NICHOLAS FUND INC, 485BPOS, 1997-07-30

NICHOLAS FUND INC
485BPOS, 1997-07-30

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July 30, 1997
VIA EDGAR SUBMISSION
- --------------------

Securities and
Exchange Commission
450 Fifth Street N.W.
Washington D.C. 20549

Re: Nicholas Fund, Inc.
Registration No. 2-30447
Post Effective Amendment No. 44

Dear Sir or Madam:

On behalf of and as counsel for the Nicholas Company, Inc. (the
"Fund"), we are herewith transmitting Post-Effective Amendment No. 44
to the Registration Statement of the Fund on Form N-1A, pursuant to the
requirements of Regulation S-T and the EDGAR Filing Manual. A manually-
executed copy of such Post-Effective Amendment has been retained at the
offices of the Fund pursuant to 17 C.F.R. section 232.302(b).

Also attached is a copy of Post-Effective Amendment No. 44,
marked to show changes from the Fund's prior Prospectus and Statement
of Additional Information dated July 30, 1996. With respect to Part B
of the Registration Statement, sections in the Statement of Additional
Information corresponding to sections of the Prospectus have been
amended to confirm.

Please call the undersigned (collect) at (414) 276-0200 if you
require additional information.

Very truly yours,

DAVIS & KUELTHAU, S.C.

/s/ Lesli Hosford McLinden
--------------------------
Lesli Hosford McLinden

File No. 2-30447

FORM N-1A

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

PRE-EFFECTIVE AMENDMENT NO. ___

POST-EFFECTIVE AMENDMENT NO. 44

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

AMENDMENT NO. 23

NICHOLAS FUND, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

700 NORTH WATER STREET, SUITE 1010, MILWAUKEE, WISCONSIN 53202
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

414-272-6133 or 800-227-5987
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

DAVIS & KUELTHAU, S.C.
111 EAST KILBOURN AVENUE, SUITE 1400
MILWAUKEE, WI 53202-6613
(414) 276-0200

ALBERT O. NICHOLAS, PRESIDENT
NICHOLAS FUND, INC.
700 NORTH WATER STREET
MILWAUKEE, WISCONSIN 53202

(Names and Addresses of Agents for Service)

It is proposed that the filing will become effective:

[ ] immediately upon filing pursuant to paragraph (b)
[X] on July 30, 1997 pursuant to paragraph (b)
[ ] sixty (60) days after filing pursuant to paragraph (a)(1)
[ ] on __________________ pursuant to paragraph (a) (1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on __________________ pursuant to paragraph (a)(2) of Rule 485

Pursuant to Rule 24f-2, the Registrant hereby registers an indefinite
amount of securities. On May 23, 1997, Registrant filed the
necessary Rule 24f-2 Notice and filing fee with the Commission for
its fiscal year ended March 31, 1997.

NICHOLAS FUND, INC.
CROSS REFERENCE SHEET
(As required by rule 481(A))

PART A. INFORMATION REQUIRED IN PROSPECTUS HEADING
- ------ ---------------------------------- -------
Item 1. Cover Page......................... Cover Page

Item 2. Synopsis........................... Performance Data

Item 3. Condensed Financial Information.... Consolidated Disclosure of Fund
Fees and Expenses; Financial
Highlights

Item 4. General Description of Registrant.. Introduction; Investment
Objectives and Policies;
Investment Restrictions

Item 5. Management of the Fund............. Investment Advisor, Management
Directors; Executive Officers
of the Fund
Item 5A. Management's discussion of Fund
Performance........................ Management's discussion of Fund
Performance

Item 6. Capital Stock and Other Securities. Transfer of Capital Stock;
Dividends and
Federal Tax Status; Description
of Capital Stock; Annual
Meeting; Shareholder Reports

Item 7. Purchase of Securities Being Offered Purchase and Redemption of
Capital Stock; Exchange
Priviliges to Other Nicholas Co.
Funds; Transfer of Capital
Stock; Determination of Net
Asset Value; Dividend
Reinvestment Plan; Systematic
Withdrawl Plan; Individual
Retirement Account; Master
Retirement Plan.

Item 8. Redemption or Repurchase........... Purchase of Capital Stock;
Redemption of Capital Stock

Item 9. Legal Proceedings.................. N/A

PART B. INFORMATION REQUIRED IN STATEMENT OF HEADING
ADDITIONAL INFORMATION
- ------- ------------------------------------ -------
Item 10. Cover Page......................... Cover Page

Item 11. Table of Contents.................. Table of Contents

Item 12. General Information and History.... Introduction

Item 13. Investment Objectives and Policies. Investment Objectives and
Policies; Investment
Restrictions

Item 14. Management of the Fund............. Investment Advisor; Management;
Directors, Executive Officers of
the Fund

Item 15. Control Persons and Principal
Holders of Securities.............. Principal Shareholders

Item 16. Investment Advisory and Other
Services........................... Investment Advisor; Custodian and
Transfer Agent; Councel and
Auditors
Item 17. Brokerage Allocation and other
Practices......................... Brokerage

Item 18. Capital Stock and Other Securities. Transfer of Capital Stock;
Income; Dividends and Federal
Tax Status; Description of
Capital Stock; Shareholder
Reports; Annual Meeting

Item 19. Purchase, Redemption and
Pricing of Securities
Being Offered..................... Purchase of Capital Stock;
Redemption of Capital Stock;
Exchange Privilages to Other
Nicholas Company Funds;
Transfer of Capital Stock;
Determination of Net Asset
Value; Dividend Reinvestment
Plan; Individual Retirement
Account; Master Retirement
Plan; Systematic Withdrawl
Plan

Item 20. Tax Status........................ Income; Dividends and Federal
Tax Status

Item 21. Underwriters...................... N/A

Item 22. Calculation of Performance Data... Performance Data

Item 23. Financial Statements.............. Financial Information

PART C. OTHER INFORMATION HEADING
- ------- ------------------ -------
Item 24. Financial Statements and
Exhibits.......................... Part C

Item 25. Persons Controlled By or
Under Common Control
with Registrant................... Part C

Item 26. Number of Holders of
Securities........................ Part C

Item 27. Indemnification................... Part C

Item 28. Business and Other
Connections of Investment
Adviser........................... Part C

Item 29. Principal Underwriters............ Part C

Item 30. Location of Accounts and
Records........................... Part C

Item 31. Management Services............... Part C

Item 32. Undertakings...................... Part C

Nicholas Fund, Inc.

FORM N-1A

PART A: PROSPECTUS

NICHOLAS FUND, INC.

PROSPECTUS

700 North Water Street, Suite 1010
Milwaukee, Wisconsin 53202
(414) 272-6133

Nicholas Fund, Inc. (the "Fund") is an open-end management
investment company, having as its investment objective capital
appreciation in which income is a secondary consideration. To
achieve its objective, the Fund invests in a diversified list of
common stocks having growth potential.

NO-LOAD FUND - NO SALES OR REDEMPTION CHARGE

Investment Adviser
NICHOLAS COMPANY, INC.

Minimum Initial Investment - $500

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

This Prospectus sets forth concisely the information about
the Fund that a prospective investor should know before
investing. Additional information about the Fund has been filed
with the Securities and Exchange Commission in the form of a
Statement of Additional Information, dated July 31, 1997. The
Fund will provide copies of the Statement of Additional
Information upon request without charge to each person to whom a
Prospectus is delivered. Such requests may be made by telephone
or by letter. The telephone number and address of the Fund are
shown above.

July 30, 1997

INVESTORS SHOULD READ AND RETAIN THIS PROSPECTUS FOR FUTURE
REFERENCE.

TABLE OF CONTENTS

Page

Introduction............................................ 2
Consolidated Disclosure of Fund Fees and Expenses....... 2
Financial Highlights.................................... 3
Management's Discussion of Fund Performance............. 3
Performance Data........................................ 5
Investment Objectives and Policies...................... 5
Risk Factors............................................ 6
Investment Restrictions................................. 6
Investment Adviser...................................... 7
Management-Directors and Executive Officers of the Fund. 8
Purchase of Capital Stock............................... 10
Redemption of Capital Stock............................. 11
Signature Guarantees.................................... 12
Exchange Privilege to Other Nicholas Company Funds...... 13
Transfer of Capital Stock............................... 14
Determination of Net Asset Value........................ 14
Dividends and Federal Tax Status........................ 14
Dividend Reinvestment Plan.............................. 15
Systematic Withdrawal Plan.............................. 15
Individual Retirement Account........................... 15
Self-Employed Master Retirement Plan.................... 15
Description of Capital Stock............................ 16
Annual Meeting.......................................... 16
Shareholder Reports..................................... 16
Custodian and Transfer Agent............................ 16
Counsel and Auditors.................................... 16

No person has been authorized to give any information or to
make any representations other than those contained in this
Prospectus and the Statement of Additional Information dated July
30, 1997 and, if given or made, such information or
representations may not be relied upon as having been authorized
by Nicholas Fund, Inc.

This Prospectus does not constitute an offer to sell
securities in any state or jurisdiction in which such offering
may not lawfully be made. The delivery of this Prospectus at any
time shall not imply that there has been no change in the affairs
of Nicholas Fund, Inc. since the date hereof.

NICHOLAS FUND, INC.

INTRODUCTION

Nicholas Fund, Inc. (the "Fund") was incorporated under the
laws of Maryland on July 10, 1968. The Fund is an open-end,
diversified management investment company registered under the
Investment Company Act of 1940, as amended. This type of
investment company is commonly called a mutual fund. As an
open-end investment company, it obtains its assets by
continuously selling shares of its common stock, $.50 par value,
to the public. Proceeds from such sales are invested by the Fund
in securities of other companies. The resources of many
investors are combined and each individual investor has an
interest in every one of the securities owned by the Fund. The
Fund provides each individual investor with diversification by
investing in the securities of many different companies in a
variety of industries and furnishes experienced management to
select and watch over its investments. As an open-end investment
company, the Fund will redeem any of its outstanding shares on
demand of the owner at their net asset value next determined
following receipt of the redemption request in proper form. The
investment adviser to the Fund is Nicholas Company, Inc. (the
"Adviser").

CONSOLIDATED DISCLOSURE OF FUND FEES AND EXPENSES

Shareholder Transaction Expenses

Maximum Sales Load Imposed on Purchases
(as a percentage of offering price).................... None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price)................... None
Deferred Sales Load
(as a percentage of original purchase price
or redemption proceeds, if applicable)................. None
Redemption Fees
(as a percent of redemption proceeds, if applicable).. None
Exchange Fee(1)......................................... None

Annual Fund Operating Expenses(2)(as a percentage of average net assets)

Management Fees......................................... 0.65%
12b-1 Fees.............................................. None
Other Expenses.......................................... 0.07%
Total Fund Operating Expenses........................... 0.72%

(1) There is a $5 fee for telephone exchanges only.

(2) Annual Fund Operating Expenses are based on expenses
incurred for the year ended March 31, 1997.

Example

A shareholder would pay the following expenses on a $1,000
investment, assuming: (1) 5% annual return and (2) redemption at
the end of each time period:

One Year Three Years Five Years Ten Years
-------- ----------- ---------- ---------
$7 $23 $40 $89

This Example should not be considered a representation of
past or future expenses. Actual expenses may be greater or
lesser than those shown.

The purpose of the table is to assist the prospective
investor in understanding the various costs and expenses that an
investor in the Fund will bear directly and indirectly. For a
description of "Management Fees" and "Other Expenses," see
"Investment Adviser."

FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the year)

The following Financial Highlights of the Fund, for the ten
years ended March 31, 1997 have been examined by Arthur Andersen
LLP, independent public accountants, whose report thereon is
included in the Fund's Annual Report for the fiscal year ended
March 31, 1997. The Financial Highlights should be read in
conjunction with the financial statements and related notes
included in the Fund's Annual Report which is incorporated herein
by reference.

<TABLE>
Year ended March 31,
--------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $63.81 $52.22 $51.10 $52.91 $49.68 $42.99 $37.72 $35.27 $32.15 $39.94
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .40 .57 .69 .74 .75 .70 .80 .96 .97 1.07
Net gains or (losses) on securities
(realized and unrealized) 8.64 15.68 4.46 (.68) 5.20 7.49 5.48 3.46 3.63 (2.99)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------

Total from investment operations 9.04 16.25 5.15 .06 5.95 8.19 6.28 4.42 4.60 (1.92)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends (from net
investment income) (.42) (.57) (.71) (.82) (.68) (.68) (.79) (.92) (1.03) (1.84)
Distributions (from capital gains) (5.32) (4.09) (3.32) (1.05) (2.04) (.82) (.22) (1.05) (.45) (4.03)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions (5.74) (4.66) (4.03) (1.87) (2.72) (1.50) (1.01) (1.97) (1.48) (5.87)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------

NET ASSET VALUE, END OF YEAR $67.11 $63.81 $52.22 $51.10 $52.91 $49.68 $42.99 $37.72 $35.27 $32.15
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------ ------ ------ ------

TOTAL RETURN 14.68% 32.38% 10.88% 0.04% 12.41% 19.33% 17.13% 12.55% 14.81% (3.74%)

RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (millions) $3.989.5 $3,655.3 $3,004.4 $2,941.2 $3,013.4 $2,234.1 $1,642.8 $1,389.5 $1,172.3 $1,117.8
Ratio of expenses to average net assets .72% .74% .77% .78% .76% .78% .81% .82% .86% .86%
Ratio of net investment income
to average net assets .61% .87% 1.34% 1.40% 1.53% 1.60% 2.17% 2.56% 2.84% 3.04%
Portfolio turnover rate 15.18% 25.70% 29.82% 33.39% 10.20% 14.58% 21.85% 21.31% 24.03% 31.63%
Average commission rate paid by the
Fund on portfolio investment
transactions* $0.0473 $0.0492 -- -- -- -- -- -- -- --

MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE

Individual stock selection is the focal point of the
Adviser's equity philosophy. The Adviser's efforts are directed
toward purchasing stocks that represent good value based upon the
criteria outlined below. It is also the Adviser's strong
conviction that superior long-term results are achieved through
the minimization of capital losses during adverse periods in the
general market. The Adviser primarily seeks stocks where the
price/earnings ratio is low in relation to earnings growth or
where the price is reasonable in relation to book value. Above
average secular earnings growth and strong current earnings
momentum are important factors.

The Fund completed its fiscal year ended March 31, 1997 with
a 14.68% total annual return (including reinvested dividends). In
comparison, the Standard & Poors 500r Composite Stock Price Index
("S&P 500 Index") increased by 19.83% and the Russell 2000 Index
increased by 5.11% for the same period. During the fiscal quarter
ended March 31, 1997, the Fund produced a total return of 1.77%,
compared to 2.68% and -5.17% for the S&P 500 Index and Russell
2000 Index, respectively. The Fund's cash position was 2.60%
at fiscal year ended March 31, 1997.

In assessing investment performance, shareholders should
keep in mind the nature of the current stock market. Large
market capitalization stocks have performed substantially better
than small market capitalization stocks, as evidenced by the
recent result of the S&P 500 Index versus the Russell 2000 Index.
A few large company equities are greatly responsible for the
gains that we see in the major market averages. Further, any
adverse development in a company's fundamentals can result in a
disastrous, inordinate decline in its share price. Many such
declines have occurred in the recent months, indicating that the
market has become less bullish in its overall posture. We are
attempting to take advantage of these conditions in the
marketplace in our stock selection process.

Set forth below is a comparison of the initial account value
and subsequent account values at the end of each of the most
recently completed ten fiscal years of the Fund, assuming a
$10,000 investment in the Fund at the beginning of the first
year, to the same investment over the same periods in the S&P 500
Index.

(The performance graph plot points are as follows:)

Fiscal Nicholas S&P 500
Year Fund % returns Value % returns
Ended Value
- ------- ---------- --------- --------- -----------------

03/31/87 10,000.00 10,000.00
03/31/88 9,626.17 -3.74% 9,166.75 -8.33%
03/31/89 11,051.92 14.81% 10,830.35 18.15%
03/31/90 12,439.25 12.55% 12,917.59 19.27%
03/31/91 14,570.09 17.55% 14,779.22 14.41%
03/31/92 17,386.29 19.33% 16,410.86 11.04%
03/31/93 19,543.61 12.41% 18,910.14 15.23%
03/31/94 19,551.40 0.04% 19,188.53 1.47%
03/31/95 21,679.38 10.88% 22,170.43 15.54%
03/31/96 28,699.16 32.38% 29,289.36 32.11%
03/31/97 32,912.50 14.68% 35,096.44 19.83%

The Fund's average annual total returns for the one year,
five year and ten year periods ended on the last day of the most
recent fiscal year are as follows:

One Five Ten
Year Ended Years Ended Years Ended
March 31, 1997 March 31, 1997 March 31, 1997
-------------- -------------- --------------

Average Annual
Total Return. . . . 14.68% 13.61% 12.65%

Total returns are historical and include change in share
price and reinvestment of dividend and capital gain
distributions. Past performance is no guarantee of future
results. Principal value and return will fluctuate so an
investment, when redeemed, may be worth more or less than
original cost.

PERFORMANCE DATA

The Fund may from time to time include its "total return" or
"average annual total return" in advertisements or in information
furnished to present or prospective shareholders. The "total
return" of the Fund is expressed as a ratio of the increase (or
decrease) in value of a hypothetical investment in the Fund at
the end of a measuring period to the amount initially invested.
The "average annual total return" is the total return discounted
for the number of represented time periods and is expressed as a
percentage. The rate represents the annual rate achieved on the
initial investment to arrive at the ending redeemable value. The
ending value assumes reinvestment of dividend and capital gain
distributions and the reduction of account charges, if any. This
computation does not reflect any sales load or other nonrecurring
charges, since the Fund is not subject to such charges.

The "total return" and the "average annual total return"
calculations are historical measures of performance and are not
necessarily indicative of future performance. Such measurements
will vary from time to time depending upon market conditions, the
composition of the Fund's portfolio, operating expenses, and the
distribution policy as determined by the Board of Directors.
These factors should be considered when evaluating the Fund's
performance. For additional information regarding the
calculation of this performance data, see the Statement of
Additional Information.

The figures below show the total return performance for the
Fund from the date of initial public offering to March 31, 1997,
as compared to the S&P 500 Index and the Consumer Price Index.
The calculations for the Fund assume reinvestment of all capital
gain distributions and dividends and do not take into account
tax consequences to the individual investor.

Performance will vary from time to time and these results
are not necessarily representative of future results. This
prospectus may be in use for a full year and, accordingly,
performance figures for periods subsequent to March 31, 1997 may
vary substantially from the figures shown below:

Percentage Change from
July 14, 1969(1) to Average Annual
March 31, 1997 Total Return
----------------------- --------------

Net Asset Value Per Share
of Nicholas Fund, Inc.(2) 3269.73% 13.53%
Standard & Poor's 500
Index - Reinvested 2151.62% 11.88%
Consumer Price Index 336.89% 5.46%

(1) Date of initial public offering. The S&P 500 Index
and Consumer Price Index date used was June 30, 1969.

(2) Includes the reinvestment of all dividend and capital
gain distributions in additional shares.

