Exhibit 99.1

Digital Recorders, Inc. Clarifies Third Quarter Preliminary Estimates;
Third Quarter and Fiscal Year Expected to be Profitable

    DALLAS--(BUSINESS WIRE)--Oct. 17, 2003--Digital Recorders, Inc.
(DRI) (Nasdaq:TBUS), a market leader in transit, transportation and
law enforcement digital communications and audio enhancement systems,
announced today third quarter 2003 revenues are preliminarily
projected to be approximately $10.6 million, as compared to $11.04
million for the same period in fiscal year 2002; final third quarter
results will be announced on or about Tuesday, Nov. 11, 2003.

    THIRD QUARTER 2003

    "We expect the third quarter to be profitable even though we were
below our target revenue range for the quarter due to delays in
expected orders, as well as an unexpected, short-term disruption in
order flow from some of our international customers. We are
progressing steadily on our plans to achieve on-going profitability
this year and beyond. Those plans include actions in virtually all
areas affecting profitability, including marketing, product costs
reductions, and operating expenses. These actions started benefiting
the bottom line this quarter," David L. Turney, the Company's
Chairman, Chief Executive Officer and President, said.

    FISCAL YEAR 2003 OUTLOOK

    "The Company's fiscal year 2003 revenue range is presently
projected to be in the $47.2 million to $49 million range, and we
expect 2003 to be profitable. We remain concerned that some orders may
not be received in a timely fashion for shipping to take place in
2003, which is why we have projected a more cautionary revenue range,"
Mr. Turney said.

    ABOUT THE COMPANY

    Digital Recorders, Inc. is a market leader in transit,
transportation and law enforcement digital communications and audio
enhancement systems using proprietary software applications. Our
products improve the flow and mobility of people through
transportation infrastructure, as well as enhance law enforcement
agencies' surveillance capabilities. Our transit communications
products -TwinVision(R) and Mobitec route destination signage systems,
Talking Bus(R) voice announcement systems, and Internet-based,
automatic vehicle monitoring systems - enhance public transportation
around the globe. Our electronic surveillance tools, including
microphone amplifiers and processors, countermeasures devices, speech
activity detectors, and radio/television noise cancellers, help
law-enforcement agencies worldwide capture, arrest and prosecute
criminals. For more information about DRI and its operations
worldwide, go to www.digrec.com.

    FORWARD-LOOKING STATEMENTS

    This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
In particular, any statement, express or implied, concerning future
events or expectations is a forward looking statement. Use of words
such as "expect," "fully expect," "expected," "appears," "believe,"
"plan," "anticipate," "would," "goal," "potential," "potentially,"
"range," "pursuit," "run rate," "stronger," "preliminarily," etc., is
intended to identify forward-looking statements that are subject to
risks and uncertainties, including those described below. There can be
no assurance that any expectation, express or implied, in a
forward-looking statement will prove correct or that the contemplated
event or result will occur as anticipated. The risks associated with
forward-looking statements include, but are not limited to, product
demand and market acceptance risks, the impact of competitive products
and pricing, the effects of economic conditions and trade, legal,
social and economic risks, such as import, licensing and trade
restrictions, the results of implementing the Company's business plan,
and the impact on the Company of its relationship with its lender.
Refer to the Company's various Securities and Exchange Commission
filings, such as its Forms 10-Q and 10-K, for further information
about forward-looking statements.

    CONTACT: Digital Recorders, Inc., Dallas
             Veronica B. Marks, 214-378-4776
             Fax: 214-378-8437
             veronicam@digrec.com