**UNITED          STATES**

**SECURITIES          AND EXCHANGE COMMISSION**

**FORM          10-K/A**

**Amendment          No. 1**

| [X]    | ANNUAL                      REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE                      ACT OF                      1934 |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |  For                      the period ended                                                                                                      |  December                      31, 2005 |

|                                                    |  OR                                                                                                                                                |
|---------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|
|  [                    ]                            |  TRANSITION                    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                    ACT OF                    1934 |
|                                                    |  For                    the transition period from                                                                                                 |  _____________                    to _____________ |
|  Commission                    file Number 0-12965 |

| **NESTOR,                    INC.**                                                          |
|----------------------------------------------------------------------------------------------|
| (Exact                    name of registrant as specified in its                    charter) |

| DELAWARE                                    |   | 13-3163744                                              |
|---------------------------------------------|--------|---------------------------------------------------------|
| (State                    of incorporation) |   | (I.R.S.                    Employer Identification No.) |

| 42                    Oriental Street; Providence, Rhode Island | 02908                       |
|-----------------------------------------------------------------|-----------------------------|
| (Address                    of principal executive offices)     | Zip                    Code |

| (401)                    274-5658                                                                |
|--------------------------------------------------------------------------------------------------|
| (Registrant’s                    Telephone Number, Including Area                    Code) |

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

| Securities                    registered pursuant to Section 12(g) of the Act: |
|--------------------------------------------------------------------------------|
|                                                                           | Common                    Stock, $.01 Par Value(Title                    of Class) |

| Indicated                    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 than                    the                    Registrant was required to file such reports), and (2) has been                    subject to                    such filing |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| requirements                    for the past 90 days.                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           Yes: |                        X | No: |   |

| Indicate                    by check mark if disclosure of delinquent filers pursuant to                    Item 405 of                    Regulation S-K 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 |   |

| Indicated                      by check mark whether the registrant is a shell company: | Yes: |   | No: | X |
|-----------------------------------------------------------------------------------------|------|--------|-----|---|

| The                    aggregate market value of the 7,471,357 shares of voting stock                    held by                    non-affiliates of the registrant on June 30, 2005, based on the                    closing                    price of such stock on June 30, 2005, was $44,828,142. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  The                  number of shares outstanding of the Registrant’s Common Stock at April 25,                  2006 was 20,365,916.                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                     |
| **DOCUMENTS                    INCORPORATED BY REFERENCE**                                                                                                                                                                                                                                               |
| None                                                                                                                                                                                                                                                                                                     |

----

**PART      III**

**Item      10.**
**Directors      and Executive Officers of the Registrant.**

| Name                                   |   | Age |   | Director/OfficerSince |   | Capacities                in which served                                                                                                                                                 |
|----------------------------------------|--------|-----|--------|-----------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| George                L. Ball          |   | 67  |   | 2003                  |   | Director,                Chairman of the Board                                                                                                                                            |
| Albert                H. Cox, Jr.      |   | 73  |   | 2003                  |   | Director                                                                                                                                                                                  |
| William                B. Danzell      |   | 51  |   | 2003                  |   | Director,                President and Chief Executive Officer                                                                                                                            |
| Terry                E. Fields         |   | 58  |   | 2003                  |   | Director                                                                                                                                                                                  |
| David                N. Jordan         |   | 62  |   | 2003                  |   | Director                                                                                                                                                                                  |
| Nigel                P. Hebborn        |   | 47  |   | 1996                  |   | Executive                Vice President, Treasurer and Chief                Financial Officer of Nestor, Inc. and President of Nestor Traffic                Systems,                Inc. |
| Tadas                (Todd) A. Eikinas |   | 39  |   | 2005                  |   | Chief                Operating Officer                                                                                                                                                    |
| Benjamin                M. Alexander   |   | 46  |   | 2003                  |   | Vice                President, General Counsel and                Secretary                                                                                                               |

