BLACKROCK INCOME TRUST INC, N-30D, 1995-12-26

BLACKROCK INCOME TRUST INC
N-30D, 1995-12-26

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THE BLACKROCK INCOME TRUST INC.
ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
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December 14, 1995

Dear Shareholder,

Since the inception of The BlackRock Income Trust Inc. in 1988, the market
for investments in fixed income securities has witnessed an unprecedented amount
of interest rate volatility, which has changed the landscape for fixed income
investors. 1995 has been a great year for investments in the bond market
following the disappointments of 1994, as yields have declined and the value of
fixed income securities has increased dramatically.

Looking forward, we maintain a positive outlook for the market's performance
in 1996. The economy currently appears to be growing at a steady rate and
inflation appears to be under control. Market participants are beginning to
agree that the Federal Reserve has achieved the "soft landing" that they set out
to accomplish through a series of interest rate increases last year, and are
optimistic for a further ease in the Fed's monetary policy should a budget
accord emphasizing fiscal restraint be reached in Washington.

BlackRock Financial Management is completing its first year as part of PNC
Bank Corporation, becoming an essential part of PNC's Asset Management Group by
taking a leadership role in their fixed income management operations. We have
witnessed consistent growth of our assets under management, which now stand at
approximately $34 billion, as both retail and institutional fixed income
investors continue to recognize the value of our risk management capabilities
and long term investment philosophy.

We look forward to maintaining your respect and confidence and to serving
your financial needs in the coming year.

Sincerely,

Laurence D. Fink Ralph L. Schlosstein
Chairman President

1
<PAGE>

December 14, 1995

Dear Shareholder:

The annual report for The BlackRock Income Trust Inc. ("BKT" or the "Trust")
for the fiscal year ended October 31, 1995 is provided to you with this letter.
We would like to take this opportunity to review the Trust's strong performance
over its fiscal year, from both a stock price and net asset value (NAV)
perspective, as well as to discuss both the opportunities available and
challenges presented to the Trust in the current lower interest rate
environment.

The Trust is a diversified, actively managed closed-end bond fund whose
investment objective is to provide high current income consistent with the
preservation of capital. The Trust seeks this objective by investing primarily
in mortgage-backed securities backed by U.S. Government agencies (such as Fannie
Mae, Freddie Mac or Ginnie Mae) and, to a lesser extent, U.S. Government
securities, asset-backed securities and privately issued mortgage-backed
securities. At least 85% of the Trust's assets must be rated at least "AAA" by
Standard & Poor's or "Aaa" by Moody's at the time of purchase; of this 85% at
least 80% of the Trust's assets must be rated at least "AAA" by Standard &
Poor's at the time of purchase while the remaining 5% can be invested in
securities rated at least "AAA" by Standard & Poor's, "Aaa" by Moody's or deemed
"AAA" by the Advisor at the time of purchase. Additionally, 15% of the Trust's
assets can be invested in securities rated at least "AA" by Standard & Poor's or
"Aa" by Moody's at time of purchase.

The Trust's shares are traded on the New York Stock Exchange under the
symbol BKT. The table below summarizes the performance of the Trust's stock
price and NAV over the fiscal year:

----------------------------------------------------
10/31/95 10/31/94 Change High Low
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Stock Price $7.25 $6.375 13.73% $7.375 $5.875
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Net Asset Value (NAV) $7.66 $7.25 5.66% $7.69 $7.09
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Premium/(Discount) to NAV (5.35%) (12.07%) (6.72%) (2.03%) (17.37%)
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The Fixed Income Markets

The dramatic rally in the capital markets, which caused interest rates to
fall and prices of fixed income securities to increase throughout late 1994 and
1995, has changed the market landscape for fixed income investors. The rally in
the Treasury market, sparked by a slowdown in economic growth and modest
inflation data, began during the fourth quarter of 1994 and continued to
accelerate through the first, second and third quarters of 1995. The threat of
inflation diminished as economic reports during the second quarter generally
expressed moderate growth at a sustainable pace. With investor confidence in the
value of fixed income securities renewed, market demand increasingly
accelerated.

Over the past twelve months, interest rates have fallen substantially across
the yield curve. Yield levels on the intermediate portion of the Treasury curve
have fallen over 150 basis points (1.50%) as the 10-year Treasury closed at
6.02% on October 31, 1995. During July and the beginning of August, the rally
was temporarily halted as strong economic data dampened expectations for a
follow-up reduction in the Fed funds target rate after the July 6th ease. As the
fourth quarter began, the market for fixed income securities appeared generally
positive and October interest rates returned to their 1995 lows due to a return
to sluggish growth, low inflation and a perceived Fed bias toward ease near
year-end.

The outcome of the Federal budget battle may well play a significant role in
determining the course of the bond market for the remainder of 1995 and into
1996. The Federal Reserve appears biased to ease but is apparently awaiting the
outcome of the

2
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budget talks before adjusting monetary policy as a reward for any fiscal
restraint. Additionally, uncertainty surrounding the potential default on
payment of certain U.S. Government securities could also heighten investor
concerns. While we remain attuned to the possibility of a rejuvenated economy
during the fourth quarter of 1995 and the possibility of accompanying
inflationary pressure as well as the ramifications of a default by the Federal
Government, we believe that the fixed income markets offer many pockets of value
to investors in the coming months.

The Trust's Portfolio and Investment Strategy

BlackRock Financial Management, Inc. (BlackRock) has been actively managing
the Trust's portfolio holdings consistent with BlackRock's overall market
outlook and the Trust's investment objectives. The chart below illustrates the
modifications made to the Trust's portfolio as of October 31, 1995 and October
31, 1994.

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Composition October 31, 1995 October 31, 1994
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Mortgage Pass-Throughs 24% 29%
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Adjustable Rate Mortgages 18% 9%
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Agency Multiple Class Mortgage Pass-Throughs 16% 8%
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FHA Project Loans 15% 16%
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Stripped Mortgage-Backed Securities 10% 5%
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Non-Agency Multiple Class Mortgage Pass-Throughs 7% 4%
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Asset-Backed Securities 4% 10%
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CMO Residuals 3% 3%
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U.S. Treasury Securities 2% 14%
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Commercial Mortgage-Backed Securities 1% 1%
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Municipal Bonds 0% 1%
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The most significant shift in the Trust's portfolio over the fiscal year has
been an increased allocation to the mortgage sector and a corresponding decrease
in Treasury exposure. The Trust took advantage of increased demand for U.S.
Treasury securities and substantially reduced its holdings by selling into the
strength of the market. This allowed the Trust to reallocate assets across the
mortgage-backed securities market, ultimately increasing the portfolio's total
mortgage exposure to 94%.

Within the mortgage market, the Trust's increased its allocation to
adjustable-rate mortgages (ARMs), doubling its holdings over the year. The Trust
opportunistically purchased these securities as an excess of ARM supply caused
them to trade at attractive yields relative to Treasuries. Additionally, ARMs
can be less interest rate sensitive than other mortgage products with fixed
coupon rates, potentially providing greater cash flow predictability.

The Trust is managed to maintain an interest rate sensitivity (or duration)
resembling that of a 10-year Treasury; this means that the portfolio's NAV will
change similarly to the price of the 10-year given a change in interest rates.
Thus, as the Treasury market rallied, both the price of the 10-year and the NAV
of the Trust increased. However, the rapid and substantial decline in interest
rates, as a result of the rally, has led to a reduction in the amount of net
investment income the Trust was able to earn over its fiscal year.

On October 31, 1995, the Board of Directors of BKT announced that according
to the Trust's estimates, approximately half of the October dividend and the
entire September dividend was from paid-in-capital. The decline in rates has
prompted an increase in refinancing activity, as homeowners have paid down their
mortgages to take advantage of lower mortgage rates.

3
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The Trust, which invests primarily in mortgage-backed securities, had to
reinvest prepaid principal in the declining interest rate environment, resulting
in the replacement of previously held bonds with lower yielding bonds.
Paid-in-capital distributions are not taxable, and when definitive information
is available to the Trust at calendar year end, you will receive information to
assist you in filing your 1995 taxes.

We look forward to managing the Trust in the coming fiscal year to benefit
from the opportunities available to investors in the fixed income markets as
well as to maintain the Trust's ability to meet its investment objectives. We
thank you for your investment in the BlackRock Income Trust Inc. Please feel
free to contact our marketing center at (800) 227-7BFM (7236) if you have
specific questions which were not addressed in this report.

Sincerely,

Robert Kapito Keith T. Anderson
Vice Chairman and Portfolio Manager Managing Director and Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.

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The BlackRock Income Trust Inc.
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Symbol on New York Stock Exchange: BKT
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Initial Offering Date: July 22, 1988
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Closing Stock Price as of 10/31/95: $7.25
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Net Asset Value as of 10/31/95: $7.66
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Yield on Closing Stock Price as of 10/31/95 ($7.25)1: 7.76%
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Current Monthly Distribution per Share2: $0.0468753
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Current Annualized Distribution per Share2: $0.562503
================================================================================

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1Yield on Closing Stock Price is calculated by dividing the current annualized
distribution per share by the closing stock price per share.
2The distribution is not constant and is subject to change.
3New dividend rate effective with January 1996 payment.

