DYNTEK INC
WARRANT
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<FILENAME>e19740ex10-4.txt
<DESCRIPTION>WARRANT
<TEXT>
                                                                    Exhibit 10.4

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THIS SECURITY AND THE  SECURITIES  ISSUABLE  UPON EXERCISE  HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT
(i)  PURSUANT  TO A  REGISTRATION  STATEMENT  UNDER  THE ACT  WHICH  HAS  BECOME
EFFECTIVE AND IS CURRENT WITH RESPECT TO THE  SECURITIES,  OR (ii) PURSUANT TO A
SPECIFIC  EXEMPTION  FROM  REGISTRATION  UNDER THE ACT BUT ONLY UPON THE  HOLDER
HEREOF FIRST HAVING  OBTAINED THE WRITTEN  OPINION OF COUNSEL OR OTHER  EVIDENCE
REASONABLY  SATISFACTORY  TO THE  COMPANY,  THAT  THE  PROPOSED  DISPOSITION  IS
CONSISTENT WITH ALL APPLICABLE  PROVISIONS OF THE ACT AS WELL AS ANY APPLICABLE,
"BLUE SKY" OR SIMILAR SECURITIES LAW.
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                                                             October 15, 2004

                                     WARRANT

                                  DYNTEK, INC.

      For good and valuable  consideration  the receipt and sufficiency of which
is hereby  acknowledged  by  DynTek,  Inc.,  a  Delaware  corporation,  with its
principal  office at 18881 Von Karman Ave.,  Irvine,  CA 92612 (the  "Company"),
Duncan  Capital LLC (the  "Holder"),  of 830 Third  Avenue,  New York, NY 10022,
subject to the terms and conditions of this Warrant, is hereby granted the right
to purchase,  at the initial  exercise price (the "Initial  Exercise  Price") of
$0.7475  per share of common  stock,  $0.0001  par value,  of the  Company  (the
"Common Stock"),  at any one or more times after the date hereof until 5:00 p.m.
on October 15,  2009,  in the  aggregate,  692,308  shares of Common  Stock (the
"Shares") subject to adjustment as provided in Section 5 hereof.

      This  Warrant  initially  is  exercisable  at the Initial  Exercise  Price
payable in cash  (except as provided  below),  by wire  transfer of  immediately
available funds or other form of payment satisfactory to the Company, subject to
adjustment as provided in Section 5 hereof.

      1. Exercise of Warrant.  The purchase  rights  represented by this Warrant
are exercisable at the option of the Holder hereof,  in whole or in part, at one
or more times  during any period in which this  Warrant may be  exercised as set
forth  above.  The Holder  shall not be deemed to have  exercised  its  purchase
rights  hereunder  until the Company  receives  written  notice of the  Holder's
intent to exercise its purchase rights hereunder. The written notice shall be in
the form of the Subscription  Form attached hereto and made a part hereof.  Less
than  all of the  Shares  may be  purchased  under  this  Warrant.  In  lieu  of
exercising this Warrant by the payment of cash, the Holder may elect to receive,
without the payment by the Holder of any additional consideration,  shares equal
to the  value  of this  Warrant  (or the  portion  thereof  being  canceled)  by
surrender of this Warrant at the principal  office of the Company  together with
notice of such  election,  in which event the Company  shall issue to the holder
hereof a number of shares of Common Stock computed using the following  formula:

<PAGE>

                                   Y (A - B)
                                   ---------
                               X =     A

Where

           X --   The  number  of  shares  of  Common  Stock to be issued to the
                  Holder pursuant to this net exercise;

           Y --   The  number of shares of Common  Stock in respect of which the
                  exercise election is made;

           A --   The Market Price of one share of the Company's Common Stock at
                  the time the exercise election is made;

           B --   The Exercise Price (as adjusted to the date of net exercise).

      In addition to issuing to the Holder the number of shares  represented  by
"X" in the forgoing  formula  pursuant to such exercise,  the Company shall also
reduce  the  number of Shares  covered  by this  Warrant by the number of shares
represented by "Y" in the foregoing formula.

