Exhibit 99.1

Digital Recorders, Inc. Announces Annual Employee Teamsmanship Award
Winner

    DALLAS--(BUSINESS WIRE)--May 26, 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 Accounting Supervisor B. Ranell Bridges, CPA, was
named by the Board of Directors' Human Resources and Compensation
Committee and the Board of Directors as the DRI Teamsmanship Award
recipient for fiscal year 2003.
    Ms. Bridges was nominated by her peers for the DRI Teamsmanship
Award. Others nominated included:

    --  Andy Schnaufer, Software Engineer, Digital Recorders, Research
        Triangle Park, N.C.;

    --  Paul Hock, Sales Manager, Government Sales, Digital Audio
        Corporation, Research Triangle Park, N.C.;

    --  Juan Torres, Production Associate, TwinVision na, Inc.,
        Research Triangle Park, N.C.;

    --  Henrik Max, Technical Support, After Sales Department, Mobitec
        AB, Herrljunga, Sweden; and

    --  Jorg Bullinger, Development Manager, Transit-Media Mobitec
        GmbH, Ettlingen, Germany.

    All DRI Teamsmanship Award nominees were honored during an
employee dinner Tuesday, May 25, at the Sheraton Imperial Hotel and
Convention Center in Durham, N.C. As the DRI Teamsmanship Award
recipient, Ms. Bridges received a trophy, a cash award, and other
equity-based recognition. In addition, her name was added to the
Company's perpetual "Teamsmanship" plaque. All other nominees received
a trophy and cash award.

    About the Winner

    B. Ranell Bridges, CPA has more than 16 years' experience in
accounting and office management, as well as accounting system
software conversions. She joined the Company as Accounting Supervisor
in March 2003. Prior to joining the Company, Ms. Bridges was Senior
Accountant at Carter & Burgess, Inc. in Raleigh, N.C., from 2000 to
2003. She received a Bachelor of Business Administration in Accounting
from The University of Texas at Arlington in May 1983.
    "Ranell has played a major role in the Company's Finance and
Administration area. She has performed her responsibilities in a
manner setting an example for all of us to follow. She was selected
for the DRI Teamsmanship Award due to the overwhelming opinion of her
peers and DRI management regarding her importance to the Company's
success," David L. Turney, the Company's Chairman, Chief Executive
Officer, and President, said.

    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, mitigate security threats, and 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 locating and monitoring systems --
enhance public transportation and mitigate security threats worldwide.
Our electronic surveillance tools, including microphone amplifiers and
processors, countermeasures devices, speech activity detectors, and
radio/television noise cancellers, help law-enforcement agencies
around the globe detect, 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. It is important to note the
Company's actual results could differ materially from those
contemplated in the Company's forward-looking statements as a result
of various factors. Among other factors, the Company's results will be
affected, perhaps materially, by general economic conditions, the
availability of national government assistance and funding to local
transportation authorities, the adoption and implementation of
regulations concerning public transportation services, product demand
and market acceptance risks, the effect of import, licensing and trade
restrictions, the results of implementing the Company's business plan,
the impact on the Company of its relationship with its lenders, the
plans and prospects of competitors, the impact of competitive products
and pricing, currency fluctuations, infringement by third parties of
the Company's trade secrets and other intellectual property, the
burdens and costs of defending against potential infringement claims
against the Company, and our ability to attract and retain personnel.
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 risks associated with the
Company's business.

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