An adaptive real-time analysis method for dynamic signals generated by rotary machines improves Vold-Kalman filtering order tracing technology to renew the algorithm logic so that on-line computation ability is achieved. Through signal simulation and practical engineering application to verify the availability, it shows that the output results are extremely accurate. As such, this method is advantaged to estimate the time-domain waveform of specific order signals for the operation of the rotary machines and to interpret the related physical phenomena. Moreover, this method can be applied for a digital signal processor (DSP) to obtain real-time and on-line computation of the order signals needed to be traced and to display the tracing time-domain waveform instantly.