FORM 5		UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ANNUAL STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940	OMB APPROVAL OMB Number:  3235-0362 Expires:  January 31, 2005 Estimated average burden hours per response.........1.0
[   ]		Check this box if no longer subject to Section 16. Form 4 or Form 5 obli- gations may continue. See Instruc- tion 1(b).
[   ]		Form 3 Holdings Reported
[   ]		Form 4 Transactions Reported

1. Name and Address of Reporting Person*           Nesrsta, Paul

2. Issuer Name and Ticker or Trading Symbol Reliability Incorporated (REAL)

6. Relationship of Reporting Person(s) to Issuer                   (Check all applicable)

Director

10% Owner

x

Officer (give title below)

Other (specify below)

Vice President

(Last)                    (First)                (Middle) 2727 West Hedgecroft

3. I.R.S. Identification    Number of Reporting    Person, if an entity    (Voluntary)

4. Statement for Month/Year December 2002

7. Individual or Joint/Group Reporting               (check applicable line)

5. If Amendment, Date of     Original (Month/Year)

x

Form Filed by One Reporting Person

(Street) Seabrook, TX 77586

Form Filed by More than One Reporting Person

(City)                      (State)                  (Zip)

Table I ¾  Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1. Title of Security     (Instr. 3)

2. Trans-     action     Date    (Month/     Day/    Year)

2A. Deemed       Execu-       tion       Date, if       any      (Month/       Day/       Year)

3. Trans-     action     Code     (Instr.8)

4. Securities Acquired (A) or     Disposed of (D)     (Instr. 3, 4 and 5)

5. Amount of     Securities Ben-     eficially Owned     at end of     Issuer's Fiscal     Year     (Instr. 3 and 4)

6. Owner-     ship     Form: Di-     rect (D)     or Indi-     rect (I)     (Instr. 4)

7. Nature of     Indirect     Beneficial     Ownership    (Instr. 4)

Amount

(A) or   (D)

Price

Reliability Incorporated Common Stock

27,000

D

Common Stock

18,287 (1)

I (by 401(k))

(1) includes a net 1,636 shares acquired between January 1, 2002 and December 31, 2002 under the Reliability Incorporated 401(k) Plan

* If the form is filed by more than one reporting person, see instruction 4(b)(v). Persons who respond to the collection of information contained in
this form are not required to respond unless the form displays a
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SEC2270 (9-02)

FORM 5 (continued)

Table II ¾  Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative     Security (Instr. 3)

2. Conver-     sion or     Exercise     Price of     Deriva-     tive Sec-     urity

3. Trans     -action     Date    (Month/     Day/     Year)

3A. Deem       -ed Ex-       ecution       Date, if       any      (Month/        Day/        Year)

4. Trans-     action     Code     (Instr.8)

5. Number of Deriva-     tive Securities Ac-     quired (A) or Dis-     posed of (D)     (Instr. 3, 4 and 5)

6. Date Exercis-     able and Expi-     ration Date     (Month/Day/      Year)

7. Title and Amount of Underly-     ing Securities     (Instr. 3 and 4)

8. Price     of     De-     riva-     tive     Secu-     rity  (Instr. 5)

9. Number    of De-    rivative    Securi-    ties Ben-    eficially    Owned    at End of    Year    (Instr. 4)

10. Owner-       ship of       Deriva-       tive Se-       curity:       Direct       (D) or       Indirect       (I)       (Instr. 4)

11. Nature of      Indirect      Benefi-      cial      Owner-      ship      (Instr. 4)

(A)

(D)

Date   Exer-   cisable

Expira-   tion   Date

Title

Amount or  Number of  Shares

Reliability Inc Option to purchase Common Stock

$13.38

11/13/02

J (1)

800

3/30/99

2/24/08

Common

800

"

$13.38

11/13/02

J(1)

14,200

3/30/99

2/24/08

Common

14,200

"

$3.50

3/1/02

J (2)

3,000

9/1/97

3/1/02

Common

3,000

75,000

D

Explanation of Responses:

(1) Cancellation of options

(2) Expiration of options

		/s/ Paul Nesrsta	February 4, 2003
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations.	**Signature of Reporting Person	Date
	See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).

Note: File three copies of this Form, one of which must be manually signed.
         If space is insufficient, see Instruction 6 for procedure.

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