|AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 27, 2007
|---------------------------------------------------------------------
|SECURITIES ACT FILE NO. 002-30447                                    
|INVESTMENT COMPANY ACT FILE NO. 811-01728                            
|UNITED STATES                                                        
|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. 55                                      
|and/or                                                               
|REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940:     
|Amendment No. 34                                                     

|                                                                               |  |                                             |  | (Check Appropriate Box or Boxes)                                                                   
|------------------------------------------------------------------------------ |  | ------------------------------------------- |  | ---------------------------------------------------------------------------------------------------
|                                                                              
|                                                                               |  |                                             |  | NICHOLAS FUND, INC.                                                                                
|                                                                               |  |                                             |  | (Exact Name of Registrant as Specified in Charter)                                                 
|                                                                              
|                                                                               |  |                                             |  | 700 North Water Street                                                                             
|                                                                               |  |                                             |  | Milwaukee, WI                                                                                      
|                                                                               |  |                                             |  | (Address of Principal Executive Offices)                                                           
|                                                                              
|Registrant's Telephone Number, Including Area Code (414) 272-4650              |  |                                            
|                                                                              
|                                                                               |  |                                             |  | Jeffrey T. May, Senior Vice President                                                              
|                                                                               |  |                                             |  | Nicholas Fund, Inc.                                                                                
|                                                                               |  |                                             |  | 700 North Water Street                                                                             
|                                                                               |  |                                             |  | Milwaukee, WI 53202                                                                                
|                                                                               |  |                                             |  | (Name and Address of Agent for Service)                                                            
|                                                                              
|                                                                               |  |                                             |  | WITH A COPY TO:                                                                                    
|                                                                               |  |                                             |  | K. Thor Lundgren, Esq.                                                                             
|                                                                               |  |                                             |  | Marcia Y. Lucas, Esq.                                                                              
|                                                                               |  |                                             |  | Michael Best & Friedrich LLP                                                                       
|                                                                               |  |                                             |  | 100 East Wisconsin Avenue, Suite 1900                                                              
|                                                                               |  |                                             |  | Milwaukee, WI 53202                                                                                
|                                                                              
|It is proposed that this filing will become effective (check appropriate box): |  |                                            
|[                                                                              |  | ]                                           |  | Immediately upon filing pursuant to paragraph (b).                                                 
|[ x ]                                                                          |  | On July 31, 2007 pursuant to paragraph (b). |  |                                                                                                    
|[                                                                              |  | ]                                           |  | 60 days after filing pursuant to paragraph (a)(1).                                                 
|[                                                                              |  | ]                                           |  | On (date) pursuant to paragraph (a)(1).                                                            
|[                                                                              |  | ]                                           |  | 75 days after filing pursuant to paragraph (a)(2).                                                 
|[                                                                              |  | ]                                           |  | On (date) 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.                                                                     |  |                                            

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|PROSPECTUS                                                      
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|July 31, 2007                                                   
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|NICHOLAS FUND, INC.                                             
|                                                                
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|Consistencyin aWorldofChange                                    
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|[INSERT ARTWORK  OAK TREE]                                     
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|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.     
|Any representation to the contrary is a criminal offense.       
|                                                                
|                                                                
|                                                                
|                                                                
|700 North Water Street                                          
|Milwaukee, Wisconsin 53202                                      
|www.nicholasfunds.com                                           

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Nicholas Fund, Inc. (the "Fund") is a no-load, diversified fund. The Fund's investment objective is long-term growth.

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.

|Investment Adviser                                                 
|-------------------------------------------------------------------
|NICHOLAS COMPANY, INC.                                             
|                                                                   
|Minimum Initial Investment - $500                                  
|                                                                   
|TABLE OF CONTENTS                                                  
|                                                                   
|OVERVIEW                                                           
|INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND RISKS    
|FINANCIAL HIGHLIGHTS                                               
|THE FUND'S INVESTMENT ADVISER                                      
|PRICING OF FUND SHARES                                             
|PURCHASE OF FUND SHARES                                            
|REDEMPTION AND EXCHANGE OF FUND SHARES                             
|USE OF A PROCESSING INTERMEDIARY TO PURCHASE AND REDEEM FUND SHARES
|FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES                  
|TRANSFER OF FUND SHARES                                            
|DISTRIBUTION OF FUND SHARES                                        
|DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAX STATUS                    
|DIVIDEND AND DISTRIBUTION REINVESTMENT PLAN                        
|SYSTEMATIC WITHDRAWAL PLAN                                         
|TAX DEFERRED ACCOUNTS                                              
|DISCLOSURE OF PORTFOLIO HOLDINGS                                   
|FOR MORE INFORMATION ABOUT THE FUND                                

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.

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|OVERVIEW
|--------



|Investment Objective
|--------------------

The Fund strives to increase the value of your investment over the long-term ("long-term growth").



|Principal Investment Strategies
|-------------------------------

To pursue the Fund's goal of long-term growth, it primarily invests in common stocks of domestic medium-and large-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 billion as "small," between $2 billion and $10 billion as "medium" and greater
than $10 billion as "large." To a lesser extent, the Fund may invest in companies with small 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. It
is anticipated that 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.

For further information on the Fund's principal investment strategies and how the Fund invests, see "Investment Objective, Principal Investment Strategies and Risks."



|Principal Risks of Investing
|----------------------------

As with any mutual fund, the Fund cannot guarantee that it will achieve 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. If the value of the Fund shares or the values of the Fund's investments go down, you may lose money.

The principal risks of investing in the Fund are:

Market Risk Market risk involves the possibility that the value of the Fund's investments will fluctuate as the stock market fluctuates over short- or longer-term periods.
Common stock prices tend to be more volatile than other investment choices.

Portfolio-Specific Risk From time to time, the value of an individual company may decline due to a particular set of circumstances affecting that company, its industry or
certain companies within the industry, while having little or no impact on other similar companies within the industry. Although the Fund will invest most of its assets in the securities of medium- and large-sized companies, the Fund may face
additional risks due to its investments in small-sized companies. Securities of small- to medium-sized companies often fluctuate in price more than common stocks of larger companies.

Selection Risk -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.

Since there are risks inherent in all investments in securities, there is no assurance that the Fund's objective will be achieved.

For further information on the Fund's principal investment strategies and risks of investing in the Fund, see "Investment Objective, Principal Investment Strategies and Risks."

- 1 -

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|Performance
|-----------

The bar chart and table shown below provide some indication of the risks of investing in the Fund. They show the variability of the Fund's total return for the last ten calendar years(1)and how the Fund's historical performance compares with alternative broad measures of market performance.

|BAR CHART PLOT POINTS
|---------------------
|1997                 
|37.01%               

|(1) | The Fund's fiscal year end is March 31. The Fund's calendar year-to-date return (six months) as of June 30, 2007 was 6.75%.
|--- | ---------------------------------------------------------------------------------------------------------------------------
|   

For the ten calendar year periods shown in the above bar chart, the highest quarterly return was 19.29% (for the quarter ended December 31, 1998) and the lowest quarterly return was (15.97)% (for the quarter ended September 30, 2001).

This next table shows how the Fund's average annual total returns for the one, five and ten year periods ending on December 31, 2006 (the Fund's most recently completed calendar year), compared to the returns of the Standard & Poor's 500 Composite Stock Price Index ("S&P 500 Index"). The table also shows the Fund's average annual total returns after taxes on distributions and after taxes on distributions and the redemption of all of your Fund shares. After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.

|                                    |  | One    |  | Five  |  | Ten  
|----------------------------------- |  | ------ |  | ----- |  | -----
|                                    |  | Year   |  | Year  |  | Year 
|Nicholas Fund, Inc.                 |  |        |  |       |  |      
|Return Before Taxes                 |  | 9.34%  |  | 5.36% |  | 6.02%
|Return after Taxes on Distributions |  | 7.97%  |  | 4.74% |  | 4.63%
|Return After Taxes on Distributions |  |        |  |       |  |      
|and Sale of Fund Shares             |  | 7.84%  |  | 4.56% |  | 4.87%
|S&P 500 Index(1)                    |  | 15.79% |  | 6.19% |  | 8.42%

(1) The average annual total returns on the index do not reflect deductions for taxes, fees and expenses.

The S&P 500 Index is a capitalization-weighted index that represents the average performance of a group of stocks of 500 companies and is a widely used benchmark for large-capitalization U.S. stocks.

Of course, the Fund's past performance (before and after taxes) is no guarantee of its future returns.

- 2 -

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|FEES AND EXPENSES OF THE FUND
|-----------------------------

Fund investors pay various fees and 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 Fee                                              |  | None(1)
|Exchange Fee                                                |  | None   
|                                                           
|Annual Fund Operating Expenses(2)                           |  |        
|(expenses that are deducted from Fund assets)               |  |        
|Management Fees                                             |  | 0.65%  
|Distribution [and/or Service] (12b-1) Fees                  |  | None   
|Other Expenses                                              |  | 0.10%  
|Total Annual Fund Operating Expenses                        |  | 0.75%  

|(1) | The Fund's transfer agent charges $15.00 for each wire redemption.                                     
|--- | -------------------------------------------------------------------------------------------------------
|   
|(2) | Annual Fund Operating Expenses are based on expenses incurred for the fiscal year ended March 31, 2007.
|   

|Example: |  | This example is intended to help you compare the cost of investing in the Fund with the cost of
|-------- |  | -----------------------------------------------------------------------------------------------
|         |  | investing in other mutual funds.                                                               

|                                                                         |  | One  |  | Three |  | Five |  | Ten 
|------------------------------------------------------------------------ |  | ---- |  | ----- |  | ---- |  | ----
|                                                                         |  | Year |  | Year  |  | Year |  | Year
|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:                                        |  | $77  |  | $240  |  | $417 |  | $930

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



|Portfolio Management
|--------------------

Messrs. Albert O. Nicholas and David O. Nicholas are Co-Portfolio Managers of the Fund and are jointly and primarily responsible for the day-to-day management of the Fund's portfolio. Albert O. Nicholas is President and a
Director of the Fund, and a Director of the Adviser since 1967. He served as President of the Adviser from 1967 to 1998, and currently serves as the Chief Executive Officer of the Adviser. David O. Nicholas is a Senior Vice President of the Fund and
is Chief Investment Officer of the Adviser, and has been employed by the Adviser since 1986. For a further discussion of Messrs. Albert O. and David O. Nicholas' experience, see "The Fund's Investment Adviser."

- 3 -

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|INVESTMENT OBJECTIVE, PRINCIPALINVESTMENT STRATEGIES AND RISKS
|--------------------------------------------------------------

This section provides a more detailed description of the Fund's investment objective, its principal investment strategies and related risks. The following questions and answers are designed to help you better understand
the principal investment strategies and principal risks of investing in the Fund.



|What is the Fund's investment objective?
|----------------------------------------

The investment objective of Nicholas Fund, Inc. is to increase the value of your investment over the long-term ("long-term growth").



|How does the Fund pursue its investment objective?
|--------------------------------------------------

The Fund strives to meet its investment objective by investing primarily in a diversified portfolio of equity securities of large- 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 Billion          
|Medium |  | $2 Billion to $10 Billion
|Large  |  | Over $10 Billion         

To pursue the Fund's goal it also may, to a lesser extent, invest in companies with small 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:

- 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 it 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 company, 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.

- 4 -

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The Fund may hold an investment for any length of time, and will buy or sell securities whenever the Fund sees an appropriate opportunity. 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 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.

Does the Fund invest in securities other than equity securities?

The Fund expects that a major portion of its portfolio will be invested in common stocks of the types of companies, and in the manner previously 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 5% of the Fund's total assets), debt securities and preferred stock convertible into common stock, securities
of other investment companies (up to 5% 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 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.

Certain circumstances also may arise in which the Fund takes a temporary defensive position. In the case of a temporary defensive position, which could arise from adverse market, economic, political or other conditions,
the Fund may hold up to 100% of its portfolio in cash, cash equivalents or U.S. government securities. During any period in which the Fund maintains such a temporary defensive position, it may not achieve its investment objective.

Percentage limitations generally apply on the date of investment by the Fund to the extent permitted by the Investment Company Act of 1940, as amended. Thus, if an investment satisfies a percentage restriction when it is
made, no violation of that restriction is created by changes afterwards in the market value of the investment or total assets of the Fund.

What are the principal risks of investing in Nicholas Fund?

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.From time to time, the value of an individual company may decline due to a particular set of circumstances affecting that company, its industry or certain
companies within the industry, while having little or no impact on similar companies within the industry. Because the Fund invests most of its assets in the securities of large- and medium-sized companies, and to a lesser extent the securities of
small companies, the Fund may be subject to additional risks. Small-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. If the values of the Fund's investments in small- to medium-sized companies decrease, the value of the Fund's shares also may go down.

- 5 -

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Selection Risk.The Fund also is subject to selection risk, which is the risk that the stocks the Fund buys will underperform the markets or other mutual funds with similar
investment objectives and strategies.

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.

The Fund may use many different investment strategies in seeking its investment objective, 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 and the Fund's policies
and procedures with respect to the disclosure of the Fund's portfolio securities, you should request a copy of the Statement of Additional Information. To learn how to obtain a copy, see the back cover page of this Prospectus.

As with any mutual fund, there can be no guarantee that the Fund will achieve its goals or that you will not lose money on your investment. There is no guarantee that the Fund's
performance will be positive over any period of time. In view of the risks inherent in all investments in securities, there is no assurance that the Fund's objective will be achieved.

