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      

BlackRock Preferred and Equity Advantage Trust
(Exact name of registrant as specified in charter)

100 Bellevue Parkway, Wilmington, DE 
 
19809 
(Address of principal executive offices) 
 
(Zip code) 

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

Registrant's telephone number, including area code:   888-825-2257                  

Date of fiscal year end:      October 31, 2007
Date of reporting period:    January 31, 2007

Item 1. Schedule of Investments.

The Registrant’s unaudited schedule of investments as of the close of the reporting period pursuant to Rule 30b1-5 under the Investment Company Act of 1940 is as follows:

PORTFOLIO OF INVESTMENTS (unaudited)
JANUARY 31, 2007
BlackRock Preferred and Equity Advantage Trust (BTZ)
(Percentage of Net Assets)

    Principal        
    Amount        
Rating1
     
(000)
     
Description
 
Value
        LONG-TERM INVESTMENTS—125.0%    
        Corporate Bonds—8.0%    
        Automotive—1.2%    
B-   $ 10,000   Ford Motor Co., 7.45%, 7/16/31
$
 8,125,000
B-   5,000   Lear Corp., Ser. B, 8.75%, 12/01/16   4,987,500
        Total Automotive   13,112,500
        Basic Materials—0.4%    
B-   5,000 2 Momentive Performance Materials, Inc., 9.75%, 12/01/14   5,125,000
        Commercial Services—0.5%    
B+   5,000 2 Quebecor World, Inc., 9.75%, 1/15/15 (Canada)   5,218,750
        Consumer Products—0.9%    
Caa1   5,000 2 Michaels Stores, Inc., 11.375%, 11/01/16   5,375,000
CCC   5,000   Spectrum Brands, Inc., 7.375%, 2/01/15   4,362,500
        Total Consumer Products   9,737,500
        Entertainment & Leisure—0.6%    
B3   2,500   AMC Entertainment, Inc., 11.00%, 2/01/16   2,825,000
BB   2,000   Harrah's Operating, Inc., 5.75%, 10/01/17   1,697,696
B   3,000   Station Casinos, Inc., 6.875%, 3/01/16   2,741,250
        Total Entertainment & Leisure   7,263,946
        Financial Institutions—0.6%    
Baa2   6,500 2,3 ICICI Bank Ltd., 6.375%, 4/30/22 (India)   6,466,720
        Health Care—0.4%    
B-   4,500   Tenet Healthcare Corp., 9.875%, 7/01/14   4,556,250
        Industrials—0.4%    
B-   5,000 2 Aleris Intl., Inc., 10.00%, 12/15/16   5,175,000
        Media—1.1%    
B+   5,000   Cablevision Systems Corp., Ser. B, 8.00%, 4/15/12   5,043,750
B3   1,000   Nexstar Finance, Inc., 7.00%, 1/15/14   955,000
B2   5,000   Primedia, Inc., 8.00%, 5/15/13   4,812,500
Caa1   2,000   Vertis, Inc., Ser. B, 10.875%, 6/15/09   2,030,000
        Total Media   12,841,250
        Technology—1.4%    
B   5,000 2 Freescale Semiconductor, Inc., 9.125%, 12/15/14   4,968,750
B+   5,000 2 NXP BV/NXP Funding LLC, 9.50%, 10/15/15 (Netherlands)   5,168,750
B-   5,000   Sungard Data Systems, Inc., 10.25%, 8/15/15   5,375,000
        Total Technology   15,512,500
        Telecommunications—0.5%    
B   5,000 2 Intelsat Ltd., 11.25%, 6/15/16 (Bermuda)   5,650,000
        Total Corporate Bonds   90,659,416
   
Shares
       
        Common Stocks—31.5%    
        Aerospace & Defense—0.3%    
    7,800   L-3 Communications Holdings, Inc.   642,252
    28,300   Lockheed Martin Corp.   2,750,477
        Total Aerospace & Defense   3,392,729
        Automotive—0.6%    
    22,100   DaimlerChrysler AG   1,381,029
    52,300   Ford Motor Co.   425,199
    70,000   General Motors Corp.   2,298,800
    40,400   Genuine Parts Co.   1,919,808

