The company was founded by Austrian aircraft designer Wolf Hoffmann in 1981, at which point it was known as "Hoffmann Flugzeugbau". Its first aircraft, a motor glider initially known as the HK36 Dimona, became a commercial success and led to improved models and further types of aircraft derived from it. Following several changes in ownership and naming, the company received the name "Diamond Aircraft Industries" in 1998. By this point, Diamond was producing a range of light aircraft, including the Dimona, the Diamond DA20, and the in-development Diamond DA40.