BLACKROCK MUNIYIELD QUALITY FUND, INC.

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: 811-06660

Name of Fund: BlackRock MuniYield Quality Fund, Inc. (MQY)

Fund Address: 100 Bellevue Parkway, Wilmington, DE 19809

Name and address of agent for service: John M. Perlowski, Chief Executive Officer, BlackRock MuniYield

            Quality Fund, Inc., 55 East 52nd Street, New York, NY 10055

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

Date of fiscal year end: 04/30/2014

Date of reporting period: 01/31/2014

Item 1 – Schedule of Investments

Schedule of Investments January 31, 2014 (Unaudited)

   

BlackRock MuniYield Quality Fund, Inc. (MQY)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)		     Value  

Alabama — 2.7%

  

Birmingham Water Works Board, RB, Series B, 5.00%, 1/01/38

    $ 2,000      $ 2,101,200   

City of Birmingham Alabama, GO, CAB, Series A, 0.00%, 3/01/43 (a)

      560        487,603   

County of Jefferson Alabama, RB, Limited Obligation School, Series A, 4.75%, 1/01/25

      3,000        2,820,780   

University of Alabama, RB, Series A (NPFGC), 5.00%, 7/01/34

      7,125        7,234,013   
    

 

 

  
               12,643,596   

Alaska — 1.7%

     

Alaska Housing Finance Corp., RB, General Housing, Series B (NPFGC), 5.25%, 12/01/30

      600        638,730   

Alaska Housing Finance Corp., Refunding RB, Series A, 4.13%, 12/01/37

      810        802,070   

Alaska Industrial Development & Export Authority, RB, Providence Health Services, Series A, 5.50%, 10/01/41

      1,400        1,493,576   

Borough of Matanuska-Susitna Alaska, RB, Goose Creek Correctional Center (AGC), 6.00%, 9/01/32

      4,425        5,098,529   
    

 

 

  
               8,032,905   

Arizona — 0.8%

     

Greater Arizona Development Authority, RB, Series B (NPFGC), 5.00%, 8/01/35

      1,600        1,662,304   

State of Arizona, COP, Department of Administration, Series A (AGM):

     

5.00%, 10/01/27

      1,525        1,652,185   

5.25%, 10/01/28

      250        272,970   
    

 

 

  
               3,587,459   

Arkansas — 0.3%

     

Arkansas Development Finance Authority, RB, (AMBAC), 0.00%, 7/01/46 (b)

      7,000        1,253,840   

California — 18.9%

     

Alameda Corridor Transportation Authority, Refunding RB, CAB, Subordinate Lien, Series A (AMBAC), 5.45%, 10/01/25

      4,150        4,438,549   
Municipal Bonds    Par  
(000)		     Value  

California (continued)

     

Cabrillo Community College District, GO, CAB, Election of 2004, Series B (NPFGC) (b):

     

0.00%, 8/01/37

    $ 3,250      $ 868,563   

0.00%, 8/01/38

      7,405        1,863,468   

California Health Facilities Financing Authority, RB:

     

St. Joseph Health System, Series A, 5.75%, 7/01/39

      775        868,465   

Sutter Health, Series A, 5.00%, 8/15/52

      985        990,171   

Sutter Health, Series B, 5.88%, 8/15/31

      1,500        1,740,330   

California State Public Works Board, LRB, Various Judicial Council Projects, Series A, 5.00%, 3/01/38

      955        990,249   

California Statewide Communities Development Authority, RB, Kaiser Permanente, Series A, 5.00%, 4/01/42

      2,000        2,042,900   

Carlsbad California Unified School District, GO, Election of 2006, Series B, 0.00%, 5/01/34 (a)

      5,000        4,019,300   

City of San Jose California, Refunding ARB, AMT:

     

Series A (AMBAC), 5.50%, 3/01/32

      5,100        5,490,711   

Series A-1, 5.75%, 3/01/34

      1,150        1,241,494   

Coast Community College District, GO, CAB, Election of 2002, Series C (AGM), 5.00%, 8/01/31

      2,800        2,961,504   

County of Orange California Sanitation District, COP, Series B (AGM):

     

5.00%, 2/01/30

      3,500        3,736,460   

5.00%, 2/01/31

      1,200        1,282,500   

County of San Diego California Water Authority, COP, Refunding, Series A (AGM), 5.00%, 5/01/38

      3,000        3,210,600   

County of San Joaquin California Transportation Authority, Refunding RB, Limited Tax Measure K, Series A, 6.00%, 3/01/36

      900        1,055,538   

El Monte Union High School District, GO, Series C (AGM), 5.25%, 6/01/28

      6,110        6,546,315   

Grossmont Union High School District, GO, CAB, Election of 2004, 0.00%, 8/01/31 (b)

      5,000        2,081,850   

 

                
   BLACKROCK MUNIYIELD QUALITY FUND, INC.    JANUARY 31, 2014    1

Schedule of Investments (continued)

   

BlackRock MuniYield Quality Fund, Inc. (MQY)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)		     Value  

California (continued)

  

Grossmont-Cuyamaca Community College District, GO, Refunding CAB, Election of 2002, Series C (AGC), 0.00%, 8/01/30 (b)

    $ 10,030      $ 4,497,853   

Hartnell Community College District California, GO, CAB, Election of 2002, Series D, 0.00%, 8/01/34 (a)

      4,125        2,940,836   

Los Angeles Community College District California, GO, Election of 2001, Series A (NPFGC), 5.00%, 8/01/32

      770        825,024   

Mount San Antonio Community College District, GO, Refunding, CAB, Election of 2008, Series A, 0.00%, 8/01/43 (a)

      1,945        969,641   

Poway Unified School District, GO, Refunding, CAB, School Facilities Improvement, Election of 2008, Series B, 0.00%, 8/01/36 (b)

