Quoted:
Here some info I found on the subject:
THE “PRE-81” DROP-IN AUTO SEAR
The “pre-81” DIAS - commonly advertised in Shotgun News for about $125-$200 are a completely different item than a registered DIAS. Prior to 1981 it was legal to make and own these sears without necessarily registering them as machineguns. BATF eventually caught on, and in 1981 issued a ruling that the sears were considered machinegun conversion parts and sears made after 1981 had to be registered (tax paid) and transfer as any other NFA item (these became the registered ones referred to above). BATF grandfathered the unregistered sears made prior to 1981, but sears made after 1981 had to either be registered or are considered unregistered machineguns - a serious felony. IT IS A FELONY TO POSSESS BOTH A PRE-81 DROP-IN AUTO SEAR AND AN AR15 - UNDER NO CIRCUMSTANCES CAN AN INDIVIDUAL LEGALLY USE A PRE-81 DIAS IN AN AR15. Technically, you are allowed to possess an unregistered DIAS which was made prior to 1981, but you cannot possess one if you own an AR15 - it’s one or the other, but not both. Obviously, this rule makes possession of a pre-81 DIAS useless - if you cannot own the rifle it goes in, about all you can do with them is to make cufflinks, earrings, or a very small paperweight.
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Scarecrow - Where did you find that? I wrote that artical several years ago when it was originally posted as a FAQ to the FUN Supply Boards before they closed down. Every once in a while I'll get an email about sears to my old address, but I just figured people had copied the text and passed it around - not that it was still on an active page.
Unfortunately at the time I wrote it, I was not aware of US v. Cash and a few other important cases that drastically affect the legality of the possession of an unregistered DIAS...regardless of whether it was made prior to the 1981 BATF ruling or not.
In Cash, the 7th Circuit Court of appeals ruled that BATF did not have the power to declare a DIAS a machinegun, but exempt DIAS made prior to the ruling. In other words, BATF can rule a DIAS is a machinegun, but they cannot pick and choose which DIAS's are machineguns and which are not. The 1981 date, the court said was only effective for a tax-paid (free) registration of sears made prior to the ruling. That is, if you had a sear that was made prior to the 1981 BATF ruling, you could register it as a machinegun for free instead of paying the normal $200 making tax. This period of free registration ended however, in 1986 when the future manufacture & registration of all MGs for civie use/possession was prohibited by statute. Therefore DIAS's fall into either one of two categories - either registered or unregistered. The 1981 date is no longer useful, as if the DIAS wasn't registered by 1986, it is forever an unregistered machinegun and thus illegal.
Now, Cash is only effective in the 7th US Circuit. It is not yet applicable in any other jurisdiction. However, it should be noted that Cash was a very logical decision with a well known and respected judge, Frank Easterbrook, writing the opinion. WHEN (...and I say "when", because its only a matter of time) the issue is tested in another Circuit, they will follow Cash. Believe me, you do NOT want to be the test case in another jurisdiction for this issue - you'll lose big.