- 6 -

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|FINANCIAL HIGHLIGHTS
|--------------------

The financial highlights table is intended to help you understand the Fund's financial performance for the past five fiscal years ended March 31, 2007. 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 information has been audited
by Ernst & Young LLP, Independent Registered Public Accounting Firm, whose report, along with the Fund's financial statements and related notes, are included in the Fund's Annual Report, which is incorporated by reference into the Statement of
Additional Information and which may be obtained without charge by calling or writing the Fund.

|                                              |  |          |  | Year Ended March 31, |  |         
|--------------------------------------------- |  | -------- |  | -------------------- |  | --------
|                                              |  |          |  |                      |  |         
|                                              |  | 2007     |  | 2006                 |  | 2005    
|NET ASSET VALUE, BEGINNING OF                 |  |          |  |                      |  |         
|PERIOD                                        |  | $61.49   |  | $60.05               |  | $56.14  
|INCOME (LOSS) FROM                            |  |          |  |                      |  |         
|INVESTMENT OPERATIONS                         |  |          |  |                      |  |         
|Net investment income                         |  | .80      |  | .26                  |  | .10     
|Net gain (loss) on securities (realized and   |  |          |  |                      |  |         
|unrealized)                                   |  | .71      |  | 6.75                 |  | 4.29    
|Total from investment operations              |  | 1.51     |  | 7.01                 |  | 4.39    
|LESS DISTRIBUTIONS                            |  |          |  |                      |  |         
|From net investment income                    |  | (.82)    |  | (.25)                |  | (.07)   
|From net capital gain                         |  | (4.33)   |  | (5.32)               |  | (.41)   
|Total distributions                           |  | (5.15)   |  | (5.57)               |  | (.48)   
|NET ASSET VALUE, END OF PERIOD                |  | $57.85   |  | $61.49               |  | $60.05  
|                                             
|                                             
|TOTAL RETURN                                  |  | 2.55%    |  | 12.25%               |  | 7.81%   
|                                             
|                                             
|SUPPLEMENTAL DATA:                            |  |          |  |                      |  |         
|Net assets, end of period (millions)          |  | $2,213.5 |  | $2,504.9             |  | $2,434.5
|Ratio of expenses to average net assets       |  | .75%     |  | .77%                 |  | .75%    
|Ratio of net investment income to average net |  |          |  |                      |  |         
|assets                                        |  | 1.30%    |  | .41%                 |  | .17%    
|Portfolio turnover rate                       |  | 29.96%   |  | 32.48%               |  | 20.94%  

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.

- 7 -

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|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 by the Fund's Board of Directors.

The Adviser is the investment adviser to six other mutual funds and to numerous institutions and individuals with substantial investment portfolios. The additional mutual funds it advises are:
Nicholas High Income Fund, Inc., Nicholas II, Inc., Nicholas Limited Edition, Inc., Nicholas Money Market Fund, Inc., Nicholas Equity Income Fund, Inc. and Nicholas Liberty Fund (a series of Nicholas Family of Funds, Inc.). As of March 31, 2007, the
Adviser had approximately $3.2 billion in assets under management.

The annual fee paid to the Adviser under the Investment Advisory Agreement 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 following table illustrates the calculation of the Adviser's annual fee:

|                                |  | Annual Fee Calculation (Based on the
|------------------------------- |  | ------------------------------------
|Net Asset Value of the Fund     |  | Average Net Asset Value of the Fund)
|Up to and including $50,000,000 |  | 0.75 of 1%                          
|In excess of $50,000,000        |  | 0.65 of 1%                          

For the fiscal year ended March 31, 2007, the aggregate fee paid to the Adviser was 0.65% of the Fund's average net assets. A discussion regarding the basis for the Board of Director's approval
of the Fund's Investment Advisory Agreement can be found in the Fund's Semiannual Report to Shareholders for the period ended September 30, 2006.

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 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 related to the aforementioned items. The Fund also pays the Adviser for accounting and administrative services provided to the Fund by the Adviser that the Fund is obligated to pay under the Investment Advisory Agreement, subject
to certain payment guidelines adopted by unanimous resolution of the Board of Directors. A description of the payment guidelines is included in the Fund's Statement of Additional Information ("SAI") under "The Fund's Investment Adviser."

- 8 -

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Messrs. Albert O. Nicholas and David O. Nicholas are Co-Portfolio Managers of the Fund and are jointly and primarily responsible for the day-to-day management of the Fund's portfolio. Mr.
Albert O. Nicholas was the Portfolio Manager of the Fund from its inception in July 1969 through November 1996. Since November 1996, Messrs. Albert O. Nicholas and David O. Nicholas have been Co-Portfolio Managers of the Fund. Mr. Albert O. Nicholas
is President and a Director of the Fund, and a Director of the Adviser since 1967. He served as President of the Adviser from 1967 to 1998, and currently serves as Chief Executive Officer of the Adviser. Mr. David O. Nicholas is a Senior Vice
President of the Fund, is Chief Investment Officer and a Director of the Adviser and has been employed by the Adviser since 1986. Messrs. Albert O. Nicholas and David O. Nicholas also serve as Portfolio Managers to other funds managed by the
Adviser, and each is a Chartered Financial Analyst. The Fund's SAI provides additional information about the Portfolio Managers compensation, other accounts managed by the Portfolio Managers, and the Portfolio Managers ownership of securities in the
Fund.

Albert O. Nicholas is a controlling person of the Adviser through his ownership of 97% of the outstanding voting securities of the Adviser.



|PRICING OF FUND SHARES
|----------------------

The Fund's price per share 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. Securities of the Fund are valued at market value, or if a market quotation is not readily available, their fair value is
determined in good faith using procedures adopted by the Board of Directors. As an example, a market quotation may not be readily available if the trading of a security is halted by its primary exchange and does not resume before the markets close
or the primary exchange experiences technical difficulties. If a security is valued using fair value pricing, the Fund's value for that security is likely to be different than the last quoted market value. The NAV is determined as of the close of
regular trading on the New York Stock Exchange ("NYSE") (usually 4:00 p.m., New York time) on each day the NYSE is open. Therefore, shares of the Fund are not priced on days when the NYSE is closed, which generally is on weekends and national
holidays in the U.S.A. For a list of holidays observed by the NYSE, please contact the Fund or see the Fund's Statement of Additional Information.

Shareholder purchase, redemption and exchange orders are processed using the NAV next calculated after receipt of such request in proper order by the Fund (or an Authorized Agent of the Fund). In order to receive a day's
price, your request must be received in proper order by the close of regular trading on the NYSE. If you request to purchase, redeem or exchange your shares after the NYSE has closed or on a day the NYSE is closed, the NAV will be determined as of
the close of the next day the NYSE is open for trading.

- 9 -

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|PURCHASE OF FUND SHARES
|-----------------------

|                                        |  | TO OPEN AN ACCOUNT            |  | TO ADD TO AN ACCOUNT                 
|--------------------------------------- |  | ----------------------------- |  | -------------------------------------
|                                        |  |                               |  |                                      
|MINIMUM INVESTMENT                      |  | $500                          |  | $100                                 
|                                        |  |                               |  | $50 via the Automatic Investment Plan
|                                        |  |                               |  |                                      
|BY MAIL                                 |  | Complete and sign the         |  | Send your check along with the       
|Regular Mail:                           |  | Account Application.          |  | Investby Mailform detached from      
|Nicholas Funds                          |  |                               |  | your confirmation statement.         
|c/o U.S. Bancorp Fund Services, LLC     |  | Make your check payable to    |  |                                      
|P.O. Box 2944                           |  | Nicholas Funds.               |  | Send your check payable toNicholas   
|Milwaukee, Wisconsin 53201-2944         |  |                               |  | Fundswith your account number in     
|                                        |  |                               |  | the memo field.                      
|Overnight Mail:                         |  |                               |  |                                      
|Nicholas Funds                          |  |                               |  |                                      
|c/o U.S. Bancorp Fund Services, LLC     |  |                               |  |                                      
|Third Floor                             |  |                               |  |                                      
|615 East Michigan Street                |  |                               |  |                                      
|Milwaukee, Wisconsin 53202              |  |                               |  |                                      
|                                        |  |                               |  |                                      
|BY INTERNET                            |  | You may not make an initial   |  | Visit www.nicholasfunds.com and      
|www.nicholasfunds.com                   |  | purchase of Fund shares via   |  | click on "Account Access" to purchase
|The Fund must have bank instructions on |  | the internet.                 |  | or exchange shares from another fund 
|file to purchase Fund shares this way.  |  |                               |  | in the Nicholas complex.             
|                                        |  |                               |  |                                      
|BY TELEPHONE  800-544-6547             |  | You may not make an initial   |  | Call the Fund's transfer agent, U.S. 
|414-276-0535                            |  | purchase of Fund shares via   |  | Bancorp Fund Services LLC, during    
|The Fund must have bank instructions on |  | the telephone.                |  | business hours (8:00 A.M. to 7:00    
|file to purchase Fund shares this way.  |  |                               |  | P.M. Central Time).                  
|                                       
|Telephone calls will be recorded.       |  |                               |  |                                      
|                                        |  |                               |  |                                      
|BY WIRE                                 |  | Complete and send in an       |  | Call U.S. Bancorp to notify          
|U.S. Bank, N.A.                         |  | Account Application. The      |  | 800-544-6547 or 414-276-0535.        
|ABA 075000022                           |  | completed application must be |  |                                      
|U.S. Bancorp Fund Services, LLC         |  | received in advance of the    |  |                                      
|Account 112-952-137                     |  | wire.                         |  |                                      
|Nicholas Fund, Inc.                     |  |                               |  |                                      
|(shareholder account number)            |  | Call U.S. Bancorp to notify   |  |                                      
|(shareholder registration)              |  | 800-544-6547 or               |  |                                      
|                                        |  | 414-276-0535.                 |  |                                      
|                                        |  |                               |  |                                      
|AUTOMATIC INVESTMENT PLAN               |  | Not applicable.               |  | Contact the Fund for additional      
|U.S. Bancorp                            |  |                               |  | information.                         
|800-544-6547 or 414-276-0535            |  |                               |  |                                      
|                                        |  |                               |  |                                      

- 10 -

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|Other Information about Purchasing Fund Shares
|----------------------------------------------

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. Once your
purchase order has been accepted, you may not cancel or revoke it. All purchase orders must be accompanied by payment in U.S. funds. Purchase of shares will be made in full and fractional shares computed to three decimal places.

Your check should be drawn on a U.S. bank, savings and loan or credit union. Checks are accepted subject to collection at full face value in U.S. funds. To prevent check fraud, cashiers checks,
third-party checks, Treasury checks, credit card checks, starter checks and money orders will not be accepted. The transfer agent will charge a $25 fee against your account, in addition to any loss sustained by the Fund, if any payment check is
returned to the transfer agent or your Automated Clearing House ("ACH") transfer does not clear. The Fund will not accept purchase or exchange orders under circumstances or in amounts considered disadvantageous for shareholders.

Under the Automatic Investment Plan, you may purchase Fund shares automatically on a monthly basis. You may authorize the Fund to withdraw $50 or more from your bank on a monthly basis. To
participate in this plan, you must complete the "Automatic Investment Plan" section of the application or contact the Fund at 1-800-544-6547 for additional information.

In compliance with the USA Patriot Act of 2001, please note that the transfer agent, U.S. Bancorp Fund Services, LLC ("U.S. Bancorp"), will verify certain information on your Account
Application as part of the Fund's Anti-Money Laundering Program. As requested on the Application, you must supply your full name, date of birth, social security number and permanent street address. Mailing addresses containing a P.O. Box will not be
accepted as a permanent street address. Please contact U.S. Bancorp (800-544-6547 or 414-276-0535) if you need additional assistance when completing your application. Shares of the Fund have not been registered for sale outside of the United States.
The Fund generally does not sell shares to investors residing outside of the United States.

If we do not have a reasonable belief of the identity of a customer, the account will be rejected or the customer will not be allowed to perform a transaction on the account until such information is received. The Fund
also reserves the right to close the account within 5 business days if clarifying information or documentation is not received.

You should be aware that deposit of purchase and exchange requests in the mail or with other independent delivery services does not constitute receipt by U.S. Bancorp or the Fund.

Only bank accounts held at domestic financial institutions that are ACH members may be used for telephone or internet transactions. The ability to perform internet and telephone transactions will become effective
approximately 15 business days after an application including bank instructions or a change of account options request to add or change bank instructions is received.

During periods of substantial economic or market changes or due to technical difficulties, you may have difficulty making internet or telephone purchases and exchanges. If you are unable to
perform your transaction via the internet or by telephone, you may purchase and exchange Fund shares by delivering the request in person or by mail.

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. If you are making an initial investment
by wire, you must first complete and return to the appropriate address an Account Application.

Due to fixed expenses incurred by the Fund in maintaining individual accounts, the Fund reserves the right to redeem accounts that fall below the 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. The Fund's transfer agent may charge an activity fee for certain
requests, including but not limited to, requesting stop payment on a redemption check and overnight delivery of redemption proceeds.

- 11 -

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The Fund will not issue certificates representing Fund 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 will not issue certificates for fractional shares even if requested. Where certificates are not requested, the Fund's transfer agent will credit
the shareholder's account with the number of shares purchased. Written confirmations are issued for all purchases of Fund shares.

