PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

BLACKROCK PRINCIPAL PROTECTION L.P.

(a Delaware Limited Partnership)

STATEMENTS OF FINANCIAL CONDITION

	September 30,		December 31,
	2006		2005
	(unaudited)
ASSETS
Inves tment in Global Horizons	$	8,844,709	$	10,232,424
Receivable from Global Horizons	373,201		192,138

TOTAL ASSETS	$	9,217,910	$	10,424,562

LIABILITY AND PARTNERS’ CAPITAL LIABILITY:
Redemptions payable	$	373,201	$	192,138

PARTNERS’ CAPITAL:
General Partner (98,439 and 160,738 Units)	95,565		154,642
Limited Partners (9,012,270 and 10,475,025 Units)	8,749,144		10,077,782

Total partners ’ capital	8,844,709		10,232,424

TOTAL LIABILITY AND PARTNERS' CAPITAL	$	9,217,910	$	10,424,562

NET ASSET VALUE PER UNIT

(Based on 9,110,709 and 10,635,763 Units outs tanding)	$	0.9708	$	0.9621

See notes to financial statements.

BLACKROCK PRINCIPAL PROTECTION L.P.

(a Delaware Limited Partnership)

STATEMENTS OF OPERATIONS

(unaudited)

	For the three			For the three			For the nine			For the nine
	months ended			months ended			months ended			months ended
	September 30,			September 30,			September 30,			September 30,
	2006			2005			2006			2005
TRADING PROFITS (LOSSES):
Realized	$	(383,738	)	$	58,537		$	424,415		$	(76,270	)
Change in unrealized	(11,119		)	(10,163		)	(49,165		)	(19,897		)

Total trading profits (losses)	(394,857		)	48,374			375,250			(96,167		)

INVESTMENT INCOME:
Interest	121,766			99,790			354,428			248,714

EXPENSES:
Brokerage commissions	168,573			194,385			530,237			605,698
Administrative fees	5,813			6,703			18,284			20,886
Profit shares	(10,786		)	1,024			51,299			54,681

Total expenses	163,600			202,112			599,820			681,265

NET INVESTMENT LOSS	$	(41,834	)	$	(102,322	)	$	(245,392	)	$	(432,551	)

NET INCOME (LOSS)	$	(436,691	)	$	(53,948	)	$	129,858		$	(528,718	)

NET INCOME (LOSS) PER UNIT:

Weighted average number of General Partner and Limited Partner Units outstanding	9,386,501			11,398,625			9,934,806			11,973,787

Net income (loss) per weighted average General Partner and Limited Partner Unit	$	(0.0465	)	$	(0.0047	)	$	0.0131		$	(0.0442	)

Substantially all items of income and expense are derived from the investment in Global Horizons.

See notes to financial statements.

BLACKROCK PRINCIPAL PROTECTION L.P.

(a Delaware Limited Partnership)

STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

For the nine months ended September 30, 2006 and 2005

(unaudited)

			General			Limited
	Units		Partner			Partners			Total
PARTNERS’ CAPITAL, December 31, 2004	11,905,077		$	160,719		$	12,892,828		$	13,053,547

Convers ion of Units (Note 3)	1,149,203		19			714			733

Net loss	—		(6,611		)	(522,107		)	(528,718		)

Redemptions	(1,854,545	)	—			(1,786,434		)	(1,786,434		)

PARTNERS’ CAPITAL, September 30, 2005	11,199,735		$	154,127		$	10,585,001		$	10,739,128

PARTNERS’ CAPITAL, December 31, 2005	10,635,763		$	154,642		$	10,077,782		$	10,232,424

Net income	—		2,086			127,772			129,858

Redemptions	(1,525,054	)	(61,163		)	(1,456,410		)	(1,517,573		)

PARTNERS’ CAPITAL, September 30, 2006	9,110,709		$	95,565		$	8,749,144		$	8,844,709

See notes to financial statements.

BLACKROCK PRINCIPAL PROTECTION L.P.

(a Delaware Limited Partnership)

NOTES TO FINANCIAL STATEMENTS
(unaudited)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

In the opinion of management, the financial statements contain all adjustments necessary to present fairly the financial position of BlackRock Principal Protection L.P. (the “Partnership”) as of September 30, 2006, and the results of its operations for the three and nine months ended September 30, 2006 and 2005. The operating results for the interim periods may not be indicative of the results for the full year.

