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 March 31, 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  May  13, 2003, there were 82,560,347 shares of Common Stock outstanding.



<PAGE>

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

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

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

Item  1.     Financial  Statements  (Unaudited)

     Consolidated  Balance  Sheets  --
     March  31,  2003  and  December  31,  2002                      3

     Condensed  Consolidated  Statements  of  Operations  --
     Three  Months  Ended  March  31,  2003  and  2002               4

     Condensed  Consolidated  Statements  of  Cash  Flows  --
     Three  Months  Ended  March  31,  2003  and  2002               5

     Notes  to  Condensed  Consolidated  Financial
     Statements  --  March  31,  2003                             6  -  8


Item  2.     Management's  Discussion  and  Analysis  of
     Financial  Condition  and  Results  of  Operations           8  -  11

Item  3.     Controls  and  Procedures                               11



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

Item  6.     Exhibits  and  Reports  on  Form  8-K                   11


Signatures                                                           11





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

Item  1.     Financial  Statements  (Unaudited)


SENTRY  TECHNOLOGY  CORPORATION
CONSOLIDATED  BALANCE  SHEETS
(In  thousands)

<TABLE>
<CAPTION>
<S>                                                             <C>          <C>
                                                                March 31,    December 31,
                                                                      2003            2002
                                                                -----------  --------------

ASSETS
--------------------------------------------------------------
CURRENT ASSETS
  Cash and cash equivalents. . . . . . . . . . . . . . . . . .  $      201   $         266
  Accounts receivable, less allowance for doubtful
     accounts of $233 and $303, respectively . . . . . . . . .       1,257           1,472
  Inventories. . . . . . . . . . . . . . . . . . . . . . . . .       2,457           3,145
  Prepaid expenses and other current assets. . . . . . . . . .         218             237
                                                                -----------  --------------
    Total current assets . . . . . . . . . . . . . . . . . . .       4,133           5,120

PROPERTY, PLANT AND EQUIPMENT, net . . . . . . . . . . . . . .       2,481           2,563
OTHER ASSETS . . . . . . . . . . . . . . . . . . . . . . . . .         294             309
                                                                -----------  --------------

                                                                $    6,908   $       7,992
                                                                ===========  ==============

LIABILITIES AND SHAREHOLDERS' EQUITY
--------------------------------------------------------------
CURRENT LIABILITIES
  Revolving line of credit and term loan . . . . . . . . . . .  $    1,536   $       2,067
  Accounts payable . . . . . . . . . . . . . . . . . . . . . .       1,882           1,807
  Accrued liabilities. . . . . . . . . . . . . . . . . . . . .       1,478           1,523
  Obligations under capital leases -
     current portion . . . . . . . . . . . . . . . . . . . . .          89              97
  Deferred income. . . . . . . . . . . . . . . . . . . . . . .         331             394
                                                                -----------  --------------
    Total current liabilities. . . . . . . . . . . . . . . . .       5,316           5,888

OBLIGATIONS UNDER CAPITAL LEASES -
  non-current portion. . . . . . . . . . . . . . . . . . . . .       2,532           2,555
                                                                -----------  --------------
    Total liabilities. . . . . . . . . . . . . . . . . . . . .       7,848           8,443

SHAREHOLDERS' EQUITY
  Common stock . . . . . . . . . . . . . . . . . . . . . . . .          83              78
  Additional paid-in capital . . . . . . . . . . . . . . . . .      44,521          44,521
  Accumulated deficit. . . . . . . . . . . . . . . . . . . . .     (45,424)        (44,930)
  Note receivable from shareholder . . . . . . . . . . . . . .        (120)           (120)
                                                                -----------  --------------
    Total shareholders' equity (deficit) . . . . . . . . . . .        (940)           (451)
                                                                -----------  --------------
                                                                $    6,908   $       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>
                                                                     Three Months Ended
                                                                          March 31,
                                                                    --------------------
<S>                                                            <C>                   <C>
                                                                              2003      2002
                                                               --------------------  --------


