SECURITIES AND EXCHANGE COMMISSION

                    Washington, D.C.  20549


                            FORM 8-K

                         CURRENT REPORT

             Pursuant to Section 13 or 15(d) of the
                Securities Exchange Act of 1934

Date of Report (Earliest Event Reported):  July 17, 1997

Exact name of Registrant
 as specified in its charter:  The Diana Corporation

State or Other Jurisdiction of Incorporation:  Delaware

Commission File Number:  1-5486

I.R.S. Employer Identification Number:  36-2448698

Address of Principal Executive Office:  26025 Mureau Road        
                                        Calabasas, CA 91302
                                        
Registrant's Telephone Number, Including Area Code:  (818) 878-7711

ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS                        

(c)  Exhibits

     4.1  Form of Subscription Agreement
     4.2  Form of Note
     4.3  Form of Registration Rights Agreement
     4.4  Offshore Warrant Subscription Agreement


ITEM 9.  SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S

(a)  Securities sold.  On July 17, 1997, the Registrant sold
     $2,500,000 in 8% Convertible Notes ("Notes") Due July 17,
     2000.  At any time commencing one year after the Closing, the
     Company may, by written notice to the Holder, prepay the Notes
     in whole or in part.  The notice shall be given at least ten
     (10) days prior to the payment date and on such date the
     Company shall pay the outstanding principal and all accrued
     interest on the Note, unless prior to such payment date the
     Holder has delivered a Notice of Conversion.

(b)  Underwriters and other purchasers.  First Bermuda Securities
     Limited, Chevron House, 11 Church Street, Hamilton HM 11,
     Hamilton HM NX, Bermuda, acting as placement agent,
     distributor and escrow agent, received executed subscription


                              1
<PAGE>

     agreements for the purchase of the notes from the following;
     Offshore Investments Fund Ltd. ($250,000), Offshore Nominees
     Limited ($250,000), Buckingham Global Investors ($500,000),
     and Mid Ocean Capital, S. A. ($1,500,000).

(c)  Consideration.  The aggregate offering price of the Notes was
     $2,500,000.  Commissions totaling $250,000 and expenses of
     $15,000 where deducted resulting in net proceeds to the
     Registrant of $2,235,000.  In addition, First Bermuda
     Securities Limited received warrants to purchase 37,037 shares
     of Common Stock at an exercise price of $6.75 per share. 
     These warrants are execrable after 41 days of issuance and
     expire on July 17, 2000.  The holder of the warrants also
     received registration rights which are substantially the same
     as those given to the purchasers of the Notes. 

(d)  Exemption from registration claimed.  The Registrant claims
     exemption from registration pursuant to Regulation S under the
     Securities Act of 1933 as amended.  In so doing, the
     Registrant has relied upon the representations made by the
     purchasers of the Notes and First Bermuda Securities Limited
     acting as placement agent, distributor and escrow agent. 
     These representations include representation as to the
     purchasers status as non US persons.

(e)  Terms of conversion or exercise.  The holder of the Note(s) is
     entitled, at its option, at any time commencing forty-five
     (45) days after the Closing Date (July 17, 1997), until
     maturity to convert one-third (1/3 rd) or any lesser portion
     of the initial principal amount which is a least $25,000 into
     shares of Common Stock ("Shares") at a conversion price for
     each Share equal to the lesser of $ 6.64 per share or eighty
     percent (80%) of the average closing bid price of the Common
     Stock for the five (5) trading days immediately prior to the
     Conversion Date with a conversion floor price (the "Conversion
     Floor Price") of $1.50 per Share (Collectively, the
     "Conversion Price"); beginning seventy-five (75) days after
     the Closing Date, an additional one third (1/3 rd) of the
     initial principal amount which is at least $25,000 may be
     converted into Shares at the Conversion Price; and beginning
     one hundred and five (105) days after the Closing Date, the
     remaining one-third (1/3 rd) of the initial principal amount
     which is at least $25,000 may be converted into Shares at the
     Conversion Price, provided that if the average of the closing
     bid price of the Common Stock for the twenty (20) consecutive
     trading days immediately prior to a conversion date is less
     than $1.50 per share, the Conversion Floor Price will be
     adjusted to equal eighty percent (80%) of such twenty (20)
     consecutive trading day average of the closing bid price,
     provided, however, that in no event shall the Holder be
     entitled to convert any portion of the Note in excess of that
     portion of the Note upon conversion of which the sum of (1)
     the number of shares of Common Stock beneficially owned by the
     holder and its affiliates (other than shares of Common Stock

