DIGI INTERNATIONAL INC, S-3, 1998-08-13

DIGI INTERNATIONAL INC
S-3, 1998-08-13
COMPUTER COMMUNICATIONS EQUIPMENT

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<PAGE>

As filed with the Securities and Exchange Commission on August 13, 1998.
Registration No. 333-_______

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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_____________________________

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_____________________________

DIGI INTERNATIONAL INC.
(Exact name of the Registrant as specified in its charter)
Delaware 41-1532464
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
11001 Bren Road East
Minnetonka, Minnesota 55343
(612) 912-3444
(Address and telephone number of the Registrant's
principal executive offices)
_____________________________
Jerry A. Dusa
President and Chief Executive Officer
11001 Bren Road East
Minnetonka, Minnesota 55343
(612) 912-3444
(Name, address and telephone number of agent for service)
Copies to:
James E. Nicholson
Faegre & Benson LLP
2200 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402
_____________________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
____________________
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /

If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / __________

If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / __________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
____________________
CALCULATION OF REGISTRATION FEE

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AMOUNT TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS FOR SECURITIES TO BE REGISTERED PRICE PER SHARE(1) AGGREGATE OFFERING PRICE REGISTRATION FEE
REGISTERED (1)
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<S> <C> <C> <C> <C>
Common Stock, $.01 per share 775,837 $16.25 $12,607,351.25 $3,720.00
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</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c).
_____________________________

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

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<PAGE>

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

SUBJECT TO COMPLETION, DATED AUGUST 13, 1998

775,837 SHARES

DIGI INTERNATIONAL INC.

COMMON STOCK

This Prospectus relates to shares of Common Stock of Digi International
Inc. (the "Company") which may be sold by the Selling Stockholders. See
"Selling Stockholders." Such shares were issued to the Selling Stockholders in
connection with the Company's acquisition of Central Data Corporation ("Central
Data") and of ITK International, Inc. ("ITK International"). The Company will
not receive any of the proceeds from the sale of shares by the Selling
Stockholders.

The Common Stock of the Company is traded in the over-the-counter market
and quoted on the Nasdaq Stock Market under the symbol "DGII." On August 12,
1998, the last sale price for the Common Stock, as reported by the Nasdaq Stock
Market, was $18.50 per share. See "Price Range of Common Stock and Dividend
Policy."

The distribution of the shares of Common Stock offered hereby by the
Selling Stockholders may be effected from time to time in one or more
transactions (which may involve block transactions) on the Nasdaq Stock Market
or otherwise, in the over-the-counter market, in negotiated transactions,
through the writing of options on shares (whether such options are listed on an
options exchange or otherwise), or a combination of such methods of sale, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling Stockholders may
effect such transactions by selling shares to or through broker-dealers, and
such broker-dealers may receive compensation in the form of underwriting
discounts, concessions or commissions from the Selling Stockholders and/or
purchasers of shares for whom they may act as agent (which compensation may be
in excess of customary commissions). See "Plan of Distribution."

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

No person is authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
Prospectus in connection with the offer made by this Prospectus, and, if given
or made, such information or representations must not be relied upon as having
been authorized. This Prospectus does not constitute an offer or solicitation
by anyone in any jurisdiction to any person to whom it is unlawful to make such
offer or solicitation. The delivery of this Prospectus at any time shall not
under any circumstances create an implication that there has been no change in
the affairs of the Company since the date hereof.

THE DATE OF THIS PROSPECTUS IS ____________ , 1998

<PAGE>

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Exchange
Act and in accordance therewith files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and at the Commission's regional offices at Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661, and 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such material may be
obtained at prescribed rates from the public reference facilities of the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. The
Commission maintains a Web site that contains reports, proxy statements and
other information filed by the Company at: http://www.sec.gov. In addition,
such reports, proxy statements and other information can also be inspected at
the offices of The Nasdaq Stock Market, 1735 K Street, N.W., Washington, D.C.
20006

Additional information regarding the Company and the shares offered hereby
is contained in the Registration Statement, and exhibits thereto, filed with the
Commission under the Securities Act of 1933, as amended (the "Securities Act").
For further information regarding the Company and the shares offered hereby
reference is made to the Registration Statement, and exhibits thereto, which may
be inspected without charge at the office of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, and copies thereof may be obtained from the
Commission at prescribed rates.

