BLACKROCK INCOME TRUST INC, N-30D, 2000-06-30

BLACKROCK INCOME TRUST INC
N-30D, 2000-06-30

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THE BLACKROCK INCOME TRUST INC.
SEMI-ANNUAL REPORT TO SHAREHOLDERS
REPORT OF INVESTMENT ADVISOR
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May 31, 2000

Dear Shareholder:

The Federal Reserve continued to aggressively tighten in an attempt to
achieve its objective of a soft-landing for the explosive U.S. economy. As a
result, the Federal Reserve tightened short-term rates by 0.75% during the
period and raised rates by another 0.50% at the May FOMC meeting to 6.50%. In
the first four months of the new millennium we have been witness to
unprecedented volatility in both the Treasury yield curve and the spread
sectors. The Treasury curve inverted sharply as expectations of continued Fed
tightening in the wake of an insatiable U.S. economy, while anticipation of a
significant buyback at the long end of the maturity spectrum led to lower yields
on long Treasuries. The yield curve inversion along with the premium placed on
the dwindling outstanding Treasuries caused a dramatic underperformance of
spread sectors relative to the performance of the Treasury sectors, especially
in the 10- to 30-year part of the curve.

At this juncture, the general implication for spread product is negative,
but the potential for spread widening is more limited. Most of the negatives for
high quality spread product in terms of relative supply differentials between
Treasuries and non-Treasuries as well as equity market volatility have been
priced into the market. Given current market conditions, we maintain a
significant overweight in high quality spread product. Treasuries are fully
valued even considering the strong technicals in the market. While near-term
volatility is virtually guaranteed by an active Federal Reserve, a successful
soft landing of the economy would ultimately result in a healthier U.S. economy.

This report contains a summary of market conditions during the semi-annual
period and a review of portfolio strategy by your Trust's managers in addition
to the Trust's unaudited financial statements and a detailed list of the
portfolio's holdings. Continued thanks for your confidence in BlackRock. We
appreciate the opportunity to help you achieve your long-term investment goals.

Sincerely,

/s/ Laurence D. Fink /s/ Ralph L. Schlosstein

Laurence D. Fink Ralph L. Schlosstein
Chairman President

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May 31, 2000

Dear Shareholder:

We are pleased to present the unaudited semi-annual report for The
BlackRock Income Trust Inc. ("the Trust") for the six months ended April 30,
2000. 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 time of purchase.

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

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4/30/00 10/31/99 CHANGE HIGH LOW
--------------------------------------------------------------------------------
STOCK PRICE $6.0625 $6.125 (1.02)% $6.3125 $5.625
--------------------------------------------------------------------------------
NET ASSET VALUE (NAV) $7.00 $7.31 (4.24)% $7.34 $6.96
--------------------------------------------------------------------------------
10-YEAR TREASURY NOTE 6.22% 6.02% 3.32% 6.79% 5.77%
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THE FIXED INCOME MARKETS

The dynamic expansion of the U.S. economy continues undaunted by Federal
Reserve Chairman Greenspan's attempt to brake the economy, short of stalling it
into a recession. The labor markets remain tight, growth remains strong with 5%+
annualized growth rates and inflation pressures continue to be offset by
increased productivity. However, the Fed remains cautious, in their February
minutes it was noted that: "Other members acknowledged that the Committee might
need to move more aggressively at a later meeting should imbalances continue to
build and inflation expectations clearly begin to pick up." At the Federal
Reserve meeting in November, February and March the Fed raised the discount rate
by 0.25% at each meeting and a 0.50% increase was made in May to bring the
current discount rate to 6.50%.

The Treasury Yield curve experienced a complex set of dynamics, which has
inverted the curve and may continue to invert the curve for the foreseeable
future. The yields on the short-end of the curve increased sharply during the
period in response to three Federal Reserves increases to the discount rate and
perceived future Fed actions in the coming months. The long-end of the curve is
reacting to the "official" announcement that the Treasury will buy back $30
billion of Treasuries with maturities ranging 10 to 30 years. With a decreasing
supply of available Treasuries, a balanced budget, and an unchanged demand for
longer maturity Treasuries, we would anticipate this condition to continue. This
condition is further augmented by Treasury auction activity, as they reduce the
available bonds on the long end of the curve they continue to add supply in the
1-10 year range through periodic auctions. For the semi-annual period, the yield
of the 10-year Treasury security rose from 6.02% on October 31, 1999 to 6.22% on
April 30, 2000.

Mortgages posted positive returns during the semi-annual period but trailed
the broader market, which was led by the strong rally in the Treasury market. As
measured by the LEHMAN BROTHERS MORTGAGE INDEX, mortgages posted a 1.26% total
return versus 1.42% for the LEHMAN BROTHERS AGGREGATE INDEX. Strength in the
housing market has continued unabated, leading to more supply than expected, but
in comparison to other spread sectors, mortgages benefited from greater
liquidity and higher credit quality. On a relative valuation basis mortgages
appear cheap, although uncertainty was increased in

2
<PAGE>

the market by Treasury Undersecretary Gensler's testimony concerning a bill
seeking to end the quasi-governmental status of FNMA and FHLMC. GNMAs performed
well during the quarter as a Treasury substitute, since it is the only other
asset class backed by the full faith and credit of the U.S. Government.

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, 1999 asset composition:

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SECTOR BREAKDOWN
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COMPOSITION APRIL 30, 2000 OCTOBER 31, 1999
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Mortgage Pass-Throughs 30% 16%
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Interest Only Mortgage-Backed Securities 18% 16%
--------------------------------------------------------------------------------
Adjustable & Inverse Floating Rate Mortgages 18% 8%
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Principal Only Mortgage-Backed Securities 9% 9%
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FHA Project Loans 8% 9%
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Agency Multiple Class Mortgage Pass-Throughs 6% 11%
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U.S. Government Securities 5% 19%
--------------------------------------------------------------------------------
Commercial Mortgage-Backed Securities 3% 4%
--------------------------------------------------------------------------------
Non-Agency Multiple Class Mortgage Pass-Throughs 2% 5%
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Asset Backed Securities 1% 3%
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The Trust reduced its allocation to Treasuries and reallocated assets to
higher yielding spread products as yields on Mortgages and other spread product
increased relative to Treasuries. The Trust has continued to emphasize mortgage
product with relatively strong prepayment protection, including deals backed by
lower-coupon mortgages and structured bonds with prepayment lockout. The Trust
also purchased IOs (Interest-Only securities) as a defensive strategy. IOs help
to protect the value of a portfolio in a rising interest rate environment by
appreciating when mortgages extend. The Trust also purchased Adjustable and
Inverse Floating Rate Mortgages. Although rates have trended up recently, and
spreads have widened significantly, BlackRock believes that longer-term spreads
will tighten and benefit the Trust.

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 yours,

/s/ Robert S. Kapito /s/ Keith T. Anderson /s/ Michael P. Lustig

Robert S. Kapito Keith T. Anderson Michael P. Lustig
Vice Chairman and Chief Investment Officer-- Managing Director
Portfolio Manager Fixed Income and Portfolio Manager
BlackRock Advisors Inc. BlackRock Advisors Inc. BlackRock Advisors Inc.

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THE BLACKROCK INCOME TRUST INC.
--------------------------------------------------------------------------------
Symbol on New York Stock Exchange: BKT
--------------------------------------------------------------------------------
Initial Offering Date: July 22, 1988
--------------------------------------------------------------------------------
Closing Stock Price as of 4/30/00: $6.0625
--------------------------------------------------------------------------------
Net Asset Value as of 4/30/00: $7.00
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Yield on Closing Stock Price as of 4/30/00 ($6.0625)1: 9.28%
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Current Monthly Distribution per Share2: $0.046875
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Current Annualized Distribution per Share2: $0.562500
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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) Distribution is not constant and is subject to change.

