FORM 10-Q

                       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, 2002

                                       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 registrant 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  15, 2002, there were 78,042,842 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,  2002  and  December  31,  2001                   3

     Condensed  Consolidated  Statements  of  Operations  --
     Three  Months  Ended  March  31,  2002  and  2001            4

     Condensed  Consolidated  Statements  of  Cash  Flows  --
     Three  Months  Ended  March  31,  2002  and  2001            5

     Notes  to  Condensed  Consolidated  Financial
     Statements  --  March  31,  2002                          6  -  9


Item  2.  Management's  Discussion  and  Analysis  of
          Financial  Condition  and  Results  of  Operations   9  -  11



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

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


Signatures                                                       12


<PAGE>

SENTRY  TECHNOLOGY  CORPORATION
CONSOLIDATED  BALANCE  SHEETS
(In  thousands)
<TABLE>
<CAPTION>

<S>                                                            <C>          <C>
                                                                March 31,    December 31,
                                                                  2002          2001
                                                               -----------  --------------

ASSETS
-------------------------------------------------------------
CURRENT ASSETS
  Cash and cash equivalents . . . . . . . . . . . . . . . . .  $      150   $         423
  Accounts receivable, less allowance for doubtful
     accounts of $773 and $763, respectively. . . . . . . . .       2,906           2,713
  Inventories . . . . . . . . . . . . . . . . . . . . . . . .       4,634           4,740
  Prepaid expenses and other current assets . . . . . . . . .         468             399
                                                               -----------  --------------
    Total current assets. . . . . . . . . . . . . . . . . . .       8,158           8,275

PROPERTY, PLANT AND EQUIPMENT, net. . . . . . . . . . . . . .       2,845           2,962
OTHER ASSETS. . . . . . . . . . . . . . . . . . . . . . . . .         414             324
                                                               -----------  --------------

                                                               $   11,417   $      11,561
                                                               ===========  ==============

LIABILITIES AND SHAREHOLDERS' EQUITY
-------------------------------------------------------------
CURRENT LIABILITIES
  Revolving line of credit and term loan. . . . . . . . . . .  $    2,783   $       2,599
  Accounts payable. . . . . . . . . . . . . . . . . . . . . .       1,733           1,153
  Accrued liabilities . . . . . . . . . . . . . . . . . . . .       1,449           1,864
  Obligations under capital leases -
     current portion. . . . . . . . . . . . . . . . . . . . .         138             121
  Deferred income . . . . . . . . . . . . . . . . . . . . . .         194             303
                                                               -----------  --------------
    Total current liabilities . . . . . . . . . . . . . . . .       6,297           6,040

OBLIGATIONS UNDER CAPITAL LEASES -
  non-current portion . . . . . . . . . . . . . . . . . . . .       2,579           2,630
                                                               -----------  --------------
    Total liabilities . . . . . . . . . . . . . . . . . . . .       8,876           8,670

COMMON SHAREHOLDERS' EQUITY
  Common stock. . . . . . . . . . . . . . . . . . . . . . . .          64              62
  Additional paid-in capital. . . . . . . . . . . . . . . . .      44,521          44,403
  Accumulated deficit . . . . . . . . . . . . . . . . . . . .     (41,924)        (41,574)
  Receivable from shareholder                                        (120)            ---
                                                               -----------  --------------
    Total common shareholders' equity . . . . . . . . . . . .       2,541           2,891
                                                               -----------  --------------
                                                               $   11,417   $      11,561
                                                               ===========  ==============


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>
                                                                     Three Months Ended
                                                                         March 31,
                                                               -----------------------------
                                                                 2002                 2001
                                                               --------             --------


REVENUES. . . . . . . . . . . . . . . . . . . . . . . . . . .  $   4,742            $  4,670

COSTS AND EXPENSES:
  Cost of sales . . . . . . . . . . . . . . . . . . . . . . .      2,148               2,391
  Customer service expenses . . . . . . . . . . . . . . . . .      1,279               1,129
  Selling, general and administrative expenses. . . . . . . .      1,382               1,522
  Research and development. . . . . . . . . . . . . . . . . .        151                 175
                                                               ---------            --------

