NICHOLAS APPLEGATE FUND INC, N-30D, 1998-09-09

NICHOLAS APPLEGATE FUND INC
N-30D, 1998-09-09

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(ICON)
Nicholas-
Applegate
Growth
Equity
Fund

SEMI
ANNUAL
REPORT
June 30, 1998
(LOGO)

<PAGE>

Nicholas-Applegate Growth Equity Fund

Performance At A Glance.
During the six-month period, uncertainty among investors regarding the
continued economic weakness in Asia caused a flight to the liquidity and
perceived safety of large, blue-chip stocks. Concerns about earnings negatively
affected many of the Fund's technology holdings.

In a tough second quarter for mid-cap stocks, the Nicholas-Applegate Growth
Equity Fund fell 3.7%, while its benchmark, the Russell Mid-Cap Growth
Index(D), dropped .06%. The Lipper Mid-Cap Funds Average declined 1.40%. For
the first half of the year, however, the Fund returned 7.2% versus the index
return of 11.9%.

Cumulative Total Returns1 As of 6/30/98

<TABLE>
<CAPTION>
Six One Five Ten Since
Months Year Years Years Inception2
<S> <C> <C> <C> <C> <C>
Class A 10.37% 24.04% 91.50% 326.65% 316.46%
Class B 9.88 23.09 83.95 N/A 181.60
Class C 9.88 23.09 N/A N/A 91.40
Class Z 10.46 24.43 N/A N/A 33.97
Lipper Mid-Cap
Fund Avg.3 10.66 22.22 118.80 335.48 ***
</TABLE>

Average Annual Total Returns1 As of 6/30/98
<TABLE>
<CAPTION>
One Five Ten Since
Year Years Years Inception2
<S> <C> <C> <C> <C>
Class A 17.84% 12.72% 15.02% 13.03%
Class B 18.09 12.84 N/A 15.81
Class C 22.09 N/A N/A 18.05
Class Z 24.43 N/A N/A 25.51
</TABLE>

Past performance is not indicative of future results. Principal and investment
return will fluctuate so that an investor's shares, when redeemed, may be worth
more or less than their original cost.

1Source: Prudential Investments Fund Management and Lipper Analytical Services.
The cumulative total returns do not take into account sales charges. The
average annual total returns do take into account applicable sales charges.
The Fund charges a maximum front-end sales load of 5% for Class A shares and a
declining contingent deferred sales charge (CDSC) of 5%, 4%, 3%, 2%, 1% and 1%
for six years for Class B shares. Class B shares will automatically convert to
Class A shares, on a quarterly basis, approximately seven years after purchase.
Class C shares have a 1% CDSC for one year. Class Z shares are not subject to a
sales charge or distribution fee.

2Inception dates: Class A, 4/9/87; Class B, 6/10/91; Class C, 8/1/94; and Class
Z, 3/18/97.

3Lipper average returns are for all funds in each share class for the
six-month, one-, five-, and ten-year periods.

***Lipper Since Inception returns are 259.3% for Class A; 146.9% for Class B;
81.6% for Class C; and 11.8% for Class Z based on all funds in each share
class.

(D)The Russell Mid-Cap Growth Index is comprised of U.S. stocks taken from the
bottom 800 stocks included in the Russell 1000 Index that exhibit growth
characteristics.

How Investments Compared.
(As of 6/30/98)
(CHART)

Source: Lipper Analytical Services. Financial markets change, so a mutual
fund's past performance should never be used to predict future results. The
risks to each of the investments listed above are different -- we provide
12-month total returns for several Lipper mutual fund categories to show you
that reaching for higher returns means tolerating more risk. The greater the
risk, the larger the potential reward or loss. In addition, we've included
historical 20-year average annual returns. These returns assume the
reinvestment of dividends.

U.S. Growth Funds will fluctuate a great deal. Investors have received higher
historical total returns from stocks than from most other investments. Smaller
capitalization stocks offer greater potential for long-term growth but may be
more volatile than larger capitalization stocks.

General Bond Funds provide more income than stock funds, which can help smooth
out their total returns year by year. But their prices still fluctuate
(sometimes significantly) and their returns have been historically lower than
those of stock funds.

General Municipal Debt Funds invest in bonds issued by state governments,
state agencies and/or municipalities. This investment provides income that is
usually exempt from federal and state income taxes.

U.S. Taxable Money Funds attempt to preserve a constant share value; they
don't fluctuate much in price but, historically, their returns have been
generally among the lowest of the major investment categories.

<PAGE>

William H. Chenoweth, Fund Manager
(PHOTO)

Portfolio
Manager's Report
The Nicholas-Applegate Growth Equity Fund seeks to deliver capital appreciation
through investment in growth companies with market capitalizations
predominantly between $500 million and $5 billion. Our bottom-up growth
philosophy focuses on identifying and investing in stocks meeting our criteria
of sustainable, accelerating earnings growth and market leadership. There can
be no assurance that the Fund will achieve its investment objective.

Overview.
We are committed to building the Fund using a bottom-up stock selection
process. We believe this time-tested method of selecting stocks based on their
individual merit, rather than focusing on the top-down approach of choosing
stocks dependent on market, monetary, political, fiscal or economic trends,
has provided investors with attractive long-term results.

Strategy Session.
- -------------------------------------------------------------------------------
How We Invest.
Our portfolio management team uses three strict criteria in the stock selection
process: evidence of positive fundamental change, sustainable earnings growth,
and timeliness of investment. Our sell discipline is non-emotional. When a
stock fails to meet these three criteria, it is replaced with a more
appropriate candidate. This allows us to constantly move the portfolio toward
strength.

