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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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MIC-Info: RSA-MD5,RSA,
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 ULULuZyqod9peGla8s/Yfg==

<SEC-DOCUMENT>0001072613-04-001965.txt : 20041029
<SEC-HEADER>0001072613-04-001965.hdr.sgml : 20041029
<ACCEPTANCE-DATETIME>20041029121000
ACCESSION NUMBER:		0001072613-04-001965
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20041027
FILED AS OF DATE:		20041029
DATE AS OF CHANGE:		20041029

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			MACKAY H CALVIN G
		CENTRAL INDEX KEY:			0001226520

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-19960
		FILM NUMBER:		041105032

	MAIL ADDRESS:	
		STREET 1:		C/O DATAWATCH CORP
		STREET 2:		175 CABOT STREET STE 503
		CITY:			LOWELL
		STATE:			MA
		ZIP:			01854

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DATAWATCH CORP
		CENTRAL INDEX KEY:			0000792130
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				020405716
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0930

	BUSINESS ADDRESS:	
		STREET 1:		175 CABOT STREET
		STREET 2:		SUITE 503
		CITY:			LOWELL
		STATE:			MA
		ZIP:			01854-3633
		BUSINESS PHONE:		978-441-2200
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>pro_13025dex.xml
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2004-10-27</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0000792130</issuerCik>
        <issuerName>DATAWATCH CORP</issuerName>
        <issuerTradingSymbol>DWCH</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001226520</rptOwnerCik>
            <rptOwnerName>MACKAY H CALVIN G</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>C/O DATAWATCH CORPORATION</rptOwnerStreet1>
            <rptOwnerStreet2>175 CABOT STREET, SUITE 503</rptOwnerStreet2>
            <rptOwnerCity>LOWELL</rptOwnerCity>
            <rptOwnerState>MA</rptOwnerState>
            <rptOwnerZipCode>01854</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>0</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>SR.VP - ENTERPRISE SOFTWARE</officerTitle>
        </reportingOwnerRelationship>
    </reportingOwner>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Stock Option (Right to Buy)</value>
                <footnoteId id="F1"/>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>3.22</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2004-10-27</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>5000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>0</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <footnoteId id="F2"/>
            </exerciseDate>
            <expirationDate>
                <value>2014-10-27</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>5000</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>5000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">Stock options issued pursuant to the Datawatch Corporation 1996 Stock Plan.</footnote>
        <footnote id="F2">417 of such options will vest on 1/27/05 and an additional 417 shares will vest at the end of each three-month period for ten
 (10) such periods with 413 shares vesting on 10/27/07.  This vesting schedule is subject to acceleration in certain
 instances in connection with an acquisition or other change of control event.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>/s/ Alan R. MacDougall as Attorney-in-Fact for H. Calvin G. MacKay</signatureName>
        <signatureDate>2004-10-28</signatureDate>
    </ownerSignature>
</ownershipDocument>

</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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