a_preferredincomefundtwo.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811- 21202

John Hancock Preferred Income Fund II
(Exact name of registrant as specified in charter)

601 Congress Street, Boston, Massachusetts 02210
(Address of principal executive offices) (Zip code)

Alfred E. Ouellette, Senior Attorney and Assistant Secretary

601 Congress Street

Boston, Massachusetts 02210

(Name and address of agent for service)

Registrant's telephone number, including area code: 617-663-4324

Date of fiscal year end:  July 31 
 
Date of reporting period:  October 31, 2006 


ITEM 1. SCHEDULE OF INVESTMENTS


John Hancock
Preferred Income Fund II
Securities owned by the Fund on

October 31, 2006 (unaudited)

    Interest  Maturity  Credit  Par value   
Issuer, description    rate (%)  date  rating (A)  ($000)  Value 
Bonds 2.34%            $18,078,990 
(Cost $18,042,167)             
 
Electric Utilities 1.29%            9,951,395 
Black Hills Corp.,             
Note    6.500  05-15-13  BBB-  5,000  5,051,920 
Entergy Gulf States, Inc.,             
1st Mtg Bond    6.200  07-01-33  BBB+  5,000  4,899,475 
Gas Utilities 1.05%            8,127,595 
Southern Union Co.,             
Jr Sub Note (P)    7.200  11-01-66  BB+  8,050  8,127,595 
        Credit  Par value   
Issuer, description, maturity date        rating (A)  ($000)  Value 
Capital preferred securities  13.00%          $100,077,609 
(Cost $98,485,482)             
 
Asset Management & Custody Banks  0.64%          4,898,622 
BNY Capital, 7.97%, Ser B, 12-31-26        A-  4,700  4,898,622 
Diversified Banks 0.52%            4,020,000 
Lloyds TSB Bank Plc, 6.90%, 11-29-49 (United           
Kingdom)        A+  4,000  4,020,000 
Diversified Financial Services 1.62%            12,448,944 
JPM Capital Trust I, 7.54%, 01-15-27        A-  12,000  12,448,944 
Electric Utilities 3.06%            23,589,750 
DPL Capital Trust II, 8.125%, 09-01-31        BB-  22,150  23,589,750 
Gas Utilities 3.13%            24,111,901 
KN Capital Trust I, 8.56%, Ser B, 04-15-27      BB+  14,000  14,120,372 
KN Capital Trust III, 7.63%, 04-15-28        BB+  10,673  9,991,529 
Integrated Telecommunication Services 1.27%          9,793,467 
TCI Communications Financing Trust III,             
9.65%, 3-31-27        BBB-  9,243  9,793,467 
Multi-Utilities 1.92%            14,763,715 
Dominion Resources Capital Trust I, 7.83%,           
12-01-27        BB+  8,450  8,801,055 
Dominion Resources Capital III, 8.40%,             
01-15-31        BBB-  5,000  5,962,660 

Page 1

John Hancock
Preferred Income Fund II
Securities owned by the Fund on

October 31, 2006 (unaudited)

Regional Banks 0.45%      3,465,310 
Summit Capital Trust I, 8.40%, Ser B, 03-15-27  A  3,300  3,465,310 
Thrifts & Mortgage Finance 0.39%      2,985,900 
Sovereign Capital Trust V, 7.75%, 05-22-36  BB+  111,000  2,985,900 
    
Issuer      Shares  Value 
Common stocks  3.37%      $25,941,861 
(Cost $15,732,677)         
 
Electric Utilities 0.31%      2,370,950 
Scottish Power Plc, American Depositary       
Receipt (ADR) (United Kingdom)    47,619  2,370,950 
Gas Utilities 1.11%        8,565,081 
ONEOK, Inc.      205,743  8,565,081 
Multi-Utilities 1.95%        15,005,830 
Alliant Energy Corp.      220,000  8,437,000 
CH Energy Group, Inc.      40,000  2,080,800 
DTE Energy Co.      98,790  4,488,030 
    Credit     
Issuer, description    rating (A)  Shares  Value 
Preferred stocks  77.68%      $598,560,515 
(Cost $600,945,174)         
 
