SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549


                                  FORM 10-Q

(Mark One)

/ X  /     Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.

For the quarterly period ended      7/31/06      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                1-8266

                               DATARAM CORPORATION
______________________________________________________________________________
            (Exact name of registrant as specified in its charter)

     New Jersey                              22-1831409
_______________________________         ______________________________________
(State or other jurisdiction of         (I.R.S.  Employer Identification No.)
 incorporation or organization)

     P.O. Box 7528, Princeton, NJ                    08543
______________________________________________________________________________
 (Address of principal executive offices)         (Zip Code)

Registrant's telephone number, including area code: (609) 799-0071


______________________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)

     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. [X] Yes   [ ] No

     Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer or a non-accelerated filer.  See definitions of
"accelerated filer and large accelerated filer" in Rule 12b of the Exchange
Act.  (Check One):

Large accelerated filer [ ]  Accelerated filer [ ]  Non-accelerated filer [X]

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

     Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the last practicable date.  Common Stock ($1.00 par
value):  As of September 8, 2006, there were 8,575,596 shares outstanding.



                           PART I: FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

                        Dataram Corporation and Subsidiaries
                            Consolidated Balance Sheets
                         July 31, 2006 and April 30, 2006
                                     (Unaudited)

                                              July 31, 2006     April 30, 2006
Assets
Current Assets:
   Cash and cash equivalents                  $  12,879,781      $  14,044,398
   Trade receivables, less allowance
     for doubtful accounts and sales returns
     of $300,000                                  4,669,824          4,892,530
   Inventories                                    3,536,780          2,189,009
   Deferred income taxes                          1,440,865          1,364,865
   Note receivable                                1,537,500          1,537,500
   Other current assets                             370,758             80,063
                                                 __________         __________
     Total current assets                        24,435,508         24,108,365

Deferred income taxes                             1,126,000          1,176,000

Property and equipment, at cost:
   Machinery and equipment                       10,712,429         10,640,675
   Leasehold improvements                         2,081,807          2,028,375
                                                 __________         __________
                                                 12,794,236         12,669,050
   Less: accumulated depreciation
     and amortization                            11,933,648         11,822,648
                                                 __________         __________
Net property and equipment                          860,588            846,402

Other assets                                        104,988            104,988
                                                 __________         __________

                                             $   26,527,084      $  26,235,755
                                                 ==========         ==========
Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable                          $    2,813,774      $   2,056,948
   Accrued liabilities                              618,748            652,735
                                                 __________         __________
     Total current liabilities                    3,432,522          2,709,683


Stockholders' Equity:
   Common stock, par value $1.00 per share.
      Authorized 54,000,000 shares; issued and
      outstanding 8,493,396 at July 31, 2006
      and 8,487,396 at April 30, 2006             8,493,396          8,487,396
   Additional paid-in capital                     5,048,045          4,906,207
   Retained earnings                              9,553,121         10,132,469
                                                 __________         __________

        Total stockholders' equity               23,094,562         23,526,072
                                                 __________         __________
                                              $  26,527,084      $  26,235,755
                                                 ==========         ==========

See accompanying notes to consolidated financial statements.



                        Dataram Corporation and Subsidiaries
                        Consolidated Statements of Operations
                      Three Months Ended July 31, 2006 and 2005
                                   (Unaudited)



                                                   2006               2005



Revenues                                     $   9,305,254      $  13,944,150

Costs and expenses:
   Cost of sales                                 6,900,201          9,745,866
   Engineering and development                     306,856            266,490
   Selling, general and administrative           2,441,108          2,492,905
                                                __________         __________
                                                 9,648,165         12,505,261

Earnings (loss) from operations                   (342,911)         1,438,889


Other income (expense)
   Interest income, net                            174,133             65,771
   Currency gain (loss)                             62,033            (40,458)
   Other income                                          0             25,000
                                                __________         __________
Total other income                                 236,166             50,313

Earnings (loss) before income taxes               (106,745)         1,489,202

Income tax expense (benefit)                       (37,000)           558,000
                                                __________         __________
Net earnings (loss)                          $     (69,745)      $    931,202
                                                ==========         ==========

Net earnings (loss) per share of common stock
   Basic                                     $        (.01)       $       .11
                                                ==========         ==========
   Diluted                                   $        (.01)       $       .11
                                                ==========         ==========

Dividends per common share                   $         .06        $       .05
                                                ==========         ==========


See accompanying notes to consolidated financial statements.



