A model for DQ Her is proposed consisting of a hot, rather bright, white dwarf coupled with a star that overflows its lobe of the inner Lagrangian surface. Material ejected slowly by the latter through the inner Lagrangian point takes up an orbit around the nova component; in this "disk," which has a radius of 2 X 1018 cm, the electron density is of the order of 10' . The disk itself is responsible for most of the light formerly attributed to the nova; when the eclipse occurs, it is simultaneous with the rotational disturbance of the He ii emission; thus the disk is responsible for a significant amount of radiation in the continuum. Four lines of essentially independent agrument agree in giving a mass of about 0.25 for the nova component. It is also possible to understand the peculiar U - B and B - V colors of the nova, as well as the production of He ii in emission, if the continuous light comes from free-bound and free-free emissions of hydrogen in the disk coupled with a small amount of black-body radiation from the nova. The electron temperature of the disk is 40000 K; the black-body temperature of the nova is 80000 K. The peculiar Balmer decrement pointed out in Paper I is explained by strong self-absorption of the Balmer lines in the disk. The model is believed to be the best that can presently be given, but further difficulties are pointed out and discussed. In particular, it is stressed that the mass of the nova is uncertain by a factor of about 1.5 and that its temperature, while probably high, is not known with much precision.