UNITED STATES

SECURITIES AND EXCHANGECOMMISSION

Washington, D.C. 20549

 

**FORM N-CSR**

> 
**CERTIFIED SHAREHOLDER REPORT  OF REGISTERED MANAGEMENT INVESTMENT COMPANIES**

Investment Company Act file number 811-01728

 

Nicholas Fund, Inc.

(Exact Name of Registrant asspecified in charter)

 

700 North Water Street,Milwaukee, Wisconsin 53202

(Address of Principal ExecutiveOffices)          (Zip Code) 

 

Jeffrey T. May, Senior VicePresident, Secretary and Treasurer

700 North Water Street

Milwaukee, Wisconsin 53202

(Name and Address of Agent forService) 

 

Registrant's telephone number, including areacode: 414-272-4650

 

Date of fiscal year end: 03/31/2010

 

Date of reporting period: 09/30/2009

 

**Item 1. Report to Stockholders.**

 

 

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                                 SEMIANNUAL REPORT
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                                 September 30, 2009
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                                NICHOLAS FUND, INC.
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                               700 North Water Street
                             Milwaukee, Wisconsin 53202
                               www.nicholasfunds.com
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November 2009

Report to Fellow Shareholders:

For the first six months of the fiscal year ending March 31, 2010, Nicholas Fundreturned 39.11% versus 34.02% for the Standard and Poor's 500 Index. As of September 30,2009, calendar year-to-date results were as follows: Nicholas Fund, 26.59 % and the S andP 500, 19.26%. The comparisons to the benchmark as shown below are favorable for eachperiod.

Returns for Nicholas Fund, Inc. and selected indices are provided in the chart belowfor the periods ended September 30, 2009.
   
Average    Annual Total Return 
6 Month
1 Year
3 Year
5 Year
10 Year
Life*Nicholas Fund, Inc. 
39.11%
-0.18%
-2.35%
2.18%
1.18%
10.34%Standard and Poor's 500 Index 
34.02%
-6.91%
-5.43%
1.02%
-0.15%
9.53%Consumer Price Index 
1.45%
-1.32%
2.09%
2.60%
2.55%
4.51%Ending value of $10,000 invested in    Nicholas Fund, Inc. 
$13,911
$9,982
$9,312
$11,137
$11,240
$523,180Fund’s Expense Ratio (from 07/31/09    Prospectus): 0.77%** The life of the Fund is 40.2 years from the date of its initial  public offering, July 14, 1969. Starting time period for the Standard and Poor's 500 Index  and the Consumer Price Index was June 30, 1969.*
The Fund's expense ratio for the period ended September 30, 2009 can be found in thefinancial highlights included within this report. *Performance data quoted represents past performance and is no guarantee of futureresults. The investment return and principal value of an investment will fluctuate so thatan investor's shares, when redeemed, may be worth more or less than their original cost.Current performance of the Fund may be lower or higher than the performance quoted.Performance data current to the most recent month-end may be obtained by visitingwww.nicholasfunds.com/returns.html. 
The Fund's returns are reduced by expenses, while the market indices are not. Theending values above illustrate the performance of a hypothetical $10,000 investment madein the Fund over the timeframes listed. Assumes reinvestment of dividends and capitalgains, but does not reflect the effect of any applicable sales charge or redemption fees.Returns shown do not reflect the deduction of taxes that a shareholder would pay on Funddistributions or the redemption of Fund shares.These figures do not imply any future performance.
At September 30, 2009, 96% of the Fund's net assets were invested in equities with 4%in cash equivalents. The diversified portfolio consisted of 54 stocks. The Fund's top fiveholdings were Oshkosh Corp., Affiliated Managers Group, Kinder Morgan Management, WalgreenCompany and DaVita. These five holdings accounted for approximately 20% of the Fund'sholdings. The largest industry concentrations were in health care at approximately 19%,consumer discretionary at 17%, industrials at 15%, energy at 12% and financials at 11% ofthe portfolio. Calendar year-to-date price appreciation that helped the Fund occurred inOshkosh Corp. (+248%), Penske Automotive Group (+150%), Dine Equity (+114%), ChicagoBridge and Iron (+86) and Kayne Anderson Energy (+85%). Only two stocks in the portfoliodeclined since the start of the year, Allegheny Energy, a utility, declined 22%, andGilead Sciences, a biotech firm, lost 9%.

The U.S. economy appears to be recovering from the recession which began in December2007. Moreover, during the past two-plus years, there have been over 740 stimulativepolicy initiatives announced around the world which seems to be spawning an unprecedented,synchronized global recovery. Inflation is subdued, and interest rates, as set by theFederal Reserve Board, are extremely accommodative. Real estate and housing are stillhurting. The banking industry, so essential to business and commerce, is in tough shape.We believe more bank failures and take-overs can be expected due to a large number of badloans on their balance sheets. Consumer and business deleveraging will continue over thecoming months. We believe unemployment, which at September 30th came in at9.8%, will probably move higher, hindering consumer spending.

The dynamic and unexpected rally in stocks, which began on March 9th, hascarried the S and P 500 up 63% through November 12th. For perspective, fromOctober 9, 2008 to March 9, 2009, the Standard and Poor's went down 57%. Continuing ourstrategy of being fully invested has helped the Fund recover much of what was lost in2008. At this point, we feel company profits need to catch up with their stock prices.There also has been wide dispersion in how individual stocks have performed creatingopportunity in stock selection. We also feel growth and steady-earnings stocks are laggingcyclical stocks. This may benefit the Fund because we generally favor the former group ofcompanies.

Thank you for your continued interest in the Fund.

Sincerely,

Albert O. Nicholas

Portfolio Manager

 

 

** 
The Fund may invest in smaller companies, which involve additional risks such aslimited liquidity and greater volatility.

Please refer to the Schedule of Investments in the report for complete Fund holdingsinformation. Fund holdings and sector allocations are subject to change and should not beconsidered a recommendation to buy or sell any security.
**Diversification does not assure a profit or protect against loss in a declining market.

The Standard and Poor's 500 Index is a broad based unmanaged index of 500 stocks, whichis widely recognized as representative of the equity market in general. The Consumer PriceIndex represents changes in prices of all goods and services purchased for consumption byurban households. One cannot invest directly in an index.
**Must be preceded or accompanied by a prospectus.