                           Dataram Corporation and Subsidiaries
                          Consolidated Statements of Cash Flows
                         Three Months Ended July 31, 2006 and 2005
                                      (Unaudited)

                                                      2006             2005

Cash flows from operating activities:
   Net earnings (loss)                            $  (69,745)     $   931,202
   Adjustments to reconcile net earnings (loss)
     to net cash provided by (used in)
     operating activities:
       Depreciation and amortization                 111,000          210,000
       Bad debt expense                               12,045            5,317
       Stock-based compensation expense              133,963                0
       Deferred income tax expense (benefit)         (26,000)         441,000
       Changes in assets and liabilities:
         Decrease in trade receivables               210,661        1,512,711
        Decrease (increase) in inventories        (1,347,771)          65,456
         Increase in other current assets           (290,695)        (241,948)
         Increase in other assets                          0           (6,316)
         Increase (decrease) in accounts payable     756,826         (898,088)
         Decrease in accrued liabilities             (33,987)        (333,831)
                                                  __________       __________

    Net cash provided by (used in)
         operating activities                       (543,703)       1,685,503
                                                  ___________       __________

Cash flows used in investing activities:
   Additions to property and equipment              (125,186)        (115,960)
                                                  ___________       __________
    Net cash used in investing activities           (125,186)        (115,960)

Cash flows from financing activities:
  Proceeds from sale of common shares under
     stock option plan                                13,875          208,128
     Tax benefit from sale of common
     shares under stock option plan                        0           48,000
   Purchase and subsequent cancellation of
     shares of common stock                                0         (229,859)
   Cash dividends                                   (509,603)        (419,809)
                                                  ___________       __________

   Net cash used in financing activities            (495,728)        (393,540)
                                                  ___________       __________

Net increase (decrease) in cash and
     cash equivalents                             (1,164,617)       1,176,003

Cash and cash equivalents at
   beginning of period                            14,044,398        9,281,520
                                                  __________       __________
Cash and cash equivalents at
   end of period                                $ 12,879,781     $ 10,457,523
                                                  ==========       ==========
Supplemental disclosures of cash flow information:
   Cash paid during the period for:
      Interest                                  $          0     $     13,859
      Income taxes                              $     40,000     $     55,000

See accompanying notes to consolidated financial statements.


                        Dataram Corporation and Subsidiaries
                     Notes to Consolidated Financial Statements
                              July 31, 2006 and 2005
                                     (Unaudited)



(1) Basis of Presentation

The information for the three months ended July 31, 2006 and 2005, is
unaudited but includes all adjustments (consisting only of normal recurring
adjustments) which, in the opinion of management, are necessary to state
fairly the financial information set forth therein in accordance with
accounting principles generally accepted in the United States of America.  The
interim results are not necessarily indicative of results to be expected for
the full fiscal year.  These financial statements should be read in
conjunction with the audited financial statements for the year ended April 30,
2006 included in the Company's 2006 Annual Report on Form 10-K filed with the
Securities and Exchange Commission.


Net Earnings (loss) Per Share

Net earnings (loss) per share is presented in accordance with Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share".  Basic
net earnings per share is computed by dividing the net earnings by the
weighted average number of shares of common stock issued and outstanding
during the period.  For purposes of calculating basic earnings per share for
the three months ended July 31, 2006, the denominator excludes the dilutive
effect of stock options outstanding as their effect would be anti-dilutive.
The calculation of diluted earnings per share for the quarter ended July 31,
2005 includes both the weighted average numbers of shares and the dilutive
effect of stock options outstanding (using the treasury stock method).

The following presents a reconciliation of the numerator and denominator used
in computing Basic and Diluted net earnings (loss) per share for fiscal 2006
and 2005:





                                    Three Months ended July 31, 2006
                                   Earnings      Shares      Per share
                                 (numerator) (denominator)   amount
                                  _________   ___________   _________

Basic net earnings (loss) per share
-net earnings (loss) and weighted
average common shares
outstanding                       $ (69,745)    8,490,347     $ (.01)

Effect of dilutive securities
-stock options                            -             -          -
                                    _______     _________     ______
Basic net earnings (loss) per share
-net earnings (loss) and weighted
average common shares
outstanding                       $ (69,745)    8,490,347     $ (.01)
                                   ========     =========     ======


                                    Three Months ended July 31, 2005
                                   Earnings      Shares      Per share
                                 (numerator) (denominator)   amount
                                  _________   ___________   _________

Basic net earnings per share
-net earnings and weighted
average common shares
outstanding                       $  931,202    8,381,277     $  .11

Effect of dilutive securities
-stock options                            -       373,954          -
                                    _______     _________     ______
Diluted net earnings per share
-net earnings, weighted
average common shares
outstanding and effect of
stock options                     $  931,202    8,755,231     $  .11
                                   =========    =========     ======

Diluted net earnings (loss) per share does not include the effect of options
to purchase shares of common stock for the three months ended July 31, 2006 as
their affect would be anti-dilutive.

