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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-K/A

Amendment No. 1





(Mark One)

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

For the fiscal year ended December 31, 2008

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: 001-31770





Digital Lightwave, Inc.

(Exact name of Registrant as specified in its
charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 95-4313013                          
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification No.)
|                                                               | 
|5775 Rio Vista Drive Clearwater, Florida                       |  | 33760                               
|(Address of principal executive offices)                       |  | (Zip Code)                          

Registrants telephone number, including area code: (727) 442-6677





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

None

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

Common Stock, $0.0001 par value per share





Indicate by check mark if the Registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes   ̈    No  x

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act.    Yes   ̈    No  x

Indicate by check mark whether 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 periods that Registrant
was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No   ̈

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

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large Accelerated Filer |  |  ̈ |  | Accelerated Filer         |  |  ̈
|                        |  |   | 
|Non-Accelerated Filer   |  |  ̈ |  | Smaller Reporting Company |  | x

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    Yes   ̈    No  x

The aggregate market value of Registrants voting and non-voting common equity held by non-affiliates as of the last business day of the Registrants most recently completed second fiscal quarter, June 30, 2008, was
approximately $1,698,319 based on the last-sale price of $0.08 for shares of the Registrants Common Stock on such date as reported by the OTC Bulletin Board. Shares of Common Stock held by each officer, director and holder of 5% or more of the
outstanding Common Stock have been excluded in that such persons may be deemed affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

The number of shares of Registrants Common Stock issued and outstanding as of March 13, 2009, was 255,489,847.

DOCUMENTS INCORPORATED BY REFERENCE

The following
documents (or parts thereof) are incorporated by reference into the following parts of this Form 10-K/A: None.









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EXPLANATORY NOTE

The registrant is filing this amendment (Amendment No. 1) to Form 10-K for the fiscal year ended December 31, 2008 (the Original Filing), which was originally filed with the
Securities and Exchange Commission (SEC) on March 31, 2009. The registrant is filing herewith certain information required by Part III, Items 10 through 14 of Form 10-K, that is required to be filed with the SEC within 120 days
after the registrants fiscal year ended December 31, 2008. In addition, in connection with the filing of this Amendment No. 1 and pursuant to Rules 12b-15 and 13a-14 under the Securities Exchange Act of 1934, as amended (the
Exchange Act), the registrant is including with this Amendment No. 1 certain currently dated certifications required by Part III. This Amendment No. 1 on Form 10-K/A amends no other information included in the Annual Report on
Form 10-K. The Original Filing continues to speak as of the date of the Original Filing and we have not updated the disclosures contained therein to reflect any events which occurred at a date subsequent to the filing of the Original Filing.

FORM 10-K/A CROSS REFERENCE INDEX



|                                                                                                        |  |     
|------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                        |  | Page
|PART III                                                                                                |  |     
|Item 10. Directors, Executive Officers and Corporate Governance                                         |  | 1   
|Item 11. Executive Compensation                                                                         |  | 3   
|Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters |  | 8   
|Item 13. Certain Relationships and Related Transactions, and Director Independence                      |  | 9   
|Item 14. Principal Accounting Fees and Services                                                         |  | 10  
|PART IV                                                                                                 |  |     
|Item 15. Exhibits and Financial Statements Services                                                     |  | 10  



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PART III



|Item 10. | Directors, Executive Officers and Corporate Governance
|-------- | ------------------------------------------------------

BOARD OF DIRECTORS

The following table and narrative sets forth certain biographical information
about each member of the Board of Directors (the Board) of Digital Lightwave, Inc. (the Company), including each such directors name, year of first election or appointment to the Board, age, position with the Company
during the fiscal year end December 31, 2008, principal occupations for the last five years and directorships with other public companies. There are no family relationships among any of the directors, director nominees or executive officers of
the Company.



|                                                                                                                                                                                                                |  |                     |  |     |  |         
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------- |  | --- |  | --------
|Name                                                                                                                                                                                                            |  | FirstBecameDirector |  | Age |  | Position
|Dr. Bryan J. Zwan (4)                                                                                                                                                                                           |  | 1990                |  | 61  |  | Chairman
|                                                                                                                                                                                                                |  |                     | 
|Gerald A. Fallon (1)(2)(3)(5)                                                                                                                                                                                   |  | 2000                |  | 59  |  | Director
|                                                                                                                                                                                                                |  |                     | 
|Robert Moreyra (2)(3)                                                                                                                                                                                           |  | 2003                |  | 50  |  | Director
|                                                                                                                                                                                                                |  |                     | 
|Peter H. Collins (1)(2)(3)(5)                                                                                                                                                                                   |  | 2004                |  | 40  |  | Director
|                                                                                                                                                                                                                |  |                     | 
|Robert F. Hussey (4)                                                                                                                                                                                            |  | 2000                |  | 60  |  | Director
|(1)    Member of the Audit Committee. (2)    Member of the Compensation Committee. (3)    Member of the
Nominating Committee. (4)    Member of the Executive Committee. (5)    Member of the Special Committee.

