Exhibit 99.1

 Digital Recorders, Inc. Reports Fourth Quarter and Fiscal Year 2004
                      Preliminary Revenue Results

    DALLAS--(BUSINESS WIRE)--Feb. 16, 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 fourth quarter 2004 sales were approximately
$12.0 million and fiscal year 2004 sales were approximately $47.0
million, or increases of about 20.3 percent and 6.7 percent from
same-period results a year ago, respectively, despite softness in the
U.S. transit market.
    "Fiscal year 2004 was a period of diverse and exciting
developments for DRI. During the course of the year, we raised
approximately $10 million, before offering expenses, as a result of
two private equity placements. In addition, holders of our Series E,
Series F, and Series AAA convertible preferred stock converted shares
with liquidation values of $955,000, $1,530,000 and $540,000,
respectively, into shares of common stock, increasing our common
shares outstanding to 9,599,036. Also, year-over-year revenue growth
patterns returned to the range of those existing prior to fiscal year
2003. However, we do expect to incur a significant loss in fourth
quarter and fiscal year 2004 with a majority of the loss reflecting
non-cash charges. Additionally, we believe the lack of passage of the
Transportation Equity Act for the 21st Century reauthorization had a
significant negative effect on fourth quarter and fiscal year 2004
revenue," David L. Turney, the Company's Chairman, Chief Executive
Officer, and President, said.

    Mark Your Calendar

    On or about Thursday, March 31, 2005, the Company expects to: (1)
file its Form 10-K with the Securities and Exchange Commission; (2)
provide additional comments, including an income statement and balance
sheet data, in a separate news release; and (3) conduct a
shareholders' conference call.
    The DRI Annual Meeting of Shareholders is slated to take place on
Friday, June 3, 2005, in Durham, N.C. Shareholders of record at the
close of business on Friday, April 15, 2005, are entitled to receive
notice of, and to vote at, the Annual Meeting and any adjournment
thereof. Final meeting details will be announced later in first
quarter 2005.

    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 our expected revenues and expected losses for
the fourth quarter and full year 2004, the expected timing of future
events, 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, the
completion of our annual audit, and uncertainties as to the timing of
future meetings and announcements. 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
             or
             IR Counsel Contact:
             Citigate Sard Verbinnen, New York
             Robin Weinberg, 212-687-8080
             Fax: 212-687-8344
             E-Mail: rweinberg@sardverb.com