95%, 3/15/14		110		92,400
Orascom Telecom Finance SCA, 7.88%, 2/08/14 (b)		275		247,500
Sprint Capital Corp.:
7.63%, 1/30/11		840		841,050
6.88%, 11/15/28		180		130,950
				13,281,217
Total Corporate Bonds — 96.5%				207,332,059
Floating Rate Loan Interests
Auto Components — 3.0%
Allison Transmission, Inc., Term Loan, 3.03%, 8/07/14		1,376		1,174,545
Dana Holding Corp., Term Advance, 7.25%, 1/31/15		1,946		1,489,854
Delphi Corp. (a)(d):
Initial Tranche Term Loan C, 10.50%, 12/31/09		6,392		3,515,359
Subsequent Tranche Term Loan C, 10.50%, 12/31/09		658		362,141
				6,541,899
Building Products — 1.4%
CPG International I Inc., Term Loan, 5.27%, 2/28/11		3,267		2,940,151
Capital Markets — 0.1%
Marsico Parent Com., LLC, Term Loan, 4.81%, 12/15/14		462		198,749
Chemicals — 1.4%
PQ Corp. (fka Niagara Acquisition, Inc.):
Loan (Second Lien), 6.77%, 7/30/15		3,500		1,925,000
Original Term Loan (First Lien), 3.52% – 3.75%, 7/31/14		743		611,944
Solutia Inc., Loan, 7.25%, 2/28/14		485		480,087
				3,017,031
Diversified Financial Services — 0.0%
Protostar Ltd, Revolver, 18.00%, 10/15/12		100		98,000
Diversified Telecommunication Services — 2.3%
Wind Finance SL S.A. Euro Facility (Second Lien), 7.70%, 12/17/14	EUR	3,460		4,975,170
Food & Staples Retailing — 0.6%
Rite Aid Corp., Tranche 4 Term Loan, 9.50%, 6/04/15	USD	1,250		1,293,750
Health Care Providers & Services — 2.0%
HCA Inc., Tranche A-1 Term Loan, 2.10%, 11/17/12		3,620		3,379,620
Rotech Healthcare, Inc., Term Loan B, 6.26%, 9/26/11		1,806		866,938
				4,246,558

Floating Rate Loan Interests	Par (000)		Value
Hotels, Restaurants & Leisure — 0.8%
Travelport LLC (fka Travelport Inc.), Loan, 7.99%, 3/27/12 (e)	USD	3,056	$	1,711,338
IT Services — 0.1%
First Data Corp., Initial Tranche B-1 Term Loan, 3.01% – 3.02%, 9/24/14		349		290,854
Independent Power Producers & Energy Traders — 1.7%
Texas Competitive Electric Holdings Co., LLC (TXU):
Initial Tranche B-1 Term Loan, 3.78% – 3.79%, 10/10/14		217		165,100
Initial Tranche B-2 Term Loan, 3.78%, 10/10/14		1,313		997,794
Initial Tranche B-3 Term Loan, 3.78%, 10/10/14		3,439		2,602,398
				3,765,292
Machinery — 1.1%
Navistar Financial Corp., Tranche A Term Loan, 2.31%, 3/27/10		500		485,000
Navistar International Corp.:
Revolving Credit-Linked Deposit, 3.36% – 3.51%, 1/19/12		535		497,550
Term Advance, 3.51%, 1/19/12		1,470		1,367,100
				2,349,650
Media — 3.2%
Affinion Group Holdings, Inc., Loan, 8.27%, 3/01/12		419		366,678
Cengage Learning Acquisitions, Inc., (Thomson Learning), Tranche 1 Incremental Term Loan, 7.50%, 7/03/14		1,732		1,663,200
HMH Publishing Co. Ltd. (fka Education Media):
Mezzanine, 17.50%, 11/14/14 (e)		6,787		1,018,018
Tranche A Term Loan, 5.26%, 6/12/14		2,651		2,051,497
NV Broadcasting, LLC:
Second Lien, 8.72%, 11/03/14 (a)(d)		1,500		15,000
Term Loan Debtor in Possession, 13.00%, 7/14/12		80		79,200
Newsday LLC, Fixed Rate Term Loan, 9.75%, 8/01/13		700		712,250
ProtoStar Ltd., Debtor in Possession Term Loan, 18.00%, 10/15/09		21		20,600
Virgin Media Investment Holdings Ltd., C Facility, 3.62%, 7/17/13		305		436,941
World Color Press Inc. and World Color (USA) Corp. (fka Quebecor World Inc.), Advance, 9.00%, 6/30/12		500		496,250
				6,859,634
Multiline Retail — 0.1%
The Neiman Marcus Group Inc., Term Loan, 2.28% – 2.63%, 4/06/13		130		107,018
Oil, Gas & Consumable Fuels — 0.7%
Turbo Beta Ltd., Dollar Facility, 14.50%, 3/15/18		2,250		1,574,664
Paper & Forest Products — 0.3%
NewPage Corp., Term Loan, 4.06%, 12/22/14		487		451,459
Verso Paper Finance Holdings LLC, Loan, 6.73% – 7.48%, 2/01/13		1,253		250,621
				702,080
Real Estate Management & Development — 0.2%
Realogy Corp.:
Initial Term B Loan, 3.28%, 10/10/13		402		306,324
Synthetic Letter of Credit, 0.11%, 10/10/13		129		98,326
				404,650

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	21

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

Floating Rate Loan Interests	Par (000)		Value
Specialty Retail — 0.1%
Claire’s Stores, Term Loan B, 5.27%, 5/29/14	USD	280	$	182,400
Total Floating Rate Loan Interests (Cost — $54,429,610) — 19.1%				41,258,888
Other Interests (j)	Beneficial Interest (000)
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 — 0.0%				3,895
Preferred Securities
Preferred Stocks	Shares
Capital Markets — 0.0%
Marsico Parent Superholdco, LLC, 16.75% (b)		72		18,360
Diversified Financial Services — 0.1%
Preferred Blocker, Inc., 7.00% (b)		590		274,479
Media — 0.0%
CMP Susquehanna Radio Holdings Corp., 0% (a)(b)(h)		37,314		—
Total Preferred Securities — 0.1%				292,839
Warrants (k)
Containers & Packaging — 0.0%
MDP Acquisitions Plc (expires 10/01/13)		700		28,916
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		—
Other — 0.0%
Turbo Cayman Ltd. (No Expiration)		1		—
Total Warrants — 0.0%				28,921
Total Long-Term Investments (Cost — $298,533,340) — 119.4%				256,971,953

Short-Term Securities	Shares		Value
BlackRock Liquidity Funds, TempFund, 0.22% (l)(m)		2,029,452	$	2,029,452
Total Short-Term Securities (Cost — $2,029,452) — 0.9%				2,029,452
Options Purchased	Contracts
Over-the-Counter Call Options
Marsico Parent Superholdco LLC, expiring December 2009 at USD 942.86, Broker The Goldman Sachs Group, Inc.		19		19,000
Total Options Purchased (Cost — $18,578) — 0.0%				19,000
Total Investments (Cost — $300,581,370*) — 120.3%				259,020,405
Liabilities in Excess of Other Assets — (20.3)%				(43,675,127	)
Net Assets — 100.0%			$	215,345,278

*	The cost and unrealized appreciation (depreciation) of investments as of August 31, 2009, as computed for federal income tax purposes, were as follows:
	Aggregate cost	$	302,252,091
	Gross unrealized appreciation	$	9,573,366
	Gross unrealized depreciation		(52,805,052	)
	Net unrealized depreciation	$	(43,231,686	)

(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 the security has been pledged as collateral in connection with swaps.
(d)	Issuer filed for bankruptcy and/or is in default of interest payments.
(e)	Represents a payment-in-kind security which may pay interest/dividends in additional par/shares.
(f)	Convertible security.
(g)	Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.
(h)	Variable rate security. Rate shown is as of report date.
(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)	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.
(l)	Investments in companies considered to be an affiliate of the Fund, for purposes of Section 2(a)(3) of the Investment Co. Act of 1940, were as follows:

Affiliate	Net Activity			Income
BlackRock Liquidity Funds, TempFund	$	2,029,452		$	4,405
BlackRock Liquidity Series, LLC Cash Sweep Series	$	(8,370,522	)	$	2,500

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

See Notes to Financial Statements.
22	SEMI-ANNUAL REPORT	AUGUST 31, 2009

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

• 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 ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.

• Foreign currency exchange contracts as of August 31, 2009 were as follows:

Currency Purchased		Currency Sold			Counterparty	Settlement Date	Unrealized Appreciation (Depreciation)
USD	11,869,438		EUR	8,503,500	Citibank NA	9/16/09	$	(321,504	)
USD	465,812		EUR	330,000	UBS AG	9/16/09		(7,289	)
USD	537,357		CAD	583,500	Barclays Bank Plc	10/28/09		4,310
USD	1,095,115		GBP	670,000	Citibank NA	10/28/09		4,477
Total							$	(320,006	)

• Credit default swaps on single-name issues — buy protection outstanding as of August 31, 2009 were as follows:

Issuer	Pay Fixed Rate		Counterparty	Expiration	Notional Amount (000)	Unrealized Appreciation (Depreciation)
Black & Decker Corp.	2.93	%	Goldman Sachs International	March 2014	USD 600	$	(35,219	)
Macy’s, Inc.	8.05	%	Goldman Sachs International	March 2014	USD 600		(112,690	)
Masco Corp.	5.85	%	Goldman Sachs International	March 2014	USD 750		(99,209	)
Louisiana-Pacific Corp.	5.00	%	JPMorgan Chase Bank NA	March 2014	USD 500		(95,335	)
Mohawk Industries, Inc.	4.70	%	Goldman Sachs International	March 2014	USD 750		(82,112	)
Tyson Foods, Inc.	4.25	%	Goldman Sachs International	March 2014	USD 400		(37,313	)
Centex Corp.	1.00	%	Deutsche Bank AG	June 2014	USD 250		(8,534	)
First Data Corp.	5.00	%	Credit Suisse International	June 2014	USD 250		(21,929	)
Lennar Corp.	5.75	%	JPMorgan Chase Bank NA	June 2014	USD 250		(30,077	)
Standard Pacific Corp.	5.00	%	JPMorgan Chase Bank NA	June 2014	USD 525		(1,923	)
Brunswick Corp.	5.00	%	Goldman Sachs International	September 2014	USD 500		2,820
Centex Corp.	1.00	%	Deutsche Bank AG	September 2014	USD 188		(1,501	)
Limited Brands, Inc.	1.00	%	Goldman Sachs International	September 2014	USD 850		9,048
Limited Brands, Inc.	1.00	%	JPMorgan Chase Bank NA	September 2014	USD 100		1,143
Pulte Homes, Inc.	1.00	%	JPMorgan Chase Bank NA	September 2014	USD 375		5,955
Standard Pacific Corp.	5.00	%	Credit Suisse International	September 2014	USD 565		22,516
Meritage Homes Corp.	5.00	%	Credit Suisse International	June 2015	USD 250		(10,202	)
Total						$	(494,562	)

• Credit default swaps on single-name issues — sold protection outstanding as of August 31, 2009 were as follows:

Issuer	Receive Fixed Rate		Counterparty	Expiration	Rating1	Notional Amount (000)2		Unrealized Appreciation (Depreciation)
Ford Motor Co.	3.80	%	UBS AG	March 2010	CCC	USD	1,000	$	(32,127	)
Ford Motor Co.	5.00	%	Goldman Sachs International	June 2010	CCC	USD	4,000		(146,123	)
Beazer Homes USA, Inc.	5.00	%	Credit Suisse International	June 2011	D	USD	175		2,818
Beazer Homes USA, Inc.	5.00	%	JPMorgan Chase Bank NA	September 2011	D	USD	100		650
Beazer Homes USA, Inc.	5.00	%	Goldman Sachs International	September 2011	D	USD	200		(652	)
Beazer Homes USA, Inc.	5.00	%	Credit Suisse International	September 2011	D	USD	275		3,485
D.R. Horton, Inc. 1.00%			JPMorgan Chase Bank NA	September 2014	BB–	USD	188		(12	)
Total								$	(171,961	)

1	Using S&P’s rating of the issuer.
2	The maximum potential amount the Fund may pay should a negative credit event take place as defined under the terms of the agreement.

•	Currency Abbreviations:
	CAD     Canadian Dollar
	EUR     Euro
	GBP     British Pound
	USD     US Dollar
•	Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of fair value measurements. Various inputs are used in determining the fair value of investments, which are as follows:
	•	Level 1 — price quotations in active markets/exchanges for identical securities
	•	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)
	The inputs or methodology 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, 2009	23

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

The following table summarizes the inputs used as of August 31, 2009 in determining the fair valuation of the Fund’s investments:

Valuation Inputs			Investments in Securities
			Assets
Level 1
Long-Term Investments:
Common Stocks			$	7,852,951
Short-Term Securities				2,029,452
Total Level 1				9,882,403
Level 2
Long-Term Investments:
Common Stocks				202,008
Corporate Bonds				205,688,430
Floating Rate Loan Interests				17,904,257
Preferred Stocks				292,839
Warrants				28,916
Total Level 2				224,116,450
Level 3
Long-Term Investments:
Common Stocks				392
Corporate Bonds				1,643,629
Floating Rate Loan Interests				23,354,631
Other Interests				3,895
Warrants				5
Total Level 3				25,002,552
Total			$	259,001,405
Valuation Inputs	Other Financial Instruments1
	Assets		Liabilities
Level 1		—		—
Level 2	$	76,222	$	(1,043,751	)
Level 3		—		—
Total	$	76,222	$	(1,043,751	)

¹ Other financial instruments are swaps, foreign currency exchange contracts and options purchased. Swaps and foreign currency exchange contracts are shown at the unrealized appreciation/depreciation on the instrument and options purchased are shown at market value.

The following is a reconciliation of investments for unobservable inputs (Level 3) used in determining fair value:

	Investment in Securities
	Common Stocks			Corporate Bonds			Floating Rate Loan Interests			Other Interests			Warrants			Total
Balance as of February 28, 2009		$	381	$	1,607,922		$	16,334,395			$	3,837			—	$	17,946,535
Accrued discounts/premiums			—		—			—				—			—		—
Realized gain (loss)			—		—			(1,297,443	)			—			—		(1,297,443	)
Change in unrealized appreciation (depreciation)2			—		(295,960	)		7,169,159				—			—		6,873,199
Net purchases (sales)			—		3,467			(2,090,258	)			—			—		(2,086,791	)
Net transfer in/out of Level 3			11		328,200			3,238,778				58		$	5		3,567,052
Balance as of August 31, 2009		$	392	$	1,643,629		$	23,354,631			$	3,895		$	5	$	25,002,552

² Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations.

See Notes to Financial Statements.
24	SEMI-ANNUAL REPORT	AUGUST 31, 2009

Schedule of Investments August 31, 2009 (Unaudited)	BlackRock Debt Strategies Fund, Inc. (DSU)
	(Percentages shown are based on Net Assets)

Common Stocks	Shares	Value
Airlines — 0.0%
Delta Air Lines, Inc. (a)	14,829	$	107,065
Building Products — 0.8%
Masonite Worldwide Holdings (a)	71,958		2,910,701
Neenah Enterprises Inc. (a)	144,858		28,972
			2,939,673
Chemicals — 0.1%
GEO Specialty Chemicals, Inc. (a)	339,340		130,273
GenTek, Inc. (a)	403		11,054
Wellman Holdings, Inc. (a)	5,373		1,343
			142,670
Communications Equipment — 0.9%
Loral Space & Communications Ltd. (a)	150,354		3,103,307
Containers & Packaging — 0.5%
Smurfit Kappa Plc	36,342		286,389
Viskase Cos., Inc. (a)	1,428,423		1,428,423
			1,714,812
Diversified Financial Services — 0.0%
Preferred Term Securities VI, Ltd. (a)(b)	35,000		350
Electrical Equipment — 0.1%
Medis Technologies Ltd. (a)	286,757		81,726
SunPower Corp. Class B (a)	4,892		104,640
			186,366
Hotels, Restaurants & Leisure — 0.0%
Buffets Restaurants Holdings, Inc. (a)	2,753		28
HRP Corp. Class B (a)(b)(c)	5,000		50
Lodgian, Inc. (a)	27,787		38,624
			38,702
Metals & Mining — 0.0%
Euramax International	2,337		25,126
Paper & Forest Products — 1.0%
Ainsworth Lumber Co. Ltd.	1,190,019		1,717,497
Ainsworth Lumber Co. Ltd. (a)(b)	1,335,501		1,921,321
Western Forest Products, Inc. (a)(b)	211,149		50,147
			3,688,965
Specialty Retail — 0.4%
Movie Gallery, Inc. (a)	503,737		1,435,650
Total Common Stocks — 3.8%			13,382,686

Corporate Bonds		Par (000)
Airlines — 0.2%
United Air Lines, Inc., 12.75%, 7/15/12	USD	800	768,000
Auto Components — 0.4%
Allison Transmission, Inc., 11.00%, 11/01/15 (b)		216	194,400
The Goodyear Tire & Rubber Co., 8.63%, 12/01/11		1,000	1,010,000
Lear Corp., 8.75%, 12/01/16 (a)(d)		700	378,000
Venture Holdings Co. LLC (a)(d):
12.00%, 6/01/09		4,450	—
Series B, 9.50%, 7/01/05 (e)		1,800	180
			1,582,580

Corporate Bonds		Par (000)	Value
Building Products — 2.3%
CPG International I, Inc.:
7.87%, 7/01/12 (f)	USD	7,500	$	5,362,500
10.50%, 7/01/13		1,300		929,500
Momentive Performance Materials, Inc. Series WI, 9.75%, 12/01/14		1,600		1,040,000
Ply Gem Industries, Inc., 11.75%, 6/15/13		1,050		876,750
				8,208,750
Capital Markets — 1.3%
E*Trade Financial Corp. (b):
12.50%, 11/30/17 (c)		731		740,138
3.14%, 8/31/19 (g)(h)		2,333		3,986,514
				4,726,652
Chemicals — 2.9%
American Pacific Corp., 9.00%, 2/01/15		1,490		1,344,725
GEO Specialty Chemicals, Inc. (b):
7.50%, 3/31/15 (c)(h)		4,144		2,693,802
10.00%, 3/31/15 (f)		4,106		2,668,640
Wellman Holdings, Inc. (h):
Second Lien Subordinate Note, 10.00%, 1/29/19 (b)		2,978		2,978,000
Third Lien Subordinate Note, 5.00%, 1/29/19		930		465,269
				10,150,436
Commercial Banks — 0.1%
Glitnir Banki HF (a)(c):
4.15%, 4/20/10 (b)		294		58,065
4.97%, 1/18/12 (b)		150		29,625
6.38%, 9/25/12 (b)		820		161,950
Series EMTN, 5.07%, 1/27/10	EUR	50		14,694
Series EMTN, 3.00%, 6/30/10		75		22,042
Series GMTN, 4.38%, 2/05/10		85		24,981
				311,357
Commercial Services & Supplies — 1.5%
Clean Harbors, Inc., 7.63%, 8/15/16 (b)	USD	1,200		1,203,000
RSC Equipment Rental, Inc., 10.00%, 7/15/17 (b)		970		1,013,650
West Corp., 11.00%, 10/15/16		3,270		3,016,575
				5,233,225
Construction Materials — 0.8%
Nortek, Inc., 10.00%, 12/01/13		2,970		2,762,100
Consumer Finance — 0.6%
Ford Motor Credit Co. LLC, 3.26%, 1/13/12 (f)		2,680		2,231,100
Containers & Packaging — 3.0%
Berry Plastics Holding Corp., 4.50%, 9/15/14 (f)		375		270,000
Crown Americas LLC, 7.63%, 5/15/17 (b)		710		704,675
Graphic Packaging International, Inc., 9.50%, 6/15/17 (b)		1,440		1,476,000
Packaging Dynamics Finance Corp., 10.00%, 5/01/16 (b)		6,215		1,988,800
Smurfit Kappa Funding Plc, 7.75%, 4/01/15		3,325		2,693,250
Solo Cup Co., 10.50%, 11/01/13 (b)		440		462,000
Wise Metals Group LLC, 10.25%, 5/15/12		6,325		3,099,250
				10,693,975
Diversified Consumer Services — 0.6%
NBC Acquisition Corp., 11.00%, 3/15/13		3,875		2,131,250

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	25

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

Corporate Bonds		Par (000)	Value
Diversified Financial Services — 5.8%
Archimedes Funding III Ltd., 5.50%, 11/29/11 (b)	USD	5,744	$	2,642,097
FCE Bank Plc, 7.13%, 1/16/12	EUR	8,000		10,379,333
GMAC LLC (b):
7.25%, 3/02/11	USD	800		751,000
6.88%, 9/15/11		900		830,250
6.88%, 8/28/12		1,000		870,000
6.75%, 12/01/14		4,290		3,517,800
8.00%, 11/01/31		2,160		1,668,600
				20,659,080
Diversified Telecommunication Services — 2.2%
Nordic Telephone Co. Holdings ApS, 8.88%, 5/01/16 (b)		2,600		2,639,000
PAETEC Holding Corp., 8.88%, 6/30/17 (b)		1,100		1,047,750
Qwest Corp., 8.38%, 5/01/16 (b)(i)		4,000		4,040,000
				7,726,750
Electric Utilities — 0.4%
NSG Holdings LLC, 7.75%, 12/15/25 (b)		1,505		1,256,675
Electronic Equipment, Instruments & Components — 0.0%
Muzak Holdings, LLC, 13.00%, 3/15/10 (a)(d)		2,675		268
Food & Staples Retailing — 0.1%
Duane Reade, Inc., 11.75%, 8/01/15 (b)		280		282,800
Food Products — 0.4%
Smithfield Foods, Inc., 10.00%, 7/15/14 (b)		1,250		1,275,000
Health Care Equipment & Supplies — 0.6%
DJO Finance LLC, 10.88%, 11/15/14		2,235		2,145,600
Health Care Providers & Services — 0.9%
Community Health Systems, Inc. Series WI, 8.88%, 7/15/15		3,010		3,021,287
Hotels, Restaurants & Leisure — 2.7%
HRP Myrtle Beach Holdings LLC, 14.50%, 4/01/14 (a)(b)(c)(d)		6,892		689
HRP Myrtle Beach Operations LLC (a)(b)(d):
7.38%, 4/01/12		5,000		500
12.50%, 4/01/13		5,000		500
Harrah’s Operating Co., Inc. (b):
10.00%, 12/15/15		1,160		829,400
10.00%, 12/15/18		3,240		2,268,000
Little Traverse Bay Bands of Odawa Indians, 10.25%, 2/15/14 (a)(b)(d)		2,560		1,126,400
MGM Mirage, 11.13%, 11/15/17 (b)		1,340		1,450,550
Shingle Springs Tribal Gaming Authority, 9.38%, 6/15/15 (b)		380		269,800
Snoqualmie Entertainment Authority, 4.68%, 2/01/14 (b)(f)		1,015		497,350
Travelport LLC, 4.99%, 9/01/14 (f)		2,160		1,566,000
Tropicana Entertainment LLC Series WI, 9.63%, 12/15/14 (a)(d)		530		331
Tunica-Biloxi Gaming Authority, 9.00%, 11/15/15 (b)		1,860		1,655,400
				9,664,920
Household Durables — 0.6%
KB Home, 6.38%, 8/15/11		180		178,200
Standard Pacific Corp.:
6.25%, 4/01/14		455		357,175
7.00%, 8/15/15		1,550		1,216,750
Stanley-Martin Communities LLC, 9.75%, 8/15/15		2,250		551,250
				2,303,375