      5,000        1,554,600   

Rio Hondo Community College District California, GO, CAB, Election of 2004, Series C, 0.00%, 8/01/37 (b)

      4,005        1,163,453   

San Bernardino Community College District, GO, CAB, Election of 2008, Series B, 0.00%, 8/01/34 (a)

      10,000        8,293,300   

San Diego California Unified School District, GO, CAB, Election of 2008, Series C, 0.00%, 7/01/38 (b)

      2,200        596,112   

San Diego California Unified School District, GO, Refunding, CAB, Series R-1, 0.00%, 7/01/31 (b)

      1,725        728,623   

San Jose California Unified School District, GO, Election of 2002, Series B (NPFGC), 5.00%, 8/01/15 (c)

      2,825        3,027,327   

San Marcos Unified School District, GO, Election of 2010, Series A:

     

5.00%, 8/01/34

      900        960,822   

5.00%, 8/01/38

      760        803,274   

State of California, GO, Refunding, Various Purpose:

     

5.00%, 2/01/38

      2,000        2,096,680   

5.00%, 9/01/41

      2,300        2,394,093   

5.00%, 10/01/41

      1,300        1,353,651   
Municipal Bonds    Par  
(000)		     Value  

California (concluded)

  

State of California, GO:

     

Various Purpose, 5.50%, 3/01/40

    $ 2,000      $ 2,202,440   

Various Purpose, 5.00%, 4/01/42

      1,500        1,564,230   

5.50%, 4/01/28

      5        5,039   

Ventura County Community College District, GO, Election of 2002, Series B (NPFGC), 5.00%, 8/01/15 (c)

      1,825        1,955,141   

Yosemite Community College District, GO, CAB, Election of 2004, Series D, 0.00%, 8/01/36 (b)

      15,000        4,532,850   
    

 

 

  
               87,893,956   

Colorado — 0.4%

  

Regional Transportation District, COP, Refunding, Series A, 5.38%, 6/01/31

      1,885        2,024,829   

Florida — 10.4%

  

City of Jacksonville Florida, Refunding RB, Transportation, Series A, 5.00%, 10/01/30

      380        410,180   

County of Duval Florida School Board, COP, Master Lease Program (AGM), 5.00%, 7/01/33

      4,765        5,001,535   

County of Highlands Florida Health Facilities Authority, RB, Adventist Health System/Sunbelt, Series B, 6.00%, 11/15/37

      1,250        1,418,187   

County of Hillsborough Florida Aviation Authority, RB, Series A, AMT (AGC), 5.38%, 10/01/33

      2,700        2,910,357   

County of Lee Florida, Refunding ARB, Series A, AMT:

     

5.63%, 10/01/26

      1,280        1,399,616   

5.38%, 10/01/32

      1,700        1,769,360   

County of Miami-Dade Florida, GO, Building Better Communities Program, Series B, 6.38%, 7/01/28

      3,300        3,831,498   

County of Miami-Dade Florida, RB, Seaport:

     

Series A, 6.00%, 10/01/38

      2,755        3,078,134   

Series B, AMT, 6.00%, 10/01/30

      870        966,274   

Series B, AMT, 6.25%, 10/01/38

      560        623,543   

Series B, AMT, 6.00%, 10/01/42

      895        975,774   

 

                
2    BLACKROCK MUNIYIELD QUALITY FUND, INC.    JANUARY 31, 2014   

Schedule of Investments (continued)

   

BlackRock MuniYield Quality Fund, Inc. (MQY)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

     Value  

Florida (concluded)

  

County of Miami-Dade Florida, Refunding RB, Special Obligation, Sub-Series B, 5.00%, 10/01/37

    $ 1,705      $ 1,736,099   

County of Miami-Dade Florida Aviation, Refunding ARB, Series A:

     

Miami International Airport, AMT (AGC), 5.00%, 10/01/40

      1,000        1,003,250   

5.50%, 10/01/36

      6,490        6,894,327   

AMT, 5.00%, 10/01/32

      3,550        3,614,752   

County of Palm Beach Florida Solid Waste Authority, Refunding RB, 5.00%, 10/01/31

      2,825        2,986,844   

County of Sarasota Florida Public Hospital District, RB, Sarasota Memorial Hospital Project, Series A, 5.63%, 7/01/39

      375        388,320   

Florida Ports Financing Commission, Refunding RB, State Transportation Trust Fund, Series B, AMT:

     

5.13%, 6/01/27

      1,395        1,524,721   

5.38%, 10/01/29

      1,900        2,098,588   

Florida State Department of Environmental Protection, RB, Florida Forever Project, Series B (NPFGC), 5.00%, 7/01/27

      1,350        1,477,305   

Reedy Creek Improvement District, GO, Series A, 5.25%, 6/01/33

      1,620        1,756,647   

South Florida Water Management District, COP:

     

(AGC), 5.00%, 10/01/22

      700        774,928   

(AMBAC), 5.00%, 10/01/36

      1,500        1,570,830   
    

 

 

  
               48,211,069   

Georgia — 1.8%

  

City of Atlanta Georgia Department of Aviation, Refunding GARB, Series C (AGM), 5.00%, 1/01/33

      5,000        5,079,900   

County of Burke Georgia Development Authority, Refunding RB, Oglethorpe Power-Vogtle Project, Series C, 5.70%, 1/01/43

      3,150        3,311,469   
    

 

 

  
               8,391,369   

Illinois — 18.4%

  

City of Chicago Illinois, GARB, O’Hare International Airport 3rd Lien:

     

Series A, 5.75%, 1/01/39

      5,500        5,824,115   
Municipal Bonds   

Par  

(000)

     Value  

Illinois (continued)

  

City of Chicago Illinois, GARB, O’Hare International Airport 3rd Lien (concluded):

     

Series B-2, AMT (Syncora), 6.00%, 1/01/29

    $ 1,930      $ 1,937,353   

City of Chicago Illinois, GO:

     

