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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0001005477-05-002327.txt : 20050627
<SEC-HEADER>0001005477-05-002327.hdr.sgml : 20050627
<ACCEPTANCE-DATETIME>20050627163325
ACCESSION NUMBER:		0001005477-05-002327
CONFORMED SUBMISSION TYPE:	4
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20050623
FILED AS OF DATE:		20050627
DATE AS OF CHANGE:		20050627

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:			1204

	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:			HIGGINS JOHN DEBREE
		CENTRAL INDEX KEY:			0001256150

	FILING VALUES:
		FORM TYPE:		4
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	033-82870-A
		FILM NUMBER:		05917843

	MAIL ADDRESS:	
		STREET 1:		105 HIGH FARMS ROAD
		CITY:			GLEN HEAD
		STATE:			NY
		ZIP:			11545
</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>2005-06-23</periodOfReport>

    <notSubjectToSection16>0</notSubjectToSection16>

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

    <reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001256150</rptOwnerCik>
            <rptOwnerName>HIGGINS JOHN DEBREE</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>105 HIGH FARMS ROAD</rptOwnerStreet1>
            <rptOwnerStreet2></rptOwnerStreet2>
            <rptOwnerCity>GLEN HEAD</rptOwnerCity>
            <rptOwnerState>NY</rptOwnerState>
            <rptOwnerZipCode>11545</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
        <reportingOwnerRelationship>
            <isDirector>1</isDirector>
            <isOfficer>0</isOfficer>
            <isTenPercentOwner>0</isTenPercentOwner>
            <isOther>0</isOther>
        </reportingOwnerRelationship>
    </reportingOwner>

    <derivativeTable>
        <derivativeTransaction>
            <securityTitle>
                <value>Digital Recorders, Inc. Series G Convertible Preferred Stock</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>2.21</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2005-06-23</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>P</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>50</value>
                    <footnoteId id="F1"/>
                </transactionShares>
                <transactionPricePerShare>
                    <value>5000</value>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2005-06-23</value>
            </exerciseDate>
            <expirationDate>
                <footnoteId id="F3"/>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Digital Recorders, Inc. Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>113122</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>50</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
        <derivativeTransaction>
            <securityTitle>
                <value>Digital Recorders, Inc. Warrants</value>
            </securityTitle>
            <conversionOrExercisePrice>
                <value>2.21</value>
            </conversionOrExercisePrice>
            <transactionDate>
                <value>2005-06-23</value>
            </transactionDate>
            <transactionCoding>
                <transactionFormType>4</transactionFormType>
                <transactionCode>J</transactionCode>
                <equitySwapInvolved>0</equitySwapInvolved>
                <footnoteId id="F2"/>
            </transactionCoding>
            <transactionAmounts>
                <transactionShares>
                    <value>35714</value>
                </transactionShares>
                <transactionPricePerShare>
                    <footnoteId id="F2"/>
                </transactionPricePerShare>
                <transactionAcquiredDisposedCode>
                    <value>A</value>
                </transactionAcquiredDisposedCode>
            </transactionAmounts>
            <exerciseDate>
                <value>2005-06-23</value>
            </exerciseDate>
            <expirationDate>
                <value>2010-06-23</value>
            </expirationDate>
            <underlyingSecurity>
                <underlyingSecurityTitle>
                    <value>Digital Recorders, Inc. Common Stock</value>
                </underlyingSecurityTitle>
                <underlyingSecurityShares>
                    <value>35714</value>
                </underlyingSecurityShares>
            </underlyingSecurity>
            <postTransactionAmounts>
                <sharesOwnedFollowingTransaction>
                    <value>35714</value>
                </sharesOwnedFollowingTransaction>
            </postTransactionAmounts>
            <ownershipNature>
                <directOrIndirectOwnership>
                    <value>D</value>
                </directOrIndirectOwnership>
            </ownershipNature>
        </derivativeTransaction>
    </derivativeTable>

    <footnotes>
        <footnote id="F1">Dividends on Digital Recorders, Inc.'s Series G Preferred Stock are paid-in-kind as additional shares of Series G Preferred.  As such, the total number of shares owned by Mr. Higgins will accumulate at a rate of 2 percent per quarter, compounded quarterly.</footnote>
        <footnote id="F2">Warrants were acquired in connection with the purchase of 50 shares of Digital Recorders, Inc. Series G Convertible Preferred Stock.</footnote>
        <footnote id="F3">The Series G shares are not redeemable by the holder, but are redeemable at the Company's option after five years.</footnote>
    </footnotes>

    <ownerSignature>
        <signatureName>/s/ John D. Higgins Sr.</signatureName>
        <signatureDate>2005-06-27</signatureDate>
    </ownerSignature>
</ownershipDocument>
</XML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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