UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act File number 811-8603
Name of Fund: BlackRock Debt Strategies Fund, Inc.
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, BlackRock Debt Strategies Fund, Inc., 800 Scudders Mill Road,
Plainsboro, NJ 08536. Mailing address: P.O. Box 9011, Princeton, NJ
08543-9011
Registrant's telephone number, including area code: (609) 282-2800
Date of fiscal year end: 02/28/2008
Date of reporting period: 03/01/07 - 05/31/07
Item 1 - Schedule of Investments
BlackRock Debt Strategies Fund, Inc.
Schedule of Investments as of May 31, 2007 (unaudited)
Face
Industry Amount Corporate Bonds Value
-----------------------------------------------------------------------------------------------------------------------------------
Aerospace &
Defense - 3.4% USD 5,000,000 Alliant Techsystems, Inc., 3% due 8/15/2024 (a)(c) $ 7,131,250
7,500,000 L-3 Communications Corp., 3% due 8/01/2035 (a)(c) 8,306,250
9,870,000 Vought Aircraft Industries, Inc., 8% due 7/15/2011 10,129,088
--------------
25,566,588
-----------------------------------------------------------------------------------------------------------------------------------
Automotive - 3.6% 300,000 Ford Motor Co., 7.45% due 7/16/2031 246,750
760,000 Ford Motor Credit Co., 5.80% due 1/12/2009 748,542
4,480,000 Ford Motor Credit Co., 8.105% due 1/13/2012 (b) 4,501,835
750,000 Ford Motor Credit Co., 9.806% due 4/15/2012 (b) 810,023
4,500,000 The Goodyear Tire & Rubber Co., 9.135% due 12/01/2009 (b)(c) 4,511,250
1,830,000 The Goodyear Tire & Rubber Co., 8.625% due 12/01/2011 (c) 1,976,400
1,620,000 Lear Corp., 8.75% due 12/01/2016 1,555,200
9,350,000 Metaldyne Corp., 11% due 6/15/2012 9,607,125
1,530,000 Titan International, Inc., 8% due 1/15/2012 (c) 1,575,900
1,380,000 United Auto Group, Inc., 7.75% due 12/15/2016 (c) 1,393,800
4,450,000 Venture Holdings Co. LLC, 12% due 6/01/2009 (e) 0
1,800,000 Venture Holdings Co. LLC Series B, 9.50% due 7/01/2005 (j) 7,200
--------------
26,934,025
-----------------------------------------------------------------------------------------------------------------------------------
Broadcasting - 3.8% 5,000,000 Canadian Satellite Radio Holdings, Inc., 12.75% due 2/15/2014 5,112,500
1,100,000 LIN Television Corp. Series B, 6.50% due 5/15/2013 1,111,000
2,800,000 Paxson Communications Corp., 8.606% due 1/15/2012 (b)(c) 2,859,500
3,235,000 Sinclair Broadcast Group, Inc. Class A, 4.875% due 7/15/2018 3,158,169
5,795,000 Sirius Satellite Radio, Inc., 9.625% due 8/01/2013 5,809,488
4,635,000 Umbrella Acquisition, 9.75% due 3/15/2015 (c)(g) 4,797,225
2,800,000 XM Satellite Radio, Inc., 9.871% due 5/01/2013 (b) 2,754,500
2,685,000 Young Broadcasting, Inc., 10% due 3/01/2011 2,731,988
--------------
28,334,370
-----------------------------------------------------------------------------------------------------------------------------------
Cable -
International - 0.1% 750,000 NTL Cable Plc, 8.75% due 4/15/2014 793,125
-----------------------------------------------------------------------------------------------------------------------------------
Cable - U.S. - 7.6% 5,950,000 Cablevision Systems Corp. Series B, 9.82% due 4/01/2009 (b) 6,299,562
3,750,000 Charter Communications Holdings LLC, 10% due 4/01/2009 3,853,125
1,319,000 Charter Communications Holdings LLC, 11.125% due 1/15/2011 1,345,380
1,978,000 Charter Communications Holdings LLC, 10% due 5/15/2011 2,007,670
1,289,000 Insight Midwest, LP, 9.75% due 10/01/2009 1,305,112
8,605,000 Intelsat Bermuda Ltd., 11.409% due 6/15/2013 (b) 9,196,594
2,880,000 Intelsat Bermuda Ltd., 8.872% due 1/15/2015 (b) 2,944,800
7,260,000 Intelsat Corp., 9% due 6/15/2016 7,949,700
10,350,000 Intelsat Intermediate Holding Co. Ltd., 9.25% due 2/01/2015 (h) 8,694,000
3,375,000 Intelsat Subsidiary Holding Co. Ltd., 8.25% due 1/15/2013 3,505,781
4,800,000 Intelsat Subsidiary Holding Co. Ltd., 8.625% due 1/15/2015 5,142,000
983,000 Loral Spacecom Corp., 14% due 11/15/2015 1,110,790
3,875,000 Mediacom LLC, 9.50% due 1/15/2013 4,000,937
--------------
57,355,451
-----------------------------------------------------------------------------------------------------------------------------------
Chemicals - 5.8% 3,550,000 ARCO Chemical Co., 9.80% due 2/01/2020 3,940,500
1,490,000 American Pacific Corp., 9% due 2/01/2015 (c) 1,503,037
4,000,000 Compass Minerals International, Inc. Series B, 12% due 6/01/2013 (h) 3,960,000
9,783,000 GEO Specialty Chemicals, Inc., 13.85% due 12/31/2009 (a)(c) 8,070,975
3,100,000 Hexion U.S. Finance Corp., 9.86% due 11/15/2014 (b)(c) 3,239,500
2,515,000 Ineos Group Holdings Plc, 8.50% due 2/15/2016 (c) 2,530,719
1,200,000 Innophos Holdings, Inc., 9.50% due 4/15/2012 (c) 1,224,000
1,360,000 MacDermid, Inc., 9.50% due 4/15/2017 (c) 1,434,800
1,050,000 Momentive Performance Materials, Inc., 10.125% due 12/01/2014 (c)(g) 1,097,250
14,060,000 NOVA Chemicals Corp., 8.484% due 11/15/2013 (b) 14,270,900
2,500,000 PolyOne Corp., 6.89% due 9/22/2008 2,450,000
--------------
43,721,681
-----------------------------------------------------------------------------------------------------------------------------------
BlackRock Debt Strategies Fund, Inc.