1

BlackRock Preferred and Equity Advantage Trust (BTZ) (continued)
(Percentage of Net Assets)

  Shares      
Description
   
Value
      Automotive—(cont'd)      
  10,600   Paccar, Inc.  
$
 708,822
      Total Automotive     6,733,658
      Basic Materials—1.3%      
  69,800   Alcoa, Inc.     2,254,540
  2,800   Allegheny Technologies, Inc.     289,772
  29,700   Aluminum Corp. of China Ltd. (ADR)     669,438
  5,200   BASF AG (ADR)     503,204
  18,700   E.I. du Pont de Nemours & Co.     926,772
  24,800   Freeport-McMoRan Copper & Gold, Inc.     1,426,248
  59,800   MeadWestvaco Corp.     1,802,372
  8,400   Nucor Corp.     542,136
  5,700   Phelps Dodge Corp.     704,520
  24,600   Plum Creek Timber Co., Inc.     990,150
  31,000   Temple-Inland, Inc.     1,548,140
  8,200   United States Steel Corp.     684,618
  30,700   Weyerhaeuser Co.     2,302,500
      Total Basic Materials     14,644,410
      Building & Development—0.4%      
  45,300   DR Horton, Inc.     1,316,418
  7,300   KB Home     395,806
  24,800   Lennar Corp., Class A     1,348,624
  61,200   Masco Corp.     1,957,788
      Total Building & Development     5,018,636
      Conglomerates—0.8%      
  240,900   General Electric Co.     8,684,445
      Consumer Products—4.9%      
  90,200   Altria Group, Inc.     7,882,578
  8,600 4 Amazon.com, Inc.     323,962
  32,300 4 Amgen, Inc.     2,272,951
  55,900   Anheuser-Busch Cos., Inc.     2,849,223
  30,600   Clorox Co.     2,001,852
  10,200 4 Coach, Inc.     467,772
  113,100   Coca-Cola Co.     5,415,228
  46,500   Federated Department Stores, Inc.     1,929,285
  21,800   Fortune Brands, Inc.     1,825,096
  67,700   Gap, Inc. (The)     1,297,809
  25,800   Harley-Davidson, Inc.     1,761,366
  77,400   Home Depot, Inc.     3,153,276
  6,900   JC Penney Co., Inc.     560,556
  47,700   Limited Brands, Inc.     1,332,738
  107,000   Mattel, Inc.     2,606,520
  72,900   McDonald's Corp.     3,233,115
  65,000   Newell Rubbermaid, Inc.     1,920,100
  13,700   Nordstrom, Inc.     763,227
  22,900   OfficeMax, Inc.     1,105,841
  18,800   PepsiCo, Inc.     1,226,512
  86,900   Procter & Gamble Co.     5,637,203
  4,800   Reynolds American, Inc.     309,600
  9,500   Universal Corp.     459,135
  40,800   UST, Inc.     2,343,552
  4,700   VF Corp.     356,589
  31,100   Wal-Mart Stores, Inc.     1,483,159
  24,500   Whole Foods Market, Inc.     1,058,155
      Total Consumer Products     55,576,400
      Energy—3.8%      
  11,000   American Electric Power, Inc.     478,830
  83,600   Chevron Corp.     6,092,768
  66,700   ConocoPhillips     4,429,547
  15,700   Consol Energy, Inc.     540,551
  54,600   Consolidated Edison, Inc.     2,636,088
  40,300   DTE Energy Co.     1,868,711
  34,800   Duke Energy Corp.     685,212

2

BlackRock Preferred and Equity Advantage Trust (BTZ) (continued)
(Percentage of Net Assets)

