DEF 14A: Definitive proxy statements

Dynex Capital, Inc.




- -
Notice of Annual Meeting of Stockholders
and
Proxy Statement


Annual Meeting of Stockholders
June 27, 2000



DYNEX CAPITAL, INC.




April 28, 2000






To Our Stockholders:

You are cordially invited to attend the Annual Meeting of Stockholders of
Dynex Capital, Inc. (the "Company") to be held in The Atrium at the Highwoods I
building located at 10900 Nuckols Road, Glen Allen, Virginia on Tuesday, June
27, 2000, at 2:00 p.m. Eastern time.

The business of the meeting is to consider and act upon (i) the election of
Directors of the Company; and (ii) approve the appointment of Deloitte & Touche
LLP, independent certified public accountants, as auditors for the Company.
Information relating to these proposals is set forth in the Proxy Statement
attached.

While stockholders may exercise their right to vote their shares in person,
we recognize that many stockholders may not be able to attend the Annual
Meeting. Accordingly, we have enclosed a proxy which will enable you to vote
your shares on the issues to be considered at the Annual Meeting even if you are
unable to attend. All you need to do is mark the proxy to indicate your vote,
date and sign the proxy, and return it in the enclosed postage-paid envelope as
soon as conveniently possible. If you desire to vote in accordance with
management's recommendations, you need not mark your votes on the proxy but need
only sign, date and return the proxy in the enclosed postage-paid envelope in
order to record your vote.

Sincerely,



Thomas H. Potts
President




DYNEX CAPITAL, INC.

10900 Nuckols Road
Glen Allen, Virginia 23060
(804) 217-5800
____________________________

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS



To Our Stockholders:

The Annual Meeting of Dynex Capital, Inc. (the "Company") will be held in
The Atrium at the Highwoods I building located at 10900 Nuckols Road, Glen
Allen, Virginia on Tuesday, June 27, 2000, at 2:00 p.m. Eastern time, to
consider and act upon the following matters:

1. The election of Directors of the Company; 2. The appointment of Deloitte
& Touche LLP, independent certified public accountants, as auditors for the
Company; and 3. Such other business as may properly come before the Annual
Meeting.

Only stockholders of record at the close of business on April 20, 2000, the
record date, will be entitled to vote at the Annual Meeting.

Management desires to have maximum representation at the Annual Meeting and
respectfully requests that you date, execute and promptly mail the enclosed
proxy in the accompanying postage-paid envelope. A proxy may be revoked by a
stockholder by notice in writing to the Secretary of the Company at any time
prior to its use, by presentation of a later-dated proxy, or by attending the
Annual Meeting and voting in person.

By order of the Board of Directors



Lynn K. Geurin
Secretary




Dated: April 28, 2000


Directions from the North on Interstate 95: Take the Interstate 295
West-Charlottesville exit. Travel approximately 8.5 miles on Interstate 295 West
towards Charlottesville. Take the Nuckols Road-South Exit. Travel approximately
0.3 mile. Turn left at first light. Turn at first right into the parking lot of
the Highwoods I building. The Atrium is located on the first floor.

Directions from the airport: (In regards to the map above - Interstate 64
should be used as a reference point only) As you leave the airport on 156
North-Airport Drive follow the "to 295-North" signs. You will pass the
Interstate 64 East and West exits and the Interstate 295 South exit. After these
exits, continue on 156 North-Airport Drive approximately 2.5 miles. Take the
"295 North to 95-North and 64-West" exit North towards Washington. Stay on
Interstate 295 North for approximately 19.5 miles. Take the Nuckols Road-South
exit. Travel approximately 0.3 mile. Turn left at first light. Turn at first
right into the parking lot of the Highwoods I building. The Atrium is located on
the first floor.

Directions from the South or Downtown: Take Interstate 64 West to
Interstate 295 towards Washington. Take the first exit - Nuckols Road South.
Travel approximately 0.3 mile. Turn left at first light. Turn at first right
into the parking lot of the Highwoods I building. The Atrium is located on the
first floor.

DYNEX CAPITAL, INC.
10900 Nuckols Road
Glen Allen, Virginia 23060
(804) 217-5800
____________________________

PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
June 27, 2000

To Our Stockholders:

This Proxy Statement is furnished with the solicitation by the Board of
Directors of Dynex Capital, Inc. (the "Company") of proxies to be used at the
Annual Meeting of Stockholders of the Company to be held in The Atrium at the
Highwoods I building located at 10900 Nuckols Road, Glen Allen, Virginia on
Tuesday, June 27, 2000, at 2:00 p.m. Eastern time. The Annual Meeting is being
held for the purposes set forth in the accompanying notice of Annual Meeting of
Stockholders. This Proxy Statement, the accompanying proxy card and the notice
of Annual Meeting are being provided to stockholders beginning on or about May
8, 2000.

