NICHOLAS LIMITED EDITION INC, 485BPOS, 2000-04-27

NICHOLAS LIMITED EDITION INC
485BPOS, 2000-04-27

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As filed with the Securities and Exchange Commission on April 26, 2000.

File No. 33-11420
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. __
POST-EFFECTIVE AMENDMENT NO. 13
AND

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 13

NICHOLAS LIMITED EDITION, INC.
---------------------------------------------------
(Exact Name of Registrant as Specified in Charter)

700 NORTH WATER STREET, MILWAUKEE, WISCONSIN 53202
- ----------------------------------------------------------------------
(Address of Principal Executive Offices)

(414) 272-6133
--------------------
(Registrant's Telephone Number, including Area Code)

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

Copy to:
TERESA M. LEVY
MICHAEL BEST & FRIEDRICH LLP
100 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202
------------------------------------------------
(Name and Address of Agent for Service)

It is proposed that this filing will become effective:

immediately upon filing pursuant to paragraph (b)
on April 30, 2000 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)
on pursuant to paragraph (a)(1)
75 days after filing pursuant to paragraph (a)(2)
on pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following box:
This post-effective amendment designates a new effective date
for a previously filed post-effective amendment.

Title of Securities Being Registered: Common Stock, $0.01 par value per share
Pursuant to Rule 24f-2, the Registrant hereby registers an indefinite amount
of securities. On March 22, 2000, Registrant filed the necessary Rule 24f-2
Notice and filing fee with the Commission for its fiscal year ended December
31, 1999.

NICHOLAS LIMITED EDITION, INC.

FORM N-1A
-----------------

PART A: PROSPECTUS

NICHOLAS LIMITED EDITION, INC.

PROSPECTUS
APRIL 30, 2000

The Fund's investment objective is long-term growth. To
achieve its objective, the Fund invests in a diversified group of
common stocks having growth potential.

This Prospectus gives vital information about the Fund. For
your benefit and protection, please read it before you invest,
and keep it on hand for future reference.

YOU SHOULD BE AWARE THAT THE FUND IS RESTRICTED IN SIZE TO
TEN MILLION SHARES (WITHOUT TAKING INTO ACCOUNT SHARES
OUTSTANDING AS A RESULT OF CAPITAL GAIN AND DIVIDEND
DISTRIBUTIONS). AS A RESULT, AT TIMES THE FUND MAY BE CLOSED TO
NEW INVESTORS, INCLUDING ADDITIONS TO EXISTING ACCOUNTS, OTHER
THAN THROUGH REINVESTMENT OF CAPITAL GAIN AND DIVIDEND
DISTRIBUTIONS.

Investment Adviser
NICHOLAS COMPANY, INC.

Minimum Initial Investment - $2,000

AS WITH ALL MUTUAL FUNDS, THE
SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
OF THE FUND'S SHARES OR DETERMINED WHETHER THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANYONE
WHO TELLS YOU OTHERWISE IS COMMITTING A CRIME.

700 NORTH WATER STREET
SUITE 1010
MILWAUKEE, WISCONSIN 53202
414-272-6133
800-227-5987

TABLE OF CONTENTS

Page

AN OVERVIEW OF THE FUND 1

SHARE LIMITATION 6

FUND INVESTMENTS 6

INVESTMENT RISKS 8

FINANCIAL HIGHLIGHTS 11

MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE 13

THE FUND'S INVESTMENT ADVISER 16

PRICING OF FUND SHARES 17

PURCHASE OF FUND SHARES 18

REDEMPTION OF FUND SHARES 20

EXCHANGE BETWEEN NICHOLAS FAMILY OF FUNDS 24

TRANSFER OF FUND SHARES 25

DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAX STATUS 26

DIVIDEND AND DISTRIBUTION REINVESTMENT PLAN 26

SYSTEMATIC WITHDRAWAL PLAN 27

INDIVIDUAL RETIREMENT ACCOUNTS 27

MASTER RETIREMENT PLAN 27

FOR MORE INFORMATION ABOUT THE FUND Back Cover

You should rely only on the information contained in this
document, or incorporated by reference. The Fund has not
authorized anyone to provide you with information that is
different.

This Prospectus is not an offer to sell, or a solicitation
of an offer to buy shares of the Fund to any person in any state
or jurisdiction where it is unlawful to make such an offer.
Changes in the affairs of the Fund have possibly occurred between
the date of the Prospectus and the time you receive it.

AN OVERVIEW OF THE FUND

GOALS

The Fund strives to increase the value of your shares
over the long-term.

PRINCIPAL INVESTMENT STRATEGIES

To pursue the Fund's goal of long-term growth, the
Fund primarily invests in a diversified portfolio of common
stock of U.S. small- and medium-sized companies having
growth potential. The Fund believes a company's annual
sales volume and market capitalization (the number of
shares outstanding multiplied by the per share price) are
the factors most illustrative of a company's size. In
distinguishing company size in terms of sales volume, the
Fund considers a company's sales volume relative to peer
companies in the company's industry. In terms of market
capitalization, the Fund generally considers companies with
market capitalizations up to $2.0 billion as "small,"
between $2.0 billion and $10.0 billion as "medium," and
greater than $10.0 billion as "large." To a lesser extent,
the Fund may invest in companies with large market
capitalizations. The Fund looks for established companies
with the potential for superior growth in sales and
earnings in a diversified group of industries. The Fund's
investment philosophy is basically a long-term growth
philosophy, based upon the assumption that if a company
achieves superior growth in sales and earnings, eventually
the company's stock will achieve superior performance. A
major portion of the Fund's portfolio will be invested in
common stocks of the types of companies, and in the manner,
as described above, at all times.

For further information on the Fund's principal
investment strategies and how the Fund invests, see "Fund
Investments" starting on page 5.

PRINCIPAL RISKS OF INVESTING

As with any mutual fund, the Fund cannot guarantee
that it will meet its goals or that its performance will be
positive over any period of time. The Fund's investments
change in value. Consequently, the value of your fund
shares may change. This may occur because a particular
stock market fluctuates or because of other specific
factors affecting the value of a particular investment of
the Fund. If the value of the Fund shares or the value of
the Fund's investments go down, you may lose money.

In addition, because the Fund will invest most of its
assets in the securities of small- and medium-sized
companies, the Fund may face additional risks. Small- to
medium-sized companies often have a limited market for
their securities and limited financial resources, and are
usually more affected by changes in the economy.
Securities of small- to medium-sized companies also often
fluctuate in price more than common stocks of larger
companies, such as many of those included in the Dow Jones
Industrial Average. During the history of the Fund, its
price per share has often been more volatile than the Dow
Jones Industrial Average. If the value of the Fund's
investments in small- to medium-sized companies decreases,
the value of the Fund's shares also may go down.

The Fund also faces selection risk, which is the risk
that the stocks the Fund purchases will underperform
markets or other mutual funds with similar investment
objectives and strategies.

Due to the Fund's share limitation noted on the cover
page of this prospectus, the Fund may be forced to sell
securities in its portfolio to meet redemption requests in
adverse market conditions which could have a negative
impact on the value of Fund shares. In addition, the Fund
may close to new investments (including additions to
existing accounts other than through reinvestment of
capital gain and dividend distributions) at any time. In
such event, you may not be able to acquire additional Fund
shares should you desire to do so.

In addition, although the Fund generally will invest
in the common stocks of small- and medium-sized companies,
certain investments by the Fund and certain investment
techniques the Fund may use entail other risks, as
described elsewhere in this Prospectus.

Since there are risks inherent in all investments in
securities, there is no assurance that the Fund's
objectives will be achieved. Before you invest, please
read "Investment Risks" starting on page 7.

WHO MAY WANT TO INVEST

The Fund may be appropriate if you:

Have a longer time horizon

Are willing to accept higher short-term risk

Want to diversify your portfolio

Are seeking a fund for the growth portion of an asset
allocation portfolio

Are investing with long-term goals in mind, such as
retirement or to fund a child's future education

The Fund may NOT be appropriate if you:

Are investing with a shorter time horizon in mind

Are uncomfortable with an investment that will fluctuate in
value

Are primarily looking for current income

PERFORMANCE INFORMATION

The bar chart and table shown below indicate the
risks of investing in the Fund. They show the variability
of the Fund's total return over time and how the Fund's
historical performance compares with a broad measure of
market performance.

The bar chart below shows the Fund's calendar year
total return for the last ten years.

BAR CHART PLOT POINTS
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(1.73%) 43.22% 16.78% 9.03% (3.04%) 30.18% 21.81% 33.02% 1.67% (4.09)%
</TABLE>

For the ten calendar year periods shown in the above
bar chart, the highest quarterly return was 21.86% (for the
quarter ended March 31, 1991) and the lowest quarterly
return was (18.45%) (for the quarter ended September 30,
1990).

This next table shows how the Fund's average annual
returns for the one, five and ten year periods ending on
December 31, 1999 (the Fund's most recently completed
calendar and fiscal year), compare to the returns of the
Russell 2000 Index and the Standard & Poor's Smallcap 600
Index ("S&P Smallcap 600 Index").

ONE FIVE TEN
YEAR YEARS YEARS
-------- ---------- ----------

The Fund (4.09)% 15.52% 13.58%
Russell 2000 Index 21.26% 16.69% 13.40%
S&P Smallcap 600 Index 12.40% 17.04% 13.04%

The Russell 2000 Index, which was used as the Fund's
peer group index in the Prospectus for fiscal 1998, is an
unmanaged index that represents the average performance of
a group of stocks of approximately 2000 companies and is a
widely used benchmark for small-capitalization U.S. stocks.
The S&P Smallcap 600 Index is a capitalization-weighted
index that measures the performance of selected U.S. stocks
with a small market capitalization. The Fund intends to
use both the Russell 2000 Index and S&P Smallcap 600 Index
as its peer group indices in performance tables in Fund
prospectuses in future years. The Fund believes that the
Russell 2000 Index in conjunction with the S&P Smallcap 600
Index is more representative of the performance of small-
and medium-capitalization companies which are the types of
companies in which the Fund primarily invests (as compared
to only the Russell 2000 Index). Therefore, the Fund
believes the Russell 2000 and S&P Smallcap 600 indices
provide a more meaningful and representative basis of
comparison for Fund investors.

OF COURSE, THE FUND'S PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RETURNS.

FEES AND EXPENSES OF THE FUND

FUND INVESTORS PAY VARIOUS EXPENSES, EITHER DIRECTLY OR
INDIRECTLY. THE TABLE BELOW DESCRIBES THE FEES AND EXPENSES
THAT YOU MAY PAY IF YOU BUY AND HOLD SHARES OF THE FUND.

SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)
Maximum Sales Charge (Load) Imposed on Purchases None
Maximum Deferred Sales Charge (Load) None
Maximum Sales Charge (Load) Imposed on Reinvested
Dividends None
Redemption Fees (1)
Exchange Fee (2)

ANNUAL FUND OPERATING EXPENSES (3)
(EXPENSES THAT ARE DEDUCED FROM FUND ASSETS)
Management Fees 0.75%
Distribution [and/or Service] (12b-1) Fees None
Other Expenses .0.12%
Total Annual Fund Operating Expenses .0.87%
_________

(1) A fee of $12.00 is charged for each wire redemption.
(2) A fee of $5.00 is charged for each telephone
exchange.
(3) Annual Fund Operating Expenses are based on
expenses incurred for the fiscal year ended December 31, 1999

EXAMPLE: THIS EXAMPLE HELPS YOU COMPARE THE COST OF INVESTING
IN THE FUND WITH THE COST OF INVESTING IN OTHER
MUTUAL FUNDS.

ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
--------- --------- -------- -------

THE EXAMPLE ASSUMES THAT YOU
INVEST $10,000 IN THE FUND FOR THE
TIME PERIODS INDICATED AND THEN
REDEEM ALL OF YOUR SHARES AT THE
END OF THOSE PERIODS. THE EXAMPLE
ALSO ASSUMES THAT YOUR INVESTMENT
HAS A 5% RETURN EACH YEAR AND THAT
THE FUND'S OPERATING EXPENSES REMAIN
THE SAME. ALTHOUGH YOUR ACTUAL COSTS
MAY BE HIGHER OR LOWER, BASED ON
THESE ASSUMPTIONS, YOUR COSTS WOULD BE: $89 $278 $482 $1,073

For a further description of the fees paid to the
Fund's adviser, the Nicholas Company, Inc., see "The
Fund's Investment Adviser" on page 13.

PORTFOLIO MANAGEMENT

Mr. David O. Nicholas is Senior Vice President and the
Portfolio Manager of the Fund and is primarily responsible
for the day-to-day management of the Fund's portfolio. David
O. Nicholas is President and Chief Investment Officer of the
Adviser, and has been employed by the Adviser since 1985.
For a further discussion of Mr. David O. Nicholas' experience,
see "The Fund's Investment Adviser."

SHARE LIMITATION

The Fund is restricted in size to a maximum of 20 million shares
of common stock outstanding. A maximum of ten million shares (net of
redemptions) are available for purchase by investors and ten million
are reserved for reinvestment of capital gain and dividend
distributions.

AT SUCH TIME AS THE MAXIMUM OF TEN MILLION SHARES ARE ISSUED AND
OUTSTANDING (WITHOUT TAKING INTO ACCOUNT SHARES OUTSTANDING AS A
RESULT OF CAPITAL GAIN AND DIVIDEND DISTRIBUTIONS), THE FUND WILL
CLOSE TO ALL NEW INVESTMENTS, INCLUDING ADDITIONS TO EXISTING
ACCOUNTS, OTHER THAN THROUGH REINVESTMENT OF CAPITAL GAIN AND DIVIDEND
DISTRIBUTIONS. IN ADDITION, THE FUND MAY CLOSE TO NEW INVESTMENTS AT
ANY TIME IN THE SOLE DISCRETION OF THE FUND. However, redemptions of
shares will continue to be received. Should the number of outstanding
shares decline through redemptions, or at other appropriate times, the
officers of the Fund may, in their discretion, authorize the Fund to
reopen for further investment. Due to the limitation on its size, the
Fund may be forced to sell securities to meet redemption requests in
adverse market conditions.

The officers of the Fund have the right to restrict investments
by any single shareholder by rejecting any new or additional
subscription for shares (including exercise of the exchange privilege
with other investment companies for which Nicholas Company, Inc.
serves as investment adviser but not including reinvestment of capital
gain and dividend distributions) which would result in the aggregate
value of such shareholder's account equaling 5% or more of the total
net assets of the Fund. For the purpose of this restriction, related
accounts (as determined by the officers of the Fund in their
discretion) may be grouped together to determine an aggregate account
value.

FUND INVESTMENTS

The Fund's main goal is long-term growth (increased share value).
It strives to meet its goal by investing primarily in a diversified
portfolio of equity securities of small- and medium-sized U.S.
companies, which it believes, have growth potential.

The Fund believes a company's annual sales volume and market
capitalization (the number of shares outstanding multiplied by the per
share price) are the factors most illustrative of a company's size.
To determine company size in terms of sales volume, the Fund compares
a company's sales volume to peer companies in the company's industry.
In terms of market capitalization, the Fund uses the following
standard:

MARKET CAPITALIZATION
---------------------

Small 0 to $2.0 Billion
Medium 2.0 Billion to $10.0 Billion
Large Over $10.0 Billion

To pursue the Fund's goal it also may, to a lesser extent, invest
in companies with large capitalizations. The Fund's investment
philosophy is basically a long-term growth philosophy, based upon the
assumption that if a company achieves superior growth in sales and
earnings, eventually the company's stock will achieve superior
performance.

The Fund looks for companies with the potential for superior
growth in sales and earnings. The Fund seeks companies that it
believes are well positioned to take advantage of emerging, long-term
social and economic trends, and have ample financial resources to
sustain their growth. The Fund considers a number of factors in
assessing a company's value, including the following:

. a company's strategic position in its industry
. sales and earnings growth
. product development
. quality of management
. overall business prospects
. a company's price to earnings ratio (including an analysis of
such ratio in relation to the company's growth rate and industry
trends)

Income is not a significant factor in selecting the Fund's
investments. The Fund does not have a pre-set asset allocation
strategy which requires that the Fund maintain a specific percentage
of its assets in equity-related securities (i.e., stocks) and income-
related securities (i.e., bonds). In addition, there is no minimum
percentage of the Fund's assets which must be invested in the
securities of companies in any particular industry or group of
industries. The Fund may not invest more than 5% of its total net
assets in the securities of any one issuer, and not more than 25% of
the value of the Fund's total net assets may be concentrated in
companies in any particular industry or group of related industries.
In addition, the Fund may not hold more than 10% of the voting
securities of any one company.

The Fund may hold an investment for any length of time, and will
buy or sell securities whenever the Fund sees an appropriate
opportunity. It does not buy stocks with a view toward a quick sale
or to obtain short-term trading profits (defined as profits on assets
held less than twelve months). The Fund may reduce or sell
investments in companies if there is an actual or perceived
deterioration in the fundamentals of a company (including the
company's financial condition or performance, management-related
problems, product-line or service-line issues, or industry problems).
The Fund also may reduce or sell investments in companies if a
company's market capitalization grows to a point that it is clearly no
longer a small- or medium-capitalization stock or if a company's stock
price appreciates excessively in relation to its fundamental
prospects. Investments in companies also may be sold if they fail to
realize their growth potential or if there are other more attractive
opportunities elsewhere.

