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 811-21972

Name of Fund:      BlackRock Preferred and Equity Advantage Trust

Fund Address:     100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: Robert S. Kapito, President, BlackRock Preferred and Equity
               Advantage Trust, 40 East 52nd Street, New York, NY 10022.

Registrant’s telephone number, including area code: (888) 825-2257

Date of fiscal year end: 10/31/2007

Date of reporting period: 05/01/2007 – 07/31/2007

Item 1 – Schedule of Investments

PORTFOLIO OF INVESTMENTS (unaudited)
JULY 31, 2007
BlackRock Preferred and Equity Advantage Trust (BTZ)
(Percentages shown are based on Net Assets)

Shares
          
Description
 
Value
  
    LONG-TERM INVESTMENTS—143.0%      
    Common Stocks—38.5%      
    Aerospace & Defense—0.4%      
18,800   L-3 Communications Holdings, Inc. $ 1,834,128  
28,300   Lockheed Martin Corp.   2,786,984  
    Total Aerospace & Defense   4,621,112  
    Automotive—0.4%      
          264,500 1 Ford Motor Co.   2,250,895  
21,800   General Motors Corp.   706,320  
11,200   Genuine Parts Co.   532,896  
10,000   PACCAR, Inc.   818,200  
    Total Automotive   4,308,311  
    Basic Materials—1.7%      
17,900   Air Products & Chemicals, Inc.   1,546,023  
54,900   Alcoa, Inc.   2,097,180  
17,500   Allegheny Technologies, Inc.   1,836,275  
5,200   BASF AG (ADR)   673,140  
46,000   Dow Chemical Co. (The)   2,000,080  
71,500   E.I. du Pont de Nemours & Co.   3,341,195  
12,500   Freeport-McMoRan Copper & Gold, Inc.   1,174,750  
74,200   Intl. Paper Co.   2,750,594  
33,900   MeadWestvaco Corp.   1,103,106  
30,000   Nucor Corp.   1,506,000  
13,700   PPG Industries, Inc.   1,044,899  
24,600   Plum Creek Timber Co., Inc. (REIT)   955,956  
    Total Basic Materials   19,073,242  
    Building & Development—0.2%      
15,800   Centex Corp.   589,498  
26,400   D.R. Horton, Inc.   430,848  
16,000   KB Home   508,960  
7,600   Lennar Corp., Class A   233,016  
16,000   Masco Corp.   435,360  
    Total Building & Development   2,197,682  
    Consumer Products—5.6%      
108,800   Altria Group, Inc.   7,231,936  
5,000   Amazon.com, Inc.   392,700  
76,200   Amgen, Inc.   4,094,988  
45,000   Anheuser-Busch Cos., Inc.   2,194,650  
10,300   Black & Decker Corp.   891,671  
26,406   CVS Caremark Corp.   929,227  
8,300   Clorox Co.   501,818  
113,100   Coca-Cola Co. (The)   5,893,641  
26,400   Eastman Kodak Co.   666,600  
21,800   Fortune Brands, Inc.   1,772,340  
67,700   Gap, Inc.   1,164,440  
96,200   Home Depot, Inc.   3,575,754  
6,900   JC Penney Co., Inc.   469,476  
69,746   Kraft Foods, Inc.   2,284,182  
72,600   Lowe's Cos., Inc.   2,033,526  
12,600   Ltd. Brands, Inc., Class A   304,290  
17,100   Macy's, Inc.   616,797  
17,400   Newell Rubbermaid, Inc.   460,230  
13,700   Nordstrom, Inc.   651,846  
6,800   OfficeMax, Inc.   223,584  
18,800   PepsiCo, Inc.   1,233,656  
128,000   Procter & Gamble Co.   7,918,080  
19,700   Reynolds American, Inc.   1,205,049  
183,800   Sara Lee Corp.   2,913,230  
10,100 1 Sears Holdings Corp.   1,381,579  