  Shares      
Description
   
Value
      Energy—(cont'd)      
  184,000   Exxon Mobil Corp.  
$
 13,634,400
  17,000   Great Plains Energy, Inc.     532,610
  39,000   Halliburton Co.     1,152,060
  6,000   KeySpan Corp.     244,800
  9,400   Nicor, Inc.     427,700
  7,600   NiSource, Inc.     180,880
  7,300   Peabody Energy Corp.     298,059
  17,500   Rowan Cos., Inc.     575,575
  39,000   Royal Dutch Shell Plc (ADR)     2,661,750
  21,000   Sasol Ltd. (ADR)     715,260
  6,100   Schlumberger Ltd.     387,289
  13,900   Smith Intl., Inc.     551,552
  21,000   Southern Co.     767,130
  17,400 4 Spectra Energy Corp.     454,488
  38,300   Total SA (ADR)     2,606,315
  32,300   Williams Cos., Inc.     871,777
      Total Energy     42,793,352
      Entertainment & Leisure—0.1%      
  39,200   Brunswick Corp.     1,337,112
      Financial Institutions—5.8%      
  43,300   Allstate Corp.     2,604,928
  7,200   American Express Co.     419,184
  48,500 5 American Intl. Group, Inc.     3,319,825
  34,900   Apollo Investment Corp.     774,780
  18,300   Arthur J. Gallagher & Co.     524,661
  92,800   Bank of America Corp.     4,879,424
  55,100   BB&T Corp.     2,328,526
  1,000   Chicago Mercantile Exchange Holdings, Inc.     563,300
  2,800   Cigna Corp.     370,720
  186,500   Citigroup, Inc.     10,281,745
  6,400   Comerica, Inc.     379,520
  30,600   Corus Bancshares, Inc.     651,780
  5,200   Fannie Mae     293,956
  27,800   First Horizon National Corp.     1,212,080
  13,600   Goldman Sachs Group, Inc.     2,885,376
  30,300   HSBC Holdings Plc (ADR)     2,782,449
  61,300   JPMorgan Chase & Co.     3,122,009
  11,100   KeyCorp     423,687
  7,400   Legg Mason, Inc.     775,890
  16,300   Lincoln National Corp.     1,094,382
  25,600   MCG Capital Corp.     506,112
  30,600   Morgan Stanley     2,533,374
  92,200   National City Corp.     3,489,770
  94,200   Regions Financial Corp.     3,415,692
  11,100   St. Paul Travelers Cos., Inc. (The)     564,435
  124,300   US Bancorp     4,425,080
  101,000   Wachovia Corp.     5,706,500
  86,600   Washington Mutual, Inc.     3,861,494
  46,400   Wells Fargo & Co.     1,666,688
  9,400   Western Union Co. (The)     209,996
      Total Financial Institutions     66,067,363
      Health Care—3.5%      
  62,800   Abbott Laboratories     3,328,400
  14,500   Aetna, Inc.     611,320
  5,100   Applera Corp. - Applied Biosystems Group     177,276
  8,100   Bausch & Lomb, Inc.     451,008
  47,300   Baxter Intl., Inc.     2,348,918
  30,600   Becton Dickinson & Co.     2,354,364
  9,300 4 Biogen Idec, Inc.     449,562
  32,600 4 Boston Scientific Corp.     601,470
  10,300 4 Celgene Corp.     552,904
  39,200   Eli Lilly & Co.     2,121,504
  7,300 4 Genzyme Corp.     479,829

3

BlackRock Preferred and Equity Advantage Trust (BTZ) (continued)
(Percentage of Net Assets)

