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<SEC-DOCUMENT>0000935069-04-001667.txt : 20041021
<SEC-HEADER>0000935069-04-001667.hdr.sgml : 20041021
<ACCEPTANCE-DATETIME>20041021144352
ACCESSION NUMBER:		0000935069-04-001667
CONFORMED SUBMISSION TYPE:	N-Q
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20040831
FILED AS OF DATE:		20041021
DATE AS OF CHANGE:		20041021
EFFECTIVENESS DATE:		20041021

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PREFERRED INCOME OPPORTUNITY FUND INC
		CENTRAL INDEX KEY:			0000882071
		IRS NUMBER:				954355600
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1130

	FILING VALUES:
		FORM TYPE:		N-Q
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-06495
		FILM NUMBER:		041089477

	BUSINESS ADDRESS:	
		STREET 1:		301 E COLORADO BLVD STE 720
		STREET 2:		C/O FLAHERTY & CRUMRINE INC
		CITY:			PASADENA
		STATE:			CA
		ZIP:			91101
		BUSINESS PHONE:		8187957300

	MAIL ADDRESS:	
		STREET 1:		301 COLORADO BLVD
		STREET 2:		STE 720
		CITY:			PASADENA
		STATE:			CA
		ZIP:			91101
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-Q
<SEQUENCE>1
<FILENAME>pfoqtr0804.txt
<DESCRIPTION>PREFERRED OPPORTUNITY QUARTERLY
<TEXT>
                                  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 811-06495
                                                 --------------------------
       FLAHERTY & CRUMRINE PREFERRED INCOME OPPORTUNITY FUND INCORPORATED
       --------------------------------------------------------------------
               (Exact name of registrant as specified in charter)

                      301 E. Colorado Boulevard, Suite 720
                               PASADENA, CA 91101
       --------------------------------------------------------------------
               (Address of principal executive offices) (Zip code)

                               Donald F. Crumrine
                            Flaherty & Crumrine Inc.
                      301 E. Colorado Boulevard, Suite 720
                               PASADENA, CA 91101
       --------------------------------------------------------------------
                     (Name and address of agent for service)

        Registrant's telephone number, including area code: 626-795-7300

            Date of fiscal year end: NOVEMBER 30, 2004
                                    -------------------
             Date of reporting period: AUGUST 31, 2004
                                      -------------------

Form N-Q is to be used by  management  investment  companies,  other  than small
business investment companies registered on Form N-5 (ss.ss. 239.24 and 274.5 of
this chapter), to file reports with the Commission, not later than 60 days after
the close of the first and third fiscal quarters,  pursuant to rule 30b1-5 under
the Investment  Company Act of 1940 (17 CFR 270.30b1-5).  The Commission may use
the  information  provided  on Form N-Q in its  regulatory,  disclosure  review,
inspection, and policymaking roles.

A registrant is required to disclose the information  specified by Form N-Q, and
the Commission will make this  information  public. A registrant is not required
to respond to the  collection  of  information  contained in Form N-Q unless the
Form displays a currently  valid Office of Management and Budget ("OMB") control
number.  Please  direct  comments  concerning  the  accuracy of the  information
collection  burden  estimate and any  suggestions for reducing the burden to the
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington,
DC 20549-0609.  The OMB has reviewed this  collection of  information  under the
clearance requirements of 44 U.S.C. ss. 3507.


<PAGE>


ITEM 1. SCHEDULE OF INVESTMENTS.
The Schedule of Investments is attached herewith.

- --------------------------------------------------------------------------------
Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated
PORTFOLIO OF INVESTMENTS
AUGUST 31, 2004 (UNAUDITED)
- ---------------------------