Agricultural Products  1.71%      13,160,000 
Ocean Spray Cranberries, Inc., 6.25%,       
Ser A (S)    BB+  160,000  13,160,000 
Asset Management & Custody Banks 0.13%      966,400 
BNY Capital V, 5.95%, Ser F  A-  40,000  966,400 
Automobile Manufacturers 2.02%      15,553,377 
General Motors Corp., 7.25%, Ser 04-15-41  B  87,900  1,681,527 
General Motors Corp., 7.25%, Ser 07-15-41  B-  210,500  4,022,655 
General Motors Corp., 7.25%, Ser 02-15-52  B  447,300  8,453,970 
General Motors Corp., 7.375%, Ser 10-01-51  B  73,125  1,395,225 
Broadcasting & Cable TV 1.57%      12,106,865 
Comcast Corp., 7.00%    BBB+  40,000  1,014,000 
Comcast Corp., 7.00%, Ser B  BBB+  435,869  11,092,865 

Page 2

John Hancock
Preferred Income Fund II
Securities owned by the Fund on

October 31, 2006 (unaudited)

Consumer Finance 1.98%      15,241,285 
HSBC Finance Corp., 6.00%  A  72,200  1,771,788 
HSBC Finance Corp., 6.36%, Depositary Shares,       
Ser B  A  143,200  3,714,608 
HSBC Finance Corp., 6.875%  AA-  349,100  8,933,469 
SLM Corp., 6.00%  A  33,500  821,420 
 
Diversified Banks 6.92%      53,345,710 
BAC Capital Trust IV, 5.875%  A  51,150  1,230,669 
Comerica Capital Trust I, 7.60%  BBB+  120,400  3,040,100 
Fleet Capital Trust VIII, 7.20%  A  310,000  7,855,400 
HSBC Holdings Plc, 6.20%, Ser A (United       
Kingdom)  A-  249,600  6,274,944 
Republic New York Corp., 6.25%, Ser HSBC  A  50,000  1,267,000 
Royal Bank of Scotland Group Plc, 5.75%,       
Ser L (United Kingdom)  A  450,500  10,825,515 
Santander Finance Preferred SA, Unipersonal,       
6.41%, Ser 1 (Spain)  A-  225,000  5,742,000 
USB Capital IV, 7.35%  A  152,800  3,832,224 
USB Capital V, 7.25%  A  252,000  6,373,080 
USB Capital VIII, 6.35%, Ser 1  A  83,000  2,052,590 
Wells Fargo Capital Trust IV, 7.00%  A+  140,800  3,570,688 
Wells Fargo Capital Trust VI, 6.95%  A-  50,000  1,281,500 
 
Diversified Financial Services 6.86%      52,859,551 
Abbey National Plc, 7.375% (United Kingdom)  A  140,800  3,622,784 
ABN AMRO Capital Funding Trust V, 5.90%  A  373,600  9,014,968 
ABN AMRO Capital Funding Trust VII, 6.08%  A  336,000  8,359,680 
Citigroup Capital VII, 7.125%  A  222,200  5,648,324 
Citigroup Capital VIII, 6.95%  A  538,500  13,575,585 
DB Capital Funding VIII, 6.375%  A  165,000  4,166,250 
JPMorgan Chase Capital IX, 7.50%, Ser I  A-  73,800  1,885,590 
JPMorgan Chase Capital X, 7.00%, Ser J  A1  259,000  6,586,370 
 
Electric Utilities 15.06%      116,050,419 
Boston Edison Co., 4.78%  A-  15,143  1,351,513 
Cleveland Electric Financing Trust I, 9.00%  BB+  210,000  5,346,600 
Entergy Mississippi, Inc., 7.25%  A-  109,000  2,796,940 
FPC Capital I, 7.10%, Ser A  BB+  586,703  14,913,990 
FPL Group Capital Trust I, 5.875%  BBB+  441,800  10,545,766 
Georgia Power Capital Trust V, 7.125%  BBB+  259,300  6,565,476 
Georgia Power Capital Trust VII, 5.875%  BBB+  116,500  2,756,390 
Great Plains Energy, Inc., 8.00%, Conv  BBB-  564,100  14,102,500 
HECO Capital Trust III, 6.50%  BBB-  120,000  3,002,400 
Interstate Power & Light Co., 8.375%, Ser B  Baa3  700,000  22,575,000 
Northern States Power Co., 8.00%  BBB-  175,800  4,486,416 
PPL Electric Utilities Corp., 6.25%,       
Depositary Shares  BBB  130,000  3,327,194 

Page 3

John Hancock
Preferred Income Fund II
Securities owned by the Fund on

October 31, 2006 (unaudited)

PPL Energy Supply, LLC, 7.00%  BBB  475,570  12,193,615 
Southern California Edison Co., 6.00%, Ser C  BBB-  20,000  2,025,626 
Southern California Edison Co., 6.125%  BBB-  10,000  1,015,313 
Southern Co. Capital Trust VI, 7.125%  BBB+  37,100  943,824 
Virginia Power Capital Trust, 7.375%  BB+  318,219  8,101,856 
 