 
Shares
     
Description
   
Value
      Health Care—(cont'd)      
  4,600 4 Humana, Inc.  
$
 255,300
  106,000   Johnson & Johnson     7,080,800
  6,600 4 Medimmune, Inc.     228,756
  38,500   Medtronic, Inc.     2,057,825
  111,800   Merck & Co., Inc.     5,003,050
  292,800 5 Pfizer, Inc.     7,683,072
  11,100   Quest Diagnostics, Inc.     582,528
  9,800 4 St. Jude Medical, Inc.     419,048
  8,200   Stryker Corp.     507,908
  11,300 4 Thermo Fisher Scientific, Inc.     540,705
  22,900   UnitedHealth Group, Inc.     1,196,754
  6,600 4 Zimmer Holdings, Inc.     555,852
      Total Health Care     39,588,153
      Industrials—1.4%      
  21,000   3M Co.     1,560,300
  40,700   Boeing Co.     3,645,092
  11,400   Cummins, Inc.     1,533,984
  6,600   Danaher Corp.     488,796
  14,800   Deere & Co.     1,484,144
  6,700   Fluor Corp.     553,420
  60,500   Honeywell Intl., Inc.     2,764,245
  64,000   Leggett & Platt, Inc.     1,551,360
  2,800 4 Terex Corp.     159,292
  20,300   Textron, Inc.     1,891,351
      Total Industrials     15,631,984
      Media—0.6%      
  75,100   CBS Corp., Class B     2,340,867
  25,300 4 Comcast Corp., Class A     1,121,296
  21,400 4 DirecTV Group, Inc. (The)     521,946
  39,200   Dow Jones & Co., Inc.     1,478,232
  33,500   Time Warner, Inc.     732,645
  8,300   Walt Disney Co. (The)     291,911
      Total Media     6,486,897
      Pharmaceuticals—0.6%      
  101,100   Bristol-Myers Squibb Co.     2,910,669
  11,800   Caremark Rx, Inc.     722,868
  12,700 4 Gilead Sciences, Inc.     816,864
  35,800   Wyeth     1,768,878
      Total Pharmaceuticals     6,219,279
      Real Estate—0.7%      
  33,700   Crescent Real Estate Equities Co. (REIT)     676,022
  23,100   Equity Residential (REIT)     1,300,068
  15,600   First Industrial Realty Trust, Inc. (REIT)     737,256
  32,100   Health Care Property Investors, Inc. (REIT)     1,324,125
  30,800   Hospitality Properties Trust (REIT)     1,503,040
  56,300   HRPT Properties Trust (REIT)     733,026
  20,200   Inland Real Estate Corp. (REIT)     408,444
  20,800   Starwood Hotels & Resorts Worldwide, Inc.     1,301,664
      Total Real Estate     7,983,645
      Technology—4.3%      
  15,200 4 Advanced Micro Devices, Inc.     236,360
  41,900 4 Agilent Technologies, Inc.     1,340,800
  20,600   Analog Devices, Inc.     674,650
  23,600 4 Apple, Inc.     2,023,228
  13,000 4 Broadcom Corp.     414,960
  115,100 4 Cisco Systems, Inc.     3,060,509
  3,900 4 Cognizant Technology Solutions Corp.     332,631
  8,300 4 Dell, Inc.     201,275
  32,100 4 eBay, Inc.     1,039,719
  60,900 4 EMC Corp.     851,991
  5,900 4 Google, Inc.     2,957,670
  84,600   Hewlett-Packard Co.     3,661,488

4

BlackRock Preferred and Equity Advantage Trust (BTZ) (continued)
(Percentage of Net Assets)

