BLACKROCK INCOME TRUST INC, N-30D, 1997-06-30

BLACKROCK INCOME TRUST INC
N-30D, 1997-06-30

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THE BLACKROCK INCOME TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISER
- --------------------------------------------------------------------------------

May 30, 1997

Dear Trust Shareholder:

Domestic bond investors have experienced higher interest rates in the face
of a resilient stock market and stronger economic growth over the past six
months. However, as a pre-emptive strike at inflation, the Federal Reserve
raised the Federal funds target rate one-quarter of a point at their March
policy meeting.

BlackRock expects that both production and consumption will continue to be
strong in the coming months. However, the combined effects of higher interest
rates and already rising consumer debt should lead to more moderate economic
growth later in 1997. Despite inflation remaining relatively low, strong
consumer confidence and robust industrial activity suggest that the potential
for future inflation exists. Therefore, BlackRock currently maintains a cautious
fundamental outlook for bonds. While we believe that one or two additional
interest rate increases by the Fed may still be necessary to temper economic
growth, it does not appear that 1997 will be a repeat of the dramatic rise in
short term interest rates that the market witnessed in 1994.

This report provides the Trust's portfolio managers an opportunity to
provide you with detailed market commentary and review the major themes that
have occurred in the portfolio over the past six months. We hope that you find
this report informative and look forward to serving your financial needs in the
future.

Sincerely,

/s/ Laurence D. Fink /s/ Ralph L. Schlosstein
- -------------------- ------------------------
Laurence D. Fink Ralph L. Schlosstein
Chairman President

<PAGE>

May 30, 1997

Dear Shareholder:

We are pleased to present the semi-annual report for The BlackRock Income
Trust Inc. ("the Trust") for the six months ended April 30, 1997. We would like
to take this opportunity to review the Trust's stock price and net asset value
(NAV) performance, summarize market developments and discuss recent portfolio
management activity.

The Trust is a diversified, actively managed closed-end bond fund whose
shares are traded on the New York Stock Exchange under the symbol "BKT". The
Trust's 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 issued or
guaranteed by the U.S. government or its agencies or rated "AAA" by Standard
&Poor's or "Aaa" Moody's (up to 5% can be unrated and deemed by the Adviser to
be of equivalent credit quality); the remaining 15% of the Trust's assets must
be rated at least "AA" by Standard &Poor's or "Aa"by Moody's at the time of
purchase.

The table below summarizes the performance of the Trust's stock price and
NAVover the period:

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
4/30/97 10/31/96 CHANGE HIGH LOW
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
STOCK PRICE $6.50 $6.25 4.0% $6.625 $6.25
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NET ASSET VALUE (NAV) $7.64 $7.61 0.39% $7.67 $7.50
- -------------------------------------------------------------------------------------------------------

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10-YEAR U.S. TREASURY NOTE 6.71% 6.36% +35pb 6.97% 6.04%
- -------------------------------------------------------------------------------------------------------
</TABLE>

THE FIXED INCOME MARKETS

Stronger economic data and accompanying inflation fears caused U.S.
Treasury yields to rise for the majority of the six month period between
November 1, 1996 and April 30, 1997. After reaching their lowest levels since
March of 1996, Treasury yields began rising in December after Federal Reserve
Chairman Alan Greenspan's mention of "irrational exuberance" in the financial
markets. Data indicating continued economic strength characterized the first
four months of 1997. Although inflationary measures such as commodity, producer
and consumer prices remained relatively stable, labor markets continued to
strengthen. For example, over 700,000 new jobs were created in the first
quarter.

Therefore, although inflation was largely nonexistent, the combination of
a robust economy, tight labor markets and strong consumer confidence led the
Federal Reserve to raise the Federal funds rate by 25 basis points (1/4%) at
their March 25th monetary policy meeting to subdue this growth and pre-emptively
fight inflation. Hints of moderating economic growth during April proved to be a
more accommodating environment for bonds, as Treasury yields fell towards
month-end in response to a strong dollar, rising stock market and optimism for a
balanced-budget agreement.

For the six month period, the yield of the 10-year Treasury note rose
0.37% to end April 1997 at 6.71%. However, the 10-year's yield reached a high of
6.98% in mid-April before falling the last two weeks of the month as the
likelihood decreased for another interest rate hike by the Federal Reserve at
their May meeting.

<PAGE>

Over the six month period, spread product (bonds that offer yield spreads
over Treasuries) outperformed Treasuries. In particular, the market for
mortgage-backed securities ("MBS") posted good relative performance primarily
due to low interest rate volatility and subdued refinancing concerns. Over the
period, the MBSmarket as measured by the Lehman Mortgage Index returned 2.63%
versus the Treasury market's return (measured by the Merrill Lynch 7-10 year
Treasury Index) of 0.76%. The Trust's total return performance of 4.15% over the
six month period underscored the significant outperformance of mortgages versus
the broader bond market.

THE TRUST'S PORTFOLIO AND INVESTMENT STRATEGY

BlackRock actively manages the Trust's portfolio holdings consistent with
BlackRock's overall market outlook and the Trust's investment objectives. The
Trust is managed to maintain an interest rate sensitivity (or duration)
resembling that of the Salomon Brothers Mortgage Index; this means that the
portfolio's NAV will change similarly to the price of the Index given a change
in interest rates. The following chart compares the Trust's current and October
31, 1996 asset composition.

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COMPOSITION APRIL 30, 1997 OCTOBER 31, 1996
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Stripped Mortgage-Backed Securities 23% 17%
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Adjustable & Inverse Floating Rate Mortgages 21% 16%
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FHA Project Loans 12% 14%
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U.S. Government Securities 12% 14%
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Mortgage Pass-Throughs 9% 11%
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Non-Agency Multiple Class Mortgage Pass-Throughs 8% 7%
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Agency Multiple Class Mortgage Pass-Throughs 7% 14%
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Asset-Backed Securities 4% 3%
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Commercial Mortgage-Backed Securities 3% 3%
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CMO Residuals 1% 1%
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We look forward to continuing to manage the Trust 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,

/s/ Robert Kapito /s/ Michael P. Lustig
- ----------------------------------- ------------------------------------
Robert Kapito Michael P. Lustig
Vice Chairman and Portfolio Manager Principal and Portfolio Manager
BlackRock Financial Management, Inc. BlackRock Financial Management, Inc.

<PAGE>

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THE BLACKROCK INCOME TRUST INC.
- --------------------------------------------------------------------------------
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 4/30/97: $6.50
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Net Asset Value as of 4/30/97: $7.64
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Yield on Closing Stock Price as of 4/30/97 ($6.50)1: 8.65%
- --------------------------------------------------------------------------------
Current Monthly Distribution per Share2: $0.046875
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Current Annualized Distribution per Share2: $0.56250
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- -------------
1 Yield on Closing Stock Price is calculated by dividing the current annualized
distribution per share by the closing stock price per share.
2 The distribution is not constant and is subject to change.

