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 September 30, 2005

                                       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                                        96-11-3231714
     ----------                                        -------------
(State or other jurisdiction  of               (I.R.S. Employer Identification
incorporation  or organization)                               No.)


    1881  Lakeland  Avenue,  Ronkonkoma,  NY                       11779
  ---------------------------------------------                    -----

   (Address of principal executive offices)                      (Zip Code)

                                   631-739-2000
                                   ------------
              (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  November  11,  2005,  there  were  120,628,804  shares  of  Common Stock
outstanding.


<PAGE>



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



                                                        Page No.
                                                        --------

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

Item 1.     Financial Statements (Unaudited)

     Consolidated Balance Sheets --
     September 30, 2005 and December 31, 2004                 3

     Consolidated Statements of Operations --
     Three Months Ended September 30, 2005 and 2004
     And Nine Months Ended September 30, 2005 and 2004        4

     Consolidated Statements of Cash Flows --
     Nine Months Ended September 30, 2005 and 2004            5

     Notes to Consolidated Financial
     Statements - September 30, 2005                        6 - 10


Item 2.     Management's Discussion and Analysis of
     Financial Condition and Results of Operations         10 - 13


Item 3.     Controls and Procedures                        13 - 14



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

Item 6.     Exhibits and Reports on Form 8-K                  14


Signatures                                                    14



<PAGE>


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

Item 1.     Financial Statements (Unaudited)


<TABLE>
<CAPTION>


SENTRY TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
<S>                                                  <C>                   <C>
                                                     September 30,         December 31,
                                                        2005                  2004
                                                     -------------         ------------
                                                     (Unaudited)            (Audited)
ASSETS
--------------------------------------------------
CURRENT ASSETS
   Cash and cash equivalents                         $     978            $  1,965
   Accounts receivable, less allowance for doubtful
     accounts of $137 and $338, respectively             2,954               3,500
   Inventories                                           2,953               3,314
   Prepaid expenses and other current assets               451                 525
                                                    ----------           ---------
                Total current assets                     7,336               9,304

PROPERTY, PLANT AND EQUIPMENT, net. . . . . . . . .        641                 689
GOODWILL                                                 1,564               1,564
OTHER ASSETS. . . . . . . . . . . . . . . . . . . .        601                 690
                                                    ----------           ---------

                                                       $10,142             $12,247
                                                       =======             =======

LIABILITIES AND SHAREHOLDERS' EQUITY
---------------------------------------------------
CURRENT LIABILITIES
   Revolving line of credit and term loan            $   1,876            $  2,640
   Accounts payable                                        815                 799
   Accrued liabilities                                     974               1,146
   Obligations under capital leases - current portion        6                   5
   Deferred income                                         103                 169
                                                    ----------           ---------
                Total current liabilities                3,774               4,759

NOTES PAYABLE                                             ---                  189
OBLIGATIONS UNDER CAPITAL LEASES -
   non-current portion                                       3                   8
DEFFERED TAX LIABILITY. . . . . . . . . . . . . . .         34                  39
CONVERTIBLE DEBENTURES. . . . . . . . . . . . . . .      1,894               1,862
MINORITY INTEREST . . . . . . . . . . . . . . . . .      1,129               1,045
                                                    ----------             -------
                Total liabilities                        6,834               7,902

SHAREHOLDERS' EQUITY
   Common stock, $0.001 par value; authorized
         160,000 shares, issued and outstanding
         120,629 and 120,549 shares                        121                 121

   Additional paid-in capital                           48,783              48,779
   Accumulated deficit                                 (45,804)            (44,718)
   Other accumulated comprehensive income                  208                 163
                                                    ----------           ---------
   Total shareholders' equity                            3,308               4,345
                                                    ----------           ---------

                                                       $10,142             $12,247
                                                       =======             =======


See notes to the consolidated financial statements
</TABLE>

<PAGE>



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



<TABLE>
<CAPTION>


<S>                                                <C>                <C>                 <C>                <C>
                                                      Three Months Ended                       Nine Months Ended
                                                      September 30,                               September 30,
                                                      ----------------------------------------------------------------
                                                      2005              2004                 2005               2004
                                                            (Unaudited)                           (Unaudited)
REVENUES
    Sales                                          $  3,343           $  3,498            $  8,718           $  8,532
    Service, installation and other                     518              1,146               1,903              3,365
                                                   ---------          --------            ---------          ---------
                                                      3,861              4,644              10,621             11,897

COSTS AND EXPENSES:
    Cost of sales                                     1,793              1,915               4,688              4,538
    Customer service expenses                           587              1,100               2,038              3,220
    Selling, general and administrative expenses      1,479              1,131               4,017              3,248
    Research and development                            191                266                 638                606
                                                   ---------          --------            ---------          ---------

                                                      4,050              4,412              11,381             11,612
                                                   ---------          --------            ---------          ---------

OPERATING INCOME (LOSS)                                (189)               232                (760)               285
INTEREST AND FINANCING EXPENSES                          80                105                 249                309
                                                   ---------          --------            --------             ------