INCORPORATION OF DOCUMENTS BY REFERENCE

The following documents filed by the Company with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), are incorporated in and made a part of
this Prospectus by reference:

(a) The Company's Annual Report on Form 10-K for the year ended September
30, 1997 (which incorporates by reference certain portions of the Company's 1997
Annual Report to Stockholders and definitive Notice and Proxy Statement for the
Company's Annual Meeting of Stockholders held on January 28, 1998). (File No.
000-17972)

(b) The Company's definitive Notice and Proxy Statement for the Company's
Annual Meeting of Stockholders held on January 28, 1998. (File No. 000-17972)

(c) The Company's Quarterly Reports on Form 10-Q for the quarters ended
December 31, 1997, March 31, 1998 and June 30, 1998. (File No. 000-17972)

(d) The Company's Current Reports on Form 8-K filed on June 25, 1998,
July 23, 1998 and August 12, 1998. (File No. 000-17972)

(e) The description of the Company's Common Stock which is contained in
the Registration Statement on Form 8-A (Registration No. 000-17972) filed
October 5, 1989 (and declared effective on October 13, 1989) under the Exchange
Act, and all amendments and reports filed for the purpose of updating such
description.

(f) The description of the Company's Purchase Rights which is contained in
the Registration Statement on Form 8-A (Registration No. 000-17972) filed June
25, 1998 (and declared effective on June 30, 1998) under the Exchange Act.

All reports and any definitive proxy or information statements filed by the
Company with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of
the Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the shares offered hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.

Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein

<PAGE>

or in any other subsequently filed document which also is or is deemed to be
incorporated herein by reference modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.

The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, on the written
or oral request of any such person, a copy of any or all of the documents
incorporated herein by reference (other than exhibits not specifically
incorporated in such documents). Requests for such copies should be directed to
the Chief Financial Officer, Digi International Inc., 11001 Bren Road East,
Minnetonka, Minnesota 55343 (telephone number (612) 912-3444).

THE COMPANY

Digi International Inc. (the "Company") is a leading ISO 9001-compliant
provider of data communications hardware and software that delivers seamless
connectivity solutions for multiuser environments, open systems, server-based
remote access and LAN (Local Area Network) markets.

The Company's two major product areas include: 1) communications interface
cards for multiuser and remote access environments, which constituted
approximately 76% of net sales in fiscal 1997, and 2) "physical layer" and print
server products that enhance the data communications capabilities of a LAN and
which constituted 24% of net sales in fiscal 1997.

In July 1998, the Company acquired Central Data and ITK International, both
of which were privately held. Central Data produces high-performance serial
port solutions for local and remote access connectivity, including a full line
of Universal Serial Bus products. ITK International is a leading provider of
open systems, remote access solutions for small and medium sized businesses,
Internet service providers and telephone companies. ITK International has also
developed a Voice over Internet Protocol gateway product which will be deployed
by businesses and service providers.

Neither of the Company's two major product areas is date sensitive and will
not require adaptation to comply with Year 2000 requirements. In addition, all
of the Company's computer systems are Year 2000 compliant. The Company intends
to inquire of its suppliers and distributors as to the status of their Year 2000
compliance. The Company does not believe that Year 2000 issues will have a
material impact on its operations.

The Company's executive offices are located at 11001 Bren Road East,
Minnetonka, Minnesota, 55343, and its telephone number is (612) 912-3444.

<PAGE>

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

The Company's Common Stock has been traded in the over-the-counter market
and quoted on the Nasdaq Stock Market under the symbol DGII since the Company's
initial public offering on October 13, 1989. The following table sets forth,
for the fiscal quarters indicated, the high and low sale prices for the Common
Stock as reported by the Nasdaq Stock Market.