Nicholas-Applegate concentrates on individual companies, not specific
industries. We have one of the most comprehensive databases in the industry.
Daily, we screen more than 4,500 companies on a real-time basis, analyzing news
and data to apply in the investment process. In addition, we have an extensive
network of local and regional analysts providing insight on firms they closely
follow. We believe these factors will help us invest in companies that will
generate the excellent earnings growth necessary to deliver superior long-term
capital appreciation.

Volatility was evident during the second quarter as investors drove technology
stock prices down in May, only to use June as a buying opportunity. Unable to
find companies that meet our strict stock selection criteria, we reduced our
holdings in the energy, health care services, and utility sectors.

We were able to find several opportunities for growth within the retail trade
industry, specifically in department/discount stores and specialty chains such
as Lowes, and Bed Bath and Beyond. We attribute the growth in retail trade to
the strong economic environment.

Portfolio Composition.
Sectors expressed as a percentage of
net assets as of 6/30/98.
(CHART)

<PAGE>

What Went Well.
- -------------------------------------------------
Finding several quality candidates in the consumer services industry, the Fund
was overweight compared to the index. Our stock selection process resulted in
superior gains for our overweighted consumer services and commercial/industrial
sectors compared to the same categories in the Russell Mid-Cap benchmark.

Holdings such as productivity software provider Compuware and wholesale
warehouse operator Costco benefited from a strong economic environment and
increased consumer spending. Health Management Associates posted exceptional
gains during June, as did Ciena Corporation, a telecommunications designer and
manufacturer.

Based on the fundamental strengths of companies we identified, we increased our
weightings from first quarter on a stock-by-stock basis in retail, technology,
and financial services.

And Not So Well.
- -------------------------------------------------
Valuations in today's market are being distorted by investor obsession with a
select group of large-cap stocks. Seven stocks have accounted for over a third
of the gain in the S&P 500 this year. These seven stocks have P/E ratios
above 50. Valuations in the mid- and small-cap markets are more reasonable,
but the market is only beginning to recognize this situation.

Diamond Offshore suffered from the changing energy sector environment that
reflects weak oil prices, lower day rates, and rig delays.

Several of our technology stocks, BMC Software and Veritas Software,
contributed strongly to the Fund's performance early in the year, but fear of
earnings disappointments caused a negative impact on technology holdings such
as Hyperion Software and Sundstrand.

Five Largest Holdings.
2.6% Robert Half Int'l., Inc.
Business Services
2.3% Watson Pharmaceuticals, Inc.
Drugs & Health Care
2.3% Uniphase Corp.
Electronic Components
2.3% Health Mgmt. Assoc., Inc.
Drugs & Health Care
2.2% Compuware Corp.
Computer Software

Expressed as a percentage of net assetsas of 6/30/98. Holdings are subject to
change.

Looking Ahead.
- -------------------------------------------------
Our outlook for the Growth Equity Fund is very positive, based on the favorable
outlook for mid-cap companies. We base this opinion on the prospects for
continued low inflation, low interest rates, and highly attractive valuations
for mid-cap stocks. Confident in our stock selections and the market's renewed
interest in mid-size companies, we believe the Growth Equity Fund is
well-positioned to build on the renewed mid-cap marketplace recognition.

1
<PAGE>

NICHOLAS-APPLEGATE FUND, INC. Portfolio of Investments
NICHOLAS-APPLEGATE GROWTH EQUITY FUND June 30, 1998 (Unaudited)
- --------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
- --------------------------------------------------------
<C> <S> <C>
COMMON STOCKS--97.7%
CAPITAL GOODS--19.1%
Construction--0.7%
103,900 Champion Enterprises,
Inc.*.................... $ 3,052,062
------------
Drugs & Healthcare--1.5%
81,200 Biomet, Inc................ 2,684,675
79,800 Safeskin Corp.*............ 3,281,775
------------
5,966,450
------------
Retail/Wholesale Specialty Chain--16.9%
33,100 Bed Bath & Beyond, Inc.*... 1,714,994
77,700 Borders Group, Inc.*....... 2,874,900
140,600 Costco Companies, Inc.*.... 8,866,587
187,575 Dollar Tree Stores Inc.*... 7,620,234
190,200 Family Dollar Stores,
Inc...................... 3,518,700
11,500 General Nutrition Cos.*.... 357,938
255,600 Kmart Corp.*............... 4,920,300
152,800 Kohl's Corp.*.............. 7,926,500
80,800 Lowe's Companies, Inc...... 3,277,450
198,650 Men's Wearhouse, Inc.*..... 6,555,450
112,900 Meyer, (Fred), Inc.*....... 4,798,250
91,400 NBTY, Inc.................. 1,679,475
58,500 Office Depot, Inc.*........ 1,846,406
111,800 Safeway Inc.*.............. 4,548,863
51,100 Stage Stores, Inc.*........ 2,312,275
295,800 TJX Companies, Inc......... 7,136,175
------------
69,954,497
------------
CONSUMER NONDURABLES--23.0%
Aerospace--1.6%
58,200 Gulfstream Aerospace
Corp.*................... 2,706,300
71,700 Sundstrand Corp............ 4,104,825
------------
6,811,125
------------
Airlines--1.9%
97,500 ASA Holdings, Inc.......... $ 4,838,437
98,300 Comair Holdings, Inc....... 3,035,013
------------
7,873,450
------------
Automotive Equipment--1.5%
41,000 Federal-Mogul Corp......... 2,767,500
79,600 Tower Automotive Inc.*..... 3,412,850
------------
6,180,350
------------
Business Services--5.5%
85,850 Concord EFS, Inc.*......... 2,242,831
190,800 Robert Half International
Inc.*.................... 10,660,950
108,900 Romac International,
Inc.*.................... 3,307,838
150,600 Snyder Communications
Inc.*.................... 6,626,400
------------
22,838,019
------------
Drugs & Healthcare--10.1%
50,500 Allegiance Corp............ 2,588,125
65,900 ALZA Corp.*................ 2,850,175
121,000 Elan Corp. PLC (ADR)*...... 7,781,812
282,500 Health Management Assoc.,
Inc.*.................... 9,446,094
148,500 Omnicare, Inc.............. 5,661,563
151,200 PharMerica, Inc.*.......... 1,823,850
46,200 Sepracor, Inc.*............ 1,917,300
205,900 Watson Pharmaceuticals,
Inc.*.................... 9,612,956
------------
41,681,875
------------
Hotels & Restaurants--0.7%
75,600 CKE Restaurants, Inc....... 3,118,500
------------
Leisure And Recreation--1.7%
176,700 Carnival Corp.............. 7,001,737
------------
ENERGY--4.9%
Electrical Utilities--0.6%
44,600 AES Corp.*................. 2,344,288
------------
Oil & Gas-Production/Pipeline--0.6%
65,100 Diamond Offshore Drilling,
Inc...................... 2,604,000
------------
</TABLE>
See Notes to Financial Statements. 2
<PAGE>
<PAGE>

