SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549



                                   FORM 10-KSB

                                   (Mark One)

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

                   For the Fiscal Year Ended October 31, 2006

                                       OR

      [_]   TRANSITION REPORT PURSUANT TO SECTION 13 OR SECTION 15(d) OF THE
            SECURITIES EXCHANGE ACT OF 1934

              For the Transition Period From-_________to-_________

                          Commission File Number 0-8567

                             DataMetrics Corporation
  -----------------------------------------------------------------------------
                    (Exact name of Small Business Registrant)

          Delaware                                         95-3545701
-------------------------------                       ------------------
(State or other jurisdiction of                          (IRS Employer
 Incorporation or organization)                       Identification No.)

                   1717 Diplomacy Row, Orlando, Florida 32809
                -------------------------------------------------
                    (Address of principal executive offices)

Registrant's telephone number, including area code:  (407) 251-4577
                                                     --------------

Securities registered pursuant to Section 12(b) of the Act:

Title of each class                 Name of each exchange on which registered
---------------------------         -----------------------------------------
Common Stock, .01 par value             None - quoted on the Pink Sheets,
                                                 Over the Counter

Securities registered pursuant to Section 12(g) of the Act:

None

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

Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B
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 IV of this Form 10-KSB or any amendment to this Form
10-KSB.[_]


Transitional Small Business Disclosure Format (Check one): Yes [_]; No [X]

State Issuer's revenues for its most recent fiscal year:
Gross Sales - $3,203,790

State the number of shares outstanding of the Registrant's Common Stock ("Common
Stock"), as of the latest practicable date: 11,552,035 shares of Common Stock as
of February 12, 2007.

The aggregate market value of the common equity of the company held by
non-affiliates as of February 12, 2007 was $4,158,733.


<PAGE>


PART I

ITEM 1.  BUSINESS - General

      This report contains certain statements of a forward-looking nature that
relate to the future events or the future performance of DataMetrics Corporation
("DataMetrics" or the "Company"). Prospective investors are cautioned that such
statements are only predictions and that the actual events or results may differ
materially. In evaluating such statements, prospective investors should
specifically consider various factors identified in this report, including,
without limitation, that Department of Defense ("DoD") contracts are subject to
termination without cause, competitive factors and pricing pressures.

      The Company, which commenced operations in 1962, is a manufacturer of
ruggedized information technology equipment, including computers, printers,
workstations, monitors and chassis & enclosures, which are designed to work in
harsh environments. The U.S. Military, major defense prime contractors,
international military forces, commercial aviation, and heavy industry, such as
mining, nuclear power generation, and oil & gas exploration, are the principal
end-users of the Company's products. DataMetrics is primarily a customer driven,
application-specific solutions provider. DataMetrics has a core competency in
the art and science of "ruggedization" that is at the base of everything it
does.

      While the specifics of "ruggedization" takes many forms, from strict
MIL-specs to varied industrial requirements, its core competency can best be
described by this definition: DataMetrics market focus is the sale, design,
development, and manufacture of electronic products into industries/applications
where the readily-available commercial/industrial grade product would be subject
to conditions/requirements that would render it ineffective or impractical for
the user. DataMetrics takes existing technology and applies "ruggedization"
techniques to substantially increase life and/or usability in adverse
user-defined conditions.

      The Company has been in a multi-year transformation to refocus on its core
competencies. It has made significant forays into new markets. In FY 2006,
approximately 80% of its revenues came from military/defense applications. The
Global War on Terror and other military operations continue to have a
significant effect on the Company's business. While much of the increase in the
DoD spending is in troop deployment and reconstruction, the Company does see an
increase in opportunities that are consistent with its activities. While there
is no guarantee that these programs will be funded or that DataMetrics will be
the selected provider, it is an indicator of a shift in the focus of the DoD.
The long design cycle for these programs creates an intangible cost in the form
of rapid technological obsolescence. Some military programs that would have
sought militarized equipment some years ago have modified the requirements to
reflect a need for rugged or commercial products. This trend has tended to
benefit sales of the Company's rugged product line while impacting its sale of
"ultra-rugged" MIL-spec equipment. During FY 2006 DataMetrics was selected to
provide rugged commercial off-the-shelf (COTS) printers for the new Boeing P8A
MMA that will eventually replace the US Navy's fleet of aging P-3s. In addition
the Company was awarded contracts for COTS printers for the Korean and New
Zealand P3s, and the Dash-8s operated by the Swedish navy.

      The Company has also made successful inroads into other industries that
can benefit from its "ruggedization" core competency. The Company designs,
develops, and manufactures computers and peripheral equipment for mining, oil &
gas exploration, nuclear power generation, and aggregate dredging, where
reliable operation of the equipment in challenging environments is imperative.


                                       1
<PAGE>


BUSINESS STRATEGY

      It is the goal of DataMetrics Corporation to continually improve its
position as a leading supplier of ruggedized systems and equipment. Our
strategies to achieve our objectives include:

      o     Leverage Incumbent Relationships. We intend to leverage our
            relationships with government and industry decision-makers by
            continuing to deliver high levels of performance on our existing
            contracts. Our experience has shown that strong performance on
            existing contracts greatly enhances our ability to obtain additional
            business with our existing customer base. To accomplish this, we
            intend to continue to position ourselves as a "best value" provider
            for our customers. "Best value" is a DoD contracting theme which
            focuses supplier selection on a variety of criteria, including
            supplier's past performance, instead of solely on lowest price.

      o     Develop and Expand Existing Technologies. Through a combination of
            customer-funded research and development and our own internal
            research and development efforts, we intend to continue to focus on
            the further development of our products. Customer-funded development
            contracts enable us to work with our customers to design and
            manufacture new systems and components, while decreasing our
            financial risk.

      o     Pursue Strategic Acquisitions. Through selective acquisitions, we
            aim to broaden our existing product base, build on our existing
            customer relationships and enhance our ability to enter new markets.

      The Company primarily uses a direct sales approach in the US with several
independent representatives in key areas. Internationally, the Company uses
manufacturers' representatives in key areas of Europe, Latin America and the Far
East.

      The Company strives to have its customers absorb most of the Company's R &
D and Non-Recurring Expenses (NRE). Despite limited resources, the Company makes
a modest investment in research and development. This investment is not
considered material at this time, though the impact for these products, such as
COTS chassis and rugged mobile computers could be significant.

      The Company's commercial airline products business unit continues to
expand with the introduction of its on-board electronic flight bag (EFB)
computer. In addition the Company has been sought out by airframe manufacturers
to provide a new generation of products. As one of three main manufacturers of
FAA certified printers in the world, the Company seeks to garner a greater
market share in FY 2007 by updating its current products to the current ARINC
standards. The Company will invest to expand its product offering in FY 2007 and
provide technology updates to its current product offering.

COMPETITION

      The primary business of the Company is the design and manufacture of
application-specific products for military/defense applications and programs. As
such, the company is often a sole-sourced provider of goods and services. The
Company focuses on collaborating with its customers for products that meet
applications rather than marketing specific products. As such, the company's
success is much more dependant on its collaborative efforts with its customers
than bidding against competitors. Overall, when in competitive situations,
because of the breadth of The Company's product line, the Company competes with
different companies for various products. For its chassis' the Company competes
with ELMA, Hybricon, AP Labs and Carlo Gavazzi. The Company competes with Barco
and DRS for monitors and with Miltope for printers. In its industrial offering,
DataMetrics competes with JLT Mobile Computing and a host of rack-mounted
computer manufacturers.


                                       2
<PAGE>


      The Company's competitive position in its market segments have been based
upon the experience of its technical personnel in their respective specialized
fields of Rugged computer and peripheral product design; its broad range of
products; its ability to design and manufacture its products to meet customers'
specifications; its specialized manufacturing and testing facilities; its long
association with many of its customers and its managerial and marketing
expertise in dealing with commercial customers, prime Military/Defense
contractors and the DoD. The Company believes that once a particular supplier's
computer and/or peripheral products have been selected for incorporation in a
military or commercial program, further competition by other vendors during the
life cycle of that program is limited.

      The extent of competition for any single project generally varies
according to the complexity of the product and the dollar value of the
anticipated award. DataMetrics believes that it competes on the basis of:

      o     Its "closeness to the customer"; a cultural belief in building
            strong customer loyalty through personal contact and professional
            attentiveness;

      o     Accumulated technical knowledge and expertise;

      o     The performance, flexibility, and price of its products;

      o     Reputation for prompt and responsive contract performance; and

      o     Breadth of its product lines.

      The success of DataMetrics will largely depend upon its ability to
leverage business within our existing customer base, establish new customers in
both new and existing markets, and identify new program opportunities early
enough to be in on the "ground floor".

SOURCES OF SUPPLY

      The Company is generally not dependent upon any one supplier for any raw
material or component we purchase. There are available alternative sources for
such raw materials and components.


SIGNIFICANT CUSTOMERS AND MATTERS CONCERNING DOD BUSINESS

      Most of the customers for the Company's products are the DoD and prime
contractors under programs funded by the DoD. Because the Company's products are
intended to function as subsystems, they are sold to customers which
manufacture, sell or use data processing or data communication systems which
utilize a processing, printing, recording or data entry function for which the
Company's products are suited. While the Company may be a subcontractor on a
government program with an aggregate budget of billions of dollars extending
over as long as a ten-year period, the Company's share of the budget for any
major program is relatively small, generally 1-10%, depending on the scope.


                                       3
<PAGE>


INTELLECTUAL PROPERTY RIGHTS

      It is the Company's policy to obtain appropriate proprietary rights
protection for any potentially significant new technology acquired or developed
by the Company. The Company has a trademark registration covering its "DmC"(R)
logo and for the Condor and Harrier products.

      In addition, the Company relies on copyright and trade secret laws to
protect its proprietary rights. The Company attempts to protect its trade
secrets and other proprietary information through agreements with customers and
suppliers, proprietary information agreements with the Company's employees and
consultants and other similar measures. There can be no assurance, however, that
the Company will be successful in protecting its trade secrets and other
proprietary information.

      While management believes that the Company's trademarks and other
proprietary know-how have significant value, changing technology and COTS
(Commercial off-the-shelf) initiatives within the DoD, makes the Company's
future success dependent principally upon its employees' technical competence
and creative skills for continuing innovation.

DEFENSE INDUSTRY

      Contracts with the U.S. government as well as with U.S. government prime
contractors are typically at a fixed price with a delivery cycle of 3 to 12
months, with contracts under any particular program being subject to further
funding and negotiation. The Company's defense contracts contain customary
provisions permitting termination at any time at the convenience of the customer
and providing for payment for work-in-progress should the contract be canceled.

      In Fiscal 2006, the Company's largest customers were the U.S. Government,
Lockheed Martin Corp., and Raytheon Company. The loss of any one of these
customers could have a material adverse impact on the Company's operations and
financial condition. The Company believes that it has a good reputation with its
customers for quality and delivery of its products and services.

      Companies that are engaged primarily in supplying equipment and services,
directly or indirectly, to the U.S. government are subject to special risks
including dependence on government appropriations, termination without cause,
contract re-negotiation and competition for the available DoD business.

      The Company believes that it will benefit from a trend of increasing DoD
budget forecasts and spending. The Company's DoD related contracts provide the
DoD the right to audit the Company's cost records and are subject to defective
pricing regulation. Management does not believe that it has any material
exposure of this sort on any such contracts. Accordingly, no provisions have
been made in the Company's accounts in connection with defective pricing
regulation.

