DEFA14A

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                            SCHEDULE 14A INFORMATION
           Proxy Statement Pursuant to Section 14(a) of the Securities
                              Exchange Act of 1934

Filed by the Registrant  |X|

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ]  Preliminary Proxy Statement
[ ]  Confidential, for Use of the Commission
     Only (as permitted by Rule 14a-6(e)(2)
[ ]  Definitive Proxy Statement
|X|  Definitive Additional Materials
[ ]  Soliciting Material underss. 240.14a-12

                               DYNEX CAPITAL, INC.
- --------------------------------------------------------------------------------
                (Name of Registrant as Specified in Its Charter)

- --------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

|X|  No fee required.

[ ]  Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
     0-11.

     (1) Title of each class of securities to which transaction apples:

     ------------------------------------------------------------------

     (2) Aggregate number of securities to which transaction applies:

     ------------------------------------------------------------------

     (3) Per unit price or other  underlying  value of transaction
         computed pursuant to Exchange Act Rule 0-11 (set forth the amount
         on which the filing fee is calculated and state how it was
         determined):

     ------------------------------------------------------------------

     (4) Proposed maximum aggregate value of transaction:

     ------------------------------------------------------------------

     (5) Total fee paid:

     ------------------------------------------------------------------

[ ]  Fee paid previously with preliminary materials:

     ------------------------------------------------------------------

[ ]  Check box if any part of the fee is offset as provided by Exchange  Act
     Rule  0-11(a)(2)  and  identify the filing for which the offset fee was
     paid previously. Identify the previous filing by registration statement
     number, or the Form or Schedule and the date of its filing.

     (1) Amount Previously Paid:

     ------------------------------------------------------------------

     (2) Form, Schedule or Registration Statement No.:

     ------------------------------------------------------------------

     (3) Filing Party

     ------------------------------------------------------------------

     (4) Date Filed:

     ------------------------------------------------------------------

EX-99

[LOGO OMITTED]


                                  PRESS RELEASE



FOR IMMEDIATE RELEASE                               CONTACT:  Investor Relations
March 29, 2004                                                      804-217-5897


                               DYNEX CAPITAL, INC.
                  ANNOUNCES COMMENCEMENT OF EXCHANGE OFFER AND
              SPECIAL MEETINGS OF PREFERRED AND COMMON STOCKHOLDERS

     Dynex Capital, Inc. (NYSE: DX) today announced it is commencing an exchange
offer  for  up  to  70%  of  its  three  series  of  Preferred   Stock,  and  is
simultaneously seeking shareholder approval, at meetings scheduled to be held on
April 29, 2004, of certain aspects of its previously-announced  recapitalization
plan.

     The exchange  offer and the  approvals  being  sought from Dynex  Capital's
preferred and common stockholders involve separate components of a plan designed
to eliminate the dividends in arrears on the three series of Preferred Stock and
to recapitalize Dynex Capital. In the exchange offer:

     o  Dynex  Capital is  offering  to  exchange,  at the  election of the
        holder,  each share of Series A Preferred Stock, Series B Preferred
        Stock,  and Series C Preferred Stock for new unsecured Senior Notes
        that will bear  interest at an annual rate of 9.50%.  Each share of
        Series A Preferred  Stock may be exchanged  for $27.84 in principal
        amount of Senior Notes,  each share of Series B Preferred Stock may
        be exchanged for $28.42 in principal  amount of Senior  Notes,  and
        each share of Series C Preferred  Stock may be exchanged for $34.80
        in principal  amount of Senior Notes,  which equates to 116% of the
        original issue price of each series of Preferred Stock.

     o  In the exchange  offer,  Dynex Capital is offering to acquire up to
        an aggregate of 345,579 shares of Series A Preferred Stock, 481,819
        shares of Series B Preferred  Stock and 479,512  shares of Series C
        Preferred Stock.

     o  Interest  on these  notes  will be payable  semi-annually,  and the
        principal  of the Senior  Notes will be due and  payable in full on
        the third anniversary of their issuance.

     o  The Company will apply for a listing of the Senior Notes on the New
        York  Stock  Exchange,  and the  Senior  Notes  will be  issued  in
        denominations of $1,000 or integral multiples of $1,000.  Cash will
        be paid in lieu of any fraction of $1,000.

        The terms of the exchange  offer and the Senior Notes are  described in
greater detail in the Offering Circular for the exchange offer.

        In  addition,  the holders of each class of  Preferred  Stock are being
asked to  approve  the  conversion  of all of the  shares of Series A  Preferred
Stock, Series B Preferred Stock, and Series C Preferred Stock into a combination
of a new class of Series D Preferred Stock and shares of Common Stock, plus cash
in lieu of fractional  shares (the Series D conversion).  In connection with the
Series D conversion:

     o  The  holders of each class of  Preferred  Stock are being asked to
        approve an amendment of Dynex Capital's  articles of incorporation
        to  designate  the terms of the new Series D  Preferred  Stock and
        eliminate the existing  series of Preferred Stock by providing for
        their  automatic  conversion  into  Series D  Preferred  Stock and
        Common Stock.

     o  Each  share of Series A  Preferred  Stock will be  converted  into
        2.784 shares of Series D Preferred  Stock,  each share of Series B
        Preferred  Stock will be  converted  into 2.842 shares of Series D
        Preferred Stock and each share of Series C Preferred Stock will be
        converted into 3.48 shares of Series D Preferred Stock.

