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

                         FORM 10-K

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

For the Fiscal Year                  Commission File
Ended March 31, 1998                 Number 0-7445

                  DATRON SYSTEMS INCORPORATED
-----------------------------------------------------
(Exact name of registrant as specified in its charter)

   Delaware                                95-2582922
------------------------          --------------------------
(State of Incorporation)         (I.R.S. Employer Ident. No.)

304 Enterprise Street, Escondido, California           92029-1297
--------------------------------------------           ----------
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code:  (760) 747-3734

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

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

Common Stock, par value $0.01
-----------------------------
(Title of Class)

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

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

The aggregate market value of the voting stock (which consists solely
of shares of Common Stock) held by non-affiliates of the registrant as
of June 19, 1998 was $19.5 million, based on the closing price on that
date on the Nasdaq Stock Market.

The number of shares outstanding of each of the registrant's classes
of common stock as of June 19, 1998 was:  Common Stock, par value
$0.01 --  2,679,284 shares.

DOCUMENTS INCORPORATED BY REFERENCE

1.   Certain portions of registrant's Annual Proxy Statement to be
     filed pursuant to Regulation 14A of the Securities Exchange Act
     of 1934, as amended, in connection with the Annual Meeting of
     Stockholders of the registrant to be held August 5, 1998 are
     incorporated by reference into Part III of this report.

2.   Registrant's Annual Report of its Employee Stock Purchase Plan
     for the fiscal year ended March 31, 1998 is incorporated by
     reference into Exhibit 99.1.

3.   Items contained in the above-referenced documents that are not
     specifically incorporated by reference are not included in this
     report.
<PAGE>

                        DATRON SYSTEMS INCORPORATED
                               FORM 10-K
                             FISCAL YEAR 1998

                            TABLE OF CONTENTS
PART I                                                    1
     Item 1. Business                                     1
     Item 2. Properties                                   7
     Item 3. Legal Proceedings                            8
     Item 4. Submission of Matters to a Vote of Security
               Holders                                    8
PART II                                                   9
     Item 5. Market for Registrant's Common Equity and
               Related Stockholder Matters                9
     Item 6. Selected Financial Data                      9
     Item 7. Management's Discussion And Analysis Of     
               Financial Condition And Results Of
               Operations                                 9
     Item 8. Financial Statements And Supplemental        
               Data                                       9
     Item 9. Changes in and Disagreements with Accountants
               on Accounting and Financial Disclosure     9
PART III                                                 10
     Item 10. Directors and Executive Officers of the
               Registrant                                10
     Item 11. Executive Compensation                     10
     Item 12. Security Ownership of Certain Beneficial
               Owners and Management                     10
     Item 13. Certain Relationships and Related
              Transactions                               10
PART IV                                                  11
     Item 14. Exhibits, Financial Statement Schedules, and
                Reports on Form 8-K                      11
     
<PAGE> 1
                                PART I
                                                           
Item 1.  Business.

Company Overview

Datron Systems Incorporated and its wholly owned subsidiaries (the
"Company") provide specialized satellite communication products and
systems and high quality radio communication products and services to
worldwide private and governmental markets and to several United
States Government customers, including the Department of Defense
("DoD").  The Company was founded in 1969 and became an independent
publicly held corporation in 1985.

The Company operates its business through two subsidiaries.  In
October 1985, the Company acquired its wholly owned subsidiary, Datron
World Communications Inc., formerly known as Trans World
Communications, Inc. ("DWC").  DWC conducts the Company's
Communication Products and Services business.  In June 1990, the
Company acquired its wholly owned subsidiary, Datron/Transco Inc.,
formerly known as Transco Communications Inc. ("D/T").  D/T conducts
the Company's Antenna and Imaging Systems business.  In September
1993, the Company formed a wholly owned subsidiary, Datron
Telecommunications International Inc., to provide private
international telecommunication systems.  Datron Telecommunications
was merged into DWC on March 31, 1995.  The Company discontinued its
private international telecommunications business in fiscal 1996.

In March 1996, D/T consolidated its image processing division in San
Jose, California, which was acquired in August 1994, with its remote
sensing earth station business in Simi Valley, California.  In
connection with that consolidation, the Company recorded a
restructuring charge of $1,421,000 ($855,000, or $0.32 per share,
after taxes).

Investment Considerations

This report contains certain forward-looking statements that may be
used in evaluating the opportunities and risks associated with future
Company performance.  However, actual results could differ materially
from those described in the forward-looking statements due to, among
other things, the following factors:

Dependence on Sales to Foreign Customers
----------------------------------------
Sales to foreign customers accounted for 55%, 49% and 58% of
consolidated sales in fiscal 1998, 1997 and 1996, respectively.  Sales
of Communication Products and Services have been even more highly
concentrated with foreign customers:  88%, 94% and 93% in fiscal 1998,
1997 and 1996, respectively.  Sales to foreign customers often involve
risk because of political and economic uncertainties in many foreign
countries, which can result in funding delays or inability of those
customers to obtain financing for anticipated purchases of Company
products.  As a result, it is often more difficult to predict order
bookings from foreign customers than it is from domestic customers.
In addition, foreign political unrest, war and economic downturns
could have a significant negative impact on future Company sales and
income.

