May 12, 2005


Mail Stop 0306


Mack V. Traynor, III  Chief Executive Officer and President
HEI, Inc.
Post Office Box 5000
1495 Steiger Lake Lane
Victoria, Minnesota  55386

Via U S Mail and FAX [ (952) 443-2668 ]

Re:	HEI, Inc.
	Form 10-K for the fiscal year ended August 31, 2004
	Forms 10-Q for the fiscal quarter ended November 27, 2004 and
February 26, 2005
	File No. 0-10078

Dear Mr. Traynor:

      We have reviewed your filings and have the following
comments.
We have limited our review to only your financial statements and
related disclosures, and do not intend to expand our review to
other
portions of your documents. Where indicated, we think you should
revise your documents in response to these comments in all future
filings with the Commission.  If you disagree, we will consider
your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.


Mr. Mack V. Traynor, III
HEI, Inc.
May 12, 2005
Page 2

Form 10-K for Fiscal Year Ended August 31, 2004

Properties - Page 6

1. In the third paragraph you refer to "EBITDA prepared in
accordance
with GAAP".  EBITDA is a non-GAAP measure and therefore is not
prepared in accordance with GAAP.  In future filings, please
clarify
this disclosure.

Financial Statements

Balance Sheets - Page 34

2. We see you have reported the non-current maturities of other
long-
term liabilities separately from the non-current maturities of
long-
term debt.  Please tell us where the detail of these amounts is
provided in the footnotes to the financial statements.

3. In future filings, revise the caption for the equity line item
"notes receivable" to clarify why it is reported as an offset to
equity and that is arose in a related-party transaction, as
disclosed
in Note 13.

4. In future filings disclose the nature and policy for the asset
"security deposit".

Note 1  Overview and Summary of Significant Accounting Policies -
Page 38

- -- Revenue Recognition - Page 38

5. Supplementally and in future filings provide more details of
the
accounting for customer arrangements in which you retain ownership
on
inventory until customer receipt or acceptance or until the
customer
pulls the inventory into production. Clarify whether there are any
additional obligations or right of return after customer receipt
and
how this impacts revenue recognition.

6. Please tell us the nature of the material weaknesses found in
your
revenue recognition, as disclosed on page 61, the revisions to
your
accounting policy and the amounts recorded each year to make the
necessary corrections.

7. We note the press release of 1/14/05 stated you deferred
revenue
"due to revenue recognition criteria by FASB".  Tell us which new
standards necessitated the changes.   In future filings, present
all
disclosures for correction of an error as required by APB 20.

Mr. Mack V. Traynor, III
HEI, Inc.
May 12, 2005
Page 3

- --  Impairment of Long-Lived and Intangible Assets - Page 39
Note 5  Asset Impairment Charge - Page 44

8. We note the reference to third party valuations throughout the
filing. Please note there is no requirement to reference third
party
valuations, however, this reference requires that the third party
valuation expert be named and their consent included in future
registration statements. Alternatively, you could clearly disclose
how you determined the values and provide details of all
significant
assumptions and valuation methodologies. Please revise in future
filings.

Note 10  Stock Benefit Plans   -- Common Stock - Page 52
Note 12  Private Placement of Common Stock - Page 53

9. In each transaction involving the issuance of warrants, please
expand future filings to disclose details of each issuance and how
the amounts were valued. Address both the method and the
significant
assumptions used.

Note 16 Major Customers, Concentrations of Credit Risk, and
Geographic Data - Page 55

10. In the last paragraph we see you have not disclosed the
geographic information for 71% of your export sales in 2004 and
for
51% in 2003.  In future filings, present the disclosures of sales
by
all major countries and geographic areas.  Also, please confirm to
us
supplementally that the amount for "shipped to domestically"
presents
only US sales and that other North American countries are
presented
as export sales.  For guidance, please see paragraph 38 of SFAS
131.


*  *  *  *  *  *  *


      As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a response letter that keys your responses to our
comments and provides the requested supplemental information.
Confirm that you will comply with these comments in all future
filings with the Commission.  Detailed response letters greatly
facilitate our review.  Please file your response letter on EDGAR
under the label "CORRESP."  Please understand that we may have
additional comments after reviewing your responses to our comments
and the requested supplemental information.  When sending
supplemental information regarding this filing, please include the
following ZIP+4 code in our address:  20549-0306.

Mr. Mack V. Traynor, III
HEI, Inc.
May 12, 2005
Page 4


	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

In addition, please be advised that the Division of Enforcement
has
access to all information you provide to the staff of the Division
of
Corporation Finance in our review of your filing or in response to
our comments on your filing.


      You may contact Jeanne Bennett at (202) 551-3606, if you
have
questions regarding our comments.  In her absence you may contact
me,
at (202) 551-3676.



      Sincerely,


								Brian R. Cascio
 								Accounting Branch Chief
??

??

??

??