Should I buy a tablet or an e-reader?

I am a university student, and I have weekly readings that I need to do while on the move. I would like a portable device that would allow me to read files in both. Epub and.PDF formats. Most importantly, I would like to be able to modify these texts, such as underlining important bits, or taking notes about difficult passages. Is there an e-reader that does this, or am I better off buying a tablet?
