##### Table of Contents



U.S. Securities and Exchange Commission
 Washington, D.C. 20549
 Form 10-Q
 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2006
 Commission file number 000-24498
 DIAMOND HILL INVESTMENT GROUP, INC
  Ohio
    
    65-0190407(State of incorporation)
    
    (I.R.S. Employer Identification No.)
 325 John H. McConnell Blvd, Suite 200, Columbus, Ohio 43215
 Former Address: 375 N Front Street, Suite 300, Columbus, Ohio 43215
 (Registrants telephone number, including area code)
 þ o
  o o þ
 o þ




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##### 



PAGEPart I: FINANCIAL INFORMATIONItem 1. Consolidated Financial Statements
    
    3Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operation
    
    16-21Item 3. Quantitative and Qualitative Disclosures About Market RiskItem 4. Controls and Procedures
    
    21Part II: OTHER INFORMATION
    
    21-22Item 1. Legal Proceedings
    
    21Item 2. Unregistered Sales of Equity Securities and use of Proceeds
    
    21Item 3. Defaults Upon Senior Securities
    
    21Item 4. Submission of Matters to a Vote of Security Holders
    
    22Item 5. Other Information
    
    22Item 6. Exhibits
    
    22Signatures
    
    23EX-31.1EX-31.2EX-32.1
  2




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##### Table of Contents



PART I FINANCIAL INFORMATION
 
 ITEM 1: Financial Statements
 Diamond Hill Investment Group, Inc.  Consolidated Balance Sheets (unaudited)
 6/30/2006
    
    
    12/31/2005ASSETSCash and cash equivalents
    
    $
    1,817,201
    
    
    $
    2,532,334Investment portfolio (note 3)
    
    
    13,262,284
    
    
    
    5,855,370Accounts receivable
    
    
    3,190,704
    
    
    
    1,897,701Prepaid expenses
    
    
    668,816
    
    
    
    580,109Fixed assets, net of depreciation and other assets
    
    
    247,502
    
    
    
    111,863Deferred taxes (note 6)
    
    
    410,690
    
    
    
    1,770,132Total assets
    
    $
    19,597,197
    
    
    $
    12,747,509LIABILITIES AND SHAREHOLDERS EQUITYLiabilitiesAccounts payable and accrued expenses
    
    
    653,302
    
    
    
    336,497Accrued incentive compensation
    
    
    5,002,772
    
    
    
    1,550,000Total Liabilities
    
    
    5,656,074
    
    
    
    1,886,497Shareholders Equity (note 4)Common stock, no par value
7,000,000 shares authorized; 1,827,972 issued
1,786,835 outstanding at June 30, 2006
1,755,899 outstanding at December 31, 2005
    
    
    14,148,002
    
    
    
    13,199,444Preferred stock, undesignated, 1,000,000 shares
authorized and unissued
    
    
    
    
    
    
    Treasury stock, at cost
41,137 shares at June 30, 2006
72,073 shares at December 31, 2005
    
    
    (235,367
    )
    
    
    (412,370
    )Deferred compensation
    
    
    (958,611
    )
    
    
    (292,381
    )Retained earnings / (Accumulated deficit)
    
    
    987,099
    
    
    
    (1,633,681
    )Total shareholders equity
    
    
    13,941,123
    
    
    
    10,861,012Total liabilities and shareholders equity
    
    $
    19,597,197
    
    
    $
    12,747,509
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Diamond Hill Investment Group, Inc.  Consolidated Statements of Income (unaudited)
 THREE MONTHS ENDED
    
    
    SIX MONTHS ENDED6/30/2006
    
    
    6/30/2005
    
    
    6/30/2006
    
    
    6/30/2005INVESTMENT MANAGEMENT REVENUE:Mutual funds
    
    $
    3,013,794
    
    
    $
    674,744
    
    
    $
    5,230,735
    
    
    $
    1,197,461Managed accounts
    
    
    1,488,619
    
    
    
    504,126
    
    
    
    2,787,039
    
    
    
    933,718Private investment partnerships
    
    
    831,696
    
    
    
    203,842
    
    
    
    2,220,189
    
    
    