HIGH LOW
---- ---
<S> <C> <C>
FISCAL YEAR ENDED SEPTEMBER 30, 1996:
First Quarter . . . . . . . . . . . . . . . . $28.75 $17.125
Second Quarter. . . . . . . . . . . . . . . . 30.00 17.00
Third Quarter . . . . . . . . . . . . . . . . 30.75 23.875
Fourth Quarter. . . . . . . . . . . . . . . . 27.375 11.875

FISCAL YEAR ENDED SEPTEMBER 30, 1997:
First Quarter . . . . . . . . . . . . . . . . $18.75 $8.625
Second Quarter. . . . . . . . . . . . . . . . 10.50 6.750
Third Quarter . . . . . . . . . . . . . . . . 11.75 5.125
Fourth Quarter. . . . . . . . . . . . . . . . 16.00 9.875

FISCAL YEAR ENDED SEPTEMBER 30, 1998:
First Quarter . . . . . . . . . . . . . . . . $22.75 $13.75
Second Quarter. . . . . . . . . . . . . . . . 28.625 17.00
Third Quarter . . . . . . . . . . . . . . . . 29.50 19.50
Fourth Quarter (through August 12, 1998). . . 25.25 15.25

</TABLE>

On August 12, 1998, the last sale price for the Company's Common Stock as
reported by the Nasdaq Stock Market was $18.50 per share.

The Company has never declared or paid any cash dividends on its capital
stock. The Company currently intends to retain any earnings for use in its
business and therefore does not anticipate paying any cash dividends in the
foreseeable future.

<PAGE>

SELLING STOCKHOLDERS

The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of July 29, 1998 and as adjusted to
reflect the sale of shares offered by this Prospectus by each Selling
Stockholder.

SHARES
OWNED PRIOR SHARES OWNED
TO OFFERING SHARES OFFERED AFTER OFFERING
----------- -------------- --------------
NAME NUMBER NUMBER NUMBER PERCENT
---- ------ ------ ------ -------
<S> <C> <C> <C> <C>
Jeffrey James Roloff and Susan Elaine 138,048 138,048 0 *
Roloff Trust(1)
3412 N. High Cross Rd.
Urbana, IL 61801

James D. Norrod 106,420 106,420 0 *
16 Mountain Laurels Road
Suite 301
Nashua, New Hampshire 03062

VEW Energie AG 102,939 102,939 0 *
Attention: Dr. Jens Huffer
Abteilung HRE
Rheinlanddamm 24
Dortmund, Germany 44047

Prof. Dr. Klaus Rosentahl(2) 69,231(3) 60,751 8,480(3) *
c/o ITK Telekommunikation AG
Joseph-von-Fraunhofer Str. 23
Dortmund, Germany 44227

Dr. Wolfgang Schroder(2) 69,231(3) 60,751 8,480(3) *
c/o ITK Telekommunikation AG
Joseph-von-Fraunhofer Str. 23
Dortmund, Germany 44227

Prof. Dr. Firoz Kaderali 60,751 60,751 0 *
Auf der Emat 137
Iserlohn, Germany 58638

Prof. Dr. Reinhard Rock 60,751 60,751 0 *
Beethovenstr. 2
42781 Haan
Germany

Prof. Dr. Horst Strunz 60,751 60,751 0 *
Bergstr. 38
Rosrath, Germany 51503

<PAGE>

SHARES
OWNED PRIOR SHARES OWNED
TO OFFERING SHARES OFFERED AFTER OFFERING
----------- -------------- --------------
NAME NUMBER NUMBER NUMBER PERCENT
---- ------ ------ ------ -------
<S> <C> <C> <C> <C>
Cisco Systems, Inc. 54,747 54,747 0 *
c/o Van Dang
255 West Tasmon Drive
Building J
San Jose, California 95134

Earl D. Jacobsen Revocable Trust(4) 14,597 14,597 0 *
#3B Evergreen Circle
Savoy, IL 61874

Elaine M. Jacobsen Revocable Trust 14,597 14,597 0 *
#3B Evergreen Circle
Savoy, IL 61874

J.F. Shea Company, Inc. 12,701 12,701 0 *
655 Brea Canyon Road
Walnut, CA 91789-0489