<PAGE>

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THE BLACKROCK INCOME TRUST INC.
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
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S&P/ PRINCIPAL
MOODY'S AMOUNT VALUE
RATING* (000) DESCRIPTION (NOTE 1)
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LONG-TERM INVESTMENTS--144.8%
MORTGAGE PASS-THROUGHS--30.8%
Federal Home Loan Mortgage
Corporation,
$ 496 6.50%, 4/01/26 .......................... $ 511,344
122 7.00%, 8/01/26 - 12/01/26 ............... 118,849
5,910+ 7.50%, 7/01/07 - 2/01/23 ................ 5,943,866
1,335++ 8.00%, 11/01/15 ......................... 1,377,915
2,370++ 8.50%, 3/01/06 - 3/01/08, 15 year ....... 2,460,746
857 8.50%, 6/01/11 .......................... 884,940
4,024 9.00%, 9/01/20 .......................... 4,283,249
Federal Housing Administration,
1,904 Altercare Bucyrus, 8.25%, 6/25/34 ....... 1,953,254
2,318 Beachwood Manor, 8.25%, 10/01/34 ........ 2,378,182
4,275 Brookville, 7.50%, 8/01/28 .............. 4,195,745
3,738 Country Estates, 8.375%, 1/01/35 ........ 3,833,970
1,512 Elkton Care Center, 7.30%, 6/01/35 ...... 1,460,423
GMAC,
6,280 Series 33, 7.43%, 9/01/21 .............. 6,306,481
2,177 Series 46, 7.43%, 1/01/22 .............. 2,183,227
900 Series 48, 7.43%, 6/01/22 .............. 902,564
498 Series 51, 7.43%, 2/01/23 .............. 499,837
7,875 Series 56, 7.43%, 11/01/22 ............. 7,900,809
1,276 Merrill,
Series 54, 7.43%, 5/15/23 .............. 1,278,084
1,408 Series 95, 7.43%, 3/01/22 .............. 1,411,616
1,255 Middlesex, 8.625%, 9/01/34 .............. 1,308,158
1,680 Overlook Green South, 7.50%, 9/01/34 .... 1,690,419
4,726 Parkside, 7.30%, 2/01/13 ................ 4,655,598
1,909 Providence Apartments,
7.25%, 12/01/34 ........................ 1,836,358
Reilly,
1,122 Series 41, 8.28%, 3/01/20 .............. 1,163,216
2,333 Retreat at Windmere, 7.375%, 11/01/34 ... 2,267,100
2,111 Rosewood, 7.875%, 12/01/34 .............. 2,123,128
1,518 Senaca Hills, 8.525%, 8/01/34 ........... 1,575,893
1,476 St. Camillus Nursing, 7.875%, 5/01/35 ... 1,485,189
2,318 Summit Place, 7.90%, 11/01/34 ........... 2,335,348
2,872 Tuttle Grove, 7.25%, 10/01/35 ........... 2,763,339
USGI,
4,380 Polaris 982, 7.43%, 11/01/21 ........... 4,395,299
931 Series 87, 7.43%, 12/01/22 ............. 930,718
4,991 Series 99, 7.43%, 10/01/23 ............. 4,994,415
2,772 Series 1003, 7.43%, 3/01/24 ............ 2,659,526
2,777 Series 6302, 7.43%, 12/01/21 ........... 2,785,382
3,610 Waterford, 8.625%, 7/25/27 .............. 3,761,488
1,413 Whitehall, 8.25%, 5/25/35 ............... 1,449,526
7,099 Yorkville 6094, 7.43%, 6/01/21 .......... 7,120,360
Federal National Mortgage Association,
2,500 Series 1994-M1, Class B,
6.50%, 10/25/03, Multifamily ............ 2,430,469
1,581+ 7.00%, 11/01/08 ......................... 1,582,242
5,803+ 7.50%, 11/01/14 - 9/01/23 ............... 5,815,003
993++ 7.785%, 1/01/01, 7 year Multifamily ..... 1,018,777
6,647@+ + 8.00%, 5/01/08 - 5/01/22 ................ 6,789,020
731 9.317%, 6/01/19, 10 year Multifamily .... 788,881
593+ 9.484%, 7/01/19, Multifamily ............ 641,539
1,455+ 9.497%, 6/01/24, Multifamily ............ 1,580,451
231 9.50%, 1/01/19 - 6/01/20 ................ 249,000
779 9.732%, 7/01/19, 10 year Multifamily .... 853,179
Government National
Mortgage Association,
2,865 6.00%, 3/15/09 - 4/15/09, 15 year ....... 2,734,276
670 7.00%, 10/15/17 ......................... 647,965
20,518+ 7.50%, 8/15/21 - 12/15/23 ............... 20,342,778
61 8.50%, 5/15/01 - 2/15/17 ................ 63,323
1,140 9.00%, 6/15/18 - 9/15/21 ................ 1,195,715
14 9.50%, 7/15/16 .......................... 14,576
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147,932,755
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MULTIPLE CLASS MORTGAGE
Pass-Throughs--52.4%
AAA 2,100 Citicorp Mortgage Securities Inc.,
Series 1994-9, Class A4, 6/25/09 ........ 1,910,538
AAA 961 Collateralized Mortgage Obligation
Trust 13, Class Q,
1/20/03 ................................ 1,047,360
AAA 24,798++ Community Program Loan Trust,
Series 1987-A, Class A-4,
10/01/18 ............................... 21,031,813
CWMBS Incorporated, Mortgage
Certificate
AAA 3,394 Series 1993-10, Class A-8,
1/25/24 ................................ 2,711,621
AAA 6,202 Series 1994-9, Class A-16,
5/25/24 ................................ 4,372,068
AAA 8,598 G.E. Capital Mortgage Services
Incorporated, Remic Certificate 94-7
Class A-17, 2/25/09 ..................... 6,469,940
Federal Home Loan Mortgage
Corporation, Multiclass Mortgage
Participation Certificate,
27,426++ Series G-13, Class 13-PP,
5/25/21 (I) ............................ 8,304,996
3,077 Series G24, Class G24-SG,
11/25/23 (ARM) ......................... 2,116,213
7,670+ Series 120, Class 120-H,
2/15/21 ................................ 7,976,403
5,538 Series 1238, Class 1238-J,
1/15/07 ................................ 1,276,561
764 Series 1347, Class 1347-HC,
12/15/21 ............................... 583,261

See Notes to Financial Statements.