                                                                   4,960               5,217
                                                               ---------            --------

OPERATING LOSS. . . . . . . . . . . . . . . . . . . . . . . .       (218)               (547)

INTEREST EXPENSE. . . . . . . . . . . . . . . . . . . . . . .        132                 147
                                                               ---------            --------

LOSS BEFORE INCOME TAXES. . . . . . . . . . . . . . . . . . .       (350)               (694)

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

NET LOSS. . . . . . . . . . . . . . . . . . . . . . . . . . .       (350)               (694)

PREFERRED STOCK DIVIDENDS                                            ---                 (25)

RETURN TO COMMON SHAREHOLDERS FROM
  REDEMPTION OF PREFERRED STOCK                                      ---              27,198
                                                               ---------            --------

NET INCOME (LOSS) ATTRIBUTED TO
  COMMON SHAREHOLDERS . . . . . . . . . . . . . . . . . . . .  $    (350)            $26,479
                                                               =========            ========

NET INCOME (LOSS) PER COMMON SHARE
       Basic and diluted. . . . . . . . . . . . . . . . . . .  $   (0.01)            $  0.46
                                                               =========            ========

WEIGHTED AVERAGE COMMON SHARES
       Basic and diluted. . . . . . . . . . . . . . . . . . .     61,654              57,445
                                                               =========            ========


See notes to the condensed consolidated financial statements.

</TABLE>


<PAGE>
SENTRY  TECHNOLOGY  CORPORATION
CONDENSED  CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
(In  thousands)
<TABLE>
<CAPTION>

<S>                                                                <C>                  <C>
                                                                        Three Months Ended
                                                                             March 31,
                                                                   ----------------------------
                                                                     2002                2001
                                                                   --------            --------


CASH FLOWS FROM OPERATING ACTIVITIES:
-----------------------------------------------------------------
  Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . .  $    (350)           $  (694)
  Adjustments to reconcile net loss
     to net cash used in operating activities:
     Depreciation and amortization of security
        devices and property, plant and equipment . . . . . . . .        122                131
     Amortization of intangibles and other assets . . . . . . . .         12                  7
     Provision for bad debts. . . . . . . . . . . . . . . . . . .         10                 13
  Changes in operating assets and liabilities:
     Accounts receivable. . . . . . . . . . . . . . . . . . . . .       (203)              (112)
     Inventories. . . . . . . . . . . . . . . . . . . . . . . . .        106                712
     Accounts payable and accrued liabilities . . . . . . . . . .        165               (952)
     Other, net . . . . . . . . . . . . . . . . . . . . . . . . .       (273)               312
                                                                   ---------           --------

    Net cash used in operating activities . . . . . . . . . . . .       (411)              (583)
                                                                   ---------           --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property, plant and equipment, net. . . . . . . . .         (3)                (4)
  Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . .         (9)                (3)
                                                                   ---------           --------

    Net cash used in investing activities . . . . . . . . . . . .        (12)                (7)
                                                                   ---------           --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net borrowings under the revolving line of credit and term loan        184               (128)
  Repayment of obligations under capital leases . . . . . . . . .        (34)               (29)
  Proceeds from exercise of stock options                                120                ---
  Proceeds from sale of stock, net                                       ---              2,370
  Receivable from stock options and stock sale. . . . . . . . . .       (120)            (2,000)
                                                                   ---------           --------

    Net cash provided by financing activities . . . . . . . . . .        150                213
                                                                   ---------           --------

DECREASE IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . . . .       (273)              (377)

CASH AND CASH EQUIVALENTS, at beginning of period . . . . . . . .        423                927
                                                                   ---------           --------
CASH AND CASH EQUIVALENTS, at end of period . . . . . . . . . . .  $     150           $    550
                                                                   =========           ========


See notes to the condensed consolidated financial statements.

