This report documents the model-layer variable-direction horizontal anisotropy (LVDA) capability of the Hydrogeologic-Unit Flow (HUF) Package of MODFLOW-2000. The LVDA capability allows the principal directions of horizontal anisotropy to be different than the model-grid row and column directions, and for the directions to vary on a cell-by-cell basis within model layers. The HUF Package calculates effective hydraulic properties for model grid cells based on hydraulic properties of hydrogeologic units with thicknesses defined independently of the model layers. These hydraulic properties include, among other characteristics, hydraulic conductivity and a horizontal anisotropy ratio. Using the LVDA capability, horizontal anisotropy direction is defined for model grid cells within which one or more hydrogeologic units may occur. For each grid cell, the HUF Package calculates the effective horizontal hydraulic conductivity along the primary direction of anisotropy using the hydrogeologic-unit hydraulic conductivities, and calculates the effective horizontal hydraulic conductivity along the orthogonal anisotropy direction using the effective primary direction hydraulic conductivities and horizontal anisotropy ratios. The direction assigned to the model layer effective primary hydraulic conductivity is specified using a new data set defined by the LVDA capability, when active, to calculate coefficients needed to solve the ground-water flow equation. Use of the LVDA capability is illustrated in four simulation examples, which also serve to verify hydraulic heads, advective-travel paths, and sensitivities calculated using the LVDA capability. This version of the LVDA capability defines variable-direction horizontal anisotropy using model layers, not the hydrogeologic units defined by the HUF Package. This difference needs to be taken into account when designing model layers and hydrogeologic units to produce simulations that accurately represent a given field problem. This might be a reason, for example, to make model layer boundaries coincide with hydrogeologic-unit boundaries in all or part of a model grid.