Reliance on Large Orders from a Small Number of Customers
---------------------------------------------------------
A substantial percentage of sales may be heavily concentrated with a
small number of customers.  Within the Communication Products and
Services business segment, the same single customer accounted for 24%,
30% and 39% of that segment's sales in fiscal 1998, 1997 and 1996,
respectively.  Although sales in the Antenna and Imaging Systems
business segment have not been so heavily concentrated with one
customer, it is common for a small number of customers to each account
for approximately 5% to 15% of that segment's sales each year.
Because it is unusual to receive large orders from the same customer
in successive years, it is necessary to find new customers each year
to replace the previous year's sales.  There can be no assurance that
the Company will be able to do so in the future.  In addition,
reliance on large orders can result in financial performance varying
widely from quarter-to-quarter, and also carries contract cancellation
risk that can more adversely affect Company performance than it would
if the Company depended on small orders from a large number of
customers.

<PAGE> 2
Timely Development and Customer Acceptance of New Products
----------------------------------------------------------
The Company's products are subject to obsolescence.  To prevent this
from occurring, the Company has an ongoing new product development
program to keep the technologies employed in its products current and
to introduce new products that meet changing market requirements.
Lack of timely development of new technologies and new products, or
lack of acceptance of new products by the Company's customers could
have a negative impact on future sales and income.

Fixed Price Development Contracts
---------------------------------
The Company often accepts fixed-price contracts that require custom
engineering, custom software or the development of new features and
capabilities. Such contracts usually include the sale of standard
products and components, but not always.  Although engineering cost
estimates are prepared as a basis for quoting such contracts, there
can be no assurance the Company will be able to develop the required
features, capabilities or software within established cost budgets.
Should development costs exceed established budgets, the result could
have a material adverse effect on earnings.

New Consumer Product and Market
-------------------------------
In November 1995, the Company introduced its first consumer product, a
mobile direct broadcast satellite ("DBS") television reception system
for recreational vehicles, buses and long-haul trucks.  This product
represents a departure from the Company's historical business that has
focused on large contracts, relatively small numbers of deliverables
and customers that are primarily government agencies or large
corporations.  Several additional DBS antenna products have
subsequently been introduced, including a marine product line and
antenna systems for large business jets and commercial jets.  A
production line has been established to meet expected demand for these
products.  In fiscal 1997, the Company determined its method of using
exclusive national distributors to sell these products was not
effective, and spent the latter part of that year unwinding the
distribution agreements, clearing the distribution pipeline and
establishing a factory direct to dealer distribution system.  The
Company does not have previous experience in building or selling a
consumer product.  Although it believes it can produce DBS products in
required quantities, there can be no assurance it will be able to do
so.  Also, although the Company believes its new methods of
distribution will improve sales, there can be no assurance they will
or that consumer demand for its DBS products will be as large as the
Company anticipates.

Competitors
-----------
The Company has competitors for all the products and services it
offers.  The level of competition varies by product line and ranges
from many competitors for its radio products to a few competitors for
its tracking antenna products.  The Company could be adversely
affected by competitors' development of new or different products that
may provide or be perceived as providing greater value than the
Company's products. The Company may or may not be successful in
developing competing products.   Many of the Company's competitors and
potential competitors have substantially greater resources than the
Company and may be more successful in developing, producing and
marketing their products.  In such case, the Company may experience
substantial competition, which could have a material adverse effect on
the Company's business.

<PAGE> 3
Declining Sales for the U.S. Department of Defense
--------------------------------------------------
In fiscal 1993, the Company restructured its operations in response to
declining DoD spending.  Sales for the DoD have declined from $31.9
million in fiscal 1993 to $12.1 million in fiscal 1998, primarily due
to completion of long-term DoD contracts that have not been replaced
with new orders.  The Company believes sales for the DoD may continue
to decline in the future, although at a less severe rate than in
recent years.  However, those sales are still expected to represent a
significant portion of the Company's consolidated sales.  There can be
no assurance that new DoD orders will be received or that the orders
received will be sufficient to meet the Company's sales objectives.

General

The Company operates in two business segments:  Antenna and Imaging
Systems, which are supplied by D/T, and Communication Products and
Services, which are supplied by DWC.

Antenna and Imaging Systems
---------------------------
This segment designs and manufactures satellite communication
terminals, telemetry tracking and control systems, servo control
products and high-quality microwave antennas.  In fiscal 1994, because
of a continuing decline in defense business, the Company began
pursuing additional markets for its products.  The primary such market
has been remote sensing satellite earth stations, and the Company now
provides earth station hardware, software and image processing systems
to that market.  In fiscal 1996, the Company introduced a mobile
satellite television reception system for recreational vehicles, buses
and long-haul trucks.  That system was the Company's first consumer
product.

The business of this segment was adversely affected in fiscal 1996 by
the cancellation of an $8.8 million remote sensing system order and by
lower than anticipated order bookings and sales of remote sensing
systems.  It was these events that led to the consolidation of the
remote sensing business in the fourth fiscal quarter ended March 31,
1996.