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The BlackRock Income Trust Inc.
Portfolio of Investments
April 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
RATING* (000) DESCRIPTION (NOTE 1)
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LONG-TERM INVESTMENTS--143.9%
MORTGAGE PASS-THROUGHS--42.9%
Federal Home Loan Mortgage Corp.,
$110,991@ 6.50%, 5/01/29 - 12/01/99 ................... $103,672,933
2,524@ 7.50%, 7/01/07 - 2/01/23 .................... 2,486,035
685@ 8.00%, 11/01/15 ............................. 688,992
877@ 8.50%, 10/01/06 - 3/01/08, 15 Year .......... 898,454
1,465@ 9.00%, 9/01/20 .............................. 1,505,129
Federal National Mortgage Association,
18,363@ 5.50%, 12/01/13 - 2/01/14, 15 Year .......... 16,813,836
37,369@ 6.50%, 2/01/26 - 7/01/29 .................... 34,901,519
6,477@ 7.00%, 6/01/26 - 9/01/29 .................... 6,199,494
5,587@ 7.50%, 11/01/14 - 9/01/23,
18 Year Multifamily ....................... 5,509,161
3,215@ 8.00%, 5/01/08 - 5/01/22, Multifamily ....... 3,209,057
1,419 9.497%, 6/01/24 ............................. 1,451,983
48 9.50%, 1/01/19 - 6/01/20 .................... 50,019
Government National Mortgage Association,
473 7.00%, 10/15/17 ............................. 455,004
5,608 7.50%, 8/15/21 - 12/15/23 ................... 5,515,898
5,226 8.00%, 10/15/22 - 2/15/29 ................... 5,237,537
12 8.50%, 5/15/01 - 2/15/17 .................... 12,702
429 9.00%, 6/15/18 - 9/15/21 .................... 442,136
-------------
189,049,889
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FEDERAL HOUSING ADMINISTRATION--11.9%
1,298 Allen Oaks, 8.60%, 8/01/33 .................. 1,301,522
2,972 Beachtree, Series 87430,
10.25%, 6/01/32 ........................... 3,039,121
4,166 Brookville, 7.50%, 8/01/28 .................. 4,029,229
GMAC,
5,466 Series 33, 7.43%, 9/01/21 ................. 5,440,084
2,072 Series 46, 7.43%, 1/01/22 ................. 2,052,459
853 Series 48, 7.43%, 6/01/22 ................. 848,520
1,209 Series 51, 7.43%, 6/26/01 - 2/01/23 ....... 1,202,663
6,674 Series 56, 7.43%, 11/01/22 ................ 6,636,591
1,168 Merrill, Series 54, 7.43%, 5/15/23 .......... 1,151,863
1,241 Middlesex, 8.625%, 9/01/34 .................. 1,231,222
4,209 Parkside, 7.30%, 2/01/13 .................... 4,062,295
1,000 Reilly, Series 41, 8.767%, 3/01/20 .......... 1,012,899
2,828 Tuttle Grove, 7.25%, 10/01/35 ............... 2,681,991
USGI,
4,165 Polaris, Series 982, 7.43%, 11/01/21 ...... 4,144,327
892 Series 87, 7.43%, 12/01/22 ................ 874,452
3,464 Series 99, 7.43%, 10/01/23 ................ 3,393,608
2,646 Series 6302, 7.43%, 12/01/21 .............. 2,623,515
6,747 Yorkville, Series 6094, 7.43%,
6/01/21 ................................... 6,703,102
-------------
52,429,463
-------------
AGENCY MULTIPLE CLASS MORTGAGE
PASS-THROUGHS--9.2%
Federal Home Loan Mortgage Corp.,
Multiclass Mortgage Participation
Certificates,
4,629@ Series 1104, Class 1104-L,
6/15/21 ................................... 4,744,775
1,742 Series 1347, Class 1347-HC,
12/15/21 .................................. 1,611,890
450 Series 1541, Class 1541-T,
7/15/23 ................................... 336,287
776 Series 1559, Class 1559-WA,
7/15/22 ................................... 769,565
3,000@ Series 1577, Class 1577-SC,
9/15/23 ................................... 2,119,687
13,281@ Series 1584, Class 1584-FB,
9/15/23 ................................... 13,865,848
2,169 Series 1601, Class 1601-SE,
10/15/08 .................................. 1,670,742
131 Series 1609, Class 1609-KA,
11/15/23 .................................. 128,315
5,000 Series 1649, Class 1649-S,
12/15/08 .................................. 4,564,062
Federal National Mortgage Association,
REMIC Pass-Through Certificates,
714 Trust 1993-87, Class 87-L,
6/25/23 ................................... 644,490
1,549@ Trust 1988-16, Class16-B,
6/25/18 ................................... 1,617,581
2,600@ Trust 1990-12, Class 12-G,
2/25/20 ................................... 2,353,191
4,154 Trust 1992-43, Class 43-E,
4/25/22 ................................... 4,095,810
1,598 Trust 1993-224, Class 224-SD,
11/25/23 .................................. 1,722,614
537 Trust 1997-43, Class 43-G,
4/18/27 ................................... 390,031
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40,634,888
-------------
NON-AGENCY MULTIPLE CLASS
MORTGAGE PASS-THROUGHS--2.8%
AAA 9,939@ Credit Suisse First Boston Mortgage Certificates,
Series 2000-1, Class 2A, 3/15/15 .............. 9,429,836

See Notes to Financial Statements.

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PRINCIPAL
AMOUNT VALUE
RATING* (000) DESCRIPTION (NOTE 1)
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AAA $2,966 Summit Mortgage Trust,
Series 2000-1, Class B1,**
12/28/12 .................................. $ 2,767,148
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12,196,984
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ADJUSTABLE & INVERSE FLOATING RATE
MORTGAGES--25.2%
AAA 307@ Collateralized Mortgage Obligation Trust,
Series 13, Class Q,
1/20/03 ................................... 304,855
Countrywide Funding Corp.,
Mortgage Certificates,
AAA 3,394 Series 1993-10, Class A-8,
1/25/24 ................................... 2,942,804
AAA 6,202 Series 1994-09, Class A-16,
5/25/24 ................................... 4,920,514
Federal Home Loan Mortgage Corp.,
Multiclass Mortgage Participation
Certificates,
498 Series 1160, Class 1160-F,
10/15/21 .................................. 462,137
2,879 Series 1526, Class 1526-SA,
6/15/23 ................................... 2,092,572
2,558 Series 1570, Class 1570-SA,
8/15/23 ................................... 2,270,342
3,621 Series 1580, Class 1580-SD,
9/15/08 ................................... 3,270,863
1,109 Series 1590, Class 1590-OA,
10/15/23 .................................. 1,150,771
3,678@ Series 1598, Class 1598-S,
10/15/08 .................................. 3,185,999
1,457 Series 1616, Class 1616-SB,
11/15/08 .................................. 1,444,405
4,785@ Series 1625, Class 1625-SC,
12/15/08 .................................. 3,720,446
5,769@ Series 1627, Class 1627-S,
12/15/23 .................................. 4,029,238
5,038 Series 1627, Class 1627-SC,
12/15/23 .................................. 2,771,959
3,084 Series 1629, Class 1629-OD,
12/15/23 .................................. 2,160,418
3,165 Series 1666, Class 1666-S,
1/15/24 ................................... 2,448,680
1,276 Series 1669, Class 1669-MD,
2/15/24 ................................... 1,124,514
2,250 Series 1688, Class 1688-S,
12/15/13 .................................. 2,061,563
5,778 Series 1699, Class 1699-ST,
3/15/24 ................................... 4,069,677
475 Series 1862, Class 1862-SF,
4/15/23 ................................... 424,471
8,134 Series 2190, Class 2190-S,
10/15/14 .................................. 6,848,128
Federal National Mortgage Association,
REMIC Pass-Through Certificates,
243 Trust G93-27, Class 27-SB,
8/25/23 ................................... 169,356
1,338 Trust 1991-38, Class 38-F,
4/25/21 ................................... 1,428,310
1,356 Trust 1991-38, Class 38-SA,
4/25/21 ................................... 1,292,717
1,344 Trust 1991-87, Class 87-S,
8/25/21 ................................... 1,331,464
1,143 Trust 1991-145, Class 145-S,
10/25/06 .................................. 1,204,301
147 Trust 1993-50, Class 50-SH,
1/25/23 ................................... 136,554
2,388 Trust 1993-113, Class 113-SB,
7/25/23 ................................... 2,394,223
215 Trust 1993-116, Class 116-SB,
7/25/23 ................................... 169,457
374@ Trust 1993-129, Class 129-SE,
8/25/08 ................................... 335,631
173 Trust 1993-167, Class 167-SA,
9/25/23 ................................... 166,852
6,000@ Trust 1993-169, Class 169-SC,
3/25/23 ................................... 4,259,220
3,000 Trust 1993-170, Class 170-SC,
9/25/08 ................................... 2,920,800
3,500 Trust 1993-179, Class 179-SB,
10/25/23 .................................. 2,692,266
183 Trust 1993-183, Class 183-SM,
10/25/23 .................................. 180,453
2,799 Trust 1993-208, Class 208-SE,
11/25/23 .................................. 2,096,917
5,595 Trust 1993-214, Class 214-S,
12/25/08 .................................. 5,000,835
1,494 Trust 1993-214, Class 214-SH,
12/25/08 .................................. 1,012,031
313 Trust 1993-224, Class 224-S,
11/25/23 .................................. 236,659
199 Trust 1993-224, Class 224-SH,
11/25/23 .................................. 152,097
2,562 Trust 1993-247, Class 247-SN,
12/25/23 .................................. 2,625,270
2,709 Trust 1993-248, Class 248-FB,
9/25/23 ................................... 2,823,522
2,472 Trust 1993-256, Class 256-F,
11/25/23 .................................. 1,965,421
375 Trust 1994-27, Class 27-SE,
3/25/23 ................................... 381,013
1,000 Trust 1994-50, Class 50-S,
3/25/24 ................................... 782,980