INCOME (LOSS) BEFORE INCOME TAXES
   AND MINORITY INTEREST                               (269)               127              (1,009)               (24)
INCOME TAX EXPENSE                                        9                 62                  29                 77
                                                   ---------          --------            --------             ------
INCOME (LOSS) BEFORE MINORITY INTEREST                 (278)                65              (1,038)              (101)
MINORITY INTEREST                                       (18)               (25)                (48)               (40)
                                                   ---------          --------            --------             ------
NET INCOME (LOSS)                                  $   (296)          $     40             $(1,086)             $(141)
                                                   =========          ========            ========             ======

NET INCOME (LOSS) PER SHARE
   Basic and diluted                               $  (0.00)          $   0.00             $ (0.01)          $  (0.00)
                                                   =========          ========             ========          =========

WEIGHTED AVERAGE SHARES
   Basic and diluted                                120,629            115,753             120,582            102,457
                                                   =========          ========            =========          =========


See notes to the consolidated financial statements.

</TABLE>



<PAGE>





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


<TABLE>
<CAPTION>


<S>                                                                       <C>               <C>
                                                                               Nine Months Ended
                                                                                 September 30,
                                                                       ---------------------------------
                                                                           2005                2004
                                                                           -----               ----

CASH FLOWS FROM OPERATING ACTIVITIES:
---------------------------------------------------
   Net Loss                                                               $(1,086)          $  (141)
   Adjustments to reconcile net loss
   to net cash used in operating activities:
   Depreciation and amortization                                              242               167
   Provision for bad debts                                                    (12)               20
   Non-cash consideration                                                      45                85
   Minority interest in net income of consolidated subsidiary                  84                40
   Changes in operating assets and liabilities:
   Accounts receivable                                                        558              (648)
   Inventories                                                                361              (247)
   Accounts payable and other current assets and liabilities                 (344)              (51)
                                                                            -----            ------

            Net cash used in operating activities                            (152)             (775)
                                                                         --------            -------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property, plant and equipment                                  (90)              (70)
   Intangibles                                                                (26)             (328)
   Net cash provided by the acquisition of ID Systems                         ---                31
                                                                            -----            ------

            Net cash used in investing activities                            (116)             (367)
                                                                            ------          -------

CASH FLOWS FROM FINANCING ACTIVITIES:

   Net borrowings (payments) under the revolving line                        (764)              382
   Proceeds from bridge loan                                                  ---               100
   Repayment of bridge loan                                                   ---              (100)
   Proceeds from convertible debentures and warrants                          ---             2,000
   Repayment of obligations under capital leases                               (4)               (4)
   Proceeds from sale of stock, net                                             4               ---
                                                                            -----            ------

            Net cash (used in) provided by financing activities              (764)            2,378
                                                                         --------           -------

EFFECTS OF EXCHANGE RATES ON CASH                                              45               ---
                                                                          -------          --------

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                             (987)            1,236

CASH AND CASH EQUIVALENTS, at beginning of period                           1,965               210
                                                                          -------          --------
CASH AND CASH EQUIVALENTS, at end of period                             $     978          $  1,446
                                                                          =======          ========


See notes to the consolidated financial statements.

</TABLE>



<PAGE>



SENTRY TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2005


NOTE 1 -- Basis of Presentation
-------------------------------
The  consolidated financial statements include the accounts of Sentry Technology
Corporation  ("the  Company")  and  its  majority-owned  subsidiaries.  All
intercompany  accounts  and  transactions have been eliminated in consolidation.

The  accompanying unaudited 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-KSB  for the fiscal year ended December 31, 2004, as filed with the
Securities  and  Exchange  Commission.

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

Note 2 -- Recent Accounting Pronouncements
------------------------------------------
In  November  2004,  the  Financial  Accounting  Standards Board ("FASB") issued
Statement  of Financial Accounting Standards ("SFAS") No. 151, "Inventory Costs,
an  amendment  of  ARB No. 43, Chapter 4". This statement amends the guidance in
ARB  No.  43,  Chapter  4,  "Inventory  Pricing"  to  clarify the accounting for
abnormal  amounts  of idle facility expense, freight, handling costs, and wasted
material  (spoilage).  SFAS  No.  151 requires that those items be recognized as
current  period charges. In addition, this statement requires that allocation of
fixed  production  overheads  to  costs  of  conversion be based upon the normal
capacity  of  the  production  facilities.  The  provisions  of SFAS No. 151 are
effective  for inventory costs incurred in fiscal years beginning after June 15,
2005.  The  Company  is  currently  evaluating the impact of SFAS No. 151 on its
consolidated  financial  statements.

