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: 03/31/2009

 

Date of reporting period: 03/31/2009

 

**Item 1. Report to Stockholders.**

 

 

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                                   ANNUAL REPORT
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                                   March 31, 2009
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                                NICHOLAS FUND, INC.
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                               700 North Water Street
                             Milwaukee, Wisconsin 53202
                               www.nicholasfunds.com
```

 
May 2009

Report to Fellow Shareholders:

For the first three months of calendar year 2009, Nicholas Fund returned -9.00% versus-11.01% for the Standard and Poor's 500 Index. For the fiscal year ended March 31, 2009,the Fund produced a -31.70% total return compared to -38.09% for the S and P 500. Relativeperformance has improved in recent months.

At March 31, 2009, Nicholas Fund was fully invested with 8.08% cash. The diversifiedportfolio consisted of 59 equities. Management is tending to favor smaller companiesrather than larger ones in our stock selection. The top ten holdings and sectordiversification are included within this report. For the fiscal year ended March 31, 2009,only a few stocks had positive returns such as O'Reilly Automotive. On the negative side,financials, including Affiliated Managers Group, Berkshire Hathaway and Marshall andIlsley, were major detractors to performance. 

Returns for Nicholas Fund, Inc. and selected indices are provided in the chart belowfor the period ended March 31, 2009.

 
 
Average Annual    Total Return 
1 Year
3 Year
5 Year
10 Year
15 Year
Life*Nicholas Fund, Inc. 
-31.70%
-13.15%
-4.54%
-2.99%
4.29%
9.56%Standard and Poor's 500 Index 
-38.09%
-13.06%
-4.76%
-3.00%
5.91%
8.85%Consumer Price Index 
-0.45%
2.11%
2.60%
2.59%
2.49%
4.53%Ending value of $10,000 invested in    Nicholas Fund, Inc. 
$6,830
$6,550
$7,928
$7,382
$18,788
$376,093Fund's Expense Ratio (from 07/31/08    Prospectus): 0.75%** The life of the Fund is 39.7 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 March 31, 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.
The U.S. economy shrank sharply in the first quarter of 2009, capping its worstsix-month performance in 51 years as noted in the April 30, 2009 *Wall Street Journal*.This recession marks the first time since 1975 that the economy has contracted for threequarters in a row. Unemployment has reached 8.9%. The Government and the Federal ReserveBoard have responded with huge stimulus actions, including cutting short-term interestrates to near zero. Green shoots are appearing that indicate the economy could revive bythe fourth quarter. These green shoots include a decline in business inventories (the needto rebuild) and an up-tick in consumer spending. Also, many economic measures are eitherdeclining at a slower rate or stabilizing. The worst of our economic and businessnightmare appears to be over.

The stock market has been no fun over the last year and a half. It anticipated theworldwide economic and financial tsunami we are experiencing. As measured by the S and P500, the market declined 57% from the high in October 2007, to the recent low on March 9,2009. This represents the worst bear market since the Great Depression. From the low onMarch 9th, stocks have rallied 37% as of May 8th, but still remain 41% below the October2007 high. We have positioned the Fund portfolio, which is fully invested, as we seek toregain lost capital. Stocks generally anticipate economic recovery six-to-nine monthsbefore it actually happens.

As I close in on 40 years of managing the Nicholas Fund, I am as enthused andoptimistic as ever regarding long-term capital gain possibilities. After the miserableperformance of stocks over the last ten years, the next ten appear to offer betterprospects. 

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.

The S and P 500 Index is a broad based unmanaged index of 500 stocks, which is widelyrecognized as representative of the equity market in general. The Consumer Price Indexrepresents changes in prices of all goods and services purchased for consumption by urbanhouseholds. One cannot invest directly in an index.
**Must be preceded or accompanied by a prospectus.

The Nicholas Funds are distributed by Quasar Distributors, LLC. (05/09)

** 
COMPARISON OF CHANGE IN VALUE OF$10,000 INVESTMENT IN

NICHOLAS FUND, INC. AND S and P500 INDEX
 

The line graph which follows compares the initial account value and subsequent accountvalue at the end of each of the most recently completed ten fiscal years of the Fund, tothe same investment over the same periods in the S and P 500 Index. The graph assumes a$10,000 investment in the Fund and the index at the beginning of the period.
 

 

Nicholas Fund, Inc.
% Total Return
S and P 500 Index
% Total Return03/31/99
$10,000.00
$10,000.0003/31/00
10,675.00
6.75%
11,794.12
17.94%03/31/01
8,888.01
-16.74%
9,237.57
-21.68%03/31/02
8,865.78
-0.25%
9,259.74
0.24%03/31/03
6,684.80
-24.60%
6,967.03
-24.76%03/31/04
9,312.60
39.31%
9,412.73
35.10%03/31/05
10,040.26
7.81%
10,042.82
6.69%03/31/06
11,270.68
12.25%
11,219.85
11.72%03/31/07
11,557.84
2.55%
12,547.61
11.83%03/31/08
10,809.56
-6.47%
11,910.49
-5.08%03/31/09
7,382.41
-31.70%
7,373.79
-38.09%
The Fund's average annual total returns for the one-, five- and ten-year periods endedon the last day of the most recent fiscal year are as follows:
**One Year Ended    March 31, 2009**Five Years Ended March    31, 2009**Ten Years Ended March    31, 2009Average Annual Total Return 
-31.70%
-4.54%
-2.99%
* 
Past performance is not predictive of future performance, and the abovegraph and table do not reflect deduction of taxes that a shareholder would pay on Funddistributions or the redemption of Fund shares. 

