A FALCON 20 ON THE TEB DALTON DEP EXCEEDED THE INITIAL LEVEL OFF ALT WHEN THE AUTOPLT FAILED TO CAPTURE 1300 FT.

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WE WERE CLRED FOR TAKEOFF FROM TEB VIA THE RWY 19 DALTON DEP. AFTER TAKEOFF THE PLT IS TO MAINTAIN VFR; FLY RWY HEADING TO 800 FT; THEN TURN R TO 280 DEG HEADING AND MAINTAIN 1300 FT UNTIL CLRED TO CLB. AFTER TAKEOFF; I REDUCED PWR AND UPON COMPLETING THE TURN TO 280 DEGS; I ENGAGED THE AUTOPLT CLBING AT 350 FT PER MINUTE. BOTH THE CO-PLT AND MYSELF CALLED 'ALTITUDE CAPTURE' AS PER SOPS AND OBSERVED THE FLASHING 'ALTITUDE CAPTURE' ANNUNCIATION ON THE ADI'S. SECONDS AFTER CONFIRMING ALTITUDE CAPTURE; I GLANCED AT THE ALTIMETER AGAIN AND REALIZED THE ACFT WAS STILL CLBING. THE 'ALTITUDE CAPTURE' ANNUNCIATION HAD DISAPPEARED AND WAS NOW REPLACED WITH A 300 FPM CLB RATE ANNUNCIATION. I IMMEDIATELY PUSHED THE NOSE OVER; STOPPING THE CLB AT 1400 FT AND DSNDED BACK TO 1300 FT. AS I STOPPED THE CLB; NY CALLED SAYING THEY SHOWED US AT 1500 FT. THIS WAS THE BUSIEST TIME OF THE FLT; AND NEITHER THE CO-PLT NOR MYSELF CAN IDENTIFY FOR CERTAIN WHAT HAPPENED TO CAUSE THIS. POSSIBLE EXPLANATIONS MAY BE: 1) THE AUTOPLT PITCH CTL KNOB MAY HAVE BEEN BUMPED AFTER ALTITUDE CAPTURE. 2) THE FLT DIRECTOR V/S BUTTON MAY HAVE BEEN ACCIDENTALLY DEPRESSED AFTER ALTITUDE CAPTURE. 3) AN UNFORTUNATE 'GLITCH' WITH THE AUTOPLT; MALFUNCTIONING AT JUST THE WRONG TIME. REVIEWING THE DALTON DEP AFTER THE FLT; I REALIZED FOR THE FIRST TIME THAT THE ALT ASSIGNMENT READS; 'MAINTAIN VFR AT OR BELOW 1300 FT.' IN THE FUTURE I PLAN TO SET THE ALTITUDE ALERTER TO 1200 FT INSTEAD OF 1300 FT TO PREVENT THIS PROB.