The sensor incorporates a dual element Hall IC that switches in response to differential magnetic signals created by a ferrous target. The IC contains a sophisticated compensating circuit designed to reduce the detrimental effects of magnet and system offsets. Digital processing of the analog signal provides zero speed performance independent of air gap and also dynamic adaptation of device performance to the typical operating conditions found in automotive applications (reduced vibration sensitivity). Highresolution peak detecting DACs are used to set the adaptive switching thresholds of the device. Hysteresis in the thresholds reduces the negative effects of any anomalies in the magnetic signal associated with the targets used in many automotive applications.