      As used  herein,  the term  "Market  Price"  shall mean the average of the
closing price of the Company's Common Stock on any national securities exchange,
on the  Nasdaq  National  Market  or the  Nasdaq  SmallCap  Market,  or,  if the
Company's Common Stock is not so listed on any national securities exchange,  on
the Nasdaq National Market or the Nasdaq SmallCap  Market,  then on the domestic
over-the-counter   market  as  reported  by  the  National   Quotation   Bureau,
Incorporated,  or any similar successor  organization,  for the ten (10) trading
days prior to the date the Holder exercises this Warrant.

      2.  Issuance  of  Certificates.  Upon the  exercise of this  Warrant,  the
issuance  of  certificates  for Shares  underlying  this  Warrant  shall be made
forthwith  (and in any event within three days) after the  Company's  receipt of
(i) written notice  hereunder as specified in Section 1 above) and/or (ii) funds
in respect of the Purchase Price (as defined in Section 4(b) hereof) pursuant to
Section 4 hereof  for the shares so  exercised  and such  certificates  shall be
issued in the name of the Holder hereof.

      3.  Restriction  on  Transfer;  Investment  Representations;  Registration
Rights.

            (a) Restriction on Transfer.  The Holder  acknowledges  that neither
this Warrant nor any Shares  issuable upon exercise  hereof have been registered
under the  Securities  Act of 1933,  as amended (the "Act"),  and neither may be
sold or transferred in whole or in part unless the Holder shall have first given
prior  written  notice  to the  Company  describing  such sale or  transfer  and
furnished to the Company an opinion of counsel  reasonably  satisfactory  to the
Company,  to the effect that the  proposed  sale or transfer may be made without
registration  under the Act;  provided,  however,  that the foregoing  shall not
apply if there  is in  effect a  registration  statement  with  respect  to this
Warrant or the Shares issuable upon exercise hereof,  as the case may be, at the
time of the  proposed  sale or  transfer.  If that is not the  case,  then  upon
exercise,  in part  or in


                                       2
<PAGE>

whole,  of  this  Warrant,  each  certificate  issued  representing  the  Shares
underlying this Warrant shall bear a legend to the foregoing effect.

            (b) Investment  Representations.  The Holder represents that: (i) it
is an accredited investor within the meaning of Regulation D under the Act; (ii)
it is acquiring this Warrant and upon exercise hereof,  the Shares,  for its own
account  for  investment  only,  and not with a view  towards,  or for resale in
connection with, their distribution;  (iii) it has had an opportunity to discuss
the  Company's  business  and  affairs  with  management  of the  Company and is
satisfied with the results thereof;  (iv) it has also had the opportunity to ask
questions of and receive answers from, the Company and its management  regarding
the terms and  conditions of its  investment;  and (v) it has received a copy of
the Company's  Annual Report on Form 10-K relating to fiscal year ended June 30,
2004.

            (c)  Registration  Rights.  The  Holder  shall  have such  rights to
request the Company to register all or any of the Shares  issuable upon exercise
of this Warrant as set forth in the  Registration  Rights  Agreement,  dated the
date hereof,  by and among the  Company,  Holder and other  purchasers  named in
Schedule 1 thereto.

      4. Price.

            (a) Initial and Adjusted  Purchase Price. The initial Purchase Price
shall be equal to the Initial Exercise Price. The adjusted  Purchase Price shall
be the price that shall result from time to time from any and all adjustments of
the  initial  purchase  price in  accordance  with the  provisions  of Section 5
hereof.

            (b) Purchase Price.  The term "Purchase Price" herein shall mean the
initial Purchase Price or the adjusted Purchase Price, as the case may be.

      5. Adjustments of Purchase Price and Number of Shares.  The Shares subject
to this Warrant and the Purchase Price thereof shall be  appropriately  adjusted
by the Company in accordance herewith.