    465,198Total investment management revenue
    
    
    5,334,109
    
    
    
    1,382,712
    
    
    
    10,237,963
    
    
    
    2,596,377OPERATING EXPENSES:Compensation and related costs
    
    
    3,546,356
    
    
    
    661,029
    
    
    
    6,918,868
    
    
    
    1,300,444Legal and audit
    
    
    67,990
    
    
    
    23,027
    
    
    
    125,268
    
    
    
    61,311General and administrative
    
    
    193,750
    
    
    
    129,354
    
    
    
    384,407
    
    
    
    261,970Sales and marketing
    
    
    75,773
    
    
    
    71,664
    
    
    
    133,216
    
    
    
    109,865Total operating expenses
    
    
    3,883,869
    
    
    
    885,074
    
    
    
    7,561,759
    
    
    
    1,733,590NET OPERATING INCOME
    
    
    1,450,240
    
    
    
    497,638
    
    
    
    2,676,204
    
    
    
    862,787Mutual fund administration, net (note 8)
    
    
    355,547
    
    
    
    (43,570
    )
    
    
    623,838
    
    
    
    (117,702
    )Investment return
    
    
    364,982
    
    
    
    61,134
    
    
    
    790,100
    
    
    
    166,751INCOME BEFORE TAXES
    
    
    2,170,769
    
    
    
    515,202
    
    
    
    4,090,142
    
    
    
    911,836Income tax provision
    
    
    (802,601
    )
    
    
    
    
    
    
    (1,469,362
    )
    
    
    NET INCOME
    
    $
    1,368,168
    
    
    $
    515,202
    
    
    $
    2,620,780
    
    
    $
    911,836Earnings per shareBasic
    
    $
    0.77
    
    
    $
    0.31
    
    
    $
    1.48
    
    
    $
    0.56Diluted
    
    $
    0.62
    
    
    $
    0.26
    
    
    $
    1.20
    
    
    $
    0.47Weighted average shares outstandingBasic
    
    
    1,775,339
    
    
    
    1,642,042
    
    
    
    1,765,018
    
    
    
    1,632,216Diluted
    
    
    2,200,261
    
    
    
    1,951,967
    
    
    
    2,184,152
    
    
    
    1,950,530
  4




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Diamond Hill Investment Group, Inc.  Consolidated Statements of Cash Flow (unaudited)
 SIX MONTHS ENDED6/30/2006
    
    
    6/30/2005CASH FLOWS FROM OPERATING ACTIVITIES:Net Income
    
    $
    2,620,780
    
    
    $
    911,836Adjustments to reconcile net income to net cash used in
operating activities:Depreciation on property and equipment
    
    
    21,500
    
    
    
    18,724Amortization of deferred compensation
    
    
    63,045
    
    
    
    18,881(Increase) decrease in accounts receivable
    
    
    (1,293,003
    )
    
    
    (362,709
    )(Increase) decrease in deferred taxes
    
    
    1,409,360
    
    
    
    Stock option expense
    
    
    21,567
    
    
    
    (Increase) decrease in unrealized gains
    
    
    (660,086
    )
    
    
    (120,920
    )Increase (decrease) in accrued liabilities
    
    
    3,769,577
    
    
    
    (146,161
    )Other changes in assets and liabilities
    
    
    (88,707
    )
    
    
    (104,721
    )Net cash provided by operating activities
    
    
    5,864,033
    
    
    
    214,930CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of property and equipment
    
    
    (157,137
    )
    
    
    (4,375
    )Investment portfolio activity
    
    
    (6,746,828
    )
    
    
    (398,728
    )Net cash used in investing activities
    
    
    (6,903,965
    )
    
    
    (403,103
    )CASH FLOWS FROM FINANCING ACTIVITIES:Sale of treasury stock
    
    
    324,799
    
    
    
    354,238NET (DECREASE) INCREASE IN CASH
    
    
    (715,133
    )
    
    
    166,065CASH, BEGINNING OF PERIOD
    
    
    2,532,334
    
    
    
    102,566CASH, END OF PERIOD
    
    $
    1,817,201
    
    
    $
    268,631Cash paid during the period for:Interest
    
    
    
    
    