As of September 29, 2006, the Partnership’s general partner became BlackRock Investment Management, LLC (“BlackRock”). The former general partner was Merrill Lynch Alternative Investments (“MLAI”). Until September 29, 2006, MLAI was a wholly-owned subsidiary of Merrill Lynch Investment Managers LP (“MLIM”), which in turn was indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc. (“Merrill Lynch”). On September 29, 2006 Merrill Lynch and BlackRock, Inc. merged the asset management business of MLIM and BlackRock Inc. to create a new independent asset management company. This resulted in BlackRock becoming the general partner of the Partnership. At the same time, the Partnership’s name was changed from ML Principal Protection L.P. to BlackRock Principal Protection L.P. The partnership’s principal investment also changed its name from Global Horizons I L.P. to BlackRock Global Horizons I L.P. (formerly Global Horizons I L.P.). No changes have occurred to the Partnership’s investment objective or to the Partnership’s structure as a result of these changes.

Certain information and footnote disclosures normally included in annual financial statements prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) have been omitted. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Partnership’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2005.

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

2. INVESTMENTS

As of September 30, 2006 and December 31, 2005, the Partnership had an investment in BlackRock Global Horizons I L.P. (“Global Horizons”), (formerly Global Horizons I L.P.), of $8,844,709 and $10,232,424, respectively. As of September 30, 2006 and December 31, 2005, the Partnership’s percentage ownership share of Global Horizons was 3.73% and 3.81%, respectively.

Condensed statements of financial condition and statements of operations for Global Horizons are set forth as follows:

	September 30,		December 31,
	2006		2005
	(unaudited)

Assets	$	244,020,536	$	280,475,255

Liabilities	$	7,050,485	$	11,889,388
Partners' Capital	236,970,051		268,585,867

Total Liabilities and Partners' Capital	$	244,020,536	$	280,475,255

	For the three months ended September 30, 2006			For the three months ended September 30, 2005			For the nine months ended September 30, 2006		For the nine months ended September 30, 2005
	(unaudited)			(unaudited)			(unaudited)		(unaudited)

Trading Profits (Losses) and Interest Income	$	(7,213,610	)	$	3,831,311		$	18,585,662	$	5,413,227

Expenses	4,600,423			4,903,366			16,175,361		14,799,223

Net Income (Loss)	$	(11,814,033	)	$	(1,072,055	)	$	2,410,301	$	(9,385,996	)

3. FAIR VALUE AND OFF-BALANCE SHEET RISK

The Partnership invests indirectly in derivative instruments as a result of its investment in Global Horizons, but does not itself hold any derivative instrument positions. The nature of this Partnership has certain risks which cannot be presented on the financial statements. The following summarizes some of those risks resulting from its investment in Global Horizons.

Market Risk

Derivative instruments involve varying degrees of off-balance sheet market risk. Changes in the level or volatility of interest rates, foreign currency exchange rates or the market values of the financial instruments or commodities underlying such derivative instruments frequently result in changes in the Partnership’s allocation of net unrealized profit (loss) on such derivative instruments as reflected in the Statements of Financial Condition of Global Horizons. The Partnership’s exposure to market risk is influenced by a number of factors, including the relationships among the derivative instruments held by Global Horizons as well as the volatility and liquidity of the markets in which such derivative instruments are traded.

BlackRock has procedures in place intended to control market risk exposure, although there can be no assurance that they will, in fact, succeed in doing so. These procedures focus primarily on monitoring the trading of the trading advisors (“Advisors”), calculating the Net Asset Value of the Partnership as of

the close of business on each day and reviewing outstanding positions, or itself reallocate Partnership assets among Advisors (although typically only as of the end of a month) for over-concentrations. While BlackRock does not itself intervene in the markets to hedge or diversify the Partnership’s market exposure, BlackRock may urge the Advisors to reallocate positions in an attempt to avoid over-concentrations. Except in cases in which it appears that the Advisors have begun to deviate from past practice or trading policies or to be trading erratically, BlackRock’s basic risk control procedures consist simply of the ongoing process of advisor monitoring, with the market risk controls being applied by the Advisors themselves. Prior to September 29, 2006, these procedures were performed by MLAI.

