Participants’ accounts:  Each participant’s account is credited with the participant’s contribution and allocations of the Company’s contribution and Plan earnings and losses, and it is charged with an allocation of administrative expenses.  Allocations are based on participant earnings or account balances, as defined in the Plan’s provisions.  The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.  Non-participant directed investments are invested in a mutual fund.

Vesting:  Participants are immediately vested in their voluntary contributions, including rollover contributions from other qualified plans, plus actual earnings thereon.  The remainder of their accounts are vested according to the number of years of continuous service.  Participants’ accounts become fully vested after five years of credited service and vest at the rate of 20% per year, commencing after one year of service.  U.S.-based employees hired as a result of an acquisition by the Company or its subsidiaries are generally entitled to an appropriate service credit for the length of employment with their former company for purposes of determining eligibility, vesting and contribution allocations for the Plan.

Payment of benefits:  Distributions of a participant’s vested account balance are made as soon as administratively possible following his or her retirement, total disability, death or termination of employment.  The amount of distribution under the Plan is equal to the participant’s vested account balance.  If the participant has any loan balance at the time of distributions, the amount of cash available to the participant or beneficiary is reduced by the outstanding balance of the loan.

Investment fund information:  Participants may individually direct employee contributions in various mutual funds, common collective trusts, money market accounts and Daktronics, Inc. common stock. Participants may change their investment options daily.

Participant notes receivable:  Participants may borrow from their accounts up to the lesser of $50,000 or 50% of their vested account balance.  Loan transactions are treated as a transfer to (from) the investment funds from (to) the participant notes fund.  Loan terms range from one to five years, or longer for the purchase of a primary residence.  The loans are secured by the balance in the participant’s account and bear a commercially reasonable rate of interest, which the Company has determined to be the prime rate as determined by the Plan’s Trustee. Changes in the prime rate are implemented by the Trustee when it is reasonably administratively feasible to do so. Principal and interest are paid ratably no less than b iweekly through payroll deductions.

Excess contributions refundable:  At April 30, 2010 and April 30, 2009, payables of $81,999 and $78,210, respectively, were recorded for amounts refundable by the Plan to participants for contributions made in excess of amounts allowed by the Internal Revenue Service (“IRS”).

Forfeited accounts:  During the years ended April 30, 2010 and April 30, 2009, respectively, forfeitures of the non-vested accounts of terminated participants of $54,635 and $44,817 were used to reduce employer contributions.

Administrative expenses:  Administrative expenses, consisting of investment management services fees and audit fees, are paid by the Plan using forfeitures of the Company’s contributions, and any remaining balance is netted against investment returns.

 

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Note 3.  INVESTMENTS

During the years ended April 30, 2010 and April 30, 2009, the Plan’s investments (including investments purchased, sold and held during the year) appreciated (depreciated) in fair value as determined by quoted market prices as follows:

 

	Year Ended
	April 30,			April 30,
	2010			2009
Daktronics, Inc. common stock	$	(1,287,404	)	$	(11,761,870	)
Mutual Funds		7,497,791			(9,191,531	)
Common Collective Trust		73,021			96,331
	$	6,283,408		$	(20,857,070	)

Investments that represent 5% or more of the fair value of the Plan’s net assets as of April 30, 2010 and 2009 are as follows:

 

	Year Ended
	April 30,			April 30,
	2010			2009
Investments, at fair value:
Daktronics, Inc. common stock	$	16,538,919		$	18,430,698
Euro Pacific Growth Fund		6,008,411			4,101,847
Investment Company of America Fund		5,344,270			3,870,787
Growth Fund of America Fund		5,161,259			3,681,210
Wells Fargo Stable Return Fund N4		2,586,977			2,897,358
MFS Total Return Fund		3,200,773			2,409,538
T Rowe Price Mid-Cap Growth Fund		3,476,484			1,960,745
T Rowe Price Small Capitalized Fund		3,450,639			1,794,534

The following represents holdings and transactions in Daktronics, Inc. common stock, a party-in-interest:

 

	Year Ended
	April 30,			April 30,
	2010			2009
Investments, at fair value:
Daktronics, Inc. common stock	$	16,538,919		$	18,430,698

 

	Year Ended
	April 30,			April 30,
	2010			2009
Changes in Daktronics common stock due to:
Contributions	$	960,771		$	4,996,698
Dividends		193,591			164,457
Net realized and unrealized depreciation in fair value		(1,287,404	)		(11,761,870	)
Distributions to participants		(1,758,737	)		(2,006,852	)
	$	(1,891,779	)	$	(8,607,567	)

