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                                                                   Exhibit 10.20

                        DIAGNOSTIC HEALTH SERVICES, INC.
                       2777 Stemmons Freeway, Suite 1525
                              Dallas, Texas 75207

                                           January 8, 1999

Mr. Max W. Batzer
4215 Cochran Chapel Road
Dallas, TX 75209

Dear Max:

     This letter will confirm our agreement with respect to the modified terms
of your employment with Diagnostic Health Services, Inc. (the "Company"), from
and after the Effective Date set forth below.  This agreement expressly
supersedes in its entirety your outstanding employment agreement with the
Company dated November 1, 1991 (as heretofore amended from time to time), which
existing agreement shall be of no further or effect from and after such
Effective Date.

     Effective upon the execution and delivery of this agreement (the "Effective
Date," except that the modification of your compensation reflected in this
agreement shall not become effective until January 15, 1999), your employment
with the Company will be on the following terms and conditions:

     1.   Nature of Employment.
          -------------------- 

          (a)  You will be employed as, and will serve with the title of,
Chairman of the Company, in which capacity you will perform such reasonable
executive-level duties and responsibilities as may reasonably be requested from
time to time by the Board of Directors of the Company (the "Board") and the
Chief Executive Officer of the Company; provided, however, that you will not
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have any responsibilities related to the Company's daily operations, and you
will not have direct supervision of any Company personnel other than as and to
the extent required in your capacity as the Chairman of the Company, Chairman of
the Board, or as a member of the Board.  Throughout the term of this agreement,
for so long as you are ready, willing and able to serve, the Company will cause
you to be included in management's slate of nominees for each election of
directors of the Company, and, in addition to your title as "Chairman of the
Company," you may, as long as you are serving as a director of the Company and
prior to any "change in control" or "material stock event" (as such terms are
defined in paragraph 3(f) below), retain the title of "Chairman of the Board" of
the Company.  Furthermore, throughout the term of this Agreement, for so long as
you continue to serve as a director of the Company, the Company will not, in the
absence of good cause, take any action to remove you from any committee of the
Board on which you are now serving..  Anything elsewhere contained in this
agreement to the contrary notwithstanding, (i) you may at any time, in your sole
and absolute discretion, resign as a director and/or officer of the Company
without affecting your status as an employee of the Company or your rights and
benefits as an employee, under this 
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agreement, or under any stock option, and (ii) in the event of any "change in
control" or "material stock event" (as such terms are defined in paragraph 3(f)
below), (A) the Company may require you to relinquish the title of "Chairman of
the Board" at any time thereafter, and (B) the Company or you may, at its or
your option at any time thereafter, change your title and position from
"Chairman of the Company" to another mutually agreeable title and position,
without affecting your status as an employee of the Company or your rights and
benefits as an employee, under this agreement, or under any stock option.

          (b)  In performing your assigned duties hereunder, you will (i) devote
such portion of your business time as may be necessary for the performance of
such duties, (ii) observe and carry out such reasonable rules, regulations,
policies, directions and restrictions as may be established from time to time by
the Board, and (iii) do such travelling as may reasonably be required in
connection with the performance of such duties.  Subject to the foregoing, you
will have substantial discretion as to the manner in which you perform your
services hereunder (i.e., in person, by phone, by fax or e-mail, etc.), and as
to the specific hours of your attendance at the Company's offices.

          (c)  In order to assist you in performing your duties hereunder, the
Company will provide you with an office at the Company's headquarters (which may
not necessarily be the same office which you presently occupy, but will be a
mutually reasonably agreeable exterior office with a window on the same floor as
other senior executives) or, at your option, at another office of the Company or
one of its subsidiaries, and with reasonable support services, including shared
secretarial support, support staff, office facilities, telephone facilities as
generally available to other senior executives, a computer terminal in your
office linked to the local area network and its software capabilities, and the
computer hardware currently in place at your home.

          (d)  The Company acknowledges your stated desire to develop business
interests outside of the Company, and that this may require significant portions
of your business time at times which might conflict with your performance of
assigned duties for the Company.  We hereby agree to work with one another to
balance these respective interests, and your devotion of substantial time to
such outside business interests will not be deemed a breach or violation of this
agreement, so long as such outside business interests do not constitute or
entail a violation of paragraph 5 below.