The Fund expects that a major portion of its portfolio will be
invested in common stocks of the types of companies, and in the
mannerpreviously described. However, the Fund also may invest in the
securities of unseasoned companies (companies with a record of less
than three years of continuous operation) (but in no event in an
aggregate amount in excess of 15% of the Fund's total assets), debt
securities and preferred stock convertible into common stock,
securities of other investment companies (up to 10% of the Fund's
total assets) and securities offered in private placements. The Fund
also may invest in certain higher-risk securities and engage in other
investment practices.

Although the Fund's primary investment strategy is to achieve
long-term growth, for liquidity or flexibility, the Fund also may
invest in cash, investment grade and non-investment grade fixed income
securities and repurchase agreements. Cash and cash equivalent
securities will be retained by the Fund in an amount sufficient to
provide moderate liquid reserves so that the Fund has sufficient cash
to meet shareholder redemption requests and other operating expenses.

As a temporary defensive tactic because of adverse market,
economic, political or other conditions, the Fund also may invest in
cash, investment grade and non-investment grade fixed income
securities and repurchase agreements. During any period in which the
Fund maintains such a temporary defensive tactic, it may not achieve
its investment.

INVESTMENT RESTRICTIONS WHICH MAY BE CHANGED WITHOUT SHAREHOLDER
APPROVAL

The Fund's Board of Directors has adopted the following
investment restrictions which may be changed by the Board without
shareholder approval:

Not more than 15% of the its total assets may be invested 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)

No investments in interests in oil, gas or other mineral
exploration programs are permitted (but investments in securities of
companies engaged in oil, gas or mineral activities are permitted)

No investments in puts, calls, straddles, spreads or any
combinations thereof are permitted

No investments in securities of other open-end investment
companies are permitted

The Board will give advance notice to shareholders of any change to
these investment restrictions by filing with the SEC an amended
Statement of Additional Information.

All percentage limitations discussed in the "Fund Investments"
section apply on the date of investment by the Fund. Thus, if an
investment satisfies a percentage restriction when it is made, no
violation of that restriction occurs due to changes afterwards in the
market value of the investment or the total assets of the Fund.

The Fund may use many different investment strategies in seeking
its investment objectives, and it has certain investment restrictions.
These strategies and certain of the restrictions and policies
governing the Fund's investments are explained in detail in the Fund's
Statement of Additional Information, which is incorporated by
reference herein. If you would like to learn more about how the Fund
may invest, you should request a copy of the Statement of Additional
Information. To learn how to obtain a copy of the Statement of
Additional Information, see the back cover page of this Prospectus.

INVESTMENT RISKS

THIS SECTION CONTAINS A SUMMARY DESCRIPTION OF THE PRINCIPAL
RISKS OF INVESTING IN THE FUND. AS WITH ANY MUTUAL FUND, THERE IS NO
GUARANTEE THE FUND WILL MEET ITS GOALS OR THAT YOU WON'T LOSE MONEY ON
YOUR INVESTMENT. THERE IS NO GUARANTEE THAT THE FUND'S PERFORMANCE
WILL BE POSITIVE OVER ANY PERIOD OF TIME.

Because of the following risks, you could lose money on your
investment in the Fund over the short- or long-term:

MARKET RISK. The value of the Fund's investments, and therefore,
the value of your Fund shares, may go up or down. Value changes in
the Fund's investments and consequently, your Fund shares may occur
because a particular stock market fluctuates. Stock markets tend to
run in cycles, with periods when stock prices generally go up, known
as "bull markets," and periods when stock prices generally go down,
referred to as "bear markets." Stock prices in general may decline
over short or extended periods. Thus, there is a possibility that the
value of the Fund's investments will decrease because of declines in
the stock market, regardless of the success or failure of the
operations of the Fund's portfolio companies. At other times, there
are specific factors that may adversely affect the value of a
particular investment of the Fund, which in turn may reduce the value
of the Fund's investments, and consequently, your Fund shares.

PORTFOLIO-SPECIFIC RISK. Because the Fund invests most of its
assets in the securities of small- and medium-sized companies, the
Fund may be subject to additional risks. Small- to medium-sized
companies often have a limited market for their securities and limited
financial resources, and are usually more affected by changes in the
economy. Securities of small- to medium-sized companies also often
fluctuate in price more than common stocks of larger 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 than the Dow Jones Industrial Average. If
the value of the Fund's investments in small- to medium-sized
companies decreases, the value of the Fund's shares also may go down.

SELECTION RISK. The Fund also is subject to selection risk,
which is the risk that the stocks the Fund's adviser selects will
underperform the markets or other mutual funds with similar investment
objectives and strategies.

RISKS RELATED TO THE FUND'S SHARE LIMITATION. The Fund is
restricted in size to ten million shares (without taking into account
shares outstanding as a result of capital gain and dividend
distributions). As a result, at times the Fund may be closed to new
investments, including additions to existing accounts, other than
through reinvestment of capital gain and dividend distributions. In
such event, you may not be able to acquire additional Fund shares
should you desire to do so. However, even if the Fund is closed to
new investments, redemptions of shares will continue to be received.
Due to the limitation on size, the Fund may be forced to sell
securities to meet redemption requests in adverse market conditions
which could have a negative impact on the value of your Fund shares.

RISKS RELATED TO CERTAIN OTHER PORTFOLIO INVESTMENTS AND
STRATEGIES. The Fund may use other investment strategies. These
strategies and the associated non-principal risks are described in
further detail in the Fund's Statement of Additional Information which
is incorporated by reference herein.

In view of the risks inherent in all investments in securities,
there is no assurance that the Fund's objectives will be achieved.

FINANCIAL HIGHLIGHTS

THE FOLLOWING FINANCIAL HIGHLIGHTS TABLE HELPS YOU UNDERSTAND THE
FUND'S FINANCIAL PERFORMANCE FOR THE PAST FIVE FISCAL YEARS ENDED
DECEMBER 31, 1999. CERTAIN INFORMATION REFLECTS FINANCIAL RESULTS FOR
A SINGLE FUND SHARE. THE TOTAL RETURNS IN THE TABLE REPRESENT THE
RATE THAT AN INVESTOR WOULD HAVE EARNED (OR LOST) ON AN INVESTMENT IN
THE FUND (ASSUMING REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS).
THE TABLE HAS BEEN AUDITED BY ARTHUR ANDERSEN LLP, INDEPENDENT PUBLIC
ACCOUNTANTS, WHOSE REPORT THEREON IS INCLUDED IN THE FUND'S ANNUAL
REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999. THE TABLE SHOULD
BE READ IN CONJUNCTION WITH THE FINANCIAL STATEMENTS AND RELATED NOTES
INCLUDED IN THE FUND'S ANNUAL REPORT, WHICH ARE INCORPORATED BY
REFERENCE INTO THE STATEMENT OF ADDITIONAL INFORMATION AND WHICH MAY
BE OBTAINED WITHOUT CHARGE BY CALLING OR WRITING THE FUND.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
---------------------------------------------

<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995

NET ASSET VALUE, BEGINNING
OF YEAR $24.20 $25.07 $20.74 $19.22 $17.09
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .05 .01 .00* .01 .08
Net gains (losses) on
securities (realized and
unrealized) (1.05) .38 6.82 4.14 5.07

Total from investment
operations (1.00) .39 6.82 4.15 5.15

LESS DISTRIBUTIONS:
From net investment income (.05) (.01) (.00)* (.01) (.08)
From capital gains (.54) (1.25) (2.49) (2.62) (2.94)
In excess of book realized
gains -- (.00)** -- -- --
Total distributions (.59) (1.26) (2.49) (2.63) (3.02)

NET ASSET VALUE, END
OF YEAR $22.61 $24.20 $25.07 $20.74 $19.22

TOTAL RETURN (4.09)% 1.67% 33.02% 21.81% 30.18%

RATIOS/SUPPLEMENTAL DATA:
Net assets, end of
year (millions) $278.8 $367.2 $328.0 $232.8 $169.6
Ratio of expenses to average
net assets .87% .85% .86% .86% .90%
Ratio of net investment income
to average net assets .21% .06% .01% .06% .38%
Portfolio Turnover Rate 36.01% 30.06% 37.05% 32.31% 35.77%
</TABLE>

* The amount rounds to $0.00, actual amount $0.0029.
** The amount rounds to $0.00, actual amount $0.0020.

PLEASE CONSIDER THE PERFORMANCE INFORMATION ABOVE IN LIGHT OF THE
FUND'S INVESTMENT OBJECTIVES AND POLICIES, AND MARKET CONDITIONS
DURING THE REPORTED TIME PERIODS. AGAIN, YOU MUST REMEMBER THAT
HISTORICAL PERFORMANCE DOES NOT NECESSARILY INDICATE WHAT WILL HAPPEN
IN THE FUTURE. THE VALUE OF YOUR FUND SHARES MAY GO UP AND DOWN.

MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE

The Fund's primary objective is long-term growth. In an effort
to achieve this objective, the Adviser generally invests in common
stocks of small- and medium-sized companies having growth potential.
Individual stock selection is the focal point of the Adviser's equity
philosophy. The Adviser's efforts are directed toward purchasing
stocks of fundamentally sound companies at reasonable prices. It also
is 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 ended fiscal 1999 with a net asset value per share of
$22.61, a total return of (4.09)% and approximately $279 million in
total net assets. At December 31, 1999, the Fund's portfolio
consisted of equity holdings in 51 companies, representing 98.73% of
the Fund's total net assets and short-term investments representing
0.43% of the Fund's total net assets. The Fund's performance in 1999
was driven primarily by individual holdings in health care companies,
banks and diversified financials and media companies. The Fund's
performance was bolstered by companies in the media and entertainment
industry, specifically Dover Downs Entertainment, and in the
technology services industry including Asia Satellite
Telecommunications and ITC/\DeltaCom, Inc. The Fund's performance was
adversely affected by health care and bank and financial stocks, such
as PSS World Medical, Inc., Res-Care Inc. and National City
Bancorporation. While the Fund had approximately 14% of its net
assets invested in companies in the technology sector (both products
and services) at the beginning of fiscal 1999 (and approximately
22.83% at December 31, 1999), the market value of these companies
which had strong 1999 earnings and core fundamentals did not increase
as significantly as other more speculative small-cap technology
issues, including Internet IPO's.

In terms of overall portfolio mix, at December 31, 1999, the Fund
held significant positions in technology services (17.07% of the
Fund's total net assets at December 31, 1999); health care product and
service companies (14.53% and 13.43%, respectively); media and
entertainment companies (10.77%); and banks and diversified
financials (9.84%). During 1999, the Fund significantly increased its
relative percentage holdings intechnology services companies,
technology products companies and media and entertainment companies,
and modestly increased its relative percentage holdings in consumer
cyclicals, banks and financials and insurance companies. In addition,
the Fund significantly decreased its relative percentage holdings in
health care service companies and modestly decreased its relative
percentage holdings in real estate.

The Fund's 12-month return of (4.09)% for fiscal 1999 compared to
returns of 21.26% for the Russell 2000 Index and 12.40% for the
Standard & Poor's Smallcap 600 Index ("S&P Smallcap 600 Index"). The
strong performance of these indices was primarily attributable to the
excellent short-term performance of companies focused on technology
and telecommunications ("new economy stocks"). The market for
traditional manufacturing and industrial companies ("old economy
stocks") was weak relative to the market for these new economy
(digital revolution) stocks. The divergence of performance between
old economy and new economy stocks in 1999 is evident from the
divergence of performance between the Russell 2000 Growth Index and
the Russell 2000 Value Index. The Russell 2000 Growth Index returned
43.09% compared to the Russell 2000 Value Index which declined 1.48%
in 1999. The Russell 2000 Growth Index contains many new economy
stocks whereas the Russell 2000 Value Index is concentrated in old
economy stocks. Due to its portfolio composition (primarily non-
speculative small- and medium-capitalization companies, with a modest
emphasis on the technology sector), the Fund performed poorly relative
to the Russell 2000 Index and the S&P Smallcap 600 Index as well as
other mutual funds which were more focused on small-cap speculative
and technology driven investments.

The Fund will continue to follow its conservative investment
philosophy of investing for a full market cycle in order to limit the
potential downside risk. In addition, the Fund intends to make
prudent investments in those companies it believes have fundamentals
which will benefit from the growth of the new economy. Although this
approach may hold back performance if the market continues to focus on
speculative issues, such as IPO's and Internet-related stocks, the
Fund will maintain its investment approach to balance risk and return.

Set forth below is a line graph showing 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 fiscal
year, to the same investment over the same periods in the two
different comparative indices. The graph includes the Russell 2000
Index and the S&P Smallcap 600 Index. The comparative index used in
the performance graph which appeared in the Fund's Prospectus, dated
April 30, 1999 included only the Russell 2000 Index. The Fund intends
to use the Russell 2000 and S&P Smallcap 600 indices in its
performance graphs in Fund prospectuses in future years. The Fund
believes the Russell 2000 Index in conjunction with the S&P Smallcap
600 Index is more representative of the performance of small- and
medium-capitalization companies which are the types of companies in
which the Fund primarily invests (as compared to only the Russell 2000
Index). Therefore, the Fund believes the Russell 2000 and S&P
Smallcap 600 indices provide a more meaningful and representative
basis of comparison for Fund investors.

[Plot Points]

[Plot Points]
<TABLE>
<CAPTION>
Nicholas Limited Edition, Inc. Russell 2000 Index S&P Smallcap 600 Index
------------------------------ ------------------ ----------------------
<S> <C> <C> <C>
December 31, 1989 $ 10,000 $ 10,000 $ 10,000

December 31, 1990 9,827 8,049 7,631

December 31, 1991 14,074 11,756 11,331

December 31, 1992 16,436 19,920 13,715

December 31, 1993 17,920 16,552 16,292

December 31, 1994 17,375 16,251 15,515

December 31, 1995 22,619 20,872 20,162

December 31, 1996 27,552 24,314 24,459

December 31, 1997 36,650 29,751 30,715

December 31, 1998 37,262 28,992 30,313

December 31, 1999 35,738 35,156 34,072

</TABLE>

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

<TABLE>
<CAPTION>
ONE YEAR FIVE YEARS TEN YEARS
ENDED ENDED ENDED
DECEMBER 31, 1999 DECEMBER 31, 1999 DECEMBER 31, 1999
---------------------------------------------------------
<S> <C> <C> <C>
Average Annual Total Return (4.09)% 15.52% 13.58%

</TABLE>

Past performance is not predicative of future performance.

THE FUND'S INVESTMENT ADVISER

The Adviser is the investment adviser to five other mutual funds
and to approximately 25 institutions and individuals with substantial
investment portfolios. The additional mutual funds it advises are:
Nicholas Fund, Inc., Nicholas Income Fund, Inc., Nicholas II, Inc.,
Nicholas Money Market Fund, Inc. and Nicholas Equity Income Fund, Inc.
As of December 31, 1999, the Adviser had approximately $7 billion in
assets under management.

The annual fee paid to the Adviser is paid monthly to the Adviser
and is based on the average net asset value of the Fund, as determined
by the valuations made at the close of each business day of the month.
The annual fee is three-fourths of one percent (0.75 of 1%) of the
average net asset value of the Fund.

The Fund pays all of its operating expenses. Operating expenses
include, but are not limited to fees paid for attendance at Board
meetings to directors who are not interested persons of the Adviser or
officers or employees of the Fund, salaries of administrative and
clerical personnel, association membership dues, auditing and
accounting services, legal fees and expenses, printing, fees and
expenses of any custodian or trustee having custody of Fund assets,
postage, 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, and certain other costs and costs related to
the aforementioned items.

David O. Nicholas is the Portfolio Manager of the Fund and is
primarily responsible for the day-to-day management of the Fund's
portfolio. He has been Portfolio Manager for, and primarily
responsible for the day-to-day management of, the portfolios of the
Fund and Nicholas II, Inc. since March 1993. He also has been Co-
Portfolio Manager of Nicholas Fund, Inc. since November 1996.

PRICING OF FUND SHARES

When you buy shares of the Fund, the price per share you pay is
the net asset value ("NAV") of the Fund. The NAV of the Fund is
determined by dividing the total value in U.S. dollars of the Fund's
total net assets 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 the total assets of the Fund. The NAV is
determined as of the close of trading on the New York Stock Exchange
("NYSE") on each day the NYSE is open for unrestricted trading.

PURCHASE OF FUND SHARES

MINIMUM To Open An Account............. $2,000
INVESTMENTS To Add To An Account........... $100
[ICON] Minimum Balance................ $2,000

The Fund's Automatic Investment Plan has a
minimum monthly investment of $50. Due to fixed
expenses incurred by the Fund in maintaining
individual accounts, the Fund reserves the right
to redeem accounts that fall below the $2,000
minimum investment required due to shareholder
redemption (but not solely due 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 minimum.

