UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K/A
                                 AMENDMENT NO. 2

                                  ANNUAL REPORT
                       PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2006       Commission file number 0-29798
                 ----------------------------------------------

                              COMPUDYNE CORPORATION

                              A NEVADA CORPORATION
                  I.R.S. EMPLOYER IDENTIFICATION NO. 23-1408659

                            2530 RIVA ROAD, SUITE 201
                            ANNAPOLIS, MARYLAND 21401
                             TELEPHONE: 410-224-4415

    Securities registered pursuant to Section 12(b) of the Exchange Act: NONE


 Securities registered pursuant to Section 12(g) of the Exchange Act:
                          Common Stock $.75 par value

  Indicate by check mark if the registrant is a well-known seasoned issuer, as
                   defined in Rule 405 of the Securities Act.
                           Yes []                NO [X]

    Indicate by check mark if the registrant is not required to file reports
               pursuant to Section 13 or Section 15(d) of the Act.
                           Yes []                NO [X]

Indicate by check mark whether the registrant (1) has filed all reports required
    to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
 during the preceding 12 months (or for such shorter period that the registrant
   was required to file such reports), and (2) has been subject to such filing
                              requirements for the
                                  past 90 days.
                           Yes []                NO [X]

 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
  will not be contained, to the best of registrant's knowledge, in definitive
 proxy or information statements incorporated by reference in Part III of this
                                Form 10-K or any
                        amendment to this Form 10-K. [ ]

                       Indicate by check mark whether the
                        registrant is a large accelerated
                        filer, an accelerated filer, or a
                           non-accelerated filer. See
                        definition of "accelerated filer
                         and large accelerated filer" in
                         Rule 12b-2 of the Exchange Act.
                                  (Check one):
       Large accelerated filer [] Accelerated filer [] Non-accelerated filer [X]


     Indicate by checkmark whether the registrant is a shell company (as defined
                   in Rule 12b-2 of the Exchange Act)
                            Yes []              NO [X]


    The aggregate market value of common equity held by non-affiliates of the
     Registrant, based upon the price the common equity was last sold on the
    Nasdaq National Market on June 30, 2006 was approximately $42.0 million.
     (See Item 5) As of April 4, 2007, a total of 8,437,915 shares of Common
                           Stock, $.75 par value, were
                                  outstanding.

      Documents incorporated by reference: Portions of the Proxy Statement
relating to the 2007 Annual Meeting of Shareholders are incorporated in Part III
           of the Annual Report on Form 10-K filed on April 11, 2007.

<PAGE>

                                EXPLANATORY NOTE

CompuDyne Corporation (the "Company") is filing this Amendment No. 2 on Form 10
K/A ("Amendment No. 2") to its Annual Report on Form 10-K for the year ended
December 31, 2006, which was filed with the Securities and Exchange Commission
(the "Commission") on April 11, 2007 (the "Annual Report"), as amended by
Amendment No. 1 on Form 10-K/A filed with the Commission on May 14, 2007 to (i)
amend and restate Item 15 to include certain amendments to the Company's
Articles of Incorporation and By-Laws (exhibits 3(A)(3), 3(A)(4), 3(B)(2) and
3(B)(3)), which were previously filed with the Commission, and the Company's
Employee Stock Purchase Plan (exhibit 10(O)), and to make other minor revisions
to Item 15, and (ii) to include the signature page for the Annual Report with
conformed signatures for all of the signatories. The Company unintentionally
omitted the above identified exhibits and the conformed signatures for the
members of its Board of Directors in the Annual Report filed via EDGAR on April
11, 2007. In order to preserve the nature and character of the disclosures as
originally filed, except to make the revisions described above, no attempt has
been made in this Amendment No. 2 to modify or update disclosures as presented
in the Company's Annual Report for events that occurred subsequent to its
original filing on April 11, 2007. Accordingly, this Amendment No. 2 should be
read in conjunction with the Company's subsequent filings with the Commission.
Unaffected items have not been repeated in this Amendment No. 2.

