-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 LHtQPE59nv/kM9s7pgaByct0K+MgF4qETapHGR8xxiBZYPjYNg+Lb0cUrFMaFK5E
 SOxjovSdK2nbM/xgbOo8FA==

<SEC-DOCUMENT>0000720851-05-000065.txt : 20050712
<SEC-HEADER>0000720851-05-000065.hdr.sgml : 20050712
<ACCEPTANCE-DATETIME>20050712172527
ACCESSION NUMBER:		0000720851-05-000065
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20050708
FILED AS OF DATE:		20050712
DATE AS OF CHANGE:		20050712

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			Bennett James Scott
		CENTRAL INDEX KEY:			0001295088

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-12965
		FILM NUMBER:		05951001

	BUSINESS ADDRESS:	
		BUSINESS PHONE:		401-885-4567

	MAIL ADDRESS:	
		STREET 1:		63 BAYVIEW AVENUE
		CITY:			WARWICK
		STATE:			RI
		ZIP:			02818

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NESTOR INC
		CENTRAL INDEX KEY:			0000720851
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				133163744
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		400 MASSASOIT AVE
		STREET 2:		STE 200
		CITY:			PROVIDENCE
		STATE:			RI
		ZIP:			02914
		BUSINESS PHONE:		4014345522

	MAIL ADDRESS:	
		STREET 1:		400 MASSASOIT AVE
		STREET 2:		STE 200
		CITY:			PROVIDENCE
		STATE:			RI
		ZIP:			02914
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>form4_bennettex.xml
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2005-07-08</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0000720851</issuerCik>
        <issuerName>NESTOR INC</issuerName>
        <issuerTradingSymbol>NEST</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001295088</rptOwnerCik>
            <rptOwnerName>Bennett James Scott</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>C/O MITKEM CORPORATION</rptOwnerStreet1>
            <rptOwnerStreet2>175 METRO CENTER BOULEVARD</rptOwnerStreet2>
            <rptOwnerCity>WARWICK</rptOwnerCity>
            <rptOwnerState>RI</rptOwnerState>
            <rptOwnerZipCode>02886</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeTransaction>
            <securityTitle>
                <value>Common Stock</value>
                <footnoteId id="F1"/>
            </securityTitle>
            <transactionDate>
                <value>2005-07-08</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>5333</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>5.25</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>9533</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </nonDerivativeTransaction>
    </nonDerivativeTable>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Stock Option (right to buy)</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>3.85</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2005-07-08</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>M</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>20000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>1.40</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>D</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2005-06-24</value>
            </exerciseDate>
            <expirationDate>
                <value>2005-09-22</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>20000</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>0</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">Acquired from the issuer upon the surrender of 20,000 options to purchase common stock at an exercise price of $3.85 per
share as reported in Table II.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>James S. Bennett, by his attorney-in-fact /s/Benjamin M. Alexander</signatureName>
        <signatureDate>2005-07-12</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----