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): July 27, 2006

                              Data I/O Corporation
             (Exact name of registrant as specified in its charter)

                 (State of other jurisdiction of incorporation)

           0-10394                                          91-0864123
  (Commission File Number)                    (IRS Employer Identification No.)

   6464 185th Ave. N.E., Redmond, WA                                      98052
 (Address of principal executive offices)                             (Zip Code)

       Registrant's telephone number, including area code: (425) 881-6444

                                 Not Applicable
          (Former name or former address, if changed since last report)

                                Page 1 of 6 Pages

Item 2.02 Results of Operation and Financial Condition

A copy of a press release made on July 27, 2006 follows:

Data I/O Corporation
6464 185TH Ave. N.E., Suite 101
Redmond, WA 98052
Tel:(425) 881-6444
Fax:(425) 881-6856

For information please contact:

Joel Hatlen                                        Deb Stapleton
VP, Finance and Chief Financial Officer            Stapleton Communications Inc.
Data I/O Corporation                               (650) 470-0200
(425) 881-6444                           


Redmond, Wash., July 27, 2006 - Data I/O Corporation (NASDAQ: DAIO), the leading
provider of manual and automated  device  programming  systems,  today announced
financial results for the second quarter ended June 30, 2006.

Revenues for the second  quarter of 2006 were $7.2  million,  up 12 percent over
the $6.4 million reported in the first quarter of 2006 and up 8 percent from the
$6.6 million  recorded in the second  quarter of 2005.  Order bookings were $7.3
million,  compared  with  $7.1  million  in the first  quarter  of 2006 and $6.6
million in the second quarter of 2005.  For the first half of 2006,  orders were
$14.4 million,  up 14 percent from the $12.6 million  recorded in the first half
of 2005.  Backlog  increased  $200,000 to $2.1  million at the end of the second
quarter. Gross margins in the second quarter of 2006 were 52.3 percent, compared
with 53.2 percent in the prior  quarter.  The lower gross margin  percentage  is
primarily  due to a less  favorable  product mix shift,  lower  average  selling
prices, and labor and overhead variances.

In accordance with U.S.  generally  accepted  accounting  principles (GAAP), net
loss in the  second  quarter  of 2006 was  $398,000  or a net loss of $0.05  per
share, compared with a net loss of $512,000, or a net loss of $0.06 per share in
the first quarter of 2006. In the second quarter of 2005,  the company  reported
net income of $53,000 or $0.01 per share.

Research and  development  expenses were up  substantially  due to materials and
patent related costs for the newly launched  FLX-500.  The net loss per share in
the second  quarter of 2006  includes  $0.01  that  resulted  from the impact of
expensing options under FAS 123(R). The company has cash and investments of $3.7
million at June 30, 2006.

"We were very pleased to see the  momentum in new orders  driven by new products
and by new applications for our FlashCore line.  Orders for the new FLX-500 were
$600,000 in the second quarter, exceeding our expectations for the first quarter
of  introduction.  We  expect  revenue  to build  as we  begin to ship  units to
customers in the third quarter.  We also expect R&D expenditures to moderate now
that the ImageWriter and FLX-500 are in production."  said Fred Hume,  president
and CEO.

Conference Call Information
A conference  call  discussing the second  quarter 2006  financial  results will
follow this release today at 2:00 p.m.  Pacific  time/5:00 p.m. Eastern time. To
listen to the conference  call,  please dial (773) 681-5826,  passcode:  DAIO. A
taped replay will be made available  approximately one hour after the conclusion
of the call and will remain available for one week. To access the replay, please
dial (203)  369-1646.  The conference call will also be  simultaneously  webcast
over  the  Internet;  visit  the  Investor  Relations  section  of the  Data I/O
Corporation website at  to access the call from the site.
This  webcast  will be  recorded  and  available  for  replay  on the  Data  I/O
Corporation  website  approximately  two  hours  after  the  conclusion  of  the
conference call.