Credit Risk

The risks associated with exchange-traded contracts are typically perceived to be less than those associated with over-the-counter (non-exchange-traded) transactions, because exchanges typically (but not universally) provide clearinghouse arrangements in which the collective credit (in some cases limited in amount, in some cases not) of the members of the exchange is pledged to support the financial integrity of the exchange. In over-the-counter transactions, on the other hand, traders must rely solely on the credit of their respective individual counterparties. Margins, which may be subject to loss in the event of a default, are generally required in exchange trading, and counterparties may require margin in the over-the-counter markets.

The Partnership, through Global Horizons, has credit risk with respect to non-performance of its counterparties and brokers, but attempts to mitigate this risk by dealing almost exclusively with Merrill Lynch entities as clearing brokers.

The Partnership, through Global Horizons, in its normal course of business, enters into various contracts, with Merrill Lynch Pierce Fenner & Smith (“MLPF&S”) acting as its commodity broker. Pursuant to the brokerage agreement with MLPF&S (which includes a netting arrangement), to the extent that such trading results in receivables from and payables to MLPF&S, these receivables and payables are offset and reported as a net receivable or payable in the financial statements of Global Horizons in the equity in commodity futures trading accounts in the Statements of Financial Condition.

4. RECENT ACCOUNTING PRONOUNCEMENTS

In July 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48 (“FIN 48”) entitled “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109”. FIN 48 prescribes the minimum recognition threshold a tax position must meet in connection with accounting for uncertainties in income tax positions taken or expected to be taken by an entity before being measured and recognized in the financial statements. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006. The impact on the Partnership financial statements, if any, is currently being assessed.

In September 2006, the SEC staff also issued Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements” (“SAB 108”). While not an official rule or interpretation of the SEC, SAB 108 was issued to address the diversity in practice in quantifying misstatements from prior years and assessing their effect on current year financial statements. SAB 108 is effective for the first annual period ending after November 15, 2006, with early application encouraged. The Partnership has assessed the impact of SAB 108 on its financial statements and does not expect the impact of adoption to be material to its financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“FAS 157”). FAS 157 establishes a common definition for fair value under accounting principles generally accepted in the United States of America, establishes a framework for measuring fair value and expands disclosure requirements about such fair value measurements. FAS 157 is effective for fiscal years beginning after November 15, 2007. The Partnership is currently evaluating the impact of adopting FAS 157 on its financial statements.

5. SUBSEQUENT EVENT

Effective October 1, 2006, Edward Rzeszowski and Michael Pungello were appointed the President and Chief Financial Officer, respectively, of the Partnership.

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

MONTH-END NET ASSET VALUE PER UNIT

	Jan.	Feb.	Mar.	Apr.	May	Jun.	Jul.	Aug.	Sep.
2005	$0.9659	$0.9763	$0.9788	$0.9514	$0.9519	$0.9634	$0.9474	$0.9607	$0.9589
2006	$0.9829	$0.9752	$0.9927	$1.0242	$1.0215	$1.0162	$0.9990	$0.9751	$0.9708

Performance Summary

All of the Partnership’s assets are invested in Global Horizons. The Partnership recognizes trading profits or losses as an investor in Global Horizons. The following commentary describes the trading results of Global Horizons.

January 1, 2006 to September 30, 2006

January 1, 2006 to March 31, 2006

The Partnership posted a gain for the first quarter. Gains in interest rates, metals and stock indices sectors outweighed losses experienced in the agricultural, energy and currencies sectors.

The largest gains were posted in the interest rate sector. Short positions in Eurodollars, the front end of the U.S. curve, and in German bunds, Japanese government bonds and U.S. Treasuries all drove performance. The short positions to the U.S. profited due to higher interest rates as a result of increased inflationary pressure. U.S Treasuries contributed as markets declined on stronger than expected consumer confidence and rising inflationary fears.

The metals sector posted a gain for the Partnership despite losses realized mid-quarter. Metals rallied due to base and precious metal holdings. Long gold positions profited as investors continued to use gold as a hedge against a weakening U.S. dollar. Aluminum and zinc both rallied early in the quarter due to global growth and supply issue. Precious and base metals contributed to performance through long positions to gold, silver and copper as demand increased.

Trading in stock indices also posted gains throughout the quarter. Strong domestic and international markets contributed to performance. The increased volatility in the European markets provided increased opportunities for short-term trend followers. The Partnership continued to maintain a long bias to global equities. Japan and European exposures led performance as markets rallied, while U.S. exposures slightly detracted from performance.

