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Mg1-x(Ho2O3)xB2 alloys are prepared by in situ solid state reaction to investigate the magnetic Ho2O3 dopant on the flux pinning behaviour in MgB2. Ho2O3doping does not change the crystal structure, Tc, and Hc2of MgB2, however, Jc and Hirr have been significantly enhanced. Jc of 1.2 x 105 A/cm2 at 5 K in 5 T field is achieved for the best sample, significantly higher than the values achieved by the non-magnetic impurities, such as Ti-, Zr, Y2O3-doped MgB2. The observed magnetic HoB4 particles with a size between 5 and 10 nm were attributed to be the source for the enhanced flux pinning effects.