content: 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
  
  
  
                                   October 13, 2004
  --------------------------------------------------------------------------------
                  Date of Report (Date of earliest event reported)
  
                                    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)               (IRS employer identification number)
  
  
                          400 MASSASOIT AVENUE, SUITE 200
                        EAST PROVIDENCE, RHODE ISLAND 02914
  --------------------------------------------------------------------------------
                      (Address of principal executive offices)
  
                                   (401) 434-5522
  --------------------------------------------------------------------------------
                (Registrant's telephone number, including area code)
  
                                   Not Applicable
  --------------------------------------------------------------------------------
                (Former name or former address if changed since last report)
  
  
  Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
  simultaneously  satisfy the filing obligation of the registrant under any of the
  following provisions (see General Instruction A.2. below):
  
    [ ]    Written  communications  pursuant to Rule 425 under the Securities Act
           (17 CFR 230.425)
  
    [ ]    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
           CFR 240.14a-12)
  
    [ ]    Pre-commencement  communications  pursuant to Rule 14d-2(b)  under the
           Exchange Act (17 CFR 240.14d-2(b))
  
    [ ]    Pre-commencement  communications  pursuant to Rule 13e-4(c)  under the
           Exchange Act (17 CFR 240.13e-4(c))
  
  
  
  
  <PAGE>
  
  ITEM   1.01.   ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
  
         EMPLOYMENT AGREEMENT WITH WILLIAM B. DANZELL
  
         On October 13, 2004, Nestor,  Inc. entered into an employment  agreements
  with William B. Danzell.  Mr. Danzell is the Chairman of the Board of Nestor and
  its  President and Chief  Executive  Officer.  Mr.  Danzell is also the Managing
  Director of Silver Star Partners I, LLC, which  beneficially owns  approximately
  53% of the issued and outstanding common stock of Nestor.
  
         The  employment  agreement  provides that Mr. Danzell will be paid a base
  salary of not less than $250,000 per year and annual  performance-based  bonuses
  to be determined by Nestor's  Compensation  Committee.  Mr. Danzell will also be
  paid  $75,000 for  services  performed  without  compensation  when he was first
  elected chief executive officer and president.
  
         The term of the  employment  agreement  is through  December 31, 2007 and
  automatically  renews for an additional two year period unless Nestor elects not
  to renew the  agreement.  The  employment  agreement may be terminated by either
  party on 30 days' notice. If Nestor terminates Mr. Danzell's  employment without
  Cause or Mr. Danzell resigns for Good Reason (each as defined in the agreement),
  then,  subject to certain  conditions,  Nestor is obligated  to pay Mr.  Danzell
  severance  equal to his base salary and bonus  (based then  current year to date
  performance)for  the remainder of the employment term and certain of his options
  (described below) vest immediately.
  
         Pursuant  to the  employment  agreement,  on  October  13,  2004,  Nestor
  granted,  under the terms of its 2004  Stock  Incentive  Plan,  two  options  to
  purchase 500,000 shares of Nestor common stock, $.01 par value per share, to Mr.
  Danzell at an option exercise price of $4.95 per share. The first option becomes
  exercisable  for  100,000 of the shares  subject to the option on  December  31,
  2004,  for 200,000  such shares on December 31, 2005 and for 200,000 such shares
  on December 31, 2006 and expires on October 13, 2012.  The second option becomes
  exercisable  on the  earlier  of (a)  October  13,  2012 or (b) with  respect to
  100,000  shares,  the  first  date on  which  Share  Price  (as  defined  in the
  agreement)  equals or exceeds  117.5% of Share Price on October 13,  2004,  with
  respect to 200,000 shares, the first date on which Share Price equals or exceeds
  138.0625% of Share Price on October 13, 2004 and with respect to 200,000 shares,
  the first date on which  Share  Price  equals or exceeds  162.2234375%  of Share
  Price on October  13,  2004 and  expires on October  12,  2014.  The options are
  incentive stock option to the extent  permitted under the Internal  Revenue Code
  of 1986,  as amended,  with any amount in excess of  permitted  levels under the
  Code to be treated as a non-statutory stock option to the extent of such excess.
  The  vesting  of all of the  options  granted  to  Mr.  Danzell  accelerate  if,
  following a Change in Control (as defined in the agreement),  Nestor  terminates
  Mr. Danzell's employment without Cause or Mr. Danzell resigns for Good Reason.
  
