Exhibit 99.1

  Digital Recorders, Inc. Notes Additional Transit Security Funding
                     Being Sought by U.S. Senate;
 CEO Says Funding Trends Appear to Be Moving in a Positive Direction

    DALLAS--(BUSINESS WIRE)--Sept. 19, 2006--Digital Recorders, Inc.
(DRI) (Nasdaq:TBUS), a digital communications technology leader in the
transportation, law enforcement, and security industries, noted today
that the U.S. Senate recently voted to amend H.R. 4954, the Port
Security Improvement Act of 2006, to include $3.5 billion for transit
security over three years.
    According to the American Public Transportation Association
(APTA), the Senate's amendment requires the Secretary of the
Department of Homeland Security to award grants directly to public
transportation agencies for allowable capital security improvements,
including: tunnel protection systems; chemical, biological,
radiological or explosive detection systems; surveillance,
communications and emergency response equipment; evacuation
improvements; security training for employees; live or simulated
drills; public awareness campaigns; and canine patrols.
    According to APTA, the House version of this bill does not include
the provisions for transit security investments; therefore, if the
Senate version is passed in its current form, a conference committee
will need to resolve the differences between the two bills.
    APTA also recently reported that the U.S. federal government has
allocated less than $400 million for transportation security since the
Sept. 11, 2001 terrorist attacks -- yet the American transit industry
"knows" that it needs at least $6 billion to meet the security needs
of its customers.
    In contrast, APTA announced in July 2006 that the aviation
industry had received more than $20 billion for aviation security
since the 2001 terrorist attacks.
    "Considering that Americans use public transportation
approximately 32 million times each day -- that's 16 times more than
domestic airline trips -- the lack of adequate transit security
funding is disturbing. If approved, this additional $3.5 billion in
funding should aide the U.S. transit industry's continued recovery
from the downturn caused by the lack of adequate federal funding from
2003 to 2005," David L. Turney, the Company's Chairman, President, and
Chief Executive Officer, said.
    APTA is a nonprofit international association of 1,600 member
organizations including public transportation systems; planning,
design, construction and finance firms; product and service providers;
academic institutions; and state associations and departments of
transportation. APTA members serve the public interest by providing
safe, efficient and economical public transportation services and
products. APTA members serve more than 90 percent of persons using
public transportation in the United States and Canada. For more
information, go to www.apta.com.

    TRANSIT INDUSTRY REPORT

    In "Beyond Aviation: The Emerging Ground Transportation Security
Market," a Convergent Security Group market report published in
September 2006 by the Legend Merchant Group and GrayDome Partners,
LLC, authors Scott Greiper and Mark Sauter said terrorist attacks on
transportation facilities in Moscow, Madrid, London, and Mumbai have
killed hundreds of people in the last two years, and several plots
against the New York City mass transit system had been thwarted.
    Mr. Greiper and Mr. Sauter also said, "Some 6,000 transit systems
carry about 14 million Americans each weekday on buses, subways,
ferries, and light rail -- far exceeding the number of passengers on
airplanes."
    The authors surmised, "We believe the current imbalance is
beginning to shift and that government and industry funding for ground
transportation security is poised for growth ...."
    "The authors' conclusions are consistent with those recognized by
DRI's management team while completing the Company's strategic
business plans for 2007 and beyond. The slowness of progress in
funding the mass transit industry's security readiness has been
troubling. However, as the report suggests, we may now be seeing
funding trends accelerate as exemplified by the Senate's recent move,"
Mr. Turney said.
    The Legend Merchant Group is a financial services firm based in
New York City and San Francisco. For more information, go to
www.legendmerchant.com.

    ABOUT THE COMPANY

    Digital Recorders, Inc. is a digital communications technology
leader in the transportation, law enforcement, and security
industries. Using proprietary hardware and software applications, our
products improve the flow and mobility of people through
transportation infrastructure, improve energy efficiency, 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. By assisting transit vehicle operators'
quest to increase ridership, our products also help reduce dependence
on fuel. Our DAC(R) 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 the opinions and/or research of
the DRI senior management team, the American Public Transportation
Association, the Convergent Security Group, the Legend Merchant Group,
GrayDome Partners, LLC, Scott Greiper, and Mark Sauter, statements
about the adequacy of current government funding levels for transit
security, statements about the perceived motivations behind or results
of the recent Senate amendment to H.R. 4954, statements regarding the
perceived trend of increased attention to and funding of public
transportation, 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 anticipated
outcome of any opinions and/or research of the DRI senior management
team, the American Public Transportation Association, the Convergent
Security Group, Legend Merchant Group, GrayDome Partners, LLC, Scott
Greiper, and Mark Sauter may not prove beneficial to the Company
and/or the U.S. transit industry as a whole, risk that the public
transportation sector will not receive additional funding, attention,
and support from lawmakers, risk that the need for additional funding
for public transit security may not be accurate or predictive of
future trends, as well as other risks and uncertainties set forth in
our Annual Report on Form 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