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 (DATE OF EARLIEST EVENT REPORTED): JANUARY 29, 1998



                         TELEBANC FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


    Delaware                   33-76930                 13-3759196
- --------------------------------------------------------------------------------
 (State or other       (Commission File Number)        (IRS Employer
 jurisdiction of                                    Identification No.)
 incorporation)


1111 North Highland Street, Arlington, Virginia            22201 
- --------------------------------------------------------------------------------
(Address of principal executive office)                 (Zip Code)


Registrant's telephone number, including area code:  (703) 247-3700
                                                     --------------


                                 Not Applicable
- --------------------------------------------------------------------------------
          (Former name or former address, if changed since last report)







<PAGE>




Item 5.    Other Events.
           -------------

     On January 15, 1998, TeleBanc Financial Corporation  ("TeleBanc") announced
that  it  had  signed  a  definitive  merger  agreement  with  Direct  Financial
Corporation ("Direct Financial"). TeleBanc will pay $12 for each share of Direct
Financial common stock or common stock equivalent.  The transaction is valued at
approximately  $26.4 million.  TeleBanc has estimated it will achieve annualized
cost savings of approximately  $800,000 in connection with the  consolidation of
operations.   TeleBanc  also  has  estimated  that  it  will  incur  a  one-time
restructuring charge of approximately $1.0 million. The merger is expected to be
consummated  in the  second  quarter  of 1998,  following  approvals  by  Direct
Financial's shareholders and government regulators.


     Also on January 15,  1998,  TeleBanc and MET Holdings  Corp.  ("MET"),  the
parent  company and owner of 64.8% of  TeleBanc's  common  stock,  announced  an
intention to effect a  distribution  of MET's  TeleBanc  stock to individual MET
shareholders  by merging  MET and  TeleBanc.  This  merger,  which is subject to
shareholder  and regulatory  approvals,  is expected to be completed  during the
first quarter of 1998.



<PAGE>


                                    SIGNATURE



      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.

                                            TELEBANC FINANCIAL CORPORATION


Date:  January 29, 1998                     By: /s/ Aileen Lopez Pugh
                                                ---------------------
                                                Aileen Lopez Pugh
                                                Executive Vice President-
                                                     Chief Financial Officer
[{"type": "8-K", "sequence": "1", "description": "FORM 8-K", "secsgml_size_bytes": 3391}]
{"company-data": {"conformed-name": "TELEBANC FINANCIAL CORP", "cik": "0000920986", "assigned-sic": "6035", "irs-number": "133759196", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "file-number": "033-76930", "film-number": "98516440"}, "business-address": {"street1": "1111 N HIGHLAND STREET", "city": "ARLINGTON", "state": "VA", "zip": "22201", "phone": "7032473700"}, "mail-address": {"street1": "1111 NORTH HIGHLAND ST", "city": "ARLINGTON", "state": "VA", "zip": "22201"}}
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 (DATE OF EARLIEST EVENT REPORTED): JANUARY 29, 1998

                         TELEBANC FINANCIAL CORPORATION
- --------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

    Delaware                   33-76930                 13-3759196
- --------------------------------------------------------------------------------
 (State or other       (Commission File Number)        (IRS Employer
 jurisdiction of                                    Identification No.)
 incorporation)

1111 North Highland Street, Arlington, Virginia            22201 
- --------------------------------------------------------------------------------
(Address of principal executive office)                 (Zip Code)

Registrant's telephone number, including area code:  (703) 247-3700
                                                     --------------

                                 Not Applicable
- --------------------------------------------------------------------------------
          (Former name or former address, if changed since last report)
Item 5.    Other Events.
           -------------

     On January 15, 1998, TeleBanc Financial Corporation  ("TeleBanc") announced
that  it  had  signed  a  definitive  merger  agreement  with  Direct  Financial
Corporation ("Direct Financial"). TeleBanc will pay $12 for each share of Direct
Financial common stock or common stock equivalent.  The transaction is valued at
approximately  $26.4 million.  TeleBanc has estimated it will achieve annualized
cost savings of approximately  $800,000 in connection with the  consolidation of
operations.   TeleBanc  also  has  estimated  that  it  will  incur  a  one-time
restructuring charge of approximately $1.0 million. The merger is expected to be
consummated  in the  second  quarter  of 1998,  following  approvals  by  Direct
Financial's shareholders and government regulators.

     Also on January 15,  1998,  TeleBanc and MET Holdings  Corp.  ("MET"),  the
parent  company and owner of 64.8% of  TeleBanc's  common  stock,  announced  an
intention to effect a  distribution  of MET's  TeleBanc  stock to individual MET
shareholders  by merging  MET and  TeleBanc.  This  merger,  which is subject to
shareholder  and regulatory  approvals,  is expected to be completed  during the
first quarter of 1998.
SIGNATURE

      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.

                                            TELEBANC FINANCIAL CORPORATION

Date:  January 29, 1998                     By: /s/ Aileen Lopez Pugh
                                                ---------------------
                                                Aileen Lopez Pugh
                                                Executive Vice President-
                                                     Chief Financial Officer