CAB, City Colleges (NPFGC), 0.00%, 1/01/31 (b)

      13,000        4,974,450   

Series A, 5.25%, 1/01/35

      1,250        1,267,300   

City of Chicago Illinois, Refunding GARB, O’Hare International Airport AMT:

     

Series C, 5.38%, 1/01/39

      4,090        4,196,095   

Passenger Facility Charge, Series B, 5.00%, 1/01/31

      7,500        7,651,950   

City of Chicago Illinois, Refunding RB, Series A:

     

Sales Tax Receipts, 5.00%, 1/01/41

      1,140        1,167,645   

Waterworks, Second Lien (AMBAC), 5.00%, 11/01/36

      1,500        1,539,045   

City of Chicago Illinois Board of Education, GO, Series A, 5.50%, 12/01/39

      2,975        3,037,356   

City of Chicago Illinois Park District, GO, Harbor Facilities, Series C, 5.25%, 1/01/40

      750        773,640   

City of Chicago Illinois Transit Authority, RB, Sales Tax Receipts, 5.25%, 12/01/36

      840        875,515   

County of Cook Illinois Forest Preserve District, GO, Refunding, Limited Tax Project, Series B, 5.00%, 12/15/37

      380        397,157   

County of Cook Illinois Forest Preserve District, GO, Series C, 5.00%, 12/15/37

      440        461,124   

Illinois Finance Authority, RB, Carle Foundation, Series A, 5.75%, 8/15/34

      850        918,399   

Illinois HDA, RB, Liberty Arms Senior Apartments, Series D, AMT (AMBAC), 4.88%, 7/01/47

      2,740        2,658,567   

Illinois Sports Facilities Authority, RB, State Tax Supported (AMBAC), 5.50%, 6/15/30

      26,525        27,934,804   

Metropolitan Pier & Exposition Authority, RB, CAB, McCormick Place Expansion Project, Series A (NPFGC), 0.00%, 6/15/30 (b)

      15,000        6,597,750   

 

                
   BLACKROCK MUNIYIELD QUALITY FUND, INC.    JANUARY 31, 2014    3

Schedule of Investments (continued)

   

BlackRock MuniYield Quality Fund, Inc. (MQY)

(Percentages shown are based on Net Assets)

 

Municipal Bonds   

Par  

(000)

     Value  

Illinois (concluded)

  

Metropolitan Pier & Exposition Authority, Refunding RB, McCormick Place Expansion Project Series B:

     

CAB (AGM), 0.00%, 6/15/44 (b)

    $ 4,625      $ 826,719   

4.25%, 6/15/42

      6,000        5,532,060   

Railsplitter Tobacco Settlement Authority, RB, 6.00%, 6/01/28

      900        998,280   

Regional Transportation Authority, RB, Series B (NPFGC), 5.75%, 6/01/33

      3,200        3,856,768   

State of Illinois, GO, Various Purposes:

     

5.50%, 7/01/33

      1,100        1,167,155   

5.50%, 7/01/38

      590        614,615   
    

 

 

  
               85,207,862   

Indiana — 1.8%

  

Indiana Finance Authority, RB, Series A:

     

CWA Authority Project, 1st Lien, 5.25%, 10/01/38

      1,400        1,491,644   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/40

      1,190        1,129,143   

Private Activity Bond, Ohio River Bridges East End Crossing Project, AMT, 5.00%, 7/01/44

      690        649,946   

Indiana Municipal Power Agency, RB, Series A (NPFGC), 5.00%, 1/01/37

      1,150        1,184,949   

Indianapolis Local Public Improvement Bond Bank, Refunding RB, Waterworks Project Series A:

     

5.75%, 1/01/38

      1,300        1,400,581   

(AGC), 5.25%, 1/01/29

      2,350        2,537,506   
    

 

 

  
               8,393,769   

Iowa — 3.4%

  

Iowa Finance Authority, RB, Iowa Health System, Series A (AGC), 5.63%, 8/15/37

      7,700        8,383,760   

Iowa Student Loan Liquidity Corp., RB, Senior Series A-2, AMT:

     

5.60%, 12/01/26

      1,950        2,035,196   

5.70%, 12/01/27

      1,950        2,027,181   

5.80%, 12/01/29

      1,320        1,366,886   
Municipal Bonds   

Par  

(000)

     Value  

Iowa (concluded)

  

Iowa Student Loan Liquidity Corp., RB, Senior Series A-2, AMT (concluded):

     

5.85%, 12/01/30

    $ 1,775      $ 1,835,634   
    

 

 

  
               15,648,657   

Louisiana — 1.2%

  

Louisiana Local Government Environmental Facilities & Community Development Authority, RB, East Baton Rouge Sewerage Commission Projects, Sub-Lien, Series A:

     

5.00%, 2/01/43

      1,910        1,967,204   

4.00%, 2/01/48

      1,910        1,664,909   

Louisiana Public Facilities Authority, Refunding RB, Christus Health, Series B (AGC), 6.50%, 7/01/30

      1,800        2,004,930   
    

 

 

  
               5,637,043   

Massachusetts — 5.4%

  

Massachusetts HFA, RB, S/F Housing, Series 124, AMT, 5.00%, 12/01/31

      1,225        1,234,726   

Massachusetts HFA, Refunding RB, Series C, AMT:

     

5.00%, 12/01/30

      3,000        3,056,850   

5.35%, 12/01/42

      1,525        1,540,372   

Massachusetts School Building Authority, RB, Series A:

     

(AGM), 5.00%, 8/15/15 (c)(d)

      270        289,718   

(AGM), 5.00%, 8/15/15 (c)

      13,800        14,807,814   

(AGM), 5.00%, 8/15/30 (d)

      95        100,410   

Dedicated Sales Tax, Senior, 5.00%, 5/15/43

      1,720        1,838,474   

Massachusetts Water Resources Authority, Refunding RB, General, Series A (NPFGC), 5.00%, 8/01/34

