UNITEDSTATES
SECURITIESANDEXCHANGECOMMISSION
Washington,D.C.20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number 811-08621

Name of Fund: BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock
Series 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: 07/31/2011

Date of reporting period: 01/31/2011

Item 1 – Report to Stockholders

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January 31, 2011

Semi-Annual Report (Unaudited)

BlackRock MuniHoldings California Quality Fund, Inc. (MUC)

BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)

BlackRock MuniYield Investment Quality Fund (MFT)

BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)

BlackRock MuniYield New Jersey Quality Fund, Inc. (MJI)

BlackRock MuniYield Pennsylvania Quality Fund (MPA)

Not FDIC Insured • No Bank Guarantee • May Lose Value

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Table of Contents

 

2 SEMI-ANNUAL REPORT JANUARY 31, 2011

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Dear Shareholder

Economic data fluctuated widely throughout 2010, but as the year drew to a close, it became clear that cyclical stimulus had beaten out structural prob-

lems as economic data releases generally became more positive and financial markets showed signs of continuing improvement. The sovereign debt crises

and emerging market inflation that troubled the global economy in 2010 remain a challenge to global growth, but overall levels of uncertainty are gradually

declining as the United States and the world economy are progressing from a stimulus-driven recovery into a consumption-driven expansion.

In the United States, the corporate sector has been an important area of strength and consumer spending has shown improvement, although weakness in

the housing and labor markets continues to burden the economy. It is important to note that we are in the midst of the first global economic recovery that

is being led by emerging economies, and the United States has only just begun its transition to a self-sustaining expansion, suggesting that economic

improvements still have a way to go.

Global equity markets experienced uneven growth and high volatility over the course of 2010, but ended the year strong. Stocks continued their advance

through most of January until the political unrest in Egypt and widespread discord across the Middle East caused a sharp, but temporary decline at the end

of the period. US stocks outpaced most international markets over the 12-month period. 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 prices downward) through year end and into the New Year. However, on a 12-month basis, yields were lower overall

and fixed income markets performed well. Conversely, the tax-exempt municipal market was dealt an additional blow as it became evident that the Build

America Bond program would expire at the end of 2010. In addition, negative headlines regarding fiscal challenges faced by state and local governments

damaged investor confidence and sparked additional volatility in the municipal market. These conditions began to moderate as the period came to a close

and the market has shown signs of improvement in supply-and-demand technicals.

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.

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

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.

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Municipal Market Overview

As of January 31, 2011

The municipal market began the period with a strong tone as rates fell (and prices rose) along with those of US Treasuries. However, the cliché of the
“perfect storm” of negative events all conspired in the final months of 2010, leading to the worst quarterly performance for the municipal market since
the 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 advertising 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 the new year against a backdrop of low new-issue supply,
but the mutual fund outflows continued in January, 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, AAA-rated municipals rose nearly 82 basis points (“bps”) for maturities 25 years and longer from July 31, 2010, to January 31,
2011. The spread between two-year and 30-year maturities widened from 360 bps to 406 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 heading
into 2011 as the typical, and this year particularly atypical, weakness passes.

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Fund Summary as of January 31, 2011 BlackRock MuniHoldings California Quality Fund, Inc.

Fund Overview

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

BlackRock MuniHoldings California Quality Fund, Inc.’s (MUC) (the “Fund”) investment objective is to provide shareholders with current income exempt
from federal and California income taxes. The Fund seeks to achieve its investment objective by investing primarily in municipal obligations exempt from fed-
eral income taxes (except that the interest may be subject to the federal alternative minimum tax) and California income taxes. Under normal market condi-
tions, the Fund invests at least 80% of its assets in investment grade municipal obligations with remaining maturities of one year or more at the time of
investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

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

Performance

Effective November 9, 2010, the Fund’s investment policy was changed by the removal of the insurance investment policy that required at least 80% of
Fund assets to be invested in insured municipal securities. Accordingly, the Fund was moved from the Lipper Single-State Insured Municipal Debt Funds cat-
egory into the Lipper California Municipal Debt Funds category. For the six months ended January 31, 2011, the Fund returned (6.51)% based on market
price and (7.59)% based on net asset value (“NAV”). For the same period, the closed-end Lipper California Municipal Debt Funds category posted an aver-
age return of (9.24)% based on market price and (8.09)% based on NAV, while the closed-end Lipper Single-State Insured Municipal Debt Funds category
posted an average return of (9.05)% based on market price and (6.44)% based on NAV. All returns reflect reinvestment of dividends. The Fund's discount
to NAV, which narrowed during the period, accounts for the difference between performance based on price and performance based on NAV. The following
discussion relates to performance based on NAV. The Fund maintained a low average cash reserve level, which benefited total return by boosting income
accrual. Increased exposure to tender option bonds to take advantage of the historically steep municipal yield curve also benefited the income accrual. As
a result, the Fund was able to increase dividend payments twice over the period. In addition, the Fund’s holdings in corporate-backed municipals aided per-
formance as non-traditional investors identified the sector’s attractive investment opportunities and subsequently drove up demand. Conversely, a generally
negative municipal market environment hindered Fund performance. Some widening of credit spreads, especially among California school districts and
healthcare credits, detracted from Fund performance, as did a relatively long duration posture given the rising interest rate environment of 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.

Fund Information

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 monthly distribution per share, declared on March 1, 2011, was increased to $0.0765. The Yield on Closing Market Price, Current Monthly Distribution per Common Share and
Current Annualized Distribution per Common Share do not reflect the new distribution rate. The new distribution rate is not constant and is subject to further change in the future.
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
Fund, including any assets attributable to Preferred Shares and TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see
The Benefits and Risks of Leveraging on page 11.

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

 

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

 

 

SEMI-ANNUAL REPORT JANUARY 31, 2011 5

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Fund Summary as of January 31, 2011 BlackRock MuniHoldings New Jersey Quality Fund, Inc.

