An improved Digital Correlation Method (DCM) was developed to measure a small displacement and strain with a high accuracy. One additional technique was incorporated into the conventional DCM system. The Lagrange interpolation technique was newly developed in order to determine the value of the intensity at an arbitrary position. This technique was developed to raise a precision in determination of an identical position between two image planes; the sample surface images before/after deformation. The results obtained using various methods were compared. The modified DCM method with both the Lagrange interpolation and nonlinear strain distribution in subset was found to be good technique for detecting the two dimensional deformation. The DCM system was found to be effective method to strain measurement in the vicinity of notch root.