Dr. Bryan J. Zwan co-founded the Company in October 1990 and served as Chairman
of the Board from its inception until July 1999. In addition, Dr. Zwan served as the Companys Chief Executive Officer from the Companys inception until December 1998 and served as its President from inception until March 1996 and
from October 1996 until December 1998. Dr. Zwan was re-appointed as Chairman of the Board, Chief Executive Officer and President of the Company in January 2002. In August 2002, the Board accepted the resignation of Dr. Zwan as President
and Chief Executive Officer of the Company. Dr. Zwan continues to serve as the Chairman of the Board. Dr. Zwan holds a Ph.D. degree in Space Physics from Rice University and B.S. degrees in Physics and Chemistry from the University of
Houston.

Mr. Gerald A. Fallon served as Executive Vice President and Senior Managing Director  KeyCorp (Capital
Markets) until he retired in March 2001. Mr. Fallon currently serves as Chairman and Chief Executive Officer of Lander North Asset Management LLC and also serves on the Board of Directors of Logos Communications, Inc., Thomas F.
McDonald & Partners and Sierra Novo. Additionally, he serves on the Bratenahl, Ohio Land Conservancy. Mr. Fallon holds a B.A. degree in Economics from Georgetown University and an M.B.A. degree in Finance from Columbia University.

Mr. Robert Moreyra has been Senior Managing Director of Atlantic American Capital Advisors, LLC (AACA), an
investment bank specializing in small and mid-sized technology companies and a wholly owned subsidiary of Atlantic American Corporate Group, LLC (AACG), a holding company that owns AACA, as well as other private equity and merchant
banking operations since February 2001. Mr. Moreyra is Managing Principal and a 15% owner of AACG. Mr. Moreyra was a Managing Director of H.C. Wainwright & Co., Inc. from February 2000 to February 2001, Managing Director of The
First American Investment Banking Corporation from May 1999 to February 2000, Vice President of Corporate Finance at William R. Hough & Co. from April 1998 to May 1999, Managing Director with Tunstall Consulting, Inc. from September 1997 to
March 1998 and Chief Executive Officer of Pardue, Heid, Church, Smith & Waller, Inc. from February 1986 to February 1998. Additionally, Mr. Moreyra has served on the board of directors of Fugleberg Koch Architects, Inc. since February
2003. Mr. Moreyra received his B.B.A. degree in Finance from Florida International University and an M.B.A. degree from the University of Central Florida.



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Mr. Peter H. Collinshas served as a director since December 2004. Mr. Collins
co-founded and currently directs all private equity activities for Forge Capital Partners and is the CEO of FCPs Community Reinvestment Partners series of real estate funds (CRP). CRP I and its follow-on fund, CRP II are large
Florida-based private real estate investment partnerships. Prior to Forge and CRP and beginning in 1998, Mr. Collins was a Partner and Managing Director with the private equity firm Rock Creek Capital, located in Jacksonville,
Florida. He also served as a Manager with the Florida State Board of Administration (Floridas Public Pension Fund) in Tallahassee, and served four years as Chief of Staff to Florida State Senator Charles Williams. Mr. Collins
received both a B.S. degree in Finance and an M.B.A. degree in Finance from Florida State University.

Mr. Robert F.
Hussey served as Interim President and Chief Executive Officer of the Company from February 2005 to February 2006 and as Strategic Restructuring Advisor for the Company from December 2002 to December 2003. Mr. Hussey was President and Chief
Executive Officer of Metro Vision of North America, Inc., a niche cable television company, from February 1991 until April 1997, when it merged with York Hannover Health Care, Inc. Mr. Hussey was elected Chairman of World Racing Group, Inc. in
November 2007 and he also serves as a Director. He also serves as a director of H.C. Wainwright and Company, Inc., MediaNetGroup, Inc., and Axcess International, Inc.

EXECUTIVE OFFICERS

The following sets forth certain biographical information about each of the
Companys current executive officers including their names, ages, and principal positions with the Company for the periods indicated and a description of each such executive officers background. Executive officers are appointed by the
Board and serve at the pleasure of the Board, subject to the terms of any employment agreements between the executive officers and the Company. There are no family relationships among any of the directors, director nominees or executive officers of
the Company.



|                 |  |     |  |                                                                              
|---------------- |  | --- |  | -----------------------------------------------------------------------------
|Name             |  | Age |  | Positions                                                                    
|Kenneth T. Myers |  | 54  |  | President, Chief Executive Officer, Principal Financial Officer and Secretary

Mr. Kenneth T. Myers has served as the Companys President, Chief Executive
Officer, Principal Financial Officer and Secretary since February 2006. Mr. Myers is a co-founder of the Company and has served the Company in various capacities, including as a distinguished member of the technical staff, engineering manager,
vice president of technology and chief technical officer since November 1991 (except from January 2002 to July 2004 while on sabbatical). Prior to co-founding the Company, Mr. Myers served from March 1987 to February 1991 as an engineering
manager for optical developments in several start-up companies. Mr. Myerss career in engineering and development has spanned 30 years.