            (a)  Adjustment  to  Purchase  Price and Number of Shares.  In case,
prior to the expiration of this Warrant by exercise or by its terms, the Company
shall issue any shares of its Common Stock as a stock  dividend or subdivide the
number  of  outstanding  shares of its  Common  Stock  into a greater  number of
shares,  then in either of such cases,  the then  applicable  purchase price per
share of the shares of Common  Stock  purchasable  pursuant  to this  Warrant in
effect  at the time of such  action  shall be  proportionately  reduced  and the
number of shares at that time  purchasable  pursuant  to this  Warrant  shall be
proportionately  increased;  and  conversely,  in the  event the  Company  shall
contract the number of  outstanding  shares of Common  Stock by  combining  such
shares into a smaller number of shares,  then, in such case, the then applicable
purchase price per share of the shares of Common Stock  purchasable  pursuant to
this  Warrant  in effect  at the time of such  action  shall be  proportionately
increased and the number or shares of Common Stock purchasable  pursuant to this
Warrant shall be  proportionately  decreased.  If the Company shall, at any time
during  the term of this  Warrant,  declare a  dividend  payable  in cash on its
Common  Stock  and  shall,  at  substantially   the  same  time,  offer  to  its
stockholders  a right to  purchase  new Common  Stock from the  proceeds of such
dividend or for an amount substantially


                                       3
<PAGE>

equal to the dividend, all Common Stock so issued shall, for the purpose of this
Warrant, be deemed to have been issued as a stock dividend. Any dividend paid or
distributed  upon the Common Stock shall be treated as a dividend paid in Common
Stock to the extent that shares of Common  Stock are  issuable  upon  conversion
thereof.

            (b) Purchase Price Reset  Provision.  In the event that prior to the
expiration of this Warrant the Company sells publicly or privately (i) shares of
its Common Stock,  (ii) securities  convertible into shares of its Common Stock,
or  (iii)  options  or  warrants  to  purchase  shares  of its  Common  Stock or
securities  convertible into shares of its Common Stock at a sale, conversion or
exercise price per share (the "Issue Price"),  as the case may be, less than the
Purchase  Price then in effect,  the Purchase  Price shall be reset to the Issue
Price and the number of shares  purchasable  pursuant to this  Warrant  shall be
increased pro rata to the percentage reduction in the Purchase Price,  provided,
however,  that the reset provision shall not apply to (x) any shares issued upon
exercise  or  conversion  of any  currently  outstanding  options,  warrants  or
convertible  securities,  or (y) any Common Stock  options or warrants  issuable
pursuant  to  an  existing   employee   stock  option  plan  or  other  existing
compensation  arrangement or any underlying  Common Stock issued on the exercise
thereof,  but not pursuant to any amendment  relating thereto to the extent such
amendment   increases  the  number  of  shares   issuable  under  such  plan  or
arrangement.  The Issue Price shall be calculated taking into account the amount
paid for the  issuance of such Common  Stock,  option or warrant or  convertible
security  and the  amount,  if any,  payable  upon the  exercise  or  conversion
thereof.  Notwithstanding  the  foregoing,  no  adjustment  shall be made to the
exercise  price of the  Warrants to the extent such  adjustment  would cause the
number of shares  purchasable  pursuant to this Warrant,  when  aggregated  with
other  issuances  of  securities  of the Company  required to be  aggregated  in
accordance with the Nasdaq Marketplace Rules and interpretations  thereunder, to
exceed  nineteen  and  nine-tenths  percent  (19.9%) of the Common  Stock of the
Company outstanding on the date hereof or the date of the initial issuance under
a prior  offering,  if such prior offering would be aggregated  pursuant to such
Rules and interpretations with the shares purchasable pursuant to this Warrant.

            (c)  Recapitalization.  In  case,  prior to the  expiration  of this
Warrant by  exercise  or by its terms,  the Company  shall be  recapitalized  by
reclassifying its outstanding Common Stock, (other than a change in par value to
no par value),  or the Company or a successor  corporation  shall consolidate or
merge  with  or  convey  all or  substantially  all  of its or of any  successor
corporation's  property and assets to any other corporation or corporations (any
such other corporations being included within the meaning of the term "successor
corporation"  hereinbefore  used in the event of any  consolidation or merger of
any such other  corporation with, or the sale of all or substantially all of the
property of any such other corporation to, another corporation or corporations),
then,  as  a  condition  of  such  recapitalization,  consolidation,  merger  or
conveyance,  lawful and adequate  provision  shall be made whereby the Holder of
this Warrant shall thereafter have the right to purchase,  upon the basis and on
the terms and  conditions  specified in this  Warrant,  in lieu of the shares of
Common Stock of the Company  theretofore  purchasable  upon the exercise of this
Warrant, such shares of stock,  securities or assets of the other corporation as
to which the Holder of this  Warrant  would have been  entitled had this Warrant
been exercised immediately prior to such recapitalization, consolidation, merger
or  conveyance;  and in any such event,  the rights of the Warrant Holder to any
adjustment in the number of shares of Common Stock purchasable upon the exercise
of this Warrant,  as hereinbefore  provided,  shall continue and be preserved in
respect of any stock which the Holder becomes entitled to purchase.