43,300 1 Starbucks Corp.   1,155,244  
26,000   Tupperware Brands Corp.   676,260  
53,100   UST, Inc.   2,843,505  
9,500   Universal Corp.   524,495  
4,700   VF Corp.   403,213  
115,100   Wal-Mart Stores, Inc.   5,288,845  
37,900   Walgreen Co.   1,674,422  
7,000   Whole Foods Market, Inc.   259,280  
    Total Consumer Products   63,830,554  
    Energy—4.9%      
53,800   American Electric Power, Inc.   2,339,762  
26,300   Anadarko Petroleum Corp.   1,323,679  
20,300   Apache Corp.   1,641,052  
22,400   BP Plc (ADR)   1,554,560  
11,400   Baker Hughes, Inc.   901,170  
59,900   Chevron Corp.   5,107,074  
66,700   ConocoPhillips   5,392,028  
72,000   Consolidated Edison, Inc.   3,144,960  
27,600   DTE Energy Co.   1,280,088  
32,100   Devon Energy Corp.             2,394,981  
78,400   Duke Energy Corp.   1,335,152  
7,300   EOG Resources, Inc.   511,730  
25,100   Exelon Corp.   1,760,765  
182,400   Exxon Mobil Corp.   15,527,712  
24,500   Great Plains Energy, Inc.   680,120  
29,300   Halliburton Co.   1,055,386  
20,300   Hess Corp.   1,242,360  
50,000   Marathon Oil Corp.   2,760,000  
27,200   Nicor, Inc.   1,071,952  
42,800   NiSource, Inc.   816,196  
13,100   Rowan Cos., Inc.   552,689  
21,000   Sasol Ltd. (ADR)   789,810  
6,200   Schlumberger Ltd.   587,264  
44,700   Southern Co.   1,503,708  
7,300 1 Transocean, Inc.   784,385  
    Total Energy   56,058,583  
    Entertainment & Leisure—0.2%      
12,500   Brunswick Corp.   349,500  
31,900   Carnival Corp.   1,413,489  
50,000   Regal Entertainment Group   1,069,500  
    Total Entertainment & Leisure   2,832,489  
    Financial Institutions—6.9%      
26,500   American Express Co.   1,551,310  
79,200 2 American Intl. Group, Inc.   5,083,056  
18,300   Arthur J. Gallagher & Co.   504,714  
92,300   BB&T Corp.   3,453,866  
147,700   Bank of America Corp.   7,003,934  
37,452   Bank of New York Mellon Corp.   1,593,583  
10,900   Bear Stearns Cos., Inc.   1,321,298  
16,800   Cigna Corp.   867,552  
136,500   Citigroup, Inc.   6,356,805  
33,800   Comerica, Inc.   1,779,908  
37,750 1 Discover Financial Services   870,137  
62,900 1 E*Trade Financial Corp.   1,164,908  
37,400   Fannie Mae   2,238,016  
22,900   Freddie Mac   1,311,483  
14,600   Goldman Sachs Group, Inc. (The)   2,749,764  
33,900   HSBC Holdings Plc (ADR)   3,158,124  
85,300   JPMorgan Chase & Co.   3,754,053  
38,500   KeyCorp   1,335,565  
40,100   Lehman Brothers Holdings, Inc.   2,486,200  
35,700   Lincoln National Corp.   2,153,424  
25,600   MCG Capital Corp.   370,432  
54,900   Marsh & McLennan Cos., Inc.   1,512,495  
75,500   Morgan Stanley   4,822,185  
92,200   National City Corp.   2,709,758  
152,300   New York Community Bancorp, Inc.   2,471,829  
54,700   Progressive Corp.   1,147,606  
75,000   Regions Financial Corp.   2,255,250  
30,700   Travelers Cos., Inc.   1,558,946  
75,100   U.S. Bancorp   2,249,245  
101,000   Wachovia Corp.   4,768,210  
54,200   Washington Mutual, Inc.   2,034,126  

1

BlackRock Preferred and Equity Advantage Trust (BTZ) (continued)
(Percentages shown are based on Net Assets)