<PAGE>

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S&P/ PRINCIPAL
MOODY'S AMOUNT VALUE
RATING* (000) DESCRIPTION (NOTE 1)
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MULTIPLE CLASS MORTGAGE
PASS-THROUGHS (CONTINUED)
$ 1,000 Series 1388, Class 1388-H,
6/15/07 .................................. $ 819,940
1,034 Series 1508, Class 1508-OC,
5/15/23 (ARM) ............................ 686,479
2,000 Series 1523, Class 1523-SA,
6/15/23 (ARM) ............................ 1,319,460
2,000 Series 1526, Class 1526-SA,
6/15/23 (ARM) ............................ 1,315,625
4,152 Series 1530, Class 1530-OA,
6/15/23 (ARM) ............................ 2,546,958
2,325 Series 1534, Class 1534-NE,
6/15/23 (ARM) ............................ 2,098,190
1,093 Series 1541, Class 1541-T,
7/15/23 .................................. 876,782
3,145 Series 1559, Class 1559-WA,
7/15/22 .................................. 2,932,283
12,305++ Series 1584, Class 1584-FB,
9/15/23 (ARM) ............................ 12,735,902
1,804 Series 1596, Class 1596-SB,
12/15/12 (ARM) ........................... 1,314,575
2,356 Series 1609, Class 1609-LE,
11/15/23 (ARM) ........................... 1,645,674
1,052 Series 1609, Class 1609-KA,
11/15/23 (ARM) ........................... 1,000,104
5,050 Series 1619, Class 1619-SC,
11/15/23 (ARM) ........................... 3,964,153
14,289++ Series 1620, Class 1620-S,
11/15/23 (ARM) ........................... 9,760,976
6,387+ Series 1621, Class 1621-SB,
10/15/21 (ARM) ........................... 4,980,713
5,038 Series 1627, Class 1627-SC,
12/15/23 (ARM) ........................... 2,449,544
6,543++ Series 1627, Class 1627-S,
12/15/23 (ARM) ........................... 3,857,687
3,084 Series 1629, Class 1629-OD,
12/15/23 (ARM) ........................... 1,564,984
4,805 Series 1633, Class 1633-SB,
6/15/23 (ARM) ............................ 3,748,083
4,000 Series 1637, Class 1637-TA,
7/15/23 (ARM) ............................ 2,887,320
5,499++ Series 1673, Class 1673-SC,
10/15/22 (ARM) ........................... 4,055,296
704 Series 1686, Class 1686-A,
2/15/24 .................................. 587,664
4,520 Series 1686, Class 1686-SB,
2/15/24 (ARM) ............................ 2,960,804
3,799+ Series 1710, Class 1710-GF,
4/15/24 (ARM) ............................ 3,652,936
75,000 Series 1914, Class 1914-PC,
12/15/11 (I) ............................. 2,167,969
Federal National Mortgage Association,
REMIC Pass-Through Certificates,
4,201 Trust 1988-16, Class16-B,
6/25/18 .................................. 4,425,252
1,639++ Trust 1990-12, Class 12-G,
2/25/20 .................................. 1,391,118
17,019 Trust 1991-G15, Class 15-S,
6/25/21 (ARM) ............................ 3,488,989
3,069 Trust 1991-38, Class 38-F,
4/25/21 (ARM) ............................ 3,214,149
2,597@@ Trust 1991-38, Class 38-SA,
4/25/21 (ARM) ............................ 2,588,551
3,207 Trust 1991-87, Class 87-S,
8/25/21 (ARM) ............................ 3,152,692
1,576 TRUST G1992-12, CLASS 12- C,
2/25/22 (I) .............................. 545,936
7,770 Trust 1992-187, Class 187-JA,
10/25/06 (I) ............................. 726,452
6,000+ Trust 1992-200, Class 200-K,
4/25/22 (ARM) ............................ 5,919,000
768 Trust G1993-27, Class 27-SB,
8/25/23 (ARM) ............................ 460,222
1,504 Trust 1993-50, Class 50-SH,
1/25/23 (ARM) ............................ 1,220,757
2,575 Trust 1993-53, Class 53-M,
4/25/23 .................................. 2,145,717
2,573 Trust 1993-54, Class 54-SD,
4/25/23 (ARM) ............................ 1,977,923
2,137 Trust 1993-82, Class 82-SB,
5/25/23 (ARM) ............................ 1,172,783
3,105 Trust 1993-87, Class 87-L,
6/25/23 .................................. 2,976,388
864 Trust 1993-97, Class 97-SA,
5/25/23 .................................. 736,867
1,034 Trust 1993-116, Class 116-SB,
7/25/23 (ARM) ............................ 710,905
3,765++ Trust 1993-119, Class 119-SH,
7/25/23 (ARM) ............................ 2,549,055
2,000 Trust 1993-120, Class 120-SN,
7/25/23 (ARM) ............................ 1,198,860
2,793 Trust 1993-139, Class 139-SJ,
8/25/23 (ARM) ............................ 1,546,410
790 Trust 1993-167, Class 167-SA,
9/25/23 (ARM) ............................ 727,364
6,000 Trust 1993-169, Class 169-SC,
3/25/23 (ARM) ............................ 3,737,100
2,631 Trust 1993-178, Class 178-A,
9/25/23 .................................. 2,318,674
8,464++ Trust 1993-178, Class 178-SA,
9/25/23 (ARM) ............................ 5,099,704
1,346++ Trust 1993-179, Class 179-VC,
10/25/21 (ARM) ........................... 810,926
2,783 Trust 1993-183, Class 183-SE,
10/25/23 (ARM) ........................... 1,931,014
3,314 Trust 1993-187, Class 187-S,
9/25/23 (ARM) ............................ 2,198,437
5,494 Trust 1993-202, Class 202-VS,
2/25/23 (ARM) ............................ 5,238,024
1,749 Trust 1993-223, Class 223-SJ,
8/25/08 (ARM) ............................ 1,591,210
1,000 Trust 1993-223, Class 223-SJ,
12/25/23 (ARM) ........................... 602,460

See Notes to Financial Statements.

