Exhibit 99.1

             Digital Recorders, Inc. Shareholders Approve Proposals
                         During the 2006 Annual Meeting

    DALLAS--(BUSINESS WIRE)--May 26, 2006--Digital Recorders, Inc.
(DRI) (Nasdaq:TBUS), a technology leader in transportation, law
enforcement, and security digital communications systems, announced
today that its shareholders approved the three proposals put forth for
vote at its Annual Meeting of Shareholders, which was held May 24,
2006, in Research Triangle Park, N.C.
    Immediately following the business meeting, DRI Chairman, Chief
Executive Officer, and President David L. Turney reviewed and
discussed with shareholders the Company's fiscal year 2005 and first
quarter 2006 results, as well as its fiscal year 2006 outlook.

    ELECTION RESULTS

    Shareholders cast their votes in favor to:

    --  elect two Class One and three Class Two directors to serve
        until the Annual Meeting of Shareholders in 2007;

    --  ratify the Audit Committee's selection of
        PricewaterhouseCoopers LLP as independent public accountants
        for the Company for fiscal year 2006; and

    --  approve partial payment for duty of members of the Board of
        Directors and employee cash compensation to key executive
        management of the Company in the form of Common Stock.

    No other business was transacted during the Annual Meeting of
Shareholders.

    2006-2007 BOARD OF DIRECTORS

    The following individuals will serve on the Company's 2006-2007
Board of Directors:

    --  John D. Higgins, age 73, Glen Head, N.Y.

    --  C. James Meese Jr., age 64, Raleigh, N.C.;

    --  Stephanie L. Pinson, age 69, Watchung, N.J.;

    --  John K. Pirotte, age 56, Raleigh, N.C.; and

    --  Juliann Tenney, J.D., age 53, Chapel Hill, N.C.

    --  David L. Turney, age 62, Dallas, Texas.

    Each director's term will expire in 2007. For each director's full
biography, please refer to the 2006 Definitive Proxy Statement
available on the Company's Web site, www.digrec.com.

    CHAIRMAN'S COMMENTS

    In his presentation following the business portion of the Annual
Meeting of Shareholders, Mr. Turney said: "In a previous press
release, I made a statement pertaining to some unresolved
uncertainties related to possible general shortages in aluminum
extrusion materials affecting many users of that resource that might
impact our revenues for second quarter 2006. The matter now has been
substantially resolved. While such may still have some impact on our
second quarter results, we expect to recover from the shortage during
third quarter 2006. Further, inclusive of the remaining impact of this
issue, second quarter 2006 results presently appear to be at a revenue
level above that of the same period in 2005."
    According to Mr. Turney, the Company is well along in its
organizational and personnel plans and actions necessary to facilitate
and manage the anticipated revenue increases that should result from
the expected transit market recovery in late 2006 and early 2007.

    ABOUT THE COMPANY

    Digital Recorders, Inc. is a technology leader in transportation,
law enforcement, and security digital communications systems using
proprietary hardware and 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 transportation communications products
- - TwinVision(R) and Mobitec(R) electronic destination sign systems,
Talking Bus(R) voice announcement systems, Digital Recorders(R)
Internet-based passenger information and automatic vehicle
location/monitoring systems, and VacTell(TM) video actionable
intelligence systems - enhance public transportation and mitigate
security threats worldwide. Our electronic surveillance tools,
including microphone amplifiers and processors, countermeasures
devices, speech activity detectors, and noise cancellation equipment,
help law-enforcement agencies around the globe 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 possible shortages in aluminum
extrusion materials, statements about anticipated revenue increases
that should result from the expected transit market recovery in late
2006 and early 2007, statements that the Company is well along in its
organizational and personnel plans, 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, without limitation, the risk that the
Company's assessment of the availability of aluminum extrusion
materials may be incorrect, the risk that we will not achieve the
revenue increases we currently anticipate, the risk that the expected
transit market recovery may not occur when anticipated or at all, the
risk that the Company is not as far along in its organizational and
personnel plans as it perceives, as well as other risks and
uncertainties set forth in our Annual Report on 10-K filed April 17,
2006, 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: Veronica B. Marks
             Manager, Corporate Communications
             Digital Recorders, Inc.
             Phone: (214) 378-4776
             Fax: (214) 378-8437
             E-Mail: veronicam@digrec.com