BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC.

Regulatory Filings • Dec 22, 2011

N-Q 1 i00543_mue-nq.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-09191

Name of Fund: BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock MuniHoldings Quality Fund II, Inc., 55 East 52 nd Street, New York, NY 10055

Registrant’s telephone number, including area code: (800) 882-0052, Option 4

Date of fiscal year end: 07/31/2012

Date of reporting period: 10/31/2011

Item 1 – Schedule of Investments

insert

Schedule of Investments October 31, 2011 (Unaudited) BlackRock MuniHoldings Quality Fund II, Inc. (MUE) (Percentages shown are based on Net Assets)

| Municipal
Bonds | Par (000) | Value |
| --- | --- | --- |
| Alabama — 3.0% | | |
| Birmingham Special Care Facilities Financing Authority, RB, Children’s Hospital (AGC), 6.00%, 6/01/39 | $ 5,225 | $ 5,725,712 |
| County of Jefferson Alabama, RB, Series A, 5.50%, 1/01/22 | 3,580 | 3,392,730 |
| | | 9,118,442 |
| California — 17.2% | | |
| California Educational Facilities Authority, RB, University of Southern California, Series A, 5.25%, 10/01/38 | 5,050 | 5,456,474 |
| California Health Facilities Financing Authority, RB, Sutter Health, Series B, 6.00%, 8/15/42 | 2,865 | 3,123,939 |
| City of San Jose California Airport, RB, Series A-1, AMT, 5.50%, 3/01/30 | 4,045 | 4,106,605 |
| City of Sunnyvale California, Refunding RB, 5.25%, 4/01/40 | 2,800 | 3,029,236 |
| City of Vista California, COP, Refunding, Community Projects (NPFGC), 5.00%, 5/01/37 | 2,770 | 2,699,864 |
| County of Sacramento California, RB, Senior Series A (AGC), 5.50%, 7/01/41 | 3,500 | 3,660,475 |
| Emery Unified School District, GO, Election of 2010, Series A (AGM), 5.50%, 8/01/35 | 1,875 | 1,995,637 |
| Los Angeles Community College District California, GO: | | |
| Election of 2001, Series A (NPFGC), 5.00%, 8/01/32 | 5,000 | 5,246,400 |
| Election of 2008, Series C, 5.25%, 8/01/39 | 2,500 | 2,734,450 |
| Oceanside Unified School District California, GO, Series A (AGC), 5.25%, 8/01/33 | 3,175 | 3,349,879 |
| Port of Oakland, Refunding RB, Series M, AMT (NPFGC), 5.38%, 11/01/27 | 2,220 | 2,229,102 |

Municipal Bonds	Par (000)	Value
California (concluded)
Redondo Beach Unified School District, GO, Election of 2008, Series E, 5.50%, 8/01/34	$ 2,670	$ 2,945,170
Roseville Joint Union High School District California, GO, Election of 2004, Series A (NPFGC), 5.00%, 8/01/29	2,985	3,048,551
San Bernardino Community College District, GO, Election of 2002, Series A, 6.25%, 8/01/33	2,165	2,480,809
San Francisco City & County Airports Commission, RB, Specialty Facility Lease, SFO Fuel, Series A, AMT (AGM), 6.10%, 1/01/20	1,250	1,252,512
State of California, GO, Refunding, Veterans, Series BZ, AMT (NPFGC), 5.35%, 12/01/21	10	10,010
Stockton Public Financing Authority California, RB, Redevelopment Projects, Series A (Radian), 5.25%, 9/01/34	2,430	1,755,578
Ventura County Community College District, GO, Election of 2002, Series C, 5.50%, 8/01/33	3,175	3,471,767
		52,596,458
Colorado — 1.5%
Colorado Health Facilities Authority, RB, Hospital, NCMC, Inc. Project, Series B (AGM), 6.00%, 5/15/26	3,300	3,707,583
Colorado Housing & Finance Authority, Refunding RB, S/F Program, Senior Series A-2 AMT, 7.50%, 4/01/31	120	122,739
Regional Transportation District, COP, Series A, 5.00%, 6/01/25	765	810,961
		4,641,283
Florida — 11.9%
City of Jacksonville Florida, RB, Series A, 5.25%, 10/01/26	2,000	2,237,680