SERVICE

      Pursuant to maintenance agreements, repair orders or warranty provisions,
the Company generally services its printers with its own employees at its
facility. The Company sells in-house, non-warranty repairs and maintenance
service. For both military and commercial products, the Company's standard
warranty period is one year, although longer warranty periods are available at
customer request for an additional charge.

      The Company also sells spare parts and documentation, such as handbooks,
operational manuals, schematics and other technical data to assist its customers
in maintaining their own equipment.


                                       4
<PAGE>


BACKLOG

      The Company's backlog of funded orders not yet recognized as revenue at
October 31, 2006 and October 31, 2005 was approximately $1,870,390 and
$1,727,367 respectively. Seventy seven percent of the backlog at October 31,
2005 was realized during the fiscal year ending October 31, 2006. In fiscal year
2007, 100% of the backlog is estimated to be realized as revenue.


MARKETING

      DataMetrics has an in-house marketing group that is comprised of
experienced technical professionals who are familiar with the government
agencies and companies that comprise our target markets. DataMetrics also uses
independent manufacturer sales representatives where it is deemed applicable and
cost effective, both domestically and abroad.


ENVIRONMENTAL EXPOSURE

      DataMetrics is an environmentally responsible member of the community. The
Company uses no hazardous materials in its products or production process. The
Company's manufacturing operations are subject to various federal, state and
local laws, including those restricting or regulating the discharge of materials
into the environment, or otherwise relating to the protection of the
environment. The Company is not involved in any pending or threatened
proceedings which would require curtailment of, or otherwise restrict, its
operations because of such regulations, and compliance with applicable
environmental laws has not had a material adverse effect on the business,
financial condition or results of operations of the Company.


EMPLOYEES

      The Company employed 28 persons on a full-time basis as of October 31,
2006, compared to 34 persons on a full-time basis as of October 31, 2005. A
union does not represent any of the Company's employees nor is the Company
subject to a collective bargaining agreement. The Company considers relations
with its employees to be good.


OTHER MATTERS

      The business of the Company is not subject to seasonal fluctuations.

      DataMetrics was incorporated in California in October 1962 and was
reincorporated in Delaware in April 1987. The Company's corporate offices and
manufacturing facilities are located at 1717 Diplomacy Row, Orlando, Florida,
32809.


INTERNET ADDRESS

      The Company maintains a website where additional information concerning
its business and various upcoming events can be found. The address of the
Company's website is www.datametrics.com.


                                       5
<PAGE>


RECENT DEVELOPMENTS

      ISO Certification: In July 2006, DataMetrics successfully passed its audit
and received its ISO 9001:2000 certification. The company is registered until
July 2007 and management does not foresee any issues relating to the renewal
thereof.

      The Company has generated much of the cash flow to sustain current
operations through a combination of revenues from sales and from equity
transactions. On December 30, 2005, the Company executed a major restructuring
effort. As a result of the said restructuring, the majority of long term loans
were either paid in full or converted into equity of DataMetrics Corporation.

      The details of the restructuring are described with the filing of the
definitive information statement on Schedule 14C as filed with the Securities
and Exchange Commission on March 2, 2006.

      On April 11, 2006, the Company effected a Stock combination through a 30:1
reverse stock split. Details of the split are described in the above referenced
Schedule 14C.

      As part of the restructuring, on December 30, 2005, SG DMTI, LLC ("SGD")
purchased 500,000 shares of the Company's Series B Preferred Stock in exchange
for the cancellation of an aggregate of $499,563 in principal and $467 in
accrued interest on certain promissory notes (the "Notes") issued by the Company
and held by SGD. DMTR LLC ("DMTR") converted debt owed to DMTR by the Company
(which debt consisted of an aggregate principal amount of $2,900,000 and
accrued, but unpaid interest on the unpaid principal amount) into common stock.
The Company also issued SGD a warrant exercisable for 12,877,162 shares of
Common Stock, representing 50% of the then issued and outstanding shares of
common stock of the Company on a fully diluted basis, for a period of ten (10)
years at an exercise price of $.01. These share issuances give effect to the
subsequent one-for 30 reverse stock split.

      On December 30, 2005, the Company also issued SGD a secured promissory
note in the principal amount of $500,000 (the "Secured Note"). The Secured Note
accrues interest at a rate of ten (10%) percent per annum and matures on
December 31, 2007 (original maturity date was December 31, 2006 but that date
was subsequently extended). Accrued interest on the Secured Note shall be paid
monthly commencing January 31, 2007. The Secured Note is secured by a first
priority lien on all of the Company's assets, which lien was placed on the
Company's assets at the time of issuance of the $200,000 note (the "Bridge
Note"), which the Company previously issued to SGD on November 7, 2005. The
Company used the proceeds of the Secured Note to (i) repay the Bridge Note and
all accrued interest thereon, (ii) pay interest on the Notes exchanged for the
Series B Preferred Stock, (iii) pay for certain expenses incurred in connection
with the transactions with SGD and (iv) for general working capital.

      On August 23, 2006, the Company issued SGD 200,000 shares of Series B
Preferred Stock for $200,000 under the Series B Preferred Stock and Warrant
Purchase Agreement dated December 30, 2005. The proceeds were used for general
working capital.


                                       6
<PAGE>


ITEM 2. PROPERTIES.

      The Company's operations are conducted from a 43,000 square foot
manufacturing facility in Orlando Florida, which the Company purchased in
December 1997. The Company consolidated all of its operations to this location
in 2001. The property is adequately insured. Property taxes are approximately
$29,500 per year.

      SGD acquired the Company's real property in Orlando for $1,500,000
effective November 1, 2005. SGD and the Company entered into a five-year triple
net lease with an annual rent obligation of approximately $150,000.


ITEM 3. LEGAL PROCEEDINGS.

      The Company is, from time to time, the subject of litigation, claims and
assessments arising out of matters occurring during the normal operation of the
Company's business. In the opinion of management, the liability, if any, under
such current litigation, claims and assessments would not materially affect the
financial position or the results of the operations of the Company.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

      None


                                       7
<PAGE>


PART II

ITEM 5. MARKET FOR DATAMETRICS' COMMON STOCK AND RELATED STOCKHOLDER MATTERS.

      DataMetrics' Common Stock has been listed on the American Stock Exchange
(Symbol "DC") from July 1998 through June 2000, at which time it became listed
on Over The Counter Bulletin Board (Symbol "DMTI"). In March 2003, the Company's
stock became quoted on the Pink Sheets. The Company anticipates re-listing its
stock on the Over-the-Counter Bulletin Board in the near future.

      The closing numbers for each quarter were obtained from the Bloomberg
System. The prices presented are bid prices which represent prices between
broker-dealer and do not include retail markups and markdowns or any commission
to the dealer. The prices may not reflect actual transactions.

      The high and low sales for the Common Stock are set forth in the following
table.

Fiscal 2006           High                    Low
-----------          ------                  ------
October 31           $0.120                  $0.100
July 31              $0.100                  $0.100
April 30             $0.900                  $0.020
January 31           $0.990                  $0.450

Fiscal 2005           High                    Low
-----------          ------                  ------
October 31           $0.025                  $0.021
July 31              $0.025                  $0.021
April 30             $0.045                  $0.021
January 31           $0.080                  $0.030

Fiscal 2004           High                    Low
-----------          ------                  ------
October 31           $0.060                  $0.035
July 31              $0.055                  $0.030
April 30             $0.140                  $0.045
January 31           $0.090                  $0.020


      There were approximately 323 stockholders of record as of December 31,
2006. No cash dividends have been paid to Common Stockholders since the Company
was founded, and the Company does not intend to do so in the foreseeable future.


                                       8
<PAGE>


ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

      The financial and business analysis below provides information that the
Company believes is relevant to an assessment and understanding of the Company's
consolidated financial condition, changes in financial condition, and results of
operations. This financial and business analysis should be read in conjunction
with the consolidated financial statements and related notes.

      Certain matters and statements made in this Annual Report on Form 10-KSB
constitute forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934. All such statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Wherever possible, the Company has identified these forward-looking statements
by words such as "anticipates," "may," "believes," "estimates," "projects,"
"expects" "intends," and words of similar import. In addition to the statements
included in this Annual Report on Form 10-KSB, the Company and its
representatives may from time to time make other oral or written forward-looking
statements. All forward-looking statements involve certain assumptions, risks
and uncertainties that could cause actual results to differ materially from
those included in or contemplated by the statements. These assumptions, risks,
and uncertainties include, but are not limited to, general business conditions,
including the timing or extent of any recovery of the economy, the highly
competitive nature of the industry in which the Company operates, the continued
involvement of military forces in the war on terrorism, the speed with which
consumers regain confidence in the safety of air transportation and other risks
and uncertainties. All such forward-looking statements may be affected by
inaccurate assumptions or by known or unknown risks and uncertainties, and
therefore, those statements may turn out to be incorrect. Consequently, no
forward-looking statement can be guaranteed. Actual future results may vary
materially.

      All forward-looking statements are made as of the date of filing or
publication. We undertake no obligation to publicly update any forward-looking
statements, whether as a result of new information, future events or otherwise.
Investors are advised, however, to consult any further disclosures the Company
makes in future filings with the Securities and Exchange Commission or in any of
its press releases. This report contains certain statements of a forward-looking
nature relating to future events or the future performance of the Company.
Prospective investors are cautioned that such statements are only predictions
and those actual events or results may differ materially.


RESULTS OF OPERATIONS

      Fiscal Year 2006 Compared With Fiscal Year 2005.

      Sales for the year ended October 31, 2006 were $3,204,000 an increase of
$175,000 or 6% compared with sales of $3,029,000 in the prior fiscal year. Sales
increased modestly in fiscal year 2006 compared to fiscal year 2005.


      Cost of sales for the year ended October 31, 2006 was $2,550,000 (80% of
sales); an increase of $397,000 or 18% compared with $2,153,000 (71% of sales)
for the prior fiscal year. Cost of sales increased compared to the same period
in the prior fiscal year as a result of the corresponding increase in sales, and
increased costs for material and labor in fiscal year 2006.

      Selling, General and Administrative (SG&A) expenses for the year ended
October 31, 2006, were $1,564,000 (49% of sales) an increase of $129,000 or 9%,
compared with $1,435,000 (47% of sales) for the same period in the prior fiscal
year. While SG&A increased modestly, SG&A as a percentage of sales increased due
largely to pay raises for employees.


                                       9
<PAGE>


      Net interest expense was $109,000 for the year ended October 31, 2006
compared with net interest expense of $447,000 for the prior year. The
significant decrease in interest expense for the fiscal year ended October 31,
2006 compared to the same period of the prior year is attributable mainly to the
corporate reorganization which occurred early in fiscal year 2006. As a result
of the said reorganization, the majority of long term loans were either paid in
full or converted into equity of DataMetrics Corporation.

      The net loss for the year ended October 31, 2006 amounted to $2,900,000
compared with a net loss of $583,000 for the prior fiscal year. While the
Company's loss from operations increased compared with the same period in the
prior fiscal year, due to salary and other expense increases, net loss for the
current year is much larger. This large increase in net loss is due primarily to
the effect of stock warrants issued to investors in connection with the
reorganization that occurred in the first quarter of 2006. As a result of the
said warrant issue, a loss valued at $2,186,000 was recorded.

      Management has determined that, based on the Company's historical losses
from recurring operations, the Company will most likely not recognize its net
deferred tax assets at October 31, 2006. Ultimate recognition of these tax
assets is dependent, to some extent, on the future revenue levels and margins of
the Company. It is the intention of management to assess the appropriate level
for the valuation allowance each quarter.


