Enhanced Govt & Income -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

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 811-21506

Name of Fund: BlackRock Enhanced Capital and Income Fund, Inc. (CII)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: Donald C. Burke, Chief Executive Officer, BlackRock
Enhanced Capital and Income Fund, Inc., 800 Scudders Mill Road, Plainsboro, NJ, 08536.
Mailing address: P.O. Box 9011, Princeton, NJ, 08543-9011

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

Date of fiscal year end: 12/31/2008

Date of reporting period: 07/01/2008 – 09/30/2008

Item 1 – Schedule of Investments

BlackRock Enhanced Capital and Income Fund, Inc.         
Schedule of Investments September 30, 2008 (Unaudited)    (Percentages shown are based on Net Assets) 
 
Industry    Common Stocks    Shares         Value 
 
 
 
Aerospace &    Honeywell International, Inc.    46,700    $ 1,940,385 
Defense - 4.8%    Northrop Grumman Corp.    54,500    3,299,430 
    Raytheon Co.    84,200    4,505,542 
           
            9,745,357 
 
 
 
Capital Markets - 1.5%    The Bank of New York Mellon Corp.    95,925    3,125,237 
 
 
 
Chemicals - 2.1%    E.I. du Pont de Nemours & Co.    107,600    4,336,280 
 
 
 
Commercial Banks - 0.6%    Wells Fargo & Co.    30,700    1,152,171 
 
 
 
Computers &    Hewlett-Packard Co.    95,000    4,392,800 
Peripherals - 4.5%    International Business Machines Corp.    40,800    4,771,968 
           
            9,164,768 
 
 
 
Diversified Financial    Bank of America Corp.    103,527    3,623,445 
Services - 7.4%    Citigroup, Inc.    100,700    2,065,357 
    JPMorgan Chase & Co.    200,972    9,385,392 
           
            15,074,194 
 
 
 
Diversified    AT&T Inc.    139,570    3,896,794 
Telecommunication    Qwest Communications International Inc.    921,200    2,975,476 
Services - 5.3%    Verizon Communications, Inc.    122,000    3,914,980 
           
            10,787,250 
 
 
 
Electric Utilities - 3.2%    FPL Group, Inc.    68,000    3,420,400 
    The Southern Co.    82,400    3,105,656 
           
            6,526,056 
 
 
 
Energy Equipment &    BJ Services Co.    304,300    5,821,259 
Services - 5.9%    Halliburton Co.    192,600    6,238,314 
           
            12,059,573 
 
 
 
Food Products - 8.1%    General Mills, Inc.    83,300    5,724,376 
    Kraft Foods, Inc.    164,910    5,400,803 
    Ralcorp Holdings, Inc. (a)    1    67 
    Unilever NV (b)    194,400    5,474,304 
           
            16,599,550 
 
 
 
Health Care Equipment &    Baxter International, Inc.    32,900    2,159,227 
Supplies - 2.6%    Covidien Ltd.    58,925    3,167,808 
           
            5,327,035 
 
 
 
Health Care Providers &    Cardinal Health, Inc.    56,900    2,804,032 
Services - 1.4%             
 
 
 
Household    Clorox Co.    22,200    1,391,718 
Products - 3.1%    Kimberly-Clark Corp.    74,900    4,856,516 
           
            6,248,234 
 
 
 
IT Services - 0.5%    Unisys Corp. (a)    356,400    980,100 
 
 
 
Industrial    General Electric Co.    111,600    2,845,800 
Conglomerates - 2.4%    Tyco International Ltd.    59,625    2,088,068 
           
            4,933,868 
 
 
 
Insurance - 7.2%    Hartford Financial Services Group, Inc.    70,700    2,897,993 
    MetLife, Inc.    44,100    2,469,600 
    Prudential Financial, Inc.    35,000    2,520,000 
    The Travelers Cos., Inc.    151,600    6,852,320 
           
            14,739,913 
 
 
 

1

BlackRock Enhanced Capital and Income Fund, Inc.             
Schedule of Investments September 30, 2008 (Unaudited)    (Percentages shown are based on Net Assets) 
 
Industry    Common Stocks        Shares         Value 
 
 
 
 
Machinery - 1.6%    Deere & Co.        67,000    $ 3,316,500 
 
 
 
 
Media - 5.5%    Time Warner, Inc.        519,000    6,804,090 
    Viacom, Inc. Class B (a)        44,400    1,102,896 
    Walt Disney Co.        106,600    3,271,554 
               
                11,178,540 
 
 
 
 
Metals & Mining - 2.0%    Alcoa, Inc. (c)        182,400    4,118,592 
 
 
 
 
Multi-Utilities - 1.2%    Dominion Resources, Inc.        59,400    2,541,132 
 
 
 
 
Multiline Retail - 0.5%    Nordstrom, Inc.        34,100    982,762 
 
 
 
 
Office Electronics - 3.1%    Xerox Corp.        550,300    6,344,959 
 
 
 
 
Oil, Gas & Consumable    Anadarko Petroleum Corp.        45,200    2,192,652 
Fuels - 9.4%    Chevron Corp.        47,700    3,934,296 
    Exxon Mobil Corp.        122,200    9,490,052 
    Marathon Oil Corp.        18,400    733,608 
    Peabody Energy Corp.        65,100    2,929,500 
               
