UNITEDSTATES
SECURITIESANDEXCHANGECOMMISSION
Washington,D.C.20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number 811-08217

Name of Fund: BlackRock MuniHoldings New York Quality Fund, Inc. (MHN)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock
MuniHoldings New York Quality Fund, Inc., 55 East 52^nd Street, New York, NY 10055

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

Date of fiscal year end: 08/31/2011

Date of reporting period: 02/28/2011

Item 1 – Report to Stockholders

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February 28, 2011

Semi-Annual Report (Unaudited)

BlackRock Maryland Municipal Bond Trust (BZM)

BlackRock MuniHoldings New York Quality Fund, Inc. (MHN)

BlackRock New Jersey Municipal Bond Trust (BLJ)

BlackRock New York Municipal Income Quality Trust (BSE)

BlackRock New York Municipal Bond Trust (BQH)

BlackRock New York Municipal Income Trust II (BFY)

BlackRock Virginia Municipal Bond Trust (BHV)

The Massachusetts Health & Education Tax-Exempt Trust (MHE)

Not FDIC Insured • No Bank Guarantee • May Lose Value

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Table of Contents

 

2 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Dear Shareholder

Over the past 12 months, we have seen a sluggish, stimulus-driven economic recovery at long last gain real traction, accelerate, and transition into a con-
sumption-driven expansion. For the most part, 2010 was plagued with widely fluctuating economic data, but as the year drew to a close, it became clear
that cyclical stimulus had beaten out structural problems as economic data releases generally became more positive and financial markets showed signs
of continuing improvement. Although the sovereign debt crises and emerging market inflation that troubled the global economy in 2010 remain a challenge,
overall investor sentiment considerably improved. Near the end of the period, geopolitical tensions across the Middle East North Africa (“MENA”) region
along with rising oil prices introduced new cause for concern about the future of the global economy. As of this writing, economic news remains fairly
positive although we face additional uncertainties related to the aftermath of the devastating earthquake in Japan, with particular focus on the damage
to nuclear power plants.

In the United States, strength from the corporate sector and increasing consumer spending have been key drivers of economic growth, while the housing
and labor markets have been the heaviest burdens. While housing has yet to show any meaningful sign of improvement, labor statistics have delivered a
mixed bag month after month, but became increasingly encouraging toward the end of the period when the unemployment rate fell to its lowest level
since April 2009.

Global equity markets experienced uneven growth and high volatility over the course of 2010, but ended the year strong. Following a strong start to
2011, stocks lost their momentum on the back of geopolitical events in the MENA region and a sharp rise in oil prices. Overall, equities posted
strong returns for the 12-month period. US stocks outpaced most international markets and small cap stocks outperformed large caps as investors
moved into higher-risk assets.

Fixed income markets saw yields trend lower over most of 2010, until the fourth quarter brought an abrupt reversal in sentiment and risk tolerance that
drove yields sharply upward (pushing bond prices down) through year end. Improving economic data continued to pressure fixed income yields in 2011;
however, escalating geopolitical risks have acted as a counterweight, restoring relative stability to yield movements. Nevertheless, the yield curve
remained steep and higher-risk sectors outperformed the fixed income market.

The tax-exempt municipal market enjoyed a powerful rally during the period of low interest rates in 2010; however, when the yield trend reversed, the market
was dealt an additional blow as it became evident that the Build America Bond program would expire at year end. In addition, negative headlines regarding
fiscal challenges faced by state and local governments damaged investor confidence and further heightened volatility in the municipal market. Tax-exempt
mutual funds experienced heavy outflows, resulting in wider quality spreads and further downward pressure on municipal bond prices. These headwinds
began to abate as the period came to a close and municipals finally posted gains in February, following a five-month run of negative performance.

Cash investments, as represented by the 3-month Treasury bill, returned only a fraction over 0% for the 12-month period as short-term interest rates
remained low. Yields on money market securities remain near all-time lows.

While no one can peer into a crystal ball and eliminate the uncertainties presented by the economic landscape and financial markets, BlackRock can offer
investors the next best thing: partnership with the world’s largest asset management firm and a unique global perspective that allows us to identify trends
early and capitalize on market opportunities. For additional market perspective and investment insight, visit www.blackrock.com/shareholdermagazine, where
you’ll find the most recent issue of our award-winning Shareholder® magazine, as well as its quarterly companion newsletter, Shareholder Perspectives. As
always, we thank you for entrusting BlackRock with your investments, and we look forward to your continued partnership in the months and years ahead.

THIS PAGE NOT PART OF YOUR FUND REPORT 3

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Municipal Market Overview

As of February 28, 2011

The municipal market began the six-month period with yields at historic lows as investor concerns were focused on the possibility of deflation and a double-
dip in the US economy. However, as these fears soon abated, yields began drifting higher in October, and ultimately, a “perfect storm” of negative events
resulted in the worst quarterly performance that the municipal market has seen since the Fed tightening cycle of 1994. Treasury yields lost their support as
concerns about the US deficit raised questions over the willingness of foreign investors to continue to purchase Treasury securities, at least at the previous
historically low yields. Municipal valuations also suffered a quick and severe setback as it became evident that the Build America Bond (“BAB”) program
would expire at year-end. The program had opened the taxable market to municipal issuers, which had successfully alleviated supply pressure in the
traditional tax-exempt marketplace, bringing down yields in that space.

The financial media has been replete with interviews, articles and presentations publicizing the stress experienced in municipal finance, resulting in a loss
of confidence among retail investors who buy individual bonds or mutual funds. From the middle of November through year-end, funds specializing in
tax-exempt bonds witnessed weekly outflows averaging over $2.5 billion. Long-term and high-yield funds saw the greatest redemptions, followed by state-
specific funds to a lesser but still significant degree. Demand usually is strong at the beginning of a new year against a backdrop of low new-issue supply,
but the mutual fund outflows continued into February, putting additional upward pressure on municipal yields. Political uncertainty surrounding the midterm
elections and the approach taken by the new Congress on issues such as income tax rates and alternative minimum tax (and the previously mentioned
BAB non-extension) exacerbated the situation. All these conditions, combined with the seasonal illiquidity surrounding year-end holidays and dealers
closing their fiscal books, sapped willing market participation from the trading community.

As demand for municipal securities from traditional retail investors was declining and trading desk liquidity was being curtailed, there was no comparable
reduction in supply. As it became evident that the BAB program would be retired, issuers rushed deals to market both in the taxable municipal space and,
to a lesser degree, in the traditional tax-exempt space. This imbalance in the supply/demand technicals provided the classic market action, leading to wider
quality spreads and higher bond yields. The municipal curve steepened as the issuance was concentrated in longer (greater than 20-year) maturities. Curve
steepening that began in October accelerated in November, spurred on by Treasury weakness, heavy supply and record outflows. As measured by Thomson
Municipal Market Data, yields on AAA-rated municipals rose nearly 103 basis points (“bps”) for maturities 25 years and longer from August 31, 2010, to
February 28, 2011. The spread between two-year and 30-year maturities widened from 332 bps to 398 bps over the period.

The fundamental picture for municipalities will be subject to scrutiny for months to come, as the challenges to state and local budgets are real and need to
be addressed with significant cuts to expenses and tax revenue increases. The debates around austerity measures needed to succeed in balancing these
budgets are not over whether action needs to be taken, but over degree, approach and political will to accomplish these needs. The attention shone upon
municipal finance has the potential to improve this market for the future if these efforts result in greater means toward disclosure and accuracy (and timeli-
ness) of reporting. Early tests to judge progress will come soon as California, Illinois and Puerto Rico need to take austerity measures and access financing
in the municipal market to address relatively immediate fiscal imbalances. BlackRock favors a more constructive outlook for the municipal market as the
typical, and this year particularly atypical, weakness passes.

4 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Trust Summary as of February 28, 2011 BlackRock Maryland Municipal Bond Trust

Trust Overview

BlackRock Maryland Municipal Bond Trust’s (BZM) (the “Trust”) investment objective is to provide current income exempt from regular federal income
taxes and Maryland personal income taxes. The Trust seeks to achieve its investment objectives by investing primarily in municipal bonds exempt from
federal income taxes (except that the interest may be subject to the federal alternative minimum tax) and Maryland personal income taxes. The Trust
invests, under normal market conditions, at least 80% of its assets in municipal bonds that are investment grade quality at the time of investment.
The Trust may invest directly in such securities or synthetically through the use of derivatives.

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

Performance

For the six months ended February 28, 2011, the Trust returned (3.76)% based on market price and (4.83)% based on net asset value (“NAV”). For the
same period, the closed-end Lipper Other States Municipal Debt Funds category posted an average return of (9.15)% based on market price and (6.07)%
based on NAV. All returns reflect reinvestment of dividends. The Trust's premium to NAV, which widened during the period, accounts for the difference
between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. At the beginning of
the period, the Trust benefited from tightening credit quality spreads driven by generous investor cash flows into tax-exempt mutual funds. Spreads were
pushed even tighter by heightened demand from taxable investors for corporate-backed municipal debt due to its attractive valuation relative to the corpo-
rate sector. In this environment of strong demand, we were able to sell lower-quality securities that had outperformed and had previously been very limited
in their liquidity. Toward the end of the period, the Trust’s position in cash and cash equivalents proved beneficial when the municipal market saw net cash
flows into mutual funds turn dramatically negative. However, as municipal rates rose on credit concerns and the Build America Bonds program neared its
expiration, while long-term investment rates (i.e., rates on US Treasuries and other fixed income securities) were generally increasing, the Trust’s longer dura-
tion stance had an overall negative impact on performance.

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.

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 Tax equivalent yield assumes the maximum federal tax rate of 35%.
³ The distribution rate is not constant and is subject to change.
⁴ Represents Auction Market Preferred Shares (“Preferred Shares”) and tender option bond trusts (“TOBs”) as a percentage of total managed assets, which is the total assets of the
Trust, including any assets attributable to Preferred Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see
The Benefits and Risks of Leveraging on page 13.

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

 

The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 

⁵ Using the higher of Standard & Poor’s (“S&P’s”) or Moody’s Investors Service
(“Moody’s”) ratings.
⁶ The investment advisor has deemed certain of these non-rated securities to be
of investment grade quality. As of February 28, 2011, the market value of these
securities was $1,219,323, representing 3% of the Trust’s long-term investments.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 5

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Trust Summary as of February 28, 2011 BlackRock MuniHoldings New York Quality Fund, Inc.

Trust Overview

Effective November 9, 2010 BlackRock MuniHoldings New York Insured Fund, Inc. changed its name to BlackRock MuniHoldings New York Quality
Fund, Inc.