Corporate Bonds		Par (000)	Value
IT Services — 1.0%
First Data Corp.:
9.88%, 9/24/15	USD	1,275	$	1,090,125
11.25%, 3/31/16 (b)		1,890		1,445,850
SunGard Data Systems, Inc., 4.88%, 1/15/14		1,265		1,138,500
				3,674,475
Independent Power Producers & Energy Traders — 1.9%
AES Eastern Energy LP Series 99-B, 9.67%, 1/02/29		1,010		868,600
Calpine Construction Finance Co. LP, 8.00%, 6/01/16 (b)		1,250		1,243,750
Energy Future Holdings Corp., 11.25%, 11/01/17 (c)		3,392		1,941,574
NRG Energy, Inc., 8.50%, 6/15/19		800		778,000
Texas Competitive Electric Holdings Co. LLC:
10.25%, 11/01/15		770		510,125
10.50%, 11/01/16 (c)		2,535		1,406,684
				6,748,733
Industrial Conglomerates — 2.0%
Sequa Corp. (b):
11.75%, 12/01/15		5,100		3,213,000
13.50%, 12/01/15 (c)		7,792		4,071,062
				7,284,062
Insurance — 1.0%
Alliant Holdings I, Inc., 11.00%, 5/01/15 (b)		2,500		2,281,250
USI Holdings Corp., 4.32%, 11/15/14 (b)(f)		1,630		1,259,175
				3,540,425
Leisure Equipment & Products — 0.6%
Brunswick Corp., 11.25%, 11/01/16 (b)		1,870		1,958,825
Machinery — 2.0%
CPM Holdings, Inc., 10.63%, 9/01/14 (b)		800		808,000
ESCO Corp., 4.50%, 12/15/13 (b)(f)		3,070		2,739,975
RBS Global, Inc.:
9.50%, 8/01/14 (b)		660		607,200
8.88%, 9/01/16		1,685		1,352,213
Titan International, Inc., 8.00%, 1/15/12		1,530		1,472,625
				6,980,013
Marine — 0.1%
Navios Maritime Holdings, Inc., 9.50%, 12/15/14		465		406,875
Media — 6.1%
Affinion Group, Inc., 10.13%, 10/15/13		1,080		1,073,250
CSC Holdings, Inc., 8.50%, 4/15/14 (b)		680		690,200
Canadian Satellite Radio Holdings, Inc., 12.75%, 2/15/14		5,000		1,725,000
Charter Communications Holdings LLC (a)(d):
10.00%, 4/01/09		2,402		3,002
11.13%, 1/15/11		1,319		65,950
10.00%, 5/15/11		1,978		2,473
Intelstat Corp., 9.25%, 8/15/14		4,500		4,567,500
Local Insight Regatta Holdings, Inc., 11.00%, 12/01/17		2,665		1,012,700
Network Communications, Inc., 10.75%, 12/01/13		20		4,050
Nielsen Finance LLC, 11.63%, 2/01/14		5,000		4,962,500
TL Acquisitions, Inc., 10.50%, 1/15/15 (b)		5,230		4,759,300
Virgin Media, Inc., 6.50%, 11/15/16 (b)(h)		3,000		2,718,750
				21,584,675

See Notes to Financial Statements.
26	SEMI-ANNUAL REPORT	AUGUST 31, 2009

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

Corporate Bonds		Par (000)	Value
Metals & Mining — 1.9%
Aleris International, Inc. (a)(d):
9.00%, 12/15/14	USD	1,100	$	2,750
10.00%, 12/15/16		1,500		3,750
RathGibson, Inc., 11.25%, 2/15/14 (a)(d)		4,440		1,598,400
Ryerson, Inc., 7.86%, 11/01/14 (f)(i)		3,595		3,055,750
Teck Resources Ltd., 10.75%, 5/15/19		1,875		2,135,156
				6,795,806
Oil, Gas & Consumable Fuels — 3.1%
Atlas Energy Operating Co. LLC, 12.13%, 8/01/17		1,440		1,519,200
Atlas Energy Resources LLC, 10.75%, 2/01/18 (b)		525		530,250
Chesapeake Energy Corp., 9.50%, 2/15/15		1,645		1,677,900
Denbury Resources, Inc., 9.75%, 3/01/16		1,875		1,973,438
Forest Oil Corp.:
8.50%, 2/15/14 (b)		2,265		2,276,325
7.25%, 6/15/19		700		658,000
SandRidge Energy, Inc., 4.22%, 4/01/14 (f)		2,000		1,660,736
Titan Petrochemicals Group Ltd., 8.50%, 3/18/12		1,760		668,800
				10,964,649
Paper & Forest Products — 4.6%
Ainsworth Lumber Co. Ltd., 11.00%, 7/29/15 (b)(c)		10,267		4,070,085
Clearwater Paper Corp., 10.63%, 6/15/16 (b)		640		685,600
Georgia-Pacific LLC, 8.25%, 5/01/16 (b)		2,950		2,979,500
NewPage Corp.:
6.73%, 5/01/12 (f)		8,000		3,420,000
10.00%, 5/01/12		2,720		1,475,600
12.00%, 5/01/13		2,145		681,038
Verso Paper Holdings LLC:
11.50%, 7/01/14 (b)		550		539,000
Series B, 4.23%, 8/01/14 (f)		4,400		2,464,000
				16,314,823
Pharmaceuticals — 2.1%
Angiotech Pharmaceuticals, Inc., 4.11%, 12/01/13 (f)		5,000		4,200,000
Elan Finance Plc, 7.75%, 11/15/11		3,525		3,419,250
				7,619,250
Real Estate Investment Trusts (REITs) — 0.3%
RAIT Financial Trust, 6.88%, 4/15/27 (b)(h)		3,500		1,229,375
Real Estate Management & Development — 0.6%
Realogy Corp.:
10.50%, 4/15/14		375		223,125
12.38%, 4/15/15		5,053		2,046,465
				2,269,590
Semiconductors & Semiconductor Equipment — 0.8%
Spansion, Inc., 3.79%, 6/01/13 (a)(b)(d)		3,370		2,990,875
Software — 0.0%
BMS Holdings, Inc., 8.35%, 2/15/12 (b)(c)(f)		1,627		26,118
Specialty Retail — 2.2%
General Nutrition Centers, Inc.:
6.40%, 3/15/14 (f)		365		321,200
10.75%, 3/15/15		4,480		4,233,600
Michaels Stores, Inc., 11.38%, 11/01/16		2,230		1,917,800
United Auto Group, Inc., 7.75%, 12/15/16		1,380		1,214,400
				7,687,000
Textiles, Apparel & Luxury Goods — 0.6%
Levi Strauss & Co., 8.63%, 4/01/13	EUR	1,550		2,122,100

Corporate Bonds		Par (000)	Value
Wireless Telecommunication Services — 4.4%
Cricket Communications, Inc., 7.75%, 5/15/16 (b)	USD	2,250	$	2,182,500
Crown Castle International Corp., 9.00%, 1/15/15		385		400,400
Digicel Group Ltd. (b):
8.88%, 1/15/15		3,560		3,177,300
9.13%, 1/15/15 (c)		7,248		6,387,300
MetroPCS Wireless, Inc., 9.25%, 11/01/14		2,860		2,806,375
Orascom Telecom Finance SCA, 7.88%, 2/08/14 (b)		755		679,500
				15,633,375
Total Corporate Bonds — 62.7%				222,966,224
Floating Rate Loan Interests
Aerospace & Defense — 0.1%
IAP Worldwide Services, Inc., Term Loan (First Lien), 9.25%, 12/30/12 (c)		275		198,458
Airlines — 0.8%
Delta Air Lines, Inc., Credit-Linked Deposit Loan, 0.11% – 2.28%, 4/30/12		1,960		1,750,117
US Airways Group, Inc., Loan, 2.76%, 3/21/14		2,197		1,183,286
				2,933,403
Auto Components — 2.8%
Allison Transmission, Inc., Term Loan, 3.03%, 8/07/14		7,481		6,386,957
Dana Holding Corp., Term Advance, 7.25%, 1/31/15		2,883		2,207,550
The Goodyear Tire & Rubber Co., Loan (Second Lien), 2.02%, 4/30/14		1,050		968,625
Intermet Corp.:
First Lien Credit Facility, 11.25%, 11/08/10 (a)(c)(d)		373		74,679
Letter of Credit, 0.16%, 11/09/10 (a)(d)		751		277,946
Synthetic Letter of Credit, 11.25%, 11/09/10 (c)		84		31,098
Term Loan B, 11.25%, 11/08/10 (c)		478		176,948
				10,123,803
Beverages — 0.2%
Culligan International Co., Loan (Second Lien), 5.28%, 4/24/13	EUR	1,500		537,604
Building Products — 0.6%
Building Materials Corp. of America, Term Loan Advance, 3.06%, 2/22/14	USD	2,213		2,019,077
Chemicals — 3.7%
Ashland, Inc., Term Loan, 7.65%, 5/13/14		889		903,747
Nalco Co., Term Loan, 6.50%, 5/06/16		1,725		1,748,719
PQ Corp. (fka Niagara Acquisition, Inc.):
Term Loan (First Lien), 3.52% – 3.75%, 7/31/14		1,980		1,631,851
Term Loan (Second Lien), 6.77%, 7/30/15		10,165		5,590,947
Solutia Inc., Loan, 7.25%, 2/28/14		3,217		3,184,494
				13,059,758
Commercial Services & Supplies — 0.4%
Casella Waste Systems, Term Loan B, 7.00%, 12/21/12		390		390,975
John Maneely Co., Term Loan, 3.52% – 3.76%, 12/09/13		1,269		994,594
				1,385,569

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	27

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

Floating Rate Loan Interests		Par (000)	Value
Communications Equipment — 0.2%
Safenet, Inc., Term Loan (First Lien), 2.77%, 4/12/14	USD	980	$	903,234
Computers & Peripherals — 0.3%
Intergraph Corp., Second Lien Term Loan, 6.26% – 6.37%, 11/28/14		1,000		932,500
Construction Materials — 0.5%
Headwaters Inc., Term Loan B1 (First Lien), 9.75%, 4/30/11		1,846		1,785,700
Containers & Packaging — 0.5%
Graham Packaging Co., L.P., Term Loan B, 2.56%, 10/07/11		898		873,017
Smurfit-Stone Container Enterprises, Inc., US Term Loan, Debtor in Possession, 10.00%, 7/28/10		1,018		1,028,157
				1,901,174
Distributors — 0.3%
Keystone Automotive Operations, Inc. Loan, 3.77% – 5.75%, 1/12/12		1,656		902,296
Diversified Consumer Services — 1.2%
Coinmach Service Corp., Term Loan, 3.28% – 3.43%, 11/14/14		5,184		4,406,579
Diversified Telecommunication Services — 1.0%
Hawaiian Telcom Communications, Inc., Tranche C Term Loan, 4.75%, 5/30/14		4,553		2,763,735
Integra Telecom Holdings, Inc., Term Loan (First Lien), 10.50%, 8/31/13		699		685,378
PAETEC Holding Corp., Incremental Term Loan, 2.76%, 2/28/13		253		238,509
				3,687,622
Electrical Equipment — 0.1%
Generac Acquisition Corp., Term Loan (First Lien), 2.78%, 11/10/13		427		357,987
Energy Equipment & Services — 1.1%
Dresser, Inc.:
Term B Loan, 2.68%, 5/04/14		162		150,733
Term Loan (Second Lien), 6.02%, 5/04/15		2,500		2,078,125
MEG Energy Corp.:
Delayed Draw Term Loan, 2.60%, 4/02/13		1,233		1,144,975
Initial Term Loan, 2.60%, 4/03/13		698		648,515
				4,022,348
Food & Staples Retailing — 0.7%
DS Waters of America, Inc., Term Loan, 4.27%, 10/29/12		1,000		843,333
McJunkin Corp., Term Loan, 3.51%, 1/31/14		349		332,522
Rite Aid Corp., Tranche 4 Term Loan, 9.50%, 6/04/15		750		776,250
Wm. Bolthouse Farms, Inc., Loan (Second Lien), 5.76%, 12/16/13		750		681,875
				2,633,980
Food Products — 0.7%
Dole Food Co., Inc.:
Credit-Linked Deposit, 0.51% – 6.86%, 4/12/13		288		290,084
Tranche B Term Loan, 8.00%, 4/12/13		504		507,094
Solvest, Ltd. (Dole), Tranche C Term Loan, 8.00%, 4/12/13		1,877		1,889,477
				2,686,655

Floating Rate Loan Interests		Par (000)	Value
Health Care Equipment & Supplies — 0.9%
DJO Finance LLC (ReAble Therapeutics Finance LLC), Term Loan, 3.26% – 3.60%, 5/20/14	USD	3,448	$	3,292,363
Health Care Providers & Services — 3.2%
CCS Medical, Inc. (Chronic Care), Loan Debtor in Possession, 11.00%, 11/14/09		31		30,309
CCS Medical, Inc. (Chronic Care), Term Loan (First Lien), 4.35%, 9/30/12 (a)(c)		819		369,724
CHS/Community Health Systems, Inc.:
Delayed Draw Term Loan, 2.51%, 7/25/14		123		114,635
Funded Term Loan, 2.51% – 2.62%, 7/25/14		2,442		2,274,825
DaVita, Inc., Tranche B-1 Term Loan, 1.77% – 2.10%, 10/05/12		925		887,614
Fresenius AG:
Term Loan B1, 6.75%, 7/06/14		403		405,388
Term Loan B2, 6.75%, 7/06/14		281		282,862
HCA Inc., Tranche A-1 Term Loan, 2.10%, 11/17/12		5,447		5,085,842
Rotech Healthcare, Inc., Term Loan, 6.26%, 9/26/11		3,800		1,824,183
				11,275,382
Hotels, Restaurants & Leisure — 1.9%
Golden Nugget, Inc., Second Lien Term Loan, 3.52%, 12/31/14		500		210,000
Green Valley Ranch Gaming, LLC, Loan (Second Lien) Term Loan, 3.88%, 8/16/14		750		153,750
Harrah’s Operating Co., Inc.:
Term B-1 Loan, 3.50%, 1/28/15		487		391,498
Term B-2 Loan, 3.50%, 1/28/15		613		493,529
Term B-3 Loan, 3.50% – 3.60%, 1/28/15		429		344,965
QCE, LLC (Quiznos), Term Loan (Second Lien), 6.35%, 11/05/13		6,000		2,760,000
VML US Finance LLC (aka Venetian Macau):
New Project Term Loan, 6.10%, 5/25/13		998		912,356
Term B Funded Project Loan, 6.10%, 5/27/13		221		202,001
Term B Delayed Draw Project Loan, 6.10%, 5/25/12		1,275		1,166,552
				6,634,651
Household Durables — 0.7%
American Residential Services LLC, Term Loan (Second Lien), 12.00%, 4/17/15 (f)		3,060		2,669,614
IT Services — 1.9%
Audio Visual Services Group, Inc., Loan (Second Lien), 7.10%, 8/28/14 (f)		1,040		83,184
Ceridian Corp. US, Term Loan, 3.27%, 11/09/14		3,460		2,961,910
First Data Corp., Initial Tranche B-2, Term Loan, 3.01% – 3.02%, 9/24/14		2,470		2,055,288
RedPrairie Corp. Term Loan:
3.44% – 5.25%, 7/20/12		777		672,523
3.69%, 7/20/12		260		224,516
SunGard Data Systems, Inc. (Solar Capital Corp.), Tranche B US Term Loan, 3.95% – 4.09%, 2/28/16		719		694,118
				6,691,539
Independent Power Producers & Energy Traders — 0.7%
Texas Competitive Electric Holdings Co., LLC (TXU) Initial Tranche:
B-2 Term Loan, 3.78% – 3.79%, 10/10/14		2,947		2,240,062
B-3 Term Loan, 3.78%, 10/10/14		198		150,211
				2,390,273

See Notes to Financial Statements.
28	SEMI-ANNUAL REPORT	AUGUST 31, 2009

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

Floating Rate Loan Interests		Par (000)	Value
Industrial Conglomerates — 0.3%
Sequa Corp., Term Loan, 3.65% – 3.88%, 12/03/14	USD	1,394	$	1,188,031
Insurance — 0.2%
Alliant Holdings I, Inc., Term Loan, 3.60%, 8/21/14		597		549,205
Internet & Catalog Retail — 0.4%
FTD Group, Inc., Tranche B Term Loan, 6.75%, 8/04/14		1,354		1,340,766
Life Sciences Tools & Services — 0.3%
Life Technologies Corp., Term B Facility, 5.25%, 11/20/15		996		1,005,559
Machinery — 2.2%
Navistar International Corp.:
Revolving Credit-Linked Deposit, 3.36% – 3.51%, 1/19/12		1,867		1,736,000
Term Advance, 3.51%, 1/19/12		5,133		4,774,000
Oshkosh Truck Corp., Term B Loan, 6.60% – 6.64%, 12/06/13		1,464		1,456,679
				7,966,679
Media — 11.1%
Affinion Group Holdings, Inc., Loan, 8.27%, 3/01/12		4,191		3,666,776
Cengage Learning Acquisitions, Inc. (Thomson Learning), Tranche 1 Incremental Term Loan, 7.50%, 7/03/14		2,200		2,112,000
Cequel Communications, LLC:
Term Loan, 2.27% – 4.25%, 11/05/13		1,562		1,474,984
Tranche B Term Loan (Second Lien), 6.27% – 6.28%, 5/05/14		6,691		6,172,322
Charter Communications, Term Loan B1, 7.94%, 3/25/14 (a)(d)		3,270		3,268,365
EB Sports Corp, Loan, 7.57%, 5/01/12 (c)		2,908		1,599,194
Ellis Communications KDOC, LLC, Loan, 10.00%, 12/30/11		6,303		1,764,771
HMH Publishing Co. Ltd. (fka Education Media):
Mezzanine, 17.50%, 11/14/14		20,360		3,054,055
Tranche A Term Loan, 5.26%, 6/12/14		5,082		3,932,042
Lamar Media Corp., Term Loan, 5.50%, 9/30/12		1,208		1,190,319
Lavena Holding 3 GmbH (Prosiebensat.1 Media AG):
Facility B1, 3.53%, 6/30/15	EUR	337		272,803
Facility C1, 3.78%, 6/30/16		674		545,605
Mediacom Illinois, LLC (fka Mediacom Communications, LLC), Tranche D Term Loan, 5.50%, 3/31/17	USD	1,000		997,500
Multicultural Radio Broadcasting, Inc., Term Loan, 3.03%, 12/18/12		396		277,375
Newsday, LLC Fixed Rate Term Loan, 9.75%, 8/01/13		4,250		4,324,375
Penton Media, Inc., Loan (Second Lien), 5.49%, 2/01/14		1,000		210,000
United Pan Europe Communications Term Loan, 3.76%, 12/31/16		3,000		2,947,500
Virgin Media Investment Holdings Ltd. C Facility, 4.19%, 7/17/13	GBP	505		723,460
World Color Press Inc. and World Color (USA) Corp. (fka Quebecor World Inc.), Advance, 9.00%, 6/30/12	USD	800		794,000
				39,327,446

Floating Rate Loan Interests		Par (000)	Value
Metals & Mining — 1.3%
Euramax (1st Lien Term Loan), 8.75%, 6/29/13	USD	2,526	$	1,086,340
RathGibson, Inc., Loan Debtor in Possession, 10.50% – 10.75%, 2/10/10		3,665		3,665,418
				4,751,758
Multi-Utilities — 0.8%
Energy Transfer Equity, L.P., Term Loan, 2.21%, 11/01/12		750		726,428
FirstLight Power Resources, Inc. (fka NE Energy, Inc.):
First Lien Term Loan B, 3.13%, 11/01/13		664		611,659
Second Lien Term Loan, 5.13%, 5/01/14		750		579,375
Synthetic Letter of Credit, 0.48% – 2.65%, 11/01/13		86		78,810
USPF Holdings, LLC, Term Loan, 2.02%, 4/11/14		886		823,944
				2,820,216
Multiline Retail — 0.3%
Dollar General Corp., Tranche B-2 Term Loan, 3.01%, 7/07/14		1,250		1,201,215
Oil, Gas & Consumable Fuels — 2.5%
Big West Oil, LLC (a)(d):
Delayed Advance Loan, 4.50%, 5/15/14		956		879,335
Initial Advance Loan, 4.50%, 5/15/14		889		817,527
ScorpionDrilling Ltd., Loan (Second Lien), 8.10%, 5/08/14		3,500		2,905,000
Turbo Beta Ltd., Dollar Facility, 14.50%, 3/15/18		6,033		4,222,964
				8,824,826
Paper & Forest Products — 0.5%
Georgia-Pacific LLC, Term B Loan, 2.34% – 2.65%, 12/20/12		909		877,697
Verso Paper Finance Holdings LLC, Loan, 6.73% – 7.48%, 2/01/13		3,935		786,911
				1,664,608
Pharmaceuticals — 0.3%
Warner Chilcott Co., Inc.:
Tranche B Acquisition Date Term Loan, 2.26% – 2.60%, 1/18/12		738		733,608
Tranche C Acquisition Date Term Loan, 2.26%, 1/18/12		259		257,283
				990,891
Real Estate Management & Development — 0.3%
Enclave First Lien Term Loan, 6.14%, 3/01/12		4,000		527,196
Georgian Towers, Term Loan, 6.14%, 3/01/12		4,000		496,500
				1,023,696
Software — 1.2%
Aspect Software, Inc., Loan (Second Lien), 7.31%, 7/11/12		7,000		4,235,000
Specialty Retail — 0.3%
Adesa, Inc. (KAR Holdings, Inc.), Initial Term Loan, 2.52%, 10/20/13		1,000		938,333
Total Floating Rate Loan Interests — 46.5%				165,259,798
Other Interests (j)		Beneficial Interest (000)
Airlines — 0.0%
Delta Air Lines, Inc. Default:
8.33% Escrow		5,505		33,030
10.00% Escrow		4,200		25,200
				58,230