    
    Income taxes
    
    $
    60,000
    
    
    
    
  5




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ORGANIZATION AND NATURE OF BUSINESS
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Reclassifications
  Principles of Consolidation
  6




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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Accounts Receivable
  Regulatory Requirements
  Valuation of Investment Portfolio
  Limited Partnership Interests
  Property and Equipment
  Incentive Compensation
  7




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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
 Earnings Per Share
  For the three months ended June 30, 2006:
    

Numerator
    

Denominator
    
    AmountBasic Earnings
    
    $
    1,368,168
    
    
    
    1,775,339
    
    
    
    $0.77Diluted Earnings
    
    $
    1,368,168
    
    
    
    2,200,261
    
    
    
    $0.62
 For the three months ended June 30, 2005:
    

Numerator
    
    Denominator
    
    AmountBasic Earnings
    
    $
    515,202
    
    
    
    1,642,042
    
    
    
    $0.31Diluted Earnings
    
    $
    515,202
    
    
    
    1,951,967
    
    
    
    $0.26
 For the six months ended June 30, 2006
    
    Numerator
    
    Denominator
    
    AmountBasic Earnings
    
    $
    2,620,780
    
    
    
    1,765,018
    
    
    
    $1.48Diluted Earnings
    
    $
    2,620,780
    
    
    
    2,184,152
    
    
    
    $1.20
 For the six months ended June 30, 2005
    
    Numerator
    
    Denominator
    
    AmountBasic Earnings
    
    $
    911,836
    
    
    
    1,632,216
    
    
    
    $0.56Diluted Earnings
    
    $
    911,836
    
    
    
    1,950,530
    
    
    
    $0.47
 Fair Value of Financial Instruments
  8




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INVESTMENT PORTFOLIO
  UnrealizedAs of June 30, 2006:
    
    Market
    
    
    Cost
    
    
    Gains (Losses)Diamond Hill Small Cap Fund
    
    $
    62,972
    
    
    $
    50,632
    
    
    $
    12,340Diamond Hill Small-Mid Cap Fund
    
    
    315,000
    
    
    
    300,000
    
    
    
    15,000Diamond Hill Large Cap Fund
    
    
    266,267
    
    
    
    250,477
    
    
    
    15,790Diamond Hill Select Fund
    
    
    314,690
    
    
    
    300,000
    
    
    
    14,690Diamond Hill Long-Short Fund
    
    
    271,416
    
    
    
    250,657
    
    
    
    20,759Diamond Hill Strategic Income Fund
    
    
    1,562,348
    
    
    
    1,517,805
    
    
    
    44,543Diamond Hill Investment Partners, LP
    
    
    6,421,588
    
    
    
    4,945,792
    
    
    
    1,475,796Diamond Hill Investment Partners II, LP
    
    
    4,048,003
    
    
    
    4,000,000
    
    
    
    48,003Total
    
    
    13,262,284
    
    
    
    10,759,302
    
    
    
    1,646,921
 UnrealizedAs of December 31, 2005
    
    Market
    
    
    Cost
    
    
    Gains (Losses)Diamond Hill Small Cap Fund
    
    $
    60,817
    
    
    $
    50,632
    
    
    $
    10,185Diamond Hill Small-Mid Cap Fund
    
    
    300,000
    
    
    
    300,000
    
    
    
    Diamond Hill Large Cap Fund
    
    
    58,918
    
    
    
    50,477
    
    
    
    8,441Diamond Hill Select Fund
    
    
    300,000
    
    
    
    300,000
    
    
    
    Diamond Hill Long-Short Fund
    
    
    60,405
    
    
    
    50,657
    
    
    
    9,748Diamond Hill Strategic Income Fund
    
    
    1,024,171
    
    
    
    977,295
    
    
    
    46,876Diamond Hill Investment Partners, LP
    
    
    4,051,059
    
    
    
    3,139,474
    
    
    
    911,585Total
    
    
    5,855,370
    
    
    
    4,868,535
    
    
    
    986,835
  2006
    
    
    2005Total assets
    
    $
    240,998,126
    
    
    $
    87,116,252Total liabilities
    
    
    91,944,958
    
    
    
