PARNASSUS FUNDS

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number: 811-04044

Parnassus Funds

(Exact name of registrant as specified in charter)

1 Market Street, Suite 1600, San Francisco, California 94105

(Address of principal executive offices) (Zip code)

Marc C. Mahon

Parnassus Funds

1 Market Street, Suite 1600, San Francisco, California 94105

(Name and address of agent for service)

Registrant’s telephone number, including area code: (415) 778-0200

Date of fiscal year end: December 31

Date of reporting period: September 30, 2010

ITEM 1.  SCHEDULE OF INVESTMENTS.

P A R N A S S U S   F U N D

 Portfolio of Investments as of September 30, 2010 (unaudited)

Shares		Equities	Percent of Net Assets			Market Value
		Biotechnology
	20,000	Bio-Rad Laboratories Inc. 1				$	1,810,200
	190,000	Genzyme Corp. 1					13,450,100
				3.9	%	$	15,260,300
		Communications Equipment
	380,000	QUALCOMM Inc.		4.3	%	$	17,145,600
		Computer Peripherals
	350,000	Seagate Technology 1		1.0	%	$	4,123,000
		Computers
	270,000	Hewlett-Packard Company				$	11,358,900
	45,000	International Business Machines Corp.					6,036,300
				4.3	%	$	17,395,200
		Data Storage
	2,100,000	Brocade Communications Systems Inc. 1		3.1	%	$	12,264,000
		Electronic Components
	505,000	Corning Inc.		2.3	%	$	9,231,400
		Entertainment
	100,000	The Walt Disney Co.		0.8	%	$	3,311,000
		Financial Services
	350,000	JPMorgan Chase & Co.				$	13,324,500
	70,000	MasterCard Inc.					15,680,000
	470,000	Wells Fargo & Co.					11,811,100
				10.1	%	$	40,815,600
		Home Builders
	1,350,000	DR Horton Inc.				$	15,012,000
	715,000	KB Home					8,100,950
	1,700,000	Pulte Homes Inc. 1					14,892,000
	700,000	Toll Brothers Inc. 1					13,314,000
				12.7	%	$	51,318,950
		Industrial Manufacturing
	260,000	Teleflex Inc.		3.7	%	$	14,762,800
		Insurance
	280,000	Tower Group Inc.		1.6	%	$	6,538,000
		Internet
	400,000	eBay Inc. 1				$	9,760,000
	25,000	Google Inc. 1					13,144,750
	280,000	Yahoo! Inc. 1					3,967,600
				6.7	%	$	26,872,350
		Machinery
	110,000	Deere & Co.		1.9	%	$	7,675,800
		Medical Equipment
	280,000	Medtronic Inc.		2.3	%	$	9,402,400
		Natural Gas
	475,000	Quicksilver Resources Inc. 1		1.5	%	$	5,985,000
		Networking Products
	470,000	Cisco Systems Inc. 1				$	10,293,000
	170,000	Finisar Corp. 1, 3					3,194,300
				3.4	%	$	13,487,300
		Oil & Gas
	900,000	W&T Offshore Inc. 3		2.4	%	$	9,540,000
		Professional Services
	360,000	Administaff Inc.		2.4	%	$	9,694,800
		Retail
	650,000	Lowe's Cos., Inc.				$	14,488,500
	100,000	Target Corp.					5,344,000
	100,000	Walgreen Co.					3,350,000
				5.8	%	$	23,182,500
		Semiconductor Capital Equipment
	1,000,000	Applied Materials Inc.				$	11,680,000
	180,000	Lam Research Corp. 1					7,533,000
				4.8	%	$	19,213,000
		Semiconductors
	105,000	Altera Corp.				$	3,166,800
	660,000	Intel Corp.					12,691,800
	300,000	Texas Instruments Inc.					8,142,000
				6.0	%	$	24,000,600
		Software
	325,000	Adobe Systems Inc. 1				$	8,498,750
	300,000	Autodesk Inc. 1					9,591,000
	300,000	Symantec Corp. 1					4,551,000
	470,000	VeriSign Inc. 1					14,917,800
				9.3	%	$	37,558,550
		Telecommunications Equipment
	1,100,000	Ciena Corp. 1, 3				$	17,127,000
	500,000	Tellabs Inc.					3,725,000
				5.2	%	$	20,852,000
		Total investment in equities
		(cost $366,027,649)		99.5	%	$	399,630,150

