An augmented defect diagnosis procedure removes tests from consideration in order to improve the accuracy of defect diagnosis by reducing the number of candidate faults. This work studies the role of diagnostic test generation in this context. Diagnostic test generation increases the number of tests that are used for defect diagnosis in order to increase its accuracy. The combined effect of using diagnostic test generation and the augmented defect diagnosis procedure is to add and remove tests in order to improve the accuracy of diagnosis. This study suggests a flow for a two-phase defect diagnosis process that combines the two procedures. Some of the issues that arise, and are addressed by this study, are: (i) which faults to target during diagnostic test generation, (ii) how to restart the augmented defect diagnosis procedure after diagnostic test generation, and (iii) how many of the diagnostic tests the augmented defect diagnosis procedure will remove.