REDEMPTION AND EXCHANGE OF FUND SHARES

|BY MAIL                                         |  | Written redemption and exchange requests must include the   
|----------------------------------------------- |  | ------------------------------------------------------------
|Regular Mail:                                   |  | name of the Fund, the account number(s), the amount of      
|Nicholas Funds                                  |  | money or number of shares being redeemed or exchanged,      
|c/o U.S. Bancorp Fund Services, LLC             |  | the name(s) on the account(s) and the signature(s) of each  
|P.O. Box 2944                                   |  | registered account holder. If an account registration is    
|Milwaukee, Wisconsin 53201-2944                 |  | individual, joint tenants, sole proprietorship, custodial   
|                                                |  | (Uniform Transfer to Minors Act), or general partners, the  
|Overnight Mail:                                 |  | written request must be signed exactly as the account is    
|Nicholas Funds                                  |  | registered. If the account is owned jointly, all owners must
|c/o U.S. Bancorp Fund Services, LLC             |  | sign.                                                       
|Third Floor                                     |  |                                                             
|615 East Michigan Street                        |  | If you have certificates for your shares, you must send the 
|Milwaukee, Wisconsin 53202                      |  | certificate(s) for the full shares with your written        
|                                                |  | redemption request signature guaranteed by an eligible      
|                                                |  | "guarantor institution," which is a bank, savings and loan  
|                                                |  | association, credit union, or member firm of a national     
|                                                |  | securities exchange to the above address. A notary public   
|                                                |  | is not an acceptable guarantor.                             
|                                                |  |                                                             
|BY INTERNET  www.nicholasfunds.com             |  | Visit www.nicholasfunds.com and click on "Account           
|The Fund must have bank instructions on file to |  | Access" to redeem or exchange shares to another fund in     
|redeem Fund shares this way.                    |  | the Nicholas complex.                                       
|                                                |  |                                                             
|BY TELEPHONE  800-544-6547                     |  | Call the Fund's transfer agent, U.S. Bancorp Fund Services  
|414-276-0535                                    |  | LLC, during business hours (8:00 A.M. to 7:00 P.M.          
|                                                |  | Central Time).                                              
|Telephone calls will be recorded.               |  |                                                             
|                                                |  |                                                             
|BY WIRE  800-544-6547                          |  | Call U.S. Bancorp to request wire redemptions.              
|414-276-0535                                    |  |                                                             
|                                                |  |                                                             
|SYSTEMATIC WITHDRAWAL PLAN                      |  | Contact the Fund for additional information.                
|U.S. Bancorp                                    |  |                                                             
|800-544-6547 or 414-276-0535                    |  |                                                             
|                                                |  |                                                             

Other Information about Redeeming and Exchanging Fund Shares

All redemptions and exchanges will be processed immediately upon receipt and written confirmations will be issued for all redemptions and exchanges of Fund shares. Once your redemption or
exchange order has been accepted, you may not cancel or revoke it.

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 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, at which time payment
will be made.

- 12 -

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You may instruct U.S. Bancorp to mail the proceeds to the address of record or to directly mail the proceeds to a pre-authorized bank account. Proceeds also may be wired to a pre-authorized
account at a commercial bank in the United States. The transfer agent charges a $15 wire redemption fee. In addition, proceeds also may be electronically transferred through the ACH to a pre-authorized account at no cost. Please contact the Fund
for the appropriate form if you are interested in setting your account up with wiring instructions or authorizing electronic transfers.

You can redeem and exchange your shares by internet or telephone unless you decline this option in writing.

During periods of substantial economic or market changes or due to technical difficulties, you may have difficulty making internet or telephone redemptions and exchanges. If you are unable to
perform your transactions via the internet or by telephone, you may redeem or exchange your shares by delivering the request in person or by mail.

Procedures for redeeming and exchanging Fund shares by internet or telephone may be modified or terminated at any time by the Fund or its transfer agent. The exchange privilege may be
terminated or modified only upon 60 days advance notice to shareholders. Neither the Fund nor its transfer agent will be liable for following instructions communicated by the internet or telephone which they reasonably believe to be genuine. The
Fund and its transfer agent 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.

You may not fax your redemption or exchange request. The Fund will return and not process requests that contain restrictions as to the time or date redemptions and exchanges are to be
effected.

The Fund may require additional supporting documents for redemptions and exchanges made by corporations, executors, administrators, trustees and guardians. Specifically, if the account is
registered in the name  a corporation or association, the request must be accompanied by a corporate resolution signed by the authorized person(s). A redemption or exchange 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  the trustee(s).

For federal income tax purposes, redemptions and exchanges generally are treated as a sale of the shares being redeemed or exchanged. You may recognize a capital gain or loss equal to the difference between the redemption
or exchange price and your cost basis for the shares being redeemed or exchanged. 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 information. If you have an individual retirement account ("IRA") or other retirement plan, you must indicate on your redemption requests whether or not to withhold federal income tax. Unless a
redemption request specifies not to have federal income tax withheld, the transaction will be subject to withholding. Please consult your current IRA Disclosure Statement for any applicable fees. IRA redemptions may not be conducted using the
internet

Nicholas Company, Inc. is the Adviser to the portfolios of Nicholas II, Inc., Nicholas Limited Edition, Inc. and Nicholas High Income Fund, Inc., which offer both Class I and Class N shares, as
well as Nicholas Equity Income Fund, Inc., Nicholas Liberty Fund and Nicholas Money Market Fund, Inc, all of which have investment objectives as discussed in separate prospectuses.

- 13 -

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If you choose to exercise the exchange privilege, your shares will be exchanged at their next determined NAV. Minimum investment requirements must be met, with the exception that if you were a
shareholder of any of the Nicholas Funds discussed above as of March 1, 2005, you may qualify to exchange into the Class I shares of Nicholas II, Inc., Nicholas Limited Edition, Inc. and Nicholas High Income Fund, Inc.. 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 and your Nicholas Money
Market Fund, Inc. shares will be issued. However, on days when the Federal Reserve Banks are closed, the Nicholas Money Market Fund, Inc. is unable to invest your exchanged amount; therefore you will not receive interest for this one-day period.

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

A signature guarantee helps protect the Fund and shareholders against fraud. A signature guarantee of each owner is required in the following situations:

- if you change or transfer the registration of your account
- if you change the bank account of record for your account
- if you opted out of telephone or internet privileges and would like to re-establish these 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 redemption 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 its transfer agent within 15 days of a redemption request
- for redemption requests greater than $100,000.

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. The Fund may waive or modify any
signature guarantee requirements at any time.

If you are uncertain about what documents or instructions are necessary in order to redeem and exchange shares, please write or call U.S. Bancorp (800-544-6547 or 414-276-0535) prior to
submitting a request. A redemption or exchange request will not become effective until all documents are received in proper order.

USE OF A PROCESSING INTERMEDIARY TO

PURCHASE AND REDEEM FUND SHARES

You can purchase and redeem shares of the Fund through certain broker-dealers, financial institutions and other service providers ("Processing Intermediaries"). Certain Processing Intermediaries are, in turn, authorized to
designate other intermediaries to accept purchase and redemption orders on the Fund's behalf. If you invest in the Fund through a Processing Intermediary, 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 vary among Processing Intermediaries, but in all cases will be retained by the Processing
Intermediary and not remitted to the Fund or the Adviser.

- 14 -

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The Fund also may enter into an arrangement with some Processing Intermediaries which authorizes them to process purchase and redemption orders on behalf of the Fund on an expedited basis (an "Authorized Agent"). Receipt
of a purchase or redemption 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 or redeemed. 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 charges imposed by the Authorized Agent. For redemption orders placed through an Authorized Agent, you will receive
redemption proceeds which reflect the NAV 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. You can invest directly with the Fund without a sales charge. If you hold Fund shares
through a Processing Intermediary, 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 directly through the Fund without a redemption charge.

FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES

Frequent purchases and sales of fund shares may affect shareholders in various ways. Depending on various factors, including but not limited to, the size of the fund, the amount of assets the
portfolio manager typically maintains in cash or cash equivalents, and the dollar amount, number and frequency of trades, short-term or excessive trading may disrupt the efficient management of the fund's portfolio, may impact fund performance and
may increase brokerage, administrative and other expenses. The Fund reserves the right to reject any purchase request, including exchange requests from other Nicholas Funds, if the Fund regards the request as disruptive or if the Fund deems the
request to have the potential to be disruptive. However, the Fund cannot ensure that its efforts will eliminate all risks of market timing.

The Fund discourages disruptive trading in Fund shares for abusive purposes in accordance with the policies and procedures adopted by the Fund's Board of Directors, which are reasonably
designed to detect and discourage disruptive trading. These policies and procedures apply to any account, whether an individual account or an account referred to as an "omnibus account" where a financial intermediary holds Fund shares for a number
of its customers in one account. Because there is currently no generally applied standard in the marketplace as to what level of trading activity is abusive, the Board of Directors elected not to adopt rigid rules specifying what activity is abusive
or how suspected abusive activity will be addressed. In adopting the Fund's policies and procedures, the Board of Directors determined that it would be in the best interests of shareholders to provide flexibility in dealing with such activities.

Under the Fund's policies and procedures, the Fund currently uses various methods to deter disruptive activity in both individual and omnibus accounts, including but not limited to, selective
monitoring of trading activity and undertaking preventive action designed to discourage and preclude disruptive traders from entering the Fund. We may consider trading in the Fund's shares to be disruptive if we detect one or more of the following
in an account:

- Shares traded out of the Fund within a short period of time after the shares were purchased;
- Two or more purchases and redemptions are made within a short period of time;
- A series of transactions within the Fund that is indicative of a timing pattern or strategy; or
- One or more large trades relative to the Fund's overall size.

The Fund reserves the right to take responsive action to trading activity deemed disruptive by the Fund's compliance committee, even though such trades may not fall into one or more of these
categories.

- 15 -

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In connection with our review of suspected disruptive trading, we may, at our option, contact the individual or entity or the financial intermediary believed to be engaged in or to have
facilitated such trading. If we reasonably believe that the trading was disruptive, we will ask that investor or financial intermediary to refrain from such activity in the future. In addition, the investor or financial intermediary may be
restricted from future purchases into the Fund and may also be restricted from future purchases of shares offered by any of the funds in the Nicholas fund complex.

In determining what action to take with respect to suspected disruptive trading activity, the Fund will act in a manner that is consistent with the best interests of the Fund's shareholders by
making independent assessments of instances or patterns of potentially improper conduct in a manner consistent with the policies and procedures approved by the Board of Directors.

While the Fund does not accommodate market timing activities engaged in for abusive purposes, the methods used by the Fund to deter and detect market timing activities involve judgments that
are inherently subjective and our response to potentially disruptive trading activity may not be uniform. This means that the Fund may not take remedial action against investors detected engaging in a disruptive trade for reasons believed by the
Fund to be legitimate and non-abusive. Examples of legitimate trading activities include, but may not be limited to, asset allocation, dollar cost averaging, emergency liquidations, estate planning measures or similar activities that may nonetheless
arguably result in disruptive trading of Fund shares.

There is a risk that the Fund's policies and procedures will prove ineffective in whole or in part to detect or prevent abusive market timing activities. For example, it may be difficult for
the Fund to identify such activities engaged in by investors through the use of omnibus accounts administered by financial intermediaries who transmit purchase, exchange, or redemption orders to the Fund on behalf of their customers who are the
beneficial owners. Short-term trading by these investors is likely to go undetected by the Fund.

If the Fund is unable to detect and deter trading abuses, the Fund's performance, and its long-term shareholders, may be harmed. In addition, because the Fund has not adopted specific
limitations or restrictions on the trading of Fund shares, shareholders may be harmed by the extra costs and portfolio management inefficiencies that result from excessive or disruptive trading of Fund shares, even when the trading is not for
abusive purposes.



|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 U.S. Bancorp (800-544-6547 or 414-276-0535) prior to submitting any transfer requests.



|DISTRIBUTION OF FUND SHARES
|---------------------------

Quasar Distributors, LLC (the "Distributor"), 615 East Michigan Street, Milwaukee, Wisconsin, 53202, serves as the distributor and principal underwriter of the Funds' shares. The Distributor is a registered broker-dealer
and member of the National Association of Securities Dealers, Inc.

DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAX STATUS

The Fund intends 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 to its shareholders substantially all of its net investment income and net realized capital gain in one or more distributions for
each fiscal year.

- 16 -

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For federal income tax purposes, dividends and 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. Net realized long-term gains are paid to shareholders as capital gain distributions. Income distributed from the Fund's net investment income and net realized short-term gains
are paid to shareholders as ordinary income dividends. Distributions generally will be made in June and December of each year. Distributions may be taxable at different rates depending on the length of time the Fund holds a security. The Fund will
provide information to shareholders concerning the character and federal tax treatment of all dividends and distributions. If you elect to receive distributions and/or capital gains paid in cash, and the U.S. Postal Service cannot deliver the check,
or if a check remains outstanding for six months, the Fund reserves the right to reinvest the distribution check in your account, at the Fund's current net asset value, and to reinvest all subsequent 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. 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.

Under federal law, some shareholders may be subject to "backup withholding" on reportable dividends, capital gain distributions (if any) and redemption payments. Generally, shareholders subject to backup withholding will
be those (i) who, to the Fund's knowledge, have furnished an incorrect taxpayer identification 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 an application to purchase shares, by telephone or by separate written notification. All reinvestments are at the NAV in effect on the dividend or distribution
date and are credited to the shareholder's account. U.S. Bancorp 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 U.S. Bancorp. The Fund's transfer agent must receive an
election 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.