See Notes to Financial Statements.

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INTEREST ONLY MORTGAGE-
BACKED SECURITIES--26.4%
AAA 909 American Housing Trust III, Senior
Mortgage Pass-Through Certificates,
Series 1, Class 4, (REMIC),
3/25/19 ................................... 18,187
AAA 203 American Housing Trust VII, Senior
Mortgage Pass-Through Certificates,
Series A, Class R,
11/25/20 .................................. 1,457,742
BA Mortgage Securities, Inc.,
AAA 2,073 Series 1997-1, Class X,
7/25/26 ................................... 380,961
AAA 2,110 Series 1998-1, Class 2X,
5/28/13 ................................... 431,839
AAA 37,522 Countrywide Funding Corp.,
Mortgage Certificates,
Series 1997-8, Class A-5, 1/25/28 ......... 351,770
AAA 42,885 Credit Suisse First Boston Mortgage
Securities Corp. Trust,
Series 1997-C1, Class C1-AX **,
6/20/29 ................................... 3,478,926
Federal Home Loan Mortgage Corp.,
Multiclass Mortgage Participation
Certificates,
27,369 Series G-13, Class 13-PP,
5/25/21 ................................... 4,669,004
12 Series 1238, Class 1238-J,
1/15/07 ................................... 184,874
13,406 Series 1353, Class 1353-S,
8/15/07 ................................... 1,114,591
3,748 Series 1397, Class 1397-IO,
10/15/22 .................................. 1,049,383
4,486 Series 1632, Class 1632-S,
4/15/23 ................................... 48,314
7,168 Series 1706, Class 1706-IA,
10/15/23 .................................. 1,144,680
687 Series 1720, Class 1720-PK,
1/15/24 ................................... 184,674
50,356 Series 1809, Class 1809-SC,
12/15/23 .................................. 3,480,129
3,750 Series 1882, Class 1882-PJ,
4/15/22 ................................... 536,994
4,053 Series 1900, Class 1900-SV,
8/15/08 ................................... 266,597
53,031 Series 1914, Class 1914-PC,
12/15/11 .................................. 1,144,938
3,299 Series 1917, Class 1917-AS,
5/15/08 ................................... 492,763
17,938 Series 1946, Class 1946-SG,
3/15/24 ................................... 953,782
15,106 Series 2002, Class 2002-HJ,
10/15/08 .................................. 1,799,469
8,745 Series 2037, Class 2037-IB,
12/15/26 .................................. 2,114,591
7,553 Series 2039, Class 2039-PI,
2/15/12 ................................... 1,157,698
10,579 Series 2063, Class 2063-PI,
4/15/12 ................................... 1,646,361
4,500 Series 2066, Class 2066-PJ,
12/15/26 .................................. 1,093,672
18,000 Series 2080, Class 2080-PL,
1/15/27 ................................... 5,545,620
32 Series 2099, Class 2099-JB,
9/15/22 ................................... 1,420,750
13,218 Series 2103, Class 2103-PI,
5/15/12 ................................... 2,519,605
23,000 Series 2130, Class 2130-SC,
3/15/29 ................................... 1,358,437
11,000 Series 2140, Class 2140-UK,
9/15/11 ................................... 1,827,031
Federal National Mortgage Association,
REMIC Pass-Through Certificates,
7 Trust G50, Class 50-G,
12/25/21 .................................. 181,183

See Notes to Financial Statements.

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$ 2,097 Trust G92-5, Class 5-H,
1/25/22 ...................................... $ 564,224
7,279 Trust G92-60, Class 60-SB,
10/25/22 ..................................... 405,291
31,648 Trust 302, Class 2,
6/01/29 ...................................... 10,157,153
5 Trust 1992-12, Class 12-C,
2/25/22 ...................................... 131,151
1,083 Trust 1992-187, Class 187-JA,
10/25/06 ..................................... 61,015
6,588 Trust 1993-46, Class 46-S,
5/25/22 ...................................... 209,831
4,000 Trust 1993-196, Class 196-SC,
10/25/08 ..................................... 3,641,680
9,875 Trust 1993-199, Class 199-SB,
10/25/23 ..................................... 203,675
16,000 Trust 1993-201, Class 201-JC,
5/25/19 ...................................... 1,308,480
4,557 Trust 1993-202, Class 202-QA,
6/25/19 ...................................... 269,020
12,370 Trust 1995-26, Class 26-SW,
2/25/24 ...................................... 1,282,402
6,797@ Trust 1996-14, Class 14-M,
10/25/21 ..................................... 5,839,117
12,371 Trust 1996-68, Class 68-SC,
1/25/24 ...................................... 646,131
47,690 Trust 1997-37, Class 37-SE,
10/25/22 ..................................... 786,002
25,000 Trust 1997-50, Class 50-HK,
8/25/27 ...................................... 7,698,220
10,095 Trust 1997-50, Class 50-SI,
4/25/23 ...................................... 302,841
35,476 Trust 1997-65, Class 65-SB,
3/25/24 ...................................... 725,026
27,000 Trust 1997-65, Class 65-SG,
6/25/23 ...................................... 2,775,937
11,139 Trust 1997-76, Class 76-SP,
12/25/23 ..................................... 1,061,651
51,000@ Trust 1997-90, Class 90-M,
1/25/28 ...................................... 15,384,660
12,163 Trust 1998-12, Class 12-PL,
7/18/19 ...................................... 1,321,216
7,378 Trust 1998-25, Class 25-PG,
3/18/22 ...................................... 1,218,671
36,712 Trust 1998-46, Class 46-SC,
5/18/28 ...................................... 2,202,749
AAA 600 First Boston Mortgage Securities Corp.,
Series 1987-C, Class C-Z,
4/25/17 ...................................... 185,289
AAA 44,584 GMAC Commercial Mortgage
Securities, Inc.,
Trust 1997-C1, Class C1-X,
7/15/27 ...................................... 3,317,160
AAA 57,002 Goldman Sachs Mortgage Securities Corp.,
Mortgage Participation Certificates,
Series 1998-5, Class 5,**
2/19/25 ...................................... 1,505,199
Government National Mortgage
Association,
5,461 Trust 1998-14, Class 14-PK,
11/20/26 ..................................... 1,114,954
8,000 Trust 1999-3, Class 3-S,
2/16/29 ...................................... 380,000
19,459 Trust 1999-5, Class 5-S,
2/16/29 ...................................... 419,582
63,110 Trust 1999-8, Class 8-S,
3/16/29 ...................................... 1,301,635
AAA 35,082 Hanover Grantor Trust,
Series 1999-1, Class 1-A,**
8/01/27 ...................................... 1,206,253
Aaa 39,907 Headlands Mortgage Securities, Inc.,
Mortgage Certificates,
Series 1997-1, Class X-1,
3/25/27 ...................................... 748,262
AAA 722 Kidder Peabody Acceptance Corp.,
Series B, Class B-2,
4/22/18 ...................................... 191,680
Aaa 15,836 Merrill Lynch Mortgage Investors, Inc.,
Mortgage Pass-Through Certificates,
Series 95-C2, Class-IO,
6/15/21 ...................................... 450,324
Aaa 19,136@ Morgan Stanley Capital 1, Inc.,
Series 1997-HF1, Class HF1-X,**
6/15/17 ...................................... 1,291,470
AAA 112,483 Prudential Home Mortgage Securities
Co., Mortgage Pass-Through
Certificates,
Series 1994-5, Class A-9,
2/25/24 ...................................... 1,107,258
AAA 2 Prudential Securities, Inc.,
Trust 15, Class 1-G,
5/20/21 ...................................... 149,387
68,274 Small Business Administration,
Series 2000-1, Class 1-I0,
4/01/15 ...................................... 2,208,239
AAA 11 Structured Asset Securities Corp.,
Series 1991-2, Class GA,
12/20/21 ..................................... 320,048
-----------
116,147,448
-----------
PRINCIPAL ONLY MORTGAGE-
BACKED SECURITIES--12.5%
AAA 665 Chase Mortgage Finance Corp., Mortgage
Pass-Through Certificates,
Series 1994-A, Class A-P,
1/25/10 ...................................... 508,357