Diluted net earnings per share does not include the effect of options to
purchase 455,700 shares of common stock for the three months ended July 31,
2005 because they are anti-dilutive.

Dividends

On May 31, 2005 the Company's Board of Directors approved the initiation of a
common stock quarterly cash dividend program.  Cash dividends, paid in the
three months ended July 31, 2006 were $509,603.  Cash dividends paid in the
three months ended July 31, 2005 were $419,809.

Subsequent Event

Subsequent to July 31, 2006, the Company entered into a Settlement and Release
of Claims with a DRAM manufacturer pursuant to which the Company released all
of its claims against the manufacturer arising from matters in litigation
pursuant to a pending anti-trust class action.  As consideration, the Company
received in its fiscal second quarter $2,300,000 in settlement, which amount
will be recorded as other income in the Company's second quarter ended October
31, 2006.

Common Stock Repurchases

During the three months ended July 31, 2005, the Company repurchased 51,450
shares of common stock at a cost of $229,859 and zero shares were repurchased
in subsequent months ended July 31, 2006.  Shares were purchased pursuant to a
repurchase authorization announced on December 4, 2002 pursuant to which the
Company was authorized to repurchase a total of 500,000 shares of its common
stock.  As of July 31, 2006, 172,196 shares remain available for repurchase
under the plan.  This repurchase program does not have an expiration date.

Stock-Based Compensation

The Company has a 1992 incentive and non-statutory stock option plan for the
purpose of permitting certain key employees to acquire equity in the Company
and to promote the growth and profitability of the Company by attracting and
retaining key employees. In general, the plan allowed granting of up to
2,850,000 shares, adjusted for stock splits, of the Company's common stock at
an option price to be no less than the fair market value of the stock on the
date such options are granted. Under option agreements granted under the plan,
the holder of the option may purchase 20% of the common stock with respect to
which the option has been granted on or after the first anniversary of the
date of the grant and an additional 20% of such shares on or after each of the
four succeeding anniversary dates. No further options may be granted under
this plan.

The Company also has a 2001 incentive and non-statutory stock option plan for
the purpose of permitting certain key employees to acquire equity in the
Company and to promote the growth and profitability of the Company by
attracting and retaining key employees. In general, the plan allows granting
of up to 1,800,000 shares of the Company's common stock at an option price to
be no less than the fair market value of the Company's common stock on the
date such options are granted. Currently, options granted under the plan vest
ratably on the annual anniversary date of the grants. Vesting periods for
options currently granted under the plan range from one to five years.

The Company periodically grants nonqualified stock options to non-employee
directors of the Company. These options are granted for the purpose of
retaining the services of directors who are not employees of the Company and
to provide additional incentive for such directors to work to further the best
interests of the Company and its shareholders. The options granted to these
non-employee directors are exercisable at a price representing the fair value
at the date of grant, and expire either five or ten years after date of grant.
Of each option, 100% are exercisable one year after the date of grant.

New shares of the Company's common stock are issued upon exercise of stock
options.

In December, 2004, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 123 (revised 2004),
"Share-Based Payment" ("SFAS 123R").  SFAS 123R addresses the accounting for
transactions in which an enterprise receives employee services in exchange for
(a) equity instruments of the enterprise or (b) liabilities that are based on
the fair value of the enterprise's equity instruments or that may be settled
by the issuance of such equity instruments.  SFAS 123R supersedes APB No. 25
and requires that such transactions be accounted for using a fair-value-based
method.  SFAS 123R requires companies to recognize an expense for compensation
cost related to share-based payment arrangements, including stock options and
employee stock purchase plans.  The Company implemented SFAS 123R effective
May 1, 2006.

Prior to May 1, 2006, as permitted under SFAS No. 123, "Accounting for Stock-
Based Compensation," ("SFAS 123"), compensation cost for stock options was
recognized using the intrinsic value method described in APB No. 25,
"Accounting for Stock Issued to Employees" ("APB 25").  Effective May 1, 2006,
the Company adopted the fair-value recognition provisions of SFAS No. 123(R),
"Share-Based Payment," ("SFAS 123R") and Securities and Exchange Commission
Staff Accounting Bulletin No. 107.  Under SFAS 123R, the fair value of options
granted is amortized over the related service period.  SFAS 123R was adopted
using the modified prospective transition method; therefore, prior periods
have not been restated.  Compensation expense recognized in the three months
ended July 31, 2006 includes compensation cost for all share-based payments
granted prior to, but not yet vested as of May 1, 2006, based on the grant
date fair value estimated in accordance with the original provisions of SFAS
123.  Compensation cost for any share-based payments granted subsequent to
May 1, 2006 will be based on the grant date fair value estimated in accordance
with the provisions of SFAS 123R.