LIQUIDITY AND CAPITAL RESOURCES

      The Company's principal capital requirements have been to fund working
capital and the payment of long-term debt. The Company has relied primarily on
internally generated funds, private placement proceeds, and subordinated debt to
finance its operations. The Company has no material commitments for capital
expenditures which would affect its liquidity.

      Net cash used in operations was $533,000 in 2006 and $847,000 was used in
2005. The change from 2005 to 2006 was primarily due to the impact of a
non-recurring charge for forgiveness of payables.

      Net cash provided by investing activities in 2006 was $1,438,000 derived
from the sale of the building. There was no investing activities in 2005.

      Net cash provided / (used) by financing activities were $(732,000) and
$902,000 in 2006 and 2005, respectively. The change from 2005 to 2006 was
primarily related to the refinancing of the Property located at 1717 Diplomacy
Row, Orlando, FL., and the restructuring that took place on December 30, 2005 as
described below.

      The Company has generated much of the cash flow to sustain current
operations through a combination of revenues from sales, and from equity
transactions. Based on its need to finance operations and growth, and in light
of the fact that its debt precluded the Company from securing traditional
financing, on December 30, 2005, the Company executed a major restructuring
effort. While the Company pursued many different options for its reduction of
debt and the infusion of new capital, only one option provided it with a viable
offering. As a result of the restructuring, the majority of long term loans were
either paid in full or converted into equity of DataMetrics Corporation.

      As part of the restructuring, on December 30, 2005, SG DMTI, LLC ("SGD")
purchased 500,000 shares of the Company's Series B Preferred Stock in exchange
for the cancellation of an aggregate of $499,563 in principal and $467 in
accrued interest on certain promissory notes (the "Notes") issued by the Company
and held by SGD. The Company also issued SGD a warrant exercisable for 50% of
the then issued and outstanding shares of common stock of the Company on a fully
diluted basis for a period of ten (10) years at an exercise price of $.01
(before giving effect to the one-for 30 reverse stock split).


                                       10
<PAGE>


      On December 30, 2005, the Company also issued SGD a secured promissory
note in the principal amount of $500,000 (the "Secured Note"). The Secured Note
accrues interest at a rate of ten (10%) percent per annum and matures on
December 31, 2007 (original maturity date was December 31, 2006 but that date
was subsequently extended. Accrued interest on the Secured Note shall be paid
monthly commencing January 31, 2007. The Secured Note is secured by a first
priority lien on all of the Company's assets, which lien was placed on the
Company's assets at the time of issuance of the $200,000 note (the "Bridge
Note"), which the Company previously issued to SGD on November 7, 2005. The
Company used the proceeds of the Secured Note to (i) repay the Bridge Note and
all accrued interest thereon, (ii) pay interest on the Notes exchanged for the
Series B Preferred Stock, (iii) pay for certain expenses incurred in connection
with the transactions with SGD and (iv) for general working capital.

      The restructuring effected on December 30, 2005, included the conversion
by DMTR LLC ("DMTR") of all of the outstanding debt owed to DMTR by the Company
(which debt consisted of an aggregate principal amount of $2,900,000 and
accrued, but unpaid interest on the unpaid principal amount) into common stock.
The Company and the holders of the Company's issued and outstanding 892,652
shares of Series A Preferred Stock, representing all of the issued and
outstanding shares of Series A Preferred Stock of the Company, converted such
shares into 1,631,574 shares of common stock of the Company, after giving effect
to the subsequent reverse stock split.

      On April 11, 2006, the Company effected a Stock combination through a 30:1
reverse stock split.

      On August 23, 2006, the Company issued SGD 200,000 shares of Series B
Preferred Stock for $200,000. On December 6, 2006, the Company issued SGD
300,000 shares of Series B Preferred Stock for $300,000, which represent the
final shares of Series B Preferred Stock issuable under the Series B Preferred
Stock and Warrant Purchase Agreement dated December 30, 2005. The proceeds were
used for general working capital.

         Even though the Company has incurred losses over the past several
years, both the working capital and accumulated deficits have improved as a
result of actions Management has taken to ensure the Company will continue as a
going concern, particularly the sale-leaseback of the Company's property and the
restructuring in December 2005. The Company is now in a position where its
current assets are greater than current liabilities indicating better management
of working capital. In addition, the Company has a backlog of $1,870,000 at
October 31, 2006. The Company is dependent upon its sales to fund its operating
cash requirements. The Company believes that SGD, the holder of the Secured
Debt, all of the outstanding Series B Preferred Stock and the warrant
exercisable for 52% of the Company's outstanding common stock is willing to
provide the financial resources to properly finance the growth of the Company.
Based on the past investments made by SGD, Management believes SG DMTI to be a
long term investor willing to provide financial resources in the event of
shortfalls while the Company invests in new products and infrastructure.
Consequently, Management believes that these actions will enable the Company to
continue as a going concern through October 31, 2007.

FORWARD LOOKING STATEMENTS--CAUTIONARY FACTORS

      Except for the historical information and statements contained in this
report, the matters set forth in this report are "forward-looking statements"
that involve uncertainties and risks. Some are discussed at appropriate points
in this report and the Company's other SEC filings. Others are included in the
fact that the Company has been engaged in supplying equipment and services to
the U.S. government defense programs which are subject to special risks,
including dependence on government appropriations, contract termination without
cause, contract re-negotiations and the intense competition for available
defense business.


                                       11
<PAGE>


ITEM 7. FINANCIAL STATEMENTS

      The financial statements are included as a separate section following the
signature page to this Form 10-KSB.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

      NONE


ITEM 8A. CONTROLS AND PROCEDURES.

      (a) Disclosure Controls and Procedures. Under the supervision and with the
participation of our management, including our principal executive and financial
officer, we have evaluated the effectiveness of the design and operation of our
disclosure controls and procedures (as such term is defined in Rule 13a-15(e) or
Rule 15d-15(e) under the U.S. Securities Exchange Act of 1934, as amended)
within 90 days of the filing date of this annual report and, based on their
evaluation, our principal executive and financial officer have concluded that
these controls and procedures are working. Disclosure controls and procedures
include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by us in the reports that we file under the
Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the Securities and Exchange Commission's rules and forms,
and that such information is accumulated and communicated to our management,
including our principal executive and financial officer, as appropriate to allow
timely decisions regarding required disclosure.

      (b) Changes in Internal Control Over Financial Reporting. There were no
significant changes in our internal control over financial reporting identified
in connection with the evaluation required by Exchange Act Rule 13a-15(d) or
Rule 15d-15(d) that occurred during the period covered by this annual report, or
to our knowledge in other factors, that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.


ITEM 8B - OTHER INFORMATION

      NONE


                                       12
<PAGE>


PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS

      Management is vested in DataMetrics' Board of Directors and officers. At
each Annual Meeting, shareholders are to elect Directors. Each newly elected
Director holds office until the succeeding annual meeting and until the election
and qualification of his or her successor. The officers of the Company hold
office at the discretion of the Board of Directors. There was no annual meeting
of shareholders in 2005.

      The Board of Directors and executive officers of the Company and their
respective ages are set forth in the table below. Also provided is a brief
description of the business experience of each Director and executive officer
during the past five years and an indication of directorships (if any) held by
each Director in other companies subject to the reporting requirements under the
Federal securities laws.

Name                     Age        Title
----------------         ---        --------------------------------------------
Daniel Bertram            46        Chief Executive Officer, Director
Gary Herman               42        Chairman, Director
Michael Rapisand          47        Director
Thomas Leonardis          63        Director
Seth Lukash               61        Director
Edward Kroning*           46        Secretary, Chief Financial Officer (interim)

* On February 2, 2007 Edward Kroning was named interim Chief Financial Officer

BUSINESS EXPERIENCE

      Daniel Bertram is the President/Chief Executive Officer. Mr. Bertram
became President/CEO and a Director of the Company in June 2001 after serving as
Vice President for Marketing and Sales since March 2001. Mr. Bertram was a
principal of Conesys, Inc. from 1998 through February 2001. From 1997 through
1998 he was a principal of The Bertram Co., a consulting firm. He served as Vice
President for Sales and Customer Support for Staefa Control System (now a
Siemens Company) from 1991 to 1996. Prior to his work at Staefa, he served as
Regional Distribution Manager for Telemecanique/Square D, a U.S. subsidiary of
Groupe Schneider, France, a global leader in Industrial Automation Systems and
Components, where he grew its representative network in 13 western states. He
was also Northeast Regional Marketing Manager for Leroy-Somer, Inc. (now a
division of Emerson Electric). Mr. Bertram holds a Master of Arts in Psychology
from Pepperdine University and a Bachelor of Arts from Marquette University.

      Gary Herman has been the Chairman of the Board since May 2005 and a
director of the Company since August 2000. From August 2000 to May 2005 he was
also the company's Corporate Secretary. He is a Managing Member of Galloway
Capital Management, LLC, as well as a Managing Director of Arcadia Securities,
LLC., a New York based broker-dealer. Prior to this, he was an Associate
Managing Director of Burnham Securities Inc., a New York based investment bank.
Prior to joining Burnham, Mr. Herman was a managing partner of The Kingshill
Group, Inc., a merchant banking firm with offices in New York and Tokyo from
1993 to 1997. He is currently the chairman of the Board and Chief Executive
Officer of Digital Creative Development Corporation as well as director of
Shells Seafood Restaurants, Inc. He is a graduate of the State University of New
York at Albany.

      Michael Rapisand has been a director since October 2006. He has been the
Chief Financial Officer and Secretary of Xplore Technologies since August 2004.
From 2002 through 2004, Mr. Rapisand was the Chief Financial Officer of
TippingPoint Technologies, Inc, a publicly traded (NasdaqNM: TPTI) network-based
security hardware manufacturer emerging from development stage with initial
sales. From 2001 through 2002 he was Chief Financial Officer and Vice President
of Thinkwell Corporation, where he was responsible for finance, manufacturing
and order fulfillment activities of a private, development stage publisher of
multi-media college textbook material. From 1999 through 2001, he was a Finance
Director at DellWare a division of Dell Corporation. Mr. Rapisand has also
worked for PepsiCo, Inc. and KPMG. He graduated with honors from the University
of Texas at Austin, with a B.B.A in Accounting in December 1981 and is an active
Certified Public Accountant in the State of Texas.


                                       13
<PAGE>


      Thomas Leonardis has been a director since November 2001. He is currently
the President & CEO of Ember Industries, Inc., a contract manufacturing firm. He
is a senior executive with experience with companies such as Staefa Control
System and Time Energy. Management experiences span general management, sales
and marketing, and operations. He has international business experience in
Europe, Asia and Latin America. Mr. Leonardis graduated from Ohio Northern
University and has completed Financial Management through Northwestern
University as well as Executive Challenge through San Diego State University.

      Seth Lukash has been a director since February 2007. Mr. Lukash has been
CEO and a consultant to Food Automation Service Techniques, Inc. and Smart
Commercial Kitchen, a manufacturer of appliance controls exclusively for the
foodservice industry, since 2002. From 2001 thru July 2002, Mr. Lukash served as
President and Chief Executive Officer of Progressive Software Inc., a designer
and developer of software for the specialty retail and restaurant industries.
From 1985 through 2001, Mr. Lukash served as President and Chief Executive
Officer of Tridex Corporation. Mr. Lukash is currently on the Board of Directors
of Food Automation Service Techniques, Inc. and Tridex Corporation. Mr. Lukash
received a B.A. in Finance from the University of Miami in 1968.

