Exhibit 99.1

 Digital Recorders, Inc. Announces New Board of Directors' Technology Committee

     DALLAS--(BUSINESS WIRE)--August 25, 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 it
has formed a Technology Committee with a charter approved by the Board of
Directors on Aug. 23, 2004.
     The DRI Board of Directors' Technology Committee will serve as a resource
to DRI's management and technical personnel, monitor the Company's technological
developments, and assist the development of policies and strategies relating to
technological opportunities.
     "Our new Technology Committee, and the intellectual resources that it can
assemble, is a great addition to the Company's technological capabilities. It
was formed at my request and is an extension of the strategy that has been at
the core of DRI operations for many years -- to be a technology leader. The
Technology Committee's resources will be particularly valuable as we continue to
expand our product offerings in vehicle locating and reporting systems,
passenger information systems, and security-risk mitigation capabilities that
our products deliver to customers," David L. Turney, the Company's Chairman,
Chief Executive Officer, and President, said.

     Technology Committee

     Nuria I. Fernandez, age 44, will serve as the DRI Board of Directors'
Technology Committee Chairperson. She has been a DRI director since May 2004.
Ms. Fernandez currently is Senior Vice President of Business Development at
Earth Tech, an engineering consulting firm headquartered in Long Beach, Calif.
She received a Bachelor of Science degree in Civil Engineering from Bradley
University and a Master of Science degree in Business Administration from
Roosevelt University.

     Other DRI Board of Directors' Technology Committee members include:

     --   J. Phillips L. Johnston, J.D., and

     --   John K. Pirotte.

     For complete biographies, refer to the Company's Definitive Proxy
Statement, which was filed with the Securities and Exchange Commission on May 3,
2004.

     About the Company

     Digital Recorders, Inc. is a market leader in transit, transportation and
law enforcement/security 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
              E-Mail: veronicam@digrec.com