content: 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) January 11, 2001
  
  
  
                                   Nestor, Inc.
              (Exact Name Of Registrant As Specified In Its Charter)
  
  
  
                                     Delaware
                  (State or other jurisdiction of incorporation)
  
  
  
  
  
               0-12965                               13-3163744
        (Commission File Number)        I.R.S. Employer Identification No.)
  
  
  
  
    One Richmond Square, Providence, Rhode Island		         02906
      (Address of principal executive offices)                (Zip Code)
  
  
       Registrant's telephone number, including area code (401) 331-9640
  
  
  
  
                                        N/A
         (Former name or former address, if changed since last report.)
  
  
  
  
  
  
  
  Item 5.     Other Events.
  
  
  Nestor, Inc. ("Nestor") announced on January 11, 2001 the signing of a
  Secured Note Agreement among an independent investment group, Nestor and
  Nestor Traffic Systems, Inc., Nestor's 35% owned affiliate ("NTS").  The
  independent investment group has agreed initially to loan NTS up to
  $4,000,000, and may increase its investment in NTS, under certain conditions.
  Also, an agreement in principle has been reached to combine Nestor and NTS.
  If the combination is completed, the investment group will acquire, for a
  total investment of $8,000,000, approximately 16,756,000 (33.34%) shares of
  the common stock of Nestor; current NTS shareholders will receive
  approximately 15,580,000 shares of common stock of Nestor (31%); and Nestor
  shareholders, upon the combination becoming effective, would own
  approximately 35.66% of the common stock of Nestor.  The combination is
  subject to certain conditions including a fairness opinion of the transaction
  by a qualified investment company and approval by the shareholders of Nestor
  and NTS.
  
  
  
  
  Item 7.     Financial Statements and Exhibits.
  
  (c)	Exhibits.
  
                      A.  Secured Note Agreement dated as of January 9, 2001 by
                          and among Nestor, NTS and NTS Investors, LLC.
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
                                    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.
  
  
  Date:  January 17, 2001
  
                                          NESTOR, INC.
  
  
  
                                          By:/s/ Nigel P. Hebborn
                                             Nigel  P. Hebborn
                                             Chief Financial Officer
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text: 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) January 11, 2001
  
                                   Nestor, Inc.
              (Exact Name Of Registrant As Specified In Its Charter)
  
                                     Delaware
                  (State or other jurisdiction of incorporation)
  
               0-12965                               13-3163744
        (Commission File Number)        I.R.S. Employer Identification No.)
  
    One Richmond Square, Providence, Rhode Island		         02906
      (Address of principal executive offices)                (Zip Code)
  
       Registrant's telephone number, including area code (401) 331-9640
  
                                        N/A
         (Former name or former address, if changed since last report.)
  
  Item 5.     Other Events.
  
  Nestor, Inc. ("Nestor") announced on January 11, 2001 the signing of a
  Secured Note Agreement among an independent investment group, Nestor and
  Nestor Traffic Systems, Inc., Nestor's 35% owned affiliate ("NTS").  The
  independent investment group has agreed initially to loan NTS up to
  $4,000,000, and may increase its investment in NTS, under certain conditions.
  Also, an agreement in principle has been reached to combine Nestor and NTS.
  If the combination is completed, the investment group will acquire, for a
  total investment of $8,000,000, approximately 16,756,000 (33.34%) shares of
  the common stock of Nestor; current NTS shareholders will receive
  approximately 15,580,000 shares of common stock of Nestor (31%); and Nestor
  shareholders, upon the combination becoming effective, would own
  approximately 35.66% of the common stock of Nestor.  The combination is
  subject to certain conditions including a fairness opinion of the transaction
  by a qualified investment company and approval by the shareholders of Nestor
  and NTS.
  
  Item 7.     Financial Statements and Exhibits.
  
  (c)	Exhibits.
  
                      A.  Secured Note Agreement dated as of January 9, 2001 by
                          and among Nestor, NTS and NTS Investors, LLC.
  
                                    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.
  
  Date:  January 17, 2001
  
                                          NESTOR, INC.
  
                                          By:/s/ Nigel P. Hebborn
                                             Nigel  P. Hebborn
                                             Chief Financial Officer