CORPORATE GOVERNANCE

Audit Committee

The Board has a separately designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the Exchange Act). The Audit
Committee is currently composed of two directors, Mr. Fallon (Chairman) and Mr. Collins, who: (i) are independent, as independence for audit committee members is defined under Rule 4200 of the NASDAQ Marketplace Rules; (ii) meet
the criteria for independence set forth in Rule 10-A-3(b)(1) under the Exchange Act; (iii) have not participated in the preparation of the financial statements of the Company during the past four years; and (iv) are able to read and
understand fundamental financial statements, including the Companys balance sheet, income statement, and cash flow statement. In addition, the Audit Committee has at least one member who has past employment experience in finance. The Audit
Committee is responsible for overseeing the accounting and financial reporting processes of the Company and the audits of the Companys financial statements. The Audit Committee held four meetings during the year ended December 31, 2008.

The Audit Committee operates under a written charter adopted by the Board, a copy of which was attached as Appendix A to the Companys Proxy
Statement filed with the SEC on April 23, 2007. The Audit Committee reviews and reassesses the adequacy of such charter on an annual basis. The Board has determined that Gerald A. Fallon qualifies as an audit committee financial expert, as
defined under SEC rules.



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Nominating Committee

The Nominating Committee currently consists of Mr. Collins (Chairman) and Mr. Fallon, each of whom is independent, as independence for nominating committee members is defined under Rule 4200 of the NASDAQ
Marketplace Rules, and Mr. Moreyra. The Nominating Committee did not meet in 2008. The Nominating Committee operates under a written charter adopted by the Board, a copy of which was attached as Appendix A to the Companys Proxy Statement
filed with the SEC on December 17, 2004. The Nominating Committee is responsible for identifying individuals qualified to become members of the Board and for selecting, or recommending that the Board select, nominees to the Board for election
at the Companys annual meeting of stockholders.

Other Committees

The Executive Committee consists of Dr. Zwan (Chairman) and Mr. Hussey. The Executive Committee did not meet in 2008. During 2008 the Special
Committee was composed of Mr. Fallon (Chairman) and Mr. Collins and was formed by the Board in 2003 for the purpose of reviewing the fairness of transactions between the Company and affiliates of Dr. Zwan. The Special Committee held
two meetings during the year ended December 31, 2008.

Compensation Committee

The Compensation Committee consists of Messrs. Collins (Chairman), Fallon and Moreyra. The Compensation Committee recommends to the Board compensation for
the Companys executive officers and directors and oversees the administration of the Companys employee stock option and stock purchase plans. All decisions of the Compensation Committee relating to compensation of the Companys
executive officers are reviewed and approved by the entire Board. Compensation Committee does not use outside compensation consultants on a regular basis. Messers. Collins and Fallon serve as independent directors (as defined in Rule 4200 of the
NASDAQ Marketplace Rules). The Compensation Committee did not meet in 2008 and is not governed by a written charter.

Code of Ethics

The Company has adopted a Code of Ethics that applies to, among others, its principal executive, financial and accounting officers, and other persons, if
any, performing similar functions. Our Code of Ethics can be obtained from the Company, without charge, by written request to the Secretary at the Companys address.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) under the Exchange
Act requires the Companys executive officers and directors, and persons who own more than ten percent (10%) of a registered class of the Companys equity securities, to file reports of ownership and changes in ownership with the SEC.
Executive officers, directors and greater than ten percent (10%) stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms that they file. To the Companys knowledge, based solely on
review of the copies of such reports furnished to the Company and written representations that no other reports were required, the Companys executive officers, directors and greater than ten percent (10%) stockholders complied with all
applicable Section 16(a) filing requirements for the fiscal year ended December 31, 2008.



|Item 11. | Executive Compensation
|-------- | ----------------------

COMPENSATION DISCUSSION AND ANALYSIS

Compensation Philosophy and Objectives

The Companys executive compensation policy is designed to establish an appropriate relationship between executive pay and the Companys annual
performance, its long-term growth objectives and its ability to attract and retain qualified executive officers. The Compensation Committee attempts to achieve these goals by integrating, on an individualized basis, competitive annual base salary
with stock options through the Companys stock option plan and otherwise. The Compensation Committee believes that cash compensation in the form of salary and where appropriate, bonuses, provides the Companys executives with short-term
rewards for success in operations, and that long-term compensation through the award of stock options better coordinates the objectives of management with those of the stockholders with respect to the long-term performance and success of the
Company. The Compensation Committee generally takes into consideration a variety of subjective and objective factors in determining the compensation package for executive officers, including how compensation compares to that paid by competing
companies and the responsibilities and performance by each executive and the performance of the Company as a whole. In making its determinations, the Compensation Committee attempts to address the unique challenges that are present in the
telecommunications industry in which the Company competes against a number of public and private companies with respect to attracting and retaining executives and other key employees.