See Notes to Financial Statements.

8
<PAGE>

AAA $ 534 Collateralized Mortgage Obligation Trust,
Trust 29, Class A,
5/23/17 ...................................... $ 414,526
Drexel Burnham Lambert, Inc.,
AAA 206 Trust K, Class K-1,
9/23/17 ...................................... 162,388
AAA 2,049 Trust V, Class V-1A,
9/01/18 ...................................... 1,531,525
Federal Home Loan Mortgage Corp.,
Multiclass Mortgage Participation
Certificates,
2,685 Series G-50, Class 50-AM,
4/25/24 ...................................... 1,431,399
1,967 Series T-8, Class A-10,
11/15/28 ..................................... 1,032,415
659 Series 1418, Class 1418-M,
11/15/22 ..................................... 282,956
2,653 Series 1571, Class 1571-G,
8/15/23 ...................................... 1,253,581
11,971@ Series 1686, Class 1686-B,
2/15/24 ...................................... 6,392,713
1,583 Series 1691, Class 1691-G,
3/15/24 ...................................... 1,085,613
3,065 Series 1739, Class 1739-B,
2/15/24 ...................................... 2,168,347
948 Series 1750, Class 1750-PC,
3/15/24 ...................................... 837,158
264 Series 1828, Class 1828-A,
5/15/24 ...................................... 134,219
1,543 Series 1857, Class 1857-PB,
12/15/08 ..................................... 1,250,276
5,500 Series 2009, Class 2009-HJ,
10/15/22 ..................................... 3,294,830
8,019 Series 2082, Class 2082-PN,
1/15/24 ...................................... 3,695,119
900 Series 2087, Class 2087-PO,
9/15/25 ...................................... 615,483
1,027 Series 2162, Class 2162-L,
6/15/29 ...................................... 343,949
2,354 Series 2169, Class 2169-EA,
6/15/29 ...................................... 1,079,015
2,214 Series 2217, Class 2217-PO,
2/15/30 ...................................... 1,335,296
Federal National Mortgage Association,
REMIC Pass-Through Certificates,
2,684 Trust 225, Class 1,
2/01/23 ...................................... 2,117,231
2,320 Trust 279, Class 279-1,
7/01/26 ...................................... 1,705,768
481 Trust 1991-7, Class 7-J,
2/25/21 ...................................... 370,480
1,428 Trust 1993-2, Class 2-KB,
1/25/23 ...................................... 728,602
378@ Trust 1993-213, Class 213-H,
9/25/23 ...................................... 373,995
936 Trust 1994-9, Class 9-C,
8/25/23 ...................................... 843,237
1,037 Trust 1996-5, Class 5-NH,
4/25/24 ...................................... 508,349
1,003 Trust 1996-5, Class 5-PV,
11/25/23 ..................................... 814,491
14,300@ Trust 1996-14, Class 14-PE,
8/25/23 ...................................... 5,429,531
3,151 Trust 1996-38, Class 38-E,
8/25/23 ...................................... 1,024,068
1,418 Trust 1997-85, Class 85-EL,
7/25/23 ...................................... 821,362
300 Trust 1997-85, Class 85-LE,
10/25/23 ..................................... 189,851
9,000 Trust 1998-26, Class 26-L,
3/25/23 ...................................... 5,720,282
1,250 Trust 1998-48, Class 48-P,
8/18/28 ...................................... 745,726
AAA 1,329 First Union Residential, Mortgage
Certificates, Series 1999-A,
Class 11-AP, 3/25/15 ........................... 881,468
AAA 13,000 Fund America Investment Corp.,
Series 1993-C, Class B,
4/29/30 ...................................... 1,844,908
2,590 Government National Mortgage
Association,
Trust 1999-40, Class-N,
6/20/27 ...................................... 1,528,027
Housing Security, Inc.,
AAA 127 Series 1992-EB, Class B-8,
9/25/22 ...................................... 94,689
AAA 448 Series 1993-D, Class D-8,
6/25/23 ...................................... 299,222
AAA 437 Structured Mortgage Asset Trust,
Series 1993-3C, Class CX,
4/25/24 ...................................... 291,718
----------
55,182,170
----------
COMMERCIAL MORTGAGE-
BACKED SECURITIES--5.1%
AAA 6,000 Merrill Lynch Mortgage Investors, Inc.,
Series 1996-C1, Class A-3,
7.42%, 4/25/28 ............................... 5,907,701
AAA 10,250 NYC Mortgage Loan Trust,
Series 1996, Class A-2,**
6.75%, 6/25/11 ............................... 9,391,563
AAA 2,000 PaineWebber Mortgage Acceptance Corp. IV,
Series 1995-M1, Class B,**
6.95%, 1/15/07 ............................... 1,978,961

See Notes to Financial Statements.

