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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
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                                    FORM 8-K

                                 CURRENT REPORT
     Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

      Date of Report (Date of earliest event reported): September 14, 2004
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                               DYNEX CAPITAL, INC.
             (Exact name of registrant as specified in its charter)

                                                                       

               Virginia                                 1-9819                               52-1549373
     (State or other jurisdiction                     (Commission                         (I.R.S. Employer
           of incorporation)                         File Number)                        Identification No.)

        4551 Cox Road, Suite 300,                                                           23060-6740
          Glen Allen, Virginia                                                              (Zip Code)
(Address of principal executive offices)

                   

       Registrant's telephone number, including area code: (804) 217-5800

                                 Not Applicable
          (Former name or former address, if changed since last report)


     Check the  appropriate  box below if the Form 8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions:

     |_| Written  communications  pursuant to Rule 425 under the  Securities Act
         (17 CFR 230.425)

     |_| Soliciting  material pursuant to Rule 14a-12 under the Exchange Act (17
         CFR 240.14a-12)

     |_| Pre-commencement  communications  pursuant to Rule  14d-2(b)  under the
         Exchange Act (17 CFR 240.14d-2(b))

     |_| Pre-commencement  communications  pursuant to Rule  13e-4(c)  under the
         Exchange Act (17 CFR 240.13e-4(c))

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Item 1.01         Entry into a Material Definitive Agreement.

     On September  14, 2004,  Dynex  Capital,  Inc. (the  "Company")  executed a
definitive  Asset  Purchase  Agreement  dated as of September 13, 2004 among GLS
Capital-Cuyahoga,   Inc.,  a  subsidiary   of  the  Company   ("GLS   Capital"),
GLS-Cuyahoga Lien Pool One, Inc., a wholly-owned subsidiary of GLS Capital ("GLS
Lien Pool One"), the Company and Plymouth Park Tax Services, LLC ("PPTS"). Under
this  agreement,  GLS  Capital and GLS Lien Pool One sold  substantially  all of
their  tax  lien   portfolio  and  other  assets  to  PPTS,   and  PPTS  assumed
substantially  all of their  liabilities.  The total  proceeds from the sale are
approximately  $20  million.  Approximately  $19  million  of the  proceeds  are
expected at the first  closing  scheduled to occur on September  20, 2004,  $700
thousand  of which  will be held in  escrow  for up to one  year  for  customary
representations  and  warranties.  A  second  closing  for  the  balance  of the
proceeds,  which will also be held in escrow,  is expected  to occur  within the
next sixty days. The amount of the  additional  proceeds is subject to a maximum
$750  thousand,  and is based on the excess of new tax liens  purchased  by PPTS
from the Treasurer, Cuyahoga County, under the terms of the contract between GLS
Capital and the Treasurer,  Cuyahoga County, assigned to PPTS in connection with
the entering into the Agreement.

                                    SIGNATURE

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                          DYNEX CAPITAL, INC.


Date:    September 17, 2004               By:  /s/ Stephen J. Benedetti
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                                                 Stephen J. Benedetti
                                                 Executive Vice President and
                                                   Chief Financial Officer