Shares
          
Description
 
Value
 
    Financial Institutions— (cont'd)      
81,300   Wells Fargo & Co. $           2,745,501   
    Total Financial Institutions   79,383,283  
    Health Care—4.4%      
58,400   Abbott Laboratories   2,960,296  
19,100   Aetna, Inc.   918,137  
37,900   Baxter Intl., Inc.   1,993,540  
30,600   Becton Dickinson & Co.   2,336,616  
9,300 1 Biogen Idec, Inc.   525,822  
32,600 1 Boston Scientific Corp.   428,690  
71,700   Bristol-Myers Squibb Co.   2,036,997  
10,300 1 Celgene Corp.   623,768  
32,500 1 Covidien Ltd.   1,330,875  
40,700   Eli Lilly & Co.   2,201,463  
39,600 1 Express Scripts, Inc.   1,985,148  
49,600 1 Gilead Sciences, Inc.   1,846,608  
5,200 1 Humana, Inc.   333,268  
119,400   Johnson & Johnson   7,223,700  
64,500   Medtronic, Inc.   3,268,215  
96,500   Merck & Co., Inc.   4,791,225  
          284,900 2 Pfizer, Inc.   6,697,999  
11,100   Quest Diagnostics, Inc.   615,717  
57,600   Schering-Plough Corp.   1,643,904  
9,800 1 St. Jude Medical, Inc.   422,772  
47,400   UnitedHealth Group, Inc.   2,295,582  
50,600   Wyeth   2,455,112  
19,500 1 Zimmer Holdings, Inc.   1,516,320  
    Total Health Care   50,451,774  
    Industrials—3.2%      
37,600   3M Co.   3,343,392  
33,700   Boeing Co.   3,485,591  
47,100   Caterpillar, Inc.   3,711,480  
14,800   Deere & Co.   1,782,216  
6,700   Fluor Corp.   773,917  
383,400   General Electric Co.   14,860,584  
29,700   Honeywell Intl., Inc.   1,708,047  
38,000   Illinois Tool Works, Inc.   2,091,900  
30,100   Ingersoll-Rand Co. Ltd.   1,514,632  
20,300   Leggett & Platt, Inc.   420,819  
15,900   Rockwell Automation, Inc.   1,112,841  
5,500   Textron, Inc.   620,895  
32,500   Tyco Intl. Ltd.   1,536,925  
    Total Industrials   36,963,239  
    Media—1.0%      
75,100   CBS Corp., Class B   2,382,172  
2,987   Citadel Broadcasting Corp.   14,997  
129,450 1 Comcast Corp., Class A   3,400,651  
55,700 1 DIRECTV Group, Inc.   1,248,237  
34,300   New York Times Co. (The)   784,098  
86,100   Time Warner, Inc.   1,658,286  
28,200 1 Viacom, Inc.   1,080,060  
38,900   Walt Disney Co. (The)   1,283,700  
    Total Media   11,852,201  
    Real Estate—0.8%      
31,000   Annaly Capital Management, Inc. (REIT)   447,950  
4,600   Boston Properties, Inc. (REIT)   434,654  
12,100   Equity Residential (REIT)   481,701  
15,600   First Industrial Realty Trust, Inc. (REIT)   603,876  
67,400   HRPT Properties Trust (REIT)   630,190  
13,900   Health Care Property Investors, Inc.   378,636  
59,100   Hospitality Properties Trust (REIT)   2,267,076  
20,200   Inland Real Estate Corp. (REIT)   305,424  
24,600   Plum Creek Timber Co., Inc. (REIT)   955,956  
39,600   Starwood Hotels & Resorts Worldwide, Inc.   2,493,216  
    Total Real Estate   8,620,043  
    Technology—5.1%      
10,400 1 Agilent Technologies, Inc.   396,760  
35,100   Apple, Inc.   4,624,776  