Trading in agricultural commodities contributed to losses during the quarter despite small gains in the latter part of the quarter. Short positions in coffee and long positions in corn detracted from performance mid-quarter. Some losses were mitigated through long positions in sugar as demand grew for ethanol, a

sugar by product. Detracting from performance were long exposures to the soybean complex. Contributing slightly in March were gains resulting from short positions in coffee and the meat complex as prices continued to decrease.

Trading in the energy sector posted losses throughout the quarter. Crude oil rallied due to geopolitical issues but was not enough to offset losses from the decline in refined products, such as unleaded and heating oil. Crude oil suffered mid-quarter as prices declined amid increased supply. Geopolitical issues led to increased volatility within the sector. This caused gasoline prices to surge as supply decreased reversing the downward price trend experienced earlier in the quarter.

The currencies sector was the sector with the weakest performance for the Partnership, despite small gains early in the quarter. Foreign exchange contributed positively to the Partnership as the U.S. dollar weakened throughout the month due to the continuation of December’s carry trade reversal and the continued expectation for the slowdown of the U.S. Federal Reserve. Contributing to performance was long Canadian dollar and British pound positions, while detracting from performance was positions in the Euro and Swiss franc. Long positions in the Mexican peso and short Euro positions contributed to performance as well. Foreign exchange detracted due to strong reversals in March. Long exposures to the Mexican peso, Japanese yen, Canadian dollar and the British pound during the choppy market conditions all contributed to losses.

April 1, 2006 to June 30, 2006

The Partnership posted a gain for the second quarter. Gains in interest rates, metals, currencies, and energy sectors outweighed losses experienced in the stock indices and agricultural sectors.

The largest gains were posted in the interest rate sector. Performance was driven in the fixed income sector through short positions to global interest rates, specifically short positions to U.K. gilts and German bunds. Short positions to the Euro also contributed to speculation that the European Central Bank would raise rates throughout the year. Short exposures to global interest rates, particularly Japan and Europe, slightly detracted from gains mid-quarter as global bond prices rallied. Short fixed income positions benefited, particularly short exposures to European rates, to the U.S. ten-year and to short end of the Eurodollar.

The metals sector posted significant gains for the Partnership early in the quarter as gold rallied above $650 per ounce and copper rallied on strong global growth, particularly booming demand from China and potential mining disruptions. Silver also contributed based on speculation that Barclays bank would offer a Silver Exchange Traded Fund (ETF). Long positions in base metals, such as nickel and aluminum also contributed to profits.

Trading in the currencies sector also posted a gain for the Partnership despite losses realized at quarter end. Long positions in the British pound and the Canadian dollar contributed to performance, while exposures to the Australian dollar and Euro slightly detracted. The U.S. dollar fell based on narrowing interest rate differentials and anticipation that the U.S. Federal Reserve would soon end its rate hike cycle. The U.S. dollar also declined against both the Euro and Japanese yen as the market participants expected rate increases to occur at a quicker pace in Europe and Japan than in the U.S. Losses later in the quarter resulted from short positions to the U.S. dollar versus the British pound and the Canadian dollar.

The energy sector posted moderate gains for the quarter. Long positions held in unleaded gas rallied and crude oil increased above $75 a barrel based on geopolitical uncertainty. Energy was then flat through

mid-quarter as prices retreated off recent highs. Long positions to crude oil continued to contribute, while short positions to natural gas detracted as prices spiked.

Trading in the stock indices sector contributed to losses despite small gains at the open of the quarter. Throughout the quarter, global equity volatility remained high, driven by pending Federal Open Market Committee (FOMC) decision that occurred late in the quarter. Long equity positions, primarily exposures to the Australian and U.S. markets, profited as markets rallied early in the quarter. These gains were later taken back as the markets declined sharply as it became apparent that additional U.S. rate hikes would occur. Losses continued as managers reduced their long positions as global markets sold off.

The agricultural commodities sector had losses throughout the quarter. Short positions to cotton profited as prices sold off. However, small losses occurred across other markets due to choppy conditions. Exposures to corn, cattle, and sugar added losses. Long positions to corn and wheat declined as prices sold off based on weather and harvest expectations.