<TABLE>
<CAPTION>
SHARES/$ PAR                                                                                             VALUE
- -------------                                                                                         ------------
<S>           <C>                                                                                 <C>
PREFERRED SECURITIES -- 93.7%
               BANKING -- 23.6%
- ---------------------------------------------------------------------------------------------------------------------
               ABN AMRO North America, Inc.:
        1,165    6.46% Pfd., 144A*** ..........................................................    $      1,223,174*
        3,500    6.59% Pfd., 144A*** ..........................................................           3,721,602*
     $150,000  BT Capital Trust B, 7.90% 01/15/27, Capital Security ...........................             167,575(1)
     $660,000  BT Preferred Capital Trust II, 7.875% 02/25/27 Capital Security ................             736,501(1)
               Citigroup, Inc.:
       82,435    5.864% Pfd., Series M ........................................................           4,195,117*
        7,700    6.213% Pfd., Series G ........................................................             402,941*
       46,000    6.231% Pfd., Series H ........................................................           2,425,120*
       31,850    6.365% Pfd., Series F ........................................................           1,683,432*
               Cobank, ACB:
       45,000    7.00% Pfd., 144A*** ..........................................................           2,437,425*
       75,000    Adj. Rate Pfd., 144A*** ......................................................           4,228,125*
     $500,000  Comerica (Imperial) Capital Trust I, 9.98% 12/31/26 Capital Security, Series B .             610,860
   $2,250,000  First Hawaiian Capital I, 8.343% 07/01/27 Capital Security, Series B ...........           2,577,127(1)
     $719,000  First Union Institutional Capital I, 8.04% 12/01/26 Capital Security ...........             806,420
   $1,885,000  First Union Institutional Capital II, 7.85% 01/01/27 Capital Security ..........           2,092,661
   $4,349,000  GreenPoint Capital Trust I, 9.10% 06/01/27 Capital Security ....................           5,019,681
        9,900  HSBC USA, Inc., $2.8575 Pfd. ...................................................             512,721*
               J.P. Morgan Chase & Co.:
       36,500    6.625% Pfd., Series H ........................................................           1,946,545*
      132,425    Series A, Adj. Rate Pfd. .....................................................          12,183,100*
   $1,350,000  Keycorp Institutional Capital B, 8.25% 12/15/26 Capital Security ...............           1,521,207
   $1,500,000  North Fork Capital Trust I, 8.70% 12/15/26 Capital Security ....................           1,708,995
- -------------------------------------------------------------------------------------------------------------------
                                                                                                         50,200,329
                                                                                                   ----------------
               FINANCIAL SERVICES -- 13.4%
- ---------------------------------------------------------------------------------------------------------------------
               The Bear Stearns Companies Inc.:
       63,750    5.49% Pfd., Series G .........................................................           3,049,800*
      100,323    5.72% Pfd., Series F .........................................................           5,056,781*
               Freddie Mac:
        6,975    5.00% Pfd., Series F .........................................................             310,841*
       25,500    5.10% Pfd., Series H .........................................................           1,159,102*
               Lehman Brothers Holdings, Inc.:
       60,150    5.67% Pfd., Series D .........................................................           2,909,155*
      159,505    5.94% Pfd., Series C .........................................................           7,947,337*
       64,000    6.50% Pfd., Series F .........................................................           1,668,160*
      113,400  SLM Corporation, 6.97% Pfd., Series A ..........................................           6,366,276*
- -------------------------------------------------------------------------------------------------------------------
                                                                                                         28,467,452
                                                                                                   ----------------
</TABLE>
                                        4


<PAGE>


- --------------------------------------------------------------------------------
              Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated
                                            PORTFOLIO OF INVESTMENTS (CONTINUED)
                                                     AUGUST 31, 2004 (UNAUDITED)
                                            ------------------------------------