In  December  2004,  the  FASB  issued  SFAS No. 153, "Exchanges of Non-monetary
Assets, an amendment of APB Opinion No. 29". SFAS No. 153 replaces the exception
from  fair value measurement in APB Opinion No. 29 for non-monetary exchanges of
similar  productive  assets with a general exception from fair value measurement
for  exchanges  of  non-monetary assets that do not have commercial substance. A
non-monetary  exchange  has commercial substance if the future cash flows of the
entity  are  expected  to change significantly as a result of the exchange. SFAS
No.  153 is to be applied prospectively, and is effective for non-monetary asset
exchanges  occurring  in fiscal periods after the December 2004 issuance of SFAS
No.  153.  The  Company  does  not  believe the adoption of SFAS No. 153 will be
significant  to  the  overall  results  of  operations  or  financial  position.

In  December  2004,  the  FASB  issued SFAS No. 123 (revised 2004), "Share-Based
Payment"  ("SFAS  No.  123R"). SFAS No. 123R requires the Company to measure the
cost  of  employee  services  received  in  exchange  for  an  award  of  equity
instruments  based  on  the  grant-date fair value of the award. The cost of the
employee  services  is  recognized  as compensation cost over the period that an
employee  provides  service  in  exchange  for  the award. SFAS No. 123R will be
effective  January  1,  2006 for the Company and may be adopted using a modified
prospective  method or a modified retrospective method. Although the Company has
not yet completed an analysis to quantify the exact impact the new standard will
have  on  its  future  financial  performance, the disclosures in Note 8 provide
detail  as  to  the  Company's  financial  performance

<PAGE>


SENTRY TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September  30,  2005


as  if  the  Company  had  applied  the  fair value-based method and recognition
provisions  of SFAS No. 123R to stock-based employee compensation to the current
reporting  periods.

In  March  2005,  the  FASB  issued  FASB  Staff  Position  ("FSP") No. 46(R)-5,
"Implicit  Variable  Interests under FASB Interpretation No. ("FIN") 46 (revised
December  2003), Consolidation of Variable Interest Entities" ("FSP FIN 46R-5").
FSP  FIN  46R-5 provides guidance for a reporting enterprise on whether it holds
an  implicit  variable  interest  in  Variable  Interest  Entities  ("VIEs")  or
potential  VIEs  when  specific  conditions  exist. This FSP is effective in the
first  period  beginning  after  March 3, 2005 in accordance with the transition
provisions  of  FIN  46  (revised  December  2003),  "Consolidation  of Variable
Interest  Entities  -  an Interpretation of Accounting Research Bulletin No. 51"
("FIN  46R"). The Company has determined that the adoption of FSP FIN 46R-5 will
not  have  an  impact  on  its  results  of  operations  and financial position.


NOTE 3 -- ID Systems Acquisition
--------------------------------
On  April  30, 2004, Sentry purchased from Saburah Investments, Inc., an Ontario
corporation,  all  of  the  outstanding  common shares and Series "A" preference
shares  of  ID  Security Systems Canada Inc., an Ontario corporation, and all of
the  outstanding  capital  stock  of  ID  Systems  USA,  Inc.,  a  Pennsylvania
corporation  (collectively,  "ID  Systems").  Mr.  Peter Murdoch, President, CEO
and Director of Sentry, is the owner of Saburah.  Effective January 1, 2005, the
names of the acquired subsidiaries were changed to Sentry Technology Canada Inc.
and  Sentry  Technology  USA  Inc.

The  Company's  consolidated  statements  of operations include the revenues and
expenses  of  ID  Systems  from  May  1,  2004.

The  following supplemental pro forma information is presented to illustrate the
effects of the acquisition on the historical operating results for the three and
nine  month  periods ended September 30, 2004 as if the acquisition had occurred
as  of  January  1,  2004:


                                   Three  Months  Ended      Nine  Months  Ended
                                   September  30,  2004      September  30, 2004
                                   --------------------     --------------------
                                       (in  thousands,  except per share data)
Revenues                                  $  4,644              $     13,480
Income (loss) before extraordinary item   $     40              $       (358)
Net  income  (loss)                       $     40              $       (358)
Net  income  (loss)  per  share           $   0.00              $      (0.00)




NOTE 4 -- Inventories
---------------------
Inventories consist of the following:
                                   September 30, 2005          December 31, 2004
                                   ------------------          -----------------
                                                  (in thousands)
Raw materials                            $    1,082             $     1,206
Work-in-process                                 212                     292
Finished goods                                1,659                   1,816
                                              -----                   -----
                                         $    2,953             $     3,314
                                         =    =====             =     =====

Reserves  for excess and obsolete inventory totaled $1,339,000 and $1,528,000 as
of September 30, 2005 and December 31, 2004, respectively and have been included
as  a  component  of  the  above  amounts.