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(Left Column)

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The BlackRock Income Trust Inc.
Portfolio of Investments
October 31, 1995
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Principal
Amount Value
(000) Description (Note 1)
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Long-Term Investments-143.6%
Mortgage Pass-Throughs-78.3%
Federal Home Loan Mortgage
Corporation,
$68,850+ 6.50%, 12/01/23 -- 10/01/25 ............. $ 66,827,068
1,853 6.67%, 02/01/18, 1 year CMT
(ARM) ................................. 1,847,505
7,785+ 7.50%, 07/01/07 -- 02/01/23 ............. 7,980,093
13,708+ 7.50%, 06/01/99 -- 03/01/00,
5 year ................................ 13,943,956
1,695 8.00%, 11/01/15 ......................... 1,753,043
1,623 8.50%, 06/01/06 -- 12/01/07 ............. 1,681,687
4,022 8.50%, 05/01/01 -- 03/01/08,
15 year ............................... 4,175,376
7,035+ 9.00%, 09/01/20 -- 07/01/21 ............. 7,417,301
43 10.50%, 06/01/19 ........................ 46,658
Federal Housing Administration,
1,925 Altercare Bucyrus,
8.25%, 06/25/34 ....................... 1,930,564
2,331 Beachwood Manor,
8.25%, 10/01/34 ....................... 2,354,559
4,320 Brookville, 7.50%, 08/01/28 ............. 4,268,926
3,754 Country Estates,
8.375%, 01/01/35 ...................... 3,864,559
1,522 Elkton Care Center,
7.30%, 06/01/35 ....................... 1,491,914
GMAC,
6,411 Series 33, 7.43%, 09/01/21 ............ 6,594,282
2,222 Series 46, 7.43%, 01/01/22 ............ 2,289,936
919 Series 48, 7.43%, 06/01/22 ............ 941,990
508 Series 51, 7.43%, 02/01/23 ............ 523,169
8,154 Series 56, 7.43%, 11/01/22 ............ 8,398,480
Merrill,
1,302 Series 54, 7.43%, 05/15/23 ............ 1,342,789
3,437 Series 95, 7.43%, 03/01/22 ............ 3,542,711
1,261 Middlesex, 8.625%, 09/01/34 ............. 1,291,485
1,691 Overlook Green South,
7.50%, 09/01/34 ....................... 1,671,212
4,945 Parkside, 7.30%, 02/01/13 ............... 5,055,487
2,701 Project Gladys Hampton,
8.45%, 02/01/21 ....................... 2,742,429
1,922 Providence Apartments,
7.25%, 12/01/34 ....................... 1,880,035
Reilly,
3,605 Series 34, 7.43%, 08/01/19 ............ 3,688,729
576 Series 74, 7.43%, 10/01/23 ............ 592,294
2,349 Retreat at Windmere,
7.375%, 11/01/34 ...................... 2,309,115

Right Column

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Principal
Amount Value
(000) Description (Note 1)
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Federal Housing Administration,
$ 2,123 Rosewood, 7.875%, 12/01/34 .............. $ 2,123,250
1,525 Seneca Hills, 8.525%, 08/01/34 .......... 1,558,540
1,436 St. Camillus Nursing, 7.875%,
05/01/35 1,425,817
2,331 Summit Place, 7.90%, 11/01/34 ........... 2,316,033
2,892 Tuttle Grove, 7.25%, 10/01/35 ........... 2,799,521
USGI,
4,472 Polaris 982, 7.43%, 11/01/21 .......... 4,605,169
949 Series 87, 7.43%, 12/01/22 ............ 979,767
7,635 Series 87 H, 7.22%, 01/01/19 .......... 7,592,898
5,296 Series 99, 7.43%, 10/01/23 ............ 5,442,108
2,815 Series 1003, 7.43%, 03/01/24 .......... 2,850,545
2,144 Series 2024, 7.88%, 05/01/17 .......... 2,252,429
2,832 Series 6302, 7.43%, 12/01/21 .......... 2,912,428
7,247 Yorkville 6094, 7.43%, 06/01/21 ....... 7,466,051
3,644 Waterford, 8.625%, 07/25/27 ............. 3,756,602
1,420 Whitehall, 8.25%, 05/25/35 .............. 1,434,003
Federal National Mortgage
Association,
2,500 6.50%, Series 1994-M1, Class B,
10/25/03, Multifamily ................. 2,504,687
3,913+ 6.835%, 01/01/25,
1 year CMT (ARM) ...................... 3,999,996
2,448+ 7.00%, 11/01/08 ......................... 2,488,607
10,094++ 7.075%, 01/01/25,
1 year CMT (ARM) ...................... 10,317,937
726 7.50%, 02/01/22 -- 11/01/23 ............. 733,462
1,354 7.748%, 03/01/22,
1 year CMT (ARM) ...................... 1,385,156
2,091 7.785%, 01/01/01,
7 year Multifamily .................... 2,199,026
8,662+ 8.00%, 05/01/08 -- 06/01/14 ............. 8,974,703
743 9.317%, 06/01/19,
10 year Multifamily ................... 823,872
1,896 9.484%, 07/01/19, Multifamily ........... 2,087,139
1,469 9.497%, 06/01/24, Multifamily ........... 1,596,990
285 9.50%, 01/01/19 -- 06/01/20 ............. 300,345
791 9.732%, 07/01/19,
10 year Multifamily ................... 892,115
Government National Mortgage
Association,
3,398 6.00%, 03/15/09 -- 04/15/09,
15 year ............................... 3,326,633
36,042+ 6.50%, 04/20/25 -- 05/20/25,
1 year CMT (ARM) ...................... 36,639,214

See Notes to Financial Statements.

5
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Left Column

Government National Mortgage
Association,
$31,683+ 7.00%, 11/20/24 -- 06/20/25,
1 year CMT (ARM) ...................... $ 32,435,966
754 7.00%, 10/15/17 .................. 748,496
2,799 7.25%, 11/15/04 -- 01/15/06 ........ 2,866,008
16,937+ 7.50%, 02/20/25 -- 03/20/25,
1 year CMT (ARM) ........................ 17,347,803
29,131+ 8.50%, 05/15/01 -- 11/15/17 ............... 30,471,341
1,563 9.00%, 06/15/18 -- 09/15/21 ............... 1,643,702
14 9.50%, 07/15/16 ........................... 14,832
275 10.00%, 07/15/17 -- 11/15/19 .............. 300,575
812 11.00%, 06/15/18 -- 06/15/20 .............. 911,486
------------
376,972,604
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Multiple Class Mortgage
Pass-Throughs-37.5%
2,100 Citicorp Mortgage Securities Inc.,
Series 1994-9, Class A4, 06/25/09 ....... 1,947,750
4,077+ Collateralized Mortgage Obligation,
Trust 21, Class Y, 05/01/17 ............. 4,076,630
25,845 Community Program Loan Trust,
Series 1987-A, Class A-4, 10/01/18 ...... 22,081,322
Federal Home Loan
Mortgage Corporation, Multiclass
Mortgage Participation Certificates,
9,505+ Series 93, Class 93-H, 11/15/20 ......... 10,171,679
8,000++ Series 120, Class 120-H, 02/15/21 ....... 8,460,856
5,000 Series 138, Class 138-F, 07/15/21 ....... 5,436,469
1,000 Series 1388, Class 1388-H,
06/15/07 .............................. 816,245
4,728 Series 1473, Class 1473-JA,
02/15/05 (I) .......................... 372,642
9,932@ Series 1496, Class 1496-OD,
05/15/21 (I) .......................... 3,771,110
17,384+ Series 1584, Class 1584-FB,
09/15/23 (ARM) ........................ 18,035,568
Federal National Mortgage
Association, REMIC Pass-Through
Certificates,
5,331+ Trust 1988-16, Class 16-B,
06/25/18 .............................. 5,697,812
1,370 Trust 1989-30, Class 30-Z,
06/25/19 .............................. 1,455,790
20,100++ Trust 1990-18, Class 18-K,
03/25/20 .............................. 22,041,793
3,069 Trust 1991-38, Class 38-F,
04/25/21 (ARM) ........................ 3,416,052
2,341 Trust 1992-38, Class 38-SA,
04/25/21 (ARM) ........................ 2,172,851
33,512+/@ Trust 1992-69, Class 69-Z,
05/25/22 .............................. 32,977,024

Right Column

Federal National Mortgage
Association, REMIC Pass-Through
Certificates,
$18,628+ Trust 1995-W3, Class W3-A,
04/25/25 .............................. $ 19,268,733
693 Morgan Stanley Capital Inc., Series
1986-C, Class C-14, 05/01/16 ............ 728,408
1,199 Resolution Trust Corporation,
Mortgage Pass-Through
Certificates, Series 1992-2,
Class B-3, 11/25/21 ..................... 1,202,887
15,939 Salomon Capital Access Corporation,
Collateralized Mortgage Obligations,
Series 1986-1, Class C, 09/01/15 ........ 16,158,279
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180,289,900
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Commercial Mortgage-Backed
Security-0.4%
2,000 Paine Webber Mortgage Acceptance
Corporation IV, 6.95%, Series 1995-
M1, Class B, 01/15/07 ................... 2,017,132
------------
Asset-Backed Securities-5.6%
5,000 American Express Master Trust,
Series 1994-3, Class A, 7.85%,
8/15/05 ................................. 5,404,650
1,451 Chase Manhattan Grantor Trust,
Series 1995 -- Class A Automobile
Loan Pass-Through, 6.00%,
9/17/01 ................................. 1,451,478
3,602 MBNA Credit Card Trust, Series 1991-A,
Class A, 8.25%, 6/30/98 ................. 3,600,514
9,000 Prime Credit Card Master Trust,
Series 1995-1, Class A, 6.75%,
11/15/05 ................................ 9,222,188
7,200 Standard Credit Card Master Trust,
Series 1995-1, Class A, 6.55%,
10/07/07 ................................ 7,204,500
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26,883,330
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Stripped Mortgage-Backed
Securities-14.6%
1,190 Chase Mortgage Finance Corporation,
Mortgage Pass-Through
Certificates, Series 1994-A,
Class AP, 01/25/10 (P/O) ................ 875,246
1,857 Collateralized Mortgage Obligation,
Trust 36, Class A, 10/25/17 (P/O) ....... 1,403,998

See Notes to Financial Statements.