BlackRock MuniHoldings New York Quality Fund, Inc.’s (MHN) (the “Trust”) investment objective is to provide shareholders with current income
exempt from federal income tax and New York State and New York City personal income taxes. The Trust seeks to achieve its investment objective
by investing, under normal market conditions, at least 80% of its assets in investment grade New York municipal obligations exempt from federal
income taxes (except that the interest may be subject to the federal alternative minimum tax) and New York State and New York City personal
income taxes ("New York Municipal Bonds"), except at times when, in the judgment of its investment adviser, New York Municipal Bonds of
sufficient quality and quantity are unavailable for investment by the Trust. At all times, however, except during temporary defensive periods,
the Trust invests at least 65% of its assets in New York Municipal Bonds. The Trust invests, under normal market conditions, at least 80%
of its assets in municipal obligations with remaining maturities of one year or more. The Trust may invest directly in such securities or
synthetically through the use of derivatives.

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

Performance

Effective November 9, 2010, the Trust’s investment policy was changed by the removal of the insurance investment policy that required at least 80%
of its assets to be invested in insured municipal securities. Accordingly, the Trust was moved from the Lipper Single-State Insured Municipal
Debt Funds category into the Lipper New York Municipal Debt Funds category. For the six months ended February 28, 2011, the Trust returned
(10.55)% based on market price and (8.98)% based on NAV. For the same period, the closed-end Lipper New York Municipal Debt Funds
category posted an average return of (9.60)% based on market price and (6.76)% based on NAV, while the closed-end Lipper Single-State
Insured Municipal Debt Funds category posted an average return of (10.54)% based on market price and (6.87)% based on NAV. All returns
reflect reinvestment of dividends. The Trust moved from a premium to NAV to a discount by period-end, which accounts for the difference
between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV.
The Trust’s exposure to the long end of the yield curve and holdings of low-coupon, long-duration bonds during a period of rising rates
had a negative impact on performance. The Trust’s holdings of Puerto Rico credits also detracted from performance, as did holdings of
lower-quality credits, where spreads widened amid the backdrop of poor relative performance across the municipal market. Conversely,
the Trust benefited from its holdings of tax-backed credits (state, county, city and school district) as well as its limited exposure to
corporate-backed credits, which experienced some buy-side demand from non-traditional cross-over buyers.

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.

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 Tax equivalent yield assumes the maximum federal tax rate of 35%.
³ The distribution rate is not constant and is subject to change.
⁴ Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and
TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 13.

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

 

The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 

⁵ Using the higher of S&P’s or Moody’s ratings.
⁶ The investment advisor has deemed certain of these non-rated securities to be of
investment grade quality. As of August 31, 2010, the market value of these securities
was $3,941,088 representing 1% of the Trust’s long-term investments.

6 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Trust Summary as of February 28, 2011 BlackRock New Jersey Municipal Bond Trust

Trust Overview

BlackRock New Jersey Municipal Bond Trust’s (BLJ) (the “Trust”) investment objective is to provide current income exempt from regular federal
income tax and New Jersey gross income tax. The Trust seeks to achieve its investment objective by investing primarily in municipal bonds exempt
from federal income taxes (except that the interest may subject to the federal alternative minimum tax) and New Jersey gross income taxes.
Under normal market conditions, the Trust invests at least 80% of its assets in municipal bonds that are investment grade quality at the time
of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.

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

Performance

For the six months ended February 28, 2011, the Trust returned (13.80)% based on market price and (7.59)% based on NAV. For the same
period, the closed-end Lipper New Jersey Municipal Debt Funds category posted an average return of (12.05)% based on market price and
(7.61)% based on NAV. All returns reflect reinvestment of dividends. The Trust moved from a premium to NAV to a discount by period end,
which accounts for the difference between performance based on price and performance based on NAV. The following discussion relates to
performance based on NAV. The Trust’s exposure to housing and corporate-backed bonds aided performance as both sectors outperformed
the broad municipal market. The Trust’s holdings of high-quality essential service bonds with premium coupons (6% or higher) also
benefited performance, as they held their value better than lower-coupon bonds in the rising interest rate environment. Conversely,
exposure to longer-duration and longer-maturity bonds detracted from performance as the long end of the yield curve steepened
during the period. Additionally, holdings in health care and transportation hindered performance as both sectors underperformed the broad
municipal 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.

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 Tax equivalent yield assumes the maximum federal tax rate of 35%.
³ The distribution rate is not constant and is subject to change.
⁴ Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares
and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 13.

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

 

The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 

⁵ Using the higher of S&P’s or Moody’s ratings.
⁶ The investment advisor has deemed certain of these non-rated securities to be of
investment grade quality. As of February 28, 2011 and August 31, 2010, the market
value of these securities was $1,469,185 representing 3% and $1,013,550
representing 2% respectively, of the Trust’s long-term investments.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 7

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Trust Summary as of February 28, 2011 BlackRock New York Municipal Income Quality Trust

Trust Overview

Effective November 9, 2010 BlackRock New York Insured Municipal Income Trust changed its name to BlackRock New York Municipal Income Quality Trust.

BlackRock New York Municipal Income Quality Trust’s (BSE) (the “Trust”) investment objective is to provide current income exempt from federal income tax,
including the alternative minimum tax, and New York State and New York City personal income taxes. The Trust seeks to achieve its investment objective
by investing at least 80% of its assets in municipal obligations exempt from federal income taxes (including the alternative minimum tax) and New York
State and New York City personal income taxes. Under normal market conditions, the Trust invests primarily in municipal bonds that are investment
grade quality at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.

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

Performance

Effective November 9, 2010, the Trust’s investment policy was changed by the removal of the insurance investment policy that required at least 80% of its
assets to be invested in insured municipal securities. Accordingly, the Trust was moved from the Lipper Single-State Insured Municipal Debt Funds category
into the Lipper New York Municipal Debt Funds category. For the six months ended February 28, 2011, the Trust returned (12.49)% based on market price
and (7.51)% based on NAV. For the same period, the closed-end Lipper New York Municipal Debt Funds category posted an average return of (9.60)%
based on market price and (6.76)% based on NAV, while the closed-end Lipper Single-State Insured Municipal Debt Funds category posted an average
return of (10.54)% based on market price and (6.87)% based on NAV. All returns reflect reinvestment of dividends. The Trust moved from a premium to NAV
to a discount by period-end, which accounts for the difference between performance based on price and performance based on NAV. The following discus-
sion relates to performance based on NAV. The Trust’s exposure to the long end of the yield curve and holdings of low-coupon, long-duration bonds during a
period of rising rates had a negative impact on performance. Also detracting from performance was the Trust’s holdings of Puerto Rico credits, as it was
the poorest performing state/territory for the period. Conversely, the Trust benefited from its holdings of tax-backed credits (state, county, city and school
district), which were among the better performing sectors during the period. Additionally, avoiding tobacco credits proved beneficial as it was the worst
performing sector for the period.

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

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 Tax equivalent yield assumes the maximum federal tax rate of 35%.
³ The distribution rate is not constant and is subject to change.
⁴ Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and
TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 13.

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

 

The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 

⁵ Using the higher of S&P’s or Moody’s ratings.
⁶ The investment advisor has deemed certain of these non-rated securities to be of
investment grade quality. As of February 28, 2011 and August 31, 2010, the market
value of these securities was $1,864,940 representing 1% and $9,329,772 repre-
senting 6%, respectively, of the Trust’s long-term investments.

8 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Trust Summary as of February 28, 2011 BlackRock New York Municipal Bond Trust

Trust Overview

BlackRock New York Municipal Bond Trust’s (BQH) (the “Trust”) investment objective is to provide current income exempt from regular federal income taxes
and New York State and New York City personal income taxes. The Trust seeks to achieve its investment objective by investing primarily in municipal bonds
exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax) and New York State and New York City
personal income taxes. Under normal market conditions, the Trust invests at least 80% of its assets in municipal bonds that are investment grade quality at
the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.

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

Performance

For the six months ended February 28, 2011, the Trust returned (8.35)% based on market price and (6.14)% based on NAV. For the same period, the
closed-end Lipper New York Municipal Debt Funds category posted an average return of (9.60)% based on market price and (6.76)% based on NAV. All
returns reflect reinvestment of dividends. The Trust moved from a premium to NAV to a discount by period-end, which accounts for the difference between
performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. The Trust’s exposure to the
long end of the yield curve and holdings of low-coupon, long-duration bonds during a period of rising rates had a negative impact on performance. The
Trust’s holdings of Puerto Rico credits also detracted from performance, as did holdings of lower-quality credits, where spreads widened amid the
backdrop of poor relative performance across the municipal market. Positively impacting performance was the Trust’s high exposure to pre-refunded
bonds, which performed well due to their shorter duration as municipal rates rose sharply. In addition, the Trust benefited from its holdings of
corporate-backed credits, which experienced some buy-side demand from non-traditional cross-over buyers.

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.

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 Tax equivalent yield assumes the maximum federal tax rate of 35%.
³ The distribution rate is not constant and is subject to change.
⁴ Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and
TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 13.

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

 

The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 

 

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 9

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Trust Summary as of February 28, 2011 BlackRock New York Municipal Income Trust II

Trust Overview

BlackRock New York Municipal Income Trust II’s (BFY) (the “Trust”) investment objective is to provide current income exempt from regular federal income
tax and New York State and New York City personal income taxes. The Trust seeks to achieve its investment objective by investing primarily in municipal
bonds exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax) and New York State and New
York City personal income taxes. Under normal market conditions, the Trust invests at least 80% of its assets in municipal bonds that are investment
grade quality at the time of investment. The Trust may invest directly in such securities or synthetically through the use of derivatives.

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

Performance

For the six months ended February 28, 2011, the Trust returned (8.56)% based on market price and (6.59)% based NAV. For the same period, the
closed-end Lipper New York Municipal Debt Funds category posted an average return of (9.60)% based on market price and (6.76)% based on NAV.
All returns reflect reinvestment of dividends. The Trust moved from a premium to NAV to a discount by period-end, which accounts for the difference
between performance based on price and performance based on NAV. The following discussion relates to performance based on NAV. The Trust’s
exposure to the long end of the yield curve and holdings of low-coupon, long-duration bonds during a period of rising rates had a negative impact on
performance. The Trust’s holdings of Puerto Rico credits also detracted from performance, as did holdings of lower-quality credits, where spreads
widened amid the backdrop of poor relative performance across the municipal market. Conversely, the Trust benefited from its exposure to
corporate-backed credits, which experienced some buy-side demand from non-traditional cross-over buyers.

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.

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 Tax equivalent yield assumes the maximum federal tax rate of 35%.
³ The distribution rate is not constant and is subject to change.
⁴ Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and
TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 13.

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

 

The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 

 

10 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Trust Summary as of February 28, 2011 BlackRock Virginia Municipal Bond Trust

Trust Overview

BlackRock Virginia Municipal Bond Trust’s (BHV) (the “Trust”) investment objective is to provide current income exempt from regular federal income tax
and Virginia personal income taxes. The Trust seeks to achieve its investment objectives by investing primarily in municipal bonds exempt from federal
income taxes (except that the interest may be subject to the federal alternative minimum tax) and Virginia personal income taxes. The Trust invests, under
normal market conditions, at least 80% of its assets in municipal bonds that are investment grade quality at the time of investment. The Trust may invest
directly in such securities or synthetically through the use of derivatives.

