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                                 UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    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):   MAY 17, 2007


                                   UNIFI, INC.
             (Exact name of registrant as specified in its charter)


                                    NEW YORK
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                 (State or other jurisdiction of incorporation)


            1-10542                                   11-2165495
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     (Commission File No.)                (IRS Employer Identification No.)



                            7201 WEST FRIENDLY AVENUE
                        GREENSBORO, NORTH CAROLINA 27410
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                    (Address of principal executive offices)


                                 (336) 294-4410
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              (Registrant's telephone number, including area code)


                                 NOT APPLICABLE
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         (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 (SEE General Instruction A.2. below):

|_|    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))




ITEM 1.01    ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

             On May 17, 2007,  the Company  entered into a Waiver,  Assignment
and Assumption  Agreement (the  "Agreement")  with Dillon Yarn Corporation and
the several purchasers listed therein.  Pursuant to the Agreement, the Company
consented to the transfer of 2,777,778  shares of its common stock  previously
issued to Dillon Yarn  Corporation  on January 1, 2007,  which were subject to
restrictions on transfer under the Registration Rights Agreement,  dated as of
January  1,  2007,  between  the  Company  and Dillon  Yarn  Corporation.  The
purchasers  agreed  to  assume  Dillon's  rights  and  obligations  under  the
Registration  Rights  Agreement  with respect to the 2,777,778  shares sold to
them.  Other  than  as set  forth  above,  the  terms  and  provisions  of the
Registration  Rights  Agreement  remain  in  full  force  and  effect  and the
remaining  5,555,555 shares owned by Dillon remain subject to the restrictions
on transfer set forth in the  Registration  Rights  Agreement.  Dillon may not
transfer any shares of our common stock owned by it prior to July 1, 2008.  On
and after  July 1, 2008 and prior to July 1, 2009,  Dillon  (or its  permitted
transferees) may transfer  2,777,778  shares,  and all of the 5,555,555 shares
may be  transferred  by Dillon (or its  permitted  transferees)  after July 1,
2009. A copy of the  Registration  Rights Agreement is attached as Exhibit 7.1
to Dillon's Schedule 13D, dated January 2, 2007.





                               SIGNATURES

        Pursuant to the  requirements of the Securities  Exchange Act of 1934,
the  Registrant  has duly  caused  this report on Form 8-K to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                    UNIFI, INC.



                                    By: /s/ Charles F. McCoy
                                        ---------------------------
                                        Name: Charles F. McCoy
                                              Vice President, Secretary,
                                              General Counsel and Corporate
                                              Compliance and Governance Officer


Dated:  May 17, 2007