Fund Overview

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

BlackRock MuniHoldings New Jersey Quality Fund, Inc.’s (MUJ) (the “Fund”) investment objective is to provide shareholders with current income exempt
from federal income tax and New Jersey personal income taxes. The Fund seeks to achieve its investment objective by investing primarily in long-term,
investment grade municipal obligations exempt from federal income taxes (except that the interest may be subject to the federal alternative minimum tax)
and New Jersey personal income taxes. Under normal market conditions, the Fund invests at least 80% of its assets in municipal obligations with remaining
maturities of one year or more at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

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

Performance

Effective November 9, 2010, the Fund’s investment policy was changed by the removal of the insurance investment policy that required at least 80% of Fund
assets to be invested in insured municipal securities. Accordingly, the Fund was moved from the Lipper Single-State Insured Municipal Debt Funds category
into the Lipper New Jersey Municipal Debt Funds category. For the six months ended January 31, 2011, the Fund returned (9.91)% based on market price
and (6.19)% based on NAV. For the same period, the closed-end Lipper New Jersey Municipal Debt Funds category posted an average return of (9.78)%
based on market price and (6.43)% based on NAV, while the closed-end Lipper Single-State Insured Municipal Debt Funds category posted an average
return of (9.05)% based on market price and (6.44)% based on NAV. All returns reflect reinvestment of dividends. The Fund's discount 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 per-
formance based on NAV. The Fund’s exposure to the housing, corporate and pre-refunded sectors contributed to performance as these sectors outperformed
the general municipal market. Additionally, the Fund’s exposure to shorter-duration bonds and premium coupon bonds (6% or higher) benefited performance
in the rising interest rate environment of the period. Conversely, the Fund’s modestly long duration stance detracted from performance, again due to the rising
rate environment. In addition, the Fund’s exposure to longer maturity bonds detracted as the long end of the yield curve steepened during 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.

Fund Information

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 Fund, including any assets attributable to Preferred Shares and
TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 11.

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

 

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

 

⁵ Using the higher of S&P’s and Moody’s ratings.
⁶ The investment advisor has deemed certain of these non-rated securities to be of
investment grade quality. As of July 31, 2010, the market value of these securities
was $7,659,796 representing 2% of the Fund’s long-term investments.

6 SEMI-ANNUAL REPORT JANUARY 31, 2011

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Fund Summary as of January 31, 2011 BlackRock MuniYield Investment Quality Fund

Fund Overview

Effective November 9, 2010, BlackRock MuniYield Insured Investment Fund changed its name to BlackRock MuniYield Investment Quality Fund.

BlackRock MuniYield Investment Quality Fund’s (MFT) (the “Fund”) investment objective is to provide shareholders with as high a level of current income
exempt from federal income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to achieve its invest-
ment objective by investing at least 80% of its assets in municipal obligations exempt from federal income taxes (except that the interest may be subject to
the federal alternative minimum tax). Under normal market conditions, the Fund invests primarily in long-term municipal obligations that are investment
grade quality at the time of investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

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

Performance

Effective November 9, 2010, the Fund’s investment policy was changed by the removal of the insurance investment policy that required at least 80% of
Fund assets to be invested in insured municipal securities. Accordingly, the Fund was moved from the Lipper Insured Municipal Debt Funds (Leveraged)
category into the Lipper General Municipal Debt Funds (Leveraged) category. For the six months ended January 31, 2011, the Fund returned (12.86)%
based on market price and (7.97)% based on NAV. For the same period, the closed-end Lipper General Municipal Debt Funds (Leveraged) category posted
an average return of (8.46)% based on market price and (6.45)% based on NAV, while the closed-end Lipper Insured Municipal Debt Funds (Leveraged)
category posted an average return of (11.13)% based on market price and (6.92)% based on NAV. All returns reflect reinvestment of dividends. The Fund
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 Fund’s exposure to longer-duration and longer-maturity bonds detracted from
performance as the long end of the yield curve steepened during the period. Conversely, the Fund’s exposure to the housing sector contributed to perform-
ance as the sector was one of the municipal market’s better performers. Additionally, the Fund’s exposure to shorter-duration bonds and premium coupon
bonds (6% or higher) benefited performance in the rising interest rate environment of 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.

Fund Information

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 Fund, including any assets attributable to Preferred Shares and
TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 11.

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

 

The following charts show the sector and credit quality allocations of the Fund’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 July 31, 2010, the market value of these securities
was $4,251,053 representing 2% of the Fund’s long-term investments.

SEMI-ANNUAL REPORT JANUARY 31, 2011 7

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Fund Summary as of January 31, 2011 BlackRock MuniYield Michigan Quality Fund, Inc.

Fund Overview

Effective November 9, 2010, BlackRock MuniYield Michigan Insured Fund, Inc. changed its name to BlackRock MuniYield Michigan Quality Fund, Inc.

BlackRock MuniYield Michigan Quality Fund, Inc.’s (MIY) (the “Fund”) investment objective is to provide shareholders with as high a level of current income
exempt from federal and Michigan income taxes as is consistent with its investment policies and prudent investment management. The Fund seeks to
achieve its investment objective by investing at least 80% of its assets in municipal obligations exempt from federal income taxes (except that the interest
may be subject to the federal alternative minimum tax) and Michigan income taxes. Under normal market conditions, the Fund invests primarily in long-term
municipal obligations that are investment grade quality at the time of investment. The Fund may invest directly in such securities or synthetically through the
use of derivatives.

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

Performance

Effective November 9, 2010, the Fund’s investment policy was changed by the removal of the insurance investment policy that required at least 80% of
Fund assets to be invested in insured municipal securities. Accordingly, the Fund was moved from the Lipper Single-State Insured Municipal Debt Funds
category into the Lipper Michigan Municipal Debt Funds category. For the six months ended January 31, 2011, the Fund returned (8.36)% based on market
price and (5.31)% based on NAV. For the same period, the closed-end Lipper Michigan Municipal Debt Funds category posted an average return of (7.46)%
based on market price and (5.90)% based on NAV, while the closed-end Lipper Single-State Insured Municipal Debt Funds category posted an average
return of (9.05)% based on market price and (6.44)% based on NAV. All returns reflect reinvestment of dividends. The Fund's discount 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. The Fund maintained a low average cash reserve level, which benefited total return by boosting income accrual.
Increased exposure to tender option bonds to take advantage of the historically steep municipal yield curve also benefited the income accrual. In addition,
the Fund’s holdings in corporate-backed municipals aided performance as non-traditional investors identified the sector’s attractive investment opportunities
and subsequently drove up demand. Conversely, a generally negative municipal market environment hindered Fund performance. Some widening of credit
spreads, especially among health care credits, also detracted from Fund 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.

Fund Information

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 Fund, including any assets attributable to Preferred Shares and
TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 11.

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

 

The following charts show the sector and credit quality allocations of the Fund’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 January 31, 2011 and July 31, 2010, the market
value of these securities was $3,126,598 representing 1% and $2,921,098, repre-
senting 1%, respectively, of the Fund's long-term investments.

8 SEMI-ANNUAL REPORT JANUARY 31, 2011

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Fund Summary as of January 31, 2011 BlackRock MuniYield New Jersey Quality Fund, Inc.

