Dimethyl ether (DME) has gained wide interest in chemical industry regarding its use as a multi-source, multi-purpose fuel either for diesel engines or as a clean alternative for liquefied petroleum gas (LPG). The direct synthesis of DME from syngas would be more economical and beneficial in comparison to the indirect process via methanol dehydration. In this study, one type of the multifunctional auto-thermal reactors (the recuperative one) is selected in which the direct synthesis of dimethyl ether (DME) is coupled with the catalytic dehydrogenation of cyclohexane to benzene in a two fixed bed reactor separated by a solid wall, where heat is transferred across the surface of tube. Steady-state, heterogeneous, one-dimensional model has been used to describe the performance of this novel configuration. Both co-current and counter-current operating modes are investigated and the simulation results are compared with the available data of a pipe-shell fixed bed reactor for direct DME synthesis which operates at the same feed conditions. In addition, the influence of the molar flow rate of exothermic and endothermic stream on the reactor performance is also investigated. The results suggest that coupling of these reactions could be feasible and beneficial and the co-current mode has got better performance in DME and hydrogen production. In order to establish the validity and safety handling of the new concept, an experimental proof is required. Copyright (C) 2011, Hydrogen Energy Publications, LLC. Published by Elsevier Ltd. All rights reserved.