A space averaged model of reactive sputtering which includes plasma chemistry for the first time in DC magnetron discharge has been developed by Ershov and Pekker [A. Ershov, L. Pekker, Thin Solid Films, 289(1996) 140.]. Argon and oxygen have been chosen in this model as buffer and reactive gases, respectively, and silicon as the target material. The present work is a further development of this model. The present model includes (1) The contribution of secondary electron emission induced by ion bombardment to the total current density and (2) A new plasma chemical reaction of dissociation of molecular oxygen due to its collisions with metastable argon. Thus, the present model has a more advanced plasma chemistry and also allows to take into account the secondary electron emission to investigate reactive sputtering and plasma chemistry. In the model, we show that the consideration of the secondary electron emission can significantly decrease the target erosion rate and shift the hysterisis curves. Numerical calculations also shows that the dissociation of molecular oxygen by metastable argon can significantly change the plasma chemistry equilibrium of the discharge. Generally, deposition of any oxide film can be studied with this model.