<PAGE>

SENTRY TECHNOLOGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September  30,  2005


NOTE 5 -- Credit Facilities
---------------------------
Balances  under  credit  facilities  consist  of  the  following:


                                   September 30, 2005          December 31, 2004
                                   -----------------          -----------------
                                                   (in thousands)
Royal Bank of Canada                  $     1,876                  $     ---
The CIT Group/Business Credit Inc.
      revolving credit                        ---                      1,769
Bank of Montreal overdraft lending            ---                        734
Bank of Montreal non-revolving demand         ---                        137
                                              ---                        ---
                                      $     1,876                $     2,640
                                      =     =====                =     =====


On  May 13, 2005, the Company and certain of its subsidiaries entered into a new
secured  credit  facility with Royal Bank of Canada for maximum borrowings of up
to  Canadian  $4.5  million  (U.S.  $3.9  million), which are subject to certain
limitations  based  on  a  percentage  of  eligible  accounts  receivable  and
inventories as defined in the agreement.  Interest is payable at a rate of Royal
Bank  of  Canada prime rate (4.25% at September 30, 2005), plus 1.25% per annum.
Borrowings under this facility are secured by substantially all of the Company's
assets.  This  new  facility  replaced  the  Company's  former  revolving credit
agreement in the United States and its overdraft lending and term loan agreement
in  Canada.  At September 30, 2005, the Company had excess borrowing capacity of
$342,000.

As  of  September  30,  2005,  the  Company  failed to meet one of its financial
covenants  under the Royal Bank agreement.  It is presently in negotiations with
the  bank to obtain a waiver of the covenant as of that date and on a continuing
basis.


NOTE 6 - Comprehensive Income (Loss)
------------------------------------
Comprehensive  income  (loss)  is  as  follows:

                                 Three Months Ended           Nine Months Ended
                                   September 30,                  September 30,
                                  2005        2004            2005         2004
                                  ----        ----            ----         ----
                                                  (in thousands)
Net income (loss):              $ (296)     $   40          $ (1,086)     $(141)
Other comprehensive income (loss):
Foreign currency translation
       adjustments                  95          61                45         99
                                ------       -----           -------      -----
Comprehensive income (loss)     $ (201)     $  101          $ (1,041)     $ (42)
                                = ====      =  ===          = =======     =====


NOTE 7 -- Related Party Transactions
------------------------------------
On  January 22, 2004, Robert Furst, a Sentry Director, made a bridge loan to the
Company  in  the  amount of $100,000.  The interest rate on the loan was 15% per
annum  and  the  loan  was  due  on  or  before  April  30, 2004.  As additional
consideration  for  the  loan,  Mr. Furst received a warrant to purchase 300,000
shares  of  Sentry  common  stock  at  a price of $0.17 per share, which was the
market  price on the date of the grant (valued at $3,000 and charged to interest
and financing expenses).  The warrant expires on January 21, 2009.  The note was
repaid  in  full  on  April  30,  2004.



<PAGE>
SENTRY  TECHNOLOGY  CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 2005


NOTE 8 -- Earnings Per Share
The  earnings  per  share calculations (basic and diluted) at September 30, 2005
and 2004 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 2,604,512 and 1,499,948 shares of common stock
with  a  weighted  average exercise price of $0.34 and $0.59 were outstanding at
September  30,  2005  and  2004,  respectively,  but  were  not  included in the
computation  of  diluted  net  loss  per  share  because  their  effect would be
antidilutive  or  immaterial.

The  Company  accounts  for  stock-based awards to employees using the intrinsic
value  method  in  accordance  with  Accounting Principles Board Opinion No. 25,
"Accounting  for  Stock  Issued  to  Employees."  SFAS  No.  123, Accounting for
Stock-Based  Compensation,  requires  the disclosure of pro forma net income and
earnings  per  share  had  the  Company  adopted the fair value method as of the
beginning  of  fiscal  1995.  Under  SFAS No. 123, the fair value of stock-based
awards to employees is calculated through the use of option pricing models, even
though such models were developed to estimate the fair value of freely tradable,
fully  transferable  options  without  vesting restrictions, which significantly
differ  from  the  Company's  stock  options  awards.  These models also require
subjective  assumptions,  including  future  stock price volatility and expected
time to exercise, which greatly affect the calculated values.  The fair value of
each  option  granted  is estimated on the date of grant using the Black-Scholes
option-pricing  model.  In  2005, 1,525,000 options were granted at market price
on  of  the dates of the grants.  The weighted average fair value of the options
granted  in  2005  is estimated at $0.08, using the Black-Scholes option pricing
model  with  the  following  weighted average assumptions:  expected life of 4.7
years;  stock volatility, 123%; risk free interest rates, 4.0%, and no dividends
during  the  expected  term.  The Company's calculations are based on a multiple
option  valuation  approach  and  forfeitures  are recognized as they occur.  No
options  were  granted  in  the  nine  month  period  ended  September 30, 2004.

