N-CSR

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

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 as specified in charter)

700 North Water Street, Milwaukee, Wisconsin 53202

(Address of principal executive offices)          (Zip code)

Jeffrey T. May, Senior Vice President, Secretary and Treasurer

700 North Water Street

Milwaukee, Wisconsin 53202

(Name and address of agent for service)

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

Date of fiscal year end: 03/31/2006

Date of reporting period: 03/31/2006

Item 1. Report to Stockholders.

May 2006

Report to Fellow Shareholders:

For the first three months of calendar year 2006, Nicholas Fund was up 5.65% versus 4.21% for the Standard and Poor's 500 Index. For the fiscal year ended March 31, 2006, the Fund was up 12.25% compared to 11.72% for our benchmark, the S&P 500. The Fund is also ahead of its benchmark in the three- and five-year periods.

Returns for Nicholas Fund, Inc. and selected indices are provided in the chart below for the period ended March 31, 2006.

		Average Annual Total Return
	3 Month	1 Year	3 Year	5 Year	10 Year	15 Year	Life*
Nicholas Fund, Inc.	5.65%	12.25%	19.02%	4.86%	6.93%	9.40%	11.66%
Standard & Poor's 500 Index	4.21%	11.72%	17.21%	3.97%	8.95%	10.82%	10.92%
Consumer Price Index	1.06%	3.42%	2.77%	2.56%	2.54%	2.66%	4.73%
Ending value of $10,000 invested in Nicholas Fund, Inc.	$10,565	$11,225	$16,860	$12,681	$19,540	$38,487	$574,151

* The life of the Fund is 36.7 years from the date of its initial public offering, July 14, 1969. Starting time period for the Standard & Poor's 500 Index and the Consumer Price Index was June 30, 1969.

Performance data quoted represents past performance and is no guarantee of future results. The investment return and principal value of an investment will fluctuate so that an 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 visiting www.nicholasfunds.com/returns.html.

The Fund is net of expenses, the market indices are gross of fees. The ending values above illustrate the performance of a hypothetical $10,000 investment made in the Fund over the timeframes listed. Assumes reinvestment of dividends and capital gains, but does not reflect the effect of any applicable sales charge or redemption fees. These figures do not imply any future performance.

At March 31, 2006, the Fund was fully invested with 1.96% in cash. The diversified portfolio consisted of 46 equities. The Fund's top five holdings were Affiliated Managers Group, Berkshire Hathaway - Class A, FedEx, Marshall & Ilsley and W.R. Berkley. These stocks represented approximately 23% of the total portfolio. In terms of sectors represented, the Fund had approximately 29% in financials, 20% in health care, 15% in consumer discretionary, 14% in energy and 10% in industrials. During fiscal 2006, the Fund increased its relative percentage holdings in the energy, financial and industrial sectors. In turn, the Fund decreased its relative percentage holdings in the health care sector, specifically in the services and pharmaceuticals and biotechnology industries and pared back on its holdings in the consumer staples sector. The Fund's fiscal 2006 performance was helped by its exposure to the financial and health care sectors. The Fund's stock selection, specifically in the financials sector, helped the Fund to outperform the S&P 500 Index. The Fund's performance was negatively impacted by its holdings in the consumer staples and materials sectors.

It is management's belief that the economy is beginning to decelerate in response to higher interest rates, higher energy prices, a slowing down in real estate activity, especially home building, and personal income tax payments. We consider the outlook a prospective mid-cycle slowdown, not a recession. We also believe the Federal Reserve Board is near the end of its tightening moves after 16 rate increases over 23 months. Despite these increases, the 10-year Treasury Note is yielding approximately 5.10%, not overly high based on history. Meanwhile, core inflation is relatively calm around 2%.

Recent stock market performance has been reasonably good. Stock valuations are at a level suggesting decent prospects over the intermediate-term, perhaps 6-8% annually. We intend to work smartly and diligently to outperform that prediction.

Thank you for your continued interest in the Fund.

Sincerely,

/s/ Albert O. Nicholas	/s/ David O. Nicholas
Albert O. Nicholas	David O. Nicholas
Co-Portfolio Manager	Co-Portfolio Manager

Mutual fund investing involves risks. Principal loss is possible. The Fund may invest in smaller companies, which involve additional risks such as limited liquidity and greater volatility.

Please refer to the Schedule of Investments in the report for complete Fund holdings information. Fund holdings and sector allocations are subject to change and should not be considered a recommendation to buy or sell any security.

The S&P 500 Index is a broad based unmanaged index of 500 stocks, which is widely recognized as representative of the equity market in general. The Consumer Price Index represents changes in prices of all goods and services purchased for consumption by urban households.One cannot invest directly in an index.

Must be preceded or accompanied by a prospectus.

The Nicholas Funds are distributed by Quasar Distributors, LLC. (05/06)

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

NICHOLAS FUND, INC. AND S&P 500 INDEX

The line graph which follows compares the initial account value and subsequent account value at the end of each of the most recently completed ten fiscal years of the Fund, to the same investment over the same periods in the S&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&P 500 Index	% Total Return
03/31/96	10,000.00		10,000.00
03/31/97	11,468.00	14.68%	11,982.66	19.83%
03/31/98	17,314.39	50.98%	17,734.60	48.00%
03/31/99	17,336.90	0.13%	21,008.33	18.46%
03/31/00	18,507.14	6.75%	24,777.48	17.94%
03/31/01	15,409.04	(16.74)%	19,406.59	(21.68)%
03/31/02	15,370.52	(0.25)%	19,453.17	0.24%
03/31/03	11,589.37	(24.60)%	14,636.56	(24.75)%
03/31/04	16,145.15	39.31%	19,774.00	35.10%
03/31/05	17,406.69	7.81%	21,096.88	6.69%
03/31/06	19,539.87	12.25%	23,568.44	11.72%

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

	One Year Ended March 31, 2006	Five Years Ended March 31, 2006	Ten Years Ended March 31, 2006
Average Annual Total Return	12.25%	4.86%	6.93%

Past performance is not predictive of future performance, and the above graph and table do not reflect deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Financial Highlights (NICSX)

