SecProbe.io

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Mail Stop 3561

      September 22, 2005

James E. Minarik
President and Chief Executive Officer
Directed Electronics, Inc.
1 Viper Way
Vista, California 92081

	Re: 	Directed Electronics, Inc.
Registration Statement on Form S-1
      Filed August 24, 2005
		File No. 333-127823

Dear Mr. Minarik:

      We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document 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
information so we may better understand your disclosure.  After
reviewing this information, we may 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.

General
1. We note a number of blank spaces throughout your registration
statement for information that you are not entitled to omit under
Rule 430A, such as the anticipated price range.  Please note that
we
may have additional comments once you have provided this
disclosure.
Therefore, please allow us sufficient time to review your complete
disclosure prior to any distribution of preliminary prospectuses.

Prospectus Summary, page 1
2. The summary is intended to provide a brief overview of the key
aspects of the offering.  Your summary is too long and repeats
much
of the information fully discussed in your business section.
Please
revise to eliminate "Our Industry," "Our Competitive Strengths,"
and
"Our Strategy" sections since this information is more
appropriately
discussed in the complete business section.  The summary is only
intended to provide a brief snapshot of the offering.  See
Instruction to Item 503 (a) of Regulation S-K.
3. Please avoid reliance on defined terms like those in the second
introductory paragraph to your summary.  The meanings of the terms
you use should be clear from context.  If they are, you do not
need
the definitions.  If they are not, you should revise to use terms
that are clear.  Please see Updated Staff Legal Bulletin No. 7
(June
7, 1999) sample comment 5.

Our Business, page 1
4. We note that you disclose net sales information.  Please revise
to
omit, or balance this disclosure with net income for the past two
fiscal years.
5. Please provide support for your statements of leadership.  We
note
the following as just a few examples:

* Your statement that you are the "largest designer and marketer
of
consumer branded vehicle security and convenience systems in the
U.S." and a "leader in the vehicle security and convenience
category," pages 1 and 49;

* Your statement that you "enjoy the #1 market position in vehicle
security and convenience products," pages 3 and 52; and

* Your statement that "James E. Minarik has a 25-year track record
of
building successful organizations in the consumer electronics
industry and is widely recognized for his industry leadership . .
.,"
page 54.

Also, please provide us with the sources of the statistical and
industry information upon which you rely.  We note your reference
to
entities such as the Specialty Equipment Market Association, the
Consumer Electronics Association and the FBI.  Please mark your
support or provide page references in your response to the
sections
you rely upon for each specific statement.  To the extent you are
unable to provide support, please delete the qualitative or
comparative statement.  Revise throughout your prospectus as
necessary.  Tell us whether the information you cite from these
reports is publicly available.  If not, you should obtain
appropriate
consent to cite these reports in your filing.
6. Please disclose how you are a "leader" or the "largest designer
and marketer."  For example, disclose whether you are a leader in
terms of revenues, the number of customers you have, the number of
products sold, or some other measure.  Similarly, we note that in
2004, you sold to approximately 3,400 customers.  Please tell us
how
you are counting these customers, and revise as appropriate. For
example, tell us whether you are counting each major retailer like
Best Buy once, and whether you are counting repeat customers once
in
calculating this total number.

Summary Consolidated Financial and Other Data, page 8
7. Please present historical and pro forma earnings per share in
the
table, in order to provide a more balanced depiction of the pro
forma
effects of the transactions.  Your current disclosure of pro forma
net income provides information only with respect to the increase
in
net income you expect on a pro forma basis.  We believe you should
balance this disclosure by also disclosing the related dilutive
effect on earnings per share of the significant increase in the
number of shares to which the income is attributable on a pro
forma
basis.
8. Please tell us why the As Adjusted shareholders` equity amount
does not reflect the charge that will result from the termination
of
certain management, sale bonus, and equity gain program
arrangements
concurrent with this offering.  Unlike your pro forma results of
operations, where we would expect you to exclude such nonrecurring
items, we generally expect the As Adjusted balance sheet to give
effect to charges that are directly attributable to the
transaction
and factually supportable, even if the items are nonrecurring in
nature.  Please also address this comment with respect to your As
Adjusted shareholders` equity disclosure in your capitalization
table
on page 27.

