FLC OF A B727 CARGO FLT DSNDED BELOW THE ASSIGNED ALT BY 700 FT WHILE SLOWING TO ENTER HOLDING AT PXT.

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WE HAD JUST LEVELED OFF AT FL190 AND PASSED THE PXT VOR WHEN ZDC CALLED AND ISSUED US HOLDING INSTRUCTIONS 'HOLD NE OF THE PXT VOR ON THE ARR; R TURNS; 15 NM LEGS.' PWR WAS REDUCED TO SLOW FROM 340 KIAS TO HOLDING SPD (APPROX 225 KIAS ON THE PDCS). WE HAD SOME QUESTION ABOUT OUR CLRNC. SINCE NO HOLDING PATTERN WAS DEPICTED AT THAT POINT ON THE ARR AND WE HAD ALREADY PASSED THE PXT VOR; WE ASKED ATC TO CLARIFY OUR HOLDING INSTRUCTIONS. THEY CLRED US FOR A R TURN BACK TO THE VOR TO ENTER HOLDING THERE. MORE DISCUSSION FOLLOWED. WE WERE IN THE TURN TO INTERCEPT THE INBOUND RADIAL WHEN THE 'STABILIZER OUT OF TRIM' LIGHT CAME ON. AT THE SAME TIME WE NOTICED THE ACFT WAS DSNDING THROUGH FL185 AND THE AIRSPD DECREASING TOWARD 200 KIAS. PWR WAS ADDED; THE AUTOPLT DISCONNECTED; AND THE ACFT RETURNED TO FL190. A MOMENTARY STICK SHAKER WAS ENCOUNTERED DURING RECOVERY. OUR ALT GOT AS LOW AS FL183. DURATION OF THE ALTDEV WAS 1 MIN OR LESS. ATC NEVER QUESTIONED US ABOUT OUR ALT. OUR CREW DISCUSSED THE INCIDENT AFTER LNDG. WE ACKNOWLEDGED THAT CONFUSION OVER OUR CLRNC HAD DISTR US FROM OTHER FLYING DUTIES. WE CONSIDERED THAT PERHAPS THE AUTOPLT STABILIZER TRIM JUST COULD NOT KEEP UP AS WE SLOWED DOWN SIGNIFICANTLY. WE THOUGHT THE AUTOPLT WAS IN 'ALT HOLD' BUT JUST PRIOR TO DISCONNECT; THE GREEN 'ALT HOLD' APD LIGHT WAS NOT ON. NO ONE HEARD THE ALT ALERTER GO OFF AS THE DEV EXCEEDED 300 FT; AND THE ALT ALERTER LIGHTS WERE NOT ON. WE COULD NOT EXPLAIN WITH CERTAINTY HOW THE DEV OCCURRED; BUT TALKED ABOUT WAYS TO PREVENT A SIMILAR INCIDENT FROM OCCURRING AGAIN (EMPHASIS ON FLYING THE AIRPLANE; BETTER CREW COM; ETC). THE AUTOPLT AND ALT ALERTER WORKED NORMALLY FOR THE REMAINDER OF THE FLT.