Principal Amount $		Short-Term Securities	Percent of Net Assets			Market Value
		Certificates of Deposit 2
	100,000	Albina Community Bank  1.29%, matures 01/24/2011				$	98,729
	100,000	Carver Federal Savings Bank  1.25%, matures 02/04/2011					98,608
	100,000	Community Bank of the Bay  0.75%, matures 09/06/2011					96,263
	100,000	Latino Community Credit Union  1.15%, matures 02/20/2011					98,444
	100,000	Louisville Community Development Bank 0.65%, matures 05/10/2011					97,567
	100,000	Opportunities Credit Union  1.00%, matures 04/25/2011					97,732
	100,000	Self-Help Credit Union  2.05%, matures 01/14/2011					98,850
	100,000	Southern Bancorp 1.50%, matures 01/12/2011					98,872
	100,000	Wainwright Bank & Trust Co.  1.24%, matures 01/30/2011					98,663
				0.2	%	$	883,728
		Community Development Loans 2
	200,000	Boston Community Loan Fund  1.00%, matures 06/30/2011				$	191,024
	200,000	Root Capital Loan Fund  2.00%, matures 03/16/2011					194,510
	100,000	Vermont Community Loan Fund  1.50%, matures 12/15/2010					98,751
				0.1	%	$	484,285
		Time Deposit
	432,871	BBH Cash Management Service
		Citibank, London, 0.03%, due 10/01/2010		0.1	%	$	432,871
		Securities Purchased with Cash Collateral from Securities Lending
		Registered Investment Companies
	12,426,098	Invesco Aim Government & Agency Portfolio
		Short-Term Investments Trust, Institutional Class
		variable rate, 0.11%		3.1	%	$	12,426,098
		Total short-term securities
		(cost $14,226,982)		3.5	%	$	14,226,982
		Total securities
		(cost $380,254,631)		103.0	%	$	413,857,132
		Payable upon return of securities loaned		-3.1	%	$	(12,426,098	)
		Other assets and liabilities - net		0.1	%	$	57,729
		Total net assets		100.0	%	$	401,488,763

1  This security is non-income producing.

2  Market value adjustments have been applied to these securities to reflect early withdrawal.

3  This security, or partial position of this security, was on loan at September 30, 2010.

The total value of the securities on loan at September 30, 2010 was $12,124,385.

Fund holdings will vary over time.

Industry classifications are unaudited.

Fund shares are not FDIC insured.

The portfolio of investments as of September 30, 2010 has not been audited.  This report is provided for the general information of the fund's shareholders.  For more information regarding the fund, portfolio holdings and other significant accounting policies, please see the fund's most recent prospectus and annual report.

Income Taxes:

At September 30, 2010, the net unrealized appreciation (depreciation) based on the cost of long-term investments of securities for income tax purposes was as follows:

	Parnassus
	Fund
Cost of long-term investments	$	368,233,467
Unrealized appreciation	$	40,739,210
Unrealized depreciation		(9,342,527	)
Net unrealized appreciation	$	31,396,683

The Fund's follow accounting standards codification (“ASC”) #820, fair value measurements and disclosure, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Various inputs are used in determining the value of the Funds’ portfolio investments. These inputs are summarized in three levels, Level 1 - quoted prices in active markets for identical investments, Level 2 - other significant observable inputs (including quoted prices for similar investments) and Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).

In January 2010, The FASB issued Accounting Standards Update No. 2010-06 (“ASU 2010-06”), Improving Disclosures about Fair Value Measurements, which, among other things, amends ASC 820 to require entities to separately present purchases, sales, issuances, and settlements in their reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and which clarifies existing disclosure requirements provided by ASC 820  regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy.  ASU 2010-06 is effective for interim and annual periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements (which are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years). The Funds are currently assessing the impact that the adoption of ASU 2010-06 will have on the Funds financial statement disclosures.