ITEM 15. INDEX TO EXHIBITS

                              COMPUDYNE CORPORATION
                                INDEX TO EXHIBITS
                                  (Item 15(b))

2(A)          Agreement and Plan of Merger dated May 8, 1996,  herein
              incorporated by reference to Exhibit 3(B) to  Registrant's  10-K
              filed April 3, 1997.

3(A)(1)       Articles of Incorporation of CompuDyne Corporation, filed with the
              Secretary of State of the State of Nevada on May 8, 1996, herein
              incorporated by reference to Registrant's Proxy Statement dated
              May 13, 1996 for its 1996 Annual Meeting of Shareholders.

3(A)(2)       Amendment to the Articles of Incorporation of CompuDyne
              Corporation increasing the number of authorized common shares,
              filed with the Secretary of State of the State of Nevada on
              February 16, 2001, herein incorporated by reference to Exhibit
              3(B) to the Registrant's 10-K filed March 28, 2001.

3(A)(3)       Description of Terms of Preference Stock entitled Series E
              Preferred Stock, filed with the Secretary of State of the State of
              Nevada on May 2, 2002, herein incorporated by reference to Exhibit
              4 to the Registrant's Registration Statement on Form S-4 filed
              March 25, 2002.

3(A)(4)       Amendment to the Articles of Incorporation of CompuDyne
              Corporation increasing the number of authorized shares of capital
              stock, filed with the Secretary of State of the State of Nevada on
              November 8, 2004, herein incorporated by reference to the
              Registrant's Proxy Statement dated April 29, 2004 for its 2004
              Annual Meeting of Shareholders.

3(B)(1)       By-Laws of CompuDyne Corporation, as amended by the First
              Amendment to the By-Laws of CompuDyne Corporation dated January
              28, 1997 and the Second Amendment to the By-Laws of CompuDyne
              Corporation dated October 16, 2001, herein incorporated by
              reference to Exhibit 3(ii) to the Registrant's Quarterly Report on
              Form 10-Q filed November 14, 2001.

3(B)(2)       Amendment to the By-Laws of CompuDyne Corporation dated April 14,
              2004, herein incorporated by reference to Exhibit 10.1 to the
              Registrant's Quarterly Report on Form 10-Q filed May 7, 2004.

3(B)(3)       Amendment to the By-Laws of CompuDyne Corporation dated June 30,
              2004, herein incorporated by reference to Exhibit 3.2 to the
              Registrant's Quarterly Report on Form 10-Q filed July 30, 2004.

4(A)          CompuDyne Corporation to Wachovia Bank of Delaware, National
              Association as Trustee Indenture dated January 15, 2004, filed as
              Exhibit 4.1 to Form 10-Q filed on May 1, 2006.

4(B)          Specimen Note included as Exhibit A to Exhibit 4.1 of Form 10-Q
              filed on May 1, 2006.

10(A)(1)#     Amended and Restated CompuDyne Corporation 1996 Stock Incentive
              Compensation Plan for Employees, herein incorporated by reference
              to Registrant's Proxy Statement dated April 27, 2004 for its 2004
              Annual Meeting of Shareholders.

<PAGE>

10(A)(2)#     Amendment 2005-1 to the Amended and Restated CompuDyne Corporation
              1996 Stock Incentive Compensation Plan for Employees, herein
              incorporated by reference to Registrant's Proxy Statement dated
              April 29, 2005 for its 2005 Annual Meeting of Shareholders.

10(B)         Credit Agreement dated November 16, 2001 by and among CompuDyne
              Corporation, its subsidiaries, certain participating lenders and
              PNC Bank, National Association in its capacity as agent for the
              lenders, herein incorporated by reference to Exhibit 10 (b) to
              Registrant's 8-K filed November 21, 2001.

