UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 8-K

                                 CURRENT REPORT
     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


     Date of Report (Date of earliest event reported)       December 5, 2002
                                                          ------------------


                          DATA SYSTEMS & SOFTWARE INC.
             (Exact name of Registrant as Specified in its Charter)


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               Delaware                    0-19771               22-2786081
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     (State or Other Jurisdiction  (Commission file Number)     (IRS Employer
       of  Incorporation)                                   Identification  No.)



     200  Route  17,  Mahwah,  New  Jersey                         07430
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     (Address  of  Principal  Executive  Offices)                (Zip  Code)



        Registrant's telephone number, including area code (201) 529-2026
                                                           --------------



Item  5.     Other  Events  and  Regulation  FD  Disclosure.
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     On  December 5, 2002, our subsidiary, Comverge Technologies, Inc., closed a
three-year  $2 million secured revolving line of credit from Laurus Master Fund,
Ltd.  The  available  line  of  credit  will  be  based  on  Comverge's accounts
receivables  and inventory, and will be secured by all of the assets of Comverge
and  by  the  accounts  receivables  of  our  subsidiary, Databit, Inc.  We have
guaranteed  the  repayment of any advances and payment of fees under the line of
credit.

     In  addition, Laurus may convert up to an aggregate of $600,000 of the line
of  credit into shares of our common stock at a fixed conversion price of $1.50.
We  also  issued  a five-year warrant, exercisable in three tranches at exercise
prices ranging from $2.00 to $3.34 per share. Under the terms of the agreements,
Laurus  cannot  to  sell any DSSI shares issuable upon conversion of the line of
credit  or  upon  exercise  of  the  warrants  before  June  5,  2003.

     We  have  agreed  to  file with the Securities and Exchange Commission, and
have  declared  effective by April 4, 2002, a registration statement registering
the  resale  of  the  shares of our common stock issuable upon conversion of the
line  of  credit  and  exercise  of  the  warrant.

     Comverge  intends  to  use the proceeds from the line of credit for general
corporate  purposes.

Item  7.  Financial  Statements,  Pro  Forma Financial Information and Exhibits.
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     (c)  Exhibits

     Exhibit  10.1  -  Purchase  and Security Agreement, dated as of December 4,
2002,  by and between Comverge Technologies, Inc. ("Comverge") and Laurus Master
Fund,  Ltd.  ("Laurus").

     Exhibit  10.2  -  Convertible  Note,  dated  December 4, 2002, by and among
Comverge,  Laurus  and,  as  to Articles III and V only, Data Systems & Software
Inc.  ("DSSI").

     Exhibit  10.3  -  Common  Stock  Purchase  Warrant, dated December 5, 2002,
issued  by  DSSI  to  Laurus.

     Exhibit 10.4 - Registration Rights Agreement, dated as of December 4, 2002,
by  and  between  DSSI  and  Laurus.

     Exhibit  10.5  - Guaranty, dated December 4, 2002, made by DSSI in favor of
Laurus.






                                   SIGNATURES

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


                         DATA  SYSTEMS  &  SOFTWARE  INC.



Date:  December  9,  2002               BY:     s/Sheldon  Krause
                                           ----------------------------
                                                Sheldon  Krause
                                                Secretary