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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000905148-01-000333.txt : 20010224
<SEC-HEADER>0000905148-01-000333.hdr.sgml : 20010224
ACCESSION NUMBER:		0000905148-01-000333
CONFORMED SUBMISSION TYPE:	POS 8C
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20010220

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DEBT STRATEGIES FUND II INC
		CENTRAL INDEX KEY:			0001051003
		STANDARD INDUSTRIAL CLASSIFICATION:	 []
		IRS NUMBER:				223564108
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		POS 8C
		SEC ACT:		
		SEC FILE NUMBER:	333-37384
		FILM NUMBER:		1550407

	FILING VALUES:
		FORM TYPE:		POS 8C
		SEC ACT:		
		SEC FILE NUMBER:	811-08603
		FILM NUMBER:		1550408

	BUSINESS ADDRESS:	
		STREET 1:		MERRILL LYNCH ASSET MANAGEMENT
		STREET 2:		PO BOX 9011
		CITY:			PRINCETON
		STATE:			NJ
		ZIP:			08543-9011
		BUSINESS PHONE:		6092823087

	MAIL ADDRESS:	
		STREET 1:		MERRILL LYNCH ASSET MANAGEMENT
		STREET 2:		PO BOX 9011 INFORMATION SYSTEMS SEC 2-B,
		CITY:			PRINCETON
		STATE:			NJ
		ZIP:			08543-9011
</SEC-HEADER>
<DOCUMENT>
<TYPE>POS 8C
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>T:\EDGAR2001\DOOLEY\766582.TXT
<TEXT>




    As filed with the Securities and Exchange Commission on February 20, 2001

                                             Securities Act File No. 333-37384
                                     Investment Company Act File No. 811-08603
==============================================================================

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                           ------------------------

                                   FORM N-14
            REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

                           ------------------------

PRE-EFFECTIVE AMENDMENT NO. / /           POST-EFFECTIVE AMENDMENT NO. 1  /X/
                       (check appropriate box or boxes)

                           ------------------------

                          Debt Strategies Fund, Inc.*
            (Exact Name of Registrant as Specified in its Charter)

                           ------------------------

                                (609) 282-2800
                       (Area Code and Telephone Number)

                           ------------------------

                            800 Scudders Mill Road
                         Plainsboro, New Jersey 08536
(Address of Principal Executive Offices: Number, Street, City, State, Zip Code)

                           ------------------------

                                Terry K. Glenn
                          Debt Strategies Fund, Inc.
             800 Scudders Mill Road, Plainsboro, New Jersey 08536
       Mailing Address: P.O. Box 9011, Princeton, New Jersey 08543-9011

                           ------------------------

                                  Copies to:
   Frank P. Bruno, Esq.                           Michael J. Hennewinkel, Esq.
     Brown & Wood LLP                             Fund Asset Management, L.P.
  One World Trade Center                            800 Scudders Mill Road
  New York, NY 10048-0557                          Plainsboro, NJ 08543-9011

==============================================================================


________________
*Formerly, Debt Strategies Fund II, Inc.

<PAGE>

This Post-Effective Amendment consists of the following:

(1)  Facing Sheet of the Registration Statement.

(2)  Part C to the Registration Statement (including signature page).

Parts A and B are incorporated herein by reference from Pre-Effective
Amendment No. 1 to this Registration Statement (File No. 333-37384) filed on
July 13, 2000.

     This amendment is being filed solely to file as Exhibit No. 12 to this
Registration Statement the Tax Opinion of Brown & Wood LLP, counsel for the
Registrant.

<PAGE>

                                    PART C
                               OTHER INFORMATION

Item 15.  Indemnification

     Section 2-418 of the General Corporation Law of the State of Maryland,
Article VI of the Registrant's Articles of Incorporation, which was previously
filed as an exhibit to the Common Stock Registration Statement (as defined
below), Article VI of the Registrant's By-Laws, which was previously filed as
an exhibit to the Common Stock Registration Statement, and the Investment
Advisory Agreement, a form of which was previously filed as an exhibit to the
Common Stock Registration Statement, provide for indemnification.

     Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "1933 Act"), may be provided to directors,
officers and controlling persons of the Registrant, pursuant to the foregoing
provisions or otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission, such indemnification is against
public policy as expressed in the 1933 Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in connection with any
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.

