TROUTMANSANDERS
    LLP
 ATTORNEYS
AT LAW
  
 BANK OF
AMERICA PLAZA
 600
PEACHTREE STREET, N.E. - SUITE 5200
 ATLANTA,
GEORGIA 30308-2216
 www.troutmansanders.com
 TELEPHONE:
404-885-3000
 FACSIMILE:
404-885-3900
  March 16,
2009
 
 Exhibit
8.1
 
 Dynex
Capital, Inc.
 4991 Lake
Brook Drive
  Glen
Allen, Virginia 23060
 
 Ladies
and Gentlemen:
 
 We have
acted as counsel to Dynex Capital, Inc., a Virginia corporation (“Dynex”), in
connection with the preparation of a prospectus supplement and prospectus
(together with the prospectus supplement, the “Prospectus”) included in a
registration statement on Form S-3, file number
333-149475 (the "Registration Statement")
and the Form 10-K for the year ended December 31, 2008, incorporated by
reference into the Registration Statement (the “Form 10-K”) filed with
the Securities and Exchange Commission (the “Commission”).  The
Registration Statement relates to the issuance and sale by Dynex from time to
time of shares of common stock, $0.01 par value per share (the “Common
Stock”).
  You have
requested our opinion regarding Dynex’s qualification as a real estate
investment trust (“REIT”) pursuant to sections 856 through 860 of the Internal
Revenue Code of 1986, as amended (the “Code”), for its 2006 and 2007 taxable
years.1   In addition, you have
requested our opinion with respect to whether Dynex’s organization and
contemplated method of operations are such as to enable it to continue to
qualify as a REIT for its 2008 taxable year and subsequent taxable
years.
  Dynex has
a number of wholly-owned subsidiaries (“qualified REIT subsidiaries”), the
income, liabilities, and assets of which are consolidated with those of Dynex
for U.S. federal income tax purposes.  This letter refers to Dynex,
together with such subsidiaries, as “Consolidated Dynex.”  In
connection with the opinions rendered below, we have examined the
following:
  1.           The
Articles of Incorporation of Dynex, as amended;
  2.           The
bylaws of Dynex as amended and restated on March 26, 2008;
  
 1 Unless
otherwise stated, all section references herein are to the
Code.
  ATLANTA • HONG KONG • LONDON • NEW YORK • NEWARK • NORFOLK • RALEIGH
 RICHMOND • SHANGHAI • TYSONS CORNER • VIRGINIA BEACH • WASHINGTON, D.C.
 
 TROUTMANSANDERS LLP
 ATTORNEYS
AT LAW
 Dynex
Capital, Inc.
 March 16,
2009
 Page 2
  3.           Consolidated
Dynex’s federal income tax returns for its taxable years 2001, 2002, 2003, 2004,
2005, 2006 and 2007; and
  4.           The
Prospectus and Form 10-K included in the Registration Statement with which this
letter has been filed.
  In
connection with the opinions rendered below, we have assumed that each of the
documents referred to above has been duly authorized, executed, and delivered,
is authentic, if an original, or accurate, if a copy, and has not been
amended.  We’ve further assumed that during Consolidated Dynex’s 2008
taxable year and subsequent taxable years, it will continue to conduct its
affairs in a manner that will make the representations set forth below true for
such years; and that neither Dynex nor any subsidiary of Dynex will make any
amendments to its organizational documents after the date of this opinion that
would affect Consolidated Dynex’s qualification as a REIT for any taxable
year.
  The
opinion set forth herein is premised on and conditioned on certain
representations made by an officer of Dynex Consolidated as to relevant factual
matters and covenants as to future operations dated as of the date hereof (the
"Officer's Certificate").  Further the opinion is based on the
assumption that Dynex Consolidated met certain asset, income and distribution
requirements applicable to REITs, and that if Dynex Consolidated were ultimately
found not to have met the REIT distribution requirements for
any  taxable year, such failure was due to reasonable cause and not
due to willful neglect.  In addition, for the purposes of rendering
this opinion, we have not made an independent investigation or reached
independent conclusions as to the assumptions that we have made or of the facts
set forth in any of the aforementioned documents, including, without limitation,
the Registration Statement and the Officer's Certificate.
  Based
solely on the documents, assumptions, and representations set forth above, and
without further investigation, we are of the opinion that Consolidated Dynex
qualified as a REIT in its 2006 and 2007 taxable years and that its organization
and contemplated method of operation are such that it will continue to so
qualify for its 2008 taxable year and subsequent taxable
years.  Except as described herein we have performed no further due
diligence and have made no efforts to verify the accuracy or genuineness of the
documents, assumptions, and representations set forth above.
  The
ability of Consolidated Dynex to qualify as a REIT for subsequent taxable years
will depend on future events, some of which are not within the control of
Consolidated Dynex.  Additionally, it is not possible to predict
whether the statements, representations, warranties or assumptions on which we
have relied to issue this opinion will continue to be accurate in the
future.  We will not review Consolidated Dynex’s compliance with the
documents or assumptions, or the representations set forth
above.  Accordingly, no assurance can be given that the actual results
of Consolidated Dynex’s
   TROUTMANSANDERS LLP
 ATTORNEYS
AT LAW
 Dynex
Capital, Inc.
 March 16,
2009
 Page
3
  operations
for any given taxable year will satisfy the requirements for qualification and
taxation as a REIT.
  The
foregoing opinion is based on current provisions of the Code and Treasury
Regulations promulgated thereunder, published administrative interpretations
thereof, and published court decisions, any of which may be changed at any time,
possibly with retroactive effect (collectively “Law”).  The Internal
Revenue Service has not yet issued Regulations or administrative interpretations
with respect to various provisions of the Code relating to REIT
qualification.  No assurance can be given that the Law will not change
in a way that will prevent Consolidated Dynex from qualifying as a REIT or that
the Internal Revenue Service will not disagree with this opinion.
  This
opinion is limited to the federal tax laws of the United States of America and
is expressed as of the date hereof.  This opinion also is limited to
the matters expressly stated, and no opinion is implied or may be inferred
beyond such matters.  This opinion is further limited in that it does
not purport to opine on the federal income tax consequences that may result to
the extent that any of the representations or assumptions contained in this
opinion are not true or there has been an adverse change in the
Law.  We do not assume any obligation to update or supplement this
opinion to reflect any fact or circumstance which hereafter comes to our
attention or any change in Law which hereafter occurs.  This opinion
represents our best legal judgment, but it has no binding effect or official
status of any kind, and no assurance can be given that contrary positions may
not be taken by the Internal Revenue Service or a court considering the
issues.This
opinion letter is solely for the information and use of the addressee and may
not be relied upon, quoted, or otherwise used for any purpose by any other
person without our express prior written consent.
  We
consent to the references to this firm in the Prospectus filed with the
Registration Statement and to the filing of this opinion as an exhibit to the
Registration Statement in which the Prospectus is included.  In giving
this consent, we do not thereby admit that we are within the category of persons
whose consent is required under Section 7 of the Securities Act, or the Rules
and Regulations of the Commission thereunder.
  
 Very
truly yours,
 
 
 
 /s/
TROUTMAN SANDERS LLP