8-K/A

                SECURITIES AND EXCHANGE COMMISSION

                    Washington, D.C.  20549


                            FORM 8-K/A
                         (Amendment No. 1)

                         CURRENT REPORT

             Pursuant to Section 13 or 15(d) of the
                Securities Exchange Act of 1934

Date of Report (Earliest Event Reported):  October 16, 1997

Exact name of Registrant
 as specified in its charter:  The Diana Corporation

State or Other Jurisdiction of Incorporation:  Delaware

Commission File Number:  1-5486

I.R.S. Employer Identification Number:  36-2448698

Address of Principal Executive Office:  26025 Mureau Road         
                                        Calabasas, CA 91302

Registrant's Telephone Number, Including Area Code:  (818) 878-7711

ITEM 4.  CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT

This report is being filed to include the letter from Price
Waterhouse LLP which was not available for the original Form 8-K
filing.

ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS

(c)  Exhibits

     16.1  Letters dated October 15, 1997 and October 27, 1997 from
           Price Waterhouse LLP


                           SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
           
                                    THE DIANA CORPORATION
                                    (Registrant)


Date:  October 28, 1997             /s/ Brian Robson
                                    Vice President and Controller
   

EX-16.1

                      Price Waterhouse LLP
                   100 East Wisconsin Avenue
                           Suite 1500
                      Milwaukee, WI  53202



October 15, 1997

Mr. James J. Fiedler
Chairman of the Board
 and Chief Executive Officer
The Diana Corporation
26025 Mureau Road
Calabasas, California 91302

Dear Mr. Fiedler:

This is to confirm that the client - auditor relationship between
The Diana Corporation (Commission File Number 1-5486) and Price
Waterhouse LLP has ceased.

Yours very truly,

/s/ Price Waterhouse LLP

cc:  Chief Accountant
     SECPS Letter File, Mail Stop 11-3
     Securities and Exchange Commission
     450 Fifth Street, N.W.
     Washington, D.C. 20549




                      Price Waterhouse LLP
                   100 East Wisconsin Avenue
                           Suite 1500
                      Milwaukee, WI  53202




October 27, 1997

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C.  20549

Ladies and Gentlemen:

                      The Diana Corporation

We have read Item 4 of The Diana Corporation's Form 8-K dated
October 16, 1997 and are in agreement with the statements contained
in paragraph 4(a) therein, with the following exceptions:

(a)(i)    To clarify the first sentence, on October 15, 1997, we
          resigned as the independent accountants of The Diana
          Corporation.  Furthermore, we make no comment regarding
          the remaining sentences of paragraph 4(a)(i).

(a)(ii)   To clarify, the uncertainties addressed in our report
          relate to certain matters regarding the Company's
          liquidity and viability, and class action litigation and
          other potential claims by investors.

(a)(v)    In connection with the audit of the fiscal 1997 financial
          statements, we communicated in writing to the Audit
          Committee certain matters related to the Company's
          internal control over financial reporting that we
          consider to be reportable events as follows:  weaknesses
          exist with respect to (i) the Company's internal control
          surrounding revenue recognition at its Sattel
          Communications ("Sattel") operation, (ii) Sattel's
          internal control surrounding the accounting for fixed
          assets and (iii) the preparation of account
          reconciliations and supporting analyses at Sattel.

Yours very truly,

/s/ Price Waterhouse LLP