Fund Overview

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

BlackRock MuniYield New Jersey Quality Fund, Inc.’s (MJI) (the “Fund”) investment objective is to provide shareholders with as high a level of current
income exempt from federal income taxes and New Jersey personal income tax as is consistent with its investment policies and prudent investment
management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal obligations exempt from federal
income taxes (except that the interest may be subject to the federal alternative minimum tax) and New Jersey personal income taxes. Under normal
market conditions, the Fund invests primarily in long-term municipal obligations that are investment grade quality at the time of investment. The Fund
may invest directly in such securities or synthetically through the use of derivatives.

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

Performance

Effective November 9, 2010, the Fund’s investment policy was changed by the removal of the insurance investment policy that required at least 80% of
Fund assets to be invested in insured municipal securities. Accordingly, the Fund was moved from the Lipper Single-State Insured Municipal Debt
Funds category into the Lipper New Jersey Municipal Debt Funds category. For the six months ended January 31, 2011, the Fund returned (10.76)%
based on market price and (6.15)% based on NAV. For the same period, the closed-end Lipper New Jersey Municipal Debt Funds category posted
an average return of (9.78)% based on market price and (6.43)% based on NAV, while the closed-end Lipper Single-State Insured Municipal Debt
Funds category posted an average return of (9.05)% based on market price and (6.44)% based on NAV. All returns reflect reinvestment of dividends.
The Fund's discount 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. The Fund’s exposure to the housing, corporate and pre-refunded sectors
contributed to performance as these sectors outperformed the general municipal market. Additionally, the Fund’s exposure to shorter-duration bonds
and premium coupon bonds (6% or higher) benefited performance in the rising interest rate environment of the period. Conversely, the Fund’s modestly
long duration stance detracted from performance, again due to the rising rate environment. In addition, the Fund’s exposure to longer maturity bonds
detracted as the long end of the yield curve steepened during 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.

Fund Information

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 Fund, including any assets attributable to Preferred Shares and
TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 11.

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

 

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

 

⁵ Using the higher of S&P’s and Moody’s ratings.
⁶ The investment advisor has deemed certain of these non-rated securities to be of
investment grade quality. As of July 31, 2010, the market value of these securities
was $8,904,633, representing 5% of the Fund’s long-term investments.

SEMI-ANNUAL REPORT JANUARY 31, 2011 9

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Fund Summary as of January 31, 2011 BlackRock MuniYield Pennsylvania Quality Fund

Fund Overview

Effective November 9, 2010, BlackRock MuniYield Pennsylvania Insured Fund changed its name to BlackRock MuniYield Pennsylvania Quality
Fund. BlackRock MuniYield Pennsylvania Quality Fund’s (MPA) (the “Fund”) investment objective is to provide shareholders with as high a
level of current income exempt from federal and Pennsylvania income taxes as is consistent with its investment policies and prudent investment
management. The Fund seeks to achieve its investment objective by investing at least 80% of its assets in municipal obligations exempt from
federal income taxes (except that the interest may be subject to the federal alternative minimum tax) and Pennsylvania income taxes. Under
normal market conditions, the Fund invests primarily in long-term municipal obligations that are investment grade quality at the time of
investment. The Fund may invest directly in such securities or synthetically through the use of derivatives.

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

Performance

Effective November 9, 2010, the Fund’s investment policy was changed by the removal of the insurance investment policy that required at least
80% of Fund assets to be invested in insured municipal securities. Accordingly, the Fund was moved from the Lipper Single-State Insured
Municipal Debt Funds category into the Lipper Pennsylvania Municipal Debt Funds category. For the six months ended January 31, 2011,
the Fund returned (10.43)% based on market price and (6.76)% based on NAV. For the same period, the closed-end Lipper Pennsylvania
Municipal Debt Funds category posted an average return of (9.19)% based on market price and (6.17)% based on NAV, while the closed-end
Lipper Single-State Insured Municipal Debt Funds category posted an average return of (9.05)% based on market price and (6.44)% based on
NAV. All returns reflect reinvestment of dividends. The Fund's discount to NAV, which widened during the period, accounts for the difference
between performance based on price and performance based on NAV. A generally negative municipal market environment hindered Fund
performance. Conversely, the Fund maintained a low average cash reserve level, which benefited total return by boosting income accrual.
Increased exposure to tender option bonds to take advantage of the historically steep municipal yield curve also benefited the income
accrual. In addition, the Fund’s holdings in corporate-backed municipals aided performance as non-traditional investors identified the
sector’s attractive investment opportunities and subsequently drove up demand.

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

Fund Information

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 Fund, including any assets attributable to Preferred Shares and
TOBs, minus the sum of accrued liabilities. For a discussion of leveraging techniques utilized by the Fund, please see The Benefits and Risks of Leveraging on page 11.

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

 

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

 

 

10 SEMI-ANNUAL REPORT JANUARY 31, 2011

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The Benefits and Risks of Leveraging

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

To leverage, the Funds 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 Fund on its longer-term
portfolio investments. To the extent that the total assets of each Fund
(including the assets obtained from leverage) are invested in higher-yield-
ing portfolio investments, each Fund’s holders of common shares
(“Common Shareholders”) will benefit from the incremental net income.

To illustrate these concepts, assume a Fund’s Common Shares capital-
ization 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 Fund 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 Fund with assets received from the
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
Fund’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 Fund pays divi-
dends on the higher short-term interest rates whereas the Fund’s total port-
folio earns income based on lower long-term interest rates.

Furthermore, the value of the Fund’s portfolio investments generally varies
inversely with the direction of long-term interest rates, although other
factors can influence the value of portfolio investments. In contrast, the
redemption value of the Fund’s Preferred Shares does not fluctuate in
relation to interest rates. As a result, changes in interest rates can influence
the Fund’s NAV positively or negatively in addition to the impact on Fund
performance from leverage from Preferred Shares discussed above.

The Funds 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 Funds with economic benefits in periods of
declining short-term interest rates, but expose the Funds to risks during
periods of rising short-term interest rates similar to those associated with
Preferred Shares issued by the Funds, as described above. Additionally,
fluctuations in the market value of municipal bonds deposited into the TOB
may adversely affect each Fund’s NAV per share.

The use of leverage may enhance opportunities for increased income to the
Funds 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 Funds’ 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, the Funds’ 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 Funds’ 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 Fund
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 Fund to incur losses. The use of leverage may limit each
Fund’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 Funds. Each
Fund 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 Funds 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 Fund
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 January 31, 2011, the Funds had economic
leverage from Preferred Shares and/or TOBs as a percentage of their total
managed assets as follows:

 

Derivative Financial Instruments

The Funds may invest in various derivative instruments, including finan-
cial futures contracts, as specified in Note 2 of the Notes to Financial
Statements, which may constitute forms of economic leverage. Such instru-
ments 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. Each Fund’s ability to successfully use a derivative
instrument depends on the investment advisor’s ability to accurately predict
pertinent market movements, which cannot be assured. The use of deriva-
tive instruments may result in losses greater than if they had not been
used, may require a Fund to sell or purchase portfolio securities at inoppor-
tune times or for distressed values, may limit the amount of appreciation a
Fund can realize on an investment, may result in lower dividends paid to
shareholders or may cause a Fund to hold an investment that it might oth-
erwise sell. The Funds’ investments in these instruments are discussed in
detail in the Notes to Financial Statements.

