The present invention provides a per-flow dynamic buffer management scheme for a data communications device. With per-flow dynamic buffer limiting, the header information for each packet is mapped into an entry in a flow table, with a separate flow table provided for each output queue. Each flow table entry maintains a buffer count for the packets currently in the queue for each flow. On each packet enqueuing action, a dynamic buffer limit is computed for the flow and compared against the buffer count already used by the flow to make a mark, drop, or enqueue decision. A packet in a flow is dropped or marked if the buffer count is above the limit. Otherwise, the packet is enqueued and the buffer count incremented by the amount used by the newly-enqueued packet. The scheme operates independently of packet data rate and flow behavior, providing means for rapidly discriminating well-behaved flows from non-well-behaved flows in order to manage buffer allocation accordingly. Additionally, the present invention adapts to changing flow requirements by fairly sharing buffer resources among both well-behaved and non-well-behaved flows.