                              2
<PAGE>

     which may be deemed beneficially owned through the ownership
     of the unconverted portion of this note, as defined in the
     Subscription Agreement) and (2) the number of Shares issuable
     upon the conversion of the portion of the note with respect to
     which the determination of this proviso is being made, would
     result in beneficial ownership by the holder and its
     affiliates of more than 4.9% of the outstanding shares.  For
     purposes of the proviso to the immediately proceeding
     sentence, beneficial ownership shall be determined in
     accordance with Section 13(d) of the Securities Exchange Act
     of 1934, as amended, and Regulation 13 D-G thereunder, except
     as otherwise provided in clause (1) of such proviso.  In
     addition, if at any time, there occurs a transaction in which
     in excess of 50% of the Company's voting power is transferred
     (excluding any public or private offering of Company equity
     securities), including any consolidation or merger of the
     Company with or into any other corporation or other entity or
     person (whether or not the Company is the surviving
     corporation), or any other corporate reorganization or
     transaction or series of transactions, the holder of the note
     then outstanding may participate in any such transaction as a
     class with the common stockholders on the same basis as if the
     note had been converted one day prior to the effective date of
     the transaction; provided, however, that at the option of the
     holder of the note, such holder may treat the effective date
     of any transaction that occurs prior to July 17, 2000 as a
     redemption of the note at a price equal to 125% of the
     outstanding principal amount of the note, plus accrued but
     unpaid interest.  The holder shall be entitled to make such
     election at any time up to ten (10) days prior to the
     effective date of the transaction.  The Company has entered
     into a registration rights agreement with the Purchasers of
     the Notes wherein, upon a decision to convert by the
     Purchasers of the Notes, and if the Shares are required to be
     registered, the Shares will be registered with the Securities
     and Exchange Commission pursuant to Securities Act of 1933, as
     amended. 


                           SIGNATURES

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

                                 THE DIANA CORPORATION
                                      (Registrant)


Date:  July 31, 1997             /s/ James J. Fiedler
                                     Chairman and Chief Executive
                                     Officer


                              3
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SECURITIES AND EXCHANGE COMMISSION

                    Washington, D.C.  20549

                            FORM 8-K

                         CURRENT REPORT

             Pursuant to Section 13 or 15(d) of the
                Securities Exchange Act of 1934

Date of Report (Earliest Event Reported):  July 17, 1997

Exact name of Registrant
 as specified in its charter:  The Diana Corporation

State or Other Jurisdiction of Incorporation:  Delaware

Commission File Number:  1-5486

I.R.S. Employer Identification Number:  36-2448698

Address of Principal Executive Office:  26025 Mureau Road        
                                        Calabasas, CA 91302
                                        
Registrant's Telephone Number, Including Area Code:  (818) 878-7711

ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS                        

(c)  Exhibits

     4.1  Form of Subscription Agreement
     4.2  Form of Note
     4.3  Form of Registration Rights Agreement
     4.4  Offshore Warrant Subscription Agreement

ITEM 9.  SALES OF EQUITY SECURITIES PURSUANT TO REGULATION S

(a)  Securities sold.  On July 17, 1997, the Registrant sold
     $2,500,000 in 8% Convertible Notes ("Notes") Due July 17,
     2000.  At any time commencing one year after the Closing, the
     Company may, by written notice to the Holder, prepay the Notes
     in whole or in part.  The notice shall be given at least ten
     (10) days prior to the payment date and on such date the
     Company shall pay the outstanding principal and all accrued
     interest on the Note, unless prior to such payment date the
     Holder has delivered a Notice of Conversion.

(b)  Underwriters and other purchasers.  First Bermuda Securities
     Limited, Chevron House, 11 Church Street, Hamilton HM 11,
     Hamilton HM NX, Bermuda, acting as placement agent,
     distributor and escrow agent, received executed subscription

                              1
agreements for the purchase of the notes from the following;
     Offshore Investments Fund Ltd. ($250,000), Offshore Nominees
     Limited ($250,000), Buckingham Global Investors ($500,000),
     and Mid Ocean Capital, S. A. ($1,500,000).