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Elements of 2008 Compensation

The primary element of executive compensation is base salary. The annual salary is determined on the basis of each executive officers responsibility, the general salary practices of companies with which the
Company competes and each officers individual qualifications and experience. The Company provided the named executive officers, like its other employees, a base salary in order to compensate them for the services that they provide to the
Company over the course of the year. The Company attempts to meet competitive salary norms for a company of its size and to reward exceptional performance and increased levels of responsibility through annual salary increases.

Base salaries are typically evaluated annually and, subject to any employment agreements, adjusted from their base level from year to year based upon the
executives performance, level of responsibility and other factors relating to individual performance. In determining whether the executive goals have been achieved, the Compensation Committee considers numerous factors, including the
following: the Companys performance as measured by earnings, adjusted EBITDA, revenues, market share, technologies developed, and total assets. Although the Compensation Committee measures performance and increases compensation in light of
these factors, no direct correlation exists between any specific criteria and an executives compensation, nor in its analysis, does the Compensation Committee attribute a particular weight to any specific criteria. A subjective determination
is made after review of all relevant information, including the above.

The Company, due to its size, and performance over the past few
years, generally does not pay any bonuses or stock awards. When appropriate, bonuses generally are based on actual corporate and individual performance compared to targeted performance criteria and various subjective performance criteria. Subjective
performance criteria include an executives ability to motivate others, develop the skills necessary to grow as we mature as a company, recognize and pursue new business opportunities and initiate programs to enhance our growth and success. The
Compensation Committee does not rely on a formula that assigns a pre-determined value to each of the criteria, but instead evaluates an executive officers contribution in light of all criteria. No named executive officer received a cash bonus
or stock award in 2008.

Compensation for executive officers may also include the long-term incentives afforded by stock options and
restricted stock awards. The purpose of stock options and restricted stock awards is to align the long-term interests of our executives and our stockholders and assist in the retention of executives. The size of stock-based awards is generally
intended to reflect the executives position and contributions to the Company including each executives success in achieving the individual performance criteria described above and contributions to the corporate goals.

Because of the direct relationship between the value of an option and the market price of our Common Stock, the Compensation Committee believes that
granting stock options is an effective method of motivating executive officers to manage the Company in a manner that is consistent with the interests of the Company and our stockholders. However, because of the evolution of regulatory, tax and
accounting treatment of equity incentive programs, and because it is important to us to retain our executive officers and key employees, the Compensation Committee realizes that it is important that the Company utilize other forms of equity awards
as and when we may deem it necessary.

COMPENSATION COMMITTEE REPORT

The Compensation Committee met with management to review and discuss the Compensation Discussion and Analysis. Based on such review and discussion, the
Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Amendment No. 1 to the Companys 2008 Annual Report on Form 10-K, and the Board has approved that recommendation.



Respectfully submitted by The Compensation
Committee of the Board of Directors Peter Collins, Chairman Gerald A. Fallon Robert
Moreyra




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EXECUTIVE COMPENSATION

Summary Compensation Table

The following table shows, for the years ended December 31, 2007 and
2008, the cash and other compensation awarded to, earned by, or paid to Mr. Myers (the Named Executive Officers) for all services in all capacities. No other executive officer earned in excess of $100,000 during the year ended
December 31, 2008.



|                                                    |  |          |  |                |  |          |  |                |  |                     |  |                                         |  |                                             |  |                              |  |               
|--------------------------------------------------- |  | -------- |  | -------------- |  | -------- |  | -------------- |  | ------------------- |  | --------------------------------------- |  | ------------------------------------------- |  | ---------------------------- |  | --------------
|Name and Principal Position                         |  | Year     |  | Salary($)      |  | Bonus($) |  | StockAwards($) |  | OptionAwards($) (1) |  | Non-EquityIncentive PlanCompensation($) |  | NonqualifiedDeferredCompensationEarnings($) |  | All OtherCompensation($) (2) |  | Total ($)     
|                                                    |  |          |  |                |  |          |  |                | 
|Kenneth T. MyersPresident & Chief Executive Officer |  | 20082007 |  | 225,000225,000 |  |        |  |              |  | 3,285              |  |                                       |  |                                           |  | 6,7506,750                   |  | 231,750235,035



|(1) | Amount shown in this column is based on the accounting expense recognized by the Company in fiscal year 2007 related to stock option awards granted to the Named Executive Officers,
exclusive of any estimates of forfeiture relating to service-based vesting. The assumptions used to calculate the accounting expense recognized are set forth in Note 1 to the Companys audited financial statements.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Amounts shown in this column represents the value of perquisites for 401(k) matching contributions for Mr. Myers.
|--- | -----------------------------------------------------------------------------------------------------------------

2008 Grants of Plan-Based Awards

The Named Executive
Officers were not granted any stock options or any stock awards vest during the year ended December 31, 2008.