For a share outstanding throughout each period

-------------------------------------------------------------------------

                                         Year Ended March 31,

                              ------------------------------------------

                               2006       2005    2004     2003     2002 

                              ------    ------  ------   ------   ------

NET ASSET VALUE,

 BEGINNING OF PERIOD ......   $60.05   $56.14   $40.37   $53.74   $54.11

  INCOME (LOSS) FROM

   INVESTMENT OPERATIONS

  Net investment income ...      .26      .10      .09      .18      .12

  Net gain (loss) on

   securities (realized

   and unrealized) ........     6.75     4.29    15.77   (13.39)    (.26)

                              ------   ------   ------   ------   ------

     Total from investment

      operations ..........     7.01     4.39    15.86   (13.21)    (.14)

                              ------   ------   ------   ------   ------

  LESS DISTRIBUTIONS

  From net investment

   income .................     (.25)    (.07)    (.09)    (.16)    (.23)

  From net capital gain ...    (5.32)    (.41)      --       --       --

                               -----   ------   ------   ------   ------

     Total distributions ..    (5.57)    (.48)    (.09)    (.16)    (.23)

                               -----   ------   ------   ------   ------

NET ASSET VALUE, END

 OF PERIOD ................   $61.49   $60.05   $56.14   $40.37   $53.74

                              ------   ------   ------   ------   ------

                              ------   ------   ------   ------   ------

TOTAL RETURN ..............   12.25%    7.81%   39.31% (24.60)%   (.25)%

SUPPLEMENTAL DATA:

Net assets, end

 of period (millions)...... $2,504.9 $2,434.5 $2,470.8 $1,985.2 $2,995.3

Ratio of expenses to

 average net assets .......     .77%     .75%     .73%     .75%     .73%

Ratio of net investment

 income to average

 net assets ...............     .41%     .17%     .17%     .38%     .22%

Portfolio turnover rate ...   32.48%   20.94%   18.18%   33.36%   39.48%

               The accompanying notes to financial statements are an integral part of these highlights.

-------------------------------------------------------------------------------

Top Ten Portfolio Holdings

March 31, 2005 (unaudited)

-------------------------------------------------------------------------------

                                                                  Percentage

        Name                                                    of Net Assets

        ----                                                    -------------

        Affiliated Managers Group, Inc. ...........................     6.54%

        Berkshire Hathaway Inc. - Class A .........................     5.66%

        FedEx Corporation .........................................     3.83%

        Marshall & Ilsley Corporation .............................     3.57%

        W.R. Berkley Corporation ..................................     3.21%

        Kinder Morgan Management, LLC .............................     3.07%

        DaVita, Inc. ..............................................     3.00%

        O'Reilly Automotive, Inc. .................................     2.99%

        Protective Life Corporation ...............................     2.88%

        Fisher Scientific International Inc. ......................     2.73%

                                                                       ------

        Total of top ten ..........................................    37.48%

                                                                       ------

                                                                       ------

-------------------------------------------------------------------------------

Sector Diversification (As a Percentage of Portfolio)

March 31, 2005 (unaudited)

-------------------------------------------------------------------------------

        BAR CHART PLOT POINTS

        Financials ................................................    28.97%

        Health Care ...............................................    20.07%

        Consumer Discretionary ....................................    15.35%

        Energy ....................................................    13.57%

        Industrials ...............................................    10.07%

        Consumer Staples ..........................................     8.72%

        Short-Term Investments ....................................     1.96%

        Information Technology ....................................     1.29%

-------------------------------------------------------------------------------

Fund Expenses

For the six month period ended March 31, 2006 (unaudited)

-------------------------------------------------------------------------------

As a shareholder of the Fund, you incur two types of costs: (1) transaction 

costs and (2) ongoing costs, including management fees and other operating 

expenses.  The following table is intended to help you understand your ongoing 

costs (in dollars) of investing in the Fund and to compare these costs with 

those of other mutual funds.

The example is based on an investment of $1,000 made at the beginning of the 

period and held for the entire period.

The first line of the table below provides information about the actual account 

values and actual expenses.  You may use the information in this line, together 

with the amount you invested, to estimate the expenses that you paid over 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 the number 

in the first line under the heading entitled "Expenses Paid During Period" to 

estimate the expenses you paid on your account during this period.

The second line of the table below provides information about hypothetical 

account values and hypothetical expenses based on the Fund's actual expense 

ratio and an assumed rate of return of 5% per year before expenses, which is 

not the Fund's actual return.  The hypothetical account values and expenses may 

not be used to estimate the actual ending account balance or expenses you paid 

for the period.  You may use this information to compare the ongoing costs of 

investing in the Fund with other funds.  To do so, compare this 5% hypothetical 

example with the 5% hypothetical examples that appear in the shareholder 

reports of other funds.

Please note that the expenses shown in the table are meant to highlight your 

ongoing costs only and do not reflect any transactional costs, such as wire 

fees.  Therefore, the second line of the table is useful in comparing ongoing 

costs only, and will not help you determine the relative total costs of owning 

different funds.  In addition, if these transactional costs were included, your 

costs would have been higher.

                      Beginning         Ending              Expenses

                       Account          Account            Paid During

                        Value            Value               Period*

                      09/30/05          03/31/06       10/01/05 - 03/31/06

        ------------------------------------------------------------------

        Actual        $1,000.00         $1,060.20             $3.96

        Hypothetical   1,000.00          1,021.16              3.88

         (5% return before expenses)

