UNITED STATES
                        SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC 20549

                                   ____________


                                     Form 8-K

                                  CURRENT REPORT

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

                        Date of Report: January 29, 2001


                                DYNEX CAPITAL, INC.
                  (Exact Name of Registrant as Specified in Charter)


Virginia                         1-9819                         52-1549373
(State or Other         (Commission File Number)               (IRS Employer
Jurisdiction of                                             Identification No.)
Incorporation)

    4551 Cox Road, Suite 300, Glen Allen, Virginia               23060
       (Address of Principal Executive Offices)                (Zip Code)


                                 (804) 217-5800
                (Registrant's telephone number, including area code)




Item 5.       OTHER EVENTS.


     On  January  26,  2001,  the  Company  delivered  a  letter  to  California
Investment  Fund, LLC ("CIF")  notifying CIF that, in accordance  with the terms
and  conditions of the  Agreement and Plan of Merger dated  November 7, 2000, as
amended,  the Company was exercising its right to terminate the Agreement due to
CIF's failure to comply with certain terms of the Agreement.

     Additionally,  the  Company  has made a claim  under the  Escrow  Agreement
between the parties for the Escrow Amount.





Item 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

(c)      Exhibits

99.1     Dynex Capital, Inc. Press Release, dated January 26, 2001.

99.2     Letter, dated January 26, 2001, to California Investment Fund LLC from
         Dynex Capital, Inc.







                                   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 hereunto duly authorized.


Date:    January 29, 2001              DYNEX CAPITAL, INC.


                                       By: /s/
                                          Thomas H. Potts
                                          President






                                  EXHIBIT INDEX

Number            Description                                  Method of Filing

99.1              Dynex Capital, Inc. Press Release,           Filed herewith
                  dated January 26, 2001.

99.2              Letter, dated January 26, 2001, to           Filed herewith
                  California Investment Fund, LLC from
                  Dynex Capital, Inc.





                                                                   Exhibit  99.1

[ Company Logo ]

                                  Press Release

FOR IMMEDIATE RELEASE                                   CONTACT: Kathy Fern
January 26, 2001                                                 804-217-5800


                              DYNEX CAPITAL, INC.
                     TERMINATES AGREEMENT AND PLAN OF MERGER
                         WITH CALIFORNIA INVESTMENT FUND


     Dynex Capital,  Inc.  (NYSE:  DX) announced today that it has exercised its
right to terminate the Agreement and Plan of Merger  entered into by the Company
and  California  Investment  Fund,  LLC on  November  7, 2000,  as  amended,  in
accordance with the terms and conditions of said Agreement for failure to comply
with certain  terms of the  Agreement.  In addition,  the Company has made claim
under the Escrow Agreement between the parties for the Escrow Amount.

     Dynex  Capital,  Inc. is a  financial  services  company  that elects to be
treated  as a real  estate  investment  trust  (REIT)  for  federal  income  tax
purposes.
                                     # # #







                                                                   Exhibit  99.2

[Company Logo ]
                                                     Dynex Capital, Inc.
                                                     4551 Cox Road, Suite 300
                                                     Glen Allen, Virginia 23060
                                                     804-217-5800
                                                     Fax 804-217-5861


January 26, 2001


VIA FACSIMILE AND CERTIFIED MAIL

California Investment Fund, LLC
550 West C Street
10th Floor
San Diego, CA 92101

Attention:  Michael R. Kelly, Managing Member

Re: Merger Agreement dated November 7, 2000

Dear Mr. Kelly:

     Reference is made to the  Agreement  and Plan of Merger  dated  November 7,
2000, as amended ("Merger  Agreement")  between California  Investment Fund, LLC
("CIF"),  DCI Acquisition  Corporation and Dynex Capital,  Inc. ("Dynex") and to
the letter  dated  December  22,  2000  between  Dynex and CIF  ("December  22nd
Letter").  Dynex  hereby  notifies  you that  Dynex is  terminating  the  Merger
Agreement for CIF's breaches of its obligations under numbered  paragraphs 2 and
3 of the December  22nd Letter and  pursuant to Section  7(a)(vii) of the Merger
Agreement.

Very truly yours,

DYNEX CAPITAL, INC.