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

Performance

For the six months ended February 28, 2011, the Trust returned (3.79)% based on market price and (6.19)% based on NAV. For the same period, the
closed-end Lipper Other States Municipal Debt Funds category posted an average return of (9.15)% based on market price and (6.07)% based on NAV.
All returns reflect reinvestment of dividends. The Trust's premium to NAV, which widened during the period, accounts for the difference between perform-
ance based on price and performance based on NAV. The following discussion relates to performance based on NAV. At the beginning of the period, the
Trust benefited from tightening credit quality spreads driven by generous investor cash flows into tax-exempt mutual funds. Spreads were pushed even
tighter by heightened demand from taxable investors for corporate-backed municipal debt due to its attractive valuation relative to the corporate sector. In
this environment of strong demand, we were able to sell lower-quality securities that had outperformed and had previously been very limited in their liq-
uidity. However, toward the end of the period, when municipal rates rose on credit concerns and the Build America Bonds program neared its expiration,
while long-term investment rates (i.e., rates on US Treasuries and other fixed income securities) were generally increasing, the Trust’s longer duration
stance had an overall negative impact on performance.

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.

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 Tax equivalent yield assumes the maximum federal tax rate of 35%.
³ The distribution rate is not constant and is subject to change.
⁴ Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and
TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 13.

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

 

The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 

⁵ Using the higher of S&P’s or Moody’s ratings.
⁶ The investment advisor has deemed certain of these non-rated securities to be
of investment grade quality. As of February 28, 2011 and August 31, 2010, the
market value of these securities was $2,490,031 representing 7% and $2,770,588
representing 7%, respectively, of the Trust’s long-term investments.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 11

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Trust Summary as of February 28, 2011 The Massachusetts Health & Education Tax-Exempt Trust

Trust Overview

The Massachusetts Health & Education Tax-Exempt Trust’s (MHE) (the “Trust”) investment objective is to provide shareholders with as high a
level of current income exempt from both regular federal income taxes and Massachusetts personal income taxes as is consistent with the
preservation of shareholders’ capital. The Trust seeks to achieve its investment objective by investing primarily in tax-exempt obligations
(including bonds, notes and capital lease obligations) issued on behalf of Massachusetts not-for-profit health and education institutions
(“Massachusetts Health & Education Obligations”). The Trust invests, under normal market conditions, at least 80% of its assets in
Massachusetts Health & Education Obligations and at least 80% of its assets in obligations that are rated investment grade at the
time of investment. Under normal market conditions, the Trust invests its assets so that at least 80% of the income generated by
the Trust is exempt from federal income taxes, including federal alternative minimum tax, and Massachusetts personal income taxes.
The Trust invests primarily in long term municipal obligations with maturities of more than ten years. The Trust may invest directly in
such securities or synthetically through the use of derivatives.

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

Performance

For the six months ended February 28, 2011, the Trust returned (8.64)% based on market price and (7.22)% based on NAV. For the same period, the
closed-end Lipper Other States Municipal Debt Funds category posted an average return of (9.15)% based on market price and (6.07)% based on NAV. All
returns reflect reinvestment of dividends. The Trust's premium to NAV, which narrowed during the period, accounts for the difference between performance
based on price and performance based on NAV. The following discussion relates to performance based on NAV. Holdings in health care and education
hindered performance as both sectors underperformed the broad municipal market. Additionally, exposure to longer-duration and longer-maturity bonds
detracted from the Trust’s performance as the long end of the yield curve steepened during the period. Conversely, exposure to pre-refunded bonds in
the 2- to 3-year maturity range aided performance as that sector was the best performer in the municipal 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.

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 Tax equivalent yield assumes the maximum federal tax rate of 35%.
³ The distribution rate is not constant and is subject to change.
⁴ Represents Preferred Shares and TOBs as a percentage of total managed assets, which is the total assets of the Trust, including any assets attributable to Preferred Shares and
TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Trust, please see The Benefits and Risks of Leveraging on page 13.

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

 

The following charts show the sector and credit quality allocations of the Trust’s long-term investments:

 

⁵ Using the higher of S&P’s or Moody’s ratings.
⁶ The investment advisor has deemed certain of these non-rated securities to be
of investment grade quality. As of February 28, 2011 and August 31, 2010, the
market value of these securities was $855,000 representing 2% and $2,061,578
representing 4%, respectively, of the Trust’s long-term investments.

12 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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The Benefits and Risks of Leveraging

The Trusts may utilize leverage to seek to enhance the yield and NAV of
their common shares (“Common Shares”). However, these objectives can-
not be achieved in all interest rate environments.

To leverage, the Trusts issue preferred shares (“Preferred Shares”), which
pay dividends at prevailing short-term interest rates, and invest the pro-
ceeds in long-term municipal bonds. In general, the concept of leveraging
is based on the premise that the financing cost of assets to be obtained
from leverage, which will be based on short-term interest rates, will nor-
mally be lower than the income earned by each Trust on its longer-term
portfolio investments. To the extent that the total assets of each Trust
(including the assets obtained from leverage) are invested in higher-
yielding portfolio investments, each Trust’s holders of Common Shares
(“Common Shareholders”) will benefit from the incremental net income.

To illustrate these concepts, assume a Trust’s Common Shares capitaliza-
tion is $100 million and it issues Preferred Shares for an additional $50
million, creating a total value of $150 million available for investment in
long-term municipal bonds. 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 Trust pays dividends on the $50 million of Preferred
Shares based on the lower short-term interest rates. At the same time,
the securities purchased by the Trust with assets received from Preferred
Shares issuance earn income based on long-term interest rates. In this
case, the dividends paid to holders of Preferred Shares (“Preferred
Shareholders”) are significantly lower than the income earned on the
Trust’s long-term investments, and therefore the Common 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 on
the Common Shares 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 Trust pays inter-
est expense on the higher short-term interest rates whereas the Trust’s total
portfolio earns income based on lower long-term interest rates.

Furthermore, the value of the Trusts’ 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 Trusts’ Preferred Shares and/or debt securities
does not fluctuate in relation to interest rates. As a result, changes in
interest rates can influence the Trusts’ NAV positively or negatively in
addition to the impact on Trust performance from leverage from
Preferred Shares discussed above.

The Trusts may also leverage their assets through the use of TOBs, as
described in Note 1 of the Notes to Financial Statements. TOB investments
generally will provide the Trusts with economic benefits in periods of declin-
ing short-term interest rates, but expose the Trusts to risks during periods of
rising short-term interest rates similar to those associated with Preferred
Shares issued by the Trusts, as described above. Additionally, fluctuations in
the market value of municipal bonds deposited into the TOB may adversely
affect each Trust’s NAV per share.

The use of leverage may enhance opportunities for increased income to the
Trusts and Common Shareholders, but as described above, it also creates
risks as short or long-term interest rates fluctuate. Leverage also will gener-
ally cause greater changes in the Trusts’ NAVs, market prices and dividend
rates than comparable portfolios without leverage. If the income derived
from securities purchased with assets received from leverage exceeds the
cost of leverage, each Trust’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, the Trusts’ net income will be
less than if leverage had not been used, and therefore the amount avail-
able for distribution to Common Shareholders will be reduced. Each Trust
may be required to sell portfolio securities at inopportune times or at dis-
tressed 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 Trust to incur losses. The use of leverage may limit each
Trust’s ability to invest in certain types of securities or use certain types of
hedging strategies, such as in the case of certain restrictions imposed by
ratings agencies that rate Preferred Shares issued by the Trusts. Each Trust
will incur expenses in connection with the use of leverage, all of which are
borne by Common Shareholders and may reduce income to the Common
Shares.

Under the Investment Company Act of 1940, the Trusts are permitted to
issue Preferred Shares in an amount of up to 50% of their total managed
assets at the time of issuance. Under normal circumstances, each Trust
anticipates that the total economic leverage from Preferred Shares and/or
TOBs will not exceed 50% of its total managed assets at the time such
leverage is incurred. As of February 28, 2011, the Trusts had economic
leverage from Preferred Shares and/or TOBs as a percentage of their total
managed assets as follows:

 

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 13

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Derivative Financial Instruments

The Trusts may invest in various derivative instruments, including financial
futures contracts, as specified in Note 2 of the Notes to Financial State-
ments, which may constitute forms of economic leverage. Such instruments
are used to obtain exposure to a market without owning or taking physical
custody of securities or to hedge market 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 or illiquidity of
the derivative instrument. The Trusts’ ability to use a derivative instrument
successfully depends on the investment advisor’s ability to predict pertinent
market movements accurately, which cannot be assured. The use of deriv-
ative instruments may result in losses greater than if they had not been
used, may require a Trust to sell or purchase portfolio investments at
inopportune times or for distressed values, may limit the amount of
appreciation a Trust can realize on an investment, may result in lower
dividends paid to shareholders or may cause a Trust to hold an investment
that it might otherwise sell. The Trusts’ investments in these instruments
are discussed in detail in the Notes to Financial Statements.

14 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Schedule of Investments February 28, 2011 (Unaudited)
BlackRock Maryland Municipal Bond Trust (BZM)
(Percentages shown are based on Net Assets)

 

 

 

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 15

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Schedule of Investments (concluded)
BlackRock Maryland Municipal Bond Trust (BZM)
(Percentages shown are based on Net Assets)

 

* The cost and unrealized appreciation (depreciation) of investments as of
February 28, 2011, as computed for federal income tax purposes, were as follows:

(a) US government securities, held in escrow, are used to pay interest on this security as
well as to retire the bond in full at the date indicated, typically at a premium to par.
(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) Security represents a beneficial interest in a trust. The collateral deposited into the
trust is federally tax-exempt revenue bonds issued by various state or local govern-
ments, or their respective agencies or authorities. The security is subject to remarket-
ing prior to its stated maturity.
(d) Securities represent bonds transferred to a TOB trust in exchange for which the
Trust acquired residual interest certificates. These securities serve as collateral in a
financing transaction. See Note 1 of the Notes to Financial Statements for details of
municipal bonds transferred to TOBs.
(e) Investments in companies considered to be an affiliate of the Trust during the
period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as
amended, were as follows:

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

• For Trust compliance purposes, the Trust’s sector classifications refer to any one or
more of the sector sub-classifications used by one or more widely recognized mar-
ket indexes or ratings group indexes, and/or as defined by Trust management. This
definition may not apply for purposes of this report, which may combine such sector
sub-classifications for reporting ease.
• Financial futures contracts sold as of February 28, 2011 were as follows:

• Fair Value Measurements — Various inputs are used in determining the fair value of
investments and derivatives. These inputs are summarized in three broad levels for
financial statement purposes as follows:
• Level 1 — price quotations in active markets/exchanges for identical assets
and liabilities
• Level 2 — other observable inputs (including, but not limited to: quoted prices for
similar assets or liabilities in markets that are active, quoted prices for identical
or similar assets or liabilities in markets that are not active, inputs other than
quoted prices that are observable for the assets or liabilities (such as interest
rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and
default rates) or other market-corroborated inputs)
• Level 3 — unobservable inputs based on the best information available in the
circumstances, to the extent observable inputs are not available (including the
Trust’s own assumptions used in determining the fair value of investments
and derivatives)
The inputs or methodologies used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities. For information
about the Trust’s policy regarding valuation of investments and other significant
accounting policies, please refer to Note 1 of the Notes to Financial Statements.
The following tables summarize the inputs used as of February 28, 2011 in deter-
mining the fair valuation of the Trust’s investments and derivatives:

 

 

See Notes to Financial Statements.