**George      L. Ball**

**Albert      H. Cox, Jr. **

**William      B. Danzell**

----

**Terry      E. Fields **

**David      N. Jordan**

**Nigel      P. Hebborn**

**Tadas      (Todd) A. Eikinas**

**Benjamin      M. Alexander**

**Audit      Committee**

**Audit      Committee Financial Expert**

----

**Code      of Ethics**

**Section      16(A) Beneficial Ownership Reporting Compliance**

**Item      11.**
**Executive      Compensation**

**Summary      Compensation Table**

** **
** **

|                                       |                         |                                           |                                                                          |                                        | Long-Term                Compensation Awards |
|--------------------------------------------|------------------------------|------------------------------------------------|-------------------------------------------------------------------------------|---------------------------------------------|----------------------------------------------|
| Name                and Principal Position | Calendar                Year | Salary                ($)                      | Bonus                ($)                                                      | Other                Annual Compensation(1) | Restricted                Stock Awards       | Options/                SARs | Payout | All                Other Comp ($) |
|                                       |                         |                                           |                                                                          |                                        |                                         |   |   |   |
| William                B. Danzell(2)       | 2005                         |                   302,500            |                       101                       | 78                                          | 0                                            |                                   0 | 0 | 0 |
| President                and CEO           | 2004                         |                   272,500            |                           0 | 235                                         | 0                                            |                        632,100 | 0 | 0 |
|                                       | 2003                         |                   177,083            |                       500                       | 115                                         | 0                                            |                                   0 | 0 | 0 |
|                                       |                         |                                           |                                                                          |                                        |                                         |   |   |   |
| Nigel                P. Hebborn            | 2005                         |                   200,000            |                       101                       | 78                                          | 0                                            |                                   0 | 0 | 0 |
| EVP,                Treasurer and CFO      | 2004                         |                   183,333            |                           0 | 153                                         | 0                                            |                        602,100 | 0 | 0 |
| of                Nestor, Inc. and         | 2003                         |                   180,000            |                    1,400                                       | 153                                         | 0                                            |                                   0 | 0 | 0 |
| President                of Nestor Traffic |                         |                                           |                                                                          |                                        |                                         |   |   |   |
| Systems,                Inc.               |                         |                                           |                                                                          |                                        |                                         |   |   |   |
|                                       |                         |                                           |                                                                          |                                        |                                         |   |   |   |
| Tadas                A. Eikinas(3)         | 2005                         |                   161,939            |   25,101                                                            | 78                                          | 0                                            |                          30,000 | 0 | 0 |
| Chief                Operating Officer     | 2004                         |                     36,459 |                           0 | 27                                          | 0                                            |                          50,000 | 0 | 0 |
|                                       |                         |                                           |                                                                          |                                        |                                         |   |   |   |
| Benjamin                M. Alexander(4)    | 2005                         |                   131,369            |                       110                       | 78                                          | 0                                            |                        135,000 | 0 | 0 |
| Vice                President, General     |                         |                                           |                                                                          |                                        |                                         |   |   |   |
| Counsel                and Secretary       |                         |                                           |                                                                          |                                        |                                         |   |   |   |
|                                       |                         |                                           |                                                                          |                                        |                                         |   |   |   |

----

**Option/SAR      Grants in Last Fiscal Year**

**These      rates of stock price appreciation are not the Company’s estimate or projection      of future stock prices. **

| Individual                Grants in Last Fiscal Year | Potential                Realizable Value At Assumed Annual Rates of Stock Price Appreciation                for                Option Term(1) |
|------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------|
| Name                                                 | Number                of Securities Underlying Options/SARs Granted(2)                                                                         | %                of Total Options/SARs Granted to Employees in Fiscal Year | Exercise                or Base Price ($/Share) | Expiration                Date | 5%                ($) | 10%($) |
|                                                 |                                                                                                                                           |   |   |   |   |   |
| Tadas                A. Eikinas                      |                                  30,000                   |                                      6.3% | 5.95 | 03/29/2013 |                               85,226 |                           204,131 |
|                                                 |                                                                                                                                           |   |   |   |   |   |
| Benjamin                M. Alexander                 |                                135,000                              |                                    28.4% | 5.95 | 03/29/2013 |                             383,516 |                           918,588 |
|                                                 |                                                                                                                                           |   |   |   |   |   |

| (1)  | The                  potential realizable value of a stock option is the product of                  (a) the                  difference between (i) the product of the per-share market price                  at the                  time of grant and the sum of one plus the assumed rate of appreciation                  compounded annually over the term of the stock option and (ii)                  the                  per-share exercise price of the stock option and (b) the number                  of                  securities underlying the stock options at the end of fiscal                  2005. |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)  | Vesting                  of the options granted under the 2004 Stock Option Plan occurs                  on an                  annual pro rata basis over the term of two to five years from the                  date of                  grant.                                                                                                                                                                                                                                                                                                                                                                            |

