FORM 10-QSB

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

(Mark  One)
[  X  ]     QUARTERLY  REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
            EXCHANGE ACT  OF  1934

                       For the quarter ended June 30, 2003

                                       OR

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

             For the transition period from __________ to __________


                 Commission File Number                  1-12727
                                                        ----------


                           SENTRY TECHNOLOGY CORPORATION
                           -----------------------------
           (Exact name of small business issuer as specified in its charter)


          Delaware                                        96-11-3349733
         ----------                                       -------------
  (State  or  other  jurisdiction  of                    (I.R.S. Employer
    incorporation  or organization)                      Identification No.)

             350  Wireless  Boulevard,  Hauppauge,  New  York   11788
        --------------------------------------------------------------------
        (Address of principal executive  offices)              (Zip Code)

                                  631-232-2100
                                  ------------
              (Registrant's telephone number, including area code)


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


Indicate by check mark whether the registrant (1) has filed all reports required
to  be  filed  by  Section  13  or 15 (d) of the Securities Exchange Act of 1934
during  the  preceding 12 months (or for such shorter period that the registrant
was  required  to  file  such  reports), and (2) has been subject to such filing
requirements  for  the  past  90  days.

Yes     X          No
        -

As of August 13, 2003, there were 85,746,886 shares of Common Stock outstanding.



<PAGE>


                          SENTRY TECHNOLOGY CORPORATION
                          -----------------------------
                                      INDEX
                                      -----




                                                                     Page  No.
                                                                     ---------

PART  I.   FINANCIAL  INFORMATION
---------------------------------

Item  1.     Financial  Statements  (Unaudited)

     Consolidated  Balance  Sheets  --
     June  30,  2003  and  December  31,  2002                          3

     Condensed  Consolidated  Statements  of  Operations  --
     Three  Months  Ended  June  30,  2003  and  2002
     And  Six  Months  Ended  June  30,  2003  and  2002                4

     Condensed  Consolidated  Statements  of  Cash  Flows  --
     Six  Months  Ended  June  30,  2003  and  2002                     5

     Notes  to  Condensed  Consolidated  Financial
     Statements  -  June  30,  2003                                  6  -  8


Item  2.     Management's  Discussion  and  Analysis  of
             Financial  Condition  and  Results  of  Operations      9  -  12

Item  4.     Controls  and  Procedures                                  12



PART  II.   OTHER  INFORMATION
------------------------------

Item  6.     Exhibits  and  Reports  on  Form  8-K                      12


Signatures                                                              12















<PAGE>
PART  I.   FINANCIAL  INFORMATION
---------------------------------

Item  1.     Financial  Statements  (Unaudited)
<TABLE>
<CAPTION>

                               SENTRY TECHNOLOGY CORPORATION
                                CONSOLIDATED BALANCE SHEETS
                                     (In thousands)
<S>                                                            <C>         <C>
                                                                June 30,    December 31,
                                                                  2003          2002
                                                               ----------  --------------
ASSETS
--------------------------------------------------------------
CURRENT ASSETS
  Cash and cash equivalents. . . . . . . . . . . . . . . . . .  $     107   $         266
  Accounts receivable, less allowance for doubtful
     accounts of $342 and $303, respectively . . . . . . . . .        934           1,472
  Inventories. . . . . . . . . . . . . . . . . . . . . . . . .      2,205           3,145
  Prepaid expenses and other current assets. . . . . . . . . .        172             237
                                                                ----------  --------------
    Total current assets . . . . . . . . . . . . . . . . . . .      3,418           5,120

PROPERTY, PLANT AND EQUIPMENT, net . . . . . . . . . . . . . .      2,390           2,563
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . . . . . .        287             309
                                                                ----------  --------------

                                                                $   6,095   $       7,992
                                                                ==========  ==============

LIABILITIES AND SHAREHOLDERS' EQUITY
--------------------------------------------------------------
CURRENT LIABILITIES
  Revolving line of credit and term loan . . . . . . . . . . .  $   1,297   $       2,067
  Accounts payable . . . . . . . . . . . . . . . . . . . . . .        498           1,807
  Accrued liabilities. . . . . . . . . . . . . . . . . . . . .      1,707           1,523
  Obligations under capital leases -
     current portion . . . . . . . . . . . . . . . . . . . . .         91              97
  Deferred income. . . . . . . . . . . . . . . . . . . . . . .        225             394
                                                                ----------  --------------
    Total current liabilities. . . . . . . . . . . . . . . . .      3,818           5,888

NOTES PAYABLE                                                          74             ---

OBLIGATIONS UNDER CAPITAL LEASES -
  non-current portion. . . . . . . . . . . . . . . . . . . . .      2,509           2,555
                                                                ----------  --------------
    Total liabilities. . . . . . . . . . . . . . . . . . . . .      6,401           8,443

SHAREHOLDERS' EQUITY
  Common stock . . . . . . . . . . . . . . . . . . . . . . . .         85              78
  Additional paid-in capital . . . . . . . . . . . . . . . . .     44,623          44,521
  Accumulated deficit. . . . . . . . . . . . . . . . . . . . .    (44,894)        (44,930)
  Note receivable from shareholder . . . . . . . . . . . . . .       (120)           (120)
                                                                ----------  --------------
    Total shareholders' equity (deficit) . . . . . . . . . . .       (306)           (451)
                                                                ----------  --------------
                                                                $   6,095   $       7,992
                                                                ==========  ==============

See notes to the condensed consolidated financial statements.
</TABLE>





















<PAGE>


SENTRY  TECHNOLOGY  CORPORATION
CONDENSED  CONSOLIDATED  STATEMENTS  OF  OPERATIONS
(In  thousands,  except  per  share  data)