16 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Schedule of Investments February 28, 2011 (Unaudited)
BlackRock MuniHoldings New York Quality Fund, Inc. (MHN)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 17

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Schedule of Investments (continued)
BlackRock MuniHoldings New York Quality Fund, Inc. (MHN)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

18 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Schedule of Investments (continued)
BlackRock MuniHoldings New York Quality Fund, Inc. (MHN)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 19

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Schedule of Investments (concluded)
BlackRock MuniHoldings New York Quality Fund, Inc. (MHN)
(Percentages shown are based on Net Assets)

 

* The cost and unrealized appreciation (depreciation) of investments as of
February 28, 2011, as computed for federal income tax purposes, were as follows:

 

(a) Variable rate security. Rate shown is as of report date.
(b) Represents a zero-coupon bond. Rate shown reflects the current yield as of
report date.
(c) US government securities, held in escrow, are used to pay interest on this security as
well as to retire the bond in full at the date indicated, typically at a premium to par.
(d) Securities represent bonds transferred to a TOB in exchange for which the Trust
acquired residual interest certificates. These securities serve as collateral in a
financing transaction. See Note 1 of the Notes to Financial Statements for details
of municipal bonds transferred to tender option bond trusts.
(e) Variable rate security. Rate shown is as of report date and maturity shown is the
date the principal owed can be recovered through demand.
(f) Investments in companies considered to be an affiliate of the Trust during the
period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
as amended, were as follows:

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

• For Trust compliance purposes, the Trust’s sector classifications refer to any one or
more of the sector sub-classifications used by one or more widely recognized mar-
ket indexes or ratings group indexes, and/or as defined by Trust management. This
definition may not apply for purposes of this report, which may combine such sector
sub-classifications for reporting ease.
• Fair Value Measurements — Various inputs are used in determining the fair value of
investments and derivatives. These inputs are summarized in three broad levels for
financial statement purposes as follows:
• Level 1 — price quotations in active markets/exchanges for identical assets
and liabilities
• Level 2 — other observable inputs (including, but not limited to: quoted prices for
similar assets or liabilities in markets that are active, quoted prices for identical
or similar assets or liabilities in markets that are not active, inputs other than
quoted prices that are observable for the assets or liabilities (such as interest
rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and
default rates) or other market-corroborated inputs)
• Level 3 — unobservable inputs based on the best information available in the
circumstances, to the extent observable inputs are not available (including the
Trust’s own assumptions used in determining the fair value of investments
and derivatives)

The inputs or methodologies used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities. For information
about the Trust’s policy regarding valuation of investments and other significant
accounting policies, please refer to Note 1 of the Notes to Financial Statements.
The following tables summarize the inputs used as of February 28, 2011 in deter-
mining the fair valuation of the Trust’s investments and derivatives:

 

 

See Notes to Financial Statements.

20 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Schedule of Investments February 28, 2011 (Unaudited)
BlackRock New Jersey Municipal Bond Trust (BLJ)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 21

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Schedule of Investments (continued)
BlackRock New Jersey Municipal Bond Trust (BLJ)
(Percentages shown are based on Net Assets)

 

(a) Variable rate security. Rate shown is as of report date.
(b) Issuer filed for bankruptcy and/or is in default of interest payments.
(c) Non-income producing security.
(d) US government securities, held in escrow, are used to pay interest on this security as
well as to retire the bond in full at the date indicated, typically at a premium to par.
(e) Represents a zero-coupon bond. Rate shown reflects the current yield as of
report date.
(f) 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.
(g) Security represents a beneficial interest in a trust. The collateral deposited into the
trust is federally tax-exempt revenue bonds issued by various state or local govern-
ments, or their respective agencies or authorities. The security is subject to remarket-
ing prior to its stated maturity.
(h) Securities represent bonds transferred to a TOB in exchange for which the Trust
acquired residual interest certificates. These securities serve as collateral in a
financing transaction. See Note 1 of the Notes to Financial Statements for details of
municipal bonds transferred to TOBs.

See Notes to Financial Statements.

22 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Schedule of Investments (concluded)
BlackRock New Jersey Municipal Bond Trust (BLJ)

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

(i) Represents the current yield as of report date.
• For Trust compliance purposes, the Trust’s sector classifications refer to any one or
more of the sector sub-classifications used by one or more widely recognized mar-
ket indexes or ratings group indexes, and/or as defined by Trust management. This
definition may not apply for purposes of this report, which may combine sector sub-
classifications for reporting ease.

• Financial futures contracts sold as of February 28, 2011 were as follows:

• Fair Value Measurements — Various inputs are used in determining the fair value of
investments and derivatives. These inputs are summarized in three broad levels for
financial statement purposes as follows:
• Level 1 — price quotations in active markets/exchanges for identical assets
and liabilities
• Level 2 — other observable inputs (including, but not limited to: quoted prices for
similar assets or liabilities in markets that are active, quoted prices for identical
or similar assets or liabilities in markets that are not active, inputs other than
quoted prices that are observable for the assets or liabilities (such as interest
rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and
default rates) or other market-corroborated inputs)
• Level 3 — unobservable inputs based on the best information available in the
circumstances, to the extent observable inputs are not available (including the
Trust’s own assumptions used in determining the fair value of investments
and derivatives)
The inputs or methodologies used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities. For information
about the Trust’s policy regarding valuation of investments and derivatives and
other significant accounting policies, please refer to Note 1 of the Notes to
Financial Statements.

The following tables summarize the inputs used as of February 28, 2011 in deter-
mining the fair valuation of the Trust ‘s investments and derivatives:

 

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 23

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Schedule of Investments February 28, 2011 (Unaudited)
BlackRock New York Municipal Income Quality Trust (BSE)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

24 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Schedule of Investments (continued)
BlackRock New York Municipal Income Quality Trust (BSE)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 25

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Schedule of Investments (concluded)
BlackRock New York Municipal Income Quality Trust (BSE)

* The cost and unrealized appreciation (depreciation) of investments as of
February 28, 2011, as computed for federal income tax purposes, were as follows:

(a) Represents a zero-coupon bond. Rate shown reflects the current yield as of
report date.
(b) US government securities, held in escrow, are used to pay interest on this security as
well as to retire the bond in full at the date indicated, typically at a premium to par.
(c) Securities represent bonds transferred to a tender option bond trust in exchange
for which the Trust acquired residual interest certificates. These securities serve
as collateral in a financing transaction. See Note 1 of the Notes to Financial
Statements for details of municipal bonds transferred to tender option bond trusts.
(d) Variable rate security. Rate shown is as of report date and maturity shown is the
date the principal owed can be recovered through demand.
(e) Investments in companies considered to be an affiliate of the Trust during the
period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
as amended, were as follows:

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

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

• Financial futures contracts sold as of February 28, 2011 were as follows:

• Fair Value Measurements — Various inputs are used in determining the fair value of
investments and derivatives. These inputs are summarized in three broad levels for
financial statement purposes as follows:
• Level 1 — price quotations in active markets/exchanges for identical assets
and liabilities
• Level 2 — other observable inputs (including, but not limited to: quoted prices for
similar assets or liabilities in markets that are active, quoted prices for identical
or similar assets or liabilities in markets that are not active, inputs other than
quoted prices that are observable for the assets or liabilities (such as interest
rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and
default rates) or other market-corroborated inputs)
• Level 3 — unobservable inputs based on the best information available in the
circumstances, to the extent observable inputs are not available (including the
Trust’s own assumptions used in determining the fair value of investments
and derivatives)
The inputs or methodologies used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities. For information
about the Trust’s policy regarding valuation of investments and derivatives and
other significant accounting policies, please refer to the Note 1 of the Notes to
Financial Statements.

The following tables summarize the inputs used as of February 28, 2011 in deter-
mining the fair valuation of the Trust’s investments and derivatives:

 

See Notes to Financial Statements.

26 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Schedule of Investments February 28, 2011 (Unaudited)
BlackRock New York Municipal Bond Trust (BQH)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 27

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Schedule of Investments (continued)
BlackRock New York Municipal Bond Trust (BQH)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

28 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Schedule of Investments (concluded)
BlackRock New York Municipal Bond Trust (BQH)
(Percentages shown are based on Net Assets)

* The cost and unrealized appreciation (depreciation) of investments as of
February 28, 2011, as computed for federal income tax purposes, were as follows:

(a) Variable rate security. Rate shown is as of report date.
(b) US government securities, held in escrow, are used to pay interest on this security as
well as to retire the bond in full at the date indicated, typically at a premium to par.
(c) Represents a zero-coupon bond. Rate shown reflects the current yield as of
report date.
(d) Issuer filed for bankruptcy and/or is in default of interest payments.
(e) Non-income producing security.
(f) Represents a step-up bond that pays an initial coupon rate for the first period and
then a higher coupon rate for the following periods. Rate shown reflects the current
yield as of report date.
(g) 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.
(h) Security represents a beneficial interest in a trust. The collateral deposited into the
trust is federally tax-exempt revenue bonds issued by various state or local govern-
ments, or their respective agencies or authorities. The security is subject to remarket-
ing prior to its stated maturity.
(i) Securities represent bonds transferred to a TOB in exchange for which the Trust
acquired residual interest certificates. These securities serve as collateral in a
financing transaction. See Note 1 of the Notes to Financial Statements for details
of municipal bonds transferred to TOBs.
(j) Investments in companies considered to be an affiliate of the Trust during the
period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
as amended, were as follows:

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

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

• Financial futures contracts sold as of February 28, 2011 were as follows:

• Fair Value Measurements — Various inputs are used in determining the fair value of
investments and derivatives. These inputs are summarized in three broad levels for
financial statement purposes as follows:
• Level 1 — price quotations in active markets/exchanges for identical assets
and liabilities
• Level 2 — other observable inputs (including, but not limited to: quoted prices for
similar assets or liabilities in markets that are active, quoted prices for identical
or similar assets or liabilities in markets that are not active, inputs other than
quoted prices that are observable for the assets or liabilities (such as interest
rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and
default rates) or other market-corroborated inputs)
• Level 3 — unobservable inputs based on the best information available in the
circumstances, to the extent observable inputs are not available (including the
Trust’s own assumptions used in determining the fair value of investments
and derivatives)

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

The following tables summarize the inputs used as of February 28, 2011 in deter-
mining the fair valuation of the Trust’s investments and derivatives:

 

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 29

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Schedule of Investments February 28, 2011 (Unaudited)
BlackRock New York Municipal Income Trust II (BFY)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

30 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Schedule of Investments (continued)
BlackRock New York Municipal Income Trust II (BFY)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 31

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Schedule of Investments (continued)
BlackRock New York Municipal Income Trust II (BFY)
(Percentages shown are based on Net Assets)

* The cost and unrealized appreciation (depreciation) of investments as of
February 28, 2011, as computed for federal income tax purposes, were as follows:

(a) Variable rate security. Rate shown is as of report date.
(b) US government securities, held in escrow, are used to pay interest on this security as
well as to retire the bond in full at the date indicated, typically at a premium to par.
(c) Represents a zero-coupon bond. Rate shown reflects the current yield as of
report date.
(d) Issuer filed for bankruptcy and/or is in default of interest payments.
(e) Non-income producing security.
(f) 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.
(g) Security represents a beneficial interest in a trust. The collateral deposited into the
trust is federally tax-exempt revenue bonds issued by various state or local govern-
ments, or their respective agencies or authorities. The security is subject to remarket-
ing prior to its stated maturity.
(h) Securities represent bonds transferred to a TOB in exchange for which the Trust
acquired residual interest certificates. These securities serve as collateral in a
financing transaction. See Note 1 of the Notes to Financial Statements for details
of municipal bonds transferred to TOBs.
(i) Investments in companies considered to be an affiliate of the Trust during the
period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
as amended, were as follows:

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

• Financial futures contracts sold as of February 28, 2011 were as follows:

 

See Notes to Financial Statements.