182,100   Applied Materials, Inc.   4,013,484  
30,100   AutoDesk, Inc.   1,275,337  
38,300   Automatic Data Processing, Inc.   1,777,886  
13,600 1 Cognizant Technology Solutions Corp.   1,101,328  
35,600 1 Dell, Inc.   995,732  
140,800 1 EMC Corp.   2,606,208  
46,200 1 eBay, Inc.   1,496,880  
16,500 1 Electronic Arts, Inc.   802,560  
12,000 1 Google, Inc.   6,120,000  
84,600   Hewlett-Packard Co.   3,894,138  
182,700   Intel Corp.   4,315,374  
51,200   Intl. Business Machines Corp.   5,665,280  
38,600   Maxim Integrated Products, Inc.   1,223,620  
274,500   Microsoft Corp.   7,957,755  
54,500   National Semiconductor Corp.   1,416,455  
94,700 1 Oracle Corp.   1,810,664  
12,900   Paychex, Inc.   533,802  
17,200   Pitney Bowes, Inc.   792,920  
6,200 1 SanDisk Corp.   332,506  
115,800 1 Sanmina-SCI Corp.   318,450  
252,400 1 Sun Microsystems, Inc.   1,287,240  
32,500 1 Tyco Electronics Ltd.   1,164,150  
43,700   Xilinx, Inc.   1,092,500  
33,900 1 Yahoo!, Inc.   788,175  
    Total Technology   57,803,980  
    Telecommunications—3.0%      
175,987   AT&T, Inc.   6,891,651  
142,010   Chunghwa Telecom Co. Ltd. (ADR)   2,354,526  
178,500 1 Cisco Systems, Inc.   5,160,435  
64,000   Citizens Communications Co.   923,520  
43,300 1 Corning, Inc.   1,032,272  
15,700 1 Juniper Networks, Inc.   470,372  
140,400   Motorola, Inc.   2,385,396  
119,200   Qualcomm, Inc.   4,964,680  
96,800   Sprint Nextel Corp.   1,987,304  
47,000   Tele Norte Leste Participacoes (ADR)   997,810  
156,000   Verizon Communications, Inc.   6,648,720  
    Total Telecommunications   33,816,686  
    Transportation—0.7%      
39,700   General Maritime Corp.   1,032,200  
37,600   Nordic American Tanker Shipping   1,492,720  
15,700   Ship Finance Intl. Ltd.   438,815  
62,900   United Parcel Service, Inc., Class B   4,762,788  
    Total Transportation   7,726,523  
    Total Common Stocks   439,918,338  
    Preferred Stocks—26.9%      
    Energy—3.4%      
40,000   Entergy Louisiana LLC, 6.95%   4,026,551  
785,000   Interstate Power & Light Co., Ser. B, 8.375%   24,555,821  
120,000   Nexen, Inc., 7.35%   3,011,256  
288,000   PPL Energy Supply LLC, 7.00%   7,272,000  
    Total Energy   38,865,628  
    Financial Institutions—18.3%      
400,000   ACE Ltd., Ser. C, 7.80%   10,180,000  
400,000   Aegon N.V.   9,650,000  
    Arch Capital Group Ltd.,      
100,000  
     8.00%
  2,584,380  
160,000  
     Ser. B, 7.875%
  4,085,008  
655,000 3 Aspen Insurance Holdings Ltd., 7.401%   15,425,250  
180,000 3 Axis Capital Holdings Ltd., Ser. B, 7.50%   18,860,634  
170,731   Berkley W.R. Capital Trust II, 6.75%   4,049,534  
10,000 4 Centaur Funding Corp., Ser. B, 9.08%   11,490,625  
210,000   Citizens Funding Trust I, 7.50%   5,151,573  
150,000 4 CoBank ACB, 7.00%   7,619,700  
113,200   Countrywide Capital V, 7.00%   2,422,480  
250,000   Deutsche Bank Contingent Capital Trust II, 6.55%  
6,100,000
  