<TABLE>
<CAPTION>
<S>                                                             <C>           <C>         <C>       <C>
                                                                Three Months Ended        Six Months Ended
                                                                     June 30,                 June 30,
                                                                -------------------       -----------------
                                                                 2003          2002       2003         2002
                                                                -------------------       -----------------
REVENUES . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 2,326       3,181       $ 5,900   $ 7,923

COSTS AND EXPENSES:
  Cost of sales. . . . . . . . . . . . . . . . . . . . . . . .      837       1,559         2,489     3,707
  Customer service expenses. . . . . . . . . . . . . . . . . .      697       1,054         1,818     2,333
  Selling, general and administrative expenses . . . . . . . .      857       1,368         1,881     2,750
  Research and development . . . . . . . . . . . . . . . . . .      175         145           335       296
                                                                --------    --------      --------   -------

                                                                  2,566       4,126         6,523     9,086
                                                                --------    --------      --------   -------

OPERATING LOSS . . . . . . . . . . . . . . . . . . . . . . . .     (240)       (945)         (623)   (1,163)

INTEREST EXPENSE . . . . . . . . . . . . . . . . . . . . . . .      100         140           211       272
                                                                --------    --------      --------   -------

LOSS BEFORE INCOME TAXES . . . . . . . . . . . . . . . . . . .     (340)     (1,085)         (834)   (1,435)

INCOME TAXES (BENEFIT)                                             (348)        ---          (348)      ---
                                                                --------    --------      --------   -------

PROFIT (LOSS) BEFORE EXTRAORDINARY ITEM. . . . . . . . . . . .        8      (1,085)         (486)   (1,435)

EXTRAORDINARY ITEM - Gain on extinguishment
         of debt, net of  $348 income taxes                         522         ---           522       ---
                                                                --------    --------      --------   -------

NET PROFIT (LOSS). . . . . . . . . . . . . . . . . . . . . . .  $   530      (1,085)      $    36   $(1,435)
                                                                ========    ========      ========  ========

NET PROFIT (LOSS) PER SHARE
  Profit (loss) before extraordinary item. . . . . . . . . . .  $  0.00       (0.02)      $ (0.01)  $ (0.02)
  Extraordinary item . . . . . . . . . . . . . . . . . . . . .     0.01        0.00          0.01      0.00
                                                                --------    --------      --------  --------
  Basic and diluted. . . . . . . . . . . . . . . . . . . . . .  $  0.01       (0.02)      $  0.00   $ (0.02)
                                                                ========    ========      ========  ========

WEIGHTED AVERAGE SHARES
  Basic and diluted. . . . . . . . . . . . . . . . . . . . . .   82,943      71,032        82,601    66,343
                                                                ========    ========      ========  ========


See notes to the condensed consolidated financial statements.

</TABLE>


























<PAGE>




                                 SENTRY  TECHNOLOGY  CORPORATION
                      CONDENSED  CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
                                           (In  thousands)


<TABLE>
<CAPTION>


                                                                         Six Months Ended
                                                                             June 30,
                                                                  ----------------------------
<S>                                                               <C>                 <C>
                                                                         2003             2002
                                                                  ------------------  --------
CASH FLOWS FROM OPERATING ACTIVITIES:
----------------------------------------------------------------
  Net profit (loss). . . . . . . . . . . . . . . . . . . . . . .  $              36   $(1,435)
  Adjustments to reconcile net loss
     to net cash provided by operating activities:
     Depreciation and amortization . . . . . . . . . . . . . . .                200       266
     Provision for bad debts . . . . . . . . . . . . . . . . . .                 25        23
     Gain on extinguishment of debt. . . . . . . . . . . . . . .               (870)       --
  Changes in operating assets and liabilities:
     Accounts receivable . . . . . . . . . . . . . . . . . . . .                513       593
     Inventories . . . . . . . . . . . . . . . . . . . . . . . .                940       239
     Accounts payable and accrued liabilities. . . . . . . . . .                (77)      735
     Other, net. . . . . . . . . . . . . . . . . . . . . . . . .                (85)     (164)
                                                                  ------------------  --------

    Net cash provided by operating activities. . . . . . . . . .                682       257
                                                                  ------------------  --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property, plant and equipment, net . . . . . . . .                (12)      (62)
  Intangibles. . . . . . . . . . . . . . . . . . . . . . . . . .                (12)      (11)
                                                                  ------------------  --------

    Net cash used in investing activities. . . . . . . . . . . .                (24)      (73)
                                                                  ------------------  --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net payments under the revolving line of credit and term loan.               (770)     (327)
  Repayment of obligations under capital leases. . . . . . . . .                (52)      (44)
  Proceeds from sale of stock, net . . . . . . . . . . . . . . .                  5        14
                                                                  ------------------  --------

    Net cash used in by financing activities . . . . . . . . . .               (817)     (357)
                                                                  ------------------  --------

DECREASE IN CASH AND CASH EQUIVALENTS. . . . . . . . . . . . . .               (159)     (173)

CASH AND CASH EQUIVALENTS, at beginning of period. . . . . . . .                266       423
                                                                  ------------------  --------
CASH AND CASH EQUIVALENTS, at end of period. . . . . . . . . . .  $             107   $   250
                                                                  ==================  ========


See notes to the condensed consolidated financial statements.