    39,598,197Net assets
    
    
    149,053,168
    
    
    
    47,518,055Net income
    
    
    14,505,059
    
    
    
    2,597,125DHCMs portion of net assets
    
    
    10,469,591
    
    
    
    1,386,047DHCMs portion of net income
    
    
    2,419,486
    
    
    
    727,766
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INVESTMENT PORTFOLIO
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2006
    
    2005
    
    2006
    
    2005Management Fee
    
    $
    225,871
    
    
    $
    110,651
    
    
    $
    413,872
    
    
    $
    161,220Incentive Fee
    
    
    605,825
    
    
    
    93,192
    
    
    
    1,806,317
    
    
    
    303,978
  CAPITAL STOCK
 Common Shares
  Treasury Stock
  Authorization of Preferred Stock
  10




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STOCK-BASED COMPENSATION
 Equity Incentive Plans
 2005 Employee and Director Equity Incentive Plan
  1993 Non-qualified and Incentive Stock Option Plan
  Equity Compensation Grants
  401k Plan
  11




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STOCK-BASED COMPENSATION (continued)
 Other Stock-Based Compensation Information
   Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net income, as reported
    
    
    1,368,168
    
    
    
    515,202
    
    
    
    2,620,780
    
    
    
    911,836Add:Stock-based employee
compensation expense
included in reported
net income, net of
related tax effects
    
    
    6,156
    
    
    
    
    
    
    
    21,567
    
    
    
    Deduct:Total stock-based
employee
compensation expense
determined under
fair value based
methods for all
awards net of
related tax effects
    
    
    (6,156
    )
    
    
    (12,885
    )
    
    
    (21,567
    )
    
    
    (27,594
    )Pro forma net income
    
    
    1,368,168
    
    
    
    502,317
    
    
    
    2,620,780
    
    
    
    884,242Earnings per share:Basic  as reported
    
    $
    0.77
    
    
    $
    0.31
    
    
    $
    1.48
    
    
    $
    0.56Basic  pro forma
    
    $
    0.77
    
    
    $
    0.31
    
    
    $
    1.48
    
    
    $
    0.54Diluted  as reported
    
    $
    0.62
    
    
    $
    0.26
    
    
    $
    1.20
    
    
    $
    0.47Diluted  pro forma
    
    $
    0.62
    
    
    $
    0.26
    
    
    $
    1.20
    
    
    $
    0.45
  12




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STOCK-BASED COMPENSATION (continued)
  Options
    
    
    WarrantsExercise
    
    
    
    
    
    
    ExerciseShares
    
    
    Price
    
    
    Shares
    
    
    PriceOutstanding December 31, 2004
    
    
    260,202
    
    
    $
    10.581
    
    
    
    280,400
    
    
    $
    12.897Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    9,000
    
    
    
    10.625
    
    
    
    10,000
    
    
    
    14.375Expired unexercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding June 30, 2005
    
    
    251,202
    
    
    
    10.580
    
    
    
    270,400
    
    
    
    12.385Exercisable June 30, 2005
    
    
    165,202
    
    
    $
    15.593
    
    
    
    270,400
    
    
    $
    12.385Outstanding December 31, 2005
    
    
    303,002
    
    
    $
    14.481
    
    
    
    259,400
    
    
    $
    12.778Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    5,200
    
    
    
    14.903
    
    
    
    2,000
    
    
    
    11.250Expired unexercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding June 30, 2006
    
    
    297,802
    
    
    
    14.473
    
    
    
    257,400
    
    
    
    12.789Exercisable June 30, 2006
    
    
    247,802
    
    
    $
    16.456
    
    
    
    257,400
    
    
    $
    12.789
 13




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STOCK-BASED COMPENSATION (continued)
  Options Outstanding
    
    
    
    
    
    
    Options ExercisableWeightedAverageRemaining
    
    
    Weighted
    
    
    
    
    
    
    WeightedNumber
    
    
    Contractual
    
    
    Average
    
    
    Options
    
    
    AverageExercise Prices
    
    Outstanding
    
    
    Life
    
    
    Exercise Price
    
    
    Exercisable
    
    
    Exercise Price$73.75
    
    
    16,202
    
    
    1.87 years
    
    $
    73.75
    
    
    