APPLICATION You may apply to purchase shares of the Fund
INFORMATION by submitting an application to Nicholas Limited
[ICON] Edition, Inc., c/o Firstar Mutual Fund Services, LLC
("Firstar"), P.0. Box 2944, Milwaukee, Wisconsin
53201-2944. See the back cover page of this
Prospectus for information on how to contact the
Fund. The Fund also has available an Automatic
Investment Plan for shareholders. You should
contact the Fund for additional information.

When you make a purchase, your purchase price
per share will be the net asset value ("NAV") next
determined after the time the Fund receives your
application in proper order. The NAV is
calculated once a day based on the closing market
price for each security held in the Fund's
portfolio. The determination of NAV for a
particular day is applicable to all purchase
applications received in proper order by the close
of trading on the NYSE on that day (usually 4:00
p.m., New York time).

Applications to purchase Fund shares received in proper
order on a day the NYSE is open for trading, prior to the
close of trading on that day, will be based on the NAV as
of the close of trading on that day.

Applications to purchase Fund shares received in proper
order after the close of trading on the NYSE will be based
on the NAV as determined as of the close of trading on the
next day the NYSE is open.

Purchase of shares will be made in full and
fractional shares computed to three decimal
places.

OVERNIGHT You should be aware that deposit in the U.S.
mail or with other independent delivery services,
or receipt at Firstar's Post Office Box, of purchase
applications does not constitute receipt by Firstar
or the Fund. Do not mail letters by overnight courier
to the Post Office Box address. Overnight courier
delivery should be sent to Firstar Mutual Fund
Services, LLC, Third Floor, 615 East Michigan
Street, Milwaukee, Wisconsin 53202.

WIRE PAYMENTS You also may purchase Fund shares via the Federal
[ICON] Reserve wire system. If a wire purchase is to be an
initial purchase, please call Firstar (414-276-0535
or 800-544-6547) with the appropriate account information
prior to sending the wire. Firstar will provide you with
a confirmation number for any wire purchase, which
will ensure the prompt and accurate handling of
funds. To purchase shares of the Fund by federal
wire transfer, instruct your bank to use the
following instructions:

Wire To: Firstar Bank , N.A.
ABA 075000022

Credit: Firstar Mutual Fund Services, LLC
Account 112-952-137

Further Credit: Nicholas Limited Edition, Inc.
(shareholder account number)
(shareholder registration)

The Fund and its transfer agent are
not responsible for the consequences of delays
resulting from the banking or Federal Reserve wire
system, or from incomplete wiring instructions.

CERTIFICATES The Fund won't issue certificates representing Fund
[ICON] shares unless the shareholder specifically requests
certificates in writing. Signature guarantees may
be required. Certificates are mailed to
requesting shareholders approximately two weeks
after receipt of the request by the Fund. The Fund
won't issue certificates for fractional shares
even if requested. Where certificates are not
requested, the Fund's transfer agent, Firstar,
will credit the shareholder's account with the
number of shares purchased. Written confirmations
are issued for all purchases of Fund shares.

THIRD PARTY USE OF A PROCESSING INTERMEDIARY TO PURCHASE FUND
PURCHASES SHARES.
[ICON] You can purchase shares of the Fund through certain
broker-dealers, financial institutions or other service
providers ("Processing Intermediaries"). If you do, the
Processing Intermediary, rather than you, may be the
shareholder of record. Processing Intermediaries
may use procedures and impose restrictions in
addition to or different from those applicable to
shareholders who invest in the Fund directly. You
should read the program materials provided by the
Processing Intermediary in conjunction with this
Prospectus before you invest in the Fund this way.

Processing Intermediaries may charge
fees or other charges for the services they
provide to their customers. Such charges may vary
among Processing Intermediaries, but in all cases
will be retained by the Processing Intermediary
and not remitted to the Fund or the Adviser.

The Fund also may enter into an
arrangement with some Processing Intermediaries
which authorizes them to process purchase orders
on behalf of the Fund on an expedited basis (an
"Authorized Agent"). Receipt of a purchase order
by an Authorized Agent will be deemed to be
received by the Fund for purposes of determining
the NAV of the Fund shares to be purchased. If
you place a purchase order through an Authorized
Agent, you will pay the Fund's NAV next computed
after the receipt by the Authorized Agent of such
purchase order, plus any applicable transaction
charge imposed by the Authorized Agent.

Of course, you do not have to use the
services of a Processing Intermediary, or pay the
fees that may be charged for such services. You
can invest directly with the Fund without a sales
charge.

REDEMPTION OF FUND SHARES

REDEMPTION You may redeem all or part of your Fund shares
PRICE by any of the methods described below. All redemptions
[ICON] will be processed immediately upon receipt and written
confirmations will be issued for all redemptions of Fund
shares. The redemption price will be the Fund's NAV next
computed after the time of receipt by Firstar (or
by an Authorized Agent of the Fund) of the
certificate(s), or written request in the proper
order as described below, or pursuant to proper
telephone instructions as described below.

Requests for redemption of Fund shares received in proper
order on a day the NYSE is open for trading, prior to the
close of trading on that day, will be based on the NAV as
of the close of trading on that day.

Requests for redemption of Fund shares received in proper
order after the close of trading on the NYSE will be based
on the NAV as determined as of the closing of trading on
the next day the NYSE is open.

THE FUND WILL RETURN AND NOT PROCESS
REDEMPTION REQUESTS THAT CONTAIN RESTRICTIONS AS
TO THE TIME OR DATE REDEMPTIONS ARE TO BE
EFFECTED.

If any of the shares you want redeemed
were purchased recently by personal or certified
check, the Fund reserves the right to hold payment
up to 15 days or until notified that investments
made by check have been collected, at which time
the redemption request will be processed and
payment made.

REDEMPTIONS If you redeem in writing, be sure that the
BY MAIL redemption request is signed by each shareholder in the
[ICON] exact manner as the Fund account is registered and
include the redemption amount and the shareholder account
number.

If you have certificates for your shares, you may redeem by
delivering to the Fund, c/o Firstar Mutual Fund Services,
LLC, P.O. Box 2944, Milwaukee, Wisconsin 53201-2944, the
certificate(s) for the full shares. The certificate(s)
must be properly endorsed or accompanied by an instrument
of transfer, in either case with signatures guaranteed by
an eligible "guarantor institution," which is a bank, a
savings and loan association, a credit union, or a member
firm of a national securities exchange. A notary public
is not an acceptable guarantor.

If you don't have certificates for your shares, you may
redeem by delivering an original signed written request for
redemption addressed to Nicholas Limited Edition, Inc., c/o
Firstar Mutual Fund Services, LLC, P.O. Box 2944,
Milwaukee, Wisconsin 53201-2944. If the account
registration is individual, joint tenants, sole
proprietorship, custodial (Uniform Transfer to Minors Act),
or general partners, the written request must be signed
exactly as the account is registered. If the account is
owned jointly, all owners must sign.

YOU MAY NOT FAX YOUR REDEMPTION REQUEST.

The Fund may require additional
supporting documents for written redemptions made
by corporations, executors, administrators,
trustees and guardians. Specifically, 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 have a copy of the title and signature
page of the trust agreement on file or must be
accompanied by the trust agreement and signed by
the trustee(s).

IF YOU ARE UNCERTAIN ABOUT WHAT
DOCUMENTS OR INSTRUCTIONS ARE NECESSARY IN ORDER
TO REDEEM SHARES, PLEASE WRITE OR CALL FIRSTAR
(414-276-0535 OR 800-544-6547), PRIOR TO
SUBMITTING A WRITTEN REDEMPTION REQUEST. A
WRITTEN REDEMPTION REQUEST WILL NOT BECOME
EFFECTIVE UNTIL ALL DOCUMENTS HAVE BEEN RECEIVED
IN PROPER ORDER BY FIRSTAR.

If you have an individual retirement
account ("IRA") or other retirement plan, you must
indicate on your 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.

OVERNIGHT You should be aware that deposit in
DELIVERY the mail or with other independent delivery
[ICON] services or receipt at Firstar's Post Office Box
of redemption requests does not constitute
receipt by Firstar or the Fund. Do not
mail letters by overnight courier to the Post
Office Box address. Overnight courier delivery
should be sent to Firstar Mutual Fund Services,
LLC, Third Floor, 615 East Michigan Street,
Milwaukee, Wisconsin 53202.

TELEPHONE You can redeem your shares by telephone
REDEMPTIONS unless you decline that option in writing. Telephone
[ICON] redemptions can only be made by calling Firstar
(800-544-6547 or (414-276-0535). In addition to the
account registration, you 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 NYSE (usually
4:00 p.m., New York time) to receive that day's
NAV. There will be no exceptions due to market
activity. During periods of substantial economic
or market changes, you may have difficulty making
a redemption by telephone. If you are unable to
contact Firstar by telephone, you may redeem your
shares by delivering the redemption request in
person or by mail. The maximum telephone
redemption is $50,000 per account/per business
day. The maximum telephone redemption for related
accounts is $100,000 per business day. The
minimum telephone redemption is $500 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. Neither the Fund nor
Firstar will be liable for following instructions
communicated by telephone which they reasonably
believe to be genuine. The Fund and Firstar will
employ reasonable procedures to confirm that
instructions received by telephone are genuine,
and if they do not, they may be liable for losses
due to unauthorized or fraudulent instructions.

TAX EFFECT OF For federal income tax purposes, a redemption
REDEMPTION generally is treated as a sale of the shares being
[ICON] redeemed. You may recognize capital gain or loss equal
to the difference between the redemption price and your
cost basis for the shares being redeemed. See "Dividends,
Distributions and Federal Tax Status" for further
tax information.

The Fund ordinarily pays for redeemed
shares within seven days after receipt of a
request in proper order, except as provided by the
rules of the Securities and Exchange Commission.
Redemption proceeds to be wired also ordinarily
will be wired within seven days after receipt of
the request, and normally will be wired on the
next business day after a NAV is determined. The
Fund reserves the right to hold payment up to 15
days or until notified that investments made by
check have been collected.

You may instruct Firstar to mail the
proceeds to the address of record or to directly
mail the proceeds to a pre-authorized bank
account. The proceeds also may be wired to a pre-
authorized account at a commercial bank in the
United States. Firstar 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.

SIGNATURE A signature guarantee of each owner is
GUARANTEES required to redeem shares in the following situations, for
[ICON] all size transactions:

. if you change the ownership on your account
. upon redemption of shares when certificates have
been issued for your account
. when you want the redemption proceeds sent to a
different address than is registered on the
account
. if the proceeds are to be made payable to someone
other than the account owner(s)
. any redemption transmitted by federal wire
transfer to your bank not previously set up with
the Fund
. if a change of address request has been received
by the Fund or Firstar within 15 days of a
redemption request

In addition, you must have your signature guaranteed
if you request redemption of $100,000 or more from your
account. Your redemption will not be processed until the
signature guarantee, if required, is received in
proper order. A notary public is not an
acceptable guarantor.

THIRD PARTY USE OF A PROCESSING INTERMEDIARY TO REDEEM FUND
REDEMPTIONS SHARES.
[ICON] As with the purchase of Fund shares, you may redeem
shares of the Fund through certain broker-dealers,
financial institutions and other service providers
("Processing Intermediaries"). You should read
the program materials provided by the Processing
Intermediary before you redeem your shares of the
Fund this way. Then follow those instructions and
procedures.

Processing Intermediaries may charge
fees or other charges for the services they
provide to their customers. Such charges vary
among Processing Intermediaries, but in all cases
will be retained by the Processing Intermediary
and not remitted to the Fund or the Adviser.

The Fund also may enter into an
arrangement with some Processing Intermediaries
authorizing them to process redemption requests on
behalf of the Fund on an expedited basis (an "a
sold Authorized Agent"). Receipt of a redemption
request by an Authorized Agent will be deemed to
be received by the Fund for purposes of
determining the NAV of Fund shares to be redeemed.
For redemption orders placed through an Authorized
Agent, you will receive redemption proceeds which
reflect the Fund's NAV per share next computed
after the receipt by the Authorized Agent of the
redemption order, less any redemption fees imposed
by the Authorized Agent.

Of course, You do not have to use the
services of a Processing Intermediary, or pay the
fees that may be charged for such services, unless
you hold Fund shares through a Processing
Intermediary. Then you must redeem your shares
through such Processing Intermediary. In such
event, you should contact the Processing
Intermediary for instructions on how to redeem.
Otherwise if you originally invested directly with
the Fund, you can redeem Fund shares through the
Fund without a redemption charge.

EXCHANGE BETWEEN NICHOLAS FAMILY OF FUNDS

You may exchange Fund shares for shares
of other mutual funds for which Nicholas Company,
Inc. serves as the investment adviser.

EXCHANGES Nicholas Company, Inc. also is adviser to the
[ICON] following funds which have investment objectives and
net assets as noted below:

<TABLE>
<CAPTION>
NET ASSETS AT
FUND INVESTMENT OBJECTIVE DECEMBER 31, 1999
----------------------------------------------------------------
<S> <S> <C>
Nicholas Fund, Inc. Capital appreciation $ 5,154,231,564

Nicholas II, Inc. Long-term growth $ 940,854,205

Nicholas Equity Reasonable income;
Income Fund, Inc. Moderate long-term
growth as a secondary
consideration $ 18,504,520
Nicholas Income High current income
Fund, Inc. consistent with the
preservation and
conservation of
capital value $202,774,668

Nicholas Money High level of current
Market Fund, Inc. income as as is consistent
with preserving capital and
liquidity $140,949,418
</TABLE>

If you choose to exercise the
exchange privilege, your shares will be exchanged
at their next determined NAV. If you exercise an
exchange into the Nicholas Money Market Fund, Inc.
on a day when the NYSE is open for trading but the
Federal Reserve Banks are closed, your 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 will be delayed one business day. In such
a case, the exchanged amount would be uninvested
for this one-day period.

If you are interested in exercising the exchange
privilege you must obtain the appropriate prospectus
from Nicholas Company, Inc.

An exchange constitutes a sale for federal tax
purposes and you may realize a capital gain or loss upon
the exchange, depending upon whether the NAV at the time
is more or less than your cost basis. An exchange between
the funds involving master retirement plans and IRA
accounts generally is not a taxable transaction
for federal tax purposes. See "Dividends,
Distributions and Federal Tax Status" for further
tax information.

The exchange privilege may be terminated or
modified only upon 60 days advance notice to shareholders.
You may exchange shares of the Fund for shares of other
available Nicholas mutual funds directly through Nicholas
Company, Inc. without cost by written request.

EXCHANGE If you are interested in exercising the exchange by
BY mail privilege, you may obtain the appropriate prospectus
MAIL from Nicholas Company, Inc. Signatures required are the
[ICON] same as previously explained under "Redemption of Fund
Shares."

EXCHANGE You also may exchange by telephone among all
BY Nicholas mutual funds. Only exchanges of $500.00
TELEPHONE or more will be executed using the telephone exchange
[ICON] privilege. Firstar 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 $l,000,000
per day for related accounts. You are allowed
four telephone exchanges per account during any
twelve-month period.

Procedures for exchanging Fund
shares by telephone may be modified or terminated
at any time by the Fund or Firstar. Neither the
Fund nor Firstar will be responsible for the
authenticity of exchange instructions received by
telephone. Telephone exchanges can only be made
by calling Firstar (414-276-0535 or 800-544-6547).
You will be required to provide pertinent
information regarding your account. Calls will be
recorded.

TRANSFER OF FUND SHARES

You may transfer Fund shares 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. You can obtain documents and instructions necessary to transfer
Fund shares by writing or calling Firstar (414-276-0535 or 800-544-
6547) or Nicholas Company, Inc. (414-272-6133 or 800-227-5987) prior to
submitting any transfer requests.

DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAX STATUS

The Fund intends to continue to qualify annually as a "regulated
investment company" under the Internal Revenue Code of 1986 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 annually to its
shareholders substantially all of its net investment income and net
realized capital gain in one distribution for each fiscal year.

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. The maximum tax rate on long-term
capital gains for sales of securities held greater than twelve months
is 20%. Income distributed from the Fund's net investment income and
net realized short-term capital gains are taxable to shareholders as
ordinary income, whether distributed as cash or additional shares.
Distributions generally will be made annually in December. The Fund
will provide information to shareholders concerning the character and
federal tax treatment of all dividends and distributions.

At the time of purchase of Fund shares, the Fund may have
undistributed income or capital gains included in the computation of
the NAV per share. Therefore, 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 NAV 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,
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, you must certify under
penalties of perjury that the taxpayer identification number you give
to the Fund is correct and that you are not subject to backup
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. You should consult with a tax adviser concerning the
federal, state and local tax aspects of an investment in the Fund.

DIVIDEND AND DISTRIBUTION REINVESTMENT PLAN

Unless you elect to accept cash in lieu of shares, all dividends
and capital gain distributions are automatically reinvested in
additional shares of the Fund through the Dividend and Distribution
Reinvestment Plan (the "Reinvestment Plan"). You may elect to accept
cash 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 or distribution date and are
credited to the shareholder's account. Firstar will notify you of the
number of shares purchased and the price following each reinvestment
period.

You may withdraw from or thereafter elect to participate in the
Reinvestment Plan at any time by giving written or telephonic notice
to Firstar. An election must be received by Firstar 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 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 Reinvestment Plan at any time on 30 days written notice to
participants.