<PAGE>

$ 1,988 Trust 1993-224, Class 224-S,
11/25/23 (ARM) ...........................$ 1,217,297
1,908 Trust 1993-224, Class 224-SH,
11/25/23 (ARM) ........................... 1,243,155
5,643 Trust 1993-248, Class 248-FB,
9/25/23 (ARM) ............................ 5,022,704
1,401 Trust 1993-256, CLASS 256-F,
11/25/23 (ARM) ........................... 1,173,589
19,135++ Trust G1994-6, Class 6-PK,
11/17/22 (I) ............................. 3,110,949
3,777 Trust 1994-14, Class 14-S,
10/25/23 (ARM) ........................... 1,793,942
3,012 Trust 1994-19, Class 19-SB,
1/25/24 (ARM) ............................ 1,218,538
387 Trust 1994-27, Class 27-SE,
3/25/23 (ARM) ............................ 367,672
5,294 Trust 1994-29, Class 29-SD,
7/25/23 (ARM) ............................ 2,997,847
10,623 Trust 1994-59, Class 59-SB,
3/25/24 (ARM) ............................ 5,152,374
14,300+ Trust 1996-14, Class 14-AB,
8/25/23 (P) .............................. 4,222,969
6,797 Trust 1996-14, Class 14-M,
10/25/21 ................................. 5,410,067
16,000 Trust 1997-30, Class 30-I,
1/25/23 (I) .............................. 4,940,000
Prudential Home Mortgage Securities Co.,
Mortgage Pass-Through Certificates,
Aaa 743 Series 1993-43, Class A-16,
10/25/23 (ARM) ........................... 563,675
Aaa 2,500 Series 1993-48, Class A-8,
12/25/08 (ARM) ........................... 1,800,000
AAA 355 Resolution Trust Corporation,
Mortgage Pass-Through Certificates,
Series 1992-2, Class B-3, 11/25/21 ........ 356,419
AAA 10,542 Salomon Capital Access Corporation,
Collateralized Mortgage Obligations,
Series 1986-1, Class C, 9/01/15 ........... 10,739,400
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251,464,411
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COMMERCIAL MORTGAGE-BACKED
SECURITIES -- 3.7%
AAA 140,000 KPAC, Series 1994-C1,
Zero Coupon, 2/01/01 ...................... 1,400
AAA 6,000 ML Mortgage Investments,
Series 1996-C1, Class A-3,
4/25/28 ................................... 6,024,781
AAA 10,250 NYC Mortgage Loan Trust,
Series 1996, Class A-2, 144A,
6.75%, 6/25/11 ........................... 9,681,445
AA 2,000 PaineWebber Mortgage Acceptance
Corporation IV,
Series 1995-M1, Class B,
6.95%, 1/15/07 ........................... 1,985,000
-----------
17,692,626
-----------
ASSET-BACKED SECURITIES -- 5.6%
Chase Manhattan Grantor Trust,
AAA $ 8,788@ Series 1996-Class A, Automobile
Loan Pass-Through,
5.20%, 2/15/02 ........................... 8,681,237
AAA 7,661 Series 2002-96B, Class A, 6.61%,
9/15/02 .................................. 7,679,665
AAA 10,000 First USA Credit Card Master Trust,
Series 1994-6,
Class A, 5.82%, 10/15/03 ................. 10,100,000
-----------
26,460,902
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STRIPPED MORTGAGE-BACKED
SECURITIES -- 33.5%
Aaa 1,040 Chase Mortgage Finance Corporation,
Mortgage Pass-Through Certificates,
Series 1994-A, Class AP,
1/25/10 (P/O) ............................ 762,161
Collateralized Mortgage Obligation,
AAA 1,252 Trust 36, Class A, 10/25/17 (P/O) ......... 929,980
AAA 1,343 Trust 29, Class A, 5/23/17 (P/O) .......... 998,259
DBL, Collateralized Mortgage Obligation,
AAA 497 Trust K, Class K-1, 9/23/17 (P/O) ......... 423,541
AAA 5,127 Trust V, Class V-1, 9/01/18 (P/O) ......... 3,764,946
Federal Home Loan Mortgage
Corporation,
2,319 Series 1003, Class 1003-O,
10/15/20 (I/O) ........................... 788,390
31,223 Series 1353, Class 1353-S,
8/15/07 (I/O) ............................ 3,590,661
24,803+ Series 1366, Class 1366-KA,
9/15/07 (I/O) ............................ 8,137,741
673 Series 1418, Class 1418-M,
11/15/22 (P/O) ........................... 221,297
1,652 Series 1473, Class 1473-JA,
2/15/05 (I/O) ............................ 119,546
19,685 Series 1632, Class 1632-S,
4/15/23 (I/O) ............................ 676,754
9,461++ Series 1690, Class 1690-B,
11/15/23 (P/O) ........................... 3,459,107
8,067 Series 1801, Class 1801-SB,
8/15/23 (I/O) ............................ 1,096,588
32,000 Series 1809, Class 1809-SC,
12/15/23 (I/O) ........................... 3,220,000
14,069+ SERIES 1828, CLASS 1828-A,
5/15/24 (P/O) ............................ 6,990,509
8,995+ Series 1857, Class 1857-PB
12/15/08 (P/O) ........................... 7,004,564
4,828 Series 1917, Class 1917-AS,
5/15/08 (I/O) ............................ 1,060,234
41,104 Series 1930, Class 1930-SM,
9/15/23 (I/O) ............................ 603,712
17,938 Series 1946, Class 1946-SG,
3/15/24 (I/O) ............................ 2,253,506

See Notes to Financial Statements.