- 17 -

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|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 payments
for any designated amount. You may elect to have a check sent to you at your address of record, or proceeds can be sent directly to your predetermined bank account via electronic funds transfer through the Automated Clearing House network. When you
participate in the Plan all income and capital gain dividends should be reinvested in shares of the Fund. U.S. Bancorp 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 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 Fund's transfer agent may terminate the Plan upon written notice mailed to the shareholders. Please contact Nicholas Company,
Inc. for copies of the Plan documents.



|TAX DEFERRED ACCOUNTS
|---------------------

If you are eligible, you may set up one or more tax deferred accounts. A contribution to certain of these plans also may be tax deductible. The Fund offers the following tax deferred accounts:
traditional, Roth, SEP, and SIMPLE IRAs; a Master Retirement Plan for self-employed individuals and partnerships; and Coverdell Savings Accounts for qualified education expenses for children under age 18. A description of applicable service fees and
application forms are available upon request from the Fund. These documents also contain a Disclosure Statement which the IRS requires to be furnished to individuals who are considering adopting these plans. It is important that you obtain
up-to-date information from the Fund before opening a tax deferred account. Investors should consult with their tax adviser or legal counsel before investing in a tax deferred account.

DISCLOSURE OF PORTFOLIO HOLDINGS

A description of the Fund's policies and procedures with respect to the disclosure of the Fund's portfolio securities is available in the Fund's SAI. There can be no assurance that the Fund's policies with respect to
information about its portfolio securities will be effective or protect the Fund from the potential misuse of holdings by individuals or firms in possession of that information. The Fund's complete portfolio holdings are made available to the public
on a quarterly basis generally no later than 60 days after the end of each calendar quarter end. A summary of the Fund's portfolio composition is also posted to the Fund's website at www.nicholasfunds.com under the heading "Quarterly Factsheet"
generally 10 days or more following a calendar quarter end. This summary composition may include the Fund's top ten holdings and a breakdown by sector.

- 18 -

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|Investment AdviserNICHOLAS COMPANY, INC.Milwaukee, WisconsinDistributorQUASAR DISTRIBUTORS, LLCMilwaukee, WisconsinTransfer AgentU.S. BANCORP FUND SERVICES, LLCMilwaukee, Wisconsin414-276-0535 or 800-544-6547CustodianU.S. BANK N.A.Milwaukee, WisconsinIndependent Registered Public Accounting FirmERNST & YOUNG LLPChicago, IllinoisCounselMICHAEL BEST & FRIEDRICH LLPMilwaukee, Wisconsin
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|FOR MORE INFORMATION ABOUT THE FUND:
|------------------------------------

The Fund's Statement of Additional Information ("SAI"), dated July 31, 2007, contains more detailed information on all aspects of Nicholas Fund, 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. The Fund's Annual Report discusses the market conditions and investment strategies that significantly affected the Fund's performance during its
last fiscal year.

To request a free copy of the current Annual/Semiannual Report or SAI or other information about the Fund, or to make shareholder inquiries, please write or call: Nicholas Fund, Inc., 700 North Water Street, Milwaukee,
Wisconsin 53202, 800-544-6547 (toll-free). Along with the Fund's Annual/Semiannual Report and SAI, additional information about the Fund also can be obtained from the Fund's Internet website at www.nicholasfunds.com.

In addition, you can review and copy the Fund's reports and SAI at the Public Reference Room of the Securities and Exchange Commission in Washington, D.C. Information on the operation of the Commission's Public Reference
Room may be obtained by calling the SEC at 202-942-8090. 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 electronic
request at the following e-mail address: publicinfo@sec.gov, or by writing the Commission's Public Reference Section of the SEC, Washington, D.C. 20549-0102.

For the most current price and return information for the Fund, you may call the Fund at 800-544-6547 (toll-free) or 414-276-0535 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" - "Nich." If you prefer to obtain this information from an on-line computer service, you can do so by using the ticker
symbol "NICSX" or cusip number 653735100.

Investment Company Act File No. 811-01728

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|NICHOLAS FUND, INC.                                                                                                  
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|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|STATEMENT OF ADDITIONAL INFORMATION                                                                                  
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|700 North Water Street, Suite 1010                                                                                   
|Milwaukee, Wisconsin 53202                                                                                           
|414-276-0535                                                                                                         
|800-544-6547                                                                                                         
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|This Statement of Additional Information is not a prospectus and contains information in addition to and             
|more detailed than that set forth in the current Prospectus of Nicholas Fund, Inc. (the "Fund"), dated July 31, 2007.
|It is intended to provide you with additional information regarding the activities and operations of the Fund, and   
|should be read in conjunction with the Fund's current Prospectus, as it may be revised from time to time, and the    
|Fund's Annual Report for the fiscal year ended March 31, 2007, which are incorporated herein by reference. 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.                                                                                               
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|                                                                                                                     
|July 31, 2007                                                                                                        

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|TABLE OF CONTENTS                              
|-----------------------------------------------
|                                               
|INTRODUCTION                                   
|INVESTMENT OBJECTIVES AND INVESTMENT STRATEGIES
|INVESTMENT RESTRICTIONS                        
|INVESTMENT RISKS                               
|THE FUND'S INVESTMENT ADVISER                  
|MANAGEMENT - DIRECTORS AND EXECUTIVE OFFICERS  
|AND PORTFOLIO MANAGERS OF THE FUND             
|PRINCIPAL SHAREHOLDERS                         
|PORTFOLIO MANAGERS OF THE FUND                 
|DISTRIBUTION OF FUND SHARES                    
|PURCHASE, REDEMPTION AND PRICING OF FUND SHARES
|ANTI-MONEY LAUNDERING PROGRAM                  
|DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAX STATUS
|PORTFOLIO TRANSACTIONS AND BROKERAGE           
|PERFORMANCE DATA                               
|CAPITAL STRUCTURE                              
|STOCK CERTIFICATES                             
|ANNUAL MEETING                                 
|SHAREHOLDER REPORTS                            
|CUSTODIAN AND TRANSFER AGENT                   
|INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM  
|AND LEGAL COUNSEL                              
|FINANCIAL INFORMATION                          

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|INTRODUCTION
|------------

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

INVESTMENT OBJECTIVES AND INVESTMENT STRATEGIES

The investment objectives and strategies of the Fund described in this Statement of Additional Information ("SAI"), supplement the investment objectives and investment strategies disclosures included in the Fund's
Prospectus under the caption "INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND RISKS." Please read the Prospectus in conjunction with this Statement of Additional Information. 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 by and sale to 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 5% of the Fund's total assets in the securities of unseasoned companies. In addition, the Fund may not invest more than 10% of the Fund's 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. The
Fund is not limited as to the maturities of the debt securities in which it invests. These types of investments are made by the Fund when the Adviser believes they offer the possibility of appreciation in value.

The Fund may temporarily invest in investment grade and non-investment grade fixed income securities as a temporary defensive measure when conditions warrant. "Investment grade fixed income securities" are fixed income
securities ranked in one of the top four debt security rating categories of any of the nationally recognized statistical rating organizations ("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 usually will not invest more than 5% of its total assets in
non-investment grade fixed income securities. In the case of a temporary defensive position, the Fund may hold up to 100% of its portfolio in cash, cash equivalents or U.S. government securities. During any period in which the Fund maintains such a
temporary defensive position, it may not achieve its investment objective.

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 Funds 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 10% of the Fund's total net assets, taken at market.

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 its total net assets.

-1-

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Except as otherwise may be stated, all percentage limitations on the Fund's investment practices apply at the time of an investment or a transaction. Accordingly, except with respect to
borrowing and restrictions on illiquid securities, a later change in any percentage resulting from a change in value of the investment or the total value of the Fund's assets will not constitute a violation of such restriction.



|INVESTMENT RESTRICTIONS
|-----------------------

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

|1.  | The Fund will not purchase securities on margin, participate in a joint trading account, sell securities short, or act as an underwriter or distributor of securities other than its own capital stock. The Fund will not lend
money, except for:                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | (a)                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|    | (b)                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|    | (c)                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|2.  | The Fund will not purchase or sell real estate or interests in real estate, commodities or commodity futures. The Fund may invest in the securities of real estate investment trusts, but not more than 10% in value of the
Fund's total net assets will be so invested.                                                                                                                                                      
|   
|3.  | The Fund may make temporary bank borrowings (not in excess of 5% of the lower of cost or market value of the Fund's total assets) for emergency or extraordinary purposes.                                                                                                                                                                                                                                                    
|   
|4.  | The Fund will not pledge any of its assets.                                                                                                                                                                                                                                                                                                                                                                                   
|   
|5.  | Securities of other regulated investment companies will not be purchased, except on the open market where no commission or profits result, other than the broker's commission, or as a part of a plan of merger, consolidation
or reorganization approved by shareholders of the Fund. No more than 5% of the value of the Fund's total net assets will be invested in the securities of other regulated investment companies.
|   
|6.  | Investments will not be made for the purpose of exercising control or management of any company. The Fund will not purchase securities of any issuer if, as a result of such purchase, the Fund would hold more than 10% of the
voting securities of such issuer.                                                                                                                                                             
|   
|7.  | Not more than 5% of the Fund's total net assets, taken at market value, will be invested in the securities of any one issuer (excluding U.S. Government securities).                                                                                                                                                                                                                                                          
|   
|8.  | Not more than 25% of the Fund's total assets will be concentrated in companies of any one industry or group of related industries.                                                                                                                                                                                                                                                                                            
|   
|9.  | The Fund will not acquire or retain any security issued by a company, if an officer or director of such company is an officer or director of the Fund, or an officer or director or shareholder or other interested person of
the Adviser.                                                                                                                                                                                    
|   
|10. | The Fund will not issue senior securities.                                                                                                                                                                                                                                                                                                                                                                                    
|   

-2-

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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:

- No investments are permitted in any securities issued by a company if one or more directors or shareholders or other affiliated persons of its investment adviser beneficially own more than
one-half of one percent (0.5%) of such company's stock or other securities, and all of the foregoing persons owning more than one-half of one percent (0.5%) together own more than 5%
of such companies stock or security
- Not more than 5% of its total net 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 are permitted in interests in oil, gas or other mineral exploration programs (but investments in securities of companies engaged in oil, gas or other mineral activities are
permitted)
- No investments are permitted in puts, calls, straddles, spreads or any combination thereof
- Not more than 1% of its total net assets may be invested in restricted securities
- No purchase of securities of any company are permitted if, as a result of such purchase, the Fund would hold more than 10% of the voting securities of such company
- No investments are permitted in warrants, valued at the lower of cost or market, which exceed 5% of the value of the Fund's net assets. Included within that amount, but not to exceed 2% of
the value of the Fund's net assets, may be warrants which are not listed on the New York or American Stock Exchange. Warrants acquired by the Fund in units or attached to securities
may be deemed to be without value

The Board will give advance notice to shareholders of any change to these investment restrictions.

Except as otherwise may be stated, all percentage limitations on the Fund's investment practices apply at the time of an investment or a transaction. Accordingly, except with respect to
borrowing and restrictions on illiquid securities, a later change in any percentage resulting from a change in value of the investment or the total value of the Fund's assets will not constitute a violation of such restriction.



| | Portfolio Turnover Rate
| | -----------------------

The portfolio turnover rate for the Fund is calculated by dividing the lesser of purchases or sales of portfolio investments for the reporting period by the monthly average value of the portfolio investments owned during
the reporting period. The calculation excludes all securities, including options, with maturities or expiration dates at the time of acquisition that are one year or less. Portfolio turnover may vary greatly from year to year as well as within a
particular year, and may be affected by changes in the holdings of specific issuers, by cash requirements for redemption of shares and by requirements which enable the Fund to receive favorable tax treatment.

Although the Fund's primary investment strategy does not include investing for the purpose of seeking short-term profits, securities in the portfolio will be sold whenever the investment adviser believes it is appropriate
to do so in light of the Funds' investment objective without regard to the length of time a particular security may have been held. For the fiscal year ended March 31, 2007, the turnover rate for the Fund was 29.96% compared to 32.48% for the fiscal
year ended March 31, 2006.

-3-

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| | Disclosure of Portfolio Holdings
| | --------------------------------

The Fund's Board of Directors has approved policies and procedures developed by the Adviser governing the disclosure of the Fund's portfolio holdings. The policies and procedures are reasonably
designed to ensure that disclosure of portfolio holdings and information about portfolio holdings is in the best interests of Fund shareholders and consistent with applicable law. In addition, the Fund's policies and procedures are designed to
appropriately address the potential for conflicts of interest. There can be no assurance that the policy on portfolio holdings disclosure will be effective in protecting the Fund from the potential misuse of holdings by individuals or firms in
possession of that information.

The policy and procedures generally prohibit the disclosure of the Fund's portfolio schedule until it has been made available to the public through regulatory filing with the Securities and
Exchange Commission ("SEC") or posted to the Fund's website. The Fund's complete portfolio holdings are made available to the public on a quarterly basis generally no later than 60 days after the end of each calendar quarter end. A summary of the
Fund's portfolio composition is also posted to the Fund's website at www.nicholasfunds.com under the heading "Quarterly Factsheet" generally 10 days or more following a calendar quarter end. This summary composition may include the Fund's top ten
holdings and a breakdown by sector.

