SecProbe.io

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Mail Stop 0306

	October 28, 2004

Via U.S. Mail and Fax

Mr. Joel D. Knudson
Vice President, Finance and Secretary
Criticare Systems, Inc.
20925 Crossroads Circle, Suite 100
Waukesha, WI 53186

	Re:	Criticare Systems, Inc.
		Form 10-K for the year ended June 30, 2004
Filed September 28, 2004
File No. 001-31943

Dear Mr. Knudson:

We have reviewed your filings and have the following comments.  We
have limited our review to only your financial statements and related
disclosures and will make no further review of your documents.  Where
indicated, we think you should revise your documents in response to
these comments.  If you disagree, we will consider your explanation as
to why our comment is inapplicable or a revision is unnecessary.
Please be as detailed as necessary in your explanation.  In some of
our comments, we may ask you to provide us with supplemental
information so we may better understand your disclosure.  After
reviewing this information, we may or may not raise additional
comments.

	Please understand that the purpose of our review process is to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.  We
look forward to working with you in these respects.  We welcome any
questions you may have about our comments or on any other aspect of
our review.  Feel free to call us at the telephone numbers listed at
the end of this letter.

Form 10-K for the Fiscal Year ended December 31, 2002

Management Discussion and Analysis-Page 15

1. In future filings, disclose more details of the $1.752 million
charges for obsolete inventory, including the amount of inventory that
was still in stock at the end of fiscal 2003 and the plans for the
sale or disposition of this inventory. The impact of any future sales
of inventory written-down on gross margin should also be addressed in
future filings.

Financial Statements

Note 1. Summary of Significant Accounting Policies
Accounts Receivable and Allowance for Doubtful Accounts - Page 25

2. We note that your allowance for doubtful accounts includes a
general reserve.  In future filings disclose the amount of the general
reserve, how it is determined and the basis for this reserve.

Revenue Recognition - Page 27

3. We note from page 5 that you provide 24-hour customer service and
training to dealers and end-users.  In future filings provide details
of whether your revenue arrangements have multiple deliverables and
the impact of EITF 00-21. In addition, clarify whether there are any
post-shipment obligations, other than installation, or rights of
return and how these impact revenue recognition.

Note 8. Stockholders` Equity
Stock Warrants - Page 35

4. In future filings please disclose the amount of expense recognized
upon the extension of the term of the 30,000 warrants.

5. We note that the warrants issued in December 2000 vest over four
years and any unvested warrants terminate at the time the consultant
ceases to provide consulting services.  In future filings please
disclose the amount of consulting expense that was incurred for each
year that a statement of operations is presented and indicate your
accounting for these warrants.

*    *    *    *

As appropriate, please respond to these comments within 10 business
days or tell us when you will provide us with a response.  Please
furnish a cover letter with your amendment that keys your responses to
our comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review.  Please file
your cover letter on EDGAR.  When sending supplemental information
regarding this filing, please include the following ZIP+4 code in our
address: 20549-0306.  Please understand that we may have additional
comments after reviewing your responses to our comments.

We urge all persons who are responsible for the accuracy and adequacy
of the disclosure in the filings reviewed by the staff to be certain
that they have provided all information investors require for an
informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have
made.

	In connection with responding to our comments, please provide, in
writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosures in response to staff
comments in the filings reviewed by the staff do not foreclose the
Commission from taking any action with respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the federal
securities laws of the United States.

	In addition, please be advised that the Division of Enforcement
has access to all information you provide to the staff of the Division
of Corporation Finance in connection with our review of your filing or
in response to our comments on your filing.

You may contact Lynn Dicker, Staff Accountant, at (202) 824-5264 or me
at (202) 942-1791 if you have questions regarding comments on the
financial statements and related matters.  In this regard, do not
hesitate to contact Martin James, the Senior Assistant Chief
Accountant, at (202) 942-1984.

							Sincerely,

							Brian Cascio
							Accounting Branch Chief
Mr. Joel D. Knudson
Criticare Systems, Inc.
October 27, 2004
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