The Nicholas Funds are distributed byQuasar Distributors, LLC. (11/09)

* 
 
Financial Highlights (NICSX)For a share outstanding throughout each period-------------------------------------------------------------------------------------------------------------                                         Six Months                                           Ended                        Years Ended March 31,                                         09/30/2009   -------------------------------------------------------                                         (unaudited)     2009       2008        2007        2006        2005                                         -----------    ------     ------      ------      ------      ------NET ASSET VALUE, BEGINNING OF PERIOD...     $27.71      $45.03     $57.85      $61.49      $60.05      $56.14    INCOME (LOSS) FROM     INVESTMENT OPERATIONS     Net investment income.............        .08         .18        .21         .80         .26         .10     Net gain (loss) on securities      (realized and unrealized)........      10.75      (12.72)     (2.85)        .71        6.75        4.29                                            ------      ------     ------      ------      ------      ------         Total from investment          operations...................      10.83      (12.54)     (2.64)       1.51        7.01        4.39                                            ------      ------     ------      ------      ------      ------    LESS DISTRIBUTIONS    From net investment income.........       (.07)       (.17)      (.23)       (.82)       (.25)       (.07)    From net capital gain..............         --       (4.61)     (9.95)      (4.33)      (5.32)       (.41)                                            ------      ------     ------      ------      ------      ------         Total distributions...........       (.07)      (4.78)    (10.18)      (5.15)      (5.57)       (.48)                                            ------      ------     ------      ------      ------      ------NET ASSET VALUE, END OF PERIOD.........     $38.47      $27.71     $45.03      $57.85      $61.49      $60.05                                            ------      ------     ------      ------      ------      ------                                            ------      ------     ------      ------      ------      ------TOTAL RETURN...........................     39.11%(1) (31.70)%    (6.47)%       2.55%      12.25%       7.81%SUPPLEMENTAL DATA:Net assets, end of period (millions)...   $1,384.8    $1,033.2   $1,690.7    $2,213.5    $2,504.9    $2,434.5Ratio of expenses to average net assets............................       .78%(2)     .77%       .75%        .75%        .77%        .75%Ratio of net investment income to average net assets.................       .45%(2)     .50%       .37%       1.30%        .41%        .17%Portfolio turnover rate................     25.69%(2)   31.79%     31.18%      29.96%      32.48%      20.94%(1) Not annualized.(2) Annualized.           The accompanying notes to financial statements are an integral part of these highlights.-------------------------------------------------------------------------------Top Ten Equity Portfolio HoldingsSeptember 30, 2009 (unaudited)-------------------------------------------------------------------------------                                                                  Percentage        Name                                                    of Net Assets        ----                                                    -------------        Oshkosh Corporation ....................................     4.65%        Affiliated Managers Group, Inc. ........................     4.23%        Kinder Morgan Management, LLC ..........................     3.93%        Walgreen Co. ...........................................     3.92%        DaVita, Inc. ...........................................     3.48%        O'Reilly Automotive, Inc. ..............................     3.11%        Thermo Fisher Scientific Inc. ..........................     2.86%        Alcon, Inc. ............................................     2.80%        YUM! Brands, Inc. ......................................     2.80%        W.W. Grainger, Inc. ....................................     2.74%                                                                    ------        Total of top ten .......................................    34.52%                                                                    ------                                                                    -------------------------------------------------------------------------------------Sector Diversification (As a Percentage of Portfolio)September 30, 2009 (unaudited)-------------------------------------------------------------------------------        BAR CHART PLOT POINTS        Health Care ...............................................    18.74%        Consumer Discretionary ....................................    17.31%        Industrials ...............................................    14.66%        Energy ....................................................    12.38%        Financials ................................................    10.84%        Materials .................................................     8.05%        Consumer Staples ..........................................     6.77%        Information Technology ....................................     5.68%        Short-Term Investments ....................................     3.56%        Utilities .................................................     2.01%-------------------------------------------------------------------------------Fund ExpensesFor the six month period ended September 30, 2009 (unaudited)-------------------------------------------------------------------------------As a shareholder of the Fund, you incur two types of costs: (1) transactioncosts and (2) ongoing costs, including management fees and other operatingexpenses.  The following table is intended to help you understand your ongoingcosts (in dollars) of investing in the Fund and to compare these costs withthose of other mutual funds.The example is based on an investment of $1,000 made at the beginning of theperiod and held for the entire period.The first line of the table below provides information about the actual accountvalues and actual expenses.  You may use the information in this line, togetherwith the amount you invested, to estimate the expenses that you paid over theperiod.  Simply divide your account value by $1,000 (for example, an $8,600account value divided by $1,000 = 8.6), then multiply the result by the numberin the first line under the heading entitled "Expenses Paid During Period" toestimate the expenses you paid on your account during this period.The second line of the table below provides information about hypotheticalaccount values and hypothetical expenses based on the Fund's actual expenseratio and an assumed rate of return of 5% per year before expenses, which isnot the Fund's actual return.  The hypothetical account values and expenses maynot be used to estimate the actual ending account balance or expenses you paidfor the period.  You may use this information to compare the ongoing costs ofinvesting in the Fund with other funds.  To do so, compare this 5% hypotheticalexample with the 5% hypothetical examples that appear in the shareholderreports of other funds.Please note that the expenses shown in the table are meant to highlight yourongoing costs only and do not reflect any transactional costs, such as wirefees.  Therefore, the second line of the table is useful in comparing ongoingcosts only, and will not help you determine the relative total costs of owningdifferent funds.  In addition, if these transactional costs were included, yourcosts would have been higher.                      Beginning          Ending             Expenses                       Account          Account            Paid During                        Value            Value               Period*                       03/31/09         09/30/09       04/01/09 - 09/30/09        ------------------------------------------------------------------        Actual        $1,000.00         $1,391.10              $4.68        Hypothetical   1,000.00          1,021.09               3.95        (5% return before expenses)        * Expenses are equal to the Fund's six-month annualized expense ratio        of 0.78%, multiplied by the average account value over the period,        multiplied by 183 then divided by 365 to reflect the one-half year        period.
 