</TABLE>

<PAGE>

SENTRY  TECHNOLOGY  CORPORATION
NOTES  TO  CONDENSED  CONSOLIDATED  FINANCIAL  STATEMENTS
MARCH  31,  2002


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 "Effective Date").  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  consolidated  financial  statements  are  unaudited.  In  the  opinion  of
management,  all  adjustments,  consisting  of  normal  recurring  adjustments
necessary  for  a fair presentation of the financial information for the periods
indicated,  have  been included.  Interim results are not necessarily indicative
of  results  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,  2001,  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.
-------------------------------------------------------
On  January  8,  2001,  Dialoc ID Holdings B.V. ("Dialoc ID"), formerly known as
Dutch  A&A  Holding, B.V., acquired 23,050,452 shares of our common stock for $3
million,  of  which  $1 million was paid in January 2001, $1 million was paid on
April 30, 2001 and the remaining $1 million was paid on August 31, 2001.  Dialoc
ID  is a Netherlands company which, through its subsidiaries, is in the business
of  development,  manufacture,  sale  and  distribution  of  various  kinds  of
identification,  access  control  and anti-theft electronic article surveillance
systems  and  accessories.  Concurrent  with  the  share purchase agreement, the
Company  entered  into  a  distribution  agreement  with  Dialoc ID allowing the
Company access to new products of Dialoc ID and allowing Dialoc ID access to the
Company's  products  for  an  initial  period  of  not  less  than  two  years.

As of January 8, 2001, Dialoc ID owned 37.5% of the Company's outstanding common
stock.  Under  the  share  purchase  agreement,  at any time prior to January 8,
2002,  Dialoc ID had the right to increase its ownership of the Company's common
stock  to a total of 51% of the shares of common stock then outstanding.  If the
average  market  value  of  the Company's common stock, measured over any 10-day
trading  period  during  the  one  year period following January 8, 2001, was at
least  $15.0  million,  the  purchase  price  for the additional shares shall be
determined  by multiplying the actual number of shares to be purchased by $.001.
In  November  2001, this market capitalization threshold was met.  At that time,
our Board of Directors agreed to extend Dialoc ID's purchase right until January
8, 2003 in exchange for an extension of the distribution agreement for one year.
On  May  15,  2002,  Dialoc  ID  exercised  their  right  to purchase 14,500,000
additional  common  shares  at a price of $.001 per share.  Currently, Dialoc ID
owns  48.1% of the Company's common stock. Further, the share purchase agreement
provides  that  at any time prior to January 8, 2003, Dialoc ID may increase its
ownership  of  the  Company's  common  stock  to a total of 60% of the shares of
common  stock  then  outstanding.  The  purchase price for the additional shares
shall be determined as follows: If the average market value of the common stock,
measured over a 10-day period during the two years preceding January 8, 2003, is
at  least $25 million, the purchase price shall be determined by multiplying the
actual  number  of  shares  to  be  purchased by $.001.  If Dialoc ID previously
exercised  its  right  to acquire shares increasing its investment to 51% of the
Company's  common  stock,  but  the average market value test was not met at the
time  of the second purchase, then the purchase price shall be $3.5 million.  As
a  condition  to the investment by Dialoc ID, the Company's stockholders elected
three  nominees  of  Dialoc ID to the Board of Directors at a Special Meeting of
Stockholders  on  December  8,  2000.  If  Dialoc ID has not acquired 51% of the
Company's  common  stock by January 8, 2003, one of the three nominees of Dialoc
ID  will  resign and be replaced, with the consent of Dialoc ID, by a nominee of
the  Company's  directors  who  are  not  nominated  by  Dialoc  ID.

In  addition  to  the  election  of  three nominees of Dialoc ID to the Board of
Directors,  other  matters  which  were approved at the December 8, 2000 Special
Meeting  of Stockholders and became effective on January 8, 2001 were amendments
to  the  Company's  certificate of incorporation to: (i) permit the payment of a
dividend  of  additional  shares of Class A Preferred Stock at the rate of 0.075
shares  of  Class  A  Preferred  Stock for each share of Class A Preferred Stock
held;  (ii) to reclassify Class A Preferred Stock into shares of common stock on
a ratio of five shares of common stock for each share of Class A Preferred Stock
outstanding; and (iii) to increase the number of the Company's authorized shares
of  common  stock  to  140,000,000.   As  a  result  of  the  dividend  and
reclassification,  28,666,660  common  shares  were  issued  to  former  Class A
Preferred  shareholders.