INVESTMENT OBJECTIVES AND POLICIES

The Fund has adopted a primary investment objective and
certain other policies which are not fundamental and may be
changed by the Board of Directors without shareholder approval.
Any such change will be made only upon advance notice to
shareholders.

The primary investment objective of the Fund is capital
appreciation, and securities are selected for its portfolio on
that basis. Current income will be a secondary factor in
considering the selection of investments. Market risks are
inherent in any investment; therefore, there can be no assurance
that the objective of the Fund will be realized, nor can there be
any assurance against possible loss in the value of the Fund's
portfolio.

It is the policy of the Fund to invest in securities which
the Adviser believes to offer possibilities for increase in
value. These will generally be common stocks of companies which
the Adviser considers to have favorable long-term prospects.
Since the major portion of the Fund's portfolio consists of
common stocks, its net asset value may be subject to greater
fluctuation than a portfolio containing a substantial amount of
fixed-income securities.

Securities of unseasoned companies, where the risks are
considerably greater than with securities of more established
companies, may also be acquired from time to time by the Fund
when the Adviser believes such investments offer possibilities of
capital appreciation. However, the Fund will not invest more
than a total of 5% of its total net assets in the securities of
unseasoned companies, that is, companies which have a record of
less than three years' continuous operation. Reference is made
to the Statement of Additional Information for additional
investment restrictions adopted by the Fund.

Debt securities and preferred stock that are convertible
into or carry rights to acquire common stock, and other long-term
investment grade debt securities, may be acquired from time to
time when the Adviser thinks such investments offer the
possibility of appreciation in value.

It is anticipated that the major portion of the portfolio
will at all times be invested in common stocks. However, there
is no minimum or maximum percentage of the Fund's assets which is
required to be invested in any type of security. Cash and United
States Government securities will be retained by the Fund in an
amount sufficient to provide moderate liquid reserves. The Fund
reserves the freedom to temporarily invest its assets in
investment grade fixed-income securities as a defensive measure,
when conditions, such as a decline in the stock market, are
deemed to warrant such action. "Investment grade fixed-income
securities" refers to fixed-income securities ranked in the top
four categories of Standard & Poor's Corporation or Moody's
Investors Services, Inc. rating services.

Securities are not purchased with a view to rapid turnover
or to obtain short-term trading profits, which the Fund refers to
as profits on assets held less than twelve months. The term
"portfolio turnover rate" refers to the percentage determined by
dividing the lesser of purchases or sales of portfolio securities
during the year by the average value of the portfolio securities
owned by the Fund during the year. "Portfolio turnover rate"
excludes investments in all securities with less than one year to
maturity at the time of purchase.

RISK FACTORS

The Fund will often purchase common stock of small and
medium sized companies in seeking capital appreciation. These
companies may be unseasoned and often fluctuate in price more
than common stocks of larger, more mature companies, such as many
of those included in the Dow Jones Industrial Average.
Therefore, during the history of the Fund, its price per share
has often been more volatile, in both "up" and "down" markets
than most of the popular stock averages.

INVESTMENT RESTRICTIONS

The Fund has adopted the following restrictions, which are
matters of fundamental policy and cannot be changed without the
approval of the holders of a majority of its outstanding shares
or, if it is less, 67% of the shares represented at a meeting of
shareholders at which 50% or more of the holders are represented
in person or by proxy:

1. The Fund will not purchase securities on margin,
participate in a joint trading account, sell securities short, or
act as an underwriter or distributor of securities other than its
own capital stock. The Fund will not lend money, except for:

(a) the purchase of a portion of an issue of publicly
distributed debt securities;

(b) the purchase of a portion of investment grade
bonds, debentures or other debt securities of types commonly
distributed privately to financial institutions in an amount
not to exceed 10% of the Fund's total net assets, taken at
market.

2. The Fund will not purchase or sell real estate or
interests in real estate, commodities or commodity futures. The
Fund may invest in the securities of real estate investment
trusts, but not more than 10% in value of the Fund's total net
assets will be so invested.

3. The Fund may make temporary bank borrowings (not in
excess of 5% of the lower of cost or market value of the Fund's
total assets) for emergency or extraordinary purposes.

4. The Fund will not pledge any of its assets.

5. Securities of other regulated investment companies will
not be purchased, except on the open market where no commission
or profits result, other than the broker's commission, or as a
part of a plan of merger, consolidation or reorganization
approved by shareholders of the Fund. No more than 5% of the
value of the Fund's total net assets will be invested in the
securities of other regulated investment companies.

6. Investments will not be made for the purpose of
exercising control or management of any company. The Fund will
not purchase securities of any issuer if, as a result of such
purchase, the Fund would hold more than 10% of the voting
securities of such issuer.

7. Not more than 5% of the Fund's total net assets, taken
at market value, will be invested in the securities of any one
issuer (excluding United States Government securities).

8. Not more than 25% of the Fund's total net assets will be
concentrated in companies of any one industry or group of related
industries.

9. The Fund will not acquire or retain any security issued
by a company, if an officer or director of such company is an
officer or director of the Fund, or an officer, director,
shareholder or other interested person of the Adviser.

All percentage limitations apply as of the date of
investment by the Fund.

In addition to the foregoing restrictions, the Fund has
adopted other restrictions to comply with the securities laws of
various states set forth in the Statement of Additional
Information. These restrictions may be changed by the Board of
Directors of the Fund without shareholder approval. However, so
long as the securities of the Fund are registered for sale in
those states which require these restrictions, the restrictions
will not be changed.

INVESTMENT ADVISER

Under an investment advisory agreement dated July 17, 1985
(the "Agreement"), Nicholas Company, Inc., 700 North Water
Street, Milwaukee, Wisconsin 53202, furnishes the Fund with
continuous investment service and is responsible for overall
management of the Fund's business affairs subject to supervision
by the Fund's Board of Directors.

Albert O. Nicholas was the portfolio manager of the Fund
from its inception in July, 1969 through November, 1996. Since
November, 1996, Albert O. Nicholas and David O. Nicholas have
been co-portfolio managers of the Fund and are primarily
responsible for the day-to-day management of the Fund's
portfolio.

Albert O. Nicholas is also portfolio manager of, and has had
responsibility for the day-to-day management of the portfolios of
the Nicholas Income Fund, Inc. and the Nicholas Equity Income
Fund, Inc. since the Nicholas Company, Inc. has served as
investment advisers for such funds. David O. Nicholas has been
portfolio manager and primarily responsible for the day-to-day
management of the portfolios of Nicholas II, Inc. and Nicholas
Limited Edition, Inc. since March, 1993.

The annual fee paid to the Adviser is paid monthly and is
based on the average net asset value of the Fund, as determined
by valuations made at the close of each business day of the
month. The annual fee is seventy-five one hundredths of one
percent (.75 of 1%) of the average net asset value of the Fund up
to and including $50,000,000 and sixty-five one hundredths of one
percent (.65 of 1%) of the average net asset value in excess of
$50,000,000. This fee may be higher than the fee paid by most
other mutual funds. As of March 31, 1997, the net asset value
of the Fund was $3,989,488,700. During the fiscal year ended
March 31, 1997, the Fund paid the Adviser an aggregate of
$25,060,663 in fees.

Under the Investment Advisory Agreement, the Adviser
provides the Fund with the non-exclusive right to use the name
"Nicholas." At its own expense and without reimbursement from
the Fund, the Adviser furnishes office space, office facilities
and executive officers. The Adviser bears all executive expenses
and sales and promotional expenses of the Fund, other than
expenses incurred in complying with laws regulating the issue or
sale of securities and fees paid for attendance at Board meetings
to directors who are not interested persons of the Adviser or
officers or employees of the Fund. The Fund will pay all of its
operating expenses including, but not limited to, the costs of
preparing and printing its registration statements required under
the Securities Act of 1933 and the Investment Company Act of 1940
and any amendments thereto, the expense of registering its shares
with the Securities and Exchange Commission and in the various
states, the printing and distribution costs of prospectuses
mailed to existing shareholders and to persons making unsolicited
requests for information, the cost of stock certificates, reports
to shareholders, interest charges, taxes and legal fees and
expenses. Also included are salaries of administrative and
clerical personnel, association membership dues, auditing and
accounting services, fees and expenses of any custodian or
trustees having custody of Fund assets, printing and mailing
expenses, postage and charges and expenses of dividend disbursing
agents, registrars and stock transfer agents.

The Adviser has undertaken to reimburse the Fund to the
extent that the aggregate annual operating expenses, including
the investment advisory fee but excluding interest, taxes,
brokerage commissions, and extraordinary expenses, exceed the
lowest, i.e., most restrictive percentage of the Fund's average
net assets established by the laws of the states in which the
Fund's shares are registered for sale, as determined by
valuations made as of the close of each business day of the year.
Currently the lowest percentage-of-asset limitation of any state
in which the Fund is registered is 1.5% of the first $30 million
of average net assets and 1.0% over that amount. The Adviser
shall, on a monthly basis, reimburse the Fund by offsetting
against its monthly fee all expenses in excess of these amounts
as prorated on an annual basis.

Albert O. Nicholas is President and a Director of both the
Fund and the Adviser. Thomas J. Saeger, Executive Vice-President
and Secretary of the Fund, is Executive Vice-President and
Assistant Secretary of the Adviser. David L. Johnson is
Executive Vice-President of the Fund and Executive Vice-President
of the Adviser. He is a brother-in-law of Albert O. Nicholas.
Lynn S. Nicholas and David O. Nicholas are Senior Vice-Presidents
of the Fund and Senior Vice-Presidents of the Adviser.
David O. Nicholas is also a Director of the Adviser. They are
the daughter and son, respectively, of Albert O. Nicholas.
Candace L. Lesak is Vice-President of the Fund, and is an
employee of the Adviser. Christina M. Mouradian is Assistant
Treasurer of the Fund and is an employee of the Adviser. Jeffrey
T. May is a Senior Vice-President and Treasurer of the Fund and
Senior Vice-President and Treasurer of the Adviser. Tracy C.
Eberlein is an Assistant Vice President of the Fund and an
employee of the Adviser. David E. Leichtfuss, 100 East Wisconsin
Avenue, Milwaukee, Wisconsin, is a Director and the Secretary of
the Adviser. Mr. Leichtfuss is a partner with the law firm of
Michael, Best & Friedrich, Milwaukee, Wisconsin.
Daniel J. Nicholas, 2618 Harlem Boulevard, Rockford, Illinois, is
the only other Director of the Adviser. Mr. Nicholas, a brother
of Albert O. Nicholas, is a private investor.

Ninety-one percent (91%) of the outstanding voting
securities of the Adviser are owned by Albert O. Nicholas.

MANAGEMENT - DIRECTORS AND EXECUTIVE OFFICERS OF THE FUND

The overall operations of the Fund are conducted by the
officers of the Fund under the control and direction of its Board
of Directors. The following table sets forth the pertinent
information about the Fund's officers and directors as of June
30, 1997:

Name, Age Positions Held Principal Occupations
and Address With Fund During Past 5 Years
----------- -------------- ---------------------

*Albert O. Nicholas, 66 President, President, and Director,
700 North Water Street Director Nicholas Company, Inc.,
Milwaukee, WI 53202 and Portfolio the Adviser to the Fund,
Manager since 1967. He has been
Portfolio Manager (or Co-
Portfolio Manager, in the
case of the Fund, since
November 1996) for,
and primarily responsible
for the day-to-day
management of, the
portfolios of the Fund,
Nicholas Equity Income
Fund, Inc. and Nicholas
Income Fund, Inc. since
the Adviser has served as
investment adviser for
such funds. He was
Portfolio Manager for
Nicholas II, Inc. and
Nicholas Limited Edition,
Inc. from the date of
each such fund's
inception until March
1993. He is a Chartered
Financial Analyst.

Melvin L. Schultz, 64 Director Director and Management
3636 North 124th Street Consultant, Professional
Wauwatosa, WI 53222 Management of Milwaukee,
Inc. He is a Certified
Professional Business
Consultant and provides
financial advice to
members of the medical
and dental professions.

Richard Seaman, 71 Director Management Consultant on
5270 North Maple Lane an independent basis
Nashotah, WI 53058 primarily in the areas of
mergers, acquisitions and
strategic planning.

Robert H. Bock, 65 Director Professor, University of
102 Commerce Wisconsin School of
1155 Observatory Drive Business, Madison,
Madison, WI 53706 Wisconsin. From 1973 to
1984 he was the Dean of
the School of Business at
the University of
Wisconsin.

David L. Johnson, 55 Executive Executive Vice-President,
700 North Water Street Vice-President Nicholas Company, Inc.,
Milwaukee, WI 53202 the Adviser to the Fund
since 1980. He is a
Chartered Financial
Analyst.

Thomas J. Saeger, 53 Executive Executive Vice-President
700 North Water Street Vice-President, and Assistant Secretary,
Milwaukee, WI 53202 Secretary Nicholas Company, Inc.,
the Adviser to the Fund,
since 1969. He is a
Certified Public
Accountant.

Lynn S. Nicholas, 41 Senior Vice- Senior Vice-President,
700 North Water Street President Nicholas Company, Inc.,
Milwaukee, WI 53202 the Adviser to the Fund,
and employed by the
Adviser since 1983. She
is a Chartered Financial
Analyst.

David O. Nicholas, 36 Senior Vice- Senior Vice-President
700 North Water Street President Co- and Director, Nicholas
Milwaukee, WI 53202 Portfolio Company, Inc., the
Manager Adviser to the Fund, and
employed by the
Adviser since 1985. He
has been Co-Portfolio
Manager of the Fund since
1996. He is a Chartered
Financial Analyst.

Jeffrey T. May, 41 Senior Vice Senior Vice-President and
700 North Water Street President Treasurer, Nicholas
Milwaukee, WI 53202 Company, Inc., Adviser to
the Fund, and employed by
the Adviser since 1987.
He is a Certified Public
Accountant.

Candace L. Lesak, 39 Vice-President Employee of Nicholas
700 North Water Street Company, Inc., the
Milwaukee, WI 53202 Adviser to the Fund,
since 1983. She is a
Certified Financial
Planner.

Christina M. Mouradian, 35 Assistant Employee of Nicholas
700 North Water Street Treasurer Company, Inc., the
Milwaukee, WI 53202 Adviser to the Fund,
since 1985.

Tracy C. Eberlein, 36 Assistant Employee of Nicholas
700 North Water Street Vice- Company, Inc., the
Milwaukee, WI 53202 President Adviser to the Fund,
since 1985. She is a
Certified Financial
Planner.

All Directors and Executive Officers as a Group (12 persons)
beneficially own less than 1% of the outstanding shares of the
Fund.

*Mr. Nicholas is the only director of the Fund who is an
"interested person" in the Adviser, as that term is defined in
the Investment Company Act of 1940, as amended.

Albert O. Nicholas and David O. Nicholas serve as
Co-Portfolio Managers of the Fund and are primarily responsible
for the day-to-day management of the Fund's portfolio.

The Investment Advisory Agreement between the Fund and
Nicholas Company, Inc. provides for payment by the Fund of fees
for attendance at meetings of the Fund's Board of Directors to
directors who are not interested persons of Nicholas Fund, Inc.
The amount of such fees is subject to increase or decrease at any
time, but is subject to the overall limitation of the Fund's
annual expenses. During the fiscal year ended March 31, 1997, a
total of $15,186 was paid in fees to the Fund's non-interested
directors, including reimbursed out-of-pocket travel expenses.

PURCHASE OF CAPITAL STOCK

Applications for the purchase of shares are made to Nicholas
Fund, Inc., c/o Firstar Trust Company, P.O. Box 2944, Milwaukee,
Wisconsin 53201-2944. Firstar Trust Company acts as transfer
agent and custodian for the Fund. The Fund has available an
Automatic Investment Plan for shareholders. Anyone interested
should contact the Fund for additional information.

The price per share will be the net asset value next
computed after the time the application is received in proper
order and accepted by the Fund. The determination of net asset
value for a particular day is applicable to all applications for
the purchase of shares received at or before the close of regular
trading on the New York Stock Exchange (the "Exchange") on that
day (usually 4:00 p.m. New York time). Accordingly, purchase
orders received on a day the Exchange is open for trading, prior
to the close of trading on that day, will be valued as of the
close of trading on that day. Applications for purchase of
shares received after the close of trading on the Exchange will
be based on the net asset value as determined as of the close of
trading on the next day the Exchange is open.

The Fund does not consider the U.S. Postal Service or other
independent delivery services to be its agents. Therefore,
deposit in the mail or with such services, or receipt at Firstar
Trust Company's Post Office Box of purchase applications does not
constitute receipt by Firstar Trust Company or the Fund. DO NOT
mail letters by overnight courier to the Post Office Box address.
CORRESPONDENCE MAILED BY OVERNIGHT COURIER SHOULD BE SENT TO THE
FIRSTAR TRUST COMPANY, THIRD FLOOR, 615 EAST MICHIGAN STREET,
MILWAUKEE, WISCONSIN 53202.

All purchase applications are subject to acceptance or
rejection by authorized officers of the Fund and are not binding
until accepted. Applications must be accompanied by payment in
U.S. Funds. Payment should be made by check or money order drawn
on a U.S. bank, savings & loan or credit union. The custodian
will charge a $20 fee against a shareholder's account in addition
to any loss sustained by the Fund, for any payment check returned
to the custodian for insufficient funds. It is the policy of the
Fund not to accept applications under circumstances or in amounts
considered disadvantageous to shareholders. For example, if an
individual previously tried to purchase shares with a bad check,
or the proper social security number or tax identification number
is omitted, the Fund reserves the right not to accept future
applications from such individual. Any accounts (including
custodial accounts) opened without a proper social security
number or tax identification number may be liquidated and
distributed to the owner(s) of record on the first business day
following the 60th day of investment, net of the back-up
withholding tax amount.

The Board of Directors has established $500 as the minimum
initial purchase. The minimum for any subsequent purchase is
$100, except in the case of dividend reinvestment. The Automatic
Investment Plan has a minimum monthly investment of $50. Due to
the fixed expenses incurred by the Fund in maintaining individual
accounts, the Fund reserves the right to redeem accounts that
fall below the $500 minimum required investment due to
shareholder redemption (but not solely to a decrease in net asset
value of the Fund). In order to exercise this right, the Fund
will give advance written notice of at least 30 days to the
accounts below such minimums.

Purchase of shares will be made in full and fractional
shares computed to three decimal places. To purchase additional
shares of the Fund by federal wire transfer, please send to:

Firstar Bank Milwaukee, N.A.
ABA #0750-00022
Trust Funds, Account #112-952-137
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
for further credit to Nicholas Fund, Inc.
[your account number and the title of the account]

Please call Firstar Trust Company (414-276-0535 or 800-544-6547)
with the appropriate account information prior to sending the
wire.

Shares of the Fund may be purchased or sold through certain
broker-dealers, financial institutions or other service providers
("Processing Intermediaries"). When shares of the Fund are
purchased this way, the Processing Intermediary, rather than its
customer, may be the shareholder of record of the shares.
Processing Intermediaries may use procedures and impose
restrictions in addition to or different from those applicable to
shareholders who invest in the Fund directly.