Schedule of InvestmentsSeptember 30, 2009 (unaudited)------------------------------------------------------------------------------- Shares or Principal  Amount                                                              Value-----------                                                       -------------COMMON STOCKS - 96.43%             Consumer Discretionary - Auto &              Components - 1.06%   575,100   Johnson Controls, Inc.                              $   14,699,556                                                                 --------------             Consumer Discretionary - Durables &              Apparel - 2.53%   600,000   Fortune Brands, Inc.                                    25,788,000   500,000   Mattel, Inc.                                             9,230,000                                                                 --------------                                                                     35,018,000                                                                 --------------             Consumer Discretionary - Hotels,              Restaurants & Leisure - 2.80% 1,150,000   Yum! Brands, Inc.                                       38,824,000                                                                 --------------             Consumer Discretionary - Retail - 9.16%   450,000   Jos. A. Bank Clothiers, Inc. *                          20,146,500   650,000   Kohl's Corporation *                                    37,082,500   400,000   LKQ Corporation *                                        7,416,000 1,192,476   O'Reilly Automotive, Inc. *                             43,096,083   576,160   Penske Automotive Group, Inc.                           11,050,749 1,130,886   Sally Beauty Company, Inc. *                             8,040,599                                                                 --------------                                                                    126,832,431                                                                 --------------             Consumer Discretionary - Services - 1.76%   982,868   DineEquity, Inc. +                                      24,325,983                                                                 --------------             Consumer Staples - Food & Staple Retail - 3.92% 1,450,000   Walgreen Co.                                            54,331,500                                                                 --------------             Consumer Staples - Food, Beverage &              Tobacco - 2.85%   300,000   Altria Group, Inc.                                       5,343,000   700,000   Philip Morris International Inc.                        34,118,000                                                                 --------------                                                                     39,461,000                                                                 --------------             Energy - 12.38%   400,000   Apache Corporation                                      36,732,000   665,539   Bristow Group Inc. *                                    19,759,853   931,300   Inergy, L.P.                                            27,734,114   230,000   Kayne Anderson Energy Development Company                3,042,900   700,000   Kayne Anderson Energy Total Return Fund, Inc.           14,882,000   700,000   Kayne Anderson MLP Investment Company                   14,805,000 1,149,283   Kinder Morgan Management, LLC *                         54,418,527                                                                 --------------                                                                    171,374,394                                                                 --------------             Financials - Diversified - 6.51%   900,000   Affiliated Managers Group, Inc. *                       58,509,000   300,000   Duff & Phelps Corporation - Class A                      5,748,000 1,044,785   Leucadia National Corporation                           25,827,085                                                                 --------------                                                                     90,084,085                                                                 --------------             Financials - Insurance - 3.68%       200   Berkshire Hathaway Inc. - Class A *                     20,200,000   900,000   Loews Corporation                                       30,825,000                                                                 --------------                                                                     51,025,000                                                                 --------------             Financials - Real Estate - 0.65% 1,520,950   Cohen & Steers Quality Income Realty Fund, Inc.          8,943,186                                                                 --------------             Health Care - Equipment - 5.73%   280,000   Alcon, Inc.                                             38,827,600   507,500   Covidien plc                                            21,954,450   475,000   St. Jude Medical, Inc. *                                18,529,750                                                                 --------------                                                                     79,311,800                                                                 --------------             Health Care - Pharmaceuticals &              Biotechnology - 7.75%   278,000   Charles River Laboratories International, Inc.          10,280,440   600,000   Gilead Sciences, Inc. *                                 27,948,000   325,400   Mettler-Toledo International Inc. *                     29,477,986   905,688   Thermo Fisher Scientific Inc. *                         39,551,395                                                                 --------------                                                                    107,257,821                                                                 --------------             Health Care - Services - 5.26%   850,000   DaVita, Inc. *                                          48,144,000   920,000   VCA Antech, Inc. *                                      24,738,800                                                                 --------------                                                                     72,882,800                                                                 --------------             Industrials - Capital Goods - 11.59%   900,000   Chicago Bridge & Iron Company N.V.                      16,812,000   236,100   Curtiss-Wright Corporation                               8,058,093   400,000   Fastenal Company                                        15,480,000 2,083,300   Oshkosh Corporation *                                   64,436,469   425,000   W.W. Grainger, Inc.                                     37,978,000   733,695   Woodward Governor Company                               17,799,441                                                                 --------------                                                                    160,564,003                                                                 --------------             Industrials - Commercial Services &              Supplies - 3.06%   756,500   Copart, Inc. *                                          25,123,365   650,000   Republic Services, Inc.                                 17,270,500                                                                 --------------                                                                     42,393,865                                                                 --------------             Information Technology - Software &              Services - 5.68%   785,000   Fiserv, Inc. *                                          37,837,000   600,000   Hewitt Associates, Inc. *                               21,858,000   608,800   Solera Holdings, Inc.                                   18,939,768                                                                 --------------                                                                     78,634,768                                                                 --------------             Materials - 8.05%   450,000   Airgas, Inc.                                            21,766,500   350,000   AptarGroup, Inc.                                        13,076,000   700,000   Ball Corporation                                        34,440,000   300,000   Bemis Company, Inc.                                      7,773,000   300,000   RPM International, Inc.                                  5,547,000   481,200   Stepan Company                                          28,910,496                                                                 --------------                                                                    111,512,996                                                                 --------------             Utilities - 2.01% 1,050,000   Allegheny Energy, Inc.                                  27,846,000                                                                 --------------                 TOTAL COMMON STOCKS                  (cost $1,056,740,006)........................   1,335,323,188                                                                 --------------SHORT-TERM INVESTMENTS - 3.56%             Commercial Paper - 3.41%$3,125,000   Time Warner Cable, Inc. 10/01/09, 0.35%                  3,125,000 4,525,000   Prudential Financial, Inc. 10/02/09, 0.24%               4,524,970 1,400,000   Wisconsin Energy Corporation 10/02/09,  0.25%            1,399,990 3,475,000   Hitachi Capital America Corp. 10/05/09, 0.40%            3,474,846 1,725,000   Hitachi Capital America Corp. 10/06/09, 0.35%            1,724,916 1,650,000   Time Warner Cable, Inc. 10/06/09, 0.36%                  1,649,918 3,500,000   Prudential Financial, Inc. 10/07/09, 0.24%               3,499,860 3,225,000   Clorox Company (The) 10/08/09, 0.25%                     3,224,843 4,125,000   Hitachi Capital America Corp. 10/13/09, 0.40%            4,124,450 3,000,000   Kellogg Company 10/13/09, 0.20%                          2,999,800 4,150,000   Time Warner Cable, Inc. 10/13/09, 0.35%                  4,149,516 4,000,000   CVS Corporation 10/14/09, 0.33%                          3,999,523 3,675,000   Hitachi Capital America Corp. 10/16/09, 0.39%            3,674,403 3,500,000   Clorox Company (The) 10/21/09, 0.27%                     3,499,475 2,175,000   Wisconsin Energy Corporation 10/23/09, 0.20%             2,174,734                                                                 --------------                                                                     47,246,244                                                                 --------------             Variable Rate Security - 0.15% 1,989,370   American Family Financial Services, Inc.(1)              10/01/09, 0.10%                                         1,989,370                                                                 --------------                 TOTAL SHORT-TERM INVESTMENTS                  (cost $49,235,614) ..........................      49,235,614                                                                 --------------                  TOTAL INVESTMENTS                   (cost $1,105,975,620) -- 99.99% ............   1,384,558,802                                                                 --------------             OTHER ASSETS, NET OF LIABILITIES -- 0.01% ........         202,667                                                                 --------------                  TOTAL NET ASSETS                   (basis of percentages                   disclosed above) -- 100% ...................  $1,384,761,469                                                                 --------------                                                                 --------------+ This company is affiliated with the Fund as defined in Section 2(a)(3) of theInvestment Company Act of 1940, in that the Fund holds 5% or more of itsoutstanding voting securities. (Note 4)* Non-income producing security.(1) Subject to a demand feature as defined by the Securities and ExchangeCommission.The accompanying notes to financial statements are an integral part of this                                   schedule.Statement of Assets and LiabilitiesSeptember 30, 2009 (unaudited)-------------------------------------------------------------------------------ASSETS    Investments in securities at value -         Nonaffiliated issuers (cost $1,074,738,946) -          see accompanying Schedule of Investments ............ $1,360,232,819         Affiliated issuers (cost $31,236,674) -          see accompanying Schedule of Investments (Note 4) ...     24,325,983                                                                --------------              Total investments ...............................  1,384,558,802                                                                --------------    Receivables -         Investment securities sold ...........................        399,997         Dividend and interest ................................        910,525         Capital stock subscription ...........................         10,462                                                                --------------              Total receivables ...............................      1,320,984                                                                --------------    Other .....................................................         19,976                                                                --------------              Total assets ....................................  1,385,899,762                                                                --------------LIABILITIES    Payables -         Investment securities purchased ......................        118,600         Due to adviser -              Management fee ..................................        736,251              Accounting and administrative fee ...............         28,159                                                                --------------                                                                       764,410                                                                --------------         Other payables and accrued expense ...................        255,283                                                                --------------              Total liabilities ...............................      1,138,293                                                                --------------              Total net assets ................................ $1,384,761,469                                                                --------------                                                                --------------NET ASSETS CONSIST OF    Paid in capital ........................................... $1,104,813,746    Net unrealized appreciation on investments ................    278,583,182    Accumulated net realized loss on investments ..............       (341,299)    Accumulated undistributed net investment income ...........      1,705,840                                                                --------------              Total net assets ................................ $1,384,761,469                                                                --------------                                                                --------------NET ASSET VALUE PER SHARE ($.50 par value, 200,000,000 shares authorized), offering price and redemption price (35,995,078 shares outstanding) ..............................         $38.47                                                                        ------                                                                        ------The accompanying notes to financial statements are an integral part of this                                  statement.Statement of OperationsFor the six months ended September 30, 2009 (unaudited)-------------------------------------------------------------------------------INCOME    Dividend (net of foreign taxes of $153,074) -         Nonaffiliated issuers ................................   $  7,273,275         Affiliated issuers (Note 4) ..........................        256,696    Interest ..................................................        223,823                                                                  ------------         Total income .........................................      7,753,794                                                                  ------------EXPENSES    Management fee ............................................      4,099,025    Transfer agent fees .......................................        400,476    Accounting and administrative fees ........................        156,691    Postage and mailing .......................................         93,933    Insurance .................................................         42,815    Printing ..................................................         42,381    Custodian fees ............................................         31,683    Registration fees .........................................         16,604    Audit and tax fees ........................................         14,475    Directors' fees ...........................................          8,750    Accounting system and pricing service fees ................          5,857    Telephone .................................................          5,293    Legal fees ................................................          5,017    Other operating expenses ..................................          2,273                                                                  ------------         Total expenses .......................................      4,925,273                                                                  ------------         Net investment income ................................      2,828,521                                                                  ------------NET REALIZED GAIN ON INVESTMENTS    Nonaffiliated issuers .....................................     20,317,498    Affiliated issuers (Note 4) ...............................      3,081,458                                                                  ------------                                                                    23,398,956                                                                  ------------CHANGE IN NET UNREALIZED APPRECIATION/DEPRECIATION ON INVESTMENTS ...............................................    372,101,206                                                                  ------------    Net realized and unrealized gain on investments ...........    395,500,162                                                                  ------------    Net increase in net assets resulting from operations ......   $398,328,683                                                                  ------------                                                                  ------------The accompanying notes to financial statements are an integral part of this                                  statement.Statements of Changes in Net AssetsFor the six months ended September 30, 2009 (unaudited) and the year endedMarch 31, 2009-------------------------------------------------------------------------------                                            Six Months Ended      Year Ended                                               09/30/2009         03/31/2009                                            ----------------    ---------------INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS    Net investment income .................. $    2,828,521     $    6,938,252    Net realized gain (loss)     on investments ........................     