SYSTEMATIC WITHDRAWAL PLAN

If you own $10,000 or more of Fund shares at the current market
value, you may open a Systematic Withdrawal Plan (the "Plan") and
receive monthly, quarterly, semiannual or annual checks for any
designated amount. Firstar reinvests all income and capital gain
dividends in shares of the Fund. You may add shares to, withdraw
shares from, or terminate the Plan, at any time. Each withdrawal may
be a taxable event to you. 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 upon written notice mailed to the shareholders.
Please contact Nicholas Company, Inc. for copies of the Plan
documents.

INDIVIDUAL RETIREMENT ACCOUNTS

Individuals who receive compensation, including earnings from self-
employment, may be able to establish a traditional IRA, a Roth IRA
and/or an Education IRA. The Fund offers prototype IRA plans for
adoption by individuals who qualify. A description of applicable
service fees and application forms are available upon request from the
Fund. The IRA documents also contain a Disclosure Statement which the
IRS requires to be furnished to individuals who are considering
adopting an IRA. It is important you obtain up-to-date information
from the Fund before opening an IRA.

Qualifying individuals who have a traditional IRA may make
deductible contributions to it. Taxation of the income and gains paid
to a traditional IRA by the Fund is deferred until distribution from
the IRA.

Qualifying individuals who maintain a Roth IRA may make non-
deductible contributions to it. However, the amounts within the Roth
IRA accumulate tax-free and qualified distributions will not be
included in a shareholder's taxable income. The contribution limit is
$2,000 annually ($4,000 for joint returns) in aggregate with
contributions to traditional IRAs. Certain income phase-outs apply.

Like the Roth IRA, qualifying individuals may make non-deductible
contributions to an Education IRA, but the investment earnings
accumulate tax-free, and distributions used for higher education
expenses are not taxable. Contribution limits are $500 per account
and certain income phase-outs apply.

As long as the aggregate IRA contributions meet the Fund's minimum
requirements of $2,000, the Fund will accept any allocation of such
contributions 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 you to consult with your personal tax adviser to determine the
deductibility of IRA contributions.

Because a retirement program involves commitments covering future
years, it is important that the investment objectives of the Fund be
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.

MASTER RETIREMENT PLAN

The Fund has available a master retirement plan for self-employed
individuals. You may contact the Fund for additional information or if
you wish to participate in the plan. Consultation with a tax adviser
regarding the tax consequences of the plan is recommended.

PROSPECTUS

APRIL 30, 2000

NICHOLAS LIMITED EDITION, INC.

FOR MORE INFORMATION ABOUT THE FUND:

The Fund's Statement of Additional Information ("SAI"), dated April
30, 2000, contains more detailed information on all aspects of Nicholas
Limited Edition, Inc., and is incorporated by reference in this
Prospectus. Additional information about the Fund also is available in
the Fund's Annual and Semiannual Report to Shareholders.

To request a free copy of the current Annual/Semiannual Report or
SAI, or to make shareholder inquiries, please write or call: Nicholas
Limited Edition, Inc., 700 North Water Street, Milwaukee, Wisconsin
53202, 800-227-5987 (toll-free). Additional information about the Fund
also can be obtained from the Fund's Internet website at
www.nicholasfunds.com.

In addition, you can review the Fund's reports and SAIs at the
Public Reference Room of the SEC in Washington, D.C. Information on
the operation of the Public Reference Room may be obtained by calling
the SEC at 800-SEC-0330. Reports and other information about the Fund
also are available on the SEC's Internet website at www.sec.gov. For a
duplicating fee, copies of such information may be obtained by writing
the Public Reference Section of the SEC, Washington, D.C. 20549-6000.

For the most current price and return information for the Fund, you
may call the Fund at 800-227-5987 (toll-free) or 414-272-6133 or check
the Fund's website at www.nicholasfunds.com. You also can find the
most current price of the Fund's shares in the business section of your
newspaper in the mutual fund section under the heading "Nicholas Group"
- - "NchLt." If you prefer to obtain this information from an on-line
computer service, you can do so by using the ticker symbol "NCLEX" or
cusip number 653738104.

INVESTMENT ADVISER
NICHOLAS COMPANY, INC.
Milwaukee, Wisconsin
414-272-6133 or 800-227-5987

TRANSFER AGENT CUSTODIAN
FIRSTAR MUTUAL FUND SERVICES, LLC FIRSTAR
INSTITUTIONAL
CUSTODY SERVICES

Milwaukee, Wisconsin Milwaukee, Wisconsin
414-276-0535 or 800-544-6547

INDEPENDENT PUBLIC ACCOUNTANTS COUNSEL
ARTHUR ANDERSEN LLP MICHAEL BEST & FRIEDRICH LLP
Milwaukee, Wisconsin Milwaukee, Wisconsin

NO LOAD - NO SALES CHARGE

Nicholas Limited Edition, Inc. s 700 North Water Street s Suite 1010 s
Milwaukee, Wisconsin 53202 s www.nicholasfunds.com

Investment Company Act File No. 811-4993

NICHOLAS LIMITED EDITION, INC.

FORM N-1A
-----------------

PART B: STATEMENT OF ADDITIONAL INFORMATION

NICHOLAS LIMITED EDITION, INC.

STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------

700 North Water Street, Suite 1010
Milwaukee, Wisconsin 53202
414-272-6133
800-227-5987

This Statement of Additional Information, which is not a
prospectus and contains information in addition to and more
detailed than that set forth in the current Prospectus of
Nicholas Limited Edition, Inc. (the "Fund"), dated April 30,
2000. It is intended to provided you with additional information
regarding the activities and operations of the Fund, and should
be read in conjunction with the Fund's current Prospectus and the
Fund's Annual Report for the fiscal year ended December 31, 1999,
which is incorporated herein by reference, as they may be revised
from time to time. The Fund's Prospectus provides the basic
information you should know before investing in the Fund.

To obtain a free copy of the Fund's Prospectus and Annual
Report, please write or call the Fund at the address and
telephone number set forth above.

NO LOAD FUND - NO SALES OR REDEMPTION CHARGE BY THE FUND

Investment Adviser
NICHOLAS COMPANY, INC.

April 30, 2000
TABLE OF CONTENTS

Page

INTRODUCTION 1
SHARE LIMITATION 1
INVESTMENT OBJECTIVES AND
INVESTMENT STRATEGIES 2
INVESTMENT RESTRICTIONS 5
INVESTMENT RISKS 6
THE FUND'S INVESTMENT ADVISER 9
MANAGEMENT - DIRECTORS, EXECUTIVE OFFICERS
AND PORTFOLIO MANAGER OF THE FUND 11
PRINCIPAL SHAREHOLDERS 14
PRICING OF FUND SHARES 14
PURCHASE OF FUND SHARES 14
REDEMPTION OF FUND SHARES 16
EXCHANGE BETWEEN NICHOLAS FAMILY OF FUNDS 20
TRANSFER OF FUND SHARES 21
DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAX STATUS 21
DIVIDEND AND DISTRIBUTION REINVESTMENT PLAN 22
SYSTEMATIC WITHDRAWAL PLAN 22
INDIVIDUAL RETIREMENT ACCOUNTS 23
MASTER RETIREMENT PLAN 23
BROKERAGE 23
PERFORMANCE DATA 25
CAPITAL STRUCTURE 26
STOCK CERTIFICATES 26
ANNUAL MEETING 26
SHAREHOLDER REPORTS 27
CUSTODIAN AND TRANSFER AGENT 27
INDEPENDENT ACCOUNTANTS AND LEGAL COUNSEL 27
FINANCIAL INFORMATION 27

INTRODUCTION

Nicholas Limited Edition, Inc. (the "Fund") was incorporated
under the laws of Maryland on January 26, 1987. The Fund is an
open-end, diversified management investment company registered
under the Investment Company Act of 1940, as amended (the "1940
Act"). This type of investment is commonly called a mutual fund.
As an open-end investment company, it obtains its assets by
continuously selling shares of its common stock, $0.01 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").

SHARE LIMITATION

The Fund will be restricted in size to a maximum of 20
million shares of common stock outstanding. A maximum of ten
million shares (net of redemptions) are available for purchase by
investors and ten million shares are reserved for reinvestment of
capital gain and dividend distributions.

AT SUCH TIME AS THE MAXIMUM OF TEN MILLION SHARES ARE ISSUED
AND OUTSTANDING (WITHOUT TAKING INTO ACCOUNT SHARES OUTSTANDING
AS A RESULT OF CAPITAL GAIN AND DIVIDEND DISTRIBUTIONS), THE FUND
WILL CLOSE TO ALL NEW INVESTMENTS, INCLUDING ADDITIONS TO
EXISTING ACCOUNTS, OTHER THAN THROUGH REINVESTMENT OF CAPITAL
GAIN AND DIVIDEND DISTRIBUTIONS. IN ADDITION, THE FUND MAY CLOSE
TO NEW INVESTMENTS AT ANY TIME IN THE SOLE DISCRETION OF THE
FUND. However, redemptions of shares will continue to be
received even if the Fund is closed. Should the number of
outstanding shares decline through redemptions, or at other
appropriate times, the officers of the Fund may, in their
discretion, authorize the Fund to reopen for further investment.
Due to the limitation on its size, the Fund may be forced to sell
securities to meet redemption requests in adverse market
conditions.

The officers of the Fund have the right to restrict
investments by any single shareholder by rejecting any new or
additional subscription for shares (including exercise of the
exchange privilege with other investment companies for which
Nicholas Company, Inc. serves as investment adviser but not
including reinvestment of capital gain and dividend
distributions) which would result in the aggregate value of such
shareholder's account equaling 5% or more of the total net assets
of the Fund. For the purpose of this restriction, related
accounts (as determined by the officers of the Fund in their
discretion) may be grouped together to determine an aggregate
account value.
INVESTMENT OBJECTIVES AND
INVESTMENT STRATEGIES

The Fund has adopted primary investment objectives, which
are fundamental policies. The section captioned "FUND
INVESTMENTS" in the Fund's Prospectus describes the principal
investment objectives and the investment policies applicable to
the Fund. Please read the Prospectus in conjunction with this
Statement of Additional Information. The Fund also has adopted
certain other investment strategies and policies which are not
fundamental and may be changed by the Board of Directors without
shareholder approval. However, any changes will be made only
upon advance notice to shareholders. Such changes may result in
the Fund having secondary investment and other policy objectives
different from the objectives which a shareholder considered
appropriate at the time of investment in the Fund. Set forth
below is additional information on the other Fund investment
strategies and permissible investments which the Fund may use in
an effort to obtain its primary objectives.

CERTAIN OTHER INVESTMENT STRATEGIES AND PORTFOLIO INVESTMENTS

From time to time, the Fund may acquire the securities of
unseasoned companies (i.e., companies which have a record of less
than three years continuous operation) and securities issued in
private placements (i.e., securities not registered for purchase
and sale by the public under the Securities Act of 1933, as
amended). These types of investments are made by the Fund when
the Adviser believes such investments offer the possibility of
capital appreciation. The Fund may not invest more than 15% of
the Fund's total assets in the securities of unseasoned
companies. In addition, the Fund may not invest more than 5% of
the Fund's net total assets in bonds, debentures or other debt
securities distributed in private placements.

From time to time, the Fund may acquire 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. These types of investments are
made by the Fund when the Adviser believes such investments offer
the possibility of appreciation in value. The Adviser intends
generally to limit the Fund's purchase of debt securities and
preferred stock to those which are rated in one of the top four
rating categories by any of the nationally recognized statistical
rating organizations ("NRSROs"), or will be unrated instruments
but deemed by the Adviser to be comparable in quality to
instruments so rated on the date of purchase. However, this
policy does not prevent the Fund from retaining a security if its
credit quality is downgraded to a non-investment grade level
after purchase.

The Fund may only enter into repurchase agreements with a
member bank of the Federal Reserve System or a primary dealer in
U.S. Government securities. Under such agreements, the Fund buys
U.S. Government securities from the bank or primary dealer and
simultaneously agrees to sell the securities back to the bank or
primary dealer at a mutually agreed upon time and price. Not
more than 20% of the Fund's total net assets, taken at market,
may be invested in repurchase agreements; provided, however, that
repurchase agreements maturing in more than seven days may not
constitute more than 5% of the Fund's total net assets, taken at
market.

The Fund may temporarily invest in investment grade and non-
investment grade fixed income securities as a temporary defensive
measure when conditions are deemed to warrant such action.
"Investment grade fixed income securities" refers to fixed income
securities ranked in one of the top four debt security rating
categories of any of the NRSROs, or unrated but deemed by the
Adviser to be comparable in quality to instruments so rated on
the date of purchase. However, this policy does not prohibit the
Fund from retaining a security if its credit quality is
downgraded to a non-investment grade level after purchase.

The Fund may make borrowings but only for temporary or
emergency purposes and then only in amounts not in excess of 5%
of the lower of cost or market value of the Fund's total net
assets.

All percentage limitations discussed in this section apply
on the date of investment by the Fund. Thus, if an investment
satisfies a percentage restriction when it is made, no violation
of that restriction occurs due to changes afterwards in the
market value of the investment or the total assets of the Fund.

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 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) investment in repurchase agreements 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 days will not constitute more than
5% of the value of 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 5% of the
value of total net assets, taken at market, of the
Fund.

The total investment of the Fund in repurchase
agreements maturing in more than seven days, when
combined with the type of investment set forth in 1(c)
above, will not exceed 5% of the value 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 and other real estate-based
securities listed on a national securities exchange or
authorized for quotation on NASDAQ, but not more than
10% in value of the Fund's total net assets will be
invested in real estate investment trusts nor will more
than 25% in value of the Fund's total net assets be
invested in the real estate industry in the aggregate.

3. The Fund may not issue senior securities in
violation of the 1940 Act. The Fund may make
borrowings but only for temporary or emergency purposes
and then only in amounts not in excess of 5% of the
lower of cost or market value of the Fund's total net
assets.

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

5. 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.

6. Not more than 5% of the total net assets of the
Fund, taken at market value, will be invested in the
securities of any one issuer (not including U.S.
Government securities).

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

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

INVESTMENT RESTRICTIONS WHICH MAY BE CHANGED WITHOUT SHAREHOLDER
APPROVAL

The Fund's Board of Directors has adopted the following
investment restrictions which may be changed by the Board without
shareholder approval:

Not more than 15% of the its total assets may be invested 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)

No investments in interests in oil, gas or other mineral
exploration programs are permitted (but investments in securities
of companies engaged in oil, gas or mineral activities are
permitted)

No investments in puts, calls, straddles, spreads or any
combinations thereof are permitted

No investments in securities of other open-end investment
companies are permitted

The Board will give advance notice to shareholders of any change
to these investment restrictions by filing with the SEC an
amended Statement of Additional Information.

All percentage limitations discussed in the "Fund
Investments" section apply on the date of investment by the Fund.
Thus, if an investment satisfies a percentage restriction when it
is made, no violation of that restriction occurs due to changes
afterwards in the market value of the investment or the total
assets of the Fund.

INVESTMENT RISKS

This section contains a summary description of the risks of
other investment strategies and related investments of the Fund
as discussed in this Statement of Additional Information. For a
description of the principal risks of investing in the Fund,
please see the "INVESTMENT RISKS" section in the Fund's
Prospectus. As with any mutual fund, there can be no guarantee
that the Fund will meet its goals or that you won't lose money
or your investment. There is no guarantee the Fund's performance
will be positive over any period of time.

OTHER RISKS RELATED TO CERTAIN PORTFOLIO INVESTMENTS AND
STRATEGIES.
- -------------------------------------------------------------

Although the Fund generally will invest in the common stocks of
small- and medium-sized companies, certain investments the Fund
may acquire and certain investment techniques the Fund may use
entail other risks:

LIQUIDITY, INFORMATION AND VALUATION RISKS OF CERTAIN
PORTFOLIO INVESTMENTS

Securities of unseasoned companies and securities
issued in private placements, which may be acquired by the
Fund from time to time, may be illiquid or volatile making
it potentially difficult or impossible to sell them at the
time and at the price the Fund would like. In addition,
important information about these types of companies,
securities or the markets in which they trade, may be
inaccurate or unavailable. Consequently, it may be
difficult to value accurately these securities as well.

DEBT SECURITIES AND PREFERRED STOCK

Debt securities, such as bonds, involve credit risk,
which is the risk that the borrower will not make timely
payments of principal and interest. Debt securities also
are subject to interest rate risk, which is the risk that
the value of the security may fall when interest rates rise.
In general, the market price of debt securities with longer
maturities will go up or down more in response to changes in
interest rates than shorter term securities. The Fund may
invest in both short-term and long-term securities. The
Fund is not limited as to the maturities of the debt
securities in which it invests. The value of preferred
stock and debt securities convertible into common stock
generally will be affected by its stated dividend rate or
interest rate, as applicable, and the value of the
underlying common stock. As a result of the conversion
feature, the dividend rate or interest rate on convertible
preferred stock or convertible debt securities generally is
less than would be the case if the security were not
convertible. Therefore, the value of convertible preferred
stock and debt securities will be affected by the factors
that affect both equity securities (such as stock market
movements generally) and debt securities (such as interest
rates). Some convertible securities might require the Fund
to sell the securities back to the issuer or a third party
at a time that is disadvantageous to the Fund.