July 1, 2006 to September 30, 2006

The Partnership posted a trading loss for the third quarter. There were slight gains trading in the stock indices sector, however there were losses posted in metals, agriculture, currencies, energy, and interest rates sectors.

Gains were posted in the stock indices sector. Equity indices were volatile and trendless toward the beginning of the quarter. This led to small losses, primarily in long exposures to the German and U.S. markets. Around mid-quarter, global equities indices rallied on news that tensions in the Middle East were abating, energy prices were coming down, the U.S. Federal Reserve would continue to pause increases in Federal Funds rate, and the U.S. economy continued to show improvements. Short positions mid-quarter led to losses while long positions only slightly detracted. Equities surged in the latter part of the quarter benefiting from an improved housing report showing that new home sales rose in August from a 3-year low. An unexpected rebound in the U.S. consumer confidence further supported performance. This allowed the sector to post a gain for the quarter and erased earlier losses.

The metals sector posted moderate losses for the Partnership despite being up early in the quarter. Significant exposure to nickel and gold led to early gains. Base metals made headway, despite low trading volumes. Gold rallied as investors sought a safe-haven investment. Later, losses were incurred through short positions to silver as it rose to its highest price since May. The sector made ground through long positions in nickel as it rose because of a shortage of metal used in stainless steel and increased global demand. Towards quarter end metals detracted from performance. Long exposures across the sector, which suffered waves of selling as signs of inflation and the health of the U.S. economy tapered off, resulted in negative returns. Copper prices fell on news of the slowing economy and gold was down 21% from a 26-year high set in May as risk of accelerating inflation eased.

Trading in agricultural commodities also posted a loss for the Partnership due to early losses which tapered off by quarter end. Cocoa detracted from performance as it retreated from its upward trend and reversed significantly as market participants thought recent highs were based merely on speculative buying, rather than on supply and demand conditions. U.S. soybean and corn crops improved as rains relieved stress caused by weeks of dry weather. These gains were mitigated through short positions in hogs and cattle and long exposures to the grain complex. Later in the quarter the sector was essentially flat as losses in a short corn position were offset by profits from a short sugar trade. Corn and soybean prices rose over 13% for the month of September, the most since December 2005, due to rainy weather in

the U.S. Midwest. Sugar, the best-performing commodity in 2005, has dropped 44% since February 3rd as production expands in Brazil and India, the world’s biggest cane growers.

The currencies sector posted a loss for the quarter. Slower growth reversed the chance of a rate hike in the U.S., which negatively impacted the U.S. dollar. Long positions to the Japanese yen and Canadian dollar detracted. A short position in the British pound was the worst performer as the British pound touched a 14th month high vs. the Euro on anticipation the interest rate gap between the U.K. and the Euro region will widen. The British pound also gained against the U.S. dollar on speculation the interest-rate gap between Britain and the U.S. will narrow.

Trading in the energy sector contributed further losses to the Partnership. Crude oil futures rose sharply early in the quarter under the fear that fighting would spread throughout the Middle East, but later sold-off causing small losses. Natural gas, also rallied early as demand for electricity spiked during the heat wave in the U.S. Losses were later incurred as both crude oil and natural gas reversed the strengthening trend that existed earlier. Crude oil was down due to the end of the driving season and decreased tensions with Iran. Natural gas plummeted as mild weather reduced demand for the fuel from power generators. Nearing quarter end the sector losses continued through long positions to crude oil and gas oil. Crude oil declined on concerns that supplies increased and signs that the standoff with Iran over its nuclear program may be nearing resolution.

The interest rates sector was the worst performing sector with losses throughout the quarter. The beginning of the quarter proved to be a difficult environment for the Partnership as speculation over the U.S. interest rate policy and geo-political events created an environment of heightened volatility and a reversal of some larger long term trends. Fixed income markets rallied on expectations that further rate hikes would be put on hold as the U.S. economy slowed. This reversed the downward trend in the sector, resulting in losses through exposures to global interest rates. Treasury yields declined on speculation the U.S. Federal Reserves’ previous rate increases will prove so damaging to the housing market that the economic growth will slow more sharply than expected. Poor performance was also seen through short positions to the U.S. 5 and 10 year Notes and to the 30 year Treasury bond.

