The changes needed in the mathematical description of differential scanning calorimetry caused by periodical modulation of temperature are presented. Calibration procedures and possible extensions of the method are suggested, all based on the model of scanning calorimetry without temperature gradient within the sample. The basic differential equation for heat flow under modulation conditions is solved and the steady state identified. The main advantage of modulated differential thermal analysis is the elimination of nonperiodic heat losses and gains. It is suggested that the precision of heat capacity measurement may be increased by a factor of 10 using proper calibration. The thermal analysis in transition regions is discussed.