  We describe the Difference Image Analysis (DIA) algorithms and software used
to analyze four years (1997-2000) of OGLE-II photometric monitoring of the
Magellanic Clouds, the calibration, the photometric error analysis, and the
search for variable stars. A preliminary analysis of photometric errors is
based on the field LMC_SC2. A full catalog of about 70,000 variable stars will
be presented in a separate publication.
