1


Securities and Exchange Commission
Washington, D.C. 20549


May 12, 1998


Ladies and Gentlemen:

We were previously principal accountants for Digital Recorders, Inc. and, under
the date of March 20, 1998, we reported on the consolidated financial
statements of Digital Recorders, Inc. and subsidiaries as of and for the years
ended December 31, 1997 and 1996. On May 5, 1998, our appointment as principal
accountants was terminated. We have read Digital Recorders, Inc.'s statements
included under Item 4 of its Form 8-K dated May 12, 1998, and we agree with
such statements.

Very truly yours,


KPMG Peat Marwick LLP