The company was founded in 1984 by filmmaker John Davis and it was incorporated in Nevada on December 2, 1985.

The company was officially established on May 21, 1986, in order to produce mid-to-high budget action films that were financed entirely by a studio, starting with Predator, a co-production with Lawrence Gordon Productions and Silver Pictures, and a series of other films that were planned for release by 20th Century Fox.

It was decided that it would be done independently with co-investors, and it would help anticipate the expansion of telefilms and sitcoms.

[1] On February 18, 1987, Davis Entertainment partnered with Mark L. Lester of his Mark Lester Films company in order to handle the development of action-adventure films which were produced by the company, directed by Mark L. Lester, and it was independently financed by the two companies.

[3] That same year, Davis Entertainment Company signed a production deal with 20th Century Fox to develop feature films.