2

BlackRock Preferred and Equity Advantage Trust (BTZ) (continued)
(Percentages shown are based on Net Assets)

Shares
           Description  
Value
  
      Financial Institutions— (cont’d)      
            389,000   Endurance Specialty Holdings Ltd., 7.75% $ 10,129,560  
  35,000   Federal Home Loan Mortgage Corp., Ser. W, 5.66%
808,283
  
  200,000   ING Groep N.V., 6.125%   4,618,760  
  150,000 4 Indymac Bank FSB, 8.50%   3,225,000  
  795,000   KeyCorp Capital IX, 6.75%   19,064,100  
  298,100   National City Capital Trust II, 6.625%   7,014,681  
  265,600   PartnerRE Ltd., Ser. C, 6.75%   6,407,600  
  285,000   RenaissanceRe Holdings Ltd., Ser. D, 6.60% 6,509,400  
  50 3 Roslyn Real Estate Asset Corp., Ser. D, 9.01% 5,007,812  
     
Santander Finance Preferred S.A. Unipersonal,
     
  522,000 4    6.50%   13,066,339  
  670,000 4    6.80%   16,959,375  
  85,000   Sovereign Capital Trust V, 7.75%   2,186,098  
  75,000   Wachovia Capital Trust IV, 6.375%   1,746,097  
  280,000   Wachovia Capital Trust IX, 6.375%   6,510,000  
  300,000   XL Capital Ltd., Ser. B, 7.625%   7,528,140  
      Total Financial Institutions        208,400,430  
      Media—1.6%      
  780,000   Comcast Corp., 6.625%   18,072,600  
      Real Estate—3.1%      
  520,000   CBL & Associates Properties, Inc. (REIT), Ser. C, 7.75%
12,740,000
  
  55,000   iStar Financial, Inc. (REIT), Ser. I, 7.50%   1,275,313  
  341,300   PS Business Parks, Inc. (REIT), Ser. P, 6.70% 7,583,276  
  572,500   Public Storage, Inc. (REIT), Ser. M, 6.625%   13,292,763  
      Total Real Estate   34,891,352  
      Telecommunications—0.5%      
  270,000   AT&T, Inc., 6.375%   6,277,500  
      Total Preferred Stocks   306,507,509  
Principal
         
Amount
         
(000)
         
      Trust Preferred Stocks—66.3%      
      Energy—1.6%      
$ 4,500 3 Enterprise Products Operating LP, 8.375%, 8/01/66  
4,591,152
  
  5,900 3 PPL Capital Funding, Inc., Ser. A, 6.70%, 3/30/67  
5,550,425
  
  1,575 3 Puget Sound Energy, Inc., Ser. A, 6.974%, 6/01/67  
1,589,633
  
  7,325 3 Trans-Canada Pipelines Ltd., 6.35%, 5/15/67   6,856,024  
      Total Energy   18,587,234  
      Financial Institutions—63.0%      
  18,273   AON Corp., 8.205%, 1/01/27   19,143,727  
      AXA S.A. (France)      
  17,000 3,4,5    6.463%   15,160,396  
  3,225 3,4,5    6.379%   2,755,943  
 
2,375
3,5 Abbey National Capital Trust I, 8.963%   2,974,721  
  17,000 2 Ace Capital Trust II, 9.70%, 4/01/30   21,315,467  
      Allstate Corp.,      
  8,725 3    6.125%, 5/15/37   8,263,980  
  10,675 3    6.50%, 5/15/57   9,852,256  
  11,150   American Intl. Group, Inc., Ser. A1, 6.25%, 3/15/37  
10,270,912
  
  5,000   Astoria Capital Trust I, Ser. B, 9.75%, 11/01/29 5,593,655  
  15,300 3 BB&T Capital Trust IV, 6.82%, 6/12/57   14,814,041  
 
19,400
 3,4,5,6 BNP Paribas, 7.195% (France)   18,528,067  
  30,000 3,4,5 BOI Capital Funding No. 3, 6.107% (Ireland) 26,929,200  
  10,000 5 BTA Finance Luxembourg S.A., 8.25% (Kazakhstan)  
7,895,300
  
      Barclays Bank Plc (United Kingdom)      
 