<PAGE>

Federal National Mortgage Association,
$ 4,716 Trust A, Class A-2,
8/01/10 (I/O) ............................ $ 966,919
1,250 Trust G50, Class 50-G,
12/25/21 (I/O) ........................... 615,774
7,659 Trust 225, Class 1,
2/01/23 (P/O) ............................ 5,595,550
31,158++ Trust G-233, Class 2,
8/01/23 (I/O) ............................ 10,851,827
13,850 Trust 267, Class 1,
10/01/24 (P/O) ........................... 9,579,604
11,063 Trust 274, Class 1,
10/01/25 (P/O) ........................... 7,692,011
4,854 Trust G1992-34, Class 34-A,
4/25/22 (I/O) ............................ 1,475,992
3,423 Trust 1992-43,Class 43-E,
10/25/05 (I/O) ........................... 511,053
23,290 Trust G1992-60, Class 60-SB,
10/25/22 (I/O) ........................... 902,953
11,616 Trust 1992-68, Class 68-K,
11/25/21 (I/O) ........................... 1,543,098
43,735 Trust 1992-216, Class 216-S,
12/25/22 (I/O) ........................... 4,155,238
72,112 Trust 1993-2, Class 2-KB,
5/25/23 (I/O) ............................ 6,895,687
1,428 Trust 1993-82, Class 82-SC,
1/25/23 (P/O) ............................ 392,838
7,152++ Trust 1993-159, Class 159-C,
7/25/23 (P/O) ............................ 3,432,883
14,836++ Trust 1993-213, Class 213-H,
9/25/23 (P/O) ............................ 11,506,736
5,195 Trust 1994-16, Class 16-E,
11/25/23 (P/O) ........................... 2,883,455
4,956 Trust 1994-57, Class 57-C,
1/25/24 (P/O) ............................ 3,542,126
22,697+ TRUST 1994-61, CLASS 61-DB,
3/25/24 (P/O) ............................ 14,258,733
23,000 Trust 1994-77, Class 77-SB,
4/25/24 (I/O) ............................ 2,077,187
141,363+ Trust 1996-14, Class 14-PE,
10/25/03 (I/O) ........................... 4,417,594
9,963 Trust 1996-38, Class 38-E,
8/25/23 (P/O) ............................ 3,873,117
2,302 Trust 1996-56, Class 56-E,
4/25/23 (P/O) ............................ 1,238,901
4,200 Trust 1996-66, Class 66-AB,
1/25/24 (P/O) ............................ 2,562,000
12,371 Trust 1996-68, Class 68-SC,
1/25/24 (I/O) ............................ 1,302,809
80,441 Trust 1997-1, Class 1-S,
2/18/04 (I/O) ............................ 2,790,306
115,620 Trust 1997-37, Class 37-SE,
11/3/23 (I/O) ............................ 4,010,555
AAA 1,393 First Boston Mortgage Securities
Corporation, Series 1987-C,
Class Z, 4/25/17 (I/O) ................... 515,732
Housing Security Incorporated,
AAA 452 Series 1992-EB, Class B-8,
9/25/22 (P/O) ............................ 262,061
AA 637 Series 1993-D, Class D-8,
6/25/23 (P/O) ............................ 368,926
Kidder Peabody Acceptance Corporation,
AAA 1,794 Series 87, Class B-2,
4/22/18 (I/O) ............................ 487,526
AAA 1,794 Series B, Class B-1,
4/22/18 (P/O) ............................ 1,366,878
AAA 477 Prudential Securities, Inc. Collateralized
Mortgage Obligation, Trust 15,
Class 1G, 5/20/21 (I/O) .................. 600,954
AAA 5,306 Structured Asset Securities Corporation,
Series 1991-2, Class GA,
12/20/21 (I/O) ........................... 1,386,870
AAA 987 Structured Mortgage Asset Trust,
Series 1993-3C, Class CX,
4/25/24 (P/O) ............................ 568,339
-----------
160,833,728
-----------

U.S. GOVERNMENT SECURITIES--17.3%
Small Business Administration,
4,274 Series 1995, 10-C,
7.35%, 8/01/05 ........................... 4,260,947
4,689 Series 1996, 20-E,
7.60%, 5/01/16 ........................... 4,763,805
3,939 Series 1996, 20-F,
7.55%, 6/01/16 ........................... 3,990,066
3,944 Series 1996, 20-H,
7.25%, 8/01/16 ........................... 3,934,784
7,000 Series 1996, 20-K,
6.95%, 11/01/16 .......................... 6,888,398
4,240 Series 1996, 20-G,
7.70%, 7/01/16 ........................... 4,328,489
3,000 Series 1997, 20-C,
7.15%, 3/01/17 ........................... 2,994,688
52,891++ United States Treasury Notes,
3.375%, 1/15/07 (TIPS) ................... 52,048,030
----------
83,209,207
----------

CMO RESIDUALS***--1.5%
AAA 5,435 American Housing Trust III, Senior
Mortgage Pass-Through Certificates,
Series 1, Class 4, (REMIC)**, 3/25/19 ..... 845,915
AAA 353 American Housing Trust VII, Senior
Mortgage Pass-Through Certificates,
Series A, Class R, (REMIC), 11/25/20 ...... 2,142,250
AAA 25 Collateralized Mortgage Obligation,
Trust 13**, 1/20/03 ....................... 541,360
AAA 4 Collateralized Mortgage Securities
Corporation, Series 1990-3,
Class 3-R, (REMIC), 5/25/20 ............... 271,242

See Notes to Financial Statements

<PAGE>

AAA $ 45 FBC Mortgage Securities Trust 16,
Variable Rate Collateralized Mortgage
Obligation, Series A**, 7/01/17 ......... $ 713,570
AAA 3,115 FBC Mortgage Securities Trust 19,
Variable Rate Collateralized Mortgage
Obligation, Series A**, 10/20/18 ........ 221,900
AAA 7,310 ML Collateralized Mortgage Obligations,
Trust V#, 3/20/18 ....................... 2,017,836
AAA 10 P-B Collateralized Mortgage Obligation,
Trust 8, Class 8-H, (REMIC)**, 3/01/19 .. 197,500
AAA 43 PaineWebber, Collateralized Mortgage
Obligation, Series N, Class 7
(REMIC), 1/01/19 ........................ 308,360
----------
7,259,933
----------

Total Long-Term Investments
(cost $705,011,236) ....................... 694,853,562
-----------

SHORT-TERM INVESTMENTS--1.7%
REPURCHASE AGREEMENT--1.4%
6,955 State Street Bank & Trust
Repo, 5.15%, dated 4/30/97,
due 5/1/97 in the amount of
$6,955,995 (cost 6,955,000
collateralized by $7,025,000
U.S. Treasury Note, 5.75% due
12/31/98 value including
accrued interest $7,306,000) ............. 6,955,000

CONTRACTS #
PUT OPTIONS PURCHASED--0.3%
25 U.S. Treasury Note, 6.25% 1/31/02
@ 100.375 expiring 6/17/97 ............... 437,500
50 Interest Rate Swap,
3 month Libor minus 8.5%, 6/15/11
expiring 6/13/01 ......................... 1,030,445
----------
Total Put options purchased
(cost $1,335,234) ........................ 1,467,945
----------
Total short-term investments
(cost $8,290,234) ........................ 8,422,945
----------
Total investments before
investment sold short--146.5%
(cost $713,301,470) ..................... 703,276,507

INVESTMENT SOLD SHORT--(0.2%)
(1,000) United States Treasury Bonds,
6.625% 2/15/27
(proceeds $937,841) ...................... (959,530)
-----------
Total investments, net of
short sales--146.3%
(cost $711,268,630) ...................... 702,316,977
Liabilities in excess of other--
assets--(46.3%) ............................ (222,312,735)
------------

NET ASSETS--100% ............... $480,004,242
============

- -------------
* Using the higher of Standard & Poor's or Moody's rating.
** Private placements restricted as to resale.
*** Illiquid securities representing 1.0% of portfolio assets.
+ $106,376,195 (Partial) principal amount pledged as collateral for reverse
repurchase agreements.
++ Entire principal amount pledged as collateral for reverse repurchase
agreements.
@ $9,256,109 (Partial) principal amount pledged as collateral for futures
transactions.
@@ Entire principal amount pledged as collateral for futures transactions.
# One Contract equals 100,000 face value.