     2.   Term of Agreement.
          ----------------- 

          (a)  Subject to prior termination in accordance with the further
provisions of this paragraph 2, the term of this agreement will begin on the
Effective Date and thereafter continue through and including December 31, 2001.

          (b)  Anything contained in paragraph 2(a) above to the contrary
notwithstanding, the Company will have the right to terminate this agreement,
effective upon written notice to you, in the event that (i) you commit any
fraud, criminal misconduct, self-dealing or gross or willful misconduct from and
after the date hereof in connection with the 

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performance of your duties and responsibilities hereunder, (ii) you become
physically or mentally disabled or impaired so as to prevent you from continuing
the performance of substantially all of your duties and responsibilities
hereunder for a period in excess of one (1) year, (iii) you willfully fail or
refuse (other than on account of illness or other disability) to devote such
reasonable amount of time and effort as may be required to perform your assigned
duties hereunder, and such breach is not cured within sixty (60) days after
written notice thereof to you, (iv) you willfully fail or refuse to observe or
carry out such reasonable rules, regulations, policies, directions and/or
restrictions as may from time to time be established by the Board, and such
breach is not cured within sixty (60) days after written notice thereof to you,
or (v) you willfully commit any other material breach of any of the material
provisions of this agreement, and such breach is not cured within sixty (60)
days after written notice thereof to you. As used herein, acts or omissions
shall be deemed to have been "willful" if done with knowledge of impropriety or
intent to harm the Company or any of its subsidiaries, or without reasonable
good faith belief as to the propriety thereof. Any termination of this agreement
pursuant to paragraph 2(b)(ii) shall not be deemed a termination for cause for
any purpose.

          (c)  Anything contained in paragraph 2(a) above to the contrary
notwithstanding, you may terminate this agreement, effective upon written notice
to the Company, in the event that the Company willfully commits any material
breach of any of the material provisions hereof, and such breach is not cured
within sixty (60) days after written notice thereof to the Company.  For
purposes hereof, acts or omissions shall be deemed to have been "willful" if
done with knowledge of impropriety or intent to harm you or without reasonable
good faith belief as to the propriety thereof. For purposes of stock options,
any proper termination of this agreement pursuant to this paragraph 2(c) shall
be deemed to have been done with the Company's consent in writing (as evidenced
by this agreement, and regardless of the absence of any subsequent written
confirmation).

          (d)  This agreement will automatically terminate upon your death, and
such termination shall not be deemed a termination for cause for any purpose.

          (e)  Upon any termination of this agreement as hereinabove provided,
you will be entitled to receive any and all unpaid compensation appropriately
prorated to and as of the effective date of termination (based on the number of
days elapsed prior to the date of termination), and any other amounts then due
and payable to you hereunder; provided, however, that in the event that you
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terminate this agreement pursuant to paragraph 2(c) above, then the Company will
continue to be obligated to pay and provide to you all sums, consideration,
compensation and benefits hereunder for the remainder of the stated term of this
agreement (it being understood that you will be under no obligation to seek or
obtain other full-time employment under such circumstances, and that any
compensation received by you from other employment shall not reduce the sums,
consideration, compensation and benefits payable by the Company hereunder,
except that the Company will not be required to overlap its benefits with any
other similar or duplicate benefits which you receive from other employment).
Except as provided in the foregoing proviso, all payments under this paragraph
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2(e) shall be made on the next applicable payment date therefor (as provided in
paragraph 3 below) following the effective date of termination.  Such payments
shall constitute all amounts to which you will be entitled 

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upon termination of this agreement (other than a termination pursuant to
paragraph 3(f) below, the terms of which shall govern payment upon any
termination thereunder), provided that any termination (including, without
limitation, any termination under paragraph 3(f) below) shall be without
prejudice to your rights under any pension plan (subject to the terms of such
plan) and your "COBRA" rights for continued benefits from and after the
effective date of such termination, and, unless termination is pursuant to
paragraph 2(c) above (in which event the Company will be required to provide
continued benefits hereunder in accordance with paragraph 2(c)), you will have
the right to maintain (subject to payment of ongoing premiums) any life
insurance policies maintained by the Company on your life (other than "key man"
policies pledged to any lender) and/or disability policies (to the extent
assignable) in effect at the time of termination. Furthermore, subject to the
terms and conditions of the applicable plan or agreement, termination shall not
affect your rights under any stock option plan or stock option agreement
outstanding at the time of termination, and the effect of termination shall be
governed by the terms and conditions of such plans and agreements.