SEMI-ANNUAL REPORT JANUARY 31, 2011 11

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Schedule of Investments January 31, 2011 (Unaudited) BlackRock MuniHoldings California Quality Fund, Inc. (MUC)
(Percentages shown are based on Net Assets)

 

 

Portfolio Abbreviations

 

12 SEMI-ANNUAL REPORT JANUARY 31, 2011

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

 

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT JANUARY 31, 2011 13

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

 

* The cost and unrealized appreciation (depreciation) of investments as of January 31,
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) When-issued security. Unsettled when-issued transactions were as follows:

(c) Securities represent bonds transferred to a TOB in exchange for which the Fund
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.
(d) Investments in companies considered to be an affiliate of the Fund during the
period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
as amended, were as follows:

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

See Notes to Financial Statements.

14 SEMI-ANNUAL REPORT JANUARY 31, 2011

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Schedule of Investments (concluded) BlackRock MuniHoldings California Quality Fund, Inc. (MUC)

• For Fund compliance purposes, the Fund’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 rating group indexes, and/or as defined by Fund 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, which are 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
Fund’s own assumptions used in determining the fair value of investments)
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 Fund’s policy regarding valuation of investments and other significant
accounting policies, please refer to Note 1 of the Notes to Financial Statements.
The following table summarizes the inputs used as of January 31, 2011 in deter-
mining the fair valuation of the Fund’s investments:

¹ See above Schedule of Investments for values in each sector.

See Notes to Financial Statements.

SEMI-ANNUAL REPORT JANUARY 31, 2011 15

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Schedule of Investments January 31, 2011 (Unaudited) BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

16 SEMI-ANNUAL REPORT JANUARY 31, 2011

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

 

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT JANUARY 31, 2011 17

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

 

* The cost and unrealized appreciation (depreciation) of investments as of
January 31, 2011, as computed for federal income tax purposes, were as follows:

 

See Notes to Financial Statements.

18 SEMI-ANNUAL REPORT JANUARY 31, 2011

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Schedule of Investments (concluded) BlackRock MuniHoldings New Jersey Quality Fund, Inc. (MUJ)

(a) Variable rate security. Rate shown is as of report date.
(b) 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.
(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) Security is collateralized by Municipal or US Treasury obligations.
(e) Represents a zero-coupon bond. Rate shown reflects the current yield as of
report date.
(f) Securities represent bonds transferred to a TOB in exchange for which the Fund
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.
(g) Investments in companies considered to be an affiliate of the Fund during the
period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940,
as amended, were as follows:

 

(h) Represents the current yield as of report date.
• For Fund compliance purposes, the Fund’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 rating group indexes, and/or as defined by Fund 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, which are 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
Fund’s own assumptions used in determining the fair value of investments)
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 Fund’s policy regarding valuation of investments and other significant
accounting policies, please refer to Note 1 of the Notes to Financial Statements.
The following table summarizes the inputs used as of January 31, 2011 in deter-
mining the fair valuation of the Fund’s investments:

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT JANUARY 31, 2011 19

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Schedule of Investments January 31, 2011 (Unaudited) BlackRock MuniYield Investment Quality Fund (MFT)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

20 SEMI-ANNUAL REPORT JANUARY 31, 2011

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Schedule of Investments (continued) BlackRock MuniYield Investment Quality Fund (MFT)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT JANUARY 31, 2011 21

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Schedule of Investments (continued) BlackRock MuniYield Investment Quality Fund (MFT)
(Percentages shown are based on Net Assets)

 

* The cost and unrealized appreciation (depreciation) of investments as of January 31,
2011, as computed for federal income tax purposes, were as follows:

 

(a) When-issued security. Unsettled when-issued transactions were as follows:

(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 TOB in exchange for which the Fund
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.
(d) Investments in companies considered to be an affiliate of the Fund during the
period, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, as
amended, were as follows:

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

See Notes to Financial Statements.

22 SEMI-ANNUAL REPORT JANUARY 31, 2011

---

Schedule of Investments (concluded) BlackRock MuniYield Investment Quality Fund (MFT)

• Fair Value Measurements — Various inputs are used in determining the fair value of
investments, which are as follows:
• Level 1 — price quotations in active markets/exchanges for identical 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
Fund’s own assumptions used in determining the fair value of investments)
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 Fund’s policy regarding valuation of investments and other significant
accounting policies, please refer to Note 1 of the Notes to Financial Statements.
The following table summarizes the inputs used as of January 31, 2011 in deter-
mining the fair valuation of the Fund’s investments:

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT JANUARY 31, 2011 23

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Schedule of Investments January 31, 2011 (Unaudited) BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

24 SEMI-ANNUAL REPORT JANUARY 31, 2011

---

Schedule of Investments (continued) BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT JANUARY 31, 2011 25

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Schedule of Investments (concluded) BlackRock MuniYield Michigan Quality Fund, Inc. (MIY)
(Percentages shown are based on Net Assets)

 

* The cost and unrealized appreciation (depreciation) of investments as of January 31,
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 is collateralized by Municipal or US Treasury obligations.
(c) Represents a zero-coupon bond. Rate shown reflects the current yield as of
report date.
(d) Securities represent bonds transferred to a TOB in exchange for which the Fund
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 Fund 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 Fund compliance purposes, the Fund’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 rating group indexes, and/or as defined by Fund 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, which are 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
Fund’s own assumptions used in determining the fair value of investments)
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 Fund’s policy regarding valuation of investments and other significant
accounting policies, please refer to Note 1 of the Notes to Financial Statements.
The following table summarizes the inputs used as of January 31, 2011 in deter-
mining the fair valuation of the Fund’s investments:

 

See Notes to Financial Statements.