NICHOLAS-APPLEGATE FUND, INC. Portfolio of Investments
NICHOLAS-APPLEGATE GROWTH EQUITY FUND June 30, 1998 (Unaudited)
- --------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
- --------------------------------------------------------
<C> <S> <C>
Oil Services--3.7%
231,200 Global Industries, Ltd.*... $ 3,901,500
136,100 Tuboscope Inc.*............ 2,687,975
103,100 Veritas DGC, Inc.*......... 5,148,556
41,400 Western Atlas Inc.*........ 3,513,825
------------
15,251,856
------------
ENVIRONMENTAL--2.2%
Pollution Control Equipment &
Service--2.2%
277,900 Allied Waste Industries,
Inc.*.................... 6,669,600
56,400 American Disposable
Services, Inc.*.......... 2,643,750
------------
9,313,350
------------
FINANCIAL SERVICES--7.9%
Financial/Business Services--7.9%
108,100 Amvescap PLC (ADR)......... 5,310,413
31,200 Associates First Capital
Corp..................... 2,398,500
89,600 Donaldson, Lufkin &
Jenrette, Inc............ 4,552,800
109,100 Federated Investors,
Inc.*.................... 2,018,350
114,300 FINOVA Group, Inc.......... 6,472,237
18,500 Hartford Life, Inc......... 1,053,344
56,100 Heller Financial, Inc.*.... 1,683,000
42,300 Merrill Lynch & Co.,
Inc...................... 3,902,175
51,900 Newcourt Credit Group
Inc...................... 2,552,831
72,850 Paychex, Inc............... 2,964,084
------------
32,907,734
------------
GENERAL BUSINESS--12.7%
Advertising--1.1%
159,450 Outdoor Systems, Inc.*..... 4,464,600
------------
Building Products--1.1%
64,700 Southdown, Inc............. 4,617,963
------------
Home Furnishings--1.8%
120,800 Shaw Industries, Inc....... 2,129,100
166,000 WestPoint Stevens, Inc.*... 5,478,000
------------
7,607,100
------------
Media--7.2%
173,000 Chancellor Media Corp.*.... $ 8,590,531
68,400 Clear Channel
Communications, Inc.*.... 7,464,150
102,100 Cox Communications,
Inc.*.................... 4,945,469
94,100 Jacor Communications,
Inc.*.................... 5,551,900
124,200 USA Networks, Inc.*........ 3,120,525
------------
29,672,575
------------
Printing & Publishing--1.5%
160,000 Valassis Communications,
Inc.*.................... 6,170,000
------------
TECHNOLOGY--27.9%
Computer Networks--2.4%
88,800 Ascend Communications,
Inc.*.................... 4,401,150
78,800 Network Appliance, Inc.*... 3,068,275
90,500 Xylan Corp.*............... 2,698,031
------------
10,167,456
------------
Computer Services--4.8%
114,500 Acxiom Corp.*.............. 2,855,344
37,700 America Online, Inc.*...... 3,996,200
71,900 Apple Computer, Inc.*...... 2,062,631
35,200 Ceridian Corp.*............ 2,068,000
92,700 Complete Busines Solutions
Inc.*.................... 3,331,406
40,600 Computer Sciences Corp.*... 2,598,400
61,200 Sterling Commerce, Inc.*... 2,968,200
------------
19,880,181
------------
Computer Software--10.2%
100,000 AXENT Technologies Inc.*... 3,062,500
148,600 BMC Software Inc.*......... 7,717,912
79,000 Cambridge Tech. Partners,
Inc.*.................... 4,315,375
175,000 Compuware Corp.*........... 8,946,875
22,400 Hyperion Software Corp.*... 638,400
50,500 Keane, Inc*................ 2,828,000
153,400 Learning Company, Inc.
(The)*................... 4,544,475
152,400 VERITAS Software Corp.*.... 6,305,550
83,300 Visio Corp.*............... 3,977,575
------------
42,336,662
------------
</TABLE>
See Notes to Financial Statements. 3
<PAGE>
<PAGE>