As a result of adopting SFAS 123R, our earnings before taxes and net earnings
for the three months ended July 31, 2006 are $134,000 and $87,000 lower,
respectively, than if we had continued to account for stock-based compensation
under APB 25.  This resulted in a decrease in our reported basic and diluted
net earnings per share of $.01 and $.01, respectively, for the three months
ended July 31, 2006.  Compensation expense is recognized in the selling,
general and administrative expenses line item of the accompanying consolidated
statements of operations on a ratable basis over the vesting periods.  We
measure the fair value of stock options using the Black-Scholes option pricing
model based upon the market price of the underlying common stock as of the
date of grant, reduced by the present value of estimated future dividends,
using an expected quarterly dividend rate of $0.06 and risk-free interest
rates ranging from 3.0% to 5.0%.  Stock options are amortized over their
applicable vesting period, which generally ranges from one to four years.
These stock option grants have been classified as equity instruments, and as
such, a corresponding increase of $134,000 has been reflected in additional
paid-in capital in the accompanying balance sheet as of July 31, 2006.  There
were no capitalized stock-based compensation costs at April 30, 2006.

Prior to the adoption of SFAS 123R, benefits of tax deductions in excess of
recognized compensation costs were reported as operating cash flows. SFAS 123R
requires excess tax benefits to be reported as a financing cash inflow rather
than as reduction of taxes paid.  The Company had zero and $48,000,
respectively, of excess tax benefits for the three months ended July 31, 2006
and 2005.

A summary of option activity under the plans for the three months ended July
31, 2006
is as follows:

                             Weighted average    Weighted average    Aggregate
                              exercise price   remaining contractual intrinsic
                  Shares                               life             value*
                __________   ________________  _____________________ _________

Balance
April 30, 2006   1,299,375       $4.78                3.65          $  252,000

Granted                 -           -                   -                 -
Exercised           (6,000)      $2.31                  -               16,000
Cancelled           (3,500)      $6.63                  -                 -

Balance
July 31, 2006    1,289,875       $4.95                3.39          $1,344,000

Vested
July 31, 2006    1,045,500       $4.80                2.80          $1,287,000


* These amounts represent the difference between the exercise price and $4.68,
the closing price of Dataram common stock on July 31, 2006 as reported on the
NASDAQ Stock Market, for all in-the-money options outstanding.  For exercised
options, intrinsic value represents the difference between the exercise price
and the closing price of Dataram common stock on the date of exercise.

Total cash received from the exercise of options in the first quarter ended
July 31, 2006 was $14,000.  No options completed vesting during the first
quarter ended July 31, 2006.  As of July 31, 2006, there was $269,000 of total
unrecognized compensation costs related to stock options.  These costs are
expected to be recognized over a weighted average period of 1.29 years.  At
July 31, 2006, an aggregate of 1,255,950 shares were authorized for future
grant under the Company's stock option plans.


The following table illustrates the pro forma effect on net earnings and
earnings per share for the fiscal quarter ended July 31, 2005 as if the
Company had applied the fair value recognition provisions of SFAS 123R to
stock-based compensation:


                                Three Months Ended
                                     July 31,
                                      2005
                                   -----------
Net earnings as reported          $    931,202

Deduct:  Total stock-based
 employee compensation expense
 determined under fair value
 based method for all awards,
 net of related tax effects ....      (171,940)
                                   -----------

Pro forma net earnings....        $    759,262
                                   ===========

Earnings per share:
 Basic - as reported ...........   $      0.11
                                   ===========
 Basic - pro forma .............   $      0.09
                                   ===========

 Diluted - as reported .........   $      0.11
                                   ===========
 Diluted - pro forma ...........   $      0.09
                                   ===========

(2) Cash and cash equivalents

Cash and cash equivalents consist of unrestricted cash, money market funds
and commercial paper with purchased maturities of three months or less when
acquired.