<TABLE>
<CAPTION>
SHARES/$ PAR                                                                                             VALUE
- -------------                                                                                         ------------
<S>           <C>                                                                                 <C>
PREFERRED SECURITIES -- (CONTINUED)
               INSURANCE -- 7.8%
- ---------------------------------------------------------------------------------------------------------------------
       15,850  Everest Re Capital Trust II, 6.20% Pfd. Series B ...............................    $        377,943(1)
   $4,395,000  MMI Capital Trust I, 7.625% 12/15/27 Capital Security, Series B ................           4,765,674
           18  Premium Assets, Series A, Zurich RegCaPS Variable Inverse Pfd., Pvt. ...........           1,996,798*
   $5,734,000  Provident Financing Trust I, 7.405% 03/15/38 Capital Security ..................           5,138,066
               Zurich RegCaPS Funding Trust:
        2,600    6.01% Pfd., 144A*** ..........................................................           2,640,300*
        1,600    6.58% Pfd., 144A*** ..........................................................           1,657,808*
- -------------------------------------------------------------------------------------------------------------------
                                                                                                         16,576,589
                                                                                                   ----------------
               UTILITIES -- 41.4%
- ---------------------------------------------------------------------------------------------------------------------
               Alabama Power Company:
        4,980    4.60% Pfd. ...................................................................             447,079*
        6,485    4.72% Pfd. ...................................................................             597,366*
          868    4.92% Pfd. ...................................................................              83,345*
       43,400    5.20% Pfd. ...................................................................           1,051,148*
      225,000    5.30% Pfd. ...................................................................           5,429,250*
        2,049  Appalachian Power Company, 5.92% Sinking Fund Pfd. .............................             206,047*
       23,750  Avista Corporation, $6.95 Sinking Fund Pfd., Series K ..........................           2,380,225*
        6,000  Baltimore Gas & Electric Company, 6.70% Pfd., Series 1993 ......................             628,680*
       10,000  Boston Edison Company, 4.78% Pfd. ..............................................             943,300*
        1,628  Central Hudson Gas & Electric Corporation, 4.35% Pfd., Series D, Pvt. ..........             131,420*
       10,000  Central Illinois Light Company, 4.64% Pfd. .....................................             898,550*
        8,160  Central Illinois Public Service Company, 4.90% Pfd. ............................             773,731*
        3,798  Central Maine Power Company, 4.75% Pfd. ........................................             325,963*
       22,238  Central Vermont Public Service Corporation, 8.30% Pvt. Sinking Fund Pfd. .......           2,314,197*
               Connecticut Light & Power Company:
          900    4.50% Pfd. ...................................................................              34,447*
        2,900    $2.20 Pfd., Series 1949 ......................................................             115,275*
        8,502    $3.24 Pfd. ...................................................................             444,910*
        2,000  Consolidated Edison Company of New York, 4.65% Pfd., Series C ..................             184,310*
               Duke Energy Corporation:
        8,004    4.50% Pfd., Series C, Pvt. ...................................................             680,820*
       11,256    6.75%, Sinking Fund Pfd., Series X ...........................................           1,170,399*
       34,943    7.85% Pfd., Series S .........................................................           3,624,463*
               Duquesne Light Company:
       15,030    3.75% Pfd. ...................................................................             477,653*
       25,775    6.50% Pfd. ...................................................................           1,326,897*
</TABLE>

                                                          5
<PAGE>

- --------------------------------------------------------------------------------
Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2004 (UNAUDITED)
- -----------------------------------

<TABLE>
<CAPTION>
SHARES/$ PAR                                                                                             VALUE
- -------------                                                                                         ------------
<S>           <C>                                                                                 <C>
PREFERRED SECURITIES -- (CONTINUED)
               UTILITIES -- (CONTINUED)
- ---------------------------------------------------------------------------------------------------------------------
        5,000  Energy East Capital Trust I, 8.25% Pfd. ........................................    $        133,175
               Entergy Arkansas, Inc.:
        2,840    4.56% Pfd. ...................................................................             223,196*
        3,050    4.56% Pfd., Series 1965 ......................................................             239,699*
        1,050    6.08% Pfd. ...................................................................             105,598*
       13,500    7.40% Pfd. ...................................................................           1,405,687*
        5,880    7.80% Pfd. ...................................................................             615,489*
        2,000    7.88% Pfd. ...................................................................             208,890*
       23,914    $1.96 Pfd. ...................................................................             598,448*
        2,441  Entergy Gulf States, Inc., 7.56% Pfd. ..........................................             248,726*
               Entergy Louisiana, Inc.:
          299    5.16% Pfd. ...................................................................              25,810*
          705    6.44% Pfd. ...................................................................              71,822*
        4,074    7.36% Pfd. ...................................................................             424,287*
      175,000    8.00% Pfd., Series 92 ........................................................           4,417,000*
               Entergy Mississippi, Inc.:
        3,791    4.36% Pfd. ...................................................................             276,516*
        8,500    7.44% Pfd. ...................................................................             881,493*
       10,900  Enterprise Capital Trust I, 7.44% Pfd., Series A ...............................             274,626
               Florida Power Company:
       10,000    4.58% Pfd. ...................................................................             867,400*
        2,000    4.75% Pfd. ...................................................................             179,050*
               Great Plains Energy, Inc.:
        1,625    4.20% Pfd. ...................................................................             118,479*
        2,000    4.35% Pfd. ...................................................................             151,030*
               Hawaiian Electric Company, Inc.:
        1,411    5.00% Pfd., Series D .........................................................              25,984*
        6,688    5.00% Pfd., Series E .........................................................             123,160*
   $3,750,000  Houston Light & Power, Capital Trust II, 8.257%, 02/01/37 Capital Security .....           3,959,850
        5,291  Idaho Power Company, 7.68% Pfd., Series 1 ......................................             547,248*
        8,000  Indiana Michigan Power Company, 6.875% Sinking Fund Pfd. .......................             797,320*
       30,500  Indianapolis Power & Light Company, 5.65% Pfd. .................................           2,757,963*
      340,000  Interstate Power & Light Company, 8.375% Pfd., Series B ........................          10,825,600*
        2,588  New York State Electric & Gas, $4.50 Pfd., Series 1949 .........................             213,251*
       12,265  Northern Indiana Public Service Company, Series A, Adj. Rate Pfd. ..............             631,954*
               Ohio Power Company:
        3,018    4.20% Pfd. ...................................................................             240,731*
        1,251    4.40% Pfd. ...................................................................             104,540*
        1,724    5.90% Sinking Fund Pfd. ......................................................             172,460*

