Exhibit 99.1

Digital Recorders, Inc. Announces Series AAA Preferred Stock Shareholders' Vote
to Reduce Dividend and Conversion Rates

    DALLAS--(BUSINESS WIRE)--Feb. 11, 2005--Digital Recorders, Inc. (DRI)
(Nasdaq:TBUS), a market leader in transit, transportation, and law
enforcement digital communications and audio enhancement systems,
announced today that shareholders of its non-publicly traded Series
AAA Preferred Stock approved two changes to its Articles of
Incorporation during a Special Meeting of the Series AAA Preferred
Stock shareholders held on Feb. 10, 2005, at the Company's North
Carolina offices.
    The approved changes to the Series AAA Preferred Stock Articles of
Incorporation provide: (1) a reduction to the annual dividend rate for
each share of Series AAA Preferred Stock from 10 percent to 5 percent;
and (2) a reduction in the conversion rate for each share of Series
AAA Preferred Stock from $8.00 per share to $5.50 per share.
    "As amended, the Series AAA Preferred Stock will remain
outstanding until such time the Company imposes a mandatory redemption
of the equity security -- an event subject to the Company's sole
discretion per the Articles of Incorporation amendment approved by
Series AAA Preferred Stock shareholders on March 6, 2003. These
changes were the only changes proposed to the Series AAA Preferred
Stock Articles of Incorporation. All other provisions within that
document remain the same. In addition to bringing the dividend rate on
the Series AAA Preferred Stock more in line with the current market,
these changes may improve the Company's financial position. We deeply
appreciate the long relationship we have been privileged to enjoy with
our Series AAA Preferred Stock shareholders and their confidence in
the Company," David L. Turney, DRI's Chairman, Chief Executive Officer
and President, said.

    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(R) 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

    Statements regarding the possible future redemption of our Series
AAA Preferred Stock and the possible effect such amendments may have
on our balance sheet, as well as other statements that are not
historical facts, are "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements rely on a number of assumptions concerning
future events and are subject to a number or risks and uncertainties
that could cause actual results and timing to differ from those
contained in the forward-looking statements. These include, but are
not limited to, uncertainties as to the occurance and timing of future
redemptions and the benefits, if any, these amendments may have on our
financial position. 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.
             Veronica B. Marks, 214-378-4776
             Fax: 214-378-8437
             veronicam@digrec.com
             or
             IR Counsel Contact:
             Citigate Sard Verbinnen
             Robin Weinberg, 212-687-8080
             Fax: 212-687-8344
             rweinberg@sardverb.com