GE Pension Trust 8,692 8,692 0 *
3003 Summer Street
Stamford, CT 06905

Metropolitan Life Insurance Company 2,542 2,542 0 *
334 Madison Avenue
Covent Station, NJ 07961-0633

Stephen B. Schwahn 2,173 2,173 0 *
1200 On the Mall, Apartment #207
Minneapolis, MN 55403

Robert G. Pagano 2,120 2,120 0 *
24 Swart Terrace
Nashua, New Hampshire 03060

Gary A. Stoltz 2,084 2,084 0 *
4704 Wilford Way
Edina, MN 55435

Sandra G. Stoltz 2,084 2,084 0 *
80 Morning Sun Drive
Sedona, AZ 86336-5561

Gregory P. Sweenie 1,802 1,802 0 *
15 Ox Bow Lane
Groton, Massachusetts 01450

Michael K. Ballard 1,590 1,590 0 *
93210 Fox Meadow Lane
Potomac, Maryland 20854

<PAGE>

SHARES
OWNED PRIOR SHARES OWNED
TO OFFERING SHARES OFFERED AFTER OFFERING
----------- -------------- --------------
NAME NUMBER NUMBER NUMBER PERCENT
---- ------ ------ ------ -------
<S> <C> <C> <C> <C>
Jack K. Ahrens, II 1,010 1,010 0 *
c/o Pathfinder Venture Capital Fund
7300 Metro Blvd., Suite 585
Minneapolis, MN 55439

Threshold Ventures, Inc. 1,800 1,800 0 *
7580 E. Gray Road, Suite 203
Scottsdale, AZ 85260-3408

Russell Davies 636 636 0 *
1, New Cottages
Collingbourne Ducis
Nr Marlborough, Wiltshire
SN8 3DY

Norbert Szyperski 636 636 0 *
In den Auen 6
Forsbach, Germany 51503

James Edelmann and Barbara Edelmann, JTWROS 437 437 0 *
45 Oldfield Drive
Sherborn, Massachusetts 01770

William J. Schnoor, Jr. 424 424 0 *
194 Eliot Street
Chestnust Hill, Massachusetts 02467

Penny Newman 318 318 0 *
Hill View, Star Lane, Knowl Hill
Maidenhead, Berkshires
RG10 9XY
United Kingdom

Matthias, Markert(5) 268(6) 127 141(6) *
Albringhauser Str. 201
Wetter, Germany
58300

Uwe Sauerbrey(5) 248(7) 169 79(7) *
Oberste Kamp 5
Dortmund, Germany 44369

Mark Armitage 56 56 0 *
36 St. Margarets Mead
Marlborough, Wiltshire
SN8 4BA
United Kingdom

<PAGE>

SHARES
OWNED PRIOR SHARES OWNED
TO OFFERING SHARES OFFERED AFTER OFFERING
----------- -------------- --------------
NAME NUMBER NUMBER NUMBER PERCENT
---- ------ ------ ------ -------
<S> <C> <C> <C> <C>
Jan Elliger(5) 53(8) 24 29(8) *
Ortsmuhle 3
Dortmund, Germany 44227

Frank te Heesen(5) 53(8) 24 29(8) *
Mont-Cenis-Str. 109b
Herne, Germany 44627

Martin Twickler(9) 52(10) 44 8(10) *
St. Wolfgans Platz 9f
Munchen, Germany 81669

K.S. Kamal 47 47 0 *
11 Vandiemans Lane
Littlemore, Oxford
United Kingdom
OX4 3QA

Heike Isringhaus(5) 26(11) 3 23(11) *
Wesselstr. 24
Castrop-Rauxel, Germany

Ralf Bonenkamp(5) 20(12) 9 11(12) *
In der Oeverscheidt 129
Dortmund, Germany 44149

Ulrich Findeisen(5) 20(12) 9 11(12) *
Ostenbergstr. 26
Dortmund, Germany 44225

Frank Langenbeck(5) 20(12) 9 11(12) *
Huestr. 151
Essen, Germany 45309

Klaus Peters(5) 20(12) 9 11(12) *
Sonnenplatz 6
Dortmund, Germany 44137

Petra Langjahr 3 3 0 *
Hellerstr. 38
Dortmund, Germany 44229

</TABLE>

1 Jeffrey James Roloff is an employee of the Company.
2 Director and employee of ITK International, a wholly-owned subsidiary of
the Company.
3 Includes options to purchase 8,480 shares of the Company's Common Stock.
4 Earl D. Jacobsen is an employee of the Company.