NICHOLAS-APPLEGATE FUND, INC.
NICHOLAS-APPLEGATE GROWTH EQUITY FUND
Statement of Assets and Liabilities (Unaudited)
<TABLE>
<CAPTION>
Assets June 30, 1998
-------------
<S> <C>
Investments, at value (cost $323,918,088)................................................. $ 407,830,031
Cash...................................................................................... 6,336,736
Receivable for investments sold........................................................... 3,976,651
Receivable for Fund shares sold........................................................... 213,623
Other assets.............................................................................. 40,013
Dividends and interest receivable......................................................... 35,564
-------------
Total assets.......................................................................... 418,432,618
-------------
Liabilities
Payable for investments purchased......................................................... 1,769,506
Payable for Fund shares reacquired........................................................ 1,476,040
Management fee payable.................................................................... 314,002
Distribution fee payable.................................................................. 241,629
Accrued expenses.......................................................................... 189,213
-------------
Total liabilities..................................................................... 3,990,390
-------------
Net Assets................................................................................ $ 414,442,228
-------------
-------------
Net assets were comprised of:
Common stock, at par.................................................................... $ 284,900
Paid-in capital in excess of par........................................................ 288,032,751
-------------
288,317,651
Accumulated net investment loss......................................................... (3,488,484)
Accumulated net realized gain on investments............................................ 45,701,118
Net unrealized appreciation on investments.............................................. 83,911,943
-------------
Net assets, June 30, 1998................................................................. $ 414,442,228
-------------
-------------
Class A:
Net asset value and redemption price per share
($136,187,209 / 8,779,266 shares of common stock issued and outstanding).............. $15.51
Maximum sales charge (5% of offering price)............................................. .82
-------------
Maximum offering price to public........................................................ $16.33
-------------
-------------
Class B:
Net asset value, offering price and redemption price per share
($269,845,463 / 19,126,018 shares of common stock issued and outstanding)............. $14.11
-------------
-------------
Class C:
Net asset value, offering price and redemption price per share
($6,727,532 / 476,811 shares of common stock issued and outstanding).................. $14.11
-------------
-------------
Class Z:
Net asset value, offering price and redemption price per share
($1,682,024 / 107,884 shares of common stock issued and outstanding).................. $15.59
-------------
-------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 5
<PAGE>
<PAGE>

NICHOLAS-APPLEGATE FUND, INC.
NICHOLAS-APPLEGATE GROWTH EQUITY FUND
Statement of Operations (Unaudited)

<TABLE>
<CAPTION>
Six Months
Ended
June 30,
Net Investment Loss 1998
------------
<S> <C>
Income
Dividends (net of foreign
withholding taxes of $343)........ $ 273,252
Interest............................ 282,390
------------
Total income...................... 555,642
------------
Expenses
Management fees..................... 1,977,157
Distribution fee--Class A........... 119,528
Distribution fee--Class B........... 1,377,896
Distribution fee--Class C........... 33,479
Transfer agent's fees and
expenses............................ 330,000
Custodian's fees and expenses....... 50,000
Reports to shareholders............. 45,000
Directors' fees..................... 38,000
Registration fees................... 25,000
Audit fees and expense.............. 18,000
Insurance expense................... 17,000
Legal fees and expenses............. 7,000
Miscellaneous....................... 6,066
------------
Total expenses.................... 4,044,126
------------
Net investment loss................... (3,488,484)
------------
Realized and Unrealized
Gain (Loss) on Investments
Net realized gain on investment
transactions........................ 34,518,923
Net change in unrealized appreciation
of investments...................... 9,490,730
------------
Net gain on investments............... 44,009,653
------------
Net Increase in Net Assets
Resulting from Operations............. $ 40,521,169
------------
------------
</TABLE>

NICHOLAS-APPLEGATE FUND, INC.
NICHOLAS-APPLEGATE GROWTH EQUITY FUND
Statement of Changes in Net Assets (Unaudited)

<TABLE>
<CAPTION>
Six Months
Ended Year Ended
Decrease June 30, December 31,
in Net Assets 1998 1997
------------- -------------
<S> <C> <C>
Operations
Net investment loss... $ (3,488,484) $ (6,194,430)
Net realized gain on
investment
transactions........ 34,518,923 94,942,716
Net change in
unrealized
appreciation/depreciation
on investments...... 9,490,730 (18,521,412)
------------- -------------
Net increase in net
assets resulting
from operations..... 40,521,169 70,226,874
------------- -------------
Distributions to
shareholders from net
realized gains on
investments
Class A............. (3,758,446) (27,098,267)
Class B............. (8,545,169) (63,813,523)
Class C............. (204,873) (1,442,170)
Class Z............. (37,785) (66,424)
------------- -------------
(12,546,273) (92,420,384)
------------- -------------
Fund share transactions
(Note 5)
(net of share
conversions)
Net proceeds from
shares subscribed... 100,020,951 543,622,835
Net asset value of
shares issued to
shareholders in
reinvestment of
distributions....... 11,673,175 84,714,423
Cost of shares
reacquired.......... (150,774,128) (650,219,421)
------------- -------------
Net decrease in net
assets from Fund
share
transactions........ (39,080,002) (21,882,163)
------------- -------------
Total decrease.......... (11,105,106) (44,075,673)
Net Assets
Beginning of period..... 425,547,334 469,623,007
------------- -------------
End of period........... $ 414,442,228 $ 425,547,334
------------- -------------
------------- -------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 6
<PAGE>
<PAGE>