         EMPLOYMENT AGREEMENT WITH NIGEL P. HEBBORN
  
         On October 13, 2004,  Nestor,  Inc. entered into an employment  agreement
  with Nigel P. Hebborn. Mr. Hebborn is Nestor's Chief Operating Officer.
  
         The  employment  agreement  provides that Mr. Hebborn will be paid a base
  salary of not less than $200,000 per year and annual  performance-based  bonuses
  to be determined by Nestor's Compensation Committee.
  
         The term of the  employment  agreement  is through  December 31, 2007 and
  automatically  renews for an additional two year period unless Nestor elects not
  to renew the  agreement.  The  employment  agreement may be terminated by either
  party on 30 days' notice. If Nestor terminates Mr. Hebborn's  employment without
  Cause or Mr. Hebborn resigns for Good Reason (each as defined in the agreement),
  then,  subject to certain  conditions,  Nestor is obligated  to pay Mr.  Hebborn
  severance  equal to his base salary and bonus  (based then  current year to date
  performance)for  twelve months  following  such  termination  and certain of his
  options (described below) vest immediately.
  <PAGE>
  
         Pursuant  to the  employment  agreement,  on  October  13,  2004,  Nestor
  granted,  under the terms of its 2004  Stock  Incentive  Plan,  two  options  to
  purchase 300,000 shares of Nestor common stock, $.01 par value per share, to Mr.
  Hebborn at an option exercise price of $4.95 per share. The first option becomes
  exercisable for 60,000 of the shares subject to the option on December 31, 2004,
  for  120,000  such shares on  December  31, 2005 and for 120,000  such shares on
  December 31, 2006 and expires on October 13,  2012.  The second  option  becomes
  exercisable on the earlier of (a) October 13, 2012 or (b) with respect to 60,000
  shares, the first date on which Share Price (as defined in the agreement) equals
  or exceeds  117.5% of Share Price on October 13,  2004,  with respect to 120,000
  shares, the first date on which Share Price equals or exceeds 138.0625% of Share
  Price on October 13, 2004 and with respect to 120,000 shares,  the first date on
  which Share Price equals or exceeds  162.2234375%  of Share Price on October 13,
  2004 and expires on October 12, 2014. The options are incentive  stock option to
  the extent permitted under the Internal  Revenue Code of 1986, as amended,  with
  any  amount in excess of  permitted  levels  under the Code to be  treated  as a
  non-statutory  stock option to the extent of such excess.  The vesting of all of
  the options granted to Mr. Hebborn  accelerate if, following a Change in Control
  (as  defined in the  agreement),  Nestor  terminates  Mr.  Hebborn's  employment
  without Cause or Mr. Hebborn resigns for Good Reason.
  
  
  ITEM   9.01   FINANCIAL STATEMENTS AND EXHIBITS.
  
                (c) Exhibits
  
                    See Exhibit Index attached to this Current Report on Form 8-K
  
  
  
  
  
                                     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.
  
  
                                         NESTOR, INC.
                                         (Registrant)
  
  
  
                                         By: /s/ Claire M. Iacobucci
                                            --------------------------------------
                                            Claire M. Iacobucci
                                            Treasurer and Chief Financial Officer
  
  
  Dated:     October 18, 2004
  
  
  
  <PAGE>
  
  
  
  
                                    EXHIBIT INDEX
                                    -------------
  
  
         Exhibit Number                 Description
         --------------                 -----------
             10.1                   Employment Agreement between Nestor, Inc. and
                                    William B. Danzell dated October 13, 2004
  
