CUBA Herzfeld Caribbean Basin Fund Inc

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT
INVESTMENT COMPANY

Investment Company Act file number 811-06445

ITEM 1. SCHEDULE OF INVESTMENTS

Shares or
Principal Amount Description Market Value
--------------------------------------------------------------------------------
 Common stocks - 93.54% of net assets

 Airlines - 6.22%
 23,500 Copa Holdings, S.A. 1,909,845

 Banking and finance - 8.41%
 20,780 Bancolombia, S.A. 1,240,774
 39,000 Banco Latinoamericano de Exportaciones, S.A. 861,510
 11,500 Doral Financial Corp. 10,818
 6,000 Popular Inc. 104,580
 3,844 W Holding Co. Inc. 77
 20,000 Western Union Company 364,400

 Communications - 9.82%
 71,200 America Movil, S.A.B. de C.V. Series A 91,096
 209,144 America Movil, S.A.B. de C.V. Series L 266,772
 44,690 America Movil, S.A.B. de C.V. ADR 1,136,914
 12,698 Atlantic Tele-Network, Inc. 545,760
 5,028 Fuego Enterprises Inc. 1,760
 23,666 Grupo Radio Centro, S.A.B. ADR 181,991
 32,400 Grupo Televisa, S.A.B. ADR 761,724
 8,030 Spanish Broadcasting System, Inc. 26,178

 Conglomerates and holdings companies - 0.06%
 250,000 Admiralty Holding Company --
 70,348 BCB Holdings Ltd. 15,336
 3,250 Shellshock Ltd. Ord. 2,309

 Construction and related - 8.82%
 58,021 Cemex S.A.B. de C.V. Series CPO 48,331
 57,655 Cemex S.A.B. de C.V. ADR 480,266
 20 Ceramica Carabobo Class A ADR --
 4,100 Homex Development Corp 55,924
 74,132 Mastec, Inc. 1,421,000
 6,400 Vulcan Materials 302,720
 4,800 Martin Marietta Materials 397,776

 Consumer products and related manufacturing - 5.61%
 15,273 Grupo Casa Saba, S.A.B. de C.V. ADR 122,948
 21,100 Watsco Incorporated 1,599,169

 Food, beverages and tobacco - 11.15%
 20,000 Chiquita Brands International Inc. 152,800
 53,874 Cleanpath Resources Corp. 151
 17,500 Coca Cola Femsa, S.A.B. de C.V. ADR 2,257,500
 5,000 Fomento Economico Mexicano, S.A.B. de C.V. ADR 459,900
 18,900 Fomento Economico Mexicano, S.A.B. de C.V. Series UBD 174,238
 19,690 Fresh Del Monte Produce Inc. 376,064

 Housing - 4.02%
 35,500 Lennar Corporation 1,234,335

 Investment companies - 0.01%
 4,420 Shellproof Limited 3,069
 70,348 Waterloo Investment Holdings Ltd --

 Leisure - 11.50%
 41,000 Carnival Corp. 1,494,040
 45,000 Royal Caribbean Cruises Ltd. 1,359,450
 14,527 Steiner Leisure Ltd. 676,232

 Mining - 0.37%
 3,872 Grupo Mexico, S.A.B. de C.V. Series B 12,811
 5,000 Tahoe Resources, Inc. 101,800

 Pulp and paper - 0.14%
 18,300 Kimberly-Clark de Mexico, S.A.B. de C.V. Series A 43,753


 Railroad - 5.60%
 20,500 Norfolk Southern Corporation 1,304,415
 15,110 RailAmerica Inc. 415,072

 Retail - 4.88%
 1,270 Grupo Elektra, S.A.B. de C.V. Series CPO 51,808
 12,000 Pricesmart, Inc. 908,640
 190,222 Wal-Mart de Mexico, S.A.B. de C.V. Series V 536,316

 Service - 0.02%
 700 Grupo Aeroportuario del Sureste, S.A.B. de C.V. Series B 6,179

 Trucking and marine freight - 11.46%
 12,280 Grupo TMM, S.A.B. ADR 11,740
 1,321 Seaboard Corporation 2,985,632
 2,000 Seacor Holdings, Inc. 166,720
 8,361 Teekay LNG Partners LP 314,541
 28,000 Ultrapetrol Bahamas Ltd. 39,760