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	29

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

Other Interests (j)		Beneficial Interest (000)		Value
Diversified Financial Services — 0.1%
J.G. Wentworth LLC Preferred Equity Interests	USD	1	$	457,129
Hotels, Restaurants & Leisure — 0.0%
Buffets, Inc.		1,440		144
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
Specialty Retail — 0.0%
Movie Gallery, Inc. Default Escrow		21,700		217
Total Other Interests — 0.1%				554,145
Warrants (k)		Shares
Building Products — 0.0%
Neenah Enterprises Inc. (expires 9/30/13)		130,547		19,582
Chemicals — 0.0%
GenTek Inc. Tranche C (expires 11/10/10)		231		554
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
Other — 0.0%
Turbo Cayman Ltd. (No Expiration)		4		—
Specialty Retail — 0.0%
Movie Gallery, Inc. (expires 5/15/15)		62,323		31,162
Total Warrants — 0.0%				51,311
Total Long-Term Investments (Cost — $596,239,724) — 113.1%				402,214,164
Short-Term Securities
BlackRock Liquidity Funds, TempFund, 0.22% (l)(m)		501		501
Total Short-Term Securities (Cost — $501) — 0.0%				501
Total Investments (Cost — $596,240,225*) — 113.1%				402,214,665
Liabilities in Excess of Other Assets — (13.1)%				(46,621,927	)
Net Assets — 100.0%			$	355,592,738

* The cost and unrealized appreciation (depreciation) of investments as of August 31, 2009,as computed for federal income tax purposes, were as follows:

Aggregate cost	$	597,627,814
Gross unrealized appreciation	$	13,474,246
Gross unrealized depreciation		(208,887,395	)
Net unrealized depreciation	$	(195,413,149	)

(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 par/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 of the security upon maturity.
(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)	Convertible security.
(i)	All or a portion of security held as collateral for swaps.
(j)	Other interests represent beneficial interest in liquidation trusts and other reorganization entities and are non-income producing.
(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.
(l)	Investments in companies considered to be an affiliate of the Fund, for purposes of Section 2(a)(3) of the Investment Co. Act of 1940, were as follows:

Affiliate	Net Activity			Income
BlackRock Liquidity Funds, TempFund	$	501		$	5,118
BlackRock Liquidity Series, LLC Cash Sweep Series	$	(4,725,260	)	$	809

(m)	Represents the current yield as of report date.
•	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 ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.
•	Foreign currency exchange contracts as of August 31, 2009 were as follows:

Currency Purchased		Currency Sold		Counterparty	Settlement Date		Unrealized Appreciation (Depreciation)
USD	442,981	GBP	271,000	Citibank, NA	9/01/09	$	2,703
USD	14,053,566	EUR	10,037,000	Citibank, NA	9/16/09		(335,860	)
USD	1,473,473	CAD	1,600,00	Barclays Bank Plc	10/28/09		11,819
GBP	271,000	USD	442,950	Citibank, NA	10/28/09		(1,811	)
Total						$	(323,149	)

See Notes to Financial Statements.
30	SEMI-ANNUAL REPORT	AUGUST 31, 2009

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

• Credit default swaps on single-name issues — buy protection outstanding as of August 31, 2009 were as follows:

Issuer	Pay Fixed Rate		Counterparty	Expiration	Notional Amount (000)		Unrealized Appreciation (Depreciation)
First Data Corp.	5.00	%	JPMorgan Chase Bank NA	December 2013	USD	750	$	(57,490	)
First Data Corp.	5.00	%	JPMorgan Chase Bank NA	December 2013	USD	1,000		(76,761	)
Masco Corp.	5.30	%	JPMorgan Chase Bank NA	March 2014	USD	1,500		(165,240	)
Masco Corp.	6.25	%	JPMorgan Chase Bank NA	March 2014	USD	1,500		(222,548	)
Host Hotels & Resorts LP	5.00	%	Goldman Sachs Bank USA	March 2014	USD	2,500		(347,933	)
Mohawk Industries, Inc.	4.45	%	JPMorgan Chase Bank NA	March 2014	USD	1,500		(148,846	)
Mohawk Industries, Inc.	5.20	%	JPMorgan Chase Bank NA	March 2014	USD	1,500		(194,978	)
Lennar Corp.	5.75	%	JPMorgan Chase Bank NA	June 2014	USD	850		(102,263	)
Brunswick Corp.	5.00	%	Goldman Sachs Bank USA	September 2014	USD	325		1,823
Standard Pacific Corp.	5.00	%	Credit Suisse International	September 2014	USD	935		37,282
Total							$	(1,276,954	)

• Credit default swaps on single-name issues — sold protection outstanding as of August 31, 2009 were as follows:

Issuer1	Receive Fixed Rate		Counterparty	Expiration	Rating1	Notional Amount (000)2		Unrealized Depreciation
BAA Ferrovial Junior Term Loan	2.00	%	Deutsche Bank AG	March 2012	A	GBP	900	$	(288,675	)

1	Using S&P’s ratings of the issuer.
2	The maximum potential amount the Fund may pay should a negative credit event take place as defined under the term of the agreement.

•	Currency Abbreviations:
	CAD	Canadian Dollar
	EUR	Euro
	GBP	British Pound
	USD	US Dollar

• Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of fair value measurements. Various inputs are used in determining the fair value of investments, which are as follows:

• Level 1 — price quotations in active markets/exchanges for identical securities

• 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)

The inputs or methodology 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 table summarizes the inputs used as of August 31, 2009 in determining the fair valuation of the Fund’s investments:

Valuation Inputs	Investments in Securities
	Assets
Level 1
Long-Term Investments:
Common Stocks	$	11,017,806
Warrants		554
Short-Term Securities		501
Total Level 1		11,018,861
Level 2
Long-Term Investments:
Corporate Bonds		209,320,768
Floating Rate Loan Interests		88,300,804
Common Stocks		2,208,060
Other Interests		58,230
Warrants		19,582
Total Level 2		299,907,444
Level 3
Long-Term Investments:
Common Stocks		156,820
Corporate Bonds		13,645,456
Floating Rate Loan Interests		76,958,994
Other Interests		495,915
Warrants		31,175
Total Level 3		91,288,360
Total	$	402,214,665

Valuation Inputs	Other Financial Instruments1
	Assets		Liabilities
Level 1		—		—
Level 2	$	53,627	$	(1,653,730	)
Level 3		—		(288,675	)
Total	$	53,627	$	(1,942,405	)

¹ Other financial instruments are swaps and foreign currency exchange contracts which are shown at the unrealized appreciation/depreciation on the instrument.

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	31

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

The following is a reconciliation of investments for unobservable inputs (Level 3) used in determining fair value:

	Investments in Securities
	Common Stocks		Corporate Bonds			Floating Rate Loan Interests			Other Interests		Warrants		Total
Balance, as of February 28, 2009	$	131,666	$	12,983,142		$	92,859,804		$	38,643	$	31,161	$	106,044,416
Accrued discounts/premiums		—		(2,643,682	)		(1,817,087	)		—		—		(4,460,769	)
Realized gain (loss)		—		—			(18,402,047	)		—		—		(18,402,047	)
Change in unrealized appreciation (depreciation)1		—		(690,975	)		41,670,966			—		—		40,979,991
Net purchases (sales)		—		(4,791,037	)		(33,329,576	)		—		—		(38,120,613	)
Net transfers in/out of Level 3		25,154		8,788,008			(4,023,066	)		457,272		14		5,247,382
Balance, as of August 31, 2009	$	156,820	$	13,645,456		$	76,958,994		$	495,915	$	31,175	$	91,288,360

¹ Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations.

The following is a reconciliation of other financial instruments for unobservable inputs (Level 3) used in determining fair value:

	Other Financial Instruments2
Balance, as of February 28, 2009	$	(249,620	)
Accrued discounts/premiums		—
Realized gain (loss)		—
Change in unrealized appreciation (depreciation)		(39,055	)
Net purchases (sales)		—
Net transfers in/out of Level 3		—
Balance, as of August 31, 2009	$	(288,675	)

² Other financial instruments are swaps.

See Notes to Financial Statements.
32	SEMI-ANNUAL REPORT	AUGUST 31, 2009

Schedule of Investments August 31, 2009 (Unaudited)	BlackRock Floating Rate Income Strategies Fund II, Inc. (FRB)
	(Percentages shown are based on Net Assets)

Common Stocks	Shares	Value
Building Products — 0.3%
Masonite Worldwide Holdings (a)	10,036	$	405,956
Chemicals — 0.0%
GEO Specialty Chemicals, Inc. (a)	10,732		4,120
Wellman Holdings, Inc. (a)(b)	181		45
			4,165
Electrical Equipment — 0.1%
Medis Technologies Ltd. (a)	13,053		3,720
SunPower Corp. Class B (a)	5,332		114,051
			117,771
Total Common Stocks — 0.4%			527,892

Corporate Bonds		Par  (000)
Auto Components — 1.6%
The Goodyear Tire & Rubber Co., 5.01%, 12/01/09 (c)	USD	2,000	1,992,500
Building Products — 1.9%
CPG International I, Inc., 7.87%, 7/01/12 (c)		3,000	2,145,000
Momentive Performance Materials, Inc. Series WI, 9.75%, 12/01/14		400	260,000
			2,405,000
Capital Markets — 0.4%
E*Trade Financial Corp. (b):
12.50%, 11/30/17 (d)		15	15,188
4.00%, 8/31/19 (e)(f)		46	78,603
Marsico Parent Co., LLC, 10.63%, 1/15/16		663	278,460
Marsico Parent Holdco, LLC, 12.50%, 7/15/16 (b)(d)		276	66,210
Marsico Parent Superholdco, LLC, 14.50%, 1/15/18 (b)(d)		190	49,521
			487,982
Chemicals — 0.8%
GEO Specialty Chemicals, Inc. (b):
7.50%, 3/31/15 (d)(e)		698	453,469
10.00%, 3/31/15 (c)		691	448,864
Wellman Holdings, Inc., Third Lien Subordinate Note, 5.00%, 1/29/19 (b)		186	92,951
			995,284
Commercial Services & Supplies — 0.3%
Clean Harbors, Inc., 7.63%, 8/15/16 (b)		400	401,000
Construction Materials — 1.0%
Nortek, Inc., 10.00%, 12/01/13		1,310	1,218,300
Containers & Packaging — 1.4%
Clondalkin Acquisition BV, 2.63%, 12/15/13 (b)(c)		1,500	1,200,000
Crown European Holdings SA, 6.25%, 9/01/11	EUR	11	15,770
Owens Brockway Glass Container, Inc., 6.75%, 12/01/14		113	157,138
Packaging Dynamics Finance Corp., 10.00%, 5/01/16 (b)	USD	1,240	396,800
			1,769,708
Diversified Financial Services — 2.1%
FCE Bank Plc, 7.13%, 1/16/12	EUR	2,000	2,594,833
Diversified Telecommunication Services — 1.6%
PAETEC Holding Corp., 8.88%, 6/30/17 (b)	USD	650	619,125
Qwest Corp., 3.88%, 6/15/13 (c)		1,500	1,387,500
			2,006,625

Corporate Bonds		Par  (000)	Value
Food & Staples Retailing — 0.2%
AmeriQual Group LLC, 9.50%, 4/01/12 (b)	USD	250	$	162,500
Duane Reade, Inc., 11.75%, 8/01/15 (b)		100		101,000
				263,500
Food Products — 0.4%
Smithfield Foods, Inc., 10.00%, 7/15/14 (b)		460		469,200
Health Care Equipment & Supplies — 0.5%
DJO Finance LLC, 10.88%, 11/15/14		700		672,000
Hotels, Restaurants & Leisure — 4.2%
American Real Estate Partners LP, 7.13%, 2/15/13		4,000		3,800,000
Harrah’s Operating Co., Inc., 10.00%, 12/15/18 (b)		226		158,200
Little Traverse Bay Bands of Odawa Indians, 10.25%, 2/15/14 (a)(b)(g)		1,565		688,600
Travelport LLC, 4.99%, 9/01/14 (c)		815		590,875
				5,237,675
IT Services — 2.0%
First Data Corp., 9.88%, 9/24/15		3,000		2,565,000
Independent Power Producers & Energy Traders — 1.5%
Calpine Construction Finance Co. LP, 8.00%, 6/01/16 (b)		1,215		1,208,925
Texas Competitive Electric Holdings Co. LLC, 10.25%, 11/01/15 (c)		995		659,188
				1,868,113
Industrial Conglomerates — 0.5%
Sequa Corp. (b):
11.75%, 12/01/15		320		201,600
13.50%, 12/01/15 (d)		850		444,115
				645,715
Machinery — 0.2%
CPM Holdings, Inc., 10.63%, 9/01/14 (b)		300		303,000
Media — 1.1%
CSC Holdings, Inc., 8.50%, 4/15/14 (b)		230		233,450
Local Insight Regatta Holdings, Inc., 11.00%, 12/01/17		748		284,240
TL Acquisitions, Inc., 10.50%, 1/15/15 (b)		1,000		910,000
				1,427,690
Metals & Mining — 0.4%
FMG Finance Property Ltd., 4.36%, 9/01/11 (b)(c)		180		180,000
Ryerson, Inc., 7.86%, 11/01/14 (c)		450		382,500
				562,500
Oil, Gas & Consumable Fuels — 0.7%
SandRidge Energy, Inc., 4.22%, 4/01/14 (c)		1,000		830,368
Paper & Forest Products — 3.1%
NewPage Corp.:
6.73%, 5/01/12 (c)		2,000		855,000
10.00%, 5/01/12		2,000		1,085,000
Verso Paper Holdings LLC Series B, 4.23%, 8/01/14 (c)		3,500		1,960,000
				3,900,000
Pharmaceuticals — 1.3%
Angiotech Pharmaceuticals, Inc., 4.11%, 12/01/13 (c)		500		420,000
Elan Finance Plc, 4.44%, 11/15/11 (c)		1,250		1,175,000
				1,595,000
Real Estate Management & Development — 0.1%
Realogy Corp., 10.50%, 4/15/14		235		139,825

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	33

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
Semiconductors & Semiconductor Equipment — 1.6%
Avago Technologies Finance Property Ltd., 5.86%, 6/01/13 (c)	USD	600	$	564,000
Spansion, Inc., 3.793%, 6/01/13 (a)(b)(g)		1,690		1,499,875
				2,063,875
Specialty Retail — 0.6%
General Nutrition Centers, Inc., 6.40%, 3/15/14 (c)		135		118,800
Michaels Stores, Inc., 11.38%, 11/01/16		750		645,000
				763,800
Wireless Telecommunication Services — 2.3%
Cricket Communications, Inc., 7.75%, 5/15/16 (b)		1,250		1,212,500
Crown Castle International Corp., 9.00%, 1/15/15		135		140,400
Digicel Group Ltd., 9.13%, 1/15/15 (b)(d)		1,249		1,100,681
iPCS, Inc., 2.61%, 5/01/13 (c)		500		410,000
				2,863,581
Total Corporate Bonds — 31.8%				40,042,074
Floating Rate Loan Interests
Aerospace & Defense — 0.8%
Hawker Beechcraft Acquisition Co. LLC:
Letter of Credit Facility Deposit, 0.40%, 3/26/14		72		53,546
Term Loan, 2.26% – 2.60%, 3/26/14		1,214		905,076
IAP Worldwide Services, Inc., Term Loan (First Lien), 7.25%, 12/30/12 (c)		100		72,167
				1,030,789
Airlines — 0.3%
US Airways Group, Inc., Loan, 2.76%, 3/21/14		730		393,105
Auto Components — 3.7%
Allison Transmission, Inc., Term Loan, 3.03%, 8/07/14		2,895		2,471,519
Dana Holding Corp., Term Advance, 7.25%, 1/31/15		1,547		1,184,886
Delphi Corp. (a)(g):
Initial Tranche Term Loan C, 10.50%, 12/31/09		1,134		623,955
Subsequent Tranche Term Loan C, 8.50%, 12/31/09		116		63,545
GPX International Tire Corp.:
Term Loan, 12.00%, 4/11/12 (c)		22		6,626
Tranche B Term Loan, 10.25%, 3/30/12 (a)(g)		1,280		384,097
				4,734,628
Beverages — 0.1%
Culligan International Co., Loan (Second Lien), 5.28%, 4/24/13	EUR	500		179,201
Building Products — 1.1%
Building Materials Corp. of America, Term Loan Advance, 3.06%, 2/22/14	USD	1,476		1,347,192
Capital Markets — 0.4%
RiskMetrics Group Holdings, LLC, Term B Loan (First Lien), 2.60%, 1/10/14		483		469,240
Chemicals — 5.9%
Ashland, Inc., Term Loan Borrowing, 7.65%, 5/13/14		600		610,029
Edwards (Cayman Islands II) Ltd., Term Loan (First Lien), 2.85%, 5/31/14		345		213,974
Huish Detergents Inc., Tranche B Term Loan, 2.02%, 4/26/14		735		700,700
Nalco Co., Term Loan B, 6.50%, 5/06/16		1,275		1,292,531

Floating Rate Loan Interests		Par  (000)	Value
Chemicals (concluded)
PQ Corp. (fka Niagara Acquisition, Inc.), Term Loan (First Lien), 3.52% – 3.75%, 7/31/14	USD	1,980	$	1,631,851
Solutia Inc., Loan, 7.25%, 2/28/14		2,975		2,944,469
				7,393,554
Commercial Services & Supplies — 1.7%
Casella Waste Systems, Inc., Term B Loan, 7.00%, 4/09/14		500		501,250
John Maneely Co., Term Loan, 3.52% – 3.76%, 12/09/13		540		423,093
Synagro Technologies, Inc., Term Loan (First Lien), 2.26% – 2.27%, 4/02/14		980		771,750
West Corp., Term B-2 Loan, 2.64% – 2.65%, 10/24/13		454		430,540
				2,126,633
Computers & Peripherals — 0.7%
Intergraph Corp.:
Initial Term Loan (First Lien), 2.37%, 5/29/14		419		401,943
Second Lien Term Loan, 6.26% – 6.37%, 11/28/14		500		466,250
				868,193
Construction & Engineering — 0.2%
Brand Energy & Infrastructure Services, Inc. (FR Brand Acquisition Corp.), Term B Loan (First Lien), 2.31% – 2.63%, 2/07/14		1274		246,869
Construction Materials — 0.8%
Headwaters Inc., Term Loan B1 (First Lien), 9.75%, 4/30/11		1,012		979,576
Containers & Packaging — 1.6%
Graham Packaging Co., LP:
B Term Loan, 2.56%, 10/07/11		48		46,327
C Term Loan, 6.75%, 4/27/14		477		475,530
Graphic Packaging International, Inc., Incremental Term Loan, 3.08% – 3.35%, 5/16/14		970		946,198
Smurfit-Stone Container Enterprises, Inc., US Term Loan, Debtor in Possession, 10.00%, 1/28/10		578		583,510
				2,051,565
Distributors — 0.4%
Keystone Automotive Operations, Inc., Loan, 3.77% – 5.75%, 1/12/12		946		515,598
Diversified Consumer Services — 1.0%
Coinmach Service Corp., Term Loan, 3.28% – 3.43%, 11/14/14		1,481		1,259,023
Diversified Telecommunication Services — 1.0%
Integra Telecom Holdings, Inc., Term Loan (First Lien), 10.50%, 8/31/13		399		391,378
PAETEC Holding Corp., Incremental Term Loan, 2.76%, 2/28/13		84		79,503
Wind Finance SL SA, Euro Facility (Second Lien), 7.70%, 12/17/14	EUR	525		754,903
				1,225,784
Electrical Equipment — 0.5%
Baldor Electric Co., Term Loan, 5.25%, 1/31/14	USD	500		493,214
Generac Acquisition Corp., Term Loan (First Lien), 2.78%, 11/10/13		188		157,265
				650,479

See Notes to Financial Statements.
34	SEMI-ANNUAL REPORT	AUGUST 31, 2009

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

Floating Rate Loan Interests		Par  (000)	Value
Energy Equipment & Services — 1.2%
Dresser, Inc.:
Term B Loan, 2.68%, 5/04/14	USD	234	$	217,900
Term Loan (Second Lien), 6.02%, 5/04/15		500		415,625
MEG Energy Corp.:
Delayed Draw Term Loan, 2.60%, 4/02/13		493		457,990
Initial Term Loan, 2.60%, 4/03/13		484		449,283
				1,540,798
Food & Staples Retailing — 2.6%
AB Acquisitions UK Topco 2 Ltd. (fka Alliance Boots), Facility B1, 3.53%, 7/09/15	GBP	1,500		2,092,284
DSW Holdings, Inc., Loan, 2.52%, 10/27/12	USD	461		414,787
Rite Aid Corp., Tranche 4 Term Loan, 9.50%, 6/04/15		500		517,500
Wm. Bolthouse Farms, Inc., Term Loan (First Lien), 2.56%, 12/16/12		213		205,138
				3,229,709
Food Products — 3.2%
Dole Food Co., Inc.:
Credit-Linked Deposit, 0.51%, 4/12/13		614		617,988
Tranche B Term Loan, 8.00%, 4/12/13		203		204,124
Solvest, Ltd. (Dole), Tranche C Term Loan, 8.00%, 4/12/13		1,251		1,258,840
Wm. Wrigley Jr. Co., Tranche B Term Loan, 6.50%, 10/06/14		1,999		2,021,850
				4,102,802
Health Care Equipment & Supplies — 1.4%
Biomet, Inc., Dollar Term Loan, 3.26% – 3.61%, 3/25/15		1,225		1,175,362
DJO Finance LLC (ReAble Therapeutics Finance LLC), Term Loan, 3.26% – 3.60%, 5/20/14		493		470,337
Hologic, Inc., Tranche B Term Loan, 3.56%, 3/31/13		141		136,067
				1,781,766
Health Care Providers & Services — 6.8%
CCS Medical, Inc. (Chronic Care), Term Loan (First Lien), 4.35%, 9/30/12 (a)(g)		250		112,812
CHS/Community Health Systems, Inc.:
Delayed Draw Term Loan, 2.51%, 7/25/14		132		122,863
Funded Term Loan, 2.51% – 2.62%, 7/25/14		2,526		2,352,896
DaVita, Inc., Tranche B-1 Term Loan, 1.77% – 2.10%, 10/05/12		550		527,771
Fresenius AG:
Term Loan B1, 6.75%, 7/06/14		835		838,695
Term Loan B2, 6.75%, 7/06/14		505		507,879
HCA Inc.:
Tranche A-1 Term Loan, 2.10%, 11/17/12		1,866		1,742,449
Tranche B-1 Term Loan, 2.85%, 11/18/13		1,549		1,457,627
Vanguard Health Holding Co. II, LLC (Vanguard Health System, Inc.), Replacement Term Loan, 2.51%, 9/23/11		938		912,646
				8,575,638
Hotels, Restaurants & Leisure — 1.9%
Harrah’s Operating Co., Inc.:
Term B-1 Loan, 3.50%, 1/28/15		139		111,857
Term B-2 Loan, 3.50%, 1/28/15		1,488		1,198,571
Term B-3 Loan, 3.50% – 3.60%, 1/28/15		122		98,561
Lake at Las Vegas Joint Venture/LLV-1, LLC (a)(g):
Revolving Loan Credit-Linked Deposit Account, 14.35%, 6/20/12		60		1,204
Term Loan, 14.35% – 15.00%, 6/20/12		608		12,153

