UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(f) of the Investment Company Act of 1940

Form 4

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OMB Number: 3235-0287

Expires: December 31, 2001

Estimated average burden

hours per response 0.5

9;Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

(Print or Type Responses)

1 .Name and Address of Reporting Person*

Westcliff Capital Management, LLC

2. Issuer Name and Ticker or Trading Symbol
Diedrich Coffee, Inc. (DDRX)

6. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

______Director X 10% Owner

______Officer (give ______Other (specify title below) below)

____________________________

(Last) (First) (Middle)

200 Seventh Avenue, Suite 105

3. IRS Identification Number of Reporting Person, if an entity
(voluntary)

4. Statement for
Month/Year
8/2001

(Street)

Santa Cruz, California 95062

5. If Amendment,
Date of Original
(Month/Year)

7. Individual or Joint/Group Filing (Check Applicable Line)
___Form filed by One Reporting Person
X Form filed by More than One Reporting Person

(City) (State) (Zip)

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1. Title of Security
(Instr. 4)

2. Trans-
action
Date

(Month/
Day/
Year)

3. Trans-
Action
Code
(Instr. 8)

4. Securities Acquired (A)
or Disposed of (D)
(Instr. 3, 4 AND 5)

5. Amount of
Securities
Beneficially
Owned at
End of Month

(Instr. 3 and 4)

6. Owner-
ship
Form:
Direct
(D) or
Indirect
(I)

(Instr. 4)

7. Nature of Indirect Beneficial Ownership

(Instr. 4)

Code

Amount

(A) or

(D)

Price

Common Stock

7/6/2001

2,200

$3.55

See Note 2

Common Stock

7/9/2001

3,300

$3.4973

See Note 2

Common Stock

7/10/2001

14,500

$3.4973

See Note 2

Common Stock

7/11/2001

2,500

$3.25

See Note 2

Common Stock

7/13/2001

1,000

$3.25

See Note 2

Common Stock

7/18/2001

1,700

$3.2529

See Note 2

Common Stock

7/19/2001

2,300

$3.50

See Note 2

Common Stock

7/20/2001

800

$3.30

See Note 2

Common Stock

7/27/2001

700

$3.35

See Note 2

902,233

See Note 3

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.

* If the form is filed by more than one reporting person, see Instruction 4(b)(v).

Persons who respond to the collection of information contained
(Over)
in this form are not required to respond unless the form displays SEC 1474 (3-00)

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Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of
Derivative Security
(Instr. 4)

2. Conver-
sion or
Exercise
Price of
Deri-
vative
Security

3. Trans-
action
Date

(Month/
Day/
Year)

4. Trans-
action
Code
(Instr. 8)

5. Number of Deriv-
ative Securities Ac-
quired (A) or Dis-
posed of (D)
(Instr. 3, 4, and 5)

6. Date Exer-
cisable and
Expiration
Date
(Month/Day/
Year).

7. Title and Amount of Securities
Underlying
Derivative Security
(Inst. 4)

8. Price
of
Deriv-
ative
Secur-
ity
(Instr.
5)

9. Number
of deriv-
ative
Secur-
ities
Bene-
ficially
Owned
at End
of
Month
(Instr. 4)

10. Owner-
ship
Form of
Deriv-
ative
Security:
Direct
(D) or
Indirect
(I)
(Instr. 4)

11. Nature of Indirect
Beneficial Ownership
(Instr. 5)

Code

(A)

(D)

Date
Exer-
cisable

Expira-
tion
Date

Title

Amount or
Number of
Shares

Explanation of Responses:

(1) The reporting persons (the "Reporting Persons") consist of (i) Westcliff Capital Management, LLC, and (ii) Richard S. Spencer III, a manager and the majority member of Westcliff Capital Management, LLC. Each Reporting Person disclaims membership in a group with any other person within the meaning of Rule 13d-5(b)(i) and Rule 16a-1(a)(1) under the Exchange Act.

(2) These securities are owned by entities for which Westcliff Capital Management, LLC is the investment adviser. Each Reporting Person has only a pro rata interest in the securities with respect to which indirect beneficial ownership is reported and disclaims beneficial ownership in such securities except to the extent of such Reporting Person's pecuniary interest.

(3) These securities are owned by investment limited partnerships, of which Westcliff Capital Management, LLC is the general partner and investment adviser, and by entities, for which Westcliff Capital Management, LLC is the investment adviser. Each Reporting Person has only a pro rata interest in the securities with respect to which indirect beneficial ownership is reported and disclaims beneficial ownership in such securities except to the extent of such Reporting Person's pecuniary interest.

Dated: August 8, 2001

Westcliff Capital Management, LLC

By: /s/ Richard S. Spencer
Richard S. Spencer III, Manager

/s/ Richard S. Spencer

Richard S. Spencer III

Joint Filer Information

Name: Richard S. Spencer III

Address: 200 Seventh Avenue, Suite 105, Santa Cruz, California 95062

Designated Filer: Westcliff Capital Management, LLC

Issuer and Ticker Symbol: Diedrich Coffee Inc. DDRX

Statement for Month/Year: July 2001

/s/ Richard S. Spencer

Signature: Richard S. Spencer III

** Intentional misstatements or omissions of facts constitute Federal Criminal Violations.
See 18 U.S.C. 1001 and 15 U.S.C. 78ff

Note: File three copies of this Form, one of which must be manually signed. If space is insufficient,
See Instruction 6 for procedure.

Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB number.

WESTCLIFF CAPITAL MANAGEMENT LLC /ADV 4