    16,202
    
    
    $
    73.75$7.95
    
    
    10,000
    
    
    4.12 years
    
    $
    7.95
    
    
    
    10,000
    
    
    $
    7.95$8.438
    
    
    10,000
    
    
    4.47 years
    
    $
    8.438
    
    
    
    10,000
    
    
    $
    8.438$28.10
    
    
    71,600
    
    
    4.48 years
    
    $
    28.10
    
    
    
    71,600
    
    
    $
    28.10$8.45
    
    
    10,000
    
    
    4.76 years
    
    $
    8.45
    
    
    
    10,000
    
    
    $
    8.45$5.25
    
    
    60,000
    
    
    5.05 years
    
    $
    5.25
    
    
    
    50,000
    
    
    $
    5.25$4.50
    
    
    120,000
    
    
    6.94 years
    
    $
    4.50
    
    
    
    80,000
    
    
    $
    4.50Total
    
    
    297,802
    
    
    5.44 years
    
    $
    14.473
    
    
    
    247,802
    
    
    $
    16.456
 Warrants Outstanding
    
    
    
    
    
    
    Warrants ExercisableWeightedAverageRemaining
    
    
    Weighted
    
    
    
    
    
    
    WeightedNumber
    
    
    Contractual
    
    
    Average
    
    
    Number
    
    
    AverageExercise Prices
    
    Outstanding
    
    
    Life
    
    
    Exercise Price
    
    
    Exercisable
    
    
    Exercise Price$10.625
    
    
    13,000
    
    
    0.68 years
    
    $
    10.625
    
    
    
    13,000
    
    
    $
    10.625$73.75
    
    
    14,000
    
    
    1.87 years
    
    $
    73.75
    
    
    
    14,000
    
    
    $
    73.75$22.50
    
    
    16,400
    
    
    2.75 years
    
    $
    22.50
    
    
    
    16,400
    
    
    $
    22.50$11.25
    
    
    12,000
    
    
    3.67 years
    
    $
    11.25
    
    
    
    12,000
    
    
    $
    11.25$8.75
    
    
    2,000
    
    
    3.87 years
    
    $
    8.75
    
    
    
    2,000
    
    
    $
    8.75$8.00
    
    
    200,000
    
    
    3.87 years
    
    $
    8.00
    
    
    
    200,000
    
    
    $
    8.00Total
    
    
    257,400
    
    
    3.52 years
    
    $
    12.789
    
    
    
    257,400
    
    
    $
    12.789
 INCOME TAXES
  14




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OPERATING LEASES
  2006
    
    2007
    
    2008
    
    2009
    
    2010
    
    2011
    
    2012
    
    2013$70,352
    
    $
    156,900
    
    
    $
    171,700
    
    
    $
    177,100
    
    
    $
    182,500
    
    
    $
    188,000
    
    
    $
    195,000
    
    
    $
    82,600
  MUTUAL FUND ADMINISTRATION
  15




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ITEM 2: Managements Discussion and Analysis of Financial Condition and Results of Operation
 Forward-looking Statements
  General
   Assets Under Management
  June 30, 2006
    
    
    December 31, 2005
    
    
    June 30, 2005Mutual Funds
    
    $
    1,868
    
    
    
    907
    
    
    
    396Separately Managed Accounts
    
    $
    716
    
    
    
    513
    
    
    
    335Private Investment Partnerships
    
    $
    149
    
    
    
    111
    
    
    
    80Total Assets Under Management
    
    $
    2,733
    
    
    
    1,531
    
    
    
    811
 Three months ended June 30, 2006 compared to three months ended June 30, 2005
 
 16




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17




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Six months ended June 30, 2006 compared to six months ended June 30, 2005
        
 18




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Liquidity and Capital Resources
      Impact of Inflation and Other Factors
  19




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ITEM 3: Quantitative and Qualitative Disclosures About Market Risk
  
