Abstract: A method of digital automatic gain control does the required circulation without numerical multiplication or division and makes possible fast process control using a digital AGC. A signal channel has a digitally programmable variable gain device such as a multiplying digital-to-analog converter; the gain control input of the variable gain device is adjusted periodically to keep the exponential average of the digitized channel output signal with a given time constant at a desired average signal level. For instance, the vibration signal generated by a cutting process is held at a desired average prior to vibration pattern analysis to detect tool breakage and tool touch to a workpiece.