- --------------------------------------------------------------------------------
KEY TO ABBREVIATIONS
ARM -- Adjustable Rate Mortgage.
CMO -- Collateralized Mortgage Obligation.
I -- Denotes a CMOwith 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.
TIPS -- Treasury Inflation Protection Securities.
- --------------------------------------------------------------------------------

See Notes to Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INCOME TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $713,301,470) (Note 1) ........... $703,276,507
Receivable for investments sold .............................. 27,492,146
Interest receivable .......................................... 6,524,557
Deposit with brokers as collateral for investments
sold short (Note 1) ........................................ 963,750
------------
738,256,960
------------

LIABILITIES
Bank overdraft ............................................... 47,194
Reverse repurchase agreements (Note 4) ....................... 226,780,750
Payable for investments purchased ............................ 26,714,964
Unrealized depreciation on interest rate caps
(Notes 1 & 3) .............................................. 1,255,172
Investment sold short at value
(proceeds $937,841) (Note 1) ............................... 959,530
Due to broker-variation margin ............................... 510,165
Advisory fee payable (Note 2) ................................ 254,246
Dividends payable ............................................ 239,552
Unrealized depreciation on interest rate swaps
(Note 1) ................................................... 382,324
Administration fee payable (Note 2) .......................... 78,230
Interest payable ............................................. 13,726
Other accrued expenses ....................................... 1,016,865
------------
258,252,718
------------
NET ASSETS ................................................... $480,004,242
============
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
Distributions in excess of net investment income ........... (1,183,884)
Accumulated net realized losses ............................ (69,830,998)
Net unrealized depreciation ................................ (12,965,144)
------------
Net assets, April 30, 1997 ................................. $480,004,242
============
Net asset value per share:
($480,004,242 / 62,849,878 shares of
common stock issued and outstanding) ....................... $7.64
=====

- --------------------------------------------------------------------------------
THE BLACKROCK INCOME TRUST INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest (net of premium amortization of $7,065,805
and interest expense of $5,473,405) ........................ $ 21,479,983
------------

Expenses
Investment advisory ........................................ 1,542,913
Administration ............................................. 474,743
Reports to shareholders .................................... 147,000
Transfer agent ............................................. 68,000
Custodian .................................................. 54,000
Directors .................................................. 37,000
Audit ...................................................... 35,000
Legal ...................................................... 12,500
Miscellaneous .............................................. 93,880
------------
Total operating expenses ................................. 2,465,036
------------
Net investment income ...................................... 19,014,947
------------

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTE 3)
Net realized gain
Investments ................................................ 12,848,531
Futures .................................................... 4,552,841
Options .................................................... 350,000
Short sales ................................................ 1,142,983
------------
18,894,355
------------
Net change in unrealized appreciation/(depreciation)
Investments ................................................ (22,945,676)
Futures .................................................... 4,653,384
Short sales ................................................ (21,689)
------------
(18,313,981)
------------
Net gain on investments .................................... 580,374
------------

NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .................................... $ 19,595,321
============

See Notes to Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------

THE BLACKROCK INCOME TRUST INC.
STATEMENT OF CASH FLOWS
SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH
Cash flows used for operating activities:
Interest received ......................................... $ 34,700,882
Operating expenses paid ................................... (1,980,258)
Interest expense paid ..................................... (5,805,451)
Purchase of short-term portfolio investments
including options, net .................................. (5,907,393)
Purchase of long-term portfolio investments ............... (945,414,620)
Proceeds from disposition of long-term
portfolio investments ................................... 910,465,806
Variation margin on futures ............................... 8,999,588
--------------
Net cash flows used for operating activities .............. (4,941,446)
--------------
Cash flows provided by financing activities:
Increase in reverse repurchase agreements ................. 22,343,212
Cash dividends paid ....................................... (17,704,346)
--------------
Net cash provided by financing activities ................. 4,638,866
--------------
Net decrease in cash ........................................ (302,580)
Cash at beginning of period ................................. 255,386
--------------
Cash at end of period ....................................... $ (47,194)
==============

RECONCILIATION OF NET INCREASE IN NET
ASSETS TO NET CASH USED FOR
OPERATING ACTIVITIES
Net increase in net assets resulting from
operations ................................................ $ 19,595,321
--------------
Increase in investments ..................................... (37,382,730)
Decrease in interest receivable ............................. 681,689
Increase in receivable for investments sold ................. (5,899,144)
Decrease in variation margin payable ........................ (206,637)
Net realized gains .......................................... (18,894,355)
Increase in unrealized depreciation ......................... 18,313,981
Increase in depreciation of forward swap .................... 382,324
Decrease in options ......................................... (322,666)
Increase in payable for investments sold short .............. 959,530
Increase in payable for investments purchased ............... 17,394,467
Decrease in interest payable ................................ (332,046)
Increase in deposits with brokers for
investments sold short .................................... (963,750)
Increase in depreciation of interest rate caps .............. 1,247,796
Increase in accrued expenses and other
liabilities ............................................... 484,774
--------------
Total adjustments ......................................... (24,536,767)
--------------
Net cash used for operating activities ...................... $ (4,941,446)
==============

- --------------------------------------------------------------------------------
THE BLACKROCK INCOME TRUST INC.
STATEMENTS OF CHANGES
IN NET ASSETS (UNAUDITED)
- --------------------------------------------------------------------------------
INCREASE (DECREASE)
IN NET ASSETS

SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 1997 OCTOBER 31, 1997
-------------- ----------------
Operations:

Net investment income ................... $ 19,014,947 $ 34,793,885

Net realized gain (loss) on
investments, futures,
short sales and options ............... 18,894,355 (19,446,793)

Net change in net unrealized
appreciation/depreciation on
investments, futures,
and short sales ....................... (18,313,981) 18,753,681
----------- -----------

Net increase in
net assets resulting from
operations ............................ 19,595,321 34,100,773

Dividends from net investment
income .................................. (17,676,272) (34,793,885)

Distributions in excess of net
investment income ....................... -- (2,522,559)
----------- -----------

Total increase (decrease) ............... 1,919,049 (3,215,671)

NET ASSETS

Beginning of period ..................... 478,085,193 481,300,864
----------- -----------

End of period ........................... $480,004,242 $478,085,193
============ ============

See Notes to Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INCOME TRUST INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
- --------------------------------------------------------------------------------