Floating Rate Loan Interests		Par  (000)	Value
Hotels, Restaurants & Leisure (concluded)
QCE, LLC (Quiznos), Term Loan (Second Lien), 2.88%, 5/15/13	USD	456	$	339,427
VML US Finance LLC (aka Venetian Macau), Term B:
Delayed Draw Project Loan, 2.85%, 5/25/12		225		205,647
Funded Project Loan, 2.85%, 5/27/13		523		478,621
				2,446,041
Household Durables — 3.1%
American Residential Services LLC, Term Loan (Second Lien), 12.00%, 4/17/15		1,020		889,871
Jarden Corp., Term Loan B3, 3.10%, 1/24/12		723		713,747
Simmons Bedding Co., Tranche D Term Loan, 10.50%, 12/19/11		1,686		1,638,280
Yankee Candle Co., Inc., Term Loan, 2.27%, 2/06/14		710		658,850
				3,900,748
IT Services — 4.1%
Audio Visual Services Group, Inc., Tranche B Term Loan (First Lien), 2.85%, 2/28/14		500		310,000
Ceridian Corp. US, Term Loan, 3.27%, 11/09/14		1,730		1,480,955
First Data Corp.:
Initial Tranche B-1 Term Loan, 3.01% – 3.02%, 9/24/14		420		349,912
Initial Tranche B-2 Term Loan, 3.01% – 3.02%, 9/24/14		1,732		1,441,112
Initial Tranche B-3 Term Loan, 3.01% – 3.02%, 9/24/14		121		100,816
SunGard Data Systems, Inc.:
(Solar Capital Corp.), Additional Term Loan B, 6.75%, 2/28/14		971		965,526
Term Loan B, 3.95% – 4.09%, 2/28/16		602		581,267
				5,229,588
Independent Power Producers & Energy Traders — 1.8%
Texas Competitive Electric Holdings Co., LLC (TXU):
Initial Tranche B-1 Term Loan, 3.78% – 3.79%, 10/10/14		1,357		1,030,977
Initial Tranche B-2 Term Loan, 3.78% – 3.79%, 10/10/14		734		558,139
Initial Tranche B-3 Term Loan, 3.78% – 3.79%, 10/10/14		973		736,032
				2,325,148
Industrial Conglomerates — 0.6%
Sequa Corp., Term Loan, 3.65% – 3.88%, 12/03/14		922		785,907
Insurance — 0.6%
Alliant Holdings I, Inc., Term Loan, 3.60%, 8/21/14		832		765,625
Internet & Catalog Retail — 0.4%
FTD Group, Inc., Tranche B Term Loan, 6.75%, 8/04/14		472		467,344
Leisure Equipment & Products — 2.3%
24 Hour Fitness Worldwide, Inc., Tranche B Term Loan, 2.77% – 3.08%, 6/08/12		1,935		1,683,450
True Temper Sports, Inc., Term Loan, 7.50%, 3/15/11		1,515		1,161,332
				2,844,782
Life Sciences Tools & Services — 1.1%
Life Technologies Corp., Term B Facility, 5.25%, 11/20/15		1,374		1,387,671

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	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		Par  (000)	Value
Machinery — 3.3%
Blount, Inc., Term Loan B, 2.02% – 3.25%, 8/09/10	USD	1,005	$	944,906
Navistar Financial Corp., Tranche A Term loan, 2.31%, 1/19/12		995		964,974
Navistar International Corp.:
Revolving Credit-Linked Deposit, 3.51%, 1/19/12		400		372,000
Term Advance, 3.51%, 1/19/12		1,100		1,023,000
Oshkosh Truck Corp., Term B Loan, 6.60% – 6.64%,12/06/13		816		811,984
				4,116,864
Media — 22.9%
Affinion Group Holdings, Inc., Loan, 8.27%, 3/01/12		314		275,008
AlixPartners, LLP, Tranche C Term Loan, 2.28% – 2.51%, 10/12/13		1,085		1,054,705
Bresnan Communications, LLC, Additional Term Loan B (First Lien), 2.51% – 2.61%, 6/30/13		499		477,865
Catalina Marketing Corp., Initial Term Loan, 3.03%, 10/01/14		860		808,400
Cengage Learning Acquisitions, Inc. (Thomson Learning), Tranche 1 Incremental Term Loan, 7.50%, 7/03/14		1,975		1,896,000
Cequel Communications, LLC:
Term Loan, 2.27% – 4.25%, 11/05/13		1,479		1,396,328
Tranche A Term Loan (Second Lien), 4.79%, 5/05/14		1,000		901,250
Charter Communications, Term Loan B1, 7.94%, 3/25/14 (a)(g)		750		749,625
HMH Publishing Co. Ltd. (fka Education Media):
Mezzanine, 17.50%, 11/14/14		5,090		763,514
Tranche A Term Loan, 5.26%, 6/12/14		1,317		1,018,732
Harland Clarke Holdings Corp. (fka Clarke American Corp.), Tranche B Term Loan, 2.76% – 3.10%, 6/30/14		730		596,319
Hanley-Wood, LLC (FSC Acquisition), Term Loan, 2.52% – 2.54%, 3/08/14		1985		415,342
Insight Midwest Holdings, LLC, B Term Loan, 2.28%, 4/07/14		1,175		1,121,286
Intelsat Subsidiary Holding Co. Ltd., Tranche B Term Loan, 2.78%, 7/13/13		936		892,593
Knology, Inc., Term Loan, 2.51%, 6/30/12		483		458,659
Lamar Advertising Co.:
Term Loan E, 5.50%, 3/31/13		740		728,767
Term Loan Incremental, 5.50%, 9/28/12		49		48,584
Term Loan Incremental, 5.50%, 9/28/13		247		244,715
Lavena Holding 3 GmbH (Prosiebensat.1 Media AG), Facility B1, 3.53%, 6/30/15	EUR	337		272,803
MCC Iowa LLC (Mediacom Broadband Group):
Tranche D-1 Term Loan, 2.01%, 1/31/15	USD	39		36,105
Tranche E Term Loan, 6.50%, 11/30/15		474		474,396
MCNA Cable Holdings LLC (OneLink Communications), Loan, 8.31%, 3/01/13 (d)		1,236		469,840
Mediacom Illinois, LLC (fka Meidacom Communications, LLC), Tranche D Term Loan, 5.75%, 3/31/17		500		498,750
Metro-Goldwyn-Mayer Inc., Tranche B Term Loan, 3.51%, 4/09/12		898		499,487
Multicultural Radio Broadcasting, Inc., Term Loan, 3.03%, 12/18/12		317		221,900
Newsday, LLC, Fixed Rate Term Loan, 9.75%, 8/01/13		1,000		1,017,500

Floating Rate Loan Interests		Par  (000)	Value
Media (concluded)
NextMedia Operating, Inc.:
Delay Draw Term Loan, 8.25%, 11/15/12	USD	280	$	181,817
Initial Term Loan (First Lien), 8.25%, 11/15/12		527		342,506
Nielsen Co., Term Loan B, 4.03%, 5/01/16		3,000		2,811,876
Penton Media, Inc., Term Loan (First Lien), 2.51% – 2.74%, 2/01/13		489		327,463
Sunshine Acquisition Ltd. (aka HIT Entertainment), Term Facility, 2.73%, 6/01/12		750		623,437
TWCC Holding Corp., Term Loan, 7.25%, 9/14/15		1,494		1,502,700
UPC Financing Partnership, Facility U, 4.54%, 12/31/17	EUR	3,000		3,924,506
Virgin Media Investment Holdings Ltd., C Facility, 3.62%, 7/17/13	GBP	300		429,778
Virgin Media NTL, Term Loan A, 4.53%, 3/03/11		500		756,589
World Color Press Inc. and World Color (USA) Corp. (fka Quebecor World Inc.), Advance, 9.00%, 6/30/12		650		645,125
				28,884,270
Multi-Utilities — 0.5%
FirstLight Power Resources, Inc. (fka NE Energy, Inc.):
First Lien Term Loan B, 3.13%, 11/01/13	USD	664		611,659
Synthetic Letter of Credit, 0.48%, 11/01/13		86		78,810
				690,469
Multiline Retail — 0.9%
Dollar General Corp., Tranche B-2 Term Loan, 3.01%, 7/07/14		1,125		1,081,093
Oil, Gas & Consumable Fuels — 1.3%
Big West Oil, LLC, Initial Advance Loan, 4.50%, 5/15/14 (a)(g)		349		321,174
Coffeyville Resources, LLC:
Funded Letter of Credit, 3.15%, 12/28/10		65		63,405
Tranche D Term Loan, 8.75%, 12/30/13		520		507,988
Vulcan Energy Corp. (fka Plains Resources Inc), Term B3 Loan, 5.50%, 8/12/11		750		739,688
				1,632,255
Paper & Forest Products — 2.9%
Georgia-Pacific LLC, Term B Loan, 2.34% – 2.65%, 12/20/12		2,321		2,242,079
NewPage Corp., Term Loan, 4.06%, 12/22/14		1,219		1,128,647
Verso Paper Finance Holdings LLC, Loan, 6.73% – 7.48%, 2/01/13		1,218		243,568
				3,614,294
Pharmaceuticals — 0.9%
Catalent Pharma Solutions, Inc. (fka Cardinal Health 409, Inc.), Euro Term Loan, 2.74%, 4/15/14	EUR	490		586,561
Warner Chilcott Co., Inc., Tranche B Acquisition Date Term Loan, 2.26% – 2.60%, 1/18/12	USD	369		366,804
Warner Chilcott Corp., Tranche C Acquisition Date Term Loan, 2.26%, 1/18/12		129		128,641
				1,082,006
Real Estate Management & Development — 0.3%
Mattamy Funding Partnership, Loan, 2.63%, 4/11/13		484		387,000
Specialty Retail — 0.4%
Adesa, Inc. (KAR Holdings, Inc.), Initial Term Loan, 2.52%, 10/20/13		500		469,166
Wireless Telecommunication Services — 0.4%
Ntelos, Term Loan B Advance, 5.75%, 7/31/15		500		498,750
Total Floating Rate Loan Interests — 85.1%				107,311,163

See Notes to Financial Statements.
36	SEMI-ANNUAL REPORT	AUGUST 31, 2009

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
Diversified Financial Services — 0.1%
J.G. Wentworth LLC Preferred Equity Interests	—	(i)	$	114,284
Total Other Interests — 0.1%				114,284
Preferred Stocks	Shares
Capital Markets — 0.0%
Marsico Parent Superholdco, LLC, 16.75% (b)	44			11,220
Total Preferred Stocks — 0.0%				11,220
Total Long-Term Investments (Cost — $172,951,012) — 117.3%				148,006,633
Short-Term Securities
BlackRock Liquidity Funds, TempFund, 0.22% (j)(k)	2,466,296			2,466,296
Total Short-Term Securities (Cost — $2,466,296) — 2.0%				2,466,296
Options Purchased	Contracts
Over-the-Counter Call Options
Marsico Parent Superholdco LLC, expiring December 2019 at USD 942.86, Broker, Goldman Sachs & Co.	11			11,000
Total Options Purchased (Cost — $10,756) — 0.0%				11,000
Total Investments (Cost — $175,428,064*) — 119.3%				150,483,929
Liabilities in Excess of Other Assets — (19.3)%				(24,286,853	)
Net Assets — 100.0%			$	126,197,076

* The cost and unrealized appreciation (depreciation) of investments as of August 31, 2009, as computed for federal income tax purposes, were as follows:

Aggregate cost	$	175,460,244
Gross unrealized appreciation	$	3,185,591
Gross unrealized depreciation		(28,161,906	)
Net unrealized depreciation	$	(24,976,315	)

(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)	Represents a payment-in-kind security which may pay interest/dividends in additional par/shares.
(e)	Convertible security.
(f)	Represents a zero-coupon bond. Rate shown reflects the current yield as of report date.
(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)	Investments in companies considered to be an affiliate of the Fund, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as follows:

Affiliate	Net Activity			Income
BlackRock Liquidity Funds, TempFund	$	2,466,296		$	5,138
BlackRock Liquidity Series, LLC Cash Sweep Series	$	(4,108,178	)	$	790

(k)	Represents the current yield as of report date.
•	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 ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry subclassifications for reporting ease.
•	Foreign currency exchange contracts as of August 31,2009 were as follows:

Currency Purchased		Currency Sold		Counterparty	Settlement Date	Unrealized Appreciation (Depreciation)
USD	237,098	EUR	170,000	Citibank NA	9/15/09	$	(6,621	)
USD	7,210,302	EUR	5,164,000	Deutsche Bank AG	9/16/09		(193,005	)
USD	503,681	EUR	355,000	Citibank NA	9/16/09		(5,260	)
USD	311,727	EUR	219,000	Royal Bank of Scotland	9/16/09		(2,240	)
USD	2,821,964	GBP	1,726,500	Citibank NA	10/28/09		11,537
USD	729,311	GBP	440,000	Deutsche Bank AG	10/28/09		13,071
Total						$	(182,518	)

• Credit default swaps on single-name issues — buy protection outstanding as of August 31, 2009 were as follows:

Issuer	Pay Fixed Rate	Counterparty	Expiration	Notional Amount (000)		Unrealized Depreciation
First Data Corp.	5.00%	JPMorgan Chase Bank NA	December 2013	USD	1,500	$	(136,946	)
First Data Corp.	5.00%	JPMorgan Chase Bank NA	December 2013	USD	1,500		(115,142	)
Masco Corp.	5.30%	JPMorgan Chase Bank NA	March 2014	USD	500		(55,080	)
Host Hotels & Resorts LP	5.00%	Goldman Sachs Bank USA	March 2014	USD	1,225		(170,487	)
Mohawk Industries, Inc.	4.45%	JPMorgan Chase Bank NA	March 2014	USD	500		(49,616	)
Total						$	(527,271	)

• Credit default swaps on single-name issues — sold protection outstanding as of August 31, 2009 were as follows:

Issuer1	Receive Fixed Rate	Counterparty	Expiration	Notional Amount (000)2		Unrealized Depreciation
Ford Motor Co.	3.80%	UBS AG	March 2010	USD	5,000	$	(160,635	)

1	Using Standard and Poor’s ratings of the issuer.
2	The maximum potential amount the Fund may pay should a negative credit event take place as defined under the terms of the agreement.

• Currency Abbreviations:

EUR	Euro
GBP	British Pound
USD	US Dollar

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	37

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

• Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of fair value measurements. Various inputs are used in determining the fair value of investments, which are as follows:

• Level 1 — price quotations in active markets/exchanges for identical securities

• 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)

The inputs or methodology 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 table summarizes the inputs used as of August 31, 2009 in determining the fair valuation of the Fund’s investments:

Valuation Inputs	Investments in Securities
	Assets
Level 1
Long-Term Investments:
Common Stocks	$	523,727
Short-Term Securities		2,466,296
Total Level 1		2,990,023
Level 2
Long-Term Investments:
Corporate Bonds		39,046,790
Floating Rate Loan Interests		79,615,012
Preferred Stocks		11,220
Total Level 2		118,673,022
Level 3
Long-Term Investments:
Common Stocks		4,165
Corporate Bonds		995,284
Floating Rate Loan Interests		27,696,151
Other Interests		114,284
Total Level 3		28,809,884
Total	$	150,472,929

Valuation Inputs	Other Financial Instruments1
	Assets		Liabilities
Level 1		—		—
Level 2	$	35,608	$	(895,032	)
Level 3		—		(34,095	)
Total	$	35,608	$	(929,127	)

¹ Other financial instruments are swaps, foreign currency exchange contracts, unfunded loan commitments and options purchased. Swaps and foreign currency exchange contracts are shown at the unrealized appreciation/depreciation on the instrument and options purchased are shown at market value.

The following is a reconciliation of investments for unobservable inputs (Level 3) used in determining fair value:

	Investment in Securities
	Common Stocks		Corporate Bonds			Floating Rate Loan Interests			Other Interests		Total
Balance as of February 28, 2009	$	4,165	$	1,437,808		$	35,230,878			—	$	36,672,851
Accrued discounts/premiums		—		—			—			—		—
Realized gain (loss)		—		(238,708	)		(5,476,678	)		—		(5,715,386	)
Change in unrealized appreciation (depreciation)2		—		164,301			13,598,153			—		13,762,454
Net purchases (sales)		—		(816,981	)		(15,649,956	)		—		(16,466,937	)
Net transfers in/out of Level 3		—		448,864			(6,246	)	$	114,284		556,902
Balance as of August 31, 2009	$	4,165	$	995,284		$	27,696,151		$	114,284	$	28,809,884

² Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations.

The following is a reconciliation of other financial instruments for unobservable inputs (Level 3) used in determining fair value:

	Other Financial Instruments3
Balance, as of August 31, 2008		—
Accrued discounts/premiums		—
Realized gain (loss)		—
Change in unrealized appreciation (depreciation)		—
Net purchases (sales)		—
Net transfers in/out of Level 3	$	(34,095	)
Balance, as of August 31, 2009	$	(34,095	)

³ Other financial instruments are unfunded loan commitments.

See Notes to Financial Statements.
38	SEMI-ANNUAL REPORT	AUGUST 31, 2009

Schedule of Investments August 31, 2009 (Unaudited) BlackRock Senior High Income Fund, Inc. (ARK) (Percentages shown are based on Net Assets)

Common Stocks (a)	Par (000)		Value
Building Products — 0.8%
Masonite Worldwide Holdings	USD	40,055	$	1,620,225
Capital Markets — 0.5%
E*Trade Financial Corp.		476,000		837,760
Chemicals — 0.0%
GEO Specialty Chemicals, Inc. (b)		142,466		54,693
Wellman Holdings, Inc.		5,131		1,283
				55,976
Containers & Packaging — 0.1%
Smurfit Kappa Plc		18,171		143,194
Hotels, Restaurants & Leisure — 0.0%
Lodgian, Inc.		41,866		58,194
Metals & Mining — 0.0%
Euramax International		935		10,050
Paper & Forest Products — 0.6%
Ainsworth Lumber Co. Ltd.		375,634		542,134
Ainsworth Lumber Co. Ltd. (b)		421,556		606,472
				1,148,606
Total Common Stocks — 2.0%				3,874,005
Corporate Bonds
Aerospace & Defense — 2.4%
Moog, Inc., 7.25%, 6/15/18		5,000		4,750,000
Airlines — 0.3%
United Air Lines, Inc., 12.75%, 7/15/12		600		576,000
Auto Components — 2.3%
The Goodyear Tire & Rubber Co., 8.63%, 12/01/11		4,000		4,040,000
Lear Corp., 8.75%, 12/01/16 (a)(c)		1,015		548,100
Venture Holdings Co. LLC (a)(c):
12.00%, 6/01/09		700		—
Series B, 9.50%, 7/01/05 (d)		3,325		333
				4,588,433
Building Products — 2.5%
CPG International I, Inc.:
7.87%, 7/01/12 (e)		3,500		2,502,500
10.50%, 7/01/13		1,500		1,072,500
Momentive Performance Materials, Inc. Series WI, 9.75%, 12/01/14		1,175		763,750
Ply Gem Industries, Inc., 11.75%, 6/15/13		725		605,375
				4,944,125
Chemicals — 3.1%
American Pacific Corp., 9.00%, 2/01/15		610		550,525
GEO Specialty Chemicals, Inc. (b):
7.50%, 3/31/15 (f)(g)		1,857		1,206,895
10.00%, 3/31/15		1,839		1,195,168
Wellman Holdings, Inc. (f):
Second Lien Subordinate Note, 10.00%, 1/29/19 (b)		2,383		2,383,000
Third Lien Subordinate Note, 5.00%, 1/29/19		1,599		799,584
				6,135,172
Commercial Services & Supplies — 0.7%
Clean Harbors, Inc., 7.63%, 8/15/16 (b)		700		701,750
RSC Equipment Rental, Inc., 10.00%, 7/15/17 (b)		550		574,750
				1,276,500
Construction Materials — 1.2%
Nortek, Inc., 10.00%, 12/01/13		2,570		2,390,100
Consumer Finance — 0.6%
Ford Motor Credit Co. LLC, 3.26%, 1/13/12 (e)		1,340		1,115,550
Corporate Bonds		Par (000)	Value
Containers & Packaging — 3.2%
Berry Plastics Holding Corp., 4.50%, 9/15/14 (e)	USD	100	$	72,000
Clondalkin Acquisition BV, 2.63%, 12/15/13 (b)(e)		2,000		1,600,000
Crown Americas LLC, 7.63%, 5/15/17 (b)		400		397,000
Graphic Packaging International, Inc., 9.50%, 6/15/17 (b)		815		835,375
Packaging Dynamics Finance Corp., 10.00%, 5/01/16 (b)		4,285		1,371,200
Smurfit Kappa Funding Plc, 7.75%, 4/01/15		1,050		850,500
Solo Cup Co., 10.50%, 11/01/13 (b)		250		262,500
Wise Metals Group LLC, 10.25%, 5/15/12		2,000		980,000
				6,368,575
Diversified Financial Services — 0.3%
Highland Legacy Ltd., 6.73%, 6/01/11 (b)(c)		4,000		600,000
Diversified Telecommunication Services — 2.5%
Nordic Telephone Co. Holdings ApS, 8.88%, 5/01/16 (b)		1,200		1,218,000
PAETEC Holding Corp., 8.88%, 6/30/17 (b)		600		571,500
Qwest Corp., 8.38%, 5/01/16 (b)		3,000		3,030,000
				4,819,500
Electric Utilities — 0.4%
NSG Holdings LLC, 7.75%, 12/15/25 (b)		1,000		835,000
Food & Staples Retailing — 0.1%
Duane Reade, Inc., 11.75%, 8/01/15 (b)		155		156,550
Food Products — 0.7%
Smithfield Foods, Inc., 10.00%, 7/15/14 (b)		750		765,000
Tyson Foods, Inc., 10.50%, 3/01/14		630		702,450
				1,467,450
Health Care Providers & Services — 1.0%
Community Health Systems, Inc. Series WI, 8.88%, 7/15/15		1,880		1,887,050
Hotels, Restaurants & Leisure — 3.7%
American Real Estate Partners LP, 7.13%, 2/15/13		3,000		2,850,000
Harrah’s Operating Co., Inc., 10.00%, 12/15/18 (b)		2,654		1,857,800
Little Traverse Bay Bands of Odawa Indians, 10.25%, 2/15/14 (a)(b)(c)		1,210		532,400
MGM Mirage, 11.13%, 11/15/17 (b)		750		811,875
Shingle Springs Tribal Gaming Authority, 9.38%, 6/15/15 (b)		190		134,900
Snoqualmie Entertainment Authority, 4.68%, 2/01/14 (b)(e)		500		245,000
Tropicana Entertainment LLC Series WI, 9.63%, 12/15/14 (a)(c)		220		138
Tunica-Biloxi Gaming Authority, 9.00%, 11/15/15 (b)		845		752,050
				7,184,163
Household Durables — 0.1%
KB Home, 6.38%, 8/15/11		106		104,940
IT Services — 2.4%
First Data Corp., 9.88%, 9/24/15		5,480		4,685,400
Independent Power Producers & Energy Traders — 3.1%
AES Eastern Energy LP Series 99-B, 9.67%, 1/02/29		570		490,200
Calpine Construction Finance Co. LP, 8.00%, 6/01/16 (b)		750		746,250
Dynegy Holdings, Inc., 8.38%, 5/01/16		1,260		1,020,600
Energy Future Holdings Corp., 11.25%, 11/01/17 (g)		1,590		910,113
NRG Energy, Inc., 8.50%, 6/15/19		500		486,250
Texas Competitive Electric Holdings Co. LLC:
10.25%, 11/01/15		2,575		1,705,937
10.50%, 11/01/16 (g)		1,267		703,342
				6,062,692