Outstanding Executive Equity Awards
at Fiscal Year-End

No equity awards from the Company to Named Executive Officers are outstanding as of December 31, 2008.

Option Exercises and Stock Vested

The
Named Executive Officers did not exercise any stock options and did not have any stock awards vest during the year ended December 31, 2008.

Pension Benefits and Deferred Compensation Plans

The Company does not provide pension benefits or deferred compensation
plans.

Section 401(k) Plan

In
1997, the Company adopted a 401(k) Salary Savings Plan (the 401(k) Plan) covering the Companys full-time employees located in the United States. The 401(k) Plan is intended to qualify under Section 401(k) of the Internal
Revenue Code, so that contributions to the 401(k) Plan by employees or by the Company, and the investment earnings thereon, are not taxable to employees until withdrawn from the 401(k) Plan, and so that contributions by the Company, if any, will be
deductible by the Company when made. Pursuant to the 401(k) Plan, employees may elect to reduce their current compensation by up to the statutorily prescribed annual limit ($15,500 in 2008 or $20,500 for employees 50 years or older) and to have the
amount of such reduction contributed to the 401(k) Plan. The 401(k) Plan permits, but does not require, additional matching contributions to the 401(k) Plan by the Company on behalf of all participants in the 401(k) Plan. Currently, the Company
matches the first 6% of such voluntary contributions at 50% of the amount contributed by the employee.

Compensation Committee Interlocks and Insider
Participation

During 2008, the Compensation Committee consisted of Mr. Collins (Chairman), Mr. Fallon and Mr. Moreyra.
During 2008, none of the Companys executive officers or former officers served on the Compensation Committee or board of directors of any entities whose directors or officers serve on the Companys Compensation Committee or the Board.



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DIRECTOR COMPENSATION

The following table shows the cash compensation as well as certain other compensation paid to the Companys directors during the year ended
December 31, 2008:



|                  |  |                          |        |             |   |                 |  |                                      |       |                                          |   |                       |  |       |   |  |   |   |  |   |       
|----------------- |  | ------------------------ | ------ | ----------- | - | --------------- |  | ------------------------------------ | ----- | ---------------------------------------- | - | --------------------- |  | ----- | - |  | - | - |  | - | ------
|Name              |  | FeesEarned orPaid inCash |        | StockAwards |   | OptionAwards(1) |  | Non-EquityIncentive PlanCompensation |       | NonqualifiedDeferredCompensationEarnings |   | All OtherCompensation |  | Total
|Peter H. Collins  |  | $                        | 37,500 |             | $ |                |  | $                                    |      |                                          | $ |                      |  | $     |  |  | $ |  |  | $ | 37,500
|                  |  |                          |        |             |   |                 | 
|Gerald A. Fallon  |  |                          | 37,500 |             |   |                |  |                                      |      |                                          |   |                      |  |       |  |  |   |  |  |   | 37,500
|                  |  |                          |        |             |   |                 | 
|Robert F. Hussey  |  |                          | 37,500 |             |   |                |  |                                      | 1,115 |                                          |   |                      |  |       |  |  |   |  |  |   | 38,615
|                  |  |                          |        |             |   |                 | 
|Robert Moreyra    |  |                          | 37,500 |             |   |                |  |                                      |      |                                          |   |                      |  |       |  |  |   |  |  |   | 37,500
|                  |  |                          |        |             |   |                 | 
|Dr. Bryan J. Zwan |  |                          |       |             |   |                |  |                                      |      |                                          |   |                      |  |       |  |  |   |  |  |   |      



|(1) | Amounts shown in this column are based on the accounting expense recognized by the Company in fiscal year 2008 related to stock option awards, exclusive of any estimates of
forfeitures relating to service-based vestings. The assumption used to calculate the accounting expense recognized in fiscal year 2008 for these stock options is set forth in Note 1-Summary of Significant Accounting Policies under
Stock Based Compensation to the Companys consolidated audited financial statements included in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2008.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Each independent director automatically receives an option to purchase 50,000 shares of Common Stock under the 2001 Stock Option Plan upon joining the
Board and is entitled to automatically receive an additional option to purchase 25,000 shares of Common Stock under the 2001 Stock Option Plan upon re-election at each Annual Meeting of Stockholders thereafter. Each of the directors elected not to
receive the option grant to which he was otherwise entitled after the 2008 Annual Meeting of Stockholders. Directors of the Company receive an annual service fee of $30,000. Employee directors do not receive compensation for their service on the
Board. Directors are also reimbursed for travel and other expenses relating to attendance at meetings of the Board or committees. During 2008, Dr. Zwan elected not to receive any compensation, either in terms of director fees or stock option
grants for services he provided to the Company as Chairman of the Board. Additionally, during 2008, Dr. Zwan elected not to be reimbursed by the Company for travel and other expenses related to attendance at meetings of the Board or committees.



