Probable transcription factor with a role in the retinal determination (RD) network. Regulates ato expression and is required for normal R8 induction and differentiation. Danr appears to repress Dan expression, but Dan is required for Danr expression anterior to the morphogenetic furrow (MF). Dan and Danr lie downstream of so and require dac function for highest levels of expression. Contributes to differentiation of antenna-specific characteristics; effector gene that acts downstream of homothorax (hth), Distal-less (Dll), cut (ct) and spineless (ss) genes to control differentiation of distal antennal structures. Interacts with itself, dan, ey and dac to form a complex (or complexes) containing the RD factors. Coexpressed with dan in the presumptive distal antenna, but not in the leg imaginal disk. Both proteins are also expressed in the brain and the eye region of the eye-antenna disk. First detected in early L3 eye disks in cells surrounding the newly initiated morphogenetic furrow. Highly expressed in evenly spaced clusters of cells anterior to the furrow, lower levels within and posterior to the furrow. Flies exhibit partial transformation of antenna toward leg identity. Ectopic expression causes partial transformation of distal leg structure toward antennal identity.