      1,800        1,945,062   
    

 

 

  
               24,813,426   

Michigan — 6.2%

  

City of Detroit Michigan, Refunding RB, 2nd Lien:

     

Sewage Disposal System, Series E (BHAC), 5.75%, 7/01/31

      8,300        8,490,817   

Water Supply System, Series D (NPFGC), 5.00%, 7/01/33

      1,000        918,380   

 

                
4    BLACKROCK MUNIYIELD QUALITY FUND, INC.    JANUARY 31, 2014   

Schedule of Investments (continued)

   

BlackRock MuniYield Quality Fund, Inc. (MQY)

(Percentages shown are based on Net Assets)

 

 

Municipal Bonds    Par  
(000)		     Value  

Michigan (concluded)

     

City of Lansing Michigan, Board of Water & Light, RB, Utilities System, Series A, 5.50%, 7/01/41

    $ 2,500      $ 2,723,450   

Royal Oak Hospital Finance Authority, Refunding RB, William Beaumont Hospital, 8.25%, 9/01/39

      3,510        4,264,369   

State of Michigan, RB, GAB (AGM), 5.25%, 9/15/26

      3,350        3,703,023   

State of Michigan Building Authority, Refunding RB, Facilities Program:

     

Series I-A, 5.38%, 10/15/36

      1,200        1,281,336   

Series I-A, 5.38%, 10/15/41

      1,000        1,069,810   

Series II-A (AGM), 5.25%, 10/15/36

      4,270        4,542,042   

State of Michigan HDA, RB, Series C, AMT, 5.50%, 12/01/28

      1,175        1,218,134   

Western Michigan University, Refunding RB, (AGM), 5.00%, 11/15/39

      520        536,625   
    

 

 

  
               28,747,986   

Minnesota — 0.7%

     

City of Minneapolis Minnesota, Refunding RB, Fairview Health Services, Series B (AGC), 6.50%, 11/15/38

      2,700        3,111,480   

Nebraska — 0.2%

     

Central Plains Nebraska Energy Project, RB, Gas Project No. 3, 5.25%, 9/01/37

      1,000        1,022,830   

Nevada — 2.9%

     

City of Las Vegas Nevada, GO, Limited Tax, Performing Arts Center, 6.00%, 4/01/34

      1,150        1,265,333   

County of Clark Nevada, ARB:

     

Department of Aviation, Subordinate Lien, Series A-2 (NPFGC), 5.00%, 7/01/30

      1,000        1,013,870   

Department of Aviation, Subordinate Lien, Series A-2 (NPFGC), 5.00%, 7/01/36

      9,350        9,482,022   

Las Vegas-McCarran International Airport, Series A, 5.25%, 7/01/42

      1,500        1,546,815   
    

 

 

  
               13,308,040   
Municipal Bonds   

Par  

(000)

     Value  

New Jersey — 6.1%

     

New Jersey EDA, RB:

     

Cigarette Tax (Radian), 5.50%, 6/15/14 (c)

    $ 1,285      $ 1,310,636   

Motor Vehicle Surcharge, Series A (NPFGC), 5.25%, 7/01/31

      12,375        12,579,311   

The Goethals Bridge Replacement Project, AMT, 5.38%, 1/01/43

      1,220        1,227,869   

The Goethals Bridge Replacement Project, AMT, 5.13%, 1/01/34

      935        936,038   

New Jersey Higher Education Student Assistance Authority, Refunding RB, Series 1, AMT:

     

5.50%, 12/01/25

      800        836,544   

5.75%, 12/01/27

      375        403,920   

5.75%, 12/01/28

      400        428,312   

5.88%, 12/01/33

      1,980        2,100,879   

New Jersey Housing & Mortgage Finance Agency, Refunding RB, M/F Housing, Series 2, AMT, 4.35%, 11/01/33

      1,655        1,587,062   

New Jersey Transportation Trust Fund Authority, RB:

     

Transportation Program, Series AA, 5.25%, 6/15/33

      2,000        2,169,280   

Transportation Program, Series AA, 5.50%, 6/15/39

      1,565        1,700,983   

Transportation System, Series A (NPFGC), 5.75%, 6/15/25

      2,000        2,427,320   

Rutgers - The State University of New Jersey, Refunding RB, Series L, 5.00%, 5/01/43

      640        683,930   
    

 

 

  
               28,392,084   

New York — 3.2%

     

City of New York New York Transitional Finance Authority, Refunding RB, Future Tax Secured, Series B, 5.00%, 11/01/32

      5,520        6,004,546   

Hudson Yards Infrastructure Corp., RB, Senior, Fiscal 2012, Series A, 5.75%, 2/15/47

      1,000        1,080,590   

Port Authority of New York & New Jersey, Refunding RB, Consolidated, 172nd Series, AMT, 4.50%, 4/01/37

      2,270        2,231,365   

State of New York Dormitory Authority, ERB, Series B, 5.75%, 3/15/36

      2,000        2,271,460   

 

                
   BLACKROCK MUNIYIELD QUALITY FUND, INC.    JANUARY 31, 2014    5

Schedule of Investments (continued)

   

BlackRock MuniYield Quality Fund, Inc. (MQY)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)		     Value  

New York (concluded)

  

State of New York HFA, RB, Affordable Housing, Series B, 5.30%, 11/01/37

    $ 3,350      $ 3,416,966   
    

 

 

  
               15,004,927   

Ohio — 0.8%

  

County of Lucas Ohio, Refunding RB, Promedica Healthcare, Series A, 6.50%, 11/15/37

      725        840,485   

Ohio Higher Educational Facility Commission, Refunding RB, Kenyon College Project, 5.00%, 7/01/37

      475        496,760   

State of Ohio Turnpike Commission, RB, Junior Lien, Infrastructure Projects, Series A-1:

     