32 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Schedule of Investments (concluded)
BlackRock New York Municipal Income Trust II (BFY)

• Fair Value Measurements — Various inputs are used in determining the fair value of
investments and derivatives. These inputs are summarized in three broad levels for
financial statement purposes as follows:
• Level 1 — price quotations in active markets/exchanges for identical assets
and liabilities
• Level 2 — other observable inputs (including, but not limited to: quoted prices for
similar assets or liabilities in markets that are active, quoted prices for identical
or similar assets or liabilities in markets that are not active, inputs other than
quoted prices that are observable for the assets or liabilities (such as interest
rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and
default rates) or other market-corroborated inputs)
• Level 3 — unobservable inputs based on the best information available in the
circumstances, to the extent observable inputs are not available (including the
Trust’s own assumptions used in determining the fair value of investments
and derivatives)
The inputs or methodologies used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities. For information
about the Trust’s policy regarding valuation of investments and derivatives and
other significant accounting policies, please refer to Note 1 of the Notes to
Financial Statements.

The following tables summarize the inputs used as of February 28, 2011 in deter-
mining the fair valuation of the Trust’s investments and derivatives:

 

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 33

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Schedule of Investments February 28, 2011 (Unaudited)
BlackRock Virginia Municipal Bond Trust (BHV)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

34 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Schedule of Investments (concluded)
BlackRock Virginia Municipal Bond Trust (BHV)
(Percentages shown are based on Net Assets)

* The cost and unrealized appreciation (depreciation) of investments as of
February 28, 2011, as computed for federal income tax purposes, were as follows:

(a) Variable rate security. Rate shown is as of report date.
(b) US government securities, held in escrow, are used to pay interest on this security as
well as to retire the bond in full at the date indicated, typically at a premium to par.
(c) When-issued security. Unsettled when-issued transactions were as follows:

(d) Security is collateralized by Municipal or US Treasury obligations.
(e) Security represents a beneficial interest in a trust. The collateral deposited into the
trust is federally tax-exempt revenue bonds issued by various state or local govern-
ments, or their respective agencies or authorities. The security is subject to remarket-
ing prior to its stated maturity.
(f) 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.
(g) Securities represent bonds transferred to a TOB in exchange for which the Trust
acquired residual interest certificates. These securities serve as collateral in a
financing transaction. See Note 1 of the Notes to Financial Statements for details
of municipal bonds transferred to TOBs.
(h) Investments in companies considered to be an affiliate of the Trust during the
period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
as amended, were as follows:

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

• Financial futures contracts sold as of February 28, 2011 were as follows:

 

• Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivatives.
These inputs are summarized in three broad levels for financial statement purposes as follows:

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

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

•Level 3 — unobservable inputs based on the best information available in the circumstances, to the extent
observable inputs are not available (including the Trust’s own assumptions used in determining the fair
value of investments and derivatives) The inputs or methodologies used for valuing securities are
not necessarily an indication of the risk associated with investing in those securities.

For information about the Trust’s policy regarding valuation of investments and derivatives and
other significant accounting policies, please refer to Note 1 of the Notes to Financial Statements.

The following tables summarize the inputs used as of February 28, 2011 in
determining the fair valuation of the Trust’s investments and derivatives:

 

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 35

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Schedule of Investments February 28, 2011 (Unaudited)
The Massachusetts Health & Tax-Exempt Trust (MHE)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

36 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Schedule of Investments (concluded)
The Massachusetts Health & Tax-Exempt Trust (MHE)
(Percentages shown are based on Net Assets)

* The cost and unrealized appreciation (depreciation) of investments as of
February 28, 2011, as computed for federal income tax purposes, were as follows:

(a) US government securities, held in escrow, are used to pay interest on this security as
well as to retire the bond in full at the date indicated, typically at a premium to par.
(b) Securities represent bonds transferred to a TOB in exchange for which the Trust
acquired residual interest certificates. These securities serve as collateral in a
financing transaction. See Note 1 of the Notes to Financial Statements for details
of municipal bonds transferred to TOBs.
(c) Investments in companies considered to be an affiliate of the Trust during the
period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
as amended, were as follows:

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

• Financial futures contracts sold as of February 28, 2011 were as follows:

• Fair Value Measurements — Various inputs are used in determining the fair value of
investments and derivatives. These inputs are summarized in three broad levels for
financial statement purposes as follows:
• Level 1 — price quotations in active markets/exchanges for identical assets
and liabilities
• Level 2 — other observable inputs (including, but not limited to: quoted prices for
similar assets or liabilities in markets that are active, quoted prices for identical
or similar assets or liabilities in markets that are not active, inputs other than
quoted prices that are observable for the assets or liabilities (such as interest
rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and
default rates) or other market-corroborated inputs)
• Level 3 — unobservable inputs based on the best information available in the
circumstances, to the extent observable inputs are not available (including the
Trust’s own assumptions used in determining the fair value of investments
and derivatives)

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

The following tables summarize the inputs used as of February 28, 2011 in deter-
mining the fair valuation of the Trust’s investments and derivatives:

 

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 37

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Statements of Assets and Liabilities

 

See Notes to Financial Statements.

38 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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See Notes to Financial Statements.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 39

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Statements of Operations

 

See Notes to Financial Statements.

40 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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See Notes to Financial Statements.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 41

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Statements of Changes in Net Assets

 

See Notes to Financial Statements.

42 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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See Notes to Financial Statements.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 43

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Statements of Changes in Net Assets (concluded)

 

See Notes to Financial Statements.

44 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Financial Highlights BlackRock Maryland Municipal Bond Trust (BZM)

¹ Based on average Common 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 Do not reflect the effect of dividends to Preferred Shareholders.
⁶ Annualized.
⁷ Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

See Notes to Financial Statements.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 45

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Financial Highlights BlackRock MuniHoldings New York Quality Fund, Inc. (MHN)

¹ Based on average Common 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 Do not reflect the effect of dividends to Preferred Shareholders.
⁶ Annualized.
⁷ Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

See Notes to Financial Statements.

46 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Financial Highlights BlackRock New Jersey Municipal Bond Trust (BLJ)

¹ Based on average Common 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 Do not reflect the effect of dividends to Preferred Shareholders.
⁶ Annualized.
⁷ Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

See Notes to Financial Statements.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 47

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Financial Highlights BlackRock New York Municipal Income Quality Trust (BSE)

¹ Based on average Common 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 Do not reflect the effect of dividends to Preferred Shareholders.
⁵ Annualized.
⁶ Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

See Notes to Financial Statements.

48 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Financial Highlights BlackRock New York Municipal Bond Trust (BQH)

¹ Based on average Common 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 Do not reflect the effect of dividends to Preferred Shareholders.
⁶ Annualized.
⁷ Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

See Notes to Financial Statements.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 49

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Financial Highlights BlackRock New York Municipal Income Trust II (BFY)

¹ Based on average Common 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 Do not reflect the effect of dividends to Preferred Shareholders.
⁵ Annualized.
⁶ Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

See Notes to Financial Statements.

50 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Financial Highlights BlackRock Virginia Municipal Bond Trust (BHV)

¹ Based on average Common 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 Do not reflect the effect of dividends to Preferred Shareholders.
⁵ Annualized.
⁶ Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

See Notes to Financial Statements.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 51

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Financial Highlights The Massachusetts Health & Education Tax-Exempt Trust (MHE)

¹ Based on average Common 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 Do not reflect the effect of dividends to Preferred Shareholders.
⁶ Annualized.
⁷ Interest expense and fees relate to TOBs. See Note 1 of the Notes to Financial Statements for details of municipal bonds transferred to TOBs.

See Notes to Financial Statements.

52 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Notes to Financial Statements (Unaudited)

1. Organization and Significant Accounting Policies:

BlackRock MuniHoldings New York Quality Fund, Inc. (“MHN”), BlackRock
New York Municipal Income Quality Trust (“BSE), BlackRock Maryland
Municipal Bond Trust (“BZM”), BlackRock New Jersey Municipal Bond Trust
(“BLJ”), BlackRock New York Municipal Bond Trust (“BQH”), BlackRock
Virginia Municipal Bond Trust (“BHV”) (collectively the “Bond Trusts”),
BlackRock New York Municipal Income Trust II (“BFY”) and The Mass-
achusetts Health & Education Tax-Exempt Trust (“MHE”) (all, collectively the
“Trusts” or individually as a “Trust”) are registered under the Investment
Company Act of 1940, as amended (the “1940 Act”), as non-diversified,
closed-end management investment companies. The Trusts are organized
as a Delaware statutory trusts except MHN and MHE, which are organized
as a Maryland corporation and a Massachusetts business trust, respec-
tively. The Trusts' financial statements are prepared in conformity with
accounting principles generally accepted in the United States of America
("US GAAP"), which may require management to make estimates and
assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates. Each
Trust’s Board of Directors/Trustees are collectively referred to throughout
this report as the “Board of Trustees” or the “Board.” The Trusts 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 Trusts:

Valuation: US GAAP defines fair value as the price the Trusts would receive
to sell an asset or pay to transfer a liability in an orderly transaction
between market participants at the measurement date. The Trusts fair
value their financial instruments at market value using independent
dealers or pricing services under policies approved by the Board. Municipal
investments (including commitments to purchase such investments on a
“when-issued” basis) are valued on the basis of prices provided by dealers
or pricing services. 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 and information with respect to
various relationships between investments. Financial futures contracts
traded on exchanges are valued at their last sale price. Investments in
open-end registered investment companies are valued at net asset value
each business day. Short-term securities with remaining maturities of 60
days or less may be valued at amortized cost, which approximates
fair value.