        * Expenses are equal to the Fund's six-month annualized expense ratio 

        of 0.77%, 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 Investments

March 31, 2006

-------------------------------------------------------------------------------

 Shares or

 Principal

  Amount                                                             Value

-----------                                                     ---------------

 COMMON STOCKS -- 98.05% 

                Consumer Discretionary - Consumer

                 Durables & Apparel -- 7.84% 

   1,100,000    D.R. Horton, Inc.                             $   36,542,000

     650,000    Fortune Brands, Inc.                              52,409,500

   1,715,000    Helen of Troy Limited * +                         36,358,000

     150,000    M.D.C. Holdings, Inc.                              9,646,500

      83,000    NVR, Inc. *                                       61,332,850

                                                              --------------

                                                                 196,288,850

                                                              --------------

                Consumer Discretionary - Hotels,

                 Restaurants & Leisure -- 1.76% 

     900,000    Yum! Brands, Inc.                                 43,974,000

                                                              --------------

                Consumer Discretionary - Retail -- 5.75% 

     150,000    Bed Bath & Beyond Inc. *                           5,760,000

   1,500,000    Home Depot, Inc. (The)                            63,450,000

   2,050,000    O'Reilly Automotive, Inc. *                       74,948,000

                                                              --------------

                                                                 144,158,000

                                                              --------------

                Consumer Staples - Food &

                 Staple Retail -- 2.20% 

   1,280,000    Walgreen Co.                                      55,206,400

                                                              --------------

                Consumer Staples - Food, Beverage &

                 Tobacco -- 4.58% 

   2,254,800    Constellation Brands, Inc. - Class A *            56,482,740

   1,400,000    UST Inc.                                          58,240,000

                                                              --------------

                                                                 114,722,740

                                                              --------------

                Consumer Staples - Household & Personal 

                 Products -- 1.93% 

   1,094,100    Alberto-Culver Company                            48,392,043

                                                              --------------

                Energy -- 13.57% 

   1,040,000    Apache Corporation                                68,130,400

     850,000    BJ Services Company                               29,410,000

   2,600,000    El Paso Corporation                               31,330,000

   1,370,000    EnCana Corporation                                64,020,100

     700,000    Kayne Anderson Energy Total

                 Return Fund, Inc.                                16,100,000

     700,000    Kayne Anderson MLP Investment Company             18,186,000

   1,746,793    Kinder Morgan Management, LLC *                   76,858,898

     500,000    Nabors Industries, Ltd. *                         35,790,000

                                                              --------------

                                                                 339,825,398

                                                              --------------

                Financials - Banks -- 4.08% 

   1,076,400    Bank Mutual Corporation                           12,744,576

   2,054,126    Marshall & Ilsley Corporation                     89,518,811

                                                              --------------

                                                                 102,263,387

                                                              --------------

                Financials - Diversified -- 10.79% 

   1,536,000    Affiliated Managers Group, Inc. *                163,752,960

   1,000,000    American Express Company                          52,550,000

     150,000    Capital One Financial Corporation                 12,078,000

   1,450,000    North Fork Bancorporation, Inc.                   41,803,500

                                                              --------------

                                                                 270,184,460

                                                              --------------

                Financials - Insurance -- 14.11% 

       1,569    Berkshire Hathaway Inc. - Class A *              141,759,150

   1,077,700    Mercury General Corporation                       59,165,730

   1,449,900    Protective Life Corporation                       72,118,026

   1,382,875    W.R. Berkley Corporation                          80,289,723

                                                              --------------

                                                                 353,332,629

                                                              --------------

                Health Care - Equipment -- 6.61% 

   1,400,000    Biomet, Inc.                                      49,728,000

   1,005,344    Fisher Scientific International Inc. *            68,413,659

     936,196    Medtronic, Inc.                                   47,511,947

                                                              --------------

                                                                 165,653,606

                                                              --------------

                Health Care - Pharmaceuticals &

                 Biotechnology -- 3.59% 

   1,950,000    Pfizer Inc.                                       48,594,000

     850,000    Wyeth                                             41,242,000

                                                              --------------

                                                                  89,836,000

                                                              --------------

                Health Care - Services -- 9.88% 

     801,087    Cardinal Health, Inc.                             59,697,003

   1,250,000    DaVita, Inc. *                                    75,262,500

   2,232,037    Health Management Associates, Inc.                48,145,038

     830,000    WellPoint, Inc. *                                 64,266,900

                                                              --------------

                                                                 247,371,441

                                                              --------------

                Industrials - Capital Goods -- 6.24% 

     660,000    General Dynamics Corporation                      42,226,800

     150,600    Oshkosh Truck Corporation                          9,373,344

   1,350,000    Pentair, Inc.                                     55,012,500

   1,850,000    Tyco International Ltd.                           49,728,000

                                                              --------------

                                                                 156,340,644

                                                              --------------

                Industrials - Transportation -- 3.83% 

     850,000    FedEx Corporation                                 95,999,000

                                                              --------------

                Information Technology - Hardware &

                 Equipment -- 1.29% 

     550,000    CDW Corporation                                   32,367,500

                                                              --------------

                TOTAL COMMON STOCKS

                 (cost $1,332,862,139)                         2,455,916,098

                                                              --------------

 SHORT-TERM INVESTMENTS -- 1.96% 

                Commercial Paper -- 1.81% 

  $6,000,000    Walt Disney Company (The)

                 04/03/06, 4.60%                                   6,000,000

   2,500,000    Prudential Financial, Inc.

                 04/04/06, 4.76%                                   2,499,670

   1,980,000    General Mills, Inc.

                 04/05/06, 4.71%                                   1,979,482

   1,125,000    John Deere Capital Corporation

                 04/05/06, 4.59%                                   1,124,713

   1,665,000    General Electric Capital Corporation

                 04/06/06, 4.75%                                   1,664,341

     725,000    Sara Lee Corporation

                 04/06/06, 4.65%                                     724,719

   2,535,000    Prudential Financial, Inc.

                 04/07/06, 4.76%                                   2,533,659

   2,890,000    General Electric Capital Corporation

                 04/10/06, 4.73%                                   2,887,342

     255,000    Tribune Company

                 04/10/06, 4.71%                                     254,766

   3,000,000    General Mills, Inc.

                 04/11/06, 4.72%                                   2,996,853

   3,000,000    John Deere Capital Corporation

                 04/12/06, 4.63%                                   2,996,527

   3,000,000    John Deere Capital Corporation

                 04/17/06, 4.76%                                   2,994,447

   1,300,000    Fiserv, Inc.

                 04/18/06, 4.80%                                   1,297,400

     645,000    Sara Lee Corporation

                 04/19/06, 4.82%                                     643,618

   1,945,000    John Deere Capital Corporation

                 04/20/06, 4.81%                                   1,940,582

   1,700,000    Fiserv, Inc.

                 04/25/06, 4.90%                                   1,694,910

   3,715,000    Fiserv, Inc.