Gas Utilities 1.65%      12,720,710 
Southern Union Co., 7.55%  BB+  229,500  5,994,540 
Southwest Gas Capital II, 7.70%  BB  258,500  6,726,170 
 
Hotels, Resorts & Cruise Lines 0.42%      3,201,250 
Hilton Hotels Corp., 8.00%  BB  125,000  3,201,250 
 
Integrated Telecommunication Services 0.50%      3,880,930 
Verizon New England, Inc., 7.00%, Ser B  A3  154,250  3,880,930 
 
Investment Banking & Brokerage 9.02%      69,492,121 
Bear Stearns Cos., Inc. (The), 6.15%,       
Depositary Shares, Ser E  BBB  248,600  12,497,122 
Goldman Sachs Group, Inc., 6.20%, Ser B  A-  140,000  3,591,000 
Lehman Brothers Holdings Capital Trust III,       
6.375%, Ser K  A-  177,000  4,425,000 
Lehman Brothers Holdings Capital Trust V,       
6.00%, Ser M  A-  50,000  1,215,500 
Lehman Brothers Holdings, Inc., 5.94%,       
Depositary Shares, Ser C  A-  145,200  7,405,200 
Merrill Lynch Preferred Capital Trust III,       
7.00%  A-  360,400  9,215,428 
Merrill Lynch Preferred Capital Trust IV,       
7.12%  A-  167,400  4,287,114 
Merrill Lynch Preferred Capital Trust V, 7.28%  A-  273,200  7,073,148 
Morgan Stanley Capital Trust II, 7.25%  A-  35,000  880,250 
Morgan Stanley Capital Trust III, 6.25%  A-  248,779  6,209,524 
Morgan Stanley Capital Trust IV, 6.25%  A-  57,000  1,414,170 
Morgan Stanley Capital Trust V, 5.75%  A1  311,500  7,261,065 
Morgan Stanley Capital Trust VI, 6.60%  A-  160,000  4,017,600 
 
Life & Health Insurance 1.27%      9,778,693 
PLC Capital Trust IV, 7.25%  BBB+  331,075  8,409,305 
Prudential Plc, 6.50% (United Kingdom)  A-  53,807  1,369,388 
 
Multi-Line Insurance 6.58%      50,665,193 
Aegon NV, 6.375% (Netherlands)  A-  355,000  9,009,900 
Aegon NV, 6.50% (Netherlands)  A-  44,100  1,127,637 
ING Groep NV, 7.05% (Netherlands)  A  774,700  19,739,356 
MetLife, Inc., 6.50%, Ser B  BBB  799,550  20,788,300 

Page 4

John Hancock
Preferred Income Fund II
Securities owned by the Fund on

October 31, 2006 (unaudited)

Multi-Utilities 8.07%      62,206,937 
Baltimore Gas & Electric Co., 6.99%, Ser 1995  Ba1  39,870  4,166,415 
BGE Capital Trust II, 6.20%  BBB-  645,000  15,821,850 
Dominion CNG Capital Trust I, 7.80%  BB+  150,000  3,763,500 
DTE Energy Trust I, 7.80%  BB+  253,000  6,368,010 
PNM Resources, Inc., 6.75%, Conv  BBB-  115,400  5,730,764 
PSEG Funding Trust II, 8.75%  BB+  680,000  17,856,800 
Public Service Electric & Gas Co., 4.18%,       
Ser B  BB+  7,900  635,950 
South Carolina Electric & Gas Co., 6.52%  Baa1  15,000  1,512,657 
TECO Capital Trust I, 8.50%  B  245,212  6,350,991 
 
Oil & Gas Exploration & Production 4.45%      34,288,062 
Apache Corp., 5.68%, Depositary Shares, Ser B  BBB  25,000  2,471,095 
Chesapeake Energy Corp., 6.25%, Conv (G)  B+  4,850  1,327,930 
Devon Energy Corp., 6.49%, Ser A  BB+  32,355  3,288,077 
Nexen, Inc., 7.35% (Canada)  BB+  1,068,800  27,200,960 
 