Rating1
     
Shares
     
Description
   
Value
        Technology—(cont'd)      
    234,100   Intel Corp.  
$
 4,906,736
    59,400   Intl. Business Machines Corp.     5,889,510
    46,700   Maxim Integrated Products, Inc.     1,438,360
    296,300   Microsoft Corp.     9,143,818
    9,900 4 Nvidia Corp.     303,435
    25,400   Oracle Corp.     435,864
    22,100   Paychex, Inc.     884,221
    42,700   Pitney Bowes, Inc.     2,044,049
    6,200 4 SanDisk Corp.     249,240
    115,800 4 Sanmina-SCI Corp.     405,300
    97,500 4 Sun Microsystems, Inc.     647,400
    23,500 4 Symantec Corp.     416,185
    212,200   Taiwan Semiconductor Manufacturing Co. Ltd. (ADR)     2,315,102
    56,000   Xilinx, Inc.     1,360,800
    33,900 4 Yahoo! Inc.     959,709
        Total Technology     48,195,010
        Telecommunications—2.0%      
    207,987   AT&T, Inc.     7,826,551
    61,500   Chunghwa Telecom Co. Ltd. (ADR)     1,273,665
    64,000   Citizens Communications Co.     938,240
    43,300 4 Corning, Inc.     902,372
    15,700 4 Juniper Networks, Inc.     284,484
    84,400   Motorola, Inc.     1,675,340
    77,000   Qualcomm, Inc.     2,899,820
    14,900   Sprint Nextel Corp.     265,667
    47,000   Tele Norte Leste Participacoes (ADR)     634,030
    156,000   Verizon Communications, Inc.     6,009,120
        Total Telecommunications     22,709,289
        Transportation—0.4%      
    26,500   Ship Finance Intl. Ltd.     628,845
    52,500   United Parcel Service, Inc., Class B     3,794,700
        Total Transportation     4,423,545
        Total Common Stocks     355,485,907
        Preferred Stocks—27.7%      
        Financial Institutions—24.8%      
BBB   400,000   ACE Ltd., Ser. C, 7.80%     10,400,000
A+   400,000   Aegon N.V., 6.50%     10,332,000
        Arch Capital Group Ltd. (Bermuda)      
BBB   100,000  
     Ser. A, 8.00%
    2,640,000
BBB   160,000  
     Ser. B, 7.875%
    4,152,000
BBB-   1,000,000 3 Aspen Insurance Holdings Ltd., 7.401%     25,750,000
BBB-   280,000 3 Axis Capital Holdings Ltd., Ser. B, 7.50%     29,741,264
A+   500,000   Bank of America Corp., Ser. D, 6.204%     13,250,000
BBB   10,000 2 Centaur Funding Corp., Ser. B, 9.08%     11,603,125
Baa2   210,000   Citizens Funding Trust I, 7.50%     5,441,100
A-   906,000   Countrywide Capital V, 7.00%     22,921,799
A+   600,000   Deutsche Bank Capital Funding Trust VIII, 6.375%     15,110,459
BBB-   80,000   Endurance Specialty Holdings Ltd., Ser. A, 7.75%     2,092,000
AA-   545,000   Federal Home Loan Mortgage Corp., 5.57%     13,625,000
AA-   300,000   HSBC Holdings Plc, Ser. A, 6.20%     7,650,000
A   200,000   ING Groep N.V., 6.125%     5,028,000
NA   6,000   Irwin Financial Corp., Zero Coupon     6,033,000
A-   295,000   KeyCorp Capital IX, 6.75%     7,513,650
A+   298,100   National City Capital Trust II, 6.625%     7,565,778
A   265,600   PartnerRe Ltd., Ser. C, 6.75%     6,756,200
BBB   760,000   RenaissanceRe Holdings Ltd., Ser. D, 6.60%     18,772,000

5

BlackRock Preferred and Equity Advantage Trust (BTZ) (continued)
(Percentage of Net Assets)

Rating1
     
Shares
          
Description
    Value
   
  Financial Institutions—(cont'd)      
AA  
665,000
  Royal Bank of Scotland Group Plc (ADR), Ser. R, 6.125%  
$
 16,591,750
   
  Santander Finance Preferred SA Unipersonal (Spain)      
A+  
640,000
2    6.50%     16,043,008
A+  
520,000
2    6.80%     13,048,776
A-  
300,000
  XL Capital Ltd., Ser. B, 7.625%     7,692,000
   
 
Total Financial Institutions
    279,752,909
   
  Real Estate—2.9%      
BBB-  
341,300
  PS Business Park, Inc. (REIT), Ser. P, 6.70%     8,409,632
BBB+  
1,000,000
  Public Storage, Inc. (REIT), Ser. M, 6.625%     24,750,000
   