</TABLE>






<PAGE>














SENTRY  TECHNOLOGY  CORPORATION
NOTES  TO  CONDENSED  CONSOLIDATED  FINANCIAL  STATEMENTS
JUNE  30,  2003

NOTE  A  --  Basis  of  Presentation
------------------------------------
Sentry  Technology  Corporation  ("Sentry"),  a  Delaware  Corporation,  was
established  to effect the merger of Knogo North America Inc. ("Knogo N.A.") and
Video Sentry Corporation ("Video Sentry"), which was consummated on February 12,
1997.  The  merger resulted in Knogo N.A. and Video Sentry becoming wholly owned
subsidiaries  of  Sentry.  The  consolidated  financial  statements  include the
accounts  of  Sentry  and  its  majority-owned  subsidiaries.  All  intercompany
accounts  and  transactions  have  been  eliminated  in  consolidation.

The accompanying unaudited condensed consolidated financial statements have been
prepared  in  accordance  with  accounting  principles generally accepted in the
United  States  of  America  for  interim  financial  information  and  with the
instructions  to  Form  10-QSB.  Accordingly,  they  do  not  include all of the
information  and  footnotes required by accounting principles generally accepted
in  the  United  States  of  America  for  complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered  necessary  for  a  fair  presentation  have  been included.  Interim
results are not necessarily indicative of the results that may be expected for a
full  year.  These  financial  statements should be read in conjunction with the
audited consolidated financial statements and notes thereto included in Sentry's
Annual  Report  to  Stockholders on Form 10-K for the fiscal year ended December
31,  2002,  as  filed  with  the  Securities  and  Exchange  Commission.

Certain prior period amounts have been reclassified to conform to current period
presentation.


NOTE  B  --  Financial  Condition  and  Liquidity
-------------------------------------------------
We  have  incurred  reduced  revenue  levels,  decreased  financial position and
recurring  operating losses over the past several years.  As a result, the Board
of  Directors approved a restructuring plan for 2003 to strengthen the Company's
operating  efficiencies and to better align its operations with current economic
and  market conditions.  To date our progress under the revised business plan is
as  follows:

-     Significantly  downsized  our  operations  including  the  elimination  of
      approximately  60  of  117  positions  as  of  March  7,  2003.
-     Negotiated  a settlement with past due trade vendors which has resulted in
      an  $870,000  gain.
-     Negotiated  with  the  current  landlord  to  move  out of its present
      corporate facility.  The lease termination will result in a gain of
      approximately $350,000 in  the  third  quarter  of  2003.  In  addition,
      the Company is finalizing its negotiations  to  relocate  to  a smaller
      and less costly facility by October 1, 2003.
-     Dedicated  a  substantial  portion  of  our  remaining  resources  towards
      maintaining  and  improving  our  relationships  with  our 30 largest
      customers.
-     Outsourced  of  all non-essential manufacturing and assembly operations to
      qualified  subcontractors.
-     Further  expanded  our  Service  Partner  program  to  augment service and
      installations  performed  by  our  employees.

On January 7, 2003, Sentry initiated its restructuring plan.  Due to the size of
the layoff, Sentry was required to give the terminated employees a 60-day notice
period.  The  costs  associated  with  these  restructuring activities are being
expensed  as  they  are  incurred.  The  successful  implementation  of  this
restructuring  to date has resulted in substantial gross margin improvements and
reductions  in  operating  expenses  beginning  in  the  second quarter of 2003.

There  can  be  no  assurance,  however, that changes in Sentry's plans or other
events  affecting  its  operations  will not result in accelerated or unexpected
cash  requirements, or that the Company will be successful in achieving positive
cash  flow  from  operations or that additional debt or equity financing will be
available  on  terms  that  are satisfactory to Sentry, or that any such debt or
equity  financing  will  be  sufficient  to  provide  the full amount of funding
necessary.  Sentry's future cash requirements are expected to depend on numerous
factors,  including,  but  not  limited to: (i) the ability to generate positive
cash  flow  from  operations,  and the extent thereof, (ii) the ability to raise
additional  capital  or  obtain  additional  financing,  and  (iii)  economic
conditions.

Sentry  will  require  liquidity  and  working  capital  to finance increases in
receivables  and  inventory  associated  with sales growth, payments to past due
vendors  and,  to a lesser extent, for capital expenditures.  The Company had no
material  capital  expenditure  or  purchase  commitments  as  of June 30, 2003.





SENTRY  TECHNOLOGY  CORPORATION
NOTES  TO  CONDENSED  CONSOLIDATED  FINANCIAL  STATEMENTS
JUNE  30,  2003


Currently,  Sentry's  major  shareholder,  Dialoc  ID,  is  not  able to provide
additional  financial  support  for Sentry.  If the Company is not able to raise
additional  debt or equity financing, it could be forced into a bankruptcy or be
required  to  liquidate  its  assets.  In  this  scenario, most likely, Sentry's
secured  lender  would  receive  the  bulk  of  any  proceeds.


NOTE  C  --  Extraordinary  Item  -  Gain  on  Extinguishment  of  Debt
-----------------------------------------------------------------------
In  June 2003, the Company entered into a settlement with certain of its vendors
for past due obligations.  Under the terms of the settlement, each participating
vendor received a note for approximately 10% of their balance due and two shares
of  Sentry  common  stock  for  each  dollar  owed in full satisfaction of their
outstanding  balances,  which approximated $1,085,000.  The notes, approximating
$110,000,  are  non-interest bearing and are payable in three equal installments
on  January 15, 2004, 2005, and 2006.  The 2,172,360 shares issued in connection
with  this settlement were valued at approximately $105,000, based on the market
value  of  the  stock  at  the  time  of  the  settlement.  As  a result of this
transaction,  the  Company  realized  an  extraordinary  gain  of  $870,000,
representing  the  difference  between the amounts due before the settlement and
the  total  amount payable, including the value of the common stock, as a result
of  the  settlement.  The  $348,000  income  tax  provision  recognized  on  the
extraordinary gain was offset by an equivalent income tax benefit generated from
the  current  period's loss from operations and the utilization of net operating
loss  carryforwards.