NICHOLAS-APPLEGATE FUND, INC.
NICHOLAS-APPLEGATE GROWTH EQUITY FUND
Notes to Financial Statements (Unaudited)

Nicholas-Applegate Growth Equity Fund (the 'Fund') is currently the only
series of Nicholas-Applegate Fund, Inc. The Fund commenced operations as a
closed-end, diversified management investment company on April 9, 1987. On June
7, 1991, the Fund ceased operations as a closed-end investment company.
Effective June 10, 1991, trading in the Fund's shares was discontinued on the
New York Stock Exchange and the Fund commenced operations as an open-end,
diversified management investment company.
The Fund's investment objective is capital appreciation. It seeks to achieve
this objective by investing primarily in common stocks and in securities
convertible into or excercisable for common stocks (such as convertible
preferred stocks, convertible debentures and warrants), the earnings and
securities prices of which the investment adviser expects to grow at a rate
above that of the S&P 500.

Note 1. Accounting The following is a summary
Policies of significant accounting poli-
cies followed by the Fund in the preparation of
its financial statements.
Security Valuation: Investments are stated at value. Investments for which
market quotations are readily available are valued at the last reported sales
price. If there are no sales on the date of valuation, then investments are
valued at the mean between the most recently quoted bid and asked prices
provided by principal market makers. Securities for which market quotations are
not readily available are valued at fair value as determined in good faith by or
under the direction of the Fund's Board of Directors. Short-term securities are
valued at amortized cost.
In connection with transactions in repurchase agreements, it is the Fund's
policy that its custodian or designated subcustodians, as the case may be under
triparty repurchase agreements, take possession of the underlying collateral
securities, the value of which exceeds the principal amount of the repurchase
transaction, including accrued interest. If the seller defaults and the value of
the collateral declines or if bankruptcy proceedings are commenced with respect
to the seller of the security, realization of the collateral by the Fund may be
delayed or limited.
Securities Transactions and Net Investment Income: Securities transactions are
recorded on the trade date. Real-
ized and unrealized gains and losses from security transactions are calculated
on the identified cost basis. Dividend income is recorded on the ex-dividend
date and interest income is recorded on an accrual basis. Expenses are recorded
on the accrual basis which may require the use of certain estimates by
management.
Net investment income (other than distribution fees) and unrealized and
realized gains or losses are allocated daily to each class of shares based upon
the relative proportion of net assets of each class at the beginning of the day.
Dividends and Distributions: Dividends from net investment income and
distributions of net capital gains in excess of capital loss carryforwards, if
any, are declared and paid annually. Dividends and distributions are recorded on
the ex-dividend date.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.
Federal Income Taxes: It is the Fund's policy to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to shareholders.
Therefore, no tax provision is required.
Withholding taxes on foreign dividends have been provided for in accordance
with the Fund's understanding of the applicable country's tax rules and rates.

Note 2. Agreements The Fund has a management
agreement with Prudential Investments Fund
Management LLC ('PIFM'). Pursuant to the management agreement, PIFM has
responsibility for all investment advisory services and supervises the
subadviser's performance of such services. PIFM has entered into a subadvisory
agreement with Nicholas-Applegate Capital Management ('NACM'); NACM furnishes
investment advisory services in connection with the management of the Fund. PIFM
pays for the services of the subadviser, the compensation of officers of the
Fund who are employees of PIFM, occupancy and certain clerical and bookkeeping
costs of the Fund. The Fund bears all other costs and expenses.
The management fee paid PIFM is computed daily and payable monthly at an
annual rate of .95% of the average
- --------------------------------------------------------------------------------
7
<PAGE>
<PAGE>
daily net assets of the Fund. PIFM pays NACM, as compensation for its services
pursuant to the subadvisory agreement, a fee at the rate of .75% of the average
daily net assets of the Fund. During the six months ended June 30, 1998, PIFM
earned $1,977,157 in management fees of which it paid $1,561,954 to NACM under
the foregoing agreements.
The Fund has a distribution agreement with Prudential Securities Incorporated
('PSI'), which acts as the distributor of the Class A, Class B, Class C and
Class Z shares of the Fund. The Fund compensates PSI for distributing and
servicing the Fund's Class A, Class B and Class C shares, pursuant to plans of
distribution, (the 'Class A, B and C Plans') regardless of expenses actually
incurred by them. The distribution fees for Class A, B and C shares are accrued
daily and payable monthly. No distribution or service fees are paid to PSI as
distributor for the Class Z shares of the Fund. Effective July 1, 1998,
Prudential Investment Management Services LLC will become the distributor of the
Fund and will serve the Fund under the same terms and conditions as under the
arrangement with PSI.
Pursuant to the Class A, B and C Plans, the Fund compensates PSI for
distribution-related activities at an annual rate of up to .30 of 1%, 1% and 1%,
of the average daily net assets of the Class A, B and C shares, respectively.
Such expenses under the Plans were .18 of 1% of average daily net assets of
Class A shares and 1% of the average daily net assets of both the Class B and
Class C shares, respectively, for the six months ended June 30, 1998.
PSI has advised the Fund that it has received approximately $59,500 in
front-end sales charges resulting from sales of Class A shares during the six
months ended June 30, 1998. From these fees, PSI paid such sales charges to
PRUCO Securities Corporation ('PRUSEC'), an affiliated broker-dealer, which in
turn paid commissions to salespersons and incurred other distribution costs.
PSI advised the Fund that for the six months ended June 30, 1998, it received
approximately $269,600 and $1,900 in contingent deferred sales charges imposed
upon certain redemptions by Class B and C shareholders, respectively.
PSI, PIFM and PRUSEC are (indirect) wholly owned subsidiaries of The
Prudential Insurance Company of America. ('Prudential')
The Fund, along with other affiliated registered investment companies (the
'Funds'), has a credit agreement (the 'Agreement') with an unaffiliated lender.
The maximum commitment under the Agreement is $200,000,000. Interest on any such
borrowings outstanding will be at market rates. The purpose of the Agreement is
to serve as an alternative source of funding for capital share redemptions. The
Fund has not borrowed any amounts pursuant to the Agreement as of June 30, 1998.
The Funds pay a commitment fee at an annual rate of .055 of 1% on the unused
portion of the credit facility. The commitment fee is accrued and paid quarterly
on a pro rata basis by the Funds. The Agreement expired on December 30, 1997 and
has been extended through December 29, 1998 under the same terms.