 Utilities - 4.24%
 12,000 Caribbean Utilities Ltd. Class A 117,600
 66,841 Consolidated Water, Inc. 552,775
 700 Cuban Electric Company --
 35,500 Teco Energy Inc. 629,770

 Other - 1.21%
 500,000 Cuba Business Development --
 25,000 Geltech Solutions Inc. 16,000
 13,000 Impellam Group 70,324
 55,921 Margo Caribe, Inc. 283,519
 895 Siderurgica Venezolana Sivensa, S.A. ADR --
 79 Siderurgica Venezolana Sivensa, S.A. Series B --

Total common stocks - 93.54% (cost $24,338,497) 28,706,932

 Bonds - 0.00% of net assets

 165,000 Republic of Cuba - 4.5%, 1977 -
 in default (cost $63,038) --

Other assets less liabilities - 6.46 % of net assets $ 1,981,594

Net assets - 100% (APPLICABLE TO 3,713,071 SHARES; EQUIVALENT
 TO $8.26 PER SHARE) $ 30,688,526

Security Valuation

The Herzfeld Caribbean Basin Fund, Inc. (the "Fund") records its investments in securities at fair value. Under generally accepted accounting principles ("GAAP"), fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date.

In determining fair value, the Fund uses various valuation approaches. GAAP establishes a fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available.

Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Fund. Unobservable inputs reflect the Fund's assumptions about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels based on the inputs as follows:

Level 1: quoted prices in active markets for identical investments
Level 2: other significant observable inputs (including quoted prices for
 similar investments, interest rates, prepayment speeds, credit risk,
 etc.)
Level 3: significant unobservable inputs (including the Fund's own
 assumptions in determining the fair value of investments)

The availability of valuation techniques and observable inputs can vary from security to security and is affected by a wide variety of factors including the type of security, whether the security is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Those estimated values do not necessarily represent the amounts that may be ultimately realized due to the occurrence of future circumstances that cannot be reasonably determined. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the securities existed. Accordingly, the degree of judgment exercised by the Fund in determining fair value is greatest for securities categorized in Level 3. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement in its entirety falls, is determined based on the lowest level input that is significant to the fair value measurement.

Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Fund's own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date. The Fund uses prices and inputs that are current as of the measurement date, including periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many securities. This condition could cause a security to be reclassified to a lower level within the fair value hierarchy.

Investments in securities traded on a national securities exchange (or reported on the NASDAQ National Market or Capital Market) are stated at the last reported sales price on the day of valuation (or at the NASDAQ official closing price); other securities traded in the over-the-counter market and listed securities for which no sale was reported on the date are stated at the last quoted bid price. Restricted securities and other securities for which quotations are not readily available are valued at fair value as determined by the Board of Directors.

The following table summarizes the classification of the Fund's investments by the above fair value hierarchy levels as of September 30, 2012:

 Level 1 Level 2 Level 3 Total
Assets (at fair value)
 Common Stocks $28,615,894 $91,038 $0 $28,706,932
 Debt Securities 0 0 0 0
Total Investments in securities $28,615,894 $91,038 $0 $28,706,932

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used to determine fair value:

 Investments in Securities at Fair Value
Balance June 30, 2012 $0

Unrealized gain/(loss) 0
Net purchases 0
Net sales (0)
Transfers into Level 3 0
Transfers out of Level 3 (0)

Balance September 30, 2012 $0

ITEM 2. CONTROLS AND PROCEDURES

(a) The registrant's principal executive and principal financial officers 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 this Form N-Q that includes the disclosure required by this paragraph based on their evaluation of the 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 (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

The certifications required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended, and Section 302 of the Sarbanes-Oxley Act of 2002 are attached as an exhibit to this filing.

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.

The Herzfeld Caribbean Basin Fund, Inc.

By /s/ Thomas J. Herzfeld
-------------------------
Thomas J. Herzfeld
Chairman and President

Date: November 28, 2012

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/ Thomas J. Herzfeld
-------------------------
Thomas J. Herzfeld
Chairman and President

Date: November 28, 2012

By /s/ Cecilia L. Gondor
------------------------
Cecilia L. Gondor
Treasurer

Date: November 28, 2012

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