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: December 28, 2000


                              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)


                                        1


Item 5.       OTHER EVENTS.


     On  December  22,  2000,  the  Company  delivered  a letter  to  California
Investment  Fund, LLC ("CIF") which declared that CIF was in breach of the terms
of the merger  agreement  entered  into by the parties on November 7, 2000.  The
breach is related to CIF's  obligation to provide certain  evidence of financing
of the transaction in accordance with the terms of the merger agreement.  In the
letter,  the Company also reserved its rights to terminate the merger  agreement
if CIF did not agree to and satisfy certain conditions relating to the obtaining
of financing and other matters.

     Subsequently,  CIF  has  executed  the  letter  sent by the  Company  dated
December 22nd. Under the terms of the  countersigned  December 22nd letter,  CIF
has agreed to deliver to the Company on or before  January 25, 2001 (i) "written
binding commitment(s)" or "definitive agreements" from one or more third parties
sufficient  to  provide  CIF with the  financing  necessary  to  consummate  the
transaction,  and (ii) the written consent to the merger transaction,  including
the  financing,  by a sufficient  number of the holders of the Company's  senior
unsecured notes due July 2002. Pursuant to the December 22nd letter, if CIF does
not satisfy either of these additional obligations, the Company has reserved its
right to terminate the merger  agreement for the declared  breach and/or for any
breach of the additional obligations.  Although CIF sent a letter to the Company
dated  December 26, 2000  indicating  that it does not agree with the  Company's
declaration of a breach under the merger  agreement,  CIF nevertheless  executed
the December 22nd letter.

     The  foregoing  is  qualified  in its entirety by reference to the complete
text of the letter  dated  December  22,  2000,  which is filed as Exhibit  99.2
hereto.




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

(c)      Exhibits

99.1     Dynex Capital, Inc. Press Release, dated December 28, 2000.

99.2     Letter,  dated  December 22, 2000,  executed by California  Investment
         Fund, LLC, DCI Acquisition Corporation and 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:    December 28, 2000                   DYNEX CAPITAL, INC.


                                             By: /s/ Thomas H. Potts
                                                Thomas H. Potts
                                                President






                            EXHIBIT INDEX

Number        Description                                  Method of Filing

99.1          Dynex Capital, Inc. Press Release,           Filed herewith
              dated December 28, 2000.

99.2          Letter, dated December 22, 2000, executed    Filed herewith
              by California Investment Fund, LLC, DCI
              Acquisition Corporation and Dynex Capital, Inc.





                                                                Exhibit  99.1

[ Company Logo ]

                           PRESS RELEASE


FOR IMMEDIATE RELEASE                          CONTACT:   Kathy Fern
December 28, 2000                                         804-217-5800


                         DYNEX CAPITAL, INC.
                ANNOUNCES CALIFORNIA INVESTMENT FUND
                         EXECUTES LETTER


     Dynex Capital,  Inc. (NYSE: DX) announced today that California  Investment
Fund, LLC ("CIF") has executed the letter sent by the Company dated December 22,
2000. As previously reported, the Company declared that CIF was in breach of its
obligation to provide certain evidence of financing in accordance with the terms
of the merger agreement entered into between the parties on November 7, 2000 and
sent a letter to CIF to that  effect on  December  22nd.  Under the terms of the
countersigned December 22nd letter, CIF has now agreed to deliver to the Company
on or before  January 25, 2001 "written  binding  commitment(s)" or "definitive
agreements"  from one or more third  parties  sufficient to provide CIF with the
financing  necessary  to  consummate  the  transaction,  as well as the  written
consent to the merger  transaction,  including  the  financing,  by a sufficient
number of the holders of the  Company's  senior  unsecured  notes due July 2002.
Pursuant to the December 22nd letter  agreement,  if CIF does not satisfy either
of these additional obligations, the Company has reserved its right to terminate
the  merger  agreement  for the  declared  breach  and/or  for any breach of the
additional obligations. Although CIF sent a letter to the Company dated December
26, 2000 indicating  that it does not agree with the Company's  declaration of a
breach under the merger agreement,  CIF nevertheless  executed the December 22nd
letter.

     The Company also announced that, at CIF's request,  the parties agreed that
the revised  date for the filing of the  preliminary  proxy  materials  with the
Securities and Exchange  Commission would be January 29, 2001.  Shareholders are
urged to read the  proxy  statement  when it  becomes  available,  and any other
relevant  documents  filed with the SEC,  because  such  documents  will contain
important information regarding the merger transaction.

     The  merger  is  subject  to  financing,  shareholder  approval  and  other
customary  conditions  and  there  can be no  assurance  at this  time  that the
requirements  or conditions set forth in the merger  agreement will be satisfied
and the merger completed.