In fiscal 1998, low gross margins in this business segment resulting
from cost overruns primarily due to inadequate engineering were
responsible for a $2.5 million operating loss.  Because of this
problem, several new managers and engineers were hired, and the
subsidiary president was replaced.

Descriptions of the major product areas follow:

Satellite Communication ("SATCOM") Terminals.  The Company is a
supplier of satellite communication antenna systems and subsystems
used to receive defense-related data and data transmitted through
satellites of other government and commercial organizations.  The
stabilizing and automatic tracking capabilities of its antenna systems
make them particularly well suited for use on ships, motor vehicles
and other mobile platforms.  Over the past two decades, the Company
has been a prime contractor and a subcontractor for shipboard SATCOM
antenna systems used by the U.S. Navy.  More recently, the Company has
been developing airborne SATCOM antenna systems for the U.S. Air
Force.

The United States military has developed a SATCOM system known as
MILSTAR. The Company has been a subcontractor of Raytheon in the
Navy's segment of the MILSTAR program known as NESP.  Under the
subcontract, the Company developed a pedestal for shipboard antennas
that supports and positions the antenna in response to external
commands. This program was substantially concluded in fiscal 1997.

<PAGE> 4
Telemetry Tracking and Control ("TT&C") Systems.  TT&C systems monitor
and control vehicles such as satellites, missiles and aircraft.  They
receive radio telemetry signals containing vehicle status information,
engage in automatic tracking of the vehicle so contact is maintained
and transmit command signals so vehicle control can be established and
maintained.

Servo Control Products.  The Company's involvement with SATCOM and
TT&C markets has required a high capability in radio frequency
electronics, antenna engineering, servo controls and large precision
mechanical systems.  The Company has developed a line of pedestals and
rotators, servo power amplifiers and positioning control units that
are often used as building blocks for specific customer requirements.

Microwave Products.  The Company designs and manufactures broad
bandwidth microwave antennas for the aerospace industry that are used
on high performance aircraft, missiles and space launch vehicles.

Remote Sensing Satellite ("RSS") Systems.  The RSS systems market is a
subset of the broader earth observation market.  It involves using
several types of satellites containing optical and radar sensors in
conjunction with specific earth acquisition and data processing
equipment to produce images.  The images are in the form of hard copy
and/or digital data that allow the user to study changes on the
earth's surface or environment.  Applications include locating
minerals, updating maps, forecasting weather, monitoring crops,
studying the environment, monitoring earth resources and gathering
economic or military intelligence.

The Company has supplied antennas for RSS purposes for several years.
In fiscal 1994, the Company began to focus more attention and
resources on the RSS systems market.  As part of this strategy, the
Company formed a joint venture with International Imaging Systems,
Inc. ("I2S"), a privately-held company in Milpitas, California, to
provide complete RSS systems for the international marketplace.  I2S's
expertise was in the fields of digital image processing and
photogrammetry.  The Company acquired I2S in fiscal 1995 and now
offers its customers complete RSS earth stations, including image
processing capability.  In fiscal 1998, RSS sales accounted for 33% of
the Antenna and Imaging Systems' sales compared with 35% of its sales
in fiscal 1997.

Mobile DBS Television Systems.  The Company introduced its first DBS
antenna product in fiscal 1996.  That product allows a recreational
vehicle owner or trucker to receive DBS television from a parked
vehicle at the touch of a button by automatically locating the
satellite.  During fiscal 1997, the Company introduced several
additional DBS antenna products including systems for boats at anchor,
boats underway, RVs and trucks on the open road, and satellite
telephone service through a dual frequency feed that operates
simultaneously with the television system.  Also during fiscal 1997,
the Company was first to demonstrate live DBS television on a
commercial airliner, and in fiscal 1998, was first to obtain Federal
Aviation Administration certification of an airborne DBS system
designed for large business jets.

Customers and Marketing

Sales of Antenna and Imaging Systems' products and services have
historically been concentrated with the DoD, which accounted for 31%
of this segment's fiscal 1998 sales and 47% of its fiscal 1997 sales.
Marketing and sales activities for its DoD customers and other non-
defense governmental agencies are conducted by internal sales and
engineering personnel.  Most customers for the RSS systems business
are foreign government space and communications agencies.  Marketing
and sales activities for those products are conducted through
independent sales representatives in Europe, South America and Asia.

Introduction of mobile DBS television systems required the
establishment of new distribution methods to sell these consumer
products.  The Company's initial approach of using exclusive national
distributors was not effective and the Company is now selling its DBS
products direct to dealers and original equipment manufacturers, as
well as through select non exclusive distributors and agents.  Company
employees provide sales and marketing support and installation
training for the dealers.

<PAGE> 5
Manufacturing, Assembly and Sources of Supply

Products for the Company's Antenna and Imaging Systems segment are
designed, manufactured and assembled at facilities in Simi Valley,
California.  The Company purchases certain components and subsystems
from subcontractors and vendors.  Some of these items are standard off-
the-shelf components and others are fabricated to Company
specifications.  The Company also fabricates electronic assemblies
from purchased electronic components and circuit boards.  A production
line for DBS antenna products was established in fiscal 1996 and
expanded in fiscal 1997.