10(C)(1)      Amended and Restated Credit Agreement dated March 31, 2004
              by and among CompuDyne Corporation and its subsidiaries, certain
              participating lenders and PNC Bank, National Association, in its
              capacity as agent for the lenders, herein incorporated by
              reference to Exhibit 3.1 to Registrant's 10-Q filed May 7, 2004.

10(C)(2)      Amendment to Amended and Restated Credit Agreement dated October
              29, 2004 by and among CompuDyne Corporation, its subsidiaries,
              certain participating lenders and PNC Bank, National Association
              in its capacity as agent for the lenders, herein incorporated by
              reference to Exhibit 10.1 to Registrant's 8-K filed on November 1,
              2004.

10(C)(3)      Second Amendment to Amended and Restated Credit Agreement and
              Amendment to Securities Pledge Agreement dated March 4, 2005 by
              and among CompuDyne Corporation, its subsidiaries, certain
              participating lenders and PNC Bank, National Association in its
              capacity as agent for the lenders, herein incorporated by
              reference to Exhibit 10.1 to registrant's 8-K filed on March 7,
              2005.

10(C)(4)      Third Amendment to Amended and Restated Credit Agreement dated
              November 17, 2005 by and among CompuDyne Corporation and PNC Bank,
              National Association, and Sixth Amended and Restated Revolving
              Note dated November 17, 2005, herein incorporated by reference to
              Exhibits 10.1 and 10.2 to Registrant's 8-K filed on November 21,
              2005.

10(C)(5)      Second Amended and Restated Revolving Credit and Security
              Agreement dated December 19, 2005 by and among CompuDyne
              Corporation, its subsidiaries and PNC Bank, National Association,
              herein incorporated by reference to Exhibit 10.1 to Registrant's
              8-K filed on December 19, 2005.

10(D)(1)#     CompuDyne Corporation 1996 Stock Option Plan for Non-Employee
              Directors, as amended, herein incorporated by reference to
              Registrant's Proxy Statement dated April 30, 2003 for its 2003
              Annual Meeting of Shareholders.

10(D)(2)#     Amendment 2005-1 to the CompuDyne Corporation 1996 Stock Option
              Plan for Non-Employee Directors, herein incorporated by reference
              to Registrant's Proxy Statement dated April 29, 2005 for its 2005
              Annual Meeting of Shareholders.

10(E)#        Non-Qualified Stock Option Agreement dated August 21, 1995 by
              and between Martin A. Roenigk and CompuDyne Corporation, herein
              incorporated by reference to Exhibit 99.3 to Registrant's Form 8-K
              filed September 5, 1995.

10(F)*#       Description of Compensatory Arrangements.

10(G)#        2005 Stock Option Plan for Non-Employee Directors, herein
              incorporated by reference to Registrant's Proxy Statement dated
              April 29, 2005 for its 2005 Annual Meeting of Shareholders.

10(H)#        2005 Stock Incentive Compensation Plan for Employees, herein
              incorporated by reference to Registrant's Proxy Statement dated
              April 29, 2005 for its 2005 Annual Meeting of Shareholders.

10(I)#        CompuDyne Corporation Retention Plan for Selected Employees,
              herein incorporated by reference to Exhibit 10.1 to Registrant's
              8-K filed July 1, 2005.

10(J)         The Joinder Agreement and the First Amendment to the Second
              Amendment and Restated Revolving Credit and Security Agreement
              both dated July 14, 2006 by and among CompuDyne Corporation,
              subsidiaries of the Company as co-borrowers and PNC Bank, National
              Association, herein incorporated by reference to Exhibits 10.1 and
              10.2 to Registrants 8-K filed on July 20, 2006.

10(K)*        The Release and Settlement Agreement between the Company, William
              Blair Mezzanine Capital Fund II, L.P. and  Friedman, Billings,
              Ramsey Group, Inc., initially filed as Exhibit 10.1 to  Form 8-K
              filed November 21, 2006.