     Reference is made to (i) Section 6 of the Purchase Agreement relating to
the Registrant's Common Stock, a form of which was filed as an exhibit to the
Common Stock Registration Statement, and (ii) Section 7 of the Purchase
Agreement relating to the Registrant's AMPS, a form of which was filed as an
exhibit to the AMPS Registration Statement (as defined below), for provisions
relating to the indemnification of the underwriter.

Item 16.   Exhibits

1       -- Articles of Incorporation of the Registrant (a)
2       -- By-Laws of the Registrant.(a)
3       -- Not Applicable.
4       -- Form of Agreement and Plan of Merger among the Registrant (formerly
           Debt Strategies Fund II, Inc.), Debt Strategies Fund, Inc. and Debt
           Strategies Fund III, Inc.(f)
5   (a) -- Form of specimen certificate for the Common Stock of the
           Registrant. (a)
    (b) -- Copies of instruments defining the rights of stockholders, including
           the relevant portions of the Articles of Incorporation and the
           By-Laws of the Registrant.(b)
6       -- Form of Investment Advisory Agreement between Registrant and Fund
           Asset Management, L.P.(c)
7   (a) -- Form of Purchase Agreement between the Registrant and the Investment
           Adviser and Merrill Lynch, Pierce, Fenner & Smith Incorporated
           ("Merrill Lynch") relating to the Registrant's Common Stock.(c)
    (b) -- Form of Merrill Lynch Standard Dealer Agreement.(c)
8       -- Not applicable.
9       -- Custodian Contract between the Registrant and The Bank of New
           York.(c)
10      -- Not applicable.
11      -- Opinion and Consent of Brown & Wood LLP, counsel for the
           Registrant.(d)
12      -- Tax Opinion of Brown & Wood LLP, counsel for the Registrant.
13  (a) -- Registrar, Transfer Agency and Service Agreement between the
           Registrant and The Bank of New York.(c)
14  (a) -- Consent of Deloitte & Touche LLP, independent auditors for the
           Registrant.(d)
    (b) -- Consent of Deloitte & Touche LLP, independent auditors for Debt
           Strategies Fund, Inc.(d)
    (c) -- Consent of Deloitte & Touche LLP, independent auditors for Debt
           Strategies Fund III, Inc.(d)
15      -- Not applicable.
16      -- Power of Attorney.(e)

- -------------------
(a)  Incorporated herein by reference to the Registrant's registration
     statement (the "Registration Statement"), on Form N-2 relating to the
     Registrant's Common Stock (File No. 333-44051), filed with the Securities
     and Exchange Commission (the "Commission") on January 12, 1998.
(b)  Reference is made to Article V, Article VI (sections 2, 3, 4, 5 and 6),
     Article VII, Article VIII, Article X, Article XI, Article XII and Article
     XIII of the Registrant's Articles of Incorporation, previously filed as
     Exhibit (a) to this Registration Statement; and to Article II, Article
     III (sections 1, 2, 3, 5 and 17), Article VI, Article VII, Article XII,
     Article XIII and Article XIV of the Registrant's By-Laws, previously
     filed as Exhibit (b) to this Registration Statement.
(c)  Incorporated herein by reference to Pre-Effective Amendment No. 1 to the
     Registration Statement, filed with the Commission on February 18, 1998.
(d)  Filed on July 13, 2000, as an Exhibit to Pre-Effective Amendment No. 1 to
     the Registration Statement on Form N-14.
(e)  Included on the signature page of the N-14 Registration Statement filed
     on May 18, 2000 and incorporated herein by reference. (f) Included as
     Exhibit II to the Proxy Statement and Prospectus contained in the N-14
     Registration Statement filed on July 13, 2000.


Item 17.   Undertakings.

     (1) The undersigned Registrant agrees that prior to any public reoffering
of the securities registered through use of a prospectus which is part of this
Registration Statement by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) of the Securities Act of 1933,
as amended, the reoffering prospectus will contain information called for by
the applicable registration form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by other items of the
applicable form.

     (2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as part of an amendment to the
registration statement and will not be used until the amendment is effective,
and that, in determining any liability under the Securities Act of 1933, as
amended, each post-effective amendment shall be deemed to be a new
registration statement for the securities offered therein, and the offering of
securities at that time shall be deemed to be the initial bona fide offering
of them.

     (3) The Registrant undertakes to file, by post-effective amendment, a
copy of the Internal Revenue Service private letter ruling applied for or an
opinion of counsel as to certain tax matters, within a reasonable time after
receipt of such ruling or opinion.

