P R E S S   R E L E A S E
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                                                 For more information, contact:
                                                           William M. Lowe, Jr.
                                                                 Vice President
                                                        Chief Operating Officer
                                                        Chief Financial Officer
                                                                 (336) 316-5664

                          UNIFI ANNOUNCES ACQUISITION

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GREENSBORO,  N.C. - OCTOBER 25, 2006 - Unifi,  Inc.  (NYSE:UFI) today announced
that it has signed a  definitive  agreement  to acquire the  assets,  including
inventory,  of the textured yarn business operating as the Dillon Yarn Division
of Dillon  Yarn  Corporation.  The  purchase  price will be  approximately  $65
million.

        The purchase price will be comprised of approximately  $44.5 million in
cash and the  issuance  of  approximately  8.3 million  shares of Unifi  common
stock.  All of the shares issued as  consideration  in the acquisition  will be
subject to a lock-up agreement, which will prohibit any transfers of shares for
an initial six-month period following  closing.  Thereafter,  two thirds of the
shares  may  not be  transferred  for 18  months  following  closing,  and  the
remaining  one-third  of the  shares  may not be  transferred  until 30  months
following  closing.  The  Company  expects  to use  cash-on-hand  and its  bank
revolver  to fund the cash  portion  of the  purchase  price.  Lehman  Brothers
rendered a fairness  opinion to Unifi's  Board of  Directors  in regards to the
transaction.

        Dillon Yarn  Corporation  is a privately  held  company and  operates a
facility in Dillon, South Carolina and textures approximately 90 million pounds
of polyester  and nylon  combined for the twelve  months ended  December  2005.
Annual sales of the assets being  acquired  were  approximately  $130  million.
Unifi currently  supplies  approximately  $40 million of raw material to Dillon
that will be treated as inter-company sales after closing.  Synergies generated
from the  transaction  in fiscal  year 2008 are  expected to be in the range of
approximately  $6-8  million.  The  Company  expects  this  transaction  to  be
accretive  to  earnings  approximately  $.09 cents per share in its fiscal year
ended June 2008 based upon  current  volume  assumptions  and will be cash flow
positive.  At the appropriate time, after closing the transaction,  the Company
will provide proforma information reflecting the combination with Unifi.


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UNIFI ANNOUNCES ACQUISITION - PAGE 2


        As a result of this  transaction,  the  Company  expects  to be able to
lower the overall cost of production through operational synergies,  which will
enable it to better compete both with regional and global  competition that has
made significant  inroads into the U.S. market over the past several years. The
Company  expects to  continue to operate the  facility  in South  Carolina  and
streamline the product mix with its existing  production  facilities.  Customer
service and quality will remain a focal point during the transition, as well as
efforts to bring  innovation to the market  providing  the Company's  customers
with advantages to remain both regionally and globally competitive.

        Subject to governmental  approval and other customary  conditions,  the
purchase is expected to be completed in early January 2007.

        Additional  information will be provided during the Company's quarterly
earnings  call  tomorrow,  October 26, 2006,  scheduled at 10:00 a.m.  EST. For
those interested but unable to participate,  a replay of the conference call in
its entirety will be available at (973) 341-3080 pin #7953172 approximately one
hour after its conclusion. This replay line will be kept open for two weeks.

        Unifi,  Inc.  (NYSE:  UFI) is a  diversified  producer and processor of
multi-filament  polyester and nylon  textured  yarns and related raw materials.
The Company adds value to the supply chain and enhances consumer demand for its
products through the development and introduction of branded yarns that provide
unique performance, comfort and aesthetic advantages. Key Unifi brands include,
but are not limited to:  aio(R) -  all-in-one  performance  yarns,  Sorbtek(R),
A.M.Y.(R),  Mynx(R) UV,  Repreve(R),  Reflexx(R),  MicroVista(R) and Satura(R).
Unifi's  yarns and  brands  are  readily  found in home  furnishings,  apparel,
legwear, and sewing thread, as well as industrial,  automotive,  military,  and
medical    applications.    For   more   information    about   Unifi,    visit
http://www.unifi.com.


                                  -continued-



UNIFI ANNOUNCES ACQUISITION - PAGE 3


               CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

Certain statements  included herein contain  forward-looking  statements within
the  meaning of federal  security  laws about  Unifi,  Inc.'s  (the  "Company")
financial  condition and results of operations  that are based on  management's
current expectations,  estimates and projections about the markets in which the
Company operates,  as well as management's beliefs and assumptions.  Words such
as "expects," "anticipates,"  "believes," "estimates," variations of such words
and other similar  expressions  are intended to identify  such  forward-looking
statements.  These  statements  are not  guarantees of future  performance  and
involve certain risks,  uncertainties  and assumptions,  which are difficult to
predict. Therefore, actual outcomes and results may differ materially from what
is expressed or forecasted in, or implied by, such forward-looking  statements.
Readers  are  cautioned  not to place undue  reliance on these  forward-looking
statements, which reflect management's judgment only as of the date hereof. The
Company   undertakes   no   obligation   to  update   publicly   any  of  these
forward-looking  statements  to  reflect  new  information,  future  events  or
otherwise.

Factors that may cause  actual  outcome and results to differ  materially  from
those expressed in, or implied by, these  forward-looking  statements  include,
but are not necessarily limited to,  availability,  sourcing and pricing of raw
materials,  pressures  on sales  prices  and  volumes  due to  competition  and
economic  conditions,  reliance  on  and  financial  viability  of  significant
customers,  operating performance of joint ventures, alliances and other equity
investments,   technological  advancements,   employee  relations,  changes  in
construction   spending,   capital   expenditures  and  long-term   investments
(including those related to unforeseen  acquisition  opportunities),  continued
availability  of  financial   resources  through  financing   arrangements  and
operations, outcomes of pending or threatened legal proceedings, negotiation of
new or  modifications  of  existing  contracts  for  asset  management  and for
property and equipment construction and acquisition,  regulations governing tax
laws, other  governmental and  authoritative  bodies' policies and legislation,
the continuation and magnitude of the Company's common stock repurchase program
and proceeds received from the sale of assets held for disposal. In addition to
these representative factors,  forward-looking  statements could be impacted by
general  domestic and  international  economic and industry  conditions  in the
markets where the Company competes, such as changes in currency exchange rates,
interest and  inflation  rates,  recession  and other  economic  and  political
factors  over which the Company has no control.  Other risks and  uncertainties
may be described  from time to time in the Company's  other reports and filings
with the Securities and Exchange Commission.


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