A three-component reaction between dialkyl acetylenedicarboxylates (DAADs) and phosphites in the presence of (2,4-dinitrophenyl)acetic acid leads to dialkyl 2-(dialkoxyphosphoryl)-3-[3-acetyl-2-(2,4-dinitrophenyl)-4-oxosuccinates in excellent yields. A similar reaction with triphenylphosphine, instead of phosphites, produces the stabilised phosphoranes in good yields.