 
Financial Highlights (NICSX)For a share outstanding throughout each period-------------------------------------------------------------------------                                         Year Ended March 31,                               ------------------------------------------                                2009     2008     2007     2006     2005                               ------   ------   ------   ------   ------NET ASSET VALUE, BEGINNING OF PERIOD .......   $45.03   $57.85   $61.49   $60.05   $56.14  INCOME (LOSS) FROM  INVESTMENT OPERATIONS   Net investment income ...      .18      .21      .80      .26      .10   Net gain (loss) on    securities (realized     and unrealized) .......   (12.72)   (2.85)     .71     6.75     4.29                               ------   ------   ------   ------   ------      Total from investment       operations ..........   (12.54)   (2.64)    1.51     7.01     4.39                               ------   ------   ------   ------   ------   LESS DISTRIBUTIONS   From net investment    income .................     (.17)    (.23)    (.82)    (.25)    (.07)   From net capital gain ...    (4.61)   (9.95)   (4.33)   (5.32)    (.41)                               ------   ------   ------   ------   ------      Total distributions ..    (4.78)  (10.18)   (5.15)   (5.57)    (.48)                               ------   ------   ------   ------   ------NET ASSET VALUE, END OF PERIOD .................   $27.71   $45.03   $57.85   $61.49   $60.05                               ------   ------   ------   ------   ------                               ------   ------   ------   ------   ------TOTAL RETURN ............... (31.70)%  (6.47)%    2.55%   12.25%    7.81%SUPPLEMENTAL DATA:Net assets, end of period (millions) ......... $1,033.2 $1,690.7 $2,213.5 $2,504.9 $2,434.5Ratio of expenses to average net assets ........     .77%     .75%     .75%     .77%     .75%Ratio of net investment income to average net assets ................     .50%     .37%    1.30%     .41%     .17%Portfolio turnover rate ....   31.79%   31.18%   29.96%   32.48%   20.94%The accompanying notes to financial statements are an integral part of these                                    highlights.-------------------------------------------------------------------------------Top Ten Equity Portfolio HoldingsMarch 31, 2009 (unaudited)-------------------------------------------------------------------------------                                                                  Percentage        Name                                                    of Net Assets        ----                                                    -------------        Berkshire Hathaway Inc. - Class A ......................     5.37%        Kinder Morgan Management, LLC ..........................     4.33%        O'Reilly Automotive, Inc. ..............................     4.04%        Affiliated Managers Group, Inc. ........................     4.04%        Yum! Brands, Inc. ......................................     3.72%        Walgreen Co. ...........................................     3.64%        DaVita, Inc. ...........................................     3.62%        Thermo Fisher Scientific Inc. ..........................     3.13%        W.W. Grainger, Inc. ....................................     2.89%        Fiserv, Inc. ...........................................     2.77%                                                                    ------        Total of top ten .......................................    37.55%                                                                    ------                                                                    -------------------------------------------------------------------------------------Sector Diversification (As a Percentage of Portfolio)March 31, 2009 (unaudited)-------------------------------------------------------------------------------        BAR CHART PLOT POINTS        Health Care ...............................................    17.68%        Consumer Discretionary ....................................    15.78%        Financials ................................................    13.63%        Energy ....................................................    12.01%        Industrials ...............................................    10.21%        Consumer Staples ..........................................     8.62%        Short-Term Investments ....................................     8.26%        Materials .................................................     6.48%        Information Technology ....................................     6.43%        Utilities .................................................     0.90%-------------------------------------------------------------------------------Fund ExpensesFor the six month period ended March 31, 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 actualaccount values and actual expenses.  You may use the information in this line,together with the amount you invested, to estimate the expenses that you paidover the period.  Simply divide your account value by $1,000 (for example, an$8,600 account value divided by $1,000 = 8.6), then multiply the result by thenumber in the first line under the heading entitled "Expenses Paid DuringPeriod" to estimate 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*                       09/30/08         03/31/09       10/01/08 - 03/31/09        ------------------------------------------------------------------        Actual        $1,000.00         $  717.60               $3.43        Hypothetical   1,000.00          1,021.01                4.03        (5% return before expenses)        * Expenses are equal to the Fund's six-month annualized expense ratio        of 0.80%, multiplied by the average account value over the period,        multiplied by 182 then divided by 365 to reflect the one-half year        period.Schedule of InvestmentsMarch 31, 2009------------------------------------------------------------------------------- Shares or Principal  Amount                                                             Value-----------                                                     ---------------COMMON STOCKS - 91.92%             Consumer Discretionary - Auto &              Components - 0.67%   575,100   Johnson Controls, Inc.                             $    6,901,200                                                                --------------             Consumer Discretionary - Durables &              Apparel - 1.43%   600,000   Fortune Brands, Inc.                                   14,730,000                                                                --------------             Consumer Discretionary - Hotels, Restaurants &              Leisure - 3.72% 1,400,000   Yum! Brands, Inc.                                      38,472,000                                                                --------------             Consumer Discretionary - Retail - 9.04%   410,000   Jos. A. Bank Clothiers, Inc. *                         11,402,100   650,000   Kohl's Corporation *                                   27,508,000 1,192,476   O'Reilly Automotive, Inc. *                            41,748,585   676,160   Penske Automotive Group, Inc.                           6,308,573 1,130,886   Sally Beauty Company, Inc. *                            6,423,432                                                                --------------                                                                    93,390,690                                                                --------------             Consumer Discretionary - Services - 0.96%   832,868   DineEquity, Inc.                                        9,877,814                                                                --------------             Consumer Staples - Food & Staples Retail - 3.64% 1,450,000   Walgreen Co.                                           37,642,000                                                                --------------             Consumer Staples - Food, Beverage &              Tobacco - 3.69%   300,000   Altria Group, Inc.                                      4,806,000 1,604,800   Constellation Brands, Inc. - Class A *                 19,097,120   400,000   Philip Morris International Inc.                       14,232,000                                                                --------------                                                                    38,135,120                                                                --------------             Consumer Staples - Household &              Personal Products - 1.30%   700,000   Avon Products, Inc.                                    13,461,000                                                                --------------             Energy - 12.03%   400,000   Apache Corporation                                     25,636,000   363,300   Bristow Group Inc. *                                    7,785,519   881,300   Inergy, L.P.                                           19,318,096   230,000   Kayne Anderson Energy Development Company               2,148,200   700,000   Kayne Anderson Energy Total Return Fund, Inc.          10,094,000   700,000   Kayne Anderson MLP Investment Company                  13,916,000 1,096,592   Kinder Morgan Management, LLC *                        44,697,095   150,000   McMoRan Exploration Co. *                                 705,000                                                                --------------                                                                   124,299,910                                                                --------------             Financials - Banks - 0.98% 1,644,126   Marshall & Ilsley Corporation                           9,256,429   642,975   MGIC Investment Corporation                               913,025                                                                --------------                                                                    10,169,454                                                                --------------             Financials - Diversified - 5.54% 1,000,000   Affiliated Managers Group, Inc. *                      