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Outstanding Director Equity Awards at Fiscal Year-End

The following shows the outstanding equity awards of the Companys directors as of December 31, 2008. The Company did not grant any awards to
the Named Executive Officers under any equity incentive plans during the year ended December 31, 2008.



|                  |  |                                                               |  |                                                                  |  |                                   |  |                                                                  
|----------------- |  | ------------------------------------------------------------- |  | ---------------------------------------------------------------- |  | --------------------------------- |  | -----------------------------------------------------------------
|                  |  | Option Awards                                                
|Name              |  | Number ofSecuritiesUnderlyingUnexercisedOptions(#)Exercisable |  | Number ofSecuritiesUnderlyingUnexercisedOptions(#)Un-exercisable |  | OptionExercisePrice($)            |  | OptionExpirationDate                                             
|Peter H. Collins  |  | 50,000                                                        |  |                                                                 |  | 1.30                              |  | 12/7/2010                                                        
|                  |  |                                                               |  |                                                                 
|Gerald A. Fallon  |  | 25,00025,000 100,000 100,000                                  |  |                                                              |  | 1.282.26 2.26 1.01                |  | 1/12/20093/4/2010 3/4/2010 11/8/2010                             
|                  |  |                                                               |  |                                                                 
|Robert F. Hussey  |  | 25,000100,000 25,000 100,000 100,000 250,000 100,000          |  |                                                           |  | 1.281.28 2.26 2.26 1.01 1.11 0.26 |  | 1/23/20091/23/2009 3/4/2010 3/4/2010 11/8/2010 2/15/2011 7/1/2011
|                  |  |                                                               |  |                                                                 
|Robert Moreyra    |  | 50,00025,000 200,000 200,000                                  |  |                                                              |  | 0.782.26 2.26 1.01                |  | 12/26/20093/4/2010 3/4/2010 11/8/2010                            
|                  |  |                                                               |  |                                                                 
|Dr. Bryan J. Zwan |  |                                                              |  |                                                                 |  |                                  |  |                                                                 



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|Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|-------- | ----------------------------------------------------------------------------------------------

Securities Ownership of Certain Beneficial Owners and Management

The following table lists the stockholders known to the Company to be the beneficial owners of more than 5% of the Shares as of April 9, 2009. The table also provides the stock ownership as of the same date of
all directors, all executive officers and all directors and executive officers as a group. As of April 9, 2009, there were 255,485,347 shares of Common Stock issued and outstanding. To the knowledge of the Company, except as noted in the
footnotes below, all persons listed below have sole voting and investment power with respect to their shares of Common Stock, except to the extent authority is shared by spouses under applicable law. Unless otherwise noted in the footnotes, the
address for each person is c/o Digital Lightwave, Inc., 5775 Rio Vista Drive, Clearwater, Florida 33760.



|                                                            |  |                                        |  |                           |  
|----------------------------------------------------------- |  | -------------------------------------- |  | ------------------------- | -
|                                                            |  | Shares BeneficiallyOwned (1)           | 
|Executive Officers and Directors                            |  | Amount andNature ofBeneficialOwnership |  | Percent ofCommonStock (8) |  
|Dr. Bryan J. Zwan (2)                                       |  | 232,722,523                            |  | 91.1                      | %
|Robert F. Hussey (3)                                        |  | 575,000                                |  | *                         |  
|Robert Moreyra (4)                                          |  | 475,000                                |  | *                         |  
|Gerald A. Fallon (5)                                        |  | 225,000                                |  | *                         |  
|Kenneth T. Myers (6)                                        |  | 50,000                                 |  | *                         |  
|Peter H. Collins (7)                                        |  | 50,000                                 |  | *                         |  
|All executive officers and directors as a group (6 persons) |  | 234,097,523                            |  | 91.6                      | %

