  This is a preliminary report on the application of Difference Image Analysis
(DIA) to galactic bulge images. The aim of this analysis is to increase the
sensitivity to the detection of gravitational microlensing. We discuss how the
DIA technique simplifies the process of discovering microlensing events by
detecting only objects which have variable flux. We illustrate how the DIA
technique is not limited to detection of so called ``pixel lensing'' events,
but can also be used to improve photometry for classical microlensing events by
removing the effects of blending. We will present a method whereby DIA can be
used to reveal the true unblended colours, positions and light curves of
microlensing events. We discuss the need for a technique to obtain the accurate
microlensing time scales from blended sources, and present a possible solution
to this problem using the existing HST colour magnitude diagrams of the
galactic bulge and LMC. The use of such a solution with both classical and
pixel microlensing searches is discussed. We show that one of the major causes
of systematic noise in DIA is differential refraction. A technique for removing
this systematic by effectively registering images to a common airmass is
presented. Improvements to commonly used image differencing techniques are
discussed.

Astrophysics