41,710,000 1,044,785   Leucadia National Corporation                          15,556,849                                                                --------------                                                                    57,266,849                                                                --------------             Financials - Insurance - 7.08%       640   Berkshire Hathaway Inc. - Class A *                    55,488,000   800,000   Loews Corporation                                      17,680,000                                                                --------------                                                                    73,168,000                                                                --------------             Financials - Real Estate - 0.05%   253,550   Cohen & Steers Quality Income Realty Fund, Inc.           509,635                                                                --------------             Health Care - Equipment - 5.77%   280,000   Alcon, Inc.                                            25,454,800   507,500   Covidien Ltd.                                          16,869,300   475,000   St. Jude Medical, Inc. *                               17,256,750                                                                --------------                                                                    59,580,850                                                                --------------             Health Care - Pharmaceuticals &              Biotechnology - 6.33%   278,000   Charles River Laboratories International, Inc.          7,564,380   550,000   Gilead Sciences, Inc. *                                25,476,000   905,688   Thermo Fisher Scientific Inc. *                        32,305,891                                                                --------------                                                                    65,346,271                                                                --------------             Health Care - Services - 5.62%   850,000   DaVita, Inc. *                                         37,357,500   920,000   VCA Antech, Inc. *                                     20,746,000                                                                --------------                                                                    58,103,500                                                                --------------             Industrials - Capital Goods - 7.88%   305,173   Brady Corporation                                       5,380,200   300,000   Briggs & Stratton Corporation                           4,950,000   750,000   Chicago Bridge & Iron Company N.V.                      4,702,500   136,100   Curtiss-Wright Corporation                              3,817,605   150,000   EMCOR Group, Inc. *                                     2,575,500   250,000   Lincoln Electric Holdings, Inc.                         7,922,500 2,083,300   Oshkosh Corporation                                    14,041,442   425,000   W.W. Grainger, Inc.                                    29,826,500   733,695   Woodward Governor Company                               8,202,710                                                                --------------                                                                    81,418,957                                                                --------------             Industrials - Commercial Services &              Supplies - 2.35%   756,500   Copart, Inc. *                                         22,437,790    57,630   Interface, Inc. - Class A                                 172,314   100,000   Republic Services, Inc.                                 1,715,000                                                                --------------                                                                    24,325,104                                                                --------------             Information Technology - Hardware &              Equipment - 1.62%   325,400   Mettler-Toledo International Inc. *                    16,702,782                                                                --------------             Information Technology - Software &              Services - 4.83%   785,000   Fiserv, Inc. *                                         28,621,100   500,000   Hewitt Associates, Inc. *                              14,880,000   258,800   Solera Holdings, Inc. *                                 6,413,064                                                                --------------                                                                    49,914,164                                                                --------------             Materials - 6.49%   400,000   Airgas, Inc.                                           13,524,000   350,000   AptarGroup, Inc.                                       10,899,000 1,000,000   Bemis Company, Inc.                                    20,970,000   300,000   RPM International, Inc.                                 3,819,000   653,400   Stepan Company +                                       17,837,820                                                                --------------                                                                    67,049,820                                                                --------------             Utilities - 0.90%   400,000   Allegheny Energy, Inc.                                  9,268,000                                                                --------------                TOTAL COMMON STOCKS                 (cost $1,043,251,144) ........................    949,733,120                                                                --------------SHORT-TERM INVESTMENTS - 8.28%             Commercial Paper - 8.27%$2,070,000   Avery Dennison Corporation 04/01/09, 0.80%              2,070,000 5,455,000   ITT Corporation 04/01/09, 1.60%                         5,455,000 3,500,000   Integrys Energy Group, Inc. 04/02/09, 2.25%             3,499,781 2,200,000   Integrys Energy Group, Inc. 04/03/09, 1.65%             2,199,798   551,000   Nordstrom, Inc. 04/03/09, 1.00%                           550,969 1,605,000   H.J. Heinz Finance Company 04/06/09, 1.00%              1,604,777 5,115,000   ITT Corporation 04/06/09, 1.70%                         5,113,792 2,600,000   PPG Industries, Inc. 04/06/09, 1.40%                    2,599,494 3,000,000   ITT Corporation 04/08/09, 1.50%                         2,999,125 1,655,000   Volkswagen of America, Inc. 04/09/09, 2.80%             1,653,970 4,400,000   Ingersoll-Rand Global Holding Company Limited              04/13/09, 2.85%                                        4,395,820   600,000   Ingersoll-Rand Global Holding Company Limited              04/14/09, 2.65%                                          599,426 3,025,000   Wisconsin Energy Corporation 04/15/09, 0.65%            3,024,235   950,000   H.J. Heinz Finance Company 04/16/09, 2.00%                949,208 4,120,000   Wisconsin Energy Corporation 04/17/09, 0.90%            4,118,352 4,915,000   Verizon Communications Inc. 04/20/09, 1.10%             4,912,147 3,730,000   Altria Group, Inc. 04/21/09, 1.65%                      3,726,581 5,225,000   Wisconsin Energy Corporation 04/24/09, 0.90%            5,221,996 5,000,000   H.J. Heinz Finance Company 04/27/09, 0.90%              4,996,750 1,085,000   H.J. Heinz Finance Company 04/28/09, 1.20%              1,084,024 1,225,000   ITT Corporation 04/29/09, 1.60%                         1,223,475 3,000,000   CVS Corporation 04/30/09, 1.25%                         2,996,979 2,750,000   Verizon Communications Inc. 05/05/09, 1.15%             2,747,013 3,110,000   Verizon Communications Inc. 05/07/09, 1.15%             3,106,424 1,675,000   Kellogg Company 05/11/09, 1.15%                         1,672,860 3,000,000   Kellogg Company 05/12/09, 1.15%                         2,996,071 3,480,000   ITT Corporation 05/27/09, 1.50%                         3,471,880 3,500,000   Kellogg Company 06/15/09, 1.10%                         3,491,979 3,000,000   Verizon Communications Inc. 06/16/09, 0.70%             2,995,567                                                                --------------                                                                    85,477,493                                                                --------------             Variable Rate Security - 0.01%    49,549   American Family Financial Services, Inc. (1)              04/01/09, 0.10% .................................         49,549                                                                --------------                  TOTAL SHORT-TERM INVESTMENTS                   (cost $85,527,042) .........................     85,527,042                                                                --------------                  TOTAL INVESTMENTS                   (cost $1,128,778,186) -- 100.20% ...........  1,035,260,162                                                                --------------             LIABILITIES, NET OF              OTHER ASSETS -- (0.20)% .........................     (2,077,072)                                                                --------------                  TOTAL NET ASSETS                   (basis of percentages                   disclosed above) -- 100% ................... $1,033,183,090                                                                --------------                                                                --------------+ 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 LiabilitiesMarch 31, 2009-------------------------------------------------------------------------------ASSETS    Investments in securities at value -         Nonaffiliated issuers (cost $1,109,102,388) -          see accompanying schedule of investments ............ $1,017,422,342         Affiliated issuers (cost $19,675,798) -          see accompanying schedule of investments (Note 4) ...     17,837,820                                                                --------------              Total investments ...............................  