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) March 28, 2005

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

           Delaware                       0-19771                 22-2786081
--------------------------------------------------------------------------------
(State or Other Jurisdiction     (Commission file Numbers)     (IRS Employer
      of Incorporation)                                     Identification Nos.)

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

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

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:

[_]   Written communications pursuant to Rule 425 under the Securities Act
      (17 CFR 230.425)

[_]   Soliciting  material  pursuant to Rule 14a-2 under the  Exchange Act
      (17 CFR 240.14a-2)

[_]   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>

Section 8 - Other Events

Item 8.01  Other Events.

      On March 28, 2005,  the  Registrant  announced that it had entered into an
agreement in principle for the sale of its dsIT Technologies Ltd.  subsidiary to
Matrix IT Ltd.  The  Registrant's  press  release  announcing  the  agreement in
principle is attached as Exhibit 99.1 hereto.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(c)   Exhibits

      99.1 Press  Release  dated  March 28,  2005  regarding  the  agreement  in
principle for the sale of dsIT Technologies Ltd.

<PAGE>

                                   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 on this 28th day of March 2005.


                               DATA SYSTEMS & SOFTWARE INC.

                               By: /s/ Yacov Kaufman
                                   ---------------------------------------------
                               Name: Yacov Kaufman
                               Title: Vice-President and Chief Financial Officer
{"company-data": {"conformed-name": "DATA SYSTEMS & SOFTWARE INC", "cik": "0000880984", "assigned-sic": "7371", "irs-number": "222786081", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-19771", "film-number": "05706422"}, "business-address": {"street1": "200 RTE 17", "city": "MAHWAH", "state": "NJ", "zip": "07430", "phone": "2015292026"}, "mail-address": {"street1": "200 ROUTE 17", "city": "MAHWAH", "state": "NJ", "zip": "07430"}, "former-company": {"former-conformed-name": "DEFENSE SOFTWARE & SYSTEMS INC", "date-changed": "19930328"}}
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) March 28, 2005

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

           Delaware                       0-19771                 22-2786081
--------------------------------------------------------------------------------
(State or Other Jurisdiction     (Commission file Numbers)     (IRS Employer
      of Incorporation)                                     Identification Nos.)

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

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

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:

[_]   Written communications pursuant to Rule 425 under the Securities Act
      (17 CFR 230.425)

[_]   Soliciting  material  pursuant to Rule 14a-2 under the  Exchange Act
      (17 CFR 240.14a-2)

[_]   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))
Section 8 - Other Events

Item 8.01  Other Events.

      On March 28, 2005,  the  Registrant  announced that it had entered into an
agreement in principle for the sale of its dsIT Technologies Ltd.  subsidiary to
Matrix IT Ltd.  The  Registrant's  press  release  announcing  the  agreement in
principle is attached as Exhibit 99.1 hereto.

Section 9 - Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

(c)   Exhibits

      99.1 Press  Release  dated  March 28,  2005  regarding  the  agreement  in
principle for the sale of dsIT Technologies Ltd.
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 on this 28th day of March 2005.

                               DATA SYSTEMS & SOFTWARE INC.

                               By: /s/ Yacov Kaufman
                                   ---------------------------------------------
                               Name: Yacov Kaufman
                               Title: Vice-President and Chief Financial Officer