Exhibit 99.1

Digital Recorders, Inc. Announces Preliminary First Quarter 2005 Sales

    DALLAS--(BUSINESS WIRE)--April 29, 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 first quarter 2005 sales were approximately $10.6
million, reflecting a decrease of 12.4 percent from the $12.1 million
in sales posted for the same period a year ago.
    "As previously indicated, our first quarter 2005 sales results
were below our expectations primarily due to customer-requested order
delays and a general softness in the transit industry. Although our
law enforcement and surveillance segment's sales increased by
approximately 23 percent over the same period last year, we still
expect to record a significant loss for the quarter," David L. Turney,
the Company's Chairman, Chief Executive Officer, and President, said.
    On or about May 16, 2005, the Company plans to file with the
Securities and Exchange Commission a Form 10-Q for the period ended
March 31, 2005.

    Long-Term Outlook

    Mr. Turney has previously said the Company's fiscal year 2005
initiatives include: (1) launching several additional products and
services, including some that have specific security-related features
and benefits for transit industry customers; (2) introducing new
served markets in the U.S. and abroad; (3) intensifying sales and
marketing efforts in existing served markets; and (4) continuing the
exploration of acquisition and strategic alliance opportunities to
further accelerate long-term growth.
    "We believe that new products and services and intensified sales
and marketing efforts, when coupled with the anticipated favorable
outcome of the reauthorization of the Transportation Equity Act: A
Legacy for Users (TEA-LU, H.R. 3), may position us to attain $55
million to $60 million-plus annualized run rate revenue over the next
18 months to 24 months. At that level of revenue, we expect
profitability, but we can offer no assurances of such. Disruptions
caused by uncertainties over federal legislation, which have not yet
been eliminated and may be with us for several more months, appear to
be diminishing. Although we will continue having period-over-period
issues given the uneven nature of our contract-oriented business, I
remain optimistic and positive regarding long-term trends and
indications," Mr. Turney said.

    Annual Meeting of Shareholders

    The DRI Annual Meeting of Shareholders will be held Friday, June
3, 2005, at 10 a.m. (Eastern) at the Radisson Hotel Research Triangle
Park located at Interstate 40 at Davis Drive (Exit 280) in Research
Triangle Park, 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.

    About the Company

    Digital Recorders, Inc. is a market leader in transit,
transportation, and law enforcement and 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. 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, statements concerning our future revenue projections,
the results of future federal legislation, including the
reauthorization of the Transportation Equity Act: A Legacy for Users,
future product and service offerings, potential acquisitions or
strategic alliances, as well as 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 risks and uncertainties that the assumptions
behind future revenue projections may not prove accurate over time,
risks that federal legislation related to the transportation/security
industry may not be enacted in the near future, if at all, or if
enacted that such legislation would not prove to be beneficial to the
Company, risks that future product and service offerings may not be
accepted by our customers, risks that the Company might not identify
or be able to consummate future acquisitions or strategic alliances or
that if consummated that such transactions would prove to be
beneficial to the Company, as well as other risks and uncertainties
set forth in our Annual Report on 10-K filed April 1, 2005,
particularly those identified in Risk Factors Affecting Our Business.
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.

    CONTACT: Digital Recorders, Inc., Dallas
             Veronica B. Marks, 214-378-4776
             Fax: 214-378-8437
             E-Mail: veronicam@digrec.com