  
             10.2                   Employment Agreement between Nestor, Inc. and
                                    Nigel P. Hebborn dated October 13, 2004
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text: 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
  
                                   October 13, 2004
  --------------------------------------------------------------------------------
                  Date of Report (Date of earliest event reported)
  
                                    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)               (IRS employer identification number)
  
                          400 MASSASOIT AVENUE, SUITE 200
                        EAST PROVIDENCE, RHODE ISLAND 02914
  --------------------------------------------------------------------------------
                      (Address of principal executive offices)
  
                                   (401) 434-5522
  --------------------------------------------------------------------------------
                (Registrant's telephone number, including area code)
  
                                   Not Applicable
  --------------------------------------------------------------------------------
                (Former name or former address if changed since last report)
  
  Check  the  appropriate  box  below  if the  Form  8-K  filing  is  intended  to
  simultaneously  satisfy the filing obligation of the registrant under any of the
  following provisions (see General Instruction A.2. below):
  
    [ ]    Written  communications  pursuant to Rule 425 under the Securities Act
           (17 CFR 230.425)
  
    [ ]    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
           CFR 240.14a-12)
  
    [ ]    Pre-commencement  communications  pursuant to Rule 14d-2(b)  under the
           Exchange Act (17 CFR 240.14d-2(b))
  
    [ ]    Pre-commencement  communications  pursuant to Rule 13e-4(c)  under the
           Exchange Act (17 CFR 240.13e-4(c))
  ITEM   1.01.   ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
  
         EMPLOYMENT AGREEMENT WITH WILLIAM B. DANZELL
  
         On October 13, 2004, Nestor,  Inc. entered into an employment  agreements
  with William B. Danzell.  Mr. Danzell is the Chairman of the Board of Nestor and
  its  President and Chief  Executive  Officer.  Mr.  Danzell is also the Managing
  Director of Silver Star Partners I, LLC, which  beneficially owns  approximately
  53% of the issued and outstanding common stock of Nestor.
  
         The  employment  agreement  provides that Mr. Danzell will be paid a base
  salary of not less than $250,000 per year and annual  performance-based  bonuses
  to be determined by Nestor's  Compensation  Committee.  Mr. Danzell will also be
  paid  $75,000 for  services  performed  without  compensation  when he was first
  elected chief executive officer and president.
  
         The term of the  employment  agreement  is through  December 31, 2007 and
  automatically  renews for an additional two year period unless Nestor elects not
  to renew the  agreement.  The  employment  agreement may be terminated by either
  party on 30 days' notice. If Nestor terminates Mr. Danzell's  employment without
  Cause or Mr. Danzell resigns for Good Reason (each as defined in the agreement),
  then,  subject to certain  conditions,  Nestor is obligated  to pay Mr.  Danzell
  severance  equal to his base salary and bonus  (based then  current year to date
  performance)for  the remainder of the employment term and certain of his options
  (described below) vest immediately.
  
         Pursuant  to the  employment  agreement,  on  October  13,  2004,  Nestor
  granted,  under the terms of its 2004  Stock  Incentive  Plan,  two  options  to
  purchase 500,000 shares of Nestor common stock, $.01 par value per share, to Mr.
  Danzell at an option exercise price of $4.95 per share. The first option becomes
  exercisable  for  100,000 of the shares  subject to the option on  December  31,
  2004,  for 200,000  such shares on December 31, 2005 and for 200,000 such shares
  on December 31, 2006 and expires on October 13, 2012.  The second option becomes
  exercisable  on the  earlier  of (a)  October  13,  2012 or (b) with  respect to
  100,000  shares,  the  first  date on  which  Share  Price  (as  defined  in the
  agreement)  equals or exceeds  117.5% of Share Price on October 13,  2004,  with
  respect to 200,000 shares, the first date on which Share Price equals or exceeds
  138.0625% of Share Price on October 13, 2004 and with respect to 200,000 shares,
  the first date on which  Share  Price  equals or exceeds  162.2234375%  of Share
  Price on October  13,  2004 and  expires on October  12,  2014.  The options are
  incentive stock option to the extent  permitted under the Internal  Revenue Code
  of 1986,  as amended,  with any amount in excess of  permitted  levels under the
  Code to be treated as a non-statutory stock option to the extent of such excess.
  The  vesting  of all of the  options  granted  to  Mr.  Danzell  accelerate  if,
  following a Change in Control (as defined in the agreement),  Nestor  terminates
  Mr. Danzell's employment without Cause or Mr. Danzell resigns for Good Reason.
  