19,825
3,4,5,6    5.926%   18,935,968  
  20,000 3,4,5    6.86%   19,816,440  
 
5,000
3,4 C10 Capital SPV Ltd., 6.722% (British Virgin Islands)  
4,708,250
  
 
5,000
 2 Capital One Capital III, 7.686%, 8/15/36   4,782,750  
 
15,000
3 Capital One Capital IV, 6.745%, 2/17/37   13,025,385  
 
15,300
3 Chubb Corp., 6.375%, 3/29/67   14,733,135  
 
20,000
3,4,5 Commonwealth Bank of Australia, 6.024% (Australia)  
19,348,620
  
 
26,000
3,4,5 Credit Agricole S.A., 6.637% (France)   25,782,640  
 
16,450
3,5 Credit Suisse Ltd., 5.86% (Guernsey)   15,498,746  
 
2,895
3,4,5 Deutsche Bank Capital Funding Trust VII, 5.628%  
2,727,553
  
 
7,200
4 Dresdner Funding Trust I, 8.151%, 6/30/31   8,250,516  
 
12,025
3 Everest Reinsurance Holdings, Inc., 6.60%, 5/15/37  
11,146,033
  
 
25,000
3,4,5 HBOS Plc, 6.657% (United Kingdom)   22,703,750  
 
7,000
3,4,5 HSBC Capital Funding LP, Ser. 2, 10.176% (Jersey Channel Islands)  
9,769,256
  
 
3,250
3 Huntington Capital III, 6.65%, 5/15/37   3,055,331  
 
25,100
3,4,5 ICICI Bank Ltd., 7.25% (India)   24,422,576  
 
10,000
3,5 ING Groep N.V., 5.775% (Netherlands)   9,616,440  
 
12,875
3 JPMorgan Chase Capital XXI, Ser. U, 6.309%, 2/02/37  
12,714,745
  
 
22,945
3 JPMorgan Chase Capital XXIII, 6.36%, 5/15/47   20,896,608  
 
5,000
5 Kazkommerts Finance 2 BV, 9.25% (Netherlands)  
4,685,000
  
 
5,000
3,5 Lehman Brothers Holdings Capital Trust V, Ser. MTN, 5.857%  
4,728,100
  
 
11,600
 3,4 Liberty Mutual Group, Inc., Ser. B, 7.00%, 3/15/37  
10,526,281
  
 
4,225
3 Lincoln National Corp., 6.05%, 4/20/67   3,952,306  
 
13,000
3,4,5 Lloyds TSB Group Plc, 6.267% (United Kingdom)  
11,681,514
  
 
10,000
 3,4 Mangrove Bay Pass-Through Trust, 6.102%, 7/15/33  
9,800,900
  
 
21,000
3,4,5 Mizuho Capital Investment 1 Ltd., 6.686% (Cayman Islands)  
20,711,040
  
 
12,900
  Nationwide Financial Services, 6.75%, 5/15/37   11,238,441  
 
9,275
3,4,5 Northern Rock Plc, 6.594% (United Kingdom)   9,057,408  
 
9,675
3 Progressive Corp., 6.70%, 6/15/37   9,274,552  
 
5,505
3,4,5 QBE Capital Funding II LP, 6.797% (Jersey Channel Islands)  
5,140,128
  
 
10,955
 5 RBS Capital Trust, Ser. B, 6.80% (United Kingdom)  
10,746,943
  
 
25,000
3,4,5 Resona Preferred Global Securities Ltd., 7.191% (Cayman Islands)  
25,242,750
  
 
10,000
3,4,5 SMFG Preferred Capital 1 Ltd., 6.078% (Cayman Islands)  
9,575,300
  
 
7,000
3,4,5 Shinsei Finance II, 7.16% (Cayman Islands)   7,021,875  
 
17,850
3,4,5 Societe Generale, 5.922% (France)   17,149,691  
 
11,300
3,4,5 Standard Chartered Plc, 7.014% (United Kingdom)  
10,184,125
  
 
28,305
3 State Street Capital Trust IV, 6.355%, 6/01/67   28,198,856  
 
2,650
3 SunTrust Capital VIII, 6.10%, 12/15/36   2,337,623  
 
27,475
3,4,5 Swiss Re Capital I LP, 6.854%   27,348,615  
 
19,100
3 Travelers Cos., Inc., 6.25%, 3/15/67   17,950,142  
 
3,225
3 Webster Capital Trust IV, 7.65%, 6/15/37   3,186,452  
 
4,400
3,4,5 White Moutains RE Group Ltd., 7.506% (Bermuda)  
4,281,930
  
 
7,150
 3,4 Woori Bank, 6.208%   6,720,800  
 
10,000
 3,5 XL Capital Ltd., Ser. E, 6.50% (Cayman Islands)  
8,924,000
  

3

BlackRock Preferred and Equity Advantage Trust (BTZ) (continued)
(Percentages shown are based on Net Assets)