5.25%, 2/15/32

      950        1,037,058   

5.25%, 2/15/33

      1,325        1,440,143   
    

 

 

  
               3,814,446   

Pennsylvania — 1.9%

  

Pennsylvania Turnpike Commission, RB:

     

Series C, 5.50%, 12/01/33

      760        840,811   

Subordinate, Special Motor License Fund, 6.00%, 12/01/36

      775        880,710   

Subordinate, Special Motor License Fund, 5.50%, 12/01/41

      6,700        7,175,365   
    

 

 

  
               8,896,886   

South Carolina — 2.3%

  

County of Charleston South Carolina Airport District, RB, Series A, AMT:

     

5.50%, 7/01/38

      1,500        1,586,895   

5.50%, 7/01/41

      2,725        2,880,734   

South Carolina Jobs EDA, Refunding RB, Palmetto Health, Series A (AGM), 6.50%, 8/01/39

      320        356,697   

South Carolina Transportation Infrastructure Bank, RB, Series A, 5.25%, 10/01/40

      2,500        2,668,050   

State of South Carolina Public Service Authority, Refunding RB, Santee Cooper, Series B, 5.00%, 12/01/38

      2,850        2,950,605   
    

 

 

  
               10,442,981   
Municipal Bonds    Par  
(000)		     Value  

Tennessee — 0.8%

  

Memphis Center City Revenue Finance Corp., RB, Pyramid & Pinch District, Series B (AGM), 5.25%, 11/01/30

    $ 3,520      $ 3,834,970   

Texas — 13.1%

  

Bell County Health Facility Development Corp., RB, Lutheran General Health Care System, 6.50%, 7/01/19 (e)

      1,000        1,205,300   

City of Houston Texas Utility System, Refunding RB, Combined 1st Lien, Series A (AGC), 6.00%, 11/15/35

      2,850        3,258,120   

City of San Antonio Texas Public Service Board, RB, Junior Lien, 5.00%, 2/01/38

      760        802,841   

Comal Texas ISD, GO, School Building (PSF-GTD), 5.00%, 2/01/36

      2,500        2,638,825   

County of Midland Texas Fresh Water Supply District No. 1, RB, CAB, City of Midland Project, Series A, 0.00%, 9/15/36 (b)

      2,870        946,440   

County of Tarrant Texas Cultural Education Facilities Finance Corp., Refunding RB, Cook Children’s Medical Center, 5.25%, 12/01/39

      1,100        1,165,802   

Dallas-Fort Worth International Airport, ARB, Joint Improvement, Series D, AMT:

     

5.00%, 11/01/38

      9,450        9,491,486   

5.00%, 11/01/42

      1,500        1,490,820   

Dallas-Fort Worth International Airport, Refunding ARB, Series F, 5.25%, 11/01/33

      1,325        1,425,395   

Lone Star College System, GO, 5.00%, 8/15/33

      4,800        5,241,024   

Mansfield Texas ISD, GO, School Building (PSF-GTD), 5.00%, 2/15/33

      2,300        2,474,317   

North Texas Tollway Authority, Refunding RB, 1st Tier System Series A:

     

6.00%, 1/01/28

      3,380        3,865,131   

(NPFGC), 5.75%, 1/01/40

      12,300        13,318,317   

San Antonio Public Facilities Corp., Refunding RB, Convention Center Refinancing and Expansion Project:

     

4.00%, 9/15/42

      2,155        1,937,647   

CAB, 0.00%, 9/15/35 (b)

      3,180        1,105,527   

CAB, 0.00%, 9/15/36 (b)

      6,015        1,968,228   

 

                
6    BLACKROCK MUNIYIELD QUALITY FUND, INC.    JANUARY 31, 2014   

Schedule of Investments (continued)

   

BlackRock MuniYield Quality Fund, Inc. (MQY)

(Percentages shown are based on Net Assets)

 

Municipal Bonds    Par  
(000)		     Value  

Texas (concluded)

     

San Antonio Public Facilities Corp., Refunding RB, Convention Center Refinancing and Expansion Project (concluded):

     

CAB, 0.00%, 9/15/37 (b)

    $ 4,305      $ 1,326,758   

Texas Municipal Gas Acquisition & Supply Corp. III, RB, 5.00%, 12/15/31

      1,600        1,610,160   

Texas Transportation Commission, Refunding RB, Central Texas Turnpike System, 1st Tier, Series A, 5.00%, 8/15/41

      5,500        5,505,115   
    

 

 

  
               60,777,253   

Utah — 1.1%

     

Salt Lake City Corp., Refunding RB, IHC Hospitals, Inc. (NPFGC), 6.30%, 2/15/15 (e)

      5,060        5,217,518   

Vermont — 0.0%

     

Vermont HFA, Refunding RB, Multiple Purpose, Series C, AMT (AGM), 5.50%, 11/01/38

      30        30,529   

Washington — 2.1%

     

Central Puget Sound Regional Transit Authority, RB, Series A, 5.00%, 11/01/36

      2,000        2,138,380   

Washington Health Care Facilities Authority, RB:

     

MultiCare Health System, Remarketing, Series B, 5.00%, 8/15/44

      4,000        4,069,440   

Providence Health & Services, Series A, 5.00%, 10/01/39

      1,525        1,561,447   

Providence Health & Services, Series A, 5.25%, 10/01/39

      850        885,335   

Washington Health Care Facilities Authority, Refunding RB, Providence Health & Services, Series A, 5.00%, 10/01/42

      1,155        1,181,842   
    

 

 

  
               9,836,444   

Wisconsin — 0.4%

     

State of Wisconsin Health & Educational Facilities Authority, RB, Ascension Health Senior Credit Group, Series E, 5.00%, 11/15/33

      1,850        1,949,530   
Total Municipal Bonds — 109.0%              506,127,684   
Municipal Bonds Transferred to
Tender Option Bond (TOB) Trusts (f)		    Par  
(000)		     Value  

