-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 AeKVfkdszZgK5VrSzoxQdukXZ1Wl4C4cakKI8AQDG6Cz3AhbxaXdw6+YAwlW59mP
 eBke0775MINyApruQrn9TA==

<SEC-DOCUMENT>0001005477-04-003396.txt : 20040922
<SEC-HEADER>0001005477-04-003396.hdr.sgml : 20040922
<ACCEPTANCE-DATETIME>20040922171824
ACCESSION NUMBER:		0001005477-04-003396
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20040813
FILED AS OF DATE:		20040922
DATE AS OF CHANGE:		20040922

ISSUER:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DIGITAL RECORDERS INC
		CENTRAL INDEX KEY:			0000853695
		STANDARD INDUSTRIAL CLASSIFICATION:	RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663]
		IRS NUMBER:				561362926
		STATE OF INCORPORATION:			NC
		FISCAL YEAR END:			1231

	BUSINESS ADDRESS:	
		STREET 1:		4018 PATRIOT DRIVE
		STREET 2:		SUITE 100
		CITY:			DURHAM
		STATE:			NC
		ZIP:			27703
		BUSINESS PHONE:		9193612155

	MAIL ADDRESS:	
		STREET 1:		4018 PATRIOT DRIVE
		STREET 2:		SUITE 100
		CITY:			DURHAM
		STATE:			NC
		ZIP:			27703

REPORTING-OWNER:	

	OWNER DATA:	
		COMPANY CONFORMED NAME:			TAYOR LAWRENCE A
		CENTRAL INDEX KEY:			0001255390

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	033-82870-A
		FILM NUMBER:		041041635

	BUSINESS ADDRESS:	
		STREET 1:		1916 SHUMARD OAK LANE
		CITY:			IRVING
		STATE:			TX
		ZIP:			75063
		BUSINESS PHONE:		9724328489

	MAIL ADDRESS:	
		STREET 1:		1916 SHUMARD OAK LANE
		CITY:			IRVING
		STATE:			TX
		ZIP:			75063
</SEC-HEADER>
<DOCUMENT>
<TYPE>4
<SEQUENCE>1
<FILENAME>edgar123.xml
<DESCRIPTION>FORM 4
<TEXT>
<XML>
<?xml version="1.0"?>
<ownershipDocument>

    <schemaVersion>X0202</schemaVersion>

    <documentType>4</documentType>

    <periodOfReport>2004-08-13</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

    <issuer>
        <issuerCik>0000853695</issuerCik>
        <issuerName>DIGITAL RECORDERS INC</issuerName>
        <issuerTradingSymbol>TBUS</issuerTradingSymbol>
    </issuer>

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001255390</rptOwnerCik>
            <rptOwnerName>TAYOR LAWRENCE A</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>1916 SHUMARD OAK LANE</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>IRVING</rptOwnerCity>
            <rptOwnerState>TX</rptOwnerState>
            <rptOwnerZipCode>75063</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>1</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
            <officerTitle>Secretary, CFO, and VP</officerTitle>
        </reportingOwnerRelationship>
    </reportingOwner>

    <nonDerivativeTable>
        <nonDerivativeHolding>
            <securityTitle>
                <value>TBUS Common</value>
            </securityTitle>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>44300</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>I</value>
                </directOrIndirectOwnership>
                <natureOfOwnership>
                    <value>JTWROS</value>
                </natureOfOwnership>
            </ownershipNature>
        </nonDerivativeHolding>
    </nonDerivativeTable>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>TBUS Common Option</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>2.90</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2004-08-13</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>A</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>15000</value>
                </transactionShares>
                <transactionPricePerShare>
                    <value>2.90</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2005-08-13</value>
                <footnoteId id="F1"/>
            </exerciseDate>
            <expirationDate>
                <value>2014-08-13</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>TBUS Common</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>15000</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>105000</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">Three year vesting schedule applies</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>Lawrence A. Taylor</signatureName>
        <signatureDate>2004-09-22</signatureDate>
    </ownerSignature>
</ownershipDocument>

</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----