<PAGE>

                                  SIGNATURES

     As required by the Securities Act of 1933, this Registration Statement
has been signed on behalf of the Registrant, in the Township of Plainsboro,
and the State of New Jersey, on the 20th day of February, 2001.


                                         DEBT STRATEGIES FUND, INC.
                                                     (Registrant)


                                         By       /s/ Terry K. Glenn
                                            ----------------------------------
                                               (Terry K. Glenn, President)



     As required by the Securities Act, this Registration Statement has been
signed below by the following persons in the capacities and on the date(s)
indicated.

<TABLE>
<CAPTION>
SIGNATURES                                          TITLE                                            DATE
- ----------                                          -----                                            ----
<S>                                                 <C>                                              <C>
                Terry K. Glenn*                     President (Principal Executive Officer)
- -------------------------------------------
             (Terry K. Glenn)                       and Director

               Donald C. Burke*                     Vice President and Treasurer (Principal
- -------------------------------------------
             (Donald C. Burke)                      Financial and Accounting Officer)

               Ronald W. Forbes*                    Director
- -------------------------------------------
            (Ronald W. Forbes)

            Cynthia A. Montgomery*                  Director
- -------------------------------------------
          (Cynthia A. Montgomery)

              Charles C. Reilly*                    Director
- -------------------------------------------
            (Charles C. Reilly)

                Kevin A. Ryan*                      Director
- -------------------------------------------
              (Kevin A. Ryan)

            Roscoe S. Suddarth*                     Director
- -------------------------------------------
           (Roscoe S. Suddarth)

               Richard R. West*                     Director
- -------------------------------------------
             (Richard R. West)

             Edward D. Zinbarg*                     Director
- -------------------------------------------
            (Edward D. Zinbarg)

* By:         /s/ Terry K. Glenn                                                                           February 20, 2001
     --------------------------------------
      (Terry K. Glenn, Attorney-in-Fact)

</TABLE>

<PAGE>

                                   Exhibits
                                   --------
  Exhibit
    No.                                 Description
    ---                                 -----------
       12         Tax Opinion of Brown & Wood LLP, counsel for the Registrant.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>EXHIBIT 12
<TEXT>




                               BROWN & WOOD LLP
                            One World Trade Center
                           New York, New York 10048
                           Telephone: (212) 839-5300
                           Facsimile: (212) 839-5599



                                                              November 6, 2000



Debt Strategies Fund II, Inc.
800 Scudders Mill Road
Plainsboro, New Jersey  08536

Debt Strategies Fund, Inc.
800 Scudders Mill Road
Plainsboro, New Jersey 08536

Debt Strategies Fund III, Inc.
800 Scudders Mill Road
Plainsboro, New Jersey  08536


              Re:  Merger of Debt Strategies Fund II, Inc., Debt
                   Strategies Fund, Inc. and Debt Strategies Fund III,
                   Inc. Ladies and Gentlemen:

     You have requested our opinion as to certain Federal income tax
consequences of the merger ("Merger) of each of Debt Strategies Fund, Inc.
("Debt Strategies") and Debt Strategies Fund III, Inc. ("Debt Strategies III")
with and into Debt Strategies Fund II, Inc. ("Debt Strategies II") in
accordance with the General Corporation law of the State of Maryland. After
the Merger, the separate existence of Debt Strategies and Debt Strategies III
will cease and the common stock of Debt Strategies and Debt Strategies III
will convert into the right to receive an equivalent dollar amount (rounded to
the nearest one ten-thousandth of one cent) of full shares of common stock of
Debt Strategies II plus cash in lieu of any fractional shares, computed based
on the net asset value per share of each fund as of the close of business on
the Effective Date. After the Merger, Debt Strategies and Debt Strategies III
will cease to operate, will have no assets remaining, will have final federal
and state (if any) tax returns filed on their behalf and will have all of
their shares cancelled under Maryland law. This opinion letter is furnished
pursuant to (i) the section entitled "Tax Consequences of the Merger" in the
Combined Proxy Statement and Prospectus and (ii) Sections 9(g), 10(e) and
11(e) of the Agreement and Plan of Merger dated July 5, 2000, by and among
Debt Strategies II, Debt Strategies and Debt Strategies III (the "Plan") as a
condition of closing. All terms used herein, unless otherwise defined, are
used as defined in the Plan.