      Edward Kroning, Corporate Secretary, interim Chief Financial Officer, and
Operations Leader. Mr. Kroning became Secretary in 2005 after joining
DataMetrics in 1998. A graduate of the University of Central Florida, Mr.
Kroning came to DataMetrics(TM) with over 14 years of experience in purchasing,
inventory and material and production planning. Prior to his arrival at
DataMetrics(TM), he was Director of Material and Planning at Tri-Tech
Electronics, Inc., an industry leader in custom and build to print military and
commercial interconnect systems.

      The audit committee of the Company is comprised of Thomas Leonardis and
Michael Rapisand. Mr. Rapisand was appointed Chairman of the Audit Committee at
the Board of Directors meeting in October of 2006. All Directors attended all of
the Board of Director meetings in 2006.

      The compensation committee of the Company is comprised of Seth Lukash and
Tom Leonardis. Mr. Lukash was appointed Chairman of the Compensation Committee
at the Board of Directors meeting in February of 2007.


BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

      Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers, directors and persons who own more than ten percent of the
Company's common shares to file reports of ownership with the SEC and to furnish
the Company with copies of these reports. Based solely upon its review of
reports received by it, or upon written representations from certain reporting
persons that no reports were required, the Company believes that no one in the
above categories failed to file the required reports.


                                       14
<PAGE>


CODE OF ETHICS

      The Code of Ethics is filed with the SEC as Exhibit 21.2. A copy of the
Code of Ethics is available upon request, free of charge.


ITEM 10. EXECUTIVE COMPENSATION

      The following table shows, for the fiscal year ended October 31, 2006, the
compensation earned by the current Chief Executive Officer of the Company.


                          SUMMARY COMPENSATION SCHEDULE
                               ANNUAL COMPENSATION

<TABLE>
<CAPTION>
                                                       Long Term Compensation
                                                   ----------------------------
                                                       Awards                                    Payouts
                                                    ------------                                  ------
                                                                                  Securities
                                                                                  Underlying
Name and                                               Other        Restricted    Options and     LTIP **        All
Principal           Fiscal         Base                Annual      Stock Awards    Warrants       Payouts       Other
Position             Year         Salary    Bonus   Compensation        ($)           (#)           ($)      Compensation
---------           ------       --------   -----   ------------   ------------   -----------     -------    ------------
<S>                  <C>         <C>        <C>     <C>            <C>            <C>             <C>        <C>
Daniel Bertram       2006        $148,320      --    $  7,200(3)   $  25,000(7)            --          --            --(4)
(1)(2)
(1)(2)

Daniel Bertram       2005        $144,000      --    $  7,200(3)          --               --          --            --(4)
(1)(2)
(1)(2)

Daniel Bertram       2004        $144,000      --    $ 14,400(3)          --               --          --            --(4)
(1)(2)
(1)(2)

Daniel Bertram       2003        $144,000      --    $ 14,400(3)     $ 7,244(5)            --          --            --(4)
(1)(2)                                                               $30,926(6)
(1)(2)
</TABLE>


**LTIP means any plan providing compensation intended to serve as incentive for
performance to occur over a period longer than one fiscal year.

(1)   Hired March 2001.
(2)   Promoted to CEO, June 2001.
(3)   Rent and car allowances.
(4)   Bonus.
(5)   Stock Bonus of 241,455 shares at $.03 per share in May of 2003
(6)   Stock Bonus of 2,061,765 shares at $.015 per share issued May 31, 2003
(7)   Stock Bonus of 250,000 shares at $.10 per share in June of 2006


                                       15
<PAGE>


              AGGREGATED OPTION/SAR* EXERCISES IN LAST FISCAL YEAR
                          AND FY END OPTION/SAR VALUES

<TABLE>
<CAPTION>
                                                Number of Exercisable
                 Shares                         Securities Underlying     Value of Unexercised
                 Acquired on    Value           Unexercised Options at    In-the-money Options
Name             Exercise       Realized               FY-End            At FY-End Exercisable
------------     ------------   --------------  ----------------------   ---------------------
<S>              <C>            <C>             <C>                      <C>
Daniel Bertram   None           Not Applicable           5,000                     0
</TABLE>


DIRECTOR COMPENSATION

      DataMetrics pays each Independent Director $1,000 per fiscal quarter. The
Board has periodically approved special compensation to Directors as services
are performed. In that regard, Gary Herman and Daniel Bertram each received
250,000 shares valued at $0.10 per share on June 14, 2006 for their work in the
company's restructuring.

EMPLOYMENT AGREEMENTS

      Pursuant to an agreement with the Company dated June 2001 and extended in
2002, 2004, and 2006 the Company agreed to employ Daniel Bertram as the
President/Chief Executive Officer through May 2008. His annual salary is
$148,320. He also receives a monthly automobile allowance, and participation in
the Company's benefit package. He will receive stock options and bonuses as
determined by the Board of Directors.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTER

      The following table sets forth, as of November 17, 2006 the number and
percentage of shares of the Company's Common Stock owned beneficially, by class
and on a combined basis, by (i) each current director, (ii) each executive
officer, (iii) all executive officers and directors as a group, and (iv) each
person who is known by us to own beneficially more than 5% of our Common Stock.
The table has been adjusted to reflect the one for 30 reverse split that was
effective April 11, 2006.

      Except as otherwise indicated, the beneficial owners listed in the table
have sole voting and investment powers with respect to the shares. The table
below refers only to common stock.

Executive Officers & Directors           Number of Shares     Percent of Shares
Name of Beneficial Owner                Beneficially Owned    Beneficially Owned
------------------------------         -------------------    ------------------

Daniel Bertram                 (2)            626,774              2.43%
                               (5)
Gary Herman                    (2)(3)         494,000              1.92%
                               (5)
Ed Kroning                     (2)            183,535              0.71%
                               (4)
Michael Rapisand               (2)            100,000              0.38%
                               (6)
Thomas Leonardis               (2)            100,000              0.38%
                               (6)
Seth Lukash                    (2)            100,000              0.38%
                               (7)

All Executive Officers
& Directors as a Group                      1,604,309              6.20%
                                       ===================




Beneficial Owners of
More Than 5%
------------------------------

SG DMTI Capital, LLC           (1)         12,877,162             52.66%
Estate of John Rosenthal                    1,541,584              6.30%
Europa International Inc.                   1,505,601              6.16%
Goren Bros. LP                              1,589,792              6.50%
NTS Financial Services Ltd.                 1,240,344              5.07%
Philip P. Sassower CRAT                     1,588,556              6.50%
Triad Construction Concepts                 1,473,372              6.02%
                                       -------------------
Total Beneficial Owners of
More Than 5%                               21,816,411
                                       ===================


                                       16
<PAGE>


Notes:


(1)   Giving effect to the post-split Warrant for 12,877,162 post-split shares,
      the shareholder would own 50% of the common stock of the Company.

(2)   The address of each of these persons is c/o Datametrics Corporation, 1717
      Diplomacy Row, Orlando, Florida 32809.

(3)   Includes 4,000 post-split shares of common stock issued to Digital
      Creative Development Corporation, of which Mr. Herman is Chairman and
      Chief Executive Officer.

(4)   Includes 486 post-split shares of common stock jointly owned with Karen
      Kroning.

(5)   Includes 250,000 post-split shares issued each to Daniel Bertram and Gary
      Herman on June 14, 2006.

(6)   Includes stock options issued to Tom Leonardis and Michael Rapisand for
      100,000 shares each of DataMetrics common stock on October 12, 2006.

(7)   Includes stock options issued to Seth Lukash for 100,000 shares of
      DataMetrics common stock on February 8, 2007.


SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS:

                  Number of                              Number of Securities
                  Securities to    Weighted-Average      remaining available
Compensation      be issued upon   exercise price of     for future issuance
Plan              Exercise of      outstanding Options,  under equity compen-
Category           options         Warrants and rights      sation plans.
---------------   ---------------  --------------------  --------------------

Approved by
Shareholders      2,027,500              $0.10                 972,500

Not approved
By Shareholders     None                  None                  None

      The Company does not know of any arrangements that may result in a change
in control of the Company.


                                       17
<PAGE>


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      In December 2005, DMTR LLC ("DMTR") converted all of the outstanding debt
owed to DMTR by the Company (which debt consisted of an aggregate principal
amount of $2,900,000 and accrued, but unpaid interest on the unpaid principal
amount) into 8,939,249 shares of common stock (post reverse split). DMTR LLC
subsequently distributed these shares to its six members, each of whom now own
between 5.5% and 6.5% of the issued and outstanding shares of the Company as
reported under "Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters."

      SGD acquired the Company's real property in Orlando for $1,500,000
effective November 1, 2005. SGD and the Company entered into a five-year triple
net lease with an annual rent obligation of approximately $150,000. The
sale-leaseback of the Company's property was part of a restructuring of the
Company's capital structure. Such restructuring in December 2005 with SGD and
other affiliated parties are described under "Business - Recent Developments"
and under "Managements Discussion and Analysis of Financial Condition and
Results of Operations."


ITEM 13 EXHIBITS, LISTS AND REPORTS ON FORM 8-K

(a) EXHIBIT LIST and DESCRIPTION OF EXHIBITS
-------------------------------------------------------------------------------

Exhibit No. Description
----------- ------------

3.1         Restated Certificate of Incorporation, as currently in effect
            (incorporated by reference to Exhibit 3.1 to the Registrant's Form
            8-K dated April 15, 1987).

3.2         Certificate of Designations, Preferences and Relative,
            Participating, Optional and Other Special Rights of Series B
            Preferred Stock and Qualifications, Limitations and Restrictions
            Thereof dated August 10, 1993 incorporated by reference to Exhibit
            4.1 to Registrant's Form 8-K dated August 10, 1993).

3.3         Bylaws as currently in effect (incorporated by reference to Exhibit
            3.2 to Registrant's Form 10-K for the year ended October 28, 1990).

3.4         First Amendment to the Restated Bylaws, dated August 6,
            1996(incorporated by reference to Exhibit 3.0 to the Registrant's
            Form 8-K dated August 6, 1996).

4.8         Form of Common Stock Subscription Agreement (incorporated by
            reference to Exhibit 4.7 to the Registrant's Form 8-K dated December
            24, 1998).

4.9         Common Stock Purchase Agreement, dated May 7, 1999, by and among the
            Registrant and the Purchasers listed therein (incorporated by
            reference to Exhibit 4.1 to the Registrant's Form 8-K dated May 7,
            1999).

4.10        Registration Rights Agreement, dated May 7, 1999, by and among the
            Registrant and the Purchasers listed therein (incorporated by
            reference to Exhibit 4.2 to the Registrant's 8-K dated May 7, 1999).

4.11        Form of Warrant (incorporated by Reference to Exhibit 4.3 to the
            Registrant's 8-K dated May 7, 1999).

4.17        Warrant issued to Carl K. Doumani (incorporated by reference to
            Exhibit 4.1 to the Registrant's 8-K dated September 13, 1999).


                                       18
<PAGE>


4.18        Warrant issued to Roy Doumani (incorporated by reference to Exhibit
            4.2 to the Registrant's 8-K dated September 13, 1999).

4.19        Form of Warrant issued to finder (incorporated by reference to
            Exhibit4.3 to the Registrant's 8-K dated September 13, 1999).

4.20        Warrant to purchase 7,000,000 shares of common stock issued to DMTR,
            LLC

4.21        Exchange Offering Statement dated February 8, 2001 in respect of the
            Company's 12% Subordinated Convertible Secured Notes.