1,035,260,162                                                                --------------    Receivables -         Dividend and interest ................................        566,772         Capital stock subscription ...........................         20,500                                                                --------------              Total receivables ...............................        587,272                                                                --------------    Other .....................................................          9,673                                                                --------------              Total assets ....................................  1,035,857,107                                                                --------------LIABILITIES    Payables -         Investment securities purchased ......................      1,990,300         Due to adviser -              Management fee ..................................        531,684              Accounting and administrative fee ...............         20,291         Other payables and accrued expense ...................        131,742                                                                --------------              Total liabilities ...............................      2,674,017                                                                --------------              Total net assets ................................ $1,033,183,090                                                                --------------                                                                --------------NET ASSETS CONSIST OF    Paid in capital ........................................... $1,149,069,787    Net unrealized depreciation on investments ................    (93,518,024)    Accumulated net realized loss on investments ..............    (23,740,255)    Accumulated undistributed net investment income ...........      1,371,582                                                                  ------------              Total net assets ................................ $1,033,183,090                                                                --------------                                                                --------------NET ASSET VALUE PER SHARE ($.50 par value, 200,000,000 shares authorized), offering price and redemption price (37,279,040 shares outstanding) ..............................         $27.71                                                                        ------                                                                        ------The accompanying notes to financial statements are an integral part of this                                    statement.Statement of OperationsFor the year ended March 31, 2009-------------------------------------------------------------------------------INCOME    Dividend (net of foreign taxes of $8,400) -         Nonaffiliated issuers ................................  $  13,122,134         Affiliated issuers (Note 4) ..........................        597,141    Interest ..................................................      3,918,099                                                                 -------------         Total income .........................................     17,637,374                                                                 -------------EXPENSES    Management fee ............................................      9,030,267    Transfer agent fees .......................................        835,274    Accounting and administrative fees ........................        345,395    Postage and mailing .......................................        139,101    Insurance .................................................         85,385    Printing ..................................................         70,567    Custodian fees ............................................         68,379    Registration fees .........................................         32,692    Audit and tax fees ........................................         28,200    Telephone ................................................          21,794    Directors' fees ...........................................         17,500    Accounting system and pricing service fees ................         10,680    Legal fees ................................................          8,691    Other operating expenses ..................................          5,197                                                                 -------------         Total expenses .......................................     10,699,122                                                                 -------------         Net investment income ................................      6,938,252                                                                 -------------NET REALIZED LOSS ON INVESTMENTS    Nonaffiliated issuers .....................................    (24,208,965)    Affiliated issuers (Note 4) ...............................      4,214,295                                                                 -------------                                                                   (19,994,670)                                                                 -------------CHANGE IN NET UNREALIZED APPRECIATION/DEPRECIATION ON INVESTMENTS ...............................................   (482,968,517)                                                                 -------------    Net realized and unrealized loss on investments ...........   (502,963,187)                                                                 -------------    Net decrease in net assets resulting from operations ......  $(496,024,935)                                                                 -------------                                                                 -------------The accompanying notes to financial statements are an integral part of this                                  statement.Statements of Changes in Net AssetsFor the years ended March 31, 2009 and 2008-------------------------------------------------------------------------------                                                                                                                                2009                 2008                                             -------------      -------------INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS    Net investment income .................. $    6,938,252     $    7,556,590    Net realized gain (loss)     on investments ........................    (19,994,670)       390,895,188    Change in net unrealized     appreciation/depreciation     on investments ........................   (482,968,517)      (503,554,850)                                             --------------     --------------         Net decrease in net assets          resulting from operations ........   (496,024,935)      (105,103,072)                                             --------------     --------------DISTRIBUTIONS TO SHAREHOLDERS    From net investment income .............     (6,411,252)        (8,143,242)    From net realized gain on investments ..   (169,107,528)      (354,730,242)                                             --------------     --------------         Total distributions ...............   (175,518,780)      (362,873,484)                                             --------------     --------------CAPITAL SHARE TRANSACTIONS    Proceeds from shares issued     (831,405 and 261,295     shares, respectively) .................     26,930,813         14,171,633    Reinvestment of distributions     (3,725,864 and 6,346,478     shares, respectively) .................    162,611,111        334,717,745    Cost of shares redeemed     (4,820,212 and 7,327,761     shares, respectively) .................   (175,491,555)      (403,767,276)                                             --------------     --------------         Decrease in net assets derived          from capital share transactions ..     14,050,369        (54,877,898)                                             --------------     --------------         Total decrease in net assets ......   (657,493,346)      (522,854,454)                                             --------------     --------------NET ASSETS    Beginning of period ....................  1,690,676,436      2,213,530,890                                             --------------     --------------    End of period (including accumulated     undistributed net investment income     of $1,371,582 and $844,582,     respectively) ......................... $1,033,183,090     $1,690,676,436                                             --------------     --------------                                             --------------     --------------The accompanying notes to financial statements are an integral part of these                                  statements.Notes to Financial StatementsMarch 31, 2009------------------------------------------------------------------------------(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.         Investment transactions for financial statement purposes are recorded         on trade date.         The Fund adopted Financial Accounting Standards Board Statement of         Financial Accounting Standards No. 157, Fair Value Measurements ("FAS         157"), effective April 1, 2008.  In accordance with FAS 157, 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.  FAS 157         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.         The following is a summary of the inputs used as of March 31, 2009 in         valuing the Fund's investments carried at value:                                                       Investments                                                           in              Valuation Inputs                         Securities              ----------------                       -------------              Level 1 - Quoted Prices .............. $  949,733,120              Level 2 - Other Significant                         Observable Inputs .........     85,527,042              Level 3 - Significant Unobservable                         Inputs ....................             --                                                     --------------                                       Total ....... $1,035,260,162                                                     --------------                                                     --------------    (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 March, 31, 2009, reclassifications were         recorded to decrease accumulated net realized loss on investments and         decrease paid in capital by $10,575.         The tax character of distributions paid during the years ended March         31 was as follows:                                            03/31/2009         03/31/2008                                           ------------       ------------              Distributions paid from:              Ordinary income ............ $ 23,682,169       $  8,143,242              Long-term capital gain .....  151,836,611        354,730,242                                           ------------       ------------              Total distributions paid ... $175,518,780       $362,873,484                                           ------------       ------------                                           ------------       ------------          As of March 31, 2009, investment cost for federal tax purposes was         $1,138,921,681 and the tax basis components of net assets were as         follows:              Unrealized appreciation ....................... $  203,862,408              Unrealized depreciation .......................   (307,523,927)                                                              --------------              Net unrealized depreciation ...................   (103,661,519)                                                              --------------              Undistributed ordinary income .................      1,371,582              accumulated net realized capital loss..........    (11,096,776)              Paid in capital ...............................  1,149,069,787              Other temporary differences ...................     (2,499,984)                                                              --------------              Net assets .................................... $1,033,183,090                                                              --------------                                                              --------------         The differences between book-basis and tax-basis unrealized         appreciation (depreciation) and accumulated realized capital loss are         attributable primarily to the tax deferral of losses from wash sales         and holdings in partnership interests.         As of March 31, 2009, the Fund realized no post-October losses for tax         purposes.         As of March 31, 2009, the Fund had a tax deferral of wash loss sales         of approximately $12,643,000.         As of March 31, 2009, the Fund has 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.         In July 2006, the Financial Accounting Standards Board ("FASB") issued         Interpretation No. 48, "Accounting for Uncertainty in Income Taxes"         ("FIN 48"). FIN 48 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" expenses on the Statement of         Operations.  The Fund adopted FIN 48 on September 30, 2007.  The Fund         had no material uncertain tax positions and has not recorded a         liability for unrecognized tax benefits as of March 31, 2009.  Also,         the Fund had recognized no interest and penalties related to uncertain         tax benefits in fiscal 2009.  At March 31, 2009, the tax years March         31, 2006 through March 31, 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 $4,191 for the         year ended March 31, 2009 for legal services rendered by this law firm.(3) Investment Transactions --    For the year ended March 31, 2009, the cost of purchases and the proceeds    from sales of investment securities, other than short-term obligations,    aggregated $405,962,453 and $529,662,655, respectively.(4) Transactions with Affiliates -    Following is a summary of fiscal 2009 transactions with "affiliated    companies" as defined by the Investment Company Act of 1940:                                                                                                     Amount of                                                                                                      Capital                                                                                       Amount of        Gain                                                                                       Dividends      Realized                                                       Share Activity                  Credited       on Sale                                        --------------------------------------------   to Income     of Shares                                         Balance                           Balance     in Fiscal     in Fiscal           Security Name                 03/31/08   Purchases    Sales     03/31/09       2009          2009           -------------                ----------  ---------  ---------  ----------   ---------    -----------           Stepan Company                800,200        --       146,800    653,400    $597,141     $4,214,295                                                                                       ---------    -----------(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 for    each of the last two fiscal years 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 most recent    fiscal years, and through 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 last two fiscal years, 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).(6) New Accounting Pronouncement --    In April 2009, FASB Staff Position 157-4, 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, was issued    and is effective for periods ending after June 25, 2009.  FASB Staff    Position 157-4 is intended to provide additional guidance for estimating    fair value in accordance with FASB Statement No. 157, Fair Value    Measurements, when the volume and level of activity for the asset or    liability have significantly decreased.  This FASB Staff Position also    provides guidance on identifying circumstances that indicate a transaction    is not orderly.  At this point, management is evaluating the implications    of FASB Staff Position 157-4 and the impact, if any, on the Fund's    financial statements.Report of Independent Registered Public Accounting Firm-------------------------------------------------------------------------------To the Shareholders and Board of Directors of Nicholas Fund, Inc.:We have audited the accompanying statement of assets and liabilities ofNicholas Fund, Inc. (the "Fund"), including the schedule of investments, as ofMarch 31, 2009, and the related statements of operations and changes in netassets and financial highlights for the year then ended.  These financialstatements and financial highlights are the responsibility of the Fund'smanagement.  Our responsibility is to express an opinion on these financialstatements and financial highlights based on our audit.  The statement ofchanges in net assets for the year ended March 31, 2008 and the financialhighlights for the periods ended prior to March 31, 2009 were audited by otherauditors, whose report, dated May 28, 2008, expressed an unqualified opinion onthe statement of changes in net assets and financial highlights.We conducted our audit in accordance with the standards of the Public CompanyAccounting Oversight Board (United States).  Those standards require that weplan and perform the audit to obtain reasonable assurance about whether thefinancial statements and financial highlights are free of materialmisstatement.  The Fund is not required to have, nor were we engaged toperform, an audit of its internal control over financial reporting.  Our auditincluded consideration of internal control over financial reporting as a basisfor designing audit procedures that are appropriate in the circumstances, butnot for the purpose of expressing an opinion on the effectiveness of the Fund'sinternal control over financial reporting.  Accordingly, we express no suchopinion.  An audit also includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements, assessingthe accounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation.  Ourprocedures included confirmation of securities owned as of March 31, 2009, bycorrespondence with the custodian and brokers.  We believe that our auditprovides a reasonable basis for our opinion.In our opinion, the financial statements and financial highlights referred toabove present fairly, in all material respects, the financial position of theNicholas Fund, Inc. as of March 31, 2009, the results of its operations, thechanges in its net assets and financial highlights for the year then ended, inconformity with accounting principles generally accepted in the United Statesof America.Deloitte & Touche LLPMilwaukee, WisconsinMay 22, 2009
 