The Company is rarely dependent on a single source of supply for
materials, parts or components.  However, once a subcontractor is
selected to provide components built to Company specifications, the
Company is often dependent on that subcontractor.  Failure of the
subcontractor to perform could jeopardize the ability of the Company
to meet its required delivery schedules.

Communication Products and Services
-----------------------------------
This business segment designs, manufactures and distributes high
frequency ("HF") radios and accessories for over-the-horizon radio
communications and very high frequency ("VHF") radios and accessories
for line-of-sight communications.  The Company's HF radios operate in
the frequency range of 1.6 to 30 megahertz, where radio waves
generated from the transmitter reflect off the ionosphere back to the
point of receipt on earth.  The Company's VHF radio products, which
operate in the frequency range of 30 to 88 megahertz, provide users
high-quality transmission for line-of-sight communications.

In addition to its standard radios, the Company offers frequency
hopping and encryption options to its VHF product line and automatic
link establishment options to its HF product line.  Frequency hopping
is a technique that prevents interruption or interception of radio
signals by changing, at very high speeds, the frequency at which they
are transmitted.  This technology utilizes advanced synchronized
mechanisms that ensure all radios in a network are synchronized and
frequency hop at the same time.  Automatic link establishment, when
used in HF radio equipment, automatically determines the best
available frequencies on which to communicate.

The Company offers a wide range of accessory products to complement
the HF and VHF product lines.  These accessory products include
antennas and antenna tuners, power sources, amplifiers, remote control
systems, modems, data communications equipment and audio accessories.

A substantial percentage of sales of Communication Products and
Services are often concentrated with a small number of customers.  In
fiscal 1998, two Asian customers accounted for 24% and 10% of this
segment's sales and a South American customer accounted for 12% of its
sales.  In fiscal 1997, the same two Asian customers accounted for 30%
and 24% of this segment's sales.  And, in fiscal 1996, one of the same
Asian customers accounted for 39% of this segment's sales.  Because it
is unusual to receive large orders from the same customer in
successive years, it is often necessary to find new customers each
year to replace the previous year's sales.  To minimize the impact
fluctuating sales may have on the Company's operations, temporary
employees are used whenever possible.

The Federal Communications Commission granted the Company a license to
carry international telephone traffic in May 1993 and the Company
began carrying international telephone traffic to customers in Ukraine
and Latvia in September 1993 and to a customer in Russia during fiscal
1995.  Also in fiscal 1995, the Company established an uplink facility
in California to carry satellite paging traffic for customers in the
United States.  However, in fiscal 1996, the Company determined that
significantly larger resources would be required to compete
successfully in these markets and that competition would likely drive
margins to an unacceptably low level.  Consequently, the Company
withdrew from these markets during fiscal 1996.

<PAGE> 6
Customers and Marketing

Sales to foreign customers accounted for 88% of this segment's fiscal
1998 sales and 94% of the segment's fiscal 1997 sales.  Most of its
international customers are agencies of foreign governments that
perform civil defense, paramilitary and military operations, and
foreign governmental agencies that perform civilian tasks unrelated to
military operations, such as civil aviation agencies, drug
interdiction agencies, embassies and disaster relief organizations.
Domestic customers are primarily various agencies of the United States
Government, including the Drug Enforcement Administration and
Department of State.

The Company's products are sold in over 80 countries by a network of
independent sales and service representatives, most of whom are non-
exclusive sales agents of the Company.  These representatives provide
both pre-sale and post-sale support.  Many of them operate service
facilities that offer both warranty and long-term maintenance of the
Company's equipment.  Sales are usually denominated in U.S. Dollars.

In addition to direct sales, the Company sometimes sells its radio
products to international suppliers of complementary equipment.  It
also sometimes licenses the local manufacturing of its equipment to
customers in certain countries.  The latter practice is usually
followed where local regulations discourage the importation of
complete units.

Manufacturing, Assembly and Sources of Supply

Communication products are designed and manufactured at facilities in
Escondido, California.  Company engineers work closely with
manufacturing and marketing personnel to improve existing designs and
to introduce new products that meet the ever changing demands of the
marketplace.  A new family of tactical VHF radios was introduced in
fiscal 1998 and a new family of handheld radios was introduced in
fiscal 1997.  The Company purchases certain electronic components,
circuit boards and fabricated metal parts, and painting and silk
screening services.  Other than when it licenses overseas
manufacturing for a particular local market, the Company performs most
other manufacturing functions necessary for the production of its
products.

The Company is rarely dependent on any single source of supply for the
manufacture of its communication products.  Although only one supplier
may be used for certain parts, the Company believes that multiple
sources are usually available.


Backlog

Order backlog at March 31 was as follows:

                                          1998          1997
                                     -----------   -----------
Antenna and Imaging Systems          $19,949,000   $13,086,000
Communication Products and Services    5,494,000     4,862,000
                                     -----------   -----------
Total                                $25,443,000   $17,948,000
                                     ===========   ===========

The 52% increase in Antenna and Imaging Systems backlog at March 31,
1998 compared with March 31, 1997 was primarily due to higher bookings
of remote sensing systems and antennas for the DoD and other non-
defense governmental customers.

The 13% increase in Communication Products and services backlog at
March 31, 1998 compared with March 31, 1997 was due to improved order
bookings in the third and fourth quarters of fiscal 1998.