<PAGE>

5 Employee of ITK International, a wholly-owned subsidiary of the Company.
6 Includes options to purchase 141 shares of the Company's Common Stock.
7 Includes options to purchase 79 shares of the Company's Common Stock.
8 Includes options to purchase 29 shares of the Company's Common Stock.
9 Advisor to ITK International, a wholly-owned subsidiary of the Company.
10 Includes options to purchase 8 shares of the Company's Common Stock.
11 Includes options to purchase 23 shares of the Company's Common Stock.
12 Includes options to purchase 11 shares of the Company's Common Stock.
* Represents beneficial ownership of less than one percent of the Company's
outstanding Common Stock.

PLAN OF DISTRIBUTION

The distribution of the shares of Common Stock offered hereby by the
Selling Stockholders may be effected from time to time in one or more
transactions (which may involve block transactions) on the Nasdaq Stock
Market or otherwise, in the over-the-counter market, in negotiated
transactions, through the writing of options on shares (whether such options
are listed on an options exchange or otherwise), or a combination of such
methods of sale, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The
Selling Stockholders may effect such transactions by selling shares to or
through broker-dealers, and such broker-dealers may receive compensation in
the form of underwriting discounts, concessions or commissions from the
Selling Stockholders and/or purchasers of shares for whom they may act as
agent (which compensation may be in excess of customary commissions). The
Selling Stockholders and broker-dealers that participate with the Selling
Stockholders in the distribution of shares may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act, and any
commissions received by them and any profit on the resale of shares may be
deemed to be underwriting compensation.

EXPERTS

The consolidated financial statements and financial statement schedule
of the Company as of September 30, 1997 and 1996, and for each of the three
years in the period ended September 30, 1997, included or incorporated by
reference in the Company's Annual Report on Form 10-K, have been audited by
PricewaterhouseCoopers LLP (on July 1, 1998, Coopers & Lybrand L.L.P. merged
with Price Waterhouse LLP to form PricewaterhouseCoopers LLP), independent
accountants, as set forth in their reports accompanying such financial
statements which, to the extent therein, are based on the report of other
auditors, are incorporated herein by reference in reliance upon the report of
such firm, which report is given upon their authority as experts in
accounting and auditing. The financial statements of AetherWorks Corporation
for the years ended September 30, 1997 and 1996, and the period from February
24, 1993 (inception) to September 30, 1997, included or incorporated by
reference in the Company's Annual Report on Form 10-K, have been audited by
Ernst & Young LLP, as set forth in their report accompanying such financial
statements, and are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.

To the extent PricewaterhouseCoopers LLP examines and reports on the
financial statements and financial statements schedules of the Company at future
dates, and consents to the use of their report thereon, such financial
statements and schedules hereafter incorporated by reference in the registration
statement of which this prospectus is a part will be so incorporated by
reference in reliance upon such reports and upon the authority of such firms as
experts in accounting and auditing.

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

Expenses in connection with the issuance and distribution of the shares of
Common Stock being registered hereunder other than underwriting commissions and
expenses, are estimated below.

<TABLE>

<S> <C>
SEC registration fee. . . . . . . . . . . . . $ 3,720
Nasdaq Stock Market listing fee . . . . . . . 2,350
Legal fees and expenses . . . . . . . . . . . 10,000
Accounting fees and expenses. . . . . . . . . 10,000
Printing expenses . . . . . . . . . . . . . . 500
Transfer agent fees and expenses. . . . . . . 1,000
Miscellaneous . . . . . . . . . . . . . . . . 430
-------
Total $28,000
-------
-------

</TABLE>

Except for the SEC registration fee, all of the foregoing expenses have
been estimated. The Selling Stockholders will bear fees and disbursements of
their own legal counsel and transfer taxes. The Company will bear all other
expenses.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Under Delaware law, a corporation may indemnify any person who was or is a
party or is threatened to be made a party to an action (other than an action by
or in the right of the corporation) by reason of his services as a director or
officer of the corporation, or his service, at the corporation's request, as a
director, officer, employee or agent of another corporation or other enterprise,
against expenses (including attorneys' fees) that are actually and reasonably
incurred by him ("Expenses"), and judgments, fines and amounts paid in
settlement that are actually and reasonably incurred by him, in connection with
the defense or settlement of such action, provided that he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the
corporation's best interests, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that his conduct was unlawful.
Although Delaware law permits a corporation to indemnify any person referred to
above against expenses defense or settlement of an action by or in the right of
the corporation, provided that he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the corporation's best interests,
if such person has been judged liable to the corporation, indemnification is
only permitted to the extent that the Court of Chancery (or the court in which
the action was brought) determines that, despite the adjudication of liability,
such person is entitled to indemnify for such Expenses as the court deems
proper. The General Corporation Law of the State of Delaware also provides for
mandatory indemnification of any director, officer, employee or agent against
Expenses to the extent such person has been successful in any proceeding covered
by the statute. In addition, the General Corporation Law of the State of
Delaware provides the general authorization of advancement of a director's of
officer's litigation expenses in lieu of requiring the authorization of such
advancement by the board of directors in specific cases, and that
indemnification and advancement of expenses provided by the statute shall not be
deemed exclusive of any other rights to which those seeking indemnification of
expenses may be entitled under any bylaw, agreement or otherwise.

Article V of the By-Laws of the Registrant provide for the broad
indemnification of the directors and officers of the Registrant and for
advancement of litigation expenses to the fullest extent required or permitted
by current Delaware law.

The Registrant maintains a policy of directors and officers liability
insurance that reimburses the Registrant for expenses that it may incur in
conjunction with the foregoing indemnity provisions and that may provide direct
indemnification to officers and directors where Registrant is unable to do so.

The Certificate of Incorporation of the Registrant eliminates the personal
liability of a director to the Registrant or its stockholders for monetary
damages for breach of fiduciary duty as a director, except under certain

II-1

<PAGE>

circumstances involving certain wrongful acts such as breach of a director's
duty of loyalty, acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, for any unlawful acts
under Section 174 of the General Corporation Law of the State of Delaware, or
for any transaction from which a director derives an improper personal benefit.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) EXHIBITS

Exhibit Description
------- -----------
<S> <C>
5 Opinion and Consent of Faegre & Benson LLP.
15 Unaudited Interim Financial Information Letter.
23.1 Consent of PricewaterhouseCoopers LLP (to be filed by amendment).
23.2 Consent of Ernst & Young LLP (to be filed by amendment).
23.3 Consent of Faegre & Benson LLP (included in Exhibit No. 5 to the
Registration Statement).
24 Powers of Attorney.

</TABLE>

ITEM 17. UNDERTAKINGS

The undersigned Registrant hereby undertakes:

(1) to file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:

(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) to reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective Registration Statement;

(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;

(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;

(3) to remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering;

(4) that, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

II-2

<PAGE>

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions summarized in Item 15 above, or otherwise,
the Registrant has been advised that, in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act, and will be governed by the final adjudication of such issue.

II-3

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Minnetonka,
State of Minnesota, on August 13, 1998.

DIGI INTERNATIONAL INC.

By /s/ Jerry A. Dusa
-------------------------------------------
Jerry A. Dusa
President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on August 13, 1998.

Signature Title
- --------- -----
<S> <C>
/s/ Jerry A. Dusa President, Chief Executive Officer and Director
- ------------------------ (Principal Executive Officer)
Jerry A. Dusa

/s/ Jonathon E. Killmer Senior Vice President, Chief Financial Officer
- ------------------------ and Treasurer
Jonathon E. Killmer (Principal Financial and Accounting Officer)

John P. Schinas* Chairman of the Board and Director

Willis K. Drake* Director

Richard E. Eichhorn* Director

Robert Moe* Director

Mykola Moroz* Director

David Stanley* Director

</TABLE>

*Jerry A. Dusa, by signing his name hereto, does hereby sign this document on
behalf of each of the above named directors of the Registrant pursuant to powers
of attorney duly executed by such.

By /s/ Jerry A. Dusa
----------------------------------------------
Jerry A. Dusa, Attorney in Fact

<PAGE>

EXHIBIT INDEX

Exhibit Description Page
- ------- ----------- ----
<S> <C> <C>
5 Opinion and Consent of Faegre & Benson LLP. Filed Electronically
15 Unaudited Interim Financial Information Letter. Filed Electronically
23.1 Consent of PricewaterhouseCoopers LLP. To be filed by amendment
23.2 Consent of Ernst & Young LLP. To be filed by amendment
23.3 Consent of Faegre & Benson LLP (included in Exhibit No. 5 to the
Registration Statement). Filed Electronically
24 Powers of Attorney. Filed Electronically

</TABLE>

<PAGE>

EXHIBIT 5

[FAEGRE & BENSON LETTERHEAD]

August 13, 1998

Digi International Inc.
11001 Bren Road East
Minnetonka, Minnesota 55343

Gentlemen:

In connection with the proposed registration under the Securities Act of
1933, as amended, of 775,837 shares of Common Stock, par value $.01 per share,
of Digi International Inc., a Delaware corporation (the "Company"), proposed to
be sold by Selling Stockholders of the Company, we have examined such corporate
records and other documents, including the Registration Statement on Form S-3,
dated the date hereof, relating to such shares (the "Registration Statement"),
and have reviewed such matters of law as we have deemed necessary for this
opinion, and we advise you that in our opinion:

1. The Company is a corporation duly organized and existing under the
laws of the State of Delaware.

2. The shares of Common Stock proposed to be sold by the Selling
Stockholders named in the Registration Statement are, and when sold as
contemplated in the Registration Statement will be, legally and validly issued
and fully paid and non-assessable.

We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to our firm wherever appearing therein.

Very truly yours,

FAEGRE & BENSON LLP

<PAGE>

EXHIBIT 15

UNAUDITED INTERIM FINANCIAL INFORMATION LETTER

We are aware that our reports dated July 20, 1998, April 23, 1998 and
January 29, 1998, on our reviews of the interim condensed consolidated financial
information of Digi International, Inc. and Subsidiaries (the "Company") for the
three and nine-month periods ended June 30, 1998 and 1997, for the three and
six-month periods ended March 31, 1998 and 1997, and the three-month periods
ended December 31, 1997 and 1996, respectively, included in the Company's
respective Form 10-Qs for the quarters ended June 30, 1998, March 31, 1998 and
December 31, 1997, are incorporated by reference in this registration statement
on Form S-3. Pursuant to Rule 436(c), under the Securities Act of 1933, these
reports should not be considered a part of the registration statement prepared
or certified by us within the meaning of Sections 7 and 11 of that Act.

Minneapolis, Minnesota /s/ PricewaterhouseCoopers LLP
August 13, 1998

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

To be filed by amendment.

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

To be filed by amendment.

<PAGE>

EXHIBIT 24

DIGI INTERNATIONAL INC.

Power of Attorney
of Director and/or Officer

The undersigned director and/or officer of Digi International Inc., a
Delaware corporation, does hereby make, constitute and appoint Jerry A. Dusa and
Jonathon E. Killmer, and either of them, the undersigned's true and lawful
attorneys-in-fact, with power of substitution, for the undersigned and in the
undersigned's name, place and stead, to sign and affix the undersigned's name as
such director and/or officer of said Corporation to a Registration Statement or
Registration Statements, on Form S-3 or other applicable form, and all
amendments, including post-effective amendments, thereto, to be filed by said
Corporation with the Securities and Exchange Commission, Washington, D.C., in
connection with the registration under the Securities Act of 1933, as amended,
of shares of Common Stock of said Corporation authorized for issuance under said
Corporation's Non-Officer Stock Option Plan, and to file the same, with all
exhibits thereto and other supporting documents, with said Commission, granting
unto said attorneys-in-fact, and either of them, full power and authority to do
and perform any and all acts necessary or incidental to the performance and
execution of the powers herein expressly granted.