 ITEM 4: Controls and Procedures
 
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PART II: OTHER INFORMATION
 
 ITEM 1: Legal Proceedings 
 ITEM 1A: Risk Factors
  
 ITEM 2: Unregistered Sales of Equity Securities and use of Proceeds
 
 ITEM 3: Defaults Upon Senior Securities 
 
 ITEM 4: Submission of Matters to a Vote of Security Holders
   Name
    
    Votes For
    
    
    Votes WithheldR. H. Dillon
    
    
    1,588,345
    
    
    
    658David P. Lauer
    
    
    1,587,049
    
    
    
    1,954Dr. James G. Mathias
    
    
    1,587,469
    
    
    
    1,534David R. Meuse
    
    
    1,576,723
    
    
    
    12,280Diane D. Reynolds
    
    
    1,587,549
    
    
    
    1,454Donald B. Shackelford
    
    
    1,583,832
    
    
    
    5,171
  Votes For
    
    Votes Against
    
    Abstain
    
    Not Voted716,757
    
    
    134,028
    
    
    
    22,190
    
    
    
    716,028
 
 ITEM 5: Other Information 
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ITEM 6: Exhibits
 3.1
    
    Amended and Restated Articles of Incorporation of the Company. (Incorporated by
reference from Form 8-K Current Report for the event on May 2, 2002 filed with the SEC
on May 7, 2002; File No. 000-24498.)3.2
    
    Code of Regulations of the Company. (Incorporated by reference from Form 8-K Current
Report for the event on May, 2002 filed with the SEC on May 7, 2002; File No.
000-24498.)10.1
    
    Representative Investment Management Agreement between Diamond Hill Capital
Management, Inc. and the Diamond Hill Funds. (Incorporated by reference from Form
N1-A filed with the SEC on December 30, 2005; File No. 811-08061.)10.2
    
    Third Amended and Restated Administrative, Fund Accounting, and Transfer Agency
Services Agreement between Diamond Hill Capital Management, Inc. and the Diamond Hill
Funds. (Incorporated by reference from Form N1-A filed with the SEC on December 30,
2005; File No. 811-08061.)10.3
    
    1993 Non-Qualified and Incentive Stock Option Plan. (Incorporated by reference from
Form DEF 14A filed with the SEC on July 21, 1998; File No. 000-24498.)10.4
    
    Employment Agreement between the Company and Roderick H. Dillon, Jr. dated May 11,
2000. (Incorporated by reference from Form 10-KSB for 2002 filed with the SEC on
March 28, 2003; File No. 000-24498.)10.5
    
    Amendment dated April 26, 2006 to the Employment Agreement between the Company and
Roderick H. Dillon, Jr. dated May 11, 2000. (Incorporated by reference from Form 8-K
Current Report filed with the SEC on May 2, 2006; File No. 000-24498.)10.6
    
    Employment Agreement between the Company and James F. Laird dated October 24, 2001.
(Incorporated by reference from Form 10-KSB for 2002 filed with the SEC on March 28,
2003; File No. 000-24498.)10.7
    
    Form of Subscription Agreement for Common Shares of Diamond Hill Investment Group,
Inc. executed by subscribers as part of the private placement on July 21, 2004.
(Incorporated by reference from Form 10-QSB for the quarter ended September 30, 2004
filed with the SEC on November 15, 2004; File No. 000-24498.)10.8
    
    2005 Employee and Director Equity Incentive Plan. (Incorporated by reference from
Form DEF 14A filed with the SEC on April 5, 2005; File No. 000-24498.)10.9
    
    2006 Performance-Based Compensation Plan. (Incorporated by reference from Form 8-K
Current Report filed with the SEC on May 16, 2006; File No. 000-24498.)14.1
    
    Code of Business Conduct and Ethics. (Incorporated by reference from Form DEF 14A
filed with the SEC on April 9, 2004; File No. 000-24498.)31.1
    
    Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a).31.2
    
    Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a).32.1
    
    Section 1350 Certifications.
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SIGNATURES
   Signature
    
    Title
    
    Date/s/ R. H. Dillon

R. H. Dillon
    

President,
Chief Executive Officer, and a Director
    
    August 11, 2006/s/ James F. Laird

James F. Laird
    

Chief
Financial Officer, Treasurer, and Secretary
    
    August 11, 2006
 23