The policy and procedures provide for certain exceptions to the portfolio holdings release policy described above where (i) disclosures are made for legitimate business purposes, (ii)
recipients are subject to a duty of confidentiality and (iii) recipients are subject to a duty to refrain from trading based on the disclosed information or otherwise using the information except as necessary in providing services to the Fund. At
the time, the Fund has ongoing arrangements for the disclosure of portfolio holdings for legitimate business purposes with:

|1. | Designed employees of the Fund's Adviser in the course of performing daily operations of the Fund, including but not limited to, portfolio analysis, accounting and administration, who receive such information
daily.                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. | Various service providers that require such information in order to assist the Fund with its operations: the Fund's custodian, currently U.S. Bank N.A., independent registered public accounting firm, currently Ernst &
Young, LLP, legal counsel, currently Michael Best & Friedrich LLP, and proxy voting service, currently Institutional Shareholder Services Inc. U.S. Bank N.A and Institutional Shareholder Services Inc. receive such information on a daily bases,
while Ernst & Young, LLP and Michael Best & Friedrich LLP receive such information as necessary in connection with professional services provided to the Fund.
|  
|3. | Financial printers in connection with the printing of Fund publications for distribution to shareholders. Information is provided to printers as soon as practicable after completion of a required reporting period or a
reasonable period before a publication target date.                                                                                                                                                                                                                                                                                                                                                               
|  
|4. | Portfolio analysis services: Bloomberg and Factset. Such information is provided daily.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|5. | Rating and ranking organizations in connection with those firms' research on and classification of the Fund and in order to gather information about how the Fund attributes (such as turnover and industry and sector
diversification) compare with those of peer funds, currently provided within 15 days of month-end: Lipper Inc., Mellon Analytical Solutions, Morningstar and Standard & Poors.                                                                                                                                                                                                                                       
|  

The Adviser's compliance committee, which is comprised of the Chief Compliance Officer and members of the Adviser's compliance committee designated by the Chief Compliance Officer, have the
authority to authorize portfolio disclosures to other third-party service providers not included herein, such as, rating and ranking organizations and intermediaries that may distribute the Fund's shares. Each initial disclosure to an entity or
organization of the Fund's portfolio holdings must be authorized by the Chief Compliance Officer or a member of the Adviser's compliance committee designated by the Chief Compliance Officer in accordance with policies and procedures adopted by the
Adviser designed to ensure compliance with the Investment Company Act and the Investment Advisor's Act of 1940.

The Fund and its Adviser do not receive compensation or other consideration relating to the disclosure of information about the Fund's portfolio securities.

-4-

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The Fund's Board of Directors will review this policy periodically as part of its ongoing oversight of the Fund's compliance program in addition to receiving periodic reports from the Chief
Compliance Officer as to the disclosures made under this policy. The Adviser's compliance committee will review compliance with and the effectiveness of the policies and procedures on an ongoing basis.



|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 OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND 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 will not lose money on your investment. There is no guarantee that 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 large- 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 InvestmentsSecurities 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 StockFrom 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. 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 move up or down in response to changes in interest rates more 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 SecuritiesThe 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 also may adversely impact the Fund's net asset value.

Repurchase AgreementsWhile 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.

BorrowingsThe 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.

-5-

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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 by the Fund's Board of Directors. The Adviser is the investment adviser to six other mutual funds and to numerous institutions and individuals with substantial investment
portfolios.

The annual fee paid to the Adviser is paid monthly and is based on the average net asset value of the Fund as determined by valuations made at the close of each business day of the month. The annual fee is seventy-five one
hundredths of one percent (0.75 of 1%) of the average net asset value of the Fund up to and including $50,000,000 and sixty-five one hundredths of one percent (0.65 of 1%) of the average net asset value in excess of $50,000,000. For the
fiscal year ended March 31, 2007, total net assets of the Fund were $2,213,530,890. During the fiscal years ended March 31, 2007, 2006 and 2005, the Fund paid the Adviser an aggregate of $15,236,560, $16,218,544 and $15,769,756,
respectively, in fees.

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. In addition,
the Fund is required to pay 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 of 1933 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 costs of prospectuses mailed to existing shareholders and to persons making unsolicited requests for information,
the cost of stock certificates, reports to shareholders, interest charges, taxes and legal fees and expenses. Other operating expenses that the Fund is required to pay under the Investment Advisory Agreement include accounting and administrative
services provided to the Fund by the Adviser. On July 24, 2006, the Board of Directors, including a majority of the independent directors, approved a proposal by the Adviser in accordance with the terms of the Investment Advisory Agreement, subject
to the following guidelines: (i) up to five basis points, on an annual basis, of the average net asset value of the Fund up to and including $2 billion and up to three basis points, on an annual basis, of the average net asset value of the Fund
greater than $2 billion, based on the average net asset value of the Fund as determined by valuations made at the close of each business day of each month, and (ii) where the preceding calculation results in an annual payment of less than
$50,000, the Adviser, in its discretion, may charge the Fund up to $50,000 for such services. Without regard to the actual expenses charged to the Fund by the Adviser, the quality and quantity of services may not be reduced and must be
consistent with past practice. During the fiscal years ended March 31, 2007, 2006 and 2005, the Fund paid the Adviser an aggregate of $732,994, $1,148,420 and $1,181,601, respectively, in accounting and administrative fees. Prior to
November 1, 2004, with limited exceptions, the Adviser did not charge, and was not paid by the Fund, for providing such services. Also included as operating expenses that are paid 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, and certain other costs related to the aforementioned items.

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.

-6-

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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 97% of the outstanding
voting securities 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 is a Senior Vice-President of the Fund and Chief
Investment Officer and a Director of the Adviser. Lynn S. Nicholas is a Senior Vice-President of the Fund and Senior Vice-President of the Adviser. David O. Nicholas and Lynn S. Nicholas are the son and daughter, respectively, of Albert O. Nicholas.
Candace L. Lesak is Vice-President of the Fund and is an employee of the Adviser. Jeffrey T. May is a Senior Vice-President, Treasurer and Chief Compliance Officer of the Fund and Senior Vice-President, Treasurer and Chief Compliance Officer of the
Adviser. Lawrence J. Pavelec, Senior Vice President of the Fund, is Senior Vice President of the Adviser. Mark J. Giese is a Vice-President of the Fund and a Vice-President of the Adviser. K. Thor Lundgren, 100 E. Wisconsin Avenue, Milwaukee,
Wisconsin, is a Director of the Adviser. Mr. Lundgren is a partner with the law firm of Michael Best & Friedrich LLP, Milwaukee, Wisconsin, legal counsel to the Fund and the Adviser.

MANAGEMENT - DIRECTORS AND EXECUTIVE OFFICERS AND PORTFOLIO MANAGERS 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 June 30, 2007. Unless otherwise listed, the business address of each director and officer is 700 North Water Street, Milwaukee, WI 53202.

-7-

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|                                |  |              |  |               |  |                                |  | Number of   |  |              
|------------------------------- |  | ------------ |  | ------------- |  | ------------------------------ |  | ----------- |  | -------------
|                                |  |              |  | Term of       |  |                                |  | Portfolios  |  |              
|                                |  |              |  | Office and    |  |                                |  | in Fund     |  | Other        
|                                |  | Positions    |  | Length of     |  |                                |  | Complex     |  | Directorships
|                                |  | Held With    |  | Time          |  | Principal Occupations          |  | Overseen    |  | Held by      
|Name, Age and Address           |  | Fund         |  | Served        |  | During Past Five Years         |  | by Director |  | Director     
|INTERESTED DIRECTOR             |  |              |  |               |  |                                |  |             |  |              
|                               
|Albert O. Nicholas, 76 (1), (3) |  | President,   |  | (2), 38 years |  | Chief Executive Officer and    |  | 3           |  | None         
|                                |  | Director and |  |               |  | Chairman of the Board,         |  |             |  |              
|                                |  | Co-Portfolio |  |               |  | Nicholas Company, Inc., the    |  |             |  |              
|                                |  | Manager      |  |               |  | Adviser to the Fund. He is     |  |             |  |              
|                                |  |              |  |               |  | Co-Portfolio Manager of and    |  |             |  |              
|                                |  |              |  |               |  | jointly and primarily          |  |             |  |              
|                                |  |              |  |               |  | responsible for the day-to-day |  |             |  |              
|                                |  |              |  |               |  | management of the portfolios   |  |             |  |              
|                                |  |              |  |               |  | of the Fund and Nicholas       |  |             |  |              
|                                |  |              |  |               |  | Equity Income Fund, Inc. He    |  |             |  |              
|                                |  |              |  |               |  | formerly was the sole          |  |             |  |              
|                                |  |              |  |               |  | Portfolio Manager of these     |  |             |  |              
|                                |  |              |  |               |  | funds since each fund's        |  |             |  |              
|                                |  |              |  |               |  | inception. He formerly was     |  |             |  |              
|                                |  |              |  |               |  | the Co-Portfolio Manager of    |  |             |  |              
|                                |  |              |  |               |  | Nicholas High Income Fund,     |  |             |  |              
|                                |  |              |  |               |  | Inc. He is a Chartered         |  |             |  |              
|                                |  |              |  |               |  | Financial Analyst.             |  |             |  |              
|DISINTERESTED                   |  |              |  |               |  |                                |  |             |  |              
|DIRECTORS                       |  |              |  |               |  |                                |  |             |  |              
|Robert H. Bock, 75              |  | Director     |  | (2), 30 years |  | Private Investor, Dean         |  | 6           |  | None         
|                                |  |              |  |               |  | Emeritus of Business Strategy  |  |             |  |              
|                                |  |              |  |               |  | and Ethics, University of      |  |             |  |              
|                                |  |              |  |               |  | Wisconsin School of            |  |             |  |              
|                                |  |              |  |               |  | Business, 1997 to present.     |  |             |  |              
|                               
|Jay H. Robertson, 55            |  | Director     |  | (2), 5 years  |  | Private Investor, April 2000   |  | 7           |  | None         
|                                |  |              |  |               |  | to present. Chairman of the    |  |             |  |              
|                                |  |              |  |               |  | Board, Robertson-Ryan and      |  |             |  |              
|                                |  |              |  |               |  | Associates, Inc., an insurance |  |             |  |              
|                                |  |              |  |               |  | brokerage firm from 1993 to    |  |             |  |              
|                                |  |              |  |               |  | March 2000.                    |  |             |  |              
|OFFICERS                        |  |              |  |               |  |                                |  |             |  |              
|David L. Johnson, 65 (3)        |  | Executive    |  | Annual,       |  | Executive Vice President,      |  | N/A         |  | N/A          
|                                |  | Vice         |  | 27 years      |  | Nicholas Company, Inc., the    |  |             |  |              
|                                |  | President    |  |               |  | Adviser to the Fund, and       |  |             |  |              
|                                |  |              |  |               |  | employed by the Adviser        |  |             |  |              
|                                |  |              |  |               |  | since 1980. He is a Chartered  |  |             |  |              
|                                |  |              |  |               |  | Financial Analyst.             |  |             |  |              
|                               
|                               
|Jeffrey T. May, 51              |  | Senior Vice  |  | Annual,       |  | Senior Vice President,         |  | N/A         |  | N/A          
|                                |  | President,   |  | 14 years      |  | Treasurer and Chief            |  |             |  |              
|                                |  | Secretary,   |  |               |  | Compliance Officer, Nicholas   |  |             |  |              
|                                |  | Treasurer    |  |               |  | Company, Inc., the Adviser to  |  |             |  |              
|                                |  | and Chief    |  |               |  | the Fund, and employed by      |  |             |  |              
|                                |  | Compliance   |  |               |  | the Adviser since 1987. He is  |  |             |  |              
|                                |  | Officer      |  |               |  | Portfolio Manager of           |  |             |  |              
|                                |  |              |  |               |  | Nicholas Money Market          |  |             |  |              
|                                |  |              |  |               |  | Fund, Inc. He is a Certified   |  |             |  |              
|                                |  |              |  |               |  | Public Accountant.             |  |             |  |              

