UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-PX

ANNUAL REPORT OF PROXY VOTING RECORD OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-05557

Prospect Street High Income Portfolio Inc.
(Exact name of registrant as specified in charter)

13455 Noel Road, Suite 800
Dallas, TX 75240
(Address of principal executive offices) (Zip code)

James D. Dondero
Highland Capital Management, L.P.
13455 Noel Road, Suite 800
Dallas, TX 75240
(Name and address of agent for service)

Registrant's telephone number, including area code: 972-628-4100

Date of fiscal year end: October 31

Date of reporting period: July 1, 2005 - June 30, 2006

Form N-PX is to be used by a registered management investment company, other
than a small business investment company registered on Form N-5 (Sections 239.24
and 274.5 of this chapter), to file reports with the Commission, not later than
August 31 of each year, containing the registrant's proxy voting record for the
most recent twelve-month period ended June 30, pursuant to section 30 of the
Investment Company Act of 1940 and rule 30b1-4 there under (17 CFR 270.30b1-4).
The Commission may use the information provided on Form N-PX in its regulatory,
disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-PX, and
the Commission will make this information public. A registrant is not required
to respond to the collection of information contained in Form N-PX 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, 100 F Street, NE, Washington, DC
20549. The OMB has reviewed this collection of information under the clearance
requirements of 44 U.S.C. Section 3507.

PROXY VOTING RECORD

FOR PERIOD JULY 1, 2005 TO JUNE 30, 2006

FUND'S VOTE
FOR OR AGAINST
PROPOSAL, OR
WHO WHETHER ABSTAIN; FOR
PROPOSED FUND OR WITHHOLD WHETHER VOTE
ISSUER OF EXCHANGE MATTER: CAST REGARDING WAS FOR OR
PORTFOLIO TICKER SHAREHOLDER SUMMARY OF MATTER VOTED ISSUER / VOTE ON ELECTION OF AGAINST
SECURITY SYMBOL CUSIP# MEETING DATE ON SHAREHOLDER MATTER DIRECTORS MANAGEMENT
- ---------- -------- --------- ------------ ----------------------- ----------- ------- -------------- ------------

Viatel VTLAF G93447103 November 22, 1. That the sale of 1. Mgmt. 1. No N/A N/A
Holding 2005 Cybernet (Schweiz) AG
(Bermuda) (Cybernet), to Swisscom
Limited Fixnet AG (Swisscom) by
Viatel Holding (Europe)
Limited (A wholly owned
subsidiary of the
company), as describe
in the Chairman's
letter circulated to
the shareholders of the
company and dated
November 1, 2005 (the
Chairman's letter)

2. That any one 2. Mgmt 2. No
director or officer of
the company be and
hereby is authorized to
take all necessary or
desirable steps to
negotiate, conclude,
implement, execute and
give effect to any
document, deed, act or
thing pursuant to or
otherwise in connection
with the sale.

3. That any and all 3. Mgmt 3. No
actions of the
directors and officers
of the company acting
individually or
together with another
to date in connection
with the sale be and
are hereby approved,
ratified, confirmed and
adopted in all respects
as actions taken for
and on behalf of the
company

Viatel VTLAF G93447103 December 7, 1. The auditors report 1. Mgmt. 1. No N/A N/A
Holding 2005 and financial
(Bermuda) statements for
Limited the year ended 31
December 2004 be and
are hereby received

2. Messrs Deloitte and 2. Mgmt 2. No
Touche (London) be and
are hereby appointed as
auditors to the
company, to hold office
until the close of the
next annual general
meeting of the company.

3. The Board of 3. Mgmt 3. No
Directors be and are
hereby authorized to
determine the
remuneration of the
auditors to the company

4. Didier Delepine be 4. Mgmt 4. No
hereby elected as
Director to serve until
the annual general
meeting or until his
successor is appointed

5. S. Dennis Belcher be 5. Mgmt 5. No
hereby elected as
Director to serve until
the annual general
meeting or until his
successor is appointed

6. Thomas Doster be 6. Mgmt 6. No
hereby elected as
Director to serve until
the annual general
meeting or until his
successor is appointed

7. Leslie Goodman be 7. Mgmt 7. No
hereby elected as
Director to serve until
the annual general
meeting or until his
successor is appointed

8. Edward Greenberg be 8. Mgmt 8. No
hereby elected as
Director to serve until
the annual general
meeting or until his
successor is appointed

9. Kevin Power be 9. Mgmt 9. No
hereby elected as
Director to serve until
the annual general
meeting or until his
successor is appointed

10. Lucy Woods be 10. Mgmt 10. No
hereby elected as
Director to serve until
the annual general
meeting or until his
successor is appointed

Viatel VTLAF G93447103 June 7, 2006 1. That the transfer of 1. Mgmt 1. No N/A N/A
Holding (i) one-half of certain
(Bermuda) of the company's
Limited European long haul
network assets; (ii) all
of the company's long
haul network assets in
Germany forming the
network stretch known as
Pen 3; and (iii) certain
revenues linked to
specified existing
wholesale customer
contracts to global
voice group limited, and
all as more fully
described in the proxy
statement

3. That any and all 3. Mgmt 3. Mgmt
actions of the
directors and officers
of the company acting
individually or
together with another
to date in connection
with the transaction be
and are hereby
approved, ratified,
confirmed and adopted
in all respects as
actions taken for and
on behalf of the
company

New World NWRG 649271400 May 9, 2006 1. Election of 1. Mgmt. 1. No N/A N/A
Restaurant Directors
Group, 1. Michael W. Arthur
Ltd. 2. E. Nelson Heumann
3. James W. Hood
4. Frank C. Meyer
5. Paul J.B. Murphy,
III
6. S.G. Stonehouse, Jr.
7. Leonard Tannenbaum

2. Proposal to approve 2. Mgmt 2. No
an increase in
authorized common stock
from 15 million shares
to 25 million shares

3. Proposal to ratify 3. Mgmt 3. No
the appointment of
Grant Thorton LLP as
Independent Auditors
for New YWorld
Restaurant Group, Inc.
for the fiscal year
ending January 2, 2007.

SIGNATURES

Pursuant to the requirements of 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 Prospect Street High Income Portfolio Inc.

By (Signature and Title)* /s/ James D. Dondero
------------------------------------------------------
James D. Dondero, Chief Executive Officer
(Principal Executive Officer)

Date August 25, 2006

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