An investor intending to invest in the Fund through a
Processing Intermediary should read the program materials
provided by the Processing Intermediary in conjunction with this
Prospectus. Processing Intermediaries may charge fees or other
charges for the services they provide to their customers.
Investors who do not wish to receive the services of a Processing
Intermediary, or pay the fees that may be charged for such
services, may want to consider investing directly with the Fund.
Direct purchase or sale of shares of the Fund may be made without
a sales or redemption charge.

Certificates representing Fund shares purchased will not be
issued unless the shareholder specifically requests certificates
by signed written request to the Fund. If a shareholder requests
certificates at any time other than in connection with a
purchase, the request must be accompanied by a signature
guarantee. Certificates are normally mailed to requesting
shareholders approximately two weeks after receipt of the request
by the Fund. In no instance will certificates be issued for
fractional shares. When certificates are not requested, the
Fund's transfer agent, Firstar Trust Company, Milwaukee,
Wisconsin, will credit the shareholder's account with the number
of shares purchased. Written confirmations are issued for all
purchases and redemptions of Fund shares.

REDEMPTION OF CAPITAL STOCK

A shareholder may require the Fund at any time during normal
business hours to redeem his/her shares in whole or in part. If
in writing, redemption requests must be signed by each
shareholder, in the exact manner as the Fund account is
registered, and must state the amount of the redemption. The
shareholder account number and tax identification number or
social security number should be included with the request. When
shares are represented by certificate(s), redemption is
accomplished by delivering to the Fund, c/o Firstar Trust
Company, P.O. Box 2944, Milwaukee, Wisconsin 53201-2944, the
certificate(s) for the full shares to be redeemed. The
certificate(s) must be properly endorsed or accompanied by
instrument of transfer, in either case, with signatures
guaranteed by a bank, savings and loan association, or by a
member firm of a national securities exchange. A notary public
is not an acceptable guarantor.

If certificates have not been issued, redemption can be
accomplished by delivering an original signed written request for
redemption addressed to Nicholas Fund, Inc., c/o Firstar Trust
Company. Facsimile transmission of redemption requests is not
acceptable. The written request must be signed exactly as the
account is registered, i.e., individual, joint tenants, sole
proprietorship, custodial (Uniform Transfers to Minors Act), or
general partners. Both owners must sign if the account is owned
jointly.

The Fund may require additional supporting documents for
written redemptions made by corporations, executors,
administrators, trustees and guardians. If the account is
registered in the name of a corporation or association, the
written request must be accompanied by a corporate resolution
signed by the authorized person(s). A redemption request for
accounts registered in the name of a legal trust must be
accompanied by the trust agreement and signed by the trustee(s).
If the trustee's(s') name is not registered on the account, a
copy of the trust document certified within the last 60 days is
required.

If there is doubt as to what documents or instructions are
necessary in order to redeem shares, please write or call Firstar
Trust Company (telephone no. 414-276-0535 or 800-544-6547) prior
to submitting a written redemption request. A redemption request
will not become effective until all documents have been received
in proper form by Firstar Trust Company.

Shareholders who have an individual retirement account
("IRA") or other retirement plan must indicate on their written
redemption requests whether or not to withhold federal income
tax. Unless a redemption request specifies not to have federal
income tax withheld, the redemption will be subject to
withholding. Please consult your current Disclosure Statement
for any applicable fees.

The redemption price per share will be the net asset value
next computed after the time of receipt by Firstar Trust Company
of the certificate(s) or written request set forth above, or
pursuant to proper telephone instructions (see below). The
determination of the net asset value for a particular day is
applicable to all requests for the redemption of shares received
at or before the close of regular trading on the Exchange on that
day. Accordingly, shares tendered for redemption on a day the
Exchange is open for trading, prior to the close of trading on
that day, will be valued as of the close of trading on that day.
Requests for redemption of shares received after the close of
trading on the Exchange will be based on the net asset value
determined as of the close of trading on the next day the
Exchange is open.

The Fund does not consider the U. S. Postal Service or other
independent delivery services to be its agents. Therefore,
deposit in the mail or with such services, or receipt at Firstar
Trust Company's Post Office Box of redemption requests does not
constitute receipt by Firstar Trust Company or the Fund. DO NOT
mail letters by overnight courier to the Post Office Box address.
CORRESPONDENCE MAILED BY OVERNIGHT COURIER SHOULD BE SENT TO THE
FIRSTAR TRUST COMPANY, THIRD FLOOR, 615 EAST MICHIGAN STREET,
MILWAUKEE, WISCONSIN 53202.

All redemptions will be processed immediately upon request.
Redemption proceeds will be made payable to the account owner(s)
and mailed to the address of record. The Fund will return
redemption requests that contain restrictions as to the time or
date redemptions are to be effected. Redemption proceeds which
are to be wired will normally be wired on the next business day
after a net asset value is determined. There is a $12.00 charge
to wire the redemption proceeds. The Fund reserves the right to
hold payment up to twelve days or until satisfied that
investments made by check have been collected. Payment for
shares redeemed will be made within seven days after redemption.
Shares cease earning dividends on the date of redemption.

Telephone redemption is automatically extended to all
accounts in the Fund unless this privilege is declined in
writing. This option does not apply to IRA accounts and master
retirement plans for which Firstar Trust Company acts as
custodian. Telephone redemptions can only be made by calling
Firstar Trust Company at (414) 276-0535 or (800) 544-6547. In an
effort to prevent unauthorized or fraudulent redemption requests
by telephone, the Fund and its transfer agent employ reasonable
procedures to confirm that such instructions are genuine. In
addition to account registration information, shareholders will
be required to provide the account number and social security
number. Telephone calls will be recorded. Telephone redemption
requests must be received prior to the closing of the New York
Stock Exchange (usually 4:00 p.m., New York time) to receive that
day's net asset value. There will be no exceptions due to market
activity. The maximum telephone redemption is $25,000 per
account/per business day. The maximum telephone redemption for
related accounts is $100,000 per business day. The minimum
telephone redemption is $1,000 except when redeeming an account
in full.

The Fund reserves the right to refuse a telephone redemption
if it is believed advisable to do so. Procedures for redeeming
Fund shares by telephone may be modified or terminated at any
time by the Fund or Firstar Trust Company. Neither the Fund nor
Firstar Trust Company will be liable for following instructions
communicated by telephone that it reasonably believes to be
genuine.

The shareholder may instruct Firstar Trust Company to mail
the proceeds to the address of record or to directly mail the
proceeds to a pre-authorized bank account. The proceeds may also
be wired to a pre-authorized account at a commercial bank in the
United States. Firstar Trust Company charges a wire redemption
fee of $102.00. Please contact the Fund for the appropriate form
if you are interested in setting your account up with wiring
instructions.

SIGNATURE GUARANTEES

A signature guarantee of each owner is required to redeem
shares in the following situations, for all size transactions:
(i) if a shareholder changes the ownership on his account; (ii)
upon redemption of shares when certificates have been issued for
an account; (iii) when a shareholder wants the redemption
proceeds sent to a different address than is registered on the
account; (iv) for both certificated and uncertificated shares, if
the proceeds are to be made payable to someone other than the
account owner(s); (v) any redemption proceeds transmitted by
federal wire transfer to a shareholder's bank not previously set
up with the Fund; and (vi) if a change of address request has
been received by the Fund or Firstar Trust Company within the
last 15 days. Signature guarantees will be required for all
redemptions of $100,000 or more from any shareholder account in
the Nicholas Family of Funds. A redemption will not be processed
until the signature guarantee is received in proper form. A
notary public is not an acceptable guarantor.

EXCHANGE PRIVILEGE TO OTHER NICHOLAS COMPANY FUNDS

If a shareholder chooses to exercise the exchange privilege,
the shares will be exchanged at their next determined net asset
value. When an exchange into the Nicholas Money Market Fund,
Inc. would involve investment of the exchanged amount on a day
when the New York Stock Exchange is open for trading but the
Federal Reserve Banks are closed, shares of the Fund will be
redeemed on the day upon which the exchange request is received;
however, issuance of Nicholas Money Market Fund, Inc. shares may
be delayed an additional day in order to avoid the dilutive
effect on return (i.e., reduction in net investment income per
share) which would result from issuance of such shares on a day
when the exchanged amount cannot be invested. In such a case,
the exchanged amount would not be invested for this one day
period.

Shareholders interested in exercising the exchange privilege
must obtain the appropriate prospectus from Nicholas Company,
Inc. An exchange constitutes a sale for federal tax purposes and
a capital gain or loss will be realized upon the exchange
depending upon whether the net asset value at the time is more or
less than the shareholder's cost. An exchange between the funds
involving master self-employed (Keogh) plan and IRA accounts
generally will not constitute a taxable transaction for federal
tax purposes.

The exchange privilege may be terminated or modified only
upon 60 days' advance notice to shareholders; however, procedures
for exchanging Fund shares by telephone may be modified or
terminated at any time by the Fund or Firstar Trust Company.
Shareholders are reminded, however, that Nicholas Limited
Edition, Inc. is restricted in size to 10 million shares, and
that the exchange privilege into that fund may be terminated or
modified at a time when the maximum is reached.

Shares of the Fund may be exchanged for shares of other
investment companies for which Nicholas Company, Inc. serves as
the investment adviser. Nicholas Company, Inc. is also the
investment adviser to Nicholas II, Inc., Nicholas Income Fund,
Inc., Nicholas Limited Edition, Inc., Nicholas Money Market Fund,
Inc., and Nicholas Equity Income Fund, Inc. Nicholas II, Inc.
and Nicholas Limited Edition, Inc. both have an objective of long-
term growth in which income is a secondary consideration.
Nicholas Income Fund, Inc.'s investment objective is to seek high
current income consistent with the preservation and conservation
of capital value. Nicholas Money Market Fund, Inc. has an
investment objective of achieving as high a level of current
income as is consistent with preserving capital and providing
liquidity. Nicholas Equity Income Fund, Inc. has an objective of
production of reasonable income, in which moderate long-term
growth is a secondary consideration. Exchange of shares can be
accomplished in the following ways:

EXCHANGE BY MAIL. An exchange of shares of the Fund for
shares of other available Nicholas mutual funds will be made
without cost to the investor through written request.
Shareholders interested in exercising the exchange by mail
privilege may obtain the appropriate prospectus from Nicholas
Company, Inc.

Signatures required are the same as previously explained
under "Redemption of Capital Stock."

EXCHANGE BY TELEPHONE. Shareholders may exchange by
telephone among all funds for which the Nicholas Company, Inc.
serves as investment adviser.

Only exchanges of $1,000 or more will be executed by
telephone. Firstar Trust Company charges a $5.00 fee for each
telephone exchange.

In an effort to avoid the risks often associated with large
market timers, the maximum telephone exchange per account per day
is set at $100,000 with a maximum of $1,000,000 per day per
related accounts. Four telephone exchanges during any twelve
month period will be allowed per account. An exchange consists
of a move from one fund to another fund.

The Fund reserves the right to refuse a telephone exchange
if it is believed advisable to do so. Procedures for exchanging
Fund shares by telephone may be modified or terminated at any
time by the Fund or Firstar Trust Company. Neither the Fund nor
Firstar Trust Company will be responsible for the authenticity of
exchange instructions received by telephone.

Telephone exchanges can only be made by calling Firstar
Trust Company at (414) 276-0535 or (800) 544-6547. You will be
required to provide pertinent information regarding your account
(social security number and account number). Calls will be
recorded.

TRANSFER OF CAPITAL STOCK

Shares of the Fund may be transferred in instances, such as
the death of a shareholder, change of account registration,
change of account ownership and in cases where shares of the Fund
are transferred as a gift. Documents and instructions necessary
to transfer capital stock can be obtained by writing or calling
Firstar Trust Company (414-276-0535 or 800-544-6547) or Nicholas
Company (414-272-6133 or 800-227-5987) prior to submitting any
transfer requests.

DETERMINATION OF NET ASSET VALUE

The net asset value of a share is determined by dividing the
total value of the net assets of the Fund by the total number of
shares outstanding at that time. Net assets of the Fund are
determined by deducting the liabilities of the Fund from total
assets. The net asset value is determined as of the close of
regular trading on the New York Stock Exchange on each day that
the Exchange is open for regular unrestricted trading.

Securities traded on a stock exchange will ordinarily be
valued on the basis of the last sale price on the date of
valuation, or in the absence of any sale on that day, the closing
bid price. Other securities will be valued at the current bid
price. Any securities for which there are no readily available
market quotations will be valued at fair value, as determined in
good faith by the Board of Directors. Odd lot differentials and
brokerage commissions will be excluded in calculating values.
All assets other than securities will be valued at their current
fair value as determined in good faith by the Board of Directors.

DIVIDENDS AND FEDERAL TAX STATUS

The Fund intends to qualify, as it did for the last fiscal
year, annually as a "regulated investment company" under the
Internal Revenue Code and intends to take all other action
required to insure that little or no federal income or excise
taxes will be payable by the Fund. As a result, the Fund
generally will seek to distribute to its shareholders
substantially all of its net investment income and net realized
capital gain (after utilization of any available capital loss
carryovers) in one or more distributions with respect to each
fiscal year.

Distributions by the Fund, whether received in cash or
invested in additional shares of the Fund, will be taxable to the
Fund's shareholders, except those shareholders that are not
subject to tax on their income. Long-term capital gains
distributed by the Fund will retain the character that it had at
the Fund level. Income distributed from the Fund's net
investment income and net realized short-term capital gains are
taxable to shareholders as ordinary income.

Distributions will tentatively be made in May and December
of each year. Shareholders will be advised of the source(s) and
tax treatment of any distribution.

Since at the time of purchase of shares the Fund may have
undistributed income or capital gains included in the computation
of the net asset value per share, a dividend or capital gain
distribution received shortly after such purchase by a
shareholder may be taxable to the shareholder although it is, in
whole or in part, a return of capital and may have the effect of
reducing the net asset value per share.

Under federal law, some shareholders may be subject to a 31%
"backup withholding" on reportable dividends, capital gain
distributions (if any) and redemption payments. Generally,
shareholders subject to backup withholding will be those (i) for
whom a taxpayer identification number is not on file with the
Fund or who, in the Fund's knowledge, have furnished an incorrect
number; or (ii) who have failed to declare or underreported
certain income on their federal returns. When establishing an
account, an investor must certify under penalties of perjury that
the taxpayer identification number supplied to the Fund is
correct and that he is not subject to back-up withholding.

The foregoing tax discussion relates to federal income taxes
only and is not intended to be a complete discussion of all
federal tax consequences. Shareholders should consult with a tax
adviser concerning the application of federal, state and local
taxes to an investment in the Fund.

DIVIDEND REINVESTMENT PLAN

Unless a shareholder elects to accept cash, all dividend and
capital gain distributions are automatically reinvested in shares
through the Dividend Reinvestment Plan. An election to accept
cash may be made on the application to purchase shares, by
telephone, or by separate written notification. All
reinvestments are at the net asset value per share in effect on
the dividend distribution date and are credited to the
shareholder's account. Shareholders will receive a confirmation
showing the number of shares purchased and the price following
each reinvestment.

Shareholders may withdraw from or thereafter elect to
participate in the Dividend Reinvestment Plan at any time by
giving notice in writing or by telephone to the Transfer Agent.
An election must be received by Firstar Trust Company prior to
the dividend record date of any particular distribution for the
election to be effective for that distribution. If an election
to withdraw from or participate in the Dividend Reinvestment Plan
is received between a dividend record date and payment date, it
shall become effective on the day following the payment date.
The Fund may modify or terminate the Dividend Reinvestment Plan
at any time on 30 days' written notice to participants.

SYSTEMATIC WITHDRAWAL PLAN

Shareholders who have purchased or currently own $10,000 or
more of Fund shares at the current market value may open a
Systematic Withdrawal Plan and receive monthly, quarterly,
semiannual or annual checks for any designated amount. Firstar
Trust Company reinvests all income and capital gain dividends in
shares of the Fund. Shareholders may add shares to, withdraw
shares from, or terminate the plan, at any time. Each withdrawal
may be a taxable event to the shareholder. Liquidation of the
shares in excess of distributions may deplete or possibly use up
the initial investment, particularly in the event of a market
decline, and withdrawals cannot be considered a yield or income
on the investment. In addition to termination of the plan by the
Fund or shareholders, the plan may be terminated by Firstar Trust
Company upon written notice mailed to the shareholders. Please
contact Nicholas Company, Inc. for copies of the plan documents.

INDIVIDUAL RETIREMENT ACCOUNT

Individuals who qualify may be able to establish their own
tax sheltered individual retirement account ("IRA"). The Fund
offers a prototype IRA Plan for adoption by individuals who
qualify for spousal, deductible or non-deductible IRA accounts.
As long as the IRA contributions meet the Fund's minimum
investment requirement of $500, the Fund will accept any
allocation of such contribution between spousal, deductible and
non-deductible accounts. The acceptability of this calculation
is the sole responsibility of the shareholder. For this reason,
it is advisable for taxpayers to consult with their personal tax
adviser to determine the deductibility of their IRA
contributions.

A description of applicable service fees as well as
application forms are available upon request from the Fund. The
IRA documents also contain a disclosure statement which the
Internal Revenue Service requires to be furnished to individuals
who are considering adopting an IRA. As changes occur from time
to time in existing IRA regulations, it is important that you
obtain up-to-date information from the Fund before opening an
IRA.

Because a retirement program involves commitments covering
future years, it is important that the investment objectives of
the Fund are consistent with your own retirement objectives.
Premature withdrawals from an IRA may result in adverse tax
consequences. Consultation with a tax adviser regarding the tax
consequences is recommended.

SELF-EMPLOYED MASTER RETIREMENT PLAN

The Fund has available a master retirement plan (formerly
called a Keogh Plan) for self-employed individuals. Any person
seeking additional information or wishing to participate in the
Plan may contact the Fund. Consultation with a tax adviser
regarding the tax consequences of the Plan is recommended.

DESCRIPTION OF CAPITAL STOCK

The Fund has an authorized capital of 200,000,000 shares of
common stock, $0.50 par value. All shares are of the same class
with equal rights and privileges. Each share is entitled to one
vote and to participate equally in dividends and distributions
declared by the Fund, and on liquidation, in its net assets
remaining after satisfaction of outstanding liabilities.
Fractional shares have the same rights, proportionately, as do
full shares. Fund shares are fully paid and nonassessable when
issued and have no preemptive, conversion or exchange rights.

Fund shares do not have cumulative voting rights.
Therefore, the holders of more than half of the shares voting for
the election of directors are able to elect all of the directors
and, in such event, the holders of the remaining shares so voting
will not be able to elect any directors.

ANNUAL MEETING

The State of Maryland business corporation law permits
registered investment companies, such as the Fund, to operate
without an annual meeting of shareholders under specified
circumstances if an annual meeting is not required by the
Investment Company Act of 1940, as amended. The Fund has adopted
the appropriate provisions in its By-Laws and will not hold
annual meetings of shareholders, including for the following
purposes, unless otherwise required to do so: (1) election of
directors; (2) approval of any investment advisory agreement; (3)
ratification of the selection of independent auditors; and (4)
approval of any distribution agreement.