<PAGE>

The reclassification of the Class A Preferred Shares resulted in a return to the
common shareholders of $27.2 million, which was recorded in the first quarter of
2001.  This  amount  represents  the difference between the fair market value of
the common stock issued and the carrying amount of the preferred stock redeemed.


NOTE  C  --  Financial  Condition  and  Liquidity
-------------------------------------------------
We  have  incurred  reduced  revenue  levels,  decreased  financial position and
recurring  operating  losses  over  the  past  several years.  To strengthen our
financial  position,  a  number  of  activities  have  been initiated including:

-     Entering  into  a  new  three-year  financing  agreement.
-     Signing  of  a  distribution  agreement  with  Dialoc ID providing us with
      access  to  new  products  and  shared  technologies.
-     Improvements  in  existing  products  and  service  capabilities.
-     Additions  to  direct  sales  staff  and emphasis on growing international
      dealer  base.
-     Various  cost  cutting  and  cost  saving  initiatives.

We  will  require positive cash flow from operations to meet our working capital
needs  over  the  next  twelve  months.  We  anticipated  receiving  significant
additional  purchase orders from specific customers during the first four months
of  2002.  While  we  continue  to  believe  that  these purchase orders will be
received  later this year, the delays we have experienced have caused us to: (i)
operate  in  a  cash  flow  deficit  for the first four months of the year: (ii)
borrow the maximum amounts available under our credit facility; and (iii) pursue
potential  sources  of  debt  or  equity  financing

We  anticipate  revenue  growth in new and existing markets.  We are striving to
improve  our  gross  margin and control our selling expenses and our general and
administrative  expenses.  There  can  be no assurance, however, that changes in
our  plans  or  other  events  affecting  our  operations  will  not  result  in
accelerated  or  unexpected  cash requirements, or that we will be successful in
achieving positive cash flow from operations or obtaining financing.  Our 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.  In  the  event  that
sufficient  positive  cash  flow  from operations is not generated, we will seek
additional financing to satisfy current operating cash flow deficiencies.  There
can  be  no  assurance,  however, that additional financing will be available on
terms  that  are satisfactory to the Company, or that any such financing will be
sufficient  to  provide  the  full  amount  of  funding  necessary.


NOTE  D  --  Revolving  Line  of  Credit  and  Term  Loan
---------------------------------------------------------
On March 22, 2002, we entered into a new three year revolving line of credit and
term  loan  with  the  CIT  Group/Business  Credit,  Inc.  ("CIT")  for  maximum
borrowings  of  $8  million, which are subject to certain limitations based on a
percentage  of  eligible  accounts  receivable and inventories as defined in the
agreement.  Interest  on  the revolving line of credit is payable monthly at the
JPMorgan Chase Bank prime rate (4.75% at March 31, 2002), plus 2% per annum.  We
are  required  to pay a commitment fee of 0.375% per annum on any unused portion
of  the credit facility.  Borrowings under the line are secured by substantially
all  of  our  assets.  The  terms  of the agreement, among other matters, places
restrictions on capital expenditures and prohibits the payment of dividends.  In
addition, we entered into a $100,000 term loan with CIT.  The principal shall be
repaid  to  CIT in twelve equal monthly installments of $8,333 beginning May 31,
2002.  Interest on the term note is at the JPMorgan Chase Bank prime plus 2.25%.

<PAGE>


SENTRY  TECHNOLOGY  CORPORATION
NOTES  TO  CONDENSED  CONSOLIDATED  FINANCIAL  STATEMENTS
MARCH  31,  2002

NOTE  E  --  Inventories
------------------------
Inventories  consist  of  the  following:

                                March  31,  2002            December  31,  2001
                                ----------------            -------------------
                                               (in  thousands)

Raw  materials                  $     1,275                 $     1,139
Work-in-process                         937                       1,238
Finished  goods                       2,422                       2,363
                                      -----                       -----
                                $     4,634                 $     4,740
                                =     =====                 =     =====

Reserves  for excess and obsolete inventory totaled $3,387,000 and $3,497,000 as
of  March 31, 2002 and December 31, 2001, respectively and have been included as
a  component  of  the  above  amounts.


