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In the realm of “semi-active” suspension systems, this paper describes a truly “active damping” system. Thorough research and development of low voltage Electro-Rheological Magnetic (ERM) fluids, a revived rotary shock absorber suspension philosophy and a newly developed control algorithm have resulted in an active damping system that resolves the selection between ride comfort and handling performance. The ERM fluid technology, rotary shock absorber configuration and Digital Signal Processor (DSP) technology have advantages of transmitting high forces in a small compact package. The DSP controls the elements that digitize analog sensor signals and through software, result in active damping. We call the actuator the Rotary Active Control Damper (RACD, pronounced “rack-dee”). The variety of on-board sensors makes it possible to adjust vehicle performance through software.