Risk Factors, page 11
9. Some of your risk factors discuss generic points that could
apply
to any business similar to yours without addressing specifically
what
the risks are to your business and investors.  Revise to clarify
what
the risks are to your business and investors.  For instance, we
note
the risk factors on page 21, "We may seek to raise additional
capital
. . ." and "We must effectively manage our growth . . . ."
10. Please revise your risk factors to eliminate language such as
"we
cannot assure you" or "we can provide no assurance."  For
instance,
we note the risk factor on page 12, "Our pricing and promotional
practices . . ." and on page 21, "We can provide no assurance
regarding our conclusions . . . ."  The real risk is the
circumstances you describe, not your inability to give assurances.

We rely on contract manufacturers, and their failure to maintain
satisfactory delivery schedules..., page 13
11. Please revise to identify your largest supplier on whom you
rely.

We can provide no assurance regarding our conclusions at December
31,
2006 with respect to the effectiveness of our internal control
over
financial reporting, page 21
12. Please revise to omit this risk factor and the one that
follows
since they are repeated on pages 14-15.

Management`s Discussion and Analysis of Financial Condition and
Results of Operations, page 32

Outlook, page 33
13. Discuss the impact of the negative covenants in your senior
secured credit facility which will limits additional indebtedness,
capital expenditures, mergers and consolidations, sales of assets,
dividends, investments and joint ventures, as disclosed on page
85.

Results of Operations, page 35
14. We note that you state in several places that your acquisition
of
Definitive Technology increased net sales.  For each period,
please
revise to clarify how the acquisition resulted in increased sales.

Liquidity and Capital Resources, page 39
15. We note the credit facilities discussion on page 85.  Please
clarify here that you are subject to financial covenants and
specify
whether you are currently in compliance with them.

Business, page 49
16. We note that you state that 13% of recent net sales were
derived
from international sales.  Please identify any countries in which
you
derived a material amount of net sales.

Sales and Marketing, page 62
17. Please describe how your sales force is compensated and
describe
any commissions.
Intellectual Property, page 64
18. Please specify the duration of your material trademarks,
licenses, and patents.

Government Regulation, page 65
19. Please discuss the effect on your business of state laws that
prohibit or restrict the running of a motor vehicle without an
operator and any restrictive noise ordinances, as disclosed on
pages
22-23.

Executive Compensation, page 72
20. Please revise to include compensation information for 2005.

Certain Relationships and Related Party Transactions, page 76
21. Please revise to quantify the historical amounts paid to each
executive under the sale bonus agreements and associate equity
gain
program.  Please describe how the amounts were determined and how
the
termination payments were determined.

Principal Stockholders, page 78
22. Please identify the individuals who have voting or investment
control over the shares held by the nonpublic entities named in
the
table and footnotes.  See Interpretation I.60 of Telephone
Interpretation Manual (July 1997) and Interpretation 4S of
Regulation
S-K section of March 1999 Supplement to Manual.
23. Tell us which selling stockholders, if any, are broker-
dealers,
and identify them as underwriters.
24. We note that in footnote 6 you identify HVB U.S. Finance, Inc.
as
an affiliate of a broker-dealer.  For each selling stockholder
that
is an affiliate of a broker-dealer, disclose if true that:

* The selling stockholder purchased the shares in the ordinary
course
of business, and

* At the time of the purchase of the securities to be resold, the
seller had no agreements or understandings, directly or
indirectly,
with any person to distribute them.
Description of Capital Stock, page 80
25. Please discuss your Class A and Class B common stock and
describe
the terms of conversion in connection with this offering.  Please
also describe any warrants.
26. Please include the number of holders.  Refer to Item 201(b) of
Regulation S-K.

Description of Indebtedness, page 85
27. Specify the amount of debt outstanding on the credit facility.
In addition, please identify the lenders.  Similarly, identify the
lender under the subordinated notes.
28. Please describe your convertible notes.