(3) Inventories

Inventories are valued at the lower of cost or market, with costs determined
by the first-in, first-out method.  Inventories at July 31, 2006 and April 30,
2006 consist of the following categories:


                       July 31, 2006    April 30, 2006
                    ________________    ______________
Raw materials       $      2,595,000    $    1,506,000
Work in process              118,000            63,000
Finished goods               824,000           620,000
                    ________________    ______________
                    $      3,537,000    $    2,189,000
                    ================    ==============

(4) Note receivable/Other income

On July 29, 2002, the Company entered into an agreement to sell its
undeveloped land for a price of $3,000,000.  The agreement was amended on
October 20, 2004.  The amendment extended the term of the agreement to
September 29, 2005.  The agreement was further amended on September 29, 2005.
The amendment extended the term of the agreement to March 29, 2006 and the
purchase price was amended to $3,150,000.  The increase in purchase price was
subject to pro rata reduction if a closing occurred prior to March 29, 2006.
On December 29, 2005, this sale closed.  The purchase price was $3,075,000 of
which half, or $1,537,500 was paid in the form of a one-year mortgage, which
accrues interest at 5% per annum.  Of the remainder, $250,000 had been
previously paid as deposits and $1,287,500 was received at closing in cash.
Prior to the closing, the land had been carried at cost on the Company's
balance sheet at a value of $875,000 and was shown as an asset held for sale.


(5) Financial information by geographic location

The Company operates in one business segment and develops, manufactures and
markets a variety of memory systems for use with network servers and
workstations which are manufactured by various companies.  Revenues for the
three months ended July 31, 2006 and 2005 by geographic region are as follows:

                                       Three months ended   Three months ended
                                       July 31, 2006        July 31, 2005
                                       ________________     ________________
United States                          $      6,308,000     $     10,726,000
Europe                                        2,171,000            2,631,000
Other (principally Asia Pacific Region)         826,000              587,000
                                       ________________      ________________
Consolidated                           $      9,305,000     $     13,944,000
                                       ================     ================


Long-lived assets consist of property and equipment. Long-lived assets and
total assets by geographic region as of July 31, 2006 is as follows:

                                     July 31, 2006
                         Long-lived assets     Total assets
                        _________________     ______________
United States           $         966,000     $   26,009,000
Europe                                  0            507,000
Other                                   0             11,000
                        _________________     ______________
Consolidated            $         966,000     $   26,527,000
                        =================     ==============

(6) Significant New Accounting Pronouncements

In November 2004, the FASB issued SFAS No. 151, "Inventory Costs, an amendment
of Accounting Research Bulletin (ARB) No. 43, Chapter 4". SFAS 151, amends ARB
43, Chapter 4, to clarify that abnormal amounts of idle facility expense,
freight, handling costs, and wasted material (spoilage) should be recognized
as current-period charges.  In addition, this statement requires that
allocation of fixed production overheads to the cost of conversion be based on
the normal capacity of the production facilities. The provisions of this
statement are effective for the Company beginning May 1, 2006 and had no
material effect on the Company's consolidated balance sheet as of July 31,
2006, and the related consolidated statements of operations and cash flows for
the period then ended.

(7) Concentration of credit risk

Financial instruments that potentially subject the Company to concentration
of credit risk consist primarily of cash and cash equivalents and trade
receivables.  The Company maintains its cash and cash equivalents in financial
institutions and brokerage accounts.  To the extent that such deposits exceed
the maximum insurance levels, they are uninsured.  In regard to trade
receivables, the Company performs ongoing evaluations of its customers'
financial condition, as well as general economic conditions and, generally,
requires no collateral from its customers.

(8) Use of estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period.  Actual results could differ from
those estimates.




ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


This Management's Discussion and Analysis of Financial Condition and Results
of Operations contains forward looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and section 21E of the
Securities and Exchange Act of 1934, as amended.  The information provided in
this interim report may include forward-looking statements relating to future
events, such as the development of new products, pricing and availability of
raw materials or the future financial performance of the Company.  Actual
results may differ from such projections and are subject to certain risks
including, without limitation, risks arising from: changes in the price of
memory chips, changes in the demand for memory systems for workstations and
servers, increased competition in the memory systems industry, delays in
developing and commercializing new products and other factors described in the
Company's most recent Annual Report on Form 10-K filed with the Securities and
Exchange Commission which can be reviewed at http://www.sec.gov.

Executive Overview

Dataram is a developer, manufacturer and marketer of large capacity memory
products primarily used in high performance network servers and workstations.
The Company provides customized memory solutions for original equipment
manufacturers (OEMs) and compatible memory for leading brands including Dell,
HP, IBM, Silicon Graphics and Sun Microsystems.  The Company also manufactures
a line of memory products for Intel and AMD motherboard based servers.

The Company's memory products are sold worldwide to OEMs, distributors, value-
added resellers and end-users.  The Company has a manufacturing facility in
the United States with sales offices in the United States, Europe and Japan.

The Company is an independent memory manufacturer specializing in high
capacity memory and competes with several other large independent memory
manufacturers as well as the OEMs mentioned above.  The primary raw material
used in producing memory boards is dynamic random access memory (DRAM) chips.
The purchase cost of DRAM chips typically represents approximately 75% of the
total cost of a finished memory board.  Consequently, average selling prices
for computer memory boards are significantly dependent on the pricing and
availability of DRAM chips.