</TABLE>

                                       6


<PAGE>

- --------------------------------------------------------------------------------
              Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated
                                            PORTFOLIO OF INVESTMENTS (CONTINUED)
                                                     AUGUST 31, 2004 (UNAUDITED)
              ------------------------------------------------------------------

<TABLE>
<CAPTION>
SHARES/$ PAR                                                                                             VALUE
- -------------                                                                                         ------------
<S>           <C>                                                                                 <C>
PREFERRED SECURITIES -- (CONTINUED)
               UTILITIES -- (CONTINUED)
- ---------------------------------------------------------------------------------------------------------------------
               Pacific Enterprises:
       13,680    $4.36 Pfd. ...................................................................    $      1,099,804*
       24,985    $4.50 Pfd. ...................................................................           2,073,255*
       15,730    $4.75 Pfd., Series 53 ........................................................           1,377,791*
               PacifiCorp:
        5,672    $4.56 Pfd. ...................................................................             483,708*
        6,458    $4.72 Pfd. ...................................................................             570,080*
       12,250    $7.48 Sinking Fund Pfd. ......................................................           1,282,085*
               PECO Energy Company:
        1,100    $4.30 Pfd., Series B .........................................................              88,732*
        5,000    $4.40 Pfd., Series C .........................................................             412,700*
       17,537  Portland General Electric, 7.75% Sinking Fund Pfd. .............................           1,822,270*
       19,209  Potomac Electric Power Company, $3.40 Sinking Fund Pfd. ........................             962,083*
       14,020  Public Service Electric & Gas Company, 5.28% Pfd., Series E ....................           1,332,531*
       25,921  REI Trust I, 7.20% Pfd., Series C ..............................................             639,989
               San Diego Gas & Electric Company:
       55,210    $1.70 Pfd ....................................................................           1,443,189*
       34,000    $1.7625 Sinking Fund Pfd. ....................................................             880,600*
       60,000  Savannah Electric & Gas Company, 6.00% Pfd. ....................................           1,625,400*
               South Carolina Electric & Gas Company:
       14,226    5.125% Purchase Fund Pfd., Pvt. ..............................................             749,212*
        7,774    6.00% Purchase Fund Pfd., Pvt. ...............................................             396,552*
       60,000  Southern Union Company, 7.55% Pfd. .............................................           1,641,900*
     $750,000  TXU Electric Capital V, 8.175% 01/30/37 Capital Security .......................             832,931
       10,000  TXU US Holdings Company, $4.00 Pfd., Series TES ................................             716,400*
        5,600  Union Electric Company, 4.56% Pfd. .............................................             500,892*
               Virginia Electric & Power Company:
        1,665    $4.04 Pfd. ...................................................................             132,509*
        2,270    $4.20 Pfd. ...................................................................             187,808*
        1,673    $4.80 Pfd. ...................................................................             158,182*
        2,878    $6.98 Pfd. ...................................................................             297,197*
       12,500    $7.05 Pfd. ...................................................................           1,291,313*
        2,262  Washington Gas & Light Company, $4.25 Pfd. .....................................             192,541*
       12,863  Wisconsin Power & Light Company, 6.20% Pfd. ....................................           1,321,159*