NOTE  D  --  Inventories
------------------------
Inventories  consist  of  the  following:
                                  June  30,  2003       December  31,  2002
                                  ---------------       -------------------
                                               (in  thousands)
Raw  materials                    $     537                 $     513
Work-in-process                         510                       618
Finished  goods                       1,158                     2,014
                                      -----                     -----
                                  $   2,205                 $   3,145
                                  =========                 =========



Reserves  for excess and obsolete inventory totaled $2,425,000 and $3,610,000 as
of June 30, 2003 and December 31, 2002, respectively and have been included as a
component  of  the  above  amounts.


NOTE  E  --  Related  Party  Transactions
-----------------------------------------
As  a  result  of  the  Dialoc ID investment, Sentry entered into a distribution
agreement with Dialoc ID, which contemplates a two-way distribution relationship
between  the  companies.  Under  the  agreement,  Sentry  has the rights to sell
Dialoc  ID's  EAS,  access  control and RFID products and accessories and Sentry
gives  Dialoc  ID  the rights to sell its EAS and CCTV products and accessories.
Pricing  for  products  under the agreements are at the lowest prices charged to
affiliates.  Also, Peter Murdoch, a shareholder of Dialoc ID, receives an annual
salary  of  $50,000  in  2003 in the capacity of President of Sentry.  Purchases
from  Dialoc  ID were $11,000 and $7,000 in the quarters ended June 30, 2003 and
June  30,  2002  and $12,000 and $10,000 in the six month periods ended June 30,
2003  and  2002, respectively.  Services and sales to Dialoc ID were $35,000 and
$8,000  in  the quarters ended June 30, 2003 and 2002 and $39,000 and $13,000 in
the  six  month  periods  ended  June  30, 2003 and 2003, respectively.  The net
amount  payable  to  Dialoc  ID  as  of  June  30,  2003  was  $118,000.

In  addition, on March 27, 2002, Peter Murdoch, our President and CEO, exercised
a  stock  option  for  two  million shares of Sentry common stock at an exercise
price  of  $0.06  per  share,  which  was  paid  for  through  the issuance of a
promissory note in the amount of $120,000.  The principal of the note is secured
by  the  option  shares  and  is  repayable  no later than January 8, 2006.  Mr.
Murdoch  will  not  have any personal liability for the principal of the note if
the  value  of  the option shares is not sufficient to repay the note.  The note
bears  interest at prime (currently 4 %) less .75%.  The note has been reflected
as  a  reduction  of  shareholders'  equity  on  the  balance  sheet.









SENTRY  TECHNOLOGY  CORPORATION
NOTES  TO  CONDENSED  CONSOLIDATED  FINANCIAL  STATEMENTS
JUNE  30,  2003


NOTE  F  --  Earnings  Per  Share
---------------------------------
The  earnings  per  share  calculations (basic and diluted) at June 30, 2003 and
2002  are  based  upon  the weighted average number of common shares outstanding
during  each  period.  There  are  no  reconciling  items  in  the  numerator or
denominator  of  the  earnings  per  share calculations in either of the periods
presented.  Options  to  purchase 1,615,912 and 3,673,508 shares of common stock
with  a  weighted  average exercise price of $0.57 and $0.71 were outstanding at
June  30, 2003 and 2002, but were not included in the computation of diluted net
loss  per  share  because  their  effect  would  be  antidilutive.

Stock  options  issued  to employees are accounted for under the intrinsic value
method  as  prescribed  by  APB  Opinion No. 25, "Accounting for Stock Issued to
Employees." No stock-based employee compensation cost is reflected in net income
(loss),  as  all options granted had an exercise price equal to the market value
of  the  underlying  common  stock  on  the  date  of grant. The following table
illustrates  the effect on net loss and net loss per share if we had applied the
fair  value  method of accounting for stock options under the provisions of FASB
Statement  No.  123,  "Accounting  for  Stock-Based  Compensation".

<TABLE>
<CAPTION>
                                              Three  Months  Ended            Six  Months Ended
                                            June  30,     June 30,          June 30,     June  30,
                                              2003          2002              2003         2002
                                            ---------     --------          --------     ---------
                                               (in  thousands,  except  per  share  data)
<S>                                          <C>           <C>              <C>           <C>
Net income (loss), as reported . . . . . .   $ 530         $(1,085)         $  36         $(1,435)

Deduct:  Total stock-based employee
compensation expense determined
under the fair value method for all
awards, net of related tax effects . . . .      20              29             36             139
                                             -----         --------         -----         --------

Pro-forma net income (loss). . . . . . . .   $ 510         $(1,114)         $   -         $(1,574)
                                             =====         ========         =====         ========

Net income (loss) per share:
Basic and Diluted - as reported. . . . . .   $0.01         $ (0.02)         $0.00         $ (0.02)
                                             =====         ========         =====         ========
Basic and Diluted - pro forma. . . . . . .   $0.01         $ (0.02)         $0.00         $ (0.02)
                                             =====         ========         =====         ========


The  fair  value  of each option granted is estimated on the date of grant using
the Black-Scholes option-pricing model.  No options were granted in the three or
six  month  periods  ended  June  30,  2003  or  2002.