23,398,956        (19,994,670)    Change in net unrealized     appreciation/depreciation     on investments ........................    372,101,206       (482,968,517)                                             --------------     --------------         Net increase (decrease) in          net assets resulting from          operations .......................    398,328,683       (496,024,935)                                             --------------     --------------DISTRIBUTIONS TO SHAREHOLDERS    From net investment income .............     (2,494,263)        (6,411,252)    From net realized gain on investments ..             --       (169,107,528)                                             --------------     --------------         Total distributions ...............     (2,494,263)      (175,518,780)                                             --------------     --------------CAPITAL SHARE TRANSACTIONS    Proceeds from shares issued     (380,029 and 831,405     shares, respectively) .................     12,995,971         26,930,813    Reinvestment of distributions     (67,871 and 3,725,864     shares, respectively) .................      2,304,887        162,611,111    Cost of shares redeemed     (1,731,862 and 4,820,212     shares, respectively) .................    (59,556,899)      (175,491,555)                                             --------------     --------------         Change in net assets          derived from capital share          transactions .....................    (44,256,041)        14,050,369                                             --------------     --------------         Total increase (decrease)          in net assets ....................    351,578,379       (657,493,346)                                             --------------     --------------NET ASSETS    Beginning of period ....................  1,033,183,090      1,690,676,436                                             --------------     --------------    End of period (including accumulated     undistributed net investment income     of $1,705,840 and $1,371,582,     respectively) ......................... $1,384,761,469     $1,033,183,090                                             --------------     --------------                                             --------------     --------------The accompanying notes to financial statements are an integral part of these                                  statements.Notes to Financial StatementsSeptember 30, 2009 (unaudited)------------------------------------------------------------------------------(1) Summary of Significant Accounting Policies --    Nicholas Fund, Inc. (the "Fund") is organized as a Maryland corporation and    is registered as an open-end, diversified management investment company    under the Investment Company Act of 1940, as amended.  The primary    objective of the Fund is long-term growth.  The following is a summary of    the significant accounting policies of the Fund:    (a)  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 if in the absence of any sale on         that day, the closing bid price.  For securities principally traded on         the NASDAQ market, the Fund uses the NASDAQ Official Closing Price.         Debt securities, excluding short-term investments, are valued at their         current evaluated bid price as determined by an independent pricing         service, which generates evaluations on the basis of dealer quotes for         normal institutional-sized trading units, issuer analysis, bond market         activity and various other factors.  Securities for which market         quotations may not be readily available are valued at their fair value         as determined in good faith by procedures adopted by the Board of         Directors.  Variable rate demand notes are valued at cost, which         approximates market value.  U.S. Treasury Bills and commercial paper         are stated at amortized cost, which approximates market value.  The         Fund did not maintain any positions in derivative instruments or         engage in hedging activities during the year.  Investment transactions         for financial statement purposes are recorded on trade date.         In accordance with Accounting Standards Codification ("ASC") 820-10,         "Fair Value Measurements" ("ASC 820-10"), fair value is defined as the         price that the Fund would receive upon selling an investment in a         timely transaction to an independent buyer in the principal or most         advantageous market of the investment.  ASC 820-10 established a         three-tier hierarchy to maximize the use of observable market data and         minimize the use of unobservable inputs and to establish         classification of fair value measurements for disclosure purposes.         Inputs refer broadly to the assumptions that market participants would         use in pricing the asset or liability, including assumptions about         risk, for example, the risk inherent in a particular valuation         technique used to measure fair value including such a pricing model         and/or the risk inherent in the inputs to the valuation technique.         Inputs may be observable or unobservable.  Observable inputs are         inputs that reflect the assumptions market participants would use in         pricing the asset or liability developed based on market data obtained         from sources independent of the reporting entity.  Unobservable inputs         are inputs that reflect the reporting entity's own assumptions about         the assumptions market participants would use in pricing the asset or         liability developed based on the best information available in the         circumstances.  The three-tier hierarchy of inputs is summarized in         the three broad levels listed below.              Level 1 - quoted prices in active markets for identical              investments              Level 2 - other significant observable inputs (including quoted              prices for similar investments, interest rates, prepayment              speeds, credit risk, etc.)              Level 3 - significant unobservable inputs (including the Fund's              own assumptions in determining the fair value of investments)         The inputs or methodology used for valuing securities are not         necessarily an indication of the risk associated with investing in         those securities.         In April 2009, Financial Accounting Standards Board ("FASB") issued         ASC 820-10-65-4, "Determining Fair Value When the Volume and Level of         Activity for the Asset or Liability Have Significantly Decreased and         Identifying Transactions That Are Not Orderly" ("ASC 820-10-65-4"),         effective for interim and annual periods ending after June 15, 2009.         ASC 820-10-65-4 expands existing fair value measurement disclosure to         include a breakout of the current ASC 820 chart to add category and/or         security types.         The following is a summary of the inputs used as of September 30, 2009         in valuing the Fund's investments carried at value:                                                       Investments                                                           in              Valuation Inputs                         Securities              -----------------------------------------------------              Level 1 -                Common Stocks(1) ................... $1,335,323,188              Level 2 -              Commercial Paper .....................     47,246,244                Variable Rate Security .............      1,989,370              Level 3 -                None ...............................             --                                                     --------------                                       Total ....... $1,384,558,802                                                     --------------                                                     --------------              (1) See Schedule of Investments for further detail by industry.         In May 2009, FASB issued ASC 855-10, "Subsequent Events" ("ASC         855-10").  The Fund adopted ASC 855-10 which requires an entity to         recognize in the financial statements the effects of all subsequent         events that provide additional evidence about conditions that existed         at the date of the balance sheet.  For non-recognized subsequent         events that must be disclosed to keep the financial statements from         being misleading, an entity will be required to disclose the nature of         the event as well as an estimate of its financial effect, or a         statement that such an estimate cannot be made. In addition, ASC         855-10 requires an entity to disclose the date through which         subsequent events have been evaluated.  The Fund has evaluated         subsequent events through November 24, 2009, the date that the         financial statements were available to be issued and determined there         were no subsequent events that required disclosure.         In June 2009, ASC 105-10, "Generally Accepted Accounting Principles"         ("ASC 105-10") was issued  and is effective for interim and fiscal         periods ending after September 15, 2009.  ASC 105-10 is intended to         establish the FASB Codification as the source of authoritative         accounting principles recognized by the FASB to be applied to         nongovernmental entities in preparation of financial statements in         conformity with GAAP.    (b)  Net realized gain (loss) on portfolio securities was computed on the         basis of specific identification.    (c)  Dividend income is recorded on the ex-dividend date, and interest         income is recognized on an accrual basis.  Non-cash dividends, if any,         are recorded at value on date of distribution.  Generally, discounts         and premiums on long-term debt security purchases, if any, are         amortized over the expected lives of the respective securities using         the effective yield method.    (d)  Provision has not been made for federal income taxes or excise taxes         since the Fund has elected to be taxed as a "regulated investment         company" and intends to distribute substantially all net investment         income and net realized capital gains on sales of investments to its         shareholders and otherwise comply with the provisions of Subchapter M         of the Internal Revenue Code applicable to regulated investment         companies.    (e)  Dividends and distributions paid to shareholders are recorded on the         ex-dividend date.  Distributions from net investment income are         generally declared and paid semiannually.  Distributions of net         realized capital gain, if any, are declared and paid at least annually.         The amount of distributions from net investment income and net         realized capital gain are determined in accordance with federal income         tax regulations, which may differ from U.S. generally accepted         accounting principles.  Distributions are determined in accordance         with income tax regulations, which may differ from net investment         income and realized gains for financial reporting purposes.  Financial         reporting records are adjusted for permanent book to tax differences         to reflect tax character.  At September 30, 2009, no reclassifications         were recorded.           The tax character of distributions paid during the six months ended         September 30, 2009 and the year ended March 31, 2009 was as follows:                                            09/30/2009        03/31/2009                                           ------------      ------------              Distributions paid from:              Ordinary income ............  $2,494,263       $ 23,682,169              Long-term capital gain .....          --        151,836,611                                            ----------       ------------              Total distributions paid ...  $2,494,263       $175,518,780                                            ----------       ------------                                            ----------       ------------         As of September 30, 2009 investment cost for federal tax purposes was         $1,104,435,208 and the tax basis components of net assets were as         follows:              Unrealized appreciation ....................... $378,503,034              Unrealized depreciation .......................  (98,379,440)                                                              ------------              Net unrealized appreciation ................... $280,123,594                                                              ------------                                                              ------------         The differences between book-basis and tax-basis unrealized         appreciation (depreciation) is attributable primarily to holdings in         partnership interests and return of capital from investments.         As of the fiscal year ended March 31, 2009, the Fund realized no         post-October losses for tax purposes.         As of September 30, 2009, the Fund had no tax deferral of wash loss         sales.         As of March 31, 2009, the Fund had a capital loss carryforward of         approximately $11,097,000, which expires in 2017.  To the extent the         Fund has future net realized capital gains, distributions of capital         gains to shareholders will be offset by any unused capital loss         carryforward.         Effective March 31, 2008, the Fund adopted ASC 740-10, "Accounting for         Uncertainty in Income Taxes" which addresses the accounting for         uncertainty in income taxes and establishes for all entities, such as         the Fund, a minimum threshold for financial statement recognition of         the benefit of positions taken in filing tax returns (including         whether an entity is taxable in a particular jurisdiction).  The Fund         recognizes tax benefits only if it is more likely than not that a tax         position (including the Fund's assertion that its income is exempt         from tax) will be sustained upon examination.  If applicable, the Fund         recognizes interest accrued related to unrecognized tax benefits in         "interest" and penalties in "other operating expenses" on the         Statement of Operations. The Fund had no material uncertain tax         positions and has not recorded a liability for unrecognized tax         benefits as of September 30, 2009.  Also, the Fund recognized no         interest and penalties related to uncertain tax benefits in fiscal         2010.  At September 30, 2009, the fiscal years 2006 through 2009         remain open to examination in the Fund's major tax jurisdictions.    (f)  The preparation of financial statements in conformity with U.S.         generally accepted accounting principles requires management to make         estimates and assumptions that affect the amounts reported in the         financial statements and accompanying notes.  Actual results could         differ from estimates.(2) Related Parties--    (a)  Investment Adviser and Management Agreement --         The Fund has an agreement with Nicholas Company, Inc. (with whom         certain officers and directors of the Fund are affiliated) (the         "Adviser") to serve as investment adviser and manager.  Under the         terms of the agreement, a monthly fee is paid to the Adviser based on         an annualized fee of .75% of the average net asset value up to and         including $50 million and .65% of the average net asset value in         excess of $50 million.  Also, the Adviser may be paid for accounting         and administrative services rendered by its personnel, 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.    (b)  Legal Counsel --         A director of the Adviser is affiliated with a law firm that provides         services to the Fund.  The Fund incurred expenses of $2,767 for the         period ended September 30, 2009 for legal services rendered by this         law firm.(3) Investment Transactions --    For the period ended September 30, 2009, the cost of purchases and the    proceeds from sales of investment securities, other than short-term    obligations, aggregated $150,862,955 and $159,061,084, respectively.(4) Transactions with Affiliates -    Following is a summary of fiscal 2010 transactions with "affiliated    companies" as defined by the Investment Company Act of 1940:                                                                                           Amount of                                                                                            Capital                                                                             Amount of    Gain/(Loss)                                                                             Dividends      Realized                                             Share Activity                  Credited       on Sale                              --------------------------------------------   to Income     of Shares                               Balance                           Balance     in Fiscal     in Fiscal    Security Name              03/31/09   Purchases    Sales     09/30/09       2010          2010    -------------             ----------  ---------  ---------  ----------  -----------   -----------    DineEquity, Inc.            832,868    150,000         --    982,868      $     --    $       --    Stepan Company (a)          653,400         --    172,200    481,200       256,696     3,081,458                                                                              --------    ----------                                                                              $256,696    $3,081,458                                                                              --------    ----------     (a) As of September 30, 2009, under the rules of the Investment Company Act, the investment no longer        meets the definition of an affiliate.(5) Change of Independent Registered Public Accounting Firm --    On October 8, 2008, management of the Fund, informed Ernst & Young LLP of    its dismissal as the independent registered public accounting firm for the    Fund. The Board of Directors of the Fund approved the dismissal of Ernst &    Young LLP and the appointment of Deloitte & Touche LLP as the Fund's    independent registered public accounting firm on August 1, 2008.     The reports of Ernst & Young LLP on the Fund's financial statements    presented in this report for the two fiscal years prior to the fiscal year    ended March 31, 2009, contained no adverse opinion or disclaimer of opinion    and were not qualified or modified as to uncertainty, audit scope or    accounting principles.  During the Fund's two fiscal years prior to the    year ended March 31, 2009 and through the interim period ended October 8,    2008, there were no disagreements with Ernst & Young LLP on any matter of    accounting principles or practices, financial statement disclosure or    auditing scope or procedure, which disagreements, if not resolved to the    satisfaction of Ernst & Young LLP, would have caused it to make reference    to the subject matter of the disagreements in connection with its reports    on the Fund's financial statements.    Additionally, during the two fiscal years ended prior to March 31, 2009 and    during the interim period through October 8, 2008, the Fund did not consult    with Deloitte & Touche LLP on items which concerned the application of    accounting principles to a specified transaction, either completed or    proposed, or the type of audit opinion that might be rendered on the Fund's    financial statements or concerned the subject of a disagreement (as defined    in paragraph (a) (1) (iv) of Item 304 of Regulation S-K) or reportable    events (as described in paragraph (a) (1) (v) of Item 304 of Regulation    S-K).
 
