THE HERZFELD CARIBBEAN BASIN FUND, INC.

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The Herzfeld Caribbean Basin Fund, Inc.
Semi-Annual Report
December 31, 2000

THE HERZFELD CARIBBEAN BASIN FUND, INC.
The Herzfeld Building
PO Box 161465
Miami, FL 33116
(305) 271-1900

INVESTMENT ADVISOR
HERZFELD / CUBA
a division of Thomas J. Herzfeld Advisors, Inc.
PO Box 161465
Miami, FL 33116
(305) 271-1900

TRANSFER AGENT & REGISTRAR
Investors Bank & Trust Company
200 Clarendon Street, 16th Floor
Boston, MA 02116
(617) 443-6870

CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street, 5th Floor
Boston, MA 02116

COUNSEL
Pepper Hamilton LLP
3000 Two Logan Square
18th and Arch Streets
Philadelphia, PA 19103

INDEPENDENT AUDITORS
Kaufman, Rossin & Co.
2699 South Bayshore Drive
Miami, FL 33133

The Herzfeld Caribbean Basin Fund's investment objective is long-term capital appreciation. To achieve its objective, the Fund invests in issuers that are likely, in the Advisor's view, to benefit from economic, political, structural and technological developments in the countries in the Caribbean Basin, which consist of Cuba, Jamaica, Trinidad and Tobago, the Bahamas, the Dominican Republic, Barbados, Aruba, Haiti, the Netherlands Antilles, the Commonwealth of Puerto Rico, Mexico, Honduras, Guatemala, Belize, Costa Rica, Panama, Colombia and Venezuela (collectively, "Caribbean Basin Countries"). The fund invests at least 65% of its total assets in a broad range of securities of issuers including U.S.-based companies, which engage in substantial trade with and derive substantial revenue from operations in the Caribbean Basin Countries.

Listed NASDAQ SmallCap Market
Symbol: CUBA

LETTER TO SHAREHOLDERS

February 6, 2001

Dear Fellow Shareholders:

We are pleased to present our semi-annual report for the period ended December 31, 2000. On
that date our net assets were $8,183,937 and NAV was $4.88 per share compared with
$9,849,312 (NAV at $5.87 per share) twelve months earlier. This represents a loss of 17%
in net asset value. Our share price declined 29% from $5.38 to $3.81 over the same period.

So far in calendar year 2001 things are looking better. For instance our share price is currently
$4 5/8, representing a gain of 21.4%; and our net asset value has improved by 10.3%
year-to-date.

At the end of December we took advantage of weakness in telecommunications issues to pick up
some year-end bargains. We reacquired a position in WorldCom Inc. (WCOM) and added a
new name, AT&T Latin America Corp. (ATTL), a company which provides telecommunications
service to Latin America, including Colombia. We made these buys when both companies were
trading at or near their lows. Since the beginning of January, we have sold our position in
Mavesa S.A. (MAV), the Venezuelan food product company, and added to our holdings in
Mastec, Inc. (MTZ) the construction firm founded by the late Jorge Mas-Canosa, former head of
the Cuban American National Foundation.

Premium/Discount

As the following graph depicts, the Fund has traded at both premiums and discounts every year
since inception. We believe that closed-end funds trading at discounts to net asset value represent
good value. Following this philosophy, I added to my personal holdings of The Herzfeld Caribbean
Basin Fund during last year's weakness.

Premium/Discount of The Herzfeld Caribbean Basin Fund from Inception

[GRAPHIC OMITTED]

Largest Allocations

The following tables present our largest investments and geographic allocations as of
December 31, 2000.

Daily net asset values and press releases on the Fund are available on the internet at
www.herzfeld.com.

I would like to take this time to thank the members of the Board of Directors for their
hard work and guidance and also to thank my fellow shareholders for your continued
support and suggestions.

Sincerely,

Thomas J. Herzfeld
Chairman of the Board and President

SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2000 (UNAUDITED)

See accompanying notes

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

* Non-income producing

STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2000 (UNAUDITED)

ASSETS

LIABILITIES

See accompanying notes.

STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 2000 (UNAUDITED)

INVESTMENT INCOME

EXPENSES

REALIZED AND UNREALIZED GAIN/LOSS
    ON INVESTMENTS

See accompanying notes.

STATEMENTS OF CHANGES IN NET ASSETS

See accompanying notes.

FINANCIAL HIGHLIGHTS

1 This ratio has been annualized; however, the percentage shown is not necessarily indicative of results for a full year.