<PAGE> 7
Competition

The Company competes in each of its business segments with several
companies.  Depending on the specific product, these companies may be
similar in size to the Company or may be large diversified companies
which at times may also be customers of the Company.  The Company
believes its major competitive advantages are the quality of its
products, their cost effective designs, timeliness of delivery, ease
of use and easy serviceability.

Patents, Trademarks, Copyrights and Licenses

The Company has applied for several patents related to its DBS
products.  However, the Company believes that patents are not a
significant factor in the Company's business and that the success of
the Company depends primarily on the technical competence and
managerial and marketing ability of the Company's personnel.

DATRON(R) and design, TRANSWORLD(R),  I2S(R), PRI2SM(R), OPEN 2000(R),
DBS-2000(R), DBS-3000(R), DBS-4000(R) and VI2STA(R) are registered
trademarks of the Company.

The Company has obtained licenses for the VHF frequency hopping
technology and for the automatic link establishment technology used in
the Company's VHF and HF radio products, respectively.

Employees

The Company employed approximately 319 employees at the end of fiscal
1998 compared with approximately 309 employees at the end of fiscal
1997.  The 3% increase in employment during fiscal 1998 was primarily
due to a similar increase in sales for fiscal 1998.

None of the Company's employees are covered by a collective bargaining
agreement and the Company considers its employee relations to be good.

Financial Information

Additional financial information concerning segment, geographic and
major customers is included in Note 10 of the Notes to Consolidated
Financial Statements.  See Part II, Item 8.

Item 2.  Properties.

DWC leases approximately 63,000 square feet of office, engineering and
manufacturing space in Escondido, California.  The lease term expires
on January 31, 1999 with two renewal options of five years each.  DWC
and the Company's corporate headquarters operate from that facility.
In March 1998, the Company signed a new ten-year lease for a 70,000
square foot production and office facility located in Vista,
California.  That lease commences February 1, 1999 and contains a
renewal option of five years.  The Vista facility will replace the
Escondido facility.

D/T owns a 110,000 square foot office, engineering and manufacturing
building located on a nine-acre site in Simi Valley, California.  D/T
conducts operations from that facility.

D/T leases 139,000 square feet of office, engineering and
manufacturing space in Camarillo, California.  The term of the lease
is seven years expiring June 28, 1998.  In June 1993, the Company
moved from that facility as part of the consolidation of D/T.  The
Company has sublet 108,100 square feet of the facility to three
subtenants whose subleases expire on June 28, 1998.  D/T also leases a
20,000 square foot office, engineering and manufacturing facility in
San Jose, California.  That lease term expires March 31, 1999.  The
Company has sublet that facility to a subtenant whose sublease expires
March 31, 1999.

<PAGE> 8
Information with respect to obligations for lease rentals is included
in Note 9 of the Notes to Consolidated Financial Statements.  See Part
II, Item 8.  The Company considers its properties to be suitable and
adequate for its present needs.  The facilities in Escondido and Simi
Valley are being fully utilized.  The facility in Camarillo is not
needed and a portion of it has been sublet.  The facility in San Jose
is not needed and has been sublet.

Item 3.  Legal Proceedings.

The Company is not involved in any litigation that is expected to have
a material effect on the Company's business or consolidated financial
position.

In August 1992, Trans World Communications, Inc. ("Trans World"), a
wholly owned subsidiary of the Company and which was renamed Datron
World Communications Inc. on March 31, 1995, was named as defendant in
a lawsuit filed by ATACS Corporation ("ATACS") and AIRTACS Corporation
("AIRTACS") relating to a contract to provide radio communication
shelters.  ATACS and AIRTACS contend that Trans World entered into an
agreement to team with them on the contract and then wrongfully failed
to use them as subcontractors.  They seek damages in excess of
$2,000,000.  In a May 28, 1997 ruling, the court found Trans World in
breach of a teaming agreement but was not able to determine what
damages, if any, were incurred by ATACS and AIRTACS.  The court
ordered both parties to submit supplemental findings to support their
positions regarding damages.  On September 3, 1997, the court awarded
ATACS and AIRTACS one dollar ($1.00) in damages.  ATACS and AIRTACS
have appealed the court's decision.  The Company has taken a cross
appeal with respect to the issue of whether the Company was in breach
of any teaming agreement.  The Company believes final resolution of
this matter will not materially affect the consolidated financial
position of the Company.

Item 4.  Submission of Matters to a Vote of Security Holders.

None.

Executive Officers of the Registrant

David A. Derby, 56, has been President and Chief Executive Officer of
the Company since May 1982, and Chairman of the Board since April
1998.

William L. Stephan, 52, has been Vice President, Chief Financial
Officer and Treasurer of the Company since November 1993.

Executive officers are elected by and serve at the discretion of the
Board of Directors.  There are no family relationships among directors
or executive officers of the Company.

<PAGE> 9
PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder
Matters.

Information required by Item 5 of Form 10-K is incorporated herein by
reference from the information contained in the section captioned
"Common Stock Activity" on the inside back cover of the Annual Report,
that portion of which is attached hereto as Exhibit 13.