</TABLE>




NOTE  G  --  Subsequent  Event
------------------------------
On  July  9,  2003, Sentry entered into a settlement agreement with its landlord
regarding  the termination of its long-term capital and operating leases for its
current  facility in Hauppauge, New York.  Under terms of the settlement, Sentry
is released from its current and future liabilities under the leases in exchange
for  a  $250,000  8%  note,  payable in 36 equal monthly installments of $7,834,
including interest, commencing November 1, 2003.  The note also obligates Sentry
to  prepay  an  amount  of  $100,000  against the note in the event of an equity
financing,  as  defined.  In  addition,  Sentry  agreed  to  issue  the landlord
1,000,000  shares  of  common  stock,  for  which  the  fair  value of the stock
($33,000)  was determined using the closing price as of July 9, 2003.  Sentry is
also obligated to pay rent of $16,000 per month until it vacates the premises on
or  before September 30, 2003.  The Company anticipates that it will recognize a
gain  of  approximately  $350,000 in the third quarter of 2003, representing the
difference  between  the  carrying  amount  of  outstanding  obligations  to the
landlord  less the net book value of the property on the date of the settlement.

The  Company  is  currently  finalizing  its  negotiations  for  a new operating
facility.







SENTRY  TECHNOLOGY  CORPORATION
MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
RESULTS  OF  OPERATIONS


Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of  Operations.

Certain  Factors  That  May  Affect  Future  Results
----------------------------------------------------

Information  contained  or  incorporated by reference in this periodic report on
Form  10-QSB  and  in  other  SEC  filings  by  Sentry contains "forward-looking
statements"  within  the meaning of the Private Securities Litigation Reform Act
of  1995  which can be identified by the use of forward-looking terminology such
as  "believes,"  "expects,"  "may,"  "will,"  "should"  or  "anticipates" or the
negative  thereof,  other  variations  thereon  or comparable terminology, or by
discussions  of  strategy.  These  forward-looking  statements  involve  certain
significant  risks  and  uncertainties, and actual results may differ materially
from the forward-looking statements. For further details and discussion of these
risks  and  uncertainties  see  Sentry  Technology  Corporation's  SEC  filings
including,  but not limited to, its annual report on Form 10-K. No assurance can
be  given  that future results covered by the forward-looking statements will be
achieved,  and  other factors could also cause actual results to vary materially
from  the  future  results covered in such forward-looking statements. We do not
undertake  to  publicly  update  or revise any of our forward-looking statements
even  if  experience or future changes show that the indicated results or events
will  not  be  realized.


Results  of  Operations:
------------------------

We  sell  our  products predominantly into the retail market.  We recognize that
our  domestic  revenues  will  continue  to  be  influenced by the soft economic
environment.  As  part  of  our restructuring plan and due to the limitations of
our  financial  resources,  we  reduced  the  number of direct salespersons from
thirteen  to  four, whose efforts are supplemented by six in-house sales support
staff  and  two  independent  sales  representatives.  Our  sales  efforts  were
primarily focused towards our top 30 customers.  The transition to this strategy
may  result  in large swings in our order flow, based on the timing of new store
openings  and  the receipt of orders from these customers.  This is reflected in
the  reduction  in our backlog of orders from approximately $5.2 million at June
30,  2002  to approximately $3.4 million at June 30, 2003. Just after the end of
Q-2,  we  received  approximately $1.5 million in additional Lowe's Home Centers
orders.  Consolidated  revenues  were  27%  and 26% lower in the quarter and six
months  ended  June  30,  2003 than in the quarter and six months ended June 30,
2002.  Total  revenues  for  the  periods  presented  are broken out as follows:

<TABLE>
<CAPTION>
<S>                               <C>      <C>      <C>          <C>      <C>       <C>
                                    Q-2      Q-2       %           6 Mos.   6 Mos.    %
                                   2003     2002    Change         2003     2002    Change
                                  -------  -------  -------      -------   ------   -------
                                       (in thousands)                 (in thousands)

EAS . . . . . . . . . . . . .     $  546   $  625     (13)       $   970  $ 1,316     (26)
CCTV. . . . . . . . . . . . .        470      863     (46)         1,947    2,630     (26)
SentryVision. . . . . . . . .        485      497      (2)           859    1,136     (24)
3M library products . . . . .          -       77    (100)            45      191     (76)
                                  -------  -------  -------       -------   ------  -------
Total sales . . . . . . . . .      1,501    2,062     (27)         3,821    5,273     (28)
Service revenues and other. .        825    1,119     (26)         2,079    2,650     (22)
                                  -------  -------  -------       -------   ------  -------
Total revenues. . . . . . . .     $2,326   $3,181     (27)       $ 5,900   $7,923     (26)
                                  =======  =======  =======      =======   ======  =======
</TABLE>


Direct sales of EAS products were lower in both the second quarter and first six
months  of  2003 as compared to the same period in the prior year as a result of
lower sales to our Mexican Distributor and to smaller boutique customers.  There
was  a  decrease  in CCTV and SentryVision  revenues from Lowe's Home Centers of
approximately  $1.0  million  in the first six months of 2003 as compared to the
first  six  months  of  2002  as result of the timing of the contracts received,
which was partially offset by approximately $0.5 million in new CCTV orders from
Home  Depot.  We  terminated  our  distribution  agreement  with  3M for library
products  as of the end of 2002, however, the final installations were completed
in  first  quarter  of  2003.  Service  revenues and other decreased in both the
second  quarter and first six months primarily as a result of lower installation
revenue  than  in  the  prior  year.