     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. Note: This document contains  "forward-looking  statements"(within the
meaning  of the  Private  Securities  Litigation  Act of 1995)  that  inherently
involve  risks and  uncertainties.  The  Company's  actual  results could differ
materially  from those  anticipated  in these  forward-looking  statements  as a
result of unforeseen  external  factors.  As discussed in the Company's  filings
with the SEC,  these  factors may  include,  but are not limited to,  changes in
general economic conditions, disruptions in the capital markets, fluctuations in
interest rates, increases in costs and other general competitive factors.
                                # # #


                                                                  Exhibit  99.2

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



December 22, 2000


BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED & BY FACSIMILE: (619) 687-5010

Mr. Michael R. Kelly
Managing Member
California Investment Fund, LLC
DCI Acquisition Corporation
550 West C Street
10th Floor
San Diego, California 92101


     Re:  Agreement and Plan of Merger dated as of November 7, 2000 by and among
California Investment Fund, LLC, DCI Acquisition  Corporation and Dynex Capital,
Inc.

Dear Mr. Kelly:

     This is to notify you that  California  Investment  Fund, LLC ("CIF") is in
breach of its obligations under Section 5(e) of the captioned Agreement and Plan
of Merger (the "Merger  Agreement"),  as the letter addressed to me from Fremont
Investment & Loan dated December 19, 2000 is neither a  "commitment"  to provide
financing  nor  is  it  from  a  financing  source  "capable  of  financing  the
transactions  contemplated  by"  the  Merger  Agreement.  Pursuant  to  Sections
7(a)(vii) and 7(c)(i) of the Merger Agreement,  Dynex has the right to terminate
the Merger  Agreement  and receive  payment and  delivery of the Escrow  Amount.
Dynex reserves its rights  described  above,  but elects at this time to forbear
from exercising such rights,  provided that the enclosed  duplicate  original of
this  letter is  executed  and  returned  to the  undersigned  no later than 5pm
Eastern time on  Wednesday,  December  27, 2000 and that CIF  complies  with its
obligations under numbered paragraphs 2 and 3 below. If a countersigned original
of this letter is not received by such time,  or if CIF breaches any  obligation
under  numbered  paragraphs 2 or 3 below,  Dynex shall  thereupon  terminate the
Merger  Agreement  and make a claim  under the Escrow  Agreement  for the Escrow
Amount.

     Capitalized  terms used but not otherwise defined in this letter shall have
the meanings ascribed to such terms in the Merger Agreement.

     By your  execution  and return of this  letter,  you agree to the terms and
conditions set forth below.

     1. At CIF's  request,  the SEC Mail Date shall be January 29,  2001.  Dynex
shall provide to CIF a revised draft  preliminary  merger proxy in substantially
final form  (excluding  sections of the merger proxy meant to be drafted by CIF)
on or before  January 19, 2001.  CIF shall provide to Dynex all its comments and
insertions to the draft preliminary  merger proxy  electronically and via fax by
5:00PM Pacific time on January 26, 2001.

     2. On or before 5pm Eastern time on January 25, 2001,  CIF shall provide to
Dynex (a) written binding commitment(s) from a third party or parties committing
to  provide  CIF and DCI with  sufficient  financing  (debt  and/or  equity)  to
consummate the Merger  according to the terms (and without any conditions  other
than  those   conditions   customarily   contained  in  such   written   binding
commitment(s)   by  such  third  party  or  third   parties)  of  such   written
commitment(s),  or  (b)definitive  agreements  for sufficient  financing  (debt
and/or equity) to consummate the Merger.

     3. CIF shall have obtained and shall  provide to Dynex,  on or prior to 5pm
Eastern time on January 25,  2001, the written consent by a sufficient number of
the  holders  of the  Target  Senior  Notes to  permit  all of the  transactions
contemplated by the Merger Agreement, including without limitation the financing
thereof, to be consummated without breach of the Target Senior Note Indenture.

     4.  To the  extent  any  provision  of  this  letter  conflicts  with or is
inconsistent  with any term or  condition  of the Merger  Agreement,  the Merger
Agreement  shall be deemed to have been amended in a manner  consistent with the
provisions hereof. Any breach by CIF of any obligation hereunder shall be deemed
to be a breach by CIF of its obligations under numbered paragraph 2 and 3 above,
and  shall  also  revoke  Dynex's  forbearance  described  in  the  introductory
paragraph hereof.

                                                     DYNEX CAPITAL, INC.



                                                     By: /s/ Thomas H. Potts
                                                         Thomas H. Potts,
                                                         President

AGREED AND ACCEPTED:

CALIFORNIA INVESTMENT FUND, LLC



By:   /s/ Michael R. Kelly
     Name:
     Title:

DCI ACQUISITION CORPORATION



By:  /s/ Michael R. Kelly
     Name:
     Title:

cc:  Stephen Fraidin, Esq.
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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": "796992"}, "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: December 28, 2000

                              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)

                                        1

Item 5.       OTHER EVENTS.