By /s/
  Stephen J. Benedetti
  Vice President, Treasurer

cc:      Stephen Fraidin, Esquire
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{"company-data": {"conformed-name": "DYNEX CAPITAL INC", "cik": "0000826675", "assigned-sic": "6798", "irs-number": "521549373", "state-of-incorporation": "VA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-09819", "film-number": "1517428"}, "business-address": {"street1": "4551 COX RD", "street2": "STE 300", "city": "GLEN ALLEN", "state": "VA", "zip": "23060", "phone": "8049675800"}, "mail-address": {"street1": "4551 COX RD", "street2": "STE 300", "city": "GLEN ALLEN", "state": "VA", "zip": "23060"}, "former-company": [{"former-conformed-name": "RESOURCE MORTGAGE CAPITAL INC/VA", "date-changed": "19930722"}, {"former-conformed-name": "RESOURCE MORTGAGE INVESTMENT CORP", "date-changed": "19930505"}, {"former-conformed-name": "RAC MORTGAGE INVESTMENT CORP /VA/", "date-changed": "19930505"}]}
UNITED STATES
                        SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC 20549

                                   ____________

                                     Form 8-K

                                  CURRENT REPORT

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

                        Date of Report: January 29, 2001

                                DYNEX CAPITAL, INC.
                  (Exact Name of Registrant as Specified in Charter)

Virginia                         1-9819                         52-1549373
(State or Other         (Commission File Number)               (IRS Employer
Jurisdiction of                                             Identification No.)
Incorporation)

    4551 Cox Road, Suite 300, Glen Allen, Virginia               23060
       (Address of Principal Executive Offices)                (Zip Code)

                                 (804) 217-5800
                (Registrant's telephone number, including area code)

Item 5.       OTHER EVENTS.

     On  January  26,  2001,  the  Company  delivered  a  letter  to  California
Investment  Fund, LLC ("CIF")  notifying CIF that, in accordance  with the terms
and  conditions of the  Agreement and Plan of Merger dated  November 7, 2000, as
amended,  the Company was exercising its right to terminate the Agreement due to
CIF's failure to comply with certain terms of the Agreement.

     Additionally,  the  Company  has made a claim  under the  Escrow  Agreement
between the parties for the Escrow Amount.

Item 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

(c)      Exhibits

99.1     Dynex Capital, Inc. Press Release, dated January 26, 2001.

99.2     Letter, dated January 26, 2001, to California Investment Fund LLC from
         Dynex Capital, Inc.

                                   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 hereunto duly authorized.

Date:    January 29, 2001              DYNEX CAPITAL, INC.

                                       By: /s/
                                          Thomas H. Potts
                                          President

                                  EXHIBIT INDEX

Number            Description                                  Method of Filing

99.1              Dynex Capital, Inc. Press Release,           Filed herewith
                  dated January 26, 2001.

99.2              Letter, dated January 26, 2001, to           Filed herewith
                  California Investment Fund, LLC from
                  Dynex Capital, Inc.

                                                                   Exhibit  99.1

[ Company Logo ]

                                  Press Release

FOR IMMEDIATE RELEASE                                   CONTACT: Kathy Fern
January 26, 2001                                                 804-217-5800

                              DYNEX CAPITAL, INC.
                     TERMINATES AGREEMENT AND PLAN OF MERGER
                         WITH CALIFORNIA INVESTMENT FUND

     Dynex Capital,  Inc.  (NYSE:  DX) announced today that it has exercised its
right to terminate the Agreement and Plan of Merger  entered into by the Company
and  California  Investment  Fund,  LLC on  November  7, 2000,  as  amended,  in
accordance with the terms and conditions of said Agreement for failure to comply
with certain  terms of the  Agreement.  In addition,  the Company has made claim
under the Escrow Agreement between the parties for the Escrow Amount.

     Dynex  Capital,  Inc. is a  financial  services  company  that elects to be
treated  as a real  estate  investment  trust  (REIT)  for  federal  income  tax
purposes.
                                     # # #

                                                                   Exhibit  99.2

[Company Logo ]
                                                     Dynex Capital, Inc.
                                                     4551 Cox Road, Suite 300
                                                     Glen Allen, Virginia 23060
                                                     804-217-5800
                                                     Fax 804-217-5861

January 26, 2001

VIA FACSIMILE AND CERTIFIED MAIL

California Investment Fund, LLC
550 West C Street
10th Floor
San Diego, CA 92101

Attention:  Michael R. Kelly, Managing Member

Re: Merger Agreement dated November 7, 2000

Dear Mr. Kelly:

     Reference is made to the  Agreement  and Plan of Merger  dated  November 7,
2000, as amended ("Merger  Agreement")  between California  Investment Fund, LLC
("CIF"),  DCI Acquisition  Corporation and Dynex Capital,  Inc. ("Dynex") and to
the letter  dated  December  22,  2000  between  Dynex and CIF  ("December  22nd
Letter").  Dynex  hereby  notifies  you that  Dynex is  terminating  the  Merger
Agreement for CIF's breaches of its obligations under numbered  paragraphs 2 and
3 of the December  22nd Letter and  pursuant to Section  7(a)(vii) of the Merger
Agreement.

Very truly yours,

DYNEX CAPITAL, INC.

By /s/
  Stephen J. Benedetti
  Vice President, Treasurer

cc:      Stephen Fraidin, Esquire