Exhibit 99.1

 Digital Recorders, Inc. Announces $5.0 Million Private Placement of
                        Common Stock Completed

    DALLAS--(BUSINESS WIRE)--April 26, 2004--Digital Recorders, Inc.
(DRI) (Nasdaq:TBUS), market leader in transit, transportation and law
enforcement digital communications and audio enhancement systems,
announced today that it has completed a $5.0 million private placement
of its common stock to certain qualified institutional investors.
    In an offering completed April 24, 2004, the Company sold 625,000
shares of common stock to the investors for $8.00 per share. The
Company also granted the investors warrants to acquire 125,000 shares
of common stock at an exercise price of $8.80 per share, exercisable
for a period of five years. The Company intends to use the net
proceeds of the private placement for general working capital
purposes.
    "As I said last week, this additional equity will be an important
balance sheet enhancement. It will support and amplify our profit
improvement focus as we further leverage the economies of scale upon
which we have been building, and will continue to build, in our 2004
growth plans," David L. Turney, the Company's Chairman, Chief
Executive Officer, and President, said.
    The securities being offered were not registered under the
Securities Act of 1933, as amended, and may not be offered or sold
within the United States absent registration or an available exemption
from such registration requirements. However, under a registration
rights agreement, the Company will be required to register the resale
of the securities (and securities issuable upon exercise of the
warrant) under the Securities Act.
    This announcement does not constitute an offer to sell or the
solicitation of offers to buy any security, and shall not constitute
an offer, solicitation, or sale of any security in any jurisdiction in
which such offer, solicitation, or sale would be unlawful.

    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 relationships with its lenders
and creditors. 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 and the risks associated
with our business.

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