                 04/26/06, 4.90%                                   3,703,370

   1,610,000    Fortune Brands, Inc.

                 05/01/06, 4.75%                                   1,604,052

   1,771,000    Fiserv, Inc.

                 05/02/06, 4.90%                                   1,764,010

   2,750,000    Barclays U.S. Funding LLC

                 05/03/06, 4.64%                                   2,739,367

   1,425,000    Fiserv, Inc.

                 05/04/06, 4.95%                                   1,418,926

                                                              --------------

                                                                  45,462,754

                                                              --------------

                Variable Rate Demand Note -- 0.15% 

   3,699,965    Wisconsin Corporate Central Credit Union

                 04/03/06, 4.49%                                   3,699,965

                                                              --------------

                   TOTAL SHORT-TERM INVESTMENTS

                    (cost $49,162,719)                            49,162,719

                                                              --------------

                   TOTAL INVESTMENTS

                    (cost $1,382,024,858) -- 100.01%           2,505,078,817

                                                              --------------

                LIABILITIES, NET OF

                 OTHER ASSETS -- (0.01)%                            (188,456)

                                                              --------------

                   TOTAL NET ASSETS 

                    (basis of percentages

                    disclosed above) -- 100%                  $2,504,890,361

                                                              --------------

                                                              --------------

+ This company is affiliated with the Fund as defined in Section 2(a)(3) of the 

Investment Company Act of 1940, in that the Fund holds 5% or more of its 

outstanding voting securities. (Note 4)

* Non-income producing security.

The accompanying notes to financial statements are an integral part of this 

                                   schedule.

Statement of Assets and Liabilities

March 31, 2006

-------------------------------------------------------------------------------

ASSETS

    Investments in securities at value -

         Nonaffiliated issuers (cost $1,346,221,730) -

          see accompanying schedule of investments ............ $2,468,720,817

         Affiliated issuers (cost $35,803,128) -

          see accompanying schedule of investments (Note 4) ...     36,358,000

                                                                --------------

              Total investments ...............................  2,505,078,817

                                                                --------------

    Receivables -

         Investment securities sold ...........................      8,600,796

         Dividend and interest ................................        557,862

         Capital stock subscription ...........................         40,704

                                                                --------------

              Total receivables ...............................      9,199,362

                                                                --------------

    Other .....................................................         28,143

                                                                --------------

              Total assets ....................................  2,514,306,322

                                                                --------------

LIABILITIES

    Payables -

         Investment securities purchased ......................      7,306,110

         Due to adviser -

              Management fee ..................................      1,475,793

              Accounting and administrative fee ...............        104,069

         Capital stock redemption .............................          7,500

         Other payables and accrued expense ...................        522,489

                                                                --------------

              Total liabilities ...............................      9,415,961

                                                                --------------

              Total net assets ................................ $2,504,890,361

                                                                --------------

                                                                --------------

NET ASSETS CONSIST OF

    Paid in capital ........................................... $1,340,093,185

    Net unrealized appreciation on investments ................  1,123,053,959

    Accumulated undistributed 

     net realized gain on investments .........................     39,671,796

    Accumulated undistributed net investment income ...........      2,071,421

                                                                --------------

              Total net assets ................................ $2,504,890,361

                                                                --------------

                                                                --------------

NET ASSET VALUE PER SHARE ($.50 par value, 

 200,000,000 shares authorized),

 offering price and redemption price 

 (40,733,969 shares outstanding) ..............................         $61.49

                                                                        ------

                                                                        ------

The accompanying notes to financial statements are an integral part of this 

                                  statement.

Statement of Operations

For the year ended March 31, 2006

-------------------------------------------------------------------------------

INCOME

    Dividend ..................................................   $ 23,943,400

    Interest ..................................................      5,404,286

                                                                  ------------

         Total income .........................................     29,347,686

                                                                  ------------

EXPENSES

    Management fee ............................................     16,218,544

    Accounting and administrative fees ........................      1,148,420

    Transfer agent fees .......................................      1,063,224

    Postage and mailing .......................................        265,743

    Custodian fees ............................................        122,583

    Insurance .................................................        100,234

    Printing ..................................................         96,794

    Registration fees .........................................         32,093

    Audit and tax fees ........................................         29,500

    Legal fees ................................................         16,277

    Directors' fees ...........................................         10,000

    Accounting system and pricing service fees ................          9,262

    Other operating expenses ..................................         11,272

                                                                  ------------

         Total expenses .......................................     19,123,946

                                                                  ------------

         Net investment income ................................     10,223,740

                                                                  ------------

NET REALIZED GAIN ON INVESTMENTS ..............................    185,767,499

                                                                  ------------

CHANGE IN NET UNREALIZED APPRECIATION/DEPRECIATION

 ON INVESTMENTS ...............................................     90,179,671

                                                                  ------------

    Net realized and unrealized gain on investments ...........    275,947,170

                                                                  ------------

    Net increase in net assets resulting from operations ......   $286,170,910

                                                                  ------------

                                                                  ------------

The accompanying notes to financial statements are an integral part of this 

                                  statement.

Statements of Changes in Net Assets

For the years ended March 31, 2006 and 2005

-------------------------------------------------------------------------------

                                                  2006                2005

                                             --------------    --------------

INCREASE IN NET ASSETS 

 FROM OPERATIONS

    Net investment income .................. $   10,223,740    $    4,088,303

    Net realized gain on investments .......    185,767,499       100,999,105

    Change in net unrealized 

     appreciation/depreciation

     on investments ........................     90,179,671        76,827,728

                                             --------------    --------------

         Net increase in net assets 

          resulting from operations ........    286,170,910       181,915,136

                                             --------------    --------------

DISTRIBUTIONS TO SHAREHOLDERS

    From net investment income .............     (9,973,063)       (2,841,616)

    From net realized gain on investments ..   (211,181,343)      (16,887,430)

                                             --------------    --------------

         Total distributions ...............   (221,154,406)      (19,729,046)

                                             --------------    --------------

CAPITAL SHARE TRANSACTIONS 

    Proceeds from shares issued

     (728,559 and 629,422 

     shares, respectively) .................     44,522,535        36,372,519

    Reinvestment of distributions

     (3,430,247 and 298,900 

     shares, respectively) .................    202,524,598        17,995,057

    Cost of shares redeemed

     (3,967,009 and 4,400,459

     shares, respectively) .................   (241,669,892)     (252,836,338)

                                             --------------    --------------

         Increase (decrease) in net assets 

          derived from capital share

          transactions .....................      5,377,241      (198,468,762)

                                             --------------    --------------

         Total increase (decrease)

          in net assets ....................     70,393,745       (36,282,672)

                                             --------------    --------------

NET ASSETS

    Beginning of period ....................  2,434,496,616     2,470,779,288

                                             --------------    --------------

    End of period (including undistributed

     net investment income of

     $2,071,421 and $1,820,744,

     respectively) ......................... $2,504,890,361    $2,434,496,616

                                             --------------    --------------

                                             --------------    --------------

The accompanying notes to financial statements are an integral part of these 

                                  statements.