26 SEMI-ANNUAL REPORT JANUARY 31, 2011

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Schedule of Investments January 31, 2011 (Unaudited) BlackRock MuniYield New Jersey Quality Fund, Inc. (MJI)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT JANUARY 31, 2011 27

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Schedule of Investments (continued) BlackRock MuniYield New Jersey Quality Fund, Inc. (MJI)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

28 SEMI-ANNUAL REPORT JANUARY 31, 2011

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Schedule of Investments (concluded) BlackRock MuniYield New Jersey Quality Fund, Inc. (MJI)
(Percentages shown are based on Net Assets)

* The cost and unrealized appreciation (depreciation) of investments as of January 31,
2011, as computed for federal income tax purposes, were as follows:

(a) 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.
(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 Fund
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 Fund 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 Fund compliance purposes, the Fund’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 rating group indexes, and/or as defined by Fund 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, which are 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
Fund’s own assumptions used in determining the fair value of investments)
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 Fund’s policy regarding valuation of investments and other significant
accounting policies, please refer to Note 1 of the Notes to Financial Statements.
The following table summarizes the inputs used as of January 31, 2011 in deter-
mining the fair valuation of the Fund’s investments:

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT JANUARY 31, 2011 29

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Schedule of Investments January 31, 2011 (Unaudited) BlackRock MuniYield Pennsylvania Quality Fund (MPA)
(Percentages shown are based on Net Assets)

 

 

See Notes to Financial Statements.

30 SEMI-ANNUAL REPORT JANUARY 31, 2011

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Schedule of Investments (continued) BlackRock MuniYield Pennsylvania Quality Fund (MPA)
(Percentages shown are based on Net Assets)

 

* The cost and unrealized appreciation (depreciation) of investments as of January 31,
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) Security is collateralized by Municipal or US Treasury obligations.
(e) Securities represent bonds transferred to a TOB in exchange for which the Fund
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.

SEMI-ANNUAL REPORT JANUARY 31, 2011 31

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Schedule of Investments (concluded) BlackRock MuniYield Pennsylvania Quality Fund (MPA)

(f) Investments in companies considered to be an affiliate of the Fund 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 Fund compliance purposes, the Fund’s sector classifications refer to any one
or more of the sector sub-classifications used by one or more widely recognized
market indexes or rating group indexes, and/or as defined by Fund 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, which are 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
Fund’s own assumptions used in determining the fair value of investments)
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 Fund’s policy regarding valuation of investments and other significant
accounting policies, please refer to Note 1 of the Notes to Financial Statements.
The following table summarizes the inputs used as of January 31, 2011 in deter-
mining the fair valuation of the Fund’s investments:

 

 

---

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT JANUARY 31, 2011 33

---

 

See Notes to Financial Statements.

34 SEMI-ANNUAL REPORT JANUARY 31, 2011

---

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT JANUARY 31, 2011 35

---

 

See Notes to Financial Statements.

36 SEMI-ANNUAL REPORT JANUARY 31, 2011

---

 

See Notes to Financial Statements.

SEMI-ANNUAL REPORT JANUARY 31, 2011 37

---

 

See Notes to Financial Statements.

38 SEMI-ANNUAL REPORT JANUARY 31, 2011

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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 Certain non-recurring expenses have been included in the ratio but not annualized. If these expenses were annualized, the ratios of total expenses, total expenses after fees waived
and before fees paid indirectly, total expenses after fees waived and paid indirectly, net investment income and net investment income to Common Shareholders would have been
1.43%, 1.28%, 1.15%, 6.50% and 6.27%, respectively.
⁸ 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 JANUARY 31, 2011 39

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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.
⁸ Amounts have been recalculated to conform with current period presentation.

See Notes to Financial Statements.

40 SEMI-ANNUAL REPORT JANUARY 31, 2011

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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 JANUARY 31, 2011 41

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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.
⁷ Asset coverage per Preferred Share at $25,000 liquidation preference for the periods ended 2011, 2010, 2009, 2008, 2007 and 2006 were $68,039, $71,945, $68,838,
$69,563, $66,461 and $67,638, respectively.

See Notes to Financial Statements.

42 SEMI-ANNUAL REPORT JANUARY 31, 2011

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¹ Based on average Common Shares outstanding.
² Amount is less than $(0.01) per share.
³ Amount is less than $0.01 per share.
⁴ 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.
⁵ Aggregate total investment return.
⁶ Do not reflect the effect of dividends to Preferred Shareholders.
⁷ Annualized.
⁸ 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 JANUARY 31, 2011 43

---

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 effects of 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.

44 SEMI-ANNUAL REPORT JANUARY 31, 2011

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Notes to Financial Statements (Unaudited)

1. Organization and Significant Accounting Policies:

BlackRock MuniHoldings California Quality Fund, Inc. (“MUC”), formerly
MuniHoldings California Insured Fund, Inc., BlackRock MuniHoldings
New Jersey Quality Fund, Inc. (“MUJ”), formerly BlackRock MuniHoldings
New Jersey Fund, Inc., BlackRock MuniYield Investment Quality Fund, Inc.
(“MFT”), formerly BlackRock MuniYield Insured Investment Fund, BlackRock
MuniYield Michigan Quality Fund, Inc. (“MIY”), formerly BlackRock MuniYield
Michigan Insured Fund, Inc., BlackRock MuniYield New Jersey Quality
Fund, Inc. (“MJI”), formerly MuniYield New Jersey Insured Fund, Inc. and
BlackRock MuniYield Pennsylvania Quality Fund, Inc. (“MPA”), formerly
MuniYield Pennsylvania Insured Fund (collectively, the “Funds” or individ-
ually, as a “Fund”), are registered under the Investment Company Act of
1940, as amended (the “1940 Act”), as non-diversified, closed-end
management investment companies. MUC, MUJ, MIY and MJI are organized
as Maryland corporations. MFT and MPA are organized as Massachusetts
business trusts. The Funds' 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. The
Funds determine, and make available for publication the net asset value
of their Common Shares on a daily basis.

The following is a summary of significant accounting policies followed by
the Funds:

Valuation: The Funds fair value their financial instruments at market value
using independent dealers or pricing services under policies approved
by each Fund’s Board of Directors/Trustees (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. Short-term
securities with remaining maturities of 60 days or less may be valued at
amortized cost, which approximates fair value. Investments in open-end
investment companies are valued at net asset value each business day.

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 Fund might reasonably expect to receive from the cur-
rent sale of that asset in an arm’s-length transaction. Fair value determina-
tions 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 Funds may invest in zero-coupon bonds, which
are normally issued at a significant discount from face value and do not
provide for periodic interest payments. Zero-coupon bonds may experience
greater volatility in market value than similar maturity debt obligations
which provide for regular interest payments.

Forward Commitments and When-Issued Delayed Delivery Securities:
The Funds 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 Funds 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 Funds may be required to pay more at settlement than the security is
worth. In addition, the Funds are not entitled to any of the interest earned
prior to settlement. When purchasing a security on a delayed delivery basis,
the Funds assume the rights and risks of ownership of the security, includ-
ing the risk of price and yield fluctuations. In the event of default by the
counterparty, the Funds' maximum amount of loss is the unrealized
appreciation of unsettled when-issued transactions, which is shown on
the Schedules of Investments, if any.