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Left Column

DBL, Collateralized Mortgage
Obligation,
$ 763 Trust K, Class 1, 09/23/17 (P/O) ........ $ 459,652
2,315 Trust V, Class 1, 09/01/18 (P/O) ........ 1,750,378
First Boston Mortgage Securities,
2,040 Series 1987-C, Class Z,
04/25/17 (I/O) .......................... 568,926
25,763 Series 1988-E,
Class 2, 10/01/18 (I/O) ................. 6,279,124
Federal Home Loan Mortgage
Corporation,
67 Series 188, Class G,
09/15/21 (I/O) ........................ 1,865,629
34 Series 1003, Class 1003-O,
10/15/20 (I/O) ........................ 848,113
6,944 Series 1159, Class E,
11/15/21 (P/O) ........................ 5,321,130
612 Series 1418, Class M,
11/15/22 (P/O) ........................ 201,162
9,641+ Series 1690, Class 1690-B,
11/15/23 (P/O) ........................ 4,541,187
Federal National Mortgage
Association,
2,916@ Trust 9, Class 2, 02/01/17 (I/O) ........ 726,795
33,956 Trust 23, Class 2, 09/01/17 (I/O) ....... 9,040,677
10,069 Trust 95, Class 2, 10/01/20 (I/O) ....... 2,680,930
16,709 Trust 103, Class 2, 09/01/06 (I/O) ...... 3,187,769
2,532 Trust 141, Class 2, 09/25/21 (I/O) ...... 670,941
8,022 Trust 225, Class 1, 02/01/23 (P/O) ...... 6,091,660
19,906 Trust 268, Class 2, 09/01/22 (I/O) ...... 5,200,571
5,500 Trust 1991-110, Class 110-E,
05/25/21 (P/O) ........................ 3,672,955
1,256 Trust G1993-2, Class KB,
01/25/23 (P/O) ........................ 376,352
12,614 Trust 1993-213, Class 213-H,
09/25/23 (P/O) ........................ 9,692,867
Housing Security Incorporated,
489 Series 1992-EB, Class B-8,
09/25/22 (P/O) ........................ 325,916
726 Series 1993-D, Class D-8,
06/25/23 (P/O) ........................ 460,500
752 ML Trust XIX, Collaterallized
Mortgage Obligation, Class B (P),
Series 19, Class B, 11/25/17 (P/O) ...... 569,933
10 Prudential Home Mortgage Securities
Company, Mortgage Pass-Through
Certificates, Series1993-29,
Class A18, 08/25/08 (I/O) ............... 2,675,000

Right Column

$ 4,775 Residential Funding Corporation,
Trust 1992-S6, Class S6-A11,
02/25/22 (I/O) .......................... $ 55,213
1,132 Structured Mortgage Asset Trust,
Series 1993-3C, Class CX,
04/25/24 (P/O) .......................... 712,821
-----------
70,255,445
-----------
CMO Residuals*-4.5%
5,522 American Housing Trust III, Senior
Mortgage Pass-Through
Certificates, Series 1, Class 4,
(REMIC)#, 03/25/19 ...................... 852,785
25 Collateralized Mortgage Obligation,
Trust 13#, 01/20/03 783,199
4 Collateralized Mortgage Securities
Corporation, Collateralized
Mortgage Obligations, Series
1990-3, Class 3-R, (REMIC)#,
05/25/20 ................................ 270,088
45 FBC Mortgage Securities Trust 16,
Variable Rate Collateralized
Mortgage Obligation, Series A#,
07/01/17 ................................ 1,224,226
3,115 FBC Mortgage Securities Trust 19,
Variable Rate Collateralized
Mortgage Obligation, Series A#,
10/20/18 ................................ 225,000
Federal Home Loan Mortgage
Corporation, Multiclass Mortgage
Participation Certificates,
7 Series 1017, Class 1017-R,
(REMIC), 11/15/20 ..................... 1,083,370
15,187 Series 1119, Class 1119-R,
(REMIC), 08/15/21 ..................... 3,543,384
450 Series 32, Class 32-R,
(REMIC), 03/15/20 ..................... 512,364
Federal National Mortgage
Association, REMIC Pass-Through
Certificates,
1,100 Trust 1989-99, Class 99-R,
12/25/19 .............................. 1,587,837
10 Trust 1990-12, Class 12-R,
02/25/20 .............................. 2,262,720
75 Trust 1990-53, Class 53-R,
05/25/20 .............................. 1,354,302
100 Trust 1990-57, Class 57-R,
05/25/20 .............................. 2,050,000
30 Trust 1990-78, Class 78-R,
07/25/20 .............................. 414,070

See Notes to Financial Statements.

7
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Left Column

Federal National Mortgage Association,
$ 29 Trust 1990-86, Class 86-R,
07/25/20 .............................. $ 1,935,000
7,310 ML Collateralized Mortgage Obligations,
Trust V#, 03/20/18 ...................... 2,579,584
10 PB Collateralized Mortgage obligation,
Trust 8, Class 8-H,
(REMIC)#, 03/01/19 ...................... 195,000
43 PaineWebber, Collateralized Mortgage
Obligation, Series N, Class 7, (REMIC),
01/01/19# ............................... 324,520
1,059 Ryland Acceptance Corporation Four,
Collateralized Mortgage Bonds, Series
33, Class A, 06/20/18# .................. 288,149
1,000 Smith Barney Mortgage Capital Trust VIII,
Collateralized Mortgage Obligations,
Series 1, Class 1-R, (REMIC)#,
05/01/19 .................................. 310,000
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21,795,598
------------
U.S. Government Security-2.7%
11,150+ U.S. Treasury Bonds, 7.625%,
2/15/25 ................................. 12,944,481
Total long-term investments
(cost $702,574,425) ..................... 691,158,490

SHORT-TERM INVESTMENT-0.5%
Contracts** CALL OPTIONS PURCHASED
----------- United States Treasury Bonds,
251 Expiring Feb. '96 @ $114 ................ 1,027,531
174 Expiring Nov. '95 @ $110 ................ 1,228,875
75 Expiring Nov. '95 @ $112 ................ 379,688
------------
Total short-term investments
(cost $1,298,672) ....................... 2,636,094
------------
Total Investments-144.1%
(cost $703,873,097) ..................... 693,794,584
Liabilities in excess
of other assets-(44.1%) ................. (212,493,720)
------------
NET ASSETS-100% ........................... $481,300,864
============

Right Column

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#Private placements restricted as to resale.
*Illiquid securities representing 3.1% of portfolio assets.
**One contract equals $100,000 face value.
+$186,054,872 principal amount pledged as collateral for reverse
repurchase agreements.
++Entire principal amount pledged as collateral for reverse repurchase
agreements.
+$3,999,637 principal amount pledged as collateral for futures
transactions.
@$27,545,233 principal amount pldeged as collateral for mortgage
swap.

- --------------------------------------------------------------------------------
Key to Abbreviations

ARM -Adjustable Rate Mortgage.
CMO -Collateralized Mortgage Obligation.
CMT -Constant Maturity Treasury.
I -Denotes a CMO with interest only characteristics.
I/O -Interest Only.
P -Denotes a CMO with principal only characteristics.
P/O -Principal Only.
REMIC -Real Estate Mortgage Investment Conduit.
- --------------------------------------------------------------------------------

See Notes to Financial Statements.

8
<PAGE>

Left Column

- --------------------------------------------------------------------------------
The BlackRock Income Trust Inc.
Statement of Assets and Liabilities
October 31, 1995
- --------------------------------------------------------------------------------

Assets
Investments, at value (cost $703,873,097) (Note 1) .............. $693,794,584
Cash ............................................................ 338,009
Receivable for investments sold ................................. 59,662,083
Interest receivable ............................................. 6,684,355
Due from broker-variation margin ................................ 30,633
------------
760,509,664
------------
Liabilities
Reverse repurchase agreements (Note 4) .......................... 214,437,875
Payable for investments purchased ............................... 59,704,620
Unrealized depreciation on mortgage swap
(Notes 1 & 3) ................................................. 2,502,451
Unrealized depreciation on interest rate cap
(Notes 1 & 3) ................................................. 692,328
Interest payable ................................................ 589,268
Dividends payable ............................................... 461,872
Advisory fee payable (Note 2) ................................... 264,971
Administration fee payable (Note 2) ............................. 81,530
Other accrued expenses .......................................... 473,885
------------
279,208,800
------------
Net Assets $481,300,864
============
Net assets were comprised of:
Common stock, at par (Note 5) ................................. $ 628,499
Paid-in capital in excess of par .............................. 563,355,769
------------
................................................................ 563,984,268
Accumulated net realized losses ............................... (69,278,560)
Net unrealized depreciation ................................... (13,404,844)
------------
Net assets, October 31, 1995 .................................. $481,300,864
============

Net asset value per share:
($481,300,864 / 62,849,878 shares of
common stock issued and outstanding) .......................... $7.66
=====

See Notes to Financial Statements.