<PAGE>

10(L)*        The Second Amendment to the Second Amended and Restated Revolving
              Credit and Security Agreement both dated December 5, 2006 by and
              among CompuDyne Corporation, subsidiaries of the Company as
              co-borrowers and PNC Bank, National Association.

10(M)#        Employment Agreement between CompuDyne Corporation and Mr. Bradley
              Wiggins herein, incorporated by reference to Exhibit 10.1, filed
              on Form 8-K on November 30, 2006.

10(N)         The Third Amendment to the Second Amended and Restated Revolving
              Credit and Security Agreement dated March 28, 2007 by and among
              CompuDyne Corporation, subsidiaries of the Company as co-borrowers
              and PNC Bank, National Association, herein incorporated by
              reference to Exhibit 10.1, filed on Form 8-K on March 30, 2007.

10(O)**       CompuDyne Corporation Employee Stock Purchase Plan.

21*           Subsidiaries of the Registrant.

23.1*         Consent of Independent Registered Public Accounting Firm - Aronson
              & Company.

23.2*         Consent of Independent Registered Public Accounting Firm -
              PricewaterhouseCoopers LLP.

31.1**        Certification by Mr. Martin Roenigk, Chief Executive Officer
              pursuant to Rule 13a-14(a).

31.2          Certification by Mr. Geoffrey F. Feidelberg, Chief Financial
              Officer pursuant to Rule 13a-14(a).

32.1          Certification Pursuant To Section 906 Of The Sarbanes-Oxley Act of
              2002, 18 U.S.C. Section 1350, for Mr. Martin Roenigk, Chief
              Executive Officer.

32.2**        Certification Pursuant To Section 906 Of The Sarbanes-Oxley Act of
              2002, 18 U.S.C. Section 1350, for Mr. Geoffrey F. Feidelberg,
              Chief Financial Officer.

* Filed as an exhibit to the Form 10-K dated April 11, 2007.

** Filed as an exhibit to this Form 10-K/A.

# Compensation plans and arrangements for executives and others.

------------

<PAGE>

     Signatures

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                COMPUDYNE CORPORATION
                                (Registrant)


                                By:    /s/ Martin Roenigk
                                     -------------------------------------------
                                           Martin Roenigk
                                           Chief Executive Officer


                                By:    /s/ Geoffrey F. Feidelberg
                                     -------------------------------------------
                                         Geoffrey F. Feidelberg
Dated:  August 1, 2007                   Chief Financial Officer


         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated on August 1, 2007.


<TABLE>
<CAPTION>
<S>      <C>                          <C>                             <C>                                          <C>



         /s/  Martin A. Roenigk                                             /s/  David W. Clark, Jr.                Director
------------------------------------   Director, Chairman, President   ---------------------------------------
Martin A. Roenigk                      and Chief Executive Officer     David W. Clark, Jr.
                                       (Principle Executive Officer)

         /s/  John H. Gutfreund        Director                            /s/  Ronald J. Angelone                  Director
------------------------------------                                   ---------------------------------------
John H. Gutfreund                                                      Ronald J. Angelone

          /s/  Albert R. Dowden        Director                           /s/  Wade B. Houk                         Director
------------------------------------                                   ------------------------------
Albert R. Dowden                                                       Wade B. Houk

  /s/  Geoffrey F. Feidelberg
----------------------------------     Director, Chief Financial
Geoffrey F. Feidelberg                 Officer and Treasurer
                                       (principle Financial and
                                       Accounting Officer)

</TABLE>

<PAGE>

                                   Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this amendment to its Annual Report
on Form 10-K to be signed on its behalf by the undersigned, thereunto duly
authorized on August 1, 2007.

                                       COMPUDYNE CORPORATION

                                  By:            /s/ Martin Roenigk
                                            ------------------------------------
                                                 Chief Executive Officer