-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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MIC-Info: RSA-MD5,RSA,
 UCJeGoWZAGG+bbL5otJx9FoDfhtKCH9G77QTiUJA0pLpqRodX5WaaUkj11DuTyKA
 JAfX+ZguOheSrTSFIxd3Kg==

<SEC-DOCUMENT>0001181431-10-026154.txt : 20100512
<SEC-HEADER>0001181431-10-026154.hdr.sgml : 20100512
<ACCEPTANCE-DATETIME>20100512173639
ACCESSION NUMBER:		0001181431-10-026154
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20100511
FILED AS OF DATE:		20100512
DATE AS OF CHANGE:		20100512

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			MCCARTHY SEAN MARTIN
		CENTRAL INDEX KEY:			0001289065

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-21203
		FILM NUMBER:		10825492

	MAIL ADDRESS:	
		STREET 1:		28 EXECUTIVE PARK, STE 200
		CITY:			IRVINE
		STATE:			CA
		ZIP:			92614

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DIEDRICH COFFEE INC
		CENTRAL INDEX KEY:			0000947661
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-FOOD STORES [5400]
		IRS NUMBER:				330086628
		STATE OF INCORPORATION:			CA
		FISCAL YEAR END:			0624

	BUSINESS ADDRESS:	
		STREET 1:		28 EXECUTIVE PARK
		STREET 2:		SUITE 200
		CITY:			IRVINE
		STATE:			CA
		ZIP:			92614
		BUSINESS PHONE:		9492601600

	MAIL ADDRESS:	
		STREET 1:		28 EXECUTIVE PARK
		STREET 2:		SUITE 200
		CITY:			IRVINE
		STATE:			CA
		ZIP:			92614
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>rrd274869.xml
<DESCRIPTION>FORM 4
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0303</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2010-05-11</periodOfReport>

    <notSubjectToSection16>1</notSubjectToSection16>

    <issuer>
        <issuerCik>0000947661</issuerCik>
        <issuerName>DIEDRICH COFFEE INC</issuerName>
        <issuerTradingSymbol>DDRX</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001289065</rptOwnerCik>
            <rptOwnerName>MCCARTHY SEAN MARTIN</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>28 EXECUTIVE PARK, SUITE 200</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>IRVINE</rptOwnerCity>
            <rptOwnerState>CA</rptOwnerState>
            <rptOwnerZipCode>92614</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>President &amp; CFO</officerTitle>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
            </securityTitle>
            <transactionDate>
                <value>2010-05-11</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>U</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>5000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>35.00</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>0</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
    </nonDerivativeTable>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Employee Stock Option (right to buy)</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>3.686</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2010-05-11</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>D</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>20000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>35.00</value>
                    <footnoteId id="F2"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F1"/>
            </exerciseDate>
            <expirationDate>
                <value>2014-04-26</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>20000</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>0</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">This option grant provided for the option to vest and become exercisable in three equal installments on each of the first three anniversary dates of April 26, 2004.</footnote>
        <footnote id="F2">Pursuant to the Agreement and Plan of Merger (the &quot;Agreement&quot;), dated as of December 7, 2009, by and among the issuer, Green Mountain Coffee Roasters, Inc. and Pebbles Acquisition Sub, Inc. (&quot;Purchaser&quot;), at the time Purchaser accepted shares for payment pursuant to the offer contemplated by the Agreement, this option was canceled and, in exchange, the holder will receive an amount in cash equal to the excess of $35.00 over the exercise price per share of such option, multiplied by the number of shares underlying such option, subject to the vesting terms previously applicable to such option.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>/s/ Sean M. McCarthy</signatureName>
        <signatureDate>2010-05-11</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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