     On  December  22,  2000,  the  Company  delivered  a letter  to  California
Investment  Fund, LLC ("CIF") which declared that CIF was in breach of the terms
of the merger  agreement  entered  into by the parties on November 7, 2000.  The
breach is related to CIF's  obligation to provide certain  evidence of financing
of the transaction in accordance with the terms of the merger agreement.  In the
letter,  the Company also reserved its rights to terminate the merger  agreement
if CIF did not agree to and satisfy certain conditions relating to the obtaining
of financing and other matters.

     Subsequently,  CIF  has  executed  the  letter  sent by the  Company  dated
December 22nd. Under the terms of the  countersigned  December 22nd letter,  CIF
has agreed to deliver to the Company on or before  January 25, 2001 (i) "written
binding commitment(s)" or "definitive agreements" from one or more third parties
sufficient  to  provide  CIF with the  financing  necessary  to  consummate  the
transaction,  and (ii) the written consent to the merger transaction,  including
the  financing,  by a sufficient  number of the holders of the Company's  senior
unsecured notes due July 2002. Pursuant to the December 22nd letter, if CIF does
not satisfy either of these additional obligations, the Company has reserved its
right to terminate the merger  agreement for the declared  breach and/or for any
breach of the additional obligations.  Although CIF sent a letter to the Company
dated  December 26, 2000  indicating  that it does not agree with the  Company's
declaration of a breach under the merger  agreement,  CIF nevertheless  executed
the December 22nd letter.

     The  foregoing  is  qualified  in its entirety by reference to the complete
text of the letter  dated  December  22,  2000,  which is filed as Exhibit  99.2
hereto.

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

(c)      Exhibits

99.1     Dynex Capital, Inc. Press Release, dated December 28, 2000.

99.2     Letter,  dated  December 22, 2000,  executed by California  Investment
         Fund, LLC, DCI Acquisition Corporation and 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:    December 28, 2000                   DYNEX CAPITAL, INC.

                                             By: /s/ Thomas H. Potts
                                                Thomas H. Potts
                                                President

                            EXHIBIT INDEX

Number        Description                                  Method of Filing

99.1          Dynex Capital, Inc. Press Release,           Filed herewith
              dated December 28, 2000.

99.2          Letter, dated December 22, 2000, executed    Filed herewith
              by California Investment Fund, LLC, DCI
              Acquisition Corporation and Dynex Capital, Inc.

                                                                Exhibit  99.1

[ Company Logo ]

                           PRESS RELEASE

FOR IMMEDIATE RELEASE                          CONTACT:   Kathy Fern
December 28, 2000                                         804-217-5800

                         DYNEX CAPITAL, INC.
                ANNOUNCES CALIFORNIA INVESTMENT FUND
                         EXECUTES LETTER

     Dynex Capital,  Inc. (NYSE: DX) announced today that California  Investment
Fund, LLC ("CIF") has executed the letter sent by the Company dated December 22,
2000. As previously reported, the Company declared that CIF was in breach of its
obligation to provide certain evidence of financing in accordance with the terms
of the merger agreement entered into between the parties on November 7, 2000 and
sent a letter to CIF to that  effect on  December  22nd.  Under the terms of the
countersigned December 22nd letter, CIF has now agreed to deliver to the Company
on or before  January 25, 2001 "written  binding  commitment(s)" or "definitive
agreements"  from one or more third  parties  sufficient to provide CIF with the
financing  necessary  to  consummate  the  transaction,  as well as the  written
consent to the merger  transaction,  including  the  financing,  by a sufficient
number of the holders of the  Company's  senior  unsecured  notes due July 2002.
Pursuant to the December 22nd letter  agreement,  if CIF does not satisfy either
of these additional obligations, the Company has reserved its right to terminate
the  merger  agreement  for the  declared  breach  and/or  for any breach of the
additional obligations. Although CIF sent a letter to the Company dated December
26, 2000 indicating  that it does not agree with the Company's  declaration of a
breach under the merger agreement,  CIF nevertheless  executed the December 22nd
letter.

     The Company also announced that, at CIF's request,  the parties agreed that
the revised  date for the filing of the  preliminary  proxy  materials  with the
Securities and Exchange  Commission would be January 29, 2001.  Shareholders are
urged to read the  proxy  statement  when it  becomes  available,  and any other
relevant  documents  filed with the SEC,  because  such  documents  will contain
important information regarding the merger transaction.

     The  merger  is  subject  to  financing,  shareholder  approval  and  other
customary  conditions  and  there  can be no  assurance  at this  time  that the
requirements  or conditions set forth in the merger  agreement will be satisfied
and the merger completed.