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	39

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

Corporate Bonds	Par (000)		Value
Industrial Conglomerates — 1.8%
Sequa Corp. (b):
11.75%, 12/01/15	USD	2,550	$	1,606,500
13.50%, 12/01/15 (g)		3,837		2,004,689
				3,611,189
Machinery — 1.6%
CPM Holdings, Inc., 10.63%, 9/01/14 (b)		400		404,000
ESCO Corp., 4.50%, 12/15/13 (b)(e)		1,540		1,374,450
RBS Global, Inc., 8.88%, 9/01/16		835		670,087
Titan International, Inc., 8.00%, 1/15/12		770		741,125
				3,189,662
Marine — 0.1%
Navios Maritime Holdings, Inc., 9.50%, 12/15/14		324		283,500
Media — 3.8%
Affinion Group, Inc., 10.13%, 10/15/13		515		511,781
CSC Holdings, Inc., 8.50%, 4/15/14 (b)		390		395,850
Charter Communications Holdings LLC (a)(c):
10.00%, 4/01/09		1,121		1,401
11.13%, 1/15/11		1,319		65,950
10.00%, 5/15/11		660		825
Intelstat Corp., 9.25%, 8/15/14		3,500		3,552,500
Local Insight Regatta Holdings, Inc., 11.00%, 12/01/17		1,244		472,720
Nielsen Finance LLC, 11.63%, 2/01/14		2,500		2,481,250
				7,482,277
Metals & Mining — 1.8%
Aleris International, Inc., 9.00%, 12/15/14 (a)(c)		840		2,100
RathGibson, Inc., 11.25%, 2/15/14 (a)(c)		2,175		783,000
Ryerson, Inc., 7.86%, 11/01/14 (e)		1,800		1,530,000
Teck Resources Ltd., 10.75%, 5/15/19		1,075		1,224,156
				3,539,256
Oil, Gas & Consumable Fuels — 6.5%
Atlas Energy Operating Co. LLC, 12.13%, 8/01/17		825		870,375
Atlas Energy Resources LLC, 10.75%, 2/01/18 (b)		300		303,000
Chesapeake Energy Corp.:
9.50%, 2/15/15		935		953,700
6.875%, 1/15/16		4,000		3,670,000
Denbury Resources, Inc., 9.75%, 3/01/16		1,895		1,994,487
Forest Oil Corp.:
8.50%, 2/15/14 (b)		1,285		1,291,425
7.25%, 6/15/19		400		376,000
Sabine Pass LNG LP, 7.50%, 11/30/16		2,985		2,417,850
SandRidge Energy, Inc., 4.22%, 4/01/14 (e)		1,000		830,368
				12,707,205
Paper & Forest Products — 3.9%
Ainsworth Lumber Co. Ltd., 11.00%, 7/29/15 (b)(g)		3,241		1,284,737
Clearwater Paper Corp., 10.63%, 6/15/16 (b)		365		391,006
Georgia-Pacific LLC, 8.25%, 5/01/16 (b)		1,630		1,646,300
NewPage Corp., 6.73%, 5/01/12 (e)		5,175		2,212,312
Verso Paper Holdings LLC:
11.50%, 7/01/14 (b)		315		308,700
Series B, 4.23%, 8/01/14 (e)		3,300		1,848,000
				7,691,055
Pharmaceuticals — 2.0%
Angiotech Pharmaceuticals, Inc., 4.11%, 12/01/13 (e)		2,690		2,259,600
Elan Finance Plc, 7.75%, 11/15/11		1,650		1,600,500
				3,860,100

Corporate Bonds		Par (000)	Value
Semiconductors & Semiconductor Equipment — 1.4%
Avago Technologies Finance Pte. Ltd., 5.86%, 6/01/13 (e)	USD	766	$	720,040
Spansion, Inc., 3.79%, 6/01/13 (a)(b)(c)		2,180		1,934,750
				2,654,790
Specialty Retail — 0.4%
United Auto Group, Inc., 7.75%, 12/15/16		915		805,200
Textiles, Apparel & Luxury Goods — 1.1%
Quiksilver, Inc., 6.88%, 4/15/15		3,525		2,238,375
Wireless Telecommunication Services — 3.4%
Cricket Communications, Inc.:
9.38%, 11/01/14		260		245,050
7.75%, 5/15/16 (b)		1,250		1,212,500
Crown Castle International Corp., 9.00%, 1/15/15		225		234,000
Digicel Group Ltd., 12.00%, 4/01/14 (b)		800		848,000
MetroPCS Wireless, Inc., 9.25%, 11/01/14		2,000		1,962,500
Nextel Communications, Inc.:
Series E, 6.88%, 10/31/13		690		617,550
Series F, 5.95%, 3/15/14		100		84,000
Orascom Telecom Finance SCA, 7.88%, 2/08/14 (b)		395		355,500
Sprint Capital Corp.:
7.63%, 1/30/11		1,040		1,041,300
6.88%, 11/15/28		170		123,675
				6,724,075
Total Corporate Bonds — 58.4%				114,733,884

Floating Rate Loan Interests
Aerospace & Defense — 0.9%
Hawker Beechcraft Acquisition Co., LLC:
Letter of Credit Facility Deposit, 0.40% – 2.10%, 3/26/14	121	90,520
Term Loan, 2.26% – 2.60%, 3/26/14	2,051	1,528,693
IAP Worldwide Services, Inc. Term Loan (First Lien), 9.25%, 12/30/12 (g)	150	108,250
		1,727,463
Airlines — 0.5%
Delta Air Lines, Inc. Credit-Linked Deposit Loan, 0.11% – 2.28%, 4/30/12	1,225	1,093,823
Auto Components — 3.1%
Allison Transmission, Inc. Term Loan, 3.03%, 8/07/14	5,067	4,325,547
Dana Holding Corp., Term Advance, 7.25%, 1/31/15	1,507	1,153,947
The Goodyear Tire & Rubber Co. Loan (Second Lien), 2.02%, 4/30/14	500	461,250
Intermet Corp.:
First Lien Credit Facility, 5.60%, 11/08/10 (a)(c)(g)	144	28,723
Letter of Credit, 5.12%, 11/09/10 (a)(c)	289	106,902
Letter of Credit Term Loan, 11.25%, 11/08/10 (g)	184	68,057
Synthetic Letter of Credit, 5.60%, 11/09/10 (g)	32	11,961
		6,156,387
Building Products — 0.6%
Building Materials Corp. of America, Term Loan Advance, 3.06%, 2/22/14	1,229	1,121,614
Chemicals — 3.6%
Ashland Inc., Term Loan B, 7.65%, 5/13/14	444	451,874
Nalco Co., Term Loan, 6.50%, 5/06/16	1,025	1,039,094
PQ Corp. (fka Niagara Acquisition, Inc.) Term Loan (First Lien), 3.52% – 3.75%, 7/31/14	4,950	4,079,627
Solutia Inc., Loan, 7.25%, 2/28/14	1,485	1,469,767
		7,040,362

See Notes to Financial Statements.
40	SEMI-ANNUAL REPORT	AUGUST 31, 2009

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

Floating Rate Loan Interests	Par (000)		Value
Commercial Services & Supplies — 0.5%
Casella Waste Systems, Inc., Term Loan B, 7.00%, 12/21/12	USD	220	$	220,550
John Maneely Co., Term Loan, 3.52% – 3.76%, 12/09/13		868		680,419
				900,969
Construction & Engineering — 0.2%
Brand Energy & Infrastructure Services, Inc. (FR Brand Acquisition Corp.), Synthetic Letter of Credit Term Loan (First Lien), 2.13%, 2/07/14		500		450,000
Construction Materials — 0.4%
Headwaters Inc., Term Loan B1 (First Lien), 9.75%, 4/30/11		735		710,868
Containers & Packaging — 0.6%
Graham Packaging Co., L.P. Term Loan B, 2.56%, 10/07/11		598		582,011
Smurfit-Stone Container Enterprises, Inc., US Term Loan, Debtor in Possession, 10.00%, 7/28/10		582		587,518
				1,169,529
Distributors — 0.4%
Keystone Automotive Operations, Inc., Loan, 3.77% – 5.75%, 1/12/12		1,419		773,397
Diversified Consumer Services — 0.8%
Coinmach Corp., Term Loan, 3.28% – 3.43%, 11/14/14		1,975		1,678,697
Diversified Telecommunication Services — 0.3%
Integra Telecom Holdings, Inc., Term Loan (First Lien), 10.50%, 8/31/13		375		367,127
PAETEC Holding Corp., Incremental Term Loan, 2.76%, 2/28/13		148		139,130
				506,257
Electrical Equipment — 0.2%
Generac Acquisition Corp., Term Loan (First Lien), 2.78%, 11/10/13		554		464,084
Energy Equipment & Services — 1.0%
Dresser, Inc.:
Term B Loan, 2.68%, 5/04/14		206		191,867
Term Loan (Second Lien), 6.02%, 5/04/15		1,000		831,250
MEG Energy Corp.:
Delayed Draw Term Loan, 2.60%, 4/02/13		493		457,990
Initial Term Loan, 2.60%, 4/03/13		484		449,283
				1,930,390
Food & Staples Retailing — 0.6%
McJunkin Corp., Term Loan, 3.51%, 1/31/14		349		332,522
Rite Aid Corp., Tranche 4 Term Loan, 9.50%, 6/04/15		500		517,500
Wm. Bolthouse Farms, Inc., Term Loan (Second Lien), 5.76%, 12/16/13		375		340,938
				1,190,960
Food Products — 1.3%
Dole Food Co. Inc., Credit Linked Deposit, 7.37%, 4/12/13		828		833,057
Solvest, Ltd. (Dole) Tranche C Term Loan, 8.00%, 4/12/13		703		707,781
Wm. Wrigley Jr. Co., Tranche B Term Loan, 6.50%, 10/06/14		987		998,444
				2,539,282
Health Care Equipment & Supplies — 0.5%
DJO Finance LLC (ReAble Therapeutics Finance LLC), Term Loan, 3.26% – 3.60%, 5/20/14		985		940,675
Floating Rate Loan Interests		Par (000)	Value
Health Care Providers & Services — 3.0%
CCS Medical, Inc. (Chronic Care) Term Loan (First Lien), 4.35%, 9/30/12 (a)(c)	USD	250	$	112,813
CHS/Community Health Systems, Inc.:
Delayed Draw Term Loan, 2.51%, 7/25/14		73		68,329
Funded Term Loan, 2.51% – 2.62%, 7/25/14		1,397		1,301,069
DaVita Inc., Tranche B-1, Term Loan, 1.77% – 2.10%, 10/05/12		550		527,771
Fresenius AG:
Term Loan B1, 6.75%, 7/06/14		645		648,245
Term Loan B2, 6.75%, 7/06/14		347		349,217
HCA Inc., Tranche A-1 Term Loan, 2.10%, 11/17/12		3,066		2,862,889
				5,870,333
Hotels, Restaurants & Leisure — 1.3%
Harrah’s Operating Co., Inc., Term B-2 Loan, 3.50%, 1/28/15		875		705,042
QCE, LLC (Quiznos), Term Loan (First Lien), 2.88%, 11/05/13		970		722,650
VML US Finance LLC (aka Venetian Macau):
New Project Term Loan, 6.10%, 5/25/13		998		912,356
Term B Delayed Draw Loan Project, 6.10%, 5/25/12		249		228,089
				2,568,137
IT Services — 2.4%
Audio Visual Services Group, Inc.:
Second Lien, 7.10%, 8/28/14 (e)		520		41,592
Term Loan B, 2.85%, 2/28/14		1,000		620,000
Ceridian Corp., US Term Loan, 3.27%, 11/09/14		1,483		1,269,390
First Data Corp.:
Initial Tranche B-2 Term Loan, 3.01% – 3.02%, 9/24/14		1,227		1,021,356
Initial Tranche B-3 Term Loan, 3.01% – 3.02%, 9/24/14		391		325,086
RedPrairie Corp., Term Loan:
B, 3.44% – 5.25%, 7/20/12		605		523,238
C, 3.69%, 7/20/12		260		224,516
SunGard Data Systems, Inc. (Solar Capital Corp.), New US Term Loan, 6.75%, 2/28/14		750		745,580
				4,770,758
Independent Power Producers & Energy Traders — 0.3%
Texas Competitive Electric Holdings Co., LLC (TXU) Initial Tranche:
Term Loan B-2, 3.78% – 3.79%, 10/10/14		486		369,579
Term Loan B-3, 3.78% – 3.79%, 10/10/14		228		172,742
				542,321
Industrial Conglomerates — 0.2%
Sequa Corp., Term Loan, 3.65% – 3.88%, 12/03/14		450		383,625
Insurance — 0.1%
Alliant Holdings I, Inc., Term Loan, 3.60%, 8/21/14		143		131,580
Internet & Catalog Retail — 0.4%
FTD Group, Inc., Tranche B Term Loan, 6.75%, 8/04/14		708		701,016
Leisure Equipment & Products — 0.8%
Fender Musical Instruments Corp.:
Delayed Draw Term Loan, 2.54%, 6/09/14		661		528,441
Term Initial, 2.85%, 6/09/14		1,308		1,046,206
				1,574,647
Life Sciences Tools & Services — 0.3%
Life Technologies Corp., Term B Facility, 5.25%, 11/20/15		597		603,335

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	41

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

Floating Rate Loan Interests	Par (000)		Value
Machinery — 2.8%
LN Acquisition Corp., (Lincoln Industrial) Initial Term Loan (Second Lien), 6.07%, 1/09/15	USD	1,000	$	740,000
Navistar International Corp.:
Revolving Credit Linked Deposit, 3.36% – 3.51%, 1/19/12		1,067		992,000
Term Advance, 3.51%, 1/19/12		2,933		2,728,000
Oshkosh Truck Corp., Term B Loan, 6.60% – 6.64%, 12/06/13		1,032		1,026,883
				5,486,883
Media — 12.8%
Affinion Group Holdings, Inc., Loan, 8.27%, 3/01/12		2,095		1,833,388
Cengage Learning Acquisitions, Inc. (Thomson Learning) Tranche 1 Incremental Term Loan, 7.50%, 7/03/14		4,100		3,936,000
Cequel Communications, LLC:
Second Lien Tranche A Term Loan, 6.27% – 6.28%, 5/05/14		4,243		3,914,428
Term Loan, 2.27% – 4.25%, 11/05/13		1,614		1,524,463
Charter Communications, Term Loan B1, 7.94%, 3/25/14 (a)(c)		1,000		999,500
Ellis Communications KDOC, LLC Loan, 10.00%, 12/30/11		3,879		1,086,013
HMH Publishing Co. Ltd., (fka Education Media) Tranche A Term Loan, 5.26%, 6/12/14		4,663		3,607,811
Hanley-Wood, LLC (FSC Acquisition), Term Loan, 2.52% – 2.54%, 3/08/14		985		415,342
Lamar Media Corp., Term Loan, 5.50%, 9/28/12		750		738,750
MCC Iowa LLC (Mediacom Broadband Group) Tranche D-1 Term Loan, 2.01%, 1/31/15		269		250,906
Mediacom Illinois, LLC (fka Mediacom Communications, LLC), Tranche D Term Loan, 5.50%, 3/31/17		500		498,750
Newsday, LLC Fixed Rate Term Loan, 9.75%, 8/01/13		3,250		3,306,875
Penton Media, Inc., Term Loan (First Lien), 2.51% – 2.74%, 2/01/13		733		491,194
Quebecor Media Exit Term Loan, 9.00%, 6/30/12		500		496,250
Sunshine Acquisition Ltd. (aka HIT Entertainment) Term Facility, 2.73%, 7/31/14		500		415,625
United Pan Europe Communications Term Loan, 3.76%, 12/31/16		1,750		1,719,375
				25,234,670
Metals & Mining — 1.3%
Euramax International Plc, Domestic Loan (Second Lien):
10.00%, 6/29/13		865		372,080
14.00%, 6/29/13 (g)		827		355,490
RathGibson, Inc., Debtor in Possession Loan, 10.50% – 10.75%, 2/10/10		1,796		1,795,560
				2,523,130
Multi-Utilities — 0.4%
FirstLight Power Resources, Inc. (fka NE Energy, Inc.):
First Lien Term Loan B, 3.13%, 11/01/13		797		733,991
Synthetic Letter of Credit, 3.15%, 11/01/13		103		94,572
				828,563
Multiline Retail — 0.4%
Dollar General Corp. Tranche B-2 Term Loan, 3.01%, 7/07/14		750		720,729

Floating Rate Loan Interests		Par (000)	Value
Oil, Gas & Consumable Fuels — 1.3%
Big West Oil, LLC (a)(c):
Delayed Advance Loan, 4.50%, 5/15/14	USD	547	$	503,198
Initial Advance Loan, 4.50%, 5/15/14		434		398,977
ScorpionDrilling Ltd. Loan (Second Lien), 8.10%, 5/08/14		2,000		1,660,000
				2,562,175
Paper & Forest Products — 0.2%
Georgia-Pacific LLC, Term B Loan, 2.34% – 2.65%, 12/20/12		517		499,164
Pharmaceuticals — 0.2%
Warner Chilcott Co., Inc.:
Tranche B Acquisition Date Term Loan, 2.26% – 2.60%, 1/18/12		369		366,804
Tranche C Acquisition Date Term Loan, 2.26%, 1/18/12		129		128,641
				495,445
Real Estate Management & Development — 1.1%
Realogy Corp., Synthetic Letter of Credit, 4.24%, 10/10/13		2,940		2,240,700
Specialty Retail — 0.4%
Adesa, Inc. (KAR Holdings, Inc.), Initial Term Loan, 2.52%, 10/20/13		750		703,750
Wireless Telecommunication Services — 0.5%
Digicel International Finance Ltd., Tranche A, 3.13%, 3/01/12		1,000		950,000
Total Floating Rate Loan Interests — 45.7%				89,785,718

Other Interests (h)	Beneficial Interest (000)
Diversified Financial Services — 0.2%
J.G. Wentworth LLC Preferred Equity Interests	—	(i)	365,704
Media — 0.0%
Adelphia Preferred Escrow	3		—
Adelphia Recovery Trust Series ACC-6B INT	250		25
			25
Total Other Interests — 0.2%			365,729
Total Long-Term Investments (Cost — $268,836,015) — 106.3%			208,759,336

Short-Term Securities	Shares
BlackRock Liquidity Funds, TempFund, 0.22% (j)(k)	1,492,725		1,492,725
Total Short-Term Securities (Cost — $1,492,725) — 0.8%			1,492,725
Total Investments (Cost — $270,328,740*) — 107.1%			210,252,061
Liabilities in Excess of Other Assets — (7.1)%			(13,938,584	)
Net Assets — 100.0%		$	196,313,477

* The cost and unrealized appreciation (depreciation) of investments as of August 31, 2009, as computed for federal income tax purposes, were as follows:

Aggregate cost	$	271,030,531
Gross unrealized appreciation	$	6,526,537
Gross unrealized depreciation		(67,305,007	)
Net unrealized depreciation	$	(60,778,470	)

See Notes to Financial Statements.
42	SEMI-ANNUAL REPORT	AUGUST 31, 2009

Schedule of Investments (continued) BlackRock Senior High Income Fund, Inc. (ARK)

(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 of the security upon maturity.
(e)	Variable rate security. Rate shown is as of report date.
(f)	Convertible security.
(g)	Represents a payment-in-kind security which may pay interest/dividends in additional par/shares.
(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)	Investments in companies considered to be an affiliate of the Fund, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as follows:

Affiliate	Net Activity			Income
BlackRock Liquidity Funds, TempFund	$	1,492,725		$	4,710
BlackRock Liquidity Series, LLC Cash Sweep Series	$	(4,346,896	)	$	1,683

(k)	Represents the current yield as of report date.
•	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 ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications for reporting ease.
•	Foreign currency exchange contracts as of August 31,2009 were as follows:

Currency Purchased	Currency Sold	Counterparty	Settlement Date	Unrealized Appreciation
USD 552,552	CAD     600,000	Barclays Bank Plc	10/28/09	$4,432

• Credit default swaps on single-name issues — buy protection outstanding as of August 31, 2009 were as follows:

Issuer	Pay Fixed Rate	Counterparty	Expiration	Notional Amount (000)		Unrealized Depreciation
First Data Corp.	5.00%	JPMorgan Chase Bank NA	December 2013	USD	5,000	$	(420,147	)
Masco Corp.	5.30%	JPMorgan Chase Bank NA	March 2014	USD	1,000		(110,160	)
Host Hotels & Resorts LP	5.00%	Goldman Sachs Bank USA	March 2014	USD	2,500		(347,933	)
Mohawk Industries,Inc.	4.45%	JPMorgan Chase Bank NA	March 2014	USD	1,000		(99,231	)
Lennar Corp.	5.75%	JPMorgan Chase Bank NA	June 2014	USD	550		(66,170	)
Total						$	(1,043,641	)

• Credit default swaps on single-name issues — sold protection outstanding as of August 31, 2009 were as follows:

Issuer	Receive Fixed Rate	Counterparty	Expiration	Rating1	Notional Amount (000)2	Unrealized Depreciation
Ford Motor Co.	2.05%	Deutsche Bank AG	March 2010	CCC	USD 5,000	$(123,489)

1	Using Standard and Poor’s ratings of the issuer.
2	The maximum potential amount the Fund may pay should a negative credit event take place as defined under the terms of the agreement. See Note 2 of the Notes to Financial Statements.