(c)  Consideration.  The aggregate offering price of the Notes was
     $2,500,000.  Commissions totaling $250,000 and expenses of
     $15,000 where deducted resulting in net proceeds to the
     Registrant of $2,235,000.  In addition, First Bermuda
     Securities Limited received warrants to purchase 37,037 shares
     of Common Stock at an exercise price of $6.75 per share. 
     These warrants are execrable after 41 days of issuance and
     expire on July 17, 2000.  The holder of the warrants also
     received registration rights which are substantially the same
     as those given to the purchasers of the Notes. 

(d)  Exemption from registration claimed.  The Registrant claims
     exemption from registration pursuant to Regulation S under the
     Securities Act of 1933 as amended.  In so doing, the
     Registrant has relied upon the representations made by the
     purchasers of the Notes and First Bermuda Securities Limited
     acting as placement agent, distributor and escrow agent. 
     These representations include representation as to the
     purchasers status as non US persons.

(e)  Terms of conversion or exercise.  The holder of the Note(s) is
     entitled, at its option, at any time commencing forty-five
     (45) days after the Closing Date (July 17, 1997), until
     maturity to convert one-third (1/3 rd) or any lesser portion
     of the initial principal amount which is a least $25,000 into
     shares of Common Stock ("Shares") at a conversion price for
     each Share equal to the lesser of $ 6.64 per share or eighty
     percent (80%) of the average closing bid price of the Common
     Stock for the five (5) trading days immediately prior to the
     Conversion Date with a conversion floor price (the "Conversion
     Floor Price") of $1.50 per Share (Collectively, the
     "Conversion Price"); beginning seventy-five (75) days after
     the Closing Date, an additional one third (1/3 rd) of the
     initial principal amount which is at least $25,000 may be
     converted into Shares at the Conversion Price; and beginning
     one hundred and five (105) days after the Closing Date, the
     remaining one-third (1/3 rd) of the initial principal amount
     which is at least $25,000 may be converted into Shares at the
     Conversion Price, provided that if the average of the closing
     bid price of the Common Stock for the twenty (20) consecutive
     trading days immediately prior to a conversion date is less
     than $1.50 per share, the Conversion Floor Price will be
     adjusted to equal eighty percent (80%) of such twenty (20)
     consecutive trading day average of the closing bid price,
     provided, however, that in no event shall the Holder be
     entitled to convert any portion of the Note in excess of that
     portion of the Note upon conversion of which the sum of (1)
     the number of shares of Common Stock beneficially owned by the
     holder and its affiliates (other than shares of Common Stock

                              2
which may be deemed beneficially owned through the ownership
     of the unconverted portion of this note, as defined in the
     Subscription Agreement) and (2) the number of Shares issuable
     upon the conversion of the portion of the note with respect to
     which the determination of this proviso is being made, would
     result in beneficial ownership by the holder and its
     affiliates of more than 4.9% of the outstanding shares.  For
     purposes of the proviso to the immediately proceeding
     sentence, beneficial ownership shall be determined in
     accordance with Section 13(d) of the Securities Exchange Act
     of 1934, as amended, and Regulation 13 D-G thereunder, except
     as otherwise provided in clause (1) of such proviso.  In
     addition, if at any time, there occurs a transaction in which
     in excess of 50% of the Company's voting power is transferred
     (excluding any public or private offering of Company equity
     securities), including any consolidation or merger of the
     Company with or into any other corporation or other entity or
     person (whether or not the Company is the surviving
     corporation), or any other corporate reorganization or
     transaction or series of transactions, the holder of the note
     then outstanding may participate in any such transaction as a
     class with the common stockholders on the same basis as if the
     note had been converted one day prior to the effective date of
     the transaction; provided, however, that at the option of the
     holder of the note, such holder may treat the effective date
     of any transaction that occurs prior to July 17, 2000 as a
     redemption of the note at a price equal to 125% of the
     outstanding principal amount of the note, plus accrued but
     unpaid interest.  The holder shall be entitled to make such
     election at any time up to ten (10) days prior to the
     effective date of the transaction.  The Company has entered
     into a registration rights agreement with the Purchasers of
     the Notes wherein, upon a decision to convert by the
     Purchasers of the Notes, and if the Shares are required to be
     registered, the Shares will be registered with the Securities
     and Exchange Commission pursuant to Securities Act of 1933, as
     amended. 

                           SIGNATURES

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

                                 THE DIANA CORPORATION
                                      (Registrant)

Date:  July 31, 1997             /s/ James J. Fiedler
                                     Chairman and Chief Executive
                                     Officer

                              3