GENERAL INFORMATION

Solicitation

The enclosed proxy is solicited by the Board of Directors of the Company.
The costs of this solicitation will be borne by the Company. Proxy solicitations
will be made by mail, and also may be made by personal interview, telephone and
telegram by Directors and officers of the Company. Brokerage houses and nominees
will be requested to forward the proxy soliciting material to the beneficial
owners of the Company"s common stock and to obtain authorization for the
execution of proxies. The Company will, upon request, reimburse such parties for
their reasonable expenses in forwarding proxy materials to such beneficial
owners. Additionally, the Company has engaged the firm of MacKenzie Partners,
Inc., New York, New York, to conduct proxy solicitations on its behalf at a cost
estimated to be $5,000, plus reasonable out-of-pocket expenses.

Voting Rights

Holders of shares of the Company's common stock at the close of business on
April 20, 2000, the record date, are entitled to notice of, and to vote at, the
Annual Meeting. On that date 11,444,188 shares of common stock were outstanding.
Each share of common stock outstanding on the record date is entitled to one
vote on each matter presented at the Annual Meeting. The presence, in person or
by proxy, of stockholders entitled to cast a majority of all the votes entitled
to be cast constitutes a quorum for the transaction of business at the Annual
Meeting.

Voting of Proxies

Shares of common stock represented by all properly executed proxies
received in time for the Annual Meeting will be voted in accordance with the
choices specified in the proxy. Unless contrary instructions are indicated on
the proxy, the shares will be voted FOR the election of the nominees named in
this Proxy Statement as Directors, and FOR the appointment of Deloitte & Touche
LLP as the Company's auditors.

The management and the Board of Directors of the Company know of no matters
to be brought before the Annual Meeting other than as set forth herein; no
stockholder proposals were received by the Company for inclusion of such
proposals in this Proxy Statement.

Revocability of Proxy

The giving of the enclosed proxy does not preclude the right to vote in
person should the stockholder giving the proxy so desire. A proxy may be revoked
at any time prior to its exercise by delivering a written statement to the
Secretary of the Company that the proxy is revoked, by presenting to the Company
a later-dated proxy executed by the person executing the prior proxy, or by
attending the Annual Meeting and voting in person.

Annual Report on Form 10-K

The Annual Report on Form 10-K, including financial statements for the year
ended December 31, 1999, which are being mailed to stockholders together with
this Proxy Statement, contains financial and other information about the
activities of the Company, but is not incorporated into this Proxy Statement and
is not to be considered a part of these proxy soliciting materials.


ELECTION OF DIRECTORS
General

Four Directors of the Company, constituting the entire Board of Directors,
are to be elected at the Annual Meeting to serve until the next annual meeting
and until their successors are elected and duly qualified. Mr. J. Sidney
Davenport, Mr. Thomas H. Potts, Mr. Barry S. Shein and Mr. Donald B. Vaden have
been nominated by the Board of Directors for re-election to the Board of
Directors at the Annual Meeting. Unless authorization is withheld, the persons
named as proxies will vote FOR the election of the nominees of the Board of
Directors named above. Each nominee has agreed to serve if elected. In the event
any nominee shall unexpectedly be unable to serve, the proxies will be voted for
such other person as the Board of Directors may designate. Selected biographical
information regarding each nominee is set forth below.


Vote Required; Board Recommendation

The four directors will be elected by a favorable vote of a plurality of
the shares of stock represented and entitled to vote, in person or by proxy, at
the Annual Meeting. Accordingly, abstentions or broker non-votes as to the
election of directors will not affect the election of candidates receiving the
plurality of votes. Unless instructed to the contrary, the shares represented by
the proxies will be voted FOR the election of each of the four nominees named
below as directors. Although it is anticipated that each nominee will be able to
serve as a director, should any nominee become unavailable to serve, the shares
represented by the proxies will be voted for another person or persons
designated by the Company's Board of Directors. In no event will the proxies be
voted for more than four directors.

J. Sidney Davenport, 58, has been a Director of the Company since its
organization in December 1987. Mr. Davenport retired from The Ryland Group,
Inc., a publicly-owned corporation engaged in residential housing construction
and mortgage-related financial services, where he was a Vice President from
March 1981 to January 1998. Mr. Davenport was Executive Vice President of Ryland
Mortgage Company from April 1992 to January 1998. Mr. Davenport served as a
Director of Mentor Income Fund, Inc., a publicly-traded closed-end mutual fund,
from June 1992 to August 1993.