Principal
         
Amount
                  
(000)
 
Description
 
Value
  
      Financial Institutions— (cont’d)      
$
          15,220
 3,4 ZFS Finance Trust I, 6.50%, 5/09/37 $ 14,252,967  
 
  Total Financial Institutions        719,350,146  
 
  Real Estate—1.7%      
 
13,000
 4,5 Sovereign Real Estate Investment Corp. (REIT), 12.00%   19,045,000  
 
  Total Trust Preferred Stocks   756,982,380  
 
  Corporate Bonds—11.4%      
 
  Automotive—0.4%      
 
5,000
  Lear Corp., Ser. B, 8.75%, 12/01/16   4,625,000  
 
  Basic Materials—0.2%      
 
2,350
4 Ineos Group Holdings Plc, 8.50%, 2/15/16 (United Kingdom)   2,150,250  
 
  Commercial Services—0.4%      
 
5,000
4 Quebecor World, Inc., 9.75%, 1/15/15 (Canada)
 
 4,800,000  
 
  Consumer Products—0.4%      
 
5,000
 4,6 Michaels Stores, Inc., 11.375%, 11/01/16   4,825,000  
 
  Energy—1.2%      
 
6,250
  CMS Energy Corp., 6.55%, 7/17/17   6,018,475  
 
2,610
4 Halliburton Co., 7.60%, 8/15/96   2,903,398  
 
5,000
3 Southern Union Co., 7.20%, 11/01/66   5,025,965  
 
  Total Energy   13,947,838  
 
  Entertainment & Leisure—0.6%      
 
2,500
  AMC Entertainment, Inc., 11.00%, 2/01/16   2,581,250  
 
2,000
  Harrah’s Operating Co., Inc., 5.75%, 10/01/17 1,420,000  
 
3,000
  Station Casinos, Inc., 6.875%, 3/01/16   2,527,500  
 
  Total Entertainment & Leisure   6,528,750  
 
  Financial Institutions—4.5%      
 
20,000
4 CDX North America High Yield, 8-T1, 7.625%, 6/29/12   18,050,000  
 
6,500
 3,4 ICICI Bank Ltd., 6.375%, 4/30/22 (India)   6,169,988  
 
4,550
  MetLife, Inc., 6.40%, 12/15/36   4,068,856  
 
5,000
4 Momentive Performance Materials, Inc., 9.75%, 12/01/14   4,800,000  
 
15,000
3 Reinsurance Group of America, Inc., 6.75%, 12/15/65   14,584,980  
 
3,130
 3 Royal Bank of Scotland Group Plc, 7.648%, 8/31/49 (United Kingdom)   3,427,663  
 
  Total Financial Institutions   51,101,487  
 
  Health Care—0.4%      
 
4,500
  Tenet Healthcare Corp., 9.875%, 7/01/14   4,005,000  
 
  Industrials—0.4%      
 
5,000
 4 Aleris Intl., Inc., 10.00%, 12/15/16   4,475,000  
 
283
7 Stan IV Ltd., 7.137%, 7/20/11   283,000  
 
  Total Industrials   4,758,000  
 
  Media—1.0%      
 
5,000
  Cablevision Systems Corp., Ser. B, 8.00%, 4/15/12   4,662,500  
 
1,000
  Nexstar Finance, Inc., 7.00%, 1/15/14   970,000  
 
5,000
  Primedia, Inc., 8.00%, 5/15/13   5,256,250  
 
  Total Media   10,888,750  
 
  Technology—1.2%      
 
5,000
 4 Freescale Semiconductor, Inc., 9.125%, 12/15/14   4,412,500  
 
5,000
  NXP BV/NXP Funding LLC, 9.50%, 10/15/15 (Netherlands)   4,337,500  
 
5,000
  SunGard Data Systems, Inc., 10.25%, 8/15/15
 
 5,000,000  
 
  Total Technology   13,750,000  
      Intelsat Ltd. (Bermuda)      
  3,325 3    8.886%, 1/15/15   3,341,625  
  5,000      11.25%, 6/15/16   5,225,000  
      Total Telecommunications   8,566,625  
      Total Corporate Bonds   129,946,700  
      Total Long-Term Investments (cost $1,703,196,311)  
1,633,354,927
 