In the event the Fund is not required to hold annual
meetings of shareholders to elect Directors, the Board of
Directors of the Fund will promptly call a meeting of
shareholders of the Fund for the purpose of voting upon the
question of removal of any Director when requested in writing to
do so by the record holders of not less than 10% of the
outstanding shares of Common Stock of the Fund. The affirmative
vote of two-thirds of the outstanding shares, cast in person or
by proxy at a meeting called for such purpose, is required to
remove a Director of the Fund. The Fund will assist shareholders
in communicating with each other for this purpose pursuant to the
requirements of Section 16(c) of the Investment Company Act of
1940, as amended.

SHAREHOLDER REPORTS

Shareholders will be provided at least semiannually with a
report or a current prospectus showing the Fund's portfolio and
other information, including an annual report or current
prospectus containing financial statements audited by the Fund's
independent public accountants, Arthur Andersen LLP, for the
fiscal year ending March 31 of each year. Inquiries concerning
the Fund may be made by calling (414) 272-6133 or (800) 227-5987,
or by writing to Nicholas Fund, Inc., 700 North Water Street,
Suite 1010, Milwaukee, Wisconsin 53202, Attention: Corporate
Secretary.

CUSTODIAN AND TRANSFER AGENT

The Firstar Trust Company, 615 East Michigan Avenue,
Milwaukee, Wisconsin 53202, acts as Custodian and Transfer Agent.

COUNSEL AND AUDITORS

Davis & Kuelthau, S.C., 111 East Kilbourn Avenue, Milwaukee,
Wisconsin 53202-6613, has passed upon the legality of the shares
of Common Stock of the Fund offered by this Prospectus. Arthur
Andersen LLP, 100 East Wisconsin Avenue, Milwaukee, Wisconsin
53202, has been selected as the independent auditors for the Fund
for the fiscal year ending March 31, 1998.

Nicholas Fund, Inc.

Form N-1A

PART B: STATEMENT OF ADDITIONAL INFORMATION

NICHOLAS FUND, INC.

STATEMENT OF ADDITIONAL INFORMATION

700 North Water Street, Suite 1010
Milwaukee, Wisconsin 53202
(414) 272-6133

This Statement of Additional Information, which is not a
Prospectus, supplements and should be read in conjunction with
the current Prospectus of Nicholas Fund, Inc. (the "Fund"), dated
July 31, 1997, as it may be revised from time to time. To
obtain a copy of the Fund's Prospectus, please write or call the
Fund at the address and telephone number set forth above.

NO LOAD FUND - NO SALES OR REDEMPTION CHARGE

Investment Adviser
NICHOLAS COMPANY, INC.

July 30, 1997

TABLE OF CONTENTS

Page

Introduction............................................. 1
Investment Objectives and Policies....................... 1
Investment Restrictions.................................. 2
Investment Adviser....................................... 3
Management-Directors and Executive Officers of the Fund.. 5
Purchase of Capital Stock................................ 7
Redemption of Capital Stock.............................. 9
Signature Guarantees..................................... 10
Exchange Privilege to Other Nicholas Company Funds....... 11
Transfer of Capital Stock................................ 12
Determination of Net Asset Value......................... 12
Income, Dividends and Federal Tax Status................. 12
Dividend Reinvestment Plan............................... 13
Systematic Withdrawal Plan............................... 14
Individual Retirement Account............................ 14
Self-Employed Master Retirement Plan..................... 15
Brokerage................................................ 15
Principal Shareholders................................... 16
Performance Data......................................... 16
Description of Capital Stock............................. 17
Stock Certificates....................................... 17
Annual Meeting........................................... 18
Communications Between Shareholders...................... 18
Shareholder Reports...................................... 18
Custodian and Transfer Agent............................. 18
Counsel and Auditor...................................... 19
Financial Information.................................... 19

NICHOLAS FUND, INC.

INTRODUCTION

Nicholas Fund, Inc. (the "Fund") was incorporated under the
laws of Maryland on July 10, 1968. The Fund is an open-end,
diversified management investment company registered under the
Investment Company Act of 1940, as amended. This type of
investment company is commonly called a mutual fund. As an
open-end investment company, it obtains its assets by
continuously selling shares of its common stock, $.50 par value,
to the public. Proceeds from such sales are invested by the Fund
in securities of other companies. In this manner, the resources
of many investors are combined and each individual investor has
an interest in every one of the securities owned by the Fund.
The Fund provides each individual investor with diversification
by investing in the securities of many different companies in a
variety of industries and furnishes experienced management to
select and watch over its investments. As an open-end investment
company, the Fund will redeem any of its outstanding shares on
demand of the owner at their net asset value next determined
following receipt of the redemption request. The investment
adviser to the Fund is Nicholas Company, Inc. (the "Adviser").

INVESTMENT OBJECTIVES AND POLICIES

The primary investment objective of the Fund is capital
appreciation, and securities are selected for its portfolio on
that basis. Current income will be only a secondary factor in
considering the selection of investments. There are market risks
inherent in any investment and there can be no assurance that the
objective of the Fund will be realized, nor can there be any
assurance against possible loss in the value of the Fund's
portfolio.

It is the policy of the Fund to invest in securities which
the Adviser believes offer possibilities for increase in value.
These will generally be common stocks of companies which the
Adviser considers to have favorable long-term prospects. Since
the major portion of the Fund's portfolio consists of common
stocks, its net asset value may be subject to greater fluctuation
than a portfolio containing a substantial amount of fixed-income
securities.

Securities of small and medium sized companies, which may be
unseasoned, where the risks are considerably greater than with
securities of more established companies, may also be acquired
from time to time by the Fund when the Adviser believes such
investments offer possibilities of capital appreciation.
However, the Fund is limited in the percentage of total net
assets which may be invested in the securities of unseasoned
companies; that is, companies which have a record of less than
three years' continuous operation.

Debt securities and preferred stock that are convertible
into or carry rights to acquire common stock and other debt
securities, such as those selling at substantial discounts, may
be acquired from time to time when the Adviser thinks such
investments offer the possibility of appreciation in value.

It is anticipated that the major portion of the portfolio
will at all times be invested in common stocks. However, there
is no minimum or maximum percentage of the Fund's assets which is
required to be invested in any type of security. Cash and United
States Government securities will be retained by the Fund in an
amount sufficient to provide moderate liquid reserves. The Fund
reserves the freedom to temporarily invest its assets in
investment grade fixed income securities as a defensive measure
when conditions are deemed to warrant such action. "Investment
grade fixed-income securities" refers to fixed-income securities
ranked in the top four categories of Standard & Poor's
Corporation or Moody's Investors Services, Inc. rating services.

Securities are not purchased with a view to rapid turnover
or to obtain short-term trading profits, which the Fund refers to
as profits on assets held less than twelve months. The term
"portfolio turnover rate" refers to the percentage determined by
dividing the lesser of purchases or sales of portfolio securities
during the year by the average of the value of the portfolio
securities owned by the Fund during the year. "Portfolio
turnover rate" excludes investments in all securities with less
than one year to maturity at the time of purchase.

INVESTMENT RESTRICTIONS

(a) the purchase of a portion of an issue of publicly
distributed debt securities;

(b) the purchase of debt securities issued by the U.
S. Treasury or by other federal agencies, instrumentalities
or corporations with a simultaneous resale of such
securities to the seller for later delivery (on an agreed
upon later date or indefinitely), in an amount not to exceed
20% of the total net assets, taken at market, of the Fund;
provided, however, that repurchase agreements maturing in
more than seven (7) days will not constitute more than 10%
of the total net assets, taken at market; and

(c) the purchase of a portion of bonds, debentures or
other debt securities of types commonly distributed
privately to financial institutions in an amount not to
exceed 10% of the Fund's total net assets, taken at market.

3. The Fund may make temporary bank borrowings (not in
excess of 5% of the lower of cost or market value of the Fund's
total assets) for emergency or extraordinary purposes.

4. The Fund will not pledge any of its assets.

7. Not more than 5% of the Fund's total net assets, taken
at market value, will be invested in the securities of any one
issuer (excluding United States Government securities).

8. Not more than 25% of the Fund's total assets will be
concentrated in companies of any one industry or group of related
industries.

9. The Fund will not acquire or retain any security issued
by a company, if an officer or director of such company is an
officer or director of the Fund, or an officer or director or
shareholder or other interested person of the Adviser.

In addition to the foregoing restrictions, the Fund has
adopted the following restrictions which may be changed by the
Board of Directors of the Fund without shareholder approval.
However, so long as the securities of the Fund are registered for
sale in those states which require these restrictions, the
restrictions will not be changed. Any such change would be made
only upon advance notice to shareholders.

1. The Fund will not acquire or retain any security issued
by a company if one or more directors or shareholders or other
affiliated persons of its investment adviser beneficially own
more than one-half of one percent (0.5%) of such company's stock
or other securities, and all of the foregoing persons owning more
than one-half of one percent (0.5%) together own more than 5% of
such stock or security.

2. The Fund will not invest more than 5% of its total net
assets in equity securities which are not readily marketable and
in securities of unseasoned companies (companies which have a
record of less than three years' continuous operation, including
the operation of any predecessor business of a company which came
into existence as a result of a merger, consolidation,
reorganization or purchase of substantially all of the assets of
such predecessor business).

3. The Fund will not invest in interests in oil, gas
or other mineral exploration programs.

4. The Fund will not invest in puts, calls, straddles,
spreads or any combination thereof.

5. The Fund will not invest more than 1% of its total
net assets in restricted securities.

6. The Fund will not purchase securities of any issuer if,
as a result of such purchase, the Fund would hold more than 10%
of all classes of the securities of such issuer.

7. The Fund will not invest in warrants, valued at the
lower of cost or market, which exceed 5.0% of the value of the
Fund's net assets. Included within that amount, but not to
exceed 2.0% of the value of the Fund's net assets, may be
warrants which are not listed on the New York or American Stock
Exchange. Warrants acquired by the Fund in units or attached to
securities may be deemed to be without value.

All percentage limitations apply on the date of investment
by the Fund.

INVESTMENT ADVISER

Nicholas Company, Inc. is the investment adviser to five
other mutual funds and to approximately twenty-five institutions
and individuals with substantial investment portfolios. It was
organized in 1967, formed the Fund in 1968, and has been the
Fund's only investment adviser since the first public offering
date of the Fund's shares on July 14, 1969. The other Funds to
which Nicholas Company, Inc. acts as investment adviser are
Nicholas Income Fund, Inc., Nicholas II, Inc., Nicholas Limited
Edition, Inc., Nicholas Money Market Fund, Inc., and Nicholas
Equity Income Fund, Inc. All of the Funds are also sold without
sales charge. The investment objective of Nicholas Income Fund,
Inc. is high current income consistent with the preservation and
conservation of capital values. Nicholas II, Inc. and Nicholas
Limited Edition, Inc. have as an investment objective long-term
growth in which income is a secondary consideration. Nicholas
Money Market Fund, Inc. has an investment objective of achieving
as high a level of current income as is consistent with
preserving capital and providing liquidity. Nicholas Equity
Income Fund, Inc. has as its investment objective reasonable
income in which moderate long-term growth is a secondary
consideration.

The annual fee paid to the Adviser is paid monthly and is
based on the average net asset value of the Fund, as determined
by valuations made at the close of each business day of the
month. The annual fee is seventy-five one hundredths of one
percent (0.75 of 1%) of the average net asset value of the Fund
up to and including $50,000,000 and sixty-five one hundredths of
one percent (0.65 of 1%) of the average net asset value in excess
of $50,000,000. As of March 31, 1997, the net asset value of the
Fund was $3,989,488,700.

Under the Investment Advisory Agreement, the Adviser
provides the Fund with the non-exclusive right to use the name
"Nicholas." At its own expense and without reimbursement from
the Fund, the Adviser furnishes office space, office facilities
and executive officers. The Adviser bears all executive expenses
and bears all sales and promotional expenses of the Fund, other
than expenses incurred in complying with laws regulating the
issue or sale of securities and fees paid for attendance at Board
meetings to directors who are not interested persons of the
Adviser or officers or employees of the Fund. The Fund will pay
all of its operating expenses including, but not limited to, the
costs of preparing and printing its registration statements
required under the Securities Act of 1933 and the Investment
Company Act of 1940 and any amendments thereto, the expense of
registering its shares with the Securities and Exchange
Commission and in the various states, the printing and
distribution costs of prospectuses mailed to existing
shareholders and to persons making unsolicited requests for
information, the cost of stock certificates, reports to
shareholders, interest charges, taxes and legal fees and
expenses. Also included are salaries of administrative and
clerical personnel, association membership dues, auditing and
accounting services, fees and expenses of any custodian or
trustees having custody of Fund assets, printing and mailing
expenses, postage and charges and expenses of dividend disbursing
agents, registrars and stock transfer agents, including the cost
of keeping all necessary shareholder records and accounts and
handling any problems related thereto.

The Adviser has undertaken to reimburse the Fund to the
extent that the aggregate annual operating expenses, including
the investment advisory fee, but excluding interest, taxes, and
brokerage commissions, and extraordinary expenses exceed the
lowest, i.e., most restrictive, percentage of the Fund's average
net assets established by the laws of the states in which the
Fund's shares are registered for sale, as determined by
valuations made as of the close of each business day of the year.
Currently the lowest percentage-of-asset limitation of any state
in which the Fund is registered is 1.5% of the first $30 million
of average net assets and 1.0% over that amount. The Adviser
shall, on a monthly basis, reimburse the Fund by offsetting
against its monthly fee all expenses in excess of these amounts
as pro rated on an annual basis. During the fiscal years ended
March 31, 1997, March 31, 1996, and March 31, 1995 the Fund paid
the Adviser an aggregate of $25,060,663, $21,433,970 and
$19,010.314, respectively, in fees. During none of the foregoing
fiscal years did the expenses borne by the Fund exceed the
expense limitation then in effect and the Adviser was not
required to reimburse the Fund for any additional expenses.

The agreement with the Adviser is not assignable and may be
terminated by either party, without penalty, on sixty days'
notice. Otherwise, the agreement continues in effect so long as
it is approved annually by (i) the Board of Directors or by a
vote of a majority of the outstanding shares of the Fund and (ii)
in either case, by the affirmative vote of a majority of
directors who are not parties to the agreement or "interested
persons" of the Adviser or of the Fund, as defined in the
Investment Company Act of 1940, as amended, cast in person at a
meeting called for the purpose of voting for such approval.

Ninety-one percent (91%) of the outstanding voting
securities of the Adviser are owned by Albert O. Nicholas.

MANAGEMENT - DIRECTORS AND EXECUTIVE OFFICERS OF THE FUND

Name, Age Positions Held Principal Occupations
and Address With Fund During Past 5 Years
----------- -------------- ---------------------

Richard Seaman, 71 Director Management Consultant on
5270 North Maple Lane an independent basis
Nashotah, WI 53058 primarily in the areas of
mergers, acquisitions and
strategic planning.

Candace L. Lesak, 39 Vice-President Employee of Nicholas
700 North Water Street Company, Inc., the
Milwaukee, WI 53202 Adviser to the Fund,
since 1983. She is a
Certified Financial
Planner.

Christina M. Mouradian, 35 Assistant Employee of Nicholas
700 North Water Street Treasurer Company, Inc., the
Milwaukee, WI 53202 Adviser to the Fund,
since 1985.

*Mr. Nicholas is the only director of the Fund who is an
"interested person" in the Adviser, as that term is defined in
the Investment Company Act of 1940, as amended.

Reference is made to the Section "Investment Adviser" for a
description of the relationships of the officers of the Fund to
the Adviser and the family relationships between directors of the
Adviser and officers and directors of the Fund.

Albert O. Nicholas is President, Treasurer and Director of
Nicholas Income Fund, Inc., and Nicholas Money Market Fund, Inc.
and is President and Director of Nicholas II, Inc., Nicholas
Limited Edition, Inc. and Nicholas Equity Income Fund, Inc.
David L. Johnson and Thomas J. Saeger are, respectively,
Executive Vice-President and Executive Vice-President and
Secretary of Nicholas II, Inc., Nicholas Limited Edition, Inc.,
Nicholas Income Fund, Inc., Nicholas Money Market Fund, Inc., and
Nicholas Equity Income Fund, Inc. Mr. Saeger is also a director
of Nicholas Limited Edition, Inc. Lynn S. Nicholas and David O.
Nicholas are Senior Vice-Presidents of Nicholas II, Inc.,
Nicholas Limited Edition, Inc., and Nicholas Equity Income Fund,
Inc., and Vice-Presidents of Nicholas Money Market Fund, Inc. In
addition, David O. Nicholas is Vice-President of Nicholas Income
Fund, Inc. and portfolio manager of Nicholas II, Inc. and
Nicholas Limited Edition, Inc. Jeffrey T. May is Senior
Vice-President and Treasurer of Nicholas II, Inc., Nicholas
Equity Income Fund, Inc., Nicholas Income Fund, Inc., Nicholas
Money Market Fund, Inc., and Senior Vice-President of Nicholas
Limited Edition, Inc. Candace L. Lesak is Vice-President of
Nicholas II, Inc., Nicholas Equity Income Fund, Inc., Nicholas
Income Fund, Inc., Nicholas Money Market Fund, Inc, and Nicholas
Limited Edition, Inc. Messrs. Bock, Schultz and Seaman serve as
Directors of Nicholas II, Inc. and Nicholas Equity Income Fund,
Inc. Mr. Schultz also serves as a Director of Nicholas Limited
Edition, Inc., Nicholas Money Market Fund, Inc. and Nicholas
Income Fund, Inc.

The table below sets forth the aggregate compensation
received from the Fund by all directors of the Fund during the
fiscal year ended March 31, 1997. No officers of the Fund
receive any compensation from the Fund, but rather, are
compensated by the Adviser in accordance with its Investment
Advisory Agreement with the Fund.

</TABLE>
<TABLE>
<CAPTION>
Aggregate Pension or Retirement Estimated Total Compensation
Compensation Benefits Accrued As Annual Benefits From Fund and Fund
Name and Position From the Fund Part of Fund Expenses Upon Retirement Complex Paid to Directors
- ------------------ ------------- --------------------- --------------- -------------------------
<S> <C> <C> <C> <C>
Albert O. Nicholas(2) $0 $0 $0 $0
Melvin L. Schultz(2) $5,000 $0 $0 $17,400
Richard Seaman(2) $5,000 $0 $0 $10,200
Robert H. Bock(2) $5,186 $0 $0 $10,386

</TABLE>

(1) During the fiscal year ended March 31, 1997, the Fund and
other funds in its Fund Complex (i.e., those funds which
also have Nicholas Company, Inc. as its investment adviser,
namely Nicholas Equity Income Fund, Inc., Nicholas II, Inc.,
Nicholas Limited Edition, Inc., Nicholas Income Fund, Inc.
and Nicholas Money Market Fund, Inc.) compensated those
directors who are not "interested persons" of the Adviser in
the form of an annual retainer per director per fund and
meeting attendance fees. During the fiscal year ended March
31, 1997, the Fund compensated the disinterested directors
at a rate of $500 per director per meeting attended and an
annual retainer of $3,000 per director. The disinterested
directors did not receive any other form or amount of
compensation from the Fund Complex during the fiscal year
ended March 31, 1997. All other directors and officers of
the Fund were compensated by the Adviser in accordance with
its Investment Advisory Agreement.