Arizona — 2.4%

     

Phoenix Civic Improvement Corp., RB, Sub-Civic Plaza Expansion Project, Series A (NPFGC), 5.00%, 7/01/37

    $ 8,000      $ 8,312,960   

Salt River Project Agricultural Improvement & Power District, RB, Electric System, Series A, 5.00%, 1/01/38

      2,750        2,933,315   
    

 

 

  
               11,246,275   

California — 5.0%

     

California State University, Refunding RB, Systemwide, Series A (AGM), 5.00%, 11/01/32

      7,000        7,522,410   

County of San Diego California Water Authority, COP, Refunding, Series A (AGM), 5.00%, 5/01/33

      5,170        5,576,621   

Los Angeles Community College District California, GO, Election of 2001, Series A (NPFGC), 5.00%, 8/01/32

      6,120        6,557,335   

Los Angeles Community College District California, GO, Refunding, Election of 2008, Series A, 6.00%, 8/01/33

      2,639        3,056,581   

San Diego Community College District California, GO, Election of 2002, 5.25%, 8/01/33

      509        570,833   
    

 

 

  
               23,283,780   

Colorado — 0.3%

     

Colorado Health Facilities Authority, Refunding RB, Catholic Health Initiatives, Series A, 5.50%, 7/01/34 (g)

      1,220        1,353,071   

District of Columbia — 1.1%

     

District of Columbia, RB, Series A, 5.50%, 12/01/30 (g)

      1,320        1,492,119   

Metropolitan Washington Airports Authority, Refunding ARB, Series A, AMT, 5.00%, 10/01/30

      3,400        3,605,836   
    

 

 

  
               5,097,955   

Florida — 15.0%

     

City of Tallahassee Florida, RB, Energy System (NPFGC):

     

5.00%, 10/01/32 (g)

      2,700        2,848,068   

5.00%, 10/01/37

      6,000        6,228,840   

 

                
   BLACKROCK MUNIYIELD QUALITY FUND, INC.    JANUARY 31, 2014    7

Schedule of Investments (continued)

   

BlackRock MuniYield Quality Fund, Inc. (MQY)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond (TOB) Trusts (f)		   

Par  

(000)

     Value  

Florida (concluded)

     

County of Highlands Florida Health Facilities Authority, RB, Adventist, Series C, 5.25%, 11/15/16

    $ 5,990      $ 6,250,206   

County of Miami-Dade Florida, Refunding RB, Transit System Sales Surtax, 5.00%, 7/01/42

      2,390        2,467,795   

County of Miami-Dade Florida Water & Sewer System, RB, (AGM), 5.00%, 10/01/39

      12,729        13,269,633   

County of Orange Florida School Board, COP, Series A:

     

(AGC), 5.50%, 8/01/34

      3,544        3,827,555   

(NPFGC), 5.00%, 8/01/30

      2,000        2,111,060   

County of Orange School Board, COP, Series A (NPFCG), 5.00%, 8/01/31

      5,000        5,275,700   

County of Seminole Florida, Refunding RB, Series B (NPFGC), 5.25%, 10/01/31

      6,300        7,203,987   

Jacksonville Electric Authority Florida, RB, Sub-Series A, 5.63%, 10/01/32

      4,310        4,740,763   

Miami-Dade County School Board, COP, Refunding, 5.25%, 5/01/27

      11,350        12,599,067   

State of Florida Board of Education, GO, Refunding, Series D, 5.00%, 6/01/37 (g)

      2,399        2,574,660   
    

 

 

  
               69,397,334   

Hawaii — 1.3%

     

Honolulu City & County Board of Water Supply, RB, Series A (NPFGC), 5.00%, 7/01/14 (c)

      6,000        6,120,900   

Illinois — 6.7%

     

City of Chicago Illinois, RB, Motor Fuel Tax Project, Series A (AGC), 5.00%, 1/01/38

      4,000        3,999,840   

City of Chicago Illinois, Refunding RB, Waterworks, 2nd Lien (AGM), 5.25%, 11/01/33

      14,427        14,952,795   

Metropolitan Pier & Exposition Authority, RB, McCormick Place Expansion Project, Series A, 5.00%, 6/15/42

      360        366,637   

State of Illinois, RB, Build Illinois, Series B, 5.25%, 6/15/34 (g)

      6,198        6,477,599   
Municipal Bonds Transferred to
Tender Option Bond (TOB) Trusts (f)		    Par  
(000)		     Value  

Illinois (concluded)

     

State of Illinois Toll Highway Authority Refunding RB, Senior Priority, Series B, 5.50%, 1/01/33:

    $ 2,000      $ 2,171,513   

State of Illinois Toll Highway Authority, RB, Series A, 5.00%, 1/01/38:

      2,878        2,961,262   
    

 

 

  
               30,929,646   

Michigan — 2.0%

     

Michigan Finance Authority, RB, Hospital, Trinity Health Credit Group, 5.00%, 12/01/39

      9,100        9,264,619   

Nevada — 1.8%

     

City of Las Vegas Nevada, GO, Limited Tax, Performing Arts Center, 6.00%, 4/01/39 (g)

      5,007        5,440,890   

County of Clark Nevada Water Reclamation District, GO, Limited Tax, Series B, 5.75%, 7/01/34

      2,429        2,779,212   
    

 

 

  
               8,220,102   

New Jersey — 0.6%

     

New Jersey Transportation Trust Fund Authority, RB, Transportation System, Series B, 5.25%, 6/15/36 (g)

      2,581        2,743,961   

New York — 8.4%

     

City of New York New York Municipal Water Finance Authority, RB, Water & Sewer System, Fiscal 2009, Series A, 5.75%, 6/15/40

      3,509        3,919,647   

City of New York New York Municipal Water Finance Authority, Refunding RB, Water & Sewer System, 2nd General Resolution, Fiscal 2013, Series CC, 5.00%, 6/15/47