Notes to Financial Statements

March 31, 2006

------------------------------------------------------------------------------

(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.

    (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.  Dividends and 

         distributions paid to shareholders are recorded on the ex-dividend 

         date.  Generally, discounts and premiums on long-term security 

         purchases, if any, are amortized over the 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)  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.  To the extent these book and tax differences 

         are permanent in nature, such amounts are reclassified among paid in 

         capital, accumulated undistributed net realized gain (loss) on 

         investments and accumulated undistributed net investment income.  At 

         March 31, 2006, no reclassifications were recorded.

         The tax character of distributions paid during the years ended

         March 31 were as follows:

                                               2006              2005

                                           ------------      ------------

              Distributions paid from:

              Ordinary income ............ $ 17,455,522       $ 2,841,616

              Long-term capital gain .....  203,698,884        16,887,430

                                           ------------       -----------

              Total distributions paid ... $221,154,406       $19,729,046

                                           ------------       -----------

                                           ------------       -----------

         As of March 31, 2006, investment cost for federal tax purposes was 

         $1,383,597,637 and the tax basis components of net assets were as 

         follows:

              Unrealized appreciation ...................... $1,139,256,241

              Unrealized depreciation ......................    (17,775,061)

                                                             --------------

              Net unrealized appreciation ..................  1,121,481,180

                                                             --------------

              Undistributed ordinary income ................      2,071,421

              Accumulated undistributed net realized

               capital gain ................................     41,244,575

              Paid in capital ..............................  1,340,093,185

                                                             --------------

              Net assets ................................... $2,504,890,361

                                                             --------------

                                                             --------------

         The differences between book-basis and tax-basis unrealized 

         appreciation (depreciation), undistributed ordinary income and 

         accumulated undistributed realized capital gain are attributable 

         primarily to the tax deferral of losses from wash sales.

         As of March 31, 2006, the Fund has no capital loss carryforward.

         As of March 31, 2006, the Fund realized no post-October losses for tax 

         purposes.

         As of March 31, 2006, the Fund had a tax deferral of wash loss sales 

         of approximately $1,573,000.

    (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.  The Fund 

         incurred expenses of $1,148,420 for accounting and administrative 

         services during the year ended March 31, 2006.

    (b)  Independent Counsel --

         A director of the Adviser is affiliated with a law firm that provides 

         services to the Fund.  The Fund incurred expenses of $11,670 for the 

         year ended March 31, 2006 for legal services rendered by this law firm.

(3) Investment Transactions --

    For the year ended March 31, 2006, the cost of purchases and the proceeds 

    from sales of investment securities, other than short-term obligations, 

    aggregated $767,063,205 and $756,336,257, respectively.

(4) Transactions with Affiliates -

    Following is a summary of fiscal 2006 transactions with "affiliated 

    companies" as defined by the Investment Company Act of 1940:

                                                       Share Activity

                                        --------------------------------------------

                                         Balance                           Balance

               Security Name             03/31/05   Purchases    Sales     03/31/06

           ---------------------        ----------  ---------  ---------  ----------

           Helen of Troy Limited            --      1,715,000      --     1,715,000

    There were no dividends nor realized capital gain (loss) from affiliated 

    companies for the year ended March 31, 2006.

Tax Information

March 31, 2006 (unaudited)

------------------------------------------------------------------------------

The Fund designates 91.80% of its June 2005 ordinary income distribution and 

100% of its December 2005 ordinary income distribution as qualified dividend 

income under the Jobs and Growth Tax Relief Reconciliation Act of 2003.

For the year ended March 31, 2006, 100% of the dividends paid from net ordinary 

income qualify for the dividends received deduction available to corporate 

shareholders.

The Fund hereby designates approximately $203,698,884 as a capital gain 

dividend for the year ended March 31, 2006.

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 of 

Nicholas Fund, Inc. (the "Fund"), including the schedule of investments, as of 

March 31, 2006, and the related statement of operations for the year then 

ended, the statements of changes in net assets for each of the two years in the 

period then ended, and the financial highlights for each of the four years in 

the period then ended.  These financial statements and financial highlights are 

the responsibility of the Fund's management.  Our responsibility is to express 

an opinion on these financial statements and financial highlights based on our 

audits.  The financial highlights for the year ended March 31, 2002 were 

audited by other auditors who have ceased operations whose report dated April 

19, 2002, expressed an unqualified opinion on those statements.

We conducted our audits in accordance with the standards of the Public Company 

Accounting Oversight Board (United States).  Those standards require that we 

plan and perform the audit to obtain reasonable assurance about whether the 

financial statements and financial highlights are free of material 

misstatement.  We were not engaged to perform an audit of the Fund's internal 

control over financial reporting.  Our audits included consideration of 

internal control over financial reporting as a basis for designing audit 

procedures that are appropriate in the circumstances, but not for the purpose 

of expressing an opinion on the effectiveness of the Fund's internal control 

over financial reporting.  Accordingly, we express no such opinion.  An audit 

also includes examining, on a test basis, evidence supporting the amounts and 

disclosures in the financial statements and financial highlights, assessing the 

accounting principles used and significant estimates made by management, and 

evaluating the overall financial statement presentation.  Our procedures 

included confirmation of securities owned as of March 31, 2006, by 

correspondence with the custodian and brokers or by other appropriate auditing 

procedures where replies from brokers were not received.  We believe that our 

audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to 

above present fairly, in all material respects, the financial position of 

Nicholas Fund, Inc., at March 31, 2006, the results of its operations for the 

year then ended, the changes in its net assets for each of the two years in the 

period then ended, and the financial highlights for each of the four years in 

the period then ended, in conformity with U.S. generally accepted accounting 

principles.