Schedule of Investments as of May 31, 2007
Face
Industry Amount Corporate Bonds Value
-----------------------------------------------------------------------------------------------------------------------------------
Consumer -
Non-Durables - 1.0% USD 9,000,000 Hines Nurseries, Inc., 10.25% due 10/01/2011 $ 7,200,000
-----------------------------------------------------------------------------------------------------------------------------------
Diversified Media - 3.8% 280,000 Affinion Group, Inc., 10.125% due 10/15/2013 306,600
800,000 Affinion Group, Inc., 11.50% due 10/15/2015 894,000
2,000,000 Cadmus Communications Corp., 8.375% due 6/15/2014 2,025,000
7,500,000 Liberty Media Corp., 0.75% due 3/30/2023 (a) 9,328,125
2,675,000 Muzak Holdings, LLC, 13% due 3/15/2010 (h) 2,143,344
3,875,000 NBC Acquisition Corp., 11% due 3/15/2013 (h) 3,332,500
580,000 Network Communications, Inc., 10.75% due 12/01/2013 615,525
4,325,000 Nielsen Finance LLC, 10% due 8/01/2014 (c) 4,714,250
5,300,000 Universal City Florida Holding Co. I, 10.106% due 5/01/2010 (b) 5,472,250
--------------
28,831,594
-----------------------------------------------------------------------------------------------------------------------------------
Energy - Exploration &
Production - 0.9% 480,000 Berry Petroleum Co., 8.25% due 11/01/2016 490,800
3,000,000 Chaparral Energy, Inc., 8.50% due 12/01/2015 3,007,500
2,445,000 Compton Petroleum Finance Corp., 7.625% due 12/01/2013 2,469,450
960,000 Stone Energy Corp., 8.106% due 7/15/2010 (b)(c) 960,000
--------------
6,927,750
-----------------------------------------------------------------------------------------------------------------------------------
Energy - Other - 2.3% 2,735,000 Aleris International, Inc., 9% due 12/15/2014 (c)(g) 2,926,450
8,000,000 Ocean RIG ASA, 9.35% due 4/04/2011 (b) 7,980,000
6,300,000 SemGroup LP, 8.75% due 11/15/2015 (c) 6,591,375
--------------
17,497,825
-----------------------------------------------------------------------------------------------------------------------------------
Financial - 1.6% 5,743,690 Archimedes Funding III Ltd., 5.50% due 11/29/2011 (b)(c) 3,561,088
1,500,000 Investcorp SA, 7.54% due 10/21/2008 1,517,977
2,000,000 Pennant CBO Ltd., 13.43% due 3/14/2011 (c) 1,840,000
3,500,000 RAIT Financial Trust, 6.875% due 4/15/2027 (a)(c) 3,508,750
1,630,000 USI Holdings Corp., 9.23% due 11/15/2014 (b)(c) 1,634,075
--------------
12,061,890
-----------------------------------------------------------------------------------------------------------------------------------
Food & Tobacco - 0.1% 600,000 Swift & Co., 12.50% due 1/01/2010 627,000
-----------------------------------------------------------------------------------------------------------------------------------
Gaming - 2.1% 1,250,000 Galaxy Entertainment Finance Co. Ltd., 9.875% due 12/15/2012 (c) 1,359,375
2,560,000 Little Traverse Bay Bands of Odawa Indians, 10.25% due 2/15/2014 (c) 2,662,400
915,000 Penn National Gaming, Inc., 6.75% due 3/01/2015 928,725
1,015,000 Snoqualmie Entertainment Authority, 9.15% due 2/01/2014 (b)(c) 1,037,838
3,400,000 Station Casinos, Inc., 7.75% due 8/15/2016 3,510,500
3,265,000 Tropicana Entertainment, LLC, 9.625% due 12/15/2014 (c) 3,297,650
3,000,000 Tunica-Biloxi Gaming Authority, 9% due 11/15/2015 (c) 3,191,250
--------------
15,987,738
-----------------------------------------------------------------------------------------------------------------------------------
Health Care - 4.9% 5,000,000 Angiotech Pharmaceuticals, Inc., 9.11% due 12/01/2013 (b) 5,200,000
3,525,000 CDRV Investors, Inc., 9.75% due 1/01/2015 (h) 3,203,344
3,525,000 Elan Finance Plc, 7.75% due 11/15/2011 3,591,094
4,825,000 Elan Finance Plc, 9.36% due 11/15/2011 (b) 4,921,500
7,025,000 HealthSouth Corp., 11.354% due 6/15/2014 (b)(c) 7,657,250
6,000,000 Tenet Healthcare Corp., 7.375% due 2/01/2013 5,655,000
1,000,000 Universal Hospital Services, Inc., 8.50% due 6/01/2015 (c)(g) 1,021,250
930,000 Universal Hospital Services, Inc., 8.759% due 6/01/2015 (b)(c) 943,950
1,400,000 VWR International, Inc., 8% due 4/15/2014 1,506,750
4,100,000 Vanguard Health Holding Co. I, LLC, 11.25% due 10/01/2015 (h) 3,474,750
--------------
37,174,888
-----------------------------------------------------------------------------------------------------------------------------------
Housing - 7.4% 3,000,000 CPG International I, Inc., 12.117% due 7/01/2012 (b) 3,101,250
1,300,000 CPG International I, Inc., 10.50% due 7/01/2013 1,378,000
3,070,000 Esco Corp., 9.235% due 12/15/2013 (b)(c) 3,192,800
2,319,000 Goodman Global Holding Co., Inc., 8.36% due 6/15/2012 (b) 2,345,089
8,200,000 Goodman Global Holding Co., Inc., 7.875% due 12/15/2012 8,343,500
5,200,000 Masonite Corp., 11% due 4/06/2015 (c) 4,914,000
5,850,000 Nortek, Inc., 8.50% due 9/01/2014 5,806,125
BlackRock Debt Strategies Fund, Inc.
