<?xml version="1.0"?><ownershipDocument>
    <schemaVersion>X0201</schemaVersion>

    <documentType>4</documentType><periodOfReport>2003-09-05</periodOfReport><notSubjectToSection16>0</notSubjectToSection16>
    <issuer>
        <issuerCik>0000818813</issuerCik>
        <issuerName>BITSTREAM INC</issuerName>
        <issuerTradingSymbol>BITS</issuerTradingSymbol></issuer><reportingOwner>
        <reportingOwnerId>
            <rptOwnerCik>0001260708</rptOwnerCik>
            <rptOwnerName>FRENKEL DAVID I</rptOwnerName>
        </reportingOwnerId>
        <reportingOwnerAddress>
            <rptOwnerStreet1>245 FIRST STREET</rptOwnerStreet1>
            <rptOwnerStreet2>17TH FLOOR</rptOwnerStreet2>
            <rptOwnerCity>CAMBRIDGE</rptOwnerCity>
            <rptOwnerState></rptOwnerState>
            <rptOwnerZipCode>MA</rptOwnerZipCode>
            <rptOwnerStateDescription></rptOwnerStateDescription>
        </reportingOwnerAddress>
            <reportingOwnerRelationship>
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Stock</value></securityTitle><transactionDate><value>2003-09-08</value></transactionDate><transactionCoding><transactionFormType>4</transactionFormType><transactionCode>S</transactionCode><equitySwapInvolved>0</equitySwapInvolved></transactionCoding><transactionAmounts><transactionShares><value>5700</value></transactionShares><transactionPricePerShare><value>4.75</value></transactionPricePerShare><transactionAcquiredDisposedCode><value>D</value></transactionAcquiredDisposedCode></transactionAmounts><postTransactionAmounts><sharesOwnedFollowingTransaction><value>2000</value></sharesOwnedFollowingTransaction></postTransactionAmounts><ownershipNature><directOrIndirectOwnership><value>D</value></directOrIndirectOwnership></ownershipNature></nonDerivativeTransaction><nonDerivativeTransaction><securityTitle><value>Class A Common 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Option</value></securityTitle><conversionOrExercisePrice><value>2.30</value></conversionOrExercisePrice><transactionDate><value>2003-09-05</value></transactionDate><transactionCoding><transactionFormType>4</transactionFormType><transactionCode>X</transactionCode><equitySwapInvolved>0</equitySwapInvolved></transactionCoding><transactionAmounts><transactionShares><value>8800</value></transactionShares><transactionPricePerShare><value>2.30</value></transactionPricePerShare><transactionAcquiredDisposedCode><value>D</value></transactionAcquiredDisposedCode></transactionAmounts><exerciseDate><value>2003-08-01</value></exerciseDate><expirationDate><value>2012-08-01</value></expirationDate><underlyingSecurity><underlyingSecurityTitle><value>Class A Common Stock</value></underlyingSecurityTitle><underlyingSecurityShares><value>8800</value></underlyingSecurityShares></underlyingSecurity><postTransactionAmounts><sharesOwnedFollowingTransaction><value>8800</value></sharesOwnedFollowingTransaction></postTransactionAmounts><ownershipNature><directOrIndirectOwnership><value>D</value></directOrIndirectOwnership></ownershipNature></derivativeTransaction></derivativeTable><ownerSignature><signatureName>/s/ David Frenkel</signatureName><signatureDate>2003-09-09</signatureDate></ownerSignature></ownershipDocument>