FIXED INCOME SECURITIES

The Fund's investments in investment grade
and non-investment grade fixed income securities may carry
some risk. Investment grade fixed income securities
described in the fourth category of the NRSROs possess
speculative characteristics. In addition, non-investment
grade securities tend to reflect individual corporate
developments to a greater extent, tend to be more sensitive
to economic conditions and tend to have a weaker capacity to
pay interest and repay principal than higher rated
securities. Because the market for lower rated securities
may be thinner and less active than for higher rated
securities, there may be market price volatility for these
securities and limited liquidity in the resale market.
Factors adversely impacting the market value of the Fund
investments in fixed income securities, may also adversely
impact the Fund's net asset value.

REPURCHASE AGREEMENTS

While the underlying obligation of a repurchase
agreement purchased by the Fund is a U.S. Government
security, the obligation of the seller to repurchase the
security is not guaranteed by the U.S. Government. Delays
or losses could result if the bank or primary dealer
defaults on its repurchase obligation or becomes insolvent,
which could adversely impact the Fund's net asset value.

BORROWINGS

The use of borrowings can increase the Fund's exposure
to market risk. If the Fund borrows money to make more
investments than it otherwise could or to meet redemptions,
the Fund's share price may be subject to greater fluctuation
until the borrowing is paid off.

In view of the risks inherent in all investments in
securities, there is no assurance that the Fund's objectives will
be achieved.

THE FUND'S INVESTMENT ADVISER

Nicholas Company, Inc., located at 700 North Water Street,
Suite 1010, Milwaukee, Wisconsin 53202, is the Fund's investment
adviser. The Adviser furnishes the Fund with continuous
investment service and is responsible for overall management of
the Fund's business affairs, subject to supervision of the Fund's
Board of Directors. The Adviser is the investment adviser to
five other mutual funds and approximately 25 institutions and
individuals with substantial investment portfolios. The other
funds for which the Adviser serves as investment adviser are
Nicholas Fund, Inc., Nicholas II, Inc., Nicholas Money Market
Fund, Inc., Nicholas Equity Income Fund, Inc. and Nicholas Income
Fund, Inc., with primary investment objectives and net assets as
set forth below.

<TABLE>
<CAPTION>
NET ASSETS AS OF
FUND PRINCIPAL INVESTMENT OBJECTIVE DECEMBER 31, 1999
- ---- ------------------------------ -----------------
<S> <S> <C>

Nicholas Fund, Inc. Capital Appreciation $5,154,231,564
Nicholas II, Inc. Long-Term Growth $940,854,205
Nicholas Equity Income Fund, Inc. Reasonable Income $18,504,520
Nicholas Income Fund, Inc. High Current Income $202,774,668
Nicholas Money Market Fund, Inc. Current Income $140,949,418
</TABLE>

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 three-fourths of one percent (.75 of 1%) of the
average net asset value of the Fund. For the fiscal year ended
December 31, 1999, total net assets of the Fund were
$278,796,360.

Under an Investment Advisory Agreement with the Fund, the
Adviser, at its own expense and without reimbursement from the
Fund, furnishes the Fund with office space, office facilities,
executive officers and executive expenses (such as health
insurance premiums for executive officers). The Adviser also
pays all sales and promotional expenses of the Fund, other than
expenses incurred in complying with laws regulating the issue or
sale of securities. The Fund pays for all of its operating
expenses, including, but not limited to, the costs of preparing
and printing its registration statements required under the
Securities Act and the 1940 Act, 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 cost 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 as
operating expenses which are paid for by the Fund are fees of
directors who are not interested persons of the Adviser or
officers or employees of the Fund, salaries of administrative and
clerical personnel, association membership dues, auditing,
accounting and tax consulting 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.

During the fiscal years ended December 31, 1999, 1998 and
1997, the Fund paid the Adviser an aggregate of $2,321,160,
$2,659,090 and $2,039,866, respectively, in fees.

The Investment Advisory Agreement with the Adviser is not
assignable and may be terminated by either party, without
penalty, on 60 days notice. Otherwise, the Investment Advisory
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 Investment Advisory Agreement or "interested persons" of
the Adviser or of the Fund, as defined in the 1940 Act, cast in
person at a meeting called for the purpose of voting for such
approval.

Albert O. Nicholas is President and a Director of the Fund,
is Chief Executive Officer and Chairman of the Board of the
Adviser, and is a controlling person of the Adviser through his
ownership of 91% of the outstanding voting securities of the
Adviser. Thomas J. Saeger, Executive Vice President, Secretary
and a Director 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.
David O. Nicholas, Senior Vice President and Portfolio Manager of
the Fund, is President and Chief Investment Officer and a
Director of the Adviser. Lynn S. Nicholas is a Senior Vice
President of the Fund and of the Adviser. David O. Nicholas and
Lynn S. Nicholas are the son and daughter, respectively, of
Albert O. Nicholas. Jeffrey T. May is a Senior Vice President of
the Fund and a Senior Vice President and Treasurer of the
Adviser. Candace L. Lesak is a Vice President of the Fund and an
employee of the Adviser. Mary C. Gosewehr is Treasurer of the
Fund and is an employee of the Adviser. Mark J. Giese is a Vice
President of the Fund and is a Vice President of the Adviser.
Tracy C. Eberlein is an Assistant Vice President of the Fund and
an employee of the Adviser. David E. Leichtfuss, 100 E.
Wisconsin Avenue, Milwaukee, Wisconsin, is a Director and the
Secretary of the Adviser. Mr. Leichtfuss is a partner in the law
firm of Michael Best & Friedrich LLP, Milwaukee, Wisconsin, legal
counsel to both the Fund and the Adviser. Daniel J. Nicholas,
2618 Harlem Boulevard, Rockford, Illinois, is Director Emeritus
of the Adviser. Mr. Daniel J. Nicholas, a brother of Albert O.
Nicholas, is a private investor.

MANAGEMENT - DIRECTORS, EXECUTIVE OFFICERS
AND PORTFOLIO MANAGER 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 Board of Directors governs the Fund and is
responsible for protecting the interests of shareholders. The
Board of Directors consists of individuals who meet periodically
throughout the year to oversee the Fund's activities and review
the Fund's performance. The following table sets forth the
pertinent information about the Fund's officers and directors as
of December 31, 1999:

<TABLE>
<CAPTION>
NAME, AGE AND POSITIONS HELD PRINCIPAL OCCUPATIONS
ADDRESS WITH FUND DURING PAST FIVE YEARS
- ------------------ ----------------- ------------------------
<S> <S> <S>
* Albert O. Nicholas, 68 President and Director Chief Executive Officer
700 North Water Street and Chairman of the
Milwaukee, WI 53202 Board, Nicholas Company,
Inc., the Adviser to the
Fund. He has been
Portfolio Manager (or Co-
Portfolio Manager, in
the case of Nicholas
Fund, Inc., since
November 1996) for, and
primarily responsible
for the day-to-day
management of, the
portfolios of Nicholas
Fund, Inc., Nicholas
Income Fund, Inc. and
Nicholas Equity Income
Fund, Inc. since the
Adviser has served as
investment adviser for
such funds. He is a
Chartered Financial
Analyst.

Melvin L. Schultz, 66 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.

* Thomas J. Saeger, 55 Executive Vice Executive Vice President
700 North Water Street President, and Assistant Secretary,
Milwaukee, WI 53202 Secretary and Nicholas Company, Inc.,
Director the Adviser to the Fund,
and employed by the
Adviser since 1969. He
is a Certified Public
Accountant.

David L. Johnson, 57 Executive Vice Executive Vice
700 North Water Street President President, Nicholas
Milwaukee, WI 53202 Company, Inc., the
Adviser to the Fund, and
employed by the Adviser
since 1980. He is a
Chartered Financial
Analyst.

NAME, AGE AND POSITIONS HELD PRINCIPAL OCCUPATIONS
ADDRESS WITH FUND DURING PAST FIVE YEARS
- ------------------ ----------------- ------------------------
<S> <S> <S>
David O. Nicholas, 38 Senior Vice President, Chief
700 North Water Street President and Investment Officer and
Milwaukee, WI 53202 Portfolio Manager Director, Nicholas
Company, Inc., the
Adviser to the Fund and
employed by the Adviser
since December 1985. He
has been Portfolio
Manager for, and
primarily responsible
for the day-to-day
management of, the
portfolios of Nicholas
II, Inc. and Nicholas
Limited Edition, Inc.
since March 1993. He
also has been Co-
Portfolio Manager of
Nicholas Fund, Inc.
since November 1996. He
is a Chartered Financial
Analyst.

Lynn S.Nicholas, 43 Senior Vice President Senior Vice President,
700 North Water Street Nicholas Company, Inc.,
Milwaukee, WI 53202 the Adviser to the Fund,
and employed by the
Adviser since September
1983. She is a Chartered
Financial Analyst.

Jeffrey T. May,43 Senior Vice President Senior Vice President
700 north Water Street and Treasurer, Nicholas
Milwaukee, WI 53202 Company, Inc., the
Adviser to the Fund, and
employed by the Adviser
since July 1987. He is
a Certified Public
Accountant.

Candace L.Lesak, 42 Vice President Employee, Nicholas
700 North Water Street Company, Inc., the
Milwaukee, WI 53202 Adviser to the Fund,
since February 1983.
She is a Certified
Financial Planner.

Mark J. Giese, 29 Vice President Vice President, Nicholas
700 North Water Company, Inc., the
Milwaukee, WI 53202 Adviser to the Fund, and
employed by the Adviser
since July 1994. He
graduated from the
University of Wisconsin
- Madison with a Masters
of Science degree in
Finance in May of 1994.
He is a Certified Public
Accountant and a
Chartered Financial
Analyst.

Mary C. Gosewehr, 39 Treasurer Employee, Nicholas
700 North Water Street Company, Inc., the
Milwaukee, WI 53202 Adviser to the Fund,
since April 1985.

Tracy C. Eberlein, 39 Assistant Vice President Employee, Nicholas
700 North Water Street Company, Inc., the
Milwaukee, Wi 53202 Adviser to the Fund,
since January 1985.
She is a Certified
Financial Planner.
</TABLE>
____________________

* Messrs. Albert O. Nicholas and Thomas J. Saeger are
"interested persons" of the Adviser, as that term is defined
in the 1940 Act. Mr. Nicholas is Chief Executive Officer
and a director of the Adviser and owns 91% of the
outstanding voting securities of the Adviser.

See "The Fund's 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.

The Investment Advisory Agreement between the Fund and
Nicholas Company, Inc. states that the Fund shall pay the
directors' fees of directors who are not interested persons of
Nicholas Limited Edition, Inc. The amount of such fees is
subject to increase or decrease at any time, but is subject to
the overall limitation on the Fund's annual expenses.

The table below sets forth the aggregate compensation
received by all directors of the Fund during the year ended
December 31, 1999. 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>
<CAPTION>
ESTIMATED TOTAL COMPENSATION
PENSION OR RETIREMENT ANNUAL BENEFITS FROM FUND AND
AGGREGATE COMPENSATION BENEFITS ACCRUED AS UPON FUND COMPLEX
NAME FROM THE FUND (1) PART OF THE FUND EXPENSES RETIREMENT Paid to Directors(1)

<S> <C> <C> <C> <C>
$ 0 $0 $0 $ 0
Albert O.
Nicholas (2)

Melvin L. 2,000 0 0 21,200
Schultz (2)

Thomas J. 0 0 0 0
Saeger
___________

</TABLE>

(1) During the fiscal year ended December 31,1999,the Fund and other funds
in the Nicholas Fund Complex(i.e.,those funds which also have Nicholas
Company,Inc. as its investment adviser, namely Nicholas Fund, Inc.,
Nicholas II, Inc.,Nicholas Income Fund, Inc, Nicholas Money Market
Fund, Inc. and Nicholas Equity Income 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 year ended December 31, 1999,the Fund compensated the
disinterested directors at a rate of $500 per director per meeting
attended. Except for out-of-pocket expenses, the disinterested
directors did not receive any other form or amount of compensation
from the Fund Complex during the fiscal year ended December 31, 1999.
All other directors and officers of the Fund were compensated by the
Adviser in accordance with its investment advisory agreement.

(2) Messrs. Albert O. Nicholas and Melvin L. Schultz also are members
of the Board of Directors of Nicholas Fund, Inc., Nicholas II, Inc.,
Nicholas Income Fund, Inc., Nicholas Money Market Fund, Inc. and
Nicholas Equity Income Fund, Inc.

The Fund and the Adviser adhere to Codes of Ethics ("Codes") established
and adopted by their Boards by their Boards of Directors pursuant to Rule
17j-1 under the Investment Company Act of 1940, as amended. The Codes govern
the personal trading activities of all "Access Persons" of the Fund and the
Adviser. Access Persons include every director and officer of the Adviser and
the investment companies managed by the Adviser, including the Fund, as well
as certain employees of the Adviser and Fund who, in connection with their
regular functions and duties, make, participate in, or obtain information
regarding the purchase or sale of a security by the Adviser or the Fund, or
whose functions relate to the making of a recommendation with respect to such
purchases or sales. The Codes are based on the principal that such Access
Persons have a fiduciary duty to place the interests of the Fund and the
Adviser's clients above their own.

The Codes provide for trading "black out" periods of fifteen calendar
days during which time Access Persons may not trade in securities which have
been purchases or sold by the Fund or any other registered investment company
or account to which the Adviser serves as investment adviser, unless the
transaction is pre-approved by the Fund or the Adviser, as applicable. In
addition, the Codes ban Access Persons from engaging in any manipulative or
deceptive practices in connection with certain securities held or to be
acquired by the Fund. The Codes also require that Access Persons obtain
pre-approval prior to investing in any initial public offering or private
placement.

PRINCIPAL SHAREHOLDERS

Charles Schwab & Company, Inc., 101 Montgomery Street, San Francisco,
California 94104-4122, beneficially owned 816,386 shares of the Fund, or
7.42%, as of March 31, 2000. The registered shareholder for this account is
Charles Schwab & Company, Inc., SPL Custody A/C for EXEL BNFT Customers.

Nicholas Company, Inc., the investment adviser to the Fund,beneficially
owned 744,203 shares of the Fund, or 6.76%, as of March 31, 2000. Of this
amount, 546,665 shares were owned of record by Nancy Nicholas,the spouse of
Albert O. Nicholas, President and a Director of the Fund, Chief Executive
Officer and a Director of the Adviser, and owner of 91% of the outstanding
voting securities of the Adviser; the Nicholas Family Foundation owned of
record 41,020 shares; and the Nicholas Company, Inc. Profit-Sharing Trust,
of which Mr. Nicholas and David E. Leichtfuss are trustees, owned of record
156,518 shares.

No other persons are known to the Fund to own beneficially or of record
5% or more of the outstanding shares of the Fund as of March 31, 2000. All
directors and executive officers of the Fund as a group (eleven in number)
own approximately 8.41% of the outstanding shares of the Fund as of March 31,
2000.

PRICING OF FUND SHARES

When you buy shares of the Fund, the price per share you pay is the net
asset value ("NAV") of the Fund. The NAV is determined by dividing the total
value in U.S. dollars of the Fund's total net assets 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 the total assets of the Fund. The
NAV is determined as of the close of trading on the New York Stock Exchange
("NYSE") on each day the NYSE is open for trading. The NYSE is open for
trading Monday through Friday except New Year's Day, President's Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Martin Luther King Day,
Thanksgiving Day and Christmas Day. Additionally, if any of the aforementioned
holidays falls on a Saturday, the NYSE will not be open for trading on the
preceding Friday, and when any such holiday falls on a Sunday, the NYSE will
not be open for trading on the succeeding Monday, unless unusual business
conditions exist (such as the ending of a monthly or yearly accounting
period).

Equity 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. Most debt securities,
excluding short-term investments, are valued at the current evaluated bid
price. Securities for which there are no readily available market quotations
and other assets and liabilities of the Fund will be valued at their then
current fair value using methods determined in good faith by the Board of
Directors.

PURCHASE OF FUND SHARES

MINIMUM INVESTMENTS. The minimum initial purchase is $2,000 and the
minimum for any subsequent purchase is $100, except in the case of
reinvestment of distributions. 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 $2000 minimum required investment due to
shareholder redemption (but not solely due to a decrease in NAV 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 minimum.

APPLICATION INFORMATION. Applications for the purchase of shares are
made to Nicholas Limited Edition, Inc., c/o Firstar Mutual Fund Services, LLC
("Firstar"), P.O. Box 2944, Milwaukee, Wisconsin 53201-2944. The Fund also
has available an Automatic Investment Plan for shareholders. You should
contact the Fund for additional information.

When you make a purchase, your purchase price per share will be the NAV
next determined after the time the Fund receives the application in proper
order. The determination of the NAV for a particular day is applicable to
all purchase applications received in proper order by the close of trading on
the NYSE on that day (usually 4:00 p.m., New York time).

Applications to purchase Fund shares received in proper order
on a day when the NYSE is open for trading, prior to the close
of trading on that day, will be based on the NAV as of the close
of trading on that day.

Applications to purchase Fund shares received in proper order after
the close of trading on the NYSE will be based on the NAV as
determined as of the close of trading on the next day the NYSE is
open.