(2) Mr. Nicholas is also a member of the Board of Directors of
Nicholas Equity Income Fund, Inc., Nicholas II, Inc.,
Nicholas Limited Edition, Inc., Nicholas Income Fund, Inc.
and Nicholas Money Market Fund, Inc. Mr. Schultz is also a
member of the Board of Directors of Nicholas Equity Income
Fund, Inc., Nicholas II, Inc., Nicholas Limited Edition,
Inc., Nicholas Income Fund, Inc. and Nicholas Money Market
Fund, Inc. Mr. Seaman is also a member of the Board of
Directors of Nicholas Equity Income Fund, Inc. and Nicholas
II, Inc. Mr. Bock is also a member of the Board of
Directors of Nicholas Equity Income Fund, Inc. and Nicholas
II, Inc.

PURCHASE OF CAPITAL STOCK

Applications for the purchase of shares are made to Nicholas
Fund, Inc. c/o Firstar Trust Company, P.0. Box 2944, Milwaukee,
Wisconsin 53201-2944. The Firstar Trust Company acts as transfer
agent and custodian for the Fund. The Fund has available an
Automatic Investment Plan for shareholders. Anyone interested
should contact the Fund for additional information.

The price per share will be the net asset value next
computed after the time the application is received in proper
order and accepted by the Fund. The determination of net asset
value for a particular day is applicable to all applications for
the purchase of shares received at or before the close of trading
on the New York Stock Exchange (the "Exchange") on that day
(usually 4:00 p.m. New York time). Accordingly, purchase orders
received on a day the Exchange is open for trading, prior to the
close of trading on that day, will be valued as of the close of
trading on that day. Applications for purchase of shares
received after the close of trading on the Exchange will be based
on the net asset value as determined as of the close of trading
on the next day the Exchange is open.

The Fund does not consider the U.S. Postal Service or other
independent delivery services to be its agents. Therefore,
deposit in the mail or with such services, or receipt at Firstar
Trust Company's Post Office Box, of purchase applications does
not constitute receipt by Firstar Trust Company or the Fund.
Correspondence intended for overnight courier delivery should be
sent to Firstar Trust Company, Third Floor, 615 East Michigan
Street, Milwaukee, Wisconsin 53202.

All purchase applications are subject to acceptance or
rejection by authorized officers of the Fund and are not binding
until accepted. Applications must be accompanied by payment in
U.S. funds. Payment should be made by check or money order drawn
on a U.S. bank, savings and loan or credit union. The custodian
will charge a $20 fee against a shareholder's account, in
addition to any loss sustained by the Fund, for any payment check
returned to the custodian for insufficient funds. It is the
policy of the Fund not to accept applications under circumstances
or in amounts considered disadvantageous to shareholders. For
example, if an individual previously tried to purchase shares
with a bad check, or the proper social security number or tax
identification number was omitted, the Fund reserves the right
not to accept future applications from such individual. Any
accounts (including custodial accounts) opened without a proper
social security number or tax identification number may be
liquidated and distributed on the first business day following
the sixtieth (60th) day of investment, net of the back-up
withholding tax amount.

The Board of Directors has established $500 as the minimum
initial purchase and $100 as the minimum subsequent purchase,
except through dividend reinvestment. The Automatic Investment
Plan has a minimum monthly investment of $50. Due to the fixed
expenses incurred by the Fund in maintaining individual accounts,
the Fund reserves the right to redeem accounts that fall below
the $500 minimum required investment due to shareholder
redemption (but not due solely to a decrease in net asset value
of the Fund). In order to exercise this right, the Fund will
give advance written notice of at least 30 days to the accounts
below such minimums.

Purchase of shares will be made in full and fractional
shares computed to three decimal places. To purchase additional
shares of the Fund by federal wire transfer, please send to:

Please call Firstar Trust Company (414-276-0535 or 800-544-6547)
with the appropriate account information prior to sending the
wire.

An investor intending to invest in the Fund through a
Processing Intermediary should read the program materials
provided by the Processing Intermediary in conjunction with this
Statement of Additional Information. Processing Intermediaries
may charge fees or other charges for the services they provide to
their customers. Investors who do not wish to receive the
services of a Processing Intermediary, or pay the fees that may
be charged for such services, may want to consider investing
directly with the Fund. Direct purchase or sale of shares of the
Fund may be made without a sales or redemption charge.

Certificates representing Fund shares purchased will not be
issued unless the shareholder specifically requests certificates
by signed written request to the Fund. If a shareholder requests
certificates at any time other than in connection with a
purchase, the request must be accompanied by a signature
guarantee. Certificates are mailed to requesting shareholders
approximately two weeks after receipt of the request by the Fund.
In no instance will certificates be issued for fractional shares.
When certificates are not requested, the Fund's transfer agent,
Firstar Trust Company, Milwaukee, Wisconsin will credit the
shareholder's account with the number of shares purchased.
Written confirmations are issued for all purchases and
redemptions of Fund shares.

REDEMPTION OF CAPITAL STOCK

A shareholder may require the Fund at any time during normal
business hours to redeem his/her shares in whole or in part. If
in writing, redemption requests must be signed by each
shareholder, in the exact manner as the Fund account is
registered, and must state the amount of the redemption. The
shareholder account number and tax identification number or
social security number should be included with the request. The
Fund and the Custodian have business hours from 8:00 a.m. to 4:30
p.m. and 8:00 a.m. to 7:00 p.m. respectively, Milwaukee time,
Monday through Friday. When shares are represented by
certificates, redemption is accomplished by delivering to the
Fund, c/o Firstar Trust Company, P.O. Box 2944, Milwaukee,
Wisconsin 53201-2944, the certificate(s) for the full shares to
be redeemed. The certificate(s) must be properly endorsed or
accompanied by instrument of transfer, in either case, with
signatures guaranteed by a bank, savings and loan association, or
by a member firm of a national securities exchange. A notary
public is not an acceptable guarantor.

If there is doubt as to what documents or instructions are
necessary in order to redeem shares, please write or call Firstar
Trust Company (telephone no. 414-276-0535 or 800-544-6547), prior
to submitting a written redemption request. A redemption request
will not become effective until all documents have been received
in proper form by Firstar Trust Company.

The redemption price per share will be the net asset value
next computed after the time of receipt by Firstar Trust Company
of the certificate(s) or written request in the proper form set
forth above, or pursuant to proper telephone instructions (see
below). The determination of the net asset value for a
particular day is applicable to all requests for the redemption
of shares received at or before the close of regular trading on
the Exchange on that day. Accordingly, shares tendered for
redemption on a day the Exchange is open for trading, prior to
the close of trading on that day, will be valued as of the close
of trading on that day. Requests for redemption of shares
received after the close of trading on the Exchange will be based
on the net asset value determined as of the close of trading on
the next day of Exchange is open.

All redemptions will be processed immediately upon request.
Redemption proceeds will be made payable to the account owner(s)
and mailed to the address of record. The Fund will return
redemption requests that contain restrictions as to the time or
date redemptions are to be effected. Redemption proceeds to be
wired will normally be wired on the next business day after a net
asset value is determined. There is a $12.00 charge to wire the
redemption proceeds. The Fund reserves the right to hold payment
up to twelve days or until satisfied that investments made by
check have been collected. Payment for shares redeemed will be
made within seven days after redemption. Shares cease earning
dividends on the date of redemption.

The right of redemption may be suspended and the date of
payment postponed for more than seven days for any period during
which the New York Stock Exchange is closed other than the
customary weekend and holiday closings, and may be suspended for
any period during which trading on the Exchange is restricted as
determined by the Securities and Exchange Commission, or the
Commission has by order permitted such suspension, or the
Commission has determined that an emergency exists as a result of
which it is not reasonably practicable for the Fund to dispose of
its securities or to determine fairly the value of its net
assets.

Although not anticipated, it is possible that conditions may
arise in the future which would, in the opinion of the Fund's
Adviser or Board of Directors, make it undesirable for the Fund
to pay for all redemptions in cash. In such cases, the Board may
authorize payment to be made in portfolio securities or other
property of the Fund. However, the Fund has obligated itself
under the Investment Company Act of 1940 to redeem for cash all
shares presented for redemption by any one shareholder up to
$250,000 (or 1% of the Fund's net assets if that is less) in any
90-day period. Securities delivered in payment of redemptions
would be valued at the same value assigned to them in computing
the net asset value per share. Shareholders receiving such
securities would incur brokerage costs when these securities are
sold.

The shareholder may instruct Firstar Trust Company to mail
the proceeds to the address of record or to directly mail the
proceeds to a pre-authorized bank account. The proceeds may also
be wired to a pre-authorized account at a commercial bank in the
United States. Firstar Trust Company charges a wire redemption
fee of $12.00. Please contact the Fund for the appropriate form
if you are interested in setting your account up with wiring
instructions.

The Fund does not consider the U.S. Postal Service or other
independent delivery services to be its agents. Therefore,
deposit in the mail or with such services, or receipt at Firstar
Trust Company's Post Office Box of redemption requests does not
constitute receipt by Firstar Trust Company or the Fund. DO NOT
mail letters by overnight courier to the Post Office Box address.
Correspondence mailed by overnight courier should be sent to the
Firstar Trust Company, Third Floor, 615 East Michigan Street,
Milwaukee, Wisconsin 53202.

SIGNATURE GUARANTEES

A signature guarantee of each owner is required to redeem
shares in the following situations, for all size transactions:
(i) if you change the ownership on your account; (ii) upon
redemption of shares when certificates have been issued for your
account; (iii) when you want the redemption proceeds sent to a
different address than is registered on the account; (iv) for
both certificated and uncertificated shares, if the proceeds are
to be made payable to someone other than the account owner(s);
(v) any redemption proceeds transmitted by federal wire transfer
to your bank not previously set up with the Fund; and (vi) if a
change of address request has been received by the Fund or
Firstar Trust Company within the last 15 days. Signature
guarantees will be required for all redemptions of $100,000 or
more from any shareholder account in the Nicholas Family of
Funds. A redemption will not be processed until the signature
guarantee is received in proper form. A notary public is not an
acceptable guarantor.

EXCHANGE PRIVILEGE TO OTHER NICHOLAS COMPANY FUNDS

If a shareholder chooses to exercise the exchange privilege,
the shares will be exchanged at their next determined net asset
value. When an exchange into the Nicholas Money Market Fund,
Inc. would involve investment of the exchanged amount on a day
when the New York Stock Exchange is open for trading but the
Federal Reserve Banks are closed, shares of the Fund will be
redeemed on the day upon which the exchange request is received;
however, issuance of Nicholas Money Market Fund, Inc. shares may
be delayed an additional day in order to avoid the dilutive
effect on return (i.e. reduction in net investment income per
share) which would result from issuance of such shares on a day
when the exchanged amount cannot be invested. In such a case,
the exchanged amount would not be invested for this one day
period.

Shareholders interested in exercising the exchange privilege
must obtain the appropriate prospectus from Nicholas Company,
Inc. An exchange constitutes a sale for federal tax purposes and
a capital gain or loss will be realized upon the exchange
depending upon whether the net asset value at the time is more or
less than the shareholder's cost. An exchange between the funds
involving master retirement (Keogh) plan and IRA accounts
generally will not constitute a taxable transaction for federal
tax purposes.

Shares of the Fund may be exchanged for shares of other
investment companies for which Nicholas Company, Inc. serves as
the investment adviser. Nicholas Company, Inc. is also the
investment adviser to Nicholas II, Inc., Nicholas Income Fund,
Inc., Nicholas Limited Edition, Inc., Nicholas Money Market Fund,
Inc., and Nicholas Equity Income Fund, Inc. Nicholas II, Inc.
and Nicholas Limited Edition, Inc. both have an objective of
long-term growth in which income is a secondary consideration.
Nicholas Income Fund, Inc.'s investment objective is to seek high
current income consistent with the preservation and conservation
of capital value. Nicholas Money Market Fund, Inc. has an
investment objective of achieving as high a level of current
income as is consistent with preserving capital and providing
liquidity. Nicholas Equity Income Fund, Inc. has as its
investment objective to produce reasonable income and moderate
long-term growth. Exchange of shares can be accomplished in the
following ways:

Signatures required are the same as previously explained
under "Redemption of Capital Stock."

EXCHANGE BY TELEPHONE. Shareholders may exchange by
telephone among all funds for which the Nicholas Company, Inc.
serves as investment adviser.

Only exchanges of $1,000 or more will be executed by
telephone. Firstar Trust Company charges a $5.00 fee for each
telephone exchange.

In an effort to avoid the risks often associated with large
market timers, the maximum telephone exchange per account per day
is set at $100,000 with a maximum of $1,000,000 per day per
related accounts. Four telephone exchanges during any twelve
month period, per account will be allowed. An exchange consists
of a move from one fund to another fund.

TRANSFER OF CAPITAL STOCK

Shares of the Fund may be transferred in instances such as
the death of a shareholder, change of account registration,
change of account ownership and in cases where shares of the Fund
are transferred as a gift. If shares are represented by
certificates, the certificates representing the shares to be
transferred must be delivered to the Fund, c/o Firstar Trust
Company, P.O. Box 2944, Milwaukee, Wisconsin 53201-2944,
accompanied by appropriate written instructions and endorsed or
accompanied by an instrument of transfer and guaranteed in the
same manner as described under "Redemption of Capital Stock." If
no certificates have been issued, then signed, written
instructions must be delivered to the Fund, c/o Firstar Trust
Company. The instructions must be signed exactly as provided in
"Redemption of Capital Stock" for redemption of shares not
represented by certificates. Documents and instructions
necessary to transfer capital stock can be obtained by writing or
calling Firstar Trust Company (414-276-0535 or 800-544-6547) or
Nicholas Company, Inc. (414-272-6133 or 800-227-5987) prior to
submitting any transfer requests.

DETERMINATION OF NET ASSET VALUE

INCOME, DIVIDENDS AND FEDERAL TAX STATUS

Federal Tax Status of the Fund
- ------------------------------
The Fund intends to qualify annually as a "regulated
investment company" under the Internal Revenue Code of 1986 (the
"Code") and intends to take all other action required to insure
that little or no federal income or excise taxes will be payable
by the Fund. As a result, the Fund generally will seek to
distribute to its shareholders substantially all of its net
investment income and net realized capital gain (after
utilization of any available capital loss carryovers) in one or
more distributions with respect to each fiscal year. However,
the Code contains a number of complex tests relating to
qualification as a regulated investment company which the Fund
possibly might not meet in any particular year. If the Fund does
not qualify as a "regulated investment company" under the Code,
it would be treated for tax purposes as an ordinary corporation,
and all its taxable income will be taxed to the Fund at corporate
rates.

The Code generally imposes a 4% nondeductible excise tax on
a regulated investment company, such as the Fund, if it does not
distribute to its shareholders during the calendar year an amount
equal to 978% of the Fund's investment company income, with
certain adjustments, for such calendar year, plus 98% of the
Fund's capital gain net income for the one-year period ending on
October 31 of such calendar year. In addition, an amount equal
to any undistributed investment company taxable income or capital
gain net income from the previous calendar year must also be
distributed to avoid the excise tax. The excise tax is imposed
on the amount by which the Fund does not meet the foregoing
distribution requirements. The Fund intends to make
distributions necessary to avoid imposition of the excise tax.

Dividends and Distributions
- ---------------------------
For federal income tax purposes, distributions by the Fund,
whether received in cash or invested in additional shares of the
Fund, will be taxable to the Fund's shareholders, except those
shareholders that are not subject to tax on their income. Long-
term capital gains distributed by the Fund will retain the
character that it had at the Fund level. Income distributed from
the Fund's net investment income and net realized short-term
capital gains are taxable to shareholders as ordinary income.
Distributions tentatively will be made in May and December of
each year. Shareholders will be advised of the source or sources
and tax treatment of any distribution.

Since at the time of purchase of shares the Fund may have
undistributed income or capital gains included in the computation
of the net asset value per share, a dividend or capital gain
distribution received shortly after such purchase by a
shareholder may be taxable to the shareholder, although it is, in
whole or in part, a return of capital and may have the effect of
reducing the net asset value per share.

Under the Code, dividends declared by the Fund to
shareholders of record in December of any year will be deemed to
have been received by (and will be taxable to) shareholders as of
the record date, provided the dividend is actually paid by the
Fund before February 1 of the following year.

Backup Withholding of Dividends and Redemption Payments
- -------------------------------------------------------
Under Federal law, some shareholders may be subject to a 31%
"backup withholding" on reportable dividends, capital gain
distributions (if any) and redemption payments. Generally,
shareholders subject to backup withholding will be those (i) for
whom a taxpayer identification number is not on file with the
Fund or who, to the Fund's knowledge, have furnished an incorrect
number; or (ii) who have failed to declare or underreported
certain income on their federal returns. When establishing an
account, an investor must certify under penalties of perjury that
the taxpayer identification number supplied to the Fund is
correct and that he is not subject to backup withholding.

THE FOREGOING TAX DISCUSSION RELATES SOLELY TO U.S. FEDERAL
TAXES AND IS NOT INTENDED TO BE A COMPLETE DISCUSSION OF ALL
FEDERAL TAX CONSEQUENCES. SHAREHOLDERS SHOULD CONSULT WITH A TAX
ADVISER CONCERNING THE APPLICATION OF FEDERAL, STATE AND LOCAL
TAXES TO AN INVESTMENT IN THE FUND.

DIVIDEND REINVESTMENT PLAN

Unless a shareholder elects to accept cash, all dividends
and capital gains distributions are automatically reinvested in
shares of the capital stock of the Fund through the Dividend
Reinvestment Plan. An election to accept cash may be made on the
application to purchase capital stock of the Fund, by telephone,
or by separate written notification. All reinvestments are at
the net asset value per share in effect on the dividend
distribution date and are credited to the shareholder's account
in full shares and fractional shares, if necessary, (computed to
three decimal places). Shareholders will receive a confirmation
showing the number of shares purchased and the price following
each reinvestment. As in the case of normal purchases, stock
certificates are not issued unless requested. In no instance
will a certificate be issued for a fraction of a share.

Shareholders may withdraw from or thereafter elect to
participate in the Dividend Reinvestment Plan at any time by
giving in writing or by telephone notice to Firstar Trust
Company. An election must be received by Firstar Trust Company
prior to the dividend record date of any particular distribution
for the election to be effective for that distribution. If an
election to withdraw from or participate in the Dividend
Reinvestment Plan is received between a dividend record date and
payment date, it shall become effective on the day following the
payment date. The Fund may modify or terminate the Dividend
Reinvestment Plan at any time 30 days' written notice to
participants.