                                         ERNST & YOUNG LLP

Chicago, Illinois,

May 1, 2006

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        $  --          $   --             --           $ 10,000

March 31, 1985 .........   29.24         0.6420          1.5760          13.2 times      69,858

March 31, 1986 .........   35.26         0.5750          0.6100          15.8            87,699

March 31, 1987 .........   39.94         0.8820          0.1870          16.3           102,387

March 31, 1988 .........   32.15         1.8400          4.0340          14.1            98,557

March 31, 1989 .........   35.27         1.0250          0.4510          13.2           113,155

March 31, 1990 .........   37.72         0.9240          1.0540          14.9           127,360

March 31, 1991 .........   42.99         0.7900          0.2250          16.9           149,180

March 31, 1992 .........   49.68         0.6790          0.8240          19.4           178,011

March 31, 1993 .........   52.91         0.6790          2.0420          18.5           200,098

March 31, 1994 .........   51.10         0.8175          1.0470          16.7           200,182

March 31, 1995 .........   52.22         0.7070          3.3170          17.2           221,970

March 31, 1996 .........   63.81         0.5650          4.0945          21.0           293,836

March 31, 1997 .........   67.11         0.4179          5.3166          21.7           336,973

March 31, 1998 .........   93.98         0.3616          5.8002          30.0           508,762

March 31, 1999 .........   85.20         0.5880          8.2716          31.7           509,446

March 31, 2000 .........   84.56         0.3114          5.9433          37.3           543,813

March 31, 2001 .........   54.11         0.1900         19.2500          26.6           452,780

March 31, 2002 .........   53.74         0.2360            --            23.8           451,627

March 31, 2003 .........   40.37         0.1585            --            16.4           340,547

March 31, 2004 .........   56.14         0.0905            --            19.4           474,406

March 31, 2005 .........   60.05         0.0678          0.4100          19.4           511,476

March 31, 2006 .........   61.49         0.2512 (a)      5.3194 (b)      18.4           574,151

(1) Date of Initial Public Offering.

(2) Based on latest 12 months accomplished earnings.

(3) Assuming reinvestment of all distributions.

(a) Paid $0.0803 on June 8, 2005 to shareholders of record on June 7, 2005.

    Paid $0.1709 on December 29, 2005 to shareholders of record on December 28, 2005.

(b) Paid $1.6634 on June 8, 2005 to shareholders of record on June 7, 2005.

    Paid $3.6560 on December 29, 2005 to shareholders of record on December 28, 2005.

Range in quarter end price/earnings ratios since December 31, 1974

               High                     Low

       --------------------      -------------------

       March 31, 2000  37.3      March 31, 1982  8.3

Approval of Investment Advisory Contract

(unaudited)

-------------------------------------------------------------------------------

A discussion of the Approval by the Board of Directors of the Fund's Investment 

Advisory Contract can be found in the Fund's Semiannual Report dated September 

30, 2005.

Information on Proxy Voting

(unaudited) 

-------------------------------------------------------------------------------

A description of the policies and procedures that the Fund uses to determine 

how to vote proxies relating to portfolio securities is available, without 

charge, upon request by calling 800-544-6547 (toll-free) or 414-276-0535.  It 

also appears in the Fund's Statement of Additional Information, which can be 

found on the SEC's website, www.sec.gov.  A record of how the Fund voted its 

proxies for the most recent twelve-month period ended June 30, also is 

available 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 first 

and third quarters of each fiscal year on Form N-Q.  The Fund's Form N-Q's are 

available on the SEC's website at www.sec.gov and may be reviewed and copied at 

the SEC's Public Reference Room in Washington, D.C.  Information on the 

operation of the Public Reference Room may be obtained by calling 

1-800-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, 

2006.  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 DIRECTOR

Albert O. Nicholas, 75 (1), (3)  President,     (2), 37 years  Chief Executive Officer and        3            None

                                 Co-Portfolio                  Chairman of the Board, Nicholas

                                 Manager and                   Company, Inc., the Adviser

                                 Director                      to the Fund.  He is Co-Portfolio

                                                               Manager of Nicholas Equity 

                                                               Income Fund, Inc. and the Fund

                                                               since each fund's inception.

DISINTERESTED DIRECTORS

Robert H. Bock, 74               Director       (2), 28 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, 54             Director       (2), 3 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.

OFFICERS

David L. Johnson, 64 (3)         Executive       Annual,       Executive Vice President, 

                                 Vice President  26 years      Nicholas Company, Inc., the

                                                               Adviser to the Fund.

Jeffrey T. May, 49               Senior Vice     Annual,       Senior Vice President, Treasurer 

                                 President,      13 years      and Chief Compliance Officer, Nicholas

                                 Treasurer,                    Company, Inc., the Adviser to the 

                                 Secretary and                 Fund.  He is Portfolio Manager

                                 Chief Compliance              of Nicholas Money Market Fund, Inc.

                                 Officer

David O. Nicholas, 44 (3)        Senior Vice     Annual,       President, Chief Investment

                                 President and   17 years      Officer and Director, Nicholas

                                 Co-Portfolio                  Company, Inc., the Adviser to the

                                 Manager                       Fund. He is Portfolio Manager

                                                               of Nicholas II, Inc. and

                                                               Nicholas Limited Edition, Inc.

                                                               and is Co-Portfolio Manager

                                                               of Nicholas High Income Fund, Inc.,

                                                               Nicholas Equity Income Fund, Inc.

                                                               and the Fund.

Lynn S. Nicholas, 49 (3)         Senior Vice     Annual,       Senior Vice President, Nicholas

                                 President       20 years      Company, Inc. the Adviser to the

                                                               Fund.

