Described is a system for estimating a trajectory of a borehole. The system processes signals of sensor streams obtained from an inertial sensor system. Using the set of processed signals, the system determines whether a drill is in a survey mode state or a continuous mode state, and a measured depth of the borehole is determined. A set of survey mode positioning algorithms is applied when the drill is stationary. A set of continuous mode navigation algorithms is applied when the drill is non-stationary. Using at least one Kalman filter, results of the set of survey mode positioning algorithms and the set of continuous mode navigation algorithms are combined. An estimate of a borehole trajectory and corresponding ellipse of uncertainty (EOU) is generated using the combined results.