Historical Record(unaudited)--------------------------------------------------------------------------------------------------                                     Net Investment                     Dollar        Growth of                            Net          Income      Capital Gain      Weighted      an Initial                        Asset Value   Distributions  Distributions  Price/Earnings     $10,000                         Per Share      Per Share      Per Share       Ratio (2)    Investment (3)                        -----------  --------------  -------------  --------------  --------------July 14, 1969 (1) ......  $ 6.59        $  --          $   --             --           $ 10,000March 31, 1985 .........   29.24         0.6420          1.5760          13.2 times      69,858March 31, 1986 .........   35.26         0.5750          0.6100          15.8            87,699March 31, 1987 .........   39.94         0.8820          0.1870          16.3           102,387March 31, 1988 .........   32.15         1.8400          4.0340          14.1            98,557March 31, 1989 .........   35.27         1.0250          0.4510          13.2           113,155March 31, 1990 .........   37.72         0.9240          1.0540          14.9           127,360March 31, 1991 .........   42.99         0.7900          0.2250          16.9           149,180March 31, 1992 .........   49.68         0.6790          0.8240          19.4           178,011March 31, 1993 .........   52.91         0.6790          2.0420          18.5           200,098March 31, 1994 .........   51.10         0.8175          1.0470          16.7           200,182March 31, 1995 .........   52.22         0.7070          3.3170          17.2           221,970March 31, 1996 .........   63.81         0.5650          4.0945          21.0           293,836March 31, 1997 .........   67.11         0.4179          5.3166          21.7           336,973March 31, 1998 .........   93.98         0.3616          5.8002          30.0           508,762March 31, 1999 .........   85.20         0.5880          8.2716          31.7           509,446March 31, 2000 .........   84.56         0.3114          5.9433          37.3           543,813March 31, 2001 .........   54.11         0.1900         19.2500          26.6           452,780March 31, 2002 .........   53.74         0.2360            --            23.8           451,627March 31, 2003 .........   40.37         0.1585            --            16.4           340,547March 31, 2004 .........   56.14         0.0905            --            19.4           474,406March 31, 2005 .........   60.05         0.0678          0.4100          19.4           511,476March 31, 2006 .........   61.49         0.2512          5.3194          18.4           574,151March 31, 2007 .........   57.85         0.8173          4.3310          16.6           588,783March 31, 2008 .........   45.03         0.2283          9.9501          17.4           550,664March 31, 2009 .........   27.71         0.1714          4.6096          12.1           376,093September 30, 2009 .....   38.47         0 0681(a)         --            16.1           523,180(1) Date of Initial Public Offering.(2) Based on latest 12 months accomplished earnings.(3) Assuming reinvestment of all distributions.(a) Paid on June 8, 2009 to shareholders of record on June 5, 2009.
 