<PAGE>

AAA $5,000 Prudential Securities, Secured
Financing Corp.,
Series 1998-C1, Class A-1B,
6.51%, 7/15/08 ............................... $ 4,644,860
----------
21,923,085
----------
ASSET-BACKED SECURITIES--1.2%
AAA 952@Chase Manhattan Grantor Trust,
Series 1996-B, Class B,
6.61%, 9/15/02 .............................. 949,567
A 4,581 The Money Store Trust,
Series 1998-A, Class MH-2,
7.23%, 5/15/30 .............................. 4,110,464
----------
5,060,031
----------

U.S GOVERNMENT AND
AGENCY SECURITIES--6.6%
Overseas Private Investment Corp.,
264 5.46%, 2/15/06 ................................. 235,192
240 5.79%, 5/29/12 ................................. 215,227
310 5.88%, 2/15/06 ................................. 281,463
200 6.27%, 5/29/12 ................................. 187,802
351 6.81%, 5/29/12 ................................. 331,695
400 6.84%, 5/29/12 ................................. 384,654
920 6.91%, 5/29/12 ................................. 878,600
250 7.35%, 5/29/12 ................................. 241,250
Small Business Administration,
3,830 Series 1996-20E,
7.60%, 5/01/16 ............................... 3,765,400
3,225 Series 1996-20F,
7.55%, 6/01/16 ............................... 3,161,902
3,429 Series 1996-20G-1,
7.70%, 7/01/16 ............................... 3,390,474
3,241 Series 1996-20H,
7.25%, 8/01/16 ............................... 3,124,888
6,001 Series 1996-20K,
6.95%, 11/01/16 .............................. 5,688,919
2,519 Series 1997-20C,
7.15%, 3/01/17 ............................... 2,414,382
5,422 Series 1998-P10A-1,
6.12%, 2/01/08 ............................... 4,911,401
----------
29,213,249
----------
COLLATERALIZED MORTGAGE OBLIGATION
RESIDUALS***--0.1%
AAA 25 Collateralized Mortgage Obligation Trust,
Series 13, Class R, 1/20/03 .................... 49,597
AAA 45 FBC Mortgage Securities Trust 16,
CMO, Series A-1, 7/01/17 ....................... 117,265
NR 140,000 Kidder Peabody Acceptance Corp.,
Series 1994-C1, Class R, 2/01/01 ............... 1,400
NR 43 PaineWebber Trust,
Series N, Class 7, (REMIC) 1/01/19 ............. 113,835
-----------
282,097
-----------
Total long-term investments
(cost $662,580,866) ............................ 633,070,462

SHORT-TERM INVESTMENTS
DISCOUNT NOTE
300 Federal Home Loan Mortgage Corp.,
5.88%, 5/01/00 (cost $300,000) ................. 300,000
----------
Total Investments, before investments
sold short--137.9%
(cost $662,880,866) ............................... 633,370,462
-----------

INVESTMENTS SOLD SHORT--(13.7%)
(48,000) United States Treasury Bonds,
5.25%,2/15/29 ................................... (42,165,120)
(17,940) United States Treasury Notes,
6.50%, 2/15/10 ................................. (18,295,930)
------------
(proceeds $61,815,781) .......................... (60,461,050)
------------

Total Investments, net of investments
sold short
(cost $601,065,085) ............................ 572,909,412
Liabilities in excess of other
assets--(30.2)% ................................ (133,029,035)
------------
Net Assets--100% .................................. $439,880,377
============

-----------
* Using the higher of Standard & Poor's, Moody's or Fitch's rating.
** Security is exempt from registration under Rule 144A of the
Securities Act of 1993. These securities may be resold in transactions
exempt from registration to qualified institutional buyers.
*** Illiquid securities representing 0.06% of net assets.
@ Entire or partial principal amount pledged as collateral for reverse
repurchase agreements or financial futures contracts.

-------------------------------------------------------------------------------
KEY TO ABBREVIATIONS:

CMO -- Collateralized Mortgage Obligation.
REMIC -- Real Estate Mortgage Investment Conduit.

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

See Notes to Financial Statements.

10
<PAGE>

--------------------------------------------------------------------------------
THE BLACKROCK INCOME TRUST INC.
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------

ASSETS
Investments, at value (cost $662,880,866) (Note 1) ............ $633,370,462
Deposits with brokers as collateral for
securities sold short (Note 1) .............................. 63,821,737
Interest receivable ........................................... 6,080,254
Interest rate caps, at value
(amortized cost $5,091,570) (Notes 1 & 3) ................... 5,014,855
Unrealized appreciation on interest
rate swaps (Note 1 & 3) ..................................... 363,500
Receivable for investments sold ............................... 86,505
--------------
708,737,313
--------------

LIABILITIES
Payable for investment purchased .............................. 104,085,306
Reverse repurchase agreements (Note 4) ........................ 102,011,944
Investments sold short, at value
(proceeds $61,815,781) (Note 1) ............................. 60,461,050
Interest payable .............................................. 1,080,607
Due to broker-variation margin ................................ 587,897
Investment advisory fee payable (Note 2) ...................... 236,337
Due to custodian .............................................. 116,077
Administration fee payable (Note 2) ........................... 72,719
Other accrued expenses ........................................ 204,999
--------------
268,856,936
--------------
NET ASSETS .................................................... $439,880,377
==============

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
Undistributed net investment income ......................... 10,807,857
Accumulated net realized loss ............................... (104,874,385)
Net unrealized depreciation ................................. (30,037,363)
--------------
Net assets, April 30, 2000 .................................... $439,880,377
==============
Net asset value per share:
($439,880,377 / 62,849,878 shares of
common stock issued and outstanding) ......................... $7.00
=====
-------------------------------------------------------------------------------
THE BLACKROCK INCOME TRUST INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
-------------------------------------------------------------------------------

NET INVESTMENT INCOME
Income
Interest earned (net of premium amortization of
$1,079,446 and interest expense of $4,608,176) ............... $ 17,878,667
--------------
Operating Expenses
Investment advisory .......................................... 1,455,578
Administration ............................................... 447,870
Reports to shareholders ...................................... 85,000
Transfer agent ............................................... 71,000
Custodian .................................................... 70,000
Independent accountants ...................................... 57,500
Directors .................................................... 35,000
Legal ........................................................ 10,000
Miscellaneous ................................................ 122,035
--------------
Total operating expenses ................................... 2,353,983
--------------
Net investment income .......................................... 15,524,684
--------------

REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on:
Investments .................................................. 3,011,989
Futures ...................................................... (2,419,050)
Short sales .................................................. (4,214,112)
--------------
(3,621,173)
--------------
Net change in unrealized appreciation (depreciation) on:
Investments .................................................. (13,387,620)
Interest rate caps ........................................... 2,398,095
Futures ...................................................... (581,561)
Interest rate swaps ......................................... 515,788
Short sales ................................................. (2,690,690)
--------------
(13,745,988)
--------------
Net loss on investments ....................................... (17,367,161)
--------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..................................... $ (1,842,477)
==============

See Notes to Financial Statements.

<PAGE>

-------------------------------------------------------------------------------
THE BLACKROCK INCOME TRUST INC.
STATEMENT OF CASH FLOWS
SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
-------------------------------------------------------------------------------

RECONCILIATION OF NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS TO NET CASH
FLOWS PROVIDED BY OPERATING ACTIVITIES
Net decrease in net assets resulting from
operations .......................................... $ (1,842,477)
-------------
Increase in investments ............................... (29,483,371)
Net realized loss ..................................... 3,621,173
Decrease in unrealized appreciation ................... 13,745,988
Increase in interest rate caps ........................ (1,432,904)
Decrease in interest receivable ....................... 125,246
Decrease in due to broker-variation margin ............ (470,171)
Decrease in receivable for investments sold ........... 15,239,021
Decrease in payable for investments sold short ........ (60,166,400)
Increase in payable for investments purchased ......... 104,085,306
Increase in appreciation on interest rate swaps ....... (437,500)
Decrease in interest payable .......................... (1,478,132)
Decrease in deposits with brokers for
securities sold short ............................... 57,190,764
Increase in accrued expenses and other liabilities .... 33,629
-------------
Total adjustments .................................. 100,572,649
-------------
Net cash flows provided by operating activities ....... $98,730,172
=============

INCREASE (DECREASE) IN CASH
Net cash flows provided by operating activities ....... $ 98,730,172
Cash flows used for financing activities:
Decrease in reverse repurchase agreements ........... (84,439,545)
Cash dividends paid (17,676,026)
-------------
Net cash flows used for financing activities .......... (102,115,571)
-------------
Net decrease in cash ................................ (3,385,399)
Cash at beginning of period ......................... 3,385,399
-------------
Cash at end of period ............................... $ --
=============

-------------------------------------------------------------------------------
THE BLACKROCK INCOME TRUST INC.
STATEMENTS OF CHANGES
IN NET ASSETS (UNAUDITED)
-------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
2000 1999
------- -------

INCREASE (DECREASE)
IN NET ASSETS

Operations:

Net investment income .... $ 15,524,684 $ 46,060,724)

Net realized loss ........ (3,621,173) (33,907,437)

Net change in unrealized
depreciation ........... (13,745,988) (16,477,021)
---------- ----------

Net decrease in
net assets resulting from
operations ............. (1,842,477) (4,323,734)

Dividends from net investment
income ................. (17,676,026) (35,352,115)
---------- ----------

Total decrease ........... (19,518,503) (39,675,849)

NET ASSETS

Beginning of period ....... 459,398,880 499,074,729
----------- -----------

End of period (including undis-
tributed net investment
income of $10,807,857 and
$12,959,199, respectively).. $439,880,377 $459,398,880
============ ============

See Notes to Financial Statements.