|
|
|

| | * | Less than one percent.
| | - | ----------------------

| | (1) | Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission (the SEC) that deem shares to be beneficially owned by any
person who has or shares voting or investment power with respect to such shares. Unless otherwise indicated below, the persons and entities named in the table have sole voting and sole investment power with respect to all shares beneficially owned,
subject to community property laws where applicable. Shares of Common Stock subject to options or convertible securities that are currently exercisable or convertible or are exercisable or convertible within 60 days of April 9, 2009, are deemed
to be outstanding and to be beneficially owned by the person holding such options for the purpose of computing the percentage ownership of such person but are not treated as outstanding for the purpose of computing the percentage ownership of any
other person.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Consists of (a) 11,518,750 shares of Common Stock owned through affiliates controlled by Dr. Zwan, ZG Nevada Limited Partnership and ZG Nevada, Inc., and
(b) 221,203,773 shares of Common Stock owned by Optel Capital, LLC (Optel), an entity controlled by Dr. Zwan. Dr. Zwans address is c/o Orrick, Herrington & Sutcliffe LLP, 1000 Marsh Road, Menlo Park,
California 94025, and Attention: Louis D. Soto.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Consists of 575,000 shares of Common Stock issuable upon exercise of options that are currently exercisable or exercisable within 60 days of April 9, 2009.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Consists of 475,000 shares of Common Stock issuable upon exercise of options that are currently exercisable or exercisable within 60 days of April 9, 2009.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | Consists of 225,000 shares of Common Stock issuable upon exercise of options that are currently exercisable or exercisable within 60 days of April 9, 2009.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | Consists of 50,000 shares of Common Stock issuable upon exercise of options that are currently exercisable or exercisable within 60 days of April 9, 2009.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| | (7) | Consists of 50,000 shares of Common Stock issuable upon exercise of options that are currently exercisable or exercisable within 60 days of April 9, 2009.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| | (8) | The percent of shares beneficially owned is based upon the 255,489,847 shares of Common Stock issued and outstanding on April 9, 2009, and the number of shares held by the
executive officers or directors of the Company. See Notes (2) through (7) above.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Equity Compensation Plan Information

The following table sets forth the Companys equity compensation plan information as of December 31, 2008.



|                                                           |  |                                                                                       |  |                                                                         |      |                                                                                                                                      |           
|---------------------------------------------------------- |  | ------------------------------------------------------------------------------------- |  | ----------------------------------------------------------------------- | ---- | ------------------------------------------------------------------------------------------------------------------------------------ | ----------
|Plan Category                                              |  | Number ofSecurities to beIssued UponExercise ofOutstandingOptions, Warrantsand
Rights |  | Weighted-AverageExercise Price ofOutstandingOptions, Warrantsand Rights |      | Number ofSecurities RemainingAvailable for FutureIssuance UnderEquityCompensation Plans(Excluding SecuritiesReflected in Column (a))
|Equity Compensation Plans Approved by Security Holders (1) |  | 2,100,000                                                                             |  | $                                                                       | 1.56 |                                                                                                                                      | 10,037,214
|Equity Compensation Plans Not Approved by Security Holders |  |                                                                                      |  |                                                                         |     |                                                                                                                                      |          
|                                                           |  |                                                                                       |  |                                                                         |      |                                                                                                                                      |           
|Total                                                      |  | 2,100,000                                                                             |  | $                                                                       | 1.56 |                                                                                                                                      | 10,037,214
|                                                           |  |                                                                                       |  |                                                                         |      |                                                                                                                                      |           
|                                                          
|(1)    These plans consist of the 2001 Stock Option Plan. 



|Item 13. | Certain Relationships and Related Transactions, and Director Independence
|-------- | -------------------------------------------------------------------------

Certain Relationships and Related Transactions

On April 4, 2008, the Company and Optel Capital,
LLC (Optel) entered into a Credit and Restructuring Agreement (the Credit Agreement) pursuant to which (a) the Companys existing indebtedness owed to Optel, consisting of approximately $28.0 million of principal,
which bore interest at 10% per annum, and accrued interest thereon of approximately $7.7 million, all of which was due and payable upon demand by Optel, was restructured and (b) Optel agreed to make a $2.5 million revolving credit facility
available to the Company. Optel is controlled by Dr. Bryan J. Zwan, the Companys largest stockholder and chairman of the board of directors. The Credit Agreement was approved by the Companys board of directors upon the
unanimous recommendation of a special committee of the board comprised solely of independent directors.

Pursuant to the Credit Agreement,
the restructured indebtedness is evidenced by a new secured convertible promissory note in the principal amount of approximately $35.7 million (the Restated Note), and the revolving credit facility is evidenced by an additional secured
convertible promissory note in the principal amount of $2.5 million (the New Commitment Note and, together with the Restated Note, the Notes). As of March 9, 2009, the balance of the Restated Note and New Commitment Note
was $35.7 million and $2.5 million, respectively. The Notes bear interest at a rate equal to LIBOR plus 1.0% per annum and are secured by all the Companys assets pursuant to an amended and restated security agreement (the Security
Agreement). From April 4, 2008 through March 9, 2009, interest expense related to the Restated Note was approximately $1.3 million, which is recorded in other expense on the Consolidated Statements of Operations. As of
December 31, 2008, accrued interest associated with the Notes of $465,000 is recorded in accounts payable and accrued liabilities on the Consolidated Balance Sheets. Each of the Notes requires quarterly payments of interest commencing on
June 30, 2008, and matures on March 31, 2010. Interest payments of approximately $321,000, $353,000 and $465,000 were made July 1, 2008, October 1, 2008 and January 5, 2009, respectively.

Board of Directors Independence

The Board has
determined that Messrs. Collins and Fallon are independent as defined under Rule 4200 of the NASDAQ Marketplace Rules.