Item 6.  Selected Financial Data.

Information required by Item 6 of Form 10-K is incorporated herein by
reference from the information contained in the section captioned
"Datron Systems Incorporated Selected Financial Data" on the inside
front cover of the Annual Report, that portion of which is attached
hereto as Exhibit 13.

Item 7.  Management's Discussion and Analysis of Financial Condition
and Results of Operations.

Information required by Item 7 of Form 10-K is incorporated herein by
reference from the information contained in the section captioned
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" on pages 6 through 9 of the Annual Report, that
portion of which is attached hereto as Exhibit 13.

Item 8.  Financial Statements and Supplementary Data.

Information required by Item 8 of Form 10-K is incorporated herein by
reference from the consolidated financial statements of the Company at
March 31, 1998 and 1997 and for each of the three years in the period
ended March 31, 1998 and the Independent Auditors' Report appearing on
pages 10 through 24 of the Annual Report, that portion of which is
attached hereto as Exhibit 13.

Item 9.  Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.

During the two most recent fiscal years ended March 31, 1998, there
has not been a change in accountants or a reported disagreement with
accountants on any matter of accounting principles or practices or
financial statement disclosure.

<PAGE> 10
PART III

Item 10.  Directors and Executive Officers of the Registrant.

Information required by Item 10 of Form 10-K with respect to directors
is incorporated herein by reference from the information contained in
the section captioned "Nomination and Election of Directors" in the
Company's Notice of Annual Meeting of Stockholders to be Held
Wednesday, August 5, 1998 at 11:00 A.M. and Proxy Statement ("Proxy
Statement"), a copy of which is to be filed as Exhibit 22 within 120
days of the end of the Registrant's fiscal year.

Information required by Item 10 of Form 10-K with respect to executive
officers is set forth in Part I of this report under the section
captioned "Executive Officers of the Registrant," pursuant to
instruction 3 to paragraph (b) of Item 401 of Regulation S-K.

Item 11.  Executive Compensation.

Information required by Item 11 of Form 10-K is incorporated herein by
reference from the information contained in the section captioned
"Executive Compensation" in the Proxy Statement, a copy of which is to
be filed as Exhibit 22 within 120 days of the end of the Registrant's
fiscal year.

Item 12.  Security Ownership of Certain Beneficial Owners and
Management.

Information required by Item 12 of Form 10-K is incorporated herein by
reference from the information contained in the section captioned
"Security Ownership of Certain Beneficial Owners and Management" in
the Proxy Statement, a copy of which is to be filed as Exhibit 22
within 120 days of the end of the Registrant's fiscal year.

Item 13.  Certain Relationships and Related Transactions.

Information required by Item 13 of Form 10-K is incorporated herein by
reference from the information contained in the section captioned
"Executive Compensation" in the Proxy Statement, a copy of which is to
be filed as Exhibit 22 within 120 days of the end of the Registrant's
fiscal year.

<PAGE> 11
PART IV
Item 14.  Exhibits, Financial Statement Schedules and Reports on Form
8-K.

(a)    The following documents are filed as part of this report:

                                                       Page in 1998
                                                       Annual Report
                                                       ------------
     (1)  Financial Statements:

     Consolidated Balance Sheets at March 31, 1998 and 1997      10

     Consolidated Statements of Operations for the Years Ended
     March 31, 1998, 1997 and 1996                               11

     Consolidated Statements of  Stockholders' Equity for
     the Years Ended March 31, 1998, 1997 and 1996            12-13

     Consolidated Statements of Cash Flows for the Years Ended
     March 31, 1998, 1997 and 1996                               14

     Notes to Consolidated Financial Statements               15-23

     Independent Auditors' Report                                24


     (2)   Financial Statement Schedules:                      Page
                                                               ----

     Independent Auditors' Report on Financial Statement 
        Schedule                                               S-1

     Schedule II.  Valuation and Qualifying Accounts           S-2

     All other schedules for which provision is made in the applicable
     accounting regulations of the Securities and Exchange Commission
     are not required under the related instructions or are
     inapplicable, and therefore have been omitted.
     
(b)   No reports on Form 8-K were filed during the last quarter of the
period covered by this report.

(c)    Exhibits.  The following exhibits are filed as part of this
report:

Exhibit
Number                Description
------                -----------
3.1    Certificate of Incorporation.<F1>
     
3.2    Bylaws.<F1>
     
4.15   Stockholder Rights Agreement dated August 21, 1990.<F7>
     
4.16   First Amendment to Stockholder Rights Agreement dated as
       of October 29, 1993.<F8>
     
<PAGE> 12
10.5   1988 Key Employee Stock Purchase Plan.<F2>
     
10.8   Employment Agreement between the Registrant and David A.
       Derby. <F3>
     
10.10  Employment Agreement between the Registrant and Richard
       W. Pershing.<F3>
     
10.31  Lease of Trans World Communications, Inc. facilities at
       298, 302 and 304 Enterprise Street, Escondido, California.<F4>
     