      7,640        7,975,702   

County of Erie New York Industrial Development Agency, RB, City of Buffalo School District Project, Series A (AGM), 5.75%, 5/01/28

      2,007        2,231,183   

New York State Thruway Authority, Refunding RB, General, Series G (AGM), 5.00%, 1/01/32

      10,000        10,408,400   

Port Authority of New York & New Jersey, RB, Series 169, AMT, 5.00%, 10/15/34

      10,830        11,278,795   

State of New York Dormitory Authority, ERB, Series B, 5.75%, 3/15/36

      1,540        1,749,024   

 

                
8    BLACKROCK MUNIYIELD QUALITY FUND, INC.    JANUARY 31, 2014   

Schedule of Investments (continued)

   

BlackRock MuniYield Quality Fund, Inc. (MQY)

(Percentages shown are based on Net Assets)

 

Municipal Bonds Transferred to
Tender Option Bond (TOB) Trusts (f)		    Par  
(000)		     Value  

New York (concluded)

  

Triborough Bridge & Tunnel Authority, RB, General, Series A-2, 5.25%, 11/15/34 (g)

    $ 1,500      $ 1,655,520   
    

 

 

  
               39,218,271   

North Carolina — 0.4%

  

North Carolina HFA, RB, Series 31-A, AMT, 5.25%, 7/01/38

      2,041        2,077,175   

Ohio — 0.2%

  

State of Ohio, RB, Cleveland Clinic Health Obligated Group, Series B, 5.50%, 1/01/34

      780        836,761   

South Carolina — 1.1%

  

State of South Carolina Public Service Authority, Refunding RB, Santee Cooper, Series A, 5.50%, 1/01/38 (g)

      4,695        5,171,308   

Texas — 4.1%

  

Clear Creek ISD Texas, GO, Refunding, School Building (PSF-GTD), 5.00%, 2/15/33

      5,900        6,313,177   

County of Tarrant Texas Cultural Education Facilities Finance Corp., RB, Baylor Health Care System Project, Series A, 5.00%, 11/15/38

      879        906,257   

Cypress-Fairbanks ISD, GO, Refunding, Schoolhouse (PSF-GTD), 5.00%, 2/15/32

      4,750        5,102,782   

Dallas Fort Worth International Airport, ARB, Series H, AMT, 5.00%, 11/01/37 (g)

      4,501        4,526,979   

North East Texas ISD, GO, School Building, Series A (PSF-GTD), 5.00%, 8/01/37 (g)

      2,000        2,129,080   
    

 

 

  
               18,978,275   

Virginia — 0.1%

     

County of Fairfax Virginia IDA, Refunding RB, Health Care, Inova Health System, Series A, 5.50%, 5/15/35

      450        483,080   
Municipal Bonds Transferred to
Tender Option Bond (TOB) Trusts (f)		    Par  
(000)		     Value  

Washington — 0.6%

  

Central Puget Sound Regional Transit Authority, RB, Series A (AGM), 5.00%, 11/01/32

    $ 2,504      $ 2,678,293   

Wisconsin — 0.6%

  

Wisconsin Health & Educational Facilities Authority, Refunding RB, Froedtert & Community Health Inc. Obligated Group, Froedtert & Community Health, Inc.:

     

Series A, 5.00%, 4/01/42

      640        655,789   

Series C, 5.25%, 4/01/39

      2,000        2,073,000   
    

 

 

  
               2,728,789   
Total Municipal Bonds Transferred to
Tender Option Bond (TOB) Trusts — 51.7%		         239,829,595   
Total Long-Term Investments
(Cost — $712,927,690) — 160.7%		         745,957,279   
Short-Term Securities    Shares         

FFI Institutional Tax-Exempt Fund, 0.03% (h)(i)

      7,597,270        7,597,270   
Total Short-Term Securities
(Cost — $7,597,270) — 1.6%		         7,597,270   
Total Investments (Cost — $720,524,960*) — 162.3%        753,554,549   
Other Assets Less Liabilities — 2.2%        10,146,285   

Liability for TOB Trust Certificates, Including Interest
Expense and Fees Payable — (26.5%)

   

     (122,900,844 ) 
VRDP Shares, at Liquidation Value — (38.0%)        (176,600,000 ) 
    

 

 

  
Net Assets Applicable to Common Shares — 100.0%      $ 464,199,990   
    

 

 

  

 

*   As of January 31, 2014, gross unrealized appreciation and depreciation based on cost for federal income tax purposes were as follows:

 

Tax cost

   $ 599,512,875   
 

 

 

  

Gross unrealized appreciation

   $ 38,969,162   

Gross unrealized depreciation

     (7,797,613 ) 
 

 

 

  

Net unrealized appreciation

   $ 31,171,549   
 

 

 

  

 

Notes to Schedule of Investments      

 

(a)   Represents a step-up bond that pays an initial coupon rate for the first period and then a higher coupon rate for the following periods. Rate shown reflects the current yield as of report date.

 

(b)   Zero-coupon bond.

 

(c)   US government securities, held in escrow, are used to pay interest on this security, as well as to retire the bond in full at the date indicated, typically at a premium to par.

 

                
   BLACKROCK MUNIYIELD QUALITY FUND, INC.    JANUARY 31, 2014    9

Schedule of Investments (continued)

   

BlackRock MuniYield Quality Fund, Inc. (MQY)

 

 

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

 

Counterparty   Value        Unrealized
Appreciation		  

JPMorgan Chase

   $ 390,128         $ 33   

 

(e)   Security is collateralized by municipal or US Treasury obligations.

 

(f)   Represent bonds transferred to a TOB. In exchange for which the Fund acquired residual interest certificates. These bonds serve as collateral in a financing transaction.