SYSTEMATIC WITHDRAWAL PLAN

INDIVIDUAL RETIREMENT ACCOUNT

Individuals who qualify may be able to establish their own
tax-sheltered IRA plans. The Fund offers a prototype IRA plan
for adoption by individuals who qualify for spousal, deductible
or nondeductible IRA accounts. As long as the aggregate IRA
contributions meet the Fund's minimum investment requirement of
$500, the Fund will accept any allocation of such contribution
between spousal, deductible and nondeductible accounts. The
acceptability of this calculation is the sole responsibility of
the shareholder. For this reason, it is advisable for taxpayers
to consult with their personal tax adviser to determine the
deductibility of their IRA contributions. Excess contributions,
certain distributions prior to age 59-1/2, and failure to begin
distributions after age 70-1/2 may result in adverse tax
consequences. An individual may revoke an IRA plan (other than
rollovers of distributions from qualified retirement plans)
within seven days of establishment and receive a full return of
his or her contributions. An individual may redeem his or her
account at any time. The Fund's prototype plan has received a
favorable determination letter on its tax-qualified status from
the Internal Revenue Service.

The Firstar Trust Company, Milwaukee, Wisconsin serves as
custodian and furnishes services for the IRA plan as required by
ERISA. The custodian is required to invest all cash
contributions, dividends and capital gains distributions in
shares of the Fund. The custodian currently charges the
following fees against each participant's account for its
services: $12.50 ($25.00 for two or more accounts) annual
maintenance fee; $15 for transfer to a successor trustee; $15
for final distribution to participant; $12.00 for any outgoing
wire transfer and $15 for refunding any contribution in excess of
the deductible limit. These fees are subject to change. The
custodian will purchase and redeem shares of the Fund in the same
manner as set forth under "Purchase of Capital Stock" and
"Redemption of Capital Stock," provided that before shares can be
redeemed in an individual retirement account, the custodian must
have on file a written notice together with any required
withholding information of such termination setting forth the
effective date thereof.

As changes occur from time to time in existing IRA
Regulations, it is important that you obtain up-to-date
information from the Fund before opening an IRA. Consultation
with a tax adviser regarding the tax consequences of the Plan is
recommended.

SELF-EMPLOYED MASTER RETIREMENT PLAN

The Fund has available a master retirement plan (formerly
called a Keogh Plan) for self-employed individuals.
Participating employers may adopt either the profit sharing or
money purchase portion of the Plan, or both. The Internal
Revenue Service has approved the Plan as qualified under the
Self-Employed Individuals Tax Retirement Act of 1962, as amended.
It will operate in compliance with that Act.

Under such a plan, a self-employed individual, who is
eligible, may deduct for federal income tax purposes,
contributions subject to the limitations set forth in the Plan
and Internal Revenue Code. The Firstar Trust Company, Milwaukee,
Wisconsin serves as custodian and furnishes services for the
master retirement plan as required by that Act. The custodian is
required to invest all cash contributions, dividends and capital
gains distributions in shares of the Fund. The custodian
currently charges the following fees against each participant's
account for its services, which fees are subject to change:
$12.50 ($25.00 for two or more accounts) annual maintenance fee
per participant account; $15 for a transfer to successor trustee;
$15 for final distribution to a participant; $12.00 for any
outgoing wire transfer; and $15 for refund of excess
contribution. Any person seeking additional information or
wishing to participate in the Plan may contact the Fund.

As changes occur from time to time in existing master
retirement plan regulations, it is important that you obtain
up-to-date information from the Fund before opening a master
retirement plan. Consultation with a tax adviser regarding the
tax consequences of the Plan is recommended.

BROKERAGE

The Adviser, who decides to buy and sell securities, selects
a broker or dealer for the execution of a portfolio transaction
on the basis that such broker or dealer will execute the order as
promptly and efficiently as possible subject to the overriding
policy of the Fund. This policy is to obtain the best market
price and reasonable execution for all its transactions, giving
due consideration to such factors as reliability of execution and
the value of research, statistical and price quotation services
provided by such broker or dealer. The research services
provided by brokers consist of recommendations to purchase or
sell specific securities, the rendering of advice regarding
events involving specific issuers of securities and events and
current conditions in specific industries, and the rendering of
advice regarding general economic conditions affecting the stock
market and the U. S. economy.

The Adviser does not specifically negotiate commissions and
charges with a broker or dealer in advance of each transaction.
The approximate brokerage discount and charges are, however,
generally known to the Adviser prior to effecting the
transaction. In determining the overall reasonableness of the
commissions paid, the Adviser compares the commission rates to
those it pays on transactions for its other client accounts and
to the rates generally charged in the industry to institutional
investors such as the Fund. The commissions are also considered
in view of the value of the research, statistical and price
quotation services, if any, rendered by the broker or dealer
through whom a transaction is placed.

Purchases and sales of portfolio securities are frequently
placed, without any agreement or undertaking to do so, with
brokers and dealers who provide the Adviser with supplemental
research, statistical and price quotation services. The Adviser
understands that since the brokers and dealers rendering such
services are compensated therefor by commissions, such services
would be unilaterally reduced or eliminated by the brokers and
dealers if none of the Fund's transactions were placed through
them. While these services have value which cannot be measured
in dollars, the Adviser believes such services do not reduce the
Fund's or the Adviser's expenses.

In instances where it is determined by the Adviser that the
supplemental research and statistical services are of significant
value, it is the practice of the Adviser to place the Fund's
transactions with brokers or dealers who are paid a higher
commission than other brokers or dealers. However, commissions
paid are generally lower than those paid prior to the elimination
of fixed minimum rates in 1975 and are no higher than rates which
could be obtained from other brokers or dealers who would also
furnish comparable supplemental research and statistical
services. The Adviser utilizes research and other information
obtained from brokers and dealers in managing its other client
accounts. On the other hand, the Adviser obtains research and
information from brokers and dealers who transact trades for the
Adviser's other client accounts, which is also utilized by the
Adviser in managing the Fund's portfolio.

The Fund may effect portfolio transactions with brokers or
dealers who recommended the purchase of the Fund's shares. The
Fund may not allocate brokerage on the basis of recommendations
to purchase shares of the Fund.

Over-the-counter market purchases and sales are generally
transacted directly with principal market makers, who retain the
difference between their cost in a security and its selling
price. In some circumstances where, in the opinion of the
Adviser, better prices and executions are available elsewhere,
the transactions are placed through brokers who are paid
commissions directly.

Brokerage commissions paid by the Fund during the fiscal
year ended March 31, 1997 totaled $1,501,852. Brokerage
commissions paid by the Fund during the fiscal year ended March
31, 1996 and March 31, 1995 totaled $1,882,028 and $2,236,595
respectively. The Fund's portfolio turnover rates were 15.18%,
25.70%, and 29.82%, respectively, for the fiscal years ended
March 31, 1997, March 31, 1996 and March 31, 1995.

PRINCIPAL SHAREHOLDERS

All directors and executive officers of the Fund, as a group
(12 persons), beneficially own less than 1% of the outstanding
shares of the Fund.

PERFORMANCE DATA

The Fund may quote a "total return" or an "average annual
total return" from time to time in advertisements or in
information furnished to present or prospective shareholders.
The "total return" of the Fund is expressed as a ratio of the
increase (or decrease) in value of a hypothetical investment in
the Fund at the end of a measuring period to the amount initially
invested. The "average annual total return" is determined by
discounting the "total return" for the number of time periods
represented. These values are computed according to the
following formulas:
P(1+T)n = ERV

Total Return = ERV - 1
---
P

AVERAGE ANNUAL TOTAL RETURN = nth root of ERV
----- - 1
P

where:

P = a hypothetical initial payment of $1,000

T = average annual total return

n = number of years

ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the one, five and ten year periods.

One Year Five Year Ten Year
------- --------- --------
Total Return +14.68% +89.30% +229.12%
Average Annual Total Return +14.68% +13.61% + 12.65%

For purposes of these calculations, the following
assumptions are made: (1) all dividends and distributions by the
Fund are reinvested at the net asset value calculated on the
reinvestment dates during the period; (2) a complete redemption
at the end of the period is made; (3) all recurring fees that are
charged to all shareholder accounts are included; and (4) the one
year, five year and ten year periods end on March 31, 1997.

These figures are computed by adding the total number of
shares purchased by a hypothetical $1,000 investment in the Fund
to all additional shares purchased within a one year period with
reinvested dividends and distributions, reducing the number of
shares by those redeemed to pay account charges, taking the value
of those shares owned at the end of the year and reducing it by
any deferred charges, and then dividing that amount by the
initial $1,000 investment. This computation does not reflect any
sales load or other nonrecurring charges, since the Fund is not
subject to such charges.

The "total return" and "average annual total return"
calculations are historical measures of performance and are not
necessarily indicative of future performance. Such measurements
will vary from time to time depending upon market conditions, the
composition of the Fund's portfolio, operating expenses, and the
distribution policy as determined by the Board of Directors.
These factors should be considered when evaluating the Fund's
performance.

DESCRIPTION OF CAPITAL STOCK

STOCK CERTIFICATES

The Fund will not issue certificates evidencing shares
purchased unless so requested in writing. Where certificates are
not issued, the shareholder's account will be credited with the
number of shares purchased, relieving shareholders of
responsibility for safekeeping of certificates and the need to
deliver them upon redemption. Written confirmations are issued
for all purchases of shares. Any shareholder may deliver
certificates to the Fund's transfer agent, Firstar Trust Company,
and direct that his account be credited with the shares. A
shareholder may direct Firstar Trust Company in writing at any
time to issue a certificate for his shares without charge. If a
shareholder requests certificates at any time other than in
connection with an initial purchase, the request must be
accompanied by a signature guarantee.

ANNUAL MEETING

The State of Maryland business corporation law permits
registered investment companies, such as the Fund, to operate
without an annual meeting of shareholders under specified
circumstances if an annual meeting is not required by the
Investment Company Act of 1940, as amended. The Fund has adopted
the appropriate provisions in its By-Laws and will not hold
annual meetings of shareholders, including for the following
purposes unless otherwise required to do so: (1) election of
directors; (2) approval of any investment advisory agreement; (3)
ratification of the selection of independent auditors; and (4)
approval of a distribution agreement.

COMMUNICATIONS BETWEEN SHAREHOLDERS

In the event the Fund is not required to hold annual
meetings of shareholders to elect directors by virtue of the
amendment to Maryland law described under "Annual Meeting," the
Board of Directors of the Fund will promptly call a meeting of
shareholders of the Fund for the purpose of voting upon the
question of removal of any director when requested in writing by
the record holders of not less than 10% of the outstanding shares
of Common Stock of the Fund. The affirmative vote of two-thirds
of the outstanding shares, cast in person or by proxy at a
meeting called for such purpose, is required to remove a director
of the Fund. The Fund will assist shareholders in communicating
with each other for this purpose pursuant to the requirements of
Section 16(c) of the Investment Company Act of 1940, as amended.

SHAREHOLDER REPORTS

CUSTODIAN AND TRANSFER AGENT

The Firstar Trust Company, P.O. Box 2944, Milwaukee,
Wisconsin 53201-2944, (telephone no. 414-276-0535 or
800-544-6547), acts as custodian of all cash and securities of
the Fund. As custodian, the Trust Company holds all securities
and cash for the Fund (except for cash maintained in an expense
account with the Firstar National Bank, Milwaukee, Wisconsin),
delivers and receives payment for securities sold, receives and
pays for securities purchased, collects income from investments
and performs other duties, all as directed by the officers of the
Fund. The Trust Company does not exercise any supervisory
function over the management of the Fund, the purchase or sale of
securities or the payment of distributions to shareholders. The
Trust Company also acts as transfer agent.

COUNSEL AND AUDITORS

Davis & Kuelthau, S.C., Milwaukee, Wisconsin, counsel for
the Fund and the Adviser, have passed upon the legality of the
shares offered by this Prospectus. Arthur Andersen LLP has been
selected as the independent auditors for the Fund for the fiscal
year ending March 31, 1998.

FINANCIAL INFORMATION

The financial statements and other financial information
relating to the Fund contained in the Annual Report of the Fund
for the fiscal year ended March 31, 1997, are incorporated herein
by reference.

STATEMENT OF ADDITIONAL INFORMATION

NICHOLAS FUND, INC.

Investment Adviser
Nicholas Company, Inc.
Milwaukee
(414) 272-6133

Custodian, Transfer Agent and Disbursing Agent
Firstar Trust Company
Milwaukee
(414) 276-0535

Independent Public Accountants
Arthur Andersen LLP
Milwaukee

Counsel
Davis & Kuelthau, S.C.
Milwaukee

700 North Water Street
Milwaukee, Wisconsin 53202

July 30, 1997

Nicholas Fund, Inc.

Form N-1A

PART C: OTHER INFORMATION

PART C. OTHER INFORMATION

Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements: Condensed Financial Information
---------------------
incorporated herein by reference to Part A of this registration
statement.

(b) Exhibits: All exhibits required to be filed with this
---------
Form N-1A, pursuant to Item 24(b) thereof, are listed in the
Exhibit Index appearing elsewhere in this Registration Statement
and (i) appear in their entirety, herein or (ii) are incorporated
by reference to previous filings with the Commission, as
indicated in such Exhibit Index.

Item 25. Persons Controlled by or Under Common Control with Registrant
-------------------------------------------------------------
There is no person known to Registrant to own more than 5%
of its outstanding common stock. Accordingly, other than
Registrant's Board of Directors, no person controls Registrant.

Registrant does not control any other person.

Registrant, Nicholas Income Fund, Inc., Nicholas II, Inc.,
Nicholas Limited Edition, Inc., Nicholas Money Market Fund, Inc.,
and Nicholas Equity Income Fund, Inc. are advised by the same
investment adviser, Nicholas Company, Inc.

Item 26. Number of Holders of Securities
-------------------------------
As of March 31, 1997, the number of record holders was:

Title of Class Number of Record Holders
-------------- ------------------------
Common Stock 156,235

Item 27. Indemnification
---------------
Reference is made to Item 4 of Part II, and to Exhibit 6 to
Registrant's Post-Effective Amendment No. 20, filed with the
Commission on September 29, 1977, which is incorporated herein.
Reference is further made to Item 4 of Registrant's
Post-Effective Amendment No. 21 filed with the Commission on
October 20, 1977, which is incorporated herein.

The investment adviser to the Registrant, Nicholas Company,
Inc., has, by corporate resolution, agreed to indemnify
Registrant's officers, directors and employees to the extent of
$50,000 deductible provided by the Errors and Omissions Policy
and subject to the undertaking contained in Item 4 of Part II of
Registrant's Post-Effective Amendment No. 21.

Item 28. Business and Other Connections of Investment Adviser
----------------------------------------------------
None.

Item 29. Principal Underwriters
----------------------
None.

Item 30. Location of Accounts and Records
--------------------------------
Registrant, at its principal office, 700 North Water Street,
Milwaukee, Wisconsin, and Firstar Trust Company, 615 East
Michigan Avenue, Milwaukee, Wisconsin, maintain the required
accounts and records.

Item 31. Management Services
-------------------
None.

Item 32. Undertakings
------------
The Registrant's By-Laws provide that it will indemnify the
Officers and Directors of the Registrant for liabilities incurred
by them in any proceeding arising by reason of the fact that any
such person was or is a director or officer of the Registrant.
Insofar as indemnification for liability arising under the Act
may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the Act, or otherwise, the
Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Act and may, therefore, be
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.

Subject to the terms and conditions of Section 15(d) of the
Securities Exchange Act of 1934, the undersigned Registrant
hereby undertakes to file with the Securities and Exchange
Commission such supplementary and periodic information, documents
and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.

The undersigned Registrant hereby undertakes to deliver or
cause to be delivered with the prospectus, to each person to whom
the prospectus is sent or given, the latest annual report to
security holders that is incorporated by reference in the
prospectus and furnished pursuant to and meeting the requirements
of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be
presented by Article 3 of Regulation S-X are not set forth in the
prospectus, to deliver, or cause to be delivered to each person
to whom the prospectus is sent or given, the latest semiannual
report that is specifically incorporated by reference in the
prospectus.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933
and the Investment Company Act of 1940, the Registrant hereby
certifies that it meets all of the requirements for effectiveness
of this Registration Statement under Rule 485(b) under the
Securities Act of 1933, and has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Milwaukee, State of
Wisconsin, on the 23rd day of July, 1997.

NICHOLAS FUND, INC.

By: /s/ Albert O. Nicholas
-------------------------
Albert O. Nicholas
President and Director

Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the
following persons in the capacities and on the dates indicated.

Signature Title Date
--------- ----- ----

/s/ Albert O. Nicholas President and July 23, 1997
------------------------ Director
Albert O. Nicholas

/s/ Jeffrey T. May
------------------------ Senior Vice-President July 23, 1997
Jeffrey T. May and Treasurer

/s/ Melvin Schultz
------------------------ Director July 23, 1997
Melvin L. Schultz

/s/ Richard Seaman
------------------------ Director July 23, 1997
Richard Seaman

LIST OF CONSENTS

1. Consent of Davis & Kuelthau, S.C.
(included in Exhibit (b)(10))

2. Consent of Arthur Andersen LLP
(included as Exhibit (b)(17))

EXHIBIT INDEX

Exhibit Sequential
No. Description Page No.
- ------- ----------- ----------

(b)(1) Articles of Incorporation of Registrant *
[incorporated by reference to Part II of
Registrant's Post-Effective Amendment No. 25,
as filed with the Commission on July 2,
1979].

(b)(2) By-Laws of Registrant [incorporated by *
reference to Part II of Registrant's Post-
Effective Amendment No. 35, as filed with the
Commission on July 27, 1988].

(b)(4) Specimen certificate evidencing common stock, *
$.50 par value, of Registrant [incorporated
by reference to Part II of Registrant's Post-
Effective Amendment No. 25, as filed with the
Commission on July 2, 1979].

(b)(5) Investment Advisory Agreement, dated July 17, *
1985, between Registrant and Nicholas
Company, Inc. [incorporated by reference to
Part C of Registrant's Post-Effective
Amendment No. 32, filed with the Commission
on May 24, 1985].

(b)(8) Custodian Agreement between Registrant and *
Firstar Trust Company, [incorporated by
reference to Part II of Registrant's Post-
Effective Amendment No. 28, as filed with the
Commission on May 28, 1981].

(b)(10) Opinion of Davis & Kuelthau, S.C., concerning _______
the legality of Registrant's common stock,
including attorney's consent to the use of
such opinion.

(b)(12) Statement of assets and liabilities of _______
Registrant, including the schedule of
investments, as of March 31, 1997, and the
related statement of operations for the year
then ended, statement of changes in net
assets for each of the two years in the
period ended March 31, 1997, and the per
share income and capital changes for each of
the ten years in the period ended March 31,
1997 [included in the Annual Report to
Shareholders of Registrant for the fiscal
year ended March 31, 1997].

(b)(14) Retirement plans in conjunction with which *
Registrant offers its securities pursuant to
a Prototype IRA Plan and a Master Retirement
Plan [incorporated by reference to Part II of
Registrant's Post-Effective Amendment No. 38,
as filed with the Commission on July 18,
1991].

(b)(16) Schedule for computation of performance _______
quotation provided in response to Item 22,
Form N-1A.

(b)(17) Consent of Arthur Andersen LLP, independent _______
public accountants.

*Incorporated by reference to previous filing as indicated.

CONSENT OF INDEPENDANT PUBLIC ACCOUNTANTS

As independant public accountants, we hereby consent to the use
of our report, and to all references to our, included in or made
a part of this form N-1A registration statement for the Nicholas
Fund, Inc.