The following table summarizes the portfolio's financial assets as of September 30, 2010, that are valued at fair value on a recurring basis:

Investment Securities	Level 1		Level 2		Level 3		Total
Equities:
Consumer Discretionary	$	84,222,450	$	-	$	-	$	84,222,450
Consumer Staples		3,350,000		-		-		3,350,000
Energy		15,525,000		-		-		15,525,000
Financials		47,353,600		-		-		47,353,600
Healthcare		39,425,500		-		-		39,425,500
Information Technology		192,383,000		-		-		192,383,000
Producer Durables		17,370,600		-		-		17,370,600
Short-Term Investments		12,858,969		-		1,368,013		14,226,982
Total	$	412,489,119	$	-	$	1,368,013	$	413,857,132

The following table reconciles the valuation of the Fund's Level 3 investment securities and related transactions as of September 30, 2010.

Balance as of December 31, 2009	$	1,378,738
Discounts/premiums amortization		(10,725	)
Net purchases (sales)		-
Balance as of September 30, 2010	$	1,368,013

P A R N A S S U S   M I D - C A P   F U N D

 Portfolio of Investments as of September 30, 2010 (unaudited)

Shares		Equities	Percent of Net Assets			Market Value
		Apparel
	9,000	Coach Inc.		1.3	%	$	386,640
		Data Processing
	30,000	Equifax Inc.				$	936,000
	20,000	Fiserv Inc. 1					1,076,400
	30,000	Paychex Inc.					824,700
				9.3	%	$	2,837,100
		Financial Services
	70,000	Charles Schwab Corp.				$	973,000
	40,000	Glacier Bancorp Inc.					584,000
	80,000	Hudson City Bancorp Inc.					980,800
	55,000	SEI Investments Co.					1,118,700
				12.0	%	$	3,656,500
		Food Products
	23,000	McCormick & Co.				$	966,920
	38,000	Sysco Corp.					1,083,760
				6.8	%	$	2,050,680
		Healthcare Products
	14,000	DENTSPLY International Inc.		1.5	%	$	447,580
		Healthcare Services
	10,000	Quest Diagnostics Inc.		1.7	%	$	504,700
		Home Builders
	80,000	DR Horton Inc.		2.9	%	$	889,600
		Industrial Manufacturing
	27,500	Cooper Industries PLC				$	1,345,575
	25,000	Pentair Inc.					840,750
	22,000	Teleflex Inc.					1,249,160
				11.3	%	$	3,435,485
		Insurance
	12,000	Aflac Inc.		2.0	%	$	620,520
		Machinery
	6,500	Deere & Co.				$	453,570
	26,000	IDEX Corp.					923,260
				4.5	%	$	1,376,830
		Medical Equipment
	7,500	C. R. Bard Inc.				$	610,725
	20,500	Gen-Probe Inc. 1					993,430
	34,250	Patterson Companies Inc.					981,263
				8.5	%	$	2,585,418
		Natural Gas
	15,000	Energen Corp.				$	685,800
	40,000	MDU Resources Group Inc.					798,000
	18,000	Southwestern Energy Co. 1					601,920
	27,500	Spectra Energy Corp.					620,125
				8.9	%	$	2,705,845
		Oil & Gas
	10,000	Noble Corp.				$	337,900
	4,500	Pioneer Natural Resources Co.					292,635
	11,500	Ultra Petroleum Corp. 1					482,770
				3.7	%	$	1,113,305
		Pharmaceuticals
	50,000	Valeant Pharmaceuticals International 3		4.1	%	$	1,252,500
		Professional Services
	24,000	Administaff Inc.		2.1	%	$	646,320
		Retail
	11,000	Nordstrom Inc.		1.3	%	$	409,200
		Semiconductor Capital Equipment
	25,000	Applied Materials Inc.		1.0	%	$	292,000
		Services
	17,500	Ecolab Inc.		2.9	%	$	887,950
		Software
	35,000	Adobe Systems Inc. 1				$	915,250
	9,500	Check Point Software Technologies Ltd. 1					350,835
	40,000	Symantec Corp. 1					606,800
	22,000	Synopsys Inc. 1					544,940
				8.0	%	$	2,417,825
		Waste Management
	40,000	Waste Management Inc.		4.7	%	$	1,429,600
		Total investment in equities
		(cost $27,065,585)		98.5	%	$	29,945,598