REVENUES. . . . . . . . . . . . . . . . . . . . . . . . . . .  $             3,574   $ 4,742

COSTS AND EXPENSES:
  Cost of sales . . . . . . . . . . . . . . . . . . . . . . .                1,652     2,148
  Customer service expenses . . . . . . . . . . . . . . . . .                1,121     1,279
  Selling, general and administrative expenses. . . . . . . .                1,024     1,382
  Research and development. . . . . . . . . . . . . . . . . .                  160       151
                                                               --------------------  --------

                                                                             3,957     4,960
                                                               --------------------  --------

OPERATING LOSS. . . . . . . . . . . . . . . . . . . . . . . .                 (383)     (218)

INTEREST EXPENSE. . . . . . . . . . . . . . . . . . . . . . .                  111       132
                                                               --------------------  --------

LOSS BEFORE INCOME TAXES. . . . . . . . . . . . . . . . . . .                 (494)     (350)

INCOME TAXES                                                                   ---       ---
                                                               --------------------  --------

NET LOSS. . . . . . . . . . . . . . . . . . . . . . . . . . .  $              (494)  $  (350)
                                                               ====================  ========

NET LOSS PER SHARE
       Basic and diluted. . . . . . . . . . . . . . . . . . .  $             (0.01)  $ (0.01)
                                                               ====================  ========

WEIGHTED AVERAGE SHARES
       Basic and diluted. . . . . . . . . . . . . . . . . . .               82,259    61,654
                                                               ====================  ========


See notes to the condensed consolidated financial statements.

</TABLE>

<PAGE>

SENTRY  TECHNOLOGY  CORPORATION
CONDENSED  CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
(In  thousands)
<TABLE>
<CAPTION>
                                                                         Three Months Ended
                                                                              March 31,
                                                                        --------------------
<S>                                                                <C>                   <C>
                                                                                  2003    2002
                                                                   --------------------  ------
CASH FLOWS FROM OPERATING ACTIVITIES:
-----------------------------------------------------------------
  Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . .  $              (494)  $(350)
  Adjustments to reconcile net loss
     to net cash provided by (used in) operating activities:
     Depreciation and amortization. . . . . . . . . . . . . . . .                  103     134
     Provision for bad debts. . . . . . . . . . . . . . . . . . .                   13      10
  Changes in operating assets and liabilities:
     Accounts receivable. . . . . . . . . . . . . . . . . . . . .                  202    (203)
     Inventories. . . . . . . . . . . . . . . . . . . . . . . . .                  688     106
     Accounts payable and accrued liabilities . . . . . . . . . .                   30     165
     Other, net . . . . . . . . . . . . . . . . . . . . . . . . .                  (35)   (273)
                                                                   --------------------  ------

    Net cash provided by (used in) operating activities . . . . .                  507    (411)
                                                                   --------------------  ------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property, plant and equipment, net. . . . . . . . .                  (14)     (3)
  Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . .                   (1)     (9)
                                                                   --------------------  ------

    Net cash used in investing activities . . . . . . . . . . . .                  (15)    (12)
                                                                   --------------------  ------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net borrowings under the revolving line of credit and term loan                 (531)    184
  Repayment of obligations under capital leases . . . . . . . . .                  (31)    (34)
  Proceeds from sale of stock, net                                                   5     ---
                                                                   --------------------  ------

    Net cash (used in) provided by financing activities . . . . .                 (557)    150
                                                                   --------------------  ------

DECREASE IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . . . .                  (65)   (273)

CASH AND CASH EQUIVALENTS, at beginning of period . . . . . . . .                  266     423
                                                                   --------------------  ------
CASH AND CASH EQUIVALENTS, at end of period . . . . . . . . . . .  $               201   $ 150
                                                                   ====================  ======


See notes to the condensed consolidated financial statements.


</TABLE>

<PAGE>


SENTRY  TECHNOLOGY  CORPORATION
NOTES  TO  CONDENSED  CONSOLIDATED  FINANCIAL  STATEMENTS
MARCH  31,  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  --  Investment  by  Dialoc  ID  Holdings  B.V.
-------------------------------------------------------
Dialoc ID Holdings B.V. ("Dialoc ID") increased their ownership in Sentry to 51%
on  January  7,  2003  through  the exercise of 4,516,475 shares of newly issued
common  stock  at  an exercise price of $0.001 per share, in accordance with the
provisions  of  a  share  purchase  agreement.