SIX MONTHS YEAR ENDED OCTOBER 31,
ENDED -------------------------------------------------
PER SHARE OPERATING PERFORMANCE: APRIL 30, 1997 1996 1995 1994 1993 1992
------------ ----- ----- ----- ----- -----
Net asset value, beginning of period ................ $ 7.61 $ 7.66 $ 7.25 $ 8.75 $ 8.90 $ 9.43
-------- -------- -------- -------- -------- --------
Net investment income (net of $.09, $.17,
$.22, $.10, $.09 and $.09, respectively,
of interest expense) ............................ .30 .55 .51 .73 .91 .74
Net realized and unrealized gain (losses) on
investments, short sales, futures and options ... .01 (.01) .65 (1.45) (.21) (.31)
-------- -------- -------- -------- -------- --------
Net increase (decrease) from investment operations .. .31 .54 1.16 (.72) .70 .43
-------- -------- -------- -------- -------- --------
Dividends from net investment income ................ (.28) (.55) (.66) (.78) (.85) (.83)
Distributions in excess of net investment income .... -- (.04) -- -- -- (.05)
Return of capital distribution ...................... -- -- (.09) -- -- (.08)
-------- -------- -------- -------- -------- --------
Total dividends and distributions ................. (.28) (.59) (.75) (.78) (.85) (.96)
-------- -------- -------- -------- -------- --------
Net asset value, end of period* ..................... $ 7.64 $ 7.61 $ 7.66 $ 7.25 $ 8.75 $ 8.90
======== ======== ======== ======== ======== ========

Per share market value, end of period* .............. $ 6 1/2 $ 6 1/4 $ 7 1/4 $ 6 3/8 $ 8 3/8 $ 9 1/8
======== ======== ======== ======== ======== ========
TOTAL INVESTMENT RETURN+ ............................ 8.60% (5.36%) 26.50% (15.31%) 1.01% (.55%)

RATIOS TO AVERAGE NET ASSETS:
Operating expenses# ................................. 1.04%** 1.08% 1.08% 1.10% 1.03% 1.02%
Net investment income ............................... 8.03%** 7.36% 6.85% 9.21% 10.19% 7.85%
SUPPLEMENTAL DATA:
Average net assets (in thousands) ................... $477,592 $473,056 $466,449 $496,707 $558,530 $582,984
Portfolio turnover .................................. 127% 440% 267% 223% 121% 131%
Net assets, end of period (in thousands) ............ $480,004 $478,085 $481,301 $455,651 $549,755 $555,737
Reverse repurchase agreements outstanding,
end of period (in thousands) ...................... $226,781 $204,438 $214,438 $109,286 $ 74,700 $168,150
Asset coverage++ .................................... $ 3,117 $ 3,339 $ 3,244 $ 5,169 $ 8,360 $ 4,305
</TABLE>

- --------
* NAV and market value are published in The Wall Street Journal each Monday.

** Annualized.

# The ratios of operating expenses including interest expense to average net
assets were 3.35%, 3.38%, 4.08%, 2.32%, 2.02%, and 1.97% for the periods
indicated above, respectively.

+ 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 unaudited 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.

See Notes to Financial Statements.

<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INCOME TRUST INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------

NOTE 1. ACCOUNTING The BlackRock Income Trust Inc. (the "Trust"), a
POLICIES 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.

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"
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 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.

13
<PAGE>

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.

SWAP OPTIONS: A swap option is similar to an option on securities except that
instead of purchasing the right to buy a security, the purchaser of the swap
option has the right to enter into a previously agreed upon interest rate swap
agreement at any time before the expiration of the option. Premiums received
from writing options are recorded as liabilities, and are subsequently adjusted
to the current value of the options written. Premiums received from writing
options which expire are treated as realized gains. Premiums received from
writing options which are exercised or are closed are offset against the
proceeds or amount paid on the transaction to determine the realized gain or
loss. The Trust, as writer of an option, bears the market risk of an unfavorable
change in the value of the swap contract underlying the written option. Written
interest rate swap options may be used as part of an income producing strategy
reflecting the view of the Trust's management on the direction of interest
rates.

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. Futures contracs 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"
positions so that changes in interest rates do not change the duration of the
portfolio unexpectedly.

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 six months ended April 30, 1997.

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.

<PAGE>

Rate swaps were conceived as asset/liability management tools. In more complex
swaps, the notional principal amount may decline (or 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.

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. 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.

INTEREST RATE FLOORS: Interest rate floors 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 under a specified fixed rate.

Interest rate floors are used by the Trust to both manage the duration of
the portfolio and its exposure to changes in short-term interest rates. Owning
interest rate floors 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 falling 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 floor. However, the Trust does not anticipate
non-performance by any counterparty.

SECURITIES TRANSACTIONS AND NET 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. Expenses are recorded on the
accrual basis which may require the use of certain estimates by management.

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.

ESTIMATES: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

NOTE 2. AGREEMENTS The Trust has an Investment Advisory Agreement
with BlackRock Financial Management, Inc. (the
"Adviser"), a wholly- owned corporate subsidiary of PNC Asset Management Group,
Inc., the holding company for PNC's asset management business, and an
Administration Agreement with Prudential Investments Fund Management LLC
("PIFM"), 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 PIFM 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.

<PAGE>

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

NOTE 3. PORTFOLIO Purchases and sales of SECURITIES investment
securities, other than short-term investments and
dollar rolls, for the six months ended April 30, 1997 aggregated $960,086,833
and $864,000,266, 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 April 30,
1997, the Trust held 1% of its portfolio assets in illiquid securities all of
which were securities restricted as to resale.

The Trust may from time to time purchase in the secondary market certain
mortgage pass-through securities packaged or master serviced by PNC Mortgage
Securities Corp. (or Sears Mortgage if PNC Mortgage Securities Corp. succeeded
to rights and duties of Sears) or mortgage related securities containing loans
or mortgages originated by PNC Bank or its affiliates. It is possible under
certain circumstances, PNC Mortgage Securities Corp. or its affiliates could
have interests that are in conflict with the holders of these mortgage backed
securities, and such holders could have rights against PNC Mortgage Securities
Corp. or its affiliates.

The federal income tax basis of the trust's investments at april 30, 1997
was $714,622,267 and, accordingly, net unrealized depreciation for federal
income tax purposes was $11,345,760 (gross unrealized appreciation-$16,335,950;
gross unrealized depreciation-$27,681,710).