Portfolio Abbreviations

To simplify the listings of portfolio holdings in the Schedule of Investments, the names and descriptions of many of the securities have been abbreviated according to the following list:

| AGC | Assured
Guaranty Corp. |
| --- | --- |
| AGM | Assured
Guaranty Municipal Corp. |
| AMBAC | American
Municipal Bond Assurance Corp. |
| AMT | Alternative
Minimum Tax (subject to) |
| BHAC | Berkshire
Hathaway Assurance Corp. |
| COP | Certificates
of Participation |
| EDA | Economic
Development Authority |
| GO | General
Obligation Bonds |
| HFA | Housing
Finance Agency |
| ISD | Independent
School District |
| LOC | Letter of
Credit |
| MRB | Mortgage
Revenue Bonds |
| NPFGC | National
Public Finance Guarantee Corp. |
| Q-SBLF | Qualified
School Bond Loan Fund |
| RB | Revenue
Bonds |
| S/F | Single-Family |
| Syncora | Syncora
Guarantee |
| VRDN | Variable
Rate Demand Notes |

BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC. OCTOBER 31, 2011 1

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

| Municipal
Bonds | Par (000) | Value |
| --- | --- | --- |
| Florida (concluded) | | |
| County of Lee Florida, Refunding RB, Series A, AMT, 5.38%, 10/01/32 | $ 2,500 | $ 2,485,900 |
| County of Miami-Dade Florida, RB, Miami International Airport, Series A, AMT (AGM): | | |
| 5.25%, 10/01/41 | 4,895 | 4,872,826 |
| 5.50%, 10/01/41 | 4,715 | 4,774,220 |
| Jacksonville Port Authority, RB, AMT (AGC), 6.00%, 11/01/38 | 3,625 | 3,671,581 |
| Orange County Health Facilities Authority, RB, The Nemours Foundation Project, Series A, 5.00%, 1/01/29 | 2,540 | 2,602,840 |
| Orange County School Board, COP, Series A (AGC), 5.50%, 8/01/34 | 7,600 | 8,056,380 |
| Tohopekaliga Water Authority, Refunding RB, Series A, 5.25%, 10/01/36 | 6,965 | 7,500,191 |
| | | 36,201,618 |
| Idaho — 0.1% | | |
| Idaho Housing & Finance Association, RB, S/F Mortgage, Series E, AMT, 6.00%, 1/01/32 | 235 | 238,459 |
| Illinois — 13.3% | | |
| Chicago Board of Education, GO, Series A (a): | | |
| 5.50%, 12/01/39 | 3,130 | 3,316,235 |
| 5.00%, 12/01/41 | 5,370 | 5,353,192 |
| Chicago Board of Education Illinois, GO, Refunding, Chicago School Reform Board, Series A (NPFGC), 5.50%, 12/01/26 | 2,080 | 2,232,817 |
| Chicago Illinois O’Hare International Airport, RB: | | |
| General, Third Lien, Series C (AGM), 5.25%, 1/01/35 | 2,030 | 2,132,962 |
| Series A, 5.75%, 1/01/39 | 2,000 | 2,182,820 |
| Chicago Transit Authority, RB, Federal Transit Administration Section 5309, Series A (AGC), 6.00%, 6/01/26 | 3,400 | 3,835,812 |
| Chicago Transit Authority, RB, Sales Tax Receipts, 5.25%, 12/01/36 (a) | 1,060 | 1,096,019 |
| City of Chicago Illinois, Refunding RB: | | |
| General, Third Lien, Series C, 6.50%, 1/01/41 | 9,085 | 10,451,566 |
| Second Lien (NPFGC), 5.50%, 1/01/30 | 2,270 | 2,495,093 |
| Railsplitter Tobacco Settlement Authority, RB: | | |
| 5.50%, 6/01/23 | 2,350 | 2,480,613 |
| 6.00%, 6/01/28 | 670 | 696,679 |
| State of Illinois, RB, Build Illinois,
Series B, 5.25%, 6/15/28 | 4,000 | 4,282,120 |
| | | 40,555,928 |