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Note 4.  FAIR VALUE MEASUREMENT

ASC 820, as described previously, defines fair value as the price that would be received to sell an asset or paid to transfer the liability (an exit price) in an orderly transaction between market participants.  It also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  The fair value hierarchy within ASC 820 distinguishes between three levels of inputs that may be utilized when measuring fair value, consisting of level 1 inputs (using quoted prices in active markets for identical assets or liabilities), level 2 inputs (using inputs other than level 1 prices, such as quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability) and le vel 3 inputs (unobservable inputs supported by little or no market activity based on our own assumptions used to measure assets and liabilities).  A financial asset’s or liability’s classification within this hierarchy is determined based on the lowest level input that is significant to the fair value measurement.   The following table presents the Plan’s assets valued at fair value as of April 30, 2010 by level within the fair value hierarchy:

		Level 1				Level 2				Level 3				Total
Daktronics, Inc Common Stock		$	16,538,919			$	-			$	-			$	16,538,919
Common Collective Trust			-				2,586,977				-				2,586,977
Mutual Funds			31,900,143				-				-				31,900,143
Money Market Mutual Fund			1,513,633				-				-				1,513,633
TOTAL		$	49,952,695			$	2,586,977			$	-			$	52,539,672

Note 5.  PLAN TERMINATION

Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue contributions at any time and to terminate the Plan subject to the provisions of ERISA.  If the Plan is terminated, participants will become 100 percent vested in their accounts.

Note 6.  TAX STATUS

The underlying non-standardized prototype plan has received an opinion letter from the IRS dated August 31, 2001 stating that the form of the plan is qualified under Section 401 of the Code, and, therefore, the related trust is tax exempt.  In accordance with Revenue Procedure 2009-6 and Revenue Procedure 2005-16, the Plan Sponsor has determined that it is eligible to and has chosen to rely on the current IRS prototype plan opinion letter. The Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan is qualified and the related trust is tax exempt.

Note 7.  SUBSEQUENT EVENTS

On June 3, 2010, the Board of Directors of Daktronics, Inc. declared payment of a dividend of $0.10 per share payable on June 25, 2010 to holders of record of its common stock on June 14, 2010.

On September 17, 2010, the Board of Directors of Daktronics, Inc. declared payment of a special cash dividend of $0.50 per share of common stock.  The annual cash dividend will be payable on October 14, 2010 to shareholders of record as of the close of business on September 30, 2010.

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DAKTRONICS, INC. 401(k) PLAN

EIN-46-0306862 PLAN 002

SCHEDULE H, LINE 4i

SCHEDULE OF ASSETS (HELD AT END OF YEAR)

APRIL 30, 2010

Identity of Issue, Borrower
Lessor, or Similar Party				Shares		Cost			Current Value
Common Stock:				1,975,976		$	17,353,283		$	16,538,919
	Daktronics, Inc. common stock*
Common collective trust:
	Wells Fargo Stable Return Fund*			56,712			2,432,938			2,548,746
Mutual Funds:
	Pimco Total Return Fund			203,086			2,146,897			2,260,352
	Euro Pacific Growth Fund			157,908			6,127,055			6,008,411
	Growth Fund America Fund			180,086			5,076,831			5,161,259
	Investment Company of America Fund			198,377			6,843,427			5,344,270
	Perkins Mid-Cap Value Fund			103,828			1,918,956			2,228,151
	MFS Total Return Fund			234,833			3,285,795			3,200,773
	T Rowe price Mid-Cap Growth Fund			64,860			3,122,255			3,476,484
	T Rowe Price Small Capitalization Fund			111,060			3,091,230			3,450,639
	Wells Fargo Index Fund*			17,709			723,924			769,804
						$	32,336,370		$	31,900,143
Money market mutual fund:
	Wells Fargo Short-term Money Market Fund*						1,513,633			1,513,633
Participant notes receivable (with interest rates
		ranging from 4.25% to 10.5%, maturing
		through November, 2013)					1,042,910			1,042,910
						$	54,679,134		$	53,544,351
		*Indicates a party-in-interest to the Plan.

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 SIGNATURES

Pursuant to the requirements of the Securities Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized.

	DAKTRONICS, INC. 401(k) PLAN
	By:    /s/ William R. Retterath
		William R. Retterath
		Chief Financial Officer (Principal Accounting and Principal Financial Officer of Daktronics, Inc.)
Date:  October 25, 2010

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