Right Column

- --------------------------------------------------------------------------------
The BlackRock Income Trust Inc.
Statement of Operations
Year Ended October 31, 1995
- --------------------------------------------------------------------------------

Net Investment Income
Income
Interest (net of premium amortization of $14,689,422
and interest expense of $14,015,202) ........................ $ 36,975,703
------------
Expenses
Investment advisory ........................................... 3,040,686
Administration ................................................ 935,596
Reports to shareholders ....................................... 245,000
Custodian ..................................................... 228,000
Transfer agent ................................................ 185,000
Directors ..................................................... 76,500
Audit ......................................................... 58,500
Legal ......................................................... 17,500
Miscellaneous ................................................. 247,131
------------
Total operating expenses .................................... 5,033,913
------------
Net investment income ........................................... 31,941,790
------------
Realized and Unrealized Gain (Loss)
on Investments (Note 3)
Net realized gain (loss)
Investments ................................................... 4,472,533
Futures ....................................................... (16,849,861)
Short sales ................................................... (4,136,728)
Options ....................................................... 5,050
------------
(16,509,006)
------------
Net change in unrealized appreciation
Investments ................................................... 57,086,842
Futures ....................................................... 249,856
Options ....................................................... 16,825
------------
57,353,523
------------
Net gain on investments ....................................... 40,844,517
------------
Net Increase In Net Assets
Resulting from Operations ....................................... $ 72,786,307
============

See Notes to Financial Statements.

9
<PAGE>

Left Column

- --------------------------------------------------------------------------------
The BlackRock Income Trust Inc.
Statement of Cash Flows
Year Ended October 31, 1995
- --------------------------------------------------------------------------------

Increase (Decrease) in Cash
Cash flows used for operating activities:
Interest received ........................................... $ 62,434,212
Operating expenses paid ..................................... (4,482,364)
Interest expense paid ....................................... (11,164,294)
Proceeds from disposition of short-term
portfolio investments including options, net .............. 1,314,228
Purchase of long-term portfolio investments ................. (1,958,705,447)
Proceeds from disposition of long-term
portfolio investments ..................................... 1,869,672,473
Variation margin on futures ................................. (17,130,350)
-------------
Net cash flows used for operating activities ................ (58,061,542)
-------------
Cash flows provided by financing activities:
Increase in reverse repurchase agreements ................... 105,152,211
Cash dividends paid ......................................... (47,111,805)
-------------
Net cash provided by financing activities ................... 58,040,406
-------------
Net decrease in cash .......................................... (21,136)
Cash at beginning of year ..................................... 359,145
-------------
Cash at end of year ........................................... $ 338,009
=============

Reconciliation of Net Increase in Net
Assets to Net Cash Used for
Operating Activities
Net increase in net assets resulting from
operations .................................................. $ 72,786,307
-------------
Decrease in investments ....................................... 5,743,240
Increase in interest receivable ............................... (292,694)
Increase in receivable for investments sold ................... (35,597,200)
Decrease in depreciation on mortgage swap ..................... (6,899,198)
Increase in variation margin receivable ....................... (34,416)
Net realized loss ............................................. 16,509,006
Increase in unrealized depreciation ........................... (57,353,523)
Decrease in payable for investments purchased ................. (53,398,726)
Decrease in interest payable .................................. (102,513)
Increase in depreciation of interest rate cap ................. 48,501
Decrease in options ........................................... (21,875)
Increase in accrued expenses and other
liabilities ................................................. 551,549
-------------
Total adjustments ........................................... (130,847,849)
-------------
Net cash used for operating activities ........................ $ (58,061,542)
=============

Right Column

- --------------------------------------------------------------------------------
The BlackRock Income Trust Inc.
Statements of Changes
in Net Assets
- --------------------------------------------------------------------------------
Increase (Decrease) Years Ended October 31,
in Net Assets 1995 1994
------ ------
Operations:

Net investment income ....................... $ 31,941,790 $ 45,805,294

Net realized loss on investments,
short sales, futures and options .......... (16,509,006) (17,177,241)

Net change in net unrealized
appreciation (depreciation) on
investments, short sales,
futures and options ....................... 57,353,523 (73,508,164)
------------ ------------
Net increase (decrease) in
net assets resulting from
operations ................................ 72,786,307 (44,880,111)

Dividends from net investment
income ...................................... (41,413,664) (49,223,493)

Distributions in excess of net
investment income ........................... (192,946) -

Return of capital ............................. (5,530,167) -
------------ ------------
Total increase (decrease) ................... 25,649,530 (94,103,604)

Net Assets

Beginning of year ........................... 455,651,334 549,754,938
------------ ------------
End of year ................................. $481,300,864 $455,651,334
============ ============

See Notes to Financial Statements.

10
<PAGE>

- --------------------------------------------------------------------------------
The BlackRock Income Trust Inc.
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>

Year Ended October 31,

PER SHARE OPERATING PERFORMANCE: 1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $ 7.25 $ 8.75 $ 8.90 $ 9.43 $ 8.49
-------- -------- -------- -------- --------

Net investment income (net of $.22, $.10, $.09, $.09,
and $.07, respectively, of interest expense) .51 .73 .91 .74 1.05
Net realized and unrealized gain (losses) on
investments, short sales, futures and
options .65 (1.45) (.21) (.31) .92
-------- -------- -------- -------- --------
Net increase (decrease) from investment operations 1.16 (.72) .70 .43 1.97
-------- -------- -------- -------- --------
Dividends from net investment income (.66) (.78) (.85) (.83) (1.03)
Distributions in excess of net investment income - - - (.05) -
Return of capital distribution (.09) - - (.08) -
-------- -------- -------- -------- --------
Total dividends and distributions (.75) (.78) (.85) (.96) (1.03)
-------- -------- -------- -------- --------
Net asset value, end of year* $ 7.66 $ 7.25 $ 8.75 $ 8.90 $ 9.43
======== ======== ======== ======== ========

Per share market value, end of year* $ 7 1/4 $ 6 3/8 $ 8 3/8 $ 9 1/8 $ 10 1/8
======== ======== ======== ======== ========

TOTAL INVESTMENT RETURN+ 26.50% (15.31%) 1.01% (.55%) 37.55%
RATIOS TO AVERAGE NET ASSETS:
Operating expenses 1.08% 1.10% 1.03% 1.02% 1.07%
Net investment income 6.85% 9.21% 10.19% 7.85% 11.95%
SUPPLEMENTAL DATA:
Average net assets (in thousands) $466,449 $496,707 $558,530 $582,984 $541,488
Portfolio turnover 267% 223% 121% 131% 261%
Net assets, end of year (in thousands) $481,301 $455,651 $549,755 $555,737 $582,845
Reverse repurchase agreements outstanding,
end of year (in thousands) $214,438 $109,286 $ 74,700 $168,150 $ 83,025
Asset coverage++ $ 3,244 $ 5,169 $ 8,360 $ 4,305 $ 8,020

<FN>
- ----------------
* NAV and market value are published in The Wall Street Journal each Monday.
+ Total investment return is calculated assuming a purchase of common stock at the current market price on the first day and a sale
at the current market price on the last day of each year reported. Dividends and distributions are assumed, for purposes of this
calculation, to be reinvested at prices obtained under the Trust's dividend reinvestment plan. This calculation does not reflect
brokerage commissions. Total investment returns for periods of less than one full year are not annualized.
++ Per $1,000 of reverse repurchase agreement outstanding.
The information above represents the audited operating performance data for a share of common stock outstanding, total investment
return, ratios to average net assets and other supplemental data, for each of the periods indicated. This information has been
determined based upon financial information provided in the financial statements and market value data for the Trust's shares.
</FN>
</TABLE>
See Notes to Financial Statements.

11
<PAGE>

Left Column

- --------------------------------------------------------------------------------
The BlackRock Income Trust Inc.
Notes to Financial Statements
- --------------------------------------------------------------------------------

Note 1. Accounting
Policies

The BlackRock Income Trust Inc. (the "Trust"), a Maryland corporation, is a
diversified closed-end management investment company. The investment objective
of the Trust is to achieve high monthly income consistent with preservation of
capital. The ability of issuers of debt securities held by the Trust to meet
their obligations may be affected by economic developments in a specific
industry or region. No assurance can be given that the Trust's investment
objective will be achieved.

The following is a summary of significant accounting policies followed by
the Trust.

Securities Valuation: The Trust values mortgage-backed, asset-backed and other
debt securities on the basis of current market quotations provided by dealers or
pricing services approved by the Trust's Board of Directors. In determining the
value of a particular security, pricing services may use certain information
with respect to transactions in such securities, quotations from dealers, market
transactions in comparable securities, various relationships observed in the
market between securities, and calculated yield measures based on valuation
technology commonly employed in the market for such securities. Exchange-traded
options are valued at their last sales price as of the close of options trading
on the applicable exchanges. In the absence of a last sale, options are valued
at the average of the quoted bid and asked prices as of the close of business. A
futures contract is valued at the last sale price as of the close of the
commodities exchange on which it trades unless the Trust's Board of Directors
determines that such price does not reflect its fair value, in which case it
will be valued at its fair value as determined by the Trust's Board of
Directors. Any securities or other assets for which such current market
quotations are not readily available are valued at fair value as determined in
good faith under procedures established by and under the general supervision and
responsibility of the Trust's Board of Directors.

Short-term securities which mature in more than 60 days are valued at
current market quotations. Short-term securities which mature in 60 days or less
are valued at amortized cost, if their term to maturity from date of purchase
was 60 days or less, or by amortizing their value on the 61st day prior to
maturity, if their original term to maturity from date of purchase exceeded 60
days.