</TABLE>

                                       7
<PAGE>



- --------------------------------------------------------------------------------
Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2004 (UNAUDITED)
- -----------------------------------

<TABLE>
<CAPTION>
SHARES/$ PAR                                                                                             VALUE
- -------------                                                                                         ------------
<S>           <C>                                                                                 <C>
PREFERRED SECURITIES -- (CONTINUED)
               UTILITIES -- (CONTINUED)
- ---------------------------------------------------------------------------------------------------------------------
               Xcel Energy, Inc.:
       15,000    $4.08 Pfd., Series B .........................................................    $      1,092,375*
       20,040    $4.10 Pfd., Series C .........................................................           1,466,527*
       35,510    $4.11 Pfd., Series D .........................................................           2,582,465*
       17,750    $4.16 Pfd., Series E .........................................................           1,318,026*
       10,000    $4.56 Pfd., Series G .........................................................             813,900*
- -------------------------------------------------------------------------------------------------------------------
                                                                                                         87,922,063
                                                                                                   ----------------
               OIL AND GAS -- 4.8%
- ---------------------------------------------------------------------------------------------------------------------
       17,200  Anadarko Petroleum Corporation, 5.46% Pfd. .....................................           1,726,536*
        6,650  Apache Corporation, 5.68% Pfd., Series B .......................................             678,799*
        6,125  EOG Resources, Inc., 7.195% Pfd., Series B .....................................           6,704,823*
       10,000  Lasmo America Limited, 8.15% Pfd., 144A*** .....................................           1,152,800*
- -------------------------------------------------------------------------------------------------------------------
                                                                                                         10,262,958
                                                                                                   ----------------
               REAL ESTATE INVESTMENT TRUST (REIT) -- 1.0%
- ---------------------------------------------------------------------------------------------------------------------
       40,000  Health Care Property Investments, 7.10% Pfd., REIT, Series F ...................           1,014,200
       40,000  Regency Centers Corporation, 7.25% Pfd., REIT ..................................           1,011,400
- -------------------------------------------------------------------------------------------------------------------
                                                                                                          2,025,600
                                                                                                   ----------------
               MISCELLANEOUS INDUSTRIES -- 1.7%
- ---------------------------------------------------------------------------------------------------------------------
       13,600  E.I. Du Pont de Nemours and Company, $4.50 Pfd., Series B ......................           1,176,944*
       36,200  Farmland Industries, Inc., 8.00% Pfd., 144A*** .................................                  --+
       30,500  Ocean Spray Cranberries, Inc., 6.25% Pfd., 144A*** .............................           2,536,075*
       26,000  Touch America Holdings, $6.875 Pfd. ............................................                  --+
- -------------------------------------------------------------------------------------------------------------------
                                                                                                          3,713,019
                                                                                                   ----------------
               TOTAL PREFERRED SECURITIES
                 (Cost $182,124,539) ..........................................................         199,168,010
                                                                                                   ----------------
CORPORATE DEBT SECURITY -- 1.0%
               OIL AND GAS -- 1.0%
- ---------------------------------------------------------------------------------------------------------------------
       85,900  Nexen, Inc., 7.35% Subordinated Notes ..........................................           2,231,682(1)
- -------------------------------------------------------------------------------------------------------------------
               TOTAL CORPORATE DEBT SECURITY
                 (Cost $2,245,426) ............................................................           2,231,682
                                                                                                   ----------------
</TABLE>