     In rendering our opinion, we have reviewed and relied upon (a) the Plan,
(b) the Combined Proxy Statement and Prospectus included as part of the
registration statement on Form N-14 filed under the Securities Act of 1933
("Registration Statement") and (c) certain representations concerning the
Merger made by Debt Strategies II, Debt Strategies and Debt Strategies III in
letters dated November 6, 2000 (the "Representations"). Our opinion assumes
that the statutory requirements for a valid merger under Maryland law have
been satisfied.

     Based upon current law, including cases and administrative
interpretations thereof and on the reviewed materials listed above, it is our
opinion that:

     1. The Merger, as described in the Plan will constitute a reorganization
within the meaning of Section 368(a)(1)(A) of the Internal Revenue Code of
1986, as amended (the "Code"), and Debt Strategies II, Debt Strategies, and
Debt Strategies III will each be a "party" to the reorganization within the
meaning of Section 368(b) of the Code.

     2. In accordance with Section 361(a) of the Code, neither Debt Strategies
nor Debt Strategies III will recognize any gain or loss as a result of the
Merger or on the conversion of Debt Strategies and Debt Strategies III common
stock into common stock of Debt Strategies II.

     3. Under Section 1032 of the Code, Debt Strategies II will recognize no
gain or loss as a result of the Merger.

     4. In accordance with Code Section 354(a)(1), stockholders of Debt
Strategies and Debt Strategies III will recognize no gain or loss on the
conversion of their Debt Strategies and Debt Strategies III shares into Debt
Strategies II common stock (except to the extent that Debt Strategies or Debt
Strategies III stockholders receive cash representing an interest in
fractional shares of Debt Strategies II in the Merger).

     5. The basis of the assets of Debt Strategies and Debt Strategies III
received by Debt Strategies II will be the same as the basis of such assets to
Debt Strategies and Debt Strategies III, respectively, immediately before the
Merger under Section 362(b) of the Code.

     6. Under Section 358 of the Code, the basis of the Debt Strategies II
shares received by Debt Strategies and Debt Strategies III stockholders will
be the same as the basis of the respective Debt Strategies or Debt Strategies
III shares converted pursuant to the Merger.

     7. Under Code Section 1223, the holding period of the Debt Strategies II
common stock received on conversion will include the holding period of the
converted Debt Strategies or Debt Strategies III shares, provided that such
shares were held as a capital asset on the date of the Merger.

     8. The holding period of the assets acquired by Debt Strategies II from
Debt Strategies and Debt Strategies III will include the period during which
such assets were held by Debt Strategies and Debt Strategies III,
respectively, under Section 1223 of the Code.

     9. The payment of cash to Debt Strategies and Debt Strategies III
stockholders in lieu of fractional shares of Debt Strategies II will be
treated as though the fractional shares were distributed as part of the Merger
and then redeemed by Debt Strategies II. The cash payment will be treated as a
distribution in full payment for the fractional shares deemed redeemed, with
the result that each Debt Strategies and Debt Strategies III stockholder will
generally have short- or long-term capital gain or loss to the extent that the
cash distribution differs from such stockholder's basis allocable to the
fractional shares.

     10. Pursuant to Section 381(a) of the Code and Section 1.381(a)-1 of the
Income Tax Regulations, Debt Strategies II will succeed to and take into
account the items of Debt Strategies and Debt Strategies III described in
Section 381(c) of the Code, subject to the provisions and limitations
specified in Sections 381, 382, 383 and 384 of the Code and the Regulations
thereunder. Under Section 381(b), the tax years of Debt Strategies and Debt
Strategies III will end on the date of the Merger.

     Our opinion represents our best legal judgment as to the proper Federal
income tax treatment of the Merger, based on the facts contained in the Plan,
the Registration Statement and the Representations. Our opinion assumes the
accuracy of the facts as described in the Plan, the Registration Statement and
the Representations and could be affected if any of the facts as so described
are inaccurate. As noted above, the opinion also assumes the validity of the
Merger under Maryland law and would be affected if this assumption were not
true.

     We are furnishing this opinion letter to the addressees hereof, solely
for the benefit of such addressees in connection with the Merger. This opinion
letter is not to be used, circulated, quoted or otherwise referred to for any
other purpose.

                                                      Very truly yours,



                                                      /s/ Brown & Wood LLP


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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