  We report NuSTAR observations of the millisecond pulsar - low mass X-ray
binary (LMXB) transition system PSR J1023+0038 from June and October 2013,
before and after the formation of an accretion disk around the neutron star.
Between June 10-12, a few days to two weeks before the radio disappearance of
the pulsar, the 3-79 keV X-ray spectrum was well fit by a simple power law with
a photon index of Gamma=1.17 +/-0.08 (at 90% confidence) with a 3-79 keV
luminosity of 7.4+/-0.4 x 10^32 erg/s. Significant orbital modulation was
observed with a modulation fraction of 36+/-10%. During the October 19-21
observation, the spectrum is described by a softer power law
(Gamma=1.66+/-0.06) with an average luminosity of 5.8+/-0.2 x 10^33 erg/s and a
peak luminosity of ~1.2 x 10^34 erg/s observed during a flare. No significant
orbital modulation was detected. The spectral observations are consistent with
previous and current multi-wavelength observations and show the hard X-ray
power law extending to 79 keV without a spectral break. Sharp edged, flat
bottomed `dips' are observed with widths between 30-1000 s and ingress and
egress time-scales of 30-60 s. No change in hardness ratio was observed during
the dips. Consecutive dip separations are log-normal in distribution with a
typical separation of approximately 400 s. These dips are distinct from dipping
activity observed in LMXBs. We compare and contrast these dips to observations
of dips and state changes in the similar transition systems PSR J1824-2452I and
XSS J1227.0-4859 and discuss possible interpretations based on the transitions
in the inner disk.