NOTE  F  --  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.  In addition, in 2001 Dialoc ID received an annual management fee
for  product  marketing  and  product  engineering management from Sentry in the
amount  of  $100,000.  Also, Peter Murdoch, a shareholder of Dialoc ID, receives
an  annual salary of $150,000 in the capacity of President of Sentry.  Purchases
from  Dialoc ID were $3,000 and $60,000 in the quarters ended March 31, 2002 and
March  31,  2001,  respectively.  Services and sales to Dialoc ID were $5,000 in
the  quarter  ended  March  31, 2002.  The net amount payable to Dialoc ID as of
March  31,  2002  is  $60,000.

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  4.75%)  less  .75%.  The  note  has been
reflected  as  a  reduction  of  shareholders'  equity  on  the  balance  sheet.


NOTE  G  --  Recent  Accounting  Pronouncements
-----------------------------------------------
In  June  2001,  the  Financial  Accounting  Standards  Board  issued  Financial
Accounting  Standards  No.  142 ("SFAS No. 142"), "Goodwill and Other Intangible
Assets."  SFAS No. 142 addresses financial accounting and reporting for acquired
goodwill  and  other  intangible  assets.  Under SFAS No. 142, goodwill and some
intangible  assets  will  no  longer  be  amortized,  but  rather  reviewed  for
impairment on a periodic basis. The provisions of this Statement are required to
be  applied  starting with fiscal years beginning after December 15, 2001.  This
Statement  is  required  to  be applied at the beginning of the Company's fiscal
year and to be applied to all goodwill and other intangible assets recognized in
its  financial  statements  at  that  date.  Impairment  losses for goodwill and
certain  intangible  assets  that  arise  due to the initial application of this
Statement are to be reported as resulting from a change in accounting principle.
Goodwill  and  intangible  assets  acquired after June 30, 2001, will be subject
immediately  to  the provisions of this Statement.  The adoption of SFAS No. 142
did  not  have  a  material  impact  on  our  financial  statements.

In  August  2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations."  SFAS  No.  143  addresses  financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated  asset  retirement costs.  We are required to adopt the provisions of
SFAS  No.  143  effective  January 1, 2003.  The adoption of SFAS No. 143 is not
expected  to  have  a  material  impact  on  our  financial  statements.

In  August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal  of Long-Lived Assets." SFAS No. 144 addresses financial accounting and
reporting  for  the  impairment  or  disposal  of  long-lived  assets.  We
adopted  SFAS  No.  144  in  the  first  quarter  of 2002.  The adoption of this
statement  did  not  have  a  material  effect  on  our  financial  statements.

<PAGE>

SENTRY  TECHNOLOGY  CORPORATION
NOTES  TO  CONDENSED  CONSOLIDATED  FINANCIAL  STATEMENTS
MARCH  31,  2002


NOTE  H  --  Earnings  Per  Share
---------------------------------
The  earnings  per  share calculations (basic and diluted) at March 31, 2002 and
2001  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  and warrants have been excluded from the net loss per share
calculation  at  March 31, 2002 because their effect would be antidilutive.  For
the period ended March 31, 2001 options and warrants have been excluded from the
calculation because the exercise price was greater than the average market price
for  the  quarter.


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-Q  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:
------------------------

Consolidated revenues were 2% higher in the quarter ended March 31, 2002 than in
the quarter ended March 31, 2001.  Our overall domestic revenues continued to be
impacted  by  the soft economic environment, resulting in a slowdown or delay in
new  retail  store  openings of some of our customers.  This is reflected in the
reduction  in  our  backlog  of  orders  at March 31, 2002 to approximately $4.5
million  from approximately $5.2 million at March 31, 2001.   Total revenues for
the  periods  presented  are  broken  out  as  follows:

<TABLE>
<CAPTION>
<S>                                              <C>                <C>                <C>
                                                    Q-1                 Q-1            % Change
                                                   2002                2001        Increase(Decrease)
                                                        (in thousands)