NOTE  C  --  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.  The  revised  business  plan  calls for the following:

-    Significantly downsize our operations including the elimination of
     approximately 60 of 117 positions to support a business with sales of
     approximately $15 million.
-    Negotiate with the current landlord to move out of its present corporate
     facility and relocate to a smaller and less costly facility.
-    Dedicate a substantial portion of our remaining resources towards
     maintaining and improving our relationships with our 30 largest customers.
-    Outsource all non-essential manufacturing and assembly operations to
     qualified subcontractors.
-    Further  expand our Service Partner program to augment service provided by
     our  employees.
-    Negotiate  a  settlement  with  past  due  trade  vendors.

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  Company  believes  the  successful
implementation  of  this  restructuring  will result in substantial gross margin
improvements  and  reductions  in  operating  expenses beginning after the first
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 March 31, 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  D  --  Inventories
------------------------
Inventories  consist  of  the  following:
                                March  31,  2003            December  31,  2002
                                ----------------            -------------------
                                               (in  thousands)
Raw  materials                    $     402                     $     513
Work-in-process                         586                           618
Finished  goods                       1,469                         2,014
                                      -----                         -----
                                  $   2,457                     $   3,145
                                  =   =====                     =   =====

Reserves  for excess and obsolete inventory totaled $3,593,000 and $3,610,000 as
of  March 31, 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 $1,000 and $3,000 in the quarters ended March 31, 2003 and
March  31,  2002,  respectively.  Services and sales to Dialoc ID were $4,000 in
the  quarter  ended  March  31, 2003.  The net amount payable to Dialoc ID as of
March  31,  2003  was  $120,000.

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  4.25%)  less  .75%.  The  note  has been
reflected  as  a  reduction  of  shareholders'  equity  on  the  balance  sheet.


NOTE  F  --  Earnings  Per  Share
---------------------------------
The  earnings  per  share calculations (basic and diluted) at March 31, 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 1,653,884 and 3,788,480 shares of common stock
with  a  weighted  average exercise price of $0.57 and $0.71 were outstanding at
March 31, 2003 and 2002, but were not included in the computation of diluted net
loss  per  share  because  their  effect  would  be  antidilutive.


<PAGE>

SENTRY  TECHNOLOGY  CORPORATION
NOTES  TO  CONDENSED  CONSOLIDATED  FINANCIAL  STATEMENTS
MARCH  31,  2003


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".


                                                   Three  Months  Ended
                                          March  31,  2003     March  31,  2002
                                          ----------------     ----------------
                                                     (in  thousands)

Net  loss,  as  reported                    $     (494)           $     (350)

Deduct:  Total  stock-based  employee
compensation expense  determined  under
the fair value method for all awards,
net  of  related  tax  effects                     (19)                 (110)
                                                 ------               -------
Pro-forma  net  loss                        $     (513)           $     (460)
                                            ===========           ===========
Net  loss  per  share:
Basic  and  Diluted  -  as  reported        $    (0.01)           $    (0.01)
                                            ===========           ===========
Basic  and  Diluted  -  pro  forma          $    (0.01)           $    (0.01)
                                            ===========           ===========

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
month  periods  ended  March  31,  2003  or  2002.


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 $4.5 million at March 31, 2002 to
approximately  $3.6  million  at  March 31, 2003. Consolidated revenues were 25%
lower  in  the  quarter ended March 31, 2003 than in the quarter ended March 31,
2002.  Total  revenues  for  the  periods  presented  are broken out as follows:

<TABLE>
<CAPTION>
                                                 Q-1          Q-1         % Change
<S>                                              <C>          <C>         <C>
                                                 2003         2002        Incr (Decr)
                                              ----------    --------      -----------
                                                   (in thousands)

EAS. . . . . . . . . . . . . . . . . . . . .  $   425       $   691         (38)
CCTV . . . . . . . . . . . . . . . . . . . .    1,477         1,767         (16)
SentryVision . . . . . . . . . . . . . . . .      373           639         (42)
3M library products. . . . . . . . . . . . .       45           114         (61)
                                              --------      --------       ------
Total sales. . . . . . . . . . . . . . . . .    2,320         3,211         (28)
Service revenues and other . . . . . . . . .    1,254         1,531         (18)
                                              --------      --------       ------
Total revenues . . . . . . . . . . . . . . .  $ 3,574       $ 4,742         (25)
                                              ========      ========       ======