Liquidity and Capital Resources

The Company's cash and working capital position remain strong.  As of July 31,
2006, cash and cash equivalents amounted to $12.9 million and working capital
amounted to $21.0 million, reflecting a current ratio of 7.1, compared to cash
and cash equivalents of $14.0 million and working capital of $21.4 million and
a current ratio of 8.9 as of April 30, 2006.

During the fiscal quarter ended July 31, 2006, net cash used in operating
activities totaled approximately $544,000.  Inventory increased by
approximately $1.3 million, primarily as result of an increase of material
related purchases necessitated by recent changes in the DRAM marketplace.
Currently, DRAMs are not as readily available as they had been in the recent
past.  Other current assets increased by approximately $291,000, primarily as
a result of an increase in prepaid expenses related to annual maintenance
contracts and annual insurance deposits.  The net cash uses were offset by an
increase in account payable of $757,000, non-cash stock-based compensation of
$134,000 and depreciation and amortization expense of $111,000.  Trade
receivables also decreased by approximately $211,000 from year-end levels.

Net cash used in investing activities of approximately $125,000 for the three
months ended July 31, 2006, consists of expenditures for leasehold
improvements and capital expenditures substantially related to the acquisition
of production equipment.

Net cash used in financing activities of approximately $496,000 for the three
months ended July 31, 2006, consists of approximately $510,000 cash dividend
payments, offset by approximately $14,000 of cash received from stock option
exercises.


On June 21, 2004, the Company entered into a credit facility with a bank,
which provides for up to a $5 million revolving credit line.  Advances under
the facility are limited to 75% of eligible receivables, as defined in the
agreement.  The agreement provides for LIBOR rate loans and base rate loans at
an interest rate no higher than the bank's base commercial lending rate.  The
Company is required to pay a commitment fee equal to one quarter of one
percent per annum on the unused commitment.  The agreement contains certain
restrictive covenants, specifically a trailing twelve month profitability
requirement, a current assets to current liabilities ratio, a total
liabilities to tangible net worth ratio and certain other covenants, as
defined in the agreement.  The agreement was amended on April 4, 2005. The
effect of the amendment was to increase the limit of the Company's combined
open market stock repurchases and dividend payments to $2.5 million per year
from $1.0 million per year without prior waiver.  The agreement was scheduled
to expire on June 21, 2006.  On June 20, 2006, the agreement was amended.  The
effect of amendment was to extend the expiration date of the agreement to
August 15, 2008 and remove the eligible accounts receivable limitation on
advances under the facility.  The amendment also modified the total
liabilities to tangible net worth ratio covenant.  The Company is in
compliance with all covenants of the agreement and there have been no
borrowings against the credit line.

Subsequent to the end of the first quarter, the Company entered into a
Settlement and Release of Claims with a DRAM manufacturer pursuant to which
the Company released all of its claims against the manufacturer arising from
matters in litigation pursuant to a pending anti-trust class action.  As
consideration, the Company received in its fiscal second quarter $2,300,000 in
settlement.

Management believes that the Company's existing cash along with cash flows
generated from operations will be sufficient to meet short term liquidity
needs as the Company does not expect any unforeseen demands beyond general
operating requirements for cash.  Management further believes that its working
capital together with internally generated funds from its operations and its
bank line of credit are adequate to finance the Company's long term operating
needs and future capital requirements.

Future minimum lease payments under noncancellable operating leases (with
initial or remaining lease terms in excess of one year) as of April 30, 2006
are as follows:


                                        Operating leases
Year ending April 30:                   ________________

    2007                                 $      417,000

    2008                                        389,000

    2009                                        397,000

    2010                                        404,000

    2011                                        360,000

    Thereafter                                   34,000
                                         ______________

    Total minimum lease payments         $    2,001,000

                                         ==============

The Company has no other material commitments.