SENTRY  TECHNOLOGY  CORPORATION
MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
RESULTS  OF  OPERATIONS


Cost of sales were 56% and 65% of total sales in the three and six month periods
ended  June  30,  2003  compared to 76% and 70% in the same periods of the prior
year.  Part  of  our restructuring plan for 2003 included the outsourcing of all
significant  manufacturing  operations.  The  decrease  in  the  cost  of  sales
percentage  in  the second quarter of 2003 is a result of the elimination of the
charge  to  cost  of  sales  of  under  absorbed fixed overhead costs due to the
termination  of  in-house  manufacturing  as  of the end of the first quarter of
2003.

We  were  successful in reducing customer service expenses by 34% and 22% in the
second  quarter  and  first six months of 2003 as compared to the second quarter
and  first  six months of 2002 primarily as a result of a decrease in the number
of  customer service employees and lower outside contractor costs resulting from
lower  revenue  levels.

Selling, general and administrative expenses were 37% and 32% lower in the three
and  six  month  periods ended June 30, 2003 when compared to the same period of
the  previous year. primarily as a result of lower payroll costs and commissions
partly  as  a  result  of  the  headcount  reduction  as  of  March 7, 2003.  We
anticipate  that  selling,  general  and  administrative  costs will continue to
decline  on a comparative basis during the remainder of 2003, particularly after
we  relocate  to  a  smaller,  less  costly  facility  by  October  1,  2003.

Research  and  development costs were higher in the second quarter and first six
months  of 2003 when compared to the second quarter and first six months of 2002
due  to a reorganization and transfer of employees into the engineering group as
part  of  our  restructuring.

Net  interest  expense  for  the  second  quarter  and  first six months of 2003
decreased  due  to  lower  average borrowings and lower interest rates under our
revolving  credit  agreement.

In  the  second  quarter  of  2003,  the  Company entered into a settlement with
certain  of  its  vendors  for  past due obligations which resulted in a gain of
approximately  $522,000  (net  of  $348,000  income  taxes) which represents the
difference  between  the  amounts due before the settlement and the total amount
payable,  including the value of the common stock, as a result of the settlement
..
The  $348,000  income  tax  provision  recognized  on the extraordinary gain was
offset  by  an equivalent income tax benefit generated from the current period's
loss  from  operations  and the utilization of net operating loss carryforwards.
Due to net operating losses, we have not provided for income taxes in any of the
periods  of  2002.

As a result of the foregoing, Sentry had net profits of $530,000 and  $36,000 in
the  quarter  and first six months ended June 30, 2003 as compared to net losses
of  $1.1  and  $1.4  million  in the quarter and six months ended June 30, 2002.


Liquidity  and  Capital  Resources  as  of  June  30,  2003
-----------------------------------------------------------

We  have  incurred  reduced  revenue  levels,  decreased  financial position and
recurring  operating losses over the past several years.  As a result, the Board
of  Directors approved a restructuring plan for 2003 to strengthen the Company's
operating  efficiencies and to better align its operations with current economic
and  market  conditions.  To  date,  we have made significant progress under our
revised  business  plan  including  the  following:

-     Significantly  downsized  our  operations  including  the  elimination  of
      approximately  60  of  117  positions  as  of  March  7,  2003.
-     Negotiated  a settlement with past due trade vendors which has resulted in
      an  $870,000  gain.
-     Negotiated  with the current landlord to move out of its present corporate
      facility.  The lease termination will result in a gain of approximately
      $350,000 in  the  third  quarter  of  2003.  In  addition,  the Company is
      finalizing its negotiations  to  relocate  to  a smaller and less costly
      facility by October 1, 2003.
-     Dedicated  a  substantial  portion  of  our  remaining  resources  towards
      maintaining  and  improving  our  relationships  with  our 30 largest
      customers.
-     Outsourced  all  non-essential  manufacturing  and  assembly operations to
      qualified  subcontractors.
-     Further  expanded  our  Service  Partner  program  to  augment service and
      installations  performed  by  our  employees.


On January 7, 2003, Sentry initiated its restructuring plan.  Due to the size of
the layoff, Sentry was required to give the terminated employees a 60-day notice
period.  The  costs  associated  with  these  restructuring activities are being
expensed  as  they  are  incurred.  The  successful  implementation  of  this
restructuring  to date has resulted in substantial gross margin improvements and
reductions  in  operating  expenses  beginning  after the first quarter of 2003.

As  of  June 30, 2003, we had borrowings of approximately $1.3 million with CIT,
the  maximum  amount available under the revolving credit facility.  We continue
to  supplement  our  borrowings  under  this credit facility with purchase order
financing  through  EPK  Financial  Corporation.  During  the second quarter and
first six months of 2003, we funded $247,000 and $686,000 in inventory purchases
under  this facility.  As of June 30, 2003, we owed approximately $150,000 under
this  facility.

In  June 2003, the Company entered into a settlement with certain of its vendors
for past due obligations.  Under the terms of the settlement, each participating
vendor received a note for approximately 10% of their balance due and two shares
of  Sentry  common  stock  for  each  dollar  owed in full satisfaction of their
outstanding balances, which approximated $1,1 million.  The notes, approximating
$110,000,  are  non-interest bearing and are payable in three equal installments
on  January 15, 2004, 2005, and 2006.  The 2,172,360 shares issued in connection
with  this settlement were valued at approximately $105,000, based on the market
value  of  the  stock  at  the  time  of  the  settlement.  As  a result of this
transaction,  the  Company  realized  an  extraordinary  gain  of  $870,000,
representing  the  difference  between the amounts due before the settlement and
the  total  amount payable, including the value of the common stock, as a result
of the settlement.  To date, approximately 81% of past due trade debts have been
settled.

