Exhibit 99.1

                   Digital Recorders, Inc. Reports
   Preliminary Third Quarter 2005 Results; CEO Discusses Long-Term
  Outlook; CEO to Share the DRI Story With NYC and Chicago Financial
               Professionals During the Week of Oct. 24

    DALLAS--(BUSINESS WIRE)--Oct. 25, 2005--Digital Recorders, Inc.
(DRI) (Nasdaq:TBUS), a technology leader in transit, transportation,
and law enforcement digital communications and audio enhancement
systems, announced today it expects to report third quarter sales of
approximately $11.0 million, a decrease of 4.3 percent compared to
$11.5 million posted the same period a year ago.
    "Our third quarter 2005 results reflect continued softness in the
market and our increasing engineering workload, which required us to
shift some deliveries to the fourth quarter. On this revenue level, we
would expect to post a loss for the third quarter greater than the
same period a year ago, but see significant improvement in the fourth
quarter," David L. Turney, the Company's Chairman, Chief Executive
Officer, and President, said.
    The Company expects to release its final results and file its
third quarter 2005 Form 10-Q with the Securities and Exchange
Commission on or about Nov. 14, 2005.

    Long-Term Outlook

    Now that the Company has finalized its long-term strategic
business plan, Mr. Turney said that it appears to hold the possibility
of higher revenue levels and profitability. "This comes from a
combination of initiatives launched in the past two years, including
cost savings, new products, new served markets, alliances, intensified
sales and marketing efforts, and in bringing additional transit
security-related products and services into the product mix. When
coupled with the favorable outcome in August of a 45 percent increase
in U.S. funding as a result of the $286.4 billion transportation bill,
The Safe, Accountable, Flexible, Efficient Transportation Equity Act -
A Legacy for Users (SAFETEA-LU), our plan should position the Company
to reach the $85 million to $95 million range of annual sales run rate
by the end of 2008. However, we do not expect the recent legislative
actions increasing U.S. funding for our served markets to have a
material effect until mid-2006. The international sector of our
business continues to show improvement trends. I am quite optimistic
about our long-term trends and indications."
    Mr. Turney said the Company is particularly focused and energized
about the business potential of its new transit security-related
products and services. "Although these products and services will not
have a material impact on the Company's 2005 results, we forecast
demand materializing in 2006 and beyond as our customers strive to
further mitigate risks such as those recently threatened in New York
City and Boston."

    Intensified Investor Relations Efforts

    The Company recently launched an investor relations campaign to
deliver the DRI story to financial professionals and investors. The
Investor Relations Company of suburban Chicago has been retained to
provide assistance with this effort.
    "We worked with this organization for several years up to 2003
when we paused to refocus our message and retool our product line as
we weathered what turned out to be a very long stagnation period in
the U.S. transit market. As in the past, we believe The Investor
Relations Company can help us educate the capital markets about our
organization," Mr. Turney said.

    Upcoming Events

    --  Mr. Turney will be in New York City and Chicago during the
        week of Oct. 24 to discuss the DRI story in individual and
        group meetings with financial professionals.

    --  David N. Pilotte, the Company's Chief Financial Officer, will
        present the DRI story to individual investors at the
        BetterInvesting National Convention at the Cobb Galleria
        Centre in Atlanta on Saturday, Nov. 4.

    --  Veronica B. Marks, the Company's Corporate Communications
        Manager, will participate as an exhibitor in the Greater Tulsa
        Area Chapter's 2005 BetterInvesting Investors Fair(R), slated
        at The University of Tulsa's Allen Chapman Student Activity
        Center on Saturday, Nov. 19.

    About the Company

    Digital Recorders, Inc. is a technology leader in transportation,
law enforcement, and security digital communications systems using
proprietary hardware and software applications. Our products improve
the flow and mobility of people through transportation infrastructure,
mitigate security threats, and enhance law enforcement agencies'
surveillance capabilities. Our transportation communications products
- TwinVision(R) and Mobitec(R) electronic destination sign systems,
Talking Bus(R) voice announcement systems, Internet-based passenger
information systems, and computer-aided dispatch/ automatic vehicle
location and monitoring systems, and VacTell(TM) video actionable
intelligence systems - enhance public transportation and mitigate
security threats worldwide. Our electronic surveillance tools,
including microphone amplifiers and processors, countermeasures
devices, speech activity detectors, and noise cancellation equipment,
help law-enforcement agencies around the globe 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, statements concerning expected results, future revenues
and profitability, the success of recent product and service
introductions, the future state of our industry sector as a whole, our
future assessment of current trends and indicators, the effect of the
passage of SAFETEA-LU, our future presentations, or the timing of
future filings as well as 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 risks and uncertainties that the assumptions
behind expected results, future revenues and profitability, the
success of recent product and service introductions, the uncertainties
surrounding our industry sector as a whole, the risk that we may
incorrectly analyze current trends and indicators, the risk that the
passage of SAFETEA-LU will not have a material positive effect, the
ability to make future presentations, or the timing of future filings
may not prove accurate over time as well as other risks and
uncertainties set forth in our Annual Report on 10-K filed April 1,
2005, particularly those identified in Risk Factors Affecting Our
Business. 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.



    CONTACT: Digital Recorders, Inc., Dallas
             Veronica B. Marks, 214-378-4776
             Fax: 214-378-8437
             veronicam@digrec.com
             or
             The Investor Relations Company
             Investor Relations Contact
             Brien Gately, 800-536-8472
             Fax: 847-296-4460
             bgately@tirc.com