Lawrence J. Pavelec, 47          Senior Vice     Annual,       Senior Vice President, Nicholas 

                                 President       1 year        Company, Inc., the Adviser to the

                                                               Fund.  He has been Co-Portfolio 

                                                               Manager of Nicholas High Income Fund,

                                                               Inc. since April 2003.  He was a 

                                                               portfolio manager for Brandes 

                                                               Investment Partners from 1999 to

                                                               April 2003.

Mark J. Giese, 35                Vice President  Annual,       Vice President, Nicholas Company,

                                                 9 years       Inc., the Adviser to the Fund. He has

                                                               been Portfolio Manager of Nicholas

                                                               Liberty Fund since December 2001.

Candace L. Lesak, 48             Vice President  Annual,       Employee, Nicholas Company, Inc.,

                                                 20 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 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 Fund

directors 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 shareholders' right to privacy.  We are 

committed to safeguarding the information that you provide us to maintain and 

execute transactions on your behalf.

      We collect the following non-public personal information about you:

      * Information we receive from you on applications or other forms, whether 

we receive the form in writing or electronically.  This includes, but is not 

limited to, your name, address, phone number, tax identification number, date 

of birth, beneficiary information and investment selection.

      * Information about your transactions with us and account history with 

us.  This includes, but is not limited to, your account number, balances and 

cost basis information.  This also includes transaction requests made through 

our transfer agent.

      * Other general information that we may obtain about you such as 

demographic 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 information 

about you with third party companies. Listed below are some examples of third 

parties to whom we may disclose non-public personal information.  While these 

examples do not cover every circumstance permitted by law, we hope they help 

you 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 process 

transactions that you may request.  This would include, but is not limited to, 

our transfer agent to process your transactions, mailing houses to send you 

required reports and correspondence regarding the Fund and its Adviser, the 

Nicholas Company, Inc., and our dividend disbursing agent to process fund 

dividend checks.

      * With a party representing you, with your consent, such as your broker 

or lawyer.

      * When required by law, such as in response to a subpoena or other legal 

process.

      The Fund and its Adviser maintain policies and procedures to safeguard 

your non-public personal information.  Access is restricted to employees who 

the Adviser determines need the information in order to perform their job 

duties.  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 financial 

intermediary, including, but not limited to, a broker-dealer, bank, or trust 

company, the privacy policy of your financial intermediary would govern how 

your non-public personal information would be shared with non-affiliated third 

parties.

AUTOMATIC INVESTMENT PLAN - AN UPDATE 

(unaudited)

-------------------------------------------------------------------------------

The Nicholas Family of Funds' Automatic Investment Plan provides a simple 

method to dollar cost average into the fund(s) of your choice.

Dollar cost averaging involves making equal systematic investments over an 

extended time period.  A fixed dollar investment will purchase more shares when 

the market is low and fewer shares when the market is high.  The automatic 

investment plan is an excellent way for you to become a disciplined investor.

The following table illustrates what dollar cost averaging can achieve.  Please 

note that past performance is no guarantee of future results.  Nicholas Company 

recommends dollar cost averaging as a practical investment method.  It should 

be consistently applied for long periods so that investments are made through 

several market cycles.  The table will be updated and appear in future 

financial reports issued by the Fund.

                                                              Nicholas Fund

                                                           -------------------

      $1,000 initial investment on .......................  07/14/69* 03/31/96

      Number of years investing $100 each month following 

       the date of initial investment ....................      36.7        10

      Total cash invested ................................   $45,100   $13,000

      Total dividend and capital gain distributions

       reinvested ........................................  $654,944   $ 5,102

      Total full shares owned at 03/31/06 ................    14,129       285

      Total market value at 03/31/06 .....................  $868,822   $17,536

The results above assume purchase on the last day of the month.  The Nicholas 

Automatic Investment Plan actually invests on the 20th of each month (or on the 

alternate date specified by the investor).  Total market value includes 

reinvestment 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 (1-800-544-6547)

*     24-hour Internet Account Access (www.nicholasfunds.com)

Please call a shareholder representative for further information on the above 

services or with any other questions you may have regarding the Nicholas Funds 

(1-800-544-6547).

                            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

                         MARK J. GIESE, Vice President

                       CANDACE L. LESAK, Vice President

                              Investment Adviser

                            NICHOLAS COMPANY, INC.

                             Milwaukee, Wisconsin

                         414-276-0535 or 800-544-6547

                                Transfer Agent

                        U.S. BANCORP FUND SERVICES, LLC

                             Milwaukee, Wisconsin

                         414-276-0535 or 800-544-6547

                                   Custodian

                                U.S. BANK N.A.

                               Cincinnati, Ohio

                 Independent Registered Public Accounting Firm

                               ERNST & YOUNG LLP

                               Chicago, Illinois

                                    Counsel

                         MICHAEL BEST & FRIEDRICH LLP

                             Milwaukee, Wisconsin

This report is submitted for the information of shareholders of the Fund.  It 

is not authorized for distribution to prospective investors unless preceded or 

accompanied by an effective prospectus.

                                 ANNUAL REPORT

                              NICHOLAS FUND, INC.

700 North Water Street

Milwaukee, Wisconsin 53202

www.nicholasfunds.com

March 31, 2006

Item 2. Code of Ethics.

CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND

SENIOR FINANCIAL OFFICERS

I.    Covered Officers/Purpose of the Code

    The Nicholas Family of Funds code of ethics (this "Code") for the investment companies within the complex (collectively, "Funds" and each, "Company") applies to the Company's Principal Executive Officer and Principal Financial Officer (the "Covered Officers" 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 should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.

II. Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest

    Overview. A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his service to, the Company. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with the Company.

    Certain conflicts of interest arise out of the relationships between Covered Officers and the Company and already are subject to conflict of interest provisions in the Investment Company Act of 1940 ("Investment Company Act") and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Company because of their status as "affiliated persons" of the Company. The Company's and the investment adviser's compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code 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 not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Company and the investment adviser of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Company or for the adviser, or for both), be involved in establishing policies and implementing decisions that will have different effects on the adviser and the Company. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Company and the adviser and is consistent with the 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 the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the Funds' Boards of Directors ("Boards") that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes.