-8-

---

|                          |  |             |  |            |  |                                 |  | Number of   |  |              
|------------------------- |  | ----------- |  | ---------- |  | ------------------------------- |  | ----------- |  | -------------
|                          |  |             |  | Term of    |  |                                 |  | Portfolios  |  |              
|                          |  |             |  | Office and |  |                                 |  | in Fund     |  | Other        
|                          |  | Positions   |  | Length of  |  |                                 |  | Complex     |  | Directorships
|                          |  | Held With   |  | Time       |  | Principal Occupations           |  | Overseen    |  | Held by      
|Name, Age and Address     |  | Fund        |  | Served     |  | During Past Five Years          |  | by Director |  | Director     
|David O. Nicholas, 46 (3) |  | Senior Vice |  | Annual,    |  | Chief Investment Officer and    |  | N/A         |  | N/A          
|                          |  | President   |  | 18 years   |  | Director, Nicholas Company,     |  |             |  |              
|                          |  | and Co-     |  |            |  | Inc., the Adviser to the Fund   |  |             |  |              
|                          |  | Portfolio   |  |            |  | and employed by the Adviser     |  |             |  |              
|                          |  | Manager     |  |            |  | since 1986. He is Portfolio     |  |             |  |              
|                          |  |             |  |            |  | Manager of and primarily        |  |             |  |              
|                          |  |             |  |            |  | responsible for the day-to-day  |  |             |  |              
|                          |  |             |  |            |  | management of the portfolios    |  |             |  |              
|                          |  |             |  |            |  | of Nicholas II, Inc. and        |  |             |  |              
|                          |  |             |  |            |  | Nicholas Limited Edition,       |  |             |  |              
|                          |  |             |  |            |  | Inc. He also is Co-Portfolio    |  |             |  |              
|                          |  |             |  |            |  | Manager of the Fund,            |  |             |  |              
|                          |  |             |  |            |  | Nicholas High Income Fund,      |  |             |  |              
|                          |  |             |  |            |  | Inc. and Nicholas Equity        |  |             |  |              
|                          |  |             |  |            |  | Income Fund, Inc. He is a       |  |             |  |              
|                          |  |             |  |            |  | Chartered Financial Analyst.    |  |             |  |              
|                         
|Lynn S. Nicholas, 51 (3)  |  | Senior Vice |  | Annual,    |  | Senior Vice President,          |  | N/A         |  | N/A          
|                          |  | President   |  | 22 years   |  | Nicholas Company, Inc., the     |  |             |  |              
|                          |  |             |  |            |  | Adviser to the Fund, and        |  |             |  |              
|                          |  |             |  |            |  | employed by the Adviser         |  |             |  |              
|                          |  |             |  |            |  | since 1983. She is a            |  |             |  |              
|                          |  |             |  |            |  | Chartered Financial Analyst.    |  |             |  |              
|                         
|Lawrence J. Pavelec, 48   |  | Senior Vice |  | Annual,    |  | Senior Vice President,          |  | N/A         |  | N/A          
|                          |  | President   |  | 2 years    |  | Nicholas Company, Inc., the     |  |             |  |              
|                          |  |             |  |            |  | Adviser to the Fund, and        |  |             |  |              
|                          |  |             |  |            |  | employed by the Adviser         |  |             |  |              
|                          |  |             |  |            |  | since April 2003. He has        |  |             |  |              
|                          |  |             |  |            |  | been Co-Portfolio Manager of    |  |             |  |              
|                          |  |             |  |            |  | and jointly and primarily       |  |             |  |              
|                          |  |             |  |            |  | responsible for the day-to-day  |  |             |  |              
|                          |  |             |  |            |  | management of the portfolio     |  |             |  |              
|                          |  |             |  |            |  | of Nicholas High Income         |  |             |  |              
|                          |  |             |  |            |  | Fund, Inc. since April 2003.    |  |             |  |              
|                          |  |             |  |            |  | He was a portfolio manager      |  |             |  |              
|                          |  |             |  |            |  | for Brandes Investment          |  |             |  |              
|                          |  |             |  |            |  | Partners from 1999 to April     |  |             |  |              
|                          |  |             |  |            |  | 2003. He is a Chartered         |  |             |  |              
|                          |  |             |  |            |  | Financial Analyst.              |  |             |  |              
|                         
|Mark J. Giese, 36         |  | Vice        |  | Annual,    |  | Vice President, Nicholas        |  | N/A         |  | N/A          
|                          |  | President   |  | 10 years   |  | Company, Inc., the Adviser to   |  |             |  |              
|                          |  |             |  |            |  | the Fund, and employed by       |  |             |  |              
|                          |  |             |  |            |  | the Adviser since 1994. He is   |  |             |  |              
|                          |  |             |  |            |  | Portfolio Manager of and        |  |             |  |              
|                          |  |             |  |            |  | primarily responsible for the   |  |             |  |              
|                          |  |             |  |            |  | day-to-day management of        |  |             |  |              
|                          |  |             |  |            |  | the portfolio of Nicholas       |  |             |  |              
|                          |  |             |  |            |  | Liberty Fund (a series of       |  |             |  |              
|                          |  |             |  |            |  | Nicholas Family of Funds,       |  |             |  |              
|                          |  |             |  |            |  | Inc.). He is a Certified Public |  |             |  |              
|                          |  |             |  |            |  | Accountant and a Chartered      |  |             |  |              
|                          |  |             |  |            |  | Financial Analyst.              |  |             |  |              

-9-

---

|                      |  |           |  |            |  |                                |  | Number of   |  |              
|--------------------- |  | --------- |  | ---------- |  | ------------------------------ |  | ----------- |  | -------------
|                      |  |           |  | Term of    |  |                                |  | Portfolios  |  |              
|                      |  |           |  | Office and |  |                                |  | in Fund     |  | Other        
|                      |  | Positions |  | Length of  |  |                                |  | Complex     |  | Directorships
|                      |  | Held With |  | Time       |  | Principal Occupations          |  | Overseen    |  | Held by      
|Name, Age and Address |  | Fund      |  | Served     |  | During Past Five Years         |  | by Director |  | Director     
|Candace L. Lesak, 49  |  | Vice      |  | Annual,    |  | Employee, Nicholas             |  | N/A         |  | N/A          
|                      |  | President |  | 22 years   |  | Company, Inc., the Adviser to  |  |             |  |              
|                      |  |           |  |            |  | the Fund, since 1983. She is a |  |             |  |              
|                      |  |           |  |            |  | Certified Financial Planner.   |  |             |  |              

|(1) | Albert O. Nicholas is the only director of the Fund who is an "interested person" of the Fund, as that term is defined in the 1940 Act because Mr. Nicholas is Chief Executive Officer and a Director of the Adviser and owns 97% of the outstanding voting securities of the Adviser.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) | Until duly elected or re-elected at a subsequent annual meeting of the Fund.                                                                                                                                                                                                          
|   
|(3) | David O. Nicholas and Lynn S. Nicholas are the son and daughter, respectively, of Albert O. Nicholas. David L. Johnson is the brother-in-law of Albert O. Nicholas.                                                                                                                   
|   

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 table below sets forth the aggregate dollar range of shares owned beneficially by each director of the Fund as of December 31, 2006. In addition, the table sets forth the dollar range of shares beneficially owned by each director of the other mutual funds that Nicholas Company, Inc. advises and are overseen by such director as of December 31, 2006.

|                   |  |                        |  | Aggregate Dollar Range of Equity       
|------------------ |  | ---------------------- |  | ---------------------------------------
|                   |  |                        |  | Securities in All Registered Investment
|                   |  | Dollar Range of Equity |  | Companies Overseen by Director in      
|Name of Director   |  | Securities in the Fund |  | Family of Investment Companies         
|                  
|Albert O. Nicholas |  | Over $100,000          |  | Over $100,000                          
|Robert H. Bock     |  | Over $100,000          |  | Over $100,000                          
|Jay H. Robertson   |  | Over $100,000          |  | Over $100,000                          

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 Fund, Inc. The amount of such fees is subject to increase or decrease at any time.

The table below sets forth the aggregate compensation received by all directors of the Fund during the fiscal year ended March 31, 2007. 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.

|                       |  | Aggregate         |  | Pension or Retirement |  | Estimated       |  | Total Compensation           
|---------------------- |  | ----------------- |  | --------------------- |  | --------------- |  | -----------------------------
|                       |  | Compensation      |  | Benefits Accrued As   |  | Annual Benefits |  | From Fund and Fund           
|Name                   |  | From the Fund (1) |  | Part of Fund Expenses |  | Upon Retirement |  | Complex Paid to Directors (1)
|                      
|Albert O. Nicholas (2) |  | $0                |  | $0                    |  | $0              |  | $0                           
|Robert H. Bock (2)     |  | 12,813            |  | 0                     |  | 0               |  | 30,400                       
|Jay H. Robertson (2)   |  | 6,563             |  | 0                     |  | 0               |  | 29,400                       
|                       |  |                   |  |                       |  |                 |  |                              

|(1) | During the fiscal year ended March 31, 2007, the Fund and other funds in the Nicholas Fund Complex (i.e., those funds which also have Nicholas Company, Inc. as their investment adviser, namely Nicholas Equity Income Fund, Inc., Nicholas II, Inc., Nicholas Liberty Fund (a series of the Nicholas Family of Funds, Inc.), Nicholas Limited Edition, Inc., Nicholas High Income Fund, Inc. and Nicholas Money Market Fund, Inc.) compensated those directors who are not "interested persons" of the Adviser in the form of meeting attendance fees. During the fiscal year ended March 31, 2007, the Fund compensated the disinterested directors at a rate of $1,562.50 per director per meeting attended. In addition, Mr. Robert Bock was paid $1,250 per meeting in 2007 in his capacity as the Chairman of the Board. The disinterested directors did not receive any other form or amount of compensation from the Fund Complex during the fiscal year ended March 31, 2007.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|    | All other directors and officers of the Fund were compensated by the Adviser in accordance with its Investment Advisory Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   

-10-

---

|(2) | Mr. Nicholas also is a member of the Board of Directors of Nicholas Equity Income Fund, Inc., and Nicholas Money Market Fund, Inc. Mr. Robert H. Bock also is a member of the Board of Directors of Nicholas Equity Income
Fund, Inc., Nicholas II, Inc., Nicholas Liberty Fund (a series of the Nicholas Family of Funds, Inc.), Nicholas Limited Edition, Inc. and Nicholas High Income Fund, Inc. Mr. Robertson also is a member of the Board of Directors of Nicholas Equity
Income Fund, Inc., Nicholas II, Inc., Nicholas Limited Edition, Inc., Nicholas Liberty Fund (a series of the Nicholas Family of Funds, Inc.), Nicholas High Income Fund, Inc. and Nicholas Money Market Fund, Inc.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

The Fund and the Adviser adhere to Codes of Ethics ("Codes") established and adopted 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 principle 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 purchased or sold, or are being considered for purchase or sale, 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.

As a shareholder of the companies in which the Fund invests, the Fund receives proxies to vote at those companies' annual or special meetings. The Fund has adopted Proxy Voting Policies and
Procedures ("Proxy Voting Policies") pursuant to which the Fund votes shares owned by the Fund. The Fund always endeavors to vote proxies relating to portfolio securities in accordance with its best judgment as to the advancement of the Fund's
investment objectives. The general principles of the Proxy Voting Policies reflect the Fund's basic investment criterion that good company management is shareholder focused and should generally be supported. The Fund generally supports management on
routine matters and supports management proposals that are plainly in the interests of shareholders. The Fund's management reviews the Proxy Voting Policies annually.

Subject to the Board's oversight, the Fund has final authority and fiduciary responsibility for voting proxies received by the Fund; however, it has delegated the implementation of the Fund's
Proxy Voting Policies to a proxy voting service that is not affiliated with the Fund or its adviser. In addition, this proxy voting service will make vote recommendations consistent with the Proxy Voting Policies with respect to each proxy that the
Fund receives. The Adviser generally anticipates that it will follow the recommendations of the independent proxy voting service.

The following is a summary of the manner in which the Fund would normally expect to vote on certain matters that typically are included in the proxies that the Fund receives each year; however,
each proxy needs to be considered separately and the Fund's vote may vary depending upon the actual circumstances presented. Proxies for extraordinary matters, such as mergers, reorganizations and other corporate transactions, are necessarily
considered on a case-by-case basis in light of the merits of the individual transactions.

ELECTION OF DIRECTORS, CORPORATE GOVERNANCE AND ROUTINE MATTERS - Generally, the Fund supports the company's nominees to serve as directors. The Fund generally supports management on routine
corporate matters and matters relating to corporate governance. For example, the Fund generally expects to support management on the following matters: increases in the number of authorized shares of or issuances of common stock or other equity
securities; provisions of the corporate charter addressing indemnification of directors and officers; stock repurchase plans; and the selection of independent accountants. The types of matters on corporate governance that the Adviser would expect to
vote against include: the issuance of preferred shares where the board of directors has complete freedom as to the terms of the preferred; the adoption of a classified board; the adoption of poison pill plans or similar anti-takeover measures; and
the authorization of a class of shares not held by the Fund with superior voting rights.

-11-

---

COMPENSATION ARRANGEMENTS AND STOCK OPTION PLANS - The Fund reviews on a case-by-case basis compensation arrangements and the establishment of stock option plans. The Fund generally believes,
if its view of management is favorable enough that the Fund has invested in the company, arrangements that align the interests of management and shareholders are beneficial to long-term performance. However, some arrangements or plans have features
that the Fund would oppose. For example, the Fund would vote against an option plan that has the potential to unreasonably dilute the interests of existing shareholders, permit equity overhang that exceed certain levels or that allow for the
repricing of outstanding options.

SOCIAL POLICY BASED PROPOSALS - Generally, the Adviser will vote in accordance with management recommendations on proposals addressing social or political issues.

If the Fund's management believes that a conflict of interest exists with respect to its exercise of any proxy received by the Fund, the Fund will generally rely on the recommendations of the
independent proxy voting service. The Adviser's compliance staff will review any votes where a potential conflict exists and the Fund does not rely on the proxy voting services recommendations. A conflict of interest may arise, for example, if the
company to which the proxy relates is a client of the Adviser or one of its affiliates or if the Adviser or one of its affiliates has a material business relationship with that company.

In August of each year the Fund will file with the Securities and Exchange Commission information regarding the voting of proxies by the Fund for the 12-month period ending the preceding June
30th. Shareholders will be able to view such filings on the Commission's website at http://www.sec/gov or at the Fund's website at http://www.nicholasfunds.com. Shareholders may also obtain a copy of the Proxy Voting Policies by contacting the Fund
at 800-544-6547 (toll-free).



|PRINCIPAL SHAREHOLDERS
|----------------------

All directors and executive officers of the Fund as a group (10 persons) beneficially own 1.78% of the outstanding shares of the Fund as of June 30, 2007.



|PORTFOLIO MANAGERS OF THE FUND
|------------------------------

Mr. Albert O. Nicholas and Mr. David O. Nicholas are the Portfolio Managers of the Fund and are jointly and primarily responsible for the day-to-day management of the Fund. The following table identifies the number of
accounts (other than the Fund) for which they are jointly and primarily responsible for the day-to-day management of and total assets of other such accounts within each of the following categories: registered investment companies, other pooled
investment vehicles, and other accounts as of March 31, 2007.

|Portfolio Managers |  | Registered Investment Companies, Pooled Investment                       
|------------------ |  | -------------------------------------------------------------------------
|                   |  | Vehicles and Other Accounts                                              
|Albert O. Nicholas |  | 1 registered investment company with $41 million in total assets under   
|                   |  | management and no pooled investment vehicles or other accounts           
|David O. Nicholas  |  | 4 registered investment companies with $852 million in total assets under
|                   |  | management and no pooled investment vehicles or other accounts           

There are no accounts with respect to which the advisory fees are based on the performance of the account.

Material conflicts of interest may arise when the Fund's portfolio managers also have day-to-day management responsibilities with respect to one or more other funds or other accounts, as is the
case for both Mr. Albert O. Nicholas and Mr. David O. Nicholas. These potential conflicts include:

Allocation of Limited Time and Attention. A portfolio manager who is responsible for managing multiple funds and/or accounts may devote unequal time and attention to the management of those
funds and/or accounts. The effects of this potential conflict may be more pronounced where funds and/or accounts overseen by a particular portfolio manager have different investment strategies.