4.22        Form of Letter of Acceptance relating to Exchange Offer to holders
            of the Company's 12% Subordinated Convertible Secured Notes.

4.23        Exchange Offering Statement dated February 8, 2001 in respect of the
            Company's 10% Subordinated Notes.

10.6        Security Agreement between the Registrant and Adrien A. Maught, Jr.
            dated as of August 12, 1997. (incorporated by reference to Exhibit
            10.6 to the Registrant's Form SB-2/A dated September 17, 1999).

10.7        Loan Agreement with Branch Bank, dated as of August 20, 1999
            incorporated Exhibit 10.1 to the Registrant's 8-K dated September
            13, 1999).

10.8        Promissory Note payable to Branch Bank, dated as of August 20,
            1999(incorporated by reference to Exhibit 10.2 to the Registrant's
            8-K dated September 13, 1999).

10.9        Security Agreement and Addendum with Branch Bank, dated as of August
            20, 1999 (incorporated by reference to Exhibit 10.3 to the
            Registrant's 8-K dated September 13, 1999).

10.10       Form of Guarantee and Addendum of each of the guarantors of the
            Registrant's line of credit with Branch Banking and Trust Company
            (Incorporated by reference to Exhibit 10.4 to the Registrant's 8-K
            dated September 13, 1999).

10.11       Form of Secured Promissory Note for loan of $480,000.00
            (incorporated by reference to Exhibit to 10.5 to the Registrant's
            Form 8-K filed on August 22, 2000).

10.12       Stock Pledge Agreement dated July 31, 2000 between the Company and
            Bruce Galloway (incorporated by reference to Exhibit to 10.6 to the
            Registrant's Form 8-K filed on August 22, 2000).

10.13       Irrevocable Proxy dated July 31, 2000 (incorporated by reference to
            Exhibit to 10.7 to the Registrant's Form 8-K filed on August 22,
            2000).

10.14       Form of Secured Promissory Note for the Second Loan of
            $210,000.00(incorporated by reference to Exhibit to 10.8 to the
            Registrant's Form 8-K filed on August 22, 2000).

10.15       Security Agreement dated August 18, 2000 between MadeMyWay and Bruce
            Galloway, as Collateral Agent (incorporated by reference to Exhibit
            to 10.9 to the Registrant's Form 8-K filed on August 22, 2000).


10.16       Pledge Agreement dated August 18, 2000 between the Company and Bruce
            Galloway, as Collateral Agent (incorporated by reference to Exhibit
            to 10.10 to the Registrant's Form 8-K filed on August 22, 2000).


                                       19
<PAGE>


10.17       Irrevocable Proxy dated August 18, 2000 (incorporated by reference
            to Exhibit to 10.11 to the Registrant's Form 8-K filed on August 22,
            2000).

10.18       Assignment of Life Insurance as Collateral (incorporated by
            reference to Exhibit to 10.12 to the Registrant's Form 8-K filed on
            August 22, 2000).

10.19       Loan Agreement dated January 31, 2001 between the Company and DMTR,
            LLC (incorporated by reference to the Registrant's Form 10-K filed
            on February 13, 2001).

10.20       Secured Promissory Note dated January 31, 2001 issued by the Company
            to DMTR, LLC (incorporated by reference to the Registrant's Form
            10-K filed on February 13, 2001).

10.21       Modification and Amendment Agreement dated January 31, 2001 between
            the Company and DMTR, LLC (incorporated by reference to the
            Registrant's Form 10-K filed on February 13, 2001).

10.22       Modification and Amendment Agreement dated January 31, 2001 between
            the Company and DMTR, LLC (incorporated by reference to the
            Registrant's Form 10-K filed on February 13, 2001).

10.23       Exchange Agreement dated as of January 31, 2001 between the Company
            and DMTR, LLC (incorporated by reference to the Registrant's Form
            10-K filed on February 13, 2001).

10.24       Registration Rights Agreement dated as of January 31, 2001 between
            the Company and DMTR, LLC (incorporated by reference to the
            Registrant's Form 10-K filed on February 13, 2001).

10.25       Security Agreement dated January 31, 2001 between the Company and
            DMTR, LLC (incorporated by reference to the Registrant's Form 10-K
            filed on February 13, 2001).

10.26       Security Agreement dated January 31, 2001 between the MadeMyWay.Com,
            Inc. and DMTR, LLC (incorporated by reference to the Registrant's
            Form 10-K filed on February 13, 2001).

10.27       Pledge Agreement dated January 31, 2001 between the Company and
            DMTR, LLC (incorporated by reference to the Registrant's Form 10-K
            filed on February 13, 2001).


                                       20
<PAGE>


10.24       Form of Letter of Acceptance relating to Exchange Offer to holders
            of the Company's 10% Subordinated Notes (incorporated by reference
            to the Registrant's Form 10-K filed on February 13, 2001).

10.25       Agreement and Plan of Merger between the Company, PEC and Merger
            subdued November 19, 2001 (incorporated by reference from the Form
            8-K filed on December 5, 2001), (incorporated by reference to the
            Registrant's Form 10-K filed on February 13, 2001).


10.26       Standstill Agreement with DMTR, LLC effective as of January 31,
            2003.

10.27       Contract of sale between DataMetrics Corporation and SG DMTI, LLC
            dated November 4, 2005. (incorporated by reference to the
            Registrant's Form 8-K filed on November 24, 2005)

10.28       Lease Agreement between DataMetrics Corporation and SG DMTI, LLC.
            (incorporated by reference to the Registrant's Form 8-K filed on
            January 17, 2006)

10.29       Secured Promissory Note dated November 7, 2005. (incorporated by
            reference to the Registrant's Form 8-K filed on January 17, 2006)

10.30       Loan Termination and Conversion Agreement between the Company and
            DMTR dated as of December 30, 2005. (incorporated by reference to
            the Registrant's Form 8-K filed on January 17, 2006)

10.31       Series B Preferred Stock and Warrant Purchase Agreement between the
            Company and SG dated as of December 30, 2005. (incorporated by
            reference to the Registrant's Form 8-K filed on January 17, 2006)

10.32       Certificate of Designations, Preferences and Rights of Series B
            Preferred Stock. (incorporated by reference to the Registrant's Form
            8-K filed on January 17, 2006)

10.33       Common Stock Purchase Warrant dated as of December 30, 2005.
            (incorporated by reference to the Registrant's Form 8-K filed on
            January 17, 2006)

10.34       Registration Rights Agreement dated as of December 30, 2005 between
            the Company and SG. (incorporated by reference to the Registrant's
            Form 8-K filed on January 17, 2006)

10.35       Secured Promissory Note dated as of December 30, 2005. (incorporated
            by reference to the Registrant's Form 8-K filed on January 17, 2006)

10.36       Consent Agreement between DMTR LLC and Commerce Bank, N.A. dated as
            of December 30, 2005. (incorporated by reference to the Registrant's
            Form 8-K filed on January 17, 2006)

10.37       Addendum to Common Stock Purchase Warrant dated as of February 8,
            2007.

10.38       Allonge to Note dated as of February 8, 2007.

16.1        Letter of Ernst & Young LLP dated November 7, 1997 regarding its
            comments to the statements made by Registrant in Item 4 of
            Registrant's Form 8-K filed with the Securities and Exchange
            Commission.

16.2        Letter of Deloitte & Touche LLP dated March 3, 1998 regarding its
            comments to the statements made by Registrant in Item 4 of
            Registrant's Form 8-K filed with the Securities and Exchange
            Commission on February 25, 1998 (incorporated by reference to
            Exhibit 16.1 to the Registrant's Form 8-K/A filed on March 5, 1998).

16.3        Letter of Deloitte & Touche LLP dated May 8, 1998 regarding its
            comments to the statements made by Registrant in Item 4 of
            Registrant's Form 8-K filed with the Securities and Exchange
            Commission on April 30, 1998(incorporated by reference to Exhibit
            16.1 to the Registrant's Form 8-K/A filed on May 21, 1998).

21.1        List of Subsidiaries.

21.2        DataMetrics Corporation Code of Ethics (incorporated by reference to
            Exhibit 21.2 on the Registrant's Form 10-K filed on September 30,
            2005).


                                       21
<PAGE>


31.1        Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
            2002 by Daniel Bertram.

31.2        Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of
            2002 by Edward Kroning.

32.1        Certification of Chief Executive Officer Pursuant to Section 906 of
            the Sarbanes-Oxley Act of 2002

32.2        Certification of Chief Financial Officer Pursuant to Section 906 of
            the Sarbanes-Oxley Act of 2002

99.1        The DataMetrics Employee Savings Plan And The Trust Agreement
            Pursuant To The DataMetrics Employee Savings Plan (incorporated by
            reference to Exhibit 28 to Registrant's Statement on Form S-8 filed
            on November 12,1985 SEC File No. 33-01469.

99.2        Amended and Restated 1993 Stock Option Plan of DataMetrics
            Corporation (incorporated by reference to Exhibit 28.2 to
            Registrant's Form 10-K for the year ended October 31, 1993).

99.3        The 1986 Stock Option Plan of DataMetrics Corporation, as amended
            (Incorporated by reference to Exhibit 28.1 to Registrant's
            Registration Statement on Form S-8 filed on June 10, 1987, SEC File
            No. 33-14969 and Exhibit 28.5 to Registrant's Form 10-K for the year
            ended October 29, 1988).

99.4        The 1982 Stock Option Plan of DataMetrics Corporation, as amended
            (Incorporated by reference to Exhibit 28.2 to Registrant's
            Registration Statement on Form S-8 filed on June 10, 1987, SEC File
            No. 33-14969).

99.5        The 1993 Directors' Option Plan of DataMetrics Corporation
            (incorporated by reference to Exhibit 28.5 to Registrant's Form 10-K
            for the year ended October 31, 1993).

99.6        DataMetrics Corporation Supplemental Executive Retirement Plan and
            Master Trust Agreement (incorporated by reference to Exhibit 28.6 to
            Registrant's Form 10-K for the year ended October 30, 1994).

99.7        The 1995 Stock Option Plan of DataMetrics Corporation (incorporated
            by reference to Exhibit 28.7 to Registrant's Form S-8 Filed May 30,
            1996, SEC File No. 333-04815).

99.8        The DataMetrics Corporation Employee Qualified Stock Purchase Plan
            (incorporated by reference to Exhibit 28.8 to Registrant's Form S-8
            filed on May 30, 1996, SEC File No. 333-04815).

99.9        Press Release (incorporated by reference to Exhibit 99.1 to
            Registrant's Form 8-K filed on August 18, 2000).

99.10       Press Release (incorporated by reference to Exhibit 99.2 to
            Registrant's Form 8-K filed on August 18, 2000).

99.11       Certification of Daniel Bertram, Chief Executive Officer, under the
            Sarbanes-Oxley Act of 2002 dated February 12, 2007.

99.12       Certification of Edward Kroning, Chief Financial Officer, under the
            Sarbanes-Oxley Act of 2002 dated February 12, 2007.

(b) Reports on Form 8-K - None ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.