Real Estate Management & Development 3.37%      25,960,970 
Duke Realty Corp., 6.50%, Depositary Shares,       
Ser K  BBB  110,000  2,753,300 
Duke Realty Corp., 6.60%, Depositary Shares,       
Ser L  BBB  109,840  2,765,771 
Duke Realty Corp., 6.625%, Depositary Shares,       
Ser J  BBB  449,400  11,293,422 
Duke Realty Corp., 7.99%, Depositary Shares,       
Ser B  BBB  10,650  532,833 
Public Storage, Inc., 6.45%, Depositary       
Shares, Ser X  BBB+  30,000  741,600 
Public Storage, Inc., 7.50%, Depositary       
Shares, Ser V  BBB+  307,100  7,874,044 
 
Regional Banks 2.31%      17,814,597 
PFGI Capital Corp., 7.75%  A  686,000  17,814,597 
 
Reinsurance 0.12%      932,000 
RenaissanceRe Holdings Ltd., 6.08%, Ser C       
(Bermuda)  BBB  40,000  932,000 
 
Specialized Finance 0.65%      5,030,366 
CIT Group, Inc., 6.35%, Ser A  BBB+  60,000  1,561,200 
Repsol International Capital Ltd., 7.45%,       
Ser A (Cayman Islands)  BB+  136,313  3,469,166 
 
Wireless Telecommunication Service 3.02%      23,305,079 
Telephone & Data Systems, Inc., 6.625%  A-  155,000  3,844,000 
Telephone & Data Systems, Inc., 7.60%, Ser A  A-  605,967  15,191,593 
United States Cellular, 7.50%  A-  165,100  4,269,486 

Page 5

John Hancock
Preferred Income Fund II
Securities owned by the Fund on

October 31, 2006 (unaudited)

  Maturity  Credit  Par value   
Issuer, description  date  rating (A)  ($000)  Value 
Short-term investments 3.61%        $27,800,000 
(Cost $27,800,000)         
 
Government U.S. Agency 3.61%        27,800,000 
Federal Home Loan Bank         
Discount Note  11-01-06    27,800  27,800,000 
 
Total investments (Cost $761,005,500)  100.00%      $770,458,975 

John Hancock         
Preferred Income Fund II       
Financial futures contracts         
 
October 31, 2006 (unaudited)         
 
  Number of      Appreciation 
Open contracts  contracts  Position  Expiration  (depreciation) 
U.S. 10-year Treasury Note  720  Short  December 2006  $938,786 

Financial futures contracts

John Hancock
Preferred Income Fund II
Interest rate swap contracts
October 31, 2006 (unaudited)

    Rate type     
Notional  Payments made    Payments received  Termination  Appreciation 
amount  by Fund    by Fund  date  (depreciation) 
 
$63,500,000  2.56%  (a)  3-month LIBOR  June 2008  $2,478,156 

(a) Fixed rate

Interest rate swap contracts

John Hancock
Preferred Income Fund II

Footnotes to Schedule of Investments
October 31, 2006 (unaudited)

(A) Credit ratings are unaudited and are rated by Moody's Investors Service where Standard & Poor's ratings are not available unless indicated otherwise.

(G) Security rated internally by John Hancock Advisers, LLC.

(P) Represents rate in effect on October 31, 2006.

(S) This security is exempt from registration under Rule 144A of the Securities Act of 1933. Such security may be resold, normally to qualified institutional buyers, in transactions exempt from registration. Rule 144A securities amounted to $13,160,000 or 1.71% of the Fund's net assets as of October 31, 2006.

Parenthetical disclosure of a foreign country in the security description represents country of a foreign issuer; however, security is U.S. dollar-denominated.

The percentage shown for each investment category is the total value of that category as a percentage of the total investments of the Fund.

The cost of investments owned on October 31, 2006, including short-term investments, was $761,005,500. Gross unrealized appreciation and depreciation of investments aggregated $25,158,599 and $15,705,124, respectively, resulting in net unrealized appreciation of $9,453,475.

Footnotes to Schedule of Investments - Page 1


ITEM 2. CONTROLS AND PROCEDURES.

(a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-Q, the registrant's principal executive officer and principal accounting officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.

(b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

ITEM 3. EXHIBITS.

Separate certifications for the registrant's principal executive officer and principal accounting officer, as required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached.

SIGNATURES

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.

John Hancock Preferred Income Fund II

By: /s/ Keith F. Hartstein
-------------------------------------
Keith F. Hartstein
President and Chief Executive Officer

Date: January 2, 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/ Keith F. Hartstein
-------------------------------------
Keith F. Hartstein
President and Chief Executive Officer

Date: January 2, 2007

By: /s/ John G. Vrysen
-------------------------------------
John G. Vrysen
Chief Financial Officer

Date: January 2, 2007