Exhibit 99.1


Digital Recorders, Inc. Announces Debenture Conversions and Exercises,
and Effectiveness of S-3 Filing

    DALLAS--(BUSINESS WIRE)--April 30, 2004--Digital Recorders, Inc.
(DRI) (Nasdaq:TBUS), a market leader in transit, transportation and
law enforcement digital communications and audio enhancement systems,
announced today that certain of its outstanding debt securities and
preferred stock have been converted into shares of common stock.

    Debenture Conversions and Exercises

    BFSUS Special Opportunities Trust PLC and Renaissance U.S. Growth
Investment Trust PLC have converted the debentures held by them in
accordance with their terms. Upon such conversions, the Company issued
an aggregate of 2,075,000 shares of common stock to the holders. The
debentures that have been converted and recorded as equity had an
aggregate principal amount of $4,150,000 and bore interest at 8.0
percent per annum. The Company believes that these shares have been
sold to other investors. This conversion results in $332,000 reduced
interest expense per annum. A pro forma presentation of this and other
transactions detailed herein will be included in the Company's Form
10-Q for the quarter ended March 31, 2004, which is expected to be
filed on or about Wednesday, May 5, 2004.
    Concurrently with the debenture conversions, all of the Company's
outstanding shares of Series F Convertible Preferred Stock, which were
held by Dolphin Offshore Partners, L.P., were converted into 760,232
shares of the Company's common stock. The Series F Convertible
Preferred Stock had an aggregate liquidation value of $1,520,414 and
required the payment of dividends, payable in additional shares of
Series F Convertible Preferred Stock, at the rate of 3.0 percent per
annum.
    The conversions of the debentures and Series F Stock did not
result in any cash proceeds to the Company. However, the Company has
received approximately $605,500 as payment of exercise prices in
connection with the exercise of certain warrants to purchase an
aggregate of 170,000 shares of common stock since April 26, 2004.
These warrant exercises, together with the conversions, previously
announced private placement of 625,000 shares and partial conversion
of other convertible securities, have increased the number of
outstanding shares of common stock of the Company at April 30, 2004,
to approximately 7,639,707 shares, up from 3,944,475 shares at March
31, 2004.

    Effectiveness of S-3 Filing

    The Company also announced that its previously filed Registration
Statement on Form S-3, as amended, was declared effective on April 24,
2004. On April 29, 2004, the Company filed with the Securities and
Exchange Commission the final Prospectus and Prospectus Supplement No.
1 in connection with the Registration Statement. The Registration
Statement covers the resale by certain security holders of the
Company, including BFSUS Special Opportunities Trust PLC, Renaissance
U.S. Growth Investment Trust PLC, and Dolphin Offshore Partners, L.P.,
of up to 3,543,893 shares of the Company's common stock. The Company
will not receive any proceeds from the sale of the shares covered by
that Registration Statement.

    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
             E-Mail: veronicam@digrec.com