•	Currency Abbreviations:
	CAD     Canadian Dollar USD     US Dollar
•	Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, “Fair Value Measurements” clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of fair value measurements. Various inputs are used in determining the fair value of investments, which are as follows:
	•	Level 1 — price quotations in active markets/exchanges for identical securities
	•	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)
	The inputs or methodology 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, 2009	43

Schedule of Investments (concluded) BlackRock Senior High Income Fund, Inc. (ARK)

The following table summarizes the inputs used as of August 31, 2009 in determining the fair valuation of the Fund’s investments:

Valuation Inputs	Investments in Securities
	Assets
Level 1
Long-Term Investments:
Common Stocks	$	3,143,313
Short-Term Securities		1,492,725
Total Level 1		4,636,038
Level 2
Long-Term Investments:
Corporate Bonds		108,482,954
Floating Rate Loan Interests		53,344,126
Common Stocks		664,666
Total Level 2		162,491,746
Level 3
Long-Term Investments:
Corporate Bonds		6,250,930
Floating Rate Loan Interests		36,441,592
Common Stocks		66,026
Other Interests		365,729
Total Level 3		43,124,277
Total	$	210,252,061

Valuation Inputs	Other Financial Instruments1
	Assets		Liabilities
Level 1		—		—
Level 2	$	4,432	$	(1,167,130	)
Level 3		—		(4,099	)
Total	$	4,432	$	(1,171,229	)

¹ Other financial instruments are foreign currency exchange contracts and swaps which are shown at the unrealized appreciation/depreciation on the instrument.

The following is a reconciliation of investments for unobservable inputs (Level 3) used in determining fair value:

	Investment in Securities
	Corporate Bonds			Floating Rate Loan Interests			Common Stocks		Other Interests		Total
Balance, as of February 28, 2009	$	8,229,614		$	44,351,082		$	55,976	$	25	$	52,636,697
Realized gain (loss)		172			(7,504,296	)		—		—		(7,504,124	)
Change in unrealized appreciation (depreciation)2		(835,551	)		22,719,592			—		—		21,884,041
Net purchases (sales)		(3,545,368	)		(24,510,761	)		—		—		(28,056,129	)
Net transfers in/out of Level 3		2,402,063			1,385,975			10,050		365,704		4,163,792
Balance, as of August 31, 2009	$	6,250,930		$	36,441,592		$	66,026	$	365,729	$	43,124,277

² Included in the related net change in unrealized appreciation/depreciation on the Statements of Operations.

The following is a reconciliation of other financial instruments for unobservable inputs (Level 3) used in determining fair value:

	Other Financial Instruments3
Balance, as of August 31, 2008		—
Accrued discounts/premiums		—
Realized gain (loss)		—
Change in unrealized appreciation (depreciation)		—
Net purchases (sales)		—
Net transfers in/out of Level3	$	(4,099	)
Balance, as of August 31, 2009	$	(4,099	)

³ Other financial instruments are unfunded loan commitments.

See Notes to Financial Statements.
44	SEMI-ANNUAL REPORT	AUGUST 31, 2009

Statements of Assets and Liabilities

August 31, 2009 (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	$	233,316,691		$	256,990,953		$	402,214,164		$	148,017,633		$	208,759,336
Investments at value — affiliated2		2,032,607			2,029,452			501			2,466,296			1,492,725
Unrealized appreciation on foreign currency exchange contracts		8,514			8,787			14,522			24,608			4,432
Unrealized appreciation on unfunded loan commitments		—			—			4,235			—			—
Unrealized appreciation on swaps		424,847			48,435			39,105			—			—
Foreign currency at value3		2,178,629			1,013,695			442,658			2,254,775			—
Cash		143,188			—			2,760,445			—			13,320
Cash collateral on swaps		400,000			—			—			—			400,000
Interest receivable		5,248,188			5,350,191			8,007,955			2,039,078			3,312,672
Swap premiums paid		868,510			213,215			848,008			791,608			1,398,411
Investments sold receivable		733,027			693,563			1,996,988			5,011,355			3,081,547
Swaps receivable		51,197			54,705			5,836			37,472			20,215
Dividends receivable		—			74,479			64,897			—			—
Commitment fees receivable		—			—			11,182			—			—
Principal paydown receivable		—			3,134			—			—			—
Income receivable — affiliated		—			—			223			—			—
Prepaid expenses		15,942			16,667			35,069			10,399			16,808
Other assets		—			8,399			46,699			38,882			2,674
Total assets		245,421,340			266,505,675			416,492,487			160,692,106			218,502,140
Liabilities
Loan payable		38,000,000			46,000,000			48,000,000			24,000,000			16,000,000
Unrealized depreciation on swaps		703,291			714,958			1,604,734			687,906			1,167,130
Unrealized depreciation on foreign currency exchange contracts		305,379			328,793			337,671			207,126			—
Unrealized depreciation on unfunded loan commitments		—			—			—			34,095			4,099
Investments purchased payable		3,438,546			3,768,436			10,069,458			9,305,205			4,677,975
Swaps payable		106,181			63,802			134,941			51,278			99,425
Investment advisory fees payable		102,300			133,054			199,974			92,944			89,850
Interest payable		43,570			51,495			44,213			22,840			18,663
Income dividends payable		205			98,659			—			92,794			130,682
Officer’s and Directors’ fees payable		381			402			47,868			384			147
Other affiliates payable		746			798			1,233			458			692
Other accrued expenses payable		13,694			—			12,153			—			—
Other liabilities		57,307			—			447,504			—			—
Total liabilities		42,771,600			51,160,397			60,899,749			34,495,030			22,188,663
Net Assets	$	202,649,740		$	215,345,278		$	355,592,738		$	126,197,076		$	196,313,477
Net Assets Consist of
Paid-in capital4	$	414,571,967		$	492,246,502		$	973,182,878		$	200,169,626		$	456,503,852
Undistributed (distributions in excess of) net investment income		2,944,433			801,924			(2,042,874	)		(35,175	)		1,738,295
Accumulated net realized loss		(176,350,864	)		(235,178,483	)		(419,762,484	)		(48,055,638	)		(200,685,194	)
Net unrealized appreciation/depreciation		(38,515,796	)		(42,524,665	)		(195,784,782	)		(25,881,737	)		(61,243,476	)
Net Assets	$	202,649,740		$	215,345,278		$	355,592,738		$	126,197,076		$	196,313,477
Net asset value	$	5.85		$	5.77		$	3.31		$	12.02		$	3.47

1	Investments at cost — unaffiliated	$	271,279,887	$	298,551,918	$	596,239,724	$	172,961,768	$	268,836,015
2	Investments at cost — affiliated	$	2,032,607	$	2,029,452	$	501	$	2,466,296	$	1,492,725
3	Foreign currency at cost	$	2,177,436	$	1,021,732	$	347,867	$	2,246,984		—
4	Shares outstanding, 200 million shares authorized, par value $0.10 per share		34,622,785		37,319,241		107,524,535		10,496,930		56,509,502

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	45

Statements of Operations

Six Months Ended August 31, 2009 (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	$	12,422,979		$	13,254,487		$	23,409,710		$	5,777,937		$	11,244,814
Dividends		308			10,555			—			—			—
Income — affiliated		5,376			6,905			8,083			5,928			6,393
Foreign taxes withheld		(1,022	)		—			—			—			—
Facility and other fees		34,911			56,205			185,316			104,932			265,124
Total income		12,462,552			13,328,152			23,603,109			5,888,797			11,516,331
Expenses
Investment advisory		536,832			688,892			1,082,939			495,334			501,685
Borrowing cost1		122,914			127,481			214,152			91,905			142,502
Professional		58,640			68,755			121,974			62,699			69,154
Accounting services		28,957			26,985			59,792			12,111			26,348
Transfer agent		22,384			20,431			59,346			12,645			31,144
Custodian		12,600			12,735			11,682			6,024			7,530
Officer and Directors		11,904			12,103			27,954			7,729			11,341
Printing		7,754			8,483			21,507			10,736			12,252
Registration		5,906			6,235			19,297			4,621			9,789
Miscellaneous		31,834			32,964			39,617			18,899			28,488
Total expenses excluding interest expense		839,725			1,005,064			1,658,260			722,703			840,233
Interest expense		264,501			301,602			387,555			140,035			194,751
Total expenses		1,104,226			1,306,666			2,045,815			862,738			1,034,984
Less fees waived by advisor		(687	)		(684	)		(858	)		(750	)		(719	)
Total expenses after fees waived		1,103,539			1,305,982			2,044,957			861,988			1,034,265
Net investment income		11,359,013			12,022,170			21,558,152			5,026,809			10,482,066
Realized and Unrealized Gain (Loss)
Net realized gain (loss) from:
Investments		(13,697,155	)		(13,644,799	)		(67,658,498	)		(12,632,241	)		(29,883,203	)
Swaps		276,184			387,617			974,384			283,947			271,306
Foreign currency		(635,980	)		(673,759	)		(792,779	)		(616,065	)		(65,836	)
		(14,056,951	)		(13,930,941	)		(67,476,893	)		(12,964,359	)		(29,677,733	)
Net change in unrealized appreciation/depreciation on:
Investments		70,526,678			76,580,656			174,831,383			44,785,632			81,070,194
Swaps		3,021,095			2,859,061			(3,024,391	)		2,212,257			(716,431	)
Foreign currency		(583,483	)		(588,454	)		(438,975	)		(467,421	)		(6,971	)
Unfunded corporate loans		—			—			4,235			142,565			(4,099	)
		72,964,290			78,851,263			171,372,252			46,673,033			80,342,693
Total realized and unrealized gain		58,907,339			64,920,322			103,895,359			33,708,674			50,664,960
Net Increase in Net Assets Resulting from Operations	$	70,266,352		$	76,942,492		$	125,453,511		$	38,735,483		$	61,147,026

¹ See Note 8 of the Notes to Financial Statements for details of borrowings.

See Notes to Financial Statements.
46	SEMI-ANNUAL REPORT	AUGUST 31, 2009

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, 2009 (Unaudited)			Period June 1, 2008 to February 28, 2009			Year Ended May 31, 2008			Six Months Ended August 31, 2009 (Unaudited)			Period June 1, 2008 to February 28, 2009			Year Ended May 31, 2008
Operations
Net investment income	$	11,359,013		$	17,171,877		$	25,842,085		$	12,022,170		$	18,684,715		$	27,155,524
Net realized loss		(14,056,951	)		(34,537,665	)		(9,129,906	)		(13,930,941	)		(36,996,389	)		(9,283,103	)
Net change in unrealized appreciation/depreciation		72,964,290			(86,397,451	)		(36,722,065	)		78,851,263			(93,986,807	)		(40,223,490	)
Net increase (decrease) in net assets resulting from operations		70,266,352			(103,763,239	)		(20,009,886	)		76,942,492			(112,298,481	)		(22,351,069	)
Dividends to Shareholders From
Net investment income		(12,657,926	)		(19,134,959	)		(26,113,293	)		(12,874,191	)		(20,800,925	)		(28,767,885	)
Capital Share Transactions
Reinvestment of dividends		241,282			—			—			15,864			—			—
Net Assets
Total increase (decrease) in net assets		57,849,708			(122,898,198	)		(46,123,179	)		64,084,165			(133,099,406	)		(51,118,954	)
Beginning of period		144,800,032			267,698,230			313,821,409			151,261,113			284,360,519			335,479,473
End of period	$	202,649,740		$	144,800,032		$	267,698,230		$	215,345,278		$	151,261,113		$	284,360,519
Undistributed net investment income	$	2,944,433		$	4,243,346		$	5,504,375		$	801,924		$	1,653,945		$	3,076,301

	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, 2009 (Unaudited)			Year Ended February 28, 2009			Six Months Ended August 31, 2009 (Unaudited)			Year Ended February 28, 2009
Operations
Net investment income	$	21,558,152		$	55,149,566		$	5,026,809		$	14,429,059
Net realized loss		(67,476,893	)		(103,719,990	)		(12,964,359	)		(31,870,409	)
Net change in unrealized appreciation/depreciation		171,372,252			(229,565,826	)		46,673,033			(41,438,156	)
Net increase (decrease) in net assets resulting from operations		125,453,511			(278,136,250	)		38,735,483			(58,879,506	)
Dividends to Shareholders From
Net investment income		(22,851,943	)		(65,857,392	)		(6,194,238	)		(16,017,675	)
Capital Share Transactions
Reinvestment of dividends		911,221			1,869,284			—			—
Net Assets
Total increase (decrease) in net assets		103,512,789			(342,124,358	)		32,541,245			(74,897,181	)
Beginning of period		252,079,949			594,204,307			93,655,831			168,553,012
End of period	$	355,592,738		$	252,079,949		$	126,197,076		$	93,655,831
Undistributed (distributions in excess of) net investment income	$	(2,042,874	)	$	(749,083	)	$	(35,175	)	$	1,132,254

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	47

Statements of Changes in Net Assets (concluded)

	BlackRock Senior High Income Fund, Inc. (ARK)
Increase (Decrease) in Net Assets:	Six Months Ended August 31, 2009 (Unaudited)			Year Ended February 28, 2009
Operations
Net investment income	$	10,482,066		$	23,218,610
Net realized loss		(29,677,733	)		(55,099,290	)
Net change in unrealized appreciation/depreciation		80,342,693			(82,255,118	)
Net increase (decrease) in net assets resulting from operations		61,147,026			(114,135,798	)
Dividends and Distributions to Shareholders From
Net investment income		(8,476,425	)		(24,063,310	)
Tax return of capital		—			(3,089,535	)
Total dividends and distributions to shareholders		(8,476,425	)		(27,152,845	)
Capital Share Transactions
Reinvestment of dividends		—			239,560
Net Assets
Total increase (decrease) in net assets		52,670,601			(141,049,083	)
Beginning of period		143,642,876			284,691,959
End of period	$	196,313,477		$	143,642,876
Undistributed (distributions in excess of) net investment income	$	1,738,295		$	(267,346	)

See Notes to Financial Statements.
48	SEMI-ANNUAL REPORT	AUGUST 31, 2009

Statements of Cash Flows

August 31, 2009 (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	$	70,266,352		$	76,942,492		$	125,453,511		$	38,735,483		$	61,147,026
Adjustments to reconcile net decrease/increase in net assets resulting from operations to net cash provided by operating activities:
(Increase) decrease in interest receivable		(177,678	)		262,345			1,609,251			3,562			369,236
Increase in swaps receivable		(8,486	)		(8,421	)		(5,836	)		(526	)		—
(Increase) decrease in commitment fees receivable		—			64			(8,580	)		—			—
(Increase) decrease in dividends receivable		296			(61,148	)		11,488						—
Decrease (increase) in prepaid expenses		(9	)		24,839			39,650			—			(2,674	)
(Increase) decrease in other assets		23,985			—			—			(30,686	)		—
Increase in other liabilities		57,307			—			447,504			—			—
Increase in investment advisor payable		27,605			37,362			33,009			22,761			15,350
Increase in interest expense payable		32,152			41,161			13,846			14,629			3,664
Decrease in other affiliates payable		(939	)		(1,067	)		(1,079	)		(302	)		(1,231	)
(Decrease) increase in accrued expenses payable		(95,702	)		(95,146	)		(153,416	)		(79,219	)		(107,969	)
(Decrease) increase in swaps payable		105,521			63,143			6,482			(7,886	)		(8,011	)
Increase in Officers and Directors payable		257			271			23,161			251			30
Swap premium received		2,611,387			3,481,938			—			—			—
Swap premium paid		(3,235,128	)		(3,380,907	)		(175,737	)		—			(166,551	)
Net realized and unrealized gain		(59,405,538	)		(65,313,092	)		(102,770,526	)		(34,080,401	)		(50,049,353	)
Amortization of premium and discount on investments		(1,222,929	)		(2,254,241	)		(1,919,514	)		(865,854	)		(755,308	)
Cash collateral on swaps		2,100,000			—			—			—			1,100,000
Paid-in-kind income		(440,662	)		(561,361	)		(1,655,298	)		(139,965	)		(479,665	)
Proceeds from sales and paydowns of long-term securities		85,360,454			90,845,908			150,575,288			49,239,008			89,510,159
Purchases of long-term securities		(84,650,957	)		(94,463,454	)		(109,824,171	)		(44,256,041	)		(64,020,280	)
Net proceeds from sales of short-term investments		5,078,656			6,341,070			4,724,759			1,641,882			2,854,171
Cash provided by operating activities		16,425,944			11,901,756			66,423,792			10,196,696			39,408,594
Cash Used for Financing Activities
Cash receipts from borrowings		38,000,000			50,000,000			88,000,000			50,000,000			55,000,000
Cash payments from borrowings		(38,700,000	)		(48,200,000	)		(130,000,000	)		(52,000,000	)		(86,000,000	)
Cash dividends paid to shareholders		(12,544,037	)		(12,897,461	)		(22,328,536	)		(6,210,627	)		(8,517,697	)
Increase in bank overdraft		(926,999	)		—			—			—			—
Cash used for financing activities		(14,171,036	)		(11,097,461	)		(64,328,536	)		(8,210,627	)		(39,517,697	)
Cash Impact from Foreign Exchange Fluctuations
Cash impact from foreign exchange fluctuations		(1	)		(8,037	)		149,502			13,521			—
Cash
Net increase (decrease) in cash		2,254,907			796,258			2,244,758			1,999,590			(109,103	)
Cash and foreign currency at beginning of year		66,910			217,437			958,345			255,185			122,423
Cash and foreign currency at end of year	$	2,321,817		$	1,013,695		$	3,203,103		$	2,254,775		$	13,320
Cash Flow Information
Cash paid for interest	$	232,349		$	260,441		$	373,709		$	125,406		$	191,087
Noncash Financing Activities:
Capital shares issued in reinvestment of dividends paid to shareholders		241,282			15,864			—			—			—

A Statement of Cash Flows is presented when a Fund had a significant amount of borrowing during the period, based on the average borrowings outstanding in relation to average total assets.

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	49

Financial Highlights BlackRock Corporate High Yield Fund, Inc. (COY)

	Six Months Ended August 31, 2009			Period June 1, 2008 to February 28,
							Year Ended May 31,
	(Unaudited)			2009			2008			2007			2006			2005			2004
Per Share Operating Performance
Net asset value, beginning of period	$	4.19		$	7.74		$	9.07		$	8.52		$	8.53		$	8.48		$	8.01
Net investment income1		0.33			0.50			0.75			0.73			0.74			0.87			0.91
Net realized and unrealized gain (loss)		1.70			(3.50	)		(1.32	)		0.49			0.02			0.07			0.56
Net increase (decrease) from investment operations		2.03			(3.00	)		(0.57	)		1.22			0.76			0.94			1.47
Dividends from net investment income		(0.37	)		(0.55	)		(0.76	)		(0.67	)		(0.77	)		(0.89	)		(1.00	)
Net asset value, end of period	$	5.85		$	4.19		$	7.74		$	9.07		$	8.52		$	8.53		$	8.48
Market price, end of period	$	6.06		$	3.91		$	7.28		$	8.47		$	7.42		$	8.46		$	8.23
Total Investment Return2
Based on net asset value		49.85	%3		(38.98	)%3		(5.49	)%		15.60	%		9.75	%		11.31	%		18.65	%
Based on market price		66.35	%3		(39.46	)%3		(4.81	)%		23.96	%		(3.63	)%		13.75	%		6.75	%
Ratios to Average Net Assets
Total expenses		1.27	%4		2.29	%4		2.33	%		3.25	%		2.39	%		1.69	%		1.39	%
Total expenses after fees waived and paid indirectly		1.27	%4		2.29	%4		2.33	%		3.25	%		2.39	%		1.69	%		1.39	%
Total expenses after fees waived and paid indirectly and excluding interest expense		0.97	%4		1.17	%4		0.83	%		0.91	%		0.90	%		0.87	%		0.91	%
Net investment income		13.08	%4		11.45	%4		9.15	%		8.36	%		8.55	%		9.85	%		10.72	%
Supplemental Data
Net assets, end of period (000)	$	202,650		$	144,800		$	267,698		$	313,821		$	294,759		$	294,218		$	291,654
Amount of loan outstanding, end of period (000)	$	38,000		$	38,700		$	64,700		$	126,200		$	127,700		$	100,600		$	100,400
Average amount of loan outstanding during the period (000)	$	40,999		$	59,553		$	81,598		$	125,974		$	101,539		$	104,938		$	101,764
Portfolio turnover		41	%		37	%		38	%		62	%		57	%		57	%		83	%
Asset coverage, end of period per $1,000	$	6,333		$	4,742		$	5,138		$	3,487		$	3,308		$	3,925		$	3,905

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.
50	SEMI-ANNUAL REPORT	AUGUST 31, 2009

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

	Six Months Ended August 31, 2009			Period June 1, 2008 to February 28,
							Year Ended May 31,
	(Unaudited)			2009			2008			2007			2006			2005			2004
Per Share Operating Performance
Net asset value, beginning of period	$	4.05		$	7.62		$	8.99		$	8.46		$	8.46		$	8.43		$	7.86
Net investment income1		0.32			0.50			0.73			0.71			0.72			0.85			0.88
Net realized and unrealized gain (loss)		1.75			(3.51	)		(1.33	)		0.49			0.02			0.07			0.58
Net increase (decrease) from investment operations		2.07			(3.01	)		(0.60	)		1.20			0.74			0.92			1.46
Dividends from net investment income		(0.35	)		(0.56	)		(0.77	)		(0.67	)		(0.74	)		(0.89	)		(0.89	)
Capital charges with respect to issuance of Common Shares		—			—			—			—			—			—			0.00	2
Net asset value, end of period	$	5.77		$	4.05		$	7.62		$	8.99		$	8.46		$	8.46		$	8.43
Market price, end of period	$	5.62		$	3.57		$	7.03		$	8.53		$	7.36		$	8.38		$	7.97
Total Investment Return3
Based on net asset value		52.83	%4		(39.69	)%4		(5.69	)%		15.51	%		9.78	%		11.24	%		19.33	%
Based on market price		68.87	%4		(42.38	)%4		(8.30	)%		25.98	%		(3.59	)%		16.55	%		6.07	%
Ratios to Average Net Assets
Total expenses		1.43	%5		2.45	%5		2.47	%		3.38	%		2.49	%		1.81	%		1.51	%
Total expenses after fees waived and paid indirectly		1.43	%5		2.45	%5		2.47	%		3.38	%		2.49	%		1.81	%		1.51	%
Total expenses after fees waived and paid indirectly and excluding interest expense		1.10	%5		1.29	%5		0.96	%		1.04	%		1.00	%		0.99	%		1.01	%
Net investment income		13.13	%5		11.80	%5		9.01	%		8.25	%		8.45	%		9.71	%		10.48	%
Supplemental Data
Net assets, end of period (000)	$	215,345		$	151,261		$	284,361		$	335,479		$	315,699		$	315,626		$	313,583
Amount of loan outstanding, end of period (000)	$	46,000		$	44,200		$	71,700		$	129,700		$	141,000		$	107,800		$	109,600
Average amount of loan outstanding during the period (000)	$	46,385		$	65,500		$	88,466		$	134,704		$	109,144		$	112,501		$	112,297
Portfolio turnover		40	%		37	%		38	%		62	%		56	%		55	%		83	%
Asset coverage, end of period per $1,000	$	5,861		$	4,422		$	4,966		$	3,587		$	3,239		$	3,928		$	3,861

1	Based on average shares outstanding.
2	Amount is less than $0.01 per share.
3	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.
4	Aggregate total investment return.
5	Annualized.

