Exhibit 99.1

Digital Recorders, Inc. Announces Second Quarter Preliminary Results;
CEO Expects Profitable Quarter

    DALLAS--(BUSINESS WIRE)--July 14, 2003--Digital Recorders, Inc.
(DRI) (NASDAQ:TBUS), a market leader in transit, transportation and
law enforcement digital communications and audio enhancement systems,
announced today second quarter 2003 revenues are preliminarily
expected to be $12.5 million, as compared to $12.4 million for the
same period in fiscal year 2002; final second quarter results will be
announced Thursday, Aug. 14, 2003.

    SECOND QUARTER 2003

    "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 cost reductions, and operating expenses. The second quarter
was profitable, as we had previously projected, but I should note that
it was not as profitable as second quarter 2002," David Turney, the
Company's Chairman, Chief Executive Officer and President, said.
"Among other factors, operating margins were lower, and we were below
our target revenue range for the quarter due primarily to delays in
significant expected orders in our domestic market. Our international
business showed stronger than projected revenue performance."

    FIRST SIX-MONTHS 2003 REVENUES

    "It is important that we reflect on progress made during the first
half of 2003, as compared to the first half of 2002," Mr. Turney said.
"The first quarter 2003 loss of $211,466 on $10.9 million in revenues
was a substantial improvement over the $703,808 loss on $8.6 million
in revenues in the same quarter of 2002. For the six-months, we will
be reporting about $23.5 million in revenues as compared to $21.1
million for the same period last year."

    FISCAL YEAR 2003 OUTLOOK

    "The Company's fiscal year 2003 revenue range was previously
projected to be $52 million to $57 million. However, since we now
believe that our customer's required delivery dates on some orders may
be moved close enough to year end that some might actually ship in
fiscal year 2004, we are now projecting fiscal year 2003 at $52
million to $54 million. The Company's earnings-per-share range, which
was previously projected as $0.20 to $0.35, is currently viewed as
being $0.20 to $0.25," Mr. Turney said. "Each of the Company's
business units has new product and service offerings in fiscal year
2003. We also continue to increase our market activity in North
America, South America, Europe, Asia and Australia."

    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.

    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 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.

                For More Information, Please Refer to:
                            www.digrec.com

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