Principal Amount $		Short-Term Securities	Percent of Net Assets			Market Value
		Time Deposit
	1,540,565	BBH Cash Management Service
		Citibank, London, 0.03%, due 10/01/2010		5.1	%	$	1,540,565
		Securities Purchased with Cash Collateral from Securities Lending
		Registered Investment Companies
	703,794	Invesco Aim Government & Agency Portfolio
		Short-Term Investments Trust, Institutional Class
		variable rate, 0.11%		2.3	%	$	703,794
		Total short-term securities
		(cost $2,244,359)		7.4	%	$	2,244,359
		Total securities
		(cost $29,309,944)		105.9	%	$	32,189,957
		Payable upon return of securities loaned		-2.3	%	$	(703,794	)
		Other assets and liabilities - net		-3.6	%	$	(1,072,998	)
		Total net assets		100.0	%	$	30,413,165

1  This security is non-income producing.

2  Market value adjustments have been applied to these securities to reflect early withdrawal.

3  This security, or partial position of this security, was on loan at September 30, 2010.

The total value of the securities on loan at September 30, 2010 was $687,282.

Fund holdings will vary over time.

Industry classifications are unaudited.

Fund shares are not FDIC insured.

The portfolio of investments as of September 30, 2010 has not been audited.  This report is provided for the general information of the fund's shareholders.  For more information regarding the fund, portfolio holdings and other significant accounting policies, please see the fund's most recent prospectus and annual report.

Income Taxes:

At September 30, 2010, the net unrealized appreciation (depreciation) based on the cost of long-term investments of securities for income tax purposes was as follows:

	Parnassus
	Mid-Cap Fund
Cost of long-term investments	$	27,146,718
Unrealized appreciation	$	3,169,974
Unrealized depreciation		(371,094	)
Net unrealized appreciation	$	2,798,880

The Fund's follow accounting standards codification (“ASC”) #820, fair value measurements and disclosure, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Various inputs are used in determining the value of the Funds’ portfolio investments. These inputs are summarized in three levels, Level 1 - quoted prices in active markets for identical investments, Level 2 - other significant observable inputs (including quoted prices for similar investments) and Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).

In January 2010, The FASB issued Accounting Standards Update No. 2010-06 (“ASU 2010-06”), Improving Disclosures about Fair Value Measurements, which, among other things, amends ASC 820 to require entities to separately present purchases, sales, issuances, and settlements in their reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and which clarifies existing disclosure requirements provided by ASC 820  regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy.  ASU 2010-06 is effective for interim and annual periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements (which are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years). The Funds are currently assessing the impact that the adoption of ASU 2010-06 will have on the Funds financial statement disclosures.

The following table summarizes the portfolio's financial assets as of September 30, 2010, that are valued at fair value on a recurring basis:

Investment Securities	Level 1		Level 2		Level 3		Total
Equities:
Consumer Discretionary	$	1,685,440	$	-	$	-	$	1,685,440
Consumer Staples		2,050,680		-		-		2,050,680
Energy		2,335,350		-		-		2,335,350
Financials		4,277,020		-		-		4,277,020
Healthcare		6,039,358		-		-		6,039,358
Industrials		6,575,075		-		-		6,575,075
Information Technology		4,610,925		-		-		4,610,925
Materials & Processing		887,950		-		-		887,950
Utilities		1,483,800		-		-		1,483,800
Short-Term Investments		2,244,359		-		-		2,244,359
Total	$	32,189,957	$	-	$	-	$	32,189,957

P A R N A S S U S   S M A L L - C A P   F U N D

 Portfolio of Investments as of September 30, 2010 (unaudited)