About Data I/O Corporation
Celebrating  more  than  30  years  of  innovative   leadership  in  the  device
programming industry,  Data I/O Corporation (NASDAQ:  DAIO), provides manual and
automated device programming systems that specifically  address the requirements
of engineering and manufacturing  customers.  FlashCORE(TM),  Sprint and UniSite
families  provide a wide range of device  support and  versatility  to address a
user's many different  programming  needs. Data I/O Corporation has headquarters
in  Redmond,  WA,  with  sales  and  services  offices  worldwide.  For  further
information, visit the company's website at

Forward Looking Statement
Statements in this news release  concerning  future revenues,  margins,  results
from operations,  financial position, economic conditions,  product releases and
any other statement that may be construed as a prediction of future  performance
or events are forward-looking  statements which involve known and unknown risks,
uncertainties  and  other  factors  which  may cause  actual  results  to differ
materially  from those  expressed or implied by such  statements.  These factors
include  uncertainties as to levels of orders,  ability to record revenues based
upon the timing of product  deliveries and  installations,  market acceptance of
new products,  changes in economic  conditions  and market  demand,  pricing and
other activities by competitors,  and other risks including those described from
time to time in the Company's  filings on Forms 10K and 10Q with the  Securities
and Exchange  Commission  (SEC),  press releases and other  communications.  The
accuracy and  completeness of  forward-looking  statements  should not be unduly
relied  upon.  Data I/O is under no duty to update any of these  forward-looking

                       - Summary Financial Data Attached -

                              DATA I/O CORPORATION
                      (in thousands except per share data)

                                                          Second Quarter                               Six Months Ended
                                              -----------------------------------------       -------------------------------------
                                                                               Percent                                      Percent
                                              6/30/2006       6/30/2005         Change        6/30/2006     6/30/2005        Change
                                              -----------------------------------------       -------------------------------------
Net sales                                           $7,163         $6,642         7.8%            $13,575      $13,379         1.5%
Gross margin                                         3,743          3,933        -4.8%              7,154        7,947       -10.0%
Gross margin as percent of sales                     52.3%          59.2%                           52.7%        59.4%
Operating expenses:
  Research & development                             1,513          1,350        12.1%              2,819        2,687         4.9%
  Selling, general and administrative                2,626          2,378        10.4%              5,266        5,010         5.1%
   Provision for business restructure                    0             55                               0           55
                                                  ---------       ---------                      ---------     ---------
Operating income (loss)                               (396)           150                            (931)         195

Non-operating income (expense):                         24              8                              77            8
                                                  ---------       ---------                      ---------     ---------
Income (loss) from operations before taxes            (372)           158                            (854)         203

Income tax expense (benefit)                            26            105                              55          111
                                                  ---------       ---------                      ---------     ---------

Net income (loss)                                    ($398)           $53                           ($909)         $92
                                                  =========       =========                      =========     =========
Total diluted earnings (loss) per share             ($0.05)         $0.01                          ($0.11)       $0.01

Diluted weighted average shares
outstanding                                          8,415          8,486                           8,401        8,518

                             CONDENSED BALANCE SHEET
                                 (in thousands)

                                                                            6/30/2006              12/31/2005
                                                                          ------------            ------------
Cash and cash equivalents                                                      $3,660                  $4,362
Short-term investments                                                              0                     800
Accounts receivable, net                                                        6,298                   6,828
Inventories                                                                     4,805                   3,529
Other current assets                                                              549                     329
Land, building and equipment                                                    2,363                   2,274
Other long-term assets                                                             80                      15
                                                                          ------------            ------------
        Total assets                                                          $17,755                 $18,137
                                                                          ============            ============

Current liabilities                                                            $5,855                  $5,854
Shareholders' equity                                                           11,900                  12,283
                                                                          ------------            ------------
        Total liabilities and shareholders' equity                            $17,755                 $18,137
                                                                          ============            ============


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 I/O Corporation

July 31, 2006                       By /s/Frederick R. Hume
                                    Frederick R. Hume
                                    Chief Executive Officer

                                    By /s/Joel S. Hatlen
                                    Joel S. Hatlen
                                    Vice President - Finance
                                    Chief Financial Officer
                                    Secretary and Treasurer