Note 3. Other Prudential Mutual Fund Ser-
Transactions vices LLC ('PMFS'), a
with Affiliates wholly owned subsidiary of
PIFM, serves as the Fund's transfer agent. During
the six months ended June 30, 1998, the Fund incurred fees of approximately
$300,000 for the services of PMFS. As of June 30, 1998, approximately $50,000 of
such fees were due to PMFS. Transfer agent fees and expenses in the Statement of
Operations also include certain out of pocket expenses paid to nonaffiliates.

Note 4. Portfolio Purchases and sales of invest-
ment securities, other than Securities
short-term investments, for the six months ended
June 30, 1998 aggregated $351,704,891 and $408,251,163, respectively.
The cost basis of investments for federal income tax purposes at June 30,
1998 was $324,005,032 and, accordingly, net unrealized appreciation of
investments for federal income tax purposes was $83,824,999 (gross unrealized
appreciation--$90,670,727; gross unrealized depreciation--$6,845,728).

Note 5. Capital The Fund offers Class A,
Class B, Class C and Class Z shares. Class A
shares are sold with a front-end sales charge of
up to 5%. Class B shares are sold with a contingent deferred sales charge which
declines from 5% to zero depending upon the period of time the shares are held.
Class C shares are sold with a contingent deferred sales charge of 1% during the
first year. Class B shares will automatically convert to Class A shares on a
quarterly basis approximately seven years after purchase. A special exchange
privilege is also available for shareholders who qualified to purchase Class A
shares at net asset value. Effective March 18, 1997, the Fund commenced offering
Class Z shares. Class Z shares are not subject to any sales or redemption charge
and are offered exclusively for sale to a limited group of investors.
The Fund has authorized 200 million shares of common stock at $.01 par value
per share equally divided into four
- --------------------------------------------------------------------------------
8
<PAGE>
<PAGE>
classes, designated Class A, Class B, Class C and Class Z shares.Transactions
in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- ------------------------------ ----------- -------------
<S> <C> <C>
Six months ended June 30,
1998:
Shares sold................... 3,609,874 $ 53,959,759
Shares issued in reinvestment
of dividends and
distributions............... 222,298 3,296,682
Shares reacquired............. (4,565,518) (68,608,851)
----------- -------------
Net decrease in shares
outstanding before
conversion.................. (733,346) (11,352,410)
Shares issued upon conversion
from Class B................ 256,301 3,919,754
----------- -------------
Net decrease in shares
outstanding................. (477,045) $ (7,432,656)
----------- -------------
----------- -------------
Year ended December 31, 1997:
Shares sold................... 26,028,147 $ 403,257,239
Shares issued in reinvestment
of dividends and
distributions............... 1,629,888 23,021,141
Shares reacquired............. (28,489,469) (443,979,190)
----------- -------------
Net decrease in shares
outstanding before
conversion.................. (831,434) (17,700,810)
Shares issued upon conversion
from Class B................ 670,378 10,138,513
----------- -------------
Net decrease in shares
outstanding................. (161,056) $ (7,562,297)
----------- -------------
----------- -------------
<CAPTION>
Class B
- ------------------------------
<S> <C> <C>
Six months ended June 30,
1998:
Shares sold................... 3,191,352 $ 42,794,987
Shares issued in reinvestment
of distributions............ 602,652 8,141,821
Shares reacquired............. (5,825,716) (79,176,815)
----------- -------------
Net decrease in shares
outstanding before
conversion.................. (2,031,712) (28,240,007)
Shares reacquired upon
conversion into Class A..... (281,022) (3,919,754)
----------- -------------
Net decrease in shares
outstanding................. (2,312,734) $ (32,159,761)
----------- -------------
----------- -------------
Year ended December 31, 1997:
Shares sold................... 9,457,319 $ 135,337,537
Shares issued in reinvestment
of distributions............ 4,638,652 60,246,458
Shares reacquired............. (13,888,004) (200,836,623)
----------- -------------
Net increase in shares
outstanding before
conversion.................. 207,967 (5,252,628)
Shares reacquired upon
conversion into Class A..... (721,300) (10,138,513)
----------- -------------
Net decrease in shares
outstanding................. (513,333) $ (15,391,141)
----------- -------------
----------- -------------
<CAPTION>
Class C Shares Amount
- ------------------------------ ----------- -------------
<S> <C> <C>
Six months ended June 30,
1998:
Shares sold................... 140,472 $ 1,878,492
Shares issued in reinvestment
of distributions............ 14,574 196,889
Shares reacquired............. (187,426) (2,540,078)
----------- -------------
Net decrease in shares
outstanding................. (32,380) $ (464,697)
----------- -------------
----------- -------------
Year ended December 31, 1997:
Shares sold................... 297,583 $ 4,319,397
Shares issued in reinvestment
of distributions............ 106,388 1,380,420
Shares reacquired............. (360,051) (5,302,665)
----------- -------------
Net increase in shares
outstanding................. 43,920 $ 397,152
----------- -------------
----------- -------------
<CAPTION>
Class Z
- ------------------------------
<S> <C> <C>
Six months ended June 30,
1998:
Shares sold................... 91,330 $ 1,387,713
Shares issued in reinvestment
of distributions............ 2,536 37,783
Shares reacquired............. (29,566) (448,384)
----------- -------------
Net increase in shares
outstanding................. 64,300 $ 977,112
----------- -------------
----------- -------------
March 18, 1997(a) through
December 31, 1997:
Shares sold................... 45,102 $ 708,662
Shares issued in reinvestment
of distributions 4,760 66,404
Shares reacquired (6,278) (100,943)
----------- -------------
Net increase in shares
outstanding 43,584 $ 674,123
----------- -------------
----------- -------------
</TABLE>
- ---------------
(a) Commencement of offering of Class Z shares.
- --------------------------------------------------------------------------------
9
<PAGE>
<PAGE>