          3.   Compensation and Benefits.
               ------------------------- 

          (a)  The Company will pay to you the sum of $250,000 per annum during
the term of this agreement, of which $50,000 per annum is designated as
compensation for ongoing services, and the balance of which shall be treated as
consideration for the restructuring of your existing employment arrangements
with the Company.  Such payments shall be made in equal semi-monthly
installments during the term of this agreement, subject to required tax, payroll
and other legally required withholdings.  Notwithstanding the foregoing
designations, your salary for employee benefit calculations (including any 401k
plans), credit reporting and other purposes shall be $250,000 per annum.

          (b)  In addition to the compensation under paragraph 3(a), the Company
will pay to you the sum of $2,400 per month as an all-inclusive expense
allowance, including (without limitation) all expenses relating to automobile
leasing, gasoline and other automotive expenses; and, in this regard, if the
Company is unable to effect a valid assignment (with a release of the Company
from all ongoing obligations) of the outstanding lease in respect of the
automobile currently leased by the Company for you, then the Company shall have
the right to withhold on a monthly basis from such monthly expense allowance,
and pay to the applicable leasing company, amounts sufficient to make the
required payments under such automobile lease as and when due.  You will not be
accountable to the Company for the specific expenditures of such monthly expense
allowance, provided that you will be responsible for reporting same on your
personal tax returns and paying any required taxes thereon.

          (c)  The Company will continue to provide you with normal employee
benefits, including but not limited to health and disability insurance for you
and your dependents, as generally provided by the Company to its employees from
time to time; and, in this regard, (i) to the extent that the Company maintains
its current benefit plans and policies, same will be available to you in a
manner substantially consistent with that currently in effect, and (ii) the
Company will continue to maintain, during the period of your employment
hereunder, life insurance on your life (other than "key man" coverage pledged to
a lender, which shall be in the 

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Company's discretion) in amounts and on terms and conditions substantially
equivalent to such insurance as currently in effect (with the proceeds thereof
to be payable to such beneficiary or beneficiaries as you may designate from
time to time). Without limitation of the foregoing, so long as the Company
continues to provide and maintain the health and disability insurance that it
currently provides for Brad A. Hummel (or any successor Chief Executive Officer)
and his dependents, the Company will continue to provide and maintain for you
and your dependents the same health and disability insurance coverage which it
currently provides and maintains for you and your dependents. You will not,
however, be entitled to any payments for unused vacation time or other unused
time off. Furthermore, during the period of your employment hereunder, you will
continue to be eligible to participate in any employee benefit plan, pension
plan, group life, health or accident insurance, incentive plans, or other such
plan or policy which may be maintained by the Company from time to time for the
benefit of its employees (all subject to the terms and conditions of such plans
and policies).

          (d)  In addition to the expense allowance under paragraph 3(b) above,
the Company will reimburse you, upon presentment of appropriate receipts and
vouchers, for any out-of-town travel, lodging, meals and other such expenses
which you may incur in connection with the performance of duties specifically
assigned to you hereunder which require such expenditures.
 
          (e)  The Company hereby acknowledges that this agreement does not
constitute an interruption or termination of your employment within the meaning
of any stock option plans and/or stock option agreements currently outstanding,
and that the execution and delivery of this agreement shall not impair of modify
any of your rights under any such stock option plans or stock option agreements.
Furthermore, subject to the terms and conditions of such plans, you will
continue to eligible for grants under stock option plans of the Company now in
effect or which hereafter may be adopted by the Company.