One of the Trading Advisors, Bridgewater, was removed from Global Horizons as of September 20, 2006. Bridgewater has recently started an initiative to close the majority of their managed accounts in order to remain less transparent to the marketplace. Bridgewater was replaced with Cornerstone Quantitative Investment Group’s International Value and Real Commodity Analysis programs. The program utilizes a systematic approach to trading both financial and physical futures markets. Multiple fundamental factors are used to forecast a markets expected return, which determines a markets’ long or short exposure.

January 1, 2005 to September 30, 2005

January 1, 2005 to March 31, 2005

The Partnership posted a loss for the first quarter. Losses in the currency and global equity sectors outweighed gains experienced in the agricultural sector.

The interest rate sector was the best performing sector for the Partnership. The Partnership benefited from long U.S. dollar positions versus the Euro and long Euro and Japanese fixed incomes. Systematic, long-term trend followers also posted gains in the interest rate sector.

The energy sector was the second highest performing sector for the Partnership. Gains were experienced in the energy sector as the Partnership benefited from long positions in crude oil and gas as these industries profited. Gains were also posted in long crude oil and heating oil positions.

The agricultural sector also performed well for the quarter. Gains were experienced from long positions in cattle and hog markets. Short grain positions and long soybean positions detracted from performance mid-quarter. However, the quarter ended with gains posted due to coffee, which experienced a lack of supply and a growing demand.

The metals sector posted a gain for the quarter. The Partnership benefited from long positions in base and precious metals, such as gold, copper and zinc.

The stock indices sector posted a loss for the quarter. Losses occurred in the beginning of the quarter due to a trend reversal from long global equities to short global equities. Profits were made through long positions on the FTSE index and Asian equities. Stock indices contributed negatively to performance as the equity markets declined at the end of the quarter.

The currency sector posted the greatest loss for the Partnership. Losses at the beginning of the quarter were due to a trend reversal from short U.S. dollar positions to long U.S. dollar positions. Long Japanese yen and Swiss franc positions also experienced losses. With the U.S. Federal Reserve expressing concern about inflation, investors predicted that interest rates and the U.S. dollar would rise. This caused losses as investors fled from emerging currencies. Long Australian dollar and Mexican peso positions also contributed to negative performance.

April 1, 2005 to June 30, 2005

The Partnership experienced gains in the interest rates and currencies sectors and losses in the remaining sectors.

Trading in interest rates posted gains for the Partnership, despite losses early in the quarter. The Partnership benefited from long positions in the ten-year German bund. The long positions held by the Partnership in European and Japanese government bonds contributed to gains as well.

The currencies sector posted a gain as well for the quarter. Long positions in the British pound and Australian dollar contributed early on in the quarter. Short positions to the British pound, Swiss franc and Euro enabled the Partnership to capitalize on trend reversals in the market in the latter half of the quarter.

Trading in stock indices attributed to overall trading losses for the Partnership despite gains posted in the second two months of the quarter. As equity markets declined, the stock indices market posted losses. Short positions of domestic equities slightly offset some of the gains attributed to global and European equities. Profits from long exposure in the European and U.S. equities were not enough to offset the losses incurred earlier in the quarter.

Trading in agricultural commodities posted losses for the quarter. Gains in exposure to hogs and soybeans were not enough to offset trading losses in other commodities. Long exposure to soymeal attributed to the losses as well.

Losses were posted throughout the quarter in the metals sector. Long positions in base metals detracted from performance. Complex base metals detracted from performance as well.

The energy sector posted the largest losses for the quarter. Crude oil and heating oil declined as crude oil fell in price, which negatively impacted trend followers.

July 1, 2005 to September 30, 2005

The Partnership posted positive trading results, although the Partnership as a whole suffered losses for the third quarter. The energy sector generated the most gains, followed by stock indices and metals sectors. Trading losses were posted in the agriculture, currencies and interest rates sectors.

In August, large gains posted in the energy sector attributed to the majority of the Partnership’s profits. Long energy positions in the entire energy complex, as well as a rally in the energy sector due to Hurricane Katrina attributed to those gains.

Trading in stock indices posted gains for the quarter despite small losses posted in August. Long positions in global equities contributed to profits early in the quarter as global markets rallied. Long European equities and Japanese Nikkei positions contributed to the profits in the latter part of the quarter.

Gains were also posted in the metals sector. Long metal positions, specifically copper, contributed as global growth increased speculation that demand, and therefore prices, would increase.