If  the  computed  fair  values  of  the  post 1995 awards had been amortized to
expense  over  the vesting period of the awards, pro forma net income attributed
to  common  shareholders  would  have  been  as  follows:

                                   Three Months Ended         Nine Months Ended
                                    September 30,                 September 30,
                                 2005           2004         2005          2004
                                 ----           ----         ----          ----
                                      (in thousands, except per share data)
Net income (loss):
 As reported                   $ (296)         $  40        $(1,086)     $ (141)
 Less stock based
 compensation expense
 determined under the fair
 value method  of all awards,
 net of related tax effects        (7)            (3)           (18)        (13)
                                -----          -----         ------       ------
             Pro forma         $ (303)         $  37        $(1,104)     $ (154)
                               = ====          =  ==        =======      = ====


Net loss per share:
     As reported             $  (0.00)         $ 0.00       $ (0.01)     $(0.00)
                             ========        ========     =========      =======
     Pro forma               $  (0.00)         $ 0.00       $ (0.01)     $(0.00)
                             ========        ========     =========      =======


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


On  August  12,  2005,  the  Board  of Directors and shareholders representing a
majority  of the outstanding shares approved an increase in the number of shares
available  for  grant  under  the 1997 Stock Incentive Plan of Sentry Technology
Corporation  by  4,000,000  shares.


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-KSB. 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:
------------------------

On  April  30,  2004, Sentry purchased from Saburah Investments, Inc. all of the
outstanding  common  shares  and  Series  "A"  preference  shares of ID Security
Systems Canada Inc., and all of the outstanding capital stock of ID Systems USA,
Inc.  (collectively,  "ID  Systems").  ID  Systems  is  a  Toronto based company
engaged  in  anti-shoplifting  technology,  security  labeling,  radio frequency
identification  (RFID),  access  control  and  library  security.  Our condensed
consolidated  statements  of  operations include the revenues and expenses of ID
Systems  from  May  1,  2004.  Effective January 1, 2005, ID Systems changed the
name  of  ID  Security  Systems  Canada  Inc.  and ID Systems USA Inc. to Sentry
Technology  Canada  Inc.  and  Sentry Technology USA Inc., (collectively "Sentry
Canada").

Consolidated  revenues were 17% lower in the quarter ended September 30, 2005 as
compared  to  the  quarter  ended September 30, 2004.  For the nine month period
ended  September  30, 2005 consolidated revenues were 11% lower than in the same
period  of  last year.  Our backlog of orders, which we expect to deliver within
the  next  twelve  months, was $1.6 million at September 30, 2005 as compared to
$2.2  million  at  December 31, 2004.  The backlog was $3.2 million at September
30,  2004.  Total  revenues for the periods presented are broken out as follows:

                   Q-3       Q-3          %       9 Mos.      9 Mos.          %
                  2005      2004     Change        2005       2004     Change
                  ----      ----     ------        ----       ----     ------
                   (in thousands)                   (in thousands)

EAS             $ 1,961   $ 1,808      8        $5,153      $3,434          50
CCTV                523       959    (45)        1,291       2,550         (49)
SentryVision        859       731     18         2,274       2,548         (11)
                   ----     -----     --         -----       -----         ---
Total sales       3,343     3,498     (4)        8,718       8,532           2
Service,
installation
and other           518     1,146    (55)        1,903       3,365         (43)
                  -----     -----    ----        -----       -----         ---
Total revenues  $ 3,861   $ 4,644    (17)      $10,621     $11,897         (11)
                =======   =======    ====      =======     =======         ===


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


The  increase  in  EAS sales is primarily attributable to Sentry Canada's sales,
which  represented  $1.7  million  of  EAS  sales  in the third quarter and $4.3
million  in  the first nine months of 2005 compared to $1.5 million in the third
quarter $2.3 million in the first nine months of 2004.  In January 2005, we were
notified  by  Lowe's  Home  Center, our largest customer, that they would not be
renewing  their  maintenance  contract  for 2005.  While the annual value of the
maintenance  contract was approximately $0.9 million, it contributed towards the
selection  of  vendors  for  replacement  and  add-on  CCTV  business in new and
existing Lowe's locations. As a result, revenues from Lowe's decreased from $1.5
million  in  the  third  quarter of 2004 to $0.2 million in the third quarter of
2005  and  from $4.0 million in the first nine months of 2004 to $1.0 million in
the  first  nine months of 2005.  As Lowe's purchased both CCTV and SentryVision
products  this  reduction  affected  the  reported sales in both categories.  We
anticipate  that this decision will continue to result in a substantial decrease
in  future revenues from Lowe's on a comparative basis.  We have added new sales
representatives  and  new  customers  that have substantially offset the loss of
Lowe's sales.  As a result, our business is more balanced and is less reliant on
a  single  large  customer  for  future  success.

International  sales  of our SentryVision  Smart Track system were approximately
the same in the third quarter and first nine months of 2005 when compared to the
same  periods  of 2004.  Our sales of SentryVision products to our international
dealers  and  distributors  are  denominated  in  U.S.  dollars,  therefore  the
strengthening  of  the Euro and other foreign currencies against the U.S. dollar
had  no  significant  impact  on  revenues.  While  service  revenues  were
approximately  the  same in both periods in 2005 and 2004, installation revenues
were  significantly lower in the 2005 periods as compared to the same periods of
2004,  due  to  lower  domestic  sales  of  CCTV systems.  Even though EAS sales
increased  substantially,  the installation revenues associated with EAS systems
are  lower than for CCTV and SentryVision sales.  Maintenance revenues were also
lower  primarily as a result of cancellation of the Lowe's maintenance contract.