      SHORT-TERM INVESTMENTS—2.0%      
      U.S. Government and Agency Discount Notes—1.2%
  13,000 8 Federal Home Loan Bank Disc. Notes, 5.091%, 8/01/07   13,000,000  
           
Shares
         
(000)
         
      Money Market Fund—0.8%      
  9,400   SSgA Tax Free Money Mkt. Fund - Class A   9,400,000  
      Total Short-Term Investments (cost $22,400,000)   22,400,000  
Contracts
         
      OUTSTANDING CALL OPTIONS PURCHASED—0.0%
      S&P 500 Index,      
  100      strike price $1,525, expires 8/18/07   30,000  
  100      strike price $1,560, expires 9/22/07   40,000  
      Total Outstanding Options Purchased (cost $415,400)   70,000  
      Total Investments before outstanding options written (cost $1,726,011,7119)   1,655,824,927  
      OUTSTANDING CALL OPTIONS WRITTEN—0.0%
      S&P 500 Index,      
  (20)      strike price $1,545, expires 8/18/07   (31,000
)
  (159)      strike price $1,560, expires 8/18/07   (95,100
)
      Total Outstanding Options Written (premium received $3,172,080)   (126,100
)
Total Investments net of outstanding options written—145.0%
$
1,655,698,827  
Liabilities in excess of other assets—(4.5)%   (51,578,880)  
Preferred shares at redemption value, including dividends payable —(40.5)%   (462,332,566
)
Net Assets Applicable to Common Shareholders—100%
$
1,141,787,381   

 

 
1     

Non-income producing security.
 
2     

Security, or a portion thereof, pledged as collateral with a value of $19,545,877 on 96 long S&P 500 futures contracts expiring September 2007, 539 long U.S. Treasury Bond futures contracts expiring September 2007, 758 long U.S. Treasury Note futures contracts expiring September 2007 and 8,511 short U.S. Treasury Note futures contracts expiring September 2007. The notional value of such contracts on July 31, 2007 was $739,912,978, with an unrealized loss of $14,058,048.
 
3     

Variable rate security. Rate shown is interest rate as of July 31, 2007.
 
4     

Security is not registered under the Securities Act of 1933. These securities may be resold in transactions in accordance with Rule 144A under that Act, to qualified institutional buyers. As of July 31, 2007, the Trust held 46.6% of its net assets, with a current market value of $532,526,674, in securities restricted as to resale.
 
5     

The security is a perpetual bond and has no stated maturity date.
 
6     

Entire or partial principal amount pledged as collateral for reverse repurchase agreements.
   
7

Security is fair valued.
 
8     

Represents current yield as of July 31, 2007.
 
9     

Cost for federal income tax purposes is $1,726,011,712. The net unrealized depreciation on a tax basis is $70,186,785, consisting of $23,561,550 gross unrealized appreciation and $93,748,335 gross unrealized depreciation.
 

4

BlackRock Preferred and Equity Advantage Trust (BTZ) (continued)
(Percentages shown are based on Net Assets)

For Trust compliance purposes, the Trust's sector and industry classifications refer to any one or more of the Standard Industry Codes as defined by the SEC. This definition may not apply for purposes of this report, which may combine sector and industry sub-classifications for reporting ease.

 
KEY TO ABBREVIATIONS
     ADR — American Depositary Receipt     
REIT — Real Estate Investment Trust
 

 

5

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 and 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 (17 CFR 270.30a-3(d)) 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 Preferred and Equity Advantage Trust

By:     
/s/ Donald C. Burke
                   
  Donald C. Burke,  
  Treasurer of  
  BlackRock Preferred and Equity Advantage Trust
     
Date: September 20, 2007  

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/ Robert S. Kapito
                   
  Robert S. Kapito  
  President (principal executive officer) of
  BlackRock Preferred and Equity Advantage Trust
     
Date: September 20, 2007  
     
By:     
/s/ Donald C. Burke
                   
  Donald C. Burke,  
  Treasurer (principal financial officer) of
  BlackRock Preferred and Equity Advantage Trust
     
Date: September 20, 2007