                                       22
<PAGE>


      The following table represents the aggregate fees billed for professional
audit services rendered to the Company by Davis Monk & Co. for the audit of the
Company's annual financial statements during the 2 years ended October 31, 2006
and 2005, and all fees billed for other services by Davis Monk & Co. during
those periods:

Year Ended October 31,                                 2006             2005
---------------------------------                    --------         -------
Audit fees (1)                                       $114,597         $55,465
Audit Related Fees (1)                                   None            None
Tax fees (2)                                         $ 11,685         $ 4,280
All other fees (3)                                       None            None
Total Accounting Fees and Services                   $126,282         $59,745

(1)   AUDIT FEES. These are fees for professional services for the audit of the
      Company's annual financial statements, and for the review of the financial
      statements included in the Company's filings on Form 10Q and for services
      that are normally provided in connection with statutory and regulatory
      filings or engagements, including late filings for previous years.

(2)   TAX FEES. These are fees for professional services with respect to tax
      compliance, tax advice, and tax planning.

(3)   ALL OTHER FEES. These are fees for permissible work that does not fall
      within any of the other fee categories, i.e., Audit Fees or Tax Fees.

PRE-APPROVAL POLICY FOR AUDIT SERVICES

      The Company's Audit Committee has responsibility for the approval of all
audit and non-audit services before the Company engages an accountant. All of
the services rendered to the Company by Davis Monk & Co. for the fiscal years
ended October 31, 2006 and 2005 were pre-approved by the Audit Committee before
the engagement of the auditors for such services. The Company and the Audit
Committee are working with the Company's legal counsel to establish formal
pre-approval policies and procedures for all future engagements of the Company's
accountants. The Company's pre-approval policy will expressly provide for the
annual pre-approval of all audits, audit-related and all non-audit services
proposed to be rendered by the independent auditor for the fiscal year, as
specifically described in the auditor's engagement letter, such annual
pre-approval to be performed by the Audit Committee.


                                       23
<PAGE>


              FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS REPORT
                     DATAMETRICS CORPORATION AND SUBSIDIARY
                            OCTOBER 31, 2006 AND 2005


                                TABLE OF CONTENTS
                                                                            Page
                                                                           -----
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                      35

CONSOLIDATED BALANCE SHEETS                                                  36

CONSOLIDATED STATEMENTS OF OPERATIONS                                        37

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT                             38

CONSOLIDATED STATEMENTS OF CASH FLOWS                                      39-40

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS                             41-50


                                       24
<PAGE>


             Report of Independent Registered Public Accounting Firm


To the Audit Committee, Board of Directors and Stockholders
DataMetrics Corporation and Subsidiary
Orlando, Florida


We have audited the accompanying consolidated balance sheets of DataMetrics
Corporation and Subsidiary as of October 31, 2006 and 2005, and the related
consolidated statements of operations, stockholders' deficit, and cash flows for
the years ended October 31, 2006 and October 31, 2005. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with the standards of The Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of DataMetrics
Corporation and Subsidiary as of October 31, 2006 and 2005, and the results of
its operations and its cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 13 to the
financial statements, the Company has incurred losses over the past several
years and has accumulated and working capital deficits. These conditions raise
substantial doubt about its ability to continue as a going concern. Management's
plans regarding these matters are also described in Note 13. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.



/s/ Davis, Monk & Company
- -------------------------
DAVIS, MONK & COMPANY

November 17, 2006
(except for Note 15, as to
which the date is February 10, 2007)
Gainesville, Florida


                                       25
<PAGE>


                           Consolidated Balance Sheets
                      October 31, 2006 and October 31, 2005
                     DataMetrics Corporation and Subsidiary
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                         2006        2005
                                                                                       --------    --------
                                     ASSETS
<S>                                                                                    <C>         <C>
CURRENT ASSETS
           Cash                                                                        $    319    $    146
           Accounts Receivable (Net of Allowance for Doubtful Accounts
               of $0 for 2006 and 2005)                                                      80         270
           Inventory (Net of Allowance for Obsolete Inventory of $6,070
               for 2006 and 2005)                                                           705         907
           Other Current Assets                                                              43          94
                                                                                       --------    --------
TOTAL CURRENT ASSETS                                                                      1,147       1,417
                                                                                       --------    --------

PROPERTY AND EQUIPMENT
           Building and Improvements                                                         --       1,112
           Furniture, Fixtures and Computer Equipment                                     1,197       1,195
           Machinery and Equipment                                                          555         547
           Land                                                                              --         420
                                                                                       --------    --------
TOTAL PROPERTY AND EQUIPMENT                                                              1,752       3,274

Less: Accumulated Depreciation                                                           (1,745)     (2,011)
                                                                                       --------    --------

NET PROPERTY AND EQUIPMENT                                                                    7       1,263
                                                                                       --------    --------

TOTAL ASSETS                                                                           $  1,154    $  2,680
                                                                                       ========    ========

                      LIABILITIES AND STOCKHOLDERS DEFICIT

CURRENT LIABILITIES
           Accounts Payable                                                            $    283    $    492
           Accrued Expenses                                                                 356         677
           Warranty Reserve                                                                  40          40
           Notes and Advances Payable - Related Parties                                      --       1,712
           Short-Term Debt                                                                  141       3,041
                                                                                       --------    --------
TOTAL CURRENT LIABILITIES                                                                   820       5,962

LONG TERM LIABILITIES
           Notes and Advances Payable - Related Parties                                     500          --
                                                                                       --------    --------
TOTAL LIABILITIES                                                                         1,320       5,962
                                                                                       --------    --------

STOCKHOLDERS' DEFICIT
           Series A Preferred Stock -
             $1,339 Aggregate Liquidation Preference                                         --           9
           Series B Preferred Stock -
             $1,050 Aggregate Liquidation Preference                                          7          --
           Common Stock                                                                     114          11
           Additional Paid In Capital                                                    64,367      58,452
           Accumulated Deficit                                                          (64,654)    (61,754)
                                                                                       --------    --------
TOTAL STOCKHOLDERS' DEFICIT                                                                (166)     (3,282)
                                                                                       --------    --------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT                                            $  1,154    $  2,680
                                                                                       ========    ========
</TABLE>


The accompanying "Notes to Consolidated Financial Statements" form an integral
part of these statements.


                                       26
<PAGE>


                      Consolidated Statements of Operations
                  For the years ended October 31, 2006 and 2005
                     DataMetrics Corporation and Subsidiary
                      (in thousands, except per share data)


                                                     2006       2005
                                                   --------   --------
SALES                                              $  3,204   $  3,029

COST OF SALES
           Purchases, manufacturing and overhead      2,550      2,153
                                                   --------   --------

GROSS PROFIT                                            654        876

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES          1,564      1,435
                                                   --------   --------

OPERATING LOSS                                         (910)      (559)
                                                   --------   --------

OTHER INCOME (EXPENSE)
           Restructuring Expense                     (2,186)        --
           Interest expense                            (109)      (447)
           Inventory Adjustment to Market                --        (64)
           Directors Compensation                       (54)        --
           Forgiveness of Payables                       80        487
           Other Income                                 279         --
                                                   --------   --------

TOTAL OTHER EXPENSE                                 (-1,990)       (24)
                                                   --------   --------

LOSS BEFORE PROVISION FOR INCOME TAXES               (2,900)      (583)

PROVISION FOR INCOME TAXES                              --         --
                                                   --------   --------

NET LOSS                                           $ (2,900)  $   (583)
                                                   ========   ========

LOSS PER SHARE ON COMMON STOCK, BASIC
           AND DILUTED                             $(0.3072)  $(0.5449)
                                                   ========   ========

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
           OUTSTANDING, BASIC AND DILUTED             9,441      1,070
                                                   ========   ========


The accompanying "Notes to Consolidated Financial Statements" form an integral
part of these statements.


                                       27
<PAGE>


                Consolidated Statements of Stockholders' Deficit
                  For the years ended October 31, 2006 and 2005
                     DataMetrics Corporation and Subsidiary
                        (in thousands, except share data)

<TABLE>
<CAPTION>
                                   Common Stock          Ser. A Preferred      Ser. B Preferred                            Total
                              ---------------------  ---------------------- ----------------------   Add'l                 Stock
                                Number      Dollar     Number       Dollar   Number      Dollar     Paid-In      Accum     holders
                               of Shares    Amount    of Shares     Amount  of Shares    Amount     Capital     Deficit    Deficit
                              ----------  ---------  -----------  --------- ---------  -----------  ---------  ---------  ---------
<S>                           <C>         <C>        <C>          <C>       <C>        <C>          <C>        <C>        <C>

Balances at October 31, 2004   1,070,403  $      11      892,652  $       9        --  $        --  $  58,452  $ (61,171) $  (2,699)
Net Loss                                                                                                            (583)      (583)
                              ----------  ---------  -----------  --------- ---------- -----------  ---------  ---------  ---------
Balances at Oct. 31, 2005      1,070,403  $      11      892,652  $       9        --  $        --  $  58,452  $ (61,754) $  (3,282)

Conversion of DMTR loan
  of $2.9 million plus
  accrued interest             8,157,872         82                                                     2,998                 3,080

Conversion of Series A
  Preferred into
  Common Stock                 1,631,574         16     (892,652)        (9)                               (7)                   --

Conversion of 12% Bridge
  loan into Series B
  Preferred Stock                                                             500,000            5        495                   500

Warrants for the purchase
  of 12,877,162 shares
  of Common Stock                                                                                       2,186                 2,186

Issuance of Common Stock
  to officers & directors        500,000          5                                                        45                    50

Issuance of Series B
  Preferred Stock                                                             200,000            2        198                   200

Net Loss                                                                                                          (2,900)    (2,900)
                              ----------  ---------  -----------  --------- ---------  -----------  ---------  ---------  ---------
Balances at Oct. 31, 2006     11,359,849  $     114           --  $      --   700,000  $         7  $  64,367  $ (64,654) $    (166)
                              ==========  =========  ===========  ========= =========  ===========  =========  =========  =========
</TABLE>





The accompanying "Notes to Consolidated Financial Statements" form an integral
part of these statements.


                                       28
<PAGE>


                      Consolidated Statements of Cash Flows
                  For the years ended October 31, 2006 and 2005
                     DataMetrics Corporation and Subsidiary
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                     2006       2005
                                                                                   -------    -------
<S>                                                                                <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES
         Net Loss                                                                  $(2,900)   $  (583)
         Adjustments to Reconcile Net Loss to Net Cash Used
                in Operating Activities:
             Gain on Sale of Building                                                 (216)        --
             Depreciation                                                                4         55
             Write Down of Inventory                                                    --         64
             Expenses Paid with Equity Instruments                                     249         30
             Warrants Issued to Investors during restructuring                       2,186         --
             Amortization of Refinancing Costs                                          --        155
             Forgiveness of Payables                                                    --       (487)
             Directors Fee Paid with Common Stock                                       50         --
         Changes in Assets and Liabilities:
             Accounts Receivable                                                       190        397
             Inventories                                                               202       (474)
             Prepaid Expenses and Other Current Assets                                  51        (54)
             Accounts Payable                                                         (209)       (65)
             Accrued Expenses                                                         (140)       280
             Other Current Liabilities                                                  --        (20)
             Deferred Revenue                                                           --       (145)
                                                                                   -------    -------
NET CASH USED IN OPERATING ACTIVITIES                                                 (533)      (847)
                                                                                   -------    -------
CASH FLOWS FROM INVESTING ACTIVITIES
         Proceeds from Sale of Building                                              1,445         --
         Capital Expenditures for Equipment                                             (7)        --
                                                                                   -------    -------
NET CASH PROVIDED BY INVESTING ACTIVITIES                                            1,438         --
                                                                                   -------    -------

CASH FLOWS FROM FINANCING ACTIVITIES
         Proceeds from Issuance of Series B Preferred Stock                            200         --
         Proceeds from Notes Payable - Related Party                                   248        931
         Payments on Long-Term Debt                                                 (1,180)       (29)
                                                                                   -------    -------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES                                      (732)       902
                                                                                   -------    -------
NET INCREASE IN CASH                                                                   173         55
CASH, BEGINNING OF YEAR                                                                146         91
                                                                                   -------    -------
CASH, END OF YEAR                                                                  $   319    $   146
                                                                                   =======    =======
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash Paid During the Year for:
             Interest                                                              $    72    $   100
             Income Taxes                                                          $    --    $    --
         Noncash Investing and Financing Activities:
             Mortgage Payable Paid by Loan From Related Party                      $   751
             Expense Paid by Advance From Related Party                            $    --    $    30
             Restructuring Expenses Associated with Issuing Stock Warrants         $ 2,186    $    --
             Conversion of Long Term Debt and Related Accrued
                Interest into Common Stock                                         $ 3,081    $    --
             Conversion of Long Term Debt and Related Accrued
                Interest into Series B Preferred Stock                             $   500    $    --
             Conversion of Series A Preferred Stock into Common Stock              $   489    $    --
             Expenses Paid with the Issuance of Notes Payable                      $   249    $    --
             Payment of Short Term Bridge Loan by Issuing New Note Payable         $   200    $    --
             Forgiveness of Debt as part of the Sale of Building                   $    30    $    --
             Payment of Director's Fees by Issuing Common Stock                    $    50    $    --
</TABLE>

The accompanying "Notes to Consolidated Financial Statements" form an integral
part of these statements.