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

* * *

    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 of interest situations that should always be discussed with the appropriate officer if material. If the matter involves Jeffrey T. May, he should discuss the matter with David O. Nicholas. If the matter involves any other person, that person should discuss the matter with Jeffrey T. May. In each case, the officer with whom such matter is discussed is 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 is responsible for applying this Code to specific situations in which questions are presented under 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 the Code with respect to such application. Both Jeffrey T. May and David O. Nicholas are encouraged to discuss the matter with counsel to the Fund. However, any approvals or waivers sought by the Principal Executive Officer will be considered by the Independent Directors (the "Committee").

    The Company will follow these 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 sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as 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 the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The Funds' and their investment adviser's codes of ethics under Rule 17j-1 under the Investment Company Act and the adviser's more detailed policies and procedures are separate requirements applying 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 the Board, including a majority of independent directors.

VII. Confidentiality

    All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained 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 its counsel, the appropriate Company and the Nicholas Company.

VIII. Internal Use

    The Code is intended solely for the internal use by the Funds and does not constitute an admission, by or on behalf of any Company, as to any fact, circumstance, or legal conclusion.

Date: November 20, 2003

Affirmed: November 21, 2005

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 determined that no member of the Board of Directors is an audit committee financial expert as that term is defined for purposes of this item. The Fund's Board of Directors routinely holds its meetings with the other six funds in the Nicholas complex, there is substantial overlap in the boards of each of those funds, auditors for funds in the Nicholas complex make presentations jointly to the boards of the funds which they audit and three of those funds have the same auditor as the Fund. The boards of directors of five of those other funds have determined that one of their members meets the definition of an audit committee financial expert; however, that person is not a director of the Fund. The Fund believes that the joint meetings and presentations with the other funds in the Nicholas complex and the availability and presence of the board member of other funds in the Nicholas complex who is an audit committee financial expert gives the Fund some of the benefit of having a board member who meets the definition of an audit committee financial expert. The Fund can call upon this person from time to time should circumstances warrant. The independent members of the Fund's Board of Directors are considering the possibility of adding that person 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 meeting of the shareholders. Current SEC proposals, if adopted, may change the required percentage of independent directors for mutual funds. The Board of Directors of the Fund believes that it is not in the best interest of the Fund to hold a shareholder meeting until after such SEC proposals are finalized, at which time the Board can more easily evaluate the resulting requirements, the methods which will then be available to satisfy those requirements and the benefit to the Fund of holding a shareholder meeting.

Item 4. Principal Accountant Fees and Services.

(a) Audit Fees. The aggregate fees billed for each of the last two fiscal years (the "Reporting Periods") for professional services rendered by the Fund's principal accountant (the "Auditor") for the audit of the Fund's annual financial statements, or services that are normally provided by the Auditor in connection with the statutory and regulatory filings or engagements for the Reporting Periods, were $25,000 in 2006 and $20,000 in 2005.

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

(c) Tax Fees. The aggregate fees billed in the Reporting Periods for professional services rendered by the Auditor for tax compliance, tax advice and tax planning ("Tax Services") were $4,500 in 2006 and $4,000 in 2005. These services consisted of (i) review or preparation of U.S. federal, state, local and excise tax returns; (ii) U.S. federal, state and local tax planning, advice and assistance regarding statutory, regulatory or administrative developments, (iii) tax advice regarding tax qualification matters and/or treatment of various financial instruments held or proposed to be acquired or held.

There were no fees billed in each of the last two fiscal years for Tax Services by the Auditor to the Fund's investment adviser which required pre-approval by the Board of Directors as described in paragraph (e)(1) of this Item 4.

(d) All Other Fees. The aggregate fees billed for professional services rendered by the Auditor to the Fund's investment adviser were $10,000 in 2005 and $8,400 in 2004.  These services were for the audit of the investment adviser for the adviser's fiscal years ended 10/31/2005 and 10/31/2004.

There were no fees billed in each of the last two fiscal years for Non-Audit Services by the Auditor to the Fund's investment adviser which required pre-approval by the Board of Directors as described in paragraph (e)(1) of this Item 4.

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

(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 the Auditor for services rendered to the Fund or the Fund's investment adviser that provides ongoing services.

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

Item 5. Audit Committee of Listed Registrants.

Not applicable to this filing.

Item 6. Schedule of Investments.

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

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Applicable only to annual reports filed by closed-end funds.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Applicable only to annual reports filed by closed-end funds.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers.

Applicable only to closed-end funds.

Item 10.  Submission of Matters to a Vote of Security Holders.

Not applicable to this filing.

Item 11. Controls and Procedures.

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

Item 12. Exhibits.

(a)(1) Code of Ethics -- Any code of ethics, or amendments thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit.

Not applicable to this filing.

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

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

Applicable only to closed-end funds.

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

SIGNATURES

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

(Registrant) Nicholas Fund, Inc.

By: /s/ Albert O. Nicholas

Name: Albert O. Nicholas

Title: Principal Executive Officer

Date: 05/30/2006

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

By: /s/ Albert O. Nicholas

Name: Albert O. Nicholas

Title: Principal Executive Officer

Date: 05/30/2006

By: /s/ Jeffrey T. May

Name: Jeffrey T. May

Title: Principal Financial Officer

Date: 05/30/2006

EX-99.CERT

I, Albert O. Nicholas, certify that:

1. I have reviewed this report on Form N-CSR of Nicholas Fund, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluations; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: 05/30/2006	/s/ Albert O. Nicholas
	Albert O. Nicholas
	Principal Executive Officer

EX-99.CERT

I, Jeffrey T. May, certify that:

1. I have reviewed this report on Form N-CSR of Nicholas Fund, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluations; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: 05/30/2006	/s/ Jeffrey T. May
	Jeffrey T. May
	Principal Financial Officer

EX-99.906 CERT

EXHIBIT 99.906 CERTIFICATATION

Pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

Registrant: Nicholas Fund, Inc.

Form: N-CSR Semiannual Report dated March 31, 2006

I, Albert O. Nicholas, hereby certify that to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	05/30/2006
	/s/ Albert O. Nicholas
	Albert O. Nicholas, President (Chief Executive Officer)

I, Jeffrey T. May, hereby certify that to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	05/30/2006
	/s/ Jeffrey T. May
	Jeffrey T. May, Treasurer (Chief Financial Officer)