  We study multi-field DBI inflation models with a waterfall phase transition.
This transition happens for a D3 brane moving in the warped conifold if there
is an instability along angular directions. The transition converts the angular
perturbations into the curvature perturbation. Thanks to this conversion,
multi-field models can evade the stringent constraints that strongly disfavour
single field ultra-violet DBI inflation models in string theory. We explicitly
demonstrate that our model satisfies current observational constraints on the
spectral index and equilateral non-Gaussianity as well as the bound on the
tensor to scalar ratio imposed in string theory models. In addition we show
that large local type non-Gaussianity is generated together with equilateral
non-Gaussianity in this model.