Purchase of shares will be made in full and fractional shares computed to three
decimal places.

You should be aware that deposit in the mail or with independent
delivery services, or receipt at Firstar's Post Box, of purchase applications
does not constitute receipt by Firstar or the Fund. Do not mail letters by
overnight courier to the Post Office Box address. Overnight courier delivery
should be sent to Firstar Mutual Fund Services, LLC, Third Floor, 615 East
Michigan Street, Milwaukee, Wisconsin 53202.

Your application to purchase Fund shares must be in proper order to be
accepted, may only be accepted by the Fund or an Authorized Agent of the Fund
and is not binding until accepted. Applications must be accompanied by payment
in U.S. funds. Your check should be drawn on a U.S. bank, savings & loan or
credit union. Checks are accepted subject to collection at full face value in
U.S. funds. The transfer agent will charge a $20 fee against your account,
in addition to any loss sustained by the Fund, if any payment check is
returned to the transfer agent for insufficient funds. The Fund will not
accept applications under circumstances or in amounts considered
disadvantageous for shareholders. If you open an account (including
custodial accounts) without a proper social security number or taxpayer
identification number, it may be liquidated. Proceeds will be 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. WIRE PAYMENTS. You
also may purchase Fund shares via the Federal Reserve wire system. If a wire
purchase is to be an initial purchase, please call Firstar (414-276-0535 or
800-544-6547) with the appropriate account information prior to sending the
wire. Firstar will provide you with a confirmation number for any wire
purchase which will ensure the prompt and accurate handling of funds. To
purchase shares of the Fund by federal wire transfer, instruct your bank to
use the following instructions:

Wire To: Firstar Bank , N.A.
ABA 075000022
Credit: Firstar Mutual Fund Services, LLC
Account 112-952-137
Further Credit: Nicholas Limited Edition, Inc.
(shareholder account number)
(shareholder registration)

The Fund and its transfer agent are not responsible for the consequences
of delays resulting from the banking or Federal Reserve wire system, or from
incomplete wiring instructions.

CERTIFICATES. The Fund won't issue certificates representing Fund shares
unless the shareholder specifically requests certificates in writing.
Certificates are mailed to requesting shareholders approximately two weeks
after receipt of the request by the Fund. The Fund won't issue certificates
for fractional shares even if requested. Where certificates are not requested,
the Fund's transfer agent, Firstar, will credit the shareholder's account
with the number of shares purchased. Written confirmations are issued for all
purchases of Fund shares.

THIRD PARTY PURCHASES - USE OF A PROCESSING INTERMEDIARY TO PURCHASE FUND
SHARES. You can purchase shares of the Fund through certain
broker-dealers, financial institutions or other service providers
("Processing Intermediaries"). If you do, the Processing Intermediary,
rather than you, may be the shareholder of record. Certain service
providers may receive compensation from the Fund for providing transfer
agent-related services relating to the accounts held in street name.
Processing Intermediaries may use procedures and impose restrictions in
addition to or different from those applicable to shareholders who invest
in the Fund directlyYou should read the program materials provided by the
Processing Intermediary in conjunction with this Statement of Additional
information before you invest in the Fund this way.

Processing Intermediaries may charge fees or other charges for the
services they provide to their customers. Such charges may vary among
Processing Intermediaries, but in all cases will be retained by the
Processing Intermediary and not remitted to the Fund or the Adviser.

The Fund also may enter into arrangements with some Processing
Intermediaries which authorizes them to process purchase orders on behalf
of the Fund on an expedited basis (an "Authorized Agent"). Receipt of a
purchase order by an Authorized Agent will be deemed to be received by the
Fund for purposes of determining the NAV of Fund shares to be purchased.
If you place purchase orders through an Authorized Agent, you will pay the
Fund's NAV next computed after the receipt by the Authorized Agent of such
purchase order, plus any applicable transaction charge imposed by the
Authorized Agent.

Of course, you do not have to use the services of a Processing
Intermediary, or pay the fees that may be charged for such services. You can
invest directly with the Fund without a sales charge.

REDEMPTION OF FUND SHARES

REDEMPTION PRICE. You may redeem all or part of your Fund shares by
any of the methods described below. All redemptions will be processed
immediately upon receipt and written confirmations will be issued for all
redemptions of Fund shares. The redemption price will be the Fund's NAV next
computed after the time of receipt by Firstar (or by an Authorized Agent of
the Fund) of the certificate(s), or written request in the proper order as
described below, or pursuant to proper telephone instructions as described
below.

Requests for redemption of Fund shares received in proper
order on a day when the NYSE is open for trading, prior to the
close of trading on that day, will be based on the NAV as of the
close of trading on that day.

Requests for redemption of Fund shares received in proper
order after the close of trading on the NYSE will be based on the
NAV as determined as of the closing of trading on the next day
the NYSE is open.

THE FUND WILL RETURN AND NOT PROCESS REDEMPTION REQUESTS
THAT CONTAIN RESTRICTIONS AS TO THE TIME OR DATE REDEMPTIONS ARE
TO BE EFFECTED.

If any of the shares you want redeemed were purchased recently by
personal or certified check, the Fund reserves the right to hold payment up
to 15 days or until notified that investments made by check have been
collected, at which time your redemption request will be processed and
payment made.

WRITTEN REDEMPTIONS. If you redeem in writing, you must ensure that the
redemption request is signed by each shareholder in the exact manner as the
Fund account is registered and includes the redemption amount and the
shareholder account number.

If you have certificates for your shares, you may redeem by
delivering to the Fund, c/o Firstar Mutual Fund Services, LLC,
P.O. Box 2944, Milwaukee, Wisconsin 53201-2944, the certificate(s)
for the full shares. The certificate(s) must be properly endorsed
or accompanied by an instrument of transfer, in either case with
signatures guaranteed by an eligible "guarantor institution," which
is a bank, a savings and loan association, a credit union, or a
member firm of a national securities exchange. A notary public is
not an acceptable guarantor.

If you don't have certificates for your shares, you may redeem by
delivering an original signed written request for redemption
addressed to Nicholas Limited Edition, Inc., c/o Firstar Mutual
Fund Services, LLC, P.O. Box 2944, Milwaukee, Wisconsin 53201-2944.
If the account registration is individual, joint tenants, sole
proprietorship, custodial (Uniform Transfer to Minors Act), or
general partners, the written request must be signed exactly as the
account is registered. If the account is owned jointly, all owners
must sign.

YOU MAY NOT FAX YOUR REDEMPTION REQUEST.

The Fund may require additional supporting documents for written
redemptions made by corporations, executors, administrators, trustees and
guardians. Specifically, 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 have a copy
of the title and signature page of the trust agreement on file or must be
accompanied by the trust agreement and signed by the trustee(s).

IF YOU ARE UNCERTAIN ABOUT WHAT DOCUMENTS OR INSTRUCTIONS ARE NECESSARY
IN ORDER TO REDEEM SHARES, PLEASE WRITE OR CALL FIRSTAR (414-276-0535
OR 800-544-6547), PRIOR TO SUBMITTING A WRITTEN REDEMPTION REQUEST.
A WRITTEN REDEMPTION REQUEST WILL NOT BECOME EFFECTIVE UNTIL ALL
DOCUMENTS HAVE BEEN RECEIVED IN PROPER ORDER BY FIRSTAR.

If you have an individual retirement account ("IRA") or other retirement
plan you must indicate on your written redemption requests whether or not to
withhold federal income tax. Redemption requests lacking an election not to
have federal income tax withheld will be subject to withholding. Please
consult your current Disclosure Statement for any applicable fees.

You should be aware that deposit in the mail or with other independent
delivery services or receipt at Firstar's Post Office Box of redemption
requests does not constitute receipt by Firstar or the Fund. Do not mail
letters by overnight courier to the Post Office Box address. Overnight
courier delivery should be sent to Firstar Mutual Fund Services, LLC,
Third Floor, 615 East Michigan Street, Milwaukee, Wisconsin 53202.

TELEPHONE REDEMPTIONS. You can redeem your shares by telephone unless
you decline that option in writing. Telephone redemptions can only be made
by calling Firstar (800-544-6547 or 414-276-0535). In addition to the
account registration, you 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 NYSE (usually 4:00 p.m., New York time) to receive that day's NAV. There
will be no exceptions due to market activity. During periods of substantial
economic or market changes, you may have difficulty making a redemption by
telephone. If you are unable to contact Firstar by telephone, you may redeem
your shares by delivering the redemption request in person or by mail. The
maximum telephone redemption is $50,000 per account/per business day. The
maximum telephone redemption for related accounts is $100,000 per business
day. The minimum telephone redemption is $500 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.
Neither the Fund nor Firstar will be liable for following instructions
communicated by telephone which they reasonably believe to be genuine
The Fund and Firstar will employ reasonable procedures to confirm that
instructions received by telephone are genuine, and if they do not, they may
be liable for losses due to unauthorized or fraudulent instructions.

EFFECT OF REDEMPTION. For federal income tax purposes, a redemption
generally is treated as a sale of the shares being redeemed. You may
recognize capital gain or loss equal to the difference between the redemption
price and your cost basis for the shares being redeemed. See "Dividends,
Distributions and Federal Tax Status" for further tax information.

The Fund ordinarily pays for redeemed shares within seven days after
receipt of a request in proper order, except as provided by the rules of the
Securities and Exchange Commission. Redemption proceeds to be wired also
ordinarily will be wired within seven days after receipt of the request, and
normally will be wired on the next business day after a NAV is determined.
The Fund reserves the right to hold payment up to 15 days or until notified
that investments made by check have been collected.

You may instruct Firstar to mail the proceeds to the address of record
or to directly mail the proceeds to a pre-authorized bank account. The
proceeds also may be wired to a pre-authorized account at a commercial bank
in the United States. Firstar 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.

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
1940 Act 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.

SIGNATURE GUARANTEES. A signature guarantee of each owner is required
to redeem shares in the following situations, for all size transactions:

if you change the ownership on your account

upon redemption of shares when certificates have been issued
for your account

when you want the redemption proceeds sent to a different
address than is registered on the account

for both certificated and uncertificated shares, if the proceeds
are to be made payable to someone other than the account owner(s)

any redemption transmitted by federal wire transfer to your
bank not previously set up with the Fund

if a change of address request has been received by the Fund or
Firstar within 15 days of a redemption request

In addition, you must have your signature guaranteed if you request
redemption of $100,000 or more from your account. Your redemption will not
be processed until the signature guarantee, if required, is received in
proper order. A notary public is not an acceptable guarantor.

THIRD PARTY REDEMPTIONS - USE OF A PROCESSING INTERMEDIARY TO REDEEM
FUND SHARES. As with the purchase of Fund shares, you may redeem shares
of the Fund through certain broker-dealers, financial institutions and other
service providers ("Processing Intermediaries"). Certain service providers
may receive compensation from the Fund for providing transfer agent-related
services relating to the accounts held in street name. You should read the
program materials provided by the Processing Intermediary before you redeem
your shares of the Fund this way. Then follow those instructions and procedures.

Processing Intermediaries may charge fees or other charges for the
services they provide to their customers. Such charges vary among Processing
Intermediaries, but in all cases will be retained by the Processing
Intermediary and not remitted to the Fund or the Adviser.

The Fund also may enter into an arrangement with some Processing
Intermediaries authorizing them to process redemption requests on behalf of
the Fund on an expedited basis (an "Authorized Agent"). Receipt of a
redemption request by an Authorized Agent will be deemed to be received by
the Fund for purposes of determining the net asset value of Fund shares to be
redeemed. For redemption orders placed through an Authorized Agent, you will
receive redemption proceeds which reflect the Fund's NAV next computed after
the receipt by the Authorized Agent of the redemption order, less any
redemption fees imposed by the Authorized Agent.

You do not have to use the services of a Processing Intermediary, or pay
the fees that may be charged for such services, unless you hold Fund shares
through a Processing Intermediary. Then you must redeem your shares through
such Processing Intermediary. In such event, you should contact the Processing
Intermediary for instructions on how to redeem. Otherwise, if you originally
invested directly with the Fund, you can redeem Fund shares through the Fund
without a redemption charge.

EXCHANGE BETWEEN NICHOLAS FAMILY OF FUNDS

Shares of the Fund may be exchanged for shares of other mutual funds for
which Nicholas Company, Inc. serves as the investment adviser.
Nicholas Company, Inc. is also the investment adviser to the following funds
which have investment objectives and net assets as noted below:

<TABLE>
<CAPTION>
NET ASSETS AT
FUND INVESTMENT OBJECTIVE DECEMBER 31, 1999
----- -------------------- ------------------
<S> <S> <C>

Nicholas Fund, Inc. Capital appreciation $5,154,231,564

Nicholas II, Inc. Long-term growth $ 940,854,205

Nicholas Equity Income
Fund, Inc. Reasonable income; Moderate $ 18,504,250
long-term growth as a
secondary consideration

Nicholas Income, High current income $ 202,774,668
Fund, Inc. consistent with the preservation
and conservation of capital value

Nicholas Money Market High level of current income $ 140,949,418
as is consistent with preserving
capital and liquidity
</TABLE>

If you choose to exercise the exchange privilege, the shares will be
exchanged at their next determined NAV. If you exercise an exchange into
the Nicholas Money Market Fund, Inc. on a day when the NYSE is open for
trading but the Federal Reserve Banks are closed, your shares of the Fund
will be redeemed on the day upon which the exchange request is received;
however, issuance of your Nicholas Money Market Fund, Inc. shares will be
delayed one business day. In such a case, the exchanged amount would be
uninvested for this one-day period.

If you are interested in exercising the exchange privilege you must
obtain the appropriate prospectus from Nicholas Company, Inc.

An exchange constitutes a sale for federal tax purposes and you may
realize a capital gain or loss upon the exchange, depending upon whether
the NAV at the time is more or less than your cost basis. An exchange
between the funds involving master retirement plans and IRA accounts generally
is not a taxable transaction for federal tax purposes. See "Dividends,
Distributions and Federal Tax Status" for further tax information.

This exchange privilege is available only in states where shares of the
fund being acquired may legally be sold, and this privilege may be terminated
or modified only upon 60 days advance notice to shareholders.

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 directly
through Nicholas Company, Inc. will be made without cost to
you through written request. If you are interested in
exercising the exchange by mail privilege you may obtain the
appropriate prospectus from Nicholas Company, Inc.
Signatures required are the same as previously explained
under "Redemption of Fund Shares."

Exchange by Telephone. You also may exchange by telephone
among all Nicholas mutual funds. Only exchanges of $500.00
or more will be executed using the telephone exchange
privilege. Firstar 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
$l,000,000 per day for related accounts. You will be
allowed four telephone exchanges per account during any
twelve month period.

Procedures for exchanging Fund shares by telephone may be
modified or terminated at any time by the Fund or Firstar.
Neither the Fund nor Firstar will be responsible for the
authenticity of exchange instructions received by telephone.
Telephone exchanges can only be made by calling Firstar (4l4-276-
0535 or 800-544-6547). You will be required to provide pertinent
information regarding your account. Calls will be recorded.

TRANSFER OF FUND SHARES

You may transfer Fund shares 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. You can obtain
documents and instructions to transfer Fund shares by writing or calling
Firstar (414-276-0535 or 800-544-6547) or Nicholas Company, Inc.
(414-272-6133 or 800-227-5987) prior to submitting any transfer requests.

DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAX STATUS

The Fund intends to continue to qualify annually as a "regulated
investment company" under the Internal Revenue Code of 1986 and intends to
take all other action required to ensure 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 annually to its shareholders substantially all of its
net investment income and net realized capital gain

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 98% of the Fund's net
investment income, with certain adjustments, for such calendar year, plus 98%
of the Fund's capital gains (if any) for the one-year period ending on October
31 of such calendar year. In addition, an amount equal to any undistributed
net investment taxable income or capital gains from the previous calendar year
also must 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.

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. The maximum tax rate on long-term capital
gains for sales of securities held greater than twelve months is 20%.
Income distributed from the Fund's net investment income and net realized
short-term capital gains are taxable to shareholders as ordinary income,
whether distributed as cash or additional shares. Distributions generally
will be made annually in December. The Fund will provide information to
shareholders concerning the character and federal tax treatment of all
dividends and distributions.

Dividends paid by the Fund to individual shareholders will not qualify
for any dividends received exclusion; however, corporate shareholders will be
eligible for a dividends received deduction, subject to a reduction for
various reasons, including the fact that the total of dividends received
from domestic corporations in any year are less than 100% of the Fund's gross
income.

At the time of purchase of Fund shares, the Fund may have undistributed
income or capital gains included in the computation of the NAV per share.
Therefore, 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 NAV per share.

Under federal law, some shareholders may be subject to a 31% "back-up
withholding" on reportable dividends, capital gain distributions (if any)
and redemption payments. Generally, shareholders subject to back-up
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, you must
certify under penalties of perjury that the taxpayer identification number
you give to the Fund is correct and that you are 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. You
should consult with a tax adviser concerning the federal, state and local tax
aspects of an investment in the Fund.

