The drop is a classic sell-on-the-news. The "news" has been out for weeks. Just look at the chart. The public at large is the last to know. Once they get the word, what better time to sell? That game has been going on since the beginning of (stock market) time.
I think that DGLY is pulling back because people delayed their profit taking until this year to move the capital gains tax into 2008. I've been adding more shares today. I think DGLY has a good chance at a triple this year. Look at the DGLY iBox for more DD and my investment thesis. Here is a link: