SecProbe.io

January 31, 2012
 Via Facsimile

Joseph T. Dunsmore President and Chief Executive Officer Digi International Inc. 11001 Bren Road East Minnetonka, MN 55343
Re: Digi International Inc.
 Form 10-K for the Fiscal Year Ended September 30, 2011
Filed November 29, 2011 File No. 001-34033

Dear Mr. Dunsmore:
 We have reviewed your filing and have the following comments.  In some of our
comments, we may ask you to provide us with  information so we may better understand your
disclosure.
 Please respond to this letter within ten business days by amending your filing, by
providing the requested information, or by advi sing us when you will provide the requested
response.  If you do not believe our comments apply to your fact s and circumstances or do not
believe an amendment is appropriate, pl ease tell us why in your response.

After reviewing any amendment to your filing and the information you provide in
response to these comments, we ma y have additional comments.
            Form 10-K for the Fiscal Year Ended September 30, 2011

 Item 7 – Management’s Discussion and Analys is of Financial Condition and Results of
Operations
 Consolidated Results of Operations

 Gross Profit, page 35

 1. We note from your consolidated statement of  cash flows for the year ended September
30, 2011 that you recorded a $2 million expense due to inventory obsolescence.  Given that this expense was significant and was more than double the inventory obsolescence
expense recorded in prior years, please te ll us how you considered discussing the reasons
for the increase and its impact on your results  of operations.  Furt her, tell us how you

 Joseph T. Dunsmore Digi International Inc. January 31, 2012 Page 2
 considered disclosing whether this is a trend that is reasonably likel y to have a material
impact on future results.  See Section III.B.3 of Release No. 33-8350 for additional
guidance.
 Liquidity and Capital Resources, page 39

 2. We note your disclosure on page 69 that as of September 30, 2011, total accumulated
undistributed foreign earnings that are considered  to be indefinitely invested outside the
U.S. were approximately $12 million.  Please tell us the amount of cash and cash
equivalents that are currently held outside of the U.S.  Additionally, tell us how you
considered disclosing this amount and the impact of repatriating the undistributed
earnings of foreign subsidiaries.  In this regard, we note that th is disclosure would
illustrate that some cash is not presently  available to fund domestic operations and
obligations without paying a si gnificant amount of taxes upon their repatriation.  Refer to
Item 303(a)(1) of Regulation S-K and Sec tion IV of SEC Release No. 33-8350.
 Item 8 – Financial Statements and Supplementary Data

 Note 10 – Income Taxes, page 66

3. We note your disclosure on page 69 indicat ing that you have approximately $12 million
in undistributed foreign earnings.  Please  tell us how you considered disclosing the
amount of the unrecognized deferred tax liabil ity on the permanently reinvested earnings
if determination of that liability is practicab le or a statement that determination is not
practicable.  Refer to ASC 740-30-50-2c.
 Note 16 – Contingencies

 Patent Infringement Lawsuits, page 74

 4. The disclosure on page 74 indicates that  you reached a settlement agreement with
MOSAID Technologies Incorpor ated (MOSAID).  We note th at your settlement involves
a royalty-bearing license agreement for future sales.  Please tell us whether there are any
other monetary components to the settlement  agreement.  Additionally, please reconcile
the disclosure on page 74 which indicates that  you do not expect this license agreement to
have a material impact on your financial statem ents with the disclosure on page 41 which
states that you are unable to reliably estimat e the amount of cash payments that you will
make under this agreement.
 We urge all persons who are responsible for th e accuracy and adequacy of the disclosure
in the filing to be certain that the filing include s the information the Securities Exchange Act of
1934 and all applicable Exchange Act rules requir e.  Since the company and its management are

 Joseph T. Dunsmore Digi International Inc. January 31, 2012 Page 3
 in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.
 In responding to our comments, please provi de a written statement from the company
acknowledging that:
 the company is responsible for the adequacy an d accuracy of the disclo sure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as  a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of  the United States.

You may contact Jaime John, St aff Accountant, at (202) 551 -3446 or Christine Davis,
Assistant Chief Accountant, at  (202) 551-3408 if you have questi ons regarding comments on the
financial statements and related matters.  Plea se contact me at (202)  551-3406 with any other
questions.
Sincerely,
   /s/ Patrick Gilmore
Patrick Gilmore
Accounting Branch Chief