10.32  Sublease of Transco Products, Inc. facilities at 1001
       Flynn Rd., Camarillo, California.<F5>
     
10.33  Guaranty of Sublease for Transco Products, Inc.
       facilities.<F5>
     
10.34  Consent and Nondisturbance Agreement.<F5>
     
10.36  Amended and Restated 1985 Stock Option Plan.<F6>
     
10.37  First Amendment to Trans World Communications, Inc. Lease
       Agreement dated January 15, 1993.<F9>
     
10.38  Contribution and Assumption Agreement between Datron
       Systems Incorporated and Datron/Transco Inc. dated June 30,
       1993.<F9>
      
10.39  Datron Systems Incorporated Profit Sharing and Savings
       Plan (Amended and Restated as of March 1, 1994).<F9>
                
10.40  Trans World Communications, Inc. 401(k) Plan, as amended
       effective April 1, 1994.<F9>
     
10.46  1995 Stock Option Plan.<F10>
     
10.47  Second Amendment to Trans World Communications, Inc.
       Lease Agreement dated February 8, 1995.<F10>
     
10.48  Agreement and Plan of Merger between Datron
       Telecommunications International Inc. and Trans World
       Communications, Inc. dated as of March 14, 1995.<F10>
     
10.53  Datron Systems Incorporated Supplemental Executive Profit
       Sharing Plan (Effective as of April 1, 1994).<F11>
     
10.54  Third Amendment to Trans World Communications, Inc. Lease
       Agreement dated May 1, 1995.<F11>
     
10.57  First Amendment of the Datron Systems Incorporated Profit
       Sharing and Savings Plan (Amended and Restated as of March 1,
       1994).<F12>
     
10.58  Datron Systems Incorporated Employee Stock Purchase Plan
       (Adopted Effective July 1, 1997).<F12>
     
10.59  Amended and Restated Credit Agreement and Note between
       the Registrant and Union Bank of California dated August 8,
       1997.<F13>
     
<PAGE> 13
10.60  Waiver and First Amendment to Amended and Restated Credit
       Agreement and Note between Registrant and Union Bank of
       California dated February 10, 1998.
     
10.61  Datron World Communications Inc. Lease Agreement dated as
       of February 13, 1998.
     
10.62  Fourth Amendment to Trans World Communications, Inc.
       Lease Agreement dated March 1, 1998.
     
10.63  First Amendment to Employment Agreement between the
       Registrant and Richard W. Pershing dated as of April 1, 1998.
     
10.64  Waiver and Second Amendment to Amended and Restated
       Credit Agreement and Note between Registrant and Union Bank of
       California dated April 30, 1998.
     
13     Certain portions of Registrant's Annual Report to
       Stockholders for the fiscal year ended March 31, 1998 containing
       information required by Part I and Part II of this report.
     
21     Subsidiaries.
     
22     Proxy Statement, Notice of Annual Meeting of Stockholders
       to be Held Wednesday, August 5, 1998 at 11:00 A.M. and Form of
       Proxy (to be deemed filed only to the extent required by the
       instructions to exhibits for reports on Form 10-K) to be filed
       within 120 days of the end of the Registrant's fiscal year.
     
23     Independent Auditors' Consent - Deloitte and Touche.
     
24     Power of Attorney (on signature page 16)
     
27.1   Financial Data Schedule for Twelve Months Ended March 31,
       1998.
     
27.2   Restated Financial Data Schedule for the Year Ended March
       31, 1996.
     
27.3   Restated Financial Data Schedule for the Nine Months
       Ended December 31, 1995.
     
27.4   Restated Financial Data Schedule for the Six Months Ended
       September 30, 1995.
     
 99.1  Annual Report of the Datron Systems Incorporated Employee
       Stock Purchase Plan


---------------------------------------
[FN]
<F1> Incorporated by this reference to the Exhibit bearing the same
     number filed with the Registration Statement on Form 8-B of the
     Registrant on November 13, 1987.

<F2> Incorporated by this reference to the Registration Statement on
     Form S-8 of the Registrant filed March 22, 1988.

<F3> Incorporated by this reference to the Exhibit bearing the same
     number filed with the Registrant's Annual Report on Form 10-K for
     the fiscal year ended March 31, 1988.

<F4> Incorporated by this reference to the Exhibit bearing the same
     number filed with the Registrant's Annual Report on Form 10-K for
     the fiscal year ended March 31, 1989.

<F5> Incorporated by this reference to the Exhibit bearing the same
     number filed with the Registrant's report on Form 8-K dated July
     13, 1990.

<F6> Incorporated by this reference to the Registration Statement on
     Form S-8 of the Registrant filed April 16, 1993.

<PAGE> 14
<F7> Incorporated by this reference to Exhibit I to the Registrant's
     Registration Statement on Form 8-A filed November 5, 1990.

<F8> Incorporated by this reference to the Exhibit bearing the same
     number filed with the Registrant's Quarterly Report on Form 10-Q
     for the quarter ended December 31, 1993.

<F9> Incorporated by this reference to the Exhibit bearing the same
     number filed with the Registrant's Annual Report on Form 10-K for
     the fiscal year ended March 31, 1994.

<F10>Incorporated by this reference to the Exhibit bearing the same
     number filed with the Registrant's Annual Report on Form 10-K for
     the fiscal year ended March 31, 1995.

