We describe a new dynamic optical tomography system that is, unlike currently available analog instrumentation, based on digital data-acquisition and filtering techniques. At the heart of this continuous wave instrument is a digital signal processor (DSP) that collects, collates, processes, and filters the digitized data set. A digital lock-in filter that has been designed for this particular application maximizes measurement fidelity. The synchronously-timed processes are controlled by a complex programmable logic device (CPLD) that is also used in conjunction with the DSP to orchestrate data flow. Real-time data rates as high as 140Hz can be achieved. The operation of the system is implemented through a graphical user interface designed with LabVIEW software, Performance analysis shows very low system noise (~600fW RMS noise equivalent power), excellent signal precision (<0.04% - 0.2%) and long-term system stability (<1% over 40 min). A large dynamic range (~195dB) accommodates a wide scope of measurement geometries and tissue types. First experiments on tissue phantoms show that dynamic behavior is accurately captured and spatial location can be correctly tracked using this system.