SecProbe.io

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Mail Stop 0306

February 17, 2005

Via: US Mail and Facsimile to (408) 399-3509

Mr. William R. Walker
Vice President, Finance and Chief Financial Officer
HI/FN, Inc.
750 University Avenue
Los Gatos, CA  95032

	RE:	HI/FN, Inc.
		Form 10-K for the fiscal year ended September 30, 2004
		Form 10-Q for the quarter ended December 31, 2004
      File No. 000-24765

Dear Mr. Walker:

      We have reviewed your response to our letter dated January
14,
2005 and have the following additional comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Form 10-Q for the quarterly period ended December 31, 2004

Item 4. Controls and Procedures - Page 27
1. We note your statement that your disclosure controls and
procedures were effective "subject to the limitations noted
above."
Given the exception noted, it remains unclear whether your chief
executive officer and chief financial officer have concluded that
your disclosure controls and procedures are effective.  Please
revise
your disclosure to state, in clear and unqualified language, the
conclusions reached by your chief executive officer and your chief
financial officer on the effectiveness of your disclosure controls
and procedures.  For example, if true, you can state that your
disclosure controls and procedures are effective.  Or, if true,
you
can state that your disclosure controls and procedures are not
effective.  You should not, however, state the conclusion in your
current disclosure, which appears to state that your disclosure
controls and procedures are effective except to the extent they
are
not effective.

2. We note your disclosure in the first paragraph that "there can
be
no assurance that any design [of a system of disclosure controls
and
procedures] will succeed in achieving its stated goals under all
potential future conditions (emphasis added)."  If you elect to
retain this qualifying disclosure, please revise to also disclose,
if
true, that your system of internal control over financial
reporting
is designed so as to provide reasonable assurance that the
objectives
of the system will be met.  In addition, if the first paragraph of
your disclosure is retained, please also disclose, if true, that
the
design and operation of your system of internal controls does in
fact
provide reasonable assurance in achieving the objectives of the
system.  For guidance, refer to Part II.F.4 of Release No. 33-
8238.

3. We note your statement that your disclosure controls and
procedures were effective "to ensure that material information...
is
made known to management... as appropriate to allow timely
decisions
regarding required disclosure."  Please note that all language
that
appears following the word "effective" must be consistent with the
language that appears in the definition of "disclosure controls
and
procedures" set forth in Rule 13a-15(e) of the Exchange Act.
Please
revise your disclosure accordingly.

4. Please revise to delete the reference to "other factors that
significantly affect your internal controls," and clarify whether
there was any change in your internal control over financial
reporting during the quarter that materially affected, or is
reasonably likely to materially affect, your internal control over
financial reporting.  Also revise to remove the reference to Item
4(a) and clarify the portion of your disclosure to which you are
referring readers.

*    *    *    *

      As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter with your response that keys your
responses to our comments and provides any requested supplemental
information.  Detailed cover letters greatly facilitate our
review.
Please file your cover letter on EDGAR.  Please understand that we
may have additional comments after reviewing your responses to our
comments.

      You may contact Patrick Enunwaonye, Staff Accountant, at
(202)
824-5529 or me, at (202) 942-1931 if you have questions regarding
comments on the financial statements and related matters. In this
regard, do not hesitate to contact Brian Cascio, Accounting Branch
Chief, at (202) 942-1791 with any other concerns.

							Sincerely,

							Angela Crane
							Review Accountant
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Mr. William R. Walker
HI/FN Inc.
February 17, 2005
Page 1

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