FORM 4 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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(Print or Type Responses)

1. Name and Address of Reporting Person * DONDERO JAMES D   2. Issuer Name and Ticker or Trading Symbol Highland Credit Strategies Fund [HCF] 5. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director _____ 10% Owner __X__ Officer (give title below) _____ Other (specify below) CEO and President (Last) (First) (Middle) 13455 NOEL ROAD, STE 1300 3. Date of Earliest Transaction (Month/Day/Year) 09/05/2007 (Street) DALLAS, TX 75240 4. If Amendment, Date Original Filed(Month/Day/Year) 6. Individual or Joint/Group Filing(Check Applicable Line) _X_ Form filed by One Reporting Person ___ Form filed by More than One Reporting Person (City) (State) (Zip) Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4) Code V Amount (A) or (D) Price Common Stock 09/05/2007   P(1)   14,871 A $ 18.7885 88,742 I See Footnote (2) (3)

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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security (Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code (Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date (Month/Day/Year)

7. Title and Amount of Underlying Securities (Instr. 3 and 4)

8. Price of Derivative Security (Instr. 5)

9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)

11. Nature of Indirect Beneficial Ownership (Instr. 4)

Code

V

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Reporting Owners

Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
DONDERO JAMES D 13455 NOEL ROAD, STE 1300 DALLAS, TX 75240			CEO and President

Signatures

James Dondero		09/07/2007
**Signature of Reporting Person		Date

Explanation of Responses:

*	If the form is filed by more than one reporting person, see Instruction 4(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
(1)	Shares purchased by the Highland Capital Management Retirement Plan and Trust (the "Retirement Plan and Trust").
(2)	Includes (i) approximately 6,903 shares held by Highland Capital Management Services, Inc. ("HCMS"), (ii) 32,343 shares held by the Highland 401(k) (the "401(k) Plan") and (iii) 49,496 shares held by the Retirement Plan and Trust.
(3)	Highland Capital Management, LP ("HCMLP") is the investment advisor for Highland Credit Strategies Fund. HCMLP maintains the 401(k) Plan and Retirement Plan and Trust for the benefit of its employees. Mr. Dondero is the trustee of the 401(k) Plan and Retirement Plan and Trust, as well as a participant in the 401(k) Plan and Retirement Plan and Trust, and he owns interests in HCMS. The 401(k) Plan, Retirement Plan and Trust and HCMLP expressly disclaim beneficial ownership of the securities reported herein. Each of HCMS and Mr. Dondero expressly disclaims beneficial ownership of the securities reported herein, except to the extent of its or his pecuniary interest therein.

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