<PAGE>

-------------------------------------------------------------------------------
THE BLACKROCK INCOME TRUST INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, ---------------------------------------------------
2000 1999 1998 1997 1996 1995
-------------- ----- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period ................ $ 7.31 $ 7.94 $ 8.12 $ 7.61 $ 7.66 $ 7.25
---------- --------- ------- ------- ------- -------
Net investment income (net of $0.07, $0.16, $0.19, $0.18,
$0.17 and $0.22, respectively, of interest expense) .25 .73 .62 .58 .55 .51
Net realized and unrealized gain (loss) on investments (.28) (.80) (.24) .49 (.01) .65
---------- --------- ------- ------- ------- -------
Net increase (decrease) from investment operations ... (.03) (.07 .38 1.07 .54 1.16
---------- --------- ------- ------- ------- -------
Dividends and distributions:
Dividends from net investment income ............... (.28) (.56) (.56) (.56) (.55) (.66)
Distributions in excess of net investment income ... -- -- -- -- (.04) --
Return of capital distribution ..................... -- -- -- -- -- (.09)
---------- --------- ------- ------- ------- -------
Total dividends and distributions .................... (.28) (.56) (.56) (.56) (.59) (.75)
---------- --------- ------- ------- ------- -------
Net asset value, end of period* ...................... $ 7.00 $ 7.31 $ 7.94 $ 8.12 $ 7.61 $ 7.66
========== ========= ======= ======== ======== ========

Per share market value, end of period* ............... $ 6.06 $ 6.13 $ 6.94 $ 6.88 $ 6.25 $ 7.25
========== ========= ======= ======== ======== ========
TOTAL INVESTMENT RETURN+ ............................. 3.74% (4.04%) 9.29% 19.68% (5.36%) 26.50%

RATIOS TO AVERAGE NET ASSETS:
Operating expenses 1.05%+++ 1.01% 1.01% 1.02% 1.08% 1.08%
Operating expenses and interest expense .............. 3.10%+++ 3.03% 3.33% 3.44% 3.38% 4.08%
Net investment income ................................ 6.93%+++ 9.54% 7.74% 7.63% 7.36% 6.85%

SUPPLEMENTAL DATA:
Average net assets (in thousands) .................... $447,870 $482,685 $ 506,858 $474,903 $473,056 $466,449
Portfolio turnover ................................... 41% 144% 214% 220% 440% 267%
Net assets, end of period (in thousands) ............. $439,880 $459,399 $ 499,075 $510,230 $478,085 $481,301
Reverse repurchase agreements outstanding,
end of period (in thousands) ....................... $102,012 $186,451 $198,336 $228,530 $204,438 $214,438
Asset coverage++ ..................................... $ 5,323 $3,478 $ 3,520 $ 3,233 $ 3,339 $ 3,244
</TABLE>

--------------
* Net asset value and market value are published in BARRON'S on Saturday and
THE WALL STREET JOURNAL on Monday.
+ Total investment return is calculated assuming a purchase of common stock
at the current market price on the first day and a sale at the current
market price on the last day of the period reported. Dividends and
distributions, if any, are assumed for purposes of this calculation, to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Total
investment return for period less than one full year is not annualized.
++ Per $1,000 of reverse repurchase agreement outstanding.
+++ Annualized

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 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. ORGANIZATION & ACCOUNTING POLICIES
The BlackRock Income Trust Inc. (the "Trust"), a Maryland corporation, is a
diversified closed-end management in-vestment 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, interest rate swaps, caps, floors and non-exchange traded
options 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. Futures contracts
are 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 60 days or less are valued at amortized
cost, if their term to maturity from date of purchase is 60 days or less.
Short-term securities with a term to maturity greater than 60 days from the date
of purchase are valued at current market quotations until maturity or
disposition.

In connection with transactions in repurchase agreements, the Trust's
custodian takes possession of the underlying col lateral 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, or collections of 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 effec-

14
<PAGE>

tively hedge a position or a portfolio against price declines if a portfolio is
long. In the same sense, call options can be purchased to hedge a portfolio that
is shorter than its benchmark against price changes. The Trust can also sell (or
write) covered call options and put options to hedge portfolio positions.

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

INTEREST RATE SWAPS: In a simple interest rate swap, one investor pays a
floating rate of interest on a notional principal amount and receives a fixed
rate of interest on the same notional principal amount for a specified period of
time. Alternatively, an investor may pay a fixed rate and receive a floating
rate. Rate swaps are efficient as asset/liability management tools. In more
complex swaps, the notional principal amount may decline (or amortize) over
time.

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 swap. However, the Trust closely monitors swaps and does not
anticipate non-performance by any counterparty.

SWAP OPTIONS: Swap options are similar to options on securities except that
instead of selling or purchasing the right to buy or sell a security, the writer
or purchaser of the swap option is granting or buying the right to enter into a
previously agreed upon interest rate swap agreement at any time before the
expiration of the option. Premiums received or paid from writing or purchasing
options are recorded as liabilities or assets and are subsequently adjusted to
the current market value of the option written or purchased. Premiums received
or paid from writing or purchasing options which expires 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 commission, 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 loss on investment transactions.

The main risk that is associated with purchasing swap options is that the
swap option expires without being exercised. In this case, the option expires
worthless and the premium paid for the swap option is considered the loss. The
main risk that is associated with the writing of a swap option is the market
risk of an unfavorable change in the value of the interest rate swap underlying
the written swap option.

Swap options may be used by the Trust to manage the duration of the Trust's
portfolio in a manner similar to more generic options described above.

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 contracts can be sold to effectively shorten an
otherwise longer duration portfolio. In the same sense, futures contracts can be
purchased to lengthen a portfolio that is shorter than its duration target.
Thus, by buying or selling futures contracts, the Trust can effectively "hedge"
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

15
<PAGE>

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.

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 or floating 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.

Transactions fees paid or received by the Trust are recognized as assets or
liabilities and amortized or accreted into interest expense or income over the
life of the interest rate cap. The asset or liability is subsequently adjusted
to the current market value of the interest rate cap purchased or sold. Changes
in the value of the interest rate cap are recognized as unrealized gains and
losses.

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 or floating 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. Selling
interest rate floors reduces the portfolio's duration, making it less sensitive
to changes in interest rates from a market value perspective. The Trust's
leverage provides extra income in a period of falling rates. Selling floors
reduces some of that advantage by partially monetizing it as an up front payment
which the Trust receives.

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.

Transactions fees paid or received by the Trust are recognized as assets or
liabilities and amortized or accreted into interest expense or income over the
life of the interest rate floor. The asset or liability is subsequently adjusted
to the current market value of the interest rate floor purchased or sold.
Changes in the value of the interest rate floor are recognized as unrealized
gains and losses.

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.

FEDERAL INCOME 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 sufficient amounts 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.

16
<PAGE>

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.

DEFERRED COMPENSATION PLAN: Under a deferred compensation plan approved by the
Board of Directors on February 24, 2000, non-interested Directors may elect to
defer receipt of all or a portion of their annual compensation.

Deferred amounts earn a return as though equivalent dollar amounts had been
invested in common shares of other BlackRock funds selected by the Directors.
This has the same economic effect as if the Directors had invested the deferred
amounts in such other BlackRock funds.