Municipal Bonds Transferred to Tender Option Bond Trusts: The Funds
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 Fund 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 Fund include the right
of a Fund (1) to cause the holders 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 Fund. The TOB may also be terminated without the consent of a
Fund upon the occurrence of certain events as defined in the TOB agree-
ments. Such termination events may include the bankruptcy or default of
the municipal bond, a substantial downgrade in credit quality of the munic-
ipal 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 January
31, 2011, no TOBs that the Funds participated in were
terminated without the consent of the Funds.

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

SEMI-ANNUAL REPORT JANUARY 31, 2011 45

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Notes to Financial Statements (continued)

the 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 Funds
on an accrual basis. Interest expense incurred on the secured borrowing
and other expenses related to remarketing, administration and trustee serv-
ices 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 certifi-
cates to the TOB for redemption at par at each reset date. At January 31,
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 January 31, 2011, the Funds' average trust
certificates outstanding and the daily weighted average interest rates,
including fees, were as follows:

 

Should short-term interest rates rise, the Funds' investments in TOBs may
adversely affect the Funds' 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 Funds' 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 Funds either deliver collateral or segregate assets
in connection with certain investments (e.g., financial futures contracts),
the Funds 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 segre-
gated. 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 Fund'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.

The Funds file US federal and various state and local tax returns. No
income tax returns are currently under examination. The statute of limita-
tions on the Funds' US federal tax returns remains open for the year ended
July 31, 2010, the period ended July 31, 2009 and for each of the two
years ended June 30, 2009 for MUC, for each of the four years ended July
31, 2010 for MUJ and for each of the two years ended July 31, 2010 and
period ended July 31, 2008 and for the year ended October 31, 2007 for
MFT, MIY, MJI and MPA. The statutes of limitations on the Funds' 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
Fund's Board, non-interested Directors (“Independent Directors”) may defer
a portion of their annual complex-wide compensation. Deferred amounts
earn an approximate return as though equivalent dollar amounts had been
invested in common shares of certain other BlackRock Closed-End Funds
selected by the Independent Directors. This has approximately the same
economic effect for the Independent Directors as if the Independent
Directors had invested the deferred amounts directly in 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
Fund. Each Fund may, however, elect to invest in common shares of certain
other BlackRock Closed-End Funds selected by the Independent Directors
in order to match its deferred compensation obligations. Investments to
cover each Fund's deferred compensation liability, if any, are included in
other assets in the Statements of Assets and Liabilities. Dividends and dis-
tributions from the BlackRock Closed-End Fund investments under the plan
are included in income — affiliated in the Statements of Operations.

46 SEMI-ANNUAL REPORT JANUARY 31, 2011

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Notes to Financial Statements (continued)

Other: Expenses directly related to a Fund are charged to the Fund. Other
operating expenses shared by several funds are pro rated among those
funds on the basis of relative net assets or other appropriate methods.
The Funds have an arrangement with the custodian whereby fees may be
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 Funds engage in various portfolio investment strategies using derivative
contracts both to increase the returns of the Funds 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 Funds 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 Fund and counter-
party 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 Funds 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 Funds as
unrealized gains or losses. When the contract is closed, the Funds 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 transactions involves the risk of an imperfect
correlation in the movements in the price of financial futures contracts,
interest rates and the underlying assets.

 

For the six months ended January 31, 2011, the average quarterly balance
of outstanding derivative financial instruments was as follows:

 

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 struc-
ture, PNC is an affiliate of the Funds for 1940 Act purposes, but BAC and
Barclays are not.

Each Fund entered into an Investment Advisory Agreement with BlackRock
Advisors, LLC (the “Manager”), the Funds' investment advisor, an indirect,
wholly owned subsidiary of BlackRock, to provide investment advisory and
administration services. The Manager is responsible for the management
of each Fund's portfolio and provides the necessary personnel, facilities,
equipment and certain other services necessary to the operations of each
Fund. For such services, each Fund pays the Manager a monthly fee at the
following annual rates of each Fund's average daily net assets:

 

Average daily net assets are the average daily value of each Fund's total
assets minus the sum of its accrued liabilities.

The Manager voluntarily agreed to waive its investment advisory fees by
the amount of investment advisory fees each Fund 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 Fund's investment in
other affiliated investment companies, if any. This amount is shown as,
or included in, fees waived by advisor in the Statements of Operations.
For the six months ended January 31, 2011, the amounts waived were
as follows:

 

The Manager, for MUC and MUJ, 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

SEMI-ANNUAL REPORT JANUARY 31, 2011 47

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Notes to Financial Statements (continued)

included in fees waived by advisor in the Statements of Operations. For the
six months ended January 31, 2011 the amounts waived were as follows:

 

The Manager entered into a sub-advisory agreement with BlackRock
Investment Management, LLC ("BIM"), an affiliate of the Manager. The
Manager pays BIM for services it provides, a monthly fee that is a percent-
age of the investment advisory fees paid by each Fund to the Manager.

For the period August 1, 2010 through December 31, 2010, the Funds
reimbursed the Manager for certain accounting services, which are
included in accounting services in the Statements of Operations. The reim-
bursements were as follows:

 

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

Certain officers and/or directors of the Funds are officers and/or directors
of BlackRock or its affiliates. The Funds reimburse the Manager for com-
pensation paid to the Funds' Chief Compliance Officer.

4. Investments:

Purchases and sales of investments, excluding short-term securities, for the
six months ended January 31, 2011, were as follows:

 

5. Capital Loss Carryforward:

As of July 31, 2010, the Funds 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 Funds after July 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:

MUC, MUJ, MIY, MJI and MPA invest 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 Funds invest in securities and enter
into transactions where risks exist due to fluctuations in the market (market
risk) or failure of the issuer of a security to meet all its obligations (issuer
credit risk). The value of securities held by the Funds may decline in
response to certain events, including those directly involving the issuers
whose securities are owned by the Funds; conditions affecting the general
economy; overall market changes; local, regional or global political, social
or economic instability; and currency and interest rate and price fluctua-
tions. Similar to issuer credit risk, the Funds may be exposed to counter-
party credit risk, or the risk that an entity with which the Funds have
unsettled or open transactions may fail to or be unable to perform on its
commitments. The Funds 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
Funds to market, issuer and counterparty credit risks, consist principally of
financial instruments and receivables due from counterparties. The extent
of the Funds' exposure to market, issuer and counterparty credit risks with
respect to these financial assets is generally approximated by their value
recorded in the Funds' Statements of Assets and Liabilities, less any collat-
eral held by the Funds.

MUC and MFT invest a significant portion of their assets in securities in
the County/City/Special District/School District and Utilities sectors. MUJ
and MJI invest a significant portion of their assets in securities in the State
sector. MIY invests a significant portion of its assets in securities in the
County/City/Special District/School District sector. MPA invests a signifi-
cant portion of its assets in securities in the County/City/Special
District/School District and State sectors.