EAS . . . . . . . . . . . . . . . . . . . . . . .$   691            $ 1,335             (48)
CCTV. . . . . . . . . . . . . . . . . . . . . . .  1,767              1,692               4
SentryVision. . . . . . . . . . . . . . . . . . .    639                327              95
3M library products . . . . . . . . . . . . . . .    114                126             (10)
                                                 -------            -------            -----
Total sales . . . . . . . . . . . . . . . . . . .  3,211              3,480              (8)
Service revenues and other. . . . . . . . . . . .  1,531              1,190              29
                                                 -------            -------            -----
Total revenues. . . . . . . . . . . . . . . . . .$ 4,742            $ 4,670               2
                                                 =======            =======            =====
</TABLE>

<PAGE>


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

Direct sales of EAS products were lower in the first quarter of 2002 as compared
to  the  same period in the prior year in part as a result of lower sales to our
largest EAS customer, which has indicated it will open fewer new stores in 2002.
Sales  of  EAS  products  to  Sensormatic  were not significant in either of the
periods  presented.  The  increase in CCTV revenues is primarily a result of the
completion  of  the  installations  that  were  delayed  at the end of 2001. The
increase in SentryVision sales revenues in the first quarter of 2002 is a result
of the continuing market acceptance of the new SmartTrack system. We continue to
see  a  growing  trend for product acceptance and increased market opportunities
for  traveling camera systems both domestically and internationally. Sales of 3M
library  products  declined  as  we focused our sales efforts on Sentry produced
products.  Service  revenues increased as a result of the higher base of systems
no  longer  under  warranty.

Cost  of sales were 67% of total sales in the three month period ended March 31,
2002  compared  to  69%  in the same period of the prior year.  The reduction in
percentage  of  sales  in the first quarter of 2001 was primarily due to greater
plant  efficiencies resulting from higher production levels than in the previous
year,  which  offset  competitive  pricing pressures during the current quarter.

Customer  service  expenses were 13% higher in the first quarter of 2002 than in
the  first  quarter  of  2001  primarily  as a result of the increase in service
billings  on a larger installed base of systems and the increased use of outside
contractors  needed  to  meet  various  customers'  installation  deadlines.

Selling,  general  and  administrative expenses were 9% lower in the three month
period  ended  March  31,  2002 when compared to the same period of the previous
year  primarily  as  a  result  of  lower  warranty  costs  and  a  reduction in
facilities.

Research  and  development  costs  were  lower in the first quarter of 2002 when
compared  to  the first quarter of 2001 due to lower facilities cost as a result
of  a  reduction  in  space.

Net  interest  expense for the first quarter of 2002 decreased when compared due
to  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 $0.4 million in the
quarter  ended  March  31, 2002 as compared to a net loss of $0.7 million in the
quarter  ended  March  31,  2001.

We  recorded  preferred  stock dividends of $25,000 in the first quarter of 2001
prior  to  the  redemption  of  the  preferred  stock  on  January  8,  2001.

Effective January 8, 2001, and just prior to the Dialoc ID investment, there was
a  payment  of a dividend of additional shares of Class A Preferred Stock at the
rate  of  0.075  shares  of  Class  A  Preferred Stock for each share of Class A
Preferred  Stock held and immediately thereafter a reclassification of the Class
A  Preferred  Stock  into common stock at a ratio of five shares of common stock
for  each share of Class A Preferred Stock outstanding.  The reclassification of
the  Class A Preferred Shares resulted in a return to the common shareholders of
$27.2  million,  which  was  recorded in the first quarter of 2001.  This amount
represents  the  difference  between  the  fair market value of the common stock
issued  and  the  carrying  amount  of  the  preferred  stock  redeemed.

Liquidity  and  Capital  Resources  as  of  March  31,  2002
------------------------------------------------------------
We  have  incurred  reduced  revenue  levels,  decreased  financial position and
recurring  operating losses over the past several years.  To further address the
continuing  losses,  our  business  plan  for  2002  includes  the  following:

-     Entering  into  a  new  three-year  financing  agreement.
-     Addition  of  new  products, including high-end EAS systems and disposable
      tags  and  labels,  proximity  access control and RFID, through our
      distribution agreement  with  Dialoc  ID.
-     Increased  promotion  of  SmartTrack,  our  new  entry in the SentryVision
      family  of  products.