Approval of Investment Advisory Contract(unaudited)-------------------------------------------------------------------------------In April 2009, the Board of Directors of the Fund renewed the one-year term ofthe Investment Advisory Agreement by and between the Fund and the Adviserthrough April 2010.  In connection with the renewal of the Investment AdvisoryAgreement, no changes to the amount or manner of calculation of the managementfee or the terms of the agreement were proposed by the Adviser or adopted bythe Board.  For the fiscal year ended March 31, 2009, the management fee was0.65% and the Fund's total expense ratio (including the management fee) was0.77%.  In renewing the Investment Advisory Agreement, the Board carefullyconsidered the following factors on an absolute basis and relative to theFund's peer group: (i) the Fund's expense ratio, which was low compared to theoverall peer group; (ii) the Fund's performance on a short-term and long-termbasis; (iii) the Fund's management fee; (iv) the range and quality of theservices offered by the Adviser.  The peer group fund data included mid- andlarge-cap blend and growth focused funds with similar asset sizes.  In terms ofthe peer group data used for performance comparisons, the Fund was ranked 2nd,9th, 14th and 18th out of 19 funds for the one-, three-, five- and ten-yearperiods ending March 31, 2009.  The Fund had the sixth lowest expense ratioamong its peer group.  The Board also reviewed the Fund's risk/return profileas measured by standard deviation.  The Board considered the range of services to be provided by the Adviser to theFund under the Advisory Agreement. The Board discussed the nature, extent, andquality of the services to be provided by the Adviser and concluded that theservices provided were consistent with the terms of the advisory agreement andthe needs of the Fund, and that the services provided were of a high quality.The Board considered the investment performance of the Fund and the Adviser.Among other things, the Board noted its consideration of the Fund's performancerelative to peer funds. The Board reviewed the actual relative short-term andlong-term performance of the Fund.  The Board agreed that the Fund demonstratedsatisfactory performance with respect to comparable funds.  The Board alsodiscussed the extent to which economies of scale would be realized, and whethersuch economies were reflected in the Fund's fee levels and concluded that theAdviser had been instrumental in holding down Fund costs, citing consistentlylow fees in an environment where fund fees have been on an upward trend.The Board considered the cost of services provided by the Adviser.  The Boardalso considered the profits realized by the Adviser in connection with themanagement and distribution of the Fund, as expressed by the Adviser'smanagement in general terms.  The Board expressed the opinion that given theBoard's focus on performance and maintaining a low fee structure that theAdviser's profits were not relevant.  The Board determined that the Adviser had fully and adequately carried out theterms and conditions of its contract with the Fund. The Board expressedsatisfaction with the Fund's performance, management's control of expenses andthe rate of the management fee for the Fund and the overall level of servicesprovided to the Fund by the Adviser.Information on Proxy Voting(unaudited)-------------------------------------------------------------------------------A description of the policies and procedures that the Fund uses to determinehow to vote proxies relating to portfolio securities is available, withoutcharge, upon request by calling 800-544-6547 (toll-free) or 414-276-0535.  Italso appears in the Fund's Statement of Additional Information, which can befound on the SEC's website, www.sec.gov.  A record of how the Fund voted itsproxies for the most recent twelve-month period ended June 30, also isavailable on the Fund's website, www.nicholasfunds.com, and the SEC's website,www.sec.gov.Quarterly Portfolio Schedule(unaudited)------------------------------------------------------------------------------The Fund files its complete schedule of investments with the SEC for the firstand third quarters of each fiscal year on Form N-Q.  The Fund's Form N-Q's areavailable on the SEC's website at www.sec.gov and may be reviewed and copied atthe SEC's Public Reference Room in Washington, D.C.  Information on theoperation of the Public Reference Room may be obtained by calling 800-SEC-0330.Privacy Policy(unaudited)-------------------------------------------------------------------------------      Nicholas Fund, Inc. respects each shareholder's right to privacy.  We arecommitted to safeguarding the information that you provide us to maintain andexecute transactions on your behalf.      We collect the following non-public personal information about you:      * Information we receive from you on applications or other forms, whetherwe receive the form in writing or electronically.  This includes, but is notlimited to, your name, address, phone number, tax identification number, dateof birth, beneficiary information and investment selection.      * Information about your transactions with us and account history withus.  This includes, but is not limited to, your account number, balances andcost basis information.  This also includes transaction requests made throughour transfer agent.      * Other general information that we may obtain about you such asdemographic information.              WE DO NOT SELL ANY NON-PUBLIC PERSONAL INFORMATION                     ABOUT CURRENT OR FORMER SHAREHOLDERS.                                                         INFORMATION SHARED WITH OUR TRANSFER AGENT,                   A THIRD PARTY COMPANY, ALSO IS NOT SOLD.      We may share, only as permitted by law, non-public personal informationabout you with third party companies. Listed below are some examples of thirdparties to whom we may disclose non-public personal information.  While theseexamples do not cover every circumstance permitted by law, we hope they helpyou understand how your information may be shared.      We may share non-public personal information about you:      * With companies who work for us to service your accounts or to processtransactions that you may request.  This would include, but is not limited to,our transfer agent to process your transactions, mailing houses to send yourequired reports and correspondence regarding the Fund and its Adviser, theNicholas Company, Inc., and our dividend disbursing agent to process funddividend checks.      * With a party representing you, with your consent, such as your brokeror lawyer.      * When required by law, such as in response to a subpoena or other legalprocess.      The Fund and its Adviser maintain policies and procedures to safeguardyour non-public personal information.  Access is restricted to employees whothe Adviser determines need the information in order to perform their jobduties.  To guard your non-public personal information we maintain physical,electronic, and procedural safeguards that comply with federal standards.      In the event that you hold shares of the Fund with a financialintermediary, including, but not limited to, a broker-dealer, bank, or trustcompany, the privacy policy of your financial intermediary would govern howyour non-public personal information would be shared with non-affiliated thirdparties.AUTOMATIC INVESTMENT PLAN - AN UPDATE(unaudited)-------------------------------------------------------------------------------The Nicholas Family of Funds' Automatic Investment Plan provides a simplemethod to dollar cost average into the fund(s) of your choice.Dollar cost averaging involves making equal systematic investments over anextended time period.  A fixed dollar investment will purchase more shares whenthe market is low and fewer shares when the market is high.  The automaticinvestment plan is an excellent way for you to become a disciplined investor.The following table illustrates what dollar cost averaging can achieve.  Pleasenote that past performance is no guarantee of future results.  Nicholas Companyrecommends dollar cost averaging as a practical investment method.  It shouldbe consistently applied for long periods so that investments are made throughseveral market cycles.                                                               Nicholas Fund                                                         ----------------------      $1,000 initial investment on ..................... 07/14/1969* 09/30/1999      Number of years investing $100 each month       following the date of initial investment ........      40.2          10      Total cash invested ..............................   $48,300     $13,000      Total dividend and capital gain distributions       reinvested ......................................  $982,590      $6,273      Total full shares owned at 09/30/2009 ............    20,687         366      Total market value at 09/30/2009 .................  $795,858     $14,112The results above assume purchase on the last day of the month.  The NicholasAutomatic Investment Plan actually invests on the 20th of each month (or on thealternate date specified by the investor).  Total market value includesreinvestment of all distributions.*Date of Initial Public Offering.
 