Results of Operations

Revenues for the three-month period ended July 31, 2006 were $9,305,000
compared to revenues of $13,944,000 for the comparable prior year period.  The
decrease in revenues is primarily attributable to a decrease in shipments to
one OEM customer.  Last year's fiscal first quarter included revenues of
$3,202,000 from shipments to that customer compared to nil for the comparable
current year period.  The balance of the decrease in revenues from the prior
year's first quarter primarily resulted from a 34% decrease in average selling
prices attributable to a decline in the price of DRAM chips, the primary raw
material used in the Company's products.  Revenues for the three-month periods
ended July 31, 2006 and 2005 by geographic region were:


                                       Three months ended   Three months ended
                                       July 31, 2006        July 31, 2005
                                       ________________     ________________
United States                          $      6,308,000     $     10,726,000
Europe                                        2,171,000            2,631,000
Other (principally Asia Pacific Region)         826,000              587,000
                                       ________________      ________________
Consolidated                           $      9,305,000     $     13,944,000
                                       ================     ================



Cost of sales for the first quarter fiscal 2007 were 74% of revenues, versus
70% for the same prior year period.  Prior year's first quarter's cost of
sales were lower than the Company's historical norm and reflect a higher than
normal shipment rate of larger capacity memory, which typically command higher
margins.  Cost of sales as a percent of revenue will generally be
approximately 75%, which is in line with its historical norm.  Fluctuations
either up or down of 3% or less in any given quarter are not unusual and are
considered normal by management and can result from many factors, some of
which are a rapid change in the price of DRAMs, or a change in product mix
possible resulting from a large order or series of orders for a particular
product or a change in customer mix.

Engineering and development costs in fiscal 2007's first quarter were
$307,000, versus $266,000 for the same prior year period.  The increase is
primarily related to employee related cost.  The Company intends to maintain
its commitment to the timely introduction of new memory products as new
computers are introduced.

Selling, general and administrative costs in fiscal 2007's first quarter
decreased by $52,000 from the comparable prior year period.  Included in the
current fiscal year's first quarter expense is $134,000 of employee based
stock option expense compared to zero in the prior year's first quarter.
Excluding the stock option expense, selling, general and administrative
expenses declined by $186,000 in fiscal 2007's first quarter from the
comparable prior year period.  This reduction is primarily the result of
reduced employee related costs due to natural attrition.

Other income (expense), net for the first quarter fiscal 2007 totaled $236,000
income, versus $50,000 income for the same prior year period. Other income in
fiscal 2007's first quarter consisted primarily of $174,000 of net interest
income received in the current quarter.  Additionally, the current quarter
other income included $62,000 of foreign currency gain, primarily as a result
of the EURO strengthening relative to the US dollar. Fiscal 2006's first
quarter other income, net totalled $50,000 and consisted of approximately
$66,000 of interest income and $25,000 of other income for a scheduled non-
refundable payment released from escrow related to the sale of the Company's
land. Offsetting fiscal 2006's first quarter other income was $40,000 of
foreign currency loss, primarily as a result of the US dollar strengthening
relative to the EURO.

Income tax expense (benefit) for the first quarter of fiscal 2007 was $37,000
benefit compared to $558,000 expense for the same prior year period.  The
Company's effective tax rate for financial reporting purposes in fiscal 2007
is approximately 34.7%.  However, the Company has federal NOL carry-forwards
totaling approximately $4.8 million and therefore will continue to make cash
payments for income taxes at an approximate rate of 6.5% of pretax earnings
until it utilizes all of its NOL carry-forwards.

Critical Accounting Policies

During December 2001, the Securities and Exchange Commission (SEC) published a
Commission Statement in the form of Financial Reporting Release No. 60 which
encouraged that all registrants discuss their most "critical accounting
policies" in management's discussion and analysis of financial condition and
results of operations.  The SEC has defined critical accounting policies as
those that are both important to the portrayal of a company's financial
condition and results, and that require management's most difficult,
subjective or complex judgments, often as a result of the need to make
estimates about the effect of matters that are inherently uncertain.  While
the Company's significant accounting policies are summarized in Note 1 to the
consolidated financial statements included in the Company's Form 10-K for the
fiscal year ended April 30, 2006, the Company believes the following
accounting policies to be critical:

Revenue Recognition - Revenue is recognized when title passes upon shipment of
goods to customers.  The Company's revenue earning activities involve
delivering or producing goods.  The following criteria are met before revenue
is recognized: persuasive evidence of an arrangement exists, shipment has
occurred, selling price is fixed or determinable and collection is reasonably
assured.  The Company does experience a minimal level of sales returns and
allowances for which the Company accrues a reserve at the time of sale in
accordance with SFAS No. 48, "Revenue Recognition When Right of Return
Exists".  Estimated warranty costs are accrued by management upon product
shipment based on an estimate of future warranty claims.

