Form: 424B2

Prospectus filed pursuant to Rule 424(b)(2)

July 29, 1997

424B2: Prospectus filed pursuant to Rule 424(b)(2)

Published on July 29, 1997


PROSPECTUS SUPPLEMENT
(To Prospectus and Prospectus Supplement Dated March 6, 1997)

53,000 Shares


DYNEX CAPITAL, INC.

SHARES OF COMMON STOCK
(Par Value $0.01)


Pursuant to a Sales Agency Agreement dated as of March 6, 1997 (the "Sales
Agency Agreement") between Dynex Capital, Inc. (the "Company") and PaineWebber
Incorporated ("PaineWebber"), a form of which has been filed as an exhibit to
the Registration Statement of which this Prospectus Supplement is a part and
which is incorporated by reference herein, the Company has sold, through
PaineWebber, as agent of the Company, 53,000 shares of the Company's common
stock, par value $0.01 per share (the "Common Stock"), pursuant to ordinary
brokers' transactions on the New York Stock Exchange (the "NYSE").

Shares sold during Pricing Period




17,600 Average Market Price Shares
35,400 Additional Shares
------
53,000 Total Shares Sold


Arithmetic Mean of the High and Low Sales Prices of the Shares reported on
the NYSE (the "Average Market Price") for each day of the Pricing
Period:




07/21/97 07/22/97 07/23/97 07/24/97 07/25/97 for Pricing Period
-------- -------- -------- -------- -------- ------------------
$14.5625 $14.59375 $14.8125 $14.7500 $0.0000 $14.6796875



High and Low Sales Prices at which Average Market Shares were sold during
pricing period:

High: $14.8750 Low: $14.5000



Average Market Price Shares:


Gross Proceeds to Company...............$ 258,362.50 Gross Sales Proceeds....................$ 258,756.25
3.0% Discount...........................$ 7,750.88 Compensation to Agent...................$ 8,144.63
Net Proceeds to Company.................$ 250,611.62 Net Proceeds to Company.................$ 250,611.62

Additional Shares Sold:

Gross Proceeds to Company...............$ 517,631.25
Commission to PaineWebber...............$ 15,528.94
-------------
Net Proceeds to Company.................$ 502,102.31

Total Net Proceeds to Company...........$ 752,713.93 Total Compensation to Agent.............$ 23,673.57


On the last day of the Pricing Period, the last reported sales price
of the Stock on the NYSE was $14.50

Note:.S.E.C. fees were not used in arriving at any of the above
figures.


......THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OF THIS PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

The date of this Prospectus Supplement is July 29, 1997.