-12-

---

Pursuit of Differing Strategies. At times, a portfolio manager may determine that an investment opportunity may be appropriate for only some of the funds and/or accounts for which he exercises
investment responsibility, or may decide that certain of the funds and/or accounts should take differing positions with respect to a particular security. In these cases, the portfolio manager may place separate transactions for one or more funds or
accounts which may affect the market price of the security or the execution of the transaction, or both, to the detriment or benefit of one or more other funds and/or accounts.

Selection of Brokers - Dealers. Portfolio managers may be able to select or influence the selection of the brokers and dealers that are used to execute securities transactions for the funds
and/or accounts that they supervise. In addition to executing trades, some brokers and dealers provide portfolio managers with brokerage and research services (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934),
which may result in the payment of higher brokerage fees than might have otherwise been available. These services may be more beneficial to certain funds or accounts than to others. Although the payment of brokerage commissions is subject to the
requirement that the portfolio manager determine in good faith that the commissions are reasonable in relation to the value of the brokerage and research services provided to the fund, a portfolio manager's decision as to the selection of brokers
and dealers could yield disproportionate costs and benefits among the funds and/or accounts that he manages.

The Adviser and the Fund have adopted compliance polices and procedures that are designed to address various conflicts of interest that may arise for the Adviser and the individuals that it
employs. For example, the Adviser has adopted trade allocation procedures that are designed to facilitate the fair allocation of limited investment opportunities among multiple funds and accounts. There is no guarantee, however, that the policies
and procedures adopted by the Adviser and the Fund will be able to detect and/or prevent every situation in which an actual or potential conflict may appear.

The Fund's Portfolio Managers are employed and compensated by the Fund's Adviser, not the Fund. The Adviser compensate its portfolio managers based on the investment performance results of the funds and accounts they
manage, the value of the assets in the funds and accounts they manage, in addition to the profitability of the Adviser. As of the Fund's most recently completed fiscal year, March 31, 2007, the Fund's Portfolio Managers' compensation consisted of a
base salary, an annual discretionary bonus and participation in the Adviser's deferred compensation program (with the exception that Mr. A. Nicholas does not participate in the deferred compensation program due to his majority ownership of the
Adviser). The Adviser reviews the base salary of the Portfolio Managers annually to ensure that it reflects their performance, is competitive within the industry and coincides with the skill level necessary to manage the Fund. The annual
discretionary bonus is determined by the Adviser's Board of Directors based on a number of subjective and objective factors believed by the Adviser's Board of Directors to be material to its decision. Those factors that may be considered include,
without limitation, the Fund's relative and actual long-term, intermediate, and short-term performance before taxes, the Fund's performance relative to its benchmarks and peer group, and the portfolio manager's overall contributions to the
organization. The benchmarks and peer groups that the Adviser's Board of Directors may consider are determined annually in the board's discretion and may include, without limitation, the Standard and Poor's Indices and the Russell Indices. The
deferred compensation pool is based on the profits of the Adviser and is divided among select employees of the Adviser on a discretionary basis.

The table below identifies beneficial ownership of the Fund's shares by the Portfolio Managers as of March 31, 2007.

|Portfolio Managers |  | Dollar Range of Ownership of Securities
|------------------ |  | ---------------------------------------
|Albert O. Nicholas |  | Over $1,000,000                        
|David O. Nicholas  |  | Over $1,000,000                        



|DISTRIBUTION OF FUND SHARES
|---------------------------

Quasar Distributors, LLC (the "Distributor"), 615 East Michigan Street, Milwaukee, Wisconsin, 53202, is the distributor of the Funds' shares pursuant to a Distributor Agreement dated May 1, 2005. The Distributor is a
registered broker-dealer and member of the National Association of Securities Dealers, Inc.

-13-

---

PURCHASE, REDEMPTION AND PRICING OF FUND SHARES

The sections captioned "PURCHASE OF FUND SHARES," "REDEMPTION OF FUND SHARES," and "EXCHANGE BETWEEN FUNDS" in the Fund's Prospectus discuss how you may purchase, redeem or exchange shares of
the Fund and are incorporated into this Statement of Additional Information by reference.

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.

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

Shareholder purchase, redemption and exchange orders are processed using the net asset value ("NAV") next calculated after receipt of such request in proper order by the Fund (or an Authorized
Agent 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 NYSE on each day the NYSE is open for unrestricted trading. The NYSE is open for trading Monday through Friday except New Year's Day, Martin Luther King
Day, President's Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Additionally, if any of the aforementioned holidays falls on a Saturday, the NYSE generally 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, on the securities principal exchange, or in the absence of any sale on that day, the
closing bid price. For valuing securities traded on the NASDAQ market, the Fund uses the NASDAQ Official Closing Price. Most debt securities, excluding short-term investments, are valued at the current evaluated bid price. Bid prices for debt
securities are obtained from the Fund's pricing service which generally consults one or more market makers of each debt security being priced. Debt securities listed on a national exchange may be priced at the last sales price if the Fund's pricing
service believes such price represents market value of the security for institutional trades. The pricing of all debt securities takes into account the fact that the Fund trades in institutional size trading units. 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. As an example, a market quotation may not be readily
available if the trading of a security is halted by its primary exchange and does not resume before the markets close or the primary exchange experiences technical difficulties. If a security is valued using fair value pricing, the Fund's value for
that security is likely to be different than the last quoted market value.



|ANTI-MONEY LAUNDERING PROGRAM
|-----------------------------

The Fund has established an Anti-Money Laundering Compliance Program (the "Program") as required by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 ("USA PATRIOT Act"). In order to ensure compliance with this law, the Fund's Program provides for the development of internal practices, procedures and controls, designation of anti-money laundering compliance officers, an ongoing training
program and an audit function to determine the effectiveness of the Program.

-14-

---

Procedures to implement the Program include, but are not limited to, determining that the Fund's transfer agent has established proper anti-money laundering procedures, reporting suspicious and/or fraudulent activity,
checking shareholder names against designated government lists, including the Office of Foreign Asset Control and a complete and thorough review of all new opening account applications. The Fund will not transact business with any person or entity
whose identity cannot be adequately verified under the provisions of the USA PATRIOT Act.

DIVIDENDS, DISTRIBUTIONS AND FEDERAL TAX STATUS

The Fund intends to qualify annually as a "regulated investment company" under the Internal Revenue Code of 1986 (the "Code") and intends to take all other action required to 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 to its shareholders substantially all of its net investment income and net realized capital gain in one or more distributions for each fiscal year
(after utilization of any available capital loss carryovers). If the Fund fails to qualify as a regulated investment company under the Internal Revenue Code, its income will be subject to federal income tax, and dividends paid to shareholders will
continue to be subject to federal income tax.

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
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, dividends and 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. Net realized long-term gains are paid to shareholders as capital gain distributions. Income distributed from the Fund's net investment income and net realized short-term gains are paid to shareholders as
ordinary income dividends. Distributions may be taxable at different rates depending on the length of time the Fund holds a security. Distributions generally will be made in June and December of each year. 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 dividends received from domestic corporations in any one 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. 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.

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

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.

-15-

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PORTFOLIO TRANSACTIONS AND 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 or dealer.

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 such 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 or dealer 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
March 31, 2007.

|         |  | Amount of Commissions |  |                         
|-------- |  | --------------------- |  | ------------------------
|         |  | Paid to Firms that    |  |                         
|         |  | Provided              |  | Amount of Brokerage     
|         |  | Research Services(1)  |  | Transactions Involved(1)
|         |  |                       |  |                         
|The Fund |  | $524,812              |  | $369,826,836            

|(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.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   

-16-

---

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 quotations 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 recommended 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 $2,359,463, $2,191,698 and $1,674,072 in the fiscal years ended March 31, 2007, 2006 and 2005, respectively.

The Adviser, which is the investment adviser to seven registered investment companies (including the Fund) and other advisory clients (collectively, "client accounts"), may occasionally make
investment decisions which would involve the purchase or sale of securities for the portfolios of more than one client account at the same time. As a result, the demand for securities being purchased or the supply of securities being sold may
increase, and this could have an adverse effect on the price of those securities and/or the size of the position obtained or disposed of by the client accounts. It is the Adviser's policy not to favor one client account over another in making
investment recommendations or in placing orders.

The Adviser has adopted procedures that provide generally for the Adviser to aggregate (or "bunch") orders for more than one client account. An aggregated order occurs when the Adviser enters a
single order for the purchase or sale of a single security on behalf of more than one client account. The Adviser may aggregate orders when it deems it to be appropriate and in the best interests of the client accounts. Pursuant to the Adviser's
trade allocation procedures, client accounts will participate in any aggregated order for a security at the average share price on any given date for all of the Adviser's transactions in that security on behalf of those clients participating in the
aggregated order, with transaction costs shared pro rata based on participation. When an aggregated order is only partially filled, the securities purchased generally will be allocated on a pro rata basis to each client account participating in the
aggregated order based upon the initial amount requested for the account (subject to certain exceptions) and each participating account will participate at the average share price for the aggregated order on the same business day. Because a pro rata
allocation may not always adequately accommodate all facts and circumstances, the trade allocation procedures allow the allocation of securities on a basis other than pro rata. For example, adjustments may be made to eliminate de minimis positions,
to give priority to accounts with specialized investment policies and objectives or to consider the unique characteristics of certain accounts (e.g., available cash, industry or issuer concentration, duration or credit exposure).

The Adviser also has adopted procedures governing the allocation of securities issued in initial public offerings ("IPOs") which provide that all portfolio managers for the Adviser's client
accounts shall be informed of any opportunity to acquire IPO securities which is presented to or which becomes available to the Adviser or any of its clients. Each client's portfolio manager shall assess whether or not the acquisition of IPO
securities is appropriate for, and in the best interests of, his client, based upon multiple factors, including but not limited to the following: (i) the investment objective of the client; (ii) risk tolerance of the client; (iii) market
capitalization of the IPO issuer; (iv) nature of the IPO issuer's business and industry; (v) current composition of the client's portfolio (including cash position); and (vi) preference of the portfolio manager for IPO investment opportunities. The
IPO procedures provide that a written allocation statement shall be prepared prior to the Adviser submitting an order for IPO securities which identifies the client accounts to participate, the extent of such participation and the basis for
allocation among the participating clients in the event the IPO order is partially filled. The allocation in the event of a partial order fill may be based upon a number of factors including but not limited to those specified as factors to be
considered in assessing whether or not a client will invest in IPO securities. The procedures provide that any deviation from the initial allocation statement shall be approved by either Albert O. Nicholas or David O. Nicholas, and the Adviser's
compliance officer.

-17-

---

The Adviser's procedures for allocation of IPO investment opportunities are designed to ensure that all clients are treated fairly and equitably. However, the procedures do not mandate
allocation of IPO investment opportunities among its clients in equal amounts or pro rata based upon the size of the client account's assets. Adviser clients whose accounts are actively traded, have high portfolio turnover rates or invest heavily in
all types of IPOs and secondary offerings may receive a greater percentage of IPO allocations than other client accounts without such characteristics.



|PERFORMANCE DATA
|----------------

The average annual total return of the Fund is calculated according to the following formula:



|P(1+T)n= ERV
|------------

where P equals a hypothetical initial payment of $1,000; T equals average annual total return; n equals the number of years; and ERV equals the ending redeemable value at the end of the period of a hypothetical
$1,000 payment made at the beginning of the period.

Average annual total return, or "T" in the above formula, is computed by finding the average annual compounded rates of return over the period that would equate the initial amount invested to
the ending redeemable value. Average annual total return assumes the reinvestment of all dividends and distributions.

The average annual total return (after taxes on distributions) of the Fund is computed by finding the average annual compounded rates of return over the periods that would equate the initial
amount invested to the ending value, according to the following formula:



|P(1+T)n=ATVD
|------------

where "P" equals a hypothetical initial payment of $1000; "T" equals average annual total return (after taxes on distributions; "n" equals the number of years; and "ATVD" equals the ending value of a hypothetical $1,000 investment made at the beginning of the stated periods at the end of the stated periods, after taxes on Fund distributions but not after
taxes on redemptions.

The average annual total return (after taxes on distributions and sale of Fund shares) of the Fund is computed by finding the average annual compounded rates of return over the periods that
would equate the initial amount invested to the ending value, according to the following formula:



|P(1+T)n=ATVDR
|-------------

where "P" equals a hypothetical initial payment of $1,000; "T" equals average annual total return (after taxes on distributions; "n" equals the number of years; and "ATVDR" equals ending value of a hypothetical
$1,000 investment made at the beginning of the stated periods at the end of the stated periods, after taxes on Fund distributions and redemptions.

After-tax returns for the Fund are calculated using historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. In certain cases the
figure representing "Return After Taxes on Distributions and Sales of Fund Shares" may be higher than the other return figures of the same period. A higher after-tax return results when a capital loss occurs upon redemption and provides an assumed
tax deduction that benefits the investor. Your actual after-tax returns depend on you tax situation and may differ from those shown. If you own Fund shares in a tax-deferred account, such as a 401(k) plan or an individual retirement account ("IRA"),
this information may not apply to your investment.

Cumulative total return represents the simple change in value of an investment over a stated period and may be quoted as a percentage or as a dollar amount. Total returns may be broken down
into their components of income and capital (including capital gains and changes in share price) in order to illustrate the relationship between these factors and their contributions to total return.

The Fund's performance data represents past performance and is not intended to predict or indicate future results. The return and principal value of an investment in the Fund will fluctuate,
and an investor's redemption proceeds may be more or less than the original investment amount.