Trading in agricultural commodities posted a loss for the quarter. Short exposure to corn and long exposure to London coffee detracted from performance across the agricultural complex. Gains in London sugar and cotton were offset by losses in hogs and the soybean complex.

Losses were also posted from trading in the currency sector despite gains posted in September. China’s revaluation of the yuan caused volatility across the currency markets. The U.S. dollar weakened based on higher oil prices and the potential Federal Reserve slowdown in September. British pounds detracted from performance in the foreign sector. Gains from long Australian dollar and short Euro positions were not enough to offset the losses.

Trading in the interest rate sector posted the largest losses for the quarter. A rally in bond prices attributed to losses. Long positions in Japanese and European government bonds as well as German Bunds further detracted from performance.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable

Item 4. Controls and Procedures

BlackRock, the General Partner of BlackRock Global Horizons I L.P., with the participation of the Partnership’s Chief Principal Officer and the Chief Financial Officer, has evaluated the effectiveness of the design and operation of its disclosure controls and procedures with respect to the Partnership as of the end of the period of this quarterly report, and, based on this evaluation, has concluded that these disclosure controls and procedures are effective.

On September 29, 2006, Merrill Lynch & Co., Inc. (“ML & Co.”) combined (the “Transaction”) various ML & Co. asset management subsidiaries with BlackRock, Inc. (“Old BlackRock”) to form a new asset management company (“BlackRock”). Under the Transaction agreement, among other things, ML & Co. contributed the entities and assets that constitute Merrill Lynch Investment Managers to form BlackRock.

As part of the Transaction, Merrill Lynch Investment Managers LLC, which is registered with National Futures Association (“NFA”) as a commodity pool operator was transferred to BlackRock and changed its name to BlackRock Investment Management, LLC. Immediately prior to the closing of the Transaction, the Registrant’s investment management arrangements were assigned from Merrill Lynch Alternative Investments, LLC (“MLAI”) to Merrill Lynch Investment Managers, LLC. Therefore, since the closing of the Transaction, the Registrant has been managed by BlackRock Investment Management, LLC (“BRIM”) which replaced Merrill Lynch Alternative Investments, LLC as the general partner of the Registrant. The terms of the Registrant’s investment management arrangement, and of an investment in the Registrant, have not been and will not otherwise be changed.

Other than the Transaction, which is described above, there were no significant changes in the Partnership’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings

Neither the Partnership nor BlackRock, have ever been the subject of any material litigation.

Item 2.	Changes in Securities and Use of Proceeds

	(a)	None.
	(b)	None.
	(c)	None.
	(d)	None.

Item 3.	Defaults Upon Senior Securities

	None.

Item 4.	Submission of Matters to a Vote of Security Holders

	None.

Item 5.	Other Information

	None.

Item 5(a)	Recent Sales of Unregistered Securities; Uses of Proceeds From Registered Securities:

	Not applicable.

Item 6.	Exhibits

	The following exhibits are incorporated by reference or are filed herewith to this Quarterly Report on form 10-Q:

31.01 and

31.02 Rule 13a-14(a)/15d-14(a) Certifications

Exhibit 31.01

and 31.02: Are filed herewith.

32.01 and

32.02 Section 1350 Certifications

Exhibit 32.01

and 32.02: Are filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		BLACKROCK PRINCIPAL PROTECTION L.P.




	By:	BLACKROCK INVESTMENT MANAGEMENT, LLC
		(General Partner)




Date: November 14, 2006	By	/s/ EDWARD RZESZOWSKI
		Edward Rzeszowski
		President
		(Principal Executive Officer)




Date: November 14, 2006	By	/s/ MICHAEL L. PUNGELLO
		Michael L. Pungello
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

x		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2006

OR

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Delaware		13-3750642 (Registrant)
(State or other jurisdiction of		(IRS Employer Identification No.)
incorporation or organization)

	PART I	PAGE
Item 1.	Financial Statements	2

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14

Item 4.	Controls and Procedures	14

	PART II

Item 1.	Legal Proceedings	15

Item 2.	Changes in Securities and Use of Proceeds	15

Item 3.	Defaults Upon Senior Securities	15

Item 4.	Submission of Matters to a Vote of Security Holders	15

Item 5.	Other Information	15

Item 6.	Exhibits	15