Schedule of Investments as of May 31, 2007
Face
Industry Amount Corporate Bonds Value
-----------------------------------------------------------------------------------------------------------------------------------
USD 4,450,000 Ply Gem Industries, Inc., 9% due 2/15/2012 $ 4,127,375
4,770,000 Realogy Corp., 10.50% due 4/15/2014 (c) 4,787,888
7,540,000 Realogy Corp., 11% due 4/15/2014 (c)(g) 7,502,300
8,610,000 Realogy Corp., 12.375% due 4/15/2015 (c) 8,394,750
2,250,000 Stanley-Martin Communities LLC, 9.75% due 8/15/2015 2,047,500
--------------
55,940,577
-----------------------------------------------------------------------------------------------------------------------------------
Information 3,000,000 Amkor Technology, Inc., 7.125% due 3/15/2011 2,943,750
Technology - 5.3% 210,000 Amkor Technology, Inc., 7.75% due 5/15/2013 206,062
2,645,000 Amkor Technology, Inc., 9.25% due 6/01/2016 2,770,637
2,275,000 BMS Holdings, Inc., 12.40% due 2/15/2012 (b)(c) 2,252,250
245,000 Compagnie Generale de Geophysique SA, 7.50% due 5/15/2015 256,331
670,000 Compagnie Generale de Geophysique-Veritas, 7.75% due 5/15/2017 706,850
8,990,000 Freescale Semiconductor, Inc., 9.125% due 12/15/2014 (c)(g) 8,900,100
5,470,000 Freescale Semiconductor, Inc., 9.235% due 12/15/2014 (b)(c) 5,476,837
630,000 Nortel Networks Ltd., 9.606% due 7/15/2011 (b)(c) 678,825
375,000 Sanmina-SCI Corp., 8.125% due 3/01/2016 364,688
3,370,000 Spansion, Inc., 8.485% due 6/01/2013 (b)(c) 3,412,125
4,818,000 SunGard Data Systems, Inc., 10.25% due 8/15/2015 5,269,688
2,915,026 UGS Capital Corp. II, 10.348% due 6/01/2011 (c)(g) 2,995,189
3,500,000 Viasystems, Inc., 10.50% due 1/15/2011 3,570,000
--------------
39,803,332
-----------------------------------------------------------------------------------------------------------------------------------
Leisure - 2.7% 5,767,622 HRP Myrtle Beach Holdings LLC, 14.50% due 4/01/2014 (c)(g) 5,854,136
5,000,000 HRP Myrtle Beach Operations LLC, 10.07% due 4/01/2012 (b)(c) 5,025,000
5,000,000 HRP Myrtle Beach Operations LLC, 12.50% due 4/01/2013 (c) 5,025,000
2,600,000 Travelport, Inc., 9.985% due 9/01/2014 (b)(c) 2,697,500
2,000,000 True Temper Sports, Inc., 8.375% due 9/15/2011 1,795,000
--------------
20,396,636
-----------------------------------------------------------------------------------------------------------------------------------
Manufacturing - 2.8% 4,000,000 CPI Holdco, Inc., 11.151% due 2/01/2015 (b) 4,130,000
175,000 Fedders North America, Inc., 9.875% due 3/01/2014 64,750
3,815,000 Invensys Plc, 9.875% due 3/15/2011 (c) 4,101,125
2,660,000 Jarden Corp., 7.50% due 5/01/2017 2,713,200
4,135,000 NXP B.V., 8.106% due 10/15/2013 4,259,050
2,300,000 NXP B.V., 9.50% due 10/15/2015 2,380,500
1,480,000 RBS Global, Inc., 9.50% due 8/01/2014 1,591,000
1,685,000 RBS Global, Inc., 8.875% due 9/01/2016 1,756,612
--------------
20,996,237
-----------------------------------------------------------------------------------------------------------------------------------
Metal - Other - 2.9% 10,360,000 Freeport-McMoRan Copper & Gold, Inc., 8.564% due 4/01/2015 (b) 10,916,850
6,100,000 Indalex Holding Corp. Series B, 11.50% due 2/01/2014 6,473,625
4,550,000 RathGibson, Inc., 11.25% due 2/15/2014 4,823,000
--------------
22,213,475
-----------------------------------------------------------------------------------------------------------------------------------
Packaging - 2.0% 665,000 Berry Plastics Holding Corp., 8.875% due 9/15/2014 681,625
375,000 Berry Plastics Holding Corp., 9.235% due 9/15/2014 (b) 383,906
1,100,000 Graham Packing Co., Inc., 9.875% due 10/15/2014 1,133,000
705,000 Graphic Packaging International Corp., 9.50% due 8/15/2013 749,944
6,215,000 Packaging Dynamics Finance Corp., 10% due 5/01/2016 (c) 6,277,150
6,325,000 Wise Metals Group LLC, 10.25% due 5/15/2012 6,008,750
--------------
15,234,375
-----------------------------------------------------------------------------------------------------------------------------------
Paper - 9.6% 6,500,000 Abitibi-Consolidated, Inc., 8.86% due 6/15/2011 (b) 6,126,250
9,725,000 Ainsworth Lumber Co. Ltd., 9.10% due 10/01/2010 (b) 7,974,500
8,000,000 Ainsworth Lumber Co. Ltd., 9.35% due 4/01/2013 (b) 6,160,000
2,150,000 Boise Cascade LLC, 8.231% due 10/15/2012 (b) 2,150,000
900,000 Boise Cascade LLC, 7.125% due 10/15/2014 900,000
7,600,000 Bowater, Inc., 8.36% due 3/15/2010 (b) 7,609,500
3,775,000 Domtar, Inc., 7.125% due 8/15/2015 3,798,594
8,000,000 NewPage Corp., 11.606% due 5/01/2012 (b) 8,890,000
BlackRock Debt Strategies Fund, Inc.
Schedule of Investments as of May 31, 2007
Face
Industry Amount Corporate Bonds Value
-----------------------------------------------------------------------------------------------------------------------------------
USD 4,725,000 NewPage Corp., 12% due 5/01/2013 $ 5,244,750
13,625,000 Smurfit Kappa Funding Plc, 7.75% due 4/01/2015 13,999,688
1,600,000 Smurfit-Stone Container Enterprises, Inc., 8.375% due 7/01/2012 1,632,000
2,600,000 Smurfit-Stone Container Enterprises, Inc., 8% due 3/15/2017 (c) 2,619,500
4,400,000 Verso Paper Holdings LLC, 9.106% due 8/01/2014 (b)(c) 4,532,000
530,000 Verso Paper Holdings LLC, 11.375% due 8/01/2016 (c) 567,100
--------------
72,203,882
-----------------------------------------------------------------------------------------------------------------------------------
Retail - 4.0% 2,215,000 Buffets, Inc., 12.50% due 11/01/2014 2,259,300
700,000 Claire's Stores, Inc., 9.25% due 6/01/2015 (c) 693,875
700,000 Claire's Stores, Inc., 10.50% due 6/01/2017 (c) 685,125
5,560,000 General Nutrition Centers, Inc., 9.85% due 3/15/2014 (c)(g) 5,587,800
4,480,000 General Nutrition Centers, Inc., 10.75% due 3/15/2015 (c) 4,480,000
3,790,000 Michaels Stores, Inc., 10% due 11/01/2014 (c) 4,093,200
8,660,000 Michaels Stores, Inc., 11.375% due 11/01/2016 (c) 9,569,300
2,900,000 Rite Aid Corp., 9.375% due 12/15/2015 (c) 2,914,500
--------------
30,283,100
-----------------------------------------------------------------------------------------------------------------------------------
Service - 1.8% 2,000,000 Buhrmann U.S., Inc., 7.875% due 3/01/2015 1,990,000
3,000,000 Neff Rental LLC, 11.25% due 6/15/2012 3,480,000
1,090,000 PNA Intermediate Holding Corp., 12.36% due 2/15/2013 (b)(c) 1,111,800
4,280,000 Sally Holdings LLC, 10.50% due 11/15/2016 (c) 4,435,150
810,000 Yankee Acquisition Corp., 8.50% due 2/15/2015 828,225
1,395,000 Yankee Acquisition Corp., 9.75% due 2/15/2017 1,426,388
--------------
13,271,563
-----------------------------------------------------------------------------------------------------------------------------------