                                       4
<PAGE>

            (d) Dissolution.  In case the Company at any time while this Warrant
shall remain unexpired and unexercised  shall sell all or  substantially  all of
its property or dissolve,  liquidate  or wind up its affairs,  lawful  provision
shall be made as part of the terms of any such sale, dissolution, liquidation or
winding  up, so that the Holder of this  Warrant  may  thereafter  receive  upon
exercise  hereof in lieu of each share of Common  Stock of the Company  which it
would have been entitled to receive,  the same kind and amount of any securities
or assets as may be  issuable ,  distributable  or  payable  upon any such sale,
dissolution,  liquidation  or  winding  up with  respect to each share of Common
Stock of the Company; provided, however, that in any case of any such sale or of
dissolution, liquidation or winding up, the right to exercise this Warrant shall
terminate on a date fixed by the Company. Such date so fixed shall be no earlier
than 3 P.M. New York City Time, on the thirtieth  (30th) day next succeeding the
date on which notice of such  termination  of the right to exercise this Warrant
has been given by mail to the  registered  Holder of this Warrant at its address
as it appears on the books of the Company.

            (e) No Fractional  Shares.  Upon any exercise of this Warrant by the
Holder, the Company shall not be required to deliver fractions of one share, but
adjustment in the purchase  price payable by the Holder shall be made in respect
of any such  fraction of one share on the basis of the purchase  price per share
then applicable upon exercise of this Warrant.

            (f)  Notices.  In the event that,  prior to the  expiration  of this
Warrant by  exercise  or by its terms,  the Company  shall  determine  to take a
record of its stockholders for the purpose of determining  stockholders entitled
to receive any dividend, stock dividend,  distribution or other right whether or
not it may cause any change or adjustment in the number, amount, price or nature
of the  securities  or assets  deliverable  upon the  exercise  of this  Warrant
pursuant to the foregoing provisions,  the Company shall give at least ten days'
prior  written  notice to the effect  that it intends to take such record to the
registered  Holder of this  Warrant at its address as it appears on the books of
the  Company,  said  notice to specify the date as of which such record is to be
taken,  the purpose for which such record is to be taken,  and the effect  which
the action which may be taken will have upon this Warrant.

            (g) Registered  Owner. The Company may deem and treat the registered
Holder of the Warrant at any time as the absolute owner hereof for all purposes,
and shall not be affected by any notice to the contrary.

            (h) Status. This Warrant shall not entitle any Holder thereof to any
of the rights of a stockholder,  and shall not entitle any Holder thereof to any
dividend  declared upon the Common Stock unless the Holder shall have  exercised
the within  Warrant and purchased the shares of Common Stock prior to the record
date fixed by the Board of Directors for the  determination of holders of Common
Stock entitled to exercise any such rights or receive said dividend.

      6.  Replacement  of  Warrant.  Upon  receipt by the  Company  of  evidence
reasonably  satisfactory to it of the loss, theft,  destruction or mutilation of
this Warrant,  and, in case of such loss, theft,  destruction or mutilation,  of
indemnity or security reasonably satisfactory to it in its sole discretion,  and
reimbursement to the Company of all expenses incidental or relating thereto, and
upon  surrender  and  cancellation  of this  Warrant  (unless  lost,  stolen  or
destroyed),  the Company  will make and deliver a new Warrant of like tenor,  in
lieu of this Warrant.


                                       5
<PAGE>

      7. Notices to Warrant Holder.  Except as set forth in Section 5(f) hereto,
nothing  contained in this Warrant  shall be  construed as  conferring  upon the
Holder  hereof  the  right  to vote or to  consent  or to  receive  notice  as a
shareholder  in respect of any  meetings  of  shareholders  for the  election of
directors  or  any  other  matter,  or as  having  any  rights  whatsoever  as a
shareholder of the Company.

