The video -- shot two years ago -- shows Dane, his wife, actress Rebecca Gayheart, and Kari Ann Peniche -- a dethroned Miss United States Teen -- "wacked out" and in the buff, according to TMZ. The tape surfaced on the Internet Monday.
Peniche says there was no sex involved. She insists they played dress up and the two women then soaked together in a bathtub as Eric called "action" behind the camera.
Peniche claims the video was stored on the hard drive of her computer, and was stolen by Mindy McCready, who was her roommate after the two completed a stint on the TV show "Celebrity Rehab," the Web site reported.
Attorney Marty Singer, who represents Dane and Gayheart, told TMZ that the actor will sue anyone who publishes the video, calling it "a private, confidential tape."
There are reports of a full-blown, uncensored sex version of the tape. Singer told TMZ, "From what I've seen it's a naked tape, not a sex tape."
"At most it's 3 people maybe wanting to have sex."
Peniche was once engaged to pop star Aaron Carter and also dated his older brother Nick.