Telecommunications - 2.7% 2,600,000 Nordic Telephone Co. Holdings ApS, 8.875% due 5/01/2016 (c) 2,817,750
7,900,000 Qwest Communications International, Inc., 8.86% due 2/15/2009 (b) 7,998,750
2,675,000 Qwest Corp., 8.61% due 6/15/2013 (b) 2,929,125
6,000,000 Time Warner Telecom Holdings, Inc., 9.25% due 2/15/2014 6,442,500
--------------
20,188,125
-----------------------------------------------------------------------------------------------------------------------------------
Transportation - 1.5% 1,250,000 Atlantic Express Transportation Corp., 12.609% due 4/15/2012 (b)(c) 1,246,875
790,000 Britannia Bulk Plc, 11% due 12/01/2011 801,850
1,500,000 Navios Maritime Holdings, Inc., 9.50% due 12/15/2014 (c) 1,591,875
6,060,000 St. Acquisition Corp., 13.107% due 5/15/2015 (b)(c) 5,878,200
1,760,000 Titan Petrochemicals Group Ltd., 8.50% due 3/18/2012 (c) 1,698,400
--------------
11,217,200
-----------------------------------------------------------------------------------------------------------------------------------
Utility - 2.3% 4,142,000 CenterPoint Energy, Inc. Series B, 3.75% due 5/15/2023 (a) 6,994,803
2,900,000 El Paso Performance-Linked Trust, 7.75% due 7/15/2011 (c) 3,066,750
5,380,000 NSG Holdings LLC, 7.75% due 12/15/2025 (c) 5,662,450
1,425,000 Williams Cos., Inc., 8.625% due 6/01/2010 1,487,344
--------------
17,211,347
-----------------------------------------------------------------------------------------------------------------------------------
Wireless 1,905,000 Centennial Communications Corp., 11.099% due 1/01/2013 (b) 2,002,631
Communications - 3.6% 5,250,000 Cricket Communications, Inc., 9.375% due 11/01/2014 5,565,000
3,560,000 Digicel Group Ltd., 8.875% due 1/15/2015 (c) 3,528,850
7,465,000 Digicel Group Ltd., 9.125% due 1/15/2015 (c)(g) 7,334,362
2,150,000 FiberTower Corp., 9% due 11/15/2012 (a)(c) 2,289,750
1,250,000 iPCS, Inc., 7.48% due 5/01/2013 (b)(c) 1,253,125
620,000 Orascom Telecom Finance SCA, 7.875% due 2/08/2014 610,452
755,000 Orascom Telecom Finance SCA, 7.875% due 2/08/2014 (c) 738,956
3,270,000 West Corp., 11% due 10/15/2016 3,539,775
--------------
26,862,901
-----------------------------------------------------------------------------------------------------------------------------------
Total Corporate Bonds (Cost - $663,007,308) - 89.6% 674,836,675
-----------------------------------------------------------------------------------------------------------------------------------
BlackRock Debt Strategies Fund, Inc.
Schedule of Investments as of May 31, 2007
Face
Industry Amount Floating Rate Loan Interests** Value
-----------------------------------------------------------------------------------------------------------------------------------
Aerospace &
Defense - 0.5% USD 78,014 Hawker Beechcraft Letter of Credit, 5.25% due 3/31/2014 $ 78,376
921,986 Hawker Beechcraft Term Loan B, 7.32% due 3/31/2014 926,267
1,248,106 IAP Worldwide Services, Inc. Term Loan, 9.688% due 12/31/2012 1,251,617
1,995,000 MRO Acquisitions Corp. First Lien Term Loan, 7.82% due 9/15/2010 2,001,234
--------------
4,257,494
-----------------------------------------------------------------------------------------------------------------------------------
Airlines - 0.7% 2,000,000 Delta Airlines First Lien Term Loan, 7.355% due 5/15/2012 2,007,000
2,000,000 U.S. Airways Group, Inc. Term Loan B, 7.85% due 3/22/2014 2,011,876
1,500,000 United Air Lines, Inc. Term Loan B, 7.375% due 1/30/2014 1,501,056
--------------
5,519,932
-----------------------------------------------------------------------------------------------------------------------------------
Automotive - 3.4% 2,000,000 ADESA, Inc. Term Loan B, 7.57% due 10/30/2013 2,012,752
1,000,000 Delphi Automotive Systems Term Loan, 8.125% due 12/31/2007 1,002,517
2,000,000 Goodyear Tire & Rubber Co., First Lien Term Loan, 7.10% due 4/30/2014 2,007,858
1,685,185 Intermet Corp. Letter of Credit, 10.20% due 11/08/2010 1,426,791
1,162,530 Intermet Corp. Term Loan B, 10.34% due 11/08/2010 984,276
1,745,625 Keystone Automotive Operations, Inc. Term Loan B,
8.82% - 8.855% due 1/15/2012 1,693,256
86,538 Metaldyne Corp. Letter of Credit, 8.92% - 9.10% due 1/15/2012 87,224
588,462 Metaldyne Corp. Term Loan B, 9.10% due 1/15/2014 593,120
1,866,667 Navistar International Transportation Corp. Revolving Credit,
5.22% - 8.61% due 6/30/2012 1,891,555
5,133,333 Navistar International Transportation Corp. Term Loan, 8.61% due 6/30/2012 5,201,776
1,995,000 Oshkosh Truck Corp. Term Loan B, 7.10% due 11/30/2013 2,002,481
1,000,000 TRW Automotive, Inc. Term Loan B, 6.875% due 12/31/2013 1,004,000
5,750,000 Visteon Corp. Term Loan B, 8.38% due 6/13/2013 5,785,345
--------------
25,692,951
-----------------------------------------------------------------------------------------------------------------------------------
Beverages - 0.1% 1,000,000 Culligan International Term Loan B, 9.50% due 4/24/2012 1,005,000
-----------------------------------------------------------------------------------------------------------------------------------
Broadcasting - 3.3% 3,000,000 Bresnan Telecommunications Term Loan B, 7.38% due 9/29/2013 3,010,314
4,500,000 Discovery Communications Term Loan B, 7.34% due 5/15/2013 4,537,971
6,500,000 Ellis Communications Term Loan, 10% due 12/30/2011 6,483,750
1,000,000 Local TV LLC Term Loan, 7.36% due 5/15/2013 1,005,000
495,244 Multicultural Radio Broadcasting, Inc. Term Loan, 8.098% due 12/15/2012 496,482
1,000,000 NEP Supershooters, LP Term Loan B, 7.60% due 2/13/2014 1,005,313
1,500,000 Persona Communications Second Lien Term Loan, 11.32% due 4/30/2014 1,521,563
4,697,987 Univision Communications, Inc. Delay Draw Term Loan, 7.605% due 9/30/2014 4,691,212
--------------
22,751,605
-----------------------------------------------------------------------------------------------------------------------------------
Cable - U.S. - 5.7% 2,300,000 Cequel Communications LLC First Lien Term Loan,
7.34% - 7.61% due 11/05/2013 2,301,293
8,317,962 Cequel Communications LLC Second Lien Term Loan, 11.49% due 5/04/2014 8,580,502
4,310,344 Cequel Communications LLC Term Loan B, 7.61% due 11/05/2013 4,312,766
21,000,000 Charter Communications, Inc. Term Loan B, 7.32% due 4/30/2014 20,998,698
6,750,000 Insight Midwest Holdings LLC Delay Draw Term Loan, 7.572% due 4/03/2014 6,792,714
2,250,000 Insight Midwest Holdings LLC Term Loan B, 5.32% due 4/06/2014 2,264,238
--------------
45,250,211
-----------------------------------------------------------------------------------------------------------------------------------
BlackRock Debt Strategies Fund, Inc.