Shares		Equities	Percent of Net Assets			Market Value
		Biotechnology
	55,000	Bio-Rad Laboratories Inc. 1		1.9	%	$	4,978,050
		Building Materials
	45,000	Simpson Manufacturing Co., Inc.		0.4	%	$	1,160,100
		Chemicals
	40,000	Compass Minerals International Inc.		1.1	%	$	3,064,800
		Computer Peripherals
	876,365	Electronics for Imaging Inc. 1		4.0	%	$	10,621,544
		Data Processing
	230,000	Jack Henry & Associates Inc.		2.2	%	$	5,865,000
		Data Storage
	2,000,000	Brocade Communications Systems Inc. 1		4.4	%	$	11,680,000
		Electronics
	55,000	Analogic Corp.		0.9	%	$	2,468,400
		Financial Services
	40,000	Glacier Bancorp Inc.				$	584,000
	325,000	SEI Investments Co.					6,610,500
				2.8	%	$	7,194,500
		Healthcare Services
	500,000	LHC Group Inc. 1		4.3	%	$	11,595,000
		Home Builders
	140,000	DR Horton Inc.				$	1,556,800
	700,000	KB Home					7,931,000
	325,000	PulteGroup Inc. 1					2,847,000
	510,000	Toll Brothers Inc. 1					9,700,200
				8.3	%	$	22,035,000
		Industrial Manufacturing
	210,000	Teleflex Inc.		4.5	%	$	11,923,800
		Insurance
	370,000	Tower Group Inc.		3.2	%	$	8,639,500
		Machinery
	110,000	Graco Inc.		1.3	%	$	3,490,300
		Medical Equipment
	400,000	Cyberonics Inc. 1				$	10,672,000
	100,000	Gen-Probe Inc. 1					4,846,000
				5.8	%	$	15,518,000
		Natural Gas
	740,000	Quicksilver Resources Inc. 1		3.5	%	$	9,324,000
		Networking Products
	400,000	Finisar Corp. 1, 3		2.8	%	$	7,516,000
		Oil & Gas
	140,000	SM Energy Co.				$	5,244,400
	880,000	W&T Offshore Inc.					9,328,000
				5.5	%	$	14,572,400
		Pharmaceuticals
	151,376	Valeant Pharmaceuticals International 3		1.4	%	$	3,791,969
		Professional Services
	440,000	Administaff Inc.		4.4	%	$	11,849,200
		Retail
	60,000	Nash Finch Co.		1.0	%	$	2,552,400
		Semiconductor Capital Equipment
	140,000	Cognex Corp.				$	3,754,800
	200,000	Cymer Inc. 1					7,416,000
				4.3	%	$	11,170,800
		Services
	250,000	Arbitron Inc.		2.6	%	$	6,992,500
		Software
	1,150,000	ClickSoftware Technologies Ltd. 1				$	7,532,500
	780,000	Mentor Graphics Corp. 1					8,244,600
	200,000	VeriSign Inc. 1					6,348,000
	425,000	Websense Inc. 1					7,539,500
				11.1	%	$	29,664,600
		Telecommunications Equipment
	1,200,000	Ceragon Networks Ltd. 1				$	11,868,000
	600,000	Ciena Corp. 1, 3					9,342,000
	420,000	Harmonic Inc. 1					2,889,600
	1,400,000	Tellabs Inc.					10,430,000
				12.9	%	$	34,529,600
		Total investment in equities
		(cost $228,559,958)		94.6	%	$	252,197,463

Principal Amount $		Short-Term Securities	Percent of Net Assets			Market Value
		Time Deposit
	15,198,435	BBH Cash Management Service
		Wells Fargo, Grand Cayman, 0.03%, due 10/01/2010		5.7	%	$	15,198,435
		Securities Purchased with Cash Collateral from Securities Lending
		Registered Investment Companies
	20,577,229	Invesco Aim Government & Agency Portfolio
		Short-Term Investments Trust, Institutional Class
		variable rate, 0.11%		7.7	%	$	20,577,229
		Total short-term securities
		(cost $35,775,664)		13.4	%	$	35,775,664
		Total securities
		(cost $264,335,622)		108.0	%	$	287,973,127
		Payable upon return of securities loaned		-7.7	%	$	(20,577,229	)
		Other assets and liabilities - net		-0.3	%	$	(680,825	)
		Total net assets		100.0	%	$	266,715,073

1  This security is non-income producing.

2  Market value adjustments have been applied to these securities to reflect early withdrawal.

3  This security, or partial position of this security, was on loan at September 30, 2010.

The total value of the securities on loan at September 30, 2010 was $20,020,179.

Fund holdings will vary over time.

Industry classifications are unaudited.

Fund shares are not FDIC insured.

The portfolio of investments as of September 30, 2010 has not been audited.  This report is provided for the general information of the fund's shareholders.  For more information regarding the fund, portfolio holdings and other significant accounting policies, please see the fund's most recent prospectus and annual report.

Income Taxes:

At September 30, 2010, the net unrealized appreciation (depreciation) based on the cost of long-term investments of securities for income tax purposes was as follows:

	Parnassus
	Small-Cap Fund
Cost of long-term investments	$	229,198,637
Unrealized appreciation	$	29,543,594
Unrealized depreciation		(6,544,768	)
Net unrealized appreciation	$	22,998,826

The Fund's follow accounting standards codification (“ASC”) #820, fair value measurements and disclosure, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Various inputs are used in determining the value of the Funds’ portfolio investments. These inputs are summarized in three levels, Level 1 - quoted prices in active markets for identical investments, Level 2 - other significant observable inputs (including quoted prices for similar investments) and Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).