-18-

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|CAPITAL STRUCTURE
|-----------------

Nicholas Fund, Inc. is authorized to issue 200,000,000 shares of common stock, par value $0.50 per share. Each full 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 shareholders have no preemptive, rights and may not cumulate their votes in the election of
directors. The Funds' shares, when issued, are fully paid and non-assessable.



|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, U.S.
Bancorp Fund Services, LLC ("U.S. Bancorp"), and direct that his account be credited with the shares. A shareholder may in writing direct U.S. Bancorp 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 to do so by the record holders of not less than 10% of the outstanding shares of common stock of the Fund. The affirmative vote of two-thirds of the outstanding shares, cast in person
or by proxy at a meeting called for such purpose, is required to remove a Director of the Fund. The Fund will assist shareholders in communicating with each other for this purpose pursuant to the requirements of Section 16(c) of the 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 March 31, an annual report
or current prospectus containing financial statements audited by the Fund's Independent Registered Public Accounting Firm, Ernst & Young LLP, will be sent to shareholders.



|CUSTODIAN AND TRANSFER AGENT
|----------------------------

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

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND LEGAL COUNSEL

Ernst & Young LLP, 233 South Wacker Drive, Chicago, Illinois 60606 served as the Fund's independent registered public accounting firm for the fiscal year ended March 31, 2007.

Michael Best & Friedrich LLP, 100 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, counsel for the Fund, has passed upon the legality of the shares of the Fund being offered by this
Prospectus.

-19-

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|FINANCIAL INFORMATION
|---------------------

The schedule of investments, the financial statements, the financial highlights and notes thereto and the Report of Independent Registered Public Accounting Firm contained in the Annual Report of the Fund for the fiscal
year ended March 31, 2007, which have been filed with the SEC pursuant to Rule 30e-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.

-20-

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|NICHOLAS FUND, INC.PART COTHER INFORMATION
|------------------------------------------



|Item 23. Exhibits
|-----------------

|(a) | Amended and Restated Articles of Incorporation were previously filed with the Registration Statement on Form N1-A (File No. 002-30447) and are incorporated herein by reference.                    
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(b) | Amended and Restated Bylaws were previously filed with the Registration Statement on Form N1-A (File No. 002-30447) and are incorporated herein by reference.                                       
|   
|(c) | Instruments Defining Rights of Security Holders is incorporated by reference to Registrant's Amended and Restated Articles of Incorporation and Bylaws.                                             
|   
|(d) | Amended Investment Advisory Agreement was previously filed with the Registration Statement on Form N-1A (File No. 002-30447) and is incorporated herein by reference.                               
|   
|(e) | Distribution Agreement, dated as of May 1, 2005, among Quasar Distributors, LLC, Nicholas Company, Inc. and each fund in the Nicholas fund complex, including Nicholas Fund, Inc. is filed herewith.
|   
|(f) | Bonus or Profit Sharing Contracts is not applicable.                                                                                                                                                
|   
|(g) | Custodian Agreement was previously filed with the Registration Statement on Form N-1A (File No. 002-30447) and is incorporated herein by reference.                                                 
|   
|(h) | Other Material Contracts                                                                                                                                                                            
|   
|    | (i)                                                                                                                                                                                                 
|   
|(i) | Opinion and Consent of Counsel is filed herewith.                                                                                                                                                   
|   
|(j) | Consent of Independent Registered Public Accounting Firm is filed herewith.                                                                                                                         
|   
|(k) | Omitted Financial Statements is not applicable.                                                                                                                                                     
|   
|(l) | Agreement Relating to Initial Capital is not applicable.                                                                                                                                            
|   
|(m) | Rule 12b-1 Plan is not applicable.                                                                                                                                                                  
|   
|(n) | Rule 18f-3 Plan is not applicable.                                                                                                                                                                  
|   
|(o) | Reserved.                                                                                                                                                                                           
|   
|(p) | Code of Ethics                                                                                                                                                                                      
|   
|    | (i)                                                                                                                                                                                                 
|   
|    | (ii)                                                                                                                                                                                                
|   

---

Item 24. Persons Controlled by or Under Common Control with the Fund.

No person is directly or indirectly controlled by or under common control with the Registrant. The Registrant is not under common control with any other person. The Registrant, Nicholas Equity Income Fund, Inc., Nicholas
II, Inc., Nicholas High Income Fund, Inc., Nicholas Liberty Fund (a series of Nicholas Family of Funds, Inc.), Nicholas Limited Edition, Inc., and Nicholas Money Market Fund, Inc., which are all Maryland corporations, 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 XIII of the Amended and Restated Articles of Incorporation of the Registrant provides for the indemnification of its officers and director against liabilities incurred in such
capacities to the fullest extent permitted under Maryland General Business Corporation Law and the Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder (the "Investment Company Act"). However, Section 7 of
the Amended and Restated Bylaws of the Registrant provide that the Registrant may not indemnify any officer or director with respect to matters as to which such person has been adjudged liable because of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his office.

The Registrant also maintains a joint errors and omissions insurance policy with a $10.0 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 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.

Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the Registrant pursuant to the foregoing
provisions, 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 is, therefore, unenforceable.

Indemnification of the Registrant's underwriter, Quasar Distributors, LLC is provided for in the Distribution Agreement, dated as of May 1, 2005, among Quasar Distributors, LLC, Nicholas Company, Inc. and each fund in the
Nicholas fund complex, including Nicholas Fund, Inc., for certain losses incurred by Quasar Distributor, LLC arising in connection with services provided under the Distribution Agreement.

Item 26. Business and Other Connections of the Investment Adviser.

The information required by this Item 26 with respect to any other business, profession, vocation or employment of a substantial nature engaged in during the past two fiscal years by the Registrant's investment adviser,
Nicholas Company, Inc., and each director and officer of Nicholas Company, Inc. is incorporated by reference to the Adviser's Uniform Application for Investment Adviser Registration (Form ADV) on file with the Securities and Exchange Commission
("SEC"), dated January 26, 2007. The Adviser's Form ADV may be obtained, free of charge, at the SEC's website at www.adviserinfo.sec.gov.

---



|Item 27. Principal Underwriter.
|-------------------------------

The Registrant's distributor, Quasar Distributors, LLC (the "Distributor") acts as principal underwriter and distributor for the following investment companies:

|AIP Alternative Strategies Funds    |  | Akros Absolute Return Fund       |  | Al Frank Funds                
|----------------------------------- |  | -------------------------------- |  | ------------------------------
|Allied Asset Advisors Funds         |  | Alpine Equity Trust              |  | Alpine Income Trust           
|Alpine Series Trust                 |  | American Trust Allegiance Fund   |  | Appleton Group                
|Ascentia Long/Short Fund            |  | Bowen, Hanes Investment Trust    |  | Brandes Investment Trust      
|Brandywine Blue Funds, Inc.         |  | Brazos Mutual Funds              |  | Bridges Investment Fund, Inc. 
|Buffalo Funds                       |  | Capital Advisors Funds           |  | CastleRock Fund               
|Chase Funds                         |  | Chase Funds                      |  | Conning Money Market Portfolio
|Cookson Peirce                      |  | Country Funds                    |  | Cullen Funds                  
|Duncan-Hurst Funds                  |  | Edgar Lomax Value Fund           |  | Everest Series Funds Trust    
|FFTW Funds, Inc.                    |  | FIMCO Funds                      |  | First American Funds, Inc.    
|First American Strategy Funds, Inc. |  | Fort Pitt Capital Group, Inc.    |  | Fund X Funds                  
|Glenmede Fund, Inc.                 |  | Glenmede Portfolios              |  | Greenspring Fund              
|Greenville Small Cap Growth Fund    |  | Guinness Atkinson Funds          |  | Harding Loevner Funds         
|Hennessy Funds, Inc                 |  | Hennessy Mutual Funds, Inc.      |  | Hester Total Return Fund      
|High Pointe Funds                   |  | High Pointe Funds                |  | Hotchkis and Wiley Funds      
|Intrepid Capital Management         |  | Jacob Internet Fund Inc.         |  | Jacobs & Company Mutual Fund  
|Jensen Portfolio                    |  | Julius Baer Funds                |  | Kensington Funds              
|Kiewit Investment Fund L.P.         |  | Kirr Marbach Partners Funds, Inc |  | Leonetti Funds                
|Light Revolution Fund               |  | Lighthouse Capital Management    |  | LKCM Funds                    
|Masters' Select Fund Trust          |  | Matrix Asset Advisors, Inc.      |  | McCarthy Fund                 
|McIntyre Global Equity Fund         |  | MDT Funds                        |  | Midanek/Pak Fund              
|Monetta Fund, Inc.                  |  | Monetta Trust                    |  | MP63 Fund                     
|Muhlenkamp (Wexford Trust)          |  | Mutuals.com                      |  | Mutuals.com Vice Fund         
|Nicholas Funds                      |  | NorCap Funds, Inc.               |  | Optimum Q Funds               
|Osterweis Funds                     |  | Perkins Capital Management       |  | Permanent Portfolio Funds     
|PIA Funds                           |  | PIA Funds                        |  | Portfolio 21                  
|Primecap Odyssey Funds              |  | Prudent Bear Funds, Inc.         |  | Purisima Funds                
|Rainier Funds                       |  | Stephens Small Cap Growth Fund   |  | Summit Funds                  
|Teberg Fund                         |  | Thompson Plumb (TIM)             |  | TIFF Investment Program, Inc. 
|Tygh Capital Management             |  | Villere Fund                     |  | Women's Equity Fund           

The board members and officers of Quasar Distributors, LLC and their positions or offices with the Registrant are identified in the following table. Unless otherwise noted, the business address
for each board member or officer is Quasar Distributors, LLC, 615 East Michigan Street, Milwaukee, WI 53202.

|                          |  | POSITION AND OFFICES WITH |  | POSITION AND OFFICES WITH
|------------------------- |  | ------------------------- |  | -------------------------
|NAME                      |  | UNDERWRITER               |  | REGISTRANT               
|James R. Schoenike        |  | President, Board Member   |  | None                     
|Joe D. Redwine            |  | Board Member              |  | None                     
|Robert Kern               |  | Board Member              |  | None                     
|777 East Wisconsin Avenue |  |                           |  |                          
|Milwaukee, WI 53202       |  |                           |  |                          
|Eric W. Falkeis           |  | Board Member              |  | None                     
|777 East Wisconsin Avenue |  |                           |  |                          
|Milwaukee, WI 53202       |  |                           |  |                          
|Susan L. La Fond          |  | Chief Financial Officer   |  | None                     
|Andrew M. Strnad          |  | Secretary                 |  | None                     
|Donna J. Berth            |  | Treasurer                 |  | None                     
|Teresa Cowan              |  | Assistant Secretary       |  | None                     

---



|Item 28. Location of Accounts and Records.
|------------------------------------------

The books and records required to be maintained by Section 31(a) of the Investment Company Act of 1940 are maintained at the following locations:

|Records Relating to:            |  | Are located at:                                    
|------------------------------- |  | ---------------------------------------------------
|                                |  |                                                    
|Registrant's Transfer Agent     |  | U.S. Bancorp Fund Services, LLC                    
|                                |  |                                                    
|                                |  |                                                    
|                                |  |                                                    
|Registrant's Custodian          |  | U.S. Bank, National Association                    
|                                |  |                                                    
|                                |  |                                                    
|                                |  |                                                    
|Registrant's Investment Adviser |  | Nicholas Company, Inc.                             
|                                |  |                                                    
|                                |  |                                                    
|                                |  |                                                    
|                               
|Item 29.                        |  | Management Services Not Discussed in Parts A and B.
|                               
|                                |  | Not applicable.                                    
|                               
|Item 30.                        |  | Undertakings.                                      
|                               
|                                |  | None.                                              

---



|SIGNATURES
|----------

Pursuant to the requirements the Securities Act of 1933, and the Investment Company Act of 1940, each as amended, the Registrant certifies that it meets all of the requirements for
effectiveness of the Registration Statement under Rule 485(b) under the Securities Act of 1933, as amended, and has duly caused this Registration Statement to be signed below on its behalf by the undersigned, thereunto duly authorized, in the City
of Milwaukee and State of Wisconsin, on the 27thday of July, 2007.

|Nicholas Fund, Inc.
|-------------------
|                   
|By:                
|                   
|                   
|                   

Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment to the Registration Statement has been signed below by the following persons in the capacities indicated
on the 27thday of July, 2007.

|/s/                     |  | Albert O. Nicholas*                 |  | President (Chief Executive
|----------------------- |  | ----------------------------------- |  | --------------------------
|                        |  | Albert O. Nicholas                  |  | Officer), and Director    
|                       
|/s/                     |  | Robert H. Bock*                     |  | Director                  
|                        |  | Robert H. Bock                      |  |                           
|                       
|/s/                     |  | Jay H. Robertson*                   |  | Director                  
|                        |  | Jay H. Robertson                    |  |                           
|                       
|                       
|                       
|* By:/s/ Jeffrey T. May |  |                                    
|                        |  | Jeffrey T. May,                     |  |                           
|                        |  | Attorney-in-Fact pursuant to        |  |                           
|                        |  | Power of Attorney previously filed. |  |                           

---

|EXHIBIT INDEX                                       |  |            
|--------------------------------------------------- |  | -----------
|Exhibit                                             |  | Exhibit No.
|Opinion and Consent of Michael Best & Friedrich LLP |  | EX-99.i.   
|Consent of Ernst & Young LLP                        |  | EX-99.j.   
|Code of Ethics of Registrant                        |  | EX-99.p.1. 
|Code of Ethics of Registrant's Adviser              |  | EX-99.p.2. 

---