NICHOLAS-APPLEGATE FUND, INC.
NICHOLAS-APPLEGATE GROWTH EQUITY FUND
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Class A
----------------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
June 30, ----------------------------------------------------------------
1998 1997 1996 1995(a) 1994(a) 1993(a)
----------- -------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period......................... $ 14.47 $ 15.41 $ 15.18 $ 11.99 $ 13.56 $ 12.77
----------- -------- -------- -------- ------- -------
Income from investment
operations:
Net investment loss.............. (.08) (.12) (.14) (.11) (.07) (.07)
Net realized and unrealized gain
(loss) on investment
transactions................... 1.56 2.60 2.64 3.82 (1.19) 2.63
----------- -------- -------- -------- ------- -------
Total from investment
operations..................... 1.48 2.48 2.50 3.71 (1.26) 2.56
----------- -------- -------- -------- ------- -------
Less distributions:
Distributions from net realized
gains from investment
transactions................... (.44) (3.42) (2.27) (.52) (.31) (1.77)
----------- -------- -------- -------- ------- -------
Net asset value, end of period... $ 15.51 $ 14.47 $ 15.41 $ 15.18 $ 11.99 $ 13.56
----------- -------- -------- -------- ------- -------
----------- -------- -------- -------- ------- -------
TOTAL RETURN(b):................. 10.37% 17.33% 16.45% 31.20% (9.53)% 20.26%

RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000).......................... $ 136,187 $133,973 $145,120 $124,340 $88,069 $97,596
Average net assets (000)......... $ 133,909 $139,933 $136,482 $109,740 $93,620 $90,332
Ratios to average net assets:
Expenses, including
distribution fee............. 1.39%(e) 1.37% 1.41% 1.44% 1.49%(d) 1.42%(d)
Expenses, excluding
distribution fee............... 1.21%(e) 1.19% 1.23% 1.27% 1.32%(d) 1.30%(d)
Net investment loss............ (1.12)%(e) (.82)% (.93)% (.83)% (.59)% (.53)%
For Class A, B, C and Z shares:
Portfolio turnover rate(c)....... 85% 182% 113% 106% 110% 112%
</TABLE>

- ---------------
(a) Calculated based upon weighted average shares outstanding during the
periods due to effects of open-ending, Fund share sales and the resulting
share issuance from the stock rights offering.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for periods less than a full year are not
annualized.
(c) Portfolio turnover is calculated on the basis of the Fund as a whole
without distinguishing between the classes of shares issued.
(d) Current year amounts have been restated from prior periods presentation.
(e) Annualized.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 10
<PAGE>
<PAGE>

NICHOLAS-APPLEGATE FUND, INC.
NICHOLAS-APPLEGATE GROWTH EQUITY FUND
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Class B
------------------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
June 30, ------------------------------------------------------------------
1998 1997 1996 1995(a) 1994(a) 1993(a)
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period....................... $ 13.26 $ 14.48 $ 14.49 $ 11.56 $ 13.18 $ 12.56
----------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment loss............ (.14) (.23) (.24) (.22) (.17) (.18)
Net realized and unrealized
gain (loss) on investment
transactions................. 1.43 2.43 2.50 3.67 (1.14) 2.57
----------- -------- -------- -------- -------- --------
Total from investment
operations................... 1.29 2.20 2.26 3.45 (1.31) 2.39
----------- -------- -------- -------- -------- --------
Less distributions:
Distributions from net realized
gains from investment
transactions................. (.44) (3.42) (2.27) (.52) (.31) (1.77)
----------- -------- -------- -------- -------- --------
Net asset value, end of
period....................... $ 14.11 $ 13.26 $ 14.48 $ 14.49 $ 11.56 $ 13.18
----------- -------- -------- -------- -------- --------
----------- -------- -------- -------- -------- --------
TOTAL RETURN(b):............... 9.88% 16.48% 15.54% 30.11% (10.20)% 19.21%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)........................ $ 269,845 $284,191 $317,768 $290,751 $257,059 $252,911
Average net assets (000)....... $ 277,863 $300,520 $304,841 $265,597 $261,285 $179,456
Ratios to average net assets:
Expenses, including
distribution fee........... 2.21%(d) 2.19% 2.23% 2.27% 2.32%(c) 2.30%(c)
Expenses, excluding
distribution fee............. 1.21%(d) 1.19% 1.23% 1.27% 1.32%(c) 1.30%(c)
Net investment loss.......... (1.94)%(d) (1.64)% (1.75)% (1.66)% (1.39)% (1.40)%
</TABLE>