Nicholas Funds Services Offered(unaudited)-------------------------------------------------------------------------------*     IRAs      * Traditional      * SIMPLE      * Roth             * SEP*     Coverdell Education Accounts*     Profit Sharing Plan*     Automatic Investment Plan*     Direct Deposit of Dividend and Capital Gain Distributions*     Systematic Withdrawal Plan with Direct Deposit*     Monthly Automatic Exchange between Funds*     Telephone Redemption*     Telephone Exchange*     24-hour Automated Account Information (800-544-6547)*     24-hour Internet Account Access (www.nicholasfunds.com)Please call a shareholder representative for further information on the aboveservices or with any other questions you may have regarding the Nicholas Funds(800-544-6547).
 
                            Directors and Officers                                                         ALBERT O. NICHOLAS, President and Director                                                                  ROBERT H. BOCK, Director                                                                 JAY H. ROBERTSON, Director                                                         DAVID L. JOHNSON, Executive Vice President                                                          DAVID O. NICHOLAS, Senior Vice President                                                           LYNN S. NICHOLAS, Senior Vice President                                                      JEFFREY T. MAY, Senior Vice President, Secretary,                    Treasurer and Chief Compliance Officer                                                         LAWRENCE J. PAVELEC, Senior Vice President                                                              CANDACE L. LESAK, Vice President                                                                     Investment Adviser                            NICHOLAS COMPANY, INC.                             Milwaukee, Wisconsin                             www.nicholasfunds.com                         414-276-0535 or 800-544-6547                                                                       Transfer Agent                        U.S. BANCORP FUND SERVICES, LLC                             Milwaukee, Wisconsin                         414-276-0535 or 800-544-6547                                                                         Distributor                           QUASAR DISTRIBUTORS, LLC                             Milwaukee, Wisconsin                                                                          Custodian                                U.S. BANK N.A.                             Milwaukee, Wisconsin                                                        Independent Registered Public Accounting Firm                             DELOITTE & TOUCHE LLP                             Milwaukee, Wisconsin                                                                           Counsel                         MICHAEL BEST & FRIEDRICH LLP                             Milwaukee, WisconsinThis report is submitted for the information of shareholders of the Fund.  Itis not authorized for distribution to prospective investors unless preceded oraccompanied by an effective prospectus.
**Item 2. Code of Ethics.**