         EMPLOYMENT AGREEMENT WITH NIGEL P. HEBBORN
  
         On October 13, 2004,  Nestor,  Inc. entered into an employment  agreement
  with Nigel P. Hebborn. Mr. Hebborn is Nestor's Chief Operating Officer.
  
         The  employment  agreement  provides that Mr. Hebborn will be paid a base
  salary of not less than $200,000 per year and annual  performance-based  bonuses
  to be determined by Nestor's Compensation Committee.
  
         The term of the  employment  agreement  is through  December 31, 2007 and
  automatically  renews for an additional two year period unless Nestor elects not
  to renew the  agreement.  The  employment  agreement may be terminated by either
  party on 30 days' notice. If Nestor terminates Mr. Hebborn's  employment without
  Cause or Mr. Hebborn resigns for Good Reason (each as defined in the agreement),
  then,  subject to certain  conditions,  Nestor is obligated  to pay Mr.  Hebborn
  severance  equal to his base salary and bonus  (based then  current year to date
  performance)for  twelve months  following  such  termination  and certain of his
  options (described below) vest immediately.
  Pursuant  to the  employment  agreement,  on  October  13,  2004,  Nestor
  granted,  under the terms of its 2004  Stock  Incentive  Plan,  two  options  to
  purchase 300,000 shares of Nestor common stock, $.01 par value per share, to Mr.
  Hebborn at an option exercise price of $4.95 per share. The first option becomes
  exercisable for 60,000 of the shares subject to the option on December 31, 2004,
  for  120,000  such shares on  December  31, 2005 and for 120,000  such shares on
  December 31, 2006 and expires on October 13,  2012.  The second  option  becomes
  exercisable on the earlier of (a) October 13, 2012 or (b) with respect to 60,000
  shares, the first date on which Share Price (as defined in the agreement) equals
  or exceeds  117.5% of Share Price on October 13,  2004,  with respect to 120,000
  shares, the first date on which Share Price equals or exceeds 138.0625% of Share
  Price on October 13, 2004 and with respect to 120,000 shares,  the first date on
  which Share Price equals or exceeds  162.2234375%  of Share Price on October 13,
  2004 and expires on October 12, 2014. The options are incentive  stock option to
  the extent permitted under the Internal  Revenue Code of 1986, as amended,  with
  any  amount in excess of  permitted  levels  under the Code to be  treated  as a
  non-statutory  stock option to the extent of such excess.  The vesting of all of
  the options granted to Mr. Hebborn  accelerate if, following a Change in Control
  (as  defined in the  agreement),  Nestor  terminates  Mr.  Hebborn's  employment
  without Cause or Mr. Hebborn resigns for Good Reason.
  
  ITEM   9.01   FINANCIAL STATEMENTS AND EXHIBITS.
  
                (c) Exhibits
  
                    See Exhibit Index attached to this Current Report on Form 8-K
  
                                     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.
  
                                         NESTOR, INC.
                                         (Registrant)
  
                                         By: /s/ Claire M. Iacobucci
                                            --------------------------------------
                                            Claire M. Iacobucci
                                            Treasurer and Chief Financial Officer
  
  Dated:     October 18, 2004
  EXHIBIT INDEX
                                    -------------
  
         Exhibit Number                 Description
         --------------                 -----------
             10.1                   Employment Agreement between Nestor, Inc. and
                                    William B. Danzell dated October 13, 2004
  
             10.2                   Employment Agreement between Nestor, Inc. and
                                    Nigel P. Hebborn dated October 13, 2004