Sales  reps  and  international  distributors have been added to the sales group
plus  new print ads and trade show attendance will assist in improving our sales
results.  We  have  recently  teamed  with  Civitas  Group  to  develop Homeland
Security  sales.  In  addition,  our flagship SmartTrack traveling camera system
and  proprietary  library security and information systems are operating trouble
free,  which has helped both to reduce service costs and allow our sales reps to
develop  new  business  as  a  result  of  strong references from many satisfied
national  and  international  customers.

Cost  of  sales were 54% of total sales in both the three and nine month periods
ended  September  30,  2005  compared to 55% and 53% in the three and nine month
periods  ended  September  30,  2004.  We continue to see strong domestic margin
improvements  in  2005  on  the  SmartTrack  product  lines  as  a result of our
outsourcing of manufacturing.  However, our comparative margins on international
SmartTrack  sales have been reduced in 2005 due to competitive pressures. Sentry
Canada's  sales  increased  as  a  percentage  of  total sales in both the third
quarter  and  first  nine  months  of  2005.  As  a  percentage of sales, Sentry
Canada's cost of sales are higher than Sentry's historical costs as a portion of
its  sales  are  made  through dealers and distributors that carry lower margins
than  sales  made  direct to end users.  In addition, lower production volume at
our  51% owned labeling subsidiary resulted in higher overhead and a higher cost
of  sales  percentage  in  both  the  three  and the nine month periods of 2005.

The  decrease  in  customer service expenses in the third quarter and first nine
months of 2005 as compared to the third quarter and first nine months of 2004 is
primarily a result of a decrease in the number of customer service employees and
increased use of outside service contractors in order to better manage our total
net  customer  service costs during fluctuations in activity levels from quarter
to  quarter.

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


Selling,  general  and  administrative  expenses  were 31% and 24% higher in the
three  and nine month periods ended September 30, 2005 when compared to the same
periods of the previous year.  The increase in expenses in the comparative third
quarter amounts are principally a result of higher sales and marketing expenses,
higher  foreign  exchange  losses and lower vendor settlements.  The increase in
expenses in the nine month period is principally a result of nine full months of
Sentry  Canada  expenses in 2005 compared to five months in the 2004 period.  We
have  made  certain administrative expense reductions to help compensate for the
reduction  in  Lowe's  business.  At the same time, we have increased funding of
sales  and  marketing  programs,  which  we expect will continue to increase our
business  with  new  and  existing customers.  Four new sales persons were hired
recently with substantial industry experience.  Many new sales opportunities are
being  developed  that  we  anticipate  will  have  a  positive impact on future
revenues.  New programs include a marketing campaign to promote SentryVision  to
Homeland  Security  consultants and the appointment of a new distributor for the
Brazilian  market  to  sell  EAS products to the library market and SentryVision
systems  to  all  customers.  Included  in  selling,  general and administrative
expenses  were  foreign  exchange losses (gains) of $116,000 and $123,000 in the
three  and  nine month periods ended September 30, 2005 compared to $(1,000) and
$10,000  in  the  three  and  nine  month periods ended September 30, 2004.  The
change  in the foreign currency exposure is a result of the recent global credit
facility  denominated  in  Canadian  dollars.  We are currently working with our
lender  to  investigate  strategies  to  mitigate  this  exposure.

The  reduction  in  research  and  development in the third quarter of 2005 when
compared to the third quarter of 2004 is a result of lower prototype costs and a
reduction  in  the number of engineers. The increase in the first nine months of
2005  compared  to  the  first  nine  months  of  2004 was a result of increased
prototype  costs associated with the development of our WAM EAS antenna that was
successfully  introduced  to  the  market  at  the end of the second quarter. In
addition,  only  five  months  of  the  research  efforts  of Sentry Canada were
included  in  the  2004  period.

Total  interest  and  financing  costs  were  lower in the third quarter of 2005
compared  to  2004  was  a  result of lower average bank debt and lower interest
rates  under  the  new  credit  agreement.  In  addition, the reduction in total
interest  and  financing  costs in the first nine months of 2005 was a result of
the  elimination  of  costly  financing associated with purchase order financing
included  in  the  first  half  of  2004.

The  income  tax  expense  in all the periods presented principally results from
taxable  income  of  our  Sentry  Canada subsidiaries, which cannot be offset by
Sentry's  net  operating  loss  carryforwards.

As a result of the foregoing, Sentry had losses of $296,000 and $1,086,000 in
the quarter and nine months ended September 30, 2005 as compared to a net income
of $40,000 and a net loss of $141,000 in the quarter and nine months ended
September 30, 2004.