Municipal Bonds	Par (000)	Value
Indiana — 5.9%
Indiana Finance Authority WasteWater Utility, RB, Series A, 5.25%, 10/01/31	$ 4,725	$ 5,107,914
Indiana Municipal Power Agency, RB, Series A (NPFGC), 5.00%, 1/01/42	6,300	6,431,733
Indianapolis Local Public Improvement Bond Bank, RB, Series K, 5.00%, 6/01/25	3,720	3,958,712
Indianapolis Local Public Improvement Bond Bank, Refunding RB, Waterworks Project, Series A (AGC), 5.50%, 1/01/38	2,370	2,551,234
		18,049,593
Iowa — 0.6%
Iowa Finance Authority, Refunding RB, Iowa Health System (AGC), 5.25%, 2/15/29	1,710	1,795,329
Kansas — 0.5%
Sedgwick & Shawnee Counties Kansas, MRB, Series A-2, AMT (Ginnie Mae), 6.20%, 12/01/33	1,415	1,436,678
Kentucky — 0.9%
Kentucky Economic Development Finance Authority, RB, Louisville Arena, Sub-Series A-1 (AGC), 6.00%, 12/01/38	1,000	1,057,180
Kentucky State Property & Buildings Commission, Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/29	1,525	1,625,071
		2,682,251
Massachusetts — 1.8%
Massachusetts School Building Authority, RB, Series B, 5.00%, 10/15/41 (a)	5,085	5,430,170
Michigan — 11.2%
City of Detroit Michigan, RB:
Second Lien, Series B (NPFGC), 5.50%, 7/01/29	4,170	4,371,786
Senior Lien, Series B (AGM), 7.50%, 7/01/33	3,500	4,149,215
City of Detroit Michigan, Refunding RB:
Second Lien, Series C (BHAC), 5.75%, 7/01/27	2,600	2,788,318
Second Lien, Series E (BHAC), 5.75%, 7/01/31	5,060	5,423,460
Senior Lien, Series C-1 (AGM), 7.00%, 7/01/27	4,180	4,892,272
Senior Lien, Series C-2 (BHAC), 5.25%, 7/01/29	1,860	1,943,812
Hudsonville Public Schools, GO, School Building & Site (Q-SBLF), 5.25%, 5/01/41	3,420	3,616,513
Michigan State Building Authority, Refunding RB, Facilities Program, Series I (AGC):
5.25%, 10/15/24	1,440	1,588,723

BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC. OCTOBER 31, 2011 2

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

| Municipal
Bonds | Par (000) | Value |
| --- | --- | --- |
| Michigan (concluded) | | |
| Michigan State Building Authority, Refunding RB, Facilities Program, Series I (AGC) (concluded): | | |
| 5.25%, 10/15/25 | $ 750 | $ 822,862 |
| Michigan Strategic Fund, Refunding RB, Detroit Edison Co. Project, Series A (Syncora), 5.50%, 6/01/30 | 750 | 751,418 |
| Royal Oak Hospital Finance Authority Michigan, Refunding RB, William Beaumont Hospital, 8.25%, 9/01/39 | 3,115 | 3,694,577 |
| | | 34,042,956 |
| Minnesota — 0.7% | | |
| City of Minneapolis Minnesota, Refunding RB, Fairview Health Services, Series B (AGC), 6.50%, 11/15/38 | 1,975 | 2,214,805 |
| Nevada — 4.8% | | |
| Clark County Water Reclamation District, GO, Series A, 5.25%, 7/01/34 | 3,210 | 3,430,976 |
| County of Clark Nevada, RB: | | |
| Las Vegas-McCarran International Airport, Series A (AGM), 5.25%, 7/01/39 | 4,565 | 4,758,510 |
| Subordinate Lien, Series A-2 (NPFGC), 5.00%, 7/01/36 | 6,520 | 6,564,793 |
| | | 14,754,279 |
| New Jersey — 5.9% | | |
| New Jersey EDA, RB, Motor Vehicle Surcharge, Series A (NPFGC), 5.25%, 7/01/33 | 11,000 | 11,390,170 |
| New Jersey Health Care Facilities Financing Authority, RB, Virtua Health (AGC), 5.50%, 7/01/38 | 3,400 | 3,562,010 |
| New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series A (AGC), 5.63%, 12/15/28 | 2,930 | 3,211,016 |
| | | 18,163,196 |
| New York — 5.8% | | |
| Hudson Yards Infrastructure Corp., RB, Series A, 5.75%, 2/15/47 | 940 | 995,375 |
| New York City Municipal Water Finance Authority, RB: | | |
| Fiscal 2009, Series EE, 5.25%, 6/15/40 | 6,930 | 7,475,114 |
| Second Generation Resolution, Series EE, 5.38%, 6/15/43 | 2,220 | 2,440,602 |
| New York City Transitional Finance Authority, RB: | | |
| Sub-Series S-2A, 5.00%, 7/15/30 | 4,045 | 4,370,865 |
| Fiscal 2009, Series S-3, 5.25%, 1/15/39 | 2,300 | 2,454,560 |
| | | 17,736,516 |

Municipal Bonds
North Carolina — 0.3%
North Carolina HFA, RB, Home Ownership, Series 14A, AMT (AMBAC), 5.35%, 1/01/22	$ 970	$ 970,795
Pennsylvania — 2.3%
Delaware River Port Authority, RB, Series D (AGM), 5.00%, 1/01/40	3,000	3,099,300
Philadelphia Hospitals and Higher Education Facilities Authority, RB, Children’s Hospital, Series D, 5.00%, 7/01/32	3,705	3,834,008
		6,933,308
Puerto Rico — 1.3%
Puerto Rico Sales Tax Financing Corp., RB, First Sub- Series A, 6.38%, 8/01/39	3,500	3,879,190
South Carolina — 6.2%
South Carolina State Housing Finance & Development Authority, Refunding RB, AMT, Series A-2, AMT (AGM), 6.35%, 7/01/19	535	542,511
South Carolina State Public Service Authority, RB:
Santee Cooper, Series A, 5.50%, 1/01/38	2,500	2,718,525
Series A (AMBAC), 5.00%, 1/01/42	15,000	15,558,300
		18,819,336
Texas — 20.4%
City of Austin Texas, Refunding RB, Series A (AGM):
5.00%, 11/15/28	1,795	1,939,910
5.00%, 11/15/29	2,270	2,431,828
City of Houston Texas, Refunding RB, Combined, First Lien, Series A (AGC), 6.00%, 11/15/35	6,700	7,648,854
Clifton Higher Education Finance Corp., Refunding RB, Baylor University, 5.25%, 3/01/32	3,120	3,380,645
Dallas Area Rapid Transit, Refunding RB, Senior Lien, 5.25%, 12/01/38	5,655	6,061,877
Harris County Cultural Education Facilities Finance Corp., RB, Children’s Hospital Project, 5.25%, 10/01/29	2,080	2,208,461
Harris County Health Facilities Development Corp., Refunding RB, Memorial Hermann Healthcare System, Series B, 7.25%, 12/01/35	1,000	1,122,000
Harris County Metropolitan Transit Authority, RB, Series A, 5.00%, 11/01/36	1,265	1,356,561
Lubbock Cooper ISD Texas, GO, School Building (AGC), 5.75%, 2/15/42	1,250	1,354,163
North Texas Tollway Authority, RB:
First Tier, Series K-2 (AGC), 6.00%, 1/01/38	1,000	1,094,150
Special Projects System, Series A, 5.50%, 9/01/41	5,480	5,956,650

BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC. OCTOBER 31, 2011 3

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

| Municipal
Bonds | Par (000) | Value |
| --- | --- | --- |
| Texas (concluded) | | |
| North Texas Tollway Authority, Refunding RB, System, First Tier (NPFGC): | | |
| Series A, 5.63%, 1/01/33 | $ 10,975 | $ 11,476,448 |
| Series A, 5.75%, 1/01/40 | 11,575 | 12,061,034 |
| Series B, 5.75%, 1/01/40 | 1,000 | 1,041,990 |
| Tarrant County Cultural Education Facilities Finance Corp., Refunding RB, Christus Health, Series A (AGC), 6.50%, 7/01/37 | 3,000 | 3,228,720 |
| | | 62,363,291 |
| Utah — 1.2% | | |
| City of Riverton Utah, RB, IHC Health Services, Inc., 5.00%, 8/15/41 | 3,500 | 3,547,075 |
| Virginia — 0.8% | | |
| Virginia Public School Authority, RB, School Financing, 6.50%, 12/01/35 | 2,195 | 2,508,687 |
| Washington — 1.8% | | |
| City of Seattle Washington, Refunding RB, Series A, 5.25%, 2/01/36 | 2,400 | 2,631,840 |
| State of Washington, GO, Various Purpose, Series B, 5.25%, 2/01/36 | 1,865 | 2,052,731 |
| Washington Health Care Facilities Authority, Refunding RB, Providence Health, Series C (AGM), 5.25%, 10/01/33 | 670 | 698,609 |
| | | 5,383,180 |
| West Virginia — 0.6% | | |
| West Virginia University, RB, Series B, 5.00%, 10/01/36 | 1,700 | 1,819,289 |
| Total Municipal Bonds – 120.0% | | 365,882,112 |
| Municipal
Bonds Transferred to Tender Option Bond (TOB) Trusts (b) | | |
| Alabama — 1.3% | | |
| Mobile Board of Water & Sewer Commissioners, RB (NPFGC), 5.00%, 1/01/31 | 3,750 | 3,860,475 |
| California — 3.6% | | |
| City of San Jose California, GO, Libraries, Parks, and Public Safety Project (NPFGC), 5.00%, 9/01/30 | 3,805 | 3,878,605 |
| San Diego Community College District California, GO, Election of 2002 (AGM), 5.00%, 5/01/30 | 1,486 | 1,576,703 |
| Sequoia Union High School District California, GO, Election of 2004, Series B (AGM), 5.50%, 7/01/35 | 5,189 | 5,483,185 |
| | | 10,938,493 |

