We show that if the dwarf-nova disc instability model includes the effects
of heating by stream impact and tidal torque dissipation in the outer disc,
the calculated properties of dwarf-nova outbursts change considerably, and
several notorious deficiencies of this model are repaired. In particular:
(1) outside-in outbursts: occur for mass transfer rates lower than in the s
tandard model as required by observations; (2) the presence of long (wide)
and short (narrow) outbursts with similar peak luminosities is a natural pr
operty of the model. Mass-transfer fluctuations by factors similar to2 can
explain the occurrence of both long and short outbursts above the cataclysm
ic variable period gap, whereas below 2 hr only short normal outbursts are
expected tin addition tu superoutbursts which are not dealt with in this ar
ticle). With additional heating by the stream and tidal torques, such fluct
uations can also explain the occurrence of both outside-in and inside-out o
utbursts in SS Cyg and similar systems. The occurrence of outside-in outbur
sts in short orbital-period, low mass-transfer-rate systems requires the di
sc to be much smaller than the tidal-truncation radius. In this case the re
currence time of both inside-out and outside-in outbursts have a similar de
pendence on the mass-transfer rate M-2.