     o  Each share of Series A Preferred  Stock will receive 0.6373 shares
        of common  stock,  each  share of Series B  Preferred  Stock  will
        receive  0.6506  shares of common stock and each share of Series C
        Preferred Stock will receive 0.7967 shares of common stock.

     o  The new Series D Preferred  Stock will bear an annual  dividend of
        9.50%, and a liquidation  preference of $10 per share, and will be
        convertible  on a  one-for-one  basis  into  additional  shares of
        Common  Stock.  The Series D  Preferred  Stock  will also  convert
        automatically  into a new class of  senior  notes  (which  will be
        subordinate  to the Senior  Notes  issued in the  exchange  offer)
        bearing  an  annual   interest   rate  of  9.50%,   under  certain
        conditions.

     The  terms  of the  Series  D  Preferred  Stock,  and of the  Series  D
conversion,  are  described  further in a proxy  statement  being  mailed to all
holders of Preferred  Stock as of the record date of March 5, 2004.  Approval of
the  amendments  that will  effect  the Series D  conversion  will  require  the
approval at the special  meeting of the holders of Preferred Stock of two-thirds
of the outstanding shares of each series of Preferred Stock.

     Because  the  Series  D  conversion  will  result  in the  issuance  of
additional  shares of Common Stock,  Dynex  Capital is mailing a separate  proxy
statement  to the holders of its Common  Stock as of the record date of March 5,
2004,  seeking the  approval of the holders of Common  Stock of the  issuance of
additional  shares of Common Stock in  connection  with the Series D conversion,
and the  possible  future  issuance  of  shares  of  Common  Stock  upon  future
conversions of Series D Preferred Stock into Common Stock.

     The  completion  of the exchange  offer and the Series D conversion  is
subject to a number of conditions described in the Offering Circular,  including
the separate  approval by the common  stockholders  and each series of Preferred
Stock at special  meetings of the respective  shareholders on April 29, 2004. In
addition, the consummation of the exchange offer and the Series D conversion are
conditioned upon the issuance of a minimum $10 million in Senior Notes.

     DYNEX  CAPITAL  URGES  STOCKHOLDERS  TO REVIEW  THE  PROXY  STATEMENTS,
SCHEDULE TO, OFFERING CIRCULAR, LETTERS OF TRANSMITTAL AND OTHER DOCUMENTS FILED
WITH THE  SECURITIES  AND EXCHANGE  COMMISSION  ("SEC")  RELATED TO THE EXCHANGE
OFFER AND OTHER  RECAPITALIZATION  TRANSACTIONS  BECAUSE THEY CONTAIN  IMPORTANT
INFORMATION ABOUT THE EXCHANGE OFFER AND THE RECAPITALIZATION TRANSACTIONS.

     These  documents are available  without  charge in the SEC's website at
www.sec.gov.  A free copy of these  documents  may also be  obtained  from Dynex
Capital by calling  the  contact  number  listed  above or by calling  MacKenzie
Partners,  Inc., the  information  agent,  at (212) 929-5500 or (800)  322-2885.
STOCKHOLDERS  SHOULD  READ  THE  PROXY  STATEMENTS,   SCHEDULE  TO  AND  RELATED
INFORMATION  CAREFULLY  BEFORE MAKING ANY DECISION ON HOW TO VOTE AT THE SPECIAL
MEETINGS OF PREFERRED AND COMMON  STOCKHOLDERS OR WHETHER TO TENDER THEIR SHARES
IN THE EXCHANGE OFFER.

     Dynex  Capital is proposing  the Series D conversion  because the Board
believes,  among other things,  that it will simplify  Dynex  Capital's  capital
structure and should create improved  opportunities for the Company to engage in
strategic transactions,  access the capital markets, and/or reinvest in business
activities.   The  Board  of  Directors  has  unanimously   recommended  to  the
stockholders  that they vote "FOR" the amendment to Dynex Capital's  articles of
incorporation  and the  aspects  of the  recapitalization  to be voted on by the
common  stockholders.  Dynex  Capital's  Board  of  Directors  has not  made any
recommendation  to its preferred  stockholders  as to whether or not they should
tender any Preferred  Stock pursuant to the exchange  offer.  Certain members of
the  Company's  Board of  Directors  have  informed  the Company  that they will
participate in the exchange offer.

     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.

     Note: This document contains  "forward-looking  statements"  within the
meaning of the Private  Securities  Litigation Act of 1995. The words "believe",
"expect", "forecast",  "anticipate",  "estimate", "project", "plan", and similar
expressions identify  forward-looking  statements that are inherently subject to
risks and uncertainties,  some of which cannot be predicted or quantified. Dynex
Capital's  actual results and timing of certain  events could differ  materially
from those projected in or contemplated by the  forward-looking  statements as a
result of unforeseen  external factors.  As discussed in Dynex Capital's filings
with the SEC,  these  factors may  include,  but are not limited to,  changes in
general  economic and market  conditions,  disruptions  in the capital  markets,
fluctuations  in interest  rates,  the accuracy of subjective  estimates used in
determining  the fair value of certain  financial  assets of Dynex Capital,  the
impact of recently issued financial accounting standards, increases in costs and
other general competitive factors.


                                      # # #