  Total Real Estate     33,159,632
   
  Total Preferred Stocks     312,912,541
   
Principal
         
   
Amount
         
   
(000)
         
   
  Trust Preferred Stocks—57.8%      
   
  Financial Institutions—57.4%      
BBB  
$ 23,273
6 AON Corp., 8.205%, 1/01/27     26,679,237
A  
45,000
 2,3,6,7 AXA S.A., 6.463% (France)     43,940,115
   
  Barclays Bank Plc (United Kingdom)      
AA  
15,000
2,3,7    5.926%     15,088,800
AA  
20,000
2,3,6,7    6.86%     21,577,400
BBB-  
171
7 Berkley W R Capital Trust II, 6.75%     4,276,812
A2  
30,000
 2,3,6,7 BOI Capital Funding No. 3, 6.107% (Ireland)     29,356,710
Baa3  
10,000
7 BTA Finance Luxembourg S.A., 8.25% (Luxembourg)     9,481,300
Baa2    
5,000
  Capital One Capital III, 7.686%, 8/15/36     5,627,175
Baa2  
25,000
  Capital One Capital IV, 6.745%, 2/17/37     25,160,000
A+  
20,000
 2,3,6,7 Commonwealth Bank of Australia, 6.024% (Australia)     20,069,340
B+  
90,000
2 DJ CDX NA HY, Ser. 7-T1, 8.375%, 12/29/11     91,912,500
A-  
120
7 Everest Re Capital Trust, 7.85%,     3,033,756
   
  HBOS Plc (United Kingdom)      
AA-  
30,000
2,3,6,7    5.92%     29,177,190
AA-  
10,000
2,3,6,7    6.413%     9,791,890
AA-  
16,000
2,3,7 HSBC Capital Funding LP, Ser. 2, 10.176% (Jersey Channel Islands)     23,341,328
Baa2  
25,100
2,3,7 ICICI Bank Ltd., 7.25% (India)     25,799,688
A  
16,000
3,6,7 ING Groep N.V., 5.775% (Netherlands)     15,837,088
A  
35,000
3 JPMorgan Chase Capital XXI, Ser. U, 6.25%, 2/02/37     34,726,474
Baa3  
5,000
7 Kazkommerts Finance 2 BV, 9.25% (Netherlands)     5,237,500
A  
30,000
 2,3,6,7 Lloyds TSB Group Plc, 6.267% (United Kingdom)     29,725,350
A-  
21,000
 2,3,6,7 Mizuho Capital Investment 1 Ltd., 6.686% (Cayman Islands)     21,015,582
AA  
10,000
 3,5,6,7 RBS Capital Trust II, 6.425%     10,166,780
A-  
15,000
3,6 Reinsurance Group of America, Inc., 6.75%, 12/15/65     14,974,620
BBB-  
25,000
 2,3,6,7 Resona Preferred Global Securities Ltd., 7.191% (Cayman Islands)     26,145,875
AA  
18,000
3,6,7 Royal Bank of Scotland Group Plc, 7.648% (United Kingdom)     21,049,740
Baa2  
22,000
2,3,7 Shinsei Finance II, 7.16% (Cayman Islands)     22,268,136
Baa2  
10,000
2,3,7 Shinsei Finance Ltd., 6.418% (Cayman Islands)     9,941,580
A-  
10,000
2,3,7 SMFG Preferred Capital USD 1 Ltd., 6.078% (Cayman Islands)     9,837,200
Baa2  
85
7 Sovereign Capital Trust V, 7.75%     2,290,750
A  
20,000
2,3 Standard Chartered Plc, 6.409%, 1/30/17 (United Kingdom)     19,674,280

6

BlackRock Preferred and Equity Advantage Trust (BTZ) (continued)
(Percentage of Net Assets)