Schedule of Investments as of May 31, 2007
Face
Industry Amount Floating Rate Loan Interests** Value
-----------------------------------------------------------------------------------------------------------------------------------
Chemicals - 2.0% USD 400,000 Arizona Chemical Second Lien Term Loan, 10.86% due 2/28/2014 $ 404,250
1,427,316 Huntsman ICI Holdings Term Loan B, 7.07% due 8/16/2012 1,434,007
672,000 NuSil Technology Term Loan, 8.07% due 10/31/2013 675,360
3,136,000 Rockwood Specialties Group, Inc. Tranche D Term Loan,
7.355% due 12/10/2012 3,159,520
10,000,000 Wellman, Inc. Second Lien Term Loan, 12.106% due 2/10/2010 9,185,710
--------------
14,858,847
-----------------------------------------------------------------------------------------------------------------------------------
Consumer -
Non-Durables - 1.3% 1,500,000 Culligan Dollar Loan, 8.609% due 4/24/2013 2,018,326
300,000 Gold Toe Investment Corp. Second Lien Term Loan, 11.36% due 4/30/2014 305,625
695,431 Renfro Corp. Term Loan B, 8.59% - 8.61% due 9/30/2013 702,385
281,917 Spectrum Brands Letter of Credit, 5.17% due 4/15/2013 284,854
5,703,182 Spectrum Brands Term Loan B-1, 9.32% - 9.36% due 4/15/2013 5,762,592
1,014,901 Spectrum Brands Term Loan B-2, 9.32% due 4/15/2013 1,017,439
--------------
10,091,221
-----------------------------------------------------------------------------------------------------------------------------------
Diversified Media - 1.4% 4,000,000 Affinion Group Term Loan,11.66% due 3/01/2012 4,000,000
591,667 GateHouse Media, Inc. Delay Draw Term Loan,
7.10% - 7.36% due 9/15/2014 590,927
2,000,000 GateHouse Media, Inc. Term Loan B, 7.36% due 9/15/2014 1,997,500
995,000 Nielsen Finance LLC Term Loan B, 8.125% due 8/15/2013 1,002,774
1,000,000 Penton Media Term Loan, 10.355% due 2/15/2014 1,007,500
963,550 Riverdeep Group Ltd. Bridge Loan, 11.55% due 12/21/2007 963,550
1,000,000 Riverdeep Group Ltd. Term Loan B, 8.10% due 12/21/2013 1,004,688
--------------
10,566,939
-----------------------------------------------------------------------------------------------------------------------------------
Energy - Exploration &
Production - 2.2% 787,500 Big West Oil & Gas Term Loan B, 9.50% due 5/15/2014 791,437
374,053 Carrizo Oil & Gas, Inc. Second Lien Term Loan, 10.10% due 7/21/2010 377,326
750,000 Energy Transfer Equity LP Term Loan B, 7.106% due 11/01/2012 754,420
10,000,000 Frontier Drilling Term Loan B, 8.57% due 6/21/2013 10,012,500
500,000 Longyear Global Holdings, Inc. Second Lien Term Loan,
10.32% due 10/31/2013 508,125
1,237,500 MEG Energy Corp. Term Loan B, 7.35% due 4/03/2013 1,246,201
2,000,000 Sandridge Energy Term Loan, 8.625% - 8.975% due 3/01/2014 2,060,000
1,205,357 Western Refining Company LP Term Loan B, 7.07% due 3/15/2014 1,209,877
--------------
16,959,886
-----------------------------------------------------------------------------------------------------------------------------------
Energy - Other - 1.9% 465,806 Coleto Creek Letter of Credit, 8.10% due 7/31/2013 467,359
31,847 Coleto Creek Term Loan B, 8.128% due 7/31/2013 31,953
3,000,000 Dresser, Inc. First Lien Term Loan, 7.86% due 5/15/2014 3,023,625
2,500,000 Dresser, Inc. Second Lien Term Loan, 11.11% due 5/15/2015 2,546,875
8,000,000 Scorpion Drilling Ltd. Second Lien Term Loan,13.605% due 5/05/2015 8,520,000
--------------
14,589,812
-----------------------------------------------------------------------------------------------------------------------------------
Financial - 1.0% 2,000,000 J.G. Wentworth Manufacturing Second Lien Term Loan,
10.35% due 10/15/2014 2,028,750
4,000,000 J.G. Wentworth Manufacturing Term Loan B, 7.60% 4,005,000
due 4/15/2014
250,000 Kyle Acquisition Term Loan B, 8.875% due 7/20/2009 252,656
1,000,000 USI Holdings Corp. Term Loan B, 8.11% due 5/15/2014 1,008,333
--------------
7,294,739
-----------------------------------------------------------------------------------------------------------------------------------
BlackRock Debt Strategies Fund, Inc.