**Aggregated      Option Exercises in Last Fiscal Year and Fiscal Year-End Option      Values**

| Name                                 | Shares                Acquired on Exercise | Value                Realized ($)(1) | Number                of Securities Underlying Unexercised Options/SARs at Fiscal Year-End                Exercisable (E) and Unexercisable (U) | Value                of Unexercised In-the-Money Options/ SARs at Fiscal Year-End ($)                Exercisable (E) and Unexercisable (U)(2) |
|--------------------------------------|--------------------------------------------|--------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|
|                                 |                                       |                                 |                                                                                                                                            |                                                                                                                                          |   |
| William                B. Danzell    | 0                                          | 0                                    | 600,700                                                                                                                                         | (E)                                                                                                                                           | 505,568 |
|                                 |                                       |                                 | 401,400                                                                                                                                         | (U)                                                                                                                                           | 339,136 |
|                                 |                                       |                                 |                                                                                                                                            |                                                                                                                                          |   |
| Nigel                P. Hebborn      | 0                                          | 0                                    | 378,048                                                                                                                                         | (E)                                                                                                                                           | 321,959 |
|                                 |                                       |                                 | 243,800                                                                                                                                         | (U)                                                                                                                                           | 214,072 |
|                                 |                                       |                                 |                                                                                                                                            |                                                                                                                                          |   |
| Tadas                Eikinas         | 0                                          | 0                                    | 30,000                                                                                                                                          | (E)                                                                                                                                           | 25,800 |
|                                 |                                       |                                 | 50,000                                                                                                                                          | (U)                                                                                                                                           | 38,700 |
|                                 |                                       |                                 |                                                                                                                                            |                                                                                                                                          |   |
| Benjamin                M. Alexander | 0                                          | 0                                    | 10,000                                                                                                                                          | (E)                                                                                                                                           | 0 |
|                                 |                                       |                                 | 125,000                                                                                                                                         | (U)                                                                                                                                           | 0 |
|                                 |                                       |                                 |                                                                                                                                            |                                                                                                                                          |   |

| (1)  | Value                  realized is calculated based on the difference between the fair                  market                  value of the shares acquired and the prices of the exercised options                  on                  the date of exercise.                                                                                           |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)  | Dollar                  value of unexercised in-the-money options is calculated based on                  the                  difference between the closing price of the Common Stock on NASDAQ                  on                  December 31, 2005 ($5.79 per share) and the exercise prices of                  the options                  held. |

----

**Compensation      of Directors**

**Employment      Agreements**

*Employment      Agreement with William B. Danzell. *

*Employment        Agreement with Nigel P. Hebborn.*

----

*Employment      Agreement with Tadas A. Eikinas. *

*Employment      Agreement with Benjamin M. Alexander. *

----

**Compensation      Committee**
**,      **
**Interlocks      and Insider Participation**

**Item      12.**
**Security      Ownership of Certain Beneficial Owners and Management and Related Stockholder      Matters**

**Securities      Authorized for Issuance Under Equity Compensation Plans at Fiscal      Year-End**

|                                                                        | Number                  of securities to be issued upon exercise of outstanding options,                  warrants                  and rights | Weighted-average                  exercise price of outstanding options, warrants and rights | Number                  of securities remaining available for future issuance under equity                  compensation plans (excluding securities reflected in column                  (a)) |
|-----------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Equity                  compensation plans approved by security holders     | 2,866,027                                                                                                                                      | $                  4.79                                                                      |  1,859,835(1)                                                                                                                                                                             |
| Equity                  compensation plans not approved by security holders |              ---                                                              | ---                                                                                          | ---                                                                                                                                                                                            |
| Total                                                                       | 2,866,027                                                                                                                                      | $                  4.79                                                                      | 1,859,835                                                                                                                                                                                      |