Right Column

In connection with transactions in repurchase agreements, the Trust's
custodian takes possession of the underlying collateral securities, the value of
which at least equals the principal amount of the repurchase transaction,
including accrued interest. To the extent that any repurchase transaction
exceeds one business day, the value of the collateral is marked-to-market on a
daily basis to ensure the adequacy of the collateral. If the seller defaults and
the value of the collateral declines or if bankruptcy proceedings are commenced
with respect to the seller of the security, realization of the collateral by the
Trust may be delayed or limited.

Option Selling/Purchasing: When the Trust sells or purchases an option, an
amount equal to the premium received or paid by the Trust is recorded as a
liability or an asset and is subsequently adjusted to the current market value
of the option written or purchased. Premiums received or paid from writing or
purchasing options which expire unexercised are treated by the Trust on the
expiration date as realized gains or losses. The difference between the premium
and the amount paid or received on effecting a closing purchase or sale
transaction, including brokerage commissions, is also treated as a realized gain
or loss. If an option is exercised, the premium paid or received is added to the
proceeds from the sale or cost of the purchase in determining whether the Trust
has realized a gain or a loss on investment transactions. The Trust, as writer
of an option, may have no control over whether the underlying securities may be
sold (call) or purchased (put) and as a result bears the market risk of an
unfavorable change in the price of the security underlying the written option.

Options, when used by the Trust, help in maintaining a targeted duration.
Duration is a measure of the price sensitivity of a security or a portfolio to
relative changes in interest rates. For instance, a duration of "one" means that
a portfolio's or a security's price would be expected to change by approximately
one percent with a one percent change in interest rates, while a duration of
five would imply that the price would move approximately five percent in
relation to a one percent change in interest rates.

Option selling and purchasing is used by the Trust to effectively "hedge"
more volatile positions so that changes in interest rates do not change the
duration of the portfolio unexpectedly. In general, the Trust uses options to
hedge a long or short position or an overall portfolio that is longer or shorter
than the benchmark security. A call option gives the purchaser of the option the
right (but not obligation) to buy, and obligates the seller to sell (when the
option is exercised), the underlying position at the exercise price at any time
or at a specified time during the option period. A put option gives the holder
the

12
<PAGE>

Left Column

right to sell and obligates the writer to buy the underlying position at the
exercise price at any time or at a specified time during the option period. Put
options can be purchased to effectively hedge a position or a portfolio against
price declines if a portfolio is long. In the same sense, call options can be
purchased to hedge a portfolio that is shorter than its benchmark against price
changes. The Trust can also sell (or write) covered call options and put options
to hedge portfolio positions.

The main risk that is associated with purchasing options is that the option
expires without being exercised. In this case, the option expires worthless and
the premium paid for the option is considered the loss. The risk associated with
writing call options is that the Trust may forego the opportunity for a profit
if the market value of the underlying position increases and the option is
exercised. The risk in writing put options is that the Trust may incur a loss if
the market value of the underlying position decreases and the option is
exercised. In addition, as with futures contracts, the Trust risks not being
able to enter into a closing transaction for the written option as the result of
an illiquid market.

Financial Futures Contracts: A futures contract is an agreement between two
parties to buy and sell a financial instrument for a set price on a future date.
Initial margin deposits are made upon entering into futures contracts and can be
either cash or securities. During the period the futures contract is open,
changes in the value of the contract are recognized as unrealized gains or
losses by "marking-to-market" on a daily basis to reflect the market value of
the contract at the end of each day's trading. Variation margin payments are
made or received, depending upon whether unrealized gains or losses are
incurred. When the contract is closed, the Trust records a realized gain or loss
equal to the difference between the proceeds from (or cost of) the closing
transaction and the Trust's basis in the contract.

Financial futures contracts, when used by the Trust, help in maintaining a
targeted duration. Duration is a measure of the price sensitivity of a security
or a portfolio to relative changes in interest rates. For instance, a duration
of "one" means that a portfolio's or a security's price would be expected to
change by approximately one percent with a one percent change in interest rates,
while a duration of "five" would imply that the price would move approximately
five percent in relation to a one percent change in interest rates. Futures
contracts can be sold to effectively shorten an otherwise longer duration
portfolio. In the same sense, futures contracts can be purchased to lengthen a
portfolio that is shorter than its duration target. Thus, by buying or selling
futures contracts, the Trust can effectively "hedge" more volatile positions so
that changes in interest rates do not change the duration of the portfolio
unexpectedly.

Right Column

The Trust may invest in financial futures contracts primarily for the
purpose of hedging its existing portfolio securities or securities the Trust
intends to purchase against fluctuations in value caused by changes in
prevailing market interest rates. Should interest rates move unexpectedly, the
Trust may not achieve the anticipated benefits of the financial futures
contracts and may realize a loss. The use of futures transactions involves the
risk of imperfect correlation in movements in the price of futures contracts,
interest rates and the underlying hedged assets. The Trust is also at the risk
of not being able to enter into a closing transaction for the futures contract
because of an illiquid secondary market. In addition, since futures are used to
shorten or lengthen a portfolio's duration, there is a risk that the portfolio
may have temporarily performed better without the hedge or that the Trust may
lose the opportunity to realize appreciation in the market price of the
underlying positions.

Short Sales: The Trust may make short sales of securities as a method of hedging
potential price declines in similar securities owned. When the Trust makes a
short sale, it may borrow the security sold short and deliver it to the
broker-dealer through which it made the short sale as collateral for its
obligation to deliver the security upon conclusion of the sale. The Trust may
have to pay a fee to borrow the particular securities and may be obligated to
pay over any payments received on such borrowed securities. A gain, limited to
the price at which the Trust sold the security short, or a loss, unlimited as to
dollar amount, will be recognized upon the termination of a short sale if the
market price is greater or less than the proceeds originally received.

Securities Lending: The Trust may lend its portfolio securities to qualified
institutions. The loans are secured by collateral at least equal, at all times,
to the market value of the securities loaned. The Trust may bear the risk of
delay in recovery of, or even loss of rights in, the securities loaned should
the borrower of the securities fail financially. The Trust receives compensation
for lending its securities in the form of interest on the loan. The Trust also
continues to receive interest on the securities loaned, and any gain or loss in
the market price of the securities loaned that may occur during the term of the
loan will be for the account of the Trust. The Trust did not engage in
securities lending during the year ended October 31, 1995.

Mortgage Swaps: Mortgage swaps are a variation on interest rate swaps. In a
simple interest rate swap, one investor pays a floating rate of interest on a
notional principal amount and receives a fixed rate of interest on the same
notional principal amount for a specified period of time. Alternatively, an
investor may pay a fixed rate and receive a floating rate. Rate swaps were
conceived as asset/liability management tools. In more complex swaps, the
notional principal amount may decline (or

13
<PAGE>

Left Column

amortize) over time. Mortgage swaps combine the fixed/floating concept with an
amortizing feature that is indexed to mortgage securities. Scheduled
amortization and prepayments on the index pools reduce the notional amount.

During the term of the swap, changes in the value of the swap are recognized
as unrealized gains or losses by "marking-to-market" to reflect the market value
of the swap. When the swap is terminated, the Trust will record a realized gain
or loss equal to the difference between the proceeds from (or cost of) the
closing transaction and the Trust's basis in the contract, if any.

Mortgage swaps are intended to enhance the Trust's income earning ability by
effectively owning mortgage pass-throughs and locking-in the financing rate at a
very attractive spread to market levels. This allows mortgage pass-throughs to
be held more cheaply than if they were owned outright and financed, but at a
decreased level of liquidity.

The Trust is exposed to credit loss in the event of non-performance by the
other party to the mortgage swap. However, the Trust does not anticipate
non-performance by any counterparty.

Interest Rate Caps: Interest rate caps are similar to interest rate swaps,
except that one party agrees to pay a fee, while the other party pays the
excess, if any, of a floating rate over a specified fixed rate.

Interest rate caps are intended to both manage the duration of the Trust's
portfolio and its exposure to changes in short term rates. Duration is a measure
of the price sensitivity of a security or a portfolio to relative changes in
interest rates. For instance, a duration of "one" means that a portfolio's or a
security's price would be expected to change by approximately one percent with a
one percent change in interest rates, while a duration of "five" would imply
that the price would move approximately five percent in relation to a one
percent change in interest rates. Owning interest rate caps reduces the
portfolio's duration, making it less sensitive to changes in interest rates from
a market value perspective. The effect on income involves protection from rising
short term rates, which the Trust experiences primarily in the form of leverage.

The Trust is exposed to credit loss in the event of non-performance by the
other party to the interest rate cap. However, the Trust does not anticipate
non-performance by any counterparty.

Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized and unrealized gains and losses are
calculated on the identified cost basis. Interest income is recorded on the
accrual basis and the Trust accretes discount and amortizes premium on
securities purchased using the interest method.

Right Column

Taxes: It is the Trust's intention to continue to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to shareholders. Therefore,
no federal income tax provision is required.

Dividends and Distributions: The Trust declares and pays dividends and
distributions monthly, first from net investment income, then from realized
short-term capital gains and other sources, if necessary. Net long-term capital
gains, if any, in excess of loss carryforwards are distributed at least
annually. Dividends and distributions are recorded on the ex-dividend date.

Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.

