EXHIBIT D

DRAFT - NOT FOR RELEASE


Contacts:

Michael Kelly Jonathan Gasthalter Kathy Fern
California Investment Fund Citigate Sard Verbinnen Dynex Capital
(619) 687-5000 (212) 687-8080 (804) 217-5800


CALIFORNIA INVESTMENT FUND TO ACQUIRE DYNEX CAPITAL

SAN DIEGO, CA AND GLEN ALLEN, VA, NOVEMBER 8, 2000 - Dynex Capital,
Inc. (NYSE: DX) and California Investment Fund, LLC (CIF), an affiliate
company of First Commercial Corporation, a private real estate investment
company headquartered in San Diego, California, announced today that they
have entered into a definitive merger agreement whereby CIF will acquire
100% of the equity of Dynex Capital, Inc. for a purchase price of $90
million in cash.

Dynex is a financial services company that elects to be taxed as a
real estate investment trust for federal income tax purposes. Dynex invests
in a portfolio of securities and investments backed principally by
single-family, commercial mortgage loans and manufactured housing
installment loans. CIF currently owns 572,178 shares of the common stock of
Dynex, approximately 5% of the outstanding shares.

Under the terms of the agreement, CIF will acquire the common stock of
Dynex for a price of $2.00 per share, the Series A Preferred Stock of Dynex
for a price of $12.07 per share, the Series B Preferred Stock of Dynex for
a price of $12.32 per share and the Series C Preferred Stock of Dynex for a
price of $15.08 per share, less any dividends declared or paid on the
preferred shares from the date of the agreement.

CIF's acquisition of Dynex is expected to close in the first quarter
of 2001, subject to Dynex shareholder approval and customary regulatory
conditions. The transaction, which has been approved by the Board of
Directors of both CIF and Dynex, is also conditioned upon CIF securing
necessary financing and the consent of the holders of Dynex's senior notes.
CIF has deposited into escrow the 572,178 shares of Dynex common stock that
it owns and has also agreed to deposit an additional $1,000,000 into the
escrow in thirty days. CIF has agreed to forfeit these shares and the cash
deposit if the transaction fails to close under certain circumstances.
Dynex will file a current report on Form 8-K, which will include a copy of
the executed definitive merger agreement, and CIF will file an amendment to
its Schedule 13-D, which will also include a copy of the executed
definitive merger agreement and escrow agreement.

PaineWebber Inc. acted as financial advisor to Dynex.

"This transaction further solidifies our strong position in the
burgeoning commercial real estate loan secondary market," said Michael
Kelly, CIF's managing member. "We are excited about the potential synergies
inherent in the combination of the two companies' operations, and are
confident that the addition of Dynex's mortgage securities portfolio will
enhance our ability to grow our mortgage business and expand our investing
and operating activities overall."

Commenting on the transaction, Thomas H. Potts, president of Dynex
Capital, said, "This transaction will provide our shareholders with
immediate liquidity at a significant premium to current share prices. After
evaluating alternatives available to the Company, the Board concluded that
the transaction was in the best interest of the Company, and unanimously
approved the merger. We look forward to working with the CIF team in the
coming months to ensure a smooth completion of the transaction."

California Investment Fund, LLC is an affiliate real estate investment
company of First Commercial Corporation. First Commercial, a private real
estate investment company based in San Diego, California, is focused on the
acquisition of whole loans and whole loan portfolios secured by commercial
real estate. Founded in 1993 by Michael and Richard Kelly, First Commercial
Corporation specializes in the commercial real estate loan secondary
market.

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.

# # #

This press release contains certain "forward-looking" statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
statements are based on current expectations and are subject to uncertainty
and changes in circumstances that may cause actual results to differ
materially from the expectations contained herein. The forward-looking
statements contained herein include statements about future benefits of
CIF's pending acquisition of Dynex. Factors that could cause actual results
to differ materially from those described herein include, for example: the
inability to obtain necessary regulatory or third-party approvals; the
inability to obtain financing for the transaction; actions of governments;
changes in the economic, business, and competitive environment in general
and in the relevant industry in particular; or failure of the described
transaction to be completed for any reason. More detailed information about
these factors is set forth in the reports filed by Dynex and CIF with the
Securities and Exchange Commission. Neither CIF nor Dynex is not under any
obligation to (and expressly disclaims any such obligation to) update or
alter its forward-looking statements, whether as a result of new
information, future events or otherwise.

Dynex will be filing a proxy statement and other relevant documents
concerning the proposed transaction with the Securities and Exchange
Commission. SECURITY HOLDERS OF DYNEX ARE URGED TO READ THE PROXY STATEMENT
WHEN IT BECOMES AVAILABLE, AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE
SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION REGARDING THE
TRANSACTION. Investors and security holders may obtain a free copy of the
proxy statement when it becomes available and other documents filed by
Dynex and CIF with the Securities and Exchange Commission in connection
with the merger at the Securities and Exchange Commission's website
(www.sec.gov). Security holders of Dynex may also obtain for free a copy of
the proxy statement and other documents filed with the Securities and
Exchange Commission by Dynex in connection with the merger by contacting
Kathy Fern, Investor Relations, (804) 217-5800.

Dynex and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the security holders of
Dynex in connection with the merger. Information concerning the
participants in the solicitation and the interests of such participants is
included in Dynex's proxy statement for its 2000 annual meeting of
stockholders filed with the Securities and Exchange Commission on April 28,
2000. This document is available at the Securities and Exchange
Commission's website at www.sec.gov and from Dynex.