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	51

Financial Highlights BlackRock Debt Strategies Fund, Inc. (DSU)

	Six Months Ended August 31, 2009			Year Ended February 28,			Year Ended February 29,
										Year Ended February 28,
	(Unaudited)			2009			2008			2007			2006			2005
Per Share Operating Performance
Net asset value, beginning of period	$	2.35		$	5.57		$	7.01		$	6.69		$	7.06		$	6.71
Net investment income1		0.20			0.52			0.66			0.68			0.63			0.67
Net realized and unrealized gain (loss)		0.97			(3.12	)		(1.43	)		0.28			(0.35	)		0.34
Net increase (decrease) from investment operations		1.17			(2.60	)		(0.77	)		0.96			0.28			1.01
Dividends from net investment income		(0.21	)		(0.62	)		(0.67	)		(0.64	)		(0.65	)		(0.66	)
Net asset value, end of period	$	3.31		$	2.35		$	5.57		$	7.01		$	6.69		$	7.06
Market price, end of period	$	3.35		$	2.07		$	5.43		$	7.28		$	6.77		$	6.71
Total Investment Return2
Based on net asset value		51.87	%3		(50.19	)%		(11.72	)%		15.35	%		4.57	%		15.95	%
Based on market price		74.49	%3		(54.99	)%		(17.13	)%		18.37	%		11.34	%		10.53	%
Ratios to Average Net Assets
Total expenses		1.36	%4		2.42	%		3.13	%		3.16	%		2.63	%		1.83	%
Total expenses after fees waived		1.36	%4		2.42	%		3.13	%		3.16	%		2.63	%		1.83	%
Total expenses after fees waived and excluding interest expense		1.10	%4		1.20	%		0.99	%		0.99	%		1.02	%		1.02	%
Net investment income		14.31	%4		11.79	%		9.90	%		9.97	%		9.55	%		9.84	%
Supplemental Data
Net assets, end of period (000)	$	355,593		$	252,080		$	594,204		$	745,944		$	708,411		$	745,256
Amount of loan outstanding, end of period (000)	$	48,000		$	90,000		$	199,000		$	298,600		$	259,900		$	298,400
Average amount of loan outstanding during the period (000)	$	59,497		$	163,286		$	272,846		$	283,906		$	294,371		$	304,549
Portfolio turnover		32	%		44	%		51	%		65	%		46	%		60	%
Asset coverage, end of period per $1,000	$	8,408		$	3,801		$	3,986		$	3,498		$	3,726		$	3,498

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.
52	SEMI-ANNUAL REPORT	AUGUST 31, 2009

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

	Six Months Ended August 31, 2009			Year Ended February 28,			Year Ended February 29,			Year Ended February 28,						Period July 30, 20041 to February 28,
	(Unaudited)			2009			2008			2007			2006			2005
Per Share Operating Performance
Net asset value, beginning of period	$	8.92		$	16.06		$	19.28		$	19.39		$	19.74		$	19.10
Net investment income2		0.48			1.37			1.55			1.55			1.33			0.58
Net realized and unrealized gain (loss)		3.21			(6.98	)		(3.27	)		(0.12	)		(0.31	)		0.57
Net increase (decrease) from investment operations		3.69			(5.61	)		(1.72	)		1.43			1.02			1.15
Dividends and distributions to shareholders from:
Net investment income		(0.59	)		(1.53	)		(1.50	)		(1.54	)		(1.27	)		(0.47	)
Net realized gain		—			—			—			—			(0.10	)		(0.01	)
Total dividends and distributions		(0.59	)		(1.53	)		(1.50	)		(1.54	)		(1.37	)		(0.48	)
Capital charges resulting from issuance of Common Shares		—			—			—			—			—			(0.03	)
Net asset value, end of period	$	12.02		$	8.92		$	16.06		$	19.28		$	19.39		$	19.74
Market price, end of period	$	11.45		$	8.28		$	14.75		$	18.50		$	17.76		$	19.44
Total Investment Return3
Based on net asset value		42.76	%4		(36.46	)%		(8.98	)%		8.31	%		6.07	%		5.97	%4
Based on market price		46.51	%4		(35.78	)%		(12.88	)%		13.47	%		(1.35	)%		(0.34	)%4
Ratios to Average Net Assets
Total expenses		1.56	%5		2.48	%		2.78	%		2.87	%		2.46	%		1.48	%5
Total expenses after fees waived and paid indirectly		1.56	%5		2.48	%		2.78	%		2.87	%		2.46	%		1.30	%5
Total expenses after fees waived and paid indirectly and excluding interest expense		1.31	%5		1.38	%		1.20	%		1.22	%		1.25	%		0.92	%5
Net investment income		9.11	%5		10.08	%		8.39	%		8.03	%		6.88	%		5.11	%5
Supplemental Data
Net assets, end of period (000)	$	126,197		$	93,656		$	168,553		$	202,364		$	203,557		$	207,255
Amount of loan outstanding, end of period (000)	$	24,000		$	26,000		$	50,000		$	47,000		$	61,400		$	60,300
Average amount of loan outstanding during the period (000)	$	21,639		$	45,165		$	55,269		$	61,022		$	63,725		$	29,072
Portfolio turnover		38	%		47	%		65	%		65	%		72	%		30	%
Asset coverage, end of period per $1,000	$	6,258		$	4,602		$	4,371		$	5,306		$	4,315		$	4,437

1	Commencement of operations.
2	Based on average shares outstanding.
3	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.
4	Aggregate total investment return.
5	Annualized.

See Notes to Financial Statements.
SEMI-ANNUAL REPORT	AUGUST 31, 2009	53

Financial Highlights BlackRock Senior High Income Fund, Inc. (ARK)

	Six Months Ended August 31, 2009			Year Ended February 28,			Year Ended February 29,
										Year Ended February 28,
	(Unaudited)			2009			2008			2007			2006			2005
Per Share Operating Performance
Net asset value, beginning of period	$	2.54		$	5.04		$	6.17		$	6.00		$	6.28		$	6.10
Net investment income1		0.19			0.41			0.54			0.57			0.55			0.57
Net realized and unrealized gain (loss)		0.89			(2.43	)		(1.11	)		0.16			(0.27	)		0.16
Net increase (decrease) from investment operations		1.08			(2.02	)		(0.57	)		0.73			0.28			0.73
Dividends and distributions to shareholders from:
Net investment income		(0.15	)		(0.43	)		(0.56	)		(0.56	)		(0.56	)		(0.55	)
Tax return of capital		—			(0.05	)		—			—			—			—
Total dividends and distributions		(0.15	)		(0.48	)		(0.56	)		(0.56	)		(0.56	)		(0.55	)
Net asset value, end of period	$	3.47		$	2.54		$	5.04		$	6.17		$	6.00		$	6.28
Market price, end of period	$	3.18		$	2.21		$	4.91		$	6.53		$	5.88		$	6.21
Total Investment Return2
Based on net asset value		43.72	%3		(42.15	)%		(9.76	)%		12.82	%		5.07	%		12.88	%
Based on market price		51.37	%3		(48.33	)%		(16.94	)%		21.84	%		4.13	%		11.44	%
Ratios to Average Net Assets
Total expenses		1.21	%4		2.24	%		2.70	%		3.03	%		2.39	%		1.69	%
Total expenses after fees waived		1.21	%4		2.24	%		2.70	%		3.03	%		2.39	%		1.69	%
Total expenses after fees waived and excluding interest expense		0.98	%4		1.05	%		0.86	%		0.90	%		0.91	%		0.91	%
Net investment income		12.28	%4		9.96	%		9.16	%		9.42	%		9.23	%		9.28	%
Supplemental Data
Net assets, end of period (000)	$	196,313		$	143,643		$	284,692		$	347,449		$	335,690		$	349,791
Amount of loan outstanding, end of period (000)	$	16,000		$	47,000		$	91,500		$	132,000		$	141,700		$	147,500
Average amount of loan outstanding during the period (000)	$	29,913		$	79,422		$	109,978		$	131,575		$	128,461		$	137,934
Portfolio turnover		35	%		49	%		48	%		62	%		48	%		54	%
Asset coverage, end of period per $1,000	$	13,270		$	4,056		$	4,112		$	3,632		$	3,369		$	3,371

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, 2009

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”) (the “Funds” or individually as the “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. Each of the Funds is organized as a Maryland corporation. The Funds’ financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, which may require the use of management accruals and estimates. Actual results may differ from these 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 of Investments: The Funds value their bond investments on the basis of last available bid prices or current market quotations provided by dealers or pricing services selected under the supervision of each Fund’s Board of Directors (the “Board”). Floating rate loan interests are valued at the mean between the last available 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. Swap agreements are valued utilizing quotes received daily by the Funds’ pricing service or through brokers which are derived using daily swap curves and trades of underlying securities. Short-term securities with maturities less than 60 days may be valued at amortized cost, which approximates fair value. The Funds’ value their investments in Cash Sweep Series, each of BlackRock Liquidity Series, LLC at fair value, which is ordinarily based upon their pro-rata ownership in the net assets of the underlying fund.

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.

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 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 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 securities.

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 are not available, the investment will be valued by a method approved by the Board as reflecting fair value (“Fair Value Assets”). When determining the price for Fair Value Assets, the investment advisor and/or sub-advisor seeks to determine the price that the Funds 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 securities is substantially completed each day at various times prior to the close of business on the New York Stock Exchange (“NYSE”). The values of such securities used in computing the net assets of each Fund are determined as of such times. Foreign currency exchange rates will be determined as of the close of business on the NYSE. Occasionally, events affecting the values of such securities and such exchange rates may occur between the times at which they are determined and the close of business on the NYSE that may not be reflected in the computation of the 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 securities, those securities will be valued at their fair value as determined in good faith by the Board or by the investment advisor using a pricing service and/or procedures approved by the Board. Foreign currency exchange contracts are valued at the mean between the bid and ask prices. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available.

Foreign Currency Transactions: Foreign currency amounts are translated into United States dollars on the following basis: (i) market value of investment securities, assets and liabilities at the current rate of exchange; and (ii) purchases and sales of investment securities, income and expenses at the rates of exchange prevailing on the respective dates of such transactions.

The Funds report foreign currency related transactions as components of realized gains for financial reporting purposes, whereas such components are treated as ordinary income for federal income tax purposes.

Capital Trusts: These securities are typically issued by corporations, generally in the form of interest-bearing notes with preferred securities characteristics, or by an affiliated business trust of a corporation, generally in the form of beneficial interests in subordinated debentures or similarly structured securities. The securities can be structured as either fixed or adjustable coupon securities that can have either a perpetual or stated maturity date. Dividends can be deferred without creating an event of default or acceleration, although maturity cannot take place unless all cumulative payment obligations have been met. The deferral of payments does not affect the purchase or sale of these securities in the open market. Payments on these securities are treated as interest rather than dividends for Federal income tax purposes. These securities can have a rating that is slightly below that of the issuing company’s senior debt securities.

SEMI-ANNUAL REPORT AUGUST 31, 2009 55

Notes to Financial Statements (continued)

Preferred Stock: Certain 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 Loans: The Funds may invest in floating rate loans, which are generally non-investment grade, made by banks, other financial institutions and privately and publicly offered corporations. Floating rate loans are senior in the debt structure of a corporation. Floating rate loans 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 (i) the lending rate offered by one or more European banks, such as LIBOR (London InterBank Offered Rate), (ii) the prime rate offered by one or more US banks or (iii) the certificate of deposit rate. The Funds consider these investments to be investments in debt securities for purposes of their investment policies.

The Funds earn and/or pay facility and other fees on floating rate loans. Other fees earned/paid include commitment, amendment, consent, commissions and prepayment penalty fees. Facility, amendment and consent fees are typically amortized as premium and/or accreted as discount over the term of the loan. Commitment, commission and various other fees are recorded as income. Prepayment penalty fees are recognized on the accrual basis. When a Fund buys a floating rate loan it may receive a facility fee and when it sells a floating rate loan 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 portion of a floating rate loan. In certain circumstances, the Funds may receive a prepayment penalty fee upon the prepayment of a floating rate loan by a borrower. Other fees received by the Funds may include covenant waiver fees and covenant modification fees.

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 loans are usually freely callable at the issuer’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 they are 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 relating to the loans, 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’ investments in loan participation interests involve 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 general creditor of the lender and may not benefit from any offset between the lender and the borrower.

Zero-Coupon Bonds: Certain 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 each Fund either delivers collateral or segregates assets in connection with certain investments (e.g., foreign currency exchange contracts and swaps) each Fund will, consistent with SEC rules and/or certain interpretive letters issued by the SEC, segregate collateral or designate on its 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 (e.g., swaps). As part of these agreements, when the value of these investments achieves a previously agreed upon value (minimum transfer amount), each party may be required to deliver additional collateral.

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 security transactions are determined on the identified cost basis. Dividend income is recorded on the ex-dividend dates. Interest income is recorded on the accrual basis. Each Fund amortizes all premiums and discounts on debt securities.

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 exceed net investment income and accumulated realized capital gains, a portion of the total distribution may be treated as a tax return of capital.

Income Taxes: It is each Fund’s policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. Under the applicable foreign tax laws, a withholding tax may be imposed on interest, dividends and capital gains at various rates.

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 three years

56 SEMI-ANNUAL REPORT AUGUST 31, 2009

Notes to Financial Statements (continued)

ended May 31, 2008 and the period ended February 28, 2009 for Corporate High Yield and Corporate High Yield III, and for each of the four years ended February 28, 2009 for Debt Strategies, Floating Rate Income Strategies II and Senior High Income. The statutes of limitations on the Funds’ state and local tax returns may remain open for an additional year depending upon the jurisdiction.

Recent Accounting Pronouncement: In June 2009, Statement of Financial Accounting Standards No. 166, “Accounting for Transfers of Financial Assets — an amendment of FASB Statement No. 140” (“FAS 166”), was issued. FAS 166 is intended to improve the relevance, representational faithfulness and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial assets. FAS 166 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2009. Earlier application is prohibited. The recognition and measurement provisions of FAS 166 must be applied to transfers occurring on or after the effective date. Additionally, the disclosure provisions of FAS 166 should be applied to transfers that occurred both before and after the effective date of FAS 166. The impact of FAS 166 on the Funds’ financial statement disclosures, if any, is currently being assessed.

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 have been invested in common shares of other certain 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 other certain 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 other certain 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 income — 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.

2. Derivative Financial Instruments:

The Funds may engage in various portfolio investment strategies 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, interest rate risk and foreign currency exchange rate risk. Losses may arise if the value of the contract decreases due to an unfavorable change in the value of the underlying security or if the counterparty does not perform under the contract. The Funds may mitigate counterparty risk through master netting agreements included within an International Swap and Derivatives Association, Inc. (“ISDA”) Master Agreement between a Fund and each of its counterparties. The ISDA Master Agreement allows each Fund to offset with its counterparty certain derivative financial instrument’s payables and/or receivables with collateral held with each counterparty. The amount of collateral moved to/from applicable coun-terparties is 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 counterparty non-performance. See Note 1 “Segregation and Collateralization” for information with respect to collateral practices.

The Funds’ maximum risk of loss from counterparty credit risk on over-the-counter derivatives is generally the aggregate unrealized gain in excess of any collateral pledged by the counterparty to the Funds. For over-the-counter purchased options, the Funds bear the risk of loss in the amount of the premiums paid and change in market value of the options should the counter-party not perform under the contracts. Options written by the Funds do not give rise to counterparty credit risk, as written options obligate the Funds to perform and not the counterparty. Certain ISDA Master Agreements allow counterparties to over-the-counter derivatives to terminate derivative contracts prior to maturity in the event a Fund’s net assets decline by a stated percentage or a Fund fails to meet the terms of its ISDA Master Agreements, which would cause the Fund to accelerate payment of any net liability owed to the counterparty. Counterparty risk related to exchange-traded options is minimal because of the protection against defaults provided by the exchange on which they trade.

Foreign Currency Exchange Contracts: The Funds may enter into foreign currency exchange contracts as an economic hedge against either specific transactions or portfolio positions (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 a Fund, help to manage the overall exposure to the foreign currency backing some of the investments held by a Fund. The contract is marked-to-market daily and the change in market value is recorded by a Fund as an unrealized gain or loss. When the contract is closed, a Fund records 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 counterparties may not meet the terms of the agreement or unfavorable movements in the value of a foreign currency relative to the US dollar.

Options: The Funds may purchase and write call and put options to increase or decrease their exposure to underlying instruments. 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 a Fund purchases (writes) an option, an amount equal to the premium paid (received) a Fund is reflected as an asset (liability) and an equivalent liability (asset). 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

SEMI-ANNUAL REPORT AUGUST 31, 2009 57

Notes to Financial Statements (continued)

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 a Fund enters into a closing transaction), a Fund realizes 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 premium received or paid). When a Fund writes a call option, such option is “covered,” meaning that a Fund holds the underlying instrument subject to being called by the option counterparty, or cash in an amount sufficient to cover the obligation. When a Fund writes a put option, such option is covered by cash in an amount sufficient to cover the obligation.

In purchasing and writing options, a Fund bears 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 a written option could result in the Funds purchasing a security at a price different from the current market value. The Funds may execute transactions in both listed and over-the-counter options.

Swaps: The Funds may enter into swap agreements, in which a Fund 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. Swaps are marked-to-market daily and changes in value are recorded as unrealized appreciation (depreciation). When the swap is terminated, the Fund will record a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transaction and the Fund’s basis in the contract, if any. 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 counterparty 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 may enter into credit default swaps to manage their exposure to the market or certain sectors of the market, to reduce its risk exposure to defaults of corporate and/or sovereign issuers or to create exposure to corporate and/or sovereign issuers to which it is 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 of 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) 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, a Fund 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), a Fund 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.

58 SEMI-ANNUAL REPORT AUGUST 31, 2009

Notes to Financial Statements (continued)

Derivatives Not Accounted for as Hedging Instruments under Financial Accounting Standards Board Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities”:

Values of Derivative Instruments as of August 31, 2009*
	Asset Derivatives
		COY		CYE		DSU		FRB		ARK
	Statements of Assets and Liabilities Location	Value
Foreign currency exchange contracts	Unrealized appreciation on foreign currency exchange contracts	$	8,514	$	8,787	$	14,522	$	24,608	$	4,432
Credit contracts	Unrealized appreciation on swaps		424,847		48,435		39,105		—		—
Equity contracts	Investments at value — unaffiliated		17,000		—		—		11,000		—
Total		$	450,361	$	57,222	$	53,627	$	35,608	$	4,432

	Liability Derivatives
		COY		CYE		DSU		FRB		ARK
	Statements of Assets and Liabilities Location	Value
Foreign currency exchange contracts	Unrealized depreciation on foreign currency exchange contracts	$	305,379	$	328,793	$	337,671	$	207,126		—
Credit contracts	Unrealized depreciation on swaps		703,291		714,958		1,604,734		687,906	$	1,167,130
Total		$	1,008,670	$	1,043,751	$	1,942,405	$	895,032	$	1,167,130

* For open derivative instruments as of August 31, 2009, see the Schedule of Investments, which is also indicative of activity for the six months ended August 31, 2009.

The Effect of Derivative Instruments on the Statements of Operations Year Ended August 31, 2009
Net Realized Gain (Loss) From Derivatives Recognized in Income
	COY			CYE			DSU			FRB			ARK
Foreign currency exchange contracts	$	(617,619	)	$	(661,372	)	$	(769,955	)	$	(623,206	)	$	(65,836	)
Credit contracts:
Swaps		276,184			387,617			974,384			283,947			271,306
Total	$	(341,435	)	$	(273,755	)	$	204,429		$	(339,259	)	$	205,470

Net Change in Unrealized Appreciation/Depreciation on Derivatives Recognized in Income
	COY			CYE			DSU			FRB			ARK
Foreign currency exchange contracts	$	(583,791	)	$	(623,902	)	$	(625,053	)	$	(432,478	)	$	(6,971	)
Credit contracts:
Swaps		3,021,095			2,859,061			(3,024,391	)		2,212,257			(716,431	)
Equity contracts:
Options		(10,455	)		—			—			(6,765	)		—
Total	$	2,426,849		$	2,235,159		$	(3,649,444	)	$	1,773,014		$	(723,402	)

3. Investment Advisory Agreement and Other Transactions with Affiliates:

The PNC Financial Services Group, Inc. (“PNC”) and Bank of America Corporation (“BAC”) are the largest stockholders of BlackRock, Inc. (“BlackRock”). Due to the ownership structure, PNC is an affiliate for 1940 Act purposes, but BAC is 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 the following annual rates of the average daily value of each Fund’s 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	%

SEMI-ANNUAL REPORT AUGUST 31, 2009 59

Notes to Financial Statements (continued)

The Manager has entered into a separate sub-advisory agreement with BlackRock Financial Management, Inc. (“BFM”), an affiliate of the Manager, under which the Manager pays BFM, for services it provides, a monthly fee that is a percentage of the investment advisory fee paid by the Funds to the Manager.

The Manager has agreed to waive its advisory fee by the amount of investment advisory fees the Funds pay to the Manager indirectly through its investment in affiliated money market funds. This amount is shown as fees waived by advisor in the Statements of Operations.

For the six months ended August 31, 2009, the Funds reimbursed the Manager for certain accounting services, which are included in accounting services in the Statements of Operations were as follows:

	Reimbursement to Manager
COY	$2,181
CYE	$2,242
DSU	$4,232
FRB	$1,528
ARK	$1,979

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 (including paydowns) of investments, excluding short-term securities, for the six months ended August 31, 2009 were as follows:

	Purchases		Sales
COY	$	86,948,446	$	84,639,100
CYE	$	97,047,976	$	91,160,449
DSU	$	115,195,401	$	148,776,628
FRB	$	52,942,447	$	49,540,382
ARK	$	66,767,286	$	86,318,320

5. 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 (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 credit risk, the Funds may be exposed to counterparty risk, or the risk that an entity with which the Funds have unsettled or open transactions may default. Financial assets, which potentially expose the Funds to credit and counter-party risks, consist principally of investments and cash due from counterpar-ties. The extent of the Funds’ exposure to credit and counterparty risks with respect to these financial assets is approximated by their value recorded in the Funds’ Statements of Assets and Liabilities.