In the event that application of these methods of valuation results in a
price for an investment which is deemed not to be representative of the
market value of such investment or is not available, the investment will
be valued in accordance with a policy approved by the Board as reflecting
fair value ("Fair Value Assets"). When determining the price for Fair Value
Assets, the investment advisor and/or the sub-advisor seeks to determine
the price that each Trust might reasonably expect to receive from the
current sale of that asset in an arm’s-length transaction. Fair value deter-
minations 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.

Zero-Coupon Bonds: The Trusts may invest in zero-coupon bonds, which are
normally issued at a significant discount from face value and do not pro-
vide 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.

Forward Commitments and When-Issued Delayed Delivery Securities:
The Trusts may purchase securities on a when-issued basis and may pur-
chase or sell securities on a forward commitment basis. Settlement of such
transactions normally occurs within a month or more after the purchase or
sale commitment is made. The Trusts may purchase securities under such
conditions with the intention of actually acquiring them, but may enter into
a separate agreement to sell the securities before the settlement date.
Since the value of securities purchased may fluctuate prior to settlement,
the Trusts may be required to pay more at settlement than the security is
worth. In addition, the Trusts are not entitled to any of the interest earned
prior to settlement. When purchasing a security on a delayed delivery basis,
the Trusts assume the rights and risks of ownership of the security, inc-
luding the risk of price and yield fluctuations. In the event of default by
the counterparty, the Trusts' maximum amount of loss is the unrealized
appreciation of unsettled when-issued transactions, which is shown in
the Schedules of Investments, if any.

Municipal Bonds Transferred to TOBs: The Trusts leverage their assets
through the use of TOBs. A TOB is established by a third party sponsor
forming a special purpose entity, into which one or more funds, or an agent
on behalf of the funds, transfers municipal bonds. Other funds managed by
the investment advisor may also contribute municipal bonds to a TOB into
which a Trust has contributed bonds. A TOB typically issues two classes of
beneficial interests: short-term floating rate certificates, which are sold to
third party investors, and residual certificates (“TOB Residuals”), which are
generally issued to the participating funds that made the transfer. The TOB
Residuals held by a Trust include the right of a Trust (1) to cause the hold-
ers of a proportional share of the short-term floating rate certificates to
tender their certificates at par, including during instances of a rise in short-
term interest rates, and (2) to transfer, within seven days, a corresponding
share of the municipal bonds from the TOB to a Trust. The TOB may also be
terminated without the consent of a Trust upon the occurrence of certain
events as defined in the TOB agreements. Such termination events may
include the bankruptcy or default of the municipal bond, a substantial
downgrade in credit quality of the municipal bond, the inability of the TOB
to obtain quarterly or annual renewal of the liquidity support agreement, a
substantial decline in market value of the municipal bond or the inability to
remarket the short-term floating rate certificates to third party investors.
During the six months ended February 28, 2011, no TOBs that the Trusts
participated in were terminated without the consent of the Trusts.

The cash received by the TOB from the sale of the short-term floating rate
certificates, less transaction expenses, is paid to a Trust, which typically
invests the cash in additional municipal bonds. Each Trust's transfer of the
municipal bonds to a TOB is accounted for as a secured borrowing, there-
fore the municipal bonds deposited into a TOB are presented in the Trusts'
Schedules of Investments and the proceeds from the issuance of the

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 53

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Notes to Financial Statements (continued)

short-term floating rate certificates are shown as trust certificates in the
Statements of Assets and Liabilities.

Interest income, including amortization and accretion of premiums and
discounts, from the underlying municipal bonds is recorded by the Trusts
on an accrual basis. Interest expense incurred on the secured borrowing
and other expenses related to remarketing, administration and trustee
services to a TOB are shown as interest expense and fees in the
Statements of Operations. The short-term floating rate certificates have
interest rates that generally reset weekly and their holders have the option
to tender certificates to the TOB for redemption at par at each reset date.
At February 28, 2011, the aggregate value of the underlying municipal
bonds transferred to TOBs, the related liability for trust certificates and the
range of interest rates on the liability for trust certificates were as follows:

 

For the six months ended February 28, 2011, the Trusts' average trust cer-
tificates outstanding and the daily weighted average interest rate, including
fees, were as follows:

 

Should short-term interest rates rise, the Trusts' investments in TOBs
may adversely affect the Trusts' net investment income and dividends to
Common Shareholders. Also, fluctuations in the market values of municipal
bonds deposited into the TOB may adversely affect the Trusts' net asset
values per share.

Segregation and Collateralization: In cases in which the 1940 Act and the
interpretive positions of the Securities and Exchange Commission (“SEC”)
require that the Trusts either deliver collateral or segregate assets in con-
nection with certain investments (e.g financial futures contracts) the Trusts
will, consistent with SEC rules and/or certain interpretive letters issued by
the SEC, segregate collateral or designate on their books and records cash
or other liquid securities having a market value at least equal to the
amount that would otherwise be required to be physically segregated.
Furthermore, based on requirements and agreements with certain
exchanges and third party broker-dealers, each party has requirements
to deliver/deposit securities as collateral for certain investments.

Investment Transactions and Investment Income: For financial reporting
purposes, investment transactions are recorded on the dates the transac-
tions are entered into (the trade dates). Realized gains and losses on
investment transactions are determined on the identified cost basis.
Dividend income is recorded on the ex-dividend dates. Interest income,
including amortization and accretion of premiums and discounts on debt
securities, is recognized on the accrual basis.

Dividends and Distributions: Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on
the ex-dividend dates. The amount and timing of dividends and distribu-
tions are determined in accordance with federal income tax regulations,
which may differ from US GAAP. Dividends and distributions to Preferred
Shareholders are accrued and determined as described in Note 7.

Income Taxes: It is each Trust's policy to comply with the requirements of
the Internal Revenue Code of 1986, as amended, 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.

Each Trust files US federal and various state and local tax returns. No
income tax returns are currently under examination. The statute of limita-
tions on each Trusts' US federal tax returns remains open for each of the
four years ended August 31, 2010 (two years ended August 31, 2010, the
period ended August 31, 2008 and the year ended December 31, 2007
for MHE). The statutes of limitations on each Trusts' state and local tax
returns may remain open for an additional year depending upon the
jurisdiction. Management does not believe there are any uncertain tax
positions that require recognition of a tax liability.

Deferred Compensation and BlackRock Closed-End Share Equivalent
Investment Plan: Under the deferred compensation plan approved by each
Trust's Board, non-interested Directors/Trustees (“Independent Trustees”)
may defer a portion of their annual complex-wide compensation. Deferred
amounts earn an approximate return as though equivalent dollar amounts
had been invested in common shares of certain other BlackRock Closed-
End Funds selected by the Independent Trustees. This has approximately
the same economic effect for the Independent Trustees as if the
Independent Trustees had invested the deferred amounts directly in
certain other BlackRock Closed-End Funds.

The deferred compensation plan is not funded and obligations there-under
represent general unsecured claims against the general assets of each
Trust. Each Trust may, however, elect to invest in common shares of certain
other BlackRock Closed-End Funds selected by the Independent Trustees in
order to match its deferred compensation obligations. Investments to cover
each Trust's deferred compensation liability, if any, are included in other
assets in the Statements of Assets and Liabilities. Dividends and distribu-
tions 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 Trust are charged to that Trust. Other
operating expenses shared by several funds are pro rated among those
funds on the basis of relative net assets or other appropriate methods.The
Trusts have an arrangement with the custodian whereby fees may be

54 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Notes to Financial Statements (continued)

reduced by credits earned on uninvested cash balances, which if applica-
ble are shown as fees paid indirectly in the Statements of Operations. The
custodian imposes fees on overdrawn cash balances, which can be offset
by accumulated credits earned or may result in additional custody charges.

2. Derivative Financial Instruments:

The Trusts engage in various portfolio investment strategies using derivative
contracts both to increase the returns of the Trusts and to economically
hedge, or protect, their exposure to certain risks such as interest rate risk.
These contracts may be transacted on an exchange.

Losses may arise if the value of the contract decreases due to an unfavor-
able change in the market rates or values of the underlying instrument or
if the counterparty does not perform under the contract. Counterparty risk
related to exchange-traded financial futures contracts is deemed to be
minimal due to the protection against defaults provided by the exchange
on which these contracts trade.

Financial Futures Contracts: The Trusts purchase or sell financial futures
contracts and options on financial futures contracts to gain exposure to, or
economically hedge against, changes in interest rates (interest rate risk),
Financial futures contracts are agreements between the Trusts and the
counterparty to buy or sell a specific quantity of an underlying instrument
at a specified price and at a specified date. Depending on the terms of the
particular contract, futures contracts are settled either through physical
delivery of the underlying instrument on the settlement date or by payment
of a cash settlement amount on settlement date. Pursuant to the contract,
the Trusts agree to receive from or pay to the broker an amount of cash
equal to the daily fluctuation in value of the contract. Such receipts or pay-
ments are known as margin variation and are recorded by the Trusts as
unrealized appreciation or depreciation. When the contract is closed, the
Trusts record a realized gain or loss equal to the difference between the
value of the contract at the time it was opened and the value at the time it
was closed. The use of financial futures contracts involves the risk of an
imperfect correlation in the movements in the price of financial futures con-
tracts, interest rates and the underlying assets.

 

3. Investment Advisory Agreement and Other Transactions
with Affiliates:

The PNC Financial Services Group, Inc. ("PNC"), Bank of America
Corporation ("BAC") and Barclays Bank PLC ("Barclays") are the largest
stockholders of BlackRock, Inc. ("BlackRock"). Due to the ownership
structure, PNC is an affiliate of the Trusts for 1940 Act purposes, but BAC
and Barclays are not.

Each Trust entered into an Investment Advisory Agreement with BlackRock
Advisors, LLC (the “Manager”), the Trusts' 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 Trust's portfolio and provides the necessary personnel, facilities,
equipment and certain other services necessary to the operations of each

Trust. For such services, each Trust pays the Manager a monthly fee at the
following annual rates of each Trust's average weekly net assets except
MHN and MHE, which are based upon average daily net assets as follows:

 

Average weekly net assets and average daily net assets are the average
weekly value or the average daily value of each Trust's total assets minus
the sum of its accrued liabilities.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 55

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Notes to Financial Statements (continued)

The Manager, for MHN, voluntarily agreed to waive its investment advisory
fee on the proceeds of the Preferred Shares and TOBs that exceed 35% of
net assets applicable to Common Shareholders. This amount is included in
fees waived by advisor in the Statements of Operations. For the six months
ended February 28, 2011 the waiver was $224,725.

The Manager voluntarily agreed to waive a portion of the investment advi-
sory fees for certain other funds. With respect to BSE, the waiver, as a per-
centage of its average weekly net assets was as follows: 0.05% through
October 2010. With respect to Bond Trusts, the waiver, as a percentage of
average weekly net assets, is as follows, 0.10% through April 2011 and
0.05% through April 2012. With respect to BFY, the waiver, as a percentage
of its average weekly net assets is 0.05% through July 2012. For the six
months ended February 28, 2011 the Manager waived the following
amounts, which are included in the fees waived by advisor Statements of
Operations.