/s/ ARTHUR ANDERSON & CO.

Milwaukee, Wisconsin
July 11, 1997

May 29, 1997

Report to Shareholders:

Nicholas Fund, Inc. completed its fiscal year ended March 31, 1997 with a
+14.68% total return with distributions reinvested. In comparison, the
Standard & Poor's 500 increased 19.83% and the Russell 2000 was up 5.11% for
the same period. The Fund produced a +1.77% total return for the quarter ended
March 31, 1997. This result compared to +2.68% and -5.17% for the Standard
& Poor's 500 and Russell 2000, respectively. The Fund's cash position was 2.60%
at fiscal year-end.

As our investment strategy stresses patience, we would like to emphasize
long-term results. Shown below are results for various time periods ended
March 31, 1997.
<TABLE>
<CAPTION)
Average Annual Total Return*
----------------------------- July 14, 1969**
5 years 10 years 15 years 27.7 years
Nicholas Fund, Inc. ------- -------- -------- ----------
<S> <C> <C> <C>
(Distributions Reinvested)..... +13.61% +12.65% +17.15% +13.53%
Russell 2000 Index
(Income Reinvested)............... +12.78% + 9.40% +13.83% N/A
Standard & Poor's 500 Index
(Income Reinvested) ........... +16.42% +13.38% +17.60% +11.88%
Consumer Price Index ............. + 2.81% + 3.60% + 3.55% + 5.46%
Ending value of $10,000
invested in Nicholas Fund
(Distributions Reinvested) .... $18,930 $32,912 $107,445 $336,973

</TABLE>
*Total returns are historical and include change in share price and
reinvestment of dividends and capital gain distributions. Past
performance is no guarantee of future results. Principal value and
return will fluctuate so an investment, when redeemed, may be worth
more or less than original cost.

**Date of initial public offering. Starting time period for
Standard & Poor's 500 and the Consumer Price Index is June 30, 1969.

Shareholders should be aware of the nature of today's stock market. Large
market capitalization stocks have performed substantially better than small
market capitalization stocks which is evident by examining the recent results
of Standard & Poors 500 Index versus the Russell 2000 Index. A few large
company equities are greatly responsible for the gains that we see
in the major market averages. Further, any adverse development in a company's
fundamentals can result in a disastrous, inordinate decline in its share price.
There have been many of these situations in recent months which indicates that
the market has become less bullish in its overall posture. We are attempting to
take advantage of these conditions in the marketplace in our stock selection
process.

Management would like to thank all shareholders for the confidence they
have placed in the long-term investment philosophy of the Fund. We appreciate
your patience and support.

Sincerely,

/S/ Albert O. Nicholas
----------------------
Albert O. Nicholas
President

FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each year)
- --------------------------------------------------------------------
<TABLE>
Year ended March 31,
--------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR $63.81 $52.22 $51.10 $52.91 $49.68 $42.99 $37.72 $35.27 $32.15 $39.94
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .40 .57 .69 .74 .75 .70 .80 .96 .97 1.07
Net gains or (losses) on securities
(realized and unrealized) 8.64 15.68 4.46 (.68) 5.20 7.49 5.48 3.46 3.63 (2.99)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------

TOTAL RETURN 14.68% 32.38% 10.88% 0.04% 12.41% 19.33% 17.13% 12.55% 14.81% (3.74%)

*Disclosure of this rate is required by the Securities and
Exchange Commission on a prospective basis beginning with the Fund's
1996 fiscal year end.

The accompanying notes to financial statements are an integral
part of these statements.

</TABLE>
TOP TEN PORTFOLIO HOLDINGS
March 31, 1997 (Unaudited)
- ------------------------------------------------------------------------

PERCENTAGE OF NET
NAME ASSETS
- ---------------- -----------------
Federal Home Loan Mortgage Corporation................... 4.11%
Fannie Mae............................................... 4.07%
Mercury General Corporation.............................. 3.86%
General Motors Corporation -- Class H.................... 3.13%
Tyco International Ltd................................... 2.64%
Travelers Group, Inc. ................................... 2.60%
Wells Fargo & Company.................................... 2.49%
Berkshire Hathaway, Inc. ................................ 2.36%
Circuit City Stores, Inc. ............................... 2.34%
Fifth Third Bancorp...................................... 2.13%

Total of top ten holdings as a percent of net assets..... 29.73%

SCHEDULE OF INVESTMENTS
March 31, 1997
- ------------------------------------------------------------------------
Shares or Quoted
Principal Market
Amount Value
- ---------- ------------
(Note 1 (a))
COMMON STOCKS - 96.64%

AGRICULTURE - 1.05%
1,100,000 Monsanto Company $ 42,075,000
--------------

BANKS AND FINANCE - 21.31%
272,000 Edwards (A.G.), Inc. 8,364,000
4,500,000 Fannie Mae 162,562,500
6,021,200 Federal Home Loan Mortgage Corporation 164,077,700
1,097,250 Fifth Third Bancorp 85,036,875
336,900 First Bank System, Inc. 24,593,700
891,400 Firstar Corporation 24,513,500
2,084,000 Marshall & Ilsley Corporation 76,066,000
1,000,000 Norwest Corporation 46,250,000
645,000 Security Capital Corporation (WI) + 55,470,000
2,168,000 Travelers Group Inc. 103,793,000
350,000 Wells Fargo & Company 99,443,750
--------------
850,171,025
--------------

BUSINESS SERVICES - 3.48%
686,000 Cintas Corporation 36,186,500
560,000 Electronic Data Systems Corp. 22,610,000
1,075,000 Micro Warehouse, Inc. * 14,109,375
1,985,200 Wallace Computer Services, Inc. 65,759,750
--------------
138,665,625
--------------

CONSUMER PRODUCTS & SERVICES - 9.68%
200,000 American Express Company 11,975,000
1,674,687 Clayton Homes, Inc. 21,352,259
1,668,300 Cooper Tire & Rubber Company 30,863,550
789,200 CSS Industries, Inc. * + 23,577,350
500,000 Eastman Kodak Company 37,937,500
750,000 Gillette Company (The) 54,468,750
150,000 Kimberly-Clark Corporation 14,906,250
755,000 Leggett & Platt, Incorporated 24,537,500
550,000 Nike, Inc. - Class B 34,100,000
700,000 Pittston Brink's Group 18,025,000
1,692,600 Valspar Corporation (The) 48,662,250
898,400 Walt Disney Company (The) 65,583,200
--------------
385,988,609
--------------

FOOD AND BEVERAGE - 4.16%
1,000,000 Coca-Cola Company (The) 55,875,000
1,683,000 International Dairy Queen, Inc.-Class A * + 37,026,000
720,000 International Dairy Queen, Inc.-Class B * + 15,750,000
1,210,500 McDonald's Corporation 57,196,125
--------------
165,847,125
--------------

HEALTH CARE PRODUCTS - 8.21%
1,090,000 Abbott Laboratories 61,176,250
468,000 American Home Products Corporation 28,080,000
820,000 Amgen Inc. * 45,817,500
1,411,800 Elan Corporation PLC * 48,177,675
877,800 Forest Laboratories, Inc. * 33,027,225
200,000 Medtronic, Inc. 12,450,000
700,000 Pfizer Inc 58,887,500
1,600,000 Stryker Corporation 39,800,000
--------------
327,416,150
--------------

HEALTH CARE SERVICES - 10.11%
2,450,000 Apria Healthcare Group, Inc. * 44,406,250
853,150 Cardinal Health, Inc. 46,390,031
422,900 Health Care and Retirement Corporation * 12,158,375
1,193,750 Health Management Associates, Inc. -Class A * 28,351,563
2,570,000 Magellan Health Services Inc. * + 63,286,250
1,940,100 MedPartners/Mullikin, Inc. * 41,227,125
100,000 Patterson Dental Company * 3,400,000
1,833,000 Quorum Health Group, Inc. * 56,593,875
1,802,905 Vencor,Inc. * 68,285,027
1,450,000 VIVRA Incorporated * 39,150,000
--------------
403,248,496
--------------

INDUSTRIAL PRODUCTS AND SERVICES - 5.71%
700,000 Airgas, Inc. * 11,812,500
403,000 Lockheed Martin Corporation 33,852,000
900,000 Marshall Industries * + 28,350,000
1,063,825 Thermo Electron Corporation * 32,845,597
1,915,000 Tyco International Ltd. 105,325,000
850,000 Wausau Paper Mills Company 15,566,050
--------------
227,751,147
--------------

INSURANCE - 9.80%
888,777 Foremost Corporation of America + 51,549,066
2,522,800 Mercury General Corporation + 153,890,800
794,800 Mutual Risk Management Ltd. 28,811,500
255,000 Progressive Corporation (The) 16,288,125
1,368,500 Protective Life Corporation 57,477,000
2,200,000 SunAmerica, Inc. 82,775,000
--------------
390,791,491
--------------

INVESTMENT MANAGEMENT - 0.79%
619,950 Franklin Resources, Inc. 31,617,450
--------------

MEDIA, COMMUNICATIONS AND ENTERTAINMENT - 4.02%
2,300,000 General Motors Corporation - Class H 124,775,000
1,257,100 Loral Space & Communications Ltd. * 17,756,538
415,466 Pulitzer Publishing Company 17,968,904
--------------
160,500,442
--------------

REAL ESTATE - 0.55%
100,000 Crescent Real Estate Equities, Inc. 2,675,000
519,800 National Health Investors, Inc. 19,297,575
--------------
21,972,575
--------------

RETAIL TRADE - 9.23%
1,700,000 AutoZone, Inc. * 38,250,000
2,800,000 Circuit City Stores, Inc. - Circuit City Group 93,450,000
206,500 Circuit City Stores, Inc. - CarMax Group * 3,097,500
1,755,000 Consolidated Stores Corporation * 61,863,750
3,150,000 Heilig-Meyers Company + 50,006,250
800,000 Home Depot, Inc. (The) 42,800,000
1,262,000 Kohl's Corporation * 53,477,250
600,000 Walgreen Co. 25,125,000
--------------
368,069,750
--------------

TECHNOLOGY - 4.96%
750,000 Hewlett-Packard Company 39,937,500
400,000 Intel Corporation 55,650,000
900,000 Motorola, Inc. 54,337,500
650,000 Texas Instruments Incorporated 48,668,750
--------------
198,593,750
--------------

TRANSPORTATION - 0.60%
1,259,589 Heartland Express, Inc. * 23,932,191
--------------

MISCELLANEOUS - 2.98%
2,600 Berkshire Hathaway Inc.* 94,120,000
900,000 Leucadia National Corporation 24,750,000
--------------
118,870,000
--------------

TOTAL COMMON STOCKS
(cost $2,148,539,078) 3,855,510,826
--------------

CONVERTIBLE BONDS - 0.76%
10,290,000 National Healthcare L.P.
6.00%, due July 1, 2000 30,394,088
--------------
(cost $19,756,800)

SHORT-TERM INVESTMENTS - 2.62%
Commercial Paper - 2.39%
$ 3,941,000 Lockheed Martin Corporation
5.40%, due April 2, 1997 3,940,409
3,000,000 North American Mortgage Company
5.44%, due April 3, 1997 2,999,093
7,000,000 A.O. Smith Corporation
5.50%, due April 4, 1997 6,996,792
4,000,000 Mosinee Paper Corporation
5.50%, due April 7, 1997 3,996,333
7,500,000 Houston Industries Incorporated
5.50%, due April 8, 1997 7,491,979
6,585,000 Fiserv, Inc.
5.50%, due April 10, 1997 6,575,946
10,000,000 Tyson Foods, Inc.
5.60%, due April 11, 1997 9,984,445
5,490,000 Fiserv, Inc.
5.50%, due April 14, 1997 5,479,096
10,000,000 American Bankers Insurance Group, Inc.
5.45%, due April 15, 1997 9,978,806
3,000,000 Fiserv, Inc.
5.50%, due April 16, 1997 2,993,125
2,300,000 Fiserv, Inc.
5.75%, due April 16, 1997 2,294,490
4,000,000 Cox Communications, Inc.
5.50%, due April 17, 1997 3,990,222
6,500,000 Hughes Electronics Corporation
5.57%, due April 21, 1997 6,479,886
5,000,000 American Bankers Insurance Group, Inc.
5.45%, due April 22, 1997 4,984,104
7,000,000 Kerr-McGee Credit Corporation
5.67%, due April 23, 1997 6,975,745
5,000,000 Cox Enterprises, Inc.
5.57%, due April 24, 1997 4,982,207
5,000,000 Manpower, Inc.
5.75%, due April 25, 1997 4,980,833
-------------
95,123,511
-------------

Variable Rate Demand Notes - 0.23%
6,054,884 Johnson Controls, Inc.
5.31%, due April 1, 1997 6,054,884
1,800,335 Sara Lee Corporation
5.27%, due April 1, 1997 1,800,335
1,514,880 Warner-Lambert Company
5.26%, due April 1, 1997 1,514,880
-------------
9,370,099
-------------

TOTAL SHORT-TERM INVESTMENTS
(cost $104,169,698) 104,493,610
-------------
TOTAL INVESTMENTS 3,990,398,524
-------------

LIABILITIES, NET OF CASH
AND RECEIVABLES - (0.02%) (909,824)
-------------
TOTAL NET ASSETS (Basis of
percentages disclosed above) $3,989,488,700
--------------
--------------

+This company is affiliated with the Fund; that is, the Fund holds 5% or
more of its outstanding voting securities. Such companies are defined
in Section 2(a)(3), of the Investment Company Act of 1940. (Note 5)
*Nondividend paying security.

The accompanying notes to financial statements are an integral
part of this schedule.

STATEMENT OF ASSETS AND LIABILITIES
March 31, 1997
- -------------------------------------------------------------------------
<TABLE>
ASSETS:
<S>
Investments in securities at market value (Note 1 (a)) -- <C>
Nonaffiliated issuers (cost $2,033,587,674)-see accompanying schedule of investments $3,511,492,808
Affiliated issuers (cost $238,877,902)-see accompanying schedule of investments (Note 5) 478,905,716
--------------
Total investments................................................................ 3,990,398,524
--------------
Cash................................................................................... 200,385

Dividends and interest receivables..................................................... 2,199,095
--------------
Total assets.................................................................. 3,992,798,004
--------------

LIABILITIES:
Payables --
Investment securities purchased..................................................... 573,750
Management fee (Note 2)............................................................. 2,176,779
Other payables and accrued expenses................................................. 558,775
--------------
Total liabilities............................................................. 3,309,304
--------------
Total net assets ............................................................. $3,989,488,700
--------------
--------------

NET ASSETS CONSIST OF:
Fund shares issued and outstanding..................................................... $2,203,817,031
Net unrealized appreciation on investments (Note 3) ................................... 1,717,609,036
Accumulated undistributed net realized gains on investments............................ 63,034,235
Accumulated undistributed net investment income........................................ 5,028,397
--------------
$3,989,488,700
--------------
--------------

NET ASSET VALUE PER SHARE ($.50 par value, 200,000,000 shares authorized)
offering price and redemption price ($3,989,488,700 ./. 59,443,426 shares
outstanding)........................................................................... $67.11
------
------

</TABLE>

The accompanying notes to financial statements are an integral
part of this statement.

<TABLE>
STATEMENT OF OPERATIONS
For the Year Ended March 31, 1997
- ---------------------------------------------------------------------
<S> <C>
INCOME:
Dividends (Note 1 (d)) --
Nonaffiliated issuers.................................................... $ 35,342,490
Affiliated issuers (Note 5) ............................................ 4,811,328
Interest................................................................... 10,416,774
Other...................................................................... 691,785
-------------
51,262,377
-------------

EXPENSES:
Management fee (Note 2) ................................................... 25,060,663
Transfer agent fees........................................................ 1,982,216
Postage and mailing fees................................................... 257,574
Custodian fees............................................................. 204,114
Printing................................................................... 118,175
Registration fees.......................................................... 114,399
Telephone.................................................................. 49,876
Legal fees................................................................. 38,280
Audit and tax consulting fees.............................................. 22,000
Directors' fees............................................................ 15,186
Insurance ................................................................. 15,056
Other operating expenses................................................... 3,424
-------------
27,880,963
-------------
Net investment income.................................................... 23,381,414
-------------

NET REALIZED GAINS ON INVESTMENTS (Note 1 (b)):
Nonaffiliated issuers...................................................... 220,089,513
Affiliated issuers (Note 5)................................................ 1,250,023
-------------
221,339,536

NET INCREASE IN UNREALIZED APPRECIATION ON INVESTMENTS ........................ 282,923,851
-------------
Net gains on investments................................................... 504,263,387
-------------
Net increase in net assets resulting from operations....................... $527,644,801
-------------
-------------

</TABLE>

The accompanying notes to financial statements are an integral
part of this statement.

STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended March 31, 1997 and 1996
- ---------------------------------------------------------------------
<TABLE>

1997 1996
------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income............................................. $ 23,381,414 $ 28,786,310
Net realized gains on investments (Note 1 (b)).................... 221,339,536 310,441,936
Net increase in unrealized appreciation on investments............ 282,923,851 585,991,652
------------- --------------

Net increase in net assets resulting from operations..... 527,644,801 925,219,898
------------- --------------

DISTRIBUTIONS TO SHAREHOLDERS (Note 1 (d)):
Distributions from net investment income
($0.4179 and $0.5650 per share, respectively).................... (24,092,988) (31,690,147)
Distributions from net realized gains on investment transactions
($5.3166 and $4.0945 per share, respectively)................... (305,905,425) (228,973,671)
-------------- --------------
Total distributions...................................... (329,998,413) (260,663,818)
-------------- --------------

CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued (3,206,018 and 3,493,644
shares, respectively)........................................... 193,274,295 204,221,865
Net asset value of shares issued in distributions from net
investment income and net realized gains (4,795,847 and
4,323,439 shares, respectively)................................. 310,941,521 245,904,717
Cost of shares redeemed (5,842,762 and 8,069,427 shares,
respectively)................................................... (367,673,135) (463,785,946)
------------- --------------
Increase (decrease) in net assets derived from capital
share transactions .................................... 136,542,681 (13,659,364)
------------- --------------
Total increase in net assets............................. 334,189,069 650,896,716
------------- --------------
NET ASSETS, at the beginning of the year (including undistributed net
investment income of $5,739,971 and $8,643,808, respectively)....... 3,655,299,631 3,004,402,915
-------------- --------------

NET ASSETS, at the end of the year (including undistributed net
investment income of $5,028,397 and $5,739,971, respectively)....... $3,989,488,700 $3,655,299,631
-------------- --------------
-------------- --------------

</TABLE>
The accompanying notes to financial statements are an integral
part of these statements.

NOTES TO FINANCIAL STATEMENTS
March 31, 1997
- --------------------------------------------------------------------
(1) Summary of Significant Accounting Policies --
Nicholas Fund, Inc. (the "Fund") is an open-end, diversified management
company registered under the Investment Company Act of 1940, as amended.
The primary objective of the Fund is capital appreciation in which income
is a secondary consideration. To achieve its objective, the Fund invests
in a diversified list of common stocks having growth potential.
The following is a summary of the significant accounting policies of the
Fund.