The deferred compensation plan is not funded and obligations thereunder
represent general unsecured claims against the general assets of the Trust. The
Trust may, however, elect to invest in common shares of those funds selected by
the Directors in order to match its deferred compensation obligations.

NOTE 2. AGREEMENTS

The Trust has an Investment Advisory Agreement with BlackRock Advisors, Inc.
(the "Advisor"), which is a wholly-owned subsidiary of BlackRock, Inc., which in
turn is an indirect majority-owned subsidiary of PNCFinancial Services Group,
Inc. The Trust has an Administration Agreement with Prudential Investments Fund
Management LLC ("PIFM"), a wholly-owned subsidiary of The Prudential Insurance
Co. of America.

The investment advisory fee paid to the Advisor 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.

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 SECURITIES

Purchases and sales of investment securities, other than short-term investments
and dollar rolls, for the period ended April 30, 2000 aggregated $279,570,470
and $245,631,892, 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"). At April 30, 2000, the Trust held
0.06% of its net assets in 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, including Midland Loan
Services, Inc. It is possible under certain circumstances, that PNC Mortgage
Securities Corp. or its affiliates, including Midland Loan Services, Inc. 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, including Midland Loan Services, Inc.

The federal income tax basis of the Trust's investments at April 30, 2000 was
$662,970,682 and, accordingly, net unrealized depreciation for federal income
tax purposes was $29,600,220 (gross unrealized appreciation $15,454,611; gross
unrealized depreciation $45,054,831).

For federal income tax purposes, the Trust has a capital loss carryforward at
October 31, 1999 of approximately $102,707,800 of which approximately $3,440,300
will expire in 2001, approximately $23,358,000 will expire in 2002,
approximately $15,428,300 will expire in 2003, approximately $27,373,200 will
expire in 2004, and approximately $33,108,000 will expire in 2007. Accordingly,
no capital gains distribution is expected to be paid to shareholders until net
gains have been realized in excess of such amounts.

Details of open financial futures contracts at April 30, 2000 are as follows:

<TABLE>
<CAPTION>
VALUE AT UNREALIZED
NUMBER OF EXPIRATION VALUE AT APRIL 30, APPRECIATION
CONTRACTS TYPE DATE TRADE DATE 2000 (DEPRECIATION)
--------- ---- ---------- ---------- ---------- ----------------
<S> <C> <C> <C> <C> C>
Short Positions:
69 Eurodollar June 2000 $ (16,300,940) $ (16,092,180) $ 208,760
1,863 30 Yr. T-Bond June 2000 (177,518,703) (179,895,937) (2,377,234)
-----------
$(2,168,474)
===========
</TABLE>

<PAGE>

The Trust holds 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 at April 30, 2000
are as follows:

NOTIONAL VALUE AT UNREALIZED
AMOUNT FIXED FLOATING TERMINATION AMORTIZED APRIL 30, APPRECIATION
(000) RATE RATE DATE COST 2000 (DEPRECIATION)
------- ----- ------- ------------ ---------- ---------- --------------
$ 50,000 8.00% 3mth.LIBOR 2/19/02 $ 581,768 $ 996,229 $ 414,461
100,000 6.50% 3mth.LIBOR 4/4/02 1,382,131 1,343,750 (38,381)
100,000 7.00% 3mth.LIBOR 4/18/03 1,697,575 1,487,376 (210,199)
100,000 7.25% 3mth.LIBOR 4/23/03 1,430,096 1,187,500 (242,596)
----------- --------- ----------
$5,091,570 $5,014,855 $ (76,715)
=========== ========= ==========

Details of the open interest rate swap at April 30, 2000 is as follows:

NOTIONAL
AMOUNT FIXED FLOATING TERMINATION UNREALIZED
(000) TYPE RATE RATE DATE APPRECIATION
-------- ----- ----- ------ ---------- ------------
$(20,000)Interest Rate 7.50% 1 mth. LIBOR 04/25/02 $363,500
========

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 investment grade securities having a value not
less than the repurchase price, including accrued interest, of the reverse
repurchase agreement.

The average daily balance of reverse repurchase agreements outstanding during
the period ended April 30, 2000 was approximately $161,800,824 at a weighted
average interest rate of approximately 5.70%. The maximum amount of reverse
repurchase agreements outstanding at any month-end during the period was
$185,097,256 as of March 31, 2000, which was 27.5% of total assets.

N0TE 5. CAPITAL

There are 200 million shares of $.01 par value common stock authorized. Of the
62,849,878 shares outstanding at April 30, 2000, the Adviser owned 10,753
shares.

NOTE 6. DIVIDENDS
Subsequent to April 30, 2000, the Board of Directors of the Trust declared
dividends from undistributed earnings of $0.046875 per share payable May 31,
2000 to shareholders of record on May 15, 2000.

18
<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
reinvested by State Street Bank and 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 transfer agent, 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 acquire shares for the participants' accounts,
depending upon the circumstances described below, either (i) through receipt of
unissued but authorized shares from the Trust ("newly issued shares") or (ii) by
purchase of outstanding shares on the open market, on the New York Stock
Exchange or elsewhere ("open-market purchases"). If, on the dividend payment
date, the net asset value per share is equal to or less than the market price
per share plus estimated brokerage commissions (such condition being referred to
herein as "market premium"), the transfer agent will invest the dividend amount
in newly issued shares on behalf of the participants. The number of newly issued
shares to be credited to each participant's account will be determined by
dividing the dollar amount of the dividend by the net asset value per share (but
in no event less than 95% of the then current market price per share) on the
date the shares are issued. If, on the dividend payment date, the net asset
value per share is greater than the market value per share (such condition being
referred to herein as "market discount"), the transfer agent will invest the
dividend amount in shares acquired on behalf of the participants in open-market
purchases.

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 dividends or distributions.

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.

<PAGE>

-------------------------------------------------------------------------------
THE BLACKROCK INCOME TRUST INC.
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 Shareholders was held May 18, 2000 to vote on the
following matters:

(1) To elect three Directors as follows:

<TABLE>
<CAPTION>
DIRECTOR CLASS TERM EXPIRING
-------- ----- ---- -------
<S> <C> <C> <C>
Frank J. Fabozzi ...................................... II 3 years 2003
Walter F. Mondale ..................................... II 3 years 2003
Ralph L. Schlosstein .................................. II 3 years 2003
</TABLE>

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

(2) To ratify the selection of Deloitte & Touche LLP as independent public
accountants of the Trust for the fiscal year ending October 31, 2000.

Shareholders elected the three Directors and ratified the selection of
Deloitte &Touche LLP. The results of the voting was as follows:

VOTES FOR VOTES AGAINST ABSTENTIONS
-------- ----------- --------
<S> <C> <C> <C>
Frank J. Fabozzi .......................................... 51,630,770 -- 2,623,944
Walter F. Mondale ......................................... 51,356,636 -- 2,898,078
Ralph L. Schlosstein ...................................... 51,703,369 -- 2,551,345
Ratification of Deloitte & Touche LLP ..................... 53,414,394 338,661 501,659
</TABLE>

20
<PAGE>

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

THE TRUST'S INVESTMENT OBJECTIVE
The BlackRock Income Trust's investment objective is to manage a portfolio of
high quality securities to miantain 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 Advisors, Inc. ("BlackRock") is an SEC-registered investment adviser.
As of March 31, 2000, The advisor and its affiliates (together, "BlackRock")
managed $173 billion on behalf of taxable and tax-exempt clients worldwide.
Strategies include fixed income, equity and cash and may incorporate both
domestic and international securities. Domestic fixed income strategies utilize
the government, mortgage, corporate and municipal bond sectors. BlackRock
manages twenty-two closed-end funds that are traded on either the New York or
American stock exchanges, and a $29 billion family of open-end equity and bond
funds. BlackRock manages over 590 accounts, domiciled in the United States and
overseas.

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 rated at least
"AAA" by Standard & Poor's, "Aaa" by Moody's or deemed "AAA" by the Advisor at
the time of purchase. Additionally, 15% of the Trust's assets can be invested in
securities rated at least "AA" by Standard & Poor's or "Aa" by Moody's at time
of purchase. 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 ADVISOR'S INVESTMENT STRATEGY?
The Advisor 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 Advisor 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.