    Principal          
    Amount                   
Rating1
      (000)       Description     Value
        Financial Institutions—(cont'd)      
A1  
20,000
2,3,7 Swiss Re Capital I LP, 6.854%  
$
 20,936,700 
        Total Financial Institutions     648,140,896 
        Telecommunications—0.4%      
B   5,000 2,3 Intelsat Ltd., 8.872%, 1/15/15 (Bermuda)     5,086,247 
        Total Trust Preferred Stocks     653,227,143 
        Total Long-Term Investments (cost $1,417,051,543)     1,412,285,007 
    Shares          
    (000)          
        MONEY MARKET FUND—4.0%      
NR  
45,000
  SSgA Tax Free Money Mkt. Fund - Class A (cost $45,000,000)     45,000,000 
    Contracts          
    (000)          
        OUTSTANDING CALL OPTIONS PURCHASED—0.0%      
    50   S&P 500 Index Futures, expires 2/17/07 (cost $202,500)     200,500 
        Total investments before outstanding options written (cost $1,462,254,0438)     1,457,485,507 
        OUTSTANDING CALL OPTIONS WRITTEN—(0.3)%      
        S&P 500 Index Futures,      
    (182 )
     expires 2/17/07
    (3,246,100)
    (7 )
     expires 3/17/07
    (145,040)
        Total Outstanding Call Options Written (premium received $2,998,100)     (3,391,140)
        Total Investments net of outstanding options written—128.7%  
$
 1,454,094,367 
        Liabilities in excess of other assets (including $266,953,533 in reverse repurchase agreements payable,       
        $68,959,690 in investments purchased payable and $10,982,755 in interest receivable)—(28.7)%     (324,188,088)
        Net Assets—100%  
$
 1,129,906,279 

  ______________________
1     

Using the highest of Standard & Poor's, Moody's Investors Service or Fitch's Ratings.
2

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 January 31, 2007, the Trust held 49.4% of its net assets, with a current market value of $558,528,790, in securities restricted as to resale.
3

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

Non-income producing security.
5

Security, or a portion thereof, pledged as collateral with a value of $8,618,474 on 122 long S&P 500 Index futures contracts expiring March 2007, 1,154 long U.S. Treasury Bond futures contracts expiring March 2007, 9 short S&P 500 Index futures contracts expiring March 2007, 1,154 short U.S. Treasury Bond futures contracts expiring March 2007 and 5,016 short U.S. Treasury Note futures contracts expiring March 2007. The notional value of such contracts on January 31, 2007 was $500,052,966, with an unrealized gain of $5,359,626.
6

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

The security is a perpetual bond and has no stated maturity date.
8

Cost for federal income tax purposes is $1,462,258,966. The net unrealized depreciation on a tax basis is $4,773,459, consisting of $10,139,934 gross unrealized appreciation and $14,913,393 gross unrealized depreciation.
 
 

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
USD — U.S. Dollar

7

Item 2. Controls and Procedures.

(a) The Registrant's principal executive and principal financial officers have evaluated the Registrant's disclosure controls and procedures within 90 days of this filing and have concluded, as of that date, that the Registrant’s disclosure controls and procedures were reasonably designed to ensure that information required to be disclosed by the Registrant in this Form N-Q was recorded, processed, summarized, and reported within the required time periods and that information to be disclosed by the Registrant in this Form N-Q was accumulated and communicated to the Registrant’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

(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.

Separate certifications of the Registrant’s Principal Executive and Financial Officers pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are attached as EX-99.CERT.

8

SIGNATURES

          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.

(Registrant) BlackRock Preferred and Equity Advantage Trust

By: /s/ Donald C. Burke                                       
Name: Donald C. Burke
Title: Treasurer and Principal Financial Officer
Date: March 28, 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                                       
Name: Robert S. Kapito
Title: President and Principal Executive Officer
Date: March 28, 2007

By: /s/ Donald C. Burke                                       
Name: Donald C. Burke
Title: Treasurer and Principal Financial Officer
Date: March 28, 2007

9