**Security      Ownership of Certain Beneficial      Owners and Management**

| Name                      and Address of Beneficial                      Owner |   | Amount                      and nature ofBeneficial                      Ownership |                         | Percent                      of Class |
|--------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------|------------------------------|---------------------------------------|
| DG                      Capital Management, Inc.                               |   | 2,201,382                                                                          | (1)                          |                                  | 10.5 |
| 260                      Franklin Street; Suite 1600                           |   |                                                                               |                         |                                  |   |
| Boston,                      MA 02110                                          |   |                                                                               |                         |                                  |   |
|                                                                           |   |                                                                               |                         |                                  |   |
| Manu                      P. Daftary                                           |   | 2,201,382                                                                          | (1)                          |                                  | 10.5 |
| c/o                      DG Capital Management, Inc.                           |   |                                                                               |                         |                                  |   |
| 260                      Franklin Street; Suite 1600                           |   |                                                                               |                         |                                  |   |
| Boston,                      MA 02110                                          |   |                                                                               |                         |                                  |   |
|                                                                           |   |                                                                               |                         |                                  |   |
| Silver                      Star Partners I, LLC                               |   | 9,836,430                                                                          | (2)                          |                                  | 45.8 |
| c/o                      William B. Danzell                                    |   |                                                                               |                         |                                  |   |
| The                      Professional Building                                 |   |                                                                               |                         |                                  |   |
| 2                      Corpus Christi; Suite 300                               |   |                                                                               |                         |                                  |   |
| Hilton                      Head Island, SC 29938                              |   |                                                                               |                         |                                  |   |
|                                                                           |   |                                                                               |                         |                                  |   |
| William                      B. Danzell                                        |   | 10,534,320                                                                         | (2)                      (3) |                                  | 50.2 |
| The                      Professional Building                                 |   |                                                                               |                         |                                  |   |
| 2                      Corpus Christi; Suite 300                               |   |                                                                               |                         |                                  |   |
| Hilton                      Head Island, SC 29938                              |   |                                                                               |                         |                                  |   |
|                                                                           |   |                                                                               |                         |                                  |   |

----

| Name                    and Address of Beneficial                    Owner |   | Amount                    and nature ofBeneficial                    Ownership |                       | Percent                    of Class |
|----------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------|----------------------------|-------------------------------------|
| George                    L. Ball                                          |   | 139,250                                                                        | (4)                    (5) |                                | * |
| Sanders                    Morris & Harris Group                       |   |                                                                           |                       |                                |   |
| 600                    Travis, Suite 3100                                  |   |                                                                           |                       |                                |   |
| Houston,                    TX 77002                                       |   |                                                                           |                       |                                |   |
|                                                                       |   |                                                                           |                       |                                |   |
| Albert                    H. Cox, Jr.                                      |   | 34,926                                                                         | (5)                        |                                | * |
| 2002                    Claudette Court                                    |   |                                                                           |                       |                                |   |
| Biloxi,                    MS 39531                                        |   |                                                                           |                       |                                |   |
|                                                                       |   |                                                                           |                       |                                |   |
| Terry                    E. Fields                                         |   | 28,472                                                                         | (5)                        |                                | * |
| Community                    Loans of America                              |   |                                                                           |                       |                                |   |
| 8601                    Dunwoody Place, Suite 406                          |   |                                                                           |                       |                                |   |
| Atlanta,                    GA 30350                                       |   |                                                                           |                       |                                |   |
|                                                                       |   |                                                                           |                       |                                |   |
| David                    N. Jordan                                         |   | 29,365                                                                         | (5)                        |                                | * |
| c/o                    Silver Star Partners I, LLC                         |   |                                                                           |                       |                                |   |
| The                    Professional Building                               |   |                                                                           |                       |                                |   |
| 2                    Corpus Christi; Suite 300                             |   |                                                                           |                       |                                |   |
| Hilton                    Head Island, SC 29938                            |   |                                                                           |                       |                                |   |
|                                                                       |   |                                                                           |                       |                                |   |
| Nigel                    P. Hebborn                                        |   | 379,448                                                                        | (6)                        |                                | 1.8 |
| Nestor,                    Inc.                                            |   |                                                                           |                       |                                |   |
| 42                    Oriental Street                                      |   |                                                                           |                       |                                |   |
| Providence,                    RI 02908                                    |   |                                                                           |                       |                                |   |
|                                                                       |   |                                                                           |                       |                                |   |
| Tadas                    A. Eikinas                                        |   | 30,000                                                                         | (6)                        |                                | * |
| Nestor,                    Inc.                                            |   |                                                                           |                       |                                |   |
| 42                    Oriental Street                                      |   |                                                                           |                       |                                |   |
| Providence,                    RI 02908                                    |   |                                                                           |                       |                                |   |
|                                                                       |   |                                                                           |                       |                                |   |
| Benjamin                    M. Alexander                                   |   | 25,000                                                                         | (6)                        |                                | * |
| Nestor,                    Inc.                                            |   |                                                                           |                       |                                |   |
| 42                    Oriental Street                                      |   |                                                                           |                       |                                |   |
| Providence,                    RI 02908                                    |   |                                                                           |                       |                                |   |
|                                                                       |   |                                                                           |                       |                                |   |
| All                    executive officers and directors                    |   | 11,200,781                                                                     | (7)                        |                                | 52.1 |
| as                    a group (8 persons)                                  |   |                                                                           |                       |                                |   |
|                                                                       |   |                                                                           |                       |                                |   |
| *Less                    than 1%                                           |   |                                                                           |                       |                                |   |