- ---------------
(a) Calculated based upon weighted average shares outstanding during the
periods due to effects of open-ending, Fund share sales and the resulting
share issuance from the stock rights offering.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for periods less than a full year are not
annualized.
(c) Current year amounts have been restated from prior periods presentation.
(d) Annualized.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 11
<PAGE>
<PAGE>

NICHOLAS-APPLEGATE FUND, INC.
NICHOLAS-APPLEGATE GROWTH EQUITY FUND
Financial Highlights (Unaudited)
<TABLE>
<CAPTION>
Class C Class Z
--------------------------------------------------------- ----------------------------
August 1, March 18,
Six Months 1994(c) Six Months 1997(f)
Ended Year Ended December 31, Through Ended Through
June 30, -------------------------- December 31, June 30, December 31,
1998 1997 1996 1995(a) 1994(a) 1998 1997
----------- ------ ------ ------ ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period...................... $ 13.26 $14.48 $14.49 $11.56 $11.62 $ 14.53 $ 14.48
----------- ------ ------ ------ ------ ----------- ------
Income from investment
operations:
Net investment loss........... (.14) (.22) (.22) (.22) (.05) (.05) (.22)
Net realized and unrealized
gain (loss) on investment
transactions................ 1.43 2.42 2.48 3.67 (.01) 1.55 3.18
----------- ------ ------ ------ ------ ----------- ------
Total from investment
operations.................. 1.29 2.20 2.26 3.45 (.06) 1.50 2.96
----------- ------ ------ ------ ------ ----------- ------
Less distributions:
Distributions from net
realized gains from
investment transactions..... (.44) (3.42) (2.27) (.52) -- (.44) (2.91)
----------- ------ ------ ------ ------ ----------- ------
Net asset value, end of
period...................... $ 14.11 $13.26 $14.48 $14.49 $11.56 $ 15.59 $ 14.53
----------- ------ ------ ------ ------ ----------- ------
----------- ------ ------ ------ ------ ----------- ------
TOTAL RETURN(b):.............. 9.88% 16.48% 15.54% 30.11% (.52)% 10.46% 21.90%
RATIOS/
SUPPLEMENTAL DATA:
Net assets, end of period
(000)....................... $ 6,728 $6,750 $6,735 $4,897 $1,100 $ 1,682 $ 633
Average net assets (000)...... $ 6,751 $6,796 $5,862 $2,961 $ 225 $ 1,170 $ 121
Ratios to average net assets:
Expenses, including
distribution fee.......... 2.21%(d) 2.19% 2.23% 2.27% 6.23%(d)(e) 1.21%(d) 1.19%(d)
Expenses, excluding
distribution fee............ 1.21%(d) 1.19% 1.23% 1.27% 5.23%(d)(e) 1.21%(d) 1.19%(d)
Net investment loss......... (1.94)%(d) (1.64)% (1.75)% (1.63)% (3.36)%(d) (.93)%(d) (.85)%(d)
</TABLE>

- ---------------
(a) Calculated based upon weighted average shares outstanding during the
periods due to effects of open-ending, Fund share sales and the resulting
share issuance from the stock rights offering.
(b) Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for periods less than a full year are not
annualized.
(c) Commencement of offering Class C shares.
(d) Annualized.
(e) Current year amounts have been restated from prior periods presentation.
(f) Commencement of offering Class Z shares.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 12

<PAGE>

Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077

(800) 225-1852
http://www.prudential.com

Directors
Arthur E. Nicholas, Chairman
Dann V. Angeloff
Fred C. Applegate
Theodore J. Coburn
Robert F. Gunia
Arthur B. Laffer
Charles E. Young

Officers
Jack C. Marshall, President
Robert F. Gunia, Vice President
Grace C. Torres, Treasurer
Stephen M. Ungerman, Assistant Treasurer
S. Jane Rose, Secretary
Robert E. Carlson, Assistant Secretary
Deborah A. Docs, Assistant Secretary

Manager
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077

Investment Adviser
Nicholas-Applegate Capital Management
600 West Broadway
San Diego, CA 92101

Distributor
Prudential Investment Management Services LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077

Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171

Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 15005
New Brunswick, NJ 08906

Independent Accountants
Ernst & Young LLP
515 South Flower Street
Los Angeles, CA 90071

Legal Counsel
Paul, Hastings, Janofsky & Walker LLP
555 South Flower Street
Los Angeles, CA 90071

The views expressed in this report and information about the Fund's portfolio
holdings are for the period covered by this report and are subject to change
thereafter.

The accompanying financial statements as of June 30, 1998 were not audited and,
accordingly, no opinion is expressed on them.

This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.

<PAGE>

(LOGO)
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852

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