<F11>Incorporated by this reference to the Exhibit bearing the same
     number filed with the Registrant's Annual Report on Form 10-K for
     the fiscal year ended March 31, 1996.

<F12>Incorporated by this reference to the Exhibit bearing the same
     number filed with the Registrant's Annual Report on Form 10-K for
     the fiscal year ended March 31, 1997.

<F13>Incorporated by this reference to the Exhibit bearing the same
     number filed with the Registrant's Quarterly Report on Form 10-Q
     for the quarter ended September 30, 1997.

</FN>

Supplemental Information
------------------------
Copies of the Registrant's Proxy Statement for the Annual Meeting of
Stockholders to be held August 5, 1998 and copies of the form of proxy
to be used for such Annual Meeting will be furnished to the Securities
and Exchange Commission prior to the time they will be distributed to
Stockholders.

<PAGE> 15

                            SIGNATURES
                            ----------

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

Date:   June 25, 1998         DATRON SYSTEMS INCORPORATED


                              By: /s/ DAVID A. DERBY
                                        David A. Derby
                                        Chairman of the Board,
                                        President, Chief Executive
                                        Officer and Director

<PAGE> 16

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below appoints David A. Derby and William L. Stephan, jointly
and severally, as his true and lawful attorney-in-fact, each with full
power of substitution and re-substitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all
amendments to this Annual Report on Form 10-K, and to file the same,
with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact, jointly and severally, full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact, jointly and severally, or
their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.

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

      Signature                   Title                   Date
      ---------                   -----                   ----
                         Chairman of the Board,
                         President, Chief Executive
By:/s/DAVID A. DERBY     Officer and Director
    David A. Derby      (Principal Executive Officer)June 25, 1998


                         Vice President, Chief
                         Financial Officer (Principal
By:/s/WILLIAM L. STEPHAN Financial and Accounting
    William L. Stephan   Officer)                    June 25, 1998


By:/s/KENT P. AINSWORTH     Director                 June 15, 1998
   Kent P. Ainsworth


By:/s/MICHAEL F. BIGHAM     Director                 June 15, 1998
   Michael F. Bigham


By:/s/ADRIAN C. CASSIDY     Director                 June 15, 1998
   Adrian C. Cassidy


By:/s/JOHN R. COPPLE        Director                 June 24, 1998
   John R. Copple


By:/s/WILLIAM A. PRESTON    Director                 June 17, 1998
   William A. Preston


By:/s/PETER F. SCOTT        Director                 June 15, 1998
   Peter F. Scott


By:/s/ROBERT D. SHERER      Director                 June 15, 1998
   Robert D. Sherer

<PAGE>
       INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULE


Board of Directors
Datron Systems Incorporated
Escondido, California


We have audited the accompanying consolidated financial statements of
Datron Systems Incorporated (the Company) as of March 31, 1998 and
1997, and for each of the three years in the period ended March 31,
1998, and have issued our report thereon dated May 8, 1998; such
financial statements and report are included in your 1998 Annual
Report to Stockholders and are incorporated herein by reference.  Our
audits also included the financial statement schedule of the Company
listed in Item 14(a)(2).  This financial statement schedule is the
responsibility of the Company's management.  Our responsibility is to
express an opinion based on our audits.  In our opinion, such
financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as whole, presents fairly in
all material respects the information set forth therein.

DELOITTE & TOUCHE LLP

Deloitte & Touche LLP
San Diego, California
May 8, 1998
<TABLE>
<PAGE> S-2

                  DATRON SYSTEMS INCORPORATED
                         SCHEDULE II

               VALUATION AND QUALIFYING ACCOUNTS
           YEARS ENDED MARCH 31, 1998, 1997 AND 1996

<CAPTION>                            
                             Balance at                     Balance at
                             Beginning                         End
    Description              of Year   Additions Write-offs   of Year
    -----------              --------- --------- ---------- ----------

Year ended March 31, 1996
-------------------------
<S>                        <C>        <C>          <C>      <C>
Allowance for doubtful
   accounts                  $247,000    $98,000    $98,000   $247,000
Allowance for inventory
   obsolescence               724,000     45,000     60,000    709,000
Allowance for warranties      749,000    754,000    488,000  1,015,000
                            ----------  --------   -------- ----------
                           $1,720,000   $897,000   $646,000 $1,971,000
                            ==========  ========   ======== ==========

Year ended March 31, 1997
-------------------------
Allowance for doubtful
   accounts                  $247,000   $136,000   $157,000   $226,000
Allowance for inventory
   obsolescence               709,000    735,000     94,000  1,350,000
Allowance for warranties    1,015,000    632,000    940,000    707,000
                           ---------- ---------- ---------- ----------
                           $1,971,000 $1,503,000 $1,191,000 $2,283,000
                           ========== ========== ========== ==========

Year ended March 31, 1998
-------------------------
Allowance for doubtful
   accounts                  $226,000   $166,000   $202,000   $190,000
Allowance for inventory
   obsolescence             1,350,000    477,000   $171,000  1,656,000
Allowance for warranties      707,000    829,000    603,000    933,000
                           ---------- ----------   -------- ----------
                           $2,283,000 $1,472,000   $976,000 $2,779,000
                           ========== ==========   ======== ==========

</TABLE>