| (1)  | Includes                568,181 shares that may be acquired upon conversion of our 5% Senior                Convertible Notes. DG Capital Management, Inc., in its capacity as                an                investment adviser, has the sole right to vote and dispose of the                shares                of the Company's Common Stock. Manu P. Daftary is the sole shareholder                and                President of DG Capital Management, Inc. DG Capital Management, Inc.                and                Mr. Daftary disclaim beneficial ownership of the Common Stock of                the                Company.                                                                                                                                  |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)  | William                B. Danzell has an 8.3% ownership interest in, and is the Managing                Director                of, Silver Star Partners I, LLC and as such shares with Silver Star                Partners I, LLC the power to vote and dispose of the shares held                by it.                David N. Jordan, a director of the Company, is the president of L-J                Inc.,                which has a 21.3% ownership interest in Silver Star Partners I,                LLC.                                                                                                                                                                                                                                                                |
| (3)  | This                number represents (i) 9,836,430 shares of Common Stock held by Silver                Star                Partners I, LLC; (ii) 85,690 shares of Common Stock owned through                investment management accounts that Mr. Danzell has power of attorney                over; (iii) 8,800 shares of Common Stock held by William B. Danzell,                having the sole power to vote and dispose of such shares; (iv) 601,400                shares of Common Stock, which Mr. Danzell may each acquire upon the                exercise of options and (v) 2,000 shares held by Danzell Investment                Management, Ltd., an investment management firm of which Mr. Danzell                is                the Founder and President. |
| (4)  | Includes                100,000 shares of Common Stock, which are owned by a limited liability                company of which Mr. Ball’s wife is a member, beneficial ownership of                which Mr. Ball disclaims, except                to the extent of his wife's pecuniary interest therein.                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (5)       |  Includes              23,000 shares of Common Stock, which Messrs. Ball, Cox, Fields, and              Jordan              may each acquire upon the exercise of options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (6)  | Includes                378,748, 30,000 and 25,000 shares of Common Stock, respectively,                which                Mr.. Hebborn, Mr. Eikinas and Mr. Alexander, Officers of the Company,                may                acquire upon the exercise of options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| (7)       | This                number includes: (i) 1,127,148 vested options owned or controlled                by                officers and directors of the Company and (ii) all other shares                beneficially owned by the current directors and executive officers                of the                Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

----

**Item      13.**
**Certain      Relationships and Related Transactions**

**Item      14.**
**Principal      Accounting Fees and Services.**

|   |                                  |   | 2005   |    | 2004   |
|--------|---------------------------------------|--------|--------|---------|--------|
|   | Audit                Fees (1):        |   | $      | 139,982 |   | $ | 77,500 |
|   | Audit-Related                Fees(1): |   |   | 51,902  |   |   | 18,544 |
|   | Tax                Fees(2):           |   |   | 24,821  |   |   | 18,400 |
|   | All                Other Fees:        |   |   | ---     |   |   | --- |
|   |                                  |   | $      | 216,705 |   | $ | 114,444 |

| (1) | These                  fees are for the audit of our financial statements for 2005 and                  2004,                  respectively, for quarterly reviews, registration statements and                  accounting consultations related to the audited financial                  statements. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Tax                  fees consisted of tax compliance paid to CCR in 2005 and                  2004.                                                                                                                                                                                                    |

*Pre-Approval      of Audit and Non-Audit Services *

----

**SIGNATURE**

|   |                                                 | **NESTOR,                INC.** |
|--------|------------------------------------------------------|---------------------------------|
|   | (Registrant)                                         |
|   |                                                 |
|   | /s/                William B. Danzell                |
|   | William                B. Danzell, President and CEO |
|   |                                                 |
|   |                                                 |
| Date:  | April                28, 2006                        |                            |
|   |                                                 |

----