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(a)       4.6096(b)       12.1           376,093(1) Date of Initial Public Offering.(2) Based on latest 12 months accomplished earnings.(3) Assuming reinvestment of all distributions.(a) Paid $0.0714 on June 5, 2008 to shareholders of record on June 4, 2008.    Paid $0.1000 on December 29, 2008 to shareholders of record on December 26, 2008.(b) Paid $4.6096 on June 5, 2008 to shareholders of record on June 4, 2008.Range in quarter end price/earnings ratios since December 31, 1974               High                     Low       --------------------      -------------------       March 31, 2000  37.3      March 31, 1982  8.3Approval of Investment Advisory Contract(unaudited)-------------------------------------------------------------------------------A discussion of the Approval by the Board of Directors of the Fund's InvestmentAdvisory Contract can be found in the Fund's Semiannual Report dated September30, 2009.Tax InformationMarch 31, 2009 (unaudited)------------------------------------------------------------------------------The Fund designates 32.74% of its June 2008 and 100% of its December 2008ordinary income distributions as qualified dividend income under the Jobs andGrowth Tax Relief Reconciliation Act of 2003.Also the same percentages qualify for the dividends received deductionavailable to corporate shareholders.The Fund hereby designates approximately $151,836,611 as a capital gaindividend for the year ended March 31, 2009.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.Directors and Officers of the Fund(unaudited)-----------------------------------------------------------------------------------------------------------------------    The following table sets forth the pertinent information about the Fund's directors and officers as of March 31,2009.  Unless otherwise listed, the business address of each director and officer is 700 North Water Street, Milwaukee,WI 53202.                                                                                             Number of                                                  Term of                                  Portfolios in      Other                                                 Office and                                Fund Complex   Directorships                                Positions Held   Length of      Principal Occupations        Overseen         Held   Name and Age                    With Fund    Time Served      During Past 5 Years        by Director    by Director-----------------------------------------------------------------------------------------------------------------------INTERESTED DIRECTORAlbert O. Nicholas, 78 (1), (3)  President,     (2), 40 years  Chief Executive Officer,           3            None                                 Portfolio                     President, Chairman of the                                 Manager and                   Board, Nicholas Company, Inc.,                                 Director                      the Adviser to the Fund.                                                               He is Portfolio Manager of                                                               Nicholas Equity Income Fund, Inc.                                                               and the Fund and Nicholas                                                               Liberty Fund (effective                                                               January 29, 2009).DISINTERESTED DIRECTORSRobert H. Bock, 77               Director       (2), 31 years  Private Investor, Consultant,      6            None                                                               Dean Emeritus of Business                                                               Strategy and Ethics, University of                                                               Wisconsin School of Business,                                                               1997 to present.Jay H. Robertson, 57             Director       (2), 6 years   Private Investor, April 2000       7            None                                                               to present.  Chairman of the                                                               Board of Robertson-Ryan and                                                               Associates, Inc., an insurance                                                               brokerage firm from 1993 to                                                               March 2000.OFFICERSDavid L. Johnson, 67 (3)         Executive       Annual,       Executive Vice President,                                 Vice President  29 years      Nicholas Company, Inc., the                                                               Adviser to the Fund.Jeffrey T. May, 52               Senior Vice     Annual,       Executive Vice President, Chief                                 President,      16 years      Financial Officer and Chief                                 Treasurer,                    Compliance Officer, Nicholas                                 Secretary and                 Company, Inc., the Adviser to                                 Chief Compliance              the Fund.  He is Portfolio                                 Officer                       Manager of Nicholas Money Market                                                               Fund, Inc.David O. Nicholas, 47 (3)        Senior Vice     Annual,       Chief Investment Officer and                                 President       20 years      Director, Nicholas Company, Inc.,                                                               the Adviser to the Fund.                                                               He is Portfolio Manager                                                               of Nicholas II, Inc. and                                                               Nicholas Limited Edition, Inc.                                                               He formerly was Co-Portfolio Manager                                                               of Nicholas High Income Fund, Inc.,                                                               Nicholas Equity Income Fund, Inc.                                                               and the Fund.Lynn S. Nicholas, 52 (3)         Senior Vice     Annual,       Senior Vice President, Nicholas                                 President       23 years      Company, Inc. the Adviser to the                                                               Fund. Lawrence J. Pavelec, 50          Senior Vice     Annual,       Senior Vice President, Nicholas                                 President       4 years       Company, Inc., the Adviser to the                                                               Fund.  He has been Portfolio                                                               Manager of Nicholas High Income Fund,                                                               Inc. since April 2008.  He served as                                                               Co-Portfolio Manager from April 2003                                                               until April 2008.  He was a                                                               portfolio manager for Brandes                                                               Investment Partners from 1999 to                                                               April 2003.Candace L. Lesak, 51             Vice President  Annual,       Employee, Nicholas Company, Inc.,                                                 23 years      the Adviser to the Fund.____________________(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.  Mr. Nicholas is Chief Executive Officer, President 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 a brother-in-law of Albert O. Nicholas.    The Fund's Statement of Additional Information includes additional information about Funddirectors and is available, without charge, upon request, by calling 800-544-6547 (toll-free)or 414-276-0535.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.  The table will be updated and appear in futurefinancial reports issued by the Fund.                                                              Nicholas Fund                                                           -------------------      $1,000 initial investment on .......................  07/14/69* 03/31/99      Number of years investing $100 each month following       the date of initial investment ....................      39.7        10      Total cash invested ................................   $48,700   $13,000      Total dividend and capital gain distributions       reinvested ........................................  $981,185   $ 6,717      Total full shares owned at 03/31/09 ................    20,629       326      Total market value at 03/31/09 .....................  $571,635   $10,040The 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.**
**CODE OF ETHICS FOR PRINCIPALEXECUTIVE AND

SENIOR FINANCIAL OFFICERS

I.    Covered Officers/Purpose of the Code**
    The Nicholas Family of Fundscode of ethics (this "Code") for the investment companies within the complex(collectively, "Funds" and each, "Company") applies to the Company'sPrincipal Executive Officer and Principal Financial Officer (the "CoveredOfficers" each of whom are set forth in Exhibit A) for the purpose of promoting:

* honest and ethical conduct,  including the ethical handling of actual or apparent conflicts of interest between  personal and professional relationships;

* full, fair, accurate, timely  and understandable disclosure in reports and documents that a registrant files with, or  submits to, the Securities and Exchange Commission ("SEC") and in other public  communications made by the Company;

* compliance with applicable  laws and governmental rules and regulations;

* the prompt internal reporting  of violations of the Code to an appropriate person or persons identified in the Code; and

* accountability for adherence  to the Code. 

    Each Covered Officer shouldadhere to a high standard of business ethics and should be sensitive to situations thatmay give rise to actual as well as apparent conflicts of interest.
**II. **Covered Officers Should Handle Ethically Actual and ApparentConflicts of Interest
    Overview. A"conflict of interest" occurs when a Covered Officer's private interestinterferes with the interests of, or his service to, the Company. For example, a conflictof interest would arise if a Covered Officer, or a member of his family, receives improperpersonal benefits as a result of his position with the Company.

    Certain conflicts ofinterest arise out of the relationships between Covered Officers and the Company andalready are subject to conflict of interest provisions in the Investment Company Act of1940 ("Investment Company Act") and the Investment Advisers Act of 1940("Investment Advisers Act"). For example, Covered Officers may not individuallyengage in certain transactions (such as the purchase or sale of securities or otherproperty) with the Company because of their status as "affiliated persons" ofthe Company. The Company's and the investment adviser's compliance programs and proceduresare designed to prevent, or identify and correct, violations of these provisions. ThisCode does not, and is not intended to, repeat or replace these programs and procedures,and such conflicts fall outside of the parameters of this Code.

