UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

       Date of Report (Date of Earliest Event Reported): October 25, 2004

                                -----------------

                             Digital Recorders, Inc.
             (Exact Name of Registrant as Specified in Its Charter)



        North Carolina                  1-13408                56-1362926
- -------------------------------- ------------------------  -------------------
(State or Other Jurisdiction of  (Commission File Number)     (IRS Employer
        Incorporation)                                     Identification No.)


                5949 Sherry Lane, Suite 1050, Dallas, Texas       75225
               ---------------------------------------------    ----------
                 (Address of Principal Executive Offices)       (Zip Code)


        Registrant's Telephone Number, Including Area Code    (214) 378-8992
                                                              --------------


         Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17
    CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
    CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
    Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
    Exchange Act (17 CFR 240.13e-4(c))





ITEM 7.01.  Regulation FD Disclosure


On Oct. 25, 2004, Digital Recorders, Inc. announced in a press release that it
expects to report third quarter revenue of approximately $11.6 million, or an
increase of about 9.8 percent over same-period results a year ago.

A copy of the Company's press release is attached hereto as Exhibit 99.1 and is
incorporated herein by reference. This Form 8-K and the attached exhibit are
furnished to, but not filed with, the Securities and Exchange Commission.


ITEM 9.01.        Financial Statements and Exhibits

(a) Exhibits.
         99.1     Press release dated October 25, 2004.








Signature(s)

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                 DIGITAL RECORDERS, INC.


Date: October 25, 2004           By:    /s/ David L. Turney
                                        ---------------------------
                                        David L. Turney
                                        Chairman, Chief Executive
                                        Officer and President




INDEX TO EXHIBITS

EXHIBIT
NUMBER     DESCRIPTION
- --------   -----------
  99.1     Press release dated October 25, 2004.