| Municipal
Bonds Transferred to Tender Option Bond (TOB) Trusts | Par (000) | Value |
| --- | --- | --- |
| Colorado — 3.1% | | |
| Colorado Health Facilities Authority, RB, Catholic Health, Catholic Health, Series C-3 (AGM), 5.10%, 10/01/41 | $ 9,410 | $ 9,534,494 |
| District of Columbia — 0.7% | | |
| District of Columbia Water & Sewer Authority, RB, Series A, 6.00%, 10/01/35 | 1,700 | 2,004,714 |
| Florida — 7.4% | | |
| City of St. Petersburg Florida, Refunding RB (NPFGC), 5.00%, 10/01/35 | 6,493 | 6,650,258 |
| County of Miami-Dade Florida, GO, Building Better Communities Program, Series B-1, 6.00%, 7/01/38 | 12,500 | 13,857,000 |
| Lee County Housing Finance Authority, RB, Multi-County Program, Series A-2, AMT (Ginnie Mae), 6.00%, 9/01/40 | 2,115 | 2,227,433 |
| | | 22,734,691 |
| Georgia — 2.2% | | |
| Augusta-Richmond County Georgia, RB (AGM), 5.25%, 10/01/34 | 6,290 | 6,662,494 |
| Illinois — 6.4% | | |
| Chicago Illinois O’Hare International Airport, RB, Series A, 5.00%, 1/01/38 | 15,000 | 15,308,550 |
| City of Chicago Illinois, Refunding RB, Second Lien (AGM), 5.25%, 11/01/33 | 3,969 | 4,140,986 |
| | | 19,449,536 |
| Kentucky — 0.8% | | |
| Kentucky State Property & Building Commission, Refunding RB, Project No. 93 (AGC), 5.25%, 2/01/27 | 2,304 | 2,491,811 |
| Massachusetts — 1.7% | | |
| Massachusetts School Building Authority, RB, Series A (AGM), 5.00%, 8/15/30 | 4,994 | 5,327,809 |
| Nevada — 6.7% | | |
| Clark County Water Reclamation District, GO: | | |
| Limited Tax, 6.00%, 7/01/38 | 10,000 | 11,234,200 |
| Series B, 5.50%, 7/01/29 | 8,247 | 9,137,488 |
| | | 20,371,688 |
| New Jersey — 1.3% | | |
| New Jersey State Housing & Mortgage Finance Agency, RB, S/F Housing, Series CC, 5.25%, 10/01/29 | 3,941 | 4,100,362 |
| New York — 2.4% | | |
| Sales Tax Asset Receivable Corp., RB, Series A (AMBAC), 5.25%, 10/15/27 | 6,751 | 7,324,432 |

BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC. OCTOBER 31, 2011 4

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

| Municipal
Bonds Transferred to Tender Option Bond (TOB) Trusts | Par (000) | Value | |
| --- | --- | --- | --- |
| Washington — 2.5% | | | |
| City of Bellevue Washington, GO, Refunding (NPFGC), 5.50%, 12/01/39 | $ 6,883 | $ 7,536,899 | |
| Total Municipal Bonds Transferred to Tender Option Bond (TOB) Trusts – 40.1% | | 122,337,898 | |
| Total Long-Term Investments (Cost – $467,469,218) – 160.1% | | 488,220,010 | |
| Short Term
Securities | | | |
| Florida – 0.3% | | | |
| Jacksonville Health Facilities Authority, Refunding RB, Baptist Series C, (Bank of America NA LOC), VRDN, 0.20%, 11/07/11 (e) | 970 | 970,000 | |
| | Shares | | |
| Money Market - 5.9% | | | |
| FFI Institutional Tax-Exempt Fund, 0.01%, 11/07/11 (c)(d) | 17,961,147 | 17,961,147 | |
| Total Short-Term Securities (Cost - $18,931,147) – 6.2% | | 18,931,147 | |
| Total Investments (Cost — $486,400,365*) - 166.3% | | 507,151,157 | |
| Liabilities in Excess of Other Assets – (2.9)% | | (8,959,977 | ) |
| Liability for TOB Trust Certificates,
Including Interest Expense and Fees Payable – (20.4)% | | (62,135,209 | ) |
| Preferred Shares, at Redemption Value – (43.0)% | | (131,004,280 | ) |
| Net Assets Applicable to Common Shares– 100.0% | | $ 305,051,691 | |

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

| Aggregate
Cost | $ | |
| --- | --- | --- |
| Gross
unrealized appreciation | $ 22,140,974 | |
| Gross
unrealized depreciation | (1,390,182 | ) |
| Net
unrealized appreciation | $ 20,750,792 | |