                                       9

<PAGE>

- --------------------------------------------------------------------------------
              Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated
                                            PORTFOLIO OF INVESTMENTS (CONTINUED)
                                                     AUGUST 31, 2004 (UNAUDITED)
                                            ------------------------------------
<TABLE>
<CAPTION>
SHARES/$ PAR                                                                                             VALUE
- -------------                                                                                         ------------
<S>           <C>                                                                                 <C>
COMMON STOCK AND CONVERTIBLE SECURITIES -- 4.2%
               INSURANCE -- 0.4%
- ---------------------------------------------------------------------------------------------------------------------
       25,000  UnumProvident Corporation, 8.25% Mandatory Convertible, 05/16/06 ...............    $        831,375
- -------------------------------------------------------------------------------------------------------------------
                                                                                                            831,375
                                                                                                   ----------------
               UTILITIES -- 3.8%
- ---------------------------------------------------------------------------------------------------------------------
       97,500  Duke Energy Corporation ........................................................           2,160,112*
       80,000  FPL Group, Inc., 8.50% Mandatory Convertible, Series A, 02/16/05 ...............           4,606,800
       30,000  TXU Corporation, 8.75% Mandatory Convertible, 11/16/05 .........................           1,371,150
- -------------------------------------------------------------------------------------------------------------------
                                                                                                          8,138,062
                                                                                                   ----------------
               TOTAL COMMON STOCK AND CONVERTIBLE SECURITIES
                 (Cost $8,266,366) ............................................................           8,969,437
                                                                                                   ----------------
OPTION CONTRACTS -- 0.1%
        1,325  October Put Options on December U.S. Treasury Bond Futures, Expiring 9/25/04 ...             135,547+
- -------------------------------------------------------------------------------------------------------------------
               TOTAL OPTION CONTRACTS
                 (Cost $1,054,346) ............................................................             135,547
                                                                                                   ----------------
</TABLE>

                                       9
<PAGE>


- --------------------------------------------------------------------------------
Flaherty & Crumrine Preferred Income Opportunity Fund Incorporated
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 2004 (UNAUDITED)
- -----------------------------------
<TABLE>
<CAPTION>
SHARES/$ PAR                                                                                             VALUE
- -------------                                                                                         ------------
<S>           <C>                                                                                 <C>
MONEY MARKET FUND -- 0.5%
      960,933  BlackRock Provident Institutional, TempFund ....................................    $        960,933
- -------------------------------------------------------------------------------------------------------------------
               TOTAL MONEY MARKET FUND
                 (Cost $960,933) ..............................................................             960,933
                                                                                                   ----------------

 TOTAL INVESTMENTS (Cost $194,651,610**) ...........................................       99.5%        211,465,609
 OTHER ASSETS AND LIABILITIES (Net) ................................................        0.5%          1,002,374
                                                                                      ----------   ----------------
 TOTAL NET ASSETS AVAILABLE TO COMMON AND PREFERRED STOCK ..........................      100.0%++ $    212,467,983
                                                                                      ----------   ----------------
 MONEY MARKET CUMULATIVE PREFERRED STOCK(TM)(MMP(R)) REDEMPTION VALUE .........................         (70,000,000)
 ACCUMULATED UNDECLARED DISTRIBUTIONS TO MMP(R) ...............................................             (62,383)
                                                                                                   ----------------
 TOTAL NET ASSETS AVAILABLE TO COMMON STOCK ...................................................    $    142,405,600
                                                                                                   ================
<FN>
- -----------------------------
*    Securities  eligible for the Dividends  Received Deduction and distributing
     Qualified Dividend Income.
**   Aggregate cost of securities held.
***  Securities exempt from  registration  under Rule 144A of the Securities Act
     of 1933.  These  securities  may be  resold  in  transactions  exempt  from
     registration to qualified institutional buyers.
(1)  Foreign issuer.
+    Non-income producing.
++   The  percentage  shown for each  investment  category is the total value of
     that  category  as a  percentage  of net  assets  available  to Common  and
     Preferred Stock.
</FN>
</TABLE>

      ABBREVIATIONS:
REIT  -- Real Estate Investment Trust
PFD.  -- Preferred Securities
PVT.  -- Private Placement Securities
         Capital  Securities  are  treated  as debt  instruments  for  financial
         statement  purposes and the amounts  shown in the Shares/$ Par column
         are dollar amounts of par value.

                                       10


<PAGE>

ITEM 2. CONTROLS AND PROCEDURES.

     (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") (17 CFR 270.30a-3(c))) are effective,  as of a date within
          90 days of the filing date of the report that includes the  disclosure
          required  by this  paragraph,  based  on  their  evaluation  of  these
          controls and  procedures  required by Rule 30a-3(b) under the 1940 Act
          (17 CFR  270.30a-3(b))  and Rules  13a-15(b)  or  15d-15(b)  under the
          Securities  Exchange Act of 1934, as amended (17 CFR  240.13a-15(b) or
          240.15d-15(b)).