Changes in economic conditions affecting the County/City/Special
District/School District, State and Utilities sectors would have a greater
impact on the Funds and could affect the value, income and/or liquidity of
positions in such securities.

7. Capital Share Transactions:

MFT and MPA are authorized to issue an unlimited number of Common
Shares, par value $0.10 per share together with 1 million Preferred Shares
of beneficial interest, par value is $0.05 per share. Each Fund’s Board is
authorized, however, to reclassify any unissued shares without approval of
Common Shareholders.

48 SEMI-ANNUAL REPORT JANUARY 31, 2011

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Notes to Financial Statements (continued)

MUC, MUJ, MIY, and MJI are authorized to issue 200 million shares, includ-
ing Preferred Shares, par value is $0.10 per share or $0.05 per share, all
of which were initially classified as Common Shares. Each Fund’s Board is
authorized, however, to reclassify any unissued shares without approval of
Common Shareholders.

Common Shares

Shares issued and outstanding remained constant for MUC and MIY during
the six months ended January 31, 2011 and the year ended July 31,
2010, respectively.

For MUJ, shares issued and outstanding increased by 12,381 as a result
of reinvestment of dividends for the six months ended January 31, 2011
and remained constant during the year ended July 31, 2010.

For MFT, shares issued and outstanding increased by 6,451 for the six
months ended January 31, 2011 and increased by 5,456 as a result of
reinvestment of dividends during the year ended July 31, 2010.

For MJI, shares issued and outstanding increased by 24,556 for the six
months ended January 31, 2011 and increased by 15,316 as a result of
reinvestment of dividends during the year ended July 31, 2010.

For MPA, shares issued and outstanding increased by 5,736 as a result of
reinvestment of dividends for the six months ended January 31, 2011 and
remained constant during the year ended July 31, 2010.

Preferred Shares

The Preferred Shares are redeemable at the option of each Fund, 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 Fund, as set forth in each Fund's Articles
of Supplementary (the “Governing Instrument”) are not satisfied.

From time to time in the future, each Fund may effect repurchases of its
Preferred Shares at prices below their liquidation preference as agreed
upon by the Fund and seller. Each Fund also may redeem its Preferred
Shares from time to time as provided in the applicable Governing
Instrument. Each Fund 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 hold-
ers of Preferred Shares, voting as a separate class, are also entitled to
elect two Directors for each Fund. 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 Fund'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 Funds had the following series of Preferred Shares outstanding,
effective yields and reset frequency as of January 31, 2011:

¹ The maximum applicable rate on this series of Preferred Shares is the higher of
110% plus or times (i) the Telerate/BAA LIBOR or (ii) 90% of Kenny S&P 30-day
High Grade Index rate divided by 1.00 minus the marginal tax rate.
² The maximum applicable rate on this series of Preferred Shares is the higher of
110% of the AA commercial paper rate or 110% of 90% of the Kenny S&P 30-day
High Grade Index rate divided by 1.00 minus the marginal tax rate.

Dividends on seven-day Preferred Shares are cumulative at a rate, which is
reset every seven days, based on the results of an auction. If the Preferred
Shares fail to clear the auction on an auction date, each Fund 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 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 dividend rates on
the Preferred Shares for each Fund for the six months ended January 31,
2011 were as follows:

SEMI-ANNUAL REPORT JANUARY 31, 2011 49

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Notes to Financial Statements (concluded)

 

Since February 13, 2008, the Preferred Shares of the Funds 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 1.56%
for the six months ended January 31, 2011. A failed auction is not an
event of default for the Funds but it has a negative impact on the liquidity
of Preferred Shares. A failed auction occurs when there are more sellers of
a Fund's auction rate Preferred Shares than buyers. A successful auction
for the Funds' 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 Funds may not declare dividends or make other distributions on
Common Shares or purchase any such shares if, at the time of the
declaration, distribution or purchase, asset coverage with respect to
the outstanding Preferred Shares is less than 200%.

The Funds 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
principal 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 January 31, 2011 for all Funds.

During the period, MIY and MPA entered into a Fee Agreement (the
“Agreement”) with a financial institution in relation to the potential refinanc-
ing of Preferred Shares. Pursuant to the terms of the Agreement, effective
February 1, 2011 MIY and MPA will pay a liquidity fee, through the earlier
of the date of the potential refinancing or July 1, 2011, at an annual rate
of 0.50% of the potential refinancing amounts.

8. Restatement Information:

During the year ended October 31, 2006 MIY determined that the criteria
for sale accounting under US GAAP has not been met for certain transfers
of municipal bonds related to investments in TOB Residuals, and that these
transfers should have been accounted for as secured borrowings rather
than as sales. As a result, certain financial highlights for the year ended
October 31, 2005 for MIY have been restated to give effect to recording
the transfers of the municipal bonds as secured borrowings, including
recording interest on the bonds as interest income and interest on the
secured borrowings as interest expense.

 

9. Subsequent Events:

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

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

 

Each Fund paid a net investment income dividend on March 31, 2011 to
Common Shareholders of record March 15, 2011 as follows:

 

The dividends declared on Preferred Shares for the period February 1,
2011 to February 28, 2011 were as follows:

 

50 SEMI-ANNUAL REPORT JANUARY 31, 2011

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Officers and Directors

Richard E. Cavanagh, Chairman of the Board and Director
Karen P. Robards, Vice Chair of the Board, Chair of the Audit Committee
and Director
Richard S. Davis, Fund President¹ and Director
Frank J. Fabozzi, Director and Member of the Audit Committee
Kathleen F. Feldstein, Director
James T. Flynn, Director and Member of the Audit Committee
Henry Gabbay, Director
Jerrold B. Harris, Director
R. Glenn Hubbard, Director
W. Carl Kester, Director and Member of the Audit Committee
Anne Ackerley, Fund President² and Chief Executive Officer
Brendan Kyne, Vice President
Brian Schmidt, Vice President
Neal Andrews, Chief Financial Officer
Jay Fife, Treasurer
Brian Kindelan, Chief Compliance Officer
Ira Shapiro, Secretary
¹ Fund President for MFT and MPA
² Fund President for MUC, MUJ, MIY and MJI

Investment Advisor
BlackRock Advisors, LLC
Wilmington, DE 19809

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

Custodians
State Street Bank and Trust Company³
Boston, MA 02111

The Bank of New York Mellon⁴
New York, NY 10286

Transfer Agent
Common Shares
Computershare Trust Company, N.A.³
Providence, RI 02940

BNY Mellon Shareowner Services⁴
Jersey City, NJ 07310

Auction Agent
Preferred Shares
BNY Mellon Shareowner Services
Jersey City, NJ 07310

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 Funds
100 Bellevue Parkway
Wilmington, DE 19809
³ For MPA
⁴ For MUC, MUJ, MFT, MIY and MJI

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

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

SEMI-ANNUAL REPORT JANUARY 31, 2011 51

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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 director nominees for
each Fund. Due to a lack of quorum of Preferred Shares, action on the proposal regarding the Preferred Shares nominees' election for MFT,
MIY, MJI, MPA and MUC was subsequently adjourned to October 5, 2010; and action on the proposal regarding Preferred Shares nominees'
election for MFT and MPA was additionally adjourned to November 2, 2010. There were no broker non-votes with regard to any of the Funds.