 On  July  9, 2003, Sentry entered into a settlement agreement with its landlord
regarding  the termination of its long-term capital and operating leases for its
current  facility in Hauppauge, New York.  Under terms of the settlement, Sentry
is released from its current and future liabilities under the leases in exchange
for  a  $250,000  8%  note,  payable in 36 equal monthly installments of $7,834,
including interest, commencing November 1, 2003.  The note also obligates Sentry
to  prepay  an  amount  of  $100,000  against the note in the event of an equity
financing,  as  defined.  In  addition,  Sentry  agreed  to  issue  the landlord
1,000,000  shares  of  common  stock,  for  which  the  fair  value of the stock
($33,000)  was determined using the closing price as of July 9, 2003.  Sentry is
also obligated to pay rent of $16,000 per month until it vacates the premises on
or  before September 30, 2003.  The Company anticipates that it will recognize a
gain  of  approximately  $350,000 in the third quarter of 2003, representing the
difference  between  the  carrying  amount  of  outstanding  obligations  to the
landlord  less the net book value of the property on the date of the settlement.
The  Company  is  currently  finalizing  its  negotiations  for  a new operating
facility.  It  is anticipated that the move will result in excess of $250,000 in
savings  on  an  annualized  basis.

We  continue to pursue additional debt or equity financing through our financial
advisors.

There  can  be  no  assurance,  however, that changes in Sentry's plans or other
events  affecting  its  operations  will not result in accelerated or unexpected
cash  requirements, or that the Company will be successful in achieving positive
cash  flow  from  operations or that additional debt or equity financing will be
available  on  terms  that  are satisfactory to Sentry, or that any such debt or
equity  financing  will  be  sufficient  to  provide  the full amount of funding
necessary.  Sentry's future cash requirements are expected to depend on numerous
factors,  including,  but  not  limited to: (i) the ability to generate positive
cash  flow  from  operations,  and the extent thereof, (ii) the ability to raise
additional  capital  or  obtain  additional  financing,  and  (iii)  economic
conditions.

Sentry  will  require  liquidity  and  working  capital  to finance increases in
receivables  and  inventory  associated  with sales growth, payments to past due
vendors  and,  to a lesser extent, for capital expenditures.  The Company had no
material  capital  expenditure  or  purchase  commitments  as  of June 30, 2003.

Currently,  Sentry's  major  shareholder,  Dialoc  ID,  is  not  able to provide
additional  financial  support  for  Sentry. If the Company is not able to raise
additional  debt or equity financing, we could be forced into a bankruptcy or be
required  to  liquidate  our  assets.  In  this  scenario, most likely, Sentry's
secured  lender  would  receive  the  bulk  of  any  proceeds.


Related  Party  Transactions
----------------------------
Details  of  related  party  transactions  are  included  in Note E of this Form
10-QSB.


Item  4.     Controls  and  Procedures

The  Company's  Chief  Executive  Officer  and  Chief  Financial  Officer  have
concluded,  based  on an evaluation conducted within 90 days prior to the filing
date  of  this  Quarterly  Report  on Form 10-QSB, that the Company's disclosure
controls  and  procedures  have  functioned  effectively  so as to provide those
officers  the  information  necessary  whether:


99.1     this  Quarterly  Report on Form 10-QSB  contains  any untrue  statement
of  a  material  fact  or  omits  to state a material fact necessary to make the
statements  made,  in  light  of the  circumstances  under which such statements
were  made, not misleading  with respect to the period covered by this Quarterly
Report  on  Form  10-QSB,  and

     (ii) the financial statements,  and other financial information included in
this  Quarterly  Report  on  Form  10-QSB,  fairly  present  in  all  material
respects  the  financial condition,  results of operations and cash flows of the
Company  as  of, and  for,  the  periods  presented  in  this  Quarterly  Report
on Form 10-QSB.

There  have been no significant changes in the Company's internal controls or in
other  factors  since  the  date  of  the  Chief  Executive  Officer's and Chief
Financial  Officer's  evaluation  that could significantly affect these internal
controls,  including  any  corrective   actions  with  regards  to  significant
deficiencies  and  material  weaknesses.


PART  II  -  OTHER  INFORMATION
-------------------------------


Item  6.     Exhibits  and  Reports  on  Form  8-K

(a)     List  of  Exhibits:
        99.2     Certification  by  Chief  Executive  Officer
        99.3     Certification  by  Chief  Financial  Officer

(b)     Reports  on  Form  8-K - On June 24, 2003, the Company filed a Report on
Form  8-K  announcing  the  postponement and restructuring of approximately $1.1
million  of  its  supplier debt as part of its comprehensive plan to restructure
the  Company.



SIGNATURES

Pursuant  to  the  requirements  of the Securities and Exchange Act of 1934, the
registrant  had  duly  caused  this  report  to  be  signed on its behalf by the
undersigned  thereunto  duly  authorized.