                                       29
<PAGE>


                   Notes to Consolidated Financial Statements
                            October 31, 2006 and 2005
                     DataMetrics Corporation and Subsidiary


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

DataMetrics Corporation, a Delaware corporation, is engaged primarily in the
design, development, manufacture and sale of high-speed, non-impact printers;
high-resolution, non-impact printer/plotters; and ruggedized computers and
computer workstations.

Revenue Recognition and Related Warranty Reserves

The Company recognizes revenue on the sale of product and parts when shipped.

The Company provides an accrual for future warranty costs at the time of revenue
recognition based upon prior years experience with actual warranty costs. The
warranty for the Company's products generally covers defects in material and
workmanship for a period of one year.

Accounts Receivable and Allowance for Doubtful Accounts

As is customary in the industry, the Company grants non-collateralized credit to
its clients, which include primarily the U.S. government and large multinational
corporations operating in a broad range of industries. Accounts receivable are
recorded at contract value. In order to mitigate its credit risk, the Company
continually evaluates the credit worthiness of its major commercial clients, and
maintains an allowance for potential losses within management expectations based
on past experience. Based on past experience and the client base, bad debts have
been extremely rare. Consequently, no allowance for doubtful accounts has been
provided. An account is written off only after deemed worthless by a specific
review of management. Since collection problem with receivables are rare, the
Company does not have a policy of charging interest on overdue receivables.

Inventories

Inventories are stated at the lower of cost (first in, first-out) or market.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is provided using the
straight-line method over the following estimated useful lives:

                Building and improvements                         39 years
                Furniture, fixtures and computer equipment      3 to 8 years
                Machinery and equipment                         3 to 8 years


                                       30
<PAGE>


                   Notes to Consolidated Financial Statements
                            October 31, 2006 and 2005
                     DataMetrics Corporation and Subsidiary


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


Basic and Diluted Net Loss per Common Share

Basic and diluted net loss per share are computed using the weighted-average
number of shares of common stock outstanding during the period. Potentially
dilutive securities have been excluded from the computation of diluted earnings
per share, as their effect is antidilutive. If the Company had reported net
income, diluted earnings per share would have included the shares used in the
computation of net loss per share plus common equivalent shares related to
12,935,000 and 57,498 outstanding options and warrants for the fiscal years 2006
and 2005 respectively.


Impairment of Long-Lived Assets

The Company evaluates long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying value of an asset may not be
recoverable. If the estimated future cash flows (non-discounted and without
interest charges) from the use of an asset are less than the carrying value, a
write-down would be recorded to reduce the related asset to its estimated fair
value.


Income Taxes

Income taxes are calculated using the liability method specified by Statement of
Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes".
SFAS No. 109 requires a company to recognize deferred tax liabilities and assets
for the expected future tax consequences of events that have been recognized in
a company's financial statements or tax returns. Under this method, deferred tax
liabilities and assets are determined based on the difference between the
financial statement carrying amounts and tax basis of assets and liabilities
using enacted tax rates in effect in the years in which the differences are
expected to reverse. Deferred tax assets are reduced by a valuation allowance to
the extent realization is uncertain. Because of the uncertainty that tax
benefits from net operating losses will be utilized, no deferred tax benefits
are included in income.


Statement of Cash Flows

For purposes of the statement of cash flows, the Company considers all highly
liquid investments purchased with a maturity of three months or less to be cash
equivalents.

Reverse Stock Split

In 2006, the Company authorized and executed a 1 for 30 reverse stock split on
all outstanding shares of common stock. For comparison purposes, all information
pertaining to common stock, related options and warrants and per share amounts
for 2005 has been restated to reflect the reverse split.


                                       31
<PAGE>


                   Notes to Consolidated Financial Statements
                            October 31, 2006 and 2005
                     DataMetrics Corporation and Subsidiary


Shipping and Handling Charges

The Company reports shipping and handling fees charged to customers as part of
net sales and the associated expense as part of cost of sales.

Use of Estimates

The preparation of financial statements in accordance with generally accepted
accounting principles requires the Company's management to make estimates and
assumptions. These estimates and assumptions affect the reported amounts of
assets, 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.


NOTE 2 - ACQUISITION OF SUBSIDIARY

In 2001, DataMetrics Corporation formed Peripheral Equipment Acquisition
Corporation (PEAC) to acquire 100% of the stock of Peripheral Equipment
Corporation. PEAC changed its name to Peripheral Equipment Corporation following
the merger of Peripheral Equipment Corporation into PEAC. Peripheral Equipment
Corporation has been inactive since 2002. Consequently, no income or expense
from this subsidiary is reported for the years ended October 31, 2006 and 2005.


NOTE 3 - INVENTORIES

Inventories consist of the following:

                                           000's
                                     -----------------
                                     FY 2006   FY 2005
                                     -------   -------
Inventories consist of the following:
(in thousands)

Inventory Parts and sub-assemblies       599       588
Work in Process                          106       383
Finished Goods                            --        --
Obsolete Inventory                     6,070     6,006
                                     -------   -------
Total Inventory                        6,775     6,977
Adjustment for Market Value           (6,070)   (6,070)
                                     -------   -------
Net Inventory                            705       907
                                     =======   =======


Inventory parts and sub-assemblies consist primarily of materials used by the
Company for existing and anticipated contracts and materials and finished
assemblies, which are held to satisfy spare parts requirements of the Company's
customers.


                                       32
<PAGE>


                   Notes to Consolidated Financial Statements
                            October 31, 2006 and 2005
                     DataMetrics Corporation and Subsidiary


NOTE 4 - WARRANTY RESERVES

The Company provides an accrual for future warranty costs at the time of revenue
recognition based upon the relationship of prior year sales to actual warranty
costs. The warranty for the Company's products generally covers defects in
material and workmanship.

The table below outlines warranty accruals and related costs for the fiscal
years ending October 31, 2006 and 2005 respectively.

                                            $000's
                                         ------------
                                         2006    2005
                                         ----    ----
Warranty Reserves, Beginning of Year      40      40
Warranty Expense                          10      10
                                         ----    ----
                                          50      50
Warranty Payments                         10      10
                                         ----    ----
Warranty Reserves, End of Year            40      40
                                         ====    ====


NOTE 5 - SHORT-TERM DEBT

Short-term debt at October 31, 2006 and 2005 consists of the following:

                                                                 000s
                                                            --------------
                                                            2006      2005
                                                            ----     -----
In December 1998, the Company closed a
private placement of approximately $3.45
million of 10% Subordinated Notes
originally due in December 2000.
Negotiations for settlement of this debt
are ongoing. The Notes are unsecured and
callable under certain conditions.                           141       141

In January 2001, the Company executed
loan documents with DMTR, LLC, a related
party whose partners are major
stockholders and members of the Board of
Directors of the Company. The loan,
secured by all assets of the Company,
accrues interest (payable monthly) at
the base rate of Citibank N.A. plus 100
basis points. The principal and
remaining interest were due in January
2003.                                                         --     2,900
                                                            ----     -----
   Total Short-Term Debt                                     141     3,041


                   33
<PAGE>


                   Notes to Consolidated Financial Statements
                            October 31, 2006 and 2005
                     DataMetrics Corporation and Subsidiary



NOTE 6 - NOTES AND ADVANCES PAYABLE - RELATED PARTIES


Notes and Advances Payable - Related Parties at October 31, 2006 and 2005
consist of the following:

                                                                 $000's
                                                         ---------------------
                                                         2006            2005
                                                         ----           ------
Advances from investors, structured to mature 30
days after advance with interest rates ranging
from 10 - 12%, collateralized by all assets of the
Company, subordinate to the rights of other
holders of long-term debt.                                 --            1,712


Notes Payable to investors; interest expense at
10% is paid monthly commencing January 31, 2007;
principal and unpaid interest is due in full in
December 2007. The note is secured by a first
priority lien on all Company assets.                      500               --
                                                         ----           ------
Total                                                    $500           $1,712
                                                         ====           ======


NOTE 7 - COMMON STOCK

Relevant information for the Company's common stock as of October 31, 2006 and
2005 is as follows:

                                                         000's except
                                                          par value
                                                     -------------------
                                                      2006        2005
                                                     ------      -------
Par Value per share                                     .01          .01
Authorized                                           70,000      800,000
Issued                                               11,360        1,070
Outstanding                                          11,360        1,070

Shares of Common Stock have been adjusted retroactively to reflect the reverse
stock split that occurred in April 2006. In addition to the split, the
stockholders approved an amendment to the Company's Certificate of Incorporation
to decrease the number of authorized shares of common stock to 70,000,000.

NOTE 8 - PREFERRED STOCK

The Company had 700,000 shares of Series `B' Preferred Stock with a par value of
$0.01 per share outstanding at October 31, 2006 (1,500,000 authorized). The
stock has a cumulative dividend of 4% per annum. The Company had 892,652 shares
of Series `A' Preferred Stock with a par value of $0.01 per share outstanding at
October 31, 2005(1,500,000 authorized). The stock has a cumulative dividend of
four percent per annum and is convertible into shares of the Company's common
stock at $.06 per share.

As part of the restructuring on December 30, 2005, the Series `A' Preferred
Stock was converted into Common Stock of the Company.


                                       34
<PAGE>


                   Notes to Consolidated Financial Statements
                            October 31, 2006 and 2005
                     DataMetrics Corporation and Subsidiary


NOTE 9 - STOCK BASED COMPENSATION

The Company periodically provides for the granting of options to employees,
directors, and others as compensation for services rendered. The terms,
including their exercise price and terms, are initiated solely at the discretion
of the Board of Directors. These options generally vest over a three year period
and shares are issued immediately with no restrictions upon exercise.

In 2006, the Board of Directors approved a Stock Incentive Plan to handle future
awards of stock options and other equity instruments to employees, Board
members, and key advisors performing services for the Company. The plan will be
administered by the Board of Directors. All terms of future awards will be
determined at issuance. The plan limits the number of shares of common stock
that can be issued in connection with the awards to 12.5% of fully diluted
common shares outstanding.