 

The Manager voluntarily agreed to waive its investment advisory fees by
the amount of investment advisory fees each Trust pays to the Manager
indirectly through its investment in affiliated money market funds, however
the Manager does not waive its investment advisory fees by the amount
of investment advisory fees paid through each Trust's investment in other
affiliated investment companies, if any. These amounts are shown as, or
included in, fees waived by advisor in the Statements of Operations. For the
six months ended February 28, 2011, the amounts waived were as follows:

 

The Manager entered into a separate sub-advisory agreement with
BlackRock Investment Management LLC (“BIM”) for MHN and MHE and
and BlackRock Financial Management, Inc. (“BFM”) for all other Trusts. BIM
and BFM are affiliates of the Manager. The Manager pays BIM and BFM for
services they provide, a monthly fee that is a percentage of the investment
advisory fees paid by the Trust to the Manager.

For the period September 1, 2010 through December 31, 2010, each Trust
reimbursed the Manager for certain accounting services, which are
included in accounting services in the Statements of Operations. The
reimbursements were as follows:

 

Effective January 1, 2011, the Trusts no longer reimburse the Manager for
accounting services.

Certain officers and/or trustees of the Trusts are officers and/or directors of
BlackRock or its affiliates. The Trusts reimburse the Manager for compensa-
tion paid to the Trusts' Chief Compliance Officer.

4. Investments:

Purchases and sales of investments excluding short-term securities and US
government securities for the six months ended February 28, 2011, were
as follows:

 

5. Capital Loss Carryforward:

As of August 31, 2010, the Trusts had capital loss carryforwards
available to offset future realized capital gains through the indicated
expiration dates:

 

Under the recently enacted Regulated Investment Company Modernization
Act of 2010, capital losses incurred by the Trusts after August 31, 2011
will not be subject to expiration. In addition, these losses must be utilized
prior to the losses incurred in pre-enactment taxable years.

6. Concentration, Market and Credit Risk:

Each Trust invests a substantial amount of their assets in issuers located in
a single state or limited number of states. Please see the Schedules of
Investments for concentrations in specific states.

Many municipalities insure repayment of their bonds, which may reduce
the potential for loss due to credit risk. The market value of these bonds
may fluctuate for other reasons, including market perception of the value
of such insurance, and there is no guarantee that the insurer will meet
its obligation.

In the normal course of business, the Trusts invest in securities and enter
into transactions where risks exist due to fluctuations in the market (market
risk) or failure of the issuer of a security to meet all its obligations (issuer
credit risk). The value of securities held by the Trusts may decline in
response to certain events, including those directly involving the issuers
whose securities are owned by the Trusts; conditions affecting the general
economy; overall market changes; local, regional or global political, social

56 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Notes to Financial Statements (continued)

or economic instability; and currency and interest rate and price fluctua-
tions. Similar to issuer credit risk, the Trusts may be exposed to counter-
party credit risk, or the risk that an entity with which the Trusts have
unsettled or open transactions may fail to or be unable to perform on its
commitments. The Trusts manage counterparty credit risk by entering into
transactions only with counterparties that they believe have the financial
resources to honor their obligations and by monitoring the financial stability
of those counterparties. Financial assets, which potentially expose the
Trusts to market, issuer and counterparty credit risks, consist principally of
financial instruments and receivables due from counterparties. The extent
of the Trusts' exposure to market, issuer and counterparty credit risks with
respect to these financial assets is generally approximated by their value
recorded in the Trusts' Statements of Assets and Liabilities, less any collat-
eral held by the Trusts.

As of February 28, 2011, BZM invested a significant portion of its assets
in securities in the County/City/Special District/School District and Health
sectors. MHN invested a significant portion of its assets in securities in the
County/City/Special District/School District and Transportation sectors. BLJ
invested a significant portion of its assets in securities in the State and
Transportaion sectors. BSE invested a significant portion of its assets in
securities in the Education and Transportation sectors. BQH invested a sig-
nificant portion of its assets in securities in the State sector. BFY invested
a significant portion of its assets in securities in the County/City/Special
District/School District sector. MHE invested a significant portion of its
assets in securities in the Health and Education sectors. Changes in eco-
nomic conditions affecting the County/City/Special District/School District,
Education, Health, State and Transportation sectors would have a greater
impact on the Trusts and could affect the value, income and/or liquidity of
positions in such securities.

7. Capital Share Transactions:

The Trusts, except MHN, are authorized to issue an unlimited number of
shares (200 million shares for MHN), all of which were initially classified
as Common Shares. The par value for the Trusts, except MHN and MHE, is
$0.001 per share ($0.10 for MHN and $0.01 for MHE). Each Trust’s Board
is authorized, however, to reclassify any unissued shares without approval
of Common Shareholders.

Common Shares

For the six months ended February 28, 2011 and the year ended August
31, 2010, shares issued and outstanding increased by the following
amounts as a result of dividend reinvestment:

 

Preferred Shares

The Preferred Shares are redeemable at the option of each Trust, in whole
or in part, on any dividend payment date at their liquidation preference
per share plus any accumulated and unpaid dividends whether or not
declared. The Preferred Shares are also subject to mandatory redemption
at their liquidation preference plus any accumulated and unpaid dividends,
whether or not declared, if certain requirements relating to the composition
of the assets and liabilities of a Trust, as set forth in each Trust's Articles of
Amendment/Statement of Preferences/Certificates of Vote of Trustees (the
“Governing Instrument”) are not satisfied.

From time to time in the future, each Trust may effect repurchases of its
Preferred Shares at prices below their liquidation preference as agreed
upon by the Trust and seller. Each Trust also may redeem its Preferred
Shares from time to time as provided in the applicable Governing
Instrument. Each Trust intends to effect such redemptions and/or repur-
chases to the extent necessary to maintain applicable asset coverage
requirements or for such other reasons as the Board may determine.

The holders of Preferred Shares have voting rights equal to the holders of
Common Shares (one vote per share) and will vote together with holders
of Common Shares (one vote per share) as a single class. However, the
holders of Preferred Shares, voting as a separate class, are also entitled
to elect two Directors/Trustees for each Trust. In addition, the 1940 Act
requires that along with approval by shareholders that might otherwise
be required, the approval of the holders of a majority of any outstanding
Preferred Shares, voting separately as a class would be required to (a)
adopt any plan of reorganization that would adversely affect the Preferred
Shares, (b) change a Trust's sub-classification as a closed-end investment
company or change its fundamental investment restrictions or (c) change
its business so as to cease to be an investment company.

The Trusts had the following series of Preferred Shares outstanding, effec-
tive yields and reset frequency as of February 28, 2011:

 

Dividends on seven-day Preferred Shares are cumulative at a rate, which is
reset every seven days, respectively, based on the results of an auction. If
the Preferred Shares fail to clear the auction on an auction date, each Trust
is required to pay the maximum applicable rate on the Preferred Shares to
holders of such shares for successive dividend periods until such time as

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 57

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Notes to Financial Statements (concluded)

the shares are successfully auctioned. The maximum applicable rate on all
series of Preferred Shares is the higher of 110% of the AA commercial
paper rate or 100% of 90% of the Kenny S&P 30-day High Grade Index
divided by 1.00 minus the marginal tax rate. The low, high and average divi-
dend rates on the Preferred Shares for each Trust for the six months ended
February 28, 2011 were as follows:

 

Since February 13, 2008, the Preferred Shares of the Trusts failed to clear
any of their auctions. As a result, the Preferred Shares dividend rates were
reset to the maximum applicable rate, which ranged from 0.37% to 0.50%
for the six months ended February 28, 2011. A failed auction is not an
event of default for the Trusts but it has a negative impact on the liquidity
of Preferred Shares. A failed auction occurs when there are more sellers of
a Trust's auction rate preferred shares than buyers. A successful auction for
the Trusts' Preferred Shares may not occur for some time, if ever, and even
if liquidity does resume, Preferred Shareholders may not have the ability to
sell the Preferred Shares at their liquidation preference.

The Trusts may not declare dividends or make other distributions on
Common Shares or purchase any such shares if, at the time of the declara-
tion, distribution or purchase, asset coverage with respect to the outstand-
ing Preferred Shares is less than 200%.

The Trusts pay commissions of 0.15% on the aggregate principal amount of
all shares that fail to clear their auctions and 0.25% on the aggregate prin-
cipal amount of all shares that successfully clear their auctions. Certain
broker dealers have individually agreed to reduce commissions for failed
auctions.

Preferred shares issued and outstanding remained constant for the six
months ended February 28, 2011 and the year ended August 31, 2010 for
all Trusts.

8. Subsequent Events:

Management's evaluation of the impact of all subsequent events on the
Trusts' financial statements was completed through the date the financial
statements were issued and the following items were noted:

Each Trust paid a net investment income dividend on April 1, 2011 to
Common Shareholders of record on March 15, 2011 as follows:

 

The dividends declared on Preferred Shares for the period March 1, 2011
to March 31, 2011 were as follows:

 

58 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Officers and Trustees

Richard E. Cavanagh, Chairman of the Board and Trustee
Karen P. Robards, Vice Chair of the Board, Chair of the Audit Committee
and Trustee
Richard S. Davis, Trustee
Frank J. Fabozzi, Trustee and Member of the Audit Committee
Kathleen F. Feldstein, Trustee
James T. Flynn, Trustee and Member of the Audit Committee
Henry Gabbay, Trustee
Jerrold B. Harris, Trustee
R. Glenn Hubbard, Trustee
W. Carl Kester, Trustee and Member of the Audit Committee
John M. Perlowski, President and Chief Executive Officer
Brendan Kyne, Vice President
Anne F. Ackerley, Vice President
Neal Andrews, Chief Financial Officer
Jay Fife, Treasurer
Brian Kindelan, Chief Compliance Officer
Ira Shapiro, Secretary

Investment Advisor
BlackRock Advisors, LLC
WIlmington, DE 19809

Sub-Advisors
BlackRock Financial Management, Inc.¹
New York, NY 10055

BlackRock Investment Management, LLC²
Plainsboro, NJ 08536

Custodians
State Street Bank and Trust Company³
Boston, MA 02111

The Bank of New York Mellon⁴
New York, NY 10286

Transfer Agent
Common Shares
BNY Mellon Shareowner Services²
Jersey City, NJ 07310

Computershare Trust Company, N.A.¹
Providence, RI 02940

Auction Agent
Preferred Shares
The Bank of New York Mellon
New York, NY 10286

Accounting Agent
State Street Bank and Trust Company
Princeton, NJ 08540

Independent Registered Public Accounting Firm
Deloitte & Touche LLP
Princeton, NJ 08540

Legal Counsel
Skadden, Arps, Slate, Meagher & Flom LLP
New York, NY 10036

Address of the Trusts
100 Bellevue Parkway
Wilmington, DE 19809

¹ For all Trusts except MHN and MHE.
² For MHN and MHE.
³ For all Trusts except MHN.
⁴ For MHN.

Effective February 11, 2011, John M. Perlowski became President and
Chief Executive Officer of the Trusts.

