While extensive research has been done on improving diesel engines, much less has been done on auxiliary heaters, which have their own design challenges. The study analyzes how to optimize the combustion performance of an auxiliary heater, a 6 kW diesel burner, by investigating key parameters affecting diesel combustion and their properties. A model of a small diesel heater, including a simulation of fuel injection and combustion process, was developed step-wise and verified against experimental results that can be used for scaling up to 25 kW heaters. The model was successfully applied to the burner, predicting the burner performance in comparison with experimental results. Three main variables were identified as important for the design. First, it was concluded that the distance from the ring cone to the nozzle is essential for the fluid dynamics and flame location, and that the ring cone should be moved closer to the nozzle for optimal performance. Second, the design of the swirl co-flow is important, and the swirl number of the inlet air should be kept above 0.6 to stabilize the flame location for the present burner design. Finally, the importance of the nozzle diameter to avoid divergent particle vaporization was pointed out.