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

Counterparty	Value	Unrealized Appreciation
Citigroup
Global Markets	$ 5,353,192	$ 27,289
Pershing LLC	$ 3,316,235	$ 76,184
Wells Fargo
Bank	$ 1,096,019	$ 4,293
Barclay’s
Capital, Inc.	$ 5,430,170	$ 17,238

| (b) | Securities
represent bonds transferred to a TOB in exchange for which the Fund acquired
residual interest certificates. These securities serve as collateral in a
financing transaction. |
| --- | --- |
| (c) | Represents
the current yield as of report date. |
| (d) | Investments
in companies considered to be an affiliate of the Fund during the period, for
purposes of Section 2(a)(3) of the Investment Company Act of 1940, as
amended, were as follows: |

| Affiliate — FFI
Institutional Tax-Exempt Fund | 13,223,965 | 4,737,182 | 17,961,147 | Income — $ 18,684 |
| --- | --- | --- | --- | --- |

| (e) | Variable
rate security. Rate shown is as of report date and maturity shown is the date
the principal owed can be recovered through demand. | |
| --- | --- | --- |
| • | Fair Value
Measurements - Various inputs are used in determining the fair value of
investments. These inputs are categorized into a disclosure hierarchy
consisting of three broad levels for financial reporting purposes as follows: | |
| | • | Level 1 —
unadjusted price quotations in active markets/exchanges for identical assets
and liabilities |
| | • | Level 2 —
other observable inputs (including, but not limited to: quoted prices for
similar assets or liabilities in markets that are active, quoted prices for
identical or similar assets or liabilities in markets that are not active,
inputs other than quoted prices that are observable for the assets or
liabilities (such as interest rates, yield curves, volatilities, prepayment
speeds, loss severities, credit risks and default rates) or other
market-corroborated inputs) |
| | • | Level 3 —
unobservable inputs based on the best information available in the
circumstances, to the extent observable inputs are not available (including
the Fund’s own assumptions used in determining the fair value of investments) |

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The categorization of a value determined for investments is based on the pricing transparency of the investment and does not necessarily correspond to the Fund’s perceived risk of investing in those securities. For information about the Fund’s policy regarding valuation of investments and other significant accounting policies, please refer to the Fund’s most recent financial statements as contained in its annual report.

BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC. OCTOBER 31, 2011 5

Schedule of Investments (concluded) BlackRock MuniHoldings Quality Fund II, Inc. (MUE)

The following table summarizes the inputs used as of October 31, 2011 in determining the fair valuation of the Fund’s investments:

| Valuation
Inputs | Level 1 | Level 2 | | Total |
| --- | --- | --- | --- | --- |
| Assets: | | | | |
| Investments: | | | | |
| Long-Term Investments 1 | — | $ 488,220,010 | — | $ 488,220,010 |
| Short-Term Securities | $ 17,961,147 | 970,000 | — | 18,931,147 |
| Total | $ 17,961,147 | $ 489,190,010 | — | $ 507,151,157 |

1 See above Schedule of Investments for values in each state or political subdivision.

BLACKROCK MUNIHOLDINGS QUALITY FUND II, INC. OCTOBER 31, 2011 6

end

Item 2 –	Controls and Procedures
2(a) –	The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the ″1940 Act″)) are effective as of a date within 90 days of the filing of this
report based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended.
2(b) –	There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 3 –	Exhibits
	Certifications – Attached hereto
	Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
	BlackRock MuniHoldings Quality Fund II, Inc.
	By:	/s/ John M. Perlowski
		John M. Perlowski
		Chief Executive Officer (principal executive officer) of
		BlackRock MuniHoldings Quality Fund II, Inc.
	Date: December 21, 2011
	Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
	By:	/s/ John M. Perlowski
		John M. Perlowski
		Chief Executive Officer (principal executive officer) of
		BlackRock MuniHoldings Quality Fund II, Inc.
	Date: December 21, 2011
	By:	/s/ Neal J. Andrews
		Neal J. Andrews
		Chief Financial Officer (principal financial officer) of
		BlackRock MuniHoldings Quality Fund II, Inc.
	Date: December 21, 2011