EXHIBIT A

CALIFORNIA INVESTMENT FUND, LLC
550 West C Street, 10th Floor
San Diego, CA 92101

October 27, 2000

CONFIDENTIAL
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The Board of Directors of Dynex Capital, Inc.
c/o Thomas H. Potts
President
Dynex Capital, Inc.
4551 Cox Road, Suite 300
Glen Allen, VA 23060

Re: Dynex Capital, Inc.
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Gentlemen:

Reference is hereby made to that certain letter of intent (the
"Letter of Intent"), dated September 29, 2000, between California
Investment Fund, LLC ("CIF") and Dynex Capital, Inc. ("Dynex") and to that
certain letter agreement, dated October 22, 2000, between CIF and Dynex
(the "Extension Letter"). Each of CIF and Dynex agrees that (i) the Letter
of Intent, as amended by the Extension Letter, is hereby amended to extend
the "No-Shop Period" thereunder until November 3, 2000 and (ii) the
provisions of the Letter of Intent (including, without limitation, the
obligations of the parties under Sections 1 and 6), as amended by the terms
of the Extension Letter and this letter, remain in full force and effect.

Very truly yours,

CALIFORNIA INVESTMENT FUND, LLC


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

Agreed to and Accepted this
27th day of October, 2000

DYNEX CAPITAL, INC.


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