NOTES TO FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Related Matters

The Herzfeld Caribbean Basin Fund, Inc. (the Fund) is a non-diversified, closed-end manage-
ment investment company incorporated under the laws of the State of Maryland on March 10,
1992, and registered under the Investment Company Act of 1940. The Fund commenced
investing activities in January, 1994. The Fund is listed on the NASDAQ SmallCap Market and
trades under the symbol "CUBA".

The Fund's investment objective is to obtain long-term capital appreciation. The Fund pursues
its objective by investing primarily in equity and equity-linked securities of public and private
companies, including U.S.-based companies, (i) whose securities are traded principally on a
stock exchange in a Caribbean Basin Country or (ii) that have at least 50% of the value of their
assets in a Caribbean Basin Country or (iii) that derive at least 50% of their total revenue from
operations in a Caribbean Basin Country. The Fund's investment objective is fundamental and
may not be changed without the approval of a majority of the Fund's outstanding voting
securities.

The Fund's custodian and transfer agent is Investors Bank & Trust Company, based in Boston,
Massachusetts.

Security Valuation

Investments in securities traded on a national securities exchange (or reported on the NASDAQ
national market) are stated at the last reported sales price on the day of valuation; other securities
traded in the over-the-counter market and listed securities for which no sale was reported on that
date are stated at the last quoted bid price. Short-term notes are stated at amortized cost, which
is equivalent to value. Restricted securities and other securities for which quotations are not
readily available are valued at fair value as determined by the Board of Directors.

Income Recognition

Security transactions are recorded on the trade date. Gains and losses on securities sold are
determined on the basis of identified cost. Dividend income is recognized on the ex-dividend
date, and interest income is recognized on an accrual basis. Discounts and premiums on
securities purchased are amortized over the life of the respective securities.

Deposits with Financial Institutions

The Fund may, during the course of its operations, maintain account balances with financial
institutions in excess of federally insured limits.

Use of Estimates in the Preparation of Financial Statements

The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.

Income Taxes

The Fund qualifies as a "regulated investment company" and as such (and by complying with
the applicable provisions of the Internal Revenue Code of 1986, as amended) is not subject to
federal income tax on taxable income (including realized capital gains) that is distributed to
shareholders.

The Fund has adopted a June 30 year-end for federal income tax purposes.

Distributions to Shareholders

Distributions to shareholders are recorded on the ex-dividend date. Income and capital gain
distributions are determined in accordance with income tax regulations which may differ from
generally accepted accounting principles.

NOTE 2. NON-MARKETABLE SECURITIES OWNED

Investment in securities includes the following securities for which readily ascertainable market
values were not available:

$165,000 principal, 4.5%, 1977 Republic of Cuba bonds purchased for $63,038. The bonds are
listed on the New York Stock Exchange and had been trading in default since 1960. A "regula-
tory halt" on trading was imposed by the New York Stock Exchange in July, 1995. As of
December 31, 2000, the position was valued at -0- by the Board of Directors, which believes
this approximates the bonds' fair value.

NOTE 3. TRANSACTIONS WITH AFFILIATES

HERZFELD / CUBA (the Advisor), a division of Thomas J. Herzfeld Advisors, Inc., is the
Fund's investment advisor and charges a monthly fee at the annual rate of 1.45% of the Fund's
average monthly net assets.

During the six months ended December 31, 2000, the Fund paid $9,540 of brokerage commis-
sions to Thomas J. Herzfeld & Co., Inc., an affiliate of the Advisor.

NOTE 4. INVESTMENT TRANSACTIONS

During the six months ended December 31, 2000, purchases and sales of investment securities,
other than government securities, were $834,837 and $906,711, respectively.

At December 31, 2000, the Fund's investment portfolio had gross unrealized gains of
$1,730,476 and gross unrealized losses of $1,359,149, resulting in a net unrealized gain of
$371,327.

RESULTS OF NOVEMBER 15, 2000 SHAREHOLDER MEETING

The annual meeting of shareholders of the fund was held on November 15, 2000. At the
meeting the nominee for Director was elected as follows:

A proposal to ratify the selection of Kaufman, Rossin & Co. as independent auditors for the fund was approved as follows: 1,338,921 votes for and 16,032 votes against with 10,049 abstentions.

OFFICERS AND DIRECTORS

THOMAS J. HERZFELD
Chairman of the Board, President
and Portfolio Manager

CECILIA L. GONDOR-MORALES
Secretary, Treasurer and Director

ANN S. LIEFF
Director

KENNETH A.B. TRIPPE
Director

ALBERT L. WEINTRAUB
Director