Reclassification of Capital Accounts: Effective November 1, 1993, the Trust
began accounting and reporting for distributions to shareholders in accordance
with Statement of Position 93-2: Determination, Disclosure and Financial
Statement Presentation of Income, Capital Gain and Return of Capital
Distributions by Investment Companies. As a result of this statement, the Trust
changed the classification of certain distributions to shareholders for
financial reporting purposes. The cumulative effect of adopting the statement
for the year ended October 31, 1995 was to decrease paid-in-capital in excess of
par and increase undistributed net investment income by $5,722,006. Net
investment income, net realized gains and net assets were not affected by this
change.

Note 2. Agreements

The Trust has an Investment Advisory Agreement with BlackRock Financial
Management, Inc. (the "Adviser") and an Administration Agreement with Prudential
Mutual Fund Management, Inc. ("PMF"), an indirect, wholly-owned subsidiary of
The Prudential Insurance Co. of America.

The investment fee paid to the Adviser is computed weekly and payable
monthly at an annual rate of 0.65% of the Trust's average weekly net assets. The
administration fee paid to PMF is also computed weekly and payable monthly at an
annual rate of 0.20% of the first $500 million of the Trust's average weekly net
assets and 0.15% of any excess.

Pursuant to the agreements, the Adviser provides continuous supervision of
the investment portfolio and pays the compensation of officers of the Trust. PMF
pays occupancy and certain clerical and accounting costs of the Trust. The Trust
bears all other costs and expenses.

14
<PAGE>

Left Column

On February 28, 1995, the Adviser was acquired by PNC Bank, NA. Following
the acquisition, the Adviser has become a wholly-owned corporate subsidiary of
PNC Asset Management Group, Inc., the holding company for PNC's asset management
businesses.

Note 3. Portfolio
Securities

Purchases and sales of investment securities, other than short-term investments
and dollar rolls, for the year ended October 31, 1995 aggregated $1,902,257,887
and $1,847,699,685, respectively.

The Trust may invest without limit in securities which are not readily
marketable, including those which are restricted as to disposition under
securities law ("restricted securities") although the Trust does not expect that
such investments will generally exceed 25% of its portfolio assets. At October
31, 1995, the Trust held 3.1% of its portfolio assets in illiquid securities
including 1.0% of its portfolio assets in securities restricted as to resale.

The federal income tax basis of the Trust's investments at October 31, 1995
was $706,972,559 and, accordingly, net unrealized depreciation for federal
income tax purposes was $13,177,975 (gross unrealized appreciation-$19,271,562;
gross unrealized depreciation-$32,449,537).

For federal income tax purposes, the Trust has a capital loss carryforward
at October 31, 1995 of approximately $64,731,200 of which approximately
$6,398,700 will expire in 1997, approximately $4,473,500 will expire in 1998,
approximately $15,072,600 will expire in 2001, approximately $23,358,200 will
expire in 2002 and approximately $15,428,200 will expire in 2003. Accordingly,
no capital gains distribution is expected to be paid to shareholders until net
gains have been realized in excess of such amounts.

During the year ended October 31, 1995, the Trust entered into financial
futures contracts. Details of open contracts at October 31, 1995 are as follows:

Value at Unrealized
Number of Expiration Value at October 31, Appreciation/
Contracts Type Date Trade Date 1995 (Depreciation)
- --------- ----------- ---------- ---------- ----------- ------------
Short positions:
48 5 yr. T-Note March 1996 $ 5,178,390 $ 5,199,000 $ (20,610)
362 10 yr. T-Note Dec. 1995 39,832,145 40,374,311 (542,166)

Long positions:
32 30 yr. T-Bond March 1996 3,728,240 3,735,000 6,760
157 5 yr. T-Note Dec. 1995 16,943,686 17,007,516 63,829
180 30 yr. T-Bond Dec. 1995 20,868,225 21,071,250 203,025
370 2 yr. T-Bond Dec. 1995 38,336,843 38,494,453 157,610
---------
$(131,552)
=========

Right Column

Transactions in options during the year ended October 31, 1995 were as
follows:

Number
of
Contracts Premiums
---------- --------

Options outstanding at October 31, 1994 .............. 200 $ 5,050
Options expired ...................................... (200) (5,050)
----- --------
Options outstanding at October 31, 1995 .............. 0 $ 0
===== ========

The Trust entered into a FNMA mortgage swap with an original notional amount
of $150 million. Under this agreement, the Trust receives a fixed rate and pays
a floating rate. The swap settled on October 27, 1993. Details of this swap is
as follows:
<TABLE>
<CAPTION>

Current
Notional
Amount Fixed Termination Unrealized
(000) Type Rate Floating Rate Date Depreciation
- -------- ---- ----- ------------------------------ ----------- ------------
<S> <C> <C> <C> <C> <C>

$104,052 FNMA 8% 1-mo. LIBOR minus 15 basis pts. Oct.'96 $(2,502,451)

</TABLE>

The Trust entered into an interest rate cap which settled on November 5,
1991 with a notional amount of $200 million. Under this agreement, the Trust
receives the excess, if any, of three-month LIBOR over the fixed rate of 8.50%.
The agreement terminates on November 5, 1996. At October 31, 1995 unrealized
depreciation was $692,328.

Note 4. Borrowings

Reverse Repurchase Agreements: The Trust enters into reverse repurchase
agreements with qualified, third party broker-dealers as determined by and under
the direction of the Trust's Board of Directors. Interest on the value of
reverse repurchase agreements issued and outstanding is based upon competitive
market rates at the time of issuance. At the time the Trust enters into a
reverse repurchase agreement, it establishes and maintains a segregated account
with the lender containing liquid high grade securities having a value not less
than the repurchase price, including accrued interest, of the reverse repurchase
agreement.

The average daily balance of reverse repurchase agreements outstanding
during the year ended October 31, 1995 was approximately $196,626,500 at a
weighted average interest rate of approximately 5.92%. The maximum amount of
reverse repurchase agreements outstanding at any month-end during the year was
$244,433,638 as of July 31, 1995, which was 29.9% of total assets.

Dollar Rolls: The Trust enters into dollar rolls in which the Trust sells
securities for delivery in the current month and simultaneously contracts to
repurchase substantially similar (same type, coupon and maturity) securities on
a specified future date. During the roll period the Trust forgoes principal and
interest paid on the securities. The Trust is compensated by the interest earned
on the cash proceeds of the initial sale and by the lower repurchase price at
the future date.

15
<PAGE>

Left Column

The average weekly balance of dollar rolls outstanding during the year ended
October 31, 1995 was approximately $4,725,217. The maximum amount of dollar
rolls outstanding at any month-end during the year was $27,392,666 as of June
30, 1995, which was 3.5% of total assets.

Note 5. Capital

There are 200 million shares of $.01 par value common stock authorized. Of the
62,849,878 shares outstanding at October 31, 1995, the Adviser owned 10,753
shares.

Right Column

Note 6. Dividends

Subsequent to October 31, 1995, the Board of Directors of the Trust declared
dividends from undistributed earnings of $0.0625 per share payable November 30,
1995 and December 29, 1995 to shareholders of record on November 15, 1995 and
December 15, 1995 and $0.046875 per share payable January 31, 1995 to
shareholders of record on January 16, 1995, respectively.

Note 7. Quarterly Data
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized
gain (losses) on
investments, Net increase (decrease)
short sales in net assets Dividends
Net investment futures and resulting from and Period end
Quarterly income options operations distributions Share price net asset
period Total income Amount Per share Amount Per share Amount Per share Amount Per share High Low value
- --------- ------------ ------ --------- ------ --------- ------ --------- ------ --------- ---- --- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
November 1,
1993 to
January 31,
1994 $13,196,365 $ 8,584,248 $.14 $(12,850,059) $(.21) $ (4,265,811) $(.07) $13,348,984 $.212 $8 5/8 $7 3/4 $8.47

February 1,
1994 to
April 30,
1994 7,657,185 9,529,620 .15 (41,634,010) (.66) (32,104,390) (.51) 12,306,006 .196 8 1/2 7 7.76

May 1,
1994 to
July 31,
1994 18,431,996 16,068,999 .26 31,105,782 .49 47,174,781 .75 11,784,274 .188 7 3/8 6 5/8 7.55

August 1,
1994 to
October 31,
1994 11,977,840 11,622,427 .18 (67,307,118) (1.07) (55,684,691) (.89) 11,784,229 .188 7 1/4 6 1/8 7.25

November 1,
1994 to
January 31,
1995 7,966,522 6,718,106 .11 6,924,347 .11 13,642,453 .22 11,784,164 .188 6 7/8 5 7/8 7.28

February 1,
1995 to
April 30,
1995 13,875,262 12,635,132 .20 12,679,455 .20 25,314,587 .40 11,784,196 .188 7 1/4 6 5/8 7.49

May 1,
1995 to
July 31,
1995 9,186,628 7,888,261 .13 4,537,191 .07 12,425,452 .20 11,784,243 .188 7 3/8 6 7/8 7.50

August 1,
1995 to
October 31,
1995 5,947,291 4,700,291 .07 16,703,524 .27 21,403,815 .34 11,784,174 .188 7 3/8 6 7/8 7.66
- ------------------------------------------------------------------------------------------------------------------------------------

</TABLE>

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INCOME TRUST INC.
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------

The Shareholders and Board of Directors of
The BlackRock Income Trust Inc.:

We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of The BlackRock Income Trust Inc. as of
October 31, 1995 and the related statements of operations and of cash flows for
the year then ended and of changes in net assets for each of the two years in
the period then ended and the financial highlights for each of the five years in
the period then ended. These financial statements and the financial highlights
are the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at October
31, 1995 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of The BlackRock Income
Trust Inc. at October 31, 1995 and the results of its operations, its cash
flows, the changes in its net assets and the financial highlights for the
respective stated periods in conformity with generally accepted accounting
principles.