     (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 has materially  affected,  or is reasonably likely
          to materially affect, the registrant's internal control over financial
          reporting.

ITEM 3. EXHIBITS.

Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of
the Sarbanes-Oxley Act of 2002 are attached hereto.


<PAGE>


                                   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)  FLAHERTY & CRUMRINE PREFERRED INCOME OPPORTUNITY FUND INCORPORATED
            --------------------------------------------------------------------

By (Signature and Title)*  /S/ DONALD F. CRUMRINE
                         -------------------------------------------------------
                         Donald F. Crumrine, Director, Chairman of the Board and
                         Chief Executive Officer
                         (principal executive officer)

Date                       OCTOBER 8, 2004
    ----------------------------------------------------------------------------


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 (Signature and Title)*  /S/ DONALD F. CRUMRINE
                         -------------------------------------------------------
                           Donald F. Crumrine, Director, Chairman of the Board
                           and Chief Executive Officer
                           (principal executive officer)

Date                       OCTOBER 8, 2004
    ----------------------------------------------------------------------------


By (Signature and Title)*  /S/ R. ERIC CHADWICK
                         -------------------------------------------------------
                           R. Eric Chadwick, Chief Financial Officer,
                           Treasurer, Vice President and Secretary
                           (principal financial officer)

Date                       OCTOBER 8, 2004
    ----------------------------------------------------------------------------



* Print the name and title of each signing officer under his or her signature.


<PAGE>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CERT
<SEQUENCE>2
<FILENAME>cert302.txt
<DESCRIPTION>302 CERTIFICATION
<TEXT>
  CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 302 OF
                             THE SARBANES-OXLEY ACT

I, Donald F. Crumrine, certify that:

1.   I have  reviewed  this report on Form N-Q of Flaherty & Crumrine  Preferred
     Income Opportunity Fund Incorporated;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my knowledge, the schedules of investments included in this report
     fairly present in all material  respects the  investments of the registrant
     as of the end of the fiscal quarter for which the report is filed;

4.   The  registrant's  other  certifying  officer(s) and I are  responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in  Rule  30a-3(c)  under  the  Investment  Company  Act of  1940)  for the
     registrant and have:

     (a)  Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     (b)  [Omitted]

     (c)  Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures,  as of a date
          within 90 days prior to the filing date of this report,  based on such
          evaluation; and

     (d)  Disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most  recent  fiscal  quarter  that  has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The registrant's  other  certifying  officer(s) and I have disclosed to the
     registrant's  auditors and the audit committee of the registrant's board of
     directors (or persons performing the equivalent functions):

     (a)  All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize, and report financial information; and
<PAGE>

     (b)  Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.


Date: OCTOBER 8, 2004          /S/ DONALD F. CRUMRINE
      ----------------         ----------------------
                               Donald F. Crumrine, Director, Chairman of the
                               Board and Chief Executive Officer
                               (principal executive officer)
<PAGE>



   CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 302
                           OF THE SARBANES-OXLEY ACT

I, R. Eric Chadwick, certify that:

1.   I have  reviewed  this report on Form N-Q of Flaherty & Crumrine  Preferred
     Income Opportunity Fund Incorporated;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my knowledge, the schedules of investments included in this report
     fairly present in all material  respects the  investments of the registrant
     as of the end of the fiscal quarter for which the report is filed;

4.   The  registrant's  other  certifying  officer(s) and I are  responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in  Rule  30a-3(c)  under  the  Investment  Company  Act of  1940)  for the
     registrant and have:

     a.   Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b.   [Omitted]

     c.   Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures,  as of a date
          within 90 days prior to the filing date of this report,  based on such
          evaluation; and

     d.   Disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most  recent  fiscal  quarter  that  has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

5.   The registrant's  other  certifying  officer(s) and I have disclosed to the
     registrant's  auditors and the audit committee of the registrant's board of
     directors (or persons performing the equivalent functions):

     a.   All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize, and report financial information; and
<PAGE>

     b.   Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.


Date: OCTOBER 8, 2004          /S/ R. ERIC CHADWICK
      ---------------          --------------------
                               R. Eric Chadwick, Chief Financial Officer,
                               Treasurer, Vice President and Secretary
                               (principal financial officer)

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