    Although typically notpresenting an opportunity for improper personal benefit, conflicts arise from, or as aresult of, the contractual relationship between the Company and the investment adviser ofwhich the Covered Officers are also officers or employees. As a result, this Coderecognizes that the Covered Officers will, in the normal course of their duties (whetherformally for the Company or for the adviser, or for both), be involved in establishingpolicies and implementing decisions that will have different effects on the adviser andthe Company. The participation of the Covered Officers in such activities is inherent inthe contractual relationship between the Company and the adviser and is consistent withthe performance by the Covered Officers of their duties as officers of the Company. Thus,if performed in conformity with the provisions of the Investment Company Act and theInvestment Advisers Act, such activities will be deemed to have been handled ethically. Inaddition, it is recognized by the Funds' Boards of Directors ("Boards") that theCovered Officers may also be officers or employees of one or more other investmentcompanies covered by this or other codes.

    Other conflicts of interestare covered by the Code, even if such conflicts of interest are not subject to provisionsin the Investment Company Act and the Investment Advisers Act. The following list providesexamples of conflicts of interest under the Code, but Covered Officers should keep in mindthat these examples are not exhaustive. The overarching principle is that the personalinterest of a Covered Officer should not be placed improperly before the interest of theCompany.

* * *

    Each Covered Officer must:

* not use his personal  influence or personal relationships improperly to influence investment decisions or  financial reporting by the Company whereby the Covered Officer would benefit personally to  the detriment of the Company;

* not cause the Company to take  action, or fail to take action, for the individual personal benefit of the Covered Officer  rather than the benefit of the Company;

* not use material non-public  knowledge of portfolio transactions made or contemplated for the Company to trade  personally or cause others to trade personally in contemplation of the market effect of  such transactions;

* report, at least annually:

* officer and director    positions in corporations, public or private, for profit or not for profit, or in which    the Covered Officer or any of his immediate family members holds 5% or more of its    outstanding stock;

* Positions as a trustee,    executor or other fiduciary;

* Ownership interest in any    broker-dealer or bank;

* Transactions between the    Covered Officer and any of the Nicholas Family of Funds, the Nicholas Company or any    company in which any director of any of the Nicholas Family of Funds is an officer or    director.

* Situations in which any    immediate family member of the Covered Employee is an officer, director or employee of any    company in which any officer or director of the Nicholas Company or any of the Nicholas    Family of Funds is a director or executive officer.

    There are some conflict ofinterest situations that should always be discussed with the appropriate officer ifmaterial. If the matter involves Jeffrey T. May, he should discuss the matter with DavidO. Nicholas. If the matter involves any other person, that person should discuss thematter with Jeffrey T. May. In each case, the officer with whom such matter is discussedis encouraged to review the matter with counsel to the Company. Examples of these include:

* service as a director on the  board of any public company;

* the receipt of any  non-nominal gifts;

* the receipt of any  entertainment from any company with which the Company has current or prospective business  dealings unless such entertainment is business-related, reasonable in cost, appropriate as  to time and place, and not so frequent as to raise any question of impropriety;

* any ownership interest in, or  any consulting or employment relationship with, any of the Company's service providers,  other than its investment adviser, principal underwriter, administrator or any affiliated  person thereof;

* a direct or indirect  financial interest in commissions, transaction charges or spreads paid by the Company for  effecting portfolio transactions or for selling or redeeming shares other than an interest  arising from the Covered Officer's employment, such as compensation or equity ownership. 
**III. Disclosure and Compliance**
* Each Covered Officer should  familiarize himself with the disclosure requirements generally applicable to the Company;

* each Covered Officer should  not knowingly misrepresent, or cause others to misrepresent, facts about the Company to  others, whether within or outside the Company, including to the Company's directors and  auditors, and to governmental regulators and self-regulatory organizations;

* each Covered Officer should,  to the extent appropriate within his area of responsibility, consult with other officers  and employees of the Funds and the adviser with the goal of promoting full, fair,  accurate, timely and understandable disclosure in the reports and documents the Funds  files with, or submits to, the SEC and in other public communications made by the Funds;  and

* it is the responsibility of  each Covered Officer to promote compliance with the standards and restrictions imposed by  applicable laws, rules and regulations. 

IV. Reporting and Accountability

    Each Covered Officer must:

* upon adoption of the Code (or  thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Board  that he has received, read, and understands the Code;

* annually thereafter affirm to  the Board that he has complied with the requirements of the Code;

* not retaliate against any  other Covered Officer or any employee of the Funds or their affiliated persons for reports  of potential violations that are made in good faith; and

* notify the appropriate person  promptly if he knows of any violation of this Code. Failure to do so is itself a violation  of this Code. Each Covered Officer should notify Jeffrey T. May unless the person  violating the Code is Jeffrey T. May, in which case such person should notify David O.  Nicholas. In each case, each Covered Officer is encouraged to also contact counsel to the  Fund. 

    Jeffrey T. May isresponsible for applying this Code to specific situations in which questions are presentedunder it and has the authority to interpret this Code in any particular situation;provided that if the situation involves Jeffrey T. May directly, then Mr. David O.Nicholas is responsible for applying the Code to him and he has authority to interpret theCode with respect to such application. Both Jeffrey T. May and David O. Nicholas areencouraged to discuss the matter with counsel to the Fund. However, any approvals orwaivers sought by the Principal Executive Officer will be considered by the IndependentDirectors (the "Committee").

    The Company will followthese procedures in investigating and enforcing this Code:

* Jeffrey T. May or David O.  Nicholas, with the advice of counsel will take all appropriate action to investigate any  potential violations reported to him;

* if, after such investigation,  the officer making such investigation believes that no violation has occurred, he is not  required to take any further action;

* any matter that the officer  making the investigation believes is a violation will be reported to the independent  directors;

* if the independent directors  concur that a violation has occurred, they will consider appropriate action, which may  include review of, and appropriate modifications to, applicable policies and procedures;  notification to appropriate personnel of the investment adviser or its board; or a  recommendation to dismiss the Covered Officer;

* the independent directors  will be responsible for granting waivers, as appropriate; and

* any changes to or waivers of  this Code will, to the extent required, be disclosed as provided by SEC rules. 
