Exhibit 99.1

   Digital Recorders, Inc. Announces Surface Transit CAD/AVL Order

    DALLAS--(BUSINESS WIRE)--Sept. 8, 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 its Digital Recorders (DR) division in Research
Triangle Park, N.C., has received an order for more than $490,000 for
its surface transit computer-aided dispatch/automatic vehicle location
(CAD/AVL) software from the City of Albuquerque Transit Department in
Albuquerque, N.M.
    The DR CAD/AVL software will be used to build upon existing DR
equipment used by the City of Albuquerque Transit Department,
including DR600(TM) modular vehicle logic units and global positioning
satellite (GPS) systems.
    "This is a good example of a customer already having DR equipment
installed and now adding functionality. Increasingly, we see
opportunities like this arise; the Company has more than 7,000 DR
systems installed at more than 100 customer locations. We expect
delivery on the Albuquerque order to commence very soon and to
conclude in the first half of 2005," David L. Turney, the Company's
Chairman, Chief Executive Officer, and President, said.

    About the City of Albuquerque Transit Department

    The mission statement of the City of Albuquerque Transit
Department is to be the first choice in transportation services for
the Albuquerque metropolitan area. Its goal is to ensure that all
existing communities are adequately and efficiently served with well
planned and coordinated, well maintained sewer, storm, water, and road
systems, and an integrated, multimodal regional transportation system.
Its strategy is to provide effective, affordable, and diverse
intermodal transportation alternatives to the single occupant vehicle;
and, to plan, provide, and maintain adequate public parking
facilities. The City of Albuquerque Transit Department operates
approximately 123 transit bus vehicles, including 40 CNG buses. For
more information, go to http://www.cabq.gov/transit/index.html.

    About DR's Surface Transit CAD/AVL

    DR's surface transit CAD/AVL system, through use of GPS signals
and integrated dead-reckoning algorithms, helps transit authorities
track and monitor the location and performance of vehicles. As such,
it can perform as an essential element of security for transit
operating systems. DR's CAD/AVL system can monitor on-board systems,
covert alarms, covert microphones, and other security devices, as well
as vehicle schedules. DR's CAD/AVL system implements "instant message
capability" between dispatch and operators, and has other features
important to enhancement of security measures. DR's CAD/AVL system has
several additional beneficial attributes frequently not found in some
competitive systems. DR's CAD/AVL system operates independently of any
single communications system and can operate through existing
telecommunications infrastructures, as well as existing radio systems
or private radio networks. DR's CAD/AVL system uses open communication
standards, permitting sharing of information between passenger
information, scheduling, and maintenance system applications.
    DR's GPS-based system accurately determines vehicle location to
present "next-stop" information to passengers. DR has successfully
leveraged this core technology by expanding into several markets with
security being one of its fundamental focus areas.

    About The DR Division

    The Company's DR division develops and manufactures digital audio
communications products for the transit industry. Products include:
computer aided dispatch/automatic vehicle location systems; automatic
vehicle monitoring systems; Talking Bus(R) automatic voice
announcement systems; StealthMic(TM) vandal-resistant, hands-free
microphone; and more. For more information about the DR division, go
to http://www.talkingbus.com/.

    About the Company

    Digital Recorders, Inc. is a market leader in transit,
transportation and law enforcement or 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,
Internet-based passenger information systems, and computer aided
dispatch/ 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