The "Diabas-Hornstein Formation" of Hammer occurs in the Ophiolite belt and in the outer and central Vardar zone of the Inner Dinaric region, characterizing this area as an "eugeosyncline." We interpret this formation as a mélange of olistostrome origin. The mélange originated in deep troughs over a plate-consuming margin by accumulation of sediments from the oceanic bottom, continental rise, and continental shelf, with intermixing of the oceanic crust and mantle ultramafic material as mechanical fragments, cold diapiric bodies, or warm crystal mush. It marks the boundary between the Serbo-Macedonian continental element and part of the Tethys, a margin active also during the Hercynian orogeny. The Ophiolite belt ocean is explained as a secondary ocean, opened by differences in velocity between the marginal and inner parts of the Dinaric microcontinent (probably in the Middle Triassic), and possibly closed without a regular Benioff zone. The Upper Cretaceous-Tertiary magmatic activity beyond this complex ophiolitic scar is explained as a high-temperature result of the processes in the consumed plate.