                19,280,108 
 
 
 
 
Pharmaceuticals - 9.9%    Bristol-Myers Squibb Co.        382,100    7,966,785 
    Johnson & Johnson        39,600    2,743,488 
    Pfizer, Inc.        132,900    2,450,676 
    Schering-Plough Corp.        226,000    4,174,220 
    Wyeth        76,900    2,840,686 
               
                20,175,855 
 
 
 
 
Semiconductors &    Analog Devices, Inc.        63,000    1,660,050 
Semiconductor    Fairchild Semiconductor International, Inc. (a)        250,000    2,222,500 
Equipment - 7.0%    Intel Corp.        153,400    2,873,182 
    LSI Corp. (a)        813,300    4,359,288 
    Micron Technology, Inc. (a)        762,900    3,089,745 
               
                14,204,765 
 
 
 
 
Software - 0.3%    Microsoft Corp.        22,800    608,532 
 
 
 
 
    Total Common Stocks (Cost - $232,528,118) - 101.1%        206,355,363 
 
 
 
            Beneficial     
            Interest     
    Short-Term Securities             (000)     
 
 
 
 
    BlackRock Liquidity Series, LLC Cash Sweep Series, 2.59% (d)(e)    $ 340    339,691 
 
 
 
    Total Short-Term Securities (Cost - $339,691) - 0.2%        339,691 
 
 
 
    Total Investments Before Options Written             
    (Cost - $232,867,809*) - 101.3%            206,695,054 
 
 
 
 
 
    Options Written        Contracts     
 
 
 
 
Call Options    Nordstrom, Inc., expiring January 2009 at $40        34,100    (21,313) 
    S&P 500 Index, expiring October 2008 at $1,270        61,500    (372,075) 
    S&P 500 Index, expiring October 2008 at $1,300        40,000    (107,000) 
 
 
 
 
    Total Options Written             
    (Premiums Received - $1,772,761) - (0.3)%            (500,388) 
 
 
 
 
    Total Investments, Net of Options Written - 101.0%        206,194,666 
    Liabilities in Excess of Other Assets - (1.0)%            (2,065,346) 
           
 
    Net Assets - 100.0%        $ 204,129,320 
           

2

BlackRock Enhanced Capital and Income Fund, Inc.

Schedule of Investments September 30, 2008 (Unaudited)

*      The cost and unrealized appreciation (depreciation) of investments as of September 30, 2008, as computed for federal income tax purposes, were as follows:
 
Aggregate cost    $ 233,729,355 
   
Gross unrealized appreciation    $ 11,412,879 
Gross unrealized depreciation                 (38,447,180) 
   
Net unrealized depreciation    $ (27,034,301) 
   

(a)      Non-income producing security.
 
(b)      Depositary receipts.
 
(c)      All or a portion of security has been pledged as collateral in connection with open financial futures contracts.
 
(d)      Investments in companies considered to be an affiliate of the Fund, for purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as follows:
 
    Net     
    Activity     
       Affiliate    (000)    Income 
 
 
       BlackRock Liquidity Series, LLC Cash Sweep Series    $ (13,333)    $90,895 
 
 
(e) Represents the current yield as of report date.         

        Expiration    Face    Unrealized 
Contracts    Issue    Date    Value    Appreciation 
 
 
 
 
10    S&P 500 Index    December 2008    $567,021    $16,679 
 
 
 
 

3

BlackRock Enhanced Capital and Income Fund, Inc.

Schedule of Investments September 30, 2008 (Unaudited)

  		•  Effective January 1, 2008, the Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, "Fair Value Measurements" ("FAS 157"). FAS 157 clarifies the definition of fair value, establishes a framework for measuring fair values and requires additional disclosures about the use of fair value measurements. Various inputs are used in determining the fair value of investments, which are as follows:
     
     
  		• Level 1 - price quotations in active markets/exchanges for identical securities
     
     
  		• Level 2 - other observable inputs (including, but not limited to: quoted prices for 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 circumstance, to the extent observable inputs are not available (including the Fund's own assumption used in determining the fair value of investments)
     
      The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with 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 semi-annual report.
     

    The following table summarizes the inputs used as of September 30, 2008 in determining the fair valuation of the Fund's investments:

    Valuation    Investments in    Other Financial 
    Inputs    Securities        Instruments* 
    		 
    		 
    		 
    Level 1    $ 206,355,363    $ (483,709) 
    Level 2    339,691        - 
    Level 3    -        - 
    		 
    		 
    		 
    Total    $ 206,695,054    $ (483,709) 
       
    		 
    * Other financial instruments are futures and options.     

    4

    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 Enhanced Capital and Income Fund, Inc.

    By: /s/ Donald C. Burke _
    Donald C. Burke
    Chief Executive Officer of
    BlackRock Enhanced Capital and Income Fund, Inc.

    Date: November 24, 2008

    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/ Donald C. Burke
    Donald C. Burke
    Chief Executive Officer (principal executive officer) of
    BlackRock Enhanced Capital and Income Fund, Inc.

    Date: November 24, 2008

    By: /s/ Neal J. Andrews
    Neal J. Andrews
    Chief Financial Officer (principal financial officer) of
    BlackRock Enhanced Capital and Income Fund, Inc.

    Date: November 24, 2008