In January 2010, The FASB issued Accounting Standards Update No. 2010-06 (“ASU 2010-06”), Improving Disclosures about Fair Value Measurements, which, among other things, amends ASC 820 to require entities to separately present purchases, sales, issuances, and settlements in their reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and which clarifies existing disclosure requirements provided by ASC 820  regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy.  ASU 2010-06 is effective for interim and annual periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements (which are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years). The Funds are currently assessing the impact that the adoption of ASU 2010-06 will have on the Funds financial statement disclosures.

The following table summarizes the portfolio's financial assets as of September 30, 2010, that are valued at fair value on a recurring basis:

Investment securities	Level 1		Level 2		Level 3		Total
Equities:
Consumer Discretionary	$	29,027,500	$	-	$	-	$	29,027,500
Consumer Staples		2,552,400		-		-		2,552,400
Energy		23,896,400		-		-		23,896,400
Financials		21,699,000		-		-		21,699,000
Healthcare		50,275,219		-		-		50,275,219
Information Technology		94,561,000		-		-		94,561,000
Materials & Processing		4,224,900		-		-		4,224,900
Producer Durables		25,961,044		-		-		25,961,044
Short-Term Investments		35,775,664		-		-		35,775,664
Total	$	287,973,127	$	-	$	-	$	287,973,127

P A R N A S S U S   W O R K P L A C E   F U N D

 Portfolio of Investments as of September 30, 2010 (unaudited)

Shares		Equities	Percent of Net Assets			Market Value
		Biotechnology
	30,000	Bio-Rad Laboratories Inc. 1				$	2,715,300
	65,000	Genzyme Corp. 1					4,601,350
				6.1	%	$	7,316,650
		Communications Equipment
	180,000	QUALCOMM Inc.		6.8	%	$	8,121,600
		Computer Peripherals
	20,000	Seagate Technology 1		0.2	%	$	235,600
		Computers
	90,000	Hewlett-Packard Company				$	3,786,300
	40,000	International Business Machines Corp.					5,365,600
				7.6	%	$	9,151,900
		Consulting Services
	40,000	Accenture PLC		1.4	%	$	1,699,600
		Data Processing
	90,000	Paychex Inc.		2.1	%	$	2,474,100
		Data Storage
	820,000	Brocade Communications Systems Inc. 1		4.0	%	$	4,788,800
		Electronic Components
	275,000	Corning Inc.		4.2	%	$	5,027,000
		Entertainment
	35,000	The Walt Disney Co.		1.0	%	$	1,158,850
		Financial Services
	25,000	MasterCard Inc.				$	5,600,000
	200,000	SEI Investments Co.					4,068,000
	15,000	Wells Fargo & Co.					376,950
				8.3	%	$	10,044,950
		Footwear
	15,000	Nike Inc.		1.0	%	$	1,202,100
		Internet
	265,000	eBay Inc. 1				$	6,466,000
	11,000	Google Inc. 1					5,783,690
	250,000	Yahoo! Inc. 1					3,542,500
				13.1	%	$	15,792,190
		Machinery
	60,000	Deere & Co.				$	4,186,800
	40,000	Graco Inc.					1,269,200
				4.6	%	$	5,456,000
		Medical Equipment
	115,000	Medtronic Inc.		3.2	%	$	3,861,700
		Natural Gas
	210,000	MDU Resources Group Inc.		3.5	%	$	4,189,500
		Networking Products
	180,000	Cisco Systems Inc. 1		3.3	%	$	3,942,000
		Oil & Gas
	55,000	Devon Energy Corp.		3.0	%	$	3,560,700
		Professional Services
	50,000	Administaff Inc.		1.1	%	$	1,346,500
		Retail
	190,000	Lowe's Cos., Inc.				$	4,235,100
	100,000	Walgreen Co.					3,350,000
				6.2	%	$	7,585,100
		Semiconductor Capital Equipment
	410,000	Applied Materials Inc.		4.0	%	$	4,788,800
		Semiconductors
	60,000	Altera Corp.				$	1,809,600
	270,000	Intel Corp.					5,192,100
	90,000	Texas Instruments Inc.					2,442,600
				7.8	%	$	9,444,300
		Software
	120,000	Adobe Systems Inc. 1				$	3,138,000
	70,000	Autodesk Inc. 1					2,237,900
	180,000	Symantec Corp. 1					2,730,600
				6.8	%	$	8,106,500
		Total investment in equities
		(cost $110,813,186)		99.3	%	$	119,294,440