(a) Each security, excluding short-term investments, is valued at the
last sale price reported by the principal security exchange on which
the issue is traded, or if no sale is reported, the latest bid
price. Variable rate demand notes are valued at cost which
approximates market value. U.S. Treasury Bills and commercial paper
are stated at market value with the resultant difference between
market value and original purchase price being recorded as interest
income. Investment transactions are recorded no later than the first
business day after the trade date. Cost amounts, as reported on the
statement of assets and liabilities, are the same for Federal income
tax purposes.

(b) Net realized gains and losses on common stocks and bonds were
computed on the basis of specific certificates.

(c) Provision has not been made for Federal income taxes or excise taxes
since the Fund has elected to be taxed as a "regulated investment
company" and intends to distribute substantially all taxable income
to its shareholders and otherwise comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies.

(d) Dividend income and distributions to shareholders are recorded on
the ex-dividend date. Non-cash dividends, if any, are recorded at
fair market value on date of distribution.

(e) 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 the estimates.

(2) Investment Adviser and Management Agreement --
The Fund has an agreement with Nicholas Company, Inc. (with whom certain
officers and directors of the Fund are affiliated) to serve as investment
adviser and manager. Under the terms of the agreement, a monthly fee is
paid to the investment adviser based on 1/16th of 1% (.75 of 1% on an
annual basis) of the average net asset value up to and including $50
million and 2/37th of 1% (.65 of 1% on an annual basis) of the average
net asset value in excess of $50 million. Also, the investment adviser
may be reimbursed for clerical and administrative services rendered by
its personnel. This advisory agreement is subject to an annual review
by the Directors of the Fund.

(3) Net Unrealized Appreciation --
Aggregate gross unrealized appreciation (depreciation) as of March 31,
1997, based on investment cost for Federal tax purposes is as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized appreciation on investments.................... $1,759,198,297
Aggregate gross unrealized depreciation on investments.................... (41,589,261)
Net unrealized appreciation ......................................... $1,717,609,036

</TABLE>
(4) Investment Transactions --
For the year ended March 31, 1997, the cost of purchases and the proceeds
from sales of investment securities, other than short-term obligations,
aggregated $557,371,878 and $731,000,023, respectively.

NOTES TO FINANCIAL STATEMENTS (Continued)
March 31, 1997
- -------------------------------------------------------------------------

(5) Transactions with Affiliates --
Following is an analysis of fiscal 1997 transactions with "affiliated
companies" as defined by the Investment Company Act of 1940:
<TABLE>
<CAPTION>
Amount of
Capital

Amount of Gain (Loss)
Dividends Realized
Share Activity Credited on Sale
-------------------------------------------- to Income of Shares

Balance Balance in Fiscal in Fiscal
Security Name 3/31/96 Purchases Sales 3/31/97 1997 1997
------------- -------- --------- ----- ------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
CSS Industries, Inc. 601,700 187,500 -- 789,200 $ -- $ --
Foremost Corporation of America 888,777 -- -- 888,777 959,879 --
Heilig-Meyers Company 3,000,000 150,000 -- 3,150,000 861,000 --
International Dairy Queen, Inc.
Class A 1,683,000 -- -- 1,683,000 -- --
Class B 720,000 -- -- 720,000 -- --
Magellan Health Services, Inc. 2,155,900 414,100 -- 2,570,000 -- --
Marshall Industries 550,000 350,000 -- 900,000 -- --
Mercury General Corporation 2,430,000 92,800 -- 2,522,800 1,337,084 --
Monro Muffler Brake, Inc. (a)(b) 483,367 -- 483,367 -- -- 525,524
Protective Life Corporation (a) 1,518,500 -- 150,000 1,368,500 1,066,320 4,494,609
Security Capital Corporation 645,000 -- -- 645,000 532,125 --
Stant Corporation (a) 1,373,000 -- 1,373,000 -- 54,920 (3,770,110)

$4,811,328 $ 1,250,023
---------- -----------
---------- -----------

(a) As of March 31, 1997, the Fund is no longer affiliated with this company.

(b) The share activity has been adjusted to reflect a stock split/dividend.

</TABLE>

HISTORICAL RECORD (Unaudited)
<TABLE>
(Adjusted for Two-for-One Stock Split June 15, 1979)

Net Investment
Net Income Capital Gain Dollar Weighted Growth of An
Asset Value Distributions Distributions Price/Earnings Initial $10,000
Per Share Per Share Per Share Ratio** Investment***
----------- ------------- ------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
July, 14, 1969*.............. $ 6.59 $ -- $ -- -- $ 10,000
March 31, 1985............... 29.24 0.6420 1.5760 13.2 times 69,858
March 31, 1986............... 35.26 0.5750 0.6100 15.8 87,699
March 31, 1987............... 39.94 0.8820 0.1870 16.3 102,386
March 31, 1988............... 32.15 1.8400 4.0340 14.1 98,557
March 31, 1989............... 35.27 1.0250 0.4510 13.2 113,155
March 31, 1990............... 37.72 0.9240 1.0540 14.9 127,360
March 31, 1991............... 42.99 0.7900 0.2250 16.9 149,179
March 31, 1992............... 49.68 0.6790 0.8240 19.4 178,015
March 31, 1993............... 52.91 0.6790 2.0420 18.5 200,098
March 31, 1994............... 51.10 0.8175 1.0470 16.7 200,182
March 31, 1995............... 52.22 0.7070 3.3170 17.2 221,970
March 31, 1996............... 63.81 0.5650 4.0945 21.0 293,836
March 31, 1997............... 67.11 0.4179(a) 5.3166(a) 21.7 336,973

*Date of Initial Public Offering (a) Paid $ 0.14590 in net investment income and $ 2.5930
**Based on latest 12 months accomplished earnings in capital gains on May 22, 1996 to shareholders
***Assuming reinvestment of all distributions of record May 16, 1996.
Range in quarter end price/earnings ratios since (b) Paid $ 0.2589 in net investment income and $ 2.7236
December 31, 1974 in capital gains on December 31, 1996 to shareholders
Highs Low of record December 26, 1996.
----- ---
12/31/96 22.3 3/31/82 8.3

</TABLE>

REPORT OF INDEPENDANT PUBLIC ACCOUNTANTS
- ---------------------------------------------------------------------
To the Shareholders and Board of Directors of Nicholas Fund, Inc.:

We have audited the accompanying statement of assets and
liabilities of NICHOLAS FUND, INC. (a Maryland corporation),
including the schedule of investments, as of March 31, 1997, and the
related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the
periods presented. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements
and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned as of March
31, 1997, by correspondence with the custodian and brokers. As to
securities purchased but not received, we requested confirmation from
brokers and, when replies were not received, we carried out other
alternative auditing procedures. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Nicholas Fund, Inc. as of March 31, 1997, the
results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended, and
the financial highlights for the periods presented in conformity with
generally accepted accounting principles.

ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin,
April 25, 1997.

AUTOMATIC INVESTMENT PLAN - AN UPDATE (UNAUDITED)

The Nicholas Family of Funds' AUTOMATIC INVESTMENT PLAN provides a
simple method to dollar cost average into the fund(s) of your choice.

Dollar cost averaging involves making equal systematic investments
over an extended time period. A fixed dollar investment will purchase
more shares when the market is low and fewer shares when the market
is high. The automatic investment plan is an excellent way for you to
become a disciplined investor.

The following table illustrates what dollar cost averaging can
achieve. Please note that past performance is no guarantee of future
results. Nicholas Company recommends dollar cost averaging as a
practical investment method. It should be consistently applied for
long periods (5-10 years or more) so that investments are made
through several market cycles. The table will be updated and
appear in future financial reports issued by the Nicholas Family of
Funds.

Nicholas Fund
____________________
$1,000 initial investment on 7-14-69 3-31-87
$100 invested on the last day of each month
following the date of the initial
investment (in years) 27.7 10
Total cash invested $ 34,300 $13,000
Total capital gains reinvested $137,764 $ 5,628
Total dividends reinvested $ 59,608 $ 1,602
Total full shares owned 3/31/97 7,481 434
Total market value on 3/31/97 $502,051 $29,098

The results above assume purchase on the last day of the month for the
respective periods. The Nicholas Automatic Investment Plan actually
invests on the 20th of each month (or on the alternate date specified
by the investor).

Total market value includes reinvestment of all distributions.

OFFICERS AND DIRECTORS

ALBERT O. NICHOLAS
President and Director

ROBERT H. BOCK
Director

MELVIN L. SCHULTZ
Director

RICHARD SEAMAN
Director

DAVID L. JOHNSON
Executive Vice President

THOMAS J. SAEGER
Executive Vice President and Secretary

DAVID O. NICHOLAS
Senior Vice President

LYNN S. NICHOLAS
Senior Vice President

JEFFREY T. MAY
Senior Vice President & Treasurer

CANDACE L. LESAK
Vice President

TRACY C. EBERLEIN
Assistant Vice President

CHRISTINA M. MOURADIAN
Assistant Treasurer

Investment Advisor
NICHOLAS COMPANY, INC.
Milwaukee
414-272-6133 or 800-227-5987

Custodian and Transfer Agent
FIRSTAR TRUST COMPANY
Milwaukee
414-276-0535 or 800-544-6547

Counsel
DAVIS & KUELTHAU, S.C.
Milwaukee

Auditors
ARTHUR ANDERSEN LLP
Milwaukee

This report is submitted for the information of shareholders of the Fund.
It is not authorized for distribution to prospective investors unless
preceded or accompanied by an effective prospectus.

ANNUAL REPORT

NICHOLAS FUND, INC.

700 North
Water Street
Milwaukee,
Wisconsin 53202

March 31, 1996

July 23, 1997

Nicholas Fund, Inc.
700 North Water Street
Milwaukee, WI 53202

Gentlemen:

We have acted as counsel to Nicholas Fund, Inc. ("Fund"), a
corporation organized under the laws of the State of Maryland, in
connection with the preparation and filing of a registration
statement on Form N-1A and amendments thereto ("Registration
Statement"), relating to the registration of the common stock of
the Fund ("Common Stock") under the Securities Act of 1933, as
amended.

We have reviewed the Articles of Incorporation and By-Laws
of the Fund and the Registration Statement; we have also reviewed
such corporate records and other documents and have made such
examinations of law as we have deemed necessary for purposes of
the opinion hereinafter expressed. We have assumed without
independent verification the genuineness of signatures and the
conformity with originals of all documents submitted to us as
copies. Based upon the foregoing, we are of the opinion that:

1. The Fund is a corporation, duly organized and
legally existing under the laws of the State of
Maryland.

2. The Fund is authorized to issue up to two
hundred million (200,000,000) shares of Common Stock,
par value $.50 per share, including those shares
currently issued and outstanding.

3. The shares of Common Stock to be offered for
sale pursuant to the Registration Statement have been
duly authorized and, upon the effectiveness of Post-
Effective Amendment No. 44 to the Registration
Statement and compliance with applicable federal and
state securities laws and regulations, when sold,
issued (within the limits authorized under the Articles
of Incorporation of the Fund) and paid for as
contemplated in the Registration Statement, such shares
will have been validly and legally issued, fully paid
and non-assessable.

4. Post-Effective Amendment No. 44 to the
Registration Statement does not contain any disclosures
which would render it ineligible to become effective
under Rule 485(b) under the Securities Act of 1933.

We consent to the filing of this opinion as an exhibit to
the Registration Statement and to the references to us in the
prospectus comprising Part A and elsewhere in the Registration
Statement.

Sincerely yours,

/s/ DAVIS & KUELTHAU, S.C.
-----------------------------------
DAVIS & KUELTHAU, S.C.

Compound and Total Return Calculation NICHOLAS FUND 03/31/96 THRU 03/31/97

Starting date: 03/31/96 future value 1,146.81
Ending date: 03/31/97 present valu 1,000.00

Total Return 14.6809% # years 1
Average annual return 14.6809% # days 365.00

Investment Redemption
Lump sum Lump sum
Annuity Annuity

</TABLE>

Compound and Total Return Calculation NICHOLAS FUND 03/31/92 THRU 03/31/97

Starting date: 03/31/92 future value 1,892.99
Ending date: 03/31/97 present valu 1,000.00

Total Return 89.2985% # years 5
Average annual return 13.6134% # days 1826.00

Investment Redemption
Lump sum Lump sum
Annuity Annuity

</TABLE>

Compound and Total Return Calculation NICHOLAS FUND 03/31/87 THRU 03/31/97

Starting date: 03/31/87 future value 3,291.18
Ending date: 03/31/97 present valu 1,000.00

Total Return 229.1176% # years 10
Average annual return 12.6510% # days 3653.00

Investment Redemption
Lump sum Lump sum
Annuity Annuity

PRICE INV INC CAP GAIN # of SHARES REINVESTED REINVESTED CUM TOTAL
DATE /SHARE /SHARE /SHARE INVEST PURCHASED INV INC CAP GAIN SHARES MARKET VALUE
- ----------- ------------- ----------- ----------- ------------- ---------- ----------- ---------- ---------- ------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
03/31/87 Q 39.94 1000 25.038 25.038 $1,000.00
04/27/87 D 34.70 1.1400 2.3790 0.823 1.717 27.577 $956.91
06/30/87 S 36.57 27.577 $1,008.48
09/30/87 Q 37.72 27.577 $1,040.19
12/11/87 D 27.47 0.9150 1.4400 0.919 1.446 29.941 $822.47
12/31/87 A 28.94 29.941 $866.49
03/31/88 Q 32.15 29.941 $962.60
04/26/88 D 31.72 0.3850 0.1870 0.363 0.177 30.481 $966.85
06/30/88 S 33.42 30.481 $1,018.67
09/30/88 Q 33.69 30.481 $1,026.90
12/28/88 D 32.27 0.7340 0.1700 0.693 0.161 31.335 $1,011.17
12/31/88 A 32.63 31.335 $1,022.45
03/31/89 Q 35.27 31.335 $1,105.17
05/19/89 D 37.39 0.3720 0.0660 0.312 0.055 31.702 $1,185.33
06/30/89 S 37.70 31.702 $1,195.15
09/30/89 Q 40.61 31.702 $1,287.40
12/28/89 D 38.27 0.7060 0.8340 0.585 0.691 32.977 $1,262.04
12/31/89 A 38.61 32.977 $1,273.26
03/31/90 Q 37.72 32.977 $1,243.91
05/18/90 D 39.23 0.2260 0.1370 0.190 0.115 33.283 $1,305.67
06/30/90 S 40.16 33.283 $1,336.63
09/30/90 Q 33.05 33.283 $1,099.99
12/27/90 D 35.59 0.5890 0.0630 0.551 0.059 33.892 $1,206.22
12/31/90 A 35.76 33.892 $1,211.99
03/31/91 Q 42.99 33.892 $1,457.03
05/17/91 D 43.50 0.1890 0.2340 0.147 0.182 34.222 $1,488.65
06/30/91 S 43.67 34.222 $1,494.47
09/30/91 Q 45.99 34.222 $1,573.86
12/27/91 D 47.72 0.4900 0.5900 0.351 0.423 34.996 $1,670.02
12/31/91 A 49.17 34.996 $1,720.77
03/31/92 Q 49.68 34.996 $1,738.62
05/15/92 D 47.68 0.2960 1.0800 0.217 0.793 36.006 $1,716.78
06/30/92 S 47.39 36.006 $1,706.34
09/30/92 Q 48.84 36.006 $1,758.55
12/24/92 D 52.04 0.4150 0.9300 0.287 0.643 36.937 $1,922.19
12/31/92 A 52.47 36.937 $1,938.08
03/31/93 Q 52.91 36.937 $1,954.33
05/21/93 D 51.76 0.3000 0.3400 0.214 0.243 37.394 $1,935.49
06/30/93 S 52.26 37.394 $1,954.19
09/30/93 Q 53.52 37.394 $2,001.30
12/23/93 D 52.77 0.5175 0.7070 0.367 0.501 38.261 $2,019.05
12/31/93 A 53.64 38.261 $2,052.34
03/31/94 Q 51.10 38.261 $1,955.15
05/13/94 D 48.93 0.2570 1.8670 0.201 1.460 39.922 $1,953.39
06/30/94 S 49.36 39.922 $1,970.56
09/30/94 Q 51.05 39.922 $2,038.03
12/23/94 D 47.60 0.4500 1.4500 0.377 1.216 41.516 $1,976.15
12/31/94 A 48.03 41.516 $1,994.00
03/31/95 Q 52.22 41.516 $2,167.95
05/12/95 D 52.19 0.2200 1.1610 0.175 0.924 42.614 $2,224.04
06/30/95 S 53.74 42.614 $2,290.09
09/30/95 Q 58.66 42.614 $2,499.75
12/22/95 D 59.18 0.4041 2.8744 0.291 2.070 44.975 $2,661.62
12/31/95 A 60.03 44.975 $2,699.85
03/31/96 Q 63.81 44.975 $2,869.86
05/17/96 D 63.26 0.1420 2.6100 0.101 1.856 46.932 $2,968.89
06/30/96 S 62.70 46.932 $2,942.61
09/30/96 Q 65.15 46.932 $3,057.59
12/27/96 D 66.34 0.4225 2.5600 0.299 1.811 49.042 $3,253.41
12/31/96 A 65.94 49.042 $3,233.80
03/31/97 Q 67.11 49.042 $3,291.18

</TABLE>

<ARTICLE> 6

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 2272465576
<INVESTMENTS-AT-VALUE> 3990398524
<RECEIVABLES> 2199095
<ASSETS-OTHER> 200385
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3992798004
<PAYABLE-FOR-SECURITIES> 573750
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2735554
<TOTAL-LIABILITIES> 3309304
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2203817031
<SHARES-COMMON-STOCK> 59443426
<SHARES-COMMON-PRIOR> 57284323
<ACCUMULATED-NII-CURRENT> 5028397
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 63034236
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1717609036
<NET-ASSETS> 3989488700
<DIVIDEND-INCOME> 40153818
<INTEREST-INCOME> 10416774
<OTHER-INCOME> 691785
<EXPENSES-NET> 27880963
<NET-INVESTMENT-INCOME> 23381414
<REALIZED-GAINS-CURRENT> 221339536
<APPREC-INCREASE-CURRENT> 282923851
<NET-CHANGE-FROM-OPS> 527644801
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 24092988
<DISTRIBUTIONS-OF-GAINS> 305905425
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3206018
<NUMBER-OF-SHARES-REDEEMED> 5842762
<SHARES-REINVESTED> 4795847
<NET-CHANGE-IN-ASSETS> 334189069
<ACCUMULATED-NII-PRIOR> 5739971
<ACCUMULATED-GAINS-PRIOR> 147600125
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 25060663
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 27880963
<AVERAGE-NET-ASSETS> 3842718242
<PER-SHARE-NAV-BEGIN> 63.81
<PER-SHARE-NII> .4
<PER-SHARE-GAIN-APPREC> 8.64
<PER-SHARE-DIVIDEND> .42
<PER-SHARE-DISTRIBUTIONS> 5.32
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 67.11
<EXPENSE-RATIO> .72
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>