      8.  Notices.  All notices,  requests,  consents  and other  communications
hereunder  shall be in  writing  and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:

            (a) If to the registered  Holder of this Warrant,  to the address of
such Holder as shown on the books of the Company; or

            (b) If to the Company, to the address set forth on the first page of
this Warrant or to such other  address as the Company may designate by notice to
the Holder.

      9.  Successors.  All  the  covenants,   agreements,   representations  and
warranties  contained  in this Warrant  shall bind the parties  hereto and their
respective heirs, executors, administrators,  distributees, permitted successors
and permitted  assigns.  This Warrant may not be  transferred  without the prior
written  consent of the Company.  Any  attempted  assignment in violation of the
preceding sentence shall be void and of no effect.

      10.  Holdings.  The  headings in this Warrant are inserted for purposes of
convenience only and shall have no substantive effect.

      11. Law Governing.  This Warrant is delivered in the State of New York and
shall be construed and enforced in accordance with, and governed by, the laws of
the State of New York,  without  giving  effect to conflicts of law  principles.
Each of the  parties  agrees to the  jurisdiction  of the federal  courts  whose
districts  encompass any part of the City of New York or the state courts of the
State of New York sitting in the City of New York in connection with any dispute
arising under this Warrant and hereby waives, to the maximum extent permitted by
law, any objection,  including any objection based on forum non  conveniens,  to
the bringing of any such proceeding in such jurisdictions.


                                       6
<PAGE>

      IN WITNESS  WHEREOF,  the Company has caused this  Warrant to be signed in
its  corporate  name  by,  and  such  signature  to be  attested  to by,  a duly
authorized officer as of the date first above written.

                                              DYNTEK, INC.

                                              By: ______________________________
                                                  Name: Steven J. Ross
                                                  Title: Chief Executive Officer
ACCEPTED AND AGREED:

Duncan Capital LLC

By: _______________________________
    Name:
    Title:


                                       7
<PAGE>

                                   ASSIGNMENT

                    (To Be Executed By the Registered Holder
                   to Effect a Transfer of the Within Warrant)

FOR VALUE RECEIVED _____________________________________________________________

hereby sells, assigns and transfers unto _______________________________________

________________________________________________________________________________
(Name)

________________________________________________________________________________
(Address)

________________________________________________________________________________

the right to purchase  Common  Stock  evidenced  by the within  Warrant,  to the
extent  ___________  of shares  of Common  Stock,  and does  hereby  irrevocably
constitute and appoint  ____________________________________________________  to
transfer  the  said  right on the  books  of the  Company,  with  full  power of
substitution.

Dated: ________________________, 20__.

                                                     ___________________________
                                                              (Signature)

________________________________________________________________________________

NOTICE:     The signature to this  assignment  must  correspond with the name as
            written  upon the case of the within  Warrant  in every  particular,
            without alteration or enlargement, or any change whatsoever and must
            be guaranteed by a bank, other than a savings bank or trust company,
            having an office or  correspondent  in New York, or by a firm having
            membership  on a  registered  national  securities  exchange  and an
            office in New York, New York.

<PAGE>

                              FORM OF SUBSCRIPTION

                  (To be signed only upon exercise of Warrant)

To DynTek, Inc.

The undersigned hereby elects to [check applicable subsection]:

      (a)   Purchase  _________________  (1)  shares of Common  Stock of DynTek,
            Inc.  pursuant  to the terms of the  attached  Warrant  and  tenders
            herewith  payment in full for the purchase price of the shares being
            purchased, together with all applicable transfer taxes, if any;

      OR

      (b)   Exercise  the  attached  Warrant for  ____________  shares of Common
            Stock  purchasable  under the Warrant  pursuant to the net  exercise
            provisions of Section 1 of such Warrant.

The undersigned hereby represents that:

      (a)   it is an  accredited  investor  within the meaning of  Regulation  D
            under the Act; and

      (b)   it is acquiring the Shares for its own account for investment  only,
            and not with a view towards, or for resale in connection with, their
            distribution.

Dated:

                                      __________________________________________
                                      (Signature must conform in all respects to
                                      name of Holder as specified on the face of
                                      the Warrants)

                                      __________________________________________
                                      (Address)

-----------------
      (1)   Insert  here the  maximum  number  of  shares  or,  in the case of a
            partial  exercise,  the  portion  thereof as to which the Warrant is
            being exercised.

</TEXT>
</DOCUMENT>