The fair value of the shares granted in 2006 was estimated on the date of grant
using the Black-Scholes option-pricing model with the following assumptions:

Risk free interest rate of 3 percent; dividend yield of 0%, expected life of 10
years, discount rate of 5.25% and volatility of 121%. No options or warrants
were granted in fiscal year 2005.

A summary of the status of the Company's stock options as of October 31, 2006
and 2005, and changes during those years are presented below: This summary
reflects the 1 for 30 reverse stock split that occurred in April 2006:

                                           2006                   2005
                                   --------------------   ---------------------
                                               Weighted                Weighted
                                                Average                Average
                                    Shares     Exercise    Shares      Exercise
                                     000s)      Price      (000s)       Price
                                   ---------   --------   ---------   ---------
Outstanding at Beginning of Year          58   $  39.30          58   $   39.30
Granted                            2,027,500   $   0.10           0          --
Exercised                                  0         --           0          --
Expired / Canceled                         0         --           0          --
Outstanding at the                 ---------   --------   ---------   ---------
     End of the Year               2,027,558   $   0.10          58   $   39.30
                                   =========   ========   =========   =========


                                       35
<PAGE>


                   Notes to Consolidated Financial Statements
                            October 31, 2006 and 2005
                     DataMetrics Corporation and Subsidiary



Significant option groups outstanding at October 31, 2006 and 2005 and related
weighted average life information are as follows:

                                                           2005
                                                         Number
                              Weighted                 Outstanding   Weighted
                              Average                      and       Average
             2006 Number     Remaining                    Fully     Remaining
  Exercise   Outstanding    Contractual    Exercise    Exercisable  Contractual
   Price        (000s)      Life (YEARS)    Price         (000s)    Life (YEARS)
 ---------   -----------    -----------    --------    -----------  -----------
   $42.00          50           5.05        $42.00          50             .05
    30.00           5           0.61         30.00           5            1.61
     1.65           3           1.00          1.65           3            2.00
     0.10       2,027          10.00

                -----                                  -----------
Total
 Outstanding    2,085                      Total            58
                =====                                  ===========
Total
 Exercisable      258                                       58


Weighted Average exercise price per option for the years ended October 31, 2006
and 2005 is $0.10 and $39.30, respectively.

A summary and weighted average grant date fair value of options issued for which
a vesting period applies is presented as follows:


                                          2006                    2005
                                  ----------------------   -------------------
                                               Weighted             Weighted
                                               Average               Average
                                   Shares     Grant Date   Shares   Grant Date
                                  (000's)     Fair Value   (000's)  Fair Value
                                  ------      ----------   ------   ----------
Nonvested at Beginning of Year         0        $  0.0       0           $0.0
Granted During the Year            1,827        $0.095       0           $0.0
Vested During the Year                 0        $  0.0       0           $0.0
Nonvested at End of Year           1,827        $0.095       0           $0.0

Total compensation costs related to nonvested awards not yet recognized were
$174,000 at October 31, 2006. These costs will be recognized over a three year
period. There were no unrecognized costs at October 31, 2005.


                                       36
<PAGE>


NOTE 10 - INCOME TAXES

A reconciliation between the Company's effective tax rate and the U.S. statutory
rate is as follows:

                                                         (dollars in thousands)
                                                            2006      2005
                                                          --------   -------
Statutory rate applied to pre-tax Loss                    (1,154.3)  (232.41)

Increase in income taxes  resulting  from  permanent         871.6        --
difference - value of warrants

Change in valuation allowance                                282.7    232.41
               Net Income Tax Benefit                           -0-      -0-


                                       37
<PAGE>


                   Notes to Consolidated Financial Statements
                            October 31, 2006 and 2005
                     DataMetrics Corporation and Subsidiary

The primary components of the Company's deferred tax assets and liabilities are
as follows:

                                                             000s
                                                     --------------------
                                                       2006        2005
                                                     --------    --------
Deferred Tax Assets:
Net Operating loss Carry-forwards                    $ 22,481    $ 22,197
 Accruals and Allowances, and Other Temporary
 Differences                                            3,340       3,342
                                                     --------    --------

Total Deferred Income Tax Asset                        25,821      25,539

Valuation Allowance for Deferred Income Tax Assets
                                                      (25,821)    (25,539)
                                                     --------    --------
Net Deferred Income Tax Assets                       $     --    $     --
                                                     ========    ========

Net operating loss carry-forwards of approximately $56 million for federal
income tax purposes will expire at various times and in varying amounts between
2010 and 2023.



The provision for income taxes is comprised of the following

                                                 000s
                                       -----------------------
                                          2006          2005
                                       ----------      -------
Current:
     Federal                           $       --      $    --
     State                                     --           --

Deferred
     Federal                                 (241)        (196)
     State                                    (41)         (33)

Increase in Valuation  Allowance
                                              282          229
Net                                    $      -0-      $   -0-


The increase in the valuation allowance is provided against all deferred tax
assets due to the uncertainty as to their future realization. Based upon
management's judgment and the losses incurred by the Company, the valuation
allowance represents 100% of the Company's net deferred income tax assets.


                                       38
<PAGE>


                   Notes to Consolidated Financial Statements
                            October 31, 2006 and 2005
                     DataMetrics Corporation and Subsidiary


NOTE 11 - CONCENTRATIONS OF CREDIT RISK AND MAJOR CUSTOMERS

Approximately 75% and 85% of the Company's sales during fiscal years 2006 and
2005, respectively, were to various U.S. government agencies under prime
contracts or to prime contractors having sales to such agencies. Export sales to
foreign customers amounted to $246,812 or 8% of total sales in fiscal year 2006.
Export sales to foreign customers amounted to $356,848 or 12% of sales in fiscal
year 2005. The Company's three largest customers accounted for 39%, 28% and 2%
of the Company's sales for the fiscal year ended October 31, 2006. Its three
largest customers accounted for 39%, 10% and 8% of the Company's sales for the
fiscal year ended October 31, 2005. The Company's three largest customers
accounted for 10%, 10% and 0% of account receivable in the fiscal year ended
October 31, 2006. The Company's three largest customers accounted for 81%, 0%
and 1% of account receivable at October 31, 2005.

The Company maintains its cash balances in one financial institution. The
balances are insured by the Federal Deposit Insurance Corporation up to
$100,000. The Company had $228,000 and $159,000 in uninsured cash balance at
October 31, 2006 and 2005, respectively.


NOTE 12 - RESTRUCTURING AND ISSUANCE OF WARRANTS

In 2005, the Company's Board of Directors approved a proposal from SG DMTI, LLC
("SGD"), an affiliated entity of two members of DMTR, LLC., who are also
principal shareholders of the Company. Pursuant to the proposal, SGD acquired
the Company's real property in Orlando for $1,500,000 effective November 1,
2005. SGD and the Company entered into a five-year triple net lease with an
annual rent obligation of approximately $150,000. In addition, the Company
consummated a series of other transactions, including reaching an agreement with
the holders of certain long-term debt and the holders of the Series A Preferred
Stock, to convert those debt and equity securities plus related accrued interest
expense into shares of common stock. The Company also issued Series B Preferred
Stock to other holders of long-term debt in exchange for canceling that debt.
The net effect of this restructuring was the elimination of approximately $4.8
million of long-term debt, notes payable and accrued interest and $250,000 of
accounts payable and other accrued expenses reported in the financial statements
during the year ended October 31, 2006. Additionally, the Company issued
Warrants to SGD to purchase 12,877,162 shares of common stock at $0.30 per
share. The Warrants expire in 10 years and were 100% vested upon issuance. The
value and costs of these Warrants were $2,186,000 and are reported as Other
Expense on the Consolidated Statement of Operations.

The warrants issued have been valued separately at fair value using the
Black-Scholes methodology. The fair value calculations relating to the warrants
assumed a volatility of approximately 121%, a life of 10 years, no dividends and
a discount rate of 5.25%.

NOTE 13 - GOING CONCERN

At October 31, 2006, the Company had a working capital deficit $173,000 and
total stockholders' deficit of $166,000 compared with a working capital deficit
of $4,545,000 and total stockholders' deficit of $3,282,000 in the prior year.
Even though the Company has incurred losses over the past several years, Both
the working capital and accumulated deficits have improved as a result of
actions Management has taken to ensure the Company will continue as a going
concern. The actions involve a major restructuring of the Company in 2006 which
effectively paid off or converted all long-term debt into equity and made
available the addition of more equity financing to the Company. Details of the
restructuring are described in Note 12. In addition, the Company has a current
backlog of $1,870,000.

Based on the past investments made by SG DMTI in DataMetrics Corporation,
Management believes SG DMTI to be a long term investor willing to provide
financial resources in the event of shortfalls while the Company invests in new
products and infrastructure. Consequently, Management believes that these
actions will enable the Company to continue as a going concern through October
31, 2007 and beyond.


                                       39
<PAGE>


NOTE 14 - COMMITMENTS

In November 2005, the Company sold its office and manufacturing facility to a
related party for $1,500,000. Concurrent with the sale, the Company leased the
facility back under a 5 year lease agreement, with an additional 5 year renewal
option. The lease requires monthly rentals of $12,500. The Company has agreed to
pay for all taxes, assessments, utilities, insurance, and maintenance costs.
Rent expense for the years ended October 31, 2006 and 2005 were $150,000 and $0
respectively. Future minimum rentals under this lease are as follows:

2007     $150,000
2008     $150,000
2009     $150,000
2010     $150,000

As permitted in the lease, the Company subleased a portion of the facility to an
independent Company beginning in February 2006. The lease term ends October
2010. The sublease requires monthly rentals of $4,688. Rental income reported
for the years ended October 31, 2006 and 2005 were $42,199 and $0 respectively.
Future minimum rental income under the sublease are as follows:

2007     $56,266
2008     $56,266
2009     $56,266
2010     $56,266


NOTE 15 - SUBSEQUENT EVENT

On December 6, 2006, the Company issued SG DMTI 300,000 shares of Series B
Preferred Stock for $300,000, which represent the final shares of Series B
Preferred Stock issuable under the Series B Preferred Stock and Warrant Purchase
Agreement dated December 30, 2005.

On February 8, 2007 the Company amended the SGD warrant to correct an error of
omission reflecting that the intent of the agreement signed December 30, 2005
was to be $.01 post-split, not pre-split as described in the agreement.
Accordingly, the exercise price of the 12,877,162 warrants changed from $0.30 to
$0.01 per share effective February 8, 2007.

On February 8, 2007 SGD signed an agreement extending the maturity of its
Secured Promissory Note from December 31, 2006 to December 31, 2007.

On February 8, 2007 Seth Lukash was elected to serve on the Company's Board of
Directors.


                                       40
<PAGE>


SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this Form 10-KSB to be signed on its behalf by its
duly authorized representatives.

                                                  DATAMETRICS CORPORATION
                                                  ------------------------


                                                  /s/ Daniel Bertram
                                                  Chief Executive Officer


                                                  /s/ Edward Kroning
                                                  Chief Financial Officer




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

Name                              Title                       Date
-------------------       ------------------------     -----------------


/s/ Daniel Bertram        Director                     February 12, 2007
-------------------
    Daniel Bertram

/s/ Gary Herman           Director                     February 12, 2007
-------------------
    Gary Herman

/s/ Michael Rapisand      Director                     February 12, 2007
-------------------
    Michael Rapisand

/s/ Thomas Leonardis      Director                     February 12, 2007
-------------------
    Thomas Leonardis

/s/ Seth Lukash           Director                     February 12, 2007
-------------------
    Seth Lukash