A method for processing a video data stream including a series of pixel values corresponding to pixel sites in an electronic imaging device includes the step of filtering the video data stream in real time to correct or modify defective pixel values based on a plurality of neighboring pixel values. The filtering of each pixel value uses a current pixel value as part of a data set including the neighboring pixel values in determining whether and/or how to correct or modify the current pixel value. The pixel values which are most severely defective are identified and stored. A first filtering algorithm is applied to those pixels whose locations are not stored, and a second filtering algorithm is applied to the most severely defective pixels whose locations have been stored. The filtering algorithm includes sorting the current pixel value and the neighboring pixel values into a rank order and modifying the current pixel value on the basis of its place in the rank order.