DIVIDEND AND DISTRIBUTION REINVESTMENT PLAN

Unless you elect to accept cash in lieu of shares, all dividends and
capital gains distributions are automatically reinvested in shares through the
Dividend and Distribution Reinvestment Plan (the "Reinvestment Plan"). You
may elect to accept cash on the application to purchase shares, by telephone
or by separate written notification. All reinvestments are at the NAV per
share in effect on the dividend or distribution date and are credited to the
shareholder's account in full and fractional shares. Firstar will notify you
of the number of shares purchased and the price following each reinvestment
period. 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.

You may withdraw from or thereafter elect to participate in the
Reinvestment Plan at any time by giving written or telephonic notice
to the Firstar. An election must be received by Firstar 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 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 Reinvestment Plan at any
time on 30 days written notice to participants.

SYSTEMATIC WITHDRAWAL PLAN

If you own $10,000 or more of Fund shares at the current
market value, you may open a Systematic Withdrawal Plan (the
"Plan") and receive monthly, quarterly, semi-annual or annual
checks for any designated amount. Firstar reinvests all income
and capital gain dividends in shares of the Fund. You may add
shares to, withdraw shares from, or terminate the Plan, at any
time. Each withdrawal may be a taxable event to you.
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 upon written notice mailed to the shareholders.
Please contact Nicholas Company, Inc. for copies of the Plan
documents.

INDIVIDUAL RETIREMENT ACCOUNTS

Individuals who receive compensation, including earnings
from self-employment may be able to establish a traditional IRA,
a Roth IRA and/or an Education IRA. The Fund offers prototype
IRA plans for adoption by individuals who qualify. A description
of applicable service fees and application forms are available
upon request from the Fund. The IRA documents also contain a
Disclosure Statement which the IRS requires to be furnished to
individuals who are considering adopting an IRA. It is important
you obtain up-to-date information from the Fund before opening an
IRA.

Qualifying individuals who have a traditional IRA may make
deductible contributions to it. Taxation of the income and gains
paid to a traditional IRA by the Fund is deferred until
distribution from the IRA.

Qualifying individuals who maintain a Roth IRA may make non-
deductible contributions to it. However, the amounts within the
Roth IRA accumulate tax-free and qualified distributions will not
be included in a shareholder's taxable income. The contribution
limit is $2,000 annually ($4,000 for joint returns) in aggregate
with contributions to traditional IRAs. Certain income phase-
outs apply.

Like the Roth IRA, qualifying individuals may make non-
deductible contributions to an Education IRA, but the investment
earnings accumulate tax-free, and distributions used for higher
education expenses are not taxable. Contribution limits are $500
per account and certain income phase-outs apply.

As long as the aggregate IRA contributions meet the Fund's
minimum investment requirement of $2,000, 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 you to consult with your
personal tax adviser to determine the deductibility of IRA
contributions.

Because a retirement program involves commitments covering
future years, it is important that the investment objectives of
the Fund be consistent with the participant's retirement
objectives. Premature withdrawals from a retirement plan may
result in adverse tax consequences. Consultation with a tax
adviser regarding the tax consequences is recommended.

MASTER RETIREMENT PLAN

The Fund has available a master retirement plan for
self-employed individuals. You may contact the Fund for
additional information or if you wish to participate in the plan.
Consultation with a tax adviser regarding the tax consequences of
the plan is recommended.

BROKERAGE

The Adviser decides which securities to buy for the Fund and
when to sell them. It also selects the broker or dealer who
places the Fund's investment business and negotiates their
commissions. The Adviser selects a broker or dealer to execute 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 companies
and events and current conditions in specific industries, and the
rendering of advice regarding general economic conditions
affecting the stock market and the economy. The Fund and the
Adviser are not affiliated with any broker.

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 brokerage and
research services. Section 28(e) of the Securities Exchange Act
of 1934 ("Section 28(e)") permits the Adviser, under certain
circumstances, to cause the Fund to pay a broker or dealer a
commission for effecting a transaction in recognition of the
value of the brokerage and research service provided by the
broker or dealer. Brokerage and research services include (i)
furnishing advice as to the value of securities, the advisability
of investing in, purchasing or selling securities, and the
availability of securities or purchasers or sellers of
securities; (ii) furnishing analyses and reports concerning
issuers, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts; and (iii)
effecting securities transactions and performing functions
incidental thereto. Such commissions may be less than, equal to
or exceed the amount another broker would have charged for
effecting the transaction.

The Adviser believes it is important to its investment
decision-making process to have access to independent research.
The Adviser understands that since the brokers and dealers
rendering such services are compensated through 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. Higher
commissions may be paid by the Fund, provided (i) the Adviser
determines in good faith that the amount is reasonable in
relation to the services in terms of the particular transaction
or in terms of the Adviser's overall responsibilities with
respect to the accounts as to which it exercises investment
discretion; (ii) such payment is made in compliance with the
provisions of Section 28(e) and other applicable state and
federal law; and (iii) in the Adviser's opinion, the total
commissions paid by the Fund will be reasonable in relation to
the benefits to the Fund over the long term.

In instances where the Adviser determines 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. 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 following table shows the dollar amount of brokerage
commissions paid to firms by the Fund for certain research
services provided and the approximate dollar amount of the
transactions involved for the fiscal year ended December 31,
1999.

<TABLE>
<CAPTION>
AMOUNT OF COMMISSIONS
PAID TO FIRMS THAT AMOUNT OF
PROVIDED RESEARCH BROKERAGE TRANSACTIONS
SERVICES(1) INVOLVED(1)
------------------- -----------------------
<S> <C> <C>
The Fund $61,235 $22,511,865
</TABLE>

(1) The provision of such research services was not the
only factor considered in the placement of all noted
business with such firms. In addition, the amounts
disclosed do not include commissions paid to firms who
provided unsolicited research services as well as research
customarily provided by brokerage firms in the normal
course of business.

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 also are 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.

The Adviser may effect portfolio transactions with brokers
or dealers who recommend the purchase of the Fund's shares. The
Adviser 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.

The Fund paid aggregate brokerage commissions of
approximately $270,281, $234,643, and $156,751 in fiscal 1999,
1998 and 1997, respectively. The increase in the amount of
brokerage commissions paid by the Fund in fiscal 1998 relative to
fiscal 1997 primarily is attributable to growth in Fund assets
and the necessity to invest these assets.

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. All
performance figures are based on historical earnings and are not
intended to indicate future results. 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:

where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years from initial investment to the end
of the period
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the stated period

<TABLE>
<CAPTION>
FOR THE PERIODS ENDED DECEMBER 31,1999
ONE YEAR FIVE YEARS TEN YEARS
--------- ----------- ----------
<S> <C> <C> <C>
Total Return (4.09)% 105.68% 257.38%
Average Annual Total Return (4.09)% 15.52% 13.58%
</TABLE>

For purposes of these calculations, the following
assumptions are made: (1) all dividends and distributions by the
Fund are reinvested at the NAV calculated on the reinvestment
dates during the period; (2) a complete redemption at the end of
the periods is made; and (3) all recurring fees that are charged
to all shareholder accounts are included.

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.

In sales materials, reports and other communications to
shareholders, the Fund may compare its performance to certain
indices, including but not limited to the Dow Jones Industrial
Average, the Standard & Poor's 500 Index, NASDAQ, the Russell
2000 Index and the United States Department of Labor Consumer
Price Index. The Fund also may include evaluations of the Fund
published by nationally recognized financial publications and
ranking services, such as Forbes, Money, Financial World,
Barron's, Lipper Analytical Services Mutual Fund Performance
Analysis, Morningstar, Inc., CDA Investment Technologies Inc. and
Value Line, Inc.

CAPITAL STRUCTURE

Nicholas Limited Edition, Inc. is authorized to issue
20,000,000 shares of common stock, par value $0.01 per share. Of
these, the Board of Directors of the Fund has determined that an
aggregate maximum of ten million shares (net of redemptions) are
available for purchase by investors and ten million shares are
reserved for reinvestment of capital gain and dividend
distributions. Each share has one vote and all shares
participate equally in dividends and other distributions by the
Fund, and in the residual assets of the Fund in the event of
liquidation. There are no conversion or sinking fund provisions
applicable to shares, and holders have no preemptive rights and
may not cumulate their votes in the election of directors.
Shares are redeemable and are transferable. Fractional shares
entitle the holder to the same rights as whole shares except
fractional shares have no voting rights.

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, and direct
that his account be credited with the shares. A shareholder may
in writing direct Firstar at any time to issue a certificate for
his shares without charge.

ANNUAL MEETING

Under the laws of the State of Maryland, registered
investment companies, such as the Fund, may operate without an
annual meeting of shareholders under specified circumstances if
an annual meeting is not required by the 1940 Act. The Fund has
adopted the appropriate provisions in its Articles of
Incorporation and will not hold annual meetings of shareholders
unless otherwise required to do so.

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 so
to do 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 1940 Act.

SHAREHOLDER REPORTS

Shareholders will be provided at least semiannually with a
report or a current prospectus showing the Fund's portfolio and
other information. After the close of the Fund's fiscal year,
which ends December 31, an annual report or current prospectus
containing financial statements audited by the Fund's independent
public accountants, Arthur Andersen LLP, will be sent to
shareholders.

CUSTODIAN AND TRANSFER AGENT

Firstar Bank, N.A. ("Firstar Bank") acts as Custodian of the
Fund. Firstar, 615 East Michigan Street, Milwaukee, Wisconsin
53202, acts as Transfer Agent and Dividend Disbursing Agent of
the Fund. As such, Firstar Bank holds all securities and cash of
the Fund, 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
officers of the Fund. Firstar Bank and Firstar do not exercise
any supervisory function over the management of the Fund, the
purchase and sale of securities or the payment of distributions
to shareholders.

INDEPENDENT ACCOUNTANTS AND LEGAL COUNSEL

Arthur Andersen LLP, 100 East Wisconsin Avenue, Milwaukee,
Wisconsin 53202, are the independent accountants for the Fund.
Michael Best & Friedrich LLP, 100 East Wisconsin Avenue,
Milwaukee, Wisconsin 53202, have passed on the legality of the
shares of the Fund being offered.

FINANCIAL INFORMATION

The schedule of investments, the financial statements and
notes thereto and the Report of Independent Public Accountants
contained in the Annual Report of the Fund for the fiscal year
ended December 31, 1999, which have been filed with the SEC
pursuant to Rule 30d-1 of the 1940 Act, are incorporated herein
by reference. You may obtain a free copy of the Annual Report by
writing or calling the Fund.

NICHOLAS LIMITED EDITION, INC.

FORM N-1A
----------------

PART C: OTHER INFORMATION

PART C. OTHER INFORMATION
------------------

ITEM 23. EXHIBITS
--------

All exhibits required to be filed pursuant to Item 23 are
listed in the Exhibit Index which appears elsewhere herein, and
(i) appear in their entirety herein, or (ii) are incorporated by
reference to previous filings with the Securities and Exchange
Commission, as indicated in such Exhibit Index.

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE
FUND
-----------------------------------------------------------
- ------------------------------------------------------

The Registrant is not under common control with any other
person. The Registrant, Nicholas Fund, Inc., Nicholas II, Inc.,
Nicholas Income Fund, Inc., Nicholas Money Market Fund, Inc. and
Nicholas Equity Income Fund, Inc. share a common investment
adviser, Nicholas Company, Inc.; however, each such fund has an
independent Board of Directors responsible for supervising the
investment and business management services provided by the
adviser. The Registrant does not control any other person.

ITEM 25. INDEMNIFICATION
----------------------------

Article VII, Section 7 of the By-Laws of the Registrant
provides for the indemnification of its officers and directors
against liabilities incurred in such capacities to the extent
described therein, subject to the provisions of the Maryland
General Business Corporation Law; such Section 7 is incorporated
herein by reference to the By-Laws of the Registrant previously
filed with the Securities and Exchange Commission. In addition,
Registrant maintains a joint errors and omissions insurance
policy with a $2.0 million limit of liability under which the
Registrant, the Adviser and the other funds advised by the
Adviser, and each of their respective directors and officers, are
named insureds.

The investment adviser to the Registrant, Nicholas Company,
Inc., has, by resolution of its Board of Directors, agreed to
indemnify the Registrant's officers, directors and employees to
the extent of any deductible or retention amount required under
insurance policies providing coverage to such persons in
connection with liabilities incurred by them in such capacities.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT
ADVISER
-----------------------------------------------------------
- --------------------------------------------
Incorporated by reference to pages 9-14 of the Statement of
Additional Information pursuant to Rule 411 under the Securities
Act of 1933, as amended.

ITEM 27. PRINCIPAL UNDERWRITERS
-----------------------------------------
None.

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
-----------------------------------------------------------
- -
All accounts, books or other documents required to be
maintained pursuant to Section 31(a) of the Investment Company
Act of 1940, as amended, and the rules of the Securities and
Exchange Commission promulgated thereunder, are located at the
offices of the Registrant, 700 North Water Street, Milwaukee,
Wisconsin 53202 or Firstar Trust Company, 615 East Michigan
Street, Milwaukee, Wisconsin 53202.

ITEM 29. MANAGEMENT SERVICES
--------------------------------------
None.
ITEM 30. UNDERTAKINGS
------------------------
The Registrant's By-Laws provide that it will indemnify its
officers and directors 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 under the Securities Act of 1933 ("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 of 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.

The 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
Shareholders which 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, as
amended; and, where interim financial information required to be
presented by Article 3 of Regulation S-X is 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 Quarterly
Report which is incorporated by reference in the Prospectus to
provide such interim financial information.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933,
as amended, and the Investment Company Act of 1940, as amended,
the Registrant, Nicholas Limited Edition, Inc., a corporation
organized and existing under the laws of the State of Maryland,
hereby certifies that it meets all of the requirements for
effectiveness of this Amendment to its Registration Statement
pursuant to Rule 485(a) under the Securities Act of 1933, as
amended, and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, on the 26th day of April, 2000.

NICHOLAS LIMITED EDITION, INC.

By:
--------------------------------------------
Thomas J.Saeger, Executive Vice President,
Secretary, Chief Financial Officer and
Chief Accounting Officer

Pursuant to the requirements of the Securities Act of 1933,
as amended, and the Investment Company Act of 1940, as amended,
this Amendment to the Registration Statement has been signed
below by the following persons in the capacities indicated on
April 26, 2000.

/s/ Albert O. Nicholas President(Principal Executive
- ---------------------------- Officer), and Director
Albert O. Nicholas

/s/ Melvin L. Schultz Director
- ---------------------------
Melvin L. Schultz

/s/ Thomas J. Saeger Executive Vice President,
- --------------------------- Secretary,Chief Financial
Thomas J. Saeger officer, Chief Accounting
Officer and Director

* By:
------------------------------------------------
Thomas J. Saeger, as
Attorney-in-Fact for the above officers
and directors, under authority of
Powers of Attorney previously filed and filed herewith.

EXHIBIT INDEX

SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- ------------ ---------
- -----------

(a) Articles of Incorporation of the Registrant *

(b) By-Laws of Registrant *

(d) Investment Advisory Agreement, dated January 26, 1987,
between the Registrant and Nicholas Company, Inc *

(g) Custodian Agreement, dated January 26, 1987, between
the Registrant and Firstar Trust Company *

(i) Opinion of Michael Best & Friedrich LLP, counsel to
the Registrant, concerning the legality of
Registrant's common stock, including consent to the
use thereof. **

(j) Consent of Arthur Andersen LLP, independent public
accountants. **

(n) Financial Data Schedule *

(p) Code of Ethics of Nicholas Limited Edition, Inc. **

(p.1) Nicholas Company, Inc. Code of Ethics and Insider
Trading Policy. **
Powers of Attorney *

* Incorporated by reference to previous filings with the
Securities and Exchange Commission.

** Filed herewith.

LIST OF CONSENTS

1. Consent of Michael Best & Friedrich LLP
(filed herewith and included in Exhibit (i))

2. Consent of Arthur Andersen LLP
(filed herewith and included as Exhibit (j))

EXHIBIT NO. (I)

OPINION OF MICHAEL BEST & FRIEDRICH LLP,
COUNSEL TO THE REGISTRANT, CONCERNING THE
LEGALITY OF THE REGISTRANT'S COMMON STOCK,
INCLUDING CONSENT TO THE USE THEREOF.

EXHIBIT NO. (J)

CONSENT OF ARTHUR ANDERSEN LLP,
INDEPENDENT AUDITORS.

EXHIBIT NO. (P)

CODE OF ETHICS OF NICHOLAS LIMITED EDITION, INC.

EXHIBIT NO. (P.1)

NICHOLAS COMPANY, INC. CODE OF ETHICS
AND INSIDER TRADING POLICY.

April 25, 2000

Nicholas Limited Edition, Inc.
700 North Water Street
Suite 1010
Milwaukee, WI 53202

Gentlemen:

We have acted as counsel to Nicholas Limited Edition,
Inc. (the "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
shares of 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
examined such other corporate records, certified documents and
other documents as we deem necessary for the purposes of this
opinion and we have considered such questions of law as we
believe to be involved. 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 validly organized under the laws of
the State of Maryland, and has the corporate power to carry on
its present business and is duly authorized to own its properties
and conduct its business in those states where such authorization
is presently required.

2. The Fund is authorized to issue up to twenty
million (20,000,000) shares of Common Stock, par value $.01 per
share, including those shares currently issued and outstanding.