Principal Amount $		Short-Term Securities	Percent of Net Assets			Market Value
		Time Deposit
	730,967	BBH Cash Management Service
		Citibank, London, 0.03%, due 10/01/2010		0.6	%	$	730,967
		Total short-term securities
		(cost $730,967)		0.6	%	$	730,967
		Total securities
		(cost $111,544,153)		99.9	%	$	120,025,407
		Other assets and liabilities - net		0.1	%	$	66,009
		Total net assets		100.0	%	$	120,091,416

1  This security is non-income producing.

Fund holdings will vary over time.

Industry classifications are unaudited.

Fund shares are not FDIC insured.

The portfolio of investments as of September 30, 2010 has not been audited.  This report is provided for the general information of the fund's shareholders.  For more information regarding the fund, portfolio holdings and other significant accounting policies, please see the fund's most recent prospectus and annual report.

Income Taxes:

At September 30, 2010, the net unrealized appreciation (depreciation) based on the cost of long-term investments of securities for income tax purposes was as follows:

	Parnassus
	Workplace Fund
Cost of long-term investments	$	110,973,618
Unrealized appreciation	$	10,157,400
Unrealized depreciation		(1,836,578	)
Net unrealized appreciation	$	8,320,822

The Fund's follow accounting standards codification (“ASC”) #820, fair value measurements and disclosure, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Various inputs are used in determining the value of the Funds’ portfolio investments. These inputs are summarized in three levels, Level 1 - quoted prices in active markets for identical investments, Level 2 - other significant observable inputs (including quoted prices for similar investments) and Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).

In January 2010, The FASB issued Accounting Standards Update No. 2010-06 (“ASU 2010-06”), Improving Disclosures about Fair Value Measurements, which, among other things, amends ASC 820 to require entities to separately present purchases, sales, issuances, and settlements in their reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and which clarifies existing disclosure requirements provided by ASC 820  regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy.  ASU 2010-06 is effective for interim and annual periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements (which are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years). The Funds are currently assessing the impact that the adoption of ASU 2010-06 will have on the Funds financial statement disclosures.

The following table summarizes the portfolio's financial assets as of September 30, 2010, that are valued at fair value on a recurring basis:

Investment Securities	Level 1		Level 2		Level 3		Total
Equities:
Consumer Discretionary	$	13,062,050	$	-	$	-	$	13,062,050
Consumer Staples		3,350,000		-		-		3,350,000
Energy		3,560,700		-		-		3,560,700
Financials		10,044,950						10,044,950
Healthcare		11,178,350		-		-		11,178,350
Producer Durables		10,976,200		-		-		10,976,200
Information Technology		62,932,690		-		-		62,932,690
Utilities		4,189,500		-		-		4,189,500
Short-Term Investments		730,967		-		-		730,967
Total	$	120,025,407	$	-	$	-	$	120,025,407

ITEM 2. CONTROLS AND PROCEDURES.

(a) The Registrant’s Principal Executive Officer and Principal Financial Officer concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (17 CFR 270.30a-3(c))) were effective as of a date within 90 days prior to the filing date of this report (the “Evaluation Date”), based on their evaluation of the effectiveness of the Registrant’s disclosure controls and procedures as of the Evaluation Date.

(b) There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 (17 CFR 270.30a-3(d)) that occurred during the Registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

ITEM 3. EXHIBITS.

The certification of Principal Executive Officer and the certification of Principal Financial Officer of the Registrant as required by Rule 30a-2(a) under Act (17 CFR 270.30a-2(a)) is attached hereto as Exhibit 99.CERT.

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) Parnassus Funds

By:	/s/ Jerome L. Dodson
	Jerome L. Dodson Principal Executive Officer
Date:	November 18, 2010

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

By:	/s/ Jerome L. Dodson
	Jerome L. Dodson Principal Executive Officer
Date:	November 18, 2010

By:	/s/  Marc C. Mahon
	Marc C. Mahon Principal Financial Officer
Date:	November 18, 2010