Underwriting, page 94
29. We note that you have agreed with the underwriters, subject to
certain exceptions, not to dispose of or hedge any of the common
stock or securities convertible into or exchangeable for shares of
common stock for a duration of time after the date of the
prospectus.
Please briefly identify the "certain exceptions."
30. Identify any members of the underwriting syndicate that will
engage in any electronic offer, sale, or distribution of the
shares
and describe their procedures to us supplementally.  If you become
aware of any members of the underwriting syndicate that may engage
in
electronic offers, sales or distributions after you respond to
this
comment, promptly supplement your response to identify those
members
and provide us with a description of their procedures.  Briefly
describe any electronic distribution in the filing.
In your discussion of the procedures, tell us how they ensure that
the distribution complies with Section 5 of the Securities Act.
In
particular, address:

* the communication used;
* the availability of the preliminary prospectus;
* the manner of conducting the distribution and sale, such as the
use
of indications of  interest or conditional offers; and
* the funding of an account and payment of the purchase price.

Finally, tell us whether you or the underwriters have any
arrangements with a third party to host or access your preliminary
prospectus on the Internet.  If so, identify the party and the
website, describe the material terms of your agreement and provide
us
with a copy of any written agreement.  Provide us also with copies
of
all information concerning your company or prospectus that has
appeared on their website.  Again, if you subsequently enter into
any
such arrangements, promptly supplement your response.  We may have
further comment.
31. Regarding the reserved share program:

* Tell us about the nature and timing of any discussions or
arrangements you have had regarding the reserved shares with any
parties for whom the underwriters will reserve shares.
* How will potential participants be notified of the offering?
* How did you determine the number of shares to reserve?
* Tell us the procedures that will be followed to implement the
reserved share program.  Are directed share purchasers required to
establish accounts before the effective time, and, if so, what if
any
funds are put in newly established brokerage accounts before the
effective date?  How do the procedures for the directed share
program
differ from the procedures for the general offering to the public?
* Supplementally provide a copy of all written material used in
connection with the reserved share program and analyze how that
material is consistent with Rule 134.

Financial Statements, page F-1

General
32. Please either revise to include Schedule II or tell us why you
believe this schedule may be omitted.   We would expect your
allowance for sales returns to be reported on this schedule, if it
is
material.  Alternatively, you may include this information in the
notes to your financial statements.  Refer to Rules 5-04(c) and
12-09
of Regulation S-X.

Note 1. The Company and Business Activities, page F-7
33. As a portion of your $109.4 million distribution was paid to
warrant holders, it appears your outstanding warrants may be
participating securities as defined in paragraph 60.a of SFAS 128.
Thus, please tell us how you considered outstanding warrants that
participate in dividends with common stock in calculating basic
earnings per share.  Refer to paragraphs 60 and 61 of SFAS 128, as
applicable.

Note 3.  Summary of Significant Accounting Policies, page F-11
Revenue Recognition, page F-12
34. Based on your disclosures in the second paragraph under this
subheading, it appears that the terms of your sales arrangements
with
resellers may provide resellers the right to return unsold
products
to you.  Please revise your disclosures to clarify the nature and
extent of these types of return arrangements with your customers.
Also ensure your disclosure is clear in terms of why revenue
recognition is appropriate upon delivery to the reseller, rather
than
upon sell-through to third parties, in cases where you allow
resellers to return unsold products to you.  Refer to Question 2
of
SAB Topic 13:A and paragraph 6 of SFAS 48 for guidance.
Business Segment Disclosures, page F-16
35. Please tell us in detail how you determined that you have only
one SFAS 131 reportable segment.  In this regard, based on your
disclosures under the Business section and in MD&A, it appears to
us
that each of your five main product lines, security and
convenience,
home audio, car audio, mobile video, and satellite radio may
represent separate operating segments, as that term is discussed
in
paragraphs 10-15 of SFAS 131.  In particular, it appears that you
manage your business along these product lines and that you track
and
manage your operating results on this same basis.  If you have
determined otherwise, please advise us as to how you made this
determination and tell us your basis for aggregating the operating
segments.  Your response should address how the various operating
segments meet each of the aggregation criteria included in
paragraph
17 of SFAS 131, including the similarity of economic
characteristics.
As far as demonstrating the similarity of eco