Stock Option Expense - In December 2004, SFAS No. 123 (revised 2004), "Share-
Based Payment"("SFAS 123(R)") was issued.  SFAS 123(R) revises SFAS 123 and
supersedes APB No. 25, "Accounting for Stock Issued to Employees" ("APB 25").
SFAS 123, as originally issued in 1995, established as preferable a fair
value-based method of accounting for share-based payment transactions with
employees.  However, SFAS 123 as amended permitted entities the option of
continuing to apply the intrinsic value method under APB 25 that the Company
had been using, as long as the footnotes to the financial statements disclosed
what net income would have been had the preferable fair value-based method
been used.  SFAS 123(R) requires that the compensation cost relating to all
share-based payment transactions, including employee stock options, be
recognized in the historical financial statements.  That cost is measured
based on the fair value of the equity or liability instrument issued and
amortized over the related service period.  The Company has adopted the
guidance in SFAS 123(R) effective May 1, 2006.  As such, the accompanying
consolidated statement of operations for the three months ended July 31, 2006
includes $134,000 of compensation expense in the stock option expense line
item related to the fair value of options granted to employees and directors
under the Company's stock-based employee compensation plans which is being
amortized over the service period in the financial statements, as required by
SFAS 123(R).  These awards have been classified as equity instruments, and as
such, a corresponding increase of $134,000 has been reflected in additional
paid-in capital in the accompanying balance sheet as of July 31, 2006.


Income Taxes - The Company utilizes the asset and liability method of
accounting for income taxes in accordance with the provisions of SFAS No. 109,
"Accounting for Income Taxes".  Under the asset and liability method of SFAS
No. 109, deferred tax assets and liabilities are recognized for the estimated
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases.  A valuation allowance is provided when it is more
likely than not that some portion or all of the deferred tax assets will not
be realized.  The Company considers certain tax planning strategies in its
assessment as to the recoverability of its tax assets.  Deferred tax assets
and liabilities are measured using enacted tax rates in effect for the year in
which those temporary differences are expected to be recovered or settled.
Under SFAS No. 109, the effect on deferred tax assets and liabilities of a
change in tax rates is recognized in earnings in the period that the tax rate
changes.

Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, including deferred tax asset valuation
allowances and certain other reserves and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period.  Estimates and
assumptions are reviewed periodically and the effects of revisions are
reflected in the consolidated financial statements in the period they are
determined to be necessary.  Some of the more significant estimates made by
management include the allowance for doubtful accounts and sales returns, the
deferred tax asset valuation allowance and other operating allowances and
accruals.  Actual results could differ from those estimates.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company does not invest in market risk sensitive instruments.  The
Company's investments consist of overnight deposits with banks and commercial
paper, which matures within ninety days. The Company's rate of return on its
investment portfolio changes with short-term interest rates, although such
changes will not affect the value of its portfolio.  The Company's objective
in connection with its investment strategy is to maintain the security of its
cash reserves without taking market risk with principal.

The Company purchases and sells primarily in U.S. dollars.  The Company sells
in foreign currency (primarily Euros) to a limited number of customers and as
such incurs some foreign currency risk.  At any given time, approximately 5 to
10 percent of the Company's accounts receivable are denominated in currencies
other than U.S. dollars.  At present, the Company does not purchase forward
contracts as hedging instruments, but could do so as circumstances warrant.


ITEM 4. CONTROLS AND PROCEDURES.

Dataram's management acting under the supervision of the Audit Committee is
responsible for establishing and maintaining adequate internal controls and
procedures to permit accurate financial reporting.  Under the supervision and
with the participation of our management, including the Chief Executive
Officer and Chief Financial Officer, we have evaluated the effectiveness of
our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e)
as of the end of the period covered by this report.  Based on that evaluation,
the Chief Executive Officer and Chief Financial Officer have concluded that
these disclosure controls and procedures are effective.  There were no changes
in our internal control over financial reporting during the quarter ended July
31, 2006 that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.







                              PART II: OTHER INFORMATION


Item 1.  LEGAL PROCEDINGS.

     None.


Item 1A.  RISK FACTORS.

     No changes from Annual Report on Form 10-K.


Item 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

     No reportable event.


Item 3.  DEFAULTS UPON SENIOR SECURITIES.

     No reportable event.


Item 4.  SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS.

     No reportable event.


Item 5.  OTHER INFORMATION.

     No reportable event.


Item 6.  EXHIBITS.

Exhibit No.   Description
__________    ___________


     31(a)    Rule 13a-14(a) Certification of Robert V. Tarantino.

     31(b)    Rule 13a-14(a) Certification of Mark E. Maddocks.

     32(a)    Section 1350 Certification of Robert V. Tarantino (furnished not
              filed).

     32(b)    Section 1350 Certification of Mark E. Maddocks (furnished not
              filed).







Signatures

     Pursuant to the requirements 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.



                                    DATARAM CORPORATION



                                    MARK E. MADDOCKS



Date: September 12, 2006         By:
                                    _________________________
                                    Mark E. Maddocks
                                    Vice President, Finance
                                   (Principal Financial Officer)