DELOITTE & TOUCHE LLP

New York, New York
December 8, 1995

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INCOME TRUST INC.
TAX INFORMATION
- --------------------------------------------------------------------------------

We wish to advise you as to the federal tax status of dividends and
distributions paid by the Trust during its fiscal year ended October 31, 1995.

During the fiscal year ended October 31, 1995, the Trust paid dividends and
distributions of $0.7500 per share of which $0.6620 is taxable as ordinary
income and $0.0880 is a non-taxable return of capital. For federal income tax
purposes, the aggregate of any dividends and short-term capital gains
distributions you received are reportable in your 1995 federal income tax return
as ordinary income. Further, we wish to advise you that your income dividends do
not qualify for the dividends received deduction.

For the purpose of preparing your 1995 annual federal income tax return,
however, you should report the amounts as reflected on the appropriate Form 1099
DIV which will be mailed to you in January 1996.

- --------------------------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN
- --------------------------------------------------------------------------------

Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"),
shareholders may elect to have all distributions of dividends and capital gains
automatically reinvested by State Street Bank & Trust Company (the "Plan Agent")
in Trust shares pursuant to the Plan. Shareholders who do not participate in the
Plan will receive all distributions in cash paid by check in United States
dollars mailed directly to the shareholders of record (or if the shares are held
in street or other nominee name, then to the nominee) by the Custodian, as
dividend disbursing agent.

The Plan Agent serves as agent for the shareholders in administering the
Plan. After the Trust declares a dividend or determines to make a capital gain
distribution, the Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy Trust shares in the open market, on the New York
Stock Exchange or elsewhere, for the participants' accounts. The Trust will not
issue shares under the Plan below net asset value.

Participants in the Plan may withdraw from the Plan upon written notice to
the Plan Agent and will receive certificates for whole Trust shares and a cash
payment will be made for any fraction of a Trust share.

The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. The automatic reinvestment of dividends and distributions
will not relieve participants of any federal, state or local income taxes that
may be payable on such dividend or distributions.

Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice of the
change sent to all shareholders of the Trust at least 90 days before the record
date for the dividend or distribution. The Plan also may be amended or
terminated by the Plan Agent upon at least 90 days' written notice to all
shareholders of the Trust. All correspondence concerning the Plan should be
directed to the Plan Agent at (800) 699-1BFM. The addresses are on the front of
this report.

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------

There have been no material changes in the Trust's investment objectives or
policies that have not been approved by the shareholders, or to its charter or
by-laws, or in the principal risk factors associated with investment in the
Trust. There have been no changes in the persons who are primarily responsible
for the day-to-day management of the Trust's portfolio.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INCOME TRUST INC.
INVESTMENT SUMMARY
- --------------------------------------------------------------------------------

The Trust's Investment Objective

The Trust's investment objective is to manage a portfolio of high quality
securities to achieve high monthly income consistent with preservation of
capital. The Trust will seek to distribute monthly income that is greater than
that obtainable on an annualized basis by investment in United States Treasury
securities having the same maturity as the average dollar weighted maturity of
the Trust's investments.

Who Manages the Trust?

BlackRock Financial Management, Inc. ("BlackRock") is the investment adviser for
the Trust. BlackRock is a registered investment adviser specializing in fixed
income securities. Currently, BlackRock manages over $34 billion of assets
across the government, mortgage, corporate and municipal sectors. These assets
are managed on behalf of institutional and individual investors in 21 closed-end
funds, which trade on either the New York or American stock exchanges, several
open-end funds and separate accounts for more than 80 clients in the U.S. and
overseas. BlackRock is a subsidiary of PNC Asset Management Group which is a
division of PNC Bank, the nation's eleventh largest banking organization.

What Can the Trust Invest In?

The Trust will invest at least 65% of its assets in mortgage-backed securities.
At least 85% of the Trust's assets must be rated at least "AAA" by Standard &
Poor's or "Aaa" by Moody's at the time of purchase; of this 85% at least 80% of
the Trust's assets must be rated at least "AAA" by Standard & Poor's at the time
of purchase while the remaining 5% can be invested in securities at least "AAA"
by Standard & Poor's, "Aaa" by Moody's or deemed "AAA" by the Advisor at the
time of purchase. Additionally, 15% of the Trust's assets can be invested in
securities rated at least "AA" by Standard & Poor's or "Aa" by Moody's at time
of purchase. Under current market conditions, BlackRock expects that the primary
investments of the Trust will be U.S. government securities, securities backed
by government agencies (such as mortgage-backed securities), privately issued
mortgage-backed securities, commercial mortgage-backed securities and
asset-backed securities.

What is the Adviser's Investment Strategy?

The Adviser will manage the assets of the Trust in accordance with the Trust's
investment objective and policies to seek to provide high monthly income
consistent with the preservation of capital. The Trust will seek to provide
monthly income that is greater than that which could be obtained by investing in
U.S. Treasury securities with an average life similar to that of the Trust's
assets. Under current market conditions, the average life of the Trust's assets
is expected to be in the range of seven to ten years. Under other market
conditions, the Trust's average life may vary and may not be predictable using
any formula. In seeking the investment objective, the Adviser may actively
manage among various types of securities in different interest rate
environments.

Traditional mortgage pass-through securities make interest and principal
payments on a monthly basis and can be a source of attractive levels of income
to the Trust. While mortgage-backed securities in the Trust are of high credit
quality, they typically offer a yield spread above Treasuries due to the
uncertainty of the timing of their cash flows as they are subject to changes in
the rate of prepayments when interest rates change and either a larger or
smaller proportion of mortgage holders refinance their mortgages or move. While
mortgage-backed securities offer the opportunity for attractive yields, they
subject a portfolio to interest rate risk and prepayment exposure which result
in reinvestment risk when prepaid principal must be reinvested.

Multiple-class mortgage pass-through securities, or collateralized mortgage
obligations (CMOs), are also an investment that may be used in the Trust's
portfolio. These securities are issued in multiple classes each of which has a
different coupon rate, stated maturity and prioritization on the timing of
receipt of cash flows coming from interest and principal payments on the
underlying mortgages. Principal prepayments can be allocated among the different
classes of a CMO in a number of ways; for instance, they can be applied to each
of the classes in the order of their respective stated maturities. This feature
allows an investor to better plan the average life of their investment. As a
result, these securities may be used by the Trust to help manage prepayment risk
and align the assets of the portfolio more closely with its targeted average
life.

Additionally, in order to attempt to protect the portfolio from interest rate
risk, the Adviser will attempt to locate securities with call protection, such
as commercial mortgage-backed securities with prepayment penalties or lockouts.
Securities with call protection should provide the portfolio with some degree of
protection against reinvestment risk during times of lower prevailing interest
rates.

19
<PAGE>

How Are the Trust's Shares Purchased and Sold? Does the Trust Pay Dividends
Regularly?

The Trust's shares are traded on the New York Stock Exchange which provides
investors with liquidity on a daily basis. Orders to buy or sell shares of the
Trust must be placed through a registered broker or financial advisor. The Trust
pays monthly dividends which are typically paid on the last business day of the
month. For shares held in the shareholder's name, dividends may be reinvested in
additional shares of the fund through the Trust's transfer agent, Boston
Financial Data Services. Investors who wish to hold shares in a brokerage
account should check with their financial advisor to determine whether their
brokerage firm offers dividend reinvestment services.

Leverage Considerations in the Trust

Under current market conditions, leverage increases the income earned by the
Trust. The Trust employs leverage primarily through the use of reverse
repurchase agreements and dollar rolls. Leverage permits the Trust to borrow
money at short-term rates and reinvest that money in longer-term assets which
typically offer higher interest rates. The difference between the cost of the
borrowed funds and the income earned on the proceeds that are invested in longer
term assets is the benefit to the Trust from leverage. In general, the portfolio
is typically leveraged at approximately 33-1/3% of total assets.

Leverage also increases the duration (or price volatility of the net assets) of
the Trust, which can improve the performance of the fund in a declining rate
environment, but can cause net assets to decline faster than the market in a
rapidly rising rate environment. BlackRock's portfolio managers continuously
monitor and regularly review the Trust's use of leverage and the Trust may
reduce, or unwind, the amount of leverage employed should BlackRock consider
that reduction to be in the best interests of shareholders.

Special Considerations and Risk Factors Relevant to the Trust

The Trust is intended to be a long-term investment and is not a short-term
trading vehicle.

Investment Objective. Although the objective of the Trust is to provide high
monthly income consistent with preservation of capital, there can be no
assurance that this objective will be achieved.

Dividend Considerations. Dividends paid by the Trust are likely to vary over
time as fixed income market conditions change. Future dividends may be higher or
lower than the dividend the Trust is currently paying.

Leverage. The Trust utilizes leverage through reverse repurchase agreements and
dollar rolls, which involves special risks. The Trust's net asset value and
market value may be more volatile due to its use of leverage.

Market Price of Shares. The shares of closed-end investment companies such as
the Trust trade on the New York Stock Exchange (NYSE symbol: BKT) and as such
are subject to supply and demand influences. As a result, shares may trade at a
discount or a premium to their net asset value.