Liquidity  and  Capital  Resources  as  of  September  30,  2005

At  September  30,  2005,  we  had cash of $1.0 million, working capital of $3.6
million, total assets of $10.1 million and shareholders' equity of $3.3 million.
While  we  had  a loss of $1.1 million in the first nine months of 2005, our net
cash used in operating activities was only $152,000.  This was a result of lower
amounts  of  accounts  receivable  partially  as  a result of better collections
efforts  as  well  as  lower  sales  volume.  We have also eliminated the use of
expensive  purchase  order  financing  to  fund  inventory  purchases and we are
continuing  to  reestablish  credit  with  new  and  existing  vendors.

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


We  utilized $0.8 million in financing activities through a pay down of balances
under  our previous credit facilities.  Availability under the credit facilities
is  principally  based  on  the  level  of  our receivables and inventory, which
declined  in  the  first  nine  months  of  2005.  Net  reductions in our credit
facilities  were  funded  through  the  use  of  existing  cash.

On  May 13, 2005, the Company and certain of its subsidiaries entered into a new
secured credit facility with Royal Bank of Canada ("RBC") for maximum borrowings
of up to Canadian $4.5 million (U.S. $3.9 million), which are subject to certain
limitations  based  on  a  percentage  of  eligible  accounts  receivable  and
inventories  as  defined in the agreement.  Interest is payable at a rate of RBC
prime  rate  (4.25%  at  September  30, 2005), plus 1.25% per annum.  Borrowings
under  this  facility  are secured by substantially all of the Company's assets.
This  new  facility  replaced the Company's former revolving credit agreement in
the  United  States and its overdraft lending and term loan agreement in Canada.
The  consolidation  of  our  credit facilities is another step in our efforts to
improve  operating  efficiencies  and  to further reduce our costs of financing.
The  new  facility  also  provides  for  limited  financing  of  certain foreign
receivables,  which may provide additional future availability over the previous
facilities.  As  of  September 30, 2005, we had borrowings of approximately $1.9
million  with  RBC  and  had  excess  borrowing capacity of $0.3 million.  As of
September  30,  2005,  the Company failed to meet one of its financial covenants
under  the  Royal Bank agreement.  It is presently in negotiations with the bank
to  obtain  a  waiver of the covenant as of that date and on a continuing basis.

We  will  require  liquidity  and  working  capital  to  finance  increases  in
receivables  and inventory associated with sales growth and, to a lesser extent,
for  capital  expenditures.  We  had no material capital expenditure or purchase
commitments  as  of  September  30,  2005.  We believe that our anticipated cash
needs for the foreseeable future can be funded from cash and cash equivalents on
hand,  availability  under  our credit facilities and cash generated from future
operations.

On  March  28,  2005,  our  Board of Directors and a majority of the outstanding
shareholders  approved  an  increase in the authorized number of Sentry's common
shares  from  140,000,000  to  160,000,000,  principally  in  order  to meet the
requirements  of  the  Brascan  Technology  Fund  investment.


Related  Party  Transactions
----------------------------
Details of related party transactions are included in Note 7 of this Form
10-QSB.


CONTROLS AND PROCEDURES


Item 3.  Controls and Procedures

As  of  the  end  of  the  period  covered  by  this  report,  Sentry Technology
Corporation  carried  out  an  evaluation,  under  the  supervision and with the
participation  of  the  Company's  management,  including  the  Company's  Chief
Executive  Officer  and  Chief  Financial  Officer,  of the effectiveness of the
design  and  operation  of  the  Company's  disclosure  controls  and procedures
pursuant  to Rule 13a-15 of the Securities and Exchange Act of 1934.  Based upon
that  evaluation,  the  Chief  Executive  Officer  and  Chief  Financial Officer
concluded that the Company's disclosure controls and procedures are effective in
timely  alerting  them  to  material  information related to the Company that is
required to be included in Sentry Technology Corporation's periodic SEC filings.

<PAGE>
SENTRY TECHNOLOGY CORPORATION
CONTROLS AND PROCEDURES


There  has  been  no  change  in  the  Company's internal control over financial
reporting during the period covered by this report that has materially affected,
or  is  reasonable  likely  to materially affect, the Company's internal control
over  financial  reporting.


PART II  - OTHER INFORMATION


Item 6 - Exhibits

(a)     Exhibits:

31.1 - Certification by the Chief Executive Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.

31.2 - Certification by the Chief Financial Officer Pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.

32.1 - Certification by the Chief Executive Officer Pursuant to 18 U.S.C.
Section 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.***

32.2 - Certification by the Chief Financial Officer Pursuant to 18 U.S.C.
Section 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.***

***     In  accordance  with Item 601(b)(32)(ii) of Regulation S-K, this exhibit
shall not be deemed "filed" for the purposes of Section 18 of the Securities and
Exchange  Act of 1934 or otherwise subject to the liability of that section, nor
shall  it be deemed incorporated by reference in any filing under the Securities
Act  of  1933  or  the  Securities  Exchange  Act  of  1934.