<PAGE>

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

-     Strengthening  our  international  dealer  network  with  new  and  more
      financially  stronger  business  partners.
-     Joint participation with Dialoc ID in trade show activity and a refocus on
      expanding  business  with  existing  customers.
-     Continuation  and  expansion  of  our  Service  Partner program to augment
      service  provided  by  our  employees.
-     Further  subletting  of  office  space  in  our  corporate  offices.
-     Additions  to  direct  sales  staff  and emphasis on growing international
      dealer  base.
-     Various  additional  cost  cutting  and  cost  saving  initiatives.

On March 22, 2002, we entered into a new three year revolving line of credit and
term  loan  with  the  CIT  Group/Business  Credit,  Inc.  ("CIT")  for  maximum
borrowings  of  $8  million, which are subject to certain limitations based on a
percentage  of  eligible  accounts  receivable and inventories as defined in the
agreement.  Interest  on  the revolving line of credit is payable monthly at the
JPMorgan Chase Bank prime rate (4.75% at March 31, 2002), plus 2% per annum.  We
are  required  to pay a commitment fee of 0.375% per annum on any unused portion
of  the credit facility.  Borrowings under the line are secured by substantially
all  of  our  assets.  The  terms  of the agreement, among other matters, places
restrictions on capital expenditures and prohibits the payment of dividends.  In
addition, we entered into a $100,000 term loan with CIT.  The principal shall be
repaid  to  CIT in twelve equal monthly installments of $8,333 beginning May 31,
2002.  Interest  on  the  term  note  is  at  prime  plus  2.25%.

We  will  require positive cash flow from operations to meet our working capital
needs  over  the  next  twelve  months.  We  anticipated  receiving  significant
additional  purchase orders from specific customers during the first four months
of  2002.  While  we  continue  to  believe  that  these purchase orders will be
received  later this year, the delays we have experienced have caused us to: (i)
operate  in  a  cash  flow  deficit  for the first four months of the year: (ii)
borrow the maximum amounts available under our credit facility; and (iii) pursue
potential  sources  of  debt  or  equity  financing.

We  anticipate  revenue  growth in new and existing markets.  We are striving to
improve  our  gross  margin and control our selling expenses and our general and
administrative  expenses.  There  can  be no assurance, however, that changes in
our  plans  or  other  events  affecting  our  operations  will  not  result  in
accelerated  or  unexpected  cash requirements, or that we will be successful in
achieving positive cash flow from operations or obtaining financing.  Our 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.  In  the  event  that
sufficient  positive  cash  flow  from operations is not generated, we will seek
additional financing to satisfy current operating cash flow deficiencies.  There
can  be  no  assurance,  however, that additional financing will be available on
terms  that  are satisfactory to the Company, or that any such financing will be
sufficient  to  provide  the  full  amount  of  funding  necessary.

Currently,  under  the  terms of the share purchase agreement, Dialoc ID has the
right  to acquire 51% of the common stock.  On May 15, 2002, Dialoc ID exercised
their  purchase right for an additional 14,500,000 shares of newly issued common
stock  at  an  exercise  price  of  $0.001  per  share.  As  a  result  of  this
transaction, Dialoc ID owns 48.1% of our common stock outstanding.  In addition,
under certain conditions more fully described in Note B, Dialoc ID has the right
to  acquire  additional shares during the two year period following the closing,
up  to  an  aggregate  holding  of  60%  of  the  common stock then outstanding.


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


<PAGE>
------
SENTRY  TECHNOLOGY  CORPORATION
-------------------------------
PART  II  -  OTHER  INFORMATION
-------------------------------


Item  6.     Exhibits  and  Reports  on  Form  8-K

(a)     List  of  Exhibits:  None

(b)     Reports  on  Form  8-K - There were no reports on Form 8-K filed for the
        three  months  ended March  31,  2002.


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  15,  2002             By:     /S/   PETER  J.  MUNDY
          --------------             --------------------------------------
                                     Peter  J.  Mundy,  Vice  President
                                     Finance  and Chief  Financial  Officer
                                     (Principal  Financial  and
                                      Accounting  Officer)