</TABLE>


Direct sales of EAS products were lower in the first quarter of 2003 as compared
to  the  same  period  in  the  prior year as a result of lower sales to smaller
boutique  customers.  There  was  a  decrease in CCTV and SentryVision  revenues
from  Lowe's  Home Centers of approximately $0.8 million in the first quarter of
2003  as  compared  to  the first quarter 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.  While we terminated our distribution agreement
with  3M  for  library  products  as  of  the  end  of  2002, final installation
completions  continued  into  the  first  quarter of 2003.  Service revenues and
other  decreased  as  a  result  of lower installation revenue than in the prior
year.

Cost  of sales were 71% of total sales in the three month period ended March 31,
2003  compared  to  67%  in the same period of the prior year.  The reduction in
sales  in 2003 and related decrease in production levels resulted in significant
manufacturing  inefficiencies,  including  the  under  absorption  of  labor and
overhead.  In  addition,  cost of sales was negatively impacted during the first
quarter  of  2003  as  Sentry  prepared for the outsourcing of all manufacturing
operations.

Customer  service  expenses  were 12% lower in the first quarter of 2003 than in
the  first  quarter 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 26% lower in the three month
period  ended  March  31,  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.

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

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

Due to net operating losses, we have not provided for income taxes in any of the
periods  presented.

As  a  result  of  the  foregoing,  Sentry had a net loss of $0.5 million in the
quarter  ended  March  31, 2003 as compared to a net loss of $0.4 million in the
quarter  ended  March  31,  2002.


Liquidity  and  Capital  Resources  as  of  March  31,  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.  The  revised  business  plan  calls  for the
following:

-     Significantly downsize our operations including the elimination of
      approximately 60 of 117 positions to support a business with sales of
      approximately $15 million.
-     Negotiate  with  the current landlord to move out of its present corporate
      facility  and  relocate  to  a  smaller  and  less  costly  facility.
-     Dedicate  a  substantial  portion  of  our  remaining  resources  towards
      maintaining  and  improving  our  relationships  with  our 30 largest
      customers.
-     Outsource  all  non-essential  manufacturing  and  assembly  operations to
      qualified  subcontractors.
-     Further  expand our Service Partner program to augment service provided by
      our  employees.
-     Negotiate  a  settlement  with  past  due  trade  vendors.

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  Company  believes  the  successful
implementation  of  this  restructuring  will result in substantial gross margin
improvements  and  reductions  in  operating  expenses beginning after the first
quarter  of  2003.

As  of March 31, 2003, we had borrowings of approximately $1.5 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 first quarter of 2003,
we  funded $0.4 million in inventory purchases under this facility, all of which
was  repaid  before  the  end  of  the  quarter.

Currently,  Sentry  has  approximately  $1.5  million of past due debts with its
unsecured  trade  creditors.  During  the  quarter, we held a meeting with these
trade  creditors  and  an  informal  creditors committee was formed to represent
their  interests.  The  committee  was  provided  with  Sentry's  business plan,
including current and projected future financial statements and cash flows.  The
committee and Sentry negotiated a settlement that includes a cash payment of 10%
of  the  balance owed payable over the next three years commencing January 2004.
In  addition,  Sentry  would issue two shares of common stock for each dollar of
debt  owed.  That  offer  has  been sent to the trade creditors and to date, the
majority  of  the  trade  creditors  have  accepted.

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 March 31, 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.


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


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


Item  3.     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:

     (i)  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 January 7, 2003, we filed a Current Report on
Form  8-K disclosing a change in our independent public accountants.  On January
22,  2003,  we filed a Current Report on Form 8-K disclosing a change of control
in  our  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:   May  13,  2003       By:  /S/   PETER  J.  MUNDY
        --------------            ----------------------
                                  Peter  J.  Mundy,  Vice  President
                                  Finance  and Chief  Financial  Officer
                                 (Principal  Financial and Accounting Officer)




                                 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

May  13,  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

May  13,  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  March  31, 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

May  13,  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  March  31, 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

May  13,  2003