Mortgage-Backed and Asset-Backed Securities. The cash flow and yield
characteristics of these securities differ from traditional debt securities. The
major differences typically include more frequent payments and the possibility
of prepayments which will change the yield to maturity of the security.

Illiquid Securities. The Trust may invest in securities that are illiquid,
although under current market conditions the Trust expects to do so to only a
limited extent. These securities involve special risks.

Antitakeover Provisions. Certain antitakeover provisions will make a change in
the Trust's business or management more difficult without the approval of the
Trust's Board of Directors and may have the effect of depriving shareholders of
an opportunity to sell their shares at a premium above the prevailing market
price.

20
<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INCOME TRUST INC.
GLOSSARY
- --------------------------------------------------------------------------------
<TABLE>

<S> <C>
Adjustable Rate Mortgage-Backed
Securities (ARMs): Mortgage instruments with interest rates that adjust at periodic intervals at a fixed amount over
the market levels of interest rates as reflected in specified indexes. ARMS are backed by
mortgage loans secured by real property.

Asset-Backed Securities: Securities backed by various types of receivables such as automobile and credit card receivables.

Closed-End Fund: Investment vehicle which initially offers a fixed number of shares and trades on a stock
exchange. The fund invests in a portfolio of securities in accordance with its stated investment
objectives and policies. One of the advantages of a closed-end fund is the diversification it
provides through its multiple holdings.

Collateralized
Mortgage Obligations (CMOs): Mortgage-backed securities which separate mortgage pools into short-, medium-, and long-term
securities with different priorities for receipt of principal and interest. Each class is paid a
fixed or floating rate of interest at regular intervals. Also known as multiple-class mortgage
pass-throughs.

Discount: When a fund's net asset value is greater than its stock price the fund is said to be trading at a
discount.

Dividend: This is income generated by securities in a portfolio and distributed to shareholders after the
deduction of expenses. This Trust declares and pays dividends on a monthly basis.

Dividend Reinvestment: Shareholders may elect to have all distributions of dividends and capital gains automatically
reinvested into additional shares of the Trust.

FHA: Federal Housing Administration, a government agency that facilitates a secondary mortgage
market by providing an agency that guarantees timely payment of interest and principal on
mortgages.

FHLMC: Federal Home Loan Mortgage Corporation, a publicly owned, federally chartered corporation
that facilitates a secondary mortgage market by purchasing mortgages from lenders such as
savings institutions and reselling them to investors by means of mortgage-backed securities.
Obligations of FHLMC are not guaranteed by the U.S. government, however; they are backed by
FHLMC's authority to borrow from the U.S. government. Also known as Freddie Mac.

FNMA: Federal National Mortgage Association, a publicly owned, federally chartered corporation
that facilitates a secondary mortgage market by purchasing mortgages from lenders such as
savings institutions and reselling them to investors by means of mortgage-backed securities.
Obligations of FNMA are not guaranteed by the U.S. government, however; they are backed by
FNMA's authority to borrow from the U.S. government. Also known as Fannie Mae.

GNMA: Government National Mortgage Association, a government agency that facilitates a secondary
mortgage market by providing an agency that guarantees timely payment of interest and
principal on mortgages. GNMA's obligations are supported by the full faith and credit of the U.S.
Treasury. Also known as Ginnie Mae.

Government Securities: Securities issued or guaranteed by the U.S. government, or one of its agencies or instrumen-
talities, such as GNMA (Government National Mortgage Association), FNMA (Federal National
Mortgage Association) and FHLMC (Federal Home Loan Mortgage Corporation).

Interest-Only Securities (I/O): Mortgage securities that receive only the interest cash flows from an underlying pool of
mortgage loans or underlying pass-through securities. Also known as a STRIP.

</TABLE>

21
<PAGE>

<TABLE>

<S> <C>
Market Price: Price per share of a security trading in the secondary market. For a closed-end fund, this is the
price at which one share of the fund trades on the stock exchange. If you were to buy or sell
shares, you would pay or receive the market price.

Mortgage Dollar Rolls: A mortgage dollar roll is a transaction in which the Trust sells mortgage-backed securities for
delivery in the current month and simultaneously contracts to repurchase substantially similar
(although not the same) securities on a specified future date. During the "roll" period, the
Trust does not receive principal and interest payments on the securities, but is compensated for
giving up these payments by the difference in the current sales price (for which the security is
sold) and lower price that the Trust pays for the similar security at the end date as well as the
interest earned on the cash proceeds of the initial sale.

Mortgage Pass-Throughs: Mortgage-backed securities issued by Fannie Mae, Freddie Mac or Ginnie Mae.

Multiple-Class Pass-Throughs: Collateralized Mortgage Obligations.

Net Asset Value (NAV): Net asset value is the total market value of all securities held by the Trust, plus income
accrued on its investments, minus any liabilities including accrued expenses, divided by the
total number of outstanding shares. It is the underlying value of a single share on a given day.
Net asset value for the Trust is calculated weekly and published in Barron's on Saturday and The
Wall Street Journal each Monday.

Principal-Only Securities (P/O): Mortgage securities that receive only the principal cash flows from an underlying pool of
mortgage loans or underlying pass-through securities. Also known as a Strip.

Project Loans: Mortgages for multi-family, low- to middle-income housing.

Premium: When a fund's stock price is greater than its net asset value, the fund is said to be trading at
a premium.

REMIC: A real estate mortgage investment conduit is a multiple-class security backed by mortgage-
backed securities or whole mortgage loans and formed as a trust, corporation, partnership, or
segregated pool of assets that elects to be treated as a REMIC for federal tax purposes.
Generally, Fannie Mae REMICs are formed as trusts and are backed by mortgage-backed securities.

Residuals: Securities issued in connection with collateralized mortgage obligations that generally
represent the excess cash flow from the mortgage assets underlying the CMO after payment of
principal and interest on the other CMO securities and related administrative expenses.

Reverse Repurchase Agreements: In a reverse repurchase agreement, the Trust sells securities and agrees to repurchase them at
a mutually agreed date and price. During this time, the Trust continues to receive the principal
and interest payments from that security. At the end of the term, the Trust receives the same
securities that were sold for the same initial dollar amount plus interest on the cash proceeds
of the initial sale.

Strips: Arrangements in which a pool of assets is separated into two classes that receive different
proportions of the interest and principal distribution from underlying mortgage-backed
securities. IO's and PO's are examples of strips.
</TABLE>

22
<PAGE>

- --------------------------------------------------------------------------------
BlackRock Financial Management, Inc.
Summary of Closed-End Funds
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Taxable Trusts
- --------------------------------------------------------------------------------------------
Stock Maturity
Perpetual Trusts Symbol Date
------ --------
<S> <C> <C>
The BlackRock Income Trust Inc. BKT N/A
The BlackRock North American Government Income Trust Inc. BNA N/A

Term Trusts
The BlackRock 1998 Term Trust Inc. BBT 12/98
The BlackRock 1999 Term Trust Inc. BNN 12/99
The BlackRock Target Term Trust Inc. BTT 12/00
The BlackRock 2001 Term Trust Inc. BLK 06/01
The BlackRock Strategic Term Trust Inc. BGT 12/02
The BlackRock Investment Quality Term Trust Inc. BQT 12/04
The BlackRock Advantage Term Trust Inc. BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust Inc. BCT 12/09

Tax-Exempt Trusts
- ---------------------------------------------------------------------------------------------
Stock Maturity
Perpetual Trusts Symbol Date
------ --------
The BlackRock Investment Quality Municipal Trust Inc. BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. RAA N/A
The BlackRock Florida Investment Quality Municipal Trust RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. RNY N/A

Term Trusts

The BlackRock Municipal Target Term Trust Inc. BMN 12/06
The BlackRock Insured Municipal 2008 Term Trust Inc. BRM 12/08
The BlackRock California Insured Municipal 2008 Term Trust Inc. BFC 12/08
The BlackRock Florida Insured Municipal 2008 Term Trust BRF 12/08
The BlackRock New York Insured Municipal 2008 Term Trust Inc. BLN 12/08
The BlackRock Insured Municipal Term Trust Inc. BMT 12/10

</TABLE>

If you would like further information
please call BlackRock at (800) 227-7BFM (7236)
or consult with your financial advisor.

23
<PAGE>

Left Column

BlackRock

Directors
Laurence D. Fink, Chairman
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Grosfeld
James Clayburn La Force, Jr.
Ralph L. Schlosstein

Officers
Ralph L. Schlosstein, President
Scott Amero, Vice President
Keith T. Anderson, Vice President
Michael C. Huebsch, Vice President
Robert S. Kapito, Vice President
Richard M. Shea, Vice President/Tax
Henry Gabbay, Treasurer
James Kong, Assistant Treasurer
Kevin J. Mahoney, Assistant Treasurer
Karen H. Sabath, Secretary

Investment Adviser
BlackRock Financial Management, Inc.
345 Park Avenue
New York, NY 10154
(800) 227-7BFM

Administrator
Prudential Mutual Fund Management, Inc.
One Seaport Plaza
New York, NY 10292

Custodian and Transfer Agent
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
(800) 699-1BFM

Independent Auditors
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281-1434

Legal Counsel
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, NY 10022

This report is for shareholder information.
This is not a prospectus intended for use in
the purchase or sale of any securities.
The BlackRock Income Trust Inc.
c/o Prudential Mutual Fund Management, Inc.
32nd floor
One Seaport Plaza
New York, NY 10292
(800) 227-7BFM
09247F-10-0

Right Column

The BlackRock
Income
Trust Inc.
- ------------------------------------------------
Annual Report
October 31, 1995