 

52 SEMI-ANNUAL REPORT JANUARY 31, 2011

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Additional Information (continued)

Dividend Policy

The Funds’ dividend policy is to distribute all or a portion of their net
investment income to its shareholders on a monthly basis. In order to pro-
vide shareholders with a more stable level of dividend distributions, the
Trusts may at times pay out less than the entire amount of net investment
income earned in any particular month and may at times in any particular
month pay out such accumulated but undistributed income in addition to
net investment income earned in that month. As a result, the dividends
paid by the Trusts for any particular month may be more or less than the
amount of net investment income earned by the Funds during such month.
The Funds’ current accumulated but undistributed net investment income,
if any, is disclosed in the Statements of Assets and Liabilities, which com-
prises part of the financial information included in this report.

General Information

On June 10, 2010, BlackRock Advisors, LLC, the Funds’ investment advisor
(the “Manager”), announced that MUJ and MIY each received a demand
letter from a law firm on behalf of Common Shareholders of MUJ and MIY.
The demand letters allege that the Manager and officers and Boards of
Directors (the “Boards”) of MUJ and MIY breached their fiduciary duties
by redeeming at par certain of MUJ and MIY’s Preferred Shares, and
demanded that the Boards take action to remedy those alleged breaches.
In response to the demand letter, the Boards established a Demand
Review Committee (the “Committee”) of the Independent Directors to inves
tigate the claims made in the demand letters with the assistance of inde-
pendent counsel. Based upon its investigation, the Committee
recommended that the Boards reject the demand specified in the demand
letters. After reviewing the findings of the Committee, the Board for each
Fund unanimously adopted the Committee’s recommendation and unani-
mously voted to reject the demand.

Electronic Delivery

Electronic copies of most financial reports are available on the Funds’ web-
sites or shareholders can sign up for e-mail notifications of quarterly state-
ments, annual and semi-annual reports by enrolling in the Funds’ electronic
delivery program.

Shareholders Who Hold Accounts with Investment Advisors, Banks
or Brokerages:

Please contact your financial advisor to enroll. Please note that not all
investment advisors, banks or brokerages may offer this service.

Householding

The Funds will mail only one copy of shareholder documents, including
annual and semi-annual reports and proxy statements, to shareholders
with multiple accounts at the same address. This practice is commonly
called “householding” and is intended to reduce expenses and eliminate
duplicate mailings of shareholder documents. Mailings of your shareholder
documents may be householded indefinitely unless you instruct us
otherwise. If you do not want the mailing of these documents to be
combined with those for other members of your household, please
call (800) 441-7762.

Availability of Quarterly Schedule of Investments

Each Fund 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 Funds’
Forms N-Q are available on the SEC’s website at http://www.sec.gov and
may also be reviewed and copied at the SEC’s Public Reference Room in
Washington, DC. Information on the operation of the Public Reference
Room may be obtained by calling (800) SEC-0330. Each Fund’s Forms
N-Q may also be obtained upon request and without charge by calling
(800) 441-7762.

Availability of Proxy Voting Policies and Procedures

A description of the policies and procedures that the Funds use to
determine how to vote proxies relating to portfolio securities is avail-
able (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 Funds voted proxies relating to securities
held in the Funds’ portfolios during the most recent 12-month period
ended June 30 is available upon request and without charge (1) at
http://www.blackrock.com or by calling (800) 441-7762 and
(2) on the SEC’s website at http://www.sec.gov.

Availability of Fund Updates

BlackRock will update performance and certain other data for the Funds 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 Funds.

SEMI-ANNUAL REPORT JANUARY 31, 2011 53

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Additional Information (continued)

Board Approvals

On September 1, 2010, the Board of Directors (the “Boards”) of MUC,
MUJ, MFT, MIY, MJI, and MPA (the “Funds”) approved changes to certain
investment policies of the Funds.

Historically, under normal market conditions, each Fund has been required
to invest at least 80% of its assets in municipal bonds either (i) insured
under an insurance policy purchased by the Fund or (ii) insured under an
insurance policy obtained by the issuer of the municipal bond or any other
party. In September 2008, the Funds adopted an amended investment pol-
icy of purchasing only municipal 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 abil-
ity rating of most of the municipal bond insurance providers was lowered
by the rating agencies. These downgrades called into question the long-
term viability of the municipal bond insurance market, which had the
potential to severely limit the ability of the Manager to manage the Funds
under the Insurance Investment Policy.

As a result, on September 1, 2010, the Manager recommended, and the
Boards approved, the removal of the Insurance Investment Policy. As a
result of this investment policy change, the Funds are not required to dis-
pose of assets currently held within the Funds. The Funds will maintain,
and have no current intention 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 Fund increases the amount of its assets that are invested in
municipal obligations that are not insured, the Fund’s shareholders 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 protection provided
under municipal bond insurance policies. As a result, shareholders will be
more dependent on the analytical ability of the Manager to evaluate the
credit quality of issuers of municipal obligations in which the Fund invests.
The Boards believe that the amended investment policy is in the best inter-
ests of each Fund and its shareholders because it believes that the poten-
tial 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
Fund will achieve its investment objective.

As disclosed in each Fund’s prospectus, each Fund 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 invest-
ment policy took effect on November 9, 2010. The Manager has been grad-
ually repositioning each Fund’s portfolios over time, and during such
period, each Fund may continue to hold a substantial portion of its assets
in insured municipal bonds. At this time, the repositioning of each Fund’s
portfolio is still taking place, and the Funds 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 Funds in connection with this change.

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

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

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

54 SEMI-ANNUAL REPORT JANUARY 31, 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 JANUARY 31, 2011 55

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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 Funds have leveraged their Common Shares, which creates risks for Common

Shareholders, including the likelihood of greater volatility of net asset value and market price of the Common Shares, and the risk

that fluctuations in 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 to 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

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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 MuniHoldings New Jersey Quality Fund, Inc.

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

Date: April 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 Jersey Quality Fund, Inc.

Date: April 4, 2011

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

Date: April 4, 2011

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