 

(g)   All or a portion of security is subject to a recourse agreement, which may require the Fund to pay the liquidity provider in the event there is a shortfall between the TOB trust certificates and proceeds received from the sale of the security contributed to the TOB trust. In the case of a shortfall, the aggregate maximum potential amount the Fund could ultimately be required to pay under the agreements, which expire from February 1, 2016 to December 1, 2029 is $21,224,963.

 

(h)   Investments in issuers considered to be an affiliate of the Fund during the period ended January 31, 2014, for purposes of Section 2(a)(3) of the Act of 1940, were as follows:

 

Affiliate      Shares Held
at April 30,
2013		       

Net

Activity

        Shares Held
at January 31,
2014		        Income  

FFI Institutional Tax-Exempt Fund

        802,157           6,795,113           7,597,270         $ 1,366   

 

(i)   Represents the current yield as of report date.

 

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 Guarantee Corp.    HDA    Housing Development Authority
     AGM    Assured Guaranty Municipal Corp.    HFA    Housing Finance Agency
     AMBAC    American Municipal Bond Assurance Corp.    IDA    Industrial Development Authority
     AMT    Alternative Minimum Tax (subject to)    ISD    Independent School District
     ARB    Airport Revenue Bonds    LRB    Lease Revenue Bonds
     BHAC    Berkshire Hathaway Assurance Corp.    M/F    Multi-Family
     CAB    Capital Appreciation Bonds    NPFGC    National Public Finance Guarantee Corp.
     COP    Certificates of Participation    PSF-GTD    Permanent School Fund Guaranteed
     EDA    Economic Development Authority    Radian    Radian Guaranty, Inc.
     ERB    Education Revenue Bonds    RB    Revenue Bonds
     GAB    Grant Anticipation Bonds    S/F    Single-Family
     GARB    General Airport Revenue Bonds    Syncora    Syncora Guarantee
     GO    General Obligation Bonds      

 

                
10    BLACKROCK MUNIYIELD QUALITY FUND, INC.    JANUARY 31, 2014   

Schedule of Investments (continued)

   

BlackRock MuniYield Quality Fund, Inc. (MQY)

 

 

Ÿ  

Financial futures contracts outstanding as of January 31, 2014 were as follows:

 

Contracts
Sold		      Issue      Exchange      Expiration   Notional Value        Unrealized
Depreciation		  
  (80 )     10-Year US Treasury Note      Chicago Board of Trade      March 2014   $ 10,060,000         $ (70,107 ) 

 

Ÿ  

Fair Value Measurements — Various inputs are used in determining the fair value of investments and derivative financial instruments. These inputs to valuation techniques are categorized into a disclosure hierarchy consisting of three broad levels for financial reporting purposes as follows:

 

  Ÿ  

Level 1 — unadjusted price quotations in active markets/exchanges for identical assets or liabilities that the Fund has the ability to access

 

  Ÿ  

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)

 

  Ÿ  

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 and derivative financial instruments)

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the fair value hierarchy classification is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy. In accordance with the Fund’s policy, transfers between different levels of the fair value disclosure hierarchy are deemed to have occurred as of the beginning of the reporting period. The categorization of a value determined for investments and derivative financial instruments is based on the pricing transparency of the investment and derivative financial instrument and is not necessarily an indication of the risks associated with investing in those securities. For information about the Fund’s policy regarding valuation of investments and derivative financial instruments, please refer to the Fund’s most recent financial statements as contained in its semi-annual report.

The following tables summarize the Fund’s investments and derivative financial instruments categorized in the disclosure hierarchy as of January 31, 2014:

 

     Level 1     Level 2        Level 3        Total  

Assets:

              
Investments:              

Long-Term Investments1

     —      $ 745,957,279           —         $ 745,957,279   

Short-Term Securities

   $ 7,597,270        —           —           7,597,270   
 

 

 

    

 

 

       

 

 

       

 

 

  

Total

   $ 7,597,270      $ 745,957,279           —         $ 753,554,549   
 

 

 

    

 

 

       

 

 

       

 

 

  

 

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

      

     Level 1     Level 2        Level 3        Total  

Derivative Financial Instruments2

              

Liabilities:

              

Interest rate contracts

   $ (70,107 )      —           —         $ (70,107 ) 

2   Derivative financial instruments are financial futures contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

      

 

                
   BLACKROCK MUNIYIELD QUALITY FUND, INC.    JANUARY 31, 2014    11

Schedule of Investments (concluded)

   

BlackRock MuniYield Quality Fund, Inc. (MQY)

 

The carrying amount for certain of the Fund’s assets and/or liabilities approximates fair value for financial reporting purposes. As of January 31, 2014, such assets and/or liabilities are categorized within the disclosure hierarchy as follows:

 

     Level 1        Level 2        Level 3        Total  

Assets:

                 
Cash pledged for financial futures contracts   $ 142,000                —         $ 142,000   

Liabilities:

                 

TOB trust certificates

     —         $ (122,870,125 )              (122,870,125 ) 

VMTP shares

     —           (176,600,000 )         —           (176,600,000 ) 
 

 

 

       

 

 

       

 

 

       

 

 

  

Total

   $ 142,000         $ (299,470,125 )         —         $ (299,328,125 ) 
 

 

 

       

 

 

       

 

 

       

 

 

  

There were no transfers between levels during the period ended January 31, 2014.

 

                
12    BLACKROCK MUNIYIELD QUALITY FUND, INC.    JANUARY 31, 2014   

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 MuniYield Quality Fund, Inc.

By:   /S/ JOHN M. PERLOWSKI
  John M. Perlowski
  Chief Executive Officer (principal executive officer) of BlackRock MuniYield Quality Fund, Inc.

Date: March 25, 2014

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 MuniYield Quality Fund, Inc.

Date: March 25, 2014

By:   /S/ NEAL J. ANDREWS
  Neal J. Andrews
  Chief Financial Officer (principal financial officer) of BlackRock MuniYield Quality Fund, Inc.

Date: March 25, 2014