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:  November 11, 2005    By:     /s/PETER J. MUNDY
       -----------------            -----------------
                                    Peter J. Mundy, Vice President -
                                    Finance and Chief Financial Officer
                                   (Principal Financial and Accounting Officer)

<PAGE>
SECTION 302 CERTIFICATION:


Exhibit 31.1

                            CERTIFICATION PURSUANT TO
                                 SECTION 302 OF
                         THE SARBANES-OXLEY ACT OF 2002

Certification of CEO

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  officer  and  I  are  responsible  for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-15(e)  and  15d-15(e)) for the registrant and we 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  and presented in this report our conclusions about the effectiveness
of  the  disclosure controls and procedures, as of the end of the period covered
by  this  report  based  on  such  evaluation;  and

c)     disclosed  in this report any change in the registrant's internal control
over  financial  reporting  that  occurred  during  the registrant's most recent
fiscal  quarter  that  has  materially  affected,  or  is  reasonably  likely to
materially  affect,  the registrant's internal control over financial reporting;
and

5.  The registrant's other certifying officer 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
function):

a)     all  significant  deficiencies  and  material weaknesses in the design or
operation  of  internal  controls  over financial reporting which are reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize  and  report  financial  information;  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
over  financial  reporting.


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

                              Peter L. Murdoch
                              President and Chief Executive Officer

                              November 11, 2005


SECTION 302 CERTIFICATION:


Exhibit 31.2

                            CERTIFICATION PURSUANT TO
                                 SECTION 302 OF
                         THE SARBANES-OXLEY ACT OF 2002

Certification of CFO

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  officer  and  I  are  responsible  for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-15(e)  and  15d-15(e)) for the registrant and we 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  and presented in this report our conclusions about the effectiveness
of  the  disclosure controls and procedures, as of the end of the period covered
by  this  report  based  on  such  evaluation;  and

c)     disclosed  in this report any change in the registrant's internal control
over  financial  reporting  that  occurred  during  the registrant's most recent
fiscal  quarter  that  has  materially  affected,  or  is  reasonably  likely to
materially  affect,  the registrant's internal control over financial reporting;
and

5.  The registrant's other certifying officer 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
function):

a)     all  significant  deficiencies  and  material weaknesses in the design or
operation  of  internal  controls  over financial reporting which are reasonably
likely  to  adversely  affect  the  registrant's  ability  to  record,  process,
summarize  and  report  financial  information;  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
over  financial  reporting.


                              /s/ PETER J. MUNDY
                          -------------------------------------------------
                              Peter J. Mundy
                              Vice President and Chief Financial Officer

                              November 11, 2005


SECTION 906 CERTIFICATION:


Exhibit 32.1


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



Certification of CEO

In  connection  with  the Quarterly Report of Sentry Technology Corporation (the
"Company")  on Form 10-QSB for the period ended September 30, 2005 as filed with
the  Securities  and  Exchange  Commission  on the date hereof (the Report"), I,
Peter  L.  Murdoch, Chief Executive Officer of the Company, certify, pursuant to
Section 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act  of  2002,  that:

(1)     The  Report  fully  complies  with the requirements of Section 13(a) and
15(d)  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

                               November 11, 2005


A  signed  original  of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears  in  typed  form  within  the  electronic  version  of  this     written
statement  required by Section 906, has been provided to the Company and will be
retained  by the Company and furnished to the Securities and Exchange Commission
or  its  staff  upon  request.

This  certification  accompanies  this Report on Form 10-QSB pursuant to Section
906  of  the  Sarbanes-Oxley  Act  of  2002  and shall not, except to the extent
required  by such Act, be deemed filed by the Company for purposes of Section 18
of  the Securities Exchange Act of 1934, as amended  (the "Exchange Act").  Such
certification will not be deemed to be incorporated by reference into any filing
under the Securities Act of 1933, as amended, or the Exchange Act, except to the
extent  that  the  Company  specifically  incorporates  it  by  reference.




<PAGE>



SECTION 906 CERTIFICATION:


Exhibit 32.2


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



Certification of CFO

In  connection  with  the Quarterly Report of Sentry Technology Corporation (the
"Company")  on Form 10-QSB for the period ended September 30, 2005 as filed with
the  Securities  and  Exchange  Commission  on the date hereof (the Report"), I,
Peter  J.  Mundy,  Chief  Financial Officer of the Company, certify, pursuant to
Section 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act  of  2002,  that:

(1)     The  Report  fully  complies  with the requirements of Section 13(a) and
15(d)  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

                              November 11, 2005


A  signed  original  of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears  in  typed  form  within  the  electronic  version  of  this     written
statement  required by Section 906, has been provided to the Company and will be
retained  by the Company and furnished to the Securities and Exchange Commission
or  its  staff  upon  request.

This  certification  accompanies  this Report on Form 10-QSB pursuant to Section
906  of  the  Sarbanes-Oxley  Act  of  2002  and shall not, except to the extent
required  by such Act, be deemed filed by the Company for purposes of Section 18
of  the Securities Exchange Act of 1934, as amended  (the "Exchange Act").  Such
certification will not be deemed to be incorporated by reference into any filing
under the Securities Act of 1933, as amended, or the Exchange Act, except to the
extent  that  the  Company  specifically  incorporates  it  by  reference.