The Department of Defense has developed new sensor technologies to support military forces operating in Iraq and Afghanistan. These new capabilities may be useful in counterdrug operations along the southern U.S. border. DoD has held technology demonstrations to test and demonstrate new technologies along the southern border, because the field conditions along the border closely resemble those in current military theaters of operation and because they can also reveal whether new technologies are useful for CD operations led by domestic law enforcement agencies. However, there are legal questions about whether such technology demonstrations fully comply with U.S. law and whether advanced DoD sensors can legally be used in domestic CD operations when they are operated by U.S. military forces. In this report, the authors examine federal law and DoD policy to answer these questions. Some parts of U.S. law mandate information sharing among federal departments and agencies for national security purposes and direct DoD to play a key role in domestic CD operations in support of U.S. law enforcement agencies, while other parts of the law place restrictions on when the U.S. military may participate in law enforcement operations. Reviewing relevant federal law and DoD policy, the authors conclude that there is no legal reason why a DoD sensor should be excluded from use in an interagency technology demonstration or in an actual CD operation as long as a valid request for support is made by an appropriate law enforcement official and so long as no personally identifiable or private information is collected. The authors recommend DoD policy on domestic CD operations be formally clarified and that an approval process should be established for technology demonstrations with a CD nexus.