Applicable only to annual reports.

 

**Item 3. Audit Committee Financial Expert.**

Applicable only to annual reports.

 

**Item 4. Principal Accountant Fees andServices.**

Applicable only to annual reports. 

 

**Item 5. Audit Committee of ListedRegistrants.**

Not applicable to this filing.

 

**Item 6. Schedule of Investments.**

The schedule of investments in securities ofunaffiliated issuers is included as part of the report to shareholders filed under Item 1.

 

**Item 7. Disclosure of Proxy Voting Policiesand Procedures for Closed-End Management Investment Companies.**

Applicable only to annual reports filed byclosed-end funds. 

 

**Item 8. Portfolio Managers of Closed-EndManagement Investment Companies.**

Applicable only to annual reports filed byclosed-end funds. 

 

**Item 9. Purchases of Equity Securities byClosed-End Management Investment Companies and Affiliated Purchasers.**

Applicable only to closed-end funds. 

 

**Item 10.  Submission of Matters to aVote of Security Holders.**

Not applicable to this filing.

 

**Item 11. Controls and Procedures.**

The Fund's principal executive officer andprincipal financial officer have concluded that the Fund's disclosure controls andprocedures are sufficient to ensure that information required to be disclosed by the Fundin this Form N-CSR was recorded, processed, summarized and reported within the timeperiods specified in the Securities and Exchange Commission's rules and forms, based uponsuch officers' evaluation of these controls and procedures as of a date within 90 days ofthe filing date of the report. There were no significant changes or corrective actionswith regard to significant deficiencies or material weaknesses in the Fund's internalcontrols or in other factors that could significantly affect the Fund's internal controlssubsequent to the date of their evaluation. 

 

**Item 12. Exhibits.**

(a)(1) Code of Ethics -- Any code of ethics, oramendments thereto, that is the subject of the disclosure required by Item 2, to theextent that the registrant intends to satisfy the Item 2 requirements through filing of anexhibit.Not applicable to this filing.

 

(a)(2) Certifications of Principal ExecutiveOfficer and Principal Financial Officer pursuant to Section 302 of the Sarbannes-Oxley Actof 2002, attached hereto as part of EX-99.CERT.

 

(a)(3)  Any written solicitation topurchase securities under Rule 23c-1 under the Act sent or given during the period coveredby the report by or on behalf of the registrant to 10 or more person. 

 

Applicable only to closed-end funds. 

 

(b) Certifications of Principal ExecutiveOfficer and Principal Financial Officer pursuant to Section 906 of the Sarbannes-Oxley Actof 2002, attached hereto as part of EX-99.906CERT.

 

**SIGNATURES**

 

Pursuant to the requirements ofthe Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registranthas duly caused this report to be signed on its behalf by the undersigned, thereunto dulyauthorized.

 

(Registrant) Nicholas Fund, Inc.

 

By: /s/ Albert O. Nicholas

Name: Albert O. Nicholas 

Title: Principal Executive Officer 

 

Date: November 30, 2009

 

Pursuant to the requirements ofthe Securities Exchange Act of 1934 and the Investment Company Act of 1940, this reporthas been signed by the following persons on behalf of the registrant and in the capacitiesand on the dates indicated. 

 

By: /s/ Albert O. Nicholas

Name: Albert O. Nicholas

Title: Principal Executive Officer 

Date: November 30, 2009

 

By: /s/ Jeffrey T. May

Name: Jeffrey T. May

Title: Principal Financial Officer 

Date: November 30, 2009********