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): August 3, 2006

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

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



        North Carolina                    1-13408                56-1362926
 (State or Other Jurisdiction    (Commission File Number)      (IRS Employer
       of 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 August 3, 2006, Digital Recorders, Inc. noted that, according to a
recent report from the American Public Transportation Association, U.S. public
transportation ridership grew by 4.25 percent in first quarter 2006 compared to
the same period last year.

         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 August 3, 2006.






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: August 3, 2006          By:  /s/ KATHLEEN BROWN OHER, CPA
                                   ---------------------------------------------
                                   Kathleen Brown Oher, CPA
                                   Vice President, Chief Financial Officer,
                                   Treasurer, and Secretary








INDEX TO EXHIBITS

EXHIBIT
NUMBER     DESCRIPTION
- -------    -----------

   99.1    Press release dated August 3, 2006.