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<SEC-DOCUMENT>0000000000-05-023594.txt : 20060809
<SEC-HEADER>0000000000-05-023594.hdr.sgml : 20060809
<ACCEPTANCE-DATETIME>20050512163214
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000000000-05-023594
CONFORMED SUBMISSION TYPE:	UPLOAD
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20050512

FILED FOR:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ELECTRO SENSORS INC
		CENTRAL INDEX KEY:			0000351789
		STANDARD INDUSTRIAL CLASSIFICATION:	INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL [3823]
		IRS NUMBER:				410943459
		STATE OF INCORPORATION:			MN
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		UPLOAD

	BUSINESS ADDRESS:	
		STREET 1:		6111 BLUE CIRCLE DR
		CITY:			MINNETONKA
		STATE:			MN
		ZIP:			55343-9108
		BUSINESS PHONE:		9529300100

	MAIL ADDRESS:	
		STREET 1:		6111 BLUE CIRCLE DR
		CITY:			MINNETONKA
		STATE:			MN
		ZIP:			55343
PUBLIC REFERENCE ACCESSION NUMBER:		0001104659-05-012762
</SEC-HEADER>
<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>





Mail Stop 0306


May 9, 2005


Via U.S. Mail and Facsimile to (952) 930-0130

Bradley D. Slye
Chief Executive Officer
Electro-Sensors, Inc.
6111 Blue Circle Drive
Minnetonka, Minnesota 55343-9108


	Re:	Electro-Sensors, Inc.
		Form 10-SBK for Fiscal Year-Ended December 31, 2004
      File No. 000-09587


Dear Mr. Slye:

      We have reviewed your filing and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and do no intend to expand our review to other
portions of your documents. Where indicated, we think you should
revise your document in response to these comments.  If you
disagree,
we will consider your explanation as to why our comment is
inapplicable or a revision is unnecessary.  Please be as detailed
as
necessary in your explanation.  In some of our comments, we may
ask
you to provide us with supplemental information so we may better
understand your disclosure.  After reviewing this information, we
may
or may not raise additional comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.





Form 10-KSB for the Year Ended December 31, 2004

General

1. Please explain whether you are an investment company under
Section
3(a)(1)(C) of the Investment Company Act of 1940 ("Investment
Company
Act").  Please explain how you have made this determination and
provide data indicating the value of your "investment securities"
and
total assets on an unconsolidated basis as of the fiscal year
ended
December 25, 2004.

2. If you are an investment company under Section 3(a)(1)(C),
please
explain how you are in compliance with the Investment Company Act.
For example, please explain fully whether you can rely on Rule 3a-
1
of the Investment Company Act.

Item 7. Financial Statements and Supplementary Data - Page 12

Report of Independent Registered Public Accounting Firm - Page 14

3. Please either revise the filing to include an audit report that
opines on the proper fiscal 2002 financial statements or delete
fiscal 2002 information from the filing.

Note 1. Nature of Business and Significant Accounting Policies -
Page
19

Software revenue recognition - Page 21

4. We see that your customers pay an annual maintenance fee for
software support. Please tell us more about these arrangements.
Supplementary, please also address the following:
* The amount of support services included with the original
character
recognition software purchase.
* Whether the support services contracts are sold in conjunction
with
the original character recognition software or are included in the
original purchase price of the software.
* Your consideration of SOP 97-2 and EITF 00-21 related to the
sale
of software and software support.

Note 2. Investments - Page 25

Investment Reported on Equity Method - Page 26

5. We see that you have determined that you have "significant
influence" over the operations of PPT. Supplementary, tell us and
revise future filings to indicate why the equity method is
appropriate for this less than 20% owned investee.  Tell us and
revise future filings to indicate what specific factors lead you
to
conclude that you can exercise significant influence over PPT.
       As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter that keys your responses to our
comments and provides any requested supplemental information.
Detailed cover letters greatly facilitate our review.  Please
understand that we may have additional comments after reviewing
your
amendment and responses to our comments.

	 We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

      You may contact Kevin Kuhar, Staff Accountant, at (202) 824-
5579 or me at (202) 942-1812 if you have questions regarding these
comments on the financial statements and related matters.  In this
regard, do not hesitate to contact Angela Crane, Branch Chief, at
(202) 942-1931.



							Sincerely,



							Jay Webb
							Reviewing Accountant
Bradley D. Slye
Electro-Sensors, Inc.
May 12, 2005
Page 1






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