Thomas H. Potts, 50, has been President and a Director of the Company since
its organization in December 1987. Prior to that, Mr. Potts served in various
positions on behalf of The Ryland Group, Inc. Mr. Potts served as Treasurer of
The Ryland Group, Inc. from May 1987 until April 1992, Executive Vice President
of Ryland Acceptance Corporation ("Ryland Acceptance") from November 1987 until
April 1992, and Executive Vice President of Ryland Mortgage Company from April
1991 until April 1992, and previously Senior Vice President. Mr. Potts also
served as President and Director of Mentor Income Fund, Inc. from its inception
in December 1988 until June 1992.

Barry S. Shein, 60, has been a Director of the Company since June 1998. Mr.
Shein has been the President and owner of The Commodore Corporation since 1990.
The Commodore Corporation is a manufactured home producer, operating six
manufacturing facilities located in the eastern half of the U.S. From 1978 to
1990, Mr. Shein served as an officer of The Equity Group in Illinois, a
multi-faceted real estate owner and investor. Mr. Shein is also a non-practicing
certified public accountant.

Donald B. Vaden, 65, has been a Director of the Company since January 1988.
In March 1995, Mr. Vaden resumed practicing law specializing in mediation and
arbitration, and is certified for general and family mediation by the Supreme
Court of Virginia. He serves as a director of the Virginia Mediation Network,
Inc. He is the retired past Chairman of Residential Home Funding Corporation
where he served from December 1992 until February 1995.






Information Concerning the Board of Directors

Mr. Richard C. Leone resigned as a member of the Board of Directors of the
Company, effective as of March 6, 2000. The remaining members of the Board of
Directors did not fill the vacancy created by Mr. Leone and the number of
directors was reduced to four from five.

The members of the Audit Committee during 1999 were Mr. Davenport, Mr.
Shein and Mr. Vaden. The Audit Committee reviews and approves the scope of the
annual internal audit undertaken by the Company's independent certified public
accountants, which is out-sourced to PricewaterhouseCoopers LLP
("Pricewaterhouse", and meets with them on a regular basis to review the
progress and results of their work as well as any recommendations they may make.
The annual internal audit performed by Pricewaterhouse is in addition to the
annual audit performed by the Company's independent certified public
accountants, Deloitte & Touche LLP. is in addition to the annual audit performed
by Deloitte & Touche LLP. The Audit Committee held three regular meetings in
1999. The Board of Directors also had a Compensation Committee during 1999 with
the members being Mr. Davenport, Mr. Leone, Mr. Vaden and Mr. Shein. The
Compensation Committee met three times in 1999. The Company has no other
standing committees of the Board of Directors.

The Board of Directors held four regular meetings and thirteen special
meetings in 1999. During this period, each of the Directors attended at least
75% of these meetings of the Board of Directors and the committees on which he
served.

The Directors who are not employed by the Company (the "Outside Directors")
receive an annual fee of $25,000 per year, plus $500 for each meeting of the
Board of Directors, or a committee thereof, they attend. In addition, these
Directors are reimbursed for expenses related to their attendance at Board of
Directors and committee meetings.

In 1995, the Company adopted the 1995 Directors Stock Incentive Plan (the
"Directors Plan") pursuant to which Directors of the Company as of May 1, 1995,
who were not employees of the Company or its affiliates, each received an
initial grant of 1,750 Stock Appreciation Rights ("SARs"). Under the Directors
Plan, new Directors receive an initial grant of 1,250 SARs. Subsequent to these
initial grants, eligible Directors are granted 552.50 SARs annually. The
exercise price of the SARs is equal to the market value of the Company's common
stock on the date of each grant. The SARs may be settled only in cash. As
authorized by the Directors Plan, on May 1, 1999, each eligible Director
received a grant of 552.50 SARs.


OWNERSHIP OF COMMON STOCK

The table below sets forth, as of December 31, 1999, the number of shares
of common stock beneficially owned by owners of more than five percent of the
Company's common stock outstanding, each Director of the Company, the President,
each of the other four executive officers named in the Summary Compensation
Table under "Management of the Company", and the number of shares beneficially
owned by all of the Company's Directors and executive officers as a group. To
the Company's knowledge, no other person beneficially owns more than 5% of the
outstanding shares of common stock. Unless otherwise indicated, all persons
named as beneficial owners of common stock have sole voting power and sole
investment power with respect to the shares beneficially owned. The address of
each Director of the Company is the same as the Company's address.