3. The shares of Common Stock of the Fund to be
offered for sale pursuant to the Registration Statement have been
duly authorized and, upon the effectiveness of Post-Effective
Amendment No. 12 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.

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

Very truly yours,

MICHAEL BEST & FRIEDRICH

David E. Leichtfuss

DEL/kls

Consent of Independent Public Accountants

As independent public accountants, we hereby consent to the use
of our report, and to all references to our firm, included in or
made a part of this Form N-1A registration statement (No. 33-
11420) for Nicholas Limited Edition, Inc.

ARTHUR ANDERSEN LLP

Milwaukee, Wisconsin
April 24, 2000

AMENDED CODE OF ETHICS

Nicholas Limited Edition, Inc., an investment company

registered under the Investment Company Act of 1940, as amended,

hereby adopts the following Amended Code of Ethics governing the

conduct of personal trading by persons associated with it. The

purpose of this Amended Code of Ethics is to foster compliance

with applicable federal regulatory requirements and to eliminate

transactions suspected of being in conflict with the best

interests of the Fund.

1. Definitions.
-----------

A. Access Person.
-------------

As used in this Code, the term "Access Person" shall

mean any director or officer of the Fund, or any

employee of the investment adviser to the Fund who, in

connection with his or her regular functions or duties,

makes, participates in, or obtains information

regarding the purchase or sale of a security by the

Fund, or whose functions relate to the making of an

recommendation with respect to such purchases or sales.

B. Fund.
----

As used in this Code, the term "Fund" shall mean

Nicholas Limited Edition, Inc.

C. Beneficial Ownership.
--------------------

As used in this Code, the term "beneficial ownership"

shall be interpreted in the same manner as it would be

in determining whether a person is subject to the

provisions of Section 16 of the Securities Exchange Act

of 1934, as amended, and the rules and regulations

thereunder. Pursuant to Section 16, the term

"beneficial owner" shall mean any person who is deemed

a beneficial owner pursuant to Section 13(d) of the

Securities Exchange Act of 1934, as amended. For the

purposes of Section 13(d), a beneficial owner includes

any person who, directly or indirectly, through any

contract, arrangement, understanding, relationship, or

otherwise, has or shares: (1) voting power, which

includes the power to vote, or to direct the voting of,

such security; and/or (2) investment power, which

includes the power to dispose, or to direct the

disposition of, such security. For example, close

family or business relationships may give rise to a

degree of influence of one person over the voting or

investment decisions of another such as to result in

shared beneficial ownership. Typically, ownership of

securities by a spouse, minor child or a trust of which

an Access Person is grantor, beneficiary or trustee,

will be deemed beneficial ownership of those securities

by the related Access Person.

D. Security.
--------

As used in this Code, the term "security" shall mean

any equity security, corporate debt security,

convertible security, option or warrant, except that it

shall not include securities issued by the U.S.

Government (i.e., "government securities" within the

meaning of Section 2(a)(16) of the Investment Company

Act of 1940, as amended), banker's acceptances, bank

certificates of deposit, commercial paper and shares of

registered open-end investment companies.

2. Prohibited Activities
---------------------

A. No Access Person shall:

(1) Employ any device, scheme or artifice to

defraud the Fund.

(2) Make to the Fund any untrue statement of

a material fact or omit to state to the Fund any

material fact necessary in order to make the

statements made, in light of the circumstances

under which they are made, not misleading.

(3) Engage in any act, practice, or course

of business which operates or would operate as a

fraud or deceit upon the Fund.

(4) Engage in any manipulative practice with

respect to the Fund.

B. No Access Person shall purchase or sell, directly

or indirectly, for his/her own account, or acquire any

beneficial ownership in, any security which has been

purchased or sold within the preceding fifteen (15)

days by the Fund or which to his/her knowledge will be

purchased or sold within the succeeding fifteen (15)

days by the Fund unless such purchase or sale is

approved in writing by Albert O. Nicholas, David O.

Nicholas or Jeffrey T. May, or a person delegated by

either of the foregoing, prior to the effectuation of

such purchase or sale. A copy of such written approval

shall be retained for a period of at least five (5)

years.

C. No Access Person shall purchase any security from,

or sell any security to, the Fund, unless the sale or

purchase involves solely securities of which the issuer

is the Fund.

3. Reporting
---------

A. Within ten (10) days of the end of each calendar

quarter of the Fund, each Access Person shall report in

writing all purchases and sales of securities for

his/her own account, and all other transactions in

which he/she acquires or terminates any beneficial

ownership in a security. The report shall state the

title and number of shares of the security involved;

the date and the nature of the transaction (i.e.,

purchase, sale or other acquisition or disposition);

the price at which it was effected; and the name of the

broker, dealer or bank with or through whom the

transaction was effected. Such report may also contain

a statement declaring that the reporting of any such

transaction shall not be construed as an admission that

the Access Person making the report has any beneficial

ownership in the security.

B. A person who qualifies as an Access Person solely

because he is a director of the Fund is not required to

file the report required by subparagraph (A) hereof if

such person:

(1) is not an "interested" director of the

investment adviser to the Fund, as "interested" is

defined in Section 2(a)(19) of the Investment

Company Act of 1940, as amended; and

(2) does not know, or in the ordinary course

of fulfilling his duties as a director is not

charged with knowing, that during the 15-day

period immediately preceding or following a

transaction in a security by such director, the

Fund purchased or sold, or considered purchasing

or selling, the same security. Thus, a

disinterested director only must file a report if

he had, or should have had, actual or imputed

knowledge at the time he entered into his

transaction that (i) the Fund had engaged in a

transaction in the same security within the last

fifteen (15) days, or is engaging in such

transaction or is going to engage in such

transaction in the same security in the next

fifteen (15) days, or (ii) the Fund or its

investment adviser has within the last fifteen

(15) days considered a transaction in the same

security or is considering a transaction in the

security or within the next fifteen (15) days is

going to consider a transaction in the security.

4. Sanctions
---------
Mr. Jeffrey T. May, or another person designated by the

Board of Directors, shall review all reports submitted, and shall

determine if any violations of the Amended Code of Ethics have

occurred. If a violation of this Amended Code of Ethics occurs,

Albert O. Nicholas or the Board of Directors of the Fund may

impose such sanctions as they deem appropriate in the

circumstances, including termination of employment of the

violator.

NICHOLAS COMPANY, INC.
CODE OF ETHICS
AND INSIDER TRADING POLICY

Nicholas Company, Inc., an investment adviser registered
under the Investment Advisers Act of 1940, as amended, hereby
adopts the following Code of Ethics and Insider Trading Policy
("Code") governing the conduct of personal trading by persons
associated with it. The purpose of this Code of Ethics and
Insider Trading Policy is to foster compliance with applicable
federal and state regulatory requirements and to eliminate
transactions suspected of being in conflict with the best
interests of the Company's clients. In addition, as an entity
with access to highly confidential and sensitive information, the
Company has potential exposure to liability or penalties under
the Federal securities laws for insider trading or other improper
use of information by employees or other persons under their
control. In addition, Section 204A of the Investment Advisors
Act of 1940 mandates that investment advisors adopt, maintain and
enforce policies and procedures to prevent insider trading or
other misuse of material, non-public information.

1. Definitions
-----------

A. Access Person.
--------------
As used in this Code, the term "Access Person" shall
mean any officer or director of Nicholas Company, Inc.,
or any employee of Nicholas Company, Inc. who, in
connection with his or her regular functions or duties,
makes, participates in, or obtains information
regarding the purchase or sale of a security by any
account to which the Company serves as investment
adviser, or whose functions relate to the making of any
recommendation with respect to such purchases or sales.

B. Company.
-------
As used in this Code, the term "Company" shall mean
Nicholas Company, Inc.

C. Beneficial Ownership.
--------------------
As used in this Code, the term "beneficial ownership"
shall be interpreted in the same manner as it would be
in determining whether a person is subject to the
provisions of Section 16 of the Securities Exchange Act
of 1934, as amended, and the rules and regulations
thereunder. Pursuant to Section 16, the term
"beneficial owner" shall mean any person who is deemed
a beneficial owner pursuant to Section 13(d) of the
Securities Exchange Act of 1934, as amended. For the
purposes of Section 13(d), a beneficial owner includes
any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship, or
otherwise, has or shares: (1) voting power, which
includes the power to vote, or to direct the voting of,
such security; and/or (2) investment power, which
includes the power to dispose, or to direct the
disposition of, such security. For example, close
family or business relationships may give rise to a
degree of influence of one person over the voting or
investment decisions of another such as to result
in shared beneficial ownership. Typically, ownership
of securities by a spouse, minor child or a trust of
which an Access Person is grantor, beneficiary or
trustee, will be deemed beneficial ownership of those
securities by the related Access Person.

2. Insider Trading.
---------------

A. Introduction.
------------

Under the antifraud provisions of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), an
affirmative duty to disclose material non-public information
traditionally has been imposed on corporate "insiders"
participating in securities transactions. Ordinarily,
"insiders," who are corporate figures such as officers,
directors and controlling shareholders who have access to
confidential corporate information, owe a duty to a
company's shareholders not to trade on that information. A
corporate insider who is in possession of material inside
information must either disclose it to the investing public
or abstain from trading while the inside information remains
undisclosed. If disclosure prior to effecting a purchase or
sale would be improper or unrealistic, the alternative is to
forego the transaction.

The duty to disclose inside information before trading
arises from: (i) the existence of a relationship giving
access to information intended to be available only for a
corporate purpose and not for the personal benefit of
anyone; and (ii) the unfairness of allowing a corporate
insider to take advantage of that information while knowing
it is unavailable to the investing public. The Securities
and Exchange Commission has recognized that "a significant
purpose of the Exchange Act was to eliminate the idea that
the use of inside information for personal advantage was a
normal emolument of corporate office."

Under some circumstances, "outsiders" become
fiduciaries of shareholders and thus become subject to the
same duty to disclose or abstain as an insider. Such
persons assume the duties of an insider temporarily, by
virtue of a special relationship with the company. For the
duty to be imposed, however, the company must expect the
outsider to keep the disclosed non-public information
confidential, and the relationship must imply that duty.
For investment advisers, such as the Company, this duty may
be imposed on the basis of the Company's access to material
non-public information and the confidentiality relationship
which may exist between the Company and the registrant whose
securities the Company may trade on behalf of its clients.
As hereinafter discussed, any reference to an "insider"
shall apply to all access persons of the Company, and shall
relate to all securities of which the access person has
inside information.

Liability for trading on confidential information also
has been extended to non-insiders under a theory of
misappropriating information from their employers. The
misappropriation theory broadly proscribes the conversion by
insiders or others of material non-public information in
connection with the purchase or sale of securities. While a
person may gain a competitive advantage in the securities
marketplace through skill, one may not gain such an
advantage by stealing material non-public information in
breach of an employer-imposed fiduciary duty to
confidentiality. The misappropriation theory has been
applied to find violations of the antifraud provisions by an
employee of a financial printer, investment banking
employees, and a law firm's officer manager for trading in
securities of an employer's corporate client on the basis of
misappropriated information.

B. Materiality of Inside Information.
---------------------------------

Despite the "disclose or refrain from trading" rule, an
insider is not always foreclosed from investing merely
because he or she may be more familiar with company
operations than are outside investors. An insider's duty to
either disclose information or refrain from dealing arises
in "those situations which are essentially extraordinary in
nature and which are reasonably certain to have a
substantial effect on the market price of the security."
The Exchange Act only requires the disclosure of material
facts, allowing outsiders to make their own evaluations in
reaching investment decisions.

The test of materiality has been described as weighing
whether the information in question would have been
important to a reasonable investor in determining whether to
buy, sell or hold a security.

C. Disclosure of Inside Information.
--------------------------------

Information loses its inside character once it has been
effectively disclosed. It may be difficult to determine
when the information is sufficiently disseminated to allow
an insider to trade. An insider who traded immediately
after release to the news media, for example, but before the
news was published, was held in violation of the insider
trading prohibition. In that case, the court said that, at
a minimum, the insider should not have placed his order
until the news could reasonably have been expected to appear
over the media of widest circulation. The Securities and
Exchange Commission has said that "in order to effect a
meaningful public disclosure of corporate information, it
must be disseminated in a manner calculated to reach the
securities market place in general through recognized
channels of distribution, and public investors must be
afforded a reasonable waiting period to react to the
information."

How soon after the release of material information
insiders may begin to trade thus depends both on how
thoroughly and how quickly the information is published by
the news-wire services and the press. In addition, insiders
should refrain from trading following dissemination until
the public has had an opportunity to evaluate the
information thoroughly. Where the impact of the information
on investment decisions is readily understandable, as in the
case of an earnings report, the required waiting period will
be shorter than when the information must be interpreted
before its bearing on investment decisions can be evaluated.
While the waiting period is dependent on the circumstances,
certain stock exchanges recommend that insiders wait for at
least 24 hours after the general publication of the
information in a national medium. Where publication is not
so widespread, a minimum waiting period of 48 to 72 hours is
recommended.

D. Tipping.
-------

Not only are insiders, as fiduciaries, forbidden to
personally use undisclosed corporate information to their
advantage, they also may give such information to an
outsider for the similarly improper purpose of exploiting
the information for personal gain. "Tipping" is viewed as a
means of indirectly violating the "disclose or abstain from
trading" rule which applies to insiders.

Liability for tipping derives from the rule that
silence when trading with inside information constitutes a
fraud under the antifraud provisions of the Exchange Act if
there is a relationship of trust and confidence between
shareholders and the person trading on the inside
information. Unlike insiders who have independent fiduciary
duties to both the company and its shareholders, the typical
tippee has no such relationship. A tippee, however, is not
always free to trade on inside information. If the insider-
tipper has breached his or her fiduciary duty to
shareholders, the tippee inherits the duty to disclose or
abstain.

The tippee's duty to disclose or abstain is a
derivative of the duty of the insider. Some tippees assume
an insider's duty to the shareholders not because of
receiving the insider information, but rather because it has
been made available to them improperly. A tippee assumes a
fiduciary duty to the shareholders of a company not to trade
on material non-public information only when the insider has
breached a fiduciary duty to the shareholders by disclosing
the information to the tippee and the tippee knows or should
know there has been a breach.

E. Conclusion.
----------

The purpose of the foregoing discussion is to educate
and sensitize all access persons of the Company to insider
trading issues. Insider trading, or tipping, by any access
person of the Company is strictly prohibited.

3. Prohibited Activities
---------------------

A. No Access Person shall:

(1) Employ any device, scheme, or artifice
to defraud any client or prospective client of the
Company;

(2) Engage in any transaction, practice, or
course of business which operates as a fraud or
deceit upon any client or prospective client of
the Company;

(3) Acting for his/her own account,
knowingly to sell any security to or purchase any
security from a client, without disclosing to such
client in writing before the completion of such
transaction the capacity in which he/she is acting
and obtain the consent of the client to such
transaction; and

(4) Engage in any act, practice, or course
of business which is fraudulent, deceptive or
manipulative.

B. No Access Person shall purchase or sell, directly
or indirectly, for his/her own account, or acquire any
beneficial ownership in, any security which has been
purchased or sold within the preceding fifteen (15)
days by any registered investment company or account to
which the Company serves as investment adviser or which
to his/her knowledge will be purchased or sold within
the succeeding fifteen (15) days by any such registered
investment company or account to which the Company
serves as investment adviser, unless such purchase or
sale is approved in writing by Albert O. Nicholas,
David O. Nicholas or Jeffrey T. May, or a person
delegated by any of the foregoing, prior to the
effectuation of such purchase or sale. A copy of such
written approval shall be retained for a period of at
least five (5) years.

C. No Access Person shall purchase any security from,
or sell any security to, any registered investment
company or account to which the Company serves as
investment adviser, unless the sale or purchase
involves solely securities of which the registered
investment company is the issuer.

4. Exempt Purchases and Sales
--------------------------

The prohibitions in Section 2 of this Amended Code of
Ethics shall not be applicable to purchases effected upon
exercise of rights issued by an issuer pro rata to all
holders of a class of its securities, to the extent such
rights were acquired from such issuer, and sales of such
rights so acquired.

5. Reporting
---------

A. Within ten (10) days of the end of each fiscal
quarter of the Company, each Access Person shall report
in writing all purchases and sales of securities for
his/her own account, and all other transactions in
which he/she acquires or terminates any beneficial
ownership in a security. The report shall state the
title and amount of the security involved; the date and
the nature of the transaction (i.e., purchase, sale or
other acquisition or disposition); the price at which
it was effected; the reason for the transaction; and
the name of the broker, dealer or bank with or through
whom the transaction was effected. Such report may
also contain a statement declaring that the reporting
or recording of any such transaction shall not be
construed as an admission that the Access Person making
the report has any beneficial ownership in the
security.

6. Sanctions
---------

Mr. Jeffrey T. May, or another person designated by the
Board of Directors, shall review all reports submitted, and
shall determine if any violations of the Amended Code of
Ethics have occurred. If a violation of this Amended Code
of Ethics occurs, Albert O. Nicholas or the Board of
Directors of the Company may impose such sanctions as they
deem appropriate in the circumstances, including termination
of employment of the violator.