Schedule of Investments as of May 31, 2007
Face
Industry Amount Floating Rate Loan Interests** Value
-----------------------------------------------------------------------------------------------------------------------------------
Food & Tobacco - 3.5% USD 592,573 ARAMARK Corp. Letter of Credit, 7.445% due 1/30/2014 $ 596,479
8,291,597 ARAMARK Corp. Term Loan B, 7.475% due 1/30/2014 8,346,246
1,000,000 Bolthouse Farms, Inc. Second Lien Term Loan, 10.85% due 12/01/2013 1,011,667
1,000,000 DS Waters LP Term Loan B, 7.57% due 11/15/2012 1,000,000
465,116 Dole Food Co., Inc. Letter of Credit, 5.23% due 4/12/2013 465,084
1,038,663 Dole Food Co., Inc. Term Loan B, 7.438% - 9.25% due 4/12/2013 1,038,591
3,462,209 Dole Food Co., Inc. Term Loan C, 7.438% - 9.25% due 4/04/2013 3,461,970
970,560 Eight O'Clock Coffee Second Lien Term Loan, 8.125% due 7/21/2012 970,560
1,000,000 OSI Restaurant Partners, Inc. Term Loan B, 7.57% due 5/15/2014 1,006,250
6,000,000 QCE LLC Second Lien Term Loan, 11.10% due 11/05/2013 6,028,500
1,000,000 Sturm Foods, Inc. First Lien Term Loan, 7.938% due 1/30/2014 1,003,750
1,250,000 Sturm Foods, Inc. Second Lien Term Loan, 11.438% due 6/30/2014 1,259,375
--------------
26,188,472
-----------------------------------------------------------------------------------------------------------------------------------
Gaming - 2.2% 2,250,000 Edge-Star Partners LLC First Lien Term Loan, 9.375% due 11/18/2007 2,250,000
481,818 Green Valley Ranch Gaming LLC Term Loan, 7.36% due 1/29/2012 484,571
750,000 Green Valley Ranch Gaming LLC Term Loan, 8.61% due 8/30/2014 755,156
3,200,000 Las Vegas Sands Term Loan B, 7.07% due 5/04/2014 3,208,861
1,055,813 Tropicana Opco Term Loan B, 7.86% due 12/15/2011 1,064,655
2,500,000 Venetian Macau U.S. Finance Co. LLC Delay Draw Term Loan,
8.10% due 5/25/2012 2,509,765
6,000,000 Venetian Macau U.S. Finance Co. LLC Term Loan B,
7.60% - 8.10% due 5/25/2013 6,049,770
--------------
16,322,778
-----------------------------------------------------------------------------------------------------------------------------------
Health Care - 1.7% 489,250 CCS Medical First Lien Term Loan, 8.60% due 10/31/2012 489,020
2,000,000 DaVita, Inc. Term Loan B, 6.82% - 6.86% due 7/30/2012 2,005,626
3,500,000 Health Management Associates, Inc. Term Loan B, 7.07% due 1/15/2014 3,514,098
3,000,000 Pharmaceutical Technologies & Services (PTS) Term Loan,
7.60% due 4/15/2014 3,007,032
3,089,536 Rotech Healthcare, Inc. Term Loan B, 11.36% due 9/26/2011 3,089,536
--------------
12,105,312
-----------------------------------------------------------------------------------------------------------------------------------
Housing - 0.4% 2,953,125 Headwaters, Inc. Term Loan B-1, 7.32% due 4/30/2011 2,953,125
482,867 Yellowstone Club Term Loan B, 7.695% due 10/15/2010 481,760
--------------
3,434,885
-----------------------------------------------------------------------------------------------------------------------------------
Information
Technology - 3.9% 3,686,354 Activant Solutions Term Loan B, 7.375% due 5/02/2013 3,677,138
679,128 Advanced Micro Devices, Inc. Term Loan B, 7.34% due 10/31/2013 681,058
8,000,000 Aspect Software Second Lien Term Loan, 12.438% due 7/05/2012 8,060,000
1,000,000 Audio Visual Services Corp. Second Lien Term Loan,
10.85% due 9/15/2014 1,003,750
973,460 ClientLogic Holding Corp. Term Loan B, 7.82% - 7.855% due 1/30/2014 978,328
1,500,000 CoCreate Software, Inc. Second Lien Term Loan, 12.57% due 5/30/2014 1,503,750
474,940 Intergraph Corp. Term Loan, 7.61% due 5/15/2014 478,304
1,000,000 Intergraph Corp. Term Loan, 11.36% due 11/15/2014 1,007,083
299,250 RedPrairie Corp. Term Loan, 8.375% due 7/31/2012 299,998
896,489 RedPrairie Corp. Term Loan, 10.25% due 7/31/2012 898,730
BlackRock Debt Strategies Fund, Inc.
Schedule of Investments as of May 31, 2007
Face
Industry Amount Floating Rate Loan Interests** Value
-----------------------------------------------------------------------------------------------------------------------------------
USD 3,500,000 Reynolds & Reynolds Co. Third Lien Term Loan, 12.85% due 10/31/2014 $ 3,613,750
1,000,000 SafeNet, Inc. First Lien Term Loan, 7.855% due 5/11/2015 1,001,250
3,307,500 Telcordia Technologies, Inc. Term Loan, 8.11% due 9/15/2012 3,270,291
750,000 Transaction Network Services Term Loan B, 7.36% due 5/15/2014 751,875
1,995,000 Verifone, Inc. Term Loan B, 7.11% due 2/28/2013 2,002,481
--------------
29,227,786
-----------------------------------------------------------------------------------------------------------------------------------
Leisure - 0.7% 3,620,000 Easton-Bell Sports, Inc. Term Loan B, 11.39% due 5/01/2012 3,622,263
1,750,000 National Cinemedia LLC Term Loan B, 7.09% due 2/28/2015 1,750,938
--------------
5,373,201
-----------------------------------------------------------------------------------------------------------------------------------
Manufacturing - 1.6% 1,000,000 Brand Energy Term Loan B, 7.625% - 11.375% due 2/15/2015 1,008,750
1,000,000 Harrington Holdings, Inc. Term Loan, 7.84% due 1/15/2014 1,005,000
2,500,000 Huish Detergents, Inc. First Lien Term Loan, 7.32% due 4/15/2014 2,503,907
1,500,000 Huish Detergents, Inc. Second Lien Term Loan, 9.57% due 10/15/2014 1,522,500
1,500,000 Jason, Inc. Term Loan B, 7.82% due 4/30/2010 1,503,750
1,449,557 John Maneely Co. Term Loan B, 8.571% - 10.50% due 12/15/2013 1,446,160
2,000,000 Mueller Water Products Term Loan B, 7.07% due 5/16/2014 2,015,000
1,060,000 Rexnord Corp. Payment In Kind Term Loan, 11.598% due 3/02/2013 1,032,175
--------------
12,037,242
-----------------------------------------------------------------------------------------------------------------------------------
Metal - Other - 1.1% 2,544,790 Euramax International Plc First Lien Term Loan, 8.375% due 6/29/2012 2,537,367
1,989,474 Euramax International Plc Second Lien Term Loan, 8.375% due 6/29/2013 1,955,901
4,010,526 Euramax International Plc Second Lien Term Loan, 13.35% due 6/29/2013 3,942,849
--------------
8,436,117
-----------------------------------------------------------------------------------------------------------------------------------
Other - 0.4% 3,000,000 ARS Second Lien Term Loan, 12% due 4/17/2015 2,970,000
-----------------------------------------------------------------------------------------------------------------------------------
Packaging - 2.1% 3,134,189 Anchor Glass Container Corp. Term Loan B, 7.60% - 7.61% due 5/03/2013 3,118,518
8,590,000 Berry Plastics, 11.61% due 6/15/2014 8,353,775
750,000 Consolidated Container Second Lien Term Loan, 10.82% due 10/15/2014 743,750
2,000,000 Graham Packaging Term Loan B, 7.625% due 4/15/2011 2,015,416
1,500,000 Graphic Packaging International Term Loan B, 8.75% due 8/08/2010 1,512,813
--------------
15,744,272
-----------------------------------------------------------------------------------------------------------------------------------
Paper - 0.7% 5,000,000 Verso Paper Holdings LLC Term Loan B, 11.57% due 2/01/2013 5,018,750
-----------------------------------------------------------------------------------------------------------------------------------
Retail - 0.9% 1,500,000 Burlington Coat Factory Warehouse Corp. Term Loan B,
7.61% due 4/15/2013 1,495,938
3,500,000 Claire's Stores Term Loan B, 8.07% due 5/24/2014 3,483,595
1,000,000 David's Bridal, Inc. Term Loan B, 7.40% due 1/30/2014 992,083
648,375 PETCO Animal Supplies, Inc. Term Loan, 8.07% - 8.10% due 10/31/2012 653,701
--------------
6,625,317
-----------------------------------------------------------------------------------------------------------------------------------
Service - 1.8% 750,000 Brickman Group, Inc. Term Loan, 7.34% - 7.399% due 1/30/2014 751,875
750,000 Brock Holdings Term Loan, 7.32% due 2/28/2014 752,813
500,000 Inmar, Inc. Term Loan B, 7.82% due 5/15/2013 503,125
3,019,996 NES Rentals Holdings, Inc. Term Loan C, 12.125% due 7/12/2013 3,038,871
250,000 RiskMetrics Group, Inc. Second Lien Term Loan, 10.85% due 6/15/2014 254,063
750,000 RiskMetrics Group, Inc. Term Loan, 7.60% due 1/15/2014 756,563
7,549,200 Waste Services, Inc. Term Loan D, 8.07% due 3/31/2011 7,605,819
--------------
13,663,129
-----------------------------------------------------------------------------------------------------------------------------------
BlackRock Debt Strategies Fund, Inc.