6. 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, 2009, the shares owned by affiliates of the Manager of Floating Rate Income Strategies II were 8,182. The Board is authorized, however, to classify and reclassify any unissued shares without approval of shareholders. Shares issued and outstanding during the six months ended August 31, 2009 and the period ended February 28, 2009 increased by the following amounts as a result of dividend reinvestment.

	August 31, 2009	February 28, 2009
COY	41,825	—
CYE	2,744	—
DSU	289,050	499,727
ARK	—	75,664

Shares issued and outstanding remained constant for COY and CYE for the year ended May 31, 2008 and for FRB for the six months ended August 31, 2009 and the year ended February 28, 2009.

7. Commitments:

The Funds may invest in floating rate loans. In connection with these investments, the Funds may also enter into unfunded corporate loans (“commitments”). Commitments may obligate the Funds to furnish temporary financing to a borrower until permanent financing can be arranged. As of August 31, 2009, the Funds had the following unfunded loan commitments:

DSU

Borrower	Unfunded Commitment (000)	Value of Underlying Loans (000)
Smurfit-Stone Container Enterprises, Inc., Debtor in Possession Term Loan	$697	$666
Big West Oil LLC, Delayed Advance Loan	$162	$149

FRB

Borrower	Unfunded Commitment (000)	Value of Underlying Loans (000)
Big West Oil, LLC, Initial Advance Loan	$441	$407
Smurfit-Stone Container Enterprises, Inc., Debtor in Possession Term Loan	$403	$384
Vought Aircraft Industries, Inc.	$370	$346

ARK

Borrower	Unfunded Commitment (000)	Value of Underlying Loans (000)
Smurfit-Stone Container Enterprises, Inc., Debtor in Possession Term Loan	$398	$380

60 SEMI-ANNUAL REPORT AUGUST 31, 2009

Notes to Financial Statements (continued)

8. Borrowings:

On May 16, 2008, the Funds renewed their revolving credit and security Agreements (“Citicorp Agreement”) pursuant to a commercial paper asset securitization program with Citicorp North America, Inc. (“Citicorp”), as Agent, certain secondary backstop lenders and certain asset securitization conduits, as lenders (the “Lenders”). The agreement was renewed for one year and at the time of renewal had maximum limits as follows:

	Maximum Limit
COY	$	135,000,000
CYE	$	143,000,000
DSU	$	309,000,000
FRB	$	88,000,000
ARK	$	148,000,000

Under the Citicorp Agreement, the conduits funded advances to each Fund through the issuance of highly rated commercial paper as shown in the Statements of Assets and Liabilities as loan payable. Each Fund had granted a security interest in substantially all of its assets to, and in favor of, the Lenders as security for its obligations to the Lenders. The interest rate on each Fund’s borrowings was based on the interest rate carried by the commercial paper plus a program fee. In addition, each Fund paid a liquidity fee to the secondary backstop lenders and the agent. Under the Citicorp Agreement, the Funds were subject to certain conditions and covenants, which included among other things limitations on asset declines over prescribed time periods. As a result of the decline in net assets attributable to market conditions, certain terms of the facility were renegotiated effective December 5, 2008, for COY, CYE, DSU and ARK and effective December 31, 2008 for FRB, which included waivers of certain financial covenants by the Lenders, an increase in program and liquidity fees under the facility and a reduction of the maximum limits to as follows:

	Maximum Limit
COY	$	81,000,000
CYE	$	85,000,000
DSU	$	174,000,000
FRB	$	88,000,000
ARK	$	91,000,000

On March 5, 2009, the Funds terminated their revolving credit agreement with Citicorp and 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 Fund Company (“SSB”). The SSB Agreement has the same maximum limits as the renegotiated limits under the Citigroup Agreement except for DSU which was lowered to $135,000,000 and FRB which lowered to $58,000,000. The Funds have granted a security interest in substantially all of its assets to SSB.

Advances are made by SSB to the Funds, at the Funds option (a) the higher of 1.0% above the Fed Effective Rate or 1.0% above the Overnight LIBOR Rate and (b) 1.0% above 7-day, 30-day, or 60-day LIBOR Rate. In addition, the Funds pay a facility fee and a commitment fee based upon SSBs 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, 2009 are shown in the Statements of Assets and Liabilities as loan payable.

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, 2009, the daily weighted average interest rates under the revolving credit agreement were as follows:

	Daily Weighted Average Interest Rate
COY	1.29%
CYE	1.30%
DSU	1.30%
FRB	1.29%
ARK	1.30%

SEMI-ANNUAL REPORT AUGUST 31, 2009 61

Notes to Financial Statements (concluded)

9. Capital Loss Carryforwards:

As of February 28, 2009, 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
2010	$	33,478,307	$	52,918,036	$	90,564,493		—	$	54,958,583
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		23,362,414		24,709,530		56,690,782		12,168,927		27,675,242
Total	$	141,828,019	$	199,443,285	$	294,702,641	$	13,688,710	$	142,177,426

10. Subsequent Events:

Each Fund paid a net investment income dividend on September 30, 2009 to shareholders of record on September 15, 2009 as follows:

	Common Dividend Per Share
COY	$0.061
CYE	$0.055
DSU	$0.031
FRB	$0.081
ARK	$0.025

Management’s evaluation of the impact of all subsequent events on the Funds’ financial statements was completed through October 29, 2009, the date the financial statements were issued.

62 SEMI-ANNUAL REPORT AUGUST 31, 2009

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 14, 2009 and May 28 – 29, 2009 to consider the approval of its respective 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 its respective Fund, the Manager and BlackRock Financial Management, Inc. (the “Sub-Advisor”). 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.” Unless otherwise indicated, references to actions taken by the “Board” or the “Boards” shall mean each Board acting independently with respect to its respective Fund.

Activities and Composition of the Boards

Each Board consists of twelve individuals, ten of whom are not “interested persons” of the Funds as defined in the Investment Company Act of 1940, as amended (the “1940 Act”) (the “Independent Board Members”). The Board Members of each Fund are responsible for the oversight of the operations of such 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 each Board is an Independent Board Member. Each Board has 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 has one interested Board Member) and is chaired by an Independent Board Member. In addition, each Board has established an Ad Hoc Committee on Auction Market Preferred Shares.

The Agreements

Pursuant to the 1940 Act, each Board is required to consider the continuation of the Agreements on an annual basis. In connection with this process, each Board assessed, among other things, the nature, scope and quality of the services provided to its respective Fund 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.

Throughout the year, the Boards, acting directly and through their committees, consider at each of their meetings factors that are relevant to their annual consideration of the renewal of the Agreements, including the services and support provided by BlackRock to the Funds and their shareholders. Among the matters the Boards 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 and portfolio managers’ analysis of the reasons for any outperformance or underperformance against its peers; (b) fees, including advisory and other amounts paid to BlackRock and its affiliates by the Funds for services such as call center and fund accounting; (c) the Funds’ operating expenses; (d) the resources devoted to, and compliance reports relating to, the Funds’ investment objectives, policies and restrictions; (e) the Funds’ compliance with their 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 the Funds’ valuation and liquidity procedures; and (k) periodic updates on BlackRock’s business.

Board Considerations in Approving the Agreements

The Approval Process: Prior to the April 14, 2009 meeting, each Board requested and received materials specifically relating to the Agreements. Each Board is engaged in an ongoing process with BlackRock to continuously 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, as well as the performance of such other clients; (d) the impact of economies of scale; (e) a summary of aggregate amounts paid by each Fund to BlackRock; and (f) an internal comparison of management fees classified by Lipper, if applicable.

SEMI-ANNUAL REPORT AUGUST 31, 2009 63

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)

At an in-person meeting held on April 14, 2009, each Board reviewed materials relating to its consideration of the Agreements. As a result of the discussions that occurred during the April 14, 2009 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 28 – 29, 2009 Board meeting.

At an in-person meeting held on May 28 – 29, 2009, each Fund’s Board, including the Independent Board Members, unanimously approved the continuation of the Advisory Agreement between the Manager and such Fund and the Sub-Advisory Agreement between such Fund, the Manager and the Sub-Advisor, each for a one-year term ending June 30, 2010. The Boards considered all factors they believed relevant with respect to the Funds, including, among other factors: (a) the nature, extent and quality of the services provided by BlackRock; (b) the investment performance of the Funds and BlackRock portfolio management; (c) the advisory fee and the cost of the services and profits to be realized by BlackRock and certain affiliates from the relationship with the Funds; (d) economies of scale; and (e) other factors.

Each Board also considered other matters it deemed important to the approval process, such as services related to the valuation and pricing of its respective Fund’s portfolio holdings, direct and indirect benefits to BlackRock and its affiliates and significant shareholders from their relationship with such Fund and advice from independent legal counsel with respect to the review process and materials submitted for the Board’s 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: Each Board, including its Independent Board Members, reviewed the nature, extent and quality of services provided by BlackRock, including the investment advisory services and the resulting performance of its respective Fund. Throughout the year, each Board compared its respective Fund’s performance to the performance of a comparable group of closed-end funds, and the performance of at least one relevant benchmark, if any. The Boards met with BlackRock’s senior management personnel responsible for investment operations, including the senior investment officers. Each Board also reviewed the materials provided by its respective Fund’s portfolio management team discussing such Fund’s performance and such Fund’s investment objective, strategies and outlook.

Each Board considered, among other factors, the number, education and experience of BlackRock’s investment personnel generally and its respective 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 and BlackRock’s approach to training and retaining portfolio managers and other research, advisory and management personnel. Each Board also reviewed a general description of BlackRock’s compensation structure with respect to its respective Fund’s portfolio management team and BlackRock’s ability to attract and retain high-quality talent.

In addition to advisory services, each Board considered the quality of the administrative and non-investment advisory services provided to its respective Fund. BlackRock and its affiliates and significant shareholders provide the Funds with certain administrative and other services (in addition to any such services provided to the Funds by third parties) and officers and other personnel as are necessary for the operations of the Funds. In addition to investment advisory services, BlackRock and its affiliates provide the Funds 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 the Funds; (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 the Funds, 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: Each Board, including its Independent Board Members, also reviewed and considered the performance history of its respective Fund. In preparation for the April 14, 2009 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 its review, each Board received and reviewed information regarding the investment performance of its respective Fund as compared to a representative group of similar funds as determined by Lipper and to all funds in such Fund’s applicable Lipper category. Each Board was provided with a description of the methodology used by Lipper to select peer funds. Each Board regularly reviews the performance of its respective Fund throughout the year.

64 SEMI-ANNUAL REPORT AUGUST 31, 2009

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (continued)

The Board of COY noted that although COY underperformed its Peers in at least two of the one-, three- and five-year periods reported, such underper-formance was not greater than 10% of the median return of its Peers for any of the periods. The Board concluded that BlackRock was committed to providing the resources necessary to assist the portfolio managers and to continue improving COY’s performance. Based on its review, the Board generally was satisfied with BlackRock’s efforts to manage COY.

The Board of CYE noted that CYE performed below the median of its Lipper performance universe in the one-, three- and five-year periods reported. The Board and BlackRock reviewed the reasons for CYE’s underperformance during these periods compared with its Peers. The Board was informed that, among other things, exposure to senior bank loans negatively impacted returns. Additionally, CYE’s underweight to BB-rated credits and overweight to CCC-rated credits subtracted from returns as higher quality below investment-grade bonds strongly outperformed their lower quality counterparts.

The Board of DSU noted that DSU performed below the median of its Lipper performance universe in the one-, three- and five-year periods reported. The Board and BlackRock reviewed the reasons for DSU’S underperformance during these periods compared with its Peers. The Board was informed that, among other things, the pressure on bank loan and high yield prices during the period negatively impacted performance.

The Board of ARK noted that ARK performed below the median of its Lipper performance universe in the one-, three- and five-year periods reported. The Board and BlackRock reviewed the reasons for ARK’s underperformance during these periods compared with its Peers. The Board was informed that, among other things, ARK was underweight higher-rated BB-rated securities as a function of its bottom-up security selection process, which impacted performance as higher-rated credits outperformed lower-rated ones by a substantial margin.

For CYE, DSU and ARK, the Board of each respective Fund and BlackRock discussed BlackRock’s commitment to providing the resources necessary to assist the portfolio managers and to improve each such Fund’s performance.

The Board of FRB noted that in general FRB performed better than its Peers in that FRB’s performance was at or above the median of its Lipper Performance Universe in each of the one-year, three-year and since inception periods reported.

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: Each Board, including its Independent Board Members, reviewed its respective Fund’s contractual advisory fee rates compared with the other funds in its respective Lipper category. Each Board also compared its respective Fund’s total expenses, as well as actual management fees, to those of other comparable funds. Each Board 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 the Funds. The Boards were also provided with a profitability analysis that detailed the revenues earned and the expenses incurred by BlackRock for services provided to the Funds. The Boards reviewed BlackRock’s profitability with respect to the Funds and other funds the Boards currently oversee for the year ended December 31, 2008 compared to available aggregate profitability data provided for the year ended December 31, 2007. 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 by the Manager, the types of funds managed, expense allocations and business mix, and therefore comparability of profitability is somewhat limited.

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 is available, the Boards considered BlackRock’s overall operating margin compared to the operating margin for leading investment management firms whose operations include advising closed-end funds, among other product types. The comparison indicated 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, which concluded 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 the Funds by BlackRock, and BlackRock’s and its affiliates’ profits relating to the management and distribution of the Funds 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 the Funds. 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.

Each Board noted that its respective Fund paid contractual management fees, which do not take into account any expense reimbursement or fee waivers, lower than or equal to the median contractual management fees paid by such Fund’s Peers.

D. Economies of Scale: Each Board, including its Independent Board Members, considered the extent to which economies of scale might be realized as the assets of its respective Fund increase and whether there should be changes in the advisory fee rate or structure in order to enable such Fund to participate in these economies of scale, for example through the use of breakpoints in the advisory fee based upon the assets of such Fund. The Boards considered that the funds in the BlackRock fund complex share some common resources and, as a result, an increase in the overall size of the complex could permit each fund to incur lower expenses than it would otherwise as a stand-alone entity. The Boards also considered BlackRock’s overall operations and its efforts to expand the scale of, and improve the quality of, its operations.

SEMI-ANNUAL REPORT AUGUST 31, 2009 65

Disclosure of Investment Advisory Agreements and Sub-Advisory Agreements (concluded)

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 used a complex-level breakpoint structure.

E. Other Factors: The Boards also took into account other ancillary or “fallout” benefits that BlackRock or its affiliates and significant shareholders may derive from their relationship 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 the Funds, including for administrative and distribution services. The Boards also noted that BlackRock may use third-party research obtained by soft dollars generated by certain mutual fund transactions to assist itself in managing all or a number of its other client accounts.

In connection with their 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.

Conclusion

Each Board, including its Independent Board Members, unanimously approved the continuation of the Advisory Agreement between its respective Fund and the Manager for a one-year term ending June 30, 2010 and the Sub-Advisory Agreement between such Fund, the Manager and Sub-Advisor for a one-year term ending June 30, 2010. Based upon its evaluation of all these factors in their totality, each Board, including its Independent Board Members, was satisfied that the terms of the Agreements were fair and reasonable and in the best interest of its respective Fund and its shareholders. In arriving at a decision to approve the Agreements, each Board 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 reflects the results of several years of review by such Fund’s 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.

66 SEMI-ANNUAL REPORT AUGUST 31, 2009

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

G. Nicholas Beckwith, III, Director

Richard S. Davis, Director

Kent Dixon, Director

Frank J. Fabozzi, Director

Kathleen F. Feldstein, Director

James T. Flynn, Director

Henry Gabbay, Director

Jerrold B. Harris, Director

R. Glenn Hubbard, Director

W. Carl Kester, Director

Anne F. Ackerley, Fund President and Chief Executive Officer

Brendan Kyne, Vice President

Neal J. Andrews, Chief Financial Officer

Jay M. Fife, Treasurer

Brian P. Kindelan, Chief Compliance Officer of the Funds

Howard B. Surloff, Secretary

Investment Advisor

BlackRock Advisors, LLC

Wilmington, DE 19809

Sub-Advisor

BlackRock Financial Management, Inc.

New York, NY 10022

Custodians

JPMorgan Chase Bank, N.A.¹

Brooklyn, NY 11245

State Street Bank and Trust Company²

Boston, MA 02101

The Bank of New York Mellon³

New York, NY 10286

Transfer Agents

BNY Mellon Shareowner Services³

Jersey City, NJ 07310

Computershare Trust Company, N.A.^1,2

Providence, 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.

Effective July 31, 2009, Donald C. Burke, President and Chief Executive Officer of the Funds retired. The Funds’ Board of Directors wishes Mr. Burke well in his retirement.

Effective August 1, 2009, Anne F. Ackerley became President and Chief Executive Officer of the Funds, and Brendan Kyne became Vice President of the Funds.

SEMI-ANNUAL REPORT AUGUST 31, 2009 67

Additional Information

Proxy Results

The Annual Meeting of Stockholders was held on August 26, 2009 for stockholders of record on June 29, 2009 to elect director nominees of each Fund:

Approved the Directors as follows:

	G. Nicholas Beckwith, III		Richard E. Cavanagh		Richard S. Davis
	Votes For	Votes Withheld	Votes For	Votes Withheld	Votes For	Votes Withheld
COY	26,670,834	1,648,421	26,722,046	1,597,209	26,777,710	1,541,545
CYE	28,776,142	1,387,718	28,770,167	1,393,693	28,870,031	1,293,829
DSU	88,758,407	3,699,027	88,878,010	3,579,424	88,952,077	3,505,357
FRB	7,977,862	228,382	7,971,452	234,792	7,988,624	217,620
ARK	47,083,324	1,913,792	47,135,216	1,861,900	47,059,502	1,937,614
	Kent Dixon		Frank J. Fabozzi		Kathleen F. Feldstein
	Votes For	Votes Withheld	Votes For	Votes Withheld	Votes For	Votes Withheld
COY	26,638,222	1,681,033	26,774,192	1,545,063	26,549,392	1,769,863
CYE	28,823,011	1,340,849	28,867,410	1,296,450	28,711,394	1,452,466
DSU	88,671,374	3,786,060	88,895,092	3,562,342	88,368,815	4,088,619
FRB	7,950,205	256,039	7,972,163	234,081	7,970,077	236,167
ARK	47,071,664	1,925,452	47,095,945	1,901,171	46,972,864	2,024,252
	James T. Flynn		Henry Gabbay		Jerrold B. Harris
	Votes For	Votes Withheld	Votes For	Votes Withheld	Votes For	Votes Withheld
COY	26,495,906	1,823,349	26,697,583	1,621,672	26,627,684	1,691,571
CYE	28,777,421	1,386,439	28,885,028	1,278,832	28,847,723	1,316,137
DSU	88,674,548	3,782,886	88,911,501	3,545,933	88,653,555	3,803,879
FRB	7,985,949	220,295	7,979,862	226,382	7,990,624	215,620
ARK	47,046,551	1,950,565	47,078,056	1,919,060	46,996,096	2,001,020
	R. Glenn Hubbard		W. Carl Kester		Karen P. Robards
	Votes For	Votes Withheld	Votes For	Votes Withheld	Votes For	Votes Withheld
COY	26,725,170	1,594,085	26,732,347	1,586,908	26,658,979	1,660,276
CYE	28,812,143	1,351,717	28,865,727	1,298,133	28,741,180	1,422,680
DSU	88,821,475	3,635,959	88,897,867	3,559,567	88,660,254	3,797,180
FRB	7,972,788	233,456	7,980,365	225,879	7,980,573	225,671
ARK	47,110,141	1,886,975	47,096,675	1,900,441	47,171,393	1,825,723

Portfolio Management Change

COY, CYE, DSU, FRB and ARK are managed by a team of financial professionals. The portfolio managers are primarily responsible for the day-to-day management of the Funds’ portfolio. Effective May 8, 2009, James E. Keenan, Mitchell Garfin and Derek Schoenhofen are the portfolio managers for COY and CYE; Leland T. Hart, James E. Keenan and C. Adrian Marshall are the portfolio managers for DSU and ARK and Leland T. Hart and C. Adrian Marshall are the portfolio managers for FRA.

Mr. Garfin is Managing Director of BlackRock, Inc. since 2009; Director thereof from 2005 to 2009 and Vice President from 2001 to 2005.

Mr. Hart is Managing Director of BlackRock, Inc. since 2009; Partner of R3 Capital Partners in 2009 and Managing Director there of from 2008 to 2009; Managing Director of Lehman Brothers from 2006 to 2008 and Executive Director thereof of from 2003 to 2006.

Mr. Keenan is Managing Director of BlackRock, Inc. since 2008 and Director thereof from 2004 to 2008; Head of the Leveraged Finance Portfolio team; and senior high yield trader at Columbia Management Group from 2003 to 2004.

Mr. Marshall is Director of BlackRock, Inc. since 2007 and Vice President thereof from 2004 to 2007.

Mr. Schoenhofen is Director of BlackRock, Inc. since 2006 and Vice President thereof from 2000 to 2006.

68 SEMI-ANNUAL REPORT AUGUST 31, 2009

Additional Information (continued)

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 it 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 contact the Funds at (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 (202) 551-8090. 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 toll-free (800) 441-7762; (2) at 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 www.blackrock.com or by calling (800) 441-7762 and (2) on the SEC’s website at http://www.sec.gov.

Section 19 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.

	Total Cumulative Distributions for the Fiscal Year-to-Date						% Breakdown of the Total Cumulative Distributions for the Fiscal Year-to-Date
	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
COY	$0.366000	—			—	$0.366000	100	%	0	%	0	%	100%
CYE	$0.345000	—			—	$0.345000	100	%	0	%	0	%	100%
DSU	$0.201899	—		$	0.011101	$0.213000	95	%	0	%	5	%	100%
FRB	$0.581870	—		$	0.008230	$0.590100	99	%	0	%	1	%	100%
ARK	$0.150000	—			—	$0.150000	100	%	0	%	0	%	100%

SEMI-ANNUAL REPORT AUGUST 31, 2009 69

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.

70 SEMI-ANNUAL REPORT AUGUST 31, 2009

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 yield to Common Shareholders. Statements and other information herein are as dated and are subject to change.

	#CEF1-5-8/09

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 – The registrant’s Nominating and Governance Committee will consider nominees to the board of directors recommended by shareholders when a vacancy becomes available. Shareholders who wish to recommend a nominee should send nominations that include biographical information and set forth the qualifications of the proposed nominee to the registrant’s Secretary. There have been no material changes to these procedures.
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 13(a)-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 Debt Strategies Fund, Inc.
By:	/s/ Anne F. Ackerley
	Anne F. Ackerley
	Chief Executive Officer of
	BlackRock Debt Strategies Fund, Inc.
Date: October 22, 2009
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 Debt Strategies Fund, Inc.
Date: October 22, 2009
By:	/s/ Neal J. Andrews
	Neal J. Andrews
	Chief Financial Officer (principal financial officer) of
	BlackRock Debt Strategies Fund, Inc.
Date: October 22, 2009