SC 13D/A: Schedule filed to report acquisition of beneficial ownership of 5% or more of a class of equity securities

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(AMENDMENT NO. 14)



Dynex Capital, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)


Common Stock, par value $0.01 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)



268170506
---------
(CUSIP Number)


Michael R. Kelly
550 West C Street
San Diego, CA 92101
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)


February 22, 2001
-----------------
(Date of Event which Requires Filing of this Statement)


If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box |_|.

Note: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7 for
other parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).





- Page 1 of 8 Pages -




- ------------------------------- -----------------------
CUSIP No. 26817Q506 Page 2 of 8 Pages
- ------------------------------- -----------------------


1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
California Investment Fund, LLC (33-0688954)
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* a) |X|

b) /_/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) /_/
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY -----------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 572,178
REPORTING ------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH -0-
------------------------------------------------
10 SHARED DISPOSITIVE POWER
572,178
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
570,178
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/_/
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.00%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON

OO
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- ---------------------------- ----------------------------
CUSIP No. 26817Q506 Page 3 of 8 Pages
- ---------------------------- ----------------------------


1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Michael R. Kelly
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X|

b) |_|
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) |_|
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY ------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 572,178
REPORTING ------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH -0-
-----------------------------------------------
10 SHARED DISPOSITIVE POWER
572,178
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
570,178
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/_/
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.00%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON

IN
- --------------------------------------------------------------------------------







- ------------------------------ --------------------------
CUSIP No. 294408-10-9 Page 4 of 8 Pages
- ------------------------------ --------------------------


1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Richard Kelly
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X|

(b) /_/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) /_/
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America

NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY ------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 572,178
REPORTING ------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH -0-
------------------------------------------------
10 SHARED DISPOSITIVE POWER
572,178
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
572,178
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
/_/
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.00%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON

IN
- --------------------------------------------------------------------------------





SCHEDULE 13D

ITEM 1: SECURITY AND ISSUER

This Amendment No. 14 on Schedule 13D relates to the common stock, par
value $0.01 per share, of Dynex capital, Inc. ("Dynex"). This amendment amends
and supplements Schedule 13D of California Investment Fund, LLC, dated April 3,
2000 and filed on April 4, 2000 with the Securities and Exchange Commission
("SEC"), Amendment No. 1 to Schedule 13D, dated September 12, 2000 and filed on
September 13, 2000 with the SEC, Amendment No. 2 to Schedule 13D, dated October
3, 2000 and filed on October 3, 2000 with the SEC, Amendment No. 3 to Schedule
13D, dated October 17, 2000 and filed on October 17, 2000 with the SEC,
Amendment No. 4 to Schedule 13D, dated October 24, 2000 and filed on October 24,
2000 with the SEC, Amendment No. 5 to Schedule 13D, dated October 30, 2000 and
filed on October 30, 2000 with the SEC, Amendment No. 6 to Schedule 13D, dated
November 8, 2000 and filed on November 8, 2000 with the SEC, Amendment No. 7 to
Schedule 13D, dated December 12, 2000 and filed on December 12, 2000 with the
SEC, Amendment No. 8 to Schedule 13D, dated December 21, 2000 and filed on
December 21, 2000 with the SEC, Amendment No. 9 to Schedule 13D, dated December
27, 2000 and filed on December 27, 2000 with the SEC, Amendment No. 10 to
Schedule 13D, dated January 5, 2001 and filed on January 5, 2001 with the SEC,
Amendment No. 11 to Schedule 13D, dated January 30, 2001 and filed on January
30, 2001 with the SEC, Amendment No. 12 to Schedule 13D, dated February 8, 2001
and filed on February 8, 2001 with the SEC, and Amendment No. 13 to Schedule 13D
dated February 9, 2001 and filed on February 9, 2001 (together, the "Schedule
13D"). Except as amended by this amendment, there has been no change in the
information previously reported on the Schedule 13D.


ITEM 4: PURPOSE OF TRANSACTION


On February 22, 2001, California Investment Fund, LLC ("CIF") sent a
letter to U.S. Trust Company, National Association, as Escrow Agent under the
Escrow Agreement dated as of November 7, 2000 by and among California Investment
Fund, LLC and Dynex Capital, Inc. ("Dynex") and U.S. Trust Company, National
Association.

The letter notified the Escrow Agent that CIF objects to the Escrow
Deposit Request of Dynex asserting a claim ("Claim") for the Escrow Shares and
the full amount of the Escrow Fund which Dynex made by letter dated January 26,
2001. Dynex asserted its Claim pursuant to Section (4)(a)(ii) of the
above-captioned Escrow Agreement ("Escrow Agreement"), asserting that it had
terminated the Agreement and Plan of Merger dated as of November 7, 2000
("Merger Agreement") by and among CIF, DCI Acquisition Corporation and Dynex
pursuant to Section 7(a)(vii) of the Merger Agreement as a result of an alleged
failure of CIF to satisfy a condition set forth in Section 6(b)(iii) of the
Merger Agreement and Paragraphs 2 and 3 of a letter dated December 22, 2000
between Dynex and CIF ("December 22nd Letter"). CIF's letter served as an
objection ("Objection") to Dynex's Claim and Escrow Deposit Request.


- Page 5 of 8 Pages -


In accordance with Section 4(c) of the Escrow Agreement, CIF set forth
its reasons for its Objection as follows:

1) CIF contends the Merger Agreement is in full force and effect.
Dynex's purported termination of the Merger Agreement was
without basis and is void, null and of no effect because it
was done in bad faith since Dynex knew: (1) that it had caused
or contributed to any delays encountered by CIF in performing
its obligations under the Merger Agreement including any
delays it may have experienced in fulfilling its obligations
under Section 5(e) of the Merger Agreement or any applicable
provision of the December 22nd Letter; (2) CIF would be able
to cure any deficiency in its performance in a short period of
time; and (3) any such brief delay would not injure Dynex.

2) Dynex's purported termination of the Merger Agreement pursuant
to Section 7(a)(vii) was without basis and is void, null and
of no effect because CIF substantially performed its
obligations under the Merger Agreement and any applicable
provision of the December 22nd Letter.

3) Dynex's actions and omissions directly and indirectly hindered
CIF's performance under the Merger Agreement and contributed
materially to any alleged failure by CIF to perform any of the
conditions under the Merger Agreement including any delays it
may have experienced in fulfilling its obligations under
Section 5(e) of the Merger Agreement or any applicable
provision of the December 22nd Letter. As a result of Dynex's
actions and omissions, any alleged failure by CIF to perform
the conditions of the Merger Agreement or any applicable
provision of the December 22nd Letter is deemed to be waived
or excused under the doctrine of prevention. Accordingly, CIF
did not breach the Merger Agreement or any applicable
provision of the December 22nd Letter and Dynex's purported
termination is null, void and of no effect.

In accordance with Section 6(e) of the Escrow Agreement, CIF requested that
the Escrow Agent hold all of the Escrow Shares and Escrow Fund.




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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.


Exhibit A - Letter, dated February 22, 2001, from California Investment
Fund, LLC to U.S. Trust Company, National Association, as
Escrow Agent


[SIGNATURE PAGE TO FOLLOW]


Page 7 of 8 Pages





SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, correct and
complete.