Effective November 10, 2010, Ira Shapiro became Secretary of the Trusts.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 59

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Additional Information

Proxy Results

The Annual Meeting of Shareholders was held on September 2, 2010 for shareholders of record on July 6, 2010, to elect trustee/director nominees for
each Trust/Fund. Due to a lack of quorum of Preferred Shares, action on the proposal regarding the Preferred Shares nominees' election for MHE was
subsequently adjourned to October 5, 2010; and action on the proposal regarding Preferred Shares nominees' election for MHE was additionally adjourned
to November 2, 2010. There were no broker non-votes with regard to any of the Trusts/Funds.

Approved the Class III Trustees as follows:

 

 

For the Trusts listed above, Trustees whose term of office continued after the Annual Meeting of Shareholders because they were not up for election are
Richard S. Davis, Frank J. Fabozzi, James T. Flynn, R. Glenn Hubbard, W. Carl Kester and Karen P. Robards.

Approved the Directors/Trustees as follows:

¹ Due to the lack of a quorum of Preferred Shares, MHE was unable to act on the election of the two directors reserved for election solely by the Preferred Shareholders for the Trust.
Accordingly, Frank J. Fabozzi and W. Carl Kester will remain in office and continue to serve as trustees for the Trust.

60 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Additional Information (continued)

Trust Certification

Those Trusts listed for trading on the New York Stock Exchange (“NYSE”)
have filed with the NYSE their annual chief executive officer certification
regarding compliance with the NYSE’s listing standards. The Trusts filed
with the Securities and Exchange Commission (“SEC”) the certification of
its chief executive officer and chief financial officer required by section 302
of the Sarbanes-Oxley Act.

General Information

On July 29, 2010, the Manager announced that a derivative complaint had
been filed by shareholders of BSE and BQH on July 27, 2010 in the
Supreme Court of the State of New York, New York County. The complaint
names the Manager, BlackRock, Inc. and certain of the trustees, officers
and portfolio managers of BSE and BQH as defendants. The complaint
alleges, among other things, that the parties named in the complaint
breached fiduciary duties owed to BSE and BQH and their Common
Shareholders by redeeming auction-market preferred shares, auction rate
preferred securities, auction preferred shares and auction rate securities
(collectively, “AMPS”) at their liquidation preference. The complaint seeks
unspecified damages for losses purportedly suffered by BSE and BQH as
a result of the prior redemptions and injunctive relief preventing BSE and
BQH from redeeming AMPS at their liquidation preference in the future.
The Manager, BlackRock, Inc. and the other parties named in the complaint
believe that the claims asserted in the complaint are without merit and
intend to vigorously defend themselves in the litigation.

The Trusts do not make available copies of their Statements of Additional
Information because the Trusts’ shares are not continuously offered, which
means that the Statement of Additional Information of each Trust has not
been updated after completion of the respective Trust’s offerings and the
information contained in each Trust’s Statement of Additional Information
may have become outdated.

Other than the revisions discussed in the Board Approvals on page 62,
there were no material changes in the Trusts’ investment objectives or
policies or to the Trusts’ charters or by-laws that would delay or prevent
a change of controls of the Trusts that were not approved by the sharehold-
ers or in the principal risk factors associated with investment in the Trusts.
There have been no changes in the persons who are primarily responsible
for the day-to-day management of the Trusts’ portfolio.

Quarterly performance, semi-annual and annual reports and other informa-
tion regarding the Trusts may be found on BlackRock’s website, which can
be accessed at http://www.blackrock.com. This reference to BlackRock’s
website is intended to allow investors public access to information regard-
ing the Trusts and does not, and is not intended to, incorporate BlackRock’s
website into this report.

Electronic Delivery

Electronic copies of most financial reports are available on the Trusts’ web-
sites or shareholders can sign up for e-mail notifications of quarterly state-
ments, annual and semi-annual reports by enrolling in the Trusts’ 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 Trusts will mail only one copy of shareholder documents, including
annual and semi-annual reports and proxy statements, to shareholders
with multiple accounts at the same address. This practice is commonly
called “householding” and is intended to reduce expenses and eliminate
duplicate mailings of shareholder documents. Mailings of your shareholder
documents may be householded indefinitely unless you instruct us other-
wise. If you do not want the mailing of these documents to be combined
with those for other members of your household, please
call (800) 441-7762.

Availability of Quarterly Schedule of Investments

Each Trust files its complete schedule of portfolio holdings with the SEC
for the first and third quarters of each fiscal year on Form N-Q. The Trusts’
Forms N-Q are available on the SEC’s website at http://www.sec.gov and
may also be reviewed and copied at the SEC’s Public Reference Room in
Washington, DC. Information on the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330. Each Trust’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 Trusts use to
determine how to vote proxies relating to portfolio securities is available
(1) without charge, upon request, by calling (800) 441-7762;
(2) at http://www.blackrock.com; and (3) on the SEC’s website
at http://www.sec.gov.

Availability of Proxy Voting Record

Information about how the Trusts voted proxies relating to securities
held in the Trusts’ portfolios during the most recent 12-month period
ended June 30 is available upon request and without charge (1) at
http://www.blackrock.com or by calling (800) 441-7762 and
(2) on the SEC’s website at http://www.sec.gov.

Availability of Trust Updates

BlackRock will update performance and certain other data for the Trusts on
a monthly basis on its website in the “Closed-end Funds” section of
http://www.blackrock.com. Investors and others are advised to periodically
check the website for updated performance information and the release of
other material information about the Trusts.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 61

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Additional Information (continued)

Board Approvals

On September 1, 2010, the Board of Directors/Trustees (the “Boards”) of
MHN and BSE (the “Insured Trusts”) approved changes to certain invest-
ment policies of the Insured Trusts.

Historically, under normal market conditions, each Insured Trust has
been required to invest at least 80% of its assets in municipal bonds
either (i) insured under an insurance policy purchased by the Insured
Trust or (ii) insured under an insurance policy obtained by the issuer of
the municipal bond or any other party. In September 2008, the Insured
Trusts adopted an amended investment policy of purchasing only munici-
pal bonds insured by insurance providers with claims-paying abilities
rated investment grade at the time of investment (the “Insurance
Investment Policy”).

Following the onset of the credit and liquidity crises, the claims-paying
ability rating of most of the municipal bond insurance providers has been
lowered by the rating agencies. These downgrades have called into question
the long-term viability of the municipal bond insurance market, which has
the potential to severely limit the ability of the Manager, to manage the
Insured Trusts under the Insurance Investment Policy.

As a result, on September 1, 2010, the Manager recommended, and the
Boards of the Insured Trusts approved, the removal of the Insurance
Investment Policy. As a result of this investment policy change, the Insured
Trusts will not be required to dispose of assets currently held within the
Insured Trusts. The Insured Trusts will maintain, and have no current inten-
tion to amend, their investment policy of, under normal market conditions,
generally investing in municipal obligations rated investment grade at the
time of investment.

As each Insured Trust increases the amount of its assets that are invested
in municipal obligations that are not insured, each Insured Trust’s share-
holders will be exposed to the risk of the failure of such securities’ issuers
to pay interest and repay principal and will not have the benefit of protec-
tion provided under municipal bond insurance policies. As a result, share-
holders will be more dependent on the analytical ability of the Manager to
evaluate the credit quality of issuers of municipal obligations in which
each Insured Trust invests. The Boards believe that the amended invest-
ment policy is in the best interests of each Insured Trust and its sharehold-
ers because it believes that the potential benefits from increased flexibility
outweigh the potential increase in risk from the lack of insurance policies
provided by weakened insurance providers. Of course, the new investment
policy cannot assure that each Insured Trust will achieve its
investment objective.

As disclosed in each Insured Trust’s prospectus, each Insured Trust is
required to provide shareholders 60 days notice of a change to the
Insurance Investment Policy. Accordingly, a notice describing the changes
discussed above was mailed to shareholders of record as of September 1,
2010. The new investment policy took effect on November 9, 2010. The
Manager has been gradually repositioning each Insured Trust’s portfolios
over time, and during such period, each Insured Trust may continue to
hold a substantial portion of its assets in insured municipal bonds. At this
time, the repositioning of each Insured Trust’s portfolio is still taking place,
and the Insured Trusts will continue to be subject to risks associated with
investing a substantial portion of their assets in insured municipal bonds
until the repositioning is complete. No action is required by shareholders
of the Insured Trusts in connection with this change.

In connection with this change in non-fundamental policy, each of the
Insured Trusts underwent a name change to reflect its new portfolio
characteristics.

Each Insured Trust continues to trade on the New York Stock Exchange
under its current ticker symbol.

The approved changes did not alter any Insured Trust’s investment
objective.

Section 19(a) Notices

These reported amounts and sources of distributions are estimates and are not being provided for tax reporting purposes. The actual amounts and sources
for tax reporting purposes wll depend upon each Trust’s investment experience during the year and may be subject to changes based on the tax regula-
tions. Each Trust will provide a Form 1099-DIV each calendar year that will explain the character of these dividends and distributions for federal income
tax purposes.

 

62 SEMI-ANNUAL REPORT FEBRUARY 28, 2011

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Additional Information (concluded)

BlackRock Privacy Principles

BlackRock is committed to maintaining the privacy of its current and for-
mer fund investors and individual clients (collectively, “Clients”) and to
safeguarding their non-public personal information. The following infor-
mation 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 applica-
tions, 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 pro-
cedures relating to the proper storage and disposal of such information.

SEMI-ANNUAL REPORT FEBRUARY 28, 2011 63

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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 Trusts 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 the short-term dividend rates of the Preferred Shares, currently set at the maximum reset rate as a result

of failed auctions, may reduce the Common Shares’ yield. Statements and other information herein are as dated and are subject

to change.

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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
(a) Not Applicable to this semi-annual report
(b) As of the date of this filing, there have been no changes in any of the portfolio managers identified in
the most recent annual report on Form N-CSR.

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 – There have been no material changes to these
procedures.

Item 11 – Controls and Procedures

(a) – The registrant’s principal executive and principal financial officers, or persons performing similar
functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-
3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”)) are effective as of a date
within 90 days of the filing of this report based on the evaluation of these controls and procedures required
by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as
amended.

(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

(a)(1) – Code of Ethics – Not Applicable to this semi-annual report

(a)(2) – Certifications – Attached hereto

(a)(3) – Not Applicable

(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.

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BlackRock MuniHoldings New York Quality Fund, Inc.

By: /S/ John M. Perlowski
John M. Perlowski
Chief Executive Officer (principal executive officer) of
BlackRock MuniHoldings New York Quality Fund, Inc.

Date: May 4, 2011

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/ John M. Perlowski
John M. Perlowski
Chief Executive Officer (principal executive officer) of
BlackRock MuniHoldings New York Quality Fund, Inc.

Date: May 4, 2011

By: /S/ Neal J. Andrews
Neal J. Andrews
Chief Financial Officer (principal financial officer) of
BlackRock MuniHoldings New York Quality Fund, Inc.

Date: May 4, 2011

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