SecProbe.io

Mail Stop 6010      March 29, 2007

Mr. Stanton E. Ross
Chairman and Chief Executive Officer
Digital Ally, Inc.
4831 W. 136th Street, Suite 300
Leawood, Kansas 66224

 Re: Digital Ally, Inc.
  Registration Statement on Form SB-2
  Amendment no. 2 filed March 16, 2007
  File No. 333-138025

Dear Mr. Ross:

 We have reviewed your filing and have th e 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 commen t 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 bette r 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 ove rall disclosure in your filing.
We look forward to working with you in these re spects.  We welcome any questions you may have
about our comments or any other aspect of our re view.  Feel free to call us at the telephone
numbers listed at the end of this letter.

FORM SB-2

General
1.  We note your reference to th e filing of a confidential treatm ent request.  Comments on your
application for confidential treatment will be provided  in a separate letter when they are available.
Please note that we will not be a position to cons ider a request for acceleration of effectiveness of
the registration statement until we resolve all issues relating to your confidential treatment request.

Mr. Stanton E. Ross
Digital Ally, Inc.
March 29, 2007
Page 2

Cover page
2.  We note your response to comment 1 and reissu e the comment.  Please state the fixed price at
which the shares will be sold.  In this regard, we  note the first paragraph st ates the shares will be
sold at prevailing market price or negotiated transactions.  The third paragraph merely states a historical closing bid price.

3.  How will potential investors know when you have  determined that a more active trading market
has developed?  Do you intend to file a post-effective amendment reflecting a change in the offering from a fixed price per shar e to an at the market offering?

“We have a history of operating losses.” – page 3

4.  Please expand the discussion to indicate the amount  of operating losses for each of the past two
fiscal years.

“We are dependent on key personnel.” – page 4

5.  Please expand the discussion to indicate wh ether you have employment agreements with
Messrs. Ross, McCoy and Haler and the ma terial terms of any such agreements.

Financial Statements

Notes to Financial Statements, page F-5

Note 1.  Nature of Business and Sign ificant Accounting Policies, page F-5

6.  Please clarify your accounting policy for the wa rrants issued in 2006 as part of units sold to
accredited investors and revise your disclosures here, in the Critical Accounting Estimates section of the MD&A and in Note 8 as appropriate.  Incl ude a more detailed description of these warrants
in the financial statements and in the MD&A.  From  the description included in Item 26 it does not
appear that SFAS 150 would be the applicable authoritative literature for these warrants;
instruments within the sc ope of SFAS 150 do not qualify for equity treatment.  Please clarify.  If
you determine that SFAS 150 is not applicable, pl ease provide us an analysis of SFAS 133 and
EITF 00-19 for these warrants.  Please refer to  the Division of Corporation Finance "Current
Accounting and Disclosure Issues" Section II(B) - Classification and Measurement of Warrants and
Embedded Conversion Features (Updated.) You can find this at the following website:
http://www.sec.gov/divisions/corpf in/cfacctdisclosureissues.pdf

Mr. Stanton E. Ross
Digital Ally, Inc.
March 29, 2007
Page 3

7.  Please tell us why the fair value of the stoc k options used in the pro forma information under
SFAS 123 is less than the expense under AP B 25.  Provide us a calculation of both.

Note 8.  Stock Based Comp ensation, pages F-15 – F-21

8.  Please disclose how you allocated the proc eeds between the comm on stock and the common
stock purchase warrants issued as part of the units  placed and disclose the amount allocated to the
warrants.  Quantify and discuss the significant assumptions underlying your allocation.  Please
elaborate on the conditions under which the warrants  issued as part of the units placed may be
redeemed, at whose option, and the medium of payment.

9.  Please refer to your response to comment 17.  Please quantify and descri be the terms of the
performance based awards that we re outstanding at the date of the initial application of SFAS 123
that qualify for the accounting treatment prescribed in APB Opinion 25.  Direct us to the specific paragraphs of the applicable guidance that was us ed as a basis for your accounting in addition to
referring to paragraph 83 of SFAS 123(r.)  Disclose the compensation amount recorded on these
awards in all periods presented.

* * *

General

 As appropriate, please amend your registration statement in response to these comments.
You may wish to provide us with marked copies of  the amendment to exped ite our review.  Please
furnish a cover letter with your amendment that ke ys your responses to ou r comments and provides
any requested information.  Detailed cover letters greatly facilitate our re view.  Please understand
that we may have additional comments after reviewing your amendment and responses to our
comments.

 We urge all persons who are responsible for th e accuracy and adequacy of the disclosure in
the filing to be certain that the filing includes al l information required under  the Securities Act of
1933 and that they have provided all information investors require for an informed investment
decision.  Since the company and its management  are in possession of a ll facts relating to a
company’s disclosure, they are responsible for the accuracy and adequacy of  the disclosures they
have made.

 Notwithstanding our comments, in the even t the company requests acceleration of the
effective date of the pending registration statement,  it should furnish a letter, at the time of such
request, acknowledging that:

Mr. Stanton E. Ross
Digital Ally, Inc
March 29, 2007
Page 4

• should the Commission or the staff, acting pursua nt to delegated authority, declare the filing
effective, it does not foreclose the Commission from  taking any action with respect to the filing;

• the action of the Commission or the staff, acting pursuant to delegated authority, in declaring
the filing effective, does not re lieve the company from its full responsibility for the adequacy
and accuracy of the disclosure in the filing; and

• the company may not assert staff comments and the declaration of effectiveness as a defense in
any proceeding initiated by the Commission or a ny person under the federal securities laws of
the United States.

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

 We will consider a written request for acceleration of the effective date of the registration statement as confirmation of the f act that those requesting accelera tion are aware of their respective
responsibilities under the Securities Act of 1933 and the Securities Exchange Act of 1934 as they
relate to the proposed public offeri ng of the securities sp ecified in the above registration statement.
We will act on the request and, pursuant to delegate d authority, grant acceleration of the effective
date.

We direct your attention to Rules 460 and 461 re garding requesting accele ration of a registration
statement.  Please allow adequate time after the filing of any amen dment for further review before
submitting a request for acceleration.  Please provide this request at least two business days in advance of the requested effective date.

 You may contact Iboyla Igna t at (202) 551-3656 or Mary Ma st at (202) 551-3613 if you
have questions regarding comments on the financial statements and related matters.  Please contact
John Krug at (202) 551-3862, Suzanne Hayes, Branch Chief, at (202) 55 1-3675, or me at (202)
551-3715 with any other questions.

        S i n c e r e l y ,

        J e f f r e y  R i e d l e r
        A s s i s t a n t  D i r e c t o r

cc: Christian J. Hoffmann, III, Esq.