Additionally, in order to protect the portfolio from interest rate risk, the
Advisor 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.

21
<PAGE>

HOW ARE THE TRUST'S SHARES PURCHASED AND SOLD? DOES THE TRUST
PAY DIVIDENDS REGULARLY?
The Trust's shares are traded on the NewYork 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 adviser. 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 Trust 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 adviser 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 Trust in a declining rate
environment, but can cause net assets to decline faster than the market in a
rapidly rising rate environment. the Advisor'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 the Advisor consider
that reduction to be in the best interests of the 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
montly 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.

INTEREST-ONLY SECURITIES (IO). The yield to maturity on an IO class is extremely
sensitive to the rate of principal payments (including prepayments) on the
related underlying Mortgage Assets, and a rapid rate of principal payments may
have a material adverse effect on such security's yield to maturity. If the
underlying Mortgage Assets experience greater than anticipated prepayments of
principal, the Trust may fail to recoup fully its initial investment in these
securities even if the securities are rated AAA by S&P or Aaa by Moody's.

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.

CORPORATE DEBT SECURITIES. The value of corporate debt securities generally
varies inversely with changes in prevailing market interest rates. The Trust may
be subject to certain reinvestment risks in environments of declining interest
rates.

ZERO COUPON SECURITIES. Such securities receive no cash flows prior to maturity;
therefore, interim price movement on the securities are generally more sensitive
to interest rate movements then securities that make periodic coupon payments.

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.

22
<PAGE>

-------------------------------------------------------------------------------
THE BLACKROCK INCOME TRUST INC.
GLOSSARY
-------------------------------------------------------------------------------

ADJUSTABLE RATE MORTGAGE-BACKED Mortgage instruments with interest rates that
SECURITIES (ARMS): 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-backed securities which separate
MORTGAGE OBLIGATIONS (CMOS): 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.

COMMERCIAL MORTGAGE Mortgage-backed securities secured or backed
BACKED SECURITIES (CMBS): by mortgage loans on commercial properties.

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: 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, FNMA and
FHLMC.

23
<PAGE>

INTEREST-ONLY SECURITIES: Mortgage securities including CMBS that
receive only the interest cash flows from an
underlying pool of mortgage loans or
underlying pass-through securities. Also known
as a STRIP.

INVERSE-FLOATING RATE MORTGAGE: Mortgage instruments with coupons that adjust
at periodic intervals according to a formula
which sets inversely with a market level
interest rate index.

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 FNMA,
FHLMC, FHA or GNMA.

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 on Monday.

PRINCIPAL-ONLY SECURITIES: 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, FNMA 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 Arrangements in which a pool of assets is
SECURITIES 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.

24
<PAGE>

-------------------------------------------------------------------------------
BLACKROCK ADVISORS, INC.
SUMMARY OF CLOSED-END FUNDS
-------------------------------------------------------------------------------

TAXABLE TRUSTS
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ ------
<S> <C> <C>
The BlackRock Income Trust Inc. BKT N/A
The BlackRock North American Government Income Trust Inc. BNA N/A
The BlackRock High Yield Trust BHY N/A

TERM TRUSTS

The BlackRock Target Term Trust Inc. BTT 12/00
The BlackRock 2001 Term Trust Inc. BTM 06/01
The BlackRock Strategic Term Trust Inc. BGT 12/02
The BlackRock Investment Quality Term Trust Inc. BQT 12/04
The BlackRock Advantage Term Trust Inc. BAT 12/05
The BlackRock Broad Investment Grade 2009 Term Trust Inc. BCT 12/09

TAX-EXEMPT TRUSTS
-------------------------------------------------------------------------------

STOCK MATURITY
PERPETUAL TRUSTS SYMBOL DATE
------ ------
The BlackRock Investment Quality Municipal Trust Inc. BKN N/A
The BlackRock California Investment Quality Municipal Trust Inc. RAA N/A
The BlackRock Florida Investment Quality Municipal Trust RFA N/A
The BlackRock New Jersey Investment Quality Municipal Trust Inc. RNJ N/A
The BlackRock New York Investment Quality Municipal Trust Inc. RNY N/A
The BlackRock Pennsylvania Strategic Municipal Trust BPS N/A
The BlackRock Strategic Municipal Trust BSD N/A

TERM TRUSTS

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

</TABLE>

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

25
<PAGE>

-------------------------------------------------------------------------------
BLACKROCK ADVISOR, INC.
AN OVERVIEW
-------------------------------------------------------------------------------

BlackRock Advisor, Inc. (the "Advisor") is an SEC-registered investment
advisor. As of March 31, 2000, the Advisor and its affiliates (together,
"BlackRock") managed $173 billion on behalf of taxable and tax-exempt clients
worldwide. Strategies include fixed income, equity and cash and may incorporate
both domestic and international securities. BlackRock manages twenty-two
closed-end funds that are traded on either the New York or American stock
exchanges, and a $29 billion family of open-end funds. BlackRock manages over
590 accounts, domiciled in the United States and overseas.

BlackRock's fixed income product was introduced in 1988 by a team of
highly seasoned fixed income professionals. These professionals had extensive
experience creating, analyzing and trading a variety of fixed income
instruments, including the most complex structured securities. In fact, several
individuals at BlackRock were responsible for developing many of the major
innovations in the mortgage-backed and asset-backed securities markets,
including the creation of the first CMO, the floating rate CMO, the
senior/subordinated pass-through and the multi-class asset-backed security.

BlackRock is unique among asset management and advisory firms in the
emphasis it places on the development of proprietary analytical capabilities.
Over one quarter of the firm's professionals is dedicated to the design,
maintenance and use of these systems, which are not otherwise available to
investors. BlackRock's proprietary analytical tools are used for evaluating, and
designing fixed income investment strategies for client portfolios. Securities
purchased include mortgages, corporate bonds, municipal bonds and a variety of
hedging instruments.

BlackRock has developed investment products that respond to investors'
needs and has been responsible for several major innovations in closed-end
funds. In fact, BlackRock introduced the first closed-end mortgage fund, the
first taxable and tax-exempt closed-end funds to offer a finite term, the first
closed-end fund to achieve a AAA rating by Standard & Poor's, and the first
closed-end fund to invest primarily in North American Government securities.
Currently, BlackRock's closed-end funds have dividend reinvestment plans, which
are designed to provide ongoing demand for the stock in the secondary market.
BlackRock manages a wide range of investment vehicles, each having specific
investment objectives and policies.

In view of our continued desire to provide a high level of service to all
our shareholders, BlackRock maintains a toll-free number for your questions. The
number is (800) 227-7BFM (7236). We encourage you to call us with any questions
that you may have about your BlackRock funds and we thank you for the continued
trust that you place in our abilities.

IF YOU WOULD LIKE FURTHER INFORMATION
PLEASE DO NOT HESITATE TO CALL BLACKROCK AT (800) 227-7BFM

<PAGE>
-------------------------
BLACKROCK
-------------------------

DIRECTORS
Laurence D. Fink, CHAIRMAN
Andrew F. Brimmer
Richard E. Cavanagh
Kent Dixon
Frank J. Fabozzi
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
Karen H. Sabath, SECRETARY

INVESTMENT ADVISOR
BlackRock Advisors, Inc.
400 Bellevue Parkway
Wilmington, DE 19809
(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 ACCOUNTANTS
Deloitte & Touche LLP
Two World Financial Center
New York, NY 10281-1434

LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, NY 10036

LEGAL COUNSEL - INDEPENDENT DIRECTORS
Debevoise & Plimpton
875 Third Avenue
New York, NY 10022

The accompanying financial statements as of April 30, 2000 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

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

-------------------------
BLACKROCK
-------------------------
The
Income
Trust Inc.

-------------------------------------------------------------------------
Semi-Annual Report
April 30, 2000

[GRAPHIC OMITTED]