Schedule of Investments as of May 31, 2007
Face
Industry Amount Floating Rate Loan Interests** Value
-----------------------------------------------------------------------------------------------------------------------------------
Steel - 0.1% USD 498,750 McJunkin Corp. Term Loan B, 7.60% due 1/30/2014 $ 501,867
-----------------------------------------------------------------------------------------------------------------------------------
Telecommunications - 0.8% 997,500 Kentucky Data Link, Inc. Term Loan B, 7.57% due 2/28/2015 1,001,241
3,161,871 Winstar Communications Debtor in Possession, 6.366% due 12/31/2006 (e) 4,769,154
--------------
5,770,395
-----------------------------------------------------------------------------------------------------------------------------------
Transportation - 0.7% 5,000,000 Swift Transportation Co., Inc. Term Loan B, 8.375% due 5/15/2014 4,988,125
-----------------------------------------------------------------------------------------------------------------------------------
Utility - 0.8% 4,000,000 Generac Portable Products, Inc. Second Lien Term Loan,
11.35% due 5/15/2014 3,823,332
70,313 MACH Gen LLC Letter of Credit, 7.323% due 2/22/2014 70,269
677,988 MACH Gen LLC Term Loan, 7.36% due 2/22/2014 677,480
750,000 Nebraska Energy Second Lien Term Loan, 7.82% due 10/31/2014 758,125
1,000,000 USPF Holdings Term Loan, 7.082% - 7.10% due 4/15/2014 1,003,750
--------------
6,332,956
-----------------------------------------------------------------------------------------------------------------------------------
Wireless
Communications - 1.4% 4,750,000 Centennial Cellular Operating Co. Term Loan, 7.614% due 2/09/2011 4,782,656
2,500,000 Crown Castle Operating Co. Term Loan, 6.82% - 6.899% due 3/15/2014 2,504,490
2,992,500 West Corp. Term Loan, 7.763% - 8.10% due 10/31/2013 3,014,944
--------------
10,302,090
-----------------------------------------------------------------------------------------------------------------------------------
Total Floating Rate Loan Interests
(Cost - $358,553,892) - 48.3% 363,881,331
-----------------------------------------------------------------------------------------------------------------------------------
Shares
Held Common Stocks
-----------------------------------------------------------------------------------------------------------------------------------
Airlines - 0.6% 221,602 Delta Air Lines, Inc. (d) 4,221,518
-----------------------------------------------------------------------------------------------------------------------------------
Cable - U.S. - 0.9% 150,084 Loral Space & Communications Ltd. (d) 7,038,940
-----------------------------------------------------------------------------------------------------------------------------------
Chemicals - 0.0% 339,340 GEO Specialty Chemicals, Inc. (d) 339,340
-----------------------------------------------------------------------------------------------------------------------------------
Financial - 0.2% 35,000 Preferred Term Securities VI, Ltd. (d) 1,609,300
-----------------------------------------------------------------------------------------------------------------------------------
Food & Tobacco - 0.2% 1,428,423 Viskase Cos., Inc. (d) 1,642,686
-----------------------------------------------------------------------------------------------------------------------------------
Information
Technology - 0.2% 55,172 Cypress Semiconductor Corp. (d) 1,184,543
-----------------------------------------------------------------------------------------------------------------------------------
Leisure - 0.0% 5,000 HRP PIK Corp. Class B (g) 50
27,787 Lodgian, Inc. (d) 422,085
--------------
422,135
-----------------------------------------------------------------------------------------------------------------------------------
Manufacturing - 0.7% 724,291 ACP Holding Co. (d) 832,935
403 GenTek, Inc. (d) 14,210
286,757 Medis Technologies Ltd. (d) 4,189,520
--------------
5,036,665
-----------------------------------------------------------------------------------------------------------------------------------
Paper - 0.2% 36,342 Smurfit Kappa Plc (d) 929,100
211,149 Western Forest Products, Inc. Restricted Shares (d) 444,171
--------------
1,373,271
-----------------------------------------------------------------------------------------------------------------------------------
Service - 0.3% 90,876 Outsourcing Solutions, Inc. (d) 2,181,018
-----------------------------------------------------------------------------------------------------------------------------------
Steel - 0.0% 41,149 Acme Package Corp. Senior Holdings (d)(k) 0
-----------------------------------------------------------------------------------------------------------------------------------
Total Common Stocks (Cost - $29,842,442) - 3.3% 25,049,416
-----------------------------------------------------------------------------------------------------------------------------------
BlackRock Debt Strategies Fund, Inc.