                                         SENTRY  TECHNOLOGY  CORPORATION
                                         -------------------------------


Date:  August  14,  2003                 By:     /S/   PETER  J.  MUNDY
       -----------------                         ----------------------
                                                 Peter  J.  Mundy,
                                                 Vice  President - Finance and
                                                 Chief  Financial  Officer
                                                 (Principal  Financial  and
                                                    Accounting  Officer)



<PAGE>


                                 CERTIFICATIONS

I,  Peter  L.  Murdoch,  certify  that:

1.     I have reviewed this quarterly report on Form 10-QSB of Sentry Technology
Corporation;

2.     Based  on my knowledge, this quarterly report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not misleading with respect to the period covered by this quarterly
report;


3.     Based  on  my  knowledge,  the  financial statements, and other financial
information  included  in  this quarterly report, fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods presented in this quarterly report;


4.     The  registrant's  other  certifying  officers  and I are responsible for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-14  and  15d-14)  for  the  registrant  and  have:


a)     designed  such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is  made  known  to  us by others within those entities, particularly during the
period  in  which  this  quarterly  report  is  being  prepared;

b)     evaluated  the  effectiveness of the registrant's disclosure controls and
procedures  as  of  a  date  within  90  days  prior  to the filing date of this
quarterly  report  (the  "Evaluation  Date");  and


c)     presented  in  this  quarterly  report  our  conclusions  about  the
effectiveness  of the disclosure controls and procedures based on our evaluation
as  of  the  Evaluation  Date;


5.     The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of  registrant's  board  of  directors  (or  persons  performing  the equivalent
functions):

a)     all  significant  deficiencies  in  the  design  or operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and  have  identified for the
registrant's  auditors  any  material  weaknesses  in  internal  controls;  and

b)     any  fraud,  whether  or  not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6.     The  registrant's  other certifying officers and I have indicated in this
quarterly  report  whether  or  not  there  were significant changes in internal
controls  or  in other factors that could significantly affect internal controls
subsequent  to  the date of our most recent evaluation, including any corrective
actions  with  regard  to  significant  deficiencies  and  material  weaknesses.

                          /s/  PETER  L.  MURDOCH
                          -------------------------------------------------

                          Peter  L.  Murdoch
                          President  and  Chief  Executive  Officer

                          August  14,  2003


<PAGE>

                                 CERTIFICATIONS

I,  Peter  J.  Mundy,  certify  that:

1.     I have reviewed this quarterly report on Form 10-QSB of Sentry Technology
Corporation;

2.     Based  on my knowledge, this quarterly report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not misleading with respect to the period covered by this quarterly
report;

3.     Based  on  my  knowledge,  the  financial statements, and other financial
information  included  in  this quarterly report, fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods presented in this quarterly report;

4.     The  registrant's  other  certifying  officers  and I are responsible for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-14  and  15d-14)  for  the  registrant  and  have:

a)     designed  such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is  made  known  to  us by others within those entities, particularly during the
period  in  which  this  quarterly  report  is  being  prepared;

b)     evaluated  the  effectiveness of the registrant's disclosure controls and
procedures  as  of  a  date  within  90  days  prior  to the filing date of this
quarterly  report  (the  "Evaluation  Date");  and

c)     presented  in  this  quarterly  report  our  conclusions  about  the
effectiveness  of the disclosure controls and procedures based on our evaluation
as  of  the  Evaluation  Date;

5.     The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of  registrant's  board  of  directors  (or  persons  performing  the equivalent
functions):

a)     all  significant  deficiencies  in  the  design  or operation of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and  have  identified for the
registrant's  auditors  any  material  weaknesses  in  internal  controls;  and

b)     any  fraud,  whether  or  not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6.     The  registrant's  other certifying officers and I have indicated in this
quarterly  report  whether  or  not  there  were significant changes in internal
controls  or  in other factors that could significantly affect internal controls
subsequent  to  the date of our most recent evaluation, including any corrective
actions  with  regard  to  significant  deficiencies  and  material  weaknesses.

                          /s/  PETER  J.  MUNDY
                          -------------------------------------------------

                          Peter  J.  Mundy
                          Vice  President  and  Chief  Financial  Officer

                          August  14,  2003




<PAGE>

Exhibit  99.1


  CERTIFICATION PURSUANT TO 18 U.S.C.SS.1350, AS ADOPTED PURSUANT TO SECTION 906
                       OF THE SARBANES-OXLEY ACT OF 2002


     In  connection  with  the  Quarterly  Report on Form 10-QSB for the quarter
ended  June  30,  2003 of Sentry Technology Corporation (the "Company") as filed
with  the  Securities and Exchange Commission on the date hereof (the "Report"),
I, Peter L. Murdoch, President and Chief Executive Officer, certify, pursuant to
18  U.S.C.  ss.1350,  as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of
2002,  that, to the best of my knowledge: (1) the Report fully complies with the
requirements  of  Section  13(a) of the Securities Exchange Act of 1934; and (2)
the  information  contained  in  the  Report  fairly  presents,  in all material
respects,  the  financial  condition  and  results of operations of the Company.




                          /s/  PETER  L.  MURDOCH
                          -------------------------------------------------

                          Peter  L.  Murdoch
                          President  and  Chief  Executive  Officer

                          August  14,  2003



<PAGE>


Exhibit  99.2


  CERTIFICATION PURSUANT TO 18 U.S.C.SS.1350, AS ADOPTED PURSUANT TO SECTION 906
                        OF THE SARBANES-OXLEY ACT OF 2002


     In  connection  with  the  Quarterly  Report on Form 10-QSB for the quarter
ended  June  30,  2003 of Sentry Technology Corporation (the "Company") as filed
with  the  Securities and Exchange Commission on the date hereof (the "Report"),
I, Peter J. Mundy, Vice President and Chief Financial Officer, certify, pursuant
to 18 U.S.C. ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of
2002,  that, to the best of my knowledge: (1) the Report fully complies with the
requirements  of  Section  13(a) of the Securities Exchange Act of 1934; and (2)
the  information  contained  in  the  Report  fairly  presents,  in all material
respects,  the  financial  condition  and  results of operations of the Company.




                          /s/  PETER  J.  MUNDY
                          -------------------------------------------------

                          Peter  J.  Mundy
                          Vice  President  and  Chief  Financial  Officer

                          August  14,  2003