For federal income tax purposes, the Trust has a capital loss carryforward
at October 31, 1996 of approximately $92,357,300 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, approximately $15,428,200 will expire in 2003 and $27,626,100
will expire in 2004. 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 six months ended April 30, 1997, the Trust entered into financial
futures contracts. Details of open contracts at April 30, 1997 are as follows:

VALUE AT VALUE AT UNREALIZED
NUMBER OF EXPIRATION APRIL 30, TRADE APPRECIATION/
CONTRACTS TYPE DATE 1997 DATE (DEPRECIATION)
- --------- ------ ----------- ------------- ------------- --------------

Short positions:
95 Eurodollar Mar 1998 $22,208,625 $22,272,501 $ 63,876
528 10 yr. T-Note June 1997 56,479,500 56,035,064 (444,436)
801 30 yr. T-Note June 1997 87,534,282 86,329,670 (1,204,612)
200 Eurodollar June 1997 46,899,000 46,998,000 99,000
185 Eurodollar Sept 199 743,316,563 43,422,151 105,588
155 Eurodollar Dec 199 736,222,500 36,322,088 99,588
-----------
($1,280,996)
===========

The Trust entered into four interest rate caps. Under all agreements the
Trust receives the excess, if any, of a floating rate over a fixed rate. The
Trust paid a transaction fee for each agreement. Details of the caps are as
follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NOTIONAL VALUE AT
AMOUNT FLOATING FIXED SETTLEMENT TERMINATION APRIL 30, UNREALIZED
(000) RATE RATE DATE DATE 1997 GAIN (LOSS)
----- ---- ---- ---- ---- ---- ------------
$50,000 3 month LIBOR 6.00% 2/19/97 2/19/02 $2,091,804 $ 479,804
100,000 3 month LIBOR 6.50% 4/4/97 4/4/02 3,139,744 (450,256)
100,000 3 month LIBOR 7.00% 4/18/98 4/18/03 3,202,936 (257,064)
100,000 3 month LIBOR 7.25% 4/23/98 4/23/03 1,872,344 (1,027,656)
-----------
($1,255,172)
===========
</TABLE>

Details of open interest rate swaps at April 30, 1997 are as follows:

<S> <C> <C> <C> <C> <C>
CURRENT
NOTIONAL
AMOUNT FIXED TERMINATION UNREALIZED
(000) TYPE RATE FLOATING RATE DATE DEPRECIATION
-------- ---- ---- ------------- ----------- ------------
$(20,000) Interest Rate 7.50% 1 month LIBOR 04/25/02 $ (197,999)
15,455 Forward Rate 7.235% 1 month LIBOR 06/15/11 (184,325)
----------
($382,324)
==========
</TABLE>

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.

<PAGE>

The average daily balance of reverse repurchase agreements outstanding during
the six months ended April 30, 1997 was approximately $199,418,000 at a weighted
average interest rate of approximately 5.45%. The maximum amount of reverse
repurchase agreements outstanding at any month-end during the period was
$230,006,625 as of March 31, 1997, which was 31.1% 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. The Trust did not enter into dollar rolls during the six months
ended April 30, 1997.

NOTE 5. CAPITAL There are 200 million shares of $.01 par value
common stock authorized. Of the 62,849,878 shares
outstanding at April 30,1997, the Adviser owned 10,753 shares.

NOTE 6. DIVIDENDS Since April 30, 1997, the Board of Directors of
the Trust declared dividends from undistributed
earnings of $0.046875 per share payable May 30, 1997 to shareholders of record
on May 15, 1997.

17
<PAGE>

- --------------------------------------------------------------------------------
THE BLACKROCK INCOME TRUST INC.
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.
The Annual Meeting of Trust Shareholders was held April 15, 1997 to vote
on the following matters:
(1)To elect three Directors as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
DIRECTOR CLASS TERM EXPIRING
------- ----- ----- -------
Frank J.Fabozzi ........................................ II 3 years 2000
Ralph L. Schlosstein ................................... II 3 years 2000
Walter F. Mondale ...................................... II 3 years 2000
</TABLE>

Directors whose term of office continues beyond this meeting are Andrew
F. Brimmer, Kent Dixon, Laurence D. Fink, Richard E. Cavanagh, James
Grosfeld and James Clayburn LaForce,Jr.

(2)To ratify the selection of Deloitte & Touche LLP as independent public
accountants of the Trust for the fiscal year ending October 31, 1997.
Shareholders elected the three Directors and ratified the selection of Deloitte
& Touche LLP. The results of the voting was as follows:
<TABLE>
<CAPTION>
VOTES FOR VOTES AGAINST ABSTENTIONS
-------- ----------- ----------
<S> <C> <C> <C>
Frank J. Fabozzi ...................................... 46,138,743 0 1,129,778
Ralph L.Schlosstein ................................... 46,184,901 0 1,083,620
Walter F. Mondale ..................................... 46,001,676 0 1,266,845
Ratification of Deloitte & Touche LLP ................. 46,209,011 496,004 563,506
</TABLE>

18
<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 $48 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 100 clients in the U.S. and
overseas. BlackRock is a subsidiary of PNC Asset Management Group which is a
division of PNC Bank, one of the nation's largest banking organizations.

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 seek to meet the Trust's investment objective by managing the
assets of the Trust so as 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, State Street
Bank & Trust Company. 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 331/3% 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
- --------------------------------------------------------------------------------

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.

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 instrumentalities, 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.

21
<PAGE>

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.

STRIPPED MORTGAGE
BACKED SECURITIES:

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.

22
<PAGE>

- --------------------------------------------------------------------------------
BLACKROCK FINANCIAL MANAGEMENT, INC.
SUMMARY OF CLOSED-END FUNDS
- --------------------------------------------------------------------------------

TAXABLE TRUSTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

<S> <C> <C>
MATURITY
PERPETUAL TRUSTS STOCK SYMBOL DATE
---------- ------
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
- ---------------------------------------------------------------------------------------------------------------------------

MATURITY
PERPETUAL TRUSTS STOCK 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

IF YOU WOULD LIKE FURTHER INFORMATION PLEASE DO NOT HESITATE TO CALL BLACKROCK AT (800) 227-7BFM (7236) OR
CONSULT WITH YOUR FINANCIAL ADVISOR.

23
</TABLE>
<PAGE>

BLACKROCK

DIRECTORS
Laurence D. Fink, CHAIRMAN
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
James Grosfeld
James Clayburn La Force, Jr.
Walter F. Mondale
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
Frank Smith, ASSISTANT TREASURER
Karen H. Sabath, SECRETARY

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

ADMINISTRATOR
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077

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 LLP
919 Third Avenue
New York, NY 10022

The accompanying financial statements as of April 30, 1997 were not audited
and accordingly, no opinion is expressed on them.

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 INVESTMENTS FUND MANAGEMENT LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 227-7BFM

[LOGO] Printed on recycled paper 09247F-10-0

================================================================================
The BlackRock
Income
Trust Inc.
================================================================================
Semi-Annual Report
April 30, 1997