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##### Table of Contents

|Item 14. | Principal Accountant Fees and Services
|-------- | --------------------------------------

PRINCIPAL ACCOUNTANT FEES AND SERVICES



|                   |  |      |         |      |   |        
|------------------ |  | ---- | ------- | ---- | - | -------
|                   |  | 2008 |         | 2007
|Audit Fees         |  | $    | 313,629 |      | $ | 276,789
|Audit-Related Fees |  |      |        |      |   |       
|Tax Fees (1)       |  |      | 31,625  |      |   | 39,196 
|All Other Fees (2) |  |      | 78,211  |      |   | 16,733 
|                   |  |      |         |      |   |        
|Total Fees         |  | $    | 423,465 |      | $ | 332,718
|                   |  |      |         |      |   |        

The following list details the aggregate fees billed by Grant Thornton LLP and Sterling Management
Resources, Inc. for professional services during 2008 and 2007. Unless otherwise specified, the amounts represent fees paid to Grant Thornton LLP



|(1) | Consisted of fees for tax compliance, tax advice and tax planning services for federal, state and local taxes.
|--- | --------------------------------------------------------------------------------------------------------------



|(2) | Consisted of fees billed by Sterling Management Resources, Inc. for services relating to Sarbanes-Oxley compliance.
|--- | -------------------------------------------------------------------------------------------------------------------

Audit Committee Pre-Approval Policy

The Audit
Committee has adopted a policy for the pre-approval of all audit and non-audit services provided by our independent registered public accounting firm. The policy is designed to ensure that the provision of these services does not impair the
registered public accounting firms independence. Under the policy, any services provided by the independent registered public accounting firm, including audit, audit-related, tax and other services, must be specifically pre-approved by the
Audit Committee.

The Audit Committee may delegate pre-approval authority to one or more of its members. The member or members to whom such
authority is delegated shall report any pre-approval decisions to the Audit Committee at its next scheduled meeting. The Audit Committee does not delegate responsibilities to pre-approve services performed by the independent registered public
accounting firm to management.

For 2008, all audit, audit-related and tax services including all other services provided by Grant Thornton
LLP were pre-approved.

PART IV



|Item 15. | Exhibits and Financial Statement Schedules.
|-------- | -------------------------------------------

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

(3) Exhibits

Exhibits are incorporated herein by reference or are filed with this Amendment No. 1 to Annual Report on Form 10-K/A as indicated below
(numbered in accordance with Item 601 of Regulation S-K):



|               |  |                                                                                                                                                                                                    
|-------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description                                                                                                                                                                                        
|31.1           |  | Certifications of Chief Executive Officer Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                            
|               | 
|31.2           |  | Certifications of Chief Executive Officer and Vice President, Finance Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.



10



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##### Table of Contents

SIGNATURES

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



DIGITAL LIGHTWAVE, INC.By:

/s/ KENNETH T. MYERSKenneth T. MyersPresident and Chief Executive Officer


Date: April 30, 2009

We the undersigned directors and officers of the Registrant, hereby severally constitute Kenneth T. Myers our true lawful attorney with full power to him to sign for us, in our names, in the capacities indicated below, any and all
amendments to the Annual Report on Form 10-K filed with the Securities and Exchange Commission.

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



|                      |  |  |  |                                       |  |  |  |               
|--------------------- |  |  |  | ------------------------------------- |  |  |  | --------------
|NAME                  |  |  |  | TITLE                                 |  |  |  | DATE          
|                      |  |  |  |                                      
|/s/ KENNETH T. MYERS  |  |  |  | President and Chief Executive Officer |  |  |  | April 30, 2009
|Kenneth T. Myers      |  |  |  | (Principal Executive Officer)         |  |  |  |               
|                      |  |  |  |                                      
|/s/ KENNETH T. MYERS  |  |  |  | Interim Chief Accounting Officer      |  |  |  | April 30, 2009
|Kenneth T. Myers      |  |  |  | (Principal Accounting Officer)        |  |  |  |               
|                      |  |  |  |                                      
|/s/ DR. BRYAN J. ZWAN |  |  |  | Chairman of the Board                 |  |  |  | April 30, 2009
|Dr. Bryan J. Zwan     |  |  |  |                                       |  |  |  |               
|                      |  |  |  |                                      
|/s/ PETER H. COLLINS  |  |  |  | Director                              |  |  |  | April 30, 2009
|Peter H. Collins      |  |  |  |                                       |  |  |  |               
|                      |  |  |  |                                      
|/s/ GERALD A. FALLON  |  |  |  | Director                              |  |  |  | April 30, 2009
|Gerald A. Fallon      |  |  |  |                                       |  |  |  |               
|                      |  |  |  |                                      
|/s/ ROBERT F. HUSSEY  |  |  |  | Director                              |  |  |  | April 30, 2009
|Robert F. Hussey      |  |  |  |                                       |  |  |  |               
|                      |  |  |  |                                      
|/s/ ROBERT MOREYRA    |  |  |  | Director                              |  |  |  | April 30, 2009
|Robert Moreyra        |  |  |  |                                       |  |  |  |               



11