     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. Note: This document contains  "forward-looking  statements"(within the
meaning  of the  Private  Securities  Litigation  Act of 1995)  that  inherently
involve  risks and  uncertainties.  The  Company's  actual  results could differ
materially  from those  anticipated  in these  forward-looking  statements  as a
result of unforeseen  external  factors.  As discussed in the Company's  filings
with the SEC,  these  factors may  include,  but are not limited to,  changes in
general economic conditions, disruptions in the capital markets, fluctuations in
interest rates, increases in costs and other general competitive factors.
                                # # #

                                                                  Exhibit  99.2

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

December 22, 2000

BY CERTIFIED MAIL, RETURN RECEIPT
REQUESTED & BY FACSIMILE: (619) 687-5010

Mr. Michael R. Kelly
Managing Member
California Investment Fund, LLC
DCI Acquisition Corporation
550 West C Street
10th Floor
San Diego, California 92101

     Re:  Agreement and Plan of Merger dated as of November 7, 2000 by and among
California Investment Fund, LLC, DCI Acquisition  Corporation and Dynex Capital,
Inc.

Dear Mr. Kelly:

     This is to notify you that  California  Investment  Fund, LLC ("CIF") is in
breach of its obligations under Section 5(e) of the captioned Agreement and Plan
of Merger (the "Merger  Agreement"),  as the letter addressed to me from Fremont
Investment & Loan dated December 19, 2000 is neither a  "commitment"  to provide
financing  nor  is  it  from  a  financing  source  "capable  of  financing  the
transactions  contemplated  by"  the  Merger  Agreement.  Pursuant  to  Sections
7(a)(vii) and 7(c)(i) of the Merger Agreement,  Dynex has the right to terminate
the Merger  Agreement  and receive  payment and  delivery of the Escrow  Amount.
Dynex reserves its rights  described  above,  but elects at this time to forbear
from exercising such rights,  provided that the enclosed  duplicate  original of
this  letter is  executed  and  returned  to the  undersigned  no later than 5pm
Eastern time on  Wednesday,  December  27, 2000 and that CIF  complies  with its
obligations under numbered paragraphs 2 and 3 below. If a countersigned original
of this letter is not received by such time,  or if CIF breaches any  obligation
under  numbered  paragraphs 2 or 3 below,  Dynex shall  thereupon  terminate the
Merger  Agreement  and make a claim  under the Escrow  Agreement  for the Escrow
Amount.

     Capitalized  terms used but not otherwise defined in this letter shall have
the meanings ascribed to such terms in the Merger Agreement.

     By your  execution  and return of this  letter,  you agree to the terms and
conditions set forth below.

     1. At CIF's  request,  the SEC Mail Date shall be January 29,  2001.  Dynex
shall provide to CIF a revised draft  preliminary  merger proxy in substantially
final form  (excluding  sections of the merger proxy meant to be drafted by CIF)
on or before  January 19, 2001.  CIF shall provide to Dynex all its comments and
insertions to the draft preliminary  merger proxy  electronically and via fax by
5:00PM Pacific time on January 26, 2001.

     2. On or before 5pm Eastern time on January 25, 2001,  CIF shall provide to
Dynex (a) written binding commitment(s) from a third party or parties committing
to  provide  CIF and DCI with  sufficient  financing  (debt  and/or  equity)  to
consummate the Merger  according to the terms (and without any conditions  other
than  those   conditions   customarily   contained  in  such   written   binding
commitment(s)   by  such  third  party  or  third   parties)  of  such   written
commitment(s),  or  (b)definitive  agreements  for sufficient  financing  (debt
and/or equity) to consummate the Merger.

     3. CIF shall have obtained and shall  provide to Dynex,  on or prior to 5pm
Eastern time on January 25,  2001, the written consent by a sufficient number of
the  holders  of the  Target  Senior  Notes to  permit  all of the  transactions
contemplated by the Merger Agreement, including without limitation the financing
thereof, to be consummated without breach of the Target Senior Note Indenture.

     4.  To the  extent  any  provision  of  this  letter  conflicts  with or is
inconsistent  with any term or  condition  of the Merger  Agreement,  the Merger
Agreement  shall be deemed to have been amended in a manner  consistent with the
provisions hereof. Any breach by CIF of any obligation hereunder shall be deemed
to be a breach by CIF of its obligations under numbered paragraph 2 and 3 above,
and  shall  also  revoke  Dynex's  forbearance  described  in  the  introductory
paragraph hereof.

                                                     DYNEX CAPITAL, INC.

                                                     By: /s/ Thomas H. Potts
                                                         Thomas H. Potts,
                                                         President

AGREED AND ACCEPTED:

CALIFORNIA INVESTMENT FUND, LLC

By:   /s/ Michael R. Kelly
     Name:
     Title:

DCI ACQUISITION CORPORATION

By:  /s/ Michael R. Kelly
     Name:
     Title:

cc:  Stephen Fraidin, Esq.