          (f)  In the event that, at any time and from time to time from and
after the date hereof, there shall occur any "change in control" of the Company
or any "material stock event" (as each such term is hereinafter defined), the
Company shall have the option, exercisable at any time within six (6) months
after such "change in control" or "material stock event," to terminate this
agreement upon payment to you of an amount equal to the greater of (i) the sum
of $600,000, plus all remaining payments thereafter payable pursuant to
paragraph 3(b) above (such payments under paragraph 3(b) to be discounted at an
annual rate of six (6%) percent per annum), or (ii) the sum of all remaining
payments thereafter payable pursuant to paragraphs 3(a) and 3(b) above, all
discounted at an annual rate of six (6%) percent per annum.  Any termination
under this paragraph 3(f) shall (i) be subject to the last two sentences of
paragraph 2(e) above, and (ii) not be deemed or treated as a termination for
cause; and, following any termination under this paragraph 3(f), the Company
will permit you to have the continued use of your office and related support
services pursuant to paragraph 1(c) above for a period of sixty (60) days
following the date of termination.  As used herein, the term "change in control"
means any transaction or series of transactions whereby 20% or more of the total
outstanding votes eligible to vote for directors of the Company (or any
successor by merger, consolidation or otherwise) shall be owned (legally or
beneficially) by any person (or persons acting in concert) who is not a
stockholder of the 

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Company on and as of the date hereof (with the "change in control" being deemed
to have taken place on the first date that such ownership shall exist); and the
provisions hereof shall apply to successive "changes in control" as same may
occur during the term of this agreement. As used herein, the term "material
stock event" means any transaction or series of related transactions whereby the
Company, in connection with any business acquisition, business combination,
joint venture or other such transaction, issues a number of shares of its common
stock equal to or greater than 30% of the number of shares of common stock of
the Company outstanding immediately prior to such transaction or series of
related transactions; and the provisions hereof shall apply to successive
"material stock events" as same may occur during the term of this Agreement.

     4.   Vacation.  You will be permitted to take vacations from time to time,
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at such times and for such periods of time as you may determine in your sole
discretion, subject to any specific prior commitments that you may have made to
or on behalf of the Company.

     5.   Restrictive Covenants.
          --------------------- 

          (a)  In consideration of the undertakings of the Company set forth
herein, and the compensation and benefits to be provided to you by the Company
hereunder, you agree that you will not, (i) during the period of your employment
hereunder, have any interest of any kind in any business which is engaged in the
rendering of diagnostic imaging or other services then rendered by the Company
or any of its subsidiaries, and is located or operating in any State in which
the Company or any of its subsidiaries is then conducting operations or has
expended significant time, expense or effort for the purpose of establishing
business operations, (ii) during the period of your employment hereunder,
solicit or seek, on behalf of any business enterprise (other than the Company or
any of its subsidiaries) which is engaged in the rendering of diagnostic imaging
or other services then rendered by the Company or any of its subsidiaries, (A)
to perform any diagnostic imaging or other services (as hereinabove described)
for or with any patients, clients or customers of the Company or any of its
subsidiaries, or (B) to obtain referrals for any diagnostic imaging or other
services (as hereinabove described) from any active referral sources of the
Company or any of its subsidiaries, (iii) during the period of your employment
hereunder, solicit, entice, induce or seek to hire any of the employees of the
Company or any of its subsidiaries to work in or consult with any business which
is engaged in the rendering of diagnostic imaging or other services then
rendered by the Company or any of its subsidiaries, and is located or operating
in any State in which the Company or any of its subsidiaries is then conducting
operations or has expended significant time, expense or effort for the purpose
of establishing business operations, and (iv) either during the period of your
employment hereunder or at any time thereafter, disclose to any person, firm,
corporation or entity, to the detriment or possible detriment of the Company or
any of its subsidiaries, any confidential information concerning or relating to
the business, operations, affairs, practices, procedures, policies or methods of
the Company or any of its subsidiaries which you may previously have acquired or
may hereafter acquire in the course of your employment hereunder.

          (b)  Anything contained in paragraph 5(a) above to the contrary
notwithstanding, (i) you may at any time have passive investments (i.e.,
investments not 

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involving management, employment or consulting services by you or any of your
affiliates) in not more than 5% of the outstanding securities of any publicly
traded entity which is engaged in the rendering of diagnostic imaging or other
services rendered by the Company or any of its subsidiaries, and (ii) the
restrictions set forth in subparagraphs (i), (ii) and (iii) of paragraph 5(a)
above shall not be applicable subsequent to any proper termination of this
agreement by you pursuant to paragraph 2(c) above.