Schedule of Investments as of May 31, 2007
Shares
Industry Held Preferred Stocks Value
-----------------------------------------------------------------------------------------------------------------------------------
Cable - U.S. - 0.3% 10,159 Loral Spacecom Corp. Series A, 12% (g) $ 2,095,300
-----------------------------------------------------------------------------------------------------------------------------------
Energy - Exploration &
Production - 1.2% 179 EXCO Resources, Inc., 7% (a) 1,790,000
737 EXCO Resources, Inc., 11% 7,370,000
--------------
9,160,000
-----------------------------------------------------------------------------------------------------------------------------------
Total Preferred Stocks (Cost - $11,168,180) - 1.5% 11,255,300
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Warrants (i)
-----------------------------------------------------------------------------------------------------------------------------------
Broadcasting - 0.0% 15,000 Sirius Satellite Radio, Inc. (expires 5/15/2009) 6,750
-----------------------------------------------------------------------------------------------------------------------------------
Health Care - 0.0% 126,761 HealthSouth Corp. (expires 1/16/2014) 101,409
-----------------------------------------------------------------------------------------------------------------------------------
Manufacturing - 0.1% 652,739 ACP Holding Co. (expires 9/30/2013) 718,013
471 GenTek, Inc. Tranche B (expires 11/10/2008) 20,253
231 GenTek, Inc. Tranche C (expires 11/10/2010) 9,125
--------------
747,391
-----------------------------------------------------------------------------------------------------------------------------------
Paper - 0.0% 18 Cellu Tissue Holdings, Inc. (expires 5/08/2007) 0
-----------------------------------------------------------------------------------------------------------------------------------
Wireless
Communications - 0.1% 1,325 American Tower Corp. (expires 8/01/2008) 806,806
-----------------------------------------------------------------------------------------------------------------------------------
Total Warrants (Cost - $870,754) - 0.2% 1,662,356
-----------------------------------------------------------------------------------------------------------------------------------
Beneficial
Interest Other Interests (f)
-----------------------------------------------------------------------------------------------------------------------------------
Airlines - 0.0% USD 9,705,000 Delta Airlines Default Escrow 0
-----------------------------------------------------------------------------------------------------------------------------------
Automotive - 0.0% 3,614,601 Cambridge Industries, Inc. (Litigation Trust Certificates) 0
-----------------------------------------------------------------------------------------------------------------------------------
Cable - U.S. - 0.0% 7,500,000 Adelphia C.V.U. Escrow 0
5,000 Adelphia C.V.U. Preferred Escrow 0
9,406,019 Adelphia C.V.U. Series ACC-4 30,939
500,000 Adelphia Recovery Trust Series ACC-6B 0
-----------------------------------------------------------------------------------------------------------------------------------
Total Other Interests (Cost - $30,801) - 0.0% 30,939
-----------------------------------------------------------------------------------------------------------------------------------
Total Investments (Cost - $1,063,473,377*) - 142.9% 1,076,716,017
Liabilities in Excess of Other Assets - (42.9%) (323,302,358)
--------------
Net Assets - 100.0% $ 753,413,659
==============
* The cost and unrealized appreciation (depreciation) of investments as of
May 31, 2007, as computed for federal income tax purposes, were as
follows:
Aggregate cost $ 1,064,746,857
===============
Gross unrealized appreciation $ 40,784,583
Gross unrealized depreciation (28,815,423)
---------------
Net unrealized appreciation $ 11,969,160
===============
** Floating rate loan interests in which the Fund invests generally pay
interest at rates that are periodically determined by reference to a base
lending rate plus a premium. The base lending rates are generally (i) the
lending rate offered by one or more European banks, such as LIBOR (London
InterBank Offered Rate), (ii) the prime rate offered by one or more U.S.
banks or (iii) the certificate of deposit rate.
(a) Convertible security.
(b) Floating rate security.
(c) The security may be offered and sold to "qualified institutional buyers"
under Rule 144A of the Securities Act of 1933.
(d) Non-income producing security.
(e) Non-income producing security; issuer filed for bankruptcy or is in
default of interest payments.
(f) Other interests represent beneficial interest in liquidation trusts and
other reorganization entities and are non-income producing.
BlackRock Debt Strategies Fund, Inc.
Schedule of Investments as of May 31, 2007
(g) Represents a pay-in-kind security which may pay interest/dividends in
additional face/shares.
(h) Represents a step bond; the interest rate shown reflects the effective
yield at the time of purchase.
(i) Warrants entitle the Fund to purchase a predetermined number of shares of
common stock and are non-income producing. The purchase price and number
of shares are subject to adjustment under certain conditions until the
expiration date.
(j) As a result of bankruptcy proceedings, the company did not repay the
principal amount of the security upon maturity and is non-income
producing.
(k) Restricted security as to resale, representing 0.0% of net assets were as
follows:
--------------------------------------------------------------------------
Acquisition
Issue Date Cost Value
--------------------------------------------------------------------------
Acme Package Corp. Senior Holdings 11/25/2002 -- --
--------------------------------------------------------------------------
o For Fund compliance purposes, the Fund's industry classifications refer to
any one or more of the industry sub-classifications used by one or more
widely recognized market indexes or ratings group indexes, and/or as
defined by Fund management. This definition may not apply for purposes of
this report, which may combine industry sub-classifications for reporting
ease. Industries are shown as a percent of net assets.
o Investments in companies considered to be an affiliate of the Fund, for
purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as
follows:
--------------------------------------------------------------------------
Affiliate Net Activity Interest Income
--------------------------------------------------------------------------
BlackRock Liquidity Series, LLC
Cash Sweep Series USD (1,914,750) $ 164,236
--------------------------------------------------------------------------
o Swaps outstanding as of May 31, 2007 were as follows:
-------------------------------------------------------------------------------------------------------------
Unrealized
Notional Appreciation
Amount (Depreciation)
-------------------------------------------------------------------------------------------------------------
Sold credit default protection on Novelis Inc. and receive 1.40%
Broker, JPMorgan Chase
Expires January 2008 USD 4,000,000 $ 9,044
Sold credit default protection on Ford Motor Co. and
receive 3.80%
Broker, Lehman Brothers Special Finance
Expires March 2010 USD 10,000,000 89,010
Bought credit default protection on Smithfield Foods, Inc. and
pay 1.52%
Broker, Credit Suisse First Boston
Expires March 2012 USD 4,000,000 (18,864)
Sold credit default protection on BAA Ferovial Junior Term Loan
and receive 2.00%
Broker, Deutsche Bank AG London
Expires June 2012 USD 1,733,002 2,769
-------------------------------------------------------------------------------------------------------------
Total $ 81,959
==============
o Currency Abbreviations:
GBP British Pound
USD U.S. Dollar
Item 2 - Controls and Procedures
2(a) - The registrant's certifying officers have reasonably designed such
disclosure controls and procedures to ensure material information
relating to the registrant is made known to us by others
particularly during the period in which this report is being
prepared. The registrant's certifying officers have determined that
the registrant's disclosure controls and procedures are effective
based on our evaluation of these controls and procedures as of a
date within 90 days prior to the filing date of this report.
2(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act (17
CFR 270.30a-3(d)) that occurred during the last fiscal quarter of
the period covered by this report that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
Item 3 - Exhibits
Certifications - Attached hereto
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
BlackRock Debt Strategies Fund, Inc.
By: /s/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.
Chief Executive Officer
BlackRock Debt Strategies Fund, Inc.
Date: July 24, 2007
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/ Robert C. Doll, Jr.
-----------------------
Robert C. Doll, Jr.
Chief Executive Officer
BlackRock Debt Strategies Fund, Inc.
Date: July 24, 2007
By: /s/ Donald C. Burke
-------------------
Donald C. Burke
Chief Financial Officer
BlackRock Debt Strategies Fund, Inc.
Date: July 24, 2007