**V. Other Policies and Procedures**
    This Code shall be the solecode of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Actand the rules and forms applicable to registered investment companies thereunder. Insofaras other policies or procedures of the Funds, the Funds' adviser, principal underwriter,or other service providers govern or purport to govern the behavior or activities of theCovered Officers who are subject to this Code, they are superseded by this Code to theextent that they overlap or conflict with the provisions of this Code. The Funds' andtheir investment adviser's codes of ethics under Rule 17j-1 under the Investment CompanyAct and the adviser's more detailed policies and procedures are separate requirementsapplying to the Covered Officers and others, and are not part of this Code.
**VI. Amendments**
    Any amendments to this Code,other than amendments to Exhibit A, must be approved or ratified by a majority vote of theBoard, including a majority of independent directors.
**VII. Confidentiality**
    All reports and recordsprepared or maintained pursuant to this Code will be considered confidential and shall bemaintained and protected accordingly. Except as otherwise required by law or this Code,such matters shall not be disclosed to anyone other than the appropriate Board and itscounsel, the appropriate Company and the Nicholas Company*.***VIII. Internal Use**
    The Code is intended solelyfor the internal use by the Funds and does not constitute an admission, by or on behalf ofany Company, as to any fact, circumstance, or legal conclusion.

 

Date: November 20, 2003

Affirmed: November 17, 2008
**Exhibit A**
Persons Covered by this Code of Ethics

The    Nicholas Company
Albert    O. Nicholas
Jeffrey    T. May
Nicholas    Fund, Inc.
Albert    O. Nicholas
Jeffrey T. May
Nicholas    II, Inc.
David    O. Nicholas
Jeffrey T. May
Nicholas    Limited Edition, Inc.
David    O. Nicholas
Jeffrey T. May
Nicholas    Income Fund, Inc.
David    O. Nicholas
Jeffrey T. May
Nicholas    Equity Income Fund, Inc.
Albert    O. Nicholas
Jeffrey T. May
Nicholas    Liberty Fund
David    O. Nicholas
Jeffrey T. May
Nicholas    Money Market Fund, Inc.
Albert    O. Nicholas
Jeffrey T. May
 

 

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

The Fund's Board of Directors has determinedthat no member of the Board of Directors is an audit committee financial expert as thatterm is defined for purposes of this item. The Fund's Board of Directors routinely holdsits meetings with the other six funds in the Nicholas complex, there is substantialoverlap in the boards of each of those funds, auditors for funds in the Nicholas complexmake presentations jointly to the boards of the funds which they audit and three of thosefunds have the same auditor as the Fund. The boards of directors of five of those otherfunds have determined that one of their members meets the definition of an audit committeefinancial expert; however, that person is not a director of the Fund. The Fund believesthat the joint meetings and presentations with the other funds in the Nicholas complex andthe availability and presence of the board member of other funds in the Nicholas complexwho is an audit committee financial expert gives the Fund some of the benefit of having aboard member who meets the definition of an audit committee financial expert. The Fund cancall upon this person from time to time should circumstances warrant. The independentmembers of the Fund's Board of Directors are considering the possibility of adding thatperson as an independent director of the Fund and adding other independent directors;however, under present SEC rules, such additions may require that the Fund hold a meetingof the shareholders. Current SEC proposals, if adopted, may change the required percentageof independent directors for mutual funds. The Board of Directors of the Fund believesthat it is not in the best interest of the Fund to hold a shareholder meeting until aftersuch SEC proposals are finalized, at which time the Board can more easily evaluate theresulting requirements, the methods which will then be available to satisfy thoserequirements and the benefit to the Fund of holding a shareholder meeting.

 

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

(a) Audit Fees. The aggregate feesbilled for each of the last two fiscal years (the "Reporting Periods") forprofessional services rendered by the Fund's principal accountant (the"Auditor") for the audit of the Fund's annual financial statements, or servicesthat are normally provided by the Auditor in connection with the statutory and regulatoryfilings or engagements for the Reporting Periods, were $ in 2009 and $24,150 in 2008.

(b) Audit-Related Fees. There were no fees billed in each of the last two fiscalyears for assurance and related services rendered by the Auditor to the Fund that arereasonably related to the performance of the audit of the Fund's financial statements andare not reported under paragraph (a) of this Item 4. 

(c) Tax Fees. The aggregate fees billed in the Reporting Periods forprofessional services rendered by the Auditor for tax compliance, tax advice and taxplanning ("Tax Services") were $XX,XXX in 2009 and $5,250 in 2008. Theseservices consisted of (i) review or preparation of U.S. federal, state, local and excisetax returns; (ii) U.S. federal, state and local tax planning, advice and assistanceregarding statutory, regulatory or administrative developments, (iii) tax advice regardingtax qualification matters and/or treatment of various financial instruments held orproposed to be acquired or held. 

(d) All Other Fees. The aggregate fees billed for professionalservices rendered by the Auditor to the Fund's investment adviser were approximately$17,500 in 2008.  These services were for the audit of the investment adviser for theadviser's fiscal year ended 10/31/2008.  Aggregate fees billed by the registrant'sprior principal accountant during 2008 in connection with the transition of the engagementto the registrant's current principal accountant were $2,000, and fees billed in 2007 were$15,750 and related to the audit of the investment advisor's fiscal year ended 10/31/2007.

(e) (1) Audit Committee Pre-Approval Policies and Procedures. The Fund's Boardof Director's has not adopted any pre-approval policies and procedures as described inparagraph (c)(7) of Rule 2-01 of Regulation S-X.  The Fund's Board of Directors meetswith the Auditors and management to review and authorize the Auditor's engagements foraudit and non-audit services to the Fund and its Adviser prior to each engagement.

(e) (2) The percentage of services described ineach of paragraphs (b) through (d) of this Item that were approved by the audit committeepursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows: 

     (b)   N/A 

     (c)   N/A 

     (d)   N/A 

(f)  No disclosures are required by this Item 4(f). 

(g) There were no non-audit fees billed in each of the last two fiscal years by theAuditor for services rendered to the Fund or the Fund's investment adviser that providesongoing services. 

(h)  No disclosures are required by this Item 4(h).

 

**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: 05/29/2009

 

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: 05/29/2009

 

By: /s/ Jeffrey T. May

Name: Jeffrey T. May

Title: Principal Financial Officer 

Date: 05/29/2009******************