          (c)  We both understand and acknowledge that the foregoing
restrictions are reasonable and necessary, in terms of the time, geographic
scope and nature of the restrictions, for the protection of the Company and its
business and good will. Nonetheless, in the event that the scope, nature or
duration of any of the limitations contained herein exceed those permitted by
law (as determined by a court of competent jurisdiction), then such limitations
shall be deemed to be modified in scope and effect, and as to time, geographical
area and/or application to given circumstances, to the extent required by law to
render same enforceable, and the remainder of this agreement shall be
unaffected. In the event of any breach or threatened breach of any of the
limitations contained herein, it is acknowledged that the Company will not have
an adequate remedy at law, and the Company will be entitled to seek and obtain
appropriate injunctive relief to restrain such breach and/or to compel
compliance herewith.

     6.   Company Property.
          ---------------- 

          (a)  You hereby acknowledge and confirm that all ideas, inventions and
other developments or improvements conceived by you, whether alone or with
others, during the term of your employment hereunder (whether or not during
working hours), that are within the scope of the business operations of the
Company or any of its subsidiaries or that relate to any business of any type
conducted or proposed to be conducted by the Company or any of its subsidiaries,
constitute the exclusive property of the Company or the subject subsidiary.  You
will assist the Company or its subsidiaries (as applicable) as required in order
to establish, confirm and evidence the Company's or its subsidiary's ownership
of such ideas, developments and improvements, and will execute and deliver any
and all such agreements, instruments and other documents as may be necessary or
appropriate in connection therewith.

          (b)  Upon termination of this agreement under any circumstances, and
otherwise upon request of the Company or any of its subsidiaries, you will
immediately return all property of the Company and/or its subsidiaries utilized
by you in rendering services hereunder, to the extent in your possession or
under your control.

     7.   Waivers and Amendments.  None of the terms or conditions of this
          ----------------------                                          
agreement may be waived, amended or modified except by means of a written
instrument signed by the party to be charged therewith.  Not failure or delay on
the part of either party in respect of any enforcement of obligations hereunder
shall in any manner affect such party's rights to seek or effect enforcement at
any other time or in respect of any other required performance.

     8.   Successors and Assigns.  This agreement shall be binding upon and
          ----------------------                                           
shall inure to the benefit of us and our respective heirs, executors,
administrators, representatives, successors and assigns (including, without
limitation, any purchaser(s) of the business of the Company, 

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howsoever such purchase may be effected, or any successor by merger). Without
limitation of the foregoing, neither the Company nor any successor in interest
shall effect any sale of any substantial portion of its business by sale of
assets unless, concurrently with the consummation of such transaction, the
purchaser(s) of such assets expressly agrees in writing to assume all of the
Company's or such successor's obligations hereunder and the Company agrees to
remain jointly and severally liable hereunder with such purchaser(s). Further,
subject to any express terms or conditions of any such stock options, the
Company shall not merge into, consolidate with, or sell or otherwise transfer
all or substantially all of its assets to another corporation without making
provision, pursuant to the terms of the transaction, for (a) the assumption by
the surviving, resulting or acquiring corporation of any then-outstanding stock
options of the Company then held by you, or (b) the substitution of new options
for any such stock options.

     9.   Governing Law.  This agreement shall be governed by and construed in
          -------------                                                       
accordance with the substantive laws of the State of Texas, without giving
effect to principles of conflicts of law.

     10.  Attorneys' Fees.  Upon your execution and delivery of this agreement,
          ---------------
the Company will pay to you the sum of $10,000 in respect of attorneys' fees
incurred by you in connection with the review and negotiation of this agreement
on your behalf.

     If the foregoing accurately reflects our entire agreement and understanding
as to the subject matter hereof, kindly acknowledge same by countersigning and
returning to the Company a duplicate copy of this letter.

                                    Very truly yours,

                                    DIAGNOSTIC HEALTH SERVICES, INC.


                                    By:______________________________
                                          Brad A. Hummel, President
Acknowledged, Accepted
and Agreed to:


_______________________ 
Max W. Batzer

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